GE CAPITAL LIFE SEPARATE ACCOUNT II, 485BPOS, 2000-05-01

GE CAPITAL LIFE SEPARATE ACCOUNT II
485BPOS, 2000-05-01

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<PAGE>

As filed with the Securities and Exchange Commission on May 1, 2000

Registration No. 333-39955
Registration No. 811-8475

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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

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Pre-Effective Amendment No.
Post-Effective Amendment No. 3

For Registration Under the Investment Company Act of 1940
Amendment No. 4

GE Capital Life Separate Account II
(Exact Name of Registrant)

GE Capital Life Assurance Company of New York
(Name of Depositor)

125 Park Avenue, 6th Floor
New York, New York 10017-5529
(Address of Depositor's Principal Executive Office)
Depositor's Telephone Number: (212) 672-4400

Barry Grosman
GE Capital Life Assurance Company of New York
125 Park Avenue, 6th Floor
New York, New York 10017-5529
(Name and address of Agent for Service)

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Copy to:
Stephen E. Roth, Esquire
Sutherland Asbill & Brennan LLP
1275 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-2415

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It is proposed that this filing will become effective:

[_] immediately upon filing pursuant to paragraph (b) of Rule 485

[X] on May 1, 2000 pursuant to paragraph (b) of Rule 485

[_] 60 days after filing pursuant to paragraph (a)(1) of Rule 485

[_] on pursuant to paragraph (a)(1) of Rule 485

[_] 75 days after filing pursuant to paragraph (a)(2) of Rule 485

[_] on pursuant to paragraph (a)(2) of Rule 485

Title of Securities Being Registered: Interests in a Separate Account under
Individual
Flexible Premium Variable Deferred Annuity
Policies

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<PAGE>

GE Capital Life Separate Account II
Prospectus For The
Flexible Premium Variable Deferred Annuity Policy
Form P1066 6/97

Issued by:
GE Capital Life Assurance Company of New York
125 Park Avenue, 6th Floor, New York, New York 10017-5529
Telephone: (212) 672-4400

Variable Annuity Servicing Center
6610 West Broad Street
Richmond, VA 23230
(800) 313-5282

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This Prospectus describes a flexible premium variable deferred annuity policy
(the "Policy") for individuals and some qualified and nonqualified retirement
plans. GE Capital Life Assurance Company of New York (the "Company," "we,"
"us," or "our") issues the Policy.

The Policy offers you the accumulation of Account Value and the payment of
periodic annuity benefits. We may pay these benefits on a variable or fixed
basis or a combination of both.

You may allocate your premium payments to the Separate Account, the Guarantee
Account, or both. Each Investment Subdivision of the Separate Account invests
in shares of the Funds. We list the Funds, and their currently available
portfolios, below.

The Alger American Fund:
Alger American Growth Portfolio, Alger American Small Capitalization
Portfolio

Federated Insurance Series:
Federated American Leaders Fund II, Federated High Income Bond Fund II,
Federated Utility Fund II

Fidelity Variable Insurance Products Fund (VIP):
VIP Equity-Income Portfolio, VIP Growth Portfolio, VIP Overseas Portfolio

Fidelity Variable Insurance Products Fund II (VIP II):
VIP II Asset Manager Portfolio, VIP II Contrafund(R) Portfolio

Fidelity Variable Insurance Products Fund III (VIP III):
VIP III Growth & Income Portfolio, VIP III Growth Opportunities Portfolio

GE Investments Funds, Inc.:

Global Income Fund, Income Fund, International Equity Fund, Mid-Cap Value
Equity Fund (formerly known as Value Equity Fund), Money Market Fund,
Premier Growth Equity Fund, Real Estate Securities Fund, S&P 500(R) Index
Fund, Total Return Fund, U.S. Equity Fund

Goldman Sachs Variable Insurance Trust (VIT):
Goldman Sachs Growth and Income Fund, Goldman Sachs Mid Cap Value Fund
(formerly known as Mid Cap Equity Fund)

Janus Aspen Series:
Aggressive Growth Portfolio, Balanced Portfolio, Capital Appreciation
Portfolio, Flexible Income Portfolio, Growth Portfolio, International Growth
Portfolio, Worldwide Growth Portfolio
<PAGE>

Oppenheimer Variable Account Funds:
Oppenheimer Aggressive Growth Fund/VA, Oppenheimer Bond Fund/VA, Oppenheimer
Capital Appreciation Fund/VA, Oppenheimer High Income Fund/VA, Oppenheimer
Multiple Strategies Fund/VA

PBHG Insurance Series Fund, Inc.

PBHG Growth II Portfolio, PBHG Large Cap Growth Portfolio

Salomon Brothers Variable Series Funds Inc:
Salomon Investors Fund, Salomon Strategic Bond Fund, Salomon Total Return
Fund

Not all of these portfolios may be available.

Except for amounts in the Guarantee Account, both the value of a Policy before
the Maturity Date and the amount of monthly income afterward will depend upon
the investment performance of the portfolio(s) you select. You bear the
investment risk of investing in the portfolios.

The Securities and Exchange Commission has not approved these securities or
determined if this Prospectus is truthful or complete. Any representation to
the contrary is a criminal offense.

Your investment in the Policy is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any government
agency.

This Prospectus gives details about the Separate Account and our Guarantee
Account that you should know before investing. Please read this Prospectus
carefully and keep it for future reference.

A statement of additional information ("SAI"), dated May 1, 2000, concerning
the Separate Account has been filed with the Securities and Exchange Commission
("SEC") and is incorporated by reference into this Prospectus. If you would
like a free copy, call us at 1-800-352-9910. The SAI also is available on the
SEC's website at http://www.sec.gov. A table of contents for the SAI appears on
the last page of this Prospectus.

The date of this Prospectus is May 1, 2000.

2
<PAGE>

Table of Contents

<TABLE>
<S> <C>
Definitions................................................................. 4

Expense Table............................................................... 6

Synopsis.................................................................... 13

Investment Results.......................................................... 16

Financial Statements........................................................ 17

GE Capital Life Assurance Company of New York............................... 18

Separate Account............................................................ 19

The Guarantee Account....................................................... 29

Charges and Other Deductions................................................ 31

The Policy.................................................................. 35

Transfers................................................................... 38

Surrenders.................................................................. 41

The Death Benefit........................................................... 43

Income Payments............................................................. 47

Federal Tax Matters......................................................... 51

Voting Rights............................................................... 60

Requesting Payments......................................................... 61

Distribution of the Policies................................................ 62

Additional Information...................................................... 63

Condensed Financial Information............................................. 65

Appendix.................................................................... A-1

Table of Contents for Statement of Additional Information
</TABLE>

This Prospectus does not constitute an offering in any jurisdiction in which
such offering may not lawfully be made.

3
<PAGE>

Definitions

We have tried to make this Prospectus as understandable as possible. However,
in explaining how the Policy works, we have had to use certain terms that have
special meanings. We define these terms below.

Account Value -- The value of the Policy equal to the amount allocated to the
Investment Subdivisions of the Separate Account and the Guarantee Account.

Accumulation Unit -- An accounting unit of measure we use in calculating the
Account Value in the Separate Account before the Maturity Date.

Annuitant -- The Annuitant is the person named in the Policy upon whose age
and, where appropriate, sex, we determine monthly income benefits.

Annuity Unit -- An accounting unit of measure we use in the calculation of the
amount of the second and each subsequent variable income payment.

Business Day -- Any day that the New York Stock Exchange is open for business
(except for days on which a Fund does not value its shares) and any other day
in which there is a material change in the value of the assets in the Separate
Account.

Death Benefit -- The benefit provided under a Policy upon the death of an
Annuitant before the Maturity Date.

Designated Beneficiary(ies) -- The person(s) designated in the Policy who is
alive (or in existence for non-natural entities) on the date of an Owner's,
Joint Owner's or Annuitant's death and who we will treat as the sole Owner of
the Policy following such a death.

Fund -- Any open-end management investment company or unit investment trust in
which the Separate Account invests.

General Account -- Our assets that are not segregated in any of our separate
investment accounts.

Guarantee Account -- Part of our General Account that provides a guaranteed
interest rate for a specified interest rate guarantee period. This account is
not part of and does not depend on the investment performance of the Separate
Account.

Investment Subdivision -- A subdivision of the Separate Account; each
Investment Subdivision invests exclusively in shares of a designated portfolio
of one of the Funds. Not all Investment Subdivisions may be available.

Maturity Date -- The date stated in the Policy on which your income payments
will commence, if the Annuitant is living on that date.

Owner -- The person or persons (in the case of Joint Owners) entitled to
receive income payments after the Maturity Date. During the lifetime of the
Annuitant, the

4
<PAGE>

Owner also is entitled to the ownership rights stated in the Policy and is
shown in the Policy and in any application. "You" or "your" refers to the Owner
or Joint Owners.

Policy Date -- The date we issue your Policy and your Policy becomes effective.
Your Policy Date is shown in your Policy and we use it to determine Policy
years and anniversaries.

Separate Account -- GE Capital Life Separate Account II.

Surrender Value -- The Account Value (after deduction of any policy maintenance
charge and any optional benefit changes) less any applicable surrender charge.

Valuation Period -- The period between the close of business on a Business Day
and the close of business on the next succeeding Business Day.

Variable Annuity Service Center -- The office to which all written and
telephone inquiries concerning the Policy or portfolios of the Funds should be
made: 6610 West Broad Street, Richmond, VA 23230, 1-800-313-5282.

5
<PAGE>

Expense Table

This table describes the various costs and expenses that you will pay (either
directly or indirectly) if you purchase the Policy. The table reflects expenses
both of Investment Subdivisions of the Separate Account and of the portfolios.
For more complete descriptions of the various costs and expenses involved, See
Charges and Other Deductions in this Prospectus, and the Fund prospectuses.

<TABLE>
<S> <C>
Owner Transaction Expenses:
The maximum surrender charge (as a percentage of each premium
payment surrendered/withdrawn):................................... 6%
We reduce the surrender charge percentage over time. In general,
the later you surrender or withdraw a premium payment, the lower
the surrender charge will be on that premium payment.
(Note: We may waive the surrender charge in certain cases. See
Surrender Charge.)
Transfer Charge:
First 12 transfers in a calendar year............................ None
Annual Expenses (as a percentage of Account Value):
Subsequent transfers (each)...................................... $10.00
Mortality and Expense Risk Charge.................................. 1.25%
Administrative Expense Charge...................................... .15%
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Total Annual Expenses.............................................. 1.40%
Other Annual Expenses:
Annual Policy Maintenance Charge................................... $25.00*
Maximum Elective Optional Death Benefit Charge ("ODB")
(as a percentage of Account Value)................................ .25%**
</TABLE>

* We do not assess this charge if your Account Value at the time the charge is
due is more than $75,000.
** If the Optional Death Benefit applies. (This may be referred to as the
"Annual Estate Protector" in our marketing materials.)

6
<PAGE>

Portfolio Annual Expense Table

PORTFOLIO ANNUAL EXPENSES

Annual expenses of the portfolios of the Funds for the year ended December 31,
1999 (as a percentage of each portfolio's average net assets):

<TABLE>
<CAPTION>
Management Fees Other Expenses
(after fee waivers (after reimbursement Total Annual
Portfolio as applicable) as applicable) Expenses
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
The Alger American Fund
Alger American Small
Capitalization Portfolio 0.85% 0.05% 0.90%
Alger American Growth
Portfolio 0.75 0.04 0.79
Federated Insurance Series
Federated American
Leaders Fund II 0.75 0.13 0.88
Federated High Income
Bond Fund II 0.60 0.19 0.79
Federated Utility Fund II 0.75 0.19 0.94
Fidelity Variable
Insurance Products
Fund*/1/
VIP Equity-Income
Portfolio 0.48 0.09 0.57
VIP Growth Portfolio 0.58 0.08 0.66
VIP Overseas Portfolio 0.73 0.18 0.91
Fidelity Variable
Insurance Products Fund
II*/2/
VIP II Asset Manager
Portfolio 0.53 0.10 0.63
VIP II Contrafund
Portfolio 0.58 0.09 0.67
Fidelity Variable
Insurance Products Fund
III*/3/
VIP III Growth & Income
Portfolio 0.48 0.12 0.60
VIP III Growth
Opportunities Portfolio 0.58 0.11 0.69
GE Investments Funds/4/,
Inc.
Global Income Fund 0.60 0.14 0.74
Income Fund 0.50 0.07 0.57
International Equity Fund 1.00 0.08 1.08
Mid-Cap Value Equity Fund
(formerly known as Value
Equity Fund) 0.65 0.06 0.71
Money Market Fund 0.24 0.06 0.30
Premier Growth Equity
Fund 0.65 0.03 0.68
Real Estate Securities
Fund 0.85 0.09 0.94
S&P 500 Index Fund 0.35 0.04 0.39
Total Return Fund 0.50 0.06 0.56
U.S. Equity Fund 0.55 0.06 0.61
Goldman Sachs Variable
Insurance Trust/5/
Goldman Sachs Growth and
Income Fund 0.75 0.25 1.00
Goldman Sachs Mid Cap
Value Fund (formerly
known as Mid Cap Equity
Fund) 0.80 0.25 1.05
Janus Aspen Series/6/
Aggressive Growth
Portfolio 0.65 0.02 0.67
Balanced Portfolio 0.65 0.02 0.67
Capital Appreciation
Portfolio 0.65 0.04 0.69
Flexible Income Portfolio 0.65 0.07 0.72
Growth Portfolio 0.65 0.02 0.67
International Growth
Portfolio 0.65 0.11 0.76
Worldwide Growth
Portfolio 0.65 0.05 0.70
</TABLE>

7
<PAGE>

* The fees and expenses reported for the Variable Insurance Products Fund
(VIP), Variable Insurance Products Fund II (VIP II) and Variable Insurance
Products Fund III (VIP III) are prior to any fee waiver and/or
reimbursement as applicable.

/1/A portion of the brokerage commissions that certain funds pay was used to
reduce fund expenses. In addition, certain funds, or FMR on behalf of
certain funds, have entered into arrangements with their custodian whereby
credits realized as a result of uninvested cash balances were used to
reduce custodian expenses. With reimbursements, the expenses of the
portfolios of the Variable Insurance Products Fund during 1999 for the VIP
Equity-Income Portfolio would have been total annual expenses of .56%,
consisting of .48% management fees and .08% other expenses; for VIP
Overseas Portfolio total annual expenses of .87%, consisting of .73%
management fees and .14% other expenses; for VIP Growth Portfolio total
annual expenses of .65%, consisting of .58% management fees and .07% other
expenses.

/2/A portion of the brokerage commissions that certain funds pay was used to
reduce fund expenses. In addition, certain funds, or FMR on behalf of
certain funds, have entered into arrangements with their custodian whereby
credits realized as a result of uninvested cash balances were used to
reduce custodian expenses. With reimbursements, the expenses of the
portfolios of the Variable Insurance Products Fund II during 1999 for VIP
II Asset Manager Portfolio would have been total annual expenses of .62%,
consisting of .53% management fees and .09% other expenses; for VIP II
Contrafund Portfolio total annual expenses of .65%, consisting of .58%
management fees and .07% other expenses.

/3/A portion of the brokerage commissions that certain funds pay was used to
reduce fund expenses. In addition, certain funds, or FMR on behalf of
certain funds, have entered into arrangements with their custodian whereby
credits realized as a result of uninvested cash balances were used to
reduce custodian expenses. With reimbursements, the expenses of the
portfolios of the Variable Insurance Products Fund III during 1999 for VIP
III Growth & Income Portfolio would have been total annual expenses of
.59%, consisting of .48% management fees and .11% other expenses; for VIP
III Growth Opportunities Portfolio total annual expenses of .68%,
consisting of .58% management fees and .10% other expenses.

/4/GE Asset Management Incorporated ("GEAM") has voluntarily agreed to waive
a portion of its management fee for the Money Market Fund. Absent this
waiver, the total annual expenses of the Fund would have been 0.50%,
consisting of 0.44% in management fees and 0.06% in other expenses. Also,
GEAM voluntarily limited other expenses for the GE Premier Growth Equity
Fund for the period from May 1, 1999 through April 30, 2000, which
limitation was discontinued effective May 1, 2000. Absent that expense
limitation, the total annual expenses of the Fund would have been 0.72%,
consisting of 0.65% in management fees and 0.07% in other expenses.

8
<PAGE>

/5/Goldman Sachs Asset Management has voluntarily agreed to reduce or limit
certain other expenses (excluding management fees, taxes, interest,
brokerage fees, litigation, indemnification and other extraordinary
expenses) to the extent such expenses exceed 0.25% of each Fund's
respective average daily net assets. The investment adviser may modify or
discontinue any of the limitations. Absent reimbursements, the expenses
during 1999 would have been total annual expenses of 1.22% for Growth and
Income Fund, consisting of .75% management fees and .47% other expenses;
and total annual expenses of 1.22% for Mid Cap Value Fund, consisting of
.80% management fees and .42% other expenses.

/6/Janus Aspen Series expenses are based upon expenses for the fiscal year
ended December 31, 1999, restated to reflect a reduction in the management
fees for Growth, Aggressive Growth, Capital Appreciation, International
Growth, Worldwide Growth, Balanced, and Income Portfolios. All expenses are
shown without the effect of expense offset arrangements.

/7/Absent fee waivers the total annual operating expenses of the portfolios
during 1999 for PBHG Large Cap Portfolio would have been total annual
expenses of 1.17% for PBHG Large Cap Growth Portfolio consisting of .75%
management fees and .42% other expenses.

/8/Absent certain fee waivers or reimbursements, the total annual expenses of
the portfolios of Salomon Brothers Variable Series Fund during 1999 for
Investors Fund would have been total annual expenses of 1.15%, consisting
of .70% management fees and .45% other expenses; for Strategic Bond Fund
total annual expenses of 1.48%, consisting of .75% management fees and .73%
other expenses; for Total Return Fund, total annual expenses of 1.65%,
consisting of .80% management fees and .85% other fees.

EXAMPLES

These examples show what your costs would be under certain hypothetical
situations. The examples do not represent past or future expenses. Your actual
expenses may be more or less than those shown. The examples are based on the
annual expenses of the portfolios of the Funds for the year ended December 31,
1999 (shown above in Portfolio Annual Expenses). These expenses, and therefore,
the examples, reflect certain fee waivers and reimbursements provided by some
of the Funds. We cannot guarantee that these fee waivers and reimbursements
will continue. The examples assume that the $25 policy maintenance charge is
equivalent to 0.1% of Account Value attributable to the hypothetical investment
(this charge will be waived if the Account Value is more than $75,000 at the
time the charge is due). To the extent the examples reflect the charge for the
Optional Death Benefit Rider, the examples assume that the maximum charge
applies.

9
<PAGE>

EXAMPLES: A Policyowner would pay the following expense on a $1,000 investment,
assuming a 5% annual return on assets and the charges and expenses reflected in
the Expense Table above:

1. If you surrender* your Policy at the end of the applicable period:

<TABLE>
<CAPTION>
Without ODB Rider
--------------------------
1 3 5 10
Investment Subdivision Investing In: Year Years Years Years
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alger American Fund
Alger American Growth Portfolio.................... 77.05 125.03 157.94 262.55
Alger American Small Capitalization Portfolio...... 78.15 128.37 163.50 273.63
Federated Insurance Series
Federated American Leaders Fund II................. 77.95 127.77 162.49 271.63
Federated High Income Bond Fund II................. 77.05 125.03 157.94 262.55
Federated Utility Fund II.......................... 78.56 129.58 165.51 277.63
Fidelity Variable Insurance Products Fund (VIP)
VIP Equity-Income Portfolio........................ 74.82 118.33 146.73 240.00
VIP Growth Portfolio............................... 75.74 121.07 151.33 249.29
VIP Overseas Portfolio............................. 78.25 128.67 164.00 274.63
Fidelity Variable Insurance Products Fund (VIP II)
VIP II Asset Manager Portfolio..................... 75.44 120.17 149.80 246.21
VIP II Contrafund Portfolio........................ 75.84 121.39 151.84 250.32
Fidelity Variable Insurance Products Funds (VIP III)
VIP III Growth & Income Portfolio.................. 75.13 119.24 148.27 243.11
VIP III Growth Opportunities Portfolio............. 76.04 121.99 152.87 252.37
GE Investments Funds, Inc.
Global Income Fund................................. 76.54 123.51 155.41 257.48
Income Fund........................................ 74.82 118.33 146.73 240.00
International Equity Fund.......................... 79.96 133.80 172.52 291.47
Mid-Cap Value Equity Fund (formerly known as Value
Equity Fund)...................................... 76.24 122.60 153.88 254.42
Money Market Fund.................................. 72.10 110.05 132.80 211.59
Premier Growth Equity Fund......................... 75.94 121.69 152.35 251.35
Real Estate Securities Fund........................ 78.56 129.58 165.51 277.63
S & P 500 Index Fund............................... 73.00 112.81 137.47 221.15
Total Return Fund.................................. 74.72 118.03 146.22 238.97
U.S. Equity Fund................................... 75.23 119.55 148.78 244.14
Goldman Sachs Variable Insurance Trust
Goldman Sachs Growth and Income Fund............... 79.16 131.39 168.52 283.59
Goldman Sachs Mid Cap Value Fund................... 79.66 132.90 171.03 288.52
Janus Aspen Series
Aggressive Growth Portfolio........................ 75.84 121.39 151.84 250.32
Balanced Portfolio................................. 75.84 121.39 151.84 250.32
Capital Appreciation Portfolio..................... 76.04 121.99 152.87 252.37
Flexible Income Portfolio.......................... 76.34 122.91 154.39 255.44
Growth Portfolio................................... 75.84 121.39 151.84 250.32
International Growth Portfolio..................... 76.75 124.12 156.42 259.51
Worldwide Growth Portfolio......................... 76.14 122.30 153.37 253.39
Oppenheimer Variable Account Funds
Oppenheimer Aggressive Growth Fund/VA.............. 75.84 121.39 151.84 250.32
Oppenheimer Bond Fund/VA........................... 76.44 123.21 154.89 256.46
Oppenheimer Capital Appreciation Fund/VA........... 76.14 122.30 153.37 253.39
Oppenheimer High Income Fund/VA.................... 76.65 123.82 155.91 258.49
Oppenheimer Multiple Strategies Fund/VA............ 76.44 123.21 154.89 256.46
</TABLE>

10
<PAGE>

<TABLE>
<CAPTION>
Without ODB Rider
--------------------------
1 3 5 10
Investment Subdivision Investing In: Year Years Years Years
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PBHG Insurance Series Fund, Inc.
PBHG Growth II Portfolio............................ 81.17 137.41 178.50 303.18
PBHG Large Cap Growth Portfolio..................... 80.17 134.41 173.53 293.43
Salomon Brothers Variable Series Funds Inc
Salomon Investors Fund.............................. 78.96 130.78 167.52 281.60
Salomon Strategic Bond Fund......................... 79.16 131.39 168.52 283.59
Salomon Total Return Fund........................... 79.16 131.39 168.52 283.59
* surrender includes annuitization over a period of less than 5 years
</TABLE>
2. If you annuitize at the end of the applicable period, or do not surrender*:
<TABLE>
<CAPTION>
Without ODB Rider
-------------------------
1 3 5 10
Investment Subdivision Investing In: Year Years Years Years
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alger American Fund
Alger American Growth Portfolio..................... 23.21 71.53 122.51 262.55
Alger American Small Capitalization Portfolio....... 24.31 74.85 128.05 273.63
Federated Insurance Series
Federated American Leaders Fund II.................. 24.11 74.25 127.04 271.63
Federated High Income Bond Fund II.................. 23.21 71.53 122.51 262.55
Federated Utility Fund II........................... 24.71 76.05 130.05 277.63
Fidelity Variable Insurance Products Fund (VIP)
VIP Equity-Income Portfolio......................... 21.00 64.87 111.35 240.00
VIP Growth Portfolio................................ 21.91 67.60 115.93 249.29
VIP Overseas Portfolio.............................. 24.41 75.15 128.55 274.63
Fidelity Variable Insurance Products Fund (VIP II)
VIP II Asset Manager Portfolio...................... 21.61 66.70 114.41 246.21
VIP II Contrafund Portfolio......................... 22.01 67.91 116.44 250.32
Fidelity Variable Insurance Products Fund (VIP III)
VIP III Growth & Income Portfolio................... 21.30 65.78 112.88 243.11
VIP III Growth Opportunities Portfolio.............. 22.21 68.51 117.46 252.37
GE Investments Funds, Inc.
Global Income Fund.................................. 22.71 70.02 119.99 257.48
Income Fund......................................... 21.00 64.87 111.35 240.00
Mid-Cap Value Equity Fund (formerly known as Value
Equity Fund)....................................... 22.41 69.12 118.47 254.42
International Equity Fund........................... 26.11 80.25 137.03 291.47
Money Market Fund................................... 18.29 56.64 97.48 211.59
Premier Growth Equity Fund.......................... 22.11 68.21 116.95 251.35
Real Estate Securities Fund......................... 24.71 76.05 130.05 277.63
S & P 500 Index Fund................................ 19.19 59.39 102.13 221.15
Total Return Fund................................... 20.90 64.57 110.84 238.97
U.S. Equity Fund.................................... 21.40 66.09 113.39 244.14
Goldman Sachs Variable Insurance Trust
Goldman Sachs Growth and Income Fund................ 25.31 77.85 133.05 283.59
Goldman Sachs Mid Cap Value Fund.................... 25.81 79.35 135.54 288.52
Janus Aspen Series
Aggressive Growth Portfolio......................... 22.01 67.91 116.44 250.32
Balanced Portfolio.................................. 22.01 67.91 116.44 250.32
Capital Appreciation Portfolio...................... 22.21 68.51 117.46 252.37
Flexible Income Portfolio........................... 22.51 69.42 118.98 255.44
Growth Portfolio.................................... 22.01 67.91 116.44 250.32
International Growth Portfolio...................... 22.91 70.63 121.00 259.51
Worldwide Growth Portfolio.......................... 22.31 68.82 117.96 253.39
</TABLE>

11
<PAGE>

EXAMPLES: A Policyowner would pay the following expense on a $1,000 investment,
assuming a 5% annual return on assets and the charges and expenses reflected in
the Expense Table above:
3. If you surrender* your Policy at the end of the applicable period:
<CAPTION>
With ODB Rider
--------------------------
1 3 5 10
Subdivision Investing In: Year Years Years Years
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alger American Fund
Alger American Growth Portfolio..................... 79.56 132.60 170.52 287.54
Alger American Small Capitalization Portfolio....... 80.67 135.91 176.02 298.32
Federated Insurance Series
Federated American Leaders Fund II.................. 80.47 135.30 175.02 296.37
Federated High Income Bond Fund II.................. 79.56 132.60 170.52 287.54
Federated Utility Fund II........................... 81.07 137.10 178.01 302.21
Fidelity Variable Insurance Products Fund (VIP)
VIP Equity-Income Portfolio......................... 77.35 125.94 159.46 265.59
VIP Growth Portfolio................................ 78.25 128.67 164.00 274.63
VIP Overseas Portfolio.............................. 80.77 136.21 176.51 299.29
Fidelity Variable Insurance Products Fund (VIP II)
VIP II Asset Manager Portfolio...................... 77.95 127.77 162.49 271.63
VIP II Contrafund Portfolio......................... 78.36 128.97 164.51 275.63
Fidelity Variable Insurance Products Fund (VIP III)
VIP III Growth & Income Portfolio................... 77.65 126.85 160.98 268.61
VIP III Growth Opportunities Portfolio.............. 78.56 129.58 165.51 277.63
GE Investments Funds, Inc.
Global Income Fund.................................. 79.06 131.09 168.02 282.59
Income Fund......................................... 77.35 125.94 159.46 265.59
International Equity Fund........................... 82.48 141.30 184.93 315.68
Mid Cap Value Equity Fund (formerly known as
Value Equity Fund)................................. 78.76 130.18 166.52 279.62
Money Market Fund................................... 74.62 117.72 145.70 237.93
Premier Growth Equity Fund.......................... 78.46 129.28 165.01 276.63
</TABLE>

12
<PAGE>

<TABLE>
<CAPTION>
1 3 5 10
Subdivision Investing In: Year Years Years Years
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Real Estate Securities Fund......................... 81.07 137.10 178.01 302.21
S & P 500 Index Fund................................ 75.54 120.47 150.31 247.24
Total Return Fund................................... 77.25 125.64 158.95 264.58
U.S. Equity Fund.................................... 77.75 127.16 161.48 269.62
Goldman Sachs Variable
Growth & Income Fund................................ 81.68 138.91 180.98 308.01
Mid Cap Value Fund.................................. 82.18 140.41 183.45 312.81
Janus Aspen Series
Aggressive Growth Portfolio......................... 78.36 128.97 164.51 275.63
Balanced Portfolio.................................. 78.36 128.97 164.51 275.63
Capital Appreciation Portfolio...................... 78.56 129.58 165.51 277.63
Flexible Income Portfolio........................... 78.86 130.48 167.02 280.61
Growth Portfolio.................................... 78.36 128.97 164.51 275.63
International Growth Portfolio...................... 79.26 131.69 169.03 284.58
Worldwide Growth Portfolio.......................... 78.66 129.88 166.01 278.62
Oppenheimer Variable Account Funds
Oppenheimer Aggressive Growth Fund/VA............... 78.36 128.97 164.51 275.63
Oppenheimer Bond Fund/VA............................ 78.96 130.78 167.52 281.60
Oppenheimer Capital Appreciation Fund/VA............ 78.66 129.88 166.01 278.62
Oppenheimer High Income Fund/VA..................... 79.16 131.39 168.52 283.59
Oppenheimer Multiple Strategies Fund/VA............. 78.96 130.78 167.52 281.60
PBHG Insurance Series Fund, Inc.
PBHG Growth II...................................... 83.68 144.87 190.82 327.07
PBHG Large Cap Growth............................... 82.68 141.89 185.91 317.59
Salomon Brothers Variable Series Funds Inc
Salomon Investors Fund.............................. 81.47 138.30 179.98 306.08
Salomon Strategic Bond Fund......................... 81.68 138.91 180.98 308.01
Salomon Total Return Fund........................... 81.68 138.91 180.98 308.01

* surrender includes annuitization over a period of less than 5 years

4. If you annuitize at the end of the applicable period, or do not surrender*:

<CAPTION>
With ODB Riders
--------------------------
1 3 5 10
Subdivision Investing In: Year Years Years Years
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alger American Fund
Alger American Growth Portfolio..................... 25.71 79.05 135.04 287.54
Alger American Small Capitalization Portfolio....... 26.81 82.34 140.51 298.32
Federated Insurance Series
Federate American Leaders Fund II................... 26.61 81.74 139.52 296.37
Federated High Income Bond Fund II.................. 25.71 79.05 135.04 287.54
Federated Utility II 27.21 83.53 142.49 302.21
Fidelity Variable Insurance Products Fund (VIP)
VIP Equity-Income Portfolio......................... 23.51 72.44 124.03 265.59
VIP Growth Portfolio................................ 24.41 75.15 128.55 274.63
VIP Overseas Portfolio.............................. 26.91 82.64 141.00 299.29
Fidelity Variable Insurance Products Fund (VIP II)
VIP II Asset Manager Portfolio...................... 24.11 74.25 127.04 271.63
VIP II Contrafund Portfolio......................... 24.51 75.45 129.05 275.63
Fidelity Variable Insurance Products Fund (VIP III)
VIP III Growth & Income Portfolio................... 23.81 73.34 125.54 268.61
VIP III Growth Opportunities Portfolio.............. 24.71 76.05 130.05 277.63
</TABLE>

13
<PAGE>

<TABLE>
<CAPTION>
1 3 5 10
Investment Subdivision Investing In: Year Years Years Years
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
GE Investments Funds, Inc.
Global Income Fund................................... 25.21 77.55 132.55 282.59
Income Fund.......................................... 23.51 72.44 124.03 265.59
International Equity Fund............................ 28.61 87.70 149.38 315.68
Mid Cap Value Equity Fund (formerly know as
Value Equity Fund).................................. 24.91 76.65 131.05 279.62
Money Market Fund.................................... 20.80 64.27 110.33 237.93
Premier Growth Equity Fund........................... 24.61 75.75 129.55 276.63
Real Estate Securities Fund.......................... 27.21 83.53 142.49 302.21
S & P 500 Index Fund................................. 21.71 67.00 114.92 247.24
Total Return Fund.................................... 23.41 72.14 123.52 264.58
U.S. Equity Fund..................................... 23.91 73.65 126.04 269.62
Goldman Sachs Variable Insurance Trust
Growth & Income...................................... 27.81 85.32 145.45 308.01
Mid Cap Value........................................ 28.31 86.81 147.91 312.81
Janus Aspen Series
Aggressive Growth.................................... 24.51 75.45 129.05 275.63
Balanced............................................. 24.51 75.45 129.05 275.63
Capital Appreciation................................. 24.71 76.05 130.05 277.63
Flexible Income...................................... 25.01 76.95 131.55 280.61
Growth............................................... 24.51 75.45 129.05 275.63
International Growth................................. 25.41 78.15 133.55 284.58
Worldwide Growth..................................... 24.81 76.35 130.55 278.62
Oppenheimer Variable Account Funds
Oppenheimer Aggressive Growth Fund/VA................ 24.51 75.45 129.05 275.63
Oppenheimer Bond Fund/VA............................. 25.11 77.25 132.05 281.60
Oppenheimer Capital Appreciation Fund/VA............. 24.81 76.35 130.55 278.62
Oppenheimer High Income Fund/VA...................... 25.31 77.85 133.05 283.59
Oppenheimer Multiple Strategies Fund/VA.............. 25.11 77.25 132.05 281.60
PBHG Insurance Series Fund, Inc.
PBHG Growth II....................................... 29.80 91.25 155.25 327.07
PBHG Large Cap Growth................................ 28.81 88.29 150.36 317.59
Salomon Brothers Variable Series Funds Inc
Salomon Investors Fund............................... 27.61 84.72 144.46 306.08
Salomon Strategic Bond Fund.......................... 27.81 85.32 145.45 308.01
Salomon Total Return Fund............................ 27.81 85.32 145.45 308.01
</TABLE>

* surrender includes annuitization over a period of less than 5 years

14
<PAGE>

Synopsis

What type of Policy am I buying? The Policy is an individual flexible premium
variable deferred annuity policy. We may issue it as a policy qualified
("Qualified Policy") under the Internal Revenue Code of 1986, as amended (the
"Code"), or as a policy that is not qualified under the Code ("Non-Qualified
Policy"). This Prospectus only provides disclosure about the Policy. Certain
features described in this Prospectus may vary from your Policy. See The
Policy.

How does the Policy work? Once we approve your application, we will issue a
Policy to you. During the accumulation period, while you are paying in, you can
use your premium payments to buy Accumulation Units under the Separate Account
or interests in the Guarantee Account. Should you decide to annuitize (that is,
change your Policy to a payout mode rather than an accumulation mode), we will
convert your Accumulation Units to Annuity Units. You can choose a fixed or
variable income payment. If you choose a variable income payment, we will base
your periodic income payment upon the number of Annuity Units to which you
became entitled at the time you decided to annuitize and on the value of each
unit on the date the payment is determined. See The Policy.

What are my variable investment choices? Through its 41 Investment
Subdivisions, the Separate Account uses your premium payments to purchase
shares, at your direction, in one or more portfolios of the 11 Funds. In turn,
each portfolio holds securities consistent with its own particular investment
policy. Amounts you allocate to the Separate Account will reflect the
investment performance of the portfolios you select. You bear the risk of
investment gain or loss. See Separate Account -- Investment Subdivisions.

What is the Guarantee Account? We offer fixed investment choices through our
Guarantee Account. The Guarantee Account is part of our General Account and
pays interest at declared rates we guarantee for selected periods of time. We
also guarantee the principal, after deductions. Since the Guarantee Account is
part of the General Account, we assume the risk of investment gain or loss on
this amount. You may transfer value between the Guarantee Account and the
Separate Account subject to certain restrictions. See Transfers Before the
Maturity Date.

What charges are associated with this Policy? Should you withdraw Account Value
before your premium payments have been in your Policy for six years, we will
assess a surrender charge of anywhere from 0% to 6%, depending upon how many
full years those payments have been in the Policy. (Note: We waive this charge
under certain conditions). See Surrender Charge.

We assess daily charges in the aggregate at an effective annual rate of 1.40%
against the daily net asset value of the Separate Account, including that
portion of the account attributable to your premium payments. These charges
consist of .15%

15
<PAGE>

as an administrative expense charge and 1.25% as a mortality and expense risk
charge. Additionally, we may impose an annual $25 Policy Maintenance Charge. We
also charge for the Optional Death Benefit ("ODB"). For a complete discussion
of all charges associated with the Policy, See Charges and Other Deductions.

Before the Maturity Date, you may make twelve transfers in a Policy year
without incurring a transfer charge. After that, a $10 transfer charge will be
assessed each time a transfer is made during the calendar year. We will not
impose a transfer charge on transfers made after the Maturity Date. See The
Policy -- Transfer Charges.

The portfolios also have certain expenses. These include management fees and
other expenses associated with the daily operation of each portfolio. See
Separate Account -- Investment Subdivisions. These portfolio expenses are more
fully described in each Fund's prospectus.

How much must I pay, and how often? Subject to certain minimum and maximum
payments, the amount and frequency of your premium payments are completely
flexible. See The Policy -- Premium Payments.

How will my income payments be calculated? We will pay you a monthly income
beginning on the Maturity Date if the Annuitant is still living. You may also
decide to annuitize under one of the optional payment plans. We will base your
initial payment on maturity value and other factors. See Income Payments.

What happens if I die before the Maturity Date? Before the Maturity Date, if an
Owner, Joint Owner, or Annuitant dies while the Policy is in force, we will
treat the Designated Beneficiary as the sole Owner of the Policy, subject to
certain distribution rules. We may pay a Death Benefit to the Designated
Beneficiary. See Death of the Owner or Joint Owner Before the Maturity Date.

May I transfer Account Value among portfolios? Yes, but there may be limits on
how often you may do so. See Transfers. The minimum transfer amount is $100 or
the entire balance in the Investment Subdivision if the transfer will leave a
balance of less than $100. See Transfers -- Transfers Before the Maturity Date,
and Income Payments -- Transfers After the Maturity Date.

May I surrender the Policy or make a partial surrender? Yes, subject to Policy
requirements and to restrictions imposed under certain retirement plans.

