BANKERS LIFE INSURANCE CO OF NEW YORK SEPARATE ACCOUNT I, N-4/A, 1998-12-18

BANKERS LIFE INSURANCE CO OF NEW YORK SEPARATE ACCOUNT I
N-4/A, 1998-12-18

Previous: MUNIHOLDINGS INSURED FUND INC/NJ, N-30D, 1998-12-18

Next: STRUCTURED ASSET SECURITIES CORP SERIES 1998-C1, 8-K, 1998-12-18

<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 18, 1998

REGISTRATION NO. 333-49115
811-08725
------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20459
------------------------

FORM N-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]

PRE-EFFECTIVE AMENDMENT NO. 1 [X]
POST-EFFECTIVE AMENDMENT NO. [ ]

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

AMENDMENT NO. 1 [X]

BANKERS LIFE INSURANCE COMPANY OF NEW YORK SEPARATE ACCOUNT 1
(EXACT NAME OF REGISTRANT)

BANKERS LIFE INSURANCE COMPANY OF NEW YORK
(NAME OF DEPOSITOR)

65 FROEHLICH FARM BOULEVARD, WOODBURY, NEW YORK 11797
(ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES)

DEPOSITOR'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(516)364-5900

<TABLE>
<CAPTION>
NAME AND ADDRESS OF AGENT FOR SERVICE: COPY TO:
<S> <C>
JANIS B. FUNK, ESQ. STEPHEN E. ROTH, ESQ.
COUNSEL SUTHERLAND ASBILL & BRENNAN LLP
INDIANAPOLIS LIFE INSURANCE COMPANY 1275 PENNSYLVANIA AVENUE, N.W.
2960 NORTH MERIDIAN STREET WASHINGTON, D.C. 20004-2415
INDIANAPOLIS, INDIANA 46208
</TABLE>

APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:

As soon as practicable after effectiveness of the Registration Statement.

TITLE OF SECURITIES BEING REGISTERED:

Interests in a separate account under flexible premium deferred variable annuity
contracts.

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

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
SHALL DETERMINE.
<PAGE> 2

PROSPECTUS FOR THE
VISIONARY CHOICE

FLEXIBLE PREMIUM INDIVIDUAL DEFERRED VARIABLE ANNUITY CONTRACT
ALSO KNOWN AS
MODIFIED SINGLE PREMIUM INDIVIDUAL DEFERRED VARIABLE ANNUITY CONTRACT

<TABLE>
<S> <C>
Issued by Serviced by
BANKERS LIFE INSURANCE COMPANY OF NEW YORK BANKERS LIFE
65 Froehlich Farm Boulevard Annuity Service Center
Woodbury, New York 11797 P.O. Box 29105
Telephone: (516) 364-5900 Overland Park, KS 66201
(888) 227-5769
</TABLE>

This prospectus describes the VISIONARY CHOICE variable annuity, an
individual deferred variable annuity contract (the "Contract") that we offer. In
the Contract, we promise to pay the Annuitant a series of income payments in the
form of annuity payments starting on the Annuity Start Date you choose. (You
will be the Annuitant unless you state otherwise.) You will not pay taxes on any
money earned under this Contract until you begin to receive annuity payments or
receive any other payment. VISIONARY CHOICE may be available to you whether or
not you participate in a retirement plan that qualifies for deferral of federal
income taxes.

You may put your Premium Payments, as well as any money under your
Contract, into any of the 18 subdivisions of the Bankers Life Insurance Company
of New York Separate Account I. We call these subdivisions Variable Accounts.
You may also put your Premium Payments or any money you earn into the Fixed
Account. We guarantee that the money you place in the Fixed Account will earn
interest at a rate of at least 3% annually. We will invest the money you place
in a Variable Account solely in an investment portfolio of a mutual fund. The
value of your investments in the Variable Accounts will vary according to the
Portfolios' investment performance. Currently you may choose among 18 Portfolios
of 10 Funds:

The Alger American Fund:
MidCap Growth Portfolio and Small Capitalization Portfolio

Fidelity Variable Insurance Products ("VIP") Fund and Fidelity VIP Fund II:
Equity-Income Portfolio, Growth Portfolio, Money Market Portfolio, Asset Manager
Portfolio, Contrafund Portfolio, Index 500 Portfolio, Investment Grade Bond
Portfolio

OCC Accumulation Trust:
Managed Portfolio and Small Cap Portfolio

Royce Capital Fund:

Royce Micro-Cap Portfolio

SAFECO Resource Series Trust:
SAFECO Equity Portfolio and SAFECO Growth Portfolio

SoGen Variable Funds, Inc.:
SoGen Overseas Variable Portfolio

T. Rowe Price Fixed Income Series, Inc.:
Limited-Term Bond Portfolio

T. Rowe Price International Series, Inc.:
International Stock Portfolio

Van Eck Worldwide Insurance Trust:
Worldwide Hard Assets Portfolio
<PAGE> 3

The purchase of this Contract involves certain risks. Investment results
can vary both up and down and can even decrease the value of Premium Payments.
Therefore, you could lose all or part of the money you invest. You bear all
investment risks on the money you place in the Variable Accounts.

THIS PROSPECTUS MUST BE ACCOMPANIED BY A CURRENT PROSPECTUS FOR EACH OF THE
FUNDS.

This prospectus contains important information about the Contract and the
Separate Account that you should know before investing. The Statement of
Additional Information ("SAI") that has been filed with the Securities and
Exchange Commission contains more information. The SAI has the same date as this
prospectus and is legally a part of this prospectus. The table of contents for
the SAI is on page of this prospectus. You may obtain a free copy of the SAI
by writing to us at the address shown above or by calling 1-888-227-5769.

PLEASE READ THIS PROSPECTUS CAREFULLY AND KEEP IT FOR FUTURE REFERENCE.

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

Unlike bank and credit union accounts, Contract Value invested in the
Separate Account is not insured. Contract Value invested in the Separate Account
involves certain risks. You may lose your Premium Payments. Separate Account
Value is not deposited in or guaranteed by any bank or credit union and is not
guaranteed by any government agency.

The date of this prospectus is , 1998.

ii
<PAGE> 4

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
DEFINITIONS................................................. 2
FEE TABLE................................................... 5
SUMMARY OF THE VISIONARY CHOICE CONTRACT.................... 12
ABOUT BANKERS LIFE AND THE SEPARATE ACCOUNT................. 15
THE PORTFOLIOS.............................................. 16
THE PAY-IN PERIOD........................................... 20
TRANSFERS BETWEEN INVESTMENT OPTIONS........................ 22
FEES AND CHARGES............................................ 23
THE PAYOUT PERIOD........................................... 27
WITHDRAWAL OF CONTRACT VALUE................................ 29
CONTRACT LOANS.............................................. 30
DEATH BENEFITS.............................................. 31
THE FIXED ACCOUNT........................................... 33
HOW TO REVIEW INVESTMENT PERFORMANCE OF THE VARIABLE
ACCOUNTS.................................................. 35
VOTING RIGHTS............................................... 36
FEDERAL TAX MATTERS......................................... 37
OTHER INFORMATION........................................... 42
TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL
INFORMATION............................................... 44
</TABLE>

1
<PAGE> 5

DEFINITIONS

ACCUMULATION UNIT -- An accounting measure we use to calculate the value of a
Variable Account during the Pay-in Period.

ANNUITANT -- You are the Annuitant, unless you state otherwise in your
application. The Annuitant is the person or persons whose life (or lives)
determines the dollar amount of the annuity payments that we will pay under the
Contract. If the Annuitant dies before the Annuity Start Date, we will pay a
death benefit. The maximum number of joint annuitants is two. References to the
death of an Annuitant mean the death of the last surviving Annuitant. The
Annuitant named in the application may not be changed.

ANNUITY START DATE -- The date when the Annuitant will begin to receive annuity
payments. If you do not select a date, the Annuity Start Date is either the
Annuitant's age 70 or 10 years after the Date of Issue, whichever is later.
Different Annuity Start Dates apply if you own a Qualified Contract or a
Non-Qualified Contract.

ANNUITY UNIT -- An accounting measure we use to calculate the value of your
annuity payments if you choose to receive annuity payments from the Variable
Accounts.

BENEFICIARY -- The person you name to receive the death benefit if you or the
Annuitant dies before the Annuity Start Date.

BUSINESS DAY -- Each day on which the New York Stock Exchange is open for
business, except for the holidays listed in this prospectus under "Holidays" and
except for any day on which the Portfolio in which a Variable Account invests
does not value its shares.

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

CONTRACT ANNIVERSARY -- The same month and day as the Date of Issue in each
calendar year while the Contract is in force.

CONTRACT FEE -- During the Pay-in Period, we will deduct this charge from your
Contract Value at the end of each Contract quarter and on the date you fully
withdraw all value from the Contract. We use the Contract Fee to cover the cost
of providing certain administrative services related to the Contracts and the
Separate Account.

CONTRACT VALUE -- The total amount you have accumulated under the Contract. It
is the sum of the Separate Account Value and the Fixed Account Value.

CONTRACT YEAR -- A twelve-month period that we measure from the anniversary of
the Date of Issue. The first Contract Year begins on the Date of Issue.

DATE OF ISSUE -- The date we issue your Contract. It is shown on the
specifications page of the Contract and is the date on which the first Contract
Year begins.

DEATH BENEFIT -- The Death Benefit will equal the greater of: (a) the Contract
Value as of the date we receive due proof of the deceased's death and payment
instructions; or (b) the minimum Death Benefit on any Death Benefit Anniversary
before the date the death benefit is determined, plus any Premium Payments and
minus any withdrawals and charges incurred between such Death Benefit
Anniversary. Any partial withdrawal will result in a proportional reduction in
the minimum death benefit.

DEATH BENEFIT ANNIVERSARY -- Every third Contract Anniversary beginning on the
Date of Issue.

DUE PROOF OF DEATH -- Proof of death that we find satisfactory. Such proof may
be: (a) a certified copy of the death record; (b) a certified copy of a court
decree reciting a finding of death; (c)any other proof we find satisfactory.

FIXED ACCOUNT -- You may put all or a portion of your Net Premium Payments in,
and transfer Contract Value to and from, the Fixed Account. The assets
supporting the Fixed Account are held in the Company's General Account. The
Fixed Account provides guarantees of principal and interest. Special limits
apply to transfers of Contract Value to and from the Fixed Account. (See "Fixed
Account.")

2
<PAGE> 6

FIXED ACCOUNT CURRENT RATE -- The interest rate contained in a schedule of rates
we set from time to time. The rate of interest we will credit to the initial
Premium Payment, if allocated to the Fixed Account, is shown on the
specifications page of the Contract.

FIXED ACCOUNT VALUE -- The value of your Contract in the Fixed Account before
the Annuity Start Date.

FUNDS -- Each of (i) The Alger American Fund; (ii) Fidelity VIP Fund; (iii)
Fidelity VIP Fund II; (iv) OCC Accumulation Trust; (v) Royce Capital Fund; (vi)
SAFECO Resource Series Trust; (vii) SoGen Variable Funds, Inc.; (viii) T. Rowe
Price Fixed Income Series, Inc.; (ix) T. Rowe Price International Series, Inc.;
and (x) Van Eck Worldwide Insurance Trust. Each Variable Account invests in a
separate investment portfolio ("Portfolio") of a Fund. Each Fund is either an
open-end management investment company or a unit investment trust.

GENERAL ACCOUNT -- The account that contains all of our assets other than those
held in the separate accounts.

NET PREMIUM PAYMENT -- A Premium Payment minus any applicable premium tax.

NON-QUALIFIED CONTRACT -- A Contract that is not a "Qualified Contract."

OWNER ("YOU" OR "YOUR") -- The person(s) who owns the Contract and who is
entitled to exercise all rights and privileges provided in the Contract. The
term also includes any person designated as a Joint Owner. The maximum number of
Joint Owners is two. Joint Owners are not permitted under Qualified Contracts.

PAYEE -- The person or persons entitled to receive annuity payments. You may
name a "Successor Payee" to receive any guaranteed annuity payments after the
death of the sole surviving Payee.

PAY-IN PERIOD -- The period of time that begins when we issue your Contract, and
continues until the date you begin to receive annuity payments on the Annuity
Start Date. The Pay-in Period will also end if you fully withdraw your Contract
before the Annuity Start Date.

PAYOUT PERIOD -- The period of time during which you will receive in a steady
stream of annuity payments the money you earned under your Contract. It begins
on the Annuity Start Date.

PAYOUT OPTION -- The arrangement under which we make annuity payments to you.
You may choose to have your annuity payments made on a fixed, a variable, or a
combination payout basis.

PORTFOLIO -- The separate investment portfolios of the Funds. The Portfolios
currently offered through the Contract are listed on the front cover of this
prospectus.

PREMIUM PAYMENT YEAR -- The twelve-month period beginning on the date we receive
any Premium Payment. It is used to calculate the Withdrawal Charge if you choose
the Date of Premium Payment Withdrawal Charge Option.

QUALIFIED CONTRACT -- A Contract issued in connection with retirement plans that
qualify for special federal income tax treatment under Sections 401, 403(b),
408, or 408A of the Code.

SEC -- U.S. Securities and Exchange Commission.

SEPARATE ACCOUNT -- Bankers Life Insurance Company of New York Separate Account
I. It is not part of our General Account. The Separate Account is divided into
Variable Accounts, each of which invests solely in shares of a Portfolio.

SEPARATE ACCOUNT VALUE -- The value of the Contract in the Separate Account
before the Annuity Start Date.

SERVICE CENTER -- The office of USA Administration Services, Inc., an
administrator that provides administrative service for the Contracts. The
mailing address for the Service Center is P.O. Box 29105, Overland Park, KS
66201.

SURRENDER VALUE -- The Contract Value MINUS (1) any applicable Withdrawal
Charges; MINUS (2) any premium taxes not previously deducted; and MINUS (3) the
Contract Fee. For a 403(b) Qualified Contract, the outstanding loan amount, if
any, is also deducted from Contract Value.

3
<PAGE> 7

VARIABLE ACCOUNT -- A subdivision of the Separate Account. A Variable Account
invests solely in the shares of a designated Portfolio.

"WE," "US," "OUR" -- Bankers Life Insurance Company of New York, a New York
stock life insurance company.

WRITTEN REQUEST -- Your signed, written notice or request. We must receive your
Written Request (in a form we find satisfactory) at our Service Center.

4
<PAGE> 8

FEE TABLE

The following expense information assumes that you have invested your
entire Contract Value in the Separate Account.

CONTRACT OWNER TRANSACTION EXPENSES

<TABLE>
<S> <C>
Maximum Withdrawal Charge (as a percentage of Premium
Payments withdrawn(1)).................................... 7.0%
Transfer Fee(2) (No charge for first 12 transfers in a
Contract Year; thereafter, $25 fee per transfer).......... $ 0
Contract Fee ($7.50 per quarter, annualized)(3)............. $30
</TABLE>

SEPARATE ACCOUNT ANNUAL EXPENSES
(as a percentage of Separate Account Value)

<TABLE>
<S> <C>
Mortality and Expense Risk Charge........................... 1.25%
Administrative Expense Charge............................... 0.15%
Total Separate Account Annual Expenses................. 1.40%
</TABLE>

INVESTMENT PORTFOLIO ANNUAL EXPENSES
(as a percentage of average daily net assets of a Portfolio after expense
cap or reimbursement)

<TABLE>
<CAPTION>
TOTAL ANNUAL
OTHER EXPENSES EXPENSES (AFTER
MANAGEMENT FEES (AFTER WAIVERS AND
NAME OF PORTFOLIO (AFTER WAIVERS) REIMBURSEMENT) REIMBURSEMENT)
----------------- --------------- -------------- ---------------
<S> <C> <C> <C>
Alger American Fund
MidCap Growth Portfolio.......................... 0.80% 0.04% 0.84%
Small Capitalization Portfolio................... 0.85% 0.03% 0.88%
Fidelity VIP Fund
Equity Income Portfolio.......................... 0.51% 0.07% 0.58%
Growth Portfolio................................. 0.61% 0.08% 0.69%
Money Market Portfolio........................... 0.21% 0.09% 0.30%
Fidelity VIP Fund II
Asset Manager.................................... 0.64% 0.10% 0.74%
Contrafund Portfolio............................. 0.61% 0.13% 0.74%
Index 500 Portfolio(4)........................... 0.13% 0.15% 0.28%
Investment Grade Bond Portfolio.................. 0.45% 0.13% 0.58%
OCC Accumulation Trust
Managed Portfolio(5)............................. 0.80% 0.07% 0.87%
Small Cap Portfolio(5)........................... 0.80% 0.17% 0.97%
Royce Capital Fund
Royce Micro-Cap Portfolio(6)..................... 0.00% 1.35% 1.35%
SAFECO Resource Series Trust
SAFECO Equity Portfolio.......................... 0.73% 0.02% 0.75%
SAFECO Growth Portfolio.......................... 0.74% 0.03% 0.77%
SoGen Variable Funds, Inc.
SoGen Overseas Portfolio(7)...................... 0.00% 2.00% 2.00%
T. Rowe Price Fixed Income Series, Inc.
Limited-Term Bond Portfolio(8)................... 0.70% 0.00% 0.70%
T. Rowe Price International Series, Inc.
International Stock Portfolio(8)................. 1.05% 0.00% 1.05%
Van Eck Worldwide Insurance Trust
Worldwide Hard Assets Portfolio.................. 1.00% 0.17% 1.17%
</TABLE>

Premium taxes are not shown here, but may be charged by some states. (See
"Premium Taxes".)

5
<PAGE> 9

This fee table will help you in understand the costs and expenses that you
will pay directly or indirectly when you invest in the Contract. The table
reflects the actual charges and expenses for the Separate Account and the
Portfolios for the year ended December 31, 1997. For a more complete description
of these charges and expenses, see "Fees and Charges" in this prospectus and the
prospectus for each Portfolio that is attached to this prospectus.

(1) In any Contract Year after the first Contract Year, you may withdraw a
portion of your Contract Value without incurring a Withdrawal Charge. This
amount is called the Free Withdrawal Amount. The Free Withdrawal Amount is
10% of Contract Value each year, as determined at the beginning of the
Contract Year. (See "Fees and Charges -- Withdrawal Charge.")

The Contract also gives you a choice between two Withdrawal Charge options.
If you choose the DATE OF ISSUE WITHDRAWAL CHARGE OPTION, we will calculate
the Withdrawal Charge from the Date of Issue. Under this option, we will
deduct the Withdrawal Charge from all withdrawals of Premium Payments that
occur during the first nine Contract Years and that are greater than the
Free Withdrawal Amount. No Withdrawal Charge is deducted from full or
partial withdrawals that occur in Contract Years ten and later. For the
first six Contract Years, the Withdrawal Charge is 7% of the amount
withdrawn, decreasing to 6% in the seventh Contract Year, and declining by
2% for each subsequent Contract Year until it is zero in Contract Year ten.

If you choose the DATE OF PREMIUM PAYMENT WITHDRAWAL CHARGE OPTION, we will
calculate the Withdrawal Charge from the date you make a Premium Payment.
Under this option, we will deduct a Withdrawal Charge from all withdrawals
of Premium Payments that we have held for less than seven years and that
are greater than the Free Withdrawal Amount. Premium Payments withdrawn
during the first year after receipt by us are subject to a 7% Withdrawal
Charge, decreasing by 1% annually until it is zero in Premium Payment Year
eight. (See "Fees and Charges -- Withdrawal Charge.")

(2) We will not charge you a transfer fee on the first twelve transfers in a
Contract Year. We will charge a $25 fee for each transfer you make after
the twelfth during a Contract Year.

(3) We will not charge a Qualified Contract for the Contract Fee. We also
currently will not charge a Non-Qualified Contract for the Contract Fee
once the total Premium Payments you have paid equals $100,000.

(4) Total Annual Expenses for the Fidelity Index 500 Portfolio were reduced
from 0.28% to 0.24%, effective December 1, 1997.

(5) The Other Expenses of the OCC Accumulation Trust Portfolios as of December
31, 1997 are shown gross of certain expense offsets afforded the Portfolios
which effectively lowered overall custody expenses. The Total Annual
Portfolio Expenses of the Managed and Small Cap Portfolios are limited by
OpCap Advisors so that their respective annualized operating expenses (net
of any expense offsets) do not exceed 1.00% of their respective average
daily net assets. Without such limitations, and without giving effect to
any expense offsets, the Management Fees, Other Expenses and Total Annual
Portfolio Expenses incurred for the fiscal year ended December 31, 1997
would have been: 0.80%, 0.07% and 0.87%, respectively, for the Managed
Portfolio; and 0.80%, 0.17% and 0.97%, respectively, for the Small Cap
Portfolio.

(6) Royce & Associates, Inc., the investment adviser to the Royce Micro-Cap
Portfolio, has voluntarily committed to waive its management fees and
reimburse Other Expenses through December 31, 1999 to the extent necessary
to maintain Total Annual Expenses of the Portfolio at or below 1.35%.
Without such waiver and reimbursement, the Management Fee was 1.25% and
Total Annual Expenses were 7.32% for fiscal year 1997.

(7) Other Expenses for the SoGen Overseas Portfolio include a 0.25% charge for
12b-1 fees. The 12b-1 fee is imposed to enable the Portfolio to recover
certain sales expenses, including compensation to broker-dealers, the cost
of printing prospectuses, advertising costs and shareholder
servicing-related expenses for the Portfolio. Over a long period of time,
the total amount of 12b-1 fees paid may exceed the amount of sales charges
imposed by other portfolios. Under the terms of an investment advisory
agreement dated

6
<PAGE> 10

August 16, 1996, the SoGen Overseas Portfolio pays its investment adviser a
monthly advisory fee at an annual rate of 0.70% of the average daily net
assets of the Portfolio. For the period since inception through December
31, 1997, the advisor waived its investment advisory fee in its entirety
and reimbursed the Portfolio for all expenses in excess of 2.00% of average
daily net assets. Without such waiver and reimbursements, the Management
Fee was 0.75%, Other Expenses were 14.40%, and Total Annual Expenses were
15.15%.

(8) The Limited-Term Bond Portfolio pays T. Rowe Price an annual all-inclusive
fee of 0.70%, computed daily and paid monthly, based on its average daily
net assets. The International Stock Portfolio pays Rowe Price-Fleming
International, Inc. ("Price-Fleming") an annual all-inclusive fee of 1.05%,
computed daily and paid monthly, based on its average daily net assets.
These fees pay for investment management services and other operating costs
of the Portfolios.

7
<PAGE> 11

EXAMPLES

(NOTE: The examples shown below are entirely hypothetical. They are not
representations of past or future performance or expenses. Actual performance
and/or expenses may be more or less than shown.)

Examples 1 and 2 show expenses for Contracts with a DATE OF ISSUE
WITHDRAWAL CHARGE OPTION.

Examples: You would pay the following expenses on a $1,000 investment,
assuming a 5% annual return on assets and the changes and expenses listed on the
Fee Table above.

1. If you fully withdraw all Contract Value (or if you elect to
annuitize under a period certain option for a period of less than 10
years) at the end of the stated period:

<TABLE>
<CAPTION>
NAME OF PORTFOLIO 1 YEAR 3 YEARS
----------------- ------- -------
<S> <C> <C>
Alger American Fund
MidCap Growth Portfolio........................... $ 94.50 $143.44
Small Capitalization Portfolio.................... $ 94.92 $144.61
Fidelity VIP Fund
Equity-Income Portfolio........................... $ 91.77 $135.79
Growth Portfolio.................................. $ 92.92 $139.03
Money Market Portfolio............................ $ 88.83 $127.50
Fidelity VIP Fund II
Asset Manager Portfolio........................... $ 93.45 $140.50
Contrafund Portfolio.............................. $ 93.45 $140.50
Index 500 Portfolio............................... $ 88.62 $126.90
Investment Grade Bond Portfolio................... $ 91.77 $135.79
OCC Accumulation Trust
Managed Portfolio................................. $ 94.81 $144.32
Small Cap Portfolio............................... $ 95.86 $147.25
Royce Capital Fund
Royce Micro-Cap Portfolio......................... $ 99.85 $158.33
SAFECO Resource Series Trust
SAFECO Equity Portfolio........................... $ 93.55 $140.80
SAFECO Growth Portfolio........................... $ 93.76 $141.38
SoGen Variable Funds, Inc.
SoGen Overseas Variable Portfolio................. $106.67 $177.08
T. Rowe Price Fixed Income Series
Limited-Term Bond Portfolio....................... $ 93.03 $139.32
T. Rowe Price International Series
International Stock Portfolio..................... $ 96.70 $149.59
Van Eck Worldwide Insurance Trust
Worldwide Hard Assets Portfolio................... $ 97.96 $153.10
</TABLE>

8
<PAGE> 12

2. If you do not fully withdraw all Contract Value (or if you elect
to annuitize under a payout plan with a life contingency or under a
period certain option with a period certain of at least 10 years) at the
end of the stated time:

<TABLE>
<CAPTION>
NAME OF PORTFOLIO 1 YEAR 3 YEARS
----------------- ------ -------
<S> <C> <C>
Alger American Fund
MidCap Growth Portfolio............................ $24.50 $ 75.31
Small Capitalization Portfolio..................... $24.92 $ 76.57
Fidelity VIP Fund
Equity-Income Portfolio............................ $21.77 $ 67.09
Growth Portfolio................................... $22.92 $ 70.57
Money Market Portfolio............................. $18.83 $ 58.18
Fidelity VIP Fund II
Asset Manager Portfolio............................ $23.45 $ 72.15
Contrafund Portfolio............................... $23.45 $ 72.15
Index 500 Portfolio................................ $18.62 $ 57.55
Investment Grade Bond Portfolio.................... $21.77 $ 67.09
OCC Accumulation Trust
Managed Portfolio.................................. $24.81 $ 76.25
Small Cap Portfolio................................ $25.86 $ 79.40
Royce Capital Fund
Royce Micro-Cap Portfolio.......................... $29.85 $ 91.30
SAFECO Resource Series Trust
SAFECO Equity Portfolio............................ $23.55 $ 72.47
SAFECO Growth Portfolio............................ $23.76 $ 73.10
SoGen Variable Funds, Inc.
SoGen Overseas Variable Portfolio.................. $36.67 $111.43
T. Rowe Price Fixed Income Series
Limited-Term Bond Portfolio........................ $23.03 $ 70.89
T. Rowe Price International Series
International Stock Portfolio...................... $26.70 $ 81.91
Van Eck Worldwide Insurance Trust
Worldwide Hard Assets Portfolio.................... $27.96 $ 85.67
</TABLE>

9
<PAGE> 13

Examples 3-4 show examples for Contracts with a DATE OF PREMIUM PAYMENT
WITHDRAWAL OPTION.

Examples: You would pay the following expenses on a $1,000 investment,
assuming a 5% annual return on assets and the charges and expenses listed on the
Fee Table above:

3. If you fully withdraw all Contract Value (or if you elect to
annuitize under a period certain option for a period of less than 10
years) at the end of the stated time period:

<TABLE>
<CAPTION>
NAME OF PORTFOLIO 1 YEAR 3 YEARS
----------------- ------- -------
<S> <C> <C>
Alger American Fund
MidCap Growth Portfolio........................... $ 94.50 $123.97
Small Capitalization Portfolio.................... $ 94.92 $125.17
Fidelity VIP Fund
Equity-Income Portfolio........................... $ 91.77 $116.16
Growth Portfolio.................................. $ 92.92 $119.47
Money Market Portfolio............................ $ 88.83 $107.69
Fidelity VIP Fund II
Asset Manager Portfolio........................... $ 93.45 $120.97
Contrafund Portfolio.............................. $ 93.45 $120.97
Index 500 Portfolio............................... $ 88.62 $107.09
Investment Grade Bond Portfolio................... $ 91.77 $116.16
OCC Accumulation Trust
Managed Portfolio................................. $ 94.81 $124.87
Small Cap Portfolio............................... $ 95.86 $127.87
Royce Capital Fund
Royce Micro-Cap Portfolio......................... $ 99.85 $139.18
SAFECO Resource Series Trust
SAFECO Equity Portfolio........................... $ 93.55 $121.27
SAFECO Growth Portfolio........................... $ 93.76 $121.87
SoGen Variable Funds, Inc.
SoGen Overseas Variable Portfolio................. $106.67 $158.32
T. Rowe Price Fixed Income Series
Limited-Term Bond Portfolio....................... $ 93.03 $119.77
T. Rowe Price International Series
International Stock Portfolio..................... $ 96.70 $130.26
Van Eck Worldwide Insurance Trust
Worldwide Hard Assets Portfolio................... $ 97.96 $133.83
</TABLE>

10
<PAGE> 14

4. If you do not fully withdraw all Contract Value (or if you elect
to annuitize under a payout plan with a life contingency or under a
period certain option with a period certain of at least 10 years) at the
end of the stated time:

The examples provided above assume that no transfer charges or premium
taxes have been assessed. The examples reflect the annualized Contract Fee of
$30 assessed on an expected average Contract Value of $30,000. This translates
the Contract Fee into a .10% charge for the purposes of the examples based on a
$1,000 investment.

THE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN. THE ASSUMED
5% ANNUAL RATE OF RETURN IS HYPOTHETICAL AND SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE ANNUAL RETURNS, WHICH MAY BE GREATER OR LESS
THAN THIS ASSUMED RATE.

Because the Separate Account has not commenced operations as of the date of
this prospectus, no Condensed Financial Information is available for the
Separate Account.

11
<PAGE> 15

SUMMARY OF THE VISIONARY CHOICE CONTRACT

Purchasing Your Contract. The VISIONARY CHOICE Contract is an individual
deferred variable annuity we issue. You may purchase this Contract with $1,000
or more under most circumstances. We will not issue a Contract if you are older
than 85 on the Date of Issue.

The Contract provides a means for you to invest on a tax-deferred basis.
This means that you will not be taxed on earnings or appreciation in your
Contract until you withdraw your money. We may sell the Contract in connection
with retirement plans, some of which may qualify for special federal tax
treatment under the Code. (See "The Pay-In Period -- Issuing Your Contract.")

Cancellation -- The 10 Day Free-Look Period. You have the right to cancel
the Contract for any reason within 10 days after you receive it. You must return
the contract to our Service Center along with your Written Request to cancel the
Contract. We will refund to you an amount equal to the sum of: (i) the
difference between the Premium Payments you paid and the amounts allocated to
the Variable Accounts and the Fixed Account; and (ii) the Contract Value as of
the postmark date on your request. You bear the investment risk for Premium
Payments allocated to the Variable Accounts from the beginning of the Free-Look
Period until the date you mail your request. You must properly address your
request to the Service Center, attach the correct postage, and have your request
postmarked within the 10 day free look period to receive your refund. (See "The
Pay-In Period -- Cancellation -- The 10-Day Free-Look Period.")

Premium Payments. A Premium Payment is the money you pay us to buy the
Visionary Choice Contract. The Contract generally gives you the flexibility to
make Premium Payments as often as you like, although you may choose to make only
a single Premium Payment. After you buy the Contract, you may send us Premium
Payments of $1,000 or more at any time during the Pay-in Period, so long as they
do not exceed two times the amount of your initial Premium Payment in any year.
We generally will not accept total Premium Payments in excess of $250,000. We
reserve the right to waive these limitations. (See "Premium Payments.")

Designating Your Investment Options. When you purchase your Contract, we
will ask you to instruct us, in writing, on how to allocate your Premium
Payments. You may place your Premium Payments in one or more Variable Accounts
and/or the Fixed Account, subject to certain restrictions. (See "The Pay-In
Period.")

Transfers. During the Pay-in Period, you may transfer your Contract Value
from the Variable Accounts and the Fixed Account to other Variable Account(s)
and the Fixed Account, subject to certain restrictions. (See "Transfers Between
Investment Options.")

Transfers to the Fixed Account must be at least $1,000. During the Pay-in
Period, you may transfer up to 25% of the Fixed Account Value (as determined at
the beginning of the Contract Year) from the Fixed Account to one or more of the
Variable Accounts in any Contract Year. We do not charge a fee for transfers
from the Fixed Account to one or more Variable Accounts, nor do we consider such
transfers a transfer for purposes of assessing a transfer charge. (See
"Transfers Between Investment Options.")

Once you begin to receive annuity payments, you may make one transfer
between the Variable Accounts each Contract Year. (See "The Payout Period.")

Partial Withdrawals. During the Pay-in Period, you may withdraw part of
your Contract Value by sending a Written Request to the Service Center. The
amount of your request must be at least $250. If the Contract Value remaining
after your partial withdrawal is less than $1,000, we reserve the right to pay
you the Surrender Value in a lump sum. Amounts you withdraw may be subject to a
Withdrawal Charge, depending the Withdrawal Charge Option you chose at the time
of purchase. In any Contract Year after the first Contract Year, you may
withdraw a portion of your Contract Value without incurring a Withdrawal Charge,
called the Free Withdrawal Amount. (See "Fees and Charges -- Withdrawal
Charge.")

A partial withdrawal will reduce the minimum Death Benefit by the ratio of
the amount withdrawn to the Contract Value immediately prior to such withdrawal.
(See "Death Benefit.")

12
<PAGE> 16

The Federal tax laws may impose income taxes and tax penalties upon, and in
some cases prohibit, certain premature withdrawals from the Contract before or
after the Annuity Start Date. (See "Federal Tax Matters.")

Full Withdrawal. During the Pay-in Period, you may cancel the Contract and
receive its Surrender Value by sending us a Written Request. (See "Withdrawal of
Contract Value.") As with partial withdrawals, Federal tax laws may impose
income taxes and tax penalties upon, and in some cases prohibit, certain
premature withdrawals from the Contract before or after the Annuity Start Date.
(See "Federal Tax Matters.")

Death Benefit. If the Annuitant dies before the Annuity Start Date, the
Beneficiary will receive a Death Benefit. The Death Benefit will be determined
as of the date we receive due proof of the deceased's death and payment
instructions. The Death Benefit will be the greater of:

(1) the Contract Value as of the date the Death Benefit is determined;
or

(2) the minimum Death Benefit on any Death Benefit Anniversary
preceding the date the Death Benefit is determined, adjusted for any
Premium Payments received, partial withdrawals taken and charges incurred
between such Death Benefit Anniversary and the date the Death Benefit is
determined;

LESS any applicable premium taxes not previously deducted.

The minimum Death Benefit is initially set on the Date of Issue, and equals
the Premium Payments. It will be reset on the first Death Benefit Anniversary
and equals the greater of: (a) Contract Value on such Death Benefit Anniversary;
or (b) the minimum Death Benefit on the previous Death Benefit Anniversary plus
any Premium Payments, and minus any partial withdrawal and charges, incurred
since the previous Death Benefit Anniversary. Partial withdrawals will result in
a proportional reduction in the minimum Death Benefit by the ratio of the amount
withdrawn to the Contract Value immediately prior to such withdrawal. Once
reset, this value will never decrease unless partial withdrawals are made.

Age Limitation on Death Benefit Provision: If the Annuitant dies at or
after age 75 (or ten years after the Date of Issue, whichever is later) but
before the Annuity Start Date, the Death Benefit under either Death Benefit
option will equal Contract Value less any applicable premium taxes not yet
deducted, as of the date we receive due proof of death and payment instructions.
(See "Death Benefits.")

FEES AND CHARGES

The following charges and deductions are assessed under the Contract:

Withdrawal Charge. We will deduct a Withdrawal Charge if you withdraw all
or part of your Contract Value during certain time periods. The amount of the
Withdrawal Charge depends on the Withdrawal Charge Option you choose at the time
you purchase the Contract. We do not assess a Withdrawal Charge in the event the
Contract terminates due to your death or the Annuitant's death, or if you decide
to begin to receive annuity payments under an annuity payout plan with a life
contingency or an annuity payout plan with at least 6 years of guaranteed
payments.

You may choose between two Withdrawal Charge Options. If you choose the
DATE OF ISSUE WITHDRAWAL CHARGE OPTION, we will calculate the Withdrawal Charge
from the Date of Issue. We will deduct the Withdrawal Charge from all
withdrawals of Premium Payments that: (1) are greater than the Free Withdrawal
Amount, and (2) that occur during the first nine Contract Years. Under this
option, we will not deduct a Withdrawal Charge from full or partial withdrawals
that occur in Contract Years ten and later. For the first six Contract Years,
the Withdrawal Charge is 7% of the amount withdrawn that exceeds the Free
Withdrawal Amount, decreasing to 6% in the seventh Contract Year, and declining
by 2% for each subsequent Contract Year until it is zero in Contract Year ten.

If you choose the DATE OF PREMIUM PAYMENT WITHDRAWAL CHARGE OPTION, we will
calculate the Withdrawal Charge from the date you make a Premium Payment and
deduct a Withdrawal Charge from all withdrawals of Premium Payments that we have
held for less than seven years and that are greater than the

13
<PAGE> 17

Free Withdrawal Amount. Premium Payments in excess of the Free Withdrawal Amount
that are withdrawn during the first year after payment are subject to a 7%
Withdrawal Charge, decreasing by 1% annually, until it is zero in Premium
Payment Year 8.

Under either option, for purposes of calculating the Withdrawal Charge, we
will consider withdrawals to come first from Premium Payments and then from
earnings. In addition, we will consider the money that has been held the longest
in the Contract to be the first money withdrawn. This is called the "first in,
first out" method of accounting or "FIFO." (See "Fees and Charges.")

In any Contract Year after the first Contract Year, you may withdraw a
portion of your Contract Value without incurring a Withdrawal Charge. This
amount is called the Free Withdrawal Amount. The Free Withdrawal Amount is 10%
of Contract Value each year, as determined at the beginning of the Contract
Year. (See "Fees and Charges -- Withdrawal Charge.")

Contract Fee. At the end of each Contract quarter (and on the date of full
withdrawal from the Contract) during the Pay-in Period, we will deduct a
quarterly Contract Fee of $7.50 from the Contract Value. Currently we waive the
Contract Fee for Qualified Contracts. We also do not charge the Contract Fee if
the Contract is a Non-Qualified Contract whose cumulative Premium Payments on
the date the Contract Fee is charged are equal to or greater than $100,000. We
reserve the right to modify this waiver upon 30 days written notice to you. We
do not charge a Contract Fee after annuity payments have begun. (See "Fees and
Charges -- Contract Fee.")

Transfer Fee. During the Pay-in Period, you may make 12 transfers each
Contract Year at no charge. We will impose a transfer fee of $25 for the
thirteenth and each subsequent transfer you make during a Contract Year before
the Annuity Start Date. (See "Fees and Charges -- Transfer Fee.")

Mortality and Expense Risk Charge. We will deduct a daily mortality and
expense risk charge as compensation for our assuming certain mortality and
expense risks. We deduct the charge from the assets of the Separate Account at a
rate of 0.003404% per day. This is equal to an annual rate of 1.25%
(approximately 0.90% for mortality risk and 0.35% for expense risks). We will
continue to assess this charge after the Annuity Start Date if you select
variable annuity payments. (See "Fees and Charges -- Mortality and Expense Risk
Charge.")

Asset-Based Administrative Charge. We will deduct a daily administrative
charge as compensation for certain expenses we incur in administering the
Contract. We deduct the charge from the assets of each Variable Account at an
annual rate of 0.15%. We will continue to assess this charge after you begin to
receive annuity payments if you choose to receive variable annuity payments.
(See "Fees and Charges -- Asset-Based Administrative Charge.")

Premium Taxes. Various states and other governmental entities charge a
premium tax on annuity contracts issued by insurance companies. Premium tax
rates currently range up to 3.5%, depending on the state. Tax rates are subject
to change from time to time by legislative and other governmental action. In
addition, other governmental units within a state may levy such taxes. We are
responsible for the payment of these taxes and, if necessary, we will make a
deduction from your Contract either: (a) from Premium Payments as we receive
them, (b) from Contract Value upon partial or full withdrawal, (c) when annuity
payments begin, or (d) upon payment of a Death Benefit. (See "Fees and
Charges -- Premium Taxes.")

Investment Advisory Fees and Other Expenses of the Funds. Each Portfolio
pays investment management charges to its investment adviser based on a
percentage of the Portfolio's average daily net assets. These advisory fees and
other Portfolio charges and expenses are fully described in the accompanying
prospectuses for the Portfolios. These charges are indirectly passed on to you.
In addition, the SoGen Overseas Portfolio deducts a 12b-1 fee from its Portfolio
assets at a maximum annual rate of 0.25% of the average daily value of the
Portfolio's net assets. The 12b-1 fee may be used to reimburse us for certain
administrative and distribution support services we provide to the Overseas
Portfolio.

14
<PAGE> 18

ANNUITY PROVISIONS

Payout Options. Under the Contract, you may choose to receive regular
annuity payments under one of several available payout plans. You may also
choose the month and year on which those payments are to begin. (This is the
Annuity Start Date.) On the Annuity Start Date, we will use the Contract Value
(adjusted as described below) to calculate the amount of your annuity payments
under the payment plan you choose, unless you choose to receive the Surrender
Value in a lump sum. Adjusted Contract Value is Contract Value, less applicable
premium tax not yet deducted, less the quarterly Contract Fee, and, for an
installment income annuity payout plan with a payout period of less than 6
years, less any applicable Withdrawal Charge. (See "Payout Period.")

FEDERAL TAX STATUS

Generally, a distribution (including a full or partial withdrawal or Death
Benefit payment) may be taxed. In certain circumstances, a 10% penalty tax may
apply. For a further discussion of the federal tax status of variable annuity
contracts, see "Federal Tax Status."

ABOUT BANKERS LIFE AND THE SEPARATE ACCOUNT

BANKERS LIFE INSURANCE COMPANY OF NEW YORK

Bankers Life Insurance Company of New York, formerly known as The Gotham
Life Insurance Company of New York, is a stock life insurance company
incorporated under the laws of the State of New York on April 7, 1958. We
changed our name to "Bankers Life Insurance Company of New York" on June 1,
1994. We principally sell life insurance and annuities. Our address is 65
Froehlich Farm Boulevard, Woodbury, New York 11797.

On July 26, 1995, we became a wholly-owned subsidiary of Indianapolis Life
Insurance Company. Indianapolis Life Insurance Company is a mutual life
insurance company chartered under Indiana law in 1905 with assets as of December
31, 1997 which exceeded $1.702 billion.

At the end of 1997, American United Life Insurance Company ("AUL") and
Indianapolis Life Insurance Company took preliminary steps toward an
affiliation. At that time, AUL invested $8,910,000 in Indianapolis Life Group
and on March 30, 1998 AUL invested an additional $18,090,000. As a result of
this investment and related transactions, it is intended by both parties that
Indianapolis Life Insurance Company will retain ownership of 75% of the stock of
Indianapolis Life Group and AUL will own the remaining 25% of the Indianapolis
Life Group stock. The Agreement to Affiliate does contain provisions which would
allow AUL to invest additional amounts in Indianapolis Life Group, and
potentially to own up to 49.9% of the outstanding Indianapolis Life Group stock.
As of the date of this prospectus, there is no current intention for additional
investments by AUL.

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
insurance officials in New York. The forms for the Contract described in this
prospectus are filed with and approved by insurance officials in New York.

BANKERS LIFE INSURANCE COMPANY OF NEW YORK SEPARATE ACCOUNT I

We established the Separate Account under New York insurance law on
September 20, 1995. The Separate Account will receive and invest Net Premium
Payments made under the Contracts. In addition, the Separate Account may receive
and invest Net Premium Payments for certain other variable annuity contracts we
may issue in the future.

The assets in the Separate Account are our property, but they are held
separately from our other assets. Section 4240 of the New York Insurance Law
provides that the assets of the Separate Account are not chargeable with the
liabilities arising out of any other business that we may conduct (except to the
extent that the assets in the Separate Account exceed the reserves and other
liabilities of the Separate Account) if and to

15
<PAGE> 19

the extent so provided in the applicable agreements and the Contract so
provides. The assets of the Separate Account are available to cover our general
liabilities only to the extent that the Separate Account's assets exceed its
liabilities arising under the Contracts and any other contracts supported by the
Separate Account. We have the right, subject to authorization from the
Superintendent of Insurance of the State of New York, to transfer to the general
account any assets of the Separate Account which are in excess of reserves and
other contract liabilities. All obligations arising under the Contracts are our
general corporate obligations. Income, gains and losses, whether or not
realized, from assets allocated to the Separate Account shall, in accordance
with applicable agreements, be credited to or charged against the Separate
Account without regard to other income, gains or losses of any other separate
account or of the Company.

The Separate Account currently is divided into eighteen Variable Accounts
that are available for investment, but may, in the future, include additional
Variable Accounts. Each Variable Account invests exclusively in shares of a
single corresponding investment Portfolio of a Fund. The income, gains and
losses, whether or not realized, from the assets allocated to each Variable
Account are credited to or charged against that Variable Account without regard
to income, gains or losses from any other Variable Account.

The Separate Account has been registered with the SEC as a unit investment
trust under the Investment Company Act of 1940 (the "1940 Act") and 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 or of us by the SEC. The Separate
Account is also subject to the laws of the State of New York which regulate the
operations of insurance companies domiciled in New York.

THE PORTFOLIOS

Each Variable Account of the Separate Account invests exclusively in shares
of a designated Portfolio of a series-type mutual fund ("Fund"). Shares of each
Portfolio are purchased and redeemed at net asset value, without a sales charge.
Each Fund currently available under the Contract is registered with the SEC
under the the 1940 Act as an open-end, management investment company. Such
registration does not involve supervision of the management or investment
practices or policies of the companies or their funds by the SEC.

The assets of each Portfolio of each Fund are separate from the assets of
that Fund's other Portfolios, and each Portfolio has separate investment
objectives and policies. As a result, each Portfolio operates as a separate
investment Portfolio and the income or losses of one Portfolio has no effect on
the investment performance of any other Portfolio.

Each of the Funds is managed by an investment adviser registered with the
SEC under the Investment Advisers Act of 1940, as amended. Each investment
adviser is responsible for the selection of the investments of the Portfolio.
These investments must be consistent with the investment objective, policies and
restrictions of that Portfolio.

In addition, 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.

The investment objective of each Portfolio is summarized below. THERE IS NO
ASSURANCE THAT ANY PORTFOLIO WILL ACHIEVE ITS STATED OBJECTIVES. More detailed
information, including a description of risks, fees and expenses of each
Portfolio, may be found in the prospectuses for the Funds which are attached to
this prospectus.

CERTAIN PORTFOLIOS HAVE SIMILAR INVESTMENT OBJECTIVES AND/OR POLICIES. YOU
SHOULD READ THE PROSPECTUSES FOR THE PORTFOLIOS CAREFULLY BEFORE YOU INVEST.

16
<PAGE> 20

THE ALGER AMERICAN FUND

The MidCap Growth Portfolio and the Small Capitalization Portfolio of The
Alger American Fund ("The Alger Fund") are available for investment under the
Contract. The investment objective of each Portfolio is:

MIDCAP GROWTH PORTFOLIO -- seeks to obtain long-term capital
appreciation. Except during temporary defensive periods, the Portfolio
invests at least 65% of its total assets in equity securities of companies
that, at the time of purchase, have total market capitalization within the
range of companies included in the S&P MidCap 400 Index, updated quarterly.
The S&P MidCap 400 Index is designed to track the performance of medium
capitalization companies. As of March 31, 1998, the range of market
capitalization of these companies was $210 million to $14.3 billion.

SMALL CAPITALIZATION PORTFOLIO -- seeks to obtain long-term capital
appreciation. Except during temporary defensive periods, the Portfolio
invests at least 65% of its total assets in equity securities of companies
that, at the time of purchase, have total market capitalization within the
range of companies included in the Russell 2000 Growth Index ("Russell
Index") or the S&P SmallCap 600 Index, updated quarterly. Both indexes are
broad indices of small capitalization stocks. As of March 31, 1998, the
range of market capitalization of the companies in the Russell Index was
$20 million to $4.25 billion; the range of capitalization of the companies
in the S&P SmallCap 600 Index at that date was $31 million to $3.7 billion.

Fred Alger Management, Inc. ("Alger Management") serves as investment
adviser for the MidCap Growth and Small Capitalization Portfolios of The Alger
American Fund. Fred Alger & Company, Incorporated, an affiliate of Alger
Management, will serve as the Portfolios' broker in effecting substantially all
of the portfolio transactions on security exchanges.

FIDELITY VARIABLE INSURANCE PRODUCTS FUND AND FIDELITY VARIABLE INSURANCE
PRODUCTS FUND II

The Equity-Income Portfolio, the Growth Portfolio and the Money Market
Portfolio of Fidelity's Variable Insurance Products Fund ("VIP Fund"), as well
as the Asset Manager Portfolio, the Contrafund Portfolio, the Index 500
Portfolio and the Investment Grade Bond Portfolio of the Variable Insurance
Products Fund II ("VIP Fund II") are available for investment under the
Contract. The investment objective of each Portfolio is:

EQUITY-INCOME PORTFOLIO -- seeks reasonable income by investing
primarily in income-producing equity securities.

GROWTH PORTFOLIO -- seeks to achieve capital appreciation by investing
in common stocks and securities convertible into common stock of companies
that the adviser believes have above-average growth potential. The
Portfolio, however, is not restricted to any one type of security and may
pursue capital appreciation through the purchase of bonds and preferred
stocks.

MONEY MARKET PORTFOLIO -- seeks to earn a high level of current income
while maintaining a stable $1.00 share price by investing in high-quality,
short-term money market securities of different types.

ASSET MANAGER PORTFOLIO -- seeks to obtain high total return with
reduced risk over the long-term by allocating its assets among stocks,
bonds, short-term and other instruments of U.S. and foreign issuers.

CONTRAFUND PORTFOLIO -- seeks capital appreciation by investing in
companies that the adviser believes to be undervalued due to an overly
pessimistic appraisal by the public.

INDEX 500 PORTFOLIO -- seeks to match the total return of the S&P 500
while keeping expenses low. The adviser normally invests at least 80% (65%
if Portfolio assets are below $20 million) of the Portfolio's assets in
equity securities of companies that compose the S&P 500.

INVESTMENT GRADE BOND PORTFOLIO -- seeks high current income by
investing in fixed-income obligations of all types.

17
<PAGE> 21

The Portfolios of the VIP Fund and the VIP Fund II are managed by Fidelity
Management & Research Company ("FMR"). On behalf of the Money Market Portfolio,
FMR has entered in a subadvisory agreement with FMR Texas, Inc., pursuant to
which FMR Texas, Inc. has primary responsibility for providing investment
management services to the Portfolio. On behalf of the Asset Manager Portfolio
and the Contrafund Portfolio, FMR has entered into subadvisory agreements with
Fidelity Investment Management and Research (U.K.) Inc. ("FMR (U.K.)") and
Fidelity Management and Research (Far East) Inc. ("FMR Far East"), pursuant to
which those entities provide research and investment recommendations with
respect to companies based outside the United States. FMR (U.K.) focuses
primarily on companies based in Europe, while FMR Far East focuses primarily on
companies based in Asia and the Pacific Basin.

OCC ACCUMULATION TRUST

The Managed Portfolio and the Small Cap Portfolio of the OCC Accumulation
Trust ("OCC Trust") are available for investment under the Contract. The
investment objective of each Portfolio is:

MANAGED PORTFOLIO -- seeks growth of capital over time through
investment in a portfolio consisting of common stocks, bonds and cash
equivalents, the percentages of which will vary based on management's
assessments of relative investment values.

SMALL CAP PORTFOLIO -- seeks capital appreciation through investment
in a diversified portfolio of equity securities of companies with market
capitalizations of under $1 billion.

The OCC Trust receives investment advice with respect to each of its
Portfolios from OpCap Advisors, a subsidiary of Oppenheimer Capital which is a
subsidiary of Oppenheimer Financial Corp.

ROYCE CAPITAL FUND

The Royce Micro-Cap Portfolio of the Royce Capital Fund is available for
investment under the Contract and has the following investment objective:

ROYCE MICRO-CAP PORTFOLIO -- seeks long-term capital appreciation,
primarily through investments in common stocks and convertible securities
of small and micro-cap companies. Production of income is incidental to
this objective.

Royce & Associates, Inc. serves as the investment adviser to the Portfolio.

SAFECO RESOURCE SERIES TRUST

The SAFECO Equity Portfolio and the SAFECO Growth Portfolio of the SAFECO
Resource Series Trust are available for investment under the Contract. The
investment objective of each Portfolios is:

SAFECO EQUITY PORTFOLIO -- seeks long-term growth of capital and
reasonable current income. The Equity Portfolio ordinarily invests
principally in common stocks or securities convertible into common stocks.

SAFECO GROWTH PORTFOLIO -- seeks growth of capital and the increased
income that ordinarily follows from such growth. The Growth Portfolio
ordinarily invests a preponderance of its assets in common stock selected
for potential appreciation.

Each Portfolio is managed by SAFECO Asset Management Company.

SOGEN VARIABLE FUNDS, INC.

The SoGen Overseas Variable Portfolio of the SoGen Variable Funds, Inc. is
available for investment under the Contract and has the following investment
objective:

SOGEN OVERSEAS VARIABLE PORTFOLIO -- seeks long-term growth of capital
by investing primarily in securities of small and medium size non-U.S.
companies. It particularly seeks companies that have growth potential,
financial strength and stability, strong management and fundamental value.
The

18
<PAGE> 22

Portfolio may invest in securities traded in mature markets (for example,
Japan, Canada and the United Kingdom) and in emerging markets (Mexico and
Indonesia, for example). The Portfolio may invest up to 20% of its total
assets in debt securities, that may include lower-rated securities,
commonly referred to as "junk bonds," and securities that are not rated.
The greater risks involved in foreign investing and investing in junk bonds
should be understood and carefully considered. See the Portfolio's
prospectus for a description of these risks.

Societe Generale Asset Management Corp., which is indirectly owned by
Societe Generale, one of France's largest banks, serves as the Portfolio's
investment adviser.

T. ROWE PRICE FIXED INCOME SERIES, INC.

The Limited-Term Bond Portfolio of the T. Rowe Price Fixed Income Series,
Inc. is available for investment under the Contract and has the following
investment objective:

LIMITED-TERM BOND PORTFOLIO -- seeks a high level of income consistent
with moderate fluctuation in principal value. The Portfolio will invest at
least 65% of total assets in short- and intermediate-term investment-grade
debt securities.

T. Rowe Price Associates, Inc. is responsible for the selection and
management of the portfolio investments of T. Rowe Price Limited-Term Bond
Portfolio and receives a single, all-inclusive fee based on the Portfolio's
average daily net assets to cover investment management and operating expenses.

T. ROWE PRICE INTERNATIONAL SERIES, INC.

The International Stock Portfolio of the T. Rowe Price International
Series, Inc. is available for investment under the Contract and has the
following investment objective:

INTERNATIONAL STOCK PORTFOLIO -- seeks long-term growth of capital
through investments primarily in common stocks of established non-U.S.
companies.

Rowe Price-Fleming International, Inc. ("Price-Fleming") is responsible for
the selection and management of the Portfolio's investments. Incorporated in
1979 as a joint venture between T. Rowe Price Associates, Inc. ("T. Rowe Price")
and Robert Fleming Holdings Limited ("Fleming"), Price-Fleming receives a
single, all-inclusive fee based on the Portfolio's average daily net assets to
cover investment management and operating expenses.

VAN ECK WORLDWIDE INSURANCE TRUST

The Worldwide Hard Assets Portfolio of the Van Eck Worldwide Insurance
Trust (the "Van Eck Trust") is available for investment under the Contract. Its
investment objective is:

WORLDWIDE HARD ASSETS PORTFOLIO -- seeks long-term capital
appreciation by investing globally, primarily in "Hard Asset Securities" of
companies that are directly or indirectly engaged to a significant extent
in the exploration, development, production or distribution of one or more
of the following: (i) precious metals, (ii) ferrous and non-ferrous metals,
(iii) energy, (iv) forest products, (v) real estate, and (vi) other basic
non-agricultural commodities.

Van Eck Associates Corporation serves as investment adviser and manager to
the Van Eck Worldwide Hard Assets Portfolio pursuant to an Advisory Agreement
with the Van Eck Trust.

An investment in a Portfolio, including the Money Market Portfolio, is not
insured or guaranteed by the U.S. Government and there can be no assurance that
the Money Market Portfolio will be able to maintain a stable net asset value per
share.

We entered into agreements with the investment adviser of several of the
Funds pursuant to which each such investment adviser will pay us a servicing fee
based upon an annual percentage of the average aggregate net assets we have
invested on behalf of the Separate Account. These agreements reflect
administrative

19
<PAGE> 23

services we provided to the Funds. Payments of such amounts on behalf of the
Funds will not increase the fees paid by the Funds or their shareholders.

AVAILABILITY OF THE FUNDS

We cannot guarantee that each Portfolio will always be available for
investment through the Contracts, but in the unlikely event that a Portfolio is
not available, we will do everything reasonably practicable to secure the
availability of a comparable portfolio. The Separate Account purchases shares of
each Portfolio in accordance with a participation agreement we have entered into
with each Fund. If a participation agreement terminates, the Separate Account
may not be able to purchase additional shares of the Portfolios of that Fund. In
such case, you will no longer be able to allocate Premium Payments or transfer
Contract Value to the Variable Account investing in that Portfolio.

We reserve the right, subject to applicable law, to make additions to,
deletions from, or substitutions for the shares of a Portfolio that are held in
the Separate Account. If the shares of a Portfolio are no longer available for
investment or if, in our judgment, further investment in any Portfolio should
become inappropriate, we may redeem the shares of that Portfolio and substitute
shares of another portfolio. We will not substitute any shares without notice
and prior approval of the SEC and state insurance authorities, to the extent
required by the 1940 Act or other applicable law.

We also reserve the right in our sole discretion to establish additional
Variable Accounts, or eliminate or combine one or more Variable Accounts, if
marketing needs, tax considerations or investment conditions warrant. We will
determine if new or substituted Variable Accounts will be available to existing
Contract Owners. Subject to obtaining any approvals or consents required by law,
the assets of one or more Variable Accounts may also be transferred to any other
Variable Account if, in our sole discretion, marketing, tax, or investment
conditions warrant. Additional information regarding termination of
participation agreements, substitutions of investments and resolving conflicts
among Funds may be found in the Statement of Additional Information.

THE PAY-IN PERIOD

The Pay-in Period begins when your first Premium Payment is made and
continues until you begin to receive annuity payments during the Payout Period.
The Pay-in Period will also end if you fully withdraw all of your Contract Value
before the Payout Period.

PURCHASING A CONTRACT

You may purchase a Contract with a Premium Payment of $1,000 or more. The
maximum first Premium Payment is $250,000. To purchase a Contract, you must make
an application to us either through one of our licensed representatives who is
also a registered representative of IL Securities, Inc., or a broker-dealer
having a selling agreement with IL Securities, Inc. Contracts may be sold to or
in connection with retirement plans that do not qualify for special tax
treatment as well as retirement plans that qualify for special tax treatment
under the Code. We will not issue you a Contract if you are older than 85 on the
Date of Issue.

PREMIUM PAYMENTS

Premium Payments must be at least $1,000. You may make Premium Payments at
any time until the earliest of: (a) the Annuity Start Date; (b) the date you
fully withdraw all Contract Value; or (c) the date you reach age 85 (age 70 1/2
for Qualified Contracts other than Roth IRAs). In any one Contract Year, we will
not accept Premium Payments that total more than two times your first Premium
Payment. We will not accept total Premium Payments in excess of $250,000.
However, we reserve the right to waive these limitations.

Under the Automatic Premium Payment Plan, you may select an annual,
semi-annual, quarterly or monthly payment schedule under which we will
automatically deduct Premium Payments from a bank or credit union account or
other source. The minimum amount of such payment is $1,000.

20
<PAGE> 24

CANCELLATION -- THE 10 DAY FREE-LOOK PERIOD

You have the right to cancel and return the Contract for any reason within
10 days after you receive it. To cancel the Contract, you must mail the Contract
with a Written Request requesting cancellation to the Service Center and
postmark the package before midnight of the tenth day after you initially
receive the Contract. You must put the correct postage on your package.

If the Contract is canceled during the Free-Look Period, we will refund to
you an amount equal to the sum of: (i) the difference between the Premium
Payments paid and the amounts allocated to the Variable Accounts and the Fixed
Account under the Contract; and (ii) the Contract Value as of the date the
Contract and the Written Request requesting cancellation are postmarked,
provided the package is properly addressed to the Service Center with correct
postage. You bear the investment risk for Premium Payments allocated to the
Variable Accounts during the Free-Look Period.

DESIGNATING YOUR INVESTMENT OPTIONS

When you fill out your application, you will give us instructions on how to
allocate your first Net Premium Payment among the eighteen Variable Accounts and
the Fixed Account. The amount you direct to a particular Variable Account and/or
to the Fixed Account must equal at least 1% of the Premium Payment.

Once we receive your Premium Payment and your completed application at the
Service Center, we will issue your Contract and direct your first Net Premium
Payment within two (2) Business Days to the Variable Accounts and/or the Fixed
Account in accordance with your instructions, subject to the limitations set
forth above under "Cancellation -- The 10-Day Free Look Period."

If you did not give us all the information we need, we will contact you. If
we cannot complete the application within five (5) Business Days, we will either
send back your money immediately or obtain your permission to keep your money
until we receive all the necessary information. Once the application is
complete, we will direct your first Net Premium Payment to the Variable Accounts
and/or the Fixed Account according to your instructions within two Business
Days.

We will credit any additional Premium Payments you make to your Contract as
of the same Business Day we receive them. Our Business Day closes when the New
York Stock Exchange closes, usually at 4 p.m. Eastern Time. If we receive your
Premium Payments after the close of our Business Day, we will calculate and
credit them the next Business Day. We will direct your Premium Payment to the
Variable Accounts and/or the Fixed Account according to your written
instructions in effect at the time we receive it. However, you may direct
individual Premium Payments to a specific Variable Account or to the Fixed
Account (or any combination thereof) without changing your instructions. You may
change your instructions directing your investments at any time by sending us a
Written Request or by telephone authorization. Changing such instructions will
not change the way existing Contract Value is apportioned among the Variable
Accounts or the Fixed Account.

THE CONTRACT VALUE ALLOCATED TO A VARIABLE ACCOUNT WILL VARY WITH THE INVESTMENT
EXPERIENCE OF THAT VARIABLE ACCOUNT. YOU BEAR THE ENTIRE INVESTMENT RISK FOR
AMOUNTS YOU ALLOCATE TO THE VARIABLE ACCOUNTS. YOU SHOULD PERIODICALLY REVIEW
YOUR PREMIUM PAYMENT ALLOCATION INSTRUCTIONS IN LIGHT OF MARKET CONDITIONS AND
YOUR OVERALL FINANCIAL OBJECTIVES.

SEPARATE ACCOUNT VALUE

The value of your investment in the Separate Account will go up or down
depending on the investment experience of the Portfolios underlying the Variable
Accounts you select for investment. Separate Account Value will be decreased by
any partial withdrawals, transfers and Separate Account charges. There is no
guaranteed minimum Separate Account Value. Because the value in the Separate
Account of your Contract on any future date depends upon market conditions, it
cannot be predetermined.

21
<PAGE> 25

Calculating Separate Account Value. The Separate Account Value is
determined at the end of each Business Day. It is the sum of the assets you have
in each of the Variable Accounts. To measure the value of each Variable Account,
we use a unit of measure called an Accumulation Unit.

Determining the Number of Accumulation Units. Any money you allocate or
transfer to a Variable Account will be converted into Accumulation Units and
will increase the number of Accumulation Units credited to the Variable Account.
We determine the number of Accumulation Units to be credited to the Variable
Account by dividing the dollar amount of your payment or transfer by the
Accumulation Unit value for that Variable Account as of the end of that Business
Day. (See "Determining Accumulation Unit Value" below.)

Any amounts transferred, withdrawn or deducted from a Variable Account will
be processed by canceling or liquidating Accumulation Units. The number of
Accumulation Units to be canceled is determined by dividing the dollar amount
being removed from a Variable Account by the value of an Accumulation Unit for
that Variable Account as of the end of the Business Day during which the amount
was removed. The number of Accumulation Units in any Variable Account will be
decreased at the end of each Business Day by:

(a) any amounts transferred (and any applicable Transfer Fee) from that
Variable Account to another Variable Account or to the Fixed
Account,

(b) any amounts withdrawn during that Business Day,

(d) the quarterly Contract Fee, if assessed on that Business Day.

Determining Accumulation Unit Value. On the first day of operation for
each Variable Account, the value of an Accumulation Unit for that Variable
Account is set at $10. We recalculate the value of an Accumulation Unit for each
Variable Account at the end of each Business Day. Accumulation Unit value is
calculated by multiplying the value of an Accumulation Unit at the end of the
immediately preceding Business Day by the Variable Account's Net Investment
Factor for the current Business Day. The Net Investment Factor for each Variable
Account reflects the investment performance and capital gains and losses
(whether realized or unrealized) of the underlying Portfolio and the Separate
Account charges (mortality and expense risk charge and administrative expense
charge) for that Business Day. The formula for computing the Net Investment
Factor can be found in the Statement of Additional Information.

TRANSFERS BETWEEN INVESTMENT OPTIONS

General. Before the Annuity Start Date and subject to the restrictions
described below, you may transfer all or part of the amount in a Variable
Account or the Fixed Account to another Variable Account or the Fixed Account.

Transfers to the Fixed Account must be at least $1,000. Before the Annuity
Start Date, you may transfer up to 25% of the Fixed Account Value (as determined
at the beginning of the Contract Year) from the Fixed Account to one or more of
the Variable Accounts in any Contract Year. We measure a Contract Year from the
anniversary of the day we issued your Contract. We do not charge a Transfer Fee
for transfers from the Fixed Account to one or more Variable Accounts and such a
transfer is not considered a transfer for purposes of assessing a transfer
charge.

Transfers will be made as of the Business Day on which we receive your
Written Request authorization to transfer, provided we receive it before the
close of our Business Day, usually 4:00 p.m. Eastern Time. If we receive your
request after the close of our Business Day, we will make the transfer as of the
next Business Day. There currently is no limit on the number of transfers that
you can make before the Annuity Start Date among or between Variable Accounts or
to the Fixed Account.

Transfer Fee. We will impose a transfer fee of $25 for the thirteenth and
each subsequent transfer request you make per Contract Year. For the purposes of
assessing the Transfer Fee, each Written Request will be considered to be one
transfer, regardless of the number of Variable Accounts affected by the
transfer.

22
<PAGE> 26

There is currently no limit on the number of transfers you can make of Contract
Value from one or more Variable Accounts to another one or more of the Variable
Accounts or the Fixed Account during a single Contract Year before the Annuity
Start Date. (See "Charges and Deductions.")

Dollar-Cost Averaging. The Dollar-Cost Averaging program permits you to
systematically transfer (on a monthly or quarterly basis) a set dollar amount
from one or more Variable Accounts or the Fixed Account to any other Variable
Account(s). The fixed dollar amount will purchase more Accumulation Units of a
Variable Account when their value is lower and fewer units when their value is
higher. Over time, the cost per unit averages out to be less than if all
purchases of units had been made at the highest value and greater than if all
purchases had been made at the lowest value. The dollar-cost averaging method of
investment reduces the risk of making purchases only when the price of
Accumulation Units is high. It does not assure a profit or protect against a
loss in declining markets.

You may elect to participate in the Dollar-Cost Averaging program when you
complete your application, or at any other time before the Annuity Start Date,
by sending us a Written Request. To use the Dollar-Cost Averaging program, you
must transfer at least $100 to each Variable Account. Once you elect the
program, it remains in effect for the life of the Contract until the value of
the Variable Account from which transfers are being made is depleted, and/or the
value of the Fixed Account is expended, or until you cancel the program by
Written Request or by telephone request if we have your telephone authorization
on file. There is no additional charge for dollar-cost averaging, and a transfer
under this program is not considered a transfer for purposes of assessing a
transfer change. We reserve the right to discontinue offering the Dollar-Cost
Averaging program at any time and for any reason.

Interest Sweep. Before the Annuity Start Date, you may elect to have any
interest credited to the Fixed Account automatically transferred on a quarterly
basis to one or more Variable Accounts. There is no charge for interest sweep
transfers and an interest sweep transfer is not considered a transfer for
purposes of assessing a transfer charge. Amounts transferred out of the Fixed
Account due to an interest sweep transfer are counted toward the 25% of Fixed
Account Value that may be transferred out of the Fixed Account during any
Contract Year.

Automatic Account Balancing Service. Once your money has been allocated
among the Variable Accounts, the performance of each Variable Account may cause
your allocation to shift. You may instruct us to automatically rebalance your
Variable Account values (on a monthly or quarterly basis) to return to the
percentages specified in your allocation instructions. You may elect to
participate in the Automatic Account Balancing Service when you complete your
application or at any other time before the Annuity Start Date by sending us a
Written Request. Your percentage allocations must be in whole percentages and be
at least 1% per allocation. You may start and stop Automatic Account Balancing
at any time by sending us a Written Request or by telephone request, if we have
your telephone authorization on file. There is no additional charge for using
Automatic Account Balancing, and an account balancing transfer is not considered
a transfer for purposes of assessing a transfer charge. We reserve the right to
discontinue offering the Automatic Account Balancing Service at any time and for
any reason.

FEES AND CHARGES

WITHDRAWAL CHARGE

General. We do not deduct a charge for sales expenses from Premium
Payments at the time Premium Payments are paid to us. However, we will deduct
any applicable Withdrawal Charge if you fully or partially withdraw Contract
Value before the Annuity Start Date. We do not assess a Withdrawal Charge on
withdrawals made in the event the Contract terminates due to your death or the
death of the Annuitant, or if you decide to begin to receive annuity payments
and you choose an annuity payout plan with a life contingency or an annuity
payout plan with a period certain of at least 6 years.

23
<PAGE> 27

The amount of the Withdrawal Charge you may incur depends on the Withdrawal
Charge Option you choose at the time you purchase your Contract. ONCE YOU CHOOSE
YOUR WITHDRAWAL CHARGE OPTION, YOU CANNOT CHANGE IT.

Withdrawal Charge Options. When you purchase your Contract, you must
choose between two Withdrawal Charge Options.

The DATE OF ISSUE WITHDRAWAL CHARGE OPTION is designed for the owner who
wishes to make additional Premium Payments periodically over the life of the
Contract. The charge expires after the ninth Contract Year, benefiting those
owners who intend to continue to make Premium Payments after the ninth Contract
Year.

The PREMIUM PAYMENT WITHDRAWAL CHARGE OPTION is more suitable for the owner
who currently intends to make only a single Premium Payment or several Premium
Payments close in time to the date the Contract is issued. This withdrawal
charge option is not designed for the owner who intends to make additional
Premium Payments over an extended period of time because each time you make
another Premium Payment, the seven-year period for paying the Withdrawal Charge
begins again with respect to that payment.

The Withdrawal Charge is separately calculated for each withdrawal you
make. For purposes of calculating the Withdrawal Charge, the money that has been
held the longest in the Contract will be deemed to be the first money withdrawn.
This is called the "first in, first out" method of accounting or "FIFO." In
addition, amounts subject to the Withdrawal Charge will be deemed to be first
from Premium Payments, and then from earnings. This means that we will not
deduct a Withdrawal Charge on withdrawals of that portion of your Contract Value
that exceeds the sum total of your Premium Payments.

IF YOU CHOOSE THE DATE OF ISSUE WITHDRAWAL CHARGE OPTION: We will impose a
Withdrawal Charge on all partial or full withdrawals of Premium Payments that
you make during the first nine Contract Years if the amount of the withdrawal
exceeds the Free Withdrawal Amount. The Withdrawal Charge is calculated as a
percentage of the amount you withdraw based on the number of years between the
date we receive your Written Request for withdrawal and the Date of Issue. The
rate of the Withdrawal Charge is listed in the table below. Under this option,
no Withdrawal Charge is deducted from full or partial withdrawals that you make
in Contract Years ten and later.

<TABLE>
<CAPTION>
CHARGE AS PERCENTAGE
CONTRACT YEAR OF PREMIUM PAYMENTS
------------- --------------------
<S> <C>
1-6.................................................. 7.0%
7.................................................... 6.0
8.................................................... 4.0
9.................................................... 2.0
10+.................................................. 0
</TABLE>

IF YOU CHOOSE THE DATE OF PREMIUM PAYMENT WITHDRAWAL CHARGE OPTION: We
will calculate the Withdrawal Charge by determining the length of time between
the date we receive your Written Request for a withdrawal and the date you made
the Premium Payment being withdrawn. We will deduct a Withdrawal

24
<PAGE> 28

Charge if you withdraw a Premium Payment that we have held for less than seven
Premium Payment Years if it is greater than the Free Withdrawal Amount.

<TABLE>
<CAPTION>
PREMIUM CHARGE AS PERCENTAGE
PAYMENT YEAR OF PREMIUM PAYMENTS
- ------------ --------------------
<S> <C>
1.................................................... 7.0%
2.................................................... 6.0
3.................................................... 5.0
4.................................................... 4.0
5.................................................... 3.0
6.................................................... 2.0
7.................................................... 1.0
8+................................................... 0
</TABLE>

Any applicable Withdrawal Charge is deducted pro-rata from the remaining
value in the Variable Accounts or Fixed Account from which the withdrawal is
being made. If such remaining Separate Account Value or Fixed Account Value is
insufficient for this purpose, the Withdrawal Charge is deducted pro-rata from
all Variable Accounts and the Fixed Account in which the Contract is invested
based on the remaining Contract Value in each Variable Account and the Fixed
Account.

Free Withdrawal Amount. In any Contract Year after the first, you may
withdraw a portion of your Contract Value without incurring a Withdrawal Charge.
This amount is called the Free Withdrawal Amount. The Free Withdrawal Amount is
10% of Contract Value each year, as determined at the beginning of the Contract
Year. If you do not withdraw the full 10% in any Contract Year after the first,
the remaining amount does not roll over to the next Contract Year.

Amounts withdrawn in excess of the Free Withdrawal Amount will be assessed
a Withdrawal Charge, depending on the Withdrawal Charge Option you choose. (See
"Withdrawal Charge.") Free withdrawals may be subject to the 10% federal penalty
tax if made before you reach age 59 1/2.

Employee and Agent Purchases. If state law permits, we will waive the
Withdrawal Charge on any full or partial withdrawals from Contracts sold to
agents or employees of Indianapolis Life Insurance Company (or its affiliates
and subsidiaries).

CONTRACT FEE

At the end of each Contract quarter (or on the date of full withdrawal of
Contract Value) before the Annuity Start Date, we will deduct from the Contract
Value a quarterly contract fee of $7.50 as reimbursement for our administrative
expenses relating to the Contract. The fee will be deducted from each Variable
Account and the Fixed Account based on the proportion that the value in each
such Variable Account and the Fixed Account bears to the total Contract Value.
We will not charge the Contract Fee after an annuity payout plan has begun.
Deduction of the Contract Fee is currently waived for all Qualified Contracts.
We also currently waive deduction of the Contract Fee for Non-Qualified
Contracts whose cumulative Premium Payments on the date the Contract Fee is
assessed are equal to or greater than $100,000. We reserve the right to modify
this waiver upon 30 days written notice to you.

ASSET-BASED ADMINISTRATIVE CHARGE

We will deduct a daily administrative charge as compensation for certain
expenses we incur in the administration of the Contract. The charge is deducted
from the assets of the Separate Account at an annual rate of 0.15%. We will
continue to assess this charge after annuitization if annuity payments are made
on a variable basis. There is no necessary relationship between the amount of
this administrative charge and the amount of expenses that may be attributable
to a particular Contract.

25
<PAGE> 29

TRANSFER FEE

A transfer fee of $25 will be imposed for the 13th and each subsequent
transfer during a Contract Year. For the purpose of assessing the Transfer Fee,
each Written Request would be considered to be one transfer, regardless of the
number of Variable Accounts affected by the transfer. The transfer fee will be
deducted from the Variable Account from which the transfer is made. If a
transfer is made from more than one Variable Account at the same time, the
transfer fee would be deducted pro-rata from the remaining Separate Account
Value in such Variable Account(s).

MORTALITY AND EXPENSE RISK CHARGE

As compensation for assuming mortality and expense risks, we will deduct a
daily mortality and expense risk charge from the assets of the Separate Account.
The charge is at a daily rate of 0.003404%. If applied on an annual basis this
rate would be 1.25% (approximately 0.90% for mortality risk and 0.35% for
expense risk). This charge will continue to be assessed if annuity payments are
made on a variable basis after the Annuity Start Date.

The mortality risk we assume is that Annuitants may live for a longer
period of time than estimated when the guarantees in the Contract were
established. Because of these guarantees, each Annuitant is assured that
longevity will not have an adverse effect on the annuity payments received. The
mortality risk that we assume also includes a guarantee to pay a Death Benefit
if the Annuitant dies before the Annuity Start Date. The expense risk that we
assume is the risk that the administrative fees and transfer fees (if imposed)
may be insufficient to cover actual future expenses. We may use any profits from
this charge to pay the costs of distributing the Contracts.

If the mortality and expense risk charge is not sufficient to cover the
actual cost of the mortality and expense risks, we will bear the loss. The
mortality and expense risk charge cannot be increased. We may use any profits
from this charge to pay the costs of distributing the Contracts.

FUND EXPENSES

Because the Separate Account purchases shares or units of the various
Portfolios of the Funds, the net assets of the Separate Account will be reduced
by the investment advisory fees and other operating expenses incurred by such
Portfolios. See the accompanying prospectuses for the Portfolios.

PREMIUM TAXES

Various states and other governmental entities charge a premium tax on
annuity contracts issued by insurance companies. Premium tax rates currently
range up to 3.5%, depending on the state. Tax rates are subject to change from
time to time by legislative and other governmental action. In addition, other
governmental units within a state may levy such taxes. Currently, New York has
no premium tax or retaliatory premium tax. If New York imposes these taxes in
the future, or if the Owner is or becomes a resident of a state where such taxes
apply, we will make a deduction from the value of your Contract either: (a) from
Premium Payments as we receive them, (b) from Contract Value upon partial or
full withdrawal, (c) when annuity payments begin, or (d) upon payment of a Death
Benefit. We, however, reserve the right to deduct premium taxes at the time such
taxes are paid to the taxing authority.

OTHER TAXES

Currently, no charge is made against the Separate Account for any federal,
state or local taxes (other than premium taxes) that we incur or that may be
attributable to the Separate Account or the Contracts. We may, however, deduct
such a charge in the future.

26
<PAGE> 30

THE PAYOUT PERIOD

The Payout Period is that period of time during which you will receive a
steady stream of annuity payments from the money you have accumulated under your
Contract. The Payout Period begins on the Annuity Start Date. You may choose to
receive your annuity payments on a fixed or variable basis, or a combination of
both. If you choose to receive your Payout Option on a variable basis, you may
keep the same Variable Accounts to which your Premium Payments were allocated
during the Pay-in Period, or transfer to different Variable Accounts.

THE ANNUITY START DATE. If you own a Non-Qualified Contract, you may
select the Annuity Start Date on which you will begin to receive annuity
payments. If you do not specify a date, the Annuity Start Date is the later of
the Annuitant's age 70 or 10 years after the Date of Issue. For Qualified
Contracts purchased in connection with qualified plans under Code sections
401(a), 401(k), 403(a), and 403(b), the Code requires that the Annuity Start
Date must be no later than April 1 of the calendar year following the later of
the year in which the Owner (i) reaches age 70 1/2 or (ii) retires and the
payment must be made in a specified form or manner. If the Owner is a "5 percent
owner" (as defined in the Code), or in the case of an IRA that satisfies Code
section 408, the Annuity Start Date must be no later than the date described in
(i). Roth IRAs under Section 408A of the Code do not require distributions at
any time prior to the Owner's death.

We will start annuity payments to the Annuitant on the Annuity Start Date
shown in your contract unless you change the date. You may change the Annuity
Start Date to any Contract Anniversary or to any date on which you fully
withdraw the Contract Value. Your Written Request must be received at our
Service Center at least 31 days prior to the current Annuity Start Date.

ANNUITY PAYOUT OPTIONS. The Payout Option you select will affect the
dollar amount of each annuity payment you receive. You may elect, revoke, or
change your annuity payout plan at any time before the Annuity Start Date while
the Annuitant is living by sending us a Written Request signed by you and/or
your beneficiary, as appropriate. You may choose one of the payout plans
described below or any other plan being offered by us as of the Annuity Start
Date. The payout plans we currently offer provide either variable annuity
payments or fixed annuity payments or a combination of both.

You may select to receive annuity payments on a monthly, quarterly,
semi-annual or annual basis. The first payment under any payout plan will be
made on the fifteenth day of the month immediately following the Annuity Start
Date. Subsequent payments shall be made on the fifteenth of the month.

If you do not select an annuity payout plan by the Annuity Start Date, we
will apply the adjusted Contract Value under Option 3, One Life Income with
payments guaranteed for 10 years, as described below. The adjusted Contract
Value will be allocated to a fixed and variable payout in the same proportion
that your interest in the Fixed and Variable Accounts bears to the total
Contract Value on the Annuity Start Date.

Anytime before the Annuity Start Date, you may have the entire Surrender
Value paid to you as an annuity under one of the payout plans. A beneficiary may
have the Death Benefit paid as an annuity under one of the payout plans.

We reserve the right to pay you the adjusted Contract Value in a lump sum
and not as an annuity if your adjusted Contract Value after the Annuity Start
Date would be less than $2,000, or the amount of annuity payments would be less
than $20.

DETERMINING THE AMOUNT OF THE ANNUITY PAYMENT. On the Annuity Start Date,
the adjusted Contract Value will be used to calculate your annuity payments
under the payout plan you select, unless you choose to receive the Surrender
Value in a lump sum.

The adjusted Contract Value is the Contract Value on the Annuity Start
Date:

(1) MINUS any applicable quarterly Contract Fee not yet deducted;

(2) MINUS any applicable premium taxes not yet deducted; and

27
<PAGE> 31

(3) for an installment income annuity payout plan with a payout period
of less than 6 years, MINUS any applicable Withdrawal Charge.

For Qualified Contracts, the amount of any outstanding loan is also
deducted; distributions must satisfy certain requirements specified in the Code.

We do not assess a Withdrawal Charge if you choose an annuity payout plan
with a life contingency or an installment payout plan with a period certain of
at least 6 years.

FIXED ANNUITY PAYMENTS

Fixed annuity payout plans provide the Annuitant with periodic payments of
a fixed amount with guaranteed minimum interest of 3.0%. The amount of each
payment depends only on the form and duration of the payout plan you choose, the
age of the Annuitant, the sex of the Annuitant (if applicable), the amount of
your adjusted Contract Value and the applicable annuity purchase rates in the
Contract. If a fixed payout option is selected, the payments for each $1,000
applied will not be less than those provided by the application of the adjusted
Contract Value to the purchase of any single consideration immediate annuity
that we offer at the time to the same class of annuitants. The annuity purchase
rates in the Contract are based on a minimum guaranteed interest rate of 3.0%.
We may, in our sole discretion, make annuity payments in an amount based on a
higher interest rate.

VARIABLE ANNUITY PAYMENTS

Variable annuity payout plans provide the Annuitant with periodic payments
that increase or decrease in amount in accordance with the Annuity Unit values
of one or more Variable Account(s). Your contract contains annuity tables which
demonstrate how the initial annuity payment rate is derived. This rate is
different for each payout plan, and varies by age and sex of the Annuitant (if
applicable). The amount of the second and subsequent variable annuity payments
is not predetermined; it will depend on the current value of the underlying
investments in the Variable Accounts, and therefore may increase or decrease
from period to period.

The contract permits you to choose a benchmark rate of return for the
Payout Period. You may choose a benchmark rate of 3.0%, 4.0% or 5.0% annually.
If the net investment performance of the Variable Accounts in which your annuity
payout plan is invested is greater than this benchmark rate, your annuity
payments will increase. If their net investment performance falls below this
benchmark, your annuity payments will decline. Therefore, if you choose a 5.0%
benchmark rate, you assume more risk that your annuity payment may occasionally
decline than if you choose a 3.0% benchmark rate. The selected Portfolio's
performance must grow at a rate at least equal to the benchmark rate (plus the
mortality and expense risk charge and the administrative expense charge) in
order to avoid a decrease in variable annuity payments. This means that each
month a Portfolio's annualized investment return must be at least 4.4%, 5.4%, or
6.4% in order for payments with a 3.0%, 4.0% or 5.0% benchmark rate to remain
level. For further details on Variable Annuity Payments, see the Statement of
Additional Information.

Annuity Unit Value. On the Annuity Start Date, we will use your adjusted
Contract Value to purchase annuity units at that day's annuity unit value for
each Variable Account in which you have value. The number of annuity units we
credit will remain fixed unless you transfer units among Variable Accounts. The
value of each annuity unit will vary each Business Day to reflect the investment
experience of the underlying Portfolio, reduced by the mortality and expense
risk charge and the administrative expense charge, and adjusted by an interest
factor to neutralize the assumed benchmark rate of return.

Transfers. After the Annuity Start Date, an Annuitant may change the
Variable Account(s) in which the annuity payout plan is invested once per
Contract Year by sending us a Written Request. No charge is assessed for this
transfer. We will make the transfer by exchanging annuity units of one Variable
Account for another Variable Account on an equivalent dollar value basis. See
the Statement of Additional Information for examples of annuity unit value
calculations and variable annuity payment calculations.

28
<PAGE> 32

DESCRIPTION OF ANNUITY PAYOUT OPTIONS

Option 1 -- Installment Income For a Fixed Period. Under this option, we
will make equal monthly annuity payments for a fixed number of years between 1
and 30 years. The amount of the payment is not guaranteed if a variable payout
plan is selected. If a fixed payout plan is selected, the payments for each
$1,000 of Contract Value will not be less than those shown in the Fixed Period
Table in Section 12 of the Contract. In the event of the Payee's death, a
Successor Payee may receive the remaining payments or may elect to receive the
present value of the remaining payments in a lump sum. If there is no Successor
Payee, the present value of the remaining payments will be paid to the estate of
the last surviving Payee.

Option 2 -- Installment Income In a Fixed Amount. Under this option, we
will make equal monthly payments of $5.00 or more for each $1,000 of Contract
Value used to purchase the option until the full amount is paid out. The number
of payments is not guaranteed if a variable payout plan is selected. If a fixed
payout plan is selected, payments will be made until the full amount applied
with compound interest at an annual rate of not less than 3% is paid out. In the
event of the Payee's death, a Successor Payee may receive the payments or may
elect to receive the present value of the remaining payments in a lump sum. If
there is no Successor Payee, the present value of the remaining payments will be
paid to the estate of the last surviving Payee.

Option 3 -- One Life Income. Under this option, we will make an annuity
payment each month so long as the Payee is alive,* or for a guaranteed 10 or 20
year period. If when the Payee dies, we have made annuity payments for less than
the selected guaranteed period to the Successor Payee, we will continue to make
annuity payments for the rest of the guaranteed period to the Successor Payee
or, if there is no Successor Payee, to the estate of the last surviving Payee.
The amount of each payment is not guaranteed if a variable payout plan is
selected. If a fixed payout plan is selected, the payment for each $1,000 of
Contract Value used to purchase the option will not be less than that shown in
the One Life Table in Section 12 of the Contract. Payments guaranteed for 10 or
20 years certain may be commuted. Payments guaranteed only for the life of the
Payee may not be commuted.

