VARIABLE ACCOUNT B AMERICAN INTL LIFE ASSUR CO OF NEW YORK, S-6, 1998-03-23

VARIABLE ACCOUNT B AMERICAN INTL LIFE ASSUR CO OF NEW YORK
S-6, 1998-03-23

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Filed with the Securities and Exchange Commission on March 23, 1998.

Registration No. 333-

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM S-6

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

A. Exact name of trust: Variable Account B

B. Name of depositor: American International Life Assurance
Company of New York

C. Complete address of depositor's principal executive offices:
80 Pine Street, New York, New York 10005

D. Name and address of agent for service:
Robert Liguori
Vice President and General Counsel
One Alico Plaza
600 King Street
Wilmington, Delaware 19801

COPIES TO:
Michael Berenson, Esq. Florence Davis, Esq.
Jorden Burt Boros Cicchetti American International Group, Inc.
Berenson & Johnson, LLP 70 Pine Street
Suite 400 East New York, New York 10270
1025 Thomas Jefferson Street, NW
Washington, D.C. 20007-0805

It is proposed that this filing will become effective:

______ immediately upon filing pursuant to paragraph (b) of Rule 485
______ on ____________ pursuant to paragraph (b) of Rule 485
______ 60 days after filing pursuant to paragraph (a)(1) of Rule 485
______ on ____________ pursuant to paragraph (a)(1) of Rule 485

If appropriate, check the following box:

______ this post-effective amendment designates a new effective date for
a previously filed post-effective amendment

E. Title and amount of securities being registered: Group Flexible Premium
Variable Universal Life Insurance Policies.

F. Proposed maximum aggregate offering price to the public of the securities
being registered: N/A

G. Amount of Filing Fee: N/A

<PAGE>

CROSS REFERENCE TO ITEMS REQUIRED

BY FORM N-8B-2

N-8B-2 Item Caption in Prospectus

1...................................... The Company, The Separate Account
2...................................... The Company
3...................................... Not Applicable
4...................................... Distribution of the Policy
5...................................... The Separate Account
6(a)................................... Not Applicable
6(b)................................... Not Applicable
9...................................... Legal Proceedings
10..................................... The Policy
11..................................... The Separate Account, The Funds and
the Investment Advisers
12..................................... The Separate Account, The Funds and
the Investment Advisers
13..................................... Charges and Deductions
14..................................... The Policy
15..................................... The Separate Account
16..................................... The Separate Account, The Funds and
the Investment Advisers
17..................................... The Policy
18..................................... The Policy
19..................................... Not Applicable
20..................................... Not Applicable
21..................................... Not Applicable
22..................................... Not Applicable
23..................................... Not Applicable
24..................................... Not Applicable
25..................................... The Company
26..................................... Not Applicable
27..................................... The Company
28..................................... The Company
29..................................... The Company
30..................................... The Company
31..................................... Not Applicable
32..................................... Not Applicable
33..................................... Not Applicable
34..................................... Not Applicable

<PAGE>

CROSS REFERENCE TO ITEMS REQUIRED

BY FORM N-8B-2 (CONT'D)

N-8B-2 Item Caption in Prospectus

35.................................... The Company
37.................................... Not Applicable
38.................................... Distribution of the Policy
39.................................... Distribution of the Policy
40.................................... Not Applicable
41(a)................................. Distribution of the Policy
42.................................... Not Applicable
43.................................... Not Applicable
44.................................... The Policy
45.................................... Not Applicable
46.................................... The Policy
47.................................... Not Applicable
48.................................... Not Applicable
49.................................... Not Applicable
50.................................... Not Applicable
51.................................... The Company, The Policy
52.................................... The Funds and the Investment Advisers
53.................................... Tax Considerations
54.................................... Financial Statements
55.................................... Not Applicable

<PAGE>

PART I

<PAGE>

Group Flexible Premium Variable Universal Life Insurance Policy

VARIABLE ACCOUNT B
of AMERICAN INTERNATIONAL LIFE ASSURANCE COMPANY
OF NEW YORK
80 Pine Street
New York, New York 10005
1-800-340-2765

This prospectus describes a group flexible premium variable universal
life insurance policy (the "Policy") offered by American International Life
Assurance Company of New York (the "Company"). The Policy provides insurance
protection for individuals within groups under corporate-owned or sponsored
arrangements. Corporate-owned arrangements include those in which an employer or
a trust established by an employer, for example, purchases life insurance
coverage on the lives of its employees and the employer or trust is the
beneficiary under the Policy. Sponsored arrangements may include, for example,
those instances where an employer, a financial institution, an association, or
group otherwise permitted by state insurance law, allows the Company to sell
insurance policies to, respectively, its employees, depositors, or members. An
Owner may be issued a certificate as evidence of individual insured coverage
under a group arrangement. The description of the Policy in this Prospectus is
fully applicable to any certificate that may be issued under the Policy. As used
herein the word "Policy" includes any such certificate.

The Policy is designed to provide lifetime insurance protection on the
named Insured and at the same time provide flexibility to vary the amount and
timing of Premiums and to change the amount of Life Insurance Proceeds payable.
This flexibility allows You as Owner to provide for changing insurance needs
under a single life insurance product.

You also have the opportunity to allocate Net Premium and Account Value
to one or more subaccounts of Variable Account B (the "Separate Account") and
the Company's general account (the "Guaranteed Account") within limits. This
Prospectus generally describes only that portion of the Account Value allocated
to the Separate Account. For a brief summary of the Guaranteed Account, see "The
Guaranteed Account," page ___.

The assets of each Subaccount are invested in a corresponding portfolio
as selected by the Owner from the following choices: the Premier Growth
Portfolio, Growth and Income Portfolio, and Quasar Portfolio of ALLIANCE
VARIABLE PRODUCTS SERIES FUND, INC. ("Alliance Fund"); the VIP Money Market
Portfolio of VARIABLE INSURANCE PRODUCTS FUND ("VIP"); the VIP II Index 500
Portfolio and VIP II Contrafund Portfolio of VARIABLE INSURANCE PRODUCTS FUND II
("VIP II") (VIP and VIP II, collectively, "Fidelity Funds"); the Fixed Income
Portfolio, High Yield Portfolio, Global Equity Portfolio, and U.S. Real Estate
Portfolio of MORGAN STANLEY UNIVERSAL FUNDS, INC. ("Morgan Stanley Funds"); the
Partners Portfolio of NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST ("Neuberger &
Berman Trust"); the Developing Markets Fund and International Fund of TEMPLETON
VARIABLE PRODUCTS SERIES FUND ("Templeton Fund"); the AIM V.I. Value Portfolio
of AIM VARIABLE INSURANCE FUNDS, INC. ("AIM Funds"); and the Growth and Income
Fund, CORE U.S. Equity Fund, CORE Large Cap Growth Fund, CORE Small Cap Equity
Fund, Capital Growth Fund, Mid Cap Equity Fund, International Equity Fund,
Global Income Fund, and High Yield Fund of GOLDMAN SACHS VARIABLE INSURANCE
TRUST ("Goldman Sachs Trust").

<PAGE>

The prospectuses for Alliance Fund, Fidelity Funds, Morgan Stanley
Funds, Neuberger & Berman Trust, Templeton Fund, AIM Funds, and Goldman Sachs
Trust (collectively, the "Funds") describe their respective portfolios,
including the risks of investing in the Funds, and provide other information on
the Funds and on their managers.

The Policy provides for a Net Cash Surrender Value that can be obtained
by surrender. Because this value is based on the investment performance of the
Subaccounts, to the extent of allocations to the Separate Account, there is no
guaranteed Net Cash Surrender Value. If the Net Cash Surrender Value is
insufficient to cover the charges due, coverage will lapse without value. The
Policy also provides for loans and permits partial surrenders within limits.

It may not be advantageous to replace existing insurance with the
Policy. Within certain limits, you may return the Policy or exchange it for
another life insurance policy issued by the Company with benefits that do not
vary with the investment results of a separate account. A Policy may be returned
according to the terms of its Period to Examine and Cancel (see "Period to
Examine and Cancel Policy," page __), during which time Net Premium allocated to
the Separate Account will be invested in the Money Market Subaccount.

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

INVESTMENTS IN THESE CONTRACTS ARE NOT DEPOSITS OR OBLIGATIONS OF, AND
ARE NOT GUARANTEED OR ENDORSED BY, ANY BANK OR BANK AFFILIATE. INVESTMENTS ARE
NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD, OR ANY OTHER GOVERNMENTAL AGENCY. ANY INVESTMENT IN THE CONTRACT
INVOLVES CERTAIN INVESTMENT RISKS WHICH MAY INCLUDE THE POSSIBLE LOSS OF
PRINCIPAL.

THIS PROSPECTUS SHOULD BE RETAINED FOR FUTURE REFERENCE.

Date of Prospectus: ___________, 1998

Distributor:
AIG Equity Sales Corp.
Attention: Variable Products
80 Pine Street
New York, New York 10270
1-800-888-7485

<PAGE>

TABLE OF CONTENTS

Page

DEFINITIONS OF TERMS.............................................

SUMMARY OF THE POLICY............................................

PERFORMANCE INFORMATION .....................

INFORMATION ABOUT THE COMPANY, THE SEPARATE ACCOUNT
AND THE FUNDS.................................................
PREMIUMS AND ALLOCATIONS.........................................

GUARANTEED ACCOUNT...............................................

CHARGES AND DEDUCTIONS...........................................

HOW YOUR ACCOUNT VALUE VARIES....................................

LIFE INSURANCE PROCEEDS AND CHANGES IN FACE AMOUNT...............

CASH BENEFITS....................................................

ILLUSTRATIONS OF ACCOUNT VALUE, NET CASH SURRENDER VALUE,
LIFE INSURANCE PROCEEDS AND ACCUMULATED PREMIUM...............

OTHER POLICY BENEFITS AND PROVISIONS.............................

TAX CONSIDERATIONS...............................................

MANAGEMENT OF THE COMPANY........................................

DISTRIBUTION OF THE POLICY.......................................

OTHER POLICIES ISSUED BY THE COMPANY.............................

STATE REGULATION.................................................

LEGAL PROCEEDINGS................................................

EXPERTS..........................................................

LEGAL MATTERS....................................................

PUBLISHED RATINGS................................................

FINANCIAL STATEMENTS.............................................

APPENDIX A.......................................................

<PAGE>

DEFINITIONS OF TERMS

Accounts. The Separate Account and the Guaranteed Account of the Company.

Account Value. The total amount in the Accounts credited to a Policy. The
Account Value is described on page ___.

Administrative Office. One Alico Plaza, P.O. Box 8718, Wilmington, Delaware
19899.

Age. The Insured's age as of his or her last birthday.

Allocation Date. The first business day after the Period to Examine and Cancel
expires. The Period to Examine and Cancel is described on page __.

Attained Age. The Insured's age as of the Policy Date plus the number of
complete Policy Years since the Policy Date.

Beneficiary. The person(s) who is entitled to the Life Insurance Proceeds under
the Policy.

Cash Surrender Value. Account Value less any applicable surrender charge that
would be deducted upon surrender.

Company, We, Our, Us. American International Life Assurance Company of New York.

Death Benefit Amount. The amount determined based on the Face Amount, Death
Benefit Qualification Option, and the Life Insurance Proceeds Option selected
and from which the Life Insurance Proceeds will be determined.

Face Amount. The amount of insurance specified by the Owner and from which the
Death Benefit Amount will be determined. The initial Face Amount is shown in the
Policy.

Grace Period. The period of time following a Monthly Anniversary during which
this Policy will continue in force while the Net Cash Surrender Value is not
sufficient to cover the total monthly deduction then due.

Guaranteed Account. An account within the general account which consists of all
of the Company's assets other than the assets of the Separate Account and any
other separate accounts of the Company.

Insured. A person whose life is covered under the Policy.

Issue Date. The date the Policy is issued. It may be a later date than the
Policy Date if the initial Premium is received at Our Administrative Office and
invested before underwriting has been completed. Once issued, Policy coverage is
retroactive to the Policy Date. The Issue Date is used to measure contestability
periods.

Life Insurance Proceeds. The amount payable to a Beneficiary if the Insured dies
while coverage under the Policy is in force.

<PAGE>

Loan Account. The portion of the Account Value held in the Guaranteed Account as
collateral for Policy loans. See page __.

Maturity Date. The first Policy Anniversary following the Insured's 100th
birthday.

Monthly Anniversary. The same day as the Policy Date for each succeeding month.
If the Monthly Anniversary falls on the 29th, 30th or 31st of any month that has
no such day, the Monthly Anniversary is deemed to be the last day of that month.
The monthly deduction is deducted on each Monthly Anniversary.

Net Account Value. The Account Value less any Outstanding Loans.

Net Cash Surrender Value. The Cash Surrender Value less any Outstanding Loans.

Net Premium. Premium less any expense charges deducted from Premium.

Outstanding Loan. The total amount of Policy loans, including both principal and
accrued interest.

Owner, You, Your. The person who purchased the Policy as shown in the
application, unless later changed. The Owner may be someone other than the
Insured.

Planned Periodic Premium. The amount of Premium selected by the Owner at the
time of application to be paid in a specified frequency until the Maturity Date.

Policy. The Group Flexible Premium Variable Universal Life Insurance contract
issued by the Company.

Policy Anniversary. An anniversary of the Policy Date.

Policy Date. The date as of which We have received the initial Premium and an
application in good order.

Policy Month. The month commencing with the Policy Date and ending on the day
before the first Monthly Anniversary, or any following month commencing with a
Monthly Anniversary and ending on the day before the next Monthly Anniversary.

Policy Year. The year commencing with the Policy Date and ending on the day
before the first Policy Anniversary, or any following year commencing with a
Policy Anniversary and ending on the day before the next Policy Anniversary.

Premium. The total consideration paid by the Owner in exchange for Our
obligations under the Policy.

Separate Account. Variable Account B, a separate investment account of the
Company.

Subaccount. A division of the Separate Account established to invest in shares
of a corresponding portfolio of a fund that is available for investment under
the Policy.

Valuation Date. Each day the New York Stock Exchange is open for trading.

<PAGE>

Valuation Period. A period commencing with the close of trading on the New York
Stock Exchange (currently 4 P.M., Eastern Time) on any Valuation Date and ending
as of the close of the New York Stock Exchange on the next succeeding Valuation
Date.

<PAGE>

SUMMARY OF THE POLICY

This summary is intended to provide a brief overview of the more
significant aspects of the Policy. Further detail is provided in this prospectus
and in the Policy. Unless the context indicates otherwise, the discussion in
this summary and the remainder of the Prospectus relates to the portion of the
Policy involving the Separate Account. The Guaranteed Account is briefly
described under "THE GUARANTEED ACCOUNT" on page __ and in the Policy.

Purpose of the Policy

The Policy offers an Owner insurance protection on the life of the
Insured through the Maturity Date for so long as the Policy is in force. Like
traditional life insurance, the Policy provides for an initial death benefit
equal to its Face Amount, accumulation of cash value, and surrender and loan
privileges. Unlike traditional life insurance, the Policy offers a choice of
investment alternatives and an opportunity for the Account Value and, if elected
by the Owner and under certain circumstances, its Life Insurance Proceeds to
grow based on investment results. The Policy is a flexible premium policy, so
that, unlike many other insurance policies and subject to certain limitations,
an Owner may choose the amount and frequency of premium payments. The Policy
indicates the initial Face Amount of insurance. The minimum Face Amount is
$50,000, unless the Company agrees otherwise.

Policy Values

An Owner may allocate Net Premium among the various Subaccounts that
comprise the Separate Account and that invest in corresponding portfolios of the
Funds. An Owner may also allocate Net Premium to the Guaranteed Account.

Depending on the investment experience of the selected Subaccounts, the
Account Value may increase or decrease on any day. The Life Insurance Proceeds
may or may not increase or decrease depending upon several factors, including
the Life Insurance Proceeds Option selected by the Owner. There is no guarantee
that the Account Value and Life Insurance Proceeds will increase. The Owner
bears the investment risk on that portion of the Net Premium and Account Value
allocated within the Separate Account.

The Policy will remain in force until the earlier of the death of the
Insured or a full surrender of the Policy, unless, before either of these
events, the Net Cash Surrender Value is insufficient to pay the current monthly
deduction on a Monthly Anniversary and a Grace Period expires without sufficient
additional premium payment or loan repayment by the Owner.

Premium Features

1) Initial Premium

The initial Premium is the total amount paid at the time of
application or at a later date. Policy coverage will not
become effective until the initial Premium is received by Our
Administrative Office.

<PAGE>

2) Planned Periodic Premium

The Planned Periodic Premium is the Premium designated at the
time of application as the amount planned to be paid at
specific intervals until the Maturity Date.

3) Flexibility

In general Premiums are flexible as to both timing and amount.
If Premiums cease at any time, the insurance provided under
the Policy will continue for as long as the Net Cash Surrender
Value is sufficient to keep the Policy in force. (See
"PREMIUMS AND ALLOCATIONS," page __.)

