VARIABLE LIFE ACCOUNT B OF AETNA LIFE INSURANCE & ANNUITY CO, S-6EL24/A, 1997-07-17

VARIABLE LIFE ACCOUNT B OF AETNA LIFE INSURANCE & ANNUITY CO
S-6EL24/A, 1997-07-17

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As filed with the Securities and Exchange Registration No. 333-15817
Commission on July 17, 1997 Registration No. 811-4536

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
- --------------------------------------------------------------------------------
PRE-EFFECTIVE AMENDMENT NO. 1 TO FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT TRUSTS
REGISTERED ON FORM N-8B-2
- --------------------------------------------------------------------------------
Variable Life Account B of Aetna Life Insurance and Annuity Company
(Exact Name of Trust)

Aetna Life Insurance and Annuity Company
(Name of Depositor)

151 Farmington Avenue, RE4A, Hartford, Connecticut 06l56
(Complete Address of Depositor's Principal Executive Offices)
- --------------------------------------------------------------------------------
Julie E. Rockmore, Counsel
Aetna Life Insurance and Annuity Company
151 Farmington Avenue, RE4A, Hartford, Connecticut 06l56
(Name and Complete Address of Agent for Service)
- --------------------------------------------------------------------------------

It is proposed that this filing will become effective as soon as practicable.

Pursuant to Rule 24f-2 under the Investment Company Act of 1940, Registrant has
registered an indefinite number of securities under the Securities Act of 1933.
Registrant filed a Rule 24f-2 Notice for the fiscal year ended December 31, 1996
on February 28, 1997.

The Registrant hereby amends this Registration Statement on such dates as may be
necessary to delay its effective date until the Registrant shall file a further
amendment which specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of the Securities
Act of 1933 or until the Registration Statement shall become effective on such
date as the Commission, acting pursuant to Section 8(a), may determine.

<PAGE>

VARIABLE LIFE ACCOUNT B
OF
AETNA LIFE INSURANCE AND ANNUITY COMPANY

Pre-Effective Amendment No. 1 to
Registration Statement on Form S-6
Cross Reference Sheet

<TABLE>
<CAPTION>
N-8B-2
Item No. Part I (Prospectus)

<S> <C>
1 Cover Page; The Separate Account; The Company and Management
2 Cover Page; The Separate Account; The Company and Management
3 Not Applicable
4 Distribution of the Certificates
5 The Separate Account; The Company and Management
6 The Separate Account; The Company and Management
7 Not Applicable
8 Not Applicable
9 Additional Information - Legal Matters
10 The Separate Account; Certificate Rights; Certificate Choices; Additional Information;
Miscellaneous Certificate Provisions; Termination or Change in Coverage; Allocation of
Premiums - Fund Additions, Deletions or Substitutions
11 Allocation of Premiums - The Funds
12 Allocation of Premiums - The Funds
13 Charges & Fees
14 Certificate Choices
15 Allocation of Premiums; Certificate Choices; Certificate Values
16 The Separate Account; Allocation of Premiums - The Funds; Certificate Values
17 Certificate Rights
18 The Separate Account
19 Additional Information - Reports to Owners
20 Not Applicable

<PAGE>

<CAPTION>
N-8B-2
Item No. Part I (Prospectus)

<S> <C>
21 Certificate Rights - Certificate Loans
22 Not Applicable
23 The Company and Management
24 Not Applicable
25 The Company and Management
26 Not Applicable
27 The Company and Management
28 The Company and Management
29 The Company and Management
30 Not Applicable
31 Not Applicable
32 Not Applicable
33 Not Applicable
34 Not Applicable
35 Additional Information - State Regulation
36 Not Applicable
37 Not Applicable
38 Additional Information - Distribution of the Certificates
39 The Company and Management
40 Not Applicable
41 The Company and Management
42 Not Applicable
43 Not Applicable
44 Charges & Fees; Certificate Values
45 Not Applicable
46 The Separate Account; Certificate Values
47 Not Applicable
48 Not Applicable
49 Not Applicable

<PAGE>

<CAPTION>
N-8B-2
Item No. Part I (Prospectus)

<S> <C>
50 The Separate Account
51 Cover Page; Certificate Choices
52 Allocation of Premiums - Fund Additions, Deletions or Substitutions; Termination or Change
in Coverage
53 Tax Matters
54 Not Applicable
55 Not Applicable
56 Not Applicable
57 Not Applicable
58 Not Applicable
59 Financial Statements of Separate Account; Financial Statements of Insurance Company
</TABLE>

<PAGE>

Variable Life Account B
Aetna Life Insurance and Annuity Company (the "Company")
151 Farmington Avenue
Hartford, Connecticut 06156

(800)-677-4636
Prospectus Dated , 1997
Flexible Premium Group Variable Universal Life Insurance for New York State
United Teachers Benefit Trust ("NYSUT Trust")

This Prospectus describes Certificates issued by the Company under a group
Policy to provide life insurance coverage for certain Members of New York State
United Teachers "NYSUT" and their spouses and children. The Certificates allow
flexible premium payments, provided that sufficient premiums are paid to cover
charges or, during the first 5 years after issuance or after a coverage
increase, to qualify for the Certificate's No Lapse Coverage.

You may choose (and later change) whether the benefit payable upon the death of
the insured person will generally remain constant or will vary with the
Certificate's account value. You may borrow from the Certificate's account
value, surrender the Certificate for any unborrowed value, make a Partial
Surrender, request increases or decreases in coverage, and elect certain
optional supplemental benefits (in each case subject to limitations described
further in this Prospectus).

The account value is the amount of Net Premiums you have paid, increased (or
decreased) by the return (positive or negative) earned thereon, after we impose
the charges described in this Prospectus. You decide whether your account value
is invested in Variable Life Account B under one or more Variable Options,
and/or in the Fixed Account. The value in each Variable Option is not
guaranteed and will vary with the investment performance of an associated Fund.
The Variable Options are: Aetna Variable Fund; Aetna Income Shares; Aetna
Variable Encore Fund; Aetna Investment Advisers Fund, Inc.; Aetna Ascent
Variable Portfolio; Aetna Crossroads Variable Portfolio; Aetna Legacy Variable
Portfolio; Aetna Variable Index Plus Portfolio; Fidelity VIP Equity-
Income Portfolio; Fidelity VIP II--Contrafund Portfolio and Janus Aspen
Series--Aggressive Growth Portfolio, Growth Portfolio, Balanced Portfolio and
Worldwide Growth Portfolio. Net Premiums allocated to the Fixed Account will
accumulate at rates of interest we determine. Such rates will not be less than
4% a year. Unless specifically mentioned, this Prospectus describes only the
Variable Options. Not all Variable Options may be available under all Policies
or in all jurisdictions. The Statement of Additional Information ("SAI") for
any of the Funds may be obtained by calling (800) 677-4636.

Replacing existing insurance or supplementing an existing flexible premium
variable life insurance policy with a Certificate may not be to your advantage.
The Certificates have a "free look" period during which you may return the
Certificate. (See Right of Certificate Examination)

The Policy and outstanding Certificates (including your coverage) may be
terminated at any time, without your consent, by NYSUT Trust or in certain
other circumstances. (See Termination or Change in Coverage). Also, NYSUT Trust,
by agreement with the Company, may make changes in the Certificate (and your
coverage) without your consent; however, if such changes result in a reduction
in benefits or an increase in guaranteed charges, your consent is required.

THIS PROSPECTUS AND OTHER INFORMATION ABOUT VARIABLE LIFE ACCOUNT B REQUIRED TO
BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION CAN BE FOUND IN THE SEC'S
WEB SITE AT http://www.sec.gov.

BOTH THIS PROSPECTUS AND THE ATTACHED PROSPECTUS FOR ANY APPLICABLE UNDERLYING
FUND SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE. 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.

SUBJECT TO COMPLETION OR AMENDMENT

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF ANY OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.

i
<PAGE>

Table of Contents

Definitions ............................................................... iv
The Separate Account ...................................................... 1
Charges & Fees ............................................................ 1
Premium Load ............................................................ 1
Charges and Fees Assessed Against the Total Account Value ............... 1
Monthly Deduction ....................................................... 1
Cost of Insurance ...................................................... 2
Certificate Fee ........................................................ 2
Charges for Supplemental Benefits ...................................... 2
Transfer and Partial Surrender Charges .................................. 2
Mortality and Expense Risk Charge ....................................... 2
Charges Assessed Against the Underlying Funds ........................... 3
Allocation of Premiums .................................................... 5
The Funds ............................................................... 5
Investment Advisers of the Funds: ....................................... 6
Mixed and Shared Funding; Conflicts of Interest ......................... 6
Fund Additions, Deletions or Substitutions .............................. 7
Fixed Account ........................................................... 7
Certificate Choices ....................................................... 8
Premium Payments ........................................................ 8
Commencement of Coverage ................................................ 8
5-Year No Lapse Coverage Provision ...................................... 9
Death Benefit Options ................................................... 9
Transfers ............................................................... 9
Telephone Transfers ..................................................... 10
Automated Transfers (Dollar Cost Averaging) ............................. 10
Termination or Change in Coverage ......................................... 10
Certificate Values ........................................................ 12
Total Account Value ..................................................... 12
Accumulation Unit Value ................................................. 12
Maturity Value .......................................................... 12
Certificate Rights ........................................................ 13
Full Surrenders ......................................................... 13
Partial Surrenders ...................................................... 13
Paid-Up Nonforfeiture Option ............................................ 13
Grace Period ............................................................ 14
Reinstatement of a Lapsed Certificate ................................... 14
Certificate Loans ....................................................... 15
Certificate Changes ....................................................... 15
Increase in Specified Amount ............................................ 16
Decrease in Specified Amount ............................................ 16
Change in Death Benefit Option .......................................... 16
Right of Certificate Examination ........................................ 16
Supplemental Benefits ................................................... 17
Certificate Settlement .................................................... 17
Settlement Options ...................................................... 17
Calculation of Variable Payment Settlement Option Values ................ 18
The Company and Management ................................................ 19

ii
<PAGE>

Additional Information .................................................... 21
Reports to Owners ....................................................... 21
Right to Instruct Voting of Fund Shares ................................. 21
State Regulation ........................................................ 21
Legal Matters ........................................................... 21
The Registration Statement .............................................. 22
Distribution of the Certificates ........................................ 22
Independent Auditors .................................................... 22
Miscellaneous Certificate Provisions ...................................... 25
The Certificates ........................................................ 25
Payment and Deferral of Benefits ........................................ 25
Suicide and Incontestability ............................................ 25
Protection of Proceeds .................................................. 26
Nonparticipation ........................................................ 26
Changes in Owner and Beneficiary; Assignment ............................ 26
Performance Reporting and Advertising ................................... 26
Illustrations of Death Benefit and Total Account Values ................. 26

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY JURISDICTION IN WHICH SUCH
OFFERING MAY NOT BE LAWFULLY MADE. NO DEALER, SALESMAN OR OTHER PERSON IS
AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION
WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, OR OTHER
SALES MATERIAL AUTHORIZED BY THE COMPANY AND, IF GIVEN OR MADE, SUCH OTHER
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON.

THE PURPOSE OF THE CERTIFICATES IS TO PROVIDE INSURANCE PROTECTION. LIFE
INSURANCE IS A LONG-TERM INVESTMENT. OWNERS SHOULD CONSIDER THEIR NEED FOR
INSURANCE COVERAGE AND THE CERTIFICATES' LONG-TERM INVESTMENT POTENTIAL. NO
CLAIM IS MADE THAT THE CERTIFICATES ARE IN ANY WAY SIMILAR OR COMPARABLE TO AN
INVESTMENT IN A MUTUAL FUND.

iii
<PAGE>

Definitions

Accumulation Unit: A unit used to measure the value of the Owner's interest in
each applicable Variable Option. An Accumulation Unit is used to calculate the
value of the variable portion of a Certificate before the election of a
Settlement Option.

Attained Age: A person's age (as of his or her closest birthday) on the
Certificate Issue Date, plus the number of full Certificate Years elapsed.

Amount at Risk: The Death Benefit under a Certificate divided by 1.0032737,
minus the Certificate's Total Account Value.

Annuitant: A person whose life determines the amount of life contingent annuity
payments.

Annuity: A series of payments for life or for a definite period.

Basic Monthly Premium: The minimum amount of premium that must be paid to
maintain the 5- year No Lapse Coverage in effect, assuming there have been no
Certificate Loans or Partial Surrenders.

Certificate Loan: The amount received by borrowing from the Total Account
Value.

Certificate Year/Certificate Anniversary: The first Certificate Year is the 12
month period beginning on the Issue Date of the Certificate. Your Certificate
Anniversary is the Certificate Issue Date plus 1 Year, 2 Years, etc.

Company: Aetna Life Insurance and Annuity Company.

Cost of Insurance: A monthly charge related to the Company's expected mortality
cost for an Insured's basic insurance coverage under a Certificate, not
including any supplemental benefit provision that you may elect through a
Certificate rider. It is equal to the Amount at Risk for the Insured on the
Monthly Deduction Day, multiplied by that Insured's monthly Cost of Insurance
rate.

Death Benefit: The amount, described in the Death Benefit Options section,
which is payable following an Insured's death, subject to all provisions
contained in the Certificate.

Death Benefit Option: Either of the two methods that you may elect for
determining a Death Benefit.

Fixed Account: A non-variable funding option available under the Certificates
that guarantees a minimum interest rate of 4% per year.

Fixed Account Value: The non-loaned portion of a Certificate's Total Account
Value attributable to its non-variable portion. The Fixed Account Value is part
of the general assets of the Company.

Full Surrender: Your right to terminate a Certificate in exchange for payment
of its Surrender Value.

Fund(s): One or more of the open-end management investment companies (mutual
fund), or a separate series thereof, whose shares are purchased by the Separate
Account to fund the benefits provided by the Certificates.

iv
<PAGE>

Grace Period: The 61-day period beginning on any Monthly Deduction Day on which
a Certificate's Surrender Value is insufficient to cover the current Monthly
Deduction. A similar Grace Period also applies if the amount of any loan and
any accrued loan interest exceeds the Total Account Value. The Certificate will
lapse without value at the end of the 61-day period unless a sufficient payment
is received by the Company or unless the 5-year No Lapse Coverage is in effect.

Home Office: The Company's principal executive offices at 151 Farmington
Avenue, Hartford, Connecticut 06156.

Insured: The person on whose life a Certificate is issued. In order to be
eligible for coverage initially, or to continue to be covered, an Insured must
be (a) a Member or (b) an Insured Member's spouse. However, no coverage is
available for persons described in clause (b) whose attained Age is 80 or older
at the Issue Date of their Certificate.

Issue Date: The Issue Date for a Certificate, or for a Specified Amount
increase, is stated in the Certificate Specifications or Supplemental
Certificate Specifications in your Certificate.

Loan Account Value: The sum of all unpaid Certificate Loans. The amount
necessary to repay Certificate Loans in full is the Loan Account Value plus any
accrued interest.

Loan Value: Is 90% of the Total Account Value of a Certificate.

Maturity Date: The Certificate Anniversary on which the Insured's Attained Age
is 100.

Member: An eligible member of NYSUT or a NYSUT agency fee payer.

Monthly Deduction: A monthly charge assessed against the Total Account Value,
which includes the Cost of Insurance, the Certificate fee and any charges for
supplemental benefit riders.

Monthly Deduction Day: The first Monthly Deduction Day is the Issue Date.
Monthly Deduction Days occur each month thereafter on the same day as the Issue
Date of the Certificate.

Net Premium: The Net Premium is equal to the amount of the premium paid less
the then-current Premium Load deduction.

Net Single Premium: The amount required to purchase a guaranteed benefit if
allocated to the Fixed Account, using the Insured's Age and premium class. The
Net Single Premium is determined using a guaranteed interest rate of 4% per
year and the Certificate's guaranteed maximum Cost of Insurance rates.

No Lapse Coverage: A provision in the Certificate providing that, if at least
the Basic Monthly Premiums are paid, a Certificate will remain in force for a
period of at least 5 years beginning on the Issue Date or the Issue Date of an
increase in Specified Amount, even if the Surrender Value is insufficient to
pay the current Monthly Deduction.

Owner: The person to whom a Certificate is issued; the Owner is entitled to
exercise all rights under the Certificate and is also referred to as "You".

Partial Surrender: The amount you can receive in cash by surrendering a part of
a Certificate.

Planned Premiums: Premiums we agree to bill.

v
<PAGE>

Policy: The group life insurance contract owned by NYSUT Trust, pursuant to
which the Certificates are issued. The Certificates are subject to the terms of
the Policy.

Pro-Rata Basis: In the same proportion that each of the Variable Options and
the Fixed Account Value under a Certificate bear to the sum of Certificate's
Separate Account Value and Fixed Account Value.

SEC: Securities and Exchange Commission.

Separate Account: A separate account maintained by the Company for the purpose
of funding the Certificates; Variable Life Account B.

Separate Account Value: The portion of a Certificate's Total Account Value
attributable to the variable portion of the Certificate. For any Variable
Option, it is the Accumulation Unit Value for that Variable Option multiplied
by the number of Accumulation Units for that Variable Option credited to the
Certificate.

Settlement Option(s): The method(s) by which payment may be made from a Death
Benefit or upon the Maturity Date or the Full Surrender of a Certificate.

Specified Amount: The amount chosen by the Owner at enrollment and used in
determining the Death Benefit. It may be increased or decreased as described in
this Prospectus.

Surrender Value: The Total Account Value on the date of surrender, less the
Loan Account Value and less any accrued interest.

Total Account Value: The sum of the Fixed Account Value, the Separate Account
Value and the Loan Account Value.

Valuation Date: The date and time at which the Accumulation Unit Value of a
Variable Option is calculated. Currently, this calculation occurs after the
close of business of the New York Stock Exchange on any normal business day,
Monday through Friday, that the New York Stock Exchange is open.

Valuation Period: The period of time between successive Valuation Dates.

Variable Option: One or more of the variable funding options available under
the Certificate as described in this Prospectus.

We, our, us, Company: Aetna Life Insurance and Annuity Company.

Written Request: A request in writing, in a form satisfactory to us and
received by us at the Home Office.

You, your: The person entitled to purchase or exercise any rights or privileges
under a Certificate or a Settlement Option. This is generally the Owner (or,
during a Settlement Option, the payee).

vi
<PAGE>

The Separate Account

The Separate Account that supports the Variable Options is our Variable Life
Account B. Amounts allocated to the Separate Account are invested in the Funds.
Each of the Funds is an open-end management investment company (mutual fund),
or a separate series thereof, whose shares are purchased by the Separate
Account to fund the benefits provided by the Certificates. The Funds currently
available under the Separate Account, including their investment objectives and
their investment advisers, are described in this Prospectus. Complete
descriptions of the Funds' investment objectives and restrictions and other
material information relating to an investment in the Funds are contained in
the prospectuses for each of the Funds which are attached to this Prospectus.

Variable Life Account B was established pursuant to a June 18, 1986 resolution
of the Board of Directors of the Company. Under Connecticut Insurance Law, the
income, gains or losses of the Separate Account are credited to the Separate
Account without regard to the other income, gains or losses of the Company. The
Separate Account's assets are held for the Company's variable life insurance
policies. Any and all distributions made by the Funds with respect to Fund
shares held by the Separate Account will be reinvested in additional Fund
shares at net asset value. The assets maintained in the Separate Account that
are not in excess of the Separate Account's reserves and other liabilities
attributable to variable life insurance policies will not be charged with any
liabilities arising out of any other business conducted by the Company. The
Company is, however, responsible for meeting all obligations under the
Certificates to the Owners.

The Separate Account is registered with the SEC as a unit investment trust
under the Investment Company Act of 1940 (the "1940 Act") and meets the
definition of separate account under the federal securities laws. Such
registration does not involve any approval or disapproval by the SEC of the
Separate Account or the Company's management or investment practices or
policies. The Company does not guarantee the Separate Account's investment
performance.

Charges & Fees

Premium Load

Before a premium is allocated to the Certificate's Total Account Value, 8% of
the premium is deducted to cover certain expenses and taxes associated with the
sales, start-up and maintenance costs of the Certificates. We reserve the right
to increase this charge to not more than 10% under both new and
previously-issued Certificates.

Charges and Fees Assessed Against the Total Account Value

Charges and fees assessed against the Total Account Value will be deducted from
each of a Certificate's Variable Options and Fixed Account Value on a Pro Rata
Basis.

Monthly Deduction

The Monthly Deduction includes the Cost of Insurance, a Certificate fee, and
any charges for supplemental benefits. Monthly Deductions begin on the Issue
Date, even if the Issue Date is earlier than the date the application form for
a Certificate is signed, and occur on each Monthly Deduction Day thereafter. If
the Certificate's issuance is delayed due to underwriting requirements, the
charges will not be assessed until the underwriting is complete and the
application for the Certificate is approved.

As to when insurance coverage and investment performance commence under a
Certificate, see Enrollment and Commencement of Coverage.

1
<PAGE>

Cost of Insurance

The Cost of Insurance charge is related to the Company's expected mortality
cost for your base insurance coverage under a Certificate, not including any
supplemental benefits that you may elect through a Certificate rider. The Cost
of Insurance charge is equal to the Certificate's Amount at Risk on the Monthly
Deduction Day, multiplied by a monthly Cost of Insurance rate. Our Amount at
Risk at any time is approximately the difference between the Certificate's
then-applicable Death Benefit and its Total Account Value. An increase in the
Total Account Value or a decrease in the Death Benefit will result in a smaller
Cost of Insurance charge, while a decrease in the Total Account Value or an
increase in the Death Benefit will result in a larger Cost of Insurance charge.

The Cost of Insurance rate generally increases over the life of a Certificate
and is based on the Insured's Attained Age and the Insured's risk class. The
Cost of Insurance rates for standard risk Insureds will not exceed those based
on a 50% male/50% female blend under the 1980 Commissioners Standard Ordinary
Mortality Table, smoker or non-smoker (1980 Tables). Substandard risk Insureds
will have monthly deductions based on Cost of Insurance rates which may be
higher than those set forth in the 1980 Tables. A table of guaranteed maximum
Cost of Insurance rates per $1,000 of the Amount at Risk will be included in
each Certificate. Subject to the applicable guaranteed maximum rates, the
monthly Cost of Insurance rates may be adjusted by us from time to time.

Current cost of insurance rates are generally lowest for Certificates having
Specified Amounts of at least $250,000. We expect to review our current cost of
insurance rates on at least an annual basis in light of the actual mortality
experience of participants under the NYSUT Trust group Policy. In many cases,
we expect that these periodic reviews will result in upward or downward
revisions to the current Cost of Insurance rates that apply both to previously
and subsequently-issued Certificates. Cost of Insurance rates will be the same
for male and female insureds, and will generally be lower for non-smokers than
for smokers. We also offer preferred Cost of Insurance rates for both smokers
and non-smokers who meet more stringent requirements than do standard risk
smokers and non-smokers, respectively. If an Insured classified "smoker"
changes his smoking habits so as to fall within our non-smoker category, you
may make a Written Request for reclassification after the first Certificate
Year.

Cost of Insurance rates for an increase in Specified Amount for which evidence
of insurability has been provided will be based on the Insured's risk class at
the time of the increase.

Certificate Fee

The Monthly Deduction also includes a Certificate fee of $14 a month during the
first Certificate Year from the Issue Date of the Certificate or increases and
$6 a month thereafter. This charge is for administrative expenses, such as risk
underwriting and Certificate issuance, premium billing and collection,
Certificate value calculation, confirmation of Certificate transactions, and
periodic reports to Owners. We reserve the right to raise this charge, both for
new and previously issued Certificates, to not more than $19 a month during the
first Certificate Year from the Issue Date of the Certificate or increases and
$11 a month thereafter. The monthly Certificate fee is not expected to exceed
our actual administrative costs.

Charges for Supplemental Benefits

If you elect any supplemental benefits through adding riders to the
Certificate, a supplemental benefits charge may be included in the Monthly
Deduction amount. The amount of any charge will vary depending upon the actual
supplemental benefits selected and is described on each applicable Certificate
rider.

Transfer and Partial Surrender Charges

We reserve the right to charge an administrative fee of up to $25 for each
transfer between investment options in excess of 12 transfers per year. For
Partial Surrenders, we reserve the right to charge an administrative fee of $25
or, if less, 2% of the surrender amount.

Mortality and Expense Risk Charge

A mortality and expense risk charge will be deducted from the Separate Account
Value to compensate the Company for the aggregate mortality and expense risks
assumed in connection with the Certificates. The mortality risk assumed

2
<PAGE>

by the Company is that Insureds, as a group, may live for a shorter period of
time than estimated and that the Company will, therefore, pay Death Benefits
before it is able to collect sufficient amounts of Cost of Insurance charges.
The expense risk assumed is that expenses incurred in issuing and administering
the Certificates and operating the Separate Account will be greater than the
administrative charges that the Company can impose for such expenses. We expect
to earn a profit from this charge.

The mortality and expense risk charge will be deducted daily and currently
equals an annual rate of 0.85% of the average daily net assets of the Separate
Account during the first 10 Certificate years and 0% thereafter. Because the
Certificates were first offered for sale in 1997, the planned deduction after
the tenth year has not yet gone into effect for any outstanding Certificate.
The Company reserves the right to increase or decrease the mortality and
expense risk charge if it believes that circumstances have changed so that
current charges are no longer appropriate. However, in no event will the charge
exceed 1.25% of average daily net assets on an annual basis. Beginning in
Certificate year 11 the Annual rate is guaranteed not to exceed 0.40% of net
assets on an annual basis.

The Separate Account currently is not subject to any taxes. However, if taxes
are assessed against the Separate Account, we reserve the right to assess taxes
against the Separate Account Value.

Charges Assessed Against the Underlying Funds

The following table illustrates the investment advisory fees, other expenses
and total expenses paid by each of the Funds as a percentage of average net
assets based (except otherwise noted) on figures for the year ended December
31, 1996:

<TABLE>
<CAPTION>
Investment
Advisory Fees1 Other Expenses Total Fund
(after expense (after expense Annual
reimbursement) reimbursement) Expenses
<S> <C> <C> <C>
Aetna Variable Fund(2) 0.50% 0.06% 0.56%
Aetna Income Shares(2) 0.40% 0.08% 0.48%
Aetna Variable Encore Fund(2) 0.25% 0.10% 0.35%
Aetna Investment Advisers Fund, Inc.(2) 0.50% 0.08% 0.58%
Aetna Ascent Variable Portfolio(2) 0.60% 0.15% 0.75%
Aetna Crossroads Variable Portfolio(2) 0.60% 0.15% 0.75%
Aetna Legacy Variable Portfolio(2) 0.60% 0.15% 0.75%
Aetna Variable Index Plus Portfolio(2) 0.35% 0.15% 0.50%
Fidelity VIP II Contrafund Portfolio(3) 0.61% 0.13% 0.74%
Fidelity VIP Equity-Income Portfolio(3) 0.51% 0.07% 0.58%
Janus Aspen Aggressive Growth Portfolio(4) 0.72% 0.04% 0.76%
Janus Aspen Balanced Portfolio(4) 0.79% 0.15% 0.94%
Janus Aspen Growth Portfolio(4) 0.65% 0.04% 0.69%
Janus Aspen Worldwide Growth Portfolio(4) 0.66% 0.14% 0.80%
</TABLE>

(1) Certain of the unaffiliated Fund advisers reimburse the Company for
administrative costs incurred in connection with administering the Funds as
variable funding options under the Contract. These reimbursements are paid
out of the investment advisory fees and are not charged to investors.

(2) The Company provides administrative services to the Fund and assumes the
Fund's ordinary recurring direct costs under an Administrative Services
Agreement. The new Administrative Services Agreement became effective on May
1, 1996 for Aetna Variable Fund, Aetna Income Shares, Aetna Variable Encore
Fund, Aetna Investment Advisers Fund, Inc., Aetna Ascent Variable Portfolio,
Aetna Crossroads Variable Portfolio, and Aetna Legacy Variable Portfolio.
Therefore, for these Funds the "Other Expenses" shown are not based on
actual figures for the year ended December 31, 1996, but reflect the fee
payable under that Agreement. The Administrative Services Agreement was in
effect for Aetna Variable Index Plus Portfolio since its inception.

Effective August 1, 1996, Investment Advisory Fees were increased for Aetna
Variable Fund, Aetna Income Shares, Aetna Investment Advisers Fund, Inc.,
Aetna Ascent Variable Portfolio, Aetna Crossroads Variable Portfolio, and
Aetna Legacy Variable Portfolio. The Advisory Fees shown above are not based
on actual figures for the year ended December 31, 1996, but reflect the
increased Investment Advisory Fees.

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<PAGE>

(3) A portion of the brokerage commissions that certain funds pay was used to
reduce expenses. In addition, certain funds have entered into arrangements
with their custodian and transfer agent whereby interest earned on
uninvested cash balances was used to reduce custodian and transfer agent
expenses. Including these reductions, the total operating expenses would
have been 0.56% for Equity Income Portfolio and 0.71% for Contrafund
Portfolio.

(4) The fees and expenses shown above are based on gross expenses of the Shares
before expense offset arrangements for the fiscal year ended December 31,
1996. The information for each Portfolio is net of fee waivers or reductions
from Janus Capital. Fee reductions for the Balanced, Growth, and Worldwide
Growth Portfolios reduce the management fee to the level of the
corresponding Janus retail fund. Other waivers, if applicable, are first
applied against the management fee and then against other expenses. Without
such waivers or reductions, the Management Fee, Other Expenses and Total
Fund Annual Expenses would have been 0.92%, 0.15% and 1.07% for Balanced
Portfolio; 0.79%, 0.04% and 0.83% for Growth Portfolio; and 0.77%, 0.14% and
0.91% for Worldwide Growth Portfolio, respectively. Janus Capital may modify
or terminate the waivers or reductions at any time upon at least 90 days'
notice to the Portfolio's Board of Trustees.

For further details on each Fund's expenses, please refer to that Fund's
prospectus.

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<PAGE>

Allocation of Premiums

You may allocate all or a part of your Net Premiums to the Funds currently
available through the Separate Account in connection with a Certificate and/or
you may allocate all or a part of your Net Premiums to the Fixed Account.

The Funds

The investment results of the Funds, whose investment objectives are described
below, are likely to differ significantly. There is no assurance that any of
the Funds will achieve their respective investment objectives. Investment in
some of the Funds involves special risks, which are described in their
respective prospectuses. You should read the attached prospectuses for the
Funds and consider carefully, and on a continuing basis, which Fund or
combination of Funds is best suited to your long-term investment objectives.
Except where otherwise noted, all of the Funds are diversified, as defined in
the Investment Company Act of 1940.

[bullet] Aetna Variable Fund seeks to maximize total return through investments
in a diversified portfolio of common stocks and securities convertible
into common stocks.(1)

[bullet] Aetna Income Shares seeks to maximize total return, consistent with
reasonable risk, through investments in a diversified portfolio
consisting primarily of debt securities.(1)

[bullet] Aetna Variable Encore Fund seeks to provide high current return,
consistent with preservation of capital and liquidity, through
investment in high-quality money market instruments. An investment in
this Fund is neither insured nor guaranteed by the U.S. Government.(1)

[bullet] Aetna Investment Advisers Fund, Inc. seeks to maximize investment
return consistent with reasonable safety of principal by investing in
one or more of the following asset classes: stocks, bonds and cash
equivalents based on the Company's judgment of which of those sectors
or mix thereof offers the best investment prospects.(1)

[bullet] Aetna Generation Portfolios, Inc.--Aetna Ascent Variable Portfolio
seeks to provide capital appreciation by allocating its investments
among equities and fixed income securities. Aetna Ascent is managed
for investors who generally have an investment horizon exceeding 15
years and who have a high level of risk tolerance. See the Fund's
prospectus for a discussion of the risks involved.(1)

[bullet] Aetna Generation Portfolios, Inc.--Aetna Crossroads Variable Portfolio
seeks to provide total return (i.e., income and capital appreciation,
both realized and unrealized) by allocating its investments among
equities and fixed income securities. Aetna Crossroads is managed for
investors who generally have an investment horizon exceeding 10 years
and who have a moderate level of risk tolerance.(1)

[bullet] Aetna Generation Portfolios, Inc.--Aetna Legacy Variable Portfolio
seeks to provide total return consistent with preservation of capital
by allocating its investments among equities and fixed income
securities. Aetna Legacy is managed for investors who generally have
an investment horizon exceeding five years and who have a low level of
risk tolerance.(1)

[bullet] Aetna Variable Portfolios, Inc.--Aetna Variable Index Plus Portfolio
seeks to outperform the total return performance of publicly traded
common stocks represented by the S&P 500 Composite Stock Price Index
("S&P 500"), a broad based stock market index composed of 500 common
stocks selected by the Standard & Poor's Corporation. The Portfolio
uses the S&P 500 as a comparative benchmark because it represents
approximately two-thirds of the total market value of all U.S. common
stocks, and is well known to investors.(1)

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<PAGE>

[bullet] Fidelity Investments' Variable Insurance Products Fund--Equity-Income
Portfolio seeks reasonable income by investing primarily in
income-producing equity securities. In choosing these securities, the
Fund will also consider the potential for capital appreciation.(2)

[bullet] Fidelity Investments' Variable Insurance Products Fund II--Contrafund
Portfolio seeks maximum total return over the long term by investing
its assets mainly in equity securities of companies that are
undervalued or out-of-favor.(2)

[bullet] Janus Aspen Series--Aggressive Growth Portfolio is a non-diversified
portfolio that seeks long-term growth of capital. The Portfolio
pursues its investment objective by normally investing at least 50% of
its equity assets in securities issued by medium sized companies.
Medium-sized companies are those whose market capitalizations fall
within the range of companies in the S&P MidCap 400 Index, which as of
December 30, 1996 included companies with capitalizations between
approximately $192 million and $6.5 billion, but which is expected to
change on a regular basis.(3)

[bullet] Janus Aspen Series--Growth Portfolio seeks long-term growth of capital
consistent with the preservation of capital. The Portfolio pursues its
investment objective by investing in common stocks of a large number
of issuers of any size.(3)

[bullet] Janus Aspen Series--Worldwide Growth Portfolio seeks long-term growth
of capital consistent with the preservation of capital. The Portfolio
pursues its investment objective primarily through investments in
common stocks of foreign and domestic issuers.(3)

[bullet] Janus Aspen Series--Balanced Portfolio seeks long-term capital growth
consistent with preservation of capital and balanced by current
income. The Portfolio pursues its investment objective by, under
normal circumstances, investing 40%-60% of its assets in securities
selected primarily for their growth potential and 40%-60% of its
assets in securities selected primarily for their income potential.(3)

Investment Advisers of the Funds:

(1) Aetna Life Insurance and Annuity Company (investment adviser) and Aeltus
Investment Management, Inc. (subadviser)

(2) Fidelity Management & Research Company

(3) Janus Capital Corporation

Some of the above Funds may use instruments known as derivatives as part of
their investment strategies, as described in their respective prospectuses. The
use of certain derivatives such as inverse floaters and principal only debt
instruments may involve higher risk of volatility to a Fund. The use of
leverage in connection with derivatives can also increase risk of losses. See
the prospectus for each Fund for a discussion of the risks associated with an
investment in that Fund. You should also refer to the attached prospectuses of
the Funds for more complete information about their investment policies and
restrictions.

Mixed and Shared Funding; Conflicts of Interest

Shares of the Funds are available only to insurance company separate accounts
which fund variable annuity contracts and variable life insurance policies,
including the Certificates described in this Prospectus. Fund shares are
offered to separate accounts of the Company and its affiliates and of insurance
companies that are not affiliated with the Company. It is conceivable that, in
the future, it may not be advantageous for variable life insurance separate
accounts and variable annuity separate accounts to invest in a Fund
simultaneously, since the interests of the participants in such accounts may
differ. Although neither the Company nor the Funds currently foresees any such
disadvantages either to variable life insurance or to variable annuity
participants, each Fund's Board of Trustees/Directors has agreed to monitor
events in order to identify any material irreconcilable conflicts which may
possibly arise and to determine what action, if any, should be taken in
response thereto. If such a conflict were to occur, one of the separate
accounts might withdraw its investment in a Fund. This might force that Fund to
sell portfolio securities at disadvantageous prices.

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<PAGE>

Fund Additions, Deletions or Substitutions

The Company may add additional Funds as investment options under your
Certificate at any time. The Company may also stop accepting payments into a
Fund at any time although amounts you have deposited in those Funds could stay
in the Fund. Any dividends or capital gains earned on the Fund could be
reinvested in the Fund. The Company also has the right to replace shares of a
Fund with shares of another Fund if the Company believes that the Fund is no
longer appropriate as an investment option under the Certificate. To do any of
these actions, the Company must comply with the terms of the 1940 Act and with
any insurance laws or regulations that would apply at the time. The Company
would provide notice to you before it would replace a Fund or close a Fund to
new payments and will also provide notice about any new Fund that is added.

Fixed Account

Interests in the Fixed Account have not been registered with the SEC, in
reliance upon an exclusion under the Securities Act of 1933. However,
disclosures in this Prospectus regarding the Fixed Account may be subject to
certain generally applicable provisions of the federal securities laws relating
to the accuracy and completeness of the statements. Disclosure in this
Prospectus relating to the Fixed Account has not been reviewed by the SEC.

The Fixed Account is a fixed funding option available under the Certificates
under which the Company credits interest at rates that it declares from time to
time. These rates are in the Company's sole discretion, except that the Company
guarantees a 4% minimum annual interest rate on amounts in the Fixed Account
(the Fixed Account Value), compounded monthly. Current interest rates may also
vary depending on when an amount was allocated to the Fixed Account.

The Fixed Account is supported by the general assets of the Company. The
general assets of the Company include all assets of the Company other than
those held in legally-segregated separate accounts sponsored by the Company or
its affiliates. The Company will invest the assets attributable to the Fixed
Account in those assets chosen by the Company, as allowed by applicable law for
investment of its general assets. Such assets, and any investment income
therefrom are solely the property of the Company.

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<PAGE>

Certificate Choices

Premium Payments

The Certificates are flexible premium variable universal life insurance in
that, within limits, the Owner has the right to decide when to make premium
payments and in what amounts. Each Certificate specifies Planned Premiums and
Basic Monthly Premiums. However, payment of Planned or Basic Monthly Premiums
will not, except as noted below, guarantee that your Certificate will remain in
force. Conversely, failure to pay such premiums will cause your Certificate to
lapse. Not paying an amount at least equal to your Basic Monthly premiums will
cause the Certificate's 5-year No Lapse Coverage not to be applicable. (See No
Lapse Coverage)

Planned Premiums are those premiums you request and we agree to bill on an
annual, semiannual, quarterly or other periodic basis. Pre-authorized automatic
monthly check payments or salary or pension deduction arrangements through the
Member's employer may also be arranged. You may change your Planned Premium at
any time by submitting a Written Request to us. Premiums paid by payroll
deduction are generally forwarded by your employer to NYSUT Trust, which
forwards them to us. We are not responsible for errors and delays caused by or
other conduct of your employer or NYSUT Trust.

We may require evidence of insurability if payment of any premium would
increase the difference between the Death Benefit and the Total Account Value
(thus increasing our Amount at Risk). If satisfactory evidence of insurability
is requested and not provided, we will refund any refused premium without
interest and without participation of such amount in the Funds. We may also
refuse to accept any premium payment (other than one required to keep a
Certificate in force) if it would cause the Certificate to fail to be treated
as life insurance for federal income tax purposes. Finally, premiums paid in
excess of the Planned Premium or an increase in your Planned Premium may cause
the Certificate to be classified as a "Modified Endowment Contract" for federal
income tax purposes. (See Tax Matters) In that case, we will mail you a
notification and, if you wish to avoid Modified Endowment Contract status, we
will refund the excess premium, without interest and without participation in
the Funds.

Commencement of Coverage

The insurance coverage under a Certificate starts when we have approved the
insurance based on the application and any other information required to be
submitted by the Insured, we or our representative have received at least the
first Basic Monthly Premium and the Insured is eligible for coverage.
Therefore, coverage may not commence until some time after you submit an
application for a Certificate.

If, however, you submit at least the full first Basic Monthly Premium for the
billing frequency with your application, and if certain other requirements are
met, we may offer immediate temporary fixed insurance coverage. For more
information about the availability, terms and conditions of this coverage, you
should consult your Aetna representative, who can also provide you with a copy
of our conditional receipt.

The Issue Date of a Certificate is generally the date that we approve a
Certificate. Under limited circumstances, however, we may backdate a
Certificate, upon request, by assigning an Issue Date that is up to six months
earlier than otherwise would apply. Backdating may be desirable, for example,
so that you can purchase coverage at lower Cost of Insurance rates based on a
younger insurance Age. For a backdated Certificate, you must pay the cost of
insurance and other charges from the Issue Date to the Issue Date that would
have applied without backdating, notwithstanding that insurance coverage was
not in effect and no interest or investment return is credited for that period.

Your initial premium payment is credited to and begins to earn a return in the
Separate Account or the Fixed Account on the Issue Date of the Certificate or
the date that at least the first Basic Monthly Premium is received at our Home
Office, whichever is later. After the first premium payment, all premiums must
be sent to our Home Office. These and all other premiums will be deemed
received when actually received at the Home Office together with any
identifying infor-

8
<PAGE>

mation we require from the Member's employer or NYSUT Trust. Your premium
payments will be allocated as you have directed, effective at the end of the
Valuation Period in which each payment is received in the Home Office.

You may reallocate your future premium payments at any time. Allocations must
be changed in whole percentages. The change will be effective with the next
premium payment after we receive your request. We will send you confirmation of
the change. (See Transfers)

5-Year No Lapse Coverage Provision

A Certificate will not enter a Grace Period--and therefore will not
terminate--within the 5-year period after its Issue Date or the Issue Date of
any Specified Amount increase that you have requested, if required premiums are
paid as follows: the Certificate will not enter a Grace Period on any Monthly
Deduction Day within such a 5-year period, if the sum of premiums paid within
that period equals or exceeds (a) the sum of the Basic Monthly Premiums for
each Certificate Month from the start of the period, including the current
month; plus (b) any Partial Surrenders since the start of the period; plus (c)
any increase in the Loan Account Value since the start of the period.

If these requirements are not met on any Monthly Deduction Day within the
5-year period, and the Surrender Value is less than the Monthly Deduction for
that day, the Certificate will enter the Grace Period. Additional premium
payments must then be paid to prevent the termination of the Certificate. (See
Grace Period)

We will accumulate any amounts of Monthly Deduction that, as a result of the No
Lapse Coverage, we have not collected, and we will collect such amounts from
any Surrender Value resulting from subsequent Net Premiums that you pay. Also,
once the No Lapse Coverage is no longer in effect as to your Certificate, your
Certificate may lapse unless you pay sufficient premiums to permit us to
collect the full amount of previously uncollected Monthly Deductions, if any.
(See Grace Period)

Death Benefit Options

At the time of enrollment, you must choose between the two available Death
Benefit Options.

Under Option 1, the Death Benefit will be the greater of: (a) the Specified
Amount or (b) the applicable percentage of the Total Account Value. The
percentage is 250% through age 40 and decreases yearly to 100% at age 95.
Option 1 generally provides a level Death Benefit.

Under Option 2, the Death Benefit will be the greater of: (a) the Specified
Amount plus the Total Account Value or (b) the applicable percentage (described
above) of the total Account Value. Option 2 provides a varying Death Benefit
which increases or decreases over time, depending upon the amount of premiums
paid and the investment performance of the Fund(s) you choose.

The Death Benefit payable under either Option will be calculated as of the date
of death and will be reduced by (a) the amount necessary to repay the Loan
Account Value in full with all accrued interest, (b) if the Certificate is
within the Grace Period, the amount required to keep the Certificate in force
through the date of death, and (c) the amount of any other Monthly Deductions
that we were unable to collect. (See 5-year No Lapse Coverage Provision)

Transfers

At any time prior to the Maturity Date, you may transfer all or part of your
Separate Account Value in any Variable Option to any other Variable Option or
to the Fixed Account. We reserve the right to charge an administrative fee of
$25 for each transfer over 12 per year and to limit the total number of
Variable Options you may elect to 15 over the lifetime of the Certificate.

Within the 45 days following the Certificate Anniversary, you may request a
transfer of a portion of the Fixed Account Value to one or more of the Variable
Options. This type of transfer is allowed only once within this 45 day period,
and we must receive your request at the Home Office within the 45 day period.
The transfer will be effective at the end of the Valuation Period in which your
request is received by the Home Office. The amount of any such transfer cannot
exceed the greater of 25% of the Fixed Account Value or $500.

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<PAGE>

Telephone Transfers

You may request a transfer of account values either by Written Request (as set
forth above) or by telephone. All transfers must be in accordance with the
terms of the Certificate.

Transfer instructions are currently accepted on each Valuation Date. Once
instructions have been accepted, they may not be rescinded; however, new
telephone instructions may be given on the following day. If the transfer
instructions are not in good order, the Company will not execute the transfer
and you will be notified.

We will use reasonable procedures, such as requiring identifying information
from callers, recording telephone instructions, and providing written
confirmation of transactions, in order to confirm that telephone instructions
are genuine. Any telephone instructions which we reasonably believe to be
genuine will be your responsibility, including losses arising from any errors
in the communication of instructions. As a result of this procedure, the Owner
will bear the risk of loss. If the Company does not use reasonable procedures,
as described above, it may be liable for losses that result from any
unauthorized instructions.

Automated Transfers (Dollar Cost Averaging)

Dollar Cost Averaging describes a system of investing a uniform sum of money at
regular intervals over a period of one, two or three years, as you select.
Dollar Cost Averaging is based on the principle that acquiring Accumulation
Units with a constant sum of money at fixed intervals results in acquiring more
of the units when prices are low and fewer units when prices are high.

You may establish automated transfers of amounts on a monthly or quarterly
basis from the Aetna Variable Encore Fund Variable Option to any other Variable
Option through a Written Request or other method acceptable to the Company.
Dollar Cost Averaging is not permitted to or from the Fixed Account. You must
have a minimum of $5,000 allocated to the Aetna Variable Encore Variable Option
in order to enroll in the Dollar Cost Averaging program. The minimum automated
transfer amount is $50 per month. There is no additional charge for this
Program. You may start or stop participation in the Dollar Cost Averaging
program at any time, but you must give the Company at least 30 days' notice to
change any automated transfer instructions that are currently in place.
Automated transfers do not reduce the number of charge-free transfers that you
could otherwise make. The Company reserves the right to suspend or modify
automated transfer privileges at any time.

Termination or Change in Coverage

Even if the 5-year No Lapse Coverage is still in effect under your Certificate,
and even if you have paid enough premiums to prevent your Certificate from
lapsing, your Certificate, and all coverage thereunder, may be terminated
without your consent. This may happen, for example, if NYSUT notifies the
Company that it wishes to terminate the group Policy. NYSUT Trust has agreed to
provide each of the Insured with advance notice of policy cancellation or
discontinuance. Such notice must be mailed or delivered to such Insured at the
last known address of record at least 15 days before the date plan cancellation
or discontinuance is to take effect. Prior to the termination date, you could
exercise your rights to make a Full Surrender or to convert your Certificate to
paid-up fixed life insurance. (See Paid-Up Nonforfeiture Option)

The group Policy, and your Certificate, may also terminate if NYSUT Trust
ceases to cause payroll deduction premiums to be remitted to us. This would
occur (following an opportunity to cure the problem in accordance with the
terms of

10
<PAGE>

the group Policy) regardless of whether premiums for your Certificate were
being paid by payroll deduction, or the amount of premium paid, or the
available Surrender Value under your Certificate.

A Certificate also will terminate immediately if and when the Insured ceases to
be within at least one of the categories of persons that are eligible for
coverage under a Certificate. Those eligibility requirements are set forth
above under Definitions--Insured. If an Insured who is eligible only as the
spouse of a Member who is Insured ceases to be eligible, the Insured may become
a Member within 31 days after eligibility ceases and may continue the
Certificate uninterrupted.

If you do not make such an election within the 31-day period, or the
Certificate terminates because we or NYSUT Trust terminates the group Policy as
described above, you would then have the option of electing to convert your
coverage to an individual policy as described in the immediately following
paragraph. Either of these elections must be received at the Home Office (and,
as the case may be, the insured has become a Member or we have received the
required first premium under the conversion policy at our Home Office) within
the 31-day period. Otherwise, we will pay you the Certificate's Surrender
Value, calculated at the end of the last Valuation Period during which it was
in force.

The conversion privilege is available only within the 31-day period following
termination of the group Policy by NYSUT Trust or us or termination of a
Certificate upon the Insured's ineligibility for continued coverage thereunder.
The amount of insurance which ceases may be converted to any substantially
comparable flexible premium general account life insurance policy except term
insurance that the Company makes available for such purpose and according to
the Certificate terms. We cannot provide assurance, however, that the terms of
the conversion policy will not involve additional charges or otherwise be as
attractive to you than the Certificates. We reserve the right to permit only
the initial premium for the conversion policy to be paid at the time of
conversion and to distribute to you the rest of the Surrender Value as of the
Certificate's termination date. The Company will send notice to the Owner of
the right to convert. No evidence of insurability will be required.

