PRUDENTIAL INDIVIDUAL VARIABLE CONTRACT ACCOUNT, 485BPOS, 1995-04-28

PRUDENTIAL INDIVIDUAL VARIABLE CONTRACT ACCOUNT
485BPOS, 1995-04-28

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As filed with the SEC on________. Registration No. 33-25434

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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

FORM N-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]

Post-Effective Amendment No. 10 [X]

and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]

Amendment No. 26 [X]

(Check appropriate box or boxes)

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

THE PRUDENTIAL INDIVIDUAL VARIABLE
CONTRACT ACCOUNT
(Exact Name of Registrant)

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
(Name of Depositor)

Prudential Plaza
Newark, New Jersey 07102-3777
(800) 445-4571
(Address and telephone number of principal executive offices)

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

Thomas C. Castano
Assistant Secretary

The Prudential Insurance Company of America
Prudential Plaza
Newark, New Jersey 07102-3777
(Name and address of agent for service)

Copy to:

Jeffrey C. Martin
Shea & Gardner
1800 Massachusetts Avenue, N.W.
Washington, D.C. 20036

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

Individual Variable Annuity Contracts--The Registrant has registered an
indefinite amount of securities pursuant to Rule 24f-2 under the Investment
Company Act of 1940. The Rule 24f-2 notice for fiscal year 1994 was filed on
February 27, 1995.

It is proposed that this filing will become effective (check appropriate
space):

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

[X] on May 1, 1995 pursuant to paragraph (b) of Rule 485
--------------
(date)

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

[ ] on_____________ pursuant to paragraph (a) of Rule 485
(date)

<PAGE>

CROSS REFERENCE SHEET
(as required by Rule 495(a) under the 1933 Act)

N-4 Item Number and Caption Location
- --------------------------- --------

Part A

1. Cover Page.................................. Cover Page

2. Definitions ................................ Definitions of Special Terms
Used in This Prospectus

3. Synopsis or Highlights ..................... Brief Description of the
Contract

4. Condensed Financial Information ............ Accumulation Unit Values

5. General Description of Registrant,
Depositor, and Portfolio Companies.......... General Information About The
Prudential, The Prudential
Individual Variable Contract
Account, and The Variable
Investment Options Available
Under the Contract; The Fixed-
Rate Option

6. Deductions and Expenses .................. Brief Description of the
Contract; Charges, Fees, and
Deductions

7. General Description of Variable Annuity
Contracts .................................. Part A: Brief Description of
the Contract; Allocation of
Purchase Payments; Transfers;
Death Benefit; The Fixed-Rate
Option; Voting Rights;
Ownership of the Contract;
State Regulation
Part B: Participation in
Divisible Surplus

8. Annuity Period ............................. Brief Description of the
Contract; Sales Charges on
Withdrawals; Effecting an
Annuity

9. Death Benefit .............................. Death Benefit; Effecting an
Annuity

10. Purchases and Contract Value................ Brief Description of the
Contract; The Prudential
Insurance Company of America;
Requirements for Issuance of a
Contract; Valuation of a
Contract Owner's Contract Fund

11. Redemptions ................................ Brief Description of the
Contract; Short-Term
Cancellation Right or "Free
Look"; Withdrawals; Charges,
Fees, and Deductions; Effecting
an Annuity

12. Taxes ...................................... Premium Taxes; Federal Tax
Status

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

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

Part B

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

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

17. General Information and History ............ Not Applicable

<PAGE>

N-4 Item Number and Caption Location
- --------------------------- --------

18. Services ................................... Experts

19. Purchase of Securities Being Offered........ Part A: Brief Description of
the Contract; Charges, Fees,
and Deductions; Sale of the
Contract and Sales Commissions

20. Underwriters ............................... Part A: Sale of the Contract
and Sales Commissions
Part B: Principal Underwriters

21. Calculation of Performance Data ............ Financial Statements of The
Prudential Individual Variable
Contract Account

22. Annuity Payments ........................... Part A: Valuation of a Contract
Owner's Contract Fund;
Effecting an Annuity

23. Financial Statements ....................... Financial Statements of The
Prudential Individual Variable
Contract Account; Consolidated
Financial Statements of The
Prudential Insurance Company of
America and Subsidiaries
Part C

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

<PAGE>

PART A

INFORMATION REQUIRED IN A PROSPECTUS

<PAGE>

PROSPECTUS

May 1, 1995

THE PRUDENTIAL
INDIVIDUAL VARIABLE CONTRACT ACCOUNT
VARIABLE ANNUITY CONTRACTS

This prospectus describes the Discovery(SM) Plus Contract* (the "Contract"), an
individual variable annuity contract issued by The Prudential Insurance Company
of America ("The Prudential").

The Contract is purchased by making a single payment of $10,000 or more.
Subsequent payments of $1,000 or more ($10,000 or more in New York) are also
accepted. The purchase payments will be allocated as the Contract owner directs
in one or more of the following ways. They may be allocated to one or more of
the subaccounts of The Prudential Individual Variable Contract Account (the
"Account"), to a fixed-rate option or to a real estate option funded by another
separate account of The Prudential.

The assets of each subaccount of the Account will be invested in a corresponding
portfolio of The Prudential Series Fund, Inc. (the "Series Fund"). The attached
prospectus for the Series Fund and its statement of additional information
describe the investment objectives of and risks of investing in the thirteen
currently available portfolios of the Series Fund: the Money Market Portfolio,
the Bond Portfolio, the Government Securities Portfolio, the Conservatively
Managed Flexible Portfolio, the Aggressively Managed Flexible Portfolio, the
High Yield Bond Portfolio, the Stock Index Portfolio, the High Dividend Stock
Portfolio, the Common Stock Portfolio, the Growth Stock Portfolio, the Small
Capitalization Stock Portfolio, the Global Equity Portfolio, and the Natural
Resources Portfolio. Other subaccounts and portfolios may be added in the
future. Any portion of a purchase payment allocated to the fixed-rate option is
credited with interest daily at a rate periodically declared by The Prudential
in its sole discretion, but not less than 3.1%. If the real estate investment
option is selected, the requested portion of a purchase payment will be
allocated to The Prudential Variable Contract Real Property Account (the "Real
Property Account"), a separate account of The Prudential which, through a
partnership, invests primarily in income-producing real property. The Real
Property Account is described in a prospectus that is attached to this one. This
prospectus describes the Contract generally and The Prudential Individual
Variable Contract Account.

On the annuity date, the amount credited under the Contract will be applied to
effect a fixed-dollar annuity at rates no less favorable than those set forth in
the Contract and guaranteed by The Prudential. With the consent of The
Prudential, the annuity date can be changed. Upon annuitization, the Contract
owner's participation in the investment options ceases. Prior to that annuity
date, the Contract owner may withdraw in whole or in part the cash surrender
value of the Contract. Federal tax law, however, imposes restrictions on
withdrawals from Section 403(b) annuities. The value allocated to the
subaccounts and the Real Property Account will vary with the investment
performance of those accounts, and the value allocated to the fixed-rate option
will increase as interest is credited. Withdrawals may be subject to tax and to
a contingent deferred sales charge and, in certain circumstances, a tax penalty
equal to 10% of that portion of the amount withdrawn which is includible in
income.

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

This prospectus provides information a prospective investor should know before
investing. Additional information about the Contract has been filed with the
Securities and Exchange Commission in a statement of additional information,
dated May 1, 1995, which information is incorporated herein by reference, and is
available without charge upon written request to The Prudential Insurance
Company of America, Prudential Plaza, Newark, New Jersey 07102-3777, or by
telephoning (800) 445-4571.

The Contents of the statement of additional information appear on page 25 of
this prospectus.

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

PLEASE READ THIS PROSPECTUS AND KEEP IT FOR FUTURE REFERENCE. IT IS ATTACHED TO
A CURRENT PROSPECTUS FOR THE PRUDENTIAL SERIES FUND, INC. AND A CURRENT
PROSPECTUS FOR THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY ACCOUNT.

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

The Prudential Insurance Company of America

Prudential Plaza
Newark, New Jersey 07102-3777
Telephone: (800) 445-4571

*Discovery is a service mark of The Prudential.
PIVC-1 Ed 5-95, Catalog #646956H

<PAGE>

PROSPECTUS CONTENTS
Page

DEFINITIONS OF SPECIAL TERMS USED IN THIS PROSPECTUS ..................... 1

BRIEF DESCRIPTION OF THE CONTRACT ........................................ 2

FEE TABLE ................................................................ 4

ACCUMULATION UNIT VALUES ................................................. 7

GENERAL INFORMATION ABOUT THE PRUDENTIAL, THE PRUDENTIAL
INDIVIDUAL VARIABLE CONTRACT ACCOUNT, AND THE VARIABLE
INVESTMENT OPTIONS AVAILABLE UNDER THE CONTRACT ........................ 10
The Prudential Insurance Company of America ............................ 10
The Prudential Individual Variable Contract Account .................... 10
The Prudential Series Fund, Inc ........................................ 10
The Prudential Variable Contract Real Property Account ................. 11

DETAILED INFORMATION ABOUT THE CONTRACT .................................. 11
Requirements for Issuance of a Contract ................................ 11
Short-Term Cancellation Right or "Free Look" ........................... 12
Allocation of Purchase Payments ........................................ 12
Additional Amounts ..................................................... 12
Transfers .............................................................. 13
Withdrawals ............................................................ 13
Death Benefit .......................................................... 14
Valuation of a Contract Owner's Contract Fund .......................... 14

CHARGES, FEES, AND DEDUCTIONS ............................................ 15
1. Premium Taxes ....................................................... 15
2. Sales Charges on Withdrawals ........................................ 15
3. Recapture of Additional Amounts ..................................... 16
4. Administrative Charge ............................................... 16
5. Charge for Assuming Mortality and Expense Risks ..................... 16
6. Expenses Incurred by the Series Fund ................................ 17

THE FIXED-RATE OPTION .................................................... 17

FEDERAL TAX STATUS ....................................................... 17
Taxes Payable by Contract Owners ....................................... 18
Contracts Used in Connection with Tax Favored Plans .................... 19
Plans For Self-Employed Individuals .................................... 19
IRAs ................................................................... 19
SEPs ................................................................... 20
TDA's .................................................................. 20
Eligible Deferred Compensation Plans of State or Local
Governments and Tax Exempt Organizations ............................. 21
Qualified Pension and Profit Sharing Plans ............................. 21
Minimum Distribution Option ............................................ 21
Withholding ............................................................ 21
Taxes on The Prudential ................................................ 21
ERISA Disclosure ....................................................... 22
Additional ERISA Requirements .......................................... 22

EFFECTING AN ANNUITY ..................................................... 22
1. Life Annuity with 120 Payments Certain .............................. 23
2. Interest Payment Option ............................................. 23
Legal Considerations Relating to Sex-Distinct Annuity
Purchase Rates ........................................................ 23

OTHER INFORMATION ........................................................ 23
Voting Rights .......................................................... 23
Sale of the Contract and Sales Commissions ............................. 24
Substitution of Series Fund Shares ..................................... 24
Ownership of the Contract .............................................. 24
Performance Information ................................................ 24
Reports to Contract Owners ............................................. 24
State Regulation ....................................................... 25
Litigation ............................................................. 25
Additional Information ................................................. 25

DIRECTORS AND OFFICERS ................................................... 26

<PAGE>

DEFINITIONS OF SPECIAL TERMS USED IN THIS PROSPECTUS

Account--See The Prudential Individual Variable Contract Account (the "Account")
below.

additional amount--See bonus below.

amount credited under the Contract--See Contract fund below.

annuitant--The person or persons, designated by the Contract owner, upon whose
life or lives monthly annuity payments are based after an annuity is effected.

annuity contract--A contract designed to provide an annuitant with an income,
which may be a lifetime income, beginning on the annuity date.

annuity date--The date, specified in the Contract, when annuity payments are to
begin.

bonus--On payments made during the first 3 Contract years, and thereafter at The
Prudential's discretion, an additional 1% added to and invested with the
purchase payment. This bonus will be recaptured by The Prudential if the payment
is withdrawn within 6 Contract years after it is made.

cash surrender value--The surrender value of the Contract, which equals the
Contract fund less any contingent deferred sales charge, any bonus subject to
recapture, and any administrative charge due upon surrender.

Contract anniversary--The same day and month as the Contract date in each later
year.

Contract date--The date The Prudential received the initial purchase payment for
the Contract.

Contract fund--The total value attributable to a specific Contract representing
amounts in all the subaccounts, under the fixed-rate option, and in the Real
Property Account. At times throughout this prospectus, when an alternative
identification may be desirable for complete clarity, or to further describe the
role of the Contract fund, we refer to the Contract fund as "the amount credited
under the Contract." The term should not be confused with The Prudential Series
Fund, Inc. (the "Series Fund") defined below.

Contract owner--The person who purchases a Discovery Plus Contract and makes the
purchase payments. The owner will usually also be an annuitant, but need not be.
The owner has all rights in the Contract before the annuity date. Subject to
certain limitations and requirements described in this prospectus, these rights
include the right to make withdrawals or surrender the Contract, to designate
and change the beneficiaries who will receive the proceeds at the death of the
annuitant before the annuity date, to transfer funds among the subaccounts, the
fixed-rate option, and the Real Property Account, and to designate a mode of
settlement for the annuitant on the annuity date.

Contract year--A year that starts on the Contract date or on a Contract
anniversary.

fixed-rate option--An investment option under which The Prudential credits
interest to the amount allocated at a rate periodically declared in advance by
The Prudential but not less than 3.1%.

subaccount--A division of the Account, the assets of which are invested in
shares of the corresponding portfolio of the Series Fund.

The Prudential Individual Variable Contract Account (the "Account")--A separate
account of The Prudential registered as a unit investment trust under the
Investment Company Act of 1940.

The Prudential Series Fund, Inc. (the "Series Fund")--A mutual fund with
separate portfolios, one or more of which may be chosen as an underlying
investment for the Contract.

The Prudential Variable Contract Real Property Account (the "Real Property
Account")--A separate account of The Prudential which, through a partnership,
invests primarily in income-producing real property.

valuation period--The period of time from one determination of the value of the
amount invested in a subaccount to the next. Such determinations are made when
the net asset values of the portfolios of the Series Fund are calculated, which
is generally at 4:15 p.m. New York City time on each day during which the New
York Stock Exchange is open.

variable investment options--The subaccounts and the Real Property Account.

1
<PAGE>

BRIEF DESCRIPTION OF THE CONTRACT

The Prudential Discovery Plus Contract (the "Contract") provides a way to invest
on a tax-deferred basis in one or more investment options with different
investment objectives and to obtain income protection for later life by
receiving annuity payments commencing on the annuity date. Discovery Plus is a
variable annuity contract. It is called a "variable" contract because the value
of the Contract depends upon the investment results of the investment option[s]
selected. Amounts held under the Contract may be withdrawn, in whole or in part,
prior to the annuity date.

The Contract is purchased by making an initial purchase payment of at least
$10,000. Subsequent payments of at least $1,000 ($10,000 or more in New York)
may also be made. The Prudential Insurance Company of America ("The Prudential")
allocates the purchase payment (after deduction of any applicable amount needed
to pay taxes attributable to premiums) in the subaccount[s], The Prudential
Variable Contract Real Property Account (the "Real Property Account") or the
fixed-rate option in accordance with the owner's instructions.

The assets of each subaccount are invested in a corresponding portfolio of The
Prudential Series Fund, Inc. (the "Series Fund"), a series mutual fund to which
The Prudential acts as investment advisor. The Series Fund currently has
thirteen portfolios available for investment by Contract owners. The Money
Market Portfolio is invested in short-term debt obligations similar to those
purchased by money market funds; the Bond Portfolio is invested primarily in
high quality medium-term corporate and government debt securities; the
Government Securities Portfolio is invested primarily in U.S. Government
securities including intermediate and long-term U.S. Treasury securities and
debt obligations issued by agencies of or instrumentalities established,
sponsored or guaranteed by the U.S. Government; the Conservatively Managed
Flexible Portfolio is invested in a mix of money market instruments, fixed
income securities, and common stocks, in proportions believed by the investment
manager to be appropriate for an investor who desires diversification of
investment who prefers a relatively lower risk of loss and a correspondingly
reduced chance of high appreciation; the Aggressively Managed Flexible Portfolio
is invested in a mix of money market instruments, fixed income securities, and
common stocks, in proportions believed by the investment manager to be
appropriate for an investor desiring diversification of investment who is
willing to accept a relatively high level of loss in an effort to achieve
greater appreciation; the High Yield Bond Portfolio is invested primarily in
high yield fixed income securities of medium to lower quality, also known as
high risk bonds; the Stock Index Portfolio is invested in common stocks selected
to duplicate the price and yield performance of the Standard & Poor's 500
Composite Stock Price Index; the High Dividend Stock Portfolio is invested
primarily in common stocks and convertible securities that provide favorable
prospects for investment income returns above those of the Standard & Poor's 500
Stock Index or the NYSE Composite Index; the Common Stock Portfolio is invested
primarily in common stocks; the Growth Stock Portfolio is invested primarily in
equity securities of established companies with above-average growth prospects;
the Small Capitalization Stock Portfolio is invested primarily in equity
securities of publicly-traded companies with small market capitalization; the
Global Equity Portfolio is invested primarily in common stocks and common stock
equivalents (such as convertible debt securities) of foreign and domestic
issuers; and the Natural Resources Portfolio is invested primarily in common
stocks and convertible securities of natural resource companies, and in
securities (typically debt securities or preferred stock) the terms of which are
related to the market value of a natural resource. Further information about the
Series Fund portfolios can be found under The Prudential Series Fund, Inc. on
page 10.

The Contract owner also may invest a portion of his or her purchase payments in
the Real Property Account, which, through a partnership, invests primarily in
income-producing real property. If a Contract owner elects to invest in this
real estate investment option, the assets will be maintained in a subaccount of
the Real Property Account related to the Contract that provides the mechanism
and maintains the records whereby various Contract charges are made. The
investment objectives of the Real Property Account and the partnership are
described briefly under The Prudential Variable Contract Real Property Account
on page 11.

The value of the Contract will vary to reflect the investment results of the
variable investment options (the subaccounts and the Real Property Account) in
which money is invested and the amount of interest credited on amounts allocated
to the fixed-rate option. The total amount attributable to a Contract allocated
to all the variable investment options and to the fixed-rate option is known as
the "Contract fund". For a discussion of the fixed-rate option, see THE
FIXED-RATE OPTION, page 17.

The Contracts described in this prospectus have a further attractive feature.
During the first 3 Contract years, and in Contract years thereafter at The
Prudential's discretion, The Prudential will add an additional amount, as a
bonus, of 1% to every purchase payment. The Prudential reserves the right to
limit its payment of such additional amounts under a particular Contract to
$1,000 in each Contract year. This additional amount will be allocated among the
subaccounts, the Real Property Account, and the fixed-rate option in the same
proportions as the purchase payment to which it is added. See Additional
Amounts, page 12. During the first 6 Contract years following a purchase
payment, the bonus attributable to any portion of that purchase payment that is
withdrawn

2
<PAGE>

will be recaptured by The Prudential, unless such withdrawn purchase payment is
used to effect an annuity that is not subject to a sales charge. See Sales
Charges on Withdrawals, page 15 and Recapture of Additional Amounts, page 16.

The Prudential makes charges under the Contract for the costs of selling and
distributing the Contract, for administering the Contract, and for assuming
mortality and expense risks under the Contract. Moreover, on any Contract
subject to a tax attributable to premiums, The Prudential will deduct the tax,
as provided under applicable law, from the purchase payment when received, or
from the Contract fund at the time the annuity is effected. The deduction for
taxes imposed on purchase payments will be lower, or not made at all, if total
purchase payments meet certain minimum amounts. See Premium Taxes, page 15. The
Prudential makes a charge against the Series Fund's assets and against the Real
Property Account's assets for providing investment advisory and management
services.

The administrative charge is a daily charge equal to an annual rate of 0.2% of
the assets held in the variable investment options. A maintenance charge of $30
will be deducted on a Contract anniversary or at the time of a full withdrawal
if and only if the amount then credited under the Contract is less than $10,000.
This $30 fee will not be charged if the Contract fund is less than $10,000 as a
result of a withdrawal due to confinement in a nursing home or hospital, or due
to a terminal illness. The mortality and expense risk charge is a daily charge
equal to an annual rate of 1% of the assets held in the variable investment
options. A contingent deferred sales charge may be imposed upon the withdrawal
of purchase payments. The maximum contingent deferred sales charge is 7% of the
purchase payment withdrawn. Further detail about charges may be found under
CHARGES, FEES, AND DEDUCTIONS, page 15.

Subject to restrictions on withdrawals from Section 403(b) annuities ("TDA's")
imposed by federal tax law, the Contract owner may withdraw all or part of the
amount credited under the Contract prior to the annuity date, subject to the
possible sales charge mentioned above and the possible recapture of the 1%
bonus. See Withdrawals, page 13 and TDA's, page 20. If a full or partial
withdrawal is requested, it may be wholly or partially taxable. Certain
withdrawals may be subject to a federal penalty tax as well as to federal income
tax. See Taxes Payable by Contract Owners, page 18. If a lump sum is requested,
it will be paid within 7 days and deducted from the amount credited under the
Contract. See Withdrawals, page 13. If an annuity option is selected, annuity
payments will be in monthly installments of guaranteed amounts. See EFFECTING AN
ANNUITY, page 22.

In the event that the annuitant dies prior to the annuity date or the surrender
of the Contract for its cash surrender value, The Prudential will pay a death
benefit to the stated beneficiary. See Death Benefit, page 14. In the event that
the owner dies before the entire value of the Contract is distributed, the
remaining value must be distributed according to certain specified rules in
order for the Contract to qualify as an annuity for tax purposes.

Amounts may be transferred among the subaccounts, to the Real Property Account,
and to the fixed-rate option up to four times each year. There are limitations
upon transfers into and out of the Real Property Account and out of the
fixed-rate option. See Transfers, page 13.

As long as the minimum purchase payment requirements are satisfied, this
Contract may be purchased in connection with, or used for rollovers from,
retirement arrangements that qualify for federal tax benefits under Sections
401, 403(a), 403(b), 408(a), 408(b) or 457 of the Internal Revenue Code ("tax
favored plans"). There are certain special provisions and/or restrictions
applicable to Contracts issued to tax favored plans. Such Contracts may not
invest in The Real Property Account.

For a limited time, a Contract may be returned for a refund in accordance with
the terms of its "free look" provision. See Short-Term Cancellation Right or
"Free Look", page 12.

This Brief Description of the Contract is intended to provide a broad overview
of the more significant features of the Contract. More detailed information will
be found in subsequent sections of this prospectus and in the Contract document.

3
<PAGE>

FEE TABLE

Contract Owner Transaction Expenses
Sales Load imposed on Purchase Payments ...... None (1% bonus added to payment
up to a Maximum bonus of
$1,000 per Contract year)

Maximum Deferred Sales Load:

Maximum Deferred Sales Charge as a Percentage of
Contract Years After Payment Purchase Payment Withdrawn*
- ---------------------------- ------------------------------------------------
0 .......................... 7% plus return of 1% bonus
1 year ..................... 7% plus return of 1% bonus
2 years .................... 7% plus return of 1% bonus
3 years .................... 6% plus return of 1% bonus
4 years .................... 5% plus return of 1% bonus
5 years .................... 4% plus return of 1% bonus
6 or more years ............ 0%

*The deferred sales load is not imposed on that portion of the withdrawals
made in any Contract year equal to the first 10% of the Contract fund.

Annual Contract Fee .................................................... None*

*If the Contract fund is less than $10,000, a $30 annual charge is assessed.
This $30 fee will not be charged if the Contract fund is less than $10,000 as a
result of a withdrawal due to confinement in a nursing home or hospital, or due
to a terminal illness. The minimum initial purchase payment is $10,000.

Separate Account Annual Expenses (as a Percentage of average Contract fund)

All Subaccounts
---------------
Mortality and Expense Risk Fee........................... 1.00%
Administrative Charge.................................... .20%
-----
Total Separate Account Annual Expenses................... 1.20%
=====

The Prudential Series Fund, Inc. Annual Expenses
(as a percentage of portfolio average net assets)

Conservatively Aggressively High
Money Government Managed Managed Yield
Market Bond Securities Flexible Flexible Bond
------ ---- ---------- -------- -------- ----
<S> <C> <C> <C> <C> <C> <C>
Investment Management Fee ............. .40% .40% .40% .55% .60% .55%

Other Expenses .07% .05% .05% .06% .06% .10%
---- ---- ---- ---- ---- ----
Total Series Fund Annual Expenses ..... .47% .45% .45% .61% .66% .65%
==== ==== ==== ==== ==== ====

Small
Stock High Common Growth Capitalization Global Natural
Index Dividend Stock Stock Stock Equity Resources
----- -------- ----- ----- -------------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment Management Fee ............ .35% .40% .45% .60% .40% .75% .45%
Other Expenses ....................... .07% .12% .10% .15% .22% .48% .16%
---- ---- ---- ---- ---- ---- ----
Total Series Fund Annual Expenses ... .42% .52% .55% .75% .62% 1.23% .61%
==== ==== ==== ==== ==== ===== ====
</TABLE>

4
<PAGE>

The purpose of the foregoing tables is to assist the Contract owners in
understanding the expenses of The Prudential Individual Variable Contract
Account and The Prudential Series Fund, Inc. (the "Series Fund") that they bear,
directly or indirectly. See the sections on charges in this prospectus and the
attached prospectus for the Series Fund. The above tables do not include any
taxes attributable to premiums.

Except for the Global Equity Portfolio, The Prudential reimburses a portfolio
when its ordinary operating expenses, excluding taxes, interest, and brokerage
commissions exceed 0.75% of the portfolio's average daily net assets. The
amounts listed for the portfolios under "Other Expenses" are based on amounts
incurred in the last fiscal year.

The Growth Stock and Small Capitalization Stock Portfolios were not in operation
in 1994 and therefore do not have actual expense amounts available.
Consequently, for the fee table above and the examples that follow, the figures
shown as "Other Expenses" and total expenses are based on estimated amounts for
the current fiscal year. It is anticipated that as average net assets of both
portfolios grow, the magnitude of "Other Expenses" will decrease and become
comparable to that of other portfolios.

Examples of Fees and Expenses.

The following examples, and those on page 6, illustrate the cumulative dollar
amount of all the above expenses that would be incurred on each $1,000
investment.

o The examples assume a consistent 5% annual return on invested assets;

o The examples do not take into consideration any taxes attributable to premiums
which may be payable at the time of annuitization or at the time of purchase
payments;

o The amounts shown are accurate for Contract funds over $10,000 and understated
for Contract funds less than $10,000.

For a term less than 10 years, the expenses shown in Table I, describe
applicable charges for the withdrawal, or surrender, of your entire Contract
fund. The examples should not be considered to be a representation of past or
future expenses; actual expenses incurred in any given year may be more or less
than those shown in the examples.

The following example shows how the Year 1 expenses shown in Table I were
calculated for the Aggressively Managed Flexible Portfolio, for each $1,000
invested. This assumes a withdrawal is made just prior to the end of the first
year after payment. The amount of the Annual Contract Charge in this example is
calculated in a manner prescribed by the Securities and Exchange Commission.

<S> <C> <C>
Initial Investment .................. $1,000.00
Plus 1% bonus ....................... ($1,000 + $10) 1,010.00
5% Assumed Rate of Return ........... ($1,010 x 1.05) 1,060.50
Average Value of Funds .............. [($1,010 + $1,060.50)/2] 1,035.25
Annual Expenses ..................... (1.0 risk fees + 0.20 administrative charge
+ 0.60 management fee + 0.06 expense) 1.86%
Annual Contract Charge .............. 0.00
Total Contract Expenses ............. ($1,035.25 x 1.86%) + $0 19.26

</TABLE>

Contingent Deferred Sales Charge computation for surrender or withdrawal of
entire fund:

<TABLE>
<CAPTION>
<S> <C> <C>
Net Contract fund ................... ($1,060.50 - $19.26) $1,041.24
10% Charge-free withdrawal .......... 104.12
Initial investment .................. 1,000.00*
Amount subject to surrender charge .. ($1,000 - $104.12) 895.88
Surrender charge @ 7% ............... 62.71
Plus Total Contract Expenses (as calculated above) 19.26
---------
TOTAL CHARGES $ 81.97

</TABLE>

*Note that in this example, The Prudential would recapture the 1% bonus that had
been credited to the initial investment.

5
<PAGE>

TABLE I

If you withdraw your entire Contract fund or surrender your Contract just prior
to the end of the applicable time period, you would pay the following cumulative
expenses on each $1,000 invested, assuming 5% annual return on assets:

1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Money Market Portfolio ............................................... $ 80 $116 $136 $201
Bond Portfolio ....................................................... $ 80 $115 $135 $199
Government Securities Portfolio ...................................... $ 80 $115 $135 $199
Conservatively Managed Flexible Portfolio ............................ $ 81 $120 $144 $217
Aggressively Managed Flexible Portfolio .............................. $ 82 $122 $147 $222
High Yield Bond Portfolio ............................................ $ 82 $122 $146 $221
Stock Index Portfolio ................................................ $ 79 $114 $134 $196
High Dividend Stock Portfolio ........................................ $ 81 $117 $139 $207
Common Stock Portfolio ............................................... $ 81 $118 $141 $210
Growth Stock Portfolio ............................................... $ 83 $125 $151 $232
Small Capitalization Stock Portfolio ................................. $ 82 $121 $144 $218
Global Equity Portfolio .............................................. $ 88 $140 $177 $283
Natural Resources Portfolio .......................................... $ 81 $120 $144 $217

</TABLE>

As an example, if the entire Contract fund is invested in the Aggressively
Managed Flexible Portfolio, and you surrendered your entire Contract just prior
to the end of 1 year, you would pay $82 per $1,000 invested, reflecting all
charges including the 7% contingent deferred sales charge.

TABLE II

If you annuitize just before the end of the applicable time period, you would
pay the following cumulative expenses on each $1,000 invested, assuming 5%
annual return on assets:

(Note: The 1, 3 and 5 Year columns reflect the imposition of the contingent
deferred sales charge; however, some of the annuity options may not be
subject to this charge after year 1. Where this is the case, the expenses
shown in Table III below would be applicable. See page 14 under the Sales
Charges on Withdrawals section.)