When applying for a Policy, an Owner will determine a Planned Periodic
Premium that provides for the payment of level Premiums over a specified period
of time. Each Owner will receive a Premium reminder notice on either an annual,
semi-annual, quarterly, or monthly basis; however, the Owner is not required to
pay Planned Periodic Premiums.

Payment of the Planned Periodic Premiums will not guarantee that a
Policy will remain in force. Instead, the duration of the Policy depends upon
the Policy's Net Cash Surrender Value. Even if Planned Periodic Premiums are
paid, the Policy will lapse any time the Net Cash Surrender Value is
insufficient to pay the current monthly deduction and a Grace Period expires
without sufficient payment. Any payment of additional Premium must be at least
$50.00. The Company also may reject or limit any Premium that would result in an
immediate increase in the Net Amount at Risk (defined on page ___) under the
Policy.

For information regarding the taxation of the Policy under federal
income tax law, see "TAX CONSIDERATIONS," page ___.

Policy Charges

There are charges and deductions which the Company will deduct from
each Policy. The deductions based on Premium are the sales charges, the deferred
acquisition cost tax ("DAC tax"), and the specific state and local premium tax
(a typical state premium tax rate would be in the range of 2% to 2.5%). (See
"CHARGES AND DEDUCTIONS," page __.) The Company, within its discretion, may
issue the Policy to an employer or trust with no sales charge or a reduced sales
charge, typically referred to as a "no-load" or "low-load" basis. In no event
will the sales charge exceed 9% of Premium.

On the Issue Date and each Monthly Anniversary, the following
deductions are made from the Account Value:

(a) administrative charges;
(b) insurance charges; and
(c) supplemental benefit charges, if any.

<PAGE>

The monthly deduction is made from the Subaccounts pro rata on the
basis of the portion of Account Value in each Subaccount. The administrative
charge is computed monthly at a maximum rate of $10.00 per Policy Month. There
is an additional monthly administrative charge of up to $25 per month during the
first Policy Year and the 12 months immediately following an increase in Face
Amount. Deductions are also made on a daily basis against the assets of each
Subaccount for mortality and expense risks assumed by the Company. (See "CHARGES
AND DEDUCTIONS," page ___.)

If the Policy is surrendered during the first 14 Policy Years, We will
deduct a surrender charge based on the initial Face Amount. If a Policy is
surrendered within 14 years immediately following an increase in Face Amount, we
will deduct a surrender charge based on the increase in Face Amount. The
surrender charge will be deducted before any surrender proceeds are paid.

A charge for partial surrenders is equal to a pro rata portion of the
surrender charge that would apply to a full surrender. A partial surrender
charge is also deducted from the Account Value upon a decrease in Face Amount.

The administrative charge upon a partial surrender will be equal to the
lesser of $25 or 2% of the amount surrendered per Insured. (See "CHARGES AND
DEDUCTIONS," page __.)

Life Insurance Proceeds

The Policy provides for the payment of Life Insurance Proceeds upon the
death of an Insured. The Owner elects in the application to have the Life
Insurance Proceeds determined under one of two Death Benefit Qualification
Options and Life Insurance Proceeds Options. (See "LIFE INSURANCE PROCEEDS AND
CHANGES IN FACE AMOUNT," page ___.)

Under Life Insurance Proceeds Option I, the Face Amount includes the
Account Value and the Death Benefit Amount will be the larger of (1) the Face
Amount on the date of death, or (2) the Account Value on the date of death
multiplied by the appropriate Minimum Death Benefit Factor for the Attained Age,
smoker status, and sex of the Insured at the time of death and the previously
selected Death Benefit Qualification Option. Under Life Insurance Proceeds
Option II, the Face Amount is in addition to the Account Value and the Death
Benefit Amount will be the larger of (1) the Face Amount plus the Account Value
on the date of death, or (2) the Account Value on the date of death multiplied
by the appropriate Minimum Death Benefit Factor for the Attained Age, smoker
status, and sex of the Insured at the time of death and the previously selected
Death Benefit Qualification Option.

<PAGE>

PERFORMANCE INFORMATION

The Company from time to time may advertise the "total return" and the
"average annual total return" of the Subaccounts and the Funds. Both total
return and average total return figures are based on historical earnings and are
not intended to indicate future performance.

"Total Return" for a portfolio refers to the total of the income
generated by the portfolio net of total portfolio operating expenses plus
capital gains and losses, realized or unrealized. "Total Return" for the
Subaccounts refers to the total of the income generated by the portfolio net of
total portfolio operating expenses plus capital gains and losses, realized or
unrealized, and the mortality and expense risk charge. "Average Annual Total
Return" reflects the hypothetical annually compounded return that would have
produced the same cumulative return if a Fund's portfolio's or Subaccount's
performance had been constant over the entire period. Because average annual
total returns tend to smooth out variations in the return of the portfolio, they
are not the same as actual year-by-year results.

The performance information illustrated below reflects the total of the
income generated by the portfolio net of the total portfolio operating expenses,
plus capital gains and losses, realized or unrealized. The performance results
do not reflect: monthly deductions; cost of insurance; surrender charges; sales
loads; mortality and expense risk charges; DAC taxes; and any state or local
premium taxes. If these charges were included, the total return figures would be
lower.

Performance information may be compared, in reports and promotional
literature, to: (i) the Standard & Poor's 500 Stock Index ("S&P 500"), Dow Jones
Industrial Average ("DJIA"), Shearson Lehman Aggregate Bond Index or other
unmanaged indices so that investors may compare the Subaccount results with
those of a group of unmanaged securities widely regarded by investors as
representative of the securities markets in general; (ii) other groups of
variable life separate accounts or other investment products tracked by Lipper
Analytical Services, a widely used independent research firm which ranks mutual
funds and other investment products by overall performance, investment
objectives, and assets, or tracked by other services, companies, publications,
or persons, such as Morningstar, Inc., who rank such investment products on
overall performance or other criteria; or (iii) the Consumer Price Index (a
measure for inflation) to assess the real rate of return from an investment in
the Subaccount. Unmanaged indices may assume the reinvestment of dividends but
generally do not reflect deductions for administrative and management costs and
expenses.

The Company may provide in advertising, sales literature, periodic
publications or other materials information on various topics of interest to
Owners and prospective Owners. These topics may include the relationship between
sectors of the economy and the economy as a whole and its effect on various
securities markets, investment strategies and techniques (such as value
investing, market timing, dollar cost averaging, asset allocation, constant
ratio transfer and account rebalancing), the advantages and disadvantages of
investing in tax-deferred and taxable investments, customer profiles and
hypothetical purchase and investment scenarios, financial management and tax and
retirement planning, and investment alternatives to certificates of deposit and
other financial instruments, including comparisons between the Policy and the
characteristics of and market for such financial instruments.

<PAGE>

Total return data may be advertised based on the period of time that
the portfolios have been in existence. The results for any period prior to the
Policy being offered will be calculated as if the Policy had been offered during
that period of time, with all charges assumed to be those applicable to the
Policy. Performance information for any Subaccount in any advertising will
reflect only the performance of a hypothetical investment in the Subaccount
during the particular time period on which the calculations are based.
Performance information should be considered in light of the investment
objectives and policies, characteristics and quality of the portfolio in which
the Subaccount invests and the market conditions during the given time period,
and should not be considered as a representation of what may be achieved in the
future. Actual returns may be more or less than those shown in any advertising
and will depend on a number of factors, including the investment allocations by
an Owner and the different investment rates of return for the portfolios.

<PAGE>

AVERAGE ANNUAL TOTAL RETURNS*+
As of
December 31, 1997

Inception Since
Portfolio Date 1 Year 3 Years 5 Years 10 Years Inception
- --------- ----------- ------ ------- ------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
ALLIANCE
Premier Growth 01/14/91 28.80% 29.46% 19.28% N/A 15.30%
Growth & Income 06/26/92 33.86% 33.50% N/A N/A 21.72%
Quasar 10/01/96 18.60% N/A N/A N/A 17.94%

FIDELITY
VIP Money Market 04/01/82 5.51% 5.60% 4.85% 5.87% 6.89%
VIP II Index 500 08/27/92 32.82% 30.76% 19.91% N/A 19.87%
VIP II Contrafund 01/03/95 24.14% N/A N/A N/A 28.16%

MORGAN STANLEY
Fixed Income 01/02/97 9.93% N/A N/A N/A 9.93%
High Yield 01/02/97 13.53% N/A N/A N/A 13.53%
Global Equity 01/02/97 20.04% N/A N/A N/A 20.04%
U.S. Real Estate 03/03/97 17.99% N/A N/A N/A 17.99%

NEUBERGER & BERMAN
Partners 03/22/94 31.25% 32.40% N/A N/A 24.18%

TEMPLETON (1)
Developing Markets 03/01/96 -29.30% N/A N/A N/A -19.90%
International 05/01/92 13.70% 17.80% N/A N/A 15.00%

AIM
V.I. Value 06/01/93 23.69% 24.69% N/A N/A 19.76%

</TABLE>
- -------------------------

* This performance information reflects the total of the income generated by
the portfolio net of the total portfolio operating expenses, plus capital
gains and losses, realized or unrealized. The data assumes the relevant
Subaccount was in existence on the portfolio's inception date. The
performance results do not reflect: monthly deductions; cost of insurance;
surrender charges; sales loads; mortality and expense risk charges; DAC
taxes; and any state or local premium taxes. (See "CHARGES AND DEDUCTIONS,"
page ___). If these charges were included, the total return figures would
be lower. The illustrations beginning on page ____ reflect the deduction of
all charges.

+ No information has been provided for Goldman Sachs Trust because it had not
commenced operation as of December 31, 1997.

(1) Assets represent each portfolio's Class 2 shares.

<PAGE>

INFORMATION ABOUT THE COMPANY,
THE SEPARATE ACCOUNT AND THE FUNDS

The Company

American International Life Assurance Company of New York is a stock
life insurance company organized under the laws of the State of New York in
1962. The Company provides a full range of individual and group life,
disability, accidental death and dismemberment policies and annuities. The
Company is a subsidiary of American International Group, Inc. ("AIG"), which
serves as the holding company for a number of companies engaged in the
international insurance business, both life and general, in approximately 130
countries and jurisdictions around the world.

The Separate Account

We established the Separate Account as a separate investment account in
1986. It may be used to support the Policy as well as other variable life
insurance policies, and for other purposes permitted by law. The Separate
Account is registered with the Securities and Exchange Commission (the "SEC") as
a unit investment trust under the Investment Company Act of 1940 (the "1940
Act") and qualifies as a "separate account" within the meaning of the federal
securities law.

We own the assets in the Separate Account. The Separate Account is
divided into Subaccounts. The Subaccounts available under the Policy invest in
shares of a specific series of the Funds. The Separate Account may include other
Subaccounts which are not available under the Policy and are not otherwise
discussed in this Prospectus.

Income, gains and losses, realized or unrealized, of a Subaccount are
credited to or charged against the Subaccount without regard to any other
income, gains or losses of the Company. Assets equal to the reserves and other
contract liabilities with respect to each Subaccount are not chargeable with
liabilities arising out of any other business or account of the Company. If the
assets exceed the required reserves and other liabilities, we may transfer the
excess to our general account. We are obligated to pay all benefits provided
under the Policy.

Subject to compliance with all applicable regulatory requirements, we
have reserved certain rights. We have the right to change, add or delete
designated investment companies. We have the right to add or remove Subaccounts.
We have the right to withdraw assets of a class of policies to which the Policy
belongs from a Subaccount and put them in another Subaccount. We also have the
right to combine any two or more Subaccounts. The term Subaccount in the Policy
shall then refer to any other Subaccount in which the assets of a class of
policies to which the Policy belongs were placed.

<PAGE>

We have the right to register other separate accounts or deregister the
Separate Account under the 1940 Act. We have the right to run the Separate
Account under the direction of a committee, and discharge such committee at any
time. We have the right to restrict or eliminate any voting rights of Owners, or
other persons who have voting rights as to the Separate Account. We also have
the right to operate the Separate Account or one or more of the Subaccounts by
making direct investments or in any other form. If We do so, We may invest the
assets of the Separate Account or one or more of the Subaccounts in any legal
investments. We will rely upon Our own or outside counsel for advice in this
regard. Also, unless otherwise required by law or regulation, an investment
adviser or any investment of a Subaccount of Our Separate Account will not be
changed by Us unless approved by the Commissioner of Insurance of the State of
New York or deemed approved in accordance with such law or regulation. If so
required, the process for getting such approval is on file with the insurance
supervisory official of the jurisdiction in which this Policy is delivered.

If any of these changes result in a material change in the underlying
investments of a Subaccount of Our Separate Account, We will notify You of such
change, as required by law. If You have value in that Subaccount, We will
transfer it at Your written direction from that Subaccount (without charge) to
another Subaccount of Our Separate Account or to Our Guaranteed Account, and You
may then change Your Premium allocation percentages.

The Funds and the Investment Advisers

The Funds are each registered with the SEC as a diversified open-end
management investment company under the 1940 Act. Each is a series-type mutual
fund made up of different series, referred to in this Prospectus as portfolios.
The investment objectives of each of the portfolios in which Subaccounts invest
are set forth below. Each of the Funds may include portfolios or funds which are
not available under this Policy.

The shares of the Funds may be sold not only to the Separate Account,
but to other separate accounts of the Company that fund benefits under variable
annuity contracts. The shares of the Funds are also sold to separate accounts of
other insurance companies. It is conceivable that in the future it may become
disadvantageous for variable life insurance and variable annuity contract
separate accounts to invest in the same underlying mutual fund. Although neither
We nor the Funds currently perceive or anticipate any such disadvantage, the
Company will monitor events to determine whether any material conflict between
variable life owners and variable annuity owners arises. Material conflicts
could result from such occurrences as (1) changes in state insurance laws, (2)
changes in federal income tax law; (3) changes in the investment management of
any Fund, or (4) differences between voting instructions given by variable
annuity owners and those given by variable life owners. In the event of a
material irreconcilable conflict, We will take the steps necessary to protect
our variable annuity and variable life owners. This could include discontinuance
of investments in a Fund.

Each Fund sells and redeems its shares at net asset value without any
sales charge. Any dividends or distributions from security transactions of a
Fund are reinvested at net asset value in shares of the same Fund; however,
there are sales and additional charges associated with the purchase of the
Policy. (See "PREMIUMS AND ALLOCATIONS," page ___.)

<PAGE>

ALLIANCE FUND

Premier Growth Portfolio -- seeks growth of capital by employing aggressive
investment policies. Investments will be made based upon their potential for
capital appreciation, with current income incidental to the objective of capital
growth.

Growth and Income Portfolio -- seeks to balance the objectives of reasonable
current income and reasonable opportunities for appreciation through investments
primarily in dividend-paying common stocks of good quality.

Quasar Portfolio -- seeks growth of capital by pursuing aggressive investment
policies. The portfolio invests principally in a diversified portfolio of equity
securities of any company and industry and in any type of security which is
believed to offer possibilities for capital appreciation.

The Alliance Fund is managed by Alliance Capital Management L.P.

FIDELITY FUNDS

VIP Money Market Portfolio -- seeks to obtain as high a level of current income
as is consistent with preserving capital and providing liquidity. The portfolio
will invest only in high quality U.S. dollar-denominated money market securities
of domestic and foreign issuers. An investment in the portfolio is neither
insured nor guaranteed by the U.S. government, and there can be no assurance
that the portfolio will maintain a stable $1.00 share price.

VIP II Index 500 Portfolio -- seeks investment results that correspond to the
total return of common stocks publicly traded in the United States, as
represented by the Standard & Poor's Composite Index of 500 Stocks (commonly
referred to as the "S&P 500"). Normally at least 80% of its assets are invested
in equity securities of companies that compose the S&P 500.

VIP II Contrafund Portfolio -- seeks capital appreciation by investing mainly in
equity securities of companies that the adviser believes to be undervalued due
to an overly pessimistic appraisal by the public. The portfolio usually invests
primarily in common stock and securities convertible into common stock, but it
has the flexibility to invest in any type of security that may produce capital
appreciation.

Fidelity Management & Research Company ("FMR") is the investment
adviser for the Fidelity Funds. FMR has entered into a sub-advisory agreement
with FMR Texas, Inc. on behalf of the VIP Money Market Portfolio.

MORGAN STANLEY FUNDS

Fixed Income Portfolio -- seeks above average total return over a market cycle
of three to five years by investing in a diversified portfolio of U.S.
government and agency securities, corporate bonds, foreign bonds,
mortgage-backed securities of domestic issuers, and other fixed income
securities and derivatives. Under normal circumstances, the portfolio will
invest at least 65% of its total assets in fixed income securities, not more
than 20% of which will be below investment grade (commonly referred to as "high
yield securities" or "junk bonds").

<PAGE>

High Yield Portfolio -- seeks above average total return over a market cycle of
three to five years by investing at least 65% of its total assets in high yield
securities of U.S. and foreign issuers including corporate bonds and other fixed
income securities.

Global Equity Portfolio -- seeks long-term capital appreciation by investing
primarily in growth-oriented common and preferred stocks, convertible
securities, rights and warrants to purchase common stocks, depositary receipts
and other equity securities.

