NASL VARIABLE ACCOUNT, 497, 1996-01-02

NASL VARIABLE ACCOUNT
497, 1996-01-02

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<PAGE> 1

NASL SERIES TRUST
Supplement to Prospectus dated May 1, 1995,
as amended August 28, 1995

FNAL VARIABLE ACCOUNT

NASL VARIABLE ACCOUNT

Supplement to Prospectus
dated May 1, 1995

NASL VARIABLE LIFE ACCOUNT

Supplement to Prospectus
dated October 16, 1995

On January 1, 1996, North American Life Assurance Company ("NAL") and
The Manufacturers Life Insurance Company merged with the combined company
retaining the name The Manufacturers Life Insurance Company ("Manulife"). NAL
is the ultimate parent of NASL Financial Services, Inc. ("NASL Financial"), the
investment adviser to NASL Series Trust (the "Trust"). Manulife, like NAL,
is a Canadian mutual life insurance company based in Toronto, Canada. The
merger may be considered to give rise to the assignment and automatic
termination of the investment advisory agreement between NASL Financial and the
Trust as well as the assignment and automatic termination of each of the
underlying subadvisory agreements for each of the portfolios (including the
consulting agreement between Salomon Brothers Asset Management Inc. ("SBAM")
and Salomon Brothers Asset Management Limited ("SBAM Limited") relating to the
Strategic Bond Portfolio) (collectively, the "Existing Agreements").
Therefore, at the Trust's Board of Trustees meeting held September 28-29, 1995,
the Trustees of the Trust (including all the noninterested Trustees) voted to
approve a new advisory agreement between the Trust and NASL Financial, new
subadvisory agreements between NASL Financial and each of the subadvisors, and
a new consulting agreement between SBAM and SBAM Limited (collectively, the
"New Agreements"), and to submit the New Agreements to shareholders for their
consideration. The New Agreements were approved by shareholders of each series
of the Trust on December 5, 1995. THE NEW AGREEMENTS ARE SUBSTANTIALLY
IDENTICAL TO THE EXISTING AGREEMENTS. THEREFORE, THE NEW AGREEMENTS WILL NOT
RESULT IN ANY CHANGES IN ADVISORY FEES PAID BY THE TRUST, THE INVESTMENT
MANAGEMENT OR OPERATIONS OF EITHER NASL FINANCIAL OR THE SUBADVISERS, THE
INVESTMENT PERSONNEL MANAGING THE TRUST OR THE SHAREHOLDER SERVICES OR OTHER
BUSINESS ACTIVITIES OF THE TRUST.

NASL.SUPP196
V7.SUPP.196
V20/21.SUPP196
V22/23.196
V9.SUPP.196
VV.SUPP.196
VIS.SUPP.196
VLSUPP196

THE DATE OF THIS SUPPLEMENT IS JANUARY 2, 1996

<PAGE> 2

SUPPLEMENT DATED SEPTEMBER 13, 1995
TO THE CURRENT PROSPECTUS OF
NASL VARIABLE ACCOUNT

The 2.00% premium tax assessed against Pennsylvania residents for
non-qualified contracts upon withdrawal benefits, annuitization or payment of
death benefits will be waived for non-qualified annuity premiums received on or
after September 8, 1995. Premium for non-qualified contracts received for the
period October 1, 1992 through September 7, 1995 will continue to have the
premium tax assessed upon any withdrawal benefits, annuitization or payment of
death benefits.

VV.PROSUPP995
VIS25.PROSUPP995
V7.PROSUPP995
V20/21.PROSUPP995
V22/23.PROSUPP995
<PAGE> 3
Annuity Service Office Mailing Address
116 Huntington Avenue Post Office Box 818
Boston, Massachusetts 02116 Boston, Massachusetts
(617) 266-6008 02117-0818
(800) 344-1029

- --------------------------------------------------------------------------------
NASL VARIABLE ACCOUNT
- --------------------------------------------------------------------------------
OF

NORTH AMERICAN SECURITY LIFE INSURANCE COMPANY

FLEXIBLE PAYMENT DEFERRED COMBINATION
FIXED AND VARIABLE GROUP ANNUITY CONTRACT
NON-PARTICIPATING

This Prospectus describes a flexible purchase payment deferred
combination fixed and variable group annuity contract (the "contract") issued
by North American Security Life Insurance Company ("the Company"), a stock life
insurance company that is a wholly-owned subsidiary of North American Life
Assurance Company ("North American Life"). The contract is designed for use in
connection with retirement plans which may or may not qualify for special
federal income tax treatment. Prior to February, 1995, the Company issued a
class of variable annuity contract which is no longer being issued but under
which purchase payments may continue to be made ("prior contract"--"Ven 8"
contracts), which were sold during the period from September 1992 until
February, 1995. This prospectus principally describes the contract but also
describes the Ven 8 contracts. The principal difference between the contract
offered by this Prospectus and the Ven 8 contract relate to the investment
options available under the contracts, a minimum interest rate to be credited
for any guarantee period under the fixed portion of the contracts, the charges
made by the Company and the death benefit provisions. See "Appendix D - Prior
Contracts."

The contract provides for the accumulation of contract values and the
payment of annuity benefits on a variable and/or fixed basis. The contract
offers eighteen investment options: fourteen variable and four fixed. The
variable portion of the contract value and annuity payments, if selected on a
variable basis, will vary according to the investment performance of the
sub-accounts of NASL Variable Account (the "Variable Account"). The Variable
Account is a separate account established by the Company. Purchase payments
and earnings on those purchase payments may be allocated to and transferred
among one or more of fourteen sub-accounts of the Variable Account. The
assets of each sub-account are invested in shares of NASL Series Trust (the
"Trust"), a mutual fund having fourteen investment portfolios: the Global
Equity Trust, Pasadena Growth Trust, Equity Trust, Value Equity Trust, Growth
and Income Trust, International Growth and Income Trust, Strategic Bond Trust,
Global Government Bond Trust, Investment Quality Bond Trust, U.S. Government
Securities Trust, Money Market Trust, and three Automatic Asset Allocation
Trusts (Aggressive, Moderate and Conservative)(see the accompanying Prospectus
of the Trust). Fixed contract values may be accumulated under one, three, five
and seven year fixed account investment options. Except as specifically noted
herein and as set forth under the caption "FIXED ACCOUNT INVESTMENT OPTIONS"
below, this Prospectus describes only the variable portion of the contract.

Shares of the Trust are not deposits or obligations of, or guaranteed
or endorsed by, any bank, and the shares are not federally insured by the
Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other
agency.

Additional information about the variable portion of the contract and
Variable Account is contained in a Statement of Additional Information, dated
the same date as this Prospectus, which has been filed with the Securities and
Exchange Commission and is incorporated herein by reference. The Statement of
Additional Information is available without charge upon request by writing the
Company at the above address or telephoning (617) 266-6008. The table of
contents for the Statement of Additional Information is included on page 38 of
this Prospectus.

PLEASE READ THIS PROSPECTUS CAREFULLY AND KEEP IT FOR FUTURE REFERENCE. IT
CONTAINS INFORMATION ABOUT THE VARIABLE ACCOUNT AND THE VARIABLE PORTION OF THE
CONTRACT AND CERTIFICATE THAT A PROSPECTIVE PURCHASER SHOULD KNOW BEFORE
INVESTING. IT SHOULD BE ACCOMPANIED BY A CURRENT PROSPECTUS FOR THE TRUST.

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 date of this Prospectus is May 1, 1995.

V22/23.PRO595

<PAGE> 4
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
SPECIAL TERMS ......................................... 3
SUMMARY ............................................... 5
TABLE OF ACCUMULATION UNIT VALUES ..................... 10
GENERAL INFORMATION ABOUT NORTH AMERICAN SECURITY LIFE
INSURANCE COMPANY, NASL VARIABLE ACCOUNT AND NASL
SERIES TRUST .......................................... 11
North American Security Life Insurance Company ..... 11
NASL Variable Account .............................. 11
NASL Series Trust .................................. 11
DESCRIPTION OF THE CONTRACT ........................... 13
ELIGIBLE GROUPS ...................................... 13
ACCUMULATION PROVISIONS .............................. 14
Purchase Payments .................................. 14
Accumulation Units ................................. 14
Value of Accumulation Units ........................ 15
Net Investment Factor .............................. 15
Transfers Among Investment Options ................. 15
Telephone Transactions ............................. 16
Special Transfer Services - Dollar Cost Averaging .. 16
Asset Rebalancing Program .......................... 16
Withdrawals ........................................ 16
Special Withdrawal Services - Income Plan .......... 17
Loans .............................................. 17
Death Benefit Before Maturity Date ................. 18
ANNUITY PROVISIONS ................................... 20
General ............................................ 20
Annuity Options .................................... 20
Determination of Amount of the First Variable
Annuity Payment .................................. 21
Annuity Units and the Determination of Subsequent
Variable Annuity Payments ........................ 21
Transfers After Maturity Date ...................... 22
Death Benefit on or After Maturity Date ............ 22
OTHER CONTRACT PROVISIONS ............................ 22
Ten Day Right to Review ............................ 22
Ownership. ......................................... 22
Beneficiary ........................................ 23
Annuitant .......................................... 23
Modification ....................................... 23
Discontinuance of New Owners ....................... 23
Fixed Account Investment Options ................... 24
CHARGES AND DEDUCTIONS ................................ 26
Withdrawal Charges.................................. 26
Reduction or Elimination of Withdrawal Charges ..... 27
Administration Fees ................................ 28
Reduction or Elimination of Annual
Administration Fee ............................... 28
Mortality and Expense Risk Charge .................. 29
Taxes .............................................. 29
FEDERAL TAX MATTERS ................................... 29
INTRODUCTION ......................................... 29
THE COMPANY'S TAX STATUS ............................. 30
TAXATION OF ANNUITIES IN GENERAL ..................... 30
Tax Deferral During Accumulation Period ............ 30
Taxation of Partial and Full Withdrawals ........... 31
Taxation of Annuity Payments ....................... 32
Taxation of Death Benefit Proceeds ................. 32
Penalty Tax on Premature Distributions ............. 32
Aggregation of Contracts ........................... 32
QUALIFIED RETIREMENT PLANS ........................... 32
Qualified Plan Types ............................... 33
Direct Rollovers ................................... 34
FEDERAL INCOME TAX WITHHOLDING ....................... 34
GENERAL MATTERS ....................................... 34
Tax Deferral ....................................... 34
Performance Data ................................... 34
Financial Statements ............................... 35
Asset Allocation and Timing Services ............... 35
Restrictions Under the Texas Optional
Retirement Program ................................. 35
Distribution of Contracts .......................... 35
Owner Inquiries .................................... 36
Legal Proceedings .................................. 36
EXCHANGE OFFER AND ENHANCED DEATH
BENEFIT OPTION ........................................ 36
Exchange Offer ..................................... 36
Enhanced Death Benefit Option ...................... 37
OTHER INFORMATION ......................................38
STATEMENT OF ADDITIONAL INFORMATION-
TABLE OF CONTENTS .................................... 38
APPENDIX A: EXAMPLES OF CALCULATION OF
WITHDRAWAL CHARGE .................................... 38
APPENDIX B: STATE PREMIUM TAXES ...................... 40
APPENDIX C: PENNSYLVANIA MAXIMUM
MATURITY AGE ......................................... 41
APPENDIX D: PRIOR CONTRACTS (VEN 8) .................. 41
</TABLE>

<PAGE> 5

SUPPLEMENT DATED JULY 6, 1995
REVISED AUGUST 28, 1995
TO THE CURRENT PROSPECTUS OF
NASL VARIABLE ACCOUNT

FIXED ACCOUNT INVESTMENT OPTION

Effective June 30, 1995, North American Security Life Insurance Company
(the "Company") entered into a Reinsurance Agreement with Peoples Security Life
Insurance Company ("Peoples") pursuant to which Peoples will reinsure certain
amounts with respect to the fixed account portion of the contract described in
this Prospectus. Under this Reinsurance Agreement, the Company remains liable
for the contractual obligations of the contracts' fixed account and Peoples
agrees to reimburse the Company for certain amounts and obligations in
connection with the fixed account. Peoples contractual liability runs solely
to the Company, and no contract owner shall have any right of action against
Peoples. Peoples is a wholly-owned subsidiary of Louisville, Kentucky based
Providian Corporation, a diversified financial services corporation. Peoples
is rated A+ (Superior) by A.M. Best for operating performance and financial
stability and AAA by Standard & Poor's Corporation for claims paying ability.

MISSTATEMENT AND PROOF OF AGE, SEX OR SURVIVAL

The Company may require proof of age, sex or survival of any person
upon whose age, sex or survival any payment depends. If the age or sex of the
annuitant has been misstated, the benefits will be those that would have been
provided for the annuitant's correct age and sex. If the Company has made
incorrect annuity payments, the amount of any underpayment will be paid
immediately and the amount of any overpayment will be deducted from future
annuity payments.

V7.SUPP895
V22/23.SUPP895

<PAGE> 6
SPECIAL TERMS

The following terms as used in this Prospectus have the indicated
meanings:

Accumulation Unit - A unit of measure that is used to calculate the
value of an owner's variable investment account before the maturity date.

Annuitant - Any natural person or persons whose life is used to
determine the duration of annuity payments involving life contingencies. The
"annuitant" is as designated on the certificate specifications page or in the
application, unless changed.

Annuity Option - The method selected by each owner for annuity payments
made by the Company. At the maturity date, the Company will provide an annuity
with payments guaranteed for 10 years and for the lifetime of the annuitant, if
the annuitant lives more than 10 years. This will be the annuity option unless
changed.

Annuity Service Office - The service office of the Company is P.O. Box
818, Boston, Massachusetts 02117-0818.

Annuity Unit - A unit of measure that is used after the maturity date
to calculate variable annuity payments.

Application - The document signed by each owner that serves as his or
her application for participation under the contract.

Beneficiary - The person, persons or entity entitled to the death
benefit under the contract upon the death of an owner or, in certain
circumstances, the annuitant. If there is a surviving owner, that person will
be deemed to be the beneficiary.

Certificate - The document issued to each owner which summarizes the
rights and benefits of the owner under the contract.

Certificate Anniversary - The anniversary of the certificate date.

Certificate Date - The date of issue of a certificate under the
contract.

Certificate Year - The period of twelve consecutive months beginning on
the certificate date or any anniversary thereof.

Contingent Beneficiary - The person, persons or entity to become the
beneficiary if the beneficiary is not alive. The contingent beneficiary is as
specified in the application, unless changed.

Contract Application - The document signed by the Group Holder that
evidences the Group Holder's application for a Contract.

Contract Value - The total of an owner's investment account values and,
if applicable, any amount in the loan account attributable to that owner.

Debt - Any amounts in an owner's loan account plus any accrued loan
interest. The loan provision is available only under contracts or certificates
issued in connection with Section 403(b) qualified plans that are not subject
to Title I of ERISA.

Due Proof of Death - Due Proof of Death is required upon the death of
the owner or annuitant, as applicable. One of the following must be received
at the Annuity Service Office within one year of the date of death:

(a) A certified copy of a death certificate;
(b) A certified copy of a decree of a court of competent jurisdiction
as to the finding of death; or
(c) Any other proof satisfactory to us.

Death benefits will be paid within 7 days of receipt of due proof of death and
all required claim forms by the Company's Annuity Service Office.

Fixed Annuity - An annuity option with payments which are predetermined
and guaranteed as to dollar amount.

General Account - All the assets of the Company other than assets in
separate accounts.

Group Holder - The person, persons or entity to whom the contract is
issued.

<PAGE> 7
Investment Account - An account established by the Company which
represents an owner's interest in an investment option prior to the maturity
date.

Investment Account Value - The value of an owner's investment in an
investment account.

Investment Options - The investment choices available to owners.
Currently, there are fourteen variable and four fixed investment options under
the contract.

Loan Account - The portion of the general account that is used for
collateral when a loan is taken by an owner.

Market Value Charge - A charge that may be assessed if amounts are
withdrawn or transferred from the three, five or seven year investment options
prior to the end of the interest rate guarantee period.

Maturity Date - The date on which annuity benefits commence. The
maturity date is the date specified on the certificate specifications page and
is generally the first day of the month following the later of the annuitant's
85th birthday or the tenth contract anniversary, unless changed. See Appendix
D for information on the Maturity Date applicable to certain contracts which
are no longer being issued (Ven 8 contracts).

Net Purchase Payment - The purchase payment paid by or on behalf of an
owner less the amount of premium tax, if any.

Non-Qualified Certificates - Certificates issued under non-qualified
Contracts.

Non-Qualified Contracts - Contracts which are not issued under
qualified plans.

Owner - The person, persons or entity named in a certificate and
entitled to all of the ownership rights under the contract not expressly
reserved to the group holder. The owner is specified in the application,
unless changed.

Portfolio or Trust Portfolio - A separate investment portfolio of the
Trust, a mutual fund in which the Variable Account invests, or of any successor
mutual fund.

Purchase Payment - An amount paid by or on behalf of an owner to the
Company as consideration for the benefits provided by the contract.

Qualified Certificates - Certificates issued under qualified contracts.

Qualified Contracts - Contracts issued under qualified plans.

Qualified Plans - Retirement plans which receive favorable tax
treatment under Section 401, 403, 408 or 457 of the Internal Revenue Code of
1986, as amended.

Separate Account - A segregated account of the Company that is not
commingled with the Company's general assets and obligations.

Sub-Account(s) - One or more of the sub-accounts of the Variable
Account. Each sub-account is invested in shares of a different Trust portfolio.

Valuation Date - Any date on which the New York Stock Exchange is open
for business and the net asset value of a Trust portfolio is determined.

Valuation Period - Any period from one valuation date to the next,
measured from the time on each such date that the net asset value of each
portfolio is determined.

Variable Account - The Variable Account, which is a separate account
of the Company.

Variable Annuity - An annuity option with payments which: (1) are not
predetermined or guaranteed as to dollar amount, and (2) vary in relation to
the investment experience of one or more specified sub-accounts.

<PAGE> 8
SUMMARY

The Contract. The contract offered by this Prospectus is a flexible
purchase payment deferred combination fixed and variable group annuity
contract. Specific accounts are maintained under the contract for each member
of the eligible group participating in the contract as evidenced by the
issuance of certificates. The contract provides for the accumulation of
contract values and the payment of annuity benefits on a variable and/or fixed
basis. Except as specifically noted herein and as set forth under the caption
"FIXED ACCOUNT INVESTMENT OPTIONS" below, this Prospectus describes only the
variable portion of the contract.

Eligible Groups. The contract may be issued to fund either
non-qualified retirement plans or plans qualifying for special income tax
treatment under the Internal Revenue Code, such as individual retirement
accounts and annuities, pension and profit-sharing plans for corporations and
sole proprietorships/partnerships ("H.R. 10" and "Keogh" plans), tax-sheltered
annuities, and state and local government deferred compensation plans. (See
"QUALIFIED RETIREMENT PLANS")

Purchase Payments. A certificate may be issued upon the making of an
initial purchase payment by or on behalf of an owner of as little as $30. A
minimum of $300 must be paid for each certificate during the first certificate
year. Purchase payments may be made at any time, except that if a purchase
payment would cause the owner's contract value to exceed $1,000,000, or the
owner's contract value already exceeds $1,000,000, additional purchase payments
will be accepted only with the prior approval of the Company. The Company may,
at its option, cancel a certificate and an owner's participation under a
contract at the end of any two consecutive certificate years in which no
purchase payments by or on behalf of the owner have been made, if both (i) the
total purchase payments made for the certificate, less any withdrawals, are
less than $2,000; and (ii) the contract value for the owner at the end of such
two year period is less than $2,000. The cancellation of contract privileges
may vary in certain states in order to comply with the requirements of
insurance laws and regulations in such state. (See "PURCHASE PAYMENTS")

Investment Options. Purchase payments may be allocated among the
eighteen investment options currently available under the contract: fourteen
variable account investment options and four fixed account investment options.
The fourteen variable account investment options are the fourteen sub-accounts
of the Variable Account, a separate account established by the Company. The
sub-accounts invest in corresponding portfolios of the Trust: the Global
Equity Trust, Pasadena Growth Trust, Equity Trust, Value Equity Trust, Growth
and Income Trust, International Growth and Income Trust, Strategic Bond Trust,
Global Government Bond Trust, Investment Quality Bond Trust, U.S. Government
Securities Trust, Money Market Trust, and three Automatic Asset Allocation
Trusts (Aggressive, Moderate and Conservative) (see the accompanying Prospectus
of the Trust). The portion of an owner's contract value in the Variable
Account and monthly annuity payments, if selected on a variable basis, will
reflect the investment performance of the sub-accounts selected. (See "NASL
VARIABLE ACCOUNT") Purchase payments may also be allocated to the four fixed
account investment options: one, three, five and seven year guaranteed
investment accounts. Under the fixed account investment options, the Company
guarantees the principal value of purchase payments and the rate of interest
credited to the investment account for the term of the guarantee period. The
portion of an owner's contract value in the fixed account investment options
and monthly annuity payments, if selected on a fixed basis, will reflect such
interest and principal guarantees. (See "FIXED ACCOUNT INVESTMENT OPTIONS")
Subject to certain regulatory limitations, the Company may elect to add,
subtract or substitute investment options.