TABLE III

If you do not withdraw any portion of your Contract fund as of the end of the
applicable time period, you would pay the following cumulative expenses on each
$1,000 invested, assuming 5% annual return on assets:

1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Money Market Portfolio ............................................... $ 17 $ 54 $ 92 $201
Bond Portfolio ....................................................... $ 17 $ 53 $ 91 $199
Government Securities Portfolio ...................................... $ 17 $ 53 $ 91 $199
Conservatively Managed Flexible Portfolio ............................ $ 19 $ 58 $100 $217
Aggressively Managed Flexible Portfolio .............................. $ 19 $ 60 $103 $222
High Yield Bond Portfolio ............................................ $ 19 $ 59 $102 $221
Stock Index Portfolio ................................................ $ 17 $ 52 $ 90 $196
High Dividend Stock Portfolio ........................................ $ 18 $ 55 $ 95 $207
Common Stock Portfolio ............................................... $ 18 $ 56 $ 97 $210
Growth Stock Portfolio ............................................... $ 20 $ 62 $107 $232
Small Capitalization Stock Portfolio ................................. $ 19 $ 58 $100 $218
Global Equity Portfolio .............................................. $ 25 $ 77 $132 $283
Natural Resources Portfolio .......................................... $ 19 $ 58 $100 $217

</TABLE>

Notice that in all 3 of the above tables, the level of cumulative charges is
identical for the 10 year column. This is because at that point there are no
contingent deferred sale charges taken by The Prudential upon surrender or
annuitization. It may be helpful to consider the dollar amounts shown as
percentages of the amount invested ($1,000) over the period specified. In the
case of the Aggressively Managed Flexible Portfolio, $222 at the end of 10 years
equals $22.20 per year, or approximately 2.2% of $1,000.

<PAGE>

ACCUMULATION UNIT VALUES
THE PRUDENTIAL INDIVIDUAL VARIABLE CONTRACT ACCOUNT
DISCOVERY PLUS CONTRACT
(Condensed Financial Information)
<TABLE>
<CAPTION>
SUBACCOUNTS
--------------------------------------------------------------------------------
Money Market
--------------------------------------------------------------------------------
01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 02/27/89*
to to to to to to
12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89
------------ ------------ ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
1. Accumulation unit value at beginning of period.. $ 1.796 $ 1.766 $ 1.722 $ 1.641 $ 1.536 $ 1.440
2. Accumulation unit value at end of period........ 1.847 1.796 1.766 1.722 1.641 1.536
3. Number of accumulation units outstanding
at end of period................................ 137,690,220 98,824,301 110,136,278 108,951,868 78,507,679 20,144,839

Bond
--------------------------------------------------------------------------------
01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 02/27/89*
to to to to to to
12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89
------------ ------------ ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
1. Accumulation unit value at beginning of period.. $ 2.541 $ 2.335 $ 2.204 $ 1.916 $ 1.790 $ 1.599
2. Accumulation unit value at end of period........ 2.430 2.541 2.335 2.204 1.916 1.790
3. Number of accumulation units outstanding
at end of period ............................... 62,532,884 65,012,139 43,861,931 26,025,946 14,221,106 6,775,075

<CAPTION>
Common Stock
--------------------------------------------------------------------------------
01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 02/27/89*
to to to to to to
12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89
------------ ------------ ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
1. Accumulation unit value at beginning of period.. $ 3.681 $ 3.056 $ 2.709 $ 2.176 $ 2.323 $ 1.884
2. Accumulation unit value at end of period........ 3.738 3.681 3.056 2.709 2.176 2.323
3. Number of accumulation units outstanding
at end of period................................ 144,061,975 109,315,212 64,109,169 35,797,392 13,870,625 5,468,614

<CAPTION>
Aggressively Managed Flexible
--------------------------------------------------------------------------------
01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 02/27/89*
to to to to to to
12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89
------------ ------------ ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
1. Accumulation unit value at beginning of period.. $ 2.955 $ 2.587 $ 2.434 $ 1.963 $ 1.950 $ 1.656
2. Accumulation unit value at end of period........ 2.828 2.955 2.587 2.434 1.963 1.950
3. Number of accumulation units outstanding
at end of period................................ 140,860,169 111,136,044 62,046,878 33,449,040 20,844,438 7,863,675

</TABLE>

* Commencement of Business

The financial statements of the Account are in the statement of additional
information.

<PAGE>

ACCUMULATION UNIT VALUES
THE PRUDENTIAL INDIVIDUAL VARIABLE CONTRACT ACCOUNT
DISCOVERY PLUS CONTRACT
(Condensed Financial Information) (Continued)
<TABLE>
<CAPTION>
SUBACCOUNTS
--------------------------------------------------------------------------------
Conservatively Managed Flexible
--------------------------------------------------------------------------------
01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 02/27/89*
to to to to to to
12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89
------------ ------------ ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
1. Accumulation unit value at beginning of period.. $ 2.713 $ 2.447 $ 2.316 $ 1.968 $ 1.892 $ 1.666
2. Accumulation unit value at end of period........ 2.655 2.713 2.447 2.316 1.968 1.892
3. Number of accumulation units outstanding
at end of period................................ 313,266,018 242,321,897 133,530,065 59,165,985 29,438,662 10,559,021

<CAPTION>
High Yield Bond
--------------------------------------------------------------------------------
01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 02/27/89*
to to to to to to
12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89
------------ ------------ ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
1. Accumulation unit value at beginning of period.. $ 1.670 $ 1.417 $ 1.220 $ 0.887 $ 1.019 $ 1.078
2. Accumulation unit value at end of period........ 1.605 1.670 1.417 1.220 0.887 1.019
3. Number of accumulation units outstanding
at end of period................................ 82,161,785 68,503,233 31,814,404 9,103,642 3,962,676 2,636,013

<CAPTION>
Stock Index
--------------------------------------------------------------------------------
01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 02/27/89*
to to to to to to
12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89
------------ ------------ ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
1. Accumulation unit value at beginning of period.. $ 1.776 $ 1.639 $ 1.548 $ 1.208 $ 1.268 $ 1.018
2. Accumulation unit value at end of period........ 1.772 1.776 1.639 1.548 1.208 1.268
3. Number of accumulation units outstanding
at end of period................................ 89,080,644 91,215,676 71,404,267 38,553,592 17,965,337 5,881,105

<CAPTION>
High Dividend Stock
--------------------------------------------------------------------------------
01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 02/27/89*
to to to to to to
12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89
------------ ------------ ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
1. Accumulation unit value at beginning of period.. $ 2.099 $ 1.737 $ 1.596 $ 1.267 $ 1.332 $ 1.139
2. Accumulation unit value at end of period........ 2.104 2.099 1.737 1.596 1.267 1.332
3. Number of accumulation units outstanding
at end of period................................ 218,661,165 155,205,890 66,252,437 28,475,526 16,439,709 9,230,667

</TABLE>

* Commencement of Business

The financial statements of the Account are in the statement of additional
information.

<PAGE>

ACCUMULATION UNIT VALUES
THE PRUDENTIAL INDIVIDUAL VARIABLE CONTRACT ACCOUNT
DISCOVERY PLUS CONTRACT
(Condensed Financial Information) (Continued)
<TABLE>
<CAPTION>
SUBACCOUNTS
--------------------------------------------------------------------------------
Natural Resources
--------------------------------------------------------------------------------
01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 02/27/89*
to to to to to to
12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89
------------ ------------ ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
1. Accumulation unit value at beginning of period.. $ 1.851 $ 1.497 $ 1.412 $ 1.295 $ 1.391 $ 1.137
2. Accumulation unit value at end of period........ 1.751 1.851 1.497 1.412 1.295 1.391
3. Number of accumulation units outstanding
at end of period................................ 38,719,527 21,404,880 9,178,489 7,245,895 7,525,168 2,095,818

<CAPTION>
Global Equity
--------------------------------------------------------------------------------
01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 05/01/89*
to to to to to to
12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89
------------ ------------ ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
1. Accumulation unit value at beginning of period.. $ 1.425 $ 1.007 $ 1.056 $ 0.959 $ 1.115 $ 1.015
2. Accumulation unit value at end of period........ 1.339 1.425 1.007 1.056 0.959 1.115
3. Number of accumulation units outstanding
at end of period............................... 127,945,906 51,691,984 12,211,247 8,345,863 5,058,856 1,221,795

<CAPTION>
Government Securities
--------------------------------------------------------------------------------
01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 05/01/89*
to to to to to to
12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89
------------ ------------ ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
1. Accumulation unit value at beginning of period.. $ 1.553 $ 1.397 $ 1.335 $ 1.164 $ 1.108 1.000
2. Accumulation unit value at end of period........ 1.456 1.553 1.397 1.335 1.164 1.108
3. Number of accumulation units outstanding
at end of period................................ 148,872,947 161,058,905 103,111,144 35,607,897 8,957,406 3,570,059

</TABLE>

* Commencement of Business

The financial statements of the Account are in the statement of additional
information.

9
<PAGE>

GENERAL INFORMATION ABOUT THE PRUDENTIAL, THE PRUDENTIAL
INDIVIDUAL VARIABLE CONTRACT ACCOUNT, AND THE VARIABLE
INVESTMENT OPTIONS AVAILABLE UNDER THE CONTRACT

The Prudential Insurance Company of America. The Prudential Insurance Company of
America ("The Prudential") is a mutual insurance company, founded in 1875 under
the laws of the State of New Jersey. It is licensed to sell life insurance and
annuities in the District of Columbia, Guam, and in all states. These Contracts
are not offered in any state in which the necessary approvals have not yet been
obtained.

The Prudential's consolidated financial statements appear in the statement of
additional information and should be considered only as bearing upon The
Prudential's ability to meet its obligations under the Contracts.

The Prudential Individual Variable Contract Account. The Prudential Individual
Variable Contract Account (the "Account") was established on October 12, 1982
under New Jersey law as a separate investment account. The Account meets the
definition of a "separate account" under the federal securities laws. The
Account holds assets that are segregated from all of The Prudential's other
assets.

The obligations to Contract owners and beneficiaries arising under the Contract
are general corporate obligations of The Prudential. The Prudential is also the
legal owner of the assets in the Account. The Prudential will at all times
maintain assets in the Account with a total market value at least equal to the
reserve and other liabilities relating to the variable benefits attributable to
the Account. These assets may not be charged with liabilities which arise from
any other business The Prudential conducts. In addition to these assets, the
Account's assets may include funds contributed by The Prudential to commence
operation of the Account and may include accumulations of the charges The
Prudential makes against the Account. From time to time these additional assets
will be transferred to The Prudential's general account. Before making any such
transfer, The Prudential will consider any possible adverse impact the transfer
might have on the Account.

The Account is registered with the Securities and Exchange Commission ("SEC")
under the Investment Company Act of 1940 ("1940 Act") as a unit investment
trust, which is a type of investment company. This does not involve any
supervision by the SEC of the management or investment policies or practices of
the Account. For state law purposes, the Account is treated as a part or
division of The Prudential. There are currently thirteen subaccounts within the
Account, each of which invests in a single corresponding portfolio of the Series
Fund. Additional subaccounts may be added in the future. The Account's financial
statements appear in the statement of additional information.

The Prudential Series Fund, Inc. The Prudential Series Fund, Inc. (the "Series
Fund") is registered under the 1940 Act as an open-end diversified management
investment company. Its shares are currently sold only to separate accounts of
The Prudential and certain other insurers that offer variable life insurance and
variable annuity contracts. The Account will purchase and redeem shares from the
Series Fund at net asset value. Shares will be redeemed to the extent necessary
for The Prudential to provide benefits under the Contract and to transfer assets
from one subaccount to another, as requested by Contract owners. Any dividend or
capital gain distribution received from a portfolio of the Series Fund will be
reinvested immediately at net asset value in shares of that portfolio and
retained as assets of the corresponding subaccount.

The Prudential is the investment advisor for the assets of each of the
portfolios of the Series Fund. The Prudential's principal business address is
Prudential Plaza, Newark, New Jersey 07102-3777. The Prudential has a Service
Agreement with its wholly-owned subsidiary The Prudential Investment Corporation
("PIC"), which provides that, subject to The Prudential's supervision, PIC will
furnish investment advisory services in connection with the management of the
Series Fund. In addition, The Prudential has entered into a Subadvisory
Agreement with its wholly-owned subsidiary Jennison Associates Capital Corp.
("Jennison"), under which Jennison furnishes investment advisory services in
connection with the management of the Growth Stock Portfolio. Further detail is
provided in the prospectus and statement of additional information for the
Series Fund. The Prudential, PIC and Jennison are registered as investment
advisors under the Investment Advisers Act of 1940.

As an investment advisor, The Prudential charges the Series Fund a daily
investment management fee as compensation for its services. The following table
shows the investment management fee charged for each portfolio of the Series
Fund available for investment by Contract owners.

10
<PAGE>

Annual Investment Management Fee
as a Percentage of Average
Portfolio Daily Net Assets
- --------- -----------------
Money Market Portfolio ................................ 0.40%
Bond Portfolio ........................................ 0.40%
Government Securities Portfolio ....................... 0.40%
Conservatively Managed Flexible Portfolio ............. 0.55%
Aggressively Managed Flexible Portfolio ............... 0.60%
High Yield Bond Portfolio ............................. 0.55%
Stock Index Portfolio ................................. 0.35%
High Dividend Stock Portfolio ......................... 0.40%
Common Stock Portfolio ................................ 0.45%
Growth Stock Portfolio ................................ 0.60%
Small Capitalization Stock Portfolio .................. 0.40%
Global Equity Portfolio ............................... 0.75%
Natural Resources Portfolio ........................... 0.45%

It is conceivable that in the future it may become disadvantageous for both
variable life insurance and variable annuity contract separate accounts to
invest in the same underlying mutual fund. Although neither the companies which
invest in the Series Fund, nor the Series Fund currently foresees any such
disadvantage, the Series Fund's Board of Directors intends to monitor events in
order to identify any material conflict between variable life insurance and
variable annuity contract owners and to determine what action, if any, should be
taken in response thereto. Material conflicts could result from such things as:
(1) changes in state insurance law; (2) changes in federal income tax law; (3)
changes in the investment management of any portfolio of the Series Fund; or (4)
differences between voting instructions given by variable life insurance and
variable annuity contract owners.

A full description of the Series Fund, its investment objectives, management,
policies, and restrictions, its expenses, the risks attendant to investment
therein--including any risks associated with investment in the High Yield Bond
Portfolio, and all other aspects of its operation is contained in the attached
prospectus for the Series Fund and in its statement of additional information,
which should be read in conjunction with this prospectus. There is no assurance
that the investment objectives will be met.

The Prudential Variable Contract Real Property Account. The Prudential Variable
Contract Real Property Account (the "Real Property Account") is a separate
account of The Prudential that, through a general partnership formed by The
Prudential and two of its subsidiaries, invests primarily in income-producing
real property such as office buildings, shopping centers, agricultural land,
hotels, apartments or industrial properties. It also invests in mortgage loans
and other real estate-related investments, including sale-leaseback
transactions. The objectives of the Real Property Account and the partnership
are to preserve and protect capital, provide for compounding of income as a
result of reinvestment of cash flow from investments, and provide for increases
over time in the amount of such income through appreciation in the value of
assets.

The partnership has entered into an investment management agreement with The
Prudential, under which The Prudential selects the properties and other
investments held by the partnership. The Prudential charges the partnership a
daily fee for investment management which amounts to 1.25% per year of the
average daily gross assets of the partnership.

A full description of the Real Property Account, its management, policies, and
restrictions, its charges and expenses, the risks attendant to investment
therein, the partnership's investment objectives, and all other aspects of the
Real Property Account's and the partnership's operations is contained in the
attached prospectus for the Real Property Account, which should be read together
with this prospectus by any Contract owner considering the real estate
investment option. There is no assurance that the investment objectives will be
met.

DETAILED INFORMATION ABOUT THE CONTRACT

Requirements for Issuance of a Contract. The minimum initial purchase payment is
$10,000. The Contract may generally be issued on proposed annuitants below the
age of 86. Before issuing any Contract, The Prudential requires submission of
certain information. Following The Prudential's review of the information and
approval of issuance of the Contract, a Contract will be issued that sets forth
precisely the owner's rights and the Company's obligations. The Contract owner
may thereafter make additional purchase payments of $1,000 or more ($10,000 or
more in New York), but there is no obligation to do so. These additional
purchase payments may be made by check payable to the order of The Prudential
and mailed to a Prudential Home Office, accompanied by forms that will be
provided for this purpose.

<PAGE>

The Contract date will be the date the initial purchase payment and required
information are received in The Prudential Home Office. The amount credited
under the Contract begins to vary as of the end of the first valuation period to
reflect the investment results of the variable investment option[s] and/or the
interest rate declared for the fixed-rate option as chosen by the applicant. If
the issuance of the Contract is not approved, because the current underwriting
requirements are not met, the purchase payment will promptly be returned. The
Company reserves the right to change these requirements on a non-discriminatory
basis.

Short-Term Cancellation Right or "Free Look". Generally, a Contract may be
returned for a refund within 10 days after it is received by the Contract owner.
Some states allow a longer period of time during which a Contract may be
returned for a refund. A refund can be requested by mailing or delivering the
Contract to the representative who sold it or to The Prudential Home Office
specified in the Contract. The Contract owner will then receive a refund of all
purchase payments made, plus or minus any change due to investment experience in
the value of the invested portion of the payments, excluding any bonus paid on
the purchase payments, calculated as if no charges had been made against the
Account or the Series Fund. However, if applicable law so requires, the Contract
owner who exercises his or her short-term cancellation right will receive a
refund of all purchase payments made, excluding any bonus paid on the purchase
payments, with no adjustment for investment experience.

Allocation of Purchase Payments. The Contract owner determines how the initial
purchase payment will be allocated among the subaccounts, the Real Property
Account, and the fixed-rate option, by specifying the desired allocation on the
application form for a Contract. The owner may choose to allocate nothing to a
particular subaccount, to the Real Property Account or to the fixed-rate option,
but any allocation made must be at least 10% and may not be a fractional
percent. Subsequent purchase payments will be allocated in the same proportions
as the most recent purchase payment made by the owner. The subsequent purchase
payments which are allocated to the variable investment option[s] will be
credited under the Contract based on the next computed value of an accumulation
unit following receipt of payment by The Prudential. The value of an
accumulation unit is determined when the net asset values of the portfolios of
the Series Fund are calculated, which is generally at 4:15 p.m. New York City
time on each day during which the New York Stock Exchange is open. Subsequent
purchase payments allocated to the fixed-rate option will begin earning interest
on the date received. The Contract owner may change the way in which subsequent
purchase payments are allocated by providing The Prudential with written
instructions or by telephoning the designated Prudential Home Office, provided
the Contract owner is enrolled to use the Telephone Transfer System.

Additionally, a feature called Dollar Cost Averaging is available to Contract
owners who make an allocation to the Money Market Subaccount. Under this
feature, automatic flat dollar amounts will be transferred monthly from the
Money Market Subaccount into other investment options available under the
Contract, excluding the fixed rate option, but including the Real Property
Account. At issue, the minimum amount initially designated for transfer under
this feature must be the greater of $10,000 and 10% of the initial premium
payment. After issue, The Prudential will accept an amount less than $10,000
provided it brings the balance in any current Dollar Cost Averaging account up
to $10,000. Monthly transfers must be at least 3% of the amount allocated to the
Dollar Cost Averaging account, with a minimum of $20 transferred into any one
investment option. These amounts are subject to change at The Prudential's
discretion. The minimum transfer amount will only be recalculated upon an
increase in the amount allocated to the feature.

Each automatic monthly transfer will take effect as of the end of the valuation
period on the Monthly date (i.e. the Contract date and the same date in each
subsequent month), provided the New York Stock Exchange is open on that date. If
the New York Stock Exchange is not open on that date, or if the Monthly date
does not occur in that particular month, the transfer will take effect as of the
end of the last valuation period which immediately precedes that Monthly date.
Automatic monthly transfers will continue until the amount designated for Dollar
Cost Averaging has been transferred, or until the Contract owner gives
notification of a change in allocation or cancellation of the feature.
Currently, there is no charge for using the Dollar Cost Averaging feature.

Additional Amounts. For purchase payments made, during the first 3 Contract
years, and in Contract years thereafter at The Prudential's discretion, The
Prudential will add an additional amount, as a bonus, of 1% to the purchase
payment and allocate that additional amount to the subaccounts, the Real
Property Account, and the fixed-rate option in the same manner as that purchase
payment. The Prudential reserves the right, however, to limit its payment of
such additional amounts to $1,000 in each Contract year. This additional amount
or bonus will work as follows. Suppose the owner makes an initial purchase
payment of $10,000 to be allocated equally to the Common Stock Subaccount and
the fixed-rate option. The Prudential would increase the payment by 1%, or $100,
and allocate $5,050 to both the Common Stock Subaccount and to the fixed-rate
option. Later in the year the owner sends The Prudential an additional purchase
payment of $6,000, but fails to indicate how it should be applied. The
Prudential would increase that amount by 1% or $60, and based on the owner's
most recent instruction, would allocate $3,030 to both the Common Stock
Subaccount and to the fixed-rate option.

The additional amount will not be subject to taxes attributable to premiums. It
will, however, be recaptured by The Prudential in the event the owner makes a
withdrawal of a purchase payment on which an additional amount

12
<PAGE>

was paid within 6 Contract years after the payment, unless such withdrawn
purchase payment is used to effect an annuity that is not subject to a sales
charge. See Sales Charges on Withdrawals, page 15, and Recapture of Additional
Amounts, page 16.

Transfers. The Contract owner may transfer all or part of the amount credited to
any subaccount to any of the other subaccounts, to the Real Property Account or
to the fixed-rate option without charge. The Contract owner may transfer amounts
by proper written notice to a Prudential Home Office, or by telephone unless the
Contract owner asks that transfers by telephone not be made. The Prudential has
adopted procedures designed to ensure that requests by telephone are genuine and
will require appropriate identification for that purpose. The Prudential cannot
guarantee that owners will be able to get through to complete a telephone
transfer during peak periods such as periods of drastic economic or market
change. Transfers among subaccounts will take effect as of the end of the
valuation period in which a proper transfer request is received at a Prudential
Home Office. The request may be in dollars, such as a request to transfer $5,000
from one subaccount to another, or may be in terms of a percentage reallocation
among subaccounts. In the latter case, the percentage must be whole numbers. The
owner may make up to four transfers a year, either among the subaccounts or from
the subaccounts to the Real Property Account or to the fixed-rate option.

Transfers from the fixed-rate option to the variable investment options are
currently permitted once each Contract year and only during the 30-day period
beginning on the Contract anniversary. The maximum amount which currently may be
transferred out of the fixed-rate option each year is the greater of: (a) 25% of
the amount in the fixed-rate option, and (b) $5,000. These limits are subject to
change in the future. Transfers from the Real Property Account to the
subaccounts or to the fixed-rate option are currently permitted once each
Contract year and only during the 30-day period beginning on the Contract
anniversary. The maximum amount which currently may be transferred out of the
Real Property Account is the greater of: (a) 50% of the amount in the Real
Property Account, and (b) $10,000. Transfer requests received prior to the
Contract anniversary will be effected on the Contract anniversary. Transfer
requests received within the 30-day period beginning on the Contract anniversary
will be effected as of the end of the valuation period in which a proper
transfer request is received at a Prudential Home Office. Restrictions on
transfers to and from the Real Property Account, which are subject to change,
are fully described in the attached prospectus for the Real Property Account.

Withdrawals. Subject to any restrictions on withdrawals contained in the tax
favored plan under which a participant is covered, the Contract owner may at any
time make a withdrawal from the Contract fund of all or part of the cash
surrender value of the Contract. However, The Prudential's consent will be
required for a partial withdrawal if the amount requested is less than $500 or
if it would reduce the amount credited under the Contract to less than $500. In
addition, there are certain restrictions on the withdrawal of salary reduction
contributions and earnings invested in annuity contracts subject to Section
403(b) of the Internal Revenue Code. Under such contracts, withdrawals may be
made prior to attaining age 59 1/2 in the event of severance of employment,
death, total and permanent disability and, in limited circumstances, hardship.
See TDA's, page 20. Amounts held under TDA contracts as of December 31, 1988 are
exempt from these restrictions. The withdrawal restrictions do not apply to
transfers among the available investment options offered by The Prudential or to
the direct transfer of all or part of the Contract owner's interest in the
Contract to a Section 403(b) tax-deferred annuity contract of another insurance
company or to a mutual fund custodial account under Section 403(b)(7).

Unless otherwise specified, a partial withdrawal will be allocated among all
subaccounts, the Real Property Account, and the fixed-rate option in the same
proportions as the value of the amount in each subaccount, the Real Property
Account, and the fixed-rate option bears to the total amount then credited to
the Contract. If a total or partial withdrawal is made in the first 6 Contract
years following a purchase payment, there may be a contingent deferred sales
charge. See Sales Charges on Withdrawals, page 15. The withdrawal will be
effected as of the end of the valuation period in which a proper withdrawal
request is received at a Prudential Home Office.

The Prudential will generally pay the amount of any withdrawal, less any
applicable sales charges and any required tax withholding, within 7 days after
it receives a properly completed withdrawal request. The Prudential may delay
payment of any withdrawal allocable to the subaccount[s] for a longer period if
the disposal or valuation of the Account's assets is not reasonably practicable
because the New York Stock Exchange is closed for other than a regular holiday
or weekend, trading is restricted by the SEC or the SEC declares that an
emergency exists. With respect to the amount of any withdrawal allocable to the
fixed-rate option, The Prudential expects to pay the withdrawal promptly upon
request. However, The Prudential has the right to delay payment of such
withdrawal for up to 6 months (or a shorter period if required by applicable
law). The Prudential will pay interest of at least 3% a year if it delays such a
payment for 30 days or more (or a shorter period if required by applicable law).

The Prudential also offers an Automated Withdrawal feature which enables
Contract owners to receive periodic withdrawals either monthly, quarterly,
semi-annually or annually. Withdrawals may be made from a designated portfolio
or proportionally from all portfolios. Withdrawals must be in a specified amount
rather than a percentage

13
<PAGE>

of the amount in the portfolio. Withdrawal charges may apply if the withdrawals
in any Contract year exceed the withdrawal-free amount.

A withdrawal will generally have federal income tax consequences, which could
include tax penalties. The Contract owner should consult with a tax advisor
before making a withdrawal.

Death Benefit. If the annuitant should die before he or she has begun to receive
annuity payments, a death benefit, calculated as of the date due proof of death
is received by The Prudential, will be payable to the beneficiary you designate.
Unless the retirement arrangement that covered you provides otherwise, the
beneficiary will have the right to elect to receive this amount without the
imposition of any sales charge or any further annual maintenance charge, in one
sum, in periodic payments, in the form of a lifetime annuity or in a combination
of these ways. Payments will begin once The Prudential receives all information
necessary to process the claim. If the death benefit is payable as a result of
your coverage under a qualified pension plan, IRA, SEP or tax-deferred annuity,
your entire death benefit must be distributed within 5 years after your date of
death. However, if an annuity payment option is elected, and if annuity payments
begin within one year of your death, the death benefits may be distributed over
the beneficiary's life expectancy. If your spouse is your beneficiary, annuity
payments need only begin on or before April 1 of the calendar year following the
calendar year in which you would have attained age 70 1/2 or in some instances,
the remaining interest in the Contract may be rolled over to an IRA owned by
your spouse. With respect to Contracts issued in connection with IRAs, if your
spouse is the designated beneficiary, the Contract may continue with your spouse
treated as the employee. If you die after you have begun to receive annuity
payments as a result of your coverage under a qualified pension plan, IRA, SEP
or tax-deferred annuity, but before your entire interest in the Contract is
distributed, the remaining portion of your interest in the Contract must be
distributed at least as rapidly under the method of distribution being used as
of your date of death. Special additional rules apply to Contracts used in
conjunction with plans subject to Section 457 of the Code. Subject to the terms
of the retirement arrangement, if the beneficiary fails to make any election
within any time limit prescribed by or for the retirement arrangements that
covered the Contract owner, The Prudential will make a one-sum cash payment to
the beneficiary, after deduction of the annual account charge then due. The
death benefit will equal the greatest of: (1) the purchase payments made plus
any bonus credited by The Prudential, reduced by any previous withdrawal(s) in
the same proportion that such withdrawal(s) reduced the Contract fund on the
withdrawal date(s); (2) the Contract fund as of the date the Prudential Home
Office receives due proof of death; and (3) the amount that would have been
payable as determined above if the insured had died as of the sixth Contract
anniversary.

Under certain types of retirement arrangements, the Retirement Equity Act of
1984 provides that in the case of a married Participant, a pre-retirement
survivor annuity be paid to the Participant's spouse if the Participant dies
prior to his or her retirement under the plan. A Participant may waive this
coverage with his or her spouse's consent on or after attaining age 35 or upon
termination of employment, if earlier. This consent must contain the signatures
of the Participant and spouse and must be notarized or witnessed by an
authorized plan representative. Unless such consent is obtained, the law
requires that at least 50% of the Participant's account balance as of his or her
date of death be used to purchase a life annuity form of payment for the
Participant's spouse even if the designated beneficiary is someone other than
the spouse. These spousal consent requirements were generally effective
beginning January 1, 1985 and apply to married vested Participants in most
qualified pension plans, including plans for self-employed individuals, and
those Section 403(b) annuities which are considered employee pension benefit
plans under ERISA. Subject to these spousal consent rules, unless the
beneficiary has been irrevocably designated, the owner may change the
beneficiary at any time.

Valuation of a Contract Owner's Contract Fund. The value of a Contract owner's
Contract fund is the sum of his or her interests in the variable investment
options and in the fixed-rate option. The portion of the Contract fund allocated
to the Account is the sum of the interests in each subaccount. The values are
measured in Units, for example, Money Market Units, Bond Units or Aggressively
Managed Flexible Units. Every purchase payment made by an owner is converted
into Units of the subaccount or subaccounts selected by dividing the amount of
the purchase payment by the Unit Value for the subaccount to which that amount
has been allocated. The value of these Units changes each valuation period to
reflect the investment results, expenses, and charges of the subaccount and the
corresponding Series Fund portfolio. Further detail about Units is contained in
the statement of additional information.

There is, of course, no guarantee that an owner's Contract fund will increase or
that it will not fall below the amount of the owner's total purchase payments.
However, The Prudential guarantees a minimum interest rate of 3.1% a year on
that portion of the Contract fund allocated to the fixed-rate option. Excess
interest on payments allocated to the fixed-rate option may be credited in
addition to the guaranteed interest rate. See THE FIXED-RATE OPTION, page 17.
The valuation of the portion of the Contract fund held in the Real Property
Account is described in the attached prospectus for the Real Property Account.

