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

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

Previous: PRUCO LIFE INSURANCE CO SINGLE PREMIUM VARIABLE LIFE ACCOUNT, 485BPOS, 1996-04-25

Next: ALPNET INC, 8-K, 1996-04-25

AS FILED WITH THE SEC ON _____________. REGISTRATION NO. 2-81318

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. 23 [X]
AND

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]

AMENDMENT NO. 28 [X]

(Check appropriate box or boxes)

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

THE PRUDENTIAL QUALIFIED 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 Contract--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>

CROSS REFERENCE SHEET
(AS REQUIRED BY RULE 495(a) UNDER THE 1933 ACT)
<TABLE>
<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 Qualified Individual Variable Contract
Account, and The Prudential Series Fund, Inc.; The
Fixed Rate Option

6. Deductions and Expenses.................................... Brief Description of the Contract; Charges, Fees and
Deductions; Differences Under the WVQ-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; Retirement Arrangements Using
the Contracts; Differences Under the WVQ-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 WVQ-83 Contract
Part B: Item 22, Determination of Subaccount Unit
Values and of the Amount of Monthly Variable
Annuity Payments

9. Death Benefit.............................................. Death Benefit; Effecting an Annuity; Retirement
Arrangements Using the Contracts; Differences Under
the WVQ-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
Owner's Contract Fund

11. Redemptions................................................ Brief Description of the Contract; Short-Term
Cancellation Right or "Free Look"; Withdrawals;
Charges, Fees and Deductions; Differences Under the
WVQ-83 Contract; Effecting an Annuity

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

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

14. Table of Contents of the Statement of

</TABLE>

<PAGE>

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

PART B
Additional Information..................................... Additional Information

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

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

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

23. Financial Statements....................................... Financial Statements of The Prudential Qualified
Individual Variable Contract Account; Consolidated
Financial Statements of The Prudential Insurance
Company of America and Subsidiaries
</TABLE>

PART C

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

<PAGE>

PART A

INFORMATION REQUIRED IN A PROSPECTUS

<PAGE>

PROSPECTUS

May 1, 1996

INDIVIDUAL VARIABLE ANNUITY CONTRACTS

THE PRUDENTIAL QUALIFIED INDIVIDUAL VARIABLE CONTRACT ACCOUNT

This prospectus describes Individual Variable Annuity Contracts (the "Contract")
issued by The Prudential Insurance Company of America ("The Prudential"). The
Contracts are designed for use in connection with retirement arrangements that
qualify for federal tax benefits under Sections 401, 403(a), 403(b), 408 or 457
of the Internal Revenue Code.

Purchase payments made through payroll deductions or similar arrangements with
an employer must be at least $300 during any 12-month period. Any other purchase
payment must be at least $50 ($100 or $300 under a certain form of the
Contract). Your accumulated purchase payments will be allocated as you direct in
one or both of two ways: 1) in one or more of thirteen subaccounts of The
Prudential Qualified Individual Variable Contract Account (the "Account"); and
2) under a FIXED-RATE 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. This prospectus describes the
Contract generally and The Prudential Qualified 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 28 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.

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.
QVIP-1 Ed 5-96, Catalog #64696C4

<PAGE>

PROSPECTUS CONTENTS

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

BRIEF DESCRIPTION OF THE CONTRACT........................................................................................... 2
THE PRUDENTIAL QUALIFIED 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 QUALIFIED INDIVIDUAL VARIABLE
CONTRACT ACCOUNT, AND THE PRUDENTIAL SERIES FUND, INC.................................................................... 11
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA.............................................................................. 11
THE PRUDENTIAL QUALIFIED INDIVIDUAL VARIABLE CONTRACT ACCOUNT............................................................ 11
THE PRUDENTIAL SERIES FUND, INC.......................................................................................... 11

DETAILED INFORMATION ABOUT THE CONTRACT..................................................................................... 12
REQUIREMENTS FOR ISSUANCE OF A CONTRACT.................................................................................. 12
SHORT-TERM CANCELLATION RIGHT OR "FREE LOOK"............................................................................. 12
ALLOCATION OF PURCHASE PAYMENTS.......................................................................................... 13
ADDITIONAL AMOUNTS....................................................................................................... 13
TRANSFERS................................................................................................................ 14
WITHDRAWALS.............................................................................................................. 14
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.......................................................................................................... 19
TAXES ON THE PRUDENTIAL.................................................................................................. 20
RETIREMENT ARRANGEMENTS USING THE CONTRACT............................................................................... 20
PLANS FOR SELF-EMPLOYED INDIVIDUALS...................................................................................... 21
IRAs..................................................................................................................... 21
SIMPLIFIED EMPLOYEE PENSION PLANS ("SEPs")............................................................................... 21
SECTION 403(B) ANNUITIES................................................................................................. 22
ELIGIBLE DEFERRED COMPENSATION PLANS OF STATE OR LOCAL GOVERNMENTS AND TAX EXEMPT ORGANIZATIONS.......................... 22
PENALTY FOR EARLY WITHDRAWALS............................................................................................ 22
ERISA DISCLOSURE......................................................................................................... 23

EFFECTING AN ANNUITY........................................................................................................ 23
ANNUITY OPTIONS UNDER THE VIP-86 CONTRACT................................................................................ 24
ANNUITY OPTIONS UNDER THE WVQ-83 AND QVIP-84 CONTRACTS................................................................... 24

OTHER INFORMATION........................................................................................................... 25
VOTING RIGHTS............................................................................................................ 25
SALE OF THE CONTRACT AND SALES COMMISSIONS............................................................................... 26
</TABLE>

<PAGE>

<TABLE>
<S> <C>
OWNERSHIP OF THE CONTRACT................................................................................................ 26
PERFORMANCE INFORMATION.................................................................................................. 27
REPORTS TO CONTRACT OWNERS............................................................................................... 27
SUBSTITUTION OF SERIES FUND SHARES....................................................................................... 27
DIFFERENCES UNDER THE WVQ-83 CONTRACT.................................................................................... 27
STATE REGULATION......................................................................................................... 28
LITIGATION............................................................................................................... 28
ADDITIONAL INFORMATION................................................................................................... 28

DIRECTORS AND OFFICERS...................................................................................................... 29
</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) and the
fixed-rate option (defined below).

CONTRACT OWNER--The person who purchases a Qualified 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 subaccounts, 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
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 the 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 QUALIFIED 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.

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.

<PAGE>

BRIEF DESCRIPTION OF THE CONTRACT

THE PRUDENTIAL QUALIFIED INDIVIDUAL VARIABLE ANNUITY CONTRACT

The Prudential Qualified Individual Variable Annuity Contract (the "Contract")
is designed for use in connection with various retirement arrangements entitled
to federal income tax benefits (qualified plans). These are (a) individual
retirement accounts ("IRAs") subject to Section 408 of the Internal Revenue Code
(the "Code"), (b) tax-deferred annuities ("TDA") subject to Section 403(b) of
the Code, for use by employees of public schools and certain tax-exempt
organizations, (c) eligible deferred compensation plans subject to Section 457
of the Code, and (d) pension and profit-sharing plans qualified under Sections
401(a) and 403(a) of the Code, including those established by self-employed
individuals for themselves and their employees. The Contracts provide a way of
accumulating your savings and investing them in one or more securities
portfolios with different investment objectives, and then using them to
supplement your monthly income after you retire. (The words "you" and "your" as
used in this prospectus refer to the owner of the Contract. See OWNERSHIP OF THE
CONTRACT, page 26. The word "we" refers to The Prudential Insurance Company of
America ("The Prudential").)

This prospectus describes three forms of the Contract. One form, which was first
offered in 1983, is called the WVQ-83 Contract (persons holding this Contract
can identify it by the WVQ-83 designation which appears in the lower left corner
of the Contract cover page). A second form, which is a revised edition of the
WVQ-83 Contract, is called the QVIP-84 Contract (persons holding this Contract
can identify it by the QVIP-84 designation which appears in the lower left
corner of the Contract cover page). The third form, which is a revised edition
of the QVIP-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, WVQ-83, and the later two forms are somewhat
extensive, a special section, DIFFERENCES UNDER THE WVQ-83 CONTRACT, is included
on page 27, 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. Purchase payments made through payroll
deduction or similar arrangements with an employer must be at a rate of at least
$300 during any 12-month period. Any other purchase payment must be at least
$50. (For VIP-86 Contracts issued prior to May 1, 1991, other purchase payments
must be at least $100; For VIP-86 Contracts issued on or after May 1, 1991,
other purchase payments must be at least $300.) See REQUIREMENTS FOR ISSUANCE OF
A CONTRACT, page 12.

Purchase payments are held in one or more subaccounts of The Prudential
Qualified Individual Variable Contract Account (the "Account") as you direct.
You may also 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. 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; 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

<PAGE>

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 or divide it among any of
the thirteen and the fixed-rate option. You may transfer funds from one
subaccount to another and to the fixed-rate option. There are limitations upon
transfers from the fixed-rate option to the subaccounts. (See TRANSFERS, page
14.) The amount credited to you in a subaccount will initially be equal to that
part of your purchase payment that you choose to invest in the subaccount.
Thereafter the value of your holdings in the subaccount, 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 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
and the fixed-rate option in the same proportions as the purchase payment to
which it is added. (See ADDITIONAL AMOUNTS, page 13). 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.