U.S. Real Estate Portfolio -- seeks above-average current income and long-term
capital appreciation by investing primarily in equity securities of companies in
the U.S. real estate industry, including common stocks, shares or units or
beneficial interest in REITs, limited partnership interests in master limited
partnerships, rights or warrants to purchase common stocks, convertible
securities and preferred stock.

The investment adviser for Global Equity Portfolio is Morgan Stanley
Asset Management Inc., a wholly-owned subsidiary of Morgan Stanley, Dean Witter
Discover & Co., which is a publicly owned global financial services corporation.
The investment adviser for Fixed Income Portfolio and High Yield Portfolio is
Miller Anderson & Sherrerd, LLP, which is indirectly wholly-owned by Morgan
Stanley, Dean Witter Discover & Co.

NEUBERGER & BERMAN TRUST

Partners Portfolio -- seeks to achieve capital growth by investing principally
in common stocks of medium to large capitalization established companies, using
a value-oriented investment approach designed to increase capital with
reasonable risk.

Each portfolio of Neuberger & Berman Trust invests its assets in a
corresponding series of the Neuberger & Berman Advisers Managers Trust
("Advisers Managers Trust"), which is also an open-end management investment
company registered under the 1940 Act and is organized as a New York common law
trust. The investment performance of the Partners Portfolio will directly
correspond with the investment performance of the corresponding series of the
Advisers Managers Trust. This "Master/Feeder Fund" structure is different from
that of many other investment companies which directly acquire and manage their
own portfolios of securities.

Neuberger & Berman Management Incorporated serves as the investment
manager of each series of Advisers Managers Trust and as distributor of the
shares of and administrator of each portfolio of Neuberger & Berman Trust.
Neuberger & Berman, LLC serves as the sub-adviser for each series of Advisers
Managers Trust.

TEMPLETON FUND

Developing Markets Fund -- seeks to achieve this objective by investing
primarily in equity securities of issuers in countries having developing
markets. It is currently expected that under normal conditions at least 65% of
the portfolio's total assets will be invested in developing market equity
securities.

<PAGE>

International Fund -- seeks long-term capital growth through a flexible policy
of investing in stocks and debt obligations of companies and governments outside
the United States. In pursuit of its investment objective, the Fund will invest
at least 65% of its assets in securities of issuers in at least three countries
outside the United States.

Templeton Asset Management Ltd. serves as the investment manager to the
Developing Markets Funds and Templeton Investment Counsel, Inc. serves as the
investment manager to the International Fund.

AIM FUNDS

AIM V.I. Value Portfolio -- seeks to achieve long-term growth of capital by
investing primarily in equity securities judged to be undervalued relative to
the current or projected earnings of the companies issuing the securities or
relative to current market values of assets owned by the companies issuing the
securities or relative to the equity markets generally. Income is a secondary
objective.

AIM Advisors, Inc. is the investment adviser to the AIM Funds.

GOLDMAN SACHS TRUST

Growth and Income Fund -- seeks long-term growth of capital and growth of income
through investments in equity securities that are considered to have favorable
prospects for capital appreciation and/or dividend paying ability.

CORE U.S. Equity Fund -- seeks long-term growth of capital and dividend income
through a broadly diversified portfolio of large capitalization and blue chip
equity securities representing all major sectors of the U.S. economy.

CORE Large Cap Growth Fund -- seeks long-term growth of capital through a
broadly diversified portfolio of equity securities of large capitalization U.S.
issuers that are expected to have better prospects for earnings growth than the
growth rate of the general domestic economy.

CORE Small Cap Equity Fund -- seeks long-term growth of capital through a
broadly diversified portfolio of equity securities of U.S. issuers which are
included in the Russell 2000 Index at the time of investment.

Capital Growth Fund -- seeks long-term growth of capital through diversified
investments in equity securities of companies that are considered to have
long-term capital appreciation potential.

Mid Cap Equity Fund -- seeks long-term capital appreciation primarily through
investments in equity securities of companies with public stock market
capitalizations of between $500 million and $10 billion at the time of
investment.

International Equity Fund -- seeks long-term capital appreciation through
investments in equity securities of companies that are organized outside the
U.S. or whose securities are principally traded outside the U.S.

<PAGE>

Global Income Fund -- seeks high total return, emphasizing current income and,
to a lesser extent, providing opportunities for capital appreciation, by
investing primarily in a portfolio of high quality fixed income securities of
U.S. and foreign issuers and foreign currencies.

High Yield Fund -- seeks a high level of current income and secondarily, capital
appreciation, by investing primarily in fixed income securities rated below
investment grade.

Goldman Sachs Asset Management serves as investment adviser to the
Growth and Income, CORE U.S. Equity, CORE Large Cap Growth, CORE Small Cap
Equity, Capital Growth, Mid Cap Equity and High Yield Funds. Goldman Sachs Asset
Management International serves as investment adviser to the International
Equity and Global Income Funds.

There is no assurance that any of the portfolios will achieve their
stated objective. Owners are advised to read the Fund prospectuses for more
detailed information regarding management of the portfolios, investment
objectives, investment advisory fees, and other charges assessed by the Funds.

Substitution of Securities

If investment in a Subaccount should no longer be possible or, if in
Our judgment, becomes inappropriate to the purposes of the Policy, or, if in Our
judgment, investment in another Subaccount or insurance company separate account
is in the interest of Owners, We may substitute another Subaccount or insurance
company separate account. No substitution may take place without notice to
Owners and prior approval of the SEC and insurance regulatory authorities, to
the extent required by the 1940 Act and applicable law.

Voting Rights

We are the legal owner of shares held by the Subaccounts and as such
have the right to vote on all matters submitted to shareholders of the Funds.
However, as required by law, We will vote shares held in the Subaccounts at
regular and special meetings of shareholders of the Funds in accordance with
instructions received from Owners with Account Value in the Subaccounts. Should
the applicable federal securities laws, regulations or interpretations thereof
change so as to permit Us to vote shares of the Funds in Our own right, We may
elect to do so.

To obtain voting instructions from Owners, before a meeting We will
send Owners voting instruction material, a voting instruction form and any other
related material. The number of shares held by each Subaccount for which an
Owner may give voting instructions is currently determined by dividing the
portion of the Owner's Account Value in the Subaccount by the Net Asset Value of
one share of the applicable Fund. Fractional votes will be counted. The number
of votes for which an Owner may give instructions will be determined as of a
date chosen by the Company but not more than 90 days prior to the meeting of
shareholders. Shares held by a Subaccount for which no timely instructions are
received will be voted by the Company in the same proportion as those shares for
which voting instructions are received.

We may, if required by state insurance officials, disregard Owner
voting instructions if such instructions would require shares to be voted so as
to cause a change in sub-classification or investment objectives of one or more
of the Funds, or to approve or disapprove an investment advisory agreement. In

<PAGE>

addition, We may under certain circumstances disregard voting instructions that
would require changes in the investment policy or investment adviser of one or
more of the Funds, provided that We reasonably disapprove of such changes in
accordance with applicable federal regulations. If We ever disregard voting
instructions, We will advise Owners of that action and of Our reasons for such
action in the next semiannual report. Finally, We reserve the right to modify
the manner in which We calculate the weight to be given to pass through voting
instructions where such a change is necessary to comply with current federal
regulations or the current interpretation thereof.

PREMIUMS AND ALLOCATIONS

Applying for a Policy

In order to purchase a Policy, the Owner must complete an application
and submit it to the Company with an initial Premium payment at least equal to
the minimum required. (See "PREMIUMS," below.) The initial Premium may be
submitted with the application or at a later date, but Policy coverage will not
become effective until the initial Premium is received by Our Administrative
Office.

We require satisfactory evidence of the Insured's insurability, which
may include a medical examination of the Insured. Generally, We will issue a
Policy covering an Insured up to age 75 if evidence of insurability satisfies
Our underwriting rules. Acceptance of an application depends on Our underwriting
rules. We reserve the right to reject an application for any reason.

Period to Examine and Cancel Policy

The Policy provides for an initial period during which the Owner may
examine the Policy and cancel it for any reason (the "Period to Examine and
Cancel"). The Owner may cancel the Policy before the later of: (a) 45 days after
Part I of the Application for the Policy is signed or (b) 10 days after the
Owner receives the Policy. The period will be extended beyond 10 days after
Policy delivery, if required by the state where the Owner resides. Upon
returning the Policy to the Administrative Office or to an agent of the Company
within such time with a written request for cancellation, the Owner will receive
a refund equal to the gross Premium paid on the Policy which will not reflect
the investment experience of the Separate Account.

The Period to Examine and Cancel also applies after a requested
increase in Face Amount as to the amount of the increase and the Premium paid
for the increased Face Amount.

Premiums

The minimum initial Premium required depends on a number of factors,
such as the age, sex and underwriting rate class of the proposed Insured, the
desired Face Amount, and any supplemental benefits.

Additional Premiums may be paid in any amount and at any time, subject
to the following limits. First, a Premium must be at least $50 per Insured and
must be sent to Our Administrative Office. We may require satisfactory evidence
of insurability before accepting any Premium which results in an increase in the
Net Amount at Risk.

<PAGE>

In addition, we may refuse to accept Premium that would cause the
Policy to fail to qualify as a life insurance contract as defined in Section
7702 of the Internal Revenue Code, as amended (the "Code").
We will refund any portion of any Premium that is excess Premium. In addition,
We will monitor the Policy and will attempt to notify the Owner on a timely
basis if a Policy is in jeopardy of becoming a modified endowment contract
("MEC") under the Code. (See "TAX CONSIDERATIONS," page __.)

Lastly, no Premium will be accepted after the Maturity Date.

Planned Periodic Premiums. When applying for a Policy, You select a
plan for paying level Premiums at specified intervals, e.g., monthly, quarterly,
semi-annually or annually, until the Maturity Date. You are not required to pay
Premiums in accordance with this plan; rather, You can pay more or less than
planned or skip a Planned Periodic Premium entirely. You can change the amount
and frequency of Planned Periodic Premiums whenever You want by sending written
notice to Our Administrative Office. However, We reserve the right to limit the
amount of a Premium or the total Premiums paid, as discussed above. The Planned
Periodic Premium may be recalculated if the Face Amount of the Policy is
increased or decreased.

The first year minimum Premium payable must be at least as great as the
Planned Periodic Premium. If Premiums cease at any time, the insurance provided
under the Policy will continue for as long as the Net Cash Surrender Value in
the Policy is sufficient to keep it in force. (See "GRACE PERIOD" below).

We will send You a reminder notice for Your Planned Periodic Premiums.

Premiums Upon Increase in Specified Face Amount. Depending on the
Account Value at the time of an increase in the Face Amount and the amount of
the increase requested, an additional Premium or change in the amount of Planned
Periodic Premiums may be advisable. (See "CHANGES IN FACE AMOUNT," page ___.)

Premiums to Prevent Lapse

Failure to pay Planned Periodic Premiums will not necessarily cause a
Policy to lapse. Conversely, paying all Planned Periodic Premiums will not
necessarily guarantee that a Policy will not lapse. Rather, whether a Policy
lapses depends on whether its Net Cash Surrender Value is insufficient to cover
the monthly deduction when due (see page ___).

If the Net Cash Surrender Value on a Monthly Anniversary is less than
the amount of the monthly deduction to be deducted on that date, the Policy will
be in default and a Grace Period will begin. This could happen if investment
experience has been sufficiently unfavorable that it has resulted in a decrease
in the Net Cash Surrender Value or the Net Cash Surrender Value has decreased
because of any combination of the following: Outstanding Loans, partial
surrenders, expense charges, or insufficient Premiums paid to offset the monthly
deduction. A Policy that lapses with an Outstanding Loan may have tax
consequences. (See "TAX CONSIDERATIONS," page ___.)

<PAGE>

Grace Period. In order for insurance coverage to remain in force, the
Net Cash Surrender Value must be sufficient to cover the total monthly
deductions. If the Net Cash Surrender Value at the beginning of a Policy Month
is less than such deductions for that month, the Company will send a written
notice within 30 days stating that a Grace Period of 61 days has begun, starting
with the beginning of that Policy Month. The notice will also state the amount
of Premium required to increase the Net Cash Surrender Value sufficiently to
cover total monthly deductions for three (3) months. If we do not receive the
requested Premium before the end of the Grace Period, the Policy will end
without value. Your Policy will remain in effect during the Grace Period. If the
Insured should die during the Grace Period or before the Grace Period Premium is
paid, the Life Insurance Proceeds will still be payable to the Beneficiary,
although the amount paid will reflect a reduction for the monthly deductions due
on or before the date of the Insured's death. (See "LIFE INSURANCE PROCEEDS,"
page ___.)

Net Premium Allocations

In the application, You specify the percentage of Net Premium to be
allocated to each Subaccount. This allocation must comply with the allocation
rules described in the following paragraph. However, until the Period to Examine
and Cancel expires, all Net Premium received are invested in the Money Market
Subaccount. The first business day after the period expires, the Account Value
in the Money Market Subaccount is transferred and allocated based on the Premium
allocation percentages in the application. (See "DETERMINING THE POLICY VALUE,"
page ___.)

The Premium allocation percentages specified in the application will
apply to subsequent Premiums until You change them. You can change the
allocation percentages at any time, subject to the rules below, by sending
written notice to Our Administrative Office. The change will apply to all
Premiums received with or after Your notice.

Dollar Cost Averaging

If elected, this option allows for automatic transfer from the Money
Market Subaccount into other Subaccounts for a specified dollar amount or for a
specified number of months not in excess of twenty-four. This option can be
elected at any time provided there is a minimum balance of $2,000 per Insured in
the Money Market Subaccount at the time of election. The allocation to the
Subaccounts will be based on Your Premium allocation that is in effect at the
time of each transfer. The automatic transfers will begin on the first Monthly
Anniversary following the end of the Period to Examine and Cancel; or, if You
elect the option after Your application has been submitted, the automatic
transfers will begin on the second Monthly Anniversary following the receipt of
Your request at Our Administrative Office.

If You elect to transfer a specific dollar amount each month, the
automatic transfers will continue until Your Money Market Subaccount is
depleted. If You elect to have Your funds transferred over a specific number of
months, We will transfer a fraction equal to one divided by the number of months
remaining in the period. For example, if You elect to transfer over a 12 month
period, the first transfer will be 1/12 of Your Money Market Subaccount value,
the second transfer will be for 1/11, the third will be for 1/10 and so on until
the end of the requested period.

Automatic transfers will remain in effect until one of the following
conditions occur:

<PAGE>

1. The funds in the Money Market Subaccount are depleted;
2. We receive Your written request at Our Administrative Office to
cancel future transfers;
3. We receive notification of death of the Insured; or
4. The Policy lapses.

Use of Dollar Cost Averaging does not guarantee investment gains or
protect against loss in a declining market. The allocation and transfer
provisions discussed below do not apply to transfers effected under Dollar Cost
Averaging.

Allocation Rules. No less than 5% of a Premium may be allocated to any
one Subaccount. The sum of Your allocations must equal 100% and each allocation
percentage must be a whole number.

Crediting Premiums

The initial Net Premium will be credited to the Policy as of the Policy
Date. Subsequent Planned Periodic Premiums and accepted unplanned Premium will
be credited to the Policy and Net Premium will be invested as of the date the
Premium or notification of deposit is received at Our Administrative Office.
However, any Net Premium requiring underwriting will be allocated to the Money
Market Subaccount until underwriting has been completed. When accepted or at the
end of the Period to Examine and Cancel, the Account Value in the Money Market
Subaccount attributable to the resulting Net Premium will be credited to the
Policy and allocated in accordance with the specified allocation percentages.
Subsequent to the Period to Examine and Cancel, Net Premium not requiring
underwriting will be invested in the Subaccounts according to the specified
allocation percentages directly. If additional Premium is rejected, We will
refund the excess amount.

Transfers

You may transfer Account Value among the Subaccounts subject to the
following rules, some of which depend on whether Account Value is to be
transferred from a Subaccount or the Guaranteed Account. Transfer requests must
be in writing. Transfers may not be requested until after the end of the Period
to Examine and Cancel (see page ___). A transfer will take effect on the date
the request is received at Our Administrative Office. We may, however, defer
transfers under the same conditions as described in "WHEN PROCEEDS ARE PAID,"
page ___. There is no limit on the number of transfers. However, after twelve
(12) transfers per Insured have been made during a Policy Year, We currently
impose a $25 transfer charge per Insured on each subsequent transfer. (See
"TRANSFER CHARGE," page ___.) The Company reserves the right to increase or
decrease the number of "free" transfers allowed in any Policy Year.

The minimum amount of Account Value that may be transferred is $250 per
Insured. If less than the full amount of Account Value in a Subaccount is being
transferred from the Subaccount, the amount remaining must be at least $250 per
Insured. If the amount remaining would be less than $250 per Insured, the full
amount of the Account Value will be transferred.

Subaccount Transfer Rules. Transfers among Subaccounts and from
Subaccounts to the Guaranteed Account may be made at any time after the Period
to Examine and Cancel. All transfers processed on the same business day will
count as one transfer per Insured for purposes of determining whether the
transfer is free or may be subject to the $25 charge per Insured.