If you surrender the Policy or make a partial surrender, we may assess a
surrender charge as discussed above. In addition, you may be subject to income
tax and, if you are younger than age 59 1/2 at the time of the surrender, a 10%
penalty tax. A surrender or a partial surrender may also be subject to
withholding. See Federal Tax Matters.

16
<PAGE>

Do I get a free look at this Policy? Yes. You have the right to return the
Policy to us at our Variable Annuity Service Center, and have us cancel the
Policy within ten days (or longer if required by applicable law).

If you exercise this right, we will cancel the Policy as of the day we receive
your request and send you a refund equal to your Account Value plus any charges
we have deducted from premium payments (excluding charges the portfolios
deducted) on or before the date we received the returned Policy or such other
amount as required by applicable law. We will not deduct the surrender charge.
See Return Privilege.

You cannot make transfers or partial surrenders during the free look period.

Where may I find more information about Accumulation Unit Values? The Condensed
Financial Information section at the end of the Prospectus provides more
information about Accumulation Unit Values.

17
<PAGE>

Investment Results

At times, the Separate Account may compare its investment results to various
unmanaged indices or other variable annuities in reports to shareholders, sales
literature, and advertisements. We will calculate the results on a total return
basis for various periods, with or without surrender charges. Results
calculated without surrender charges will be higher. Total returns include the
reinvestment of all distributions of the portfolios. Total returns reflect Fund
fees and expenses, the administrative expense charge, the mortality and expense
risk charge, and the annual policy maintenance charge. Total returns do not
reflect the elective Optional Death Benefit charge. See the Appendix for
further information.

18
<PAGE>

Financial Statements

The 1999 financial statements for GE Capital Life Assurance Company of New York
and GE Capital Life Separate Account II are located in the SAI. If you would
like a free copy of the SAI, call 1-800-313-5282. Otherwise, the SAI is
available on the SEC's website at http://www.sec.gov.

19
<PAGE>

GE Capital Life Assurance Company of New York

We are a stock life insurance company that was incorporated in New York on
February 23, 1988. We are ultimately a subsidiary of General Electric Capital
Corporation ("GE Capital"), a New York corporation that is a diversified
financial services company whose subsidiaries consist of specialty insurance,
equipment management, and commercial and consumer financing businesses. GE
Capital's ultimate parent, General Electric Company, founded more than one
hundred years ago by Thomas Edison, is the world's largest manufacturer of jet
engines, engineering plastics, medical diagnostic equipment, and large electric
power generation equipment.

We are licensed solely in New York and specialize in writing individual fixed-
rate deferred annuities, fixed payout immediate annuities, and variable
deferred annuities.

We are subject to regulation by the Superintendent of Insurance of the State of
New York. We submit annual statements on our operations and finances to the New
York Insurance Department.

We are a member of the Insurance Marketplace Standards Association ("IMSA"). We
may use the IMSA membership logo and language in our advertisements, as
outlined in IMSA's Marketing and Graphics Guidelines. Companies that belong to
IMSA subscribe to a set of ethical standards covering the various aspects of
sales and service for individually sold life insurance and annuities.

20
<PAGE>

Separate Account

We established the Separate Account as a separate investment account on April
1, 1996. The Separate Account may invest in mutual funds or in portfolios of
series-type mutual funds. We use the Separate Account to support the Policy as
well as for other purposes permitted by law.

The Separate Account currently has 41 Investment Subdivisions available under
the Policy, but that number may change in the future. Each Investment
Subdivision invests exclusively in shares representing an interest in a
separate corresponding portfolio of the Funds described below. We allocate net
premium payments in accordance with your instructions among up to 10 of the 41
Investment Subdivisions available under the Policy.

The assets of the Separate Account belong to us. Nonetheless, we do not charge
the assets in the Separate Account attributable to the Policies with
liabilities arising out of any other business which we may conduct. The assets
of the Separate Account shall, however, be available to cover the liabilities
of our General Account to the extent that the assets of the Separate Account
exceed its liabilities arising under the Policies supported by it. Income and
both realized and unrealized gains or losses from the assets of the Separate
Account are credited to or charged against the Separate Account without regard
to the income, gains, or losses arising out of any other business we may
conduct.

We registered the Separate Account with the SEC as a unit investment trust
under the Investment Company Act of 1940 ("1940 Act"). The Separate Account
meets the definition of a separate account under the Federal securities laws.
Registration with the SEC does not involve supervision of the management or
investment practices or policies of the Separate Account by the SEC. You assume
the full investment risk for all amounts you allocate to the Separate Account.

THE PORTFOLIOS

There is a separate Investment Subdivision which corresponds to each portfolio
of a Fund offered in this Policy. You decide the Investment Subdivisions to
which you allocate net premium payments. You may change your allocation without
penalty or charges.

Each Fund is registered with the Securities and Exchange Commission as an open-
end management investment company under the 1940 Act. The assets of each
portfolio are separate from other portfolios of a Fund and each portfolio has
separate investment objectives and policies. As a result, each portfolio
operates as a separate portfolio and the investment performance of one
portfolio has no effect on the investment performance of any other portfolio.

21
<PAGE>

Before choosing an Investment Subdivision to allocate your net premium payments
and Account Value, carefully read the prospectus for each Fund, along with this
Prospectus. We summarize the investment objectives of each portfolio below.
There is no assurance that any of the portfolios will meet these objectives. We
do not guarantee any minimum value for the amounts you allocate to the Separate
Account. You bear the investment risk of investing in the portfolios.

The investment objectives and policies of certain portfolios are similar to the
investment objectives and policies of other portfolios that may be managed by
the same investment adviser or manager. The investment results of the
portfolios, however, may be higher or lower than the results of such other
portfolios. There can be no assurance, and no representation is made, that the
investment results of any of the portfolios will be comparable to the
investment results of any other portfolio, even if the other portfolio has the
same investment adviser or manager, or if the other portfolio has a similar
name.

INVESTMENT SUBDIVISIONS

We offer you a choice from among 41 Investment Subdivisions, each of which
invests in an underlying portfolio of one of the Funds. You may allocate
premiums to up to ten Investment Subdivisions plus the Guarantee Account at any
one time.

<TABLE>
<CAPTION>
Adviser (and Sub-
Adviser, as
Investment Subdivision Investment Objective applicable)
- ----------------------------------------------------------------------------
<S> <C> <C>
THE ALGER AMERICAN FUND
Alger American Growth Seeks long-term capital Fred Alger
Portfolio appreciation by focusing on Management, Inc.
growing companies that
generally have broad product
lines, markets, financial
resources and depth of
management. Under normal
circumstances, the portfolio
invests primarily in the
equity securities of large
companies. The portfolio
considers a large company to
have a market capitalization
of $1 billion or greater.
- ----------------------------------------------------------------------------
Alger American Small Seeks long-term capital Fred Alger
Capitalization Portfolio appreciation by focusing on Management, Inc.
small, fast-growing companies
that offer innovative
products, services or
technologies to a rapidly
expanding marketplace. Under
normal circumstances, the
portfolio invests primarily in
the equity securities of small
capitalization companies. A
small capitalization company
is one that has a market
capitalization within the
range of the Russell 2000
Growth Index or the S&P Small
Cap 600(R) Index.
- ----------------------------------------------------------------------------

FEDERATED INSURANCE SERIES
Federated American Seeks long-term growth of Federated
Leaders Fund II capital with a secondary Investment
objective of providing income. Management Company
Seeks to achieve its objective
by investing, under normal
circumstances, at least 65% of
its total assets in common
stock of "blue chip"
companies.
- ----------------------------------------------------------------------------
</TABLE>

22
<PAGE>

<TABLE>
<CAPTION>
Adviser (and Sub-
Adviser, as
Investment Subdivision Investment Objective applicable)
- -----------------------------------------------------------------------------
<S> <C> <C>
Federated High Income Seeks high current income by Federated
Bond investing primarily in a Investment
Fund II diversified portfolio of Management Company
professionally managed fixed-
income securities. The fixed
income securities in which the
fund intends to invest are
lower-rated corporate debt
obligations, commonly referred
to as "junk bonds". The risks
of these securities and their
high yield potential are
described in the prospectus
for the Federated Insurance
Series, which should be read
carefully before investing.
- -----------------------------------------------------------------------------
Federated Utility Fund II Seeks high current income and Federated
moderate capital appreciation Investment
by investing primarily in Management Company
equity and debt securities of
utility companies.
- -----------------------------------------------------------------------------
FIDELITY VARIABLE INSURANCE PRODUCTS FUND (VIP)
VIP Equity-Income Seeks reasonable income and Fidelity Management
Portfolio will consider the potential & Research Company
for capital appreciation. The (beginning January
fund also seeks a yield, which 1, 2001, FMR Co.,
exceeds the composite yield on Inc will
the securities comprising the subadvise.)
S&P 500 by investing primarily
in income-producing equity
securities and by investing in
domestic and foreign issuers.
- -----------------------------------------------------------------------------
VIP Growth Portfolio Seeks capital appreciation by Fidelity Management
investing primarily in common & Research Company
stocks of companies believed (beginning January
to have above-average growth 1, 2001, FMR Co.,
potential. Inc. will
subadvise.)
- -----------------------------------------------------------------------------
VIP Overseas Portfolio Seeks long-term growth of Fidelity Management
capital by investing at least & Research Company
65% of total assets in foreign (subadvised by
securities, primarily in Fidelity Management
common stocks. & Research (U.K.)
Inc., Fidelity
Management &
Research (Far East)
Inc., Fidelity
International
Investment
Advisors, Fidelity
International
Investment Advisors
(U.K.) Limited and
Fidelity
Investments Japan
Limited; beginning
January 1, 2001,
FMR Co., Inc. will
subadvise.)
- -----------------------------------------------------------------------------
</TABLE>

23
<PAGE>

<TABLE>
<CAPTION>
Adviser (and Sub-
Adviser, as
Investment Subdivision Investment Objective applicable)
- -------------------------------------------------------------------------------
<S> <C> <C>
Fidelity Variable Insurance Products Fund II (VIP II)
VIP II Asset Manager Seeks high total return with Fidelity Management
Portfolio reduced risk over the long- & Research Company
term by allocating assets (subadvised by
among stocks, bonds and short- Fidelity Management
term and money market & Research (U.K.)
instruments. Inc., Fidelity
Management &
Research (Far East)
Inc., Fidelity
Investments Japan
Limited and
Fidelity
Investments Money
Management, Inc.,
beginning January
1, 2001, FMR Co.,
Inc. will
subadvise.)
- -------------------------------------------------------------------------------
VIP II Contrafund Seeks long-term capital Fidelity Management
Portfolio appreciation by investing & Research Company
mainly in common stocks and in (subadvised by
securities of companies whose Fidelity Management
value is believed to have not & Research (U.K.)
been fully recognized by the Inc. and Fidelity
public. This fund invests in Management &
domestic and foreign issuers. Research (Far East)
This fund also invests in Inc., and Fidelity
"growth" stocks, "value" Investments Japan
stocks, or both. Limited; beginning
January 1, 2001,
FMR Co., Inc. will
subadvise.)
- -------------------------------------------------------------------------------
Fidelity Variable Insurance Products Fund III (VIP III)
VIP III Growth & Income Seeks high total return Fidelity Management
Portfolio through a combination of & Research Company
current income and capital (subadvised by
appreciation by investing a Fidelity Management
majority of assets in common & Research (U.K.)
stocks with a focus on those Inc., Fidelity
that pay current dividends and Management &
show potential for capital Research (Far East)
appreciation. Inc. and Fidelity
Investments Japan
Limited; beginning
January 1, 2001,
FMR Co., Inc. will
subadvise.)
- -------------------------------------------------------------------------------
VIP III Growth Seeks to provide capital Fidelity Management
Opportunities Portfolio growth by investing primarily & Research Company
in common stock and other (subadvised by
types of securities, including Fidelity Management
bonds, which may be lower- & Research (U.K.)
quality debt securities. Inc. and Fidelity
Management &
Research Far East
Inc.)
- -------------------------------------------------------------------------------
</TABLE>

24
<PAGE>

<TABLE>
<CAPTION>
Adviser (and Sub-
Adviser, as
Investment Subdivision Investment Objective applicable)
- -----------------------------------------------------------------------------
<S> <C> <C>
GE INVESTMENT FUNDS, INC.
Global Income Fund Objective of providing high GE Asset Management
total return, emphasizing Incorporated
current income and, to a (subadvised by GE
lesser extent, capital Asset
appreciation. The Fund seeks Management Limited)
to achieve this objective by
investing primarily in foreign
and domestic income-bearing
debt securities and other
foreign and domestic income
bearing instruments. The
Global Income Fund is not
"diversified" as defined by
the Investment Company Act of
1940. Therefore, the Fund may
invest a greater percentage of
its assets in a particular
issuer than the other Funds
making it more susceptible to
adverse developments affecting
a single issuer. Nonetheless,
the Fund is subject to
diversification requirements
arising under the federal tax
laws and a limitation on
concentration of investments
in a single industry.
- -----------------------------------------------------------------------------
Income Fund Objective of providing maximum GE Asset Management
income consistent with prudent Incorporated
investment management and
preservation of capital by
investing primarily in income-
bearing debt securities and
other income bearing
instruments.
- -----------------------------------------------------------------------------
International Equity Fund Objective of providing long- GE Asset Management
term growth of capital by Incorporated
investing primarily in foreign
equity and equity-related
securities which the adviser
believes have long-term
potential for capital growth.
- -----------------------------------------------------------------------------
Mid-Cap Value Equity Fund Objective of providing long GE Asset Management
(formerly Value Equity term growth of capital by Incorporated
Fund) investing primarily in common (Subadvised by NWQ
stock and other equity Investment
securities of companies that Management Company)
the investment adviser
believes are undervalued by
the marketplace at the time of
purchase and that offer the
potential for above-average
growth of capital. Although
the current portfolio reflects
investments primarily within
the mid-cap range, the fund is
not restricted to investments
within any particular
capitalization and may in the
future invest a majority of
its assets in another
capitalization range.
- -----------------------------------------------------------------------------
Money Market Fund Objective of providing highest GE Asset Management
level of current income as is Incorporated
consistent with high liquidity
and safety of principal by
investing in various types of
good quality money market
securities.
- -----------------------------------------------------------------------------
</TABLE>

25
<PAGE>

<TABLE>
<CAPTION>
Adviser (and Sub-
Adviser, as
Investment Subdivision Investment Objective applicable)
- -----------------------------------------------------------------------------
<S> <C> <C>
Premier Growth Equity Objective of providing long- GE Asset Management
Fund term growth of capital as well Incorporated
as future (rather than
current) income by investing
primarily in growth-oriented
equity securities.
- -----------------------------------------------------------------------------
Real Estate Securities Objective of providing maximum GE Asset Management
Fund total return through current Incorporated
income and capital (Subadvised by
appreciation by investing Seneca Capital
primarily in securities of Management, L.L.C.)
U.S. issuers that are
principally engaged in or
related to the real estate
industry including those that
own significant real estate
assets. The portfolio will not
invest directly in real
estate.
- -----------------------------------------------------------------------------
S&P 500 Index Fund/1/ Objective of providing capital GE Asset Management
appreciation and accumulation Incorporated
of income that corresponds to (Subadvised by
the investment return of the State Street Global
Standard & Poor's 500 Advisors)
Composite Stock Price Index
through investment in common
stocks comprising the Index.
- -----------------------------------------------------------------------------
Total Return Fund Objective of providing the GE Asset Management
highest total return, composed Incorporated
of current income and capital
appreciation as is consistant
with prudent investment risk
by investing in common stocks,
bonds and money market
instruments, the proportion of
each being continuously
determined by the investment
advisor.
- -----------------------------------------------------------------------------
U.S. Equity Fund Objective of providing long- GE Asset Management
term growth of capital through Incorporated
investments primarily in
equity securities of U.S.
companies.
- -----------------------------------------------------------------------------
GOLDMAN SACHS VARIABLE INSURANCE TRUST (VIT)
Goldman Sachs Growth and Seeks long-term growth of Goldman Sachs Asset
Income Fund capital and growth of income, Management
primarily through equity
securities that are considered
to have favorable prospects
for capital appreciation
and/or dividend-paying
ability.
- -----------------------------------------------------------------------------
Goldman Sachs Mid Cap Seeks long-term capital Goldman Sachs Asset
Value Fund (formerly Mid appreciation, primarily Management
Cap Equity Fund) through equity securities of
mid-cap companies with public
stock market capitalizations
within the range of the market
capitalization of companies
constituting the Russell
Midcap Index at the time of
investment (currently between
$400 million and $16 billion).
- -----------------------------------------------------------------------------
</TABLE>

/1/"Standard & Poor's," "S&P," and "S&P 500" are trademarks of The McGraw-Hill
Companies, Inc. and have been licensed for use by GE Asset Management
Incorporated. The S&P 500 Index Fund is not sponsored, endorsed, sold or
promoted by Standard & Poor's, and Standard & Poor's makes no representation
or warranty, express or implied, regarding the advisability of investing in
this Fund or the Policy

26
<PAGE>

<TABLE>
<CAPTION>
Adviser (and Sub-
Adviser, as
Investment Subdivision Investment Objective applicable)
- ----------------------------------------------------------------------------
<S> <C> <C>
JANUS ASPEN SERIES
Aggressive Growth Non-diversified portfolio Janus Capital
Portfolio pursuing long-term growth of Corporation
capital. Pursues this
objective by normally
investing at least 50% of its
assets in equity securities
issued by medium-sized
companies.
- ----------------------------------------------------------------------------
Balanced Portfolio Seeks long term growth of Janus Capital
capital. Pursues this Corporation
objective consistent with the
preservation of capital and
balanced by current income.
Normally invests 40-60% of its
assets in securities selected
primarily for their growth
potential and 40-60% of its
assets in securities selected
primarily for their income
potential.
- ----------------------------------------------------------------------------
Capital Appreciation Seeks long-term growth of Janus Capital
Portfolio capital. Pursues this Corporation
objective by investing
primarily in common stocks of
companies of any size.
- ----------------------------------------------------------------------------
Flexible Income Portfolio Seeks maximum total return Janus Capital
consistent with preservation Corporation
of capital. Total return is
expected to result from a
combination of income and
capital appreciation. The
portfolio pursues its
objective primarily by
investing in any type of
income-producing securities.
This portfolio may have
substantial holdings of lower-
rated debt securities or
"junk" bonds. The risks of
investing in junk bonds are
described in the prospectus
for Janus Aspen Series, which
should be read carefully
before investing.
- ----------------------------------------------------------------------------
Growth Portfolio Seeks long-term capital growth Janus Capital
consistent with the Corporation
preservation of capital and
pursues its objective by
investing in common stocks of
companies of any size.
Emphasizes larger, more
established issuers.
- ----------------------------------------------------------------------------
International Growth Seeks long-term growth of Janus Capital
Portfolio capital. Pursues this Corporation
objective primarily through
investments in common stocks
of issuers located outside the
United States. The portfolio
normally invests at least 65%
of its total assets in
securities of issuers from at
least five different
countries, excluding the
United States.
- ----------------------------------------------------------------------------
Worldwide Growth Seeks long-term capital growth Janus Capital
Portfolio in a manner consistent with Corporation
the preservation of capital.
Pursues this objective by
investing in a diversified
portfolio of common stocks of
foreign and domestic issuers
of all sizes. Normally invests
in at least five different
countries including the United
States.
- ----------------------------------------------------------------------------
</TABLE>

27
<PAGE>

<TABLE>
<S> <C> <C>
Adviser (and Sub-
Adviser, as
Investment Subdivision Investment Objective applicable)
- --------------------------------------------------------------------------------------
</TABLE>
OPPENHEIMER VARIABLE ACCOUNT FUNDS
<TABLE>
<S> <C> <C>
Oppenheimer Aggressive Seeks to achieve capital OppenheimerFunds,
Growth Fund/VA appreciation investing mainly Inc.
in common stocks of companies
in the United States believed
by the fund's investment
manager, OppenheimerFunds
Inc., to have significant
growth potential.
- --------------------------------------------------------------------------
Oppenheimer Bond Fund/VA Seeks high level of current OppenheimerFunds,
income and capital Inc.
appreciation when consistent
with its primary objective of
high income. Under normal
conditions this fund will
invest at least 65% of its
total assets in investment
grade securities.
- --------------------------------------------------------------------------
Oppenheimer Capital Seeks capital appreciation OppenheimerFunds,
Appreciation Fund/VA from investments in securities Inc.
of well-known and established
companies. Such securities
generally have a history of
earnings and dividends and are
issued by seasoned companies
(having an operating history
of at least five years,
including predecessors).
- --------------------------------------------------------------------------
Oppenheimer High Income Seeks high current income from OppenheimerFunds,
Fund/VA investments in high yield Inc.
fixed income securities,
including unrated securities
or high-risk securities in
lower rating categories. These
securities may be considered
speculative. This fund may
have substantial holdings of
lower-rated debt securities or
"junk" bonds. The risks of
investing in junk bonds are
described in the prospectus
for the Oppenheimer Variable
Account Funds, which should be
read carefully before
investing.
- --------------------------------------------------------------------------
Oppenheimer Multiple Seeks total investment return OppenheimerFunds,
Strategies Fund/VA (which includes current income Inc.
and capital appreciation in
the values of its shares) from
investments in common stocks
and other equity securities,
bonds and other debt
securities, and "money market"
securities.
- --------------------------------------------------------------------------
</TABLE>

28
<PAGE>

<TABLE>
<CAPTION>
Adviser (and Sub-
Adviser, as
Investment Subdivision Investment Objective applicable)
- ----------------------------------------------------------------------------
<S> <C> <C>
PBHG INSURANCE SERIES FUND, INC.
PBHG Growth II Portfolio Seeks to achieve capital Pilgrim Baxter &
appreciation by investing at Associates, Ltd.
least 65% of its total assets
in the growth securities
(primarily common stocks) of
small and medium sized
companies (market
capitalization or annual
revenues between $500 million
and $10 billion) that, in the
adviser's opinion, have an
outlook for strong earnings
growth and capital
appreciation potential.
- ----------------------------------------------------------------------------
PBHG Large Cap Growth Seeks long term growth of Pilgrim Baxter &
Portfolio capital obtained by investing Associates, Ltd.
at least 65% of its total
assets in growth securities
(primarily common stocks) of
large capitalization companies
(market capitalization over $1
billion) that, in the
adviser's opinion, have an
outlook for strong earnings
growth and capital
appreciation potential.
- ----------------------------------------------------------------------------
SALOMON BROTHERS VARIABLE SERIES FUNDS INC
Salomon Investors Fund Seeks long-term growth of Salomon Brothers
capital with current income as Asset Management
a secondary objective, Inc
primarily through investments
in common stocks of well-known
companies.
- ----------------------------------------------------------------------------
Salomon Strategic Bond Seeks high level of current Salomon Brothers
Fund income with capital Asset Management
appreciation as a secondary Inc
objective, through a globally
diverse portfolio of fixed-
income investments, including
lower-rated fixed income
securities commonly known as
junk bonds.
- ----------------------------------------------------------------------------
Salomon Total Return Fund Seeks to obtain above-average Salomon Brothers
income by primarily investing Asset Management
in a broad variety of Inc
securities, including stocks,
fixed-income securities and
short-term obligations.
- ----------------------------------------------------------------------------
</TABLE>

Not all Investment Subdivisions may be available.

We will purchase shares of the portfolios at net asset value and direct them to
the appropriate Investment Subdivisions of the Separate Account. We will redeem
sufficient shares of the appropriate portfolios at net asset value to pay Death
Benefits and surrender/partial surrender proceeds, to make income payments, or
for other purposes described in the Policy. We automatically reinvest all
dividend and capital gain distributions of the portfolios in shares of the
distributing portfolios at their net asset value on the date of distribution.
In other words, we do not pay portfolio dividends or portfolio distributions
out to Owners as additional units, but instead reflect them in unit values.

Shares of the portfolios of the Funds are not sold directly to the general
public. They are sold to the Company, and may be sold to other insurance
companies that issue variable annuity and variable life insurance policies. In
addition, they may be sold to retirement plans.

29
<PAGE>

When a Fund sells shares in any of its portfolios both to variable annuity and
to variable life insurance separate accounts, it engages in mixed funding. When
a Fund sells shares in any of its portfolios to separate accounts of
unaffiliated life insurance companies, it engages in shared funding.

Each Fund may engage in mixed and shared funding. Therefore, due to differences
in redemption rates or tax treatment, or other considerations, the interests of
various shareholders participating in a Fund could conflict. A Fund's Board of
Directors will monitor for the existence of any material conflicts, and
determine what action, if any, should be taken. See the Prospectuses for the
Funds.

We have entered into agreements with either the investment adviser or
distributor of each of the Funds under which the adviser or distributor pays us
a fee ordinarily based upon a percentage of the average aggregate amount we
have invested on behalf of the Separate Account and other separate accounts.
These percentages differ, and some investment advisers or distributors pay us a
greater percentage than other advisors or distributors. The amounts we receive
under these agreements may be significant. The agreements reflect
administrative services we provide.

CHANGES TO THE SEPARATE ACCOUNT AND THE INVESTMENT SUBDIVISIONS

We reserve the right, within the law, to make additions, deletions and
substitutions for the Funds and/or any portfolios within the Funds in which the
Separate Account participates. We may substitute shares of other portfolios for
shares already purchased, or to be purchased in the future, under the Policy.
This substitution might occur if shares of a portfolio should no longer be
available, or if investment in any portfolio's shares should become
inappropriate, in the judgment of our management, for the purposes of the
Policy. The new portfolio may have higher fees and charges than the portfolio
it replaced. No substitution of the shares attributable to your Policy may take
place without prior notice to you and before approval of the SEC, in accordance
with the 1940 Act.

We also reserve the right to establish additional Investment Subdivisions, each
of which would invest in a separate portfolio of a Fund, or in shares of
another investment company, with a specified investment objective. We may also
eliminate one or more Investment Subdivisions if, in our sole discretion,
marketing, tax, or investment conditions warrant. Not all Investment
Subdivisions may be available to all classes of Policies.

If permitted by law, we may deregister the Separate Account under the 1940 Act
in the event such registration is no longer required; manage the Separate
Account under the direction of a committee; or combine the Separate Account
with other separate accounts of the Company. Further, to the extent permitted
by applicable law, we may transfer the assets of the Separate Account to
another separate account.

30
<PAGE>

The Guarantee Account

Due to certain exemptive and exclusionary provisions of the Federal securities
laws, we have not registered interests in the Guarantee Account under the
Securities Act of 1933 (the "1933 Act"), and we have not registered either the
Guarantee Account or our General Account as an investment company under the
1940 Act. Accordingly, neither the interests in the Guarantee Account, nor our
General Account, are generally subject to regulation under the 1933 Act and the
1940 Act. Disclosures relating to the interests in the Guarantee Account, and
the General Account, however, may be subject to certain generally applicable
provisions of the Federal securities laws relating to the accuracy of
statements made in a registration statement.

You may allocate some or all of your net premium payments and transfer some or
all of your Account Value to the Guarantee Account. We credit the portion of
the Account Value allocated to the Guarantee Account with interest (as
described below). Account Value in the Guarantee Account is subject to some,
but not all, of the charges we assess in connection with the Policy. See
Charges and Other Deductions.

Each time you allocate net premium payments or transfer Account Value to the
Guarantee Account, we establish an interest rate guarantee period. For each
interest rate guarantee period, we guarantee an interest rate for a specified
period of time. At the end of an interest rate guarantee period, a new interest
rate will become effective, and a new one year interest rate guarantee period
will commence for the remaining portion of that particular allocation.

The initial interest rate guarantee period for any allocation will be one year,
unless you elect differently at the time of your allocation. Subsequent
interest rate guarantee periods will each be one year, unless you select
another period at or before the beginning of the subsequent period. During the
first 10 days of each interest rate guarantee period, you may change the
interest rate guarantee period to any other period we then offer. If you change
the interest rate guarantee period, a different interest rate may apply. After
the first 10 days of an interest rate guarantee period, you may not change that
guarantee period.

We determine the interest rates in our sole discretion. The determination made
will be influenced by, but not necessarily correspond to, interest rates
available on fixed income investments which we may acquire with the amounts we
receive as premium payments or transfers of Account Value under the Policies.
You will have no direct or indirect interest in these investments. We also will
consider other factors in determining interest rates for a guarantee period
including, but not limited to, regulatory and tax requirements, sales
commissions, and administrative expenses borne by us, general economic trends,
and competitive factors. Amounts you allocate to the Guarantee Account will not
share in the investment performance of our General Account, or any portion
thereof. We cannot predict or guarantee the level of

31
<PAGE>

interest rates in future guarantee periods. However, the interest rates for any
interest rate guarantee period will be at least the guaranteed interest rate
shown in your Policy.

We will notify Owners in writing at least 10 days prior to the expiration date
of any interest rate guarantee period about the then currently available
interest rate guarantee periods and the guaranteed interest rates applicable to
such interest rate guarantee periods. A new one year interest rate guarantee
period will commence automatically unless we receive written notice prior to
the end of the 30 day period following the expiration of the interest rate
guarantee period ("30 day window") of your election of a different interest
rate guarantee period from among those being offered by us at that time, or
instructions to transfer all or a portion of the remaining amount to one or
more Investment Subdivisions subject to certain restrictions. See Transfers
Before the Maturity Date. During the 30 day window, the allocation will accrue
interest at the new interest rate guarantee period's interest rate.

We reserve the right to credit bonus interest on premium payments allocated to
a Guarantee Account participating in the Dollar-Cost Averaging Program.

32
<PAGE>

Charges and Other Deductions

All of the charges described in this section apply to Account Value allocated
to the Separate Account. Account Value in the Guarantee Account is subject to
all of the charges described in this section except for the mortality and
expense risk charge and the administrative expense charge.

We will deduct the charges described below to cover our costs and expenses,
services provided, and risks assumed under the Policies. We incur certain costs
and expenses for the distribution and administration of the Policies and for
providing the benefits payable thereunder. Our administrative services include:

. processing applications for and issuing the Policies;

. processing purchases and redemptions of portfolio shares as required;

. maintaining records;

. administering annuity payouts;

. furnishing accounting and valuation services (including the calculation and
monitoring of daily Investment Subdivision values);

. reconciling and depositing cash receipts;

. providing Policy confirmations and periodic statements; and

. providing toll-free inquiry services.

The risks we assume include:

. the risk that the Death Benefits will be greater than the Surrender Value;

. the risk that the actual life-span of persons receiving income payments under
the Policy will exceed the assumptions reflected in our guaranteed rates
(these rates are incorporated in the Policy and cannot be changed);

. the risk that more Owners than expected will qualify for waivers of the
surrender charges; and

. the risk that our costs in providing the services will exceed our revenues
from Policy charges (which cannot be changed by us).

The amount of a charge may not necessarily correspond to the costs associated
with providing the services or benefits indicated by the designation of the
charge. For example, the surrender charge we collect may not fully cover all of
the sales and distribution expenses we actually incur. We also may realize a
profit on one or more of the charges. We may use any such profits for any
corporate purpose, including the payment of sales expenses.

33
<PAGE>

TRANSACTION EXPENSES

SURRENDER CHARGE

We assess a surrender charge (except as described below) on partial and full
surrenders of premium payments. We also assess surrender charges on payments we
make upon maturity if your Maturity Date occurs before all of your premium
payments have been in your Policy for seven years. You pay this charge to
partially compensate us for the losses we experience on Policy distribution
costs when Owners surrender or partially surrender.

We calculate the surrender charge separately for each premium payment. For
purposes of calculating this charge, we assume that you withdraw premium
payments on a first-in, first-out basis. We also assume you surrender your
premium payments before you surrender any gains in your Policy. We deduct the
surrender charge proportionately from the Investment Subdivisions. However, if
there is no Account Value in the Separate Account, we will deduct the charge
proportionally from all monies in the Guarantee Account. The surrender charge
is as follows:

<TABLE>
<CAPTION>
Number of full and
partially completed
years since we Surrender charge as a percentage
received the of the surrendered or partially
premium payment surrendered premium payment
------------------- --------------------------------
Year Percentage
------------------------------------------------------------
<S> <C>
1 6%
2 6%
3 6%
4 6%
5 4%
6 2%
7 or more 0%
</TABLE>

We do not assess the surrender charge on surrenders:

. of free withdrawal amounts (as defined below);

. if taken under Optional Payment Plan 1, Optional Payment Plan 2 (for a period
of 5 or more years), Optional Payment Plan 3 (for a payment period of at
least 5 years based on a guaranteed interest rate), or Optional Payment Plan
5;

. if within 90 days of the Annuitant's death.

Your first surrender in any Policy year of up to 10% of your Account Value
(determined as of the Valuation Period during which we receive the surrender
request) may be made without a surrender charge (the "free withdrawal amount").
If the first surrender in any Policy year is a full surrender or a partial
surrender of more than 10% of Account Value, no surrender charge will apply to
a portion of the amount

34
<PAGE>

surrendered equal to 10% of your Account Value. Any amount subject to the
surrender charge will not exceed the amount you surrender. The free withdrawal
amount is not cumulative from Policy year to Policy year.

Further, we will waive the surrender charge if you annuitize under Optional
Payment Plan 1 (Life Income with Period Certain), Optional Payment Plan 2
(Income for a Fixed Period) provided that you select a fixed period of 5 years
or more, Optional Payment Plan 3 (for a payment period of at least 5 years
based on a guaranteed interest rate), or Optional Payment Plan 5 (Joint Life
and Survivor Income). See Optional Payment Plans.

DEDUCTIONS FROM THE SEPARATE ACCOUNT
We deduct from the Separate Account an amount, computed daily, at an annual
rate of 1.40% of the daily net asset value. The charge consists of an
administrative expense charge at an effective annual rate of .15% and a
mortality and expense risk charge at an effective annual rate of 1.25%. These
deductions from the Separate Account are reflected in Account Value.

OTHER CHARGES
OPTIONAL DEATH BENEFIT CHARGE

We charge you for expenses related to the elective Optional Death Benefit
("ODB"). We deduct these charges against the Account Value in the Separate
Account at each Policy anniversary and at full surrender to compensate us for
the increased risks and expenses associated with providing the enhanced Death
Benefit. We will allocate the annual ODB charge among the Investment
Subdivisions in the same proportion that the Policy's Account Value in each
Investment Subdivision bears to the total Account Value in all Investment
Subdivisions at the time we make the charge. If the Account Value in the
Separate Account is not sufficient to cover the charge for the ODB, we will
deduct the charge first from the Account Value in the Separate Account, if any,
and then from the Guarantee Account. We will take deductions from the Guarantee
Account from the amounts which have been in the Guarantee Account for the
longest period of time. At full surrender, we will charge you a pro-rata
portion of the annual charge. We guarantee that the ODB charge will never
exceed an annual rate of 0.25% of your Account Value.

POLICY MAINTENANCE CHARGE

We will deduct an annual charge of $25 from the Account Value of each Policy to
compensate us for certain administrative expenses incurred in connection with
the Policies. We will deduct the charge at each Policy anniversary and at full
surrender. We will waive this charge if your Account Value at the time of
deduction is more than $75,000.

We will allocate the annual policy maintenance charge among the Investment
Subdivisions in the same proportion that the Policy's Account Value in each

35
<PAGE>

Investment Subdivision bears to the total Account Value in all Investment
Subdivisions at the time we make the charge. If there is insufficient Account
Value allocated to the Separate Account, we will deduct any remaining portion
of the charge from the Guarantee Account proportionally from all monies in the
Guarantee Account. Other allocation methods may be available upon request.

TRANSFER CHARGES

You may transfer amounts from and among the Investment Subdivisions of the
Separate Account and the Guarantee Account. You may make twelve transfers each
calendar year without incurring a charge. After that, each time you transfer
amounts during that calendar year, we will deduct a transfer charge of up to
$10 from the amount transferred to compensate us for the costs in making the
transfer. We will not charge for transfers occurring after income payments
begin.

This charge is at cost with no profit to us.

OTHER CHARGES AND DEDUCTIONS

Each portfolio incurs certain fees and expenses. To pay for these charges, the
portfolio makes deductions from its assets. The deductions are described more
fully in each Fund's prospectus.

ADDITIONAL INFORMATION

We may reduce or eliminate the administrative expense and surrender charges
described previously for any particular Policy. However, we will reduce these
charges only to the extent that we anticipate lower distribution and/or
administrative expenses, or that we perform fewer sales or administrative
services than those originally contemplated in establishing the level of those
charges. Lower distribution and administrative expenses may be the result of
economies associated with (1) the use of mass enrollment procedures, (2) the
performance of administrative or sales functions by the employer, (3) the use
by an employer of automated techniques in submitting deposits or information
related to deposits on behalf of its employees, or (4) any other circumstances
which reduce distribution or administrative expenses. We will state the exact
amount of administrative expense and surrender charges applicable to a
particular Policy in that Policy. We will include any such differences in your
Policy.

36
<PAGE>

The Policy

The Policy is an individual flexible premium variable deferred annuity Policy.
We describe your rights and benefits below and in the Policy.

PURCHASE OF THE POLICY
If you wish to purchase a Policy, you must apply for it through an authorized
sales representative. The sales representative will send your completed
application to us, and we will decide whether to accept or reject it. If we
accept your application, our legally authorized officers prepare and execute a
Policy. We then send the Policy to you through your sales representative. See
Distribution of the Policies.

If we receive a completed application and all other information necessary for
processing a purchase order, we will apply your initial premium payment no
later than two business days after we receive the order. While attempting to
finish an incomplete application, we may hold your initial premium payment for
no more than five business days. If the incomplete application cannot be
completed within those five days, we will inform you of the reasons, and will
return your premium payment immediately (unless you specifically authorize us
to keep it until the application is complete). Once you complete your
application, we must apply the initial premium payment within two business
days. We will apply any subsequent premium payments on the Business Day they
are received.

To apply for a Policy, you must be of legal age and also be eligible to
participate in any of the qualified or non-qualified plans for which we
designed the Policies. The Annuitant cannot be older than age 85, unless we
approve a different age.

This Policy may be used with certain tax qualified retirement plans. The Policy
includes attributes such as tax deferral on accumulated earnings. Qualified
retirement plans provide their own tax deferral benefit; the purchase of this
Policy does not provide additional tax deferred benefits beyond those provided
in the qualified plan. Accordingly, if you are purchasing this Policy through a
qualified plan, you should consider purchasing this Policy for its Death
Benefit, income benefits and other non-tax-related benefit. Please consult a
tax advisor for information specific to your circumstances in order to
determine whether the Policy is an appropriate investment for you.