Unless restricted by the retirement arrangement in connection with which you
have purchased a Contract, you may withdraw all or part of your money at any
time. See WITHDRAWALS, page 14. Federal tax law imposes additional withdrawal
restrictions on tax-deferred annuity contracts subject to Section 403(b) of the
Code. See WITHDRAWALS, page 14, and SECTION 403(b) ANNUITIES, page 22. The
amount you request will be deducted from your Contract fund. If your Contract
remains in effect until you retire or until you reach the age of 59 1/2 under
certain retirement plans, 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 lives or for some other period you select. Other than an annuity
selected under the Supplemental Life Annuity Option, WVQ-83 and QVIP-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, and federal income taxes may be imposed upon
a withdrawal. The sales charge will be higher with respect to withdrawal of a
purchase payment if it is withdrawn in early years, soon after the purchase
payment was made. See SALES CHARGES ON WITHDRAWALS, page 16, FEDERAL TAX STATUS,
page 19, and EFFECTING AN ANNUITY, page 23.

CHARGES UNDER THE CONTRACTS

The charges made by The Prudential are intended to compensate it for paying the
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
subaccount). 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.

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 premium tax) is allocated

<PAGE>

to the subaccount designated by you or to the fixed-rate option if so directed.
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 the amount of each purchase payment withdrawn during the
same Contract year that it was made. Thereafter the charge decreases by 1% per
Contract year. See SALES CHARGES ON WITHDRAWALS, page 16. Purchase payments
withdrawn 8 or more Contract years after they were made are subject to no sales
charge at all. Withdrawals may be subject to tax consequences under the Code.
See WITHDRAWALS, page 14 and FEDERAL TAX STATUS, page 19.

On any Contract subject to a premium tax, 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 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 or to the
fixed-rated 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.

WVQ-83 Contract owners and QVIP-84 Contract owners may convert their Contract
fund into either a variable (if available) or fixed dollar annuity. 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
any partial transfers, 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 transfer effective date, 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 12.

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
<TABLE>
<S> <C>
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)
</TABLE>

Maximum Deferred Sales Load:

MAXIMUM DEFERRED SALES
CHARGE AS A PERCENTAGE OF
CONTRACT YEARS AFTER PAYMENT 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 Qualified 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 state premium taxes. 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 8, 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 investment;

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.

<TABLE>
<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 1.57
Total Contract Expenses ($1,035.25 x 1.83%) + $1.57 20.52

Contingent Deferred Sales Charge computation for withdrawal of entire fund:

Net Contract fund ($1,060.50 - $20.52) $ 1,039.98
10% Charge-free withdrawal 104.00
Initial investment 1,000.00*
Amount subject to withdrawal charge ($1,000 - $104.00) 896.00
Surrender charge @ 8% 71.68
Plus Total Contract Expenses (as calculated above) 20.52
------------
TOTAL CHARGES $ 92.20

</TABLE>

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

<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 $111 $134 $215
DIVERSIFIED BOND PORTFOLIO................................... $ 90 $111 $134 $215
GOVERNMENT INCOME PORTFOLIO.................................. $ 90 $111 $135 $216
CONSERVATIVE BALANCED PORTFOLIO.............................. $ 92 $115 $142 $230
FLEXIBLE MANAGED PORTFOLIO .................................. $ 92 $117 $144 $235
HIGH YIELD BOND PORTFOLIO.................................... $ 92 $116 $143 $233
STOCK INDEX PORTFOLIO........................................ $ 90 $109 $131 $208
EQUITY INCOME PORTFOLIO...................................... $ 90 $110 $134 $213
EQUITY PORTFOLIO............................................. $ 91 $112 $136 $219
PRUDENTIAL JENNISON PORTFOLIO................................ $ 94 $122 $153 $252
SMALL CAPITALIZATION STOCK PORTFOLIO......................... $ 92 $116 $143 $232
GLOBAL PORTFOLIO............................................. $ 97 $130 $167 $281
NATURAL RESOURCES PORTFOLIO.................................. $ 91 $113 $137 $221
</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 $111 $134 $215
DIVERSIFIED BOND PORTFOLIO................................... $ 90 $111 $134 $215
GOVERNMENT INCOME PORTFOLIO.................................. $ 90 $111 $135 $216
CONSERVATIVE BALANCED PORTFOLIO.............................. $ 92 $115 $142 $230
FLEXIBLE MANAGED PORTFOLIO................................... $ 92 $117 $144 $235
HIGH YIELD BOND PORTFOLIO.................................... $ 92 $116 $143 $233
STOCK INDEX PORTFOLIO........................................ $ 90 $109 $131 $208
EQUITY INCOME PORTFOLIO...................................... $ 90 $110 $134 $213
EQUITY PORTFOLIO............................................. $ 91 $112 $136 $219
PRUDENTIAL JENNISON PORTFOLIO................................ $ 94 $122 $153 $252
SMALL CAPITALIZATION STOCK PORTFOLIO......................... $ 92 $116 $143 $232
GLOBAL PORTFOLIO............................................. $ 97 $130 $167 $281
NATURAL RESOURCES PORTFOLIO.................................. $ 91 $113 $137 $221
</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....................................... $ 19 $ 57 $ 99 $215
DIVERSIFIED BOND PORTFOLIO................................... $ 19 $ 57 $ 99 $215
GOVERNMENT INCOME PORTFOLIO.................................. $ 19 $ 58 $ 99 $216
CONSERVATIVE BALANCED PORTFOLIO.............................. $ 20 $ 62 $106 $230
FLEXIBLE MANAGED PORTFOLIO................................... $ 20 $ 63 $109 $235
HIGH YIELD BOND PORTFOLIO.................................... $ 20 $ 63 $108 $233
STOCK INDEX PORTFOLIO........................................ $ 18 $ 56 $ 96 $208
EQUITY INCOME PORTFOLIO...................................... $ 18 $ 57 $ 98 $213
EQUITY PORTFOLIO............................................. $ 19 $ 59 $101 $219
PRUDENTIAL JENNISON PORTFOLIO................................ $ 22 $ 68 $117 $252
SMALL CAPITALIZATION STOCK PORTFOLIO......................... $ 20 $ 62 $107 $232
GLOBAL PORTFOLIO............................................ $ 25 $ 77 $131 $281
NATURAL RESOURCES PORTFOLIO.................................. $ 19 $ 59 $102 $221
</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, $235 at the end of 10 years equals
$23.50 per year, or approximately 2.4% of $1,000.

<PAGE>

<TABLE>
ACCUMULATION UNIT VALUES
THE PRUDENTIAL QUALIFIED INDIVIDUAL VARIABLE CONTRACT ACCOUNT
(Condensed Financial Information)
<CAPTION>
SUBACCOUNTS
---------------------------------------------------------------
Money Market
---------------------------------------------------------------
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 .............. $ 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 ... 51,330,984 43,401,237 42,593,573 51,724,305 51,946,977

<CAPTION>
SUBACCOUNTS
---------------------------------------------------------------
Money Market
---------------------------------------------------------------
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 ... 47,904,119 33,934,283 22,782,591 14,141,148 5,639,533

<CAPTION>
Diversified Bond
---------------------------------------------------------------
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 .............. $ 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 ... 38,379,871 39,963,983 41,705,404 34,565,884 26,914,460

<CAPTION>
Diversified Bond
---------------------------------------------------------------
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 ... 23,633,524 22,074,086 19,475,497 17,183,479 13,568,527

<CAPTION>
Government Income
---------------------------------------------------------------
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 .............. $ 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 ... 55,130,988 64,574,144 66,529,517 41,061,477 10,193,396

<CAPTION>
Government Income
------------------------
01/01/90 05/01/89*
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 ... 3,891,299 1,369,956

<CAPTION>
Conservative Balanced
----------------------------------------------------------------
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 .............. $ 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 ... 272,339,087 288,743,247 254,782,768 205,054,881 162,911,208

<CAPTION>
Conservative Balanced
----------------------------------------------------------------

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 ... 149,027,248 140,207,386 137,719,157 144,419,333 69,472,526
</TABLE>

*Commencement of Business

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

<PAGE>

<TABLE>
ACCUMULATION UNIT VALUES
THE PRUDENTIAL QUALIFIED INDIVIDUAL VARIABLE CONTRACT ACCOUNT
(Condensed Financial Information) (Continued)

<CAPTION>
SUBACCOUNTS
---------------------------------------------------------------
Flexible Managed
---------------------------------------------------------------
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 .............. $ 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 ... 249,259,101 265,104,376 245,194,868 214,343,734 191,130,125

<CAPTION>
SUBACCOUNTS
---------------------------------------------------------------
Flexible Managed
---------------------------------------------------------------
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 ... 190,783,212 186,540,213 192,115,646 209,973,940 116,287,355

<CAPTION>
High Yield Bond
---------------------------------------------------------------
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 .............. $ 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 ... 29,634,193 29,220,246 26,485,302 16,592,795 10,973,632

<CAPTION>
High Yield Bond
------------------------------------------------
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 ... 10,683,985 13,396,197 10,451,423 3,209,882

<CAPTION>
Stock Index
---------------------------------------------------------------
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 .............. $ 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 ... 69,315,117 62,281,407 60,084,614 44,559,636 25,578,770

<CAPTION>
Stock Index
------------------------------------------------
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 ... 16,843,644 9,249,076 2,628,467 123,844

<CAPTION>
Equity Income
--------------------------------------------------------------
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 .............. $ 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 ... 63,810,012 56,103,455 37,355,905 18,299,120 9,795,017

<CAPTION>
Equity Income
------------------------------------
01/01/90 01/01/89 02/19/88*
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 ... 7,313,593 4,663,452 1,002,158
</TABLE>

*Commencement of Business

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

<PAGE>

<TABLE>

ACCUMULATION UNIT VALUES
THE PRUDENTIAL QUALIFIED INDIVIDUAL VARIABLE CONTRACT ACCOUNT
(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 ... 134,801,790 121,654,470 102,491,968 80,457,602 67,197,756

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 ... 61,186,048 57,285,028 56,763,669 61,958,264 33,900,045

<CAPTION>
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 ... 5,067,514

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 ... 3,599,798

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 .............. 44,920,771 43,407,964 9,912,122 3,274,619 2,255,700 1,542,929 349,391

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 . 23,280,453 22,768,479 14,307,513 10,080,734 9,150,881 8,875,236 2,829,046 820,249

*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 QUALIFIED INDIVIDUAL
VARIABLE CONTRACT ACCOUNT, AND THE
PRUDENTIAL SERIES FUND, INC.

