PRUDENTIAL INDIVIDUAL VARIABLE CONTRACT ACCOUNT, 485BPOS, 1996-04-25

PRUDENTIAL INDIVIDUAL VARIABLE CONTRACT ACCOUNT
485BPOS, 1996-04-25

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AS FILED WITH THE SEC ON _____________. REGISTRATION NO. 2-80897

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. 22 [X]

AND

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]

AMENDMENT NO. 27 [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 1995 was filed on
February 29, 1996.

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

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

[ ] on pursuant to paragraph (b) of Rule 485
-----------------
(date)

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

[x] on May 1, 1996 pursuant to paragraph (a) of Rule 485
-----------------
(date)

<PAGE>

<TABLE>

CROSS REFERENCE SHEET
(AS REQUIRED BY RULE 495(A) UNDER THE 1933 ACT)
<CAPTION>

N-4 ITEM NUMBER AND CAPTION LOCATION
- --------------------------- --------
<S> <C>
PART A
1. Cover Page ................................... Cover Page

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

3. Synopsis or Highlights........................ Brief Description of the Contract; Fee Table

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
Contracts; The Fixed-Rate Option

6. Deductions and Expenses....................... Brief Description of the Contract; Charges, Fees and
Deductions; Differences Under the WVA-83 Contract

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; Differences Under the WVA-83
Contract; Voting Rights; Ownership of the Contract;
State Regulation
Part B: Participation in Divisible Surplus

8. Annuity Period................................ Part A: Brief Description of the Contract; Effecting
an Annuity; Differences Under the WVA-83 Contract
Part B: Item 22, Determination of Subaccount Unit
Values and of the Amount of Monthly Variable
Annuity Payment

9. Death Benefit................................. Death Benefit; Effecting an Annuity; Differences
Under the WVA-83 Contract

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

11. Redemptions................................... Brief Description of the Contract; Short-Term
Cancellation Right or "Free Look"; Withdrawals;
Charges, Fees and Deductions; Differences Under the
WVA-83 Contract; 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
</TABLE>

<PAGE>

N-4 ITEM NUMBER AND CAPTION LOCATION
- --------------------------- --------
<S> <C>
PART B

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

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

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

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 Underwriter

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

22. Annuity Payments.............................. Part A: Valuation of Contract Owner's Contract
Fund; Effecting an Annuity; Differences Under the
WVA-83 Contract
Part B: Determination of Subaccount Unit Values and
of the Amount of Monthly Variable Annuity Payment

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.
</TABLE>

<PAGE>

PART A

INFORMATION REQUIRED IN A PROSPECTUS

<PAGE>

PROSPECTUS

MAY 1, 1996

INDIVIDUAL VARIABLE ANNUITY CONTRACTS
OF
THE PRUDENTIAL INDIVIDUAL VARIABLE CONTRACT ACCOUNT

This prospectus describes Individual Variable Annuity Contracts (the "Contract")
issued by The Prudential Insurance Company of America ("The Prudential"). These
Contracts provide for the accumulation of purchase payments and for the payment
of benefits, either in the form of a monthly annuity after retirement or in a
lump sum at retirement or at an earlier time.

The Contract is purchased by making an initial payment of $1,000 or more;
subsequent payments must be $100 or more. Your accumulated purchase payments
will be allocated as you direct in one or more of the following ways: 1) in one
or more of thirteen subaccounts of The Prudential Individual Variable Contract
Account (the "Account"); 2) under a FIXED-RATE OPTION; and 3) in a real estate
investment option. 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 the risks of
investing in the thirteen portfolios of the Series Fund currently available to
Contract owners: the MONEY MARKET PORTFOLIO, the DIVERSIFIED BOND PORTFOLIO, the
GOVERNMENT INCOME PORTFOLIO, the CONSERVATIVE BALANCED PORTFOLIO, the FLEXIBLE
MANAGED PORTFOLIO, the HIGH YIELD BOND PORTFOLIO, the STOCK INDEX PORTFOLIO, the
EQUITY INCOME PORTFOLIO, the EQUITY PORTFOLIO, the PRUDENTIAL JENNISON
PORTFOLIO, the SMALL CAPITALIZATION STOCK PORTFOLIO, the GLOBAL PORTFOLIO, and
the NATURAL RESOURCES PORTFOLIO. Other subaccounts and portfolios may be added
in the future. Selection of the real estate investment option involves
allocation of part or all of your purchase payments to THE PRUDENTIAL VARIABLE
CONTRACT REAL PROPERTY ACCOUNT (the "Real Property Account"), a separate account
of The Prudential that, 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.

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

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, 1996, 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 27 of the
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

PRUDENTIAL'S VARIABLE INVESTMENT PLAN is a registered mark of The Prudential.
VIP-1 Ed 5-96
Catalog #64696D2

PROSPECTUS CONTENTS
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PAGE
<S> <C>
DEFINITIONS OF SPECIAL TERMS USED IN THIS PROSPECTUS..........................................................1

BRIEF DESCRIPTION OF THE CONTRACT.............................................................................2
THE PRUDENTIAL INDIVIDUAL VARIABLE ANNUITY CONTRACT ....................................................2
CHARGES UNDER THE CONTRACTS ............................................................................3
TRANSFERS AMONG INVESTMENT OPTIONS .....................................................................4
FREE LOOK ...............................................................................................4
HOW TO CONTACT THE PRUDENTIAL ..........................................................................4

FEE TABLE.....................................................................................................5
EXAMPLES OF FEES AND EXPENSES............................................................................6

ACCUMULATION UNIT VALUES......................................................................................8

GENERAL INFORMATION ABOUT THE PRUDENTIAL, THE PRUDENTIAL INDIVIDUAL VARIABLE CONTRACT
ACCOUNT, AND THE VARIABLE INVESTMENT OPTIONS AVAILABLE UNDER THE CONTRACT...............................11
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA.............................................................11
THE PRUDENTIAL INDIVIDUAL VARIABLE CONTRACT ACCOUNT.....................................................11
THE PRUDENTIAL SERIES FUND, INC.........................................................................11
THE PRUDENTIAL VARIABLE CONTRACT REAL PROPERTY ACCOUNT..................................................12

DETAILED INFORMATION ABOUT THE CONTRACT......................................................................13
REQUIREMENTS FOR ISSUANCE OF A CONTRACT.................................................................13
SHORT-TERM CANCELLATION RIGHT OR "FREE LOOK"............................................................13
ALLOCATION OF PURCHASE PAYMENTS.........................................................................13
ADDITIONAL AMOUNTS......................................................................................14
TRANSFERS...............................................................................................14
WITHDRAWALS.............................................................................................15
DEATH BENEFIT...........................................................................................15
VALUATION OF CONTRACT OWNER'S CONTRACT FUND.............................................................15

CHARGES, FEES, AND DEDUCTIONS................................................................................16
1. PREMIUM TAXES........................................................................................16
2. SALES CHARGES ON WITHDRAWALS.........................................................................16
3. RECAPTURE OF ADDITIONAL AMOUNTS......................................................................18
4. ANNUAL MAINTENANCE CHARGE............................................................................18
5. CHARGE FOR ASSUMING MORTALITY AND EXPENSE RISKS......................................................19
6. EXPENSES INCURRED BY THE SERIES FUND.................................................................19

THE FIXED-RATE OPTION........................................................................................19

FEDERAL TAX STATUS...........................................................................................20
TAXES PAYABLE BY CONTRACT OWNERS........................................................................20
WITHHOLDING.............................................................................................21
TAXES ON THE PRUDENTIAL.................................................................................21

EFFECTING AN ANNUITY.........................................................................................21
ANNUITY OPTIONS UNDER THE VIP-86 CONTRACT...............................................................22
ANNUITY OPTIONS UNDER THE WVA-83 AND VIP-84 CONTRACTS...................................................23
LEGAL CONSIDERATIONS RELATING TO SEX-DISTINCT ANNUITY PURCHASE RATES....................................24

OTHER INFORMATION................................................................................ ...........24
VOTING RIGHTS...........................................................................................24
SALE OF THE CONTRACT AND SALES COMMISSIONS..............................................................25
OWNERSHIP OF THE CONTRACT...............................................................................25
REPORTS TO CONTRACT OWNERS..............................................................................25
PERFORMANCE INFORMATION.................................................................................25
SUBSTITUTION OF SERIES FUND SHARES......................................................................26
DIFFERENCES UNDER THE WVA-83 CONTRACT...................................................................26

<PAGE>

<S> <C>
STATE REGULATION.......................................................................................26
LITIGATION.............................................................................................27
ADDITIONAL INFORMATION.................................................................................27

DIRECTORS AND OFFICERS......................................................................................28

</TABLE>

<PAGE>

DEFINITIONS OF SPECIAL TERMS USED IN THIS
PROSPECTUS

ADDITIONAL AMOUNT--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 Additional Amount or "bonus" will be
recaptured by The Prudential if the payment is withdrawn within 8 Contract years
after it is made.

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 OR ANNUITY--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--See Additional Amount above.

CONTRACT ANNIVERSARY DATE--The same day and month as the Contract date in each
later year.

CONTRACT DATE--The date The Prudential received the initial purchase payment and
necessary documentation for the Contract.

CONTRACT FUND--The total value attributable to a specific Contract representing
the sum of all the amounts in the Variable Account (defined below), the Real
Property Account (defined below), and the fixed-rate option (defined below).

CONTRACT OWNER--The person who purchases an Individual Variable Annuity Contract
of PRUDENTIAL'S VARIABLE INVESTMENT PLAN(R) and makes the purchase payments. The
Contract owner will usually also be an annuitant, but need not be. The Contract
owner has all rights in the Contract before the annuity date, including 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 variable investment options and
the fixed-rate option, 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%.

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

SUBACCOUNT ANNUITY UNIT--When a Contract owner elects to convert his or her
Variable Account into monthly variable annuity payments, the number of
Subaccount Units (defined below) credited to him or her in each subaccount is
first reduced to take into account any applicable sales charge and any state
premium taxes that may be payable. The remaining Subaccount Units are then
converted into a number of Subaccount Annuity Units of equal aggregate value. As
with Subaccount Units, the value of each Subaccount Annuity Unit also changes
each day to reflect investment results and expenses of and deductions of charges
from the underlying Series Fund portfolio, after deduction of the daily
equivalent of the annual charge of up to 1.2% for assuming expense and mortality
risks. For further discussion, see page C1 of the statement of additional
information.

SUBACCOUNT UNIT--The Contract owner's Variable Account is credited with Units in
each subaccount in which he or she invests. The value of these Units changes
each day to reflect the investment results and expenses of and deductions of
charges from the Series Fund portfolios in which the assets of the subaccount
are invested, in much the same way that the share values of a mutual fund change
each day. The value of the Contract owner's Variable Account is the sum of the
value of Subaccount Units in each subaccount.

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 ACCOUNT--The value attributable to a specific Contract representing
amounts in all the subaccounts.

VARIABLE INVESTMENT OPTIONS--The subaccounts and the Real Property Account.

<PAGE>

BRIEF DESCRIPTION OF THE CONTRACT

THE PRUDENTIAL INDIVIDUAL VARIABLE ANNUITY CONTRACT

The Prudential Individual Variable Annuity Contract (the "Contract") provides
one way--there are many others--of accumulating your savings, having them
invested in one or more securities portfolios with different investment
objectives, and withdrawing them (subject to any applicable withdrawal charges
and taxes) when you need them, preferably to supplement your monthly income
after you retire but at any earlier time if you wish. [The words "you" and
"your" as used in this prospectus refer to the owner of the Contract. See
OWNERSHIP OF THE CONTRACT, page 25. The word "we" refers to The Prudential
Insurance Company of America ("The Prudential").] For many persons, a variable
annuity contract may offer substantial advantages as a long-term financial
planning device over alternative forms of investment (other than alternative
tax-favored investments such as Individual Retirement Accounts), primarily due
to the manner in which the earnings on your accumulating funds are taxed. See
FEDERAL TAX STATUS, page 20.

This prospectus describes three forms of the Contract. One form, which was first
offered in 1983, is called the WVA-83 Contract (persons holding this Contract
can identify it by the WVA-83 designation which appears in the lower left corner
of the Contract cover page). A second form, which is a revised edition of the
WVA-83 Contract, is called the VIP-84 Contract (persons holding this Contract
can identify it by the VIP-84 designation which appears in the lower left corner
of the Contract cover page). The third form, which is a revised edition of the
VIP-84 Contract, is called the VIP-86 Contract (except as described below,
persons holding this Contract can identify it by the VIP-86 designation which
appears in the lower left corner of the Contract cover page). In Texas, this
Contract bears a VIP-89 designation; however, it will be referred to as the
VIP-86 Contract throughout this prospectus. Currently, only the VIP-86 Contract
is offered in all jurisdictions.

The three forms of Contract are basically similar, but there are some
significant differences. This prospectus describes each of the Contracts and
explains, where appropriate, the respects in which they differ. Because the
differences between the first form, WVA-83, and the later two forms are somewhat
extensive, a special section, DIFFERENCES UNDER THE WVA-83 CONTRACT, is included
on page 26, to which reference will occasionally be made.

You may make purchase payments under your Contract at regular intervals or from
time to time as you have funds available. Your first payment must be at least
$1,000. Thereafter each payment must be $100 or more. See REQUIREMENTS FOR
ISSUANCE OF A CONTRACT, page 13.

Purchase payments are held in one or more subaccounts of The Prudential
Individual Variable Contract Account (the "Account") as you direct. You may also
choose to invest all or part of your purchase payments in The Prudential
Variable Contract Real Property Account (the "Real Property Account"), which,
through a partnership, invests primarily in income-producing real property. If a
Contract owner elects to invest a portion of his or her purchase payments in the
Real Property Account, 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 the 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 12. Additionally, you may direct that all or part of your payment be
allocated to a FIXED-RATE OPTION providing for the addition of interest at a
guaranteed rate upon the amount so held. Initially, you must allocate at least
$300 to a subaccount in which you choose to invest. Your subsequent investments
in that subaccount must be in amounts no less than $100 each. Each subaccount is
invested in a corresponding portfolio of The Prudential Series Fund, Inc. (the
"Series Fund"), a series mutual fund for which The Prudential is the 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 DIVERSIFIED BOND PORTFOLIO (formerly the Bond Portfolio) is invested
primarily in high quality medium-term corporate and government debt securities;
the GOVERNMENT INCOME PORTFOLIO (formerly 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 CONSERVATIVE BALANCED PORTFOLIO (formerly 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 FLEXIBLE MANAGED PORTFOLIO (formerly
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;

<PAGE>

the EQUITY INCOME PORTFOLIO (formerly 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 EQUITY PORTFOLIO
(formerly the Common Stock Portfolio) is invested primarily in common stocks;
the PRUDENTIAL JENNISON PORTFOLIO (formerly 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 PORTFOLIO (formerly 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 11,
and in the attached prospectus for the Series Fund.

You may place your entire payment in one subaccount, in the Real Property
Account or in the fixed-rate option, or divide it among any of the thirteen
subaccounts, the Real Property Account and the fixed-rate option, subject to the
applicable minimum requirements. You may transfer funds from one subaccount to
another, to the Real Property Account, and to the fixed-rate option. There are
limitations upon transfers from the fixed-rate option and to and from the Real
Property Account. See TRANSFERS, page 14. The amount credited to you in the
variable investment options will initially be equal to that part of your
purchase payment that you choose to invest in each option. Thereafter the value
of your holdings in the variable investment options, after deducting charges
payable under the Contract, will vary in accordance with investment results. See
VALUATION OF CONTRACT OWNER'S CONTRACT FUND, page 15, and page C1 of the
statement of additional information. The total value attributable to a specific
Contract representing amounts allocated to all subaccounts, the Real Property
Account, and the fixed-rate option is known as the "Contract fund". You will
receive confirmations of every purchase payment you make. You will also receive
annual statements showing the status of your Contract fund.

The Contracts described in this prospectus have an 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 14.
During the first 8 Contract years following a purchase payment, the bonus
attributable to any portion of that purchase payment that is withdrawn 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 or is subject to a
reduced sales charge. See SALES CHARGES ON WITHDRAWALS, page 16 and RECAPTURE OF
ADDITIONAL AMOUNTS, page 18.

If you need all or part of your money at any time, you may request a withdrawal.
The amount you request will be deducted from your Contract fund. See
WITHDRAWALS, page 15. As long as the Contract remains in effect, you may
withdraw the amount credited to you in a lump sum or use it to effect a monthly
annuity that will continue as long as the annuitant[s] you select live or for
some other period you select. Other than an annuity selected under the
Supplemental Life Annuity Option, WVA-83 and VIP-84 Contract owners may elect to
receive a variable annuity. If you elect a variable annuity option, annuity
payments will vary each month in accordance with the investment performance of
the subaccount[s] you have chosen. See page C1 of the statement of additional
information. If you elect a fixed-dollar annuity option, annuity payments will
be in monthly installments of guaranteed amounts. VIP-86 Contract owners may
only elect a fixed-dollar annuity option. A sales charge may be deducted from
the amount withdrawn. Withdrawals may be subject to tax and, in certain
circumstances, a tax penalty. This sales charge will be higher with respect to
withdrawals of purchase payments made in early years, soon after the purchase
payments are made. See SALES CHARGES ON WITHDRAWALS, page 16, TAXES PAYABLE BY
CONTRACT OWNERS, page 20, and EFFECTING AN ANNUITY, page 21.

CHARGES UNDER THE CONTRACTS

The charges made by The Prudential are intended to compensate it for paying
various categories of expenses incurred in maintaining and operating the Account
(up to $30 annually, if applicable) and for assuming mortality and expense risks
under the Contracts (an annual rate of up to 1.2% of the assets held in the
variable investment options). In addition, there are other expenses incurred in
connection with the operation and management of the Series Fund, the most
significant of which is an investment management fee ranging from an annual rate
of 0.35% to 0.75% of the aggregate average daily net assets in each of the
portfolios. For more information regarding these charges, see CHARGES, FEES, AND
DEDUCTIONS, page 16. There is also a management fee and other expenses assessed
against the assets of the real property partnership. See THE PRUDENTIAL VARIABLE
CONTRACT REAL PROPERTY ACCOUNT, page 12.

<PAGE>

A deferred sales charge is imposed to reimburse The Prudential for distribution
expenses such as commissions paid to sales personnel, costs of advertising and
sales promotions, prospectus costs, and costs of sales administration. Many
mutual funds, other than no-load funds, make this charge by deducting a
percentage of the investor's purchase payment and investing only the remainder.
Under the Contracts described in this prospectus, each purchase payment you make
(after deduction of any applicable amount needed to pay taxes attributable to
premiums) is allocated to the subaccounts designated by you, to the Real
Property Account or to the fixed-rate option. In any Contract year you may make
withdrawals without charge of up to 10% of your Contract fund value on the date
of the first withdrawal in that Contract year. A sales charge may be deducted on
withdrawals above 10%. The charge is 8% (the maximum charge) of each purchase
payment withdrawn during the same Contract year that it was made. Thereafter the
charge decreases by 1% per Contract year. Purchase payments withdrawn 8 or more
Contract years after they were made are subject to no sales charge at all. See
SALES CHARGES ON WITHDRAWALS, page 16. Withdrawals may be subject to tax under
the Internal Revenue Code (the "Code"). See WITHDRAWALS, page 15, and TAXES
PAYABLE BY CONTRACT OWNERS, page 20.

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 16.

TRANSFERS AMONG INVESTMENT OPTIONS

Transfers may be made from one subaccount to another, to the Real Property
Account or to the fixed-rate option if the amount transferred is $300 or more
and any amount remaining to your credit in the subaccount after the transfer is
not less than $300. Also, you can transfer the total amount remaining in any
subaccount even if that amount is less than $300. Up to four transfers a year
between subaccounts, to the Real Property Account or to the fixed-rate option
may be made during the period before annuity payments begin. Transfers from the
fixed-rate option to the subaccounts are permitted only once each Contract year,
and there are other limitations on such transfers. See TRANSFERS, page 14.
Transfers to and from the Real Property Account are subject to restrictions
described in the accompanying prospectus for the Real Property Account.

WVA-83 Contract owners and VIP-84 Contract owners may convert their Contract
fund into either a variable (if available) or fixed-dollar annuity or both.
After variable annuity payments begin, the annuitant may make full or partial
transfers from any subaccount to one or more other subaccounts. The Prudential's
consent is needed if (1) more than four transfers are made in a year, or (2) for
a partial transfer, either the number of Subaccount Annuity Units to be
transferred or the number to be retained, multiplied by the corresponding
Subaccount Annuity Unit Value on the effective date of the transfer, is less
than $20. Transfer requests may be in writing. Transfer requests may also be
made by telephone. A transfer will generally be made at the end of the valuation
period in which your proper written request or authorized telephone request is
received by The Prudential. See TRANSFERS, page 14.

FREE LOOK

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 13.

HOW TO CONTACT THE PRUDENTIAL

All written requests and notices required by the Contracts, such as withdrawal
or transfer requests, and any questions or inquiries should be sent to your
designated Prudential Service Office.

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.

<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
CONTRACT YEARS AFTER PAYMENT PERCENTAGE OF PURCHASE PAYMENT WITHDRAWN*
---------------------------- -----------------------------------------
0 .......................... 8% plus return of 1% bonus
1 year...................... 7% plus return of 1% bonus
2 years..................... 6% plus return of 1% bonus
3 years..................... 5% plus return of 1% bonus
4 years..................... 4% plus return of 1% bonus
5 years..................... 3% plus return of 1% bonus
6 years..................... 2% plus return of 1% bonus
7 years..................... 1% plus return of 1% bonus
8 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. The deferred
sales load is not imposed in connection with the Critical Care Access feature
and may be reduced on the withdrawal of purchase payments made on or after the
annuitant's 81st birthday.

Annual Administrative Charge............................................. 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.

SEPARATE ACCOUNT ANNUAL EXPENSES (AS A PERCENTAGE OF AVERAGE CONTRACT FUND)

All Subaccounts
---------------
Total Separate Account
Annual Expenses (Mortality and Expense Risk Fee)........ 1.20%
=====

THE PRUDENTIAL SERIES FUND, INC. ANNUAL EXPENSES
(AS A PERCENTAGE OF PORTFOLIO AVERAGE NET ASSETS)

HIGH
MONEY DIVERSIFIED GOVERNMENT CONSERVATIVE FLEXIBLE YIELD
MARKET BOND INCOME BALANCED MANAGED BOND
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment Management Fee............ .40% .40% .40% .55% .60% .55%
Other Expenses....................... .04% .04% .05% .03% .03% .06%
---- ---- ---- ---- ---- ----

Total Series Fund Annual Expenses.... .44% .44% .45% .58% .63% .61%
==== ==== ==== ==== ==== ====
<CAPTION>

SMALL
STOCK EQUITY EQUITY PRUDENTIAL CAPITALIZATION NATURAL
INDEX INCOME JENNISON STOCK GLOBAL RESOURCES
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment Management Fee ........... .35% .40% .45% .60% .40% .75% .45%
Other Expenses....................... .03% .03% .03% .19% .20% .31% .05%
---- ---- ---- ---- ---- ---- ----

Total Series Fund Annual Expenses.... .38% .43% .48% .79% .60% 1.06% .50%
==== ==== ==== ==== ==== ===== ====

</TABLE>

<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. Currently, there is no deduction for such taxes
at the time purchase payments are made, but in some states a deduction is made
when an annuity is effected.

Except for the Global 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 Prudential Jennison and Small Capitalization Stock Portfolios commenced
operation on May 1, 1995 and therefore do not have expense amounts available for
the entire fiscal year. Consequently, for the fee table above and the examples
that follow, the figures shown as "Other Expenses" and total expenses are based
on actual expenses from May 1 through December 31, 1995. 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 7, 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 overstated for Contract funds over $10,000 and
understated for Contract funds less than $10,000.

o The examples assume that the operating expenses incurred in 1995 will
continue for a 10 year period, and that any caps applied to the expenses
will also continue.

For periods less than 10 years, the expenses shown in Table I, describe
applicable charges for the withdrawal of your entire Contract fund. THE EXAMPLES
SHOULD NOT BE CONSIDERED 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 Flexible Managed 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 Administrative 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 (1.2 risk fees + 0.60 management fee + 0.03 expense) 1.83%
Annual Administrative Charge .94
Total Contract Expenses ($1,035.25 x 1.83%) + $0.94 19.89

Contingent Deferred Sales Charge computation for withdrawal of entire fund:

Net Contract fund ($1,060.50 - $19.89) $1,040.61
10% Charge-free withdrawal 104.06
Initial investment 1,000.00*
Amount subject to withdrawal charge ($1,000 - $104.06) 895.94
Surrender charge @ 8% 71.68
Plus Total Contract Expenses (as calculated above) 19.89
---------
TOTAL CHARGES $ 91.57

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

<PAGE>

EXAMPLES

TABLE I
- -------

If you withdraw your entire Contract fund thereby surrendering 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....................................... $ 90 $109 $131 $208
DIVERSIFIED BOND PORTFOLIO................................... $ 90 $109 $131 $208
GOVERNMENT INCOME PORTFOLIO.................................. $ 90 $109 $131 $209
CONSERVATIVE BALANCED PORTFOLIO.............................. $ 91 $113 $138 $223
FLEXIBLE MANAGED PORTFOLIO .................................. $ 92 $115 $141 $229
HIGH YIELD BOND PORTFOLIO.................................... $ 91 $114 $140 $227
STOCK INDEX PORTFOLIO........................................ $ 89 $107 $128 $201
EQUITY INCOME PORTFOLIO...................................... $ 89 $109 $130 $207
EQUITY PORTFOLIO............................................. $ 90 $110 $133 $212
PRUDENTIAL JENNISON PORTFOLIO................................ $ 93 $120 $149 $246
SMALL CAPITALIZATION STOCK PORTFOLIO......................... $ 91 $114 $139 $225
GLOBAL PORTFOLIO............................................. $ 96 $128 $164 $274
NATURAL RESOURCES PORTFOLIO.................................. $ 90 $111 $134 $215
</TABLE>

As an example, if the entire Contract fund is invested in the Flexible
Managed Portfolio, and you surrendered your Contract just prior to the end of
1 year, you would pay $92 per $1,000 invested, reflecting all charges
including the 8% 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 3. Where this is the case, the expenses
shown in Table III below would be applicable. See page 16 under the SALES
CHARGES ON WITHDRAWALS SECTION.)