Income taxes may be payable with respect to such partial distribution or any
other distribution of Surrender Value following termination of a Certificate.
(See Tax Matters)

If a timely conversion request has been received, and the Insured dies during
the time allowed for conversion, the amount that could have been converted will
be payable as a death benefit to the Beneficiary designated by the Insured. In
the event there is no designated beneficiary, we may pay from the Death Benefit
payable a sum not exceeding $500 to any person appearing to us to be equitably
entitled to same by reason of having incurred funeral expenses incident to the
death of the Insured. If a conversion request has not been received, however,
we will pay that benefit only if the insured dies within the 31-day conversion
period.

Also NYSUT Trust, by agreement with us, may make changes in your Certificate
(and your coverage) without your consent; however, if such changes result in a
reduction in benefit or an increase in guaranteed charges, your consent is
required.

We reserve the right at any time to cease issuing new Certificates to any class
or classes of Members or their relations.

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<PAGE>

Certificate Values

Total Account Value

Amounts allocated under a Certificate to a Variable Option of the Separate
Account are credited in the form of Accumulation Units of that Variable Option,
based on such units' then Accumulation Unit Value. The number of Accumulation
Units credited is determined by dividing the amount being allocated by the
appropriate Accumulation Unit Value. Since each Variable Option has a unique
Accumulation Unit Value, if you have elected a combination of Variable Options
you will have Accumulation Units credited to your Separate Account Value for
each Variable Option.

The Total Account Value of your Certificate is determined by: (a) multiplying
the total number of Accumulation Units credited to the Certificate for each
applicable Variable Option by its appropriate current Accumulation Unit Value;
(b) if you have elected a combination of Variable Options, totaling the
resulting values; and (c) adding any Fixed Account Value and any Loan Account
Value.

The number of Accumulation Units credited to a Certificate will not be changed
by any subsequent change in the value of an Accumulation Unit or the investment
performance of the related Fund. The number is increased by any subsequent
allocation of Net Premiums or other account value to the Variable Option.
Similarly, whenever any account value is removed from the Variable Option (such
as upon transfer, Full or Partial Surrender, Certificate Loan or Monthly
Deduction allocated to that option), a number of Accumulation Units in that
Variable Option will be cancelled whose aggregate then-current Accumulation
Unit Values equal the amount being removed from the Variable Option.

The Fixed Account Value includes all amounts allocated to the Fixed Account
under a Certificate and any interest credited thereon. The Fixed Account Value
is reduced by amounts removed from the Fixed Account, such as upon a transfer,
Full or Partial Surrender, Certificate Loan or Monthly Deduction allocated to
the Fixed Account.

You will be advised at least annually as to the number of Accumulation Units
which remain credited to your Certificate, the current Accumulation Unit
Values, the Separate Account Value, the Fixed Account Value, and the Total
Account Value. (See Reports to Owners)

Accumulation Unit Value

The value of an Accumulation Unit for any Valuation Period is determined by
multiplying (a) the value of an Accumulation Unit for the immediately preceding
Valuation Period by (b) the sum of 1 plus the net investment rate for the
current period for the appropriate Variable Option.

The net investment rate equals (a) the value of the net assets of the Variable
Option held in the Separate Account at the end of a Valuation Period, before
any adjustment for amounts allocated to or removed from the Variable Option
during the period; minus (b) the value of the net assets of the Variable Option
held in the Separate Account at the beginning of that Valuation Period,
adjusted by any taxes or provisions for taxes attributable to the operation of
the Separate Account; divided by (c) the value of the Variable Option's
Accumulation Units held in the Separate Account at the beginning of the
Valuation Period; minus (d) the rate of any applicable daily charge for
mortality and expense risks.

Maturity Value

The Maturity Value of a Certificate is the Surrender Value on the Maturity
Date. All or part of the Surrender Value may be applied to one or more of the
Settlement Options. (See Certificate Settlement)

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<PAGE>

Certificate Rights

Full Surrenders

By Written Request, you may surrender a Certificate for its Surrender Value at
any time before the Maturity Date while the Insured is alive. All insurance
coverage under the Certificate will end on the date of the Full Surrender. The
Surrender Value will equal the Total Account Value on the date of surrender,
less the Loan Account Value and less any unpaid accrued interest. We may
require return of the Certificate for a Full Surrender.

The Surrender Value is computed as of the end of the Valuation Period in which
we receive your Written Request.

Partial Surrenders

By Written Request, you may, at any time after the first Certificate Year,
partially surrender your Certificate.

The minimum amount of any Partial Surrender is $500. We may also charge an
administrative fee of $25 or, if less, 2% of the amount surrendered. Any
Partial Surrender and any related administration charge will be deducted on a
Pro-Rata Basis from each investment option in use under the Certificate.

If the Death Benefit Option for a Certificate is Option 1, a Partial Surrender
will reduce the Total Account Value, Death Benefit, and Specified Amount. The
Specified Amount and Total Account Value each will be reduced by the amount of
the surrender. However, we will not allow a Partial Surrender if the Specified
Amount will be reduced below the minimum Specified Amount set forth in the
Certificate Specifications. Nevertheless, if the Death Benefit for the
Certificate immediately prior to the surrender is determined based on the
applicable percentage of the Total Account Value, the Partial Surrender may not
reduce the Specified Amount. A reduction in the Specified Amount will cause a
reduction in the required Basic Monthly Premiums for the 5-year No Lapse
Coverage and may cause an increase in your current Cost of Insurance rate if a
Specified Amount is reduced from $250,000 or more to an amount less than
$250,000 (see Monthly Deduction). The future premium required to maintain the
5-year No Lapse Coverage will be based on the new Specified Amount and will be
set forth in a supplemental Certificate Specifications page that will be
delivered to you.

If the Death Benefit Option for a Certificate is Option 2, a Partial Surrender
will reduce both the Total Account Value and the Death Benefit by the amount of
the surrender, but the Specified Amount will not be reduced.

Paid-Up Nonforfeiture Option

By Written Request, you may elect, at any time before the Maturity Date, to
continue your Certificate as fixed (non-variable) paid-up life insurance.

The Surrender Value will be applied as a Net Single Premium to determine the
Specified Amount of the paid-up insurance. The cost of the paid-up insurance
will be based on the guaranteed maximum Cost of Insurance rates in the
Certificate and an interest rate of 4% compounded annually. However, the
Specified Amount of the paid-up insurance cannot exceed the Death Benefit under
the Certificate as of the effective date of the paid-up insurance. Any excess
Surrender Value will be distributed to you and will be treated as a partial
distribution for federal income tax purposes. (See Tax Matters) The effective
date of the paid-up coverage will be the first Monthly Deduction Day that
occurs on or after our receipt of your Written Request.

Full Surrenders and Certificate Loans, as described in this Prospectus, will be
allowed if the Certificate is continued in force as paid-up insurance. However,
all supplemental rider benefits will terminate and will be unavailable with the
paid-up coverage. The surrender value will be the Net Single Premium for the
paid up insurance on the date of surrender, less any outstanding loan balance.
Partial Surrenders will not be available.

Proceeds payable under this option upon death of the Insured or maturity will
equal the Specified Amount less any

13
<PAGE>

Certificate Loans and accrued unpaid interest under the paid up insurance. See
"Tax Matters" for a discussion of possible tax consequences resulting from your
electing the paid-up nonforfeiture option.

Grace Period

If You have paid sufficient premiums to meet the conditions of the No Lapse
Coverage period, but outstanding loans have caused the Surrender Value to be
insufficient to allow a Monthly Deduction on the Monthly Deduction Day, We will
allow You 61 days of grace for payment of an amount sufficient to allow the
Monthly Deduction. We may require payment of the amount equal to the lesser of
(1) or (2) where:

(1) is the amount necessary to meet the loan-related conditions of the No Lapse
Coverage provision; or

(2) is an amount sufficient to cover the Monthly Deduction(s) that would result
in the Surrender Value being greater than zero.

If You have not paid sufficient premiums to meet the conditions of the No Lapse
Coverage period and the Surrender Value is insufficient to allow a Monthly
Deduction on a Monthly Deduction Day, We will allow You 61 days of grace for
payment of an amount sufficient to allow the monthly Deduction. We may require
payment of the amount necessary to keep the coverage under this Certificate in
force for the current month plus two additional months.

If payment is not made within 61 days after the Monthly Deduction Day, the
Certificate will terminate without value at the end of the Grace Period. The
termination will be effective on the Monthly Deduction Day for the first unpaid
Monthly Deduction.

Written notice will be mailed to Your last known address, according to Our
records, not less than 31 days before termination of this Certificate. This
notice will also be mailed to the last known address of any assignee of record.

During the days of grace, this Certificate will stay in force. If the Insured's
Death occurs during the days of grace, We will deduct an amount required to
keep this Certificate in force from that Death Benefit.

Reinstatement of a Lapsed Certificate

If the Certificate terminates following its Grace Period, it may be reinstated.
If this Certificate is reinstated, the Certificate Year upon reinstatement will
be calculated as if there had never been a lapse in coverage. However, you must
apply for reinstatement within 5 years after the date of termination and before
the Maturity Date. Also, we must receive evidence of the Insured's current
insurability that is satisfactory to us, as well as a premium payment that at
least equals the amount that we specify. We must receive a payment at least
equal to the sum of (1) and (2) where: (1) is any portion of the Loan Account
Value plus accrued interest on the date of lapse exceeding the Total Account
Value on the date of lapse; and (2) a premium payment sufficient to keep the
Certificate in force for the current month plus two additional months. If this
Certificate is reinstated within a No Lapse Coverage period, all values
including the Loan Account Value would be reinstated as they were the date of
lapse.

If this Certificate is reinstated after a No Lapse Coverage period has expired,
the coverage would be reinstated on the Monthly Deduction Day following Our
approval. The payment received would first be applied to pay any positive
excess of the Loan Account Value plus accrued interest on the date of lapse
over the Total Account Value on the date of lapse with any remainder treated as
a premium. The Total Account Value at reinstatement would be the Net Premium
paid less the Monthly Deduction for that day. Any Loan Account Value would not
be reinstated.

Monthly Deductions and investment performance will recommence on the Monthly
Deduction Day on or first following our approval of the reinstatement.
Nevertheless, we will pay the reinstated Death Benefit if the Insured dies
prior to that date but after we have received a reinstatement request and all
payments and information required for us to grant the request.

Supplemental benefit riders will be reinstated only with our consent. Any
Certificate Loan will be reinstated and any prior uncollected Monthly
Deductions will remain due only if the Certificate lapsed within a 5-year No
Lapse Coverage period

14
<PAGE>

that has not yet expired by the time of reinstatement. (See 5-year No Lapse
Coverage Provisions) Any portion of the No Lapse Coverage period that still
remains by the time of reinstatement will also be restored. In that case, you
may put the No Lapse Coverage into effect for any time during such remaining
period as of which you have paid at least the cumulative amount of all Basic
Monthly Premiums required to date for this purpose (including any amount of
unpaid Basic Monthly Premiums due for periods prior to the reinstatement).

A reinstatement may result in restarting the test used for determining whether
the Certificate is a Modified Endowment Contract. (See Tax Matters)

Certificate Loans

We will grant loans at any time after the expiration of the Right of
Certificate Examination and before the Maturity Date. The amount of the loan
will not be more than the Loan Value. Unless otherwise required by state law,
the Loan Value is 90% of the Total Account Value. The amount of the loan will
be transferred out of the Fixed Account and any Variable Options on a Pro-Rata
Basis and be held instead as part of the Loan Account Value. Loans and loan
repayments will be effected as of the end of the Valuation Period in which we
receive the Written Request for the loan or the repayment, respectively.

The loan may be repaid in full or in part at any time prior to the Maturity
Date, as long as the Certificate is in force and the Insured is alive. The
amount necessary to repay all loans in full is the Loan Account Value plus any
accrued interest. Loan repayments will be allocated to the Fixed Account Value
and the Separate Account Value in the same proportion in which the loan was
taken. Unless you specifically instruct us otherwise, Additional Premiums
received will be considered loan repayments. The full Surrender Value under
this Certificate will equal the Total Account Value on the date of surrender
less the Loan Account Value plus any accrued interest. If a loan is not repaid
prior to the Maturity Date, the amount payable at the Maturity Date will equal
the Total Account Value on the Maturity Date, less the Loan Account Value on
the Maturity Date plus any accrued interest.

The amount of interest earned on the Loan Account Value and the amount of
interest charged to you on a loan depends on whether the loan is considered a
preferred loan, as defined in the Certificate at the time. Beginning in the
11th Certificate Year, the interest rate charged on preferred loans and the
interest rate credited to the related Loan Account Value is 4%. For all other
loans, the current loan interest rate charged is 8% and the related Loan
Account Value will earn interest at a guaranteed minimum rate of 6%; however,
we may credit interest in excess of this rate, in our sole discretion.

Accordingly, even if the loan is repaid, the amount of the Death Benefit and
the Certificate's Surrender Value may be permanently affected, since the Loan
Account Value is credited with interest rather than with the investment
experience of the Funds.

Interest is due and payable on each Certificate Anniversary, the date the
Certificate ends or upon full repayment of the Loan Account Value. Any interest
not paid when due will be added to the Loan Account Value on the Certificate
Anniversary and will itself bear interest on the same terms.

Federal income tax consequences of Certificate Loans are discussed under Tax
Matters.

Certificate Changes

You may make certain changes to your Certificate, as described below, by
submitting a Written Request to our Home Office. Supplemental Certificate
Specifications will be sent to you once the change is completed. Any change
that decreases a $250,000 or larger Specified Amount to less than $250,000 (or
vice-versa) can cause an increase (or decrease) in your current Cost of
Insurance Rate. (See Monthly Deduction)

15
<PAGE>

Increase in Specified Amount

Increases will be allowed at any time while a Certificate is in force if
satisfactory evidence of insurability for the Insured is provided. The
Surrender Value immediately after an increase must be at least three times the
sum of (a) the most recent Monthly Deduction from the Total Account Value and
(b) the Specified Amount of the increase multiplied by the applicable Cost of
Insurance rate divided by 1000. Specified Amount increases must be requested in
multiples of $1,000. Any maximum limit on the Specified Amount will be set
forth in the Certificate Specifications.

The Issue Date for any increase will be shown in the supplemental Certificate
Specifications. The 5-year period of the No Lapse Coverage provision applicable
to the increase will restart on the Issue Date of the increase. The Basic
Monthly Premium after the increase will be based on the Insured's Attained Age
and new Specified Amount.

For possible tax consequences of an increase in Specified Amount, see Tax
Matters.

Decrease in Specified Amount

You may decrease the Specified Amount of a Certificate after the first
Certificate Year. However, we will not allow a decrease in the Specified Amount
if the Specified Amount would be reduced below the minimum Specified Amount set
forth in the Certificate Specifications or if it would cause the Certificate to
be treated as other than life insurance for income tax purposes.

The Issue Date of the decrease will be the Monthly Deduction Day on or next
following the date on which your Written Request is received. The decrease will
reduce any past increases in the reverse order in which they occurred. (This
same order will also be followed for decreases in Specified Amount resulting
from changes in Death Benefit Option or a Partial Surrender.) If the 5-year No
Lapse Coverage provision is still applicable, the Basic Monthly Premium for
that purpose will be adjusted to be based on the reduced Specified Amount.

A Specified Amount decrease can cause a Certificate to be taxed as a Modified
Endowment. For a discussion of tax considerations in connection with Specified
Amount decreases, see Tax Matters.

Change in Death Benefit Option

Changes from Option 1 to Option 2 will be allowed at any time while the
Certificate is in force. The Specified Amount will be reduced to equal the
Specified Amount less the Total Account Value at the time of the change.
Changes from Option 2 to Option 1 also will be allowed at any time while the
Certificate is in force. The Specified Amount will be increased to equal the
Specified Amount plus the Total Account Value as of the date of the change. If
the Death Benefit at the time of the change is determined based on the
applicable percentage of the Total Account Value, the new Specified Amount may
be calculated differently from the foregoing description.

We will not allow a change in the Death Benefit Option if the Specified Amount
will be reduced below the minimum Specified Amount set forth in the Certificate
Specifications or if it would cause the Certificate to be treated as other than
life insurance for income tax purposes. Also, evidence of insurability may be
required. The change will take effect on the Monthly Deduction Day on or next
following the date on which your Written Request is received and, in cases
where evidence of insurability is required, we approve the increase.

Following any change in Death Benefit Option, the Basic Monthly Premium will be
adjusted so that it will be based on the new Specified Amount. A change in
Death Benefit Option may restart the test for determining whether a Certificate
is a Modified Endowment Contract for federal income tax purposes. (See Tax
Matters)

Right of Certificate Examination

The Certificate has a free look period during which you may examine your
Certificate. If for any reason you are dissatisfied, it may be returned to us
or to our representative within 10 days of receipt. Upon its return this
Certificate will be deemed void from its beginning. The amount refunded will be
(a) all payment made or (b) where permitted by state law, the

16
<PAGE>

premiums paid, adjusted for any positive or negative investment performance in
the Variable Options you selected (but not deducting any charges made under the
Certificate).

Supplemental Benefits

The supplemental benefits currently available as riders to a Certificate are
listed below. The riders contain other terms and conditions, about which you
can obtain information from your Aetna representative.

[bullet] Disability Benefit Rider provides--for a credit of the benefit amount
described in the rider in the event of the total disability of the
covered Insured. The Specified Amount generally may not be increased
during the time while benefits are being provided under this rider.

[bullet] Accelerated Death Benefit Rider--provides for the advance payment to
the Owner of a portion of the Specified Amount if the Insured provides
requisite evidence of less than one year's life expectancy. There is
no charge for this rider.

[bullet] Accidental Death Benefit Rider--provides for the payment of up to
$200,000 to provide a double Death Benefit if the Insured dies as a
result of an accident as defined in the rider.

[bullet] Child Insurance Rider--provides for non-participating term life
insurance on the child(ren) of the Insured.

Other riders for supplemental benefits may become available under the
Certificate from time to time. The charges for such riders will be set forth in
your Certificate Specifications. Supplemental benefit riders may be added or
cancelled by the Owner at any time, pursuant to our procedures then in effect.
Any change you make in supplemental benefits may cause us to revise the Basic
Monthly Premium, in which case the new amount will be set forth in a
supplemental Certificate Specifications page that we will provide to you. Any
change in supplemental benefit rider coverage may also have tax consequences.
(See Tax Matters)

Certificate Settlement

Proceeds are generally payable by the Company in a lump sum upon the death of
the Insured or upon Full Surrender or upon maturity. You may elect one or more
of the Settlement Options discussed below. We may agree to other Settlement
Options at our discretion.

You may make a Written Request to elect, change or revoke a Settlement Option
before payments begin under any Settlement Option. This request will take
effect upon its receipt at our Home Office. If no Settlement Option has been
elected by you when proceeds become payable, the payee may make the election.
If the Certificate has been assigned, we will pay any amount due the assignee
in a lump sum. Any excess Death Benefit due will be paid as elected. The payee
is entitled to exercise any rights and privileges that are permitted under a
Settlement Option.

No fixed or variable Settlement Option may be elected that would result in a
first payment of less than $50 or that would result in total yearly payments of
less than $250. If the proceeds payable are insufficient to elect an option for
these minimum amounts, a lump-sum payment must be elected. We may refuse to
permit a Settlement Option if the payee is not a natural person. Also, the
Annuitant's age (plus the number of years for which any payments under the
annuity option chosen) may not exceed 95 years.

The several Settlement Options may differ in their tax consequences.

Settlement Options

The Settlement Options listed below are available under the Certificates.
Options 1, 2 and 3 are available on either a fixed payment or a variable
payment basis. The amount of the first payment under Options 1, 2 and 3
(whether on a

17
<PAGE>

fixed or variable basis) is determined, based on the option chosen, using the
annuity rates specified in the Certificate. This rate is the same regardless of
whether an Annuitant is male or female.

For a fixed Settlement Option, the amount of the first and each subsequent
payment is the same. That amount will be based on an interest rate of at least
3%.

If our then current settlement option rate would provide higher payments on a
comparable fixed premium annuity at the time payments commence, we also will
use the higher rate for fixed Settlement Options under a Certificate.

For a variable Settlement Option, the first payment is determined using an
assumed interest rate of 3.5% or 5% whichever has been specified by the Owner
or payee, as the case may be. Subsequent payments will vary based on Fund
performance as discussed below under Calculation of Variable Payment Settlement
Option Values. The initial payment will be higher if 5% is elected as the
assumed interest rate; but subsequent payments will increase less with
favorable Fund performance (and decrease more with unfavorable Fund
performance) than if 3.5% is elected.

Except to the extent noted below for Option 1, no withdrawals from or changes
of a Settlement Option may be made under Options 1, 2 and 3 once payments
begin.

Option 1 -- Payments for a stated number of years, but no more than thirty. The
period must be for at least five years, but if variable payments are selected,
you may withdraw all or a portion of the remaining payments at any time.

Option 2 -- Payments for the lifetime of the Annuitant. If also chosen, we will
guarantee payments for a number of years from 5 to 30 or a "cash refund" upon
the Annuitant's death. The cash refund election is available only if all
amounts allocated to this Option 2 are on a fixed basis and are subject to that
election. The amount of the cash refund is the difference between the amount
applied to this annuity option at the time of settlement and the total amount
of payments received under the option prior to the Annuitant's death.

Option 3 -- Life Income Based Upon the Lives of Two Annuitants -- payments
during the joint lifetimes of two Annuitants. Payments will continue until both
Annuitants have died. When this option is chosen, a choice must be made of (a)
100%, 662/3% or 50% of the payment to continue after the first death; (b)
payments for a minimum of 5 to 30 years, with 100% of the payment to continue
after the first death; (c) 100% of the payment to continue to the surviving
Annuitant if the survivor is the original payee, and 50% of the payment to
continue to the survivor if the surviving Annuitant is the second payee; or (d)
100% of the payment to continue after the first death, with a "cash refund"
feature comparable to that described for Option 2 above.

Option 4 -- Payment of interest on the sum left with us at 3% or such higher
rate as we may, in our sole discretion, declare. After commencement of this
option, the payee may make a Written Request to receive all or a portion of the
amount held under this option as a lump sum or have it applied to one or more
of the other available Settlement Options.

Upon the death of the Annuitant(s) (or the payee under Option 4), the current
value of the funds held under Option 4, and the present value of any remaining
guaranteed payments under the other Options will be paid. Any remaining
guaranteed payments will continue to be received by the beneficiary unless the
beneficiary elects to receive the present value of any remaining guaranteed
payments in a lump sum. If the beneficiary subsequently dies, the present value
of any remaining guaranteed payments will be paid in one sum to the
beneficiarys' estate.

Although the foregoing discussion of Settlement Options is in terms of monthly
payments, an election also may be made to receive quarterly, semi-annual or
annual payments instead.

Calculation of Variable Payment Settlement Option Values

Variable Settlement Options will be supported by the then available Funds of
the Company's Variable Annuity Account B (Account B), a separate account very
similar to the Separate Account, except that Account B supports variable
annuity benefits, rather than variable life insurance benefits. We reserve the
right to impose a maximum of four on the number of Funds that can be used at
any one time for a Settlement Option. We will provide an Account B prospectus
in connection

18
<PAGE>

with selection of a Settlement Option. That prospectus will describe the
available Funds, the costs and expenses of such Funds and the charges imposed
on Account B. Such Funds may be, and the charges imposed on Account B are
expected to be, different from those that relate to the Separate Account prior
to commencement of a Settlement Option. Accordingly, you should review the
Account B prospectus, as well as the prospectuses for Account B's underlying
Funds, prior to selecting any variable payment Settlement Option.

The amount of each variable annuity payment after the first is determined
pursuant to a formula described in the Certificates that is generally used by
actuaries for making such calculations. Speaking generally, if the total return
of the Fund for any month, less a deduction currently equivalent to an annual
rate of 1.25% for mortality and expense risks which we expect to result in a
profit to us, exceeds the Settlement Option's assumed interest rate (3.5% or
5%, as discussed above), the next variable payment will be larger than the
previous one. On the other hand, if the Fund's total return for any month, as
so adjusted, is less than the assumed interest rate, the next variable payment
will be smaller than the previous one. The amount of any such increases or
decreases in variable annuity payments does not bear a direct relationship to
the Fund's total returns.

You may make transfers among Funds under our administrative procedures in
effect at the time. Currently, we limit the number of transfers to four per
Calendar Year, but we can change this limit in the future.

The Company and Management

Aetna Life Insurance and Annuity Company is a stock life insurance company
organized under the insurance laws of the State of Connecticut in 1976. Through
a merger, it succeeded to the business of Aetna Variable Annuity Life Insurance
Company (formerly Participating Annuity Life Insurance Company organized in
1954). The Company is engaged in the business of issuing life insurance
policies and annuity contracts in all states of the United States. The Company
is an indirect wholly-owned subsidiary of Aetna, Inc., a publicly traded
healthcare and financial services company, whose principal offices are at the
same location as the Company's Home Office.

The Company serves as the principal underwriter for the securities offered
hereunder and also acts as the principal underwriter for Variable Annuity
Accounts B, C and G (separate accounts of the Company registered as unit
investment trusts), and Variable Annuity Account I (a separate account of Aetna
Insurance Company of America registered as a unit investment trust).
Additionally, the Company is the investment adviser for the following
registered management investment companies: Aetna Variable Fund, Aetna Income
Shares, Aetna Variable Encore Fund, Aetna Investment Advisers Fund, Inc.,
Series B and C of Aetna GET Fund, Aetna Series Fund, Inc., Aetna Generation
Portfolios, Inc., and Aetna Variable Portfolios, Inc. The Company is also the
depositor of Variable Annuity Accounts B, C and G.

The following are the Directors and Executive Officers of Aetna Life Insurance
and Annuity Company. Unless otherwise indicated, the principal business address
for all individuals is the Company's Home Office.

<TABLE>
<CAPTION>
Name Position with Company Business Experience During Past 5 Years
- ------------------- ----------------------------------- --------------------------------------------------
<S> <C> <C>
Daniel P. Kearney Director, President and Chairman, President (since December 1993), Aetna Life
Executive Committee (Principal Insurance and Annuity Company; Executive Vice
Executive Officer) President (since December 1993), and Group
Executive, Financial Division (February 1991-
December 1993), Aetna Life and Casualty Company.

19
<PAGE>

Name Position with Company Business Experience During Past 5 Years
- ---------------------- ------------------------------------- -------------------------------------------------------

Christopher J. Burns Director and Senior Vice President President, Chief Operations Officer (since
November 1996), Aetna Investment Services, Inc.;
Senior Vice President, Sales & Service (since
February 1996) and Senior Vice President, Life
(March 1991-February 1996), Aetna Life Insurance
and Annuity Company.

J. Scott Fox Director and Senior Vice President Senior Vice President, Operations (since March
1997), Aetna Life Insurance and Annuity Company;
Managing Director, Chief Operating Officer, Chief
Financial Officer, Treasurer (April 1994-March 1997),
Aeltus Investment Management, Inc.; Managing
Director and Treasurer (March 1987-September
1993), Equitable Capital Management Corporation.

Timothy A. Holt Director, Senior Vice President and Senior Vice President, Strategy & Finance, and
Chief Financial Officer Chief Financial Officer (since February 1996), Aetna
Life Insurance and Annuity Company; Vice
President, Portfolio Management/Investment Group
(August 1992-February 1996); Aetna Life and
Casualty Company.

John Y. Kim Director and Senior Vice President President (since December 1995), Aeltus
Investment Management, Inc.; Chief Investment
Officer (since May 1994), Aetna Life and Casualty
Company; Managing Director (September 1993-
April 1994), Mitchell Hutchins Institutional
Investors (New York, New York); Vice President
and Senior Portfolio Manager (October 1991-
August 1993), Aetna Services, Inc. (formerly Aetna
Life and Casualty Company).

Glen Salow Director and Vice President Vice President, Information Technology (since
February 1996), Vice President, Information
Technology, Investments and Financial Services
(February 1995-February 1996); Vice President,
Investment Systems (1992-1995), AIT--Aetna Life
Insurance Company and Annuity Company; Senior
Vice President (December 1986-August 1992),
Lehman Brothers.

Kirk P. Wickman Vice President, General Counsel Vice President, General Counsel and Secretary
and Secretary (since November 1996), Aetna Life Insurance and
Annuity Company; Vice President and Counsel
(June 1992-November 1996), Aetna Life Insurance
Company.

Deborah Koltenuk Vice President, Treasurer, and Vice President, Investment Planning and Financial
Corporate Controller Reporting (April 1996 to July 1996)--Aetna Life
Insurance Company; Vice President, Investment
Planning and Financial Reporting (October 1994 to
April 1996) Aetna Life Insurance Company, The
Aetna Casualty and Surety Company and The
Standard Fire and Insurance Company.

20
<PAGE>

Name Position with Company Business Experience During Past 5 Years
- ---------------------- -------------------------- --------------------------------------------

Frederick D. Kelsven Vice President and Chief Director of Compliance (January 1985 to
Compliance Officer September 1996)--Nationwide Life Insurance
Company.
</TABLE>

Additional Information

Reports to Owners

The Company will maintain all records relating to the Separate Account and the
Certificates. At least once in each Certificate Year, the Company will send you
a report containing Certificate Values (see Total Amount Value) as of the most
recent Certificate Anniversary. If any portion of your Total Account Value is
allocated to the Separate Account, you will receive such additional periodic
reports as may be required by the SEC. (See Right to Instruct Voting of Fund
Shares)

Right to Instruct Voting of Fund Shares

In accordance with our view of present applicable law, we will generally vote
the shares of each of the Funds held in the Separate Account in accordance with
instructions received from variable life owners having a voting interest in the
Funds. Owners having such an interest will receive periodic reports relating to
the Fund, proxy material and a form for giving voting instructions. The number
of shares which you have a right to vote with respect to a Fund will be
determined, as of a record date established by the Fund, by dividing the
portion of your Total Account Value attributable to that Fund by the net asset
value of one share in the Fund. Fund shares held by the Separate Account for
which no timely instructions are received and Fund shares which are not
otherwise attributable to variable life owners will be represented by us at the
meeting and voted in the same proportion as the voting instructions which are
received from such owners participating in each Fund through the Separate
Account.

Notwithstanding the foregoing, if the Investment Company Act of 1940 or any
regulations thereunder should be amended or if the present interpretation
thereof should change, and as a result we determine that we are permitted to
vote the shares of the Fund in our own right, we may elect to do so. Also,
under certain limited circumstances, current law permits us to disregard voting
instructions. In that event, a summary of and the reasons for such action will
be included in the next annual report to Owners.

State Regulation

The Certificates will be offered for sale in states selected by the Company, in
its sole discretion, where one or more eligible purchasers reside. The Company
is subject to regulation and supervision by the Insurance Department of the
State of Connecticut, which periodically examines its affairs. The Company is
also subject to the insurance laws and regulations of all other jurisdictions
where it is authorized to do business. We are required to submit annual
statements of our operations, including financial statements, to the insurance
departments of those jurisdictions, for the purposes of determining solvency
and compliance with local insurance laws and regulations.

Legal Matters

The Company knows of no material legal proceedings pending to which either the
Separate Account or the Company is a party or which would materially affect the
Separate Account. The legal validity of the securities described in this
Prospectus has been passed upon by Counsel to the Company.

The Registration Statement

A Registration Statement under the Securities Act of 1933 has been filed with
the SEC relating to the offering described in this Prospectus. This Prospectus
does not include all of the information set forth in the Registration
Statement, certain portions of which have been omitted pursuant to the rules
and regulations of the SEC. The omitted information may be obtained at the
SEC's principal office in Washington, D.C., upon payment of the SEC's
prescribed fees.

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<PAGE>

Distribution of the Certificates

The Company will serve as principal underwriter of the securities offered
hereunder, as defined by the federal securities laws. The Certificates will be
distributed by Aetna Investment Services, Inc. ("Aetna Services"), which is an
affiliate of the Company. The Company and Aetna Services are registered as
broker-dealers with the SEC and are members of the National Association of
Securities Dealers, Inc. All persons offering or selling the Certificates will
be registered representatives of Aetna Services, and will also be licensed as
the Company's insurance agents to sell variable life insurance. The Company and
NYSUT Trust will enter into an agreement which calls for NYSUT Trust to
exclusively endorse the Policy to Members for supplemental group variable
universal life insurance and for NYSUT Trust to perform administrative
services, including making available NYSUT Trust payroll slots to facilitate
premium remittances to the Company. Under the proposed agreement, the Company
intends to pay NYSUT Trust $70,000 in 1998 and $100,000 in 1999. NYSUT Trust
has indicated to the Company that it intends to use these amounts to enhance
benefits to its members.

Salespersons will be compensated for sales of the Certificates on salaried
basis or on a commission. The maximum sales commission to be paid for
Certificate distribution is 25% of the first year premium up to 12 Basic
Monthly Premiums. In the event of an increase in Specified Amount, the maximum
sales commission will be 25% of 12 times the amount of Basic Monthly Premium
attributable to the increase. The maximum sales commission on all other
premiums is 2% through the 15th Certificate year, or the 15th year following a
Specified Amount increase. In addition, some sales personnel may receive
various types of non-cash compensation as special sales incentives, including
trips and educational and/or business seminars. Supervisory and other
management personnel of the Company may receive compensation that will vary
based on the relative profitability to the Company of the funding options you
select. Funding options that invest in Funds advised by the Company or its
affiliates are generally more profitable to the Company.

Independent Auditors

KPMG Peat Marwick LLP, CityPlace II, Hartford, Connecticut, are the independent
auditors for the Separate Account and for the Company. The services provided to
the Separate Account include primarily the examination of the Separate
Account's financial statements and the review of filings made with the SEC.

Tax Matters

The following is a discussion of certain federal income tax considerations
relating to the Certificates. This discussion is based on the Company's
understanding of federal income tax laws and regulations as they now exist.
These laws and regulations are complex, and tax results may vary among
individuals. A person contemplating the purchase of or the exercise of
elections under a Certificate described in this Prospectus should seek
competent tax advice. Premium payments paid by payroll deduction do not reduce
your taxable income.

22
<PAGE>

Federal Tax Status of the Company

The Company is taxed as a life insurance company in accordance with the
Internal Revenue Code of 1986, as amended ("Code"). For federal income tax
purposes, the operations of the Separate Account form a part of the Company's
total operations and are not taxed separately, although operations of the
Separate Account are treated separately for accounting and financial statement
purposes.

Both investment income and realized capital gains of the Separate Account
(i.e., income, capital gains and dividends distributed to the Separate Account
by the Funds) are reinvested without tax, since the Code does not impose a tax
on the Separate Account for these amounts. The Company reserves the right,
however, to make a deduction for such taxes should they be imposed in the
future.

Life Insurance Qualification

Section 7702 of the Code provides a definition of life insurance for tax
purposes. These rules place limits on the relationship between the death
benefit and the account value. However, under the Certificate, the death
benefit automatically increases to maintain compliance with Section 7702. These
rules also place limits on the amount of premiums payable under the contract.
In no event may the total of all premiums paid exceed the then-current maximum
premium limitations established by federal law for a Policy to qualify as life
insurance. If, at any time, a premium is paid which would result in total
premiums exceeding such maximum premium limitation, we will only accept that
portion of the premium which will make total premiums equal the maximum. Any
part of the premium in excess of that amount will be returned or applied as
otherwise agreed and no further premiums will be accepted until allowed by the
then-current maximum premium limitations prescribed by law. The Company
believes that the Certificates meet this statutory definition of life
insurance. As a result, and if the diversification standards of Section 817(h)
of the Code (discussed below) are also satisfied, then (a) Death Benefits paid
under a Certificate, as well as benefits under the Accelerated Death Benefit
and Accidental Death Benefit riders, should generally be excluded from the
gross income of the recipient for federal income tax purposes, and (b) an Owner
should not generally be taxed on any increase in the Total Account Value under
a Certificate, prior to actual receipt by the Owner of a distribution thereof.

The Company intends to comply with Sections 7702 and 817(h) of the Code and
therefore reserves the right to make such changes as it deems necessary to
ensure such compliance. Any such changes will apply uniformly to affected
Owners and will be made only after advance written notice. In some cases,
moreover, in order to assure that a Certificate continues to qualify and be
taxed as life insurance, the Company may need to distribute amounts that may be
includible in the Certificate Owner's taxable income.

General Rules

Upon the Full Surrender, maturity or cancellation of any Certificate, whether
or not it is a Modified Endowment Contract (discussed below), the Owner will be
taxed on the Surrender Value to the extent that it exceeds the total premiums
paid less prior untaxed distributions from the Certificate. The amount of any
unpaid Certificate Loan will, upon surrender, be added to the Surrender Value
for tax purposes and will be treated for this purpose as if it had been
received as a distribution. For tax purposes, amounts an Owner receives in
return for assigning any interest in, or designating a new Owner of, a
Certificate also would be treated as a distribution.

If the Certificate is not a Modified Endowment Contract, the proceeds of any
full or Partial Surrenders or other partial distributions made after the first
15 Certificate Years are generally not taxable, unless the total amount
received due to such surrenders or other distributions from the Certificate
exceeds total premiums paid less prior untaxed distributions from the
Certificate. However, Partial Surrenders and other partial distributions made
within the first 15 Certificate Years may be taxable, under a complicated
formula, if the Surrender Value plus any unpaid Certificate debt exceeds the
total premiums paid less the untaxed portion of any prior distributions from
the Certificate. This result may occur even if the total amount of
distributions from the Certificate to that date does not exceed total premiums
paid to that date.

23
<PAGE>

Loans received under a Certificate will ordinarily be considered indebtedness
of the Owner, and, assuming the Certificate is not considered a Modified
Endowment Contract, Certificate Loans will not be treated as current partial
distributions subject to tax. Generally, amounts of loan interest paid by
Owners will be considered nondeductible "personal interest."

Modified Endowment Contracts

A Certificate will be considered a Modified Endowment Contract if it fails the
"7-pay test." A Certificate fails the 7-pay test if, at any time in the first
seven Certificate Years, the amount paid into the Certificate exceeds the
amount that would have been paid had the Certificate been designed to become
paid up after payment of seven equal annual premiums. A new 7-pay test begins
at any time a material change takes effect. A material change, for example, may
include a change in Death Benefit Option, reinstatement of a lapsed
Certificate, an assignment or change of Owner, an increase or decrease in the
Specified Amount (including a decrease resulting from a Partial Surrender), the
addition or cancellation of benefits under a Disability Benefit Rider or
Accidental Death Benefit Rider, or payment of premiums at a time when the Death
Benefit is computed based on the Net Single Premium.

In the event of a reduction in future benefits during the first seven
Certificate Years (or within the first seven Certificate Years after a material
change), the 7-pay test will be recalculated retroactively based on the reduced
level of benefits. (For example, a reduction in future benefits could result if
you request a decrease in Specified Amount, Partial Surrender or cancellation
of certain rider benefits.) If the premiums previously paid are greater than
the recalculated 7-pay test limit, the Certificate will be a Modified Endowment
Contract.

A Certificate received in exchange for a Modified Endowment Contract will also
be a Modified Endowment Contract.

If the Certificate is a Modified Endowment Contract, the proceeds of any full
or Partial Surrenders, Certificate Loans, or other distributions from the
Certificate will be currently includible in the Certificate Owner's income to
the extent that the Certificate's Total Account Value immediately before
payment exceeds total premiums paid (increased by the amount of distributions
previously taxed and reduced by untaxed amounts previously distributed from the
Certificate). All Modified Endowment Contracts purchased by you from the
Company (and its affiliates) during the same calendar year, will be aggregated
for purposes of determining the taxable portion of distributions from the
Certificate.

Distributions during any Certificate year in which a Certificate becomes a
Modified Endowment Contract and any subsequent Certificate Year will be taxed
as described above. In addition, distributions from a Certificate within two
years before it becomes Modified Endowment Contract also will be subject to tax
in this manner. Thus, a distribution made from a Certificate that is not a
Modified Endowment Contract could later become taxable as a distribution from a
Modified Endowment Contract.

If the Certificate is a Modified Endowment Contract, a penalty tax equal to 10%
of the amount, if any, includible in the Certificate Owner's income will also
apply to the proceeds of any Certificate surrender, loan or other complete or
partial distribution, unless the Owner has reached the age of 591/2. The
penalty tax does not, however, apply to any full or partial distributions that
are made while the Owner is disabled (within the meaning of the Code) or that
are part of a series of equal periodic payments made not less frequently than
annually for the life or life expectancy of such Owner or the joint lives (or
joint life expectancies) of such Owner and his or her beneficiary (i.e., an
annuity).

Diversification Standards

Section 817(h) of the Code provides that the investment portfolios of the Funds
must be "adequately diversified."

The Internal Revenue Service ("Service") has stated that a variable contract
owner will be considered the owner of separate account assets (such as the Fund
shares supporting a Certificate), if the owner possesses incidents of ownership
in those assets (such as the ability to exercise investment control over the
assets). The Service has also stated it would issue guidance through
regulations or rulings on the extent to which Owners may direct their
investments to particular Funds without being treated as owners of the
underlying assets. As of the date of this Prospectus, no such guidance has been
issued, although the Service has informally indicated that any regulations
could well limit the number of Funds or the frequency of transfers among Funds.
The Company, therefore, reserves the right to modify the Certificates as

24
<PAGE>

necessary to attempt to prevent a Certificate Owner from being considered the
owner of the underlying Fund shares supporting his or her Certificate.

If the investments were not adequately diversified, or if the Owner otherwise
were considered to be the owner of such Fund shares, income and gains realized
by the Separate Account with respect to such shares would be includible in the
Owner's gross income.

Withholding

Generally, unless you provide us with a written election to the contrary before
we make the distribution, we are required to withhold income tax from any
portion of a distribution we make to you that is includible in your income. If
you do not wish us to withhold tax from the payment, or if enough is not
withheld, you may have to pay later. You may also have to pay penalties if your
withholding and estimated tax payments are insufficient.

Other Tax Considerations

The exchange of any other life insurance for a Certificate, depending on the
circumstances, may result in taxable income to the Owner, even in cases where
the Owner receives no cash in the transaction. In addition, there may be state
and local income tax, and also federal and state transfer, estate, gift,
inheritance and other tax consequences of Certificate ownership, premium
payments and receipt of Certificate proceeds depending on the circumstances of
each Owner or beneficiary. The foregoing summary does not purport to be
complete or to cover all situations. Counsel and other advisors should be
consulted for more complete information.

Misc. Certificate Provisions

The Certificates

The Certificate which you receive, the related group Policy owned by NYSUT
Trust pursuant to which the Certificates are issued, the application form you
complete when you purchase the Certificate, any applications for any changes
approved by us, and any riders constitute the whole contract. Copies of all
applications are attached to and made a part of the Certificate. Only the
President, Executive Vice President or the Corporate Secretary may agree with
you to a change in the Certificate or the Policy, and then only in writing.

Payment and Deferral of Benefits

All benefits are payable at our Home Office. We may require submission of the
Certificate before we grant Certificate Loans, make changes or pay benefits.

Payments of any Separate Account Value will ordinarily be made within 7 days
after our receipt of your Written Request. However, the Company reserves the
right to suspend or postpone the date of any payment of any benefit or values
for any Valuation Period (1) when the New York Stock Exchange is closed (except
holidays or weekends); (2) when trading on the Exchange is restricted; (3) when
an emergency exists as determined by the SEC so that disposal of the securities
held in the Funds is not reasonably practicable or it is not reasonably
practicable to determine the value of the Funds' net assets. For payment from
the Separate Account in such instances, we may defer payment of Full Surrender
and Partial Surrender Values, any Death Benefit in excess of the current
Specified Amount, any portion of the Loan Value.

Payment of any Fixed Account Value may be deferred for up to six months, except
when used to pay amounts due us.

Payment of the Death Benefit also may be delayed if the Certificate is being
contested.

Suicide and Incontestability

In most states, if the Insured dies by suicide within 2 years from the Issue
Date of a Certificate, we will pay only a limited benefit. Generally, the
benefit will consist of a refund of premiums paid, subject to a positive or
negative adjustment to reflect investment performance in the Separate Account.
In most states, if the Insured dies by suicide within 2 years

25
<PAGE>

from the Issue Date of any increase in coverage, we will pay as to that
increase only the amount of prior Monthly Deductions that were attributable to
that increase.

In most states, with respect to statements made in the initial application form
or any subsequent application, we will not contest any coverage under a
Certificate after it has been in force for 2 years from its Issue Date.
Notwithstanding the foregoing, if the Age of the Insured is misstated,
regardless how long the coverage has been in effect, the amount of the Death
Benefit will be adjusted to reflect the coverage that would have been purchased
by the most recent pre-Maturity Date Monthly Deduction at the correct Age.

Protection of Proceeds

To the extent provided by law, the proceeds of the Certificate are subject
neither to claims by a beneficiary's creditors nor to any legal process against
any beneficiary.

Nonparticipation

The Certificate is not entitled to share in the divisible surplus of the
Company. No dividends are payable.

Changes in Owner and Beneficiary; Assignment

Unless otherwise stated in the Certificate, you may change the Owner and/or the
beneficiary or beneficiaries, or both, at any time while the Certificate is in
force. A request for such change must be made by Written Request. After we have
agreed, in writing, to the change, it will take effect as of the date on which
your Written Request was signed. Death Benefit proceeds payable on death of the
Insured will be paid to each named beneficiary as specified in your then
effective beneficiary disignation. If no named beneficiary is living at the
date of the Insured's death, all proceeds will be payable to the Owner or the
Owner's estate.

A Certificate may also be assigned. No assignment of a Certificate will be
binding on us unless made in writing and sent to us at our Home Office. The
Company will use reasonable procedures to confirm that the assignment is
authentic, including verification of signature. If the Company fails to follow
its procedures, it would be liable for any losses to you directly resulting
from the failure. Otherwise, we are not responsible for the validity of any
assignment. The rights of the Owner and the interest of the beneficiary will be
subject to the rights of any assignee of record.

Assignment or change of Owner can have adverse tax consequences. (See Tax
Matters)

Performance Reporting and Advertising

From time to time, the Company may advertise different types of historical
performance for the Variable Options of the Separate Account available under
the Certificates. We may also distribute sales literature that compares the
percentage change in Accumulation Unit Values for any of the Variable Options
to established market indices such as the Standard & Poor's 500 Stock Index and
the Dow Jones Industrial Average or to the percentage change in values of other
mutual funds that have investment objectives similar to the Variable Option
being compared.

Illustrations of Death Benefit and Total Account Values

The following pages provide a hypothetical illustration of how the Option 1
Death Benefit and Total Account Values can change over time for a Certificate
issued to an Age 45 preferred risk non-smoker Insured if premiums are
accumulated at 5% interest per year or the investment return on the assets held
in each Fund were a uniform gross annual rate of 0%, 6%, and 12%, respectively,
based upon a number of assumptions.

There are two pages of values. The first page illustrates the assumption that
the guaranteed maximum Cost of Insurance rates and other charges at maximum
rates are charged in all years. The second page illustrates the assumption that
the current scale of Cost of Insurance rates for a $250,000 Specified Amount
and other charges at current rates are charged in all years. Current cost of
insurance rates are generally lowest for Certificates having Specified Amounts
of at least $250,000. We expect to review our current cost of insurance rates
on at least an annual basis in light of the actual mortality experience of
participants under the NYSUT group Policy.

26
<PAGE>

The values shown in these illustrations vary according to assumptions used for
charges and gross rates of investment return. The actual investment returns
experienced by the Certificates and the charges deducted may be higher or lower
than those illustrated. The charges reflected on the first page consist of the
maximum allowable charges under the Certificate, including 1.25% for years 1-10
and 0.40% for the eleventh year and after, for mortality and expense risks in
all Certificate Years and 0.67% for expenses of the Funds. The charges reflected
on the second page consist of the current charges imposed under the
Certificates, including 0.85% for mortality and expense risks in Certificate
Years 1 through 10 only and (as is currently planned) 0% thereafter, and 0.67%
for Fund expenses. The charge for Fund expenses reflected in the illustrations
assumes that Total Account Values have been allocated equally among all Funds
and represent a fixed, unweighted average of the investment advisory fees
charged to each of the Funds as of December 31, 1996 (after expense
reimbursements) and other operating expenses (after expense reimbursements) for
the year then ended.

After deduction of these amounts, the illustrated gross annual investment rates
of return of 0%, 6% and 12% correspond to approximate net annual rates of
- -1.52%, 4.48% and 10.48%, respectively, during the first 10 Certificate Years,
and -0.67%, 5.33% and 11.33%, respectively, thereafter on a current basis. On a
guaranteed basis, the illustrated gross annual investment rates of return of
0%, 6% and 12% correspond to approximate net annual rates of -1.92%, 4.08% and
10.08% during the first 10 years and -1.07%, 4.93% and 10.93% during the
eleventh year and after, respectively.