Option 4 -- Joint and Survivor Life Income. Under this option, we will
make annuity payments each month so long as two Payees are alive, or if one
Payee dies to the surviving Payee.* If one Payee dies before the due date of the
first payment, the surviving Payee will receive payments under Option 3 -- One
Life Income with payments guaranteed for 10 years. The payments may not be
commuted.

The amount of each payment will be determined from the tables in the
Contract that apply to the particular option using the Annuitant's age (and if
applicable, sex). Age will be determined from the last birthday at the due date
of the first payment.

WITHDRAWAL OF CONTRACT VALUE

Full Withdrawals. At any time before the Annuity Start Date, you may
withdraw fully from the Contract for its Surrender Value. The Surrender Value is
equal to the Contract Value MINUS (1) any applicable Withdrawal Charges; MINUS
(2) any premium taxes not previously deducted; and MINUS (3) the Contract Fee
unless waived. For Qualified Contracts, any outstanding loan balance is also
deducted. The Surrender Value will be determined as of the Business Day that we
receive your Written Request requesting full withdrawal and your Contract at our
Service Center. The Surrender Value will be paid in a lump sum unless you
request payment under a payout plan. (See "The Payout Period.") A full
withdrawal may have adverse federal income tax consequences, including a penalty
tax. (See "Federal Tax Matters.")

Partial Withdrawals. At any time before the Annuity Start Date, you may
send a Written Request to our Service Center or direct a telephone request to us
to withdraw part of your Contract Value. You must withdraw at least $250. We
will withdraw the amount you request from the Contract Value as of the Business
Day on which we receive your Written Request for the partial withdrawal. We will
then reduce the amount remaining in the Contract by any applicable Withdrawal
Charge. Your Contract Value after a partial

- ---------------
* IT IS POSSIBLE UNDER THIS OPTION TO RECEIVE ONLY ONE ANNUITY PAYMENT IF THE
PAYEE DIES (OR PAYEES DIE) BEFORE THE DUE DATE OF THE SECOND PAYMENT OR TO
RECEIVE ONLY TWO ANNUITY PAYMENTS IF THE PAYEE DIES (OR PAYEES DIE) BEFORE THE
DUE DATE OF THE THIRD PAYMENT, AND SO ON.
29
<PAGE> 33

withdrawal must be at least $1,000. If your Contract Value after a partial
withdrawal is less than $1,000, we reserve the right to pay you the Surrender
Value in a lump sum. (See "Fees and Charges -- Withdrawal Charge.")

You may specify how much you wish to withdraw from each Variable Account
and/or the Fixed Account. If you do not specify, or if you do not have
sufficient assets in the Variable Accounts or Fixed Account you specified to
comply with your request, we will make the partial withdrawal on a pro rata
basis from the Fixed Account and those Variable Accounts in which you are
invested. We will base the pro rata reduction on the ratio that the value in
each Variable Account and the Fixed Account has to the entire Contract Value
before the partial withdrawal.

A partial withdrawal will result in a proportional reduction in the minimum
Death Benefit. (See "Death Benefit.")

INCOME TAXES, TAX PENALTIES AND CERTAIN RESTRICTIONS MAY APPLY TO ANY
WITHDRAWAL YOU MAKE. (See "Federal Tax Matters.")

Systematic Withdrawal Program. The Systematic Withdrawal Program provides
an automatic monthly or quarterly payment to you, the Owner, from the amounts
you have accumulated in the Variable Accounts and/or the Fixed Account. The
minimum amount you may withdraw is $100. The maximum amount that may be
transferred and withdrawn out of the Fixed Account in any Contract Year under
all circumstances (Dollar-Cost Averaging, Systematic Withdrawals and Partial
Withdrawals) is 25% of the Fixed Account Value as determined at the beginning of
the Contract Year. To use the program, you must maintain a $1,000 balance in
your Contract. You may elect to participate in the Systematic Withdrawal Program
at any time before the Annuity Start Date by sending a Written Request to our
Service Center. Once you elect the program, it remains in effect unless the
balance in your Contract drops below $1,000. You may cancel the program at any
time by sending us a Written Request or by calling us by telephone if we have
your telephone authorization on file. Amounts withdrawn due to the Systematic
Withdrawal Program will result in a proportional reduction in the minimum Death
Benefit.

We will assess a Withdrawal Charge on these withdrawals, unless the amount
you withdraw under the Systematic Withdrawal Program qualifies as a Free
Withdrawal Amount or unless Withdrawal Charges no longer apply to the amounts
withdrawn. (See "Fees and Charges -- Withdrawal Charge.") We do not deduct any
other charges for this program.

All Systematic Withdrawals will be paid to you on the same day each month,
provided that day is a Business Day. If it is not, then payment will be made on
the next Business Day. Systematic withdrawals may be taxable, subject to
withholding, and subject to a 10% penalty tax. (See "Federal Tax Matters.") We
reserve the right to discontinue offering the Systematic Withdrawal Program at
any time and for any reason.

Full and Partial Withdrawal Restrictions. Your right to make full and
partial withdrawals is subject to any restrictions imposed by applicable law or
employee benefit plan.

Restrictions on Distributions from Certain Types of Contracts. There are
certain restrictions on full and partial withdrawals from Contracts used as
funding vehicles for Code Section 403(b) retirement programs. Section 403(b)(11)
of the Code restricts the distribution under Section 403(b) annuity contracts
of: (i) elective contributions made in years beginning after December 31, 1988;
(ii) earnings on those contributions; and (iii) earnings in such years on
amounts held as of the last year beginning before January 1, 1989. Distributions
of those amounts may only occur upon the death of the employee, attainment of
age 59 1/2, separation from service, disability, or financial hardship. In
addition, income attributable to elective contributions may not be distributed
in the case of hardship.

CONTRACT LOANS

If your Contract is issued to you in connection with retirement programs
meeting the requirements of Section 403(b) of the Code (other than those
programs subject to Title I of the Employee Retirement Income Security Act of
1974), you may borrow from us using your Contract as collateral. Loans such as
these
30
<PAGE> 34

are subject to the provisions of any applicable retirement program and to the
Code. You should, therefore, consult your tax and retirement plan advisers
before taking a contract loan.

At any time prior to the year the Owner reaches age 70 1/2, you may borrow
the lesser of (1) the maximum loan amount permitted under the Code, and (2) 90%
of the Surrender Value of your Contract less any existing loan amount,
determined as of the date of the loan. Loans in excess of the maximum amount
permitted under the Code will be treated as a taxable distribution rather than a
loan. The minimum loan amount is $1,000. We will only make contract loans after
approving your written application. The written consent of all assignees and
irrevocable beneficiaries must be obtained before a loan will be given.

When a loan is made, we will transfer an amount equal to the amount
borrowed from Separate Account Value or Fixed Account Value to the loan account.
The loan account is part of our general account, and Contract Value in the loan
account does not participate in the investment experience of any Variable
Account or Fixed Account. You must indicate in the loan application from which
Variable Accounts or Fixed Account, and in what amounts, Contract Value is to be
transferred to the loan account. In the absence of any such instructions from
you, the transfer(s) are made pro-rata on a last-in, first out ("LIFO") basis
from all Variable Accounts having Separate Account Value and from the Fixed
Account. Loans may be repaid by you at any time before the Annuity Start Date.
Upon the repayment of any portion of a loan, an amount equal to the repayment
will be transferred from the loan account to the Variable Account(s) or Fixed
Account as designated by you or according to your current Premium Payment
allocation instructions.

We charge interest on contract loans at an effective annual rate of 6.0%.
We pay interest on the Contract Value in the loan account at rates we determine
from time to time but never less than an effective annual rate of 3.0%.
Consequently, the net cost of a loan is the difference between 6.0% and the rate
being paid from time to time on the Contract Value in the loan account. We may
declare from time to time higher current interest rates. Different current
interest rates may be applied to the loan account than the rest of the Fixed
Account. If not repaid, loans will automatically reduce the amount of any Death
Benefit, the amount payable upon a partial or full withdrawal of Contract Value
and the amount applied on the Annuity Start Date to provide annuity payments.

If at any time the loan amount of a Contract exceeds the Surrender Value,
the Contract will be in default. In this event, we will send you a written
notice of default stating the amount of loan repayment needed to reinstate the
Contract, and you will have 60 days, from the day the notice is mailed, to pay
the stated amount. If we do not receive the required loan repayment within 60
days, we will terminate the Contract without value. In addition, in order to
comply with the requirements of the Code, loans must be repaid in substantially
equal installments, at least quarterly, over a period of no longer than five
years (which can be longer for certain home loans). If these requirements are
not satisfied, or if the Contract terminates while a loan is outstanding, the
loan balance will be treated as a taxable distribution and may be subject to
penalty tax, and the treatment of the Contract under Section 403(b) of the Code
may be adversely affected.

Any loan amount outstanding at the time of your death or the death of the
Annuitant is deducted from any Death Benefit paid. In addition, a contract loan,
whether or not repaid, will have a permanent effect on the Contract Value
because the investment experience of the Separate Account and the interest rates
applicable to the Fixed Account do not apply to the portion of Contract Value
transferred to the loan account. The longer the loan remains outstanding, the
greater this effect is likely to be.

DEATH BENEFIT

DEATH BENEFITS BEFORE THE ANNUITY START DATE

Death Benefit. If the Annuitant dies before the Annuity Start Date, the
Beneficiary will receive a Death Benefit. The Death Benefit payable will not be
less than the minimum Death Benefit described herein, minus

31
<PAGE> 35

any applicable premium taxes not previously deducted. The minimum Death Benefit
will be reset every third year on the Death Benefit Anniversary.

The Death Benefit will equal the greater of:

(1) the Contract Value as of the date we receive due proof of the
deceased's death and payment instructions; or

(2) the minimum Death Benefit as of any Death Benefit Anniversary preceding
the date the Death Benefit is determined, plus any Premium Payments, and minus
any partial withdrawals and charges, incurred between such Death Benefit
Anniversary and the date the Death Benefit is determined;

LESS any applicable premium taxes not previously deducted.

The minimum Death Benefit is initially set on the Date of Issue, and equals
the Premium Payments. It will be reset on the first Death Benefit Anniversary
and equals the greater of: (a) Contract Value on such Death Benefit Anniversary;
or (b) the minimum Death Benefit on the previous Death Benefit Anniversary plus
any Premium Payments, and minus any partial withdrawals and charges, incurred
since the previous Death Benefit Anniversary. PARTIAL WITHDRAWALS WILL RESULT IN
A PROPORTIONAL REDUCTION IN THE MINIMUM DEATH BENEFIT BY THE RATIO OF THE AMOUNT
WITHDRAWN TO THE CONTRACT VALUE IMMEDIATELY PRIOR TO SUCH WITHDRAWAL. Once
reset, the minimum Death Benefit will never decrease unless partial withdrawals
are made.

For example, if the Contract Value prior to a withdrawal is $100,000, there
have been no additional Premium Payments, the minimum Death Benefit on the
previous Death Benefit Anniversary was $150,000 and a partial withdrawal of
$20,000 is made, then the reduction in the minimum death Benefit would be
determined as $30,000 [$150,000 x ($20,000/$100,000)]. On the next Death Benefit
Anniversary, assuming no additional Premium Payments or withdrawals and that the
Contract Value on the next Death Benefit Anniversary is $75,000, the minimum
Death Benefit would be $120,000 [the greater of $75,000 or ($150,000 minus
$30,000)].

Age Limitation On the Death Benefit. If the Annuitant dies at or after age
75 (or ten years after the Date of Issue, whichever is later) but before the
Annuity Start Date, the Death Benefit will equal Contract Value, LESS any
applicable premium taxes not yet deducted, as of the date we receive due proof
of death and payment instructions.

Loans. If the Contract is a Qualified Contract, any outstanding loan
amount on the date the Death Benefit is paid will also be deducted from the
Death Benefit.

Distribution Upon the Owner's Death. If you own the Contract with another
person, and one of you dies before the Annuity Start Date, the survivor becomes
the sole Beneficiary regardless of your designation. If there is no surviving
Owner, your named Beneficiary will become the Beneficiary upon your death. (You
may name primary and contingent beneficiaries.) If you have named two or more
primary Beneficiaries, they will share equally in the death benefit (described
below) unless you have specified otherwise. If there are no living primary
Beneficiaries at the time of your death, payments will be made to those
contingent Beneficiaries who are living when payment of the death benefit is
due. If all Beneficiaries have predeceased you, we will pay the death benefit to
your estate. If you or a Joint Owner who is the Annuitant dies before the
Annuity Start Date, then the provisions relating to the death of an Annuitant
(described below) will govern.

If you are not the Annuitant and you die before the Annuitant and before
the Annuity Start Date, then the following options are available to your
Beneficiary:

(1) If such Beneficiary is the spouse of the deceased Owner, the spouse
may continue the Contract as the new Owner.

(2) If such Beneficiary is not the spouse of the deceased Owner:

(a) such Beneficiary may elect to receive the Contract Value, LESS
any premium taxes not yet deducted, in a single sum within 5
years of the deceased Owner's death; or

32
<PAGE> 36

(b) such Beneficiary may elect to receive the Contract Value paid out
under one of the approved payout plans, provided that
distributions begin within one year of the deceased Owner's death
and the distribution period under the payout plan is for the life
of, or for a period not exceeding the life expectancy of, the
Beneficiary.

If such Beneficiary does not elect one of the above options, we
will pay the Contract Value, LESS any premium taxes not yet deducted,
within five years from the date of the deceased Owner's death.

Under any of the distribution options in this section, "Distribution Upon the
Owner's Death," the Beneficiary may exercise all ownership rights and privileges
from the date of the deceased Owner's death until the date that the Contract
Value is paid. Similar rules apply to Qualified Contracts. The above
distribution requirements will apply only upon the death of the first Joint
Owner.

Distribution Upon the Death of the Annuitant. If the Annuitant (including
an Owner who is the Annuitant) dies before the Annuity Start Date, we will pay
the Death Benefit described above in "Death Benefits Before the Annuity Start
Date" in a lump sum to your named Beneficiaries within five years after the date
of the Annuitant's death. (You may name primary and contingent beneficiaries.)
If you have named two or more primary Beneficiaries, they will share equally in
the Death Benefit unless you have specified otherwise. If there are no living
primary Beneficiaries at the time of the Annuitant's death, payments will be
made to those contingent Beneficiaries who are living when payment of the Death
Benefit is due. If all the Beneficiaries have predeceased the Annuitant, we will
pay the Death Benefit to you, if living, or the Annuitant's estate. In lieu of a
lump sum payment, the Beneficiary may elect, within 60 days of the date we
receive due proof of the Annuitant's death, to apply the Death Benefit to a
payout plan. (See "Payout Options.")

If you are also the Annuitant and you die, the provisions described
immediately above apply, except that the Beneficiary may only apply the Death
Benefit payment to a payout plan if:

(1) payments under the option begin within one (1) year of the
Annuitant's death; and

(2) payments under the option are payable over the Beneficiary's life or
over a period not greater than the Beneficiary's life expectancy.

DEATH OF PAYEE AFTER THE ANNUITY START DATE

If the Payee dies after the Annuity Start Date, any Joint Payee becomes the
sole Payee. If there is no Joint Payee, the Successor Payee becomes the sole
Payee. If there is no Successor Payee, the remaining benefits are paid to the
estate of the last surviving Payee. The death of the Payee after the Annuity
Start Date will have the effect stated in the payout plan pursuant to which
annuity payments are being made. If any Owner dies on or after the Annuity Start
Date, any payments that remain must be made at least as rapidly as under the
payout plan in effect on the date of the your death.

THE FIXED ACCOUNT

You may allocate some or all of your Net Premium Payments and transfer some
or all of your Contract Value to the Fixed Account. The Fixed Account offers a
guarantee of principal (after deductions for fees and expenses) as well as
interest guaranteed by Bankers Life to be not less than 3% per year. The Fixed
Account is part of our general account and the Fixed Account is supported by the
assets held in our general account. Our general account supports our insurance
and annuity obligations. Since the Fixed Account is part of the general account,
we assume the risk of investment gain or loss on this amount. All assets in the
general account are subject to our general liabilities from business operations.

The Fixed Account has not been, and is not required to be, registered with
the SEC under the Securities Act of 1933, and neither the Fixed Account nor our
general account have been registered as an investment company under the 1940
Act. Therefore, neither our general account, the Fixed Account, nor any
interests therein are generally subject to regulation under the 1933 Act or the
1940 Act. The disclosures relating to the Fixed Account which are included in
this prospectus are for your information and have not been reviewed by
33
<PAGE> 37

the SEC. However, such disclosures may be subject to certain generally
applicable provisions of federal securities laws relating to the accuracy and
completeness of statements made in prospectuses.

FIXED ACCOUNT VALUE

The Fixed Account Value is equal to: (1) Net Premium Payments allocated to
the Fixed Account, PLUS (2) amounts transferred to the Fixed Account, PLUS (3)
interest credited to the Fixed Account, MINUS (4) any partial withdrawals or
transfers from the Fixed Account, and MINUS (5) any Withdrawal Charges, contract
fees or premium taxes deducted from the Fixed Account.

We intend to credit the Fixed Account with interest at current rates in
excess of the minimum guaranteed rate of 3%, but we are not obligated to do so.
We have no specific formula for determining current interest rates. Some of the
factors that we may consider, in our sole discretion, in determining whether to
credit interest in excess of the 3% guaranteed rate are: general economic
trends, rates of return currently available and anticipated on the company's
investments, regulatory and tax requirements, and competitive factors. The Fixed
Account Value will not share in the investment performance of the company's
general account or any portion thereof.

Because we, in our sole discretion, anticipate changing the current
interest rate from time to time, different allocations you make to the Fixed
Account will be credited with different current interest rates. The interest
rate we credit to amounts allocated or transferred to the Fixed Account will
apply to the end of the calendar year in which we receive the amount. At the end
of the calendar year, we will determine a new current interest rate on such
amount and accrued interest thereon (which may be a different current interest
rate from the current interest rate on new allocations to the Fixed Account on
that date). We will guarantee the rate of interest we declare on such amount and
accrued interest for the following calendar year. We will determine, in our sole
discretion, any interest to be credited on amounts in the Fixed Account in
excess of the minimum guaranteed effective rate of 3% per year. You therefore
assume the risk that interest credited to amounts in the Fixed Account may not
exceed the minimum 3% guaranteed rate.

For purposes of making withdrawals, transfers or deductions of fees and
charges from the Fixed Account, we will consider such withdrawals to have come
from the first money into the contract, that is, on a first-in, first-out
("FIFO") basis.

We reserve the right to change the method of crediting interest from time
to time, provided that such changes do not reduce the guaranteed rate of
interest below 3% per year or shorten the period for which the interest rate
applies to less than one calendar year (except for the year in which such amount
is received or transferred).

TRANSFER PRIVILEGES

General. Transfers to the Fixed Account must be at least $1,000. A
transfer charge of $25 may be imposed for the thirteenth and each subsequent
request you make to transfer Contract Value from one or more Variable Accounts
to the Fixed Account (or to one or more Variable Accounts) during a single
Contract Year before the Annuity Start Date.

Before the Annuity Start Date, you may transfer up to 25% of the Fixed
Account Value (as determined at the beginning of the Contract Year) from the
Fixed Account to one or more of the Variable Accounts in any Contract Year. No
fee is charged for transfers from the Fixed Account to one or more Variable
Accounts and such a transfer is not considered a transfer for purposes of
assessing a transfer charge.

Dollar-Cost Averaging. You may elect to participate in the Dollar-Cost
Averaging program at the time of your application, or at any time thereafter
before the Annuity Start Date by sending us a Written Request. The Dollar-Cost
Averaging program permits you to systematically transfer (on a monthly or
quarterly basis) a set dollar amount from the Fixed Account or one or more
Variable Accounts to any other Variable Account(s). The minimum amount that may
be transferred under the Dollar-Cost Averaging program is $100 to each Variable
Account. The maximum amount that may be transferred and withdrawn out of the
Fixed Account in any Contract Year under all circumstances (Dollar-Cost
Averaging, Systematic Withdrawals and
34
<PAGE> 38

Partial Withdrawals) is 25% of the Fixed Account Value, as determined at the
beginning of the Contract Year. Once elected, dollar-cost averaging from the
Fixed Account remains in effect for the life of the Contract until the value of
the Fixed Account is depleted or until you cancel your participation by Written
Request or by telephone if we have your telephone authorization on file. There
is no additional charge for dollar-cost averaging, and a transfer under this
program is not considered a transfer for purposes of assessing a transfer
change. We reserve the right to discontinue offering the Dollar-Cost Averaging
program at any time and for any reason. (See "Transfer Privileges -- Dollar-Cost
Averaging.")

PAYMENT DEFERRAL

We have the right to defer payment of any full or partial withdrawal or
transfer from the Fixed Account for up to six months from the date we receive
your Written Request for such a withdrawal or transfer at our Service Center. If
we do not give you a payment within 10 days after we receive all necessary
documentation, we will credit interest at the then-current rate applicable to
the Fixed Account, but the interest will not be less than 3%, or such higher
rate as is required for a particular jurisdiction, to the amount to be paid from
the date we received the documentation.

HOW TO REVIEW INVESTMENT PERFORMANCE OF THE VARIABLE ACCOUNTS

From time to time, we may advertise or include in sales literature yields,
effective yields and total returns for the Variable Accounts. These figures are
based on historical earnings and do not indicate or project future performance.
We also may, from time to time, advertise or include in sales literature
Variable Account performance relative to certain performance rankings and
indices compiled by independent organizations. More detailed information as to
the calculation of performance, as well as comparisons with unmanaged market
indices, appears in the Statement of Additional Information.

Performance data for the Variable Accounts is based on the investment
performance of the corresponding Portfolio of a Fund and reflects its expenses.
(See the accompanying prospectuses for the Funds.)

The "yield" of the Money Market Variable Account refers to the annualized
income generated by an investment in the Variable Account over a specified
seven-day period. The yield is calculated by assuming that the income generated
for that seven-day period is generated each seven-day period over a 52-week
period and is shown as a percentage of the investment. The "effective yield" is
calculated similarly but, when annualized, the income earned by an investment in
the Variable Account is assumed to be reinvested. The effective yield will be
slightly higher than the yield because of the compounding effect of this assumed
reinvestment.

The yield of a Variable Account (other than the Money Market Variable
Account) refers to the annualized income generated by an investment in the
Variable Account over a specified 30-day or one-month period. The yield is
calculated by assuming that the income generated by the investment during that
30-day or one-month period is generated each period over a 12-month period and
is shown as a percentage of the investment.

Yield quotations do not reflect the Withdrawal Charge.

The "total return" of a Variable Account refers to return quotations
assuming an investment under a Contract has been held in the Variable Account
for various periods of time. When a Variable Account has been in operation for
one, five, and ten years, respectively, the total return for these periods will
be provided.

The average annual total return quotations represent the average annual
compounded rates of return that would equate an initial investment of $1,000
under a Contract to the redemption value of that investment as of the last day
of each of the periods for which total return quotations are provided. Average
annual total return information shows the average annual percentage change in
the value of an investment in the Variable Account from the beginning date of
the measuring period to the end of that period. This standardized version of
average annual total return reflects all historical investment results, less all
charges and deductions applied against the Variable Account (including any
Withdrawal Charge that would apply if you terminated the Contract at the end of
each period indicated, but excluding any deductions for premium taxes).

35
<PAGE> 39

In addition to the standard version described above, total return
performance information computed on different non-standard bases may be used in
advertisements or sales literature. Average annual total return information may
be presented, computed on the same basis as described above, except deductions
will not include the Withdrawal Charge. In addition, we may from time to time
disclose average annual total return in non-standard formats and cumulative
total return for Contracts funded by the Variable Accounts.

We may also disclose in sales literature or advertisements adjusted yield
and total returns for the Portfolios since their inception reduced by some or
all of the fees and charges under the Contract. Such adjusted historic
performance may include data that precedes the inception dates of the Variable
Accounts. This data is designed to show the performance that would have resulted
if the Contract had been in existence during that time.

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

In advertising and sales literature (including illustrations), the
performance of each Variable Account may be compared with the performance of
other variable annuity issuers in general or to the performance of particular
types of variable annuities investing in mutual funds, or investment portfolios
of mutual funds with investment objectives similar to the Variable Account.
Lipper Analytical Services, Inc. ("Lipper"), CDA Investment Technologies
("CDA"), Variable Annuity Research Data Service ("VARDS") and Morningstar, Inc.
("Morningstar") are independent services which monitor and rank the performance
of variable annuity issuers in each of the major categories of investment
objectives on an industry-wide basis.

Lipper's and Morningstar's rankings include variable life insurance issuers
as well as variable annuity issuers. VARDS rankings compare only variable
annuity issuers. The performance analyses prepared by Lipper, CDA, VARDS and
Morningstar rank or illustrate such issuers on the basis of total return,
assuming reinvestment of distributions, but do not take sales charges,
redemption fees, or certain expense deductions at the separate account level
into consideration. In addition, VARDS prepares risk rankings, which consider
the effects of market risk on total return performance. This type of ranking
provides data as to which funds provide the highest total return within various
categories of funds defined by the degree of risk inherent in their investment
objectives.

Advertising and sales literature may also compare the performance of each
Variable Account to the Standard & Poor's Index of 500 Common Stocks, a widely
used measure of stock performance. This unmanaged index assumes the reinvestment
of dividends but does not reflect any "deduction" for the expense of operating
or managing an investment portfolio. Other independent ranking services and
indices may also be used as a source of performance comparison.

We may also report other information including the effect of systematic
withdrawals, systematic investments and tax-deferred compounding on a Variable
Account's investment returns, or returns in general, which may be illustrated by
tables, graphs, or charts. All income and capital gains derived from Variable
Account investments are reinvested and can lead to substantial long-term
accumulation of assets, provided that the Variable Account investment experience
is positive.

VOTING RIGHTS

We are the legal owner of the Portfolio shares held in the Variable
Accounts. However, when a Portfolio is required to solicit the votes of its
shareholders through the use of proxies, we believe that current law requires us
to solicit you and other Contract Owners as to how we should vote the Portfolio
shares held in the Variable Accounts. If we determine that we no longer are
required to solicit your votes, we may vote the shares in our own right.

When we solicit your vote, the number of votes you have will be calculated
separately for each Variable Account in which you have an investment. The number
of your votes is based on the net asset value per share of the Portfolio in
which the Variable Account invests. It may include fractional shares. Before the
Annuity

36
<PAGE> 40

Start Date, you hold a voting interest in each Variable Account to which the
Contract Value is allocated. After the Annuity Start Date, the Annuitant has a
voting interest in each Variable Account from which variable annuity payments
are made. If you have a voting interest in a Variable Account, you will receive
proxy materials and reports relating to any meeting of shareholders of the
Portfolio in which that Variable Account invests.

If we do not receive timely voting instructions for Portfolio shares or if
we own the shares, we will vote those shares in proportion to the voting
instructions we receive. Instructions we receive to abstain on any item will
reduce the total number of votes being cast on a matter. For further details as
to how we determine the number of your votes, see the Statement of Additional
Information.

FEDERAL TAX MATTERS

THE FOLLOWING DISCUSSION IS GENERAL AND
IS NOT INTENDED AS TAX ADVICE

INTRODUCTION

This discussion is not intended to address the tax consequences resulting
from all of the situations in which a person may be entitled to or may receive a
distribution under the annuity contract issued by us. Any person concerned about
these tax implications should consult a competent tax advisor before initiating
any transaction. This discussion is based upon our understanding of the present
federal income tax laws, as they are currently interpreted by the Internal
Revenue Service ("IRS"). No representation is made as to the likelihood of the
continuation of the present federal income tax laws or of the current
interpretation by the IRS. Moreover, no attempt has been made to consider any
applicable state or other tax laws.

The Contract may be purchased on a non-qualified basis or purchased and
used in connection with plans qualifying for favorable tax treatment. The
Qualified Contract is designed for use by individuals whose Premium Payments are
comprised solely of proceeds from and/or contributions under retirement plans
which are intended to qualify as plans entitled to special income tax treatment
under Sections 401(a), 403(b), 408, or 408A of the Code. The ultimate effect of
federal income taxes on the amounts held under a Contract, or annuity payments,
and on the economic benefit to you, the Annuitant, or the beneficiary depends on
the type of retirement plan, on the tax and employment status of the individual
concerned, and on our tax status. In addition, certain requirements must be
satisfied in purchasing a Qualified Contract with proceeds from a tax-qualified
plan and receiving distributions from a Qualified Contract in order to continue
receiving favorable tax treatment. Some retirement plans are subject to
distribution and other requirements that are not incorporated into our Contract
administration procedures. Owners, participants and beneficiaries are
responsible for determining that contributions, distributions and other
transactions with respect to the Contracts comply with applicable law.
Therefore, purchasers of Qualified Contracts should seek competent legal and tax
advice regarding the suitability of a Contract for their situation, the
applicable requirements, and the tax treatment of the rights and benefits of a
Contract. The following discussion assumes that Qualified Contracts are
purchased with proceeds from and/or contributions under retirement plans that
qualify for the intended special federal income tax treatment.

TAX STATUS OF THE CONTRACT

Diversification Requirements. Section 817(h) of the Code provides that
separate account investments underlying a contract must be "adequately
diversified" in accordance with Treasury regulations in order for the contract
to qualify as an annuity contract under Section 72 of the Code. The Separate
Account, through each underlying Fund, intends to comply with the
diversification requirements prescribed in regulations under Section 817(h) of
the Code, which affect how the assets in the various Variable Accounts may be
invested. Although we do not have direct control over the Funds in which the
Separate Account invests, we believe that each Fund in which the Separate
Account owns shares will meet the diversification requirements, and therefore,
the Contract will be treated as an annuity contract under the Code.

37
<PAGE> 41

Owner Control. In certain circumstances, owners of variable annuity
contracts may be considered the owners, for federal income tax purposes, of the
assets of the separate account used to support their contracts. In those
circumstances, income and gains from the separate account assets would be
includible in the variable annuity contract owner's gross income. The IRS has
stated in published rulings that a variable contract owner will be considered
the owner of separate account assets if the contract owner possesses incidents
of ownership in those assets, such as the ability to exercise investment control
over the assets. The Treasury Department has also announced, in connection with
the issuance of regulations concerning investment diversification, that those
regulations "do not provide guidance concerning the circumstances in which
investor control of the investments of a segregated asset account may cause the
investor (i.e., the Contract Owner), rather than the insurance company, to be
treated as the owner of the assets in the account." This announcement also
states that guidance would be issued by way of regulations or rulings on the
"extent to which policyholders may direct their investments to particular
variable accounts without being treated as owners of the underlying assets." As
of the date of this prospectus, no such guidance has been issued.

The ownership rights under the Contracts are similar to, but different in
certain respects from, those described by the IRS in rulings in which it was
determined that contract owners were not owners of separate account assets. For
example, the Owner of a Contract has the choice of one or more Variable Accounts
in which to allocate Net Premium Payments and Contract Values, and may be able
to transfer among Variable Accounts more frequently than in such rulings. These
differences could result in an Owner being treated as the Owner of a pro rata
share of the assets of the Separate Account. In addition, we do not know what
standards will be set forth, if any, in the regulations or rulings which the
Treasury Department has stated it expects to issue. We, therefore, reserve the
right to modify the Contract as necessary to attempt to prevent you from being
considered the Owner of any portion of the assets of the Separate Account.

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 Contract to provide that: (a) if any Owner dies on or after the
Annuity Start Date but before the entire interest in the Contract has been
distributed, the remaining portion of such interest will be distributed at least
as rapidly as under the method of distribution being used as of the date of that
Owner's death; and (b) if any Owner dies before the Annuity Start Date, the
entire interest in the Contract will be distributed within five years after the
date of your death. These requirements will be considered satisfied as to any
portion of the Owner's interest which is payable to or for the benefit of a
"designated beneficiary" and which is distributed over the life of such
Beneficiary or over a period not extending beyond the life expectancy of that
beneficiary, provided that such distributions begin within one year of that
Owner's death. The Owner's "designated beneficiary" is the person to whom
ownership of the Contract passes by reason of death. However, if a "designated
beneficiary" is the surviving spouse of a deceased Owner, the Contract may be
continued with the surviving spouse as the new Owner.

The Non-Qualified Contracts 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 the Contracts if necessary to assure that they comply with
the requirements of Code Section 72(s) when clarified by regulation or
otherwise. If Section 72(s) requires an amendment to the Contracts we will make
such an amendment. Such amendment may be effective retroactively if necessary
for compliance with Section 72(s).

Other rules may apply to Qualified Contracts.

The following discussion assumes that the Contracts will qualify as annuity
contracts for federal income tax purposes.

TAXATION OF ANNUITIES

In General. Section 72 of the Code governs taxation of annuities in
general. We believe that if you are a natural person you are not taxed on
increases in the value of a Contract until distribution occurs by withdrawing
all or part of the Contract Value (e.g., partial and full withdrawals) or as
annuity payments under the payment option elected. For this purpose, the
assignment, pledge, or agreement to assign or pledge any portion of the Contract
Value (and in the case of a Qualified Contract, any portion of an interest in
the
38
<PAGE> 42

qualified plan) generally will be treated as a distribution. The taxable portion
of a distribution (in the form of a single sum payment or payment option) is
taxable as ordinary income.

The Owner of any annuity contract who is not a natural person generally
must include in income any increase in the excess of the Contract Value over the
"investment in the contract" during the taxable year. There are some exceptions
to this rule, and a prospective Owner that is not a natural person may wish to
discuss these with a competent tax advisor.

The following discussion generally applies to Contracts owned by natural
persons.

Withdrawals. In the case of a partial withdrawal from a Qualified
Contract, under Section 72(e) of the Code, a ratable portion of the amount
received is taxable, generally based on the ratio of the "investment in the
contract" to the participant's total accrued benefit or balance under the
retirement plan. The "investment in the contract" generally equals the portion,
if any, of any Premium Payment paid by or on behalf of the individual under a
Contract which was not excluded from the individual's gross income. For
Contracts issued in connection with qualified plans, the "investment in the
contract" can be zero. Special tax rules may be available for certain
distributions from Qualified Contracts.

In the case of a partial withdrawal from a Non-Qualified Contract, under
Section 72(e), any amounts received are generally first treated as taxable
income to the extent that the Contract Value immediately before the partial
withdrawal exceeds the "investment in the contract" at that time. Any additional
amount withdrawn is not taxable.

In the case of a full withdrawal under a Qualified or Non-Qualified
Contract, the amount received generally will be taxable only to the extent it
exceeds the "investment in the contract."

Section 1035 of the Code generally provides that no gain or loss shall be
recognized on the exchange of one annuity contract for another. If the
surrendered contract was issued before August 14, 1982, the tax rules formerly
providing that the withdrawal was taxable only to the extent the amount received
exceeds your investment in the contract will continue to apply to amounts
allocable to investments in that contract before August 14, 1982. In contrast,
contracts issued after January 19, 1985 in a Code Section 1035 exchange are
treated as new contracts for purposes of the penalty and distribution-at-death
rules. Special rules and procedures apply to Section 1035 transactions. Persons
who may wish to take advantage of Section 1035 should consult their tax adviser.

Annuity Payments. Although tax consequences may vary depending on the
payment option elected under an annuity contract, under Code Section 72(b),
generally (prior to recovery of the investment in the contract) gross income
does not include that part of any amount received as an annuity under an annuity
contract that bears the same ratio to such amount as the investment in the
contract bears to the expected return at the annuity starting date. For variable
annuity payments, the taxable portion is generally determined by an equation
that establishes a specific dollar amount of each payment that is not taxed. The
dollar amount is determined by dividing the "investment in the contract" by the
total number of expected periodic payments. However, the entire distribution
will be taxable once the recipient has recovered the dollar amount of his or her
"investment in the contract." For fixed annuity payments, in general, there is
no tax on the portion of each payment which represents the same ratio that the
"investment in the contract" bears to the total expected value of the annuity
payments for the term of the payments; however, the remainder of each annuity
payment is taxable until the recovery of the investment in the contract, and
thereafter the full amount of each annuity payment is taxable. If death occurs
before full recovery of the investment in the contract, the unrecovered amount
may be deducted on the Annuitant's final tax return.

Taxation of Death Benefit Proceeds. Amounts may be distributed from a
Contract because of the death of an Owner or the Annuitant. Generally, such
amounts are includible in the income of the recipient as follows: (i) if
distributed in a lump sum, they are taxed in the same manner as a full
withdrawal from the contract or (ii) if distributed under a payment option, they
are taxed in the same way as annuity payments.

Other rules relating to distributions at death apply to Qualified
Contracts. You should consult your legal counsel and tax adviser regarding these
rules and their impact on Qualified Contracts.

39
<PAGE> 43

Penalty Tax on Certain Withdrawals. In the case of a distribution from a
Non-Qualified Contract, there may be imposed a federal penalty tax equal to 10%
of the amount treated as taxable income. In general, however, there is no
penalty on distributions:

1. made on or after the taxpayer reaches age 59 1/2;

2. made on or after the death of the owner (or if the owner is not an
individual, the death of the primary Annuitant);

3. attributable to the taxpayer's becoming disabled;

4. a part of a series of substantially equal periodic payments (not less
frequently than annually) for the life (or life expectancy) of the
taxpayer or the joint lives (or joint life expectancies) of the
taxpayer and his or her designated beneficiary;

5. made under certain annuities issued in connection with structured
settlement agreements; or

6. made under an annuity contract that is purchased with a single
Premium Payment when the Annuity Start Date is no later than a year
from purchase of the annuity and substantially equal periodic
payments are made, not less frequently than annually, during the
annuity payment period.

Other tax penalties may apply to certain distributions under a Qualified
Contract.

Possible Changes in Taxation. Although the likelihood of legislative
change is uncertain, there is always the possibility that the tax treatment of
the Contracts could change by legislation or other means. For instance, the
President's 1999 Budget Proposal recommended legislation that, if enacted, would
adversely modify the federal taxation of the Contracts. It is also possible that
any change could be retroactive (that is, effective prior to the date of the
change). A tax adviser should be consulted with respect to legislative
developments and their effect on the Contract.

TRANSFERS, ASSIGNMENTS OR EXCHANGES OF A CONTRACT

A transfer of Ownership of a Contract, the designation of an Annuitant,
Payer or other Beneficiary who is not also the Owner, the selection of certain
Annuity Start Dates or the exchange of a Contract may result in certain tax
consequences to you that are not discussed herein. An Owner contemplating any
such transfer, designation, selection, assignment, or exchange of a Contract
should contact a competent tax advisor with respect to the potential tax effects
of such a transaction.

WITHHOLDING

Distributions from Contracts generally are subject to withholding for the
Owner's federal income tax liability. The withholding rate varies according to
the type of distribution and the Owner's tax status. The Owner will be provided
the opportunity to elect not have tax withheld from distributions. "Eligible
rollover distributions" from section 401(a) plans and section 403(b)
tax-sheltered annuities are subject to a mandatory federal income tax
withholding of 20%. An eligible rollover distribution is the taxable portion of
any distribution from such a plan, except certain distributions such as
distributions required by the Code or distributions in a specified annuity form.
The 20% withholding does not apply, however, if the Owner chooses a "direct
rollover" from the plan to another tax-qualified plan or IRA. Certain states
also require withholding of state income tax whenever federal income tax is
withheld.

MULTIPLE CONTRACTS

All non-qualified deferred annuity contracts entered into after October 21,
1988 that we (or our affiliates) issue to you during any calendar year are
treated as one annuity contract for purposes of determining the amount
includible in gross income under Section 72(e). The effects of this rule are not
yet clear; however, it could affect the time when income is taxable and the
amount that might be subject to the 10% penalty tax described above. In
addition, the Treasury Department has specific authority to issue regulations
that prevent

40
<PAGE> 44

the avoidance of Section 72(e) through the serial purchase of annuity contracts
or otherwise. There may also be other situations in which the Treasury may
conclude that it would be appropriate to aggregate two or more annuity contracts
purchased by the same Owner. Accordingly, a Contract Owner should consult a
competent tax advisor before purchasing more than one annuity contract.

TAXATION OF QUALIFIED PLANS

The Contracts are designed for use with several types of qualified plans.
The tax rules applicable to participants in these qualified plans vary according
to the type of plan and the terms and conditions of the plan itself. Special
favorable tax treatment may be available for certain types of contributions and
distributions. Adverse tax consequences may result from contributions in excess
of specified limits; distributions prior to age 59 1/2 (subject to certain
exceptions); distributions that do not conform to specified commencement and
minimum distribution rules; aggregate distributions in excess of a specified
annual amount; and in other specified circumstances. Therefore, no attempt is
made to provide more than general information about the use of the Contracts
with the various types of qualified retirement plans. Contract Owners, the
Annuitants, and Beneficiaries are cautioned that the rights of any person to any
benefits under these qualified retirement plans may be subject to the terms and
conditions of the plans themselves, regardless of the terms and conditions of
the Contract, but we shall not be bound by the terms and conditions of such
plans to the extent such terms contradict the Contract, unless the Company
consents. Brief descriptions follow of the various types of qualified retirement
plans in connection with a Contract. We will amend the Contract as necessary to
conform it to the requirements of such plan.

Corporate Pension and Profit Sharing Plans and H.R. 10 Plans. Section
401(a) of the Code permits corporate employers to establish various types of
retirement plans for employees, and permits self-employed individuals to
establish these plans for themselves and their employees. These retirement plans
may permit the purchase of the Contracts to accumulate retirement savings under
the plans. Adverse tax or other legal consequences to the plan, to the
participant or to both may result if this Contract is assigned or transferred to
any individual as a means to provide benefit payments, unless the plan complies
with all legal requirements applicable to such benefits prior to transfer of the
Contract. Employers intending to use the Contract with such plans should seek
competent advice.

Individual Retirement Annuities. Section 408 of the Code permits eligible
individuals and their employers to contribute to an individual retirement
program known as an "Individual Retirement Annuity" or "IRA". IRA contributions
are limited each year to $2,000, or 100% of the Owner's adjusted gross income,
if less. IRA contributions may be wholly or partly deductible depending on the
individual's income and whether the individual is a participant in a qualified
plan. Distributions from certain other types of qualified plans, however, may be
"rolled over" on a tax-deferred basis into an IRA without regard to this limit.
Earnings in an IRA are not taxed while held in the IRA. All amounts in the IRA
(other than nondeductible contributions) are taxed when distributed.
Distributions prior to age 59 1/2 (with certain exceptions) are also subject to
a 10% penalty tax. Sales of the Contract for use with Traditional IRAs may be
subject to special requirements of the Internal Revenue Service. Employers may
establish Simplified Employee Pension (SEP) Plans to provide Traditional IRA
contributions on behalf of their employees. The Internal Revenue Service has not
reviewed the Contract for qualification as an Traditional IRA, and has not
generally ruled whether a death benefit provision such as the provision in the
Contract comports with IRA qualification requirements.

Roth IRAs. Effective January 1, 1998, section 408A of the Code permits
certain eligible individuals to contribute to a Roth IRA. Contributions to a
Roth IRA, which are subject to certain limitations, are not deductible and must
be made in cash or as a rollover or transfer from another Roth IRA or other IRA.
A rollover from or conversion of a Traditional IRA to a Roth IRA may be subject
to tax and other special rules may apply. You should consult a tax adviser
before combining any converted amounts with any other Roth IRA contributions,
including any other conversion amounts from other tax years. Distributions from
a Roth IRA generally are not taxed, except that, once aggregate distributions
exceed contributions to the Roth IRA, income tax and a 10% penalty tax may apply
to distributions made (1) before age 59 1/2 (subject to certain exceptions) or
(2) during the five taxable years starting with the year in which the first
contribution is made to a Roth IRA.
41
<PAGE> 45

Simplified Employee Pension (SEP) IRAs. Employers may establish Simplified
Employee Pension (SEP) IRAs under Code section 408(k) to provide IRA
contributions on behalf of their employees. In addition to all of the general
Code rules governing IRAs, such plans are subject to certain Code requirements
regarding participation and amounts of contributions.

Simple Retirement Accounts. Beginning January 1, 1997, certain small
employers may establish Simple Retirement Accounts as provided by Section 408(p)
of the Code, under which employees may elect to defer up to $6,000 (as increased
for cost of living adjustments) as a percentage of compensation. The sponsoring
employer is required to make a matching contribution on behalf of contributing
employees. Distributions from a Simple Retirement Account are subject to the
same restrictions that apply to IRA distributions and are taxed as ordinary
income. Subject to certain exceptions, premature distributions prior to age
59 1/2 are subject to a 10% penalty tax, which is increased to 25% if the
distribution occurs within the first two years after the commencement of the
employee's participation in the plan. The failure of the Simple Retirement
Account to meet Code requirements may result in adverse tax consequences.

Tax Sheltered Annuities. Section 403(b) of the Code allows employees of
certain Section 501(c)(3) organizations and public schools to exclude from their
gross income the Premium Payments paid, within certain limits, on a Contract
that will provide an annuity for the employee's retirement. These Premium
Payments may be subject to FICA (social security) tax.

RESTRICTIONS UNDER QUALIFIED CONTRACTS

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

POSSIBLE CHARGE FOR THE COMPANY'S TAXES

At the present time, we make no charge to the Variable Accounts for any
Federal, state, or local taxes that we incur which may be attributable to such
Variable Accounts or the Contracts. We, however, reserve the right in the future
to make a charge for any such tax or other economic burden resulting from the
application of the tax laws that it determines to be properly attributable to
the Variable Accounts or to the Contracts.

OTHER TAX CONSEQUENCES

As noted above, the foregoing comments about the Federal tax consequences
under these Contracts are not exhaustive, and special rules are provided with
respect to other tax situations not discussed in this prospectus. Further, the
Federal income tax consequences discussed herein reflect our understanding of
current law, and the law may change. Federal estate and state and local estate,
inheritance and other tax consequences of Ownership or receipt of distributions
under a Contract depend on the individual circumstances of each Owner or
recipient of the distribution. A competent tax advisor should be consulted for
further information.

OTHER INFORMATION

HOLIDAYS

In addition to federal holidays, we are closed on the following days: the
Friday after Thanksgiving, the day before Christmas when Christmas falls on
Tuesday through Saturday, the day after Christmas when Christmas falls on Sunday
or Monday, and the day after New Year's Day when it falls on a Sunday, the
Monday after New Year's Day when New Year's Day falls on a Saturday, and the day
before or after Independence Day when it falls on Saturday or Sunday.

PAYMENTS

We will usually pay you any full or partial withdrawal, Death Benefit
payment, (or for Qualified Contracts only, payment of your loan proceeds) within
seven days after we receive your Written Request, any
42
<PAGE> 46

information or documentation we reasonably need to process your request, and in
the case of a Death Benefit receipt and filing of due proof of death.

However, we may be required to suspend or postpone payments during any
period when:

1. the New York Stock Exchange is closed, other than customary weekend
and holiday closings;

2. trading on the New York Stock Exchange is restricted as determined by
the SEC;

3. the SEC determines that an emergency exists that would make the
disposal of securities held in the Separate Account or the
determination of the value of the Separate Account's net assets not
reasonably practicable; or

4. the SEC permits, by order, the suspension or postpone of payments for
your protection.

If a recent check or draft has been submitted, we have the right to delay
payment until we have assured ourselves that the check or draft has been
honored.

We have the right to defer payment for a full or partial withdrawal or
transfer from the Fixed Account for up to six months from the date we receive
your Written Request. If we do not make a payment within 10 days after we
receive the documentation we need to complete the transaction (or a shorter
period if required by a particular jurisdiction), we will credit interest to the
amount to be paid from the date we received the necessary documentation at the
then current rate applicable to the Fixed Account, but the interest will not be
less than 3% per annum.

MODIFICATION

Upon notice to you, we may modify the Contract to:

1. permit the Contract or the Separate Account to comply with any
applicable law or regulation issued by a government agency; or

2. assure continued qualification of the Contract under the Code or
other federal or state laws relating to retirement annuities or
variable annuity contracts; or

3. reflect a change in the operation of the Separate Account; or

4. provide additional investment options.

In the event of most such modifications, we will make appropriate
endorsement to the Contract.

DISTRIBUTION OF THE CONTRACTS

IL Securities, Inc. ("IL Securities"), P.O. Box 1230, 2960 North Meridian
Street, Indianapolis, Indiana 46208, acts as the distributor for the Contracts.
IL Securities is an affiliate of Indianapolis Life Insurance Company.

Sales commissions will be paid to broker-dealers who sell the Contracts.
Broker-dealers will be paid commissions of up to 7.2% of Premium Payments. Other
commissions of up to 1.25% may also be paid. We may also pay up to 1.25% of
Premium Payments to IL Securities to compensate it for certain distribution
expenses. These broker-dealers are expected to compensate sales representatives
in varying amounts from these commissions. In addition, we may pay other
distribution expenses such as production incentive bonuses, agent's insurance
and pension benefits, and agency expense allowances. These distribution expenses
do not result in any additional charges against the Contracts other than those
described under "Fees and Charges."

LEGAL PROCEEDINGS

We and our affiliates, like other life insurance companies, are involved in
lawsuits, including class action lawsuits. In some class action and other
lawsuits involving insurers, substantial damages have been sought and/or
material settlement payments have been made. Although the outcome of any
litigation cannot be

43
<PAGE> 47

predicted with certainty, we believe that at the present time there are not
pending or threatened lawsuits that are reasonably likely to have a material
adverse impact on the Separate Account or on us.

REPORTS TO OWNERS

We will mail a report to you at least annually at your last known address
of record. The report will state the Contract Value (including the Contract
Value in each Variable Account and the Fixed Account) of the Contract, Premium
Payments paid and charges deducted since the last report, partial withdrawals
made since the last report and any further information required by any
applicable law or regulation.

INQUIRIES

Inquiries regarding your Contract may be made by writing to us at our
Service Center.

YEAR 2000 MATTERS

Like all financial services providers, we utilize systems that may be
affected by Year 2000 transition issues and we rely on service providers,
including the Portfolios and the administrator, that also may be affected. We
have developed, and are in the process of implementing, a Year 2000 transition
plan. In addition, we are in the process of confirming that the Portfolios and
our service providers are also engaged in similar transition plans. The
resources that are being devoted to this effort are substantial. It is difficult
to predict with precision whether the amount of resources ultimately devoted, or
the outcome of these efforts, will have any negative impact on our operations.
However, as of the date of this Prospectus, we do not anticipate that owners
will experience negative effects on their investment, or on the services
provided in connection therewith, as a result of Year 2000 transition
implementation. We currently anticipate that our systems will be Year 2000
compliant on or about December 31, 1998, but there can be no assurance that we
will be successful, or that interaction with other service providers will not
impair services at that time.

FINANCIAL STATEMENTS

The audited statutory basis balance sheets for the Company as of December
31, 1997 and 1996, and the related statutory basis statements of income and
changes in capital and surplus and cash flows for each of the three years in the
period ended December 31, 1997, as well as the Report of the Independent
Auditors, are contained in the Statement of Additional Information ("SAI"). The
financial statements of the Company should be considered only as bearing on our
ability to meet our obligations under the Contracts. They should not be
considered as bearing on the investment performance of the assets held in the
Separate Account.

The unaudited September 30, 1998 financial statements of Bankers Life
Insurance Company of New York, prepared in accordance with accounting practices
prescribed or permitted by the State of New York Insurance Department but do not
include all the information and footnotes required for complete financial
statements, are contained in this Statement of Additional Information.

44
<PAGE> 48

TABLE OF CONTENTS OF THE
STATEMENT OF ADDITIONAL INFORMATION

Additional information about the Contract and the Separate Account is
contained in the Statement of Additional Information (SAI). You may obtain a
free copy of the SAI by writing to us at the address shown on the front cover or
by calling 1-888-227-5769. The following is the Table of Contents for that
Statement.

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ADDITIONAL CONTRACT PROVISIONS..............................
The Contract..............................................
Incontestability..........................................
Incorrect Age or Sex......................................
Nonparticipation..........................................
Options...................................................
CALCULATION OF VARIABLE ACCOUNT AND ADJUSTED PORTFOLIO
PERFORMANCE DATA..........................................
Money Market Variable Account Yields......................
Other Variable Account Yields.............................
Average Annual Total Returns for Variable Accounts........
Non-Standard Variable Account Total Returns...............
Adjusted Historic Portfolio Performance Data..............
Effect of the Contract Fee on Performance Data............
Other Information.........................................
NET INVESTMENT FACTOR.......................................
VARIABLE ANNUITY PAYMENTS...................................
Assumed Investment Rate...................................
Amount of Variable Annuity Payments.......................
Annuity Unit Value........................................
ADDITION, DELETION OR SUBSTITUTION OF INVESTMENTS...........
Resolving Material Conflicts..............................
TERMINATION OF PARTICIPATION AGREEMENTS.....................
The Alger American Fund...................................
Fidelity Variable Insurance Products Fund.................
Fidelity Variable Insurance Products Fund II..............
OCC Accumulation Trust....................................
Royce Capital Fund........................................
SAFECO Resource Series Trust..............................
SoGen Variable Funds, Inc.................................
T. Rowe Price Fixed Income Series, Inc....................
T. Rowe Price International Series, Inc...................
Van Eck Worldwide Insurance Trust.........................
VOTING RIGHTS...............................................
SAFEKEEPING OF ACCOUNT ASSETS...............................
DISTRIBUTION OF THE CONTRACTS...............................
LEGAL MATTERS...............................................
EXPERTS.....................................................
OTHER INFORMATION...........................................
FINANCIAL STATEMENTS........................................
</TABLE>

45
<PAGE> 49
STATEMENT OF ADDITIONAL INFORMATION

for the

VISIONARY CHOICE

FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY CONTRACT
---------------------------------------------------

Issued Through

BANKERS LIFE INSURANCE COMPANY OF NEW YORK SEPARATE ACCOUNT 1
Offered by

BANKERS LIFE INSURANCE COMPANY OF NEW YORK
65 Froehlich Boulevard
Woodbury, New York 11797

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

This Statement of Additional Information expands upon subjects
discussed in the current Prospectus for the Visionary Choice flexible premium
deferred variable annuity contract (the "Contract") offered by Bankers Life
Insurance Company of New York.

The Owner may obtain a copy of the Prospectus for the Visionary Choice
Contract dated ______________, 199__ by calling 1-888-227-5769 or by writing to
the Annuity Service Center: Bankers Life Insurance Company of New York, c/o USA
Administration Services, Inc., P.O. Box 29105, Overland Park, KS 66201.

Terms used in the current Prospectus for the Contract are incorporated
into this Statement.

THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND SHOULD BE READ
ONLY IN CONJUNCTION WITH THE PROSPECTUSES FOR THE OWNER'S CONTRACT AND THE
FUNDS.

The date of this Statement of Additional Information is __________, 199___.

<PAGE> 50

STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
ADDITIONAL CONTRACT PROVISIONS..............................................................
The Contract..............................................................
Incontestability..........................................................
Incorrect Age or Sex......................................................
Nonparticipation..........................................................
Options...................................................................
CALCULATION OF VARIABLE ACCOUNT AND ADJUSTED PORTFOLIO
PERFORMANCE DATA............................................................................
Money Market Variable Account Yields......................................
Other Variable Account Yields.............................................
Average Annual Total Returns for the Variable Accounts....................
Non-Standard Variable Account Total Returns...............................
Adjusted Historic Portfolio Performance Data..............................
Effect of the Contract Fee on Performance Data............................
Other Information.........................................................
NET INVESTMENT FACTOR.......................................................................
VARIABLE ANNUITY PAYMENTS...................................................................
Assumed Interest Rate.....................................................
Amount of Variable Annuity Payments.......................................
Annuity Unit Value........................................................
ADDITION, DELETION OR SUBSTITUTION OF INVESTMENTS...........................................
Resolving Material Conflicts..............................................
TERMINATION OF PARTICIPATION AGREEMENTS.....................................................
The Alger American Fund...................................................
Fidelity Variable Insurance Products Fund.................................
Fidelity Variable Insurance Products Fund II..............................
OCC Accumulation Trust....................................................
Royce Capital Fund........................................................
SAFECO Resource Series Trust..............................................
SoGen Variable Funds, Inc.................................................
T. Rowe Price Fixed Income Series, Inc....................................
T. Rowe Price International Series, Inc...................................
Van Eck Worldwide Insurance Trust.........................................
VOTING RIGHTS...............................................................................
SAFEKEEPING OF ACCOUNT ASSETS...............................................................
DISTRIBUTION OF THE CONTRACTS...............................................................
LEGAL MATTERS...............................................................................
EXPERTS.....................................................................................
OTHER INFORMATION...........................................................................
FINANCIAL STATEMENTS........................................................................
</TABLE>

-i-

<PAGE> 51

ADDITIONAL CONTRACT PROVISIONS

THE CONTRACT

The entire contract is the Contract, the signed application, the data
page, the endorsements, options and all other attached papers. The statements
made in the application are deemed representations and not warranties. The
Company will not use any statement in defense of a claim or to void the Contract
unless it is contained in the application.

Any change in the Contract or waiver of its provisions must be in
writing and signed by the Company's President, a Vice President, Secretary or
Assistant Secretary. No other person -- no agent or Registered Representative --
has authority to change or waive any provision of this Contract.

Upon notice to the Contract Owner, the Company may modify the Contract
if necessary to permit the Contract or the Separate Account to comply with any
applicable law or regulation issued by a governmental agency; or if necessary to
assure continued qualification of the contract under the Internal Revenue Code
or other federal or state laws relating to retirement annuities or variable
annuity contracts; or if necessary to effect a change in the operation of the
Separate Account or to provide additional investment options.

In the event of such modifications, the Company will make the
appropriate endorsement to the Contract.

INCONTESTABILITY

The Company will not contest the Contract from the Date of Issue.

INCORRECT AGE OR SEX

The Company may require proof of age, sex, and right to payments before
making any life annuity payments. If the age or sex (if applicable) of the
annuitant has been stated incorrectly, the Annuity Start Date and the amount of
the annuity payments will be determined using the correct age and sex. If
misstatement of age or sex results in annuity payments that are too large, the
overpayments will be charged with interest compounded at 3% per year against
subsequent payments. If the Company has made payments that are too small, the
underpayments will be paid with interest compounded at 3% per year upon receipt
of notice of the underpayments.

NONPARTICIPATION

The Contract does not participate in the Company's surplus earnings or
profits.

-1-

<PAGE> 52

CALCULATION OF VARIABLE ACCOUNT AND ADJUSTED PORTFOLIO
PERFORMANCE DATA

The Company may advertise and disclose historic performance data for
the Variable Accounts, including yields, standard annual total returns, and
other nonstandard measures of performance, as well as adjusted historic
performance for the Portfolios. Such performance data will be computed, or
accompanied by performance data computed, in accordance with the standards
defined by the SEC.

MONEY MARKET VARIABLE ACCOUNT YIELDS

Advertisements and sales literature may quote the current annualized
yield of the Money Market Variable Account for a seven-day period in a manner
which does not take into consideration any realized or unrealized gains or
losses, or income other than investment income, on shares of the Money Market
Portfolio.

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 exclusive of income other than investment
income) at the end of the seven-day period in the value of a hypothetical
Variable Account under a Contract having a balance of one unit of the Money
Market Variable Account at the beginning of the period, dividing such net change
in Variable Account value by the value of the hypothetical Variable Account at
the beginning of the period to determine the base period return, and annualizing
this quotient on a 365-day basis. The net change in account value reflects: 1)
net income from the Portfolio attributable to the hypothetical Variable Account;
and 2) charges and deductions imposed under the Contract which are attributable
to the hypothetical Variable Account. These charges and deductions include the
per unit charges for: 1) the annualized Contract Fee; 2) the mortality and
expense risk charge; and 3) the asset-based administration charge. For purposes
of calculating current yields for a Contract, an average per unit Contract Fee
is used based on the $30 annualized Contract Fee which is deducted in four equal
payments at the end of each Contract Quarter. Current Yield is calculated
according to the following formula:

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

Where:

NCS = the net change in the value of the Money Market
Portfolio (exclusive of realized gains or losses on the
sale of securities and unrealized appreciation and
depreciation, and exclusive of income other than
investment income) for the seven-day period
attributable to a hypothetical Variable Account having
a balance of one Variable Account unit.

-2-

<PAGE> 53

ES = per unit expenses attributable to the hypothetical
Variable Account for the seven-day period.

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

The Company may also disclose the effective yield of the Money Market
Variable Account for the same seven-day period, determined on a compounded
basis. The effective yield is calculated by compounding the unannualized base
period return by adding one to the base return, raising the sum to a power equal
to 365 divided by 7, and subtracting one from the result.

365/7
Effective yield = (1 + ((NCS-ES)/UV)) - 1

Where:

NCS = the net change in the value of the Money Market
Portfolio (exclusive of realized gains or losses on
the sale of securities and unrealized appreciation
and depreciation, and exclusive of income other than
investment income) for the seven-day period
attributable to a hypothetical Variable Account
having a balance of one Variable Account unit.

ES = per unit expenses attributable to the hypothetical
Variable Account for the seven-day period.

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

Because of the charges and deductions imposed under the Contract, the
yield for the Money Market Variable Account is lower than the yield for the
Money Market Portfolio.

The current and effective yields on amounts held in the Money Market
Variable Account normally 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 Variable Account's actual yield is
affected by changes in interest rates on money market securities, average
portfolio maturity of the Money Market Portfolio, the types and quality of
securities held by the Money Market Portfolio and that Portfolio's operating
expenses. Yields on amounts held in the Money Market Variable Account may also
be presented for periods other than a seven-day period.

Yield calculations do not take into account the Withdrawal Charge that
is assessed on certain withdrawals of Contract Value. The amount of the
Withdrawal Charge depends on the Withdrawal Charge Option and the Free
Withdrawal Option chosen by the Owner at the time of purchase. See "Fees and
Charges" in the prospectus for further description of these options. No
Withdrawal Charge applies to Contract Value in excess of aggregate Premium
Payments.

-3-

<PAGE> 54

OTHER VARIABLE ACCOUNT YIELDS

Sales literature or advertisements may quote the current annualized
yield of one or more of the Variable Accounts (except the Money Market Variable
Account) under the Contract for 30-day or one-month periods. The annualized
yield of a Variable Account refers to income generated by the Variable Account
during a 30-day or one-month period and is assumed to be generated each period
over a 12-month period.

The yield is computed by: 1) dividing the net investment income of the
Portfolio attributable to the Variable Account units less Variable Account
expenses for the period; by 2) the maximum offering price per unit on the last
day of the period times the daily average number of units outstanding for the
period; and 3) compounding that yield for a six-month period; and 4) multiplying
that result by 2. Expenses attributable to the Variable Account include the
annualized Contract Fee, the asset-based administration charge and the mortality
and expense risk charge. The yield calculation assumes a Contract Fee of $30 per
year per Contract deducted at the end of each Contract Year. For purposes of
calculating the 30-day or one-month yield, an average Contract Fee based on the
average Contract Value in the Variable Account is used to determine the amount
of the charge attributable to the Variable Account for the 30-day or one-month
period. The 30-day or one-month yield is calculated according to the following
formula:

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

Where:

NI = net income of the Portfolio for the 30-day or one-month
period attributable to the Variable Account's units.

ES = expenses of the Variable Account for the 30-day or
one-month period.

U = the average number of units outstanding.

UV = the unit value at the close (highest) of the last day in
the 30-day or one-month period.

Because of the charges and deductions imposed under the Contracts, the
yield for the Variable Account is lower than the yield for the corresponding
Portfolio.

The yield on the amounts held in the Variable Accounts normally
fluctuates over time. THEREFORE, THE DISCLOSED YIELD FOR ANY GIVEN PAST PERIOD
IS NOT AN INDICATION OR REPRESENTATION OF FUTURE YIELDS OR RATES OF RETURN. A
Variable Account's actual yield is affected by the types and quality of
securities held by the corresponding Portfolio and that Portfolio's operating
expenses.

-4-

<PAGE> 55

AVERAGE ANNUAL TOTAL RETURNS FOR THE VARIABLE ACCOUNTS

Sales literature or advertisements may also quote average annual total
returns for one or more of the Variable Accounts for various periods of time. If
the Company advertises total return for the Money Market Variable Account, such
advertisements and sales literature will include the statement that yield more
closely reflects current earnings than total return.

When a Variable Account has been in operation for 1, 5, and 10 years,
respectively, the average annual total return for these periods will be
provided. Average annual total returns for other periods of time may, from time
to time, also be disclosed.

Standard average annual total returns represent the average annual
compounded rates of return that would equate an initial investment of $1,000
under a Contract to the redemption value of that investment as of the last day
of each of the periods. The ending date for each period for which total return
quotations are provided will be for the most recent calendar quarter-end
practicable, considering the type of the communication and the media through
which it is communicated.

Standard average annual total returns are calculated using Variable
Account unit values which the Company calculates on each valuation day based on
the performance of the Variable Account's underlying Portfolio, the deductions
for the mortality and expense risk charge, the deductions for the asset-based
administration charge and the annualized Contract Fee. The calculation assumes
that the Contract Fee is $7.50 per quarter per Contract deducted at the end of
each Contract quarter. For purposes of calculating average annual total return,
an average per-dollar per-day Contract Fee attributable to the hypothetical
Variable Account for the period is used. The calculation also assumes total
withdrawal of the Contract at the end of the period for the return quotation and
will take into account the Withdrawal Charge applicable to the Contract that is
assessed on certain withdrawals of Contract Value.

-5-

<PAGE> 56

Standard total return is calculated according to the following formula:

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

Where:

TR = the average annual total return net of Variable Account
recurring charges.

ERV = the ending redeemable value (net of any applicable
Withdrawal Charge) of the hypothetical Variable Account
at the end of the period.

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

N = the number of years in the period.

NON-STANDARD VARIABLE ACCOUNT TOTAL RETURNS

Sales literature or advertisements may also quote average annual total
returns for the Variable Accounts that do not reflect any Withdrawal Charges.
Such non-standard total returns are calculated in exactly the same way as
average annual total returns described above, except that the ending redeemable
value of the hypothetical Variable Account for the period is replaced with an
ending value for the period that does not take into account any Withdrawal
Charges.

The Company may disclose cumulative total returns in conjunction with
the standard formats described above. The cumulative total returns will be
calculated using the following formula:

CTR = (ERV/P) - 1

Where:

CTR = The cumulative total return net of Variable Account
recurring charges for the period.

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

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

ADJUSTED HISTORIC PORTFOLIO PERFORMANCE DATA

Sales literature or advertisements may quote adjusted yields and total
returns for the Portfolios since their inception reduced by some or all of the
fees and charges under the Contract. Such adjusted historic Portfolio
performance may include data that precedes the

-6-
<PAGE> 57

inception dates of the Variable Accounts. This data is designed to show the
performance that would have resulted if the Contract had been in existence
during that time.

Non-standard performance data will only be disclosed if the standard
performance data for the required periods is also disclosed.

EFFECT OF THE CONTRACT FEE ON PERFORMANCE DATA

The Contract provides for a $7.50 Contract Fee to be deducted at the
end of each Contract Quarter from the Fixed and Variable Accounts based on the
proportion that the value of each such Account bears to the total Contract
Value. For purposes of reflecting the Contract Fee in yield and total return
quotations, the Contract Fee is converted into a per-dollar per-day charge based
on the average Contract Value in the Separate Account of all Contracts on the
last day of the period for which quotations are provided. The per-dollar per-day
average charge will then be adjusted to reflect the basis upon which the
particular quotation is calculated.

OTHER INFORMATION

The following is a partial list of those publications which may be
cited in the Funds' advertising shareholder materials which contain articles
describing investment results or other data relative to one or more of the
Variable Accounts. Other publications may also be cited.

<TABLE>
<CAPTION>
<S> <C>
Broker World Financial World
Across the Board Advertising Age
American Banker Barron's
Best's Review Business Insurance
Business Month Business Week
Changing Times Consumer Reports
Economist Financial Planning
Forbes Fortune
Inc. Institutional Investor
Insurance Forum Insurance Sales
Insurance Week Journal of Accountancy
Journal of the American Society of Journal of Commerce
CLU & ChFC
Life Insurance Selling Life Association News
MarketFacts Manager's Magazine
National Underwriter Money
Morningstar, Inc. Nation's Business
New Choices (formerly 50 Plus) New York Times
Pension World Pensions & Investments
Rough Notes Round the Table
U.S. Banker VARDs
Wall Street Journal Working Woman
</TABLE>

-7-

<PAGE> 58

ADJUSTED HISTORICAL PORTFOLIO PERFORMANCE FIGURES

The charts below show "adjusted" historical performance data for the
Portfolios, including for periods prior to the inception of the Variable
Accounts, based on the performance of each Portfolio since its inception date,
with a level of charges equal to those currently assessed under the Contracts.
THESE FIGURES ARE NOT AN INDICATION OF THE FUTURE PERFORMANCE OF THE VARIABLE
ACCOUNTS. Some of the figures reflect the waiver of advisory fees and
reimbursement of other expenses for part or all of the periods indicated.

Adjusted historical standard average annual total returns for periods
since the inception of each Portfolio are as follows. These figures include: (a)
the daily deduction of the mortality and expenses charges at an annual rate of
1.25% (except that, prior to the inception of the corresponding Variable
Account, deductions are monthly); (b) the daily deduction of the annual
administrative expenses charge at an annual rate of 0.15% (except that, prior to
the inception of the corresponding Variable Account, deductions are monthly);
(c) the quarterly deduction of the administration charge of $7.50 adjusted for
average account size; and (d) the deduction of the applicable contingent
deferred sales load for the Visionary contract and the Date of Issue Withdrawal
Charge Option under the Visionary Choice contract.

<TABLE>
<CAPTION>
==============================================================================================================================
PORTFOLIO For the For the For the For the For the period
(Date of commencement of 1-year 3-year 5 -year 10-year from
operation of Corresponding period period period period commencement
Portfolio) ended ended ended ended of Portfolio
12/31/97 12/31/97 12/31/97 12/31/97 operations
to 12/31/97
- ------------------------------------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C>
ALGER AMERICAN FUND
- ------------------------------------------------------------------------------------------------------------------------------

MidCap Growth (5/3/93) 6.31% 21.34% N/A N/A 20.65%
Small Capitalization (9/20/88) 2.83% 17.04% 11.05% N/A 18.08%
- ------------------------------------------------------------------------------------------------------------------------------

FIDELITY VIP FUND
- ------------------------------------------------------------------------------------------------------------------------------

Equity Income (10/9/86) 19.23% 22.28% 17.77% 14.96% 12.94%
Growth (10/9/86) 14.67% 21.77% 16.04% 15.76% 14.13%
Money Market (4/2/82)* -2.62% 1.92% 2.14% 3.84% 5.05%
- ------------------------------------------------------------------------------------------------------------------------------

FIDELITY VIP FUND II
- ------------------------------------------------------------------------------------------------------------------------------

Asset Manager (9/6/89) 11.88% 14.00% 10.47% N/A 11.04%
Contrafund (1/3/95) 15.32% N/A N/A N/A 25.40%
Index 500 (8/27/92) 23.91% 27.68% 17.57% N/A 17.62%
Investment Grade Bond (12/5/88) 0.67% 6.09% 3.13% N/A 4.08%
- ------------------------------------------------------------------------------------------------------------------------------

OCC ACCUMULATION TRUST
- ------------------------------------------------------------------------------------------------------------------------------

Managed (8/31/88) 13.50% 26.77% 17.58% N/A 18.91%
Small Cap (8/31/88) 13.46% 15.28% 12.10% N/A 13.97%
- ------------------------------------------------------------------------------------------------------------------------------

ROYCE CAPITAL FUND
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>

-8-
<PAGE> 59

<TABLE>
<CAPTION>
============================================================================================================================
PORTFOLIO For the For the For the For the For the period
(Date of commencement of 1-year 3-year 5 -year 10-year from
operation of Corresponding period period period period commencement
Portfolio) ended ended ended ended of Portfolio
12/31/97 12/31/97 12/31/97 12/31/97 operations
to 12/31/97
- ----------------------------------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C>
Royce Micro-Cap (12/27/96) 12.45% N/A N/A N/A 12.53%
- ----------------------------------------------------------------------------------------------------------------------------

SAFECO RESOURCE SERIES TRUST
- ----------------------------------------------------------------------------------------------------------------------------

Equity (11/6/86) 16.03% 17.23% 17.15% 16.00% 13.73%
Growth (12/31/92) 35.47% 35.88% 30.24% N/A 30.24%
- ----------------------------------------------------------------------------------------------------------------------------

SoGEN VARIABLE FUNDS, INC.
- ----------------------------------------------------------------------------------------------------------------------------

SoGen Overseas (2/3/97) N/A N/A N/A N/A -10.61%
- ----------------------------------------------------------------------------------------------------------------------------

T. ROWE PRICE FIXED INCOME SERIES, INC.
- ----------------------------------------------------------------------------------------------------------------------------

Limited-Term Bond (5/13/94) 5.40% 2.76% N/A N/A 2.74%
- ----------------------------------------------------------------------------------------------------------------------------

T. ROWE PRICE INTERNATIONAL SERIES, INC.
- ----------------------------------------------------------------------------------------------------------------------------

International Stock (3/31/94) -6.95% 5.06% N/A N/A 4.22%
- ----------------------------------------------------------------------------------------------------------------------------

VAN ECK WORLDWIDE INSURANCE TRUST
- ----------------------------------------------------------------------------------------------------------------------------

Worldwide Hard Assets (8/31/89) -9.29% 1.72% 10.44% N/A 4.07%
============================================================================================================================
</TABLE>

* Yield more closely reflects current earnings of the Money Market Portfolio
than its total return.

Adjusted historical non-standard average annual total returns for
periods since the inception of each Portfolio are as follows. These figures
include: (a) the daily deduction of the mortality and expenses charge at an
annual rate of 1.25% (except that, prior to the inception of the corresponding
Variable Account, deductions are monthly); and (b) and the daily deduction of
the annual administrative expenses charge at the annual rate of 0.15% (except
that, prior to the inception of the corresponding Variable Account, deductions
are monthly). These figures do not reflect the quarterly deduction of the
administration charge and any applicable contingent deferred sales load which,
if deducted, would reduce performance.

<TABLE>
<CAPTION>
============================================================================================================================
For the period from
PORTFOLIO For the For the For the For the commencement of
(Date of commencement of 1-year 3-year 5 -year 10-year Portfolio
operation of Corresponding period period period period operations
Portfolio) ended ended ended ended to 12/31/97
12/31/97 12/31/97 12/31/97 12/31/97
- ----------------------------------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C>
ALGER AMERICAN FUND
- ----------------------------------------------------------------------------------------------------------------------------

MidCap Growth (5/3/93) 13.42% 22.88% N/A N/A 21.47%
Small Capitalization (9/20/88) 9.85% 18.80% 12.05% N/A 18.13%
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>

-9-
<PAGE> 60

<S> <C> <C> <C> <C> <C>
FIDELITY VIP FUND
- ----------------------------------------------------------------------------------------------------------------------------

Equity Income (10/9/86) 26.34% 23.91% 18.57% 15.02% 13.01%
Growth (10/9/86) 21.78% 23.41% 16.88% 15.82% 14.20%
Money Market (4/2/82) * 4.03% 4.21% 3.49% 3.93% 5.12%
- ----------------------------------------------------------------------------------------------------------------------------

FIDELITY VIP FUND II
- ----------------------------------------------------------------------------------------------------------------------------

Asset Manager (9/6/89) 18.99% 15.86% 11.48% N/A 11.23%
Contrafund (1/3/95) 22.43% N/A N/A N/A 26.96%
Index 500 (8/27/92) 31.02% 29.16% 18.38% N/A 18.34%
Investment Grade Bond (12/5/88) 7.55% 8.22% 4.44% N/A 4.17%
- ----------------------------------------------------------------------------------------------------------------------------

OCC ACCUMULATION TRUST
- ----------------------------------------------------------------------------------------------------------------------------

Managed (8/31/88) 20.61% 28.29% 18.39% N/A 18.97%
Small Cap (8/31/88) 20.56% 17.10% 13.06% N/A 14.04%
- ----------------------------------------------------------------------------------------------------------------------------

ROYCE CAPITAL FUND
- ----------------------------------------------------------------------------------------------------------------------------

Royce Micro-Cap (12/27/96) 19.56% N/A N/A N/A 19.55%
- ----------------------------------------------------------------------------------------------------------------------------

SAFECO RESOURCE SERIES TRUST
- ----------------------------------------------------------------------------------------------------------------------------

Equity (11/6/86) 23.14% 18.99% 17.96% 16.06% 13.80%
Growth (12/31/92) 42.59% 37.22% 30.80% N/A 30.80%
- ----------------------------------------------------------------------------------------------------------------------------

SoGEN VARIABLE FUNDS, INC.
- ----------------------------------------------------------------------------------------------------------------------------

SoGen Overseas (2/3/97) N/A N/A N/A N/A -3.88%
- ----------------------------------------------------------------------------------------------------------------------------

T. ROWE PRICE FIXED INCOME SERIES, INC.
- ----------------------------------------------------------------------------------------------------------------------------

Limited-Term Bond (5/13/94) 12.51% 5.02% N/A N/A 4.60%
- ----------------------------------------------------------------------------------------------------------------------------

T. ROWE PRICE INTERNATIONAL SERIES, INC.
- ----------------------------------------------------------------------------------------------------------------------------

International Stock (3/31/94) -0.60% 7.22% N/A N/A 5.94%
- ----------------------------------------------------------------------------------------------------------------------------

VAN ECK WORLDWIDE INSURANCE TRUST
- ----------------------------------------------------------------------------------------------------------------------------

Worldwide Hard Assets (8/31/89) -3.10% 4.02% 11.44% N/A 4.34%
============================================================================================================================
</TABLE>

* Yield more closely reflects current earnings of the Money Market Portfolio
than its total return.

Adjusted historical standard cumulative total returns for periods since
the inception of each Portfolio are as follows. These figures include: (a) the
daily deduction of the mortality and expenses charge at an annual rate of 1.25%
(except that, prior to the inception of the corresponding Variable Account,
deductions are monthly); (b) the daily deduction of the annual

-10-

<PAGE> 61

administrative expenses charge at an annual rate of 0.15% (except that, prior to
the inception of the corresponding Variable Account, deductions are monthly);
(c) the quarterly deduction of an administration charge of $7.50 adjusted for
average account size; and (d) the applicable contingent deferred sales load for
the Visionary contract and for the Date of Issue Withdrawal Charge Option under
the Visionary Choice contract.

<TABLE>
<CAPTION>
============================================================================================================================
For the period from
PORTFOLIO For the For the For the For the commencement of
(Date of commencement of 1-year 3-year 5-year 10-year Portfolio
operation of Corresponding period period period period operations
Portfolio) ended ended ended ended to 12/31/97
12/31/97 12/31/97 12/31/97 12/31/97
- ----------------------------------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C>
ALGER AMERICAN FUND
- ----------------------------------------------------------------------------------------------------------------------------

MidCap Growth (5/3/93) 6.31% 78.20% N/A N/A 139.92%
Small Capitalization (9/20/88) 2.83% 60.31% 68.91% N/A 367.59%
- ----------------------------------------------------------------------------------------------------------------------------

FIDELITY VIP FUND
- ----------------------------------------------------------------------------------------------------------------------------

Equity Income (10/9/86) 19.23% 82.85% 126.57% 303.05% 291.97%
Growth (10/9/86) 14.67% 80.56% 110.39% 332.14% 341.24%
Money Market (4/2/82) * -2.62% 5.86% 11.14% 45.82% 117.92%
- ----------------------------------------------------------------------------------------------------------------------------

FIDELITY VIP FUND II
- ----------------------------------------------------------------------------------------------------------------------------

Asset Manager (9/6/89) 11.88% 48.15% 64.52% N/A 138.86%
Contrafund (1/3/95) 15.32% N/A N/A N/A 96.84%
Index 500 (8/27/92) 23.91% 108.17% 124.62% N/A 138.03%
Investment Grade Bond (12/5/88) 0.67% 19.42% 16.67% N/A 43.68%
- ----------------------------------------------------------------------------------------------------------------------------

OCC ACCUMULATION TRUST
- ----------------------------------------------------------------------------------------------------------------------------

Managed (8/31/88) 13.50% 103.72% 124.74% N/A 403.69%
Small Cap (8/31/88) 13.46% 53.19% 77.05% N/A 238.86%
- ----------------------------------------------------------------------------------------------------------------------------

ROYCE CAPITAL FUND
- ----------------------------------------------------------------------------------------------------------------------------

Royce Micro-Cap (12/27/96) 12.45% N/A N/A N/A 12.67%
- ----------------------------------------------------------------------------------------------------------------------------

SAFECO RESOURCE SERIES TRUST
- ----------------------------------------------------------------------------------------------------------------------------

Equity (11/6/86) 16.03% 61.09% 120.62% 341.15% 319.77%
Growth (12/31/92) 35.47% 150.67% 274.70% N/A 274.70%
- ----------------------------------------------------------------------------------------------------------------------------

SoGEN VARIABLE FUNDS, INC.
- ----------------------------------------------------------------------------------------------------------------------------

SoGen Overseas (2/3/97) N/A N/A N/A N/A -9.67%
- ----------------------------------------------------------------------------------------------------------------------------

T. ROWE PRICE FIXED INCOME SERIES, INC.
- ----------------------------------------------------------------------------------------------------------------------------

Limited-Term Bond (5/13/94) 5.40% 8.51% N/A N/A 10.34%
- ----------------------------------------------------------------------------------------------------------------------------

T. ROWE PRICE INTERNATIONAL SERIES, INC.
- ----------------------------------------------------------------------------------------------------------------------------

International Stock (3/31/94) -6.95% 15.96% N/A N/A 16.78%
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>

-11-

<PAGE> 62

<S> <C> <C> <C> <C> <C>
VAN ECK WORLDWIDE INSURANCE TRUST
- ----------------------------------------------------------------------------------------------------------------------------

Worldwide Hard Assets (8/31/89) -9.29% 5.26% 64.32% N/A 39.43%
============================================================================================================================
</TABLE>

* Yield more closely reflects current earnings of the Money Market Portfolio
than its total return.

Adjusted historical non-standard cumulative total returns for periods
since the inception of each Portfolio are as follows. These figures include: (a)
the daily deduction of the mortality and expenses charges at an annual rate of
1.25% (except that, prior to the inception of the corresponding Variable
Account, deductions are monthly); and (b) the daily deduction of the
administrative expenses charge at an annual rate of 0.15% (except that, prior to
the inception of the corresponding Variable Account, deductions are monthly).
These figures do not reflect the quarterly deduction of the administration
charge and the applicable contingent deferred sales load which, if deducted,
would reduce performance. Nonstandard performance data will only be disclosed if
standard performance data for the required periods is also disclosed.

<TABLE>
<CAPTION>
============================================================================================================================
For the period from
PORTFOLIO For the For the For the For the commencement of
(Date of commencement of 1-year 3-year 5-year 10-year Portfolio
operation of Corresponding period period period period operations
Portfolio) ended ended ended ended to 12/31/97
12/31/97 12/31/97 12/31/97 12/31/97
- ----------------------------------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C>
ALGER AMERICAN FUND
- ----------------------------------------------------------------------------------------------------------------------------

MidCap Growth (5/3/93) 13.42% 85.56% N/A N/A 147.60%
Small Capitalization (9/20/88) 9.85% 67.65% 76.60% N/A 369.44%
- ----------------------------------------------------------------------------------------------------------------------------

FIDELITY VIP FUND
- ----------------------------------------------------------------------------------------------------------------------------

Equity Income (10/9/86) 26.34% 90.25% 134.37% 305.37% 294.71%
Growth (10/9/86) 21.78% 87.95% 118.16% 334.45% 344.01%
Money Market (4/2/82) * 4.03% 13.18% 18.69% 47.02% 119.48%
- ----------------------------------------------------------------------------------------------------------------------------

FIDELITY VIP FUND II
- ----------------------------------------------------------------------------------------------------------------------------

Asset Manager (9/6/89) 18.99% 55.52% 72.20% N/A 142.23%
Contrafund (1/3/95) 22.43% N/A N/A N/A 104.24%
Index 500 (8/27/92) 31.02% 115.60% 132.49% N/A 145.98%
Investment Grade Bond (12/5/88) 7.55% 26.75% 24.24% N/A 44.81%
- ----------------------------------------------------------------------------------------------------------------------------

OCC ACCUMULATION TRUST
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>

-12-

<PAGE> 63

<TABLE>
<CAPTION>
============================================================================================================================
For the period from
PORTFOLIO For the For the For the For the commencement of
(Date of commencement of 1-year 3-year 5-year 10-year Portfolio
operation of Corresponding period period period period operations
Portfolio) ended ended ended ended to 12/31/97
12/31/97 12/31/97 12/31/97 12/31/97
- ----------------------------------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C>
Managed (8/31/88) 20.61% 111.12% 132.57% N/A 406.04%
Small Cap (8/31/88) 20.56% 60.58% 84.76% N/A 240.76%
- ----------------------------------------------------------------------------------------------------------------------------

ROYCE CAPITAL FUND
- ----------------------------------------------------------------------------------------------------------------------------

Royce Micro-Cap (12/27/96) 19.56% N/A N/A N/A 19.78%
- ----------------------------------------------------------------------------------------------------------------------------

SAFECO RESOURCE SERIES TRUST
- ----------------------------------------------------------------------------------------------------------------------------

Equity (11/6/86) 23.14% 68.48% 128.38% 343.39% 322.44%
Growth (12/31/92) 42.59% 158.36% 282.79% N/A 282.79%
- ----------------------------------------------------------------------------------------------------------------------------

SoGEN VARIABLE FUNDS, INC.
- ----------------------------------------------------------------------------------------------------------------------------

SoGen Overseas (2/3/97) N/A N/A N/A N/A -3.53%
- ----------------------------------------------------------------------------------------------------------------------------

T. ROWE PRICE FIXED INCOME SERIES, INC.
- ----------------------------------------------------------------------------------------------------------------------------

Limited-Term Bond (5/13/94) 12.51% 15.84% N/A N/A 17.75%
- ----------------------------------------------------------------------------------------------------------------------------

T. ROWE PRICE INTERNATIONAL SERIES, INC.
- ----------------------------------------------------------------------------------------------------------------------------

International Stock (3/31/94) -0.60% 23.28% N/A N/A 24.18%
- ----------------------------------------------------------------------------------------------------------------------------

VAN ECK WORLDWIDE INSURANCE TRUST
- ----------------------------------------------------------------------------------------------------------------------------

Worldwide Hard Assets (8/31/89) -3.10% 12.56% 71.86% N/A 42.51%
============================================================================================================================
</TABLE>

*Yield more closely reflects current earnings of the Money Market Portfolio than
its total return.

NET INVESTMENT FACTOR

The Net Investment Factor is an index that measures the investment
performance of a Variable Account from one Business Day to the next. Each
Variable Account has its own Net Investment Factor, which may be greater or less
than one. The Net Investment Factor for each Variable Account equals 1 plus the
fraction obtained by dividing (a) by (b) where:

(a) is the net result of:

1. the investment income, dividends, and capital gains,
realized or unrealized, credited at the end of the
current Business Day; PLUS

2. the amount credited or released from reserves for taxes
attributed to the operation of the Variable Account;
MINUS

-13-

<PAGE> 64

3. the capital losses, realized or unrealized, charged at
the end of the current Business Day, MINUS

4. any amount charged for taxes or any amount set aside
during the Business Day as a reserve for taxes
attributable to the operation or maintenance of the
Variable Account; MINUS

5. the amount charged for mortality and expense risk on
that Business Day; MINUS

6. the amount charged for administration on that
Business Day; and

(b) is the value of the assets in the Variable Account at the end
of the preceding Business Day, adjusted for allocations and
transfers to and withdrawals and transfers from the Variable
Account occurring during that preceding Business Day.