1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
MONEY MARKET PORTFOLIO....................................... $ 90 $109 $131 $208
DIVERSIFIED BOND PORTFOLIO................................... $ 90 $109 $131 $208
GOVERNMENT INCOME PORTFOLIO.................................. $ 90 $109 $131 $209
CONSERVATIVE BALANCED PORTFOLIO.............................. $ 91 $113 $138 $223
FLEXIBLE MANAGED PORTFOLIO................................... $ 92 $115 $141 $229
HIGH YIELD BOND PORTFOLIO.................................... $ 91 $114 $140 $227
STOCK INDEX PORTFOLIO........................................ $ 89 $107 $128 $201
EQUITY INCOME PORTFOLIO...................................... $ 89 $109 $130 $207
EQUITY PORTFOLIO............................................. $ 90 $110 $133 $212
PRUDENTIAL JENNISON PORTFOLIO................................ $ 93 $120 $149 $246
SMALL CAPITALIZATION STOCK PORTFOLIO......................... $ 91 $114 $139 $225
GLOBAL PORTFOLIO............................................. $ 96 $128 $164 $274
NATURAL RESOURCES PORTFOLIO.................................. $ 90 $111 $134 $215

</TABLE>

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....................................... $ 18 $ 56 $ 96 $208
DIVERSIFIED BOND PORTFOLIO................................... $ 18 $ 56 $ 96 $208
GOVERNMENT INCOME PORTFOLIO.................................. $ 18 $ 56 $ 96 $209
CONSERVATIVE BALANCED PORTFOLIO.............................. $ 19 $ 60 $103 $223
FLEXIBLE MANAGED PORTFOLIO................................... $ 20 $ 61 $106 $229
HIGH YIELD BOND PORTFOLIO.................................... $ 20 $ 61 $105 $227
STOCK INDEX PORTFOLIO........................................ $ 17 $ 54 $ 92 $201
EQUITY INCOME PORTFOLIO...................................... $ 18 $ 55 $ 95 $207
EQUITY PORTFOLIO............................................. $ 18 $ 57 $ 98 $212
PRUDENTIAL JENNISON PORTFOLIO................................ $ 22 $ 67 $114 $246
SMALL CAPITALIZATION STOCK PORTFOLIO......................... $ 20 $ 61 $104 $225
GLOBAL PORTFOLIO............................................. $ 24 $ 75 $128 $274
NATURAL RESOURCES PORTFOLIO.................................. $ 19 $ 57 $ 99 $215
</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 Flexible Managed Portfolio, $229 at the end of 10 years equals
$22.90 per year, or approximately 2.3% of $1,000.

<PAGE>

<TABLE>
ACCUMULATION UNIT VALUES
THE PRUDENTIAL INDIVIDUAL VARIABLE CONTRACT ACCOUNT
PRUDENTIAL'S VARIABLE INVESTMENT PLAN
(Condensed Financial Information)
<CAPTION>
SUBACCOUNTS
-------------------------------------------------------------------
MONEY MARKET
-------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91
to o to to to
12/31/95 12/31/94 12/31/93 12/31/92 12/31/91
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
1. Accumulation unit value at beginning of period ............. $ 1.847 $ 1.796 $ 1.766 $ 1.722 $ 1.641
2. Accumulation unit value at end of period ................... 1.931 1.847 1.796 1.766 1.722
3. Number of accumulation units outstanding at end of period .. 21,383,688 19,719,686 21,196,310 25,559,750 27,651,809

DIVERSIFIED BOND
-------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91
to o to to to
12/31/95 12/31/94 12/31/93 12/31/92 12/31/91
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
1. Accumulation unit value at beginning of period ............. $ 2.430 $ 2.541 $ 2.335 $ 2.204 $ 1.916
2. Accumulation unit value at end of period ................... 2.899 2.430 2.541 2.335 2.204
3. Number of accumulation units outstanding at end of period .. 17,350,482 19,297,770 22,228,674 19,270,816 15,157,524

GOVERNMENT INCOME
-------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91
to o to to to
12/31/95 12/31/94 12/31/93 12/31/92 12/31/91
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
1. Accumulation unit value at beginning of period ............. $ 1.456 $ 1.553 $ 1.397 $ 1.335 $ 1.164
2. Accumulation unit value at end of period ................... 1.719 1.456 1.553 1.397 1.335
3. Number of accumulation units outstanding at end of period .. 36,188,716 42,950,931 51,712,560 31,196,202 5,114,032

CONSERVATIVE BALANCED
-------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91
to o to to to
12/31/95 12/31/94 12/31/93 12/31/92 12/31/91
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
1. Accumulation unit value at beginning of period ............. $ 2.655 $ 2.713 $ 2.447 $ 2.316 $ 1.968
2. Accumulation unit value at end of period ................... 3.077 2.655 2.713 2.447 2.316
3. Number of accumulation units outstanding at end of period .. 133,247,386 44,960,917 132,233,247 94,037,783 64,776,062

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

------------------------------------------------------------------
01/01/90 01/01/89 01/01/88 01/01/87 01/01/86
to to to to to
12/31/90 12/31/89 12/31/88 12/31/87 12/31/86
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
1. Accumulation unit value at beginning
of period .......................................... $ 1.536 $ 1.423 $ 1.341 $ 1.274 $ 1.210
2. Accumulation unit value at end of
period ............................................. 1.641 1.536 1.423 1.341 1.274
3. Number of accumulation units outstanding
at end of period ................................... 28,665,736 21,867,895 20,062,883 15,655,197 9,517,872

------------------------------------------------------------------
01/01/90 01/01/89 01/01/88 01/01/87 01/01/86
to to to to to
12/31/90 12/31/89 12/31/88 12/31/87 12/31/86
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
1. Accumulation unit value at beginning
of period .......................................... $ 1.790 $ 1.596 $ 1.493 $ 1.507 $ 1.332
2. Accumulation unit value at end of
period ............................................. 1.916 1.790 1.596 1.493 1.507
3. Number of accumulation units outstanding
at end of period ................................... 13,436,702 14,674,397 16,270,961 14,659,724 16,364,520

----------------------------
01/01/90 01/01/89*
to to
12/31/90 12/31/89
----------- -----------
<S> <C> <C>
1. Accumulation unit value at beginning of period ............. $ 1.108 $ 1.000
2. Accumulation unit value at end of period ................... 1.164 1.108
3. Number of accumulation units outstanding at end of period .. 1,876,055 523,730

------------------------------------------------------------------
01/01/90 01/01/89 01/01/88 01/01/87 01/01/86
to to to to to
12/31/90 12/31/89 12/31/88 12/31/87 12/31/86
----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
1. Accumulation unit value at beginning
of period .......................................... $ 1.892 $ 1.637 $ 1.503 $ 1.499 $ 1.328
2. Accumulation unit value at end of
period ............................................. 1.968 1.892 1.637 1.503 1.499
3. Number of accumulation units outstanding
at end of period .................................. 59,244,790 61,212,122 68,409,626 88,569,869 59,030,787

*Commencement of Business

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

</TABLE>
8
<PAGE>

<TABLE>
ACCUMULATION UNIT VALUES
THE PRUDENTIAL INDIVIDUAL VARIABLE CONTRACT ACCOUNT
PRUDENTIAL'S VARIABLE INVESTMENT PLAN
(Condensed Financial Information) (Continued)
<CAPTION>
SUBACCOUNTS
-------------------------------------------------------------------
Flexible Managed
-------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91
to o to to to
12/31/95 12/31/94 12/31/93 12/31/92 12/31/91
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
1. Accumulation unit value at beginning of period ............. $ 2.828 $ 2.955 $ 2.587 $ 2.434 $ 1.963
2. Accumulation unit value at end of period ................... 3.469 2.828 2.955 2.587 2.434
3. Number of accumulation units outstanding at end of period .. 80,116,280 86,950,166 82,697,681 67,080,104 57,549,789

High Yield Bond
-------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91
to o to to to
12/31/95 12/31/94 12/31/93 12/31/92 12/31/91
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
1. Accumulation unit value at beginning of period ............. $ 1.605 $ 1,670 $ 1.417 $ 1.220 $ 0.887
2. Accumulation unit value at end of period ................... 1.865 1.605 1.670 1.417 1.220
3. Number of accumulation units outstanding at end of period .. 15,869,142 15,675,021 14,204,249 8,951,297 5,593,083

Stock Index
-------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91
to o to to to
12/31/95 12/31/94 12/31/93 12/31/92 12/31/91
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
1. Accumulation unit value at beginning of period ............. $ 1.772 $ 1.776 $ 1.639 $ 1.548 $ 1.208
2. Accumulation unit value at end of period ................... 2.401 1.772 1.776 1.639 1.548
3. Number of accumulation units outstanding at end of period .. 26,855,828 25,648,545 24,959,253 19,968,362 12,084,160

Equity Income
-------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91
to o to to to
12/31/95 12/31/94 12/31/93 12/31/92 12/31/91
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
1. Accumulation unit value at beginning of period ............. $ 2.104 $ 2.099 $ 1.737 $ 1.596 $ 1.267
2. Accumulation unit value at end of period ................... 2.530 2.104 2.099 1.737 1.596
3. Number of accumulation units outstanding at end of period .. 28,317,862 26,707,292 19,580,278 8,359,974 3,601,671

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

------------------------------------------------------------------
01/01/90 01/01/89 01/01/88 01/01/87 01/01/86
to to to to to
12/31/90 12/31/89 12/31/88 12/31/87 12/31/86
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
1. Accumulation unit value at beginning
of period .......................................... $ 1.950 $ 1.621 $ 1.453 $ 1.498 $ 1.313
2. Accumulation unit value at end of
period ............................................. 1.963 1.950 1.621 1.453 1.498
3. Number of accumulation units outstanding
at end of period ................................... 59,624,634 64,761,817 72,695,150 98,423,867 73,796,822

------------------------------------------------------
01/01/90 01/01/89 01/01/88 02/23/87*
to to to to
12/31/90 12/31/89 12/31/88 12/31/87
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1. Accumulation unit value at beginning
of period .......................................... $ 1.019 $ 1.052 $ 0.941 $ 1.000
2. Accumulation unit value at end of
period ............................................. 0.887 1.019 1.052 0.941
3. Number of accumulation units outstanding
at end of period ................................... 5,320,712 8,625,344 6,337,850 3,432,822

----------------------------------------------------------
01/01/90 01/01/89 01/01/88 10/19/87*
to to to to
12/31/90 12/31/89 12/31/88 12/31/87
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1. Accumulation unit value at beginning of period ............. $ 1.268 $ 0.980 $ 0.859 $ 1.000
2. Accumulation unit value at end of period ................... 1.208 1.268 0.980 0.859
3. Number of accumulation units outstanding at end of period .. 5,936,971 4,352,361 960,235 112,510

--------------------------------------------
01/01/90 01/01/89 01/01/88*
to to to
12/31/90 12/31/89 12/31/88
----------- ----------- -----------
<S> <C> <C> <C>
1. Accumulation unit value at beginning of period ............. $ 1.332 $ 1.099 $ 1.000
2. Accumulation unit value at end of period ................... 1.267 1.332 1.099
3. Number of accumulation units outstanding at end of period .. 2,596,033 1,812,915 438,001

*Commencement of Business

The financial statements of the Account are in the statement of additional information.
</TABLE>
9

<PAGE>

<TABLE>
ACCUMULATION UNIT VALUES
THE PRUDENTIAL INDIVIDUAL VARIABLE CONTRACT ACCOUNT
PRUDENTIAL'S VARIABLE INVESTMENT PLAN
(Condensed Financial Information) (Continued)
<CAPTION>

SUBACCOUNTS
----------------------------------------------------------------
Equity
----------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91
to to to to to
12/31/95 12/31/94 12/31/93 12/31/92 12/31/91
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
1. Accumulation unit value at beginning of period ............... $ 3.738 $ 3.681 $ 3.056 $ 2.709 $ 2.176
2. Accumulation unit value at end of period ..................... 4.850 3.738 3.681 3.056 2.709
3. Number of accumulation units outstanding at end of period .... 48,356,691 44,189,146 39,039,555 29,987,497 25,189,460

<CAPTION>
SUBACCOUNTS
----------------------------------------------------------------
Equity
----------------------------------------------------------------
01/01/90 01/01/89 01/01/88 01/01/87 01/01/86
to to to to to
12/31/90 12/31/89 12/31/88 12/31/87 12/31/86
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
1. Accumulation unit value at beginning of period ............... $ 2.323 $ 1.812 $ 1.567 $ 1.560 $ 1.372
2. Accumulation unit value at end of period ..................... 2.176 2.323 1.812 1.567 1.560
3. Number of accumulation units outstanding at end of period .... 23,155,951 24,216,949 26,268,202 35,615,496 25,128,910

Prudential Jennison
---------------------------------------------------------------
05/01/95*
to
12/31/95
----------
<S> <C>
1. Accumulation unit value at beginning of period ............... $ 1.009
2. Accumulation unit value at end of period ..................... 1.245
3. Number of accumulation units outstanding at end of period .... 3,331,892

Small Capitalization Stock
---------------------------------------------------------------
05/01/95*
to
12/31/95
----------
<S> <C>
1. Accumulation unit value at beginning of period ............... $ 1.002
2. Accumulation unit value at end of period ..................... 1.190
3. Number of accumulation units outstanding at end of period .... 1,491,116

Global
------------------------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 05/01/89*
to to to to to to to
12/31/95 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> <C>
1. Accumulation unit value at
beginning of period ..................... $ 1.339 $ 1.425 $ 1.007 $ 1.056 $ 0.959 $ 1.115 $ 1.015
2. Accumulation unit value at
end of period ........................... 1.533 1.339 1.425 1.007 1.056 0.959 1.115
3. Number of accumulation units
outstanding at end of period ............ 18,445,275 20,295,941 5,444,571 1,299,663 1,247,336 610,872 125,853

<CAPTION>
Natural Resources
---------------------------------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 01/01/89 05/01/88*
to to to to to to to to
12/31/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88
--------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Accumulation unit value at
beginning of period ............. $ 1.751 $ 1.851 $ 1.497 $ 1.412 $ 1.295 $ 1.391 $ 1.038 $ 1.000
2. Accumulation unit value at
end of period ................... 2.196 1.751 1.851 1.497 1.412 1.295 1.391 1.038
3. Number of accumulation units
outstanding at end of period .... 8,792,973 8,870,868 5,634,046 3,079,123 3,120,415 3,256,246 1,098,505 280,510

*Commencement of Business

The financial statements of the Account are in the statement of additional information.
</TABLE>

<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 Prudential Jennison 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.

<PAGE>

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.

ANNUAL INVESTMENT
MANAGEMENT FEE AS
A PERCENTAGE OF AVERAGE
PORTFOLIO DAILY NET ASSETS
- --------- -----------------------

Money Market Portfolio 0.40%

Diversified Bond Portfolio 0.40%

Government Income Portfolio 0.40%
Conservative Balanced Portfolio 0.55%
Flexible Managed Portfolio 0.60%

High Yield Bond Portfolio 0.55%
Stock Index Portfolio 0.35%

Equity Income Portfolio 0.40%
Equity Portfolio 0.45%
Prudential Jennison Portfolio 0.60%

Small Capitalization Stock Portfolio 0.40%

Global 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.

<PAGE>

DETAILED INFORMATION ABOUT THE CONTRACT

REQUIREMENTS FOR ISSUANCE OF A CONTRACT

The minimum initial purchase payment is $1,000. 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 $100 or more per investment option, 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 your designated Prudential
Home Office accompanied by forms that will be provided for this purpose. The
Prudential currently will not accept purchase payments on and after the Contract
anniversary next following the annuitant's 85th birthday, but reserves the right
to do so.

The Contract date will be the date The Prudential received the initial purchase
payment and necessary documentation for the Contract. The amount credited under
the Contract begins to vary on that date to reflect the investment results of
the 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 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. You
may change subsequent purchase payment allocations by providing us with proper
written instructions. You may also change subsequent purchase payment
allocations by telephoning your designated Prudential Home Office, provided the
Contract owner is enrolled to use the Telephone Transfer System. If, after you
have made one purchase payment, you send The Prudential an additional purchase
payment without instructions about how the purchase payment should be allocated,
The Prudential will allocate the purchase payment in the same proportions as the
most recent purchase payment you made.

Additionally, a feature called Dollar Cost Averaging ("DCA") is available to
Contract owners. If you wish, purchase payments allocated to the portion of the
Money Market subaccount used for this feature (the "DCA account"), and
designated dollar amounts will be transferred monthly from the DCA account to
other investment options available under the Contract, excluding the Money
Market subaccount and the fixed-rate option, but including the Real Property
Account. Automatic monthly transfers must be at least 3% of the amount allocated
to the DCA account (that is, if you designate $5,000 the minimum monthly
transfer is $150), 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 if the amount designated for
transfer is increased.

When you establish DCA at issue, you must allocate to the DCA account the
greater of $2,000 or 10% of the initial purchase payment. When you establish DCA
after issue, you must allocate to the DCA account at least $2,000. These
minimums are subject to change at The Prudential's discretion. After DCA has
been established and as long as the DCA account has a positive balance, you may
allocate or transfer amounts to the DCA account, subject to the limitations on
purchase payments and transfers generally. In addition, if you pay purchase
premiums on an annual or semi-annual basis, and you have already established
DCA, your purchase payment allocation instructions may include an allocation of
all or a portion of all your purchase payments to the DCA account.

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 ("NYSE") is open on that
date. If the NYSE is not open on the Monthly date, the transfer will take effect
as of the end of

<PAGE>

the valuation period on the next day that the NYSE is open. If the Monthly date
does not occur in a particular month (e.g., February 30), the transfer will take
effect as of the end of the valuation period on the last day of that month that
the NYSE is open. Automatic monthly transfers will continue until the balance in
the DCA account reaches zero, or until the Contract owner gives notification of
a change in allocation or cancellation of the feature. If you have an
outstanding premium allocation to the DCA account, but your DCA option has
previously been canceled, purchase payments allocated to the DCA account will be
allocated to the Money Market subaccount. Currently, there is no charge for
using the DCA feature.

ADDITIONAL AMOUNTS

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 that you make and allocate that
Additional Amount to the subaccounts, the Real Property Account, and the
fixed-rate option in the same manner as your 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 you make an initial purchase payment of $2,000 to be allocated
equally to the Common Stock Subaccount and the fixed-rate option. The Prudential
will increase the payment by 1%, or $20, and allocate $1010 to both the Common
Stock Subaccount and to the fixed-rate option. Later in the year you send an
additional purchase payment of $600, but you fail to indicate how it should be
applied. The Prudential will increase that amount by 1% or $6, and based on your
most recent instruction, will allocate $303 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 you make a
withdrawal of a purchase payment on which an Additional Amount was paid within 8
Contract years after the payment, unless such withdrawn purchase payment is used
to effect an annuity that is not subject to a sales charge or is subject to a
reduced sales charge. See SALES CHARGES ON WITHDRAWALS, page 16, and RECAPTURE
OF ADDITIONAL AMOUNTS, page 18.

TRANSFERS

You may transfer the portions of your Contract fund allocated to any subaccount
to any of the other subaccounts, to the Real Property Account or to the
fixed-rate option without charge. Transfers must be $300 or more, or the amount
in the subaccount, if less, and must not cause the amount credited to you in any
subaccount to be less than $300, unless you transfer the entire amount in that
subaccount. You may transfer amounts by proper written notice to a Prudential
Home Office, or by telephone unless you ask 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 will not be liable for following telephone instructions
that it reasonably believes to be genuine. 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.

You may make up to four transfers per Contract year without The Prudential's
consent during the period before annuity payments begin. The Prudential's prior
consent is necessary to make more than four transfers in a year. After variable
annuity payments begin, part or all of the interest in a subaccount may be
transferred to one or more other subaccounts. The annuitant may then make up to
four transfers per Contract year without The Prudential's consent. Any partial
transfer will require The Prudential's consent if either the number of
Subaccount Annuity Units to be transferred or the number to be retained,
multiplied by the corresponding Subaccount Annuity Unit Value on the effective
date of the transfer, is less than $20. 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, except that if the request is received
within 7 days of an annuity payment date, it will be made on the first business
day after the annuity payment date.

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 may currently 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) $2,000. 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. These limits
are subject to change in the future. Although it is not The Prudential's present
practice to do so, we may in the future permit transfers outside of the 30-day
period beginning on the Contract anniversary and change the maximum amount that
may be transferred out of the fixed-rate option. Transfers to and from the Real
Property Account are subject to restrictions described in the attached
prospectus for the Real Property Account.

<PAGE>

WITHDRAWALS

You may at any time withdraw all of your investment in the Contract fund.
However, The Prudential's consent will be required for a partial withdrawal if
the amount requested is less than $300 or if it would reduce the amount credited
under the Contract to less than $300. 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 investment
option or proportionally from all investment options. Withdrawals must be in a
specified amount rather than a percentage of the amount in the investment
option. 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. You should consult with a tax advisor before making a
withdrawal. See FEDERAL TAX STATUS, page 20.

DEATH BENEFIT

If one annuitant is named in the Contract (and under the WA-83 Contract, only
one annuitant may be named under the Contract. See item 2 under DIFFERENCES
UNDER THE WVA-83 CONTRACT, page 26) or if the annuitant is the last surviving
annuitant under the Contract, and such annuitant should die before any annuity
payments have been received under the Contract, 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. 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. Unless the
beneficiary has been irrevocably designated, you may change the beneficiary at
any time.

If the annuitant should die before reaching age 65 and before the annuity date,
the amount payable to the beneficiary will be at least equal to the total amount
of purchase payments you have made plus any bonus credited by The Prudential
(reduced by any previous withdrawal[s] in the same proportion that such
withdrawal[s] reduced your Contract fund on the withdrawal date[s]), even if the
value of your Contract fund is less than this minimum amount. (Under the WVA-83
Contract, the minimum amount payable to the beneficiary is determined in a
different manner. See item 3 under DIFFERENCES UNDER THE WVA-83 CONTRACT, page
26.) If the value of your Contract fund is greater, however, that value will be
payable to the beneficiary. If the annuitant dies after the age of 65 but before
the annuity date, the death benefit payable to the beneficiary will be the value
of your Contract fund. If the annuitant dies after he or she has begun to
receive annuity payments, the death benefit, if any, will be determined by the
type[s] of annuity payment you have selected. See EFFECTING AN ANNUITY, page 21.

If two annuitants are named in the Contract (only one annuitant may be named
under the WVA-83 Contract and therefore this paragraph does not apply to that
Contract; see item 2 under DIFFERENCES UNDER THE WVA-83 CONTRACT, page 26), and
one annuitant dies before age 65 and before the annuity date, while the other
annuitant is still living, a comparison will be made, on the date of due proof
of the death of the annuitant, between your Contract fund and the total amount
of purchase payments you have made plus any bonus credited by The Prudential
(reduced by any previous withdrawal[s] in the same proportion that such
withdrawal[s] reduced your Contract fund on the withdrawal date[s]). If the
total amount of purchase payments plus any bonus so calculated is greater, the
difference will be credited to your Contract fund. You may withdraw your
Contract fund without charge within 30 days following the date of due proof of
the death of the annuitant.

VALUATION OF CONTRACT OWNER'S CONTRACT FUND

The value of your Contract fund is the sum of your interests in the variable
investment options and in the fixed-rate option. The value of your Variable
Account is the sum of your separate interests in each subaccount or the Real
Property Account. These values are measured in Units, for example, Money Market
Units, Diversified Bond Units or Flexible Managed Units. You are credited with
Units in each subaccount in which you invest. Every purchase payment you make is
converted into Units of the subaccount or subaccounts you have chosen by
dividing the

<PAGE>

amount of the purchase payment by the Unit Value for the subaccount to which you
have allocated that purchase payment. With regard to purchase payments
subsequent to the initial payment (described above), this is done as of the end
of the valuation period in which the payment is received at a Prudential Home
Office. The value of these Units changes each day to reflect the investment
results and expenses of and deductions of charges from the Series Fund
portfolios in which the assets of the subaccount are invested, in much the same
way that the share values of a mutual fund change each day. The manner in which
the computation is made is complicated and differs somewhat from how mutual fund
share values are determined. It is explained on page C1 of the statement of
additional information. The result is much the same, however. For example, the
product of the number of Diversified Bond Units that are credited to your
Variable Account multiplied by the Diversified Bond Unit Value on any day is the
value of your exact proportionate share of the net assets of the Diversified
Bond Subaccount on that day, just as the number of shares you might hold in a
mutual fund multiplied by the value of a share represents the value of your
proportionate share of the net assets of the mutual fund.

There is, of course, no guarantee that the value of your Contract fund will
increase or that it will not fall below the amount of your total purchase
payments. However, the Prudential guarantees a minimum interest rate of 3% 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 3% guaranteed interest rate. See THE FIXED-RATE OPTION, page
19. The valuation of the portion of the Contract fund allocated to the Real
Property Account is described in the attached prospectus for the Real Property
Account.

If applicable, on each Contract anniversary date before the Annuity date, The
Prudential makes an annual maintenance charge of up to $30. See ANNUAL
MAINTENANCE CHARGE, page 18. If the Contract fund is allocated to more than one
investment option, the charge will be divided on a pro rata basis, according to
the value held in each subaccount, the Real Property Account, and/or the
fixed-rate option. This charge will also be made, as a deduction from the
proceeds of the withdrawal, if you withdraw your entire Contract fund during the
year, including a withdrawal to effect an annuity under your Contract. That
portion of the maintenance charge which is attributable to your Variable Account
will be assessed by reducing the number of Units credited to your Variable
Account.

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. If The Prudential pays a state or local tax at the
time purchase payments are made, the deduction will be made at that time based
on the applicable rate. In many states, The Prudential pays a premium tax when
an annuity is effected. In those states, the tax will be deducted at that time.
The tax rates currently in effect in those states that impose a tax range from
1% to 5%. The Prudential also reserves the right to deduct from each purchase
payment a charge up to a maximum of 0.3% for federal income taxes measured by
premiums in those states where approval has been obtained. Currently, no such
charge is being made in any state.

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 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
commissions, preparation of sales literature, and other promotional activities.
To the extent that the deferred sales charge is insufficient to recover all
distribution expenses, 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. Any amount that you
withdraw may be treated for the purpose of determining sales charges as a
withdrawal of investment income, until you have withdrawn an amount equal to
your investment income. There is no sales charge on the withdrawal of investment
income. 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 (that is, your first purchase
payments will be the first withdrawn). The amount of any sales charge will
depend on the purchase payments withdrawn and the number of Contract years that
have elapsed since you made the particular purchase payments. Your first
Contract year

<PAGE>

begins on the date your initial purchase payment is invested in the Contract
fund (the Contract date). A subsequent Contract year begins on each anniversary
of the Contract date. (Under the WVA-83 Contract, purchase payments, rather than
investment income, are deemed removed first under a withdrawal. Generally, sales
charges on withdrawals under the VIP-84 Contract and the VIP-86 Contract as
described in this section will be less than under the WVA-83 Contract because
investment income is deemed removed before purchase payments, and investment
income is not subject to sales charges. However, due to the possibility of
flexible purchase payments, multiple withdrawals and a variable return, it is
not possible to categorically state that the VIP-84 Contract and the VIP-86
Contract result in lower charges. For a more detailed description of sales
charges on withdrawals under the WVA-83 Contract, see item 1 under DIFFERENCES
UNDER THE WVA-83 CONTRACT, page 26.)