OWNERSHIP
As Owner, you have all rights under the Policy, subject to the rights of any
irrevocable beneficiary. According to New York law, the assets of the Separate
Account are held for the exclusive benefit of all Owners and their Designated
Beneficiaries. Qualified Policies may not be assigned or transferred except as
permitted by the Employee Retirement Income Security Act (ERISA) of 1974 and
upon written notification to us.

37
<PAGE>

PREMIUM PAYMENTS

We assume no responsibility for the validity or effect of any assignment.
Consult your tax advisor about the tax consequences of an assignment.

If you name a Joint Owner in the application, we will treat the Joint Owners as
having equal undivided interests in the Policy. All Owners must together
exercise any ownership rights in this Policy.
PREMIUM PAYMENTS

You may make premium payments at a frequency and in the amount you select,
subject to certain limitations. You must obtain our approval before you make
total premium payments for an Annuitant age 79 or younger that exceed
$2,000,000. If the Annuitant is age 80 or older at the time of payment, the
total amount not subject to prior approval is $1,000,000. Payments may be made
or, if stopped, resumed at any time until the Maturity Date, the surrender of
the Policy, or the death of the Owner (or Joint Owner, if applicable),
whichever comes first. We reserve the right to refuse to accept a premium
payment for any lawful reason and in a manner that does not unfairly
discriminate against similarly situated purchasers.

The minimum initial premium payment is $5,000 (or $2,000 if your Policy is an
IRA Policy). We may accept a lower initial premium payment in the case of
certain group sales. Each additional premium payment must be at least $500 for
Non-Qualified Policies, $50 for IRA Policies and $100 for other Qualified
Policies.

BUSINESS DAY

We will value Accumulation and Annuity Units once daily as of the close of
trading (currently 4:00 p.m., New York time) for each day the New York Stock
Exchange is open except for days on which a Fund does not value its shares. If
a Valuation Period contains more than one day, the unit values will be same for
each day in the Valuation Period.

ALLOCATION OF PREMIUM PAYMENTS

We place net premium payments into the Separate Account's Investment
Subdivisions, each of which invests in shares of a corresponding portfolio of
the Funds, and/or the Guarantee Account, according to your instructions. You
may allocate premiums to up to ten Investment Subdivisions at any one time.

The percentage of any premium payment which you can put into any one Investment
Subdivision or interest rate guarantee period must be at least 1%. Upon
allocation to the appropriate Investment Subdivisions we convert net premium
payments into Accumulation Units. We determine the number of Accumulation Units
credited by dividing the amount allocated to each Investment Subdivision by the
value of an

38
<PAGE>

Accumulation Unit for that Investment Subdivision on the Business Day on which
we receive the any additional premium payment at our Variable Annuity Service
Center if received before 4:00 p.m., New York time. If we receive the
additional premium payment at or after 4:00 p.m, New York time, we will use the
Accumulation Unit value computed on the next Business Day. The number of
Accumulation Units determined in this way is not changed by any subsequent
change in the value of an Accumulation Unit. However, the dollar value of an
Accumulation Unit will vary depending not only upon how well the portfolio's
investments perform, but also upon the charges of the Separate Account and the
fees and expenses of the portfolios.

You may change the allocation of subsequent premium payments at any time,
without charge, by sending us acceptable notice in writing. The new allocation
will apply to any premium payments made after we receive notice of the change.
We will value any subsequent premium payments on the Business Day we receive
them.

VALUATION OF ACCUMULATION UNITS

We value Accumulation Units for each Investment Subdivision separately.
Initially, we arbitrarily set the value of each Accumulation Unit at $10.00.
After that, the value of an Accumulation Unit in any Investment Subdivision for
a Valuation Period equals the value of an Accumulation Unit in that Investment
Subdivision as of the preceding Valuation Period multiplied by the net
investment factor of that Investment Subdivision for the current Valuation
Period.

The net investment factor is an index we use to measure the investment
performance of an Investment Subdivision from one Valuation Period to the next.
The net investment factor for any Investment Subdivision for any Valuation
Period reflects the change in the net asset value per share of the portfolio
held in the Investment Subdivision from one Valuation Period to the next,
adjusted for the daily deduction of the administrative expense and mortality
and expense risk charges from assets in the Investment Subdivision. If any "ex-
dividend" date occurs during the Valuation Period, we take into account the per
share amount of any dividend or capital gain distribution so that the unit
value is not impacted. Also, if we need to reserve money for taxes, we take
into account a per share charge or credit for any taxes reserved for which we
determine to have resulted from the operations of the Investment Subdivision.

39
<PAGE>

Transfers

TRANSFERS BEFORE THE MATURITY DATE
Before the earliest of the surrender of the Policy, payment of any Death
Benefit, or the Maturity Date, you may transfer all or a portion of your
investment between and among the Investment Subdivisions of the Separate
Account and the Guarantee Account, subject to certain conditions. We process
transfers among the Investment Subdivisions of the Separate Account and between
the Investment Subdivisions and the Guarantee Account as of the end of the
Valuation Period that we receive the transfer request at our Variable Annuity
Service Center. We may postpone transfers to, from, or among the Investment
Subdivisions of the Separate Account, under certain circumstances. See
Requesting Payments.

Further, we may restrict certain transfers from the Investment Subdivisions to
the Guarantee Account. We reserve the right to prohibit or limit transfers from
an Investment Subdivision to the Guarantee Account during the six month period
following the transfer of any amount from the Guarantee Account to any
Investment Subdivision.

Currently, there is no other limit on the number of transfers between and among
Investment Subdivisions of the Separate Account and the Guarantee Account;
however, we reserve the right to limit the number of transfers each calendar
year to twelve, or if it is necessary for the Policy to continue to be treated
as an annuity policy by the Internal Revenue Service, a lower number. We also
may not honor transfers made by third parties. (See Transfers by Third
Parties.) Currently, the first twelve transfers in a calendar year are free.
After that, we will assess a charge of up to $10 per transfer during that
calendar year. We do not assess a transfer charge on dollar-cost averaging
transfers or on portfolio rebalancing transfers. The minimum transfer amount is
$100 or the entire balance in the Investment Subdivision or interest rate
guarantee period if the transfer will leave a balance of less than $100.

When thinking about a transfer of Account Value, you should consider the
inherent risk involved. Frequent transfers based on short-term expectations may
increase the risk that you will make a transfer at an inopportune time.

TELEPHONE TRANSACTIONS
We permit certain telephone transactions (including transfers) as described in
this Prospectus. We may be liable for losses resulting from unauthorized or
fraudulent telephone transactions if we fail to employ reasonable procedures to
confirm that the telephone instructions that we receive are genuine. Therefore,
we will employ means to prevent unauthorized or fraudulent telephone requests,
such as sending written confirmation, recording telephone requests, and/or
requesting other identifying information. In addition, we will require written
authorization before allowing you to make telephone transactions. We reserve
the right to limit telephone transactions.

40
<PAGE>

To request a telephone transaction, you should call our Annuity Customer
Service Line. We will record all telephone transaction requests. We will
execute transfer requests received before the close of the New York Stock
Exchange that Business Day at that day's prices. We will execute requests
received after that time on the next Business Day at that day's prices.

TRANSFERS BY THIRD PARTIES

As a general rule and as a convenience to you, we allow you to give third
parties the right to effect transfers on your behalf. However, when the same
third party makes transfers for many Owners, the result can be simultaneous
transfers involving large amounts of Account Value. Such transfers can disrupt
the orderly management of the portfolios underlying the Policy, can result in
higher costs to Owners, and are generally not compatible with the long-range
goals of Owners. We believe that such simultaneous transfers effected by such
third parties are not in the best interests of all shareholders of the Funds
underlying the Policies, and the management of the Funds share this position.
Therefore, we may limit transfers made by a third party.

DOLLAR-COST AVERAGING
The dollar-cost averaging program permits you to systematically transfer on a
monthly or quarterly basis a set dollar amount from the Money Market Investment
Subdivision and/or the Guarantee Account to any combination of other Investment
Subdivisions (as long as the total number of Investment Subdivisions used does
not exceed 10 at any one time). The dollar-cost averaging method of investment
is designed to reduce the risk of making purchases only when the price of units
is high, but you should carefully consider your financial ability to continue
the program over a long enough period of time to purchase Accumulation Units
when their value is low as well as when it is high. Dollar-cost averaging does
not assure a profit or protect against a loss.

You may participate in the dollar-cost averaging program by selecting the
program on the application, or by completing a dollar-cost averaging agreement.
The dollar cost averaging program will start 30 days after we receive your
instructions and your premium (unless you specify an earlier date). To use the
dollar-cost averaging program, you must transfer at least $100 from an
Investment Subdivision or an interest rate guarantee period with each transfer.
Once elected, dollar-cost averaging remains in effect from the date we receive
your request until the value of the Investment Subdivision or the interest rate
guarantee period from which transfers are being made is depleted, or until you
cancel the program by written request.

With regard to dollar-cost averaging from the Guarantee Account, we reserve the
right to determine the amount of each automatic transfer. We reserve the right
to transfer any remaining portion of an allocation used for dollar-cost
averaging to the Guarantee

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<PAGE>

Account with a new interest rate guarantee period upon termination of the
dollar-cost averaging program for that allocation.

There is no additional charge for dollar-cost averaging. Dollar-cost averaging
transfers are not subject to a transfer charge. We reserve the right to
discontinue offering or to modify the dollar-cost averaging program at any time
and for any reason.

PORTFOLIO REBALANCING PROGRAM
Once you have allocated your money among the Investment Subdivisions, the
performance of each Investment Subdivision may cause your allocation to shift.
You may instruct us to automatically rebalance (on a quarterly, semi-annual or
annual basis) your Account Value among the Investment Subdivisions to return to
the percentages specified in your allocation instructions. The program does not
include allocations to the Guarantee Account. You may elect to participate in
the portfolio rebalancing program at any time by completing the portfolio
rebalancing agreement. Your percentage allocations must be in whole
percentages.

Subsequent changes to your percentage allocations may be made at any time by
written instructions to our Variable Annuity Service Center. Once elected,
portfolio rebalancing remains in effect from the date we receive your written
request until you instruct us to discontinue portfolio rebalancing. There is no
additional charge for using portfolio rebalancing, and we do not consider a
portfolio rebalancing transfer a transfer for purposes of assessing a transfer
charge or calculating the maximum number of transfers permitted in a calendar
year. Portfolio rebalancing does not guarantee a profit or protect against a
loss. We reserve the right to discontinue offering or to modify the portfolio
rebalancing program at any time and for any reason.

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<PAGE>

Surrenders

SURRENDERS AND PARTIAL SURRENDERS

Subject to the rules discussed below, we will allow the surrender of the Policy
or a withdrawal of a portion of the Account Value at any time before the
Maturity Date upon your written request.

We will not permit a partial surrender that is less than $500 or that reduces
Account Value to less than $5,000. If your partial surrender request would
reduce Account Value to less than $5,000, we will surrender only that amount of
Account Value that would reduce the remaining Account Value to $5,000 and
deduct any surrender charge from the amount you surrendered. Different limits
and other restrictions may apply to qualified retirement plans.

The amount payable on full surrender of the Policy is the Surrender Value at
the end of the Valuation Period during which we receive the request. The
Surrender Value equals the Account Value (after deduction of any policy
maintenance charge and any optional benefit charges) on the Business Day we
receive a request for surrender less any applicable surrender charge. We may
pay the Surrender Value in a lump sum or under one of the optional payment
plans specified in the Policy, based on your instructions.

You may indicate, in writing, from which Investment Subdivisions or interest
rate guarantee periods we are to take your partial surrender. If you do not
tell us, we will deduct the amount of the partial surrender first from the
Investment Subdivisions of the Separate Account on a pro-rata basis, in
proportion to the Account Value in the Separate Account. We then will deduct
any remaining amount from the Guarantee Account. We will take deductions from
the Guarantee Account from the amounts (including any interest credited to such
amounts) which have been in the Guarantee Account for the longest period of
time.

SYSTEMATIC WITHDRAWALS

You may elect in writing on our form to take systematic withdrawals of a
specified dollar amount (in equal installments of at least $100) on a monthly,
quarterly, semi-annual, or annual basis. Payments can begin at any time after
30 days from the Policy Date unless we allow an earlier date. Each partial
surrender may not exceed 10% of your Account Value on the effective date of the
first installment for that Policy year. You may provide specific instructions
as to how we are to take the systematic withdrawals. If you have not provided
specific instructions, or if your specific instructions cannot be carried out,
we will process the withdrawals by first taking on a pro-rata basis
Accumulation Units from all of the Investment Subdivisions in which you have an
interest. To the extent that your Account Value in the Separate Account is not
sufficient to accomplish the withdrawal, we will take the necessary amount from
the Guarantee Account to accomplish the withdrawal.

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<PAGE>

After your systematic withdrawals begin, you may change the frequency and/or
amount of your payments, subject to the following:

. you may request only one such change in a calendar quarter; and

. if you did not elect the maximum amount you could withdraw under this program
at the time you elected the current series of systematic withdrawals, then
you may increase the remaining payments up to the amount which would
distribute the maximum.

A systematic withdrawal program will terminate automatically when a systematic
withdrawal would cause the remaining Account Value to be less than $5,000. If a
systematic withdrawal would cause the Account Value to be less than $5,000,
then we will not process that systematic withdrawal transaction. If any of your
systematic withdrawals would be or becomes less than $50, we reserve the right
to reduce the frequency of payments to an interval that would result in each
payment being at least $50. You may discontinue systematic withdrawals at any
time by notifying us in writing at our Variable Annuity Service Center. You may
request that we pay any remaining payments in a lump sum. Different limits and
other restrictions may apply to qualified retirement plans.

When you consider systematic withdrawals, please remember that each systematic
withdrawal is subject to federal income taxes on any portion considered gain
for tax purposes. In addition, you may be assessed a 10% federal penalty tax on
systematic withdrawals if you are under age 59 1/2 at the time of the
withdrawal.

We reserve the right to prohibit simultaneous systematic withdrawals and
dollar-cost averaging. We also reserve the right to discontinue systematic
withdrawals upon 30 days written notice to Owners.

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<PAGE>

The Death Benefit

DEATH BENEFIT AT DEATH OF ANNUITANT BEFORE MATURITY DATE

If the Annuitant dies before income payments begin, the amount of proceeds
available is the Death Benefit if the Designated Beneficiary (defined below)
elects this option within 90 days of the Annuitant's death. Otherwise, we will
pay Surrender Value. Upon receipt of due proof of the Annuitant's death
(generally, due proof is a certified copy of the death certificate or a
certified copy of the decree of a court of competent jurisdiction as to the
finding of death), we will treat the Death Benefit in accordance with your
instructions, subject to distribution rules and termination of contract
provisions described elsewhere. Once we have paid the Death Benefit, the Policy
will terminate and we will have no further obligation under the Policy. We will
assess surrender charges if the Policy is surrendered more than 90 days after
the death of the Annuitant.

The Death Benefit will be the greater of:

. the minimum death benefit (described below); or

. the Account Value on the date we receive due proof of death of the Annuitant.

During the first six Policy years, and subsequently if the Annuitant was age 81
or older on the Policy Date, the minimum death benefit is the total premium
payments adjusted for any partial surrenders.

During any subsequent six-year period, if the Annuitant was age 80 or younger
on the Policy Date, the minimum death benefit will be the Death Benefit on the
last day of the previous six-year period plus any premium payments since then,
adjusted for any partial surrenders.

DEATH OF AN OWNER OR JOINT OWNER BEFORE THE MATURITY DATE

General: In certain circumstances, Federal tax law requires that distributions
be made under this Policy upon the first death of:

. an Owner or Joint Owner, or

. the Annuitant if any Owner is a non-natural entity (such as a trust or
corporation).

The discussion below describes the methods available for distributing the value
of the Policy upon death.

Designated Beneficiary: At the death of any Owner (or Annuitant, if any Owner
is a non-natural entity), the person or entity first listed below who is alive
or in existence on the date of that death will become the Designated
Beneficiary:

(1) Owner or Joint Owners;

(2) Primary beneficiary;

(3) Contingent beneficiary; or

(4) Owner's estate.

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<PAGE>

We then will treat the Designated Beneficiary as the sole Owner of the Policy.
If there is more than one Designated Beneficiary, we will treat each one
separately in applying the tax law's rules described below.

Distribution Rules: The distributions required by Federal tax law differ
depending on whether the Designated Beneficiary is the spouse of the deceased
Owner (or of the Annuitant, if the Policy is owned by a non-natural entity).

. Spouses -- If the Designated Beneficiary is the surviving spouse of the
deceased person, the surviving spouse may continue the Policy in force with
the surviving spouse as the new Owner. If the deceased person was the
Annuitant and there was no surviving Contingent Annuitant, the surviving
spouse will automatically become the new Annuitant. At the death of the
surviving spouse, this provision may not be used again, even if the surviving
spouse remarries. In that case, the entire interest in the Policy will be
paid within 5 years of such spouse's death to the beneficiary named by the
surviving spouse. If no beneficiary is named, such payment will be made to
the surviving spouse's estate. The Account Value on the date we receive due
proof of death of the Annuitant will be set equal to the Death Benefit on
that date. Any increase in the Account Value will be allocated to the
Investment Subdivisions using the premium allocation in effect at that time.
Any Death Benefit payable subsequently (at the death of the new Annuitant)
will be based on the new Annuitant's age on the Policy Date, rather than the
age of the previously deceased Annuitant.

. Non-Spouses -- If the Designated Beneficiary is not the surviving spouse of
the deceased person, this Policy cannot be continued in force indefinitely.
Instead, upon the death of any Owner (or Annuitant, if any Owner is a non-
natural entity), payments must be made to (or for the benefit of) the
Designated Beneficiary under one of the following payment choices:

(1) Receive the Surrender Value in one lump sum payment upon receipt of due
proof of death.

(2) Receive the Surrender Value at any time during the five year period
following the date of death. At the end of the five year period, we will
pay in a lump sum payment any Surrender Value still remaining.

(3) Apply the Surrender Value to provide a monthly income benefit under
Optional Payment Plan 1 or 2. The first monthly income benefit payment
must be made no later than one year after the date of death. Also, the
monthly income benefit payment period must be either the lifetime of the
Designated Beneficiary or a period not exceeding the Designated
Beneficiary's life expectancy.

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<PAGE>

If no choice is made by the Designated Beneficiary within 30 days following
receipt of due proof of death, we will use payment choice 2 (payment of the
Surrender Value within 5 years of the date of death). We will not accept any
premium payments after the non-spouse's death. If the Designated Beneficiary
dies before all required payments have been made, we will make any remaining
payments to the person named by the Designated Beneficiary. If no person is so
named, we will pay the Designated Beneficiary's estate.

Under payment choices 1 or 2, the Policy will terminate upon payment of the
entire Surrender Value. Under payment choice 3, this Policy will terminate when
we apply the Surrender Value to provide a Monthly Income Benefit.

Amount of the Proceeds: The proceeds we pay will vary, in part, based on the
person who dies. We show these amounts below.

<TABLE>
<CAPTION>
Person Who Died Proceeds Paid
-------------------------------------------
<S> <C>
Owner or Joint Owner Surrender Value
(who is not the Annuitant)
-------------------------------------------
Owner or Joint Owner Death Benefit
(who is the Annuitant)
-------------------------------------------
Annuitant Death Benefit
</TABLE>

Upon receipt of due proof of death, the Designated Beneficiary will instruct us
how to treat the proceeds subject to the distribution rules we discussed above.

DEATH OF OWNER, JOINT OWNER, OR ANNUITANT AFTER INCOME PAYMENTS BEGIN
If an Owner, Joint Owner, or Annuitant dies after income payments have begun,
or if a Designated Beneficiary receiving income payments dies after the date
income payments have begun, payments made under the Policy will be made at
least as rapidly as under the method of distribution in effect at the time of
the death, notwithstanding any other provision of the Policy.

ELECTIVE OPTIONAL DEATH BENEFIT

The Optional Death Benefit Rider provides for an annual step-up in death
benefit, as described below. (This may be referred to as the "Annual
EstateProtector" in our marketing materials). The Designated Beneficiary may
elect the Optional Death Benefit at any time after the Annuitant's death. If we
pay this Death Benefit, the Policy will terminate, and we will have no further
obligation under the Policy.

The Death Benefit under the Optional Death Benefit Rider is the greater of: (1)
the Death Benefit described above under "Death Benefit at Death of Annuitant
Before Maturity Date," and (2) the minimum Death Benefit described below.

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<PAGE>

During the first Policy year, the minimum Death Benefit under the Optional
Death Benefit Rider is the total of premium payments made, adjusted for any
partial surrenders. After the first Policy year and until the Policy
anniversary immediately preceding the Annuitant's 81st birthday, the minimum
Death Benefit is the Policy's greatest Death Benefit on any previous Policy
anniversary, plus the total premium payments made since that date, adjusted for
any partial surrenders taken since that date. Beginning on the Policy
anniversary immediately preceding the Annuitant's 81st birthday, the minimum
Death Benefit is the Policy's minimum Death Benefit on that date, plus the
total premium payments made since that date, less adjustments for any partial
surrenders taken since that date.

Your election of the Optional Death Benefit Rider is effective on the Policy
Date (unless another effective date is shown on the Policy data pages). It will
remain in effect while the Policy is in force and before income payments begin,
or until the Policy anniversary following the date of receipt of your request
to terminate the rider. If we receive your request within 30 days of any Policy
anniversary, you may request that the rider terminate as of that anniversary.
We charge you for this benefit. This charge will not exceed .25% of Account
Value. See "Elective Optional Death Benefit Charge." Amounts payable under the
Optional Death Benefit Rider are subject to the distribution rules described
above.

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<PAGE>

Income Payments

The Maturity Date is the date on which we start payment of income benefits if
the Annuitant is still living. The normal Maturity Date will be the Policy
anniversary that immediately follows the Annuitant's 90th birthday. You may
select an earlier Maturity Date by sending written notice to our Variable
Annuity Servicing Center. If you change the Maturity Date, Maturity Date will
then be the Maturity Date you selected. (Please note the following exception:
Policies issued under Qualified Retirement Plans provide for income payments to
start at the date and under the option specified in the plan.)

We will pay a monthly income benefit to the Owner beginning on the Maturity
Date if the Annuitant is still living. We will pay the monthly income benefit
in the form of variable income payments similar to those described in Optional
Payment Plan 1, Life Income with 10 Years Certain (automatic payment plan),
using the sex and settlement age of the Annuitant instead of the payee, unless
you make another election. You may also choose to receive the maturity value
(that is, the Surrender Value of your Policy on the date immediately preceding
the Maturity Date) in one lump sum in which case we will cancel the Policy.

Under the Life Income with 10 Years Certain plan, if the Annuitant lives longer
than ten years, payments will continue for his or her life. If the Annuitant
dies before the end of ten years, we will discount the remaining payments for
the ten year period at the same rate used to calculate the monthly income
payment. If the remaining payments are variable income payments, we will assume
the amount of each payment that we discount equals the payment amount on the
date we receive due proof of death. We will pay this discounted amount in one
sum.

The Policy also provides optional forms of annuity payments, each of which is
payable on a fixed basis. Optional Payment Plans 1 and 5 also are available on
a variable basis. The Policy provides that all or part of the Account Value may
be used to purchase an annuity.

If you elect fixed income payments, the guaranteed amount payable will earn
interest at 3% compounded yearly. We may increase the interest rate which will
increase the amount we pay to you or the payee.

If you elect variable income payments, your income payments, after the first
payment, will reflect the investment experience of the Investment Subdivisions
to which you allocated Account Value.

We will make annuity payments monthly unless you elect quarterly, semi-annual
or annual installments. Under the monthly income benefit and all of the
optional

49
<PAGE>

payment plans, if any payment made more frequently than annually would be or
becomes less than $20, we reserve the right to reduce the frequency of payments
to an interval that would result in each payment being at least $20. If the
annual payment payable at maturity is less than $20, we will pay the maturity
value in a lump sum. Upon making such a payment, we will have no future
obligation under the Policy. Following are explanations of the optional payment
plans available.

OPTIONAL PAYMENT PLANS
Plan 1 -- Life Income with Period Certain. This option guarantees periodic
payments during a designated period. If the payee lives longer than the minimum
period, payments will continue for his or her life. The minimum period can be
10, 15, or 20 years. The payee selects the designated period. If the payee dies
during the minimum period, we will discount the amount of the remaining
guaranteed payments at the same rate used in calculating income payments. We
will pay the discounted amount in one sum to the payee's estate unless
otherwise provided.

Plan 2 -- Income for a Fixed Period. This option provides for periodic payments
to be made for a fixed period not longer than 30 years. Payments can be annual,
semi-annual, quarterly, or monthly. If the payee dies, we will discount the
amount of the remaining guaranteed payments to the date of the payee's death at
the same rate used in calculating income payments. We will pay the discounted
amount in one sum to the payee's estate unless otherwise provided.

Plan 3 -- Income of a Definite Amount. This option provides periodic payments
of a definite amount to be paid. Payments can be annual, semi-annual,
quarterly, or monthly. The amount paid each year must be at least $120 for each
$1,000 of proceeds. Payments will continue until the proceeds are exhausted.
The last payment will equal the amount of any unpaid proceeds. If the payee
dies, we will pay the amount of the remaining proceeds with earned interest in
one sum to the payee's estate unless otherwise provided.

Plan 4 -- Interest Income. This option provides for periodic payments of
interest earned from the proceeds left with us. Payments can be annual, semi-
annual, quarterly, or monthly. If the payee dies, we will pay the amount of
remaining proceeds and any earned but unpaid interest in one sum to the payee's
estate unless otherwise provided. This plan is not available under Qualified
Policies.

Plan 5 -- Joint Life and Survivor Income. This option provides for us to make
monthly payments to two payees for a guaranteed minimum of 10 years. Each payee
must be at least 35 years old when payments begin. Payments will continue as
long as either payee is living. If both payees die before the end of the
minimum period, we will discount the amount of the remaining payments for the
10-year period at the

50
<PAGE>

same rate used in calculating income payments. We will pay the discounted
amount in one sum to the survivor's estate unless otherwise provided.

If the payee is not a natural person, our consent must be obtained before
selecting an Optional Payment Plan. Before the Maturity Date, you may change:

. your Maturity Date;

. your optional payment plan;

. the allocation of your investment among the Investment Subdivisions; and

. the Owner, Joint Owner, primary beneficiary, contingent beneficiary, and
contingent Annuitant upon written notice to the Variable Annuity Service
Center if you reserved this right and the Annuitant is living.

We must receive your request for a change in a form satisfactory to us. The
change will take effect as of the date you sign the request. The change will be
subject to any payment made before we recorded the change.

Fixed income payments will begin on the date we receive due proof of the
Annuitant's death, on surrender, or on the Policy's Maturity Date. Variable
income payments will begin within seven days after the date payments would
begin under the corresponding fixed option. Payments under Optional Payment
Plan 4 (Interest Income) will begin at the end of the first interest period
after the date proceeds are otherwise payable.

VARIABLE INCOME PAYMENTS
We will determine your variable income payments using:

1. The maturity value;

2. The annuity tables contained in the Policy;

3. The optional payment plan selected; and

4. The investment performance of the Investment Subdivisions selected.

To determine the amount of payment, we make this calculation:

1. First, we determine the dollar amount of the first income payment; then

2. We allocate that amount to the Investment Subdivisions according to your
instructions; then

3. We determine the number of Annuity Units for each Investment Subdivision by
dividing the amount allocated by the Annuity Unit Value seven days before
the income payment is due; and finally

4. We calculate the value of the Annuity Units for each Investment Subdivision
seven days before the income payment is due for each income payment
thereafter.

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<PAGE>

To calculate your variable income payments, we need to make an assumption
regarding the investment performance of the Investment Subdivisions you select.
We call this your assumed investment rate. This rate is simply the total
return, after expenses, you need to earn to keep your variable income payments
level. We assume an effective annual rate of 3%. This means that if the
annualized investment performance, after expenses, of your Investment
Subdivisions is less than 3%, then the dollar amount of your variable income
payment will decrease. Conversely, if the annualized investment performance,
after expenses, of your Investment Subdivisions is greater than 3%, then the
dollar amount of your income payments will increase.

TRANSFERS AFTER THE MATURITY DATE
If we are making variable income payments, the payee may change the Investment
Subdivisions from which we are making the payments once each calendar year. The
transfer will be effective as of the end of the Valuation Period during which
we receive written request at our Variable Annuity Service Center. However, we
reserve the right to limit the number of transfers if necessary for the Policy
to continue to be treated as an annuity under the Code. We also reserve the
right to refuse to execute any transfer if any of the Investment Subdivisions
that would be affected by the transfer is unable to purchase or redeem shares
of the Fund in which the Investment Subdivision invests. If the number of
Annuity Units remaining in an Investment Subdivision after a transfer is less
than 1, we will transfer the remaining balance in addition to the amount
requested for the transfer.

We do not permit transfers between the Investment Subdivisions and the
Guarantee Account after the Maturity Date.

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<PAGE>

Federal Tax Matters

INTRODUCTION
This part of the Prospectus discusses the Federal income tax treatment of the
Policy. The Federal income tax treatment of the Policy is complex and sometimes
uncertain. The Federal income tax rules may vary with your particular
circumstances. This discussion does not address all of the Federal income tax
rules that may affect you and your Policy. This discussion also does not
address other Federal tax consequences, or state or local tax consequences,
associated with a Policy. As a result, you should always consult a tax advisor
about the application of tax rules to your individual situation.

TAXATION OF NON-QUALIFIED POLICIES
This part of the discussion describes some of the Federal income tax rules
applicable to Non-Qualified Policies. A Non-Qualified Policy is a Policy not
issued in connection with a qualified retirement plan receiving special tax
treatment under the Code, such as an individual retirement annuity or a section
401(k) plan.

Tax Deferral on Earnings. The Federal income tax law does not tax any increase
in an Owner's Account Value until there is a distribution from the Policy.
However, certain requirements must be satisfied in order for this general rule
to apply, including:

. An individual must own the Policy (or the tax law must treat the Policy as
owned by an individual);

. The investments of the Separate Account must be "adequately diversified" in
accordance with Internal Revenue Service ("IRS") regulations;

. The Owner's right to choose particular investments for a Policy must be
limited; and

. The Policy's Maturity Date must not occur near the end of the Annuitant's
life expectancy.

This part of the Prospectus discusses each of these requirements.

Policies not owned by an individual -- no tax deferral and loss of interest
deduction: As a general rule, the Code does not treat a Policy that is owned by
an entity (rather than an individual) as an annuity contract for Federal income
tax purposes. The entity owning the Policy pays tax currently on the excess of
the Account Value over the premiums paid for the Policy. Policies issued to a
corporation or a trust are examples of Policies where the Owner pays current
tax on the Policy's earnings.

There are several exceptions to this rule. For example, the Code treats a
Policy as owned by an individual if the nominal owner is a trust or other
entity that holds the Policy as an agent for an individual. However, this
exception does not apply in the case of any employer that owns a Policy to
provide deferred compensation for its employees.

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<PAGE>

In the case of a Policy issued after June 8, 1997 to a taxpayer that is not an
individual, or a Policy held for the benefit of an entity, the entity will lose
its deduction for a portion of its otherwise deductible interest expenses. This
disallowance does not apply if the Owner pays tax on the annual increase in the
Account Value. Entities that are considering purchasing the Policy, or entities
that will benefit from someone else's ownership of a Policy, should consult a
tax advisor.

Investments in the Separate Account must be diversified: For a Policy to be
treated as an annuity contract for Federal income tax purposes, the investments
of a separate account such as the Separate Account must be "adequately
diversified." The IRS has issued regulations that prescribe standards for
determining whether the investments of the Separate Account are adequately
diversified. If the Separate Account fails to comply with these diversification
standards, the Owner could be required to pay tax currently on the excess of
the Account Value over the premiums paid for the Policy.

Although we do not control the investments of all of the Funds (we only
indirectly control those of GE Investments Funds, Inc., through an affiliated
company), we expect that the Funds will comply with the IRS regulations so that
the Separate Account will be considered "adequately diversified."

Restrictions on the extent to which an Owner can direct the investment of
Account Values: Federal income tax law limits the Owner's right to choose
particular investments for the Policy. The U.S. Treasury Department stated in
1986 that it expected to issue guidance clarifying those limits, but it has not
yet done so. Thus, the nature of the limits is currently uncertain. As a
result, an Owner's right to allocate Account Values among the portfolios may
exceed those limits. If so, the Owner would be treated as the owner of the
assets of the Separate Account and thus subject to current taxation on the
income and gains from those assets.

We do not know what limits the Treasury Department may set forth in any
guidance that the Treasury Department may issue or whether any such limits will
apply to existing Policies. We therefore reserve the right to modify the Policy
without the Owners' consent to attempt to prevent the tax law from considering
the Owners as the owners of the assets of the Separate Account.

Age at which annuity payouts must begin: Federal income tax rules do not
expressly identify a particular age by which annuity payouts must begin.
However, those rules do require that an annuity contract provide for
amortization, through annuity payouts, of the contract's premiums paid and
earnings. If annuity payouts under the Policy begin or are scheduled to begin
on a date past the Annuitant's 85th birthday, it is possible that the tax law
will not treat the Policy as an annuity contract for Federal

54
<PAGE>

income tax purposes. In that event, the Owner would be currently taxable on the
excess of the Account Value over the premiums paid for the Policy.

No Guarantees Regarding Tax Treatment: We make no guarantees regarding the tax
treatment of any Policy or of any transaction involving a Policy. However, the
remainder of this discussion assumes that your Policy will be treated as an
annuity contract for Federal income tax purposes and that the tax law will not
impose tax on any increase in your Account Value until there is a distribution
from your Policy.

Withdrawals And Surrenders. A withdrawal occurs when you receive less than the
total amount of the Policy's Surrender Value. In the case of a withdrawal, you
will pay tax on the amount you receive to the extent your Account Value before
the withdrawal exceeds your "investment in the contract." (This term is
explained below.) This income (and all other income from your Policy) is
ordinary income. The Code imposes a higher rate of tax on ordinary income than
it does on capital gains.

A surrender occurs when you receive the total amount of the Policy's Surrender
Value. In the case of a surrender, you will pay tax on the amount you receive
to the extent it exceeds your "investment in the contract."

Your "investment in the contract" generally equals the total of your premium
payments under the Policy, reduced by any amounts you previously received from
the Policy that you did not include in your income.

Your Policy imposes mortality charges relating to the Death Benefit, including
any elective ODB Rider. It is possible that all or a portion of these charges
could be treated as withdrawals from the Policy.

Assignments and Pledges. The Code treats any assignment or pledge of (or
agreement to assign or pledge) any portion of your Account Value as a
withdrawal of such amount or portion.

Gifting a Policy. If you transfer ownership of your Policy -- without receiving
a payment equal to your Policy's value -- to a person other than your spouse
(or to your former spouse incident to divorce), you will pay tax on your
Account Value to the extent it exceeds your "investment in the contract." In
such a case, the new owner's "investment in the contract" will be increased to
reflect the amount included in your income.

Systematic Withdrawals. In the case of systematic withdrawals, the amount of
each withdrawal should be considered a distribution and taxed in the same
manner as a withdrawal from the Policy.

Taxation of Annuity Payouts. The Code imposes tax on a portion of each annuity
payout (at ordinary income tax rates) and treats a portion as a nontaxable
return of

55
<PAGE>

your "investment in the contract." The Company will notify you annually of the
taxable amount of your annuity payout.

Pursuant to the Code, you will pay tax on the full amount of your annuity
payouts once you have recovered the total amount of the "investment in the
contract." If annuity payouts cease because of the death of the Annuitant and
before the total amount of the "investment in the contract" has been recovered,
the unrecovered amount generally will be deductible.

If proceeds are left with us (Optional Payment Plan 4), they are taxed in the
same manner as a surrender. The Owner must pay tax currently on the interest
credited on these proceeds. This treatment could also apply to Plan 3 if the
payee is at an advanced age, such as age 80 or older.

Taxation of Death Benefits. We may distribute amounts from your Policy because
of the death of an Owner, a Joint Owner, or an Annuitant. The tax treatment of
these amounts depends on whether the Owner, Joint Owner, or Annuitant dies
before or after the Policy's Maturity Date.

Before the Policy's Maturity Date:

. If received under an annuity payout option, death benefits are taxed in the
same manner as annuity payouts.

. If not received under an annuity payout option, death benefits are taxed in
the same manner as a withdrawal.

After the Policy's Maturity Date:

. If received in accordance with the existing annuity payout option, death
benefits are excludible from income to the extent that they do not exceed the
unrecovered "investment in the contract." All annuity payouts in excess of
the unrecovered "investment in the contract" are includible in income.

. If received in a lump sum, the tax law imposes tax on death benefits to the
extent that they exceed the unrecovered "investment in the contract" at that
time.

Penalty Taxes Payable On Withdrawals, Surrenders, Or Annuity Payouts. The Code
may impose a penalty tax equal to 10% of the amount of any payment from your
Policy that is included in your gross income. The Code does not impose the 10%
penalty tax if one of several exceptions applies. These exceptions include
withdrawals, surrenders, or annuity payouts that:

. you receive on or after you reach age 59 1/2,

. you receive because you became disabled (as defined in the tax law),

. a beneficiary receives on or after the death of the Owner, or

56
<PAGE>

. you receive as a series of substantially equal periodic payments for the life
(or life expectancy) of the taxpayer.

It is uncertain whether systematic withdrawals will qualify for this last
exception. If they did, any modification of the systematic withdrawals,
including additional partial withdrawals apart from the systematic withdrawals,
could result in certain adverse tax consequences. In addition, a transfer
between Investment Subdivisions may result in payments not qualifying for this
exception.

Special Rules If You Own More Than One Policy. In certain circumstances, you
must combine some or all of the Non-Qualified Policies you own in order to
determine the amount of an annuity payout, a surrender, or a withdrawal that
you must include in income. For example:

. If you purchase a Policy offered by this Prospectus and also purchase at
approximately the same time an immediate annuity, the IRS may treat the two
contracts as one contract.

. If you purchase two or more deferred annuity contracts from the same life
insurance company (or its affiliates) during any calendar year, the Code
treats all such contracts as one contract.

The effects of such aggregation are not clear. However, it could affect:

. the amount of a surrender, a withdrawal or an annuity payout that you must
include in income, and

. the amount that might be subject to the penalty tax described above.