Transfers. Prior to the maturity date, amounts may be transferred
among an owner's variable account investment options and from the owner's
variable account investment options to his or her fixed account investment
options without charge. In addition, amounts may be transferred prior to the
maturity date among the owner's fixed account investment options and from the
owner's fixed account investment options to his or her variable account
investment options, subject to a one year holding period requirement and a
market value charge which may apply to such a transfer. (See "FIXED ACCOUNT
INVESTMENT OPTIONS") After the maturity date, transfers are not permitted from
variable annuity options to fixed annuity options or from fixed annuity options
to variable annuity options. Transfers from any investment account must be at
least $300 or, if less, the entire balance in the investment account. If, after
the transfer the amount remaining in the investment account from which the
transfer is made is less than $100, then we will transfer the entire amount
instead of the requested amount. The Company may impose certain additional
limitations on transfers. (See "TRANSFERS AMONG INVESTMENT OPTIONS" and
"TRANSFERS AFTER MATURITY DATE") Transfer privileges may also be used under a
special service offered by the Company to dollar cost average an investment in
the contract. (See "SPECIAL TRANSFER SERVICES - DOLLAR COST AVERAGING")

Withdrawals. Prior to the earlier of the maturity date or the death of
an owner, the owner may withdraw all or a portion of his or her contract value.
The amount withdrawn from any investment account must be at least $300 or, if
less, the entire balance of the investment account. If a partial withdrawal
plus any applicable withdrawal charge would reduce the owner's contract value
to less than $300, the withdrawal request will be treated as a request to
withdraw the owner's entire contract value. A withdrawal charge and an
administration fee may be imposed. (See "WITHDRAWALS") A withdrawal may be
subject to a penalty tax. (See

<PAGE> 9
"FEDERAL TAX MATTERS") Withdrawal privileges may also be exercised pursuant to
the Company's systematic withdrawal plan service. (See "SPECIAL WITHDRAWAL
SERVICES - SYSTEMATIC WITHDRAWAL PLAN")

Loans. The Company offers a loan privilege under contracts or
certificates issued in connection with Section 403(b) qualified plans that are
not subject to Title I of ERISA. Where available, owners may obtain loans
using their contract value as the only security for the loan. The effective
cost of a loan is 2% per year of the amount borrowed. (See "LOANS")

Death Benefits. The Company will pay the death benefit described below
(which, as defined, is net of any debt) to the beneficiary if any owner dies
before the maturity date. If there is a surviving owner, that owner will be
deemed to be the beneficiary. No death benefit is payable on the death of any
annuitant, except that if any owner is not a natural person, the death of any
annuitant will be treated as the death of an owner. The death benefit will be
determined as of the date on which written notice and proof of death and all
required claim forms are received at the Company's Annuity Service Office.

If any owner dies on or prior to his or her 85th birthday and the
oldest owner had an attained age of less than 81 years on the certificate date,
the death benefit will be determined as follows: During the first certificate
year, the death benefit will be the greater of: (a) the contract value or (b)
the sum of all purchase payments made, less any amounts deducted in connection
with partial withdrawals made by or on behalf of the owner. During any
subsequent certificate year, the death benefit will be the greater of: (a) the
contract value or (b) the death benefit on the last day of the previous
certificate year, plus any purchase payments made and less any amounts deducted
in connection with partial withdrawals made by or on behalf of the owner since
then.

If any owner dies after his or her 85th birthday and the oldest owner
had an attained age of less than 81 years on the certificate date, the death
benefit will be the greater of: (a) the contract value or (b) the excess of
(i) the sum of all purchase payments made by or on behalf of the owner over
(ii) the sum of any amounts deducted in connection with partial withdrawals
made by or on behalf of the owner. If any owner dies and the oldest owner had
an attained age greater than 80 on the certificate date, the death benefit will
be the contract value less any applicable withdrawal charges at the time of
payment of benefits. (See "DEATH BENEFIT BEFORE MATURITY DATE") If the
annuitant dies after the maturity date and annuity payments have been selected
based on an annuity option providing for payments for a guaranteed period, the
Company will make the remaining guaranteed payments to the beneficiary. (See
"DEATH BENEFIT ON OR AFTER MATURITY DATE")

Annuity Payments. The Company offers a variety of fixed and variable
annuity options. Periodic annuity payments will begin on the maturity date.
The owner selects the maturity date, frequency of payment and annuity option.
(See "ANNUITY PROVISIONS")

Ten Day Review. Within 10 days of receipt of his or her certificate,
an owner may cancel the certificate by returning it to the Company. The ten
day right to review may vary in certain states in order to comply with the
requirements of insurance laws and regulations in such states. (See "TEN DAY
RIGHT TO REVIEW")

Modification. The contract or any certificate may not be modified by
the Company without the consent of the group holder or the owner, as
applicable, except as may be required to make it conform to any law or
regulation or ruling issued by a governmental agency. However, on 60 days'
notice to the group holder, the Company may change the withdrawal charges,
administration fees, mortality and expense risk charges, free withdrawal
percentage, annuity purchase rates and the market value charge as to any
certificates issued after the effective date of the modification. (See
"MODIFICATION")

Discontinuance of New Owners. On thirty days' notice to the group
holder, the Company may limit or discontinue acceptance of new applications and
the issuance of new certificates under a contract. (See "DISCONTINUANCE OF NEW
OWNERS")

Charges and Deductions. The following table and Example are designed
to assist group holders and owners in understanding the various costs and
expenses to which they are subject directly and indirectly. The table reflects
expenses of the separate account and the underlying portfolio company. In
addition to the items listed in the following table, premium taxes may be
applicable to certain owners. The items listed under "Transaction Expenses"
and "Separate Account Annual Expenses" are more completely described in this
Prospectus (see "CHARGES AND DEDUCTIONS") The items listed under "Trust Annual
Expenses" are described in detail in the accompanying Trust Prospectus to which
reference should be made.

<PAGE> 10

<TABLE>
TRANSACTION EXPENSES

Deferred sales load (as percentage of purchase payments)
<CAPTION>
NUMBER OF COMPLETE YEARS
PURCHASE PAYMENT IN WITHDRAWAL CHARGE
CONTRACT PERCENTAGE
<S> <C>
0 6%
1 6%
2 5%
3 5%
4 4%
5 3%
6 2%
7+ 0%
</TABLE>

<TABLE>
<S> <C>
ANNUAL ADMINISTRATION FEE .............................................. $30(1)

SEPARATE ACCOUNT ANNUAL EXPENSES
(as a percentage of average account value)

Mortality and expense risk fees ........................................ 1.25%
Administration fee - asset based ....................................... 0.15%

Total Separate Account Annual Expenses ................................. 1.40%
- --------------------------------------

<FN>
(1) The $30 annual administration fee will not be assessed prior to the
maturity date if at the time of its assessment the sum of all the owner's
investment accounts is equal to or greater than $100,000. See Appendix D for
information on the administration fee applicable to certain contracts which are
no longer being issued (Ven 8 contracts).
</TABLE>

<TABLE>
TRUST ANNUAL EXPENSES
(as a percentage of Trust average net assets)

<CAPTION>
MANAGEMENT OTHER TOTAL TRUST
TRUST PORTFOLIO FEES EXPENSES ANNUAL EXPENSES
<S> <C> <C> <C>
Global Equity ...................... 0.900% 0.180% 1.080%
Pasadena Growth .................... 0.975% 0.000% 0.975%
Equity ............................. 0.750% 0.090% 0.840%
Value Equity ....................... 0.800% 0.070% 0.870%
Growth and Income .................. 0.750% 0.070% 0.820%
International Growth and Income .... 0.950% 0.300%* 1.250%
Strategic Bond ..................... 0.775% 0.135% 0.910%
Global Government Bond ............. 0.800% 0.160% 0.960%
Investment Quality Bond ............ 0.650% 0.110% 0.760%
U.S. Government Securities ......... 0.650% 0.080% 0.730%
Money Market ....................... 0.500% 0.070% 0.570%
Aggressive Asset Allocation ........ 0.750% 0.140% 0.890%
Moderate Asset Allocation .......... 0.750% 0.100% 0.850%
Conservative Asset Allocation ...... 0.750% 0.120% 0.870%

*Based on estimates of payments to be made during the current fiscal year.

</TABLE>

<PAGE> 11
<TABLE>
EXAMPLE
An owner would pay the following expenses on a $1,000 investment, assuming 5%
annual return on assets, if the owner withdrew all of his or her contract value
at the end of the applicable time period:

<CAPTION>
TRUST PORTFOLIO 1 YEAR 3 YEARS 5 YEARS* 10 YEARS
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Global Equity .................. $81 $129 $176 $290
Pasadena Growth ................ 80 126 171 280
Equity ......................... 79 122 164 267
Value Equity ................... 79 123 166 270
Growth and Income .............. 79 121 163 265
Int'l Growth and Income ........ 83 133 N/A N/A
Strategic Bond ................. 80 124 168 274
Global Government Bond ......... 80 125 170 279
Investment Quality Bond ........ 78 119 160 258
U.S. Government Securities ..... 78 119 159 255
Money Market ................... 77 114 151 239
Aggressive Asset Allocation .... 80 123 167 272
Moderate Asset Allocation ...... 79 122 165 268
Conservative Asset Allocation .. 79 123 166 270

<FN>
*For prior contracts no longer being issued, Ven 8 contracts, (as
described in Appendix D) these numbers are as follows: Global Equity, $166;
Pasadena Growth, $161; Equity, $154; Value Equity, $156; Growth and Income,
$153; International Growth and Income (not applicable); Strategic Bond, $158;
Global Government Bond, $160; Investment Quality Bond, $150; U.S. Government
Securities, $149; Money Market, $141; Aggressive Asset Allocation, $157;
Moderate Asset Allocation, $155; Conservative Asset Allocation, $156. The
difference in numbers is attributable to the different withdrawal charges. See
Appendix D.
</TABLE>

An owner would pay the following expenses on a $1,000 investment, assuming 5%
annual return on assets, if the owner annuitized as provided in the contract or
did not withdraw all of his or her contract value at the end of the applicable
time period:

<TABLE>
<CAPTION>
TRUST PORTFOLIO 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C>

Global Equity .................. $26 $80 $136 $290
Pasadena Growth ................ 25 77 131 280
Equity ......................... 24 73 124 267
Value Equity ................... 24 74 126 270
Growth and Income .............. 23 72 123 265
Int'l Growth and Income ........ 28 85 N/A N/A
Strategic Bond ................. 24 75 128 274
Global Government Bond ......... 25 76 130 279
Investment Quality Bond ........ 23 70 120 258
U.S. Government Securities ..... 22 69 119 255
Money Market ................... 21 64 111 239
Aggressive Asset Allocation .... 24 74 127 272
Moderate Asset Allocation ...... 24 73 125 268
Conservative Asset Allocation .. 24 74 126 270
</TABLE>

For purposes of presenting the foregoing Example, the Company has made
certain assumptions mandated by the Securities and Exchange Commission (the
"Commission"). The Company has assumed that, where applicable, the maximum
sales load is deducted, that there are no exchanges or other transactions and
that the "Other Expenses" line item under "Trust Annual Expenses" will remain
the same. Such assumptions, which are mandated by the Commission in an attempt
to provide prospective investors with standardized data with which to compare
various annuity contracts and certificates, do not take into account certain
features of the contract or certificate and prospective changes in the size of
the Trust which may operate to change the expenses borne by owners.
Consequently, the amounts listed in the Example above should not be considered
a representation of past or future expenses and actual expenses borne by owners
may be greater or lesser than those shown.

<PAGE> 12
In addition, for purposes of calculating the values in the above
Example, the Company has translated the $30 annual administration charge listed
under "Annual Administration Fee" to a 0.086% annual asset charge based on the
$35,000 approximate average size of certificates of this series issued during
1994 by the Company comparable to the certificates offered by this Prospectus.
So translated, such charge would be higher for smaller contract values and
lower for larger contract values.

* * * * * * * *

The above summary is qualified in its entirety by the detailed
information appearing elsewhere in this Prospectus and the Statement of
Additional Information incorporated herein by reference and in the accompanying
Prospectus and the Statement of Additional Information incorporated by
reference therein for the Trust, to which reference should be made. This
Prospectus generally describes only the variable aspects of the contract,
except where fixed aspects are specifically mentioned.

TABLE OF ACCUMULATION UNIT VALUES(+)
====================================================================================================
SUB-ACCOUNT UNIT VALUE AT START OF UNIT VALUE AT END OF NUMBER OF UNITS AT END OF
YEAR* YEAR YEAR
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Global Equity
1994 16.715126 15.500933 171,668.821
Pasadena Growth
1994 8.699511 8.837480 67,651.751
Equity
1994 14.381312 14.786831 156,302.930
Value Equity
1994 11.375744 11.107620 147,434.130
Growth and Income
1994 13.239339 13.076664 147,028.139
Strategic Bond
1994 10.192707 9.965972 17,448.655
Global Government Bond
1994 14.734788 14.630721 46,005.023
Investment Quality Bond
1994 14.307698 14.216516 15,254.616
U.S. Government
Securities
1994 14.188969 14.111357 14,981.455
Money Market
1994 13.453100 13.623292 57,620.649
Aggressive Asset
Allocation
1994 12.538660 12.381395 41,051.814
Moderate Asset
Allocation
1994 12.522239 12.396295 98,925.767
Conservative Asset
Allocation
1994 12.378545 12.298940 33,929.162
====================================================================================================
[/FN]
* Units under this series of contracts were first credited under the sub-accounts on August 9, 1994.

(+) See Appendix D for the TABLE of ACCUMULATION UNIT VALUES for certain contracts which are no
longer being issued (Ven 8 contracts).

</TABLE>

<PAGE> 14
GENERAL INFORMATION ABOUT NORTH AMERICAN
SECURITY LIFE INSURANCE COMPANY
NASL VARIABLE ACCOUNT AND NASL SERIES TRUST

NORTH AMERICAN SECURITY LIFE INSURANCE COMPANY

North American Security Life Insurance Company ("the Company") is a
stock life insurance company organized under the laws of Delaware in 1979. The
Company's principal office is located at 116 Huntington Avenue, Boston,
Massachusetts 02116. The Company is a wholly-owned subsidiary of North
American Life, 5650 Yonge Street, North York, Ontario M2M 4G4, a mutual life
insurance company established in 1881 in Canada.

NASL VARIABLE ACCOUNT

The Company established the Variable Account on August 24, 1984 as a
separate account under Delaware law. The income, gains and losses, whether or
not realized, from assets of the Variable Account are, in accordance with the
contracts, credited to or charged against the Variable Account without regard
to other income, gains or losses of the Company. Nevertheless, all obligations
arising under the contracts are general corporate obligations of the Company.
Assets of the Variable Account may not be charged with liabilities arising out
of any other business of the Company.

The Variable Account is registered with the Commission under the
Investment Company Act of 1940 ("1940 Act") as a unit investment trust. A unit
investment trust is a type of investment company which invests its assets in
specified securities, such as the shares of one or more investment companies.
Registration under the 1940 Act does not involve supervision by the Commission
of the management or investment policies or practices of the Variable Account.
If deemed by the Company to be in the best interests of persons having voting
rights under the contracts, the Variable Account may be operated as a
management company under the 1940 Act or it may be deregistered under such Act
in the event such registration is no longer required.

There are currently fourteen sub-accounts within the Variable Account:
the Global Equity Sub-Account, the Pasadena Growth Sub-Account, the Equity
Sub-Account, the Value Equity Sub-Account, the Growth and Income Sub-Account,
the International Growth and Income Sub-Account, the Strategic Bond
Sub-Account, the Global Government Bond Sub-Account, the Investment Quality
Bond Sub-Account, the U.S. Government Securities Sub-Account, the Money Market
Sub-Account and three Automatic Asset Allocation Sub-Accounts (Aggressive,
Moderate and Conservative). The Company reserves the right to add other
sub-accounts, eliminate existing sub-accounts, combine sub-accounts or transfer
assets in one sub-account to another sub-account established by the Company or
an affiliated company. The Company will not eliminate existing sub-accounts or
combine sub-accounts without obtaining any necessary approval of the
appropriate state or federal regulatory authorities.

NASL SERIES TRUST

The assets of each sub-account of the Variable Account are invested in
shares of a corresponding portfolio of the Trust: the Global Equity Trust, the
Pasadena Growth Trust, the Equity Trust, the Value Equity Trust, the Growth and
Income Trust, the International Growth and Income Trust, the Strategic Bond
Trust, the Global Government Bond Trust, the Investment Quality Bond Trust, the
U.S. Government Securities Trust, the Money Market Trust, and three Automatic
Asset Allocation Trusts (Aggressive, Moderate and Conservative). The Trust is
registered under the 1940 Act as an open-end management investment company.
Each of the portfolios is diversified for purposes of the 1940 Act, except for
the Global Government Bond Trust which is non-diversified so that it may invest
more than 5% of its assets in securities issued by a foreign government. The
Trust receives investment advisory services from NASL Financial Services, Inc.

The Trust currently has seven subadvisers. Oechsle International
Advisors, L.P. provides investment subadvisory services to the Global Equity
and Global Government Bond Trusts. Roger Engemann Management Co, Inc.,
provides investment subadvisory services to the Pasadena Growth Trust.
Fidelity Management Trust Company provides investment subadvisory services to
the Equity, Aggressive Asset Allocation, Moderate Asset Allocation and
Conservative Asset Allocation Trusts. Goldman Sachs Asset Management provides
investment subadvisory services to the Value Equity Trust. Wellington
Management Company provides investment subadvisory services to the Growth and
Income, Investment Quality Bond and Money Market Trusts. Salomon Brothers
Asset Management Inc provides investment subadvisory services to the Strategic
Bond and U.S. Government Securities Trusts. J.P. Morgan Investment Management
provides investment subadvisory services to the International Growth and Income
Trust.

<PAGE> 15
The following is a brief description of each portfolio:

THE GLOBAL EQUITY TRUST seeks long-term capital appreciation, by
investing primarily in a globally diversified portfolio of common stocks and
securities convertible into or exercisable for common stocks.

THE PASADENA GROWTH TRUST seeks to achieve long-term growth of capital
by emphasizing investments in companies with rapidly growing earnings per
share, some of which may be smaller emerging growth companies.

THE EQUITY TRUST seeks growth of capital, by investing primarily in
common stocks of United States issuers and securities convertible into or
carrying the right to buy common stocks.

THE VALUE EQUITY TRUST seeks long-term growth of capital by investing
primarily in common stocks and securities convertible into or carrying the
right to buy common stocks.

THE GROWTH AND INCOME TRUST seeks long-term growth of capital and
income, consistent with prudent investment risk, by investing primarily in a
diversified portfolio of common stocks of United States issuers which the
Subadviser believes are of high quality.