<PAGE>

Guaranteed Account Transfer Rules. Account Value held in the Guaranteed
Account may be transferred to a Subaccount or Subaccounts only during the 60-day
period within 30 days before and following the end of each Policy Year. The
amount transferred must be at least $250 per Insured, or the Account Value held
in the Guaranteed Account, whichever is less. If the amount transferred is less
than the Account Value then held in the Guaranteed Account, at least $250 per
Insured must remain in the Guaranteed Account. The maximum allowable amount that
can be transferred from the Guaranteed Account, at any one time, is 25% of the
unloaned portion of the Guaranteed Account. For additional rules and limits for
the Guaranteed Account, see "DEDUCTIONS FROM THE GUARANTEED ACCOUNT," page ___.

GUARANTEED ACCOUNT

Because of exemptive and exclusionary provisions, interests in the
Guaranteed Account have not been registered under the Securities Act of 1933 nor
has the Guaranteed Account been registered as an investment company under the
1940 Act. Accordingly, neither the Guaranteed Account nor any interests therein
are subject to the provisions of these Acts and, as a result, the staff of the
SEC has not reviewed the disclosure in this Prospectus relating to the
Guaranteed Account. The disclosure regarding the Guaranteed Account may,
however, be subject to certain generally applicable provisions of the federal
securities laws relating to the accuracy and completeness of statements made in
prospectuses.

The Guaranteed Account is an account within the general account of the
Company. It is part of Our general account assets. Our general account assets
are used to support Our insurance and annuity obligations other than those
funded by separate accounts. Subject to applicable law, We have sole discretion
over the investment of the assets of the general account. The Loan Account is
part of the Guaranteed Account.

Interest Credited on Policy Value in the Guaranteed Account

Net Premium allocated to the Guaranteed Account and Account Value
transferred from the Subaccounts to the Guaranteed Account are credited to the
Guaranteed Account portion of the Account Value. We will credit interest on
these amounts at rates We determine in Our sole discretion, but in no event will
interest credited on these amounts be less than an effective rate of at least
0.32737% per month, compounded monthly which equates to 4% per year, compounded
annually. The Loan Account portion of the Guaranteed Account will be credited
with interest at an annual rate that is 2.0% less than the then current Policy
loan interest rate.

However, if at the time of an allocation or transfer to the Guaranteed
Account, We are crediting a rate of interest higher than 4%, the higher rate
will apply to the amount from the date of its allocation or transfer to the
Guaranteed Account through the end of the period during which the excess rate is
effective. If a higher rate of interest is credited, different rates of interest
may apply to amounts allocated or transferred at different times, and different
rates of interest may apply to amounts held in a Loan Account than to the
remaining portion of Account Value held in the Guaranteed Account. YOU ASSUME
THE RISK THAT INTEREST CREDITED MAY NOT EXCEED THE GUARANTEED MINIMUM RATE OF 4%
PER YEAR.

<PAGE>

Calculating Guaranteed Account Value

The Guaranteed Account Value is calculated daily. (See "GUARANTEED
ACCOUNT VALUE," page __.)

Deductions from the Guaranteed Account

Whenever a charge is deducted from the Account Value in the Guaranteed
Account, or an amount is withdrawn from the Account Value in the Guaranteed
Account to satisfy a partial surrender, transfer or Policy loan request, the
charge or withdrawal will be taken first from the amount most recently allocated
to the Guaranteed Account, then the amount next most recently allocated, and so
forth. See page ___ for limits and restrictions on transfers of Account Value
from the Guaranteed Account.

If there is any Account Value in the Loan Account, it is not available
for transfers, partial surrenders or Policy loans, nor any charges deducted from
this portion of Account Value. Amounts are transferred to or from the Loan
Account only when Policy loans are taken or repayments made. If an amount is
transferred from the Loan Account to the remaining portion of the Guaranteed
Account Value, it will be treated as a new allocation to the Guaranteed Account
and will be credited with interest at the rate then in effect for Guaranteed
Account allocations. (See "LOAN ACCOUNT," page ___.)

Payments from the Guaranteed Account

We may defer payment of proceeds from the Guaranteed Account for a
partial surrender, surrender or Policy loan request for up to six months from
the date We receive the written request. If a payment from the Guaranteed
Account is deferred for 30 days or more, it will bear interest at a rate of 4%
per year compounded annually while it is deferred.

CHARGES AND DEDUCTIONS

Periodically, the Company will deduct charges from the Account Value
and also from each Premium to cover certain expenses relating to the issuance
and administration of the Policy. These charges and deductions are described in
the Policy as either guaranteed or current. The Company will never charge more
than the guaranteed amount; however, solely within the Company's discretion, it
may on a current basis charge less than the guaranteed amount.

Premium Taxes and DAC Taxes

Premium taxes and DAC taxes are based on Premium. Premium taxes are
charged at an explicit percent of Premium equal to the state and local tax
rates. A typical state premium tax would be in the range of 2% to 2.6% of
Premium. The Company will deduct a specific amount based on the place of
residence of the Insured. DAC taxes will be deducted from Account Value at a
rate equal to 1.25% of Premium.

<PAGE>

At the time of application, the Owner may select from the optional
methods then offered by the Company in place of the lump sum deductions
described above. For the deduction of premium taxes, there is currently the
option of a level annual charge against Account Value at an annual rate based on
the place of residence of the Insured not to exceed 0.90% of each Premium for a
period of 10 years from the date the Premium is received.

The Company also currently offers the following options for the
deduction of DAC taxes: (1) a deduction of 4.146% from Premium, with DAC credits
reflected directly in Account Value as credits are received by the Company from
the Internal Revenue Service over 11 years; or (2) a level annual deduction from
Account Value at an annual rate that will not exceed 0.40% of each Premium for a
period of 10 years from the date the Premium is received.

Sales Charge

The Company may deduct a sales charge from each Premium paid and may
also deduct a sales charge from Account Value, either in place of a deduction
from Premium, or in combination with a deduction from Premium. If a sales charge
is deducted either from Premium or Account Value, or both, the total sales
charge will not exceed 9% of total Premium. An additional sales charge may be
deducted on a partial surrender or surrender of a Policy during the first 14
Policy Years. (See "SURRENDER CHARGE," page ___.)

The sales charge partially compensates Us for the expenses of selling
and distributing the Policy, including paying sales commissions, printing
prospectuses, preparing sales literature and paying for other promotional
activities. Under certain employer-owned, trust-owned, or sponsored
arrangements, some of these expenses or other administrative expenses may be
assumed by an employer or group sponsor. In such cases and within the sole
discretion of the Company, there may be no sales charge or a reduced sales
charge.

Mortality and Expense Risk Charge

We deduct a daily charge from assets in the Subaccounts attributable to
the Policies for assuming certain mortality and expense risks under the Policy.
This charge does not apply to Guaranteed Account assets attributable to the
Policies. The current charge is at an annual rate of 0.75% of net assets.
Although the charge may be decreased at the sole discretion of the Company, it
is guaranteed not to exceed 1.00% for the duration of a Policy. If a Policy is
issued with a current charge of less than 1.00%, We will notify You before We
increase this charge. We may realize a profit from this charge.

The mortality risk We assume is that the Insured under a Policy may die
sooner than anticipated and that therefore the Company will pay an aggregate
amount of Life Insurance Proceeds greater than anticipated. The expense risk we
assume is that expenses incurred in issuing and administering the Policies and
the Separate Account will exceed the amounts realized from the administrative
charges assessed against the Policies.

<PAGE>

Monthly Deduction

On the Issue Date and each Monthly Anniversary, We deduct the monthly
deduction from the Account Value. The amount deducted on the Issue Date is for
the Policy Date and any Monthly Anniversaries that have elapsed since the Policy
Date. For this purpose, the Policy Date is treated as a Monthly Anniversary. The
monthly deduction consists of (1) administrative charges ("Monthly Expense
Charge"), (2) insurance charges ("Cost of Insurance Charge"), and (3) any
charges for additional benefits added by supplemental agreement to a Policy
("Supplemental Benefit Charges") and DAC taxes. The monthly deduction is
deducted from the Accounts pro rata on the basis of the portion of Account Value
in each Account. (See "DEDUCTIONS FROM THE GUARANTEED ACCOUNT," page ___.)

Current and Guaranteed Expense Charges. The current Monthly Expense
Charge consists of (1) an administrative charge of $7.50 per Insured and
guaranteed not to exceed $10.00 per Policy Month and (2) an additional monthly
administrative charge during the first Policy Year and the twelve months
immediately following an increase in Face Amount currently at a monthly rate of
$20 per Insured and guaranteed not to exceed $25 per Insured per Policy Month.

These charges compensate Us for administrative expenses associated with
the Policy and the Separate Account. These expenses relate to Premium billing
and collection, recordkeeping, processing claims, Policy loans, Policy changes,
reporting and overhead costs, processing applications and establishing Policy
records.

Cost of Insurance Charge. This charge compensates Us for providing
insurance coverage. The charge depends on a number of factors, such as Attained
Age, sex and rate class of the Insured, and therefore will vary from Policy to
Policy and from Monthly Anniversary to Monthly Anniversary. For any Policy the
cost of insurance on a Monthly Anniversary is calculated by multiplying the cost
of insurance rate for the Insured by the Net Amount at Risk under the Policy on
that Monthly Anniversary.

The Net Amount at Risk is calculated as (a) minus (b) where:

(a) is the current Life Insurance Proceeds at the beginning of the
Policy month divided by 1.0032737; and

(b) is the current total Account Value.

The cost of insurance rate for a Policy is based on the Attained Age,
sex and rate class of the Insured, and therefore varies from time to time. We
currently place Insureds in one of three basic rate classifications, based on
Our underwriting: a smoker, a nonsmoker standard, or a rate class involving a
higher mortality risk (a "substandard class"). Insureds Attained Age 14 and
under are placed in a rate class that does not distinguish between smoker and
nonsmoker, and are assigned to a smoker class at Attained Age 15 unless they
have provided satisfactory evidence that they qualify for a nonsmoker class.

<PAGE>

We place the Insured in a rate class when We issue the Policy based on
Our underwriting of the application. This original rate class applies to the
initial Face Amount. When an increase in Face Amount is requested, We conduct
underwriting before approving the increase (except as noted below) to determine
whether a different rate class will apply to the increase. If the rate class for
the increase has lower cost of insurance rates than the original rate class, the
rate class for the increase also will be applied to the initial Face Amount. If
the rate class for the increase has higher cost of insurance rates than the
original rate class, the rate class for the increase will apply only to the
increase in Face Amount, and the original rate class will continue to apply to
the initial Face Amount.

If there have been increases in the Face Amount, we may use different
cost of insurance rates for the increased portions of the Face Amount. For
purposes of calculating the cost of insurance charge after the Face Amount has
been increased, the Account Value will be applied to the initial Face Amount
first and then to any subsequent increases in Face Amount. If at the time an
increase is requested, the Account Value exceeds the initial Face Amount (or any
subsequently increased Face Amount) divided by 1.0032737, the excess will then
be applied to the subsequent increase in Face Amount in the sequence of the
increases.

In order to maintain the Policy in compliance with Section 7702 of the
Code, under certain circumstances an increase in Account Value will cause an
automatic increase in the Life Insurance Proceeds. The Attained Age and
underwriting class for such increase will be the same as that used for the most
recent increase in Face Amount (that has not been eliminated through a
subsequent decrease in Face Amount).

If there is a decrease in Face Amount after there had been prior
increases to the Face Amount, then for purposes of calculating the cost of
insurance charge, the decrease will first be applied to reduce any prior
increases in Face Amount, starting with the most recent increase in Face Amount
and then to each prior increase.

The guaranteed cost of insurance rates for substandard policies issued
on a table rated basis are based on multiples of the 1980 CSO tables. The
substandard multiple applicable depends on the substandard underwriting
classification assigned to the insured. Currently, multiples range from 125% to
500% of the 1980 CSO tables.

The guaranteed cost of insurance charges at any given time for a
substandard policy with flat extra charges will be based on the guaranteed
maximum cost of insurance rate for the policy (including table rating multiples,
if applicable), the current Net Amount at Risk at the time the deduction is
made, plus the actual dollar amount of the flat extra charge.

Our current cost of insurance rates may be less than the guaranteed
rates. Our current cost of insurance rates will be determined based on Our
expectations as to future mortality, investment, expense and persistency
experience. These rates may change from time to time. In the Company's
discretion, the current charge may be increased in any amount up to the maximum
guaranteed charge shown in the table. Cost of insurance rates (whether
guaranteed or current) for an Insured in a nonsmoker standard class are lower
than guaranteed rates for an Insured of the same age and sex in a smoker
standard class. Cost of insurance rates (whether guaranteed or current) for an
Insured in a nonsmoker or smoker standard class are generally lower than
guaranteed rates for an Insured of the same age and sex and smoking status in a
substandard class.

<PAGE>

We do not conduct underwriting for an increase in Face Amount if the
increase is requested as part of a conversion from a term policy issued by the
Company. In the case of a term conversion, the rate class that applies to the
increase is the same rate class that applied to the term policy.

Legal Considerations Relating to Sex-Distinct Premiums and Benefits.
Mortality tables for the Policy generally distinguish between males and females.
Thus, Premiums and benefits under the Policy covering males and females of the
same age will generally differ.

We do, however, also offer the Policy based on unisex mortality tables
if required by state law. Employers and employee organizations considering
purchase of a Policy should consult their legal advisers to determine whether
purchase of a Policy based on sex-distinct actuarial tables is consistent with
Title VII of the Civil Rights Act of 1964 or other applicable law. Upon request,
We may offer the Policy with unisex mortality tables to such prospective
purchasers.

Transfer Charge

We currently impose a $25 transfer charge on any transfer of Account
Value among the Subaccounts in excess of 12 free transfers per Insured permitted
each Policy Year. If the charge is imposed, it will be deducted from the amount
requested to be transferred before allocation to the new Subaccount(s) and shown
in the confirmation of the transaction. If an amount is being transferred from
more than one Subaccount, the transfer charge will be deducted proportionately
from the amount being transferred from each Subaccount. This charge, if imposed,
will reimburse Us for administrative expenses incurred in effecting transfers.

Surrender Charge

The following discussion of the surrender charge presents the maximum
surrender charge that may be imposed under the Policy. Under certain
employer-owned, trust-owned, and sponsored arrangements where Sales Charges have
been reduced because the Company's sales and administrative expenses were
lessened, the Company in its sole discretion, may also reduce or waive the
surrender charge. Otherwise, the following discussion of the surrender charge
will be applicable.

If the Policy is surrendered during the first 14 Policy Years, We will
deduct a surrender charge based on the initial Face Amount. If a Policy is
surrendered within 14 years after an increase in Face Amount, We will deduct a
surrender charge based on the increase in Face Amount. The surrender charge will
be deducted before any surrender proceeds are paid.

Surrender Charge Based On Initial Face Amount. The surrender charge
based on the initial Face Amount will be no greater than the product of (1)
times (2) times (3) where:

(1) is equal to the Face Amount divided by $1,000;

(2) is equal to a surrender charge factor per $1,000 based on the
Insured's Issue Age, sex and underwriting class; and

(3) is equal to the Policy duration factor as described in the
following table:

<PAGE>

Policy Policy Duration
Duration Factor
------- ------------
<S> <C>
1............................................................ 100%
2............................................................ 100%
3............................................................ 100%
4............................................................ 100%
5............................................................ 100%
6............................................................ 90%
7............................................................ 80%
8............................................................ 70%
9............................................................ 60%
10............................................................ 50%
11............................................................ 40%
12............................................................ 30%
13............................................................ 20%
14............................................................ 10%
15+........................................................... 0%

</TABLE>

A table of surrender charge factors per $1,000 of Face Amount for
various age, sex, and underwriting classes is shown in Appendix A.

Surrender Charge Based On An Increase In Face Amount. An increase in
Face Amount of the Policy will result in an additional surrender charge during
the 14 Policy Years immediately following the increase. The additional surrender
charge period will begin on the effective date of the increase. If the Face
Amount of the Policy is reduced before the end of the 14th Policy Year or within
14 years immediately following a Face Amount increase, We may also deduct a pro
rata share of any applicable surrender charge from Your Account Value.
Reductions will first be applied against the most recent increase in the Face
Amount of the Policy. They will then be applied to prior increases in Face
Amount of the Policy in the reverse order in which such increases took place,
and then to the initial Face Amount of the Policy.

Partial Surrender Charge

The partial surrender charge is equal to a pro rata portion of the
surrender charge that would apply to a full surrender, determined by multiplying
the applicable full surrender charge by a fraction (equal to the partial
surrender amount payable plus the partial surrender administrative charge
divided by the result of subtracting the applicable surrender charge from the
unloaned portion of the Account Value). This amount is assessed against the
Subaccounts or the Guaranteed Account in the same manner as provided for with
respect to the partial surrender amount paid.

A partial surrender charge is also deducted from the Account Value upon
a decrease in Face Amount. The charge is equal to the applicable surrender
charge multiplied by a fraction (equal to the decrease in Face Amount divided by
the Face Amount of the Policy prior to the decrease).