In each Contract year you may make withdrawals of purchase payments from your
Contract fund of up to 10% of the value of the Contract fund as of the date of
the first withdrawal in that Contract year, without incurring a sales charge.
This charge-free withdrawal amount does not accumulate from Contract year to
Contract year. If you withdraw all or part of a purchase payment before the end
of the Contract year during which it was made, the sales charge will be 8% of
the purchase payment that you withdraw, subject to the 10% free withdrawal
privilege. For example, suppose you make an initial purchase payment of $1,000.
Within the same Contract year you withdraw $450 and at the time of that
withdrawal the value of your Contract Fund has grown to $1,100. Since
withdrawals are deemed for sales charge purposes to consist of investment income
first, the amount subject to a sales charge is $350 ($450 minus $100 of
investment income). However, 10% of the value of your Contract fund at the time
of the first withdrawal in the Contract year during which the withdrawal is made
may be withdrawn without charge. Ten percent of $1,100 is $110. Thus, the sales
charge, which generally is also withdrawn from the Contract fund, will be 8% of
$240 (the purchase payment withdrawn minus $110), which is $19.20.

In addition, Critical Care Access is available for Contracts issued on or after
February 1, 1985. Based on regulatory approval of the Waiver of Withdrawal
Charges endorsement, 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.

The sales charge imposed on the withdrawal of a purchase payment during the
Contract year beginning after the purchase payment was made is 7% and continues
to decrease by 1% per year in accordance with the following table:

FOR WITHDRAWALS OF PURCHASE THE SALES CHARGE WILL BE EQUAL TO
PAYMENTS DURING THE CONTRACT YEAR THE FOLLOWING PERCENTAGE OF THE
INDICATED PURCHASE PAYMENT WITHDRAWN (A)
--------------------------------- ----------------------------------
<S> <C>
Contract Year In Which Payment Made 8%
First Contract Year Following Year in Which Payment Made 7%
Second Contract Year Following Year in Which Payment Made 6%
Third Contract Year Following Year in Which Payment Made 5%
Fourth Contract Year Following Year in Which Payment Made 4%
Fifth Contract Year Following Year in Which Payment Made 3%
Sixth Contract Year Following Year in Which Payment Made 2%
Seventh Contract Year Following Year in Which Payment Made 1%
Subsequent Contract Years No Charge
</TABLE>

- ---------------
(a) Subject to 10% free withdrawal described above.

For purchase payments 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 law.

Under the VIP-84 Contract and the VIP-86 Contract, withdrawals are considered,
for federal income tax purposes as well as for the purpose of determining the
amount of any sales charge, as having been made first from investment income.
(Under the WVA-83 Contract, withdrawals are also considered, for federal income
tax purposes, as having been made first from investment income, even though The
Prudential treats them, for purposes of determining any sales charge, as having
been made first from purchase payments -- see item 1 under DIFFERENCES UNDER THE
WVA-83 CONTRACT, page 26 and TAXES PAYABLE BY CONTRACT OWNERS, page 20.)

Your withdrawal request must specify the source from which the withdrawal is to
be made. If you fail to specify, your withdrawal, subject to minimum amount
requirements, will be allocated among the variable investment options in which
you have an interest and the fixed-rate option, if a portion of your Contract
fund is held under that option,

<PAGE>

in the same proportions as the value of your interest in the variable investment
options and in the fixed-rate option bears to the total value of your Contract
fund. Your sales charge will be determined without reference to the source of
the withdrawal. The charge will be determined by reference to the period that
has elapsed since your earliest purchase payment not yet withdrawn, even if that
payment was not originally invested in or has subsequently been transferred from
the source from which the withdrawal was made.

Under the VIP-86 Contract, an annuity may not be effected earlier than 3 years
after the Contract date. If an annuity is effected 3 or more years after the
Contract date under the Supplemental Life Annuity Option (see ANNUITY OPTIONS
UNDER THE VIP-86 CONTRACT, page 22), there will be no sales charge deducted. If
an annuity is effected under one of the other annuity options under the VIP-86
Contract, the sales charge will be determined as described in the above table.

Under the VIP-84 Contract, if an annuity is effected at any time after the
Contract date under the Supplemental Life Annuity Option (see ANNUITY OPTIONS
UNDER THE WVA-83 AND VIP-84 CONTRACTS, page 23), there will be no sales charge
deducted. If an annuity is effected under one of the other annuity options under
the VIP-84 Contract less than 3 years after the Contract date, the sales charge
will be determined as described in the above table. However, if an annuity is
effected under one of such other annuity options (excluding the Annuity Certain
Option) 3 or more years after the Contract date, the sales charge will be 4%
less than each percentage shown in the above table (the sales charge applied to
a withdrawal to effect the Annuity Certain Option will be determined as
described in the above table).

Under the WVA-83 Contract, if an annuity is effected at any time after the
Contract date under the Supplemental Life Annuity Option (see ANNUITY OPTIONS
UNDER THE WVA-83 AND VIP-84 CONTRACTS, page 23), there will be no sales charge
deducted. If an annuity is effected under one of the other annuity options under
the WVA-83 Contract less than 3 years after the Contract date, the sales charge
will be determined as described in the above table. However, if an annuity is
effected under one of such other annuity options (excluding the Annuity Certain
Option) 3 or more years after the Contract date, there will be no sales charge
deducted (the sales charge applied to a withdrawal to effect the Annuity Certain
Option will be determined as described in the above table).

An annuity is effected by applying the annuity purchase rates set forth in your
Contract to the amount credited to your Contract fund--less any applicable sales
charge, recapture of Additional Amounts (see RECAPTURE OF ADDITIONAL AMOUNTS,
below), premium tax (see PREMIUM TAXES, page 16), and annual maintenance charge
(see ANNUAL MAINTENANCE CHARGE, below)--on the date the annuity is effected. The
amount of the annuity payments that you will receive monthly will depend upon
the form of the annuity you select and, for a variable annuity, upon the
investment performance of the subaccount or subaccounts in which the assets are
held. See EFFECTING AN ANNUITY, page 21.

3. RECAPTURE OF ADDITIONAL AMOUNTS. If you make a withdrawal which consists
partially or wholly of purchase payments, The Prudential may recapture the
Additional Amounts that were credited to your Contract fund. 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 8 years (except as
provided in the following paragraph, 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. If the duration from the start
of the Contract year of purchase payment to the start of the Contract year of
withdrawal is 8 years or more, the Additional Amounts credited will not be
recaptured. For example, suppose you make an initial purchase payment of $1,000
for which you are credited with a bonus of 1% or $10. In the second year you
make an additional payment of $2,400, and are credited with an additional bonus
of $24. In the fifth Contract year you request a partial withdrawal of $1,600.
On the date of the withdrawal, the value of your Contract fund is $3,900, which
includes $466 of earnings. Thus the requested withdrawal represents a withdrawal
of $1,134 of purchase payments. Because $1,134 of purchase payments is being
withdrawn and the duration from the start of the Contract years of these
purchase payments to the Contract year of withdrawal is less than 8 years, the
portion of the Additional Amounts recaptured will be $11.34 (1% of $1,134).

The Prudential will not recapture Additional Amounts paid on any purchase
payment[s] withdrawn 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 16.

The Prudential will not recapture Additional Amounts paid on any purchase
payment[s] withdrawn if such withdrawal is used to effect an annuity that is not
subject to a sales charge or is subject to a reduced sales charge. Such annuity
must be effected 1 or more years after the Contract date (3 or more years after
the Contract date under the VIP-86 Contract.) SEE SALES CHARGES ON WITHDRAWALS,
page 16.

4. ANNUAL MAINTENANCE CHARGE. Currently, an annual maintenance charge of up to
$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 charge
is intended to compensate The Prudential for administering the Account,

<PAGE>

maintaining records, and preparing and distributing annual reports and an annual
statement of your Contract fund. 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 16. In addition, this charge is not made after annuitization,
and it may not be increased by The Prudential. See Valuation of Contract Owner's
Contract Fund, page 15.

5. CHARGE FOR ASSUMING MORTALITY AND EXPENSE RISKS. A deduction is made daily
from each of the variable investment options at an annual rate of up to 1.2% of
the assets held in the variable investment options. This charge may not be
increased by The Prudential. Of this amount, one-third, up to 0.4%, is for
assuming the risk that the charges made under the Contracts may not cover
inflation-increased expenses, and two-thirds, up to 0.8%, is for assuming
mortality risks. The mortality risk assumed by The Prudential is the risk that
annuity payments under a selected annuity option (see EFFECTING AN ANNUITY, page
21) may continue for a longer period than anticipated under the life expectancy
tables and schedule of annuity rates in effect when the Contract was issued. The
charges for mortality and expense risks will continue throughout the period of
any variable annuity selected (including a variable annuity certain, even though
The Prudential no longer bears any mortality risk under such a Contract). 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 in 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 11.

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%. Currently, declared interest rates remain
in effect from the date money is allocated to the fixed-rate option until the
same date in the following year. 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%, 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 14.

<PAGE>

FEDERAL TAX STATUS

The following discussion is based on current law and interpretations which may
change. The 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 following
rules do not generally apply to contributions after February 28, 1986 to annuity
contracts held by or for non-natural persons (e.g., corporations). 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
contract 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 detail on
diversification requirements, see DIVIDENDS, DISTRIBUTIONS, AND TAXES in the
attached prospectus for the Series Fund. The Prudential believes 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. It is important, however, to
consider how amounts that are received will be taxed.

TAXES PAYABLE BY CONTRACT OWNERS

The Code provides generally that amounts withdrawn by the 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. The assignment or pledge (or agreement to assign or pledge) any
portion of the value of the Contract for a loan will be treated as a withdrawal
subject to these rules. 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 not be taxable as ordinary income or subject to a penalty
tax. Moreover, all annuity contracts issued after October 21, 1988 by the same
company (and affiliates) to the same contract owner during any calendar year
shall be treated as one annuity contract for purposes of determining whether an
amount is subject to tax under these rules.

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
purchase payments and will not be taxable. The remaining portion 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 purchase payments have 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. A lump sum payment taken in lieu of
remaining annuity payments (as described in item 4 under ANNUITY OPTIONS UNDER
THE WVA-83 AND VIP-84 CONTRACTS, page 23) is not considered an annuity payment
for tax purposes. Any such lump sum payment distributed to an annuitant would be
taxable as ordinary income and may be subject to a penalty tax as described
above.

The Code further provides that any amount received under an annuity contract
which is included in income may be subject to a penalty tax. The amount of the
penalty is equal to 10% of that portion of the amount that is includible in
income. Some withdrawals will be exempt from the penalty. They include
withdrawals: (1) made on

<PAGE>

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), or (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)).

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.

For Contracts issued after January 18, 1985, certain minimum distribution
requirements apply in the case where the owner dies. See EFFECTING AN ANNUITY,
page 21.

Generally, the same tax rules apply to amounts received 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
may defer taxes otherwise payable upon the receipt of a lump sum death benefit.

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 25.

WITHHOLDING

Unless you elect to the contrary, the portion of any amounts received under the
Contract that are attributable to investment income will be subject to
withholding to meet federal income tax obligations. The rate of withholding on
annuity payments will be determined on the basis of the withholding certificate
you may file with The Prudential. If you do not file such a certificate, you
will be treated, for purposes of determining your 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 you fail to elect that The Prudential not do so, it will withhold from
every withdrawal or annuity payment the appropriate percentage of the amount of
the payment that constitutes investment income and hence is taxable. The
Prudential will provide you with forms and instructions concerning your right to
elect that no amount be withheld from payments. If you elect not to have
withholding made, you are liable for payment of federal income taxes on the
taxable portion of the distribution. You may be subject to penalties under the
estimated tax payment rules if your withholding and estimated tax payments are
not sufficient. If you do not provide a social security number or other taxpayer
identification number, you 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.

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.

EFFECTING AN ANNUITY

You may decide at any time to convert the amount of your Contract fund into a
fixed-dollar annuity payable to either one or two annuitant[s] named in the
Contract under one or more of the forms of annuity described. (The VIP-84
Contract and the VIP-86 Contract permit the naming of either one or two
annuitants. However, the WVA-83 Contract permits the naming of only one
annuitant. Therefore, anything in this section which refers to

<PAGE>

"two annuitants" does not apply to the WVA-83 Contract. See item 2 under
DIFFERENCES UNDER THE WVA-83 CONTRACT, page 26.) If two annuitants are named in
the Contract, you may indicate how much of the amount you wish applied for each
annuitant and under which form[s] of annuity. Except for an annuity selected
under the Supplemental Life Annuity Option, WVA-83 and VIP-84 Contract owners
may select a variable annuity instead of or in addition to a fixed-dollar
annuity. If such variable annuity selection is made, amounts held under the Real
Property Account and/or fixed-rate option will be transferred to your Variable
Account in accordance with your instructions at the time your Contract fund is
converted into an annuity.

Unless The Prudential consents to a later date, the latest date that you can
choose for converting your Contract fund into an annuity is the first day of the
calendar month coinciding with or otherwise next following the 90th birthday of
the annuitant or, if there are two annuitants named in the Contract, the 90th
birthday of the younger of the annuitants. 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 you select.

You must convert the entire value of your Contract fund to an annuity or to an
annuity and a cash withdrawal. If your Contract fund is not large enough to
produce an initial payment of $20 ($50 under VIP-86 Contracts), you will be paid
the amount of your Contract fund in a single sum. Annuity payments will not be
assignable by you or subject to the claims of creditors. The annuity is effected
on the first day of the month following receipt by The Prudential of proper
written notice that you have elected to convert your Contract fund to an annuity
or on the first day of any subsequent month that you designate. The first
monthly annuity payment will be made on the date the annuity is effected.

The Contract includes schedules that are used to determine the amount of the
first monthly variable and/or fixed dollar annuity payment that will be provided
by the amount credited to your Contract fund (the VIP-86 Contract provides a
schedule only for a Life Annuity with 120 Payments Certain Option; however,
other forms of annuity are available under the Supplemental Life Annuity
Option.) The amount varies with the form of annuity selected. For life
annuities, it also varies with the age and sex of the annuitant (and contingent
annuitant, if the Joint and Survivor Annuity Option is chosen) and the date when
annuity payments begin. Also, if The Prudential is offering more favorable rates
than is set forth in the table of rates in the Contract, then those will be
used. For a variable annuity, subsequent monthly payments will vary in
accordance with the investment results of the subaccount[s] you have selected.
Page C1 of the statement of additional information explains in more detail how
your Contract fund is converted into a variable annuity. For a fixed-dollar
annuity, subsequent monthly payments will always be at least equal to the first
monthly payment.

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 follows. 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 the date of death. However, if
an annuity payment option is selected by the designated beneficiary and if the
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 over a specified
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. If the designated beneficiary is the
owner's spouse, these rules will not apply until death of the owner's spouse.

ANNUITY OPTIONS UNDER THE VIP-86 CONTRACT

If you are the owner of a VIP-86 Contract, you may select any of the annuity
options described below. Unlike many variable annuity contracts, the VIP-86
Contract does not provide an option for a variable payout during the annuity or
payout period. All the annuity options under this Contract are fixed annuity
options under which the Contract owner's participation in the Account's and/or
Real Property Account's investment experience ceases when the annuity is
effected, and the amount of each monthly payment does not change.

The forms of annuity from which you may select are listed below. Under each,
annuity payments will be in monthly installments of a guaranteed amount. Unless
applicable law states otherwise, if you have not selected an annuity option to
take effect by the annuity date stated in your Contract (which will not be later
than the annuitant's 90th birthday) the interest payment option (see below) will
become effective then.

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 you designate unless you so select. 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.

<PAGE>

2. INTEREST PAYMENT OPTION. You may choose to have The Prudential hold a
designated amount for you at interest. The Prudential will pay interest at an
effective rate of at least 3% a year, and it may pay a higher rate of interest.

3. SUPPLEMENTAL LIFE ANNUITY. You may choose to receive the proceeds of your
Contract fund in the form of payments like those of any annuity or life annuity
then regularly offered by The Prudential or by Pruco Life Insurance Company that
(1) is based on United States Currency; (2) is bought by a single sum; (3) does
not provide for dividends; and (4) does not normally provide for deferral of the
first payment. The Prudential currently offers a number of different annuity
options including joint and survivor annuities covering more than one person.

ANNUITY OPTIONS UNDER THE WVA-83 AND VIP-84 CONTRACTS

If you own a WVA-83 Contract or a VIP-84 Contract, the following provisions of
this section apply to you. You have considerable flexibility in selecting an
annuity: (1) you may select either a fixed-dollar or variable annuity (a
variable annuity is not available under the Supplemental Life Annuity Option
described in item 5 below) or both; (2) you may select more than one annuity
option; (3) if you select a variable annuity, you may apply the value of your
Variable Account to only one or to two or more subaccounts, and not necessarily
the same subaccount distribution as you used before selecting an annuity; and
(4) if two annuitants are named in the VIP-84 Contract, you may select a
separate annuity or annuities for each annuitant. However, the initial minimum
monthly payment amount will be applicable to each payee, each annuity, and each
subaccount selected.

Except as provided in the Annuity Certain Option described in item 4 below, and
under certain forms of annuity available under the Supplemental Life Annuity
Option described in item 5 below, once annuity payments begin, the annuitant
cannot surrender the annuity benefit and receive a one-sum payment in lieu
thereof (such surrender and one-sum payment also may be under certain forms of
annuity available under the Supplemental Life Annuity Option described in item 5
below). However, as described under TRANSFERS on page 14, if a variable annuity
is selected, the annuitant may transfer the annuity funds between subaccounts up
to four times each Contract year. Additionally, an annuitant who is receiving a
variable annuity may convert all or a part of the variable annuity to a
fixed-dollar annuity, provided: (1) the fixed-dollar annuity is the same form of
annuity as the variable annuity and has the same certain or specified period as
remained under the variable annuity on the conversion date, (2) the present
value on the conversion date of the variable annuity, or portion of the variable
annuity to be converted, calculated in accordance with the Contract, must
produce a monthly payment of at least $20 under the fixed-dollar annuity, and
(3) if only a portion of the variable annuity is converted, the Subaccount
Annuity Units remaining in the unconverted portion must be sufficient to produce
a monthly payment on the conversion date of at least $20.

After annuity payments begin, conversion may not be made from a fixed-dollar
annuity to a variable annuity.

The forms of annuity from which you may select are listed below. Under each, (1)
variable annuity payments can be expected to vary from month to month according
to the investment experience of the portfolio or portfolios in which your
Variable Account is invested, or (2) fixed-dollar annuity payments will be in
monthly installments of a guaranteed amount. For the reason explained on page C1
of the statement of additional information, if the assets of the subaccount
which you have selected do not earn an investment return of 4.7% a year, the
amount of payments under a variable annuity will decrease; conversely, if the
assets of the subaccount(s) which you have selected earn an investment return of
more than 4.7% a year, variable annuity payments will increase. Unless
applicable law states otherwise, if you choose to convert your Variable Account
into an annuity but fail to select one or more of the annuity options, we will
provide a variable Life Annuity with 120 payments certain to the annuitant (if
two annuitants are named in the VIP-84 Contract and both are living, the
variable Life Annuity with 120 payments certain will be provided for the
annuitant identified as First Annuitant in the Contract).

1. LIFE ANNUITY. Payments will be made to the annuitant monthly during his or
her lifetime and will cease with the last monthly payment before his or her
death. Should the annuitant die within a few years after payments begin, total
payments received will probably be substantially less than the value of your
Variable Account when annuity payments first began, and as little as one payment
could be received under this form of annuity.

2. 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, we will discount each such
payment at an interest rate of 3.5% a year. The monthly payments under this form
of annuity will be slightly lower than those payable under the life annuity
described above.

3. JOINT AND SURVIVOR LIFE ANNUITY. Payments will be made to the annuitant
monthly during his or her lifetime and, if the contingent annuitant you
designate is living at the time of the annuitant's death, to that person until
his or her death. The monthly payments to your contingent annuitant will be
equal to those that would have been received by the annuitant if he or she had
survived unless a different amount is required by applicable law or

<PAGE>

regulation or by the terms of a plan. Monthly payments under this form of
annuity will be less than the payments under either of the forms described
above.

4. ANNUITY CERTAIN. Payments will be made to the annuitant monthly for a period
of 60, 120, 180 or 240 months. During this period, the annuitant may elect to
receive a lump sum payment in lieu of the remaining monthly payments or to
receive a partial lump sum payment with reduced monthly payments thereafter. Any
partial lump sum payment must be $300 or more. Also, the initial reduced monthly
payment must equal or exceed $20. If the annuitant dies during the
annuity-certain period, monthly payments will not continue to the beneficiary
you designate unless you so select. Instead, the beneficiary will receive a lump
sum payment. The amount of the lump sum payment (or partial lump sum payment) is
determined by discounting each remaining unpaid monthly payment (or the amount
by which each remaining monthly payment is reduced as a result of a partial lump
sum payment) at an interest rate of 3.5% a year. This will be paid to the
annuitant or the annuitant's beneficiary, whichever is applicable.

5. SUPPLEMENTAL LIFE ANNUITY. Fixed-dollar annuity payments will be provided as
described in item 3 under ANNUITY OPTIONS UNDER THE VIP-86 CONTRACT, page 22.

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.

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 instructions is calculated where
such a change is necessary to comply with current federal regulations or
interpretations of those regulations. WVA-83 and VIP-84 Contract owners who
elect to receive a variable annuity option will continue to have voting rights
during their payout period. Their number of votes will be determined in the same
manner as described above, but will decrease throughout the payout period.

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.

<PAGE>

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.
Commissions of 3% to the selling representative and a 0.6% management override
will be paid on the first $2,000 of purchase payments per Contract and
commissions of 2.25% to the selling representative and a 0.4% management
override will be paid on all purchase payments thereafter. 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
13. Such commissions may not be payable, however, where a Contract owner has
surrendered an existing contract of The Prudential or its subsidiaries to
purchase the Contract. 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.

OWNERSHIP OF THE CONTRACT

Generally, the purchaser of a Contract is both the Contract owner and the person
entitled to receive an annuity and is entitled to exercise all the rights under
the Contract. Ownership of the Contract may, however, be transferred to another
person who need not be the person who is to receive annuity payments. In
addition, businesses that own a Contract under which an employee is the
annuitant may be able to change the annuitant from one key employee to another
if certain requirements are met. Generally, ownership of the Contract is not
assignable to another insurance company or employee benefit plan or program
without The Prudential's consent. Transfer of the ownership of a Contract may
involve federal income tax consequences, and you should consult with a qualified
tax advisor before attempting any such transfer.

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.

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.

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.

<PAGE>

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

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.

DIFFERENCES UNDER THE WVA-83 CONTRACT

As stated in the section entitled THE PRUDENTIAL INDIVIDUAL VARIABLE CONTRACT
ACCOUNT on page 11, the descriptions of The Prudential Individual Variable
Annuity Contract in the preceding sections of this prospectus and on page C1 of
the statement of additional information generally apply to the VIP-86 Contract,
the VIP-84 Contract and the WVA-83 Contract. Although differences among the
three forms of Contract have been described, additional differences between the
earlier WVA-83 Contract and the two later forms of the Contract are set forth
below.

1. SALES CHARGES ON WITHDRAWALS...Under the WVA-83 Contract, any amount
that you withdraw will be treated, for the purpose of determining the
sales charge, as a withdrawal of purchase payments, rather than
investment income, until you have withdrawn your aggregate purchase
payments. There will be no sales charge on amounts withdrawn after all
purchase payments have been withdrawn. For sales charge purposes,
purchase payments are deemed to be withdrawn on a first-in, first-out
basis. The amount of the sales charge will depend on the amount
withdrawn and the number of Contract years that have elapsed since you
made the particular purchase payments deemed to be withdrawn. The 10%
free withdrawal privilege will be applied toward the total amount
withdrawn. Withdrawals are treated, for purposes of federal income
taxation, as first from investment income, even though The Prudential
treats them as being made from purchase payments.

2. NAMING OF ANNUITANT...Under the WVA-83 Contract, only one annuitant
may be named. There is no provision for naming two annuitants as is
the case under the VIP-84 Contract and the VIP-86 Contract. Wherever
this prospectus mentions "one or two annuitants", or "two annuitants",
the term "two annuitants" does not apply to the WVA-83 Contract, and
anything which is contingent upon two annuitants being named in the
Contract does not apply to the WVA-83 Contract. Therefore, any
discussion in the preceding sections of this prospectus which relates
to two annuitants, such as the possibility of a death benefit credit
being added to your Variable Account due to the death of the first to
die of the two annuitants named in the Contract (as described in the
third paragraph under DEATH BENEFIT on page 15), will not apply to the
WVA-83 Contract.

3. DETERMINATION OF MINIMUM AMOUNT PAYABLE TO A BENEFICIARY...Under the
WVA-83 Contract, the minimum amount payable to the beneficiary (due to
the death of the annuitant prior to age 65 and before the annuity
date) will be equal to the total amount of purchase payment you have
made, less any withdrawals (i.e., there is no proportional reduction
of the minimum amount as is the case under the VIP-84 Contract and the
VIP-86 Contract).

4. MODIFICATION OF SENTENCE ON PAGE C1 OF THE STATEMENT OF ADDITIONAL
INFORMATION...The second sentence in the next to last paragraph under
section B, Determination of the Amount of Monthly Variable Annuity
Payment, as it applies to the WVA-83 Contract, is modified to read:
"For example, for a person of 65 years of age who has selected a
lifetime annuity with a guaranteed minimum of 120 payments, the
applicable schedules currently provide that 1000 Subaccount Annuity
Units will result in the payment each month of an amount equal to the
value of 6.28 Subaccount Annuity Units."

5. DETERMINATION OF AMOUNT OF MONTHLY VARIABLE ANNUITY PAYMENTS...Under
the WVA-83 Contract, the amount of each monthly variable annuity
payment made on the first day of the month will be equal to the
Subaccount Annuity Units (determined as described on page C1 of the
statement of additional information) multiplied by the Subaccount
Annuity Unit Value at the end of that day, if a business day, or
otherwise at the end of the last preceding business day.

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.

<PAGE>

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 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. PARTICIPATION IN DIVISIBLE SURPLUS
D. PERFORMANCE INFORMATION
E. 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: One Seagate, Toledo, OH 43604.

LISLE C. CARTER, JR., Director.--Former Senior Vice President and General
Counsel, United Way of America. Address: 701 North Fairfax Avenue, Alexandria,
VA 22314.

JAMES G. CULLEN, Director.--Vice Chairman, Bell Atlantic Corporation since 1995;
1993 to 1995: President, Bell Atlantic Corporation; Prior to 1993: President,
New Jersey Bell. Address: 1310 North Court House Road, 11th floor, Alexandria,
VA 22201.