VARIABLE ANNUITY PAYMENTS

The dollar amount of the first variable annuity payment is determined
in the same manner as that of a fixed annuity payment. Therefore, for any
particular amount applied to a variable payout plan, the dollar amount of the
first variable annuity payment and the first fixed annuity payment (assuming the
fixed payment is based on the minimum guaranteed 3.0% interest rate) will be the
same. Later variable annuity payments, however, will vary to reflect the net
investment performance of the Variable Account(s) selected by the Owner or the
Annuitant.

Annuity units measure the net investment performance of a Variable
Account for purposes of determining the amount of variable annuity payments. On
the Annuity Start Date, the adjusted Contract Value for each Variable Account is
used to purchase annuity units at the annuity unit value for that Variable
Account. The number of annuity units in each Variable Account then remains fixed
unless an exchange of annuity units is made as described below. Each Variable
Account has a separate annuity unit value that changes each Business Day in
substantially the same way as does the value of an accumulation unit of a
Variable Account.

The dollar value of each variable annuity payment after the first is
determined by multiplying the number of annuity units of a particular Variable
Account by the annuity unit value for that Variable Account on the Business Day
immediately preceding the date of each payment. If the net investment return of
the Variable Account over a payment period equals the pro-rated portion of the
annual assumed interest rate ("AIR"), then the payment for that Variable Account
over the period will equal the prior payment. If the net investment return
exceeds an annualized AIR for a payment period, then the payment for that period
will be greater than the prior payment. Similarly, if the net investment return
for a period falls short of the AIR, the payment for that period will be less
than the prior payment.

-14-

<PAGE> 65

Neither expenses incurred by the Company (other than taxes on the
investment return) nor mortality actually experienced will adversely affect the
dollar amount of variable annuity payments to any Annuitant once variable
annuity payments begin.

ASSUMED INTEREST RATE ("AIR") (CALLED THE "BENCHMARK RATE" IN THE PROSPECTUS)

You may choose an AIR of 3.0%, 4.0% or 5.0% at the time you select a
variable payout plan. The AIR is used to determine the first monthly payment per
thousand dollars of applied value. THIS RATE DOES NOT BEAR ANY RELATIONSHIP TO
THE ACTUAL NET INVESTMENT EXPERIENCE OF ANY VARIABLE ACCOUNT.

The interaction between the AIR you choose and the net performance of
each Portfolio in which you invest will effect subsequent annuity payments. A
higher AIR will produce a higher initial annuity payment, but later payments
will rise more slowly and fall more rapidly than if a lower AIR is chosen. Each
variable annuity payment will be smaller than, equal to, or greater than the
immediately preceding payment, depending on the Portfolio's actual net
investment return for that period.

A Portfolio's performance (reduced by the mortality and expense risk
charge and the administrative charge) must grow more than the AIR you chose in
order to create a larger payment, and must be at least equal to the AIR in order
to avoid a decrease in variable annuity payments. Therefore, a Portfolio's
annualized investment return must be at least 4.4%, 5.4% or 6.4%, respectively,
for annuity payments with AIRs of 3%, 4% or 5% to remain level.

AMOUNT OF VARIABLE ANNUITY PAYMENTS

The discussion concerning the amount of variable annuity payments which
follows this section is based on an AIR of 3.0% per year. The amount of the
first variable annuity payment to a payee will depend on: (1) the dollar amount
(i.e., the adjusted Contract Value, the Surrender Value, the death benefit)
applied to the variable annuity payment as of the Annuity Start Date, (2) the
annuity payout plan option selected, (3) the age and sex (if applicable) of the
annuitant; and (4) the AIR you select. The Contract contains tables indicating
the dollar amount of the first annuity payment under each annuity payment option
for each $1,000 applied at various ages. These tables are based upon the 1983
Mortality Table a (ALB) with 12 years mortality improvement of projection Scale
G (promulgated by the Society of Actuaries) and an assumed investment rate of
3.0% per year.

The portion of the first monthly variable annuity payment derived from
a Variable Account is divided by the annuity unit value for that Variable
Account (calculated as of the date of the first monthly payment). The number of
annuity units will remain fixed during the annuity period, assuming the
Annuitant does not exchange annuity units for units of another Variable Account
or to provide a fixed annuity payment.

-15-

<PAGE> 66

In any subsequent month, the dollar amount of the variable annuity
payment derived from each Variable Account is determined by multiplying the
number of annuity units for that Variable Account attributable to that Contract
by the value of such annuity unit at the end of the Business Day immediately
preceding the date of payment.

The annuity unit value will increase or decrease from one payment to
the next in proportion to the net investment return of the Variable Account or
Variable Accounts supporting the variable annuity payments, less an adjustment
to neutralize the 3.0% AIR referred to above. Therefore, the dollar amount of
annuity payments after the first will vary with the amount by which the net
investment return of the appropriate Variable Accounts is greater or less than
3.0% per year. For example, for a Contract using only one Variable Account to
generate variable annuity payments, if that Variable Account has a cumulative
net investment return of 5% over a one year period, the first annuity payment in
the next year will be approximately 2% greater than the payment on the same date
in the preceding year. If such net investment return is 1% over a one year
period, the first annuity payment in the next year will be approximately 2
percentage points less than the payment on the same date in the preceding year.
(See also "Variable Annuity Payments" in the Prospectus.)

ANNUITY UNIT VALUE

The value of an annuity unit is calculated at the same time that the
value of an accumulation unit is calculated and is based on the same values for
fund shares and other assets and liabilities. (See "Separate Account Value" in
the Prospectus.) The annuity unit value for each Variable Account's first
Business Day was set at $100. The annuity unit value for a Variable Account is
calculated for each subsequent Business Day by dividing (1) by (2), multiplying
by (3) and then multiplying by (4), where:

(1) is the accumulation unit value for the current Business Day;

(2) is the accumulation unit value for the immediately preceding
Business Day;

(3) is the annuity unit value for the immediately preceding
Business Day; and

(4) is a special factor designed to compensate for the AIR rate of
3.0% built into the table used to compute the first variable
annuity payment.

The following illustrations show, by use of hypothetical examples, the
method of determining the annuity unit value and the amount of several variable
annuity payments based on one Variable Account.

ILLUSTRATION OF CALCULATION OF ANNUITY UNIT VALUE

1. Accumulation unit value for current

-16-

<PAGE> 67

<TABLE>
<C> <S> <C>
Business Day.................................................................... $11.15
2. Accumulation unit value for immediately preceding Business Day..................... $11.10
3. Annuity unit value for immediately preceding
Business Day................................................................... $105.00
4. Factor to compensate for the assumed
investment rate of 3.0%.......................................................... .9975
5. Annuity unit value of current valuation
period ((1) / (2)) x (3) x (4)............................................... $105.2093

<CAPTION>
ILLUSTRATION OF VARIABLE ANNUITY PAYMENTS

<C> <S> <C>
1. Number of accumulation units at Annuity Start Date................................. 10,000
2. Accumulation unit value ......................................................... $11.1500
3. Adjusted Contract Value (1)x(2).................................................. $111,500
4. First monthly annuity payment per $1,000
of adjusted Contract Value....................................................... $5.89
5. First monthly annuity payment (3)x(4)/1,000 ...................................... $656.74
6. Annuity unit value.............................................................. $105.2093
7. Number of annuity units (5)/(6).................................................... 6.2422
8. Assume annuity unit value for second month equal to............................. $105.3000
9. Second monthly annuity payment (7)x(8)............................................ $657.30
10. Assume annuity unit value for third month equal to.............................. $104.9000
11. Third monthly annuity payment (7)x(10)............................................ $654.81
</TABLE>

ADDITION, DELETION OR SUBSTITUTION OF INVESTMENTS

In the event of any such substitution or change, the Company may (by
appropriate endorsement, if necessary) change the Contract to reflect the
substitution or change. If the Company considers it to be in the best interest
of Owners and Annuitants, and subject to any approvals that may be required
under applicable law, the Separate Account may be operated as a management
investment company under the 1940 Act, it may be deregistered under that Act if
registration is no longer required, it may be combined with other of the
Company's separate accounts, or the assets may be transferred to another
separate account. In addition, the Company may, when permitted by law, restrict
or eliminate any voting rights the Owner has under the Contracts.

RESOLVING MATERIAL CONFLICTS

The Funds currently sell shares to registered separate accounts of
insurance companies other than Bankers Life to support other variable annuity
contracts and variable life insurance contracts. In addition, some of the Funds
may in the future be sold to the Company's other separate accounts and may in
the future be sold to separate accounts of other affiliated life insurance
companies to support other variable annuity or variable life insurance
contracts.

-17-

<PAGE> 68

Moreover, shares of some of the Funds may in the future be sold to qualified
retirement plans. As a result, there is a possibility that an irreconcilable
material conflict may arise between the Owner's interests in owning a Contract
whose Contract Value is allocated to the Separate Account and of persons owning
Contracts whose Contract Values are allocated to one or more other separate
accounts investing in any one of the Funds. There is also the possibility that a
material conflict may arise between the interests of Contract Owners generally,
or certain classes of Contract Owners, and participating qualified retirement
plans or participants in such retirement plans.

The Company currently does not foresee any disadvantages to the Owner
that would arise from the sale of Fund shares to support variable life insurance
contracts or variable annuity contracts of other companies or to qualified
retirement plans. However, the management of the Funds will each monitor events
related to their Fund in order to identify any material irreconcilable conflicts
that might possibly arise as a result of such Fund offering its shares to (1)
support both variable life insurance contracts and variable annuity contracts,
or (2) support the variable life insurance contracts and/or variable annuity
contracts issued by various unaffiliated insurance companies. In addition, the
management of the Funds will monitor the Funds in order to identify any material
irreconcilable conflicts that might possibly arise as a result of the sale of
its shares to qualified retirement plans, if applicable. In the event of such a
conflict, the management of the appropriate Fund would determine what action, if
any, should be taken in response to the conflict. In addition, if the Company
believes that the response of the Funds to any such conflict does not
sufficiently protect the Owner, the Company will take appropriate action on its
own, including withdrawing the Separate Account's investment in such Funds, as
appropriate. (See the individual Portfolio prospectuses for greater detail.)

TERMINATION OF PARTICIPATION AGREEMENTS

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

THE ALGER AMERICAN FUND. This agreement provides for termination: (1)
on six months' advance written notice by any party; (2) at Bankers Life's option
if shares of any Portfolio are not reasonably available to meet the requirements
of the Contracts or are not registered, issued or sold in accordance with
applicable state and/or federal law; (3) at Bankers Life's option if any
Portfolio ceases to be qualified as a Regulated Investment Company under
Subchapter M of the Internal Revenue Code (the "Code"); (4) at Bankers Life's
option if any Portfolio fails to meet certain diversification requirements of
the Code; (5) at the option of the Fund or Fred Alger & Company, Inc. (the
"Distributor"), upon a determination that Bankers Life has suffered a material
adverse change in its business, operations, financial condition or prospects or
is the subject of material adverse publicity; (6) by Bankers Life upon a
determination that either the Fund or the Distributor has suffered a material
adverse change in its business, operations, financial condition or prospects or
is the subject of material adverse publicity; (7) by the Fund or the Distributor
if the Contracts cease to qualify as annuity contracts or endowment contracts

-18-

<PAGE> 69

under the Code or if the Contracts are not registered, issued or sold in
accordance with state and/or federal law; or (8) on 180 days written notice upon
a determination by any party that a material irreconcilable conflict exists.

FIDELITY VARIABLE INSURANCE PRODUCTS FUND and FIDELITY VARIABLE
INSURANCE PRODUCTS FUND II. These agreements provide for termination: (1) on six
months' advance written notice by any party; (2) at Bankers Life's option if
shares of any Portfolio are not reasonably available to meet the requirements of
the Contracts or are not registered, issued or sold in accordance with
applicable state and/or federal law; (3) at Bankers Life's option if any
Portfolio ceases to be qualified as a Regulated Investment Company under
Subchapter M of the Code; (4) at Bankers Life's option if any Portfolio fails to
meet certain diversification requirements of the Code; (5) at the option of the
Fund or Fidelity Distributors Corporation (the "Underwriter") upon a
determination that Bankers Life has suffered a material adverse change in its
business, operations, financial condition or prospects or is the subject of
material adverse publicity; (6) by Bankers Life upon a determination that either
the Fund or the Underwriter has suffered a material adverse change in its
business, operations, financial condition or prospects or is the subject of
material adverse publicity; or (7) by the Fund or the Underwriter if Bankers
Life provides written notice of its intent to use another investment company as
a funding vehicle for the Contracts.

OCC ACCUMULATION TRUST. This agreement provides for termination: (1) on
six months' advance written notice by any party; (2) at Bankers Life's option if
shares of any Portfolio are not reasonably available to meet the requirements of
the Contracts; (3) at Bankers Life's option if any Portfolio ceases to be
qualified as a Regulated Investment Company under Subchapter M of the Code; (4)
at Bankers Life's option if any Portfolio fails to meet certain diversification
requirements of the Code; (5) at the option of the Fund upon a determination
that Bankers Life has suffered a material adverse change in its business,
operations, financial condition or prospects or is the subject of material
adverse publicity; (6) by Bankers Life upon a determination that the Fund has
suffered a material adverse change in its business, operations, financial
condition or prospects or is the subject of material adverse publicity; (7) by
the Fund or Bankers Life if Bankers Life receives necessary regulatory approvals
to substitute shares of another investment company as a funding vehicle for the
Contracts; (8) by the Fund upon institution of certain proceedings against
Bankers Life; (9) at Bankers Life's option upon institution of certain
administrative proceedings against the Fund or the Underwriter; (10) by the Fund
or Bankers Life upon a determination that certain irreconcilable conflicts
exist; or (11) at the option of the Fund or Bankers Life, upon the other party's
material breach of any provision in the Participation Agreement.

ROYCE CAPITAL FUND. This agreement provides for termination: (1) at the
option of Bankers Life or the Royce Trust (the "Trust") upon 180 days' notice;
(2) at the option of Bankers Life, if the Trust shares are not reasonably
available to meet the requirements of the Contracts; (3) at the option of
Bankers Life, upon the institution of certain formal proceedings against the
Trust by the SEC, the National Association of Securities Dealers, Inc. ("NASD"),
or any other regulatory body; (4) at the option of the Advisor of the Trust or
the Trust, upon the institution of

-19-

<PAGE> 70

certain formal proceedings against Bankers Life by the SEC, the NASD or any
other regulatory body; (5) in the event the Trust's shares are not registered,
issued or sold in accordance with applicable state or federal law, or such law
precludes the use of such shares as the underlying investment medium of
Contracts; (6) at the option of the Adviser of the Trust or the Trust, if the
Contracts cease to qualify as annuity contracts or life insurance contracts, as
applicable, under the Code; (7) at the option of Bankers Life, upon the Trust's
unremedied breach of any material provision of this agreement; (8) at the option
of the Adviser of the Trust or the Trust, upon Bankers Life's unremedied breach
of any material provision of this agreement; (9) at the option of the Adviser of
the Trust or the Trust, if the Contracts are not registered, issued or sold in
accordance with applicable federal and/or state law; (10) in the event this
agreement is assigned without the prior written consent of Bankers Life and the
Trust.

SAFECO RESOURCE SERIES TRUST. This agreement shall terminate as to the
sale and issuance of new Contracts: (1) at the option of either Bankers Life or
the SAFECO Trust ("Trust"), upon 180 days' advance written notice to the other;
(2) at the option of Bankers Life, upon ten days' advance written notice to the
Trust if shares of the Portfolios are not available for any reason to meet the
requirements of the Contracts as determined by Bankers Life; (3) at the option
of Bankers Life, upon the institution of certain formal proceedings against the
Trust or Adviser by the SEC, the NASD, or any other regulatory body; (4) at the
option of the Trust, upon the institution of certain formal proceedings against
Bankers Life or the principal underwriter for the Contracts by the SEC, the NASD
or any other regulatory body; (5) in the event the Trust's shares are not
registered, issued or sold in accordance with applicable state or federal law,
or such law precludes the use of such shares as the underlying investment medium
of Contracts; (6) upon the receipt of any necessary regulatory approvals, or the
requisite vote of Contract owners having an interest in the Portfolios, to
substitute for shares of the Portfolios the shares of another investment company
in accordance with the terms of the applicable Contracts; (7) at the option of
the Trust, if the Contracts cease to qualify as annuity contracts or life
insurance contracts, as applicable, under the Code; (8) at the option of Bankers
Life, upon the Trust's unremedied breach of any material provision of this
agreement; (9) at the option of the Trust, upon Bankers Life's unremedied breach
of any material provision of this agreement; (10) at the option of the Trust, if
the Contracts are not registered, issued or sold in accordance with applicable
federal and/or state law; (11) in the event this agreement is assigned without
the prior written consent of Bankers Life, the Trust or Adviser.

SoGEN VARIABLE FUNDS, INC. This agreement shall continue in full force
and effect until the first to occur of: (1) termination by any party, for any
reason with respect to the Portfolio, by 120 days advance written notice
delivered to the other parties; or (2) termination by Bankers Life by written
notice to the SoGen Fund and its Underwriter based upon Bankers Life's
determination that shares of the Portfolio are not reasonably available to meet
the requirements of the Contracts; or (3) termination by Bankers Life by written
notice to the SoGen Fund and its Underwriter in the event the Portfolio's shares
are not registered, issued or sold in accordance with applicable state and/or
federal law or such law precludes the use of such shares as the underlying
investment media of the Contracts; or (4) termination by the SoGen Fund or its
Underwriter in the event that certain formal administrative proceedings are
instituted against

-20-

<PAGE> 71

Bankers Life by the NASD, the SEC, the Insurance Commissioner or like official
of any state or any other regulatory body; or (5) termination by Bankers Life in
the event that certain formal administrative proceedings are instituted against
the SoGen Fund or Underwriter by the NASD, the SEC, or any state securities or
insurance department or any other regulatory body; or (6) termination by Bankers
Life by written notice to the SoGen Fund and its Underwriter in the event that
the Portfolio ceases to qualify as a Regulated Investment Company under
Subchapter M or fails to comply with the Section 817(h) diversification
requirements of the Code; or (7) termination by the SoGen Fund or its
Underwriter by written notice to Bankers Life in the event that the Contracts
fail to meet certain qualifications; or (8) termination by either the SoGen Fund
or its Underwriter by written notice to Bankers Life if either one or both of
the SoGen Fund or its Underwriter respectively, shall determine, in their sole
judgment exercised in good faith, that Bankers Life has suffered a material
adverse change in its business, operations, financial condition, or prospects
since the date of the Participation Agreement or is the subject of material
adverse publicity; or (9) termination by Bankers Life by written notice to the
SoGen Fund and its Underwriter, if the Company shall determine, in its sole
judgment exercised in good faith, that the SoGen Fund, its Adviser, or its
Underwriter has suffered a material adverse change in its business, operations,
financial condition or prospects since the date of this agreement or is the
subject of material adverse publicity; or (10) termination by Bankers Life upon
any substitution of the shares of another investment company or series thereof
for shares of the Portfolio in accordance with the terms of the Contracts; or
(11) termination by any party in the event that the SoGen Fund's Board of
Directors determines that a material irreconcilable conflict exists.

T. ROWE PRICE FIXED INCOME SERIES, INC. AND T. ROWE PRICE INTERNATIONAL
SERIES, INC. These agreements provide for termination: (1) on six months'
advance written notice by any party; (2) at Bankers Life's option if shares of
any Portfolio are not reasonably available to meet the requirements of the
Contracts or are not registered, issued or sold in accordance with applicable
state and/or federal law; (3) at Bankers Life's option if any Portfolio ceases
to be qualified as a Regulated Investment Company under Subchapter M of the
Code; (4) at Bankers Life's option if any Portfolio fails to meet certain
diversification requirements of the Code; (5) at the option of the Fund or T.
Rowe Price Investment Services, Inc. (the "Underwriter") upon a determination
that Bankers Life has suffered a material adverse change in its business,
operations, financial condition or prospects or is the subject of material
adverse publicity; (6) by Bankers Life upon a determination that either the Fund
or the Underwriter has suffered a material adverse change in its business,
operations, financial condition or prospects or is the subject of material
adverse publicity; (7) by the Fund or the Underwriter if Bankers Life provides
written notice of its intent to use another investment company as a funding
vehicle for the Contracts; (8) by the Fund or the Underwriter upon institution
of certain proceedings against Bankers Life; or (9) at Bankers Life's option
upon institution of certain administrative proceedings against the Fund or the
Underwriter.

VAN ECK WORLDWIDE INSURANCE TRUST. This agreement provides for
termination: (1) on six months' advance written notice by any party; (2) at
Bankers Life's option if shares of any Portfolio are not reasonably available to
meet the requirements of the Contracts or are not registered, issued or sold in
accordance with applicable state and/or federal law; (3) at Bankers

-21-

<PAGE> 72

Life's option if any Portfolio ceases to be qualified as a Regulated Investment
Company under Subchapter M of the Code; (4) at Bankers Life's option if any
Portfolio fails to meet certain diversification requirements of the Code; (5) at
the option of the Trust or Van Eck Associates Corporation (the "Adviser") upon a
determination that Bankers Life has suffered a material adverse change in its
business, operations, financial condition or prospects or is the subject of
material adverse publicity; (6) by Bankers Life upon a determination that either
the Trust or the Adviser has suffered a material adverse change in its business,
operations, financial condition or prospects or is the subject of material
adverse publicity; (7) by Bankers Life, the Adviser or the Trust, upon
institution of certain proceedings against the broker-dealers marketing the
Contracts, the Adviser or the Trust; (8) upon a decision by Bankers Life to
substitute the Trust's shares with the shares of another investment company; or
(9) upon assignment of the Agreement.

VOTING RIGHTS

The number of the Owner's votes is determined by dividing the Contract
Value the Owner has in a Variable Account by the net asset value per share of
the Portfolio in which that Variable Account invests. For each Annuitant, the
number of votes attributable to a Variable Account will be determined by
dividing the liability for future variable annuity payments to be paid from that
Variable Account by the net asset value per share of the Portfolio in which that
Variable Account invests. This liability for future payments is calculated on
the basis of the mortality assumptions. The assumed investment rate the Owner
selected is used in determining the number of annuity units of that Variable
Account credited to the Annuitant's Contract and annuity unit value of that
Variable Account on the date that the number of votes is determined. As variable
annuity payments are made to the Annuitant, the liability for future payments
decreases as does the number of votes.

The number of votes available to the Owner or an Annuitant will be
determined as of the date coincident with the date established by the Fund for
determining shareholders eligible to vote at the relevant meeting of the
Portfolio's shareholders. Voting instructions will be solicited by written
communication prior to such meeting in accordance with procedures established
for the Fund.

SAFEKEEPING OF ACCOUNT ASSETS

The Company holds the title to the assets of the Separate Account. The
assets are kept physically segregated and held separate and apart from the
Company's General Account assets and from the assets in any other separate
account.

Records are maintained of all purchases and redemptions of Portfolio
shares held by each of the Variable Accounts.

The officers and employees of the Company are covered by an insurance
company blanket bond issued by Travelers Casualty and Surety Company of America
to Indianapolis Life

-22-

<PAGE> 73

Insurance Company and its various subsidiaries in the amount of twenty million
dollars. The bond insures against dishonest and fraudulent acts of officers and
employees.

DISTRIBUTION OF THE CONTRACTS

IL Securities, Inc., P.O. Box 1230, 2960 North Meridian Street,
Indianapolis, Indiana 46208, acts as the distributor for the Contracts. IL
Securities, Inc. is wholly-owned by the Indianapolis Life Group of Companies,
Inc., which, in turn, is wholly-owned by Indianapolis Life Insurance Company. IL
Securities, Inc. 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.

The Company offers the Contracts to the public on a continuous basis.
The Company does not anticipate discontinuing the offering of the Contracts, but
reserves the right to discontinue the offering. Agents who sell the Contracts
are licensed by applicable state insurance authorities to sell the Contracts and
are registered representatives of IL Securities, Inc. or broker-dealers having
selling agreements with IL Securities, Inc. or broker-dealers having selling
agreements with such broker-dealers.

The Company may pay sales commissions to broker-dealers up to an amount
equal to 7.2% of the Premium Payments paid under a Contract. In addition,
asset-based trailer commissions of up to 1.25% may be paid. The Company may also
pay up to 1.25% of Premium Payments to IL Securities to compensate it for
certain distribution expenses. The broker-dealers are expected to compensate
sales representatives in varying amounts from these commissions. The Company may
also pay other distribution expenses such as production incentive bonuses, an
agent's insurance and pension benefits, and agency expense allowances. These
distribution expenses do not result in any additional charges against the
Contracts other than those described in the prospectus under "Fees and Charges."

LEGAL MATTERS

All matters relating to New York law pertaining to the Contracts,
including the validity of the Contracts and the Company's authority to issue the
Contracts, have been passed upon by Janis B. Funk, Counsel of the Company.
Sutherland Asbill & Brennan LLP of Washington, D.C. has provided advice on
certain matters relating to the federal securities laws.

EXPERTS

The audited statutory basis balance sheets of Bankers Life Insurance
Company of New York as of December 31, 1997 and 1996, and the related statutory
basis statements of income and changes in capital and surplus and cash flows
for each of the three years in the period ended December 31, 1997, appearing in
this Statement of Additional Information and Registration Statement have been
audited by Ernst & Young LLP, independent auditors, as set forth in their report
thereon appearing elsewhere herein,

-23-

<PAGE> 74

and are included in reliance upon such reports given upon the authority of such
firm as experts in accounting and auditing.

The unaudited September 30, 1998 financial statements of Bankers Life
Insurance Company of New York, prepared in accordance with accounting
practices prescribed or permitted by the State of New York Insurance
Department but do not include all the information and footnotes required for
complete financial statements, are contained in this Statement of Additional
Information.

OTHER INFORMATION

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

-24-
<PAGE> 75

Financial Statements--Statutory-Basis

Bankers Life Insurance Company of New York

Years ended December 31, 1997, 1996 and 1995
with Report of Independent Auditors
<PAGE> 76

Bankers Life Insurance Company of New York

Financial Statements--Statutory-Basis

Years ended December 31, 1997, 1996 and 1995

<TABLE>
<CAPTION>
CONTENTS
<S> <C>
Report of Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Financial Statements

Balance Sheets--Statutory-Basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Statements of Income and Changes in Capital and Surplus--Statutory-Basis . . . . . . . . . . . 3
Statements of Cash Flows--Statutory-Basis . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Notes to Financial Statements--Statutory-Basis . . . . . . . . . . . . . . . . . . . . . . . . 5
</TABLE>

<PAGE> 77

Report of Independent Auditors

Board of Directors
Bankers Life Insurance Company of New York

We have audited the accompanying statutory-basis balance sheets of Bankers Life
Insurance Company of New York (a wholly-owned subsidiary of Indianapolis Life
Insurance Company) as of December 31, 1997 and 1996, and the related
statutory-basis statements of income and changes in capital and surplus and
cash flows for each of the three years in the period ended December 31, 1997.
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.

As described in Note 1 to the financial statements, the Company presents its
financial statements in conformity with accounting practices prescribed or
permitted by the State of New York Insurance Department, which practices differ
from generally accepted accounting principles. The variances between such
practices and generally accepted accounting principles and the effects on the
accompanying financial statements are described in Note 11.

In our opinion, because of the effects of the matter described in the preceding
paragraph, the financial statements referred to above do not present fairly, in
conformity with generally accepted accounting principles, the financial
position of Bankers Life Insurance Company of New York at December 31, 1997 and
1996, or the results of its operations or its cash flows for each of the three
years in the period ended December 31, 1997.

However, in our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Bankers Life
Insurance Company of New York at December 31, 1997 and 1996, and the results of
its operations and its cash flows for each of the three years in the period
ended December 31, 1997, in conformity with accounting practices prescribed or
permitted by the State of New York Insurance Department.

/s/ ERNST & YOUNG LLP

April 30, 1998
New York, New York

1
<PAGE> 78

Bankers Life Insurance Company of New York

Balance Sheets--Statutory-Basis

<TABLE>
<CAPTION>
DECEMBER 31
1997 1996
-----------------------------------------
<S> <C> <C>
ASSETS
Investments
Bonds $ 241,842,934 $ 222,026,415
Policy loans 17,472,734 15,947,242
Cash and short-term investments 19,383,695 11,919,057
Mortgage loans 47,408 59,629
Other invested assets 90,357 54,237
-----------------------------------------
Total investments 278,837,128 250,006,580

Premiums due and deferred 285,729 497,540
Accrued investment income 3,404,382 3,172,153
Electronic data processing equipment,
net of accumulated depreciation 539,060 426,815
Receivables and other assets 825,292 1,526,177
Federal income tax recoverable 207,291 672,262
-----------------------------------------
Total assets $ 284,098,882 $ 256,301,527
=========================================

LIABILITIES AND CAPITAL AND SURPLUS
Policy reserves for future benefits and
deposit funds $ 253,057,518 $ 221,463,320
Policy dividends payable and on deposit 3,627,908 3,675,307
Asset valuation reserve 1,442,491 1,499,055
Other liabilities 1,439,748 3,659,485
-----------------------------------------
Total liabilities 259,567,665 230,297,167

Capital and surplus
Common stock; $435 par value, 4,603 shares
authorized, issued and outstanding 2,002,306 2,002,306
Additional paid-in surplus 13,774,663 13,774,663
Unassigned surplus 8,722,812 10,195,955
Other surplus funds 31,436 31,436
-----------------------------------------
Total capital and surplus 24,531,217 26,004,360
-----------------------------------------
Total liabilities and capital and surplus $ 284,098,882 $ 256,301,527
=========================================
</TABLE>

See accompanying notes.

2
<PAGE> 79
Bankers Life Insurance Company of New York

Statements of Income and Changes in Capital and Surplus--Statutory-Basis

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1997 1996 1995
-----------------------------------------------------------
<S> <C> <C> <C>
Premium and other considerations
Life and annuity premiums and deposits $ 50,435,991 $36,947,698 $36,512,858
Supplementary contracts, dividends accumulations,
accident and health and other 5,600,584 3,492,468 2,703,358
Investment income, net of expenses of $713,352
in 1997, $638,897 in 1996, and $590,176 in 1995 17,989,032 15,721,090 14,355,604
-----------------------------------------------------------
74,025,607 56,161,256 53,571,820
Benefits and expenses
Surrenders 17,560,231 12,303,014 10,388,899
Life, annuities and matured endowments 7,199,861 5,015,146 5,077,462
Supplementary contracts, dividend accumulations,
accident and health and other benefits 695,688 544,673 844,731
Increase in reserves 30,849,379 23,068,994 24,636,606
Commissions 7,130,118 4,912,125 4,701,811
General expenses 6,674,632 6,244,696 5,273,299
Taxes, licenses and fees 983,025 1,062,812 533,148
-----------------------------------------------------------
71,092,934 53,151,460 51,455,956
-----------------------------------------------------------
Net gain from operations before dividends to
policyowners and federal income taxes 2,932,673 3,009,796 2,115,864

Dividends to policyowners 911,187 903,741 943,109
Federal income taxes 1,337,716 1,198,144 727,464
-----------------------------------------------------------
Net gain from operations 683,770 907,911 445,291

Realized losses on investments - (177,423) (114,051)
-----------------------------------------------------------
Net income $ 683,770 $ 730,488 $ 331,240
===========================================================

Capital and surplus at beginning of year $ 26,004,360 $24,651,760 $23,375,870

Add (deduct)
Net income 683,770 730,488 331,240
Change in asset valuation reserve 56,564 (89,354) (143,314)
Capital contribution by Parent - 4,503,527 -
Dividend to stockholder (2,500,000) - -
Change in nonadmitted assets and other items 286,523 (3,792,061) 1,087,964
-----------------------------------------------------------
(1,473,143) 1,352,600 1,275,890
-----------------------------------------------------------
Capital and surplus at end of year $ 24,531,217 $26,004,360 $24,651,760
===========================================================
</TABLE>

See accompanying notes.

3
<PAGE> 80
Bankers Life Insurance Company of New York

Statements of Cash Flows--Statutory-Basis

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1997 1996 1995
------------------------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Premiums and other considerations, net of
reinsurance ceded $ 50,993,886 $ 37,173,370 $ 36,420,380
Net investment income 18,259,808 16,218,812 14,632,095
Commissions and expense allowances on
reinsurance ceded and other 5,405,377 3,289,586 2,362,403
------------------------------------------------------------
74,659,071 56,681,768 53,414,878
Policy benefits (24,751,855) (18,250,973) (16,570,945)
Commissions and other expenses (15,055,877) (12,116,778) (9,757,287)
Dividends to policyowners (923,035) (929,057) (1,012,169)
Federal income taxes (1,285,500) (1,610,821) 227,798
------------------------------------------------------------
Net cash from operations 32,642,804 23,774,139 26,302,275

INVESTING ACTIVITIES
Proceeds from investments sold, matured or repaid:
Bonds 51,478,232 30,817,254 15,926,859
Other investments 14,639 27,701 22,012
------------------------------------------------------------
Total investment proceeds 51,492,871 30,844,955 15,948,871
Tax benefit on capital losses 214,523 1,587,712 (49,459)
Net increase in policy loans (1,525,492) (141,887) 851,886
Costs of investments acquired
Purchase of bonds (70,582,136) (55,796,174) 42,570,090
Other investments (38,537) (46,672) -
------------------------------------------------------------
Total investments acquired (70,620,673) (55,842,846) 42,570,090
------------------------------------------------------------
Net cash used for investments (20,438,771) (23,552,066) (25,818,792)

FINANCING ACTIVITIES AND MISCELLANEOUS
Capital contribution by Parent - 4,503,527 -
Dividend to stockholder (2,500,000) - -
Other cash provided 67,195 589,047 629,497
Other cash applied (2,306,589) (330,168) (587,721)
------------------------------------------------------------
Total net other cash provided (used) (4,739,394) 4,762,406 41,776
------------------------------------------------------------

Increase in cash and short-term investments 7,464,639 4,984,479 525,259
Cash and short-term investments at beginning of year 11,919,056 6,934,577 6,409,318
------------------------------------------------------------
Cash and short-term investments at end of year $ 19,383,695 $ 11,919,056 $ 6,934,577
============================================================
</TABLE>

See accompanying notes.

4
<PAGE> 81

Bankers Life Insurance Company of New York

Notes to Financial Statements--Statutory-Basis

December 31, 1997

1. ORGANIZATION, BASIS OF PRESENTATION AND ACCOUNTING POLICIES

ORGANIZATION

Bankers Life Insurance Company of New York (the "Company") is incorporated in
New York, and is licensed to do business in ten states. The Company, through
independent agents, markets and issues life insurance and annuity products,
principally in New York. The Company is a wholly-owned subsidiary of
Indianapolis Life Insurance Company ("Indianapolis Life").

BASIS OF PRESENTATION AND ACCOUNTING POLICIES

Preparation of the financial statements requires management to make estimates
and assumptions that affect amounts reported in the financial statements and
accompanying notes. Such estimates and assumptions could change in the future
as more information becomes known, which could impact the amounts reported and
disclosed herein. Particularly susceptible to change are policy reserves for
future benefits, policy dividends payable and federal income taxes.

The accompanying statutory-basis financial statements have been prepared in
conformity with the accounting practices prescribed or permitted by the State
of New York Insurance Department, which practices differ from generally
accepted accounting principles ("GAAP"). The more significant variances from
GAAP are as follows:

Investments: Investments in bonds are reported at amortized cost or market
value based on their National Association of Insurance Commissioners ("NAIC")
rating; for GAAP, such fixed maturity investments would be designated at
purchase as held-to-maturity, trading, or available-for-sale.
Held-to-maturity fixed investments would be reported at amortized cost, and
the remaining fixed maturity investments are reported at fair value with
unrealized holding gains and losses reported in operations for those
designated as trading and as a separate component of stockholder's equity for
those designated as available-for-sale.

Based on a formula prescribed by the NAIC, the Company defers the portion of
realized capital gains and losses on sales of fixed income investments,
principally bonds, attributable to changes in the general level of interest
rates and amortizes those deferrals over the remaining period to maturity
based on groupings of individual securities sold in five-year bands. That net
deferral is reported as the "interest maintenance reserve" ("IMR") in the

5
<PAGE> 82

Bankers Life Insurance Company of New York

Notes to Financial Statements--Statutory-Basis (continued)

1. ORGANIZATION, BASIS OF PRESENTATION AND ACCOUNTING POLICIES

accompanying balance sheets. Realized capital gains and losses are reported
in income net of federal income tax and transfers to the interest maintenance
reserve. The "asset valuation reserve" ("AVR") is determined by an NAIC
prescribed formula and is reported as a liability rather than unassigned
surplus. For GAAP, realized capital gains and losses would be reported in the
income statement on a pretax basis in the period that the asset giving rise
to the gain or loss is sold and valuation allowances would be provided when
there has been a decline in value deemed other than temporary, in which case,
the provision for such declines would be charged to earnings.

Policy Acquisition Costs: The costs of acquiring and renewing business are
expensed when incurred. For GAAP, acquisition costs related to traditional
life insurance and certain long-duration accident and health insurance, to
the extent recoverable from future policy revenues, would be deferred and
amortized over the premium-paying period of the related policies using
assumptions consistent with those used in computing policy benefit reserves.
For universal life insurance and investment products, to the extent
recoverable from future gross profits, deferred policy acquisition costs are
amortized generally in proportion to the present value of expected gross
profits from surrender charges and investment mortality, and expense margins.

Goodwill and Present Value of Future Profits: Goodwill and present value of
future profits are not recorded in the accompanying financial statements. For
GAAP, such amounts are recognized and amortized over 20 years for goodwill
and over the estimated life of insurance inforce of approximately 20 years
for present value of future profits.

Nonadmitted Assets: Certain assets designated as "nonadmitted," principally
negative IMR, agents' debit balances and furniture and equipment, are
excluded from the accompanying balance sheets and are charged directly to
unassigned surplus. For GAAP, such assets (excluding IMR, which is not
applicable for GAAP) are separately evaluated regarding realization to
determine the appropriate valuation.

Universal Life and Annuity Policies: Revenues for universal life and annuity
policies consist of the entire premium received and benefits represent the
death benefits paid and the change in policy reserves. For GAAP, premiums
received in excess of policy charges would not be recognized as premium
revenue and benefits would represent the excess of benefits paid over the
policy account value and interest credited to the account values.

6
<PAGE> 83

Bankers Life Insurance Company of New York

Notes to Financial Statements--Statutory-Basis (continued)

1. ORGANIZATION, BASIS OF PRESENTATION AND ACCOUNTING POLICIES (CONTINUED)

Benefit Reserves: Certain policy reserves are calculated based on
statutorily required interest and mortality assumptions rather than on
estimated expected experience or actual account balances as would be
required by GAAP.

Reinsurance: Assets and liabilities relating to reinsurance contracts are
shown net of the effects of reinsurance. For GAAP, these assets and
liabilities are shown gross of the effects of reinsurance.

Commissions allowed by reinsurers on business ceded are reported as income
when received rather than being deferred and amortized with deferred policy
acquisition costs. The reinsurance commission paid and received by the
Company in connection with the block of business acquired from First
SunAmerica (see Note 4) was recorded, net of federal income taxes, through
surplus.

Employee Benefits: For purposes of calculating the Company's postretirement
benefit obligation, only vested participants and current retirees are
included in the valuation. For GAAP, active participants not currently
eligible would also be included.

Federal Income Taxes: Deferred federal income taxes are not provided for
differences between the financial statement amounts and tax bases of assets
and liabilities.

Policyowner Dividends: Policyowner dividends are recognized when declared
rather than over the term of the related policies.

Statements of Cash Flows: Cash and short-term investments in the statements
of cash flows represent cash balances and investments with initial
maturities of one year or less. For GAAP, the corresponding captions of cash
and cash equivalents include cash balances and investments with initial
maturities of three months or less.

7
<PAGE> 84

Bankers Life Insurance Company of New York

Notes to Financial Statements--Statutory-Basis (continued)

1. ORGANIZATION, BASIS OF PRESENTATION AND ACCOUNTING POLICIES (CONTINUED)

Other significant accounting policies followed in preparing the accompanying
statutory-basis financial statements are as follows:

INVESTMENTS

Bonds and short-term investments are stated at values prescribed by the NAIC.
Bonds are generally carried at cost adjusted for amortization of premium or
accrual of discount, which is computed using the effective interest method. The
effective yield for bonds consisting of mortgaged-backed securities considers
anticipated prepayments. Prepayment assumptions are obtained from broker dealer
survey values or internal estimates and are based on the current interest rate
and economic environment. The retrospective adjustment method is used to value
all such securities. Mortgage and policy loans are stated at aggregate unpaid
balances and the carrying amount reported in the accompanying balance sheets
approximates its fair value.

Short-term investments include investments with maturities of less than one
year at the date of acquisition and investments in money market funds which
invest in United States Treasury securities. Short-term investments are stated
at cost, which approximates fair value.

Realized capital gains and losses on sales or redemptions of fixed income
investments, principally bonds and mortgage loans, are determined on the
specific identification method. The gains and losses which are attributable to
changes in the general level of interest rates are deferred through the IMR.
Such gains or losses are amortized into income over the approximate remaining
duration to maturity of the related investments sold. Realized gains and losses
from disposal of investments which are not deferred through the IMR are
included in operations.

The AVR is computed in accordance with a prescribed formula and represents a
provision for fluctuations in the value of bonds, mortgage loans, and other
invested assets. Changes to the AVR are charged or credited directly to
unassigned surplus.

8
<PAGE> 85

Bankers Life Insurance Company of New York

Notes to Financial Statements--Statutory-Basis (continued)

1. ORGANIZATION, BASIS OF PRESENTATION AND ACCOUNTING POLICIES (CONTINUED)

PREMIUMS DEFERRED AND UNCOLLECTED

Deferred and uncollected life insurance premiums represent annual or fractional
premiums, either due and uncollected or not yet due where policy reserves have
been provided on the assumption that the full premium for the current year has
been collected. Deferred and uncollected premiums are reported net of loading
and reinsurance ceded.

FURNITURE AND EQUIPMENT

Electronic data processing equipment is reported at cost less accumulated
depreciation of $562,811 and $418,953 at December 31, 1997 and 1996,
respectively. Electronic data processing equipment is depreciated using the
straight-line method primarily over five years. Furniture and other equipment
are depreciated on a straight-line basis over ten years. Depreciation expense
in 1997, 1996 and 1995 was $366,106, $320,943 and $283,837, respectively.

POLICY RESERVES FOR FUTURE BENEFITS AND DEPOSIT FUNDS

The aggregate reserve for annuities, with the exception of Single and Flexible
Premium Deferred Annuities, is based primarily on the full cash value of the
related contracts. The reserve for Single and Flexible Premium Deferred
Annuities has been calculated by the Commissioners Annuity Reserve Valuation
Method and the maximum reserve valuation interest rate for each year of issue.
Interest crediting rates on annuities ranged from 4.75% to 7.26% in 1997.

The aggregate reserve for traditional and universal life policies has been
calculated principally by the Net Level Premium Reserve Method ("NLP Method")
and the Commissioners Reserve Valuation Method ("CRVM Method"). Generally, for
1984 and later issues, the CRVM Method and the CRVM Method graded to the NLP
Method were used. The principal tables used in making these reserve
computations are the 1941, 1958 and 1980 Commissioners Standard Ordinary
Mortality Tables with assumed interest rates varying from 2 1/2% to 5 1/2%.

9
<PAGE> 86

Bankers Life Insurance Company of New York

Notes to Financial Statements--Statutory-Basis (continued)

1. ORGANIZATION, BASIS OF PRESENTATION AND ACCOUNTING POLICIES (CONTINUED)

Reserves are also provided for surrender values in excess of reserves otherwise
provided. The Company waives deduction of deferred fractional premiums upon
death of insureds and returns any portion of the final premium beyond the date
of death.

Policy reserves also include provisions for reported claims in the process of
settlement, valued in accordance with the terms of the related policies and
contracts, as well as provisions for claims incurred but not reported, based on
prior experience of the Company.

The liabilities related to fixed rate investment contracts and policyowner
funds left on deposit with the Company are generally equal to fund balances
less applicable surrender charges.

PREMIUM INCOME RECOGNITION

Life insurance premiums on traditional policies are reported as earned on the
anniversary dates of the policies. Life insurance premiums on universal life
policies and annuities are reported as earned when collected.

REINSURANCE

The portion of risks exceeding the Company's retention limit is reinsured with
other insurers. Premiums, benefits and expenses, and insurance reserves and
liabilities are reported in the accompanying financial statements net of
reinsurance ceded to other insurers. Reinsurance is accounted for on bases
consistent with those used in accounting for the original policies issued and
the terms of the reinsurance contracts.

PARTICIPATING BUSINESS

The Company has issued participating ordinary life policies which comprise
approximately 4.4% and 3.5% of the total amount of insurance in force for such
business at December 31, 1997 and 1996, respectively. The amount of dividends
to be paid is determined annually by the Board of Directors. A provision has
been established for the amount of dividends estimated to be paid in the
following year.

The insurance laws of certain states limit the amount of profits on
participating policies in those states that may accumulate to the benefit of
the stockholder to 10% of such profits.

10
<PAGE> 87

Bankers Life Insurance Company of New York

Notes to Financial Statements--Statutory-Basis (continued)

1. ORGANIZATION, BASIS OF PRESENTATION AND ACCOUNTING POLICIES (CONTINUED)

SURPLUS

The Company cannot declare or distribute any dividends to the stockholder
unless a notice of its intention to declare such dividend and the amount
thereof shall have been filed with the Department Superintendent not less than
30 days in advance of such proposed declaration. The Superintendent may
disapprove of such distribution by giving written notice to the Company within
30 days after such filing that the financial condition of the Company does not
warrant such distribution. As required by the Department, a portion of surplus
is segregated for group life contingency reserves. The Company paid a
$2,500,000 dividend to its parent in 1997.

As of December 31, 1997, restricted surplus held for the benefit of
participating policyowners is $17,265,442 with the remainder being held for the
benefit of the stockholder.

FEDERAL INCOME TAXES

The Company files a consolidated federal income tax return with its parent
company. In accordance with a tax allocation agreement, the Company's tax
liability is based on separate return calculations. The Company collects from
or remits to its parent the amount of benefits or taxes determined by the
Company on a separate return basis.

GUARANTY-FUND ASSESSMENTS

Guaranty-fund assessments are accrued when the Company receives notice that an
amount is payable to a guaranty-fund.

RECLASSIFICATIONS

Certain prior year amounts have been reclassified to conform to the current
year presentation.

11
<PAGE> 88

Bankers Life Insurance Company of New York

Notes to Financial Statements--Statutory-Basis (continued)

2. GAAP-BASIS STOCKHOLDER'S EQUITY AND NET INCOME

A reconciliation of the Company's stockholder's equity and net income on a
statutory-basis, as filed with the insurance regulatory authorities, to a basis
consistent with GAAP follows:

<TABLE>
<CAPTION>
1997 1996
------------------------------------ -----------------------------------
STOCKHOLDER'S NET STOCKHOLDER'S NET
EQUITY INCOME EQUITY INCOME
-------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Statutory-basis $ 24,531,217 $ 683,770 $26,004,360 $ 730,488

Deferred policy acquisition costs 16,392,308 6,605,127 9,520,921 5,162,804
Present value of future profits 9,195,058 - 10,196,414 -
Goodwill 11,146,511 - 12,114,021 -
Amortization of PVFP and goodwill - (2,392,875) - (3,205,196)
Investments fair value adjustment 8,642,575 - 3,373,270 -
Reserves for future benefits (10,930,759) (3,354,352) (7,128,247) (2,927,153)
Deferred income taxes (3,641,708) (682,641) (2,936,709) (934,902)
Asset valuation reserve adjustment 1,442,491 - 1,499,055 -
Investments (valuations, capital gains and
IMR amortization) - 2,398,433 - 1,608,269
Nonadmitted assets and other (3,545,556) (203,805) (3,092,497) 1,546,411
-------------------------------------------------------------------------

GAAP-basis $53,232,137 $ 3,053,657 $49,550,588 $ 1,980,721
=========================================================================
</TABLE>

The differences between statutory-basis and GAAP-basis stockholder's equity and
net income were not quantified for 1995.

3. PERMITTED STATUTORY ACCOUNTING PRACTICES

The Company's statutory-basis financial statements are prepared in accordance
with accounting practices prescribed or permitted by the State of New York
Insurance Department. Prescribed statutory accounting practices include state
laws, regulations, and general administrative rules, as well as a variety of
publications of the NAIC. Permitted statutory accounting practices encompass
all accounting practices that are not prescribed; such practices differ from
state to state, may differ from company to company within a state, and may
change in the future. In March 1998, the NAIC approved codified statutory
accounting practices ("Codified SAP"), the result of which is expected to
constitute the only source of prescribed statutory accounting practices.
Codified SAP, however, still needs to be adopted by

12
<PAGE> 89

Bankers Life Insurance Company of New York

Notes to Financial Statements--Statutory-Basis (continued)

3. PERMITTED STATUTORY ACCOUNTING PRACTICES (CONTINUED)

the various states before it becomes the prescribed statutory basis of
accounting for insurance companies domesticated within those states.
Accordingly, before Codified SAP becomes effective for the Company, New York
State must adopt Codified SAP as the prescribed basis of accounting on which
domestic insurers must report their statutory-basis results to the Insurance
Department. At this time, it is unclear whether New York State will adopt
Codified SAP. However, based on current guidance, management believes that the
impact of codification will not be material to the Company's statutory-basis
financial statements.

4. INVESTMENTS

The amortized cost and the fair value of investments in bonds are summarized as
follows:

<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DECEMBER 31, 1997
United States government $ 2,603,797 $ 4,248 $ (305) $ 2,607,740
Special revenue 2,101,284 246,924 - 2,348,208
Public utilities 17,463,857 602,612 (173) 18,066,296
Industrial and miscellaneous 99,580,775 5,560,073 (21,596) 105,119,252
Mortgage-backed securities 120,093,221 2,578,402 (323,553) 122,348,070
-----------------------------------------------------------------------------
Total bonds $241,842,934 $8,992,259 $ (345,627) $250,489,566
=============================================================================

DECEMBER 31, 1996
United States government $ 2,110,588 $ 15,586 $ (3,559) $ 2,122,615
Special revenue 2,102,453 140,357 - 2,242,810
Public utilities 18,031,077 205,897 (159,080) 18,077,894
Industrial and miscellaneous 79,773,734 2,760,622 (212,724) 82,321,632
Mortgage-backed securities 120,008,563 1,728,288 (1,099,766) 120,637,085
-----------------------------------------------------------------------------
Total bonds $222,026,415 $4,850,750 $(1,475,129) $225,402,036
=============================================================================
</TABLE>

13
<PAGE> 90

Bankers Life Insurance Company of New York

Notes to Financial Statements--Statutory-Basis (continued)

4. INVESTMENTS (CONTINUED)

Bonds by date of scheduled maturity consist of the following at December 31,
1997. Actual maturities may differ from scheduled maturities because certain
borrowers 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 $ 2,008,839 $ 2,011,725
Due after one year through five years 32,470,893 33,593,183
Due after five years through ten years 38,832,430 40,197,349
Due after ten years 48,437,551 52,339,239
Mortgage-backed securities 120,093,221 122,348,070
---------------------------------
$241,842,934 $250,489,566
=================================
</TABLE>

Fair values of bonds are based on quoted market prices where available. For
bonds not actively traded, fair values are estimated using values obtained from
independent pricing services, or in case of private placements, are estimated
by discounting expected future cash flow using a current market rate applicable
to the yield, credit quality and maturity of the investments.

At December 31, 1997, bonds with an admitted asset value of $2,093,770 were on
deposit with the state insurance departments to satisfy regulatory
requirements.

Proceeds from the sale of bonds during 1997, 1996 and 1995 were $14,611,954,
$30,543,791 and $15,783,791, respectively. Gross gains of $385,906, $106,198
and $325,990, and gross losses of $31,061, $6,627,409 and $241,666 were
realized during 1997, 1996 and 1995, respectively, on those sales.

14
<PAGE> 91

Bankers Life Insurance Company of New York

Notes to Financial Statements--Statutory-Basis (continued)

4. INVESTMENTS (CONTINUED)

Realized capital gains (losses) are reported net of federal income taxes and
amounts transferred to the IMR are as follows:

<TABLE>
<CAPTION>
1997 1996 1995
--------------------------------------------------
<S> <C> <C> <C>
Realized capital gains (losses) $ 354,845 $(6,521,211) $ 84,323
Less amounts transferred to IMR (230,650) (4,346,886) 118,318
--------------------------------------------------
124,195 (2,174,325) (33,995)
Less federal income tax (expense) benefit
on realized capital gains (losses) before
effect of transfer to IMR (124,195) 1,996,902 (80,056)
--------------------------------------------------
Net realized capital losses $ - $ (177,423) $(114,051)
==================================================
</TABLE>

In the second quarter of 1996, the Company sold three mortgaged-backed
securities back to Southwestern Life, its former parent. In connection with
this sale, the Company realized a capital loss of $6,181,267 with an estimated
tax benefit of $1,677,740. The net realized capital loss of $4,503,527 was
transferred to the IMR in the second quarter of 1996. Negative IMR, including
the result of this transaction, is nonadmitted. Indianapolis Life contributed
capital of $4,503,527 in 1996 so that the Company's capital and surplus would
not be negatively impacted by this transaction.

5. POLICY RESERVES

The Company's annuities reserves and deposit liabilities that are subject to
discretionary withdrawal and not subject to discretionary provisions are
summarized as follows:

<TABLE>
<CAPTION>
1997 1996
----------------------------------
<S> <C> <C>
Subject to discretionary withdrawal:
At book value less surrender charge of 5% or more $78,913,095 $59,205,206
At book value without adjustment 16,363,253 10,665,322
Not subject to discretionary withdrawal 763,550 706,117
----------------------------------
96,039,898 70,576,645

Supplementary contracts (596,764) (530,882)
Dividends left on deposit (2,750,554) (2,797,671)
----------------------------------
Total net annuities reserves and deposit fund liabilities $92,692,580 $67,248,092
==================================
</TABLE>

15
<PAGE> 92

Bankers Life Insurance Company of New York

Notes to Financial Statements--Statutory-Basis (continued)

5. POLICY RESERVES (CONTINUED)

Included in annuity reserves are reserves for deferred annuities of $92,524,150
and $66,929,412 for 1997 and 1996, respectively. The cash surrender value of
these annuities is $91,922,875 and $66,517,395 for 1997 and 1996, respectively,
which is believed to approximate fair market value. The Company believes that
recorded values for other policies and contract liabilities approximate fair
market values.

6. REINSURANCE

The Company has entered into reinsurance cession agreements with other
insurance companies to limit the net loss arising from large risks and maintain
its exposure to loss within its capital resources. The Company remains liable
for ceded risks in the event that reinsurers do not meet their obligations.
Management believes its reinsurers, which are all "A" rated, will meet their
obligations.

In the fourth quarter of 1997, the Company purchased the life and health
inforce blocks of business from First SunAmerica ("FSA"), formerly known as
John Alden Life Insurance Company of New York. The acquired policies consisted
of traditional life, universal life, disability, long term care and limited
medical expense with reserves of $41,348,718. The Company is ceding 90% of this
business to Reassurance Company of Hannover. The transaction is being accounted
for as assumption reinsurance until the policies are novated. This assumed
reinsurance is included as life and annuity premiums and deposits, net of
reinsurance. Gross premiums assumed in 1997 were $41,687,825.

At December 31, 1997, approximately $40 million of investments were held in
trust in the names of the Company and FSA. Investments will be released from
the trust as policyholders novate their policies to the Company.

The Company's ceded reinsurance arrangements reduced certain items in the
accompanying financial statements by the following amounts:

<TABLE>
<CAPTION>
1997 1996 1995
---------------------------------------------------
<S> <C> <C> <C>
Premiums $48,630,184 $8,722,104 $7,721,963
Commissions and expense allowances 5,068,159 2,847,363 2,149,558
Claims expense 5,007,298 1,161,175 1,073,815
Policy reserves and claim liabilities 57,926,917 2,277,779 2,458,676
</TABLE>

16
<PAGE> 93

Bankers Life Insurance Company of New York

Notes to Financial Statements--Statutory-Basis (continued)

7. FEDERAL INCOME TAXES

A reconciliation between federal income taxes and the amount computed at the
statutory rate is as follows:

<TABLE>
<CAPTION>
1997 1996 1995
-------------------------------------------------------------------
AMOUNT % AMOUNT % AMOUNT %
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Amount at statutory rate $ 707,520 35 $ 737,119 35% $ 410,464 35%
Deferred policy acquisition
costs 328,222 16 296,347 14 296,436 25
Amortization of IMR 241,006 12 207,733 10 172,157 15
Depreciation (32,093) (2) (19,545) (1) (118,066) (10)
Other, net 93,061 5 (23,510) (1) (33,527) (3)
-------------------------------------------------------------------
$1,337,716 66 $1,198,144 57% $ 727,464 62%
===================================================================
</TABLE>

8. BENEFIT PLANS

The Company sponsors a salary reduction/savings plan for employees as defined
by Section 401(k) of the Internal Revenue Code and a deferred compensation and
incentive plan for its agents. The Company also sponsors a deferred
compensation plan for all employees and a 401(k) shadow plan for the officers.
The related expense for 1997, 1996 and 1995 was $71,283, $51,930 and $79,163,
respectively.

The Company, through its parent's postretirement benefit plan, provides
comprehensive major medical benefits to eligible retired employees and their
dependents. Postretirement benefits expense in 1997, 1996 and 1995 was $17,459,
$13,520 and $77,000, respectively. The Company funds these benefits on a
pay-as-you-go basis and the transition obligation ($171,000 at December 31,
1997) is being amortized over 20 years.

9. RELATED PARTY TRANSACTION

Pursuant to administrative and service agreements with affiliates (the
Company's parent and the parent's other subsidiaries), the Company incurred
fees of $1,195,741, $991,178 and $416,083 for 1997, 1996 and 1995,
respectively, for investment advisory and administrative services. The Company
earned fees from an affiliate of $1,561,444, $905,925 and $796,850 during 1997,
1996 and 1995, respectively, principally for insurance policy administration.

17
<PAGE> 94

Bankers Life Insurance Company of New York

Notes to Financial Statements--Statutory-Basis (continued)

9. RELATED PARTY TRANSACTION (CONTINUED)

The December 31, 1997 other liabilities includes a $165,338 payable to
affiliates. The December 31, 1996 receivable and other asset balance includes a
$774,992 receivable from affiliates.

At December 31, 1996, the Company's receivable and other assets and federal
income tax recoverable include approximately $910,000 and $490,000,
respectively, representing reimbursement due from Indianapolis Life for an
assessment imposed by the New York State Department of Taxation and Finance, in
connection with an audit of the Company during the period the Company was
consolidated with its former parent, Southwestern Life.

10. COMMITMENTS

Pursuant to an office lease agreement which expires on June 30, 2003, the
Company incurred rental expense of $364,257, $322,404 and $280,995 in 1997,
1996 and 1995, respectively. At December 31, 1997, the future minimum rental
obligation, including a lease amendment for additional office space entered
into subsequent to December 31, 1997, is as follows:

11. RISK-BASED CAPITAL

Life/health insurance companies are subject to certain Risk-Based Capital
("RBC") requirements as specified by the NAIC. Under those requirements, the
amount of capital and surplus maintained by a life/health insurance company is
to be determined based on the various risk factors related to it. At December
31, 1997, the Company meets the RBC requirements.

18
<PAGE> 95

Bankers Life Insurance Company of New York

Notes to Financial Statements--Statutory-Basis (continued)

12. YEAR 2000 (UNAUDITED)

The Company, along with Indianapolis Life, has developed a plan (the "Plan") to
modify its information technology to be ready for the year 2000. The year 2000
problem affects virtually every computer operation in some way but the rollover
of the two digit year value to 00. The Plan addresses all hardware, software,
and critical facility functions that may be effected by the year 2000 problem.

The Company's main operating system is CAPSIL, a fully integrated, on-line
administration system, which is inherently year 2000 complaint. The Company,
along with Indianapolis Life, is in the process of converting other critical
data processing systems. The Plan also includes the replacement of any hardware
that is currently not year 2000 compliant.

The Company has begun formal communications with all of its services providers
and significant suppliers to see that they are developing plans to address
their own year 2000 issues as they relate to the Company's interface systems.

19
<PAGE> 96
Unaudited Financial Statements
Statutory-Basis

Bankers Life Insurance Company of New York

Nine Months ended September 30, 1998

<PAGE> 97

Bankers Life Insurance Company of New York

Unaudited Financial Statements
Statutory-Basis

Nine Months ended September 30, 1998

CONTENTS

Financial Statements

<TABLE>
<S> <C>
Balance Sheets--Statutory-Basis...................................................................... 1
Statements of Income and Changes in Capital and Surplus--Statutory-Basis............................. 2
Statements of Cash Flows--Statutory-Basis............................................................ 3
</TABLE>

<PAGE> 98

Bankers Life Insurance Company of New York

Unaudited Balance Sheet--Statutory-Basis

<TABLE>
<CAPTION>
SEPTEMBER 30,
1998
----------------------
<S> <C>
ASSETS
Investments
Bonds $ 264,199,318
Policy loans 17,053,742
Cash and short-term investments 20,929,988
Mortgage loans 39,653
Other invested assets 124,963
----------------------
Total investments 302,347,664

Premiums due and deferred (401,224)
Accrued investment income 3,164,532
Electronic data processing equipment,
net of accumulated depreciation 657,599
Receivables and other assets 2,680,516
Federal income tax recoverable 627,888
----------------------
Total assets $ 309,076,975
======================

LIABILITIES AND CAPITAL AND SURPLUS
Policy reserves for future benefits and
deposit funds $ 275,399,781
Policy dividends payable and on deposit 3,757,017
Asset valuation reserve 1,540,585
Other liabilities 3,571,075
----------------------
Total liabilities 284,268,458

Capital and surplus
Common stock; $435 par value, 4,603 shares authorized, issued and
outstanding 2,002,306
Additional paid-in surplus 13,774,663
Unassigned surplus 9,000,112
Other surplus funds 31,436
----------------------
Total capital and surplus 24,808,517
----------------------
Total liabilities and capital and surplus $ 309,076,975
======================
</TABLE>

See accompanying notes.

<PAGE> 99

Bankers Life Insurance Company of New York

Unaudited Statement of Income and Changes in Capital and
Surplus--Statutory-Basis

<TABLE>
<CAPTION>
SEPTEMBER 30,
1998
-------------------
<S> <C>
Premium and other considerations
Life and annuity premiums and deposits $ 36,484,461
Supplementary contracts, dividends accumulations,
accident and health and other 3,939,731
Investment income, net of expenses of $546,990 14,358,460
-------------------
54,782,652
Benefits and expenses
Surrenders 13,518,588
Life, annuities and matured endowments 6,611,484
Supplementary contracts, dividend accumulations,
accident and health and other benefits 587,455
Increase in reserves 21,321,574
Commissions 4,470,917
General expenses 5,836,561
Taxes, licenses and fees 829,066
-------------------
53,175,645
-------------------
Net gain from operations before dividends to policyowners
and federal income taxes 1,607,007

Dividends to policyowners 750,848
Federal income taxes 502,663
-------------------
Net gain from operations 353,496

Realized gains on investments 104,872
-------------------
Net income $ 458,368
===================

Capital and surplus at beginning of year $ 24,531,218

Add (deduct)
Net income 458,368
Change in asset valuation reserve (98,094)
Change in nonadmitted assets and other items (82,977)
-------------------
277,297
-------------------
Capital and surplus at end of year $ 24,808,515
===================
</TABLE>

See accompanying notes.

<PAGE> 100

Bankers Life Insurance Company of New York

Unaudited Statement of Cash Flows--Statutory-Basis

<TABLE>
<CAPTION>
SEPTEMBER 30,
1998
-------------------
<S> <C>
OPERATING ACTIVITIES
Premiums and other considerations, net of
reinsurance ceded $ 37,384,217
Net investment income 14,780,949
Commissions and expense allowances on
reinsurance ceded and other 3,625,642
-------------------
55,790,808
Policy benefits (21,476,542)
Commissions and other expenses (11,025,795)
Dividends to policyowners (625,160)
Federal income taxes (1,010,099)
-------------------
Net cash from operations 21,653,212

INVESTING ACTIVITIES
Proceeds from investments sold, matured or repaid:
Bonds 41,789,490
Other investments 12,903
-------------------
Total investment proceeds 41,802,393
Tax expense on capital gains (164,901)
Net increase in policy loans 418,992
Costs of investments acquired:
Purchase of bonds (63,686,106)
Other investments (39,506)
-------------------
Total investments acquired (63,725,612)
-------------------
Net cash used for investments (21,669,128)

FINANCING ACTIVITIES AND MISCELLANEOUS
Other cash provided 2,201,522
Other cash applied (639,313)
-------------------
Total net other cash provided 1,562,209
-------------------

Increase in cash and short-term investments 1,546,293
Cash and short-term investments at beginning of year 19,383,695
-------------------
Cash and short-term investments at end of year $ 20,929,988
===================
</TABLE>

<PAGE> 101

NOTES TO FINANCIAL STATEMENTS

The accompanying unaudited financial statements have been prepared in accordance
with accounting practices prescribed or permitted by the State of New York
Insurance Department but do not include all of the information and footnotes
required for complete financial statements. In the opinion of management, all
adjustments (consisting of normal accruals) considered necessary for fair
presentation have been included. Operating results for the interim periods are
not necessarily indicative of the results that may be expected for the year
ended December 31, 1998. Interim financial statements should be read in
conjunction with the Company's annual audited financial statements.

<PAGE> 102
PART C

Item 24. Financial Statements and Exhibits

(a) Financial Statements

All required financial statements are included in Part B of this
Registration Statement.

(b) Exhibits

(1) Certified resolution of the Board of Directors of
Bankers Life Insurance Company of New York (the
"Company") authorizing establishment of Bankers Life
Insurance Company of New York Separate Account I (the
"Separate Account").(1)
(2) Not applicable.

(3) (a) Form of Distribution Agreement among the
Company, the Separate Account and IL
Securities, Inc. ("IL Securities").(3)

(b) Form of Sales Agreement among the Company, IL
Securities, Inc. and a broker-dealer.(3)

(4) (a) Form of Flexible Premium Deferred Variable
Annuity Contract.(3)

(b) Form of Qualified Plan Endorsement, IRA
Endorsement, Endorsement for Qualified 403(b)
Annuity, Unisex Rider.(1)

(5) Form of Application for Flexible Premium Variable
Annuity.(1)

(6) (a) Charter of Bankers Life Insurance Company of
New York.(1)
(b) By-Laws of Bankers Life Insurance Company of
New York.(1)
(7) Not Applicable.

(8) (a) Form of Participation Agreement among
Fidelity Variable Insurance Products Fund,
Fidelity Distributors Corporation, and
Bankers Life Insurance Company of New
York.(3)

(b) Form of Participation Agreement among Fidelity
Variable Insurance Products Fund II, Fidelity
Distributors Corporation, and Bankers Life Insurance
Company of New York.(3)

(c) Form of Participation Agreement among Van Eck
Worldwide Insurance Trust, Van Eck Associates
Corporation, and IL Annuity and Insurance
Company.(2)

(d) Amendment to Participation Agreement among Van Eck
Worldwide Insurance Trust, Van Eck Associates
Corporation, and IL Annuity and Insurance Company.(3)

(e) Form of Participation Agreement among T. Rowe
Price International Series, Inc., T. Rowe
Price Investment Services, Inc. and IL
Annuity Insurance Company.(2)

(f) Amendment to Participation Agreement among T.
Rowe Price International Series, Inc., T.
Rowe Price Investment Services, Inc. and IL
Annuity and Insurance Company.(3)

C-1
<PAGE> 103

(g) Form of Participation Agreement among T. Rowe
Price Fixed Income Series, Inc., T. Rowe
Price Investment Services, Inc. and IL
Annuity Insurance Company.(2)

(h) Amendment to Participation Agreement among T.
Rowe Price Fixed Income Series, Inc., T. Rowe
Price Investment Services, Inc. and IL
Annuity and Insurance Company.(3)

(i) Form of Participation Agreement among OCC
Accumulation Trust, OCC Distributors and
Bankers Life Insurance Company of New
York.(3)

(j) Form of Participation Agreement among The
Alger American Fund, Fred Alger & Company,
Incorporated and Bankers Life Insurance
Company of New York.(3)

(k) Form of Participation Agreement among Royce
Capital Fund, Royce & Associates, Inc., and
IL Annuity Insurance Company.(2)

(l) Amendment to Participation Agreement among
Royce Capital Fund, Royce & Associates, Inc.,
and IL Annuity and Insurance Company.(3)

(m) Form of Participation Agreement among SAFECO
Resource Series Trust, SAFECO Asset
Management Company, and Bankers Life
Insurance Company of New York.(3)

(n) Form of Participation Agreement among SoGen
Variable Funds, Inc., Societe Generale
Securities Corporation, and Bankers Life
Insurance Company of New York.(3)

(o) Form of Services Agreement between USA
Administration Services, Inc. and Bankers
Life Insurance Company of New York.(3)

(9) Opinion and Consent of Janis B. Funk, Esquire.(3)

(10) (a) Consent of Sutherland Asbill & Brennan LLP.(3)

(b) Consent of Ernst & Young LLP.(3)

(11) No financial statements will be omitted from Item 23.
(12) Not applicable.

(13) Schedule of Performance Computations.(3)

(14) Not applicable.

(15) Powers of Attorney.(3)

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

(1) Incorporated herein by reference to Registrant's initial
filing of this Form N-4 Registration Statement filed with the
SEC via EDGARLINK on April 1, 1998 (File No. 333-49115).

(2) Incorporated herein by reference to Post-Effective Amendment
No. 6 to the Registration Statement on Form N-4 for IL Annuity
and Insurance Co. Separate Account 1 filed with the SEC via
EDGARLINK on April 30, 1998 (File No. 33-89028).

(3) Filed herewith.

C-2
<PAGE> 104
ITEM 25. DIRECTORS AND OFFICERS OF BANKERS LIFE INSURANCE COMPANY OF NEW YORK

<TABLE>
<CAPTION>
NAME AND PRINCIPAL BUSINESS ADDRESS* POSITION AND OFFICE WITH DEPOSITOR
- ------------------------------------ ----------------------------------
<S> <C>
Larry R. Prible** Chairman of the Board and Director
Stephen J. Shorrock President, Chief Executive Officer and
Director
Eugene M. Busche** Director
Gregory J. Carney** Director
John J. Fahrenbach** Director
Andrew J. Paine, Jr.*** Director
Garrett P. Ryan** Director
Dr. Gene E. Sease**** Director
Richard A. Steele** Director
George A. Thiel Director
William A. Walsh Director

Officers
- --------

Lisa Paige Foxworthy-Parker Secretary
Kenneth A. Roman Controller and Treasurer
James J. Kerwin Vice President and Chief
Administrative Officer
Valerie L. Margolin Vice President, Actuarial
Paul K. Mariboe Vice President, Information Systems
Maria Umbach Vice President, Marketing
Albert J. Palatiello, Jr. Vice President, Sales
Elizabeth G. O'Hara Assistant Vice President and
Chief Underwriter
Jonathan A. Clark Assistant Vice President, Actuarial
Maryann Ellis Assistant Vice President, Special Markets
Rosemarie A. Malhado Assistant Vice President, Quality
Assurance
Robert P. Ryder Assistant Vice President, Underwriting
Judy Montano Assistant Vice President, Operations
Ann M. Wagner Assistant Controller
</TABLE>

- -----------
* Unless otherwise indicated, the principal business address of the
directors and officers is 65 Froehlich Farm Boulevard, Woodbury, New York
11797.
** The principal business address of these directors and officers
is 2960 North Meridian Street, Indianapolis, Indiana 46208.
*** The principal business address of Mr. Paine is Chairman, NBD Indiana,
Inc., 1 Indiana Square, Indianapolis, Indiana 46266.
**** The principal business address of Mr. Sease is Chairman, Sease, Gerig
& Associates, 101 West Ohio Street, Suite 1800, Indianapolis, Indiana 46204.

C-3
<PAGE> 105
ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR
OR REGISTRANT

<TABLE>
<CAPTION>
Percent of Voting
Name Jurisdiction Securities Owned Principal Business
- ---- ------------ ------------------ ------------------
<S> <C> <C>
Indianapolis Life Indiana Mutual Company Life & Health Insurance
Insurance Company*
("Indianapolis Life")

American United Life Indiana Mutual Company Life & Health Insurance
Insurance Company*
("American United")

The Indianapolis Life Group Indiana Indianapolis Life (71.43%) Holding Company
of Companies, Inc. American United (28.41%)
("The Indianapolis Group")

IL Annuity and Insurance Massachusetts All voting securities Annuities
Company* owned by The
Indianapolis Group

IL Securities, Inc.* Indiana All voting securities Broker/Dealer
owned by The
Indianapolis Group

IL Term Insurance Company* Indiana All voting securities Life & Health Insurance
owned by The
Indianapolis Group

Western Security Life* Arizona All voting securities Life & Health Insurance
Insurance Company owned by Indianapolis
Life
- ------------
</TABLE>

* File Separate Financial Statements.

ITEM 27. NUMBER OF CONTRACTOWNERS

None.

ITEM 28. INDEMNIFICATION

The Charter of Bankers Life Insurance Company of New York provides, in
Article IX, as follows:

C-4
<PAGE> 106
ARTICLE IX
INDEMNIFICATION

9.01 (a) To the extent not prohibited by applicable law, the Company shall
indemnify and hold harmless any person who was or is a party, or
is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the
right of the corporation) by reason of the fact that he is or was
a director, officer or employee of the Company, or who is or was
serving at the request of the Company as a director, officer or
employee of another corporation, partnership, joint venture, trust
or other enterprise or entity, from and against any and all
liability and expenses (including attorney's fees), judgments,
fines and amount paid in settlement actually and reasonably
incurred by him in connection with such action, suit or
proceeding, if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to the best interest
of the Company and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the
best interests of the Company, and, with respect to any criminal
action or proceeding, had reasonable cause to believe that his
conduct was unlawful.

(b) To the extent not prohibited by applicable law, the Company shall
indemnify and hold harmless any person who was or is a party, or
is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the company to
procure a judgment in its favor by reason of the fact that he is
or was a director, officer or employee of the Company, or who is
or was serving at the request of the Company as a director,
officer or employee of another corporation, partnership, joint
venture, trust or other enterprise or entity, from and against any
expenses (including attorneys' fees), actually and reasonably
incurred by him in connection with the defense or settlement of
such action or suit, if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to the best interests
of the Company and except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable for negligence or misconduct
in the performance of his duty to the Company, unless, and only to
the extent that the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability, but in view of all the circumstances of the case, such
person is fairly and

C-5
<PAGE> 107
reasonably entitled to indemnity for such expenses as the court
shall deem proper.

(c) To the extent that a director, officer or employee of the Company
or any person who is or was serving at the request of the Company
as a director, officer or employee of another corporation,
partnership, joint venture, trust or other enterprise or entity,
has been successful, on the merits or otherwise, in the defense of
any action, suit or proceeding referred to in paragraphs (a) and
(b), or in defense of any claim, issue or matter therein, he shall
be indemnified against expenses (including attorney's fees)
actually and reasonably incurred by him in connection therewith.

9.02 Determination of Right to Indemnification. Any indemnification under
paragraphs (a) and (b) of Section 9.01 (unless ordered by a court) shall
be made by the Company only as authorized in the specific case, upon a
determination that indemnification of the director, officer or employee
is proper in the circumstances because he has met the applicable standard
of conduct set forth in such paragraphs (a) and (b). Such determination
shall be made (1) by the Board of Directors by a majority vote of a
quorum consisting of directors who were not parties to such action, suit
or proceeding, or (2) if such quorum is not obtainable, or, even if
obtainable, a quorum of disinterested directors so directs, by
independent legal counsel in written opinion, or (3) by the stockholders.

9.03 Advances. To the extent not prohibited by applicable law, expenses
incurred in defending a civil or criminal action, suit or proceeding may
be paid by the Company in advance of the final disposition of such
action, suit or proceeding, as authorized by the Board of Directors in
the specific case, upon receipt of an undertaking by or on behalf of the
director, officer or employee who is or was serving at the request of the
Company as a director, officer or employee of another corporation,
partnership, joint venture, trust or other enterprise or entity, to repay
such amount, unless it shall ultimately be determined that he is entitled
to be indemnified by the Company as authorized in this Article of these
Bylaws.

9.04 Exclusivity. The indemnification provided by this Article shall not be
deemed exclusive of any other rights to which those seeking
indemnification may be entitled under any agreement, resolution, vote of
stockholders or disinterested directors, or otherwise, both as to action
in his official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has ceased to
be a director, officer or employee, or person who was serving at the
request of the Company as a director, officer or employee of another
corporation, partnership, joint venture, trust or other enterprise or
entity, and shall enure to the benefit of the heirs, executors and
administrators of such a person.

9.05 Insurance. The Company may purchase and maintain insurance on behalf of
any person who is or was a director, officer or employee of the Company,
or who is or

C-6
<PAGE> 108
was serving at the request of the Company as a director, officer
or employee of another corporation, partnership, joint venture,
trust or other enterprise or entity, against any liability
asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Company
would have the power to indemnify him against such liability under
the provisions of this Article of these Bylaws or otherwise.

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

(a) IL Securities, Inc. is the registrant's principal underwriter.

(b) Officers and Directors of IL Securities, Inc. and their addresses, are as
follows:

<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address* with the Underwriter with Registrant
------------------ -------------------- ------------------------
<S> <C> <C>
Larry R. Prible Chairman of the Board Chairman of the Board and Director

Gregory J. Carney President, Chief Executive Officer and Director Director

Lisa Foxworthy-Parker Secretary and Director Secretary

William L. Boyd Director None

John J. Fahrenbach Director Director

Garrett P. Ryan Director Director

Joe C. Lowe Vice-President None

Gene E. Trueblood Treasurer None
- --------------
</TABLE>

* All of the persons listed above have as their principal business address:
P.O. Box 1230, 2960 North Meridian Street, Indianapolis, Indiana 46208.

C-7
<PAGE> 109
(c)

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

Name of Net Underwriting
Principal Discounts and Compensation Brokerage
Underwriter Commissions on Redemption Commissions Compensation
----------- ----------- ------------- ----------- ------------
<S> <C> <C> <C> <C>
Not applicable.

</TABLE>

Commissions are paid by the Company directly to agents who are registered
representatives of the principal underwriter, or to broker-dealers that have
entered into a selling agreement with the principal underwriter, or broker
dealers having selling agreements with such broker-dealers with respect to the
sales of the Contracts.

ITEM 30. LOCATION OF BOOKS AND RECORDS

All of the accounts, books, records or other documents required to be
kept by Section 31(a) of the Investment Company Act of 1940 and rules
thereunder, are maintained by Bankers Life Insurance Company of New York at its
home office and at the offices of USA Administration Services, Inc., P.O. Box
29105, Overland Park, KS 66201.

ITEM 31. MANAGEMENT SERVICES

All management contracts are discussed in Part A or Part B of this
registration statement.

ITEM 32. UNDERTAKINGS AND REPRESENTATIONS

(a) The registrant undertakes that it will file a post-effective
amendment to this registration statement as frequently as is
necessary to ensure that the audited financial statements in the
registration statement are never more than 16 months old for as
long as purchase payments under the contracts offered herein are
being accepted.

(b) The 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 and send to Bankers Life Insurance
Company of New York for a statement of additional information.

(c) The registrant undertakes to deliver any statement of additional
information and any financial statements required to be made
available under this Form N-4 promptly upon written or oral
request to the Company at the address or phone number listed in
the prospectus.

C-8
<PAGE> 110
(d) The Company represents that in connection with its offering of the
contracts 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.

(e) The Company hereby represents that the fees and charges deducted
under the Contracts, in the aggregate, are reasonable in relation
to the services rendered, the expenses expected to be incurred,
and the risks assumed by the Company.

C-9
<PAGE> 111

As required by the Securities Act of 1933 and the Investment Company Act
of 1940, the Registrant, Bankers Life Insurance Company of New York Separate
Account I, has caused this registration statement to be signed on its behalf,
in the County of Nassau, and the State of New York, on this 17th day of
December, 1998.

BANKERS LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT I (Registrant)

Attest: /s/Janis B. Funk By: /s/ Stephen J. Shorrock
----------------

Stephen J. Shorrock
President

By: BANKERS LIFE INSURANCE COMPANY
OF NEW YORK (Depositor)

Attest: /s/ Janis B. Funk By: /s/ Stephen J. Shorrock
----------------- -----------------------

Stephen J. Shorrock
President

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

<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Larry R. Prible * Chairman of the Board December 17, 1998
- --------------------------------- and Director
Larry R. Prible

/s/ Stephen J. Shorrock * President, Chief Executive December 17, 1998
- --------------------------------- Officer and Director
Stephen J. Shorrock

/s/ Kenneth A. Roman * Controller and Treasurer December 17, 1998
- ---------------------------------
Kenneth A. Roman

/s/ Eugene M. Busche * Director December 17, 1998
- ---------------------------------
Eugene M. Busche
</TABLE>

C-10
<PAGE> 112

<TABLE>
<S> <C>
/s/ Gregory J. Carney * Director December 17, 1998
- ---------------------------------
Gregory J. Carney

/s/ John J. Fahrenbach * Director December 17, 1998
- ---------------------------------
John J. Fahrenbach

/s/ Andrew J. Paine, Jr. * Director December 17, 1998
- ---------------------------------
Andrew J. Paine, Jr.

/s/ Garrett P. Ryan * Director December 17, 1998
- ---------------------------------
Garrett P. Ryan

/s/ Dr. Gene E. Sease * Director December 17,1998
- ---------------------------------
Dr. Gene E. Sease

/s/ Richard A. Steele * Director December 17, 1998
- ---------------------------------
Richard A. Steele

/s/ George A. Thiel * Director December 17, 1998
- ---------------------------------
George A. Thiel

/s/ William A. Walsh * Director December 17, 1998
- ---------------------------------
William A. Walsh

/s/ Janis B. Funk On December 17, 1998, as Attorney-in-Fact pursuant to
- ------------------------------------- powers of attorney filed herewith.
* By Janis B. Funk
</TABLE>

C-11
<PAGE> 113
EXHIBIT INDEX

(3) (a) Form of Distribution Agreement among the Company, the
Separate Account and IL Securities, Inc.

(b) Form of Sales Agreement among the Company, IL Securities,
Inc. and a broker-dealer

(4) (a) Form of Flexible Premium Deferred Variable Annuity
Contract

(8) (a) Form of Participation Agreement among Fidelity Variable
Insurance Products Fund, Fidelity Distributors
Corporation, and the Company

(b) Form of Participation Agreement among Fidelity Variable
Insurance Products Fund II, Fidelity Distributors
Corporation, and the Company

(d) Amendment to Participation Agreement among Van Eck
Investment Trust, Van Eck Associates Corporation, and
the Company

(f) Amendment to Participation Agreement among T. Rowe Price
International Series, Inc., T. Rowe Price Investment
Services, Inc., and the Company

(h) Amendment to Participation Agreement among T. Rowe Price
Fixed Income Series, Inc., T. Rowe Price Investment
Services, Inc., and the Company

(i) Form of Participation Agreement among OCC Accumulation
Trust, OCC Distributors, and the Company

(j) Form of Participation Agreement among The Alger American
Fund, Fred Alger & Company, Incorporated, and the Company

(l) Amendment to Participation Agreement among Royce Capital
Fund, Royce & Associates, Inc., and the Company

(m) Form of Participation Agreement among SAFECO Resource
Series Trust, SAFECO Asset Management Company, and the
Company

(n) Form of Participation Agreement among SoGen Variable
Funds, Inc., Societe Generale Securities Corporation, and
the Company

(o) Form of Services Agreement between USA Administration
Services, Inc. and Bankers Life Insurance Company of New
York.

(9) Opinion and Consent of Janis B. Funk, Esq.

(10) (a) Consent of Sutherland Asbill & Brennan LLP

(b) Consent of Ernst & Young LLP

(13) Schedule of Performance Computations

(15) Powers of Attorney

C-12

<PAGE> 1
EXHIBIT 3(a)

DISTRIBUTION AGREEMENT

AGREEMENT dated as of _________________ by and between BANKERS LIFE
INSURANCE COMPANY OF NEW YORK ("Insurer"), a New York insurance company, on its
behalf and on behalf of each separate account identified in Schedule 1 hereto,
and IL SECURITIES, INC. ("Distributor"), an Indiana corporation.

WITNESSETH:

WHEREAS, Distributor is a broker-dealer that engages in the distribution
of variable insurance products and other investment products; and

WHEREAS, Insurer desires to issue certain variable insurance products
described more fully below to the public through Distributor acting as principal
underwriter;

NOW, THEREFORE, in consideration of their mutual promises, Insurer and
Distributor hereby agree as follows:

1. Additional Definitions

a. Contracts -- The class or classes of variable insurance products
set forth on Schedule 1 to this Agreement as in effect at the
time this Agreement is executed, and such other classes of
variable insurance products that may be added to Schedule 1 from
time to time in accordance with Section 11.b of this Agreement,
and including any riders to such contracts and any other
contracts offered in connection therewith. For this purpose and
under this Agreement generally, a "class of Contracts" shall mean
those Contracts issued by Insurer on the same policy form or
forms and covered by the same Registration Statement.

b. Registration Statement -- At any time that this Agreement is in
effect, each currently effective registration statement filed
with the SEC under the 1933 Act on a prescribed form, or
currently effective post-effective amendment thereto, as the case
may be, relating to a class of Contracts, including financial
statements included in, and all exhibits to, such registration
statement or post-effective amendment. For purposes of Section 9
of this Agreement, the term "Registration Statement" means any
document which is or at any time was a Registration Statement
within the meaning of this Section 1.b.

c. Prospectus -- The prospectus included within a Registration
Statement, except that, if the most recently filed version of the
prospectus (including any supplements thereto) filed pursuant to
Rule 497 under the 1933 Act subsequent to the date on which a
Registration Statement became effective differs from the
prospectus included within such Registration Statement at the
time it became

<PAGE> 2

effective, the term "Prospectus" shall refer to the most recently
filed prospectus filed under Rule 497 under the 1933 Act, from and
after the date on which it shall have been filed. For purposes of
Section 9 of this Agreement, the term "any Prospectus" means any
document which is or at any time was a Prospectus within the meaning
of this Section 1.c.

d. Fund -- An investment company in which the Separate Account invests.

e. Variable Account -- A separate account supporting a class or classes
of Contracts and specified on Schedule 1 as in effect at the time
this Agreement is executed, or as it may be amended from time to
time in accordance with Section 11.b of this Agreement.

f. 1933 Act -- The Securities Act of 1933, as amended.

g. 1934 Act -- The Securities Exchange Act of 1934, as amended.

h. 1940 Act -- The Investment Company Act of 1940, as amended.

i. SEC -- The Securities and Exchange Commission.

j. NASD -- The National Association of Securities Dealers, Inc.

k. Regulations -- The rules and regulations promulgated by the SEC
under the 1933 Act, the 1934 Act and the 1940 Act as in effect at
the time this Agreement is executed or thereafter promulgated.

l. Selling Broker-Dealer -- A person registered as a broker-dealer and
licensed as a life insurance agent or affiliated with a person so
licensed, and authorized to distribute the Contracts pursuant to a
sales agreement as provided for in Section 4 of this Agreement.

m. Agents Manual -- The agents manual and other written rules,
regulations and procedures provided by Insurer to insurance agents
appointed to sell its insurance contracts, as revised from time to
time.

n. Representative -- When used with reference to Distributor or a
Selling Broker-Dealer, an individual who is an associated person, as
that term is defined in the 1934 Act.

o. Application -- An application for a Contract.

p. Premium -- A payment made under a Contract by an applicant or
purchaser to purchase benefits under the Contract.