<PAGE>

Partial Surrender Administrative Charge

We will deduct an administrative charge upon a partial surrender. The
administrative charge per Insured for a partial surrender will be equal to the
lesser of $25 or 2% of the amount surrendered. This charge will be deducted from
the Account Value in addition to the amount requested to be surrendered and will
be considered to be part of the partial surrender amount. (See page __ for rules
for allocating the deduction and "Partial Surrenders" on page __.)

Each partial surrender will reduce the Account Value by the amount of
partial surrender plus the proportional surrender charge and the partial
surrender administrative charge. If Life Insurance Proceeds Option I is selected
, the Face Amount will also be reduced by the amount of the partial surrender in
the following order:

1. The most recent increase in the Face Amount, if any, will be
reduced first.
2. The next most recent increases in the Face Amount, if any, will
then be successively decreased.
3. The initial Face Amount will then be decreased.

Discount Purchase Programs

The amount of the surrender charge and other charges under the Policy
may be reduced or eliminated when sales of the Policy are made to individuals or
to groups of individuals in a manner that, in the opinion of the Company,
results in savings of sales expenses. For purchases made by officers, directors
and employees of the Company, an affiliate, or any individual, firm, or company
that has executed the necessary agreements to sell the Policy, and members of
the immediate families of such officers, directors, and employees, the Company
may reduce or eliminate the surrender charge. Any variation in charges under the
Policy, including the surrender charge, administrative charge or mortality and
expense risk charge, will reflect differences in costs or services and will not
be unfairly discriminatory.

HOW YOUR ACCOUNT VALUE VARIES

There is no minimum guaranteed Account Value or Net Cash Surrender
Value. These values will vary with the investment experience of the Subaccounts
and/or the crediting of interest in the Guaranteed Account, and will depend on
the allocation of Account Value. If the Net Cash Surrender Value on a Monthly
Anniversary is less than the amount of the monthly deduction to be deducted on
that date (see page __), the Policy will be in default and a Grace Period will
begin.

Determining the Account Value

On the Policy Date the Account Value is equal to the initial Net
Premium. If the Policy Date and the Issue Date are the same day, the Account
Value is equal to the initial Net Premium, less the monthly deduction. On each
Valuation Date thereafter, the value is the aggregate of the accumulation values
in the Subaccounts and the Guaranteed Account portion of the Account Value. The
Account Value will vary to reflect the performance of the Subaccounts to which
amounts have been allocated, interest credited on amounts allocated to the
Guaranteed Account, charges, transfers, withdrawals, Policy loans and Policy
loan repayments.

Accumulation Unit Values. When You allocate an amount to a Subaccount,
either by Net Premium allocation or transfer of Account Value, Your Policy is
credited with accumulation units in that Subaccount.

<PAGE>

The number of accumulation units is determined by dividing the amount allocated
to the Subaccount by the Subaccount's accumulation unit value for the Valuation
Date when the allocation is effected.

The number of Subaccount accumulation units credited to Your Policy
will increase when Net Premium is allocated to the Subaccount, amounts are
transferred to the Subaccount and loan repayments are credited to the
Subaccount. The number of Subaccount accumulation units credited to a Policy
will decrease when the allocated portion of the monthly deduction is taken from
the Subaccount, a Policy loan is taken from the Subaccount, an amount is
transferred from the Subaccount, or a partial surrender, including the partial
surrender charge, is taken from the Subaccount.

A Subaccount's accumulation unit value varies to reflect the investment
experience of the underlying Portfolio, and may increase or decrease from one
Valuation Date to the next. The accumulation unit value for each Subaccount was
arbitrarily set at $10 when the Subaccount was established. For each Valuation
Period after the date of establishment, the accumulation unit value is
determined by multiplying the value of an accumulation unit for a Subaccount for
the prior valuation period by the net investment factor for the Subaccount for
the current valuation period.

Net Investment Factor. The net investment factor is an index used to
measure the investment performance of a Subaccount from one Valuation Period to
the next. It is based on the change in net asset value of the Fund shares held
by the Subaccount, and reflects any dividend or capital gain distributions on
Fund shares and the deduction of the daily mortality and expense risk charge.

Guaranteed Account Value. On any Valuation Date, the Guaranteed Account
portion of the Account Value of a Policy is the total of all Net Premium
allocated to the Guaranteed Account, plus any amounts transferred to the
Guaranteed Account, plus interest credited on such Net Premium and amounts, less
the amount of any transfers from the Guaranteed Account, less the amount of any
partial surrenders, including the partial surrender charges, taken from the
Guaranteed Account, and less the pro rata portion of the monthly deduction
deducted from the Guaranteed Account. If there have been any Policy loans, the
Guaranteed Account Value is further adjusted to reflect the amount in the Loan
Account held in the Guaranteed Account, including transfers to and from the Loan
Account as loans are taken and repayments are made, and interest credited on the
Loan Account.

Net Account Value

The Net Account Value on a Valuation Date is the Account Value less
Outstanding Loans on that date.

Cash Surrender Value

The Cash Surrender Value on a Valuation Date is the Account Value
reduced by any surrender charge that would be assessed if the Policy were
surrendered on that date. The Cash Surrender Value is used to calculate the loan
value and to determine whether Outstanding Loans exceed the Policy limits (see
page ___). The loan value may not exceed 90% of the Net Cash Surrender Value at
the time the loan is made.

<PAGE>

Net Cash Surrender Value

The Net Cash Surrender Value on a Valuation Date is equal to the Net
Account Value reduced by any surrender charge that would be imposed if the
Policy were surrendered on that date. It is the amount received upon a full
surrender of the Policy.

LIFE INSURANCE PROCEEDS AND CHANGES IN FACE AMOUNT

Life Insurance Proceeds

As long as the Policy remains in force, We will pay the Life Insurance
Proceeds upon receipt at Our Administrative Office of satisfactory proof of the
Insured's death. We will require return of the Policy. The Life Insurance
Proceeds will be paid to the Beneficiary in a lump sum generally within seven
days after We receive due proof of death of the Insured (see "WHEN PROCEEDS ARE
PAID," page ___), or, if elected, under a payment option (see "PAYMENT OPTIONS,"
page ___). Payment of the Life Insurance Proceeds may also be affected by other
provisions of the Policy.

The Life Insurance Proceeds includes the following amounts, which We
will determine as of the date of the Insured's death:

(a) the Death Benefit Amount determined according to the Death
Benefit Qualification Option and Life Insurance Proceeds Option
selected;

(b) plus any other benefits then due from riders to the Policy;

(d) minus any overdue deductions from Account Value if the Insured
dies during a Grace Period.

We will pay interest on the Life Insurance Proceeds for the period from
the date of the Insured's death to the date of payment. We determine the
interest rate, but it will not be less than a rate of 3% per year compounded
annually.

Death Benefit Qualification Options

Section 7702 of the Code defines alternative testing procedures (the
"Death Benefit Qualification Options") for meeting the definition of life
insurance under the Code. (See "TAX TREATMENT OF THE POLICY," page ___.) Each
Policy must qualify under one of the two Death Benefit Qualification Options.
The Owner will choose a Death Benefit Qualification Option at the time of
application. Once it has been chosen to test a Policy, the Death Benefit
Qualification Option cannot be changed while the Policy is in force.

Under both Death Benefit Qualification Options, there is a minimum Life
Insurance Proceeds required at all times equal to the Account Value multiplied
by the appropriate Minimum Death Benefit Factor. The Minimum Death Benefit
Factor depends on the Death Benefit Qualification Option and the Attained Age,
sex, and smoker status of the Insured. A table of Minimum Death Benefit Factors
for the selected Death Benefit Qualification Option is located in the Policy.

<PAGE>

Cash Value Accumulation Test. Use of the Cash Value Accumulation Test
can be advantageous if an Owner intends to maximize the total amount of Premiums
paid under a Policy. An offsetting consideration, however, is that the higher
Premium permitted under this testing option will generally also require a higher
Life Insurance Proceeds and, thus, a higher total cost of insurance. The Minimum
Death Benefit Factors for the Cash Value Accumulation Test are computed based on
the 1980 Commissioners Standard Ordinary Tables and a 4% effective annual
interest rate.

Guideline Premium/Cash Value Corridor Test. The Guideline Premium/Cash
Value Corridor Test limits the amount of total Premium an Owner may pay under a
Policy. The Minimum Death Benefit Factors for this testing option are those
prescribed by the Code.

Life Insurance Proceeds Options

At the time of application, the Owner will choose one of two Life
Insurance Proceeds Options, regardless of the Death Benefit Qualification Option
selected.

Life Insurance Proceeds Option I. The Face Amount includes the Account
Value and the Death Benefit Amount will be the larger of:

(a) the Face Amount on the date of death; or

(b) the Account Value on the date of death multiplied by the
appropriate Minimum Death Benefit Factor shown in the Policy for
the Attained Age, smoker status, and sex of the Insured at the
time of death and the previously selected Death Benefit
Qualification Option.

Life Insurance Proceeds Option II. The Face Amount is in addition to
the Account Value and the Death Benefit Amount will be the larger of:

(a) the Face Amount plus the Account Value on the date of death; or

If investment performance is favorable, the amount of the Life
Insurance Proceeds may increase. However, under Life Insurance Proceeds Option
I, the Life Insurance Proceeds ordinarily will not change to reflect any
favorable investment performance for several years and may not change at all,
whereas under Life Insurance Proceeds Option II, the Life Insurance Proceeds
will vary directly with the investment performance of the Account Value. To see
how and when investment performance may begin to affect the Life Insurance
Proceeds, please see the illustrations beginning on page ___.

<PAGE>

Changes in Life Insurance Proceeds Options

You may change Your Life Insurance Proceeds Option. We may require that
You submit evidence of insurability satisfactory to Us. If You request a change
from Life Insurance Proceeds Option I to Life Insurance Proceeds Option II, We
will decrease the Face Amount by an amount equal to Your Account Value on the
date the change takes effect. However, We reserve the right to decline to make
such change if it would reduce the Face Amount below the minimum Face Amount. If
You request a change from Life Insurance Proceeds Option II to Life Insurance
Proceeds Option I, We will increase the Face Amount by an amount equal to Your
Account Value on the date the change takes effect. Such decreases and increases
in the Face Amount are made so that the Life Insurance Proceeds remains the same
on the date the change takes effect. However, if the Life Insurance Proceeds is
determined by a percentage multiple of the Account Value, there may be an
increase in the Life Insurance Proceeds.

The change will take effect at the beginning of the Policy Month that
coincides with or next follows the date We approve Your request. We reserve the
right to decline to make any change that We determine would cause the Policy to
fail to qualify as life insurance under applicable tax law as interpreted by Us.

You may request a change by completing an Application for Change
available from Our agent or by writing Us at Our Administrative Office. A copy
of Your Application for Change will be attached to the newly issued policy
information pages that We will issue for the Policy when the change is made. The
new section and the Application for Change will become a part of the Policy. We
may require You to return the Policy to Our Administrative Office to make a
Policy change.

Changes in Face Amount

At any time after the first Policy Year while the Policy is in force,
You may request a change in the Face Amount, subject to certain conditions. No
change will be permitted that would result in the Life Insurance Proceeds being
includable in gross income due to a failure to satisfy the requirements of
Section 7702 of the Code. (See "TAX CONSIDERATIONS," page ___.)

Any increase in the Face Amount must be at least $10,000, however, the
resulting Face Amount may not be in excess of twice the Face Amount on the Issue
Date, unless otherwise permitted by the Company. A written application must be
submitted to Our Administrative Office along with evidence of insurability
satisfactory to Us. The increase in Face Amount will become effective on the
Monthly Anniversary on or next following the date the increase is approved, and
the Account Value will be adjusted to the extent necessary to reflect a monthly
deduction as of the effective date based on the increase in Face Amount. You
must return the Policy so We can amend the Policy to reflect the increase. There
will be an additional monthly administrative charge, currently at a rate of $20
per Insured and guaranteed not to exceed $25 per Insured per Policy Month,
imposed on the contract for the 12 months immediately following the effective
date of such an increase. We will not allow more than one increase per Policy
Year, nor will We allow an increase in Face Amount after an Insured's 65th
birthday.

Any decrease in the Face Amount must be at least $5,000 and the Face
Amount after the decrease must be at least the minimum Face Amount at which we
would then issue the Policy. During the first five (5) Policy Years, the Face
Amount may not be decreased by more than 10 percent of the initial Face Amount
in any one Policy Year. If the Face Amount is decreased during the first 14
Policy Years or within 14 Policy Years of an increase in Face Amount, a
surrender charge may be applicable.

<PAGE>

Both increases and decreases in Face Amount may impact the surrender
charge. In addition, an increase or decrease in Face Amount may impact the
status of the Policy as a MEC. (See "TAX CONSIDERATIONS," page ___.)

Selecting and Changing the Beneficiary

The Owner selects a Beneficiary in the application. The Owner may later
change the Beneficiary in accordance with the terms of the Policy. If the
Insured dies and there is no surviving Beneficiary, the Owner's estate will be
the Beneficiary.

CASH BENEFITS

Policy Loans

You may borrow up to the loan value of Your Policy at any time after
the first Policy Year, or after the first Policy Year following any increase in
Face Amount by submitting a request to the Administrative Office. The loan value
is 90% of Your Net Cash Surrender Value. The Company may impose a minimum loan
amount. Outstanding Loans reduce the amount of the loan value available for new
Policy loans. Policy loans will be processed as of the date the request is
received at our Administrative Office. If a Policy is issued under a
corporate-owned arrangement, a loan will be assessed pro rata over all Insureds
under the Policy. Loan proceeds generally will be sent to the Owner within seven
days. In addition, loans from MECs may be treated for tax purposes as
distributions of income.

Interest. We will charge interest daily on any outstanding Policy loan
at a declared annual rate not in excess of 8.00%. The current rate, subject to
change by the Company, is 8.00%. Interest is due and payable at the end of each
Policy Year while a Policy loan is outstanding. If interest is not paid when
due, the amount of the interest is added to the loan and becomes part of the
outstanding Policy loan.

Outstanding Loans. Unrepaid Policy loans (including unpaid interest
added to the loan) plus accrued interest not yet due equals the Outstanding
Loans.

Loan Repayment; Effect if Not Repaid. You may repay all or part of Your
Outstanding Loan at any time while the Insured is living and the Policy is in
force. Loan repayments must be sent to Our Administrative Office and will be
credited as of the date received. If the Life Insurance Proceeds becomes payable
while a Policy loan is outstanding, the Outstanding Loan will be deducted in
calculating the Life Insurance Proceeds. If the Outstanding Loans exceed the Net
Cash Surrender Value on any monthly anniversary, the Policy will be in default.
We will send You, and any assignee of record, notice of the default. You will
have a 61-day Grace Period to submit a sufficient payment to avoid termination.
The notice will specify the amount that must be repaid to prevent termination.

<PAGE>

Loan Account. When a Policy loan is made, an amount equal to the loan
proceeds is withdrawn from the Account Value in the Subaccounts. This withdrawal
is made pro rata on the basis of the Account Value in each Subaccount unless You
direct a different allocation when requesting the loan. The loan amount
withdrawn is then transferred to the Loan Account in the Guaranteed Account.
Conversely, when a loan is repaid, an amount equal to the repayment will be
transferred from the Loan Account to the Subaccounts in accordance with Your
then effective Net Premium allocation percentages. Thus, a loan or loan
repayment will have no immediate effect on the Account Value, but other Policy
values, such as the Net Account Value and Net Cash Surrender Value, will be
reduced or increased immediately by the amount transferred to or from the Loan
Account.

Policy Loan Net Cost. The maximum net cost of a loan is 2.00% per year
(the difference between the rate of interest We charge on Policy loans and the
amount We credit on the equivalent amount held in the Loan Account). In
addition, We currently intend to credit 6.00% on the amount held in the Loan
Account.

Effect of Policy Loan. A Policy loan, whether or not repaid, will have
a permanent effect on the Life Insurance Proceeds and Account Value because the
investment results of the Subaccounts and current interest rates credited in the
Guaranteed Account will apply only to the non-loaned portion of the Account
Value. The longer the loan is outstanding, the greater this effect is likely to
be. Depending on the investment results of the Subaccounts or credited interest
rates for the Guaranteed Account while the Policy loan is outstanding, the
effect could be favorable or unfavorable. Also, Policy loans could, particularly
if not repaid, make it more likely than otherwise for a Policy to terminate.

Surrendering the Policy for Net Cash Surrender Value

You may surrender your Policy at any time for its Net Cash Surrender
Value by submitting a written request to Our Administrative Office. We will
require return of the Policy. A surrender charge may apply. (See "SURRENDER
CHARGES," page ___.) A surrender request will be processed as of the date Your
written request and all required documents are received and generally will be
paid within seven days. (See "WHEN PROCEEDS ARE PAID," page ___, and "PAYMENTS
FROM THE GUARANTEED ACCOUNT," page ___.) The Net Cash Surrender Value may be
taken in one sum or it may be applied to a payment option. (See "PAYMENT
OPTIONS," below.) Your Policy will terminate and cease to be in force if it is
surrendered for one sum. It cannot later be reinstated.