CAROLYNE K. DAVIS, Director.--Health Care Advisor, Ernst & Young. Address: 5480
Cayuga Lake Road, Romulus, NY 14541.

ROGER A. ENRICO, Director.--Chairman and Chief Executive Officer, Pepsico
Worldwide Restaurants since 1994; 1993 to 1994: Vice Chairman, Pepsi Co. Inc.;
1991 to 1993: Chairman and Chief Executive Officer, Pepsi Co. Worldwide Foods.
Address: 6303 Forest Park, Dallas, TX 75235.

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. Address: 8260 Willow Oaks Corporate Drive,
Fairfax, VA 22031.

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. 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.--Professor, Princeton University. Address:
Princeton University, 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: Prudential Plaza, Newark, NJ 07102-3777.

CHARLES R. SITTER, Director.--Former President and 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.--Former Chairman, President and Chief Executive
Officer, Merck & Co., Inc. Address: One Crossroads Drive, Bedminster, NJ 07921.

STANLEY C. VAN NESS, Director.--Attorney, Picco, Herbert, and Kennedy (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.--Director, 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

MARK B. GRIER, Chief Financial Officer.--Chief Financial Officer of The
Prudential since 1995; Prior to 1995: Executive Vice President and Head of
Global Markets, Chase Manhattan Corporation.

SUSAN L. BLOUNT, Vice President and Secretary.--Vice President and Secretary of
The Prudential since 1995; Prior to 1995: Assistant General Counsel for
Prudential Residential Services Company.

C. EDWARD CHAPLIN, Vice President and Treasurer.--Vice President and Treasurer
of The Prudential since 1995; 1993 to 1995: Managing Director and Assistant
Treasurer of The Prudential; 1992 to 1993: Vice President and Assistant
Treasurer, Banking and Cash Management for The Prudential; Prior to 1992:
Regional Vice President of Prudential Mortgage Capital Company.

<PAGE>

o INDIVIDUAL VARIABLE ANNUITY CONTRACTS

o THE PRUDENTIAL SERIES FUND, INC.

o THE PRUDENTIAL VARIABLE CONTRACT REAL
PROPERTY ACCOUNT

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BULK RATE
U.S. Postage
PAID
Jersey City, N.J.
Permit No. 60

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

<PAGE>

PART B

INFORMATION REQUIRED IN A
STATEMENT OF ADDITIONAL INFORMATION

STATEMENT OF ADDITIONAL INFORMATION

May 1, 1996

INDIVIDUAL VARIABLE ANNUITY CONTRACTS
OF
THE PRUDENTIAL INDIVIDUAL VARIABLE CONTRACT ACCOUNT

The Individual Variable Annuity Contract (the "Contract") of The Prudential
Individual Variable Contract Account (the "Account") is a variable annuity
contract issued by The Prudential Insurance Company of America ("The
Prudential"). The Contract is purchased by making an initial purchase payment of
$1,000 or more; subsequent payments must be $100 or more.

This statement of additional information is not a prospectus and should be read
in conjunction with the Contract's prospectus, dated May 1, 1996, 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

VIP-1B Ed 5-96

Catalog # 64M0999

<PAGE>

CONTENTS

Page
----
OTHER INFORMATION CONCERNING THE ACCOUNT.................................. 1
A. EXPERTS............................................................ 1
B. PRINCIPAL UNDERWRITER.............................................. 1
C. PARTICIPATION IN DIVISIBLE SURPLUS................................. 1
D. PERFORMANCE INFORMATION............................................ 1
E. 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

DETERMINATION OF SUBACCOUNT UNIT VALUES AND OF THE AMOUNT OF MONTHLY
VARIABLE ANNUITY PAYMENTS............................................. C1
A. SUBACCOUNT UNIT VALUES............................................. C1
B. DETERMINATION OF THE AMOUNT OF MONTHLY VARIABLE ANNUITY PAYMENT.... C1

<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.

On March 12, 1996, Deloitte & Touche LLP was dismissed as the independent
accountants of The Prudential. There have been no disagreements with Deloitte &
Touche LLP on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedure which, if not resolved to
the satisfaction of the accountant, would have caused them to make a reference
to the matter in their reports.

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. 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 because the charges made by The Prudential are not expected to exceed
its actual expenses in distributing and administering the Contracts. However,
there may be dividends payable during an annuity payout period.

D. PERFORMANCE INFORMATION

The tables that follow provide performance information for each subaccount
through December 31, 1995. The performance information is based on historical
experience and does not indicate or represent future performance.

<PAGE>

Average Annual Total Return

Table 1 below shows the average annual rates of total return on hypothetical
investments of $1,000 for periods ended December 31, 1995 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 TEN YEARS ESTABLISHED
DATE ENDED ENDED ENDED THROUGH
SUBACCOUNT ESTABLISHED 12/31/95 12/31/95 12/31/95 12/31/95
==================== ==================== ================== =================== =================== =====================
<S> <C> <C> <C> <C> <C>
Diversified Bond 6/83 12.84 8.01 7.86 8.68
- -----------------------------------------------------------------------------------------------------------------------------
Government 5/89 11.59 7.47 N/A 8.05
Income
- -----------------------------------------------------------------------------------------------------------------------------
Conservative 6/83 9.40 8.74 8.55 9.12
Balanced
- -----------------------------------------------------------------------------------------------------------------------------
Flexible 5/83 16.22 11.50 9.99 10.19
Managed
- -----------------------------------------------------------------------------------------------------------------------------
High Yield Bond 2/87 9.68 15.55 N/A 7.03
- -----------------------------------------------------------------------------------------------------------------------------
Stock Index 10/87 29.09 14.21 N/A 14.11
- -----------------------------------------------------------------------------------------------------------------------------
Equity Income 2/88 13.80 14.33 N/A 12.32
- -----------------------------------------------------------------------------------------------------------------------------
Equity 6/83 23.35 16.92 13.27 13.19
- -----------------------------------------------------------------------------------------------------------------------------
Prudential 5/95 N/A N/A N/A 16.21
Jennison
- -----------------------------------------------------------------------------------------------------------------------------
Small 5/95 N/A N/A N/A 11.53
Capitalization
Stock
- -----------------------------------------------------------------------------------------------------------------------------
Global 5/89 8.01 9.23 N/A 5.98
- -----------------------------------------------------------------------------------------------------------------------------
Natural 5/88 19.00 10.54 N/A 10.73
Resources
=============================================================================================================================
</TABLE>

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 included, however
it applies only if the Contract Fund is less than $10,000.

<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 TEN YEARS ESTABLISHED
DATE ENDED ENDED ENDED THROUGH
SUBACCOUNT ESTABLISHED 12/31/95 12/31/95 12/31/95 12/31/95
==================== ==================== ================== =================== =================== =====================
<S> <C> <C> <C> <C> <C>
Diversified Bond 6/83 19.01 8.38 7.86 8.68
- -----------------------------------------------------------------------------------------------------------------------------
Government 5/89 17.76 7.85 N/A 8.21
Income
- -----------------------------------------------------------------------------------------------------------------------------
Conservative 6/83 15.59 9.10 8.55 9.12
Balanced
- -----------------------------------------------------------------------------------------------------------------------------
Flexible 5/83 22.36 11.82 9.99 10.19
Managed
- -----------------------------------------------------------------------------------------------------------------------------
High Yield Bond 2/87 15.87 15.81 N/A 7.03
- -----------------------------------------------------------------------------------------------------------------------------
Stock Index 10/87 35.15 14.50 N/A 14.11
- -----------------------------------------------------------------------------------------------------------------------------
Equity Income 2/88 19.96 14.61 N/A 12.36
- -----------------------------------------------------------------------------------------------------------------------------
Equity 6/83 29.44 17.16 13.27 13.19
- -----------------------------------------------------------------------------------------------------------------------------
Prudential 5/95 N/A N/A N/A 23.23
Jennison
- -----------------------------------------------------------------------------------------------------------------------------
Small 5/95 N/A N/A N/A 18.58
Capitalization
Stock
- -----------------------------------------------------------------------------------------------------------------------------
Global 5/89 14.21 9.58 N/A 6.17
- -----------------------------------------------------------------------------------------------------------------------------
Natural 5/88 25.12 10.88 N/A 10.78
Resources
=============================================================================================================================

</TABLE>

<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 TEN YEARS ESTABLISHED
DATE ENDED ENDED ENDED THROUGH
SUBACCOUNT ESTABLISHED 12/31/95 12/31/95 12/31/95 12/31/95
==================== ==================== ================== =================== ==================== ======================
<S> <C> <C> <C> <C> <C>
Diversified Bond 6/83 19.01 49.52 113.12 184.49
- -----------------------------------------------------------------------------------------------------------------------------
Government 5/89 17.76 45.91 N/A 69.26
Income
- -----------------------------------------------------------------------------------------------------------------------------
Conservative 6/83 15.59 54.58 127.12 199.84
Balanced
- -----------------------------------------------------------------------------------------------------------------------------
Flexible Managed 5/83 22.36 74.81 159.18 239.33
- -----------------------------------------------------------------------------------------------------------------------------
High Yield Bond 2/87 15.87 108.36 N/A 82.51
- -----------------------------------------------------------------------------------------------------------------------------
Stock Index 10/87 35.15 96.76 N/A 195.10
- -----------------------------------------------------------------------------------------------------------------------------
Equity Income 2/88 19.96 97.78 N/A 149.99
- -----------------------------------------------------------------------------------------------------------------------------
Equity 6/83 29.44 120.79 247.53 374.50
- -----------------------------------------------------------------------------------------------------------------------------
Prudential 5/95 N/A N/A N/A 23.23
Jennison
- -----------------------------------------------------------------------------------------------------------------------------
Small 5/95 N/A N/A N/A 18.58
Capitalization
Stock
- -----------------------------------------------------------------------------------------------------------------------------
Global 5/89 14.21 58.03 N/A 49.01
- -----------------------------------------------------------------------------------------------------------------------------
Natural 5/88 25.12 67.57 N/A 119.11
Resources
=============================================================================================================================
</TABLE>

MONEY MARKET SUBACCOUNT YIELD

The "yield" and "effective yield" of the Money Market Subaccount for the seven
days ended December 31, 1995 were 4.0499% and 4.1314%, 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 Contract
owner 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 ten-thousandth 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 does reflect the annual contract fee, however it will
only be charged 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.

<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.

E. 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>

(This page intentionally left blank.)

<PAGE>

FINANCIAL STATEMENTS OF
THE PRUDENTIAL INDIVIDUAL VARIABLE CONTRACT ACCOUNT

STATEMENTS OF NET ASSETS

December 31, 1995

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

MONEY DIVERSIFIED FLEXIBLE
TOTAL MARKET BOND EQUITY MANAGED
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investment in shares of The Prudential Series
Fund, Inc.
Portfolios at net asset value [Note 2]........ $5,444,558,604 $ 301,875,184 $ 230,850,183 $1,051,022,427 $ 750,088,016
Receivable from Related Separate Account........ 112,981 0 112,981 0 0
-------------- -------------- -------------- -------------- --------------
Total Assets.................................. $5,444,671,585 $ 301,875,184 $ 230,963,164 $1,051,022,427 $ 750,088,016
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
LIABILITIES
Payable to Related Separate Account............. 319,050 0 0 0 64,082
-------------- -------------- -------------- -------------- --------------
NET ASSETS........................................ $5,444,352,535 $ 301,875,184 $ 230,963,164 $1,051,022,427 $ 750,023,934
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
NET ASSETS, representing:
Equity of Contract owners [Note 7].............. $5,421,669,993 $ 296,695,117 $ 230,461,365 $1,047,234,939 $ 748,845,182
Equity of annuitants [Note 7]................... 784,567 78,379 501,799 12,010 91,342
Equity of The Prudential Insurance Company of
America....................................... 21,897,975 5,101,688 0 3,775,478 1,087,410
-------------- -------------- -------------- -------------- --------------
$5,444,352,535 $ 301,875,184 $ 230,963,164 $1,051,022,427 $ 750,023,934
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
Accumulation units.............................. 153,623,767 79,509,191 215,937,641 215,896,989
</TABLE>

STATEMENTS OF OPERATIONS

For the year ended December 31, 1995

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

MONEY DIVERSIFIED FLEXIBLE
TOTAL MARKET BOND EQUITY MANAGED
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividend distributions received................. $ 194,172,359 $ 17,183,675 $ 14,420,460 $ 19,602,886 $ 21,936,917

EXPENSES
Charges to Contract owners and annuitants for
assuming mortality risk and expense risk and
for administration [Note 3A].................. 58,459,090 3,572,438 2,485,614 10,505,320 8,101,521
-------------- -------------- -------------- -------------- --------------
NET INVESTMENT INCOME (LOSS)...................... 135,713,269 13,611,237 11,934,846 9,097,566 13,835,396
-------------- -------------- -------------- -------------- --------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Capital gains distributions received............ 150,358,900 0 502,131 36,304,982 31,019,792
Realized gain (loss) on shares redeemed
[average cost basis].......................... 8,509,392 0 (575,793) 1,787,973 2,338,699
Net unrealized gain on investments.............. 606,951,341 0 25,152,294 177,526,174 92,545,862
-------------- -------------- -------------- -------------- --------------
NET GAIN ON INVESTMENTS........................... 765,819,633 0 25,078,632 215,619,129 125,904,353
-------------- -------------- -------------- -------------- --------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS....................... $ 901,532,902 $ 13,611,237 $ 37,013,478 $ 224,716,695 $ 139,739,749
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A9 THROUGH A11.

A1
<PAGE>

STATEMENTS OF NET ASSETS (CONTINUED)
December 31, 1995
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
------------------------------------------------------------------------------

HIGH
CONSERVATIVE YIELD STOCK EQUITY NATURAL
BALANCED BOND INDEX INCOME RESOURCES
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investment in shares of The Prudential Series
Fund, Inc.
Portfolios at net asset value [Note 2]........ $1,323,818,832 $ 192,078,101 $ 305,165,827 $ 630,289,355 $ 102,616,497
Receivable from Related Separate Account........ 0 0 0 0 0
-------------- -------------- -------------- -------------- --------------
Total Assets.................................. $1,323,818,832 $ 192,078,101 $ 305,165,827 $ 630,289,355 $ 102,616,497
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
LIABILITIES
Payable to Related Separate Account............. 254,968 0 0 0 0
-------------- -------------- -------------- -------------- --------------
NET ASSETS........................................ $1,323,563,864 $ 192,078,101 $ 305,165,827 $ 630,289,355 $ 102,616,497
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
NET ASSETS, representing:
Equity of Contract owners [Note 7].............. $1,322,743,616 $ 190,910,072 $ 303,450,955 $ 628,727,127 $ 102,007,152
Equity of annuitants [Note 7]................... 101,037 0 0 0 0
Equity of The Prudential Insurance Company of
America....................................... 719,211 1,168,029 1,714,872 1,562,228 609,345
-------------- -------------- -------------- -------------- --------------
$1,323,563,864 $ 192,078,101 $ 305,165,827 $ 630,289,355 $ 102,616,497
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
Accumulation units.............................. 429,889,311 102,366,296 126,409,456 248,502,852 46,456,844

GOVERNMENT PRUDENTIAL
GLOBAL INCOME JENNISON
-------------- -------------- --------------
<S> <C> <C> <C>
ASSETS
Investment in shares of The Prudential Series
Fund, Inc.
Portfolios at net asset value [Note 2]........ $ 215,123,382 $ 288,392,436 $ 32,347,295
Receivable from Related Separate Account........ 0 0 0
-------------- -------------- --------------
Total Assets.................................. $ 215,123,382 $ 288,392,436 $ 32,347,295
-------------- -------------- --------------
-------------- -------------- --------------
LIABILITIES
Payable to Related Separate Account............. 0 0 0
-------------- -------------- --------------
NET ASSETS........................................ $ 215,123,382 $ 288,392,436 $ 32,347,295
-------------- -------------- --------------
-------------- -------------- --------------
NET ASSETS, representing:
Equity of Contract owners [Note 7].............. $ 214,243,199 $ 287,421,420 $ 28,948,748
Equity of annuitants [Note 7]................... 0 0 0
Equity of The Prudential Insurance Company of
America....................................... 880,183 971,016 3,398,547
-------------- -------------- --------------
$ 215,123,382 $ 288,392,436 $ 32,347,295
-------------- -------------- --------------
-------------- -------------- --------------
Accumulation units.............................. 139,717,751 167,252,309 23,250,886
</TABLE>

STATEMENTS OF OPERATIONS (CONTINUED)
For the year ended December 31, 1995
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
------------------------------------------------------------------------------

HIGH
CONSERVATIVE YIELD STOCK EQUITY NATURAL
BALANCED BOND INDEX INCOME RESOURCES
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividend distributions received................. $ 52,080,576 $ 18,700,767 $ 5,547,995 $ 22,221,011 $ 1,180,883

EXPENSES
Charges to Contract owners and annuitants for
assuming mortality risk and expense risk and
for administration [Note 3A].................. 14,861,508 2,056,257 2,948,524 6,924,845 1,104,293
-------------- -------------- -------------- -------------- --------------
NET INVESTMENT INCOME (LOSS)...................... 37,219,068 16,644,510 2,599,471 15,296,166 76,590
-------------- -------------- -------------- -------------- --------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Capital gains distributions received............ 44,897,730 0 2,163,961 26,532,315 4,657,784
Realized gain (loss) on shares redeemed
[average cost basis].......................... 2,363,488 (257,168) 1,244,308 921,914 661,765
Net unrealized gain on investments.............. 99,860,016 9,519,030 67,650,481 62,603,120 15,537,556
-------------- -------------- -------------- -------------- --------------
NET GAIN ON INVESTMENTS........................... 147,121,234 9,261,862 71,058,750 90,057,349 20,857,105
-------------- -------------- -------------- -------------- --------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS....................... $ 184,340,302 $ 25,906,372 $ 73,658,221 $ 105,353,515 $ 20,933,695
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------

GOVERNMENT PRUDENTIAL
GLOBAL INCOME JENNISON*
-------------- -------------- --------------
<S> <C> <C> <C>
INVESTMENT INCOME
Dividend distributions received................. $ 3,246,250 $ 17,989,214 $ 956
EXPENSES
Charges to Contract owners and annuitants for
assuming mortality risk and expense risk and
for administration [Note 3A].................. 2,444,033 3,283,191 89,483
-------------- -------------- --------------
NET INVESTMENT INCOME (LOSS)...................... 802,217 14,706,023 (88,527)
-------------- -------------- --------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Capital gains distributions received............ 4,103,547 0 0
Realized gain (loss) on shares redeemed
[average cost basis].......................... 1,484,297 (1,549,875) 67,696
Net unrealized gain on investments.............. 21,601,985 33,262,626 945,643
-------------- -------------- --------------
NET GAIN ON INVESTMENTS........................... 27,189,829 31,712,751 1,013,339
-------------- -------------- --------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS....................... $ 27,992,046 $ 46,418,774 $ 924,812
-------------- -------------- --------------
-------------- -------------- --------------
*Commenced
Business
on 5/1/95
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A9 THROUGH A11.

A2
<PAGE>

STATEMENTS OF NET ASSETS (CONTINUED)

December 31, 1995

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

SMALL
CAPITALIZATION
STOCK
--------------
<S> <C>
ASSETS
Investment in shares of The Prudential Series
Fund, Inc.
Portfolios at net asset value [Note 2]........ $ 20,891,069
Receivable from Related Separate Account........ 0
--------------
Total Assets.................................. $ 20,891,069
--------------
--------------
LIABILITIES
Payable to Related Separate Account............. 0
--------------
NET ASSETS........................................ $ 20,891,069
--------------
--------------
NET ASSETS, representing:
Equity of Contract owners [Note 7].............. $ 19,981,101
Equity of annuitants [Note 7]................... 0
Equity of The Prudential Insurance Company of
America....................................... 909,968
--------------
$ 20,891,069
--------------
--------------
Accumulation units.............................. 16,794,510
</TABLE>

STATEMENTS OF OPERATIONS (CONTINUED)

For the year ended December 31, 1995

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

SMALL
CAPITALIZATION
STOCK*
--------------
<S> <C>
INVESTMENT INCOME
Dividend distributions received................. $ 60,769

EXPENSES
Charges to Contract owners and annuitants for
assuming mortality risk and expense risk and
for administration [Note 3A].................. 82,063
--------------
NET INVESTMENT INCOME (LOSS)...................... (21,294)
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Capital gains distributions received............ 176,658
Realized gain (loss) on shares redeemed
[average cost basis].......................... 22,088
Net unrealized gain on investments.............. 746,554
--------------
NET GAIN ON INVESTMENTS........................... 945,300
--------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS....................... $ 924,006
--------------
--------------
*Commenced
Business
on 5/1/95
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A9 THROUGH A11.

A3
<PAGE>

(This page intentionally left blank.)

A4
<PAGE>

FINANCIAL STATEMENTS OF
THE PRUDENTIAL INDIVIDUAL VARIABLE CONTRACT ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS

For the years ended December 31, 1995 and 1994

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

MONEY DIVERSIFIED
TOTAL MARKET BOND
------------------------------ ------------------------------ ------------------------------
1995 1994 1995 1994 1995 1994
-------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>

OPERATIONS:
Net investment income (loss)..... $ 135,713,269 $ 109,176,830 $ 13,611,237 $ 7,909,882 $ 11,934,846 $ 11,051,810
Capital gains distributions
received....................... 150,358,900 90,120,652 0 0 502,131 502,181
Realized gain (loss) on shares
redeemed
[average cost basis]........... 8,509,392 (222,561) 0 0 (575,793) (1,189,724)
Net unrealized gain (loss) on
investments.................... 606,951,341 (293,645,714) 0 0 25,152,294 (20,577,461)
-------------- -------------- -------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM OPERATIONS........ 901,532,902 (94,570,793) 13,611,237 7,909,882 37,013,478 (10,213,194)
-------------- -------------- -------------- -------------- -------------- --------------

ACCUMULATION AND ANNUITY
UNIT TRANSACTIONS
Purchase payments and transfers
in............................. 1,558,638,620 2,259,702,701 411,591,864 464,841,336 38,739,795 49,300,910
Withdrawals and transfers out.... (1,524,246,512) (1,419,835,561) (419,028,549) (397,515,189) (43,822,166) (62,036,927)
Annuity benefit payments......... (68,616) (17,578) (5,622) 0 (34,728) 0
-------------- -------------- -------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM ACCUMULATION
AND ANNUITY UNIT TRANSACTIONS.... 34,323,492 839,849,562 (7,442,307) 67,326,147 (5,117,099) (12,736,017)
-------------- -------------- -------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM SURPLUS
TRANSFERS........................ (50,249,195) 27,362,416 (4,638,255) 5,360,709 (1,911,305) (530,717)
-------------- -------------- -------------- -------------- -------------- --------------

TOTAL INCREASE (DECREASE)
IN NET ASSETS.................... 885,607,199 772,641,185 1,530,675 80,596,738 29,985,074 (23,479,928)

NET ASSETS:
Beginning of year................ 4,558,745,336 3,786,104,151 300,344,509 219,747,771 200,978,090 224,458,018
-------------- -------------- -------------- -------------- -------------- --------------
End of year...................... $5,444,352,535 $4,558,745,336 $ 301,875,184 $ 300,344,509 $ 230,963,164 $ 200,978,090
-------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- --------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A9 THROUGH A11.

A5
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

For the years ended December 31, 1995 and 1994
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
--------------------------------------------------------------

FLEXIBLE
EQUITY MANAGED
------------------------------ ------------------------------
1995 1994 1995 1994
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>

OPERATIONS:
Net investment income (loss)..... $ 9,097,566 $ 7,607,777 $ 13,835,396 $ 10,641,173
Capital gains distributions
received....................... 36,304,982 28,556,126 31,019,792 18,672,462
Realized gain (loss) on shares
redeemed
[average cost basis]........... 1,787,973 928,662 2,338,699 110,654
Net unrealized gain (loss) on
investments.................... 177,526,174 (28,001,165) 92,545,862 (57,317,849)
-------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM OPERATIONS........ 224,716,695 9,091,400 139,739,749 (27,893,560)
-------------- -------------- -------------- --------------

ACCUMULATION AND ANNUITY
UNIT TRANSACTIONS
Purchase payments and transfers
in............................. 288,749,556 303,883,305 87,022,392 209,097,153
Withdrawals and transfers out.... (169,137,106) (155,341,591) (121,137,946) (109,865,507)
Annuity benefit payments......... (13,346) (11,976) (6,854) (1,695)
-------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM ACCUMULATION
AND ANNUITY UNIT TRANSACTIONS.... 119,599,104 148,529,738 (34,122,408) 99,229,951
-------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM SURPLUS
TRANSFERS........................ (3,431,783) 2,313,971 (7,106,153) 2,142,366
-------------- -------------- -------------- --------------

TOTAL INCREASE (DECREASE)
IN NET ASSETS.................... 340,884,016 159,935,109 98,511,188 73,478,757

NET ASSETS:
Beginning of year................ 710,138,411 550,203,302 651,512,746 578,033,989
-------------- -------------- -------------- --------------
End of year...................... $1,051,022,427 $ 710,138,411 $ 750,023,934 $ 651,512,746
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------

HIGH
CONSERVATIVE YIELD
BALANCED BOND
------------------------------ ------------------------------
1995 1994 1995 1994
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)..... $ 37,219,068 $ 28,586,197 $ 16,644,510 $ 13,954,147
Capital gains distributions
received....................... 44,897,730 13,199,561 0 120
Realized gain (loss) on shares
redeemed
[average cost basis]........... 2,363,488 (404,868) (257,168) (98,699)
Net unrealized gain (loss) on
investments.................... 99,860,016 (66,969,793) 9,519,030 (20,478,513)
-------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM OPERATIONS........ 184,340,302 (25,588,903) 25,906,372 (6,622,945)
-------------- -------------- -------------- --------------
ACCUMULATION AND ANNUITY
UNIT TRANSACTIONS
Purchase payments and transfers
in............................. 145,643,727 432,095,316 122,765,949 131,806,320
Withdrawals and transfers out.... (222,721,330) (206,086,390) (114,608,028) (106,613,592)
Annuity benefit payments......... (8,066) (3,907) 0 0
-------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM ACCUMULATION
AND ANNUITY UNIT TRANSACTIONS.... (77,085,669) 226,005,019 8,157,921 25,192,728
-------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM SURPLUS
TRANSFERS........................ (12,105,790) 1,621,577 (1,062,663) (53,774)
-------------- -------------- -------------- --------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS.................... 95,148,843 202,037,693 33,001,630 18,516,009
NET ASSETS:
Beginning of year................ 1,228,415,021 1,026,377,328 159,076,471 140,560,462
-------------- -------------- -------------- --------------
End of year...................... $1,323,563,864 $1,228,415,021 $ 192,078,101 $ 159,076,471
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A9 THROUGH A11.