QUALIFIED RETIREMENT PLANS
We also designed the Policies for use in connection with certain types of
retirement plans that receive favorable treatment under the Code. Policies
issued to or in connection with a qualified retirement plan are called
"Qualified Policies." We do not currently offer all of the types of Qualified
Policies described, and may not offer them in the future. Prospective
purchasers should contact our Variable Annuity Service Center to learn the
availability of Qualified Policies at any given time.

The Federal income tax rules applicable to qualified plans are complex and
varied. As a result, this Prospectus makes no attempt to provide more than
general information about use of the Policy with the various types of qualified
plans. Persons intending to use the Policy in connection with a qualified
retirement plan should obtain advice from a competent advisor.

Types of Qualified Policies. Some of the different types of Qualified Policies
include:

. Individual Retirement Accounts and Annuities ("Traditional IRAs")

. Roth IRAs

. Simplified Employee Pensions ("SEP's")

57
<PAGE>

. Savings Incentive Matched Plan for Employees ("SIMPLE plans," including
"SIMPLE IRAs")

. Public school system and tax-exempt organization annuity plans ("403(b)
plans")

. Qualified corporate employee pension and profit-sharing plans ("401(a)
plans") and qualified annuity plans ("403(a) plans")

. Self-employed individual plans ("H.R. 10 plans" or "Keogh Plans")

. Deferred compensation plans of state and local governments and tax-exempt
organizations ("457 plans")

Terms of Qualified Retirement Plans and Qualified Policies. The terms of a
qualified retirement plan may affect your rights under a Qualified Policy. When
issued in connection with a qualified retirement plan, we will amend a Policy
as generally necessary to conform to the requirements of the type of plan.
However, the rights of any person to any benefits under qualified retirement
plans may be subject to the terms and conditions of the plans themselves,
regardless of the terms and conditions of the Policy. In addition, we are not
bound by the terms and conditions of qualified retirement plans to the extent
such terms and conditions contradict the Policy, unless we consent.

The Death Benefit and Qualified Policies. Pursuant to IRS regulations, IRAs may
not invest in life insurance contracts. We do not believe that these
regulations prohibit the Death Benefit, including that provided by the ODB
Rider, from being provided under the Policies when we issue the Policies as
Traditional IRAs, Roth IRAs or SIMPLE IRAs. However, the law is unclear and it
is possible that the presence of the Death Benefit under a Policy issued as a
Traditional IRA, Roth IRA or SIMPLE IRA could result in increased taxes to the
Owner.

It is also possible that the Death Benefit could be characterized as an
incidental death benefit. If the Death Benefit were so characterized, this
could result in currently taxable income to purchasers. In addition, there are
limitations on the amount of incidental death benefits that may be provided
under qualified retirement plans, such as in connection with a 403(b) plan.
Even if the Death Benefit under the Policy were characterized as an incidental
death benefit, it is unlikely to violate those limits unless the purchaser also
purchases a life insurance contract in connection with such plan.

Treatment of Qualified Policies Compared with Non-Qualified Policies. Although
some of the Federal income tax rules are the same for both Qualified and Non-
Qualified Policies, many of the rules are different. For example:

. The Code generally does not impose tax on the earnings under either Qualified
or Non-Qualified Policies until received.

58
<PAGE>

. The Code does not limit the amount of premium payments and the time at which
premium payments can be made under Non-Qualified Policies. However, the Code
does limit both the amount and frequency of premium payments made to
Qualified Policies.

. The Code does not allow a deduction for premium payments made for Non-
Qualified Policies, but sometimes allows a deduction or exclusion from income
for premium payments made to a Qualified Policy.

The Federal income tax rules applicable to qualified retirement plans and
Qualified Policies vary with the type of plan and Policy. For example:

. Federal tax rules limit the amount of premium payments that can be made, and
the tax deduction or exclusion that may be allowed for the premium payments.
These limits vary depending on the type of qualified retirement plan and the
circumstances of the plan participant, e.g., the participant's compensation.

. Under most qualified plans, e.g., 403(b) plans and Traditional IRAs, the
Owner must begin receiving payments from the Policy in certain minimum
amounts by a certain age, typically age 70 1/2. However, these "minimum
distribution rules" do not apply to a Roth IRA.

Amounts Received Under Qualified Policies. Amounts are Generally Subject to
Income Tax: Federal income tax rules generally include distributions from a
Qualified Policy in your income as ordinary income. Premium payments that are
deductible or excludible from income do not create "investment in the
contract." Thus, under many Qualified Policies there will be no "investment in
the contract" and you include the total amount you receive in your income.
There are exceptions. For example, you do not include amounts received from a
Roth IRA if certain conditions are satisfied.

Additional Federal Taxes May Be Payable in Connection with a Qualified Policy:
For example, failure to comply with the minimum distribution rules applicable
to certain qualified retirement plans, such as Traditional IRAs, will result in
the imposition of an excise tax. This excise tax generally equals 50% of the
amount by which a minimum required distribution exceeds the actual distribution
from the qualified retirement plan.

Federal Penalty Taxes Payable on Distributions: The Code may impose a penalty
tax equal to 10% of the amount of any payment from your Qualified Policy that
is includible in your income. The Code does not impose the penalty tax if one
of several exceptions apply. The exceptions vary depending on the type of
Qualified Policy you purchase. For example, in the case of an IRA, exceptions
provide that the penalty tax does not apply to a withdrawal, surrender, or
annuity payout:

. received on or after the Owner reaches age 59 1/2,

59
<PAGE>

. received on or after the Owner's death or because of the Owner's disability
(as defined in the tax law),

. received as a series of substantially equal periodic payments for the life
(or life expectancy) of the taxpayer, or

. received as reimbursement for certain amounts paid for medical care.

These exceptions, as well as certain others not described here, generally apply
to taxable distributions from other qualified retirement plans. However, the
specific requirements of the exception may vary.

Moving Money From One Qualified Policy or Qualified Retirement Plan to
Another. Rollovers and Transfers: In many circumstances you may move money
between Qualified Policies and qualified retirement plans by means of a
rollover or a transfer. Special rules apply to such rollovers and transfers. If
you do not follow the applicable rules, you may suffer adverse Federal income
tax consequences, including paying taxes which you might not otherwise have had
to pay. You should always consult a qualified advisor before you move or
attempt to move funds between any Qualified Policy or plan and another
Qualified Policy or plan.

Direct Rollovers: The direct rollover rules apply to certain payments (called
"eligible rollover distributions") from section 401(a) plans, section 403(a) or
(b) plans, H.R. 10 plans, and Qualified Policies used in connection with these
types of plans. (The direct rollover rules do not apply to distributions from
IRAs or section 457 plans). The direct rollover rules require Federal income
tax equal to 20% of the eligible rollover distribution to be withheld from the
amount of the distribution, unless the Owner elects to have the amount directly
transferred to certain Qualified Policies or plans.

Prior to receiving an eligible rollover distribution from the Company, we will
provide you with a notice explaining these requirements and how you can avoid
20% withholding by electing a direct rollover.

FEDERAL INCOME TAX WITHHOLDING
We will withhold and remit to the IRS a part of the taxable portion of each
distribution made under a Policy unless the distributee notifies us at or
before the time of the distribution that he or she elects not to have any
amounts withheld. In certain circumstances, Federal income tax rules may
require us to withhold tax. At the time you request a withdrawal, surrender, or
annuity payout, we will send you forms that explain the withholding
requirements.

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<PAGE>

TAX STATUS OF THE COMPANY
Under existing Federal income tax laws, we do not pay tax on investment income
and realized capital gains of the Separate Account. We do not anticipate that
we will incur any Federal income tax liability on the income and gains earned
by the Separate Account. The Company, therefore, does not impose a charge for
Federal income taxes. If Federal income tax law changes and we must pay tax on
some or all of the income and gains earned by the Separate Account, we may
impose a charge against the Separate Account to pay the taxes.

CHANGES IN THE LAW
This discussion is based on the Code, IRS regulations, and interpretations
existing on the date of this Prospectus. Congress, the IRS, and the courts may
modify these authorities, however, sometimes retroactively.

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<PAGE>

Voting Rights

As required by law, we will vote the portfolio shares held in the Separate
Account at meetings of the shareholders of the Funds. The voting will be done
according to the instructions of Owners who have interests in any Investment
Subdivisions which invest in the portfolios of the Funds. If the 1940 Act or
any regulation under it should be amended, and if as a result we determine that
we are permitted to vote the portfolios' shares in our own right, we may elect
to do so.

We will determine the number of votes which you have the right to cast by
applying your percentage interest in an Investment Subdivision to the total
number of votes attributable to the Investment Subdivision. In determining the
number of votes, we will recognize fractional shares.

We will vote portfolio shares of a class held in an Investment Subdivision for
which we received no timely instructions in proportion to the voting
instructions which we received for all Policies participating in that
Investment Subdivision. We will apply voting instructions to abstain on any
item to be voted on a pro-rata basis to reduce the number of votes eligible to
be cast.

Whenever a Fund calls a shareholders meeting, each person having a voting
interest in an Investment Subdivision will receive proxy voting material,
reports and other materials relating to the relevant portfolio. Since each Fund
may engage in shared funding, other persons or entities besides the Company may
vote Fund shares. See Separate Account -- Investment Subdivisions.

62
<PAGE>

Requesting Payments

To request a payment, you must provide us with notice in a form satisfactory to
us. We will ordinarily pay any Death Benefit, partial surrender, or surrender
proceeds within seven days after receipt at our Variable Annuity Service Center
of all the requirements for such a payment. We will determine the amount as of
the end of the Valuation Period during which our Variable Annuity Servicing
Center receives all such requirements.

We may delay making a payment, applying Account Value to a payment plan, or
processing a transfer request if: (1) the disposal or valuation of the Separate
Account's assets is not reasonably practicable because the New York Stock
Exchange is closed for other than a regular holiday or weekend, trading is
restricted by the SEC, or the SEC declares that an emergency exists; or (2) the
SEC, by order, permits postponement of payment to protect our Owners. We also
may defer making payments attributable to a check that has not cleared (which
may take up to 15 days), and we may defer payment of proceeds from the
Guarantee Account for a withdrawal, surrender, or transfer request for up to
six months from the date we receive the request. The amount deferred will earn
interest at a rate and for a time period not less than the minimum required in
the jurisdiction in which we issued the Policy.

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<PAGE>

Distribution of the Policies

DISTRIBUTOR

Capital Brokerage Corporation (doing business in Indiana, Minnesota, New
Mexico, and Texas as GE Capital Brokerage Corporation) ("Capital Brokerage") is
the distributor and principal underwriter of the Policies. Capital Brokerage, a
Washington corporation and an affiliate of ours, is located at 6630 W. Broad
St., Richmond, Virginia 23230. Properly licensed registered representatives of
both independent and affiliated broker/dealers (including our affiliate, Terra
Securities Corporation) sell the Policies. These broker/dealers have selling
agreements with Capital Brokerage and have been licensed by state insurance
departments to represent us. Properly licensed registered representatives of
Capital Brokerage also sell the Policies. Capital Brokerage is registered with
the SEC under the Securities Exchange Act of 1934 as a broker/dealer and is a
member of the National Association of Securities Dealers, Inc. ("NASD"). We
will offer the Policies in all states where we are licensed to do business.

We pay commissions and other expenses associated with the promotion and sales
of the Policies to broker/dealers. Broker/dealers may receive aggregate
commissions of up to 6.60% of your aggregate purchase payments.
COMMISSIONS

Under certain circumstances and in exchange for lower initial commissions,
certain sellers of the Policies may be paid a persistency trail commission
which will take into account, among other things, the length of time purchase
payments have been held under the Policy, and Account Values. A trail
commission is not anticipated to exceed, on an annual basis, 1.00% of the
Account Values considered in connection with the trail commission. We may also
pay override payments, expense allowances, bonuses, wholesaler fees and
training allowances. Registered representatives earn commissions from the
broker/dealer with which they are affiliated and such arrangements may vary. In
addition, registered representatives who meet specified production levels may
qualify, under sales incentive programs adopted by us, to receive non-cash
compensation such as expense-paid trips, expense-paid educational seminars and
merchandise.

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<PAGE>

Additional Information

OWNER QUESTIONS
The obligations to Owners under the Policies are ours. Please direct your
questions and concerns to us at our Variable Annuity Service Center.

RETURN PRIVILEGE

Within 10 days after you receive the Policy (or such period as may be required
by applicable laws), you may cancel it for any reason by delivering or mailing
it postage prepaid, to our Variable Annuity Service Center. In the case of
certain replacements, the free look period may be longer. If you cancel your
Policy, it will be void. The amount of the refund you receive will equal the
Account Value on the date we receive the Policy plus any amount deducted from
premium payments, but without reduction for any surrender charge or such other
amount as may be required by applicable law. You may not make partial
surrenders or transfers during the free look period.

STATE REGULATION
As a life insurance company organized and operated under the laws of the State
of New York, we are subject to provisions governing life insurers and to
regulation by the New York Commissioner of Insurance.

Our books and accounts are subject to review and examination by the State
Corporation Commission of the State of New York at all times. That Commission
conducts a full examination of our operations at least every five years.

EVIDENCE OF DEATH, AGE, GENDER OR SURVIVAL
We may require proof of the age, gender or survival of any person or persons
before acting on any applicable Policy provision.

RECORDS AND REPORTS
As presently required by the 1940 Act and applicable regulations, we are
responsible for maintaining all records and accounts relating to the Separate
Account. At least once each year, we will send you a report showing
information about your Policy for the period covered by the report. The report
will show the Account Value in each Investment Subdivision. The report also
will show premium payments and charges made during the statement period. We
also will send you an annual and a semi-annual report for each portfolio
underlying an Investment Subdivision to which you have allocated Account
Value, as required by the 1940 Act. In addition, when you make premium
payments, transfers, or partial surrenders, you will receive a written
confirmation of these transactions.

OTHER INFORMATION
A Registration Statement has been filed with the SEC, under the Securities Act
of 1933 as amended, for the Policies being offered here. This Prospectus does
not contain all the information in the Registration Statement, its amendments
and exhibits. Please refer to the Registration Statement for further
information about the Separate Account, the Company, and the Policies offered.
Statements in this Prospectus about the content of Policies and other legal
instruments are summaries. For the complete text of those Policies and
instruments, please refer to those

65
<PAGE>

documents as filed with the SEC and available on the SEC's website at
http://www.sec.gov.

LEGAL MATTERS
The Company, like other life insurance companies, is involved in lawsuits. In
some class action and other lawsuits involving insurance companies, substantial
damages have been sought and/or material settlement payments have been made.
Although the Company cannot predict the outcome of any litigation with
certainty, the Company believes that at the present time there are no pending
or threatened lawsuits that are reasonably likely to have a material adverse
impact on it or the Separate Account.

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<PAGE>

Condensed Financial Information

The 1999 financial statements for Separate Account II and for GE Capital Life
(as well as the auditors' reports thereon) are in the Statement of Additional
Information.

The Accumulation Unit Values and the number of accumulation units outstanding
for each Investment Subdivision for the periods shown are as follows:

<TABLE>
<CAPTION>
Accumulation Accumulation
Unit Values Unit Values No. of
as of as of Units as of
Funds 1/03/00 12/31/99 12/31/99
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
The Alger American Fund
Alger American Growth Portfolio 14.61 14.60 47,413
Alger American Small Capitalization
Portfolio 14.55 14.62 26,274

Federated Insurance Series
Federated Utility Fund II 10.76 10.96 22,004
Federated High Income Bond Fund II 9.74 9.76 19,995
Federated American Leaders Fund II 10.79 11.00 20,556

Fidelity Variable Insurance Products
Fund (VIP)
VIP Equity-Income Portfolio 10.31 10.59 48,133
VIP Growth Portfolio 15.09 15.13 46,688
VIP Overseas Portfolio 13.51 13.45 10,084

Fidelity Variable Insurance Products
Fund II (VIP II)
VIP II Asset Manager Portfolio 11.29 11.39 10,584
VIP II Contrafund Portfolio 13.03 13.24 97,637

Fidelity Variable Insurance Products
Fund III (VIP III)
VIP III Growth & Income Portfolio 11.49 11.70 13,010
VIP III Growth Opportunities Portfolio 11.07 11.27 41,888

GE Investments Funds, Inc.
Money Market Fund 10.52 10.52 161,990
S&P 500 Index Fund 12.61 12.74 172,354
Total Return Fund 11.47 11.59 7,632
International Equity Fund 12.29 12.22 2,208
Real Estate Securities Fund 8.72 8.84 209
Global Income Fund 9.84 9.84 6,423
Value Equity Fund (now known as Mid-Cap
Value Equity Fund) 10.94 11.22 10,625
Income Fund 9.96 10.02 16,078
U.S. Equity Fund 12.33 12.54 26,227

Goldman Sachs Variable Insurance Trust
Fund
Goldman Sachs Growth and Income Fund 9.80 9.91 6,067
Goldman Sachs Mid Cap Value Fund 9.21 9.40 28,190

Janus Aspen Series
Growth Portfolio 15.70 15.85 81,608
Aggressive Growth Portfolio 25.75 25.64 121,228
Worldwide Growth Portfolio 16.27 16.08 100,959
International Growth Portfolio 16.96 16.71 19,367
Balanced Portfolio 13.83 13.99 186,199
Flexible Income Portfolio 10.22 10.25 6,851
Capital Appreciation Portfolio 18.91 18.89 179,393
</TABLE>

67
<PAGE>

<TABLE>
<CAPTION>
Accumulation Accumulation
Unit Values Unit Values No. of
as of as of Units as of
Funds 1/03/00 12/31/99 12/31/99
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Oppenheimer Variable Account Funds
Oppenheimer High Income Fund/VA 9.69 9.70 18,241
Oppenheimer Bond Fund/VA 9.85 9.90 43,260
Oppenheimer Aggressive Growth Fund/VA 18.45 17.83 8,356
Oppenheimer Capital Appreciation Fund/VA 14.44 14.62 6,857
Oppenheimer Multiple Strategies Fund/VA 10.89 10.95 4,655

PBHG Insurance Series Fund, Inc.
PBHG Growth II Portfolio 20.20 19.89 7,052
PBHG Large Cap Growth Portfolio 17.33 17.34 3,577
</TABLE>

68
<PAGE>

Appendix

Standardized Performance Data

We may advertise the historical total returns for the Investment Subdivisions
according to SEC standards. These standards are discussed in the Statement of
Additional Information. The total return for an Investment Subdivision assumes
that an investment has been held in the Investment Subdivision for various
periods of time including a period measured from the date on which the
particular portfolio was first available in Separate Account II. When a
portfolio has been available for one, five, and ten years, we will provide the
total return for these periods, adjusted to reflect current Investment
Subdivision charges. The total return quotations represent the average annual
compounded rates of return that an initial investment of $1,000 in that
Investment Subdivision would equal as of the last day of each period.

In Table 1, we show the standardized average annual total returns of the
Investment Subdivisions for periods from the date on which a particular
portfolio was first available in Separate Account II to December 31, 1999, and
for the one, five and ten year periods ended December 31, 1999. Although the
Policy did not exist during the periods shown in Table 1 below, the returns of
the Investment Subdivisions shown have been adjusted to reflect current
Investment Subdivision charges imposed under the Policy. The total returns
shown in Table 1 reflect the deduction all fees and charges assessed under the
Policy, that is, the portfolio expenses, the mortality and expense risk charge
(deducted daily at an effective annual rate of 1.25% of Account Value) the
administrative expense charge (deducted daily at an effective annual rate of
.15% of Account Value) the annual policy maintenance charge of $25, and the
surrender charge. We assume that you make a complete surrender of the Policy at
the end of the period; therefore, we deduct the surrender charge.

A-1
<PAGE>

Table 1

Standardized Total Returns

<TABLE>
<CAPTION>
For the For the For the From the
1-year 5-year 10-year Inception Date of
period period period in Separate Inception
ended ended ended Account to In Separate
12/31/99 12/31/99 12/31/99 12/31/99 Account*
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
The Alger American Fund
Alger American Growth
Portfolio 26.53 NA NA 26.90 07/27/98
Alger American Small
Capitalization Portfolio 36.12 NA NA 27.01 07/27/98
Federated Insurance Series
Federated American Leaders
Fund II -0.30 NA NA 3.10 07/27/98
Federated High Income Bond
Fund II -4.62 NA NA -5.57 07/27/98
Federated Utility Fund II -5.23 NA NA 2.78 07/27/98
Fidelity Variable Insurance
Products Fund
VIP Equity-Income
Portfolio -0.63 NA NA 0.24 07/27/98
VIP Growth Portfolio 30.19 NA NA 30.20 07/27/98
VIP Overseas Portfolio 35.34 NA NA 19.50 07/27/98
Fidelity Variable Insurance
Products Fund II
VIP II Asset Manager
Portfolio 4.09 NA NA 5.77 07/27/98
VIP II Contrafund
Portfolio 17.13 NA NA 18.14 07/27/98
Fidelity Variable Insurance
Products Fund III
VIP III Growth & Income
Portfolio 2.18 NA NA 7.88 07/27/98
VIP III Growth
Opportunities Portfolio -2.67 NA NA 4.97 07/27/98
GE Investments Funds, Inc.
Global Income Fund -13.80 NA NA -5.05 07/27/98
Income Fund -8.14 NA NA -3.84 07/27/98
International Equity Fund 23.15 NA NA 11.40 07/27/98
Mid-Cap Value Equity Fund 10.20 NA NA 4.59 07/27/98
(formerly known as Value
Equity Fund)
Money Market Fund -1.96 NA NA -0.28 07/27/98
Premier Growth Equity Fund 0.00 0.00 0.00 0.00 NA
Real Estate Securities
Fund -7.02 NA NA -11.86 07/27/98
S&P 500 Index Fund 13.52 NA NA 14.83 07/27/98
Total Return Fund 6.23 NA NA 7.11 07/27/98
U.S. Equity Fund 12.53 NA NA 13.54 07/27/98
Goldman Sachs Variable
Insurance Trust
Goldman Sachs Growth and
Income Fund -1.54 NA NA -4.51 07/27/98
Goldman Sachs Mid Cap
Value Fund -7.70 NA NA -8.03 07/27/98
Janus Aspen Series
Aggressive Growth
Portfolio 117.37 NA NA 90.55 07/27/98
Balanced Portfolio 19.61 NA NA 22.98 07/27/98
Capital Appreciation
Portfolio 59.49 NA NA 52.94 07/27/98
Flexible Income Portfolio -5.31 NA NA -2.18 07/27/98
Growth Portfolio 36.68 NA NA 34.70 07/27/98
International Growth
Portfolio 74.63 NA NA 40.01 07/27/98
Worldwide Growth Portfolio 56.97 NA NA 36.12 07/27/98
Oppenheimer Variable
Account Funds
Oppenheimer Aggressive
Growth Fund/VA 75.95 NA NA 46.73 07/27/98
Oppenheimer Bond Fund/VA -8.23 NA NA -4.61 07/27/98
Oppenheimer Capital
Appreciation Fund/VA 34.38 NA NA 27.03 07/27/98
Oppenheimer High Income
Fund/VA -2.66 NA NA -5.96 07/27/98
Oppenheimer Multiple
Strategies Fund/VA 4.79 NA NA 2.74 07/27/98
PBHG Insurance Series Fund,
Inc.
PBHG Growth II Portfolio 90.41 NA NA 58.75 07/27/98
PBHG Large Cap Growth
Portfolio 57.73 NA NA 43.78 07/27/98
Salomon Brothers Variable
Series Funds, Inc
Salomon Investors Fund 0.00 0.00 0.00 0.00 NA
Salomon Strategic Bond
Fund 0.00 0.00 0.00 0.00 NA
Salomon Total Return Fund 0.00 0.00 0.00 0.00 NA
- -------------------------------------------------------------------------------
</TABLE>

Yield more closely reflects current earnings of the GE Investments Funds,
Inc.'s Money Market Fund than its total return.

* Date on which a particular portfolio was first available in Separate Account
II. As Separate Account II is also used for other variable annuities offered
by GE Life & Annuity, this date may be different from the date the portfolio
was first available in this product.

** Subaccount has not yet been made available to the Separate Account.

Past performance is not a guarantee of future results.

A-2
<PAGE>

Non-standardized Performance Data

In addition to the standardized data discussed above, we may also show similar
performance data for other periods.

We may from time to time also advertise or disclose average annual total return
or other performance data in non-standardized formats for the Investment
Subdivisions. The non-standardized performance data may make different
assumptions regarding the amount invested, the time periods shown, or the
effect of partial surrenders or income payments.

All non-standardized performance data will be advertised only if we also
disclose the standardized performance data as shown in Table 1.

Adjusted Historical Performance Data. We may disclose historic performance data
for the portfolios since their inception reduced by some or all of the fees and
charges under the Policy. Such adjusted historic performance includes data that
precedes the date on which a particular portfolio was first available in
Separate Account II. This data is designed to show the performance that would
have resulted if the Policy had been in existence during that time, based on
the portfolio's performance. This data assumes that the Investment Subdivisions
available under the Policy were in existence for the same period as the
portfolio with a level of charges equal to those currently assessed under the
Policy. This data is not intended to indicate future performance.

Based on the method of calculation described in the Statement of Additional
Information, the adjusted historic average annual total returns for the
portfolios for periods from the time a particular portfolio was first available
in Separate Account II to December 31, 1999, and for the one, five and ten year
periods ended December 31, 1999 is shown in Tables 2 and 3, below. The total
returns of the portfolios have been reduced by all charges currently assessed
under the Policy, as if the Policy had been in existence since the inception of
the portfolio. In Table 2, adjusted total returns for the portfolios reflect
deductions of all fees and charges under the Policy, including the mortality
and expense risk charge (deducted daily at an effective annual rate of 1.25% of
Account Value), the administrative expense charge (deducted daily at an
effective annual rate of .15% of Account Value), the annual policy maintenance
charge of $25, and the surrender charge. In Table 2, we assume that you make a
complete surrender of the Policy at the end of the period, therefore we deduct
the surrender charge. In Table 3, we assume that you do not surrender the
Policy, and we do not deduct the surrender charge.

A-3
<PAGE>

Table 2

Adjusted Historical Performance Data assuming surrender at the end of the
applicable time period.

<TABLE>
<CAPTION>
For the For the For the
1-year 5-year 10-year
period period period Portfolio
ended ended ended Inception
12/31/99 12/31/99 12/31/99 Date*
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The Alger American Fund
Alger American Growth Portfolio.......... 26.53 28.79 21.05 01/09/89
Alger American Small Capitalization
Portfolio............................... 36.12 20.53 16.45 09/21/88
Federated Insurance Series
Federated American Leaders Fund II....... -0.30 19.85 NA 02/10/94
Federated High Income Bond Fund II....... -4.62 8.34 NA 03/01/94
Federated Utility Fund II................ -5.23 13.13 NA 02/10/94
Fidelity Variable Insurance Products Fund
VIP Equity-Income Portfolio.............. -0.63 16.50 12.78 10/09/86
VIP Growth Portfolio..................... 30.19 27.60 18.14 10/09/86
VIP Overseas Portfolio................... 35.34 15.26 9.76 01/28/87
Fidelity Variable Insurance Products Fund
II
VIP II Asset Manager Portfolio........... 4.09 13.51 11.46 09/06/89
VIP II Contrafund Portfolio.............. 17.13 NA NA 01/03/95
Fidelity Variable Insurance Products Fund
III
VIP III Growth & Income Portfolio........ 2.18 NA NA 12/31/96
VIP III Growth Opportunities Portfolio... -2.67 NA NA 01/03/95
GE Investments Funds, Inc.
Global Income Fund....................... -13.80 NA NA 05/01/97
Income Fund.............................. -8.14 NA NA 01/02/95
International Equity Fund................ 23.15 NA NA 05/01/95
Mid-Cap Value Equity Fund (formerly known
as Value Equity Fund)................... 10.20 NA NA 05/01/97
Money Market Fund........................ -1.96 3.19 3.30 06/30/85
Premier Growth Equity Fund............... 0.00 0.00 0.00 NA
Real Estate Securities Fund.............. -7.02 NA NA 05/01/95
S&P 500 Index Fund....................... 13.52 25.72 15.99 04/14/85
Total Return Fund........................ 6.23 15.13 11.34 07/01/85
U.S. Equity Fund......................... 12.53 NA NA 01/02/95
Goldman Sachs Variable Insurance Trust
Goldman Sachs Growth and Income Fund..... -1.54 NA NA 01/12/98
Goldman Sachs Mid Cap Value Fund......... -7.70 NA NA 04/30/98
Janus Aspen Series
Aggressive Growth Portfolio.............. 117.37 34.05 NA 09/13/93
Balanced Portfolio....................... 19.61 22.56 NA 09/13/93
Capital Appreciation Portfolio........... 59.49 NA NA 05/01/97
Flexible Income Portfolio................ -5.31 8.74 NA 09/13/93
Growth Portfolio......................... 36.68 27.75 NA 09/13/93
International Growth Portfolio........... 74.63 31.09 NA 05/02/94
Worldwide Growth Portfolio............... 56.97 31.44 NA 09/13/93
Oppenheimer Variable Account Funds
Oppenheimer Aggressive Growth Fund/VA.... 75.95 27.56 18.63 08/15/86
Oppenheimer Bond Fund/VA................. -8.23 4.93 6.15 04/03/85
Oppenheimer Capital Appreciation
Fund/VA................................. 34.38 28.51 16.69 04/03/85
Oppenheimer High Income Fund/VA.......... -2.66 8.10 10.97 04/30/86
Oppenheimer Multiple Strategies Fund/VA.. 4.79 12.27 9.18 02/09/87
PBHG Insurance Series Fund, Inc.
PBHG Growth II Portfolio................. 90.41 NA NA 05/01/97
PBHG Large Cap Growth Portfolio.......... 57.73 NA NA 05/01/97
Salomon Brothers Variable Series Funds Inc
Salomon Investors Fund................... 0.00 0.00 0.00 NA
Salomon Strategic Bond Fund.............. 0.00 0.00 0.00 NA
Salomon Total Return Fund................ 0.00 0.00 0.00 NA
- --------------------------------------------------------------------------------
</TABLE>

Yield more closely reflects current earnings of the GE Investments Funds,
Inc.'s Money Market Fund than its total return.

* Date on which a particular portfolio was declared effective by the SEC; this
date may be different from the date the portfolio was first available in the
Separate Account. Past performance is not a guarantee of future results.
Returns for a period of less than one year are not annualized.

A-4
<PAGE>

Table 3

Adjusted Historical Performance Data without surrender at the end of the
applicable time period.

<TABLE>
<CAPTION>
For the For the For the
1-year 5-year 10-year
period period period Portfolio
ended ended ended Inception
12/31/99 12/31/99 12/31/99 Date*
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The Alger American Fund
Alger American Growth Portfolio.......... 31.88 29.11 21.17 01/09/89
Alger American Small Capitalization
Portfolio............................... 41.41 20.93 16.56 09/21/88
Federated Insurance Series
Federated American Leaders Fund II....... 5.18 20.26 NA 02/10/94
Federated High Income Bond Fund II....... 0.88 8.93 NA 03/01/94
Federated Utility Fund II................ 0.27 13.63 NA 02/10/94
Fidelity Variable Insurance Products Fund
VIP Equity-Income Portfolio.............. 4.84 16.95 12.89 10/09/86
VIP Growth Portfolio..................... 35.52 27.92 18.26 10/09/86
VIP Overseas Portfolio................... 40.64 15.73 9.87 01/28/87
Fidelity Variable Insurance Products Fund
II
VIP II Asset Manager Portfolio........... 9.54 14.01 11.57 09/06/89
VIP II Contrafund Portfolio.............. 22.52 NA NA 01/03/95
Fidelity Variable Insurance Products Fund
III
VIP III Growth & Income Portfolio........ 7.64 NA NA 12/31/96
VIP III Growth Opportunities Portfolio... 2.81 NA NA 01/03/95
GE Investments Funds, Inc.
Global Income Fund....................... -8.79 NA NA 05/01/97
Income Fund.............................. -2.80 NA NA 01/02/95
International Equity Fund................ 28.51 NA NA 05/01/95
Mid-Cap Value Equity Fund (formerly known
as Value Equity Fund)................... 15.63 NA NA 05/01/97
Money Market Fund........................ 3.52 3.91 3.41 06/30/85
Premier Growth Equity Fund............... 0.00 0.00 0.00 NA
Real Estate Securities Fund.............. -1.61 NA NA 05/01/95
S&P 500 Index Fund....................... 18.93 26.06 16.10 04/14/85
Total Return Fund........................ 11.67 15.61 11.45 07/01/85
U.S. Equity Fund......................... 17.94 NA NA 01/02/95
Goldman Sachs Variable Insurance Trust
Goldman Sachs Growth and Income Fund..... 3.94 NA NA 01/12/98
Goldman Sachs Mid Cap Value Fund......... -2.33 NA NA 04/30/98
Janus Aspen Series
Aggressive Growth Portfolio.............. 122.26 34.33 NA 09/13/93
Balanced Portfolio....................... 24.99 22.94 NA 09/13/93
Capital Appreciation Portfolio........... 64.67 NA NA 05/01/97
Flexible Income Portfolio................ 0.18 9.32 NA 09/13/93
Growth Portfolio......................... 41.97 28.07 NA 09/13/93
International Growth Portfolio........... 79.73 31.39 NA 05/02/94
Worldwide Growth Portfolio............... 62.16 31.73 NA 09/13/93
Oppenheimer Variable Account Funds
Oppenheimer Aggressive Growth Fund/VA.... 81.04 27.89 18.74 08/15/86
Oppenheimer Bond Fund/VA................. -2.89 5.60 6.26 04/03/85
Oppenheimer Capital Appreciation
Fund/VA................................. 39.68 28.83 16.81 04/03/85
Oppenheimer High Income Fund/VA.......... 2.83 8.70 11.08 04/30/86
Oppenheimer Multiple Strategies Fund/VA.. 10.24 12.80 9.28 02/09/87
PBHG Insurance Series Fund, Inc.
PBHG Growth II Portfolio................. 95.43 NA NA 05/01/97
PBHG Large Cap Growth Portfolio.......... 62.92 NA NA 05/01/97
Salomon Brothers Variable Series Funds Inc
Salomon Investors Fund................... 0.00 0.00 0.00 NA
Salomon Strategic Bond Fund.............. 0.00 0.00 0.00 NA
Salomon Total Return Fund................ 0.00 0.00 0.00 NA
- --------------------------------------------------------------------------------
</TABLE>

Yield more closely reflects current earnings of the GE Investments Funds,
Inc.'s Money Market Fund than its total return.

A-5
<PAGE>

STATEMENT OF ADDITIONAL INFORMATION

Table of Contents

<TABLE>
<S> <C>
The Policies................................................................ B-3
Transfer of Annuity Units................................................. B-3
Net Investment Factor..................................................... B-3
Termination of Participation Agreements..................................... B-3
Calculation of Performance Data............................................. B-4
Money Market Investment Subdivision....................................... B-4
Other Investment Subdivisions............................................. B-5
Other Performance Data.................................................... B-6
Federal Tax Matters......................................................... B-7
Taxation of GE Capital Life............................................... B-7
IRS Required Distributions................................................ B-7
General Provisions.......................................................... B-7
Using the Policies as Collateral.......................................... B-7
Beneficiaries............................................................. B-8
Non-Participating......................................................... B-8
Misstatement of Age or Gender............................................. B-8
Incontestability.......................................................... B-8
Statement of Values....................................................... B-8
Written Notice............................................................ B-8
Legal Developments Regarding Employment-Related Benefit Plans............... B-8
State Regulation of GE Capital Life......................................... B-9
Legal Matters............................................................... B-9
Experts..................................................................... B-9
Financial Statements........................................................ B-9
</TABLE>

A Statement of Additional Information containing more detailed information
about the Policy and the Separate Account is available free by writing us at
our Variable Annuity Service Center or by calling (800) 313-5282.

Dated May 1, 2000

Offered by:
GE Capital Life Assurance Company of New York
125 Park Avenue, 6th Floor
New York, New York 10017-5529

Variable Annuity Servicing Center
6610 West Broad Street
Richmond, VA 23230
<PAGE>

A Statement of Additional Information containing more detailed information
about the Policy and Separate Account II is available free by writing us at the
address below or by calling (800) 352-9910.

To GE Capital Life Assurance Company of New York
Variable Annuity Service Center
6610 W. Broad Street
Richmond, VA 23230

Please mail a copy of the Statement of Additional Information for Separate
Account II, Policy Form P1066 6/97 to:

Name ___________________________________________________________________________

Address

________________________________________________________________________________

________________________________________________________________________________
City State Zip

Signature of Requestor

________________________________________________________________________________
Date
<PAGE>

PART B

GE Capital Life Separate Account II

Statement of Additional Information
For the
Flexible Premium Deferred Variable Annuity Policy
Form P1066 6/97

Offered by
GE Capital Life Assurance Company of New York
125 Park Avenue, 6th Floor
New York, New York 10017-5529
(914) 253-8822

Variable Annuity Service Center
6610 West Broad Street
Richmond, VA 23230
(800) 313-5282

This Statement of Additional Information expands upon subjects discussed in the
current Prospectus for the above-named Flexible Premium Variable Deferred
Annuity Policy ("Policy") offered by GE Capital Life Assurance Company of New
York ("the Company", "we", "us", or "our"). You may obtain a copy of the
Prospectus dated May 1, 2000 by contacting us at our Variable Annuity Service
Center at the address or telephone number listed above or by accessing the
SEC's website at http:/www.sec.gov. Terms used in the current Prospectus for
the Policy are incorporated in this Statement.

This Statement of Additional Information is not a Prospectus and should be read
only in conjunction with the Prospectuses for the Policy and the Funds.