THE INTERNATIONAL GROWTH AND INCOME TRUST seeks long-term growth of
capital and income by investing, under normal circumstances, at least 65% of
its total assets in equity securities of foreign issuers. The portfolio may
also invest in debt securities of corporate or sovereign issuers rated A or
higher by Moody's or S&P or, if unrated, of equivalent credit quality as
determined by the Subadviser. Under normal circumstances, the Portfolio will
be invested approximately 85% in equity securities and 15% in fixed income
securities.

THE STRATEGIC BOND TRUST seeks a high level of total return consistent
with preservation of capital by giving its Subadviser broad discretion to
deploy the portfolio's assets among certain segments of the fixed-income market
as the Subadviser believes will best contribute to achievement of the
portfolio's investment objective.

THE GLOBAL GOVERNMENT BOND TRUST seeks a high level of total return by
placing primary emphasis on high current income and the preservation of
capital, by investing primarily in a global portfolio of high-quality,
fixed-income securities of foreign and United States governmental entities and
supranational issuers.

THE INVESTMENT QUALITY BOND TRUST seeks a high level of current income
consistent with the maintenance of principal and liquidity, by investing
primarily in a diversified portfolio of investment grade corporate bonds and
U.S. Government bonds with intermediate to longer term maturities. The
portfolio may also invest up to 20% of its assets in non-investment grade fixed
income securities.

THE U.S. GOVERNMENT SECURITIES TRUST seeks a high level of current
income consistent with preservation of capital and maintenance of liquidity, by
investing in debt obligations and mortgage-backed securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities and
derivative securities such as collateralized mortgage obligations backed by
such securities.

THE MONEY MARKET TRUST seeks maximum current income consistent with
preservation of principal and liquidity, by investing in high quality money
market instruments with maturities of thirteen months or less issued primarily
by United States entities.

THE AUTOMATIC ASSET ALLOCATION TRUSTS seek the highest potential total
return consistent with a specified level of risk tolerance -- conservative,
moderate or aggressive -- by investing primarily in the kinds of securities in
which the Equity, Investment Quality Bond, U.S. Government Securities and Money
Market Trusts may invest.

* THE AGGRESSIVE ASSET ALLOCATION TRUST seeks the highest total return
consistent with an aggressive level of risk tolerance. This Trust attempts to
limit the decline in portfolio value in very adverse market conditions to 15%
over any twelve month period.

<PAGE> 16
* THE MODERATE ASSET ALLOCATION TRUST seeks the highest total return
consistent with a moderate level of risk tolerance. This Trust attempts to
limit the decline in portfolio value in very adverse market conditions to 10%
over any twelve month period.

* THE CONSERVATIVE ASSET ALLOCATION TRUST seeks the highest total
return consistent with a conservative level of risk tolerance. This Trust
attempts to limit the decline in portfolio value in very adverse market
conditions to 5% over any twelve month period.

In pursuing the Strategic Bond and Investment Quality Bond Trusts'
investment objective, each portfolio expects to invest a portion of its assets
in high yield securities, commonly known as "junk bonds" which also present a
high degree of risk. The risk of these securities include price volatility and
risk of default in the payment of interest and principal. See "Risk Factors
Relating to High Yield Securities" contained in the NASL Series Trust
prospectus before investing in either Trust.

In pursuing the Global Equity, Strategic Bond, International Growth &
Income and Global Government Bond Trusts' investment objective, each portfolio
may invest a portion of its assets in foreign securities which may present
additional risks. See "Foreign Securities" in the NASL Series Trust prospectus
before investing in any of these Trusts.

If the shares of a Trust portfolio are no longer available for
investment or in the Company's judgment investment in a Trust portfolio becomes
inappropriate in view of the purposes of the Variable Account, the Company may
eliminate the shares of a portfolio and substitute shares of another portfolio
of the Trust or another open-end registered investment company. Substitution
may be made with respect to both existing investments and the investment of
future purchase payments. However, no such substitution will be made without
notice to the owner and prior approval of the Commission to the extent required
by the 1940 Act.

The Company will vote shares of the Trust portfolios held in the
Variable Account at meetings of shareholders of the Trust in accordance with
voting instructions received from the persons having the voting interest under
the contracts. The number of portfolio shares for which voting instructions
may be given will be determined by the Company in the manner described below,
not more than 90 days prior to the meeting of the Trust. Trust proxy material
will be distributed to each person having the voting interest under the
contract together with appropriate forms for giving voting instructions.
Portfolio shares held in the Variable Account that are attributable to owners
under contracts and as to which no timely instructions are received will be
voted by the Company in proportion to the instructions received. Portfolio
shares that are not attributable to owners under contracts will be voted by the
owners of such shares in their discretion.

Prior to the maturity date, the persons having the voting interest
under a contract are the owners and the number of votes as to each portfolio
for which voting instructions may be given by each is determined by dividing
the value of the owner's investment account corresponding to the sub-account in
which such portfolio shares are held by the net asset value per share of that
portfolio. After the maturity date, the person having the voting interest is
the annuitant and the number of votes as to each portfolio for which voting
instructions may be given is determined by dividing the reserve for the annuity
option selected by the annuitant allocated to the sub-account in which such
portfolio shares are held by the net asset value per share of that portfolio.
Generally, the number of votes tends to decrease as annuity payments progress
since the amount of reserves attributable to the annuity option will usually
decrease after commencement of annuity payments. The Company reserves the
right to make any changes in the voting rights described above that may be
permitted by the federal securities laws or regulations or interpretations of
these laws or regulations.

A full description of the Trust, including the investment objectives,
policies and restrictions of each of the portfolios is contained in the
Prospectus for the Trust which accompanies this Prospectus and should be read
by a prospective purchaser before investing.

DESCRIPTION OF THE CONTRACT

ELIGIBLE GROUPS

The contract may be issued to fund plans qualifying for special income
tax treatment under the Internal Revenue Code, such as individual retirement
accounts and annuities, pension and profit-sharing plans for corporations and
sole proprietorships/partnerships ("H.R. 10" and "Keogh" plans), tax-sheltered
annuities, and state and local government deferred compensation plans. (See
"QUALIFIED RETIREMENT PLANS") The contract is also designed so that it may be
used with non-qualified retirement plans, such as deferred compensation and
payroll savings plans and such other groups (trusteed or non-trusteed) as may

<PAGE> 17
be eligible under applicable law. Contracts have been issued to the Security
Life Trust, a trust established with United Missouri Bank, N.A., Kansas City,
Missouri, as group holder for groups comprised of persons who have brokerage
accounts with brokers having selling agreements with NASL Financial Services,
Inc., the principal underwriter of the contracts.

An eligible member of a group to which a contract has been issued may
become an owner under the contract by submitting a completed application, if
required by the Company, and a minimum purchase payment. A certificate
summarizing the rights and benefits of the owner under the contract will be
issued to an applicant acceptable to the Company. The Company reserves the
right to decline to issue a certificate to any person in its sole discretion.
All rights and privileges under the contract may be exercised by each owner as
to his or her interest unless expressly reserved to the group holder. However,
provisions of any plan in connection with which the contract was issued may
restrict an owner's ability to exercise such rights and privileges.

ACCUMULATION PROVISIONS

PURCHASE PAYMENTS

Purchase payments are paid to the Company at its Annuity Service
Office. The minimum purchase payment for any certificate is $30; however, at
least $300 must be paid for any certificate during the first certificate year.
Purchase payments may be made at any time. The Company may provide by separate
agreement for purchase payments to be automatically withdrawn from an owner's
bank account on a periodic basis. If a purchase payment would cause the
contract value for an owner to exceed $1,000,000 or the owner's contract value
already exceeds $1,000,000, additional purchase payments will be accepted only
with the prior approval of the Company.

The Company may, at its option, cancel a certificate and an owner's
participation under a contract at the end of any two consecutive certificate
years in which no purchase payments by or on behalf of the owner have been
made, if both (i) the total purchase payments made for the certificate, less
any withdrawals, are less than $2,000; and (ii) the contract value for the
owner at the end of such two year period is less than $2,000. The cancellation
of contract privileges may vary in certain states in order to comply with the
requirements of insurance laws and regulations in such state. Upon cancellation
the Company will pay the owner his or her contract value computed as of the
valuation period during which the cancellation occurs less any debt and less
the annual $30 administration fee. The amount paid will be treated as a
withdrawal for Federal tax purposes and thus may be subject to income tax and
to a 10% penalty tax. (See "FEDERAL TAX MATTERS")

Purchase payments are allocated among the investment options in
accordance with the percentages designated by the owner. In addition, owners
have the option to participate in the Guarantee Plus Program administered by
the Company. Under the Guarantee Plus Program the initial purchase payment is
split between the fixed and variable investment options. A percentage of the
initial purchase payment is allocated to the chosen fixed account, such that at
the end of the guaranteed period the fixed account will have grown to an amount
at least equal to the total initial purchase payment. The percentage depends
upon the current interest rate of the fixed investment option. The balance of
the initial purchase payment is allocated among the variable investment options
as indicated on the certificate application. Owners may elect to participate
in the Guarantee Plus Program and may obtain full information concerning the
program and its restrictions from their securities dealers or the Annuity
Service Office. An owner may change the allocation of subsequent purchase
payments at any time upon written notice to the Company or by telephone in
accordance with the Company's telephone transfer procedures.

ACCUMULATION UNITS

The Company will establish an investment account for each owner for
each variable account investment option to which such owner allocates purchase
payments. Purchase payments are credited to such investment accounts in the
form of accumulation units. The following discussion of accumulation units,
the value of accumulation units and the net investment factor formula pertains
only to the accumulations in the variable account investment options. The
parallel discussion regarding accumulations in the fixed account investment
options appears elsewhere in this Prospectus. (See "FIXED ACCOUNT INVESTMENT
OPTIONS")

The number of accumulation units to be credited to each investment
account is determined by dividing the net purchase payment allocated to that
investment account by the value of an accumulation unit for that investment
account for the valuation period during which the purchase payment is received
at the Company's Annuity Service Office complete with all necessary information
or, in the case of the first purchase payment for a certificate, pursuant to
the procedures described below.

<PAGE> 18
Initial purchase payments for a certificate received by mail will
usually be credited in the valuation period during which received at the
Annuity Service Office, and in any event not later than two business days after
receipt of all information necessary for processing issuance of the
certificate. The applicant will be informed of any deficiencies preventing
processing if the certificate cannot be issued and the purchase payment
credited within two business days after receipt. If the deficiencies are not
remedied within five business days, the purchase payment will be returned
promptly to the applicant, unless the applicant specifically consents to the
Company's retaining the purchase payment until all necessary information is
received. Initial purchase payments received by wire transfer from
broker-dealers will be credited in the valuation period during which received
where such broker-dealers have made special arrangements with the Company.

VALUE OF ACCUMULATION UNITS

The value of accumulation units will vary from one valuation period to
the next depending upon the investment results of the particular sub-accounts
to which purchase payments are allocated. The value of an accumulation unit
for each sub-account was arbitrarily set at $10 for the first valuation period
under contracts similar to the contracts described in this Prospectus. The
value of an accumulation unit for any subsequent valuation period is determined
by multiplying the value of an accumulation unit for the immediately preceding
valuation period by the net investment factor for such sub-account (described
below) for the valuation period for which the value is being determined.

NET INVESTMENT FACTOR

The net investment factor is an index used to measure the investment
performance of a sub-account from one valuation period to the next. The net
investment factor for each sub-account for any valuation period is determined
by dividing (a) by (b) and subtracting (c) from the result:

Where (a) is:

(1) the net asset value per share of a portfolio share held in
the sub-account determined at the end of the current valuation period,
plus

(2) the per share amount of any dividend or capital gain
distributions made by the portfolio on shares held in the sub-account if
the "ex-dividend" date occurs during the current valuation period.

Where (b) is:

the net asset value per share of a portfolio share held in the
sub-account determined as of the end of the immediately preceding
valuation period.

Where (c) is:

a factor representing the charges deducted from the sub-account
on a daily basis for administrative expenses and mortality and expense
risks. Currently, such factor is equal on an annual basis to 1.4%
(0.15% for administrative expenses and 1.25% for mortality and expense
risks).

The net investment factor may be greater or less than or equal to one;
therefore, the value of an accumulation unit may increase, decrease or remain
the same.

TRANSFERS AMONG INVESTMENT OPTIONS

Before the maturity date an owner may transfer amounts among his or her
variable account investment options and from such investment options to his or
her fixed account investment options at any time and without charge upon
written notice to the Company or by telephone if the owner authorizes the
Company in writing to accept telephone transfer requests. Accumulation units
will be canceled from the investment account from which amounts are transferred
and credited to the investment account to which amounts are transferred. The
Company will effect such transfers so that the contract value for a certificate
on the date of the transfer will not be affected by the transfer. The owner
must transfer at least $300 or, if less, the entire value of the investment
account. If after the transfer the amount remaining in the investment account
is less than $100, then the Company will transfer the entire

<PAGE> 19
amount instead of the requested amount. The Company reserves the right to
limit, upon notice, the maximum number of transfers an owner may make to one
per month or six at any time within a certificate year. In addition, the
Company reserves the right to defer the transfer privilege at any time that the
Company is unable to purchase or redeem shares of the Trust portfolios. The
Company also reserves the right to modify or terminate the transfer privilege
at any time in accordance with applicable law.

TELEPHONE TRANSACTIONS

Owners are permitted to request transfers/redemptions by telephone.
The Company will not be liable for following instructions communicated by
telephone that it reasonably believes to be genuine. To be permitted to
request a transfer/redemption by telephone, an owner must elect the option.
The Company will employ reasonable procedures to confirm that instructions
communicated by telephone are genuine and may only be liable for any losses due
to unauthorized or fraudulent instructions where it fails to employ its
procedures properly. Such procedures include the following. Upon telephoning a
request, owners will be asked to provide their account number, and if not
available, their social security number. For the owner's and Company's
protection, all conversations with owners will be tape recorded. All telephone
transactions will be followed by a confirmation statement of the transaction.

SPECIAL TRANSFER SERVICES - DOLLAR COST AVERAGING

The Company administers a Dollar Cost Averaging ("DCA") program which
enables an owner to pre-authorize a periodic exercise of the contractual
transfer rights described above. Owners entering into a DCA agreement instruct
the Company to transfer monthly a predetermined dollar amount from any
sub-account or the one year fixed account investment option to other
sub-accounts until the amount in the sub-account from which the transfer is
made or one year fixed account investment option is exhausted. The DCA program
is generally suitable for owners making a substantial deposit and who desire to
control the risk of investing at the top of a market cycle. The DCA program
allows such investments to be made in equal installments over time in an effort
to reduce such risk. Owners interested in the DCA program may elect to
participate in the program on the application or by separate application.
Owners may obtain a separate application and full information concerning the
program and its restrictions from their securities dealer or the Annuity
Service Office.

ASSET REBALANCING PROGRAM

The Company administers an Asset Rebalancing Program which enables an
owner to indicate to the Company the percentage levels he or she would like to
maintain in particular portfolios. On the last business day of every calendar
quarter, the owner's contract value will be automatically rebalanced to
maintain the indicated percentages by transfers among the portfolios. (Fixed
Account Investment Options are not eligible for participation in the Asset
Rebalancing Program.) The entire value of the variable investment accounts
must be included in the Asset Rebalancing Program. Other investment programs,
such as the DCA program, or other transfers or withdrawals may not work in
concert with the Asset Rebalancing Program. Therefore, owners should monitor
their use of these other programs and any other transfers or withdrawals while
the Asset Rebalancing Program is being used. Owners interested in the Asset
Rebalancing Program may obtain a separate application and full information
concerning the program and its restrictions from their securities dealer or the
Annuity Service Office.

WITHDRAWALS

Prior to the earlier of the maturity date or the death of an owner, an
owner may withdraw all or a portion of his or her contract value upon written
request complete with all necessary information to the Company's Annuity
Service Office. For certain qualified contracts, exercise of the withdrawal
right may require the consent of the qualified plan participant's spouse under
the Internal Revenue Code and regulations promulgated by the Treasury
Department. In the case of a total withdrawal, the Company will pay the
owner's contract value as of the date of receipt of the request at its Annuity
Service Office, less the annual $30 administration fee if applicable, any debt
and any applicable withdrawal charge, and the owner's certificate will be
canceled. In the case of a partial withdrawal, the Company will pay the amount
requested and cancel that number of accumulation units credited to each
investment account necessary to equal the amount withdrawn from each investment
account plus any applicable withdrawal charge deducted from such investment
account. (See "CHARGES AND DEDUCTIONS")

When making a partial withdrawal, the owner should specify the
investment options from which the withdrawal is to be made. The amount
requested from an investment option may not exceed the value of that investment
option less any applicable withdrawal charge. If the owner does not specify
the investment options from which a partial withdrawal is to be taken, a
partial

<PAGE> 20
withdrawal will be taken from the variable account investment options until
exhausted and then from the fixed account investment options, beginning with
the shortest guarantee period first and ending with the longest guarantee
period last. If the partial withdrawal is less than the total value in the
variable account investment options, the withdrawal will be taken pro rata from
the variable account investment options: taking from each such variable account
investment option an amount which bears the same relationship to the total
amount withdrawn as the value of such variable account investment option bears
to the total value of all the owner's investments in variable account
investment options.

For the rules governing the order and manner of withdrawals from the
fixed account investment options, see "FIXED ACCOUNT INVESTMENT OPTIONS."

There is no limit on the frequency of partial withdrawals; however, the
amount withdrawn must be at least $300 or, if less, the entire balance in the
investment option. If after the withdrawal (and deduction of any withdrawal
charge) the amount remaining in the investment option is less than $100, the
Company will treat the partial withdrawal as a withdrawal of the entire amount
held in the investment option. If a partial withdrawal plus any applicable
withdrawal charge would reduce the owner's contract value to less than $300,
the Company will treat the partial withdrawal as a total withdrawal of the
owner's contract value.

The amount of any withdrawal from the variable account investment
options will be paid promptly, and in any event within seven days of receipt of
the request, complete with all necessary information at the Company's Annuity
Service Office, except that the Company reserves the right to defer the right
of withdrawal or postpone payments for any period when: (1) the New York Stock
Exchange is closed (other than customary weekend and holiday closings), (2)
trading on the New York Stock Exchange is restricted, (3) an emergency exists
as a result of which disposal of securities held in the Variable Account is not
reasonably practicable or it is not reasonably practicable to determine the
value of the Variable Account's net assets, or (4) the Commission, by order, so
permits for the protection of security holders; provided that applicable rules
and regulations of the Commission shall govern as to whether the conditions
described in (2) and (3) exist.

Withdrawals from the contract may be subject to income tax and a 10%
penalty tax. Withdrawals are permitted from contracts or certificates issued
in connection with Section 403(b) qualified plans only under limited
circumstances. (See "FEDERAL TAX MATTERS")

TELEPHONE REDEMPTIONS. The owner may request the option to withdraw a
portion of his or her contract value by telephone by completing a separate
application. The Company reserves the right to impose maximum withdrawal
amounts and procedural requirements regarding this privilege. For additional
information on Telephone Redemptions see "Telephone Transactions" above.

SPECIAL WITHDRAWAL SERVICES - INCOME PLAN

The Company administers an Income Plan ("IP") which enables an owner to
pre-authorize a periodic exercise of the contractual withdrawal rights
described above. Owners entering into an IP agreement instruct the Company to
withdraw a level dollar amount from specified investment options on a periodic
basis. The total of IP withdrawals in a certificate year is limited to not
more than 10% of the purchase payments made by or on behalf of the owner to
ensure that no withdrawal or market value charge will ever apply to an IP
withdrawal. If an additional withdrawal is made by an owner participating in
an IP, the IP will terminate automatically and may be reinstated only on or
after the next certificate anniversary. The IP is not available to owners
participating in the dollar cost averaging program or for which purchase
payments are being automatically deducted from a bank account on a periodic
basis. IP withdrawals will be free of withdrawal and market value charges. IP
withdrawals may, however, be subject to income tax and a 10% penalty tax. (See
"FEDERAL TAX MATTERS") Owners interested in an IP may elect to participate in
this program may obtain a separate application and full information concerning
the program and its restrictions from their securities dealer or the Annuity
Service Office.