-2-
<PAGE> 3

q. Annuity Service Center -- The service office identified in the
Prospectus as the location at which Premiums and Applications are
accepted.

2. Authorization and Appointment

a. Scope of Authority. Insurer hereby authorizes Distributor on an
exclusive basis, and Distributor accepts such authority, subject
to the registration requirements of the 1933 Act and the 1940 Act
and the provisions of the 1934 Act and conditions herein, to be
the distributor and principal underwriter for the sale of the
Contracts to the public in each state and other jurisdiction in
which the Contracts may lawfully be sold during the term of this
Agreement. Insurer hereby appoints Distributor as its
independent general agent for sale of the Contracts. Insurer
hereby authorizes Distributor to grant authority to Selling
Broker-Dealers to solicit Applications and Premiums to the extent
Distributor deems appropriate and consistent with the marketing
program for the Contracts or a class of Contracts, subject to the
conditions set forth in Section 4 of this Agreement. The
Contracts shall be offered for sale and distribution at premium
rates set from time to time by Insurer. Distributor shall use
its best efforts to market the Contracts actively, directly
and/or through Selling Broker-Dealers in accordance with Section
4 of this Agreement, subject to compliance with applicable law,
including rules of the NASD.

b. Limits on Authority. Distributor shall act as an independent
contractor and nothing herein contained shall constitute
Distributor or its agents, officers or employees as agents,
officers or employees of Insurer solely by virtue of their
activities in connection with the sale of the Contracts
hereunder. Distributor and its Representatives shall not have
authority, on behalf of Insurer: to make, alter or discharge any
Contract or other insurance policy or annuity entered into
pursuant to a Contract; to waive any Contract forfeiture
provision; to extend the time of paying any Premium; or to
receive any monies or Premiums (except for the sole purpose of
forwarding monies or Premiums to Insurer). Distributor shall not
expend, nor contract for the expenditure of, the funds of
Insurer. Distributor shall not possess or exercise any authority
on behalf of Insurer other than that expressly conferred on
Distributor by this Agreement.

3. Solicitation Activities

a. Distributor Representatives. No Distributor Representative shall
solicit the sale of a Contract unless at the time of such
solicitation such individual is duly registered with the NASD and
duly licensed with all applicable state insurance and securities
regulatory authorities, and is duly appointed as an insurance agent
of Insurer.

-3-
<PAGE> 4

b. Solicitation Activities. All solicitation and sales activities
engaged in by Distributor and the Distributor Representatives with
respect to the Contracts shall be in compliance with all applicable
federal and state securities laws and regulations, as well as all
applicable insurance laws and regulations and the Agents Manual. In
particular, without limiting the generality of the foregoing:

(1) Distributor shall train, supervise and be solely responsible
for the conduct of Distributor Representatives in their
solicitation of Applications and Premiums and distribution of
the Contracts, and shall supervise their compliance with
applicable rules and regulations of any insurance or
securities regulatory agencies that have jurisdiction over
variable insurance product activities.

(2) Neither Distributor nor any Distributor Representative shall
offer, attempt to offer, or solicit Applications for, the
Contracts or deliver the Contracts, in any state or other
jurisdiction unless Insurer has notified Distributor that such
Contracts may lawfully be sold or offered for sale in such
state, and has not subsequently revised such notice.

(3) Neither Distributor nor any Distributor Representative shall
give any information or make any representation in regard to a
class of Contracts in connection with the offer or sale of
such class of Contracts that is not in accordance with the
Prospectus for such class of Contracts, or in the
then-currently effective prospectus or statement of additional
information for a Fund, or in current advertising materials
for such class of Contracts authorized by Insurer.

(4) All Premiums paid by check or money order that are collected
by Distributor or any of its Representatives shall be remitted
promptly, and in any event not later than two business days,
in full, together with any Applications, forms and any other
required documentation, to BANKERS LIFE INSURANCE COMPANY OF
NEW YORK as directed in the Agent's Manual. Checks or money
orders in payment of Premiums shall be drawn to the order of
"BANKERS LIFE INSURANCE COMPANY OF NEW YORK." Premiums may be
transmitted by wire order from Distributor to the Annuity
Service Office in accordance with the procedures set forth in
the Agents Manual. If any Premium is held at any time by
Distributor, Distributor shall hold such Premium in a
fiduciary capacity and such Premium shall be remitted
promptly, and in any event not later than two business days,
to Insurer. Distributor acknowledges that all such Premiums,
whether by check, money order or wire, shall be the property
of Insurer. Distributor acknowledges that Insurer shall have
the unconditional right to reject, in whole or in part, any
Application or Premium.

-4-
<PAGE> 5

c. Representations and Warranties of Distributor. Distributor
represents and warrants to Insurer that Distributor is and shall
remain registered during the term of this Agreement as a
broker-dealer under the 1934 Act, is a member with the NASD, and is
duly registered under applicable state securities laws, and that
Distributor is and shall remain during the term of this Agreement in
compliance with Section 9(a) of the 1940 Act.

4. Selling Broker-Dealers. Distributor shall ensure that sales of the
Contracts by Selling Broker-Dealers comply with the following conditions,
and any additional conditions Insurer may specify from time to time.

a. Every Selling Broker-Dealer shall be both registered as a
broker-dealer with the SEC and a member of the NASD and licensed
as an insurance agent with authority to sell variable products or
associated with an insurance agent so licensed. Any individuals
to be authorized to act on behalf of Selling Broker-Dealer shall
be duly registered with the NASD as representatives of Selling
Broker-Dealer shall be duly registered with the NASD as
representatives of Selling Broker-Dealer with authority to sell
variable products, and shall be licensed as insurance agents with
authority to sell variable products. Distributor shall verify
that Selling Broker-Dealer and its Representatives are duly
licensed under applicable state insurance law to sell the
Contracts (or, if Broker-Dealer is not so licensed, that it is
associated with an entity so licensed).

b. Every Selling Broker-Dealer (or, if applicable, its associated
general insurance agency) and each of its Representatives shall have
been appointed by Insurer, provided that Insurer reserves the right
to refuse to appoint any proposed person, or once appointed, to
terminate such appointment.

c. Every Selling Broker-Dealer must enter into a written sales
agreement with Distributor which sales agreement, among other
things, will require such Selling Broker-Dealer to use its best
efforts to solicit applications for Contracts and to comply with
applicable laws and regulations, including the Insurer's rules
and regulations as reflected in the Agents Manual or otherwise
communicated to agents appointed by Insurer, and will contain
such other provisions as the Distributor deems to be consistent
herewith.

d. In view of Insurer's desire to ensure that Contracts will be sold
to purchasers for whom the Contracts will be suitable, the
written Sales Agreement shall require that Selling Broker-Dealers
and their Representatives not make recommendations to an
applicant to purchase a Contract in the absence of reasonable
grounds to believe that the purchase of the Contract is suitable
for the applicant. While not limited to the following, a
determination of suitability shall be based on information
supplied by an applicant after a reasonable inquiry concerning
the applicant's other security holdings, insurance and investment
objectives, financial

-5-
<PAGE> 6

situation and needs, and the likelihood that the applicant will
continue to make any premium payments contemplated by the Contract
applied for and will keep the Contract in force for a sufficient
period of time so that Insurer's acquisition costs are amortized
over a reasonable period of time.

5. Marketing Materials

a. Preparation and Filing. Insurer shall be primarily responsible
for the design and preparation of all promotional, sales and
advertising material relating to the Contracts. Insurer shall be
responsible for filing such material, as required, with the NASD
and any state securities regulatory authorities, on behalf of the
Distributor. Insurer shall be responsible for filing all
promotional, sales or advertising material, as required, with any
state insurance regulatory authorities. Insurer shall be
responsible for preparing the Contract forms and filing them with
applicable state insurance regulatory authorities, and for
preparing the Prospectuses and Registration Statements and filing
them with the SEC and state regulatory authorities, to the extent
required.

b. Use in Solicitation Activities. Insurer shall be responsible for
furnishing Distributor with such Applications, Prospectuses and
other materials for use by Distributor and any Selling
Broker-Dealers in their solicitation activities with respect to
the Contracts. Insurer shall notify Distributor of those states
or jurisdictions which require delivery of a statement of
additional information with a prospectus to a prospective
purchaser.

6. Compensation and Expenses

a. Insurer shall pay compensation for sales of the Contracts in
accordance with Schedule 2 hereto. Insurer shall pay compensation
payable to Distributor Representatives and to Selling
Broker-Dealers, on Distributor's behalf.

b. Insurer shall pay all expenses in connection with:

(1) the preparation and filing of each Registration Statement
(including each pre-effective and post-effective amendment
thereto) and the preparation and filing of each Prospectus
(including any preliminary and each definitive Prospectus);

(2) the preparation, underwriting, issuance and administration of
the Contracts;

(3) any registration, qualification or approval or other filing of
the Contracts or Contract forms required under the securities
or insurance laws of the states in which the Contracts will be
offered;

-6-
<PAGE> 7

(4) all registration fees for the Contracts payable to the SEC;
and

(5) the printing of all promotional materials definitive
Prospectuses for the Contracts and any supplements thereto for
distribution to existing Contractowners.

c. Distributor shall pay any expenses incurred by Distributor or its
Representatives or employees for the purpose of carrying out the
obligations of Distributor hereunder.

7. Compliance

a. Maintaining Registration and Approvals. Insurer shall be responsible
for maintaining the registration of the Contracts with the SEC and
any state securities regulatory authority with which such
registration is required, and for gaining and maintaining approval
of the Contract forms where required under the insurance laws and
regulations of each state or other jurisdiction in which the
Contracts are to be offered.

b. Confirmations and 1934 Act Compliance. Insurer, as agent for
Distributor, shall confirm to each applicant for and purchaser of
a Contract in accordance with Rule 10b-10 under the 1934 Act
acceptance of Premiums and such other transactions as are
required by Rule 10b-10 or administrative interpretations
thereunder. Insurer shall maintain and preserve such books and
records with respect to such confirmations in conformity with the
requirements of Rules 17a-3 and 17a-4 under the 1934 Act to the
extent such requirements apply. Insurer shall maintain all such
books and records and hold such books and records on behalf of
and as agent for Distributor whose property they are and shall
remain, and acknowledges that such books and records are at all
times subject to inspection by the SEC in accordance with Section
17(a) of the 1934 Act.

c. Issuance and Administration of Contracts. Insurer shall be
responsible for issuing the Contracts and administering the
Contracts and the Variable Account, provided, however, that
Distributor shall have full responsibility for the securities
activities of all persons employed by the Insurer, engaged
directly or indirectly in the Contract operations, and for the
training, supervision and control of such persons to the extent
of such activities.

8. Investigations and Proceedings

a. Cooperation. Distributor and Insurer shall cooperate fully in
any securities or insurance regulatory investigation or
proceeding or judicial proceeding arising in connection with the
offering, sale or distribution of the Contracts distributed under
this Agreement. Without limiting the foregoing, Insurer and
Distributor

-7-
<PAGE> 8

shall notify each other promptly of any customer complaint or notice
of any regulatory investigation or proceeding or judicial proceeding
received by either party with respect to the Contracts.

9. Indemnification

a. By Insurer. Insurer shall indemnify and hold harmless
Distributor and each person who controls or is associated with
Distributor within the meaning of such terms under the federal
securities laws, and any officer, director, employee or agent of
the foregoing, against any and all losses, claims, damages or
liabilities, joint or several (Including any investigative, legal
and other expenses reasonably incurred in connection with, and
any amounts paid in settlement of, any action, suit or proceeding
or any claim asserted), to which distributor and/or any such
person may become subject, under any statute or regulation, any
NASD rule or interpretation, at common law or otherwise, insofar
as such losses, claims, damages or liabilities:

(1) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact or omission
or alleged omission to state a material fact required to
be stated therein or necessary to make the statements
therein not misleading, in light of the circumstances in
which they were made, contained in any (i) Registration
Statement or in any Prospectus or (ii) blue-sky
application or other document executed by Insurer
specifically for the purpose of qualifying any or all of
the Contracts for sale under the securities laws of any
jurisdiction; provided that Insurer shall not be liable
in any such case to the extent that such loss, claim,
damage or liability arises out of, or is based upon, an
untrue statement or alleged untrue statement or omission
or alleged omission made in reliance upon information
furnished in writing to Insurer by Distributor
specifically for use in the preparation of any such
Registration Statement or any such blue-sky application
or any amendment thereof or supplement thereto;

(2) result from any breach by Insurer of any provision of
this Agreement.

This indemnification agreement shall be in addition to any liability
that Insurer may otherwise have; provided, however, that no person
shall be entitled to indemnification pursuant to this provision if
such loss, claim, damage or liability is due to the willful
misfeasance, bad faith, gross negligence or reckless disregard of
duty by the person seeking indemnification.

b. By Distributor. Distributor shall indemnify and hold harmless
Insurer and each person who controls or is associated with
Insurer within the meaning of such terms under the federal
securities laws, and any officer, director, employee or

-8-
<PAGE> 9

agent of the foregoing, against any and all losses, claims, damages
or liabilities, joint or several (including any investigative, legal
and other expenses reasonably incurred in connection with, and any
amounts paid in settlement of, any action, suit or proceeding or any
claim asserted), to which Insurer and/or any such person may become
subject under any statute or regulation, any NASD rule or
interpretation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities:

(1) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact or omission or alleged
omission to state a material fact required to be stated
therein or necessary in order to make the statements therein
not misleading, in light of the circumstances in which they
were made, contained in any (i) Registration Statement or in
any Prospectus, or (ii) blue-sky application or other document
executed by Insurer specifically for the purpose of qualifying
any or all of the Contracts for sale under the securities laws
of any jurisdiction; in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance
upon information furnished in writing by Distributor to
Insurer specifically for use in the preparation of any such
Registration Statement or any such blue-sky application or any
amendment thereof or supplement thereto

(2) result because of any use by Distributor or any Distributor
Representative of promotional, sales or advertising material
not authorized by Insurer or any verbal or written
misrepresentations by Distributor or any Distributor
Representative or any unlawful sales practices concerning the
Contracts by Distributor or any Distributor Representative
under federal securities laws or NASD regulations; or

(3) result from any breach by distributor of any provision of
this Agreement.

This indemnification shall be in addition to any liability that
Distributor may otherwise have; provided, however, that no person
shall be entitled to indemnification pursuant to this provision if
such loss, claim, damage or liability is due to the willful
misfeasance, bad faith, gross negligence or reckless disregard of
duty by the person seeking indemnification.

c. General. Promptly after receipt by a party entitled to
indemnification ("indemnified person") under this Section 9 of
notice of the commencement of any action as to which a claim will
be made against any person obligated to provide indemnification
under this Section 9 ("indemnifying party"), such indemnified
person shall notify the indemnifying party in writing of the
commencement thereof as soon as practicable thereafter, but
failure to so notify

-9-
<PAGE> 10

the indemnifying party shall not relieve the indemnifying party from
any liability which it may have to the indemnified person otherwise
than on account of this Section 9. The indemnifying party will be
entitled to participate in the defense of the indemnified person but
such participation will not relive such indemnifying party of the
obligation to reimburse the indemnified person for reasonable legal
and other expenses incurred by such indemnified person in defending
himself or itself.

The indemnification provisions contained in this Section 9 shall
remain operative in full force and effect, regardless of any
termination of this Agreement. A successor by law of Distributor or
Insurer, as the case may be, shall be entitled to the benefits of
the indemnification provisions contained in this Section 9.

10. Termination. This Agreement shall terminate automatically if it is
assigned by a party without the prior written consent of the other
party. This Agreement may be terminated at any time for any reason by
either party upon 30 days' written notice to the other party, without
payment of any penalty. (The term "assigned" shall not include any
transaction exempted from Section 15(b)(2) of the 1940 Act.) This
Agreement may be terminated at the option of either party to this
Agreement upon the other party's material breach of any provision of
this Agreement or of any representation or warranty made in this
Agreement, unless such breach has been cured within 10 days after
receipt of notice of breach from the non-breaching party. Upon
termination of this Agreement all authorizations, rights and
obligations shall cease except the obligation to settle accounts
hereunder, including commissions on Premiums subsequently received for
Contracts in effect at the time of termination or issued pursuant to
Applications received by Insurer prior to termination.

11. Miscellaneous

a. Binding Effect. This Agreement shall be binding on and shall inure
to the benefit of the respective successors and assigns of the
parties hereto provided that neither party shall assign this
Agreement or any rights or obligations hereunder without the prior
written consent of the other party.

b. Schedules. The parties to this Agreement may amend Schedule 1 to
this Agreement from time to time to reflect additions of any
class of Contracts and Variable Accounts. The provisions of this
Agreement shall be equally applicable to each such class of
Contracts and each Variable Account that may be added to the
Schedule, unless the context otherwise requires. Insurer may
amend Schedule 2 unilaterally, from time to time. Any other
change in the terms or provisions of this Agreement shall be by
written agreement between Insurer and Distributor.

c. Rights, Remedies, and Obligations are Cumulative. The rights,
remedies and obligations contained in this Agreement are
cumulative and are in addition to any

-10-
<PAGE> 11

and all rights, remedies and obligations, at law or in equity, which
the parties hereto are entitled to under state and federal laws.
Failure of either party to insist upon strict compliance with any of
the conditions of this Agreement shall not be construed as a waiver
of any of the conditions, but the same shall remain in full force
and effect. No waiver of any of the provisions of this Agreement
shall be deemed, or shall constitute, a waiver of any other
provisions, whether or not similar, nor shall any waiver constitute
a continuing waiver.

d. Notices. All notices hereunder are to be made in writing and shall
be given:

if to Insurer, to: Stephen J. Shorrock
Bankers Life Insurance
Company of New York
65 Froehlich Farm Boulevard
Woodbury, NY 11797

if to Distributor, to: Joe C. Lowe
IL Securities, Inc.
2960 N. Meridian Street
Indianapolis, IN 46208

or such other address as such party may hereafter specify in
writing. Each such notice to a party shall be either hand delivered
or transmitted by registered or certified United States mail with
return receipt requested, or by overnight mail by a nationally
recognized courier, and shall be effective upon delivery.

e. Interpretation; Jurisdiction. This Agreement constitutes the
whole agreement between the parties hereto with respect to the
subject matter hereof, and supersedes all prior oral or written
understandings, agreements or negotiations between the parties
with respect to such subject matter. No prior writings by or
between the parties with respect to the subject matter hereof
shall be used by either party in connection with the
interpretation of any provision of this Agreement. This
Agreement shall be construed and its provisions interpreted under
and in accordance with the internal laws of the state of Indiana
without giving effect to principles of conflict of laws.

f. Severability. This is a severable Agreement. In the event that
any provision of this Agreement would require a party to take
action prohibited by applicable federal or state law or prohibit
a party from taking action required by applicable federal or
state law, then it is the intention of the parties hereto that
such provision shall be enforced to the extent permitted under
the law, and, in any event, that all other provisions of this
Agreement shall remain valid and duly enforceable as if the
provision at issue had never been a part hereof.

-11-
<PAGE> 12

g. Section and Other Headings. The headings in this Agreement are
included for convenience of reference only and in no way define or
delineate any of the provisions hereof or otherwise affect their
construction or effect.

h. Counterparts. This Agreement may be executed in two or more
counterparts, each of which taken together shall constitute one
and the same instrument.

i. Regulation. This Agreement shall be subject to the provisions of the
1933 Act, 1934 Act and 1940 Act and the Regulations and the rules
and regulations of the NASD, from time to time in effect, including
such exemptions from the 1940 Act as the SEC may grant, and the
terms hereof shall be interpreted and construed in accordance
therewith.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by such authorized officers on the date specified below.

BANKERS LIFE INSURANCE COMPANY OF NEW YORK

By:
------------------------------------

Name:
------------------------------------

Title:
------------------------------------

IL SECURITIES, INC.

By:
------------------------------------

Name:
------------------------------------

Title:
------------------------------------

-12-
<PAGE> 13

SCHEDULE 1

Bankers Life Insurance Company of New York Separate Account I

The Visionary Choice: Flexible Premium Deferred Variable Annuity

-13-
<PAGE> 14
SCHEDULE 2

COMPENSATION

Bankers Life Insurance Company of New York shall pay IL Securities, Inc. a
concession on all contracts sold by it or by Selling Broker-Dealers to whom
it has authorized to participate in the sale of the contracts.

Bankers Life Insurance Company of New York shall, on behalf of IL Securities,
Inc., pay to Broker-Dealer and concession on each Contract for which the
Broker-Dealer is the Broker-of-Record. The concession shall be determined in
accordance with the Compensation Schedule attached to and made a part of the
Selling Broker's Selling Agreement.

Concessions payable to IL Securities shall be determined in accordance with this
Schedule.

1. Sales by IL Securities:

a. Concession Schedule for the Visionary. IL Securities may select one of
the following Options for each Agent. Once an Option is selected for an
Agent it may not be changed and the Option is applicable for each and
every contract on which that Agent is the writing Agent.

<TABLE>
<CAPTION>
NEW PREMIUM ASSET TRAIL
<S> <C> <C> <C>
- -------------------------------------------------------------------------------
YEARS 1-9 YEARS 10+ ALL YEARS
- -------------------------------------------------------------------------------

Option A 6.00% 1.00% -0-
- -------------------------------------------------------------------------------

Option B 4.75% 1.00% 0.25%
- -------------------------------------------------------------------------------

Option C 3.50% 1.00% 0.50%
- -------------------------------------------------------------------------------

Option D 1.00% 1.00% 1.00%
- -------------------------------------------------------------------------------
</TABLE>

Asset trails concessions are paid on the value of a Contract as of its
contract anniversary day.

b. Concessions on Withdrawn Premium. IL Securities will repay all
concession paid on premiums which were withdrawn or removed from a
Contract within 12 months of the date of the premium payment.

c. Concessions on Replacements. Concession on a Contract which replaces an
existing contract issued by Bankers Life Insurance Company of New York (or
any of its affiliated companies) shall be paid as follows:

-1-
<PAGE> 15

1. The concession on premium paid in excess of the cash surrender
value of the existing contract will be payable at the first year
rate.
2. The concession on premiums equal to the excess of the cash
surrender value of the existing contract will be payable at the rate
for year 10.

Replacement is defined as the issue of a new contract where an existing
contract(s) is (are) surrendered within one year of the issue of the new
contract.

2. Sales by Selling Broker-Dealers.

<TABLE>
<CAPTION>
NEW PREMIUM
<S> <C>
- -------------------------------------------------------------------------------
Years 1-10 Years 10+
- -------------------------------------------------------------------------------
1.00% .15%
- -------------------------------------------------------------------------------
</TABLE>

-2-

<PAGE> 1
EXHIBIT (3)(b)

SALES AGREEMENT

Agreement dated as of __________, 1998, by and among BANKERS LIFE
INSURANCE COMPANY OF NEW YORK ("Insurer"), a New York insurance company, IL
SECURITIES, INC. ("Distributor"), an Indiana corporation; and, _________________
("Broker-Dealer"), a ___________________ corporation.

RECITALS:

A. Pursuant to an agreement with Distributor (the "Distribution
Agreement"), the Insurer has appointed Distributor as the principal underwriter
of the class or classes of variable insurance contracts identified in Schedule 1
to this Agreement at the time that this Agreement is executed, and such other
class or classes of variable insurance products that may be added to Schedule 1
from time to time in accordance with Section 11 of this Agreement (each, a
"class of Contracts"; all such classes, the "Contracts"). Each class of
Contracts will be issued by Insurer through one or more separate accounts of
Insurer ("Separate Accounts"). Pursuant to the Distribution Agreement, Insurer
has authorized Distributor to enter into separate written agreements with
broker-dealers pursuant to which such broker-dealers would be authorized to
participate in the sale of the Contracts and would agree to use their best
efforts to solicit applications for the Contracts.

B. Broker-Dealer is engaged in the business of selling various investment
products, including variable insurance products.

C. The parties to this Agreement desire that Broker-Dealer be authorized
to solicit applications for the sale of the Contracts, subject to the terms and
conditions set forth herein.

NOW, THEREFORE, in consideration of the premises and of the mutual
promises and covenants hereinafter set forth, the parties agree as follows:

1. DEFINITIONS

(a) Registration Statement - With respect to each class of Contracts,
the most recent effective registration statement(s) filed with the
SEC or the most recent effective post-effective amendment(s)
thereto, including financial statements included therein and all
exhibits thereto.

(b) Prospectus - With respect to each class of Contracts, the
prospectus for such class of Contracts included within the
Registration Statement for such class of Contracts; provided,
however, that, if the most recently filed prospectus filed
pursuant to Rule 497 under the 1933 Act subsequent to the date on
which the Registration Statement became effective differs
<PAGE> 2

from the prospectus on file at the time the Registration Statement
became effective, the term "Prospectus" shall refer to the most
recently filed prospectus filed under Rule 497 from and after the
date on which it shall have been filed.

(d) 1934 Act - The Securities Exchange Act of 1934, as amended.

(e) 1940 Act - The Investment Company Act of 1940, as amended.

(f) Agent - An individual associated with Broker-Dealer who is appointed
by Insurer as an agent for the purpose of soliciting applications.

(g) Premium - a payment made under a Contract to purchase benefits under
such Contract.

(h) Annuity Service Office - The service office identified in the
Agent's Manual.

(i) Agents Manual - The manual and other written rules, regulations and
procedures provided by Insurer to insurance agents appointed to sell
the Contracts, as revised from time to time.

(j) SEC - The Securities and Exchange Commission.

(k) NASD - The National Association of Securities Dealers, Inc.

2. AUTHORIZATION OF BROKER-DEALER

(a) Pursuant to the authority granted to it in the Distribution
Agreement, Distributor hereby authorizes Broker-Dealer under the
securities laws, and Insurer hereby authorizes Broker-Dealer
under the insurance laws, in a non-exclusive capacity, to sell
the Contracts. Broker-Dealer accepts such authorization and
shall use its best efforts to find purchasers for the Contracts
acceptable to Insurer. Distributor and Insurer acknowledge that
Broker-Dealer is an independent contractor in the performance of
its respective duties and obligations under this Agreement.
Accordingly, Broker-Dealer is not obliged or expected to give
full time and energies to the performance of its obligations
hereunder, nor is Broker-Dealer obliged or expected to represent
Distributor or Insurer exclusively. Nothing herein contained
shall constitute Broker-Dealer, the Agents or any agents or
representatives of Broker-Dealer as employees of Distributor or
Insurer in connection with the solicitation of applications and
premiums for the Contracts.

2
<PAGE> 3

(b) Broker-Dealer acknowledges that no territory is exclusively assigned
hereunder, and that Insurer and Distributor may in their sole
discretion establish or appoint one or more broker-dealers or
insurance agencies in any jurisdiction in which Broker-Dealer
transacts business.

(c) Broker-Dealer is vested under this Agreement with power and
authority to select and recommend individuals associated with it
for appointment as Agents of the Insurer, and only individuals so
recommended by Broker-Dealer shall become Agents, provided that
the conditions of Section 3 are satisfied, and provided further
that Insurer reserves the right to refuse to appoint any proposed
agent or, once appointed, to terminate the same at any time with
or without cause. Initial and renewal state appointment fees for
Broker-Dealer as an insurance agency and appointees of
Broker-Dealer as Agents of Insurer will be paid by Insurer in
accordance with its then-applicable requirements.

(d) Broker-Dealer shall not expend or contract for the expenditure of
the funds of Distributor or Insurer, except as they may otherwise
agree. Broker-Dealer shall pay all expenses incurred by each of
it in the performance of this Agreement, unless otherwise
specifically provided for in this Agreement or unless Distributor
and Insurer shall have agreed in advance in writing to share the
cost of any such expenses. Broker-Dealer shall not possess or
exercise any authority on behalf of Insurer or Distributor other
than that expressly conferred on Broker-Dealer by this
Agreement. In particular, and without limiting the foregoing,
Broker-Dealer shall not have any authority, nor shall either
grant such authority to any Agent, on behalf of Insurer: to
make, alter or discharge any Contract or other insurance policy
or annuity entered into pursuant to a Contract; to waive any
Contract forfeiture provision; to extend the time of paying any
Premiums; or to receive any monies or Premiums from applicants
for or purchasers of the Contracts (except for the sole purpose
of forwarding monies or Premiums to Insurer).

(e) Broker-Dealer acknowledges that Insurer has the right in its sole
discretion to reject any application or Premiums received by it and
to return or refund to an applicant such applicant's Premium.

3
<PAGE> 4

3. LICENSING AND REGISTRATION OF BROKER-DEALER AND AGENTS

(a) Broker-Dealer represents and warrants that it is a broker-dealer
registered with the SEC under the 1934 Act, and is a member of
the NASD. Broker-Dealer must, at all times when performing its
functions and fulfilling its obligations under this Agreement, be
duly registered as a broker-dealer under the 1934 Act and in each
state or other jurisdiction in which Broker-Dealer intends to
perform its functions and fulfill its obligations hereunder, and
be a member in good standing of the NASD.

(b) Broker-Dealer represents and warrants that it is a licensed life
insurance agent where required to solicit applications.
Broker-Dealer must, at all times when performing its functions and
fulfilling its obligations under this Agreement, be duly licensed to
sell the Contracts in each state or other jurisdiction in which
Broker-Dealer intends to perform its functions and fulfill its
obligations hereunder.

(c) Broker-Dealer shall ensure that no individual shall offer or sell
the Contracts on its behalf in any state or other jurisdiction in
which the Contracts may lawfully be sold unless (i) such
individual is an associate person of Broker-Dealer (as that term
is defined in Section 3(a)(18) of the 1934 Act) and duly
registered with the NASD and any applicable state securities
regulatory authority as a registered person of Broker-Dealer
qualified to sell the Contracts in such state or jurisdiction,
(ii) duly licensed, registered or otherwise qualified to offer
and sell the Contracts to be offered and sold by such individual
under the insurance laws of such state or jurisdiction, and (iii)
duly appointed by Insurer with respect to such Contracts and such
state or jurisdiction. Broker-Dealer shall be solely responsible
for background investigations of the Agents to determine their
qualifications, good character, and moral fitness to sell the
Contracts. All matters concerning the licensing of any
individuals recommended for appointment by Broker-Dealer under
any applicable state insurance law shall be a matter directly
between Broker-Dealer and such individual, and Broker-Dealer
shall furnish Insurer with proof of proper licensing of such
individual or other proof, reasonably acceptable to Insurer, of
satisfaction by such individual of licensing requirements prior
to Insurer appointing any such individual as an Agent of
Insurer. Insurer and Broker-Dealer shall notify Insurer and
Distributor immediately upon termination (for whatever reason) of
an Agent's association with Broker-Dealer.

(d) Broker-Dealer shall notify Insurer immediately in writing if
Broker-Dealer fails to comply with any such terms and conditions.

4. BROKER-DEALER AND AGENT COMPLIANCE

4
<PAGE> 5

(a) Broker-Dealer shall be responsible for securities training,
supervision and control of the Agents in connection with their
solicitation activities with respect to the Contracts and shall
supervise Agents' compliance with applicable federal and state
securities law and NASD requirements in connection with such
solicitation activities.

(b) Broker-Dealer hereby represents and warrants that it is duly in
compliance with all applicable federal and state securities laws
and regulation, and all applicable insurance laws and
regulations. Broker-Dealer shall carry out its obligations under
this Agreement in continued compliance with such laws and
regulations. Further, Broker-Dealer shall comply, and shall
ensure that Agents comply, with the rules and procedures set
forth in the Agent's Manual, and the rules set forth below, and
Broker-Dealer shall be solely responsible for such compliance.

(i) Broker-Dealer and Agents shall not offer or attempt to
offer the Contracts, nor solicit applications for the
Contracts, nor deliver Contracts, in any state or
jurisdiction in which the Contracts have not been approved
for sale. For purposes of determining where the Contracts
may be offered and applications solicited, Broker-Dealer
may rely on written notification, as revised from time to
time, that it receives from Insurer pursuant to this
Agreement.

(ii) Broker-Dealer and Agents shall not solicit applications for
the Contracts without delivering the Prospectus for the
Contracts, and, where required by state insurance law, the
then-currently effective statement of additional information
for the Contracts, and the then-currently effective
prospectus(es) for the Fund(s).

(iii) Broker-Dealer and Agents shall not recommend the purchase of a
Contract to an applicant unless each has reasonable grounds to
believe that such purchase is suitable for the applicant in
accordance with, among other things, applicable regulations of
any state insurance regulatory authority, the SEC and the
NASD. While not limited to the following, a determination of
suitability shall be based on information supplied by the
applicant after a reasonable inquiry concerning the
applicant's insurance and investment objectives and financial
situation and needs and shall entail a review by Broker-Dealer
of all applications for suitability and completeness and
correctness as to form as well as review and endorsement on an
internal record of Broker-Dealer.

(iv) Broker-Dealer and Agents shall not encourage a prospective
purchaser to surrender or exchange an insurance policy or
contract in order to purchase a Contract or, conversely, to
surrender or

5
<PAGE> 6

exchange a Contract in order to purchase another insurance
policy or contract subject to applicable NASD Rules of Fair
Practice and any other applicable laws, regulations and
regulatory guidelines.

(v) Broker-Dealer and all Agents shall accept initial premiums in
the form of a check or money order only if made payable to
"Bankers Life Insurance Company of New York" and signed by the
applicant for the Contract. Broker-Dealer and Agent shall not
accept third-party checks or cash for Premiums.

(vi) Broker-Dealer shall ensure that all checks and money orders
and applications for the Contracts received by either it or
an Agent shall be remitted promptly, and in any event not
later than 2 business days after receipt, to the Insurer.
In the event that any other Premiums are sent to an Agent
or Broker-Dealer, rather than to the Service Office,
Broker-Dealer shall promptly (and in any event, not later
than 2 business days) remit such Premiums to the Insurer as
set forth in the Agent's Manual. Broker-Dealer acknowledges
that if any Premium is held at any time, such Premium shall
be held on behalf of Insurer, and Broker-Dealer shall
segregate such Premium from its own funds and promptly (and
in any event, within 2 business days) remit such Premium to
the Insurer. All such Premiums, whether by check, money
order or wire, shall at all times be the property of
Insurer.

(vii) Upon issuance of a Contract by Insurer and delivery of such
Contract to Broker-Dealer, Broker-Dealer shall promptly
deliver such Contract to its purchaser. For purposes of this
provision, "promptly" shall be deemed to mean not later than
five calendar days. Broker-Dealer shall return promptly to
Insurer all receipts for delivered Contracts, all undelivered
Contracts and all receipts for cancellation, in accordance
with the instructions set forth in the Agent's Manual. Insurer
will assume that a Contract will be delivered by Broker-Dealer
to the purchaser of such Contract within five calendar days
for purposes of determining when to transfer Premiums
initially allocated to the Money Market Account available
under such Contract to the particular investment options
specified by such purchaser. As a result, if a purchaser
exercises the free look provisions under a Contract,
Broker-Dealer shall indemnify Insurer for any loss incurred by
Insurer that results from Broker-Dealer's failure to deliver
such Contract to its purchaser within the contemplated five
calendar day period.

(viii)Broker-Dealer and the Agents in connection with the offer or
sale of the Contracts, shall not give any information or make
any representations or statements, written or oral, concerning
the

6
<PAGE> 7

Contracts, a Fund or Fund Shares, other than or inconsistent
with information or representations contained in the
Prospectuses, statements of additional information and
Registration Statements for the Contracts, or a Fund, or in
reports or proxy statements therefor, or in promotional, sales
or advertising material or other information supplied and
approved in writing by Distributor and Insurer.

(c) Broker-Dealer understands, acknowledges, and represents that
Contracts and Premiums thereunder shall not be solicited,
offered, or sold in connection with any so-called "market timing"
program, plan, arrangement or service without prior written
notice to and the consent of Distributor and Insurer. Should
Distributor or Insurer determine at its sole discretion that
Broker-Dealer is soliciting, offering, or selling, or has
solicited, offered, or sold, Contracts or Premiums subject to any
so-called "market timing" program, plan, arrangement or service
without providing such prior written notice or receiving the
consent of Distributor or Insurer, Distributor or Insurer may
take such action which is necessary, at its sole discretion, to
halt such solicitations, offers or sales. Furthermore, in
addition to any indemnification provided in Section 11 of this
Agreement and any other liability that Broker-Dealer might have,
Broker-Dealer shall be liable to Distributor and Insurer and each
Fund affected by any so-called "market timing" program, plan,
arrangement or service, for any damages or losses, actual or
consequential, sustained by Distributor or Insurer or any Fund,
as a result of any so-called "market timing" program, plan
arrangement or service which causes such losses or damages
following solicitation, offer, or sale of a Contract or Premium
subject to "market timing" or similar service by Broker-Dealer.

(d) Broker-Dealer shall promptly furnish to Insurer or its authorized
agent any reports and information that Insurer may reasonably
request for the purpose of meeting Insurer's reporting and
recordkeeping requirements under the insurance laws of any state,
under any applicable federal and state securities laws, rules and
regulations.

(e) Broker-Dealer shall secure and maintain a fidelity bond
(including coverage for larceny and embezzlement), issued by a
reputable bonding company, covering all of its directors,
offices, agents and employees who have access to funds of Insurer
or Distributor. This bond shall be maintained at Broker-Dealer's
expense in at least the amount prescribed under Article III,
Section 32 of the NASD Rules of Fair Practice. Broker-Dealer
shall provide Distributor with a copy of said bond before
executing this Agreement. Broker-Dealer shall also secure and
maintain errors and omissions insurance acceptable to Insurer and
covering Broker-Dealer and Representatives. Broker-Dealer hereby
assigns any proceeds

7
<PAGE> 8

received from a fidelity bonding company, errors and omissions or
other liability coverage, to Insurer or Distributor as their
interest may appear, to the extent of their loss due to activities
covered by the bond, policy or other liability coverage. If there
is any deficiency amount, whether due to a deductible or otherwise,
Broker-Dealer shall promptly pay such amounts on demand. Broker-
Dealer hereby indemnifies and holds harmless Insurer and Distributor
from any such deficiency and from the cost of collection thereof,
including reasonable attorneys' fees.

5. SALES MATERIALS

(a) During the term of this Agreement, Distributor and Insurer will
provide Broker-Dealer, without charge, with as many copies of
Prospectuses (and any supplements thereto), current Fund
prospectus(es) (and any supplements thereto), and applications
for the Contracts, as Broker-Dealer may reasonably request. Upon
termination of this Agreement, Broker-Dealer will promptly return
to Distributor any Prospectuses, applications, Fund prospectuses,
and other materials and supplies furnished by Distributor or
Insurer to Broker-Dealer or to the Agents.

(b) During the term of this Agreement, Distributor and Insurer will
be responsible for providing and approving all promotional, sales
and advertising material to be used by Broker-Dealer in the
course of its solicitation activities hereunder. Distributor
will file such materials or will cause such materials to be filed
with the SEC, the NASD and/or with any state securities
regulatory authorities, as appropriate. Broker-Dealer shall not
use or implement, nor shall they allow any Agent to use or
implement, any promotional, sales or advertising material
relating to the Contracts or otherwise advertise the Contracts
without the prior written approval of Distributor and Insurer.

6. CONCESSIONS AND EXPENSES

(a) During the term of this Agreement, Insurer shall pay to
Broker-Dealer, as compensation for Contracts for which it is the
Broker-of-Record, the concessions and fees set forth in Schedule
2 to this Agreement, as such Schedule 2 may be amended or
modified upon 30 days prior notice. Any amendment to Schedule 2
will be applicable to any Contract for which an application or
premium is received by the Service Office on or after the
effective date of such amendment or which is in effect after the
effective date of such amendment. Compensation with respect to
any Contract shall be paid to Broker-Dealer only for so long as
Broker-Dealer is the Broker-of-Record for such Contract.

8
<PAGE> 9

(b) Broker-Dealer recognizes that all compensation payable to
Broker-Dealer hereunder will be disbursed by or on behalf of Insurer
after Premiums are received and accepted by Insurer and that no
compensation of any kind other than that described in this Agreement
is payable to Broker-Dealer for the performance of its obligations
hereunder.

(c) Refund of Compensation. No compensation shall be payable, and
Broker-Dealer agrees to reimburse Distributor for any
compensation paid to Broker-Dealer or its Representatives under
each of the following conditions: (i) if Insurer, in its sole
discretion, determines not to issue the Contract applied for;
(ii) if Insurer refunds the Premiums upon the applicant's
surrender or withdrawal pursuant to any "free-look" privilege;
(iii) if Insurer refunds the Premiums paid by applicant as a
result of a complaint by applicant, recognizing that Insurer has
sole discretion to refund Premiums; and (iv) if Insurer
determines that any person signing an application who is required
to be licensed or any other person or entity receiving
compensation for soliciting purchase of the Contracts is not duly
license to sell the Contracts in the jurisdiction of such sale or
attempted sale.

(d) If a former Agent becomes registered and licensed with another
selling broker-dealer and is appointed by Insurer for the sale of
Contracts, and a Contract owner files a written request (change
of dealer authorization) with Insurer that such owner's Contracts
be serviced through the Agent's current selling broker-dealer and
the former Broker-Dealer shall not be entitled to any
compensation based on such Contracts after the date of such
transfer. Broker-Dealer agrees that no compensation of any kind
other than described in this Section 6 of this Agreement is
payable by Insurer or Distributor to Broker-Dealer.

(e) Indebtedness and Right of Setoff. Nothing contained herein shall be
construed as giving Broker-Dealer or Agent the right to incur any
indebtedness on behalf of Insurer or Distributor. Broker-Dealer
hereby authorized Insurer and Distributor to set off liabilities of
Broker-Dealer to Insurer and Distributor against any and all amounts
otherwise payable to Broker Dealer.

(f) Broker-Dealer represent that no concessions or other compensation
will be paid for services rendered in soliciting the purchase of
the contracts by any person or entity not duly registered or
licensed by the required authorities and appointed by Insurer to
sell the Contract in the state in which such solicitation
occurred; provided however, that this provision shall not
prohibit the payment of compensation of the surviving spouse or
other beneficiary of a person entitled to receive such
compensation pursuant to a bona fide contract calling for such
payment.

9
<PAGE> 10

7. INTERESTS IN AGREEMENT.

Agents shall have no interest in this Agreement or right to any
concessions to be paid to Broker Dealer hereunder. Broker-Dealer shall be
solely responsible for the payment of any commission, concession or
consideration of any kind to Agents. Broker-Dealer shall be solely
responsible under applicable tax laws for the reporting of compensation
paid to Agents. Broker-Dealer shall have no right to withhold or deduct
any concession from any Premiums in respect of the Contracts which it may
collect. Broker-Dealer shall have no interest in any compensation paid by
Insurer to Distributor, now or hereafter, in connection with the sale of
any Contracts hereunder.

8. TERM AND EXCLUSIVITY OF AGREEMENT.

This Agreement may not be assigned except by written mutual consent and
shall continue for an indefinite term, subject to the termination by any
party by ten-days' advance written notice to the other parties, except
that in the event Distributor or Broker-Dealer ceases to be a registered
broker-dealer or a member of the NASD, this Agreement shall immediately
terminate. Upon its termination, all authorizations, rights and
obligations shall cease, except the agreements in Sections 11 and the
payment of any accrued but unpaid compensation to Broker-Dealer.

9. COMPLAINTS AND INVESTIGATIONS

(a) Distributor, Insurer and Broker-Dealer each shall cooperate fully
in any securities or insurance regulatory investigation or
proceeding or judicial proceeding arising in connection with the
Contracts marketed under this Agreement. Broker-Dealer will be
notified promptly of any customer complaint or notice of any
regulatory investigation or proceeding or judicial proceeding
received by Distributor or Insurer with respect to Broker-Dealer
or any Agent; and Broker-Dealer will promptly notify Distributor
and the Insurer of any written customer complaint or notice of
any regulatory investigation or proceeding or judicial proceeding
received by Broker-Dealer with respect to it or any Agent in
connection with this Agreement or any Contract.

(b) In the case of a customer complaint, Distributor, Insurer and
Broker-Dealer will cooperate in investigating such complaint and any
response by Broker-Dealer to such complaint will be sent to
Distributor for approval not less than five business days prior to
its being sent to the customer or regulatory authority, except that
if a more prompt response is required, the proposed response shall
be communicated by telephone or facsimile.

10
<PAGE> 11

10. MODIFICATION OF AGREEMENT.

This Agreement supersedes all prior agreements, either oral or written,
between the parties relating to the Contracts and, except for any
amendment of Schedule 1 pursuant to the terms of Section 2 hereof or
Schedule 2 pursuant to the terms of Section 6 hereof, may not be modified
in any way unless by written agreement signed by all of the parties.

11. INDEMNIFICATION.

(a) Broker-Dealer shall indemnify and hold harmless Distributor and
Insurer and each person who controls or is associated with
Distributor or Insurer within the meaning of such terms under the
federal securities laws, and any officer, director, employee or
agent of the foregoing, against any and all losses, claims,
damages or liabilities, joint or several (including any
investigative, legal and other expenses reasonably incurred in
connection with, and any amounts paid in settlement of, any
action, suit or proceeding or any claim asserted), to which they
or any of them may become subject under any statute or
regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities arise out of or are based on:

(i) violation(s) by Broker-Dealer or an Agent of federal or state
securities law or regulation(s), insurance law or
regulation(s), or any rule or requirement of the NASD;

(ii) any unauthorized use of promotional, sales or advertising
material, any oral or written misrepresentations, or any
unlawful sales practices concerning the Contracts, by
Broker-Dealer or an Agent;

(iii) claims by the Agents or other agents or representatives of
Broker-Dealer for concessions or other compensation or
remuneration of any type;

(iv) any failure on the part of Broker-Dealer or an Agent to submit
Premiums or applications to Insurer, or to submit the correct
amount of a Premium, on a timely basis and in accordance with
this Agreement and the Agent's Manual, subject to applicable
law;

(v) any failure on the part of Broker-Dealer or an Agent to
deliver Contracts to purchasers thereof on a timely basis and
in accordance with the Agent's Manual; or

(vi) a breach by Broker-Dealer of any provision of this Agreement.

11
<PAGE> 12

This indemnification will be in addition to any liability which
Broker-Dealer may otherwise have.

(b) Distributor and Insurer, jointly and severally, shall indemnify
and hold harmless Broker-Dealer and each person who controls or
is associated with Broker-Dealer within the meaning of such terms
under the federal securities laws, and any officer, director,
employee or agent of the foregoing, against any and all losses,
claims, damages or liabilities, joint or several (including any
investigative, legal and other expenses reasonably incurred in
connection with, and any amounts paid in settlement of, any
action, suit or proceeding or any claim asserted), to which they
or any of them may become subject under any statute or
regulation, NASD rule or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities arise out
of or are based upon any breach by Distributor or Insurer of any
provision of this Agreement. This indemnification will be in
addition to any liability which Distributor and Insurer, jointly
and severally, may otherwise have.

(c) Promptly after receipt by a party entitled to indemnification
("indemnified person") under this Section 11 of notice of the
commencement of any action as to which a claim will be made
against any person obligated to provide indemnification under
this Section 11 ("indemnifying party"), such indemnified person
shall notify the indemnifying party in writing of the
commencement thereof as soon as practicable thereafter, but
failure to so notify the indemnifying party shall not relieve the
indemnifying party from any liability which it may have to the
indemnified person otherwise than on account of this Section 11.
The indemnifying party will be entitled to participate in the
defense of the indemnified person but such participation will not
relieve such indemnifying party of the obligation to reimburse
the indemnified person for reasonable legal and other expenses
incurred by such indemnified person in defending himself or
itself.

The indemnification provisions contained in this Section 11 shall
remain operative in full force and effect, regardless of any
termination of this Agreement. A successor by law of Distributor or
Insurer, as the case may be, shall be entitled to the benefits of
the indemnification provisions contained in this Section 11. After
receipt by a party entitled to indemnification ("indemnified party")
under this Section 11 of notice of the commencement of any action,
if a claim in respect thereof is to be made against any person
obligated to provide indemnification under this Section 11
("indemnifying party"), such indemnified party will notify the
indemnifying party in writing of the commencement thereof as soon as
practicable thereafter, provided that the omission so to notify the
indemnifying party will not relieve it from any liability under this
Section 11, except to the extent that the omission results in a
failure of actual notice to

12
<PAGE> 13

the indemnifying party and such indemnifying party is damaged solely
as a result of the failure to give such notice. The indemnifying
party, upon the request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying
party may designate in such proceeding. In any such proceeding, any
indemnified party shall have the right to retain its own counsel,
but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying
party and the indemnified party and representation of both parties
by the same counsel would be inappropriate due to actual or
potential differing interests between them. The indemnifying party
shall not be liable for any settlement of any proceeding effected
without its written consent, but if such proceeding is settled with
such consent or if final judgment is entered in such proceeding for
the plaintiff, the indemnifying party shall indemnify the
indemnified party from and against any loss or liability by reason
of such settlement or judgement.

12. RIGHTS, REMEDIES, AND OBLIGATIONS ARE CUMULATIVE.

The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled to
under state and federal laws. Failure of a party to insist upon strict
compliance with any of the conditions of this Agreement shall not be
construed as a waiver of any of the conditions, but the same shall remain
in full force and effect. No waiver of any of the provisions of this
Agreement shall be deemed, or shall constitute, a waiver of any other
provisions, whether or not similar, nor shall any waiver constitute a
continuing waiver.

13. NOTICES.

All notices hereunder are to be made in writing and shall be given:

If to Insurer, to: Stephen Shorrock
Bankers Life Insurance Company of
New York
65 Froehlich Farm Boulevard
Woodbury, NY 11797

if to Distributor, to: Gregory J. Carney
IL Securities, Inc.
2960 N. Meridian Street

13
<PAGE> 14

Indianapolis, IN 46208

if to Broker-Dealer, to

or such other address as such party may hereafter specify in writing. Each
such notice to a party shall be either hand delivered or transmitted by
registered or certified United States mail with return receipt requested,
or by overnight mail by a nationally recognized courier, and shall be
effective upon delivery.

14. INTERPRETATION, JURISDICTION, ETC.

This Agreement constitutes the whole agreement between the parties hereto
with respect to the subject matter hereof, and supersedes all prior oral
or written understandings, agreements or negotiations between the parties
with respect to the subject matter hereof. No prior writing by or between
the parties hereto with respect to the subject matter hereof shall be used
by a party in connection with the interpretation of any provision of this
Agreement. This Agreement shall be construed and its provisions
interpreted under and in accordance with the internal laws of the state of
Indiana without giving effect to principles of conflict of laws.

15. ARBITRATION.

Any controversy or claim arising out of or relating to this Agreement, or
the breach hereof, shall be settled by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association, and
judgment upon the award rendered by the arbitrator(s) may be entered in
any court having jurisdiction thereof.

16. HEADINGS.

The headings in this Agreement are included for convenience of reference
only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.

17. COUNTERPARTS.

This Agreement may be executed in two or more counterparts, each of which
taken together shall constitute one and same instrument.

14
<PAGE> 15

18. SEVERABILITY.

This is a severable Agreement. In the event that any provision of this
Agreement would require a party to take action prohibited by applicable
federal or state law or prohibit a party from taking action required by
applicable federal or state law, then it is the intention of the parties
hereto that such provisions shall be enforced to the extent permitted
under the law, and, in any even, that all other provisions of this
Agreement shall remain valid and duly enforceable as if the provision at
issue had never been a part hereof.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.

BANKERS LIFE INSURANCE COMPANY OF
NEW YORK

By:
-------------------------------

Name:
-----------------------------

Title:
----------------------------

IL SECURITIES, INC.

By:
-------------------------------

Name:
-----------------------------

Title:
----------------------------

[Broker-Dealer]

By:
-------------------------------

Name:
-----------------------------

Title:
----------------------------

15
<PAGE> 16

SCHEDULE 1

CONTRACTS SUBJECT TO THIS AGREEMENT

The Visionary Choice (flexible premium variable annuity, Form VCA-97 BL)

Effective July 1, 1998

<PAGE> 17

SCHEDULE 2

COMPENSATION

Bankers Life Insurance Company of New York shall, on behalf of IL Securities,
Inc., pay to Broker-Dealer a concession on each Contract for which the
Broker-Dealer is the Broker-of-Record.

Concessions shall be payable weekly to the Broker-Dealer. The Broker-Dealer is
responsible for compensating its Agents.

Broker-Dealer may select one of the following Options for each Agent. Once an
Option is selected for an Agent it may not be changed and the Option is
applicable for each and every contract on which that Agent is the writing Agent.

Asset trails concessions are paid on the value of a Contract as of its contract
anniversary day.

1. Concession Schedule for the Visionary Choice (7 YEAR SURRENDER CHARGE)

NEW PREMIUM ASSET TRAIL
- ---------------------------------------------------------------------
<S> <C> <C>
Option A 6.00% -0-
- ---------------------------------------------------------------------

Option B 5.00% 0.25%
- ---------------------------------------------------------------------

Option C 4.00% 0.50%
- ---------------------------------------------------------------------

Option D 3.00% 0.75%
- ---------------------------------------------------------------------

Option E 2.00% 1.00%
- ---------------------------------------------------------------------
</TABLE>

2. Concessions on Withdrawn Premium

The Broker-Dealer will repay concession paid on premiums which are
withdrawn or removed from a Contract as lump-sum surrenders or withdrawals
within 12 months of the date of the premium payment.

3. Concessions on Replacements

Concession on a Contract which replaces an existing contract issued by IL
Annuity and Insurance Company (or any of its affiliated companies) shall
be paid as follows:

1. The concession on premium paid in excess of the cash surrender
value of the existing contract will be payable at the first year
rate.

2. The concession on premiums equal to the excess of the cash
surrender value of the existing contract will be payable at the
rate for year 10.

Replacement is defined as the issue of a new contract where an existing
contract(s) is (are) surrendered within one year of the issue of the new
contract.

4. Bonus Program.
<PAGE> 18

Broker-Dealer shall be paid a bonus of 1.0% for new business submitted
(including 1035 exchanges, transfers and rollovers) from September 1,
1997, through December 31, 1997 on each Contract for which Broker-Dealer
is the Broker-of-Record. To be eligible for the bonus, the application
must be received in the Annuity Service Office during the period specified
above. The bonus shall be payable regardless of the Option selected for
the writing Agent.

<PAGE> 1
EXHIBIT 4(a)

BANKERS LIFE INSURANCE COMPANY OF NEW YORK
65 Froehlich Farm Boulevard - Woodbury, New York 11797

THE VISIONARY CHOICE VARIABLE ANNUITY
READ YOUR CONTRACT CAREFULLY

RIGHT TO EXAMINE YOUR CONTRACT. You may cancel and return this Contract to Us
for any reason within 10 days after You receive it. You may return the
Contract by mailing it to Us at the address of the Service Center shown on page
3. Your Written Request for cancellation must accompany the Contract. If the
Contract and the Written Request for cancellation are properly addressed to the
Service Center with postage prepaid and if they are postmarked within the
10-day free look period, We will refund to You an amount equal to the sum of:
(i) the difference between the Premium Payments paid and the amounts allocated
to the Variable Accounts and the Fixed Account under the Contract; and (ii) the
Contract Value as of the date the Contract and the Written Request for
cancellation are properly mailed and postmarked. The Contract Owner bears the
investment risk for Premium Payments allocated to the Variable Account from the
beginning of the Free-Look Period until the date the Contract Owner properly
mails the Contract and Written Request for cancellation to Us.

THIS CONTRACT provides You with an annual Free Withdrawal Amount, in any
Contract Year after the first, in an amount equal to 10% of Contract Value as
of the beginning of the Contract Year. The Contract allows You to choose one of
two Withdrawal Charge options at the time You complete Your application. ONCE
YOU CHOOSE YOUR OPTION, YOU MAY NOT CHANGE IT.

THIS CONTRACT is a legal contract between the Owner and the Bankers Life
Insurance Company of New York. WE AGREE to provide the benefits and rights set
out on this page and the pages that follow which are part of the Contract.
They are provided as consideration for the application and the payment of
premium for the Contract. THIS CONTRACT, the attached application, and any
amendments, riders or endorsements make up the entire contract. The Contract
does not take effect until We have received the initial Premium Payment.

ACCOUNT VALUES AND ANNUITY PAYMENTS TO YOU, WHEN BASED ON INVESTMENT RESULTS OF
THE SEPARATE ACCOUNT, ARE VARIABLE AND MAY INCREASE OR DECREASE IN DOLLAR
AMOUNT. In order to avoid a decrease in variable annuity payments, the separate
account must achieve an annualized investment return (after deduction of
mortality and expense risk charges and administrative charge) at least equal to
the assumed interest rate. The annualized investment return must be 4.4%, 5.4%
or 6.4%, depending on whether an Assumed Interest Rate of 3.0%, 4.0% or 5.0% is
chosen.

The value of Your account will be decreased by certain charges and deductions.
These charges and deductions include a quarterly contract fee, an
administrative expense charge, and a mortality and expense risk charge. The
charges and deductions which may affect the value of Your account are listed in
section 2.

Signed for Us on the Date of Issue at the Home Office of the Company at 65
Froehlich Farm Boulevard, Woodbury, New York 11797.

/s/ Lisa Foxworthy-Parker /s/ Stephen J. Shorrock
-------------------------- ------------------------
Secretary President

FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY CONTRACT
NON-PARTICIPATING
FLEXIBLE PREMIUM
INCOME PAYABLE AT MATURITY
DEATH BENEFIT PAYABLE IN THE EVENT OF THE ANNUITANT'S DEATH PRIOR TO MATURITY

VCA-97 BL
<PAGE> 2
SECTION 1 - GUIDE TO CONTRACT PROVISIONS

<TABLE>
<CAPTION>
SECTION PAGE
<S> <C>
1 GUIDE TO CONTRACT PROVISIONS
2 CONTRACT SPECIFICATIONS
3 DEFINITIONS
4 PREMIUM PAYMENTS
5 CONTRACT VALUE
6 SEPARATE ACCOUNT PROVISIONS
7 WITHDRAWAL PROVISIONS
8 OWNERSHIP PROVISIONS
9 DEATH BENEFITS PROVISIONS
10 PAYOUT PLAN PROVISIONS
11 GENERAL PROVISIONS
12 TABLES
</TABLE>

The Application and Any Additional Forms Will Follow Section 12

- 2 -
<PAGE> 3
SECTION 2 - SPECIFICATIONS

CONTRACT NUMBER [VA00001] [William P. Ryker] ANNUITANT

DATE OF ISSUE [May 31, 1997] [June 1, 2020] COMMENCEMENT DATE

AGE AT ISSUE [40]

<TABLE>
<S> <C>
INITIAL PREMIUM
PAYMENT: [$10,000]
PREMIUM PAYMENTS MAY BE CONTINUED TO THE
ANNUITY START DATE

CONTRACT FEE $7.50 PER CONTRACT QUARTER

MORTALITY AND 1.25% PER ANNUM OF THE AVERAGE DAILY VARIABLE ACCOUNT VALUE
EXPENSE RISK CHARGE

ADMINISTRATIVE .15% PER ANNUM OF THE AVERAGE DAILY VARIABLE
CHARGE ACCOUNT VALUE

VARIABLE ACCOUNT FIRST 12 REQUESTS PER CONTRACT YEAR - $0
TRANSFER FEE 13 OR MORE PER CONTRACT YEAR - $25.00 EACH TRANSFER

FIXED ACCOUNT MINIMUM INTEREST RATE 3.0%

WITHDRAWAL CHARGE [LIST OPTION]
IF YOU WITHDRAW ALL OR PART OF THE CONTRACT VALUE,
WITHDRAWAL CHARGES MAY APPLY. SEE PAGE 15.

FREE WITHDRAWAL 10% FREE EACH YEAR AFTER THE FIRST
OPTION

SERVICE CENTER BANKERS LIFE INSURANCE COMPANY OF NEW YORK
SERVICE CENTER
P. O. BOX 29105
OVERLAND PARK, KS 66201
</TABLE>

================================================================================

- 3 -
<PAGE> 4
<TABLE>
<S> <C>
PREMIUM ALLOCATIONS THE INITIAL PREMIUM PAYMENT WILL BE ALLOCATED AS SPECIFIED IN YOUR APPLICATION. THE SAME
ALLOCATIONS WILL BE MADE FOR EACH SUBSEQUENT PAYMENT UNLESS YOU CHANGE THE ALLOCATIONS BY WRITTEN
REQUEST OR, AT THE TIME OF A PREMIUM PAYMENT, YOU INSTRUCT US TO ALLOCATE THAT PAYMENT
DIFFERENTLY.

SEPARATE ACCOUNT BANKERS LIFE INSURANCE COMPANY OF NEW YORK SEPARATE ACCOUNT I

VARIABLE ACCOUNT OPTIONS PORTFOLIO FUND IN WHICH VARIABLE ACCOUNT INVESTS:
- ------------------------ -------------------------------------------------
ASSET MANAGER FIDELITY ASSET MANAGER PORTFOLIO
CONTRAFUND FIDELITY CONTRAFUND PORTFOLIO
EQUITY INCOME FIDELITY EQUITY INCOME PORTFOLIO
GROWTH FIDELITY GROWTH PORTFOLIO
INDEX 500 FIDELITY INDEX 500 PORTFOLIO
INTERNATIONAL STOCK T. ROWE PRICE INTERNATIONAL STOCK PORTFOLIO
INVESTMENT GRADE BOND FIDELITY INVESTMENT GRADE BOND PORTFOLIO
LIMITED TERM BOND T. ROWE PRICE LIMITED TERM BOND PORTFOLIO
MANAGED OCC ACCUMULATION TRUST MANAGED PORTFOLIO
MICRO-CAP ROYCE MICRO-CAP PORTFOLIO
MIDCAP GROWTH ALGER AMERICAN MIDCAP GROWTH PORTFOLIO
MONEY MARKET FIDELITY MONEY MARKET PORTFOLIO
OVERSEAS SOGEN OVERSEAS VARIABLE PORTFOLIO
SAFECO EQUITY SAFECO EQUITY PORTFOLIO
SAFECO GROWTH SAFECO GROWTH PORTFOLIO
SMALL CAPITALIZATION ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO
SMALL CAP OCC ACCUMULATION TRUST SMALL CAP PORTFOLIO
WORLDWIDE HARD ASSETS VAN ECK WORLDWIDE HARD ASSETS PORTFOLIO
</TABLE>

- 4 -
<PAGE> 5
SECTION 3 - DEFINITIONS

ACCOUNT - Any of the Variable Accounts or the Fixed Account.

ACCUMULATION UNIT - An accounting measure We use to calculate the value of a
Variable Account before annuity payments begin.

AGE - Age on last birthday unless otherwise specified.

ANNUITANT - You are the Annuitant, unless You state otherwise in Your
application. The Annuitant is the person or persons whose life (or lives)
determines the dollar amount of the annuity payments that will be paid under
the Contract. If the Annuitant dies before the Annuity Start Date, We will pay
a death benefit. The maximum number of joint Annuitants is two. Provisions
referring to the death of an Annuitant mean the death of the last surviving
Annuitant. The Annuitant named in the application may not be changed.

ANNUITY PURCHASE VALUE - The Contract Value, less any applicable Contract Fee,
Withdrawal Charges, and premium taxes not yet deducted. Withdrawal Charges will
be waived if the Contract Values are applied to an annuity with a life
contingency or an annuity with a payment period of at least 6 years.

ANNUITY START DATE - The date when the Annuitant will begin to receive annuity
payments. (You are the Annuitant, unless You tell Us otherwise at the time of
Your application.) If You own a Non-Qualified Contract, We will ask You to
select an Annuity Start Date. If You do not select a date, the Annuity Start
Date is the either the Annuitant's age 70 or 10 years after the Date of Issue,
whichever is later. In no even, if you own a Non-Qualified Contract, will the
Annuity State Date be later than the Annuitant's age 90. For qualified
contracts purchased in connection with qualified plans under Internal Revenue
Code Sections 401(a), 401(k), 403(a), and 403(b), the Code requires that the
Annuity State Date must be no later than April 1of the calendar year following
the later of the year in which the Owner (i) reaches age 70 1/2 or (ii)
retires. If the Owner is a "5 percent owner" (as defined in the Code), or in
the case of an IRA that satisfies Code section 408, the Annuity Start Date must
be no later than the date the Owner reaches age 70 1/2.

ANNUITY UNIT - An accounting unit of measure We use to calculate the amount of
annuity payments under a variable annuity option.

BENEFICIARY - The person(s) You name to receive the death benefit if the Owner
or Annuitant dies before the Annuity Start Date.

BUSINESS DAY - Each day on which the New York Stock Exchange is open for
business, except for the holidays listed in the prospectus under "Holidays" and
except for any day on which the Portfolio in which a Variable Account invests
does not value its shares.

- 5 -
<PAGE> 6
CONTRACT FEE - During the Pay-in Period, We will deduct this charge from Your
Contract Value at the end of each contract quarter and on the date You fully
withdraw all value from the Contract. We use the Contract Fee to cover Our
cost of providing certain administrative services related to the Contracts and
the Separate Account.

CONTRACT PERIODS AND ANNIVERSARIES - Contract Years, contract months and
contract quarters are measured from the Date of Issue. Each contract month
begins on the same day in each calendar month as the Date of Issue. If the end
of a premium period or a Contract Year is indicated by an age, it ends on the
Contract Anniversary immediately following the birthday on which the Annuitant
reaches that age.

CONTRACT VALUE - The total amount You have accumulated under the Contract. It
is the sum of the Separate Account Value and the Fixed Account Value.

CONTRACT YEAR - A twelve-month period beginning on the Date of Issue or on a
Contract Anniversary. The first Contract Year begins on the Date of Issue.

DATE OF ISSUE - The date (shown in Section 2 - Contract Specifications) on
which We issue the Contract. It is the date on which the first Contract Year
begins.

DEATH BENEFIT - The Death Benefit will equal the greater of: (a) the Contract
Value as of the date We receive due proof of the deceased's death and payment
instructions; or (b) the minimum Death Benefit on any Death Benefit Anniversary
preceding the date the death benefit is determined, adjusted by any Premium
Payments and any charges incurred between such Death Benefit Anniversary. Any
partial withdrawal will result in a proportional reduction in the minimum Death
Benefit.

DEATH BENEFIT ANNIVERSARY - Every third Contract Anniversary beginning on the
Date of Issue.

DOLLAR COST AVERAGING - Owner-initiated systematic transfers from one or more
Variable Accounts to any other available Variable Account.

FIXED ACCOUNT - You may allocate all or a portion of the Contract Value to the
Fixed Account. The assets supporting the Fixed Account are held in the
Company's General Account.

FIXED ACCOUNT CURRENT RATE - The applicable interest rate contained in a
schedule of rates established by the Company from time to time.

FIXED ACCOUNT VALUE - The value of the Contract in the Fixed Account prior to
the Annuity Start Date.

FREE WITHDRAWAL AMOUNT - The amount of Contract Value that can be withdrawn in
any Contract Year after the first Contract Year without a Withdrawal Charge.

- 6 -
<PAGE> 7
FUND - Each of (i) The Alger American Fund; (ii) Fidelity VIP Fund; (iii)
Fidelity VIP Fund II; (iv) OCC Accumulation Trust; (v) Royce Capital Fund; (vi)
SAFECO Resource Series Trust; (vii) SoGen Variable Funds, Inc.; (viii) T. Rowe
Price Fixed Income Series, Inc.; (ix) T. Rowe Price International Series, Inc.;
and (x) Van Eck Worldwide Insurance Trust. Each Variable Account invests in a
separate investment portfolio ("Portfolio") of a Fund. Each Fund is either an
open-end management investment company or a unit investment trust.

GENERAL ACCOUNT - All assets of the Company other than those allocated to
separate accounts.

NET PREMIUM PAYMENT - The Premium Payment minus any applicable premium tax.

OWNER ("YOU") - The person(s) who own(s) the Contract. "JOINT OWNERS" are two
natural persons who own the Contract equally with the right of survivorship.

PAYEE - The person(s) who receive annuity payments. The "SUCCESSOR PAYEE"
receives any guaranteed annuity payments after the death of the Payee.

PAY-IN PERIOD - The period of time that begins when Your Contract is issued and
continues until the date You begin to receive annuity payments on the Annuity
Start Date. The Pay-in Period will also end if You fully withdraw Your
Contract before the Annuity Start Date.

PAYOUT PLAN - An arrangement under which annuity payments are made under this
Contract.

PORTFOLIO - The separate investment portfolios of the Funds. The Portfolios
currently offered through the Contract are listed on page 4 of this Contract.

PREMIUM PAYMENT YEAR - The twelve-month period beginning on the date We receive
any Premium Payment. It is used to calculate the Withdrawal Charge if You
choose the Date of Premium Payment Withdrawal Charge Option.

PREMIUM TAX - The amount of tax, if any, charged by a federal, state or
municipal entity on Premium Payments or Contract Values.

QUALIFIED CONTRACT - A Contract that is issued in connection with retirement
plans that qualify for special federal income tax treatment under Sections 401,
403(b), or 408 of the Internal Revenue Code.

SEC - The U.S. Securities and Exchange Commission.

SEPARATE ACCOUNT -Bankers Life Insurance Company of New York Separate Account
1. It is not part of Our General Account. The Separate Account is divided
into Variable Accounts, each of which invests solely in shares of a Portfolio
of a Fund.

SEPARATE ACCOUNT VALUE - The value of the Contract in the Separate Account
prior to the Annuity Start Date.

- 7 -
<PAGE> 8
SERVICE CENTER - The office which provides service for the Contract. The
mailing address is P. O. Box 29105, Overland Park, KS 66201. If the address
changes We will notify You.

SURRENDER VALUE - The Contract Value MINUS (1) any applicable Withdrawal
Charges; MINUS (2) any premium taxes not previously deducted; and MINUS (3) the
Contract Fee.

VARIABLE ACCOUNT - A subdivision of the Separate Account. A Variable Account
invests solely in the shares of a designated Portfolio of a Fund.

WE, US, OUR AND COMPANY - Bankers Life Insurance Company of New York.

WRITTEN REQUEST - A Written Request or Notice in a form satisfactory to the
Company which is signed by the Owner and received at the Service Center.

YOU, YOUR - The Owner or Joint Owners.

- 8 -
<PAGE> 9
SECTION 4 - PREMIUM PAYMENTS

PREMIUM PAYMENTS

The initial Premium Payment is payable on or before delivery of this Contract.
Any Premium Payments after the initial Premium Payment are payable at Our
Service Center. All Premium Payments are payable in U.S. Dollars. The initial
Premium Payment is shown on Page 3. The minimum Premium Payment is $1,000. We
retain the right not to accept additional Premium Payments in any one year
which exceed two times the initial Premium Payment and not to accept total
Premium Payments in excess of $250,000.

You may continue Premium Payments until the earliest of:

(a) the Annuity Start Date;
(b) full withdrawal of Contract Value; or
(c) the date You reach age 85 (age 70 1/2 if this is a Qualified
Contract).

ALLOCATION OF PREMIUM PAYMENTS

This Contract allows You to allocate Net Premium Payments to any Variable
Account of the Separate Account and the Fixed Account subject to any minimum
allocation amounts established by the Company. The initial Premium Payment will
be allocated as specified in Your application. The same allocations will be
made for each subsequent payment unless You change the allocations by Written
Request or, at the time of a Premium Payment, You instruct Us to allocate that
payment differently.

SECTION 5 - CONTRACT VALUE

CONTRACT VALUE

The Contract Value at any time is the sum of the Fixed Account Value and the
Separate Account Value.

Unless You indicate otherwise, amounts withdrawn from the Contract Value by You
and charges described in this Contract will be deducted from the Fixed Account
and the Variable Accounts based on the proportion that the values of the Fixed
Account and the Variable Accounts bear to the Contract Value.

All values and benefits are equal to or more than those required by law. The
official responsible for supervising insurance in the state where the Contract
is delivered has a detailed summary of the method We use to determine values.

- 9 -
<PAGE> 10
FIXED ACCOUNT VALUE

The Fixed Account Value is equal to:

(1) the Net Premium Payments allocated to the Fixed Account, PLUS
(2) amounts transferred to the Fixed Account, PLUS
(3) interest credited to the Fixed Account, MINUS
(4) any partial withdrawals or transfers from the Fixed Account,
MINUS
(5) any Withdrawal Charges, Contract Fees or premium taxes
deducted from the Fixed Account.

The Company will credit interest to the Fixed Account. The minimum Fixed
Account interest rate is the rate shown on Page 3, compounded annually. The
Company, at its discretion, may credit interest rates greater than the minimum
Fixed Account interest rate.

SEPARATE ACCOUNT VALUE

The Separate Account Value is equal to the sum of the values in all the
Variable Accounts of the Separate Account, each of which is, prior to the
Annuity Start Date, equal to:

(1) Net Premium Payments allocated to that Variable Account, PLUS
(2) any amount transferred to that Variable Account, PLUS
(3) any investment income, dividends, capital gains, realized or
unrealized, in that Variable Account, MINUS
(4) any partial withdrawals or transfers of amounts from that
Variable Account (including any applicable transfer charges),
MINUS
(5) any Withdrawal Charges, Contract Fees, or other charges or
premium taxes deducted from that Variable Account, MINUS
(6) realized or unrealized net capital losses in that Variable
Account.

CONTRACT FEE

We charge a fee for establishing and maintaining Our records for this Contract.
The charge is $7.50 per quarter and is deducted from the Contract Value at the
end of each three-month period measured from the Date of Issue or, if earlier,
on the date of a full withdrawal. This charge does not apply after a Payout
Plan has begun.

PREMIUM TAX CHARGES

A charge will be made by Us against the Contract Value of this Contract at the
time any premium taxes not previously deducted are payable. Currently, New
York has no premium tax or retaliatory premium tax. If New York imposes these
taxes in the future, or if the Owner is or becomes a resident of a state where
such taxes apply, the Company will deduct the applicable premium taxes.

- 10 -
<PAGE> 11
TRANSFERS OF CONTRACT VALUES

While this Contract is in force prior to the Annuity Start Date, You may
transfer, by Written Request, Contract Values from one or more of the Variable
Accounts to another one or more of the Variable Accounts or to the Fixed
Account. You may make 12 such transfer requests per Contract Year without
charge. A charge of $25.00 will be imposed for each transfer request in excess
of 12. The transfer fee, if any, will be deducted from the Variable Account(s)
from which the transfer is made. If a transfer is made from more than one
Variable Account at the same time, the transfer fee will be deducted pro-rata
from the remaining Separate Account Values in such Variable Accounts.

While this Contract is in force prior to the Annuity Start Date, You may
transfer up to 25% of the Fixed Account Value (as determined at the beginning
of the Contract Year) from the Fixed Account to one or more of the Variable
Accounts in any Contract Year. There is no charge for transfers from the Fixed
Account to one or more of the Variable Accounts. Amounts transferred under the
Interest Sweep provision are included in the maximum amount which can be
transferred from the Fixed Account in any Contract Year.

After annuity payments have begun, You may exchange annuity units from one or
more of the Variable Accounts for annuity units of one or more of the Variable
Accounts once each Contract Year. There is no charge for this exchange.

Amounts deducted from the Fixed Account for charges, withdrawals and transfers
to the Variable Accounts, for the purpose of crediting interest are accounted
for on a first in, first out basis.

DOLLAR COST AVERAGING

Before the Annuity Start Date, You may elect to have an amount You specify
automatically transferred from one or more Variable Accounts or the Fixed
Account to any other Variable Accounts. Dollar Cost Averaging transfers will be
made on a monthly or quarterly basis. The amount transferred must be at least
$100. There is no charge for dollar cost averaging transfers.

Amounts withdrawn from the Fixed Account due to Dollar Cost Averaging are
counted toward the 25% of Fixed Account Value that may be transferred out of
the Fixed Account during any Contract Year.

INTEREST SWEEP

Before the Annuity Start Date, You may elect to have any interest credited to
the Fixed Account automatically transferred to one or more Variable Accounts at
the beginning of each calendar quarter. There is no charge for interest sweep
transfers and an interest sweep transfer is not considered a transfer for
purposes of assessing a transfer charge.

- 11 -
<PAGE> 12
Amounts transferred out of the Fixed Account due to an interest sweep transfer
are counted toward the 25% of Fixed Account Value that may be transferred out
of the Fixed Account during any Contract Year.

AUTOMATIC ACCOUNT BALANCING

Before the Annuity Start Date, You may elect automatic account balancing. If
You select this option, on the first Business Day of a calendar month or
calendar quarter, We will automatically balance Your Variable Accounts to match
Your premium allocation percentages. There is no charge for automatic account
balancing.

SECTION 6 - SEPARATE ACCOUNT PROVISIONS

SEPARATE ACCOUNT

Variable benefit payments under the Contract are provided through the Separate
Account. The Separate Account is registered with the SEC as a unit investment
trust under the Investment Company Act of 1940. The portion of the assets of
the Separate Account equal to the reserves and other Contract liabilities of
the Separate Account are not chargeable with the liabilities arising out of any
other business that We may conduct and which has no specific relation to or
dependence upon the Separate Account. We may transfer, subject to the
authorization of the Superintendent of the New York Department of Insurance, to
Our general account any assets of the Separate Account which are in excess of
such reserves and other liabilities. The Company established the Separate
Account to support the operations of this Contract and other variable contracts
the Company may offer.

VARIABLE ACCOUNTS

The assets of the Separate Account are divided into subdivisions called
Variable Accounts that are listed on page 4 of this Contract and in the current
prospectus You received. Each Variable Account invests exclusively in shares
of a corresponding Portfolio of a Fund listed on page 4 of this Contract. The
income, gains and losses, whether or not realized, from assets allocated to
each Variable Account shall be credited to or charged against such Variable
Account without regard to other income, gains, or losses of any other Variable
Account or of the Company. Any amounts of income, dividends and gains
distributed from the shares of a Fund are re-invested in additional shares of
that Fund at its net asset value.

The Separate Account supporting benefits of this Contract and the reserves
supporting variable annuity payments under this Contract provided by the
Separate Account depend on the investment performance of the Portfolios in
which Your selected Variable Accounts are invested. We do not guarantee the
investment performance of the Portfolios. You bear the investment risk related
to Separate Account Value and variable annuity payments supported by the
Variable Accounts.

- 12 -
<PAGE> 13
ACCUMULATION UNITS

Net Premium Payments may be allocated among and amounts may be transferred to
the Variable Accounts. Net Premium Payments or transferred amounts are
converted into accumulation units of the Variable Account to which the payment
is allocated or the transfer is made. The number of accumulation units
credited to each Variable Account is determined by dividing the dollar value of
a net Premium Payment allocated or transferred to a Variable Account by the
value of one accumulation unit for the Variable Account as of the end of the
Business Day on which We received the payment. The number of accumulation
units so determined will not be affected by any subsequent change in the value
of such accumulation unit.

ACCUMULATION UNIT VALUE

The accumulation unit value for each Variable Account will vary to reflect the
investment experience of the applicable Portfolio. The accumulation unit value
for a Variable Account will be determined at the end of each Business Day by
multiplying the accumulation unit value of the Variable Account on the
preceding Business Day by the net investment factor for the Variable Account
for the current Business Day. The value of the Variable Account on each
Business Day is then determined by multiplying the number of accumulation units
in that Variable Account by the accumulation unit value on that Business Day.

VALUATION OF ANY VARIABLE ACCOUNT

Allocation of net Premium Payments and transfers to a Variable Account will
increase the number of accumulation units of that Variable Account. Partial
withdrawals and transfers from a Variable Account will result in cancellation
of accumulation units of that Variable Account, as will a full withdrawal and
the deduction of a Contract Fee and any applicable premium taxes. Accumulation
units are canceled as of the end of the Business Day on which the Company
receives a Written Request or notices regarding the event.

NET INVESTMENT FACTOR

The net investment factor is an index applied to measure the investment
performance of a Variable Account from one Business Day to the next. The net
investment factor may be greater or less than one; therefore, the value of an
accumulation unit may increase or decrease from day to day.

The Net Investment Factor for each Variable Account equals 1 plus the fraction
obtained by dividing (a) by (b) where:
(a) is the net result of:
1. the investment income, dividends, and capital gains,
realized or unrealized, credited at the end of the
current Business Day; PLUS
2. the amount credited or released from reserves for
taxes attributed to the operation of the Variable
Account; MINUS
3. the capital losses, realized or unrealized, charged
at the end of the current Business Day, MINUS

- 13 -
<PAGE> 14
4. any amount charged for taxes or any amount set aside
during the Business Day as a reserve for taxes
attributable to the operation or maintenance of the
Variable Account; MINUS
5. the amount charged for mortality and expense risk on
that Business Day; MINUS
6. the amount charged for administration on that
Business Day; and

ANNUITY UNIT VALUE

The value of an Annuity Unit for each Variable Account will vary to reflect the
investment experience of the applicable Portfolio. The value of an Annuity
Unit for a Variable Account will be determined on each Business Day by
multiplying the Annuity Unit value of the Variable Account on the preceding
Business Day by the product of (a) the net investment factor for that Variable
Account for the Business Day for which the annuity value is being calculated
and (b) an interest factor to neutralize the assumed interest rate.

The participant may select an assumed interest rate of 3%, 4% or 5%. The
assumed interest rate is used to determine the first monthly payment for the
Variable Account. The subsequent patterns of annuity payments will be affected
by the interaction of the assumed interest rate initially chosen by the
participant and the net performance of the applicable variable portfolio. A
higher assumed interest rate will produce a higher initial payment, but a more
slowly rising series of subsequent payments (or a more rapidly falling series
of subsequent payments) than a lower assumed interest rate because the monthly
performance of a variable division has to grow more than the underlying assumed
interest rate to create a larger payment. Each monthly payment subsequent to
the first will be smaller than, equal to, or greater than the payment
immediately preceding it, depending on whether the actual net investment for
the past month is smaller than, equal to, or greater than the assumed interest
rate. In order to avoid a decrease in variable annuity payments, the separate
account must achieve an annualized investment return (after deduction of
mortality and expense risk charges and administrative charge) at least equal to
the assumed interest rate. The annualized investment return must be 4.4%, 5.4%
or 6.4% depending on whether an assumed interest rate of 3%, 4% or 5% is chosen
at the time a variable payout plan is selected.

- 14 -
<PAGE> 15
SECTION 7 - WITHDRAWAL PROVISIONS

PARTIAL WITHDRAWALS

You may request, in writing, to withdraw part of the Contract Value in amounts
not less than $250. Your request must be received before the Annuity Start
Date. If the Contract Value is reduced to below $1,000 by a partial
withdrawal, the Company reserves the right to pay the Surrender Value to the
Owner in a lump sum. Such payment will terminate the Contract and all
obligations under the Contract.

You specify the Variable Account(s) or Fixed Account from which the partial
withdrawal is made. If You do not specify from which accounts the withdrawal
is to be made, or if the amount in the designated account is inadequate to
comply with Your request, We will make the withdrawal pro-rata from each
Variable Account and the Fixed Account based on the proportion that Your
Variable Account Values and the Fixed Account Value bear to the Contract Value
prior to the withdrawal.

We will pay You the amount You request in connection with a partial withdrawal
by canceling Accumulation Units from the appropriate Variable Accounts and/or
reducing the value of the Fixed Account. A partial withdrawal will result in a
proportional reduction in the minimum Death Benefit. (see "Death Benefit Before
the Annuity Start Date" for more information on this proportional reduction.)

FREE WITHDRAWAL AMOUNT

In any Contract Year after the first, You may withdraw a portion of Your
Contract Value each year without incurring a Withdrawal Charge. This amount is
called the Free Withdrawal Amount. There will be a Withdrawal Charge on partial
withdrawals in excess of the annual Free Withdrawal Amount.

FULL WITHDRAWAL OF CONTRACT VALUE

You may cancel this Contract by Written Request and receive the Surrender Value
at any time before the Annuity Start Date. The Surrender Value will be the
Contract Value as of the end of the Business Day on which the Company receives
Your Written Request in Our Service Center, less any Withdrawal Charge,
Contract Fee and premium taxes not previously deducted.

WITHDRAWAL CHARGES

Subject to the annual Free Withdrawal Amount, full or partial withdrawals of
Contract Values may be subject to a contingent deferred sales charge known as
the Withdrawal Charge.

When You purchase Your Contract, You must choose between two Withdrawal Charge
Options.

- 15 -
<PAGE> 16
The Withdrawal Charge is separately calculated for each withdrawal You make.
For purposes of calculating the Withdrawal Charge, We treat withdrawals as
coming from the oldest Premium Payment first. Amounts subject to the
Withdrawal Charge will be deemed to be first from Premium Payments, and then
from earnings. This means that We will not deduct a Withdrawal Charge on
withdrawals of that portion of Your Contract Value that exceeds the sum total
of Your Premium Payments.

IF YOU CHOOSE THE DATE OF ISSUE WITHDRAWAL CHARGE OPTION: We will
impose a Withdrawal Charge on all partial or full withdrawals of Premium
Payments that You make during the first nine Contract Years if the amount of
the withdrawal exceeds the Free Withdrawal Amount. The Withdrawal Charge is
calculated as a percentage of the amount You withdraw based on the number of
years between the date We receive Your Written Request for withdrawal and the
Date of Issue. The rate of the Withdrawal Charge is listed in the table below.
Under this option, no Withdrawal Charge is deducted from full or partial
withdrawals that You make in Contract Years ten and later.

<TABLE>
<CAPTION>
Charge as Percentage
Contract Year of Premium Payments
------------- --------------------
<S> <C>
1-6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.0%
7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.0
8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.0
9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.0
10+ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
</TABLE>

IF YOU CHOOSE THE DATE OF PREMIUM PAYMENT WITHDRAWAL CHARGE OPTION:
We will calculate the Withdrawal Charge by determining the length of time
between the date We receive Your Written Request for a withdrawal and the date
You made the Premium Payment being withdrawn. We will deduct a Withdrawal
Charge if You withdraw a Premium Payment that We have held for less than seven
Premium Payment Years if it is greater than the Free Withdrawal Amount.

<TABLE>
<CAPTION>
Charge as Percentage
Premium Payment Year of Premium Payments
-------------------- --------------------
<S> <C>
1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.0%
2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.0
3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.0
4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.0
5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.0
6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.0
7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.0
8+ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
</TABLE>

- 16 -
<PAGE> 17
Any applicable Withdrawal Charge will be deducted from the remaining value in
the Variable Account(s) or Fixed Account from which the withdrawal is being
made. If such remaining Variable Account Value(s) or Fixed Account Value is
insufficient for this purpose, the Withdrawal Charge will be deducted pro-rata
from all Variable Account(s) and the Fixed Account based on the remaining
Contract Value in each Variable Account and the Fixed Account.

No Withdrawal Charge will be assessed in the event the Contract terminates due
to the death of the Annuitant or Owner or if Contract Values are applied to an
annuity with a life contingency or an annuity with a payment period over 6
years.