If a Policy is issued under a corporate-owned arrangement, the Owner
will not be permitted to surrender the Policy as to selected individual Insureds
only.

<PAGE>

Partial Surrenders

We will not allow a partial surrender during the first twelve months of
the Policy or during the first twelve Policy Months immediately following an
increase in the Face Amount of the Policy. After the first Policy Year, You may
make partial surrenders under Your Policy up to a maximum of 90% of the Net Cash
Surrender Value subject to the following conditions. You must submit a written
request to Our Administrative Office. The Net Cash Surrender Value must exceed
$500 per Insured after the partial surrender is deducted from the Account Value.
No more than two partial surrenders may be made during a Policy Year and each
partial surrender must be at least $500 per Insured. A partial surrender charge
and an administrative charge will be assessed on a partial surrender. (See
"PARTIAL SURRENDER CHARGE," page __.) This charge will be deducted from Your
Account Value along with the amount requested to be surrendered and will be
considered part of the partial surrender (together, the "partial surrender
amount"). Account Value will be reduced by the partial surrender amount.

When You request a partial surrender, You can direct how the partial
surrender amount will be deducted from Your Account Value in the Accounts. If
You provide no directions, the partial surrender amount will be deducted from
Your Account Value in the Accounts on a pro rata basis. (See "PAYMENTS FROM THE
GUARANTEED ACCOUNT," page __.) If a Policy is issued under a corporate-owned
arrangement, a partial surrender will be applied pro rata over all Insureds
under the Policy.

If Life Insurance Proceeds Option I is in effect, the Face Amount will
also be reduced by the partial surrender amount. If the Face Amount has been
increased, the partial surrender will reduce first the most recent increase, and
then the next most recent increase, if any, in reverse order, and finally the
initial Face Amount. No partial surrender may be made that would reduce the Face
Amount to less than $50,000.

Partial surrender requests will be processed as of the date your
written request is received, and generally will be paid within seven days. (See
"WHEN PROCEEDS ARE PAID," page __, and "PAYMENTS FROM THE GUARANTEED ACCOUNT,"
page __.)

Surrenders of all or part of a Policy may have tax consequences. (See
"TAX CONSIDERATIONS," page __.)

Maturity Date

The Maturity Date as to any Insured will be the Policy Anniversary
immediately following an Insured's 100th birthday. At that time, if the Insured
is still alive and the insurance remains in force, all riders attached to the
Policy will end, no further Premium will be accepted and no cost of insurance
charges will be incurred. After the Maturity Date, the amount of the Life
Insurance Proceeds will equal the Net Account Value.

Payment Options

The Policy offers a wide variety of optional ways of receiving proceeds
payable under the Policy, such as on surrender, death or maturity, other than in
a lump sum. Any agent authorized to sell this Policy can explain these options
upon request. None of these options vary with the investment performance of a
separate account because they are all forms of guaranteed benefit payments.

<PAGE>

ILLUSTRATIONS OF ACCOUNT VALUE, NET CASH SURRENDER
VALUE, LIFE INSURANCE PROCEEDS AND ACCUMULATED PREMIUM

The following tables have been prepared to show how certain values
under a Policy change with investment performance over an extended period of
time. The tables illustrate how Account Value, Net Cash Surrender Value and Life
Insurance Proceeds under a Policy covering an Insured of a given age on the
Issue Date, would vary over time if a Periodic Planned Premium was paid annually
and the return on the assets in the selected portfolios of the Funds was a gross
average annual rate of 0%, 6% or 12%. The tables also show Premium accumulated
at 5% interest.

The tables illustrate a Policy insuring a male age 35 in the non-smoker
class with the following features: (i) initial Face Amount of $200,000; (ii)
annual Planned Periodic Premium of $2,000; (iii) Cash Value Accumulation Test;
and (iv) Life Insurance Proceeds Option I.

The tables reflect the fact that the net investment return on the
assets held in the Subaccounts is lower than the gross after tax return of the
selected portfolios of the Funds. The tables assume an average annual expense
ratio of 0.81% of the average daily net assets of the portfolios of the Funds
available under the Policy. This average annual expense ratio is based on the
expense ratios of each of the portfolios of the Funds for the last fiscal year,
adjusted, as appropriate, for any material changes in expenses effective for the
current fiscal year of a portfolio of a Fund. For information on Fund expenses,
see the prospectuses for the Funds.

As their headings indicate, one table reflects the deduction of current
contractual charges and the other reflects the deduction of guaranteed
contractual charges. These charges include the monthly cost of insurance charge,
the monthly administrative charge, and the daily charge to the Separate Account
for assuming mortality and expense risks. Both tables assume a state premium tax
rate of 2.60%, reflect the fact that no charges for federal income taxes are
currently made against the Separate Account, and assume no Outstanding Loans or
charges for supplemental benefits. After deduction of portfolio expenses and the
mortality and expense risk charge, the illustrated gross annual investment rates
of return of 0%, 6% and 12% would correspond to approximate current net annual
rates of -1.56%, 4.44% and 10.44% and approximate guaranteed net annual rates of
- -1.81%, 4.19% and 10.19%.

Upon request, We will furnish a comparable illustration based upon the
proposed Insured's individual circumstances. Such illustrations may assume
different hypothetical rates of return than those illustrated in the following
tables.

<PAGE>

<TABLE>
<CAPTION>
Illustration of Policy Values
American International Life Assurance Company of New York

Male Issue Age 35 Non Smoker

$2,000 Annual Premium
$200,000 Face Amount
Death Benefit Option (Level)
Death Benefit Qualification Option (Cash Value Accumulation Test)

Using Current Cost of Insurance Rates
----------------------------------------------------------------------------------------------
Premiums 0% Hypothetical 6% Hypothetical
Accumulated Gross Investment Return Gross Investment Return
------------------------------------------------ -------------------------------------------
End of at 5.00% Policy Net Cash Policy Net Cash
Policy Interest Account Surrender Death Account Surrender Death
Year Per Year Value Value Benefit Value Value Benefit
- ----------------- ------------------ -------------- -------------- ---------------- -------------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $2,100 $1,318 $938 $200,000 $1,413 $1,033 $200,000
2 $4,305 $2,844 $2,464 $200,000 $3,126 $2,746 $200,000
3 $6,620 $4,334 $3,954 $200,000 $4,902 $4,522 $200,000
4 $9,051 $5,788 $5,408 $200,000 $6,744 $6,364 $200,000
5 $11,604 $7,205 $6,825 $200,000 $8,654 $8,274 $200,000
6 $14,284 $8,582 $8,240 $200,000 $10,631 $10,289 $200,000
7 $17,098 $9,920 $9,616 $200,000 $12,679 $12,375 $200,000
8 $20,053 $11,217 $10,951 $200,000 $14,799 $14,533 $200,000
9 $23,156 $12,473 $12,245 $200,000 $16,993 $16,765 $200,000
10 $26,414 $13,686 $13,496 $200,000 $19,264 $19,074 $200,000
11 $29,834 $14,854 $14,702 $200,000 $21,611 $21,459 $200,000
12 $33,426 $15,976 $15,862 $200,000 $24,037 $23,923 $200,000
13 $37,197 $17,050 $16,974 $200,000 $26,544 $26,468 $200,000
14 $41,157 $18,074 $18,036 $200,000 $29,135 $29,097 $200,000
15 $45,315 $19,046 $19,046 $200,000 $31,811 $31,811 $200,000
16 $49,681 $19,963 $19,963 $200,000 $34,571 $34,571 $200,000
17 $54,265 $20,817 $20,817 $200,000 $37,416 $37,416 $200,000
18 $59,078 $21,605 $21,605 $200,000 $40,345 $40,345 $200,000
19 $64,132 $22,317 $22,317 $200,000 $43,354 $43,354 $200,000
20 $69,439 $22,949 $22,949 $200,000 $46,445 $46,445 $200,000
25 $100,227 $24,675 $24,675 $200,000 $63,124 $63,124 $200,000
30 $139,522 $23,027 $23,027 $200,000 $81,752 $81,752 $200,000

</TABLE>
The above illustrations are based on the following:

(1) Assumes no policy loans or withdrawals have been made.

(2) Current values reflect current cost of insurance rates, a state premium tax
rate of 2.60%, a DAC tax charge of 1.25%, a sales load of 2.25%, an
administrative charge of $27.50 per month in policy year 1 and $7.50 per
month in all remaining policy years, a fund management fee and other
expenses of 0.81% of assets, and a mortality and expense risk charge of
0.75% of assets for all policy years.

(3) Net investment returns are calculated as the hypothetical gross investment
returns less all charges and deductions shown in the prospectus.

(4) Assumes that the premium is paid at the beginning of the policy year.
Values would be different if the premiums are paid with a different
frequency or in different amounts.

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

THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF RETURN MAY BE MORE OR
LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS INCLUDING
INVESTMENT ALLOCATIONS MADE BY AN OWNER, PREVAILING RATES AND RATES OF
INFLATION. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT FROM
THOSE SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED 0%, 6%, OR 12% OVER A PERIOD
OF YEARS BUT ALSO FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY
YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY OR THE FUND THAT THESE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD OF TIME.

================================================================================
39
<PAGE>
<TABLE>
<CAPTION>
Illustration of Policy Values
American International Life Assurance Company of New York

Male Issue Age 35 Non Smoker

$2,000 Annual Premium
$200,000 Face Amount
Death Benefit Option (Level)
Death Benefit Qualification Option (Cash Value Accumulation Test)

Using Current Cost of Insurance Rates
- --------------------------------------------------------------------------------
12% Hypothetical
Gross Investment Return
--------------------------------------------------------------
End of Policy Net Cash
Policy Account Surrender Death
Year Value Value Benefit
- ----------------- ---------------- ---------------- -----------------
<S> <C> <C> <C>
1 $1,509 $1,129 $200,000
2 $3,420 $3,040 $200,000
3 $5,517 $5,137 $200,000
4 $7,821 $7,441 $200,000
5 $10,351 $9,971 $200,000
6 $13,130 $12,788 $200,000
7 $16,181 $15,877 $200,000
8 $19,535 $19,269 $200,000
9 $23,221 $22,993 $200,000
10 $27,274 $27,084 $200,000
11 $31,731 $31,579 $200,000
12 $36,634 $36,520 $200,000
13 $42,031 $41,955 $200,000
14 $47,974 $47,936 $200,000
15 $54,520 $54,520 $200,000
16 $61,734 $61,734 $200,000
17 $69,686 $69,686 $200,000
18 $78,455 $78,455 $200,000
19 $88,130 $88,130 $200,936
20 $98,772 $98,772 $219,274
25 $169,253 $169,253 $328,350
30 $279,304 $279,304 $480,402

</TABLE>

The above illustrations are based on the following:

(1) Assumes no policy loans or withdrawals have been made.

(3) Net investment returns are calculated as the hypothetical gross investment
returns less all charges and deductions shown in the prospectus.

(4) Assumes that the premium is paid at the beginning of the policy year.
Values would be different if the premiums are paid with a different
frequency or in different amounts.

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

================================================================================
40
<PAGE>

<TABLE>
<CAPTION>
Illustration of Policy Values
American International Life Assurance Company of New York

Male Issue Age 35 Non Smoker

$2,000 Annual Premium
$200,000 Face Amount
Death Benefit Option (Level)
Death Benefit Qualification Option (Cash Value Accumulation Test)

Using Guaranteed Cost of Insurance Rates
----------------------------------------------------------------------------------------------
Premiums 0% Hypothetical 6% Hypothetical
Accumulated Gross Investment Return Gross Investment Return
------------------------------------------------ --------------------------------------------
End of at 5.00% Policy Net Cash Policy Net Cash
Policy Interest Account Surrender Death Account Surrender Death
Year Per Year Value Value Benefit Value Value Benefit
- ----------------- ------------------ -------------- -------------- ---------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $2,100 $956 $0 $200,000 $1,036 $0 $200,000
2 $4,305 $2,177 $0 $200,000 $2,407 $0 $200,000
3 $6,620 $3,354 $0 $200,000 $3,813 $0 $200,000
4 $9,051 $4,487 $487 $200,000 $5,256 $1,256 $200,000
5 $11,604 $5,575 $1,575 $200,000 $6,734 $2,734 $200,000
6 $14,284 $6,614 $3,014 $200,000 $8,245 $4,645 $200,000
7 $17,098 $7,601 $4,401 $200,000 $9,788 $6,588 $200,000
8 $20,053 $8,538 $5,738 $200,000 $11,363 $8,563 $200,000
9 $23,156 $9,421 $7,021 $200,000 $12,968 $10,568 $200,000
10 $26,414 $10,247 $8,247 $200,000 $14,602 $12,602 $200,000
11 $29,834 $11,012 $9,412 $200,000 $16,261 $14,661 $200,000
12 $33,426 $11,714 $10,514 $200,000 $17,944 $16,744 $200,000
13 $37,197 $12,351 $11,551 $200,000 $19,649 $18,849 $200,000
14 $41,157 $12,917 $12,517 $200,000 $21,371 $20,971 $200,000
15 $45,315 $13,410 $13,410 $200,000 $23,109 $23,109 $200,000
16 $49,681 $13,821 $13,821 $200,000 $24,855 $24,855 $200,000
17 $54,265 $14,140 $14,140 $200,000 $26,600 $26,600 $200,000
18 $59,078 $14,356 $14,356 $200,000 $28,334 $28,334 $200,000
19 $64,132 $14,457 $14,457 $200,000 $30,043 $30,043 $200,000
20 $69,439 $14,430 $14,430 $200,000 $31,718 $31,718 $200,000
25 $100,227 $11,941 $11,941 $200,000 $39,126 $39,126 $200,000
30 $139,522 $3,531 $3,531 $200,000 $42,987 $42,987 $200,000
</TABLE>
The above illustrations are based on the following:

(1) Assumes no policy loans or withdrawals have been made.

(2) Values reflect guaranteed cost of insurance rates, a state premium tax rate
of 2.60%, a DAC tax charge of 1.25%, a sales load of 9.00%, an
administrative charge of $35.00 per month in policy year 1 and $10.00 per
month in all remaining policy years, a fund management fee and other
expenses of 0.81% of assets, and a mortality and expense risk charge of
1.00% of assets for all policy years.

(3) Net investment returns are calculated as the hypothetical gross investment
returns less all charges and deductions shown in the prospectus.

(4) Assumes that the premium is paid at the beginning of the policy year.
Values would be different if the premiums are paid with a different
frequency or in different amounts.

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

================================================================================
41
<PAGE>
<TABLE>
<CAPTION>
Illustration of Policy Values
American International Life Assurance Company of New York

Male Issue Age 35 Non Smoker

$2,000 Annual Premium
$200,000 Face Amount
Death Benefit Option (Level)
Death Benefit Qualification Option (Cash Value Accumulation Test)

Using Guaranteed Cost of Insurance Rates
- --------------------------------------------------------------------------------
12% Hypothetical
Gross Investment Return
--------------------------------------------------------------
End of Policy Net Cash
Policy Account Surrender Death
Year Value Value Benefit
- ----------------- ---------------- ---------------- -----------------
<S> <C> <C> <C>

1 $1,117 $0 $200,000
2 $2,647 $0 $200,000
3 $4,312 $312 $200,000
4 $6,124 $2,124 $200,000
5 $8,096 $4,096 $200,000
6 $10,240 $6,640 $200,000
7 $12,572 $9,372 $200,000
8 $15,112 $12,312 $200,000
9 $17,877 $15,477 $200,000
10 $20,890 $18,890 $200,000
11 $24,172 $22,572 $200,000
12 $27,750 $26,550 $200,000
13 $31,654 $30,854 $200,000
14 $35,916 $35,516 $200,000
15 $40,571 $40,571 $200,000
16 $45,658 $45,658 $200,000
17 $51,217 $51,217 $200,000
18 $57,294 $57,294 $200,000
19 $63,941 $63,941 $200,000
20 $71,219 $71,219 $200,000
25 $119,627 $119,627 $232,076
30 $192,610 $192,610 $331,289

</TABLE>

The above illustrations are based on the following:

(1) Assumes no policy loans or withdrawals have been made.

(3) Net investment returns are calculated as the hypothetical gross investment
returns less all charges and deductions shown in the prospectus.

(4) Assumes that the premium is paid at the beginning of the policy year.
Values would be different if the premiums are paid with a different
frequency or in different amounts.

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

================================================================================
42
<PAGE>

OTHER POLICY BENEFITS AND PROVISIONS

Right to Exchange

The Policy may be exchanged for a flexible premium fixed benefit life
insurance policy on the life of the Insured, without evidence of insurability.
This exchange may be made:

(a) within 24 months after the Issue Date while the Policy is in
force;

(b) within 24 months of any increase in Face Amount of the Policy; or

(c) within 60 days of the effective date of a material change in the
investment policy of a Subaccount, or within 60 days of the
notification of such change, if later. In the event of such a
change, the Company will notify the Owner and give the Owner
information on the options available.

When an exchange is requested, the Company accomplishes the exchange by
transferring all of the Account Value to the Guaranteed Account. There is no
charge for this transfer. Once this option is exercised, the entire Account
Value must remain in the Guaranteed Account for the remaining life of the
Policy. The Face Amount in effect at the time of the exchange will remain
unchanged. The Effective Date, Issue Date and Issue Age of the Insured will
remain unchanged. The Owner and Beneficiary are the same as were recorded
immediately before the exchange.