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 QUALIFIED INDIVIDUAL VARIABLE CONTRACT ACCOUNT

The Prudential Qualified 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 corporation 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.

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.

<PAGE>

- --------------------------------------------------------------------------
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.

DETAILED INFORMATION ABOUT THE CONTRACT

REQUIREMENTS FOR ISSUANCE OF A CONTRACT

The Contract requires purchase payments made, through payroll deduction or
similar arrangements with an employer, at a rate of at least $300 during any
12-month period. Any other purchase payment must be at least $50 ($100 under
VIP-86 Contracts). The Contract may generally be issued on proposed annuitants
below the age of 69. Higher issue ages may apply if the Minimum Distribution
Option is selected at issue or if the prospective owner provides documentation
of other appropriate IRS election. The MINIMUM DISTRIBUTION OPTION is described
in further detail on page 22. 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. 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
generally will not accept purchase payments on or after the annuitants's 69th
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

<PAGE>

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 and between the 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 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. 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 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 Account and 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 state or local premium taxes. 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.

<PAGE>

TRANSFERS

You may transfer the portions of your Contract fund allocated to any subaccount
to any of the other subaccounts or to the fixed-rate option without charge.
Transfers must be in amounts of $300 or more, or the total amount in the
subaccount, if less than $300, 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. A Contract owner may transfer amounts by proper written notice
to a Prudential Home Office, or by telephone unless the Contract owner asks that
transfers by telephone not be made.

The Prudential has adopted procedures designed to ensure that requests by
telephone are genuine and will require appropriate identification for that
purpose. The Prudential will not be held 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. 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 transfer
effective date, 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 subaccounts 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.

WITHDRAWALS

Unless restricted by the retirement arrangement under which you are covered, you
may at any time withdraw all or part 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. In addition, there are certain
restrictions on the withdrawal of salary reduction contributions and earnings
invested in annuity contracts subject to Section 403(b) of the Internal Revenue
Code. Under such contracts, withdrawals may be made prior to attaining age 59
1/2 in the event of severance of employment, death, total and permanent
disability and, in limited circumstances, hardship (See SECTION 403(b)
ANNUITIES, page 22). Amounts held under TDA contracts as of December 31, 1988
are exempt from these restrictions. The withdrawal restrictions do not apply to
transfers among the available investment options and do not apply to the direct
transfer of all or part of your interest in the Contract to a Section 403(b)
tax-deferred annuity contract of another insurance company or to a mutual fund
custodial account under Section 403(b)(7). 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).

A withdrawal will generally have federal income tax consequences, which could
include tax penalties. You should check the terms of your retirement plan and
consult with a tax advisor before making a withdrawal. See FEDERAL TAX STATUS,
page 19.

Under certain types of retirement arrangements, the Retirement Equity Act of
1984 provides that, in the case of a married Participant, a withdrawal request
must include the consent of the Participant's spouse. This consent must contain
the Participant's signature and the notarized or properly witnessed signature of
the Participant's

<PAGE>

spouse. These spousal consent requirements were effective beginning January 1,
1985 and apply to married Participants in most qualified pension plans,
including plans for self-employed individuals, and those Section 403(b)
annuities which are considered employee pension benefit plans under the Employee
Retirement Income Security Act of 1974 (ERISA).

DEATH BENEFIT

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

Subject to the spousal consent rules discussed in the following paragraph,
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 WVQ-83 Contract, the minimum amount payable to the
beneficiary is determined in a different manner. See item 2 under DIFFERENCES
UNDER THE WVQ-83 CONTRACT, page 27.) 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 23.

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

VALUATION OF CONTRACT OWNER'S CONTRACT FUND

The value of your Contract fund is the sum of your interests in your Variable
Account and in the fixed-rate option. The value of your Variable Account is the
sum of your separate interests in each subaccount in which you have invested.
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
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

<PAGE>

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.

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
subaccount or to one or more subaccounts and to the fixed-rate option, the
charge will be divided on a pro rata basis, according to the value held in each
subaccount 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

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 0.5% 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 tax imposed on purchase payments will not be made,
however, except to the extent that the premium tax 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 will be treated for the
purpose of determining sales charge as a withdrawal of investment income, until
you have withdrawn an amount equal to your investment income. There is no sales
charge on withdrawals 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 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 that date. (Under the
WVQ-83 Contract, purchase payments, rather than investment income, are deemed
removed first under a withdrawal. Generally, sales charges on withdrawals under
the QVIP-84 Contract and the VIP-86 Contract as described in this section will
be less than under the WVQ-83 Contract because investment income is deemed

<PAGE>

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 QVIP-84 Contract and the VIP-86 Contract result in lower charges. For a
more detailed description of sales charges on withdrawals under the WVQ-83
Contract, see item 1 under DIFFERENCES UNDER THE WVQ-83 CONTRACT, page 27.)

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, valued as of the
date of 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 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 on the date
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
May 1, 1993. 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 next
Contract year after it was made is 7% and continues to decrease by 1% per year
in accordance with the following table:

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------------------------------------------
(a) Subject to 10% free withdrawal described above.
- --------------------------------------------------------------------------------------------------------------------
</TABLE>

The sales charge percentages described in the above table will be subject to
reduction for purposes of complying with state non-forfeiture law.

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 all subaccounts in which you have an
interest and the fixed-rate option if a portion of your Contract fund is
allocated to that option, in the same proportions as the value of your interest
in each subaccount 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 24), 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.

<PAGE>

Under the QVIP-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 WVQ-83 AND QVIP-84 CONTRACTS, page 24), there will be no sales charge
deducted. If an annuity is effected under one of the other annuity options under
the QVIP-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 WVQ-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 WVQ-83 AND QVIP-84 CONTRACTS, page 24), there will be no sales charge
deducted. If an annuity is effected under one of the other annuity options under
the WVQ-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 23.

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 eight 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, 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.

<PAGE>

5. CHARGE FOR ASSUMING MORTALITY AND EXPENSE RISKS

A deduction is made daily from each subaccount at an annual rate of up to 1.2%
of the assets held in the subaccount. 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 23) 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 to the extent to which deferred sales charges cover sales
expenses under the Contracts.

6. EXPENSES INCURRED BY THE SERIES FUND

The charges and expenses of the Series Fund, net of reimbursements, are
indirectly borne by the Contract owners. Investment management fees for the
available Series Fund portfolios are briefly described under THE PRUDENTIAL
SERIES FUND, INC. on page 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.

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 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-rated option are subject to strict limits. See
TRANSFERS, page 14.

FEDERAL TAX STATUS

No tax is payable by any Contract owner as a result of any increase in the value
of his or her Contract fund until money is received by him or her, either in the
form of a withdrawal or an annuity. It is important, however, to consider how
amounts that are withdrawn or received as annuity payments will be taxed. The
following discussion of these points 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 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

<PAGE>

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.

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. Under the current provisions
of the Code, The Prudential does not expect to incur federal income taxes on
earnings of the Account to the extent the earnings are credited under the
Contract. Based on this, no charge is being made currently against the Account
for company federal income taxes. 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.

RETIREMENT ARRANGEMENTS USING THE CONTRACT

The provisions of the Code that apply to retirement programs are complex, and
the tax rules vary according to the type of plan and its terms and conditions.
Accordingly, this prospectus provides only general information about the types
of arrangements in connection with which the Contracts may be used. You should
consult a qualified tax advisor before purchasing a Contract, particularly if
you contemplate making withdrawals from your Contract fund before annuity
payments commence. Withdrawals may be subject to income tax consequences,
including tax penalties.

In general, assuming that you adhere to the requirements and limitations of the
Code provisions applicable to the type of retirement arrangement in which you
are participating, purchase payments (other than after-tax employee payments)
under the Contract will be deductible (or not includible in your income) up to
certain amounts each year. Under the retirement programs with which the
Contracts may be used, federal income tax currently is not imposed upon the
investment income and realized gains of the subaccounts in which your purchase
payments have been invested until a distribution is received. When a
distribution is received, either as a lump sum or an annuity, all or a portion
of the distribution is normally taxable as ordinary income. In some cases, the
tax on lump-sum distributions may be limited by a special income-averaging rule.

Unless you elect to the contrary, any amounts that are received under your
Contract (except for Contracts issued in connection with plans that are subject
to Section 457 of the Code--see ELIGIBLE DEFERRED COMPENSATION PLANS OF STATE
OR LOCAL GOVERNMENTS AND TAX EXEMPT ORGANIZATIONS, page 22) that The Prudential
reasonably believes are includible in gross income for tax purposes will be
subject to withholding to meet federal income tax obligations. Certain
distributions from qualified retirement plans and 403(b) annuities will be
subject to mandatory 20% withholding unless the distribution is an eligible
rollover distribution that is "directly" rolled over into another qualified
plan, 403(b) annuity or IRA. The rate of withholding on periodic annuity
payments where mandatory withholding is not required will be determined on the
basis of the withholding certificate you may file with The Prudential. For
payments not subject to mandatory withholding, if you do not file such a
certificate and you will be receiving periodic annuity payments, you shall be
treated, for purposes of determining your withholding rate, as a married person
with three exemptions; the rate of withholding on all other payments under your
Contract, such as withdrawals, will be 10%. Thus, in the absence of an election
by you that The Prudential should not do so, it will withhold from every
withdrawal or annuity payment the appropriate percentage of the amount of the
payment that The Prudential reasonably believes is includible in gross income.
The Prudential will provide forms and instructions concerning the right to elect
that no amount be withheld from payments. Generally there will be no withholding
for taxes until payments are actually received under your Contract.