Dated May 1, 2000

B-1
<PAGE>

STATEMENT OF ADDITIONAL INFORMATION

Table of Contents

<TABLE>
<CAPTION>
Page
----
<S> <C>
The Policies............................................................... B-3
Transfer Of Annuity Units................................................ B-3
Net Investment Factor.................................................... B-3

Termination of Participation Agreements.................................... B-3

Calculation of Performance Data............................................ B-4
Money Market Investment Subdivisions..................................... B-4
Other Investment Subdivisions............................................ B-5
Other Performance Data................................................... B-6

Federal Tax Matters........................................................ B-7
Taxation of GE Capital Life.............................................. B-7
IRS Required Distributions............................................... B-7

General Provisions......................................................... B-7
Using the Policy as Collateral........................................... B-7
Beneficiaries............................................................ B-8
Non-Participating........................................................ B-8
Misstatement of Age or Sex............................................... B-8
Incontestability......................................................... B-8
Statement of Values...................................................... B-8
Written Notice........................................................... B-8

Legal Developments Regarding Employment-Related Benefit Plans.............. B-8

State Regulation of GE Capital Life........................................ B-9

Legal Matters.............................................................. B-9

Experts.................................................................... B-9

Financial Statements....................................................... B-9
</TABLE>

B-2
<PAGE>

The Policies

Transfer Of Annuity Units

At your request, Annuity Units may be transferred once per calendar year from
the Investment Subdivisions in which they are currently held. However, where
permitted by state law, we reserve the right to refuse to execute any transfer
if any of the Investment Subdivisions that would be affected by the transfer
are unable to purchase or redeem shares of the portfolios in which the
Investment Subdivisions invest. The number of Annuity Units to be transferred
is (a) times (b) divided by (c) where: (a) is the number of Annuity Units in
the current Investment Subdivision desired to be transferred; (b) is the
Annuity Unit Value for the Investment Subdivision in which the Annuity Units
are currently held; and (c) is the Annuity Unit Value for the Investment
Subdivision to which the transfer is made.

If the number of Annuity Units remaining in an Investment Subdivision after
the transfer is less than 1, we will transfer the amount remaining in addition
to the amount requested. We will not transfer into any Investment Subdivision
unless the number of Annuity Units of that Investment Subdivision after the
transfer is at least 1. The amount of the income payment as of the date of the
transfer will not be affected by the transfer (however, subsequent variable
income payments will reflect the investment experience of the selected
Investment Subdivisions).

Net Investment Factor

The net investment factor measures investment performance of the Investment
Subdivisions of the Separate Account during a Valuation Period. Each
Investment Subdivision has its own net investment factor for a Valuation
Period. The net investment factor of an Investment Subdivision available under
the Policy for a Valuation Period is (a) divided by (b) minus (c) where:

(a)is

(1) the value of the net assets of that Investment Subdivision at the end
of the preceding Valuation Period, plus

(2) the investment income and capital gains, realized or unrealized,
credited to the net assets of that Investment Subdivision during the
Valuation Period for which the net investment factor is being
determined, minus

(3) the capital losses, realized or unrealized, charged against those
assets during the Valuation Period, minus

(4) any amount charged against that Investment Subdivision for taxes, or
any amount we set aside during the Valuation Period as a provision
for taxes attributable to the operation or maintenance of that
Investment Subdivision; and

(b) is the value of the net assets of that Investment Subdivision at the end
of the preceding Valuation Period; and

(c) is a charge no greater than .003857% for each day in the Valuation
Period. This corresponds to 1.25% and .15% per year of the net assets of
that Investment Subdivision for mortality and expense risks, and for
administrative expenses, respectively.

The value of the assets in the Separate Account will be taken at their fair
market value in accordance with generally accepted accounting practices and
applicable laws and regulations.

Termination of Participation Agreements

The participation agreements pursuant to which the Funds sell their shares to
the Separate Account contain varying provisions regarding termination. The
following summarizes these provisions:

The Alger American Fund. This agreement may be terminated at the option of
any party upon six months' written notice to the other parties, unless a
shorter time is agreed to by the parties.

B-3
<PAGE>

Federated Insurance Series. This agreement may be terminated by any of the
parties on 180 days written notice to the other parties.

Fidelity Variable Insurance Products Fund, Fidelity Variable Insurance
Products Fund II, and Fidelity Variable Insurance Products Fund III ("the
Fund"). These agreements provide for termination (1) on one year's advance
notice by either party, (2) at the Company's option if shares of the Fund
are not reasonably available to meet requirements of the policies, (3) at
the option of either party if certain enforcement proceedings are
instituted against the other, (4) upon vote of the policyowners to
substitute shares of another mutual fund, (5) at the Company's option if
shares of the Fund are not registered, issued, or sold in accordance with
applicable laws or if the Fund ceases to qualify as a regulated investment
company under the Code, (6) at the option of the Fund or its principal
underwriter if it determines that the Company has suffered material adverse
changes in its business or financial condition or is the subject of
material adverse publicity, (7) at the option of the Company if the Fund
has suffered material adverse changes in its business or financial
condition or is the subject of material adverse publicity, or (8) at the
option of the Fund or its principal underwriter if the Company decides to
make another mutual fund available as a funding vehicle for its policies.

GE Investments Funds, Inc. This agreement may be terminated at the option
of any party upon six months' written notice to the other parties, unless a
shorter time is agreed to by the parties.

Goldman Sachs Variable Insurance Trust. This agreement may be terminated at
the option of any party upon six months' written notice to the other
parties, unless a shorter time is agreed to by the parties.

Janus Aspen Series. This agreement may be terminated by the parties on six
month advance written notice.

Oppenheimer Variable Account Funds. This agreement may be terminated by the
parties on six months' advance written notice.

PBHG Insurance Series Fund, Inc. This agreement may be terminated at the
option of any party upon six months' written notice to the other parties,
unless a shorter time is agreed to by the parties.

Salomon Brothers Variable Series Funds Inc. This agreement may be
terminated at the option of any party upon six months' advance written
notice to the other parties, unless a shorter time is agreed to by the
parties.

Calculation of Performance Data

From time to time, we may disclose total return, yield, and other performance
data for the Investment Subdivisions pertaining to the Policies. Such
performance data will be computed, or accompanied by performance data
computed, in accordance with the standards defined by the Securities and
Exchange Commission.

Money Market Investment Subdivision

From time to time, advertisements and sales literature may quote the yield of
the Money Market Investment Subdivision for a seven-day period, in a manner
which does not take into consideration any realized or unrealized gains or
losses on shares of the corresponding money market portfolio or on its
portfolio securities. This current annualized yield is computed by determining
the net change (exclusive of realized gains and losses on the sale of
securities and unrealized appreciation and depreciation and income other than
investment income) at the end of the seven-day period in the value of a
hypothetical account under a Policy having a balance of one unit in that Money
Market Investment Subdivision at the beginning of the period, dividing such
net change in Account Value by the value of the account at the beginning of
the period to determine the base period return, and annualizing the result on
a 365-day basis. The net change in Account Value reflects: 1) net income from
the investment portfolio attributable to the hypothetical account; and 2)
charges and deductions imposed under the Policy which are attributable to the
hypothetical account. The charges and deductions include the per unit charges
for the policy maintenance charge, administrative expense charge, and the
mortality and expense risk charge. For

B-4
<PAGE>

purposes of calculating current yields for a Policy, an average per unit
policy maintenance charge is used. Current Yield will be calculated according
to the following formula:

Current Yield = ((NCP-ES)/UV) X (365/7)

where:

NCP = the net change in the value of the investment portfolio (exclusive of
realized gains or losses on the sale of securities and unrealized appreciation
and depreciation and income other than investment income) for the seven-day
period attributable to a hypothetical account having a balance of one
Investment Subdivision unit.

ES = per unit expenses of the hypothetical account for the seven-day period.

UV = the unit value on the first day of the seven-day period.

The effective yield of a Money Market Investment Subdivision determined on a
compounded basis for the same seven-day period may also be quoted. The
effective yield is calculated by compounding the base period return according
to the following formula:

Effective Yield = (1 + ((NCP - ES)/UV))/365///7/ - 1

where:

ES = per unit expenses of the hypothetical account for the seven-day period.

UV = the unit value for the first day of the seven-day period.

The yield on amounts held in the Money Market Investment Subdivision normally
will fluctuate on a daily basis. Therefore, the disclosed yield for any given
past period is not an indication or representation of future yields or rates
of return. The Money Market Investment Subdivision's actual yield is affected
by changes in interest rates on money market securities, average portfolio
maturity of the Investment Subdivision's corresponding money market portfolio,
the types and quality of portfolio securities held by that portfolio, and that
portfolio's operating expenses. Because of the charges and deductions imposed
under the Policy, the yield for the Money Market Investment Subdivision will
be lower than the yield for its corresponding Money Market portfolio.

Yield calculations do not take into account the surrender charge under the
Policy, a maximum of 6% of each Premium Payment made during the six years
prior to a full or partial surrender, or charges for the Optional Death
Benefit Rider.

<TABLE>
<C> <S>
Current 4.15%
Effective 4.23%
</TABLE>

Other Investment Subdivisions

Total Return. Sales literature or advertisements may quote total return,
including average annual total return for one or more of the Investment
Subdivisions for various periods of time including 1 year, 5 years and 10
years, or from inception if any of those periods are not available.

Average annual total return for a period represents the average annual
compounded rate of return that would equate an initial investment of $1,000
under a Policy to the redemption value of that investment as of the last

B-5

<PAGE>

day of the period. The ending date for each period for which total return
quotations are provided will be for the most recent practicable, considering
the type and media of the communication, and will be stated in the
communication.

Average annual total return will be calculated using Investment Subdivision
unit values and deductions for the policy maintenance charge, and the
surrender charge as described below:

1. We calculate unit value for each Valuation Period based on the performance
of the Investment Subdivision's underlying investment portfolio (after
deductions for Fund expenses, the administrative expense charge, and the
mortality and expense risk charge).

2. The policy maintenance charge is $25 per year, deducted at the beginning of
each Policy Year after the first. For purposes of calculating average annual
total return, an average policy maintenance charge (currently 0.1% of account
value attributable to the hypothetical investment) is used. This charge will
be waived if the Account Value is more than $75,000 at the time the charge is
due.

3. The surrender charge will be determined by assuming a surrender of the
Policy at the end of the period. Average annual total return for periods of
six years or less will therefore reflect the deduction of a surrender charge.

4. Total return does not consider the elective ODB charges.

5. Total return will then be calculated according to the following formula:

TR = (ERV/P)1/N - 1

where:

TR = the average annual total return for the period.

ERV = the ending redeemable value (reflecting deductions as described above)
of the hypothetical investment at the end of the period.

P = a hypothetical single investment of $1,000.

N = the duration of the period (in years).

Other Performance Data

We may disclose cumulative total return in conjunction with the standard
format described above. The cumulative total return will be calculated using
the following formula:

CTR = (ERV/P) - 1

where:

CTR = the cumulative total return for the period.

ERV = the ending redeemable value (reflecting deductions as described above)
of the hypothetical investment at the end of the period.

P = a hypothetical single investment of $1,000.

Sales literature may also quote cumulative and/or average annual total return
that does not reflect the surrender charge. This is calculated in exactly the
same way as average annual total return, except that the ending

B-6
<PAGE>

redeemable value of the hypothetical investment is replaced with an ending
value for the period that does not take into account any charges on withdrawn
amounts.

Other non-standard quotations of Investment Subdivision performance may also
be used in sales literature. Such quotations will be accompanied by a
description of how they were calculated.

Federal Tax Matters

Taxation of GE Capital Life

We do not expect to incur any federal income tax liability attributable to
investment income or capital gains retained as part of the reserves under the
Policies. (See Federal Tax Matters section of the Prospectus.) Based upon
these expectations, no charge is being made currently to the Separate Account
for federal income taxes which may be attributable to the Account. We will
periodically review the question of a charge to the Separate Account for
federal income taxes related to the Account. Such a charge may be made in
future years if we believe that we may incur federal income taxes. This might
become necessary if the tax treatment of the Company is ultimately determined
to be other than what we currently believe it to be, if there are changes made
in the federal income tax treatment of annuities at the corporate level, or if
there is a change in our tax status. In the event that we should incur federal
income taxes attributable to investment income or capital gains retained as
part of the reserves under the Policies, the Account Value would be
correspondingly adjusted by any provision or charge for such taxes.

We may also incur state and local taxes (including premium taxes). At present,
these taxes, are not significant. If there is a material change in applicable
state or local tax laws causing an increase in taxes (including premium
taxes), charges for such taxes attributable to Separate Account may be made.

IRS Required Distributions

In order to be treated as an annuity contract for federal income tax purposes,
section 72(s) of the Code requires any Non-Qualified Policy to provide that
(a) if any Owner dies on or after the Maturity Date but prior to the time the
entire interest in the Policy has been distributed, the remaining portion of
such interest will be distributed at least as rapidly as under the method of
distribution being used as of the date of that Owner's death; and (b) if any
Owner dies prior to the Maturity Date, the entire interest in the Policy will
be distributed (1) within five years after the date of that Owner's death, or
(2) as Income Payments which will begin within one year of that Owner's death
and which will be made over the life of the Owner's "designated beneficiary"
or over a period not extending beyond the life expectancy of that beneficiary.
The "designated beneficiary" generally is the person who will be treated as
the sole owner of the Policy following the death of the Owner, Joint Owner or,
in certain circumstances, the Annuitant. However, if the "designated
beneficiary" is the surviving spouse of the decedent, these distribution rules
may not apply until the surviving spouse's death (and this spousal exception
will not again be available). If any Owner is not an individual, the death of
the Annuitant will be treated as the death of an Owner for purposes of these
rules.

The Non-Qualified Policies contain provisions which are intended to comply
with the requirements of section 72(s) of the Code, although no regulations
interpreting these requirements have yet been issued. We intend to review such
provisions and modify them if necessary to assure that they comply with the
requirements of Code section 72(s) when clarified by regulation or otherwise.

Other rules may apply to Qualified Policies.

General Provisions

Using the Policy as Collateral

A Non-Qualified Policy can be assigned as collateral security. We must be
notified in writing if a Policy is assigned. Any payment made before the
assignment is recorded at the Variable Annuity Service Center will not

B-7
<PAGE>

be affected. We are not responsible for the validity of an assignment. Your
rights and the rights of a Beneficiary may be affected by an assignment.

A Qualified Policy may not be sold, assigned, transferred, discounted, pledged
or otherwise transferred except under such conditions as may be allowed under
applicable law.

The basic benefits of the Policy are assignable. Additional benefits added by
rider may or may not be available/eligible for assignments.

Beneficiaries

You may select one or more primary and contingent Beneficiaries during your
lifetime upon application and by filing a written request with our Variable
Annuity Service Center. Each change of Beneficiary revokes any previous
designation.

Non-Participating

The Policy is non-participating. No dividends are payable.

Misstatement of Age or Sex

If an Annuitant's age or sex was misstated on the policy data page, any policy
benefits or proceeds, or availability thereof, will be determined using the
correct age and sex. If an overpayment has been made, an adjustment including
interest on the amount of the overpayment will be made to the next payment(s).
Any underpayments will be credited with interest on the amount of the
underpayment and will be paid in full with the next payment. The interest rate
used will be 3% per annum, unless otherwise required by law.

Incontestability

We will not contest the Policy.

Statement of Values

At least once each year, we will send you a statement of values within 30 days
after each report date. The statement will show Account Value, Premium
Payments and charges made during the report period.

Written Notice

Any written notice should be sent to us at our Home Office at 125 Park Avenue,
6th Floor, New York, NY 10017-5529 or to our Variable Annuity Service Center
at 6610 West Broad Street, Richmond, Virginia 23230. The policy number and the
Annuitant's full name must be included.

We will send all notices to the Owner at the last known address on file with
the company.

Legal Developments Regarding Employment-Related Benefit Plans

On July 6, 1983, the Supreme Court held in Arizona Governing Committee for Tax
Deferred Annuity v. Norris, 463 U.S. 1073 (1983), that optional annuity
benefits provided under an employee's deferred compensation plan could not,
under Title VII of the Civil Rights Act of 1964, vary between men and women on
the basis of sex. The Policy contains guaranteed annuity purchase rates for
certain optional payment plans that distinguish between men and women.
Accordingly, employers and employee organizations should consider, in
consultation with legal counsel, the impact of Norris, and Title VII
generally, on any employment-related insurance or benefit program for which a
Policy may be purchased.

B-8
<PAGE>

State Regulation of GE Capital Life

We are a stock life insurance company organized under the laws of New York,
and are subject to regulation by the New York Insurance Department. An annual
statement is filed with the New York Superintendent of Insurance each year
covering the operations and reporting on the financial condition of GE Capital
Life as of December 31 of the preceding year. Periodically, the Superintendent
of Insurance examines the liabilities and reserves of the Company and the
Separate Account and certifies their adequacy, and a full examination of the
Company's operations is conducted by the New York Insurance Department at
least once every five years.

Legal Matters

Sutherland Asbill & Brennan LLP of Washington D.C. has provided advice on
certain legal matters relating to federal securities laws. All matters of New
York law pertaining to the Policy, including the validity of the Policy and GE
Capital Life's right to issue the Policies under New York insurance law, have
been passed upon by Patricia L. Dysart, Assistant Vice President.

Experts

The financial statements of GE Capital Life Assurance Company of New York as
of December 31, 1999 and 1998, and for each of the years in the three-year
period ended December 31, 1999, and the financial statements of GE Capital
Life Separate Account II as of December 31, 1999 and for the period then
ended, have been included herein in reliance upon the reports of KPMG LLP,
independent certified public accountants, appearing elsewhere herein, and upon
the authority of said firm as experts in accounting and auditing.

Financial Statements

This Statement of Additional Information contains financial statements for the
Company, as of December 31, 1999 and 1998, and for each of the years in the
three year period then ended December 31, 1999 and the financial statements of
GE Capital Life Separate Account II as of December 31, 1999 and for the period
then ended.

The financial statements of GE Capital Life Assurance Company of New York
included herein should be distinguished from the financial statements of the
Separate Account and should be considered only as bearing on the ability of
the Company to meet its obligation under the Policy.

Such financial statements of the Company should not be considered as bearing
on the investment performance of the assets held in the Separate Account.

B-9
<PAGE>

GE CAPITAL LIFE SEPARATE ACCOUNT II

FINANCIAL STATEMENTS

December 31, 1999
(With Independent Auditors' Report Thereon)

<PAGE>

Independent Auditors' Report

Contractholders
GE Capital Life Separate Account II
and
The Board of Directors
GE Capital Life Assurance Company of New York:

We have audited the accompanying statements of assets and liabilities of GE
Capital Life Separate Account II (the Account) (comprising the GE Investments
Funds, Inc.--S&P 500 Index, Money Market, Total Return, International Equity,
Real Estate Securities, Global Income, Value Equity, Income, and U.S. Equity
Funds; the Variable Insurance Products Fund--Equity-Income, Growth and
Overseas Portfolios; the Variable Insurance Products Fund II--Asset Manager
and Contrafund Portfolios; the Variable Insurance Products III--Growth &
Income and Growth Opportunities Portfolios; the Oppenheimer Variable Account
Funds--High Income/VA, Bond/VA, Aggressive Growth/VA, Capital Appreciation/VA,
and Multiple Strategies/VA Funds; the Federated Insurance Series--American
Leaders, High Income Bond and Utility Funds II; the Janus Aspen Series--
Balanced, Aggressive Growth, Growth, Worldwide Growth, Flexible Income,
International Growth and Capital Appreciation Portfolios; the Alger American
Fund--Small Capitalization and Growth Portfolios; the PBHG Insurance Series
Fund, Inc.--PBHG Large Cap Growth and PBHG Growth II Portfolios; and the
Goldman Sachs Variable Insurance Trust--Growth and Income and Mid Cap Value
Funds) as of December 31, 1999 and the related statements of operations and
changes in net assets for the aforementioned funds for the period then ended.
These financial statements are the responsibility of the Account's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of December 31, 1999,
by correspondence with the underlying mutual funds or their transfer agent. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of each of the respective
portfolios constituting GE Capital Life Separate Account II as of December 31,
1999 and the results of their operations and changes in their net assets for
the period then ended in conformity with generally accepted accounting
principles.

/s/ KPMG LLP

Richmond, Virginia
February 11, 2000

F-1
<PAGE>

GE CAPITAL LIFE SEPARATE ACCOUNT II

Statements of Assets and Liabilities

December 31, 1999

<TABLE>
<CAPTION>
GE Investments Funds, Inc.
------------------------------------------------------------------------------------
Money Total International Real Estate Global Value U.S.
S&P 500 Market Return Equity Securities Income Equity Income Equity
Index Fund Fund Fund Fund Fund Fund Fund Fund Fund
Assets ---------- --------- ------ ------------- ----------- ------ ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investments in GE
Investments Funds,
Inc., at fair value
(note 2):
S&P 500 Index Fund
(78,181 shares,
cost -- $2,066,174)... $2,196,898 -- -- -- -- -- -- -- --
Money Market Fund
(1,703,159 shares,
cost -- $1,703,159)... -- 1,703,159 -- -- -- -- -- -- --
Total Return Fund
(5,580 shares,
cost -- $88,102)...... -- -- 88,501 -- -- -- -- -- --
International Equity
Fund
(1,865 shares, cost --
$25,210)............. -- -- -- 26,992 -- -- -- -- --
Real Estate Securities
Fund
(170 shares, cost --
$2,095).............. -- -- -- -- 1,852 -- -- -- --
Global Income Fund
(6,598 shares, cost --
$64,328)............. -- -- -- -- -- 63,274 -- -- --
Value Equity Fund
(7,554 shares,
cost-- $118,646)...... -- -- -- -- -- -- 119,283 -- --
Income Fund (14,004
share,
cost -- $167,623).... -- -- -- -- -- -- -- 161,190 --
U.S. Equity Fund (8,682
shares
cost -- $323,828).... -- -- -- -- -- -- -- -- 329,053
Receivable from
affiliate (note 3)..... -- 1,688 -- -- -- -- -- -- --
---------- --------- ------ ------ ----- ------ ------- ------- -------
Total assets........... 2,196,898 1,704,847 88,501 26,992 1,852 63,274 119,283 161,190 329,053
---------- --------- ------ ------ ----- ------ ------- ------- -------
Liabilities
Accrued expenses payable
to affiliates (note
3)..................... 1,111 710 47 14 1 74 65 86 172
Payable for units
withdrawn.............. -- -- -- -- -- -- -- -- --
---------- --------- ------ ------ ----- ------ ------- ------- -------
Total liabilities...... 1,111 710 47 14 1 74 65 86 172
---------- --------- ------ ------ ----- ------ ------- ------- -------
Net assets attributable
to variable deferred
annuity
contractholders........ $2,195,787 1,704,137 88,454 26,978 1,851 63,200 119,218 161,104 328,881
========== ========= ====== ====== ===== ====== ======= ======= =======
Outstanding units....... 172,354 161,990 7,632 2,208 209 6,423 10,625 16,078 26,227
========== ========= ====== ====== ===== ====== ======= ======= =======
Net asset value per
unit................... $ 12.74 10.52 11.59 12.22 8.84 9.84 11.22 10.02 12.54
========== ========= ====== ====== ===== ====== ======= ======= =======
</TABLE>

F-2
<PAGE>

GE CAPITAL LIFE SEPARATE ACCOUNT II

Statements of Assets and Liabilities, Continued

December 31, 1999

<TABLE>
<CAPTION>
Variable Insurance Variable Insurance Variable Insurance
Products Fund Products Fund II Products Fund III
----------------------------- -------------------- -----------------------
Equity- Asset Growth & Growth
Income Growth Overseas Manager Contrafund Income Opportunities
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
Assets --------- --------- --------- --------- ---------- --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Investments in Variable
Insurance Products
Fund,
at fair value (note 2):
Equity-Income Portfolio
(19,836 shares,
cost -- $511,803)..... $509,982 -- -- -- -- -- --
Growth Portfolio
(12,867 shares,
cost -- $607,122)..... -- 706,762 -- -- -- -- --
Overseas Portfolio
(4,946 shares, cost --
$106,143)............ -- -- 135,707 -- -- -- --
Investments in Variable
Insurance Products Fund
II,
at fair value (note 2):
Asset Manager Portfolio
(6,460 shares,
cost -- $114,149)..... -- -- -- 120,613 -- -- --
Contrafund Portfolio
(44,369 shares,
cost -- $1,179,317)... -- -- -- -- 1,293,371 -- --
Investments in Variable
Insurance Products Fund
III,
at fair value (note 2):
Growth & Income
Portfolio (8,804
shares,
cost -- $146,121)..... -- -- -- -- -- 152,302 --
Growth Opportunities
Portfolio (20,404
shares,
cost -- $456,535)..... -- -- -- -- -- -- 472,342
Receivable from
affiliate (note 3)..... -- 4 2 -- 1 -- --
-------- ------- ------- ------- --------- ------- -------
Total assets........... 509,982 706,766 135,709 120,613 1,293,372 152,302 472,342
-------- ------- ------- ------- --------- ------- -------
Liabilities
Accrued expenses payable
to affiliates (note
3)..................... 258 369 73 58 653 81 268
Payable for units
withdrawn.............. -- -- -- -- -- -- --
-------- ------- ------- ------- --------- ------- -------
Total liabilities...... 258 369 73 58 653 81 268
-------- ------- ------- ------- --------- ------- -------
Net assets attributable
to variable deferred
annuity
contractholders........ $509,724 706,397 135,636 120,555 1,292,719 152,221 472,074
======== ======= ======= ======= ========= ======= =======
Outstanding units....... 48,133 46,688 10,084 10,584 97,637 13,010 41,888
======== ======= ======= ======= ========= ======= =======
Net asset value per
unit................... $ 10.59 15.13 13.45 11.39 13.24 11.70 11.27
======== ======= ======= ======= ========= ======= =======
</TABLE>

F-3
<PAGE>

GE CAPITAL LIFE SEPARATE ACCOUNT II

Statements of Assets and Liabilities, Continued

December 31, 1999

<TABLE>
<CAPTION>
Oppenheimer Variable Account Funds Federated Insurance Series
--------------------------------------------------- ----------------------------
High Aggressive Capital Multiple American High
Income Bond Growth Appreciation Strategies Leaders Income Bond Utility
Fund/VA Fund/VA Fund/VA Fund/VA Fund/VA Fund II Fund II Fund II
Assets -------- ------- ---------- ------------ ---------- -------- ----------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investments in
Oppenheimer Variable
Account Funds, at fair
value (note 2):
High Income Fund/VA
(16,514 shares,
cost -- $175,813)..... $177,029 -- -- -- -- -- -- --
Bond Fund/VA (37,194
shares,
cost-- $427,468)...... -- 428,477 -- -- -- -- -- --
Aggressive Growth
Fund/VA (1,811 shares,
cost -- $109,793)..... -- -- 149,068 -- -- -- -- --
Capital Appreciation
Fund/VA (2,012 shares,
cost -- $82,025)...... -- -- -- 100,296 -- -- -- --
Multiple Strategies
Fund/VA (2,921 shares,
cost -- $48,869)...... -- -- -- -- 51,001 -- -- --
Investments in Federated
Insurance Series, at
fair value (note 2):
American Leaders Fund
II (10,866 shares,
cost -- $222,665)..... -- -- -- -- -- 226,237 -- --
High Income Bond Fund
II (19,068 shares,
cost -- $194,005)..... -- -- -- -- -- -- 195,256 --
Utility Fund II (16,815
shares,
cost -- $240,944)..... -- -- -- -- -- -- -- 241,300
Receivable from
affiliate (note 3)..... -- -- 1 -- -- -- -- --
-------- ------- ------- ------- ------ ------- ------- -------
Total assets........... 177,029 428,477 149,069 100,296 51,001 226,237 195,256 241,300
-------- ------- ------- ------- ------ ------- ------- -------
Liabilities
Accrued expenses payable
to affiliates (note
3)..................... 95 207 78 51 28 120 105 131
Payable for units
withdrawn.............. -- -- -- -- -- -- -- --
-------- ------- ------- ------- ------ ------- ------- -------
Total liabilities...... 95 207 78 51 28 120 105 131
-------- ------- ------- ------- ------ ------- ------- -------
Net assets attributable
to variable deferred
annuity
contractholders........ $176,934 428,270 148,991 100,245 50,973 226,117 195,151 241,169
======== ======= ======= ======= ====== ======= ======= =======
Outstanding units....... 18,241 43,260 8,356 6,857 4,655 20,556 19,995 22,004
======== ======= ======= ======= ====== ======= ======= =======
Net asset value per
unit................... $ 9.70 9.90 17.83 14.62 10.95 11.00 9.76 10.96
======== ======= ======= ======= ====== ======= ======= =======
</TABLE>

F-4
<PAGE>

GE CAPITAL LIFE SEPARATE ACCOUNT II

Statements of Assets and Liabilities, Continued

December 31, 1999

<TABLE>
<CAPTION>
Janus Aspen Series Alger American Fund
------------------------------------------------------------------------------ ------------------------
Aggressive Worldwide Flexible International Capital Small
Balanced Growth Growth Growth Income Growth Appreciation Capitalization Growth
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
Assets ---------- ---------- --------- --------- --------- ------------- ------------ -------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investments in
Janus Aspen
Series, at fair
value (note 2):
Balanced
Portfolio
(93,440 shares,
cost --
$2,401,229)... $2,608,851 -- -- -- -- -- -- -- --
Aggressive
Growth
Portfolio
(52,148 shares,
cost --
$2,230,874).... -- 3,112,739 -- -- -- -- -- -- --
Growth Portfolio
(38,459 shares,
cost --
$1,135,111)... -- -- 1,294,136 -- -- -- -- -- --
Worldwide Growth
Portfolio
(34,071 shares,
cost --
$1,316,287).... -- -- -- 1,626,898 -- -- -- -- --
Flexible Income
Portfolio
(6,152 shares,
cost --
$72,403)...... -- -- -- -- 70,259 -- -- -- --
International
Growth
Portfolio
(8,373 shares,
cost --
$241,185)...... -- -- -- -- -- 323,777 -- -- --
Capital
Appreciation
Portfolio
(102,297
shares,
cost --
$2,706,916).... -- -- -- -- -- -- 3,393,176 -- --
Investments in
Alger American
Fund, at fair
value (note 2):
Small
Capitalization
Portfolio
(6,969 shares,
cost --
$308,329)...... -- -- -- -- -- -- -- 384,322 --
Growth Portfolio
(10,758 shares,
cost --
$589,639)..... -- -- -- -- -- -- -- -- 692,601
Receivable from
affiliate
(note 3)........ -- 58 6 20 -- 7 35 5 2
---------- --------- --------- --------- ------ ------- --------- ------- -------
Total assets.... 2,608,851 3,112,797 1,294,142 1,626,918 70,259 323,784 3,393,211 384,327 692,603
---------- --------- --------- --------- ------ ------- --------- ------- -------
Liabilities
Accrued expenses
payable to
affiliates (note
3).............. 1,342 1,713 663 810 39 163 1,763 204 372
Payable for units
withdrawn....... 2,583 2,804 -- 2,692 -- -- 2,721 -- --
---------- --------- --------- --------- ------ ------- --------- ------- -------
Total
liabilities.... 3,925 4,517 663 3,502 39 163 4,484 204 372
---------- --------- --------- --------- ------ ------- --------- ------- -------
Net assets
attributable to
variable
deferred annuity
contractholders ... $2,604,926 3,108,280 1,293,479 1,623,416 70,220 323,621 3,388,727 384,123 692,231
========== ========= ========= ========= ====== ======= ========= ======= =======
Outstanding
units........... 186,199 121,228 81,608 100,959 6,851 19,367 179,393 26,274 47,413
========== ========= ========= ========= ====== ======= ========= ======= =======
Net asset value
per unit........ $ 13.99 25.64 15.85 16.08 10.25 16.71 18.89 14.62 14.60
========== ========= ========= ========= ====== ======= ========= ======= =======
</TABLE>

F-5
<PAGE>

GE CAPITAL LIFE SEPARATE ACCOUNT II

Statements of Assets and Liabilities, Continued

December 31, 1999

<TABLE>
<CAPTION>
Goldman Sachs
PBHG Insurance Variable Insurance
Series Fund, Inc. Trust
------------------- ------------------
PBHG
Large Cap PBHG Growth and Mid Cap
Growth Growth II Income Value
Portfolio Portfolio Fund Fund
Assets --------- --------- ---------- -------
<S> <C> <C> <C> <C>
Investments in PBHG Insurance Series
Fund, Inc., at fair value (note 2):
PBHG Large Cap Growth Portfolio (2,432
shares, cost -- $46,826)............. $62,050 -- -- --
PBHG Growth II Portfolio (6,089
shares, cost -- $94,474)............. -- 140,340 -- --
Investments in Goldman Sachs Variable
Insurance Trust, at fair value (note
2):
Growth and Income Fund (5,524 shares,
cost -- $57,831)..................... -- -- 60,155 --
Mid Cap Value Fund (31,488 shares,
cost -- $278,198).................... -- -- -- 265,132
Receivable from affiliate (note 3)..... 1 3 -- --
------- ------- ------ -------
Total assets.......................... 62,051 140,343 60,155 265,132
------- ------- ------ -------
Liabilities
Accrued expenses payable to affiliates
(note 3).............................. 32 76 34 147
Payable for units withdrawn............ -- -- -- --
------- ------- ------ -------
Total liabilities..................... 32 76 34 147
------- ------- ------ -------
Net assets attributable to variable
deferred annuity contractholders...... $62,019 140,267 60,121 264,985
======= ======= ====== =======
Outstanding units...................... 3,577 7,052 6,067 28,190
======= ======= ====== =======
Net asset value per unit............... $ 17.34 19.89 9.91 9.40
======= ======= ====== =======
</TABLE>

See accompanying notes to financial statements.