Limits on Our Rights to Contest the Policy

Incontestability. We will not contest the Policy after it has been in
force during the Insured's lifetime for two years from the Issue Date. Any
increase in the Face Amount will be incontestable with respect to statements
made in the evidence of insurability for that increase after the increase has
been in force during the life of the Insured for two years after the effective
date of the increase.

Suicide Exclusion. If the Insured commits suicide (while sane or
insane) within two years after the Issue Date, Our liability will be limited to
the payment of a single sum. This sum will be equal to the Premiums paid, minus
any loan and accrued loan interest and minus any partial surrender and minus the
cost of any riders attached to the Policy. If the Insured commits suicide (while
sane or insane) within two years after the effective date of an increase in the
Face Amount, then Our liability as to the increase in amount will be limited to
the payment of a single sum equal to the monthly cost of insurance deductions
made for such increase plus the expense charge deducted for the increase.

Changes in the Policy or Benefits

Misstatement of Age or Sex. If an Insured's age or sex has been
misstated in the Policy, the Life Insurance Proceeds and any benefits provided
by Riders to the Policy shall be those which would be purchased at the then
current cost of insurance charge for the correct age and sex.

<PAGE>

Other Changes. At any time We may make such changes in the Policy as
are necessary to assure compliance at all times with the definition of life
insurance prescribed by the Code or to make the Policy conform with any law or
regulation issued by any government agency to which it is subject. Any such
change, however, may be accepted or rejected by the Owner.

When Proceeds Are Paid

We will ordinarily pay any Life Insurance Proceeds, loan proceeds or
partial or full surrender proceeds within seven days after receipt at Our
Administrative Office of all the documents required for such a payment. Other
than the Life Insurance Proceeds, which is determined as of the date of death,
the amount will be determined as of the date of receipt of required documents.
However, We may delay making a payment or processing a transfer request if (1)
the disposal or valuation of the Separate Account's assets is not reasonably
practicable because the New York Stock Exchange is closed for other than a
regular holiday or weekend, trading is restricted by the SEC, or the SEC
declares that an emergency exists; or (2) the SEC by order permits postponement
of payment to protect the Company's Owners. (See also "PAYMENTS FROM THE
GUARANTEED ACCOUNT," page ___.)

Reports to Owners

You will receive a confirmation within seven days of the transaction
of: the receipt of any Premium (except Premiums received before the Issue Date);
any change of allocation of Premiums; any transfer between Subaccounts; any
loan, interest repayment, or loan repayment; any partial surrender; or any
return of Premium necessary to comply with applicable maximum receipt of any
Premium payment. Confirmations will also be sent within seven days of: (1)
exercise of the Period to Examine and Cancel; (2) an exchange of the Policy; (3)
full surrender of the Policy; and (4) payment of the Life Insurance Proceeds
under the Policy.

Within 30 days after each Policy Anniversary an annual statement will
be sent to each Owner. The statement will show the current amount of Life
Insurance Proceeds payable under the Policy, the current Account Value, the
current Cash Surrender Value and current Outstanding Loans. The statement will
also show Premiums paid, all charges deducted during the Policy Year, and all
transactions. The Company will also send to Owners annual and semi-annual
reports of the Separate Account.

Assignment

The Policy may be assigned in accordance with its terms on a form
provided by Us. We will not be deemed to know of an assignment unless We receive
a copy of it at Our Administrative Office. We assume no responsibility for the
validity or sufficiency of any assignment. Any assignment or pledge of a MEC as
collateral for a loan may result in a taxable event. (See "TAX CONSIDERATIONS,"
page ___.)

Reinstatement

If the Policy has ended without value, You may reinstate Policy
benefits while the Insured is alive if You:

1. Request reinstatement of Policy benefits within three (3) years
from the end of the Grace Period;

<PAGE>

2. Provide evidence of insurability satisfactory to Us;

3. Make a payment of an amount sufficient to cover (i) the total
monthly administrative charges from the beginning of the Grace
Period to the effective date of reinstatement; (ii) total monthly
deductions for three (3) months, calculated from the effective
date of reinstatement; and (iii) the charge for applicable taxes,
the Premium charge, and any increase in surrender charges
associated with this payment. We will determine the amount of
this required payment as if no interest or investment performance
were credited to or charged against Your Account Value; and

4. Repay or reinstate any Policy loan which existed on the date the
Policy ended.

The effective date of the reinstatement of Policy benefits will be the
beginning of the Policy Month which coincides with or next follows the date We
approve Your request. From the required payment We will deduct the charge for
applicable taxes and the premium charge. The Account Value, Policy loan and
surrender charges that will apply upon reinstatement will be those that were in
effect on the date the Policy lapsed.

We will start to make monthly deductions again as of the effective date
of reinstatement. The monthly expense charge from the beginning of the Grace
Period to the effective date of reinstatement will be deducted from the Account
Value as of the effective date of reinstatement. No other charges will accrue
for this period.
TAX CONSIDERATIONS

The following description is based upon the Company's understanding of
current federal income tax law applicable to life insurance in general. The
Company cannot predict the probability that any changes in such laws will be
made. Purchasers are cautioned to seek competent tax advice regarding the
possibility of such changes.

Section 7702 of the Code defines the term "life insurance contract" for
purposes of the Code. The Company believes that the Policy to be issued will
qualify as "life insurance contracts" under Section 7702, but the Company does
not guarantee the tax status of the Policy. Purchasers bear the complete risk
that the Policy may not be treated as "life insurance" under federal income tax
laws. Purchasers should consult their own tax advisers with regard to these
risks.

Introduction

The discussion contained herein is general in nature and is not
intended as tax advice. Each person concerned should consult a competent tax
adviser. No attempt is made to consider any applicable state or other tax laws.
Moreover, the discussion herein is based upon the Company's understanding of
current federal income tax laws and the current interpretation of those laws. No
representation is made regarding the likelihood of continuation of those current
federal income tax laws or of the current interpretations by the Internal
Revenue Service.

<PAGE>

The Company

The Company is taxed as a life insurance company under the Code. For
federal income tax purposes, the Separate Account is not a separate entity from
the Company and its operations form a part of the Company.

Diversification

Section 817 (h) of the Code and the regulations prescribed under that
Section by the United States Treasury Department ("Treasury Department") impose
certain diversification standards on the investments underlying variable life
insurance contracts. Section 817(h) of the Code provides that if the investment
assets underlying a variable life insurance contract are not properly
diversified in accordance with the Treasury regulations issued under that
Section, then that contract shall be immediately disqualified from treatment as
a life insurance contract for federal income tax purposes, subject to a remedial
procedure. Permanent disqualification of the Policy as a life insurance contract
would result in imposition of federal income tax on the Policy Owner with
respect to earnings allocable to the Policy prior to the receipt of payments
under the Policy.

Generally, for purposes of determining whether the diversification
standards imposed by Section 817(h) of the Code on the underlying assets of
variable contracts have been met, "each United States government agency or
instrumentality shall be treated as a separate issuer." To the extent that any
segregated asset account with respect to a variable life insurance contract is
invested in securities issued by the U.S. Treasury, the investments made by such
accounts shall be treated as adequately diversified. The Code also contains a
safe harbor provision which provides that a segregated asset account underlying
life insurance contracts such as the Policy will meet the diversification
requirements of Section 817(h) if, as of the close of each quarter, the
underlying assets of the account meet the diversification requirements
applicable to regulated investment companies and not more than 55 percent of the
value of the assets of the account are attributable to cash and cash items
(including receivables), Government securities and securities of other regulated
investment companies.

Treasury Regulation Section 1.817-5 establishes the specific
diversification requirements applicable to the investment portfolios underlying
variable life insurance contracts such as the Policy, and provides alternatives
to the safe harbor provisions described above. Under this Regulation, an
investment portfolio will be deemed adequately diversified if: (i) no more than
55% of the value of the total assets of the portfolio is represented by any one
investment; (ii) no more than 70% of the value of the total assets of the
portfolio is represented by any two investments; (iii) no more than 80% of the
value of the total assets of the portfolio is represented by any three
investments; and (iv) no more than 90% of the value of the total assets of the
portfolio is represented by any four investments. For purposes of these
percentage tests, all securities of the same issuer are generally treated as a
single investment. The Regulation also provides a remedial procedure pursuant to
which some of the adverse consequences of a violation of the diversification
requirements may be avoided. This procedure requires, among other things, a tax
penalty payment by the issuer of the affected policies.

The Company intends that each Fund underlying the Policy will be
managed by its investment adviser in such a manner as to comply with these
diversification requirements.

<PAGE>

When Regulations under Section 817(h) of the Code were first proposed
in 1986, the Treasury Department also indicated that guidelines would be
forthcoming under which a variable life insurance Policy would not be treated as
a life insurance contract for tax purposes if the owner of the Policy had an
excessive degree of control over the investments underlying the Policy (e.g., by
being able to transfer values among Subaccounts with only limited restrictions).
The issuance of such guidelines could require the Company to impose limitations
on the rights of the Owners to control investment designations under the Policy.
It is not presently known whether any such guidelines will be issued or whether
any such guidelines would have retroactive effect.

Tax Treatment of the Policy

Section 7702 of the Code sets forth a detailed definition of a life
insurance contract for federal tax purposes. The Treasury Department is
authorized to prescribe regulations implementing Section 7702. While proposed
regulations and other interim guidance have been issued, final regulations have
not been adopted so that the extent of the official guidance as to how Section
7702 is to be applied is quite limited. If a Policy were determined not to be a
life insurance contract for purposes of Section 7702, that Policy would not
qualify for the favorable tax treatment normally provided to a life insurance
Policy.

With respect to a Policy issued on the basis of a standard rate class,
the Company believes (largely in reliance on IRS Notice 88-128 and the proposed
regulations under Section 7702, issued on July 5, 1991) that such a Policy
should meet the Section 7702 definition of a life insurance contract.

With respect to a Policy that is issued on a substandard basis (i.e., a
premium class involving higher than standard mortality risk), there is less
certainty, in particular as to how the mortality and other expense requirements
of Section 7702 are to be applied in determining whether such a Policy meets the
definition of a life insurance contract set forth in section 7702. Thus, it is
not clear that such a Policy would satisfy Section 7702, particularly if the
Owner pays the full amount of premiums permitted under the Policy.

If subsequent guidance issued under Section 7702 leads the Company to
conclude that a Policy does not (or may not) satisfy Section 7702, the Company
will take appropriate and necessary steps for the purpose of causing such Policy
to comply with Section 7702, but the Company can give no assurance that it will
be possible to achieve that result. The Company expressly reserves the right to
restrict Policy transactions if it determines such action to be necessary as
part of an attempt by the Company to qualify the Policy as life insurance
contracts under Section 7702.

The discussion set forth below assumes that each Policy will qualify as
a life insurance contract for federal income tax purposes under Section 7702.

Tax Treatment of Policy Benefits In General

The Company believes that the Policy should be treated as a life
insurance contract for federal income tax purposes. Thus, the Life Insurance
Proceeds under the Policy should be excluded from the gross income of the
Beneficiary under Section 101(a)(1) of the Code. In addition, the cash value
increases of a Policy should not be taxed until there has been a distribution
from the Policy such as a surrender, partial surrender, lapse with loan, or a
payment of benefits at a Policy's Maturity Date.

<PAGE>

Upon a complete surrender or lapse of any Policy or upon a payment of
benefits at a Policy's Maturity Date, any excess of the amount received plus the
amount of Outstanding Loan over the total investment in the Policy, will
generally be treated as ordinary income subject to tax. This treatment of
surrenders, lapses, and payments at a Policy's Maturity Date applies whether the
Policy is or is not treated as a MEC.

Investment in the Policy. The term "investment in the Policy" means (i)
the aggregate amount of any Premiums or other consideration paid for a Policy,
minus (ii) the aggregate amount received under the Policy which is excluded from
gross income of the Owner (except that the amount of any loan from, or secured
by, a Policy that is a MEC, to the extent such amount is excluded from gross
income, will be disregarded), plus (iii) the amount of any loan from, or secured
by, a Policy that is a MEC to the extent that such amount is included in the
gross income of the Owner.

Distributions From Policies Not Classified as Modified Endowment
Contracts. Distributions from a Policy that is not a MEC, are generally treated
first as a recovery of the Owner's investment in the Policy and then, but only
after the return of all such investment in the Policy, as a distribution of
taxable income. An exception to this general rule applies in the case of a
decrease in the Policy's Life Insurance Proceeds or any other change that
reduces benefits under the Policy in the first fifteen years after the Policy is
issued and that results in a cash distribution to the Owner, even where such a
distribution must be made in order for the Policy to continue complying with the
definitional limits of Section 7702. Such a cash distribution will be taxed in
whole or in part as ordinary income (to the extent of any gain in the Policy)
under rules prescribed in Section 7702.

Loans from, or secured by, a Policy that is not a MEC are not treated
as distributions. Instead, any such loan is generally treated as an Outstanding
Loan of the Owner.

Modified Endowment Contracts. Section 7702A of the Code establishes a
class of life insurance contracts designated as "Modified Endowment Contracts,"
which applies to a Policy entered into or a Policy with certain material changes
after June 20, 1988. Due to the Policy's flexibility, classification as a MEC
will depend on the individual circumstances of each Policy.

In general, a Policy will be a MEC if the accumulated Premiums paid at
any time during the first seven Policy Years exceed the sum of the net level
Premiums which would have been paid on or before such time if the Policy
provided for paid-up future benefits after the payment of seven level annual
Premiums. Whether a Policy will be a MEC after a material change generally
depends upon the relationship of the Life Insurance Proceeds and Account Value
at the time of such change and the additional premiums paid in the seven years
following the material change.

The rules relating to whether a Policy will be treated as a MEC are
extremely complex and cannot be adequately described in the limited confines of
this summary. Therefore, a current or prospective Owner should consult with a
competent adviser to determine whether a Policy transaction will cause the
Policy to be treated as a MEC. The Company will, however, monitor the Policy and
will take all steps reasonably necessary to notify an Owner on a timely basis if
his or her Policy is in jeopardy of becoming a MEC.

<PAGE>

Distributions from Policies Classified as Modified Endowment Contracts.
Any Policies that are classified as MECs will be subject to additional adverse
tax rules. Loans taken from, or secured by, such a Policy will be treated as
distributions from the Policy and will be taxed accordingly. (Past due loan
interest that is added to the loan amount will also be treated as a loan for
this purpose.) In addition, all distributions, including any loans and any
distributions upon any full or partial surrender, a lapse, or a payment of
benefits at the Maturity Date of such a Policy, will be treated as ordinary
income to the extent of the excess (if any) of the Account Value immediately
before the distribution over the Owner's investment in the Policy (described
above) at such time. These rules may also apply to a Policy during the two-year
period prior to the Policy's classification as a MEC.

Penalties on Early Distributions from Policies Classified as Modified
Endowment Contracts. A ten percent additional income tax may be imposed under
Section 72(v) of the Code on the portion of any distribution (or any loan) from
a Policy that is classified as a MEC. This additional tax applies to the full
amount that is included in the Owner's taxable income except where the
distribution from the Policy (including distributions upon surrender) or loan is
made from or secured by the Policy on or after the date that the Owner attains
age 59 1/2, is attributable to the Owner's becoming disabled, or is part of a
series of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the Owner or the joint lives
(or joint life expectancies) of the Owner and the Owner's Beneficiary. If a
Policy is not a MEC, however, then neither distributions (including
distributions upon surrender) nor loans from, or secured by, the Policy will be
subject to the 10% additional tax.

Multiple Policies. Section 72(e)(11) of the Code provides that if two
or more MECs are issued within the same calendar year to the same Owner by one
company or its affiliates, then all such contracts must be treated as one MEC
for purposes of determining the taxable portion of any loans or distributions.
Such treatment may result in adverse tax consequences including more rapid
taxation of the loans or other amounts distributed from all such contracts.
Owners should consult a tax adviser prior to purchasing more than one MEC in any
calendar year.

Interest on Policy Loans. Except in special circumstances, interest
paid on a loan under a Policy which is owned by an individual is treated as
personal interest under Section 163(h) of the Code and thus will not be tax
deductible. In addition, the deduction of interest that is incurred on any loan
under a Policy owned by a taxpayer and covering the life of any individual who
is an officer or employee of or who is financially interested in the business
carried on by that taxpayer may also be subject to certain restrictions set
forth in Section 264 of the Code. Before taking a Policy loan, an Owner should
consult a tax adviser as to the tax consequences of such a loan. (Also Section
264 of the Code may preclude business Owners from deducting premium payments.)

Policy Exchanges and Modifications. Depending on the circumstances, the
exchange of a Policy, a change in the Policy's Life Insurance Proceeds Option
(e.g., a change from Life Insurance Proceeds Option I to Life Insurance Proceeds
Option II or vice versa), a Policy loan, a partial surrender, a surrender, a
change in ownership, or an assignment of the Policy may have federal income tax
consequences. In addition, the federal, state and local transfer, and other tax
consequences of ownership or receipt of Policy proceeds will depend on the
circumstances of each Owner or Beneficiary.