A6
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

For the years ended December 31, 1995 and 1994

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

STOCK EQUITY NATURAL
INDEX INCOME RESOURCES
------------------------------ ------------------------------ ------------------------------
1995 1994 1995 1994 1995 1994
-------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>

OPERATIONS:
Net investment income (loss)..... $ 2,599,471 $ 2,522,812 $ 15,296,166 $ 12,379,984 $ 76,590 $ (83,012)
Capital gains distributions
received....................... 2,163,961 306,826 26,532,315 27,001,472 4,657,784 1,610,550
Realized gain (loss) on shares
redeemed
[average cost basis]........... 1,244,308 1,565,117 921,914 246,513 661,765 22,685
Net unrealized gain (loss) on
investments.................... 67,650,481 (4,912,064) 62,603,120 (41,456,054) 15,537,556 (6,512,677)
-------------- -------------- -------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM OPERATIONS........ 73,658,221 (517,309) 105,353,515 (1,828,085) 20,933,695 (4,962,454)
-------------- -------------- -------------- -------------- -------------- --------------

ACCUMULATION AND ANNUITY
UNIT TRANSACTIONS
Purchase payments and transfers
in............................. 76,847,881 55,720,850 110,509,968 251,114,271 31,004,748 61,551,700
Withdrawals and transfers out.... (50,233,802) (58,321,184) (102,680,260) (100,023,343) (33,046,525) (23,266,443)
Annuity benefit payments......... 0 0 0 0 0 0
-------------- -------------- -------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM ACCUMULATION
AND ANNUITY UNIT TRANSACTIONS.... 26,614,079 (2,600,334) 7,829,708 151,090,928 (2,041,777) 38,285,257
-------------- -------------- -------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM SURPLUS
TRANSFERS........................ 867,445 (39,704) (3,066,591) (72,254) (921,930) 253,409
-------------- -------------- -------------- -------------- -------------- --------------

TOTAL INCREASE (DECREASE)
IN NET ASSETS.................... 101,139,745 (3,157,347) 110,116,632 149,190,589 17,969,988 33,576,212

NET ASSETS:
Beginning of year................ 204,026,082 207,183,429 520,172,723 370,982,134 84,646,509 51,070,297
-------------- -------------- -------------- -------------- -------------- --------------
End of year...................... $ 305,165,827 $ 204,026,082 $ 630,289,355 $ 520,172,723 $ 102,616,497 $ 84,646,509
-------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- --------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A9 THROUGH A11.

A7
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

For the years ended December 31, 1995 and 1994

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

SMALL
GOVERNMENT PRUDENTIAL CAPITALIZATION
GLOBAL INCOME JENNISON* STOCK*
------------------------------ ------------------------------ -------------- --------------
1995 1994 1995 1994 1995 1995
-------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>

OPERATIONS:
Net investment income (loss)..... $ 802,217 $ (1,596,724) $ 14,706,023 $ 16,202,784 $ (88,527) $ (21,294)
Capital gains distributions
received....................... 4,103,547 271,354 0 0 0 176,658
Realized gain (loss) on shares
redeemed
[average cost basis]........... 1,484,297 176,826 (1,549,875) (1,579,727) 67,696 22,088
Net unrealized gain (loss) on
investments.................... 21,601,985 (10,458,220) 33,262,626 (36,961,918) 945,643 746,554
-------------- -------------- -------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM OPERATIONS........ 27,992,046 (11,606,764) 46,418,774 (22,338,861) 924,812 924,006
-------------- -------------- -------------- -------------- -------------- --------------

ACCUMULATION AND ANNUITY
UNIT TRANSACTIONS
Purchase payments and transfers
in............................. 113,094,450 210,091,889 33,801,087 90,199,651 62,276,197 36,591,006
Withdrawals and transfers out.... (124,676,870) (81,643,439) (71,305,548) (119,121,956) (34,172,583) (17,675,799)
Annuity benefit payments......... 0 0 0 0 0 0
-------------- -------------- -------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM ACCUMULATION
AND ANNUITY UNIT TRANSACTIONS.... (11,582,420) 128,448,450 (37,504,461) (28,922,305) 28,103,614 18,915,207
-------------- -------------- -------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM SURPLUS
TRANSFERS........................ (7,087,547) 5,354,433 (14,155,348) 11,012,400 3,318,869 1,051,856
-------------- -------------- -------------- -------------- -------------- --------------

TOTAL INCREASE (DECREASE)
IN NET ASSETS.................... 9,322,079 122,196,119 (5,241,035) (40,248,766) 32,347,295 20,891,069

NET ASSETS:
Beginning of year................ 205,801,303 83,605,184 293,633,471 333,882,237 0 0
-------------- -------------- -------------- -------------- -------------- --------------
End of year...................... $ 215,123,382 $ 205,801,303 $ 288,392,436 $ 293,633,471 $ 32,347,295 $ 20,891,069
-------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- --------------
*Commenced
Business
on 5/1/95
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A9 THROUGH A11.

A8
<PAGE>

NOTES TO FINANCIAL STATEMENTS OF
THE PRUDENTIAL INDIVIDUAL VARIABLE CONTRACT ACCOUNT
FOR THE YEARS ENDED DECEMBER 31, 1995 AND DECEMBER 31, 1994

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 thirteen 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, 1995 were as
follows:
<TABLE>
<CAPTION>
PORTFOLIOS
----------------------------------------------------------------
PORTFOLIO MONEY DIVERSIFIED FLEXIBLE
INFORMATION MARKET BOND EQUITY MANAGED
- -------------------------- ---------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Number of shares: 30,187,518 20,405,528 40,991,754 41,999,808
Net asset value per share: $ 10.0000 $ 11.3131 $ 25.6399 $ 17.8593
Cost: $ 301,875,184 $ 222,916,890 $ 842,963,109 $ 671,343,851

PORTFOLIOS (CONTINUED)
----------------------------------------------------------------
HIGH
PORTFOLIO CONSERVATIVE YIELD STOCK EQUITY
INFORMATION BALANCED BOND INDEX INCOME
- -------------------------- ---------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Number of shares: 86,474,596 24,624,135 15,291,880 38,737,215
Net asset value per share: $ 15.3088 $ 7.8004 $ 19.9561 $ 16.2709
Cost: $ 1,253,721,968 $ 196,791,207 $ 216,899,586 $ 580,103,461
</TABLE>

<TABLE>
<CAPTION>
PORTFOLIOS (CONTINUED)
-------------------------------------------------------------------------------
SMALL
PORTFOLIO NATURAL GOVERNMENT PRUDENTIAL CAPITALIZATION
INFORMATION RESOURCES GLOBAL INCOME JENNISON STOCK
- -------------------------- ---------------- -------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Number of shares: 5,941,274 13,849,265 24,609,152 2,578,135 1,765,434
Net asset value per share: $ 17.2718 $ 15.5332 $ 11.7189 $ 12.5468 $ 11.8334
Cost: $ 89,078,071 $ 192,120,774 $ 277,661,918 $ 31,401,652 $20,144,515
</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.

A9
<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
-----------------------------------------------------------------------------------------
HIGH
MONEY DIVERSIFIED FLEXIBLE CONSERVATIVE YIELD
YEARS ENDED MARKET BOND EQUITY MANAGED BALANCED BOND
- -------------------- ------------- ------------- ------------ ------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
December 31, 1994... 256,018,424 19,801,000 81,852,673 72,504,920 160,880,292 79,370,956
December 31, 1995... 218,860,627 14,669,625 66,808,670 28,037,336 53,792,691 68,163,494
</TABLE>

<TABLE>
<CAPTION>
ACCUMULATION UNITS PURCHASED (CONTINUED)
--------------------------------------------------------------------------------------------------------
SMALL
STOCK EQUITY NATURAL GOVERNMENT PRUDENTIAL CAPITALIZATION
YEARS ENDED INDEX INCOME RESOURCES GLOBAL INCOME JENNISON STOCK
- -------------------- ------------- ------------- ------------ ------------- --------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
December 31, 1994... 31,597,341 117,804,422 33,138,799 149,424,174 59,657,506 - -
December 31, 1995... 34,877,051 46,761,643 17,302,848 83,835,424 22,144,196 51,205,991 32,360,465
</TABLE>

<TABLE>
<CAPTION>
ACCUMULATION UNITS WITHDRAWN
-----------------------------------------------------------------------------------------
HIGH
MONEY DIVERSIFIED FLEXIBLE CONSERVATIVE YIELD
YEARS ENDED MARKET BOND EQUITY MANAGED BALANCED BOND
- -------------------- ------------- ------------- ------------ ------------- --------------- -------------
<S> <C> <C> <C> <C> <C> <C>
December 31, 1994... 218,629,130 25,211,160 41,956,320 38,528,310 77,208,502 64,242,151
December 31, 1995... 222,646,766 16,991,087 39,122,149 39,950,683 82,130,315 63,634,004
</TABLE>

<TABLE>
<CAPTION>
ACCUMULATION UNITS PURCHASED (CONTINUED)
--------------------------------------------------------------------------------------------------------
SMALL
STOCK EQUITY NATURAL GOVERNMENT PRUDENTIAL CAPITALIZATION
YEARS ENDED INDEX INCOME RESOURCES GLOBAL INCOME JENNISON STOCK
- -------------------- ------------- ------------- ------------ ------------- --------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
December 31, 1994... 33,043,081 47,222,133 12,587,330 58,318,882 80,605,093 - -
December 31, 1995... 23,196,785 43,627,248 18,436,399 92,359,520 46,715,765 27,955,106 15,565,954
</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 (withdrawals) of The Prudential to the Account.

A10
<PAGE>

NOTE 7: ACCUMULATION AND ANNUITY UNIT INFORMATION

<TABLE>
<CAPTION>
ACCUMULATION UNIT VALUE
----------------------------------------------------------------------------
VALUE AT END OF YEAR
HIGH
MONEY DIVERSIFIED FLEXIBLE CONSERVATIVE YIELD
MARKET BOND EQUITY MANAGED BALANCED BOND
--------- ----------- ----------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Dec. 31, 1985................. $ 1.2102 $ 1.3325 $ 1.3716 $ 1.3131 $ 1.3284 $ --
Dec. 31, 1986................. 1.2739 1.5069 1.5598 1.4983 1.4985 --
Dec. 31, 1987................. 1.3409 1.4932 1.5668 1.4534 1.5034 0.9410
Dec. 31, 1988................. 1.4227 1.5964 1.8123 1.6205 1.6368 1.0523
Dec. 31, 1989................. 1.5358 1.7902 2.3233 1.9499 1.8923 1.0186
Dec. 31, 1990................. 1.6413 1.9159 2.1759 1.9634 1.9681 0.8872
Dec. 31, 1991................. 1.7218 2.2044 2.7093 2.4335 2.3157 1.2202
Dec. 31, 1992................. 1.7658 2.3345 3.0562 2.5874 2.4471 1.4171
Dec. 31, 1993 (*As Restated).. 1.7963 2.5407 3.6806 2.9552 2.7132 1.6701*
Dec. 31, 1994................. 1.8469 2.4295 3.7380 2.8277 2.6551 1.6054
Dec. 31, 1995................. 1.9313 2.8986 4.8497 3.4685 3.0769 1.8650
</TABLE>

<TABLE>
<CAPTION>
ACCUMULATION UNIT VALUE (CONTINUED)
-------------------------------------------------------------------------------------------
VALUE AT END OF YEAR
SMALL
STOCK EQUITY NATURAL GOVERNMENT PRUDENTIAL CAPITALIZATION
INDEX INCOME RESOURCES GLOBAL INCOME JENNISON STOCK
--------- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Dec. 31, 1985................. $ -- $ -- $ -- $ -- $ -- $ -- $ --
Dec. 31, 1986................. -- -- -- -- -- -- --
Dec. 31, 1987................. 0.8594 -- -- -- -- -- --
Dec. 31, 1988................. 0.9803 1.0987 1.0379 -- -- -- --
Dec. 31, 1989................. 1.2683 1.3318 1.3911 1.1145 1.1079 -- --
Dec. 31, 1990................. 1.2077 1.2669 1.2954 0.9590 1.1639 -- --
Dec. 31, 1991................. 1.5480 1.5962 1.4118 1.0556 1.3354 -- --
Dec. 31, 1992................. 1.6386 1.7369 1.4969 1.0073 1.3966 -- --
Dec. 31, 1993................. 1.7757 2.0989 1.8513 1.4248 1.5534 -- --
Dec. 31, 1994................. 1.7723 2.1038 1.7507 1.3391 1.4556 -- --
Dec. 31, 1995................. 2.4005 2.5301 2.1957 1.5334 1.7185 1.2451 1.1897
</TABLE>

<TABLE>
<CAPTION>
ANNUITY UNIT VALUE USING A 3 1/2% ASSUMED INVESTMENT RESULT
----------------------------------------------------------------------------
VALUE AT END OF YEAR
HIGH
MONEY DIVERSIFIED FLEXIBLE CONSERVATIVE YIELD
MARKET BOND EQUITY MANAGED BALANCED BOND
--------- ----------- ----------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Dec. 31, 1985................. $ 1.1073 $ 1.2199 $ 1.2552 $ 1.2007 $ 1.2154 $ --
Dec. 31, 1986................. 1.1263 1.3330 1.3792 1.3238 1.3248 --
Dec. 31, 1987................. 1.1454 1.2763 1.3386 1.2408 1.2842 0.9130
Dec. 31, 1988................. 1.1741 1.3183 1.4960 1.3366 1.3510 0.9864
Dec. 31, 1989................. 1.2248 1.4285 1.8531 1.5541 1.5091 0.9225
Dec. 31, 1990................. 1.2643 1.4767 1.6754 1.5116 1.5161 0.7761
Dec. 31, 1991................. 1.2813 1.6417 2.0157 1.8102 1.7235 1.0312
Dec. 31, 1992................. 1.2692 1.6793 2.1964 1.8591 1.7593 1.1567
Dec. 31, 1993 (*As Restated).. 1.2477 1.7661 2.5559 2.0517 1.8847 1.3172*
Dec. 31, 1994................. 1.2393 1.6317 2.5079 1.8968 1.7820 1.2233
Dec. 31, 1995................. 1.2519 1.8810 3.1440 2.2483 1.9954 1.3733
</TABLE>

<TABLE>
<CAPTION>
ANNUITY UNIT VALUE USING A 3 1/2% ASSUMED INVESTMENT RESULT
-------------------------------------------------------------------------------------------
VALUE AT END OF YEAR
SMALL
STOCK EQUITY NATURAL GOVERNMENT PRUDENTIAL CAPITALIZATION
INDEX INCOME RESOURCES GLOBAL INCOME JENNISON STOCK
--------- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Dec. 31, 1985................. $ -- $ -- $ -- $ -- $ -- $ -- $ --
Dec. 31, 1986................. -- -- -- -- -- -- --
Dec. 31, 1987................. 0.8532 -- -- -- -- -- --
Dec. 31, 1988................. 0.9404 1.0664 1.0141 -- -- -- --
Dec. 31, 1989................. 1.1757 1.2490 1.3135 1.0735 1.0826 -- --
Dec. 31, 1990................. 1.0812 1.1476 1.1813 0.8923 1.0987 -- --
Dec. 31, 1991................. 1.3391 1.3970 1.2440 0.9488 1.2179 -- --
Dec. 31, 1992................. 1.3693 1.4684 1.2739 0.8746 1.2302 -- --
Dec. 31, 1993................. 1.4338 1.7036 1.5300 1.1953 1.3222 -- --
Dec. 31, 1994................. 1.3828 1.6499 1.3980 1.0855 1.1971 -- --
Dec. 31, 1995................. 1.8097 1.9174 1.6941 1.2010 1.3657 1.2159 1.1619
</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.

A11
<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, Diversified Bond, Equity,
Flexible Managed, Conservative Balanced, High Yield Bond, Stock Index, Equity
Income, Natural Resources, Global, Government Income, Prudential Jennison, and
Small Capitalization Stock subaccounts) as of December 31, 1995, 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, 1995. 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, 1995, the results of their operations, and the changes in their net assets
for the respective stated periods in conformity with generally accepted
accounting principles.

Deloitte & Touche LLP
Parsippany, New Jersey
February 15, 1996

A12

<PAGE>

CONSOLIDATED FINANCIAL STATEMENTS OF
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

CONSOLIDATED STATEMENTS
OF FINANCIAL POSITION

December 31,
1995 1994
-------- --------
(In Millions)

ASSETS
Fixed maturities .............................. $ 85,585 $ 78,620
Equity securities ............................. 1,937 2,327
Mortgage loans ................................ 23,680 26,199
Investment real estate ........................ 1,568 1,600
Policy loans .................................. 6,800 6,631
Other invested assets ......................... 4,019 5,147
Short-term investments ........................ 7,874 10,630
Securities purchased under
agreements to resell ......................... 5,130 5,591
Trading account securities .................... 3,658 6,341
Cash .......................................... 1,633 1,109
Accrued investment income ..................... 1,915 1,932
Premiums due and deferred ..................... 2,402 2,712
Broker-dealer receivables ..................... 8,136 8,164
Other assets .................................. 6,608 6,266
Assets held in Separate Accounts .............. 58,435 48,633
-------- --------
TOTAL ASSETS ................................... $219,380 $211,902
======== ========
LIABILITIES, AVR AND SURPLUS
Liabilities:
Policy liabilities and insurance reserves:
Future policy benefits and claims ............ $ 94,973 $ 98,354
Unearned premiums ............................ 836 1,144
Other policy claims and
benefits payable ............................ 1,932 1,848
Policy dividends ............................. 1,894 1,822
Policyholder account balances ................ 12,540 12,195
Securities sold under agreements
to repurchase ................................ 7,993 8,919
Notes payable and other borrowings ............ 9,157 12,009
Broker-dealer payables ........................ 6,083 6,198
Other liabilities ............................. 14,976 11,983
Liabilities related to Separate Accounts ...... 57,586 47,946
-------- --------
Total Liabilities .............................. 207,970 202,418
-------- --------
Asset Valuation Reserve (AVR) .................. 2,742 2,035
-------- --------
Surplus:
Capital Notes ................................. 984 298
Special surplus fund .......................... 1,274 1,097
Unassigned surplus ............................ 6,410 6,054
-------- --------
Total Surplus .................................. 8,668 7,449
-------- --------
TOTAL LIABILITIES, AVR
AND SURPLUS ................................... $219,380 $211,902
======== ========

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

Years Ended December 31,
1995 1994 1993
------- ------- -------
(In Millions)

REVENUE
Premiums and annuity
considerations ........................... $27,413 $29,698 $29,982
Net investment income ..................... 9,844 9,595 10,090
Broker-dealer revenue ..................... 3,800 3,677 4,025
Realized investment
gains/(losses) ........................... 882 (450) 953
Other income .............................. 972 1,037 924
------- ------- -------
Total Revenue .............................. 42,911 43,557 45,974
------- ------- -------
BENEFITS AND EXPENSES
Current and future benefits
and claims ............................... 27,854 30,788 30,573
Insurance and underwriting
expenses ................................. 4,577 4,830 4,982
Limited partnership matters ............... 0 1,422 390
General, administrative and
other expenses ........................... 6,034 5,794 5,575
------- ------- -------
Total Benefits and Expenses ................ 38,465 42,834 41,520
------- ------- -------
Income from operations
before dividends
and income taxes .......................... 4,446 723 4,454
Dividends to policyholders ................. 2,519 2,290 2,339
------- ------- -------
Income/(loss) before
income taxes .............................. 1,927 (1,567) 2,115
Income tax provision/(benefit) ............. 1,348 (392) 1,236
------- ------- -------
NET INCOME/(LOSS) .......................... 579 (1,175) 879
Surplus, beginning of year ................. 7,449 8,004 7,365
Issuance of Capital Notes
(after net charge-off of
non-admitted prepaid
postretirement benefit
cost of $113 in 1993) ..................... 686 0 185
Net unrealized investment
gains/(losses) and change
in AVR .................................... (46) 620 (425)
------- ------- -------
SURPLUS, END OF YEAR ....................... 8,668 7,449 8,004
------- ------- -------
AVR, beginning of year ..................... 2,035 2,687 2,457
Increase/(decrease) in AVR ................. 707 (652) 230
------- ------- -------
AVR, END OF YEAR ........................... 2,742 2,035 2,687
------- ------- -------
TOTAL SURPLUS AND AVR ...................... $11,410 $ 9,484 $10,691
======= ======= =======

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

F-1

<PAGE>

CONSOLIDATED FINANCIAL STATEMENTS OF
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years Ended December 31,
1995 1994 1993
-------- -------- --------
(In Millions)
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net income/(loss) ..................... $ 579 $(1,175) $ 879
Adjustments to reconcile net
income/(loss) to cash flows from
operating activities:
(Decrease)/increase in policy
liabilities and insurance
reserves ........................... (1,691) 1,289 2,747
Net increase in Separate
Accounts ........................... (162) (52) (59)
Realized investment
(gains)/losses ..................... (882) 450 (953)
Depreciation, amortization and
other non-cash items ............... 217 379 261
Gain on sale and results of
operations from reinsurance
segment ............................ (72) 0 0
Decrease/(increase) in
operating assets:
Mortgage loans ...................... (305) (226) (226)
Policy loans ........................ (169) (175) (174)
Securities purchased
under agreements to
resell ............................. 139 2,979 (2,049)
Trading account
securities ......................... 2,707 2,324 (2,087)
Broker-dealer
receivables ....................... 28 969 (1,803)
Other assets ........................ 205 3,254 (2,172)
(Decrease)/increase in
operating liabilities:
Securities sold under
agreements to repurchase ........... (475) (3,247) 1,134
Broker-dealer payables .............. (115) 788 1,280
Other liabilities ................... 501 (3,170) 1,794
-------- -------- --------
Cash Flows from Operating
Activities ........................... 505 4,387 (1,428)
-------- -------- --------
CASH FLOWS FROM
INVESTING ACTIVITIES:
Proceeds from the sale/maturity of:
Fixed maturities ..................... 100,317 90,914 100,023
Equity securities .................... 2,302 1,426 1,725
Mortgage loans ....................... 5,567 4,154 4,789
Investment real estate ............... 291 407 336
Other invested assets ................ 1,943 1,022 1,352
Property and equipment ............... 3 637 6
Sale of reinsurance segment .......... 790 0 0
Payments for the purchase of:
Fixed maturities ..................... (107,192) (91,032) (101,217)
Equity securities .................... (1,450) (1,535) (1,085)
Mortgage loans ....................... (3,002) (3,446) (3,530)
Investment real estate ............... (387) (161) (196)
Other invested assets ................ (515) (1,687) (531)
Property and equipment ............... (238) (392) (640)
Short-term investments (net) .......... 2,756 (4,281) (2,150)
Net change in cash placed as
collateral for securities loaned ..... 1,379 2,011 (589)
-------- -------- --------
Cash Flows from Investing
Activities ........................... $ 2,564 $ (1,963) $ (1,707)
-------- -------- --------
CASH FLOWS FROM
FINANCING ACTIVITIES:
Net (payments)/proceeds of
short-term debt ...................... $ (2,489) $ (1,115) $ 1,106
Proceeds from the issuance of
long-term debt ....................... 763 345 1,228
Payments for the settlement of
long-term debt ....................... (1,376) (760) (721)
Proceeds/(payments) from
unmatched securities purchased
under agreements to resell ........... 322 1,086 (47)
(Payments)/proceeds for
unmatched securities sold under
agreements to repurchase ............. (451) (2,537) 1,707
Proceeds from the issuance of
Capital Notes ........................ 686 0 298
-------- -------- --------
Cash Flows from
Financing Activities ................. (2,545) (2,981) 3,571
-------- -------- --------
Net increase/(decrease)
in cash .............................. 524 (557) 436
Cash, beginning of year ............... 1,109 1,666 1,230
-------- -------- --------
CASH, END OF YEAR ..................... $ 1,633 $ 1,109 $ 1,666
======== ======== ========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Income tax payments, net of refunds, made during 1995, 1994 and 1993 were $430
million, $64 million and $933 million, respectively. Interest payments made
during 1995, 1994 and 1993 were $1,413 million, $1,429 million and $1,171
million, respectively.

The 1995 amounts are presented net of the cash flow activities of the
reinsurance segment.

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

F-2
<PAGE>

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

For The Years Ended December 31, 1995, 1994 and 1993

1. ACCOUNTING POLICIES AND PRINCIPLES

A. PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of
The Prudential Insurance Company of America ("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 care insurance, property and casualty insurance,
securities brokerage, asset management, investment advisory services, 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 the National Association of
Insurance Commissioners ("NAIC") and their respective domiciliary state
insurance departments. Prescribed statutory accounting practices include
publications of the NAIC, state laws, regulations and general
administrative rules. Permitted statutory accounting practices encompass
all accounting practices not so prescribed.

The Company, with permission from the New Jersey Department of Insurance
("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.

Certain reclassifications have been made to the 1994 and 1993 financial
statements to conform to the 1995 presentation.

Management has used estimates and assumptions in the preparation of the
financial statements that affect the reported amounts of assets,
liabilities, revenue and expenses. Actual results could differ from those
estimates.

Life and General Insurance Operations--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. Expenses incurred in
connection with acquiring new insurance business, including such
acquisition costs as sales commissions, are charged to operations as
incurred.

Broker-Dealer Operations--The Company is engaged in the securities industry
in the United States, with operations in various foreign countries. Client
transactions are recorded on a settlement date basis. Securities and
commodities commission revenues and related expenses are accrued for client
transactions on a trade date basis. Investment banking revenue includes
advisory fees, selling concessions, management and underwriting fees, and
is recorded, net of related expenses, when the services are substantially
completed. Asset management and portfolio service fees are fees earned on
total assets under management and mutual funds sponsored by the Company and
third parties. Certain costs that are directly related to the sales of
mutual funds are deferred.

C. 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
fair value.

Mortgage loans are stated primarily at unpaid principal balances. Mortgage
loans for non-life subsidiaries are recorded net of valuation reserves.

Investment real estate, except for real estate acquired in satisfaction of
debt, is carried at cost less accumulated straight-line depreciation,
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.

Policy loans are stated at unpaid principal balances.

Other invested assets primarily represent the Company's investment in joint
ventures and other forms of partnerships. These investments are carried
primarily on the equity method where the Company has the ability to
exercise significant influence over the operating and financial policies of
the entity.

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

F-3

<PAGE>

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

FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

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, to value the
securities daily, and to require adjustment of the underlying collateral
when deemed necessary.

Trading account securities from broker-dealer operations are reported based
upon quoted market prices.

Securities lending is a program whereby securities are loaned to third
parties, primarily major brokerage firms. As of December 31, 1995 and 1994,
the estimated fair values of loaned securities were $7,982 million and
$8,506 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. The
offsetting collateral liability as of December 31, 1995 and 1994 is $5,690
million and $4,252 million, respectively. Non-cash collateral is recorded
in memorandum records and is not reflected in the consolidated financial
statements.