PAYMENT ON WITHDRAWALS

Payment on any request for withdrawal, or for the Death Benefit, will be made
as soon as possible and, with respect to the Contract Values in the Variable
Accounts, no later than seven days after the Written Request is received by the
Company. However, such payment may be postponed for any period:

(1) when the New York Stock Exchange is closed; or
(2) when trading on the New York Stock Exchange is restricted; or
(3) when an emergency exists as a result of which (a) disposal of
securities held in the Variable Accounts is not reasonably
practicable or (b) it is not reasonably practicable to fairly
determine the value of the net assets of the Variable Account;
or
(4) during any other period when the U.S. Securities and Exchange
Commission, by order, so permits for the protection of
security holders.

Rules and regulations of the U.S. Securities and Exchange Commission will
govern as to whether the conditions set forth in 2, 3 and 4 exist.

For payments or transfers from the Fixed Account, We may defer payment for up
to 6 months from the date We receive Your Written Request. We will pay
interest at the then current rate applicable to the Fixed Account, but the
interest will not be less than 3% per annum on the amount withdrawn if the
payment is deferred more than 10 days after receipt of documentation necessary
to complete the transaction.

SYSTEMATIC WITHDRAWAL PROGRAM

The Systematic Withdrawal Program provides an automatic monthly or quarterly
payment to You from the amounts You have accumulated in the Variable Accounts
and/or the Fixed Account. The minimum amount You may withdraw is $100. To use
the program, You must maintain a $1,000 balance in Your Contract. You may
elect to participate in the Systematic Withdrawal Program at any time before
the Annuity Start Date by sending a Written Request to Our Service Center.
Once You elect the program, it remains in effect unless the balance in Your
Contract drops below $1,000.

- 17 -
<PAGE> 18
We will assess a Withdrawal Charge on these withdrawals, unless the amount You
withdraw under the Systematic Withdrawal Program qualifies as a Free Withdrawal
Amount or unless Withdrawal Charges no longer apply to the amounts withdrawn.
We do not deduct any other charges for this program. We reserve the right to
discontinue offering the Systematic Withdrawal Program at any time and for any
reason.

Amounts withdrawn from the Fixed Account due to the Systematic Withdrawal
Program are counted toward the 25% of Fixed Account Value that may be
transferred out of the Fixed Account during any Contract Year. Amounts
withdrawn due to the Systematic Withdrawal Program will result in a
proportional reduction in the minimum Death Benefit.

SECTION 8 - OWNERSHIP PROVISIONS

CONTRACT OWNER

The Annuitant is the Owner unless otherwise stated in the application or unless
changed under the Transfer of Ownership Provision. The Owner is entitled to
all Contract rights and benefits while the Annuitant is alive, without the
consent of any other person.

JOINT OWNER

The Contract may be owned by two persons as Joint Owners, with rights of
survivorship. In this case, the Joint Owners must consent to any withdrawals
or changes to the Contract or Beneficiary.

TRANSFER OF OWNERSHIP

You may transfer the ownership of this Contract on forms provided by Us. The
completed forms must be recorded by Us at Our Service Center. The transfer
will be effective as of the date the transfer form is signed. We may require
the return of the Contract for endorsement. The transfer is subject to any
payment made or other actions taken by Us before We received Your Written
Request. We are not responsible for the tax consequences resulting from a
change of ownership.

QUALIFIED PLANS

If and while this Contract is part of a tax-qualified retirement plan under the
U.S. Internal Revenue Code, You may not change the Owner or assign the Contract
or make withdrawals unless permitted by the plan.

BENEFICIARY

The designation of a Beneficiary in the application shall remain in effect
until You change it. You may name a Beneficiary and change any named
Beneficiary during the lifetime of the Annuitant by Written Request
satisfactory to Us. The change will take effect on the date the Written
Request is signed. A change will not apply to any payment We make or any other
action We take before the Written Request is received in Our Service Center.

- 18 -
<PAGE> 19
Any Beneficiary who dies within 10 days of the Annuitant's or Owner's death
will not be entitled to any benefits unless that Beneficiary is living when We
receive due proof of the Annuitant's or Owner's death.

ASSIGNMENT

You may assign the Contract in writing. The assignment will not bind Us until
We have received a copy. Your rights and those of any Beneficiary will be
subject to assignment. We are not responsible for the validity or tax
consequences of the assignment.

SECTION 9 - DEATH BENEFIT PROVISIONS

DISTRIBUTION UPON THE DEATH OF THE OWNER

If You own the Contract with another person, and one of You dies before the
Annuity Start Date, the survivor becomes the sole Beneficiary regardless of
Your designation. If there is no surviving Owner, Your named Beneficiary will
become the Beneficiary upon Your death. (You may name primary and contingent
beneficiaries.) If You have named two or more primary Beneficiaries, they will
share equally in the death benefit (described below) unless You have specified
otherwise. If there are no living primary Beneficiaries at the time of Your
death, payments will be made to those contingent Beneficiaries who are living
when payment of the death benefit is due. If all the Beneficiaries have
predeceased You, We will pay the death benefit to Your estate. If You or a
Joint Owner who is the Annuitant dies before the Annuity Start Date, then the
provisions relating to the death of an Annuitant (described below) will govern.

Non-Qualified Contracts contain provisions which are intended to comply with
the requirements of Section 72(s) of the Internal Revenue Code, although no
regulations interpreting these requirements have yet been issued. We intend to
review such regulations and modify this annuity contract if necessary to assure
that its provisions comply with the requirements of Code Section 72(s) when
clarified by regulation or otherwise. If the requirements of Section 72(s) of
the Internal Revenue Code require an amendment to this annuity contract, we
will make such amendment and, such amendments may be effective retroactively if
necessary for compliance with Section 72(s).Other rules may apply to Qualified
Contracts.

If You are not the Annuitant and You die before the Annuitant and before the
Annuity Start Date, then the following options are available to Your
Beneficiary:

(1) If such Beneficiary is the spouse of the deceased Owner, the
spouse may continue the Contract as the new Owner.

(2) If such Beneficiary is not the spouse of the deceased Owner:

- 19 -
<PAGE> 20
(a) such Beneficiary may elect to receive the Contract
Value, LESS any premium taxes not yet deducted, in a
single sum within 5 years of the deceased Owner's
death; or

(b) such Beneficiary may elect to receive the Contract
Value paid out under one of the approved payout
plans, provided that distributions begin within one
year of the deceased Owner's death and the
distribution period under the payout plan is for the
life of, or for a period not exceeding the life
expectancy of, the Beneficiary.

If such Beneficiary does not elect one of the above options,
We will pay the Contract Value, LESS any premium taxes not yet
deducted, within five years from the date of the deceased
Owner's death.

Under any of the distribution options in this section, "Distribution Upon the
Death of the Owner," the Beneficiary may exercise all ownership rights and
privileges from the date of the deceased Owner's death until the date that the
Contract Value is paid. Similar rules apply to Qualified Contracts. The above
distribution requirements will apply only upon the death of the first Joint
Owner.

DISTRIBUTION UPON THE DEATH OF THE ANNUITANT

If the Annuitant (including an Owner who is the Annuitant) dies before the
Annuity Start Date (see "Age Limitation Under the Death Benefit" below), We
will pay the Death Benefit described below in "Death Benefits Before the
Annuity Start Date" in a lump sum to Your named Beneficiary(ies) within five
years after the date of the Annuitant's death. (You may name primary and
contingent beneficiaries.) If You have named two or more primary
Beneficiaries, they will share equally in the Death Benefit unless You have
specified otherwise. If there are no living primary Beneficiaries at the time
of the Annuitant's death, payments will be made to those contingent
Beneficiaries who are living when payment of the Death Benefit is due. If all
the Beneficiaries have predeceased the Annuitant, We will pay the Death Benefit
to You, if living, or the Annuitant's estate. In lieu of a lump sum payment,
the Beneficiary may elect, within 60 days of the date We receive due proof of
the Annuitant's death, to apply the Death Benefit to a payout plan. (See
"Payout Options.")

If You are also the Annuitant and You die, the provisions described
immediately above apply, except that the Beneficiary may only apply the Death
Benefit payment to a payout plan if:

(1) payments under the option begin within one (1) year of the
Annuitant's death; and
(2) payments under the option are payable over the Beneficiary's
life or over a period not greater than the Beneficiary's life
expectancy.

- 20 -
<PAGE> 21
DEATH BENEFIT BEFORE THE ANNUITY START DATE

If the Annuity dies before the Annuity Start Date (see "Age Limitation Under
the Death Benefit" below), the Beneficiary will receive a Death Benefit. The
Death Benefit payable will not be less that the minimum Death Benefit defined
in this section, less any applicable premium taxes not previously deducted, The
minimum Death Benefit is initially set at issues and equals the Premium
Payments. The minimum Death Benefit is reset every third year on the Death
Benefit Anniversary and equals the greater of:

(1) the Contract Value on such Death Benefit Anniversary; or

(2) the minimum Death Benefit on the previous Death Benefit
Anniversary adjusted by any Premium Payments and any partial
withdrawal and charges, incurred since the previous Death
Benefit Anniversary.

Partial withdrawal will result in a proportional reduction in the minimum Death
Benefit by the ratio of the amount withdrawn to the Contract Value prior to
such withdrawal.

For example, if the Contract Value prior to a withdrawal is $100,000, there
have been no additional premium payments, the minimum Death Benefit on the
previous Death Benefit Anniversary was $150,000 and a partial withdrawal of
$20,000 is made, the reduction in the minimum Death Benefit would be determined
as $30,000 [$150,000 x ($20,000/$100,000)]. On the next Death Benefit
Anniversary, assuming no additional Premium Payments or withdrawals and that
the Contract Value on the next Death Benefit Anniversary is $75,000, the
minimum Death Benefit would be $120,000 [the greater of $75,000 or ($150,000
minus $30,000)].

Once reset, the minimum Death Benefit will never decrease unless partial
withdrawals are made.

The Death Benefit payable between the Death Benefit Anniversary equals the
greater of:

(1) the Contract Value as of the date We receive due proof of the
deceased's death and payment instructions; or

(2) the minimum Death Benefit as of any Death Benefit Anniversary
preceding the date the Death Benefit is determined, adjusted
by any Premium Payments and any partial withdrawal and
charges, incurred between such Death Benefit Anniversary and
the date the Death Benefit is determined;

less any applicable premium taxes not previously deducted.

AGE LIMITATION UNDER THE DEATH BENEFIT

In all instances where the Annuitant dies at or after age 75 (or ten years
after the Date of Issue, whichever is later) but before the Annuity Start Date,
the Death Benefit will equal Contract Value, LESS any applicable premium taxes
not yet deducted, as of the date We receive due proof of death and payment
instructions.

- 21 -
<PAGE> 22
LOANS

If the Contract is a Qualified Contract, any outstanding loan amount on the
date the Death Benefit is paid will also be deducted from the Death Benefit.

PROOF OF DEATH

Proof of death satisfactory to the Company consists of the death record or a
certified copy of a court decree reciting a finding of death or any other proof
satisfactory to the Company.

REQUIRED DISTRIBUTIONS

An Owner or Beneficiary who is required to begin to receive payments in the
form of an annuity with a life contingency or annuity for a period certain not
exceeding the recipient's life expectancy may choose a payout plan.

DEATH OF PAYEE AFTER THE ANNUITY START DATE

If the Payee dies after the Annuity Start Date, any Joint Payee becomes the
sole Payee. If there is no Joint Payee, the Successor Payee becomes the sole
Payee. If there is no Successor Payee, the remaining benefits are paid to the
estate of the last surviving Payee. The death of the Payee after the Annuity
Start Date will have the effect stated in the payout plan pursuant to which
annuity payments are being made. If any Owner dies on or after the Annuity
Start Date, any payments that remain must be made at least as rapidly as under
the payout plan in effect on the date of the Your death.

SECTION 10 - PAYOUT PLAN PROVISIONS

ANNUITY START DATE

If You own a Non-Qualified Contract, We will ask You to select an Annuity Start
Date. If You do not select a date, the Annuity Start Date is either the
Annuitant's age 70 or 10 years after the Date of Issue, whichever is later. In
no event, if you own a Non-Qualified Contract, will the Annuity Start Date be
later than the Annuitant's age 90. For qualified contracts purchased in
connection with qualified plans under Internal Revenue Code section 401(a),
401(k), 403(a), and 403(b), the Code requires that the Annuity Start Date must
be no later than April 1 of the calendar year following the later of the year
in which the Owner (i) reaches age 70 1/2 or (ii) retires. If the Owner is a
"5 percent owner" (as defined in the Code), or in the case of an IRA that
satisfies Code section 408, the Annuity Start Date must be no later than the
date the Owner reaches age 70 1/2..

We will start annuity payments to the Annuitant on the Annuity Start Date shown
on Page 3 unless You request a change in the Annuity Start Date. You can
change the Annuity Start Date to any Contract Anniversary or to any date on
which You withdraw the Contract Value. Your Written Request must be received
in Our Service Center at least 31 days prior to the existing Annuity Start
Date.

- 22 -
<PAGE> 23
PAYOUT PLANS

You may apply the Contract Value, less any applicable Contract Fee, Withdrawal
Charges, and premium taxes not yet deducted, under any of the following payout
plans or any other plan then being offered by the Company. Payout Plans may be
fixed or variable or a combination of both.

The amount of the payment is not guaranteed if a variable payout is selected.
If a fixed payout is selected, the payments for each $1,000 applied will not be
less than those provided by the application of the Annuity Purchase Value (as
defined in this Contract) to the purchase of any single consideration immediate
annuity offered by the Company at the time to the same class of annuitants.

You may request quarterly, semi-annual, or annual annuity payments instead of
monthly payments.

(1) Installment Income Plans

(A) Fixed Period - Paid in monthly payments for the number of
years You select from 1 to 30 years. The amount of the
payment is not guaranteed if a variable payout is selected.
If a fixed payout is selected, the payments for each $1,000
applied will not be less than those shown in the Fixed Period
Table in Section 13. Payments may be commuted.

(B) Fixed Amount - Paid in equal monthly installments of $5.00
or more for each $1,000 applied. The number of payments is not
guaranteed if a variable payout is selected. If a fixed
payout is selected, payments will be made until the full
amount applied with compound interest at not less than 3% is
used up. Payments may be commuted.

(2) Life Income Plans

(A) One Life - Paid monthly during the lifetime of the Payee.
We will guarantee payments for either 10 or 20 years and for
as long as the Payee lives. The amount of the payment is not
guaranteed if a variable payout is selected. If a fixed
payout is selected, the payments for each $1,000 applied will
not be less than those shown in the One Life Table. The
amount paid is based on the Payee's sex and age on the date of
the first annuity payment. Payments may not be commuted.

(B) Joint and Survivor - paid in monthly payments jointly to
two Payees and after one dies to the surviving Payee. The
amount paid is based on the Payees' sex and age on the date of
the first payment. If either one dies before the due date of
the first payment, We will pay the survivor under the Life
Income Plan A with payments guaranteed for 10 years. Payments
may not be commuted.

- 23 -
<PAGE> 24
DETERMINING THE AMOUNT OF THE INITIAL ANNUITY PAYMENT

On the Annuity Start Date, the adjusted Contract Value will be used to
calculate Your annuity payments under the payout plan You select, unless You
choose to receive the Surrender Value in a lump sum. The adjusted Contract
Value is the Contract Value on the Annuity Start Date:

(1) MINUS the quarterly Contract Fee

(2) MINUS any applicable premium taxes not yet deducted; and

(3) for an installment income annuity payout plan with a payout period
of less than 6 years, MINUS any applicable Withdrawal Charge.

For Qualified Contracts, the amount of any outstanding loan is also deducted;
distributions must satisfy certain requirements specified in the Code.

We do not assess a Withdrawal Charge if You choose an annuity payout plan with
a life contingency or an installment payout plan with a period certain of at
least 6 years.

VARIABLE PAYOUT

A variable payout plan is a payout plan with payments increasing or decreasing
in amount in accordance with the Annuity Unit values of one or more of the
Variable Account(s) (as described in the Separate Account Provisions). After
the first monthly payment for a variable payout has been determined in
accordance with the provisions of this Contract, a number of Annuity Units is
determined by dividing that first monthly payment by the appropriate Variable
Account Annuity Unit value on the Annuity Start Date.

Once variable payments begin, the number of Annuity Units remains fixed with
respect to a Variable Account. If the Contract Owner elects by Written Request
to exchange Annuity Units of one Variable Account for those of another Variable
Account, the number will change effective with that election but will remain
fixed in number following such election. The method of calculating the Annuity
Unit value is described under the Separate Account Provisions.

The dollar amount of the second and subsequent variable payments is not
predetermined and may increase or decrease from period to period. The actual
amount of each variable payment after the first is determined by multiplying
the number of Annuity Units by the Annuity Unit values described in the
Separate Account Provisions. Neither expenses actually incurred by Us, other
than taxes on the investment return, nor mortality actually experienced, shall
adversely affect the dollar amount of variable annuity payments to any
annuitant for whom variable annuity payments have commenced.

FIXED PAYOUT

We guarantee interest under all fixed payout plans at a minimum rate of 3% a
year. We may increase the interest rate above the minimum. Monthly payments
on Life Income Plans will be based on the interest rate in effect on the due
date of the first payment. The 1983 Mortality Table a

- 24 -
<PAGE> 25
(ALB) with 12 years mortality improvement of projection Scale G, will be used
to calculate the rates for the tables of guaranteed payout rates.

CHOOSING A PAYOUT PLAN

You may choose or change a payout plan any time before the Annuity Start Date.
The choice must be in writing and in a form satisfactory to Us. The minimum
amount which may be applied under a payout plan is $2,000. Any choice
involving more than one payout plan must have Our approval.

If You do not elect a payout plan by the Annuity Start Date, We will apply the
adjusted Contract Value, less any applicable Withdrawal Charges, under Life
Income Plan A with payments guaranteed for 10 years. The Contract Value will
be allocated to a fixed and variable payout in the same proportion that Your
interest in the Fixed and Variable Accounts bears to the total Contract Value.
When a Payee who is entitled to a payment in one sum chooses a payout plan, the
rights of all other Beneficiaries end. Any amount payable when a Payee dies
will be paid in one sum to the Payee's estate unless the Payee has named a
Successor Payee.

Each payment must be at least $20. We may change the number of payments We
make in a year so that each payment is at least $20.

DATE OF PAYMENT

The first payment under any payout plan will be made on the fifteenth day of
the month immediately following Your selection of a plan. Subsequent payments
shall be made on the fifteenth day of each subsequent month in accordance with
the manner of payment selected.

SECTION 11 - GENERAL PROVISIONS

CHANGE IN THE OPERATION OF THE SEPARATE ACCOUNT

Any change in the Plan of Operation will be filed with the Insurance Department
of the State of New York as required by New York Insurance Law.

We may create new separate accounts; combine separate accounts, including the
Separate Account; add new Variable Accounts to or remove existing Variable
Accounts from the Separate Account or combine Variable Accounts; make new
Variable Accounts or other Variable Accounts available to such classes of
Contracts as We may determine; add new Funds or remove existing Funds; if
shares of a Fund are no longer available for investment or if We determine that
investment in a Fund is no longer appropriate in light of the purposes of the
Separate Account, substitute a different Fund for any existing Fund;
de-register the Separate Account under the Investment Company Act of 1940 in
the event registration is no longer required; operate the Separate Account as a
management investment company under the Investment Company Act of 1940 or as
any other form permitted by law; and make any changes to the Separate Account
or its operations as may be required by the Investment Company Act of 1940 or
other applicable law or regulations. The Company will not transfer any
investment, or asset held for investment, between separate accounts or between
separate

- 25 -
<PAGE> 26
and other accounts, provided that the Superintendent of the New York Department
of Insurance may authorize transfers in circumstances where such transfers
would not be inequitable.

CREDITOR'S CLAIMS

All payments under the Contract will be exempt from the claims of creditors and
legal process to the extent permitted by law. No payment will be transferred,
assigned or withdrawn before it becomes payable unless We agree.

INCONTESTABILITY

The Contract will be incontestable from the Date of Issue.

INCORRECT AGE OR SEX

If the Annuitant's age or sex has been misstated, the amount of the annuity
payable by the Company shall be that provided by that portion of the amounts
allocated to effect such annuity on the basis of the corrected information
without changing the date of the first payments of such annuity. If we make
any underpayment or overpayment on account of any such misstatement, the amount
thereof, with interest at 3 per cent (3%) per annum, shall be credited to or
charged against, the current or next succeeding payment or payments to be made
by Us under the Contract.

MODIFICATION OF CONTRACT

Any change in the Contract or waiver of its provisions must be in writing and
signed by Our President, a Vice President, Our Secretary or Assistant
Secretary. No other person can change or waive any of its provisions.

Upon notice to You, the Company may modify the Contract, if necessary, to
permit the Contract or the Separate Account to comply with any applicable law
or regulation issued by a government agency or if necessary to assure continued
qualification of the contract under the Internal Revenue Code or other federal
or state laws relating to retirement annuities or variable annuities contracts;
or if necessary to effect a change in the operation of the Separate Account; or
if the modification provides additional investment options.

In the event of such modifications, the Company will make the appropriate
endorsement to the Contract.

NON-PARTICIPATING

This Contract does not participate in surplus earnings.

- 26 -
<PAGE> 27
PROOF OF FACTS

We may ask any person claiming the right to payments for proof satisfactory to
Us of such person's age, sex and right to payment. Any payments We make
relying on that proof discharge Us from any obligation to make that payment to
another person.

REPORTS TO THE OWNER

We will provide You with a report showing the Contract Values at least once
each year. We will also provide You an annual report of the Separate Account
and any other notice or report required by law to be delivered to Owners. All
reports and notices will be sent to Your last known address.

SUBMISSION OF CONTRACT

We may ask You to relinquish the Contract or send it to Us for endorsement
before We make any payment. Failure to have You surrender the Contract or note
payment on it does not indicate that We have not made payment.

VOTING PRIVILEGES

So long as Federal law requires, We will give You certain voting privileges.
As Contract Owner, if You have voting privileges, We will send a notice to You
telling You the time and place of a shareholder meeting. The notice will also
explain the matter to be voted upon and how many votes You get.

- 27 -
<PAGE> 28
SECTION 12 - TABLES

FIXED PERIOD MINIMUM INCOME TABLE*

MONTHLY PAYMENTS FOR EACH $1,000 APPLIED

<TABLE>
<CAPTION>
==================================================================================================================================
NUMBER MONTHLY NUMBER MONTHLY NUMBER MONTHLY
OF YEARS INSTALLMENTS OF YEARS INSTALLMENTS OF YEARS INSTALLMENTS
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 84.47 11 8.86 21 5.32
2 42.86 12 8.24 22 5.15
3 28.99 13 7.71 23 4.99
4 22.06 14 7.26 24 4.84
5 17.91 15 6.87 25 4.71

6 15.14 16 6.53 26 4.59
7 13.16 17 6.23 27 4.47
8 11.68 18 5.96 28 4.37
9 10.53 19 5.73 29 4.27
10 9.61 20 5.51 30 4.18
==================================================================================================================================
</TABLE>

*Values are based on compound interest at 3.0% a year. Other rates are
available on request.

- 28 -
<PAGE> 29
ONE LIFE MINIMUM INCOME TABLE*

MONTHLY PAYMENTS FOR EACH $1,000 APPLIED

<TABLE>
<CAPTION>
====================================================================================
Age of Payee Life Only Income Life 10 Years Certain Life 20 Years Certain
Last -----------------------------------------------------------------
Birthday Male Female Male Female Male Female
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
50 4.17 3.82 4.13 3.81 4.01 3.76
51 4.24 3.88 4.20 3.87 4.07 3.81
52 4.32 3.95 4.27 3.93 4.13 3.86
53 4.40 4.01 4.35 3.99 4.19 3.92
54 4.49 4.08 4.43 4.06 4.25 3.97
55 4.58 4.15 4.51 4.13 4.31 4.03
56 4.67 4.23 4.60 4.20 4.37 4.09
57 4.78 4.31 4.70 4.28 4.44 4.15
58 4.88 4.40 4.80 4.36 4.50 4.22
59 5.00 4.49 4.90 4.44 4.57 4.29
60 5.12 4.59 5.01 4.54 4.63 4.35
61 5.26 4.69 5.13 4.63 4.70 4.42
62 5.40 4.80 5.25 4.73 4.77 4.49
63 5.55 4.92 5.37 4.84 4.83 4.57
64 5.71 5.04 5.51 4.95 4.89 4.64
65 5.89 5.18 5.65 5.07 4.95 4.71
66 6.07 5.32 5.79 5.20 5.01 4.78
67 6.27 5.47 5.94 5.33 5.07 4.85
68 6.48 5.64 6.10 5.48 5.12 4.92
69 6.71 5.82 6.26 5.62 5.17 4.99
70 6.95 6.01 6.42 5.78 5.22 5.05
71 7.20 6.22 6.59 5.94 5.26 5.11
72 7.47 6.44 6.76 6.11 5.30 5.17
73 7.76 6.68 6.93 6.29 5.33 5.22
74 8.07 6.94 7.11 6.48 5.36 5.27
75 8.41 7.23 7.29 6.67 5.39 5.31
76 8.76 7.53 7.46 6.86 5.42 5.35
77 9.15 7.86 7.64 7.06 5.44 5.38
78 9.56 8.22 7.81 7.26 5.45 5.40
79 9.99 8.60 7.98 7.46 5.47 5.43
80 10.46 9.02 8.14 7.66 5.48 5.45
81 10.96 9.47 8.29 7.85 5.49 5.46
82 11.49 9.96 8.44 8.04 5.49 5.48
83 12.05 10.49 8.58 8.22 5.50 5.49
84 12.65 11.06 8.71 8.39 5.50 5.49
85 13.29 11.67 8.83 8.55 5.51 5.50
86 13.97 12.34 8.95 8.69 5.51 5.50
87 14.69 13.05 9.05 8.83 5.51 5.51
88 15.46 13.82 9.14 8.95 5.51 5.51
89 16.27 14.62 9.22 9.05 5.51 5.51
90 17.14 15.47 9.30 9.15 5.51 5.51
====================================================================================
</TABLE>

*Values are based on compound interest at 3.0% a year. Other rates are
available on request.

- 29 -
<PAGE> 30
JOINT & SURVIVOR WITH 10 YEAR CERTAIN TABLE*
MONTHLY PAYMENTS FOR EACH $1,000 APPLIED

<TABLE>
<CAPTION>
==================================================================================================================================
Number of Years Younger Number of Years Older
- ------------------------------------------------------------------------------------ Same ----------------------------------
Female: 7 6 5 4 3 2 1 Age 1 2 3
- ----------------------------------------------------------------------------------------------------------------------------------
Male Age:
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 3.36 3.38 3.41 3.44 3.46 3.49 3.52 3.55 3.57 3.60 3.63
51 3.39 3.42 3.45 3.48 3.51 3.53 3.56 3.59 3.62 3.65 3.68
52 3.43 3.46 3.49 3.52 3.55 3.58 3.61 3.64 3.67 3.70 3.73
53 3.47 3.50 3.53 3.56 3.60 3.63 3.66 3.69 3.72 3.75 3.79
54 3.51 3.55 3.58 3.61 3.64 3.68 3.71 3.74 3.78 3.81 3.84
55 3.56 3.59 3.63 3.66 3.70 3.73 3.77 3.80 3.84 3.87 3.91
56 3.60 3.64 3.68 3.71 3.75 3.79 3.82 3.86 3.90 3.94 3.97
57 3.65 3.69 3.73 3.77 3.81 3.84 3.88 3.92 3.96 4.00 4.04
58 3.70 3.74 3.78 3.82 3.87 3.91 3.95 3.99 4.03 4.07 4.12
59 3.76 3.80 3.84 3.89 3.93 3.97 4.02 4.06 4.11 4.15 4.19
60 3.82 3.86 3.90 3.95 4.00 4.04 4.09 4.14 4.18 4.23 4.28
61 3.88 3.92 3.97 4.02 4.07 4.12 4.17 4.22 4.27 4.32 4.37
62 3.94 3.99 4.04 4.09 4.14 4.19 4.25 4.30 4.35 4.41 4.46
63 4.01 4.06 4.11 4.17 4.22 4.28 4.33 4.39 4.45 4.50 4.56
64 4.08 4.13 4.19 4.25 4.31 4.37 4.43 4.49 4.55 4.60 4.66
65 4.15 4.21 4.27 4.33 4.40 4.46 4.52 4.59 4.65 4.71 4.78
66 4.23 4.30 4.36 4.43 4.49 4.56 4.63 4.69 4.76 4.83 4.90
67 4.32 4.39 4.45 4.52 4.59 4.66 4.74 4.81 4.88 4.95 5.02
68 4.41 4.48 4.55 4.63 4.70 4.78 4.85 4.93 5.01 5.08 5.16
69 4.50 4.58 4.66 4.74 4.81 4.90 4.98 5.06 5.14 5.22 5.30
70 4.61 4.69 4.77 4.85 4.94 5.02 5.11 5.19 5.28 5.37 5.45
71 4.71 4.80 4.89 4.97 5.06 5.16 5.25 5.34 5.43 5.52 5.61
72 4.83 4.92 5.01 5.11 5.20 5.30 5.40 5.49 5.59 5.69 5.78
73 4.95 5.04 5.14 5.24 5.35 5.45 5.55 5.66 5.76 5.86 5.96
74 5.08 5.18 5.28 5.39 5.50 5.61 5.72 5.83 5.93 6.04 6.14
75 5.21 5.32 5.43 5.55 5.66 5.78 5.89 6.01 6.12 6.23 6.34
==================================================================================================================================
</TABLE>

*Values are based on compound interest at 3.0% a year. Other rates not shown
will be provided on request.
BANKERS LIFE INSURANCE COMPANY OF NEW YORK

- 30 -
<PAGE> 31
65 Froehlich Farm Boulevard
Woodbury, New York 11797

FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY CONTRACT
NON-PARTICIPATING
FLEXIBLE PREMIUM
INCOME PAYABLE AT MATURITY
DEATH BENEFIT PAYABLE IN THE EVENT OF THE ANNUITANT'S DEATH PRIOR TO MATURITY

For service or information about Your policy, contact the SERVICE CENTER, P. O.
Box 29105, Overland Park, KS 66201 or contact Your agent.

- 31 -

<PAGE> 1
EXHIBIT 4(c)

BANKERS LIFE INSURANCE COMPANY OF NEW YORK
ENDORSEMENT FOR ROTH INDIVIDUAL RETIREMENT ANNUITY

This endorsement is attached to and made a part of this Contract. Where a
provision of the endorsement conflicts with a provision of the Contract, the
provision of the endorsement will govern. This endorsement applies only if the
application states this Contract is a Roth Individual Retirement Annuity (Roth
IRA).

This Contract is issued as a Roth Individual Retirement Annuity under Section
408A of the Internal Revenue Code (Code). To qualify, Your Contract must meet
the following requirements:

1. You may not change ownership of this Contract at any time.

2. Your entire interest in the Contract is nonforfeitable. It is established for
the exclusive benefit of You or Your beneficiaries.

3. Your Contract is not transferable and may not be used as security for a loan.

4. You must be the Annuitant, and no joint owner or contingent owner is
permitted.

5. If this Roth IRA is not designated as a Roth Conversion IRA, then, except in
the case of a rollover contribution described in section 408A(e), We will accept
only cash contributions and only up to a maximum amount of $2,000 for any tax
year. If this Roth IRA is designated as a Roth Conversion IRA, no contributions
other than IRA Conversion Contributions made during the same tax year will be
accepted.
A Roth Conversion IRA is a Roth IRA that accepts only IRA Conversion
Contributions made during the same tax year. IRA Conversion Contributions are
amounts rolled over, transferred, or considered transferred from a nonRoth IRA
to Roth IRA. A nonRoth IRA is an individual retirement account or annuity
described in section 408(a) or 408(b), other than a Roth IRA.

6. The $2,000 limit described in Paragraph 5 is gradually reduced to $0 between
certain levels of adjusted gross income (AGI). If You are single, the $2,000
annual contribution is phased out between AGI of $95,000 and $110,000; if You
are married and file jointly, between AGI of $150,000 and $160,000; and if You
are married and file separately, between $0 and $10,000. In the case of a
conversion, We will not accept IRA Conversion Contributions in a tax year if
Your AGI for that tax year exceeds $100,000 or if You are married and file a
separate return. Adjusted gross income is defined in section 408A(c)(3) and does
not include IRA Conversion Contributions.

7. In the event of Your death, Your entire interest in this Contract must be
distributed in conformity with the regulations described below. The Contract's
provisions relating to the death of the Annuitant/Owner are changed to the
extent necessary to conform with those regulations.

IRA-R98 BL PAGE 1
<PAGE> 2
If You die before Your entire interest is distributed to You, and Your surviving
spouse is not the sole beneficiary, the entire remaining interest will, at Your
election or, if You have not so elected, at the election of the beneficiary or
beneficiaries, either:

(a) Be distributed by December 31 of the year containing the fifth
anniversary of Your death, or

(b) Be distributed over the life expectancy of the designated beneficiary
starting no later than December 31 of the year following the year of
Your death.

If distributions do not begin by the date described in (b), distribution method
(a) will apply.

In the case of distribution method (b) above, to determine the minimum annual
payment for each year, divide Your entire interest in the Contract as of the
close of business on December 31 of the preceding year by the life expectancy of
the designated beneficiary using the attained age of the designated beneficiary
as of the beneficiary's birthday in the year distributions are required to
commence and subtract 1 for each subsequent year.

If Your spouse is the sole beneficiary on Your date of death, he or she will
then be treated as the Owner.

8. You agree to provide Us with information necessary for Us to prepare any
reports required under sections 408(i) and 408A(d)(3)(E), Regulations sections
1.408-5 and 1.408-6, and under guidance published by the Internal Revenue
Service. We agree to submit reports to the Internal Revenue Service and You
prescribed by the Internal Revenue Service.

9. You will have the sole responsibility for determining that contributions,
transfers and distributions under this Contract comply with the Code and this
endorsement. We shall not be responsible for any penalties, taxes, judgments or
expenses You incur in connection with this IRA, and We shall have no duty to
determine whether any contributions to or distributions from this IRA comply
with the Code, regulations or rulings.

We retain the right to further amend the Contract at any time without Your
consent as necessary to conform with changes in the Code or regulations or
rulings related thereto.

BANKERS LIFE INSURANCE COMPANY OF NEW YORK

/s/ LISA P. FOXWORTHY-PARKER

SECRETARY

IRA-R98 BL PAGE 2

<PAGE> 1

EXHIBIT 8(a)

PARTICIPATION AGREEMENT

Among

VARIABLE INSURANCE PRODUCTS FUND

FIDELITY DISTRIBUTORS CORPORATION

and

BANKERS LIFE INSURANCE COMPANY OF NEW YORK

THIS AGREEMENT, made and entered into as of the _____ day of __________,
1998 by and among BANKERS LIFE INSURANCE COMPANY OF NEW YORK, (hereinafter the
"Company"), a New York corporation, on its own behalf and on behalf of each
segregated asset account of the Company set forth on Schedule A hereto as may be
amended from time to time (each such account hereinafter referred to as the
"Account"), and the VARIABLE INSURANCE PRODUCTS FUND, an unincorporated business
trust organized under the laws of the Commonwealth of Massachusetts (hereinafter
the "Fund") and FIDELITY DISTRIBUTORS CORPORATION (hereinafter the
"Underwriter"), a Massachusetts corporation.

WHEREAS, the Fund engages in business as an open-end management
investment company and is available to act as the investment vehicle for
separate accounts established for variable life insurance policies and variable
annuity contracts (collectively, the "Variable Insurance Products") to be
offered by insurance companies which have entered into participation agreements
with the Fund and the Underwriter (hereinafter "Participating Insurance
Companies"); and

WHEREAS, the beneficial interest in the Fund is divided into several
series of shares, each representing the interest in a particular managed
portfolio of securities and other assets, any one or more of which may be made
available under this Agreement, as may be amended from time to time by mutual
agreement of the parties hereto (each such series hereinafter referred to as a
"Portfolio"); and

WHEREAS, the Fund has obtained an order from the Securities and Exchange
Commission, dated October 15, 1985 (File No. 812-6102), granting Participating
Insurance Companies and variable annuity and variable life insurance separate
accounts exemptions from the provisions of sections 9(a), 13(a), 15(a), and
15(b) of the Investment Company Act of 1940, as amended, (hereinafter the "1940
Act") and Rules 6e-2(b) (15) and 6e-3(T) (b) (15) thereunder, to the extent
necessary to permit shares of the Fund to be sold to and held by variable
annuity and variable life insurance separate accounts of both affiliated and
unaffiliated life insurance companies (hereinafter the "Shared Funding Exemptive
Order"); and

1
<PAGE> 2

WHEREAS, the Fund is registered as an open-end management investment
company under the 1940 Act and its shares are registered under the Securities
Act of 1933, as amended (hereinafter the "1933 Act"); and

WHEREAS, Fidelity Management & Research Company (the "Adviser") is duly
registered as an investment adviser under the federal Investment Advisers Act of
1940 and any applicable state securities law; and

WHEREAS, the Company has registered or will register certain variable
life insurance and variable annuity contracts under the 1933 Act; and

WHEREAS, each Account is a duly organized, validly existing segregated
asset account, established by resolution of the Board of Directors of the
Company, on the date shown for such Account on Schedule A hereto, to set aside
and invest assets attributable to the aforesaid variable annuity or variable
life contracts; and

WHEREAS, the Company has registered or will register each Account as a
unit investment trust under the 1940 Act; and

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

WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Portfolios on behalf
of each Account to fund certain of the aforesaid variable life and variable
annuity contracts and the Underwriter is authorized to sell such shares to unit
investment trusts such as each Account at net asset value;

NOW, THEREFORE, in consideration of their mutual promises, the Company,
the Fund and the Underwriter agree as follows:

ARTICLE I

Sale of Fund Shares

1.1. The Underwriter agrees to sell to the Company those shares of the
Fund which each Account orders, executing such orders on a daily basis at the
net asset value next computed after receipt by the Fund or its designee of the
order for the shares of the Fund. For purposes of this Section 1.1, the Company
shall be the designee of the Fund for receipt of such orders from each Account
and receipt by such designee shall constitute receipt by the Fund; provided that
the Fund receives notice of such order by 9:00 a.m. Boston time on the next
following Business Day. "Business Day" shall mean any day on which the New York
Stock Exchange is open for trading and on which the Fund calculates its net
asset value pursuant to the rules of the Securities and Exchange Commission.

2
<PAGE> 3

1.2. The Fund agrees to make its shares available indefinitely for
purchase at the applicable net asset value per share by the Company and its
Accounts on those days on which the Fund calculates its net asset value pursuant
to rules of the Securities and Exchange Commission and the Fund shall use
reasonable efforts to calculate such net asset value on each day which the New
York Stock Exchange is open for trading. Notwithstanding the foregoing, the
Board of Trustees of the Fund (hereinafter the "Board") may refuse to sell
shares of any Portfolio to any person, or suspend or terminate the offering of
shares of any Portfolio if such action is required by law or by regulatory
authorities having jurisdiction or is, in the sole discretion of the Board
acting in good faith and in light of their fiduciary duties under federal and
any applicable state laws, necessary in the best interests of the shareholders
of such Portfolio.

1.3. The Fund and the Underwriter agree that shares of the Fund will be
sold only to Participating Insurance Companies and their separate accounts. No
shares of any Portfolio will be sold to the general public.

1.4. The Fund and the Underwriter will not sell Fund shares to any
insurance company or separate account unless an agreement containing provisions
substantially the same as Articles I, III, V, VII and Section 2.5 of Article II
of this Agreement is in effect to govern such sales.

1.5. The Fund agrees to redeem for cash, on the Company's request, any
full or fractional shares of the Fund held by the Company, executing such
requests on a daily basis at the net asset value next computed after receipt by
the Fund or its designee of the request for redemption. For purposes of this
Section 1.5, the Company shall be the designee of the Fund for receipt of
requests for redemption from each Account and receipt by such designee shall
constitute receipt by the Fund; provided that the Fund receives notice of such
request for redemption on the next following Business Day.

1.6. The Company agrees that purchases and redemptions of Portfolio
shares offered by the then current prospectus of the Fund shall be made in
accordance with the provisions of such prospectus. The Company agrees that all
net amounts available under the variable annuity contracts with the form
number(s) which are listed on Schedule A attached hereto and incorporated herein
by this reference, as such Schedule A may be amended from time to time hereafter
by mutual written agreement of all the parties hereto, (the "Contracts") shall
be invested in the Fund, in such other Funds advised by the Adviser as may be
mutually agreed to in writing by the parties hereof, or in the Company's general
account, provided that such amounts may also be invested in an investment
company other than the Fund if (a) such other investment company, or series
thereof, has investment objectives or policies that are substantially different
from the investment objectives and policies of all the Portfolios of the Fund
which are actually used by the Company to fund the Contracts; or (b) the Company
gives the Fund and the Underwriter 45 days written notice of its intention to
make such other investment company available as a funding vehicle for the
Contracts; or (c) such other investment company was available as a funding
vehicle for the Contracts prior to the date of this Agreement and the Company so
informs the Fund and Underwriter prior to their signing this Agreement (a list
of

3
<PAGE> 4

such funds appearing on Schedule C to this Agreement); or (d) the Fund or
Underwriter consents to the use of such other investment company.

1.7. The Company shall pay for Fund shares on the next Business Day after
an order to purchase Fund shares is made in accordance with the provisions of
Section 1.1 hereof. Payment shall be in federal funds transmitted by wire. For
purpose of Section 2.10 and 2.11, upon receipt by the Fund of the federal funds
so wired, such funds shall cease to be the responsibility of the Company and
shall become the responsibility of the Fund.

1.8. Issuance and transfer of the Fund's shares will be by book entry
only. Stock certificates will not be issued to the Company or any Account.
Shares ordered from the Fund will be recorded in an appropriate title for each
Account or the appropriate subaccount of each Account.

1.9. The Fund shall furnish same day notice (by wire or telephone,
followed by written confirmation) to the Company of any income, dividends or
capital gain distributions payable on the Fund's shares. The Company hereby
elects to receive all such income dividends and capital gain distributions as
are payable on the Portfolio shares in additional shares of that Portfolio. The
Company reserves the right to revoke this election and to receive all such
income dividends and capital gain distributions in cash. The Fund shall notify
the Company of the number of shares so issued as payment of such dividends and
distributions.

1.10. The Fund shall make the net asset value per share for each
Portfolio available to the Company on a daily basis as soon as reasonably
practical after the net asset value per share is calculated (normally by 6:30
p.m. Boston time) and shall use its best efforts to make such net asset value
per share available by 7 p.m. Boston time.

ARTICLE II

Representations and Warranties

2.1. The Company represents and warrants that the Contracts are or will
be registered under the 1933 Act; that the Contracts will be issued and sold in
compliance in all material respects with all applicable Federal and State laws
and that the sale of the Contracts shall comply in all material respects with
state insurance suitability requirements. The Company further represents and
warrants that it is an insurance company duly organized and in good standing
under applicable law and that it has legally and validly established each
Account prior to any issuance or sale thereof as a segregated asset account
under Section 4240 of the New York Insurance Code and has registered or, prior
to any issuance or sale of the Contracts, will register each Account as a unit
investment trust in accordance with the provisions of the 1940 Act to serve as a
segregated investment account for the Contracts.

2.2. The Fund represents and warrants that Fund shares sold pursuant
to this Agreement shall be registered under the 1933 Act, duly authorized for
issuance and sold in

4
<PAGE> 5

compliance with the laws of the State of New York and all applicable federal
and state securities laws and that the Fund is and shall remain registered under
the 1940 Act. The Fund shall amend the Registration Statement for its shares
under the 1933 Act and the 1940 Act from time to time as required in order to
effect the continuous offering of its shares. The Fund shall register and
qualify the shares for sale in accordance with the laws of the various states
only if and to the extent deemed advisable by the Fund or the Underwriter.

2.3. The Fund represents that it is currently qualified as a Regulated
Investment Company under Subchapter M of the Internal Revenue Code of 1986, as
amended, (the "Code") and that it will make every effort to maintain such
qualification (under Subchapter M or any successor or similar provision) and
that it will notify the Company immediately upon having a reasonable basis for
believing that it has ceased to so qualify or that it might not so qualify in
the future.

2.4. So long as the Fund complies with the diversification requirements
noted in Article VI, the Company represents that the Contracts are currently
treated as endowment, annuity or life insurance contracts, under applicable
provisions of the Code and that it will make every effort to maintain such
treatment and that it will notify the Fund and the Underwriter immediately upon
having a reasonable basis for believing that the Contracts have ceased to be so
treated or that they might not be so treated in the future.

2.5. (a) With respect to Initial Class shares, the Fund currently does
not intend to make any payments to finance distribution expenses pursuant to
Rule 12b-1 under the 1940 Act or otherwise, although it may make such payments
in the future. The Fund has adopted a "no fee" or "defensive" Rule 12b-1 Plan
under which it makes no payments for distribution expenses. To the extent that
it decides to finance distribution expenses pursuant to Rule 12b-1, the Fund
undertakes to have a board of trustees, a majority of whom are not interested
persons of the Fund, formulate and approve any plan under Rule 12b-1 to finance
distribution expenses.

(b) With respect to Service Class shares, the Fund has adopted
a Rule 12b-1 Plan under which it makes payments to finance distribution
expenses. The Fund represents and warrants that it has a board of trustees, a
majority of whom are not interested persons of the Fund, which has formulated
and approved the Fund's Rule 12b-1 Plan to finance distribution expenses of the
Fund and that any changes to the Fund's Rule 12b-1 Plan will be approved by a
similarly constituted board of trustees.

2.6. The Fund makes no representation as to whether any aspect of its
operations (including, but not limited to, fees and expenses and investment
policies) complies with the insurance laws or regulations of the various states
except that the Fund represents that the Fund's investment policies, fees and
expenses are and shall at all times remain in compliance with the laws of the
State of New York and the Fund and the Underwriter represent that their
respective operations are and shall at all times remain in material compliance
with the laws of the State of New York to the extent required to perform this
Agreement.

2.7. The Underwriter represents and warrants that it is a member in good

5
<PAGE> 6

standing of the NASD and is registered as a broker-dealer with the SEC. The
Underwriter further represents that it will sell and distribute the Fund shares
in accordance with the laws of the State of New York and all applicable state
and federal securities laws, including without limitation the 1933 Act, the 1934
Act, and the 1940 Act.

2.8. The Fund represents that it is lawfully organized and validly
existing under the laws of the Commonwealth of Massachusetts and that it does
and will comply in all material respects with the 1940 Act.

2.9. The Underwriter represents and warrants that the Adviser is and
shall remain duly registered in all material respects under all applicable
federal and state securities laws and that the Adviser shall perform its
obligations for the Fund in compliance in all material respects with the laws of
the State of New York and any applicable state and federal securities laws.

2.10. The Fund and Underwriter represent and warrant that all of their
directors, officers, employees, investment advisers, and other
individuals/entities dealing with the money and/or securities of the Fund are
and shall continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Fund in an amount not less than the
minimal coverage as required currently by Rule 17g-(1) of the 1940 Act or
related provisions as may be promulgated from time to time. The aforesaid Bond
shall include coverage for larceny and embezzlement and shall be issued by a
reputable bonding company.

2.11. The Company represents and warrants that all of its directors,
officers, employees, investment advisers, and other individuals/entities dealing
with the money and/or securities of the Fund are covered by a blanket fidelity
bond or similar coverage, and that said bond is issued by a reputable bonding
company, includes coverage for larceny and embezzlement, and is in an amount not
less than $5 million. The Company agrees that any amounts received under such
bond in connection with claims that arise from the arrangements described in
this Agreement will be held by the Company for the benefit of the Fund. The
Company agrees to make all reasonable efforts to see that this bond or another
bond containing these provisions is always in effect, and agrees to notify the
Fund and the Underwriter in the event that such coverage no longer applies.

ARTICLE III

Prospectuses and Proxy Statements: Voting

3.1. The Underwriter shall provide the Company with as many printed
copies of the Fund's current prospectus and Statement of Additional Information
as the Company may reasonably request. If requested by the Company in lieu
thereof the Fund shall provide camera-ready film or computer diskettes
containing the Fund's prospectus and Statement of Additional Information, and
such other assistance as is reasonably necessary in order for the Company once
each year (or more frequently if the prospectus and/or Statement of Additional
Information for the Fund is amended during the year) to have the prospectus for
the Contracts and the Fund's

6
<PAGE> 7

prospectus printed together in one document, and to have the Statement of
Additional Information for the Fund and the Statement of Additional Information
for the Contracts printed together in one document. Alternatively, the Company
may print the Fund's prospectus and/or its Statement of Additional Information
in combination with other fund companies' prospectuses and statements of
additional information. The Fund currently intends to create a separate
prospectus for each Portfolio, but does not guarantee that such prospectuses
will be generated in any particular year.

Except as provided in the following three sentences, all expenses of printing
and distributing Fund prospectuses and Statements of Additional Information
shall be the expense of the Company. For prospectuses and Statements of
Additional Information provided by the Company to its existing owners of
Contracts in order to update disclosure as required by the 1933 Act and/or the
1940 Act, the cost of printing shall be borne by the Fund. If the Company
chooses to receive camera-ready film or computer diskettes in lieu of receiving
printed copies of the Fund's prospectus, the Fund will reimburse the Company in
an amount equal to the product of A and B where A is the number of such
prospectuses distributed to owners of the Contracts, and B is the Fund's per
unit cost of typesetting and printing the Fund's prospectus. The same procedures
shall be followed with respect to the Fund's Statement of Additional
Information.

The Company agrees to provide the Fund or its designee with such
information as may be reasonably requested by the Fund to assure that the Fund's
expenses do not include the cost of printing any prospectuses or Statements of
Additional Information other than those actually distributed to existing owners
of the Contracts.

3.2. The Fund's prospectus shall state that the Statement of Additional
Information for the Fund is available from the Underwriter or the Company (or in
the Fund's discretion, the Prospectus shall state that such Statement is
available from the Fund).

3.3. The Fund, at its expense, shall provide the Company with copies of
its proxy statements, reports to shareholders, and other communications (except
for prospectuses and Statements of Additional Information, which are covered in
Section 3.1) to shareholders in such quantity as the Company shall reasonably
require for distributing to Contract owners.

3.4. If and to the extent required by law the Company shall:

(i) solicit voting instructions from Contract owners;

(ii) vote the Fund shares in accordance with instructions
received from Contract owners; and

(iii) vote Fund shares for which no instructions have been
received in a particular separate account in the same
proportion as Fund shares of such portfolio for which
instructions have been received in that separate
account,

7
<PAGE> 8

so long as and to the extent that the Securities and Exchange Commission
continues to interpret the 1940 Act to require pass-through voting privileges
for variable contract owners. The Company reserves the right to vote Fund shares
held in any segregated asset account in its own right, to the extent permitted
by law. Participating Insurance Companies shall be responsible for assuring that
each of their separate accounts participating in the Fund calculates voting
privileges in a manner consistent with the standards set forth on Schedule B
attached hereto and incorporated herein by this reference, which standards will
also be provided to the other Participating Insurance Companies.

3.5. The Fund will comply with all provisions of the 1940 Act requiring
voting by shareholders, and in particular the Fund will either provide for
annual meetings or comply with Section 16(c) of the 1940 Act (although the Fund
is not one of the trusts described in Section 16(c) of that Act) as well as with
Sections 16(a) and, if and when applicable, 16(b). Further, the Fund will act in
accordance with the Securities and Exchange Commission's interpretation of the
requirements of Section 16(a) with respect to periodic elections of trustees and
with whatever rules the Commission may promulgate with respect thereto.

ARTICLE IV

Sales Material and Information

4.1. The Company shall furnish, or shall cause to be furnished, to the
Fund or its designee, each piece of sales literature or other promotional
material in which the Fund or its investment adviser or the Underwriter is
named, at least fifteen Business Days prior to its use. No such material shall
be used if the Fund or its designee reasonably objects to such use within
fifteen Business Days after receipt of such material.

4.2. The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund in
connection with the sale of the Contracts other than the information or
representations contained in the registration statement or prospectus for the
Fund shares, as such registration statement and prospectus may be amended or
supplemented from time to time, or in reports or proxy statements for the Fund,
or in sales literature or other promotional material approved by the Fund or its
designee or by the Underwriter, except with the permission of the Fund or the
Underwriter or the designee of either.

4.3. The Fund, Underwriter, or its designee shall furnish, or shall cause
to be furnished, to the Company or its designee, each piece of sales literature
or other promotional material in which the Company and/or its separate
account(s), is named at least fifteen Business Days prior to its use. No such
material shall be used if the Company or its designee reasonably objects to such
use within fifteen Business Days after receipt of such material.

8
<PAGE> 9

supplemented from time to time, or in published reports for each Account which
are in the public domain or approved by the Company for distribution to Contract
owners, or in sales literature or other promotional material approved by the
Company or its designee, except with the permission of the Company.

4.5. The Fund will provide to the Company at least one complete copy of
all registration statements, prospectuses, Statements of Additional Information,
reports, proxy statements, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and all amendments
to any of the above, that relate to the Fund or its shares, contemporaneously
with the filing of such document with the Securities and Exchange Commission or
other regulatory authorities.

4.6. The Company will provide to the Fund at least one complete copy of
all registration statements, prospectuses, Statements of Additional Information,
reports, solicitations for voting instructions, sales literature and other
promotional materials, applications for exemptions, requests for no action
letters, and all amendments to any of the above, that relate to the Contracts or
each Account, contemporaneously with the filing of such document with the SEC or
other regulatory authorities.

4.7. For purposes of this Article IV, the phrase "sales literature or
other promotional material" includes, but is not limited to, any of the
following that refer to the Fund or any affiliate of the Fund: advertisements
(such as material published, or designed for use in, a newspaper, magazine, or
other periodical, radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, or other public media), sales
literature (i.e., any written communication distributed or made generally
available to customers or the public, including brochures, circulars, research
reports, market letters, form letters, seminar texts, reprints or excerpts of
any other advertisement, sales literature, or published article), educational or
training materials or other communications distributed or made generally
available to some or all agents or employees, and registration statements,
prospectuses, Statements of Additional Information, shareholder reports, and
proxy materials.

ARTICLE V

Fees and Expenses

5.1. The Fund and Underwriter shall pay no fee or other compensation to
the Company under this agreement, except that if the Fund or any Portfolio
adopts and implements a plan pursuant to Rule 12b-1 to finance distribution
expenses, then the Underwriter may make payments to the Company or to the
Underwriter for the Contracts if and in amounts agreed to by the Underwriter in
writing and such payments will be made out of existing fees otherwise payable to
the Underwriter, past profits of the Underwriter or other resources available to
the Underwriter. No such payments shall be made directly by the Fund. Currently,
no such payments are contemplated.

5.2. All expenses incident to performance by the Fund under this
Agreement

9
<PAGE> 10

shall be paid by the Fund. The Fund shall see to it that all its shares are
registered and authorized for issuance in accordance with applicable federal law
and, if and to the extent deemed advisable by the Fund, in accordance with
applicable state laws prior to their sale. The Fund shall bear the expenses for
the cost of registration and qualification of the Fund's shares, preparation and
filing of the Fund's prospectus and registration statement, proxy materials and
reports, setting the prospectus in type, setting in type and printing the proxy
materials and reports to shareholders (including the costs of printing a
prospectus that constitutes an annual report), the preparation of all statements
and notices required by any federal or state law, and all taxes on the issuance
or transfer of the Fund's shares.

5.3. The Company shall bear the expenses of distributing the Fund's
prospectus, proxy materials and reports to owners of Contracts issued by the
Company.

ARTICLE VI

Diversification

6.1. The Fund will at all times invest money from the Contracts in such a
manner as to ensure that the Contracts will be treated as variable contracts
under the Code and the regulations issued thereunder. Without limiting the scope
of the foregoing, the Fund will at all times comply with Section 817(h) of the
Code and Treasury Regulation 1.817-5, relating to the diversification
requirements for variable annuity, endowment, or life insurance contracts and
any amendments or other modifications to such Section or Regulations. In the
event of a breach of this Article VI by the Fund, it will take all reasonable
steps (a) to notify Company of such breach and (b) to adequately diversify the
Fund so as to achieve compliance within the grace period afforded by Regulation
1.817-5.

ARTICLE VII

Potential Conflicts

7.1. The Board will monitor the Fund for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
separate accounts investing in the Fund. An irreconcilable material conflict may
arise for a variety of reasons, including: (a) an action by any state insurance
regulatory authority; (b) a change in applicable federal or state insurance,
tax, or securities laws or regulations, or a public ruling, private letter
ruling, no-action or interpretative letter, or any similar action by insurance,
tax, or securities regulatory authorities; (c) an administrative or judicial
decision in any relevant proceeding; (d) the manner in which the investments of
any Portfolio are being managed; (e) a difference in voting instructions given
by variable annuity contract and variable life insurance contract owners; or (f)
a decision by an insurer to disregard the voting instructions of contract
owners. The Board shall promptly inform the Company if it determines that an
irreconcilable material conflict exists and the implications thereof.

7.2. The Company will report any potential or existing conflicts of which
it is

10
<PAGE> 11

aware to the Board. The Company will assist the Board in carrying out its
responsibilities under the Shared Funding Exemptive Order, by providing the
Board with all information reasonably necessary for the Board to consider any
issues raised. This includes, but is not limited to, an obligation by the
Company to inform the Board whenever contract owner voting instructions are
disregarded.

7.3. If it is determined by a majority of the Board, or a majority of its
disinterested trustees, that a material irreconcilable conflict exists, the
Company and other Participating Insurance Companies shall, at their expense and
to the extent reasonably practicable (as determined by a majority of the
disinterested trustees), take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflict, up to and including: (1)
withdrawing the assets allocable to some or all of the separate accounts from
the Fund or any Portfolio and reinvesting such assets in a different investment
medium, including (but not limited to) another Portfolio of the Fund, or
submitting the question whether such segregation should be implemented to a vote
of all affected Contract owners and, as appropriate, segregating the assets of
any appropriate group (i.e., annuity contract owners, life insurance contract
owners, or variable contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the affected
contract owners the option of making such a change; and (2) establishing a new
registered management investment company or managed separate account.

7.4. If a material irreconcilable conflict arises because of a decision
by the Company to disregard contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Fund's election, to withdraw the affected Account's
investment in the Fund and terminate this Agreement with respect to such
Account; provided, however that such withdrawal and termination shall be limited
to the extent required by the foregoing material irreconcilable conflict as
determined by a majority of the disinterested members of the Board. Any such
withdrawal and termination must take place within six (6) months after the Fund
gives written notice that this provision is being implemented, and until the end
of that six month period the Underwriter and Fund shall continue to accept and
implement orders by the Company for the purchase (and redemption) of shares of
the Fund.

7.5. If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Company conflicts with
the majority of other state regulators, then the Company will withdraw the
affected Account's investment in the Fund and terminate this Agreement with
respect to such Account within six months after the Board informs the Company in
writing that it has determined that such decision has created an irreconcilable
material conflict; provided, however, that such withdrawal and termination shall
be limited to the extent required by the foregoing material irreconcilable
conflict as determined by a majority of the disinterested members of the Board.
Until the end of the foregoing six month period, the Underwriter and Fund shall
continue to accept and implement orders by the Company for the purchase (and
redemption) of shares of the Fund.

7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a
majority of

11
<PAGE> 12

the disinterested members of the Board shall determine whether any
proposed action adequately remedies any irreconcilable material conflict, but in
no event will the Fund be required to establish a new funding medium for the
Contracts. The Company shall not be required by Section 7.3 to establish a new
funding medium for the Contracts if an offer to do so has been declined by vote
of a majority of Contract owners materially adversely affected by the
irreconcilable material conflict. In the event that the Board determines that
any proposed action does not adequately remedy any irreconcilable material
conflict, then the Company will withdraw the Account's investment in the Fund
and terminate this Agreement within six (6) months after the Board informs the
Company in writing of the foregoing determination, provided, however, that such
withdrawal and termination shall be limited to the extent required by any such
material irreconcilable conflict as determined by a majority of the
disinterested members of the Board.

7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or
Rule 6e-3 is adopted, to provide exemptive relief from any provision of the Act
or the rules promulgated thereunder with respect to mixed or shared funding (as
defined in the Shared Funding Exemptive Order) on terms and conditions
materially different from those contained in the Shared Funding Exemptive Order,
then (a) the Fund and/or the Participating Insurance Companies, as appropriate,
shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T),
as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable;
and (b) Sections 3.4, 3.5, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement shall
continue in effect only to the extent that terms and conditions substantially
identical to such Sections are contained in such Rule(s) as so amended or
adopted.

ARTICLE VIII

Indemnification

8.1. Indemnification By The Company

8.1(a). The Company agrees to indemnify and hold harmless the Fund and
each trustee of the Board and officers and each person, if any, who controls the
Fund within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.1) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Company) or litigation (including legal and other
expenses), to which the Indemnified Parties may become subject under any
statute, regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) or settlements
are related to the sale or acquisition of the Fund's shares or the Contracts
and:

12
<PAGE> 13

omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify shall not
apply as to any Indemnified Party if such statement or omission or
such alleged statement or omission was made in reliance upon and
in conformity with information furnished to the Company by or on
behalf of the Fund for use in the Registration Statement or
prospectus for the Contracts or in the Contracts or sales
literature (or any amendment or supplement) or otherwise for use
in connection with the sale of the Contracts or Fund shares; or

(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the
Registration Statement, prospectus or sales literature of the Fund
not supplied by the Company, or persons under its control) or
wrongful conduct of the Company or persons under its control, with
respect to the sale or distribution of the Contracts or Fund
Shares; or

(iii) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a Registration Statement, prospectus,
or sales literature of the Fund or any amendment thereof or
supplement thereto or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statements therein not misleading if such a statement
or omission was made in reliance upon information furnished to the
Fund by or on behalf of the Company; or

(iv) arise as a result of any failure by the Company to provide the
services and furnish the materials under the terms of this
Agreement; or

(v) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this
Agreement or arise out of or result from any other material breach
of this Agreement by the Company, as limited by and in accordance
with the provisions of Sections 8.1(b) and 8.1(c) hereof.

8.1(b). The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations or duties under this Agreement or to
the Fund, whichever is applicable.

13
<PAGE> 14

8.1(c). The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Company in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Company of any
such claim shall not relieve the Company from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Company shall be entitled to participate,
at its own expense, in the defense of such action. The Company also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the Company to such party of the
Company's decision to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and the
Company will not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in connection
with the defense thereof other than reasonable costs of investigation.

8.1(d). The Indemnified Parties will promptly notify the Company of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Fund Shares or the Contracts or the operation of the
Fund.

8.2. Indemnification by the Underwriter

8.2(a). The Underwriter agrees to indemnify and hold harmless the Company
and each of its directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.2) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Underwriter) or litigation (including legal and other
expenses) to which the Indemnified Parties may become subject under any statute,
at common law or otherwise, insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) or settlements are related to the
sale or acquisition of the Fund's shares or the Contracts and:

(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
Registration Statement or prospectus or sales literature of the
Fund (or any amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify shall not
apply as to any Indemnified Party if such statement or omission or
such alleged statement or omission was made in reliance upon and
in conformity with information furnished to the Underwriter or
Fund by or on behalf of the Company for use in the Registration
Statement or prospectus for the Fund

14
<PAGE> 15

or in sales literature (or any amendment or supplement) or
otherwise for use in connection with the sale of the Contracts or
Fund shares; or

(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the
Registration Statement, prospectus or sales literature for the
Contracts not supplied by the Underwriter or persons under its
control) or wrongful conduct of the Fund, Adviser or Underwriter
or persons under their control, with respect to the sale or
distribution of the Contracts or Fund shares; or

(iii) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a Registration Statement, prospectus,
or sales literature covering the Contracts, or any amendment
thereof or supplement thereto, or the omission or alleged omission
to state therein a material fact required to be stated therein or
necessary to make the statement or statements therein not
misleading, if such statement or omission was made in reliance
upon information furnished to the Company by or on behalf of the
Fund; or

(iv) arise as a result of any failure by the Fund to provide the
services and furnish the materials under the terms of this
Agreement (including a failure, whether unintentional or in good
faith or otherwise, to comply with the diversification
requirements specified in Article VI of this Agreement); or

(v) arise out of or result from any material breach of any
representation and/or warranty made by the Underwriter in this
Agreement or arise out of or result from any other material breach
of this Agreement by the Underwriter; as limited by and in
accordance with the provisions of Sections 8.2(b) and 8.2(c)
hereof.

8.2(b). The Underwriter shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
each Company or the Account, whichever is applicable.

15
<PAGE> 16

such action is brought otherwise than on account of this indemnification
provision. In case any such action is brought against the Indemnified Parties,
the Underwriter will be entitled to participate, at its own expense, in the
defense thereof. The Underwriter also shall be entitled to assume the defense
thereof, with counsel satisfactory to the party named in the action. After
notice from the Underwriter to such party of the Underwriter's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Underwriter will not
be liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.

8.2(d). The Company agrees promptly to notify the Underwriter of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Contracts or the
operation of each Account.

8.3. Indemnification By the Fund

8.3(a). The Fund agrees to indemnify and hold harmless the Company, and
each of its directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.3) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Fund) or litigation (including legal and other
expenses) to which the Indemnified Parties may become subject under any statute,
at common law or otherwise, insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) or settlements result from the gross
negligence, bad faith or willful misconduct of the Board or any member thereof,
be related to the operations of the Fund and:

(i) arise as a result of any failure by the Fund to provide the
services and furnish the materials under the terms of this
Agreement (including a failure to comply with the diversification
requirements specified in Article VI of this Agreement); or

as limited by and in accordance with the provisions of Sections 8.3(b) and
8.3(c) hereof.

8.3(b). The Fund shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation incurred
or assessed against an Indemnified Party as such may arise from such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in the performance
of such Indemnified Party's duties or by reason of such Indemnified Party's
reckless disregard of obligations and duties under this Agreement or to the
Company, the Fund, the Underwriter or each Account, whichever is applicable.

8.3(c). The Fund shall not be liable under this indemnification provision
with

16
<PAGE> 17

respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified the Fund in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon such Indemnified Party (or after
such Indemnified Party shall have received notice of such service on any
designated agent), but failure to notify the Fund of any such claim shall not
relieve the Fund from any liability which it may have to the Indemnified Party
against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against the
Indemnified Parties, the Fund will be entitled to participate, at its own
expense, in the defense thereof. The Fund also shall be entitled to assume the
defense thereof, with counsel satisfactory to the party named in the action.
After notice from the Fund to such party of the Fund's election to assume the
defense thereof, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Fund will not be liable to such party
under this Agreement for any legal or other expenses subsequently incurred by
such party independently in connection with the defense thereof other than
reasonable costs of investigation.

8.3(d). The Company and the Underwriter agree promptly to notify the Fund
of the commencement of any litigation or proceedings against it or any of its
respective officers or directors in connection with this Agreement, the issuance
or sale of the Contracts, with respect to the operation of either Account, or
the sale or acquisition of shares of the Fund.

ARTICLE IX

Applicable Law

9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts.

9.2. This Agreement shall be subject to the provisions of the 1933, 1934
and 1940 Acts, and the rules and regulations and rulings thereunder, including
such exemptions from those statutes, rules and regulations as the Securities and
Exchange Commission may grant (including, but not limited to, the Shared Funding
Exemptive Order) and the terms hereof shall be interpreted and construed in
accordance therewith.

ARTICLE X

Termination

10.1. This Agreement shall continue in full force and effect until the
first to occur of:

(a) termination by any party for any reason by six months' advance
written notice delivered to the other parties; or

(b) termination by the Company by written notice to the Fund and the
Underwriter with respect to any Portfolio based upon the Company's

17
<PAGE> 18

determination that shares of such Portfolio are not reasonably
available to meet the requirements of the Contracts; or

(c) termination by the Company by written notice to the Fund and the
Underwriter with respect to any Portfolio in the event any of the
Portfolio's shares are not registered, issued or sold in
accordance with applicable state and/or federal law or such law
precludes the use of such shares as the underlying investment
media of the Contracts issued or to be issued by the Company; or

(d) termination by the Company by written notice to the Fund and the
Underwriter with respect to any Portfolio in the event that such
Portfolio ceases to qualify as a Regulated Investment Company
under Subchapter M of the Code or under any successor or similar
provision, or if the Company reasonably believes that the Fund may
fail to so qualify; or

(e) termination by the Company by written notice to the Fund and the
Underwriter with respect to any Portfolio in the event that such
Portfolio fails to meet the diversification requirements specified
in Article VI hereof; or

(f) termination by either the Fund or the Underwriter by written
notice to the Company, if either one or both of the Fund or the
Underwriter respectively, shall determine, in their sole judgment
exercised in good faith, that the Company and/or its affiliated
companies has suffered a material adverse change in its business,
operations, financial condition or prospects since the date of
this Agreement or is the subject of material adverse publicity; or

(g) termination by the Company by written notice to the Fund and the
Underwriter, if the Company shall determine, in its sole judgment
exercised in good faith, that either the Fund or the Underwriter
has suffered a material adverse change in its business,
operations, financial condition or prospects since the date of
this Agreement or is the subject of material adverse publicity; or

(h) termination by the Fund or the Underwriter by written notice to
the Company, if the Company gives the Fund and the Underwriter the
written notice specified in Section 1.6(b) hereof and at the time
such notice was given there was no notice of termination
outstanding under any other provision of this Agreement; provided,
however any termination under this Section 10.1(h) shall be
effective sixty (60) days after the notice specified in Section
1.6(b) was given.

10.2. Effect of Termination. Notwithstanding any termination of this

18
<PAGE> 19

Agreement, the Fund and the Underwriter shall at the option of the Company,
continue to make available additional shares of the Fund pursuant to the terms
and conditions of this Agreement, for all Contracts in effect on the effective
date of termination of this Agreement (hereinafter referred to as "Existing
Contracts"). Specifically, without limitation, the owners of the Existing
Contracts shall be permitted to reallocate investments in the Fund, redeem
investments in the Fund and/or invest in the Fund upon the making of additional
purchase payments under the Existing Contracts. The parties agree that this
Section 10.2 shall not apply to any terminations under Article VII and the
effect of such Article VII terminations shall be governed by Article VII of this
Agreement.

10.3 The Company shall not redeem Fund shares attributable to the
Contracts (as opposed to Fund shares attributable to the Company's assets held
in the Account) except (i) as necessary to implement Contract Owner initiated or
approved transactions, or (ii) as required by state and/or federal laws or
regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption") or (iii) as
permitted by an order of the SEC pursuant to Section 26(b) of the 1940 Act. Upon
request, the Company will promptly furnish to the Fund and the Underwriter the
opinion of counsel for the Company (which counsel shall be reasonably
satisfactory to the Fund and the Underwriter) to the effect that any redemption
pursuant to clause (ii) above is a Legally Required Redemption. Furthermore,
except in cases where permitted under the terms of the Contracts, the Company
shall not prevent Contract Owners from allocating payments to a Portfolio that
was otherwise available under the Contracts without first giving the Fund or the
Underwriter 90 days notice of its intention to do so.

ARTICLE XI

Notices

Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify in writing
to the other party.

If to the Fund: 82 Devonshire Street
Boston, Massachusetts 02109
Attention: Treasurer

If to the Company: 2960 North Meridian Street
P.O. Box 2960
Indianapolis, IN 46206
Attention: Janis Funk, Esq.

If to the Underwriter: 82 Devonshire Street
Boston, Massachusetts 02109
Attention: Treasurer

19
<PAGE> 20

ARTICLE XII

Miscellaneous

12.1 All persons dealing with the Fund must look solely to the property
of the Fund for the enforcement of any claims against the Fund as neither the
Board, officers, agents or shareholders assume any personal liability for
obligations entered into on behalf of the Fund.

12.2 Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and addresses
of the owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize such names and
addresses and other confidential information until such time as it may come into
the public domain without the express written consent of the affected party.

12.3 The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.

12.4 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.

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

12.6 Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
Notwithstanding the generality of the foregoing, each party hereto further
agrees to furnish the California Insurance Commissioner with any information or
reports in connection with services provided under this Agreement which such
Commissioner may request in order to ascertain whether the insurance operations
of the Company are being conducted in a manner consistent with the California
Insurance Regulations and any other applicable law or regulations.

12.7 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, which the parties hereto are entitled to under state and
federal laws.

20
<PAGE> 21

Company shall promptly notify the Fund and the Underwriter of any change in
control of the Company. In the event that Underwriter assigns this Agreement it
will make reasonable efforts to inform Company in advance of the assignment of
the identity of its assignee and the effective date of the assignment.

12.9. The Company shall furnish, or shall cause to be furnished, to the
Fund or its designee copies of the following reports:

(a) the Company's annual statement (prepared under statutory
accounting principles) and annual report (prepared under
generally accepted accounting principles ("GAAP"), if any),
as soon as practical and in any event within 90 days after
the end of each fiscal year;

(b) the Company's quarterly statements (statutory) (and GAAP,
if any), as soon as practical and in any event within 45
days after the end of each quarterly period;

(c) any financial statement, proxy statement, notice or report
of the Company sent to stockholders and/or policyholders,
as soon as practical after the delivery thereof to
stockholders;

(d) any registration statement (without exhibits) and financial
reports of the Company filed with the Securities and
Exchange Commission or any state insurance regulator, as
soon as practical after the filing thereof;

(e) any other report submitted to the Company by independent
accountants in connection with any annual, interim or
special audit made by them of the books of the Company, as
soon as practical after the receipt thereof, unless the
sharing of such material would subject the Company to the
disclosure of confidential information.

21
<PAGE> 22

IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the date
specified below.

BANKERS LIFE INSURANCE COMPANY OF NEW YORK

By:
---------------------------

Name:
---------------------------

Title:
---------------------------

VARIABLE INSURANCE PRODUCTS FUND

By:
---------------------------

Name: Robert C. Pozen

Title: Senior Vice President

FIDELITY DISTRIBUTORS CORPORATION

By:
---------------------------

Name: Kevin J. Kelly

Title: Vice President

22
<PAGE> 23

Schedule A

Separate Accounts and Associated Contracts

Name of Separate Account and Date Policy Form Numbers of Contracts
Established by Board of Directors Funded by Separate Account

Bankers Life Insurance Company of New York VCA-97BL
Separate Account I
Established on
------------------------------

23
<PAGE> 24

SCHEDULE B

PROXY VOTING PROCEDURE

The following is a list of procedures and corresponding responsibilities for the
handling of proxies relating to the Fund by the Underwriter, the Fund and the
Company. The defined terms herein shall have the meanings assigned in the
Participation Agreement except that the term "Company" shall also include the
department or third party assigned by the Insurance Company to perform the steps
delineated below.

1. The number of proxy proposals is given to the Company by the Underwriter
as early as possible before the date set by the Fund for the shareholder
meeting to facilitate the establishment of tabulation procedures. At this
time the Underwriter will inform the Company of the Record, Mailing and
Meeting dates. This will be done verbally approximately two months before
meeting.

2. Promptly after the Record Date, the Company will perform a "tape run", or
other activity, which will generate the names, addresses and number of
units which are attributed to each contractowner/policyholder (the
"Customer") as of the Record Date. Allowance should be made for account
adjustments made after this date that could affect the status of the
Customers' accounts as of the Record Date.

Note: The number of proxy statements is determined by the activities
described in Step #2. The Company will use its best efforts to call in the
number of Customers to Fidelity, as soon as possible, but no later than
two weeks after the Record Date.

3. The Fund's Annual Report no longer needs to be sent to each Customer by
the Company either before or together with the Customers' receipt of a
proxy statement. Underwriter will provide the last Annual Report to the
Company pursuant to the terms of Section 3.3 of the Agreement to which
this Schedule relates.

4. The text and format for the Voting Instruction Cards ("Cards" or "Card")
is provided to the Company by the Fund. The Company, at its expense, shall
produce and personalize the Voting Instruction Cards. The Legal Department
of the Underwriter or its affiliate ("Fidelity Legal") must approve the
Card before it is printed. Allow approximately 2-4 business days for
printing information on the Cards. Information commonly found on the Cards
includes:

a. name (legal name as found on account registration)
b. address
c. Fund or account number
d. coding to state number of units
e. individual Card number for use in tracking and verification
of votes (already on Cards as printed by the Fund)

24
<PAGE> 25

(This and related steps may occur later in the chronological process due to
possible uncertainties relating to the proposals.)

5. During this time, Fidelity Legal will develop, produce, and the Fund will
pay for the Notice of Proxy and the Proxy Statement (one document).
Printed and folded notices and statements will be sent to Company for
insertion into envelopes (envelopes and return envelopes are provided and
paid for by the Insurance Company). Contents of envelope sent to Customers
by Company will include:

a Voting Instruction Card(s)
b. One proxy notice and statement (one document)
c. return envelope (postage pre-paid by Company) addressed to the
Company or its tabulation agent
d. "urge buckslip" - optional, but recommended. (This is a small,
single sheet of paper that requests Customers to vote as quickly as
possible and that their vote is important. One copy will be supplied
by the Fund.)
e. cover letter - optional, supplied by Company and reviewed and
approved in advance by Fidelity Legal.

6. The above contents should be received by the Company approximately 3-5
business days before mail date. Individual in charge at Company reviews
and approves the contents of the mailing package to ensure correctness and
completeness. Copy of this approval sent to Fidelity Legal.

7. Package mailed by the Company.

* The Fund must allow at least a 15-day solicitation time to the
Company as the shareowner. (A 5-week period is recommended.)
Solicitation time is calculated as calendar days from (but not
including) the meeting, counting backwards.

8. Collection and tabulation of Cards begins. Tabulation usually takes place
in another department or another vendor depending on process used. An
often used procedure is to sort Cards on arrival by proposal into vote
categories of all yes, no, or mixed replies, and to begin data entry.

Note: Postmarks are not generally needed. A need for postmark
information would be due to an insurance company's internal procedure
and has not been required by Fidelity in the past.

9. Signatures on Card checked against legal name on account registration
which was printed on the Card.

Note: For example, if the account registration is under "Bertram C.
Jones, Trustee," then that is the exact legal name to be printed on the
Card and is the signature needed on the Card.

25
<PAGE> 26

10. If Cards are mutilated, or for any reason are illegible or are not
signed properly, they are sent back to Customer with an explanatory
letter, a new Card and return envelope. The mutilated or illegible
Card is disregarded and considered to be not received for purposes of
vote tabulation. Any Cards that have "kicked out" (e.g., mutilated,
illegible) of the procedure are "hand verified," i.e., examined as to
why they did not complete the system. Any questions on those Cards are
usually remedied individually.

11. There are various control procedures used to ensure proper tabulation of
votes and accuracy of that tabulation. The most prevalent is to sort the
Cards as they first arrive into categories depending upon their vote; an
estimate of how the vote is progressing may then be calculated. If the
initial estimates and the actual vote do not coincide, then an internal
audit of that vote should occur. This may entail a recount.

12. The actual tabulation of votes is done in units which is then converted to
shares. (It is very important that the Fund receives the tabulations
stated in terms of a percentage and the number of shares.) Fidelity Legal
must review and approve tabulation format.

13. Final tabulation in shares is verbally given by the Company to Fidelity
Legal on the morning of the meeting not later than 10:00 a m. Boston time.
Fidelity Legal may request an earlier deadline if required to calculate
the vote in time for the meeting.

14. A Certification of Mailing and Authorization to Vote Shares will be
required from the Company as well as an original copy of the final vote.
Fidelity Legal will provide a standard form for each Certification.

15. The Company will be required to box and archive the Cards received from
the Customers. In the event that any vote is challenged or if otherwise
necessary for legal, regulatory, or accounting purposes, Fidelity Legal
will be permitted reasonable access to such Cards.

16. All approvals and "signing-off" may be done orally, but must always be
followed up in writing.

26
<PAGE> 27

SCHEDULE C

Other investment companies currently available under variable annuities or
variable life insurance issued by the Company:

The Alger American Fund
OCC Accumulation Trust
Royce Capital Fund
SAFECO Resource Series Trust
T. Rowe Price Fixed Income Series, Inc.
T. Rowe Price International Series, Inc.
Van Eck Worldwide Insurance Trust

<PAGE> 1
EXHIBIT 8(b)

PARTICIPATION AGREEMENT

Among

VARIABLE INSURANCE PRODUCTS FUND II

FIDELITY DISTRIBUTORS CORPORATION

and

BANKERS LIFE INSURANCE COMPANY OF NEW YORK

THIS AGREEMENT, made and entered into as of the _______ day of
________, 1998 by and among BANKERS LIFE INSURANCE COMPANY OF NEW YORK,
(hereinafter the "Company"), a New York corporation, on its own behalf and on
behalf of each segregated asset account of the Company set forth on Schedule A
hereto as may be amended from time to time (each such account hereinafter
referred to as the "Account"), and the VARIABLE INSURANCE PRODUCTS FUND II, an
unincorporated business trust organized under the laws of the Commonwealth of
Massachusetts (hereinafter the "Fund") and FIDELITY DISTRIBUTORS CORPORATION
(hereinafter the "Underwriter"), a Massachusetts corporation.

WHEREAS, the Fund has obtained an order from the Securities and
Exchange Commission, dated September 17, 1986 (File No. 812-6422), granting
Participating Insurance Companies and variable annuity and variable life
insurance separate accounts exemptions from the provisions of sections 9(a),
13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as amended,
(hereinafter the "1940 Act") and Rules 6e-2(b)(15) and 6e-3(T)(b)(15)
thereunder, to the extent necessary to permit shares of the Fund to be sold to
and held by variable annuity and variable life insurance separate accounts of
both affiliated and unaffiliated life insurance companies (hereinafter the
"Shared Funding Exemptive Order"); and

1
<PAGE> 2

WHEREAS, the Company has registered or will register certain variable life
insurance and variable annuity contracts under the 1933 Act; and

WHEREAS, the Company has registered or will register each Account as a
unit investment trust under the 1940 Act; and

NOW, THEREFORE, in consideration of their mutual promises, the Company,
the Fund and the Underwriter agree as follows:

ARTICLE I

Sale of Fund Shares

1.1. The Underwriter agrees to sell to the Company those shares of the
Fund which each Account orders, executing such orders on a daily basis at the
net asset value next computed after receipt by the Fund or its designee of the
order for the shares of the Fund. For purposes of this Section 1.1, the Company
shall be the designee of the Fund for receipt of such orders from each Account
and receipt by such designee shall constitute receipt by the Fund; provided that
the Fund receives notice of such order by 9:00 a m. Boston time on the next
following Business Day. "Business Day" shall mean any day on which the New York
Stock Exchange is open for trading

2
<PAGE> 3

and on which the Fund calculates its net asset value pursuant to the rules of
the Securities and Exchange Commission.

1.6. The Company agrees that purchases and redemptions of Portfolio shares
offered by the then current prospectus of the Fund shall be made in accordance
with the provisions of such prospectus. The Company agrees that all net amounts
available under the variable annuity contracts with the form number(s) which are
listed on Schedule A attached hereto and incorporated herein by this reference,
as such Schedule A may be amended from time to time hereafter by mutual written
agreement of all the parties hereto, (the "Contracts") shall be invested in the
Fund, in such other Funds advised by the Adviser as may be mutually agreed to in
writing by the parties hereto, or in the Company's general account, provided
that such amounts may also be invested in an investment company other than the
Fund if (a) such other investment company, or series thereof, has investment
objectives or policies that are substantially different from the investment
objectives and policies of all the Portfolios of the Fund which are actually
used by the Company to fund the Contracts; or (b) the Company gives the Fund and
the Underwriter 45 days written notice of its intention to make such other
investment company available as a funding vehicle for the Contracts; or (c) such
other investment company was available as a funding vehicle for the Contracts
prior to the date of this Agreement and the Company so informs the

3
<PAGE> 4

Fund and Underwriter prior to their signing this Agreement (a list of such funds
appearing on Schedule C to this Agreement); or (d) the Fund or Underwriter
consents to the use of such other investment company.

1.10. The Fund shall make the net asset value per share for each Portfolio
available to the Company on a daily basis as soon as reasonably practical after
the net asset value per share is calculated (normally by 6:30 p m. Boston time)
and shall use its best efforts to make such net asset value per share available
by 7 p m. Boston time.

ARTICLE II

Representations and Warranties

2.1. The Company represents and warrants that the Contracts are or will be
registered under the 1933 Act; that the Contracts will be issued and sold in
compliance in all material respects with all applicable Federal and State laws
and that the sale of the Contracts shall comply in all material respects with
state insurance suitability requirements. The Company further represents and
warrants that it is an insurance company duly organized and in good standing
under applicable law and that it has legally and validly established each
Account prior to any issuance or sale thereof as a segregated asset account
under Section 4240 of the New York Insurance Code and has registered or, prior
to any issuance or sale of the Contracts, will register each Account as a unit
investment trust in accordance with the provisions of the 1940 Act to serve as a
segregated investment account for the Contracts.

2.2. The Fund represents and warrants that Fund shares sold pursuant to
this Agreement shall be registered under the 1933 Act, duly authorized for
issuance and sold in

4
<PAGE> 5

compliance with the laws of the State of New York and all applicable federal and
state securities laws and that the Fund is and shall remain registered under the
1940 Act. The Fund shall amend the Registration Statement for its shares under
the 1933 Act and the 1940 Act from time to time as required in order to effect
the continuous offering of its shares. The Fund shall register and qualify the
shares for sale in accordance with the laws of the various states only if and to
the extent deemed advisable by the Fund or the Underwriter.

2.5. (a) With respect to Initial Class shares, the Fund currently does not
intend to make any payments to finance distribution expenses pursuant to Rule
12b-1 under the 1940 Act or otherwise, although it may make such payments in the
future. The Fund has adopted a "no fee" or "defensive" Rule 12b-1 Plan under
which it makes no payments for distribution expenses. To the extent that it
decides to finance distribution expenses pursuant to Rule 12b-1, the Fund
undertakes to have a board of trustees, a majority of whom are not interested
persons of the Fund, formulate and approve any plan under Rule 12b-1 to finance
distribution expenses.

(b) With respect to Service Class shares, the Fund has adopted a
Rule 12b-1 Plan under which it makes payments to finance distribution expenses.
The Fund represents and warrants that it has a board of trustees, a majority of
whom are not interested persons of the Fund, which has formulated and approved
the Fund's Rule 12b-1 Plan to finance distribution expenses of the Fund and that
any changes to the Fund's Rule 12b-1 Plan will be approved by a similarly
constituted board of trustees.

2.7. The Underwriter represents and warrants that it is a member in good
standing of the NASD and is registered as a broker-dealer with the SEC. The
Underwriter further represents

5
<PAGE> 6

that it will sell and distribute the Fund shares in accordance with the laws of
the State of New York and all applicable state and federal securities laws,
including without limitation the 1933 Act, the 1934 Act, and the 1940 Act.

2.9. The Underwriter represents and warrants that the Adviser is and shall
remain duly registered in all material respects under all applicable federal and
state securities laws and that the Adviser shall perform its obligations for the
Fund in compliance in all material respects with the laws of the State of New
York and any applicable state and federal securities laws.