Recipients, including those who have elected out of withholding, must supply
their Taxpayer Identification Number (Social Security Number) to payers of
distributions for tax reporting purposes. Failure to furnish this number when
required may result in the imposition of a tax penalty and will subject the
distribution to the withholding requirements of the law described above.

<PAGE>

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

PLANS FOR SELF-EMPLOYED INDIVIDUALS

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

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

IRAs

For persons who establish IRAs, the annual contribution limit is the lesser of
(1) $2,000, or (2) 100% of earned income. For an IRA arrangement that includes a
non-working spouse, total contributions may not exceed the lesser of (1) $2,250,
or (2) 100% of earned income. In this situation, separate contracts are
maintained for the husband and wife. Also, the contribution for either the
husband's or wife's IRA may not exceed $2,000. Generally, annuity payments may
not begin before attainment of age 59 1/2 (except in the event of total
disability or death), but distributions must begin by April 1 of the year
following attainment of age 70 1/2 and are subject to certain minimum
distribution requirements. Certain penalties may result if the contribution or
age limitations are exceeded.

Deductions for IRA contributions in those cases where an individual or an
individual's spouse is an active participant in an employer sponsored pension
plan, SEP or Section 403(b) annuity are limited to individuals whose adjusted
gross income is less than certain specified amounts.

For married individuals who file a joint tax return, a full deduction will be
available if adjusted gross income is $40,000 or less. For a single individual,
the limit is $25,000. Partial deductions for IRA contributions will be available
for married, joint filers who have adjusted gross income of more than $40,000
and less than $50,000 and single individuals whose adjusted gross income is less
than $35,000.

SIMPLIFIED EMPLOYEE PENSION PLANS ("SEPS")

Under this arrangement, annual employer contributions to an IRA established by
an employee are not includible in income up to the lesser of $30,000 or 15% of
the employee's earned income (excluding the employer's contribution to the SEP).
As with the regular IRA, generally, annuity payments to the Participant may not
begin before attainment of age 59 1/2 (except in the event of total disability
or death) but distributions must begin by April 1 of the year following
attainment of age 70 1/2 and are subject to certain minimum distribution
requirements. Certain penalties may result if the contribution or age
limitations are exceeded.

Certain SEP arrangements are permitted to allow employees to elect to reduce
their salaries by as much as $9,500 (in 1996, indexed annually) and have their
employer make contributions on their behalf to the SEP. These arrangements,
called salary reduction SEPs, are available only if the employer maintaining the
SEP has 25 or fewer employees and at least 50% of the eligible employees elect
to make salary reduction contributions. Other limitations may reduce the
permissible contribution level for highly compensated employees.

In accordance with Internal Revenue Service (the "IRS") Regulations, persons who
would become Participants under a Contract used with an IRA, including one
established under a SEP arrangement, are given disclosure material prepared by
The Prudential. The material includes this prospectus, a copy of the governing
instrument to be used in establishing an IRA, and a brochure containing
information about eligibility, contribution limits, tax consequences, and other
particulars concerning IRAs. The regulations require that such persons be given
seven days after making an initial contribution in which to affirm or reverse
their decision to participate. Therefore, within 7 days after sending the
initial contribution to The Prudential under a Contract used with an IRA, a
Participant may cancel his or her participation under that Contract by notifying
The Prudential in writing, and The Prudential will refund all of the
contributions under the Contract or, if greater, the amount credited to the
accumulation accounts under the Contract computed as of the business day that
The Prudential receives the notice of cancellation. This 7-day period may or may
not coincide with any part of the 10-day free look period described under
SHORT-TERM CANCELLATION RIGHT OR "FREE LOOK", page 12.

<PAGE>

SECTION 403(b) ANNUITIES

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

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

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

In imposing the restrictions on withdrawals as described above, The Prudential
is relying upon a non-action letter dated November 28, 1988 from the Chief of
the Office of Insurance Products and Legal Compliance of the Securities and
Exchange Commission to the American Council of Life Insurance.

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

ELIGIBLE DEFERRED COMPENSATION PLANS OF STATE OR LOCAL GOVERNMENTS AND
TAX EXEMPT ORGANIZATIONS

The amounts contributed under these plans and increments thereon are not taxable
as income until distributed or otherwise made available to the employee or other
beneficiary. If the requirements of Section 457 of the Code are not met,
however, employees may be required to include in gross income all or part of the
contributions and earnings thereon. The assets of deferred compensation plans
are part of the employer's general assets. Contributions generally may not
exceed the lesser of $7,500 or 33 1/3% of the employee's compensation.
Distributions must begin by April 1 following attainment of age 70 1/2. However,
for governmental or church plans distributions may be delayed until April 1 of
the calendar year following the calendar year the participant retires, if that
is later. Distributions are subject to special minimum distribution rules.

A distribution to a Participant covered under an eligible deferred compensation
plan subject to Section 457 of the Code is treated as payment of wages for
federal income tax purposes and thus subject to general withholding
requirements.

MINIMUM DISTRIBUTION OPTION

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

<PAGE>

PENALTY FOR EARLY WITHDRAWALS

A 10% penalty tax will generally apply to the taxable part of distributions
received from an IRA, SEP, Section 403(b) annuity, and qualified retirement
plans before age 59 1/2. Limited exceptions are provided, such as where amounts
are paid in the form of a qualified life annuity, upon death of the employee or
in certain instances disability or upon separation from service on or after the
attainment of age 55.

ERISA DISCLOSURE

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

Administrative exemptions issued by the IRS and the Department of Labor under
ERISA permit transactions between insurance agents and qualified pension and
profit sharing plans under sections 401(a) and 403(a) of the Code and with SEP
IRAs. To be able to rely on the exemption certain information must be disclosed
to the plan fiduciary. The information that must be disclosed includes the
relationship between the agent and the insurer, any charges, fees, discounts,
penalties or adjustments that may be imposed in connection with the purchase,
holding, exchange or termination of the Contract, as well as the commissions
received by the agent. Information about any applicable charges, fees,
discounts, penalties or adjustments may be found under CHARGES, FEES AND
DEDUCTIONS, page 16. Information about sales representatives and commissions may
be found under SALE OF THE CONTRACT AND SALES COMMISSIONS, page 26. In addition
to disclosure, other conditions apply to the use of the exemption. For example,
a plan fiduciary may not be a partner or employee of the Prudential
representative making the sale. The fiduciary must not be a relative of the
representative (including spouse, direct descendant, spouse of a direct
descendant, ancestor, brother, sister, spouse of a brother or sister). The
representative may not be an employee, officer, director or partner of either
the independent fiduciary or the employer establishing the plan. No relative of
the representative may: (1) control, directly or indirectly, the corporation
establishing or maintaining the plan; (2) be either a partner with a 10% or more
interest in the partnership or the sole proprietor establishing or maintaining
the plan; or (3) be an owner of a 5% or more interest in a Subchapter S
Corporation establishing or maintaining the plan. In addition, no affiliate
(including relatives) of the representative may be a trustee, administrator or a
fiduciary with written authority to acquire, manage or dispose of the assets of
the plan.

EFFECTING AN ANNUITY

Subject to the provisions of the retirement plan that covers you, you may at any
time on or before the first day of the calendar month coinciding with or
otherwise next following your 75th birthday (80th birthday under the VIP-86
Contract) convert your Contract fund into a fixed dollar annuity payable to the
annuitant under one or more of the forms of annuity described below. At The
Prudential's discretion, this conversion may take place at a later date. Except
for an annuity selected under the Supplemental Life Annuity Option, WVQ-83 and
QVIP-84 Contract owners may select a variable annuity instead of or in addition
to a fixed dollar annuity. The Prudential will then make monthly payments to the
annuitant on the first day of each month for a period determined by the form[s]
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 retirement plan
permits. 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, the amount
also varies with the age of the annuitant (and spouse, 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.

In order to permit employers to comply with a decision rendered by the Supreme
Court of the United States (Arizona Governing Committee vs. Norris), the annuity
purchase rates for Contracts issued on and after August 1, 1983 do not vary with
the sex of the annuitant.

<PAGE>

Under certain types of retirement arrangements, the Retirement Equity Act of
1984 provides that, in the case of a married Participant, the election of an
annuity payout which is not a joint and 50% survivor annuity payable to the
spouse must include the consent of the Participant's spouse. This consent must
contain the Participant's signature and the notarized or properly witnessed
signature of the Participant's spouse. These spousal consent requirements were
generally effective beginning January 1, 1985 and apply to married Participants
in most qualified pension plans including plans in which self-employed
individuals participate, and those Section 403(b) annuities which are considered
employee pension benefit plans under ERISA.

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
investment experience ceases when the annuity is effected, and the amount of
each monthly payment does not change.

In electing to have an annuity purchased, you may select from the forms of
annuity described below, subject to the retirement arrangement that covers you.
Under each, annuity payments will be monthly installments of a guaranteed
amount. Unless applicable law states otherwise, if you do not select an annuity
option to take effect by the annuity date stated in your Contract (which will
not be later than the annuitant's 80th 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.