F-6
<PAGE>

GE CAPITAL LIFE SEPARATE ACCOUNT II

Statements Of Operations

<TABLE>
<CAPTION>
GE Investments Funds, Inc.
-----------------------------------------------------------------------------------
Money Total International
S&P 500 Index Market Return Equity Real Estate
Fund Fund Fund Fund Securities Fund
-------------- ----------------- --------------- ------------------ ---------------
Period from Period from Period from
May 6, 1999 to Period from May 26, 1999 to Period from July 9, 1999 to
December 31, April 29, 1999 to December 31, August 26, 1999 to December 31,
1999 December 31, 1999 1999 December 31, 1999 1999
-------------- ----------------- --------------- ------------------ ---------------
<S> <C> <C> <C> <C> <C>
Investment income:
Income -- Ordinary
Dividends............. $ 14,793 10,043 1,782 68 102
Expenses -- Mortality
and expense risk
charges and
admistrative expenses
(note 3).............. 7,863 3,051 279 71 13
---------- ------------ ------------ ------------ ------------
Net investment income
(expense).............. 6,930 6,992 1,503 (3) 89
---------- ------------ ------------ ------------ ------------
Net realized and
unrealized gain (loss)
on investments:
Net realized gain
(loss)................ 11,914 -- 61 292 (1)
Unrealized appreciation
(depreciation)........ 130,724 -- 399 1,782 (243)
Capital gain
distribution.......... 20,428 -- 2,092 1,639 5
---------- ------------ ------------ ------------ ------------
Net realized and
unrealized gain (loss)
on investments......... 163,066 -- 2,552 3,713 (239)
---------- ------------ ------------ ------------ ------------
Increase (decrease) in
net assets from
operations............. $ 169,996 6,992 4,055 3,710 (150)
========== ============ ============ ============ ============
</TABLE>

<TABLE>
<CAPTION>
GE Investments Funds, Inc.
---------------------------------------------------------------
Global Value U.S.
Income Equity Income Equity
Fund Fund Fund Fund
--------------- --------------- --------------- ---------------
Period from Period from Period from Period from
May 14, 1999 to May 14, 1999 to May 14, 1999 to June 2, 1999 to
December 31, December 31, December 31, December 31,
1999 1999 1999 1999
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Investment income:
Income -- Ordinary
Dividends............. 905 890 8,293 1,680
Expenses -- Mortality
and expense risk
charges and
administrative
expenses (note 3)..... 349 492 874 1,613
--------- ---------- ---------- ----------
Net investment income
(expense).............. 556 398 7,419 67
--------- ---------- ---------- ----------
Net realized and
unrealized gain (loss)
on investments:
Net realized gain
(loss)................ (573) 299 (1,204) (2,044)
Unrealized appreciation
(depreciation)........ (1,054) 637 (6,432) 5,225
Capital gain
distribution.......... 68 -- 257 15,120
--------- ---------- ---------- ----------
Net realized and
unrealized gain (loss)
on investments......... (1,559) 936 (7,379) 18,301
--------- ---------- ---------- ----------
Increase (decrease) in
net assets from
operations............. (1,003) 1,334 40 18,368
========= ========== ========== ==========
</TABLE>

F-7
<PAGE>

GE CAPITAL LIFE SEPARATE ACCOUNT II

Statements Of Operations, Continued

<TABLE>
<CAPTION>
Variable Insurance
Variable Insurance Products Fund Products Fund II
---------------------------------------------- ------------------------------
Equity-
Income Growth Overseas Asset Manager Contrafund
Portfolio Portfolio Portfolio Portfolio Portfolio
--------------- -------------- --------------- --------------- --------------
Period from Period from Period from Period from Period from
May 13, 1999 to May 6, 1999 to May 14, 1999 to June 7, 1999 to May 6, 1999 to
December 31, December 31, December 31, December 31, December 31,
1999 1999 1999 1999 1999
--------------- -------------- --------------- --------------- --------------
<S> <C> <C> <C> <C> <C>
Investment income:
Income -- Ordinary
Dividends............. $ 372 -- -- -- --
Expenses -- Mortality
and expense risk
charges and
administrative
expenses (note 3)..... 2,097 2,299 737 545 4,439
------------ ------------ ------------ ----------- ------------
Net investment income
(expense).............. (1,725) (2,299) (737) (545) (4,439)
------------ ------------ ------------ ----------- ------------
Net realized and
unrealized gain (loss)
on investments:
Net realized gain
(loss)................ (2,045) 1,438 872 358 22,338
Unrealized appreciation
(depreciation)........ (1,822) 99,641 29,565 6,464 114,054
Capital gain
distribution.......... 828 -- -- -- --
------------ ------------ ------------ ----------- ------------
Net realized and
unrealized gain (loss)
on investments......... (3,039) 101,079 30,437 6,822 136,392
------------ ------------ ------------ ----------- ------------
Increase (decrease) in
net assets from
operations............. $ (4,764) 98,780 29,700 6,277 131,953
============ ============ ============ =========== ============
</TABLE>

<TABLE>
<CAPTION>
Variable Insurance
Products Fund III
---------------------------------
Growth
Growth & Income Opportunities
Portfolio Portfolio
----------------- ---------------
Period from
Period from May 11, 1999 to
April 12, 1999 to December 31,
December 31, 1999 1999
----------------- ---------------
<S> <C> <C>
Investment income:
Income -- Ordinary Dividends................ -- --
Expenses -- Mortality and expense risk
charges and administrative expenses
(note 3)................................... 795 2,161
----------- ------------
Net investment income (expense).............. (795) (2,161)
----------- ------------
Net realized and unrealized gain (loss) on
investments:
Net realized gain (loss).................... 649 (1,607)
Unrealized appreciation (depreciation)...... 6,182 15,807
Capital gain distribution................... -- --
----------- ------------
Net realized and unrealized gain (loss) on
investments................................. 6,831 14,200
----------- ------------
Increase (decrease) in net assets from
operations.................................. 6,036 12,039
=========== ============
</TABLE>

F-8
<PAGE>

GE CAPITAL LIFE SEPARATE ACCOUNT II

Statements of Operations, Continued

<TABLE>
<CAPTION>
Oppenheimer Variable Account Funds
-------------------------------------------------------------------------------
Capital Multiple
High Income Bond Aggressive Appreciation Strategies
Fund/VA Fund/VA Growth Fund/VA Fund/VA Fund/VA
--------------- -------------- -------------- ----------------- ---------------
Period from Period from Period from Period from
May 21, 1999 to May 6, 1999 to May 5, 1999 to Period from May 14, 1999 to
December 31, December 31, December 31, April 23, 1999 to December 31,
1999 1999 1999 December 31, 1999 1999
--------------- -------------- -------------- ----------------- ---------------
<S> <C> <C> <C> <C> <C>
Investment income:
Income -- Ordinary
Dividends............. $ -- -- -- -- --
Expenses -- Mortality
and expense risk
charges and
administrative
expenses (note 3)..... 698 1,470 513 477 220
------------ ------------ ------------ ------------ ------------
Net investment income
(expense).............. (698) (1,470) (513) (477) (220)
------------ ------------ ------------ ------------ ------------
Net realized and
unrealized gain (loss)
on investments:
Net realized gain
(loss)................ 1,328 183 7,258 265 281
Unrealized appreciation
(depreciation)........ 1,216 1,010 39,274 18,271 2,132
Capital gain
distribution.......... -- -- -- -- --
------------ ------------ ------------ ------------ ------------
Net realized and
unrealized gain (loss)
on investments......... 2,544 1,193 46,532 18,536 2,413
------------ ------------ ------------ ------------ ------------
Increase (decrease) in
net assets from
operations............. $ 1,846 (277) 46,019 18,059 2,193
============ ============ ============ ============ ============
</TABLE>

<TABLE>
<CAPTION>
Federated Insurance Series
-------------------------------------------------
High
American Leaders Income Bond Utility
Fund II Fund II Fund II
----------------- --------------- ---------------
Period from Period from
Period from May 11, 1999 to July 8, 1999 to
April 23, 1999 to December 31, December 31,
December 31, 1999 1999 1999
----------------- --------------- ---------------
<S> <C> <C> <C>
Investment income:
Income -- Ordinary
Dividends.................. -- -- --
Expenses -- Mortality and
expense risk charges and
administrative expenses
(note 3)................... 1,030 792 1,059
------------ -------- --------
Net investment income
(expense)................... (1,030) (792) (1,059)
------------ -------- --------
Net realized and unrealized
gain (loss) on investments:
Net realized gain (loss).... (2,562) (137) (314)
Unrealized appreciation
(depreciation)............. 3,572 1,251 356
Capital gain distribution... -- -- --
------------ -------- --------
Net realized and unrealized
gain (loss) on investments.. 1,010 1,114 42
------------ -------- --------
Increase (decrease) in net
assets from operations...... (20) 322 (1,017)
============ ======== ========
</TABLE>

F-9
<PAGE>

GE CAPITAL LIFE SEPARATE ACCOUNT II

Statements Of Operations, Continued

<TABLE>
<CAPTION>
Janus Aspen Series
---------------------------------------------------------------------------------------------
Worldwide Flexible
Balanced Aggressive Growth Growth Growth Income
Portfolio Portfolio Portfolio Portfolio Portfolio
----------------- ----------------- --------------- ----------------- ---------------
Period from Period from
Period from Period from May 11, 1999 to Period from May 21, 1999 to
April 12, 1999 to April 23, 1999 to December 31, April 23, 1999 to December 31,
December 31, 1999 December 31, 1999 1999 December 31, 1999 1999
----------------- ----------------- --------------- ----------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Income -- Ordinary
Dividends............. $ 28,510 601 1,154 120 3,201
Expenses -- Mortality
and expense risk
charges and
administrative
expenses (note 3)..... 8,582 8,601 3,526 3,896 428
------------ --------- -------- --------- ---------
Net investment income
(expense).............. 19,928 (8,000) (2,372) (3,776) 2,773
------------ --------- -------- --------- ---------
Net realized and
unrealized gain (loss)
on investments:
Net realized gain
(loss)................ 33,494 130,943 21,250 26,067 70
Unrealized appreciation
(depreciation)........ 207,622 881,865 159,025 310,611 (2,145)
Capital gain
distribution........... -- 1,024 193 -- 98
------------ --------- -------- --------- ---------
Net realized and
unrealized gain (loss)
on investments......... 241,116 1,013,832 180,468 336,678 (1,977)
------------ --------- -------- --------- ---------
Increase (decrease) in
net assets from
operations............. $ 261,044 1,005,832 178,096 332,902 796
============ ========= ======== ========= =========
</TABLE>

<TABLE>
<CAPTION>
Janus Aspen Series (continued) Alger American Fund
--------------------------------- --------------------------------
International Capital Small
Growth Appreciation Capitalization Growth
Portfolio Portfolio Portfolio Portfolio
--------------- ----------------- -------------- -----------------
Period from Period from
May 26, 1999 to Period from May 6, 1999 to Period from
December 31, April 29, 1999 to December 31, April 29, 1999 to
1999 December 31, 1999 1999 December 31, 1999
--------------- ----------------- -------------- -----------------
<S> <C> <C> <C> <C>
Investment income:
Income -- Ordinary
Dividends............. 72 517 -- 23
Expenses -- Mortality
and expense risk
charges and
administrative
expenses (note 3)..... 903 9,883 1,488 3,169
----------- ----------- ----------- ------------
Net investment income
(expense).............. (831) (9,366) (1,488) (3,146)
----------- ----------- ----------- ------------
Net realized and
unrealized gain (loss)
on investments:
Net realized gain
(loss)................ 14,943 48,923 14,121 (1,623)
Unrealized appreciation
(depreciation)........ 82,593 686,260 75,993 102,963
Capital gain
distribution........... -- 5,942 124 2,305
----------- ----------- ----------- ------------
Net realized and
unrealized gain (loss)
on investments......... 97,536 741,125 90,238 103,645
----------- ----------- ----------- ------------
Increase (decrease) in
net assets from
operations............. 96,705 731,759 88,750 100,499
=========== =========== =========== ============
</TABLE>

F-10
<PAGE>

GE CAPITAL LIFE SEPARATE ACCOUNT II

Statements of Operations, Continued

<TABLE>
<CAPTION>
PBHG Insurance Series Goldman Sachs Variable
Fund, Inc. Insurance Trust
------------------------------------- -------------------------------
PBHG
Large Cap Growth and Mid Cap
Growth PBHG Growth II Income Value
Portfolio Portfolio Fund Fund
--------------------- --------------- --------------- ---------------
Period from Period from Period from Period from
September 21, 1999 to July 2, 1999 to May 14, 1999 to May 14, 1999 to
December 31, December 31, December 31, December 31,
1999 1999 1999 1999
--------------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Investment income:
Income -- Ordinary
Dividends............. $ -- -- 657 2,047
Expenses -- Mortality
and expense risk
charges and
administrative
expenses (note 3)..... 127 481 321 1,071
------- ------ ----- -------
Net investment income
(expense).............. (127) (481) 336 976
------- ------ ----- -------
Net realized and
unrealized gain (loss)
on investments:
Net realized gain
(loss)................ 1,640 139 (951) (5,954)
Unrealized appreciation
(depreciation)........ 15,224 45,866 2,324 (13,066)
Capital gain
distribution.......... -- -- -- --
------- ------ ----- -------
Net realized and
unrealized gain (loss)
on investments......... 16,864 46,005 1,373 (19,020)
------- ------ ----- -------
Increase (decrease) in
net assets from
operations............. $16,737 45,524 1,709 (18,044)
======= ====== ===== =======
</TABLE>

See accompanying notes to financial statements.

F-11
<PAGE>

GE CAPITAL LIFE SEPARATE ACCOUNT II

Statement of Changes in Net Assets

<TABLE>
<CAPTION>
GE Investments Funds, Inc.
-----------------------------------------------------------------------------------
S&P 500 Money Total International
Index Market Return Equity Real Estate
Fund Fund Fund Fund Securities Fund
-------------- ----------------- --------------- ------------------ ---------------
Period from Period from Period from
May 6, 1999 to Period from May 26, 1999 to Period from July 9, 1999 to
December 31, April 29, 1999 to December 31, August 26, 1999 to December 31,
1999 December 31, 1999 1999 December 31, 1999 1999
-------------- ----------------- --------------- ------------------ ---------------
<S> <C> <C> <C> <C> <C>
Increase (decrease) in
net assets
From operations:
Net investment income
(expense)............ $ 6,930 6,992 1,503 (3) 89
Net realized gain
(loss)............... 11,914 -- 61 292 (1)
Unrealized apprecia-
tion (depreciation)
on investments....... 130,724 -- 399 1,782 (243)
Capital gain distribu-
tion................. 20,428 -- 2,092 1,639 5
---------- --------- ------ ------ -----
Increase (decrease)
in net assets from
operations......... 169,996 6,992 4,055 3,710 (150)
---------- --------- ------ ------ -----
From capital transac-
tions:
Net premiums.......... 1,916,894 1,884,687 78,294 23,207 2,000
Transfer (to) from the
general account of GE
Capital Life:
Surrenders........... (4,344) (207) (208) -- --
Transfer gains (loss)
and transfer fees
(note 3)............ 236 1,697 (92) 61 1
Transfers (to) from
the Guarantee Ac-
count................ 106,565 (51,805) 5,388 -- --
Interfund transfers... 6,440 (137,227) 1,017 -- --
---------- --------- ------ ------ -----
Increase (decrease)
in net assets from
capital
transactions....... 2,025,791 1,697,145 84,399 23,268 2,001
---------- --------- ------ ------ -----
Increase (decrease) in
net assets............ 2,195,787 1,704,137 88,454 26,978 1,851
Net assets at beginning
of period............. -- -- -- -- --
---------- --------- ------ ------ -----
Net assets at end of
year.................. $2,195,787 1,704,137 88,454 26,978 1,851
========== ========= ====== ====== =====
</TABLE>

F-12
<PAGE>

GE CAPITAL LIFE SEPARATE ACCOUNT II

Statement of Changes in Net Assets, Continued

<TABLE>
<CAPTION>
GE Investments Funds, Inc. (continued)
---------------------------------------------------------------
Global Value U.S.
Income Equity Income Equity
Fund Fund Fund Fund
--------------- --------------- --------------- ---------------
Period from Period from Period from Period from
May 14, 1999 to May 14, 1999 to May 14, 1999 to June 2, 1999 to
December 31, December 31, December 31, December 31,
1999 1999 1999 1999
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Increase (decrease) in
net assets
From operations:
Net investment income
(expense)............ $ 556 398 7,419 67
Net realized gain
(loss)............... (573) 299 (1,204) (2,044)
Unrealized apprecia-
tion (depreciation)
on investments....... (1,054) 637 (6,432) 5,225
Capital gain distribu-
tion................. 68 -- 257 15,120
------- ------- ------- -------
Increase (decrease)
in net assets from
operations......... (1,003) 1,334 40 18,368
------- ------- ------- -------
From capital transac-
tions:
Net premiums.......... 64,472 130,953 155,833 207,811
Transfer (to) from the
general account of GE
Capital Life:
Surrenders........... (204) -- -- (1,558)
Transfer gains (loss)
and transfer fees
(note 3)............ (65) 15 64 423
Transfers (to) from
the Guarantee Ac-
count................ -- -- 17,167 (3,965)
Interfund transfers... -- (13,084) (12,000) 107,802
------- ------- ------- -------
Increase (decrease)
in net assets from
capital
transactions....... 64,203 117,884 161,064 310,513
------- ------- ------- -------
Increase (decrease) in
net assets............ 63,200 119,218 161,104 328,881
Net assets at beginning
of period............. -- -- -- --
------- ------- ------- -------
Net assets at end of
year.................. $63,200 119,218 161,104 328,881
======= ======= ======= =======
</TABLE>

F-13
<PAGE>

GE CAPITAL LIFE SEPARATE ACCOUNT II

Statements of Changes in Net Assets, Continued

<TABLE>
<CAPTION>
Variable Insurance Products Fund
----------------------------------------------
Equity-
Income Growth Overseas
Portfolio Portfolio Portfolio
--------------- -------------- ---------------
Period from Period from Period from
May 13, 1999 to May 6, 1999 to May 14, 1999 to
December 31, December 31, December 31,
1999 1999 1999
--------------- -------------- ---------------
<S> <C> <C> <C>
Increase (decrease) in net as-
sets
From operations:
Net investment income (ex-
pense)........................ $ (1,725) (2,299) (737)
Net realized gain (loss)....... (2,045) 1,438 872
Unrealized appreciation (depre-
ciation) on investments....... (1,822) 99,641 29,565
Capital gain distribution...... 828 -- --
-------- ------- -------
Increase (decrease) in net
assets from operations...... (4,764) 98,780 29,700
-------- ------- -------
From capital transactions:
Net premiums................... 514,343 576,159 106,047
Transfer (to) from the general
account of GE Capital Life:
Surrenders.................... (8,408) (5,067) --
Transfer gains (loss) and
transfer fees (note 3)....... (1,528) 1,736 (111)
Transfers (to) from the Guaran-
tee Account................... 8,767 15,479 --
Interfund transfers............ 1,314 19,310 --
-------- ------- -------
Increase (decrease) in net
assets from capital transac-
tions....................... 514,488 607,617 105,936
-------- ------- -------
Increase (decrease) in net as-
sets........................... 509,724 706,397 135,636
Net assets at beginning of peri-
od............................. -- -- --
-------- ------- -------
Net assets at end of year....... $509,724 706,397 135,636
======== ======= =======
</TABLE>

F-14
<PAGE>

GE CAPITAL LIFE SEPARATE ACCOUNT II

Statements of Changes in Net Assets, Continued

<TABLE>
<CAPTION>
Variable Insurance Variable Insurance
Products Fund II Products Fund III
------------------------------ ---------------------------------
Growth
Asset Manager Contrafund Growth & Income Opportunities
Portfolio Portfolio Portfolio Portfolio
--------------- -------------- ----------------- ---------------
Period from Period from Period from
June 7, 1999 to May 6, 1999 to Period from May 11, 1999 to
December 31, December 31, April 12, 1999 to December 31,
1999 1999 December 31, 1999 1999
--------------- -------------- ----------------- ---------------
<S> <C> <C> <C> <C>
Increase (decrease) in
net assets
From operations:
Net investment income
(expense)............ $ (545) (4,439) (795) (2,161)
Net realized gain
(loss)............... 358 22,338 649 (1,607)
Unrealized apprecia-
tion (depreciation)
on investments....... 6,464 114,054 6,182 15,807
Capital gain distribu-
tion................. -- -- -- --
-------- --------- ------- -------
Increase (decrease)
in net assets from
operations......... 6,277 131,953 6,036 12,039
-------- --------- ------- -------
From capital transac-
tions:
Net premiums.......... 114,263 1,104,259 162,340 481,850
Transfer (to) from the
general account of GE
Capital Life:
Surrenders........... -- (11,919) (7,583) (4,423)
Transfer gains (loss)
and transfer fees
(note 3)............ 15 220 (143) (4,683)
Transfers (to) from
the Guarantee Ac-
count................ -- 35,713 13,141 6,866
Interfund transfers... -- 32,493 (21,570) (19,575)
-------- --------- ------- -------
Increase (decrease)
in net assets from
capital transac-
tions.............. 114,278 1,160,766 146,185 460,035
-------- --------- ------- -------
Increase (decrease) in
net assets............ 120,555 1,292,719 152,221 472,074
Net assets at beginning
of period............. -- -- -- --
-------- --------- ------- -------
Net assets at end of
year.................. $120,555 1,292,719 152,221 472,074
======== ========= ======= =======
</TABLE>

F-15
<PAGE>

GE CAPITAL LIFE SEPARATE ACCOUNT II

Statements of Changes in Net Assets, Continued

<TABLE>
<CAPTION>
Oppenheimer Variable Account Funds
-------------------------------------------------------------------------------
Capital Multiple
High Aggressive Appreciation Strategies
Income Fund/VA Bond Fund/VA Growth Fund/VA Fund/VA Fund/VA
--------------- -------------- -------------- ----------------- ---------------
Period from Period from Period from Period from
May 21, 1999 to May 6, 1999 to May 5, 1999 to Period from May 14, 1999 to
December 31, December 31, December 31, April 23, 1999 to December 31,
1999 1999 1999 December 31, 1999 1999
--------------- -------------- -------------- ----------------- ---------------
<S> <C> <C> <C> <C> <C>
Increase (decrease) in
net assets
From operations:
Net investment income
(expense)............ $ (698) (1,470) (513) (477) (220)
Net realized gain
(loss)............... 1,328 183 7,258 265 281
Unrealized apprecia-
tion (depreciation)
on investments....... 1,216 1,010 39,274 18,271 2,132
Capital gain distribu-
tion................. -- -- -- -- --
-------- ------- ------- ------- ------
Increase (decrease)
in net assets from
operations......... 1,846 (277) 46,019 18,059 2,193
-------- ------- ------- ------- ------
From capital transac-
tions:
Net premiums.......... 155,654 397,881 113,307 82,368 48,280
Transfer (to) from the
general account of GE
Capital Life:
Surrenders........... (204) (204) -- -- (1,047)
Transfer gains (loss)
and transfer fees
(note 3)............ (15) 142 1,053 (390) 59
Transfers (to) from
the Guarantee
Account.............. 7,348 25,543 2,988 208 1,488
Interfund transfers... 12,305 5,185 (14,376) -- --
-------- ------- ------- ------- ------
Increase (decrease)
in net assets from
capital transac-
tions.............. 175,088 428,547 102,972 82,186 48,780
-------- ------- ------- ------- ------
Increase (decrease) in
net assets............ 176,934 428,270 148,991 100,245 50,973
Net assets at beginning
of period............. -- -- -- -- --
-------- ------- ------- ------- ------
Net assets at end of
year.................. $176,934 428,270 148,991 100,245 50,973
======== ======= ======= ======= ======
</TABLE>

F-16
<PAGE>

GE CAPITAL LIFE SEPARATE ACCOUNT II

Statements of Changes in Net Assets, Continued

<TABLE>
<CAPTION>
Federated Insurance Series
-------------------------------------------------
High
American Leaders Income Bond
Fund II Fund II Utility Fund II
----------------- --------------- ---------------
Period from Period from
Period from May 11, 1999 to July 8, 1999 to
April 23, 1999 to December 31, December 31,
December 31, 1999 1999 1999
----------------- --------------- ---------------
<S> <C> <C> <C>
Increase (decrease) in net
assets
From operations:
Net investment income (ex-
pense)..................... $ (1,030) (792) (1,059)
Net realized gain (loss).... (2,562) (137) (314)
Unrealized appreciation (de-
preciation) on invest-
ments...................... 3,572 1,251 356
Capital gain distribution... -- -- --
-------- ------- -------
Increase (decrease) in net
assets from operations... (20) 322 (1,017)
-------- ------- -------
From capital transactions:
Net premiums................ 203,647 190,800 236,827
Transfer (to) from the gen-
eral account of GE Capital
Life:
Surrenders................. -- -- --
Transfer gains (loss) and
transfer fees (note 3).... (97) (67) 586
Transfers (to) from the
Guarantee Account.......... 2,977 4,096 4,773
Interfund transfers......... 19,610 -- --
-------- ------- -------
Increase (decrease) in net
assets from capital
transactions............. 226,137 194,829 242,186
-------- ------- -------
Increase (decrease) in net
assets...................... 226,117 195,151 241,169
Net assets at beginning of
period...................... -- -- --
-------- ------- -------
Net assets at end of year.... $226,117 195,151 241,169
======== ======= =======
</TABLE>

F-17
<PAGE>

GE CAPITAL LIFE SEPARATE ACCOUNT II

Statements of Changes in Net Assets, Continued

<TABLE>
<CAPTION>
Janus Aspen Series
-----------------------------------------------------------------------------------------------------
Flexible International
Balanced Aggressive Growth Growth Worldwide Growth Income Growth
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
----------------- ----------------- --------------- ----------------- --------------- ---------------
Period from Period from Period from
Period from Period from May 11, 1999 to Period from May 21, 1999 to May 26, 1999 to
April 12, 1999 to April 23, 1999 to December 31, April 23, 1999 to December 31, December 31,
December 31, 1999 December 31, 1999 1999 December 31, 1999 1999 1999
----------------- ----------------- --------------- ----------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Increase
(decrease) in net
assets
From operations:
Net investment
income
(expense)....... $ 19,928 (8,000) (2,372) (3,776) 2,773 (831)
Net realized gain
(loss).......... 33,494 130,943 21,250 26,067 70 14,943
Unrealized
appreciation
(depreciation)
on investments.. 207,622 881,865 159,025 310,611 (2,145) 82,593
Capital gain
distribution.... -- 1,024 193 -- 98 --
---------- --------- --------- --------- ------ -------
Increase
(decrease) in
net assets from
operations..... 261,044 1,005,832 178,096 332,902 796 96,705
---------- --------- --------- --------- ------ -------
From capital
transactions:
Net premiums..... 2,220,553 2,262,136 1,009,031 1,233,902 64,850 219,408
Transfer (to)
from the general
account of GE
Capital Life:
Surrenders....... (14,752) (6,944) (228) (2,435) (205) (248)
Transfer gains
(loss) and
transfer fees
(note 3)........ (272) (1,889) 2,240 (19) 6 (18)
Transfers (to)
from the
guarantee
account......... 131,476 7,412 31,422 16,024 4,773 --
Interfund
transfers....... 6,877 (158,267) 72,918 43,042 -- 7,774
---------- --------- --------- --------- ------ -------
Increase
(decrease) in
net assets from
capital
transactions... 2,343,882 2,102,448 1,115,383 1,290,514 69,424 226,916
---------- --------- --------- --------- ------ -------
Increase
(decrease) in net
assets........... 2,604,926 3,108,280 1,293,479 1,623,416 70,220 323,621
Net assets at
beginning of
period........... -- -- -- -- -- --
---------- --------- --------- --------- ------ -------
Net assets at end
of year.......... $2,604,926 3,108,280 1,293,479 1,623,416 70,220 323,621
========== ========= ========= ========= ====== =======
<CAPTION>
Capital
Appreciation
Portfolio
-----------------
Period from
April 29, 1999 to
December 31, 1999
-----------------
<S> <C>
Increase
(decrease) in net
assets
From operations:
Net investment
income
(expense)....... (9,366)
Net realized gain
(loss).......... 48,923
Unrealized
appreciation
(depreciation)
on investments.. 686,260
Capital gain
distribution.... 5,942
-----------------
Increase
(decrease) in
net assets from
operations..... 731,759
-----------------
From capital
transactions:
Net premiums..... 2,582,488
Transfer (to)
from the general
account of GE
Capital Life:
Surrenders....... (37,429)
Transfer gains
(loss) and
transfer fees
(note 3)........ (2,697)
Transfers (to)
from the
guarantee
account......... 43,093
Interfund
transfers....... 71,513
-----------------
Increase
(decrease) in
net assets from
capital
transactions... 2,656,968
-----------------
Increase
(decrease) in net
assets........... 3,388,727
Net assets at
beginning of
period........... --
-----------------
Net assets at end
of year.......... 3,388,727
=================
</TABLE>

F-18
<PAGE>

GE CAPITAL LIFE SEPARATE ACCOUNT II

Statements of Changes in Net Assets, Continued

<TABLE>
<CAPTION>
PBHG Insurance Series Goldman Sachs Variable
Alger American Fund Fund, Inc. Insurance Trust
-------------------------------- ------------------------------------- -------------------------------
PBHG
Small Large Cap Mid Cap
Capitalization Growth PBHG Growth II Growth and Value
Portfolio Growth Portfolio Portfolio Portfolio Income Fund Fund
-------------- ----------------- --------------------- --------------- --------------- ---------------
Period from Period from Period from Period from
May 6, 1999 to Period from Period from July 2, 1999 to May 14, 1999 to May 14, 1999 to
December 31, April 29, 1999 to September 21, 1999 to December 31, December 31, December 31,
1999 December 31, 1999 December 31, 1999 1999 1999 1999
-------------- ----------------- --------------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease)
in net assets
From operations:
Net investment
income
(expense)........ $ (1,488) (3,146) $ (127) (481) 336 976
Net realized gain
(loss)........... 14,121 (1,623) 1,640 139 (951) (5,954)
Unrealized
appreciation
(depreciation) on
investments...... 75,993 102,963 15,224 45,866 2,324 (13,066)
Capital gain
distribution..... 124 2,305 -- -- -- --
-------- -------- ------------ -------- --------- --------
Increase
(decrease) in
net assets from
operations...... 88,750 100,499 16,737 45,524 1,709 (18,044)
-------- -------- ------------ -------- --------- --------
From capital
transactions:
Net premiums...... 342,557 596,768 38,573 81,571 64,621 278,409
Transfer (to) from
the general
account of
GE Capital Life:
Death Benefits.... -- -- -- -- -- --
Surrenders........ (2,574) (25,065) -- -- -- --
Transfer gains
(loss) and
transfer fees
(note 3)......... (510) (564) 19 (12) 265 680
Transfers (to)
from the
guarantee
account.......... 900 2,000 5,673 100 1,488 15,173
Interfund
transfers........ (45,000) 18,593 1,017 13,084 (7,962) (11,233)
-------- -------- ------------ -------- --------- --------
Increase
(decrease) in
net assets from
capital
transactions.... 295,373 591,732 45,282 94,743 58,412 283,029
-------- -------- ------------ -------- --------- --------
Increase (decrease)
in net assets..... 384,123 692,231 62,019 140,267 60,121 264,985
Net assets at
beginning of
period............ -- -- -- -- -- --
-------- -------- ------------ -------- --------- --------
Net assets at end
of year........... $384,123 692,231 $ 62,019 140,267 60,121 264,985
======== ======== ============ ======== ========= ========
</TABLE>

See accompanying notes to financial statements.

F-19
<PAGE>

GE CAPITAL LIFE SEPARATE ACCOUNT II

Notes to Financial Statements

December 31, 1999

(1) Description of Entity

GE Capital Life Separate Account II (the Account) is a separate investment
account established in 1996 by GE Capital Life Assurance Company of New York
(GE Capital Life) and is incorporated in New York. The Account operates as a
unit investment trust under the Investment Company Act of 1940. The Account
began selling flexible premium variable deferred annuities in 1999 and is used
to fund certain benefits for flexible premium variable deferred annuity life
insurance policies issued by GE Capital Life. GE Capital Life is a stock life
insurance company incorporated in New York on February 23, 1988. GE Capital
Life is a wholly-owned subsidiary by General Electric Capital Assurance
Company. General Electric Capital Assurance Company is an indirect, wholly-
owned subsidiary of General Electric Capital Corporation (GE Capital). GE
Capital, a diversified financial services company, is a wholly-owned
subsidiary of General Electric Company (GE), a New York corporation.

There are currently 37 investment subdivisions available in the Account as
listed in the statements of assets and liabilities. All designated portfolios
included in the Account are series type mutual funds.

(2) Summary of Significant Accounting Policies

(a) Investments

Investments are stated at fair value, which is based on the underlying net
asset value per share of the respective portfolios or funds. Purchases and
sales of investments are recorded on the trade date and income distributions
are recorded on the ex-dividend date. Realized gains and losses on investments
are determined on the average cost basis. The units and unit values are
disclosed as of the last business day in the applicable year.

The aggregate cost of the investments acquired and the aggregate proceeds of
investments sold, for the period ended December 31, 1999 were:

<TABLE>
<CAPTION>
Cost of Proceeds
Shares from
Fund/Portfolio Acquired Shares Sold
- -------------- ---------- -----------
<S> <C> <C>
GE Investment Funds, Inc.:
S&P 500 Index Fund................................... $2,492,470 438,210
Money Market Fund.................................... 3,264,197 1,561,038
Total Return Fund.................................... 114,985 26,944
International Equity Fund............................ 33,084 8,166
Real Estate Securities Fund.......................... 2,107 11
Global Income Fund................................... 87,076 22,175
Value Equity Fund.................................... 144,725 26,377
Income Fund.......................................... 198,503 29,676
U.S. Equity Fund..................................... 486,289 160,418
Oppenheimer Variable Account Funds:
Bond Fund/VA......................................... 506,950 79,665
Aggressive Growth Fund/VA............................ 142,943 40,408
Capital Appreciation Fund/VA......................... 87,405 5,644
High Income Fund/VA.................................. 214,401 39,915
Multiple Strategies Fund/VA.......................... 74,970 26,382
Variable Insurance Products Fund:
Equity-Income Portfolio.............................. 594,362 80,514
Growth Portfolio..................................... 722,654 116,970
Overseas Portfolio................................... 110,342 5,071
Variable Insurance Products Fund II:
Asset Manager Portfolio.............................. 120,654 6,863
Contrafund Portfolio................................. 1,536,802 379,823
</TABLE>

F-20
<PAGE>

GE CAPITAL LIFE SEPARATE ACCOUNT II

Notes to Financial Statements -- Continued

December 31, 1999

(2) Summary of Significant Accounting Policies -- Continued

<TABLE>
<CAPTION>
Cost of Proceeds
Shares from
Fund/Portfolio Acquired Shares Sold
- -------------- --------- -----------
<S> <C> <C>
Variable Insurance Products Fund III:
Growth & Income Portfolio............................. $ 195,927 50,455
Growth Opportunities Portfolio........................ 581,671 123,529
Goldman Sachs Variable Insurance Trust:
Growth and Income Fund................................ 100,860 42,078
Mid Cap Value Fund.................................... 347,874 63,722
Janus Aspen Series:
Aggressive Growth Portfolio........................... 2,758,145 658,214
Growth Portfolio...................................... 1,391,386 277,525
Worldwide Growth Portfolio............................ 1,495,571 205,352
Balanced Portfolio.................................... 2,879,110 511,374
Flexible Income Portfolio............................. 78,383 6,050
International Growth Portfolio........................ 308,118 81,877
Capital Appreciation Portfolio........................ 3,113,347 455,354
Federated Insurance Series:
Utility Fund II....................................... 280,273 39,015
High Income Bond Fund II.............................. 204,066 9,924
American Leaders Fund II.............................. 286,013 60,786
Alger American Fund:
Small Capitalization Portfolio........................ 390,194 95,986
Growth Portfolio...................................... 718,126 126,864
PBHG Insurance Series Fund, Inc.:
PBHG Large Cap Growth Portfolio....................... 51,508 6,322
PBHG Growth II Portfolio.............................. 95,342 1,007
</TABLE>

(b) Capital Transactions

The increase (decrease) in outstanding units from capital transactions for
the period ended December 31, 1999 are as follows:

<TABLE>
<CAPTION>
GE Investments Funds, Inc.
----------------------------------------------------------------------------------
S&P 500 Money Total International Real Estate Global Value U.S.
Index Market Return Equity Securities Income Equity Income Equity
Fund Fund Fund Fund Fund Fund Fund Fund Fund
------- ------- ------ ------------- ----------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Units outstanding at
December 31, 1998...... -- -- -- -- -- -- -- -- --
------- ------- ----- ------- ------ ------ ------ ------ ------
From capital
transactions:
Net premiums........... 163,108 180,071 7,072 2,208 209 6,443 11,804 15,562 17,576
Transfers (to) from the
general account of GE
Capital Life:
Surrenders............. (370) (20) (19) -- -- (20) -- -- (132)
Transfers (to) from the
Guarantee Account..... 9,068 (4,950) 487 -- -- -- -- 1,714 (335)
Interfund transfers.... 548 (13,111) 92 -- -- -- (1,179) (1,198) 9,118
------- ------- ----- ------- ------ ------ ------ ------ ------
Net increase (decrease)
in units from capital
transactions........... 172,354 161,990 7,632 2,208 209 6,423 10,625 16,078 26,227
------- ------- ----- ------- ------ ------ ------ ------ ------
Units outstanding at
December 31, 1999...... 172,354 161,990 7,632 2,208 209 6,423 10,625 16,078 26,227
======= ======= ===== ======= ====== ====== ====== ====== ======
</TABLE>

F-21
<PAGE>

GE CAPITAL LIFE SEPARATE ACCOUNT II

Notes to Financial Statements -- Continued

December 31, 1999

(2) Summary of Significant Accounting Policies -- Continued

F-22
<PAGE>

GE CAPITAL LIFE SEPARATE ACCOUNT II

Notes to Financial Statements -- Continued

December 31, 1999

(2) Summary of Significant Accounting Policies -- Continued

<TABLE>
<CAPTION>
Goldman Sachs
PBHG Insurance Variable Insurance
Series Fund, Inc. Trust
-------------------- ------------------
PBHG Large PBHG Growth and Mid Cap
Cap Growth Growth II Income Value
Portfolio Portfolio Fund Fund
---------- --------- ---------- -------
<S> <C> <C> <C> <C>
Units outstanding at December 31,
1998................................. -- -- -- --
----- ----- ----- ------
From capital transactions:
Net premiums......................... 3,049 6,071 6,743 27,796
Transfers (to) from the general
account of GE Capital Life:
Surrenders........................... -- -- -- --
Transfers (to) from the Guarantee
Account............................. 448 7 155 1,515
Interfund transfers.................. 80 974 (831) (1,121)
----- ----- ----- ------
Net increase (decrease) in units from
capital transactions................. 3,577 7,052 6,067 28,190
----- ----- ----- ------
Units outstanding at December 31,
1999................................. 3,577 7,052 6,067 28,190
===== ===== ===== ======
</TABLE>

The Account is not taxed separately because the operations of the Account
are part of the total operations of GE Capital Life. GE Capital Life is taxed
as a life insurance company under the Internal Revenue Code (the Code). GE
Capital Life is included in the General Electric Capital Assurance Company
consolidated federal income tax return. Under existing federal income tax law,
no taxes are payable on the investment income or on the capital gains of the
Account.

(d) Use of Estimates

Financial statements prepared in conformity with generally accepted
accounting principles require management to make estimates and assumptions
that affect amounts and disclosures reported therein. Actual results could
differ from those estimates.

(3) Related Party Transactions

The premiums transferred from GE Capital Life to the Account represent gross
premiums recorded by GE Capital Life on its flexible variable deferred annuity
products. If a policy is surrendered or lapses during the first six years, a
charge is made by GE Capital Life to cover the expenses of issuing the policy.
In addition, surrender charges are assessed against payments made upon the
maturity date if the maturity date occurs before all of the premium payments
have been in the policy for seven years. Subject to certain limitations, the
charge generally equals 6% of the premium withdrawn in the first four years,
and this charge decreases 2% per year for every year thereafter.

GE Capital Life will deduct a charge of $25 plus .15% per year from the
Account for certain administrative charges. In addition, GE Capital Life
charges the Account 1.25% for the mortality and expense (M&E) risk that GE
Capital Life assumes. The administrative expenses as well as the M&E charges
are deducted daily and reflect the effective annual rates.

GE Investments Funds, Inc. (the Fund) is an open-end diversified management
investment company.

Capital Brokerage Corporation, an affiliate of GE Capital Life, is a
Washington Corporation registered with the Commission under the Securities
Exchange Act of 1934 as a broker-dealer and is a member of the National
Association of Securities Dealers, Inc. Capital Brokerage Corporation serves
as principal underwriter for variable life insurance policies and variable
annuities issued by GE Capital Life.

GE Investment Management Incorporated (Investment Advisor), a wholly-owned
subsidiary of GE, currently serves as investment advisor to GE Investments
Funds, Inc. As compensation for its services, the Investment Advisor is paid
an investment advisory fee by the Fund based on the average daily net assets
at an effective annual rate of .35% for the S&P 500 Index Fund, .50% for the
Money Market, Income, and Total Return Funds, .60% for the Global Income Fund,
.55% for the U.S. Equity Fund, .65% for the Value Equity Fund, .85% for the
Real Estate Securities Fund, and 1.00% for the International Equity Fund.

Certain officers and directors of GE Capital Life are also officers and
directors of Capital Brokerage Corporation.

F-23
<PAGE>

GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK

FINANCIAL STATEMENTS

December 31, 1999
(With Independent Auditors' Report Thereon)

<PAGE>

Independent Auditors' Report

The Board of Directors
GE Capital Life Assurance Company of New York:

We have audited the accompanying balance sheets of GE Capital Life Assurance
Company of New York as of December 31, 1999 and 1998, and the related
statements of income, shareholder's interest, and cash flows for each of the
years in the three-year period ended December 31, 1999. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of GE Capital Life Assurance
Company of New York as of December 31, 1999 and 1998, and the results of its
operations and its cash flows for each of the years in the three-year period
ended December 31, 1999 in conformity with generally accepted accouting
principles.

/s/ KPMG LLP

Richmond, Virginia
January 21, 2000

F-25
<PAGE>

GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK

BALANCE SHEETS
(Dollar amounts in millions, except per share amounts)

<TABLE>
<CAPTION>
December 31,
------------------
1999 1998
-------- --------
<S> <C> <C>
Assets
Investments:
Fixed maturities available-for-sale, at fair value (amor-
tized cost of $1,667.2 in 1999 and $1,506.8 in 1998)..... $1,588.9 $1,530.6
Mortgage loans (net of valuation allowance of $1.3 in 1999
and $0.9 in 1998)........................................ 265.3 190.7
Policy loans.............................................. 1.4 1.4
Short-term investments.................................... 2.5 13.4
-------- --------
Total investments........................................ 1,858.1 1,736.1
-------- --------
Cash....................................................... 1.8 1.4
Accrued investment income.................................. 37.1 30.6
Deferred acquisition costs................................. 94.8 49.4
Intangible assets.......................................... 63.6 50.5
Deferred income tax asset.................................. 24.8 0.5
Other assets............................................... 22.5 12.5
Separate account assets.................................... 19.2 --
-------- --------
Total assets............................................. $2,121.9 $1,881.0
======== ========
Liabilities and Shareholder's Interest
Liabilities:
Future annuity and contract benefits...................... $1,737.0 $1,510.0
Unearned premiums......................................... 15.2 12.7
Liability for policy and contract claims.................. 19.1 10.6
Other policyholder liabilities............................ 44.0 25.8
Accounts payable and accrued expenses..................... 61.8 58.3
Separate account liabilities.............................. 19.2 --
-------- --------
Total liabilities........................................ 1,896.3 1,617.4
-------- --------
Shareholder's interest:
Net unrealized investment gains (losses).................. (32.5) 7.1
-------- --------
Accumulated non-owner changes in equity................... (32.5) 7.1
Common stock ($1,000 par value, 2,000 shares authorized,
issued and outstanding).................................. 2.0 2.0
Additional paid-in capital................................ 259.4 259.4
Accumulated deficit....................................... (3.3) (4.9)
-------- --------
Total shareholder's interest............................. 225.6 263.6
-------- --------
Total liabilities and shareholder's interest............. $2,121.9 $1,881.0
======== ========
</TABLE>

See accompanying notes to financial statements.