14
<PAGE>

CHARGES, FEES, AND DEDUCTIONS

1. Premium Taxes. A charge may be deducted for taxes attributable to premiums.
For these purposes, "taxes attributable to premiums" shall include any state or
local premium taxes and, where approval has been obtained, any federal premium
taxes and any federal, state or local income, excise, business or any other type
of tax (or component thereof) measured by or based upon the amount of premium
received by The Prudential. In some states a premium tax is imposed on purchase
payments. In several other states a premium tax is payable when a Contract fund
is converted into an annuity. The tax rates currently in effect in those states
that impose a tax range from 1% to 5%. Some local jurisdictions also impose a
tax. In states where approval has been obtained, a charge of 0.3% for federal
income taxes measured by premiums may be imposed upon each purchase payment
received under the Contract. This charge is not imposed on Contracts issued in
connection with tax favored retirement plans. On any Contract subject to premium
tax, the tax will be deducted either from the purchase payment when received
(except as provided below) or from the Contract fund at the time the annuity is
effected according to the state law applicable at the time of payment or
annuitization.

A deduction for any such taxes imposed on purchase payments will not be made,
however, except to the extent that the total tax attributable to premiums is in
excess of 4% when: (1) a Contract owner's total purchase payments, less any
purchase payments withdrawn, equal or exceed $50,000; or (2) a Contract owner
purchases separate Contracts for each of his or her children or grandchildren as
annuitants, each Contract has purchase payments totalling at least $25,000, and
total purchase payments, less any purchase payments withdrawn, equal or exceed
$50,000.

2. Sales Charges on Withdrawals. A contingent deferred sales charge may be
imposed on the withdrawal of purchase payments. The charge compensates The
Prudential for paying all of the expenses of selling and distributing the
Contracts, including sales commissions, printing of prospectuses, sales
administration, preparation of sales literature, and other promotional
activities. There is no sales charge on the withdrawal of investment income. No
sales charge will be imposed if the Contract is surrendered due to the death of
the annuitant.

The sales charge will be applied as a percentage of the amount of a purchase
payment withdrawn within 6 Contract years following the payment, allowing for a
10% yearly free withdrawal privilege. The percentage charged will vary from 4%
to 7% depending on how soon the withdrawal occurs from the date the purchase
payment was made. Any amount that the owner withdraws will first be treated for
the purpose of calculating this sales charge as a withdrawal of investment
income until an amount equal to the Contract's total investment income has been
withdrawn. For the purpose of determining sales charges, further withdrawals
will be considered withdrawals of purchase payments. Purchase payments are
deemed to be withdrawn on a first-in, first-out basis. The amount of any sales
charge will depend on the amount of purchase payments withdrawn and the number
of Contract years that has elapsed since the owner made the particular purchase
payment. The sales charge will be determined without reference to the source of
the withdrawal.

In a Contract year when sales charges apply (the first 6 Contract years
following a purchase payment), the withdrawal of an amount up to 10% of the
Contract fund may be made without incurring a sales charge. This is so even if
partial withdrawals have been made in previous years. This charge-free
withdrawal amount does not accumulate from Contract year to Contract year. In
the first 6 years following a purchase payment, a sales charge will apply to any
part of a withdrawal of a purchase payment in each year which is in excess of
10% of the Contract fund as of the date of the first withdrawal in that Contract
year.

In addition, for non-qualified contracts and qualified contracts issued on or
after May 1, 1993, the following will apply: based on regulatory approval of the
Waiver of Withdrawal Charges endorsement ("Critical Care Access"), all or part
of any withdrawal and maintenance charges associated with a full or partial
withdrawal, or any annuitization or withdrawal charge due on the annuity date,
will be waived following the receipt of due proof that the annuitant or
co-annuitant (if applicable) has been confined to an eligible nursing home or
hospital for a period of at least 3 months or a physician has certified that the
annuitant or co-annuitant (if applicable) has 6 months or less to live.

If an owner withdraws all or part of a purchase payment before the end of the
Contract year during which it was made, the sales charge will be 7% of the
purchase payment withdrawn, after deducting the 10% free withdrawal amount. The
sales charge imposed on the withdrawal of a purchase payment during the 2
Contract years following the Contract year in which the purchase payment was
made is 7% and then decreases in the 3rd, 4th, and 5th years following the year
in which the payment was made, in accordance with the following table:

15
<PAGE>

For Withdrawals Of Purchase The Sales Charge Will Be Equal To The Following
Payments During The Contract Year Indicated Percentage Of The Purchase Payment Withdrawn (a)
------------------------------------------- ------------------------------------------------
<S> <C>

Contract Year In Which Payment Made ................................................... 7%
First Contract Year Following Year in Which Payment Made .............................. 7%
Second Contract Year Following Year in Which Payment Made ............................. 7%
Third Contract Year Following Year in Which Payment Made .............................. 6%
Fourth Contract Year Following Year in Which Payment Made ............................. 5%
Fifth Contract Year Following Year in Which Payment Made .............................. 4%
Subsequent Contract Years ............................................................. No Charge
- ---------------
(a) Subject to 10% free withdrawal described above.

</TABLE>

For purchase payments made on and after the annuitant's 81st birthday, the sales
charge percentages described in the above table for withdrawals of such purchase
payments will be subject to reduction based on reductions in costs for purposes
of complying with state non-forfeiture laws.

The owner's withdrawal request should specify the source from which the
withdrawal is to be made. Otherwise, the withdrawal, subject to minimum amount
requirements, will be allocated to the investment option[s] in which the
Contract fund is invested in the same proportions as the value of the interests
in these options bears to the total value of the owner's Contract fund.

Amounts used for the purpose of effecting an annuity or the interest payment
option are subject to the withdrawal charges described above. See EFFECTING AN
ANNUITY, page 22. However, this charge will not be deducted if a life annuity or
fixed term annuity of 10 years or greater is effected after the first Contract
year.

To the extent that the contingent deferred sales charge is insufficient to
recover all distribution expenses associated with the Contracts, the deficiency
will be met from The Prudential's surplus which is, in part, derived from the
charges for the assumption of mortality and expense risks (described in item 5
below) and from mortality gains from Contracts under which annuity payments are
being made.

3. Recapture of Additional Amounts. If an owner makes a withdrawal which
consists partially or wholly of purchase payments, The Prudential may recapture
the additional amounts that were credited to the Contract fund based on those
payments. If the duration from the start of the Contract year in which a
purchase payment was made to the start of the Contract year of withdrawal is
less than 6 years (except as provided below, this includes withdrawals made for
the purpose of applying some or all of the Contract fund to effect an annuity),
The Prudential will recapture the additional amounts originally credited upon
the portion of the purchase payments being withdrawn. The Prudential will not
recapture additional amounts credited upon the portion of the purchase
payment[s] withdrawn if such withdrawal is used to effect an annuity that is not
subject to a sales charge or is the result of a withdrawal where surrender
charges have been waived due to confinement in a nursing home or hospital, or
due to a terminal illness. See Sales Charges on Withdrawals, page 15.

4. Administrative Charge. There are two possible charges imposed under the
Contracts to reimburse The Prudential for the expenses it incurs in
administering the Contracts, which include such things as issuing the Contract,
establishing and maintaining records, and providing reports to Contract owners.
These are an annual maintenance charge and a daily administrative charge. An
annual maintenance charge of $30 will be deducted if and only if the Contract
fund is less than $10,000 on a Contract anniversary or at the time a full
withdrawal is effected. This $30 fee will not be charged if the Contract fund is
less than $10,000 as a result of a withdrawal due to confinement in a nursing
home or hospital, or due to a terminal illness, as applied under the Waiver of
Withdrawal Charges endorsement. See Sales Charges on Withdrawals, page 15.
Otherwise, no annual maintenance charge will be made. This charge is not made
after annuitization and may not be increased by The Prudential.

The daily administrative charge will be assessed by deducting, from the assets
of each of the variable investment options, a percentage of those assets
equivalent to an effective annual rate of up to 0.2% (.00054740%, daily). This
administrative charge is guaranteed never to be increased above an effective
annual rate of 0.2% over the life of the Contracts, and is intended to cover the
average anticipated administrative expenses to be incurred over the periods
these Contracts are in force. This fee contains no element of anticipated
profit. Because the administrative charge is a percentage of assets, however,
there is no necessary relationship between the amount of administrative charge
imposed on a given Contract and the amount of expenses that may be attributable
to that Contract.

5. Charge for Assuming Mortality and Expense Risks. In addition to the sales and
administrative charges described above, a deduction is made daily from each of
the variable investment options to reimburse The Prudential for assuming the
risk that its estimates of longevity and of the expenses it expects to incur,
over the lengthy periods that the Contract may be in effect--estimates that are
the basis for the level of the other charges it makes and

16
<PAGE>

the annuity purchase rates it guarantees under the Contract--will turn out to be
incorrect. The charge will be made daily at an annual rate of up to 1%
(.00272616%, daily) of the assets held in the variable investment options. Of
this amount, 0.3% is for assuming the risk that the charges made under the
Contracts may not cover administrative expenses, and 0.7% is for assuming
mortality risks. This charge is not assessed against amounts allocated to the
fixed-rate option or after a fixed-dollar annuity is effected.

To the extent that the charge for these risks exceeds the actual cost of
expenses and benefits, The Prudential will realize a gain. These proceeds will
become part of The Prudential's general account and will be available to cover
any deficiency to the extent to which deferred sales charges cover sales
expenses under the Contracts.

6. Expenses Incurred by the Series Fund. The charges and expenses of the Series
Fund, net of reimbursements, are indirectly borne by the Contract owners.
Investment management fees for the available Series Fund portfolios are briefly
described under The Prudential Series Fund, Inc. on page 10. Further detail
about management fees and other Series Fund expenses is provided in the attached
prospectus for the Series Fund and its statement of additional information.
Higher charges and expenses are incurred if the Real Property Account is
selected, as described in the prospectus for the Real Property Account that is
attached to this one.

THE FIXED-RATE OPTION

Because of exemptive and exclusionary provisions, interests in the fixed-rate
option under the Contract have not been registered under the Securities Act of
1933 and the general account has not been registered as an investment company
under the Investment Company Act of 1940. Accordingly, interests in the
fixed-rate option are not subject to the provisions of these Acts, and The
Prudential has been advised that the staff of the Securities and Exchange
Commission has not reviewed the disclosure in this prospectus relating to the
fixed-rate option. Disclosure regarding the fixed-rate option may, however, be
subject to certain generally applicable provisions of federal securities laws
relating to the accuracy and completeness of statements made in prospectuses.

As explained earlier, a Contract owner may elect to allocate, either initially
or by transfer, all or part of the amount credited under the Contract to a
fixed-rate option, and the amount so allocated or transferred becomes part of
The Prudential's general assets. Sometimes this is referred to as The
Prudential's general account, which consists of all assets owned by The
Prudential other than those in the Account and in other separate accounts that
have been or may be established by The Prudential. Subject to applicable law,
The Prudential has sole discretion over the investment of the assets of the
general account, and Contract owners do not share in the investment experience
of those assets. Instead, The Prudential guarantees that the part of the
Contract fund allocated to the fixed-rate option will accrue interest daily at
an effective annual rate that The Prudential declares periodically, but not less
than an effective annual rate of 3.1%. Currently, declared interest rates remain
in effect from the date money is allocated to the fixed-rate option until that
same date three years following the date of the allocation. Thereafter, a new
crediting rate will be declared each year, and will remain in effect for at
least the calendar year, so long as required by applicable law. The Prudential
reserves the right to change this practice. The Prudential is not obligated to
credit interest at a higher rate than 3.1% where state approved (otherwise 4%),
although in its sole discretion it may do so. Different crediting rates may be
declared for different portions of the Contract fund allocated to the fixed-rate
option. On request, a Contract owner will be advised of the interest rates that
currently apply to his or her Contract.

Transfers from the fixed-rate option are subject to strict limits. See
Transfers, page 13.

FEDERAL TAX STATUS

The following discussion is general in nature. It is not intended as tax advice.
Nor does it consider any applicable state or other tax laws. A qualified tax
advisor should be consulted for complete information and advice. The discussion
is based on current laws and interpretations, which may change.

The following rules do not generally apply to annuity Contracts held by or for
non-natural persons (e.g., corporations). For special rules relating to
contracts issued in connection with tax qualified plans, IRAs, TDA's and Section
457 plans, see Contracts Used in Connection with Tax Favored Plans below. Where
a contract is held by a non-natural person, unless the Contract owner is a
nominee or agent for a natural person (or in other limited circumstances), the
Contract will generally not be treated as an annuity for tax purposes, and
increases in the value of the Contract will be subject to current tax.

The following discussion assumes that the Contract will be treated as an annuity
for federal income tax purposes. Section 817(h) of the Internal Revenue Code
(the "Code") provides that the underlying investments for a variable annuity
must satisfy certain diversification requirements. For further details on
diversification requirements, see DIVIDENDS, DISTRIBUTIONS, AND TAXES in the
attached prospectus for the Series Fund. The Prudential believes

17
<PAGE>

the underlying variable investment options for the Contract meet these
diversification requirements. In connection with the issuance of temporary
regulations relating to diversification requirements under Section 817(h), the
Treasury Department announced that such regulations do not provide guidance
concerning the extent to which Contract owners may direct their investments to
particular divisions of a separate account. Such guidance will be included in
regulations or revenue rulings under Section 817(d) relating to the definition
of a variable contract. Because of this uncertainty, The Prudential reserves the
right to make such changes as it deems necessary to assure that the Contract
continues to qualify as an annuity for tax purposes. Any such changes will apply
uniformly to affected Contract owners and will be made with such notice to
affected Contract owners as is feasible under the circumstances.

Under current law The Prudential believes that the Contract will be treated as
an annuity for federal income tax purposes and that the issuing insurance
company, The Prudential, and not the Contract owner, will be treated as the
owner of the underlying investments for the Contract. Accordingly, no tax should
be payable by any Contract owner as a result of any increase in the value of the
Contract until money is received by him or her, either in the form of a cash
withdrawal or as an annuity. It is important, however, to consider how amounts
that are withdrawn will be taxed.

Taxes Payable by Contract Owners. The Code generally provides that amounts
withdrawn by a Contract owner from his or her Contract, before annuity payments
begin, will be treated for tax purposes as being first withdrawals of investment
income, rather than as withdrawals of purchase payments, until all investment
income has been withdrawn. Except to the extent provided under the terms of your
retirement plan, the assignment or pledge (or agreement to assign or pledge) any
portion of the value of the Contract for a loan shall be treated as a withdrawal
subject to this rule. In the case of a Contract purchased in connection with a
tax favored plan, withdrawals are generally pro-rated between investment income
and purchase payments that were not attributable to contributions excludible
from an employee's income (or deductible in the case of an IRA). In many cases,
the amount of such purchase payments will be zero and hence the total withdrawal
will be taxable as ordinary income. Amounts withdrawn before annuity payments
begin which represent a distribution of investment income will be taxable as
ordinary income and may be subject to a penalty tax. Amounts which represent a
withdrawal of purchase payments will ordinarily not be taxable as ordinary
income or be subject to a penalty tax.

All contracts issued after October 21, 1988 by the same company (and affiliates)
to the same contract owner during any calendar year are treated as one annuity
contract for purposes of determining the amount includible in income of any
distribution that is not received as an annuity payment. In the case of an IRA
or TDA, the Code requires that all IRAs or TDA's be treated as one contract for
purposes of calculating the taxable portion of distributions. However, under IRS
regulations the minimum distribution requirement may be satisfied by making a
distribution from any IRA or TDA equal to the sum of the minimum distribution
amounts required for each IRA or TDA owned by the contract owner without the
need to make a minimum withdrawal from each IRA or TDA owned.

The Code further provides that taxable withdrawals may be subject to a penalty
tax. The amount of the penalty is equal to 10% of that portion of the amount
withdrawn that is includible in income. Some withdrawals will be exempt from the
penalty. Some examples are withdrawals: (1) made on or after the Contract owner
reaches age 59 1/2, (2) made on or after the death of the Contract owner, (3)
attributable to the Contract owner becoming disabled within the meaning of Code
section 72(m)(7), (4) in the form of level annuity payments, made not less
frequently than annually under a lifetime annuity, (5) allocable to investment
in the contract before August 14, 1982, (6) under a qualified funding asset
(defined by Code section 130(d)), or (7) under an immediate annuity contract
(within the meaning of section 72(u)(4)). Exceptions (5) through (7) only apply
to contracts that are not purchased in connection with a tax favored plan. In
the case of a Contract purchased in connection with a tax favored plan, a 50%
excise tax is imposed on the amount by which minimum required distributions
exceed actual distributions. Penalty taxes are also imposed on excess
contributions to most tax favored plans or aggregate distributions from most tax
favored plans in excess of a specified amount and in certain other
circumstances.

If the 10% penalty tax does not apply to a withdrawal by reason of the exception
for withdrawals in the form of a level annuity (clause (4) above), but the
series of payments is modified (other than by reason of death or disability),
either (a) before the end of the 5-year period beginning with the first payment
and after the Contract owner reaches age 59 1/2, or (b) before the Contract
owner attains age 59 1/2, the Contract owner's tax for the year of the
modification will be increased by the penalty tax that would have been imposed
without the exception, plus interest for the deferral period.

Where a contract is issued in exchange for a contract containing purchase
payments made before August 14, 1982, favorable tax rules may apply to certain
withdrawals from the contract. Consult a tax advisor for information regarding
these rules.

Different tax rules apply to receipt of annuity payments. A portion of each
annuity payment received under a Contract will be treated as a partial return of
the purchase payments and will not be taxable. The remaining portion

18
<PAGE>

of the annuity payment will be taxed as ordinary income. Exactly how an annuity
payment is divided into taxable and non-taxable portions depends upon the period
over which annuity payments are expected to be received, which in turn is
governed by the form of annuity selected and, where a lifetime annuity is
chosen, by the life expectancy of the annuitant. In the case of Contracts under
which annuity payments commence after 1986, annuity payments which are received
after the annuitant recovers the full amount of the purchase payments will be
fully includible in income. Should annuity payments cease on account of the
death of the annuitant before the purchase payment has been fully recovered, the
annuitant, on his or her last tax return, (or in certain cases the beneficiary),
is allowed a deduction for the unrecovered amount. As noted above, the cost
basis for Contracts purchased in connection with a tax favored plan is often
zero and in such cases, each annuity payment will be fully taxable. A lump sum
payment taken in lieu of remaining annuity payments is not considered an annuity
payment for tax purposes. Any such lump sum payment distributed to an annuitant
generally would be taxable as ordinary income and may be subject to a penalty
tax as described above. However, special averaging rules may apply in the case
of a lump sum distribution from a qualified plan.

Generally, the same tax rules apply to amounts received as a death benefit by
the beneficiary as those set forth above with respect to the Contract owner,
except that the early withdrawal penalty tax does not apply. The election of an
annuity payment option by the beneficiary may defer taxes otherwise payable upon
the receipt of a lump sum death benefit. Certain minimum distribution
requirements apply in the case where the owner dies before annuity payments
begin. See IRS Required Distributions on Death of Owner in the Statement of
Additional Information.

In addition, a transfer of the Contract to or the designation of a beneficiary
who is either 37 1/2 years younger than the Contract owner or a grandchild of
the Contract owner may have Generation Skipping Transfer tax consequences under
section 2601 of the Code.

Certain transfers of a Contract for less than full consideration, such as a
gift, will trigger tax on the investment income in the Contract. This rule does
not apply to certain transfers between spouses or incident to divorce. See
Ownership of the Contract, page 24.

Contracts Used in Connection with Tax Favored Plans. The Contract may be
purchased for use in connection with various retirement arrangements entitled to
favorable federal income tax treatment ("tax favored plans"). These are
individual retirement accounts and annuities ("IRAs") subject to Sections 408(a)
and 408(b) of the Code, simplified employee pension plans ("SEPs") under Section
408(k) of the Code, tax deferred annuities ("TDA's") under Section 403(b) of the
Code, deferred compensation plans of state and local governments and tax exempt
organizations under Section 457 of the Code, and pension, profit sharing and
annuity plans qualified under Sections 401(a) and 403(a) of the Code. Such
plans, accounts, and annuities must satisfy certain requirements of the Code in
order to be entitled to the federal income tax benefits accorded to these plans.
A discussion of these requirements is beyond the scope of this prospectus, and
it is assumed that such requirements are met with respect to a Contract
purchased for use in connection with a tax favored plan.

In general, assuming the requirements and limitations of the Code provisions
applicable to the particular type of tax favored plan involved are satisfied,
purchase payments (other than after-tax employee payments) under the Contract
will be deductible (or not includible in income) up to certain amounts each year
and tax will not be imposed on the investment income and realized gains of the
subaccounts in which the purchase payments have been invested until a
distribution is received. Persons contemplating the purchase of a Contract in
connection with a tax favored plan should consult their tax advisor before
purchasing a Contract for such purposes.

The comments which follow concerning specific tax favored plans are intended
merely to call attention to certain of their features. No attempt has been made
to discuss in full the tax ramifications involved or to offer tax advice. As
suggested above, a qualified tax advisor should be consulted for advice and
answers to any questions.

Plans For Self-Employed Individuals. For self-employed individuals who establish
qualified plans, contributions are deductible within the limits prescribed by
the Code. Annual deductible contributions cannot exceed the lesser of $30,000 or
25% of "earned income". For this purpose "earned income" is computed after the
deduction for contributions to the plan is considered.

Under such tax qualified plans, payments generally may not begin before
Participants attain age 59 1/2 (except in the event of total disability or
death, if authorized by the plan). Payments must begin by April 1 of the year
following attainment of age 70 1/2 and are subject to certain minimum
distribution requirements. Any distribution to employees before age 59 1/2 may
result in certain tax penalties.

IRAs. The Code permits persons who receive certain qualifying distributions from
a qualified pension or profit-sharing plan, TDA or IRA to make, within 60 days,
a tax-free "rollover" transfer of all or any part of the amount of such
distribution to an IRA which they establish. Additionally, the spouse of a
deceased employee may roll over to an IRA certain distributions received by the
spouse from a qualified pension or profit-sharing plan, TDA or IRA on account of
the employee's death.

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Because the Contract's minimum initial payment of $10,000 is greater than the
maximum annual contribution permitted to be made to an IRA (generally, $2,000),
a Contract may be purchased as a Section 408(b) IRA only in connection with a
"rollover" of the proceeds of a qualified plan, TDA or IRA. In order to qualify
as an IRA under Section 408(b) of the Code, a Contract must contain certain
provisions: (1) the owner of the Contract must be the annuitant, except when a
transfer is made to a former spouse in accordance with a divorce decree as
provided in Section 408(d)(6) of the Code; (2) the rights of the owner cannot be
forfeitable; (3) generally, the Contract may not be sold, assigned, discounted
or pledged for any purpose to any person except The Prudential; (4) except in
the case of a "rollover" contribution, the annual premium may not exceed $2,000;
(5) generally, the annuity date may be no later than April 1st of the calendar
year following the calendar year in which the annuitant attains age 70 1/2; and
(6) annuity and death benefit payments must satisfy certain minimum distribution
requirements. Contracts issued as Section 408(b) IRAs will conform to such
requirements.

SEPs. Under a SEP, annual employer contributions to an IRA established by an
employee are not includible in income up to the lesser of $30,000 or 15% of the
employee's earned income (excluding the employer's contribution to the SEP). In
addition, a SEP must satisfy certain minimum participation requirements and
contributions may not discriminate in favor of highly compensated employees.
Contracts issued as Section 408(b) IRAs established under a SEP must satisfy the
requirements described above for a Section 408(b) IRA.

Certain SEP arrangements are permitted to allow employees to elect to reduce
their salaries by as much as $9,240 (in 1994, indexed annually) and have their
employer make contributions on their behalf to the SEP. These arrangements,
called salary reduction SEPs, are available only if the employer maintaining the
SEP has 25 or fewer employees and at least 50% of the eligible employees elect
to make salary reduction contributions. Other limitations may reduce the
permissible contribution level for highly compensated employees.

In accordance with IRS regulations, persons who purchase a Contract used as an
IRA, including one established under a SEP arrangement, are given disclosure
material prepared by The Prudential. The material includes this prospectus, a
copy of the Contract, and a brochure containing information about eligibility,
contribution limits, tax consequences, and other particulars concerning IRAs.
The regulations require that such persons be given 7 days after making an
initial contribution in which to affirm or reverse their decision to
participate. Therefore, within 7 days after establishing the Contract, a person
may cancel his or her Contract by notifying The Prudential in writing, and The
Prudential will refund all of the purchase payments under the Contract or, if
greater, the amount credited under the Contract (less any bonus) computed as of
the valuation period that The Prudential receives the notice for cancellation.
This 7-day period may or may not coincide with any part of the 10-day free look
period described under Short-Term Cancellation Right or "Free Look", page 12.

TDA's. Section 403(b) of the Code permits employers and employees of Section
501(c)(3) tax-exempt organizations and public educational organizations to make,
subject to certain limitations, contributions to an annuity in which the
employee's rights are nonforfeitable (commonly referred to as a "tax deferred
annuity"). The amounts contributed under a TDA and increments thereon are not
taxable as income until distributed as annuity income or otherwise. Generally,
contributions to a TDA may be made through a salary reduction arrangement up to
a maximum of $9,500. However, under certain special rules, the limit could be
increased as much as $3,000. In addition, the Code permits certain total
distributions from a TDA to be "rolled over" to another TDA or IRA. Certain
partial distributions from a TDA may be "rolled over" to an IRA.

An annuity contract will not qualify as a TDA, unless under such contract
distributions from salary reduction contributions and earnings thereon (other
than distributions attributable to assets held as of December 31, 1988) may be
paid only on account of attainment of age 59 1/2, severance of employment,
death, total and permanent disability and, in limited circumstances, hardship.
(Such hardship withdrawals are permitted, however, only to the extent of salary
reduction contributions and not earnings thereon).

The Section 403(b)(11) withdrawal restrictions referred to above do not apply to
the transfer of all or part of a Contract owner's interest in his or her
Contract among the available investment options offered by The Prudential or to
the direct transfer of all or part of the Contract owner's interest in the
Contract to a Section 403(b) tax-deferred annuity contract of another insurance
company or to a mutual fund custodial account under Section 403(b)(7) of the
Code.

In imposing the restrictions on withdrawals as described above, The Prudential
is relying upon a no-action letter dated November 28, 1988 from the Chief of the
Office of Insurance Products and Legal Compliance of the Securities and Exchange
Commission to the American Council of Life Insurance.

Employer contributions are subject generally to the same coverage, minimum
participation and nondiscrimination rules applicable to qualified pension and
profit-sharing plans. Distributions from a TDA attributable to benefits accruing
after December 31, 1986 must commence by April 1 of the calendar year following
the year in which an employee attains age 70 1/2. However, for governmental and
church plans, distributions may be delayed until April 1 of the calendar year
following the calendar year the participant retires if that is later.
Distributions must satisfy minimum distribution requirements similar to those
that apply to qualified plans generally.

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Eligible Deferred Compensation Plans of State or Local Governments and Tax
Exempt Organizations. A Contract may be used to fund an eligible deferred
compensation plan of a state or local government or a tax-exempt organization.
The amounts contributed under such plans and increments thereon are not taxable
as income until distributed or otherwise made available to the employee or other
beneficiary. If the requirements of Section 457 of the Code are not met,
however, employees may be required to include in gross income all or part of the
contributions and earnings thereon. The assets of deferred compensation plans
are part of the employer's general assets. Contributions generally may not
exceed the lesser of $7,500 or 33 1/3% of the employee's compensation.
Distributions must begin by April 1 of the year following attainment of age
70 1/2. However, for governmental and church plans, distributions may be delayed
until April 1 of the calendar year following the calendar year the participant
retires if that is later. Distributions are subject to special minimum
distribution rules.

Qualified Pension and Profit Sharing Plans. A Contract may be used to fund a
qualified pension or profit-sharing plan. The plan itself must satisfy the
coverage, minimum participation nondiscrimination and minimum distribution and
all other requirements applicable generally to qualified pension and
profit-sharing plans. The Code also imposes dollar limitations on contributions
that may be made to or benefits that may be received from a qualified pension or
profit-sharing plan (including a limitation of $9,240 (in 1994, indexed
annually) on the amount that an employee may contribute through a salary
reduction arrangement in the case of a plan with a qualified "cash or deferred"
arrangement). Generally, distributions from a qualified plan must begin by April
1 of the year following attainment of age 70 1/2. However, for governmental and
church plans, distributions may be delayed until April 1 of the calendar year
the participant retires, if that is later. Distributions are subject to certain
minimum distribution requirements.

Minimum Distribution Option. The Minimum Distribution Option is a program
available with IRA and SEP programs. It enables the client to satisfy IRS
minimum distribution requirements, without having to annuitize or cash surrender
their Contracts. Distributions from IRAs and SEPs must begin by April 1 of the
year following attainment of age 70 1/2. Each year until the maturity date, The
Prudential will recalculate the minimum amount the Contract owner is required to
withdraw from his or her IRA or SEP. The Prudential will send the Contract owner
a check for the minimum distribution amount less any partial withdrawals made
during the year. The Prudential's calculations are based solely on the cash
value of the Contract. If the Contract owner has other IRA accounts, he or she
will be responsible for taking the minimum distribution from each.

Withholding. Certain distributions from qualified retirement plans and 403(b)
annuities will be subject to mandatory 20% withholding unless the distribution
is an eligible rollover distribution that is "directly" rolled over into another
qualified plan, 403(b) annuity or IRA. Unless the Contract owner elects to the
contrary, the portion of any taxable amounts received under the Contract (except
for Contracts issued in connection with plans that are subject to Section 457 of
the Code) will be subject to withholding to meet federal income tax obligations.
The rate of withholding on annuity payments where mandatory withholding is not
required will be determined on the basis of the withholding certificate filed by
the Contract owner with The Prudential. For payments not subject to mandatory
withholding, if no such certificate is filed, the Contract owner will be
treated, for purposes of determining the withholding rate, as a married person
with three exemptions; the rate of withholding on all other payments made under
the Contract, such as amounts received upon withdrawals, will be 10%. Thus, if
the Contract owner fails to elect that there be no withholding, The Prudential
will withhold from every withdrawal or annuity payment the appropriate
percentage of the amount of the payment that is taxable. The Prudential will
provide the Contract owner with forms and instructions concerning the right to
elect that no amount be withheld from payments. Recipients who elect not to have
withholding made are liable for payment of federal income taxes on the taxable
portion of the distribution. All recipients may be subject to penalties under
the estimated tax payment rules if withholding and estimated tax payments are
not sufficient. Contract owners who do not provide a social security number or
other taxpayer identification number will not be permitted to elect out of
withholding. Generally, there will be no withholding for taxes until payments
are actually received under the Contract. Distributions to Contract owners under
an eligible deferred compensation plan subject to Section 457 of the Code are
treated as the payment of wages for federal income tax purposes and thus are
subject to the general withholding requirements.