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 WVQ-83 AND QVIP-84 CONTRACTS

If you own a WVQ-83 Contract or a QVIP-84 Contract, the following provisions
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; and (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 distribution as you
used before selecting an annuity. However, the initial minimum monthly payment
amount will be applicable to each payee, each annuity, and each subaccount
selected.

If you are covered under a tax-deferred annuity subject to Section 403(b) of the
Code and do not elect to effect an annuity before the date described in the
endorsement to your Contract with respect to pre-1987 benefit accruals, a
variable life annuity with 120 payments certain (see below) will be purchased
for you on the first day of the month following such date. If any tax-deferred
annuity Contract owner (with respect to post-1986 benefit accruals) or any other
Contract owner has not elected to purchase an annuity before the end of his tax
year in which such an election is required by or for the retirement arrangement
under which he is covered, a variable life annuity with 120 payments certain,
payable as described in item 2 below, will be purchased for him on the first day
of the month preceding the end of such tax year, unless a joint and survivor
annuity pay-out is required by ERISA, in which case a variable joint and
survivor annuity, payable as described in item 3 below, will be purchased for
him.

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. However, as described under TRANSFERS, page 14 , if a variable annuity
is selected, the annuitant may transfer the annuity funds between subaccounts up
to four times each Contract year.

<PAGE>

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 of at least $20 on the
conversion date.

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
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[s] 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. 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 the annuitant with a variable life annuity with
120 payments certain.

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, his or
her total payments will probably be substantially less than the value of your
Variable Account when annuity payments first began, and he or she could receive
as little as one payment 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 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, 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 ANNUITY. Payments will be made to the annuitant monthly
during his or her lifetime and, if the annuitant's spouse is living at the time
of the annuitant's death, to the spouse until his or her death. The monthly
payments to the spouse 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
under any applicable law or regulation or by the terms of a plan, including
joint and 50% spouse survivor annuity. 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 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 24.

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

<PAGE>

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. WVQ-83 and QVIP-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.

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 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 held by another person
who need not be the person who is to receive annuity payments. This is
frequently the case with respect to Contracts issued in connection with
qualified retirement plans and eligible deferred compensation plans. 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.
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. 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 without The Prudential's consent.

<PAGE>

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 subaccounts
over a specified seven-day period. Effective yield is calculated in a similar
manner except that income earned is assumed to be reinvested.

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

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

REPORTS TO CONTRACT OWNERS

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

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.

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 WVQ-83 CONTRACT

As stated in the section entitled THE PRUDENTIAL QUALIFIED INDIVIDUAL VARIABLE
ANNUITY CONTRACT, page 2, the descriptions of The Prudential Qualified
Individual Variable Annuity 2 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 QVIP-84 Contract and the WVQ-83 Contract.
Although differences among the three forms of Contract have been described,
additional differences between the earlier WVQ-83 Contract and the two later
forms of the Contract are set forth below.

1. SALES CHARGES ON WITHDRAWALS. . .Under the WVQ-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.

2. DETERMINATION OF MINIMUM AMOUNT PAYABLE TO A BENEFICIARY. . .Under the
WVQ-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 payments you have
made, less any withdrawals (i.e., there is no proportional reduction
of the minimum amount as is the case under the QVIP-84 Contract and
the VIP-86 Contract.)

<PAGE>

3. 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 WVQ-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 5.73 Subaccount Annuity Units."

4. DETERMINATION OF AMOUNT OF MONTHLY VARIABLE ANNUITY PAYMENTS. . .Under
the WVQ-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.

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

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

LITIGATION

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

ADDITIONAL INFORMATION

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

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

The Contents of the statement of additional information include:

OTHER INFORMATION CONCERNING THE ACCOUNT

A. EXPERTS
B. PRINCIPAL UNDERWRITER
C. PARTICIPATION IN DIVISIBLE SURPLUS
D. PERFORMANCE INFORMATION
E. FINANCIAL STATEMENTS

FINANCIAL STATEMENTS OF THE PRUDENTIAL QUALIFIED 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.

P. ROY VAGELOS, M.D., Director.--Former Chairman, President and Chief Executive
Officer, Merck & Co., Inc. Address: One Crossroads Drive, Bedminster, NJ 07921.

<PAGE>

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.

===========================================

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

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

<PAGE>

STATEMENT OF ADDITIONAL INFORMATION

May 1, 1996

INDIVIDUAL VARIABLE ANNUITY CONTRACTS
OF
THE PRUDENTIAL QUALIFIED INDIVIDUAL VARIABLE CONTRACT
ACCOUNT

The Individual Variable Annuity Contract (the "Contract") of The Prudential
Qualified Individual Variable Contract Account (the "Account") is a variable
annuity contract issued by The Prudential Insurance Company of America ("The
Prudential"). The Contracts are designed for use in connection with retirement
arrangements that qualify for federal tax benefits under Sections 401, 403(a),
403(b), 408 or 457 of the Internal Revenue Code. Purchase payments made through
payroll deduction or similar arrangements with an employer must be at least $300
during any 12-month period. Any other purchase payment must be at least $50
($100 or $300 under a certain form of the Contract).

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

QVIP-1B Ed 5-96
Catalog #64M100Y

<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 QUALIFIED 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>
TABLE 1
<CAPTION>
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>
TABLE 2
<CAPTION>
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>
TABLE 3
<CAPTION>
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 5/83 22.36 74.81 159.18 239.33
Managed
- -----------------------------------------------------------------------------------------------------------------------
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 NA 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>

FINANCIAL STATEMENTS OF
THE PRUDENTIAL QUALIFIED 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]........ $3,180,356,978 $ 99,657,190 $ 111,370,414 $ 655,087,434 $ 864,510,661
Receivable from Related Separate Account........ 319,050 0 0 0 64,082
-------------- -------------- -------------- -------------- --------------
Total Assets.................................. $3,180,676,028 $ 99,657,190 $ 111,370,414 $ 655,087,434 $ 864,574,743
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
NET ASSETS, representing:
Equity of Contract owners [Note 7].............. $3,175,102,622 $ 99,136,042 $ 111,245,976 $ 653,749,588 $ 864,562,668
Equity of annuitants [Note 7]................... 168,827 3,624 8,401 43,768 12,075
Equity of The Prudential Insurance Company of
America....................................... 5,404,579 517,524 116,037 1,294,078 0
-------------- -------------- -------------- -------------- --------------
$3,180,676,028 $ 99,657,190 $ 111,370,414 $ 655,087,434 $ 864,574,743
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
Accumulation units.............................. -- 51,330,984 38,379,871 134,801,790 249,259,101
</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................. $ 105,068,742 $ 5,089,893 $ 6,977,763 $ 12,353,949 $ 25,640,110

EXPENSES
Charges to Contract owners and annuitants for
assuming mortality risk and expense risk
[Note 3A]..................................... 34,363,019 1,070,351 1,207,330 6,693,354 9,502,745
-------------- -------------- -------------- -------------- --------------
NET INVESTMENT INCOME (LOSS)...................... 70,705,723 4,019,542 5,770,433 5,660,595 16,137,365
-------------- -------------- -------------- -------------- --------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Capital gains distributions received............ 99,254,485 0 242,076 22,789,371 36,063,887
Realized gain (loss) on shares redeemed
[average cost basis].......................... 10,628,560 0 (174,365) 368,111 6,195,722
Net unrealized gain on investments.............. 375,068,601 0 12,161,207 114,546,773 105,182,685
-------------- -------------- -------------- -------------- --------------
NET GAIN ON INVESTMENTS........................... 484,951,646 0 12,228,918 137,704,255 147,442,294
-------------- -------------- -------------- -------------- --------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS....................... $ 555,657,369 $ 4,019,542 $ 17,999,351 $ 143,364,850 $ 163,579,659
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A9 THROUGH A11.

<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]........ $ 837,817,022 $ 55,416,352 $ 167,287,974 $ 161,811,962 $ 51,170,210
Receivable from Related Separate Account........ 254,968 0 0 0 0
-------------- -------------- -------------- -------------- --------------
Total Assets.................................. $ 838,071,990 $ 55,416,352 $ 167,287,974 $ 161,811,962 $ 51,170,210
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
NET ASSETS, representing:
Equity of Contract owners [Note 7].............. $ 837,971,031 $ 55,266,881 $ 166,393,711 $ 161,443,159 $ 51,117,822
Equity of annuitants [Note 7]................... 100,959 0 0 0 0
Equity of The Prudential Insurance Company of
America....................................... 0 149,471 894,263 368,803 52,388
-------------- -------------- -------------- -------------- --------------
$ 838,071,990 $ 55,416,352 $ 167,287,974 $ 161,811,962 $ 51,170,210
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
Accumulation units.............................. 272,339,087 29,634,193 69,315,117 63,810,012 23,280,453

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]........ $ 68,985,291 $ 95,518,301 $ 7,130,216
Receivable from Related Separate Account........ 0 0 0
-------------- -------------- --------------
Total Assets.................................. $ 68,985,291 $ 95,518,301 $ 7,130,216
-------------- -------------- --------------
-------------- -------------- --------------
NET ASSETS, representing:
Equity of Contract owners [Note 7].............. $ 68,881,510 $ 94,742,052 $ 6,309,359
Equity of annuitants [Note 7]................... 0 0 0
Equity of The Prudential Insurance Company of
America....................................... 103,781 776,249 820,857
-------------- -------------- --------------
$ 68,985,291 $ 95,518,301 $ 7,130,216
-------------- -------------- --------------
-------------- -------------- --------------
Accumulation units.............................. 44,920,771 55,130,988 5,067,514
</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................. $ 33,197,112 $ 5,493,352 $ 3,049,883 $ 5,660,271 $ 592,277