The Death Benefit and Total Account Values would be different from those shown
if the gross annual investment rates of return averaged 0%, 6%, and 12% over a
period of years, but fluctuated above and below those averages for individual
Certificate Years. The illustrations also assume payment of premiums as
indicated, no Certificate Loans, no increases or decreases in Specified Amount,
no Death Benefit Option changes, no Partial Surrenders and no supplemental
rider benefits.

The hypothetical values shown in the tables do not reflect any Separate Account
charges for federal income taxes, since we are not currently making such
charges. However, such charges may be made in the future, and, in that event,
the gross annual investment rate of return would have to exceed 0%, 6%, or 12%
by an amount sufficient to cover the tax charges in order to produce the Death
Benefit and Total Account Values shown.

Upon request, we will provide a comparable personalized illustration based upon
the Age and underwriting classification of the proposed Insured, including the
Specified Amount and premium requested, the proposed frequency of premium
payments and any available riders requested. A fee of $25 may be charged for
each such illustration. The hypothetical gross annual investment return assumed
in such an illustration will not exceed 12%.

27
<PAGE>

FLEXIBLE PREMIUM
VARIABLE UNIVERSAL LIFE INSURANCE CERTIFICATE
UNISEX ISSUE AGE 45
$1,548.48 ANNUAL BASIC PREMIUM
PREFERRED NONSMOKER RISK
FACE AMOUNT $250,000
DEATH BENEFIT OPTION 1 (GUARANTEED VALUES)

<TABLE>
<CAPTION>
Premiums Death Benefit Total Account Value Surrender Value
Accumulated Gross Annual Investment Gross Annual Investment Returns Gross Annual Investment Returns
at Returns of of of
5% Interest --------------------------------- --------------------------------- --------------------------------
Year Per Year Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12%
- ----------- ------------- ---------- ---------- ----------- ---------- ---------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,626 250000 250000 250000 365 416 467 365 416 467
2 3,333 250000 250000 250000 762 889 1024 762 889 1024
3 5,126 250000 250000 250000 1089 1318 1571 1089 1318 1571
4 7,008 250000 250000 250000 1345 1698 2105 1345 1698 2105
5 8,984 250000 250000 250000 1524 2019 2618 1524 2019 2618
6 11,059 250000 250000 250000 1619 2271 3099 1619 2271 3099
7 13,238 250000 250000 250000 1621 2441 3535 1621 2441 3535
8 15,526 250000 250000 250000 1516 2509 3903 1516 2509 3903
9 17,928 250000 250000 250000 1293 2456 4184 1293 2456 4184
10 20,450 250000 250000 250000 942 2266 4359 942 2266 4359
15 35,085 0 0 250000 0 0 2943 0 0 2943
20 53,762 0 0 0 0 0 0 0 0 0
25 77,600 0 0 0 0 0 0 0 0 0
30 108,023 0 0 0 0 0 0 0 0 0
20 Age 65 53,762 0 0 0 0 0 0 0 0 0
</TABLE>

Assumes no Policy loan has been made and no supplemental rider benefits have
been elected. If premiums are paid more frequently than annually, the Death
Benefit could be, and the Total Account Values would be, less than those
illustrated. Zeros indicate Certificate lapses if additional premiums are not
paid.

These investment results are illustrative only and should not be considered a
representation of past or future investment results.

Actual investment results may be more or less than those shown and will depend
on a number of factors including the Owner's allocations, and the Funds' rates
of return. The Total Account Values for a Certificate would be different from
those shown if the actual investment rates of return averaged 0%, 6% and 12%
over a period of years, but fluctuated above or below those averages for
individual years.

28
<PAGE>

FLEXIBLE PREMIUM
VARIABLE UNIVERSAL LIFE INSURANCE CERTIFICATE
UNISEX ISSUE AGE 45
$1,548.48 ANNUAL BASIC PREMIUM
PREFERRED NONSMOKER RISK
FACE AMOUNT $250,000
DEATH BENEFIT OPTION 1 (CURRENT VALUES)

<TABLE>
<CAPTION>
Premiums Death Benefit Total Account Value Surrender Value
Accumulated Gross Annual Investment Gross Annual Investment Returns Gross Annual Investment Returns
at Returns of of of
5% Interest --------------------------------- --------------------------------- --------------------------------
Year Per Year Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12% Gross 0% Gross 6% Gross 12%
- ----------- ------------- ---------- ---------- ----------- ---------- ---------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,626 250000 250000 250000 670 732 794 670 732 794
2 3,333 250000 250000 250000 1422 1591 1769 1422 1591 1769
3 5,126 250000 250000 250000 2157 2485 2842 2157 2485 2842
4 7,008 250000 250000 250000 2878 3415 4025 2878 3415 4025
5 8,984 250000 250000 250000 3584 4383 5328 3584 4383 5328
6 11,059 250000 250000 250000 4275 5391 6765 4275 5391 6765
7 13,238 250000 250000 250000 4951 6441 8351 4951 6441 8351
8 15,526 250000 250000 250000 5612 7534 10101 5612 7534 10101
9 17,928 250000 250000 250000 6259 8673 12033 6259 8673 12033
10 20,450 250000 250000 250000 6869 9836 14143 6869 9836 14143
15 35,085 250000 250000 250000 8755 15612 28025 8755 15612 28025
20 53,762 250000 250000 250000 7182 19434 48195 7182 19434 48195
25 77,600 250000 250000 250000 814 19373 78978 814 19373 78978
30 108,023 0 250000 250000 0 11013 128440 0 11013 128440
20 Age 65 53,762 250000 250000 250000 7182 19434 48195 7182 19434 48195
</TABLE>

These investment results are illustrative only and should not be considered a
representation of past or future investment results.

<PAGE>

VARIABLE LIFE ACCOUNT B
FINANCIAL STATEMENTS

Index

<TABLE>
<S> <C>
Statement of Assets and Liabilities as of March 31, 1997 (unaudited) ............... S-2
Statements of Operations and Changes in Net Assets for the three months
ended March 31, 1997 and March 31, 1996 (unaudited) ................................ S-4
Condensed Financial Information for the three months ended March 31, 1997 (unaudited) S-5
Notes to Financial Statements -- March 31, 1997 .................................... S-8
Independent Auditors' Report ......................................................... S-12
Statement of Assets and Liabilities -- December 31, 1996 ........................... S-13
Statements of Operations and Changes in Net Assets for the years ended
December 31, 1996 and 1995 ......................................................... S-15
Condensed Financial Information for the year ended December 31, 1996 .................. S-16
Notes to Financial Statements -- December 31, 1996 ................................. S-19
</TABLE>

S-1
<PAGE>

Variable Life Account B

Statement of Assets and Liabilities--March 31, 1997 (Unaudited)

<TABLE>
<S> <C>
ASSETS:
Investments, at net asset value: (Note 1)
Aetna Variable Fund; 2,960,415 shares (cost $89,278,680) ........................ $ 97,909,299
Aetna Income Shares; 1,045,713 shares (cost $13,363,458) ........................ 13,165,731
Aetna Variable Encore Fund; 1,227,381 shares (cost $15,807,543) .................. 15,746,491
Aetna Investment Advisers Fund, Inc.; 1,091,726 shares (cost $15,188,940) ......... 16,429,385
Aetna Ascent Variable Portfolio; 68,622 shares (cost $854,021) .................. 863,923
Aetna Crossroads Variable Portfolio; 16,359 shares (cost $197,046) ............... 196,092
Aetna Legacy Variable Portfolio; 4,996 shares (cost $56,579) ..................... 56,152
Alger American Small Capitalization Portfolio; 345,556 shares (cost $14,099,553) 12,460,754
American Century VP Capital Appreciation Fund; 652,426 shares (cost $6,893,822) ... 5,558,671
Fidelity Investments Variable Insurance Products Fund:
Equity-Income Portfolio; 818,103 shares (cost $15,998,533) ..................... 15,683,029
Growth Portfolio; 187,282 shares (cost $5,537,815) .............................. 5,489,224
Overseas Portfolio; 32,503 shares (cost $569,345) .............................. 577,577
Fidelity Investments Variable Insurance Products Fund II:
Asset Manager Portfolio; 97,944 shares (cost $1,506,123) ........................ 1,461,329
Contrafund Portfolio; 527,095 shares (cost $8,030,087) ........................... 8,328,106
Janus Aspen Series:
Aggressive Growth Portfolio; 595,943 shares (cost $10,670,058) .................. 9,541,046
Balanced Portfolio; 287,055 shares (cost $4,047,436) ........................... 4,320,181
Growth Portfolio; 530,993 shares (cost $7,746,679) .............................. 8,278,181
Short-Term Bond Portfolio; 390,958 shares (cost $3,872,649) ..................... 3,944,763
Worldwide Growth Portfolio; 656,748 shares (cost $12,087,431) .................. 13,561,854
Scudder Variable Life Investment Fund--
International Portfolio; 847,331 shares (cost $10,042,514) ..................... 11,193,242
-------------
NET ASSETS (cost $235,848,312) ................................................... $244,765,030
=============
Net assets represented by:
Policyholders' account values: (Notes 1 and 5)
Aetna Variable Fund:
Policyholders' account values ................................................... $ 97,909,299
Aetna Income Shares:
Policyholders' account values ................................................... 13,165,731
Aetna Variable Encore Fund:
Policyholders' account values ................................................... 15,746,491
Aetna Investment Advisers Fund, Inc.:
Policyholders' account values ................................................... 16,429,385
Aetna Ascent Variable Portfolio:
Policyholders' account values ................................................... 863,923
Aetna Crossroads Variable Portfolio:
Policyholders' account values ................................................... 196,092
</TABLE>

S-2
<PAGE>

Variable Life Account B

Statement of Assets and Liabilities--March 31, 1997 (unaudited & continued):

<TABLE>
<S> <C>
Aetna Legacy Variable Portfolio:
Policyholders' account values .............................. $ 56,152
Alger American Small Capitalization Portfolio:
Policyholders' account values .............................. 12,460,754
American Century VP Capital Appreciation Fund:
Policyholders' account values .............................. 5,558,671
Fidelity Investments Variable Insurance Products Fund:
Equity-Income Portfolio:
Policyholders' account values .............................. 15,683,029
Growth Portfolio:
Policyholders' account values .............................. 5,489,224
Overseas Portfolio:
Policyholders' account values .............................. 577,577
Fidelity Investments Variable Insurance Products Fund II:
Asset Manager Portfolio:
Policyholders' account values .............................. 1,461,329
Contrafund Portfolio:
Policyholders' account values .............................. 8,328,106
Janus Aspen Series:
Aggressive Growth Portfolio:
Policyholders' account values .............................. 9,541,046
Balanced Portfolio:
Policyholders' account values .............................. 4,320,181
Growth Portfolio:
Policyholders' account values .............................. 8,278,181
Short-Term Bond Portfolio:
Policyholders' account values .............................. 3,944,763
Worldwide Growth Portfolio:
Policyholders' account values .............................. 13,561,854
Scudder Variable Life Investment Fund--International Portfolio:
Policyholders' account values .............................. 11,193,242
-------------
$244,765,030
=============
</TABLE>

See Notes to Financial Statements

S-3
<PAGE>

Variable Life Account B

Statements of Operations and Changes in Net Assets

<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
March 31, 1997 March 31, 1996
(Unaudited) (Unaudited)
-------------------- -------------------
INVESTMENT INCOME:
<S> <C> <C>
Income: (Notes 1, 3 and 5)
Dividends ...................................................... $ 2,905,983 $ 359,401
Expenses: (Notes 2 and 5)
Valuation Period Deductions .................................... (335,872) (216,034)
------------ ------------
Net investment income .......................................... 2,570,111 143,367
------------ ------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on sales of investments: (Notes 1, 4 and 5)
Proceeds from sales ............................................. 15,319,304 3,428,998
Cost of investments sold ....................................... 14,300,603 3,005,963
------------ ------------
Net realized gain ............................................. 1,018,701 423,035
Net unrealized gain (loss) on investments: (Note 5)
Beginning of period ............................................. 14,132,669 4,391,574
End of period ................................................... 8,916,718 9,478,418
------------ ------------
Net change in unrealized gain (loss) ........................... (5,215,951) 5,086,844
------------ ------------
Net realized and unrealized gain (loss) on investments ......... (4,197,250) 5,509,879
------------ ------------
Net (decrease) increase in net assets resulting from operations (1,627,139) 5,653,246
------------ ------------
FROM UNIT TRANSACTIONS:
Variable life premium payments ................................. 32,286,413 21,128,211
Sales and administrative charges deducted by the Company ......... (1,105,628) (632,971)
Premiums allocated to the fixed account ........................ (706,230) (1,644,459)
------------ ------------
Net premiums allocated to the variable account .................. 30,474,555 18,850,781
Transfers to the Company for monthly deductions .................. (4,828,049) (3,306,575)
Redemptions by contract holders ................................. (2,187,917) (1,152,122)
Transfers on account of policy loans ........................... (187,877) (422,131)
Other ............................................................ (52,426) 43,265
------------ ------------
Net increase in net assets from unit transactions (Note 5) ...... 23,218,286 14,013,218
------------ ------------
Change in net assets ............................................. 21,591,147 19,666,464
NET ASSETS:
Beginning of period ............................................. 223,173,883 126,515,779
------------ ------------
End of period ................................................... $244,765,030 $146,182,243
============ ============
</TABLE>

See Notes to Financial Statements

S-4
<PAGE>

Variable Life Account B

Condensed Financial Information--Three Months Ended March 31, 1997 (Unaudited)

Value Increase
Per Unit (Decrease)
in Value of Reserves
Beginning End of Accumulation at End
of Period Period Unit of Period
----------- --------- -------------------- ------------
<S> <C> <C> <C> <C>
Aetna Variable Fund:
Aetna Vest ........................ $34.932 $35.579 1.85% $52,790,404
Aetna Vest II ..................... 19.507 19.868 1.85% 15,918,571
Aetna Vest Plus .................. 16.389 16.692 1.85% 24,193,440
Aetna Vest Estate Protector ...... 11.675 11.896 1.89% 343,196
Corporate Specialty Market ...... 14.805 15.080 1.85% 4,663,688
Aetna Income Shares:
Aetna Vest ........................ $21.850 $21.739 (0.51%) $ 5,779,308
Aetna Vest II ..................... 14.691 14.616 (0.51%) 964,510
Aetna Vest Plus .................. 11.764 11.704 (0.51%) 1,573,435
Aetna Vest Estate Protector ...... 10.452 10.403 (0.47%) 110,600
Corporate Specialty Market ...... 11.354 11.297 (0.51%) 4,737,878
Aetna Variable Encore Fund:
Aetna Vest ........................ $16.577 $16.743 1.00% $ 2,617,424
Aetna Vest II ..................... 12.117 12.238 1.00% 162,807
Aetna Vest Plus .................. 11.388 11.502 1.00% 5,475,885
Aetna Vest Estate Protector ...... 10.333 10.441 1.04% 391,865
Corporate Specialty Market ...... 10.895 11.004 1.00% 7,098,510
Aetna Investment Advisers Fund, Inc.:
Aetna Vest ........................ $17.547 $17.424 (0.70%) $ 1,901,583
Aetna Vest II ..................... 17.742 17.618 (0.70%) 4,157,201
Aetna Vest Plus .................. 14.880 14.775 (0.70%) 6,002,453
Aetna Vest Estate Protector ...... 11.340 11.086 (2.24%) (1) 2,571
Corporate Specialty Market ...... 12.954 12.863 (0.70%) 4,365,577
Aetna Ascent Variable Portfolio:
Aetna Vest ........................ $11.828 $11.771 (0.48%) $ 135,740
Aetna Vest II ..................... 11.828 11.771 (0.48%) 99,315
Aetna Vest Plus .................. 11.828 11.771 (0.48%) 626,288
Aetna Vest Estate Protector ...... 11.886 11.789 (0.82%) (2) 2,580
Aetna Crossroads Variable
Portfolio:
Aetna Vest ........................ $11.474 $11.453 (0.18%) $ 28,023
Aetna Vest II ..................... 11.544 11.453 (0.79%) (1) 1,917
Aetna Vest Plus .................. 11.474 11.453 (0.18%) 165,657
Aetna Vest Estate Protector ...... 11.487 11.470 (0.14%) 495
Aetna Legacy Variable Portfolio:
Aetna Vest II ..................... $11.263 $11.076 (1.66%) (2) $ 9,557
Aetna Vest Plus .................. 11.118 11.076 (0.38%) 46,595
</TABLE>

S-5
<PAGE>

Variable Life Account B

Condensed Financial Information--Three Months Ended March 31, 1997 (unaudited &
continued)

<TABLE>
<CAPTION>
Increase
Value Per Unit (Decrease)
in Value of Reserves
Beginning End of Accumulation at End
of Period Period Unit of Period
----------- --------- -------------- ------------
<S> <C> <C> <C> <C>
Alger American Small
Capitalization Portfolio:
Aetna Vest ........................ $16.051 $14.113 (12.07%) $ 1,043,585
Aetna Vest II ..................... 16.052 14.114 (12.07%) 635,959
Aetna Vest Plus .................. 16.043 14.106 (12.07%) 5,680,005
Aetna Vest Estate Protector ...... 9.982 8.780 (12.04%) 253,395
Corporate Specialty Market ...... 13.201 11.607 (12.07%) 4,847,810
American Century VP Capital
Appreciation Fund:
Aetna Vest ........................ $12.534 $10.646 (15.06%) $ 840,154
Aetna Vest II ..................... 12.590 10.694 (15.06%) 310,402
Aetna Vest Plus .................. 12.419 10.548 (15.06%) 3,515,587
Aetna Vest Estate Protector ...... 9.511 8.082 (15.03%) 2,691
Corporate Specialty Market ...... 11.358 9.647 (15.06%) 889,837
Fidelity Investments Variable
Insurance Products Fund:
Equity-Income Portfolio:
Aetna Vest ........................ $10.871 $10.968 0.90% $ 87,359
Aetna Vest II ..................... 10.871 10.968 0.90% 48,971
Aetna Vest Plus .................. 10.871 10.968 0.90% 2,014,106
Aetna Vest Estate Protector ...... 10.883 10.985 0.93% 252,126
Corporate Specialty Market ...... 12.512 12.624 0.90% 13,280,467
Growth Portfolio:
Corporate Specialty Market ...... $11.255 $10.952 (2.69%) $ 5,489,224
Overseas Portfolio:
Corporate Specialty Market ...... $11.241 $11.578 2.99% $ 577,577
Fidelity Investments Variable
Insurance Products Fund II:
Asset Manager Portfolio:
Corporate Specialty Market ...... $12.022 $11.987 (0.30%) $ 1,461,329
Contrafund Portfolio:
Aetna Vest ........................ $11.525 $11.309 (1.88%) $ 305,794
Aetna Vest II ..................... 11.525 11.309 (1.88%) 94,053
Aetna Vest Plus .................. 11.525 11.309 (1.88%) 1,620,391
Aetna Vest Estate Protector ...... 11.538 11.326 (1.84%) 158,332
Corporate Specialty Market ...... 12.396 12.164 (1.88%) 6,149,536
Janus Aspen Series:
Aggressive Growth Portfolio:
Aetna Vest ........................ $16.153 $14.143 (12.44%) $ 737,026
Aetna Vest II ..................... 16.153 14.143 (12.44%) 458,338
</TABLE>

S-6
<PAGE>

Variable Life Account B

Condensed Financial Information--Three Months Ended March 31, 1997 (unaudited &
continued):

<TABLE>
<CAPTION>
Increase
Value Per Unit (Decrease)
in Value of Reserves
Beginning End of Accumulation at End
of Period Period Unit of Period
----------- --------- ----------------- -----------
<S> <C> <C> <C> <C>
Aetna Vest Plus .................. $16.153 $14.143 (12.44%) $3,517,794
Aetna Vest Estate Protector ...... 9.797 8.581 (12.41%) 311,336
Corporate Specialty Market ...... 12.120 10.611 (12.44%) 4,516,552
Balanced Portfolio:
Aetna Vest ........................ $13.966 $14.196 1.64% $ 97,246
Aetna Vest II ..................... 14.075 14.306 1.64% 84,618
Aetna Vest Plus .................. 13.960 14.189 1.64% 2,082,733
Aetna Vest Estate Protector ...... 11.101 11.288 1.68% 35,062
Corporate Specialty Market ...... 12.242 12.443 1.64% 2,020,522
Growth Portfolio:
Aetna Vest ........................ $14.898 $14.938 0.27% $ 541,273
Aetna Vest II ..................... 14.884 14.924 0.27% 1,002,167
Aetna Vest Plus .................. 14.863 14.903 0.27% 4,160,826
Aetna Vest Estate Protector ...... 10.857 10.890 0.31% 146,512
Corporate Specialty Market ...... 12.232 12.265 0.27% 2,427,403
Short-Term Bond Portfolio:
Aetna Vest ........................ $11.289 $11.397 0.95% $ 6,924
Aetna Vest II ..................... 11.277 11.385 0.95% 1,372
Aetna Vest Plus .................. 11.247 11.354 0.95% 273,539
Aetna Vest Estate Protector ...... 10.389 10.465 0.73% (1) 1,539
Corporate Specialty Market ...... 10.468 10.568 0.95% 3,661,389
Worldwide Growth Portfolio:
Aetna Vest ........................ $16.364 $17.339 5.96% $1,547,127
Aetna Vest II ..................... 16.368 17.344 5.96% 940,957
Aetna Vest Plus .................. 16.348 17.322 5.96% 6,185,375
Aetna Vest Estate Protector ...... 11.811 12.519 6.00% 310,828
Corporate Specialty Market ...... 13.459 14.262 5.96% 4,577,567
Scudder Variable Life Investment
Fund--International Portfolio:
Aetna Vest ........................ $14.543 $14.813 1.86% $2,402,152
Aetna Vest II ..................... 14.453 14.722 1.86% 675,216
Aetna Vest Plus .................. 14.373 14.640 1.86% 5,406,958
Aetna Vest Estate Protector ...... 10.898 11.105 1.90% 99,911
Corporate Specialty Market ...... 12.043 12.267 1.86% 2,609,005
</TABLE>

Notes to Condensed Financial Information:

(1)--Reflects less than a full year of performance activity. Funds were
first received in this option during January 1997.

(2)--Reflects less than a full year of performance activity. Funds were
first received in this option during February 1997.

S-7
<PAGE>

Variable Life Account B

Notes to Financial Statements--March 31, 1997 (Unaudited):

1. Summary of Significant Accounting Policies

Variable Life Account B ("Account") is a separate account established by
Aetna Life Insurance and Annuity Company and is registered under the
Investment Company Act of 1940 as a unit investment trust. The Account is
sold exclusively for use with variable life insurance product contracts as
defined under the Internal Revenue Code of 1986, as amended.

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect amounts reported therein. Although actual results
could differ from these estimates, any such differences are expected to be
immaterial to the net assets of the Account.

a. Valuation of Investments

Investments in the following Funds are stated at the closing net asset
value per share as determined by each fund on March 31, 1997:

Aetna Variable Fund Janus Aspen Series:
Aetna Income Shares [bullet] Aggressive Growth
Portfolio
Aetna Variable Encore Fund [bullet] Balanced Portfolio
Aetna Investment Advisers Fund, Inc. [bullet] Growth Portfolio
Aetna Ascent Variable Portfolio [bullet] Short-Term Bond
Portfolio
Aetna Crossroads Variable Portfolio [bullet] Worldwide Growth
Portfolio
Aetna Legacy Variable Portfolio Scudder Variable Life Investment Fund--
International Portfolio
Alger American Small Capitalization Portfolio
American Century VP Capital Appreciation Fund
Fidelity Investments Variable Insurance Products Fund:
[bullet] Equity-Income Portfolio
[bullet] Growth Portfolio
[bullet] Overseas Portfolio
Fidelity Investments Variable Insurance Products Fund II:
[bullet] Asset Manager Portfolio
[bullet] Contrafund Portfolio

b. Other

Other Investment transactions are accounted for on a trade date basis and
dividend income is recorded on the ex-dividend date. The cost of
investments sold is determined by specific identification.

c. Federal Income Taxes

The operations of the Account form a part of, and are taxed with, the total
operations of Aetna Life Insurance and Annuity Company ("Company") which is
taxed as a life insurance company under the Internal Revenue Code of 1986,
as amended.

2. Valuation Period Deductions

Deductions by the Account for mortality and expense risk charges are made
in accordance with the terms of the policies and are paid to the Company.

S-8
<PAGE>

Variable Life Account B

Notes to Financial Statements--March 31, 1997 (unaudited & continued):

3. Dividend Income

On an annual basis the Funds distribute substantially all of their taxable
income and realized capital gains to their shareholders. Distributions paid
to the Account are automatically reinvested in shares of the Funds. The
Account's proportionate share of each Fund's undistributed net investment
income (distributions in excess of net investment income) and accumulated
net realized gain (loss) on investments is included in net unrealized gain
(loss) on investments in the Statements of Operations and Changes in Net
Assets.

4. Purchases and Sales of Investments

The cost of purchases and proceeds from sales of investments other than
short-term investments for the three months ended March 31, 1997 and 1996
aggregated $41,107,702 and $15,319,304 and $17,583,396 and $3,428,998,
respectively.

S-9
<PAGE>

Variable Life Account B

Notes to Financial Statements--March 31, 1997 (unaudited & continued):

5. Supplemental Information to Statements of Operations and Changes in Net
Assets--Three-Months Ended March 31, 1997

<TABLE>
<CAPTION>
Valuation Proceeds Cost of Net
Period from Invesments Realized
Dividends Deductions Sales Sold Gain (Loss)
------------ --------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Aetna Variable Fund:
PolicyHolder's account values ............... $ 0 $(138,689) $ 2,085,493 $ 1,533,994 $ 551,499
Aetna Income Shares:
PolicyHolders' account values ............... 0 (19,010) 862,682 883,816 (21,134)
Aetna Variable Encore Fund:
PolicyHolder's account values ............... 372,968 (15,420) 5,214,143 5,282,921 (68,778)
Aetna Investment Advisers Fund, Inc.:
PolicyHolder's account values ............... 0 (23,413) 326,908 270,907 56,001
Aetna Ascent Variable Portfolio:
PolicyHolder's account values ............... 0 (1,012) 719,965 718,546 1,419
Aetna Crossroads Variable Portfolio:
PolicyHolder's account values ............... 0 (219) 151,692 151,595 97
Aetna Legacy Variable Portfolio:
PolicyHolder's account values ............... 0 (45) 31,294 31,283 11
Alger American Small Capitalization Portfolio:
PolicyHolder's account values ............... 0 (18,952) 1,610,023 1,464,966 145,057
American Century VP Capital Appreciation Fund:
PolicyHolder's account values ............... 132,455 (9,411) 628,578 573,692 54,886
Fidelity Investments Variable Insurance Products Fund:
Equity-Income Portfolio:
PolicyHolder's account values ............... 1,485,715 (20,823) 95,203 90,944 4,259
Growth Portfolio:
PolicyHolder's account values ............... 192,233 (7,619) 105,973 100,096 5,877
Overseas Portfolio:
PolicyHolder's account values ............... 46,706 (768) 6,580 5,914 666
Fidelity Investments Variable Insurance Products Fund II:
Asset Manager Portfolio:
PolicyHolder's account values ............... 175,953 (2,076) 36,869 35,726 1,143
Contrafund Portfolio:
PolicyHolder's account values ............... 235,708 (10,954) 181,301 150,422 30,879
Janus Aspen Series:
Aggressive Growth Portfolio:
PolicyHolder's account values ............... 0 (13,717) 2,488,643 2,394,608 94,035
Balanced Portfolio:
PolicyHolder's account values ............... 0 (5,499) 141,829 115,577 26,252
Growth Portfolio:
PolicyHolder's account values ............... 0 (11,143) 130,246 96,623 33,623
Short-Term Bond Portfolio:
PolicyHolder's account values ............... 0 (5,429) 30,221 29,518 703
Worldwide Growth Portfolio:
PolicyHolder's account values ............... 0 (16,324) 128,784 88,357 40,427
Scudder Variable Life Investment Fund -
International Portfolio:
PolicyHolder's account values ............... 264,245 (15,349) 342,877 281,098 61,779
----------- ---------- ------------ ------------ ----------
Total Variable Life Account B ............... $2,905,983 $(335,872) $15,319,304 $14,300,603 $1,018,701
=========== ========== ============ ============ ==========
</TABLE>

S-10
<PAGE>

<TABLE>
<CAPTION>
Net Increase
Net Unrealized Net (Decrease) In
Gain (Loss) Change in Net Assets Net Assets
Beginning End Unrealized from Unit Beginning End
of Period of Period Gain (Loss) Transactions of Period of Period
- --------------- --------------- ---------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
$ 7,294,643 $ 8,630,619 $ 1,335,976 $ 3,288,887 $ 92,871,626 $ 97,909,299
(190,180) (197,727) (7,547) $ 33,635 13,179,787 13,165,731
106,394 (61,052) (167,446) $ 6,532,982 9,092,185 15,746,491
1,383,931 1,240,445 (143,486) $ 748,742 15,791,541 16,429,385
15,645 9,902 (5,743) $ 323,881 545,378 863,923
(191) (954) (763) $ 73,285 123,692 196,092
20 (427) (447) $ 42,670 13,963 56,152
172,057 (1,638,799) (1,810,856) $ 1,059,422 13,086,083 12,460,754
(146,911) (1,335,151) (1,188,240) $ 86,456 6,482,525 5,558,671
1,096,283 (315,504) (1,411,787) $ 2,315,452 13,310,213 15,683,029
294,867 (48,591) (343,458) $ 589,662 5,052,529 5,489,224
37,941 8,232 (29,709) $ 28,355 532,327 577,577
134,978 (44,794) (179,772) $ 55,895 1,410,186 1,461,329
730,883 298,019 (432,864) $ 1,593,647 6,911,690 8,328,106
249,074 (1,129,012) (1,378,086) $ 1,175,887 9,662,927 9,541,046
243,163 272,745 29,582 $ 695,501 3,574,345 4,320,181
566,478 531,502 (34,976) $ 1,116,030 7,174,647 8,278,181
26,773 72,114 45,341 $ 76,300 3,827,848 3,944,763
872,277 1,474,423 602,146 $ 3,020,469 9,915,136 13,561,854
1,244,544 1,150,728 (93,816) $ 361,128 10,615,255 11,193,242
----------- ------------ ------------ ------------ ------------- -------------
$14,132,669 $ 8,916,718 $(5,215,951) $23,218,286 $223,173,883 $244,765,030
=========== ============ ============ ============ ============= =============
</TABLE>

S-11

<PAGE>

Independent Auditors' Report

The Board of Directors of Aetna Life Insurance and Annuity Company and
Policyholders of Variable Life Account B:

We have audited the accompanying statement of assets and liabilities of Aetna
Life Insurance and Annuity Company Variable Life Account B (the "Account") as
of December 31, 1996, and the related statements of operations and changes in
net assets for each of the years in the two-year period then ended, and
condensed financial information for the year ended December 31, 1996. These
financial statements and condensed financial information are the responsibility
of the Account's management. Our responsibility is to express an opinion on
these financial statements and condensed financial information based on our
audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and condensed
financial information are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of December 31, 1996, by correspondence with the custodian. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements and condensed financial information
referred to above present fairly, in all material respects, the financial
position of Aetna Life Insurance and Annuity Company Variable Life Account B as
of December 31, 1996, the results of its operations and the changes in its net
assets for each of the years in the two-year period then ended, and condensed
financial information for the year ended December 31, 1996 in conformity with
generally accepted accounting principles.

KPMG Peat Marwick LLP

Hartford, Connecticut
February 14, 1997

S-12
<PAGE>

Variable Life Account B

Statement of Assets and Liabilities--December 31, 1996

<TABLE>
<S> <C>
ASSETS:
Investments, at net asset value: (Note 1)
Aetna Variable Fund; 2,867,163 shares (cost $85,576,983) ........................ $ 92,871,626
Aetna Income Shares; 1,044,098 shares (cost $13,369,967) ........................ 13,179,787
Aetna Variable Encore Fund; 689,138 shares (cost $8,985,791) ..................... 9,092,185
Aetna Investment Advisers Fund, Inc.; 1,044,556 shares (cost $14,407,610)......... 15,791,541
Aetna Ascent Variable Portfolio; 43,217 shares (cost $529,733) .................. 545,378
Aetna Crossroads Variable Portfolio; 10,326 shares (cost $123,882) ............... 123,692
Aetna Legacy Variable Portfolio; 1,241 shares (cost $13,943) ..................... 13,963
Alger American Small Capitalization Portfolio; 319,875 shares (cost $12,914,026) 13,086,083
Fidelity Investments Variable Insurance Products Fund:
Equity-Income Portfolio; 632,915 shares (cost $12,213,929) ..................... 13,310,213
Growth Portfolio; 162,252 shares (cost $4,757,662) .............................. 5,052,529
Overseas Portfolio; 28,255 shares (cost $494,386) .............................. 532,327
Fidelity Investments Variable Insurance Products Fund II:
Asset Manager Portfolio; 83,295 shares (cost $1,275,209) ........................ 1,410,186
Contrafund Portfolio; 417,373 shares (cost $6,180,807)........................... 6,911,690
Janus Aspen Series:
Aggressive Growth Portfolio; 529,766 shares (cost $9,413,853) .................. 9,662,927
Balanced Portfolio; 242,000 shares (cost $3,331,182) ........................... 3,574,345
Growth Portfolio; 462,582 shares (cost $6,608,169) .............................. 7,174,647
Short-Term Bond Portfolio; 383,937 shares (cost $3,801,075) ..................... 3,827,848
Worldwide Growth Portfolio; 510,038 shares (cost $9,042,860)..................... 9,915,136
Scudder Variable Life Investment Fund--
International Portfolio; 801,151 shares (cost $9,370,711)........................ 10,615,255
TCI Portfolios, Inc.--Growth Fund; 633,059 shares (cost $6,629,436)............... 6,482,525
-------------
NET ASSETS (cost $209,041,214) ................................................... $223,173,883
=============
Net assets represented by:
Policyholders' account values: (Notes 1 and 5)
Aetna Variable Fund:
Policyholders' account values ................................................... $ 92,871,626
Aetna Income Shares:
Policyholders' account values ................................................... 13,179,787
Aetna Variable Encore Fund:
Policyholders' account values ................................................... 9,092,185
Aetna Investment Advisers Fund, Inc.:
Policyholders' account values ................................................... 15,791,541
Aetna Ascent Variable Portfolio:
Policyholders' account values ................................................... 545,378
Aetna Crossroads Variable Portfolio:
Policyholders' account values ................................................... 123,692
</TABLE>

S-13
<PAGE>

Variable Life Account B

Statement of Assets and Liabilities--December 31, 1996 (continued):

<TABLE>
<S> <C>
Aetna Legacy Variable Portfolio:
Policyholders' account values .............................. $ 13,963
Alger American Small Capitalization Portfolio:
Policyholders' account values .............................. 13,086,083
Fidelity Investments Variable Insurance Products Fund:
Equity-Income Portfolio:
Policyholders' account values .............................. 13,310,213
Growth Portfolio:
Policyholders' account values .............................. 5,052,529
Overseas Portfolio:
Policyholders' account values .............................. 532,327
Fidelity Investments Variable Insurance Products Fund II:
Asset Manager Portfolio:
Policyholders' account values .............................. 1,410,186
Contrafund Portfolio:
Policyholders' account values .............................. 6,911,690
Janus Aspen Series:
Aggressive Growth Portfolio:
Policyholders' account values .............................. 9,662,927
Balanced Portfolio:
Policyholders' account values .............................. 3,574,345
Growth Portfolio:
Policyholders' account values .............................. 7,174,647
Short-Term Bond Portfolio:
Policyholders' account values .............................. 3,827,848
Worldwide Growth Portfolio:
Policyholders' account values .............................. 9,915,136
Scudder Variable Life Investment Fund--International Portfolio:
Policyholders' account values .............................. 10,615,255
TCI Portfolios, Inc.--Growth Fund:
Policyholders' account values .............................. 6,482,525
-------------
$223,173,883
=============
</TABLE>

See Notes to Financial Statements

S-14
<PAGE>

Variable Life Account B

Statements of Operations and Changes in Net Assets

<TABLE>
<CAPTION>
Year ended December 31,
-----------------------------------
1996 1995
---------------- ----------------
<S> <C> <C>
INVESTMENT INCOME:
Income: (Notes 1, 3 and 5)
Dividends ...................................................... $ 13,813,478 $ 12,965,237
Expenses: (Notes 2 and 5)
Valuation Period Deductions .................................... (1,905,137) (1,149,801)
------------- -------------
Net investment income ............................................. 11,908,341 11,815,436
------------- -------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on sales of investments: (Notes 1, 4 and 5)
Proceeds from sales ............................................. 29,656,908 28,828,178
Cost of investments sold ....................................... 26,434,292 25,993,679
------------- -------------
Net realized gain ............................................. 3,222,616 2,834,499
Net unrealized gain (loss) on investments: (Note 5)
Beginning of year ................................................ 4,391,574 (4,407,131)
End of year ...................................................... 14,132,669 4,391,574
------------- -------------
Net change in unrealized gain ................................. 9,741,095 8,798,705
------------- -------------
Net realized and unrealized gain on investments .................. 12,963,711 11,633,204
------------- -------------
Net increase in net assets resulting from operations ............ 24,872,052 23,448,640
------------- -------------
FROM UNIT TRANSACTIONS:
Variable life premium payments .................................... 101,416,302 44,310,537
Sales and administrative charges deducted by the Company ......... (3,032,151) (1,381,985)
Premiums allocated to the fixed account ........................... (3,127,437) (3,260,098)
------------- -------------
Net premiums allocated to the variable account .................. 95,256,714 39,668,454
Transfers to the Company for monthly deductions .................. (15,491,673) (11,297,188)
Redemptions by contract holders ................................. (4,154,465) (3,238,332)
Transfers on account of policy loans .............................. (3,783,533) (2,076,373)
Other ............................................................ (40,991) 41,863
------------- -------------
Net increase in net assets from unit transactions (Note 5) ...... 71,786,052 23,098,424
------------- -------------
Change in net assets ............................................. 96,658,104 46,547,064
NET ASSETS:
Beginning of year ................................................ 126,515,779 79,968,715
------------- -------------
End of year ...................................................... $ 223,173,883 $ 126,515,779
============= =============
</TABLE>

See Notes to Financial Statements

S-15
<PAGE>

Variable Life Account B

Condensed Financial Information--Year Ended December 31, 1996

<TABLE>
<CAPTION>
Value
Per Unit Increase (Decrease) Units
in Value of Outstanding Reserves
Beginning End of Accumulation at End at End
of Year Year Unit of Year of Year
----------- --------- --------------------- ------------- -----------------------
<S> <C> <C> <C> <C> <C>
Aetna Variable Fund:
Aetna Vest ........................ $28.351 $34.932 23.21% 1,517,474.5 $53,008,643
Aetna Vest II ..................... 15.831 19.507 23.21% 794,275.5 15,493,624
Aetna Vest Plus .................. 13.301 16.389 23.21% 1,323,444.4 21,689,765
Aetna Vest Estate Protector ...... 10.000 11.675 16.75%(2) 11,748.7 137,170
Corporate Specialty Market ......... 12.016 14.805 23.21% 171,723.7 2,542,424
Aetna Income Shares:
Aetna Vest ........................ $21.305 $21.850 2.56% 279,436.3 $ 6,105,721
Aetna Vest II ..................... 14.324 14.691 2.56% 67,932.7 997,974
Aetna Vest Plus .................. 11.470 11.764 2.56% 132,814.7 1,562,403
Aetna Vest Estate Protector ...... 10.000 10.452 4.52%(2) 17.0 177
Corporate Specialty Market ......... 11.071 11.354 2.56% 397,512.3 4,513,512
Aetna Variable Encore Fund:
Aetna Vest ........................ $15.891 $16.577 4.32% 165,067.7 $ 2,736,269
Aetna Vest II ..................... 11.616 12.117 4.32% 17,257.4 209,105
Aetna Vest Plus .................. 10.917 11.388 4.32% 277,635.4 3,161,633
Aetna Vest Estate Protector ...... 10.000 10.333 3.33%(2) 55,176.3 570,162
Corporate Specialty Market ......... 10.444 10.895 4.32% 221,672.3 2,415,016
Aetna Investment Advisers Fund, Inc.:
Aetna Vest ........................ $15.390 $17.547 14.02% 106,202.5 $ 1,863,538
Aetna Vest II ..................... 15.561 17.742 14.02% 228,951.9 4,062,177
Aetna Vest Plus .................. 13.050 14.880 14.02% 393,635.7 5,857,138
Corporate Specialty Market ......... 11.361 12.954 14.02% 309,462.5 4,008,688
Aetna Ascent Variable Portfolio:
Aetna Vest ........................ $10.000 $11.828 18.28%(2) 3,460.3 $ 40,930
Aetna Vest II ..................... 10.000 11.828 18.28%(2) 2,054.0 24,295
Aetna Vest Plus .................. 10.000 11.828 18.28%(2) 40,593.4 480,153
Aetna Crossroads Variable Portfolio:
Aetna Vest ........................ $10.000 $11.474 14.74%(2) 99.8 $ 1,145
Aetna Vest Plus .................. 10.000 11.474 14.74%(2) 10,665.0 122,368
Aetna Vest Estate Protector ...... 10.000 11.487 14.87%(2) 15.6 179
Aetna Legacy Variable Portfolio:
Aetna Vest Plus .................. $10.000 $11.118 11.18%(2) 1,255.9 $ 13,963
Alger American Small
Capitalization Portfolio:
Aetna Vest ........................ $15.562 $16.051 3.14% 77,047.6 $ 1,236,667
Aetna Vest II ..................... 15.563 16.052 3.14% 52,282.1 839,239
Aetna Vest Plus .................. 15.555 16.043 3.14% 381,746.1 6,124,522
Aetna Vest Estate Protector ...... 10.000 9.982 (0.18%)(2) 21,147.3 211,085
Corporate Specialty Market ......... 12.799 13.201 3.14% 354,114.8 4,674,570
</TABLE>

S-16
<PAGE>

Variable Life Account B

Condensed Financial Information--Year Ended December 31, 1996 (continued):

<TABLE>
<CAPTION>
Value
Per Unit Increase (Decrease) Units
in Value of Outstanding Reserves
Beginning End of Accumulation at End at End
of Year Year Unit of Year of Year
----------- --------- --------------------- ------------- ------------------------
<S> <C> <C> <C> <C> <C>
Fidelity Investments Variable
Insurance Products Fund:
Equity-Income Portfolio:
Aetna Vest ........................ $10.000 $10.871 8.71%(2) 6,532.8 $ 71,015
Aetna Vest II ..................... 10.000 10.871 8.71%(2) 2,200.1 23,916
Aetna Vest Plus .................. 10.000 10.871 8.71%(2) 118,798.4 1,291,404
Aetna Vest Estate Protector ...... 10.000 10.883 8.83%(2) 10,991.4 119,619
Corporate Specialty Market ...... 11.058 12.512 13.14% 943,466.6 11,804,259
Growth Portfolio:
Corporate Specialty Market ...... $ 9.911 $11.255 13.56% 448,921.8 $ 5,052,529
Overseas Portfolio:
Corporate Specialty Market ...... $10.029 $11.241 12.09% 47,354.8 $ 532,327
Fidelity Investments Variable
Insurance Products Fund II:
Asset Manager Portfolio:
Corporate Specialty Market ...... $10.596 $12.022 13.46% 117,298.4 $ 1,410,186
Contrafund Portfolio:
Aetna Vest ........................ $10.000 $11.525 15.25%(2) 17,996.4 $ 207,415
Aetna Vest II ..................... 10.000 11.525 15.25%(2) 3,659.1 42,173
Aetna Vest Plus .................. 10.000 11.525 15.25%(2) 80,966.3 933,168
Aetna Vest Estate Protector ...... 10.000 11.538 15.38%(2) 10,537.3 121,585
Corporate Specialty Market ...... 10.322 12.396 20.10% 452,333.3 5,607,349
Janus Aspen Series:
Aggressive Growth Portfolio:
Aetna Vest ........................ $15.114 $16.153 6.87% 55,921.6 $ 903,288
Aetna Vest II ..................... 15.114 16.153 6.87% 35,775.8 577,877
Aetna Vest Plus .................. 15.114 16.153 6.87% 221,641.2 3,580,130
Aetna Vest Estate Protector ...... 10.000 9.797 (2.03%)(2) 15,306.0 149,948
Corporate Specialty Market ...... 11.340 12.120 6.87% 367,315.7 4,451,684
Balanced Portfolio:
Aetna Vest ........................ $12.142 $13.966 15.02% 6,502.2 $ 90,808
Aetna Vest II ..................... 12.237 14.075 15.02% 4,206.4 59,204
Aetna Vest Plus .................. 12.136 13.960 15.02% 124,211.8 1,733,938
Aetna Vest Estate Protector ...... 10.000 11.101 11.01%(2) 3,134.9 34,800
Corporate Specialty Market ...... 10.643 12.242 15.02% 135,240.2 1,655,595
Growth Portfolio:
Aetna Vest ........................ $12.704 $14.898 17.27% 30,969.1 $ 461,370
Aetna Vest II ..................... 12.692 14.884 17.27% 65,830.7 979,838
Aetna Vest Plus .................. 12.674 14.863 17.27% 234,144.3 3,480,132
Aetna Vest Estate Protector ...... 10.000 10.857 8.57%(2) 1,608.1 17,459
Corporate Specialty Market ...... 10.430 12.232 17.27% 182,790.8 2,235,848
</TABLE>

S-17
<PAGE>

Variable Life Account B

Condensed Financial Information--Year Ended December 31, 1996 (continued):

Notes to Condensed Financial Information:

(1)--Reflects less than a full year of performance activity. Funds were first
received in this option during February 1996.
(2)--Available for investment less than 1 year, contract commenced operations
during March 1996.
(3)--Reflects less than a full year of performance activity. Funds were first
received in this option during March 1996.

See Notes to Financial Statements

S-18
<PAGE>

Variable Life Account B

Notes to Financial Statements--December 31, 1996

1. Summary of Significant Accounting Policies

a. Valuation of Investments

Investments in the following Funds are stated at the closing net asset
value per share as determined by each fund on December 31, 1996:

Aetna Variable Fund Janus Aspen Series:
Aetna Income Shares [bullet] Aggressive Growth
Portfolio
Aetna Variable Encore Fund [bullet] Balanced Portfolio
Aetna Investment Advisers Fund, Inc. [bullet] Growth Portfolio
Aetna Ascent Variable Portfolio [bullet] Short-Term Bond
Portfolio
Aetna Crossroads Variable Portfolio [bullet] Worldwide Growth
Portfolio
Aetna Legacy Variable Portfolio Scudder Variable Life Investment Fund--
International Portfolio
Alger American Small Capitalization TCI Portfolios, Inc.--Growth Fund
Portfolio
Fidelity Investments Variable Insurance
Products Fund:

[bullet] Equity-Income Portfolio
[bullet] Growth Portfolio
[bullet] Overseas Portfolio
Fidelity Investments Variable Insurance Products Fund II:
[bullet] Asset Manager Portfolio
[bullet] Contrafund Portfolio

b. Other

Investment transactions are accounted for on a trade date basis and
dividend income is recorded on the ex-dividend date. The cost of
investments sold is determined by specific identification.

c. Federal Income Taxes

2. Valuation Period Deductions

Deductions by the Account for mortality and expense risk charges are made
in accordance with the terms of the policies and are paid to the Company.

S-19
<PAGE>

Variable Life Account B

Notes to Financial Statements--December 31, 1996 (continued):

3. Dividend Income

4. Purchases and Sales of Investments

The cost of purchases and proceeds from sales of investments other than
short-term investments for the years ended December 31, 1996 and December
31, 1995 aggregated $113,349,117 and $29,656,908 and $71,231,087 and
$28,828,178, respectively.