Taxes on The Prudential. Although the Account is registered as an investment
company, it is not a separate taxpayer for purposes of the Code. The earnings of
the Account are taxed as part of the operations of The Prudential. No charge is
being made currently against the Account for Company federal income taxes
(excluding the charge for taxes attributable to premiums). The Prudential will
review the question of a charge to the Account for Company federal income taxes
periodically. Such a charge may be made in future years for any federal income
taxes that would be attributable to the Contract.

Under current law, The Prudential may incur state and local taxes (in addition
to premium taxes) in several states. At present, these taxes are not significant
and they are not charged against the Contract or the Account. If there is a
material change in applicable state or local tax laws, the imposition of any
such taxes upon The Prudential that are attributable to the Account may result
in a corresponding charge against the Account.

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ERISA Disclosure. The Employee Retirement Income Security Act of 1974 ("ERISA")
prevents a fiduciary with respect to a pension or profit-sharing plan from
receiving any benefit from any party dealing with the plan as a result of the
sale of the Contract (other than benefits that would otherwise be provided in
the plan).

Administrative exemptions issued by the IRS and the Department of Labor under
ERISA permit transactions between insurance agents and qualified pension and
profit sharing plans under Sections 401(a) and 403(a) of the Code and with SEP
IRAs. To be able to rely on the exemption certain information must be disclosed
to the plan fiduciary. The information that must be disclosed includes the
relationship between the agent and the insurer, a description of any charges,
fees, discounts, penalties or adjustments that may be imposed in connection with
the purchase, holding, exchange or termination of the Contract, as well as the
commissions received by the agent. Information about any applicable charges,
fees, discounts, penalties or adjustments may be found under CHARGES, FEES AND
DEDUCTIONS, page 15. Information about sales representatives and commissions may
be found under Sale of the Contract and Sales Commissions, page 24. In addition
to disclosure, other conditions apply to the use of the exemption. For example,
a plan fiduciary may not be a partner or employee of The Prudential
representative making the sale. The fiduciary must not be a relative of the
representative (including spouse, direct descendant, spouse of a direct
descendant, ancestor, brother, sister, spouse of a brother or sister). The
representative may not be an employee, officer, director or partner of either
the independent fiduciary or the employer establishing the plan. No relative of
the representative may: (1) control, directly or indirectly, the corporation
establishing or maintaining the plan; (2) be either a partner with a 10% or more
interest in the partnership or the sole proprietor establishing or maintaining
the plan; or (3) be an owner of a 5% or more interest in a Subchapter S
Corporation establishing or maintaining the plan. In addition, no affiliate
(including relatives) of the representative may be a trustee, administrator or a
fiduciary with written authority to acquire, manage or dispose of the assets of
the plan.

Additional ERISA Requirements. If your retirement arrangement is a plan governed
by ERISA, additional requirements such as spousal consent to distributions may
be necessary. Consult the terms of your retirement arrangement.

EFFECTING AN ANNUITY

Upon the annuity date, the amount credited under a Contract (which includes any
amount allocated to the fixed-rate option as well as to the variable investment
options) is converted into a fixed-dollar annuity payable to the annuitant[s]
named in the Contract. If two annuitants are named in the Contract, the Contract
owner may decide how much of the amount is to be applied for each annuitant and
under which form[s] of annuity. If the Contract is not large enough to produce a
monthly payment of $50, the Contract owner will be paid the cash surrender value
in a single sum.

When a Contract owner requests a withdrawal in the form of an annuity, all
amounts held in the investment options will be withdrawn 7 days prior to the end
of the month in which the request is made or the end of a subsequent month
designated by the owner. An amount equal to the withdrawal charge, if any, and
any additional amount subject to recapture, will be deducted. An amount equal to
the premium tax, if any, imposed by the state in which the annuitant resides is
then deducted (unless deducted earlier). Many states do not impose a premium
tax. In other states the tax ranges from 1% to 5% of the amount applied to
effect an annuity. See Premium Taxes, page 15. Some local jurisdictions also
impose a tax. The amount remaining is applied to effect an annuity. This amount
becomes part of The Prudential's general account.

The amount of the monthly payments will depend upon the amount applied and
tables of rates set forth in the Contract which The Prudential guarantees will
be used even if longevity has significantly improved since the Contract date.
If, however, The Prudential at the time is offering more favorable rates, then
those will be used.

The annuity will be in one of two forms listed below and other forms may be
available with The Prudential's consent. All the annuity options under this
Contract are fixed annuity options under which the Contract owner's
participation in the variable investment options ceases when the annuity is
effected and the amount of each monthly payment does not change. Unless The
Prudential consents to a later date, an annuity must begin no later than the
first Contract anniversary after the annuitant's 90th birthday, or if there are
two annuitants named in the Contract, the 90th birthday of the primary
annuitant. Special rules apply in the case of a Contract issued in connection
with a tax favored retirement plan. The Prudential will then make monthly
payments to the annuitant on the first day of each month for a period determined
by the form of annuity selected. Subject to the terms of the retirement
arrangement, if the owner has not selected an annuity option to take effect by
the annuity date, the interest payment option (see below) will become effective
then.

Where the owner dies before the annuity starting date, the entire interest must
be distributed within 5 years of death. The requirement will be satisfied,
however, if the distribution to a designated beneficiary begins no later than
one year after the owner's death and is to continue over the beneficiary's life
or a period not exceeding the beneficiary's life expectancy. If the owner's
spouse is the designated beneficiary, the Contract may continue with

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<PAGE>

the spouse treated as the owner. If the owner dies on or after the annuity
starting date and before the entire interest in the annuity has been
distributed, the remaining interest will be distributed at least as rapidly as
under the method being used as of the date of death.

1. Life Annuity with 120 Payments Certain. Payments will be made to the
annuitant monthly during his or her lifetime. If the annuitant dies before the
120th monthly payment is due, monthly annuity payments do not continue to the
beneficiary designated by the annuitant unless he or she so selects. Instead,
the discounted value of the remaining unpaid installments, to and including the
120th monthly payment, is payable to the beneficiary in one sum. In calculating
the discounted value of the unpaid future payments, The Prudential will discount
each such payment at the interest rate used to compute the amount of the actual
120 payments. If the payments were based on the tables of rates set forth in the
Contract, the interest rate used is 3.5% a year. Once annuity payments have
begun, an annuitant may withdraw the present value of any of the 120 payments
certain that have not been paid.

2. Interest Payment Option. The annuitant may choose to have The Prudential hold
a designated amount to accumulate at interest. If no option has been selected by
the annuity date, this option will automatically become effective. The
Prudential will pay interest at an effective rate of at least 3% a year, and it
may pay a higher rate of interest. Once this option is effected, an annuitant
may withdraw the unpaid balance, or any part not less than $100.

Legal Considerations Relating to Sex-Distinct Annuity Purchase Rates. It should
be noted that while in general the Contract provides for sex-distinct annuity
purchase rates for life annuities, those rates are not applicable to Contracts
offered in states that have adopted regulations prohibiting sex-distinct annuity
purchase rates. Rather, blended unisex annuity purchase rates for life annuities
will be provided under all Contracts issued in those states, whether the
annuitant is male or female. Other things being equal, such unisex annuity
purchase rates will result in the same monthly annuity payments for male and
female annuitants.

In addition, employers and employee organizations considering purchase of a
Contract should consult their legal advisors to determine whether purchase of a
Contract based on sex-distinct annuity purchase rates is consistent with Title
VII of the Civil Rights Act of 1964 or other applicable law. The Prudential may
offer the Contracts with unisex annuity purchase rates to such prospective
purchasers.

Special provisions may apply if the Contract is issued in connection with a tax
favored retirement plan. The necessary information will be provided by the plan
sponsor or administrator.

OTHER INFORMATION

Voting Rights. As stated above, all of the assets held in the subaccounts of the
Account will be invested in shares of the corresponding portfolios of the Series
Fund. The Prudential is the legal owner of those shares and as such has the
right to vote on any matter voted on at Series Fund shareholders meetings.
However, The Prudential will, as required by law, vote the shares of the Series
Fund at any regular and special shareholders meetings it is required to hold in
accordance with voting instructions received from Contract owners. The Series
Fund will not hold annual shareholders meetings when not required to do so under
Maryland law or the Investment Company Act of 1940. Series Fund shares for which
no timely instructions from Contract owners are received, and any shares
attributable to general account investments of The Prudential will be voted in
the same proportion as shares in the respective portfolios for which
instructions are received. Should the applicable federal securities laws or
regulations, or their current interpretation, change so as to permit The
Prudential to vote shares of the Series Fund in its own right, it may elect to
do so.

Matters on which Contract owners may give voting instructions include the
following: (1) election of the Board of Directors of the Series Fund; (2)
ratification of the independent accountant of the Series Fund; (3) approval of
the investment advisory agreement for a portfolio of the Series Fund
corresponding to the Contract owner's selected subaccount[s]; (4) any change in
the fundamental investment policy of a portfolio corresponding to the Contract
owner's selected subaccount[s]; and (5) any other matter requiring a vote of the
shareholders of the Series Fund. With respect to approval of the investment
advisory agreement or any change in a portfolio's fundamental investment policy,
Contract owners participating in such portfolios will vote separately on the
matter, pursuant to the requirements of Rule 18f-2 under the 1940 Act.

The number of Series Fund shares for which instructions may be given by a
Contract owner is determined by dividing the portion of the value of the
Contract derived from participation in a subaccount, by the value of one share
in the corresponding portfolio of the Series Fund. The number of votes for which
each Contract owner may give The Prudential instructions will be determined as
of the record date chosen by the Board of Directors of the Series Fund. The
Prudential will furnish Contract owners with proper forms and proxies to enable
them to give these instructions. The Prudential reserves the right to modify the
manner in which the weight to be given voting

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<PAGE>

instructions is calculated where such a change is necessary to comply with
current federal regulations or interpretations of those regulations.

Contract owners also share with the owners of all Prudential Contracts and
policies the right to vote in elections for members of the Board of Directors of
The Prudential.

Sale of the Contract and Sales Commissions. Pruco Securities Corporation
("Prusec"), an indirect wholly-owned subsidiary of The Prudential, acts as the
principal underwriter of the Contract. Prusec, organized in 1971 under New
Jersey law, is registered as a broker and dealer under the Securities Exchange
Act of 1934 and is a member of the National Association of Securities Dealers,
Inc. Prusec's principal business address is 1111 Durham Avenue, South
Plainfield, New Jersey 07080. The Contract is sold by registered representatives
of Prusec who are also authorized by state insurance departments to do so. The
Contract may also be sold through other broker-dealers authorized by Prusec and
applicable law to do so. Registered representatives of such other broker-dealers
may be paid on a different basis than described below. The maximum commission
that will be paid to the representative is 3.5% of the purchase payment
received, and the amount paid to the broker-dealer to cover both the individual
representative's commission and other distribution expenses will not exceed 6%
of the purchase payment. Trail commissions based on the size of the Contract
fund may be paid. Such commissions will be subject to reduction if The
Prudential accepts purchase payments on and after the annuitant's 81st birthday.
See Requirements for Issuance of a Contract, page 10. The representative may be
required to return all of the first year commission if the Contract is not
continued through the first year. Representatives who meet certain productivity,
profitability, and persistency standards with regard to the sale of the Contract
will be eligible for additional compensation.

Sales expenses in any year are not equal to the deduction for sales load in that
year. The Prudential expects to recover its total sales expenses over the
periods the Contracts are in effect. To the extent that the sales charges are
insufficient to cover total sales expenses, the sales expenses will be recovered
from The Prudential's surplus.

Substitution of Series Fund Shares. Although The Prudential believes it to be
unlikely, it is possible that in the judgment of its management, one or more of
the portfolios of the Series Fund may become unsuitable for investment by
Contract owners because of investment policy changes, tax law changes or the
unavailability of shares for investment. In that event, The Prudential may seek
to substitute the shares of another portfolio or of an entirely different mutual
fund. Before this can be done, the approval of the SEC, and possibly one or more
state insurance departments, will be required. Contract owners will be notified
of such substitution.

Ownership of the Contract. The Contract owner is entitled to exercise all the
rights under the Contract. The Contract owner is usually, but not always, an
annuitant. Ownership of the Contract may, however, be transferred to another
person who need not be the person who is to receive annuity payments. Transfer
of the ownership of a Contract may involve federal income tax consequences, or
may be prohibited under certain Contracts, and the owner should consult with a
qualified tax advisor before attempting any such transfer. Generally, ownership
of the Contract is not assignable to another insurance company or employee
benefit plan or program without The Prudential's consent.

Performance Information. Performance information for the subaccounts may appear
in advertising and reports to current and prospective Contract owners.
Performance information is based on historical investment experience of those
investment options and does not indicate or represent future performance.

Total returns are based on the overall dollar or percentage change in value of a
hypothetical investment. Total return quotations reflect changes in unit values
and the deduction of applicable charges.

A cumulative total return reflects performance over a stated period of time. An
average annual total return reflects the hypothetical annually compounded return
that would have produced the same cumulative total return if the performance had
been constant over the entire period.

The Money Market Subaccount may advertise its current and effective yield.
Current yield reflects the income generated by an investment in the subaccount
over a specified seven-day period. Effective yield is calculated in a similar
manner except that income earned is assumed to be reinvested.

Reports or advertising may include comparative performance information,
including, but not limited to: comparisons to market indices; comparisons to
other investments; performance rankings; and data presented by analysts or
included in publications.

See "Performance Information" in the Statement of Additional Information for
recent performance information.

Reports to Contract Owners. Once each Contract year, Contract owners will be
sent statements that provide certain information pertinent to their own
Contract. These statements detail values and transactions made and specific
Contract data that apply only to each particular Contract. On request, a
Contract owner will be sent a current statement in a form similar to that of the
annual statement described above, but The Prudential may limit the number of
such requests or impose a reasonable charge if such requests are made too
frequently.

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<PAGE>

Each Contract owner will be sent an annual report for the Account. Contract
owners will also be sent annual and semi-annual reports of the Series Fund
showing the financial condition of the portfolios and the investments held in
each.

State Regulation. The Prudential is subject to regulation and supervision by the
Department of Insurance of the State of New Jersey, which periodically examines
its operations and financial condition. It is also subject to the insurance laws
and regulations of all jurisdictions in which it is authorized to do business.

The Prudential is required to submit annual statements of its operations,
including financial statements, to the insurance departments of the various
jurisdictions in which it does business to determine solvency and compliance
with local insurance laws and regulations.

In addition to the annual statements referred to above, The Prudential is
required to file with New Jersey and other jurisdictions a separate statement
with respect to the operations of all its variable contract accounts, in a form
promulgated by the National Association of Insurance Commissioners.

Litigation. No litigation is pending that would have a material effect upon the
Account or the Series Fund.

Additional Information. A registration statement has been filed with the SEC
under the Securities Act of 1933 and the Investment Company Act of 1940,
relating to the offering described in this prospectus. This prospectus does not
include all of the information set forth in the registration statement. Certain
portions have been omitted pursuant to the rules and regulations of the SEC. The
omitted information may, however, be obtained from the SEC's principal office in
Washington, D.C., upon payment of a prescribed fee.

Further information, including the statement of additional information prepared
by The Prudential, may also be obtained from The Prudential's office. The
address and telephone number are set forth on the cover of this prospectus.

The Contents of the statement of additional information include:

OTHER INFORMATION CONCERNING THE ACCOUNT

A. Experts
B. Principal Underwriter
C. Determination of Subaccount Unit Values
D. IRS Required Distributions on Death of Owner
E. Participation in Divisible Surplus
F. Performance Information
G. Financial Statements

FINANCIAL STATEMENTS OF THE PRUDENTIAL INDIVIDUAL VARIABLE CONTRACT ACCOUNT

CONSOLIDATED FINANCIAL STATEMENTS OF THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
AND SUBSIDIARIES

DETERMINATION OF SUBACCOUNT UNIT VALUES AND OF AMOUNT OF MONTHLY VARIABLE
ANNUITY PAYMENTS

A. Subaccount Unit Values
B. Determination of the Amount of Monthly Variable Annuity Payment

<PAGE>

DIRECTORS AND OFFICERS

The directors and certain officers of The Prudential, listed with their
principal occupations during the past 5 years, are shown below.

DIRECTORS OF THE PRUDENTIAL

FRANKLIN E. AGNEW, Director. -- Business Consultant and former Senior Vice
President of H.J. Heinz. Address: One Mellon Bank Center, Suite 2120,
Pittsburgh, PA 15219.

FREDERIC K. BECKER, Director. -- President of Wilentz, Goldman, and Spitzer (law
firm). Address: 90 Woodbridge Center Drive, Woodbridge, NJ 07095.

WILLIAM W. BOESCHENSTEIN, Director.--Director, Owens-Corning Fiberglas
Corporation. Address: Fiberglas Tower, Toledo, OH 43659.

LISLE C. CARTER, JR., Director.--Former Senior Vice President and General
Counsel, United Way of America. Address: 1307 Fourth Street, S.W., Washington,
DC 20024.

JAMES G. CULLEN, Director.--President, Bell Atlantic Corporation since 1993;
Prior to 1993: President, New Jersey Bell. Address: 1301 North Court House Road,
11th floor, Alexandria, VA 22201.

CAROLYNE K. DAVIS, Director.--Health Care Advisor, Ernst & Young. Address: 1200
Nineteenth Street, N.W., 4th floor, Washington, DC 20024.

ROGER A. ENRICO, Director.--Vice Chairman, Pepsi Co. Inc. since 1993; 1991 to
1993: Chairman and Chief Executive Officer, Pepsi Co. Worldwide Foods; Prior to
1991: President and Chief Executive Officer, Pepsi Co. Worldwide Beverages.
Address: 7701 Legacy Drive, Plano, TX 75024.

ALLAN D. GILMOUR, Director.--Former Vice Chairman, Ford Motor Company. Address:
Prudential Plaza, Newark, NJ 07102-3777.

WILLIAM H. GRAY, III, Director.--President and Chief Executive Officer, United
Negro College Fund, Inc. since 1991; Prior to 1991: United States Representative
for Pennsylvania's 2nd District. Address: 500 East 62nd Street, New York, NY
10021.

JON F. HANSON, Director.--Chairman, Hampshire Management Co. Address: 235 Moore
Street, Suite 200, Hackensack, NJ 07601.

CONSTANCE J. HORNER, Director.--Guest Scholar, The Brookings Institution since
1993; 1991 to 1992 Assistant to the President and Director of Presidential
Personnel, U.S. Government; Prior to 1991: Deputy Secretary, Department of
Health and Human Services. Address: 1775 Massachusetts Avenue, N.W., Washington,
DC 20036-2188.

ALLEN F. JACOBSON, Director.--Former Chairman and Chief Executive Officer,
Minnesota Mining & Manufacturing Co. Address: 30 Seventh Street East, St. Paul,
MN 55101-4901.

GARNETT L. KEITH, JR., Director and Vice Chairman.--Vice Chairman of The
Prudential. Address: Prudential Plaza, Newark, NJ 07102-3777.

BURTON G. MALKIEL, Director.--Chemical Bank Chairman's Professor of Economics,
Princeton University. Address: Princeton University, Department of Economics,
110 Fisher Hall, Prospect Avenue, Princeton, NJ 08544-1021.

JOHN R. OPEL, Director.--Prior to 1994, Chairman of the Executive Committee,
International Business Machines Corporation. Address: 590 Madison Avenue, New
York, NY 10022.

ARTHUR F. RYAN, Chairman of the Board, President, and Chief Executive Officer.
- -- Chairman of the Board, President, and Chief Executive Officer, The Prudential
since 1994; Prior to 1994, President and Chief Operating Officer, Chase
Manhattan Corporation. Address: 751 Broad Street, Newark, NJ 07102-3777.

CHARLES R. SITTER, Director.--President and Director, Exxon Corporation since
1993; Prior to 1993; Director, Exxon Corporation. Address: 225 John W. Carpenter
Freeway, Irving, TX 75062.

DONALD L. STAHELI, Director.--Chairman and Chief Executive Officer, Continental
Grain Company since 1994; Prior to 1994; Chairman, Continental Grain Company.
Address: 277 Park Avenue, New York, NY 10172.

RICHARD M. THOMSON, Director.--Chairman of the Board and Chief Executive
Officer, The Toronto-Dominion Bank. Address: P.O. Box 1, Toronto-Dominion
Centre, Toronto, Ontario, M5K 1A2, Canada.

<PAGE>

P. ROY VAGELOS, M.D., Director.--Chairman, Regeneron Pharmaceuticals since 1995;
Prior to 1995, Chairman, President and Chief Executive Officer, Merck & Co.,
Inc. Address: 126 East Lincoln Avenue, Rahway, NJ 07065.

STANLEY C. VAN NESS, Director.--Attorney, Picco Mack Herbert Kennedy Jaffe
Perrella and Yoskin (law firm). Address: One State Street Square, Suite 1000,
Trenton, NJ 08607-1388.

PAUL A. VOLCKER, Director.--Chairman, James D. Wolfensohn, Inc. Address: 599
Lexington Avenue, New York, NY 10022.

JOSEPH H. WILLIAMS, Director.--Chairman of the Board, The Williams Companies
since 1994; Prior to 1994: Chairman and Chief Executive Officer, The Williams
Companies. Address: P.O. Box 2400, Tulsa, OK 74102.

OTHER EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS

DOROTHY K. LIGHT, Vice President and Secretary.--Vice President and Secretary of
The Prudential.

EUGENE M. O'HARA, Senior Vice President and Comptroller.--Senior Vice President
and Comptroller of The Prudential.

MARTIN PFINSGRAFF, Vice President and Treasurer.--Vice President and Treasurer
of The Prudential since 1991; Prior to 1991: Senior Vice President, Mellon Bank.

27
<PAGE>

PART B

INFORMATION REQUIRED IN A STATEMENT
OF ADDITIONAL INFORMATION

<PAGE>
STATEMENT OF ADDITIONAL INFORMATION

May 1, 1995

THE PRUDENTIAL
INDIVIDUAL VARIABLE CONTRACT ACCOUNT
VARIABLE ANNUITY CONTRACTS

The Prudential Discovery(SM) Plus Contract* (the "Contract") is a variable
annuity contract issued by The Prudential Insurance Company of America ("The
Prudential") and funded through The Prudential Individual Variable Contract
Account (the "Account"). The Contract is purchased by making an initial purchase
payment of $10,000 or more; subsequent payments must be $1,000 or more ($10,000
or more in New York).

This statement of additional information is not a prospectus and should be read
in conjunction with the Contract's prospectus, dated May 1, 1995, which is
available without charge upon written request to The Prudential Insurance
Company of America, Prudential Plaza, Newark, New Jersey 07102-3777, or by
telephoning (800) 445-4571.

The Prudential Insurance Company of America
Prudential Plaza
Newark, New Jersey 07102-3777
Telephone: (800) 445-4571

*Discovery is a service mark of The Prudential.
PIVC-1B Ed 5-95
Catalog #64M101W

<PAGE>
CONTENTS

Page

OTHER INFORMATION CONCERNING THE ACCOUNT ................................. 1
A. Experts ............................................................. 1
B. Principal Underwriter ............................................... 1
C. Determination of Subaccount Unit Values ............................. 1
D. IRS Required Distributions on Death of Owner ........................ 1
E. Participation in Divisible Surplus .................................. 1
F. PERFORMANCE INFORMATION ............................................. 1
G. Financial Statements ................................................ 5

FINANCIAL STATEMENTS OF THE PRUDENTIAL INDIVIDUAL VARIABLE CONTRACT
ACCOUNT ................................................................ A1

CONSOLIDATED FINANCIAL STATEMENTS OF THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA AND SUBSIDIARIES ............................................ B1

<PAGE>

OTHER INFORMATION CONCERNING THE ACCOUNT

A. Experts. The financial statements included in the statement of additional
information and the financial statements from which the Condensed Financial
Information included in this prospectus have been derived, have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their reports
appearing herein. Such financial statements and Condensed Financial Information
have been included herein in reliance upon the reports of such firm given upon
their authority as experts in accounting and auditing. Deloitte & Touche LLP's
principal business address is Two Hilton Court, Parsippany, New Jersey
07054-0319.

B. Principal Underwriter. Pruco Securities Corporation ("Prusec"), an indirectly
wholly-owned subsidiary of The Prudential, performs all sales and distribution
functions regarding the Contracts and may be deemed to be the "principal
underwriter" of the Account under the Investment Company Act of 1940.

C. Determination of Subaccount Unit Values. The value for each Subaccount Unit
is computed as of the end of each "valuation period" as defined in the
prospectus (also referred to in this section as "business day"). On any given
business day the value of a Unit in each subaccount will be determined by
multiplying the value of a Unit of that subaccount for the preceding business
day by the net investment factor for that subaccount for the current business
day. The net investment factor for any business day is determined by dividing
the value of the assets of the subaccount for that day by the value of the
assets of the subaccount for the preceding business day (ignoring, for this
purpose, changes resulting from new purchase payments and withdrawals), and
subtracting from the result the daily equivalent of the 1.2% annual charge for
administrative expenses and mortality and expense risks. (See CHARGES, FEES, AND
DEDUCTIONS in the prospectus.) The Account's financial statements reflect a
different breakdown of the expense structure than is described in the
prospectus. The mortality and expense risk charges described in item 5 therein
combined with an administrative charge described in item 4 total an amount which
is the same 1.2% per year described in Note 3A of the Notes to the Account's
financial statements. The value of the assets of a subaccount is determined by
multiplying the number of shares of the Series Fund held by that subaccount by
the net asset value of each share and adding the value of dividends declared by
the Series Fund but not yet paid.

D. IRS Required Distributions on Death of Owner. If the Contract owner dies
before the entire interest in the Contract is distributed, the value of the
Contract must be distributed to the designated beneficiary as described in this
section so that the Contract qualifies as an annuity under the Internal Revenue
Code.

If the death occurs on or after the annuity date, the remaining portion of the
interest in the Contract must be distributed at least as rapidly as under the
method of distribution being used as of the date of death. If the death occurs
before the annuity date, the entire interest in the Contract must be distributed
within 5 years after date of death. However, if an annuity payment option is
selected by the designated beneficiary and if annuity payments begin within 1
year of the owner's death, the value of the Contract may be distributed over the
beneficiary's life or a period not exceeding the beneficiary's life expectancy.
The owner's designated beneficiary is the person to whom ownership of the
Contract passes by reason of death, and must be a natural person. Special
additional rules apply to Contracts issued in conjunction with plans subject to
Section 457 of the Code. For Contracts purchased in connection with a tax
favored plan where the owner's spouse is the beneficiary, annuity payments need
only begin on or before April 1 of the calendar year following the calendar year
in which the owner would have attained age 70 1/2 or in some instances the
remaining interest in the Contract may be rolled over to an IRA owned by the
spouse.

If any portion of the Contract owner's interest is payable to (or for the
benefit of) the surviving spouse of the owner, the Contract may be continued
with the surviving spouse as the owner. This rule does not apply to Contracts
issued in connection with tax favored plans other than IRAs.

E. Participation in Divisible Surplus. A mutual life insurance company, such as
The Prudential, differs from a stock life insurance company in that it has no
stockholders who are the owners of the enterprise. Every owner of a Prudential
Contract participates in the divisible surplus of The Prudential, according to
an annual determination of The Prudential's Board of Directors of the portion,
if any, of the divisible surplus of the entire company that is attributable to
the class of contracts of which he or she is an owner. Before annuity payments
begin, it is unlikely that any dividends will be payable to the owners of the
Contracts described in the prospectus. However, there may be dividends payable
during an annuity payout period.

F. PERFORMANCE INFORMATION

The tables that follow provide performance information for each subaccount
through December 31, 1994. The performance information is based on historical
experience and does not indicate or represent future performance. The Growth
Stock and Small Capitalization Stock Portfolios were not in operation in 1994.

1
<PAGE>

Annual Average Total Return

Table 1 below shows the average annual rates of total return on hypothetical
investments of $1,000 for periods ended December 31, 1994 in each subaccount
other than the Money Market Subaccount. These figures assume withdrawal of the
investments at the end of the period other than to effect an annuity under the
Contract.

Table 1
Average Annual Total Return

From Date
Subaccount
One Year Five Years Established
Date Ended Ended Through
Subaccount Established 12/31/94 12/31/94 12/31/94
---------- ----------- -------- --------- -----------
Bond .................. 2/89 -10.40 5.75 7.01
High Yield Bond ....... 2/89 -9.93 9.05 6.64
Government ............ 5/89 -12.20 5.05 6.39
Securities
Common Stock ........ 2/89 -4.73 9.52 12.15
Stock Index ........... 2/89 -6.48 6.39 9.60
High Dividend Stock ... 2/89 -6.07 9.10 10.74
Natural Resources ..... 2/89 -11.39 4.12 7.27
Global Equity ......... 5/89 -11.94 3.13 5.07
Conservatively Managed
Flexible ............ 2/89 -8.31 6.48 7.92
Aggressively Managed
Flexible ............ 2/89 -10.34 7.20 9.23
Growth Stock .......... 4/95 N/A N/A N/A
Small Capitalization
Stock ............... 4/95 N/A N/A N/A

The average annual rates of total return shown above are computed by finding the
average annual compounded rates of return over the periods shown that would
equate the initial amount invested to the withdrawal value, in accordance with
the following formula: P(1+T)"- ERA. In the formula, P is a hypothetical
investment of $1,000; T is the average annual total return; " is the number of
years; and ERA is the withdrawal value at the end of the periods shown. These
figures assume deduction of the maximum deferred sales charge that may be
applicable to a particular period. The annual contract fee is not included
because it applies only if the Contract fund is less than $10,000.

2
<PAGE>

Non-Standard Total Return

Table 2 below shows the average annual rates of return as in Table 1, but
assumes that the investments are not withdrawn at the end of the period or that
the Contract owner annuitizes at the end of the period.

Table 2

Average Annual Total Return Assuming No Withdrawal

From Date
Subaccount
One Year Five Years Established
Date Ended Ended Through
Subaccount Established 12/31/94 12/31/94 12/31/94
---------- ----------- -------- --------- -----------
Bond .................. 2/89 -4.38 6.30 7.43
High Yield Bond ....... 2/89 -3.88 9.53 7.06
Government Securities . 5/89 -6.29 5.61 6.84
Common Stock .......... 2/89 1.56 9.98 12.46
Stock Index ........... 2/89 -0.19 6.92 9.96
High Dividend Stock ... 2/89 0.23 9.57 11.08
Natural Resources ..... 2/89 -5.43 4.71 7.68
Global Equity ......... 5/89 -6.02 3.74 5.55
Conservatively Managed
Flexible ............ 2/89 -2.14 7.01 8.31
Aggressively Managed
Flexible ............ 2/89 -4.31 7.72 9.60
Growth Stock .......... 4/95 N/A N/A N/A
Small Capitalization
Stock ............... 4/95 N/A N/A N/A

3
<PAGE>

Table 3 shows the cumulative total return for the subaccounts, assuming no
withdrawal.