F-26
<PAGE>

GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK

STATEMENTS OF INCOME
(Dollar amounts in millions)

<TABLE>
<CAPTION>
Years ended December
31,
----------------------
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
Revenues:
Net investment income.................................. $126.0 $115.9 $111.6
Net realized investment gains.......................... 0.3 2.5 2.2
Premiums............................................... 79.1 83.3 46.9
Other income........................................... 3.4 3.0 3.7
------ ------ ------
Total revenues........................................ 208.8 204.7 164.4
------ ------ ------
Benefits and expenses:
Interest credited...................................... 69.3 69.3 71.7
Benefits and other changes in policy reserves.......... 78.4 78.7 42.5
Commissions............................................ 28.1 17.0 17.6
General expenses....................................... 19.6 9.0 11.0
Amortization of intangibles, net....................... 6.1 7.3 8.2
Increase in deferred acquisition costs, net............ (23.3) (9.8) (15.6)
------ ------ ------
Total benefits and expenses........................... 178.2 171.5 135.4
------ ------ ------
Income before income taxes............................ 30.6 33.2 29.0
Provision for income taxes.............................. 12.5 13.7 11.5
------ ------ ------
Net income............................................ $ 18.1 $ 19.5 $ 17.5
====== ====== ======
</TABLE>

See accompanying notes to financial statements.

F-27
<PAGE>

GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK

STATEMENTS OF SHAREHOLDER'S INTEREST
Years ended December 31, 1999, 1998 and 1997
(Dollar amounts in millions)

<TABLE>
<CAPTION>
Accumulated
non-owner
Common stock Additional changes Total
------------- paid-in other than Accumulated shareholder's
Shares Amount capital earnings deficit interest
------ ------ ---------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balances at January 1,
1997................... 2,000 $2.0 259.4 (1.3) (10.9) 249.2
Changes other than
transactions with
shareholder
Net income............. -- -- -- -- 17.5 17.5
Net unrealized gains on
securities (a)........ -- -- -- 8.6 -- 8.6
-----
Total changes other
than transactions with
shareholder........... 26.1
Dividend............... -- -- -- -- (15.0) (15.0)
----- ---- ----- ----- ----- -----
Balances at December 31,
1997 2,000 2.0 259.4 7.3 (8.4) 260.3
Changes other than
transactions with
shareholder
Net income............. -- -- -- -- 19.5 19.5
Net unrealized losses
on securities (a)..... -- -- -- (0.2) -- (0.2)
-----
Total changes other
than transactions with
shareholder........... 19.3
Dividend............... -- -- -- -- (16.0) (16.0)
----- ---- ----- ----- ----- -----
Balances at December 31,
1998................... 2,000 2.0 259.4 7.1 (4.9) 263.6
Changes other than
transactions with
shareholder
Net income............. -- -- -- -- 18.1 18.1
Net unrealized losses
on securities (a)..... -- -- -- (39.6) -- (39.6)
-----
Total changes other
than transactions with
shareholder........... (21.5)
Dividend............... -- -- -- -- (16.5) (16.5)
----- ---- ----- ----- ----- -----
Balances at December 31,
1999................... 2,000 $2.0 259.4 (32.5) (3.3) 225.6
===== ==== ===== ===== ===== =====
</TABLE>
- -------
(a) Presented net of deferred taxes of $21.3 million, $0.1 million, and $(4.6)
million in 1999, 1998 and 1997, respectively.

See accompanying notes to financial statements.

F-28
<PAGE>

GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK

STATEMENTS OF CASH FLOWS
Years ended December 31, 1999, 1998 and 1997
(Dollar amounts in millions)

<TABLE>
<CAPTION>
1999 1998 1997
------- ------- -------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income......................................... $ 18.1 $ 19.5 $ 17.5
------- ------- -------
Adjustments to reconcile net income to net cash
provided by operating activities:
Increase in future policy benefits................ 117.6 128.5 106.1
Net realized investment gains..................... (0.3) (2.5) (2.2)
Amortization of investment premiums and dis-
counts........................................... (0.7) 4.7 4.7
Amortization of intangibles....................... 6.1 7.3 8.2
Deferred income tax benefit....................... (4.9) (1.9) (1.7)
Change in certain assets and liabilities:
Increase in:
Accrued investment income....................... (6.5) (0.3) (1.4)
Deferred acquisition costs, net................. (23.3) (9.8) (15.6)
Other assets, net............................... (8.8) (2.8) 10.6
Increase (decrease) in:
Other policy related balances................... 20.8 (3.7) 22.8
Policy and contract claims...................... 7.2 -- --
Accounts payable and accrued expenses........... 5.3 10.3 (19.6)
------- ------- -------
Total adjustments.............................. 112.5 129.8 111.9
------- ------- -------
Net cash provided by operating activities...... 130.6 149.3 129.4
------- ------- -------
Cash flows from investing activities:
Proceeds from sales and maturities of investments
in fixed maturities and real estate............... 408.2 457.9 264.9
Purchases of fixed maturities...................... (567.5) (498.3) (340.4)
Mortgage and policy loan originations.............. (93.8) (39.7) (40.6)
Mortgage and policy loan repayments................ 19.0 22.1 9.2
------- ------- -------
Net cash used in investing activities.......... (234.1) (58.0) (106.9)
------- ------- -------
Cash flows from financing activities:
Proceeds from issuance of investment contracts..... 287.1 106.2 151.1
Redemption and benefit payments on investment con-
tracts............................................ (177.6) (171.1) (175.9)
Dividends paid..................................... (16.5) (16.0) (15.0)
------- ------- -------
Net cash provided by (used in) financing activ-
ities......................................... 93.0 (80.9) (39.8)
------- ------- -------
Net increase (decrease) in cash and cash equiv-
alents........................................ (10.5) 10.4 (17.3)
Cash and cash equivalents at beginning of year..... 14.8 4.4 21.7
------- ------- -------
Cash and cash equivalents at end of year........... $ 4.3 $ 14.8 $ 4.4
======= ======= =======
</TABLE>

See accompanying notes to financial statements.

F-29
<PAGE>

GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS
December 31, 1999, 1998 and 1997
(Dollar amounts in millions)

(1) Basis of Presentation and Summary of Significant Accounting Policies

The accompanying financial statements include the historical operations and
accounts of GE Capital Life Assurance Company of New York (GECLA-NY or
Company).

GE Capital Life Assurance Company of New York is a wholly-owned subsidiary
of General Electric Capital Assurance Company (GE Capital Assurance), which,
in turn, is wholly-owned by GE Financial Assurance Holdings, Inc. (GE
Financial Assurance). Prior to January 1, 1999, the Company was a majority
owned subsidiary of GE Capital Assurance. The remaining minority interest was
owned by Great Northern Insured Annuity Corporation (GNAIC), which was also a
wholly-owned subsidiary of GE Capital Assurance. On January 1, 1999, GNAIC
merged with and into its parent company, GE Capital Assurance.

Basis of Presentation

These financial statements have been prepared on the basis of generally
accepted accounting principles (GAAP). The preparation of financial statements
in conformity with GAAP requires management to make estimates and assumptions
that affect the reported amounts and related disclosures. Actual results could
differ from those estimates.

Products

The Company markets and sells products in the State of New York through
financial institutions and various agencies. The primary products of the
Company are investment type deferred annuities, structured settlements,
immediate annuities, variable annuities, and long-term care policies. During
1999, 1998, and 1997, 92%, 96%, and 77%, respectively, of product sales were
distributed through five financial institutions, including one financial
institution which accounted for 60%, 68%, and 55%, respectively, of total
product sales.

Revenues

Investment income is recorded when earned. Realized investment gains and
losses are calculated on the basis of specific identification. Premiums on
long-duration insurance products are recognized as earned when due or, in the
case of life contingent immediate annuities, when the contracts are issued.
Premiums received under annuity contracts without significant mortality risk
are not reported as revenues but as liabilities for future annuity and
contract benefits. Variable product fees are charged to variable annuity
policyholders based upon the daily net assets of the policyholders' account
values, and are recognized as revenue when charged. Other income consists
primarily of surrender charges on certain policies. Surrender charges are
recognized as income when the policy is surrendered.

Cash Equivalents

Certificates and other time deposits are classified as short-term
investments on the balance sheets and considered cash equivalents in the
Statements of Cash Flows.

Investments

The Company has designated its fixed maturities (bonds, notes and redeemable
preferred stock) as available-for-sale. The fair value for fixed maturities is
based on quoted market prices, where available. For fixed maturities not
actively traded, fair values are estimated using values obtained from
independent pricing services or, in the case of private placements, are
estimated by discounting expected future cash flows using a current market
rate applicable to the credit quality, call features and maturity of the
investments, as applicable.

Changes in the fair values of investments available-for-sale, net of the
effect on deferred policy acquisition costs, present value of future profits
and deferred federal income taxes, are reflected as unrealized investment
gains or losses in a separate component of shareholder's interest and,
accordingly, have no effect on net income, but are shown as accumulated non-

F-30
<PAGE>

GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS -- Continued
December 31, 1999, 1998 and 1997
(Dollar amounts in millions)

(1) Basis of Presentation and Summary of Significant Accounting Policies --
Continued

owner changes in equity. Unrealized losses that are considered other than
temporary are recognized in earnings through an adjustment to the amortized
cost basis of the underlying securities.

Investment income on mortgage and asset-backed securities is initially based
upon yield, cash flow and prepayment assumptions at the date of purchase.
Subsequent revisions in those assumptions are recorded using the retrospective
method, whereby the amortized cost of the securities is adjusted to the amount
that would have existed had the revised assumptions been in place at the date
of purchase. The adjustments to amortized cost are recorded as a charge or
credit to investment income.

Under certain securities lending transactions, the Company requires the
borrower provide collateral, consisting primarily of cash and government
securities, on a daily basis, in amounts equal to or exceeding 102% of the
market value of the applicable securities loaned.

Mortgage and policy loans are stated at the unpaid principal balance of such
loans, net of allowances for estimated uncollectible amounts.

Deferred Acquisition Costs

Acquisition costs include costs and expenses which vary with and are
primarily related to the acquisition of insurance and investment contracts,
such as commissions, direct advertising and printing, and certain support
costs such as underwriting and policy issue expenses. Deferred acquisition
costs capitalized are determined by actual costs and expenses incurred by
product in the year of issue.

For investment contracts, the amortization of deferred acquisition cost is
based on the present value of the anticipated gross profits resulting from
investments, interest credited, surrender charges, mortality and maintenance
expenses. As actual gross profits vary from projected, the impact on
amortization is included in net income. For insurance contracts, the
acquisition costs are amortized in relation to the benefit payments or the
present value of expected future premiums.

Deferred acquisition costs are reviewed to determine if they are recoverable
from future income, including investment income, and, if not considered
recoverable, are charged to expense.

Goodwill

Goodwill is amortized over its estimated period of 25 years of benefit on
the straight-line method. Goodwill in excess of associated expected operating
cash flows is considered to be impaired and is written down to fair value.

Federal Income Taxes

The Company is included with GE Capital Assurance in a life insurance
consolidated federal income tax return. Deferred taxes are allocated by
applying the asset and liability method of accounting for deferred income
taxes to members of the group as if each member was a separate taxpayer.
Intercompany balances are settled annually.

Reinsurance

Premium revenue, benefits, underwriting, acquisition and insurance expenses
are reported net of the amounts relating to reinsurance ceded to other
companies, except for reinsurance costs for universal life products. Amounts
due from reinsurers for incurred and estimated future claims are reflected in
the reinsurance recoverable asset which is included in other assets on the
balance sheet. The cost of reinsurance is accounted for over the terms of the
related treaties using assumptions consistent with those used to account for
the underlying reinsured policies.

F-31
<PAGE>

GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS -- Continued
December 31, 1999, 1998 and 1997
(Dollar amounts in millions)

(1) Basis of Presentation and Summary of Significant Accounting Policies --
Continued

Future Annuity and Contract Benefits

Future annuity and contract benefits consist of the liabilities for life
insurance policies, accident and health, and deferred annuity contracts. The
liability for insurance and accident and health contracts is calculated based
upon actuarial assumptions as to mortality, morbidity, interest, expense and
withdrawals, with experience adjustments for adverse deviation where
appropriate. The liability for deferred annuity contracts is generally equal
to the policyholder's current account value.

Liability for Policy and Contract Claims

The liability for policy and contract claims represents the amount needed to
provide for the estimated ultimate cost of settling claims relating to insured
events that have occurred on or before the end of the respective reporting
period. The estimated liability includes requirements for future payments of
(a) claims that have been reported to the insurer, (b) claims related to
insured events that have occurred but that have not been reported to the
insurer as of the date the liability is estimated, and (c) claim adjustment
expenses. Claim adjustment expenses include costs incurred in the claim
settlement process such as legal fees and costs to record, process, and adjust
claims.

Separate Account Assets and Liabilities

The separate account assets and liabilities represent funds held for the
exclusive benefit of the variable annuity contract owners. The Company
receives mortality risk fees and administration charges from the variable
mutual fund portfolios. The separate account assets are carried at fair value
and are equivalent to the liabilities that represent the policyholders' equity
in those assets.

Accounting Pronouncement Not Yet Adopted

The Financial Accounting Standards Board (FASB) has issued Statement of
Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities (Statement 133), effective for the Company on January
1, 2001 (as amended by Statement of Financial Accounting Standards No. 137,
Deferral of the Effective Date of Statement No. 133). Upon adoption, all
derivative instruments (including certain derivative instruments embedded in
other contracts) will be recognized in the balance sheet at fair value, and
changes in such fair values must be recognized immediately in earnings unless
specific hedging criteria are met. Changes in the values of derivatives
meeting these hedging criteria will ultimately offset related earnings effects
of the hedged items; effects of qualifying changes in fair value are to be
recorded in equity pending recognition in earnings. Certain significant
refinements and interpretations of Statement 133 are being deliberated by the
FASB , and the effects on accounting for the Company's financial instruments
will depend to some degree on the results of such deliberations. Management
has not determined the total probable effects of adopting Statement 133, and
does not believe that an estimate of such effects would be meaningful at this
time.

(2) Investments

General

For the years ended December 31, the sources of investment income of the
Company were as follows:

<TABLE>
<CAPTION>
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
Fixed maturities..................................... $109.1 $101.1 $ 99.1
Mortgage loans....................................... 17.8 15.4 13.6
------ ------ ------
Gross investment income.............................. 126.9 116.5 112.7
Investment expenses.................................. (0.9) (0.6) (1.1)
------ ------ ------
Net investment income................................ $126.0 $115.9 $111.6
====== ====== ======
</TABLE>

F-32
<PAGE>

GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS -- Continued
December 31, 1999, 1998 and 1997
(Dollar amounts in millions)

(2) Investments -- Continued

For the years ended December 31, sales proceeds and gross realized
investment gains and losses resulting from the sales of investment securities
available-for-sale were as follows:

<TABLE>
<CAPTION>
1999 1998 1997
------ ------ -----
<S> <C> <C> <C>
Sales proceeds........................................ $143.0 $153.4 $88.0
------ ------ -----
Gross realized investment:
Gains................................................ 1.1 3.2 2.6
Losses............................................... (0.8) (0.7) (0.4)
------ ------ -----
Net realized investment gains......................... $ 0.3 $ 2.5 $ 2.2
====== ====== =====
</TABLE>

The additional proceeds from investments presented in the Statements of Cash
Flows result from principal collected on mortgage and asset-backed securities,
maturities, calls and sinking fund payments.

Net unrealized gains and losses on available-for-sale investment securities
reflected as a separate component of shareholder's interest are summarized as
follows:

<TABLE>
<CAPTION>
December 31,
----------------------
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
Net unrealized gains (losses) on fixed maturities
available-for-sale before adjustments............ $(78.3) $ 23.8 $ 22.0
Adjustments to the present value of future profits
and deferred acquisition costs................... 28.3 (12.9) (10.8)
Deferred income taxes............................. 17.5 (3.8) (3.9)
------ ------ ------
Net unrealized gains (losses) on available-for-
sale investment securities....................... $(32.5) $ 7.1 $ 7.3
====== ====== ======
</TABLE>

At December 31, the amortized cost, gross unrealized gains and losses, and
fair values of the Company's fixed maturities available-for-sale were as
follows:

<TABLE>
<CAPTION>
Amortized Unrealized Unrealized Fair
1999 Cost Gains Losses Value
---- --------- ---------- ---------- --------
<S> <C> <C> <C> <C>
Fixed maturities:
U.S. government and agency........ $ 50.0 $ -- $ (9.8) $ 40.2
Non U.S. government............... 5.1 -- (0.1) 5.0
Non U.S. corporate................ 119.9 0.2 (5.4) 114.7
U.S. corporate.................... 940.6 2.3 (57.4) 885.5
Mortgage backed................... 221.0 2.2 (3.5) 219.7
Asset backed...................... 330.6 0.3 (7.1) 323.8
-------- ----- ------ --------
Total fixed maturities............. $1,667.2 $ 5.0 $(83.3) $1,588.9
======== ===== ====== ========

<CAPTION>
Amortized Unrealized Unrealized Fair
1998 Cost Gains Losses Value
---- --------- ---------- ---------- --------
<S> <C> <C> <C> <C>
Fixed maturities:
U.S. government and agency........ $ 8.0 $ 0.1 $ -- $ 8.1
Non U.S. government............... 5.2 0.3 -- 5.5
Non U.S. corporate................ 63.7 1.8 (2.2) 63.3
U.S. corporate.................... 1,000.2 22.5 (7.7) 1,015.0
Mortgage backed................... 429.7 10.3 (1.3) 438.7
-------- ----- ------ --------
Total fixed maturities............. $1,506.8 $35.0 $(11.2) $1,530.6
======== ===== ====== ========
</TABLE>

F-33
<PAGE>

GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS -- Continued
December 31, 1999, 1998 and 1997
(Dollar amounts in millions)

(2) Investments -- Continued

The scheduled maturity distribution of the fixed maturity portfolio at
December 31, 1999 follows. Expected maturities may differ from scheduled
contractual maturities because issuers of securities may have the right to
call or prepay obligations with or without call or prepayment penalties.

<TABLE>
<CAPTION>
Amortized Fair
Cost Value
--------- --------
<S> <C> <C>
Due in one year or less.................................. $ 72.5 $ 71.5
Due after one year through five years.................... 397.9 386.8
Due after five years through ten years................... 229.3 219.3
Due after ten years...................................... 415.9 367.8
-------- --------
Subtotals.............................................. 1,115.6 1,045.4
Mortgage backed securities............................... 221.0 219.7
Asset backed securities.................................. 330.6 323.8
-------- --------
Totals................................................. $1,667.2 $1,588.9
======== ========
</TABLE>

At December 31, 1999, $79.4 of the Company's investments (excluding mortgage
and asset-backed securities) were subject to certain call provisions.

As required by law, the Company has investments on deposit with governmental
authorities and banks for the protection of policyholders of $0.5 and $0.4 at
December 31, 1999 and 1998, respectively.

At December 31, 1999, approximately 23.8%, 9.3% and 15.7% of the Company's
investment portfolio is comprised of securities issued by the manufacturing,
utility and financial industries, respectively, the vast majority of which are
rated investment grade, and which are senior secured bonds. This portfolio is
widely diversified among various geographic regions in the United States, and
is not dependent on the economic stability of one particular region.

At December 31, 1999, the Company did not hold any fixed maturity
securities, other than securities issued or guaranteed by the U.S. government,
which exceeded 10% of shareholder's interest.

The credit quality of the fixed maturity portfolio at December 31 follows.
The categories are based on the higher of the ratings published by Standard &
Poors or Moody's.

<TABLE>
<CAPTION>
1999 1998
---------------- ----------------
Fair Fair
Value Percent Value Percent
-------- ------- -------- -------
<S> <C> <C> <C> <C>
Agencies and treasuries................... $ 166.6 10.5% $ 215.3 14.1%
AAA/Aaa................................... 379.4 23.9 196.8 12.9
AA/Aa..................................... 118.9 7.5 91.7 6.0
A/A....................................... 332.3 20.9 457.3 29.9
BBB/Baa................................... 415.4 26.1 444.5 29.0
BB/Ba..................................... 47.0 3.0 44.8 2.9
B/B....................................... 8.0 0.5 8.5 0.5
Not rated................................. 121.3 7.6 71.7 4.7
-------- ----- -------- -----
Totals.................................. $1,588.9 100.0% $1,530.6 100.0%
======== ===== ======== =====
</TABLE>

Bonds with ratings ranging from AAA/Aaa to BBB-/Baa3 are generally regarded
as investment grade securities. Some agencies and treasuries (that is, those
securities issued by the United States government or an agency thereof) are
not rated, but all are considered to be investment grade securities. Finally,
some securities, such as private placements, have not been

F-34
<PAGE>

GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS -- Continued
December 31, 1999, 1998 and 1997
(Dollar amounts in millions)

(2) Investments -- Continued

assigned a rating by any rating service and are therefore categorized as "not
rated." This has neither positive nor negative implications regarding the
value of the security.

At December 31, 1999 and 1998, there were no fixed maturities in default as
to principal or interest.

Mortgage Loans

At December 31, 1999 and 1998, the Company's mortgage loan portfolio
consisted of first mortgage loans on commercial real estate properties of 153
and 126, respectively. The loans, which are originated by the Company through
a network of mortgage bankers, are made only on completed, leased properties
and generally have a maximum loan-to-value ratio of 75% at the date of
origination.

At December 31, 1999 and 1998, respectively, the Company held $73.4 and
$40.2 in mortgages secured by real estate in California, comprising 27.7% and
21.0% of the respective total mortgage portfolio. For the years ended December
31, 1999, 1998 and 1997, respectively, the Company originated $38.3, $9.5 and
$11.4 of mortgages secured by real estate in California, which represent
40.9%, 24.0% and 28.0% and of the respective total originations for those
years.

As of December 31, 1999 and 1998, the Company was committed to fund $22.8
and $26.1, respectively, in mortgage loans.

"Impaired" loans are defined under generally accepted accounting principles
as loans for which it is probable that the lender will be unable to collect
all amounts due according to the original contractual terms of the loan
agreement. That definition excludes, among other things, leases, or large
groups of smaller-balance homogeneous loans, and therefore applies principally
to the Company's commercial loans. There were no impaired loans at December
31, 1999 and 1998.

(3) Deferred Acquisition Costs

Activity impacting deferred acquisition costs for the years ended December
31, was as follows:

<TABLE>
<CAPTION>
1999 1998 1997
----- ----- -----
<S> <C> <C> <C>
Unamortized balance at January 1...................... $56.6 $46.8 $31.2
Costs deferred........................................ 29.9 14.4 18.5
Amortization, net..................................... (6.6) (4.6) (2.9)
----- ----- -----
Unamortized balance at December 31.................... 79.9 56.6 46.8
----- ----- -----
Cumulative effect of net unrealized investment (gains)
losses............................................... 14.9 (7.2) (4.1)
----- ----- -----
Balance at December 31................................ $94.8 $49.4 $42.7
===== ===== =====
</TABLE>

(4) Intangible Assets

Present Value of Future Profits (PVFP)

In conjunction with the acquisition of the Company in 1993, a portion of the
purchase price was assigned to the right to receive future gross profits
arising from existing insurance and investment contracts. This intangible
asset, PVFP, represents the actuarially determined present value of the
projected future cash flows from the acquired policies.

The method used by the Company to value PVFP is summarized as follows: (1)
identify the future gross profits attributable to certain lines of business,
(2) identify the risks inherent in realizing those gross profits, and (3)
discount those gross profits at the rate of return that the Company must earn
in order to accept the inherent risks.

F-35
<PAGE>

GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS -- Continued
December 31, 1999, 1998 and 1997
(Dollar amounts in millions)

(4) Intangible Assets -- Continued

PVFP is amortized, net of accreted interest, in a manner similar to the
amortization of deferred acquisition costs. Interest accretes at rates
credited to policyholders on underlying contracts. As actual results vary from
projected amounts, the impact on amortization is included in net income.

Recoverability of PVFP is evaluated periodically by comparing the current
estimate of expected future gross profits to the unamortized asset balance. If
such comparison indicates that the expected gross profits will not be
sufficient to recover PVFP, the difference is charged to expense.

The following table presents the activity in PVFP for the years ended
December 31:

<TABLE>
<CAPTION>
1999 1998 1997
----- ----- -----
<S> <C> <C> <C>
Unamortized balance at January 1...................... $26.4 $32.2 $38.9
Interest accreted at 4.7% in 1999, 5.0% in 1998 and
5.6% in 1997......................................... 0.8 1.0 1.4
Amortization.......................................... (5.4) (6.8) (8.1)
----- ----- -----
Unamortized balance at December 31.................... 21.8 26.4 32.2
----- ----- -----
Cumulative effect of net unrealized investment (gains)
losses............................................... 13.4 (5.8) (6.7)
----- ----- -----
Balance at December 31................................ $35.2 $20.6 $25.5
===== ===== =====
</TABLE>

The estimated percentage of the December 31, 1999 balance, before the effect
of unrealized investment gains or losses, to be amortized over each of the
next five years is as follows:

Goodwill

At December 31, 1999 and 1998, total unamortized goodwill was $28.4 and
$29.9, respectively, which is shown net of accumulated amortization of $10.0
and $8.5, respectively. Goodwill amortization was $1.5, $1.5, and $1.6 for the
years ended December 31, 1999, 1998 and 1997, respectively. Goodwill in excess
of associated expected operating cash flows is considered to be impaired and
is written down to fair value (no such write-downs have been made).

(5) Reinsurance

In order to limit the amount of loss retention, certain policy risks are
reinsured with other insurance companies. The maximum amount of life insurance
retained on any one life may not exceed $0.2. Reinsurance contracts do not
relieve the Company of its obligations to policyholders. In the unlikely event
that the reinsurers would be unable to meet their obligations, the Company is
liable for the reinsured claims. The Company monitors both the financial
condition of individual reinsurers and risk concentrations arising from
similar geographic regions, activities and economic characteristics of
reinsurers to lessen the risk of default by such reinsurers.

The Company has a reinsurance agreement with an affiliated company whereby
it assumed all liabilities and future premiums related to the affiliate's New
York business. Certain fixed maturities with a fair value of $60.0 at December
31, 1999 were held in trust for the benefit of policyholders.

F-36
<PAGE>

GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS -- Continued
December 31, 1999, 1998 and 1997
(Dollar amounts in millions)

(5) Reinsurance -- Continued

The effects of reinsurance on premiums written and earned for the years
ended December 31 were as follows:

<TABLE>
<CAPTION>
Written Earned
------------------- -------------------
1999 1998 1997 1999 1998 1997
----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Direct........................... $78.8 $82.8 $48.2 $76.2 $80.6 $44.5
Assumed.......................... 5.2 4.0 3.6 5.2 4.0 3.6
Ceded............................ (2.3) (1.7) (1.1) (2.3) (1.3) (1.2)
----- ----- ----- ----- ----- -----
Net Premiums..................... $81.7 $85.1 $50.7 $79.1 $83.3 $46.9
----- ----- ----- ----- ----- -----
Percentage of amount assumed to
net............................. 6.6% 4.8% 7.7%
===== ===== =====
</TABLE>

Reinsurance recoveries recognized as a reduction of benefits amounted to
$9.3, $10.8, and $11.2, during 1999, 1998 and 1997, respectively. These
recoveries were partially offset by certain changes in benefits and other
policy reserves.

(6) Future Annuity and Contract Benefits

Investment Contracts

Investment contracts are broadly defined to include contracts without
significant mortality or morbidity risk. Payments received from sales of
investment contracts are recognized by providing a liability equal to the
current account value of the policyholders' contracts. Interest rates credited
to investment contracts are guaranteed for the initial policy term with
renewal rates determined as necessary by management. At December 31, 1999 and
1998, investment contracts totaled $1,474.4 and $1,313.2, respectively.

Insurance Contracts

Insurance contracts are broadly defined to include contracts with
significant mortality and/or morbidity risk. The liability for future benefits
of insurance contracts is the present value of such benefits less the present
value of future net premiums based on mortality, morbidity, and other
assumptions which were appropriate at the time the policies were issued or
acquired. These assumptions are periodically evaluated for potential premium
deficiencies. Any changes in the estimated liability are reflected in income
as the estimates are revised. At December 31, 1999 and 1998, insurance
contracts, totaled $262.6 and $196.8, respectively.

Interest rate assumptions used in calculating the present value of future
annuity and contract benefits range from 3.6% to 9.9%.

(7) Related-Party Transactions

The Company receives administrative services from certain affiliates for
which progress payments for these services are made monthly. For the years
ended December 31, 1999, 1998 and 1997, these services were valued at $17.7,
$7.6, and $9.8, respectively.

(8) Income Taxes

The total provision for income taxes for the years ended December 31
consisted of the following components:

<TABLE>
<CAPTION>
1999 1998 1997
----- ----- -----
<S> <C> <C> <C>
Current federal income tax provision.................... $13.7 $16.7 $13.2
Deferred federal income tax benefit..................... (1.2) (3.5) (1.7)
----- ----- -----
Federal provision....................................... 12.5 13.2 11.5
Current state income tax provision...................... -- 0.5 --
----- ----- -----
Total income tax provision.............................. $12.5 $13.7 $11.5
===== ===== =====
</TABLE>

F-37
<PAGE>

GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS -- Continued
December 31, 1999, 1998 and 1997
(Dollar amounts in millions)

(8) Income Taxes -- Continued

The reconciliation of the federal statutory tax rate to the effective income
tax rate is as follows:

<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Statutory U.S. federal income tax rate..................... 35.0% 35.0% 35.0%
State income tax, net of federal effect.................... -- 0.9 --
Goodwill amortization...................................... 1.8 1.6 1.9
Other, net................................................. 4.0 3.8 2.8
---- ---- ----
Effective rate............................................. 40.8% 41.3% 39.7%
==== ==== ====
</TABLE>

The components of the net deferred income tax asset at December 31 are as
follows:

<TABLE>
<CAPTION>
1999 1998
------ ------
<S> <C> <C>
Assets:
Net unrealized losses on investment securities.............. $ 17.5 $ --
Future annuity and contract benefits........................ 34.9 75.3
------ ------
Total deferred income tax assets............................. 52.4 75.3
====== ======
Liabilities:
Net unrealized gains on investment securities............... -- (3.8)
Investments................................................. (1.0) (6.8)
Present value of future profits............................. (5.2) (21.6)
Deferred acquisition costs.................................. (19.6) (32.9)
Other, net.................................................. (1.8) (9.7)
------ ------
Total deferred income tax liabilities........................ (27.6) (74.8)
------ ------
Net deferred income tax asset................................ $ 24.8 $ 0.5
====== ======
</TABLE>

The Company paid $11.2, $13.6 and $12.1, for federal and state income taxes
in 1999, 1998 and 1997, respectively.

Based on an analysis of the Company's tax position, management believes it
is more likely than not that the results of future operations and
implementation of tax planning strategies will generate sufficient taxable
income enabling the Company to realize remaining deferred tax assets.
Accordingly, no valuation allowance for deferred tax assets is deemed
necessary.

(9) Commitments and Contingencies

Guaranty Association Assessments

The Company is required to participate in the guaranty association of the
state of New York. The state guaranty association ensures payment of
guaranteed benefits, with certain restrictions to policyholders of impaired or
insolvent insurance companies, by assessing all other companies involved in
similar lines of business. The insolvency of a major insurer that wrote
significant business in New York could have an adverse impact on the
profitability of the Company. The Company paid $0.3, $0.2, and $0.2 to the New
York State guaranty association during 1999, 1998 and 1997, respectively.

Litigation

The Company is a defendant in various cases of litigation considered to be
in the normal course of business. The Company believes that the outcome of
such litigation will not have a material effect on its financial position or
results of operations.

F-38
<PAGE>

GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS -- Continued
December 31, 1999, 1998 and 1997
(Dollar amounts in millions)

(10) Fair Value of Financial Instruments

The fair values of financial instruments presented in the applicable notes
to the Company's financial statements are estimates of the fair values at a
specific point in time using available market information and valuation
methodologies considered appropriate by management. These estimates are
subjective in nature and involve uncertainties and significant judgment in the
interpretation of current market data. Therefore, the fair values presented
are not necessarily indicative of amounts the Company could realize or settle
currently. The Company does not necessarily intend to dispose of or liquidate
such instruments prior to maturity.

Fixed maturities which, as a matter of accounting policy, are reflected in
the accompanying financial statements at fair value are not included in the
following disclosures. The carrying value of policy loans, short-term
investments and accrued investment income approximates fair value at December
31, 1999 and 1998, respectively.

At December 31, the carrying amounts and fair values of the Company's
financial instruments were as follows:

<TABLE>
<CAPTION>
1999 1998
----------------- -----------------
Carrying Fair Carrying Fair
Amount Value Amount Value
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Mortgage loans........................... $ 265.3 $ 261.8 $ 190.7 $ 207.5
Investment contracts..................... 1,463.8 1,411.6 1,302.7 1,265.9
======== ======== ======== ========
</TABLE>

The fair value of mortgage loans is estimated by discounting the estimated
future cash flows using interest rates applicable to current loan
originations, adjusted for credit risks.

The estimated fair value of investment contracts is the amount payable on
demand (cash surrender value) for deferred annuities and the net present value
based on interest rates currently offered on similar contracts for non-life
contingent immediate annuities.

(11) Restrictions on Dividends

State insurance departments which regulate life insurance companies
recognize only statutory accounting practices for determining and reporting
the financial condition and results of operations of an insurance company, for
determining its solvency under law, and for determining whether its financial
condition warrants the payment of a dividend to its shareholders. The maximum
amount of dividends, which can be paid by State of New York insurance
companies to shareholders without prior approval of the Insurance
Commissioner, is subject to certain restrictions. No dividend payout may be
made without prior approval. The Company last paid a dividend to GECA of $16.5
in 1999.

(12) Supplementary Financial Data

The Company files financial statements with state insurance regulatory
authorities and the National Association of Insurance Commissioners (NAIC)
that are prepared on an accounting basis prescribed or permitted by such
authorities (statutory basis). Statutory accounting practices differ from GAAP
in several respects, causing differences in reported net income and
shareholder's interest. Permitted statutory accounting practices encompass all
accounting practices not so prescribed but that have been specifically allowed
by state insurance authority. The Company has no significant permitted
accounting practices.

Statutory net income for the years ended December 31, 1999, 1998 and 1997
was $5.1, $24.8, and $13.7, respectively. Statutory capital and surplus as of
December 31, 1999 and 1998 was $153.7 and $168.8, respectively.

The NAIC has adopted Risk-Based Capital (RBC) requirements to evaluate the
adequacy of statutory capital and surplus in relation to risks associated
with: (i) asset quality, (ii) insurance risk, (iii) interest rate risk, and
(iv) other business factors.

F-39
<PAGE>

GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS -- Continued
December 31, 1999, 1998 and 1997
(Dollar amounts in millions)

(12) Supplementary Financial Data -- Continued

The RBC formula is designated as an early warning tool for the states to
identify possible under-capitalized companies for the purpose of initiating
regulatory action. In the course of operations, the Company periodically
monitors its level of RBC. At December 31, 1999 and 1998, the Company exceeded
the minimum required RBC levels.

(13) Business Segments

The Company conducts its operations through two business segments: (1)
Wealth Accumulation and Transfer, comprised of products intended to increase
the policyholder's wealth, transfer wealth to beneficiaries or provide for a
means for replacing the income of the insured in the event of premature death,
and (2) Lifestyle Protection and Enhancement, comprised of products intended
to protect accumulated wealth and income from the financial drain of
unforeseen events.

The following is a summary of industry segment activity for 1999, 1998 and
1997:

<TABLE>
<CAPTION>
1999 1998
------------------------------------ ------------------------------------
Wealth Lifestyle Wealth Lifestyle
accumulation & protection & accumulation & protection &
transfer enhancement Total transfer enhancement Total
-------------- ------------ -------- -------------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
Net investment income... $ 120.0 $ 6.0 $ 126.0 $ 111.9 $ 4.0 $ 115.9
Net unrealized
investment gains....... 0.3 -- 0.3 2.5 -- 2.5
Premiums................ 36.3 42.8 79.1 48.3 35.0 83.3
Other revenues.......... 3.4 -- 3.4 3.0 -- 3.0
-------- ------ -------- -------- ----- --------
Total revenues........ $ 160.0 $ 48.8 $ 208.8 $ 165.7 $39.0 $ 204.7
-------- ------ -------- -------- ----- --------
Interest credited,
benefits and other
changes in policy
reserves............... 114.0 33.7 147.7 122.0 26.0 148.0
Commissions............. 17.8 10.3 28.1 8.0 9.0 17.0
Amortization of
intangibles............ 5.5 0.6 6.1 6.3 1.0 7.3
Other operating costs
and expenses........... (3.5) (0.2) (3.7) 3.2 (4.0) (0.8)
-------- ------ -------- -------- ----- --------
Total benefits and
expenses............. 133.8 44.4 178.2 139.5 32.0 171.5
-------- ------ -------- -------- ----- --------
Income before income
taxes................ $ 26.2 $ 4.4 $ 30.6 $ 26.2 $ 7.0 $ 33.2
======== ====== ======== ======== ===== ========
Total assets............ $1,986.2 $135.7 $2,121.9 $1,787.7 $93.3 $1,881.0
======== ====== ======== ======== ===== ========
</TABLE>

<TABLE>
<CAPTION>
1997
------------------------------------
Wealth Lifestyle
accumulation & protection &
transfer enhancement Total
-------------- ------------ --------
<S> <C> <C> <C>
Net investment income................... $ 107.5 $ 4.1 $ 111.6
Net unrealized investment losses........ 2.2 -- 2.2
Premiums................................ 20.5 26.4 46.9
Other revenues.......................... 3.7 -- 3.7
-------- ----- --------
Total revenues........................ $ 133.9 $30.5 $ 164.4
-------- ----- --------
Interest credited, benefits and other
changes in policy reserves............. 99.1 15.1 114.2
Commissions............................. 8.9 8.7 17.6
Amortization of intangibles............. 7.4 0.8 8.2
Other operating costs and expenses...... (0.1) (4.5) (4.6)
-------- ----- --------
Total benefits and expenses........... 115.3 20.1 135.4
-------- ----- --------
Income before income taxes............ $ 18.6 $10.4 $ 29.0
======== ===== ========
Total assets............................ $1,711.9 $95.6 $1,807.5
======== ===== ========
</TABLE>

F-40
<PAGE>

PART C

OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements

All required financial statements are included in Part B of this Registration
Statement or will be included in a pre-effective amendment.