ARTICLE III

Prospectuses and Proxy Statements; Voting

3.1. The Underwriter shall provide the Company with as many printed copies
of the Fund's current prospectus and Statement of Additional Information as the
Company may reasonably request. If requested by the Company in lieu thereof, the
Fund shall provide camera-ready film or computer diskettes containing the Fund's
prospectus and Statement of Additional Information, and such other assistance as
is reasonably necessary in order for the Company once each year (or more
frequently if the prospectus and/or Statement of Additional Information for the
Fund is amended during the year) to have the prospectus for the Contracts and
the Fund's prospectus printed together in one document, and to have the
Statement of Additional Information for the Fund and the Statement of Additional
Information for the Contracts printed together in one document. Alternatively,
the Company may print the Fund's

6
<PAGE> 7

prospectus and/or its Statement of Additional Information in combination with
other fund companies' prospectuses and statements of additional information. The
Fund currently intends to create a separate prospectus for each Portfolio, but
does not guarantee that such prospectuses will be generated in any particular
year.

3.4. If and to the extent required by law the Company shall:

(i) solicit voting instructions from Contract owners;

(ii) vote the Fund shares in accordance with instructions
received from Contract owners; and

7
<PAGE> 8

in a manner consistent with the standards set forth on Schedule B attached
hereto and incorporated herein by this reference, which standards will also be
provided to the other Participating Insurance Companies.

ARTICLE IV

Sales Material and Information

4.4. The Fund and the Underwriter shall not give any information or make
any representations on behalf of the Company or concerning the Company, each
Account, or the Contracts other than the information or representations
contained in a registration statement or prospectus for the Contracts, as such
registration statement and prospectus may be amended or supplemented from time
to time, or in published reports for each Account which are in the public domain
or approved by the Company for distribution to Contract owners, or in sales
literature or other promotional material approved by the Company or its
designee, except with the permission of the Company.

8
<PAGE> 9

4.7. For purposes of this Article IV, the phrase "sales literature or
other promotional material" includes, but is not limited to, any of the
following that refer to the Fund or any affiliate of the Fund: advertisements
(such as material published, or designed for use in, a newspaper, magazine, or
other periodical, radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, or other public media), sales
literature (i.e., any written communications distributed or made generally
available to customers or the public, including brochures, circulars, research
reports, market letters, form letters, seminar texts, reprints or excerpts of
any other advertisement, sales literature, or published article), educational or
training materials or other communications distributed or made generally
available to some or all agents or employees, and registration statements,
prospectuses, Statements of Additional Information, shareholder reports, and
proxy materials.

ARTICLE V

Fees and Expenses

5.1. The Fund and Underwriter shall pay no fee or other compensation to
the Company under this agreement, except that if the Fund or any Portfolio
adopts and implements a plan pursuant to Rule 12b-1 to finance distribution
expenses, then the Underwriter may make payments to the Company or to the
underwriter for the Contracts if and in amounts agreed to by the Underwriter in
writing and such payments will be made out of existing fees otherwise payable to
the Underwriter, past profits of the Underwriter or other resources available to
the Underwriter. No such payments shall be made directly by the Fund. Currently,
no such payments are contemplated.

5.2. All expenses incident to performance by the Fund under this Agreement
shall be paid by the Fund. The Fund shall see to it that all its shares are
registered and authorized for issuance in accordance with applicable federal law
and, if and to the extent deemed advisable by the Fund, in accordance with
applicable state laws prior to their sale. The Fund shall bear the expenses for
the cost of registration and qualification of the Fund's shares, preparation and
filing of the Fund's prospectus and registration statement, proxy materials and
reports, setting the

9
<PAGE> 10

prospectus in type, setting in type and printing the proxy materials and reports
to shareholders (including the costs of printing a prospectus that constitutes
an annual report), the preparation of all statements and notices required by any
federal or state law, and all taxes on the issuance or transfer of the Fund's
shares.

5.3. The Company shall bear the expenses of distributing the Fund's
prospectus, proxy materials and reports to owners of Contracts issued by the
Company.

ARTICLE VI

Diversification

ARTICLE VII

Potential Conflicts

7.2. The Company will report any potential or existing conflicts of which
it is aware to the Board. The Company will assist the Board in carrying out its
responsibilities under the Shared Funding Exemptive Order, by providing the
Board with all information reasonably necessary for the Board to consider any
issues raised. This includes, but is not limited to, an obligation by the
Company to inform the Board whenever contract owner voting instructions are
disregarded.

10
<PAGE> 11

7.4. If a material irreconcilable conflict arises because of a decision by
the Company to disregard contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Fund's election, to withdraw the affected Account's
investment in the Fund and terminate this Agreement with respect to such
Account; provided, however that such withdrawal and termination shall be limited
to the extent required by the foregoing material irreconcilable conflict as
determined by a majority of the disinterested members of the Board. Any such
withdrawal and termination must take place within six (6) months after the Fund
gives written notice that this provision is being implemented, and until the end
of that six month period the Underwriter and Fund shall continue to accept and
implement orders by the Company for the purchase (and redemption) of shares of
the Fund.

11
<PAGE> 12

irreconcilable material conflict. In the event that the Board determines that
any proposed action does not adequately remedy any irreconcilable material
conflict, then the Company will withdraw the Account's investment in the Fund
and terminate this Agreement within six (6) months after the Board informs the
Company in writing of the foregoing determination, provided, however, that such
withdrawal and termination shall be limited to the extent required by any such
material irreconcilable conflict as determined by a majority of the
disinterested members of the Board.

ARTICLE VIII

Indemnification

8.1. Indemnification By The Company

(i) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in the Registration
Statement or prospectus for the Contracts or contained in the Contracts or
sales literature for the Contracts (or any amendment or supplement to any
of the foregoing), or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading,
provided that this agreement to indemnify shall not apply as to any
Indemnified Party if such statement or omission or such alleged statement
or omission was made in reliance upon and in conformity with information
furnished to the Company by or on behalf of the Fund for use in the
Registration Statement or prospectus for the Contracts or in the Contracts
or

12
<PAGE> 13

sales literature (or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Fund shares; or

(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the Registration
Statement, prospectus or sales literature of the Fund not supplied by the
Company, or persons under its control) or wrongful conduct of the Company
or persons under its control, with respect to the sale or distribution of
the Contracts or Fund Shares; or

(iii) arise out of any untrue statement or alleged untrue statement
of a material fact contained in a Registration Statement, prospectus, or
sales literature of the Fund or any amendment thereof or supplement
thereto or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading if such a statement or omission was made in
reliance upon information furnished to the Fund by or on behalf of the
Company; or

(iv) arise as a result of any failure by the Company to provide the
services and furnish the materials under the terms of this Agreement; or

(v) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this Agreement or
arise out of or result from any other material breach of this Agreement by
the Company, as limited by and in accordance with the provisions of
Sections 8.1(b) and 8.1(c) hereof.

8.1(c). The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Company in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Company of any
such claim shall not relieve the Company from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Company shall be entitled to participate,
at its own expense, in the defense of such action. The Company also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the Action. After notice from the Company to such party of the
Company's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and the
Company will not be liable to such party under this Agreement for any legal or
other expenses

13
<PAGE> 14

subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.

8.2. Indemnification by the Underwriter

(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in
the Registration Statement or prospectus or sales
literature of the Fund (or any amendment or supplement to
any of the foregoing), or arise out of or are based upon
the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to
make the statements therein not misleading, provided that
this agreement to indemnify shall not apply as to any
Indemnified Party if such statement or omission or such
alleged statement or omission was made in reliance upon and
in conformity with information furnished to the Underwriter
or Fund by or on behalf of the Company for use in the
Registration Statement or prospectus for the Fund or in
sales literature (or any amendment or supplement) or
otherwise for use in connection with the sale of the
Contracts or Fund shares; or

(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the Registration Statement, prospectus or
sales literature for the Contracts not supplied by the
Underwriter or persons under its control) or wrongful
conduct of the Fund, Adviser or Underwriter or persons
under their control, with respect to the sale or
distribution of the Contracts or Fund shares; or

(iii) arise out of any untrue statement or alleged untrue statement
of a material fact contained in a Registration Statement,
prospectus, or sales literature covering the Contracts, or any
amendment thereof or supplement thereto, or the omission or
alleged omission to state therein a material fact required to
be stated therein or necessary to make the statement or
statements

14
<PAGE> 15

therein not misleading, if such statement or omission was made
in reliance upon information furnished to the Company by or on
behalf of the Fund; or

(iv) arise as a result of any failure by the Fund to provide the
services and furnish the materials under the terms of this
Agreement (including a failure, whether unintentional or in
good faith or otherwise, to comply with the diversification
requirements specified in Article VI of this Agreement); or

(v) arise out of or result from any material breach of any
representation and/or warranty made by the Underwriter in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Underwriter; as limited by and
in accordance with the provisions of Sections 8.2(b) and
8.2(c) hereof.

8.2(c). The Underwriter shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Underwriter in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Underwriter of
any such claim shall not relieve the Underwriter from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Underwriter will be entitled to
participate, at its own expense, in the defense thereof. The Underwriter also
shall be entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action. After notice from the Underwriter to such party
of the Underwriter's election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel retained by it,
and the Underwriter will not be liable to such party under this Agreement for
any legal or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.

8.3. Indemnification By the Fund

15
<PAGE> 16

(i) arise as a result of any failure by the Fund to provide the
services and furnish the materials under the terms of this
Agreement (including a failure to comply with the
diversification requirements specified in Article VI of this
Agreement); or

as limited by and in accordance with the provisions of Sections 8.3(b) and
8.3(c) hereof.

8.3(c). The Fund shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified the Fund in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon such Indemnified Party (or after
such Indemnified Party shall have received notice of such service on any
designated agent), but failure to notify the Fund of any such claim shall not
relieve the Fund from any liability which it may have to the Indemnified Party
against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against the
Indemnified Parties, the Fund will be entitled to participate, at its own
expense, in the defense thereof. The Fund also shall be entitled to assume the
defense thereof, with counsel satisfactory to the party named in the action.
After notice from the Fund to such party of the Fund's election to assume the
defense thereof, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Fund will not be liable to such party
under this Agreement for any legal or other expenses subsequently incurred by
such party independently in connection with the defense thereof other than
reasonable costs of investigation.

16
<PAGE> 17

ARTICLE IX

Applicable Law

9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts.

9.2. This Agreement shall be subject to the provisions of the 1933, 1934
and 1940 acts, and the rules and regulations and rulings thereunder, including
such exemptions from those statutes, rules and regulations as the Securities and
Exchange Commission may grant (including, but not limited to, the Shared Funding
Exemptive Order) and the terms hereof shall be interpreted and construed in
accordance therewith.

ARTICLE X

Termination

10.1. This Agreement shall continue in full force and effect until the
first to occur of:

(a) termination by any party for any reason by six months' advance
written notice delivered to the other parties; or

(b) termination by the Company by written notice to the Fund and the
Underwriter with respect to any Portfolio based upon the Company's
determination that shares of such Portfolio are not reasonably
available to meet the requirements of the Contracts; or

(c) termination by the Company by written notice to the Fund and the
Underwriter with respect to any Portfolio in the event any of the
Portfolio's shares are not registered, issued or sold in accordance
with applicable state and/or federal law or such law precludes the
use of such shares as the underlying investment media of the
Contracts issued or to be issued by the Company; or

(d) termination by the Company by written notice to the Fund and the
Underwriter with respect to any Portfolio in the event that such
Portfolio ceases to qualify as a Regulated Investment Company under
Subchapter M of the Code or under any successor or similar
provision, or if the Company reasonably believes that the Fund may
fail to so qualify; or

17
<PAGE> 18

(f) termination by either the Fund or the Underwriter by written notice
to the Company, if either one or both of the Fund or the Underwriter
respectively, shall determine, in their sole judgment exercised in
good faith, that the Company and/or its affiliated companies has
suffered a material adverse change in its business, operations,
financial condition or prospects since the date of this Agreement or
is the subject of material adverse publicity; or

(g) termination by the Company by written notice to the Fund and the
Underwriter, if the Company shall determine, in its sole judgment
exercised in good faith, that either the Fund or the Underwriter has
suffered a material adverse change in its business, operations,
financial condition or prospects since the date of this Agreement or
is the subject of material adverse publicity; or

(h) termination by the Fund or the Underwriter by written notice to
the Company, if the Company gives the Fund and the Underwriter
the written notice specified in Section 1.6(b) hereof and at the
time such notice was given there was no notice of termination
outstanding under any other provision of this Agreement;
provided, however any termination under this Section 10.1(h)
shall be effective sixty (60) days after the notice specified in
Section 1.6(b) was given.

10.2. Effect of Termination. Notwithstanding any termination of this
Agreement, the Fund and the Underwriter shall at the option of the Company,
continue to make available additional shares of the Fund pursuant to the terms
and conditions of this Agreement, for all Contracts in effect on the effective
date of termination of this Agreement (hereinafter referred to as "Existing
Contracts"). Specifically, without limitation, the owners of the Existing
Contracts shall be permitted to reallocate investments in the Fund, redeem
investments in the Fund and/or invest in the Fund upon the making of additional
purchase payments under the Existing Contracts. The parties agree that this
Section 10.2 shall not apply to any terminations under Article VII and the
effect of such Article VII terminations shall be governed by Article VII of this
Agreement.

10.3. The Company shall not redeem Fund shares attributable to the
Contracts (as opposed to Fund shares attributable to the Company's assets held
in the Account) except (i) as necessary to implement Contract Owner initiated or
approved transactions, or (ii) as required by state and/or federal laws or
regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption") or (iii) as
permitted by an order of the SEC pursuant to Section 26(b) of the 1940 Act. Upon
request, the Company will promptly furnish to the Fund and the Underwriter the
opinion of counsel for the Company (which counsel shall be reasonably
satisfactory to the Fund and the Underwriter) to the effect that any redemption
pursuant to clause (ii) above is a Legally Required Redemption. Furthermore,
except in cases where permitted under the terms of the Contracts, the Company
shall not prevent

18
<PAGE> 19

Contract Owners from allocating payments to a Portfolio that was otherwise
available under the Contracts without first giving the Fund or the Underwriter
90 days notice of its intention to do so.

ARTICLE XI

Notices

If to the Fund: 82 Devonshire Street
Boston, Massachusetts 02109
Attention: Treasurer

If to the Company: 2960 North Meridian Street
P.O. Box1230
Indianapolis, Indiana 46206
Attention: Janis B. Funk, Esq.

If to the Underwriter: 82 Devonshire Street
Boston, Massachusetts 02109
Attention: Treasurer

ARTICLE XII

Miscellaneous

12.1. All persons dealing with the Fund must look solely to the property
of the Fund for the enforcement of any claims against the Fund as neither the
Board, officers, agents or shareholders assume any personal liability for
obligations entered into on behalf of the Fund.

12.2. Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and addresses
of the owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize such names and
addresses and other confidential information until such time as it may come into
the public domain without the express written consent of the affected party.

12.3. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.

19
<PAGE> 20

12.4. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.

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

12.6. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
Notwithstanding the generality of the foregoing, each party hereto further
agrees to furnish the California Insurance Commissioner with any information or
reports in connection with services provided under this Agreement which such
Commissioner may request in order to ascertain whether the insurance operations
of the Company are being conducted in a manner consistent with the California
Insurance Regulations and any other applicable law or regulations.

12.8. This Agreement or any of the rights and obligations hereunder may
not be assigned by any party without the prior written consent of all parties
hereto; provided, however, that the Underwriter may assign this Agreement or any
rights or obligations hereunder to any affiliate of or company under common
control with the Underwriter, if such assignee is duly licensed and registered
to perform the obligations of the Underwriter under this Agreement. The Company
shall promptly notify the Fund and the Underwriter of any change in control of
the Company. In the event that Underwriter assigns this Agreement it will make
reasonable efforts to inform Company in advance of the assignment of the
identity of its assignee and the effective date of the assignment.

12.9. The Company shall furnish, or shall cause to be furnished, to the
Fund or its designee copies of the following reports:

(a) the Company's annual statement (prepared under statutory
accounting principles) and annual report (prepared under
generally accepted accounting principles ("GAAP"), if any), as
soon as practical and in any event within 90 days after the
end of each fiscal year,

(b) the Company's quarterly statements (statutory) (and GAAP, if
any), as soon as practical and in any event within 45 days
after the end of each quarterly period:

20
<PAGE> 21

(c) any financial statement, proxy statement, notice or report of
the Company sent to stockholders and/or policyholders, as soon
as practical after the delivery thereof to stockholders;

(d) any registration statement (without exhibits) and financial
reports of the Company filed with the Securities and Exchange
Commission or any state insurance regulator, as soon as
practical after the filing thereof;

(e) any other report submitted to the Company by independent
accountants in connection with any annual, interim or special
audit made by them of the books of the Company, as soon as
practical after the receipt thereof, unless the sharing of
such material would subject the Company to the disclosure of
confidential information.

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the date
specified below.

BANKERS LIFE INSURANCE COMPANY OF NEW YORK

By:
---------------------------------

Name:
---------------------------------

Title:
---------------------------------

VARIABLE INSURANCE PRODUCTS FUND II

By:
---------------------------------

Name: Robert C. Pozen

Title: Senior Vice President

FIDELITY DISTRIBUTORS CORPORATION

By:
---------------------------------

Name: Kevin J. Kelly

Title: Vice President

21
<PAGE> 22

Schedule A

Separate Accounts and Associated Contracts

Name of Separate Account and Date Policy Form Numbers of Contracts
Established by Board of Directors Funded By Separate Account

Bankers Life Insurance Company of New York VCA-97BL
Separate Account I
Established on
----------------------

22
<PAGE> 23

SCHEDULE B

PROXY VOTING PROCEDURE

23
<PAGE> 24

(This and related steps may occur later in the chronological process due to
possible uncertainties relating to the proposals.)

a. Voting Instruction Card(s)
b. One proxy notice and statement (one document)
c. return envelope (postage pre-pad by Company) addressed to the
Company or its tabulation agent
d. "urge buckslip" - optional, but recommended. (This is a small,
single sheet of paper that requests Customers to vote as quickly as
possible and that their vote is important. One copy will be supplied
by the Fund.)
e. cover letter - optional, supplied by Company and reviewed and
approved in advance by Fidelity Legal.

6. The above contents should be received by the Company approximately 3-5
business days before mail date. Individual in charge at Company review and
approves the contents of the mailing package to ensure correctness and
completeness. Copy of this approval sent to Fidelity Legal.

7. Package mailed by the Company.

Note: Postmarks are not generally needed. A need for postmark
information would be due to an insurance company's internal procedure
and has not been required by Fidelity in the past.

9. Signatures on Card checked against legal name on account registration
which was printed on the Card.

Note: For Example, if the account registration is under "Bertram C.
Jones, Trustee," then that is the exact legal name to be printed on the
Card and is the signature needed on the Card.

24
<PAGE> 25

11. There are various control procedures used to ensure proper
tabulation of votes and accuracy of that tabulation. The most
prevalent is to sort the Cards as they first arrive into categories
depending upon their vote; an estimate of how the vote is
progressing may then be calculated. If the initial estimates and the
actual vote do not coincide, then an internal audit of that vote
should occur. This may entail a recount.

12. The actual tabulation of votes is done in units which is then
converted to shares. (It is very important that the Fund receives
the tabulations stated in terms of a percentage and the number of
shares.) Fidelity Legal must review and approve tabulation format.

13. Final tabulation in shares is verbally given by the Company to
Fidelity Legal on the morning of the meeting not later than 10:00
am. Boston time. Fidelity Legal may request an earlier deadline if
required to calculate the vote in time for the meeting.

14. A Certification of Mailing and Authorization to Vote Shares will be
required from the Company as well as an original copy of the final
vote. Fidelity Legal will provide a standard form for each
Certification.

15. The Company will be required to box and archive the Cards received
from the Customers. In the event that any vote is challenged or if
otherwise necessary for legal, regulatory, or accounting purposes,
Fidelity Legal will be permitted reasonable access to such Cards.

16. All approvals and "signing-off" may be done orally, but must always
be followed up in writing.

25
<PAGE> 26
SCHEDULE C

Other investment companies currently available under variable annuities or
variable life insurance issued by the Company:

The Alger American Fund
OCC Accumulation Trust
Royce Capital Fund
SAFECO Resource Series Trust
SoGen Variable Funds, Inc.
T. Rowe Price Fixed Income Series, Inc.
T. Rowe Price International Series, Inc.
Van Eck Worldwide Insurance Trust

<PAGE> 1
EXHIBIT 8(d)

AMENDMENT TO AGREEMENT

THIS AMENDMENT made as of the ___ day of ______, 1998 to amend portions of the
Fund Participation Agreement entered into by Van Eck Worldwide Insurance Trust
and the Trust's investment adviser, Van Eck Associates Corporation, and IL
Annuity and Insurance Company on September 5, 1995 for the purpose of adding
Bankers Life Insurance Company of New York, a New York corporation, as a party
to the agreement.

1. The initial paragraph is amended follows:

a. The phrase "Insurance Company" used to represent IL Annuity and
Insurance Company in the first sentence is replaced by "ILA."

b. The following sentences are added to the section:

As amended the ___ day of June, 1998, Bankers Life Insurance Company
of New York ("BLNY"), Van Eck Worldwide Insurance Trust ("Trust"),
and the Trust's investment adviser, Van Eck Associates Corporation
("Adviser") hereby agree that shares of the series of the Trust as
listed on Exhibit A, as it may from time to time be amended
("Portfolios"), shall be made available to serve as an underlying
investment medium for Individual Deferred Variable Annuity Contracts
("Contracts") to be offered by subject to the following provisions.
"The Company" shall be used hereinafter to refer to both ILA and
BLNY, individually.

2. Section 1. is amended to read as follows:

a. References to "The Insurance Company" in the first and second
sentences of the section are replaced by "ILA."

b. The words "Variable Account" throughout the section are replaced by
"ILA Separate Account."

c. The following sentences are added to the section:

BLNY represents that it has established Bankers Life Insurance
Company of New York Separate Account I ("BLNY Separate Account") as
a separate account under New York law, and has registered it as a
unit investment trust under the Investment Company Act of 1940
("1940 Act") to serve as an investment vehicle for the Contracts.
The Contracts provide for the allocation of net amounts received by
BLNY to separate series of the BLNY Separate Account for investment
in the shares of specified investment companies selected among those
companies available through the BLNY Separate Account to act as
underlying investment media. Selection of a particular investment
company is made by the Contract owner who may change such selection
from time to time in accordance

1
<PAGE> 2

with the terms of the applicable Contract.

IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Agreement to Amend of the date and year first above written.

VAN ECK WORLDWIDE INSURANCE TRUST

By:
-----------------------------------------
Name:
Title:

VAN ECK ASSOCIATES CORPORATION

By:
-----------------------------------------
Name:
Title:

BANKERS LIFE INSURANCE COMPANY OF
NEW YORK

By:
-----------------------------------------
Name:
Title:

<PAGE> 1
EXHIBIT 8(f)

AMENDMENT TO AGREEMENT

THIS AMENDMENT made as of the ___ day of _________, 1998 to amend portions of
the Participation Agreement entered into by T. Rowe Price International Series,
Inc., T. Rowe Price Investment Services, Inc. and IL Annuity and Insurance
Company on September 5, 1995 for the purpose of adding Bankers Life Insurance
Company of New York as a party to the agreement.

1. The initial paragraph is amended to read:

THIS AGREEMENT, made and entered into as of this 5th day of September,
1995 by and among IL Annuity and Insurance Company (hereinafter, "ILA"), a
Massachusetts insurance company, and, as amended the ___ day of _______,
1998, Bankers Life Insurance Company of New York (hereinafter, "BLNY"), a
New York insurance company, on their own behalf and on behalf of each
segregated asset account of the Company set forth on Schedule A hereto as
may be amended from time to time (each account hereinafter referred to as
the "Account"), and the undersigned funds, each, a corporation organized
under the laws of Maryland (hereinafter referred to as the "Fund") and T.
Rowe Price Investment Services, Inc. (hereinafter the "Underwriter"), a
Maryland corporation. "The Company" shall be used hereinafter to refer to
both ILA and BLNY, individually.

2. Article II, Section 2.1 is amended to read:

a. The words "the Company" used within the section are replaced by
"ILA."

b. The first reference to "the Account" in the second sentence of the
section is replaced by "the IL Annuity and Insurance Company
Separate Account I ("ILA Account")." The second reference to "the
Account" in the second sentence of the section is replaced by "ILA
Account."

c. The following sentences are added to the section:

BLNY represents and warrants that the Contracts are or will be
registered under the 1933 Act; that the Contracts will be issued and
sold in compliance in all material respects with all applicable
federal and state laws and that the sale of the Contracts shall
comply in all material respects with state insurance suitability
requirements. BLNY further represents and warrants that it is an
insurance company duly organized and in good standing under
applicable law and that it has legally and validly established the
Bankers Life Insurance Company of New York Separate Account I ("BLNY
Account") prior to any issuance or sale thereof as segregated asset
accounts under New York insurance laws, and has registered or, prior
to any issuance or sale of the Contracts, will register the BLNY
Account as a unit investment trusts in accordance with the
provisions of the 1940 Act to serve as a segregated investment
account for the Contracts.

1
<PAGE> 2

3. Schedule A is amended to add:

a. Bankers Life Insurance Company of New York Separate Account I as
an additional separate account AND

b. VCA-97BL as an additional Contract Funded by Bankers Life Insurance
Company of New York Separate Account I.

<PAGE> 3

IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Agreement to Amend of the date and year first above written.

FUND: T. ROWE PRICE INTERNATIONAL SERIES, INC.

By its authorized officer

By:
--------------------------------------
Title:
-----------------------------------
Date:
------------------------------------

UNDERWRITER: T. ROWE PRICE INVESTMENT SERVICES, INC.

By its authorized officer

By:
--------------------------------------
Title:
-----------------------------------
Date:
------------------------------------

COMPANY: BANKERS LIFE INSURANCE COMPANY OF
NEW YORK

By its authorized officer

By:
--------------------------------------
Title:
-----------------------------------
Date:
------------------------------------

BANKERS LIFE INSURANCE COMPANY OF
NEW YORK

Attest:

By:
--------------------------------------
Title:
-----------------------------------
Date:
------------------------------------

<PAGE> 1

EXHIBIT 8(h)

AMENDMENT TO AGREEMENT

THIS AMENDMENT made as of the ___ day of _________, 1998 to amend portions of
the Participation Agreement entered into by T. Rowe Price Fixed Income Series,
Inc., T. Rowe Price Investment Services, Inc. and IL Annuity and Insurance
Company on September 5, 1995 for the purpose of adding Bankers Life Insurance
Company of New York as a party to the agreement.

1. The initial paragraph is amended to read:

THIS AGREEMENT, made and entered into as of the 5th day of September, 1995
by and among IL Annuity and Insurance Company (hereinafter, "ILA"), a
Massachusetts insurance company, and, as amended the ___ day of _____,
1998, Bankers Life Insurance Company of New York (hereinafter, "BLNY"), a
New York insurance company, on their own behalf and on behalf of each
segregated asset account of the Company set forth on Schedule A hereto as
may be amended from time to time (each account hereinafter referred to as
the "Account"), and the undersigned funds, each, a corporation organized
under the laws of Maryland (hereinafter referred to as the "Fund") and T.
Rowe Price Investment Services, Inc. (hereinafter the "Underwriter"), a
Maryland corporation. "The Company" shall be used hereinafter to refer to
both ILA and BLNY, individually.

2. Article II, Section 2.1 is amended as follows:

a. The first two words of the section ("the Company") are replaced
by "ILA."

c. The following sentences are added to the section:

1
<PAGE> 2

3. Schedule A is amended to add:

a. Bankers Life Insurance Company of New York Separate Account I as
an additional separate account AND

b. VCA-97BL as an additional Contract Funded by BLNY Separate Account
I.

2
<PAGE> 3

IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Agreement to Amend of the date and year first above written.

FUND: T. ROWE PRICE FIXED INCOME SERIES, INC.

By its authorized officer

By:
-------------------------------
Title:
----------------------------
Date:
-----------------------------

UNDERWRITER: T. ROWE PRICE INVESTMENT SERVICES, INC.

By its authorized officer

By:
-------------------------------
Title:
-----------------------------
Date:
------------------------------

COMPANY: BANKERS LIFE INSURANCE COMPANY OF
NEW YORK

By its authorized officer

By:
-------------------------------
Title:
----------------------------
Date:
-----------------------------

BANKERS LIFE INSURANCE COMPANY OF
NEW YORK

Attest:

By:
-------------------------------
Title:
----------------------------
Date:
-----------------------------

<PAGE> 1
EXHIBIT 8(i)

PARTICIPATION AGREEMENT

By and Among

OCC ACCUMULATION TRUST

And

BANKERS LIFE INSURANCE COMPANY OF NEW YORK

And

OCC DISTRIBUTORS

THIS AGREEMENT, made and entered into this __ day of __________ 1998 by
and among BANKERS LIFE INSURANCE COMPANY OF NEW YORK, a New York Corporation
(hereinafter the "Company"), on its own behalf and on behalf of each separate
account of the Company named in Schedule 1 to this Agreement, as may be amended
from time to time (each account referred to as the "Account"), OCC ACCUMULATION
TRUST, an open-end diversified management investment company organized under the
laws of the State of Massachusetts (hereinafter the "Fund") and OCC
DISTRIBUTORS, a Delaware general partnership (hereinafter the "Underwriter").

WHEREAS, the Fund engages in business as an open-end diversified,
management investment company and was established for the purpose of serving as
the investment vehicle for separate accounts established for variable life
insurance contracts and variable annuity contracts to be offered by insurance
companies which have entered into participation agreements substantially
identical to this Agreement (hereinafter "Participating Insurance Companies");
and

- 1 -
<PAGE> 2

WHEREAS, beneficial interests in the Fund are divided into several series
of shares, each representing the interest in a particular managed portfolio of
securities and other assets (the "Portfolios"); and

WHEREAS, the Fund has obtained an order from the Securities & Exchange
Commission (alternatively referred to as the "SEC" or the "Commission"), dated
February 23, 1995 (File No. 812-9290), granting Participating Insurance
Companies and variable annuity separate accounts and variable life insurance
separate accounts relief from the provisions of Sections 9(a), 13(a), 15(a), and
15(b) of the Investment Company Act of 1940, as amended, (hereinafter the "1940
Act") and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent
necessary to permit shares of the Fund to be sold to and held by variable
annuity separate accounts and variable life insurance separate accounts of both
affiliated and unaffiliated Participating Insurance Companies and qualified
pension and retirement plans (hereinafter the "Mixed and Shared Funding
Exemptive Order"), and

WHEREAS, the Company has registered or will register certain variable
annuity contracts (the "Contracts") under the 1933 Act; and

WHEREAS, the Account is a duly organized, validly existing segregated
asset account, established by resolution of the Board of Directors of the
Company under the insurance laws of the State of New York, to set aside and
invest assets attributable to the Contracts; and

- 2 -
<PAGE> 3

WHEREAS, the Company has registered the Account as a unit investment trust
under the 1940 Act; and

WHEREAS, the Underwriter is registered as a broker-dealer with the SEC
under the Securities Exchange Act of 1934, as amended (hereinafter the "1934
Act"), and is a member in good standing of the National Association of
Securities Dealers, Inc. (hereinafter "NASD"), and

WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Portfolios named in
Schedule 2 on behalf of the Account to fund the Contracts and the Underwriter is
authorized to sell such shares to unit investment trusts such as the Account at
net asset value;

NOW, THEREFORE, in consideration of their mutual promises, the Company,
the Fund and the Underwriter agree as follows:

ARTICLE I

SALE OF FUND SHARES

1.1. The Underwriter agrees to sell to the Company those shares of the
Fund which the Company orders on behalf of the Account, executing such orders on
a daily basis at the net asset value next computed after receipt and acceptance
by the Fund or its designee of the order for the shares of the Fund. For
purposes of this Section 1.1, the Company shall be the designee of the Fund for
receipt of such orders from each Account and receipt by such designee shall
constitute receipt by the Fund; provided that the Fund receives notice of such
order by 10:00 a.m. Eastern Time on the next following Business Day. "Business
Day" shall mean any day on which the New York Stock Exchange is open for trading
and on which the Fund calculates its net asset value pursuant to the rules of
the SEC.

- 3 -
<PAGE> 4

1.2. The Company shall pay for Fund shares on the next Business Day after
it places an order to purchase Fund shares in accordance with Section 1.1
hereof. Payment shall be in federal funds transmitted by wire.

1.3. The Fund agrees to make its shares available indefinitely for
purchase at the applicable net asset value per share by Participating Insurance
Companies and their separate accounts on those days on which the Fund calculates
its net asset value pursuant to rules of the SEC; provided, however, that the
Board of Trustees of the Fund (hereinafter the "Directors") may refuse to sell
shares of any Portfolio to any person, or suspend or terminate the offering of
shares of any Portfolio if such action is required by law or by regulatory
authorities having jurisdiction or is, in the sole discretion of the Directors,
acting in good faith and in light of their fiduciary duties under federal and
any applicable state laws, necessary in the best interests of the shareholders
of any Portfolio.

1.4. The Fund and the Underwriter agree that shares of the Fund will be
sold only to Participating Insurance Companies and their separate accounts,
qualified pension and retirement plans or such other persons as are permitted
under applicable provisions of the Internal Revenue Code of 1986, as amended,
(the "Internal Revenue Code"), and regulations promulgated thereunder, the sale
to which will not impair the tax treatment currently afforded the contracts. No
shares of any Portfolio will be sold to the general public.

1.5. The Fund and the Underwriter will not sell Fund shares to any
insurance company or separate account unless an agreement containing provisions
substantially the same as Articles I, III, V, and VII of this Agreement are in
effect to govern such sales. The Fund shall make available upon written request
from the Company (i) a list of all other Participating Insurance

- 4 -
<PAGE> 5

Companies and (ii) a copy of the Participation Agreement executed by any other
Participating Insurance Company.

1.6. The Fund agrees to redeem for cash, upon the Company's request, any
full or fractional shares of the Fund held by the Company, executing such
requests on a daily basis at the net asset value next computed after receipt and
acceptance by the Fund or its designee of the request for redemption. For
purposes of this Section 1.6, the Company shall be the designee of the Fund for
receipt of requests for redemption from each Account and receipt by such
designee shall constitute receipt by the Fund; provided the Fund receives notice
of request for redemption by 10:00 a.m. Eastern Time on the next following
Business Day. Payment shall be in federal funds transmitted by wire to the
Company's account as designated by the Company in writing from time to time, on
the same Business Day the Fund receives notice of the redemption order from the
Company except that the Fund reserves the right to delay payment of redemption
proceeds, but in no event may such payment be delayed longer than the period
permitted under Section 22(e) of the 1940 Act. Neither the Fund nor the
Underwriter shall bear any responsibility whatsoever for the proper disbursement
or crediting of redemption proceeds; the Company alone shall be responsible for
such action. If notification of redemption is received after 11:00 a.m. Eastern
Time, payment for redeemed shares will be made on the next following Business
Day.

1.7 The Company agrees to purchase and redeem the shares of the Portfolios
named in Schedule 2 offered by the then current prospectus of the Fund in
accordance with the provisions of such prospectus. The Company agrees that all
net amounts available under the Contracts shall be invested in the Fund, or in
the Company's general account; provided that such

- 5 -
<PAGE> 6

amounts may also be invested in an investment company other than the Fund if (a)
such other investment company, or series thereof, has investment objectives or
policies that are substantially different from the investment objectives and
policies of the Portfolios of the Fund named in Schedule 2; or (b) the Company
gives the Fund and the Underwriter 45 days written notice of its intention to
make such other investment company available as a funding vehicle for the
Contracts; or (c) such other investment company was available as a funding
vehicle for the Contracts prior to the date of this Agreement and the Company so
informs the Fund and Underwriter prior to their signing this Agreement; or (d)
the Fund or Underwriter consents in writing to the use of such other investment
company.

1.8. Issuance and transfer of the Fund's shares will be by book entry
only. Stock certificates will not be issued to the Company or any Account.
Purchase and redemption orders for Fund shares will be recorded in an
appropriate title for each Account or the appropriate subaccount of each
Account.

1.9. The Fund shall furnish notice as soon as reasonably practicable to
the Company of any income, dividends or capital gain distributions payable on
the Fund's shares. The Company hereby elects to receive all such dividends and
distributions as are payable on the Portfolio shares in the form of additional
shares of that Portfolio. The Company reserves the right to revoke this election
and to receive all such dividends and distributions in cash. The Fund shall
notify the Company of the number of shares so issued as payment of such
dividends and distributions.

1.10. The Fund shall make the net asset value per share for each Portfolio
available to the Company on a daily basis as soon as reasonably practical after
the net asset value per share is

- 6 -
<PAGE> 7

calculated and shall use its best efforts to make such net asset value per share
available by 5:30 p.m., Eastern Time, each business day.

ARTICLE II

REPRESENTATIONS AND WARRANTIES

2.1. The Company represents and warrants that the Contracts are or will be
registered under the 1933 Act and that the Contracts will be issued and sold in
compliance with all applicable federal and state laws. The Company further
represents and warrants that it is an insurance company duly organized and in
good standing under applicable law and that it has legally and validly
established each Account as a segregated asset account under applicable state
law and has registered each Account as a unit investment trust in accordance
with the provisions of the 1940 Act to serve as segregated investment accounts
for the Contracts, and that it will maintain such registration for so long as
any Contracts are outstanding. The Company shall amend the registration
statement under the 1933 Act for the Contracts and the registration statement
under the 1940 Act for the Account from time to time as required in order to
effect the continuous offering of the Contracts or as may otherwise be required
by applicable law. The Company shall register and qualify the Contracts for sale
in accordance with the securities laws of the various states only if and to the
extent deemed necessary by the Company.

2.2. Subject to Article VI hereof, the Company represents that it believes
that the Contracts are currently and at the time of issuance will be treated as
annuity contracts under applicable provisions of the Internal Revenue Code and
that it will make every effort to maintain such treatment and that it will
notify the Fund and the Underwriter immediately upon having a

- 7 -
<PAGE> 8

reasonable basis for believing that the Contracts have ceased to be so treated
or that they might not be so treated in the future.

2.3. The Fund represents and warrants that Fund shares sold pursuant to
this Agreement shall be registered under the 1933 Act and duly authorized for
issuance in accordance with applicable law and that the Fund is and shall remain
registered under the 1940 Act for as long as the Fund shares are sold. The Fund
shall amend the registration statement for its shares under the 1933 Act and the
1940 Act from time to time as required in order to effect the continuous
offering of its shares. The Fund shall register and qualify the shares for sale
in accordance with the laws of the various states only if and to the extent
deemed advisable by the Fund or the Underwriter.

2.4. The Fund represents that it is currently qualified as a Regulated
Investment Company under Subchapter M of the Internal Revenue Code, and that it
will make every effort to maintain such qualification (under Subchapter M or any
successor or similar provision) and that it will notify the Company immediately
upon having a reasonable basis for believing that it has ceased to so qualify or
that it might not so qualify in the future.

2.5. The Fund represents that its investment objectives, policies and
restrictions comply with applicable state investment laws as they may apply to
the Fund. To the extent feasible and consistent with market conditions, the Fund
will adjust its investments to comply with the insurance and other applicable
laws of the Company's state of domicile upon written notice from the Company of
such requirements and proposed adjustments, it being agreed and understood that
in any such case the Fund shall be allowed a reasonable period of time under the
circumstances after receipt of such notice to make any such adjustment. The
Company alone

- 8 -
<PAGE> 9

shall be responsible for informing the Fund of any additional restrictions
imposed by state laws which are applicable to the Fund.

2.6. The Fund currently does not intend to make any payments to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act or otherwise,
although it may make such payments in the future. To the extent that it decides
to finance distribution expenses pursuant to Rule 12b-1, the Fund undertakes to
have its Board of Trustees, a majority of whom are not interested persons of the
Fund, formulate and approve any plan under Rule 12b- 1 to finance distribution
expenses. The Fund shall notify the Company immediately upon determining to
finance distribution expenses pursuant to Rule 12b-1.

2.7. The Underwriter represents and warrants that it is a member in good
standing of the National Association of Securities Dealers, Inc., ('`NASD") and
is registered as a broker-dealer with the SEC. The Underwriter further
represents that it will sell and distribute the Fund shares in accordance with
all applicable federal and state securities laws, including without limitation
the 1933 Act, the 1934 Act, and the 1940 Act.

2.8. The Fund represents that it is lawfully organized and validly
existing under the laws of Massachusetts and that it does and will comply with
applicable provisions of the 1940 Act.

2.9. The Underwriter represents and warrants that the Fund's Adviser,
Quest for Value Advisors, is and shall remain duly registered under all
applicable federal and state securities laws and that the Adviser will perform
its obligations to the Fund in accordance with the laws of Massachusetts and any
applicable state and federal securities laws.

- 9 -
<PAGE> 10

2.10. The Fund and Underwriter represent and warrant that all of their
directors, officers, employees, investment advisers, and other
individuals/entities having access to the funds and/or securities of the Fund
are and continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Fund in an amount not less than the
minimal coverage as required currently by Rule 17g-(1) of the 1940 Act or
related provisions as may be promulgated from time to time. The aforesaid Bond
includes coverage for larceny and embezzlement and is issued by a reputable
bonding company.

2.11. The Company represents and warrants that all of its directors,
officers, employees, investment advisers, and other individuals/entities dealing
with the money and/or securities of the Fund are covered by a blanket fidelity
bond or similar coverage in an amount not less than $5 million. The aforesaid
includes coverage for larceny and embezzlement and is issued by a reputable
bonding company. The Company agrees that any amounts received under such bond in
connection with claims that derive from arrangements described in this Agreement
will be held by the Company for the benefit of the Fund. The Company agrees to
make all reasonable efforts to see that this bond or another bond containing
these provisions is always in effect, and agrees to notify the Fund and the
Underwriter in the event that such coverage no longer applies.

ARTICLE III

PROSPECTUSES AND PROXY STATEMENTS; VOTING

3.1. The Underwriter shall provide the Company, at the Company's expense,
with as many copies of the Fund's current prospectus describing only those
Portfolios set forth on Schedule 2, as the Company may reasonably request for
use with prospective contractowners and applicants. The Underwriter shall print
and distribute, at the Fund's or Underwriter's expense, as

- 10 -
<PAGE> 11

many copies of said prospectus as necessary for distribution to existing
contractowners or participants. If requested by the Company in lieu thereof, the
Fund shall provide such documentation including a final copy of a current
prospectus describing only those Portfolios set forth on Schedule 2, set in type
at the Fund's expense and other assistance as is reasonably necessary in order
for the Company at least annually (or more frequently if the Fund prospectus is
amended more frequently) to have the new prospectus for the Contracts and the
Fund's new prospectus printed together in one document, in such case the Fund
shall bear its share of expenses as described above.

3.2. The Fund's prospectus shall state that the Statement of Additional
Information for the Fund is available from the Underwriter or alternatively from
the Company (or, in the Fund's discretion, the Prospectus shall state that such
Statement is available from the Fund), and the Underwriter (or the Fund) shall
provide such Statement, at its expense, to the Company and to any owner of or
participant under a Contract who requests such Statement or, at the Company's
expense, to any prospective contract owner and applicant who requests such
statement.

3.3. The Fund, at its expense, shall provide the Company with copies of
its proxy material, if any, reports to shareholders and other communications to
shareholders in such quantity as the Company shall reasonably require and shall
bear the costs of distributing them to existing contract owners or participants.

3.4. If and to the extent required by law the Company shall:

(i) solicit voting instructions from contract owners or
participants;

(ii) vote the Fund shares held in the Account in accordance with
instructions received from contract owners or participants;
and

- 11 -
<PAGE> 12

(iii) vote Fund shares held in the Account for which no timely
instructions have been received, in the same proportion as
Fund shares of such Portfolio for which instructions have been
received from the Company's contract owners or participants;

so long as and to the extent that the SEC continues to interpret the 1940 Act to
require pass-through voting privileges for variable contract owners. The Company
reserves the right to vote Fund shares held in any segregated asset account in
its own right, to the extent permitted by law. Participating Insurance Companies
shall be responsible for assuring that each of their separate accounts
participating in the Fund calculates voting privileges in a manner consistent
with other Participating Insurance Companies and as required by the Mixed and
Shared Funding Exemptive Order.

3.5. The Fund will comply with all provisions of the 1940 Act requiring
voting by shareholders, and in particular as required, the Fund will either
provide for annual meetings or comply with Section 16(c) of the 1940 Act
(although the Fund is not one of the trusts described in Section 16(c) of that
Act) as well as with Sections 16(a) and, if and when applicable, 16(b). Further,
the Fund will act in accordance with the SEC interpretation of the requirements
of Section 16(a) with respect to periodic elections of directors and with
whatever rules the Commission may promulgate with respect thereto.

ARTICLE IV

SALES MATERIAL AND INFORMATION

4.1. The Company shall furnish, or shall cause to be furnished, to the
Fund or the Underwriter, each piece of sales literature or other promotional
material in which the Fund or the Fund's adviser or the Underwriter is named, at
least fifteen business days prior to its use. No

- 12 -
<PAGE> 13

such material shall be used if the Fund or the Underwriter reasonably objects in
writing to such use within fifteen business days after receipt of such material.

4.2. The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund in
connection with the sale of the Contracts other than the information or
representations contained in the registration statement or prospectus for the
Fund shares, as such registration statement and prospectus may be amended or
supplemented from time to time, or in reports or proxy statements for the Fund,
or in sales literature or other promotional material approved by the Fund or by
the Underwriter, except with the permission of the Fund or the Underwriter. The
Fund and the Underwriter agree to respond to any request for approval on a
prompt and timely basis.

4.3. The Fund or the Underwriter shall furnish, or shall cause to be
furnished, to the Company or its designee, each piece of sales literature or
other promotional material in which the Company or its separate account is
named, at least fifteen business days prior to its use. No such material shall
be used if the Company reasonably objects in writing to such use within fifteen
business days after receipt of such material.

4.4. The Fund and the Underwriter shall not give any information or make
any representations on behalf of the Company or concerning the Company, each
Account, or the Contracts other than the information or representations
contained in a registration statement or prospectus for the Contracts, as such
registration statement and prospectus may be amended or supplemented from time
to time, or in published reports for each Account which are in the public domain
or approved by the Company for distribution to contract owners or participants,
or in sales literature or other promotional material approved by the Company,
except with the

- 13 -
<PAGE> 14

permission of the Company. The Company agrees to respond to any request for
approval on a prompt and timely basis.

4.5. The Fund will provide to the Company at least one complete copy of
all registration statements, prospectuses, statements of additional information,
reports, proxy statements, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and all amendments
to any of the above, that relate to the Fund or its shares, contemporaneously
with the filing of such document with the SEC or other regulatory authorities.

4.6. The Company will provide to the Fund at least one complete copy of
all registration statements, prospectuses, statements of additional information,
reports, solicitations for voting instructions, sales literature and other
promotional materials, applications for exemptions, requests for no-action
letters, and all amendments to any of the above, that relate to the Contracts or
each Account, contemporaneously with the filing of such document with the SEC or
other regulatory authorities.

4.7. For purposes of this Article IV, the phrase "sales literature or
other promotional material" includes, but is not limited to, advertisements
(such as material published, or designed for use in, a newspaper, magazine, or
other periodical, radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, or other public media), sales
literature (i.e, any written communication distributed or made generally

- 14 -
<PAGE> 15

available to customers or the public, including brochures, circulars, research
reports, market letters, form letters, seminar texts, reprints or excerpts of
any other advertisement, sales literature, or published article), educational or
training materials or other communications distributed or made generally
available to some or all agents or employees, registration statements,
prospectuses, statements of additional information, shareholder reports, and
proxy materials and any other material constituting sales literature or
advertising under NASD rules, the 1940 Act or the 1933 Act.

4.8. The Company agrees and acknowledges that Oppenheimer Capital is the
sole owner of the name and mark "Quest for Value" and that all use of any
designation comprised in whole or part of such name or mark under this Agreement
shall inure to the benefit of Oppenheimer Capital. Except as provided in Section
4.1, the Company shall not use any such name or mark on its own behalf or on
behalf of each Account in connection with marketing the Contracts without prior
written consent of Oppenheimer Capital. Upon termination of this Agreement for
any reason, the Company shall cease all use of any such name or mark.

ARTICLE V

FEES AND EXPENSES

5.1. The Fund and Underwriter shall pay no fee or other compensation to
the Company under this Agreement, except that if the Fund or any Portfolio
adopts and implements a plan pursuant to Rule 12b-1 to finance distribution
expenses, then, subject to obtaining any required exemptive orders or other
regulatory approvals, the Underwriter may make payments to the Company or to the
underwriter for the Contracts if and in amounts agreed to by the Underwriter in
writing. Currently, no such payments are contemplated.

5.2. All expenses incident to performance by the Fund of this Agreement
shall be paid by the Fund to the extent permitted by law. All Fund shares will
be duly authorized for issuance and registered in accordance with applicable
federal law and to the extent deemed advisable by the Fund, in accordance with
applicable state law, prior to sale. The Fund shall bear the expenses

- 15 -
<PAGE> 16

for the cost of registration and qualification of the Fund's shares, preparation
and filing of the Fund's prospectus and registration statement, Fund proxy
materials and reports, setting in type, printing and distributing the
prospectuses, the proxy materials and reports to existing shareholders and
contractowners, the preparation of all statements and notices required by any
federal or state law, all taxes on the issuance or transfer of the Fund's
shares, and any expenses permitted to be paid or assumed by the Fund pursuant to
a plan, if any, under Rule 12b-1 under the 1940 Act.

ARTICLE VI

DIVERSIFICATION

6.1. The Fund will at all times invest money from the Contracts in such a
manner as to ensure that the Contracts will be treated as variable contracts
under the Internal Revenue Code and the regulations issued thereunder. Without
limiting the scope of the foregoing, the Fund will comply with Section 81 7(h)
of the Internal Revenue Code and Treasury Regulation 1.817-5, relating to the
diversification requirements for variable annuity, endowment, or life insurance
contracts and any amendments or other modifications to such Section or
Regulations. In the event of a breach of this Article VI by the Fund, it will
take all reasonable steps (a) to notify the Company of such breach and (b) to
adequately diversify the Fund so as to achieve compliance within the grace
period afforded by Treasury Regulation 1.817-5.

ARTICLE VI

POTENTIAL CONFLICTS

7.1. The Board of Trustees of the Fund (the "Fund Board") will monitor the
Fund for the existence of any material irreconcilable conflict among the
interests of the contractowners of

- 16 -
<PAGE> 17

all separate accounts investing in the Fund. An irreconcilable material conflict
may arise for a variety of reasons, including: (a) an action by any state
insurance regulatory authority; (b) a change in applicable federal or state
insurance, tax, or securities laws or regulations, or a public ruling, private
letter ruling, no-action or interpretative letter, or any similar action by
insurance, tax, or securities regulatory authorities; (c) an administrative or
judicial decision in any relevant proceeding; (d) the manner in which the
investments of any Portfolio are being managed; (e) a difference in voting
instructions given by Participating Insurance Companies or by variable annuity
contract and variable life insurance contractowners; or (f) a decision by an
insurer to disregard the voting instructions of contractowners. The Board shall
promptly inform the Company if it determines that an irreconcilable material
conflict exists and the implications thereof. A majority of the Fund Board shall
consist of persons who are not "interested" persons of the Fund.

7.2. The Company has reviewed a copy of the Mixed and Shared Funding
Exemptive Order, and in particular, has reviewed the conditions to the requested
relief set forth therein. As set forth in the Mixed and Shared Funding Exemptive
Order, the Company will report any potential or existing conflicts of which it
is aware to the Fund Board. The Company agrees to assist the Fund Board in
carrying out its responsibilities under the Mixed and Shared Funding Exemptive
Order, by providing the Fund Board with all information reasonably necessary for
the Fund Board to consider any issues raised. This includes, but is not limited
to, an obligation by the Company to inform the Fund Board whenever contractowner
voting instructions are disregarded. The Fund Board shall record in its minutes
or other appropriate records, all reports received by it and all action with
regard to a conflict.

- 17 -
<PAGE> 18

7.3 If it is determined by a majority of the Fund Board, or a majority of
its disinterested Directors, that an irreconcilable material conflict exists,
the Company and other Participating Insurance Companies shall, at their expense
and to the extent reasonably practicable (as determined by a majority of the
disinterested Directors), take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflict, up to and including: (1)
withdrawing the assets allocable to some or all of the separate accounts from
the Fund or any Portfolio and reinvesting such assets in a different investment
medium, including (but not limited to) another Portfolio of the Fund, or
submitting the question whether such segregation should be implemented to a vote
of all affected contractowners and, as appropriate, segregating the assets of
any appropriate group (i.e., variable annuity contractowners or variable life
insurance contractowners, of one or more Participating Insurance Companies) that
votes in favor of such segregation, or offering to the affected contractowners
the option of making such a change; and (2) establishing a new registered
management investment company or managed separate account.

7.4. If the Company's disregard of voting instructions could conflict with
the majority of contractowner voting instructions, and the Company's judgment
represents a minority position or would preclude a majority vote, the Company
may be required, at the Fund's election, to withdraw the Account's investment in
the Fund and terminate this Agreement with respect to such Account. Any such
withdrawal and termination shall take place within six (6) months after written
notice is given that this provision is being implemented. Until such withdrawal
and termination is implemented, the Underwriter and the Fund shall continue to
accept and implement orders by the Company for the purchase and redemption of
shares of the Fund. Such

- 18 -
<PAGE> 19

withdrawal and termination shall be limited to the extent required by the
foregoing material irreconcilable conflict as determined by a majority of
disinterested Directors.

7.5. If a particular state insurance regulator's decision applicable to
the Company conflicts with the majority of other state insurance regulators,
then the Company will withdraw the Account's investment in the Fund and
terminate this Agreement with respect to such Account within six (6) months
after the Fund informs the Company in writing that it has determined that such
decision has created an irreconcilable material conflict. Until such withdrawal
and termination is implemented, the Underwriter and the Fund shall continue to
accept and implement orders by the Company for the purchase and redemption of
shares of the Fund. Such withdrawal and termination shall be limited to the
extent required by the foregoing material irreconcilable conflict as determined
by a majority of disinterested Directors.

7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a
majority of the disinterested members of the Fund Board shall determine whether
any proposed action adequately remedies any irreconcilable material conflict,
but in no event with the Fund be required to establish a new funding medium for
the Contracts. The Company shall not be required by Section 7.3 to establish a
new funding medium for the Contracts if an offer to do so has been declined by
vote of a majority of contractowners materially adversely affected by the
irreconcilable material conflict.

7.7. The Company shall at least annually submit to the Fund Board
such reports, materials or data as the Fund Board may reasonably request so that
the Fund Board may fully carry out the duties imposed upon it as delineated in
the Mixed and Shared Funding Exemptive

- 19 -
<PAGE> 20

Order, and said reports, materials and data shall be submitted more frequently
if deemed appropriate by the Fund Board.

7.8. If and to the extent that Rule 6e-2 and Rule 6e-3 (T) are amended, or
Rule 6e-3 is adopted, to provide exemptive relief from any provision of the Act
or the rules promulgated thereunder with respect to mixed or shared funding (as
defined in the Mixed and Shared Funding Exemptive Order) on terms and conditions
materially different from those contained in the Mixed and Shared Funding
Exemptive Order, (a) the Fund and/or the Participating Insurance Companies, as
appropriate, shall take such steps as may be necessary to comply with Rules 6e-2
and 6e-3 (T), as amended, and Rule 6e-3, as adopted, to the extent such rules
are applicable; and (b) Sections 3.4, 3.5, 7.1, 7.2, 7.3, 7.4, and 7.5 of this
Agreement shall continue in effect only to the extent that terms and conditions
substantially identical to such Sections are contained in such Rule(s) as so
amended or adopted.

ARTICLE VIII

INDEMNIFICATION

8.1. Indemnification By The Company

(a) The Company agrees to indemnify and hold harmless the Fund,
the Underwriter, and each of the Fund's or the Underwriter's directors,
officers, employees or agents and each person, if any, who controls the Fund or
the Underwriter within the meaning of such terms under the federal securities
laws (collectively, the "Indemnified Parties" for purposes of this Section 8.1)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Company) or litigation (including
reasonable legal and other expenses), to which the Indemnified Parties may
become subject under any statute,

- 20 -
<PAGE> 21

regulation, at common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) or settlements:

(i) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained
in the registration statement, prospectus or statement
of information for the Contracts or contained in the
Contracts or sales literature or other promotional
material for the Contracts (or any amendment or
supplement to any of the foregoing), or arise out of or
are based upon the omission or the alleged omission to
state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading in light of the circumstances in which they
were made; provided that this agreement to indemnify
shall not apply as to any indemnified party if such
statement or omission or such alleged statement or
omission was made in reliance upon and in conformity
with information furnished to the Company by or on
behalf of the Fund for use in the registration
statement, prospectus or statement of information for
the Contracts or in the Contracts or sales literature
(or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Fund
shares; or

(ii) arise out of or as a result of statements or
representations by or on behalf of the Company (other
than statements or representations contained in the Fund
registration statement, Fund prospectus or sales
literature or other promotional material of the Fund not
supplied by the Company or persons under its control) or
wrongful conduct of the Company or persons under its
control, with respect to the sale or distribution of the
Contracts or Fund shares; or

(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in the Fund
registration statement, Fund prospectus, statement of
additional information or sales literature or other
promotional material of the Fund or any amendment
thereof or supplement thereto or the omission or alleged
omission to state therein a material fact required to be
stated therein or necessary to make the statements
therein not misleading in light of the circumstances in
which they were made, if such a statement or omission
was made in reliance upon and in conformity with
information furnished to the Fund by or on behalf of the
Company or persons under its control; or

- 21 -
<PAGE> 22

(iv) arise as a result of any failure by the Company to
provide the services and furnish the materials or to
make any payments under the terms of this Agreement; or

(v) arise out of any material breach of any representation
and/or warranty made by the Company in this Agreement or
arise out of or result from any other material breach by
the Company of this Agreement;

except to the extent provided in Sections 8.1(b) and 8.3 hereof. This
indemnification shall be in addition to any liability which the Company may
otherwise have.

(b) No party shall be entitled to indemnification if such loss,
claim, damage, liability or litigation is due to the willful misfeasance, bad
faith, gross negligence or reckless disregard of duty by the party seeking
indemnification.

(c) The Indemnified Parties will promptly notify the Company of
the commencement of any litigation or proceedings against them in connection
with the issuance or sale of the Fund shares or the Contracts or the operation
of the Fund.

8.2. Indemnification By the Underwriter

(a) The Underwriter, on its own behalf and on behalf of the Fund,
agrees to indemnify and hold harmless the Company and each of its directors,
officers, employees or agents and each person, if any, who controls the Company
within the meaning of such terms under the federal securities laws
(collectively, the "Indemnified Parties" for purposes of this Section 8.2)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Underwriter) or litigation
(including reasonable legal and other expenses) to which the Indemnified Parties
may become subject under any statute,

- 22 -
<PAGE> 23

regulation, at common law or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) or settlements:

(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained
in the registration statement, prospectus or statement
of additional information for the Fund or sales
literature or other promotional material of the Fund (or
any amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission or the
alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading in light of the
circumstances in which they were made; provided that
this agreement to indemnify shall not apply as to any
indemnified party if such statement or omission or such
alleged statement or omission was made in reliance upon
and in conformity with information furnished to the
Underwriter or Fund by or on behalf of the Company for
use in the registration statement, prospectus or
statement of additional information for the Fund or in
sales literature of the Fund (or any amendment or
supplement thereto) or otherwise for use in connection
with the sale of the Contracts or Fund shares; or

(ii) arise out of or as a result of statements or
representations (other than statements or
representations contained in the Contracts or in the
Contract or Fund registration statement, the Contract or
Fund prospectus, statement of additional information, or
sales literature or other promotional material for the
Contracts or of the Fund not supplied by the Underwriter
or the Fund or persons under the control of the
Underwriter or the Fund respectively) or wrongful
conduct of the Underwriter or the Fund or persons under
the control of the Underwriter or the Fund respectively,
with respect to the sale or distribution of the
Contracts or Fund shares; or

(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, statement of additional
information or sales literature or other promotional
material covering the Contracts (or any amendment
thereof or supplement thereto), or the omission or
alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statement or statements therein not misleading in light
of the circumstances in which they were made, if such
statement or omission was made in reliance upon and in

- 23 -
<PAGE> 24

conformity with information furnished to the Company by
or on behalf of the Underwriter or the Fund or persons
under the control of the Underwriter or the Fund; or

(iv) arise as a result of any failure by the Fund to provide
the services and furnish the materials under the terms
of this Agreement (including a failure, whether
unintentional or in good faith or otherwise, to comply
with the diversification requirements and procedures
related thereto specified in Article VI of this
Agreement); or

(v) arise out of or result from any material breach of any
representation and/or warranty made by the Underwriter
or the Fund in this Agreement or arise out of or result
from any other material breach of this Agreement by the
Underwriter or the Fund;

except to the extent provided in Sections 8.2(b) and 8.3 hereof. This
indemnification shall be in addition to any liability which the Underwriter may
otherwise have.

(c) The Indemnified Parties will promptly notify the Underwriter
of the commencement of any litigation or proceedings against them in connection
with the issuance or sale of the Contracts or the operation of the Account.

8.3. Indemnification Procedure

Any person obligated to provide indemnification under this Article
VIII ("Indemnifying Party" for the purpose of this Section 8.3) shall not be
liable under the indemnification provisions of this Article VIII with respect to
any claim made against a party entitled to indemnification under this Article
VIII ("Indemnified Party" for the purpose of this Section 8.3) unless such
indemnified party shall have notified the indemnifying party in writing

- 24 -
<PAGE> 25

within a reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
indemnified party (or after such party shall have received notice of such
service on any designated agent), but failure to notify the indemnifying party
of any such claim shall not relieve the indemnifying party from any liability
which it may have to the indemnified party against whom such action is brought
under the indemnification provision of this Article VIII, except to the extent
that the failure to notify results in the failure of actual notice to the
indemnifying party and such indemnifying party is damaged solely as a result of
failure to give such notice. In case any such action is brought against the
indemnified party, the indemnifying party will be entitled to participate, at
its own expense, in the defense thereof. The indemnifying party also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the indemnifying party to the indemnified
party of the indemnifying party's election to assume the defense thereof, the
indemnified party shall bear the fees and expenses of any additional counsel
retained by it, and the indemnifying party will not be liable to such party
under this Agreement for any legal or other expenses subsequently incurred by
such party independently in connection with the defense thereof other than
reasonable costs of investigation, unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such counsel or
(ii) the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and representation
of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written consent
but if settled with such consent or if there be a final judgment for the
plaintiff,

- 25 -
<PAGE> 26

the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.

A successor by law of the parties to this Agreement shall be entitled
to the benefits of the indemnification contained in this Article VIII. The
indemnification provisions contained in this Article VIII shall survive any
termination of this Agreement.

ARTICLE IX

APPLICABLE LAW

9.1 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of New York.

9.2. This Agreement shall be subject to the provisions of the 1933, 1934
and 1940 Acts, and the rules and regulations and rulings thereunder, including
such exemptions from those statutes, rules and regulations as the SEC may grant
(including, but not limited to the Mixed and Shared Funding Exemptive Order) and
the terms hereof shall be interpreted and construed in accordance therewith.

ARTICLE X

TERMINATION

10.1. This Agreement shall terminate:

(a) at the option of any party upon six months advance written
notice to the other parties unless otherwise agreed in a separate written
agreement among the parties; or

(b) at the option of the Company if shares of the Portfolios
delineated in Schedule 2 are not reasonably available to meet the requirements
of the Contracts as determined by the Company; or

- 26 -
<PAGE> 27

(c) at the option of the Fund upon institution of formal
proceedings against the Company by the NASD, the SEC, the insurance commission
of any state or any other regulatory body regarding the Company's duties under
this Agreement or related to the sale of the Contracts, the administration of
the Contracts, the operation of the Account, or the purchase of the Fund shares,
which would have a material adverse effect on the Company's ability to perform
its obligations under this Agreement; or

(d) at the option of the Company upon institution of formal
proceedings against the Fund or the Underwriter by the NASD, the SEC, or any
state securities or insurance department or any other regulatory body, which
would have a material adverse effect on the Underwriter's or the Fund's ability
to perform its obligations under this Agreement; or

(e) at the option of the Company or the Fund upon receipt of any
necessary regulatory approvals or the vote of the contractowners having an
interest in the Account (or any subaccount) to substitute the shares of another
investment company for the corresponding Portfolio shares of the Fund in
accordance with the terms of the Contracts for which those Portfolio shares had
been selected to serve as the underlying investment media. The Company will give
30 days prior written notice to the Fund of the date of any proposed vote or
other action taken to replace the Fund's shares; or

(f) at the option of the Company or the Fund upon a determination
by a majority of the Fund Board, or a majority of the disinterested Fund Board
members, that an irreconcilable material conflict exists among the interests of
(i) all contractowners of variable insurance products of all separate accounts
or (ii) the interests of the Participating Insurance Companies investing in the
Fund as delineated in Article VII of this Agreement; or

- 27 -
<PAGE> 28

(g) at the option of the Company if the Fund ceases to qualify as
a Regulated Investment Company under Subchapter M of the Internal Revenue Code,
or under any successor or similar provision, or if the Company reasonably
believes that the Fund may fail to so qualify; or

(h) at the option of the Company if the Fund fails to meet the
diversification requirements specified in Article VI hereof or if the Company
reasonably believes that the Fund will fail to meet such requirements; or

(i) at the option of any party to this Agreement, upon another
party's material breach of any provision of this Agreement; or

(j) at the option of the Company, if the Company determines in its
sole judgment exercised in good faith, that either the Fund or the Underwriter
has suffered a material adverse change in its business, operations or financial
condition since the date of this Agreement or is the subject of material adverse
publicity which is likely to have a material adverse impact upon the business
and operations of the Company; or

(k) at the option of the Fund or Underwriter, if the Fund or
Underwriter respectively, shall determine in its sole judgment exercised in good
faith, that the Company has suffered a material adverse change in its business,
operations or financial condition since the date of this Agreement or is the
subject of material adverse publicity which is likely to have a material adverse
impact upon the business and operations of the Fund or Underwriter; or

(l) subject to the Fund's compliance with Article VI hereof, at
the option of the Fund in the event any of the Contracts are not issued or sold
in accordance with applicable

- 28 -
<PAGE> 29

requirements of federal and/or state law. Termination shall be effective
immediately upon such occurrence without notice.

10.2 Notice Requirement

(a) In the event that any termination of this Agreement is based
upon the provisions of Article VII, such prior written notice shall be given in
advance of the effective date of termination as required by such provisions.

(b) In the event that any termination of this Agreement is based
upon the provisions of Sections 10.1 (b) - (d) or 10.1 (g) - (i), prompt written
notice of the election to terminate this Agreement for cause shall be furnished
by the party terminating the Agreement to the non-terminating parties, with said
termination to be effective upon receipt of such notice by the non-terminating
parties.

(c) In the event that any termination of this Agreement is based
upon the provisions of Sections 10.1(j) or 10.1(k), prior written notice of the
election to terminate this Agreement for cause shall be furnished by the party
terminating this Agreement to the nonterminating parties. Such prior written
notice shall be given by the party terminating this Agreement to the
non-terminating panics at least 30 days before the effective date of
termination.

10.3. It is understood and agreed that the right to terminate this
Agreement pursuant to Section 10.1 (a) may be exercised for any reason or for no
reason.

10.4. Effect of Termination

(a) Notwithstanding any termination of this Agreement pursuant to
Section 10.1 of this Agreement and subject to Section 1.3 of this Agreement, the
Company may require the Fund and the Underwriter to, continue to make available
additional shares of the Fund for so

- 29 -
<PAGE> 30

long after the termination of this Agreement as the Company desires pursuant to
the terms and conditions of this Agreement as provided in paragraph (b) below,
for all Contracts in effect on the effective date of termination of this
Agreement (hereinafter referred to as "Existing Contracts"). Specifically,
without limitation, the owners of the Existing Contracts shall be permitted to
reallocate investments in the Fund, redeem investments in the Fund and/or invest
in the Fund upon the making of additional purchase payments under the Existing
Contracts. The parties agree that this Section 10.4 shall not apply to any
terminations under Article VII and the effect of such Article VII terminations
shall be governed by Article VII of this Agreement.

(b) If shares of the Fund continue to be made available after
termination of this Agreement pursuant to this Section 10.4, the provisions of
this Agreement shall remain in effect except for Section 10.1(a) and thereafter
the Fund, the Underwriter, or the Company may terminate the Agreement, as so
continued pursuant to this Section 10.4, upon written notice to the other party,
such notice to be for a period that is reasonable under the circumstances but
need not be for more than 90 days.

10.5. Except as necessary to implement contractowner initiated or approved
transactions, or as required by state insurance laws or regulations, the Company
shall not redeem Fund shares attributable to the Contracts (as opposed to Fund
shares attributable to the Company's assets held in the Account), and the
Company shall not prevent contractowners from allocating payments to a Portfolio
that was otherwise available under the Contracts, until 90 days after the
Company shall have notified the Fund or Underwriter of its intention to do so.

ARTICLE XI

NOTICES

- 30 -
<PAGE> 31

Any notice shall be deemed duly given only if sent by hand, evidenced by
written receipt or by certified mail, return receipt requested, to the other
party at the address of such party set forth below or at such other address as
such party may from time to time specify in writing to the other party. All
notices shall be deemed given three business days after the date received or
rejected by the addressee.

If to the Fund: Mr. Bernard H. Garil
Vice President
OCC Accumulation Trust
200 Liberty Street
New York, NY 10281

If to the Company: Janis B. Funk, Esq.
Indianapolis Life Insurance Company
2960 North Meridian
P.O. Box 1230
Indianapolis, Indiana 46206

If to the Underwriter: Mr. Thomas E. Duggan
Secretary
OCC Distributors
200 Liberty Street
New York, NY 10281

ARTICLE XII

MISCELLANEOUS

12.1. All persons dealing with the Fund must look solely to the property
of the Fund for the enforcement of any claims against the Fund as neither the
Directors, officers, agents or shareholders assume any personal liability for
obligations entered into on behalf of the Fund.

12.2. Subject to law and regulatory authority, each party hereto shall
treat as confidential all information reasonably identified as such in writing
by any other party hereto (including without limitation the names and addresses
of the owners of the Contracts) and,

- 31 -
<PAGE> 32

except as contemplated by this Agreement, shall not disclose, disseminate or
utilize such confidential information until such time as it may come into the
public domain without the express prior written consent of the affected party.

12.3. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.

12.4. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.

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

12.6. This Agreement shall not be assigned by any party hereto without the
prior written consent of all the parties.

12.7. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD and state insurance regulators) and shall permit each other and such
authorities reasonable access to its books and records in connection with any
investigation or inquiry relating to this Agreement or the transactions
contemplated hereby.

12.8. Each party represents that the execution and delivery of this
Agreement and the consummation of the transactions contemplated herein have been
duly authorized by all necessary corporate or trust action, as applicable, by
such party and when so executed and delivered this Agreement will be the valid
and binding obligation of such party enforceable in accordance with its terms.

- 32 -
<PAGE> 33

12.9. The parties to this Agreement may amend the schedules to this
Agreement from time to time to reflect changes in or relating to the
Contracts, the Accounts or the Portfolios of the Fund.

IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and behalf by its duly authorized
representative as of the date and year first written above.

Company:

BANKERS LIFE INSURANCE COMPANY OF NEW
YORK

By:
---------------------------------

Fund:

OCC ACCUMULATION TRUST

By:
---------------------------------

Underwriter:

OCC DISTRIBUTORS

By:
---------------------------------

- 33 -
<PAGE> 34

SCHEDULE 1

Participation Agreement
Among
OCC Accumulation Trust, Bankers Life Insurance Company of New York
and
OCC Distributors

The following separate accounts of Bankers Life Insurance Company of New
York are permitted in accordance with the provisions of this Agreement to invest
in Portfolios of the Fund shown in Schedule 2:

Bankers Life Insurance Company of New York Separate Account I

- 34 -
<PAGE> 35

SCHEDULE 2

Participation Agreement
Among
OCC Accumulation Trust, Bankers Life Insurance Company of New York
and
OCC Distributors

The Separate Account(s) shown on Schedule 1 may invest in the following
Portfolios of the OCC Accumulation Trust:

Managed Portfolio

Small Cap Portfolio

<PAGE> 1
EXHIBIT 8(j)

PARTICIPATION AGREEMENT

Among

THE ALGER AMERICAN FUND,

FRED ALGER & COMPANY, INCORPORATED

and

BANKERS LIFE INSURANCE COMPANY OF NEW YORK

THIS AGREEMENT, made and entered into as of the ___ day of
_____________, 1998 by and among BANKERS LIFE INSURANCE COMPANY OF NEW YORK
(hereinafter the "Company"), a New York corporation, on its own behalf and on
behalf of each segregated asset account of the Company set forth on Schedule A
hereto as may be amended from time to time (each such account hereinafter
referred to as the "Account"), THE ALGER AMERICAN FUND, an unincorporated
business trust organized under the laws of the Commonwealth of Massachusetts
(hereinafter the "Fund"), and FRED ALGER & COMPANY, INCORPORATED (hereinafter
the "Distributor"), a Delaware corporation.

WHEREAS, the Fund engages in business as an open-end management
investment company and is available to act as the investment vehicle for
separate accounts established for variable life insurance policies and variable
annuity contracts (collectively, the "Variable Insurance Products") to be
offered by insurance companies which have entered into participation agreements
to which the Fund is a party (hereinafter "Participating Insurance Companies");
and

WHEREAS, the Fund has obtained an order from the Securities and
Exchange Commission, dated February 17, 1989 (File No. 812-7076), granting
Participating Insurance Companies and variable annuity and variable life
insurance separate accounts exemptions from the provisions of Sections 9(a),
13(a), 15(a) and 15(b) of the Investment Company Act of 1940, as amended
(hereinafter the "1940 Act") and Rules 6e-2(b)(15) and 6e-3(T)(b)(15)
thereunder, to the extent necessary to permit shares of the Fund to be sold to
and held by variable annuity and variable life insurance separate accounts of
both affiliated and unaffiliated life insurance companies (hereinafter the
"Shared Funding Exemptive Order"); and
2
<PAGE> 2

WHEREAS, the Fund's investment adviser, Fred Alger Management, Inc.,
is duly registered as an investment adviser under the Investment Advisers Act of
1940, as amended, and any applicable state securities laws; and

WHEREAS, the Company has registered or will register certain variable
life insurance and variable annuity contracts under the 1933 Act; and

WHEREAS, the Company has registered or will register each Account as a
unit investment trust under the 1940 Act; and

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

WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Portfolios on behalf
of each Account to fund certain of the aforesaid variable life or variable
annuity contracts and the Distributor is authorized to sell such shares to unit
investment trusts such as each Account at net asset value;

NOW, THEREFORE, in consideration of their mutual promises, the
Company, the Fund and the Distributor agree as follows:

ARTICLE I

SALE OF FUND SHARES

1.1. Shares of the Fund which each Account orders will be sold to the
Company, and such orders will be executed on a daily basis at the net asset
value next computed after receipt by the Fund or its designee of the order for
the shares of the Fund. For purposes of this Section 1.1, the Company shall be
the designee of the Fund for receipt of such orders from each Account and
receipt by such designee shall constitute receipt by the Fund; provided that the
Fund receives notice of such order by 9:30 a.m. on the next following Business
Day. "Business Day" shall mean any day on which the New York Stock Exchange is
open for trading and on which the Fund calculates its net asset value pursuant
to the rules of the Securities and Exchange Commission.

3
<PAGE> 3

1.2. The Fund agrees to make its shares available indefinitely for
purchase at the applicable net asset value per share by the Company and its
Accounts on those days on which the Fund calculates its net asset value pursuant
to rules of the Securities and Exchange Commission, and the Fund shall use
reasonable efforts to calculate such net asset value on each day which the New
York Stock Exchange is open for trading. Notwithstanding the foregoing, the
Board of Trustees of the Fund (hereinafter the "Board") may refuse to sell
shares of any Portfolio to any person, or suspend or terminate the offering of
shares of any Portfolio if such action is required by law or by regulatory
authorities having jurisdiction or is, in the sole discretion of the Board
acting in good faith and in light of its fiduciary duties under federal and any
applicable state laws, necessary in the best interests of the shareholders of
such Portfolio.

1.3. Shares of the Fund will be sold only to Participating Insurance
Companies and their separate accounts and to such other entities as may be
permitted by Section 817(h) of the Code, which may include the Distributor or
its affiliates. No shares of any Portfolio will be sold to the general public.

1.4. The Fund agrees to redeem for cash, on the Company's request, any
full or fractional shares of the Fund held by the Company, executing such
requests on a daily basis at the net asset value next computed after receipt by
the Fund or its designee of the request for redemption. For purposes of this
Section 1.4, the Company shall be the designee of the Fund for receipt of
requests for redemption from each Account and receipt by such designee shall
constitute receipt by the Fund; provided that the Fund receives notice of such
request for redemption by 9:30 a.m. on the next following Business Day.

1.5. The Company agrees that purchases and redemptions of Portfolio
shares offered by the then current prospectus of the Fund shall be made in
accordance with the provisions of such prospectus. The Company agrees that the
Portfolios of the Fund specified on Schedule A attached hereto and incorporated
herein by reference will be made available under the variable annuity contracts
with the form number(s) which are listed on Schedule A, as such Schedule A may
be amended from time to time hereafter by mutual written agreement of all the
parties hereto (the "Contracts"). The Fund acknowledges that the investment
companies which are listed on Schedule B attached hereto and incorporated herein
by reference, as such schedule may be updated from time to time hereafter by the
Company, are also available under the Contracts.

1.6. The Company shall pay for Fund shares on the next Business Day
after an order to purchase Fund shares is made in accordance with the provisions
of Section 1.1 hereof. Payment shall be in federal funds transmitted by wire
with the reasonable expectation of receipt by the Fund by 2:00 p.m. Eastern
Time.

1.7. Issuance and transfer of the Fund's shares will be by book entry
only. Stock certificates will not be issued to the Company or any Account.
Shares ordered from the Fund will be recorded in an appropriate title for each
Account or the appropriate subaccount of each Account.

4
<PAGE> 4

1.8. The Fund shall furnish same day notice (by wire or telephone,
followed by written confirmation) to the Company of any income, dividends or
capital gain distributions payable on the Fund's shares. The Company hereby
elects to receive all such income dividends and capital gain distributions as
are payable on the Portfolio shares in additional shares of that Portfolio. The
Company reserves the right to revoke this election and to receive all such
income dividends and capital gain distributions in cash. The Fund shall notify
the Company of the number of shares so issued as payment of such dividends and
distributions.

1.9. The Fund shall make the net asset value per share for each
Portfolio available to the Company on each Business Day as soon as reasonably
practical after the net asset value per share is calculated, and shall use its
best efforts to make such net asset value per share available by 7 p.m. Eastern
time. If the Fund provides incorrect share net asset value information, the
Company shall be entitled to an adjustment to the number of shares purchased or
redeemed to reflect the correct net asset value per share. Any error in the
calculation or reporting of net asset value per share, dividend or capital gains
information, shall be reported promptly upon discovery to the Company.

ARTICLE II

REPRESENTATIONS AND WARRANTIES

2.1. The Company represents and warrants that the Contracts are or
will be registered under the 1933 Act; and that the Contracts will be issued and
sold in compliance in all material respects with all applicable Federal and
State laws. The Company further represents and warrants that it is an insurance
company duly organized and in good standing under applicable law and that it has
legally and validly established each Account prior to any issuance or sale
thereof as a segregated asset account under the laws of the Company's state of
domicile and has registered or, prior to any issuance or sale of the Contracts,
will register each Account as a unit investment trust in accordance with the
provisions of the 1940 Act to serve as a segregated investment account for the
Contracts.

2.2. The Fund represents and warrants that Fund shares sold pursuant
to this Agreement shall be registered under the 1933 Act, duly authorized for
issuance and sold in compliance with the laws of the Company's state of domicile
and all applicable federal and state securities laws and that the Fund is and
shall remain registered under the 1940 Act. The Fund shall amend the
Registration Statement for its shares under the 1933 Act and the 1940 Act from
time to time as required in order to effect the continuous offering of its
shares.

2.3 The Fund represents that it is currently qualified as a Regulated
Investment Company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"), and that it will make every effort to maintain such
qualification (under Subchapter M or any successor or similar provision), and
that it will notify the Company

5
<PAGE> 5

immediately in the event that there is a reasonable basis for believing that the
Fund has ceased to so qualify or that it might not so qualify in the future.

2.4 Subject to Article VI hereto, the Company represents that the
Contracts are currently treated as endowment, life insurance, or annuity
contracts under applicable provisions of the Code, and that it will make every
effort to maintain such treatment, and that it will notify the Fund immediately
upon having a reasonable basis for believing that the Contracts have ceased to
be so treated or that they might not be so treated in the future.

2.5 The Fund currently does not intend to make any payments to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act or otherwise,
although it may make such payments in the future. To the extent that it decides
to finance distribution expenses pursuant to Rule 12b-1, the Fund undertakes to
have a board of trustees, a majority of whom are not interested persons of the
Fund, formulate and approve any plan under Rule 12b-1 to finance distribution
expenses.

2.6 The Fund represents and warrants that it will use its best efforts
to ensure that the investment policies, fees and expenses of the Portfolios are
and shall at all times remain in compliance with applicable insurance and other
applicable laws of the State of New York and the State of Indiana and any other
applicable state, to the extent required to perform this Agreement or to the
extent specifically requested in writing by the Company.

2.7 The Distributor represents and warrants that it is registered as a
broker-dealer with the SEC, and is a member in good standing of the National
Association of Securities Dealers, Inc. The Distributor further represents that
it shall perform its obligations to the Fund in accordance with the laws of the
Company's state of domicile and all applicable state and federal securities
laws, including without limitation the 1933 Act, the 1934 Act, and the 1940 Act.

2.9. The Distributor represents and warrants that it is and shall
remain duly registered in all material respects under all applicable federal and
state securities laws and that the Distributor shall perform its obligations for
the Fund in compliance in all material respects with the laws of the Company's
state of domicile and any applicable state and federal securities laws.

6
<PAGE> 6

ARTICLE III

PROSPECTUSES AND PROXY STATEMENTS: VOTING

3.1. The Distributor shall provide the Company with as many copies of
the Fund's current prospectus(es) describing only the Portfolio(s) listed on
Schedule A hereto as the Company may reasonably request. If requested by the
Company in lieu thereof, the Fund shall provide such documentation (including a
final copy of the new prospectus as set in type at the Fund's expense) and other
assistance as is reasonably necessary in order for the Company once each year
(or more frequently if the prospectus for the Fund is amended more frequently)
to have the prospectus for the Contracts and the Fund's prospectus printed
together in one document. The Fund shall bear the expense of printing copies of
its current prospectus and statement of additional information that will be
distributed to existing Contract owners, and the Company shall bear the expense
of printing copies of the Fund prospectus that are used in connection with
offering the Contracts issued by the Company.

3.2. The Fund's prospectus shall state that the Statement of
Additional Information for the Fund is available from the Fund, and the
Distributor, at its expense, shall print and provide such Statement free of
charge to the Company and to any owner of a Contract or prospective owner who
requests such Statement.

3.3. The Fund, at its expense, shall provide the Company with copies
of its proxy statements, reports to current shareholders, and other
communications to current shareholders in such quantity as the Company shall
reasonably require for distributing to Contract owners.

3.4. So long as, and to the extent that, the Commission interprets the
1940 Act to require pass-through voting privileges for Contract owners, the
Company will provide pass-through voting privileges to Contract owners whose
cash values are invested, through the registered Accounts, in shares of one or
more Portfolios of the Fund. The Fund shall require all Participating Insurance
Companies to calculate voting privileges in the same manner and the Company
shall be responsible for assuring that the Accounts calculate voting privileges
in the manner established by the Fund. With respect to each registered Account,
the Company will vote shares of each Portfolio of the Fund held by a registered
Account and for which no timely voting instructions from Contract owners are
received in the same proportion as those shares for which voting instructions
are received. The Company reserves the right, to the extent permitted by law, to
vote shares held in any Account in its sole discretion.

3.5. The Fund will comply with all provisions of the 1940 Act
requiring voting by shareholders, and in particular the Fund will either provide
for annual meetings or comply with Section 16(c) of the 1940 Act as well as with
Sections 16(a) and, if and when applicable, 16(b). Further, the Fund will act in
accordance with the Securities and Exchange Commission's interpretation of the
requirements of Section 16(a) with respect to periodic elections of trustees and
with whatever rules the Commission may promulgate with respect thereto.

7
<PAGE> 7

ARTICLE IV

SALES MATERIAL AND INFORMATION

4.1. The Company shall furnish, or shall cause to be furnished, to the
Fund or its designee, each piece of sales literature or other promotional
material in which the Fund or the Distributor is named, at least fifteen
Business Days prior to its use. No such material shall be used if the Fund or
its designee reasonably objects to such use within fifteen Business Days after
receipt of such material.

4.2. The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund in
connection with the sale of the Contracts other than the information or
representations contained in the registration statement or prospectus for the
Fund shares, as such registration statement and prospectus may be amended or
supplemented from time to time, or in reports or proxy statements for the Fund,
or in sales literature or other promotional material approved by the Fund or its
designee, except with the permission of the Fund or its designee.

4.3. The Fund, the Distributor, or the designee of either, shall
furnish, or shall cause to be furnished, to the Company or its designee, each
piece of sales literature or other promotional material in which the Company,
any affiliate of the Company, and/or any of the Company's separate account(s),
is named at least fifteen Business Days prior to its use. No such material shall
be used if the Company or its designee reasonably objects to such use within
fifteen Business Days after receipt of such material.

4.4. The Fund and the Distributor shall not give any information or
make any representations on behalf of the Company or concerning the Company,
each Account, or the Contracts other than the information or representations
contained in a registration statement or prospectus for the Contracts, as such
registration statement and prospectus may be amended or supplemented from time
to time, or in published reports for each Account which are in the public domain
or approved by the Company for distribution to Contract owners, or in sales
literature or other promotional material approved by the Company or its
designee, except with the permission of the Company.

4.5. The Fund will provide to the Company at least one complete copy
of all registration statements, prospectuses, Statements of Additional
Information, reports, proxy statements, sales literature and other promotional
materials, applications for exemptions, requests for no-action letters, and all
amendments to any of the above, that relate to the Fund or its shares,
contemporaneously with the filing of such document with the Securities and
Exchange Commission or other regulatory authorities.

4.6. The Company will provide to the Fund at least one complete copy
of all registration statements, prospectuses, Statements of Additional
Information, reports, solicitations for voting instructions, sales literature
and other promotional materials, applications for exemptions, requests for
no-action letters, and all amendments to any of the above, that relate to

8
<PAGE> 8

the Contracts or each Account, contemporaneously with the filing of such
document with the SEC or other regulatory authorities.

ARTICLE V

FEES AND EXPENSES

5.1. All expenses incident to performance by the Fund under this
Agreement shall be paid by the Fund. The Fund shall see to it that all its
shares are registered and authorized for issuance in accordance with applicable
federal law and, if and to the extent deemed advisable by the Fund, in
accordance with applicable state laws prior to their sale. The Fund shall bear
the expenses for the cost of registration and qualification of the Fund's
shares, preparation and filing of the Fund's prospectus and registration
statement, proxy materials and reports, setting in type and printing the Fund's
prospectus (except the cost of printing Fund prospectuses that will not be
distributed to then-current Contract owners investing in the Fund, such cost to
be borne by the Company), setting in type and printing the proxy materials and
reports to shareholders (including the costs of printing a prospectus that
constitutes an annual report), the preparation of all statements and notices
required by any federal or state law, and all taxes on the issuance or transfer
of the Fund's shares.