Table 3

Cumulative Total Return Assuming No Withdrawal

From Date
Subaccount
One Year Five Years Established
Date Ended Ended Through
Subaccount Established 12/31/94 12/31/94 12/31/94
---------- ----------- -------- --------- -----------
Bond .................. 2/89 -4.38 35.71 48.54
High Yield Bond ....... 2/89 -3.88 57.62 45.50
Government Securities . 5/89 -6.29 31.39 42.05
Common Stock .......... 2/89 1.56 60.89 95.25
Stock Index ........... 2/89 -0.19 39.74 70.73
High Dividend Stock ... 2/89 0.23 57.96 81.38
Natural Resources ..... 2/89 -5.43 25.85 50.61
Global Equity ......... 5/89 -6.02 20.16 32.32
Conservatively Managed
Flexible ............ 2/89 -2.14 40.31 56.00
Aggressively Managed
Flexible ............ 2/89 -4.31 45.01 67.40
Growth Stock .......... 4/95 N/A N/A N/A
Small Capitalization
Stock ............... 4/95 N/A N/A N/A

Money Market Subaccount Yield

The "yield" and "effective yield" of the Money Market Subaccount for the seven
days ended December 31, 1994 were 4.3226% and 4.4155%, respectively.

The yield is computed by determining the net change, exclusive of capital
changes, in the value of a hypothetical pre-existing account having a balance of
one accumulation unit of the Money Market Subaccount at the beginning of the
period, subtracting a hypothetical charge reflecting deductions from
contractowner accounts, and dividing the difference by the value of the
subaccount at the beginning of the base period to obtain the base period return,
and then multiplying the base period return by (365/7), with the resulting
figure carried to the nearest hundredth of 1%.

The deduction referred to above consists of the 1% charge for mortality and
expense risks and the 0.20% charge for administration. It does not reflect the
deferred sales charge. It also does not reflect the annual contract fee, which
is charged only if the Contract Fund is less than $10,000.

The effective yield is obtained by taking the base period return, adding 1,
raising the sum to a power equal to 365 divided by 7, and subtracting 1 from the
result, according to the following formula: Effective Yield = ((base period
return + 1) 365/7) - 1.

The yields on amounts held in the Money Market Subaccount will fluctuate on a
daily basis. Therefore, the stated yields for any given period are not an
indication of future yields.

4
<PAGE>

Comparisons

Reports or advertising may include comparative performance information,
including, but not limited to: (1) comparisons to market indices such as the Dow
Jones Industrial Average, the Standard & Poor's 500 Index, the Value Line
Composite Index, the Russell 2000 Index, the Morgan Stanley World Index, the
Lehman Brothers bond indices; (2) comparisons to other investments, such as
certificates of deposit; (3) performance rankings assigned by services such as
Morningstar, Inc. and Variable Annuity Research and Data Services (VARDS), and
Lipper Analytical Services, Inc.; (4) data presented by analysts such as Dow
Jones, A.M. Best, The Bank Rate Monitor National Index; and (5) data in
publications such as The Wall Street Journal, Times, Forbes, Barrons, Fortune,
Money Magazine, and Financial World.

G. Financial Statements. The consolidated financial statements of The Prudential
and subsidiaries included herein should be distinguished from the financial
statements of the Account, and should be considered only as bearing upon the
ability of The Prudential to meet its obligations under the Contracts.

<PAGE>

FINANCIAL STATEMENTS OF
THE PRUDENTIAL INDIVIDUAL VARIABLE CONTRACT ACCOUNT

STATEMENTS OF NET ASSETS

December 31, 1994

<TABLE>
<CAPTION>
SUBACCOUNTS
--------------------------------------------------------------

AGGRESSIVELY
MONEY COMMON MANAGED
TOTAL MARKET BOND STOCK FLEXIBLE
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investment in shares of The Prudential Series
Fund, Inc.
Portfolios at net asset value [Note 2]........ $4,558,775,607 $ 300,344,509 $ 200,978,090 $ 710,138,411 $ 651,512,746
-------------- -------------- -------------- -------------- --------------
LIABILITIES
Payable to Related Separate Account............. 30,271 0 0 0 0
-------------- -------------- -------------- -------------- --------------
NET ASSETS........................................ $4,558,745,336 $ 300,344,509 $ 200,978,090 $ 710,138,411 $ 651,512,746
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
NET ASSETS, representing:
Equity of Contract owners [Note 7].............. $4,491,677,469 $ 290,723,504 $ 198,809,209 $ 703,682,688 $ 644,179,285
Equity of annuitants [Note 7]................... 68,523 0 0 20,182 15,031
Equity of The Prudential Insurance Company of
America....................................... 66,999,344 9,621,005 2,168,881 6,435,541 7,318,430
-------------- -------------- -------------- -------------- --------------
$4,558,745,336 $ 300,344,509 $ 200,978,090 $ 710,138,411 $ 651,512,746
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
Accumulation units.............................. -- 157,409,906 81,830,653 188,251,121 227,810,335
</TABLE>

STATEMENTS OF OPERATIONS

For the year ended December 31, 1994

<TABLE>
<CAPTION>
SUBACCOUNTS
--------------------------------------------------------------

AGGRESSIVELY
MONEY COMMON MANAGED
TOTAL MARKET BOND STOCK FLEXIBLE
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividend distributions received................. $ 161,153,078 $ 11,184,738 $ 13,636,077 $ 15,268,485 $ 18,244,490

EXPENSES
Charges to Contract owners and annuitants for
assuming mortality risk and expense risk and
for administration [Note 3A].................. 51,976,248 3,274,856 2,584,267 7,660,708 7,603,317
-------------- -------------- -------------- -------------- --------------
NET INVESTMENT INCOME (LOSS)...................... 109,176,830 7,909,882 11,051,810 7,607,777 10,641,173
-------------- -------------- -------------- -------------- --------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Capital gains distributions received............ 90,120,652 0 502,181 28,556,126 18,672,462
Realized gain (loss) on shares redeemed
[average cost basis].......................... (222,561) 0 (1,189,724) 928,662 110,654
Net unrealized loss on investments.............. (293,645,714) 0 (20,577,461) (28,001,165) (57,317,849)
-------------- -------------- -------------- -------------- --------------
NET GAIN (LOSS) ON INVESTMENTS.................... (203,747,623) 0 (21,265,004) 1,483,623 (38,534,733)
-------------- -------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS....................... $ (94,570,793) $ 7,909,882 $ (10,213,194) $ 9,091,400 $ (27,893,560)
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A7 THROUGH A10.
A1

<PAGE>

STATEMENTS OF NET ASSETS (CONTINUED)
December 31, 1994
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
------------------------------------------------------------------------------

CONSERVATIVELY HIGH HIGH
MANAGED YIELD STOCK DIVIDEND NATURAL
FLEXIBLE BOND INDEX STOCK RESOURCES
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investment in shares of The Prudential Series
Fund, Inc.
Portfolios at net asset value [Note 2]........ $1,228,415,021 $ 159,076,471 $ 204,026,082 $ 520,202,994 $ 84,646,509
-------------- -------------- -------------- -------------- --------------
LIABILITIES
Payable to Related Separate Account............. 0 0 0 30,271 0
-------------- -------------- -------------- -------------- --------------
NET ASSETS........................................ $1,228,415,021 $ 159,076,471 $ 204,026,082 $ 520,172,723 $ 84,646,509
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
NET ASSETS, representing:
Equity of Contract owners [Note 7].............. $1,216,642,917 $ 157,067,209 $ 203,335,688 $ 516,193,893 $ 83,316,982
Equity of annuitants [Note 7]................... 33,310 0 0 0 0
Equity of The Prudential Insurance Company of
America....................................... 11,738,794 2,009,262 690,394 3,978,830 1,329,527
-------------- -------------- -------------- -------------- --------------
$1,228,415,021 $ 159,076,471 $ 204,026,082 $ 520,172,723 $ 84,646,509
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
458,226,935 97,836,806 114,729,189 245,368,458 47,590,396

GLOBAL GOVERNMENT
EQUITY SECURITIES
-------------- --------------
<S> <C> <C>
ASSETS
Investment in shares of The Prudential Series
Fund, Inc.
Portfolios at net asset value [Note 2]........ $ 205,801,303 $ 293,633,471
-------------- --------------
LIABILITIES
Payable to Related Separate Account............. 0 0
-------------- --------------
NET ASSETS........................................ $ 205,801,303 $ 293,633,471
-------------- --------------
-------------- --------------
NET ASSETS, representing:
Equity of Contract owners [Note 7].............. $ 198,509,175 $ 279,216,919
Equity of annuitants [Note 7]................... 0 0
Equity of The Prudential Insurance Company of
America....................................... 7,292,128 14,416,552
-------------- --------------
$ 205,801,303 $ 293,633,471
-------------- --------------
-------------- --------------
148,241,847 191,823,878
</TABLE>

STATEMENTS OF OPERATIONS (CONTINUED)
For the year ended December 31, 1994
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
------------------------------------------------------------------------------

CONSERVATIVELY HIGH HIGH
MANAGED YIELD STOCK DIVIDEND NATURAL
FLEXIBLE BOND INDEX STOCK RESOURCES
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividend distributions received................. $ 42,911,793 $ 15,802,101 $ 4,937,774 $ 18,032,929 $ 789,654

EXPENSES
Charges to Contract owners and annuitants for
assuming mortality risk and expense risk and
for administration [Note 3A].................. 14,325,596 1,847,954 2,414,962 5,652,945 872,666
-------------- -------------- -------------- -------------- --------------
NET INVESTMENT INCOME (LOSS)...................... 28,586,197 13,954,147 2,522,812 12,379,984 (83,012)
-------------- -------------- -------------- -------------- --------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Capital gains distributions received............ 13,199,561 120 306,826 27,001,472 1,610,550
Realized gain (loss) on shares redeemed
[average cost basis].......................... (404,868) (98,699) 1,565,117 246,513 22,685
Net unrealized loss on investments.............. (66,969,793) (20,478,513) (4,912,064) (41,456,054) (6,512,677)
-------------- -------------- -------------- -------------- --------------
NET GAIN (LOSS) ON INVESTMENTS.................... (54,175,100) (20,577,092) (3,040,121) (14,208,069) (4,879,442)
-------------- -------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS....................... $ (25,588,903) $ (6,622,945) $ (517,309) $ (1,828,085) $ (4,962,454)
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------

GLOBAL GOVERNMENT
EQUITY SECURITIES
-------------- --------------
<S> <C> <C>
INVESTMENT INCOME
Dividend distributions received................. $ 294,159 $ 20,050,878
EXPENSES
Charges to Contract owners and annuitants for
assuming mortality risk and expense risk and
for administration [Note 3A].................. 1,890,883 3,848,094
-------------- --------------
NET INVESTMENT INCOME (LOSS)...................... (1,596,724) 16,202,784
-------------- --------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Capital gains distributions received............ 271,354 0
Realized gain (loss) on shares redeemed
[average cost basis].......................... 176,826 (1,579,727)
Net unrealized loss on investments.............. (10,458,220) (36,961,918)
-------------- --------------
NET GAIN (LOSS) ON INVESTMENTS.................... (10,010,040) (38,541,645)
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS....................... $ (11,606,764) $ (22,338,861)
-------------- --------------
-------------- --------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A7 THROUGH A10.
A2

<PAGE>

FINANCIAL STATEMENTS OF
THE PRUDENTIAL INDIVIDUAL VARIABLE CONTRACT ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS

For the years ended December 31, 1994 and 1993

<TABLE>
<CAPTION>
SUBACCOUNTS
--------------------------------------------------------------

MONEY
TOTAL MARKET BOND
------------------------------ ------------------------------ ------------------------------
1993
1994 (AS RESTATED) 1994 1993 1994 1993
-------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>

OPERATIONS:
Net investment income (loss)..... $ 109,176,830 $ 75,512,860 $ 7,909,882 $ 4,145,667 $ 11,051,810 $ 9,597,447
Capital gains distributions
received....................... 90,120,652 109,446,686 0 0 502,181 2,990,652
Realized gain (loss) on shares
redeemed
[average cost basis]........... (222,561) 1,864,440 0 0 (1,189,724) 58,116
Net unrealized gain (loss) on
investments.................... (293,645,714) 155,139,626 0 0 (20,577,461) 2,780,633
-------------- -------------- -------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM OPERATIONS........ (94,570,793) 341,963,612 7,909,882 4,145,667 (10,213,194) 15,426,848
-------------- -------------- -------------- -------------- -------------- --------------

ACCUMULATION AND ANNUITY
UNIT TRANSACTIONS
Purchase payments and transfers
in............................. 2,259,702,701 2,044,890,554 464,841,336 254,222,894 49,300,910 103,112,808
Withdrawals and transfers out.... (1,419,835,561) (763,291,864) (397,515,189) (282,225,309) (62,036,927) (44,246,760)
Annuity benefit payments......... (17,578) (13,727) 0 0 0 0
-------------- -------------- -------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM ACCUMULATION
AND ANNUITY UNIT TRANSACTIONS.... 839,849,562 1,281,584,963 67,326,147 (28,002,415) (12,736,017) 58,866,048
-------------- -------------- -------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM SURPLUS
TRANSFERS........................ 27,362,416 (939,061) 5,360,709 (4,968,540) (530,717) 1,038,610
-------------- -------------- -------------- -------------- -------------- --------------

TOTAL INCREASE (DECREASE)
IN NET ASSETS.................... 772,641,185 1,622,609,514 80,596,738 (28,825,288) (23,479,928) 75,331,506

NET ASSETS:
Beginning of year................ 3,786,104,151 2,163,494,637 219,747,771 248,573,059 224,458,018 149,126,512
-------------- -------------- -------------- -------------- -------------- --------------
End of year...................... $4,558,745,336 $3,786,104,151 $ 300,344,509 $ 219,747,771 $ 200,978,090 $ 224,458,018
-------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- --------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A7 THROUGH A10.
A3

<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

For the years ended December 31, 1994 and 1993
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
--------------------------------------------------------------

AGGRESSIVELY
COMMON MANAGED
STOCK FLEXIBLE
------------------------------ ------------------------------
1994 1993 1994 1993
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>

OPERATIONS:
Net investment income (loss)..... $ 7,607,777 $ 3,798,521 $ 10,641,173 $ 10,526,691
Capital gains distributions
received....................... 28,556,126 25,775,785 18,672,462 28,864,476
Realized gain (loss) on shares
redeemed
[average cost basis]........... 928,662 535,287 110,654 0
Net unrealized gain (loss) on
investments.................... (28,001,165) 44,668,973 (57,317,849) 17,825,690
-------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM OPERATIONS........ 9,091,400 74,778,566 (27,893,560) 57,216,857
-------------- -------------- -------------- --------------

ACCUMULATION AND ANNUITY
UNIT TRANSACTIONS
Purchase payments and transfers
in............................. 303,883,305 283,071,313 209,097,153 233,869,490
Withdrawals and transfers out.... (155,341,591) (99,767,957) (109,865,507) (52,431,268)
Annuity benefit payments......... (11,976) (11,315) (1,695) (1,699)
-------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM ACCUMULATION
AND ANNUITY UNIT TRANSACTIONS.... 148,529,738 183,292,041 99,229,951 181,436,523
-------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM SURPLUS
TRANSFERS........................ 2,313,971 (592,908) 2,142,366 2,647,284
-------------- -------------- -------------- --------------

TOTAL INCREASE (DECREASE)
IN NET ASSETS.................... 159,935,109 257,477,699 73,478,757 241,300,664

NET ASSETS:
Beginning of year................ 550,203,302 292,725,603 578,033,989 336,733,325
-------------- -------------- -------------- --------------
End of year...................... $ 710,138,411 $ 550,203,302 $ 651,512,746 $ 578,033,989
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
<CAPTION>
CONSERVATIVELY HIGH
MANAGED YIELD
FLEXIBLE BOND
------------------------------ ------------------------------
1993
1994 1993 1994 (AS RESTATED)
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)..... $ 28,586,197 $ 16,916,601 $ 13,954,147 $ 9,609,036
Capital gains distributions
received....................... 13,199,561 37,053,512 120 72
Realized gain (loss) on shares
redeemed
[average cost basis]........... (404,868) 30,381 (98,699) 120,078
Net unrealized gain (loss) on
investments.................... (66,969,793) 21,265,811 (20,478,513) 6,711,465
-------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM OPERATIONS........ (25,588,903) 75,266,305 (6,622,945) 16,440,651
-------------- -------------- -------------- --------------
ACCUMULATION AND ANNUITY
UNIT TRANSACTIONS
Purchase payments and transfers
in............................. 432,095,316 466,495,805 131,806,320 108,374,821
Withdrawals and transfers out.... (206,086,390) (82,432,682) (106,613,592) (44,283,479)
Annuity benefit payments......... (3,907) (713) 0 0
-------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM ACCUMULATION
AND ANNUITY UNIT TRANSACTIONS.... 226,005,019 384,062,410 25,192,728 64,091,342
-------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM SURPLUS
TRANSFERS........................ 1,621,577 2,319,090 (53,774) (2,105,059)
-------------- -------------- -------------- --------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS.................... 202,037,693 461,647,805 18,516,009 78,426,934
NET ASSETS:
Beginning of year................ 1,026,377,328 564,729,523 140,560,462 62,133,528
-------------- -------------- -------------- --------------
End of year...................... $1,228,415,021 $1,026,377,328 $ 159,076,471 $ 140,560,462
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A7 THROUGH A10.
A4

<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

For the years ended December 31, 1994 and 1993

<TABLE>
<CAPTION>
SUBACCOUNTS
----------------------------------------------------------------------------------------------
HIGH
STOCK DIVIDEND NATURAL
INDEX STOCK RESOURCES
------------------------------ ------------------------------ ------------------------------
1994 1993 1994 1993 1994 1993
-------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>

OPERATIONS:
Net investment income (loss)..... $ 2,522,812 $ 2,235,239 $ 12,379,984 $ 6,131,526 $ (83,012) $ 132,466
Capital gains distributions
received....................... 306,826 427,304 27,001,472 11,500,727 1,610,550 1,119,672
Realized gain (loss) on shares
redeemed
[average cost basis]........... 1,565,117 990,343 246,513 0 22,685 67,144
Net unrealized gain (loss) on
investments.................... (4,912,064) 11,072,271 (41,456,054) 22,742,508 (6,512,677) 3,952,261
-------------- -------------- -------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM OPERATIONS........ (517,309) 14,725,157 (1,828,085) 40,374,761 (4,962,454) 5,271,543
-------------- -------------- -------------- -------------- -------------- --------------

ACCUMULATION AND ANNUITY
UNIT TRANSACTIONS
Purchase payments and transfers
in............................. 55,720,850 93,583,016 251,114,271 228,055,868 61,551,700 37,927,578
Withdrawals and transfers out.... (58,321,184) (51,633,992) (100,023,343) (31,412,961) (23,266,443) (11,373,132)
Annuity benefit payments......... 0 0 0 0 0 0
-------------- -------------- -------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM ACCUMULATION
AND ANNUITY UNIT TRANSACTIONS.... (2,600,334) 41,949,024 151,090,928 196,642,907 38,285,257 26,554,446
-------------- -------------- -------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM SURPLUS
TRANSFERS........................ (39,704) (1,825,867) (72,254) 1,469,790 253,409 284,229
-------------- -------------- -------------- -------------- -------------- --------------

TOTAL INCREASE (DECREASE)
IN NET ASSETS.................... (3,157,347) 54,848,314 149,190,589 238,487,458 33,576,212 32,110,218

NET ASSETS:
Beginning of year................ 207,183,429 152,335,115 370,982,134 132,494,676 51,070,297 18,960,079
-------------- -------------- -------------- -------------- -------------- --------------
End of year...................... $ 204,026,082 $ 207,183,429 $ 520,172,723 $ 370,982,134 $ 84,646,509 $ 51,070,297
-------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- --------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A7 THROUGH A10.
A5

<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

For the years ended December 31, 1994 and 1993

<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
--------------------------------------------------------------

GLOBAL GOVERNMENT
EQUITY SECURITIES
------------------------------ ------------------------------
1994 1993 1994 1993
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>

OPERATIONS:
Net investment income (loss)..... $ (1,596,724) $ (175,344) $ 16,202,784 $ 12,595,010
Capital gains distributions
received....................... 271,354 533,018 0 1,181,468
Realized gain (loss) on shares
redeemed
[average cost basis]........... 176,826 40,826 (1,579,727) 22,265
Net unrealized gain (loss) on
investments.................... (10,458,220) 12,308,947 (36,961,918) 11,811,067
-------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM OPERATIONS........ (11,606,764) 12,707,447 (22,338,861) 25,609,810
-------------- -------------- -------------- --------------

ACCUMULATION AND ANNUITY
UNIT TRANSACTIONS
Purchase payments and transfers
in............................. 210,091,889 64,271,435 90,199,651 171,905,526
Withdrawals and transfers out.... (81,643,439) (9,078,800) (119,121,956) (54,405,524)
Annuity benefit payments......... 0 0 0 0
-------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM ACCUMULATION
AND ANNUITY UNIT TRANSACTIONS.... 128,448,450 55,192,635 (28,922,305) 117,500,002
-------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM SURPLUS
TRANSFERS........................ 5,354,433 1,153,773 11,012,400 (359,463)
-------------- -------------- -------------- --------------

TOTAL INCREASE (DECREASE)
IN NET ASSETS.................... 122,196,119 69,053,855 (40,248,766) 142,750,349

NET ASSETS:
Beginning of year................ 83,605,184 14,551,329 333,882,237 191,131,888
-------------- -------------- -------------- --------------
End of year...................... $ 205,801,303 $ 83,605,184 $ 293,633,471 $ 333,882,237
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A7 THROUGH A10.
A6

<PAGE>

NOTES TO FINANCIAL STATEMENTS OF
THE PRUDENTIAL INDIVIDUAL VARIABLE CONTRACT ACCOUNT
FOR THE YEARS ENDED DECEMBER 31, 1994 AND DECEMBER 31, 1993

NOTE 1: GENERAL

The Prudential Individual Variable Contract Account (the "Account") of The
Prudential Insurance Company of America ("The Prudential") was established on
October 12, 1982 by a resolution of The Prudential's Board of Directors in
conformity with insurance laws of the State of New Jersey. The assets of the
Account are segregated from The Prudential's other assets. The two products that
invest in the Account are The Prudential Variable Investment Plan ("VIP") and
The Prudential Discovery Plus ("Discovery Plus").

The Account is registered under the Investment Company Act of 1940, as amended,
as a unit investment trust. There are eleven subaccounts within the Account,
each of which invests only in a corresponding portfolio of The Prudential Series
Fund, Inc. (the "Series Fund"). The Series Fund is a diversified open-end
management investment company, and is managed by The Prudential.

NOTE 2: INVESTMENT INFORMATION FOR THE PRUDENTIAL SERIES FUND, INC. PORTFOLIOS

The net asset value per share for each portfolio of the Series Fund, the number
of shares of each portfolio held by the subaccounts of the Account and the
aggregate cost of investments in such shares at December 31, 1994 were as
follows:
<TABLE>
<CAPTION>
PORTFOLIOS
----------------------------------------------------------------
AGGRESSIVELY
PORTFOLIO MONEY COMMON MANAGED
INFORMATION MARKET BOND STOCK FLEXIBLE
- ---------------------------- ---------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Number of shares: 30,034,451 20,021,028 34,368,665 42,043,903
Net asset value per share: $ 10.0000 $ 10.0384 $ 20.6624 $ 15.4960
Cost: $ 300,344,509 $ 218,197,092 $ 679,605,267 $ 665,314,443

PORTFOLIOS (CONTINUED)
----------------------------------------------------------------
CONSERVATIVELY HIGH HIGH
PORTFOLIO MANAGED YIELD STOCK DIVIDEND
INFORMATION FLEXIBLE BOND INDEX STOCK
- ---------------------------- ---------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Number of shares: 87,152,785 21,584,734 13,640,779 35,915,328
Net asset value per share: $ 14.0950 $ 7.3655 $ 14.9571 $ 14.4842
Cost: $ 1,258,178,173 $ 173,308,607 $ 183,410,322 $ 532,620,220
</TABLE>

<TABLE>
<CAPTION>
PORTFOLIOS (CONTINUED)
------------------------------------------------
PORTFOLIO NATURAL GLOBAL GOVERNMENT
INFORMATION RESOURCES EQUITY SECURITIES
- ---------------------------- ---------------- -------------- --------------
<S> <C> <C> <C>
Number of shares: 5,860,656 14,828,358 28,068,411
Net asset value per share: $ 14.4432 $ 13.8789 $ 10.4614
Cost: $ 86,645,639 $ 204,400,679 $ 316,165,579
</TABLE>

NOTE 3: CHARGES AND EXPENSES

A. Mortality Risk, Expense Risk and Administrative Charges

The mortality risk and expense risk charges at effective annual rates of
0.8% and 0.4%, respectively (for a total of 1.2% per year), are applied
daily against the net assets representing equity of VIP Contract owners and
annuitants held in each subaccount.

The mortality risk, expense risk and administrative charges at effective
annual rates of 0.7%, 0.3%, and 0.2%, respectively (for a total of 1.2% per
year), are applied daily against the net assets representing equity of
Discovery Plus Contract owners held in each subaccount.

<PAGE>

B. Deferred Sales Charge

A deferred sales charge is imposed upon the withdrawal of certain purchase
payments to compensate The Prudential for sales and other marketing
expenses. The amount of any sales charge will depend on the amount withdrawn
and the number of Contract years that have elapsed since the Contract owner
or annuitant made the purchase payments deemed to be withdrawn. No sales
charge is made against the withdrawal of investment income. A reduced sales
charge is imposed in connection with the withdrawal of a purchase payment to
effect an annuity if three or more Contract years have elapsed since the
Contract date, unless the annuity effected is an annuity certain. No sales
charge is imposed upon death benefit payments or upon transfers made between
subaccounts.

C. Annual Maintenance Charge

An annual maintenance charge of $30 will be deducted if and only if the
Contract fund is less than $10,000 on a Contract anniversary or at the time
a full withdrawal is effected, including a withdrawal to effect an annuity.
The charge is made by reducing accumulation units credited to a Contract
owner's account.

NOTE 4: TAXES

The operations of the subaccounts form a part of, and are taxed with, the
operations of The Prudential. Under the Internal Revenue Code, all ordinary
income and capital gains allocated to the Contract owners and annuitants are not
taxed to The Prudential. As a result, the unit values of the subaccounts are not
affected by federal income taxes on distributions received by the subaccounts.

NOTE 5: ACCUMULATION UNIT TRANSACTIONS

The number of Accumulation Units purchased and withdrawn (throughout the years
indicated) was as follows:

<TABLE>
<CAPTION>
ACCUMULATION UNITS PURCHASED
-----------------------------------------------------------------------------------------
AGGRESSIVELY CONSERVATIVELY HIGH
MONEY MANAGED MANAGED YIELD
YEARS ENDED MARKET BOND COMMON STOCK FLEXIBLE FLEXIBLE BOND
- ------------------------- ------------- ------------- ------------ ------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
December 31, 1993 (*As
Restated)................ 142,773,474 41,899,219 83,408,206 83,370,547 178,418,755 70,421,847*
December 31, 1994........ 256,018,424 19,801,000 81,852,673 72,504,920 160,880,292 79,370,956
</TABLE>

<TABLE>
<CAPTION>
ACCUMULATION UNITS PURCHASED (CONTINUED)
--------------------------------------------------------------------------
HIGH
STOCK DIVIDEND NATURAL GLOBAL GOVERNMENT
YEARS ENDED INDEX STOCK RESOURCES EQUITY SECURITIES
- ------------------------- ------------- ------------- ------------ ------------- ---------------
<S> <C> <C> <C> <C> <C>
December 31, 1993........ 55,072,353 115,884,256 21,225,028 50,964,272 114,595,879
December 31, 1994........ 31,597,341 117,804,422 33,138,799 149,424,174 59,657,506
</TABLE>

<TABLE>
<CAPTION>
ACCUMULATION UNITS WITHDRAWN
-----------------------------------------------------------------------------------------
AGGRESSIVELY CONSERVATIVELY HIGH
MONEY COMMON MANAGED MANAGED YIELD
YEARS ENDED MARKET BOND STOCK FLEXIBLE FLEXIBLE BOND
- ------------------------- ------------- ------------- ------------ ------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
December 31, 1993 (*As
Restated)................ 158,448,891 17,791,153 29,150,105 18,663,805 31,431,458 28,479,546*
December 31, 1994........ 218,629,130 25,211,160 41,956,320 38,528,310 77,208,502 64,242,151
</TABLE>

<TABLE>
<CAPTION>
ACCUMULATION UNITS WITHDRAWN (CONTINUED)
--------------------------------------------------------------------------
HIGH
STOCK DIVIDEND NATURAL GLOBAL GOVERNMENT
YEARS ENDED INDEX STOCK RESOURCES EQUITY SECURITIES
- ------------------------- ------------- ------------- ------------ ------------- ---------------
<S> <C> <C> <C> <C> <C>
December 31, 1993........ 30,270,054 15,710,500 6,443,713 7,338,627 36,131,760
December 31, 1994........ 33,043,081 47,222,133 12,587,330 58,318,882 80,605,093
</TABLE>

NOTE 6: NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SURPLUS TRANSFERS

The increase (decrease) in net assets resulting from surplus transfers
represents the net contributions of The Prudential to the Account.