(b) Exhibits

<TABLE>
<C> <S>
(1)(a) Resolution of Board of Directors of GE Capital Life Assurance Company
of New York ("GE Capital Life") authorizing the establishment of the
GE Capital Life Separate Account II (the "Separate Account").(1)

(1)(b) Resolution of Board of Directors of GE Capital Life Assurance Company
of New York authorizing the establishment of thirty-seven investment
subdivisions of Separate Account II investing in shares of Alger
American Small Capitalization Portfolio and Alger American Growth
Portfolio of the Alger American Fund; VIP Equity-Income Portfolio, VIP
Growth Portfolio and VIP Overseas Portfolio of Fidelity Variable
Insurance Products Fund; VIP II Asset Manager Portfolio and VIP II
Contrafund Portfolio of Fidelity Variable Insurance Products Fund II;
VIP III Growth & Income Portfolio and VIP III Growth Opportunities
Portfolio of Fidelity Variable Insurance Products Fund III; Federated
Utility Fund II, Federated High Income Bond Fund II and Federated
American Leaders Fund II of Federated Insurance Series; Balanced
Portfolio, Flexible Income Portfolio, Growth Portfolio, Aggressive
Growth Portfolio, Worldwide Growth Portfolio, International Growth
Portfolio and Capital Appreciation Portfolio of Janus Aspen Series;
Money Market Fund, Income Fund, S&P 500 Index Fund, Total Return Fund,
International Equity Fund, Real Estate Securities Fund, Global Income
Fund, Value Equity Fund and U.S. Equity Fund of GE Investments Funds,
Inc.; Oppenheimer High Income Fund, Oppenheimer Bond Fund, Oppenheimer
Aggressive Growth Fund, Oppenheimer Growth Fund and Oppenheimer
Multiple Strategies Fund of Oppenheimer Variable Account Funds; PBHG
Growth II Portfolio and PBHG Large Cap Growth Portfolio of PBHG
Insurance Series Fund, Inc. Goldman Sachs Growth and Income Fund and
Goldman Sachs Mid Cap Equity Fund of Goldman Sachs Asset Management,
Inc.(5)

(1)(c) Resolution of Board of Directors of GE Capital Life Assurance Company
of New York authorizing the name change of certain investment
subdivisions of Separate Account II investing in shares of Oppenheimer
High Income Fund/VA, Oppenheimer Bond Fund/VA, Oppenheimer Aggressive
Growth Fund/VA, Oppenheimer Capital Appreciation Fund/VA and
Oppenheimer Multiple Strategies Fund/VA of Oppenheimer Variable
Account Funds and Goldman Sachs Mid Cap Value Fund of Goldman Sachs
Asset Management, Inc.(5)

(1)(d) Resolution of Board of Directors of GE Capital Life Assurance Company
of New York authorizing the establishment of additional investment
subdivisions of Separate Account II investing in shares of Premier
Growth Equity Fund of GE Investments Funds, Inc. and Salomon Investors
Fund, Salomon Total Return Fund and Salomon Strategic Bond Fund of
Salomon Brothers variable Series Fund, Inc.(5)

(1)(e) Resolution of Board of Directors of GE Capital Life Assurance Company
of New York authorizing the change in name of investment subdivisions
investing in shares of GE Investments Funds Value Equity Fund to GE
Mid Cap Value Equity Fund.(5)

(2) Not Applicable

(3) Underwriting Agreement between GE Capital Life and Capital Brokerage
Corporation(2)
</TABLE>

C-1
<PAGE>

<TABLE>
<C> <S>
(3)(i) Dealer Sales Agreement(2)

(4)(i) Form of Policy(2)

(4)(ii) Endorsements to Policy

(a) Guarantee Account Rider(1)

(b) Trust Endorsement(1)

(d) Individual Retirement Annuity Endorsement(2)

(e) 403(b) Annuity Endorsement(2)

(f) Optional Death Benefit Rider(3)

(5) Form of Application(2)

(6)(i) Certificate of Incorporation of GE Capital Life(1)

(6)(ii) By-Laws of GE Capital Life(1)

(7) Not Applicable

(8)(i) Form of Participation Agreement regarding Alger American Fund(2)

(8)(ii) Form of Participation Agreement regarding Federated Insurance
Series(2)

(8)(iii) Form of Participation Agreement regarding GE Investments Funds,
Inc.(2)

(8)(iii)(a) Amendment to Participation Agreement between GE Investments
Funds, Inc. and GE Life & Annuity.(5)

(8)(iv) Form of Participation Agreement regarding Janus Aspen Series(2)

(8)(iv)(a) Amendment to Participation Agreement between Janus Aspen Series
and GE Life & Annuity(5)

(8)(v) Form of Participation Agreement regarding Oppenheimer Variable
Account Funds(2)

(8)(vi) Form of Participation Agreement regarding PBHG Insurance Series
Fund(2)

(8)(vii) Form of Participation Agreement regarding Variable Insurance
Products Fund(2)

(8)(viii) Form of Participation Agreement regarding Variable Insurance
Products Fund II(2)

(8)(ix)) Form of Participation Agreement regarding Variable Insurance
Products Fund III(2)

(8)(x) Form of Participation Agreement regarding Goldman Sachs Variable
Insurance Trust(2)

(8)(xi) Form of Participation Agreement regarding Salomon Brothers
Variable Series Fund(4)

(9) Opinion and Consent of Counsel(5)

(10)(i) Consent of Sutherland Asbill & Brennan LLP(5)

(10)(ii) Consent of Independent Auditors(5)

(11) Not Applicable

(12) Not Applicable

(13) Not Applicable

(14)(a) Power of Attorney(1)

(14)(b) Power of Attorney(5)
</TABLE>
- --------
(1) Incorporated herein by reference to initial filing of the Registration
Statement on Form N-4 File No. 333-39955, filed with the Securities and
Exchange Commission on September 10, 1997.
(2) Incorporated herein by reference to Pre-Effective Amendment No. 1 of the
Registration Statement on Form N-4 File No. 333-39955, filed with the
Securities and Exchange Commission on May 13, 1998.
(3) Incorporated herein by reference to Post-Effective Amendment No. 1 filing
of the Registration Statement on Form N-4 File No. 333-9955, filed with
the Securities and Exchange Commission on March 1, 1999.
(4) Incorporated herein by reference to Post-Effective Amendment No. 2 filing
of the Registration Statement on Form N-4 File No. 333-9955, filed with
the Securities and Exchange Commission on May 1, 1999.
(5) Incorporated herein.

C-2
<PAGE>

Item 25. Directors and Officers of GE Capital Life

<TABLE>
<CAPTION>
Name Address Positions and Offices with Depositor
---- ------- ------------------------------------
<S> <C> <C>
Pamela S. Schutz........ GE Financial Assurance Chairperson
6610 W. Broad Street
Richmond, VA 23230

Barry J. Grosman........ GE Capital Life of NY President, Chief Executive Officer &
125 Park Avenue, 6th floor Managing Director
New York, NY 10017-5529

Marshall S. Belkin...... 345 Kear Street Director
Yorktown Heights, NY 10598

Richard I. Byer......... Clark & Pope, Inc. Director
317 Madison Avenue
New York, NY 10017

Thomas W. Casey......... GE Financial Assurance Vice President, Chief Financial Officer
6604 W. Broad St. and Director
Richmond, VA 23230

Bernard M. Eiber........ 55 Northern Blvd. Director
Room 302
Great Neck, NY 11021

Jerry S. Handler........ Handro Properties Director
151 West 40th St.
New York, NY 10018

Gerald A. Kaufman....... 33 Walt Whitman Rd., Suite 233 Director
Huntington Station, NY 11746

Donita King............. GE Financial Assurance Senior Vice President, General Counsel &
6610 W. Broad Street Secretary
Richmond, VA 23230

Leon E. Roday........... GE Financial Assurance Director and Senior Vice President
6604 West Broad St.
Richmond, VA 23230

A. Louis Parker......... GEFA Benefit Services Director
4850 Street Road
Trevose, PA 19049

Ididore Sapir........... Granit Apartments at the Granit Director
Apt. 756, P.O. Box 657
Kernonkson, NY 12446

Thomas A. Skiff......... GE Financial Assurance Director
1650 Los Gamos Dr.
San Rafael, CA 94903

Steven A. Smith......... First Colony Life Director
700 Main Street
Lynchburg, VA 24505

Geoffrey S. Stiff....... GE Financial Assurance Director
6610 W. Broad St.
Richmond, VA 23230
</TABLE>

C-3
<PAGE>

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

Organizational Chart

---------------- General Electric
| Company
Other Subsidiaries |
(100%)
General Electric Capital
Services, Inc.
|
(100%)
General Electric Capital
Corporation
|
(100%)
GE Financial Assurance
Holdings, Inc.
|
(100%)
GNA Corporation
|
(100%)
General Electric Capital
Assurance Company
| -------
| |
(85.2%)
| Federal Home Life Phoenix
| Insurance Company Group
| Holdings,
| (11.7%) Inc.
| | (3.1%)
| | |
GE Life and Annuity | |
-------------------------------
Assurance Company

C-6
<PAGE>

Item 27. Number of Policyowners

As of April 15, 2000 we have 674 policyowners invested in this product.

Item 28. Indemnification

The Bylaws of GE Capital Life provides that:

(a) See Exhibit (6)(ii)--Article VIII

* * *

Rule 484 Undertaking

Section 722 of the Code of New York, in brief, allow a corporation to
indemnify any person made party to a proceeding because such person is or was
a director, officer, employee, or agent of the corporation, against liability
incurred in the proceeding if: (1) he conducted himself in good faith; and (2)
he believed that (a) in the case of conduct in his official capacity with the
corporation, his conduct was in its best interests; and (b) in all other
cases, his conduct was at least not opposed to the corporation's best
interests and (3) in the case of any criminal proceeding, he had no reasonable
cause to believe his conduct was unlawful. The termination of a proceeding by
judgment, order, settlement or conviction is not, of itself, determinative
that the director, officer, employee, or agent of the corporation did not meet
the standard of conduct described. A corporation may not indemnify a director,
officer, employee, or agent of the corporation in connection with a proceeding
by or in the right of the corporation, in which such person was adjudged
liable to the corporation, or in connection with any other proceeding charging
improper personal benefit to such person, whether or not involving action in
his official capacity, in which such person was adjudged liable on the basis
that personal benefit was improperly received by him. Indemnification
permitted under these sections of the Code of New York in connection with a
proceeding by or in the right of the corporation is limited to reasonable
expenses incurred in connection with the proceeding.

Article VIII, Section 1 of the By-Laws of GE Capital Life Assurance Company
of New York further provides that:

(a) The Corporation may indemnify any person, made, or threatened to be
made, a party to an action or proceeding other than one by or in the right of
the Corporation to procure a judgment in its favor, whether civil or criminal,
including an action by or in the right of any other Corporation of any type or
kind, domestic or foreign, or any partnership, joint venture, trust, employee
benefit plan or other enterprise, which any director or officer of the
Corporation served in any capacity at the request of the Corporation, by
reason of the fact that he, his testator or intestate, was a director or
officer of the Corporation, or served such other Corporation, partnership,
joint venture, trust, employee benefit plan, or other enterprise in any
capacity, against judgments, fines, amounts paid in settlement and reasonable
expenses, including fines, amounts paid in settlement and reasonable expenses,
including attorney's fees actually and necessarily incurred as a result of
such action or proceeding, or any appeal therein, if such director or officer
acted, in good faith, for a purpose which he reasonable believed to be in, or,
in the case of service for any other Corporation or any partnership, joint
venture, trust, employee benefit plan or other enterprise, not opposed to, the
best interests of the Corporation and, in criminal actions or proceedings, in
addition, had no reasonable cause to believe that his conduct was unlawful.

(b) The termination of any such civil or criminal action or proceeding by
judgment, settlement, conviction or upon a plea of nolo contendere, or its
equivalent, shall not in itself create a presumption that any such director or
officer did not act, in good faith, for a purpose which he reasonably believed
to be in, or, in the case of service for any other Corporation or any
partnership, joint venture, trust, employee benefit plan or other enterprise,
not opposed to, the best interests of the Corporation or that he had
reasonable cause to believe that his conduct was unlawful.

C-5
<PAGE>

(c) A Corporation may indemnify any person made, or threatened to be made, a
party to an action by or in the right of the Corporation to procure a judgment
in its favor by reason of the fact that he, his testator or intestate, is or
was a director or officer of the Corporation, or is or was serving at the
request of the Corporation as a director or officer of any other Corporation
of any type or kind, domestic or foreign, of any partnership, joint venture,
trust, employee benefit plan or other enterprise, against amounts paid in
settlement and reasonable expenses, including attorneys' fees, actually and
necessarily incurred by him in connection with the defense or settlement and
reasonable expenses, including attorneys' fees, actually and necessarily
incurred by him in connection with the defense or settlement of such action,
or in connection with an appeal therein, if such director or officer acted, in
good faith, for a purpose which he reasonably believed to be in or in the case
of service for other Corporation or any partnership, joint venture, trust,
employee benefit plan or other enterprise, not opposed to the best interests
of the Corporation, except that no indemnification under this paragraph shall
be made in respect of (1) a threatened action or a pending action which is
settled or otherwise disposed of or (2) any claim, issue or matter as to which
such person shall have been adjudged to be liable to the Corporation, unless
and only to the extent that the court in which the action was brought, or, if
no action was brought, any court of competent jurisdiction, determines upon
application that, in view of all the circumstances of the case, the person is
fairly and reasonably entitled to indemnity for such portion of the settlement
and expenses as the court deems proper.

(d) For the purpose of this section, the Corporation shall be deemed to have
requested a person to serve an employee benefit plan where the performance by
such person of his duties to the Corporation also imposes duties on, or
otherwise involves services by, such person to the plan or participants or
beneficiaries of the plan; excise taxes assessed on a person with respect to
an employee benefit plan pursuant to applicable law shall be considered fines;
and action taken or omitted by a person with respect to an employee benefit
plan in the performance of such person's duties for a purpose reasonably
believed by such person to be in the interest of the participants and
beneficiaries of the plan shall be deemed to be for a purpose which is not
opposed to the best interests of the Corporation.

Insofar as indemnification for liability arising under the Securities Act of
1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provision, or otherwise
under circumstances where the burden of proof set forth in Section 11(b) of
the Act has not been sustained, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question 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

(a) Capital Brokerage Corporation is the principal underwriter of the
Policies as defined in the Investment Company Act of 1940.

(b)

<TABLE>
<CAPTION>
Position and Offices
Name Address with Underwriter
---- ------- --------------------
<S> <C> <C>
Scott A. GE Financial Assurance President and Chief Executive Officer
Curtis......... 6610 W. Broad Street
Richmond, VA 23230

David J. Beck... GE Financial Assurance Senior Vice President & Chief
601 Union St., Ste. 5600 Investment Officer
Seattle, WA 98101
</TABLE>

C-6
<PAGE>

<TABLE>
<CAPTION>
Position and Offices
Name Address with Underwriter
---- ------- --------------------
<S> <C> <C>
Thomas W. Casey......... GE Financial Assurance Senior Vice President & Chief
6604 W. Broad St. Financial Officer
Richmond, VA 23230

Gary T. Prizzia......... GE Financial Assurance Treasurer
6604 W. Broad Street
Richmond, VA 23230

Victor C. Moses......... GE Financial Assurance Senior Vice President
601 Union St., Ste. 5600
Seattle, WA 98101

Geoffrey S. Stiff....... GE Financial Assurance Senior Vice President
6610 W. Broad St.
Richmond, VA 23230

Marycatherine Yeagley... GE Financial Assurance Senior Vice President
601 Union St., Ste. 5600
Seattle, WA 98101

Ward E. Bobitz.......... GE Financial Assurance Vice President & Assistant Secretary
6604 W. Broad St.
Richmond, VA 23230

Brenda Daglish.......... GE Financial Assurance Vice President & Assistant Treasurer
6604 W. Broad St.
Richmond, VA 23230

William E. Daner, Jr.... GE Financial Assurance Vice President, Counsel & Secretary
6610 W. Broad St.
Richmond, VA 23230

Stephen N. DeVos........ GE Financial Assurance Vice President & Investment Officer
6604 W. Broad Street
Richmond, VA 23230

Richard G. Fucci........ GE Financial Assurance Vice President & Controller
6604 W. Broad St.
Richmond, VA 23230

Scott A. Reeks.......... GE Financial Assurance Vice President & Assistant Treasurer
6630 W. Broad St.
Richmond, VA 23230
</TABLE>

Item 30. Location of Accounts and Records

All accounts and records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and the rules under it are maintained by GE
Capital Life at its administrative office.

Item 31. Management Services

All management Policies are discussed in Part A or Part B of this
Registration Statement.

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 payments under the variable annuity Policies may
be accepted.

C-7
<PAGE>

(b) Registrant undertakes that it will include either (1) as part of any
application to purchase a contract offered by the prospectus, a space that an
applicant can check to request a Statement of Additional Information, or (2) a
post card or similar written communication affixed to or included in the
Prospectus that the applicant can remove to send for a Statement of Additional
Information.

(c) Registrant 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 GE Capital Life at the address or
phone number listed in the Prospectus.

SECTION 403(b) REPRESENTATIONS

GE Capital Life represents that in connection with its offering of Policies
as funding vehicles for retirement plans meeting the requirements of Section
403(b) of the Internal Revenue Code of 1986, 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, and that paragraphs numbered (1) through (4)
of that letter will be complied with.

SECTION 26(e)(2)(A) REPRESENTATION

GE Capital Life hereby represents that the fees and charges deducted under
the Policy, in the aggregate, are reasonable in relation to the services
rendered, the expenses expected to be incurred, and the risks assumed by GE
Capital Life.

C-8
<PAGE>

SIGNATURES

As required by the Securities Act of 1933 and the Investment Company Act of
1940, the registrant, GE Capital Life Separate Account II, has duly caused
this registration statement to be signed on its behalf by the undersigned
thereunto duly authorized, and its seal to be hereunto affixed and attested,
in the County of Henrico in the Commonwealth of Virginia, on the 25th of April
2000.

GE Capital Life Separate Account II
(Registrant)

/s/ Patricia L. Dysart
By: _________________________________
Patricia L. Dysart
Assistant Vice President
GE Capital Life Assurance Company
of New York

GE Capital Life Assurance Company of
New York (Depositor)

/s/ Patricia L. Dysart
By: _________________________________
Patricia L. Dysart
Assistant Vice President
GE Capital Life Assurance Company
of New York

As required by the Securities Act of 1933, this registration statement has
been signed below by the following persons in the capacities and on the dates
indicated.

<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----

<S> <C> <C>
* Director, President, Chief 4/25/00
______________________________________ Executive Officer
Barry J. Grosman Managing Officer

* Director, Chairperson of 4/25/00
______________________________________ the Board
Pamela S. Schutz

* Senior Vice President and 4/25/00
______________________________________ General Counsel
Leon E. Roday

* Director 4/25/00
______________________________________
Richard I. Byer

* Vice President and Chief 4/25/00
______________________________________ Financial Officer
Thomas M. Casey

* Director 4/25/00
______________________________________
Thomas A. Skiff

* Director 4/25/00
______________________________________
Geoffrey S. Stiff

/s/ Patricia L. Dysart Assistant Vice President 4/25/00
______________________________________
Patricia L. Dysart
</TABLE>

*By /s/ PATRICIA L. DYSART, pursuant to Power of Attorney executed on April
25, 1999.

C-9
<PAGE>

EXHIBIT LIST

<TABLE>
<C> <S>
Exhibit (1)(b) Board Resolution of the Board of Directors establishing
thirty-seven Investment Subdivisions

Exhibit (1)(c) Board Resolution of the Board of Directors authorizing the
change in name of certain Investment Subdivisions

Exhibit (1)(d) Board Resolution of the Board of Directors establishing
four Investment Subdivisions

Exhibit (1)(e) Board Resolution of the Board of Directors authorizing a
name change of an existing Investment Subdivision

Exhibit (8)(iii)(a) Agreement to Participation Agreement between GE
Investments Funds, Inc. and GE Life & Annuity

Exhibit (8)(iv)(a) Amendments to Participation Agreement between Janus
Capital Corporation and GE Life & Annuity

Exhibit 9 Opinion and Consent of Counsel

Exhibit 10 (i) Consent of Sutherland Asbill & Brennan LLP

Exhibit 10 (ii) Consent of Independent Auditors

Exhibit (14)(b) Power of Attorney
</TABLE>

C-10

<PAGE>

Exhibit (1)(b) Board Resolution of the Board of Directors establishing
thirty-seven investment subdivisions

UNANIMOUS WRITTEN CONSENT OF
THE BOARD OF DIRECTORS OF
GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK

The undersigned, being the duly appointed Directors of GE Capital Life Assurance
Company of New York (the "Company"), hereby take the following action by
unanimous written consent in lieu of a meeting pursuant to Section 708 of the
New York Business Corporation Law:

WHEREAS, The Board of Directors of the Company, pursuant to the Provisions of
Section 4240 of the New York Insurance Law, adopted a resolution establishing GE
Capital Life Separate Account II (the "Separate Account") on April 1, 1996, and

WHEREAS, The Company wishes to establish thirty-seven investment subdivisions of
Separate Account II which will invest in shares of Alger American Small
Capitalization Portfolio and Alger American Growth Portfolio of the Alger
American Fund; VIP Equity-Income Portfolio, VIP Growth Portfolio and VIP
Overseas Portfolio of Fidelity Variable Insurance Products Fund; VIP II Asset
Manager Portfolio and VIP II Contrafund Portfolio of Fidelity Variable Insurance
Products Fund II; VIP III Growth & Income Portfolio and VIP III Growth
Opportunities Portfolio of Fidelity Variable Insurance Products Fund III;
Federated Utility Fund II, Federated High Income Bond Fund II and Federated
American Leaders Fund II of Federated Insurance Series; Balanced Portfolio,
Flexible Income Portfolio, Growth Portfolio, Aggressive Growth Portfolio,
Worldwide Growth Portfolio, International Growth Portfolio and Capital
Appreciation Portfolio of Janus Aspen Series; Money Market Fund, Income Fund,
S&P 500 Index Fund, Total Return Fund, International Equity Fund, Real Estate
Securities Fund, Global Income Fund, Value Equity Fund and U.S. Equity Fund of
GE Investments Funds, Inc.; Oppenheimer High Income Fund, Oppenheimer Bond Fund,
Oppenheimer Aggressive Growth Fund, Oppenheimer Growth Fund and Oppenheimer
Multiple Strategies Fund of Oppenheimer Variable Account Funds; PBHG Growth II
Portfolio and PBHG Large Cap Growth Portfolio of PBHG Insurance Series Fund,
Inc. Goldman Sachs Growth and Income Fund and Goldman Sachs Mid Cap Equity Fund
of Goldman Sachs Asset Management, Inc.

NOW, THEREFORE, BE IT RESOLVED, That the Board of Directors of the Company does
hereby establish and create thirty-seven investment subdivisions of the
aforementioned separate account. Each investment subdivision shall invest in
shares of a single mutual fund portfolio as set forth below:

INVESTMENT SUBDIVISIONS: TO BE INVESTED IN:

The Alger American Fund
AAF Small Capitalization Alger American Small Capitalization Portfolio
AAF Growth Alger American Growth Portfolio
Fidelity Variable Insurance Products Fund
FID-Equity-Income Equity-Income Portfolio
FID Growth Growth Portfolio
FID Overseas Overseas Portfolio
Fidelity Variable Insurance Products Fund II
FID Asset Manager Asset Manager Portfolio
FID Contrafund Contrafund Portfolio
Fidelity Variable Insurance Products Fund III
FID Growth & Income Growth & Income Portfolio
FID Growth Opportunities Growth Opportunities Portfolio
Federated Insurance Series
FED Utility II Federated Utility Fund II
FED High Income Bond II Federated High Income Bond Fund II
FED American Leaders II Federated American Leaders Fund II
<PAGE>

Janus Aspen Series
JAN Balanced Balanced Portfolio
JAN Flexible Income Flexible Income Portfolio
JAN Growth Growth Portfolio
JAN Aggressive Growth Aggressive Growth Portfolio
JAN Worldwide Growth Worldwide Growth Portfolio
JAN International Growth International Growth Portfolio
JAN Capital Appreciation Capital Appreciation Portfolio
GE Investments Funds Inc.
GEI Money Market Money Market Fund
GEI Income Income Fund
GEI S&P 500 Index S&P 500 Index Fund
GEI Total Return Total Return Fund
GEI International Equity International Equity Fund
GEI Real Estate Securities Real Estate Securities Fund
GEI Global Income Global Income Fund
GEI Value Equity Value Equity Fund
GEI U.S. Equity U.S. Equity Fund
Oppenheimer Variable Account Funds
OPP High Income Oppenheimer High Income Fund
OPP Bond Oppenheimer Bond Fund
OPP Aggressive Growth Oppenheimer Aggressive Growth Fund
OPP Growth Oppenheimer Growth Fund
OPP Multiple Strategies Oppenheimer Mulitiple Strategies Fund
PBHG Insurance Series Fund, Inc.
PIL Growth II Growth II Portfolio
PIL Large Cap Growth Large Cap Growth Portfolio
Goldman Sachs Variable Insurance Trust
GSF Mid-Cap Equity Mid-Cap Equity Fund
GSF Growth and Income Growth and Income Fund

FURTHER RESOLVED, That the President, or any Senior Vice President, and each of
them, with full power to act without the others, are hereby severally authorized
to execute whatever agreement or agreements may be necessary or appropriate to
enable such investments to be made, and the Board of Directors hereby ratifies
the action of any such officer in executing any such agreement prior to the date
of these resolutions; and

FURTHER RESOLVED, That the President or any Senior Vice President, and each of
them, with full power to act without the others, are hereby severally authorized
to execute and deliver such other documents and do such acts and things as each
or any of them may deem necessary or desirable to carry out the foregoing
resolutions and the intent and purposes thereof.

FURTHER RESOLVED, That these resolutions shall take effect as of June 20, 1998.

<PAGE>

Exhibit (1)(c) Board Resolution of the Board of Directors authorizing the
change in name of certain investment subdivisions

UNANIMOUS WRITTEN CONSENT OF
THE BOARD OF DIRECTORS OF
GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK

WHEREAS, Oppenheimer Variable Account Funds and Goldman Sachs Asset Management,
Inc. have changed the names of some of their portfolios, and it is necessary to
change the names of the corresponding Investment Subdivisions to reflect these
changes.

NOW, THEREFORE, BE IT RESOLVED, That Oppenheimer Growth Fund is now known as
Oppenheimer Capital Appreciation Fund/VA. Oppenheimer Aggressive Growth Fund is
now known as Oppenheimer Aggressive Growth Fund/VA. Oppenheimer Multiple
Strategies Fund is now known as Oppenheimer Multiple Strategies Fund/VA.
Oppenheimer High Income Fund is now known as Oppenheimer High Income Fund/VA.
Oppenheimer Bond Fund is now known as Oppenheimer Bond Fund/VA. Additionally,
Goldman-Sachs Mid Cap Equity Fund is now known as Goldman-Sachs Mid Cap Value
Fund.

Each investment subdivision invest in shares of a single mutual fund portfolio
as set forth below:

INVESTMENT SUBDIVISIONS: TO BE INVESTED IN:

Oppenheimer Variable Account Funds
OPP High Income /VA Oppenheimer High Income Fund/VA
OPP Bond/VA Oppenheimer Bond Fund/VA
OPP Aggressive Growth/VA Oppenheimer Aggressive Growth Fund/VA
OPP Capital Appreciation/VA Oppenheimer Capital Appreciation Fund/VA
OPP Multiple Strategies/VA Oppenheimer Multiple Strategies Fund/VA

Goldman Sachs Asset Management, Inc.
GSF MidCap Value Goldman Sachs MidCap Value Fund

FURTHER RESOLVED, That the President, or any Senior Vice President, and each of
them, with full power to act without the others, are hereby severally authorized
to execute whatever agreement or agreements may be necessary to enable such
investments to be made, and the Board of Directors hereby ratifies the action of
any such officer in executing any such agreement prior to the date of these
resolutions; and

FURTHER RESOLVED, That the President or any Senior Vice President, and each of
them, with full power to act without the others, are hereby severally authorized
to execute and deliver such other documents and do such acts and things as each
of any of item may deem necessary or desirable to carry out the foregoing
resolutions and the intent and purposes thereof.

FURTHER RESOLVED, That these resolutions shall take effect as of May 1, 1999.

<PAGE>

Exhibit (1)(d) Board Resolution of the Board of Directors establishing four
investment subdivisions.

UNANIMOUS WRITTEN CONSENT OF
THE BOARD OF DIRECTORS OF
GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK

WHEREAS, The Company wishes to establish four additional investment subdivisions
of Separate Account II which will invest in shares of Premier Growth Equity Fund
of GE Investments Funds, Inc. and Salomon Investors Fund, Salomon Total Return
Fund and Salomon Strategic Bond Fund of Salomon Brothers Variable Series Fund
Inc.

NOW, THEREFORE, BE IT RESOLVED, That the Board of Directors of the Company does
hereby establish and create four additional investment subdivisions of the
aforementioned separate account. Each of these investment subdivisions shall
invest in shares of a single mutual fund portfolio as set forth below:

INVESTMENT SUBDIVISIONS TO BE INVESTED IN

GE Investments Funds, Inc.
GEI Premier Growth Equity Premier Growth Equity Fund

Salomon Brothers Variable Series Fund, Inc
SAL Investors Salomon Brothers Investors Fund
SAL Total Return Salomon Total Return Fund
SAL Strategic Bond Salomon Strategic Bond Fund

FURTHER RESOLVED, That these resolutions shall take effect as of August 15,
1999.

<PAGE>

Exhibit (1)(e) Board Resolution authorizing the change in name of an existing
investment subdivision

UNANIMOUS WRITTEN CONSENT OF
THE BOARD OF DIRECTORS OF
GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK

WHEREAS, The Company wishes to establish that GE Investments Funds Value Equity
Fund is now known as GE Investments Funds Mid Cap Value and it is necessary to
change the name of the corresponding Investment Subdivision to reflect this
change.

NOW, THEREFORE, BE IT RESOLVED, That GE Investments Funds Value Equity Fund is
now known as GE Investments Funds Mid Cap Value Fund.

Each investment subdivision invest in shares of a single mutual fund portfolio
as set forth below:

INVESTMENT SUBDIVISIONS: TO BE INVESTED IN:

GE Investments Funds, Inc.
GEI Mid-Cap Value Equity Mid-Cap Value Equity Fund

FURTHER RESOLVED, That the President, or any Senior Vice President, and each of
them, with full power to act without the others, are hereby severally authorized
to execute whatever agreement or agreements may be necessary to enable such
investments to be made, and the Board of Directors hereby ratifies the action of
any such officer in executing any such agreement prior to the date of these
resolutions; and

FURTHER RESOLVED, That the President or any Senior Vice President, and each of
them, with full power to act without the others, are hereby severally authorized
to execute and deliver such other documents and do such acts and things as each
of any of item may deem necessary or desirable to carry out the foregoing
resolutions and the intent and purposes thereof.

FURTHER RESOLVED, That these resolutions shall take effect as of April 15, 2000.

<PAGE>

EXHIBIT (8)(iii)(a)

Schedule 3
PARTICIPATION AGREEMENT
By and Among
GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK
And
GE INVESTMENTS FUNDS, INC.
And
GE ASSET MANAGEMENT INCORPORATED
(formerly named GE INVESTMENT MANAGEMENT INCORPORATED)

(as amended April 25, 2000)

Name(s) of Portfolio

S&P 500 Index Fund
Money Market Fund
Total Return Fund
International Equity Fund
Real Estate Securities Fund
Global Income Fund
Mid-Cap Value Equity Fund (formerly named Value Equity Fund)
Income Fund
U.S. Equity Fund
Approved:_________________________
Title:
GE Asset Management Incorporated

Approved:_________________________
Title:
GE Investments Funds, Inc.

Approved:_________________________
Title:
GE Capital Life Assurance Company of New
York

<PAGE>

EXHIBIT (8)(iv)(a)

AMENDMENT TO FUND PARTICIPATION AGREEMENT

This Amendment to the Fund Participation Agreement ("Agreement") dated May
29, 1998, as amended, between Janus Aspen Series, an open-end management
investment company organized as a Delaware business trust (the "Trust"), and
GE Capital Life Assurance Company of New York, a New York life insurance
company (the "Company") is effective as of March 1, 2000.

AMENDMENT
---------

For good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree to amend the Agreement as follows:

1. If the Company elects to include any such materials on its Website or
other computer or electronic format, the company assumes sole responsibility for
maintaining such materials in the form provided by the Trust and for promptly
replacing such materials with all updates provided by the Trust.

2. The Agreement shall cover investment by the Company's Separate
Accounts in Institutional Shares and Service Shares, two separate classes of
shares issued by the Portfolios of Janus Aspen Series. All references to
"shares" in the Agreement shall refer to shares of either of these classes, as
applicable.

All other terms of the Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Amendment as of the date and year first above written.

GE CAPITAL LIFE ASSURANCE
COMPANY OF NEW YORK

By:____________________________
Name:
Title:

JANUS ASPEN SERIES

By:____________________________
Name: Bonnie M. Howe
Title: Vice President

<PAGE>

Exhibit 9

April 25, 2000

GE Capital Life Assurance Company of New York
125 Park Avenue, 6th Floor
New York, New York 10017-6529

Gentlemen:

With reference to Post-Effective Amendment No. 3 to Form N-4 (File Number
333-39955) filed by GE Capital Life Assurance Company of New York and GE Capital
Life Separate Account II with the Securities and Exchange Commission covering
flexible premium variable deferred annuity policies, I have examined such
documents and such law as I considered necessary and appropriate, and on the
basis of such examination, it is my opinion that:

1. GE Capital Life Assurance Company of New York is duly organized and validly
existing under the laws of the state of New York and has been duly
authorized to issue individual flexible premium variable deferred annuity
policies by the Bureau of Insurance of the State Corporation Commission of
New York.

2. GE Capital Life Separate Account II is a duly authorized and existing
separate account established pursuant to the provisions of Section
38.2-3113 of the Code of New York.

3. The flexible premium variable deferred annuity policies, when issued as
contemplated by said Form N-4 Registration Statement, will constitute
legal, validly issued and binding obligations of GE Capital Assurance
Company of New York.

I hereby consent to the use of this letter, or copy thereof, as an exhibit to
Post Effective Amendment No. 3 to the Registration Statement on Form N-4 (File
Number 333-39955) and the reference to me under the caption "Legal Matters" in
the Statement of Additional Information contained in said Post-Effective
Amendment.

Sincerely,

/s/ Patricia L. Dysart

Patricia L. Dysart
Assistant Vice President
Law Department

<PAGE>

Exhibit 10 (i) Consent of Sutherland Asbill & Brennan LLP

STEPHEN E. ROTH
DIRECT LINE: (202) 383-0158
Internet: [email protected]

May 1, 2000

Board of Directors
GE Capital Life Assurance Company
of New York
125 Park Avenue, 6th Floor
New York, New York 10017-5529

Re GE Capital Life Separate Account II
------------------------------------

Ladies and Gentlemen:

We hereby consent to the reference to our name under the caption "Legal
Matters" in the Statement of Additional Information filed as part of the
Post-Effective Amendment No. 3 to the Registration Statement on Form N-4 filed
by GE Capital Life Separate Account II for certain annuity policies
(File No. 333-39955). In giving this consent, we do not admit that we are in
the category of persons whose consent is required under Section 7 of the
Securities Act of 1933.

Very truly yours,

SUTHERLAND ASBILL & BRENNAN LLP

By: /s/ Stephen E. Roth
----------------------------
Stephen E. Roth

<PAGE>

Exhibit 10 (ii)

Consent of Independent Auditors

The Board of Directors
GE Capital Life Assurance Company of New York
and
Contractholders
GE Capital Life Separate Account II:

We consent to the use of our reports included herein and to the reference to
our firm under the heading "Experts" in the Statement of Additional Information.

Richmond, VA
April 24, 2000

/s/ KPMG LLP

<PAGE>

EXHIBIT 14(b)

GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK

POWER OF ATTORNEY

GE Capital Life Assurance Company of New York, a New York Corporation, (the
"Company") and each of its undersigned officers and directors, hereby nominate
and appoint Barry J. Grosman, Thomas W. Casey and Patricia L. Dysart, (with full
power to each of them to act alone) as his/her true and lawful attorney-in-fact
and agent, for him/her and in his/her name and place in any and all capacities,
to execute and sign all Registration Statements of the Company filed with the
Securities and Exchange Commission on form N-4 under the Securities Act of 1933
and the Investment Company Act of 1940 and on form S-6 under the Securities Act
of 1933 (including any and all pre- and post-effective amendments and any
supplements thereto), and to file with the Securities and Exchange Commission
all such Registration Statements, amendments and any supplements thereto, as
well as any and all exhibits and other documents necessary or desirable to such
Registration Statement, amendment or supplement, or the GE Capital Life Separate
Account II, granting to such attorneys and each of them, full power and
authority to do and perform each and every act necessary and/or appropriate as
fully and with all intents and purposes as the Company itself and the
undersigned officers and directors themselves might or could do.

IN WITNESS WHEREOF, GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK has caused
this power of attorney to be executed in its full name and by its President and
attested by its Secretary, and the undersigned officers and directors have each
executed such power of attorney, on this 15th day of April, 1999.

GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK

BY:
--------------------------------
BARRY J. Grosman
President, Chief Executive Officer and Director

ATTEST:

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