S-20
<PAGE>

Variable Life Account B

Notes to Financial Statements--December 31, 1996 (continued):

5. Supplemental Information to Statements of Operations and Changes in Net
Assets--Year Ended December 31, 1996

<TABLE>
<CAPTION>
Valuation Proceeds Cost of Net
Period from Invesments Realized
Dividends Deductions Sales Sold Gain (Loss)
------------- --------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Aetna Variable Fund:
PolicyHolder's account values ........................... $ 9,712,578 ($ 991,737) $ 5,373,083 $ 4,466,494 $ 906,589
Aetna Income Shares:
PolicyHolder's account values ........................... 810,294 (121,325) 1,564,483 1,544,041 20,442
Aetna Variable Encore Fund:
PolicyHolder's account values ........................... 477,308 (71,555) 9,490,775 9,560,169 (69,394)
Aetna Investment Advisers Fund, Inc.:
PolicyHolder's account values ........................... 1,201,085 (127,990) 1,717,127 1,435,761 281,366
Aetna Ascent Variable Portfolio:
PolicyHolder's account values ........................... 18,222 (1,210) 127,981 124,671 3,310
Aetna Crossroads Variable Portfolio:
PolicyHolder's account values ........................... 2,462 (91) 1,317 1,263 54
Aetna Legacy Variable Portfolio:
PolicyHolder's account values ........................... 671 (36) 503 486 17
Alger American Small Capitalization Portfolio:
PolicyHolder's account values ........................... 33,925 (93,143) 2,003,029 1,400,608 602,421
Fidelity Investments Variable Insurance Products Fund:
Equity-Income Portfolio:
PolicyHolder's account values ........................... 19,619 (57,181) 625,427 574,716 50,711
Growth Portfolio:
PolicyHolder's account values ........................... 85,627 (30,149) 243,345 245,938 (2,593)
Overseas Portfolio:
PolicyHolder's account values ........................... 14,172 (4,004) 478,644 450,003 28,641
Fidelity Investments Variable Insurance Products Fund II:
Asset Manager Portfolio:
PolicyHolder's account values ........................... 62,788 (13,383) 981,022 966,124 14,898
Contrafund Portfolio:
PolicyHolder's account values ........................... 10,199 (36,829) 353,531 314,886 38,645
Janus Aspen Series:
Aggressive Growth Portfolio:
PolicyHolder's account values ........................... 79,809 (68,571) 1,171,119 858,482 312,637
Balanced Portfolio:
PolicyHolder's account values ........................... 70,301 (23,444) 452,062 367,517 84,545
Growth Portfolio:
PolicyHolder's account values ........................... 140,964 (46,593) 808,709 590,651 218,058
Short-Term Bond Portfolio:
PolicyHolder's account values ........................... 84,482 (17,596) 424,360 415,377 8,983
Worldwide Growth Portfolio:
PolicyHolder's account values ........................... 105,214 (49,874) 1,127,422 777,300 350,122
Scudder Variable Life Investment Fund - ...............
International Portfolio:
PolicyHolder's account values ........................... 173,534 (85,922) 1,752,475 1,537,715 214,760
TCI Portfolios, Inc.--Growth Fund:
PolicyHolder's account values ........................... $ 710,224 (64,504) 960,494 802,090 158,404
------------ ----------- ------------ ------------ ----------
Total Variable Life Account B ........................... $13,813,478 ($1,905,137) $29,656,908 $26,434,292 $3,222,616
============ =========== ============ ============ ==========
</TABLE>

S-21
<PAGE>

<TABLE>
<CAPTION>
Net Increase
Net Unrealized Net (Decrease) In
Gain (Loss) Change in Net Assets Net Assets
Beginning End Unrealized from Unit Beginning End
of Year of Year Gain (Loss) Transactions of Year of Year
- -------------- --------------- -------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
$ 65,391 $ 7,294,643 $ 7,229,252 $ 5,056,913 $ 70,958,031 $ 92,871,626
189,278 (190,180) (379,458) 2,798,667 10,051,167 13,179,787
138,935 106,394 (32,541) 3,268,179 5,520,188 9,092,185
1,031,584 1,383,931 352,347 4,815,033 9,269,700 15,791,541
0 15,645 15,645 509,411 0 545,378
0 (191) (191) 121,458 0 123,692
0 20 20 13,291 0 13,963
595,950 172,057 (423,893) 7,688,994 5,277,779 13,086,083
28,202 1,096,283 1,068,081 11,810,807 418,176 13,310,213
(36,211) 294,867 331,078 3,470,007 1,198,559 5,052,529
21,923 37,941 16,018 (102,302) 579,802 532,327
47,435 134,978 87,543 298,650 959,690 1,410,186
10,253 730,883 720,630 5,090,135 1,088,910 6,911,690
376,606 249,074 (127,532) 5,949,433 3,517,151 9,662,927
60,589 243,163 182,574 2,648,699 611,670 3,574,345
196,848 566,478 369,630 3,974,072 2,518,516 7,174,647
6,078 26,773 20,695 3,383,696 347,588 3,827,848
227,523 872,277 644,754 7,436,957 1,427,963 9,915,136
431,463 1,244,544 813,081 2,808,258 6,691,544 10,615,255
999,727 (146,911) (1,146,638) 745,694 6,079,345 6,482,525
---------- ----------- ------------ ----------- ------------- -------------
$4,391,574 $14,132,669 $ 9,741,095 $71,786,052 $126,515,779 $223,173,883
========== =========== ============ =========== ============= =============
</TABLE>

S-22

<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Consolidated Financial Statements

<TABLE>
<CAPTION>
Page
<S> <C>
Consolidated Statements of Income for the three months ended March 31, 1997 and 1996
(unaudited) .......................................................................... F-2
Consolidated Balance Sheets as of March 31, 1997 (unaudited) and December 31, 1996 ...... F-3
Consolidated Statements of Changes in Shareholder's Equity for the three months ended
March 31, 1997 and 1996 (unaudited) .................................................. F-4
Consolidated Statements of Cash Flows for the three months ended March 31, 1997 and 1996
(unaudited) ........................................................................... F-5
Condensed Notes to Consolidated Financial Statements as of March 31, 1997 (unaudited) ... F-7
Independent Auditors' Report ............................................................ F-9
Consolidated Financial Statements:
Consolidated Statements of Income for the Years Ended December 31, 1996, 1995 and 1994 F-10
Consolidated Balance Sheets as of December 31, 1996 and 1995 ........................... F-11
Consolidated Statements of Changes in Shareholder's Equity for the Years Ended
December 31, 1996, 1995 and 1994 ..................................................... F-12
Consolidated Statements of Cash Flows for the Years Ended December 31, 1996, 1995
and 1994 ............................................................................... F-13
Notes to Consolidated Financial Statements ............................................. F-15
</TABLE>

F-1
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Consolidated Statements of Income
(millions)

<TABLE>
<CAPTION>
(unaudited)
3 Months Ended
March 31,
---------------------
1997 1996
-------- ----------
<S> <C> <C>
Revenue:
Premiums $ 52.3 $34.0
Charges assessed against policyholders 109.7 92.0
Net investment income 267.8 257.6
Net realized capital gains 5.0 14.9
Other income 9.7 12.2
------- -------
Total revenue 444.5 410.7
Benefits and expenses:
Current and future benefits 272.0 236.9
Operating expenses 78.2 87.2
Amortization of deferred policy acquisition costs 19.9 17.5
------- -------
Total benefits and expenses 370.1 341.6
Income before income taxes 74.4 69.1
Income taxes 24.0 20.6
------- -------
Net income $ 50.4 $48.5
======= =======
</TABLE>

See Condensed Notes to Consolidated Financial Statements.

F-2
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Consolidated Balance Sheets
(millions, except share data)

<TABLE>
<CAPTION>
(unaudited)
-----------
March 31, December 31,
Assets 1997 1996
- ------ ------------ -------------
<S> <C> <C>
Investments:
Debt securities, available for sale, at fair value
(amortized cost: $12,378.5 and $12,539.1) $12,428.6 $12,905.5
Equity securities, available for sale:
Non-redeemable preferred stock (cost: $141.3 and $107.6) 152.1 119.0
Investment in affiliated mutual funds (cost: $64.2 and $77.3) 67.9 81.1
Common stock (cost: $0.0 and $0.0) 0.1 0.3
Short-term investments 45.5 34.8
Mortgage loans 12.9 13.0
Policy loans 408.4 399.3
---------- ----------
Total investments 13,115.5 13,553.0
Cash and cash equivalents 758.9 459.1
Accrued investment income 185.3 159.0
Premiums due and other receivables 32.6 26.6
Deferred policy acquisition costs 1,560.1 1,515.3
Reinsurance loan to affiliate 593.7 628.3
Other assets 32.6 33.7
Separate Accounts assets 16,460.1 15,318.3
---------- ----------
Total assets $32,738.8 $31,693.3
========== ==========
Liabilities and Shareholder's Equity
- -------------------------------------
Liabilities:
Future policy benefits $ 3,613.3 $ 3,617.0
Unpaid claims and claim expenses 37.4 28.9
Policyholders' funds left with the Company 10,529.2 10,663.7
---------- ----------
Total insurance reserve liabilities 14,179.9 14,309.6
Other liabilities 392.8 354.7
Income taxes:
Current 29.1 20.7
Deferred 62.1 80.5
Separate Accounts liabilities 16,460.1 15,318.3
---------- ----------
Total liabilities 31,124.0 30,083.8
---------- ----------
Shareholder's equity:
Common stock, par value $50 (100,000 shares authorized; 55,000
shares issued and outstanding) 2.8 2.8
Paid-in capital 418.0 418.0
Net unrealized capital gains 13.6 60.5
Retained earnings 1,180.4 1,128.2
---------- ----------
Total shareholder's equity 1,614.8 1,609.5
---------- ----------
Total liabilities and shareholder's equity $32,738.8 $31,693.3
========== ==========
</TABLE>

See Condensed Notes to Consolidated Financial Statements.

F-3
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Consolidated Statements of Changes in Shareholder's Equity
(millions)

<TABLE>
<CAPTION>
(unaudited)
-----------
3 Months Ended March 31,
-----------------------------
1997 1996
------------- -------------
<S> <C> <C>
Shareholder's equity, beginning of year $ 1,609.5 $1,583.0
Net change in unrealized capital gains (46.9) (75.9)
Net income 50.4 48.5
Other changes 1.8 -
--------- --------
Shareholder's equity, end of period $ 1,614.8 $1,555.6
========= ========
</TABLE>

See Condensed Notes to Consolidated Financial Statements.

F-4
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Consolidated Statements of Cash Flows
(millions)

<TABLE>
<CAPTION>
(unaudited)
-----------
3 Months Ended March 31,
------------------------------
1997 1996
------------ ---------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 50.4 $ 48.5
Adjustments to reconcile net income to net cash
provided by (used for) operating activities:
Increase in accrued investment income (26.3) (10.9)
(Increase) decrease in premiums due and other receivables (3.2) 0.5
Increase in policy loans (9.1) (6.0)
Increase in deferred policy acquisition costs (44.8) (34.3)
Decrease in reinsurance loan to affiliate 34.6 9.5
Net increase in universal life account balances 63.6 53.0
Decrease in other insurance reserve liabilities (22.0) (52.4)
Net decrease in other liabilities and other assets (4.9) (85.3)
Increase in income taxes 18.4 11.8
Net accretion of discount on investments (16.9) (16.9)
Net realized capital gains (5.0) (14.9)
---------- ---------
Net cash provided by (used for) operating activities 34.8 (97.4)
---------- ---------
Cash Flows from Investing Activities:
Proceeds from sales of:
Debt securities available for sale 1,380.4 1,634.8
Equity securities 14.8 48.7
Mortgage loans 0.1 --
Investment maturities and collections of:
Debt securities available for sale 227.4 255.4
Short-term investments 10.4 10.0
Cost of investment purchases in:
Debt securities available for sale (1,376.5) (1,918.0)
Equity securities (33.8) (26.1)
Short-term investments (21.1) (19.5)
---------- ---------
Net cash provided by (used for) investing activities 201.7 (14.7)
---------- ---------
</TABLE>

See Condensed Notes to Consolidated Financial Statements.

F-5
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Consolidated Statements of Cash Flows (Continued)
(millions)

<TABLE>
<CAPTION>
(unaudited)
-----------
3 Months Ended March 31,
------------------------------
1997 1996
------------ ---------------
<S> <C> <C>
Cash Flows from Financing Activities:
Deposits and interest credited for investment contracts 390.2 429.9
Withdrawals of investment contracts (326.9) (332.0)
------- -------
Net cash provided by financing activities 63.3 97.9
------- -------
Net increase (decrease) in cash and cash equivalents 299.8 (14.2)
Cash and cash equivalents, beginning of period 459.1 568.8
------- -------
Cash and cash equivalents, end of period $ 758.9 $ 554.6
======= =======
Supplemental cash flow information:
Income taxes paid, net $ 9.4 $ 12.0
======= =======
</TABLE>

See Condensed Notes to Consolidated Financial Statements.

F-6
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Condensed Notes to Consolidated Financial Statements
(unaudited)

1. Basis of Presentation

The consolidated financial statements include Aetna Life Insurance and Annuity
Company and its wholly owned subsidiaries, Aetna Insurance Company of America
and Aetna Private Capital, Inc. (collectively, the "Company"). Aetna Life
Insurance and Annuity Company is a wholly owned subsidiary of Aetna Retirement
Holdings, Inc. ("HOLDCO"). HOLDCO is a wholly owned subsidiary of Aetna
Retirement Services, Inc., whose ultimate parent is Aetna Inc. ("Aetna").

These consolidated financial statements have been prepared in accordance with
generally accepted accounting principles and are unaudited. Certain
reclassifications have been made to 1996 financial information to conform to
the 1997 presentation. These interim statements necessarily rely heavily on
estimates, including assumptions as to annualized tax rates. In the opinion of
management, all adjustments necessary for a fair statement of results for the
interim periods have been made. All such adjustments are of a normal, recurring
nature. The accompanying condensed consolidated financial statements should be
read in conjunction with the consolidated financial statements and related
notes as presented in the Company's 1996 Annual Report on Form 10-K. Certain
financial information that is normally included in annual financial statements
prepared in accordance with generally accepted accounting principles, but that
is not required for interim reporting purposes, has been condensed or omitted.

2. Future Application of Accounting Standards

Financial Accounting Standard ("FAS") No. 125, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities, was issued in
June 1996 and provides accounting and reporting standards for transfers of
financial assets and extinguishments of liabilities.

FAS No. 125 is effective for 1997 financial statements; however, certain
provisions relating to accounting for repurchase agreements and securities
lending are not effective until January 1, 1998. Provisions effective in 1997
did not have a material effect on the Company's financial position or results
of operations. The Company does not expect adoption of this statement for
provisions effective in 1998 to have a material effect on its financial
position or results of operations.

3. Financial Instruments

The Company engages in hedging activities to manage interest rate and price
risks. Such hedging activities have principally consisted of using off-balance
sheet instruments such as futures and forward contracts and interest rate swap
agreements. There were no such contracts or agreements open as of March 31,
1997.

4. Severance and Facilities Charges

In the second quarter of 1996, the Company was allocated severance and
facilities reserves from Aetna to reflect actions taken or to be taken to
reduce the level of corporate expenses and other costs previously absorbed by
Aetna's property-casualty operations.

F-7
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Condensed Notes to Consolidated Financial Statements (Continued)
(unaudited)

4. Severance and Facilities Charges (Continued)

In the third quarter of 1996, the Company established severance and facilities
reserves in the Financial Services and Individual Life Insurance segments to
reflect actions taken or to be taken in order to make its businesses more
competitive.

Activity for the three months ended March 31, 1997 within the severance and
facilities reserves (pretax, in millions) and positions eliminated related to
such actions were as follows:

<TABLE>
<CAPTION>
Reserve Positions
---------- ----------
<S> <C> <C>
Balance at December 31, 1996 ...... $ 47.9 524
Actions taken (1) .................. (10.9) (88)
-------- -----
Balance at March 31, 1997 ......... $ 37.0 436
======== =====
</TABLE>

(1) Includes $6.3 million of the Company's severance-related actions and $3.9
million of corporate allocation-related actions.
The Company's severance actions are expected to be substantially completed by
March 31, 1998. The corporate allocation actions and vacating of certain leased
office space are expected to be substantially completed in 1997.

5. Related Party Transactions

Effective December 31, 1988, the Company entered into a reinsurance agreement
with Aetna Life Insurance Company ("Aetna Life") in which substantially all of
the non-participating individual life and annuity business written by Aetna
Life prior to 1981 was assumed by the Company. Effective January 1, 1997, this
agreement has been amended to transition (based on underlying investment
rollover in Aetna Life) from a modified coinsurance to a coinsurance
arrangement. As a result of this change, reserves will be ceded to the Company
from Aetna Life as investment rollover occurs and the loan previously
established will be reduced.

6. Litigation

The Company is involved in numerous lawsuits arising, for the most part, in the
ordinary course of its business operations. While the ultimate outcome of
litigation against the Company cannot be determined at this time, after
consideration of the defenses available to the Company and any related reserves
established, it is not expected to result in liability for amounts material to
the financial condition of the Company, although it may adversely affect
results of operations in future periods.

F-8
<PAGE>

Independent Auditors' Report

The Shareholder and Board of Directors
Aetna Life Insurance and Annuity Company:

We have audited the accompanying consolidated balance sheets of Aetna Life
Insurance and Annuity Company and Subsidiaries as of December 31, 1996 and
1995, and the related consolidated statements of income, changes in
shareholder's equity and cash flows for each of the years in the three-
year period ended December 31, 1996. These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Aetna Life
Insurance and Annuity Company and Subsidiaries as of December 31, 1996 and
1995, and the results of their operations and their cash flows for each of the
years in the three-year period ended December 31, 1996, in conformity with
generally accepted accounting principles.

/s/ KPMG Peat Marwick LLP

Hartford, Connecticut
February 4, 1997

F-9
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Consolidated Statements of Income
(millions)

<TABLE>
<CAPTION>
Years Ended December 31,
-------------------------------------------
1996 1995 1994
---------- -------------- -------------
<S> <C> <C> <C>
Revenue:
Premiums $ 133.6 $ 212.7 $ 191.6
Charges assessed against policyholders 396.5 318.9 279.0
Net investment income 1,045.6 1,004.3 917.2
Net realized capital gains 19.7 41.3 1.5
Other income 45.4 42.0 10.3
--------- -------- ---------
Total revenue 1,640.8 1,619.2 1,399.6
Benefits and expenses:
Current and future benefits 968.6 997.2 921.5
Operating expenses 342.2 310.8 225.7
Amortization of deferred policy acquisition costs 69.8 48.0 31.5
Severance and facilities charges 61.3 -- --
--------- -------- ---------
Total benefits and expenses 1,441.9 1,356.0 1,178.7
--------- -------- ---------
Income before income taxes 198.9 263.2 220.9
Income taxes 57.8 87.3 75.6
--------- -------- ---------
Net income $ 141.1 $ 175.9 $ 145.3
========= ======== =========
</TABLE>

See Notes to Consolidated Financial Statements.

F-10
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Consolidated Balance Sheets
(millions, except share data)

<TABLE>
<CAPTION>
December 31,
-----------------------
Assets 1996 1995
- ------ ---- ----
<S> <C> <C>
Investments:
Debt securities, available for sale:
(amortized cost: $12,539.1 and $11,923.7) $12,905.5 $12,720.8
Equity securities, available for sale:
Non-redeemable preferred stock (cost: $107.6 and $51.3) 119.0 57.6
Investment in affiliated mutual funds (cost: $77.3 and $173.4) 81.1 191.8
Common stock (cost: $0.0 and $6.9) 0.3 8.2
Short-term investments 34.8 15.1
Mortgage loans 13.0 21.2
Policy loans 399.3 338.6
---------- ---------
Total investments 13,553.0 13,353.3
Cash and cash equivalents 459.1 568.8
Accrued investment income 159.0 175.5
Premiums due and other receivables 26.6 37.3
Deferred policy acquisition costs 1,515.3 1,341.3
Reinsurance loan to affiliate 628.3 655.5
Other assets 33.7 26.2
Separate Accounts assets 15,318.3 10,987.0
---------- ---------
Total assets $31,693.3 $27,144.9
========== =========
Liabilities and Shareholder's Equity
- ------------------------------------
Liabilities:
Future policy benefits $ 3,617.0 $ 3,594.6
Unpaid claims and claim expenses 28.9 27.2
Policyholders' funds left with the Company 10,663.7 10,500.1
---------- ---------
Total insurance reserve liabilities 14,309.6 14,121.9
Other liabilities 354.7 257.2
Income taxes:
Current 20.7 26.2
Deferred 80.5 169.6
Separate Accounts liabilities 15,318.3 10,987.0
---------- ---------
Total liabilities 30,083.8 25,561.9
---------- ---------
Shareholder's equity:
Common stock, par value $50 (100,000 shares authorized; 55,000
shares issued and outstanding) 2.8 2.8
Paid-in capital 418.0 407.6
Net unrealized capital gains 60.5 132.5
Retained earnings 1,128.2 1,040.1
---------- ---------
Total shareholder's equity 1,609.5 1,583.0
---------- ---------
Total liabilities and shareholder's equity $31,693.3 $27,144.9
========== =========
</TABLE>

See Notes to Consolidated Financial Statements.

F-11
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Consolidated Statements of Changes in Shareholder's Equity
(millions)

<TABLE>
<CAPTION>
Years Ended December 31,
---------------------------------------
1996 1995 1994
----------- ------------ ----------
<S> <C> <C> <C>
Shareholder's equity, beginning of year $1,583.0 $1,088.5 $1,246.7
Capital contributions 10.4 -- --
Net change in unrealized capital gains (losses) (72.0) 321.5 (303.5)
Net income 141.1 175.9 145.3
Other changes (49.5) -- --
Common stock dividends declared (3.5) (2.9) --
-------- -------- --------
Shareholder's equity, end of year $1,609.5 $1,583.0 $1,088.5
======== ======== ========
</TABLE>

See Notes to Consolidated Financial Statements.

F-12
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Consolidated Statements of Cash Flows
(millions)

<TABLE>
<CAPTION>
Years Ended December 31,
--------------------------------------
1996 1995 1994
---------- ----------- ------------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net income $ 141.1 $ 175.9 $ 145.3
Adjustments to reconcile net income to net cash
(used for) provided by operating activities:
Decrease (increase) in accrued investment income 16.5 (33.3) (17.5)
Decrease in premiums due and other receivables 1.6 25.4 1.3
Increase in policy loans (60.7) (89.9) (46.0)
Increase in deferred policy acquisition costs (174.0) (177.0) (105.9)
Decrease in reinsurance loan to affiliate 27.2 34.8 27.8
Net increase in universal life account balances 243.2 393.4 164.7
(Decrease) increase in other insurance reserve liabilities (211.5) 79.0 75.1
Net increase in other liabilities and other assets 3.1 13.0 52.5
Decrease in income taxes (26.7) (4.5) (10.3)
Net accretion of discount on investments (68.0) (66.4) (77.9)
Net realized capital gains (19.7) (41.3) (1.5)
Other, net 1.1 -- (1.0)
---------- ---------- ---------
Net cash (used for) provided by operating activities (126.8) 309.1 206.6
---------- ---------- ---------
Cash Flows from Investing Activities:
Proceeds from sales of:
Debt securities available for sale 5,182.2 4,207.2 3,593.8
Equity securities 190.5 180.8 93.1
Mortgage loans 8.7 10.7 --
Limited partnership -- 26.6 --
Investment maturities and collections of:
Debt securities available for sale 885.2 583.9 1,289.2
Short-term investments 35.0 106.1 30.4
Cost of investment purchases in:
Debt securities available for sale (6,534.3) (6,034.0) (5,621.4)
Equity securities (118.1) (170.9) (162.5)
Short-term investments (54.7) (24.7) (106.1)
Mortgage loans -- (21.3) --
Limited partnership -- -- (25.0)
Other, net (17.6) -- --
---------- ---------- ---------
Net cash used for investing activities (423.1) (1,135.6) (908.5)
---------- ---------- ---------
</TABLE>

See Notes to Consolidated Financial Statements.

F-13
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Consolidated Statements of Cash Flows (Continued)
(millions)

<TABLE>
<CAPTION>
Years Ended December 31,
-----------------------------------------
1996 1995 1994
---------- ------------ -------------
<S> <C> <C> <C>
Cash Flows from Financing Activities:
Deposits and interest credited for investment contracts 1,579.5 1,884.5 1,737.8
Withdrawals of investment contracts (1,146.2) (1,109.6) (948.7)
Additional capital contributions 10.4 -- --
Dividends paid to shareholder (3.5) (2.9) --
--------- --------- --------
Net cash provided by financing activities 440.2 772.0 789.1
--------- --------- --------
Net (decrease) increase in cash and cash equivalents (109.7) (54.5) 87.2
Cash and cash equivalents, beginning of year 568.8 623.3 536.1
--------- --------- --------
Cash and cash equivalents, end of year $ 459.1 $ 568.8 $ 623.3
========= ========= ========
Supplemental cash flow information:
Income taxes paid, net $ 85.5 $ 92.8 $ 85.9
========= ========= ========
</TABLE>

See Notes to Consolidated Financial Statements.

F-14
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Notes to Consolidated Financial Statements

1. Summary of Significant Accounting Policies

Aetna Life Insurance and Annuity Company and its wholly owned subsidiaries
(collectively, the "Company") is a provider of financial services and life
insurance products in the United States. The Company has two business segments:
financial services and individual life insurance.

Financial services products include annuity contracts that offer a variety of
funding and payout options for individual and employer-sponsored retirement
plans qualified under Internal Revenue Code Sections 401, 403, 408 and 457, and
non-qualified annuity contracts. These contracts may be deferred or immediate
("payout annuities"). Financial services also include investment advisory
services, financial planning and pension plan administrative services.

Individual life insurance products include universal life, variable universal
life, traditional whole life and term insurance.

Basis of Presentation

The consolidated financial statements include Aetna Life Insurance and Annuity
Company and its wholly owned subsidiaries, Aetna Insurance Company of America
and Aetna Private Capital, Inc. Aetna Life Insurance and Annuity Company is a
wholly owned subsidiary of Aetna Retirement Holdings, Inc. ("HOLDCO"). HOLDCO
is a wholly owned subsidiary of Aetna Retirement Services, Inc., whose ultimate
parent is Aetna Inc. ("Aetna").

The consolidated financial statements have been prepared in accordance with
generally accepted accounting principles. Certain reclassifications have been
made to 1995 and 1994 financial information to conform to the 1996
presentation.

Future Application of Accounting Standards

Financial Accounting Standard ("FAS") No. 125 , Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities, was issued in
June 1996. This statement provides accounting and reporting standards for
transfers of financial assets and extinguishments of liabilities. Transactions
covered by this statement would include securitizations, sales of partial
interests in assets, repurchase agreements and securities lending. This
statement requires that after a transfer of financial assets, an entity would
recognize any assets it controls and liabilities it has incurred. An entity
would not recognize assets when control has been surrendered or liabilities
have been satisfied. Portions of this statement are effective for each of 1997
and 1998 financial statements and early adoption is not permitted. The Company
does not expect adoption of this statement to have a material effect on its
financial position or results of operations.

Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from reported results using those estimates.

F-15
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Notes to Consolidated Financial Statements (Continued)

1. Summary of Significant Accounting Policies (Continued)

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, money market instruments and
other debt issues with a maturity of 90 days or less when purchased.

Investments

All of the Company's debt and equity securities are classified as available for
sale and carried at fair value. These securities are written down (as realized
capital losses) for other than temporary declines in value. Unrealized capital
gains and losses related to available for sale investments, other than amounts
allocable to experience rated contractholders, are reflected in shareholder's
equity, net of related taxes.

Fair values for debt and equity securities are based on quoted market prices or
dealer quotations. Where quoted market prices or dealer quotations are not
available, fair values are measured utilizing quoted market prices for similar
securities or by using discounted cash flow methods. Cost for mortgage-backed
securities is adjusted for unamortized premiums and discounts, which are
amortized using the interest method over the estimated remaining term of the
securities, adjusted for anticipated prepayments.

Purchases and sales of debt and equity securities are recorded on the trade
date.

The investment in affiliated mutual funds primarily represents an investment in
the Aetna Series Fund, Inc., a retail mutual fund which has been seeded by the
Company, and is carried at fair value.

Mortgage loans and policy loans are carried at unpaid principal balances, net
of impairment reserves. Sales of mortgage loans are recorded on the closing
date.

Short-term investments, consisting primarily of money market instruments and
other debt issues purchased with a maturity of 91 days to one year, are
considered available for sale and are carried at fair value, which approximates
amortized cost.

Futures contracts are carried at fair value and require daily cash settlement.
Changes in the fair value of futures contracts that qualify as hedges are
deferred and recognized as an adjustment to the hedged asset or liability.
Deferred gains or losses on such futures contracts are amortized over the life
of the acquired asset or liability as a yield adjustment or through net
realized capital gains or losses upon disposal of an asset. Changes in the fair
value of futures contracts that do not qualify as hedges are recorded in net
realized capital gains or losses. Hedge designation requires specific asset or
liability identification, a probability at inception of high correlation with
the position underlying the hedge, and that high correlation be maintained
throughout the hedge period. If a hedging instrument ceases to be highly
correlated with the position underlying the hedge, hedge accounting ceases at
that date and excess gains and losses on the hedging instrument are reflected
in net realized capital gains or losses.

F-16
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Notes to Consolidated Financial Statements (Continued)

1. Summary of Significant Accounting Policies (Continued)

Swap agreements which are designated as interest rate risk management
instruments at inception are accounted for using the accrual method.
Accordingly, the difference between amounts paid and received on such
agreements is reported in net investment income. There is no recognition in the
Consolidated Balance Sheets for changes in the fair value of the agreement.

Deferred Policy Acquisition Costs

Certain costs of acquiring insurance business are deferred. These costs, all of
which vary with and are primarily related to the production of new and renewal
business, consist principally of commissions, certain expenses of underwriting
and issuing contracts, and certain agency expenses. For fixed ordinary life
contracts, such costs are amortized over expected premium-paying periods (up to
20 years). For universal life and certain annuity contracts, such costs are
amortized in proportion to estimated gross profits and adjusted to reflect
actual gross profits over the life of the contracts (up to 20 years).

Deferred policy acquisition costs are written off to the extent that it is
determined that future policy premiums and investment income or gross profits
are not adequate to cover related losses and expenses.

Insurance Reserve Liabilities

Future Policy Benefits include reserves for universal life, immediate annuities
with life contingent payouts and traditional life insurance contracts. Reserves
for universal life contracts are equal to cumulative deposits less charges and
withdrawals plus credited interest thereon. Reserves for immediate annuities
with life contingent payouts and traditional life insurance contracts are
computed on the basis of assumed investment yield, mortality, and expenses,
including a margin for adverse deviations. Such assumptions generally vary by
plan, year of issue and policy duration. Reserve interest rates range from
2.25% to 12.00%. Investment yield is based on the Company's experience.
Mortality and withdrawal rate assumptions are based on relevant Aetna
experience and are periodically reviewed against both industry standards and
experience.

Policyholders' Funds Left With the Company include reserves for deferred
annuity investment contracts and immediate annuities without life contingent
payouts. Reserves on such contracts are equal to cumulative deposits less
charges and withdrawals plus credited interest thereon (rates range from 4.00%
to 7.00%), net of adjustments for investment experience that the Company is
entitled to reflect in future credited interest. Reserves on contracts subject
to experience rating reflect the rights of contractholders, plan participants
and the Company.

Unpaid claims for all lines of insurance include benefits for reported losses
and estimates of benefits for losses incurred but not reported.

Premiums, Charges Assessed Against Policyholders, Benefits and Expenses

For universal life and certain annuity contracts, charges assessed against
policyholders' funds for the cost of insurance, surrender charges, actuarial
margin and other fees are recorded as revenue in

F-17
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Notes to Consolidated Financial Statements (Continued)

1. Summary of Significant Accounting Policies (Continued)

charges assessed against policyholders. Other amounts received for these
contracts are reflected as deposits and are not recorded as revenue. Life
insurance premiums, other than premiums for universal life and certain annuity
contracts, are recorded as premium revenue when due. Related policy benefits
are recorded in relation to the associated premiums or gross profit so that
profits are recognized over the expected lives of the contracts. When annuity
payments begin under contracts with life contingent payouts that were initially
investment contracts, the accumulated balance in the account is treated as a
single premium for the purchase of an annuity, reflected as an offsetting
amount in both premiums and current and future benefits in the Consolidated
Statements of Income.

Separate Accounts

Assets held under variable universal life and variable annuity contracts are
segregated in Separate Accounts and are invested, as designated by the
contractholder or participant under a contract, in shares of Aetna Variable
Fund, Aetna Income Shares, Aetna Variable Encore Fund, Aetna Investment
Advisers Fund, Inc., Aetna GET Fund, the Aetna Series Fund Inc., or the Aetna
Generation Funds (collectively, "Funds"), which are managed by the Company, or
other selected mutual funds not managed by the Company.

Separate Accounts assets and liabilities are carried at fair value except for
those relating to a guaranteed interest option. Since the Company bears the
investment risk where the contract is held to maturity, the assets of the
Separate Account supporting the guaranteed interest option are carried at an
amortized cost of $515.6 million for 1996 (fair value $523.0 million) and
$322.2 million for 1995 (fair value $343.9 million). Reserves relating to the
guaranteed interest option are maintained at fund value and reflect interest
credited at rates ranging from 4.10% to 8.00% in 1996 and 4.50% to 8.38% in
1995.

Separate Accounts assets and liabilities are shown as separate captions in the
Consolidated Balance Sheets. Deposits, investment income and net realized and
unrealized capital gains and losses of the Separate Accounts are not reflected
in the Consolidated Statements of Income (with the exception of realized
capital gains and losses on the sale of assets supporting the guaranteed
interest option). The Consolidated Statements of Cash Flows do not reflect
investment activity of the Separate Accounts.

Income Taxes

The Company is included in the consolidated federal income tax return of Aetna.
The Company is taxed at regular corporate rates after adjusting income reported
for financial statement purposes for certain items. Deferred income tax
expenses/benefits result from changes during the year in cumulative temporary
differences between the tax basis and book basis of assets and liabilities.

F-18
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements (Continued)

2. Investments

Debt securities available for sale as of December 31, 1996 were as follows:

<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ------------ ------------ ----------
(millions)
<S> <C> <C> <C> <C>
U.S. government and government agencies and
authorities $ 1,072.4 $ 20.5 $ 4.5 $ 1,088.4
States, municipalities and political subdivisions 6.0 1.2 -- 7.2
U.S. corporate securities:
Financial 2,143.4 43.1 9.7 2,176.8
Food & fiber 198.2 4.6 1.3 201.5
Healthcare & consumer products 735.9 20.2 6.3 749.8
Media & broadcast 274.9 7.0 2.8 279.1
Natural resources 187.7 4.5 0.4 191.8
Transportation & capital goods 521.9 22.0 1.8 542.1
Utilities 448.8 14.8 2.8 460.8
Other 141.5 3.0 -- 144.5
--------- ------- ------ ----------
Total U.S. corporate securities 4,652.3 119.2 25.1 4,746.4
Foreign Securities:
Government 758.6 36.0 5.7 788.9
Utilities 187.8 16.1 -- 203.9
Other 945.5 30.9 6.3 970.1
--------- ------- ------ ----------
Total foreign securities 1,891.9 83.0 12.0 1,962.9
Residential mortgage-backed securities:
Pass-throughs 792.2 78.3 3.1 867.4
Collateralized mortgage obligations 2,227.8 94.9 13.7 2,309.0
--------- ------- ------ ----------
Total residential mortgage-backed securities 3,020.0 173.2 16.8 3,176.4
Commercial/Multifamily mortgage-backed securities 1,008.7 24.8 5.6 1,027.9
Other asset-backed securities 887.8 10.7 2.2 896.3
--------- ------- ------ ----------
Total Debt Securities $12,539.1 $432.6 $66.2 $12,905.5
========= ======= ====== ==========
</TABLE>

F-19
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements (Continued)

2. Investments (Continued)

Debt securities available for sale as of December 31, 1995 were as follows:

<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
----------- ------------ ------------ -----------
(millions)
<S> <C> <C> <C> <C>
U.S. government and government agencies and
authorities $ 539.5 $ 47.5 $ -- $ 587.0
States, municipalities and political subdivisions 41.4 12.4 -- 53.8
U.S. Corporate securities:
Financial 2,764.4 110.3 2.1 2,872.6
Food & fiber 310.8 20.8 0.6 331.0
Healthcare & consumer products 766.0 59.2 0.2 825.0
Media & broadcast 191.7 10.0 -- 201.7
Natural resources 186.9 12.6 0.2 199.3
Transportation & capital goods 602.4 46.7 0.2 648.9
Utilities 454.4 27.8 1.0 481.2
Other 119.9 10.2 -- 130.1
---------- ------- ------ -----------
Total U.S. corporate securities 5,396.5 297.6 4.3 5,689.8
Foreign securities:
Government 316.4 26.1 2.0 340.5
Utilities 236.3 32.9 269.2
Other 749.9 60.5 3.5 806.9
---------- ------- ------ -----------
Total foreign securities 1,302.6 119.5 5.5 1,416.6
Residential mortgage-backed securities:
Pass-throughs 556.7 99.2 1.8 654.1
Collateralized mortgage obligations 2,383.9 167.6 2.2 2,549.3
---------- ------- ------ -----------
Total residential mortgage-backed securities 2,940.6 266.8 4.0 3,203.4
Commercial/multifamily mortgage-backed securities 741.9 32.3 0.2 774.0
Other asset-backed securities 961.2 35.5 0.5 996.2
---------- ------- ------ -----------
Total Debt Securities $11,923.7 $811.6 $14.5 $ 12,720.8
========== ======= ====== ===========
</TABLE>

At December 31, 1996 and 1995, net unrealized appreciation of $366.4 million
and $797.1 million, respectively, on available for sale debt securities
included $288.5 million and $619.1 million, respectively, related to experience
rated contracts, which were not reflected in shareholder's equity but in Future
Policy Benefits and Policyholders' Funds Left With the Company.

F-20
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Notes to Consolidated Financial Statements (Continued)

2. Investments (Continued)

The amortized cost and fair value of debt securities for the year ended
December 31, 1996 are shown below by contractual maturity. Actual maturities
may differ from contractual maturities because securities may be restructured,
called, or prepaid.

<TABLE>
<CAPTION>
Amortized Fair
Cost Value
----------- ----------
(millions)
<S> <C> <C>
Due to mature:
One year or less ........................ $ 424.4 $ 425.7
After one year through five years ...... 2,162.4 2,194.2
After five years through ten years ...... 2,467.4 2,509.6
After ten years ........................ 2,568.4 2,675.4
Mortgage-backed securities ............... 4,028.7 4,204.3
Other asset-backed securities ............ 887.8 896.3
---------- ----------
Total ................................. $12,539.1 $12,905.5
========== ==========
</TABLE>

The Company engages in securities lending whereby certain securities from its
portfolio are loaned to other institutions for short periods of time.
Collateral, primarily cash, which is in excess of the market value of the
loaned securities, is deposited by the borrower with a lending agent, and
retained and invested by the lending agent to generate additional income for
the Company. The market value of the loaned securities is monitored on a daily
basis with additional collateral obtained or refunded as the market value
fluctuates. At December 31, 1996 and 1995, the Company had loaned securities
(which are reflected as invested assets) with a market value of approximately
$444.7 million and $264.5 million, respectively.

At December 31, 1996 and 1995, debt securities carried at $7.6 million and $7.4
million, respectively, were on deposit as required by regulatory authorities.

The carrying value of non-income producing investments was $0.9 million and
$0.1 million at December 31, 1996 and 1995, respectively.

The Company did not have any investments in a single issuer, other than
obligations of the U.S. government, with a carrying value in excess of 10% of
the Company's shareholder's equity at December 31, 1996.

Included in the Company's total debt securities were residential collateralized
mortgage obligations ("CMOs") supporting the following:

F-21
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements (Continued)

2. Investments (Continued)

<TABLE>
<CAPTION>
1996 1995
------------------------ -----------------------
Fair Amortized Fair Amortized
Value Cost Value Cost
---------- ----------- ---------- ----------
(millions)
<S> <C> <C> <C> <C>
Total residential CMOs (1) $2,309.0 $2,227.8 $2,549.4 $2,383.9
========= ========= ========= =========
Percentage of total:
Supporting experience rated products 84.2% 85.3%
Supporting remaining products 15.8% 14.7%
--------- ---------
100.0% 100.0%
========= =========
</TABLE>

(1) At December 31, 1996 and 1995, approximately 71% and 81%, respectively, of
the Company's residential CMO holdings were backed by government agencies
such as GNMA, FNMA, FHLMC.

There are various categories of CMOs which are subject to different degrees of
risk from changes in interest rates and, for nonagency-backed CMOs, defaults.
The principal risks inherent in holding CMOs are prepayment and extension risks
related to dramatic decreases and increases in interest rates resulting in the
repayment of principal from the underlying mortgages either earlier or later
than originally anticipated.

At December 31, 1996 and 1995, approximately 68% and 79%, respectively, of the
Company's CMO holdings were in planned amortization class ("PAC") and
sequential structure tranches, which are subject to less prepayment and
extension risk than other types of CMO instruments. At December 31, 1996 and
1995, approximately 3% of the Company's CMO holdings were in the interest-only
("IOs") and principal-only ("POs") tranches, which are subject to more
prepayment and extension risks than other types of CMO instruments. Remaining
CMO holdings are in other tranches that have prepayment and extension risks
which fall between the degree of risk associated with PACs and sequentials, and
IOs and POs.

Investments in available for sale equity securities were as follows:

<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
----------- ------------ ------------ --------
(millions)
<S> <C> <C> <C> <C>
1996
----
Equity Securities $184.9 $16.3 $0.8 $200.4
------- ------ ----- --------
1995
-----
Equity Securities $231.6 $27.2 $1.2 $257.6
------- ------ ----- --------
</TABLE>

F-22
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Notes to Consolidated Financial Statements (Continued)

3. Financial Instruments

Estimated Fair Value

The carrying values and estimated fair values of certain of the Company's
financial instruments at December 31, 1996 and 1995 were as follows:

<TABLE>
<CAPTION>
1996 1995
----------------------- ----------------------
Carrying Fair Carrying Fair
Value Value Value Value
---------- ---------- ---------- ---------
(millions)
<S> <C> <C> <C> <C>
Assets:
Mortgage loans $ 13.0 $ 13.2 $ 21.2 $ 21.9
Liabilities:
Investment contract liabilities:
With a fixed maturity $1,014.1 $1,028.8 $ 989.1 $1,001.2
Without a fixed maturity 9,649.6 9,427.6 9,511.0 9,298.4
</TABLE>

Fair value estimates are made at a specific point in time, based on available
market information and judgments about the financial instrument, such as
estimates of timing and amount of future cash flows. Such estimates do not
reflect any premium or discount that could result from offering for sale at one
time the Company's entire holdings of a particular financial instrument, nor do
they consider the tax impact of the realization of unrealized gains or losses.
In many cases, the fair value estimates cannot be substantiated by comparison
to independent markets, nor can the disclosed value be realized in immediate
settlement of the instrument. In evaluating the Company's management of
interest rate, price and liquidity risks, the fair values of all assets and
liabilities should be taken into consideration, not only those presented above.

The following valuation methods and assumptions were used by the Company in
estimating the fair value of the above financial instruments:

Mortgage loans: Fair values are estimated by discounting expected mortgage loan
cash flows at market rates which reflect the rates at which similar loans would
be made to similar borrowers. The rates reflect management's assessment of the
credit quality and the remaining duration of the loans.

Investment contract liabilities (included in Policyholders' Funds Left With the
Company):

With a fixed maturity: Fair value is estimated by discounting cash flows at
interest rates currently being offered by, or available to, the Company for
similar contracts.

Without a fixed maturity: Fair value is estimated as the amount payable to the
contractholder upon demand. However, the Company has the right under such
contracts to delay payment of withdrawals which may ultimately result in paying
an amount different than that determined to be payable on demand.

Off-Balance-Sheet and Other Financial Instruments (including Derivative
Financial Instruments)

The Company uses off-balance-sheet and other financial instruments primarily to
manage portfolio risks, including interest rate, prepayment/call, credit,
price, and liquidity risks. In 1996, Treasury

F-23
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements (Continued)

3. Financial Instruments (Continued)

futures contracts were used to manage interest rate risk in the Company's bond
portfolio and stock index futures contracts were used to manage price risk in
the Company's equity portfolio. In 1996 and 1995, interest rate swaps and
forward commitments to enter into interest rate swaps, respectively, were also
used to manage interest rate risk in the Company's bond portfolio.

Futures Contracts:

Futures contracts represent commitments to either purchase or sell underlying
assets at a specified future date. Futures contracts trade on organized
exchanges and, therefore, have minimal credit risk. Cash settlements are made
daily based on changes in the prices of the underlying assets. There were no
futures contracts open as of December 31, 1996 and 1995.

Interest Rate Swaps:

Under interest rate swaps, the Company agrees with other parties to exchange
interest amounts calculated by reference to an agreed notional principal
amount. Generally, no cash is exchanged at the outset of the contract and no
principal payments are made. A single net payment is usually made by one
counterparty at each due date or upon termination of the contract. The Company
would be exposed to credit-related losses in the event of nonperformance by
counterparties to financial instruments, however, the Company controls its
exposure to credit risk through credit approvals, credit limits and regular
monitoring procedures. The credit exposure of interest rate swaps is
represented by the fair value (market value) of contracts with a positive fair
value (market value) at the reporting date. There were no interest rate swap
agreements open as of December 31, 1996. At December 31, 1995, the Company had
an open forward swap agreement with a notional amount of $100.0 million and a
fair value of $0.1 million.

During 1995, the Company received $0.4 million for writing call options on
underlying securities. The Company did not write any call options in 1996. As
of December 31, 1996 and 1995, there were no option contracts outstanding.

The Company also had investments in certain debt instruments with derivative
characteristics, including those whose market value is at least partially
determined by, among other things, levels of or changes in domestic and/or
foreign interest rates (short or long term), exchange rates, prepayment rates,
equity markets or credit ratings/spreads. The amortized cost and fair value of
these securities, included in the debt securities portfolio, as of December 31,
1996 was as follows:

<TABLE>
<CAPTION>
Amortized Fair
Cost Value
----------- ---------
(millions)
<S> <C> <C>
Residential collateralized mortgage obligations ..................... $2,227.8 $2,309.0
Principal-only strips (included above) .............................. 44.5 53.3
Interest-only strips (included above) .............................. 10.3 22.8
Other structured securities with derivative characteristics (1) ...... 126.3 129.2
</TABLE>

(1) Represents non-leveraged instruments whose fair values and credit risk are
based on underlying securities, including fixed income securities and
interest rate swap agreements.

F-24
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements (Continued)

4. Net Investment Income

Sources of net investment income were as follows:

<TABLE>
<CAPTION>
1996 1995 1994
---------- -------- -------
(millions)
<S> <C> <C> <C>
Debt securities $ 945.3 $ 891.5 $823.9
Preferred stock 5.9 4.2 3.9
Investment in affiliated mutual funds 14.3 14.9 5.2
Mortgage loans 2.2 1.4 1.4
Policy loans 18.4 13.7 11.5
Reinsurance loan to affiliate 44.1 46.5 51.5
Cash equivalents 29.4 38.9 29.5
Other 2.1 8.4 6.7
-------- -------- ------
Gross investment income 1,061.7 1,019.5 933.6
Less investment expenses (16.1) (15.2) (16.4)
-------- -------- ------
Net investment income $1,045.6 $1,004.3 $917.2
======== ======== ======
</TABLE>

Net investment income includes amounts allocable to experience rated
contractholders of $787.6 million, $744.2 million and $677.1 million for the
years ended December 31, 1996, 1995 and 1994, respectively. Interest credited
to contractholders is included in Current and Future Benefits.

5. Dividend Restrictions and Shareholder's Equity

The Company paid $3.5 million in cash dividends to HOLDCO in 1996. In 1995, the
Company dividended $2.9 million in the form of two of its subsidiaries,
Systematized Benefits Administrators, Inc. and Aetna Investment Services, Inc.,
to Aetna Retirement Services, Inc. (the Company's former parent).

The amount of dividends that may be paid to the shareholder in 1997 without
prior approval by the Insurance Commissioner of the State of Connecticut is
$71.1 million.

The Insurance Department of the State of Connecticut (the "Department")
recognizes as net income and shareholder's capital and surplus those amounts
determined in conformity with statutory accounting practices prescribed or
permitted by the Department, which differ in certain respects from generally
accepted accounting principles. Statutory net income was $57.8 million, $70.0
million and $64.9 million for the years ended December 31, 1996, 1995 and 1994,
respectively. Statutory capital and surplus was $713.6 million and $670.7
million as of December 31, 1996 and 1995, respectively.

As of December 31, 1996 the Company does not utilize any statutory accounting
practices which are not prescribed by state regulatory authorities that,
individually or in the aggregate, materially affect statutory capital and
surplus.

Realized capital gains or losses are the difference between the carrying value
and sale proceeds of specific investments sold.

F-25
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements (Continued)

6. Capital Gains and Losses on Investment Operations (Continued)

Net realized capital gains on investments were as follows:

<TABLE>
<CAPTION>
1996 1995 1994
------- ------- -----
(millions)
<S> <C> <C> <C>
Debt securities $11.1 $32.8 $1.0
Equity securities 8.6 8.3 0.2
Mortgage loans -- 0.2 0.3
------ ----- ----
Pretax realized capital gains $19.7 $41.3 $1.5
------ ----- ----
After tax realized capital gains $13.0 $25.8 $1.0
====== ===== ====
</TABLE>

Net realized capital gains of $53.1 million and $61.1 million for 1996 and
1995, respectively, and net realized capital losses of $29.1 million for 1994,
allocable to experience rated contracts, were deducted from net realized
capital gains (losses) and an offsetting amount was reflected in policy-
holder funds' left with the Company. Net unamortized gains were $53.3 million
and $7.3 million at December 31, 1996 and 1995, respectively.