<PAGE>

NOTE 7: ACCUMULATION AND ANNUITY UNIT INFORMATION

<TABLE>
<CAPTION>
ACCUMULATION UNIT VALUE
--------------------------------------------------------------------------
VALUE AT END OF YEAR
AGGRESSIVELY CONSERVATIVELY HIGH
MONEY COMMON MANAGED MANAGED YIELD
MARKET BOND STOCK FLEXIBLE FLEXIBLE BOND
--------- ----------- ----------- ----------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
December 31, 1985.................. $ 1.2102 $ 1.3325 $ 1.3716 $ 1.3131 $ 1.3284 $ --
December 31, 1986.................. 1.2739 1.5069 1.5598 1.4983 1.4985 --
December 31, 1987.................. 1.3409 1.4932 1.5668 1.4534 1.5034 0.9410
December 31, 1988.................. 1.4227 1.5964 1.8123 1.6205 1.6368 1.0523
December 31, 1989.................. 1.5358 1.7902 2.3233 1.9499 1.8923 1.0186
December 31, 1990.................. 1.6413 1.9159 2.1759 1.9634 1.9681 0.8872
December 31, 1991.................. 1.7218 2.2044 2.7093 2.4335 2.3157 1.2202
December 31, 1992.................. 1.7658 2.3345 3.0562 2.5874 2.4471 1.4171
December 31, 1993 (*As Restated)... 1.7963 2.5407 3.6806 2.9552 2.7132 1.6701*
December 31, 1994.................. 1.8469 2.4295 3.7380 2.8277 2.6551 1.6054
</TABLE>

<TABLE>
<CAPTION>
ACCUMULATION UNIT VALUE (CONTINUED)
---------------------------------------------------------------
VALUE AT END OF YEAR
HIGH
STOCK DIVIDEND NATURAL GLOBAL GOVERNMENT
INDEX STOCK RESOURCES EQUITY SECURITIES
--------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
December 31, 1985.................. $ -- $ -- $ -- $ -- $ --
December 31, 1986.................. -- -- -- -- --
December 31, 1987.................. 0.8594 -- -- -- --
December 31, 1988.................. 0.9803 1.0987 1.0379 -- --
December 31, 1989.................. 1.2683 1.3318 1.3911 1.1145 1.1079
December 31, 1990.................. 1.2077 1.2669 1.2954 0.9590 1.1639
December 31, 1991.................. 1.5480 1.5962 1.4118 1.0556 1.3354
December 31, 1992.................. 1.6386 1.7369 1.4969 1.0073 1.3966
December 31, 1993.................. 1.7757 2.0989 1.8513 1.4248 1.5534
December 31, 1994.................. 1.7723 2.1038 1.7507 1.3391 1.4556
</TABLE>

<TABLE>
<CAPTION>
ANNUITY UNIT VALUE USING A 3 1/2% ASSUMED INVESTMENT RESULT
--------------------------------------------------------------------------
VALUE AT END OF YEAR
AGGRESSIVELY CONSERVATIVELY HIGH
MONEY COMMON MANAGED MANAGED YIELD
MARKET BOND STOCK FLEXIBLE FLEXIBLE BOND
--------- ----------- ----------- ----------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
December 31, 1985.................. $ 1.1073 $ 1.2199 $ 1.2552 $ 1.2007 $ 1.2154 $ --
December 31, 1986.................. 1.1263 1.3330 1.3792 1.3238 1.3248 --
December 31, 1987.................. 1.1454 1.2763 1.3386 1.2408 1.2842 0.9130
December 31, 1988.................. 1.1741 1.3183 1.4960 1.3366 1.3510 0.9864
December 31, 1989.................. 1.2248 1.4285 1.8531 1.5541 1.5091 0.9225
December 31, 1990.................. 1.2643 1.4767 1.6754 1.5116 1.5161 0.7761
December 31, 1991.................. 1.2813 1.6417 2.0157 1.8102 1.7235 1.0312
December 31, 1992.................. 1.2692 1.6793 2.1964 1.8591 1.7593 1.1567
December 31, 1993 (*As Restated)... 1.2477 1.7661 2.5559 2.0517 1.8847 1.3172*
December 31, 1994.................. 1.2393 1.6317 2.5079 1.8968 1.7820 1.2233
</TABLE>

<TABLE>
<CAPTION>
ANNUITY UNIT VALUE USING A 3 1/2% ASSUMED INVESTMENT RESULT
(CONTINUED)
-------------------------------------------------------------------
VALUE AT END OF YEAR
HIGH
STOCK DIVIDEND NATURAL GLOBAL GOVERNMENT
INDEX STOCK RESOURCES EQUITY SECURITIES
--------- ----------- ----------- ------------- ---------------
<S> <C> <C> <C> <C> <C>
December 31, 1985.................. $ -- $ -- $ -- $ -- $ --
December 31, 1986.................. -- -- -- -- --
December 31, 1987.................. 0.8532 -- -- -- --
December 31, 1988.................. 0.9404 1.0664 1.0141 -- --
December 31, 1989.................. 1.1757 1.2490 1.3135 1.0735 1.0826
December 31, 1990.................. 1.0812 1.1476 1.1813 0.8923 1.0987
December 31, 1991.................. 1.3391 1.3970 1.2440 0.9488 1.2179
December 31, 1992.................. 1.3693 1.4684 1.2739 0.8746 1.2302
December 31, 1993.................. 1.4338 1.7036 1.5300 1.1953 1.3222
December 31, 1994.................. 1.3828 1.6499 1.3980 1.0855 1.1971
</TABLE>

Payments to annuitants under Contracts providing for a variable payout option
are based on the value of an Annuity Unit. The investment results of the Account
are reflected in the changes in the value of an Annuity Unit to the extent that
they are greater or less than the assumed investment result in the annuitant's
Contract.

<PAGE>

NOTE 8: RESTATEMENT

Subsequent to the issuance of the Account's previously issued December 31, 1993
financial statements, The Prudential determined that in the High Yield Bond
subaccount, net assets and net increase in net assets resulting from operations
were overstated by approximately $847,434 due to the overvaluation of a security
held in the High Yield Bond Portfolio of the Series Fund at December 31, 1993.
Accordingly, the comparative 1993 financial information included in the
statements of changes in net assets of the Account has been restated.

A10

<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Contract Owners of
The Prudential Individual
Variable Contract Account and the
Board of Directors of The Prudential
Insurance Company of America
Newark, New Jersey

We have audited the accompanying statements of net assets of The Prudential
Individual Variable Contract Account of The Prudential Insurance Company of
America (comprising, respectively, the Money Market, Bond, Common Stock,
Aggressively Managed Flexible, Conservatively Managed Flexible, High Yield Bond,
Stock Index, High Dividend Stock, Natural Resources, Global Equity, and
Government Securities subaccounts) as of December 31, 1994, the related
statements of operations for the periods presented in the year then ended, and
the statements of changes in net assets for each of the periods presented in the
two years then ended. 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. Our procedures included
confirmation of securities owned as of December 31, 1994. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of each of the respective subaccounts
constituting The Prudential Individual Variable Contract Account as of December
31, 1994, the results of their operations, and the changes in their net assets
for the respective stated periods in conformity with generally accepted
accounting principles.

As discussed in Note 8, the 1993 financial statements of The Prudential
Individual Variable Contract Account have been restated.

Deloitte & Touche LLP
Parsippany, New Jersey
February 10, 1995

A11

<PAGE> 1
CONSOLIDATED FINANCIAL STATEMENTS OF
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS
OF FINANCIAL POSITION
<TABLE>
<CAPTION>

DECEMBER 31,
1994 1993
------ ------
(IN MILLIONS)

<S> <C> <C>
ASSETS

Fixed maturities....................... $ 78,743 $ 79,061
Equity securities...................... 2,327 2,216
Mortgage loans......................... 26,199 27,509
Investment real estate................. 1,600 1,903
Policy loans........................... 6,631 6,456
Other long-term investments............ 5,147 4,739
Short-term investments................. 10,630 6,304
Securities purchased under
agreements to resell................. 5,591 9,656
Trading account securities............. 6,218 8,586
Cash................................... 1,109 1,666
Accrued investment income.............. 1,932 1,826
Premiums due and deferred.............. 2,712 2,549
Broker-dealer receivables.............. 7,311 9,133
Other assets........................... 7,119 9,997
Assets held in Separate Accounts....... 48,633 48,110
-------- --------
TOTAL ASSETS............................... $211,902 $219,711
======== ========
LIABILITIES, AVR AND SURPLUS
Liabilities:
Policy liabilities and insurance
reserves:
Future policy benefits and claims...... $101,589 $100,030
Unearned premiums...................... 1,144 1,146
Other policy claims and benefits
payable.............................. 1,848 1,935
Policy dividends....................... 1,686 2,018
Other policyholders' funds............. 9,097 9,874
Securities sold under agreements
to repurchase........................ 8,919 14,703
Notes payable and other borrowings..... 12,009 13,354
Broker-dealer payables................. 5,144 5,410
Other liabilities...................... 13,036 13,075
Liabilities related to
Separate Accounts...................... 47,946 47,475
-------- --------
TOTAL LIABILITIES.......................... 202,418 209,020
-------- --------
Asset valuation reserve (AVR).............. 2,035 2,687
-------- --------
Surplus:
Capital notes.......................... 298 298
Special surplus fund................... 1,097 1,091
Unassigned surplus..................... 6,054 6,615
-------- --------
TOTAL SURPLUS.............................. 7,449 8,004
-------- --------
TOTAL LIABILITIES, AVR
AND SURPLUS............................ $211,902 $219,711
======== ========
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF
OPERATIONS AND CHANGES IN SURPLUS AND ASSET
VALUATION RESERVE (AVR)

YEARS ENDED DECEMBER 31,
1994 1993 1992
----- ----- -----
(IN MILLIONS)

<S> <C> <C> <C>
REVENUE

Premiums and annuity
considerations............. $29,698 $29,982 $29,858
Net investment income........ 9,595 10,090 10,318
Broker-dealer revenue........ 3,677 4,025 3,592
Realized investment
(losses)/gains............. (450) 953 720
Other income................. 1,037 924 833
------- ------- -------
TOTAL REVENUE.................... 43,557 45,974 45,321
------- ------- -------
BENEFITS AND EXPENSES
Current and future benefits
and claims................. 30,788 30,573 32,031
Insurance and underwriting
expenses................... 4,830 4,982 4,563
Limited partnership
matters.................... 1,422 390 129
General, administrative
and other expenses......... 5,794 5,575 5,394
------- ------- -------
TOTAL BENEFITS AND
EXPENSES..................... 42,834 41,520 42,117
------- ------- -------
Income from operations
before dividends
and income taxes............. 723 4,454 3,204
Dividends to
policyholders................ 2,290 2,339 2,389
------- ------- -------
Income/(loss) before
income taxes................. (1,567) 2,115 815
Income tax
(benefit)/provision.......... (392) 1,236 468
------- ------- -------
NET INCOME/(LOSS)................ (1,175) 879 347
SURPLUS, BEGINNING
OF YEAR...................... 8,004 7,365 6,527
Issuance of capital notes
(after net charge-off
of non-admitted prepaid
postretirement benefit
cost of $113 in 1993)........ 0 185 0
Net unrealized
investment (losses)
and change in AVR............ 620 (425) 491
------- ------- -------
SURPLUS, END OF
YEAR......................... 7,449 8,004 7,365
------- ------- -------
AVR, BEGINNING OF YEAR........... 2,687 2,457 3,216
(Decrease)/increase in AVR (652) 230 (759)
------- ------- -------
AVR, END OF YEAR................. 2,035 2,687 2,457
------- ------- -------
TOTAL SURPLUS AND
AVR.......................... $ 9,484 $10,691 $ 9,822
======= ======= =======

</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

F-1
<PAGE> 2

CONSOLIDATED FINANCIAL STATEMENTS OF
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31,
1994 1993 1992
----- ----- -----
(IN MILLIONS)

<S> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES

Net income/(loss)................ $(1,175) $ 879 $ 347
Adjustments to reconcile
net income/(loss) to cash flows
from operating activities:
Increase in policy liabilities
and insurance reserves..... 1,289 2,747 3,428
Net increase in
Separate Accounts.......... (52) (59) (69)
Realized investment
losses/(gains)............. 450 (953) (720)
Depreciation, amortization
and other non-cash
items...................... 379 261 380
Decrease/(increase)
in operating assets:
Mortgage loans........... (226) (226) (1,952)
Policy loans............. (175) (174) (216)
Securities purchased
under agreements
to resell.............. 2,979 (2,049) (1,420)
Trading account
securities............. 2,447 (2,087) 351
Broker-dealer
receivables............ 1,822 (1,803) (161)
Other assets............. 1,873 (2,277) (1,041)
(Decrease)/increase in
operating liabilities:
Securities sold under
agreements to
repurchase........... (3,247) 1,134 1,967
Broker-dealer
payables............. (266) 1,067 (653)
Other liabilities...... (2,116) 2,007 841
------ ------ ------
CASH FLOWS FROM
OPERATING ACTIVITIES............ 3,982 (1,533) 1,082
------ ------ ------
CASH FLOWS FROM
INVESTING ACTIVITIES
Proceeds from the
sale/maturity of:
Fixed maturities.............. 82,834 87,840 73,326
Equity securities............. 1,426 1,725 957
Mortgage loans................ 4,154 4,789 3,230
Investment real estate........ 935 441 243
Other long-term
investments................. 1,022 1,352 2,046
Property and equipment........ 637 6 5
Payments for the purchase of:
Fixed maturities.............. (83,075) (89,034) (72,397)
Equity securities............. (1,535) (1,085) (977)
Mortgage loans................ (3,446) (3,530) (3,087)
Investment real estate........ (161) (196) (240)
Other long-term
investments................. (1,687) (531) (2,039)
Property and equipment........ (392) (640) (733)
Short-term investments (net)...... (4,281) (2,150) (1,160)
Net change in cash placed as
collateral for securities
loaned........................ 2,011 (589) (1,032)
------ ------ ------
CASH FLOWS FROM
INVESTING ACTIVITIES.......... (1,558) (1,602) (1,858)
------ ------ ------
</TABLE>

<TABLE>

<S> <C> <C> <C>
CASH FLOWS FROM
FINANCING ACTIVITIES
Net (payments)/proceeds
of short-term borrowings.... $ (1,115) $ 1,106 $ 70
Proceeds from the issuance of
long-term debt.............. 345 1,228 217
Payments for the settlement
of long-term debt........... (760) (721) (204)
Proceeds/(payments) of
unmatched securities
purchased under
agreements to resell........ 1,086 (47) (170)
(Payments)/proceeds of
unmatched securities sold
under agreements to
repurchase.................. (2,537) 1,707 1,201
Proceeds from the issuance of
capital notes............... 0 298 0
------- ------- -------
CASH FLOWS FROM
FINANCING ACTIVITIES.......... (2,981) 3,571 1,114
------- ------- -------
Net (decrease)/increase
in cash..................... (557) 436 338
Cash, beginning of year........ 1,666 1,230 892
------- ------- -------
CASH, END OF YEAR.............. $ 1,109 $ 1,666 $ 1,230
======== ======= =======

</TABLE>

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Income tax payments made, net of refunds, during 1994, 1993 and 1992 were $64
million, $933 million and $555 million, respectively. Interest payments made
during 1994, 1993 and 1992 were $1,429 million, $1,171 million and $1,272
million, respectively.

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

F-2

<PAGE> 3

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES

FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992

1. ACCOUNTING POLICIES AND PRINCIPLES

A. PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of
The Prudential Insurance Company of America ("The Prudential"), a mutual
life insurance company, and its subsidiaries (collectively, "the
Company"). The activities of the Company cover a broad range of financial
services, including life and health insurance, property and casualty
insurance, reinsurance, group health care, securities brokerage, asset
management, investment advisory services, mortgage banking and servicing,
and real estate development and brokerage. All significant intercompany
balances and transactions have been eliminated in consolidation.

B. BASIS OF PRESENTATION

The consolidated financial statements are presented in conformity with
generally accepted accounting principles ("GAAP"), which for mutual life
insurance companies and their insurance subsidiaries are statutory
accounting practices prescribed or permitted by regulatory authorities in
the domiciliary states. Certain reclassifications have been made to the
1993 and 1992 financial statements to conform to the 1994 presentation.

In 1994, The American Institute of Certified Public Accountants issued
Statement of Position 94-5, "Disclosures of Certain Matters in the
Financial Statements of Insurance Enterprises" ("SOP 94-5"), which
requires insurance enterprises to disclose in their financial statements
the accounting methods used in their statutory financial statements that
are permitted by the state insurance departments rather than prescribed
statutory accounting practices.

The Prudential, domiciled in the State of New Jersey, prepares its
statutory financial statements in accordance with accounting practices
prescribed or permitted by the New Jersey Department of Insurance ("the
Department"). Its insurance subsidiaries prepare statutory financial
statements in accordance with accounting practices prescribed or permitted
by their respective domiciliary home state insurance departments.
Prescribed statutory accounting practices include publications of the
National Association of Insurance Commissioners ("NAIC"), state laws,
regulations, and general administrative rules. Permitted statutory
accounting practices encompass all accounting practices not so prescribed.

In 1993, The Prudential issued Fixed Rate Capital Notes ("the notes").
Interest payments on the notes are pre-approved by the Department, and
principal repayment is subject to a Risk-Based Capital test. This
permitted accounting practice differs from that prescribed by the NAIC.
The NAIC practices provide for Insurance Commissioner approval of every
interest and principal payment before the payment is made. The Prudential
has included the notes as part of surplus (see Note 7).

The Prudential has established guaranty fund liabilities for the
insolvencies of certain life insurance companies. The liabilities were
established net of estimated premium tax credits and federal income tax.
Prescribed statutory accounting practices do not address the establishment
of liabilities for guaranty fund assessments.

The Company, with permission from the Department, prepares an Annual
Report that differs from the Annual Statement filed with the Department in
that subsidiaries are consolidated and certain financial statement
captions are presented differently.

C. FUTURE APPLICATION OF ACCOUNTING STANDARDS

The Financial Accounting Standards Board (the "FASB") issued Financial
Interpretation No. 40, "Applicability of Generally Accepted Accounting
Principles to Mutual Life Insurance and Other Enterprises," which, as
amended, is effective for fiscal years beginning after December 15, 1995.
Interpretation No. 40 changes the current practice of mutual life
insurance companies with respect to utilizing statutory basis financial
statements for general purposes in that it would not allow such financial
statements to be referred to as having been prepared in accordance with
GAAP. Interpretation No. 40 requires GAAP financial statements of mutual
life insurance companies to apply all GAAP pronouncements, unless
specifically exempted. Implementation of Interpretation No. 40 will
require significant effort and judgment as to determining GAAP for mutual
insurance companies' insurance operations. The Company is currently
assessing the impact of Interpretation No. 40 on its consolidated
financial statements.

D. INVESTED ASSETS

Fixed maturities, which include long-term bonds and redeemable preferred
stock, are stated primarily at amortized cost. Equity securities, which
consist primarily of common stocks, are carried at market value, which is
based on quoted market prices, where available, or prices provided by
state regulatory authorities.

F-3

<PAGE> 4

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES

FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992

As of January 1, 1994, the non-insurance subsidiaries of The Prudential
adopted Statement of Financial Accounting Standards No. 115, "Accounting
for Certain Investments in Debt and Equity Securities" ("SFAS No. 115").
Under SFAS No. 115, debt and marketable equity securities are classified
in three categories: held-to-maturity, available-for-sale and trading. The
effect of adopting SFAS No. 115 for the non-insurance subsidiaries was not
material.

Mortgage loans are stated primarily at unpaid principal balances. In
establishing reserves for losses on mortgage loans, management considers
expected losses on loans which they believe may not be collectible in full
and expected losses on foreclosures and the sale of mortgage loans.
Reserves established for potential or estimated mortgage loan losses are
included in the "Asset valuation reserve."

Policy loans are stated primarily at unpaid principal balances.

Investment real estate, except for real estate acquired in satisfaction of
debt, is carried at cost less accumulated straight-line depreciation ($748
million in 1994 and $859 million in 1993), encumbrances and permanent
impairments in value. Real estate acquired in satisfaction of debt,
included in "Other assets," is carried at the lower of cost or fair value
less disposition costs. Fair value is considered to be the amount that
could reasonably be expected in a current transaction between willing
parties, other than in forced or liquidation sale.

Included in "Other long-term investments" is the Company's net equity in
joint ventures and other forms of partnerships, which amounted to $3,357
million and $3,745 million as of December 31, 1994 and 1993, respectively.
The Company's share of net income from such entities was $354 million,
$375 million and $185 million for 1994, 1993 and 1992, respectively.

Short-term investments are stated at amortized cost, which approximates
fair value.

Securities purchased under agreements to resell and securities sold under
agreements to repurchase are collateralized financing transactions and are
carried at their contract amounts plus accrued interest. These agreements
are generally collateralized by cash or securities with market values in
excess of the obligations under the contract. It is the Company's policy
to take possession of securities purchased under resale agreements and to
value the securities daily. The Company monitors the value of the
underlying collateral and collateral is adjusted when necessary.

Trading account securities from broker-dealer operations are reported
based upon quoted market prices with unrealized gains and losses reported
in "Broker-dealer revenue."

The Company has a securities lending program whereby large blocks of
securities are loaned to third parties, primarily major brokerage firms.
As of December 31, 1994 and 1993, the estimated fair values of loaned
securities were $6,765 million and $6,520 million, respectively. Company
and NAIC policies require a minimum of 102% and 105% of the fair value of
the domestic and foreign loaned securities, respectively, to be separately
maintained as collateral for the loans. Cash collateral received is
invested in "Short-term investments," which are reflected as assets in the
Consolidated Statements of Financial Position. The offsetting collateral
liability is included in the Consolidated Statements of Financial Position
in "Other liabilities" in the amounts of $2,385 million and $374 million
at December 31, 1994 and 1993, respectively. Non-cash collateral is
recorded in memorandum records and not reflected in the consolidated
financial statements.

Net unrealized investment gains and losses result principally from changes
in the carrying values of invested assets. Net unrealized investment
losses were $(32) million, $(195) million and $(268) million for the years
ended December 31, 1994, 1993 and 1992, respectively.

The asset valuation reserve (AVR) and the interest maintenance reserve
(IMR) are required reserves for life insurance companies. The AVR is
calculated based on a statutory formula and is designed to mitigate the
effect of valuation and credit-related losses on unassigned surplus.

F-4

<PAGE> 5

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES

FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992

The components of AVR at December 31, 1994 and 1993 are as follows:

1994 1993
----- -----
(IN MILLIONS)

<S> <C> <C>
Fixed maturities, equity securities
and short-term investments............. $ 930 $1,591
Mortgage loans.......................... 674 722
Real estate and other invested assets... 431 374
------ ------
Total AVR............................... $2,035 $2,687
====== ======
</TABLE>

In 1993, the Company made a voluntary contribution to the mortgage loan
component of the AVR in the amount of $305 million.

The IMR is designed to reduce the fluctuations of surplus resulting from
market interest rate movements. Interest rate-related realized capital
gains and losses are generally deferred and amortized into investment
income over the remaining life of the investment sold. The IMR balance,
included in "Other policyholders' funds," was $502 million and $1,539
million at December 31, 1994 and 1993, respectively. Net realized
investment (losses)/gains of $(929) million, $1,082 million and $626
million were deferred during the years ended December 31, 1994, 1993 and
1992, respectively. IMR amounts amortized into investment income were $107
million, $118 million and $51 million for the years ended December 31,
1994, 1993 and 1992, respectively.

E. FUTURE POLICY BENEFITS, LOSSES AND CLAIMS

Reserves for individual life insurance are calculated using various
methods, interest rates and mortality tables, which produce reserves that
meet the aggregate requirements of state laws and regulations.
Approximately 39% of individual life insurance reserves are determined
using the net level premium method, or by using the greater of a net level
premium reserve or the policy cash value. About 56% of individual life
insurance reserves are calculated according to the Commissioner's Reserve
Valuation Method ("CRVM") or methods which compare CRVM reserves to policy
cash values.

For group life insurance, 24% of reserves are determined using net level
premium methods and various mortality tables and interest rates. About 53%
of group life reserves are associated with extended death benefits. For
the most part, these are calculated using modified group tables at various
interest rates. The remainder of group life reserves are unearned premium
reserves (calculated using the 1960 Commissioner's Standard Group Table),
reserves for group life fund accumulations and other miscellaneous
reserves. Reserves for group and individual annuity contracts are
determined using the Commissioner's Annuity Reserve Valuation Method.

For life insurance and annuities, unpaid claims include estimates of both
the death benefits on reported claims and those which are incurred but not
reported. Unpaid claims and claim adjustment expenses for other than life
insurance and annuities include estimates of benefits and associated
settlement expenses for reported losses and a provision for losses
incurred but not reported.

F-5

<PAGE> 6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES

FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992

Activity in the liability for unpaid claims and claim adjustment
expenses is:

1994 1993
----------------------- ------------------------
ACCIDENT PROPERTY ACCIDENT PROPERTY
AND AND AND AND
HEALTH CASUALTY HEALTH CASUALTY
--------- ---------- ---------- ----------
(IN MILLIONS)

<S> <C> <C> <C> <C>
Balance at January 1 ......... $ 2,654 $ 4,869 $ 2,623 $ 4,712
Less reinsurance recoverables 15 1,070 22 1,107
-------- -------- -------- --------

Net balance at January 1 ..... 2,639 3,799 2,601 3,605
-------- -------- -------- --------

Incurred related to:
Current year ................ 7,398 2,541 7,146 2,364
Prior years ................. (105) 158 (167) 109
-------- -------- -------- --------

Total incurred ............... 7,293 2,699 6,979 2,473
-------- -------- -------- --------

Paid related to:
Current year ................ 5,568 1,237 5,336 1,119
Prior years ................. 1,649 1,163 1,605 1,160
-------- -------- -------- --------

Total paid ................... 7,217 2,400 6,941 2,279
-------- -------- -------- --------

Net balance at December 31 ... 2,715 4,098 2,639 3,799
Plus reinsurance recoverables 23 1,018 15 1,070
-------- -------- -------- --------

Balance at December 31 ....... $ 2,738 $ 5,116 $ 2,654 $ 4,869
======== ======== ======== ========

</TABLE>

As a result of changes in estimates of insured events in prior years, the
declines of $105 million and $167 million in the provision for claims and
claim adjustment expenses for accident and health business in 1994 and
1993, respectively, were due to lower-than-expected trends in claim costs
and an accelerated decline in indemnity health business.

As a result of changes in estimates of insured events in prior years, the
provision for claims and claim adjustment expenses for property and
casualty business (net of reinsurance recoveries of $47 million and $120
million in 1994 and 1993, respectively) increased by $158 million and $109
million in 1994 and 1993, respectively, due to increased loss development
and reserve strengthening for asbestos and environmental claims.

F. REVENUE RECOGNITION AND RELATED EXPENSES

Life premiums are recognized as income over the premium paying period of
the related policies. Annuity considerations are recognized as revenue
when received.

Health and property and casualty premiums are earned ratably over the
terms of the related insurance and reinsurance contracts or policies.
Unearned premium reserves are established to cover the unexpired portion
of premiums written. Such reserves are computed by pro rata methods for
direct business and are computed either by pro rata methods or using
reports received from ceding companies for reinsurance. Premiums which
have not yet been reported are estimated and accrued.

Expenses incurred in connection with acquiring new insurance business,
including such acquisition costs as sales commissions, are charged to
operations as incurred in "Insurance and underwriting expenses."

Commission revenues in "Broker-dealer revenue" and related broker-dealer
expenses in "General, administrative and other expenses" are accrued when
transactions are executed.

F-6

<PAGE> 7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES

FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992

G. INCOME TAXES

Under the Internal Revenue Code ("the Code"), The Prudential and its life
insurance subsidiaries are taxed on their gain from operations after
dividends to policyholders. In calculating this tax, the Code requires the
capitalization and amortization of policy acquisition expenses.

The Code also imposes an "equity tax" on mutual life insurance companies
based on an imputed surplus which, in effect, reduces the deduction for
policyholder dividends. The amount of the equity tax is estimated in the
current year based on the anticipated equity tax rate, and is adjusted in
subsequent years as the rate is finalized.

The Prudential files a consolidated federal income tax return with all of
its domestic subsidiaries. The provision for taxes reported in these
financial statements also includes tax liabilities for the foreign
subsidiaries. Net operating losses of the non-life subsidiaries may be
used in this consolidated return, but are limited each year to the lesser
of 35% of cumulative eligible non-life subsidiary losses or 35% of life
company taxable income.

As of January 1, 1993, the non-insurance subsidiaries of The Prudential
adopted Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes" ("SFAS No. 109"). Under SFAS No. 109, such subsidiaries
recognize deferred tax liabilities or assets for the expected future tax
consequences of events that have been recognized in their financial
statements. Included in "Income tax (benefit)/provision" are deferred
taxes of $(477) million, $21 million and $(8) million for the years ended
December 31, 1994, 1993 and 1992, respectively. The cumulative effect of
adopting SFAS No. 109 was not material.

At December 31, 1994, the Company had consolidated non-life tax loss
carryforwards of $598 million which will expire between 1998 and 2009, if
not utilized.

H. SEPARATE ACCOUNTS

Separate Account assets and liabilities, reported in the Consolidated
Statements of Financial Position at estimated market value, represent
segregated funds which are administered for pension and other clients. The
assets consist of common stocks, long-term bonds, real estate, mortgages
and short-term investments. The liabilities consist of reserves
established to meet withdrawal and future benefit payment contractual
provisions. Investment risks associated with market value changes are
generally borne by the clients, except to the extent of minimum guarantees
made by the Company with respect to certain accounts. Separate Account net
investment income, realized and unrealized capital gains and losses,
benefit payments and change in reserves are included in "Current and
future benefits and claims."

I. DERIVATIVE FINANCIAL INSTRUMENTS

Derivatives used for trading purposes are recorded in the Consolidated
Statements of Financial Position at fair value at the reporting date.
Realized and unrealized changes in fair values are recognized in
"Broker-dealer revenue" and "Other income" in the Consolidated Statements
of Operations in the period in which the changes occur. Gains and losses
on hedges of existing assets or liabilities are included in the carrying
amount of those assets or liabilities and are deferred and recognized in
earnings in the same period as the underlying hedged item. For interest
rate swaps that qualify for settlement accounting, the interest
differential to be paid or received under the swap agreements is accrued
over the life of the agreements as a yield adjustment. Gains and losses on
early termination of derivatives that modify the characteristics of
designated assets and liabilities are deferred and are amortized as an
adjustment to the yield of the related assets or liabilities over their
remaining lives.

Derivatives used in activities that support life and health insurance and
annuity contracts are recorded at fair value with unrealized gains and
losses recorded in "Net unrealized investment (losses) and change in AVR."
Upon termination of derivatives supporting life and health insurance and
annuity contracts, the interest-related gains and losses are amortized
through the IMR.

2. RESTRICTED ASSETS AND SPECIAL DEPOSITS

Assets in the amounts of $5,901 million and $5,164 million at December 31,
1994 and 1993, respectively, were on deposit with governmental authorities or
trustees as required by law.

Assets valued at $5,855 million and $4,430 million at December 31, 1994 and
1993, respectively, were maintained as compensating balances or pledged as
collateral for bank loans and other financing agreements.

F-7

<PAGE> 8

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES

FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992

Restricted cash of $455 million and $444 million at December 31, 1994 and
1993, respectively, was included in "Cash" in the Consolidated Statements of
Financial Position and Cash Flows.