LOANS

The Company offers a loan privilege only under contracts or
certificates issued in connection with Section 403(b) qualified plans that are
not subject to Title I of ERISA. Where available, owners may obtain loans
using their contract value as the only security for the loan. Loans are
subject to provisions of the Code and to applicable retirement program rules
(collectively, "loan rules"). Tax advisers and retirement plan fiduciaries
should be consulted prior to exercising loan privileges.

<PAGE> 21
Under the terms of the contract, the maximum loan value is equal to 80%
of an owner's contract value, although loan rules may serve to reduce such
maximum loan value in some cases. The amount available for a loan at any given
time is the loan value less any outstanding debt. Debt equals the amount of
any loans taken by the owner plus accrued interest. Loans will be made only
upon written request from the owner. The Company will make loans within seven
days of receiving a properly completed loan application (applications are
available from the Annuity Service Office), subject to postponement under the
same circumstances that payment of withdrawals may be postponed. (See
"WITHDRAWALS")

When an owner requests a loan, the Company will reduce the owner's
investment in the investment accounts and transfer the amount of the loan to
the owner's loan account, a part of the Company's general account. The owner
may designate the investment accounts from which the loan is to be withdrawn.
Absent such a designation, the amount of the loan will be withdrawn from the
owner's investment accounts in accordance with the rules for making partial
withdrawals. (See "WITHDRAWALS") The contract provides that owners may repay
contract debt at any time. Under applicable loan rules, loans generally must
be repaid within five years, repayments must be made at least quarterly and
repayments must be made in substantially equal amounts. When a loan is repaid,
the amount of the repayment will be transferred from the owner's loan account
to the investment accounts. The owner may designate the investment accounts to
which a repayment is to be allocated. Otherwise, the repayment will be
allocated in the same manner as the owner's most recent purchase payment. On
each certificate anniversary, the Company will transfer from the owner's
investment accounts to his or her loan account the amount by which the owner's
debt exceeds the balance in his or her loan account.

The Company charges interest of 6% per year on contract loans. Loan
interest is payable in arrears and, unless paid in cash, the accrued loan
interest is added to the amount of the owner's debt and bears interest at 6% as
well. The Company credits interest with respect to amounts held in the owner's
loan account at a rate of 4% per year. Consequently, the net cost of loans
under the contract is 2%. If on any date an owner's debt exceeds his or her
contract value, there will be a default as to the owner. In such case the
owner will receive a notice indicating the payment needed to cure the default
and will have a thirty-one day grace period within which to pay the default
amount. If the required payment is not made within the grace period, the
contract may be foreclosed as to that owner (terminated without value) and the
certificate canceled.

The amount of an owner's debt will be deducted from the death benefit
otherwise payable to the beneficiary. (See "DEATH BENEFIT BEFORE MATURITY
DATE") In addition, debt, whether or not repaid, will have a permanent effect
on an owner's contract value because the investment results of the investment
accounts will apply only to the unborrowed portion of the contract value. The
longer debt is outstanding, the greater the effect is likely to be. The effect
could be favorable or unfavorable. If the investment results are greater than
the rate being credited on amounts held in the loan account while the debt is
outstanding, the owner's contract value will not increase as rapidly as it
would have if no debt were outstanding. If investment results are below that
rate, the contract value will be higher than it would have been had no debt
been outstanding.

DEATH BENEFIT BEFORE MATURITY DATE

In General. The following discussion applies principally to contracts
and certificates that are not issued in connection with qualified plans, i.e.,
a "non-qualified" contract or certificate. The requirements of the tax law
applicable to qualified plans, and the tax treatment of amounts held and
distributed under such plans, are quite complex. Accordingly, a prospective
purchaser of a contract or certificate to be used in connection with a
qualified plan should seek competent legal and tax advice regarding the
suitability of the contract or certificate for the situation involved and the
requirements governing the distribution of benefits, including death benefits,
from a contract or certificate used in the plan. In particular, a prospective
purchaser who intends to use the contract or certificate in connection with a
qualified plan should consider that the contract provides a death benefit
(described below) that could be characterized as an incidental death benefit.
There are limits on the amount of incidental benefits that may be provided
under certain qualified plans and the provision of such benefits may result in
currently taxable income to plan participants. (See "FEDERAL TAX MATTERS").
See APPENDIX D for information on death benefit provisions applicable to
certain contracts which are no longer being issued (Ven 8 contracts).

Amount of Death Benefit. If any owner dies on or prior to his or her
85th birthday and the oldest owner had an attained age of less than 81 years on
the certificate date, the death benefit will be determined as follows: During
the first certificate year, the death benefit will be the greater of: (a) the
contract value or (b) the sum of all purchase payments made, less any amounts
deducted in connection with partial withdrawals made by or on behalf of the
owner. During any subsequent certificate year, the death benefit will be the
greater of: (a) the contract value or (b) the death benefit on the last day of
the previous certificate year, plus any purchase

<PAGE> 22
payments made and less any amounts deducted in connection with partial
withdrawals made by or on behalf of the owner since then.

The determination of the death benefit will be made on the date written
notice and proof of death, as well as all required claims forms, are received
at the Company's Annuity Service Office. No person is entitled to the death
benefit until this time. In addition, partial withdrawals include amounts
applied under an annuity option under the contract. Also, amounts deducted in
connection with partial withdrawals include charges imposed on a partial
withdrawal, but not amounts charged in payment of the annual administration
fee. If the owner has any debt under the contract, the death benefit equals
the death benefit, as described above, less such debt.

Payment of Death Benefit. The Company will pay the death benefit
(which, as defined above, is net of any debt) to the beneficiary if any owner
dies before the maturity date. If there is a surviving owner, that owner will
be deemed to be the beneficiary. No death benefit is payable on the death of
any annuitant, except that if any owner is not a natural person, the death of
any annuitant will be treated as the death of an owner. On the death of the
last surviving annuitant, the owner, if a natural person, will become the
annuitant unless the owner designates another person as the annuitant.

The death benefit may be taken in the form of a lump sum immediately.
If not taken immediately, the certificate will continue subject to the
following: (1) The beneficiary will become the owner. (2) Any excess of the
death benefit over the contract value will be allocated to the owner's
investment accounts in proportion to their relative values on the date of the
Company's receipt at its Annuity Service Office of written notice and proof of
death and all required claim forms. (3) No additional purchase payments may be
made. (4) If the beneficiary is not the deceased's owner spouse, distribution
of the owner's entire interest in the certificate must be made within five
years of the owner's death, or alternatively, distribution may be made as an
annuity, under one of the annuity options described below, which begins within
one year of the owner's death and is payable over the life of the beneficiary
or over a period not extending beyond the life expectancy of the beneficiary.
Upon the death of the beneficiary, the death benefit will equal the contract
value which must be distributed immediately in a single sum. (5) If the owner's
spouse is the beneficiary, the certificate will continue with the spouse as the
new owner. In such a case, the distribution rules described in "(4)" applicable
when an owner dies will apply when the spouse, as the owner, dies. (6) If any
owner dies and the oldest owner had an attained age of less than 81 on the
certificate date, withdrawal charges are not applied on payment of the death
benefit (whether taken through a partial or total withdrawal or applied under
an annuity option). If any owner dies and the oldest owner had an attained age
greater than 80 on the certificate date, withdrawal charges will be assessed
only upon payment of the death benefit (if such charges are otherwise
applicable), so that if the death benefit is paid in a subsequent year, a lower
withdrawal charge will be applicable.

If any annuitant is changed and any owner is not a natural person, the
entire interest in the certificate must be distributed to the owner within five
years.

A substitution or addition of any owner may result in resetting the
death benefit to an amount equal to the contract value as of the date of the
change and treating such value as a payment made on that date for purposes of
computing the amount of the death benefit. In addition, all purchase payments
made and all amounts deducted in connection with partial withdrawals prior to
the date of the change of owner will not be considered in the determination of
the death benefit. Furthermore, the death benefit on the last day of the
previous contract year shall be set to zero as of the date of the owner change.
No such change in death benefit will be made if the individual whose death will
cause the death benefit to be paid is the same after the change in ownership or
if ownership is transferred to the owner's spouse.

Death benefits will be paid within seven days of the date the amount of
the death benefit is determined, as described above, subject to postponement
under the same circumstances that payment of withdrawals may be postponed. (See
"WITHDRAWALS")

<PAGE> 23
ANNUITY PROVISIONS

GENERAL

Proceeds payable on death, withdrawal or the maturity date may be
applied to the annuity options described below, subject to the distribution of
death benefits provisions. ( See "DEATH BENEFIT BEFORE MATURITY DATE")

Generally, annuity benefits under the contract will begin on the
maturity date of the certificate. The maturity date is the date specified on
the certificate specifications page, unless changed. If no date is specified,
the maturity date is the maximum maturity date described below. The maximum
maturity date is the first day of the month following the later of the 85th
birthday of the annuitant or the tenth contract anniversary. An owner may
specify a different maturity date at any time by written request at least one
month before both the previously specified and the new maturity date. The new
maturity date may not be later than the maximum maturity date unless the
Company consents. Maturity dates which occur at advanced ages, e.g., past age
85, may in some circumstances have adverse income tax consequences. See
"FEDERAL TAX MATTERS" Distributions from qualified contracts may be required
before the maturity date.

An owner may select the frequency of annuity payments. However, if the
owner's contract value at the maturity date is such that a monthly payment
would be less than $20, the Company may pay the contract value, less any debt,
in one lump sum to the annuitant on the maturity date.

ANNUITY OPTIONS

Annuity benefits are available under the contract on a fixed or
variable basis, or any combination of fixed and variable bases. On or before
the maturity date, an owner may select one or more of the annuity options
described below on a fixed and/or variable basis (except Option 5 which is
available on a fixed basis only) or choose an alternate form of settlement
acceptable to the Company. If an annuity option is not selected, the Company
will provide as a default option annuity payments on a fixed, variable or
combined fixed and variable basis in proportion to the Investment Account Value
of each investment option at the maturity date. Annuity payments will continue
for 10 years or the life of the annuitant, if longer. Treasury Department
regulations may preclude the availability of certain annuity options in
connection with certain qualified contracts.

<TABLE>
The following annuity options are guaranteed in the contract:
<S> <C>
Option 1(a): Non-Refund Life Annuity - An annuity with payments
during the lifetime of the annuitant. No payments are
due after the death of the annuitant. Since there is
no guarantee that any minimum number of payments will
be made, an annuitant may receive only one payment if
the annuitant dies prior to the date the second payment
is due.

Option 1(b): Life Annuity with Payments Guaranteed for 10 Years -
An annuity with payments guaranteed for 10 years and
continuing thereafter during the lifetime of the
annuitant. Since payments are guaranteed for 10 years,
annuity payments will be made to the end of such period
if the annuitant dies prior to the end of the tenth
year.

Option 2(a): Joint & Survivor Non-Refund Life Annuity - An annuity
with payments during the lifetimes of the annuitant and
a designated co-annuitant. No payments are due after
the death of the last survivor of the annuitant and
co-annuitant. Since there is no guarantee that any
minimum number of payments will be made, an annuitant
or co-annuitant may receive only one payment if the
annuitant and co-annuitant die prior to the date the
second payment is due.

Option 2(b): Joint & Survivor Life Annuity with Payments Guaranteed
for 10 Years - An annuity with payments guaranteed for
10 years and continuing thereafter during the lifetimes
of the annuitant and a designated co-annuitant. Since
payments are guaranteed for 10 years, annuity payments
will be made to the end of such period if both the
annuitant and the co-annuitant die prior to the end of
the tenth year.
</TABLE>

<PAGE> 24
In addition to the foregoing annuity options which the Company is
contractually obligated to offer at all times, the Company currently offers the
following annuity options. The Company may cease offering the following
annuity options at any time and may offer other annuity options in the future.

<TABLE>
<S> <C>
Option 3: Life annuity with Payments Guaranteed for 5, 15 or 20
Years - An annuity with payments guaranteed for 5, 15
or 20 years and continuing thereafter during the
lifetime of the annuitant. Since payments are
guaranteed for the specific number of years, annuity
payments will be made to the end of the last year of
the 5, 15 or 20 year period.

Option 4: Joint & Two-Thirds Survivor Non-Refund Life Annuity -
An annuity with full payments during the joint lifetime
of the annuitant and a designated co-annuitant and
two-thirds payments during the lifetime of the
survivor. Since there is no guarantee that any minimum
number of payments will be made, an annuitant or
co-annuitant may receive only one payment if the
annuitant and co-annuitant die prior to the date the
second payment is due.

Option 5: Period Certain Only Annuity for 5, 10, 15 or 20 years -
An annuity with payments for a 5, 10, 15 or 20 year
period and no payments thereafter.

</TABLE>

DETERMINATION OF AMOUNT OF THE FIRST VARIABLE ANNUITY PAYMENT

The first variable annuity payment is determined by applying that
portion of the contract value for a certificate used to purchase a variable
annuity, measured as of a date not more than ten business days prior to the
maturity date (minus any applicable premium taxes), to the annuity tables
contained in the contract and the certificate. The rates contained in such
tables depend upon the annuitant's age (as adjusted depending on the
annuitant's year of birth) and the annuity option selected. Under such tables,
the longer the life expectancy of the annuitant under any life annuity option
or the duration of any period for which payments are guaranteed under the
option, the smaller will be the amount of the first monthly variable annuity
payment. The rates are based on the 1983 Table A projected at Scale G, assume
births in year 1942 and reflect an assumed interest rate of 3% per year. See
Appendix D for information on assumed interest rates applicable to certain
contracts which are no longer being issued (Ven 8 contracts).

ANNUITY UNITS AND THE DETERMINATION OF SUBSEQUENT VARIABLE ANNUITY PAYMENTS

Variable annuity payments subsequent to the first will be based on the
investment performance of the sub-accounts selected by the owner. The amount
of such subsequent payments is determined by dividing the amount of the first
annuity payment from each sub-account by the annuity unit value of such
sub-account (as of the same date the contract value used to effect annuity
payments under a certificate was determined) to establish the number of annuity
units which will thereafter be used to determine payments. This number of
annuity units for each sub-account is then multiplied by the appropriate
annuity unit value as of a uniformly applied date not more than ten business
days before the annuity payment is due, and the resulting amounts for each
sub-account selected by the owner are then totaled to arrive at the amount of
the payment to be made. The number of annuity units remains constant during
the annuity payment period. A pro-rata portion of the administration fee will
be deducted from each annuity payment.

The value of an annuity unit for each sub-account for any valuation
period is determined by multiplying the annuity unit value for the immediately
preceding valuation period by the net investment factor for that sub-account
(see "NET INVESTMENT FACTOR") for the valuation period for which the annuity
unit value is being calculated and by a factor to neutralize the assumed
interest rate.

A 3% assumed interest rate is built into the annuity tables in the contract
used to determine the first variable annuity payment. A higher assumption
would mean a larger first annuity payment, but more slowly rising subsequent
payments when actual investment performance exceeds the assumed rate, and more
rapidly falling subsequent payments when actual investment performance is less
than the assumed rate. A lower assumption would have the opposite effect. If
the actual net investment performance is 3% annually, annuity payments will be
level.

<PAGE> 25
TRANSFERS AFTER MATURITY DATE

Once variable annuity payments have begun, an owner may transfer all or
part of the investment upon which such payments are based from one sub-account
to another. Transfers will be made upon notice to the Company at least 30 days
before the due date of the first annuity payment to which the change will
apply. Transfers after the maturity date will be made by converting the number
of annuity units being transferred by the owner to the number of annuity units
of the sub-account to which the transfer is made, so that the next annuity
payment if it were made at that time would be the same amount that it would
have been without the transfer. Thereafter, annuity payments will reflect
changes in the value of the new annuity units. Once annuity payments have
commenced, no transfers may be made from a fixed annuity option to a variable
annuity option or from a variable annuity option to a fixed annuity option. The
Company reserves the right to limit, upon notice, the maximum number of
transfers an owner may make per certificate year to four. In addition, the
Company reserves the right to defer the transfer privilege at any time that the
Company is unable to purchase or redeem shares of the Trust portfolios. The
Company also reserves the right to modify or terminate the transfer privilege
at any time in accordance with applicable law.

DEATH BENEFIT ON OR AFTER MATURITY DATE

If annuity payments have been selected based on an annuity option
providing for payments for a guaranteed period, and the annuitant dies on or
after the maturity date, the Company will make the remaining guaranteed
payments to the beneficiary. Any remaining payments will be made as rapidly as
under the method of distribution being used as of the date of the annuitant's
death. If no beneficiary is living, the Company will commute any unpaid
guaranteed payments to a single sum (on the basis of the interest rate used in
determining the payments) and pay that single sum to the estate of the last to
die of the annuitant and the beneficiary.

OTHER CONTRACT PROVISIONS

TEN DAY RIGHT TO REVIEW

An owner may return his or her certificate to the Company's Annuity
Service Office or agent at any time within 10 days after receipt of the
certificate. Within 7 days of receipt of the certificate by the Company, the
Company will pay the owner's contract value, less any debt, computed at the end
of the valuation period during which the certificate is received by the
Company, to the owner.

No withdrawal charge is imposed upon return of the certificate within
the ten day right to review period. The ten day right to review may vary in
certain states in order to comply with the requirements of insurance laws and
regulations in such states. When the certificate is issued as an individual
retirement annuity under Internal Revenue Code section 408, during the first 7
days of the 10 day period, the Company will return all purchase payments if
this is greater than the amount otherwise payable.

OWNERSHIP

The contract is owned by the group holder. However, all contract
rights and privileges not expressly reserved to the group holder may be
exercised by each owner as to his or her interests as specified in his or her
certificate. Prior to the maturity date, an owner is the person designated on
the certificate specifications page or as subsequently named. On and after a
certificate's maturity date, the annuitant is the owner. If amounts become
payable under the certificate to any beneficiary, the beneficiary is the owner.

In the case of non-qualified contracts, an owner's interest in the
contract may be changed, or the certificate may be collaterally assigned, at
any time prior to the maturity date, subject to the rights of any irrevocable
beneficiary. Ownership of the contract may be assigned at any time by the
group holder. Assigning a contract or interest therein, or changing the
ownership of a contract or certificate, may be treated as a distribution of the
contract value for Federal tax purposes. A change of any owner may result in
resetting the death benefit to an amount equal to the contract value as of the
date of the change and treating such value as a purchase payment made on that
date for purposes of computing the amount of the death benefit. See "DEATH
BENEFIT BEFORE MATURITY DATE"

Any change of ownership or assignment must be made in writing. Any
change must be approved by the Company. Any assignment and any change, if
approved, will be effective as of the date the Company receives the request at
its Annuity Service Office. The Company assumes no liability for any payments
made or actions taken before a change is approved or an assignment is

<PAGE> 26
accepted or responsibility for the validity or sufficiency of any assignment.
An absolute assignment will revoke the interest of any revocable beneficiary.

In the case of qualified contracts, ownership of the contract or an
owner's interest in the contract generally may not be transferred except to the
trustee of an exempt employees' trust which is part of a retirement plan
qualified under Section 401 of the Internal Revenue Code or as otherwise
permitted by applicable IRS regulations. Subject to the foregoing, an owner's
interest in a qualified contract may not be sold, assigned, transferred,
discounted or pledged as collateral for a loan or as security for the
performance of an obligation or for any other purpose to any person other than
the Company.

See Appendix D for information on ownership applicable to certain
contracts which are no longer being issued (Ven 8 contracts).