Changes to the mortgage loan valuation reserve and writedowns on debt
securities for other than temporary declines in value are included in net
realized capital gains (losses) and amounted to $(3.3) million, $3.1 million
and $1.1 million, of which $(3.2) million, $2.2 million and $0.8 million were
allocable to experience rated contractholders, for the years ended December 31,
1996, 1995 and 1994, respectively. There was no valuation reserve for mortgage
loans at December 31, 1996 or at December 31, 1995.

Proceeds from the sale of available for sale debt securities and the related
gross gains and losses were as follows:

<TABLE>
<CAPTION>
1996 1995 1994
---------- --------- ----------
(millions)
<S> <C> <C> <C>
Proceeds on Sales $5,182.2 $4,207.2 $3,593.8
Gross gains 24.3 44.6 26.6
Gross losses 13.2 11.8 25.6
</TABLE>

Changes in shareholder's equity related to changes in unrealized capital gains
(losses), (excluding those related to experience rated contractholders), were
as follows:

F-26
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements (Continued)

6. Capital Gains and Losses on Investment Operations (Continued)

<TABLE>
<CAPTION>
1996 1995 1994
-------- -------- -------
(millions)
<S> <C> <C> <C>
Debt securities $(100.1) $255.9 $(242.1)
Equity securities (10.5) 27.3 (13.3)
Limited partnership -- 1.8 (1.8)
------- ------ -------
(110.6) 285.0 (257.2)
Deferred income taxes (See Note 8) (38.6) (36.5) 46.3
------- ------ -------
Net change in unrealized capital gains (losses) $ (72.0) $321.5 $(303.5)
======= ====== =======
</TABLE>

Net unrealized capital gains allocable to experience rated contracts of $245.2
million and $43.3 million at December 31, 1996 and $515.0 million and $104.1
million at December 31, 1995 are reflected on the Consolidated Balance Sheets
in Policyholders' Funds Left With the Company and Future Policy Benefits,
respectively, and are not included in shareholder's equity.

Shareholder's equity included the following unrealized capital gains (losses),
which are net of amounts allocable to experience rated contractholders, at
December 31:

<TABLE>
<CAPTION>
1996 1995 1994
------- ------- --------
(millions)
<S> <C> <C> <C>
Debt securities
Gross unrealized capital gains $101.7 $179.3 $ 27.4
Gross unrealized capital losses (23.8) (1.3) (105.2)
------ ------ -------
77.9 178.0 (77.8)
Equity securities
Gross unrealized capital gains 16.3 27.2 6.5
Gross unrealized capital losses (0.8) (1.2) (7.9)
------ ------ -------
15.5 26.0 (1.4)
Limited Partnership -- -- --
Gross unrealized capital gains -- -- --
Gross unrealized capital losses -- -- (1.8)
------ ------ -------
-- -- (1.8)
Deferred income taxes (See Note 8) 32.9 71.5 108.0
------ ------ -------
Net unrealized capital gains (losses) $ 60.5 $132.5 $(189.0)
====== ====== =======
</TABLE>

F-27
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements (Continued)

7. Severance and Facilities Charges

Severance and facilities charges during 1996, as described below, included the
following (pretax):

<TABLE>
<CAPTION>
Vacated
Asset Leased Corporate
(Millions) Severance Write-Off Property Other Allocation Total
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Financial Services $29.1 $1.0 $1.3 $1.7 $ -- $33.1
Individual Life Insurance 12.5 0.4 0.5 0.8 -- 14.2
Corporate Allocation -- -- -- -- 14.0 14.0
------ ----- ----- ----- ------ ------
Total Company $41.6 $1.4 $1.8 $2.5 $14.0 $61.3
- -----------------------------------------------------------------------------------
</TABLE>

In the third quarter of 1996, the Company recorded a $30.7 million after tax
($47.3 million pretax) charge principally related to actions taken or expected
to be taken to improve its cost structure relative to its competitors. The
severance portion of the charge is based on a plan to eliminate 702 positions
(primarily customer service, sales and information technology support staff).
The facilities portion of the charge is based on a plan to consolidate
sales/service field offices.

In addition to the above charge, Aetna recorded a facilities and severance
charge in the second quarter of 1996, primarily as a result of actions taken or
expected to be taken to reduce the level of corporate expenses and other costs
previously absorbed by Aetna's property-casualty operations. The cost allocated
to the Company associated with this charge was $9.1 million after tax ($14.0
million pretax).

The activity during 1996 within the severance and facilities reserve (pretax,
in millions) and the number of positions eliminated related to such actions
were as follows:

<TABLE>
<CAPTION>
Reserve Positions
- ------------------------------------------------------------------------------
<S> <C> <C>
Beginning of year $ -- --
Severance and facilities charges 47.3 702
Corporate Allocation 14.0 --
Actions taken (1) (13.4) (178)
------- ----
End of year $ 47.9 524
- ------------------------------------------------------------------------------
</TABLE>

(1) Includes $8.0 million of severance-related actions and $4.1 million of
corporate allocation-related actions.

The Company's severance actions are expected to be substantially completed by
March 31, 1998. The corporate allocation actions and the vacating of the leased
office space are expected to be substantially completed in 1997.

8. Income Taxes

The Company is included in the consolidated federal income tax return and
combined Connecticut and New York state income tax returns of Aetna. Aetna
allocates to each member an amount approximating the

F-28
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements (Continued)

8. Income Taxes (Continued)

tax it would have incurred were it not a member of the consolidated group, and
credits the member for the use of its tax saving attributes used in the
consolidated returns.

Income taxes for the years ended December 31, consist of:

<TABLE>
<CAPTION>
1996 1995 1994
-------- ------ ------
(millions)
<S> <C> <C> <C>
Current taxes (benefits):
Income Taxes:
Federal $ 50.9 $ 82.9 $ 78.7
State 3.7 3.2 4.4
Net realized capital gains (losses) 25.3 28.5 (33.2)
------ ------ ------
79.9 114.6 49.9
------ ------ ------
Deferred taxes (benefits):
Income Taxes:
Federal (3.5) (14.4) (8.0)
Net realized capital gains (losses) (18.6) (12.9) 33.7
------ ------ ------
(22.1) (27.3) 25.7
------ ------ ------
Total $ 57.8 $ 87.3 $ 75.6
====== ====== ======
</TABLE>

Income taxes were different from the amount computed by applying the federal
income tax rate to income before income taxes for the following reasons:

<TABLE>
<CAPTION>
1996 1995 1994
------ ------ ------
(millions)
<S> <C> <C> <C>
Income before income taxes $198.9 $263.2 $220.9
Tax rate 35% 35% 35%
------ ------ ------
Application of the tax rate 69.6 92.1 77.3
------ ------ ------
Tax effect of:
State income tax, net of federal benefit 2.4 2.1 2.9
Excludable dividends (8.7) (9.3) (8.6)
Other, net (5.5) 2.4 4.0
------ ------ ------
Income taxes $ 57.8 $ 87.3 $ 75.6
====== ====== ======
</TABLE>

F-29
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements (Continued)

8. Income Taxes (Continued)

The tax effects of temporary differences that give rise to deferred tax assets
and deferred tax liabilities at December 31 are presented below:

<TABLE>
<CAPTION>
1996 1995
------- ------
(millions)
<S> <C> <C>
Deferred tax assets:
Insurance reserves $344.6 $290.4
Unrealized gains allocable to experience rated contracts 100.8 216.7
Investment losses 7.5 7.3
Postretirement benefits other than pensions 27.0 7.7
Deferred compensation 25.0 18.9
Pension 7.6 5.7
Other 29.3 9.2
------ -------
Total gross assets 541.8 555.9
Deferred tax liabilities:
Deferred policy acquisition costs 482.1 433.0
Market discount 6.8 4.4
Net unrealized capital gains 133.7 288.2
Other (0.3) (0.1)
------ -------
Total gross liabilities 622.3 725.5
------ -------
Net deferred tax liability $ 80.5 $169.6
====== =======
</TABLE>

Net unrealized capital gains and losses are presented in shareholder's equity
net of deferred taxes. Valuation allowances are provided when it is not
considered more likely than not that deferred tax assets will be realized. As
of December 31, 1996 and 1995, no valuation allowances were required for
unrealized capital gains and losses.

The "Policyholders' Surplus Account," which arose under prior tax law, is
generally that portion of a life insurance company's statutory income that has
not been subject to taxation. As of December 31, 1983, no further additions
could be made to the Policyholders' Surplus Account for tax return purposes
under the Deficit Reduction Act of 1984. The balance in such account was
approximately $17.2 million at December 31, 1996. This amount would be taxed
only under certain conditions. No income taxes have been provided on this
amount since management believes the conditions under which such taxes would
become payable are remote.

The Internal Revenue Service ("Service") has completed examinations of the
consolidated federal income tax returns of Aetna through 1990. Discussions are
being held with the Service with respect to proposed adjustments. Management
believes there are adequate defenses against, or sufficient reserves to provide
for, any such adjustments. The Service has commenced its examinations for the
years 1991 through 1994.

F-30
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Notes to Consolidated Financial Statements (Continued)

9. Benefit Plans

Employee Pension Plans--The Company, in conjunction with Aetna, has
noncontributory defined benefit pension plans covering substantially all
employees. The plans provide pension benefits based on years of service and
average annual compensation (measured over 60 consecutive months of highest
earnings in a 120-month period). Contributions are determined using the
Projected Unit Credit Method and, for qualified plans subject to ERISA
requirements, are limited to the amounts that are tax-deductible. As of
December 31, 1996, Aetna's accrued pension cost has been allocated to its
subsidiaries, including the Company, under an allocation based on eligible
salaries. Data on a separate company basis regarding the proportionate share of
the projected benefit obligation and plan assets is not available. The
accumulated benefit obligation and plan assets are recorded by Aetna. As of the
measurement date (i.e., September 30), the accumulated plan assets exceeded
accumulated plan benefits. Allocated pretax charges to operations for the
pension plan (based on the Company's total salary cost as a percentage of
Aetna's total salary cost) were $4.3 million, $6.1 million and $5.5 million for
the years ended December 31, 1996, 1995 and 1994, respectively.

Employee Postretirement Benefits--In addition to providing pension benefits,
Aetna currently provides certain health care and life insurance benefits,
subject to certain caps, for retired employees. A comprehensive medical and
dental plan is offered to all full-time employees retiring at age 50 with 15
years of service or at age 65 with 10 years of service. Retirees are generally
required to contribute to the plans based on their years of service with Aetna.
The costs to the Company associated with the Aetna postretirement plans for
1996, 1995 and 1994 were $1.8 million, $1.4 million and $1.0 million,
respectively.

As of December 31, 1996, Aetna transferred to the Company approximately $77.7
million of accrued liabilities, primarily related to the pension and
postretirement benefit plans described above, that had been previously recorded
by Aetna. The after tax amount of this transfer (approximately $50.5 million)
is reported as a reduction in retained earnings.

Agent Pension Plans--The Company, in conjunction with Aetna, has a
non-qualified pension plan covering certain agents. The plan provides pension
benefits based on annual commission earnings. As of the measurement date (i.e.,
September 30), the accumulated plan assets exceeded accumulated plan benefits.

Agent Postretirement Benefits--The Company, in conjunction with Aetna, also
provides certain postretirement health care and life insurance benefits for
certain agents. The costs to the Company associated with the agents'
postretirement plans for 1996, 1995 and 1994 were $0.7 million, $0.8 million
and $0.7 million, respectively.

Incentive Savings Plan--Substantially all employees are eligible to participate
in a savings plan under which designated contributions, which may be invested
in common stock of Aetna or certain other investments, are matched, up to 5% of
compensation, by Aetna. Pretax charges to operations for the incentive savings
plan were $5.4 million, $4.9 million and $3.3 million in 1996, 1995 and 1994,
respectively.

F-31
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Notes to Consolidated Financial Statements (Continued)

9. Benefit Plans (Continued)

Stock Plans--Aetna has a stock incentive plan that provides for stock options,
deferred contingent common stock or equivalent cash awards or restricted stock
to certain key employees. Executive and middle management employees may be
granted options to purchase common stock of Aetna at or above the market price
on the date of grant. Options generally become 100% vested three years after
the grant is made, with one-third of the options vesting each year. Aetna does
not recognize compensation expense for stock options granted at or above the
market price on the date of grant under its stock incentive plans. In addition,
executives may be granted incentive units which are rights to receive common
stock or an equivalent value in cash. The incentive units may vest within a
range from 0% to 175% at the end of a four year period based on the attainment
of performance goals. The costs to the Company associated with the Aetna stock
plans for 1996, 1995 and 1994, were $8.1 million, $6.3 million and $1.7
million, respectively. As of December 31, 1996, Aetna transferred to the
Company approximately $1.1 million of deferred tax benefits related to stock
options. This amount is reported as an increase in retained earnings.

10. Related Party Transactions

The Company is compensated by the Separate Accounts for bearing mortality and
expense risks pertaining to variable life and annuity contracts. Under the
insurance contracts, the Separate Accounts pay the Company a daily fee which,
on an annual basis, ranges, depending on the product, from .10% to 1.90% of
their average daily net assets. The Company also receives fees from the
variable life and annuity mutual funds and The Aetna Series Fund for serving as
investment adviser. Under the advisory agreements, the Funds pay the Company a
daily fee which, on an annual basis, ranges, depending on the fund, from .25%
to .85% of their average daily net assets. The Company also receives fees
(expressed as a percentage of the average daily net assets) from the variable
life and annuity mutual funds and The Aetna Series Fund for providing
administration services, and from The Aetna Series Fund for providing
shareholder services and promoting sales. The amount of compensation and fees
received from the Separate Accounts and Funds, included in Charges Assessed
Against Policyholders, amounted to $185.4 million, $128.1 million and $104.6
million in 1996, 1995 and 1994, respectively. The Company may waive advisory
fees at its discretion.

The Company acts as an investment adviser for its affiliated mutual funds.
Since August 1996, Aeltus Investment Management, Inc. ("Aeltus"), a wholly
owned subsidiary of HOLDCO and an affiliate of the Company, has been acting as
Subadvisor of all affiliated mutual funds and of most of the General Account
assets. Fees paid by the Company to Aeltus, included in both Charges Assessed
Against Policyholders and Net Investment Income, on an annual basis, range from
.06% to .55% of the average daily net assets under management. For the year
ended December 31, 1996, the Company paid $16.0 million in such fees.

The Company may, from time to time, make reimbursements to a Fund for some or
all of its operating expenses. Reimbursement arrangements may be terminated at
any time without notice.

F-32
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Notes to Consolidated Financial Statements (Continued)

10. Related Party Transactions (Continued)

Since 1981, all domestic individual non-participating life insurance of Aetna
and its subsidiaries has been issued by the Company. Effective December 31,
1988, the Company entered into a reinsurance agreement with Aetna Life
Insurance Company ("Aetna Life") in which substantially all of the non-
participating individual life and annuity business written by Aetna Life prior
to 1981 was assumed by the Company. A $108.0 million commission, paid by the
Company to Aetna Life in 1988, was capitalized as deferred policy acquisition
costs. An additional $6.1 million commission, paid by the Company to Aetna Life
in 1996, was capitalized as deferred policy acquisition costs. The Company
maintained insurance reserves of $628.3 million and $655.5 million as of
December 31, 1996 and 1995, respectively, relating to the business assumed. In
consideration for the assumption of this business, a loan was established
relating to the assets held by Aetna Life which support the insurance reserves.
The loan is being reduced in accordance with the decrease in the reserves. The
fair value of this loan was $625.3 million and $663.5 million as of December
31, 1996 and 1995, respectively, and is based upon the fair value of the
underlying assets. Premiums of $25.3 million, $28.0 million and $32.8 million
and current and future benefits of $39.5 million, $43.0 million and $43.8
million were assumed in 1996, 1995 and 1994, respectively.

Investment income of $44.1 million, $46.5 million and $51.5 million was
generated from the reinsurance loan to affiliate in 1996, 1995 and 1994,
respectively. Net income of approximately $8.1 million, $18.4 million and $25.1
million resulted from this agreement in 1996, 1995 and 1994, respectively.

On December 16, 1988, the Company assumed $25.0 million of premium revenue from
Aetna Life for the purchase and administration of a life contingent single
premium variable payout annuity contract. In addition, the Company also is
responsible for administering fixed annuity payments that are made to
annuitants receiving variable payments. Reserves of $28.9 million and $28.0
million were maintained for this contract as of December 31, 1996 and 1995,
respectively.

Effective February 1, 1992, the Company increased its retention limit per
individual life to $2.0 million and entered into a reinsurance agreement with
Aetna Life to reinsure amounts in excess of this limit, up to a maximum of $8.0
million on any new individual life business, on a yearly renewable term basis.
Premium amounts related to this agreement were $5.2 million, $3.2 million and
$1.3 million for 1996, 1995 and 1994, respectively.

The Company received a capital contribution of $10.4 million in cash from
HOLDCO in 1996. The Company received no capital contributions in 1995 or 1994.

Premiums due and other receivables include $2.8 million and $5.7 million due
from affiliates in 1996 and 1995, respectively. Other liabilities include $10.7
million and $12.4 million due to affiliates for 1996 and 1995, respectively.

F-33
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements (Continued)

10. Related Party Transactions (Continued)

Substantially all of the administrative and support functions of the Company
are provided by Aetna and its affiliates. The financial statements reflect
allocated charges for these services based upon measures appropriate for the
type and nature of service provided.

11. Reinsurance

The Company utilizes indemnity reinsurance agreements to reduce its exposure to
large losses in all aspects of its insurance business. Such reinsurance permits
recovery of a portion of losses from reinsurers, although it does not discharge
the primary liability of the Company as direct insurer of the risks reinsured.
The Company evaluates the financial strength of potential reinsurers and
continually monitors the financial condition of reinsurers. Only those
reinsurance recoverables deemed probable of recovery are reflected as assets on
the Company's Consolidated Balance Sheets.

The following table includes premium amounts ceded/assumed to/from affiliated
companies as discussed in Note 10 above.

<TABLE>
<CAPTION>
Ceded to Assumed
Direct Other from Other Net
Amount Companies Companies Amount
-------- ---------- ---------- -------
(millions)
<S> <C> <C> <C> <C>
1996
----
Premiums:
Life Insurance $ 34.6 $11.2 $25.3 $ 48.7
Accident and Health Insurance 6.3 6.3 -- --
Annuities 84.3 -- 0.6 84.9
------- ------ ------ -------
Total earned premiums $125.2 $17.5 $25.9 $133.6
======= ====== ====== =======
1995
----
Premiums:
Life Insurance $ 28.8 $ 8.6 $28.0 $ 48.2
Accident and Health Insurance 7.5 7.5 -- --
Annuities 164.0 -- 0.5 164.5
------- ------ ------ -------
Total earned premiums $200.3 $16.1 $28.5 $212.7
======= ====== ====== =======
1994
----
Premiums:
Life Insurance $ 27.3 $ 6.0 $32.8 $ 54.1
Accident and Health Insurance 9.3 9.3 -- --
Annuities 137.3 -- 0.2 137.5
------- ------ ------ -------
Total earned premiums $173.9 $15.3 $33.0 $191.6
======= ====== ====== =======
</TABLE>

F-34
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)

Notes to Consolidated Financial Statements (Continued)

12. Commitments and Contingent Liabilities

Commitments

Through the normal course of investment operations, the Company commits to
either purchase or sell securities or money market instruments at a specified
future date and at a specified price or yield. The inability of counterparties
to honor these commitments may result in either higher or lower replacement
cost. Also, there is likely to be a change in the value of the securities
underlying the commitments. At December 31, 1996, the Company had commitments
to purchase investments of $17.9 million. The fair value of the investments at
December 31, 1996 approximated $18.3 million.

Litigation

13. Segment Information (1)

The Company's operations are reported through two major business segments:
Financial Services and Individual Life Insurance.

Summarized financial information for the Company's principal operations was as
follows:

<TABLE>
<CAPTION>
(Millions) 1996 1995 1994
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenue:
Financial Services $1,195.1 $1,211.3 $1,013.5
Individual Life Insurance 445.7 407.9 386.1
-------------- -------------- --------------
Total revenue $1,640.8 $1,619.2 $1,399.6
- ------------------------------------------------------------------------------
Income before income taxes: (2)
Financial Services $ 129.9 $ 160.1 $ 122.5
Individual Life Insurance 83.0 103.1 98.4
-------------- -------------- --------------
Total income before income taxes $ 212.9 $ 263.2 $ 220.9
- ------------------------------------------------------------------------------
Net income: (2)
Financial Services $ 94.3 $ 113.8 $ 85.5
Individual Life Insurance 55.9 62.1 59.8
-------------- -------------- --------------
Net income $ 150.2 $ 175.9 $ 145.3
- ------------------------------------------------------------------------------
</TABLE>

F-35
<PAGE>

AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Notes to Consolidated Financial Statements (Continued)

13. Segment Information (1) (Continued)

<TABLE>
<S> <C> <C> <C>
Assets under management: (3)
Financial Services $27,268.1 $22,534.4 $18,122.9
Individual Life Insurance 2,830.5 2,590.9 2,220.5
- --------------------------------------------------------------------------------
Total assets under management $30,098.6 $25,125.3 $20,343.4
- --------------------------------------------------------------------------------
</TABLE>

(1) The 1996 results include severance and facilities charges of $30.7
million, after tax. Of this charge $21.5 million related to the Financial
Services segment and $9.2 million related to the Individual Life Insurance
segment.

(2) Excludes any effect of the corporate facilities and severance charge
recorded in 1996 which is not directly allocable to the Financial Services and
Individual Life Insurance segments. (Refer to Note 7).

(3) Excludes net unrealized capital gains (losses) of $366.4 million, $797.1
million and $(386.4) million at December 31, 1996, 1995 and 1994, respectively.

F-36
<PAGE>

Aetna Life Insurance and Annuity Company
Individual Life
151 Farmington Avenue
Hartford, CT 06156

(800)-677-4636

Variable Life Account B

NYSUT Prospectus
Aetna Variable Fund
Aetna Income Shares
Aetna Variable Encore Fund
Aetna Investment Advisers Fund, Inc.
Aetna Ascent Variable Portfolio
Aetna Crossroads Variable Portfolio
Aetna Legacy Variable Portfolio
Aetna Variable Index Plus Portfolio

Fidelity VIP Equity-Income Portfolio

Fidelity VIP Contrafund Portfolio
Janus Aspen Growth Portfolio
Janus Aspen Aggressive Growth Portfolio
Janus Aspen Worldwide Growth Portfolio
Janus Aspen Balanced Portfolio

Prospectus Dated

<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

UNDERTAKING TO FILE REPORTS

Subject to the terms and conditions of Section 15(d) of the Securities Exchange
Act of 1934, the undersigned Registrant hereby undertakes to file with the
Securities and Exchange Commission such supplementary and periodic information,
documents and reports as may be prescribed by any rule or regulation of the
Commission heretofore or hereafter duly adopted pursuant to authority conferred
in that section.

UNDERTAKING PURSUANT TO RULE 484

Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

REPRESENTATIONS PURSUANT TO PARAGRAPH (26)(e)(2)(A)
OF THE INVESTMENT COMPANY ACT OF 1940

REGISTRANT MAKES THE FOLLOWING REPRESENTATIONS:

Aetna Life Insurance and Annuity Company represents that the fees and charges
deducted under the policies covered by this registration statement, in the
aggregate, are reasonable in relation to the services rendered, the expenses
expected to be incurred, and the risks assumed by the insurance company.

<PAGE>

CONTENTS OF PRE-EFFECTIVE AMENDMENT NO. 1 TO
REGISTRATION STATEMENT

This Pre-Effective Amendment No. 1 to Registration Statement No. 333-15817
comprises the following papers and documents:

The facing sheet.
A cross-reference sheet
One Prospectus for the Flexible Premium Group Variable Universal Life
Insurance Policy consisting of consisting of 99 pages.
The undertaking to file reports
The undertaking pursuant to Rule 484
Representations pursuant to Section 26(e)(2)(A) of the Investment
Company Act of 1940
The signatures
Written consents of the following persons:
A. Consent of Counsel (included as part of Exhibit 2 below)
B. Actuarial Consent (included as part of Exhibit 6 below)
C. Consent of Independent Auditors (included as Exhibit 8 below)

<TABLE>
<CAPTION>
The following Exhibits:

<S> <C>
1. Exhibits required by paragraph A of instructions to exhibits for Form N-8B-2:
(1) Resolution establishing Variable Life Account B1
(2) Not Applicable
(3)(i) Master General Agent Agreement1
(3)(ii) Life Insurance General Agent Agreement1
(3)(iii) Broker Agreement1
(3)(iv) Life Insurance Broker-Dealer Agreement1
(3)(v) Restated and Amended Third Party Administration and Transfer Agent Agreement2
(4) Not Applicable
(5)(i) Form of Group Policy (70267-97)
(5)(ii) Form of Certificate Under Group Policy (70263-97)
(5)(iii) Form of Disability Benefit Rider (70264-97)
(5)(iv) Form of Accelerated Death Benefit Rider (70265-97)
(5)(v) Form of Accidental Death Benefit Rider (70266-97)
(5)(vi) Children Insurance Rider Term Insurance (70267-97)
(6)(i) Certificate of Incorporation and By-laws of Aetna Life Insurance and Annuity Company,
Depositor3
(6)(ii) Amendment of Certificate of Incorporation of Aetna Life Insurance and Annuity Company4
(7) Not Applicable

<PAGE>

(8)(i) Fund Participation Agreement (Amended and Restated) between Aetna Life Insurance and
Annuity Company, Alger American Fund and Fred Alger Management, Inc., dated as of March 31,
19955
(8)(ii) Fund Participation Agreement between Aetna Life Insurance
and Annuity Company, Variable Insurance Products Fund and
Fidelity Distributors Corporation dated February 1, 1994
and amended on December 15, 1994, February 1, 1995, May 1,
1995, January 1, 1996 and March 1, 19966
(8)(iii) Fund Participation Agreement between Aetna Life Insurance
and Annuity Company, Variable Insurance Products Fund II
and Fidelity Distributors Corporation dated February 1,
1994 and amended on December 15, 1994, February 1. 1995,
May 1, 1995, January 1, 1996 and March 1,19966
(8)(iv) Service Agreement between Aetna Life Insurance and Annuity Company and Fidelity Investment
Institutional Operations Company dated as of November 1, 19957
(8)(v) Fund Participation Agreement between Aetna Life Insurance and Annuity Company and Janus Aspen
Series dated April 19, 1994 and amended March 1, 19965
(8)(vi) Fund Participation Agreement between Aetna Life Insurance
and Annuity Company and Scudder Variable Life Investment
Fund dated April 27, 1992 and amended February 19, 1993
and August 13, 19935
(8)(vii) Amendment dated as of February 20, 1996 to Fund
Participation Agreement between Aetna Life Insurance and
Annuity Company and Scudder Variable Life Investment Fund
dated April 27, 1992 as amended February 19, 1993 and
August 13, 19937
(8)(viii) Fund Participation Agreement between Aetna Life Insurance
and Annuity Company, Investors Research Corporation and
TCI Portfolios, Inc., dated July 29, 1992 and amended
December 22, 1992 and June 1, 19945
(9) Not Applicable
(10)(i) Form of Application for Group Variable Universal Life Insurance (Application for Group
Policy) (70262-97NYApp)
(10)(ii) Form of Supplement to Application for Variable Life Insurance (Supplement to Application
for Certificate) (70268-97)
(10)(iii) Form of Application for Individual Life Insurance Policy New York (Application for
Certificate) (70095-96NY)
(10)(iv) Form of Application for Group Life Insurance Policy (Application No. 70272-97(A)ZNY)
(11) Issuance, Transfer and Redemption Procedures
</TABLE>

2. Opinion and Consent of Counsel
3. Not Applicable
4. Not Applicable
5. See Item (27) below
6. Actuarial Opinion and Consent
7. Consent of Independent Auditors
8. Copy of Power of Attorney8

(27) Financial Data Schedule

<PAGE>

1. Incorporated by reference to Post-Effective Amendment No. 2 to Registration
Statement on Form S-6 (File No. 33-76004), as filed electronically on
February 16, 1996.
2. Incorporated by reference to Post-Effective Amendment No. 1 to Registration
Statement on Form S-6 (File No. 33-75248), as filed on April 25, 1995.
3. Incorporated by reference to Post-Effective Amendment No. 1 to Registration
Statement on Form S-1 (File No. 33-60477), as filed electronically on April
15, 1996.
4. Incorporated by reference to Post-Effective Amendment No. 12 to
Registration Statement on Form N-4 (File No. 33-75964), as filed
electronically on February 11, 1997.
5. Incorporated by reference to Post-Effective Amendment No. 5 to Registration
Statement on Form N-4 (File No. 33-75986), as filed electronically on April
12, 1996.
6. Incorporated by reference to Post-Effective Amendment No. 12 to
Registration Statement on Form N-4 (File No. 33-75964), as filed
electronically on February 11, 1997.
7. Incorporated by reference to Post-Effective Amendment No. 3 to Registration
Statement on Form N-4 (File No. 33-88720), as filed electronically on June
28, 1996.
8. Incorporated by reference to Post-Effective Amendment No. 8 to Registration
Statement on Form S-6 (File No. 33-76004), as filed electronically on July
14, 1997. In addition, a certified copy of the resolution adopted by the
Depositor's Board of Directors authorizing filings pursuant to a power of
attorney as required by Rule 478 under the Securities Act of 1933 is
incorporated by reference to Post-Effective Amendment No. 5 to Registration
Statement on Form N-4 (File No. 33-75986), as filed electronically on April
12, 1996.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Variable Life Account B of Aetna Life Insurance and Annuity Company, has duly
caused this Pre-Effective Amendment No. 1 to its Registration Statement on Form
S-6 (File No. 333-15817) to be signed on its behalf by the undersigned,
thereunto duly authorized, and the seal of the Depositor to be hereunto affixed
and attested, all in the City of Hartford, and State of Connecticut, on this
day of July 17th, 1997.

VARIABLE LIFE ACCOUNT B OF
AETNA LIFE INSURANCE AND
ANNUITY COMPANY
(Registrant)

(SEAL)

ATTEST: /s/ Kirk P. Wickman AETNA LIFE INSURANCE AND
-------------------- ANNUITY COMPANY
Kirk P. Wickman (Depositor)
Corporate Secretary

By: Daniel P. Kearney*
-------------------------
Daniel P. Kearney
Principal Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this
Pre-Effective Amendment No. 1 to the Registration Statement No. 333-15817 has
been signed below by the following persons in the capacities indicated and on
the dates indicated.

<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----

<S> <C> <C>
Daniel P. Kearney* Director and President )
- ------------------------------------
Daniel P. Kearney (Principal Executive Officer) )

)
Christopher J. Burns* Director ) July 17,
- ------------------------------------
Christopher J. Burns ) 1997
)
Timothy A. Holt* Director and Chief Financial Officer )
- ------------------------------------
Timothy A. Holt )

<PAGE>

)
John Y. Kim* Director )
- ------------------------------------
John Y. Kim )
)
Shaun P. Mathews* Director )
- ------------------------------------
Shaun P. Mathews )
)
Glen Salow* Director )
- ------------------------------------
Glen Salow )
)
Creed R. Terry* Director )
- ------------------------------------
Creed R. Terry )
)
Deborah Koltenuk* Vice President and Treasurer, Corporate Controller )
- ------------------------------------
Deborah Koltenuk )
</TABLE>

By: /s/ Julie E. Rockmore
--------------------------------
*Julie E. Rockmore
Attorney-in-Fact

<PAGE>

VARIABLE LIFE ACCOUNT B
EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit No. Exhibit Page
- ----------- ------- ----

<S> <C> <C>
99-1.1 Resolution of the Board of Directors of Aetna Life Insurance and Annuity *
Company establishing Variable Life Account B

99-1.3(i) Master General Agent Agreement *

99-1.3(ii) Life Insurance General Agent Agreement *

99-1.3(iii) Broker-Dealer Agreement *

99-1.3(iv) Life Insurance Broker-Dealer Agreement *

99-1.3(v) Restated and Amended Third Party Administration and Transfer Agent Agreement *

99-1.5(i) Form of Group Policy (70267-97)
---

99-1.5(ii) Form of Certificate Under Group Policy (70263-97)
---

99-1.5(iii) Form of Disability Benefit Rider (70264-97)
---

99-1.5(iv) Form of Accelerated Death Benefit Rider (70265-97)
---

99-1.5(v) Form of Accidental Death Benefit Rider (70266--97)
---

99-1.5(vi) Children Insurance Rider Term Insurance (70267-97)
---

99-1.6(i) Certification of Incorporation and By-Laws of Depositor *

99-1.6(ii) Amendment of Certificate of Incorporation of Aetna Life Insurance and Annuity *
Company

99-1.8(i) Fund Participation Agreement (Amended and Restated) between Aetna Life Insurance *
and Annuity Company, Alger American Fund and Fred Alger Management, Inc., dated
as of March 31, 1995
</TABLE>

*Incorporated by Reference

<PAGE>

<TABLE>
<CAPTION>
Exhibit No. Exhibit Page
- ----------- ------- ----

<S> <C> <C>
99-1.8(ii) Fund Participation Agreement between Aetna Life Insurance *
and Annuity Company, Variable Insurance Products Fund and
Fidelity Distributors Corporation dated February 1, 1994 and
amended on December 15, 1994, February 1, 1995, May 1, 1995,
January 1, 1996 and March 1, 1996

99-1.8(iii) Fund Participation Agreement between Aetna Life Insurance *
and Annuity Company, Variable Insurance Products Fund II
and Fidelity Distributors Corporation dated February 1, 1994
and amended on December 15, 1994, February 1. 1995, May 1,
1995, January 1, 1996 and March 1,1996

99-1.8(iv) Service Agreement between Aetna Life Insurance and Annuity Company and *
Fidelity Investment Institutional Operations Company dated as of November 1,
1995

99-1.8(v) Fund Participation Agreement between Aetna Life Insurance and Annuity Company *
and Janus Aspen Series dated April 19, 1994 and amended March 1, 1996

99-1.8(vi) Fund Participation Agreement between Aetna Life Insurance and Annuity Company *
and Scudder Variable Life Investment Fund dated April 27, 1992 and amended
February 19, 1993 and August 13, 1993

99-1.8(vii) Amendment dated as of February 20, 1996 to Fund *
Participation Agreement between Aetna Life Insurance and
Annuity Company and Scudder Variable Life Investment Fund
dated April 27, 1992 as amended February 19, 1993 and August
13, 1993

99-1.8(viii) Fund Participation Agreement between Aetna Life Insurance and Annuity Company, *
Investors Research Corporation and TCI Portfolios, Inc. dated July 29, 1992
and amended December 22, 1992 and June 1, 1994

99-1.10(i) Form of Application for Group Variable Universal Life Insurance (Application ---
for Group Policy) (70262-97NYApp)

99-1.10(ii) Form of Supplement to Application for Variable Life Insurance (Supplement to ---
Application for Certificate) (70268-97)

<PAGE>

<CAPTION>
Exhibit No. Exhibit Page
- ----------- ------- ----

<S> <C> <C>
99-1.10(iii) Form of Application for Individual Life Insurance Policy New York (Application
for Certificate) (70095-96NY)
---

99-1.10(iv) Form of Application for Group Life Insurance Policy (Application
No. 70272-97(A)ZNY) ---

99-1.11 Issuance, Transfer and Redemption Procedures
---

99-2 Opinion and Consent of Counsel
---

99-6 Actuarial Opinion and Consent
---

99-7 Consent of Independent Auditors
---

99-8 Copy of Power of Attorney *

27 Financial Data Schedule
---
</TABLE>

*Incorporated by reference

Flexible Premium Group Variable Universal Life Insurance Policy

a contract between

Aetna Life Insurance and Annuity Company
(herein called Aetna)

and

New York State United Teachers Benefit Trust

(Policyholder)

Policy Number: [ ] Signed at Aetna's Home Office in
Hartford, Connecticut
Date of issue: [ ] on the date of issue.

To take effect: [ ]

Policy delivered in: New York

This policy will be construed in [
line with the law of the State of delivery. President]

Based on timely premium payments
Aetna agrees with the New York State United
Teachers Benefit Trust, to pay benefits [
accordance with the policy terms. Secretary]

The duties and the rights of the
policyholder will be based solely on
the terms of this policy. This [
policy is non-participating. Registrar]

RIGHT OF EXAMINATION

This policy may be returned to Aetna or its representative within 10 days after
its receipt. Return this policy to Aetna at 151 Farmington Avenue, Hartford,
Connecticut 06156. Upon its return, all insurance under this Certificate will
then be deemed void from its beginning.

<PAGE>

INDEX

PART I

CONTRACT --
CERTIFICATES

PART II

ELIGIBILITY -- ELIGIBLE PERSONS

PART III

CANCELLATION OF POLICY --
CONVERSION OF CERTIFICATE

PART IV

PREMIUM PROVISIONS --
GRACE PERIOD PROVISIONS

PART V
POLICYHOLDER AND INSURANCE
COMPANY MATTERS

PART VI

MISCELLANEOUS PROVISIONS
COPY OF APPLICATION

2
<PAGE>

PART I

CONTRACT --
CERTIFICATES

CONTRACT
This policy, any attached endorsements, the Policyholder's application and the
Certificate constitute the entire contract. A copy of the Policyholder's
application is attached. All statements made by the New York State United
Teachers Benefit Trust or an Insured shall be deemed representations and not
warranties. Aetna will not use such statements to void this contract or defend
against a claim unless it is contained in the initial application or subsequent
applications.

CERTIFICATES
Aetna will prepare a Certificate setting forth a description of coverage for
each Insured under this policy. All such Certificates are hereby incorporated
into and made a part of this policy. Certificates will be issued for delivery to
each Owner.

Each Certificate incorporated into and made a part of this policy will be
identified by:

The form number 70263-96;
The name of the Insured.

If Aetna receives a request from the New York State United Teachers Benefit
Trust to change any of the provisions of a Certificate, such change(s) that is
agreed to by Aetna will be made on future Certificates and, if applicable, on
existing Certificates by formal amendment and in accordance with any applicable
laws or regulations and any written instructions from the New York State United
Teachers Benefit Trust. The Certificate Owner's consent is needed if such
change(s) results in a reduction in benefits or an increase in guaranteed
charges.

PART II

ELIGIBILITY -- ELIGIBLE PERSONS

ELIGIBILITY
The New York State United Teachers Benefit Trust and the eligible class or
classes of Members will be those which are: (a) designated to Aetna in writing;
(b) accepted by Aetna; and (c) placed on file with Aetna. With Aetna's consent,
any class or classes of eligible Members may be changed by formal amendment of
this policy by written notice from the New York State United Teachers Benefit
Trust to Aetna.

Aetna will keep, in a file set up for the New York State United Teachers Benefit
Trust, a copy of the rates that apply to its eligible class or classes of
Members.

The New York State United Teachers Benefit Trust may act on all policy matters.
Each such act, or agreement made between Aetna and the New York State United
Teachers Benefit Trust, or notice given by one to the other will be binding.

3
<PAGE>

C E R T I F I C A T E S P E C I F I C A T I O N S

NAME OF
INSURED JOHN DOE

CERTIFICATE
NUMBER: F 2 222 000 September 1, 1997 DATE OF ISSUE

INSURED SEX AGE PREMIUM CLASS
A UNISEX 45 PREFERRED NONSMOKER

BENEFICIARY - SEE ATTACHED BENEFICIARY AND OWNER ENDORSEMENT SHEET.

OWNER - THE INSURED.

SPONSORING ORGANIZATION - NEW YORK STATE UNITED TEACHERS UNION BENEFIT TRUST

PLAN - FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE CERTIFICATE

INITIAL SPECIFIED AMOUNT: $175,000 DEATH BENEFIT OPTION: 1

MINIMUM SPECIFIED AMOUNT: $50,000

MATURITY DATE: SEPTEMBER 1, 2052

INITIAL PLANNED PREMIUM: $ 1,138.32
INITIAL PREMIUM MODE: Monthly

BASIC MONTHLY PREMIUM MONTHLY DEDUCTION DAY
BASIC CERTIFICATE ONLY $ 96.25 THE 1ST OF EACH MONTH

NO LAPSE COVERAGE EXPIRATION DATE: September 1, 2002

ACCELERATED BENEFIT RIDER AVAILABLE

<PAGE>

F 2 222 000 JOHN DOE

NET PREMIUM INITIAL ALLOCATION PERCENTAGES:
FIXED ACCOUNT 100%

GUARANTEED CERTIFICATE FEE:
1) $ 19.00 PER MONTH FOR THE FIRST CERTIFICATE YEAR; AND
2) $ 11.00 PER MONTH FOR EACH CERTIFICATE YEAR AFTER THE FIRST.

MAXIMUM PREMIUM LOAD: 10.0%

GUARANTEED INTEREST RATE FOR FIXED ACCOUNT VALUE: 4.0% PER YEAR
EXCESS INTEREST WILL BE AS PROVIDED BY AETNA. FOR ANY PORTION OF THE FIXED
ACCOUNT VALUE SECURED BY A LOAN, THE INTEREST CREDITED WILL NEVER BE LESS THAN
4.0% PER YEAR.

THE PLANNED PREMIUM AMOUNT SHOWN ABOVE MAY NOT CONTINUE THE CERTIFICATE IN
FORCE TO THE MATURITY DATE EVEN IF THIS AMOUNT IS PAID AS SCHEDULED. THE
PERIOD FOR WHICH THE CERTIFICATE WILL CONTINUE WILL DEPEND UPON:

1. THE AMOUNT, TIMING AND FREQUENCY OF PREMIUM PAYMENTS;
2. CHANGES IN THE SPECIFIED AMOUNT AND THE DEATH BENEFIT OPTIONS;
3. CHANGES IN INTEREST CREDITED, FUND PERFORMANCE AND MORTALITY DEDUCTIONS;
4. DEDUCTIONS FOR RIDERS AND BENEFITS;
5. PARTIAL SURRENDERS AND LOANS.

AN ADMINISTRATIVE FEE OF $25 MAY APPLY FOR EACH PARTIAL SURRENDER.

<PAGE>

F 2 222 000 JOHN DOE

TABLE OF
GUARANTEED MAXIMUM INSURANCE RATES
PER $1,000 OF THE AMOUNT AT RISK

<TABLE>
<CAPTION>
CERTIFICATE MONTHLY CERTIFICATE MONTHLY CERTIFICATE MONTHLY
YEAR RATE YEAR RATE YEAR RATE
<S> <C> <C> <C> <C> <C>
1997 0.26340 2016 1.29840 2035 8.78820
1998 0.28260 2017 1.43870 2036 9.75510
1999 0.30430 2018 1.59170 2037 10.80470
2000 0.32680 2019 1.75140 2038 11.91620
2001 0.35180 2020 1.91950 2039 13.09340
2002 0.37930 2021 2.10020 2040 14.31450
2003 0.41020 2022 2.30530 2041 15.60650
2004 0.44690 2023 2.56410 2042 16.96900
2005 0.48770 2024 2.82040 2043 18.43620
2006 0.53190 2025 3.14910 2044 20.05340
2007 0.58120 2026 3.52570 2045 21.92280
2008 0.63370 2027 3.93710 2046 24.22370
2009 0.68880 2028 4.38410 2047 27.46250
2010 0.74640 2029 4.85340 2048 32.51830
2011 0.80900 2030 5.34850 2049 41.36020
2012 0.87990 2031 5.88110 2050 57.86900
2013 0.96180 2032 6.47330 2051 90.90910
2014 1.05610 2033 7.14320 2052 0.00000
2015 1.16890 2034 7.90960
</TABLE>

<PAGE>

ELIGIBLE PERSONS
All Members of the New York State United Teachers Benefit Trust and their
Spouses are eligible to apply for coverage under this policy. An eligible person
may become insured under only one eligible class at a time, even if he/she is a
member of more than one class. An eligible person may only become covered for
that insurance which he/she elects and for which he/she pays the required
premium and provide evidence of insurability satisfactory to Aetna.

A Member is eligible on the latest of:

[bullet] the Issue Date of the policy; or

[bullet] the date he/she enters an eligible class of Members.

The Spouse of an eligible Member is eligible on the later of:

[bullet] the date the Member becomes insured under the Certificate; or

[bullet] the date he/she becomes the Spouse of an eligible Member;

but only if the Spouse is less than 80 years of age on that date.

PART III

CANCELLATION OF POLICY --
CONVERSION OF CERTIFICATE

CANCELLATION OF POLICY
The New York State United Teachers Benefit Trust may cancel this policy with
respect to all or any class or classes of Members by giving Aetna written notice
31 days before the cancellation date. Coverage under the Certificate will
terminate or, at the option of the Certificate Owner, may be converted.

The New York State United Teachers Benefit Trust will provide each of its
Members and their Spouses with advance notice of policy cancellation or
discontinuance. Such notice must be mailed or delivered to such Member at the
last known address of record at least 15 days before the date plan cancellation
or discontinuance is to take effect.

Subject to any applicable laws or regulations, Aetna has the right to cancel
this policy as to all or any class of Members at any time after the end of the
Grace Period if the policy premium has not been paid. Written notice of the
termination date must be given by Aetna to the New York State United Teachers
Benefit Trust.

Aetna reserves the right to discontinue accepting new applications under this
policy or as to any or all coverage of all or any class or classes of Members by
giving the New York State United Teachers Benefit Trust advance written notice
of when new applications will no longer be accepted. This date will not be
earlier than 31 days after Aetna has given written notice, unless another date
is agreed to by the New York State United Teachers Benefit Trust and Aetna.

4
<PAGE>

CONVERSION OF CERTIFICATE
If a Certificate terminates because (a) an Insured ceases to be a member of the
New York State United Teachers Benefit Trust, or (b) the insured is no longer
eligible for coverage under the Certificate as a Spouse and declines membership
in the New York State United Teachers Benefit Trust, or (c) the New York State
United Teachers Benefit Trust discontinues the group policy, the amount of
insurance which ceases may be converted to any substantially comparable flexible
premium general account life insurance policy except term that We make available
for such purpose and according to the Certificate terms. Aetna will send notice
to the Certificate Owner at the last known address of record of this right to
convert within fifteen days before or after the date plan cancellation or
discontinuance is to take effect. If such notice is given more than fifteen
days, but less than ninety days after the date plan cancellation or
discontinuance is to take effect, the time allowed for conversion shall expire
at the end of such ninety days. No evidence of insurability will be required.

If the Insured dies during the time allowed for conversion, the amount that
could have converted will be payable as a death benefit to the Beneficiary
designated by the Insured. In the event there is no designated beneficiary, We
may pay from the Death Benefit payable at a sum not exceeding $500 to any person
appearing to Us to be equitably entitled to same by reason of having incurred
funeral expenses incident to the death of the Insured.

The new policy will be issued:

[bullet] based on the Insured's Attained Age and sex at Our current rates
at the time of conversion (residents of the State of New York
will be issued a new policy based only on the Insured's Attained
Age at Our current rates at the time of conversion);

[bullet] with the same premium class as would have been assigned to the
Insured for the new policy had it been issued on this
Certificate's Issue Date;

[bullet] effective the date coverage under the Certificate terminates;

[bullet] subject to any limitations of risk or assignments outstanding
against this Certificate.

PART IV

PREMIUM PROVISIONS --
GRACE PERIOD PROVISIONS

PAYMENT OF PREMIUMS
The amount and frequency of each Certificate Owner's premium is shown on his/her
Certificate Specifications. The amount may be adjusted by Aetna from time to
time, as described therein.

GRACE PERIOD FOR CERTIFICATE
The 61-day Grace Period granted to a Certificate Owner for payment of his/her
premium is described in his or her Certificate.

PAYMENT OF PREMIUM BY NEW YORK STATE UNITED TEACHERS BENEFIT TRUST
The total policy premium payable by the New York State United Teachers Benefit
Trust will be the sum of all premiums remitted for persons insured under this
policy, excluding premiums that are not payable by payroll deduction. The
initial policy premium will be due on the Issue Date of this policy. After that,
the New York State United Teachers Benefit Trust will remit premium payments to
Aetna's Home Office on a weekly basis.

If any policy premium is not paid when due, this policy will be canceled as of
the premium due date; except as provided in the section called Policy Grace
Period.

5
<PAGE>

POLICY GRACE PERIOD
A policy Grace Period of 61 days from the premium due date will be granted to
the New York State United Teachers Benefit Trust for the payment of premiums
required under this policy. The policy will be in force during such Grace
Period. If such premium is not paid in such Grace Period, this policy will
cancel at the end of that Grace Period. This policy will cancel before that date
if the New York State United Teachers Benefit Trust gives written notice of
cancellation in advance to Aetna. If this policy cancels, the New York State
United Teachers Benefit Trust will be jointly and severally liable to Aetna for
all unpaid premiums for insurance which was in force.