5.2. The Company shall bear the expenses of distributing the Fund's
prospectus to owners of Contracts issued by the Company and of distributing the
Fund's proxy materials and reports to such Contract owners.

ARTICLE VI

DIVERSIFICATION

6.1. The Fund will at all times invest assets of the Portfolios in
such manner to permit the Portfolios to be used for investment by separate
accounts of life insurance companies funding variable annuity or variable life
insurance contracts, as set forth under the Code and regulations thereunder.
Without limiting the scope of the foregoing, the Fund will at all times

9
<PAGE> 9

comply with Section 817(h) of the Code and Treasury Regulation Section 1.817-5,
relating to the diversification requirements for variable annuity, endowment, or
life insurance contracts and any amendments or other modifications to such
Section or Regulations. In the event of a breach of this Article VI by the Fund,
it will take all reasonable steps (a) to notify Company of such breach and (b)
to adequately diversify the Fund so as to achieve compliance with the grace
period afforded by Regulation Section 1.817-5.

ARTICLE VII

POTENTIAL CONFLICTS

7.1. The Board will monitor the Fund for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
separate accounts investing in the Fund. An irreconcilable material conflict may
arise for a variety of reasons, including: (a) an action by any state insurance
regulatory authority; (b) a change in applicable federal or state insurance,
tax, or securities laws or regulations, or a public ruling, private letter
ruling, no-action or interpretative letter, or any similar action by insurance,
tax, or securities regulatory authorities; (c) an administrative or judicial
decision in any relevant proceeding; (d) the manner in which the investments of
any Portfolio are being managed; (e) a difference in voting instructions given
by variable annuity contract and variable life insurance contract owners or by
contract owners of different life insurance companies investing in the Fund; or
(f) a decision by an insurer to disregard the voting instructions of contract
owners. The Board shall promptly inform the Company if it determines that an
irreconcilable material conflict exists and the implications thereof.

This includes, but is not limited to, an obligation by the Company to inform the
Board whenever contract owner voting instructions are disregarded.

7.3. If it is determined by a majority of the Board, or a majority of
its disinterested trustees, that a material irreconcilable conflict exists, the
Company and other Participating Insurance Companies shall, at their expense and
to the extent reasonably practicable (as determined by a majority of the
disinterested trustees), take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflicts up to and including: (1)
withdrawing the assets allocable to some or all of the separate accounts from
the Fund or any Portfolio and reinvesting such assets in a different investment
medium, including (but not limited to) another Portfolio of the Fund, or
submitting the question whether (i) withdrawal of assets from the Fund or (ii)
segregation of assets should be implemented and, as appropriate, withdrawing or
segregating the assets of any particular group (i.e., annuity contract owners,
life insurance contract owners or qualified contract owners) that votes in favor
of such withdrawal or

10
<PAGE> 10

segregation, or offering to the affected contract owners the option of making
such a change; and (2) establishing a new registered management investment
company or managed separate account.

7.4. If a material irreconcilable conflict arises because of a
decision by the Company to disregard contract owner voting instructions and that
decision represents a minority position or would preclude a majority vote, the
Company may be required, at the Fund's election, to withdraw the affected
Account's investment in the Fund and terminate this Agreement with respect to
such Account; provided, however that such withdrawal and termination shall be
limited to the extent required by the foregoing material irreconcilable conflict
as determined by a majority of the disinterested members of the Board. No charge
or penalty will be imposed against an Account or the Company as a result of such
withdrawal. The Company agrees that any remedial action taken by it in resolving
any material conflicts of interest will be carried out with a view only to the
interests of Contract owners.

7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a
majority of the disinterested members of the Board shall determine whether any
proposed action adequately remedies any irreconcilable material conflict, but in
no event will the Fund be required to establish a new funding medium for the
Contracts. The Company shall not be required by Section 7.3 to establish a new
funding medium for the Contracts if an offer to do so has been declined by vote
of a majority of Contract owners materially adversely affected by the
irreconcilable material conflict. In the event that the Board determines that
any proposed action does not adequately remedy any irreconcilable material
conflict, then the Company will withdraw the Account's investment in the Fund
and terminate this Agreement, provided, however, that such withdrawal and
termination shall be limited to the extent required by any such material
irreconcilable conflict as determined by a majority of the disinterested members
of the Board.

7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended,
or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the
Act or the rules promulgated thereunder with respect to mixed or shared funding
(as defined in the Shared Funding Exemptive Order) on terms and conditions
materially different from those contained in the Shared Funding Exemptive Order,
then (a) the Fund and/or the Participating Insurance Companies, as appropriate,
shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T),
as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable;
and (b) Sections 3.4, 3.5, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement shall
continue in effect only to the extent that terms and conditions substantially
identical to such Sections are contained in such Rule(s) as so amended or
adopted.

11
<PAGE> 11

ARTICLE VIII

INDEMNIFICATION

8.1. Indemnification By The Company

8.1(a). The Company agrees to indemnify and hold harmless the
Distributor, the Fund and each of its trustees, officers, employees and agents,
and each person, if any, who controls the Fund within the meaning of Section 15
of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this
Section 8.1) against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of the Company) or
litigation (including legal and other expenses), to which the Indemnified
Parties may become subject under any statute, regulation, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) or settlements are related to the sale or
acquisition of the Fund's shares or the Contracts and:

(i) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in the
Registration Statement or prospectus for the Contracts or contained in
the Contracts or sales literature for the Contracts (or any amendment
or supplement to any of the foregoing), or arise out of or are based
upon the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, provided that this agreement to indemnify
shall not apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made in reliance
upon and in conformity with information furnished to the Company by or
on behalf of the Fund or the Distributor for use in the Registration
Statement or prospectus for the Contracts or in the Contracts or sales
literature (or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Fund shares; or

(ii) arise out of or as a result of statements or
representations (other than statements or representations contained in
the Registration Statement or prospectus or sales literature of the
Fund not supplied by the Company, or by persons under its control) or
wrongful conduct of the Company or persons under its control, with
respect to the sale or distribution of the Contracts or Fund Shares;
or

(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a Registration Statement,
prospectus, or sales literature of the Fund or any amendment thereof
or supplement thereto or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading if such a statement or
omission was made in reliance upon information furnished to the Fund
by or on behalf of the Company; or

12
<PAGE> 12

(iv) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this Agreement
or arise out of or result from any other material breach of this
Agreement by the Company, as limited by and in accordance with the
provisions of Sections 8.l(b) and 8.l(c) hereof; or

(v) arise out of or result from any failure by the Company
to provide the services or furnish the materials required under the
terms of this Agreement; or

(vi) arise out of or result from the provision by the
Company to the Fund of insufficient or incorrect information regarding
the purchase or sale of shares of any Portfolio, or the failure of the
Company to provide such information on a timely basis.

8.1(b). The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations or duties under this Agreement or to
the Fund, whichever is applicable.

8.1(c) The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Company in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Company of any
such claim shall not relieve the Company from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Company shall be entitled to participate,
at its own expense, in the defense of such action. The Company also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the Company to such party of the
Company's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and the
Company will not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in connection
with the defense thereof other than reasonable costs of investigation.

8.1(d). The Indemnified Parties will promptly notify the Company of
the commencement of any litigation or proceedings against them in connection
with the issuance or sale of the Fund Shares or the Contracts or the operation
of the Fund.

8.2. Indemnification by the Distributor

13
<PAGE> 13

8.2(a). The Distributor agrees to indemnify and hold harmless the
Company and each of its directors, officers, employees, and agents and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act (collectively, the "Indemnified Parties" for purposes of this Section
8.2) against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the Distributor) or litigation
(including legal and other expenses) to which the Indemnified Parties may become
subject under any statute, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) or
settlements are related to the sale or acquisition of the Fund's shares or the
Contracts and:

(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
Registration Statement or prospectus or sales literature of the Fund
(or any amendment or supplement to any of the foregoing), or arise out
of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified Party if
such statement or omission or such alleged statement or omission was
made in reliance upon and in conformity with information furnished to
the Distributor or Fund by or on behalf of the Company for use in the
Registration Statement or prospectus for the Fund or in sales
literature (or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Fund shares; or

(ii) arise out of or as a result of statements or
representations (other than statements or representations contained in
the Registration Statement, prospectus or sales literature for the
Contracts not supplied by the Distributor or persons under his
control) or wrongful conduct of the Fund, Distributor or persons under
their control, with respect to the sale or distribution of the
Contracts or Fund shares; or

(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a Registration Statement,
prospectus, or sales literature covering the Contracts, or any
amendment thereof or supplement thereto, or the omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statement or statements therein not
misleading, if such statement or omission was made in reliance upon
information furnished to the Company by or on behalf of the Fund; or

(iv) arise as a result of any failure by the Fund whether
unintentional or in good faith or otherwise, to comply with the
diversification requirements specified in Article VI of this
Agreement; or

(v) arise out of or result from any material breach of any
representation and/or warranty made by the Distributor in this
Agreement or arise

14
<PAGE> 14

out of or result from any other material breach of this Agreement by
the Distributor; as limited by and in accordance with the provisions
of Sections 8.2(b) and 8.2(c) hereof; or

(vi) arise out of or result from any failure by the
Distributor or the Fund to provide the services or furnish the
materials required under the terms of this Agreement; or

(vii) arise out of or result from the provision by the Fund
or the Distributor to the Company of insufficient or incorrect
information regarding the net asset value per share of any Portfolio,
or the failure of the Fund or the Distributor to provide such
information by 7 p.m. Eastern time.

8.2(b). The Distributor shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
each Company or the Account, whichever is applicable.

8.2(c). The Distributor shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Distributor in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Distributor of
any such claim shall not relieve the Distributor from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Distributor will be entitled to
participate, at its own expense, in the defense thereof. The Distributor also
shall be entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action. After notice from the Distributor to such party
of the Distributor's election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel retained by it,
and the Distributor will not be liable to such party under this Agreement for
any legal or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.

8.2(d). The Company agrees promptly to notify the Distributor of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Contracts or the
operation of each Account.

8.3. Indemnification By the Fund

8.3(a). The Fund agrees to indemnify and hold harmless the Company,
and each of its directors and officers and each person, if any, who controls the
Company within the

15
<PAGE> 15

meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties"
for purposes of this Section 8.3) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent of
the Fund) or litigation (including legal and other expenses) to which the
Indemnified Parties may become subject under any statute, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) or settlements result from the gross negligence, bad
faith or willful misconduct of the Board or any member thereof, are related to
the operations of the Fund and:

(i) arise as a result of any failure by the Fund to provide
the services and furnish the materials under the terms of this
Agreement, or to comply with the diversification requirements
specified in Article VI of this Agreement; or

(ii) arise out of or result from any material breach of any
representation and/or warranty made by the Fund in this Agreement or
arise out of or result from any other material breach of this
Agreement by the Fund; as limited by and in accordance with the
provisions of Sections 8.3(b) and 8.3(c) hereof; or

(iii) arise out of or result from the provision by the
Distributor or the Fund to the Company of insufficient or incorrect
information regarding the net asset value per share of any Portfolio,
or the failure of the Distributor or Fund to provide such information
by 7 p.m. Eastern time.

8.3(b). The Fund shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
the Company, the Fund, the Distributor, or each Account, whichever is
applicable.

8.3(c). The Fund shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Fund in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Fund of any
such claim shall not relieve the Fund from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Fund will be entitled to participate, at
its own expense, in the defense thereof. The Fund also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Fund to such party of the Fund's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Fund will not be
liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.

16
<PAGE> 16

8.3(d) The Company and the Distributor agree promptly to notify the
Fund of the commencement of any litigation or proceedings against it or any of
its respective officers or directors in connection with this Agreement, the
issuance or sale of the Contracts, with respect to the operation of either
Account, or the sale or acquisition of shares of the Fund.

ARTICLE IX

APPLICABLE LAW

9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of Massachusetts.

ARTICLE X

TERMINATION

10.1. This Agreement shall continue in full force and effect until the
first to occur of:

(a) termination by any party for any reason by six (6) months
advance written notice delivered to the other parties unless a
shorter time is mutually agreed to by the parties; or

(b) termination by the Company by written notice to the Fund
and the Distributor with respect to any Portfolio based upon the
Company's determination that shares of such Portfolio are not
reasonably available to meet the requirements of the Contracts; or

(c) termination by the Company by written notice to the Fund
and the Distributor with respect to any Portfolio in the event any
of the Portfolio's shares are not registered, issued or sold in
accordance with applicable state and/or federal law or such law
precludes the use of such shares as the underlying investment media
of the Contracts issued) or to be issued by the Company; or

(d) termination by the Company by written notice to the Fund
and the Distributor with respect to any Portfolio in the event that
such Portfolio ceases to qualify as a Regulated Investment Company
under Subchapter M of the Code or under any successor or similar
provision, or if the Company reasonably believes that the Fund may
fail to so qualify; or

17
<PAGE> 17

(e) termination by the Company by written notice to the Fund
and the Distributor with respect to any Portfolio in the event that
such Portfolio fails to meet the diversification requirements
specified in Article VI hereof; or

(f) termination by either the Fund or the Distributor by
written notice to the Company, if either one or both of the Fund or
the Distributor respectively, shall determine, in their sole
judgment exercised in good faith, that the Company and/or its
affiliated companies has suffered a material adverse change in its
business, operations, financial condition or prospects since the
date of this Agreement or is the subject of material adverse
publicity; or

(g) termination by the Company by written notice to the Fund
and the Distributor, if the Company shall determine, in its sole
judgment exercised in good faith, that either the Fund or the
Distributor has suffered a material adverse change in its business,
operations, financial condition or prospects since the date of this
Agreement or is the subject of material adverse publicity.

(h) termination by the Fund or the Distributor if the
Contracts issued by the Company cease to qualify as annuity
contracts or endowment contracts or life insurance contracts, as
applicable, under the Code or if the Contracts are not registered,
issued or sold in accordance with applicable state and/or federal
law; or

18
<PAGE> 18

(i) termination by any party by 180 days written notice upon a
determination by a majority of the Trustees of the Fund, or a
majority of its disinterested Trustees, that a material
irreconcilable conflict exists.

10.2. Effect of Termination Notwithstanding any termination of this
Agreement, the Fund shall at the option of the Company, continue to make
available additional shares of the Fund pursuant to the terms and conditions of
this Agreement, for all Contracts in effect on the effective date of termination
of this Agreement (hereinafter referred to as "Existing Contracts").
Specifically, without limitation, the owners of the Existing Contracts shall be
permitted to reallocate investments in the Fund, redeem investments in the Fund
and/or invest in the Fund upon the making of additional purchase payments under
the Existing Contracts. The parties agree that this Section 10.2 shall not apply
to any terminations under Article VII and the effect of such Article VII
terminations shall be governed by Article VII of this Agreement.

ARTICLE XI

NOTICES

If to the Fund:

The Alger American Fund
75 Maiden Lane
New York, New York 10038
Attention: __________________

If to the Company:

Indianapolis Life Insurance Company
2960 North Meridian
P.O. Box 1230
Indianapolis, IN 46206
Attention: Janis Funk, Esq.

If to the Distributor:

Fred Alger & Company, Incorporated
30 Montgomery Street
Jersey City, NJ 07302
Attention: Gregory S. Duch
ARTICLE XII

19
<PAGE> 19

MISCELLANEOUS

12.1. All liabilities of the Fund arising, directly or indirectly, under
this Agreement, of any and every nature, shall be satisfied solely out of the
assets of the Fund and no Trustee, officer, agent or holder of shares of
beneficial interest of the Fund shall be personally liable for any such
liabilities.

12.3. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.

12.4. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.

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

12.7. The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, which the parties hereto are entitled to under state and
federal laws.

12.8. This Agreement or any of the rights and obligations hereunder may
not be assigned by any party without the prior written consent of all parties
hereto.

20
<PAGE> 20

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the date
specified below.

BANKERS LIFE INSURANCE COMPANY OF NEW YORK

By:
------------------------------------

Name:
----------------------------------

Title:
---------------------------------

BANKERS LIFE INSURANCE COMPANY OF NEW YORK

Attest:

By:
------------------------------------

Name:
----------------------------------

Title:
---------------------------------

THE ALGER AMERICAN FUND

By:
------------------------------------

Name:
----------------------------------

Title:
---------------------------------

FRED ALGER & COMPANY, INCORPORATED

By:
------------------------------------

Name:
----------------------------------

Title:
---------------------------------

21
<PAGE> 21

SCHEDULE A

Separate Accounts, Associated Contracts, and Fund Portfolios

Name of Separate Policy Form Numbers Portfolios of the Fund
Account and Date of Contracts Funded Available Under
Established by By Separate Account the Contracts
Board of Directors
.
Bankers Life Insurance VCA-97BL MidCap Growth
Company of New York Portfolio
Separate Account 1
Small Capitalization
Portfolio

22
<PAGE> 22

SCHEDULE B

Other investment companies currently available under the Contracts:

Fidelity Variable Insurance Products Fund
Fidelity Variable Insurance Products Fund II
OCC Accumulation Trust
Royce Capital Fund
SAFECO Resource Series Trust
SoGen Variable Funds, Inc.
T. Rowe Price Fixed Income Series, Inc.
T. Rowe Price International Series, Inc.
Van Eck Worldwide Insurance Trust

<PAGE> 1
EXHIBIT 8(l)

AMENDMENT TO AGREEMENT

THIS AMENDMENT made as of the ___ day of June, 1998 to amend portions of the
Participation Agreement entered into by Royce Capital Fund and IL Annuity and
Insurance Company on June 13, 1997 for the purpose of adding Bankers Life
Insurance Company of New York as a party to the agreement.

1. The initial paragraph is amended to read:

THIS AGREEMENT made as of the 13th day June, 1995 by and among ROYCE
CAPITAL FUND (the "Trust"), a Delaware business trust, ROYCE & ASSOCIATES,
INC. ("Royce" or the "Adviser"), a New York corporation, IL ANNUITY AND
INSURANCE COMPANY ("ILA"), a life insurance company organized under the
laws of the State of Massachusetts, as amended the ____ day of ________,
1998 to add BANKERS LIFE INSURANCE COMPANY OF NEW YORK ("BLNY"), a life
insurance company organized under the laws of the State of New York. "The
Company" shall be used hereinafter to refer to both ILA and BLNY,
individually.

2. Article II, Section 2.1 is amended to read:

a. The first two words of the section ("the Company") are replaced by
"ILA"

b. Reference to "each Separate Account" in the section is replaced by
"the IL Annuity and Insurance Company Separate Account I ("ILA
Account")."

c. The following sentence is added to the section: BLNY represents and
warrants that it is an insurance company duly organized and in good
standing under the laws of the State of New York, and that it has
legally and validly established the Bankers Life Insurance Company
of New York Separate Account I ("BLNY Account") as a segregated
asset account under such laws.

3. Appendix B is amended to add: Bankers Life Insurance Company of New York
Separate Account I.

<PAGE> 2

IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Agreement to Amend of the date and year first above written.

ROYCE CAPITAL FUND

By:
--------------------------------------
Name:
Title:

ROYCE & ASSOCIATES, INC.

By:
--------------------------------------
Name:
Title:

BANKERS LIFE INSURANCE COMPANY OF
NEW YORK

By:
--------------------------------------
Name:
Title:

<PAGE> 1
EXHIBIT 8(m)

TRUST PARTICIPATION AGREEMENT

THIS AGREEMENT made as of the _____ day of _____, 1998, by and among
SAFECO Resource Series Trust, an unincorporated business trust organized under
the laws of the State of Delaware ("Trust"), SAFECO Asset Management Company, a
Washington corporation ("Adviser"), and Bankers Life Insurance Company of New
York ("Life Company"), a life insurance company organized under the laws of the
State of New York.

WHEREAS, Trust is registered with the Securities and Exchange Commission
("SEC") under the Investment Company Act of 1940, as amended ("'40 Act"), as an
open-end, diversified management investment company; and

WHEREAS, Trust is organized as a series fund comprised of several
portfolios, with those then currently available under this Agreement being
listed on Schedule A hereto, as it may be amended from time to time
("Portfolios"); and

WHEREAS, Trust was organized to act as the funding vehicle for certain
variable life insurance and/or variable annuity contracts ("Variable Contracts")
offered by life insurance companies through separate accounts of such life
insurance companies ("Participating Insurance Companies"); and

WHEREAS, Trust may also offer its shares to certain qualified pension and
retirement plans ("Qualified Plans"); and

WHEREAS, Trust has obtained an order from the SEC, granting Participating
Insurance Companies and their separate accounts exemptions from the provisions
of Sections 9(a), 13(a), 15(a) and 15(b) of the '40 Act, and Rules 6e-2(a)(2),
6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to permit
shares of the Portfolios of the Trust to be sold to and held by Variable
Contract separate accounts of both affiliated and unaffiliated Participating
Insurance Companies and Qualified Plans (File No. 812-9658) ("Exemptive Order");
and

WHEREAS, Life Company has established or will establish one or more
separate accounts ("Separate Accounts") to offer Variable Contracts and desires
to have the Trust as one of the underlying funding vehicles for certain Variable
Contracts to be issued by Life Company as set forth on Schedule A hereto, as it
may be amended from time to time; and

WHEREAS, Adviser is registered with the SEC as an investment adviser
under the Investment Advisers Act of 1940, as amended, and acts as the Trust's
investment adviser; and

1
<PAGE> 2

WHEREAS, to the extent permitted by applicable insurance laws and
regulations, Life Company intends to purchase shares of Trust to fund the
aforementioned Variable Contracts and Trust is authorized to sell such shares to
Life Company at net asset value.

NOW, THEREFORE, in consideration of their mutual promises, Life Company,
Trust, and Adviser agree as follows:

Article I. SALE OF TRUST SHARES

1.1 Trust agrees, as provided in its Registration Statement, to make
available to the Separate Accounts, and any sub-accounts thereof, shares of the
selected Portfolios as listed on Schedule B hereto, as it may be amended from
time to time, for investment of purchase payments of Variable Contracts
allocated to the designated Separate Accounts.

1.2 Trust agrees to sell to Life Company those shares of the selected
Portfolios which Life Company orders. Orders which are sent by Life Company to
Trust and received by Trust by 8:00 a.m. Pacific time, will be executed by Trust
at the net asset value determined on the prior Business Day. Any orders received
by Trust after 8:00 a.m. and prior to 1:00 p.m. Pacific time, will be executed
by Trust at the net asset value next computed pursuant to the rules of the SEC.
For purposes of this Section 1.2, Trust hereby appoints Life Company as its
designee for receipt of such orders from the designated Separate Account and
receipt by such designee shall constitute receipt by Trust; provided that Trust
receives notice from Life Company by telephone or facsimile (or by such other
means as Trust and Life Company may agree in writing) of receipt of such orders
by 8:00 a.m. Pacific time on the next following Business Day. "Business Day"
shall mean any day on which the New York Stock Exchange is open for trading and
on which Trust calculates its net asset value pursuant to the rules of the SEC.

1.3 Trust agrees to redeem, on Life Company's request, any full or
fractional shares of Trust held by Life Company, executing such requests on each
Business Day at the net asset value next computed after receipt by Trust or its
designee of the request for redemption, in accordance with the provisions of
this Agreement and Trust's Registration Statement. For purposes of this Section
1.3, Life Company hereby appoints Trust as its designee for receipt of requests
for redemption from the designated Separate Account and receipt by such designee
shall constitute receipt by Trust; provided that Trust receives notice from Life
Company by telephone or facsimile (or by such other means as Trust and Life
Company may agree in writing) of receipt of such request for redemption by 8:00
a.m. Pacific time on the next following Business Day.

1.4 In the event that Life Company's order results in a net purchase of
Portfolio shares, Life Company shall pay for Portfolio shares by 11:00 a.m.
Pacific time on the same Business Day that the notice of order to purchase Trust
shares is made in accordance with the provisions of this section. If Life
Company's order requests a net redemption resulting in a

2
<PAGE> 3

payment of redemption proceeds to Life Company, Trust shall normally pay and
transmit the proceeds of redemptions of Portfolio shares by 11:00 a.m. Pacific
time on the same Business Day that the notice of a redemption order is received
in accordance with the provisions of this Agreement, unless doing so would
require Trust to dispose of Portfolio securities or otherwise incur additional
costs. In any event, proceeds shall be wired to Life Company within three (3)
Business Days or such longer period permitted by the '40 Act or the rules,
orders or regulations thereunder, and Trust shall notify the person designated
in writing by Life Company as the recipient for such notice of such delay by
1:00 p.m. Pacific time the same Business Day that Life Company transmits the
redemption order to Trust. If Life Company's order requests the application of
redemption proceeds from the redemption of shares to the purchase of shares of
another fund advised by Adviser, Trust shall so apply such proceeds the same
Business Day that Life Company transmits such order to Trust. Any payment made
pursuant to this Section 1.4 shall be in federal funds transmitted by wire.

1.5 Trust will provide to Life Company closing net asset value per share
for the selected Portfolio(s) at the close of trading each Business Day. In any
event, Trust shall use its best efforts to make the net asset value per share
for each Portfolio available by 3:30 p.m. Pacific time each Business Day, and as
soon as reasonably practicable after the net asset value per share for each
Portfolio is calculated, and shall calculate such net asset value in accordance
with the Trust's Registration Statement. Any material error in the calculation
of the net asset value of the Portfolios shall be reported immediately to Life
Company.

1.6 At the end of each Business Day, Life Company shall use the
information described in Section 1.5 to calculate Separate Account unit values
for the day. Using these unit values, Life Company shall process each such
Business Day's Separate Account transactions based on requests and premiums
received by it by the close of trading on the floor of the New York Stock
Exchange (currently 4:00 p.m. New York time) to determine the net dollar amount
of Trust shares which shall be purchased or redeemed at that day's closing net
asset value per share. The net purchase or redemption orders so determined shall
be transmitted to Trust by Life Company by 8:00 a.m. Pacific time on the
Business Day next following Life Company's receipt of such requests and premiums
in accordance with the terms of Sections 1.2 and 1.3 hereof. Orders will be sent
directly, via facsimile (or by such other means as Trust and Life Company may
agree in writing), to Trust or such other person as the Trust may designate.

1.7 Trust agrees that all shares of the Portfolios will be sold only to
Participating Insurance Companies which have agreed to participate in Trust to
fund their separate accounts and/or to Qualified Plans, all in accordance with
the requirements of Section 817(h) of the Internal Revenue Code of 1986, as
amended ("Code") and Treasury Regulation 1.817-5. Shares of the Portfolios will
not be sold directly to the general public.

1.8 Trust shall furnish, on or before the ex-dividend date, notice to
Life Company of any income dividends or capital gain distributions payable on
the shares of any Portfolio. Life

3
<PAGE> 4

Company hereby elects to receive all such income dividends and capital gain
distributions as are payable on a Portfolio's shares in additional shares of the
Portfolio. Trust shall notify Life Company or its designee of the number of
shares so issued as payment of such dividends and distributions.

1.9 Trust may refuse to sell shares of any Portfolio to any person or
suspend or terminate the offering of the shares of or liquidate any Portfolio if
such action is required by law or by regulatory authorities having jurisdiction
or is, in the sole discretion of the Board of Trustees of the Trust (the
"Board"), acting in good faith and in light of its duties under federal and any
applicable state laws, deemed necessary, desirable or appropriate and in the
best interests of the shareholders of such Portfolios.

1.10 Issuance and transfer of Portfolio shares will be by book entry
only. Stock certificates will not be issued to Life Company or the Separate
Accounts. Shares ordered from the Portfolio(s) will be recorded in appropriate
book entry titles for the Separate Accounts.

1.11 Each party has the right to rely on information or confirmations
provided by each other party (or by any affiliate of each other party) and shall
not be liable in the event that an error is a result of any misinformation
supplied by any other party or any such affiliate. If a mistake is caused in
supplying such information or confirmations, which results in a reconciliation
with incorrect information, the amount required to make a Variable Contract
owner's or participant's account whole shall be borne by the party providing the
incorrect information.

Article II. REPRESENTATIONS AND WARRANTIES

2.1 Life Company represents and warrants that it is an insurance company
duly organized and in good standing under the laws of its state of domicile and
that it has legally and validly established each Separate Account as a
segregated asset account under such laws, and that IL Securities, Inc., the
principal underwriter for the Variable Contracts, is registered as a
broker-dealer under the Securities Exchange Act of 1934, as amended.

2.2 Life Company represents and warrants that it has registered or, prior
to any issuance or sale of the Variable Contracts, will register and maintain
the registration of each Separate Account as a unit investment trust in
accordance with the provisions of the '40 Act, unless an exemption from
registration is available.

2.3 Life Company represents and warrants that the Variable Contracts will
be registered under the Securities Act of 1933, as amended ("'33 Act") unless an
exemption from registration is available prior to any issuance or sale of the
Variable Contracts and that the Variable Contracts will be issued and sold in
compliance in all material respects with all applicable federal and state laws
and further that the sale of the Variable Contracts shall comply in all material
respects with applicable state insurance law suitability requirements.

4
<PAGE> 5

2.4 Life Company represents and warrants that the Variable Contracts are
currently and at the time of issuance will be treated as life insurance,
endowment or annuity contracts under applicable provisions of the Code, that it
will maintain such treatment and that it will notify Trust immediately upon
having a reasonable basis for believing that the Variable Contracts have ceased
to be so treated or that they might not be so treated in the future.

2.5 Life Company represents and warrants that its directors, officers,
and employees, if any, dealing with the money and/or securities of Trust are and
shall continue to be at all times covered by a blanket fidelity bond or similar
coverage in an amount not less than $2 million. The aforesaid bond shall include
coverage for larceny and embezzlement and shall be issued by a reputable bonding
company. Life Company agrees that any amounts received under such bond that
arise from the arrangements contemplated by this Agreement shall be held by Life
Company for the benefit of Trust.

2.6 Adviser and Trust represent and warrant that their directors,
officers, and employees, if any, dealing with the money and/or securities of
Trust are and shall continue to be at all times covered by a blanket fidelity
bond or similar coverage in an amount not less than the minimal coverage as
required currently by Rule 17g-1 of the '40 Act or related provisions as may be
promulgated from time to time. The aforesaid bond shall include coverage for
larceny and embezzlement and shall be issued by a reputable bonding company.
Adviser and Trust agree that any amounts received under such bond that arise
from the arrangements contemplated by this Agreement shall be held by them for
the benefit of Trust.

2.7 Adviser and Trust make no representation as to whether any aspect of
Trust's operations (including, but not limited to, fees and expenses and
investment policies) complies with the insurance laws or regulations of the
various states. Trust agrees that it will make every reasonable effort to remain
in material compliance with the applicable laws of such states of whose
requirements Life Company informs it.

2.8 Trust represents and warrants that it is duly organized and in good
standing under the laws of its state of domicile and that it is in compliance
and will comply in all material respects with the '40 Act.

2.9 Trust represents and warrants that Trust shares offered and sold
pursuant to this Agreement will be registered under the '33 Act and sold in
accordance with all applicable federal and state laws, and Trust shall be
registered under the '40 Act prior to and at the time of any issuance or sale of
such shares. Trust, subject to Section 1.9 above, shall amend its Registration
Statement under the '33 Act and the '40 Act from time to time as required in
order to effect the continuous offering of its shares. Trust shall register and
qualify its shares for sale in accordance with the laws of the various states
only if and to the extent deemed advisable by Trust.

5
<PAGE> 6

2.10 Trust represents and warrants that each Portfolio will comply with
the diversification requirements set forth in Section 817(h) of the Code, and
the rules and regulations thereunder, including without limitation Treasury
Regulation 1.817-5, and will notify Life Company immediately upon having a
reasonable basis for believing any Portfolio has ceased to comply or might not
so comply and will immediately take all reasonable steps to adequately diversify
the Portfolio to achieve compliance.

2.11 Trust represents and warrants that each Portfolio invested in by the
Separate Account intends to elect to be treated as a "regulated investment
company" under Subchapter M of the Code, and to qualify for such treatment for
each taxable year and will notify Life Company immediately upon having a
reasonable basis for believing it has ceased to so qualify or might not so
qualify in the future.

2.12 Adviser represents and warrants that it is and will remain duly
registered as an investment adviser under the Investment Advisers Act of 1940,
as amended, and licensed in all material respects under all applicable federal
and state securities laws and shall perform its obligations hereunder in
compliance in all material respects with any applicable state and federal laws.

Article III. PROSPECTUS AND PROXY STATEMENTS

3.1 Trust shall prepare and be responsible for filing with the SEC and
any state regulators requiring such filing all shareholder reports, notices,
proxy materials (or similar materials such as voting instruction solicitation
materials), prospectuses and statements of additional information of Trust.
Trust shall bear the costs of registration and qualification of shares of the
Portfolios, preparation and filing of the documents listed in this Section 3.1
and all taxes and filing fees to which an issuer is subject on the issuance and
transfer of its shares.

3.2 At least annually, Trust or its designee shall provide Life Company
with the current prospectus, statement of additional information and any
supplements thereto for the shares of the Portfolios listed on Schedule A, in
the form of "camera ready" copy as set in type or, at the request of Life
Company, as a diskette in the form sent to the financial printer. Trust shall be
responsible for providing the prospectus and/or statement of additional
information in the format (i.e., "camera ready" or diskette) in which it is
accustomed to formatting prospectuses and/or statements of additional
information and shall bear the expense of providing the prospectus and/or
statement of additional information, and any supplements thereto, in such format
(e.g. typesetting expenses), and Life Company shall bear the expense of
adjusting or changing the format to conform with any of its prospectuses and/or
statements of additional information. At Life Company's option and expense, once
a year (or more frequently if the prospectus and/or statement of additional
information for the shares is supplemented or amended), Life Company may cause
Trust's prospectus and/or statement of additional information to be printed
separately and/or together in one document with the

6
<PAGE> 7

prospectus and/or statement of additional information for other investment
companies and/or for the Variable Contracts. Life Company shall be responsible
for the costs of printing Trust's prospectus and/or statement of additional
information, either separately or in combination as aforesaid, and of
distribution to existing Variable Contract owners ("Owners") whose Variable
Contracts are funded by such shares and to prospective purchasers of Variable
Contracts.

3.3 Trust will provide Life Company with at least one complete copy of
all prospectuses, statements of additional information, annual and semi-annual
reports, proxy statements, exemptive applications and all amendments or
supplements to any of the above that relate to Trust or the Portfolios promptly
after the filing of each such document with the SEC or other regulatory
authority. The prospectus for the Portfolios shall state that the statement of
additional information for the Portfolios is available from Trust or its
designated agent, and such statement shall be provided free of charge to any
Variable Contract Owner or participant who requests a copy. Life Company will
provide Trust with at least one complete copy of all prospectuses, statements of
additional information, annual and semi-annual reports, proxy statements,
exemptive applications and all amendments or supplements to any of the above
that relate to a Separate Account promptly after the filing of each such
document with the SEC or other regulatory authority.

3.4 Trust currently does not make and does not intend to make any
payments to finance distribution expenses pursuant to Rule 12b-1 under the '40
Act or otherwise, although it may make such payments in the future. To the
extent that it decides to finance distribution expenses pursuant to Rule 12b-1,
Trust undertakes to have its Board of Trustees, a majority of whom are not
interested persons of Trust, formulate and approve any plan under Rule 12b-1 to
finance distribution expenses. Trust will notify Life Company of the adoption of
any plan under Rule 12b-1.

Article IV. SALES MATERIALS

4.1 Life Company will furnish, or will cause to be furnished, to Trust
and Adviser for review, each piece of sales literature or other promotional
material in which Trust, or any selected Portfolio thereof, or Adviser is named,
before such material is submitted to any regulatory body for review, and in any
event, at least fifteen (15) Business Days prior to its use. No such material
will be used if Trust or Adviser objects to its use in writing within fifteen
(15) Business Days after receipt of such material.

4.2 Advertising and sales literature with respect to Life Company, the
Separate Accounts and/or the Variable Contracts prepared by Trust, Adviser or
any affiliate thereof will be submitted to Life Company for review before such
material is submitted to any regulatory body for review, and in any event, at
least fifteen (15) Business Days prior to its use. No such material will be used
if Life Company objects to its use in writing within fifteen (15) Business Days
after receipt of such material.

7
<PAGE> 8

4.3 Trust and its affiliates and agents shall not give any information or
make any representations on behalf of Life Company or concerning Life Company,
the Separate Accounts or the Variable Contracts issued by Life Company, other
than the information or representations contained in a registration statement or
prospectus for such Variable Contracts, as such registration statement and
prospectus may be amended or supplemented from time to time, or in reports of
the Separate Accounts or reports prepared for distribution to Owners of such
Variable Contracts, or in sales literature or other promotional material
approved by Life Company or its designee, without the written permission of Life
Company.

4.4 Life Company and its affiliates and agents shall not give any
information or make any representations on behalf of Trust or concerning Trust
other than the information or representations contained in a Registration
Statement or prospectus for Trust, as such Registration Statement and prospectus
may be amended or supplemented from time to time, or in reports of the Trust or
reports prepared for distribution to owners of shares of the Trust or for Owners
of the Variable Contracts, or in sales literature or other promotional material
approved by Trust or its designee, without the written permission of Trust.

4.5 For purposes of this Agreement, the phrase "sales literature or other
promotional material" or words of similar import include, without limitation,
advertisements (such as material published, or designed for use, in a newspaper,
magazine or other periodical, radio, television, electronic media, telephone or
tape recording, videotape display, signs or billboards, motion pictures or other
public media), sales literature (such as any written communication distributed
or made generally available to customers or the public, including brochures,
circulars, research reports, market letters, form letters, seminar texts, or
reprints or excerpts of any other advertisement, sales literature, or published
article), educational or training materials or other communications distributed
or made generally available to some or all agents or employees, registration
statements, prospectuses, statements of additional information, shareholder
reports and proxy materials, and any other material constituting sales
literature or advertising under National Association of Securities Dealers, Inc.
("NASD") rules, the '40 Act or the '33 Act.

4.6 Trust and Adviser agree and acknowledge that Life Company has applied
for trademark protection of the marks "Visionary", "Visionary Variable Annuity",
and "Visionary Choice Variable Annuity" (collectively, the "Visionary Marks")
and that Life Company believes it will be granted exclusive rights to the
Visionary Marks in the field of insurance underwriting. Trust and Adviser
further agree and acknowledge that all use of any designation comprised in whole
or in part of the Visionary Marks under this Agreement shall inure to the
benefit of Life Company. Except as provided in Section 4.2, neither Trust nor
Adviser shall use any Visionary Marks on behalf of itself or any affiliate in
any registration statement, advertisement, sales literature or other materials
without the prior written consent of Life Company. Except as provided in Section
4.1, Life Company shall not use the "SAFECO" name on behalf of itself or any
affiliate in any registration statement, advertisement, sales literature or
other materials without the prior written consent of Trust and Advisor. Upon

8
<PAGE> 9

termination of this Agreement for any reason, Trust and Adviser shall cease all
use of any Visionary Marks and Life Company shall cease all use of the "SAFECO"
name as soon as reasonably practicable.

Article V. ADMINISTRATION OF SEPARATE ACCOUNTS

5.1 Administrative services to Owners/participants of the Variable
Contracts issued by Life Company shall be the responsibility of Life Company and
shall not be the responsibility of Trust or Adviser. Adviser recognizes Life
Company as the sole shareholder of fund shares issued under this Agreement. From
time to time, Adviser may pay amounts from its past profits to Life Company for
providing certain administrative services for Trust or its Portfolios, or for
providing Owners with other services that relate to Trust. These services may
include, among other things, sub-accounting services, answering inquiries of
Owners regarding the Portfolios, transmitting, on behalf of Trust, proxy
statements, annual reports, updated prospectus and other communications to
Variable Contract Owners regarding Trust and its Portfolios and such other
related services as Trust and Life Company may from time to time agree. In
consideration of the savings resulting from such arrangement, and to compensate
Life Company for its costs, Adviser agrees to pay to Life Company an amount
equal to 25 basis points (0.25%) per annum of the average aggregate amount
invested by Life Company in the Portfolios under this Agreement. Payment of such
amounts by Adviser will not increase the fees paid by Trust, the Portfolios or
their shareholders.

5.2 The parties agree that Adviser's payments to Life Company are for
administrative services only and do not constitute payment in any manner for
investment advisory services or for costs of distribution.

5.3 For the purposes of computing the administrative fee reimbursement
contemplated by this Article V, the average aggregate amount invested by Life
Company over a one-month period shall be computed by totaling Life Company's
aggregate investment (share net asset value multiplied by total number of shares
held by Life Company) on each Business Day during the month and dividing by the
total number of Business Days during each month.

5.4 Adviser will calculate the reimbursement of administrative expenses
at the end of each calendar quarter and will make such reimbursement to Life
Company within thirty (30) days thereafter. The reimbursement check will be
accompanied by a statement showing the calculation of the monthly amounts
payable by Adviser and such other supporting data as may be reasonably requested
by Life Company.

Article VI. POTENTIAL CONFLICTS

6.1 Life Company has received a copy of the amended and restated
application for exemptive relief filed by Trust and certain affiliates on
December 20, 1995 with the SEC and the Exemptive Order issued by the SEC on
January 17, 1996, in response thereto. Life

9
<PAGE> 10

Company has reviewed the conditions to the requested relief set forth in such
application for exemptive relief.

6.2 The Board will monitor Trust for the existence of any material
irreconcilable conflict between the interests of Variable Contract Owners of all
separate accounts investing in Trust. A material irreconcilable conflict may
arise for a variety of reasons, which may include: (a) an action by any state
insurance regulatory authority; (b) a change in applicable federal or state
insurance, tax, or securities laws or regulations, or a public ruling, private
letter ruling or any similar action by insurance, tax or securities regulatory
authorities; (c) an administrative or judicial decision in any relevant
proceeding; (d) the manner in which the investments of Trust are being managed;
(e) a difference in voting instructions given by Variable Contract Owners; and
(f) a decision by a Participating Insurance Company to disregard the voting
instructions of Variable Contract Owners.

6.3 Life Company will report any potential or existing conflicts to the
Board. Life Company will be responsible for assisting the Board in carrying out
its duties in this regard by providing the Board with all information reasonably
necessary for the Board to consider any issues raised, including, but not
limited to, an obligation by the Life Company to inform the Board whenever it
has determined to disregard Variable Contract Owner voting instructions. These
responsibilities of Life Company will be carried out with a view only to the
interests of the Variable Contract Owners.

6.4 If a majority of the Board or majority of its disinterested members
determines that a material irreconcilable conflict exists affecting Life
Company, Life Company, at its expense and to the extent reasonably practicable
(as determined by a majority of the Board's disinterested members), will take
any steps necessary to remedy or eliminate the material irreconcilable conflict
as determined by a majority of the Board's disinterested members, including: (a)
withdrawing the assets allocable to some or all of the Separate Accounts from
Trust or any Portfolio thereof and reinvesting those assets in a different
investment medium, which may include another Portfolio of Trust, or another
investment company; (b) submitting the question as to whether an alternative
investment should be implemented to a vote of all affected Variable Contract
Owners and as appropriate, segregating the assets of any appropriate group (i.e.
variable annuity or variable life insurance contract owners of one or more
Participating Insurance Companies) that votes in favor of such segregation, or
offering to the affected Variable Contract Owners the option of making such a
change; and (c) establishing a new registered management investment company (or
series thereof) or managed separate account. If a material irreconcilable
conflict arises because of Life Company's decision to disregard Variable
Contract Owner voting instructions, and that decision represents a minority
position or would preclude a majority vote, Life Company may be required, at the
election of Trust, to withdraw the Separate Account's investment in Trust, and
no charge or penalty will be imposed as a result of such withdrawal. The
responsibility to take such remedial action shall be carried out with a view
only to the interests of the Variable Contract Owners.

10
<PAGE> 11

For the purposes of this Section 6.4, a majority of the disinterested
members of the Board shall determine whether or not any proposed action
adequately remedies any material irreconcilable conflict but in no event will
Trust or Adviser (or any other investment adviser of Trust) be required to
establish a new funding medium for any Variable Contract. Further, Life Company
shall not be required by this Section 6.4 to establish a new funding medium for
any Variable Contracts if any offer to do so has been declined by a vote of a
majority of Variable Contract Owners materially and adversely affected by the
material irreconcilable conflict.

6.5 Trust shall give Life Company prompt written notice of the Board's
determination of the existence of a material irreconcilable conflict and its
implications.

6.6 No less than annually, Life Company shall submit to the Board such
reports, materials or data as the Board may reasonably request so that the Board
may fully carry out its obligations under this Article VI. Such reports,
materials and data shall be submitted more frequently if deemed appropriate by
the Board.

Article VII. VOTING

7.1 Life Company will provide pass-through voting privileges privileges
to all Variable Contract Owners so long as the SEC continues to interpret the
'40 Act as requiring pass-through voting privileges for Variable Contract
Owners. Variable Contract Owners to whom Life Company will provide pass-through
voting privileges pursuant to this Agreement are hereinafter referred to as
"Pass-through Voters." Accordingly, Life Company, when applicable, will
distribute to Pass-through Voters all proxy material furnished by Adviser and
will vote shares of the Portfolios held in its Separate Accounts in a manner
consistent with voting instructions timely received from Pass-through Voters.
Life Company will be responsible for assuring that each of its Separate Accounts
that participates in Trust calculates voting privileges in a manner consistent
with other Participating Insurance Companies. Life Company will vote shares for
which it has not received timely voting instructions, as well as shares it owns,
in the same proportion as it votes those shares for which it has received voting
instructions. Life Company reserves the right to disregard the voting
instructions of Pass-through Voters to the extent such action is permitted by
Rules 6e-2 or 6e-3(T) under the '40 Act and is permitted under applicable state
insurance laws affecting Trust.

7.2 Trust shall notify Life Company of Trust's intent to file proxy
solicitation materials with the SEC as soon as practicable prior to such filing.
Life Company and its agents shall not oppose or interfere with the solicitation
of proxies for Portfolio shares held for Pass-through Voters, unless required to
by applicable law. Trust shall notify Life Company of any shareholder proposal
upon its inclusion in the proxy solicitation materials filed with the SEC.

11
<PAGE> 12

7.3 Trust shall comply with all provisions of the '40 Act requiring
voting by shareholders, and in particular Trust will either provide for annual
meetings or comply with Section 16(c) of the '40 Act (although Trust is not one
of the trusts described in Section 16(c) of that Act) as well as Sections 16(a)
and, if and when applicable, 16(b). Further, Trust shall act in accordance with
the SEC's interpretation of the requirements of Section 16(a) with respect to
periodic elections of trustees and with whatever rule the SEC may promulgate
with respect thereto.

7.4 If and to the extent Rule 6e-2 and Rule 6e-3(T) are amended, or if
Rule 6e-3 is adopted, to provide exemptive relief from any provision of the '40
Act or the rules thereunder with respect to mixed and shared funding on terms
and conditions materially different from any exemptions granted in the Exemptive
Order, then Trust, and/or the Participating Insurance Companies, as appropriate,
shall take such steps as may be necessary to comply with Rule 6e-2 and Rule
6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such Rules are
applicable.

Article VIII. INDEMNIFICATION

8.1 Indemnification by Life Company. Life Company agrees to indemnify and
hold harmless Trust, Adviser and each of their directors, principals, officers,
employees and agents and each person, if any, who controls Trust or Adviser
within the meaning of Section 15 of the '33 Act (collectively, the "Indemnified
Parties" for purposes of Sections 8.1, 8.2, 8.3 and 8.4 of this Article VIII)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of Life Company, which consent shall not
be unreasonably withheld) or litigation (including legal and other expenses), to
which the Indemnified Parties may become subject under any statute, regulation,
at common law or otherwise, insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) or settlements are related to the
sale or acquisition of Trust shares or the Variable Contracts and:

(a) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in the
registration statement or prospectus or sales literature of the
Variable Contracts or contained in the Variable Contracts (or any
amendment or supplement to any of the foregoing), or arise out of
or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified Party
if such statement or omission or such alleged statement or
omission was made in reliance upon and in conformity with
information furnished to Life Company or an affiliate thereof by
or on behalf of Trust for use in the registration statement or
prospectus for the Variable Contracts or in the Variable Contracts
or

12
<PAGE> 13

sales literature (or any amendment or supplement) or otherwise
for use in connection with the sale of the Variable Contracts or
Trust shares; or

(b) arise out of or as a result of statements or representations
(other than statements or representations contained in the
Registration Statement, prospectus or sales literature of Trust
not supplied by Life Company or an affiliate thereof) or wrongful
conduct of Life Company or persons under its control, with respect
to the sale or distribution of the Variable Contracts or Trust
shares; or

(c) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a Registration Statement, prospectus,
or sales literature of Trust or any amendment thereof or
supplement thereto or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statements therein not misleading if such statement or
omission or such alleged statement or omission was made in
reliance upon and in conformity with information furnished to
Trust for inclusion therein by or on behalf of Life Company; or

(d) arise out of any failure by Life Company to provide in all
material respects the specified services and furnish the materials
under the terms of this Agreement; or

(e) arise out of or result from any material breach of any
representation and/or warranty made by Life Company in this
Agreement or arise out of or result from any other material breach
of this Agreement by Life Company.

8.2 Life Company shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation to which
an Indemnified Party would otherwise be subject by reason of Indemnified Party's
willful misfeasance, bad faith or gross negligence in the performance of such
Indemnified Party's duties or by reason of such Indemnified Party's reckless
disregard of obligations or duties under this Agreement or to Trust or Adviser,
whichever is applicable.

8.3 Life Company shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified Life Company in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served on any designated
party (or after such Indemnified Party shall have received notice of such
service on any designated agent), but failure to notify Life Company of any such
claim shall not relieve Life Company from any liability which it may have to the
Indemnified Party against whom such action is brought otherwise than on account
of this indemnification provision. In case any such action is brought against an
Indemnified Party, Life Company shall be entitled to participate, at its own
expense, in the defense thereof. Life Company also shall be entitled to assume
the defense thereof, with counsel satisfactory to the party named in the action.
After

13
<PAGE> 14

notice from Life Company to such party of Life Company's election to assume the
defense thereof, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and Life Company will not be liable to such
party under this Agreement for any legal or other expenses subsequently incurred
by such party independently in connection with the defense thereof other than
reasonable costs of investigation.

8.4 Trust or Adviser agrees promptly to notify Life Company of the
commencement of any litigation or proceedings against it or any of its officers,
trustees or directors in connection with the issuance or sale of the shares of
the selected Portfolio(s) or the operations of the Trust.

8.5 Indemnification by Trust and Adviser. Trust and Adviser agree to
indemnify and hold harmless Life Company and each of its directors, officers,
employees, and agents and each person, if any, who controls Life Company within
the meaning of Section 15 of the '33 Act (collectively, the "Indemnified
Parties" for the purposes of Sections 8.5, 8.6, 8.7 and 8.8 of this Article
VIII) against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of Trust or Adviser, which
consent shall not be unreasonably withheld) or litigation (including legal and
other expenses) to which the Indemnified Parties may become subject under any
statute, regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) or settlements
are related to the sale or acquisition of Trust shares or the Variable Contracts
and:

(a) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
Registration Statement or prospectus or sales literature of Trust
(or any amendment or supplement to any of the foregoing), or arise
out of or are based upon the omission or the alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, provided
that this agreement to indemnify shall not apply as to any
Indemnified Party if such statement or omission or such alleged
statement or omission was made in reliance upon and in conformity
with information furnished to Adviser or Trust or an affiliate
thereof by or on behalf of Life Company for use in the
Registration Statement or prospectus for Trust or in sales
literature (or any amendment or supplement) or otherwise for use
in connection with the sale of the Variable Contracts or Trust
shares; or

(b) arise out of or as a result of statements or representations
(other than statements or representations contained in the
registration statement, prospectus or sales literature of the
Variable Contracts not supplied by Trust, Adviser or an affiliate
thereof) or wrongful conduct of Trust or Adviser or persons under
their control, with respect to the sale or distribution of Trust
shares; or

14
<PAGE> 15

(c) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus,
or sales literature of the Variable Contracts or any amendment
thereof or supplement thereto or the omission or alleged omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading if such
statement or omission or such alleged statement or omission was
made in reliance upon and in conformity with information furnished
to Life Company for inclusion therein by or on behalf of Trust; or

(d) arise out of any failure by Trust or Adviser to provide in all
material respects the specified services and furnish the materials
under the terms of this Agreement (including a failure, whether
unintentional or in good faith or otherwise, to comply with the
diversification requirements specified in Section 2.10 of this
Agreement); or

(e) arise out of or result from any material breach of any
representation and/or warranty made by Trust or Adviser in this
Agreement or arise out of or result from any other material breach
of this Agreement by Trust or Adviser.

8.6 Trust or Adviser shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
Life Company or the Separate Accounts, whichever is applicable.

8.7 Trust or Adviser shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified Trust or Adviser in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served on any designated
party (or after such Indemnified Party shall have received notice of such
service on any designated agent), but failure to notify Trust or Adviser of any
such claim shall not relieve Trust or Adviser from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is brought
against an Indemnified Party, Trust or Adviser shall be entitled to participate,
at its own expense, in the defense thereof. Trust or Adviser also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from Trust or Adviser to such party of Trust
or Adviser's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and Trust
or Adviser will not be liable to such party under this Agreement for any legal
or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.

15
<PAGE> 16

8.8 Life Company agrees promptly to notify Trust or Adviser of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Variable Contracts
or the operation of each Separate Account.

Article IX. TERM; TERMINATION

9.1 This Agreement shall be effective as of the date hereof and shall
continue in force until terminated in accordance with the provisions herein.

9.2 This Agreement shall terminate in accordance with the following
provisions:

(a) At the option of Life Company or Trust at any time from the date
hereof upon 180 days' notice, unless a shorter time is agreed to
by the parties;

(b) At the option of Life Company, if Trust shares are not reasonably
available to meet the requirements of the Variable Contracts as
determined by Life Company. Prompt notice of election to terminate
shall be furnished by Life Company, said termination to be
effective ten (10) days after receipt of notice unless Trust makes
available a sufficient number of shares to reasonably meet the
requirements of the Variable Contracts within said ten-day period;

(c) At the option of Life Company, upon the institution of formal
proceedings against Trust or Adviser by the SEC, the NASD, or any
other regulatory body, the expected or anticipated ruling,
judgment or outcome of which would, in Life Company's reasonable
judgment, materially impair Trust's ability to meet and perform
Trust's obligations and duties hereunder. Prompt notice of
election to terminate shall be furnished by Life Company with said
termination to be effective upon receipt of notice;

(d) At the option of Trust, upon the institution of formal proceedings
against Life Company or the principal underwriter for the Variable
Contracts by the SEC, the NASD, or any other regulatory body, the
expected or anticipated ruling, judgment or outcome of which
would, in Trust's reasonable judgment, materially impair Life
Company's ability to meet and perform its obligations and duties
hereunder. Prompt notice of election to terminate shall be
furnished by Trust with said termination to be effective upon
receipt of notice;

(e) In the event Trust's shares are not registered, issued or sold in
accordance with applicable federal and/or state law and any
applicable rules and regulations thereunder, or such law precludes
the use of such

16
<PAGE> 17

shares as the underlying investment media for Variable Contracts
issued or to be issued by Life Company. Termination shall be
effective upon such occurrence without notice;

(f) Upon the receipt of any necessary regulatory approvals, or
requisite vote of Pass-through Voters having an interest in the
Portfolios, to substitute for shares of the Portfolios the shares
of another investment company in accordance with the terms of the
applicable Variable Contracts. Life Company shall give sixty (60)
days' written notice to Adviser of any proposed request for
regulatory approvals or vote to replace the Portfolios' shares;

(g) At the option of Trust if the Variable Contracts cease to qualify
as annuity contracts or life insurance contracts, as applicable,
under the Code, or if Trust reasonably believes that the Variable
Contracts may fail to so qualify. Termination shall be effective
upon receipt of notice by Life Company;

(h) At the option of Life Company, upon Trust's breach of any material
provision of this Agreement, which breach has not been cured to
the satisfaction of Life Company within thirty (30) days after
written notice of such breach is delivered to Trust;

(i) At the option of Trust, upon Life Company's breach of any material
provision of this Agreement, which breach has not been cured to
the satisfaction of Trust within thirty (30) days after written
notice of such breach is delivered to Life Company;

(j) At the option of Trust, if the Variable Contracts are not
registered, issued or sold in accordance with applicable federal
and/or state law and any applicable rules and regulations
thereunder. Termination shall be effective immediately upon such
occurrence without notice; and

(k) In the event this Agreement is assigned without the prior written
consent of Life Company, Trust and Adviser. Termination shall be
effective immediately upon such occurrence without notice.

9.3 If the need for substitution of the shares of another investment
company, pursuant to Section 26(b) of the '40 Act, arises out of the failure of
the Portfolios' shares to be registered, issued or sold to Life Company in
conformance with federal law, or such law precludes the use of shares of the
Portfolios as underlying investment media for Variable Contracts issued or to be
issued by the Company as a result of a failure of Trust to comply

17
<PAGE> 18

with such law, the expenses of obtaining such order shall be reimbursed by
Adviser. Adviser shall cooperate with Life Company in connection with such
application.

9.4 Notwithstanding any termination of this Agreement pursuant to
subsections (a), (b), (c), (e), (f) (h), and/or (k) (hereinafter referred to as
the "Qualifying Subsections") of Section 9.2 hereof, and unless the further sale
of shares of the Portfolios is proscribed by applicable law or the SEC or other
regulatory body, Trust will continue to make available additional Trust shares,
as provided below, pursuant to the terms and conditions of this Agreement, for
all Variable Contracts in effect on the effective date of termination of this
Agreement (hereinafter referred to as "Existing Contracts"). Specifically,
without limitation, the Owners of the Existing Contracts shall be permitted to
reallocate investments in Trust, redeem investments in Trust and/or invest in
Trust upon the payment of additional premiums under the Existing Contracts. In
the event of a termination of this Agreement pursuant to the Qualifying
Subsections of Section 9.2 hereof, Trust and Adviser, as promptly as is
practicable under the circumstances, shall notify Life Company whether Trust
under applicable law may continue to make Trust shares available after such
termination. If Trust shares continue to be made available after such
termination, the provisions of this Agreement shall remain in effect and
thereafter either Trust or Life Company may terminate the Agreement, as so
continued pursuant to this Section 9.4, upon sixty (60) days' prior written
notice to the other party. This Section 9.4 shall not apply in the event of
termination of this Agreement pursuant to subsections (d), (g), (i) and/or (j)
of Section 9.2 hereof.

9.5 Except as necessary to implement Variable Contract Owner initiated
transactions, or as required by state insurance laws or regulations, Life
Company shall not redeem the shares attributable to the Variable Contracts (as
opposed to the shares attributable to Life Company's assets held in the Separate
Accounts), and Life Company shall not prevent Variable Contract Owners from
allocating payments to a Portfolio that was otherwise available under the
Variable Contracts until sixty (60) days after Life Company shall have notified
Trust of its intention to do so.

Article X. NOTICES

Any notice hereunder shall be given by registered or certified mail return
receipt requested to the other party at the address of such party set forth
below or at such other address as such party may from time to time specify in
writing to the other party.

If to Life Company: Indianapolis Life Insurance Company
2960 N. Meridian Street
Indianapolis, Indiana 46208
Attention: Janis Funk, Esq.

18
<PAGE> 19

If to Trust: SAFECO Resource Series Trust
4333 Brooklyn Avenue N.E.
Seattle, Washington 98185
Attention: Controller

If to Adviser: SAFECO Asset Management Company
4333 Brooklyn Avenue N.E.
Seattle, Washington 98185
Attention: Institutional Division

Notice shall be deemed given on the date of receipt by the addressee as
evidenced by the return receipt.

Article XI. MISCELLANEOUS

11.1 The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.

11.2 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.

11.3 This Agreement may not be assigned by any party without the written
consent of all parties.

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

11.5 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of Washington. It
shall also be subject to the provisions of the federal securities laws and the
rules and regulations thereunder and to any orders of the SEC granting exemptive
relief therefrom and the conditions of such orders.

11.6 It is understood and expressly stipulated that neither the
shareholders of shares of any Portfolio nor the Trustees or officers of Trust or
any Portfolio shall be personally liable hereunder. No Portfolio shall be liable
for the liabilities of any other Portfolio. All persons dealing with Trust or a
Portfolio must look solely to the property of Trust or that Portfolio,
respectively, for enforcement of any claims against Trust or that Portfolio. It
is also understood that each of the Portfolios shall be deemed to be entering
into a separate Agreement with Life Company so that it is as if each of the
Portfolios had signed a separate

19
<PAGE> 20

Agreement with Life Company and that a single document is being signed simply to
facilitate the execution and administration of the Agreement.

11.7 Each party shall cooperate with each other party and all appropriate
governmental authorities (including without limitation the SEC, the NASD and
state insurance regulators) and shall permit such authorities reasonable access
to its books and records in connection with any investigation or inquiry
relating to this Agreement or the transactions contemplated hereby.

11.8 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, which the parties hereto are entitled to under state and
federal laws.

11.9 No provision of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by Trust,
Adviser and Life Company.

IN WITNESS WHEREOF, the parties have caused their duly authorized
officers to execute this Trust Participation Agreement as of the date and year
first above written.

SAFECO Resource Series Trust

By:
------------------------------
Name: Neal A. Fuller
Title: Vice President and Controller

SAFECO Asset Management Company

By:
------------------------------
Name: Leslie Eggerling
Title: Vice President

Bankers Life Insurance Company of New York

By:
----------------------------
Name:
--------------------------
Title:
-------------------------

20
<PAGE> 21

SCHEDULE A

SAFECO Resource Series Trust - Portfolios

Equity Portfolio
Growth Portfolio

Bankers Life Insurance Company of New York - Variable Contracts

Visionary Choice Variable Annuity

<PAGE> 22

SCHEDULE B
<TABLE>
<CAPTION>

Separate Accounts and Sub-Accounts Selected Portfolios
- ---------------------------------- -------------------

<S> <C>
Bankers Life Insurance Company of New York Account I

Safeco Resource Equity Portfolio Sub-Account Equity Portfolio

Safeco Resource Growth Portfolio Sub-Account Growth Portfolio
</TABLE>

<PAGE> 1
EXHIBIT 8(n)

PARTICIPATION AGREEMENT

AMONG

BANKERS LIFE INSURANCE COMPANY OF NEW YORK ,

SOGEN VARIABLE FUNDS, INC.,

AND

SOCIETE GENERALE SECURITIES CORPORATION

THIS AGREEMENT, dated as of the ____ day of ______, 1998 by and among
Bankers Life Insurance Company of New York, (the "Company"), a New York
insurance company, on its own behalf and on behalf of each segregated asset
account of the Company set forth on Schedule A hereto as may be amended from
time to time (each account hereinafter referred to as the "Account"), SoGen
Variable Funds, Inc. (the "Fund"), a corporation organized under the laws of
Maryland, and Societe Generale Securities Corporation (the "Underwriter"), a New
York corporation.

WHEREAS, the Fund engages in business as an open-end management investment
company and is or will be available to act as the investment vehicle for
separate accounts established for variable life insurance and variable annuity
contracts (the "Variable Insurance Products") to be offered by insurance
companies which have entered into participation agreements with the Fund and
Underwriter ("Participating Insurance Companies");

WHEREAS, the shares of common stock of the Fund are divided into several
series of shares, each designated a "Portfolio" and representing the interest in
a particular managed portfolio of securities and other assets;

WHEREAS, the Fund has, to the extent necessary, obtained an order from the
Securities and Exchange Commission (the "SEC") granting Participating Insurance
Companies and variable annuity and variable life insurance separate accounts
exemptions from the provisions of sections 9(a), 13(a), 15(a), and 15(b) of the
Investment Company Act of 1940, as amended, (the "1940 Act") and Rules
6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, if and to the extent necessary to
permit shares of the Fund to be sold to and held by variable annuity and
variable life insurance separate accounts of both affiliated and unaffiliated
life insurance companies (the "Mixed and Shared Funding Exemptive Order");

WHEREAS, the Fund is registered as an open-end management investment
company under the 1940 Act and shares of the Portfolios are registered under the
Securities Act of 1933, as amended (the "1933 Act");

<PAGE> 2
WHEREAS, Societe Generale Asset Management Corp. (the "Adviser"), which
serves as investment adviser to the Fund, is duly registered as an investment
adviser under the federal Investment Advisers Act of 1940, as amended, and any
applicable state securities laws;

WHEREAS, the Company has issued or will issue certain variable life
insurance and/or variable annuity contracts supported wholly or partially by the
Account (the "Contracts"), and said Contracts are listed in Schedule A hereto,
as it may be amended from time to time by mutual written agreement;

WHEREAS, the Account is duly established and maintained as a segregated
asset account, duly established by the Company, on the date shown for such
Account on Schedule A hereto, to set aside and invest assets attributable to the
aforesaid Contracts;

WHEREAS, the Underwriter, which serves as distributor to the Fund, is
registered as a broker dealer with the SEC under the Securities Exchange Act of
1934, as amended (the "1934 Act"), and is a member in good standing of the
National Association of Securities Dealers, Inc. (the "NASD"); and

WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Portfolios listed in
Schedule A hereto, as it may be amended from time to time by mutual written
agreement (the "Designated Portfolios") on behalf of the Account to fund the
aforesaid Contracts, and the Underwriter is authorized to sell such shares to
the Account at net asset value;

NOW, THEREFORE, in consideration of their mutual promises, the Company,
the Fund and the Underwriter agree as follows:

ARTICLE I. Sale of Fund Shares

1.1. The Fund has granted to the Underwriter exclusive
authority to distribute the Fund's shares, and has agreed to instruct, and has
so instructed, the Underwriter to make available to the Company for purchase on
behalf of the Account Fund shares of those Designated Portfolios selected by the
Underwriter. Pursuant to such authority and instructions, and subject to Article
X hereof, the Underwriter agrees to make available to the Company for purchase
on behalf of the Account, shares of those Designated Portfolios listed on
Schedule A to this Agreement, such purchases to be effected at net asset value
in accordance with Section 1.3 of this Agreement. Notwithstanding the foregoing,
(i) Fund series (other than those listed on Schedule A) in existence now or that
may be established in the future will be made available to the Company only as
the Underwriter may so provide, and (ii) the Board of Directors of the Fund (the
"Board") may suspend or terminate the offering of Fund shares of any

- 2 -
<PAGE> 3

Designated Portfolio or class thereof, if such action is required by law or by
regulatory authorities having jurisdiction or if, in the sole discretion of the
Board acting in good faith and in light of its fiduciary duties under federal
and any applicable state laws, suspension or termination is necessary in the
best interests of the shareholders of such Designated Portfolio.

1.2 The Fund shall redeem, at the Company's request, any
full or fractional Designated Portfolio shares held by the Company on behalf of
the Account, such redemptions to be effected at net asset value in accordance
with Section 1.3 of this Agreement. Notwithstanding the foregoing, (i) the
Company shall not redeem Fund shares attributable to Contract owners except in
the circumstances permitted in Section 10.3 of this Agreement, and (ii) the Fund
may delay redemption of Fund shares of any Designated Portfolio to the extent
permitted by the 1940 Act, any rules, regulations or orders thereunder, or the
then current Fund Prospectus.

1.3 Purchase and Redemption Procedures

(a) The Fund hereby appoints the Company as an agent
of the Fund for the limited purpose of receiving purchase and
redemption requests on behalf of the Account (but not with respect to
any Fund shares that may be held in the general account of the
Company) for shares of those Designated Portfolios made available
hereunder, based on allocations of amounts to the Account or
subaccounts thereof under the Contracts and other transactions
relating to the Contracts or the Account. Receipt of any such request
(or relevant transactional information therefor) on any day the New
York Stock Exchange is open for trading and on which the Fund
calculates it net asset value pursuant to the rules of the SEC (a
"Business Day") by the Company as such limited agent of the Fund
prior to the time that the Fund calculates its net asset value as
described from time to time in the Fund Prospectus (which as of the
date of execution of this Agreement is 4:00 p.m. Eastern Time) shall
constitute receipt by the Fund on that same Business Day, provided
that the Fund receives notice of such request by 9:30 a.m. Eastern
Time on the next following Business Day.

(b) The Company shall pay for shares of each
Designated Portfolio on the same day that it notifies the Fund of a
purchase request for such shares. Payment for Designated Portfolio
shares shall be made in federal funds transmitted to the Fund by wire
to be received by the Fund by 4:00 p.m. Eastern Time on the day the
Fund is notified of the purchase request for Designated Portfolio
shares (unless the Fund determines and so advises the Company that
sufficient proceeds are available from redemption of shares of other
Designated Portfolios effected pursuant to redemption requests
tendered by the Company on behalf of the Account). If federal funds
are not received on time, such funds will be invested, and Designated
Portfolio shares purchased thereby will be issued, as soon as
practicable and the Company shall promptly, upon the Fund's request,
reimburse the Fund for any charges, costs, fees, interest or other

- 3 -
<PAGE> 4
expenses incurred by the Fund in connection with any advances to, or
borrowing or overdrafts by, the Fund, or any similar expenses incurred by
the Fund, as a result of portfolio transactions effected by the Fund based
upon such purchase request. Upon receipt of federal funds so wired, such
funds shall cease to be the responsibility of the Company and shall become
the responsibility of the Fund.

(c) Payment for Designated Portfolio shares redeemed
by the Account or the Company shall be made in federal funds transmitted
by wire to the Company or any other designated person on the next Business
Day after the Fund is properly notified of the redemption order of such
shares (unless redemption proceeds are to be applied to the purchase of
shares of other Designated Portfolio in accordance with Section 1.3(b) of
this Agreement), except that the Fund reserves the right to delay payment
of redemption proceeds to the extent permitted under Section 22(e) of the
1940 Act and any Rules thereunder, and in accordance with the procedures
and policies of the Fund as described in the then current prospectus. The
Fund shall not bear any responsibility whatsoever for the proper
disbursement or crediting of redemption proceeds by the Company, the
Company alone shall be responsible for such action.

(d) Any purchase or redemption request for Designated
Portfolio shares held or to be held in the Company's general account shall
be effected at the net asset value per share next determined after the
Fund's receipt of such request, provided that, in the case of a purchase
request, payment for Fund shares so requested is received by the Fund in
federal funds prior to close of business for determination of such value,
as defined from time to time in the Fund Prospectus.

1.4 The Fund shall use its best efforts to make the net asset
value per share for each Designated Portfolio available to the Company by 6:30
p.m. Eastern Time each Business Day, and in any event, as soon as reasonably
practicable after the net asset value per share for such Designated Portfolio is
calculated, and shall calculate such net asset value in accordance with the
Fund's Prospectus. If the Fund provides the Company with materially incorrect
share net asset value information through no fault of the Company, the Company
on behalf of the Account shall be entitled, to the extent reasonably
practicable, to an adjustment to the number of shares purchased or redeemed to
reflect the correct net asset value, and the Underwriter shall promptly, on
request of the Company, reimburse the Company, or cause the responsible party to
reimburse the Company, for any reasonable out-of-pocket charges, costs, fees or
other expenses incurred by the Company in implementing the steps determined by
the Fund to be necessary to correct the pricing error. Neither the Fund, any
Designated Portfolio, the Underwriter, nor any of their affiliates shall be
liable for any information provided to the Company pursuant to this Agreement
which information is based on incorrect information supplied by the Company to
the Fund or the Underwriter.

- 4 -
<PAGE> 5
1.5 The Fund shall furnish notice (by wire or telephone followed
by written confirmation) to the Company as soon as reasonably practicable of any
income dividends or capital gain distributions payable on any Designated
Portfolio shares. The Company, on its behalf and on behalf of the Account,
hereby elects to receive all such dividends and distributions as are payable on
any Designated Portfolio shares in the form of additional shares of that
Designated Portfolio. The Company reserves the right, on its behalf and on
behalf of the Account, to revoke this election and to receive all such dividends
and capital gain distributions in cash. The Fund shall notify the Company
promptly of the number of Designated Portfolio shares so issued as payment of
such dividends and distributions.

1.6. Issuance and transfer of Fund shares shall be by book entry
only. Stock certificates will not be issued to the Company or the Account.
Purchase and redemption orders for Fund shares shall be recorded in an
appropriate ledger for the Account or the appropriate subaccount of the Account.

1.7. (a) The parties hereto acknowledge that the
arrangement contemplated by this Agreement is not exclusive; the
Fund's shares may be sold to other insurance companies (subject to
Section 1.8 hereof) and the cash value of the Contracts may be
invested in other investment companies, provided, however, that until
this Agreement is terminated pursuant to Article X, the Company shall
give equivalent prominence to the Designated Portfolios as the
Company provides to other funding vehicles available under the
Contracts in promotional materials that describe funding vehicles
available under the Contracts and are published by the Company.

(b) The Company shall not, without prior notice to the
Underwriter (unless otherwise required by applicable law) take any action
to operate the Account as a management investment company under the 1940
Act.

(c) The Company shall not, without prior notice to the
Underwriter (unless otherwise required by applicable law), induce Contract
owners to change or modify the Fund or change the Fund's distributor or
investment adviser.

1.8. The Underwriter and the Fund shall sell Fund shares only to
Participating Insurance Companies and their separate accounts and to persons or
plans ("Qualified Persons") that qualify to purchase shares of the Fund under
Section 817(h) of the Internal Revenue Code of 1986, as amended (the "Code") and
the regulations thereunder without impairing the ability of the Account to
consider the portfolio investments of the Fund as constituting investments of
the Account for the purpose of satisfying the diversification requirements of
Section 817(h). The Underwriter and the Fund shall not sell Fund shares to any
insurance company or separate account unless an agreement complying with Article
VI of this Agreement is in effect to govern such sales. Subject to Sections 6.1
and 6.2 hereof, the Company hereby represents and warrants that

- 5 -
<PAGE> 6
it and the Account are Qualified Persons. The Fund reserves the right to cease
offering shares of any Designated Portfolio in the discretion of the Fund.

ARTICLE II. Representations and Warranties

2.1 The Company represents and warrants that the Contracts (a) are
or, prior to issuance, will be registered under the 1933 Act or, alternatively
(b) are not registered because they are properly exempt from registration under
the 1933 Act or will be offered exclusively in transactions that are properly
exempt from registration under the 1933 Act. The Company further represents and
warrants that the Contracts will be issued and sold in compliance in all
material respects with all applicable federal securities and state securities
and insurance laws and that the sale of the Contracts shall comply in all
material respects with state insurance suitability requirements. The Company
further represents and warrants that it is an insurance company duly organized
and in good standing under applicable law, that it has legally and validly
established the Account prior to any issuance or sale thereof as a segregated
asset account under New York insurance laws, and that it (a) has registered or,
prior to any issuance or sale of the Contracts, will register the Account as a
unit investment trust in accordance with the provisions of the 1940 Act to serve
as a segregated investment account for the Contracts, or alternatively (b) has
not registered the Account in proper reliance upon an exclusion from
registration under the 1940 Act. The Company shall register and qualify the
Contracts or interests therein as securities in accordance with the laws of the
various states only if and to the extent deemed advisable by the Company.

2.2 The Fund represents and warrants that Fund shares sold
pursuant to this Agreement shall be registered under the 1933 Act, duly
authorized for issuance and sold in compliance with the laws of the State of New
York and the State of Indiana and applicable federal securities laws and that
the Fund is and shall remain registered under the 1940 Act. The Fund shall amend
the registration statement for its shares under the 1933 Act and the 1940 Act
from time to time as required in order to effect the continuous offering of its
shares. The Fund shall register and qualify the shares for sale in accordance
with the laws of the various states only if and to the extent deemed advisable
by the Fund or the Underwriter.

2.3 The Fund intends to make payments to finance distribution
expenses pursuant to Rule 12b-1 under the 1940 Act. In this regard, the Fund's
board of directors, a majority of whom are not interested persons of the Fund,
have formulated and approved the Fund's plan adopted pursuant to Rule 12b-1
under the 1940 Act to finance distribution expenses.

2.4 The Fund makes no representations as to whether any aspect of
its operations, including, but not limited to, investment policies, fees and
expenses, complies with the insurance and other applicable laws of the various
states, except that the Fund

- 6 -
<PAGE> 7
represents that the Fund's investment policies, fees and expenses, are and shall
at all times remain in compliance with the laws of the State of New York and the
State of Indiana to the extent required to perform this Agreement, provided,
however, that the Company shall notify the Fund with respect to any additional
requirements that are specifically directed to the Company by state insurance
departments.

2.5 The Fund represents that it is lawfully organized and validly
existing under the laws of the State of Maryland and that it does and will
comply in all material respects with the 1940 Act.

2.6 The Underwriter represents and warrants that it is a member in
good standing of the NASD and is registered as a broker-dealer with the SEC. The
Underwriter further represents that it will sell and distribute the Fund shares
in accordance with the laws of the State of New York and the State of Indiana
and any applicable state and federal securities laws.

2.7 The Underwriter represents and warrants that the Adviser is
and shall remain duly registered under all applicable federal and state
securities laws and that the Adviser shall perform its obligations for the Fund
in compliance in all material respects with the laws of the State of New York
and the State of Indiana and any applicable state and federal securities laws.

2.8 The Fund and the Underwriter represent and warrant that all of
their directors, officers, employees, investment advisers, and other individuals
or entities dealing with the money and/or securities of the Fund are and shall
continue to be at all times covered by a blanket fidelity bond or similar
coverage for the benefit of the Fund in an amount not less than the minimum
coverage as required currently by Rule 17g-1 of the 1940 Act or related
provisions as may be promulgated from time to time. The aforesaid bond shall
include coverage for larceny and embezzlement and shall be issued by a reputable
bonding company.

2.9 The Company represents and warrants that all of its directors,
officers, employees, investment advisers, and other individuals/entities
employed or controlled by the Company dealing with the money and/or securities
of the Account are covered by a blanket fidelity bond or similar coverage for
the benefit of the Account, in an amount not less than $5 million. The aforesaid
bond includes coverage for larceny and embezzlement and is issued by a reputable
bonding company.

ARTICLE III. Prospectuses and Proxy Statements; Voting

3.1 The Underwriter shall provide the Company with as many copies
of the Fund's current prospectus (describing only the Designated Portfolios
listed on Schedule A) as the Company may reasonably request. The Company shall
bear the expense of printing copies of the current prospectus for the Contracts
that will be

- 7 -
<PAGE> 8

distributed to existing Contract owners, and the Company shall bear the expense
of printing copies of the Fund's prospectus that are used in connection with
offering the Contracts issued by the Company. If requested by the Company in
lieu thereof, the Fund shall provide such documentation (including a final copy
of the new prospectus on diskette at the Fund's expense) and other assistance as
is reasonably necessary in order for the Company once each year (or more
frequently if the prospectus for the Fund is amended) to have the prospectus for
the Contracts and the prospectus for the Designated Portfolios printed together
in one document (such printing to be at the Company's expense).

3.2 The Fund's prospectus shall state that the current Statement
of Additional Information ("SAI") for the Fund is available, and the Underwriter
(or the Fund), at its expense, shall provide a reasonable number of copies of
such SAI free of charge to the Company for itself and for any owner of a
Contract who requests such SAI.

3.3 The Fund, at its expense, shall provide the Company with
copies of its proxy material, reports to shareholders, and other communications
to shareholders in such quantity as the Company shall reasonably require for
distributing to Contract owners.

3.4 The Company shall:
(i) solicit voting instructions from Contract owners;

(ii) vote the Fund shares in accordance with
instructions received from Contract owners; and

(iii) vote Fund shares for which no instructions have
been received in the same proportion as Fund
shares of such portfolio for which instructions
have been received.

The Company will vote Fund shares held in any segregated asset account in the
same proportion as Fund shares of such portfolio for which voting instructions
have been received from Contract owners, to the extent permitted by law.

3.5 Participating Insurance Companies shall be responsible for
assuring that each of their separate accounts participating in a Designated
Portfolio calculates voting privileges as required by the Shared Funding
Exemptive Order and consistent with any reasonable standards that the Fund may
adopt and provide in writing. The Fund hereby confirms that the manner in which
the Company currently calculates voting privileges is consistent with the manner
in which other Participating Insurance Companies are required to calculate
voting privileges. The Fund and the Underwriter will notify the Company if
either becomes aware that another Participating Insurance Company has changed
the manner in which it so calculates voting privileges.

- 8 -
<PAGE> 9

3.6 The Fund will comply with all provisions of the 1940 Act
requiring voting by shareholders, and in particular the fund will either provide
for annual meetings or comply with Section 16(c) of the 1940 Act (although the
Fund is not one of the trusts described in Section 16(c) of that Act) as well as
Sections 16(a) and, if and when applicable, 16(b). Further, the Fund will act in
accordance with the SEC's interpretation of the requirements of Section 16(a)
with respect to periodic elections of trustees and with whatever rule the
Commission may promulgate with respect thereto.

ARTICLE IV. Sales Material and Information

4.1 The Company shall furnish, or shall cause to be furnished, to the
Fund or its designee, at least fifteen business days prior to first use, each
piece of sales literature or other promotional material that the Company
develops and in which the Fund (or a Designated Portfolio thereof) or the
Adviser or the Underwriter is named. No such material shall be used until
approved by the Fund or its designee, and the Fund will use its best efforts for
it or its designee to review such sales literature or promotional material
within ten Business Days after receipt of such material. The Fund or its
designee reserves the right to reasonably object to the continued use of any
such sales literature or other promotional material in which the Fund (or a
Designated Portfolio thereof) or the Adviser or the Underwriter is named, and no
such material shall be used if the Fund or its designee so object.

4.2 The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund in
connection with the sale of the Contracts other than the information or
representations contained in the registration statement or prospectus or SAI for
the Fund shares, as such registration statement and prospectus or SAI may be
amended or supplemented from time to time, or in reports or proxy statements for
the Fund, or in sales literature or other promotional material approved by the
Fund or its designee or by the Underwriter, except with the permission of the
Fund or the Underwriter or the designee of either.

4.3 The Fund and the Underwriter, or their designee, shall furnish, or
shall cause to be, furnished, to the Company, at least fifteen business days
prior to first use, each piece of sales literature or other promotional material
that it develops and in which the Company, and/or its Account, or the Contracts,
is named. No such material shall be used until approved by the Company, and the
Company will use its best efforts to review such sales literature or promotional
material within ten Business Days after receipt of such material. The Company
reserves the right to reasonably object to the continued use of any such sales
literature or other promotional material in which the Company and/or its
Account, or the Contracts, is named, and no such material shall be used if the
Company so objects.

- 9 -
<PAGE> 10
4.4. The Fund and the Underwriter shall not give any information or make
any representations on behalf of the Company or concerning the Company, the
Account, or the Contracts other than the information or representations
contained in a registration statement, prospectus (which shall include an
offering memorandum, if any, if the Contracts issued by the Company or interests
therein are not registered under the 1933 Act), or SAI for the Contracts, as
such registration statement, prospectus, or SAI may be amended or supplemented
from time to time, or in published reports for the Account which are in the
public domain or approved by the Company for distribution to Contract owners, or
in sales literature or other promotional material approved by the Company or its
designee, except with the permission of the Company.

4.5 The Fund will provide to the Company at least one complete copy of
all registration statements, prospectuses, SAIs, reports, proxy statements,
sales literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments to any of the above, that
relate to the Fund or its shares, contemporaneously with the filing of such
document(s) with the SEC or other regulatory authorities. The Fund will provide
to the Company any complaints received that pertain to the Company, the Account,
or the Contracts.

4.6 The Company will provide to the Fund at least one complete copy of
all registration statements, prospectuses (which shall include an offering
memorandum, if any, if the Contracts issued by the Company or interests therein
are not registered under the 1933 Act), SAIs, reports, solicitations for voting
instructions, sales literature and other promotional materials, applications for
exemptions, requests for no-action letters, and all amendments to any of the
above, that relate to the Contracts or the Account, contemporaneously with the
filing of such document(s) with the SEC or other regulatory authorities. The
Company shall provide to the Fund and the Underwriter any complaints received
from the Contract owners pertaining to the Fund or the Designated Portfolio.

4.7 The Fund will provide the Company with as much notice as is
reasonably practicable of any proxy solicitation for any Designated Portfolio,
and of any material change in the Fund's registration statement, particularly
any change resulting in a change to the registration statement or prospectus for
any Account. The Fund will work with the Company so as to enable the Company to
solicit proxies from Contract owners, or to make changes to its prospectus or
registration statement, in an orderly manner. The Fund will make reasonable
efforts to attempt to have changes affecting Contract prospectuses become
effective simultaneously with the annual updates for such prospectuses.

4.8 For purposes of this Article IV, the phrase "sales literature and
other promotional materials" includes, but is not limited to, any of the
following that refer to the Fund or any affiliate of the Fund: advertisements
(such as material published, or designed for use in, a newspaper, magazine, or
other periodical, radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, or other public media), and sales
literature (i.e., any written or electronic communication

- 10 -
<PAGE> 11

distributed or made generally available to customers or the public, including
brochures, circulars, reports, market letters, form letters, telemarketing
scripts, seminar texts, reprints or excerpts of any other advertisement, sales
literature, or published article), distributed or made generally available to
customers or to the public, educational or training materials or other
communications distributed or made generally available to some or all agents or
employees, and registration statements, prospectuses, SAIs, shareholder reports,
proxy materials, and any other communications distributed or made generally
available with regard to the Fund.

ARTICLE V. Fees and Expenses

5.1 The Fund and the Underwriter shall pay no fee or other compensation
to the Company under this Agreement, except that, the Underwriter may, to the
extent permitted under the Fund's distribution plan adopted pursuant to Rule
12b-1 under the 1940 Act, make payments to the Company or to the underwriter for
the Contracts if and in amounts agreed to by the Underwriter in writing, and
such payments will be made out of existing fees otherwise payable to the
Underwriter, past profits of the Underwriter, or other resources available to
the Underwriter. No such payments shall be made directly by the Fund.

5.2 All expenses incident to performance by the Fund under this
Agreement shall be paid by the Fund. The Fund shall see to it that all its
shares are registered and authorized for issuance in accordance with applicable
federal law and, if and to the extent deemed advisable by the Fund, in
accordance with applicable state laws prior to their sale. The Fund shall bear
the expenses for the cost of registration and qualification of the Fund's
shares, preparation and filing of the Fund's prospectus and registration
statement, proxy materials and reports, setting the prospectus in type, setting
in type and printing the proxy materials and reports to shareholders (including
the costs of printing a prospectus that constitutes an annual report), the
preparation of all statements and notices required by any federal or state law,
and all taxes on the issuance or transfer of the Fund's shares.

5.3 The Company shall bear the expenses of distributing the Fund's
prospectus to owners of Contracts issued by the Company and of distributing the
Fund's proxy materials and reports to such Contract owners.