BENEFICIARY

The beneficiary is the person, persons or entity designated on the
certificate specifications page or as subsequently named. However, if there is
a surviving owner, that person will be treated as the beneficiary. The
beneficiary may be changed subject to the rights of any irrevocable
beneficiary. Any change must be made in writing, approved by the Company and
if approved, will be effective as of the date on which written. The Company
assumes no liability for any payments made or actions taken before the change
is approved. If no beneficiary is living, the contingent beneficiary will be
the beneficiary. The interest of any beneficiary is subject to that of any
assignee. If no beneficiary or contingent beneficiary is living, the
beneficiary is the estate of the deceased owner. In the case of certain
qualified contracts or certificates, regulations promulgated by the Treasury
Department prescribe certain limitations on the designation of a beneficiary.

See Appendix D for information on ownership applicable to certain
contracts which are no longer being issued (Ven 8 contracts).

ANNUITANT

The annuitant is any natural person or persons whose life is used to
determine the duration of annuity payments involving life contingencies. If
the owner names more than one person as an "annuitant," the second person named
shall be referred to as "co-annuitant." The annuitant is as designated on the
contract specifications page or in the application, unless changed.

On the death of the annuitant, the co-annuitant, if living, becomes the
annuitant. If there is no living co-annuitant, the owner becomes the
annuitant. In the case of certain qualified contracts, there are limitations
on the ability to designate and change the annuitant and the co-annuitant.

MODIFICATION

The contract or any certificate may not be modified by the Company
without the consent of the group holder or the owner, as applicable, except as
may be required to make it conform to any law or regulation or ruling issued by
a governmental agency. However, on 60 days' notice to the group holder, the
Company may change the withdrawal charges, administration fees, mortality and
expense risk charges, free withdrawal percentage, annuity purchase rates and
the market value charge as to any certificates issued after the effective date
of the modification. The provisions of the contract shall be interpreted so as
to comply with the requirements of Section 72(s) of the Internal Revenue Code.

See Appendix D for information on ownership applicable to certain
contracts which are no longer being issued (Ven 8 contracts).

DISCONTINUANCE OF NEW OWNERS

On thirty days' notice to the group holder, the Company may limit or
discontinue acceptance of new applications and the issuance of new certificates
under a contract.

<PAGE> 27
FIXED ACCOUNT INVESTMENT OPTIONS

Due to certain exemptive and exclusionary provisions, interests in the
fixed account investment options are not registered under the Securities Act of
1933 ("1933 Act") and the Company's general account is not registered as an
investment company under the Investment Company Act of 1940 ("1940 Act").
Accordingly, neither interests in the fixed account investment options nor the
general account are subject to the provisions or restrictions of the 1933 Act
or the 1940 Act and the staff of the Commission has not reviewed the
disclosures in this Prospectus relating thereto. Disclosures relating to
interests in the fixed account investment options and the general account,
however, may be subject to certain generally applicable provisions of the
federal securities laws relating to the accuracy of statements made in a
registration statement.

Pursuant to a Guarantee Agreement dated November 19, 1993, North
American Life, parent of the Company, unconditionally guarantees to the Company
on behalf of and for the benefit of the Company and owners and groupholders of
fixed annuity contracts issued by the Company that it will, on demand, make
funds available to the Company for the timely payment of contractual claims
under fixed annuity contracts. This Guarantee covers the fixed portion of the
contracts described by this Prospectus. This Guarantee may be terminated by
North American Life on notice to the Company. Termination will not affect
North American Life's continuing liability with respect to all fixed annuity
contracts issued prior to the termination of the Guarantee.

Investment Options. Currently there are four fixed account investment
options under the contract: one, three, five and seven year investment
accounts. The Company may offer additional fixed account investment options
for any yearly period from two to ten years. Fixed investment accounts provide
for the accumulation of interest on purchase payments at guaranteed rates for
the duration of the guarantee period. The guaranteed interest rates on new
amounts allocated or transferred to a fixed investment account are determined
from time-to-time by the Company in accordance with market conditions. In no
event will the guaranteed rate of interest be less than 3%. Once an interest
rate is guaranteed for a fixed investment account, it is guaranteed for the
duration of the guarantee period and may not be changed by the Company. See
Appendix D for information on fixed account investment options and the
guaranteed rate of interest applicable to certain contracts which are no longer
being issued (Ven 8 contracts).

Investment Accounts. Owners may allocate purchase payments, or make
transfers from their variable investment options, to fixed account investment
options at any time prior to the maturity date. The Company establishes a
separate investment account each time an owner allocates or transfers amounts
to a fixed account investment option, except that amounts allocated or
transferred to the same fixed account investment option on the same day will
establish a single investment account. Amounts may not be allocated to a fixed
account investment option that would extend the guarantee period beyond the
maturity date.

Renewals. At the end of a guarantee period, an owner may establish a
new investment account with the same guarantee period at the then current
interest rate, select a different fixed account investment option or transfer
the amounts to a variable account investment option, all without the imposition
of any charge. An owner may not select a guarantee period that would extend
beyond the maturity date. In the case of renewals within one year of the
maturity date, the only fixed account investment option available is to have
interest accrued up to the maturity date at the then current interest rate for
one year guarantee periods.

If an owner does not specify the renewal option desired, the Company
will select the same guarantee period as has just expired, so long as such
period does not extend beyond the maturity date. In the event a renewal would
extend beyond the maturity date, the Company will select the longest period
that will not extend beyond such date, except in the case of a renewal within
one year of the maturity date in which case the Company will credit interest up
to the maturity date at the then current interest rate for one year guarantee
periods.

Market Value Charge. Any amount withdrawn, transferred or borrowed
from an investment account prior to the end of the guarantee period may be
subject to a market value charge. A market value charge will be calculated
separately for each investment account affected by a transaction to which a
market value charge may apply. The market value charge for an investment
account will be calculated by multiplying the amount withdrawn or transferred
from the investment account by the adjustment factor described below. The
Company reserves the right to modify the market value charge as to any
certificates issued after the effective date of a charge specified in written
notice to the group holder.

The adjustment factor is determined by the following formula:

0.75 x (B-A) x C/12 where:

A - The guaranteed interest rate on the investment account.

<PAGE> 28

B - The guaranteed interest rate available, on the date the
request is processed, for amounts allocated to a new
investment account with the same length of guarantee period
as the investment account from which the amounts are being
withdrawn.

C - The number of complete months remaining to the end of the
guarantee period.

For purposes of applying this calculation, the maximum difference
between "B" and "A" will be 3%. The adjustment factor may never be less than
zero.

The total market value charge will be the sum of the market value
charges for each investment account being withdrawn. Where the guaranteed rate
available on the date of the request is less than the rate guaranteed on the
investment account from which the amounts are being withdrawn (B-A in the
adjustment factor is negative), there is no market value charge. There is only
a market value charge when interest rates have increased (B-A in the adjustment
factor is positive).

There will be no market value charge on withdrawals from the fixed
account investment options in the following situations: (a) death of the owner:
(b) amounts withdrawn to pay fees or charges; (c) amounts applied at the
maturity date to purchase an annuity at the guaranteed rates provided in the
certificate; (d) amounts withdrawn from investment accounts within one month
prior to the end of the guarantee period; (e) amounts withdrawn from a one-year
fixed investment account; and (f) amounts withdrawn in any certificate year
that do not exceed 10% of (i) total purchase payments less (ii) any prior
partial withdrawals in that certificate year.

Notwithstanding application of the foregoing formula, in no event will
the market value charge (i) be greater than the amount by which the earnings
attributable to the amount withdrawn or transferred from an investment account
exceed an annual rate of 3%, (ii) together with any withdrawal charges for an
investment account be greater than 10% of the amount transferred or withdrawn,
or (iii) reduce the amount payable on withdrawal or transfer below the amount
required under the non-forfeiture laws of the state with jurisdiction over the
contract. The cumulative effect of the market value and withdrawal charges (or
the effect of the withdrawal charge itself) could, however, result in an owner
receiving total withdrawal proceeds of less than the owner's investment in the
contract. See Appendix D for information on the market value charge applicable
to certain contracts which are no longer being issued (Ven 8 contracts).

Transfers. Prior to the maturity date, an owner may transfer amounts
among his or her fixed account investment options and from the fixed account
investment options to his or her variable account investment options, subject
to the following conditions. An amount in a fixed investment account may not
be transferred until held in such account for at least one year, except (i)
transfers may be made pursuant to the Dollar Cost Averaging program and (ii)
transfers may be made from a one year fixed investment account to the variable
account investment options if, at the time of the transfer, the guaranteed
interest rate for the funds to be transferred is equal to or greater than the
then current guaranteed rate for funds being transferred into a one year fixed
investment option. The Company may withdraw its permission to make the
transfers described in (ii) above at any time after April 30, 1996.
Consequently, except as noted above, amounts in one year investment accounts
effectively may not be transferred prior to the end of the guarantee period.
Amounts in any other investment accounts may be transferred after the one year
holding period has been satisfied, but the market value charge described above
may apply to such a transfer. The market value charge, if applicable, will be
deducted from the amount transferred.

An owner must specify the fixed account investment option from or to
which a transfer is to be made. Where there are multiple investment accounts
within a fixed account investment option, amounts must be withdrawn from the
fixed account investment option on a first-in-first-out basis.

Withdrawals. An owner may make total and partial withdrawals of
amounts held in his or her fixed account investment options at any time prior
to the earlier of the death of an owner or the maturity date. Withdrawals from
fixed account investment options will be made in the same manner and be subject
to the same limitations as set forth under "WITHDRAWALS" plus the following
provisions also apply to withdrawals from fixed account investment options: (1)
the Company reserves the right to defer payment of amounts withdrawn from fixed
account investment options for up to six months from the date it receives the
written withdrawal request and certificate if required (if a withdrawal is
deferred for more than 30 days pursuant to this right, the Company will pay
interest on the amount deferred at a rate not less than 3% per year); (2) if
there are multiple investment accounts under a fixed account investment option,
amounts must be withdrawn from such accounts on a first-in-first-out basis; and
(3) the market value charge described above may apply to withdrawals from any
investment option except for a one year investment option. In the event a
market value charge applies to a withdrawal from a fixed investment account, it
will be calculated with respect to the full

<PAGE> 29
amount in the investment account and deducted from the amount payable in the
case of a total withdrawal. In the case of a partial withdrawal, the market
value charge will be calculated on the amount requested and deducted, if
applicable, from the remaining investment account value.

Where an owner requests a partial withdrawal in excess of his or her
amounts in the variable account investment options and does not specify the
fixed account investment options from which the withdrawal is to be made, such
withdrawal will be made from his or her investment options beginning with the
shortest guarantee period. Within such sequence, where there are multiple
investment accounts within a fixed account investment option, withdrawals will
be made on a first-in-first-out basis.

Withdrawals from the contract may be subject to income tax and a 10%
penalty tax, and withdrawals are permitted from contracts and certificates
issued in connection with Section 403(b) qualified plans only under limited
circumstances. (See "FEDERAL TAX MATTERS")

Loans. The Company offers a loan privilege only under contracts or
certificates issued in connection with Section 403(b) qualified plans that are
not subject to Title I of ERISA. Where available, owners may obtain loans
using their contract value as the only security for the loan. Owners may
borrow amounts allocated to their fixed investment accounts in the same manner
and subject to the same limitations as set forth under "LOANS." The market
value charge described above may apply to amounts transferred from the fixed
investment accounts to the loan account in connection with such loans and, if
applicable, will be deducted from the amount so transferred.

Fixed Annuity Options. Subject to the distribution of death benefits
provisions (see "DEATH BENEFIT BEFORE MATURITY DATE)", on death, withdrawal or
the maturity date, the proceeds may be applied to a fixed annuity option. (See
"ANNUITY OPTIONS") The amount of each fixed annuity payment is determined by
applying the portion of the proceeds (less any applicable premium taxes)
applied to purchase the fixed annuity to the appropriate table in the contract.
If the table in use by the Company is more favorable to the owner, the Company
will substitute that table. The Company guarantees the dollar amount of fixed
annuity payments.

CHARGES AND DEDUCTIONS

Charges and deductions are assessed against purchase payments, contract
values or annuity payments. Currently, there are no deductions made from
purchase payments, except for premium taxes in certain states. In addition,
there are deductions from and expenses paid out of the assets of the Trust
portfolios that are described in the accompanying Prospectus of the Trust.

WITHDRAWAL CHARGES

If a withdrawal is made from the contract by an owner before the
maturity date of the certificate, a withdrawal charge (contingent deferred
sales charge) may be assessed against amounts withdrawn attributable to
purchase payments that have been in the contract for the owner less than seven
complete years. There is never a withdrawal charge with respect to earnings
accumulated for an owner in the contract, certain other free withdrawal amounts
described below or purchase payments by or on behalf of the owner that have
been in the contract more than seven complete years. In no event may the total
withdrawal charges exceed 6% of the total purchase payments made by or on
behalf of the owner. The amount of the withdrawal charge and when it is
assessed is discussed below:

1. Each withdrawal is allocated first to the "free withdrawal amount"
and second to "unliquidated purchase payments" for each certificate. In any
certificate year, the free withdrawal amount for that year is the greater of
(1) the excess of the owner's contract value on the date of withdrawal over the
unliquidated purchase payments made by or on behalf of the owner (the
accumulated earnings on the owner's certificate) or (2) the excess of (i) over
(ii), where (i) is 10% of total purchase payments made by or on behalf of the
owner and (ii) is all prior partial withdrawals made by or on behalf of the
owner in that certificate year. Withdrawals allocated to the free withdrawal
amount may be withdrawn without the imposition of a withdrawal charge.

2. If an owner makes a withdrawal for an amount in excess of the free
withdrawal amount, the excess will be allocated to purchase payments made by or
on behalf of the owner which will be liquidated on a first-in first-out basis.
On any withdrawal request, the Company will liquidate purchase payments made by
or on behalf of the owner equal to the amount of the withdrawal

<PAGE> 30
request which exceeds the free withdrawal amount in the order such purchase
payments were made: the oldest unliquidated purchase payment first, the next
purchase payment second, etc. until all purchase payments have been liquidated.

3. Each purchase payment or portion thereof liquidated in connection
with a withdrawal request is subject to a withdrawal charge based on the length
of time the purchase payment has been in the contract. The amount of the
withdrawal charge is calculated by multiplying the amount of the purchase
payment being liquidated by the applicable withdrawal charge percentage
obtained from the table below.

<TABLE>
<CAPTION>
NUMBER OF COMPLETE YEARS
PURCHASE PAYMENT IN WITHDRAWAL CHARGE
CONTRACT PERCENTAGE
--------------------------------------------------------
<S> <C>
0 6%
1 6%
2 5%
3 5%
4 4%
5 3%
6 2%
7+ 0%
</TABLE>

The total withdrawal charge will be the sum of the withdrawal charges
for the purchase payments being liquidated.

4. The withdrawal charge is deducted from the owner's contract value
remaining after the owner is paid the amount requested, except in the case of a
complete withdrawal when it is deducted from the amount otherwise payable. In
the case of a partial withdrawal, the amount requested from an investment
account may not exceed the value of that investment account less any applicable
withdrawal charge plus market value charge.

5. There is generally no withdrawal charge on distributions made as a
result of the death of the owner or, if applicable, annuitant (see "Death
Benefit Before Maturity Date - Amount of Death Benefit) and no withdrawal
charges are imposed on the maturity date if the owner annuitizes as provided in
the contract.

The amount collected from the withdrawal charge will be used to
reimburse the Company for the compensation paid to cover selling concessions to
broker-dealers, preparation of sales literature and other expenses related to
sales activity.

For examples of calculation of the withdrawal charge, see Appendix A.
See APPENDIX D for information on withdrawal charges applicable to certain
contracts which are no longer being issued (Ven 8 contracts). Withdrawals from
the fixed account investment options may be subject to a market value charge in
addition to the withdrawal charge described above. (See "FIXED ACCOUNT
INVESTMENT OPTIONS") The Company reserves the right to modify the withdrawal
charge as to certificates issued after the effective date of a change specified
in written notice to the group holder.

REDUCTION OR ELIMINATION OF WITHDRAWAL CHARGES

The amount of the withdrawal charge on a contract or certificate may be
reduced or eliminated when some or all of the certificates are to be sold to a
group of individuals in such a manner that results in savings of sales
expenses. The entitlement to such a reduction in the withdrawal charge will be
determined by the Company in the following manner:

1. The size and type of group to which the sales are to be made will
be considered. Generally, sales expenses for a larger group are smaller than
for a smaller group because of the ability to implement large numbers of sales
with fewer sales contacts.

2. The total amount of purchase payments to be received will be
considered. Per dollar sales expenses are likely to be less on larger purchase
payments than on smaller ones.

3. Any prior or existing relationship with the Company will be
considered. Certificate sales expenses are likely to be less when there is a
prior or existing relationship because of the likelihood of implementing more
sales with fewer sales contacts.

<PAGE> 31
4. The level of commissions paid to selling broker-dealers will be
considered. Certain broker-dealers may offer certificates in connection with
financial planning programs offered on a fee for service basis. In view of the
financial planning fees, such broker-dealers may elect to receive lower
commissions for sales of the certificates, thereby reducing the Company's sales
expenses.

5. There may be other circumstances of which the Company is not
presently aware, which could result in reduced sales expenses.

If, after consideration of the foregoing factors, it is determined that
there will be a reduction in sales expenses, the Company will provide a
reduction in the withdrawal charge. The withdrawal charge will be eliminated
when a certificate is issued to an officer, director or employee (or a relative
thereof) of the Company, North American Life, the Trust or any of their
affiliates. In no event will reduction or elimination of the withdrawal charge
be permitted where such reduction or elimination will be unfairly
discriminatory to any person.

ADMINISTRATION FEES

Except as noted below, the Company will deduct each year an annual
administration fee of $30 from each owner's contract value as partial
compensation for the cost of providing all administrative services attributable
to the contracts and certificates and the operations of the Variable Account
and the Company in connection with the contracts and certificates. However, if
prior to the maturity date the contract value is greater than or equal to
$100,000 at the time of the fee's assessment, the fee will be waived. Prior to
the maturity date, this administration fee is deducted on the last day of each
certificate year. It is withdrawn from each investment option in the same
proportion that the value of such investment option bears to the sum of the
investments options. If an owner's entire contract value is withdrawn on other
than the last day of any certificate year, the $30 administration fee will be
deducted from the amount paid. During the annuity period, the fee is deducted
on a pro-rata basis from each annuity payment. See Appendix D for the
administration fee applicable to certain contracts which are no longer being
issued (Ven 8 contracts).

A daily charge in an amount equal to 0.15% of the value of each
variable investment account on an annual basis is also deducted from each
sub-account to reimburse the Company for administrative expenses. This
asset-based administrative charge will not be deducted from the fixed account
investment options. The charge will be reflected in each owner's contract
value as a proportionate reduction in the value of each variable investment
account. Because this portion of the administrative fee is a percentage of
assets rather than a flat amount, larger contract values will in effect pay a
higher proportion of this portion of the administrative expense than smaller
contract values.

The Company does not expect to recover from such fees any amount in
excess of its accumulated administrative expenses. Even though administrative
expenses may increase, the Company guarantees that it will not increase the
amount of the administration fees as to any certificates issued prior to the
effective date of the Company's modification of such fees. There is no
necessary relationship between the amount of the administrative charge imposed
on a given certificate and the amount of the expense that may be attributed to
that certificate.

REDUCTION OR ELIMINATION OF ANNUAL ADMINISTRATION FEE

The amount of the annual administration fee on a contract or a
certificate may be reduced or eliminated when some or all of the certificates
are to be sold to a group of individuals in such a manner that results in
savings of administration expenses. The entitlement to such a reduction or
elimination of the administration charges will be determined by the Company in
the following manner:

1. The size and type of group to which administrative services are to
be provided will be considered.

2. The total amount of purchase payments to be received will be
considered.

3. There may be other circumstances of which the Company is not
presently aware, which could result in reduced administrative expense.