Derivative financial instruments--For the Company's non-insurance
subsidiaries, derivatives used for trading purposes are recorded at fair
value as of the reporting date. Realized and unrealized changes in fair
values are recognized in "Broker-dealer revenue" and "Other income" 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 asset/liability risk management activities, which
support life and health insurance and annuity contracts, are recorded at
fair value with unrealized gains and losses recorded in "Net unrealized
investment gains/(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 Interest
Maintenance Reserve (IMR).

D. SEPARATE ACCOUNTS

These assets and liabilities, reported at estimated market value, represent
segregated funds invested for pension and other clients. 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.

E. CAPITAL NOTES

Interest payments on the 1993 Capital Notes are preapproved by the
Department. This practice differs from that prescribed by the NAIC. The
NAIC practices provide for Insurance Commissioner approval of every
interest payment before the payment is made. The interest payments on the
Capital Notes issued in 1995 comply with prescribed NAIC practices.
Prudential has included all notes as a component of surplus (Note 7).

F. FUTURE APPLICATION OF ACCOUNTING STANDARDS

The Financial Accounting Standards Board (the "FASB") issued 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 not allowing 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. The Company is assessing the impact of Interpretation No. 40 on
its consolidated financial statements. Such effort has not been completed
and management currently believes surplus will increase significantly.

F-4

<PAGE>

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

FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

2. FUTURE POLICY BENEFITS, RESERVE FOR LOSSES AND LOSS EXPENSES

A. For life insurance, general insurance and annuities, unpaid claims and
claim adjustment expenses include estimates of benefits and associated
settlement expenses on reported claims and those which are incurred but not
reported.

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

1995 1994 1993
--------------------- --------------------- -----------------------
Accident Property Accident Property Accident Property
and and and and and and
Health Casualty Health Casualty Health Casualty
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
(In Millions)

Balance at January 1 ........................ $2,738 $5,116 $2,654 $4,869 $2,623 $4,712
Less reinsurance recoverables .............. 23 1,018 15 1,070 22 1,107
------ ------ ------ ------ ------ ------
Net balance at January 1 .................... 2,715 4,098 2,639 3,799 2,601 3,605
------ ------ ------ ------ ------ ------
Incurred related to:
Current year ............................... 8,062 2,387 7,398 2,541 7,146 2,364
Prior years ................................ (48) 95 (105) 158 (167) 109
------ ------ ------ ------ ------ ------
Total incurred .............................. 8,014 2,482 7,293 2,699 6,979 2,473
------ ------ ------ ------ ------ ------
Paid related to:
Current year ............................... 5,972 1,010 5,568 1,237 5,336 1,119
Prior years ................................ 1,807 959 1,649 1,163 1,605 1,160
------ ------ ------ ------ ------ ------
Total paid .................................. 7,779 1,969 7,217 2,400 6,941 2,279
------ ------ ------ ------ ------ ------
Less reinsurance
segment (Note 10) .......................... 0 2,326 0 0 0 0
------ ------ ------ ------ ------ ------
Net balance at December 31 .................. 2,950 2,285 2,715 4,098 2,639 3,799
Plus reinsurance recoverables .............. 15 819 23 1,018 15 1,070
------ ------ ------ ------ ------ ------
Balance at December 31 ...................... $2,965 $3,104 $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 $48 million, $105 million and $167 million in the provision for
claims and claim adjustment expenses for accident and health business in
1995, 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 $88 million, $47
million and $120 million in 1995, 1994 and 1993, respectively) increased by
$95 million, $158 million and $109 million in 1995, 1994 and 1993,
respectively, due to increased loss development and reserve strengthening
for asbestos and environmental claims.

B. 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 the net
level premium reserve or the policy cash value. About 54% of individual
life insurance reserves are calculated according to the Commissioner's
Reserve Valuation Method ("CRVM"), or methods which compare CRVM to policy
cash values. The remaining reserves include universal life reserves which
are equal to the greater of the policyholder account value less the
unamortized expense allowance and the policy cash value, or are for
supplementary benefits whose reserves are calculated using methods,
interest rates and tables appropriate for the benefit provided.

For group life insurance, about 56% of the reserves are associated with
extended death benefits. These reserves are primarily calculated using
modified group tables at various interest rates. The remainder 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 deferred individual annuity contracts are determined using the
Commissioner's Annuity Reserve Valuation Method. These account for 72% of
the individual annuity reserves. The remaining reserves are equal to the
present value of future payments with the annuity mortality table and
interest rates based on the date of issue or maturity as appropriate.

Reserves for other deposit funds or other liabilities with life
contingencies reflect the contract deposit account or experience
accumulation for the contract and any purchased annuity reserves. For money
purchase annuities issued in Canada, the reserve equals the present value
of each deposit accumulated to the end of its guarantee period at its
guaranteed interest rate, discounted at the valuation interest rate.

F-5

<PAGE>

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

FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

Accident and health reserves represent the present value of the future
potential payments, discounted for contingencies and interest. The
remaining material reserves for active life reserves and unearned premiums
are valued using the preliminary term method, gross premium valuation
method, or a pro-rata portion of gross premiums. Reserves are also held for
amounts not yet due on hospital benefits and other coverages.

The reserve for guaranteed interest contracts, deposit funds and other
liabilities without life contingencies equal either the present value of
future payments discounted at the guaranteed rate or the fund value.

3. INCOME TAXES

Under the Internal Revenue Code ("the Code"), 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.

Prudential files a consolidated federal income tax return with all of its
domestic 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. The provision reported in the consolidated financial
statements also includes tax liabilities for foreign subsidiaries.

The non-insurance subsidiaries of the Company recognize deferred tax assets
and liabilities for the expected future tax consequences of events that have
been recognized in their financial statements. Included in "Income tax
provision/(benefit)" are deferred taxes of $109 million, $(477) million and
$21 million for the years ended December 31, 1995, 1994 and 1993,
respectively.

At December 31, 1995, the Company had consolidated non-life tax loss
carryforwards of $595 million which will expire between 1998 and 2010, if not
utilized.

4. INVESTED ASSETS

A. FIXED MATURITIES

The Company invests in both investment grade and non-investment grade
public and private fixed maturities. The Securities Valuation Office of the
NAIC rates the fixed maturities held by insurers 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 primarily high-yield securities and are defined by the NAIC as
including any security with a public agency rating equivalent to B+ or B1
or less. These securities approximate 0.9% and 1.6% of the Company's
consolidated assets at December 31, 1995 and 1994, respectively.

The carrying value and estimated fair value of fixed maturities at December
31, 1995 and 1994, are as follows:

1995
-------------------------------------------------
Gross Gross Estimated
Carrying Unrealized Unrealized Fair
Value Gains Losses Value
-------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
(In Millions)
U.S. Treasury securities and obligations of
U.S. government corporations and
agencies ..................................................... $16,494 $1,409 $ 1 $17,902
Obligations of U.S. states and their
political subdivisions ....................................... 1,365 70 2 1,433
Fixed maturities issued by foreign governments
and their agencies and political subdivisions ................ 3,641 275 4 3,912
Corporate securities .......................................... 58,998 4,792 108 63,682
Mortgage-backed securities .................................... 5,048 276 10 5,314
Other fixed maturities ........................................ 39 0 0 39
------- ------ ---- -------
Total ......................................................... $85,585 $6,822 $125 $92,282
======= ====== ==== =======
</TABLE>

F-6

<PAGE>

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

FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

1994
------------------------------------------------
Gross Gross Estimated
Carrying Unrealized Unrealized Fair
Value Gains Losses Value
-------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
(In Millions)

U.S. Treasury securities and obligations of
U.S. government corporations and agencies .................. $13,576 $ 122 $ 646 $13,052
Obligations of U.S. states and their
political subdivisions ..................................... 2,776 32 165 2,643
Fixed maturities issued by foreign governments
and their agencies and political subdivisions .............. 3,093 37 153 2,977
Corporate securities ........................................ 54,076 1,191 1,772 53,495
Mortgage-backed securities .................................. 4,889 82 148 4,823
Other fixed maturities ...................................... 210 0 0 210
------- ------ ------ -------
Total ....................................................... $78,620 $1,464 $2,884 $77,200
======= ====== ====== ========
</TABLE>

The carrying value and estimated fair value of fixed maturities at December
31, 1995, categorized by contractual maturity, are shown below. Actual
maturities may differ from contractual maturities because borrowers may
prepay obligations with or without call or prepayment penalties.

Estimated
Carrying Fair
Value Value
-------- ---------
(In Millions)

Due in one year or less .................... $ 398 $ 402
Due after one year through five years ...... 26,936 27,748
Due after five years through ten years ..... 23,124 24,637
Due after ten years ........................ 30,079 34,181
------- -------
80,537 86,968
Mortgage-backed securities ................. 5,048 5,314
------- -------
Total ...................................... $85,585 $92,282
======= =======

Proceeds from the sale and maturity of fixed maturities during 1995, 1994
and 1993 were $100,317 million, $90,914 million and $100,023 million,
respectively. Gross gains of $2,083 million, $693 million and $2,473
million and gross losses of $943 million, $2,009 million and $698 million
were realized on such sales during 1995, 1994 and 1993, respectively.

B. MORTGAGE LOANS

Mortgage loans at December 31, 1995 and 1994, are as follows:

1995 1994
-------------------- --------------------
Amount Percent Amount Percent
------ ------- ------ -------
<S> <C> <C> <C> <C>
(In Millions)
Commercial and agricultural loans:
In good standing ...................................... $17,792 75.1% $19,752 75.4%
In good standing
with restructured terms .............................. 976 4.1% 1,412 5.4%
Past due 90 days or more .............................. 145 0.6% 339 1.3%
In process of foreclosure ............................. 158 0.7% 387 1.5%
Residential loans ...................................... 4,609 19.5% 4,309 16.4%
------- ----- ------- -----
Total mortgage loans ................................... $23,680 100.0% $26,199 100.0%
======= ===== ======= =====

</TABLE>

At December 31, 1995, the Company's mortgage loans were collateralized by
the following property types: office buildings (29%), retail stores (20%),
residential properties (19%), apartment complexes (13%), industrial
buildings (10%), agricultural properties (7%) and other commercial
properties (2%). The mortgage loans are geographically dispersed throughout
the United States and Canada with the largest concentrations in California
(23%) and New York (9%). Included in these balances

F-7

<PAGE>

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

FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

are mortgage loans with affiliated joint ventures of $653 million and $684
million at December 31, 1995 and 1994, respectively.

C. INVESTMENT REAL ESTATE

Accumulated depreciation on investment real estate was $643 million and
$748 million at December 31, 1995 and 1994, respectively.

D. OTHER INVESTED ASSETS

The Company's net equity in joint ventures and other forms of partnerships
amounted to $2,612 million and $3,357 million as of December 31, 1995 and
1994, respectively. The Company's share of net income from such entities
was $326 million, $354 million and $375 million for 1995, 1994 and 1993,
respectively.

E. NET UNREALIZED INVESTMENT GAINS/(LOSSES)

Net unrealized investment gains/(losses), which result principally from
changes in the carrying values of invested assets, were $661 million, $(32)
million and $(195) million for the years ended December 31, 1995, 1994 and
1993, respectively.

F. ASSET VALUATION RESERVE AND INTEREST MAINTENANCE RESERVE

These reserves are required for life insurance companies under NAIC
regulations. 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. The IMR captures net realized capital gains and losses
resulting from changes in the general level of interest rates. These gains
and losses are amortized into investment income over the expected remaining
life of the investments sold. At December 31, 1995, the components of AVR
are 67% for fixed maturities, equity securities and short-term investments;
21% for mortgage loans; and 12% for investment real estate and other
invested assets. The IMR balance at December 31, 1995 and 1994 was $1,191
million and $502 million, respectively. During 1995, 1994 and 1993, $775
million, $(929) million and $1,082 million of net realized investment
gains/(losses) were deferred, respectively.

G. RESTRICTED ASSETS AND SPECIAL DEPOSITS

Assets in the amounts of $6,271 million and $5,901 million at December 31,
1995 and 1994, respectively, were on deposit with governmental authorities
or trustees as required by law. Assets valued at $3,558 million and $5,855
million at December 31, 1995 and 1994, respectively, were maintained as
compensating balances or pledged as collateral for bank loans and other
financing agreements. Restricted cash and securities of $1,137 million and
$897 million at December 31, 1995 and 1994, respectively, were included in
the consolidated financial statements. The restricted cash represents funds
deposited by clients and funds accruing to clients as a result of trades or
contracts.

5. EMPLOYEE BENEFIT PLANS

A. PENSION PLANS

The Company has several defined benefit pension plans, which cover
substantially all of its employees. Benefits are generally based on career
average earnings and credited length of service. The Company's funding
policy for U.S. plans is to contribute annually the amount necessary to
satisfy the Internal Revenue Service contribution guidelines.

Employee pension benefit plan status is as follows:

September 30, 1995 September 30, 1994
------------------------ ------------------------
Assets Accumulated Assets Accumulated
Exceed Benefits Exceed Benefits
Accumulated Exceed Accumulated Exceed
Benefits Assets Benefits Assets
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
(In Millions)
Actuarial present value of benefit obligation:
Vested benefit obligation ..................................... $(3,270) $(236) $(2,749) $(207)
======= ===== ====== =====
Accumulated benefit obligation ................................ (3,572) (261) (3,025) (230)
======= ===== ====== =====
Projected benefit obligation ................................... (4,330) (297) (3,975) (272)
Plan assets at fair value ...................................... 6,688 206 5,524 180
------- ----- ------ -----
Plan assets in excess of projected benefit obligation .......... 2,358 (91) 1,549 (92)
Unrecognized transition amount ................................. (904) (4) (976) (4)
Unrecognized prior service cost ................................ 199 16 211 17
Unrecognized net (gain)/loss ................................... (753) 15 (18) 27
Additional minimum liability ................................... 0 (8) 0 (8)
------- ----- ------ -----
Prepaid/(accrued) pension cost ................................. $ 900 $ (72) $ 766 $ (60)
======= ===== ====== =====
</TABLE>

F-8

<PAGE>

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

FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

Plan assets consist primarily of equity securities, bonds, real estate and
short-term investments, of which $4,974 million and $4,325 million are
included in Separate Account assets and liabilities at December 31, 1995
and 1994, respectively.

In compliance with statutory accounting principles, Prudential's prepaid
pension costs of $900 million and $766 million at December 31, 1995 and
1994, respectively, are considered non-admitted assets. These assets are
excluded from the consolidated assets and the changes in these non-admitted
assets were $134 million, $(19) million, and $142 million in 1995, 1994 and
1993, respectively.

The components of the net periodic pension (benefit)/expense for 1995, 1994
and 1993 are as follows:

1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
(In Millions)

Service cost--benefits earned during the year ............................. $ 133 $ 163 $ 133
Interest cost on projected benefit obligation ............................. 392 311 301
Actual return on assets ................................................... (1,288) 56 (854)
Net amortization and deferral ............................................. 629 (639) 301
Net curtailment gains and special termination benefits .................... 0 156 0
------- ----- -----
Net periodic pension (benefit)/expense .................................... $ (134) $ 47 $(119)
======= ===== =====

</TABLE>

The net reduction to surplus relating to the Company's pension plans is $0,
$28 million and $23 million in 1995, 1994 and 1993, respectively, which
considers the changes in Prudential's non-admitted prepaid pension asset of
$134 million, $(19) million and $142 million, respectively. The accounting
assumptions used by Prudential were:

As of September 30,
--------------------
1995 1994 1993
---- ---- ----
Discount rate ................................. 7.5% 8.5% 7.0%
Rate of increase in compensation levels ....... 4.5% 5.5% 5.0%
Expected long-term rate of return on assest ... 9.0% 9.0% 9.0%

The 1995 pension benefit for the Company's non-U.S. plans is $8 million.

B. POSTRETIREMENT 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.

Postretirement benefits, with respect to Prudential, are recognized in
accordance with prescribed NAIC policy. Prudential has elected to amortize
its transition obligation over 20 years. The Company's funding of its
postretirement benefit obligations totaled $48 million, $31 million and
$404 million in 1995, 1994 and 1993, respectively.

F-9

<PAGE>

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

For The Years Ended December 31, 1995, 1994 and 1993

The postretirement benefit plan status is as follows:

September 30,
------------------
1995 1994
-------- -------
(In Millions)
Accumulated postretirement benefit obligation (APBO):
Retirees ............................................... $(1,526) $(1,337)
Fully eligible active plan participants ................ (152) (188)
------- -------
Total APBO ............................................... (1,678) (1,525)
------- -------
Plan assets at fair value ................................ 1,309 1,232
------- -------
Funded status ............................................ (369) (293)
Unrecognized transition amount ........................... 423 448
Unrecognized net loss/(gain) ............................. 1 (41)
------- -------
Prepaid postretirement benefit cost ...................... $ 55 $ 114
======= =======

Plan assets consist of group and individual variable life insurance
policies, group life and health contracts and short-term investments, of
which $990 million and $996 million are included in the Consolidated
Statement of Financial Position at December 31, 1995 and 1994,
respectively. In compliance with statutory accounting principles,
Prudential's prepaid postretirement benefit costs of $99 million and $127
million at December 31, 1995 and 1994, respectively, are considered
non-admitted assets. These assets are excluded from the consolidated assets
and the changes in these non-admitted assets of $(28) million, $(90)
million and $217 million in 1995, 1994 and 1993, respectively, are reported
in "General, administrative and other expenses" in 1995 and 1994, and in
"Issuance of Capital Notes" in 1993.

Net periodic postretirement benefit cost for 1995, 1994 and 1993 includes
the following components:

1995 1994 1993
----- ----- -----
<S> <C> <C> <C>
(In Millions)

Service cost .................................................. $ 56 $ 38 $ 41
Interest cost ................................................. 123 112 124
Actual return on plan assets .................................. (144) (98) (86)
Amortization of transition obligation ......................... 25 23 39
Other ......................................................... 47 (3) 77
Net curtailment and special termination benefits .............. 0 58 0
----- ---- ----
Net periodic postretirement benefit cost ...................... $ 107 $130 $195
===== ==== ====

</TABLE>

The net reduction to surplus relating to the Company's postretirement
benefit plans is $79 million, $40 million, and $412 million in 1995, 1994
and 1993, respectively, which considers the changes in the non-admitted
prepaid postretirement benefit cost of $(28) million, $(90) million and
$217 million in 1995, 1994 and 1993, respectively.

The accounting assumptions used by Prudential were:

As of September 30,
------------------------------------------
1995 1994 1993
--------- -------- -------
<S> <C> <C> <C>
Discount rate ............................................... 7.5% 8.5% 7.0%
Expected long-term rate of return on plan assets ............ 8.0% 9.0% 9.0%
Rate of increase in compensation levels ..................... 4.5% 5.5% 5.0%
Health care cost trend rates ................................ 8.9-13.3% 9.1-13.9% 9.5-14.7%
Ultimate health care cost trend rate at 2006 ................ 5.0% 6.0% 5.0%

</TABLE>

The effect of a 1% increase in health care cost trend rates on the
September 30, 1995, accumulated postretirement benefit obligation and
service and interest costs would be $138 million and $16 million,
respectively.

C. POSTEMPLOYMENT BENEFITS

The Company accrues for postemployment benefits primarily for life and
health benefits provided to former or inactive employees who are not
retirees. The net accumulated liability for these benefits at December 31,
1995 and 1994 was $102 million and $151 million, respectively. The Company
funded $45 million of postemployment benefits during 1995.

F-10

<PAGE>

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

For The Years Ended December 31, 1995, 1994 and 1993

6. NOTES PAYABLE AND OTHER BORROWINGS

Notes payable and other borrowings consisted of the following:

December 31, 1995 December 31, 1994
------------------------- -------------------------
Weighted Weighted
Average Average
Balance Cost of Funds Balance Cost of Funds
-------- ------------- ------- -------------
<S> <C> <C> <C> <C>
(In Millions)
Short-term debt:
Commercial paper ........................... $3,711 5.8% $ 4,108 5.6%
Medium-term notes payable .................. 9 7.4% 204 4.8%
Other ...................................... 2,007 6.4% 4,876 5.8%
------ -------
Total Short Term ............................ 5,727 6.0% 9,188 5.7%
------ -------
Long-term debt:
Notes payable .............................. 1,309 7.2% 1,684 7.3%
Medium-term notes payable .................. 377 5.6% 535 5.9%
Euro medium-term notes payable ............. 537 6.0% 584 4.7%
Other ...................................... 1,207 6.2% 18 10.3%
------ -------
Total Long Term ............................. 3,430 6.5% 2,821 6.5%
------ -------
Total ....................................... $9,157 6.2% $12,009 5.9%
====== =======
</TABLE>

Scheduled repayments of long-term debt as of December 31, 1995, are as
follows: $321 million in 1996, $448 million in 1997, $868 million in 1998,
$667 million in 1999, $620 million in 2000, and $593 million thereafter.

As of December 31, 1995, the Company had $6,770 million in lines of credit
from numerous financial institutions of which $4,263 million were unused.

7. SURPLUS

A. Capital Notes

A summary of the outstanding Capital Notes as of December 31, 1995 is as
follows:

Principal Interest Maturity
Issue Date (Par) Rate Date
---------- --------- -------- --------
(In Millions)

April 1993 ................ $ 300 6.875% April 2003
June 1995 ................. 250 7.650% July 2007
July 1995 ................. 100 8.100% July 2015
June 1995 ................. 350 8.300% July 2025
------
Total ..................... $1,000
======

The notes are subordinate in right of payment to policyholder claims and to
senior indebtedness, and principal repayments are subject to a risk-based
capital test.

The net proceeds from the April 1993 notes, approximately $298 million,
were contributed to a voluntary employee benefit association trust to
prefund certain obligations of 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 (Note 5B).

B. SPECIAL SURPLUS FUND

In accordance with the requirements of various states, a special surplus
fund has been established for contingency reserves of $1,274 million and
$1,097 million as of December 31, 1995 and 1994, respectively.

8. FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair values presented on the next page have been determined using
available information and reasonable valuation methodologies. Considerable
judgment is applied in interpreting data to develop the estimates of fair
value. Accordingly, such estimates

F-11

<PAGE>

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

For The Years Ended December 31, 1995, 1994 and 1993

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.)

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 credit
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.

Equity Securities--Fair value is based on quoted market prices, where
available, or prices 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, 1995 and
1994.

1995 1994
------------------------ -----------------------
Carrying Estimated Carrying Estimated
Amount Fair Value Amount Fair Value
--------- ---------- --------- ----------
<S> <C> <C> <C> <C>
(In Millions)
FINANCIAL ASSETS:
Fixed maturities ........................... $ 85,585 $ 92,282 $ 78,620 $77,200
Equity securities .......................... 1,937 1,937 2,327 2,327
Mortgage loans ............................. 23,680 24,268 26,199 24,955
Policy loans ............................... 6,800 7,052 6,631 6,018
Short-term investments ..................... 7,874 7,874 10,630 10,630
Securities purchased under
agreements to resell ...................... 5,130 5,130 5,591 5,591
Trading account securities ................. 3,658 3,658 6,341 6,341
Cash ....................................... 1,633 1,633 1,109 1,109
Broker-dealer receivables .................. 8,136 8,136 8,164 8,164
Assets held in Separate Accounts ........... 58,435 58,435 48,633 48,633
Derivative financial instruments ........... 1,473 1,640 1,219 1,268

FINANCIAL LIABILITIES:
Investment-type insurance contracts ........ 35,336 36,258 39,747 38,934
Securities sold under agreements to
repurchase ................................ 7,993 7,993 8,919 8,919
Notes payable and other borrowings ......... 9,157 9,231 12,009 11,828
Broker-dealer payables ..................... 6,083 6,083 6,198 6,198
Liabilities related to Separate
Accounts .................................. 57,586 57,586 47,946 47,946
Derivative financial instruments ........... 1,704 1,781 1,611 1,665

</TABLE>

F-12

<PAGE>

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

For The Years Ended December 31, 1995, 1994 and 1993

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

A. Derivative Financial Instruments

Derivatives, including swaps, forwards, futures, options, and loan
commitments subject to market risk, are used for trading and other
than trading activities (Note 1C). The following two tables summarize
the Company's outstanding positions on a gross basis before netting
pursuant to rights of offset, qualifying master netting agreements
with counterparties or collateral arrangements as of December 31, 1995
and 1994, respectively:

DERIVATIVE FINANCIAL INSTRUMENTS
As of December 31, 1995
(In Millions)
<TABLE>
<CAPTION>

Trading Other Than Trading Total
-------------------- -------------------- -------------------------------
Estimated Estimated Carrying Estimated
Notional Fair Value Notional Fair Value Notional Amount Fair Value
-------- ---------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Swaps:
Assets ................. $12,720 $1,131 $ 114 $ 10 $12,834 $1,132 $1,141
Liabilities ............ 11,488 1,317 4,476 62 15,964 1,371 1,379
Forwards:
Assets ................. 20,351 291 2,281 33 22,632 305 324
Liabilities ............ 22,068 278 6,675 48 28,743 291 326
Futures:
Assets ................. 1,387 14 2,590 34 3,977 20 48
Liabilities ............ 3,065 18 1,821 11 4,886 24 29
Options:
Assets ................. 1,961 20 4,345 97 6,306 20 117
Liabilities ............ 1,700 17 2,724 20 4,424 18 37
Loan Commitments:
Assets ................. 0 0 123 10 123 (4) 10
Liabilities ............ 0 0 1,412 10 1,412 0 10
------- ------ ------- ---- ------- ------ ------
Total:
Assets ................. $36,419 $1,456 $ 9,453 $184 $45,872 $1,473 $1,640
======= ====== ======= ==== ======= ====== ======
Liabilities ............ $38,321 $1,630 $17,108 $151 $55,429 $1,704 $1,781
======= ====== ======= ==== ======= ====== ======
</TABLE>

F-13

<PAGE>

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

For The Years Ended December 31, 1995, 1994 and 1993

DERIVATIVE FINANCIAL INSTRUMENTS
As of December 31, 1994
(In Millions)

Trading Other Than Trading Total
-------------------- -------------------- -------------------------------
Estimated Estimated Carrying Estimated
Notional Fair Value Notional Fair Value Notional Amount Fair Value
-------- ---------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Swaps:
Assets ................. $13,852 $ 837 $ 184 $ 9 $14,036 $ 845 $ 846
Liabilities ............ 14,825 1,216 4,993 48 19,818 1,236 1,264
Forwards:
Assets ................. 21,988 300 2,720 24 24,708 312 324
Liabilities ............ 19,898 289 3,112 19 23,010 299 308
Futures:
Assets ................. 1,520 40 4,296 17 5,816 30 57
Liabilities ............ 1,878 35 505 3 2,383 35 38
Options:
Assets ................. 2,924 31 2,407 8 5,331 34 39
Liabilities ............ 3,028 38 2,217 2 5,245 40 40
Loan Commitments:
Assets ................. 0 0 212 2 212 (2) 2
Liabilities ............ 0 0 1,543 15 1,543 1 15
------- ------ ------- --- ------- ------ ------
Total:
Assets ................. $40,284 $1,208 $ 9,819 $60 $50,103 $1,219 $1,268
======= ====== ======= === ======= ====== ======
Liabilities ............ $39,629 $1,578 $12,370 $87 $51,999 $1,611 $1,665
======= ====== ======= === ======= ====== ======
</TABLE>

Derivatives Held for Trading Purposes--The Company uses derivatives
for trading purposes in securities broker-dealer activities and in a
limited-purpose swap subsidiary to meet the financial and hedging
needs of its customers. Net trading revenues for the years ended
December 31, 1995 and 1994, relating to forwards and futures and swaps
were $110 million, $42 million and $3 million, and $42 million, $33
million and $8 million, respectively. Net trading revenues for options
were not material. Average fair values for trading derivatives in an
asset position during the years ended December 31, 1995 and 1994 were
$1,394 million and $1,526 million, respectively, and for derivatives
in a liability position were $1,582 million and $1,671 million,
respectively. Of those derivatives held for trading purposes at
December 31, 1995, 55% of the notional amount consisted of interest
rate derivatives, 40% consisted of foreign currency derivatives, and
5% consisted of equity and commodity derivatives.