EXPENSES
Charges to Contract owners and annuitants for
assuming mortality risk and expense risk
[Note 3A]..................................... 9,492,947 610,202 1,623,430 1,720,399 549,853
-------------- -------------- -------------- -------------- --------------
NET INVESTMENT INCOME (LOSS)...................... 23,704,165 4,883,150 1,426,453 3,939,872 42,424
-------------- -------------- -------------- -------------- --------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Capital gains distributions received............ 28,485,578 0 1,183,600 6,797,070 2,340,224
Realized gain (loss) on shares redeemed
[average cost basis].......................... 4,028,418 (84,773) 240,348 51,273 223,324
Net unrealized gain on investments.............. 61,407,690 2,837,430 37,706,707 15,057,038 7,780,040
-------------- -------------- -------------- -------------- --------------
NET GAIN ON INVESTMENTS........................... 93,921,686 2,752,657 39,130,655 21,905,381 10,343,588
-------------- -------------- -------------- -------------- --------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS....................... $ 117,625,851 $ 7,635,807 $ 40,557,108 $ 25,845,253 $ 10,386,012
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------

GOVERNMENT PRUDENTIAL
GLOBAL INCOME JENNISON*
-------------- -------------- --------------
<S> <C> <C> <C>
INVESTMENT INCOME
Dividend distributions received................. $ 1,040,557 $ 5,960,347 $ 298
EXPENSES
Charges to Contract owners and annuitants for
assuming mortality risk and expense risk
[Note 3A]..................................... 775,298 1,083,160 19,413
-------------- -------------- --------------
NET INVESTMENT INCOME (LOSS)...................... 265,259 4,877,187 (19,115)
-------------- -------------- --------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Capital gains distributions received............ 1,314,501 0 0
Realized gain (loss) on shares redeemed
[average cost basis].......................... 318,798 (546,907) 8,611
Net unrealized gain on investments.............. 7,108,435 10,935,446 214,307
-------------- -------------- --------------
NET GAIN ON INVESTMENTS........................... 8,741,734 10,388,539 222,918
-------------- -------------- --------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS....................... $ 9,006,993 $ 15,265,726 $ 203,803
-------------- -------------- --------------
-------------- -------------- --------------
*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]........ $ 4,593,951
Receivable from Related Separate Account........ 0
--------------
Total Assets.................................. $ 4,593,951
--------------
--------------
NET ASSETS, representing:
Equity of Contract owners [Note 7].............. $ 4,282,823
Equity of annuitants [Note 7]................... 0
Equity of The Prudential Insurance Company of
America....................................... 311,128
--------------
$ 4,593,951
--------------
--------------
Accumulation units.............................. 3,599,798
</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................. $ 12,930

EXPENSES
Charges to Contract owners and annuitants for
assuming mortality risk and expense risk
[Note 3A]..................................... 14,537
--------------
NET INVESTMENT INCOME (LOSS)...................... (1,607)
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Capital gains distributions received............ 38,178
Realized gain (loss) on shares redeemed
[average cost basis].......................... 0
Net unrealized gain on investments.............. 130,843
--------------
NET GAIN ON INVESTMENTS........................... 169,021
--------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS....................... $ 167,414
--------------
--------------
*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 QUALIFIED 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)..... $ 70,705,723 $ 55,100,006 $ 4,019,542 $ 2,155,306 $ 5,770,433 $ 5,198,978
Capital gains distributions
received....................... 99,254,485 55,419,944 0 0 242,076 229,053
Realized gain (loss) on shares
redeemed
[average cost basis]........... 10,628,560 19,404 0 0 (174,365) (145,067)
Net unrealized gain (loss) on
investments.................... 375,068,601 (168,633,384) 0 0 12,161,207 (9,927,185)
-------------- -------------- -------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS. 555,657,369 (58,094,030) 4,019,542 2,155,306 17,999,351 (4,644,221)
-------------- -------------- -------------- -------------- -------------- --------------

ACCUMULATION AND ANNUITY
UNIT TRANSACTIONS
Purchase payments and transfers
in............................. 540,352,605 740,447,234 73,921,488 57,809,334 16,368,770 18,199,978
Withdrawals and transfers out.... (534,392,345) (415,537,194) (58,958,696) (56,297,178) (20,074,676) (22,456,382)
Annuity benefit payments......... (30,967) (27,187) (533) (532) (1,026) (985)
-------------- -------------- -------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
ACCUMULATION AND ANNUITY UNIT
TRANSACTIONS..................... 5,929,293 324,882,853 14,962,259 1,511,624 (3,706,932) (4,257,389)
-------------- -------------- -------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM SURPLUS
TRANSFERS........................ (7,924,223) (4,931,491) (462,908) 403,300 (262,738) (771,003)
-------------- -------------- -------------- -------------- -------------- --------------

TOTAL INCREASE (DECREASE)
IN NET ASSETS.................... 553,662,439 261,857,332 18,518,893 4,070,230 14,029,681 (9,672,613)

NET ASSETS:
Beginning of year................ 2,627,013,589 2,365,156,257 81,138,297 77,068,067 97,340,733 107,013,346
-------------- -------------- -------------- -------------- -------------- --------------
End of year...................... $3,180,676,028 $2,627,013,589 $ 99,657,190 $ 81,138,297 $ 111,370,414 $ 97,340,733
-------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- --------------
</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)..... $ 5,660,595 $ 4,901,041 $ 16,137,365 $ 12,045,694
Capital gains distributions
received....................... 22,789,371 18,517,588 36,063,887 21,407,610
Realized gain (loss) on shares
redeemed
[average cost basis]........... 368,111 30,481 6,195,722 232,826
Net unrealized gain (loss) on
investments.................... 114,546,773 (16,721,695) 105,182,685 (65,983,052)
-------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS. 143,364,850 6,727,415 163,579,659 (32,296,922)
-------------- -------------- -------------- --------------

ACCUMULATION AND ANNUITY
UNIT TRANSACTIONS
Purchase payments and transfers
in............................. 129,737,331 125,377,593 79,232,575 142,992,769
Withdrawals and transfers out.... (73,861,984) (54,525,678) (127,262,514) (85,663,201)
Annuity benefit payments......... (15,321) (13,719) (1,667) 0
-------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
ACCUMULATION AND ANNUITY UNIT
TRANSACTIONS..................... 55,860,026 70,838,196 (48,031,606) 57,329,568
-------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM SURPLUS
TRANSFERS........................ (703,672) (882,006) (1,235,567) (2,651,796)
-------------- -------------- -------------- --------------

TOTAL INCREASE (DECREASE)
IN NET ASSETS.................... 198,521,204 76,683,605 114,312,486 22,380,850

NET ASSETS:
Beginning of year................ 456,566,230 379,882,625 750,262,257 727,881,407
-------------- -------------- -------------- --------------
End of year...................... $ 655,087,434 $ 456,566,230 $ 864,574,743 $ 750,262,257
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------

HIGH
CONSERVATIVE YIELD
BALANCED BOND
------------------------------ ------------------------------
1995 1994 1995 1994
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)..... $ 23,704,165 $ 17,597,114 $ 4,883,150 $ 4,234,928
Capital gains distributions
received....................... 28,485,578 8,172,721 0 35
Realized gain (loss) on shares
redeemed
[average cost basis]........... 4,028,418 98,624 (84,773) (76,583)
Net unrealized gain (loss) on
investments.................... 61,407,690 (41,558,685) 2,837,430 (6,103,640)
-------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS. 117,625,851 (15,690,226) 7,635,807 (1,945,260)
-------------- -------------- -------------- --------------
ACCUMULATION AND ANNUITY
UNIT TRANSACTIONS
Purchase payments and transfers
in............................. 92,079,777 188,471,399 13,313,880 17,792,032
Withdrawals and transfers out.... (137,846,442) (97,416,069) (12,564,152) (13,165,014)
Annuity benefit payments......... (12,420) (11,951) 0 0
-------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
ACCUMULATION AND ANNUITY UNIT
TRANSACTIONS...................... (45,779,085) 91,043,379 749,728 4,627,018
-------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM SURPLUS
TRANSFERS........................ (1,878,000) (2,305,353) 66,475 (612,764)
-------------- -------------- -------------- --------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS.................... 69,968,766 73,047,800 8,452,010 2,068,994
NET ASSETS:
Beginning of year................ 768,103,224 695,055,424 46,964,342 44,895,348
-------------- -------------- -------------- --------------
End of year...................... $ 838,071,990 $ 768,103,224 $ 55,416,352 $ 46,964,342
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
</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)..... $ 1,426,453 $ 1,368,945 $ 3,939,872 $ 2,792,568 $ 42,424 $ (46,954)
Capital gains distributions
received....................... 1,183,600 164,189 6,797,070 6,083,932 2,340,224 779,202
Realized gain (loss) on shares
redeemed [average cost basis].. 240,348 259,874 51,273 761 223,324 18,048
Net unrealized gain (loss) on
investments.................... 37,706,707 (1,916,111) 15,057,038 (9,002,731) 7,780,040 (2,969,198)
-------------- -------------- -------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
OPERATIONS....................... 40,557,108 (123,103) 25,845,253 (125,470) 10,386,012 (2,218,902)
-------------- -------------- -------------- -------------- -------------- --------------