If, after consideration of the foregoing factors, it is determined that
there will be a reduction or elimination of administration expenses, the
Company will provide a reduction in the annual administration fee. In no event
will reduction or

<PAGE> 32
elimination of the administration fees be permitted where such reduction or
elimination will be unfairly discriminatory to any person. The Company may
waive all or a portion of the administration fee when a certificate is issued
to an officer, director or employee, or relative thereof, of the Company, North
American Life, the Trust or any of their affiliates.

MORTALITY AND EXPENSE RISK CHARGE

The mortality risk assumed by the Company is the risk that annuitants
may live for a longer period of time than estimated. The Company assumes this
mortality risk by virtue of annuity rates incorporated into the contract which
cannot be changed with respect to existing certificates. This assures each
annuitant that his longevity will not have an adverse effect on the amount of
annuity payments. Also, the Company guarantees that if an owner dies before
the maturity date, it will pay a death benefit. (See "DEATH BENEFIT BEFORE
MATURITY DATE") The expense risk assumed by the Company is the risk that the
administration charges or withdrawal charge may be insufficient to cover actual
expenses.

To compensate it for assuming these risks, the Company currently
deducts from each of the sub-accounts a daily charge in an amount equal to
1.25% of the value of the variable investment accounts on an annual basis,
consisting of .8% for the mortality risk and .45% for the expense risk. The
charge will be reflected in each owner's contract value as a proportionate
reduction in the value of each variable investment account. The rate of the
mortality and expense risk charge can be increased, but only as to certificates
issued after the effective date of the increase and upon 60 days' prior written
notice to the group holder. The Company may issue contracts and certificates
with a mortality or expense risk charge at rates less than those set out above,
if it concludes that the mortality or expense risks of the groups involved are
less than the risks it has determined for persons for whom the contracts and
certificates have been generally designed. If the charge is insufficient to
cover the actual cost of the mortality and expense risks undertaken, the
Company will bear the loss. Conversely, if the charge proves more than
sufficient, the excess will be profit to the Company and will be available for
any proper corporate purpose including, among other things, payment of
distribution expenses. On the Period Certain Only Annuity Option, where an
owner elects benefits payable on a variable basis, the mortality and expense
risk charge is assessed although the Company bears only the expense risk and
not any mortality risk. The mortality and expense risk charge is not assessed
against the fixed account investment options.

TAXES

The Company reserves the right to charge, or provide for, certain taxes
against purchase payments (either at the time of payment or liquidation),
contract values, payment of death benefit or annuity payments. Such taxes may
include premium taxes or other taxes levied by any government entity which the
Company determines to have resulted from the (i) establishment or maintenance
of the Variable Account, (ii) receipt by the Company of purchase payments,
(iii) issuance of the contracts or certificates, or (iv) commencement or
continuance of annuity payments under the contracts or certificates. In
addition, the Company will withhold taxes to the extent required by applicable
law.

Except for residents in Pennsylvania and South Dakota, premium taxes
will be deducted from the contract value used to provide for fixed or variable
annuity payments unless required otherwise by applicable law. The amount
deducted will depend on the premium tax assessed in the applicable state. State
premium taxes currently range from 0% to 3.5% depending on the jurisdiction and
the tax status of the contract and certificate and are subject to change by the
legislature or other authority. (See "APPENDIX B: STATE PREMIUM TAXES") FOR
RESIDENTS OF SOUTH DAKOTA OR PENNSYLVANIA, THE FOLLOWING PREMIUM TAX ASSESSMENT
WILL APPLY: A premium tax will be assessed against all non-qualified purchase
payments received from owners who are residents of either South Dakota or
Pennsylvania. The rate of tax is 1.25% for South Dakota residents and 2.00%
for Pennsylvania residents. The state premium tax will be collected upon
payment of any withdrawal benefits, upon any annuitization or payment of death
benefits. In the states of Pennsylvania and South Dakota, purchase payments
received in connection with the funding of a qualified plan are exempt from
state premium tax.

FEDERAL TAX MATTERS

INTRODUCTION

The following discussion of the federal income tax treatment of the
contract or certificate is not exhaustive, does not purport to cover all
situations, and is not intended as tax advice. The federal income tax
treatment of a group annuity contract is unclear in certain circumstances, and
a qualified tax adviser should always be consulted with regard to the
application of law to individual circumstances. This discussion is based on
the Internal Revenue Code of 1986, as amended (the "Code"), Treasury
regulations, and

<PAGE> 33
interpretations existing on the date of this Prospectus. These authorities,
however, are subject to change by Congress, the Treasury Department, and
judicial decisions.

This discussion does not address state or local tax consequences
associated with the purchase of a contract or certificate. In addition, THE
COMPANY MAKES NO GUARANTEE REGARDING ANY TAX TREATMENT -- FEDERAL, STATE OR
LOCAL -- OF ANY CONTRACT OR CERTIFICATE OR OF ANY TRANSACTION INVOLVING A
CONTRACT OR CERTIFICATE.

THE COMPANY'S TAX STATUS

The Company is taxed as a life insurance company under Subchapter L of
the Code. Since the operations of the Variable Account are a part of, and are
taxed with, the operations of the Company, the Variable Account is not
separately taxed as a "regulated investment company" under Subchapter M of the
Code. Under existing federal income tax laws, investment income and capital
gains of the Variable Account are not taxed to the extent they are applied to
increase reserves under a contract. Since, under the contracts, investment
income and realized capital gains of the Variable Account are automatically
applied to increase reserves, the Company does not anticipate that it will
incur any federal income tax liability attributable to the Variable Account,
and therefore the Company does not intend to make provision for any such taxes.
If the Company is taxed on investment income or capital gains of the Variable
Account, then the Company may impose a charge against the Variable Account in
order to make provision for such taxes.

TAXATION OF ANNUITIES IN GENERAL

TAX DEFERRAL DURING ACCUMULATION PERIOD

Under existing provisions of the Code, except as described below, any
increase in an owner's contract value is generally not taxable to the owner or
annuitant until received, either in the form of annuity payments as
contemplated by the contract, or in some other form of distribution. However,
this rule applies only if (1) the owner is an individual, (2) the investments
of the Variable Account are "adequately diversified" in accordance with
Treasury Department regulations, and (3) the Company, rather than the owner, is
considered the owner of the assets of the Variable Account for federal tax
purposes.

Non-Natural Owners. As a general rule, deferred annuity contracts (or
certificates) held by "non-natural persons" such as a corporation, trust or
other similar entity, as opposed to a natural person, are not treated as
annuity contracts for federal tax purposes. The investment income on such
contracts (or certificates) is taxed as ordinary income that is received or
accrued by the owner during the taxable year. There are several exceptions to
this general rule for non-natural owners. First, contracts will generally be
treated as held by a natural person if the nominal owner is a trust or other
entity which holds the contract as an agent for a natural person. Thus, if a
group annuity contract is held by a trustee, certificate owners who are
individuals should be treated as owning an annuity contract for federal tax
purposes. However, this special exception will not apply in the case of any
employer who is the nominal owner of an annuity contract under a non-qualified
deferred compensation arrangement for its employees.

In addition, exceptions to the general rule for non-natural owners will
apply with respect to (1) certificates acquired by an estate of a decedent by
reason of the death of the decedent, (2) certain qualified contracts or
certificates, (3) annuities purchased by employers upon the termination of
certain qualified plans, (4) certain annuities used in connection with
structured settlement agreements, and (5) annuities purchased with a single
premium when the annuity starting date is no later than a year from purchase of
the annuity and substantially equal periodic payments are made, not less
frequently than annually, during the annuity period.

Diversification Requirements. For a contract to be treated as an
annuity contract for federal income tax purposes, the investments of the
Variable Account must be "adequately diversified" in accordance with Treasury
Department regulations. The Secretary of the Treasury has issued regulations
which prescribe standards for determining whether the investments of the
Variable Account are "adequately diversified." If the Variable Account failed
to comply with these diversification standards, a contract would not be treated
as an annuity contract for federal income tax purposes and an owner would be
taxable currently on the excess of his or her contract value over the premiums
he or she paid for the certificate.

Although the Company does not control the investments of NASL Series
Trust, it expects that the Trust will comply with such regulations so that the
Variable Account will be considered "adequately diversified."

<PAGE> 34
Ownership Treatment. In certain circumstances, variable annuity owners
may be considered the owners, for federal income tax purposes, of the assets of
the separate account used to support their contracts. In those circumstances,
income and gains from the separate account assets would be includible in the
variable annuity owners' gross income. The Internal Revenue Service (the
"Service") has stated in published rulings that a variable owner will be
considered the owner of separate account assets if the owner possesses
incidents of ownership in those assets, such as the ability to exercise
investment control over the assets. In addition, the Treasury Department
announced, in connection with the issuance of regulations concerning investment
diversification, that those regulations "do not provide guidance concerning the
circumstances in which investor control of the investments of a separate asset
account may cause the investor, rather than the insurance company, to be
treated as the owner of the assets in the account." This announcement also
stated that guidance would be issued by way of regulations or rulings on the
"extent to which policyholders may direct their investments to particular
sub-accounts [of a separate account] without being treated as owners of the
underlying assets." As of the date of this Prospectus, no such guidance has
been issued.

The ownership rights under this contract are similar to, but different
in certain respects from, those described by the Service in rulings in which it
was determined that owners were not owners of separate account assets. For
example, an owner under this contract has the choice of more investment options
to which to allocate premiums and contract values, and may be able to transfer
among investment options more frequently than in such rulings. These
differences could result in the owner being treated as the owner of the assets
of the Variable Account. In addition, the Company does not know what standards
will be set forth in the regulations or rulings which the Treasury Department
has stated it expects to issue. The Company therefore reserves the right to
modify the contract as necessary to attempt to prevent owners from being
considered the owners of the assets of the Variable Account.

Delayed Maturity Dates. If the scheduled maturity date is at a time
when the annuitant has reached an advanced age, e.g., past age 85, it is
possible that the contract would not be treated as an annuity. In that event,
the income and gains under the contract could be currently includible in the
owner's income.

The remainder of this discussion assumes that the contract will be
treated as an annuity contract for federal income tax purposes and that the
Company will be treated as the owner of the Variable Account assets.

TAXATION OF PARTIAL AND FULL WITHDRAWALS

In the case of a partial withdrawal, amounts received are includible in
income to the extent the owner's contract value before the withdrawal exceeds
his or her "investment in the contract." In the case of a full withdrawal,
amounts received are includible in income to the extent they exceed the
"investment in the contract." For these purposes the investment in the
contract at any time equals the total of the purchase payments made under the
certificate to that time (to the extent such payments were neither deductible
when made nor excludible from income as, for example, in the case of certain
contributions to qualified plans) less any amounts previously received from the
certificate which were not included in income.

Other than in the case of certain qualified contracts or certificates,
any amount received as a loan under a contract, and any assignment or pledge
(or agreement to assign or pledge) any portion of the contract value, is
treated as a withdrawal of such amount or portion. The investment in the
contract is increased by the amount includible as income with respect to such
assignment or pledge, though it is not affected by any other aspect of the
assignment or pledge (including its release). If an individual transfers a
certificate without adequate consideration to a person other than the owner's
spouse (or to a former spouse incident to divorce), the owner will be taxed on
the difference between his or her contract value and the "investment in the
contract" at the time of transfer. In such case, the transferee's investment
in the contract will be increased to reflect the increase in the transferor's
income.

The contract provides a death benefit that in certain circumstances may
exceed the greater of the payments made by or on behalf of an owner and the
contract value. As described elsewhere in this prospectus, the Company imposes
certain charges with respect to the death benefit. It is possible that some
portion of those charges could be treated for federal tax purposes as a partial
withdrawal from the contract.

<PAGE> 35
TAXATION OF ANNUITY PAYMENTS

Normally, the portion of each annuity payment taxable as ordinary
income is equal to the excess of the payment over the exclusion amount. In the
case of variable annuity payments, the exclusion amount is the "investment in
the contract" (defined above) allocated to the variable annuity option,
adjusted for any period certain or refund feature, when payments begin to be
made divided by the number of payments expected to be made (determined by
Treasury Department regulations which take into account the annuitant's life
expectancy and the form of annuity benefit selected). In the case of fixed
annuity payments, the exclusion amount is the amount determined by multiplying
(1) the payment by (2) the ratio of the investment in the contract allocated to
the fixed annuity option, adjusted for any period certain or refund feature, to
the total expected value of annuity payments for the term of the contract
(determined under Treasury Department regulations).

Once the total amount of the investment in the contract is excluded
using these ratios, annuity payments will be fully taxable. If annuity
payments cease because of the death of the annuitant and before the total
amount of the investment in the contract is recovered, the unrecovered amount
generally will be allowed as a deduction to the annuitant in his last taxable
year.

TAXATION OF DEATH BENEFIT PROCEEDS

Amounts may be distributed from a certificate because of the death of
an owner or an annuitant. In the case of a non-qualified certificate, such
death benefit proceeds are includible in income as follows: (1) if distributed
in a lump sum, they are taxed in the same manner as a full withdrawal, as
described above, or (2) if distributed under an annuity option, they are taxed
in the same manner as annuity payments, as described above.

PENALTY TAX ON PREMATURE DISTRIBUTIONS

There is a 10% penalty tax on the taxable amount of any payment from a
non-qualified certificate unless the payment is: (a) received on or after the
owner reaches age 59 1/2; (b) attributable to the owner's becoming disabled (as
defined in the tax law); (c) made to a beneficiary on or after the death of the
owner or, if the owner is not an individual, on or after the death of the
primary annuitant (as defined in the tax law); (d) made as a series of
substantially equal periodic payments (not less frequently than annually) for
the life (or life expectancy) of the annuitant or the joint lives (or joint
life expectancies) of the annuitant and "designated beneficiary" (as defined in
the tax law), or (e) made under a certificate purchased with a single premium
when the annuity starting date is no later than a year from purchase of the
certificate and substantially equal periodic payments are made, not less
frequently than annually, during the annuity period. (Similar rules apply in
the case of certain qualified contracts or certificates.)

AGGREGATION OF CONTRACTS

In certain circumstances, the Service may determine the amount of an
annuity payment or a withdrawal from a certificate that is includible in income
by combining some or all of the non-qualified certificates and annuity
contracts owned by an individual. For example, if a person purchases a
certificate offered by this Prospectus and also purchases at approximately the
same time an immediate annuity, the Service may treat the two contracts as one
contract. In addition, if a person purchases two or more deferred annuity
contracts or certificates from the same insurance company (or its affiliates)
during any calendar year, all such contracts will be treated as one contract.
The effects of such aggregation are not clear; however, it could affect the
time when income is taxable and the amount which might be subject to the 10%
penalty tax described above.

QUALIFIED RETIREMENT PLANS

The contracts are also designed for use in connection with certain
types of retirement plans which receive favorable treatment under the Code.
Numerous special tax rules apply to the participants in such qualified plans
and to the contracts used in connection with such qualified plans. These tax
rules vary according to the type of plan and the terms and conditions of the
plan itself. For example, for both withdrawals and annuity payments under
certain qualified contracts, there may be no "investment in the contract" and
the total amount received may be taxable. In addition, loans from qualified
contracts (or certificates), where allowed, are subject to a variety of
limitations, including restrictions as to the amount that may be borrowed, the
duration of the loan, and the manner in which the loans must be repaid.
(Owners should always consult their tax advisors and retirement plan
fiduciaries prior to exercising their loan privileges.) Also, special rules
apply to the time at which distributions must commence and the form in which
the distributions must be paid. Therefore, no attempt is made to provide more
than general information about the use of contracts and certificates with the
various types of qualified plans.

<PAGE> 36
When issued in connection with a qualified plan, a contract and
certificate will be amended as generally necessary to conform to the
requirements of the type of plan. However, owners, annuitants, and
beneficiaries are cautioned that the rights of any person to any benefits under
qualified plans may be subject to the terms and conditions of the plans
themselves, regardless of the terms and conditions of the contract. In
addition, the Company shall not be bound by terms and conditions of qualified
plans to the extent such terms and conditions contradict the contract, unless
the Company consents.

QUALIFIED PLAN TYPES

Following are brief descriptions of various types of qualified plans in
connection with which the Company may issue a contract.

Individual Retirement Annuities. Section 408 of the Code permits
eligible individuals to contribute to an individual retirement program known as
an "Individual Retirement Annuity" or "IRA." IRAs are subject to limits on the
amounts that may be contributed, the persons who may be eligible and on the
time when distributions may commence. Also, distributions from certain other
types of qualified retirement plans may be "rolled over" on a tax-deferred
basis into an IRA.

IRAs generally may not provide life insurance, but they may provide a
death benefit that equals the greater of the premiums paid and the contract's
cash value. The contract provides a death benefit that in certain
circumstances may exceed the greater of the payments made by or on behalf of an
owner and the contract value. The Company intends to ask the IRS to approve
the use of the contract, as to form, as an IRA, but there is no assurance that
such approval will be granted.

Simplified Employee Pensions (SEP-IRAs). Section 408(k) of the Code
allows employers to establish simplified employee pension plans for their
employees, using the employees' IRAs for such purposes, if certain criteria are
met. Under these plans the employer may, within specified limits, make
deductible contributions on behalf of the employees to IRAs. Employers
intending to use the contract or certificates in connection with such plans
should seek competent advice. In particular, employers should consider that
IRAs generally may not provide life insurance, but they may provide a death
benefit that equals the greater of the premiums paid and the contract's cash
value. The contract provides a death benefit that in certain circumstances may
exceed the greater of the payments made by or on behalf of an owner and the
contract value. The Company intends to ask the IRS to approve use of the
contract, as to form, as an IRA, but there is no assurance that such approval
will be granted.

Corporate and Self-Employed ("H.R. 10" and "Keogh") Pension and
Profit-Sharing Plans. Sections 401(a) and 403(a) of the Code permit corporate
employers to establish various types of tax-favored retirement plans for
employees. The Self-Employed Individuals' Tax Retirement Act of 1962, as
amended, commonly referred to as "H.R. 10" or "Keogh," permits self-employed
individuals also to establish such tax-favored retirement plans for themselves
and their employees. Such retirement plans may permit the purchase of the
contract or certificates in order to provide benefits under the plans. The
contract provides a death benefit that in certain circumstances may exceed the
greater of the payments made by or on behalf of an owner and the contract
value. It is possible that such death benefit could be characterized as an
incidental death benefit. There are limitations on the amount of incidental
benefits that may be provided under pension and profit sharing plans. In
addition, the provision of such benefits may result in currently taxable income
to participants. Employers intending to use the contract or certificates in
connection with such plans should seek competent advice.

Tax-Sheltered Annuities. Section 403(b) of the Code permits public
school employees and employees of certain types of charitable, educational and
scientific organizations specified in Section 501(c)(3) of the Code to have
their employers purchase annuity contracts for them and, subject to certain
limitations, to exclude the amount of purchase payments from gross income for
tax purposes. These annuity contracts are commonly referred to as
"tax-sheltered annuities." Purchasers of the contracts or certificates for
such purposes should seek competent advice as to eligibility, limitations on
permissible amounts of purchase payments and other tax consequences associated
with the contracts or certificates. In particular, purchasers should consider
that the contract provides a death benefit that in certain circumstances may
exceed the greater of the payments made by or on behalf of an owner and the
contract value. It is possible that such death benefit could be characterized
as an incidental death benefit. If the death benefit were so characterized,
this could result in currently taxable income to purchasers. In addition,
there are limitations on the amount of incidental death benefits that may be
provided under a tax-sheltered annuity. Even if the death benefit under the
contract were characterized as an incidental death benefit, it is unlikely to
violate those limits unless the purchaser also purchases a life insurance
contract as part of his or her tax-sheltered annuity plan.

Withdrawals from a tax-sheltered annuity attributable to contributions
made pursuant to a salary reduction agreement in a

<PAGE> 37
taxable year beginning after December 31, 1988, may be paid only if the
employee has reached age 59 1/2, separated from service, died, become disabled,
or in the case of hardship. Amounts permitted to be distributed in the event
of hardship are limited to actual contributions; earnings thereon may not be
distributed on account of hardship. (These limitations on withdrawals do not
apply to the extent the Company is directed to transfer some or all of the
contract value to the issuer of another tax-sheltered annuity or into a
Section 403(b)(7) custodial account).