Derivatives Held for Purposes Other Than Trading--The Company uses
derivatives primarily for asset/liability risk management and to
reduce exposure to interest rate, currency and other market risks. Of
the total notional amount of derivatives held for purposes other than
trading at December 31, 1995, 16% were used by the Company to hedge
its investment portfolio to reduce interest rate, currency and other
market risks, and 84% were used to hedge interest rate risk related to
the Company's mortgage banking segment activities. Of those
derivatives held for purposes other than trading at December 31, 1995,
92% of notional consisted of interest rate derivatives and 8%
consisted of foreign currency derivatives.

B. Off-Balance Sheet Credit-Related Instruments

During the normal course of its business, the Company utilizes
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 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 $15,498 million and $17,389 million at December
31, 1995 and 1994, respectively. Because many of these amounts expire
without being advanced in whole or in part, the notional amounts do
not represent future cash

F-14

<PAGE>

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

For The Years Ended December 31, 1995, 1994 and 1993

flows. The above notional amounts include $6,001 million and $4,150
million of unused available lines of credit under credit card and home
equity commitments as of December 31, 1995 and 1994, 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 $(67) million and $(91) million at
December 31, 1995 and 1994, respectively.

10. DIVESTITURES

In October 1995, the Company completed the sale of its reinsurance segment,
Prudential Reinsurance Holdings, Inc. ("Holdings"), through an initial
public offering of common stock. As a result of the sale, an after-tax gain
of $72 million was recorded in 1995.

In March 1995, the Company announced its intention to sell its mortgage
banking segment. On January 26, 1996, the Company entered into a definitive
agreement to sell substantially all the assets of Prudential Home Mortgage
Company, Inc. and it has also liquidated certain mortgage-backed securities
and extended warehouse loans. The Company recorded an after-tax loss of $98
million, which includes operating gains and losses, asset write downs, and
other costs directly related to the planned sale. The Company continues to
have discussions with prospective buyers for the sale of the remaining
assets.

A summary of the assets and liabilities of the mortgage banking segment at
December 31 follows:

ASSETS AND LIABILITIES OF MORTGAGE BANKING SEGMENT

1995 1994
------ ------
(In Millions)

Total assets ............................ $4,293 $4,357
Total liabilities ....................... 4,215 4,199
------ ------
Net assets .............................. $ 78 $ 158
====== ======

11. CONTINGENCIES

A. Aggregate Stop Loss Retrocession Agreement

As a result of the sale of Holdings, in 1995, Prudential Reinsurance
(a Holdings subsidiary) and Gibraltar Casualty Co. (a Prudential
subsidiary) entered into an Aggregate Stop Loss Agreement. The Stop
Loss Agreement is intended to mitigate the impact on Prudential
Reinsurance of adverse development of loss reserves as of June 30,
1995, of up to $375 million of the first $400 million of adverse
development. The Company has recorded a loss reserve of $230 million
as of December 31, 1995.

B. Environmental and Asbestos-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. 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.

C. 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.

Several purported class actions and individual actions have been
brought against the Company on behalf of those persons who purchased
life insurance policies allegedly because of deceptive sales practices
engaged in by the Company and its insurance agents in violation of
state and federal laws. The sales practices alleged to have occurred
are contrary to Company policy. Some of these cases seek very
substantial damages while others seek unspecified compensatory,
punitive and treble damages. The Company intends to defend these cases
vigorously.

F-15

<PAGE>

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

For The Years Ended December 31, 1995, 1994 and 1993

In response to this litigation, several state insurance departments
have initiated market conduct examinations relating to Prudential's
sales practices. The Attorney General of one state has conducted an
investigation and made its report to the state insurance commissioner.
Another Attorney General has also made inquiries. The New Jersey
Insurance Commissioner is leading a multi-state task force of
insurance commissioners to examine life insurance industry sales and
marketing practices. There are now approximately thirty insurance
departments participating in this effort. The Company is cooperating
fully in this examination.

Litigation is subject to many uncertainties, and given the complexity
and scope of these suits, their outcome cannot be predicted. It is
also not possible to predict the likely results of any regulatory
inquiries or their effect on litigation which might be initiated in
response to widespread media coverage of these matters.

Accordingly, management is unable to make a meaningful estimate of the
amount or range of loss that could result from an unfavorable outcome
of all pending litigation and the regulatory inquiries. It is possible
that the results of operations or the cash flows of the Company in
particular quarterly or annual periods could be materially affected by
an ultimate unfavorable outcome of certain pending litigation and
regulatory matters.

Management believes, however, that the ultimate outcome of all pending
litigation and regulatory matters referred to above should not have a
material adverse effect on the Company's financial position.

In 1993, Prudential Securities Incorporated (PSI), a subsidiary of
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. The agreement also required PSI to take
measures to enhance the adequacy of its sales practices compliance
controls.

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 for litigation, including
partnership settlement matters, will not have a material adverse
effect on the Company's financial position.

F-16

<PAGE>

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, 1995 and 1994, 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, 1995. 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, 1995 and 1994, and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1995 in conformity with generally accepted accounting
principles.

Deloitte & Touche LLP
Parsippany, New Jersey
March 1, 1996

F-17

<PAGE>

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

A. SUBACCOUNT UNIT VALUES

The value for each Subaccount Unit is computed as of the end of each "valuation
period" as defined on page 1 of the prospectus (also referred to in this section
as business day).

On any given business day the value of Units 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 expense risks and mortality risks. (See CHARGES, FEES, AND
DEDUCTIONS in the prospectus for the Account.) 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.

B. DETERMINATION OF THE AMOUNT OF MONTHLY VARIABLE ANNUITY PAYMENT

When a Contract owner elects to convert his or her Variable Account into monthly
variable annuity payments (an option available under the WVA-83 Contract and the
VIP-84 Contract, but not under the VIP-86 Contract), the number of Units
credited to him or her in each subaccount is first reduced to take into account
any applicable sales charge and any state premium taxes that may be payable. The
remaining Subaccount Units are then converted into a number of Subaccount
Annuity Units of equal aggregate value. As with Subaccount Units, the value of
each Subaccount Annuity Unit also changes daily in accordance with the
investment results of the underlying Series Fund Portfolio, after deduction of
the daily equivalent of the 1.2% annual charge for assuming expense and
mortality risks.

Built into the value of Subaccount Annuity Units is an assumption that the value
of a subaccount will grow by 3.5% each year. The reason for making this
assumption is explained more fully below. Accordingly, the value of a Subaccount
Annuity Unit always increases by an amount that is somewhat less than the
increase would have been had this assumption not been made and decreases by an
amount that is somewhat greater than the decrease would have been had the
assumption not been made. If the value of the assets of a subaccount increases
from 1 day to the next at a rate equivalent to 4.7% per year (3.5% plus the
annual charge of 1.2%), the Subaccount Annuity Unit Value will not change. If
the increase is less than at a rate equivalent to 4.7% per year, the Subaccount
Annuity Unit Value will decrease.

To determine the amount of each monthly variable annuity payment, the first step
is to refer to the Schedule of Annuity Rates set forth in the Contract, relating
to the form of annuity selected by the Contract owner. For example, for a man of
65 years of age who has selected a lifetime annuity with a guaranteed minimum of
120 payments, the applicable schedules currently provide that 1000 Subaccount
Annuity Units will result in the payment each month of an amount equal to the
value of 5.73 Subaccount Annuity Units. (Due to the fact that the Schedule of
Annuity Rates set forth in the WVA-83 Contract differs from that set forth in
the VIP-84 Contract, the preceding sentence, as it applies to the WVA-83
Contract, is modified. See item 4 under DIFFERENCES UNDER THE WVA-83 CONTRACT in
the prospectus for the Account.) The amount of the first variable annuity
payment made on the first day of the month will be equal to that number of
Subaccount Annuity Units multiplied by the Subaccount Annuity Unit Value at the
end of that day, if a business day, or otherwise at the end of the last
preceding business day. The amount of each subsequent variable annuity payment
made on the first day of the month will be equal to the number of Subaccount
Annuity Units multiplied by the Subaccount Annuity Unit Value at the end of the
last business day which is at least 5 days before the date the annuity payment
is due. (Under the WVA-83 Contract, the amount of each variable annuity payment
made after the first payment is not determined as described in the preceding
sentence. See item 5 under DIFFERENCES UNDER THE WVA-83 CONTRACT in the
prospectus for the Account.)

As stated above, Subaccount Annuity Unit Values change in accordance with the
investment results of the subaccount but will not increase--and thus the amount
of each monthly variable payment will not increase--unless the assets in the
subaccount increase, after deducting the 1.2% annual charge, at a rate greater
than 3.5% per year. This compensates for the fact that the annuity rate
schedules have been constructed upon the assumption that there will be a 3.5%
annual increase in the value of each subaccount. Although a different assumption
could have been made, namely that the subaccounts will not increase in value,
this would have resulted in smaller variable annuity payments immediately after
annuitization and larger payments in later years. This would have been

<PAGE>

advantageous for annuitants who happen to live very long but disadvantageous to
those who happen to die earlier. The Prudential believes that the 3.5% annual
growth assumption is better for Contract owners, because it produces a better
balance between early and later variable annuity payments.

<PAGE>

INDIVIDUAL VARIABLE CONTRACT ACCOUNT
VARIABLE ANNUITY CONTRACTS

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
Prudential Plaza
Newark, New Jersey 07102-3777
Telephone: (800) 445-4571

<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, 1995; the Statements of Operations for the periods ended
December 31, 1995; the Statements of Changes in Net Assets for the
periods ended December 31, 1995 and 1994; 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, 1995 and 1994; 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,
1995, 1994 and 1993; 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 3)

(4) (a) Individual Variable Annuity Contract (Form WVA-83). (Note 3)

(b) Special Page One to the Contract (Form WVA-83) for N.Y. State
issues. (Note 3)

(d) Special Page Six WVA-83 to the Contract (Form WVA-83) for use in
Oklahoma issues. (Note 4)

(e) Special Page Six WVA-83 to the Contract (Form WVA-83) for use in
California issues. (Note 4)

(f) Endorsement WVA 3-83 to the Contract (Form WVA-83) for use in
Tennessee issues. (Note 5)

(g) Endorsement WVA 4-83 to the Contract (Forms WVA-83 and VIP-84)
for use in Texas issues. (Note 5)

(h) Endorsement WVA 5-83 to the Contract (Form WVA-83) for use in
Texas and Pennsylvania issues. (Note 5)

(i) Endorsement WVA 6-83 to the Contract (Form WVA-83) for use in
California issues. (Note 5)

(j) Endorsement COMB 84889-83 to the Contract (Form WVA-83) for use
in the District of Columbia and in all states except New York.
(Note 5)

(k) Endorsement COMB 84890-83 to the Contract (Form WVA-83) for use
in the District of Columbia and in all states except New York.
(Note 5)

(l) Individual Variable Annuity Contract (Form VIP-84). (Note 7)

(m) Special Page One to the Contract (Form VIP-84) for use in N.Y.
issues. (Note 7)

(n) Special Page Nineteen to the Contract (Form VIP-84) for use in
N.Y. issues. (Note 6)

(o) Special Page Four to the Contract (Form VIP-84) for use in
Oklahoma issues. (Note 7)

(p) Special Page Seven to the Contract (Form VIP-84) for use in
Oklahoma issues. (Note 7)

(q) Special Page Four to the Contract (Form VIP-84) for use in
California issues. (Note 7)

(r) Special Page Seven to the Contract (Form VIP-84) for use in
California issues. (Note 7)

(s) Endorsement VIP 3-84 to the Contract (Form VIP-84) for use in
California issues. (Note 6)

(t) Endorsement WVA 13-85 to the Contract (Form WVA-83) for use in
all states so that the Contract meets Internal Revenue Code
Section 72(s) requirements for an annuity. (Note 8)

(u) Endorsement VIP 6-85 to the Contract (Form VIP-84) for use in all
states so that the Contract meets Internal Revenue Code Section
72(s) requirements for an annuity. (Note 8)

(v) Individual Variable Annuity Contract (Form VIP-86). (Note 10)

(w) Individual Variable Annuity Contract (Form VIP-86) revised. (Note
11)

(x) Special Jacket VIP-86 MN to the VIP-86 Contract for use in
Minnesota issues. (Note 11)

(y) Special Jacket VIP-86 Y to the VIP-86 Contract for use in New
York issues. (Note 11)

C-1

<PAGE>

(z) Special Contract Data Page 3 (VIP-86) (MN) to the VIP-86 Contract
for use in Minnesota issues. (Note 11)

(aa) Special Page 7 (VIP-86) Y to the VIP-86 Contract for use in New
York issues. (Note 11)

(bb) Special Page 7 (VIP-86) (OK) to the VIP-86 Contract for use in
Oklahoma issues. (Note 11)

(cc) Special Page 7 (VIP-86) (SC) to the VIP-86 Contract for use in
South Carolina issues. (Note 11)

(dd) Special Page 8 (VIP-86) (OK) to the VIP-86 Contract for use in
Oklahoma issues. (Note 11)

(ee) Special Page 11 (VIP-86) (WA) to the VIP-86 Contract for use in
Washington issues. (Note 11)

(ff) Special Page 11 (VIP-86) (SC) to the VIP-86 Contract for use in
South Carolina issues. (Note 11)

(gg) Special Page 11 (VIP-86) (Y) to the VIP-86 Contract for use in
New York issues. (Note 11)

(hh) Special Page 11 (VIP-86) (WI) to the VIP-86 Contract for use in
Wisconsin issues. (Note 11)

(ii) Special Page 12 (VIP-86) (SC) to the VIP-86 Contract for use in
South Carolina and Washington issues. (Note 11)

(jj) Special Page 12 (VIP-86) (Y) to the VIP-86 Contract for use in
New York issues. (Note 11)

(kk) Special Page 12 (VIP-86) (WI) to the VIP-86 Contract for use in
Wisconsin issues. (Note 11)

(ll) Special Page 13 (VIP-86) (WI) to the VIP-86 Contract for use in
Wisconsin issues. (Note 11)

(mm) Special Page 14 (VIP-86) (WI) to the VIP-86 Contract for use in
Wisconsin issues. (Note 11)

(nn) Special Back Jacket Page 18 (VIP-86) (MN) to the VIP-86 Contract
for use in Minnesota issues. (Note 11)

(oo) Special Back Jacket Page 18 (VIP-86) (Y) to the VIP-86 Contract
for use in New York issues. (Note 11)

(pp) Special Jacket VIP-86-P to the VIP-86 Contract for use in
Pennsylvania issues. (Note 12)

(qq) Special Contract Data Page 3 (VIP-86) (MA) to the VIP-86 Contract
for use in Massachusetts issues. (Note 12)

(rr) Special Page 7 (VIP-86) (PA) to the VIP-86 Contract for use in
Pennsylvania issues. (Note 12)

(ss) Special Blank Page 13 (VIP-86) (MA) to the VIP-86 Contract for
use in Massachusetts issues.(Note 12)

(tt) Special Blank Page 17 VIP-86-P to the VIP-86 Contract for use
Pennsylvania issues. (Note 12)

(uu) Special Back Jacket Page 18 VIP-86-P to the VIP-86 Contract for
use in Pennsylvania issues. (Note 12)

(vv) Endorsement VIP 501-86 to the VIP-86 Contract for use in all
states except Delaware, Georgia, Massachusetts, North Dakota, New
York, Oregon, Pennsylvania and Texas. (Note 12)

(ww) Endorsement COMB 84890-83 to the VIP-86 Contract for use in
Montana. (Note 12)

(xx) Endorsement Certification PLI 254-86 to the VIP-86 Contract for
use in Pennsylvania. (Note 12)

(yy) Endorsement PLI 288-88 to the VIP-86 Contract. (Note 14)

(zz) Waiver of Withdrawal Charges rider ORD 88753-92 to the VIP-86
Contract (at issue). (Note 16)

(aaa) Waiver of Withdrawal Charges rider ORD 88754-92 to the VIP-86
Contract (after issue). (Note 16)

(bbb) Spousal Continuance Rider ORD 89011-93 to the VIP contract (at
issue). (Note 17)

(ccc) Endorsement altering the Assignment provision ORD 83922-95 (Note
18)

(5) Application for Individual Variable Annuity Contract:

(a) Application Form VA 200 ED 07/83 for Individual Variable Annuity
Contract (Form WVA-83). (Note 5)

(b) Application Form VA 200 ED 5/84 for Individual Variable Annuity
Contract (Form VIP-84) for use by Prudential representatives.
(Note 7)

(c) Application Form VA 200B ED 5/84 for Individual Variable Annuity
Contract (Form VIP-84) for use by Prudential Securities account
executives. (Note 7)

(d) Revised Application Form VA 200 ED 5/84-Non-Qualified for
Individual Annuity Contract (Form VIP-84) for use by Prudential
representatives. (Note 8)

(e) Revised Application Form VA 200 Ed. 5/86-Non Qualified. (Note 9)

(f) Revised Application Form VA 200 Ed. 5/86-Non-Qualified (NY) for
use in New York. (Note 9)

(g) Revised Application Form VA 200 Ed. 9/86-Non-Qualified. (Note 10)

(h) Revised Application Form VA 200 Ed. 11/86-Non-Qualified.
(Note 12)

(i) Application for VIP annuity contract ORD 87348-92. (Note 17)

(j) Supplement to the Application for a VIP contract ORD 87454-92.
(Note 17)

C-2

<PAGE>

(6) (a) Charter of The Prudential Insurance Company of America, as amended
February 26, 1989. (Note 15)

(b) By-Laws of The Prudential Insurance Company of America, as
amended August 8, 1995. (Note 20)

(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 Insurance Company of America. (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)

(14) Powers of Attorney.

(a) F. Agnew, F. Becker, W. Boeschenstein
L. Carter, Jr., J. Cullen, C. Davis, R. Enrico
A. Gilmour, W. Gray, III, J. Hanson, C. Horner
A. Jacobson, G. Keith, B. Malkiel, J. Opel
A. Ryan, C. Sitter, D. Staheli, R. Thomson
P. Vagelos, S. Van Ness, P. Volcker, J. Williams (Note 19)
(b) M. Grier (Note 21)

(27) Financial Data Schedule (Note 1)

(Note 1) Filed herewith.

(Note 2) Incorporated by reference to Registrant's Form N-8B-2, filed
December 15, 1982.

(Note 3) Incorporated by reference to Pre-Effective Amendment No. 2 to this
Registration Statement, filed March 10, 1983.

(Note 4) Incorporated by reference to Pre-Effective Amendment No. 3 to this
Registration Statement, filed April 27, 1983.

(Note 5) Incorporated by reference to Post-Effective Amendment No. 1 to this
Registration Statement, filed December 8, 1983.

(Note 6) Incorporated by reference to Post-Effective Amendment No. 2 to this
Registration Statement, filed March 22, 1984.

(Note 7) Incorporated by reference to Post-Effective Amendment No. 3 to this
Registration Statement, filed April 27, 1984.

(Note 8) Incorporated by reference to Post-Effective Amendment No. 4 to this
Registration Statement, filed April 30, 1985.

(Note 9) Incorporated by reference to Post-Effective Amendment No. 6 to this
Registration Statement, filed April 30, 1986.

(Note 10) Incorporated by reference to Post-Effective amendment No. 7 to this
Registration Statement, filed July 9, 1986.

(Note 11) Incorporated by reference to Post-Effective Amendment No. 8 to this
Registration Statement, filed October 23, 1986.

(Note 12) Incorporated by reference to Post-Effective Amendment No. 9 to this
Registration Statement, filed April 27, 1987.

(Note 13) 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 14) Incorporated by reference to Post-Effective Amendment No. 12 to this
Registration Statement, filed March 6, 1989.

(Note 15) Incorporated by reference to Form S-6 Registration Statement,
Registration No. 33-61079, filed July 17, 1995 on behalf of The
Prudential Variable Appreciable Account.

(Note 16) Incorporated by reference to Post-Effective Amendment No. 18 to this
Registration Statement, filed April 28, 1993.

(Note 17) Incorporated by reference to Post-Effective Amendment No. 19 to Form
S-6, Registration No. 2-80897, filed April 28, 1994.

C-3

<PAGE>

(Note 18) Incorporated by reference to Post-Effective Amendment No. 20 to Form
S-6, Registration No. 2-80897, filed February 27, 1995.

(Note 19) Incorporated by reference to Post-Effective Amendment No. 15 to Form
S-6, Registration No. 33-20000, filed May 1, 1995, on behalf of The
Prudential Variable Appreciable Account.

(Note 20) Incorporated by reference to Post-Effective Amendment No. 1 to Form
S-6, Registration No. 33-61079, filed April 25, 1996, on behalf of
The Prudential Variable Appreciable Account.

(Note 21) Incorporated by reference to Form S-6, Registration No.
33-61079, filed July 17, 1995, on behalf of The Prudential
Variable Appreciable Account.

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 Flexible Premium Variable Annuity
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 organized 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. 29 to the Form N-1A Registration
Statement for The Prudential Series Fund, Inc., Registration No. 2-80896, filed
May 1, 1995, the text of which is hereby incorporated.

ITEM 27. NUMBER OF CONTRACT OWNERS

As of February 23, 1996, there were 101,589 Contract owners of non-qualified
Contracts offered by the Registrant.

C-4

<PAGE>

ITEM 28. INDEMNIFICATION

The Prudential Directors' and Officers' Liability and Corporation Reimbursement
Insurance Program, purchased by The Prudential from Aetna Casualty & Surety
Company, CNA Insurance Companies, 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 reimbursement for "Loss" (as defined
in the policies) which the Company pays as indemnification to its directors or
officers resulting from any claim for any actual or alleged act, error,
misstatement, misleading statement, omission, or breach of duty by persons in
the discharge of their duties 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 uninsurable 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 fraudulent acts or omissions or the willful violation of any law
by a director or officer, (2) claims based on or attributable to directors or
officers gaining personal profit or advantage to which they were not legally
entitled, and (3) 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 26, 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
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 Flexible Premium Variable Annuity 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-5

<PAGE>

(b) Incorporated by Reference to Item 29(b) of Post-Effective Amendment No. 11
to Form N-4, Registration No. 33-25434, filed April 25, 1996, on behalf of
The Prudential Individual Variable Contract Account.

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
Registration Statement as frequently as is necessary to ensure that the
audited financial statements in the Registration Statement are never more
than 16 months old for 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.

C-6

<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 effective date of the most recent
Post-Effective Amendment to the Registration Statement which included a
prospectus 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 25th
day of April, 1996.

(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 and Actuary

As required by the Securities Act of 1933, this Post-Effective Amendment No. 22
to the Registration Statement has been signed by the following persons in the
capacities and on the date indicated.

SIGNATURE AND TITLE
-------------------

/s/ * April 25, 1996
- -----------------------------------
Arthur F. Ryan
Chairman of the Board, President,
and Chief Executive Officer

/s/ *
- -----------------------------------
Garnett L. Keith, Jr.
Vice Chairman and Director

/s/ * *By: /s/ THOMAS C. CASTANO
- ----------------------------------- ------------------------------
Mark B. Grier Thomas C. Castano
Principal Financial Officer (Attorney-in-Fact)

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

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

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

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

C-7

<PAGE>

/s/ * April 25, 1996
- --------------------------------
James G. Cullen
Director

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

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

/s/ *
- --------------------------------
Allan D. Gilmour
Director

/s/ * *By: /s/ THOMAS C. CASTANO
- -------------------------------- ----------------------------------
William H. Gray, III Thomas C. Castano
Director (Attorney-in-Fact)

/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-8

<PAGE>

/s/ *
- --------------------------------
Stanley C. Van Ness
Director

/s/ * April 25, 1996
- --------------------------------
Paul A. Volcker
Director
*By: /s/ THOMAS C. CASTANO
/s/ * -----------------------------------
- -------------------------------- Thomas C. Castano
Joseph H. Williams (Attorney-in-Fact)
Director

C-9

<PAGE>

EXHIBIT INDEX

(9) Opinion of Counsel and consent to its use as to legality Page C-11
of the securities being registered.

(10) Written consent of Deloitte & Touche, LLP, Page C-12
independent auditors.

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

(27) Financial Data Schedule. Page C-17

C-10

EXHIBIT (9)

April 25, 1996

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

Gentlemen:

In my capacity as Chief Counsel, Variable Products, Law Department of The
Prudential Insurance Company of America, 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 was 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. 33-25434 and Registration No. 2-80897) under the Securities
Act of 1933 and the Investment Company Act of 1940 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-11

EXHIBIT (10)

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Post-Effective Amendment No. 22 to Registration
Statement No. 2- 80897 on Form N-4 of The Prudential Individual Variable
Contract Account of The Prudential Insurance Company of America of our report
dated February 15, 1996, relating to the financial statements of The Prudential
Individual Variable Contract Account, and of our report dated March 1, 1996,
relating to the consolidated financial statements of The Prudential Insurance
Company of America and subsidiaries appearing in the Statement of Additional
Information, which is a part of such Registration Statement, and to the
reference to us under the heading "Experts", appearing in such Statement of
Additional Information.