3. FIXED MATURITIES

The carrying value and estimated fair value of fixed maturities at December
31, 1994 and 1993 are as follows:

<TABLE>
<CAPTION>
1994 1993
------------------------------------------- -----------------------------------------------
GROSS GROSS ESTIMATED GROSS GROSS ESTIMATED
CARRYING UNREALIZED UNREALIZED FAIR CARRYING UNREALIZED UNREALIZED FAIR
VALUE GAINS LOSSES VALUE VALUE GAINS LOSSES VALUE
-------- -------- -------- -------- -------- -------- -------- --------
(IN MILLIONS)

<S> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Treasury securities
and obligations of U.S.
government corporations
and agencies .......... $13,624 $ 123 $ 647 $13,100 $14,979 $ 754 $ 94 $15,639
Obligations of U.S. .....
states and their
political subdivisions 2,776 32 165 2,643 3,212 187 3 3,396
Fixed maturities issued
by foreign governments
and their agencies and
political subdivisions 3,101 37 153 2,985 2,716 188 3 2,901
Corporate securities .... 54,144 1,191 1,772 53,563 51,548 4,390 300 55,638
Mortgage-backed
securities ............ 4,889 82 148 4,823 6,478 257 220 6,515
Other fixed maturities .. 209 0 0 209 128 0 0 128
------- ------- ------- ------- ------- ------- ------- -------
Total ................... $78,743 $ 1,465 $ 2,885 $77,323 $79,061 $ 5,776 $ 620 $84,217
======= ======= ======= ======= ======= ======= ======= =======

</TABLE>

The carrying value and estimated fair value of fixed maturities at December
31, 1994 categorized by contractual maturity, are shown below. Actual
maturities will differ from contractual maturities because borrowers may
prepay obligations with or without call or prepayment penalties.

<TABLE>
<CAPTION>
ESTIMATED
CARRYING FAIR
VALUE VALUE
----------- -----------
(IN MILLIONS)

<S> <C> <C>
Due in one year or less .............. $ 2,746 $ 2,760
Due after one year through five years 24,405 24,000
Due after five years through ten years 18,972 18,536
Due after ten years .................. 27,731 27,204
------- -------
73,854 72,500
Mortgage-backed securities ........... 4,889 4,823
------- -------
Totals ............................... $78,743 $77,323
======= =======

</TABLE>

Proceeds from the sale and maturity of fixed maturities during 1994, 1993 and
1992 were $82,834 million, $87,840 million and $73,326 million, respectively.
Gross gains of $693 million, $2,473 million and $2,034 million, and gross
losses of $2,009 million, $698 million and $530 million were realized on such
sales during 1994, 1993 and 1992, respectively (see Note 1D).

The Company invests in both investment grade and non-investment grade
securities. The Securities Valuation Office of the NAIC rates the fixed
maturities held by insurers (which account for approximately 98% of the
Company's total fixed maturities balance at December 31, 1994 and 1993) for
regulatory purposes and groups investments into six categories ranging from
highest quality bonds to those in or near default. The lowest three NAIC
categories represent, for the most part, high-yield securities and are
defined by the NAIC as including any security with a public agency rating of
B+ or B1 or less.

F-8

<PAGE> 9

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES

FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992

Included in "Fixed maturities" are securities that are classified by the NAIC
as being in the lowest three rating categories. These approximate 1.6% and
2.0% of the Company's assets at December 31, 1994 and 1993, respectively. At
December 31, 1994 and 1993, their estimated fair value varied from the
carrying value by $(78) million and $42 million, respectively.

4. MORTGAGE LOANS

Mortgage loans at December 31, 1994 and 1993 are as follows:

<TABLE>
<CAPTION>
1994 1993
----------------------- -------------------
AMOUNT PERCENTAGE AMOUNT PERCENTAGE
(IN MILLIONS)

<S> <C> <C> <C> <C>
Commercial and agricultural loans:
In good standing ......... $ 19,752 75.4% $ 20,916 76.0%
In good standing
with restructured terms 1,412 5.4% 1,177 4.3%
Past due 90 days or more . 339 1.3% 590 2.2%
In process of foreclosure 387 1.5% 415 1.5%
Residential loans .......... 4,309 16.4% 4,411 16.0%
-------- ------ -------- ------
Total mortgage loans ....... $ 26,199 100.0% $ 27,509 100.0%
======== ====== ======== ======

</TABLE>

At December 31, 1994, the Company's mortgage loans were collateralized by the
following property types: office buildings (30%), retail stores (20%),
residential properties (17%), apartment complexes (12%), industrial buildings
(11%), agricultural properties (7%) and other commercial properties (3%). The
mortgage loans are geographically dispersed throughout the United States and
Canada with the largest concentrations in California (25%) and New York (8%).
Included in these balances are mortgage loans with affiliated joint ventures
of $684 million and $689 million at December 31, 1994 and 1993, respectively.

5. EMPLOYEE BENEFIT PLANS

A. PENSION PLANS

The Company has several defined benefit pension plans which cover
substantially all of its employees. The benefits are generally based on
career average earnings and credited length of service.

The Company's funding policy is to contribute annually the amount necessary
to satisfy the Internal Revenue Service contribution guidelines. The
pension plans are accounted for in accordance with Statement of Financial
Accounting Standards No. 87, "Employers' Accounting for Pensions" ("SFAS
No. 87").

Employee pension benefit plan status at September 30, 1994 and 1993 is as
follows:

1994 1993
-------- --------
(IN MILLIONS)

<S> <C> <C>
Actuarial present value of benefit obligation:
Accumulated benefit obligation, including vested benefits of
$2,956 in 1994 and $3,053 in 1993 ........................ $(3,255) $(3,401)
======= =======
Projected benefit obligation ............................... (4,247) (4,409)
Plan assets at fair value .................................... 5,704 5,950
------- -------
Plan assets in excess of projected benefit obligation ........ 1,457 1,541
Unrecognized net asset existing at the date of the initial
application of SFAS No. 87 ................................. (980) (1,086)
Unrecognized prior service cost since initial application of
SFAS No. 87 ................................................ 228 253
Unrecognized net loss from actuarial experience since initial
application of SFAS No. 87 ................................. 9 25
Additional minimum liability ................................. (8) 0
------- -------
Prepaid pension cost ......................................... $ 706 $ 733
======= =======

</TABLE>

F-9

<PAGE> 10

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES

FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992

Plan assets consist primarily of equity securities, bonds, real estate and
short-term investments, of which $4,155 million are included in the
Consolidated Statement of Financial Position at December 31, 1994.

In compliance with statutory accounting principles, The Prudential's
prepaid pension costs of $765 million and $784 million at December 31,
1994 and 1993, respectively, were considered non-admitted assets. These
assets are excluded from the consolidated assets and the changes in these
non-admitted assets of ($19) million and $142 million in 1994 and 1993,
respectively, are reported in "General, administrative and other expenses"
in the Consolidated Statements of Operations.

The components of the net periodic pension expense/(benefit) for 1994 and
1993 are as follows:

<TABLE>
<CAPTION>
1994 1993 1992
------ ------ ------
(IN MILLIONS)

<S> <C> <C> <C>
Service cost - benefits earned during the year $ 163 $ 133 $ 133
Interest cost on projected benefit obligation 311 301 296
Actual return on assets ...................... 56 (854) (367)
Net amortization and deferral ................ (639) 301 (150)
Net charge for special termination benefits .. 156 0 0
----- ----- -----
Net periodic pension expense/(benefit) ...... $ 47 $(119) $ (88)
===== ===== =====

</TABLE>

The net expense relating to the Company's pension plans is $28 million, $23
million and $29 million in 1994, 1993 and 1992, respectively, which considers
the changes in The Prudential's non-admitted prepaid pension asset of $(19)
million, $142 million and $117 million, respectively.

As a result of a special early retirement program, net curtailment gains and
special termination benefits of approximately $156 million are included in
the net periodic pension expense for the year ended December 31, 1994.

The assumptions used in 1994 and 1993 to develop the accumulated pension
benefit obligation were:

1994 1993
-------- --------

<S> <C> <C>
Discount rate ................................ 8.25-8.5% 7.0%
Expected long-term rate of return on assets... 8.5-9.0% 8.5-9.0%
Rate of increase in compensation levels ...... 5.0-5.5% 4.5-5.0%

</TABLE>

B. POSTRETIREMENT AND POSTEMPLOYMENT BENEFITS

The Company provides certain life insurance and health care benefits for
its retired employees. Substantially all of the Company's employees may
become eligible to receive a benefit if they retire after age 55 with at
least 10 years of service.

Effective in 1993, the costs of postretirement benefits, with respect to
The Prudential, are recognized in accordance with the accounting policy
issued by the NAIC. The NAIC's policy is similar to Statement of Financial
Accounting Standards No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions," except that the NAIC policy excludes
non-vested employees. The Prudential has elected to amortize its
transition obligation over 20 years.

Prior to 1993, the Company's policy was to fund the cost of providing
these benefits in the years that the employees were providing services to
the Company. The Company defined this service period as originating at an
assumed entry age and terminating at an average retirement age. Annual
deposits to the fund were determined using the entry age normal actuarial
cost method, including amortization of prior service costs for employees'
services rendered prior to the initial funding of the plan. The provision
for the year ended December 31, 1992 was $143 million.

The Prudential's net periodic postretirement benefit cost required to be
recognized for 1994 and 1993, under the NAIC policy is $110 million and
$125 million, respectively. In 1994 and 1993, The Prudential voluntarily
accrued an additional $10 million and $62 million, respectively, which
represents a portion of the obligation for active non-vested employees
(the total of this obligation is $520 million and $594 million as of
December 31, 1994 and 1993, respectively).

Company funding of its postretirement benefit obligations totaled $31
million and $404 million in 1994 and 1993, respectively. The Company
contributes amounts to the plan in excess of covered expenses being paid.

F-10

<PAGE> 11

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES

FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992

The postretirement benefit plan status as of September 30, 1994 and 1993 is
as follows:

<TABLE>
<CAPTION>
1994 1993
-------- --------
(IN MILLIONS)

<S> <C> <C>
Accumulated postretirement benefit obligation (APBO):
Retirees ........................................... $(1,337) $(1,211)
Fully eligible active plan participants ............ (188) (445)
------- -------
Total APBO ...................................... (1,525) (1,656)
Plan assets at fair value ............................ 1,304 1,335
------- -------
Accumulated postretirement benefit obligation in
excess of plan assets .............................. (221) (321)
Unrecognized transition obligation ................... 448 525
Unrecognized net (gain)/loss from actuarial experience (41) 69
------- -------
Prepaid postretirement benefit cost in accordance
with the NAIC accounting policy .................... 186 273
Additional amount accrued ............................ (72) (62)
------- -------
Prepaid postretirement benefit cost .................. $ 114 $ 211
======= =======

</TABLE>

Plan assets consist of group and individual variable life insurance policies,
group life and health contracts and short-term investments, of which $996
million are included in the Consolidated Statement of Financial Position at
December 31, 1994.

In compliance with statutory accounting principles, The Prudential's prepaid
postretirement benefit costs of $127 million and $217 million at December 31,
1994 and 1993, respectively, are considered non-admitted assets. These assets
are excluded from the consolidated assets and the changes in these
non-admitted assets of $(90) million and $217 million in 1994 and 1993,
respectively, are reported in "General, administrative and other expenses" in
1994 and in "Issuance of capital notes" in 1993.

Net periodic postretirement benefit cost for 1994 and 1993 includes the
following components:

1994 1993
-------- --------
(IN MILLIONS)

<S> <C> <C>
Cost of newly eligible or vested employees... $ 38 $ 41
Interest cost ................................ 112 124
Actual return on plan assets ................. (98) (86)
Net amortization and deferral ................ (13) 15
Amortization of transition obligation ........ 23 39
Net charge for special termination benefits... 58 0
Additional contribution expense .............. 10 62
----- -----
Net periodic postretirement benefit cost ..... $ 130 $ 195
===== =====
</TABLE>

The net reduction to surplus relating to the Company's postretirement benefit
plans is $40 million and $412 million in 1994 and 1993, respectively, which
considers the changes in the non-admitted prepaid postretirement benefit cost
of $(90) million and $217 million in 1994 and 1993, respectively.

As a result of a special early retirement program, curtailment expenses and
special termination benefits of approximately $58 million are included in the
net periodic postretirement benefit cost for the year ended December 31,
1994.

The assumptions used in 1994 and 1993 to measure the accumulated
postretirement benefits obligation were:

<TABLE>
<CAPTION>
1994 1993
-------- --------
<S> <C> <C>
Discount rate ...................................... 8.25-8.5% 7.0-7.5%
Expected long-term rate of return on plan assets.... 9.0% 9.0%
Salary scale ....................................... 5.5% 5.0%

</TABLE>

F-11

<PAGE> 12

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES

FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992

The health care cost trend rates used varied from 9.1% to 13.9%, depending
on the plan, with one plan being graded to 6.5% by the year 2012 and all
others being graded to 6.0% by 2006. Increasing the health care cost trend
rate by one percentage point in each year would increase the
postretirement benefit obligation as of September 30, 1994, by $243
million and the total of the cost of newly eligible or vested employees
and interest cost for 1994 by $21 million.

In 1994, the Company changed its method of accounting for the recognition
of costs and obligations relating to severance, disability and related
benefits to former or inactive employees after employment, but before
retirement, to an accrual method. Previously, these benefits were expensed
when paid. The effect of this change was to decrease surplus by
approximately $160 million in 1994.

6. NOTES PAYABLE AND OTHER BORROWINGS

Notes payable and other borrowings consisted of the following at December 31,
1994 and 1993:

<TABLE>
<CAPTION>
DECEMBER 31, 1994 DECEMBER 31, 1993
------------------------------ ------------------------------
WEIGHTED AVERAGE WEIGHTED AVERAGE
BALANCE COST OF FUNDS BALANCE COST OF FUNDS
-------- ---------------- -------- --------------
(IN MILLIONS)

<S> <C> <C> <C> <C>
Short-term debt..... $ 9,188 5.7% $ 9,435 3.7%
Long-term debt...... 2,821 6.5% 3,919 5.3%
------- -------
$12,009 $13,354
======= =======

</TABLE>

Scheduled repayments of long-term debt as of December 31, 1994, are as
follows: $594 million in 1995, $269 million in 1996, $362 million in 1997,
$268 million in 1998, $666 million in 1999, and $662 million thereafter. As
of December 31, 1994, the Company had $8,120 million in lines of credit from
numerous financial institutions of which $3,925 million were unused.

7. CAPITAL NOTES

In 1993, The Prudential issued 6.875% Fixed Rate Capital Notes ("the notes")
in the aggregate principal amount of $300 million. The notes mature on April
15, 2003, and may not be redeemed prior to maturity and will not be entitled
to any sinking fund. The notes are subordinated in right of payment to all
claims of policyholders and to senior indebtedness. Payment of the principal
amount of the notes at maturity is subject to the following conditions: (i)
The Prudential shall not be in payment default with respect to any senior
indebtedness or class of policyholders, (ii) no state or federal agency shall
have instituted proceedings seeking reorganization, rehabilitation or
liquidation of The Prudential, and (iii) immediately after making such
payment, Total Adjusted Capital would exceed 200% of its Authorized Control
Level Risk-Based Capital. The terms "Total Adjusted Capital" and "Authorized
Control Level" are defined by the Risk-Based Capital for Life and/or Health
Insurers Model Act. The payment of interest on the notes is subject to
satisfaction of conditions (i) and (ii) above. Unpaid accrued interest
amounted to $25 million at December 31, 1994 and 1993. The net proceeds from
the notes, approximately $298 million, were contributed to a voluntary
employee benefit association trust to prefund certain obligations of The
Prudential to provide postretirement medical and other benefits. This
resulted in a prepaid asset, which is non-admitted for statutory purposes.
The net increase to surplus from the issuance of the notes, including a tax
benefit of $104 million less the charge-off of the non-admitted asset of $217
million, was $185 million (see Note 5B).

8. SPECIAL SURPLUS FUND

The special surplus fund includes required contingency reserves of $1,097
million and $1,091 million as of December 31, 1994 and 1993, respectively.

9. FAIR VALUE INFORMATION

The fair value amounts have been determined by the Company using available
information and reasonable valuation methodologies for those accounts for
which fair value disclosures are required. Considerable judgment is
necessarily applied in interpreting data to develop the estimates of fair
value. Accordingly, the estimates presented may not be realized in a current
market exchange. The use of different market assumptions and/or estimation
methodologies could have a material effect on the estimated fair values. The
following methods and assumptions were used in calculating the fair values.
(For all other financial instruments presented in the table, the carrying
value is a reasonable estimate of fair value.)

F-12
<PAGE> 13

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES

FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992

FIXED MATURITIES. Fair values for fixed maturities, other than private
placement securities, are based on quoted market prices or estimates from
independent pricing services. Fair values for private placement securities
are estimated using a discounted cash flow model which considers the current
market spreads between the U.S. Treasury yield curve and corporate bond yield
curve, adjusted for the type of issue, its current quality and its remaining
average life. The fair value of certain non-performing private placement
securities is based on amounts provided by state regulatory authorities.

MORTGAGE LOANS. The fair value of residential mortgages is based on recent
market trades or quotes, adjusted where necessary for differences in risk
characteristics. The fair value of the commercial mortgage and agricultural
loan portfolio is primarily based upon the present value of the scheduled
cash flows discounted at the appropriate U.S. Treasury rate, adjusted for the
current market spread for a similar quality mortgage. For certain
non-performing and other loans, fair value is based upon the value of the
underlying collateral.

POLICY LOANS. The estimated fair value of policy loans is calculated using a
discounted cash flow model based upon current U.S. Treasury rates and
historical loan repayments.

DERIVATIVE FINANCIAL INSTRUMENTS. The fair value of swap agreements is
estimated based on the present value of future cash flows under the
agreements discounted at the applicable zero coupon U.S. Treasury rate and
swap spread. The fair value of forwards and futures is estimated based on
market quotes for a transaction with similar terms, while the fair value of
options is based principally on market quotes. The fair value of loan
commitments is estimated based on fees actually charged or those currently
charged for similar arrangements, adjusted for changes in interest rates and
credit quality subsequent to origination.

INVESTMENT-TYPE INSURANCE CONTRACT LIABILITIES. Fair values for the Company's
investment-type insurance contract liabilities are estimated using a
discounted cash flow model, based on interest rates currently being offered
for similar contracts.

NOTES PAYABLE AND OTHER BORROWINGS. The estimated fair value of notes payable
and other borrowings is based on the borrowing rates currently available to
the Company for debt with similar terms and maturities.

The following table discloses the carrying amounts and estimated fair values
of the Company's financial instruments at December 31, 1994 and 1993:

<TABLE>
<CAPTION>
1994 1993
------------------------------- ----------------------------
ESTIMATED ESTIMATED
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
--------- --------- -------- ---------
(IN MILLIONS)

<S> <C> <C> <C> <C>
Financial assets:
Fixed maturities ..................... $78,743 $77,323 $79,061 $84,217
Equity securities .................... 2,327 2,327 2,216 2,216
Mortgage loans ....................... 26,199 24,955 27,509 28,004
Policy loans ......................... 6,631 6,018 6,456 6,568
Short-term investments ............... 10,630 10,630 6,304 6,304
Securities purchased under
agreements to resell ............... 5,591 5,591 9,656 9,656
Trading account securities ........... 6,218 6,218 8,586 8,586
Cash ................................. 1,109 1,109 1,666 1,666
Broker-dealer receivables ............ 7,311 7,311 9,133 9,133
Assets held in Separate Accounts ..... 48,633 48,633 48,110 48,110

Financial liabilities:

Investment-type insurance contracts .. 39,747 38,934 41,149 42,668
Securities sold under agreements
to repurchase ...................... 8,919 8,919 14,703 14,703
Notes payable and other borrowings ... 12,009 11,828 13,354 13,625
Broker-dealer payables ............... 5,144 5,144 5,410 5,410
Liabilities related to Separate
Accounts ............................. 47,946 47,946 47,475 47,475
Derivative financial instruments - net
(see Note 10) ...................... 392 397 253 303

</TABLE>

F-13

<PAGE> 14

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES

FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992

10. DERIVATIVE AND OFF-BALANCE-SHEET CREDIT-RELATED INSTRUMENTS

A. DERIVATIVE FINANCIAL INSTRUMENTS

Statement of Financial Accounting Standards No. 119, "Disclosures about
Derivative Financial Instruments and Fair Value of Financial
Instruments," effective for 1994, requires certain disclosures about
derivative financial instruments and other financial instruments with
similar characteristics ("derivatives"). Derivatives include swaps,
forwards, futures, options and loan commitments subject to market risk,
all of which are used by the Company in the normal course of business in
both trading and other than trading activities.

The Company uses derivatives in trading activities primarily to meet the
financing and hedging needs of its customers and to trade for its own
account. The Company also uses derivatives for purposes other than
trading to reduce exposure to interest rate, currency and other forms of
market risk.

The table below summarizes the Company's outstanding positions by
derivative instrument as of December 31,1994. The amounts presented are
classified as either trading or other than trading, based on
management's intent at the time of contract inception and throughout the
life of the contract. The table includes the estimated fair values of
outstanding derivative positions only and does not include the fair
values of associated financial and non-financial assets and liabilities,
which generally offset derivative fair values. The fair value amounts
presented do not reflect the netting of amounts pursuant to rights of
setoff, qualifying master netting agreements with counterparties or
collateral arrangements. The table shows that less than 5% of derivative
fair values were not reflected in the Company's Consolidated Statement
of Financial Position.

DERIVATIVE FINANCIAL INSTRUMENTS
AS OF DECEMBER 31, 1994
(IN MILLIONS)

TRADING OTHER THAN TRADING
-------------------- ----------------------
ESTIMATED ESTIMATED
NOTIONAL FAIR VALUE NOTIONAL FAIR VALUE
-------- ---------- -------- ----------

<S> <C> <C> <C> <C> <C>
Swaps Assets $13,852 $ 837 $ 184 $ 9
Liabilities 14,825 1,216 4,993 48
Forwards Assets 21,988 300 2,720 24
Liabilities 19,898 289 3,112 19
Futures Assets 1,520 40 4,296 17
Liabilities 1,878 35 505 3
Options Assets 2,924 31 2,407 8
Liabilities 3,028 38 2,217 2
Loan commitments Assets 0 0 212 2
Liabilities 0 0 1,543 15
------- ------- ------- -------
Total Assets $40,284 $ 1,208 $ 9,819 $ 60
======= ======= ======= =======
Liabilities $39,629 $ 1,578 $12,370 $ 87
======= ======= ======= =======

</TABLE>

TOTAL
----------------------------------------------
CARRYING ESTIMATED
NOTIONAL AMOUNT FAIR VALUE
-------- -------- ----------

<S> <C> <C> <C> <C>
Swaps Assets $14,036 $ 845 $ 846
Liabilities 19,818 1,236 1,264
Forwards Assets 24,708 312 324
Liabilities 23,010 299 308
Futures Assets 5,816 30 57
Liabilities 2,383 35 38
Options Assets 5,331 34 39
Liabilities 5,245 40 40
Loan commitments Assets 212 (2) 2
Liabilities 1,543 1 15
------- ------- -------
Total Assets $50,103 $ 1,219 $ 1,268*
======= ======= =======
Liabilities $51,999 $ 1,611 $ 1,665*
======= ======= =======

</TABLE>

* $1,233 of Assets and $1,596 of Liabilities are reflected in the Consolidated
Statement of Financial Position

F-14

<PAGE> 15

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES

FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992

DERIVATIVES HELD FOR TRADING PURPOSES. The Company uses derivatives for
trading purposes in securities broker-dealer activities and in a
limited-purpose swap subsidiary. Net trading revenues for the year ended
December 31, 1994, relating to forwards, futures and swaps were $107 million,
$33 million and $8 million, respectively. Net trading revenues for options
were not material. Average fair value for trading derivatives in an asset
position during the year ended December 31, 1994, was $1,526 million and for
derivatives in a liability position was $1,671 million. Of those derivatives
held for trading purposes at December 31, 1994, 60.0% of notional consisted
of interest rate derivatives, 33.7% consisted of foreign exchange
derivatives, and 6.3% consisted of equity and commodity derivatives.

DERIVATIVES HELD FOR PURPOSES OTHER THAN TRADING. Of the total notional of
derivatives held for purposes other than trading at December 31, 1994, 23.0%
were used by the Company to hedge its investment portfolio to reduce interest
rate, currency and other market risks, 75.8% were used to hedge interest rate
risk related to the Company's mortgage banking subsidiary activities, and
1.2% were used to hedge interest and currency risks associated with the
Company's debt issuances. Of those derivatives held for purposes other than
trading at December 31, 1994, 85.0% of notional consisted of interest rate
derivatives, 13.9% consisted of foreign exchange derivatives, and 1.1%
consisted of equity and commodity derivatives.

Derivatives used to hedge the Company's investment portfolio, including
futures, options and forwards, are typically short-term in nature and are
intended to minimize exposure to market fluctuations or to change the
characteristics of the Company's asset/liability mix, consistent with the
Company's risk management activities. At December 31, 1994, net gains of $0.7
million relating to futures used as hedges of anticipated bond investments
were deferred and included in "Other liabilities." The investments being
hedged are expected to be made in the first quarter of 1995. The Company's
mortgage banking subsidiary hedges the interest rate risk associated with
mortgage loans and mortgage-backed securities held for sale and with unfunded
loans for which a rate of interest has been guaranteed. At December 31, 1994,
net gains of $0.8 million relating to forwards, futures and options used as
hedges of unfunded loan commitments were deferred as "Other liabilities." The
deferred gains were included in the carrying amounts of the loans when
funded, which is generally within sixty days from the commitment date. The
Company's mortgage banking subsidiary also hedges its exposure to future
changes in interest rates on interest-sensitive liabilities and hedges the
prepayment risk associated with its mortgage servicing portfolio. At December
31, 1994, net gains of $6.5 million relating to futures used as hedges of
anticipated borrowings were deferred and included in "Other liabilities." The
borrowings being hedged are expected to be issued by early 1996. The Company
also uses derivatives, particularly swaps and forwards, to manage the
interest rate and foreign exchange risks associated with its notes payable
and other borrowings.

B. OFF-BALANCE-SHEET CREDIT-RELATED INSTRUMENTS

During the normal course of its business, the Company is party to financial
instruments with off-balance-sheet credit risk such as commitments, financial
guarantees, loans sold with recourse and letters of credit. Commitments
include commitments to purchase and sell mortgage loans, the unfunded portion
of commitments to fund investments in private placement securities, and
unused credit card and home equity lines. The Company also provides financial
guarantees incidental to other transactions and letters of credit that
guarantee the performance of customers to third parties. These credit-related
financial instruments have off-balance-sheet credit risk because only their
origination fees, if any, and accruals for probable losses, if any, are
recognized in the Consolidated Statements of Financial Position until the
obligation under the instrument is fulfilled or expires. These instruments
can extend for several years and expirations are not concentrated in any
period. The Company seeks to control credit risk associated with these
instruments by limiting credit, maintaining collateral where customary and
appropriate, and performing other monitoring procedures.

The notional amount of these instruments, which represents the Company's
maximum exposure to credit loss from other parties' non-performance, was
$17,389 million and $18,666 million at December 31, 1994 and 1993,
respectively. Because many of these amounts expire without being advanced in
whole or in part, the amounts do not represent future cash flows. The above
notional amounts include $4,150 million and $3,066 million of unused
available lines of credit under credit card and home equity commitments as of
December 31, 1994 and 1993, respectively. The Company has not experienced,
and does not anticipate experiencing, all of its customers exercising their
entire available lines of credit at any given point in time.

The estimated fair value of off-balance-sheet credit related instruments was
$(91.3) million and $13.0 million at December 31, 1994 and 1993,
respectively. The total fair value at December 31, 1994, includes $(13.3)
million for fixed-rate loan commitments, which are subject to market risk.
The estimated fair value was determined based on fees currently charged for
similar arrangements, adjusted for changes in interest rate and credit
quality that occurred subsequent to origination.

F-15

<PAGE> 16

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES

FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992

11. CONTINGENCIES

A. ENVIRONMENTAL-RELATED CLAIMS

The Company receives claims under expired contracts which assert alleged
injuries and/or damages relating to or resulting from toxic torts, toxic
waste and other hazardous substances. The liabilities for such claims
cannot be estimated by traditional reserving techniques. As a result of
judicial decisions and legislative actions, the coverage afforded under
these contracts may be expanded beyond their original terms. Extensive
litigation between insurers and insureds over these issues continues and
the outcome is not predictable, nor is there any clear emerging trend.
In establishing the unpaid claim reserves for these losses, management
considered the available information. However, given the expansion of
coverage and liability by the courts and legislatures in the past, and
potential for other unfavorable trends in the future, the ultimate cost
of these claims could increase from the levels currently established.

B. LAWSUITS

Various lawsuits against the Company have arisen in the course of the
Company's business. In certain of these matters, large and/or
indeterminate amounts are sought.

In 1993, Prudential Securities Incorporated (PSI), a subsidiary of The
Prudential, entered into an agreement with the Securities and Exchange
Commission, the National Association of Securities Dealers, Inc., and
state securities commissions whereby PSI agreed to pay $330 million into
a settlement fund to pay eligible claims on certain limited partnership
matters. Under this agreement, if partnership matter claims exceed the
established settlement fund, PSI is obligated to pay such additional
claims.

In October 1994, the United States Attorney for the Southern District of
New York (the "U.S. Attorney") filed a complaint against PSI in
connection with its sale of certain limited partnerships.
Simultaneously, PSI entered into an agreement to comply with certain
conditions for a period of three years, and to pay an additional $330
million into the settlement fund. At the end of the three-year period,
assuming PSI has fully complied with the terms of the agreement, the
U.S. Attorney will institute no further action.

In the opinion of management, PSI is in compliance with all provisions
of the aforementioned agreements and, after consideration of applicable
accruals, the ultimate liability of such litigation, including
partnership settlement matters, will not have a material adverse effect
on the Company's financial position.

F-16

<PAGE> 17

INDEPENDENT AUDITORS' REPORT

To the Board of Directors of The Prudential Insurance Company of America
Newark, New Jersey

We have audited the accompanying consolidated statements of financial
position of The Prudential Insurance Company of America and subsidiaries as
of December 31, 1994 and 1993, and the related consolidated statements of
operations and changes in surplus and asset valuation reserve and of cash
flows for each of the three years in the period ended December 31, 1994.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of The Prudential Insurance Company
of America and subsidiaries as of December 31, 1994 and 1993, and the results
of their operations and their cash flows for each of the three years in the
period ended December 31, 1994 in conformity with generally accepted
accounting principles.