Deferred Compensation Plans of State and Local Governments and
Tax-Exempt Organizations. Section 457 of the Code permits employees of state
and local governments and tax-exempt organizations to defer a portion of their
compensation without paying current taxes. The employees must be participants
in an eligible deferred compensation plan. To the extent the contract or
certificates are used in connection with an eligible plan, employees are
considered general creditors of the employer and the employer as owner of the
contract or certificates has the sole right to the proceeds of the contract or
certificate. Loans to employees are not permitted under such plans. Generally,
a contract or certificate purchased by a state or local government or a
tax-exempt organization will not be treated as an annuity contract for federal
income tax purposes. Those who intend to use the contracts or certificates in
connection with such plans should seek competent advice.

DIRECT ROLLOVERS

If the contract is used in connection with a pension, profit-sharing,
or annuity plan qualified under sections 401(a) or 403(a) of the Code, or is a
tax-sheltered annuity under section 403(b) of the Code, any "eligible rollover
distribution" from the contract will be subject to the direct rollover and
mandatory withholding requirements enacted by Congress in 1992. An eligible
rollover distribution generally is any taxable distribution from a qualified
pension plan under section 401(a) of the Code, qualified annuity plan under
section 403(a) of the Code, or section 403(b) annuity or custodial account,
excluding certain amounts (such as minimum distributions required under section
401(a)(9) of the Code and distributions which are part of a "series of
substantially equal periodic payments" made for life or a specified period of
10 years or more).

Under these requirements, federal income tax equal to 20% of the
eligible rollover distribution will be withheld from the amount of the
distribution. Unlike withholding on certain other amounts distributed from the
contract, discussed below, the owner cannot elect out of withholding with
respect to an eligible rollover distribution. However, this 20% withholding
will not apply if, instead of receiving the eligible rollover distribution, the
owner elects to have it directly transferred to certain qualified plans. Prior
to receiving an eligible rollover distribution, the owner will receive a notice
explaining generally the direct rollover and mandatory withholding requirements
and how to avoid the 20% withholding by electing a direct transfer.

FEDERAL INCOME TAX WITHHOLDING

The Company will withhold and remit to the U.S. government a part of
the taxable portion of each distribution made under a contract unless the
distributee notifies the Company at or before the time of the distribution that
he or she elects not to have any amounts withheld. In certain circumstances,
the Company may be required to withhold tax, as explained above. The
withholding rates applicable to the taxable portion of periodic annuity
payments (other than eligible rollover distributions) are the same as the
withholding rates generally applicable to payments of wages. In addition, the
withholding rate applicable to the taxable portion of non-periodic payments
(including withdrawals prior to the maturity date) is 10%. As discussed above,
the withholding rate applicable to eligible rollover distributions is 20%.

GENERAL MATTERS

TAX DEFERRAL

The status of the contract as an annuity generally allows all earnings
on the underlying investments to be tax-deferred until withdrawn or until
annuity payments begin. (See "FEDERAL TAX MATTERS") This tax deferred
treatment may be beneficial to owners in building assets in a long-term
investment program.

PERFORMANCE DATA

From time to time the Variable Account may publish advertisements
containing performance data relating to its sub-accounts. For periods prior to
August 9, 1994, performance data will be hypothetical figures based on the
assumption that a contract offered by this Prospectus was issued when the
sub-accounts first became available for investment under other contracts
offered by

<PAGE> 38
the Company. The sub-accounts may advertise both "standardized" and
"non-standardized" total return figures, although standardized figures will
always accompany non-standardized figures. Standardized performance data will
consist of total return quotations, which will always include quotations for
recent one year and, when applicable, five and ten year periods and, where less
than ten years, for the period subsequent to the date each sub-account first
became available for investment. Such quotations for such periods will be the
average annual rates of return required for an initial purchase payment of
$1,000 to equal the actual contract value attributable to such purchase payment
on the last day of the period, after reflection of all charges. Standardized
total return figures will be quoted assuming redemption at the end of the
period. Such figures may be accompanied by non-standardized total return
figures that are calculated on the same basis as the standardized returns
except that the calculations (i) assume no redemption a the end of the period
and (ii) do not reflect imposition of the $30 per contract charge inasmuch as
the impact of such charge varies by contract size. In addition to the
non-standardized returns, each of the sub-accounts may from time to time quote
aggregate non-standardized total returns for other time periods. Except as
noted above, performance figures used by the Variable Account are based on the
actual historical performance of its sub-accounts for specified periods, and
the figures are not intended to indicate future performance. More detailed
information on the computations is set forth in the Statement of Additional
Information.

FINANCIAL STATEMENTS

Financial Statements for the Variable Account and the Company are
contained in the Statement of Additional Information.

ASSET ALLOCATION AND TIMING SERVICES

The Company is aware that certain third parties are offering asset
allocation and timing services in connection with the contracts. In certain
cases the Company has agreed to honor transfer instructions from such asset
allocation and timing services where it has received powers of attorney, in a
form acceptable to it, from the owners participating in the service. THE
COMPANY DOES NOT ENDORSE, APPROVE OR RECOMMEND SUCH SERVICES IN ANY WAY AND
GROUPHOLDERS/OWNERS SHOULD BE AWARE THAT FEES PAID FOR SUCH SERVICES ARE
SEPARATE AND IN ADDITION TO FEES PAID UNDER THE CONTRACTS AND CERTIFICATES.

RESTRICTIONS UNDER THE TEXAS OPTIONAL RETIREMENT PROGRAM

Section 830.105 of the Texas Government Code permits participants in
the Texas Optional Retirement Program ("ORP") to withdraw their interest in a
variable annuity contract issued under the ORP only upon (1) termination of
employment in the Texas public institutions of higher education, (2)
retirement, (3) death, or (4) the participant's attainment of age 70 1/2.
Accordingly, before any amounts may be distributed from the contract, proof
must be furnished to the Company that one of the four events has occurred. The
foregoing restrictions on withdrawal do not apply in the event a participant in
the ORP transfers his or her contract value to another contract or another
qualified custodian during the period of participation in the ORP. Loans are
not available under contracts issued under the ORP.

DISTRIBUTION OF CONTRACTS

NASL Financial Services, Inc. ("NASL Financial"), 116 Huntington
Avenue, Boston, Massachusetts 02116, a wholly-owned subsidiary of the Company,
is the principal underwriter of the contracts and certificates in addition to
providing advisory services to the Trust. NASL Financial is a broker-dealer
registered under the Securities Exchange Act of 1934 ("1934 Act") and a member
of the National Association of Securities Dealers, Inc. ("NASD"). NASL
Financial has entered into an exclusive promotional agent agreement with Wood
Logan Associates, Inc. ("Wood Logan"). Wood Logan, approximately 20% owned by
North American Life and its affiliates, is a broker-dealer registered under the
1934 Act and a member of the NASD. Sales of the contracts and certificates
will be made by registered representatives of broker-dealers authorized by NASL
Financial to sell them. Such registered representatives will also be licensed
insurance agents of the Company. Under the promotional agent agreement, Wood
Logan will recruit and provide sales training and licensing assistance to such
registered representatives. In addition, Wood Logan will prepare sales and
promotional materials for the Company's approval. NASL Financial will pay
distribution compensation to selling brokers in varying amounts which under
normal circumstances are not expected to exceed 5% of purchase payments plus
0.25% of the certificate value per year beginning in the second certificate
year. NASL Financial may from time to time pay additional compensation
pursuant to promotional contests. Additionally, in some circumstances, NASL
Financial will provide reimbursement of certain sales and marketing expenses.
NASL Financial will pay the promotional agent for providing marketing support
for the distribution of the contracts and certificates.

<PAGE> 39
OWNER INQUIRIES

All owner inquiries should be directed to the Company's Annuity Service
Office at P.O. Box 818, Boston, Massachusetts 02117-0818.

LEGAL PROCEEDINGS

There are no legal proceedings to which the Variable Account is a party
or to which the assets of the Variable Account are subject. Neither the
Company nor NASL Financial are involved in any litigation that is of material
importance in relation to their total assets or that relates to the Variable
Account.

EXCHANGE OFFER AND ENHANCED DEATH BENEFIT OPTION

EXCHANGE OFFER

The certificates under Contracts described in this Prospectus ("New
Certificates") may be issued in exchange for certificates under certain group
annuity contracts previously issued by the Company ("Old Certificates") or Ven
8 contracts. The Old Certificates are described in Appendix D.

The Company will permit an owner of an outstanding Old Certificate to
exchange the Old Certificate for a New Certificate without surrender charge,
except a possible market value charge, as described below. For purposes of
computing the applicable surrender charge upon any withdrawals made subsequent
to the exchange, the New Certificate will be deemed to have been issued on the
date the Old Certificate was issued, and any purchase payment credited to the
Old Certificate will be deemed to have been credited to the New Certificate on
the date it was credited under the Old Certificate. The death benefit under
the New Certificate on the date of its issue will be the greater of the minimum
death benefit under the Old Certificate or the contract value on the date of
exchange and will "step up" annually thereafter as described in paragraph "2."
below.

Old Certificate owners interested in a possible exchange should
carefully review both Appendix D and the remainder of this Prospectus before
deciding to make an exchange.

AN EXCHANGE MAY NOT BE IN THE BEST INTERESTS OF AN OWNER OF AN OLD
CERTIFICATE, particularly in light of the availability of the Enhanced Death
Benefit endorsement described below. Further, under Old Certificates, a market
value charge may apply to any amounts transferred from a three or six year
investment account in connection with an exchange. (Reference should be made
to the discussion of the market value charge in Appendix D.) The Company
believes that an exchange of Certificates will not be a taxable event for
Federal tax purposes; however, any owner considering an exchange should consult
a tax adviser. The Company reserves the right to terminate this exchange offer
or to vary its terms at any time.

The principal differences between the Old and New Certificates are as
follows:

1. The death benefit of the New Certificate will be payable upon the
death of the owner (or first owner to die if there is more than one owner). The
death benefit of the Old Certificate is payable on the death of the annuitant
(or last annuitant to die if there is more than one annuitant); if the owner
predeceases the annuitant, the Old Certificate contract value is paid, which
may be a lesser amount than the death benefit payable on the death of the
annuitant.

2. The guaranteed death benefit payable under the New Certificate will
be in most circumstances more favorable. If an owner dies on or prior to his
or her 85th birthday and the oldest owner had an attained age of less than 81
years on the certificate date, the death benefit will be the greater of (i) the
contract value or (ii) the sum of all purchase payments made less any amounts
deducted in connection with certain withdrawals. The New Certificate will step
up the measure of clause (ii) every year, so that clause (ii) will be the
greater of clause (i) or (ii) on the last day of the previous certificate year
period plus any purchase payments made and less any amounts deducted in
connection with certain withdrawals since then. Under the Old Certificate, the
death benefit is stepped up every six years instead of every year.

Under the New Certificate, if an owner dies after his or her 85th
birthday and the oldest owner had an attained age of less than 81 years on the
certificate date, the death benefit will be the greater of the contract value
or the excess of the sum of all purchase

<PAGE> 40
payments made by the owner less the sum of any amounts deducted in connection
with certain withdrawals by the owner. If an owner dies and the oldest owner
had an attained age greater than 80 on the certificate date, the death benefit
will be the contract value less any applicable withdrawal charges at the time of
payment. Under the Old Certificate, if the annuitant dies after the first of
the month following his or her 85th birthday, the minimum death benefit will be
the contract value. Also, if the owner is not the annuitant and dies before
the maturity date and before the annuitant, an amount equal to the amount
payable on total withdrawal, without reduction for any withdrawal charge, will
be paid.

3. The New Certificate will waive the $30 annual administration fee
prior to the maturity date if the contract value is equal to or greater than
$100,000 at the time the fee is be assessed.

4. The surrender charges under the New Certificate will be higher in
certain cases. The surrender charges are the same under both Old and New
Certificates for the first three certificate years, but thereafter the charges
under the New Certificate are 5%, 4%, 3% and 2% for withdrawals made during
certificate years four, five, six and seven, respectively, while under the Old
Certificate the charges for such years are 4%, 3%, 2% and 0%, respectively.

5. The minimum interest rate to be credited for any guarantee period
under the fixed portion of the New Certificate will be three percent as opposed
to four percent under the Old Certificate. The market value charge under the
New Certificate will be limited so as to only affect accumulated earnings in
excess of three percent, whereas under the Old Certificate the market value
charge is limited so as to not invade principal.

6. The annuity purchase rates guaranteed in the New Certificate have
been determined using 3% as opposed to 4% under the Old Certificate.

Certificate owners who do not wish to exchange their Old Certificates
for the New Certificates may continue to make purchase payments to their Old
Certificates. Or, they can keep their Old Certificates and buy a New
Certificate to which to apply additional purchase payments.

The above comparison does not take into account differences between the
Old Certificates, as amended by qualified plan endorsements, and the New
Certificates, as amended by similar qualified plan endorsements. Owners using
their Old Certificate in connection with a qualified plan should consult a tax
advisor. See also the Federal Tax Matters section of the prospectus.

ENHANCED DEATH BENEFIT OPTION

As an alternative to the exchange privilege described above, the
Company is offering an Enhanced Death Benefit to any owner of an Old
Certificate (a Ven 8 contract) having a certificate date not later than August
15, 1994. The Enhanced Death Benefit Option is available as an endorsement to
such Certificates only upon the payment of an additional purchase payment of at
least 10% of all purchase payments made to the Old Certificate through August
15, 1994 or $10,000, whichever is greater. Old Certificates dated subsequent
to August 15 will not be eligible for the Enhanced Death Benefit endorsement.

The Enhanced Death Benefit, as described below, will provide an annual
step-up in death benefit comparable to the New Certificate death benefit
described in the prospectus under "Death Benefit Before Maturity Date," except
that the death benefit under the endorsement will be payable on the death of
the last surviving annuitant as opposed to the death of the first owner as
provided in the New Certificate.

The Enhanced Death Benefit provided by the endorsement will always be
equal to or better than the death benefit of an Old Certificate issued without
the endorsement. In the case of the death of the annuitant on or prior to the
first of the month following his or her 85th birthday, the minimum death
benefit is as described under the caption "Prior Contract Death Benefit
Provision" in Appendix D except that the death benefit is stepped up each
certificate year instead of each six certificate year period. In the case of
the death of the annuitant after the first of the month following his or her
85th birthday, the minimum death benefit is the greater of the contract value
or the excess of the sum of all purchase payments less the sum of any amounts
deducted in connection with certain withdrawals. Under an Old Certificate
issued without the endorsement, if the annuitant dies after the first of the
month following his or her 85th birthday, the death benefit is the contract
value only. For purposes of computing the Enhanced Death Benefit under

<PAGE> 41
an Old Certificate issued without the endorsement, the death benefit will be
computed as if the Enhanced Death Benefit endorsement had been a part of the
Old Certificate on the certificate date.

The Company believes that the addition of the Enhanced Death Benefit
endorsement to an Old Certificate will not be treated as a taxable event for
Federal tax purposes; however, any owner considering the addition of the
endorsement should consult a tax advisor.

OTHER INFORMATION

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

<TABLE>

STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
<S> <C>
General Information and History ............................................ 3
Performance Data ........................................................... 3
Services
Independent Accountants ............................................ 6
Servicing Agent .................................................... 6
Principal Underwriter .............................................. 6
Cancellation of Certificate ........................................ 6
Financial Statements ....................................................... 7
</TABLE>

<TABLE>

APPENDIX A

EXAMPLES OF CALCULATION OF WITHDRAWAL CHARGE

Example 1 - Assume a single payment of $50,000 is made by an owner into the
contract and a certificate is issued. No transfers are made, no additional
payments are made and there are no partial withdrawals. The table below
illustrates four examples of the withdrawal charges that would be imposed if
the contract value of the certificate were completely withdrawn. This
illustration is based on hypothetical contract values.

HYPOTHETICAL FREE WITHDRAWAL
CERTIFICATE CONTRACT WITHDRAWAL PAYMENTS CHARGE
YEAR VALUE AMOUNT LIQUIDATED -------------------
PERCENT AMOUNT
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
2 55,000 5,000(a) 50,000 6% 3,000
4 50,500 5,000(b) 45,500 5% 2,275
6 60,000 10,000(c) 50,000 3% 1,500
8 70,000 20,000(d) 50,000 0% 0

- ----------
<FN>
(a) During any certificate year the free withdrawal amount is the greater of
accumulated earnings, or 10% of the total payments made by the owner
less any prior partial withdrawals in that certificate year. In the
second certificate year the earnings under the contract and 10% of
payments both equal $5,000. Consequently, on total withdrawal $5,000
is withdrawn free of the withdrawal charge,
</TABLE>

<PAGE> 42

the entire $50,000 payment is liquidated and the withdrawal charge
is assessed against such liquidated payment (contract value less free
withdrawal amount).

(b) In the example for the fourth certificate year, the accumulated
earnings of $500 is less than 10% of payments, therefore the free
withdrawal amount is equal to 10% of payments ($50,000 X 10% = $5,000)
and the withdrawal charge is only applied to payments liquidated
(contract value less free withdrawal amount).

(c) In the example for the sixth certificate year, the accumulated earnings
of $10,000 is greater than 10% of payments ($5,000), therefore the free
withdrawal amount is equal to the accumulated earnings of $10,000 and
the withdrawal charge is applied to the payments liquidated (contract
value less free withdrawal amount).

(d) There is no withdrawal charge on any payments liquidated that have been
in the contract for at least 7 years.

Example 2 - Assume a single payment of $50,000 is made by an owner into
the contract and a certificate is issued. No transfers are made, no additional
payments are made and there are a series of four partial withdrawals made
during the third certificate year of $2,000, $5,000, $7,000, and $8,000. The
illustration below is based on hypothetical contract values.

HYPOTHETICAL PARTIAL FREE WITHDRAWAL
CONTRACT WITHDRAWAL WITHDRAWAL PAYMENTS CHARGE
VALUE REQUESTED AMOUNT LIQUIDATED -----------------
PERCENT AMOUNT
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
65,000 2,000 15,000(a) 0 5% 0
49,000 5,000 3,000(b) 2,000 5% 100
52,000 7,000 4,000(c) 3,000 5% 150
44,000 8,000 0(d) 8,000 5% 400
- ------------------------------
<FN>
(a) The free withdrawal amount during any certificate year is the greater of
the contract value less the unliquidated payments (accumulated
earnings), or 10% of payments less 100% of all prior withdrawals in
that certificate year. For the first example, accumulated earnings of
$15,000 is the free withdrawal amount since it is greater than 10% of
payments less prior withdrawals ($5,000-0). The amount requested
($2,000) is less than the free withdrawal amount so no payments are
liquidated and no withdrawal charge applies.

(b) The contract has negative accumulated earnings ($49,000-$50,000), so the
free withdrawal amount is limited to 10% of payments less all prior
withdrawals. Since $2,000 has already been withdrawn in the current
certificate year, the remaining free withdrawal amount during the third
certificate year is $3,000. The $5,000 partial withdrawal will consist
of $3,000 free of withdrawal charge, and the remaining $2,000 will be
subject to a withdrawal charge and result in payments being liquidated.
The remaining unliquidated payments are $48,000.

(c) The contract has increased in value to $52,000. The unliquidated
payments are $48,000 so the accumulated earnings are $4,000, which is
greater than 10% of payments less prior withdrawals
($5,000-$2,000-$5,000<0). Hence the free withdrawal amount is $4,000.
Therefore, $3,000 of the $7,000 partial withdrawal will be subject to
a withdrawal charge and result in payments being liquidated. The
remaining unliquidated payments are $45,000.

(d) The free withdrawal amount is zero since the contract has negative
accumulated earnings ($44,000-$45,000) and the full 10% of payments
($5,000) has already been withdrawn. The full amount of $8,000 will
result in payments being liquidated subject to a withdrawal charge. At
the beginning of the next certificate year the full 10% of payments
would be available again for withdrawal requests during that year.