/s/ Deloitte & Touche LLP
Parsippany, New Jersey
April 25, 1996

C-12

ANNUALIZED RATES OF RETURN

ANNUAL ADMIN = $30/$9999 *1000 = $3.00 ANNUAL CHARGE

VIP/QVIP DI BOND EQUITY FLX MGD CONS BL EQ INC HY
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 YEAR % OF RETURN 19.31% 29.74% 22.66% 15.89% 20.26% 16.17%
ERV(ENDING REDEEMABLE VALUE) 1193.05 1297.41 1226.63 1158.87 1202.64 1161.69
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00 3.00 3.00
ERV LESS ADMIN CHARGE 1190.05 1294.41 1223.63 1155.87 1199.64 1158.69
ROR BEFORE LOAD 19.01% 29.44% 22.36% 15.59% 19.96% 15.87%

AMT SUBJ TO LOAD IF + RETURN 880.99 870.56 877.64 884.41 880.04 884.13
AMT SUBJ TO LOAD IF - RETURN 1071.05 1164.97 1101.26 1040.29 1079.68 1042.82
AMT SUBJ TO LOAD 880.99 870.56 877.64 884.41 880.04 884.13
1ST YEAR SALE CHARGE 7.00% 7.00% 7.00% 7.00% 7.00% 7.00%
AMT OF LOAD 61.67 60.94 61.43 61.91 61.60 61.89
ERV LESS ADMIN CHG & LOAD 1128.38 1233.47 1162.19 1093.97 1138.04 1096.80

RETURN W/SALES LOAD AND ADM CHG 12.84% 23.35% 16.22% 9.40% 13.80% 9.68%

ANNUALIZED RATES OF RETURN

VIP/QVIP DI BOND EQUITY FLX MGD CONS BL EQ INC HY
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
5 YR RATE OF RETURN

YEARS IN EXISTENCE 5.00 5.00 5.00 5.00 5.00 5.00
'90(OR INCEPT) TO '91 ROR 15.05% 24.51% 23.94% 17.66% 26.00% 37.53%
'90 TO '91 ERV 1150.55 1245.14 1239.42 1176.61 1259.95 1375.26
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00 3.00 3.00
'90 TO '91 ERV LESS ADMIN CHG 1147.55 1242.14 1236.42 1173.61 1256.95 1372.26
'91(OR INCEPT) TO '92 ROR 5.90% 12.81% 6.32% 5.67% 8.82% 16.14%
'91 TO '92 ERV 1215.30 1401.21 1314.61 1240.19 1367.80 1593.75
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00 3.00 3.00
'91 TO '92 ERV LESS ADMIN CHG 1212.30 1398.21 1311.61 1237.19 1364.80 1590.75
'92(OR INCEPT) TO '91 ROR 8.83% 20.43% 14.21% 10.87% 20.84% 17.85%
'92 TO '93 ERV 1319.37 1683.84 1498.02 1371.74 1649.21 1874.74
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00 3.00 3.00
'92 TO '93 ERV LESS ADMIN CHG 1316.37 1680.84 1495.02 1368.74 1646.21 1871.74
'93(OR INCEPT) TO '94 ROR -4.38% 1.56% -4.31% -2.14% 0.23% -3.88%
'93 TO '94 ERV 1258.76 1707.07 1430.54 1339.43 1650.02 1799.20
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00 3.00 3.00
'93 TO '94 ERV LESS ADMIN CHG 1255.76 1704.07 1427.54 1336.43 1647.02 1796.20
'94(OR INCEPT) TO '95 ROR 19.31% 29.74% 22.66% 15.89% 20.26% 16.17%
'94 TO '95 ERV 1498.19 2210.87 1751.06 1548.75 1980.78 2086.62
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00 3.00 3.00
'94 TO '95 ERV LESS ADMIN CHG 1495.19 2207.87 1748.06 1545.75 1977.78 2083.62

ANNUALIZED ROR BEFORE LOAD 8.38% 17.16% 11.82% 9.10% 14.61% 15.81%

AMT SUBJ TO LOAD IF + RETURN 850.48 779.21 825.19 845.42 802.22 791.64
AMT SUBJ TO LOAD IF - RETURN 1345.67 1987.09 1573.25 1391.18 1780.00 1875.26
AMT SUBJ TO LOAD 850.48 779.21 825.19 845.42 802.22 791.64
5TH (OR INCEPTION) SALE CHARGE 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%
AMT OF LOAD 25.51 23.38 24.76 25.36 24.07 23.75
ERV LESS LOAD 1469.67 2184.50 1723.30 1520.39 1953.71 2059.87

ANN.5YR RET W/LOAD AND ADM CHG 8.01% 16.92% 11.50% 8.74% 14.33% 15.55%

VIP/QVIP NTL RES STIX GLOBAL GVT INC PRU JEN SMCAP
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 YEAR % OF RETURN 25.42% 35.45% 14.51% 18.06% N/A N/A
ERV(ENDING REDEEMABLE VALUE) 1254.20 1354.47 1145.11 1180.61 N/A N/A
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00 N/A N/A
ERV LESS ADMIN CHARGE 1251.20 1351.47 1142.11 1177.61 N/A N/A
ROR BEFORE LOAD 25.12% 35.15% 14.21% 17.76% N/A N/A

AMT SUBJ TO LOAD IF + RETURN 874.88 864.85 885.79 882.24 N/A N/A
AMT SUBJ TO LOAD IF - RETURN 1126.08 1216.32 1027.90 1059.85 N/A N/A
AMT SUBJ TO LOAD 874.88 864.85 885.79 882.24 N/A N/A
1ST YEAR SALE CHARGE 7.00% 7.00% 7.00% 7.00% N/A N/A
AMT OF LOAD 61.24 60.54 62.01 61.76 N/A N/A
ERV LESS ADMIN CHG & LOAD 1189.96 1290.93 1080.10 1115.86 N/A N/A

RETURN W/SALES LOAD AND ADM CHG 19.00% 29.09% 8.01% 11.59% N/A N/A

ANNUALIZED RATES OF RETURN

VIP/QVIP NTL RES STIX GLOBAL GVT INC PRU JEN SMCAP
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
5 YR RATE OF RETURN

YEARS IN EXISTENCE 5.00 5.00 5.00 5.00 0.00 0.00
'90(OR INCEPT) TO '91 ROR 8.99% 28.18% 10.07% 14.73% N/A N/A
'90 TO '91 ERV 1089.90 1281.83 1100.70 1147.32 N/A N/A
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00 N/A N/A
'90 TO '91 ERV LESS ADMIN CHG 1086.90 1278.83 1097.70 1144.32 N/A N/A
'91(OR INCEPT) TO '92 ROR 6.03% 5.85% -4.57% 4.58% N/A N/A
'91 TO '92 ERV 1152.39 1353.68 1047.51 1196.78 N/A N/A
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00 N/A N/A
'91 TO '92 ERV LESS ADMIN CHG 1149.39 1350.68 1044.51 1193.78 N/A N/A
'92(OR INCEPT) TO '91 ROR 23.67% 8.37% 41.45% 11.23% N/A N/A
'92 TO '93 ERV 1421.47 1463.68 1477.42 1327.81 N/A N/A
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00 N/A N/A
'92 TO '93 ERV LESS ADMIN CHG 1418.47 1460.68 1474.42 1324.81 N/A N/A
'93(OR INCEPT) TO '94 ROR -5.43% -0.19% -6.02% -6.29% N/A N/A
'93 TO '94 ERV 1341.43 1457.90 1385.70 1241.42 N/A N/A
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00 N/A N/A
'93 TO '94 ERV LESS ADMIN CHG 1338.43 1454.90 1382.70 1238.42 N/A N/A
'94(OR INCEPT) TO '95 ROR 25.42% 35.45% 14.51% 18.06% N/A N/A
'94 TO '95 ERV 1678.65 1970.61 1583.34 1462.09 N/A N/A
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00 N/A N/A
'94 TO '95 ERV LESS ADMIN CHG 1675.65 1967.61 1580.34 1459.09 N/A N/A

ANNUALIZED ROR BEFORE LOAD 10.88% 14.50% 9.58% 7.85% N/A N/A

AMT SUBJ TO LOAD IF + RETURN 832.43 803.24 841.97 854.09 N/A N/A
AMT SUBJ TO LOAD IF - RETURN 1508.09 1770.85 1422.30 1313.18 N/A N/A
AMT SUBJ TO LOAD 832.43 803.24 841.97 854.09 N/A N/A
5TH (OR INCEPTION) SALE CHARGE 3.00% 3.00% 3.00% 3.00% N/A N/A
AMT OF LOAD 24.97 24.10 25.26 25.62 N/A N/A
ERV LESS LOAD 1650.68 1943.51 1555.08 1433.47 N/A N/A

ANN.5YR RET W/LOAD AND ADM CHG 10.54% 14.21% 9.23% 7.47% N/A N/A
</TABLE>

C-13

<PAGE>

ANNUALIZED RATES OF RETURN

VIP/QVIP DI BOND EQUITY FLX MGD CONS BL
- -------------------------------------------------------------------------------
10 YR RATE OF RETURN

YEARS IN EXISTENCE 10.00 10.00 10.00 10.00
INCEPT. TO '83 ROR 0.00% 0.00% 0.00% 0.00%
INCEPT. TO '83 ERV 0.00 0.00 0.00 0.00
ANNUAL ADMIN CHARGE 0.00 0.00 0.00 0.00
INCEPT. TO 83 ERV LESS ADMIN CHG 0.00 0.00 0.00 0.00
'83 (OR INCEPT) TO '84 ROR 0.00% 0.00% 0.00% 0.00%
'83 TO '84 ERV 0.00 0.00 0.00 0.00
ANNUAL ADMIN CHARGE 0.00 0.00 0.00 0.00
'83 TO '84 ERV LESS ADMIN CHG 0.00 0.00 0.00 0.00
'84 TO '85 ROR 0.00% 0.00% 0.00% 0.00%
'84 TO '85 ERV 0.00 0.00 0.00 0.00
ANNUAL ADMIN CHARGE 0.00 0.00 0.00 0.00
'84 TO '85 ERV LESS ADMIN CHG 1,000.00 1,000.00 1,000.00 1,000.00
'85 TO '86 ROR 13.09% 13.73% 14.11% 12.81%
'85 TO '86 ERV 1130.91 1137.25 1141.06 1128.09
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00
'85 TO '86 ERV LESS ADMIN CHG 1127.91 1134.25 1138.06 1125.09
'86(OR INCEPT) TO '87 ROR -0.91% 0.45% -3.00% 0.32%
'86 TO '87 ERV 1117.67 1139.36 1103.93 1128.73
'86 TO '87 ERV LESS ADMIN CHG 1114.67 1136.36 1100.93 1125.73
'87(OR INCEPT) TO '88 ROR 6.91% 15.66% 11.50% 8.88%
'87 TO '88 ERV 1191.66 1314.36 1227.50 1225.67
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00
'87 TO '88 ERV LESS ADMIN CHG 1188.66 1311.36 1224.50 1222.67
'88(OR INCEPT) TO '89 ROR 12.14% 28.20% 20.33% 15.61%
'88 TO '89 ERV 1332.98 1681.12 1473.44 1413.47
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00
'88 TO '89 ERV LESS ADMIN CHG 1329.98 1678.12 1470.44 1410.47
'89(OR INCEPT) TO '90 ROR 7.03% -6.34% 0.69% 4.01%
'89 TO '90 ERV 1423.41 1571.65 1480.62 1467.02
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00
'89 TO '90 ERV LESS ADMIN CHG 1420.41 1568.65 1477.62 1464.02
'90(OR INCEPT) TO '91 ROR 15.05% 24.51% 23.94% 17.66%
'90 TO '91 ERV 1634.25 1953.19 1831.40 1722.57
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00
'90 TO '91 ERV LESS ADMIN CHG 1631.25 1950.19 1828.40 1719.57
'91(OR INCEPT) TO '92 ROR 5.90% 12.81% 6.32% 5.67%
'91 TO '92 ERV 1727.56 2199.93 1944.02 1817.13
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00
'91 TO '92 ERV LESS ADMIN CHG 1724.56 2196.93 1941.02 1814.13
'92(OR INCEPT) TO '93 ROR 8.83% 20.43% 14.21% 10.87%
'92 TO '93 ERV 1876.88 2645.74 2216.89 2011.42
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00
'92 TO '93 ERV LESS ADMIN CHG 1873.88 2642.74 2213.89 2008.42

'93(OR INCEPT) TO '94 ROR -4.38% 1.56% -4.31% -2.14%
'93 TO '94 ERV 1791.87 2683.98 2118.40 1965.41
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00
'93 TO '94 ERV LESS ADMIN CHG 1788.87 2680.98 2115.40 1962.41
'94(OR INCEPT) TO '9 ROR 19.31% 29.74% 22.66% 15.89%
'94 TO '95 ERV 2134.22 3478.32 2594.81 2274.19
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00
'94 TO '95 ERV LESS ADMIN CHG 2131.22 3475.32 2591.81 2271.19

ANNUALIZED ROR BEFORE LOAD 7.86% 13.27% 9.99% 8.55%

AMT SUBJ TO LOAD IF + RETURN 786.88 652.47 740.82 772.88
AMT SUBJ TO LOAD IF - RETURN 1918.10 3127.79 2332.63 2044.07
AMT SUBJ TO LOAD 786.88 652.47 740.82 772.88
10TH (OR INCEPTION) SALE CHARGE 0.00% 0.00% 0.00% 0.00%
AMT OF LOAD 0.00 0.00 0.00 0.00
ERV LESS LOAD 2131.22 3475.32 2591.81 2271.19

ANN 10YR RET W/LOAD AND ADM CHG 7.86% 13.27% 9.99% 8.55%

C-14

<PAGE>

ANNUALIZED RATES OF RETURN

VIP/QVIP DI BOND EQUITY FLX MGD CONS BL EQ INC HY
- -----------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
SINCE INCEPTION RATE OF RETURN

YEARS IN EXISTENCE 12.56 12.57 12.60 12.58 7.86 8.84
INCEPT. TO '83 ROR N/A N/A N/A N/A N/A N/A
INCEPT. TO '83 ERV N/A N/A N/A N/A N/A N/A
ANNUAL ADMIN CHARGE N/A N/A N/A N/A N/A N/A
INCEPT. TO 83 ERV LESS ADMIN CHG N/A N/A N/A N/A N/A N/A
'83 (OR INCEPT) TO '84 ROR 14.03% 4.22% 5.48% 10.55% N/A N/A
'83 TO '84 ERV 1140.30 1042.22 1054.78 1105.52 N/A N/A
ANNUAL ADMIN CHARGE 4.69 4.68 4.80 4.74 N/A N/A
'83 TO '84 ERV LESS ADMIN CHG 1135.60 1037.54 1049.98 1100.78 N/A N/A
'84 TO '85 ROR 17.21% 31.28% 24.42% 19.64% N/A N/A
'84 TO '85 ERV 1331.08 1362.10 1306.41 1316.96 N/A N/A
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00 N/A N/A
'84 TO '85 ERV LESS ADMIN CHG 1328.08 1359.10 1303.41 1313.96 N/A N/A
'85 TO '86 ROR 13.09% 13.73% 14.11% 12.81% N/A N/A
'85 TO '86 ERV 1501.94 1545.64 1487.27 1482.27 N/A N/A
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00 N/A N/A
'85 TO '86 ERV LESS ADMIN CHG 1498.94 1542.64 1484.27 1479.27 N/A N/A
'86(OR INCEPT) TO '87 ROR -0.91% 0.45% -3.00% 0.32% N/A -5.87%
'86 TO '87 ERV 1485.33 1549.58 1439.76 1484.06 N/A 941.26
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00 N/A 2.53
'86 TO '87 ERV LESS ADMIN CHG 1482.33 1546.58 1436.76 1481.06 N/A 938.73
'87(OR INCEPT) TO '88 ROR 6.91% 15.66% 11.50% 8.88% 10.17% 11.83%
'87 TO '88 ERV 1584.71 1788.84 1601.93 1612.54 1101.70 1049.78
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00 2.60 3.00
'87 TO '88 ERV LESS ADMIN CHG 1581.71 1785.84 1598.93 1609.54 1099.10 1046.78
'88(OR INCEPT) TO '89 ROR 12.14% 28.20% 20.33% 15.61% 21.21% -3.20%
'88 TO '89 ERV 1773.75 2289.39 1924.00 1860.71 1332.25 1013.23
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00 3.00 3.00
'88 TO '89 ERV LESS ADMIN CHG 1770.75 2286.39 1921.00 1857.71 1329.25 1010.23
'89(OR INCEPT) TO '90 ROR 7.03% -6.34% 0.69% 4.01% -4.88% -12.89%
'89 TO '90 ERV 1895.16 2141.33 1934.30 1932.19 1264.42 880.00
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00 3.00 3.00
'89 TO '90 ERV LESS ADMIN CHG 1892.16 2138.33 1931.30 1929.19 1261.42 877.00
'90(OR INCEPT) TO '91 ROR 15.05% 24.51% 23.94% 17.66% 26.00% 37.53%
'90 TO '91 ERV 2177.02 2662.52 2393.69 2269.89 1589.32 1206.10
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00 3.00 3.00
'90 TO '91 ERV LESS ADMIN CHG 2174.02 2659.52 2390.69 2266.89 1586.32 1203.10
'91(OR INCEPT) TO '92 ROR 5.90% 12.81% 6.32% 5.67% 8.82% 16.14%
'91 TO '92 ERV 2302.37 3000.09 2541.88 2395.51 1726.21 1397.28
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00 3.00 3.00
'91 TO '92 ERV LESS ADMIN CHG 2299.37 2997.09 2538.88 2392.51 1723.21 1394.28
'92(OR INCEPT) TO '93 ROR 8.83% 20.43% 14.21% 10.87% 20.84% 17.85%
'92 TO '93 ERV 2502.46 3609.36 2899.72 2652.70 2082.32 1643.19
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00 3.00 3.00
'92 TO '93 ERV LESS ADMIN CHG 2499.46 3606.36 2896.72 2649.70 2079.32 1640.19
'93(OR INCEPT) TO '94 ROR -4.38% 1.56% -4.31% -2.14% 0.23% -3.88%
'93 TO '94 ERV 2390.07 3662.64 2771.78 2592.96 2084.13 1576.63
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00 3.00 3.00
'93 TO '94 ERV LESS ADMIN CHG 2387.07 3659.64 2768.78 2589.96 2081.13 1573.63
'94(OR INCEPT) TO '95 ROR 19.31% 29.74% 22.66% 15.89% 20.26% 16.17%
'94 TO '95 ERV 2847.90 4748.04 3396.25 3001.44 2502.86 1828.07
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00 3.00 3.00
'94 TO '95 ERV LESS ADMIN CHG 2844.90 4745.04 3393.25 2998.44 2499.86 1825.07

ANNUALIZED ROR BEFORE LOAD 8.68% 13.19% 10.19% 9.12% 12.36% 7.03%

AMT SUBJ TO LOAD IF + RETURN 715.51 525.50 660.67 700.16 750.01 817.49
AMT SUBJ TO LOAD IF - RETURN 2560.41 4270.54 3053.93 2698.59 2249.87 1642.56
AMT SUBJ TO LOAD 715.51 525.50 660.67 700.16 750.01 817.49
10TH (OR INCEPTION) SALE CHARGE 0.00% 0.00% 0.00% 0.00% 1.00% 0.00%
AMT OF LOAD 0.00 0.00 0.00 0.00 7.50 0.00
ERV LESS LOAD 2844.90 4745.04 3393.25 2998.44 2492.36 1825.07

ANN.10YR RET W/LOAD AND ADM CHG 8.68% 13.19% 10.19% 9.12% 12.32% 7.03%

ANNUALIZED RATES OF RETURN

VIP/QVIP NTL RES STIX GLOBAL GVT INC PRU JEN SMCAP
- -----------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
SINCE INCEPTION RATE OF RETURN

YEARS IN EXISTENCE 7.66 8.20 6.67 6.67 0.67 0.67
INCEPT. TO '83 ROR N/A N/A N/A N/A N/A N/A
INCEPT. TO '83 ERV N/A N/A N/A N/A N/A N/A
ANNUAL ADMIN CHARGE N/A N/A N/A N/A N/A N/A
INCEPT. TO 83 ERV LESS ADMIN CHG N/A N/A N/A N/A N/A N/A
'83 (OR INCEPT) TO '84 ROR N/A N/A N/A N/A N/A N/A
'83 TO '84 ERV N/A N/A N/A N/A N/A N/A
ANNUAL ADMIN CHARGE N/A N/A N/A N/A N/A N/A
'83 TO '84 ERV LESS ADMIN CHG N/A N/A N/A N/A N/A N/A
'84 TO '85 ROR N/A N/A N/A N/A N/A N/A
'84 TO '85 ERV N/A N/A N/A N/A N/A N/A
ANNUAL ADMIN CHARGE N/A N/A N/A N/A N/A N/A
'84 TO '85 ERV LESS ADMIN CHG N/A N/A N/A N/A N/A N/A
'85 TO '86 ROR N/A N/A N/A N/A N/A N/A
'85 TO '86 ERV N/A N/A N/A N/A N/A N/A
ANNUAL ADMIN CHARGE N/A N/A N/A N/A N/A N/A
'85 TO '86 ERV LESS ADMIN CHG N/A N/A N/A N/A N/A N/A
'86(OR INCEPT) TO '87 ROR N/A N/A N/A N/A N/A N/A
'86 TO '87 ERV N/A N/A N/A N/A N/A N/A
ANNUAL ADMIN CHARGE N/A N/A N/A N/A N/A N/A
'86 TO '87 ERV LESS ADMIN CHG N/A N/A N/A N/A N/A N/A
'87(OR INCEPT) TO '88 ROR N/A 22.17% N/A N/A N/A N/A
'87 TO '88 ERV N/A 1221.71 N/A N/A N/A N/A
ANNUAL ADMIN CHARGE N/A 3.61 N/A N/A N/A N/A
'87 TO '88 ERV LESS ADMIN CHG N/A 1218.10 N/A N/A N/A N/A
'88(OR INCEPT) TO '89 ROR 40.87% 29.38% N/A 10.79% N/A N/A
'88 TO '89 ERV 1408.69 1575.98 N/A 1107.87 N/A N/A
ANNUAL ADMIN CHARGE 5.01 3.00 N/A 1.98 N/A N/A
'88 TO '89 ERV LESS ADMIN CHG 1403.68 1572.98 N/A 1105.89 N/A N/A
'89(OR INCEPT) TO '90 ROR -6.88% -4.78% -5.14% 16.32% N/A N/A
'89 TO '90 ERV 1307.08 1497.72 948.59 1163.17 N/A N/A
ANNUAL ADMIN CHARGE 3.00 3.00 5.01 5.01 N/A N/A
'89 TO '90 ERV LESS ADMIN CHG 1304.08 1494.72 943.58 1158.16 N/A N/A
'90(OR INCEPT) TO '91 ROR 8.99% 28.18% 10.07% 14.73% N/A N/A
'90 TO '91 ERV 1421.31 1915.98 1038.60 1328.77 N/A N/A
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00 N/A N/A
'90 TO '91 ERV LESS ADMIN CHG 1418.31 1912.98 1035.60 1325.77 N/A N/A
'91(OR INCEPT) TO '92 ROR 6.03% 5.85% -4.57% 4.58% N/A N/A
'91 TO '92 ERV 1503.77 2024.95 988.25 1386.56 N/A N/A
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00 N/A N/A
'91 TO '92 ERV LESS ADMIN CHG 1500.77 2021.95 985.25 1383.56 N/A N/A
'92(OR INCEPT) TO '93 ROR 23.67% 8.37% 41.45% 11.23% N/A N/A
'92 TO '93 ERV 1856.04 2191.10 1393.61 1538.89 N/A N/A
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00 N/A N/A
'92 TO '93 ERV LESS ADMIN CHG 1853.04 2188.10 1390.61 1535.89 N/A N/A
'93(OR INCEPT) TO '94 ROR -5.43% -0.19% -6.02% -6.29% N/A N/A
'93 TO '94 ERV 1752.39 2183.94 1306.92 1439.21 N/A N/A
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00 N/A N/A
'93 TO '94 ERV LESS ADMIN CHG 1749.39 2180.94 1303.92 1436.21 N/A N/A
-----------------
'94(OR INCEPT) TO '95 ROR 25.42% 35.45% 14.51% 18.06% 23.43% 18.78%* These amounts are used for the
----------------- Prudential Jennison and Small
Capitalization Stock portfolios
because these amounts are not
annualized. Since these two
portfolios have been in existence
for less than one year, annualizing
the rates of return would
represent predicting future
returns, which is not allowable.

'94 TO '95 ERV 2194.09 2954.01 1493.13 1695.61 1234.32 1187.84
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00 2.06 2.06
'94 TO '95 ERV LESS ADMIN CHG 2191.09 2951.01 1490.13 1692.61 1232.26 1185.78

ANNUALIZED ROR BEFORE LOAD 10.78% 14.11% 6.17% 8.21% 36.70% 29.06%

AMT SUBJ TO LOAD IF + RETURN 780.89 704.90 850.99 830.74 876.77 881.42
AMT SUBJ TO LOAD IF - RETURN 1971.98 2655.91 1341.12 1523.35 1109.04 1067.20
AMT SUBJ TO LOAD 780.89 704.90 850.99 830.74 876.77 881.42
10TH (OR INCEPTION) SALE CHARGE 1.00% 0.00% 2.00% 2.00% 8.00% 8.00%
AMT OF LOAD 7.81 0.00 17.02 16.61 70.14 70.51
ERV LESS LOAD 2183.28 2951.01 1473.11 1676.00 1162.12 1115.27

ANN.10YR RET W/LOAD AND ADM CHG 10.73% 14.11% 5.98% 8.05% 25.22% 17.74%

</TABLE>

C-15
<PAGE>

TABLE 3 - CUMULATIVE TOTAL - FN VQVIPR4Q.wk4

A B C D D=(A/D)-1 E=(B/D)-1 F=(C/D)-1
5YR SINCE INCPT 10 YR 5YR ROR SINCPT ROR 10 YR
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
DIBOND 1,495.19 2,844.90 2,131.22 1,000.00 49.52% 184.49% 113.12%
HIYLD 2,083.62 1,825.07 N/A 1,000.00 108.36% 82.51% N/A
GVTINC 1,459.09 1,692.61 N/A 1,000.00 45.91% 69.26% N/A
EQUITY 2,207.87 4,744.99 3,475.32 1,000.00 120.79% 374.50% 247.53%
STIX 1,967.61 2,951.01 N/A 1,000.00 96.76% 195.10% N/A
EQINC 1,977.78 2,499.86 N/A 1,000.00 97.78% 149.99% N/A
NATR 1,675.65 2,191.09 N/A 1,000.00 67.57% 119.11% N/A
GLOBAL 1,580.34 1,490.13 N/A 1,000.00 58.03% 49.01% N/A
CONSBL 1,545.75 2,998.57 2,271.19 1,000.00 54.58% 199.86% 127.12%
FLXMGD 1,748.06 3,393.61 2,591.81 1,000.00 74.81% 239.36% 159.18%
PRUJEN N/A 1,232.26 N/A 1,000.00 N/A 23.23% N/A
SMCAP N/A 1,185.78 N/A 1,000.00 N/A 18.58% N/A

</TABLE>

C-16

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<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
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</TABLE>