PART V

POLICYHOLDER AND INSURANCE COMPANY MATTERS

DECLARATIONS
The first "policy month" starts on [ ]. Each subsequent
policy month starts on the [ ] of a calendar month. The first
"policy year" starts on [ ] and ends on [ ]. Each
subsequent policy year starts on a [ ] and ends on a [ ].

DATA REQUIRED
The New York State United Teachers Benefit Trust must give Aetna all data
required as to policy matters. All data which may have a bearing on insurance or
premiums will be open for Aetna to inspect while this policy is in force. Also,
such data must be open until the final rights and duties under this policy have
been resolved.

CLERICAL ERROR
Any clerical error by anyone in keeping records, or a delay in making an entry,
will not be the sole determination of the coverage's validity. A fair change in
premiums will be made when the error or delay is found.

MISSTATEMENTS
If the Insured's age is misstated, the amount of the Death Benefit will be
adjusted to reflect the coverage that would have been purchased by the most
recent Monthly Deduction at the correct age.

INCONTESTABILITY
The validity of this policy shall not be contested, except for non-payment of
premiums, after it has been in force for 2 years. All statements made by or for
the Insured are representations and not warranties. Aetna will not use any such
statement to void the insurance or defend against a claim unless the statement
is attached to and made a part of the policy or Certificate.

NON-DISCRIMINATION
In the management of this policy, the New York State United Teachers Benefit
Trust will act so as not to discriminate unfairly between persons in like
situations at the time of the action.

6
<PAGE>

POLICY CHANGES
This policy may be changed at any time by written agreement between Aetna and
the New York State United Teachers Benefit Trust provided all necessary
regulatory approvals have been received. The consent of any Certificate Owner is
needed if the change results in a reduction in benefits or an increase in
guaranteed charges. All agreements made by Aetna are signed by one of its
executive officers. No other person can change or waive any of the policy terms
or make any agreement binding Aetna. The New York State United Teachers Benefit
Trust will not have to give written approval of a change in the policy if:

the New York State United Teachers Benefit Trust asked for the change and
Aetna has agreed to it; and

the change is needed so that the policy will conform to any law, regulation
or ruling of:

a jurisdiction that affects a person covered under this policy; or

the federal government.

PART VI

MISCELLANEOUS PROVISIONS
COPY OF APPLICATION

DEATH BENEFIT
If the Insured dies while the Certificate is in force, Aetna will pay a death
benefit based upon the Death Benefit Option in effect on the date of death, less
the Loan Account Value plus any accrued interest less any outstanding payment
required keep the Certificate in force through the date of death. In the event
there is no designated beneficiary, We may pay from the Death Benefit payable at
a sum not exceeding $500 to any person appearing to Us to be equitably entitled
to same by reason of having incurred funeral expenses incident to the death of
the Insured.

The individual(s) or entity(ies) that will receive any Proceeds on the death of
the Insured is the Beneficiary named by the Certificate Owner. If no Beneficiary
has been named, or if no named Beneficiary is living at the time of the
Insured's death, all Proceeds will be paid to the Certificate Owner or the
Certificate Owner's executors, administrators or assigns.

NONFORFEITURE PROVISIONS
By Written Request the Certificate Owner may, at any time while the policy is in
force and according to the terms of the Certificate, elect to (a) surrender or
partially surrender his/her Certificate in exchange for payment of all or part
of its Surrender Value, (b) continue the coverage in effect as paid up or (c)
borrow up to 90% of the sum of the Certificate's Separate Account Value and
Fixed Account Value. Aetna reserves the right to defer payments as provided
under the Certificate's Right to Defer Payment provision.

THE SEPARATE ACCOUNT
The Separate Account established for the purpose of providing Variable Options
to fund this insurance is Variable Life Account B. Variable Life Account B was
established pursuant to a June 18, 1986, resolution of the Board of Directors of
Aetna. The Separate Account is registered with the SEC as a unit investment
trust under the Investment Company Act of 1940 and meets the definition of
separate account under the federal securities laws. Such registration does not
involve any approval or disapproval by the Commission of the Separate Account or
Aetna's management or investment practices or policies. Aetna does not guarantee
the Separate Account's investment performance.

7
<PAGE>

GUARANTEED MAXIMUM COST OF INSURANCE RATES
A table of Guaranteed Maximum Insurance Rates per $1,000 of the Amount at Risk
follows.

<TABLE>
<CAPTION>
CERTIFICATE MONTHLY CERTIFICATE MONTHLY CERTIFICATE MONTHLY
YEAR RATE YEAR RATE YEAR RATE

[Aetna logo]
AETNA LIFE INSURANCE AND ANNUITY COMPANY
151 Farmington Avenue
Hartford, Connecticut 06156
(A STOCK COMPANY)

By Group Policy
[GVUL - 000000]
Issued to Certain Members of the New York State United Teachers Benefit
Trust and their Spouses.

The insurance described in this Certificate is provided under and is subject, in
every respect, to all of the terms of the group policy. The group policy may be
changed or discontinued, in whole or in part, in accordance with its terms,
without the consent of any Insured.

The insurance described in this Certificate replaces and supersedes any
insurance previously in force under the group policy specified above.

RIGHT OF EXAMINATION

This Certificate may be returned to Aetna or its representative within 10 days
after its receipt. Return this Certificate to Aetna at 151 Farmington Avenue,
Hartford, Connecticut 06156. Upon its return this Certificate will be deemed
void from its beginning and all premiums paid will be refunded.

Signed for Aetna on its Issue Date.

/s/Dan Kearney
President

FLEXIBLE PREMIUM GROUP VARIABLE UNIVERSAL LIFE INSURANCE CERTIFICATE

[bullet} FLEXIBLE PREMIUMS PAYABLE UNTIL MATURITY DATE OR DEATH
[bullet} PROCEEDS PAYABLE UPON THE FIRST EVENT TO OCCUR - SURRENDER, MATURITY
OR DEATH
[bullet} NON-PARTICIPATING - NO DIVIDENDS PAYABLE

The amount or duration of the death benefit may be fixed or variable and
may increase or decrease. The death benefit is payable as described in the
Death Benefit Options and Proceeds sections of this Certificate.

Values in each Fund held in a Separate Account may increase or decrease
daily. Such values are not guaranteed as to dollar amount. Refer to the
Certificate Values section of this Certificate for more information.

<PAGE>

TABLE OF CONTENTS

CERTIFICATE SPECIFICATIONS

PART I DEFINITIONS

PART II GENERAL PROVISIONS

PART III SUICIDE AND INCONTESTABILITY

PART IV PREMIUMS AND REINSTATEMENT

PART V DEATH BENEFIT

PART VI CERTIFICATE VALUES

PART VII NONFORFEITURE PROVISIONS

PART VIII LOANS

PART IX CHANGES IN INSURANCE COVERAGE

PART X SETTLEMENT OPTIONS

APPLICATION

<PAGE>

PART I - DEFINITIONS

Annuitant
The person whose life determines the amount of life-contingent payments.

Attained Age
Issue age of the Insured as shown in the Certificate Specifications, increased
by the number of Certificate Years elapsed. Issue Age is the Insured's Age on
his/her birthday nearest this Certificate's Date of Issue.

Basic Monthly Premium
The amount of premium that must be paid to continue coverage in force under the
No Lapse Coverage provision.

Certificate Month
The Certificate Month begins each month on the same day of the month as the
Issue Date.

Certificate Year/Certificate Anniversary
The first Certificate Year is the 12-month period beginning on the Issue Date.
Each Certificate Anniversary is equal to the Issue Date plus 1 year, 2 years,
etc.

Fixed Account
A non-variable funding option available on this Certificate that guarantees a
minimum interest rate of 4% per year.

Fixed Account Value
The non-loaned portion of this Certificate's Total Account Value attributable to
the non-variable portion of this Certificate. The Fixed Account Value is part of
the general assets of the Company.

Fund(s)
One or more of the underlying variable funding options available under this
Certificate. Each of the funds is a separate investment portfolio of an open-end
management investment company (mutual fund) whose shares are purchased by the
Separate Account to fund the benefits provided by this Certificate.

Home Office
Our main office, located at 151 Farmington Avenue, Hartford, Connecticut 06156.

Insurability Requirement
A person satisfies the Insurability Requirement only if and when We accept that
person as insurable. To decide whether a person is insurable, We will require
proof of good health. The proof may include a health questionnaire, a physical
exam and other types of information and tests and will vary based on the amount
of coverage requested and Our standard practices at the time.

Insured
The person covered for life insurance under this Certificate. An Insured must be
an eligible Member or agency fee payer of the New York State United Teachers
Benefit Trust (a `Member') or a Member's Spouse.

Issue Date
The effective date of initial coverage. It is shown on the Certificate
Specifications or supplemental Certificate Specifications. Coverage is
contingent upon payment of the first premium and issue of this Certificate as
provided in the application.

1
<PAGE>

Loan Account Value
The sum of all unpaid loans. The amount necessary to repay all loans in full is
the Loan Account Value plus any accrued loan interest.

Maturity Date
The Certificate Anniversary on which the Insured's Attained Age is 100.

Member
A member or agency fee payer of the New York State United Teachers Benefit Trust
who is eligible for coverage under the group policy.

Minimum Specified Amount
The Specified Amount cannot be decreased below this amount. The Minimum
Specified Amount is shown in the Certificate Specifications.

Monthly Deduction
A charge assessed against the Total Account Value which includes the Cost of
Insurance, a monthly Certificate fee and any charges for supplemental benefit
riders. Monthly Deductions begin on the Issue Date and occur on each Monthly
Deduction Day thereafter.

Monthly Deduction Day
The first Monthly Deduction Day is the Issue Date. Monthly Deduction Days occur
each month thereafter on the same day of the month as the Issue Date.

Net Premium
Equal to the premium paid, less the deduction for the premium load.

Net Single Premium
The amount required to purchase a guaranteed benefit assuming the Certificate's
Surrender Value is allocated to the Fixed Account, using the Insured's Attained
Age and premium class. The Net Single Premium is determined using guaranteed
interest of 4.0% per year and guaranteed Cost of Insurance Rates.

Payee
The person who receives annuity payments.

Proceeds
The amount that We will pay upon the Death of the Insured, the Maturity Date or
upon surrender as described in the Proceeds provision.

Separate Account(s)
Variable Life Account B; or, when referring to a settlement option as described
in the Settlement Options provisions of this Certificate, Variable Annuity
Account B.

Separate Account Value
The portion of this Certificate's Total Account Value attributable to the
variable portion of this Certificate. This Certificate's Separate Account Value
is held in Variable Life Account B.

Specified Amount
The amount chosen by the Owner and used in determining the Death Benefit. It may
be decreased or increased as described in this Certificate. The Specified Amount
is shown in the Certificate Specifications or in the supplemental Certificate
Specifications, if later changed. The Specified Amount must be elected in
increments of $1,000 and cannot be decreased below the Minimum Specified Amount.

2
<PAGE>

Spouse
A Member's legally-married wife or husband.

Subsequent Application(s)
Any application after the initial application initiated by You or by Us.

Total Account Value
The sum of the Fixed Account Value, the Separate Account Value and the Loan
Account Value.

Valuation Date
Any day on which the New York Stock Exchange is open for trading and on which
any relevant Funds value their shares.

Valuation Period
The period of time commencing, usually at 4:15 p.m. Eastern Time on each
Valuation Date and ending 4:15 p.m. Eastern Time on the next Valuation Date.

Variable Annuity Account B
A Separate Account which segregates assets attributable to the variable portion
of annuity contracts and life insurance settlement options from other assets of
the Company. Its assets are invested in shares of the Funds. Variable Annuity
Account B holds all or a portion of the Certificate's Proceeds if a variable
settlement option is elected.

Variable Life Account B
A Separate Account which segregates assets attributable to the variable portion
of life insurance from other assets of the Company. Its assets are invested in
shares of the Funds.

Variable Option
One or more of the variable funding options available under this Certificate.

We, Our, Us, Company
Aetna Life Insurance and Annuity Company, its successors or assigns.

Written Request
A request in writing, in a form satisfactory to Us and received by Us at the
Home Office.

You/Your
The Owner of this Certificate.

PART II - GENERAL PROVISIONS

Owner
Unless otherwise specified in the Certificate or on the application form or as
later changed, this Certificate is owned by the Insured.

All rights granted by this Certificate or allowed by Us belong to the Owner.

Beneficiary
The individual(s) or entity(ies) that will receive any Proceeds on the death of
the Insured is the Beneficiary. The Beneficiary is as stated in the application
form, unless later changed.

If no Beneficiary has been named, or if no named Beneficiary is living at the
time of the Insured's death, all Proceeds will be paid to the Owner or the
Owner's executors, administrators, or assigns. We may pay from the Death Benefit
payable a sum not exceeding $500 to any person appearing to Us to be equitably
entitled to same by reason of having incurred funeral expenses incident to the
death of the Insured.

3
<PAGE>

Changes in Owner and Beneficiary
Unless this Certificate states otherwise, the Owner and the Beneficiary, or
both, may be changed. This may be done as often as desired by the Owner while
this Certificate is in force.

To change the Owner or Beneficiary Your Written Request must be sent to Us. When
We give Our written acceptance, the change will take effect as of the date Your
Written Request was signed. The change will be subject to any action We take
before Our written acceptance of the change.

Assignment
A copy of an Assignment must be on file at the Home Office. Until We receive
such notice, We will not be required to take notice of, or be responsible for,
any transfer of any interest in this Certificate by Assignment, agreement, or
otherwise.

We are not responsible for the validity of any Assignment. The rights of the
Owner and the interest of the Beneficiary will be subject to the rights of any
assignee of record.

Non-Participating
No dividends will be paid.

Certificate Settlement
All amounts payable by Us will be paid by the Home Office. We will deduct from
the amount payable at settlement any Loan Account Value plus accrued interest
and any overdue amount necessary to keep the coverage in force to the date that
Proceeds are payable. We may require return of this Certificate.

Misstatement of Age
If the Insured's age is misstated, the amount of the Death Benefit will be
adjusted to reflect the coverage that would have been purchased by the most
recent Monthly Deduction for the correct age.

Change of Address
You must notify Us at the Home Office of a change in Your mailing address. All
notices will be sent to the last known address of record.

Annual Report
At least once after each Certificate Anniversary We will send You a report. The
report will show the Total Account Value, the Surrender Value and the Death
Benefit on the date of the report. It will also show, since the last report, at
least the following information:

[bullet] gross premiums paid;

[bullet] the Cost of Insurance and the cost of riders;

[bullet] interest and investment return credited to the Total Account Value;

[bullet] the amount of any surrenders or Partial Surrenders;

[bullet] a summary of loan activity;

[bullet] a projection of the Total Account Value, Loan Account Value and
Surrender Value as of the succeeding Certificate Anniversary; and

[bullet] any other information required by the State of New York or by any
other jurisdiction.

4
<PAGE>

Illustration of Benefits
We will provide an illustration of future Death Benefits and Total Account
Values, based on stated assumptions, at any time upon Written Request. We
reserve the right to charge a fee for this service.

Proceeds
Proceeds on the Insured's death will equal:

[bullet] the Death Benefit; less

[bullet] the Loan Account Value plus any accrued interest; less

[bullet] any payment required to keep the Certificate in force through the date
of death.

Proceeds on death are computed as of the date of death and are payable after
receipt at the Home Office of due proof of the Insured's death and all other
information necessary for such payment to be made.

Proceeds on the Maturity Date will equal:

[bullet] the Total Account Value on the Maturity Date; less

[bullet] the Loan Account Value on the Maturity Date plus any accrued interest.

Proceeds on surrender are as described in the Surrender Value provision.

All Proceeds are subject to adjustment under the Misstatement of Age,
Incontestability, Suicide Exclusion and Grace Period provisions.

Right to Defer Payment
Payments of any Separate Account Value will be made within 7 days after Our
receipt of Your Written Request. However, the Company reserves the right to
suspend or postpone the date of any payment of any benefit or values for any
Valuation Period (1) when the New York Stock Exchange is closed (except holidays
or weekends); (2) when trading on the New York Stock Exchange is restricted; or
(3) when an emergency exists as determined by the Securities and Exchange
Commission (SEC) so that disposal of the securities held in the Funds is not
reasonably practicable or it is not reasonably practicable to determine the
value of the Funds' net assets. For payment from the Separate Account in such
instances, We may defer payment of:

[bullet] Surrender or Partial Surrender Values;

[bullet] any Proceeds on death in excess of the current Specified Amount; or

[bullet] any portion of the loan value.

Payment of any Fixed Account Value may be deferred for up to six months, except
when used to pay premiums due Us.

5
<PAGE>

Termination of Coverage
Coverage under this Certificate will terminate on the earliest to occur of:

[bullet] the death of the Insured; or

[bullet] the date coverage terminates as provided under the Grace Period
provision; or

[bullet] the Maturity Date; or

[bullet] the date coverage is surrendered; or

[bullet] the date the Insured ceases to be a Member of the New York State
United Teachers Benefit Trust, or

[bullet] the date the Insured is no longer eligible for coverage under the
Certificate as a Spouse and declines membership in the New York State
United Teachers Benefit Trust; or

[bullet] the date the New York State United Teachers Benefit Trust discontinues
the group policy.

Conversion Privilege
If a Certificate terminates because (a) an Insured ceases to be a member of the
New York State United Teachers Benefit Trust, or (b) the insured is no longer
eligible for coverage under the Certificate as a Spouse and declines membership
in the New York State United Teachers Benefit Trust, or (c) the New York State
United Teachers Benefit Trust discontinues the group policy, the amount of
insurance which ceases may be converted to any substantially comparable flexible
premium general account life insurance policy except term that We make available
for such purpose and according to the Certificate terms. Aetna will send notice
to the Certificate Owner at the last known address of record of this right to
convert within fifteen days before or after the date plan cancellation or
discontinuance is to take effect. If such notice is given more than fifteen
days, but less than ninety days after the date plan cancellation or
discontinuance is to take effect, the time allowed for conversion shall expire
at the end of such ninety days. No evidence of insurability will be required.

If the Insured dies during the time allowed for conversion, the amount that
could have converted will be payable as a death benefit to the Beneficiary
designated by the Insured. In the event there is no designated beneficiary, We
may pay from the Death Benefit payable a sum not exceeding $500 to any person
appearing to Us to be equitably entitled to same by reason of having incurred
funeral expenses incident to the death of the insured.

The new policy will be issued:

[bullet] based on the Insured's Attained Age and sex at Our current rates at
the time of conversion (residents of the State of New York will be
issued a new policy based only on the Insured's Attained Age at Our
current rates at the time of conversion);

[bullet] with the same premium class as would have been assigned to the Insured
for the new policy had it been issued on this Certificate's Issue
Date;

[bullet] effective the date coverage under the Certificate terminates;

[bullet] subject to any limitations of risk or assignments outstanding against
this Certificate.

Extra benefit riders in force on this Certificate at the time of conversion can
be issued on the new policy without satisfying the Insurability Requirement only
with Our consent. Extra benefit riders must be currently available for sale with
the new policy.

After an individual policy becomes effective for any person, that policy will be
in exchange for all benefits and privileges under the group Policy and this
Certificate as regards the person involved and the amount that could have been
converted.

6
<PAGE>

The new policy will not take effect if the Insured is not living on the issue
date of the new policy.

If the Conversion Privilege is not exercised, the Owner will receive the full
Surrender Value. The Surrender Value will be determined as of the end of the
Valuation Period in which coverage terminates.

PART III - Suicide and Incontestability

Suicide Exclusion
If the Insured dies by suicide within 2 years from the Issue Date, the insurance
will end and We will pay:

[bullet] the difference between payments made and amounts allocated to the
Separate Account; plus

[bullet] the Separate Account Value; plus

[bullet] any charges made under this Certificate's terms on the Separate
Account Value; less

[bullet] the sum of:

[bullet] the Loan Account Value transferred from the Fixed Account Value;
plus

[bullet] the interest due on the Loan Account Value; plus

[bullet] the value of any Partial Surrenders from the Fixed Account Value;
plus

[bullet] any interest earned on the Loan Account Value transferred to the
Separate Account Value.

If the Insured dies by suicide within 2 years from the Issue Date of any
increase in coverage, We will pay only the Monthly Deductions for the increase
in coverage.

If the Insured dies by suicide more than 2 years from the Issue Date but within
2 years from the Issue Date of any increase in coverage, We will pay:

[bullet] the Proceeds on death for any coverage in effect more than 2 years
from the Issue Date of coverage; plus

[bullet] the Monthly Deduction charges for the increase in coverage.

All amounts will be calculated as of the date of the suicide.

Incontestability
With respect to statements made by or on behalf of the Insured in the initial
application form(s) or in any subsequent Application Form(s) for the Insured: We
will not contest coverage under this Certificate after it has been in force
during the lifetime of the Insured for 2 years from the Issue Date.

With respect to statements made in any Subsequent Application Form(s) for the
Insured: We will not contest coverage relating to Subsequent Application Form(s)
after coverage has been in force during the lifetime of the Insured for 2 years
from the Issue Date of such coverage or from the Issue Date of any
reinstatement.

If coverage under this Certificate is contested, Your rights or the
Beneficiary's rights may be affected.

7
<PAGE>

PART IV - PREMIUMS AND REINSTATEMENT
General
Sufficient premiums must be paid to continue this Certificate in force. The
initial premium is due on the Issue Date. Premium due dates are measured from
the Issue Date.

We may apply limits for Planned premiums and Additional Premiums as necessary to
preserve the status of this Certificate as life insurance under federal tax law.

We may require that the Insured satisfy the Insurability Requirement if payment
of a new Planned Premium or an Additional Premium during the current Certificate
Year would increase the difference between the Death Benefit and the Total
Account Value.

Premium Load
Before a premium is allocated to the Total Account Value, a percentage of
premium, guaranteed not to exceed 10%, will be deducted to cover certain
expenses associated with sales, start-up and maintenance costs of this
Certificate.

Planned Premiums
A Planned Premium is the premium amount that the Member agrees to pay and We
agree to bill. The frequency of the Planned Premiums (for example, bi-weekly or
monthly) will be determined by the billing arrangement agreed to by Us and the
New York State United Teachers Benefit Trust. The amount and frequency of the
Planned Premium as of the Issue Date are shown in the Certificate
Specifications.

Additional Premiums
Additional Premiums are premium payments in excess of Planned Premiums.
Additional Premiums may be paid at any time while this Certificate is in force
and before the Maturity Date.

Allocation of Premium
Each Net Premium will be allocated to the Funds You select under Variable Life
Account B and/or the Fixed Account in the percentages indicated in the
Certificate Specifications. If these percentages are changed in accordance with
the Changes in Allocation Percentages provision of this Certificate, We will
send notification to You confirming the change.

Changes in Allocation Percentages
Allocation percentages may be changed at any time by Your Written Request to Us.
Allocations must be changed in whole percentages. The change will be effective
as of the date of the next premium payment after You notify Us.

No Lapse Coverage
This Certificate will not terminate within the 5-year period after the Issue
Date or the Issue Date of any increase if on each Monthly Deduction Day within
that period the sum of premiums paid within that period equals or exceeds:

[bullet] The sum of the Basic Monthly Premiums, for each Certificate Month from
the start of the period, including the current month; plus

[bullet] Any Partial Surrenders; plus

[bullet] Any increase in the Loan Account Value since the start of the period.

If on any Monthly Deduction Day within the 5-year period the sum of premiums
paid is less than the sum of the above and there is insufficient Surrender
Value, the Grace Period provision will apply.

8
<PAGE>

After the 5-year period expires, the Surrender Value may be insufficient to keep
this Certificate in force. Payment of an Additional Premium may be necessary.

The Basic Monthly Premium is shown in the Certificate Specifications or
Supplemental Certificate Specifications if later changed.

Grace Period
If You have paid sufficient premiums to meet the conditions of the No Lapse
Coverage period but outstanding loans have caused the Surrender Value to be
insufficient to allow a Monthly Deduction on the Monthly Deduction Day, We will
allow You 61 days of grace for payment of an amount sufficient to allow the
Monthly Deduction. We may require payment of the amount equal to the lesser of
(1) or (2) where:

(1) is the amount necessary to meet the loan-related conditions of the No
Lapse Coverage provision; or

(2) is an amount sufficient to cover the Monthly Deduction(s) that would result
in the Surrender Value being greater than zero.

If You have not paid sufficient premiums to meet the conditions of the No Lapse
Coverage period and the Surrender Value is insufficient to allow a Monthly
Deduction on a Monthly Deduction Day, We will allow You 61 days of grace for
payment of an amount sufficient to allow the Monthly Deduction. We may require
payment of the amount necessary to keep the coverage under this Certificate in
force for the current month plus two additional months.

During the days of grace, this Certificate will stay in force. If the Insured's
Death occurs during the days of grace, We will deduct an amount required to keep
this Certificate in force from that Death Benefit.

Reinstatement
If this Certificate terminates as provided in the Grace Period provision, it may
be reinstated. If this Certificate is reinstated the Certificate Year upon
reinstatement will be calculated as if there had never been a lapse in coverage.
To reinstate, the following conditions must be met:

[bullet] You must apply for reinstatement within 5 years of the date of
termination and before the Certificate's Maturity Date.

[bullet] We must receive evidence that the Insured satisfies the Insurability
Requirement.

[bullet] We must receive a payment at least equal to the sum of (1) and (2)
where:
1) is any portion of the Loan Account Value plus accrued interest on
the date of lapse exceeding the Total Account Value on the date
of lapse; and
2) a premium payment sufficient to keep the Certificate in force for
the current month plus two additional months.

If this Certificate is reinstated within a No Lapse Coverage period, all values
including the Loan Account Value would be reinstated as they were the date of
lapse.

If this Certificate is reinstated after a No Lapse Coverage period has expired,
the coverage would be reinstated on the Monthly Deduction Day following Our
approval. The payment received would first be applied to pay any positive excess
of the Loan Account Value plus accrued interest on the date of lapse over the
Total Account Value on the date of lapse with any remainder treated as a
premium. The Total Account Value at reinstatement would be the Net Premium paid
less the Monthly Deduction for that day. Any Loan Account Value would not be
reinstated.

9
<PAGE>

If this Certificate has been surrendered in exchange for payment of its full
Surrender Value, it cannot be reinstated.

Extra benefit riders will be reinstated only with Our consent.

PART V - DEATH BENEFIT
Death Benefit Options
General
The Proceeds payable upon the Insured's Death will be based upon one of the
following Death Benefit Options You choose. The Death Benefit Option as of the
Issue Date will be shown on the Certificate Specifications or, if changed, on
the Supplemental Certificate Specifications.

Option 1
The Specified Amount includes the Total Account Value. Under this option, the
Death Benefit will be the greater of the Specified Amount or a percentage of the
Total Account Value. This percentage is described in the table below.

Option 2
The Specified Amount is in addition to the Total Account Value. Under this
option, the Death Benefit will be the greater of the Specified Amount plus the
Total Account Value on the date of death or a percentage of the Total Account
Value. This percentage is described in the table below.

<TABLE>
<CAPTION>
- --------------- ------------- -------------- ------------- -------------- -------------- ------------- --------------
ACCOUNT ACCOUNT ACCOUNT ACCOUNT
ATTAINED VALUE ATTAINED VALUE ATTAINED VALUE ATTAINED VALUE
AGE % AGE % AGE % AGE %
- --------------- ------------- -------------- ------------- -------------- -------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
0-40 250%
41 243 51 178% 61 128% 71 113%
42 236 52 171 62 126 72 111
43 229 53 164 63 124 73 109
44 222 54 157 64 122 74 107
45 215 55 150 65 120 75-90 105
46 209 56 146 66 119 91 104
47 203 57 142 67 118 92 103
48 197 58 138 68 117 93 102
49 191 59 134 69 116 94 101
50 185 60 130 70 115 95 + 100
- --------------- ------------- -------------- ------------- -------------- -------------- ------------- --------------
</TABLE>

PART VI - CERTIFICATE VALUES
Basis of Calculation
The values of this Certificate equal or exceed those required by law in the
state where this Certificate is delivered. A detailed statement has been filed
with the State that shows how to compute those values.

Interest Credited
We will credit interest on the Fixed Account Value at the guaranteed rate of
4.0% per year. This guaranteed rate equals 0.32737%, per month, compounded
monthly. We may credit interest in excess of the guaranteed rate.

Beginning in Certificate Year 11 the interest earned by that portion of the Loan
Account Value equal to a Preferred Loan will be credited at a rate equal to the
guaranteed loan interest rate. Interest, at the rates specified, will be earned
by the Loan Account Value and credited to the Fixed Account Value and the
Separate Account Value in the same proportion in which the Loan Account Value
was originally deducted from these values.

10
<PAGE>

Interest credited to the Loan Account Value will never be less than 4.0% per
year.

Fixed Account Value
The Fixed Account Value will be:

[bullet] the value of the Net Premiums credited to the Fixed Account Value;
less

[bullet] the portion of Monthly Deductions taken from the Fixed Account Value;
plus

[bullet] interest credited; less

[bullet] any transfers of value out of the Fixed Account Value; plus

[bullet] any transfers from the Fund(s) to the Fixed Account Value; plus

[bullet] interest earned on the Loan Account Value attributable to the Fixed
Account Value; plus

[bullet] any loan repayments credited to the Fixed Account Value.

Separate Account Value
The Separate Account Value will be the sum of the Fund Account Values.

A. Fund Account Value

The portion of each Net Premium, transfer, or loan repayment allocated to a
Fund plus any interest earned on the Loan Account Value which is
attributable to that Fund is credited to this Certificate in the form of
accumulation units. Accumulation units measure the value of Your interest
in each applicable Variable Option. The number of accumulation units
credited is equal to that Fund's portion of the amount being credited
divided by the Accumulation Unit Value for that Variable Option for the
Valuation Period in which the amount being credited. Similarly,
accumulation units are canceled as surrenders, Partial Surrenders, loans,
transfers and deductions are made from that variable option.

The Fund Account Value of each Variable Option will equal the Accumulation
Unit Value for a Variable Option multiplied by the number of accumulation
units for that Variable Option credited to this Certificate.

B. Accumulation Unit Value

The Accumulation Unit Value is determined by multiplying the value of the
Variable Option's accumulation unit for the immediately preceding Valuation
Period by the net investment factor for the current period.

The net investment factor equals the net investment rate plus 1.0. The net
investment rate is determined separately for each Variable Option held in
Variable Life Account B as follows:

[bullet] the value of the Variable Option's accumulation units held in
Variable Life Account B at the end of a Valuation Period; less

[bullet] the value of the Variable Option's accumulation units held in
Variable Life Account B at the beginning of that Valuation
Period, adjusted by any taxes or provisions for taxes
attributable to the operation of Variable Life Account B; divided
by

11
<PAGE>

[bullet] the value of the Variable Option's accumulation units held in
Variable Life Account B at the beginning of the Valuation Period;
less

[bullet] a daily charge at an annual rate not to exceed 1.25% of net
assets of the Fund for mortality and expense risks attributable
to policies funded through Variable Life Account B. Beginning in
Policy Year 11, the annual rate will not exceed 0.40% of net
assets in Variable Life Account B.

Charges to Certificate Values
Charges and deductions made according to this Certificate's provisions will be
deducted from the Separate Account Value and the Fixed Account Value in the same
proportion that these Values bear to the sum of the Fixed Account Value and the
Separate Account Value on the date of the deduction.

The portion of the deduction attributable to the Separate Account Value will
reduce each Fund Account Value proportionately. The value deducted from each
Fund is determined by dividing the amount of the deduction attributable to that
Fund by the Variable Option's Accumulation Unit Value for the Valuation Period
when the charge was made. The resulting number of Variable Option accumulation
units will be deducted from the total accumulation units for that Fund.

The portion of the deduction attributable to the Fixed Account Value will be
deducted from that Value as a dollar amount.

Transfers Within Accounts
At any time prior to the Maturity Date, You may transfer all or part of each
Fund Account Value to any other Fund or to the Fixed Account Value at any time.
Funds may be transferred between the Funds or from the Funds to the Fixed
Account. We reserve the right to charge an administrative fee for more than 12
transfers per year.

We reserve the right to limit the total number of Funds You may elect over the
Certificate's lifetime to 15.

Within the forty-five days following a Certificate Anniversary, You may request
a transfer of a portion of the Fixed Account Value to one or more of the Funds.
This type of transfer is allowed only once within these forty-five days and We
must receive Your request at the Home Office within the forty-five days. The
transfer will be effective on the Valuation Date that Your request is received
by the Home Office. The amount of such transfer cannot exceed the greater of 25%
of the Fixed Account Value or $500. If the Fixed Account Values is less than or
equal to $500, You may transfer all or a portion of the Fixed Account Value. We
may increase this limit from time to time.

Accumulation units for each Variable Option will be added to or subtracted from
Your Separate Account Value, based on each Variable Option's Accumulation Unit
Value at the end of the Valuation Period when request for such transfer is
received by Us. A dollar amount will be added to or subtracted from the Fixed
Account Value according to the terms of Your request for transfer.

Monthly Deductions
Monthly Deductions will be deducted as described in the Charges to Certificate
Values provision.

[bullet] the Cost of Insurance as calculated below; plus

[bullet] a monthly Certificate fee, shown in the Policy Specifications; plus

[bullet] any charge for rider benefits

12
<PAGE>

Cost of Insurance
The Cost of Insurance on any Monthly Deduction Day will be (1) multiplied by the
result of (2) minus (3) where:

(1) equals the Cost of Insurance Rate on that date divided by 1,000;

(2) equals the Death Benefit on that date divided by 1.0032737;

(3) equals the Total Account Value on that date before computing the
Monthly Deductions for the Cost of Insurance for this Certificate.

Cost of Insurance Rate
The monthly Cost of Insurance rate is based on the Insured's issue age, number
of Certificate Years elapsed, Specified Amount and premium class. For an
increase in the Specified Amount, the premium class for that increase will be
used. If an Insured is assigned a premium class which designates "smoker" and
this classification changes, You may, by Written Request, reclassify the Insured
any time after the first Certificate Anniversary. Upon Our acceptance of the
change, supplemental Certificate Specifications will be sent to You.

The monthly Cost of Insurance Rates may be adjusted by Us from time to time.
Adjustments will be on a class basis and will be based on Our estimates for
future factors such as mortality, investment income, expenses, and the length of
time the Certificates stay in force. Any adjustments will be made on a
nondiscriminatory basis.

The rate during any Certificate Year will never exceed the rate shown for that
year in the Table of Guaranteed Maximum Insurance Rates in the Certificate
Specifications. Those rates are based on the 1980 Commissioners Standard
Ordinary Mortality Table D, unisex, 50% male, 50% female, Smoker or Nonsmoker.

Any change in the cost factors will be determined in accordance with procedures
and standards on file with the New York State Insurance Department.

PART VII - NONFORFEITURE PROVISIONS
Continuation of Coverage
Coverage under this Certificate will continue to the Maturity Date as long as
the Surrender Value is sufficient to cover each Monthly Deduction. If the
Surrender Value is insufficient to cover a Monthly Deduction, the Grace Period
provision will apply except as provided under the No Lapse Coverage provision.

Surrender Value
By Written Request You may, at any time while the Certificate is in force,
surrender the coverage in effect in exchange for payment of its full Surrender
Value. Partial Surrenders will also be allowed. We reserve the right to defer
payments as provided under the Right to Defer Payment provision.

The full Surrender Value under this Certificate will equal the Total Account
Value on the date of surrender less the Loan Account Value plus any accrued
interest.

Partial Surrenders
Partial Surrenders may be made beginning in the 2nd Certificate Year by Written
Request. The minimum amount of any Partial Surrender is $500. We may also charge
an administrative fee of $25 for each Partial Surrender.

13
<PAGE>

If the Death Benefit option in effect is Option 1, a Partial Surrender will
reduce the Total Account Value, Death Benefit, and Specified Amount. The
Specified Amount and Total Account Value will be reduced by equal amounts.
However, We will not allow a Partial Surrender if the Specified Amount will be
reduced below the Minimum Specified Amount.

If the Death Benefit option in effect is Option 2, a Partial Surrender will
reduce the Total Account Value and the Death Benefit. The Specified Amount will
not be reduced.

If the Death Benefit option in effect is determined as a percentage of the Total
Account Value, the Partial Surrender may not reduce the Specified Amount.

Paid-Up Nonforfeiture Option
By Written Request You may elect, at any time, to continue the coverage in
effect as paid-up life insurance.

The paid-up insurance may be surrendered at any time for its Surrender Value,
less any outstanding loan balance. The Surrender Value will be equal to the Net
Single Premium for the paid-up insurance on the date of surrender.

The Issue Date of the paid-up insurance will be the Monthly Deduction Day which
occurs on or immediately after the date Your request is received by Us.

As of the Issue date:

[bullet] no further premium payments, Monthly Deductions, excess interest
credits or changes in coverage may be made;

[bullet] Loans as described in this Certificate will be allowed; and

[bullet] all extra benefit riders, with the exception of the Accelerated Death
Benefit Rider, will terminate.

PART VIII - LOANS
General
We will grant loans. The amount of all loans will not be more than the Loan
Value. The Loan Value is 90% of the sum of the Separate Account Value and the
Fixed Account Value.

The amount of the loan will be transferred out of the Fixed Account and Separate
Account Values as described in the Certificate Values provision. The loan amount
increases the Loan Account Value.

The Loan Account Value plus accrued interest will reduce any Proceeds. If the
Loan Account Value exceeds the sum of the Separate Account Value and the Fixed
Account Value, the Grace Period provision will apply.

Loans and loan repayments will be effected as of the end of the Valuation Period
in which We receive the Written Request for the loan or the repayment,
respectively.

14
<PAGE>

Preferred Loans
Beginning in the 11th Certificate Year and on each Certificate Anniversary
thereafter, that portion of the Loan Value attributable to the Separate Account
Value will be treated as preferred. The interest rate charged on the Preferred
Loan will equal the interest rate credited to the portion of the Loan Account
Value equal to the Preferred Loan.

Loan Interest Rate Charged
Interest, at an annual effective rate, will be charged on the Loan Account
Value. The Loan Interest Rate is 8% per year on the Loan Account Value that is
not treated as a Preferred Loan. The Loan Interest Rate charged on the Preferred
Loan is 4%. Interest is due and payable on the next Certificate Anniversary, the
date a Certificate ends or upon full repayment of the Loan Account Value. Any
interest not paid when due will be added to the Loan Account Value on the
Certificate Anniversary and will itself bear interest on the same terms.

Repayment
A loan may be repaid in full or in part at any time prior to the Maturity Date
as long as the coverage is in force and the Insured is alive. The amount
necessary to repay all loans in full is the Loan Account Value plus any accrued
interest. Unless you specifically instruct Us otherwise, Additional Premiums
received will be considered loan repayments.

Loan repayments will be allocated to the Fixed Account Value and the Separate
Account Value in the same proportion in which the loan was taken. The Loan
Account Value will be reduced by the amount of any loan repayment.

Part IX - CHANGES IN INSURANCE COVERAGE

General
For any change in coverage We will require Your Written Request. Supplemental
Certificate confirming the change will be sent to You once the change is
completed.

We are obligated to identify transactions that may cause this Certificate to
become a Modified Endowment Contract. We reserve the right, pending advice from
You, to refrain from implementing the transaction.

Increase in Specified Amount
You may increase the Specified Amount at any time.

The Insured will be required to satisfy the Insurability Requirement.

The Issue Date for any increase will be shown in the Supplemental Certificate
Specifications.

The Surrender Value immediately after an increase must be at least three times
the sum of:

[bullet] the most recent Monthly Deduction from the Total Account Value; and

[bullet] the Specified Amount of the increase multiplied by the applicable Cost
of Insurance Rate divided by 1000.

The 5-year period as described in the No Lapse Coverage provision will restart
for the increase on the Issue Date of the increase.

The Basic Monthly Premium after the increase will be based on the Insured's
Attained Age and new Specified Amount.

15
<PAGE>

Decrease in Specified Amount
You may decrease the Specified Amount at any time after the 1st Certificate
Year. We will not allow a decrease in the Specified Amount if the Specified
Amount would be reduced below the Minimum Specified Amount.

For a decrease in the Specified Amount, the Issue Date will be the Monthly
Deduction Day on or next following the date on which Your Written Request is
received.

The decrease, including any decrease in connection with a Partial Surrender or a
change in Death Benefit Option, will reduce any past increases in the reverse
order in which they occurred.

The Basic Monthly Premium after a decrease, including any decrease in connection
with a Partial Surrender, will be based on the new Specified Amount.

Change in Death Benefit Option
Any change in the Death Benefit option is subject to the following conditions:

[bullet] We will not allow a change in the Death Benefit option if the
Specified Amount will be reduced below the Minimum Specified Amount.

[bullet] The change will take effect on the Monthly Deduction Day on or next
following the date on which Your Written Request is received.

[bullet] Evidence of insurability may be required.

Change from Option 1 to 2
Changes from Option 1 to 2 will be allowed at any time. The Specified Amount
will be reduced to equal the Specified Amount less the Total Account Value at
the time of the change.

The Basic Monthly Premiums following the change will be based on the new
Specified Amount.

Change from Option 2 to 1
Changes from Option 2 to 1 will be allowed at any time. The new Specified Amount
will equal the Specified Amount plus the Total Account Value as of the date of
the change.

The Basic Monthly Premiums following the change will be based on the new
Specified Amount.

Change of Fund(s)
If shares of any Fund are no longer available for investment by the Separate
Account or, in Our judgment, further investment in such shares should become
inadvisable or inappropriate in view of the purpose of the Certificate, We may
cease to make such Fund shares available under the Certificate prospectively, or
we may substitute shares of other Fund(s) for shares already acquired. We may
also, from time to time, add additional Funds. Any elimination, substitution or
addition of Funds will be done in accordance with applicable state or federal
securities laws. We reserve the right to substitute shares of another Fund for
shares already acquired without a proxy vote.

The investment policy of a Separate Account may not be changed without the
approval of the Insurance Commissioner of the State of Connecticut and the
approval of the Superintendent of the State of New York. The approval process
has been filed with the Commissioner.

We will notify You of any change.

16
<PAGE>

Separate Account
Variable Life Account B is a Separate Account established by Us in accordance
with the laws of the State of Connecticut and the State of New York. Income,
realized and unrealized gains and losses from the assets of Variable Life
Account B will be credited to or charged against Variable Life Account B without
regard to Our other income, gains, or losses. Variable Life Account B's
liabilities arise from the variable life insurance policies that it supports.
The assets of Variable Life Account B are available to cover the liabilities of
the General Account only to the extent that Variable Life Account B's assets
exceed its liabilities.

The value of the assets of Variable Life Account B is determined whenever the
Certificate's benefits vary and at the end of every Valuation Period.

PART X - SETTLEMENT OPTIONS
Separate Account

Variable Life Account B is a Separate Account established by Us in accordance
with the laws of the State of Connecticut. Income, realized and unrealized gains
and losses from the assets of Variable Life Account B will be credited to or
charged against Variable Life Account B without regard to Our other income,
gains, or losses. Variable Life Account B's liabilities arise from the variable
life insurance policies that it supports. The assets of Variable Life Account B
are available to cover the liabilities of the General Account only to the extent
that Variable Life Account B's assets exceed its liabilities.

The value of the assets of Variable Life Account B is determined whenever the
policy benefits vary and at the end of every Valuation Period.

Conditions

All or part of the Proceeds of this Certificate may be applied under one or more
of the options described below. An election shall be made by Written Request
filed with the Home Office. The Payee of Proceeds may make this election if no
prior election has been made. Our consent to the election of an option is
required if:

[bullet] the Payee is not a natural person receiving payments in his or
her own right; or

[bullet] the Payee is an assignee of this Certificate.

When any option is chosen, the Payee must designate whether the annuity will be:
(a) a fixed annuity
(b) a variable annuity, or
(c) a combination of (a) and (b).

If a fixed annuity is chosen, the annuity purchase rate for the option chosen
will reflect at least the minimum guaranteed interest rate of 3.0%.

Where a variable annuity is chosen, the Payee must elect an assumed annual net
return rate of 3.5% or 5.0%. If not elected, We will use an assumed annual net
return rate of 3.5%. The assumed annual net return rate is the interest rate
used to determine the amount of the first annuity payment under a variable
annuity.

If a variable annuity is chosen, the Payee must allocate the amount among the
allowable Funds. We reserve the right to allow no more than four funds to be
selected at any one time.

17
<PAGE>

Fund Transfers During the Annuity Period:
At the request of the Payee, all or any portion of the amount allocated to a
Fund may be transferred from any Fund to any other allowable Fund. During the
annuity period, the maximum number of allowable transfers in a calendar year is
four. We reserve the right to change the number of allowable transfers.

Transfer requests must be expressed as a percentage of the allocation among the
Funds of the amount upon which the variable annuity will be based. We may
establish a minimum transfer amount. Transfers will be processed as of the
Valuation Date next following when a transfer request is received in good order
at Our Home Office.

Annuity Options:
Option 1 -- Payments for a Stated Period of Time -- An annuity will be paid for
5 to 30 years. If payments for this option are made under a variable annuity,
the present value of all or a portion of any remaining guaranteed payments may
be withdrawn at any time. If a withdrawal is requested within 5 years after the
start of payments, it will be treated as a surrender.

OPTION 1
Payments for a Stated Period of Time
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%

---------------------------------------------------------------
Monthly Monthly
Years Payment Years Payment
---------------------------------------------------------------

5 17.91 18 5.96
6 15.14 19 5.73
7 13.16 20 5.51
8 11.68 21 5.32
9 10.53 22 5.15
10 9.61 23 4.99
11 8.86 24 4.84
12 8.24 25 4.71
13 7.71 26 4.59
14 7.26 27 4.47
15 6.87 28 4.37
16 6.53 29 4.27
17 6.23 30 4.18

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

18
<PAGE>

OPTION 1
Payments for a Stated Period of Time
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%

---------------------------------------------------------------
Monthly Monthly
Years Payment Years Payment
---------------------------------------------------------------

5 18.12 18 6.20
6 15.35 19 5.97
7 13.38 20 5.75
8 11.90 21 5.56
9 10.75 22 5.39
10 9.83 23 5.24
11 9.09 24 5.09
12 8.46 25 4.96
13 7.94 26 4.84
14 7.49 27 4.73
15 7.10 28 4.63
16 6.76 29 4.53
17 6.47 30 4.45

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

Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%

---------------------------------------------------------------
Monthly Monthly
Years Payment Years Payment
---------------------------------------------------------------

5 18.74 18 6.94
6 15.99 19 6.71
7 14.02 20 6.51
8 12.56 21 6.33
9 11.42 22 6.17
10 10.51 23 6.02
11 9.77 24 5.88
12 9.16 25 5.76
13 8.64 26 5.65
14 8.20 27 5.54
15 7.82 28 5.45
16 7.49 29 5.36
17 7.20 30 5.28

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

Option 2 -- Life Income based on the life of the Payee-- Payments will be made
until the death of the Annuitant. When this option is chosen, a choice from the
following must be made:

(a) payments cease at the death of the Annuitant;

(b) payments may be guaranteed for 5-30 years; or

19
<PAGE>

(c) cash refund: If the Annuitant dies, the Beneficiary will receive a lump
sum payment equal to the amount applied to the annuity option (less any
premium tax) allocated to the fixed annuity option less the total
amount of fixed annuity payments paid prior to such death. This cash
refund feature is only available if the total amount applied to the
annuity option is allocated to this feature.

OPTION 2
Life Income
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
Payments Guaranteed for a Stated Period of Years

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Adjusted Age of Cash
Annuitant None 5 10 15 20 Refund
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
50 $ 4.05 $ 4.05 $ 4.03 $ 3.99 $ 3.93 $ 3.89
51 4.12 4.11 4.09 4.05 3.99 3.94
52 4.19 4.19 4.16 4.11 4.04 4.00
53 4.27 4.26 4.23 4.18 4.10 4.06
54 4.35 4.34 4.31 4.25 4.16 4.12

55 4.44 4.42 4.39 4.32 4.22 4.19
56 4.53 4.51 4.47 4.40 4.29 4.26
57 4.62 4.61 4.56 4.48 4.35 4.33
58 4.72 4.71 4.65 4.56 4.42 4.41
59 4.83 4.81 4.75 4.64 4.49 4.49

60 4.95 4.93 4.86 4.73 4.55 4.57
61 5.07 5.05 4.97 4.83 4.62 4.66
62 5.20 5.17 5.08 4.92 4.69 4.76
63 5.34 5.31 5.20 5.02 4.76 4.85
64 5.49 5.45 5.33 5.12 4.83 4.96

65 5.65 5.61 5.47 5.22 4.89 5.06
66 5.82 5.77 5.61 5.33 4.96 5.18
67 6.01 5.94 5.75 5.44 5.02 5.30
68 6.20 6.13 5.91 5.54 5.08 5.42
69 6.41 6.33 6.07 5.65 5.14 5.56

70 6.64 6.54 6.23 5.76 5.19 5.70
71 6.88 6.76 6.41 5.86 5.24 5.84
72 7.14 7.00 6.59 5.97 5.28 6.00
73 7.43 7.26 6.77 6.06 5.32 6.16
74 7.73 7.53 6.96 6.16 5.35 6.33

75 8.06 7.82 7.14 6.25 5.38 6.51

- ---------------------------------------------------------------------------------------------------------------------
</TABLE>

Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.