Deloitte & Touche LLP
Parsippany, New Jersey
March 1, 1995

F-17

<PAGE>

PART C

OTHER INFORMATION

<PAGE>

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS

(a) Financial Statements

(1) Financial Statements of The Prudential Individual Variable Contract
Account (Registrant) consisting of the Statements of Net Assets, as of
December 31, 1994; the Statements of Operations for the periods ended
December 31, 1994; the Statements of Changes in Net Assets for the
periods ended December 31, 1994 and 1993; and the Notes relating
thereto appear in the statement of additional information (Part B of
the Registration Statement).

(2) Consolidated Financial Statements of The Prudential Insurance Company
of America (Depositor) and subsidiaries consisting of the Consolidated
Statements of Financial Position as of December 31, 1994 and 1993; the
Consolidated Statements of Operations and Changes in Surplus and Asset
Valuation Reserve/Mandatory Securities Valuation Reserve and the
Consolidated Statements of Cash Flows for the years ended December 31,
1994, 1993 and 1992; and the Notes relating thereto appear in the
statement of additional information (Part B of the Registration
Statement).

(b) Exhibits

(1) Resolution of the Board of Directors of The Prudential Insurance
Company of America establishing The Prudential Individual Variable
Contract Account. (Note 2)

(2) Agreements for custody of securities and similar investments--Not
Applicable.

(3) (a) Distribution Agreement between Pruco Securities Corporation
(Underwriter) and The Prudential Insurance Company of America
(Depositor). (Note 3)

(b) Proposed form of Selected Broker Agreement between Pruco
Securities Corporation and brokers with respect to sale of the
Contracts. (Note 4)

(4) (a) The Prudential Discovery Plus Contract. (Note 4)

(b) Endorsement ORD 86972-89 to the VAC-89 Contract for use in all
states when issuing a Contract to a juvenile. (Note 5)

(c) Endorsement COMB 84890-86 to the VAC-89 Contract for use in all
states when issuing a Contract in a qualified market. (Note 5)

(d) Limitation Provisions ORD 80445 Ed 8-88 to the VAC-89 Contract
for use in all states. (Note 6)

(e) Limitation Provisions VIP 7-88 to the VAC-89 Contract for use in
all states. (Note 6)

(f) Limitation Provisions WVQ 2-88 to the VAC-89 Contract for use in
all states. (Note 6)

(g) Waiver of Withdrawal Charges rider ORD 88753-92 to the VAC-89
Contract (at issue). (Note 9)

(h) Waiver of Withdrawal Charges rider ORD 88754-92 to the VAC-89
Contract (after issue). (Note 9)

(i) Spousal Continuance Rider ORD 89011-93. (Note 10)

(j) Endorsement altering the Assignment provision ORD 83921-95 (Note
11)

(k) Endorsement altering the Death of Annuitant provision ORD
89319-95 (at issue). (Note 11)

(5) (a) Application form for The Prudential Discovery Plus Contract.
(Note 4)

(b) Application for an Annuity contract ORD 87348-92. (Note 10)

(6) (a) Charter of The Prudential Insurance Company of America, as
amended February 26, 1988. (Note 7)

(b) By-laws of The Prudential Insurance Company of America, as
amended January 10, 1995. (Note 13)

(7) Contract of reinsurance in connection with variable annuity
contract--Not Applicable.

(8) Other material contracts performed in whole or in part after the date
the registration statement is filed:

(a) Purchase Agreement between The Prudential Series Fund, Inc. and
The Prudential. (Note 3)

(9) Opinion of Counsel and consent to its use as to legality of the
securities being registered. (Note 1)

(10) Written consent of Deloitte & Touche LLP, independent auditors.
(Note 1)

(11) All financial statements omitted from Item 23, Financial
Statements--Not Applicable.

(12) Agreements in consideration for providing initial capital between or
among Registrant, Depositor, Underwriter, or initial Contract
owners--Not Applicable.

(13) Schedule of Performance Computations. (Note 1)

C-1
<PAGE>

(14) Powers of Attorney. (Note 12)

(27) Financial Data Schedule (Note 1)

(Note 1) Filed herewith.

(Note 2) Incorporated by reference to Form N-8B-2, Registration No. 2-80897,
filed December 15, 1982, on behalf of The Prudential Individual
Variable Contract Account.

(Note 3) Incorporated by reference to Pre-Effective Amendment No. 2 to Form
S-6, Registration No. 2-80897, filed March 10, 1983, on behalf of The
Prudential Individual Variable Contract Account.

(Note 4) Incorporated by reference to Registrant's Form N-4, filed November 8,
1988.

(Note 5) Incorporated by reference to pre-Effective Amendment No. 1 to this
Registration Statement, filed January 17, 1989.

(Note 6) Incorporated by reference to Post-Effective Amendment No. 1 to this
Registration Statement, filed March 2, 1989.

(Note 7) Incorporated by reference to Post-Effective Amendment No. 2 to Form
S-6, Registration No. 33-20000, filed March 2, 1989, on behalf of The
Prudential Variable Appreciable Account.

(Note 8) Incorporated by reference to Post-Effective Amendment No. 4 to Form
S-6, Registration No. 33-20000, filed March 2, 1990, on behalf of The
Prudential Variable Appreciable Account.

(Note 9) Incorporated by reference to Post-Effective Amendment No. 7 to this
Registration Statement, filed April 28, 1993.

(Note 10) Incorporated by reference to Post-Effective Amendment No. 8 to Form
N-4, Registration No. 33-25434, filed April 28, 1994.

(Note 11) Incorporated by reference to Post-Effective Amendment No. 9 to Form
N-4, Registration No. 33-25434, filed February 27, 1995.

(Note 12) Incorporated by reference to Post-Effective Amendment No. 15 to Form
S-6, Registration No. 33-20000, filed April XX, 1995 on behalf of the
Prudential Variable Appreciable Account.

(Note 13) Incorporated by reference to Post-Effective Amendment No. 26 to Form
N-3, Registration No. 2-76580, filed April XX, 1995 on behalf of the
Prudential Variable Contract Account-10.

C-2
<PAGE>

ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR

Incorporated by reference to The Prudential Individual Variable Contract Account
prospectus under "Directors and Officers" contained in Part A of this
registration statement.

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

The Prudential Insurance Company of America ("The Prudential") is a mutual life
insurance company organized under the laws of New Jersey. The subsidiaries of
The Prudential are listed on the Organization Chart set forth on the following
pages.

The Prudential may be deemed to control the Prudential Series Fund, Inc., a
Maryland corporation which is registered as an open-end, diversified, management
investment company under the Investment Company Act of 1940, all the shares of
which are held by The Prudential and the following separate accounts which are
registered as unit investment trusts under the Investment Company Act of 1940:
The Prudential Variable Appreciable Account, The Prudential Individual Variable
Contract Account (Registrant), The Prudential Qualified Individual Variable
Contract Account, The Prudential Variable Contract Account-24 (separate accounts
of The Prudential); the Pruco Life PRUvider Variable Appreciable Account, the
Pruco Life Variable Universal Account, the Pruco Life Variable Insurance
Account, the Pruco Life Variable Appreciable Account, the Pruco Life Single
Premium Variable Life Account, the Pruco Life Single Premium Variable Annuity
Account (separate accounts of Pruco Life Insurance Company ["Pruco Life"]); the
Pruco Life of New Jersey Variable Insurance Account, the Pruco Life of New
Jersey Variable Appreciable Account, the Pruco Life of New Jersey Single Premium
Variable Life Account, and the Pruco Life of New Jersey Single Premium Variable
Annuity Account (separate accounts of Pruco Life Insurance Company of New Jersey
["Pruco Life of New Jersey"]). Pruco Life, a corporation organized under the
laws of Arizona, is a direct wholly-owned subsidiary of The Prudential. Pruco
Life of New Jersey, a corporation under the laws of New Jersey, is a direct
wholly-owned subsidiary of Pruco Life, and an indirect wholly-owned subsidiary
of The Prudential.

The Prudential holds all of the shares of Prudential's Gibraltar Fund, a
Delaware corporation, in three of its separate accounts. Each of these separate
accounts is a unit investment trust registered under the Investment Company Act
of 1940. Prudential's Gibraltar Fund is registered as an open-end, diversified,
management investment company under the Investment Company Act of 1940.

In addition, The Prudential may also be deemed to be under common control with
The Prudential Variable Contract Account-2, The Prudential Variable Contract
Account-10, and The Prudential Variable Contract Account-11, separate accounts
of The Prudential, all of which are registered as open-end, diversified,
management investment companies under the Investment Company Act of 1940.

The subsidiaries of The Prudential and short descriptions of each are listed
under Item 25 of Post-Effective Amendment No. 28 to the Form N-1A Registration
Statement for The Prudential Series Fund, Inc., Registration No. 2-80896, filed
February 1, 1995, the text of which is hereby incorporated.

ITEM 27. NUMBER OF CONTRACT OWNERS

As of February 24, 1995, there were 33,477 Contract owners of qualified
Contracts offered by the Registrant, and 66,732 Contract owners of non-qualified
Contracts offered by the Registrant.

C-3
<PAGE>

ITEM 28. INDEMNIFICATION

The Prudential Directors' and Officers' Liability and Corporation Reimbursement
Program, purchased by The Prudential from Aetna Casualty & Surety Company, CNA
Insurance Company, Lloyds of London, Great American Insurance Company, Reliance
Insurance Company, Corporate Officers & Directors Assurance Ltd., A.C.E.
Insurance Company, Ltd., XL Insurance Company, Ltd., and Zurich-American
Insurance Company, provides coverage for "Loss" (as defined in the policies)
arising from any claim or claims by reason of any actual or alleged act, error,
misstatement, misleading statement, omission, or breach of duty by persons in
the discharge of their duties solely in their capacities as directors or
officers of The Prudential, any of its subsidiaries, or certain investment
companies affiliated with The Prudential. Coverage is also provided to the
individual directors or officers for such Loss, for which they shall not be
indemnified. Loss essentially is the legal liability on claims against a
director or officer, including adjudicated damages, settlements and reasonable
and necessary legal fees and expenses incurred in defense of adjudicatory
proceedings and appeals therefrom. Loss does not include punitive or exemplary
damages or the multiplied portion of any multiplied damage award, criminal or
civil fines or penalties imposed by law, taxes or wages, or matters which are
insurable under the law pursuant to which the policies are construed.

There are a number of exclusions from coverage. Among the matters excluded are
Losses arising as the result of (1) claims brought about or contributed to by
the criminal or deliberate fraudulent acts of a director or officer, and (2)
claims arising from actual or alleged performance of, or failure to perform,
services as, or in any capacity similar to, an investment adviser, investment
banker, underwriter, broker or dealer, as those terms are defined in the
Securities Act of 1933, the Securities Exchange Act of 1934, the Investment
Advisers Act of 1940, the Investment Company Act of 1940, any rules or
regulations thereunder, or any similar federal, state or local statute, rule or
regulation.

The limit of coverage under the Program for both individual and corporate
reimbursement coverage is $150,000,000. The retention for corporate
reimbursement coverage is $10,000,000 per loss.

The relevant provisions of New Jersey law permitting or requiring
indemnification, New Jersey being the state of organization of The Prudential,
can be found in Section 14A:3-5 of the New Jersey Statutes Annotated. The text
of The Prudential's by-law 27, which relates to indemnification of officers and
directors, is incorporated by reference to Exhibit (6)(b) to this Registration
Statement.

Insofar as indemnification for liabilities 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 UNDERWRITERS

(a) Pruco Securities Corporation also acts as principal underwriter for the
Pruco Life PRUvider Variable Appreciable Account, the Pruco Life Variable
Insurance Account, the Pruco Life Variable Appreciable Account, the Pruco
Life Variable Universal Account, the Pruco Life Single Premium Variable
Life Account, the Pruco Life Single Premium Variable Annuity Account, the
Pruco Life of New Jersey Variable Insurance Account, the Pruco Life of New
Jersey Variable Appreciable Account, the Pruco Life of New Jersey Single
Premium Variable Life Account, the Pruco Life of New Jersey Single Premium
Variable Annuity Account, The Prudential Variable Appreciable Account, The
Prudential Qualified Individual Variable Contract Account, Prudential's
Gibraltar Fund, and The Prudential Series Fund, Inc.

C-4
<PAGE>

(b) Name and Principal Positions and Offices
Business Address With Underwriter
---------------- ----------------
E. Michael Caulfield **** Director
Timothy E. Feige ** Director
Robert P. Hill** Director
Ira J. Kleinman ** Director
Donald G. Southwell *** Director
James Tignanelli *** Chairman of the Board and Director
Stephen P. Tooley *** Vice President and Comptroller
Martin Pfinsgraff * Treasurer
Thomas C. Castano ** Secretary

* Principal Business Address: Prudential Plaza, Newark, NJ 07102
** Principal Business Address: 213 Washington Street, Newark, NJ 07102
*** Principal Business Address: 1111 Durham Avenue, South Plainfield, NJ 07080
**** Principal Business Address: 477 Martinsville Road, Liberty Corner, NJ 07938

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS

All accounts, books or other documents required to be maintained by Section 31
(a) of the 1940 Act and the rules promulgated thereunder are maintained by the
Registrant through The Prudential Insurance Company of America, Prudential
Plaza, Newark, New Jersey 07102-3777.

ITEM 31. MANAGEMENT SERVICES

Summary of any contract not discussed in Part A or Part B of the registration
statement under which management-related services are provided to the
Registrant--Not Applicable.

ITEM 32. UNDERTAKINGS

(a) Registrant undertakes to file a post-effective amendment to this Registrant
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 so long as payments under the variable annuity contracts may
be accepted.

(b) Registrant undertakes to 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
postcard or similar written communication affixed to or included in the
prospectus that the applicant can remove to send for a statement of
additional information.

(c) Registrant undertakes to deliver any statement of additional information
and any financial statements required to be made available under this Form
promptly upon written or oral request.

(d) Restrictions on withdrawal under Section 403(b) Contracts are imposed in
reliance upon, and in compliance with, a no-action letter issued by the
Chief of the Office of Insurance Products and Legal Compliance of the
Securities and Exchange Commission to the American Council of Life
Insurance on November 28, 1988.

C-5
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that this Amendment is filed solely for one or more of the purposes
specified in Rule 485(b)(1) under the Securities Act of 1933 and that no
material event requiring disclosure in the prospectus, other than one listed in
Rule 485(b)(1), has occurred since the filing date of a Post-Effective Amendment
filed under Rule 485(a) which has become effective, and has caused this
Registration Statement to be signed on its behalf by the undersigned thereunto
duly authorized, and its seal hereunto affixed and attested, all in the city of
Newark and the State of New Jersey, on this 27th day of April, 1995.

(Seal) The Prudential Individual Variable Contract Account

(Registrant)

By: The Prudential Insurance Company of America

(Depositor)

Attest: /s/ THOMAS C. CASTANO By: /s/ ESTHER H. MILNES
--------------------- ---------------------
Thomas C. Castano Esther H. Milnes
Assistant Secretary Vice President

As required by the Securities Act of 1933, this Post-Effective Amendment No. 10
to the Registration Statement has been signed by the following persons in the
capacities and on the date indicated.

Signature and Title
-------------------
/s/ * April 27, 1995
- --------------------------------------
Arthur F. Ryan
Chairman of the Board, President, and
Chief Executive Officer

/s/ *
- --------------------------------------
Garnett L. Keith, Jr.
Vice Chairman and Director
*By: /s/ THOMAS C. CASTANO
/s/ * ---------------------
- -------------------------------------- Thomas C. Castano
Eugene M. O'Hara (Attorney-in-Fact)
Senior Vice President and Comptroller
and Chief Financial Officer

/s/ *
- --------------------------------------
Franklin E. Agnew
Director

/s/ *
- --------------------------------------
Frederic K. Becker
Director

/s/ *
- --------------------------------------
William W. Boeschenstein
Director

/s/ *
- --------------------------------------
Lisle C. Carter, Jr.
Director

C-6
<PAGE>

/s/ * April 27, 1995
- --------------------------------------
James G. Cullen
Director

/s/ *
- --------------------------------------
Carolyne K. Davis
Director

/s/ *
- --------------------------------------
Roger A. Enrico
Director

/s/ * By: /s/ THOMAS C. CASTANO
- -------------------------------------- ---------------------
Allan D. Gilmour Thomas C. Castano
Director (Attorney-in-Fact)

/s/ *
- --------------------------------------
William H. Gray, III
Director

/s/ *
- --------------------------------------
Jon F. Hanson
Director

/s/ *
- --------------------------------------
Constance J. Horner
Director

/s/ *
- --------------------------------------
Allen F. Jacobson
Director

/s/ *
- --------------------------------------
Burton G. Malkiel
Director

/s/ *
- --------------------------------------
John R. Opel
Director

/s/ *
- --------------------------------------
Charles R. Sitter
Director

/s/ *
- --------------------------------------
Donald L. Staheli
Director

/s/ *
- --------------------------------------
Richard M. Thomson
Director

/s/ *
- --------------------------------------
P. Roy Vagelos, M.D.
Director

C-7
<PAGE>

/s/ * April 27, 1995
- --------------------------------------
Stanley C. Van Ness
Director

/s/ * By: /s/ THOMAS C. CASTANO
- -------------------------------------- ---------------------
Paul A. Volcker Thomas C. Castano
Director (Attorney-in-Fact)

/s/ *
- --------------------------------------
Joseph H. Williams
Director

C-8

<PAGE>

EXHIBIT INDEX

(9) Opinion of Counsel and consent to its use as to legality
of the securities being registered. .......................... Page C-10

(10) Written consent of Deloitte & Touche LLP, independent
auditors. .................................................... Page C-11

(13) Schedule of Performance Computations ......................... Page C-12

(27) Financial Data Schedule ...................................... Page C-16

C-9

Exhibit 9

April 24, 1995

The Prudential Insurance Company
of America
Prudential Plaza
Newark, New Jersey 07102-3777

Gentlemen:

In my capacity as Chief Counsel Variable Products of The Prudential Insurance
Company of America and Chief Legal Officer and Assistant Secretary of Pruco Life
Insurance Company, I have reviewed the establishment of The Prudential
Individual Variable Contract Account (the "Account") on October 12, 1982 by the
Board of Directors of The Prudential Insurance Company of America ("The
Prudential") as a separate account for assets applicable to certain variable
annuity contracts, pursuant to the provisions of Section 17B:28-7 of the Revised
Statutes of New Jersey. I am responsible for oversight of the preparation and
review of the Registration Statements on Form N-4, as amended, filed by The
Prudential with the Securities and Exchange Commission (Registration No. 2-80897
and Registration No. 33-25434) under the Securities Act of 1933 for the
registration of certain variable annuity contracts issued with respect to the
Account.

I am of the following opinion:

1. The Prudential was duly organized under the laws of New Jersey and is
a validly existing corporation.

2. The Account has been duly created and is validly existing as a
separate account pursuant to the aforesaid provisions of New Jersey
law.

3. The portion of the assets held in the Account equal to the reserve and
other liabilities for variable benefits under the variable annuity
contracts is not chargeable with liabilities arising out of any other
business The Prudential may conduct.

4. The variable annuity contracts are legal and binding obligations of
The Prudential, in accordance with their terms.

In arriving at the foregoing opinion, I have made such examination of law
and examined such records and other documents as I judged to be necessary or
appropriate.

I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.

Very truly yours,

Clifford E. Kirsch

C-10

Exhibit 10

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Post-Effective Amendment No. 10 to Registration
Statement No. 33-25434 on Form N-4 of The Prudential Individual Variable
Contract Account of The Prudential Insurance Company of America of our report
dated February 10, 1995, relating to the financial statements of The Prudential
Individual Variable Contract Account, and of our report dated March 1, 1995,
except for Note 12, as to which the date is April 25, 1995, relating to the
consolidated financial statements of The Prudential Insurance Company of America
and subsidiaries appearing in the Statement of Additional Information, which is
part of such Registration Statement, and to the reference to us under the
heading "Experts", also appearing in such Statement of Additional Information.

/s/ DELOITTE & TOUCHE LLP
Parsippany, New Jersey
April 27, 1995

C-11

ANNUALIZED RATES OF RETURN

PRU DISCO PLUS BOND STOCK AGGR CONS HI DIV HY NTL RES STIX GLEQ GVSC
-------------- ------ ------- ------ ------ ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 YEAR % OF RETURN ............... -4.38% 1.56% -4.31% -2.14% 0.23% -3.88% -5.43% -0.19% -6.02% -6.29% TABLE 2
ERV(ENDING REDEEMABLE VALUE) ..... 956.23 1015.60 956.87 978.59 1002.32 961.25 945.69 998.10 939.82 937.05
AMT SUBJ TO LOAD IF + RETURN ..... 904.38 898.44 904.31 902.14 899.77 903.88 905.43 900.19 906.02 906.29
AMT SUBJ TO LOAD IF - RETURN ..... 860.61 914.04 861.18 880.73 902.08 865.12 851.12 898.29 845.84 843.35
AMT SUBJ TO LOAD ................. 860.61 898.44 861.18 880.73 899.77 865.12 851.12 898.29 845.84 843.35
1ST YEAR SALE LOAD ............... 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00%
AMT OF LOAD ...................... 60.24 62.89 60.28 61.65 62.98 60.56 59.58 62.88 59.21 59.03
ERV LESS LOAD .................... 895.99 952.71 896.59 916.94 939.33 900.69 886.11 935.22 880.62 878.02
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
RETURN W/SALES LOAD .............. -10.40% -4.73% -10.34% -8.31% -6.07% -9.93% -11.39% -6.48% -11.94% -12.20% TABLE 1

5 YEAR % OF RETURN ............... 35.71% 60.89% 45.01% 40.31% 57.96% 57.62% 25.85% 39.74% 20.16% 31.39%
ERV (ENDING REDEEMABLE VALUE) .... 1357.14 1608.93 1450.15 1403.14 1579.62 1576.16 1258.49 1397.36 1201.57 1313.86
ANNUALIZED RETURN W/O SALE LOAD .. 6.30% 9.98% 7.72% 7.01% 9.57% 9.53% 4.71% 6.92% 3.74% 5.61% TABLE 2

AMT SUBJ TO LOAD IF + RETURN ..... 864.29 839.11 854.99 859.69 842.04 842.38 874.15 860.26 879.84 868.61
AMT SUBJ TO LOAD IF - RETURN ..... 1221.43 1448.04 1305.13 1262.83 1421.66 1418.55 1132.64 1257.62 1081.41 1182.48
AMT SUBJ TO LOAD ................. 864.29 839.11 854.99 859.69 842.04 842.38 874.15 860.26 879.84 868.61
5TH (OR INCEPTION) SALE LOAD ..... 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00%
AMT OF LOAD ...................... 34.57 33.56 34.20 34.39 33.68 33.70 34.97 34.41 35.19 34.74
ERV LESS LOAD .................... 1322.57 1575.37 1415.95 1368.75 1545.94 1542.47 1223.52 1362.95 1166.38 1279.12
YRS IN EXISTENCE ................. 5.00 5 5 5 5 5 5 5 5 5

ANNUALIZED RETURN W/SALE LOAD .... 5.75% 9.52% 7.20% 6.48% 9.10% 9.05% 4.12% 6.39% 3.13% 5.05% TABLE 1

SINCE INCPT % OF RETURN .......... 51.93% 98.45% 70.72% 59.36% 84.64% 48.91% 54.00% 74.03% 35.78% 45.47%
ERV(ENDING REDEEMABLE VALUE) ..... 1519.28 1984.52 1707.17 1593.60 1846.45 1489.09 1539.97 1740.32 1357.76 1454.69
ANNUALIZED RETURN W/O SALE LOAD .. 7.43% 12.46% 9.60% 8.31% 11.08% 7.06% 7.68% 9.96% 5.55% 6.84% TABLE 2

AMT SUBJ TO LOAD IF + RETURN ..... 848.07 801.55 829.28 840.64 815.36 851.09 846.00 825.97 864.22 854.53
AMT SUBJ TO LOAD IF - RETURN ..... 1367.35 1786.07 1536.45 1434.24 1661.80 1340.18 1385.97 1566.29 1221.98 1309.22
AMT SUBJ TO LOAD ................. 848.07 801.55 829.28 840.64 815.36 851.09 846.00 825.97 864.22 854.53
5TH (OR INCEPTION) SALE LOAD ..... 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00%
AMT OF LOAD ...................... 33.92 32.06 33.17 33.63 32.61 34.04 33.84 33.04 34.57 34.18
ERV LESS LOAD .................... 1485.35 1952.46 1674.00 1559.97 1813.83 1455.04 1506.13 1707.28 1323.19 1420.51
YRS IN EXISTENCE ................. 5.84 5.83710 5.83710 5.83710 5.83710 5.83710 5.83710 5.83710 5.66461 5.66461
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
ANNUALIZED RETURN W/SALE LOAD .... 7.01% 12.15% 9.23% 7.92% 10.74% 6.64% 7.27% 9.60% 5.07% 6.39% TABLE 1

</TABLE>

C-12

<PAGE>

UNIT VALUES FOR EVERY YEAR-END SINCE INCEPTION FOR THE PRU DISCO PLUS PRODUCT

PRU DISCO PLUS BOND STOCK AGGR CONS HI DIV HY NTL RES STIX GLEQ GVSC
- -------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------
INCEPTION DATE 27-Feb-89 27-Feb-89 27-Feb-89 27-Feb-89 27-Feb-89 27-Feb-89 27-Feb-89 27-Feb-89 01-May-89 01-May-89
- -------------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------
WHOLE YEARS SINCE
INCEPTION 5 5 5 5 5 5 5 5 5 5

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCEPTION UNIT VALUE 1.59913 1.88358 1.65637 1.66611 1.13935 1.07811 1.13685 1.01838 0.98625 1.00062

31-Dec-89 1.79017 2.32328 1.94994 1.89226 1.33181 1.01855 1.39112 1.26833 1.11445 1.10787

31-Dec-90 1.91594 2.17588 1.96344 1.96812 1.26685 0.88724 1.29539 1.20765 0.95902 1.16389

31-Dec-91 2.20438 2.70927 2.43353 2.31570 1.59617 1.22019 1.41184 1.54800 1.05559 1.33535

31-Dec-92 2.33452 3.05622 2.58742 2.44709 1.73693 1.41713 1.49691 1.63861 1.00733 1.39657

31-Dec-93 2.54072 3.68057 2.95516 2.71321 2.09889 1.67012 1.85126 1.77569 1.42483 1.55337

30-Dec-94 2.42952 3.73800 2.82770 2.65511 2.10375 1.60540 1.75071 1.77231 1.33909 1.45559

</TABLE>
C-13

<PAGE>

MMKT SUBACCOUNT YIELD
For the 7 days ended 12/31/94

PRUDISCO+ - NO FEE
MMKT
UNIT VALUE
----------
Sun. 12/25/94 ....... 1.84561
Mon. 12/26/94 ....... 1.84561
Tue. 12/27/94 ....... 1.84561
Wed. 12/28/94 ....... 1.84584
Thu. 12/29/94 ....... 1.84606
Fri. 12/30/94 ....... 1.84692
Sat. 12/31/94 ....... 1.84714
---------
YIELD 0.0828994% * (365/7) = 4.3226%

EFFECTIVE YIELD ( 1.000828994 ^(365/7))-1 = 4.4155%

C-14

<PAGE>

UNIT VALUES FOR EVERY YEAR-END SINCE INCEPTION FOR THE PRU DISCO PLUS PRODUCT

PRU DISCO PLUS BOND
-------------- ----
INCEPTION DATE 27-Feb-89

WHOLE YEARS SINCE
INCEPTION 5

UNIT VALUE

INCEPTION 1.59913

31-Dec-89 1.79017

31-Dec-90 1.91594

31-Dec-91 2.20438

31-Dec-92 2.33452

31-Dec-93 2.54072

30-Dec-94 2.42952

ANNUALIZED RATES OF RETURN

PRU DISCO PLUS BOND
-------------- ----
1 YEAR % OF RETURN (E25-E23)/E23
ERV(ENDING REDEEMABLE VALUE) ((E53+1)*1000)
AMT SUBJ TO LOAD IF + RETURN +E54-(E54*0.1+1000*E53
AMT SUBJ TO LOAD IF - RETURN +E54-(E54*0.1)
AMT SUBJ TO LOAD @IF(E53>0,E55,E56)
1ST YEAR SALE LOAD 0.07
AMT OF LOAD +E57*E58
ERV LESS LOAD +E54-E59

RETURN W/SALES LOAD (E60/1000)-1

5 YEAR % OF RETURN (E25-E15)/E15
ERV(ENDING REDEEMABLE VALUE) ((E67+1)*1000)
ANNUALIZED RETURN W/O SALE LOAD (E68/1000)^(1/E77)-1

AMT SUBJ TO LOAD IF + RETURN +E68-(E68*0.1+1000*E67
AMT SUBJ TO LOAD IF - RETURN +E68-(E68*0.1)
AMT SUBJ TO LOAD @IF(E67>0,E71,E72)
5TH (OR INCEPTION) SALE LOAD ($E$96)
AMT OF LOAD +E73*E74
ERV LESS LOAD +E68-E75
YRS IN EXISTENCE 5

ANNUALIZED RETURN W/SALE LOAD (E76/1000)^(1/E77)-1

SINCE INCPT % OF RETURN (E25-E13)/E13
ERV(ENDING REDEEMABLE VALUE) ((E81+1)*1000)
ANNUALIZED RETURN W/O SALE LOAD (E82/1000)^(1/E91)-1

AMT SUBJ TO LOAD IF + RETURN +E82-(E82*0.1+1000*E81
AMT SUBJ TO LOAD IF - RETURN +E82-(E82*0.1)
AMT SUBJ TO LOAD @IF(E81>0,E85,E86)
5TH (OR INCEPTION) SALE LOAD ($E$96)
AMT OF LOAD +E87*E88
ERV LESS LOAD +E82-E89
YRS IN EXISTENCE @SUM($C$25-E7)/365.25
ANNUALIZED RETURN W/SALE LOAD (E90/1000)^(1/E91)-1

C-15

<ARTICLE> 6

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 4,618,191
<INVESTMENTS-AT-VALUE> 4,558,775
<RECEIVABLES> 0
<ASSETS-OTHER> (30)
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 4,558,775
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 333,519
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 4,558,745
<DIVIDEND-INCOME> 161,153
<INTEREST-INCOME> 0
<OTHER-INCOME> 90,121
<EXPENSES-NET> 51,976
<NET-INVESTMENT-INCOME> 109,177
<REALIZED-GAINS-CURRENT> (223)
<APPREC-INCREASE-CURRENT> (293,646)
<NET-CHANGE-FROM-OPS> (94,571)
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<NET-CHANGE-IN-ASSETS> 722,641
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<PER-SHARE-NAV-BEGIN> 0
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<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>