ARTICLE VI. Diversification and Qualification

6.1 The Fund will invest its assets in such a manner as to ensure that
the Contracts will be treated as annuity or life insurance contracts, whichever
is appropriate, under the Code and the regulations issued thereunder (or any
successor provisions). Without limiting the scope of the foregoing, each
Designated Portfolio has complied and will continue to comply with Section
817(h) of the Code and Treasury Regulation Section 1.817-5, and any Treasury
interpretations thereof, relating to the diversification

- 11 -
<PAGE> 12

requirements for variable annuity, endowment, or life insurance contracts, and
any amendments or other modifications or successor provisions to such Section or
Regulations. In the event of a breach of this Article VI by the Fund, it will
take all reasonable steps (a) to notify the Company of such breach and (b) to
adequately diversify the Fund so as to achieve compliance within the grace
period afforded by Regulation 817.5.

6.2 The Fund represents that it is or will be qualified as a Regulated
Investment Company under Subchapter M of the Code, and that it will make every
effort to maintain such qualification (under Subchapter M or any successor or
similar provisions) and that it will notify the Company immediately upon having
a reasonable basis for believing that it has ceased to so qualify or that it
might not so qualify in the future.

6.3 Subject to Sections 6.1 and 6.2 hereof, the Company represents that
the Contracts are currently, and at the time of issuance shall be, treated as
life insurance or annuity insurance contracts, under applicable provisions of
the Code, and that it will make every effort to maintain such treatment, and
that it will notify the Fund and the Underwriter immediately upon having a
reasonable basis for believing the Contracts have ceased to be so treated or
that they might not be so treated in the future. The Company agrees that any
prospectus offering a contract that is a "modified endowment contract" as that
term is defined in Section 7702A of the Code (or any successor or similar
provision), shall identify such contract as a modified endowment contract.

- 12 -
<PAGE> 13

ARTICLE VII. Potential Conflicts

The following provisions shall apply only upon issuance of the Mixed and Shared
Funding Order and the sale of shares of the Fund to variable life insurance
separate accounts.

7.1 The Board will monitor the Fund for the existence of any material
irreconcilable conflict between the interests of the Contract owners of all
separate accounts investing in the Fund. An irreconcilable material conflict may
arise for a variety of reasons, including: (a) an action by any state insurance
regulatory authority; (b) a change in applicable federal or state insurance,
tax, or securities laws or regulations, or a public ruling, private letter
ruling, no-action or interpretative letter, or any similar action by insurance,
tax, or securities regulatory authorities; (c) an administrative or judicial
decision in any relevant proceeding; (d) the manner in which the investments of
any Portfolio are being managed; (e) a difference in voting instructions given
by variable annuity contract and variable life insurance contract owners; or (f)
a decision by an insurer to disregard the voting instructions of contract
owners. The Board shall promptly inform the Company if it determines that an
irreconcilable material conflict exists and the implications thereof.

7.2. The Company will report any potential or existing conflicts of which
it is aware to the Board. The Company will assist the Board in carrying out its
responsibilities under the Mixed and Shared Funding Exemptive Order, by
providing the Board with all information reasonably necessary for the Board to
consider any issues raised. This includes, but is not limited to, an obligation
by the Company to inform the Board whenever Contract owner voting instructions
are disregarded.

7.3 If it is determined by a majority of the Board, or a majority of its
disinterested members, that a material irreconcilable conflict exists, the
Company and other Participating Insurance Companies shall, at their expense (to
be allocated as near as practicable in proportion to such parties' respective
responsibilities for such conflict) and to the extent reasonably practicable (as
determined by a majority of the disinterested Board members), take whatever
steps are necessary to remedy or eliminate the irreconcilable material conflict,
up to and including: (1) withdrawing the assets allocable to some or all of the
separate accounts from the Fund or any Portfolio and reinvesting such assets in
a different investment medium, including (but not limited to) another Portfolio
of the Fund, or submitting the question whether such segregation should be
implemented to a vote of all affected contract owners and, as appropriate,
segregating the assets of any appropriate group (i.e., annuity contract owners,
life insurance contract owners, or variable contract owners of one or more
Participating Insurance Companies) that votes in favor of such segregation, or
offering to the affected contract owners the option of making such a change; and
(2) establishing a new registered management investment company or managed
separate account.

- 13 -
<PAGE> 14
7.4 If a material irreconcilable conflict arises because of a decision
by the Company to disregard Contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Fund's election, to withdraw the Account's investment in
the Fund and terminate this Agreement with respect to each Account; provided,
however, that such withdrawal and termination shall be limited to the extent
required by the foregoing material irreconcilable conflict as determined by a
majority of the disinterested members of the Board. Any such withdrawal and
termination must take place within six (6) months after the Fund gives written
notice that this provision is being implemented, and until the end of that six
month period the Fund shall continue to accept and implement orders by the
Company for the purchase (and redemption) of shares of the Fund.

7.5 If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Company conflicts with
the majority of other state regulators, then the Company will withdraw the
affected Account's investment in the Fund and terminate this Agreement with
respect to such Account within six months after the Board informs the Company in
writing that it has determined that such decision has created an irreconcilable
material conflict; provided, however, that such withdrawal and termination shall
be limited to the extent required by the foregoing material irreconcilable
conflict as determined by a majority of the disinterested members of the Board.
Until the end of the foregoing six month period, the Fund shall continue to
accept and implement orders by the Company for the purchase (and redemption) of
shares of the Fund.

7.6 For purposes of Section 7.3 through 7.6 of this Agreement, a
majority of the disinterested members of the Board shall determine whether any
proposed action adequately remedies any irreconcilable material conflict, but in
no event will the Fund be required to establish a new funding medium for the
Contracts. The Company shall not be required by Section 7.3 to establish a new
funding medium for the Contract if an offer to do so has been declined by vote
of a majority of Contract owners materially adversely affected by the
irreconcilable material conflict. In the event that the Board determines that
any proposed action does not adequately remedy any irreconcilable material
conflict, then the Company will withdraw the Account's investment in the Fund
and terminate this Agreement within six (6) months after the Board informs the
Company in writing of the foregoing determination; provided, however, that such
withdrawal and termination shall be limited to the extent required by any such
material irreconcilable conflict as determined by a majority of the
disinterested members of the Board.

7.7 If and to the extent the Mixed and Shared Funding Exemption Order or
any amendment thereto contains terms and conditions different from Sections 3.4,
3.5, 3.6, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement, then the Fund and/or
the Participating Insurance Companies, as appropriate, shall take such steps as
may be necessary to comply with the Mixed and Shared Funding Exemptive Order,
and Sections 3.4, 3.5, 3.6, 7.1, 7.2, 7.3, 7.4 and 7.5 of this Agreement shall
continue in effect only to the extent that

- 14 -
<PAGE> 15

terms and conditions substantially identical to such Sections are contained in
the Mixed and Shared Funding Exemptive Order or any amendment thereto. If and to
the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or Rule 6e-3 is adopted,
to provide exemptive relief from any provision of the 1940 Act or the rules
promulgated thereunder with respect to mixed or shared funding (as defined in
the Mixed and Shared Funding Exemptive Order) on terms and conditions materially
different from those contained in the Mixed and Shared Funding Exemptive Order,
then (a) the Fund and/or the Participating Insurance Companies, as appropriate,
shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T),
as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable;
and (b) Sections 3.4, 3.5, 7.1., 7.2, 7.3, 7.4, and 7.5 of this Agreement shall
continue in effect only to the extent that terms and conditions substantially
identical to such Sections are contained in such Rule(s) as so amended or
adopted.

ARTICLE VIII. Indemnification

8.1 Indemnification By the Company

8.1(a). The Company agrees to indemnify and hold harmless the Fund, the
Underwriter, the Adviser and each of its directors and officers, and each
person, if any, who controls the Fund or Underwriter within the meaning of
Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes
of this Section 8.1) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the Company)
or litigation (including legal and other expenses), to which the Indemnified
Parties may become subject under any statute or regulation, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) or settlements:

(i) arise out of or are based upon any untrue
statement or alleged untrue statements of any
material fact contained in the registration
statement, prospectus (which shall include an
offering memorandum, if any), or SAI for the
Contracts or contained in the Contracts or sales
literature for the Contracts (or any amendment or
supplement to any of the foregoing), or arise out
of or are based upon the omission or the alleged
omission to state therein a material fact required
to be stated therein or necessary to make the
statements therein not misleading, provided that
this agreement to indemnify shall not apply as to
any Indemnified Party if such statement or
omission or such alleged statement or omission was
made in reliance upon and in conformity with
information furnished to the

- 15 -
<PAGE> 16
Company by or on behalf of the Fund for use in the
registration statement, prospectus or SAI for
the Contracts or in the Contracts or sales
literature (or any amendment or supplement) or
otherwise for use in connection with the sale
of the Contracts or Fund shares; or

(ii) arise out of or as a result of statements or
representations (other than statements or
representations contained in the registration
statement, prospectus, SAI, or sales literature of
the Fund not supplied by the Company or persons
under its control) or wrongful conduct of the
Company or its agents or persons under the
Company's authorization or control, with respect
to the sale or distribution of the Contracts or
Fund Shares; or

(iii) arise out of any untrue statement or alleged
untrue statement of a material fact contained in a
registration statement, prospectus, SAI, or sales
literature of the Fund or any amendment thereof or
supplement thereto or the omission or alleged
omission to state therein a material fact required
to be stated therein or necessary to make the
statements therein not misleading if such a
statement or omission was made in reliance upon
information furnished to the Fund by or on behalf
of the Company; or

(iv) arise as a result of any material failure by the
Company to provide the services and furnish the
materials under the terms of this Agreement
(including a failure, whether unintentional or in
good faith or otherwise, to comply with the
qualification requirements specified in Article VI
of this Agreement); or

(v) arise out of or result from any material breach of
any representation and/or warranty made by the
Company in this Agreement or arise out of or
result from any other material breach of this
Agreement by the Company,

as limited by and in accordance with the provisions of Sections 8.1(b) and
8.1(c) hereof.

- 16 -
<PAGE> 17
8.1(b). The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of its obligations or duties under this Agreement.

8.1(c). The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Company in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Company of any
such claim shall not relieve the Company from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against an Indemnified Party, the Company shall be entitled to participate, at
its own expense, in the defense of such action. The Company also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the Company to such party of the
Company's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and the
Company will not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in connection
with the defense thereof other than reasonable costs of investigation.

8.1(d). The Indemnified Parties will promptly notify the Company of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Fund shares or the Contracts or the operation of the
Fund.

8.2 Indemnification by the Underwriter

8.2(a). The Underwriter agrees to indemnify and hold harmless the Company
and each of it directors and officer and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.2) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Underwriter) or litigation (including legal and other
expenses) to which the Indemnified Parties may become subject under any statute
or regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) or settlements:

(i) arise out of or are based upon any untrue
statement or alleged untrue statement of any
material fact contained in the registration
statement or prospectus

- 17 -
<PAGE> 18
or SAI or sales literature of the Fund (or any
amendment or supplement to any of the
foregoing), or arise out of or are based upon
the omission or the alleged omission to state
therein a material fact required to be stated
therein or necessary to make the statements
therein not misleading, provided that this
agreement to indemnify shall not apply as to
any Indemnified Party if such statement or
omission or such alleged statement or omission
was made in reliance upon and in conformity
with information furnished to the Underwriter
or Fund by or on behalf of the Company for use
in the registration statement, prospectus or
SAI for the Fund or in sales literature (or any
amendment or supplement) or otherwise for use
in connection with the sale of the Contracts or
Fund shares; or

(ii) arise out of or as a result of statements or
representations (other than statements or
representations contained in the registration
statement, prospectus, SAI or sales literature for
the Contracts not supplied by the Underwriter or
persons under its control) or wrongful conduct of
the Fund or Underwriter or persons under their
control, with respect to the sale or distribution
of the Contracts or Fund shares; or

(iii) arise out of any untrue statement or alleged
untrue statement of a material fact contained in a
registration statement, prospectus, SAI or sales
literature covering the Contracts, or any
amendment thereof or supplement thereto, or the
omission or alleged omission to state therein a
material fact required to be stated therein or
necessary to make the statement or statements
therein not misleading, if such statement or
omission was made in reliance upon information
furnished to the Company by or on behalf of the
Fund or the Underwriter; or

(iv) arise as a result of any failure by the Fund
or the Underwriter to provide the services and
furnish the materials under the terms of this
Agreement (including a failure of the Fund,
whether unintentional or in good faith or
otherwise, to

- 18 -
<PAGE> 19

comply with the diversification and other
qualification requirements specified in Article VI
of this Agreement); or

(v) arise out of or result from any material breach of
any representation and/or warranty made by the
Underwriter in this Agreement or arise out of or
result from any other material breach of this
Agreement by the Underwriter;

as limited by and in accordance with the provisions of Sections 8.2(b) and
8.2(c) hereof.

8.2(b). The Underwriter shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Part's willful misfeasance, bad faith, or gross negligence in the
performance or such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
the Company or the Account, whichever is applicable.

8.2(c). The Underwriter shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Underwriter in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Underwriter of
any such claim shall not relieve the Underwriter from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is brought
against the Indemnified Party, the Underwriter will be entitled to participate,
at its own expense, in the defense thereof. The Underwriter also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the Underwriter to such party of the
Underwriter's election to assume the defense thereof, the Indemnified Party
shall bear the fees and expenses of any additional counsel retained by it, and
the Underwriter will not be liable to such party under this Agreement for any
legal or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.

8.3 Indemnification by the Fund

- 19 -
<PAGE> 20
8.3(a). The Fund agrees to indemnify and hold harmless the Company, and
each of its directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.3) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Fund) or litigation (including legal and other
expenses) to which the Indemnified Parties may become subject under any statute,
at common law or otherwise, insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) or settlements result from the gross
negligence, bad faith or willful misconduct of the Board or any member thereof,
are related to the operations of the Fund and:

(i) arise as a result of any failure by the Fund to
provide the services and furnish the materials
under the terms of this Agreement, or to comply
with the diversification requirements specified
in Article VI of this Agreement; or

(ii) arise out of or result from any material breach
of any representation and/or warranty made by
the Fund in this Agreement or arise out of or
result from any other material breach of this
Agreement by the Fund; as limited by and in
accordance with the provisions of Sections
8.3(b) and 8.3(c) hereof; or

(iii) arise out of or result from the provision by
the Underwriter or the Fund to the Company of
insufficient or incorrect information regarding
the net asset value per share of any Portfolio,
or the failure of the Distributor or Fund to
provide such information by 6:30 p.m. Eastern
Time.

8.3(b). The Fund shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation incurred
or assessed against an Indemnified Party as such may arise from such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in the performance
of such Indemnified Party's duties or by reason of such Indemnified Party's
reckless disregard of obligations and duties under this Agreement or to the
Company, the Fund, the Distributor, or each Account, whichever is applicable.

- 20 -
<PAGE> 21

served upon such Indemnified Party (or after such Indemnified Party shall have
received notice of such service on any designated agent), but failure to notify
the Fund of any such claim shall not relieve the Fund from any liability which
it may have to the Indemnified Party against whom such action is brought
otherwise than on account of this indemnification provision. In case any such
action is brought against the Indemnified Parties, the Fund will be entitled to
participate, at its own expense, in the defense thereof. The Fund also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the Fund to such party of the Fund's
election to assume the defense thereof, the Indemnified Party shall bear the
fees and expenses of any additional counsel retained by it, and the Fund will
not be liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.

ARTICLE IX. Applicable Law

9.1 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of New York.

9.2 This Agreement shall be subject to the provisions of the 1933, 1934
and 1940 Acts, and the rules and regulations and rulings thereunder, including
such exemptions from those statutes, rules and regulations as the SEC may grant
(including, but not limited to, any Mixed and Shared Funding Exemptive Order)
and the terms hereof shall be interpreted and construed in accordance therewith.
If, in the future, the Mixed and Shared Funding Exemptive Order should no longer
be necessary under applicable law, then Article VII shall no longer apply.

- 21 -
<PAGE> 22
ARTICLE X. Termination

10.1 This Agreement shall continue in full force and effect until the
first to occur of:

(a) termination by any party, for any reason with
respect to some or all Designated Portfolios, by 120
days advance written notice delivered to the other
parties; or

(b) termination by the Company by written notice to the
Fund and the Underwriter based upon the Company's
determination that shares of the Fund are not reasonably
available to meet the requirements of the Contracts; or

(c) termination by the Company by written notice to the
Fund and the Underwriter in the event any of the
Designated Portfolio's shares are not registered, issued
or sold in accordance with applicable state and/or
federal law or such law precludes the use of such shares
as the underlying investment media of the Contracts
issued or to be issued by the Company; or

(d) termination by the Fund or Underwriter in the event
that formal administrative proceedings are instituted
against the Company by the NASD, the SEC, the Insurance
Commissioner or like official of any state or any other
regulatory body regarding the Company's duties under
this Agreement or related to the sale of the Contracts,
the operation of any Account, or the purchase of the
Fund's shares; provided, however, that the Fund or
Underwriter determines in its sole judgment exercised in
good faith, that any such administrative proceedings
will have a material adverse effect upon the ability of
the Company to perform its obligations under this
Agreement; or

(e) termination by the Company in the event that formal
administrative proceedings are instituted against the
Fund or Underwriter by the NASD, the SEC, or any state
securities or insurance department or any other
regulatory body; provided, however, that the Company
determines in its sole judgment exercised in good faith,
that any such administrative proceedings will have a
material adverse effect upon the ability of the Fund or
Underwriter to perform its obligations under this
Agreement; or

- 22 -

<PAGE> 23
(f) termination by the Company by written notice to the
Fund and the Underwriter with respect to any Designated
Portfolio in the event that such Portfolio ceases to
qualify as a Regulated Investment Company under
Subchapter M or fails to comply with the Section 817(h)
diversification requirements specified in Article VI
hereof, or if the Company reasonably believes that such
Portfolio may fail to so qualify or comply; or

(g) termination by the Fund or Underwriter by written
notice to the Company in the event that the Contracts
fail to meet the qualifications specified in Article VI
hereof; or

(h) termination by either the Fund or the Underwriter
by written notice to the Company, if either one or both
of the Fund or the Underwriter respectively, shall
determine, in their sole judgment exercised in good
faith, that the Company has suffered a material adverse
change in its business, operations, financial condition,
or prospects since the date of this Agreement or is the
subject of material adverse publicity; or

(i) termination by the Company by written notice to the
Fund and the Underwriter, if the Company shall
determine, in its sole judgment exercised in good faith,
that the Fund, Adviser, or the Underwriter has suffered
a material adverse change in its business, operations,
financial condition or prospects since the date of this
Agreement or is the subject of material adverse
publicity; or

(j) termination by the Company upon any substitution of
the shares of another investment company or series
thereof for shares of a Designated Portfolio of the Fund
in accordance with the terms of the Contracts, provided
that the Company has given at least 45 days prior
written notice to the Fund and Underwriter of the date
of substitution; or

(k) termination by any party in the event that the
Fund's Board of Directors determines that a material
irreconcilable conflict exists as provided in Article
VII.

10.2 Notwithstanding any termination of this Agreement, the Fund and the
Underwriter shall, at the option of the Company, continue to make available
additional shares of the Fund pursuant to the terms and conditions of this
Agreement, for all

- 23 -
<PAGE> 24

Contracts in effect on the effective date of termination of this Agreement
(hereinafter referred to as "Existing Contracts"), unless the Underwriter elects
to compel a substitution of other securities for the shares of the Designated
Portfolios as may be required under Article VII. Specifically, the owners of the
Existing Contracts may be permitted to reallocate investments in the Fund,
redeem investments in the Fund and/or invest in the Fund upon the making of
additional purchase payments under the Existing Contracts (subject to any such
election by the Underwriter). The parties agree that this Section 10.2 shall not
apply to any terminations under Article VII and the effect of such Article VII
terminations shall be governed by Article VII of this Agreement. The parties
further agree that this Section 10.2 shall not apply to any terminations under
Section 10.1(f) or (g) of this Agreement.

10.3 The Company shall not redeem Fund shares attributable to the
Contracts (as opposed to Fund shares attributable to the Company's assets held
in the Account) except (i) as necessary to implement Contract owner initiated or
approved transactions, (ii) as required by state and/or federal laws or
regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption"), (iii) as permitted
by an order of the SEC pursuant to Section 26(b) of the 1940 Act, but only if a
substitution of other securities for the shares of the Designated Portfolios is
consistent with the terms of the Contracts, or (iv) as permitted under the terms
of the Contract. Upon request, the Company will promptly furnish to the Fund and
the Underwriter reasonable assurance that any redemption pursuant to clause (ii)
above is a Legally Required Redemption. Furthermore, except in cases where
permitted under the terms of the Contracts, the Company shall not prevent
Contract owners from allocating payments to a Portfolio that was otherwise
available under the Contracts without first giving the Fund or the Underwriter
45 days notice of its intention to do so.

10.4 Notwithstanding any termination of this Agreement, each party's
obligation under Article VIII to indemnify the other parties shall survive.

ARTICLE XI. Notices

Any notice shall be sufficiently given when sent by registered or
certified mail, postage prepaid, return receipt requested, or by nationally
recognized overnight courier, charges prepaid, with evidence of delivery, to the
other party at the address of such party set forth below or at such other
address as such party may from time to time specify in writing to the other
parties, and such notice shall be effective upon delivery.

- 24 -
<PAGE> 25
If to the Fund:

SoGen Variable Funds, Inc.
1221 Avenue of the Americas
New York, NY 10020
Attention: Jean-Marie Eveillard

If to the Company:

Indianapolis Life Insurance Company
2960 N. Meridian Street
Indianapolis, IN 46208
Attention: Janis Funk, Esq.

If to the Underwriter:

Societe Generale Securities Corporation
1221 Avenue of the Americas
New York, NY 10020

ARTICLE XII. Miscellaneous

12.1 All persons dealing with the Fund must look solely to the property
of the Fund, and in the case of a series company, the respective Designated
Portfolios listed on Schedule A hereto as though each such Designated Portfolio
had separately contracted with the Company and the Underwriter for the
enforcement of any claims against the Fund. The parties agree that neither the
Board, officers, agents or shareholders of the Fund assume any personal
liability or responsibility for obligations entered into by or on behalf of the
Fund.

12.2 Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and addresses
of the owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize such names and
addresses and other confidential information without the express written consent
of the affected party until such time as such information has come into the
public domain.

12.3 The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.

12.4 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.

- 25 -
<PAGE> 26
12.5 If any provision of this Agreement shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.

12.6 Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD, and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
Notwithstanding the generality of the foregoing, each party hereto further
agrees to furnish the New York and Indiana Insurance Commissioner with any
information or reports in connection with services provided under this Agreement
which such Commissioner may request in order to ascertain whether the variable
annuity operations of the Company are being conducted in a manner consistent
with the New York and Indiana variable annuity laws and regulations and any
other applicable law or regulations.

12.7 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies, and obligations,
at law or in equity, which the parties hereto are entitled to under state and
federal laws.

12.8 This Agreement or any of the rights and obligations hereunder may
not be assigned by any party without the prior written consent of all parties
hereto.

- 26 -
<PAGE> 27

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the date
specified below.

COMPANY: BANKERS LIFE INSURANCE COMPANY OF NEW
YORK

By its authorized officer

By:
-------------------------------------

Title:
----------------------------------

Date:
-----------------------------------

FUND: SOGEN VARIABLE FUNDS, INC.

By its authorized officer

By:
-------------------------------------

Title:
----------------------------------

Date:
-----------------------------------

UNDERWRITER: SOCIETE GENERALE SECURITIES CORPORATION

By its authorized officer

By:
-------------------------------------

Title:
----------------------------------

Date:
-----------------------------------

- 27 -
<PAGE> 28

SCHEDULE A

Segregated Asset Accounts of the Company

Bankers Life Insurance Company of New York Separate Account I

Contracts to be Issued by the Company

VCA - 97BL

Designated Portfolio Shares to be Purchased

SoGen Overseas Variable Portfolio

Other Funding Vehicles Available Under the Contracts

The Alger American Fund
Fidelity Variable Insurance Products Fund
Fidelity Variable Insurance Products Fund II
OCC Accumulation Trust
T. Rowe Price Fixed Income Series, Inc.
T. Rowe Price International Series, Inc.
Van Eck Worldwide Insurance Trust
Royce Capital Fund
SAFECO Resource Series Trust

- 28 -

<PAGE> 1
EXHIBIT 8(o)

[USA ADMINISTRATION SERVICES, INC. LOGO]

THIRD PARTY ADMINISTRATION AGREEMENT

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

* * *

THIS AGREEMENT ("Agreement") made as of this 25th day of November,
1997 by and between Bankers Life Insurance Company (Client), a New York
Corporation, and USA Administration Services, Inc. (USA), a Kansas Corporation.

WHEREAS, Client is or will be in the business of issuing and
underwriting life insurance and/or annuity products; and

WHEREAS, USA has developed an administration capability to provide for
the administrative support and servicing of life insurance and annuity
products, which includes administrative processes, administrative support
personnel, software, data processing equipment, and other services
("Administration Functions");

WHEREAS, Client desires to appoint USA as its Third Party
Administrator in connection with the specific life insurance and/or annuity
products identified in Schedule A ("Contract" or "Contracts"), and USA desires
to provide such services and necessary facilities, equipment, and personnel to
perform those Third Party Administrator functions set forth in Schedule B;

NOW, THEREFORE, in consideration of the mutually acceptable terms of
this Agreement, the parties agree as follows:

Article 1 Appointment as Agent to Provide Services.

1.01 Subject to the terms and conditions set forth in this
Agreement, Client hereby appoints and retains USA, and USA hereby agrees to act
as Client's agent to provide the services, functions and procedures described
in Schedule B (such services are described collectively hereinafter as
"Services").

1.02 Additional services may be added to this Agreement as Services
by a written amendment to Schedule B. USA, however, has sole discretion to
permit any such amendments to Schedule B. Client shall be responsible for any
additional costs resulting from implementing any requested amendments to
Schedule B. Such costs will be mutually agreed to, in writing, by the parties.

1
<PAGE> 2
Article 2 Services; and Performance Standards.

2.01 USA shall perform the Services provided for in Schedule B in
accordance with performance standards set forth in Schedule B or incorporated
by reference therein ("Performance Standards"). Whenever Client has not
established a standard, USA agrees to follow generally accepted customs and
standards accepted in the insurance industry performing such services.

2.02 If at any time USA's performance of Services is not in
compliance with the Performance Standards, USA shall use its best efforts to
take necessary curative actions to bring its performance into compliance within
thirty (30) days of Client giving USA written notice of USA's non-compliance.

2.03 When Client determines that either the Services or Performance
Standards needs modification in response to any Federal or state law or
regulation, it shall inform USA of the change in such law or regulation, and
the parties shall seek to come to a mutually agreeable modification of this
Agreement in response to same. Client shall be responsible for any increased
costs associated with such modification. Such costs will be mutually agreed
to, in writing, by the parties.

2.04 USA shall have the right, at any time, and from time to time,
to alter and modify the Administration Functions and any systems, programs,
procedures or facilities used or employed in performing its duties and
obligations hereunder, provided that no such alteration or modification that
materially adversely affects the Services Client receives under this Agreement
will be implemented without USA first obtaining Client's prior written consent,
which shall not be unreasonably withheld. "Materially" means, without
limitation, any departure or deviation from (a) the Performance Standards set
forth in Schedule B or the standards set forth in this Agreement or (b) any
applicable laws, rules and regulations.

2.05 If Client requests that USA design and implement an
enhancement to accommodate either one or more special features peculiar to
Client's Contracts, or, if Client requests any other changes, then USA shall
investigate the feasibility, time and cost for such enhancements or changes.
Any enhancement or change specific to Client's needs shall be designed and
implemented only after a written agreement to do so is reached between USA and
Client. Client will be responsible, in such cases, for any additional costs
associated with such an enhancement. Such costs will be mutually agreed to, in
writing, by the parties.

2.06 USA will make its standard operating reports available to
Client at no additional expense. If Client requests modification to USA's
standard reports, or requests other customized reports beyond the scope of the
standard reports, Client and USA must mutually agree on their format and
content. Client shall be responsible for any increased cost associated with
such modified or customized reports, if any. Such costs will be mutually
agreed to, in writing, by the parties.

2
<PAGE> 3
Article 3 Fees and Expenses.

3.01 In consideration of the Services to be performed by USA
pursuant to this Agreement, Client shall pay USA the fees and expenses
described on Schedule C. Such amount shall be due upon receipt of USA's
billing statement. The fees contained in the billing will be for past
services.

USA shall not be entitled to compensation or other payments except as expressly
set forth on Schedule C unless such compensation or payments are agreed to in
writing between USA and Client. All fees and expenses are payable in United
States Dollars, unless otherwise specified by USA.

3.02 Client shall also reimburse USA for all reasonable
out-of-pocket expenses incurred in its performance of this Agreement, as
described on Schedule C. Any such excpenses shall be subject to the prior
consent of the Client, and if over $2,000 prior written consent.

3.03 USA may impose a late payment charge of 1.5 percent per month,
or the highest rate permitted by law, whichever is lower, on balances due under
this Agreement but unpaid for over thirty (30) days. Client may, however
withhold amounts which are due under this Agreement and in good faith disputed,
and not have such amounts subject to USA's late payment charge, provided that:
(A) Client provides USA with written notice describing its dispute with USA
before the payment is due; (B) the parties use their best effort to resolve the
dispute within ninety (90) days after Client's notice; and (C) in the event the
dispute is not resolved within ninety (90) days, disputed amounts would be
respolved by arbitration.

3.04 Client shall pay or reimburse USA for all Federal, state and
local sales, excise, use and/or similar taxes based on payments to be made
hereunder, (excluding, however, any tax on USA's income) unless Client has
provided USA with evidence reasonably satisfactory to USA that such payments
are exempt from any such taxes.

3.05 On each anniversary date of this Agreement's effective date,
USA may increase the charges identified on Schedule C by a rate equal to the
percentage increase from the preceeding year in the United States Department of
Labor Consumer Price Index -- All Urban Consumers (1982-84 = 100).

Article 4 Allocation of Responsibilities Between Client and USA.

4.01 Notwithstanding any other provision of this Agreement, Client
retains sole legal responsibility and authority for the Services provided to
its Contract holders and agents. USA has no responsibility or liability under
the Contracts and, accordingly, may not modify or cause to be modified any term
or condition of the Contract or waive any term or condition thereof. The
Contracts are solely the liability of Client, are solely underwritten by
Client, and USA shall not provide or be responsible for any underwriting
services for the

3
<PAGE> 4
Contracts, the Contracts' sales and/or marketing, and/or the Contracts'
separate accounts, where applicable.

4.02 Client shall, on a timely basis, provide USA with current,
final forms of its contracts, prospectuses and applications, and the names and
states of license of all insurance and/or broker-dealer agents and
representatives authorized to sell the Contracts.

4.03 Client shall, on a timely basis, provide USA with information
it needs to carry out the Services it is to provide under this Agreement.

4.04 Client shall solely be responsible for interpreting the
language of the Contracts' provisions (including benefits), and determining the
rates, (premium, interest, etc.) product pricing, claims evaluation and payment
procedures applicable to the Contracts. Client must provide USA in a timely
fashion with its written rules, procedures and documentation pertaining to the
servicing of the Contracts.

Further, if Client modifies or amends such rules, procedures and documentation,
USA will not be obligated to implement any such modification or amendment until
mutually agreeable terms of a corresponding modification or amendment of the
Services have been reached between Client and USA.

4.05 USA shall use only such advertising pertaining to the
Contracts that has been approved in writing by Client in advance of its use.

4.06 USA will promptly notify Client in writing if it receives
written notice of any lawsuit, regulatory complaint or demand by any other
third party which may materially affect Client. In the event any Contract
holder notifies or complains to USA that his or her claim has been wrongfully
or improperly denied/handled or has any other complaint or problem regarding
his or her Contract, USA shall notify such Contract holderthat he or she has
the right to submit a request for review to Client of his or her complaint or
problem.

Article 5 Banking Arrangements.

5.01 The payment to USA of any premiums or charges for the
Contracts by or on behalf of a Contract holder shall be deemed to have been
received by Client, and the payment of return premiums or claim payments
forwarded by Client to USA shall not be deemed to have been paid to a Contract
holder or claimant until such payments are received by the Contract holder or
claimant.

5.02 Banking arrangements will be established upon the mutual
written agreement of Client and USA. In all cases, Client will be the sole
owner and solely responsible for establishing and maintaining such bank
account(s) which will be in Client's name. In the event that USA collects
premiums, or disburses funds on behalf of Client, such premiums or
disbursements will be completed by USA in a fiduciary capacity. USA shall
comply with all applicable Federal and State regulations. For all deposits, USA
will immediately (an in no event longer than twenty-four (24) hours) make such
deposits of

4
<PAGE> 5
premiums. Client shall require the bank in which Client's bank account(s) are
maintained to send all original account statements to Client, clearly reporting
all deposits and withdrawals.

USA shall receive copies of the account statements for reconciliation purposes,
and upon Client's request, promptly furnish Client with copies of all such bank
records pertaining the deposits and withdrawals it made to Client's bank
account(s) on behalf of Client. Reconciliation should be completed by USA
within a reasonable time from receipt of account statements from Client. Any
problems with such reconciliation should be promptly reported to Client and the
bank where the account is located.

Article 6 USA's Representations, Warranties and Covenants.

USA represents and warrants to Client that:

6.01 USA is a corporation duly organized and existing in good
standing under the laws of the State of Kansas.

6.02 USA has the power and authority under the laws of the State of
Kansas and under its charter and by-laws to enter into and perform the Services
contemplated in this Agreement.

6.03 All requisite corporate and other acts or proceedings required
to be taken to authorize the execution, delivery and performance of this
Agreement have been taken.

6.04 USA is a licensed Third Party Administrator in each state
where said license is required of USA for the Services performed under this
Agreement and USA shall maintain all licenses required by and comply with
applicable state laws, rules and regulations.

6.05 USA has and will continue to have and maintain the necessary
facilities to perform Services under this Agreement.

6.06 Whenever required by a state, USA shall maintain a deposit or
a bond in favor of such state to be held in trust for the benefit and
protection of that state's Contract holders and insurers whose monies USA
handles. In addition, USA shall comply with any other bond and insurance
requirements of applicable state law.

6.07 USA is covered under a fidelity/crime bond, with a limit of at
least $1 million. Such a bond, or its replacement, covers USA from damages
resulting from any acts or occurrences covered under said bond. USA is also
covered under a Professional Liability Policy, or its replacement, with a limit
of at least $1 million for damages resulting from any acts, errors or omissions
in the performance of professional services.

5
<PAGE> 6
Article 7 Client's Representations, Warranties and Covenants.

Client represents and warrants to USA that:

7.01 Client is a corporation duly organized and existing in good
standing under the laws of New York.

7.02 Client is qualified and licensed to carry on its business in
those jurisdictions in which it transacts business and is required to be
qualified or licensed.

7.03 Client has the power and authority under law and under its
charter and by-laws to enter into and perform its obligations under this
Agreement.

7.04 All requisite corporate and other acts or proceedings required
to be taken to authorize the execution, delivery and performance of this
Agreement have been taken.

7.05 All of the prospectuses, contracts and other forms provided or
required by Client shall have been approved by all required regulatory agencies
and are or shall be in compliance with all applicable Federal, state, and local
laws and regulations.

7.06 Client has and will continue to comply with all laws with
respect to the Contracts and it has and will continue to make all required
filings with regulatory agencies in connection with the offer, sale, or
administration of the Contracts.

7.07 Client shall fulfill all of its lawful obligations with
respect to the Contracts, regardless of any dispute between Client and USA.

Article 8 Confidentiality

8.01 Client acknowledges that USA has sole ownership or other
proprietary rights in and to the Administration Functions, and that the
Administration Functions constitute USA's confidential material and trade
secrets.

8.02 Except as is necessary for USA's administration of the
Contracts or as required by law, Client agrees to maintain the confidentiality
of, and not disclose to any third party (excluding independent auditors,
regulatory examiners and legal counsel), the Administration Functions, or any
other information about USA's internal affairs, business plans, and business
practices. Client further agrees not to use any such information regarding the
Administration Functions, or any information about USA's internal affairs,
business plans and business practices in competition with USA. If Client is
ordered by a court of competent jurisdiction to disclose Client or USA's
confidential information, or it is served with or otherwise becomes aware of a
motion or similar request (including, but not limited to depositions,
interrogatories, requests for documents, subpoenas, or civil investigative
demands) that such an order be issued, Client shall not be liable for
disclosure of such confidential information required by such order if Client
promptly notifies USA in writing of such order.

6
<PAGE> 7
This notification is to permit USA to seek a protective order or take other
appropriate action at USA's cost. Client will also cooperate in USA's efforts
to obtain a protective order or other reasonable assurance that confidential
treatment will be accorded USA's confidential information.

If, in the absence of a protective order, Client is, in the written opinion of
Client's counsel addressed to USA, compelled as a matter of law to disclose
USA's confidential information, Client may disclose to the party compelling
disclosure only the part of USA's confidential information as is required by
law to be disclosed (in which case, prior to such disclosure, Client will
advise and consult with USA and its counsel as to such disclosure and the
nature and wording of such disclosure) and Client will use its best efforts to
obtain confidential treatment therefor.

8.03 USA either owns the software or has licensed to use the
software which supports the Services it will provide under this Agreement. USA
shall be the owner and shall have the right to all copyrights, patents, and
other similar protection that flow from the work product that results from any
programming services USA performs for Client, including, but not limited to,
program code, documentation, specifications, logic, and design.

8.04 USA shall hold the software source code for the software
component of the Administration Functions in escrow with Transamerica
Reinsurance (TARe), assign TARe as escrow agent, and TARe shall make such
source code available to Client at no charge under a license agreement in the
event that USA files for bankruptcy or ceases to engage in the business of
providing Third Party Administration services.

Article 9 Books, Records, Data and Audits.

9.01 USA shall establish and maintain procedures for the
safekeeping of policy forms, check forms and facsimile signature imprinting
devices, if any, and all other documents, reports, records, books and files
related to the Contracts (excluding the Administration Functions), and all
transactions between USA, Client and Client's Contract holders and agents
(collectively, "Client's Books and Records"). USA shall maintain Client's
Books and Records in an accessible and usable form to Client, and place for the
duration of this Agreement and seven years thereafter, according to industry
standards reasonably applied and as required by applicable law, including but
not limited to Rules 17a-3 and 17a-4 of the Securities Exchange Act of 1934, as
amended.

9.02 USA shall maintain the records and other data pertaining to
the Contracts at all times in order to provide back-up recordkeeping. USA
shall maintain backup computer tape files on a daily basis stored in an
off-site location.

9.03 Upon reasonable notice to USA, Client and any applicable
insurance or securities regulator shall have full and free access, during
ordinary business hours, to Client's Books and Records, which shall be in a
usable form. Client and the applicable insurance or securities regulator shall
keep confidential USA's confidential information or

7
<PAGE> 8
trade secrets (as described in Article 8) contained in Client's Books and
Records.

9.04 Upon reasonable notice to USA, Client or its duly authorized
independent auditors have the right under this Agreement to perform on-site
audits of Client's Book and Records directly pertaining to the Contracts, and
the Services performed under this Agreement, and to interview management
personnel involved in performing the services of USA in this Agreement, and to
review systtems of internal control. Such audits shall take place in
accordance with reasonable procedures, as defined by generally accepted
auditing practices. Client shall reimburse USA for any unreasonable costs and
expenses (including personnel time and materials) incurred in connection with
such audits.

9.05 It is expressly understood and agreed that Client's Books and
Records are Client's sole property, and that such property shall be held by USA
as an agent, during the term of this Agreement. All information furnished by
Client or its Contract holders to USA hereunder (including Client's Books and
Records, data, information, financial information and information about its
internal affairs, business plans and business practices) is confidential (the
"Client Confidential Information") and USA shall not disclose such information,
directly or indirectly, to any third party except to the extent that USA is
required by law to make such disclosure, is required to perform the Services,
or as authorized in writing by Client. If USA is requested to disclose ant
Client confidential information, USA will promptly notify Client to permit
Client to seek a protective order or take other papropriate action at Client's
sole cost. USA will also coopoerate in Client's efforts to obtain a protective
order or other reasonable assurance that confidential treatment will be
accorded the Client confidential information. If, in the absence of a
protective order, USA is, in the written opinion of USA's counsel addr4essed to
Client, compelled as a matter of law to disclose the client confidential
information, USA may disclose to the party compelling disclosure only the aprt
of the Client confidential infoprmation as is required by law to be disclosed
(in which case, prior to such disclosure, USA will advise and consult with
Client and its counsel as to such disclosure and the nature and wording of such
disclosure) and USA will use its best efforts to obtain confidential treatment
thereof.

9.06 Each party shall promptly notify the other of any demand or
request by any court, Federal, state, local or provincial government agency or
other regulatory body to examine or audit the Contracts serviced under this
Agreement.

Article 10 Delivery of Materials to Covered Individuals.

10.01 Any policies, certificates, booklets, termination notices or
other written communications delivered by Client to USA for delivery to
Contract holders will be promptly delivered by USA after receipt by USA of
Client's delivery instructions.

Article 11 Trademarks.

11.01 Neither USA nor Client shall use trademarks or service marks
without the prior written consent of the owners.

8
<PAGE> 9
Article 12 Limitation of Liability/Warranty of Fitness.

12.01 In the event a malfunction of any computer software or
equipment which supports the Administration Functions causes an error or
mistake in any record, report, data, information or output under the terms of
this Agreement, USA shall at its expense correct and reprocess such records,
provided that either: (A) Client shall promptly notify USA in writing of such
error or mistake; or (B) the Contract holder shall promptly notify USA or
Client of such error or mistake. USA may, prior to its correction or
reprocessing, in its discretion, require Client's written instructions
regarding such error or mistake.

12.02 In the case of any breach by USA related to this Agreement or
any transaction under this Agreement, regardless of the basis of the claim, USA
will only be liable for:

A. Bodily injury (including death) and damage to real property
and tangible personal property; and

B. The amount of actual loss or damage suffered by Client,
limited to the aggregate of the fees Client paid to USA under
this Agreement during the eight months immediately preceding
the occurrence of the claim, whichever is less.

12.03 Notwithstanding anything to the contrary herein, USA shall not
be responsible for, and Client shall indemnify and hold USA harmless from and
against, any and all costs, expenses, losses, damages, charges, counsel fees,
payments, and liability which may be asserted against USA or for which it may
be held liable, arising out of or attributable to:

A. Any action taken by USA in good faith and with due diligence
in compliance with the terms of this Agreement;

B. Client's failure to:

(1)comply with Federal, state or local laws or regulations
with respect to the offering and/or sale of the Contracts or
the records maintained;

(2)use and employ the Administration Functions and its
facilities in accordance with the procedures as set forth and
described in the reference manuals;

(3)utilize USA's control procedures as set forth and described
in the reference manuals; or

(4)verify promptly reports received through use of the
Administration Functions.

C. Client's refusal or failure to comply with the terms of this
Agreement, or, which arise out of Client's action or willful
misconduct, or, which arise out of Client's breach of any
representation or warranty hereunder;

D. Client's errors and mistakes in the use of the Administration
Functions, and its facilities and control procedures;

E. Third party claims against Client for loss or damage; or

9
<PAGE> 10
F. USA's reliance on or use of information, data, records and
documents received from Client, its custodian or other agents
in performing the Services.

12.04 Notwithstanding anything to the contrary herein, Client shall
not be responsible for, and USA shall indemnify and hold Client harmless from
and against, any and all costs, expenses, losses, damages, charges, counsel
fees, payments, and liability which may be asserted against Client or for which
it may be held liable, arising out of or attributable to:

A. Any action taken by Client in good faith and with due
diligence in compliance with the term of this Agreement;

B. USA's refusal or failure to comply with the terms of this
Agreement, or, which arise out of USA's action or willful
misconduct, or, which arise out of USA's breach of any
representations or warranty hereunder;

C. USA's errors and mistakes in the use of the Administration
Functions, and its facilities and control procedures; or

D. Third party claims against USA for loss or damage.

12.05 In no event shall USA be liable to Client under any provision
of this Agreement for exemplary, special, punitive or consequential damages.

12.06 No action, regardless of its form, may be brought more than
three (3) years after the cause of action has accrued.

Article 13 Dispute Resolution.

13.01 Any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, shall be settled by Client and USA by means
of arbitration in accordance with the Commercial Arbitration Rules of the
American Arbitration Association, and judgment upon the award rendered by the
arbitrator(s) shall be final and binding upon the parties and may be entered
and enforced as a judgment in any court having jurisdiction thereof.
Notwithstanding the foregoing, Client agrees that the provisions of Article 8
or 13 herein may be enforced by temporary or permanent injunction, without the
necessity of a bond. Such injunctive relief shall be in addition to and not in
place of any other remedy provided in this Agreement.

Article 14 Term and Termination.

14.01 The effective date of this Agreement is the date first written
above, unless otherwise agreed to by the parties.

14.02 Subject to termination as provided herein, this Agreement
shall remain in force and effect for a period of four years from its effective
date.

10
<PAGE> 11
14.03 This Agreement is renewable at terms that will be negotiated
no later than one hundred eighty (180) days prior to the termination of this
Agreement, otherwise this Agreement will terminate pursuant to its terms.

14.04 This Agreement may be terminated by Client with written notice
to USA one hundred eighty (180) days prior to the desired termination date. In
the event of such notice of termination, the Agreement shall terminate no
earlier than the one hundred eightieth day following receipt of such notice.
Client may execute a standard perpetual License Agreement and pay USA a license
fee.

In consideration for early termination, if Client does not execute a standard
License Agreement, then Client agrees to pay USA the monthly fee of $2,000 for
the number of months remaining in the initial term of this Agreement.

14.05 If Client materially breaches this Agreement or fails to pay
fees and expenses hereunder, USA may give Client written notice of its breach
of this Agreement, and if such breach shall not have been remedied within sixty
(60) days after such written notice is given, USA may then terminate this
Agreement by giving Client thirty (30) days written notice of such intention to
terminate this Agreement.

14.06 If USA fails to comply with the material obligations and
Performance Standards contained in this Agreement, Client shall notify USA in
writing of such failure. "Material" means, without limitation, any departure
or deviation from (a) the Performance Standards set forth in Schedule B or the
standards set forth in this Agreement or (b) any applicable laws, rules and
regulations. If USA has not corrected such failure within a time frame set
reasonably by Client in writing, but in no event less than thirty (30) days,
Client may then immediately terminate this Agreement without prejudice to of
any of Client's rights or remedies against USA for breach of this Agreement.
Following such termination, Client may, at its option, enter into a license
agreement and pay USA a one time license fee, or transition, at Client's
expense, the administration of Client's Contracts to its own systems and
facilities or to another third party administrator.

14.07 During the period between the delivery of the notice of
termination and the effective date of termination, this Agreement shall remain
in effect and the parties shall continue to operate in accordance with the
terms of this Agreement except as the parties may otherwise agree in writing.

14.08 If USA elects to terminate this Agreement pursuant to section
14.05 and for other than the nonpayment of fees and expenses, and, if Client
shall so request in writing, USA shall continue to provide Services under this
Agreement to Client for a period of four (4) months following such termination,
with such Services to be provided in accordance with the terms of this
Agreement and at 133 percent of the fees in effect for the term immediately
preceding such four (4) month period.

14.09 In the event that this Agreement is terminated, USA agrees
that, in order to assist in providing uninterrupted Services to Client, it
shall offer Client reasonable assistance to Client in converting Client's
records from the Administration Functions to

11
<PAGE> 12
whatever service or system Client selects, subject to Client's payment to USA
for such assistance at USA's standard rates and fees in effect at that time.

14.10 Client shall provide written notice to any state or Federal
regulatory agency of any termination or cancellation or any other change in
this Agreement as required by any applicable law or regulation.

14.11 Upon termination of this Agreement, Client will return to USA
all documentation and information relating to the Administration Functions and
any other similar or related materials (and any copies thereof) confidential to
USA. Subject to Articles 8 and 9 hereof, USA will return Client's Books and
Records. Notwithstanding the above, any computer hardware, including storage
media, upon which Client's data is stored shall remain the sole property of
USA. Client agrees to allow USA reasonable access to all such returned records
in the event that USA requests such access for any reasonable and legitimate
purpose, including as a result of any regulatory request, litigation or any
similar necessity.

Article 15 Force Majeure.

15.01 If USA is unable to perform Services under this Agreement
because of strikes, equipment or transmission failure or damage, or other
causes beyond its control, e.g. floods, riots, or acts of god, then USA will
use its best efforts to assist Client to obtain alternate sources for the
Services. USA will not be liable for any interruption in the Services or
damages resulting from such causes, but USA shall cooperate with Client to
minimize and mitigate the damage, loss of data, delays or errors resulting from
an uncontrollable event.

Article 16 Non-Solicitation.

16.01 Neither USA nor its parent or affiliates shall use Client's
Books and Records or other of Client's proprietary information to contact
Client's Contract holders or any person with any interest or expectations in
the Contracts for the purpose of inducing them to purchase any non-Client
product. USA shall not sell or disclose in any manner (except to provide
Services under this Agreement) a list, partial or complete, of the applicants
for Contracts or Client's Contract holders or persons with any interest or
expectation in any Contract.

Article 17 Notices and Requests.

17.01 All notices and requests in connection with this Agreement
shall be given or made upon the respective parties in writing and shall be
deemed given as of the day deposited in the U.S. mails, postage pre-paid,
certified or registered, return receipt requested, and addressed as follows:

12
<PAGE> 13
<TABLE>
<S> <C>
If to USA: USA Administration Services, Inc.,
12900 Metcalf, #200, Overland Park, Kansas 66213
Attn: J. Peter Donlon

If to Client: Bankers Life Insurance Company
65 Froehlich Farm Blvd.
Woodbury, NY 11797
Attn: Steve Shorrock
</TABLE>

or to such other address(es) as the party to receive the notice or request so
designated by written notice to the other party.

Article 18 Insolvency.

18.01 It is expressly agreed by the parties that in the event either
USA or Client becomes insolvent or otherwise admits in writing its inability to
pay its debts when they become due, becomes bankrupt, seeks protection under
any law for the protection of insolvents, or has a receiver or conservator
appointed for it under any law pertaining to insolvency, that such event in and
of itself shall be deemed to be a material breach of this Agreement and that
the other party's obligation to perform or its right to receive the benefits of
this Agreement is terminated.

Article 19 Governing Laws.

19.01 This Agreement shall be governed by and construed in
accordance with the laws of the State of Kansas without regard to conflicts of
law principles.

Article 20 Enforceability.

20.01 If any provision of this Agreement shall be held to be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall in no way be affected or impaired thereby.

Article 21 No Waiver.

21.01 The failure of either party to exercise in any respect any
right provided for herein shall not be deemed to be a waiver of such right or
of any right hereunder.

Article 22 Assignments.

22.01 This Agreement and the rights and duties hereunder shall not be
assignable

13
<PAGE> 14
by the parties hereto except upon the written consent of the other party, which
shall not be unreasonably withheld.

22.02 This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and permitted assigns.

Article 23 Independent Contractor.

23.01 Client recognizes USA as an independent contractor. Nothing
contained herein shall be construed to create the relationship of employer and
employee between Client and USA.

23.02 USA is neither obliged nor expected to provide Services to
Client exclusively. Nothing contained herein shall prevent or restrict USA from
acting as a Third Party Administrator or providing any other service for other
insurance companies or others, whether or not affiliated with USA, in any
jurisdiction with respect to any insurance or annuity product, including
products which may be competitive to those of Client.

Article 24 Miscellaneous.

24.01 The headings in this Agreement are for purposes of reference
only and shall not affect in any way the meaning, construction or
interpretation of this Agreement.

24.02 This Agreement may be executed in several counterparts, each
of which is an original, but all of which together shall constitute one
instrument.

24.03 All of the Schedules which are referred to in this Agreement
shall be part of this Agreement.

24.04 This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the subject
matter thereof, whether oral or written and this Agreement may not be modified
except in a written instrument executed by both of the parties hereto.

24.05 Each party shall promptly deliver to the other a copy of any
preliminary or final examination or audit report with regard to the Contracts
serviced or Services provided under this Agreement which is issued by any
Federal, state, or local governmental agency within ten (10) days after it
receives it.

24.06 The rights and obligations of the parties set forth in
Articles 6, 8, 9, 13 and 14 herein, shall survive the termination of this
Agreement.

14
<PAGE> 15
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in their names and on their behalf by and through their duly
authorized officers.

USA ADMINISTRATION SERVICES, INC.

By
--------------------------------

Name J. Peter Donlon

Date
------------------------------

BANKERS LIFE INSURANCE COMPANY

By
--------------------------------

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

Date
------------------------------

15
<PAGE> 16
LISTING OF ATTACHED SCHEDULES:

<TABLE>
<CAPTION>
SCHEDULE ITEM
<S> <C>
A SPECIFIC CONTRACTS
B USA SERVICES AND FUNCTIONS
SMART GUIDE
C FEES
</TABLE>

16
<PAGE> 17
SCHEDULE A

USA ADMINISTRATION SERVICES, INC.

The plan(s) included in this Services Agreement is/are:

Bankers Life Visionary Choice variable annuity.

Note: Draft product specifications follows.

17
<PAGE> 18
SCHEDULE B

USA ADMINISTRATION SERVICES, INC.

SMART Guide of operating practices and performance standards are identical to
the completed SMART Guide with IL Annuity and Insurance Company .

18
<PAGE> 19
SCHEDULE C

USA ADMINISTRATION SERVICES, INC.

Set-up Fee: $83,000

(50% due upon contract signing and 50% upon set up completion, but no later
than May 1, 1998)

New Business Fee: $26
Monthly Maintenance: $3.15/contract
Monthly Minimum: $0 yr. 1, $1,000 yr.2, $3,000 thereafter
Asset Balancing, Pricing, &
Accounting Fee $1000/month

Notes:

- - Product set up fee includes three standard interfaces to client systems;
such as general ledger, valuation and tax reporting. Any additional
interfaces will be at an additional cost.

- - New business fee is a one-time fee per application to process the
application and establish the ongoing record. This fee is charged at the
time the application is placed under system control.

- - Monthly maintenance fee is an ongoing fee for the maintenance of policy
records.

- - Monthly minimum is incurred when new business and monthly maintenance fees
fall below threshold.

- - Asset balancing fee is established with the assumption that there are 20
sub-accounts available with this product.

The above fees include the cost of USA staff, software support, operating
expenses (except postage which will be billed as incurred) and computer
hardware. Items that are not included are special forms, printing costs,
special mailings, client hardware, communication costs, and reasonable travel
and living expenses incurred (and approved in writing in advance) by USA
personnel on Bankers Life's behalf.

<PAGE> 1
EXHIBIT 9

[LETTERHEAD OF BANKERS LIFE INSURANCE COMPANY OF NEW YORK]

December 17, 1998

Bankers Life Insurance Company of New York
65 Froehlich Farm Boulevard
Woodbury, New York 11797

Gentlemen and Ladies:

In my capacity as Counsel of Bankers Life Insurance Company of New
York (the "Company"), I am rendering the following opinion in connection with
the filing with the Securities and Exchange Commission of a Registration
Statement on Form N-4 under the Securities Act of 1933 and the Investment
Company Act of 1940. This Registration Statement is being filed with respect to
flexible variable annuity contracts (the "Contracts") issued by Bankers Life
Insurance Company of New York Separate Account 1 (the "Account").

In forming the following opinion, I have made such examination of
law and examined such records and other documents as in my judgment are
necessary and appropriate.

It is my opinion that:

1. The Account is a separate investment account of the Company
and is duly created and validly existing pursuant to the laws
of the State of New York.

2. The Contracts, when issued in accordance with the Prospectus
of the Account and in compliance with applicable local law,
are and will be legal and binding obligations of the Company
in accordance with their terms.

3. Assets attributable to reserves and other contract liabilities
and held in the Account will not be chargeable with
liabilities arising out of any other business the Company may
conduct.

I consent to the filing of this opinion as an exhibit to the
above-mentioned Registration Statement and to the inclusion of my name under the
caption "Legal Matters" in the Statement of Additional Information filed as part
of this Registration Statement on Form N-4.

Respectfully yours,

/s/ Janis B. Funk
----------------------------------
Janis B. Funk
Counsel

<PAGE> 1

EXHIBIT 10(a)

Sutherland Asbill & Brennan LLP
1275 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-2415

STEPHEN E. ROTH
DIRECT LINE: (202) 383-0158
Internet: [email protected]

December 17, 1998

Board of Directors
Bankers Life Insurance Company of New York
65 Froehlich Farm Boulevard
Woodbury, NY 11797

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
Pre-Effective Amendment No. 1 to the registration statement on Form N-4 for
Bankers Life Insurance Company of New York Separate Account 1 (File No.
333-49115). In giving this consent, we do not admit that we are in the category
of the persons whose consent is required under Section 7 of the Securities Act
of 1933.

Very truly yours,

SUTHERLAND ASBILL & BRENNAN LLP

By: /s/ Stephen B. Roth
-------------------
Stephen B. Roth

<PAGE> 1
Exhibit 10(b)

Consent of Ernst and Young LLP, Independent Auditors

We consent to the reference to our firm under the caption "Experts" and to the
use or our report dated April 30, 1998 of Bankers Life Insurance Company of New
York, in Pre-Effective Amendment No. 1 to the Registration Statement (Form N-4
No. 333-49115) and related Statement of Additional Information of Bankers Life
Insurance Company of New York Separate Account 1 dated December 18, 1998

Ernst & Young LLP

Indianapolis, Indiana
December 18, 1998

<PAGE> 1
EXHIBIT 13

BANKERS LIFE INSURANCE COMPANY OF NEW YORK
COMPUTATION OF ADJUSTED HISTORICAL STANDARD AVERAGE ANNUAL TOTAL RETURN

The formula used to calculate total return is :
<TABLE>
<S> <C>
T = ((ERV / P) /\(1/N)) - 1
where
T = Average Annual Total Return
ERV = Ending redeemable value of the initial investment (net of any
applicable Withdrawal Charge and contract fee) of the hypothetical
Variable Account at the end of the period shown
P = $1,000.00 initial investment
N = Number of years
</TABLE>

<TABLE>
<S> <C>
1. Alger American MidCap Growth
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 21.24% T = N/A
ERV = 1782 ERV =
P = 1000 P = 1000
N = 3.00 N = 5

b). For the period from 5/3/93 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 20.65% T = N/A
ERV = 2399.17 ERV =
P = 1000 P = 1000
N = 4.66 N = 10

2. Alger American Small Capitalization
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 17.04% T = 11.05%
ERV = 1603.1 ERV = 1689.133
P = 1000 P = 1000
N = 3.00 N = 5

b). For the period from 9/20/88 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 18.08% T = N/A
ERV = 4675.867 ERV =
P = 1000 P = 1000
N = 9.28 N = 10

3. Fidelity VIP Equity Income
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 22.28% T = 17.77%
ERV = 1828.533 ERV = 2265.7
P = 1000 P = 1000
N = 3.00 N = 5

b). For the period from 10/9/86 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 12.94% T = 14.96%
ERV = 3919.7 ERV = 4030.533
P = 1000 P = 1000
N = 11.23 N = 10

4. Fidelity VIP Growth Fund
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 21.77% T = 16.04%
ERV = 1805.633 ERV = 2103.9
P = 1000 P = 1000
N = 3.00 N = 5

b). For the period from 10/9/86 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 14.13% T = 15.76%
ERV = 4412.4 ERV = 4321.4
P = 1000 P = 1000
N = 11.23 N = 10

5. Fidelity VIP Money Market
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 1.92% T = 2.14%
ERV = 1058.6 ERV = 1111.433
P = 1000 P = 1000
N = 3.00 N = 5
</TABLE>
<PAGE> 2
<TABLE>
<S> <C>
b). For the period from 4/2/82 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 5.05% T = 3.84%
ERV = 2172.9 ERV = 1458.233
P = 1000 P = 1000
N = 15.75 N = 10

6. Fidelity VIP II Asset Manager
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 14.00% T = 10.47%
ERV = 1481.467 ERV = 1645.167
P = 1000 P = 1000
N = 3.00 N = 5

b). For the period from 9/6/89 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 11.04% T = N/A
ERV = 2388.633 ERV =
P = 1000 P = 1000
N = 8.32 N = 10

7. Fidelity VIP II Contrafund
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = N/A T = N/A
ERV = ERV =
P = 1000 P = 1000
N = 3 N = 5

b). For the period from 1/3/95 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 25.40% T = N/A
ERV = 1968.4 ERV =
P = 1000 P = 1000
N = 2.99 N = 10

8. Fidelity VIP II Index 500
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 27.68% T = 17.57%
ERV = 2081.667 ERV = 2246.233
P = 1000 P = 1000
N = 3 N = 5

b). For the period from 8/27/92 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 17.62% T = N/A
ERV = 2380.267 ERV =
P = 1000 P = 1000
N = 5.34 N = 10

9. Fidelity VIP II Investment Grade Bond
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 6.09% T = 3.13%
ERV = 1194.167 ERV = 1166.7
P = 1000 P = 1000
N = 3 N = 5

b). For the period from 12/5/88 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 4.08% T = N/A
ERV = 1436.833 ERV =
P = 1000 P = 1000
N = 9.07 N = 10

10. OCC Accumulation Managed
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 26.77% T = 17.58%
ERV = 2037.2 ERV = 2247.367
P = 1000 P = 1000
N = 3 N = 5

b). For the period from 8/31/88 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 18.91% T = N/A
ERV = 5036.9 ERV =
P = 1000 P = 1000
N = 9.33 N = 10
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
11. OCC Accumulation Small Cap
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 15.28% T = 12.10%
ERV = 1531.933 ERV = 1770.467
P = 1000 P = 1000
N = 3 N = 5

b). For the period from 8/31/88 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 13.97% T = N/A
ERV = 3388.633 ERV =
P = 1000 P = 1000
N = 9.33 N = 10

12. Royce Micro-Capital Fund
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = N/A T = N/A
ERV = ERV =
P = 1000 P = 1000
N = 3 N = 5

b). For the period from 12/27/96 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 12.53% T = N/A
ERV = 1126.68 ERV =
P = 1000 P = 1000
N = 1.01 N = 10

13. SAFECO Resources Equity
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 17.23% T = 17.15%
ERV = 1610.88 ERV = 2206.167
P = 1000 P = 1000
N = 3 N = 5

b). For the period from 11/6/86 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 13.73% T = 16.00%
ERV = 4197.733 ERV = 4411.467
P = 1000 P = 1000
N = 11.15 N = 10

14. SAFECO Resources Growth
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 35.88% T = 30.24%
ERV = 2508.667 ERV = 3747.033
P = 1000 P = 1000
N = 3 N = 5

b). For the period from 12/31/92 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 30.24% T = N/A
ERV = 3747.033 ERV =
P = 1000 P = 1000
N = 5.00 N = 10

15. SoGen Overseas
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = N/A T = N/A
ERV = ERV =
P = 1000 P = 1000
N = 3 N = 5

b). For the period from 2/3/97 to 12/31/97 d). For the 10 year period ending 12/31/97
T = -10.61% T = N/A
ERV = 903.3133 ERV =
P = 1000 P = 1000
N = 0.91 N = 10

16. T. Rowe Price Limited Term Bond
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 2.76% T = N/A
ERV = 1085.1 ERV =
P = 1000 P = 1000
N = 3 N = 5
</TABLE>
<PAGE> 4
<TABLE>
<S> <C>
b). For the period from 5/13/94 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 2.74% T = N/A
ERV = 1103.4 ERV =
P = 1000 P = 1000
N = 3.63 N = 10

17. T. Rowe Price International Stock
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 5.06% T = N/A
ERV = 1159.633 ERV =
P = 1000 P = 1000
N = 3 N = 5

b). For the period from 3/31/94 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 4.22% T = N/A
ERV = 1167.767 ERV =
P = 1000 P = 1000
N = 3.75 N = 10

18. Van Eck Worldwide Hard Assets
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 1.72% T = 10.44%
ERV = 1052.567 ERV = 1643.167
P = 1000 P = 1000
N = 3 N = 5

b). For the period from 8/31/89 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 4.07% T = N/A
ERV = 1394.333 ERV =
P = 1000 P = 1000
N = 8.33 N = 10

19. Van Eck Worldwide Balanced
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = N/A T = N/A
ERV = ERV =
P = 1000 P = 1000
N = 3 N = 5

b). For the period from 10/31/95 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 5.89% T = N/A
ERV = 1132.033 ERV =
P = 1000 P = 1000
N = 2.17 N = 10
</TABLE>
<PAGE> 5

BANKERS LIFE INSURANCE COMPANY OF NEW YORK
COMPUTATION OF ADJUSTED HISTORICAL NON-STANDARD AVERAGE ANNUAL TOTAL RETURN

The formula used to calculate total return is :
<TABLE>
<S> <C>
T = ((ERV / P) /\(1/N)) - 1
where
T = Average Annual Total Return
ERV = Ending redeemable value of the initial investment (prior to any
applicable Withdrawal Charge and contract fee) of the hypothetical
Variable Account at the end of the period shown
P = $1,000.00 initial investment
N = Number of years
</TABLE>

<TABLE>
<S> <C>
1. Alger American MidCap Growth
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 22.88% T = N/A
ERV = 1855.633 ERV =
P = 1000 P = 1000
N = 3.00 N = 5

b). For the period from 5/3/93 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 21.47% T = N/A
ERV = 2476.00 ERV =
P = 1000 P = 1000
N = 4.66 N = 10

2. Alger American Small Capitalization
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 18.80% T = 12.05%
ERV = 1676.5 ERV = 1766
P = 1000 P = 1000
N = 3.00 N = 5

b). For the period from 9/20/88 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 18.13% T = N/A
ERV = 4694.433 ERV =
P = 1000 P = 1000
N = 9.28 N = 10

3. Fidelity VIP Equity Income
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 23.91% T = 18.57%
ERV = 1902.533 ERV = 2343.733
P = 1000 P = 1000
N = 3.00 N = 5

b). For the period from 10/9/86 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 13.01% T = 15.02%
ERV = 3947.133 ERV = 4053.7
P = 1000 P = 1000
N = 11.23 N = 10

4. Fidelity VIP Growth Fund
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 23.41% T = 16.88%
ERV = 1879.467 ERV = 2181.633
P = 1000 P = 1000
N = 3.00 N = 5

b). For the period from 10/9/86 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 14.20% T = 15.82%
ERV = 4440.133 ERV = 4344.467
P = 1000 P = 1000
N = 11.23 N = 10

5. Fidelity VIP Money Market
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 4.21% T = 3.49%
ERV = 1131.767 ERV = 1186.933
P = 1000 P = 1000
N = 3.00 N = 5

</TABLE>

<PAGE> 6

<TABLE>
<S> <C>
b). For the period from 4/2/82 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 5.12% T = 3.93%
ERV = 2194.767 ERV = 1470.167
P = 1000 P = 1000
N = 15.75 N = 10

6. Fidelity VIP II Asset Manager
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 15.86% T = 11.48%
ERV = 1555.233 ERV = 1722
P = 1000 P = 1000
N = 3.00 N = 5

b). For the period from 9/6/89 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 11.23% T = N/A
ERV = 2422.267 ERV =
P = 1000 P = 1000
N = 8.32 N = 10

7. Fidelity VIP II Contrafund
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = N/A T = N/A
ERV = ERV =
P = 1000 P = 1000
N = 3 N = 5

b). For the period from 1/3/95 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 26.96% T = N/A
ERV = 2042.367 ERV =
P = 1000 P = 1000
N = 2.99 N = 10

8. Fidelity VIP II Index 500
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 29.19% T = 18.38%
ERV = 2155.967 ERV = 2324.867
P = 1000 P = 1000
N = 3 N = 5

b). For the period from 8/27/92 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 18.34% T = N/A
ERV = 2459.767 ERV =
P = 1000 P = 1000
N = 5.34 N = 10

9. Fidelity VIP II Investment Grade Bond
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 8.22% T = 4.44%
ERV = 1267.467 ERV = 1242.433
P = 1000 P = 1000
N = 3 N = 5

b). For the period from 12/5/88 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 4.17% T = N/A
ERV = 1448.133 ERV =
P = 1000 P = 1000
N = 9.07 N = 10

10. OCC Accumulation Managed
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 28.29% T = 18.39%
ERV = 2111.2 ERV = 2325.667
P = 1000 P = 1000
N = 3 N = 5

b). For the period from 8/31/88 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 18.97% T = N/A
ERV = 5060.367 ERV =
P = 1000 P = 1000
N = 9.33 N = 10
</TABLE>

<PAGE> 7
<TABLE>
<S> <C>
11. OCC Accumulation Small Cap
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 17.10% T = 13.06%
ERV = 1605.767 ERV = 1847.6
P = 1000 P = 1000
N = 3 N = 5

b). For the period from 8/31/88 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 14.04% T = N/A
ERV = 3407.6 ERV =
P = 1000 P = 1000
N = 9.33 N = 10

12. Royce Micro-Capital Fund
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = N/A T = N/A
ERV = ERV =
P = 1000 P = 1000
N = 3 N = 5

b). For the period from 12/27/96 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 19.55% T = N/A
ERV = 1197.767 ERV =
P = 1000 P = 1000
N = 1.01 N = 10

13. SAFECO Resources Equity
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 18.99% T = 17.96%
ERV = 1684.767 ERV = 2283.767
P = 1000 P = 1000
N = 3 N = 5

b). For the period from 11/6/86 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 13.80% T = 16.06%
ERV = 4224.4 ERV = 4433.933
P = 1000 P = 1000
N = 11.15 N = 10

14. SAFECO Resources Growth
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 37.22% T = 30.80%
ERV = 2583.567 ERV = 3827.933
P = 1000 P = 1000
N = 3 N = 5

b). For the period from 12/31/92 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 30.80% T = N/A
ERV = 3827.933 ERV =
P = 1000 P = 1000
N = 5.00 N = 10

15. SoGen Overseas
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = N/A T = N/A
ERV = ERV =
P = 1000 P = 1000
N = 3 N = 5

b). For the period from 2/3/97 to 12/31/97 d). For the 10 year period ending 12/31/97
T = -3.88% T = N/A
ERV = 964.7333 ERV =
P = 1000 P = 1000
N = 0.91 N = 10

16. T. Rowe Price Limited Term Bond
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 5.02% T = N/A
ERV = 1158.367 ERV =
P = 1000 P = 1000
N = 3 N = 5
</TABLE>
<PAGE> 8
<TABLE>
<S> <C>
b). For the period from 5/13/94 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 4.60% T = N/A
ERV = 1177.5 ERV =
P = 1000 P = 1000
N = 3.63 N = 10

17. T. Rowe Price International Stock
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 7.22% T = N/A
ERV = 1232.767 ERV =
P = 1000 P = 1000
N = 3 N = 5

b). For the period from 3/31/94 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 5.94% T = N/A
ERV = 1241.8 ERV =
P = 1000 P = 1000
N = 3.75 N = 10

18. Van Eck Worldwide Hard Assets
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 4.02% T = 11.44%
ERV = 1125.6 ERV = 1718.567
P = 1000 P = 1000
N = 3 N = 5

b). For the period from 8/31/89 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 4.34% T = N/A
ERV = 1425.1 ERV =
P = 1000 P = 1000
N = 8.33 N = 10

19. Van Eck Worldwide Balanced
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = N/A T = N/A
ERV = ERV =
P = 1000 P = 1000
N = 3 N = 5

b). For the period from 10/31/95 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 8.97% T = N/A
ERV = 1204.5 ERV =
P = 1000 P = 1000
N = 2.17 N = 10

</TABLE>
<PAGE> 9
BANKERS LIFE INSURANCE COMPANY OF NEW YORK
COMPUTATION OF ADJUSTED HISTORICAL STANDARD CUMULATIVE TOTAL RETURN

The formula used to calculate total return is :
<TABLE>
<S> <C>
CTR = (ERV / P) -1
where
CTR = Cumulative total return
ERV = Ending redeemable value of the initial investment (net of any
applicable Withdrawal Charge and contract fee) of the hypothetical
Variable Account at the end of the period shown
P = $1,000.00 initial investment
</TABLE>

<TABLE>
<S> <C>
1. Alger American MidCap Growth
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 78.20% T = N/A
ERV = 1782 ERV =
P = 1000 P = 1000

b). For the period from 5/3/93 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 139.92% T = N/A
ERV = 2399.17 ERV =
P = 1000 P = 1000

2. Alger American Small Capitalization
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 60.31% T = 68.91%
ERV = 1603.1 ERV = 1689.133
P = 1000 P = 1000

b). For the period from 9/20/88 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 367.59% T = N/A
ERV = 4675.867 ERV =
P = 1000 P = 1000

3. Fidelity VIP Equity Income
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 82.85% T = 126.57%
ERV = 1828.533 ERV = 2265.7
P = 1000 P = 1000

b). For the period from 10/9/86 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 291.97% T = 303.05%
ERV = 3919.7 ERV = 4030.533
P = 1000 P = 1000

4. Fidelity VIP Growth Fund
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 80.56% T = 110.39%
ERV = 1805.633 ERV = 2103.9
P = 1000 P = 1000

b). For the period from 10/9/86 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 341.24% T = 332.14%
ERV = 4412.4 ERV = 4321.4
P = 1000 P = 1000

5. Fidelity VIP Money Market
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 5.86% T = 11.14%
ERV = 1058.6 ERV = 1111.433
P = 1000 P = 1000

b). For the period from 4/2/82 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 117.29% T = 45.82%
ERV = 2172.9 ERV = 1458.233
P = 1000 P = 1000
</TABLE>
<PAGE> 10

<TABLE>
<S> <C>
6. Fidelity VIP II Asset Manager
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 48.15% T = 64.52%
ERV = 1481.467 ERV = 1645.167
P = 1000 P = 1000

b). For the period from 9/6/89 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 138.86% T = N/A
ERV = 2388.633 ERV =
P = 1000 P = 1000

7. Fidelity VIP II Contrafund
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = N/A T = N/A
ERV = ERV =
P = 1000 P = 1000

b). For the period from 1/3/95 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 96.84% T = N/A
ERV = 1968.4 ERV =
P = 1000 P = 1000

8. Fidelity VIP II Index 500
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 108.17% T = 124.62%
ERV = 2081.667 ERV = 2246.233
P = 1000 P = 1000

b). For the period from 8/27/92 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 138.03% T = N/A
ERV = 2380.267 ERV =
P = 1000 P = 1000

9. Fidelity VIP II Investment Grade Bond
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 19.42% T = 16.67%
ERV = 1194.167 ERV = 1166.7
P = 1000 P = 1000

b). For the period from 12/5/88 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 43.68% T = N/A
ERV = 1436.833 ERV =
P = 1000 P = 1000

10. OCC Accumulation Managed
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 103.72% T = 124.74%
ERV = 2037.2 ERV = 2247.367
P = 1000 P = 1000

b). For the period from 8/31/88 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 403.69% T = N/A
ERV = 5036.9 ERV =
P = 1000 P = 1000

11. OCC Accumulation Small Cap
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 53.19% T = 77.05%
ERV = 1531.933 ERV = 1770.467
P = 1000 P = 1000

b). For the period from 8/31/88 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 238.86% T = N/A
ERV = 3388.633 ERV =
P = 1000 P = 1000

12. Royce Micro-Capital Fund
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = N/A T = N/A
ERV = ERV =
P = 1000 P = 1000
</TABLE>
<PAGE> 11

<TABLE>
<S> <C>
b). For the period from 12/27/96 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 12.67% T = N/A
ERV = 1126.68 ERV =
P = 1000 P = 1000

13. SAFECO Resources Equity
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 61.09% T = 120.62%
ERV = 1610.88 ERV = 2206.167
P = 1000 P = 1000

b). For the period from 11/6/86 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 319.77% T = 341.15%
ERV = 4197.733 ERV = 4411.467
P = 1000 P = 1000

14. SAFECO Resources Growth
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 150.87% T = 274.70%
ERV = 2508.667 ERV = 3747.033
P = 1000 P = 1000

b). For the period from 12/31/92 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 274.70% T = N/A
ERV = 3747.033 ERV =
P = 1000 P = 1000

15. SoGen Overseas
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = N/A T = N/A
ERV = ERV =
P = 1000 P = 1000

b). For the period from 2/3/97 to 12/31/97 d). For the 10 year period ending 12/31/97
T = -9.67% T = N/A
ERV = 903.3133 ERV =
P = 1000 P = 1000

16. T. Rowe Price Limited Term Bond
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 8.51% T = N/A
ERV = 1085.1 ERV =
P = 1000 P = 1000

b). For the period from 5/13/94 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 10.34% T = N/A
ERV = 1103.4 ERV =
P = 1000 P = 1000

17. T. Rowe Price International Stock
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 15.96% T = N/A
ERV = 1159.633 ERV =
P = 1000 P = 1000

b). For the period from 3/31/94 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 16.78% T = N/A
ERV = 1167.767 ERV =
P = 1000 P = 1000

18. Van Eck Worldwide Hard Assets
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 5.26% T = 64.32%
ERV = 1052.567 ERV = 1643.167
P = 1000 P = 1000

b). For the period from 8/31/89 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 39.43% T = N/A
ERV = 1394.333 ERV =
P = 1000 P = 1000
</TABLE>
<PAGE> 12

<TABLE>
<S> <C>
19. Van Eck Worldwide Balanced
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = N/A T = N/A
ERV = ERV =
P = 1000 P = 1000

b). For the period from 10/31/95 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 13.20% T = N/A
ERV = 1132.033 ERV =
P = 1000 P = 1000
</TABLE>
<PAGE> 13
BANKERS LIFE INSURANCE COMPANY OF NEW YORK
COMPUTATION OF ADJUSTED HISTORICAL NON-STANDARD CUMULATIVE TOTAL RETURN

The formula used to calculate total return is:
<TABLE>
<S> <C>
CTR = (ERV / P) -1
where
CTR = Cumulative total return
ERV = Ending redeemable value of the initial investment (prior to any
applicable Withdrawal Charge and contract fee) of the hypothetical
Variable Account at the end of the period shown
P = $1,000.00 initial investment
</TABLE>

<TABLE>
<S> <C>
1. Alger American MidCap Growth
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 85.56% T = N/A
ERV = 1855.633 ERV =
P = 1000 P = 1000

b). For the period from 5/3/93 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 147.60% T = N/A
ERV = 2476.00 ERV =
P = 1000 P = 1000

2. Alger American Small Capitalization
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 67.65% T = 76.60%
ERV = 1676.5 ERV = 1766
P = 1000 P = 1000

b). For the period from 9/20/88 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 369.44% T = N/A
ERV = 4694.433 ERV =
P = 1000 P = 1000

3. Fidelity VIP Equity Income
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 90.25% T = 134.37%
ERV = 1902.533 ERV = 2343.733
P = 1000 P = 1000

b). For the period from 10/9/86 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 294.71% T = 305.37%
ERV = 3947.133 ERV = 4053.7
P = 1000 P = 1000

4. Fidelity VIP Growth Fund
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 87.95% T = 118.16%
ERV = 1879.467 ERV = 2181.633
P = 1000 P = 1000

b). For the period from 10/9/86 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 344.01% T = 334.45%
ERV = 4440.133 ERV = 4344.467
P = 1000 P = 1000

5. Fidelity VIP Money Market
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 13.18% T = 18.69%
ERV = 1131.767 ERV = 1186.933
P = 1000 P = 1000

b). For the period from 4/2/82 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 119.48% T = 47.02%
ERV = 2194.767 ERV = 1470.167
P = 1000 P = 1000
</TABLE>
<PAGE> 14

<TABLE>
<S> <C>
6. Fidelity VIP II Asset Manager
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 55.52% T = 72.20%
ERV = 1555.233 ERV = 1722
P = 1000 P = 1000

b). For the period from 9/6/89 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 142.23% T = N/A
ERV = 2422.267 ERV =
P = 1000 P = 1000

7. Fidelity VIP II Contrafund
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = N/A T = N/A
ERV = ERV =
P = 1000 P = 1000

b). For the period from 1/3/95 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 104.24% T = N/A
ERV = 2042.367 ERV =
P = 1000 P = 1000

8. Fidelity VIP II Index 500
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 115.60% T = 132.49%
ERV = 2155.967 ERV = 2324.867
P = 1000 P = 1000

b). For the period from 8/27/92 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 145.98% T = N/A
ERV = 2459.767 ERV =
P = 1000 P = 1000

9. Fidelity VIP II Investment Grade Bond
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 26.75% T = 24.24%
ERV = 1267.467 ERV = 1242.433
P = 1000 P = 1000

b). For the period from 12/5/88 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 44.81% T = N/A
ERV = 1448.133 ERV =
P = 1000 P = 1000

10. OCC Accumulation Managed
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 111.12% T = 132.57%
ERV = 2111.2 ERV = 2325.667
P = 1000 P = 1000

b). For the period from 8/31/88 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 406.04% T = N/A
ERV = 5060.367 ERV =
P = 1000 P = 1000

11. OCC Accumulation Small Cap
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 60.58% T = 84.76%
ERV = 1605.767 ERV = 1847.6
P = 1000 P = 1000

b). For the period from 8/31/88 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 240.76% T = N/A
ERV = 3407.6 ERV =
P = 1000 P = 1000

12. Royce Micro-Capital Fund
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = N/A T = N/A
ERV = ERV =
P = 1000 P = 1000
</TABLE>
<PAGE> 15

<TABLE>
<S> <C>
b). For the period from 12/27/96 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 19.78% T = N/A
ERV = 1197.767 ERV =
P = 1000 P = 1000

13. SAFECO Resources Equity
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 68.48% T = 128.38%
ERV = 1684.767 ERV = 2283.767
P = 1000 P = 1000

b). For the period from 11/6/86 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 322.44% T = 343.39%
ERV = 4224.4 ERV = 4433.933
P = 1000 P = 1000

14. SAFECO Resources Growth
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 158.36% T = 282.79%
ERV = 2583.567 ERV = 3827.933
P = 1000 P = 1000

b). For the period from 12/31/92 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 282.79% T = N/A
ERV = 3827.933 ERV =
P = 1000 P = 1000

15. SoGen Overseas
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = N/A T = N/A
ERV = ERV =
P = 1000 P = 1000

b). For the period from 2/3/97 to 12/31/97 d). For the 10 year period ending 12/31/97
T = -3.53% T = N/A
ERV = 964.7333 ERV =
P = 1000 P = 1000

16. T. Rowe Price Limited Term Bond
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 15.84% T = N/A
ERV = 1158.367 ERV =
P = 1000 P = 1000

b). For the period from 5/13/94 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 17.75% T = N/A
ERV = 1177.5 ERV =
P = 1000 P = 1000

17. T. Rowe Price International Stock
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 23.28% T = N/A
ERV = 1232.767 ERV =
P = 1000 P = 1000

b). For the period from 3/31/94 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 24.18% T = N/A
ERV = 1241.8 ERV =
P = 1000 P = 1000

18. Van Eck Worldwide Hard Assets
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = 12.56% T = 71.86%
ERV = 1125.6 ERV = 1718.567
P = 1000 P = 1000

b). For the period from 8/31/89 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 42.51% T = N/A
ERV = 1425.1 ERV =
P = 1000 P = 1000
</TABLE>
<PAGE> 16

<TABLE>
<S> <C>
19. Van Eck Worldwide Balanced
a). For the 3 year period ending 12/31/97 c). For the 5 year period ending 12/31/97
T = N/A T = N/A
ERV = ERV =
P = 1000 P = 1000

b). For the period from 10/31/95 to 12/31/97 d). For the 10 year period ending 12/31/97
T = 20.45% T = N/A
ERV = 1204.5 ERV =
P = 1000 P = 1000
</TABLE>

<PAGE> 1
EXHIBIT 15

POWER OF ATTORNEY

The undersigned director of Bankers Life Insurance Company of New
York, a New York corporation, hereby constitutes and appoints Janis B. Funk, as
my true and lawful attorney, with full power to her to sign for me and in my
name and in the capacities indicated below, the Registration Statements filed
with the Securities and Exchange Commission for the purpose of registering
Bankers Life Insurance Company of New York Separate Account I, established by
Bankers Life Insurance Company of New York on September 20, 1995 as a unit
investment trust under the Investment Company Act of 1940 and the variable
annuity contracts issued by said separate account under the Securities Act of
1933, and any and all amendments thereto, hereby ratifying and confirming my
signature as it may be signed by my said attorney to said Registration
Statements and any and all amendments thereto.

Witness my hand on the date set forth below.

/s/ Larry R. Prible
-----------------------------------
Larry R. Prible
Chairman of the Board and Director

April 9, 1998

<PAGE> 2

POWER OF ATTORNEY

Witness my hand on the date set forth below.

/s/ Stephen J. Shorrock
-----------------------------------------------
Stephen J. Shorrock
President, Chief Executive Officer and Director

April 9, 1998

<PAGE> 3

POWER OF ATTORNEY

The undersigned officer of Bankers Life Insurance Company of New
York, a New York corporation, hereby constitutes and appoints Janis B. Funk, as
my true and lawful attorney, with full power to sign for me and in my name and
in the capacities indicated below, the Registration Statements filed with the
Securities and Exchange Commission for the purpose of registering Bankers Life
Insurance Company of New York Separate Account I, established by Bankers Life
Insurance Company of New York on September 20, 1995 as a unit investment trust
under the Investment Company Act of 1940 and the variable annuity contracts
issued by said separate account under the Securities Act of 1933, and any and
all amendments thereto, hereby ratifying and confirming my signature as it may
be signed by my said attorney to said Registration Statements and any and all
amendments thereto.

Witness my hand on the date set forth below.

/s/ Lisa Foxworthy-Parker
------------------------------------
Lisa Foxworthy-Parker
Secretary

September 21, 1998

<PAGE> 4

POWER OF ATTORNEY

Witness my hand on the date set forth below.

/s/ Eugene M. Busche
------------------------------------
Eugene M. Busche
Director

April 9, 1998

<PAGE> 5

POWER OF ATTORNEY

Witness my hand on the date set forth below.

/s/ Gregory J. Carney
------------------------------------
Gregory J. Carney
Director

April 9, 1998

<PAGE> 6

POWER OF ATTORNEY

Witness my hand on the date set forth below.

/s/ John J. Fahrenbach
------------------------------------
John J. Fahrenbach
Director

April 9, 1998

<PAGE> 7

POWER OF ATTORNEY

Witness my hand on the date set forth below.

/s/ Andrew Jackson Paine, Jr.
------------------------------------
Andrew Jackson Paine, Jr.
Director

April 9, 1998

<PAGE> 8

POWER OF ATTORNEY

Witness my hand on the date set forth below.

/s/ Garrett P. Ryan
------------------------------------
Garrett P. Ryan
Director

April 9, 1998

<PAGE> 9

POWER OF ATTORNEY

Witness my hand on the date set forth below.

/s/ Dr. Gene E. Sease
------------------------------------
Dr. Gene E. Sease
Director

April 9, 1998

<PAGE> 10

POWER OF ATTORNEY

Witness my hand on the date set forth below.

/s/ Richard Allen Steele
------------------------------------
Richard Allen Steele
Director

April 9, 1998

<PAGE> 11

POWER OF ATTORNEY

Witness my hand on the date set forth below.

/s/ George A. Thiel
------------------------------------
George A. Thiel
Director

May 14, 1998

<PAGE> 12

POWER OF ATTORNEY

Witness my hand on the date set forth below.

/s/ William A. Walsh
------------------------------------
William A. Walsh
Director

April 9, 1998

<PAGE> 13

POWER OF ATTORNEY

Witness my hand on the date set forth below.

/s/ Kenneth A. Roman
------------------------------------
Kenneth A. Roman
Controller and Treasurer

September 18, 1998