20
<PAGE>

OPTION 2
Life Income
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
Payments Guaranteed for a Stated Period of Years

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Adjusted
Age of Annuitant None 5 10 15 20
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
50 $ 4.34 $ 4.34 $ 4.31 $ 4.27 $ 4.22
51 4.41 4.40 4.38 4.33 4.27
52 4.48 4.47 4.45 4.40 4.32
53 4.56 4.55 4.52 4.46 4.38
54 4.64 4.63 4.59 4.53 4.44

55 4.72 4.71 4.67 4.60 4.50
56 4.81 4.80 4.75 4.67 4.56
57 4.91 4.89 4.84 4.75 4.62
58 5.01 4.99 4.93 4.83 4.69
59 5.12 5.10 5.03 4.92 4.75

60 5.23 5.21 5.13 5.00 4.82
61 5.36 5.33 5.24 5.09 4.88
62 5.49 5.45 5.35 5.19 4.95
63 5.63 5.59 5.47 5.28 5.02
64 5.78 5.73 5.60 5.38 5.08

65 5.94 5.89 5.73 5.48 5.15
66 6.11 6.05 5.87 5.58 5.21
67 6.29 6.22 6.02 5.69 5.27
68 6.49 6.41 6.17 5.79 5.33
69 6.70 6.60 6.33 5.90 5.38

70 6.92 6.81 6.49 6.00 5.43
71 7.17 7.04 6.66 6.10 5.48
72 7.43 7.27 6.84 6.20 5.52
73 7.71 7.53 7.02 6.30 5.55
74 8.02 7.80 7.20 6.39 5.59

75 8.35 8.08 7.38 6.48 5.62

- ---------------------------------------------------------------------------------------------------------------------
</TABLE>

21
<PAGE>

OPTION 2
Life Income
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
Payments Guaranteed for a Stated Period of Years

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Adjusted
Age of Annuitant None 5 10 15 20
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
50 $ 5.26 $ 5.25 $ 5.22 $ 5.17 $ 5.11
51 5.33 5.32 5.28 5.23 5.15
52 5.40 5.38 5.34 5.29 5.20
53 5.47 5.45 5.41 5.35 5.26
54 5.54 5.53 5.48 5.41 5.31

55 5.63 5.61 5.56 5.47 5.36
56 5.71 5.69 5.63 5.54 5.42
57 5.80 5.78 5.72 5.61 5.47
58 5.90 5.88 5.81 5.69 5.53
59 6.01 5.98 5.90 5.77 5.59

60 6.12 6.09 6.00 5.85 5.65
61 6.24 6.21 6.10 5.93 5.71
62 6.37 6.33 6.21 6.02 5.77
63 6.51 6.46 6.33 6.11 5.83
64 6.66 6.60 6.45 6.20 5.89

65 6.82 6.75 6.57 6.30 5.95
66 6.99 6.91 6.71 6.39 6.01
67 7.17 7.08 6.85 6.49 6.06
68 7.36 7.27 6.99 6.59 6.12
69 7.57 7.46 7.15 6.69 6.17

70 7.80 7.67 7.30 6.78 6.21
71 8.05 7.89 7.47 6.88 6.25
72 8.31 8.13 7.64 6.97 6.29
73 8.59 8.38 7.81 7.06 6.33
74 8.90 8.64 7.99 7.15 6.36

75 9.23 8.93 8.16 7.23 6.38

- ---------------------------------------------------------------------------------------------------------------------
</TABLE>

22
<PAGE>

Option 3 -- Life Income based upon the lives of two Payees-- An annuity will be
paid during the lives of the Annuitant and a second Annuitant. Payments will
continue until both Annuitants have died. When this option is chosen, a choice
of the following must be made:

(a) 100% of the payment to continue after the first death;

(b) 66 2/3% of the payment to continue after the first death;

(d) 100% of the payment to continue after the first death with a guarantee
of 5-30 years:

(e) 100% of the payment to continue at the death of the second annuitant
and 50% of the payment to continue at the death of the Annuitant; or

(f) 100% of the payment to continue after the first death with a cash
refund feature. If the Annuitant and joint Annuitant die, the
Beneficiary will receive a lump sum payment equal to the amount
applied to the annuity option (less any premium tax) less the total
amount of fixed annuity payments paid prior to such death. This cash
refund feature is only available if the total amount applied to the
annuity option is allocated to this feature.

OPTION 3
Life Income for Two Payees
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Adjusted Ages
- ----------------------------- Option 3d
Annuitant Second Option 3a Option 3b Option 3c 10 Years Option 3e Option 3f
Annuitant Guaranteed
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
55 50 $ 3.69 $ 4.05 $ 4.27 $ 3.69 $ 4.03 $ 3.69
55 55 3.88 4.25 4.47 3.87 4.14 3.87
55 60 3.99 4.44 4.71 3.98 4.20 3.98

60 55 3.99 4.44 4.71 3.98 4.42 3.98
60 60 4.24 4.71 4.99 4.23 4.57 4.23
60 65 4.38 4.97 5.32 4.38 4.65 4.38

65 60 4.38 4.97 5.32 4.38 4.93 4.38
65 65 4.72 5.33 5.70 4.71 5.14 4.72
65 70 4.93 5.68 6.15 4.91 5.27 4.91

70 65 4.93 5.68 6.15 4.91 5.66 4.91
70 70 5.40 6.21 6.70 5.36 5.96 5.38
70 75 5.69 6.68 7.32 5.62 6.13 5.66

75 70 5.69 6.68 7.32 5.62 6.67 5.66
75 75 6.37 7.45 8.15 6.23 7.12 6.33
75 80 6.78 8.11 8.99 6.54 7.36 6.71

- ---------------------------------------------------------------------------------------------------------------------
</TABLE>

23
<PAGE>

OPTION 3
Life Income for Two Payees
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Adjusted Ages
- ----------------------------- Option 3d
Annuitant Second Option 3a Option 3b Option 3c 10 Years Option 3e
Annuitant Guaranteed
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
55 50 $ 3.97 $ 4.35 $ 4.56 $ 3.97 $ 4.31
55 55 4.16 4.54 4.76 4.15 4.42
55 60 4.27 4.73 5.00 4.26 4.48

60 55 4.27 4.73 5.00 4.26 4.70
60 60 4.51 4.99 5.27 4.50 4.84
60 65 4.66 5.25 5.61 4.65 4.93

65 60 4.66 5.25 5.61 4.65 5.22
65 65 4.99 5.61 5.99 4.98 5.42
65 70 5.19 5.97 6.44 5.17 5.54

70 65 5.19 5.97 6.44 5.17 5.93
70 70 5.67 6.49 6.99 5.62 6.23
70 75 5.95 6.96 7.61 5.87 6.40

75 70 5.95 6.96 7.61 5.87 6.95
75 75 6.64 7.73 8.43 6.48 7.40
75 80 7.04 8.39 9.29 6.79 7.64

- ---------------------------------------------------------------------------------------------------------------------
</TABLE>

24
<PAGE>

OPTION 3
Life Income for Two Payees
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Adjusted Ages
- ----------------------------- Option 3d
Annuitant Second Option 3a Option 3b Option 3c 10 Years Option 3e
Annuitant Guaranteed
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
55 50 $ 4.88 $ 5.26 $ 5.48 $ 4.88 $ 5.23
55 55 5.04 5.44 5.66 5.04 5.32
55 60 5.15 5.63 5.91 5.14 5.38

60 55 5.15 5.63 5.91 5.14 5.59
60 60 5.37 5.87 6.16 5.37 5.72
60 65 5.52 6.14 6.51 5.51 5.80

65 60 5.52 6.14 6.51 5.51 6.10
65 65 5.83 6.49 6.87 5.82 6.29
65 70 6.04 6.84 7.34 6.00 6.41

70 65 6.04 6.84 7.34 6.00 6.81
70 70 6.49 7.35 7.87 6.44 7.08
70 75 6.77 7.84 8.51 6.68 7.25

75 70 6.77 7.84 8.51 6.68 7.81
75 75 7.45 8.60 9.33 7.27 8.25
75 80 7.86 9.28 10.20 7.57 8.49

- ---------------------------------------------------------------------------------------------------------------------
</TABLE>

Option 4 - Payment of interest on Proceeds left with Us. Proceeds held under
this option may be left with Us after the Death of the Payee only with Our
consent. By Written Request, the Payee may later elect to:

[bullet] receive all or a portion of the amount held under this option; or

[bullet] apply all or a portion of this amount to Options 1,2 or 3 as described
above.

Other Options -- We may make other options available as allowed by the laws of
the state in which this Certificate is delivered.

25
<PAGE>

Other Terms of Annuity Options:

(a) Generally, the first annuity payment must be made as required by
federal law.

(b) Payments will be made on a monthly basis unless the Payee requests
otherwise.

(c) No choice of any annuity option may be made if the first payment would
be less than $50 or if the total payments in a year would be less than
$250 (unless otherwise required by state law).

(d) For purposes of calculating the guaranteed first payment of a variable
annuity or the payments for a fixed annuity, the Annuitant's and second
Annuitant's adjusted age will be used.
The Payee's and second Payee's adjusted age is his or her age as
of the birthday closest to the annuity commencement date reduced
by one year for annuity commencement dates occurring during the
period of time from July 1, 1992 through December 31, 1999. The
Annuitant's and second Annuitant's age will be reduced by two
years for annuity commencement dates occurring during the period
of time from January 1, 2000 through December 31, 2009. The
Annuitant's and second Annuitant's age will be reduced by one
additional year for annuity commencement dates occurring in each
succeeding decade.

(e) If a fixed annuity under Option 1, 2 or 3 is elected, We will use the
applicable current settlement option rate if it will provide higher
fixed annuity payments.

(f) When annuity payments start, the age of the Annuitant plus the number
of years for which payments are guaranteed must not exceed 95.

Death Benefit:
Upon the death of the Annuitant(s), any remaining guaranteed payments will
continue to the Beneficiary unless the Beneficiary elects to receive the present
value of any remaining guaranteed payments in a lump sum. Such payments will be
paid at least as rapidly as under the method of distribution then in effect. If
the Beneficiary dies while receiving payments, the present value of any
remaining guaranteed payments will be paid in one sum to the beneficiary's
estate.

The interest rate used to determine the first annuity payment will be used to
calculate the present value. The present value will be determined as of the
Valuation Period in which proof of death acceptable to Us

26
<PAGE>

FLEXIBLE PREMIUM GROUP VARIABLE UNIVERSAL LIFE INSURANCE CERTIFICATE

[bullet] FLEXIBLE PREMIUMS PAYABLE UNTIL MATURITY DATE OR DEATH
[bullet] PROCEEDS PAYABLE UPON THE FIRST EVENT TO OCCUR - SURRENDER,
MATURITY OR DEATH
[bullet] NON-PARTICIPATING - NO DIVIDENDS PAYABLE

[Aetna logo]

DISABILITY BENEFIT RIDER

This Extra Benefit Rider is attached to and made a part of this Certificate.
Unless defined herein, definitions of terms appearing in the Certificate will
also apply to the same terms appearing in this rider.

TOTAL DISABILITY BEFORE AGE 60

Definitions

Occupation
For the first full 24 months of Total Disability, Occupation is the Insured's
occupation when Total Disability starts. After 24 months, Occupation means any
occupation for which the Insured Employee is reasonably suited by education
training or experience.

Total Disability/Disabled
Total Disability is the inability due to sickness or injury to perform the
substantial and material duties of an Occupation for remuneration or profit.

Benefit

Benefit Amount
While this rider is in force, We will credit the Benefit Amount to the Account
Value of this Certificate on each Monthly Deduction Day during the Total
Disability of the Insured. Subject to the conditions of this Rider, the Benefit
Amount will apply retroactively on each Monthly Deduction Day since the start of
the Total Disability.

The Benefit Amount will be the greater of:

(1) the Basic Monthly Premium on that Monthly Deduction Day; or

(2) the Monthly Deduction for that date for the Insured's coverage and all
Extra Benefit Riders except this one.

Conditions
The following conditions apply:

1. the Total Disability of the Insured must start while this Rider is in force
and before the Insured is Attained Age 60 subject to this Rider's
Incontestability provision;

2. the Total Disability must be continuous for at least 180 days;

3. We must be given Notice and Proof as described in this Rider. See Notice
and Proof of Total Disability in this rider;

4. If Notice and proof are not given within the time period required by this
Rider; the Benefit Amount will not be waived more than 12 months before
Notice is given to Us; and

5. The Specified Amount of this Certificate may not be increased during the
Insured's Total Disability.

1
<PAGE>

Notice and Proof of Disability
We will require written Notice and Proof of the Total Disability. Notice must be
given to Us during the lifetime of the Insured and during the period of Total
Disability. Satisfactory Proof of the Total Disability of the Insured must be
given to Us within 12 months after We are given Notice.

Failure to provide notice or proof of Total disability will not reduce the claim
for this riders' Benefit Amount if it is shown that notice or proof of Total
Disability was provided as soon as reasonably possible.

After a claim is approved and the rider's benefit is exercised, We may require
further Proof at reasonable intervals. As part of the Proof, We may require that
doctors of Our choice examine the Insured at Our expense. If the required Proof
is not given benefits will cease. If the Insured recovers, benefits will cease.

Other Provisions

Excluded Disabilities
This Rider does not provide its Benefit for Total Disability which results from:
1. military (land, sea, or air) service by the Insured in time of war,
declared or undeclared;
2. injury that is intentionally self-inflicted.

Reinstatement
If the Insured is Totally Disabled on the date this Certificate lapses because
of insufficient value, We will reinstate the Certificate if:
1. the requirements of the Notice and Proof of Total Disability section of
this Rider are met;
2. the right to exercise this Rider's Benefit would otherwise have been
granted;
3. the application for reinstatement is received within 5 years of the date of
termination and before the Certificate's maturity date;
4. We receive evidence that the Insured satisfies the Insurability
Requirement; and
5. if We receive payment of any unpaid loan amount causing the Surrender Value
to be less than zero.

Monthly Rider Cost
The Monthly Rider premium for the coverage provided by this Rider will be shown
in the Certificate Specifications or the supplement Certificate Specifications.
The Monthly Rider Cost on each Monthly Deduction Day will be (a) multiplied by
(b) where:
(a) is the Benefit Amount for that date, assuming it was payable; and
(b) is the monthly rate, as determined from the table below. The monthly rider
rate is based on the Insured's attained Age as of the Issue Date of this
Rider.

The Monthly Deduction will be increased by the cost for this Rider.

There is no cost for this Rider on any Monthly Deduction Day for which the
Benefit Amount is payable.

Monthly Rider Rate
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
Age Rate Age Rate Age Rate
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Under 33 .02 48-49 .06 55-57 .10
- -------------------------------------------------------------------------------------------------------------
33-39 .03 50-52 .07 58-59 .11
- -------------------------------------------------------------------------------------------------------------
40-43 .04 53 .08
- -------------------------------------------------------------------------------------------------------------
44-47 .05 54 .09
- -------------------------------------------------------------------------------------------------------------
</TABLE>

Loans
This Rider's Benefit does not include the payment of loan interest due during
the period of Total Disability.

Incontestability
We cannot contest this Rider after it has been in force for 2 years from its
Issue Date with no Total Disability having occurred.

2
<PAGE>

Termination
This Rider will terminate on the first to occur:

[bullet] on the date the Insured terminates employment;

[bullet] the date that the Insured is Attained Age 60; unless the Benefit
Amount is currently being paid according to the terms of this Rider;
or

[bullet] the date the Insured's coverage under the Certificate ends.

Termination of this Rider will not prejudice a claim for Total Disability
which exists at that time.

This Rider has no cash value.

The Issue Date of this Rider will be the Issue Date shown in the Certificate
Specifications. This Rider is signed for Aetna on its Issue Date.

Aetna Life Insurance and Annuity Company

/s/ Dan Kearney
President

[Aetna logo] ACCELERATED BENEFIT RIDER

This Extra Benefit Rider is attached to and made a part of this Certificate.
Unless defined herein, definitions of terms appearing in this Certificate also
apply to the same terms appearing in this Rider. Coverage will be reduced upon
the receipt of an Accelerated Benefit.

ACCELERATED BENEFIT
If an Insured becomes Terminally Ill while life insurance coverage is in effect
for him/her under this Certificate, the Owner may request that We pay an
Accelerated Benefit. If We grant approval of any such request, We will pay to
the Owner, in one lump sum, the amount of Accelerated Benefit, subject to all of
the following terms.

Tax Consequences: While We cannot provide legal or tax advice to its Owners, an
Owner should carefully consider the tax consequences of requesting an
Accelerated Benefit. The amount of Accelerated Benefit received by the Owner may
be subject to income tax upon receipt. An Owner should consult his counsel or
tax advisor before requesting an Accelerated Benefit.

Terminally Ill Insured
An Insured is terminally ill if:
- he/she suffers from a progressive and medically recognized disease or
condition that is not expected to be cured or corrected; and

- he/she, to a reasonable medical probability and based on a generally
accepted prognostic protocol, will not survive more than 12 months
beyond the date of the request for an Accelerated Benefit.

Physician
An individual who is licensed to practice medicine and treat illness or injury
in the state in the United States in which treatment is received and who is
acting within the scope of that license.

Physician does not include:

- the Owner;
- the Terminally Ill Insured;
- a person who lives with either the Owner or the Terminally Ill Insured;
or
- a person who is part of the Owner's or Terminally Ill Insured's
immediate family (parent, spouse, sibling, or child).

Request for an Accelerated Benefit
The Owner may request an Accelerated Benefit at any time, prior to the death of
the Terminally Ill Insured, by completing a benefit request form and submitting
it to Us. The request must include a statement of a Physician that the Insured
is Terminally Ill. The Physician's statement must include: All medical test
results; laboratory reports; and any other information on which the statement is
based; including the generally accepted prognostic protocol used by the
Physician to determine the Terminally Ill Insured's expected remaining life
span.

1
<PAGE>

Within five days of receipt of an application to accelerate benefits, We will
provide the Owner with the following:

[bullet] an illustration demonstrating the effect of the Accelerated Benefit on
the Certificate's cash values and loans;

[bullet] a numerical computation of the amount of the Death Benefit which would
be payable upon death;

[bullet] a numerical computation of the amount of the Death Benefit that would
be payable upon acceleration; and

[bullet] a notice that other means may be available to achieve the intended
goal, including a Loan.

The Accelerated Benefit will be paid within fourteen days from the date on which
this information is transmitted in writing to the Owner. The Owner shall have
the right to rescind the request for payment of an Accelerated Benefit.

Independent Medical Exam
In considering a request for an Accelerated Benefit, We may require the
Terminally Ill Insured, at Our expense, to submit to an independent medical exam
by a Physician We choose. We may suspend Our review of a request for an
Accelerated Benefit until the exam has been completed and the results submitted
to Us.

Amount of Accelerated Benefit
The amount of Accelerated Benefit that will be payable to the Owner will be an
amount chosen by the Owner. The Amount of Accelerated Benefit chosen must be at
least 25% of the Terminally Ill Insured's Specified Amount, as shown in the
Certificate Specifications, and shall not exceed the lesser of:

[bullet] 50% of the Specified Amount, as shown in the Certificate
Specifications minus any outstanding Loan Balance and Partial
Surrenders; or

[bullet] $500,000.

Administration Charge
Any amount of Accelerated Benefit payable will be subject to an administrative
charge not to exceed $300.

Claims of Creditors
To the extent allowed by law:

[bullet] any Accelerated Benefit paid to an Owner is exempt from any legal or
equitable process for the debts of such Owner; and

[bullet] an Owner will not be required to request an Accelerated Benefit in
order to satisfy claims of creditors.

Effect of Accelerated Benefit on Certificate
A lien will be created when the Accelerated Benefit is paid to the Owner. The
lien will equal the Accelerated Benefit payable plus the administration charge.
The lien will accrue interest. Proceeds payable under this Certificate upon the
death of the Terminally Ill Insured will be reduced by the amount of any lien
plus accrued interest.

2
<PAGE>

Interest Charge On Lien
The interest on the lien will accrue daily at the lien interest rate. The lien
interest rate is an effective annual rate. Interest that accrues will be
deducted from the Proceeds payable upon the death of the Terminally Ill Insured.

The lien interest rate that applies at the time the lien is made will not change
during the life of the lien.

The lien interest rate at the time of the benefit acceleration shall be the
lesser of:

[bullet] the Certificate's loan interest rate and

[bullet] the current maximum adjustable policy loan interest rate based on
Moody's Corporate Bond Yield Averages -- Monthly Average Corporates --
published by Moody's Investors Service, Inc., or any successor
thereto, for the calendar month ending two months before the date of
application for an accelerate payment.

Aetna will notify the Owner at the time a lien is made of the lien interest rate
applicable to the lien.

Final Benefit Determination
Aetna will, after a review of all pertinent documentation (including, but not
limited to any Independent Medical Exam results), make the final determination
as to whether or not an Accelerated Benefit is payable.

Effect on Other Provisions of the Certificate
The addition of this Accelerated Benefit Rider will not affect the terms of the
Certificate entitled "Premiums and Reinstatement". However, the following also
applies:

At any time that the Certificate is reinstated in accordance with the
terms of the Reinstatement provision, Aetna will also reinstate any lien,
if one existed, plus lien interest accrued from the date of the
Accelerated Benefit payment through the date that coverage is reinstated.

The addition of this Accelerated Benefit Rider will not affect the terms of the
Certificate entitled "Grace Period". However, the following also applies.

At any time that the lien amount (including accrued interest) in
connection with an Accelerated Benefit exceeds the Proceeds payable upon
death, as described in this Certificate, We will allow You 61 days to pay
the excess in order to prevent Certificate termination.

The provisions of this Certificate entitled "Cost of Insurance Rate" will
remain unchanged; however, the following also applies

After an Accelerated Benefit is paid to an Owner, the Monthly Deductions
will continue to be made on the same basis as prior to the payment of the
Accelerated Benefit.

The provisions of this Certificate entitled "Loans" will remain unchanged;
however, the following also applies:

When an Accelerated Benefit is paid to an Owner, any future requests for
loans for the Terminally Ill Insured will be limited to the excess of the
Surrender Value over the sum of the lien plus accrued lien interest.

The provisions of this Certificate entitled "Nonforfeiture Provisions" will
remain unchanged; however, the following also applies:

3
<PAGE>

When an Accelerated Benefit is paid to an Owner, a future request for the
surrender value, Paid Up Insurance, or a Partial Surrender will be limited
to the excess of the surrender value over the sum of the lien plus accrued
lien interest.

The Beneficiary provision in the Certificate entitled "General Provisions" will
remain unchanged; however, the following also applies:

In the event that the Owner makes a request for an Accelerated Benefit,
such request will not be valid without the consent of an irrevocable
Beneficiary, if any.

The Assignment provision in the section of the Certificate entitled "General
Provisions" will remain unchanged; however, the following also applies.

In the event that a Terminally Ill Insured who is also the Owner of his/her
own insurance makes a request on his/her own behalf for an Accelerated
Benefit, such request shall not be a valid one without the consent of the
assignee, if any.

The following item is hereby added to the Termination of Coverage provision of
this Certificate entitled "General Provisions".

[bullet] the date on which any lien amount (including accrued interest) in
connection with an Accelerated Benefit equals or exceeds the Proceeds
payable upon death, as described in this Certificate; or

Limitations

[bullet] The provisions of this Rider apply only to a Terminally Ill Insured.
The Rider does not affect coverage under any other rider that is in
effect under this Certificate.

[bullet] Not more than one Accelerated Benefit will be payable with respect to
each Terminally Ill Insured to which this Rider applies.

[bullet] We reserve the right to require consent to pay an Accelerated Benefit
from any individual who has a vested right to receive the Proceeds.

[bullet] We will not cancel this Rider. Unless the Owner requests, in writing,
the termination of this Rider, it will remain in effect as long as
this Certificate remains in effect.

The Rider has no value. The Issue Date of this Rider will be the Issue Date
shown in the Certificate Specifications.

This Rider is attached to and made a part of this Certificate. It is signed for
Aetna on its Issue Date.

AETNA LIFE INSURANCE AND ANNUITY COMPANY

/s/ Dan Kearney
President

[Aetna logo] ACCIDENTAL DEATH BENEFIT RIDER

This extra benefit rider is attached to and made a part of this Certificate.
Unless defined herein, definitions of terms appearing in the Certificate also
apply to the same terms appearing in this Rider.

Definitions
Insured
As stated in the Certificate Specifications, the Insured is the individual who
has coverage as provided by this Rider.

Benefit
Benefit Amount
We will pay to the Beneficiary the Benefit Amount which is equal to the current
Specified Amount as shown in the Certificate Specifications or supplemental
Certificate Specifications, for the Insured, but not to exceed $200,000 upon
receipt by Us at Our Home Office of due proof that:

(1) death of the Insured occurred while his or her Coverage under the
Certificate is in force;

(2) death was the direct result, independent of all other causes, of bodily
injury caused by an accident which occurred while this Rider was in
force; and

(3) death occurred within 90 days after such injury.

If the Specified Amount for an Insured is changed, the Benefit Amount for this
Rider will change at the same time and by the same amount, except that the
Benefit Amount for this Rider may not exceed $200,000.

Risks Not Covered
This Rider does not cover death which is the direct or indirect result of:

(a) suicide, attempted suicide or intentionally self-inflicted injury;

(b) bodily or mental infirmity, or any other kind of disease;

(c) disease or bacterial infections; except that this will not apply if death
is caused by a disease or infection which results directly from the
accidental injury;

(d) operating a motor vehicle while intoxicated; as used herein, the term
"intoxicated" means that the blood alcohol level of the Insured at the
time of the accident was determined to equal or exceed the legal
presumption of intoxication under the laws of the jurisdiction in which
the accident took place;

(e) voluntary use of any controlled substance as defined in Title II of the
Comprehensive Drug Abuse Prevention and Control Act of 1970, as now or
hereafter amended; unless prescribed by a physician for the Insured;

(f) medical or surgical treatment; however, this exclusion does not apply if
such treatment is needed to treat an injury which results from a covered
accident and is performed within 90 days of the date of the injury;

(g) war (declared or undeclared) or any event incident to war;

1
<PAGE>

(h) operating, or riding in, or descending from, or with any kind of
aircraft, if:

(i) the Insured is a pilot, an officer or member of the crew of
aircraft;

(ii) the Insured is giving or receiving any kind of training or
instruction, or has any duties on board the aircraft, or duties
that require descent therefrom; or

(iii) the aircraft is operated by or under the direction of any
military (land, sea or air) authority, or is being used for any
test or experiment; or

(iv) committing or attempting to commit an assault or felony.

Other Provisions
Autopsy
If not prohibited by law, We shall have the right to conduct an autopsy at Our
own expense.

Monthly Rider Cost
The Monthly Rider Cost for the coverage provided by this Rider will be shown in
the Certificate Specifications, or the supplemental Certificate Specifications.
The Monthly Rider cost will be the Benefit Amount multiplied by the monthly rate
as determined from the table below. The monthly rider rate is based on the
Insured's Attained Age as of the Issue Date of this Rider. The Monthly Deduction
will be increased by the cost of this Rider.

Monthly Rider Rate
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Age Rate Age Rate Age Rate
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Under 35 .00007 48-52 .00010 61-63 .00013
- ---------------------------------------------------------------------------------------------------
35-41 .00008 53-56 .00011 64-65 .00014
- ---------------------------------------------------------------------------------------------------
42-47 .00009 57-60 .00012
- ---------------------------------------------------------------------------------------------------
</TABLE>

Termination
An Insured's Coverage under this Rider will end on the first of the following:

(a) the date the Insured reaches Attained Age 70; or

(b) the date the Insured's Coverage under the Certificate ends; or

This Rider has no value. The Issue Date of this Rider will be the Issue Date
shown in the Certificate Specifications. However, if Coverage under this Rider
is elected after such Issue Date, the Issue Date of this Rider will be shown in
the supplemental Certificate Specifications.

This Rider is attached to and made a part of this Certificate. It is signed for
Aetna on its Issue Date.

Aetna Life Insurance and Annuity Company

/s/ Dan Kearney
President

[Aetna Logo] CHILDREN INSURANCE RIDER
TERM INSURANCE

This Extra Benefit Rider is attached to and made a part of this Certificate. It
provides non-participating term life insurance on the child(ren) of the Insured
named in the Certificate Specifications. Unless defined herein, definitions of
terms appearing in the Certificate also apply to the same terms appearing in
this Rider.

CHILDREN INSURANCE BENEFIT
Benefit Amount
We will pay the Benefit Amount for this Rider upon receipt by Us at the Home
Office of due proof that the death of an Insured Child occurred while this Rider
was in force with respect to such child. The Benefit Amount for this Rider is
$4,000.

Insured Child
Insured Child means the Insured's natural child, legally adopted child or
stepchild covered under this Rider who is at least 15 days old and less than
Attained Age 19 (or less than Attained Age 23, if the child is an unmarried
full-time student dependent upon the Insured for support).

Coverage for the Insured Child under this Rider becomes effective on the later
of:

[bullet] the date the child first becomes eligible for insurance and the
Insured has made Written Request for such insurance and has signed any
required applications forms; or

[bullet] the date the child meets Evidence of Insurability Requirements.

The Insured Child cannot be insured for any other coverage under this
Certificate while this Rider is in force.

BENEFICIARY
Each Benefit Amount will be paid to the Beneficiary as stated in the application
or Subsequent Applications. Unless a different Beneficiary is named, the
Beneficiary under this Rider will be the Owner, if living. If the Owner is not
living, the Benefit Amount will be paid to the Owner or the Owner's executors,
administrators or assigns.

CONVERSION
If coverage under this Rider ends, the term insurance it provides may be
converted, subject to these rules.

[bullet] Insurance on an Insured Child may be converted only on the Certificate
Anniversary nearest that Child's 19th birthday or upon termination of
this Rider, whichever occurs first.

[bullet] This Rider may be converted to any policy we make available for such
purpose, without evidence of insurability, for up to 5 times the
Benefit Amount of this Rider.

[bullet] The premium rate for the new policy shall be based on the Insured
Child's Attained Age and sex at Our current rates at the time of
conversion (an Insured Child residing in the State of New York will be
issued a new policy based only on the Insured Child's Attained Age at
Our current rates at the time of conversion);

[bullet] The new policy may contain extra benefit riders, but only with Our
consent.

[bullet] Proper Written Request and payment of the first premium must be made
within 31 days of the Certificate Anniversary nearest the Child's 19th
birthday (or the child's 23rd birthday if the Insured Child is an
unmarried full-time student dependent upon the Insured for support).
The Date of Issue of the new Certificate will be the Certificate
Anniversary nearest the Child's 19th birthday (or the child's 23rd
birthday if the Insured Child is an unmarried full-time student
dependent upon the Insured for support) or upon termination of this
rider, whichever occurs first. The new Certificate will not take
effect if the Insured Child is not then living.

1
<PAGE>

OTHER PROVISIONS
Reinstatement
If the Certificate is reinstated in accordance with its Reinstatement provision,
this Rider may also be reinstated. The Certificate's reinstatement requirements
will apply. A Benefit Amount will not be paid if an Insured Child's death occurs
after the Grace Period and before Reinstatement.

Monthly Rider Cost
The Monthly Rider Cost for the coverage provided by this Rider will be shown in
the Certificate Specifications, or the supplement Certificate Specifications.
The Monthly Rider cost will be the Benefit Amount multiplied by .0005. The
Monthly Deduction will be increased by the cost of this Rider.

Suicide
If an Insured Child dies by suicide within 2 years from the date the Insured
Child is covered under this Rider, we will refund the Monthly Rider Cost paid
with respect to such Insured Child. This Rider's Benefit Amount will not be
paid.

If an Insured child dies by suicide within 2 years from the date the Insured
Child is covered under this Rider, but within 2 years from the Issue Date of any
increase in Coverage, We will pay:

[bullet] the Benefit Amount for any coverage in effect more than 2 years from
the date the Insured Child is covered under this Rider; plus

[bullet] the Monthly Rider Cost for the increase in his or her coverage.

All amounts will be calculated as of the date of the suicide.

Incontestability
We will not contest this Rider after it has been in force on the life of an
Insured Child for 2 years. With respect to statements made in any Reinstatement
Applications for an Insured Child: We will not contest coverage after coverage
has been in force on the life of an Insured Child for 2 years from the effective
date of any Reinstatement.

Termination
The insurance on each Insured Child will end on the first to occur:

[bullet] the Certificate Anniversary nearest that child's 19th birthday (or the
child's 23rd birthday, if the Insured Child is an unmarried, full-time
student dependent upon the Insured for support);

[bullet] the date the Certificate terminates; or

[bullet] the death of the Insured named in the Certificate Specifications; or

[bullet] the Monthly Deduction Date after We receive Your Written request to
terminate this rider; or

This Rider has no cash value. The Issue Date of this Rider will be the Issue
Date shown in the Certificate Specifications. However, if coverage under this
Rider is elected after such Issue Date, the issue Date of this Rider will be the
shown in the supplement Certificate Specifications.

2
<PAGE>

This Rider is attached to and made a part of this Certificate. It is signed for
Aetna on its Date of Issue.

AETNA LIFE INSURANCE AND ANNUITY COMPANY

/s/ Dan Kearney
President

APPLICATION FOR GROUP VARIABLE UNIVERSAL LIFE INSURANCE COVERAGE

Application is hereby made to AETNA LIFE INSURANCE AND ANNUITY COMPANY, of
Hartford, Connecticut for a policy of Group Variable Universal Life Insurance to
be issued to the undersigned applicant.

Applicant: New York State United Teachers Benefit Trust

Address: Albany, NY 12257

- -------------------------------------------------------------------------------
Only the Members of the New York State United Teachers Benefit Trust and their
Spouses are eligible for coverage under this policy. No insurance shall become
effective as to any person except as provided in the group policy.
- -------------------------------------------------------------------------------

<TABLE>
<S> <C>
Signed at Albany, NY John J. Doe, President
Applicant

on September 1, 1997 By I M Agent
Date

I M. Witness Exec. VP, New York State United Teachers Benefit Trust
Witness Title
</TABLE>

[Aetna logo] Aetna Life Insurance and Annuity Company
Hartford, Connecticut 06156
Supplement to Application for
Variable Life Insurance

<TABLE>
<S> <C>
1. Proposed Insured A John J. Doe
-----------------------------------------------------------------------------------------------------
First Middle Last
Proposed Insured B
-----------------------------------------------------------------------------------------------------
First Middle Last

2. Premium Payment Allocation (Indicate Whole Percentages. Percentages must equal 100%.)

Global International Growth & Income -- Stocks & Bonds
_______ % Janus Aspen Worldwide Growth Portfolio _______ % Aetna Investment Advisers Fund
_______ % Scudder International Portfolio _______ % Janus Aspen Balance Portfolio
Aggressive Growth Income
_______ % Alger American Small Cap Portfolio _______ % Aetna Income Shares
_______ % Janus Aspen Aggressive Growth Portfolio _______ % Janus Aspen Short-Term Bond Portfolio
Growth Stability of Principal
_______ % Fidelity VIP II Contrafund Portfolio _______ % Aetna Variable Encore Fund (Money Market)
_______ % Janus Aspen Growth Portfolio 100% Aetna Fixed Acount
_______ % American Century VP Capital Appreciation Asset Allocation
Growth & Income -- Stocks _______ % Aetna Ascent Variable Portfolio
_______ % Aetna Variable Fund _______ % Aetna Crossroads Variable Portfolio
_______ % Aetna Variable Index Plus Portfolio _______ % Aetna Legacy Variable Portfolio]
_______ % Fidelity VIP Equity-Income Portfolio

Owner's Suitability

The rules of the National Association of Securities Dealers, Inc. require that
the Sales Representative have reasonable grounds to believe that the sale is
suitable for the Owner, based on information provided by the Owner as shown on
this form and on information known by the Sales Representative.

3. Owner's Taxpayer Identification Number: [checkmark] Individual ###-##-####
|_| Partnership |_| Corporation |_| Trustee |_| Other |_||_|-|_||_||_||_||_||_||_|

4. Age: 45
5. Citizenship: US
6. Marital Status: M
7. Number of Dependents: 0
8. Occupation: Teacher
9. Employers' Name(s) & Address: City of XXXXXXXXXX
-------------------------------------------
--------------------------------------------------------------------------
10. Investment Objectives (check all applicable objectives)
|_| Capital Preservation
|_| Tax Advantage/Deferral
|_| Current Income
|_| Growth and Income
[checkmark] Growth
|_| Aggressive Growth
|_| Other (please specify) ____________________________

11. Insurance Objectives (check all applicable objectives)
[checkmark] Estate Creation
|_| Estate Conservation
|_| Other (please specify) ___________________________________________

<PAGE>

12. Investment Knowledge: |_| Limited [checkmark] Good |_| Extensive

13. Risk Tolerance: |_| None |_| Low [checkmark] Medium |_| High

14. Is the coverage in accord with the Owner's insurance objectives and anticipated financial needs? [checkmark] Yes |_| No

15. Total Income of Owner's Immediate Family
|_| $250,000+
|_| $100,000 - $249,999
[checkmark] $50,000 - $99,999
|_| $25,000 - $49,999
|_| Under $25,000

16. Estimated Net Worth of Owner's Immediate Family
|_| $1,000,000+
|_| $500,000 - $1,000,000
[checkmark] $250,000 - $500,000
|_| $100,000 - $250,000
|_| Under $100,000

17. Federal Tax Bracket: |_| 15% [checkmark] 28% |_| Other (please specify) ______________________________

18. Is the Owner associated with a National Association of Securities Dealers, Inc. firm? |_| Yes [checkmark] No

19. If jointly, or business, owned, please provide the name(s) and signature(s)
of the person(s) authorized to exercise ownership rights:__________________
___________________________________________________________________________

I understand that:

THE AMOUNT AND DURATION OF THE DEATH BENEFIT MAY VARY UNDER SPECIFIED CONDITIONS.

VALUES NOT IN THE FIXED ACCOUNT MAY INCREASE OR DECREASE IN ACCORDANCE WITH
THE EXPERIENCE OF THE SEPARATE ACCOUNT.

THE AMOUNT OF THE MATURITY BENEFIT IS NOT GUARANTEED BUT IS DEPENDENT UPON
THE THEN SURRENDER VALUE.

ILLUSTRATIONS OF BENEFITS, INCLUDING DEATH BENEFITS, ACCOUNT VALUES, AND
SURRENDER VALUES ARE AVAILABLE UPON REQUEST.

I hereby acknowledge receipt of the Prospectus dated May, 1997 for all
applicable prospectus(es) pertaining to the Separate Account and all of the
variable options.

Signed at _____________City, State __________________ on 09/01/97
(City, State) (Mo/Day/Yr)

By John J. Doe By _______________________________
Signature of Owner Signature of Owner

Based on information obtained from the Owner, I believe the investment is
suitable for the Owner's objectives.

I M Agent on 09/01/97
Signature of Registered Representative (Mo/Day/Yr)
</TABLE>

Application for INDIVIDUAL
LIFE INSURANCE

NEW YORK

[Aetna logo]

Aetna Life Insurance and Annuity Company

<PAGE>

When completing the application Please:

[bullet] Print legibly. (If possible,
use black ink.) This will
ensure that application
information is accurate and
easy to photocopy.

[bullet] If blood or urine is required,
please sign the consent form.
(State of residence determines
appropriate consent form to be
used.

[bullet] Include any special
supplements that may be
required, (e.g. aviation
and/or avocation, child rider,
Variable Life supplement.

[bullet] Ensure that automatic
requirements (blood, exam,
etc.) are completed.

[bullet] Complete enclosed Transmittal
letter for applications of
$1,000,000 to $5,000,000, or
if there is special
information that would assist
the underwriter in
underwriting the case. Cases
over $5,000,000 please submit
supporting documentations such
as audited financial
statements, income tax
returns, etc.

[bullet] Ask all questions of the
proposed insured. Do not
assume anything.

[bullet] If you must change application
information prior to
submission, draw a line
through it, enter the correct
information and have the
proposed insured initial the
change.

[bullet] Signatures required on:
application, ACP form if
requested, MIB authorization,
Owner/Taxpayer form and TIA.
Agent must also sign the
application and transmittal
letter.

[bullet] Agent signature must include
the agent license number and
not the agent code number.

2
<PAGE>

<TABLE>
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
[Atena logo] LIFE INSURANCE APPLICATION
Aetna Life Insurance and Annuity Co.
151 Farmington Avenue
Hartford, CT 06156-1961
- ---------------------------------------------------------------------------------------------------------------------------------
General ANSWER ALL QUESTIONS IF:
Information [checkmark] New Insurance |_| Increase Amount $ |_| Contract No.
-------------- ---------------
ANSWER QUESTIONS 1, 8 (if applicable), 4, 20, 21 & Owner/Taxpayer Id. Number
|_| Term Conversion/Guaranteed Option $ . Continue $ as term
----------------- ----------------
|_| Other Contract Change _________________________________ ANSWER APPLICABLE QUESTIONS
|_| Contract Number to be changed/converted
- ---------------------------------------------------------------------------------------------------------------------------------
ST OF DEL [checkmark] STATE OF DELIVERY _________________________________________________________________________________
- ---------------------------------------------------------------------------------------------------------------------------------
(Proposed) 1. Print Full Legal Name (First, Middle, Last)
Insured John J. Doe
----------------------------------------------------------------------------------------------------------------
Information Residence Address (Number, Street) P. O. Box
123 Main Street
----------------------------------------------------------------------------------------------------------------
City, State and Zip Code
Albany, NY 12212
----------------------------------------------------------------------------------------------------------------
Sex Date of Birth (mm/dd/yy) Place of Birth MVR License # and License State
Male 01/01/52 Albany, NY 0612345 NY
----------------------------------------------------------------------------------------------------------------
2a. Occupation (Title & Give Exact Duties)
Teacher
----------------------------------------------------------------------- ----------------------------------------
2b. Employer's Name and Address 2c. Annual Income
City of Albany $75,000
----------------------------------------------------------------------------------------------------------------
2d. Amount of life insurance presently in force:
Aetna $0.00 ADB $0.00 Other Companies $0.00 ADB $0.00
--------------- -------------- -------------- ----------
Are there current negotiations with other companies? |_| Yes [checkmark] No
If Yes, advise Company and results.
--------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
3. Will life insurance or annuity in any Company be replaced or changed if insurance applied for is
issued? |_| Yes [checkmark] No
Explain
- ---------------------------------------------------------------------------------------------------------------------------------
Insurance 4. Basic Plan Group Variable UL Face Amount $175,000
-------------------------------------- -------------------------------
Information Death Benefit Option (if applicable) Option 1
--------------------------------------------------------------------
Dividend Option |_| Pay in Cash |_| Reduce premium (not for salary deduction)
|_| Other |_| Specify
----------------------------- ------------------------------------
Direct Billing Frequency |_| Annual |_| Semi-Annual
|_| Quarterly [checkmark] Monthly (ACP/List Bill) Plan
List Supplemental Benefits/Riders & Amounts (e.g. WP, ADB, EPOR, ROPR)

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

* For CIR - Submit application supplement(1)

3
<PAGE>

- ---------------------------------------------------------------------------------------------------------------------------------
(Proposed) NON MEDICAL - QUESTIONS 5-19 SHOULD NOT BE COMPLETED FOR TERM
Insured CONVERSIONS OR EXERCISE OF GUARANTEED INSURABILITY OPTION
Information 5. HAVE YOU WITHIN 2 YEARS: (IF YES, EXPLAIN)
a. Flown as a pilot or crew member or intend to do so? (If Yes, furnish
Aviation supplement) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |_| Yes
[checkmark] No
b. Engaged in motor vehicle or boat racing, rock or mountain climbing,
hang gliding or sky, skin or scuba diving or intend such activities?
(If Yes, furnish Avocation supplement) . . . . . . . . . . . . . . . . . . . . . . |_| Yes
[checkmark] No
c. Had your license suspended or revoked, had 3 or more moving violations,
or been charged with driving under the influence of alcohol or drugs? |_| Yes
[checkmark] No

d. Frequently traveled outside of the United States or intend to do so? . . . . . . . |_| Yes
[checkmark] No
6. HAVE YOU EVER:
a. Had insurance refused, or offered only with an extra premium? . . . . . . . . . . |_| Yes
[checkmark] No

b. Been arrested and convicted for a felony offense?. . . . . . . . . . . . . . . . . |_| Yes
[checkmark] No
7. HAVE YOU IN THE LAST 5 YEARS: (IF YES, EXPLAIN)
a. Used hallucinogenic or narcotic drugs not prescribed by a doctor?. . . . . . . . . |_| Yes
[checkmark] No

b. Used alcoholic beverages? (Note type, quantity and frequency). . . . . . . . . . . |_| Yes
[checkmark] No
c. Had or been advised to have medical treatment or counseling from a
commonly recognized practitioner or organization for alcohol or drug use?. . . . . |_| Yes
[checkmark] No
- ----------------
Smoking 8. a. Have you smoked cigarettes within the past 12 months?. . . . . . . . . . . . . . . |_| Yes
[checkmark] No
Information If Yes, how much? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ------------------

b. If No, have you used any other tobacco products within the past 12 months
(e.g. cigar, pipe, smokeless tobacco)? . . . . . . . . . . . . . . . . . . . . . . |_| Yes
[checkmark] No

If Yes, have you smoked cigarettes within the past 10 years? . . . . . . . . . . . |_| Yes
[checkmark] No
c. Have you used any nicotine substitutes within the past 12 months
(e.g. patch, gum)? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |_| Yes
[checkmark] No
- ----------------
Height & 9. a. What is your current height? . . . . . . . . . . . . . . . . . . . . . . . . . . . 6'0"
------------------
Weight b. What is your current weight? . . . . . . . . . . . . . . . . . . . . . . . . . . . 200lbs
------------------
c. If under age 2, birth weight? . . . . . . . . . . . . . . . . . . . . . . . . . .
------------------
- ----------------
History 10. Have you had a history of heart, lung or liver disorder, stroke, diabetes or
cancer? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |_| Yes
[checkmark] No
- ---------------------------------------------------------------------------------------------------------------------------------
Attending 11. Name, address and phone number of personal physician, date, reason
last seen and results.
Physician Dr. Jones
----------------------------------------------------------------------------------------------------------------
Information 10 Summer Street, Albany, NY 12257 (212) 474-4777
----------------------------------------------------------------------------------------------------------------
Routine Physical on 9/30/96.
----------------------------------------------------------------------------------------------------------------

- ---------------------------------------------------------------------------------------------------------------------------------
ADDITIONAL INFORMATION (Give details of YES answers, dates and
results) For additional space please use Addendum Sheet.
-------------------------------- -------------------------------------------------------------------------------
QUES. #
- ---------------------------------------------------------------------------------------------------------------------------------

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

IF AN EXAM IS REQUIRED AND QUESTION 10 IS ANSWERED "YES" AN MD EXAM IS REQUIRED

4
<PAGE>

- ---------------------------------------------------------------------------------------------------------------------------------
(Proposed) PART II - QUESTIONS 12 - 19 REQUIRED EVEN FOR EXAMINED BUSINESS
Insured 12. HAVE YOU EVER IN THE LAST 10 YEARS HAD OR BEEN TREATED
Information FOR: (IF YES, EXPLAIN)
a. Mental or nervous disorder? . . . . . . . . . . . . . . . . . . . . . . . . . . . |_| Yes
[checkmark] No
b. Disease of the nervous system or brain? . . . . . . . . . . . . . . . . . . . . . |_| Yes
[checkmark] No
c. Fainting, seizures, paralysis or stroke?. . . . . . . . . . . . . . . . . . . . . |_| Yes
[checkmark] No
d. Shortness of breath, persistent cough? . . . . . . . . . . . . . . . . . . . . . |_| Yes
[checkmark] No
e. Emphysema or other lung disease? . . . . . . . . . . . . . . . . . . . . . . . . |_| Yes
[checkmark] No
f. Chest pain, high blood pressure, heart attack, heart murmur, disease of the
heart or blood vessels? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |_| Yes
[checkmark] No
g. Hepatitis, cirrhosis, or other disease of the liver or pancreas? . . . . . . . . |_| Yes
[checkmark] No
h. Ulcer, colitis, chronic diarrhea, or other disorder of the stomach or intestines? |_| Yes
[checkmark] No
i. Sugar, albumin, blood or pus in urine?. . . . . . . . . . . . . . . . . . . . . . |_| Yes
[checkmark] No
j. Disease of the kidneys, reproductive organs or sexually transmitted disease
(other than AIDS)? |_| Yes
[checkmark] No
k. Diabetes, thyroid or glandular disease? . . . . . . . . . . . . . . . . . . . . . |_| Yes
[checkmark] No
l. Arthritis, disease or injury of the muscles, bones or joints? . . . . . . . . . . |_| Yes
[checkmark] No
m. Cancer, tumor, cyst, disease of skin or lymph glands? . . . . . . . . . . . . . . |_| Yes
[checkmark] No
13. HAVE YOU IN THE LAST 10 YEARS (IF YES, EXPLAIN):
a. Been diagnosed or treated for immune deficiency (other than AIDS), anemia
or other blood disorder by a member of the medical profession? . . . . . . . . . |_| Yes
[checkmark] No
b. Had recurrent fever, fatigue or unexplained weight loss? . . . . . . . . . . . . |_| Yes
[checkmark] No
14. Have you in the last 10 years been diagnosed or treated for AIDS/ARC by
a member of the medical profession? . . . . . . . . . . . . . . . . . . . . . . . . . |_| Yes
[checkmark] No
15. OTHER THAN ABOVE, HAVE YOU WITHIN THE PAST 5 YEARS:
(IF YES, EXPLAIN)
a. Had a checkup, consultation, illness, injury, surgery or diagnostic test? . . . . [checkmark] Yes
|_| No
b. Been advised to have any diagnostic test, hospitalization or surgery which
was not completed (other than for HIV)? . . . . . . . . . . . . . . . . . . . . |_| Yes
[checkmark] No
16. a. Are you now under observation or treatment? . . . . . . . . . . . . . . . . . . . |_| Yes
[checkmark] No
b. Do you need assistance, supervision or use of medical appliances of any |_| Yes
kind? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [checkmark] No
17. Have you within 90 days had or been advised to have surgery or to be admitted
to a medical facility or within 2 years been treated or diagnosed by a physician
for heart disease, stroke, immune disorder (other than AIDS) or cancer? . . . . . . |_| Yes
[checkmark] No
- ----------------
Family 18. a. Do you have a family history of diabetes, heart disease or hereditary
History disease? (If Yes, explain) . . . . . . . . . . . . . . . . . . . . . . . . . . |_| Yes
[checkmark] No
b. Father, age: 68 health status: healthy if deceased, cause:
------ ---------- ------------------
c. Mother, age: 65 health status: healthy if deceased, cause:
------ ---------- ------------------
- ----------------
Explanations 19. EXPLANATIONS: Include, nature and severity of condition, frequency of attacks, treatments
For additional space please use Addendum Sheet.
- ---------------------------------------------------------------------------------------------------------------------------------
QUESTION #
- ---------------------------------------------------------------------------------------------------------------------------------
15a Routine Physical
- ---------------------------------------------------------------------------------------------------------------------------------

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

5
<PAGE>

BENEFICIARY/OWNER INFORMATION

- ---------------------------------------------------------------------------------------------------------------------------------
Beneficiary 20. A. PRIMARY (provide full name and relationship)
Information Mary J. Doe, Wife
----------------------------------------------------------------------------------------------------------------

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

----------------------------------------------------------------------------------------------------------------
Soc. Sec. # ###-##-####
----------------------------------------------------------------------------------------------------------------
B. SECONDARY (If any, provide full name and relationship)

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

----------------------------------------------------------------------------------------------------------------
Unless otherwise requested, if more than one beneficiary is
named, payment will be made in equal shares. If no beneficiary
survives the insured, payment will be made to the executors or
administrators of the insured.