ACCUMULATION AND ANNUITY
UNIT TRANSACTIONS
Purchase payments and transfers
in............................. 34,210,240 25,051,930 41,608,348 56,476,052 12,395,333 22,595,652
Withdrawals and transfers out.... (18,698,974) (21,235,055) (23,957,522) (16,677,253) (11,485,312) (6,958,109)
Annuity benefit payments......... 0 0 0 0 0 0
-------------- -------------- -------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
ACCUMULATION AND ANNUITY UNIT
TRANSACTIONS..................... 15,511,266 3,816,875 17,650,826 39,798,799 910,021 15,637,543
-------------- -------------- -------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM SURPLUS
TRANSFERS........................ 548,163 (371,895) (696,426) (632,229) (449,168) (79,910)
-------------- -------------- -------------- -------------- -------------- --------------

TOTAL INCREASE (DECREASE)
IN NET ASSETS.................... 56,616,537 3,321,877 42,799,653 39,041,100 10,846,865 13,338,731

NET ASSETS:
Beginning of year................ 110,671,437 107,349,560 119,012,309 79,971,209 40,323,345 26,984,614
-------------- -------------- -------------- -------------- -------------- --------------
End of year...................... $ 167,287,974 $ 110,671,437 $ 161,811,962 $ 119,012,309 $ 51,170,210 $ 40,323,345
-------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- --------------
</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)..... $ 265,259 $ (373,260) $ 4,877,187 $ 5,225,646 $ (19,115) $ (1,607)
Capital gains distributions
received....................... 1,314,501 65,614 0 0 0 38,178
Realized gain (loss) on shares
redeemed [average cost basis].. 318,798 0 (546,907) (399,560) 8,611 0
Net unrealized gain (loss) on
investments.................... 7,108,435 (2,777,408) 10,935,446 (11,673,679) 214,307 130,843
-------------- -------------- -------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS. 9,006,993 (3,085,054) 15,265,726 (6,847,593) 203,803 167,414
-------------- -------------- -------------- -------------- -------------- --------------

ACCUMULATION AND ANNUITY
UNIT TRANSACTIONS
Purchase payments and transfers
in............................. 23,881,641 57,303,177 11,950,990 28,377,318 7,033,968 4,618,264
Withdrawals and transfers out.... (21,970,300) (10,239,326) (26,293,040) (30,903,929) (915,504) (503,229)
Annuity benefit payments......... 0 0 0 0 0 0
-------------- -------------- -------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
ACCUMULATION AND ANNUITY UNIT
TRANSACTIONS..................... 1,911,341 47,063,851 (14,342,050) (2,526,611) 6,118,464 4,115,035
-------------- -------------- -------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM SURPLUS
TRANSFERS........................ (2,455,043) 1,994,463 (1,514,790) 977,702 807,949 311,502
-------------- -------------- -------------- -------------- -------------- --------------

TOTAL INCREASE (DECREASE)
IN NET ASSETS.................... 8,463,291 45,973,260 (591,114) (8,396,502) 7,130,216 4,593,951

NET ASSETS:
Beginning of year................ 60,522,000 14,548,740 96,109,415 104,505,917 0 0
-------------- -------------- -------------- -------------- -------------- --------------
End of year...................... $ 68,985,291 $ 60,522,000 $ 95,518,301 $ 96,109,415 $ 7,130,216 $ 4,593,951
-------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- --------------
*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 QUALIFIED INDIVIDUAL VARIABLE CONTRACT ACCOUNT
FOR THE YEARS ENDED DECEMBER 31, 1995 AND DECEMBER 31, 1994

NOTE 1: GENERAL

The Prudential Qualified 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 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: 9,965,719 9,844,359 25,549,581 48,406,695
Net asset value per share: $ 10.0000 $ 11.3131 $ 25.6399 $ 17.8593
Cost: $ 99,657,190 $ 106,886,456 $ 496,797,327 $ 736,139,489

PORTFOLIOS (CONTINUED)
---------------------------------------------------------------
HIGH
PORTFOLIO CONSERVATIVE YIELD STOCK EQUITY
INFORMATION BALANCED BOND INDEX INCOME
- -------------------------- --------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Number of shares: 54,727,948 7,104,296 8,382,812 9,944,869
Net asset value per share: $ 15.3088 $ 7.8004 $ 19.9561 $ 16.2709
Cost: $ 767,120,829 $ 57,651,251 $ 116,345,706 $ 148,779,200
</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: 2,962,645 4,441,152 8,150,784 568,290 388,219
Net asset value per share: $ 17.2718 $ 15.5332 $ 11.7189 $ 12.5468 $ 11.8334
Cost: $ 42,523,372 $ 62,581,256 $ 92,034,821 $ 6,915,909 $ 4,463,108
</TABLE>

NOTE 3: CHARGES AND EXPENSES

A. Mortality Risk and Expense Risk 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 Contract owners and annuitants held in
each subaccount.

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

<PAGE>

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 periods
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... 31,826,648 7,361,522 33,894,414 49,876,597 70,425,760 10,707,453
December 31, 1995... 39,175,756 6,142,542 30,526,847 26,139,155 33,004,183 7,351,005
</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... 14,230,847 26,616,384 12,248,633 40,822,550 18,961,045 - -
December 31, 1995... 15,512,909 18,166,692 6,973,561 18,902,073 7,868,823 5,825,763 4,040,018
</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... 31,018,983 9,102,943 14,731,913 29,967,089 36,465,282 7,972,510
December 31, 1995... 31,246,009 7,726,654 17,379,527 41,984,430 49,408,343 6,937,058
</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... 12,034,054 7,868,834 3,787,667 7,326,708 20,916,418 - -
December 31, 1995... 8,479,200 10,460,135 6,461,587 17,389,266 17,311,978 758,250 440,220
</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, 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, 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, 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, 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 Qualified 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
Qualified 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 Qualified 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 in 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 up to
1.2% annual charge for expense risks and mortality risks. (See CHARGES UNDER THE
CONTRACTS 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 WVQ-83 Contract and the
QVIP-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 up to 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 one 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 of 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 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 5.20 Subaccount Annuity Units. (Due to the fact that the Schedule of
Annuity Rates set forth in the WVQ-83 Contract differs from that set forth in
the QVIP-84 Contract, the preceding sentence, as it applies to the WVQ-83
Contract, is modified. See item 3 under DIFFERENCES UNDER THE WVQ-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 WVQ-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 4 under DIFFERENCES UNDER THE WVQ-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 value of the
assets in the subaccount increases, after deducting the up to 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.

<PAGE>

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 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>

QUALIFIED 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>

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS

(a) FINANCIAL STATEMENTS

(1) Financial Statements of The Prudential Qualified 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 Qualified 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) Qualified Individual Variable Annuity Contract (Form WVQ-83).
(Note 3)

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

(d) Endorsement WVQ 3 to the Contract (Forms WVQ-83, QVIP-84 and
VIP-86) for use in the TDA market. (Note 3)

(e) Endorsement WVQ 4 to the Contract (Forms WVQ-83, QVIP-84 and
VIP-86) for use in the CORP/HR10 Non-Trusteed markets. (Note 3)

(f) Endorsement WVQ5 to the Contract (Forms WVQ-83, QVIP-84 and
VIP-86) for use in the CORP/HR10 Money Purchase and Defined
Benefit plans. (Note 3)

(g) Texas ORP Supplement. (Note 3)

(h) Endorsement WVQ 7-83 to the Contract (Form WVQ-83) for use in New
Jersey issues. (Note 4)

(i) Special Page Six (WVQ-83) (OKLA) to the Contract (Form WVQ-83)
for use in Oklahoma. (Note 4)

(j) Special Page Six (WVQ-83) (CAL.) to the Contract (Form WVQ-83)
for use in California. (Note 4)

(k) Special Page 8 (WVQ-83) (N.Y.) to the Contract (Form WVQ-83) for
use in New York issues. (Note 5)

(l) Endorsement WVQ 8-83 to the Contract (Form WVQ-83) for use in
Tennessee issues. (Note 5)

(m) Disclosure Notice WVQ 9-83 to the Contract (Forms WVQ-83, QVIP-84
and VIP-86) for use in the IRA market. (Note 5)

(n) Endorsement for WVQ 10-83 to the Contract (Forms WVQ-83 and
QVIP-84) for use in Texas issues. (Note 5)

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

(p) Notice to the Contract (Forms WVQ-83 and QVIP-84) for use in
Virginia issues. (Note 5)

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

(r) Endorsement COMB 84889-83 to the Contract (Form WVQ-83) for use
in New York issues. (Note 5)

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

(t) Qualified Individual Variable Annuity Contract (Form QVIP-84).
(Note 7)

(u) Special Page One to the Contract (Form QVIP-84) for N.Y. issues.
(Note 7)

C-1

<PAGE>

(v) Special Page Seventeen (QVIP-84) (N.Y.) to the Contract (Form
QVIP-84) for N.Y. issues. (Note 7)

(w) Special Page One (QVIP-84 (OKLA) to the Contract (Form QVIP-84)
for use in Oklahoma issues. (Note 7)

(x) Special Page Sixteen (QVIP-84) (OKLA) to the Contract (Form
QVIP-84) for use in Oklahoma issues. (Note 7)

(y) Special Page Seventeen (QVIP-84) (OKLA) to the Contract (Form
QVIP-84) for use in Oklahoma issues. (Note 7)

(z) Special Page One (QVIP-84) (CAL) to the Contract (Form QVIP-84)
for use in California issues. (Note 7)

(aa) Special Page Sixteen (QVIP-84) (CAL) to the Contract (Form
QVIP-84) for use in California issues. (Note 7)

(bb) Special Page Seventeen (QVIP-84) (CAL) to the Contract (Form
QVIP-84) for use in California issues. (Note 7)

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

(dd) Endorsement WVQ 3-85 to the Contract (Form WVQ-83) for use in all
states so that the Contract meets Internal Revenue Code Section
72(s) requirements for an annuity. (Note 8)

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

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

(gg) Endorsement Form VIP 500-86 which makes the Contract qualified.
(Note 11)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(fff)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)

(ggg)Endorsement COMB 84890-83 to the VIP-86 Contract for use in
Montana. (Note 14)

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

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

(jjj)Endorsement COMB 84890-88 to the VIP-86 Contract. (Note 14)

C-2

<PAGE>

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

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

(mmm) Spousal Continuance Rider ORD 89011-93. (Note 17)

(5) Application for Qualified Individual Variable Annuity Contract:

(a) Application Form VAQ 201 ED 07/83 for Qualified Individual
Variable Annuity Contract (Forms WVQ-83 and QVIP-84). (Note 5)

(b) Revision of Application Form, VAQ 201 Ed 5/86. (Note 9)

(d) Revised Application Form VAQ 201 Ed 11/86. (Note 12)

(e) Application for an Annuity contract ORD 87348-92. (Note 17)

(f) Supplement to the Annuity application ORD 87454-92. (Note 17)

(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 19)

(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, II, 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 18)

(b) M. Grier (Note 20)

(27) Financial Data Schedule (Note 1)
<TABLE>
<CAPTION>
<S> <C>
(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.
</TABLE>

C-3

<PAGE>

<TABLE>
<CAPTION>
<S> <C>
(Note 12) Incorporated by reference to Post-Effective Amendment No. 10 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. 13 to this Registration Statement, filed
March 3, 1989.