</TABLE>

APPENDIX B

STATE PREMIUM TAXES

Premium taxes vary according to the state and are subject to change.
In many jurisdictions there is no tax at all. For current information, a tax
adviser should be consulted.

<CAPTION> TAX RATE

QUALIFIED NON-QUALIFIED
STATE CONTRACTS CONTRACTS
- -----------------------------------------------------------
<S> <C> <C>
CALIFORNIA ............ .50% 2.35%
DISTRICT OF COLUMBIA .. 2.25% 2.25%
KANSAS ................ .00% 2.00%
KENTUCKY .............. 2.00% 2.00%
MAINE ................. .00% 2.00%
MICHIGAN .............. .00075% .00075%
MISSISSIPPI ........... .00% 1.00%
NEVADA ................ .00% 3.50%
PENNSYLVANIA* ......... .00% 2.00%
PUERTO RICO ........... 1.00% 1.00%
SOUTH DAKOTA* ......... .00% 1.25%
TEXAS ................. .04% .04%
WEST VIRGINIA ......... 1.00% 1.00%
WYOMING ............... .00% 1.00%

</TABLE>

APPENDIX C

For all certificates issued in Pennsylvania the maximum maturity age based upon
the issue age of the annuitant is as follows:

<CAPTION>
ISSUE AGE MAXIMUM MATURITY AGE
--------------------------------------
<S> <C>
70 or less 85
71-75 86
76-80 88
81-85 90
86-90 93
91-93 96
94-95 98
96-97 99
98-99 101
100-101 102
102 103
103 104
104 105
105 106
</TABLE>

It is required that the annuitant exercise a settlement annuity option
no later than the maximum maturity age stated above. For example an annuitant
age 60 at issue must exercise a settlement option prior to the attainment of
age 86. The Company will use the issue age of the youngest named annuitant in
the determination of the required settlement option date.

If certificates are issued with annuitants over age 84, a withdrawal
charge could be imposed if they terminate the certificate rather than elect a
settlement option upon attainment of the maximum maturity age. This is a result
of the restrictions by Pennsylvania in combination with the 7-year withdrawal
charge schedule of the certificate.

APPENDIX D

PRIOR CONTRACTS

Prior to February, 1995, the Company issued a class of variable annuity
contract which is no longer being issued but under which purchase payments may
continue to be made ("prior contract") -- "Ven 8" contracts, which were sold
during the period from September 1992 until February, 1995.

The principal differences between the contract offered by this
Prospectus and the prior contract relate to the investment options available
under the contracts, a minimum interest rate to be credited for any guarantee
period under the fixed portion of the contracts, the charges made by the
Company and the death benefit provisions.

INVESTMENT OPTIONS

The investment options under the prior contract differ as follows from
the investment options described in this Prospectus. The prior contract does
not allow for investments in the five and seven year fixed account investments
options. The prior contract allows investments in a six year fixed account
investment option not available under the contract offered by this Prospectus.
The prior contract does not provide the Company the authority to offer
additional fixed account investment options for any yearly period from two to
ten years.

FIXED ACCOUNT MINIMUM INTEREST GUARANTEE

The minimum interest rate to be credited for any guarantee period under
the fixed portion of the prior contract is 4%.

<PAGE> 45
MARKET VALUE CHARGE

For purposes of calculating the market value adjustment factor (see
"Fixed Account Investment Options - Market Value Charge") the maximum
difference between "B" and "A" will be 3%. The adjustment factor will never be
greater than 2x(A-4%) and never less than zero. ("A" is the guaranteed interest
rate on the investment account. "B" is the guaranteed interest rate available,
on the date the request is processed, for amounts allocated to a new investment
account with the same length of guarantee period as the investment account from
which the amounts are being withdrawn.)

There will be no market value charge on withdrawals from the fixed
account investment options in the following situations: (a) death of the
annuitant; (b) amounts withdrawn to pay fees or charges; (c) amounts applied at
the maturity date to purchase an annuity as provided in the certificate; (d)
amounts withdrawn from three and six year investment accounts within one month
prior to the end of the guarantee period; and (e) amounts withdrawn in any year
that do not exceed 10% of total purchase payments less any prior partial
withdrawals in that certificate year.

Notwithstanding application of the market value adjustment formula, in
no event will the market value charge (i) exceed the earnings attributable to
the amount withdrawn from an investment account, (ii) together with any
withdrawal charges for an investment account be greater than 10% of the amount
transferred or withdrawn, or (iii) reduce the amount payable on withdrawal or
transfer below the amount required under the non-forfeiture laws of the state
with jurisdiction over the contract. The cumulative effect of the market value
and withdrawal charges (or the effect of the withdrawal charge itself) could,
however, result in a owner receiving total withdrawal proceeds of less than the
owner's investment in the contract.

WITHDRAWAL CHARGES

The withdrawal charges under the prior contract differ from the
withdrawal charges described in this Prospectus.

Prior Contract Withdrawal Charge

The withdrawal charge assessed under the prior contract is as follows:

If a withdrawal is made from the contract by an owner before the
maturity date of the certificate, a withdrawal charge (contingent deferred
sales charge) may be assessed against amounts withdrawn attributable to
purchase payments that have been in the contract for the owner less than six
complete years. There is never a withdrawal charge with respect to earnings
accumulated for an owner in the contract, certain other free withdrawal amounts
described below or purchase payments by or on behalf of the owner that have
been in the contract more than six complete years. In no event may the total
withdrawal charges exceed 6% of the total purchase payments made by or on
behalf of the owner. The amount of the withdrawal charge and when it is
assessed is discussed below:

1. Each withdrawal is allocated first to the "free withdrawal amount"
and second to "unliquidated purchase payments" for each certificate. In any
certificate year, the free withdrawal amount for that year is the greater of
(1) the excess of the owner's contract value on the date of withdrawal over the
unliquidated purchase payments made by or on behalf of the owner (the
accumulated earnings on the owner's certificate) or (2) 10% of total purchase
payments made by or on behalf of the owner less any prior partial withdrawals
by the owner in that certificate year. Withdrawals allocated to the free
withdrawal amount may be withdrawn without the imposition of a withdrawal
charge.

2. If an owner makes a withdrawal for an amount in excess of the free
withdrawal amount, the excess will be allocated to purchase payments which will
be liquidated on a first-in first-out basis. On any withdrawal request, the
Company will liquidate purchase payments equal to the amount of the withdrawal
request which exceeds the free withdrawal amount in the order such purchase
payments were made: the oldest unliquidated purchase payment first, the next
purchase payment second, etc... until all purchase payments have been
liquidated.

<PAGE> 46
<TABLE>
<CAPTION>
NUMBER OF COMPLETE YEARS WITHDRAWAL CHARGE
PURCHASE PAYMENT IN CONTRACT PERCENTAGE
------------------------------------------------------
<S> <C>
0 6%
1 6%
2 5%
3 4%
4 3%
5 2%
6+ 0%
</TABLE>

The total withdrawal charge will be the sum of the withdrawal charges
for the purchase payments being liquidated.

5. There is generally no withdrawal charge on distributions made as a
result of the death of the annuitant or owner and no withdrawal charges are
imposed on the maturity date if the owner annuitizes as provided in the
contract.

OTHER CONTRACT CHARGES

The prior contract makes no provision for the waiver of the $30 annual
administration fee when prior to the maturity date the contract value equals or
exceeds $100,000 at the time of the fee's assessment.

DEATH BENEFIT PROVISIONS

Prior Contract Death Benefit Provisions

The provisions governing the death benefit prior to the maturity date
under the prior contract are as follows:

Death of Annuitant who is not the Owner. The Company will pay the
minimum death benefit, less any debt, to the beneficiary if the owner is not
the annuitant and the annuitant dies before the owner and before the maturity
date. If there is more than one such annuitant, the minimum death benefit will
be paid on the death of the last surviving co-annuitant. The minimum death
benefit will be paid either as a lump sum or in accordance with any of the
annuity options available under the contract. An election to receive the death
benefit under an annuity option must be made within 60 days after the date on
which the death benefit first becomes payable. Rather than receiving the
minimum death benefit, the beneficiary may elect to continue his or her
participation under the contract as a new owner. (In general, a beneficiary
who makes such an election will nonetheless be treated for federal income tax
purposes as if he or she had received the minimum death benefit.)

Death of Annuitant who is the Owner. The Company will pay the minimum
death benefit, less any debt, to the beneficiary if the owner is the annuitant,
dies before the maturity date and is not survived by a co-annuitant. If the
certificate is a non-qualified certificate, the owner is the annuitant and the
owner dies before the maturity date survived by a co-annuitant, the Company,
instead of paying the minimum death benefit to the beneficiary, will pay to the
successor owner an amount equal to the amount payable on total withdrawal
without reduction for any withdrawal charge. If the certificate is a
non-qualified certificate, distribution of the minimum death benefit to the
beneficiary (or of the amount payable to the successor owner) must be made
within five years after the owner's death. If the beneficiary or successor
owner, as appropriate, is an individual, in lieu of distribution within five
years of the owner's death, distribution may be made as an annuity which begins
within one year of the owner's death and is payable over the life of the
beneficiary (or the successor owner, as appropriate) or over a period not in
excess of the life expectancy of the beneficiary (or the successor owner, as
appropriate). If the owner's spouse is the beneficiary (or the successor owner,
as appropriate) that spouse may elect to continue his or her participation
under the contract as a new owner in lieu of receiving the distribution. In
such a case, the distribution rules applicable when a owner dies generally will
apply when that spouse, as the owner, dies.

Death of Owner who is not the Annuitant. If the owner is not the
annuitant and dies before the maturity date and before the

<PAGE> 47
annuitant, the successor owner shall have the ownership rights of the owner
and will be entitled to the owner's interest in the contract. If the
certificate is a nonqualified contract, an amount equal to the amount payable
on total withdrawal, without reduction for any withdrawal charge, will be paid
to the successor owner. Distribution of the amount to the successor owner must
be made within five years of the owner's death. If the successor owner is an
individual, in lieu of distribution within five years of the owner's death,
distribution may be made as an annuity which begins within one year of the
owner's death and is payable over the life of the successor owner (or over a
period not greater than the successor owner's life expectancy). If the owner's
spouse is the successor owner, that spouse may elect to continue his or her
participation under the contract as a new owner in lieu of receiving the
distribution. In such a case, the distribution rules applicable when an owner
dies generally will apply when that spouse, as the owner, dies.

For purposes of these death benefit provisions applicable on an owner's
death (whether or not such owner is an annuitant), if a non-qualified
certificate has more than one individual owner, death benefits must be paid as
provided in the contract upon the death of any such owner. If both owners are
individuals, the distributions will be made to the remaining owner rather than
to the successor owner.

Entity as Owner. In the case of a non-qualified certificate where the
owner is not an individual (for example, the owner is a corporation or a
trust), the special rules stated in this paragraph apply. For purposes of
distributions of death benefits before the maturity date, any annuitant under
the certificate will be treated as the owner, and a change in the annuitant or
any co-annuitant shall be treated as the death of the owner. In the case of
distributions which result from a change in an annuitant when the annuitant
does not actually die, the amount distributed will be reduced by charges which
would otherwise apply upon withdrawal.

If a non-qualified certificate has both an individual and a
non-individual owner, death benefits must be paid as provided in the contract
upon the death of any annuitant, a change in any annuitant, or the death of any
individual owner, whichever occurs earlier.

The minimum death benefit during the first six certificate years will
be equal to the greater of: (a) the owner's contract value on the date due
proof of death and all required claim forms are received at the Company's
Annuity Service Office, or (b) the sum of all purchase payments made by or on
behalf of the owner, less any amount deducted in connection with partial
withdrawals made by the owner. During any subsequent six contract year period,
the minimum death benefit will be the greater of (a) the owner's contract value
on the date due proof of death and all required claim forms are received at the
Company's Annuity Service Office, or (b) the minimum death benefit on the last
day of the previous six certificate year period plus any purchase payments made
by or on behalf of the owner and less any amount deducted in connection with
partial withdrawals made by the owner since then. If the annuitant dies after
the first of the month following his or her 85th birthday, the minimum death
benefit will be the owner's contract value on the date due proof of death and
all required claim forms are received at the Company' Annuity Service Office.

Death benefits will be paid within seven days of receipt of due proof
of death and all required claim forms at the Company's Annuity Service Office,
subject to postponement under the same circumstances that payment of
withdrawals may be postponed.

Prior Contract Enhanced Death Benefit Option

The Company is offering an Enhanced Death Benefit Option to any owner
of a certificate ("Certificate") issued under a prior contract having a
certificate date not later than August 15, 1994. The Enhanced Death Benefit
Option is available as an endorsement to such Certificates only upon the
payment of an additional purchase payment of at least 10% of all purchase
payments made to the Certificate through August 15, 1994 or $10,000, whichever
is greater. Certificates dated subsequent to August 15 will not be eligible for
the Enhanced Death Benefit endorsement. (An owner of a Certificate may also
exchange the Certificate for the Certificate described in the Prospectus, see
"Exchange Offer and Enhanced Death Benefit Option" in the Prospectus.)

The Enhanced Death Benefit, as described below, will provide an annual
step-up in death benefit comparable to the death benefit described in this
Prospectus under "Death Benefit Before Maturity Date," except that the death
benefit under the endorsement will be payable on the death of the last
surviving annuitant as opposed to the death of the first owner as provided in
this Prospectus.

The Enhanced Death Benefit provided by the endorsement will always be
equal to or better than the death benefit of a Certificate issued without the
endorsement. In the case of the death of the annuitant on or prior to the
first of the month following his or her 85th birthday, the minimum death
benefit is as described in Appendix D under the caption "Prior Contract Death
Benefit Provisions" except that the death benefit is stepped up each
certificate year instead of each six certificate year period. In the case of
the death of the annuitant after the first of the month following his or her
85th birthday, the minimum death benefit is the greater of the contract value
or the excess of the sum of all purchase payments less the sum of any amounts
deducted in connection with certain withdrawals. Under a Certificate issued
without the endorsement, if the annuitant dies after the first of the month
following his or her 85th birthday, the death benefit is the contract

<PAGE> 48
value only. For purposes of computing the Enhanced Death Benefit under a
Certificate issued without the endorsement, the death benefit will be computed
as if the Enhanced Death Benefit endorsement had been a part of the Certificate
on the certificate date.

OTHER CONTRACT PROVISIONS

Contract Maturity Date

Under the prior contract, the contract maturity date is the later of
the first day of the month following the 85th birthday of the annuitant or the
sixth certificate anniversary. The prior contract allows the owner to specify
a different maturity date at any time by written request at least one month
before both the previously specified and the new maturity date. The new
maturity date must be the first day of a month no later than the first day of
the month following the 85th birthday of the annuitant.

Annuity Tables Assumed Interest Rate

A 4% assumed interest rate is built into the annuity tables in the
prior contract used to determine the first variable annuity payment to be made
under that contract.

Beneficiary

Under the prior contract certain provisions relating to beneficiary are
as follows:

The beneficiary is the person, persons or entity designated in the
application or as subsequently named to whom benefits will be paid on the death
of the annuitant. The beneficiary may be changed by the owner during the
lifetime of the annuitant and prior to the maturity date subject to the rights
of any irrevocable beneficiary. Any change must be made in writing, approved
by the Company and if approved, will be effective as of the date on which
written. The Company assumes no liability for any payments made or actions
taken before the change is approved. Prior to the maturity date, if no
beneficiary survives the annuitant, the owner or the owner's estate will be the
beneficiary. The interest of any beneficiary is subject to that of any
assignee. In the case of certain qualified contracts or certificates,
regulations promulgated by the Treasury Department prescribe certain
limitations on the designation of a beneficiary.

Ownership

Under the prior contract certain provisions relating to ownership are
as follows:

The contract is owned by the group holder. However, all contract
rights and privileges not expressly reserved to the group holder may be
exercised by each owner as to his or her interests as specified in his or her
certificate. Prior to the maturity date, an owner is the person designated in
an application or as subsequently named. On and after a certificate's maturity
date, the annuitant is the owner and after the death of the annuitant, the
beneficiary is the owner.

In the case of non-qualified contracts, ownership of the contract may
be changed at any time. In the case of non-qualified certificates, an owner
may assign his or her interest in the contract during the lifetime of the
annuitant prior to the maturity date, subject to the rights of any irrevocable
beneficiary. Assigning a contract or interest therein, or changing the
ownership of a contract or certificate, may be treated as a distribution of all
or a portion of the contract value for Federal tax purposes. Any change of
ownership or assignment must be made in writing. Any change must be approved
by the Company. Any assignment and any change, if approved, will be effective
as of the date on which written. The Company assumes no liability for any
payments made or actions taken before a change is approved or assignment is
accepted or responsibility for the validity or sufficiency of any assignment.

Modification

The prior contract does not include "free withdrawal percentage" among
contract terms the Company is authorized to change on 60 days' notice to the
group holder.

<PAGE> 49
<TABLE>
TABLE OF ACCUMULATION UNIT VALUES

<CAPTION>
UNIT VALUE
AT START UNIT VALUE AT NUMBER OF UNITS
SUB-ACCOUNT OF YEAR END OF YEAR AT END OF YEAR
- --------------------------------------------------------------------------
<S> <C> <C> <C>
Global Equity
1992 ................ $12.003976 $11.790318 28,203.763
1993 ................ 11.790318 15.450341 985,277.929
1994 ................ 15.450341 15.500933 2,268,423.530
Pasadena Growth
1992* ............... $10.000000 $ 9.923524 58,049.495
1993 ................ 9.923524 $ 9.413546 707,931.534
1994 ................ 9.413546 8.837480 1,001,113.147
Equity
1992 ................ $12.386657 $13.143309 122,807.657
1993 ................ 13.143309 15.075040 1,315,253.114
1994 ................ 15.075040 14.786831 1,958,082.571
Value Equity
1993** .............. $10.000000 $11.175534 715,700.792
1994 ................ 11.175534 11.107620 1,432,473.155
Growth and Income
1992 ................ $10.942947 $11.927411 149,476.889
1993 ................ 11.927411 12.893007 1,610,454.400
1994 ................ 12.893007 13.076664 2,142,828.604
Strategic Bond
1993** .............. $10.000000 $10.750617 381,406.287
1994 ................ 10.750617 9.965972 564,406.390
Global Government Bond
1992 ................ $13.322602 $13.415849 56,786.509
1993 ................ 13.415849 15.741586 745,370.831
1994 ................ 15.741586 14.630721 694,644.982

Investment Quality Bond (formerly called Bond Sub-account)

1992 ................ $13.147350 $13.936240 59,746.432
1993 ................ 13.936240 15.118716 319,417.770
1994 ................ 15.118716 14.216516 384,804.353

U.S. Gov. Securities (formerly called U.S. Gov. Bond Sub-account)

1992 ................ $13.015785 $13.651495 212,815.440
1993 ................ 13.651495 14.490734 783,550.472
1994 ................ 14.490734 14.111357 585,709.535
Money Market
1992 ................ $12.892485 $13.137257 28,928.622
1993 ................ 13.137257 13.303085 331,225.229
1994 ................ 13.303085 13.623292 1,079,557.666
Aggressive Asset Allocation
1992 ................ $10.880194 $11.623893 21,660.089
1993 ................ 11.623893 12.642493 244,300.482
1994 ................ 12.642493 12.381395 395,864.362
Moderate Asset Allocation
1992 ................ $11.012835 $11.772128 120,020.418
1993 ................ 11.772128 12.775798 1,245,900.794
1994 ................ 12.775798 12.396295 1,690,801.919
</TABLE>

<PAGE> 50
<TABLE>
<S> <C> <C> <C>
Conservative Asset Allocation
1992 ....................... $11.102574 $11.821212 56,414.765
1993 ....................... 11.821212 12.705196 330,900.271
1994 ....................... 12.705196 12.298940 478,239.388
<FN>
* This Sub-account commenced operations on December 11, 1992.
** This Sub-account commenced operations on February 19, 1993.
</TABLE>