C. OTHER |_| (e.g. Mode Settlement, Trustee under the Will, Individual Creditor. If Creditor -
who will receive any balance.)
----------------------------------------------------------------------------------------------------------------

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

----------------------------------------------------------------------------------------------------------------
Soc. Sec. #
----------------------------------------------------------------------------------------------------------------
D. FINAL (check one) [checkmark] Estate of the Insured
|_| Executors or Administrators of the Survivor of the Beneficiary(ies)

- ---------------------------------------------------------------------------------------------------------------------------------
OWNER OWNER: THE (PROPOSED) INSURED IS OWNER UNLESS UNDER AGE 15 OR OTHERWISE
REQUESTED.
21. A. PRIMARY (Provide full name, address, relationship and Date of Birth, mm/dd/yy)

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

----------------------------------------------------------------------------------------------------------------
B. SECONDARY (If any, provide full name, address, relationship and Date of Birth, mm/dd/yy)

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

----------------------------------------------------------------------------------------------------------------
C. OTHER |_|

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

----------------------------------------------------------------------------------------------------------------
D. FINAL: (check one) |_| Insured
|_| Insured at legal age in delivery state
[checkmark] Executors or Administrators of the Survivor of the Owner(s)

6
<PAGE>

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

22. Any payment is subject to the terms and conditions of the Temporary
Insurance Agreement. If payment is made, the Temporary Insurance Agreement
must be provided and explained.

23. If automatic payment from checking account is selected:
I (we) authorize Aetna Life Insurance and Annuity Company (ALIAC) to
debit my (our) checking account electronically, by paper means or by
any other commercially accepted method, to cover premiums and other
payments for my policy(ies)/certificate(s). I (we) also authorize my
financial institution named on the voided check attached to charge my
account for such payments. If my/our account number or financial
institution change, I (we) authorize ALIAC to accept verbal
instructions from me regarding such changes, and to change this
authorization accordingly. This authorization is to remain in full
force and effect until ALIAC has received written notification from
me (or either of us) of its termination within a reasonable time to
take action.

|_| Attach "VOID" Check Date of draw (8th, 20th or 28th) -----------------------------------------------------------------

Signature of Payor
-------------------------------------------------------------------------------------------------------------

24. The answers above are true and complete to the best of my knowledge and belief.

I agree that no producer may alter the terms of the application, the
Temporary Insurance Agreement or the policy/certificate, nor can the
producer waive any of Aetna's rights or requirements.

I agree that coverage can take effect only if the proposed insured is
alive, and all answers in this application material to the risk are still
true and complete to the best of my knowledge and belief when the
policy/certificate is delivered and the entire first premium is paid.

I agree to advise the Company or producer in writing of any known or
suspected changes in the health of the proposed insured, or of any changes
to any answers on this application, prior to delivery of this
policy/certificate.

- ---------------------------------------------------------------------------------------------------------- ----------------------
Signature of (Proposed) Insured (Required if age 10 or over) Date
John J. Doe 09/01/97
- ---------------------------------------------------------------------------------------------------------- ----------------------
(Signature of parent if juvenile under age 10) Date

- ---------------------------------------------------------------------------------------------------------- ----------------------
Signature of Applicant/Owner, if other than proposed insured Date

- ---------------------------------------------------------------------------------------------------------- ----------------------
Signature of Assignee, if applicable Date

- ---------------------------------------------------------------------------------------------------------- ----------------------
City State Zip
Albany NY 12257
- ---------------------------------------------------------------------------------------------------------- ----------------------
Signature of Agent I M Agent Agent License #567 Date 09-01-97

7
<PAGE>

AGENT'S REPORT

- ---------------------------------------------------------------------------------------------------------------------------------
PHI Please complete and explain the PHI process to the (proposed) insured.
Information Please provide both numbers and the best place to call:
[checkmark] Home Phone No. (860) 474-1324 |_| AM [checkmark] PM
[checkmark] Business Phone No. (860) 474-5678 [checkmark] AM |_| PM
- ---------------------------------------------------------------------------------------------------------------------------------
1. Underwriting Requirements |_| Nonmed [checkmark] Paramedical |_| Medical
Blood Profile/Urine Test required. |_| Yes [checkmark] No
2. Is the proposed insurance for business purposes? |_| Yes [checkmark] No
If Yes, are other principals commensurately insured? |_| Yes |_| No. (If No, explain)
3. Is application in lieu of Group? |_| Yes [checkmark] No
4. Have you seen the proposed insured? [checkmark] Yes |_| No
5. If application is for $1,000,000 or more, have you secured financial data? |_| Yes |_| No
6. If (proposed) Insured is under age 15, are parents/guardians, all siblings insured?
|_| Yes |_| No Please provide amounts: $
- ---------------------------------------------------------------------------------------------------------------------------------
Premium 1. Billing Information 2. Premium Information
Information [checkmark] Annual |_| Full Modal Premium $__________________
|_| Semi-Annual [checkmark] Planned Modal Prem. $XXXX.XX
|_| Quarterly |_| Additional Premium $__________________
|_| List Bill - Add to Existing ________________
|_| Monthly Check Plan
|_| Monthly List Bill
Add to existing Account _______________
3. Premium Payor name and address (if other than proposed insured) (Include Street, City, State,
Zip)

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

- ---------------------------------------------------------------------------------------------------------------------------------
Additional
----------------------------------------------------------------------------------------------------------------
Information
----------------------------------------------------------------------------------------------------------------

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

- ---------------------------------------------------------------------------------------------------------------------------------
Agent 1. Replacement? If yes:
-------------------------------------------
Information |_| Yes |_| Internal |_| Internal 1035
[checkmark] No |_| External |_| External 1035
2. If the law requires, has the Cost Disclosure Statement been given and will the Cost Disclosure
Policy Summary to be delivered with the policy? [checkmark] Yes |_| No
3. Has the required Underwriting Notice been given? [checkmark] Yes |_| No
4. Besides yourself will any other third party be compensated to influence the applicant's decision to
purchase this policy? |_| Yes [checkmark] No If yes, provide the name of that third party.
- ---------------------------------------------------------------------------------------------------------------------------------
Agent's Name I. M. Agent
----------------------------------------------------------------------------------------------------------------
Address 15 Oak Street, Albany, NY 12257
----------------------------------------------------------------------------------------------------------------
Phone No. (212) 666-1234
----------------------------------------------------------------------------------------------------------------
LIFE CODE MARKET AGENCY CODE
0123 567
----------------------------------------------------------------------------------------------------------------

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

----------------------------------------------------------------------------------------------------------------
</TABLE>

8
<PAGE>

[Aetna logo]

Aetna Life Insurance and Annuity Company
Hartford, Connecticut 06156

Authorization

TO: Any licensed physician, medical practitioner, hospital, clinic or medically
related facility, insurance company, consumer reporting agency, MIB, Inc., and
the insurance producer through whom application is being made.

On behalf of myself and any of my minor children proposed for insurance in the
application, I hereby authorize you to release to Aetna Companies named above
for purposes of determining eligibility for life insurance coverage or claims
for benefits:
any information or records concerning the mental and physical
history, condition and treatment, general character, habits,
reputation, mode of living, occupation, income, financial status,
aviation activities and hazardous hobbies of any proposed insured.
This authorization is valid until 2 years after the effective date of any
contract issued in connection with this authorization, or for use in an
investigation of a claim for benefits that is submitted on the contract within
this two year period.

I authorize Aetna to obtain an investigative consumer report. These reports
usually include an interview with the proposed insured. However I understand
that I am entitled to be interviewed by any consumer reporting agency which may
be asked to prepare such a report as long as I can reasonably be contacted
during normal business hours.

|_| (check if interview requested) Business hours telephone _________________

I have received Aetna's Underwriting Notice, which includes the MIB, Inc., and
Fair Credit Reporting Act Notices. I understand that information pertaining to
me will not be disclosed without my authorization except as described under
"Disclosure of Information to Others" in the accompanying Underwriting Notice,
or as otherwise permitted or required by law.

I understand that the information released under this authorization will be used
for purposes of determining eligibility for life coverage or claims for
benefits, and I authorize Aetna to redisclose the information for those purposes
to MIB, Inc., to any reinsurer, and to other life insurance companies with whom
I have or may apply for coverage or to whom a claim for benefits may be
submitted.

A photocopy of this authorization shall be as valid as the original. I
understand that upon request I may receive a copy of this authorization.

Signature of (Proposed) Insured John J. Doe Date 09-01-97
- ----------------------------------------- ------------------ ---------- --------

9
<PAGE>

[Aetna logo]

Aetna Life Insurance and Annuity Company
Hartford, Connecticut 06156

Owner/Taxpayer Identification Number (must be completed)

|_| Insured

|_|_|-|_|_|-|_|_|_|_|

[checkmark] Owner [checkmark] Owner Date of Birth (mm/dd/yy)

###-##-#### 01-01-52

|_| Partnership |_| Corporation |_| Trustee |_| Other

|_|_|-|_|_|-|_|_|_|_|

Certification -- Under penalties of perjury

1. The number shown above is my correct social security number/taxpayer
identification number (or I am writing for a number to be issued to me),
and

2. I am not subject to backup withholding because: (a) I am exempt from
backup withholding, or (b) I have not been notified by the Internal
Revenue Service (IRS) that I am subject to backup withholding as a result
of a failure to report all interest or dividends, or (c) the IRS notified
me that I am no longer subject to backup withholding (does not apply to
real estate transactions, mortgage interest paid, the acquisition or
abandonment of secured property, contributions to an individual
retirement arrangement (IRA) and payments other than interest and
dividends).

CERTIFICATION INSTRUCTIONS. -- you must cross out item (2) above if you have
been notified by IRS that you are currently subject to backup withholding
because of underreporting interest or dividends on your tax return.

Signature of Owner Date
- --------------------------------------------------------------------------------

Signature of Proposed Insured John J. Doe Date 09-01-97
- --------------------------------------------------------------------------------

10
<PAGE>

[Aetna logo]

ADDENDUM SHEET

- --------------------------------------------------------------------------------
Application ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
Question #
- --------------------------------------------------------------------------------

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

- --------------------- ------------------------------------------------------
Date Signature of (Proposed Insured)

11
<PAGE>

[Aetna logo]
TRANSMITTAL LETTER FOR
LIFE INSURANCE

<TABLE>
<S> <C>
1. Purpose of Insurance:

2. Income:

A. Individual earned income, bonuses, stock options, etc. $
------------------------------------------
B. Annual unearned income and sources. $
------------------------------------------
$
------------------------------------------

$ $ $
- -------------------------------- ----------------------------- -------------------------------------------
Personal Assets Liabilities Net Worth

3. If Business Insurance:

Structure: |_| Corporation |_| Partnership |_| Sole Proprietorship

Other Principals? |_| Yes |_| No

If Yes, are other principals commensurately insured? |_| Yes |_| No

If Yes, names and duties: Active In Business
|_| Yes |_| No
- ------------------------------------------------------------------------
|_| Yes |_| No
- ------------------------------------------------------------------------
|_| Yes |_| No
- ------------------------------------------------------------------------

PROFILE OF BUSINESS

Product or service sold/rendered
---------------------------------------------------------------------
Number of Employees:
---------------------------------------------------------------------

$ $ $
- ------------------------------------ -------------------------------- ----------------------------------
Assets Liabilities Net Worth

- ----------------------------------------------------- --------------------------------------------------------
Gross/Annual Taxes Annual Net Income After Salaries/Expenses/Taxes

4. Provide any additional information important to this application.

---------------------------------------------------------
Agent's Signature
</TABLE>

(AMOUNT OVER $5,000,000 SUBMIT SUPPORTING
DOCUMENTATION) The Company may require additional
supporting documentation at any amount.

Application for GROUP
LIFE INSURANCE
ISSUED TO ELIGIBLE MEMBERS OF THE
NEW YORK STATE UNITED TEACHERS
BENEFIT TRUST AND THEIR SPOUSES

[AETNA LOGO]

Aetna Life Insurance and Annuity Company

<PAGE>

When completing the application Please:

[bullet] Print legibly. (If possible, use
black ink.) This will ensure that
application information is accurate
and easy to photocopy.

[bullet] If blood or urine is required, please
sign the consent form. (State of
residence determines appropriate
consent form to be used.)

[bullet] Include any special supplements that
may be required, (e.g. aviation
and/or avocation, child rider,
Variable Life supplement.)

[bullet] Ensure that automatic requirements
(blood, exam, etc.) are completed.

[bullet] Complete enclosed Transmittal letter
for applications of $1,000,000 to
$5,000,000, or if there is special
information that would assist the
underwriter in underwriting the case.
Cases over $5,000,000 please submit
supporting documentation such as
audited financial statements, income
tax returns, etc.

[bullet] Limits. The maximum amount of
insurance on a Spouse a shall not
exceed the amount of insurance
proposed or existing on an Insured
Member of the New York State United
Teacher's Benefit Trust.

[bullet] Ask all questions of the proposed
insured. Do not assume anything.

[bullet] If you must change application
information prior to submission, draw
a line through it, enter the correct
information and have the proposed
insured initial the change.

[bullet] Signatures required on: application,
ACP form if requested, MIB
authorization, Owner/Taxpayer form
and Conditional Exchange Agreement.
Agent must also sign the application
and transmittal letter.

[bullet] Agent signature must include the
agent license number and not the
agent code number.

<PAGE>

- --------------------------------------------------------------------------------
[AETNA LOGO] GROUP LIFE INSURANCE APPLICATION
ISSUED TO ELIGIBLE MEMBERS OF THE NEW YORK STATE UNITED
TEACHERS BENEFIT TRUST AND THEIR SPOUSES
Aetna Life Insurance and Annuity Co.
151 Farmington Avenue
Hartford, CT 06156-1961
- --------------------------------------------------------------------------------
General ANSWER ALL QUESTIONS IF:
Information [ ] New Insurance [ ] Increase Amount
$ [ ] Certificate No.
-------------- -----------

[ ] Other Certificate Change _______________________________
ANSWER APPLICABLE QUESTIONS
--------------------------
[ ] Certificate Number to be changed
- --------------------------------------------------------------------------------
ST OF DEL [ ] STATE OF DELIVERY ______________________________________
- --------------------------------------------------------------------------------
(Proposed) 1. Print Full Legal Name (First, Middle, Last)

Insured
---------------------------------------------------------------
Information Residence Address (Number, Street) P. O. Box

---------------------------------------------------------------
City, State and Zip Code

---------------------------------------------------------------
Sex Date of Birth (mm/dd/yy) Place of Birth

---------------------------------------------------------------
MVR License # and License State

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

2a. Occupation (Title & Give Exact Duties)

---------------------------------------------------------------
2b. Employer's Name and Address 2c. Annual Income

---------------------------------------------------------------
2d. Amount of life insurance presently in force:
Aetna $ ADB $ Other Companies
--------------- --------------
$ ADB $
----- ----------

Are there current negotiations with other companies?
[ ] Yes [ ] No
If Yes, advise Company and results.

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

---------------------------------------------------------------
3. Will life insurance or annuity in any Company be replaced
or changed if insurance applied for is issued?
[ ] Yes [ ] No
Explain
- --------------------------------------------------------------------------------
Insurance 4. Basic Plan_________________________ Face Amount $__________

Information Death Benefit Option (if applicable) __________________________
Billing Frequency: [ ] ACP [ ] Salary Deduction
[ ] Direct Bill - Annual
[ ] Direct Bill - Sem-annual
[ ] Direct Bill - Quarterly
NYSUT member or agency fee payor:______________________________
Social Security Number: _______________________________________
District Number: _____________________ District Name __________
List Supplemental Benefits/Riders & Amounts (e.g. WP, ABR,
ADB, CIR*)

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

70272-97(A)ZNY *For CIR - Submit application supplement

<PAGE>

- --------------------------------------------------------------------------------
(Proposed) NON MEDICAL QUESTIONS
Insured 5. HAVE YOU WITHIN 2 YEARS: (IF YES, EXPLAIN)
Information a. Flown as a pilot or crew member or
intend to do so? (If Yes, furnish
Aviation supplement) .................... [ ] Yes [ ] No

b. Engaged in motor vehicle or boat
racing, rock or mountain climbing,
hang gliding or sky, skin or scuba
diving or intend such activities?
(If Yes, furnish Avocation
supplement) ............................. [ ] Yes [ ] No

c. Had your license suspended or
revoked, had 3 or more moving
violations, or been charged with
driving under the influence of
alcohol or drugs? ....................... [ ] Yes [ ] No

d. Frequently traveled outside of the
United States or intend to do so? ....... [ ] Yes [ ] No

6. HAVE YOU EVER:

a. Had insurance refused, or offered
only with an extra premium? ............. [ ] Yes [ ] No

b. Been arrested and convicted for a
felony offense? ......................... [ ] Yes [ ] No

7. HAVE YOU IN THE LAST 5 YEARS: (IF YES, EXPLAIN)

a. Used hallucinogenic or narcotic
drugs not prescribed by a doctor? ....... [ ] Yes [ ] No

b. Used alcoholic beverages? (Note
type, quantity and frequency) ........... [ ] Yes [ ] No

c. Had or been advised to have medical
treatment or counseling from a
commonly recognized practitioner or
organization for alcohol or drug
use? .................................... [ ] Yes [ ] No

--------------
- --------------
Smoking 8. a. Have you smoked cigarettes within
the past 12 months? ..................... [ ] Yes [ ] No

Information If Yes, how much? .......................... --------------

b. If No, have you used any other
tobacco products within the past 12
months (e.g. cigar, pipe, smokeless
tobacco)? ............................... [ ] Yes [ ] No

If Yes, have you smoked cigarettes
within the past 10 years? .................. [ ] Yes [ ] No

c. Have you used any nicotine
substitutes within the past 12
months (e.g. patch, gum)? ............... [ ] Yes [ ] No

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

- --------------
Height & 9. a. What is your current height? ............ --------------

Weight b. What is your current weight? ............ --------------

- --------------
History 10. Have you had a history of heart, lung
or liver disorder, stroke, diabetes
or cancer? ................................. [ ] Yes [ ] No

- --------------------------------------------------------------------------------
Attending 11. Name, address and phone number of personal physician, date,
reason last seen and results.
Physician
---------------------------------------------------------------
Information
---------------------------------------------------------------

- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION (Give details of YES answers, dates and
results) For additional space please use Addendum Sheet.
---------------------------------------------------------------
QUES. #
- --------------------------------------------------------------------------------

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

IF AN EXAM IS REQUIRED AND QUESTION 10 IS ANSWERED "YES" AN MD EXAM IS REQUIRED

70272-97(A)ZNY

<PAGE>

<TABLE>
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
(Proposed) PART II - QUESTIONS 12 - 19 REQUIRED EVEN FOR EXAMINED BUSINESS
Insured 12. HAVE YOU EVER IN THE LAST 10 YEARS HAD OR BEEN TREATED
Information FOR: (IF YES, EXPLAIN)
a. Mental or nervous disorder? ......................................................... [ ] Yes [ ] No
b. Disease of the nervous system or brain? ............................................. [ ] Yes [ ] No
c. Fainting, seizures, paralysis or stroke? ............................................ [ ] Yes [ ] No
d. Shortness of breath, persistent cough? .............................................. [ ] Yes [ ] No
e. Emphysema or other lung disease? .................................................... [ ] Yes [ ] No
f. Chest pain, high blood pressure, heart attack, heart murmur, disease of the
heart or blood vessels? ............................................................. [ ] Yes [ ] No
g. Hepatitis, cirrhosis, or other disease of the liver or pancreas? .................... [ ] Yes [ ] No
h. Ulcer, colitis, chronic diarrhea, or other disorder of the stomach or intestines? ... [ ] Yes [ ] No
i. Sugar, albumin, blood or pus in urine? .............................................. [ ] Yes [ ] No
j. Disease of the kidneys, reproductive organs or sexually transmitted disease
(other than AIDS)? .................................................................. [ ] Yes [ ] No
k. Diabetes, thyroid or glandular disease? ............................................. [ ] Yes [ ] No
l. Arthritis, disease or injury of the muscles, bones or joints? ....................... [ ] Yes [ ] No
m. Cancer, tumor, cyst, disease of skin or lymph glands? ............................... [ ] Yes [ ] No
13. HAVE YOU IN THE LAST 10 YEARS (IF YES, EXPLAIN):
a. Been diagnosed or treated for immune deficiency (other than AIDS), anemia
or other blood disorder by a member of the medical profession? ...................... [ ] Yes [ ] No
b. Had recurrent fever, fatigue or unexplained weight loss? ............................ [ ] Yes [ ] No
14. Have you in the last 10 years been diagnosed or treated for AIDS/ARC by
a member of the medical profession? ..................................................... [ ] Yes [ ] No
15. OTHER THAN ABOVE, HAVE YOU WITHIN THE PAST 5 YEARS:
(IF YES, EXPLAIN)
a. Had a checkup, consultation, illness, injury, surgery or diagnostic test (other
than for HIV)? ...................................................................... [ ] Yes [ ] No
b. Been advised to have any diagnostic test, hospitalization or surgery which
was not completed (other than for HIV)? ............................................. [ ] Yes [ ] No
16. a. Are you now under observation or treatment? .......................................... [ ] Yes [ ] No
b. Do you need assistance, supervision or use of medical appliances of any kind? ........ [ ] Yes [ ] No
17. Have you within 90 days had or been advised to have surgery or to be admitted
to a medical facility or within 2 years been treated or diagnosed by a physician
for heart disease, stroke, immune disorder (other than AIDS) or cancer? ................. [ ] Yes [ ] No
- --------------
Family 18. a. Do you have a family history of diabetes, heart disease or hereditary
History disease? (If Yes, explain) ....................................................... [ ] Yes [ ] No

b. Father, age: __________ health status: _________________ if deceased, cause: _________________
c. Mother, age: __________ health status: _________________ if deceased, cause: _________________
- --------------
Explanations 19. EXPLANATIONS: Include, nature and severity of condition, frequency of attacks, treatments
received, medication, dates, name, address & phone number of medical attendants and hospitals.
For additional space please use Addendum Sheet.
</TABLE>

- --------------------------------------------------------------------------------
QUESTION #
- --------------------------------------------------------------------------------

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

70272-97(A)ZNY

5
<PAGE>

BENEFICIARY/OWNER INFORMATION

- --------------------------------------------------------------------------------
Beneficiary 20 A. PRIMARY (provide full name and relationship)
Information
---------------------------------------------------------------

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

---------------------------------------------------------------
Soc. Sec. #
---------------------------------------------------------------
B. SECONDARY (If any, provide full name and relationship)

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

---------------------------------------------------------------
Unless otherwise requested, if more than one beneficiary is
named, payment will be made in equal shares. If no beneficiary
survives the insured, payment will be made to the executors or
administrators of the insured.
C. OTHER [ ] (e.g. Mode Settlement, Trustee under the
Will, Individual Creditor. If Creditor - who will
receive any balance.

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

---------------------------------------------------------------
Soc. Sec. #
---------------------------------------------------------------
D. FINAL (check one) [ ] Estate of the Insured
[ ] Executors or Administrators of
the Survivor of the
Beneficiary(ies)

- --------------------------------------------------------------------------------
OWNER OWNER: THE (PROPOSED) INSURED IS OWNER UNLESS OTHERWISE
REQUESTED
21. A. PRIMARY (Provide full name, address, relationship and
Date of Birth, mm/dd/yy)

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

---------------------------------------------------------------
B. SECONDARY (If any, provide full name, address,
relationship and Date of Birth, mm/dd/yy)

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

---------------------------------------------------------------
C. OTHER [ ]

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

---------------------------------------------------------------
D. FINAL: (check one) [ ] Insured
[ ] Insured at legal age in
delivery state
[ ] Executors or Administrators
of the Survivor of the
Owner(s)
70272-97(A)ZNY

6
<PAGE>

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

22. Any payment is subject to the terms and conditions of the Conditional
Exchange Agreement. If payment is made, the Conditional Exchange Agreement
must be provided and explained.

23. If automatic payment from checking account is selected:
I (we) authorize Aetna Life Insurance and Annuity Company (ALIAC) to debit
my (our) checking account electronically, by paper means or by any other
commercially accepted method, to cover premiums and other payments for my
certificate(s). I (we) also authorize my financial institution named on
the voided check attached to charge my account for such payments. If
my/our account number or financial institution change, I (we) authorize
ALIAC to accept verbal instructions from me regarding such changes, and to
change this authorization accordingly. This authorization is to remain in
full force and effect until ALIAC has received written notification from
me (or either of us) of its termination within a reasonable time to take
action.

[ ] Attach "VOID" Check Date of draw (8th, 20th or 28th)__________________

Signature of Payor______________________________________________________________

24. The answers above are true and complete to the best of my knowledge and
belief.

I agree that no producer may alter the terms of the application, the
Conditional Exchange Agreement or the certificate, nor can the producer
waive any of Aetna's rights or requirements.

I agree that coverage can take effect only if the proposed insured is
alive, and all answers in this application material to the risk are still
true and complete to the best of my knowledge and belief when the
certificate is delivered and the entire first premium is paid.

- --------------------------------------------------------------------------------
Signature of (Proposed) Insured Date

Signature of Applicant/Owner, if other than proposed insured Date

- --------------------------------------------------------------------------------
Signature of Assignee, if applicable Date

- --------------------------------------------------------------------------------
City State Zip

- --------------------------------------------------------------------------------
Signature of Agent Agent License # Date

70272-97(A)ZNY

7
<PAGE>

AGENT'S REPORT

- --------------------------------------------------------------------------------
PHI Please complete and explain the PHI process to the
(proposed) insured.
Information Please provide both numbers and the best place to call:
[ ] Home Phone No. [ ] AM [ ] PM
[ ] Business Phone No. [ ] AM [ ] PM
- --------------------------------------------------------------------------------
1. Underwriting Requirements [ ] Nonmed [ ] Paramedical
[ ] Medical
Blood Profile/Urine Test required. [ ] Yes [ ] No
If Yes, are other principals
commensurately insured? [ ] Yes [ ] No
(If No, explain)
2. Have you seen the proposed insured? [ ] Yes [ ] No

3. If application is for $1,000,000 or more, have you secured
financial data? [ ] Yes [ ] No
- --------------------------------------------------------------------------------
Premium 1. Billing Information 2. Premium Information
Information [ ] Annual [ ] Full Modal Premium
$_________________
[ ] Semi-Annual [ ] Planned Modal Prem.
$_________________
[ ] Quarterly [ ] Additional Premium
$_________________
[ ] List Bill - Add to Existing ______________
[ ] Monthly Check Plan
[ ] Monthly List Bill
Add to existing Account _______________
3. Premium Payor name and address (if other than proposed
insured) (Include Street, City, State, Zip)

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

---------------------------------------------------------------
- --------------------------------------------------------------------------------
Additional
---------------------------------------------------------------
Information
---------------------------------------------------------------

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

---------------------------------------------------------------
- --------------------------------------------------------------------------------
Agent 1. Replacement? If yes:
---------------------------------------
Information [ ] Yes [ ] Internal [ ] Internal 1035
[ ] No [ ] External [ ] External 1035

2. If the law requires, has the Cost Disclosure Statement been
given and will the Cost Disclosure Summary be delivered?
[ ] Yes [ ] No

3. Has the required Underwriting Notice
been given? [ ] Yes [ ] No
- --------------------------------------------------------------------------------
Agent's Name
---------------------------------------------------------------
Address
---------------------------------------------------------------
Phone No. ( )
---------------------------------------------------------------
LIFE CODE MARKET AGENCY CODE

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

---------------------------------------------------------------
70272-97(A)ZNY

8
<PAGE>

[AETNA LOGO]

ADDENDUM SHEET

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

--------------------- -------------------------------------
Date Signature of (Proposed Insured)

70272-97(A)ZNY

Aetna Life Insurance and Annuity Company's Issuance,
Redemption and Transfer Procedures

This document sets forth, as required by Rule 6e-3(T)(b)(12)(iii), the
administrative procedures that will be followed by Aetna Life Insurance and
Annuity Company (the "Company") in connection with the issuance of The Flexible
Premium Group Variable Universal Life Insurance Certificate (the "Certificate")
described in this Registration Statement, the transfer of assets held
thereunder, and the redemption by Certificate Owners of their interests in the
Certificates

1. PUBLIC OFFERING PRICE

Purchase and Related Transactions

Set out below is a summary of the principal Certificate provisions and
administrative procedures which might be deemed to constitute, either
directly or indirectly, a "purchase" transaction. The summary shows that,
because of the insurance nature of the Certificates, the procedures
involved necessarily differ in certain significant respects from the
purchase procedures for mutual funds and contractual plans.

a. Premium Levels and Underwriting Standards

Premiums for the Certificates will not be the same for all Certificate
Owners. The Certificate is a flexible premium life insurance
Certificate in that, within limits, the Certificate Owner has the right
to decide when to make premium payments and in what amounts. The
certificate provides for two premium levels at which the Certificate
Owner may make payments. They are the Planned Premium and the Basic
Monthly Premium. The Certificate Owner may make any other premium
payments as Additional Premiums. Payment of premiums is not mandatory
and failure to do so will not of itself cause the Certificate to lapse.
Instead, Certificate Owners may make premium payments in any amount at
any frequency, subject only to the maximum premium limitations set
forth in the Certificate. If at any time a premium is paid that would
exceed the maximum premium limitations set forth in the Certificate,
the Company will accept only that portion of the premium that is not in
excess of the maximum. Any portion of the premium in excess of the
maximum will be returned to the Certificate Owner and no further
premiums will be accepted until allowed by the maximum limitations
stated in the Certificate.

The Planned Premium is the premium amount that the Certificate Owner
agrees to pay and we agree to bill. The frequency of the Planned
Premium will be determined by the billing arrangement agreed to by Us
and the New York State United Teachers Benefit Trust. The Basic Monthly
Premium provides for the No Lapse Coverage Provision for all
Certificates. Under the No Lapse Coverage Provision, the Certificate
will not terminate within the 5-year period after the Issue Date or the
Issue Date of any increase in Specified Amount if on every Monthly
Deduction Day within that period the sum of premiums paid within that
period equals or exceeds the sum of the Basic Monthly Premiums for each
Certificate month from the start of the period, including the current
month, plus any Partial Surrenders, plus any increase in the Loan
Account Value since the start of the period. If on any Monthly
Deduction Day within the 5-year period the sum of premiums is
insufficient to provide for the No Lapse Coverage Provision, the Grace
Period provision will apply. The Grace Period provision is defined
under Section 2.c. below.

In the absence of or upon expiration of the No Lapse Coverage Provision
the Certificate will remain in force so long as the Surrender Value is
sufficient to pay for the Monthly Deduction on each Monthly Deduction
Day. The Grace Period will not begin so long as the Surrender Value is
sufficient to pay for the Monthly Deduction on the Monthly Deduction
Day.

- --------------------------------------------------------------------------------
"Procedures Manual" Page 1
<PAGE>

The Cost of Insurance rate utilized in computing the Cost of Insurance
charge will not be the same for each Insured. The chief reason is that
the principle of pooling and distribution of mortality risks is based
upon the assumption that each Insured incurs an insurance rate
commensurate with his or her mortality risk which is actuarially
determined based upon factors such as issue age, attained age, sex, and
underwriting class (health, occupation, avocation, smoker/nonsmoker
status). Accordingly, while not all Insureds will be subject to the
same Cost of Insurance rate, there will be a single Cost of Insurance
rate for all Insureds in a given actuarial category.

The Certificates will be offered and sold pursuant to established
underwriting standards and in accordance with State insurance laws.
State insurance laws prohibit unfair discrimination among Insureds but
recognize that Cost of Insurance rates must be based upon factors such
as issue age, attained age, health, and occupation. However, federal
law does not allow distinctions based on sex, therefore, the Company
will use Cost of Insurance rates that disregard the sex of the Insured.

b. Application and Initial Premium Processing

Upon receipt of a completed application form, the Company will follow
certain insurance underwriting procedures designed to determine whether
the proposed Insureds are insurable. This process may involve such
verification procedures as medical examinations and personal telephone
interviews with the proposed Insureds. The Certificate will not be
issued until these underwriting procedures have been completed.

If a sufficient premium payment is made at the time of the application
and if the proposed Insured has answered favorably questions relating
to his or her health, a conditional receipt (where approved for use)
will be provided to the applicant (proposed Certificate Owner). This
agreement provides that insurance (up to $1,000,000 in approving
States) equal to the Specified Amount applied for will be provided
until the applicant is notified of acceptance or rejection of the
application. Our standard practice is then to make the Certificate
effective on the date of underwriting approval for the Specified Amount
applied for, and to apply the premium payments as of that date. Under
limited circumstances, the Company may backdate a Certificate, upon
request, by assigning an Issue Date earlier than the date the
application is signed but no earlier than six months prior to approval
of the Certificate. Backdating may be desirable, for example, so that
the Certificate Owner can purchase a particular Certificate Specified
Amount for lower Cost of Insurance Rates based on a younger insurance
age. For a backdated Certificate, the Certificate Owner must pay the
premium for the period between the Issue Date and the date the
application is received in the Home Office. Backdating of the
Certificate will not affect the date on which the premium payments are
credited to the Separate Account and credited with Accumulation Units.
The Certificate cannot be credited with Accumulation Units until the
Net Premium is actually deposited in the Separate Account.

The above procedure is not followed in those States that do not allow
the Company to reflect performance of the Separate Account in the
refund as a result of exercising the Right of Certificate Examination
provision. In such States, either no money will be accepted at the time
of the application, or the Certificate may only be dated from the date
of the underwriting approval.

Under the Company's current rules, the minimum Specified Amount at
issue is $50,000. The Company reserves the right to revise its rules
from time to time to specify a different minimum Specified Amount at
issue.

c. Premium Allocation

In the application for a Certificate, the Certificate Owner can
allocate premiums among the variable options of the Separate Account.
The premium will be allocated (after its receipt) on the first
Valuation Date on or following the effective date of the insurance
coverage under the Certificate. Premiums paid after the date of the
application will be allocated according to the Certificate Owner's
instructions in effect at the time the premium payment is received in
the Company's Home Office. The allocation for future premium payments
may be changed at any time, free of charge. The change will be
effective as of the date of the next premium payment after the
Certificate Owner notifies the Company of the change.

- --------------------------------------------------------------------------------
"Procedures Manual" Page 2
<PAGE>

d. Reinstatement of a Lapsed Certificate

If the Certificate lapses (terminates without value) as provided in the
Grace Period provision, it may be reinstated. To reinstate the
Certificate, the following conditions must be met:

1. the Certificate has not been fully surrendered;
2. the Certificate Owner must apply for reinstatement of a
lapsed Certificate within 5 years after
the date of lapse and before the Maturity Date of the
Certificate;
3. the Company must receive evidence of insurability,
satisfactory to the Company
4. the Company must receive a premium payment sufficient to keep
the Certificate in force for the current month plus two
additional months.

If the Certificate is reinstated while the No Lapse Coverage Provision
would have been in effect had the Certificate not lapsed, the values
including the Loan Account Value will be reinstated to the point they
were on the date of lapse.

If the Certificate is reinstated after the No Lapse Coverage Provision
would have expired had the Certificate not lapsed, the Certificate will
be reinstated on the Monthly Deduction Day following the Company's
approval. The Certificate's Total Account Value at reinstatement will
be the Net Premium paid less the Monthly Deduction for that Monthly
Deduction Day. Any Loan Account Value will not be reinstated.

Supplemental Benefits will be reinstated only with the Company's
consent.

e. Increases in Specified Amount

The administrative procedures in connection with Increases in Specified
Amount are specified in full under the Certificate Changes provision in
the Certificate Rights section of this Prospectus.

f. Certificate Loans

The administrative procedures in connection with Certificate Loans are
specified in full under the Certificate Loan provision in the
Certificate Rights section of this Prospectus.

g. Correction of Misstatement of Age

The administrative procedures in connection with the correction of
misstatement of age are specified in full under the Misstatement as to
Age provision in the Miscellaneous Certificate Provisions section of
this Prospectus.

2. REDEMPTION PROCEDURES

Surrenders and Related Transactions

This Section outlines those procedures which might be deemed to constitute
redemptions under the Certificate. These procedures differ in certain
significant respects form the redemption procedures for mutual funds and
contractual plans.

a. Full or Partial Surrender Value

The administrative procedures in connection with Full or Partial
Surrender of the Certificate are specified in full under Full
Surrenders provision and Partial Surrenders provision of the
Certificate Rights section of this Prospectus.

b. Death or Maturity Benefit Claims

- --------------------------------------------------------------------------------
"Procedures Manual" Page 3
<PAGE>

As long as the Certificate remains in force, the Company will generally
pay a Death Benefit to the beneficiary in accordance with the terms of
the Certificate, within seven days after the Company receives due proof
of death of the Insured and verifies the validity of the claim.

Payment of Death Benefit may, however, be postponed under certain
circumstances. In particular, during the first two Certificate Years
after either (a) the Issue Date, (b) an increase in Specified Amount or
(c) a Certificate is reinstated, and in other circumstances in which
the Company may have a basis for contesting the claim, there can be a
delay beyond the seven day period. The amount of the Death Benefit is
determined at the end of the Valuation Period during which the Insured
dies. The Death Benefit payable under the selected Death Benefit Option
will be reduced by the amount necessary to repay the Loan Account Value
in full and, if the Certificate is within the Grace Period, any payment
required to keep the Certificate in force. The Death Benefit will be
increased by any additional insurance provided by rider.

The Death Benefit may exceed the Specified Amount of the Certificate.
The amount by which the Death Benefit exceeds the Specified Amount
depends upon the Death Benefit Option in effect and the Total Account
Value of the Certificate. Under Death Benefit Option 1, the Death
Benefit will be the greater of (a) the Specified Amount or (b) an
applicable percentage of the Total Account Value. The percentage is
250% through age 40 and decreases yearly to 100% at age 95. Option 1
generally provides a level Death Benefit. If the Death Benefit is the
Specified Amount, the Death Benefit will be increased by any premium
payment and gain in investment earnings during the portion of the
Certificate month preceding death.

Under Death Benefit Option 2, the Death Benefit will be the greater of
(a) the Specified Amount plus the Total Account Value on the date of
death or (b) the applicable percentage (described above) of the Total
Account Value. Option 2 provides a varying Death Benefit which
increases or decreases over time, depending upon the amount of premium
paid and the investment performance of the Fund(s) chosen by the
Certificate Owner.

The amount of the benefit payable at maturity is the Total Account
Value on the Maturity Date. These proceeds will be reduced by the Loan
Account Value and any unpaid accrued interest and are payable only if
the Insured is living on the Maturity Date. The Maturity Date is the
Certificate Anniversary on which the Insured reaches Attained Age 100.

c. Certificate Lapsation

If the Surrender Value is insufficient to allow a Monthly Deduction on
the Monthly Deduction Day and if the conditions of the No Lapse
Coverage provision has been met, the Company will allow the Certificate
Owner 61 days of grace for payment of an amount sufficient to allow the
Monthly Deduction. The Company may require payment of the amount equal
to the lesser of (1) or (2) where (1) is the amount necessary to meet
the conditions of the No Lapse Coverage provision and (2) is an amount
sufficient to cover the Monthly Deduction(s) that would result in the
Surrender Value being greater than zero.

If the conditions of the No Lapse Coverage provision has not been met
and the Surrender Value is insufficient to allow a Monthly Deduction on
the Monthly Deduction Day, the Company will allow 61 days of grace for
payment of an amount sufficient to allow the Monthly Deduction. The
Company may require payment of the amount necessary to keep the
Certificate in force for the current month plus two additional months.

Written notice will be mailed to the Certificate Owner's last known
address, according to the Company's records, not less than 31 days
before termination of the Certificate. The notice will also be mailed
to the last known address of any assignee of record.

During the days of grace, the Certificate will stay in force. If Death
occurs during the days of grace, the Company will deduct an amount
required to keep the Certificate in force from the Death Benefit.

- --------------------------------------------------------------------------------
"Procedures Manual" Page 4
<PAGE>

If payment is not made within 61 days after the Monthly Deduction Day,
the Certificate will terminate without value at the end of the Grace
Period. The termination will be effective on the Monthly Deduction Day
for the first unpaid Monthly Deduction.

3. TRANSFERS

There are currently 13 Variable Options of the Separate Account. The
Company reserves the right to limit the total number of Variable Options
elected by the Certificate Owner to 15 over the lifetime of the
Certificate. Each Variable Option invests in an open-end management
investment company (mutual fund) whose shares are purchased by the Separate
Account to fund the benefits provided by the Certificate. At any time prior
to the Maturity Date, the Certificate Owner may transfer all or part of
value attributable to one Variable Option to the value of any other
Variable Option or to the Fixed Account Value. The Company reserves the
right to charge an administrative fee of $25 for more than 12 such
transfers per Certificate Year. This administrative fee, if imposed, will
be deducted on a pro rata basis in proportion to the values in each
Variable Option of the Separate Account. A transfer due to Automated
Transfers (Dollar Cost Averaging) or a Certificate Loan will not count
toward the transfers limit.

Within the 45 days following the Certificate Anniversary, the Certificate
Owner may request a transfer of a portion of the Fixed Account Value to one
or more of the Variable Options. This type of transfer is allowed only once
within this 45 day period, and the Company must receive the Certificate
Owner's request at the Home Office within the 45 day period. The transfer
will be effective on the Valuation Date that the Certificate Owner's
request is received by the Home Office. The amount of such transfer cannot
exceed 25% of the Fixed Account Value. However, if the Fixed Account Value
is less than or equal to $500, the Certificate Owner may transfer all or a
portion of the Fixed Account Value.

Accumulation Units for each Variable Option will be added to or subtracted
from the Separate Account Value, based on each Variable Option's
Accumulation Unit Value at the end of the Valuation Period when the request
for such transfer is received by the Company. A dollar amount will be added
or subtracted from the Fixed Account Value according to the terms of the
request for transfer.

- --------------------------------------------------------------------------------
"Procedures Manual" Page 5

151 Farmington Avenue
Hartford, CT 06156

Julie E. Rockmore
Counsel
Law Division, RE4A
Investments & Financial Services
July 17, 1997 (860) 273-4686
Fax: (860) 273-8340

Securities and Exchange Commission
450 Fifth Street
Washington, D.C. 20549

Re: Aetna Life Insurance and Annuity Company
Variable Life Account B
SEC File No. 811-4536 and File No. 333-15817

Gentlemen:

The undersigned has acted as counsel to Aetna Life Insurance and Annuity
Company, a Connecticut life insurance company (the "Company") in connection with
the registration on Form S-6 (File No. 333-15817) of interests in Variable Life
Account B of the Company. It is my understanding that the Company, as depositor,
has registered an indefinite number of shares of beneficial interest under the
Securities Act of 1933 (the "Securities Act") pursuant to Rule 24f-2 under the
Investment Company Act of 1940 (the "Investment Company Act").

In connection with such representation, I have reviewed the Registration
Statement on Form S-6 filed with the Securities and Exchange Commission on
November 8, 1996 and this Pre-Effective Amendment No. 1 (the "Registration
Statement"). I have also examined originals or copies, certified or otherwise
identified to my satisfaction, of such documents, trust records and other
instruments I have deemed necessary or appropriate for the purpose of this
opinion. For purposes of such examination, I have assumed the genuineness of all
signatures on original documents and the conformity to the original of all
copies.

I am admitted to practice law in Connecticut, and do not purport to be an expert
on the laws of any other state. My opinion herein as to any other law is based
upon a limited inquiry thereof which I have deemed appropriate under the
circumstances.

<PAGE>

Based upon the foregoing, I am of the opinion that the Securities have been
legally authorized and, assuming that the Securities are issued and sold in
accordance with the provisions of the prospectus being registered, will be
legally issued.

I consent to the filing of this opinion as an exhibit to the Registration
Statement and to my being named under the caption "Legal Matters" in the
prospectus contained therein.

Sincerely,

/s/ Julie E. Rockmore
- ---------------------
Julie E. Rockmore

151 Farmington Avenue
Hartford, CT 06156

Jo-Anne Rankin, FSA, MAAA
Pricing Actuary
Life Products Group, TN41
(860) 273-4436
Fax: (860) 273-4438
May 8, 1997

Re: NYSUT Opportunity Lifeline (File No. 333-15817)

Dear Sir or Madam:

This opinion is furnished in connection with registration by Aetna Life
Insurance and Annuity Company on Form S-6 of its flexible premium variable
universal life insurance product, (the "Policies") under the Securities Act of
1933. The prospectus included in the Registration Statement was prepared under
my direction, and I am familiar with the Registration Statement, as amended, and
Exhibits thereto.

In my opinion, the illustrations of benefits under the Policies included in the
prospectus under the caption "Illustrations of Death Benefits, Total Account
Values and Surrender Values," based on the assumptions stated in the
illustrations, are consistent with the provisions of the respective forms of the
Policies. Also in my opinion the age selected in the illustrations is
representative of the manner in which the Policies operate.

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

Very truly yours,

/s/ Jo-Anne Rankin

Jo-Anne Rankin
Pricing Actuary

CONSENT OF INDEPENDENT AUDITORS

The Board of Directors of Aetna Life Insurance and Annuity Company and
Policyholders of Aetna Variable Life Account B:

We consent to the use of our reports dated February 4, 1997 and February 14,
1997 included herein and to the references to our Firm under the caption
"Independent Auditors" in the Prospectus.

/s/ KPMG Peat Marwick LLP

Hartford, Connecticut
July 17, 1997

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<NAME> Aetna Variable Life Account B

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<PERIOD-START> JAN-01-1996
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