(Note 15) Incorporated by reference to 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. 19 to the Registration Statement, filed
April 28, 1993.
(Note 17) Incorporated by reference to Post-Effective Amendment No. 20 to Form N-4, Registration No. 2-
81318, filed April 28, 1994.

(Note 18) 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 19) 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 20) Incorporated by reference to Form S-6, Registration No.
33-61079, filed July 17, 1995, on behalf of The Prudential
Variable Appreciable Account.

</TABLE>

ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR

Incorporated by reference to The Prudential Qualified 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 Appreciation Account, The Prudential Individual Variable
Contract Account, The Prudential Qualified Individual Variable Contract Account
(Registrant), 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.

C-4

<PAGE>

The subsidiaries of The Prudential and short descriptions of each are listed
under Item 25 of Post-Effective Amendment No. 30 to the Form N-1A Registration
Statement for The Prudential Series Fund, Inc., Registration No.2-80896, filed
February 29, 1996, the text of which is hereby incorporated.

ITEM 27. NUMBER OF CONTRACT OWNERS

As of February 23, 1996 there were 290,728 contract owners of qualified
Contracts offered by the Registrant.

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

C-5

<PAGE>

Variable Appreciable Account, the Pruco Life Flexible Premium Variable
Annuity Account, the Pruco Life Single Premium Variable Life Account, The
Pruco Life Single Premium Variable Annuity Account, the Pruco Life of New
Jersey Variable Insurance Account, the Pruco Life of New Jersey Variable
Appreciable Account, The Pruco Life of New Jersey Single Premium Variable
Life Account, the Pruco Life of New Jersey Single Premium Variable Annuity
Account, The Prudential Variable Appreciable Account, The Prudential
Individual Variable Contract Account, Prudential's Gibraltar Fund, and The
Prudential Series Fund, Inc.

(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.

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

C-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 QUALIFIED 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. 23
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/ * *By: /s/ THOMAS C. CASTANO
- ------------------------------------- ----------------------------
Roger A. Enrico Thomas C. Castano
Director (Attorney-in-Fact)

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

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

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

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

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

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

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

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

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

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

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

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

/s/ *
- -------------------------------------
Paul A. Volcker
Director

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

C-8

<PAGE>

EXHIBIT INDEX

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

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

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

(27) Financial Data Schedule. Page C-18

C-9

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 Qualified 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 qualified 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 Statement on Form
N-4, as amended, filed by The Prudential with the Securities and Exchange
Commission (Registration No. 2-81318) under the Securities Act of 1933 for the
registration of certain qualified 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 qualified variable
annuity contracts is not chargeable with liabilities arising out of
any other business The Prudential may conduct.

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

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

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

Very truly yours,

Clifford E. Kirsch

C-10

EXHIBIT (10)

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Post-Effective Amendment No. 23 to Registration
Statement No. 2-81318 on Form N-4 of The Prudential Qualified 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 Qualified 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-11

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-12

<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-13

<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 2,998.44 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-14

<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
ANNUAL ADMIN CHARGE 3.00 3.00 3.00 3.00
'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 '95 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%
TABLE 1TAB

C-15

<PAGE>

UNIT VALUES FOR THE LAST DAY OF EVERY QUARTER SINCE INCEPTION FOR THE PRU
VIP/QVIP PRODUCTS

PRU VIP/QVIP DI BOND EQUITY FLX MGD CONS BL EQ INC HY
- ----------------------
INCEPTION DATE 08-Jun-83 06-Jun-83 27-May-83 02-Jun-83 19-Feb-88 27-Feb-87

WHOLE YEARS SINCE
INCEPTION 12 12 12 12 7 8

<S> <C> <C> <C> <C> <C> <C> <C>
INCEPTION UNIT VALUE 0.99692 1.00243 1.00055 1.00433 0.99731 0.99968

31-Dec-83 1.01629 0.98158 0.99072 1.01744 N/A N/A

31-Dec-84 1.13678 1.04475 1.05536 1.11031 N/A N/A

31-Dec-85 1.33247 1.37157 1.31311 1.32837 N/A N/A

31-Dec-86 1.50690 1.55982 1.49834 1.49851 N/A N/A

31-Dec-87 1.49322 1.56684 1.45340 1.50337 N/A 0.94096

31-Dec-88 1.59635 1.81228 1.62049 1.63683 1.09874 1.05227

31-Dec-89 1.79017 2.32328 1.94994 1.89226 1.33181 1.01855

31-Dec-90 1.91594 2.17588 1.96344 1.96812 1.26685 0.88724

31-Dec-91 2.20438 2.70927 2.43353 2.31570 1.59617 1.22019

31-Dec-92 2.33452 3.05622 2.58742 2.44709 1.73693 1.41713

31-Dec-93 2.54072 3.68057 2.95516 2.71321 2.09889 1.67012

30-Dec-94 2.42952 3.73800 2.82770 2.65511 2.10375 1.60540

31-Dec-95 2.89855 4.84971 3.46853 3.07694 2.53006 1.86497

PRU VIP/QVIP NTL RES STIX GLOBAL GVT INC PRU JEN SMCAP
- ----------------------
INCEPTION DATE 02-May-88 19-Oct-87 01-May-89 01-May-89 01-May-95 01-May-95

WHOLE YEARS SINCE
INCEPTION 7 8 6 6 0 0

<S> <C> <C> <C> <C> <C> <C> <C>
INCEPTION UNIT VALUE 0.98753 0.80241 1.01099 1.00062 1.00870 1.00160

31-Dec-83 N/A N/A N/A N/A N/A N/A

31-Dec-84 N/A N/A N/A N/A N/A N/A

31-Dec-85 N/A N/A N/A N/A N/A N/A

31-Dec-86 N/A N/A N/A N/A N/A N/A

31-Dec-87 N/A 0.85935 N/A N/A N/A N/A

31-Dec-88 1.03792 0.98031 N/A N/A N/A N/A

31-Dec-89 1.39112 1.26833 1.11445 1.10787 N/A N/A

31-Dec-90 1.29539 1.20765 0.95902 1.16389 N/A N/A

31-Dec-91 1.41184 1.54800 1.05559 1.33535 N/A N/A

31-Dec-92 1.49691 1.63861 1.00733 1.39657 N/A N/A

31-Dec-93 1.85126 1.77569 1.42483 1.55337 N/A N/A

30-Dec-94 1.75071 1.77231 1.33909 1.45559 N/A N/A

31-Dec-95 2.19574 2.40054 1.53340 1.71849 1.24506 1.18974
</TABLE>

C-16

<PAGE>

VIP/QVIP -- MMKT SUBACCOUNT YIELD MMKT

UNIT VALUE

Mon. 12/25/95 1.92993
Tue. 12/26/95 1.92993
Wed. 12/27/95 1.93016
Thur. 12/28/95 1.93043
Fri. 12/30/95 1.93131
Sat. 12/31/95 1.93154
----------
YIELD 0.0776687% * (365/7) = 4.0499%

EFFECTIVE YIELD ( 1.000776687 ^ (365/7)) - 1 = 4.1314%

STEP 1 1.92993
---------- = 0.0001930123012
$9,999

STEP 2 $30.00
---------- = 0.082191780821918
365 X 7 days
-----------------
0.575342465753425

STEP 3 = 1*2 0.00011104817331

STEP 4 = 12/30 UV 1.93154
- 12/24 UV 1.92993
-------
0.00161

STEP 5 = 4-3 0.0014989518

STEP 6 = 5/BOP UV 0.0014989518
------------ = 0.00077668715
1.92993

STEP 7 = 6 * (365/7) 0.040499

STEP 8 = 7 * 100 4.04987

C-17

<ARTICLE> 6
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 2,737,896
<INVESTMENTS-AT-VALUE> 3,180,357
<RECEIVABLES> 319
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,180,676
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 90,437
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 3,180,676
<DIVIDEND-INCOME> 105,069
<INTEREST-INCOME> 0
<OTHER-INCOME> 99,254
<EXPENSES-NET> 4,363
<NET-INVESTMENT-INCOME> 70,706
<REALIZED-GAINS-CURRENT> 10,629
<APPREC-INCREASE-CURRENT> 375,069
<NET-CHANGE-FROM-OPS> 555,657
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 553,662
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>