Withholding. The Company is required to withhold federal income taxes
on the taxable portion of any amounts received under the Policy unless You elect
to not have any withholding or in certain other circumstances. Special
withholding rules apply to payments made to non-resident aliens.

<PAGE>

You are liable for payment of federal income taxes on the taxable
portion of any amounts received under the Policy. You may be subject to
penalties under the estimated tax rules if your withholding and estimated tax
payments are not sufficient.

Generation Skipping Transfer Tax. A transfer of the Policy or the
designation of a beneficiary who is either 37 1/2 years younger than the Owner
or a grandchild of the Owner may have Generation Skipping Transfer Tax
consequences.

Contracts Issued in Connection With Tax Qualified Pension Plans. Prior
to purchase of a Policy in connection with a qualified plan, the applicable tax
rules relating to such plans and life insurance thereunder should be examined in
consultation with a qualified tax adviser.

Possible Charge for the Company's Taxes

At the present time, the Company makes no charge for any federal, state
or local taxes (other than state premium taxes) that it incurs that may be
attributable to the Accounts or to the Policy. The Company, however, reserves
the right in the future to make a charge for any such tax or other economic
burden resulting from the application of the tax laws that it determines to be
properly attributable to the Separate Account or to the Policy.

<PAGE>

MANAGEMENT OF THE COMPANY

The directors and principal officers of the Company are listed below with their
current principal business affiliation and their principal occupations during
the past five (5) years. All officers have been affiliated with the Company
during the past five (5) years unless otherwise indicated.

Principal Business Affiliations
and Principal Occupations
Name and Address Office During Past Five Years
<S> <C> <C>

Robert John O'Connell* Chief Executive Officer, President and CEO of AIG
President and Director Domestic Life Companies

Peter Joseph Dalia Director Retired; Formerly Vice
20281 E. County Club Dr. President and Comptroller of
Apt. 2212 AIG, Inc.
Aventura, FL 33180

Marion Elizabeth Fajen Director Retired; Formerly, Vice
5608 N. Waterbury Rd. President and Comptroller of
Des Moines, IA 50312 AIG, Inc.

Cecil Calvert Gamwell, III Director Director of Life Division AIG,
80 Pine Street Inc.; Director of Seguros,
13th Floor Venezuela and Director (ALT)
New York, NY 10270 Seguros Interamericanos of
New York

Maurice Raymond Greenberg* Director Chairman of the Board,
President and Chief Executive
Officer of AIG, Inc.

Howard Earl Gunton, Jr. Senior Vice President and Senior Vice President and
One Alico Plaza Comptroller Comptroller of AIG Domestic
Wilmington, DE 19801 Life Companies

Jacob Ernest Hansen Director President of AIG Marketing,
505 Carr Road Inc.
Wilmington, DE 19803

Jack Russell Harnes Director Retired; Formerly Medical
72 Wall Street, 1st Floor Director of AIG, Inc.
New York, NY 10270

John Iniss Howell Director Director of AIG Life Insurance
Indian Rock Corporation Company; Director of Schroder
P.O. Box 2606 Capital Management
Greenwich, CT 06830

<PAGE>

Principal Business Affiliations
and Principal Occupations
Name and Address Office During Past Five Years

Jeffrey Merton Kestenbaum* Director and Senior Vice Formerly Senior Vice President
President and General Manager of AIA,
and Senior Vice President of
AIG, Japan

Edwin A. G. Manton* Director Director of AIG Life Insurance
Company

Jerome Thomas Muldowney* Senior Vice President and Senior Vice President of AIG
Director Domestic Life Companies

Win Jay Neuger* Director Senior Vice President of AIG,
Inc.; Formerly, Managing
Director of Bankers Trust Co.

Nicholas Alexander O'Kulich* Vice President, Treasurer and Vice President and Treasurer of
Director AIG, Inc.

John Robert Skar Senior Vice President, Actuary Senior Vice President, Actuary
One Alico Plaza and Director and Director of AIG Domestic
Wilmington DE 19801 Life Companies

Ernest Edward Stempel* Director and Chairman of the Director of AIG, Inc.
Board

Edmund Sze-Wing Tse* Director Senior Vice President of AIG,
Inc.

Elizabeth Margaret Tuck* Secretary Secretary and Assistant
Secretary of AIG, Inc. and
certain affiliates

David James Walsh* Director and Vice President Associate General Counsel of
AIG, Inc.; Formerly Director of
Insurance, State of Alaska

Gerald Walter Wyndorf Director and Executive Vice Executive Vice President of
80 Pine Street President AIG Domestic Life Companies
13th Floor
New York, NY 10005

Patrick Joseph Foley* Director Retired; Formerly, Vice
President and Associate General
Counsel

</TABLE>
- ------------------

* Indicates the business address of the individual, which is 70 Pine Street,
New York, New York 10270.

<PAGE>

DISTRIBUTION OF THE POLICY

Where the Policy may be lawfully sold, the Policy is sold by licensed
insurance agents who are registered representatives of broker-dealers which are
registered under the Securities Exchange Act of 1934 and are members of the
National Association of Securities Dealers, Inc.

The Policy will be distributed through the principal underwriter for
the Separate Account, AIG Equity Sales Corp. ("AIGESC"), 80 Pine Street, New
York, New York, an affiliate of the Company. AIGESC will enter into selling
agreements with other broker-dealers who offer the Policy. Commissions may be
paid to registered representatives based on Premiums paid for Policies sold.
Additional payments may be made for administrative or other services not
directly related to the sale of the Policy.

OTHER POLICIES ISSUED BY THE COMPANY

The Company may offer other insurance policies similar to those offered
herein.

STATE REGULATION

The Company is subject to the laws of New York governing insurance
companies and to regulation by the New York Insurance Department. An annual
statement in a prescribed form is filed with the Insurance Department each year
covering the operation of the Company for the preceding year and its final
condition as of the end of such year. Regulation by the Insurance Department
includes periodic examinations to determine the Company's Policy liabilities and
reserves so that the Insurance Department may certify the items are correct. The
Company's books and accounts are subject to review by the Insurance Department
at all times and a full examination of its operations is conducted periodically
by the staff of the Insurance Department pursuant to the National Association of
Insurance Commissioners. Such regulation does not, however, involve any
supervision of management or investment practices or policies. In addition, the
Company is subject to regulation under the insurance laws of other jurisdictions
in which it may operate.

LEGAL PROCEEDINGS

There are no legal proceedings to which the Separate Account or the
principal underwriter is a party. The Company is engaged in various kinds of
routine litigation which, in the opinion of the Company, are not of material
importance in relation to the total capital and surplus of the Company.

EXPERTS

The financial statements of the Company which appear in this Prospectus
have been audited by Coopers & Lybrand, LLP, independent certified public
accountants, as stated in their reports, and have been included in reliance upon
the authority of such firm as experts in accounting and auditing.

LEGAL MATTERS

Legal matters relating to the federal securities laws are being passed
upon by the firm of Jorden Burt Boros Cicchetti Berenson & Johnson, LLP of
Washington, D.C.

<PAGE>

PUBLISHED RATINGS

The Company may from time to time publish in advertisements, sales
literature and reports to Owners, the ratings and other information assigned to
it by one or more independent rating organizations such as A.M. Best Company,
Moody's, and Standard & Poor's. The purpose of the ratings is to reflect the
financial strength and/or claims-paying ability of the Company and should not be
considered as bearing on the investment performance of assets held in the
separate account. Each year the A.M. Best Company reviews the financial status
of thousands of insurers, culminating in the assignment of Best's Ratings. These
ratings reflect A.M. Best's current opinion of the relative financial strength
and operating performance of an insurance company in comparison to the norms of
the life/health insurance industry. In addition, the claims-paying ability of
the Company as measured by Standard & Poor's Insurance Ratings Services, and the
financial strength of the Company as measured by Moody's Investors Services, may
be referred to in advertisements, sales literature or in reports to Owners.
These ratings are their opinions of an operating insurance company's financial
capacity to meet the obligations of its life insurance policies and annuity
contracts in accordance with their terms. In regard to their ratings of the
Company, these ratings are explicitly based on the existence of a Support
Agreement, dated as of December 13, 1991, between the Company and its parent,
American International Group, Inc. ("AIG"), pursuant to which AIG has agreed to
cause the Company to maintain a positive net worth and to provide the Company
with funds on a timely basis sufficient to meet the Company's obligations to its
policyholders. The Support Agreement is not, however, a direct or indirect
guarantee by AIG to any person of the payment of any of the Company's
indebtedness, liabilities or other obligations (including obligations to the
Company's policyholders).

The ratings are not recommendations to purchase the Company's life
insurance or annuity products, or to hold or sell these products, and the
ratings do not comment on the suitability of such products for a particular
investor. There can be no assurance that any rating will remain in effect for
any given period of time or that any rating will not be lowered or withdrawn
entirely by a rating organization if, in such organization's judgment, future
circumstances relating to the Support Agreement, such as a lowering of AIG's
long-term debt rating, so warrant. The ratings do not reflect the investment
performance of the separate account or the degree of risk associated with an
investment in the separate account.

FINANCIAL STATEMENTS

The financial statements of the Company and the Separate Account are
included herein.

<PAGE>

Appendix A

Maximum Initial Surrender Charge Per $1,000
of Initial Specified Face Amount

Issue Age Sex Smoker Status Surrender Charge
--------- --- ------------- ----------------
<S> <C> <C> <C>
25 Male Nonsmoker $16.00
35 Male Nonsmoker 20.00
45 Male Nonsmoker 27.00
55 Male Nonsmoker 38.00
65 Male Nonsmoker 38.00
75 Male Nonsmoker 38.00
25 Male Smoker 18.00
35 Male Smoker 23.00
45 Male Smoker 33.00
55 Male Smoker 40.00
65 Male Smoker 40.00
75 Male Smoker 40.00
25 Female Nonsmoker 15.00
35 Female Nonsmoker 18.00
45 Female Nonsmoker 24.00
55 Female Nonsmoker 33.00
65 Female Nonsmoker 37.00
75 Female Nonsmoker 37.00
25 Female Smoker 16.00
35 Female Smoker 20.00
45 Female Smoker 26.00
55 Female Smoker 37.00
65 Female Smoker 37.00
75 Female Smoker 37.00

</TABLE>

<PAGE>

PART II - OTHER INFORMATION

<PAGE>

PART II - OTHER INFORMATION

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 theretofore or hereafter duly adopted pursuant to
authority conferred in that section.

REPRESENTATION

American International Life Assurance Company of New York represents
that the fees and charges deducted under the Policy 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 Company.

INDEMNIFICATION

Under its Bylaws, the Company, to the full extent permitted by New York
law shall indemnify any person who was or is a party to any proceeding (whether
brought by or in the right of the Company or otherwise) by reason of the fact
that he or she is or was a Director of the Company, or while a Director of the
Company, is or was serving at the request of the Company as a Director, Officer,
Partner, Trustee, Employee, or Agent of another foreign or domestic corporation,
partnership, joint venture, trust, other enterprise or employee benefit plan,
against judgments, penalties, fines, settlements and reasonable expenses
actually incurred by him or her in connection with such proceeding.

The Company shall extend such indemnification, as is provided to
directors above, to any person, not a director of the Company, who is or was an
officer of the Company or is or was serving at the request of the Company as a
director, officer, partner, trustee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, other enterprise or employee
benefit plan. In addition, the Board of Directors of the Company may, by
resolution, extend such further indemnification to an officer or such other
person as may to it seem fair and reasonable in view of all relevant
circumstances.

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

<PAGE>

CONTENTS OF REGISTRATION STATEMENT

This Registration Statement comprises the following papers and
documents:

The facing sheet.

The Prospectus consisting of 53 pages.

The undertaking to file reports.

Representation.

The signatures.

Written consents of the following persons:
Kenneth D. Walma
A. Hasan Qureshi
Jorden Burt Boros Cicchetti Berenson & Johnson LLP

The following exhibits:

A. Copies of all exhibits required by paragraph A of instructions for
Exhibits in Form N-8B-2, unless indicated otherwise.

1. Resolution of the Board of Directors of the Company*

2. Not Applicable

3. a. Principal Underwriter's Agreement***
b. Registered Representative's Agreement***

4. Not Applicable

5. a. Form of Group Flexible Premium Variable Life Insurance Policy
b. Form of Group Flexible Premium Variable Life Insurance
Certificate

6. a. Articles of Incorporation of the Company** b. By-Laws of the
Company**

7. Not Applicable

8. Not Applicable

9. Not Applicable

10. Form of Life Insurance Application

<PAGE>

11. Powers of Attorney****

B. Opinion and Consent of Counsel

C. Opinion and Consent of Actuary

D. Consent of Independent Certified Public Accountants*****

E. Consent of Jorden Burt Boros Cicchetti Berenson & Johnson LLP

F. Memorandum Regarding Administrative Procedures***
- --------------------

* Incorporated by reference to Registrant's Form N-8B-2.

** Incorporated by reference to Registrant's Pre-Effective Amendment No. 1 to
Form N-8B-2.

*** Incorporated by reference to Registrant's filing on Form S-6, March 28,
1995 (File No. 33-90686).

**** Incorporated by reference to Registrant's Post-Effective Amendment No. 2
filed on Form S-6, May 1, 1997 (File No. 33-90686).

***** To be filed by amendment.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has caused this Registration
Statement to be signed on its behalf, in the City of Wilmington, and State of
Delaware on this 20th day of March, 1998.

VARIABLE ACCOUNT B
(Registrant)

By: AMERICAN INTERNATIONAL LIFE
ASSURANCE COMPANY OF NEW YORK
(Sponsor)

By: /s/ Kenneth D. Walma
---------------------------------------
Kenneth D. Walma, Assistant Secretary
and Associate Counsel

ATTEST:

/s/ Robert Liguori
- ------------------------------
Robert Liguori, Vice President and General Counsel

<PAGE>

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>

/s/ Maurice R. Greenberg* Director March 20, 1998
- -------------------------------
Maurice R. Greenberg

/s/ Peter J. Dalia* Director March 20, 1998
- -------------------------------
Peter J. Dalia

/s/ Marion E. Fajen* Director March 20, 1998
- -------------------------------
Marion E. Fajen

/s/ Patrick J. Foley* Director March 20, 1998
- -------------------------------
Patrick J. Foley

/s/ C.C. Gamwell, III* Director March 20, 1998
- ------------------------------
C.C. Gamwell, III

/s/ Howard E. Gunton, Jr.* Director March 20, 1998
- ---------------------------
Howard E. Gunton, Jr.

/s/ Jacob E. Hansen* Director March 20, 1998
- ------------------------------
Jacob E. Hansen

/s/ Jack R. Harnes* Director March 20, 1998
- --------------------------------
Jack R. Harnes

/s/ John I. Howell* Director March 20, 1998
- --------------------------------
John I. Howell

/s/ Jeffrey M. Kestenbaum* Director March 20, 1998
- -------------------------
Jeffrey M. Kestenbaum

/s/ Edwin A. G. Manton* Director March 20, 1998
Edwin A. G. Manton

/s/ Jerome T. Muldowney* Director March 20, 1998
- ------------------------
Jerome T. Muldowney

/s/ Win J. Neuger* Director March 20, 1998
- -------------------------------
Win J. Neuger

/s/ Robert J. O'Connell* Director March 20, 1998
- ----------------------------
Robert J. O'Connell

<PAGE>

/s/ Nicholas A. O'Kulich* Director March 20, 1998
- -------------------------
Nicholas A. O'Kulich

/s/ John R. Skar* Director March 20, 1998
- ----------------------------
John R. Skar

/s/ Ernest E. Stempel* Director March 20, 1998
- ----------------------------
Ernest E. Stempel

/s/ David J. Walsh* Director March 20, 1998
- -----------------------------
David J. Walsh

/s/ Gerald W. Wyndorf* Director March 20, 1998
- ------------------------
Gerald W. Wyndorf

</TABLE>

*By:/s/Kenneth D. Walma
- ------------------------
Kenneth D. Walma
Attorney in Fact

<PAGE>

INDEX TO EXHIBITS

EXHIBIT

A. Form of Group Flexible Premium Variable Life Insurance Policy

B. Form of Group Flexible Premium Variable Life Insurance Certificate

C. Form of Life Insurance Application

D. Opinion and Consent of Counsel

E. Opinion and Consent of Actuary

F. Consent of Jorden Burt Boros Cicchetti Berenson & Johnson LLP

<PAGE>

EXHIBIT A

<PAGE>
[GRAPHIC AILIFE] (R) American International Life Assurance
Company of New York
80 Pine Street
New York, New York 10005
A capital stock company

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

This Policy is a contract between American International Life Assurance Company
of New York ("We", "Us" or "Our") and the Policyholder ("You" or "Your") shown
on the Policy Schedule.

Subject to the terms of this Policy and the Certificates We issue to each
Certificate Owner, We will provide the benefits described in this Policy. We do
this in return for the application of the Policyholder, and the required
individual applications for life insurance coverage on the Insured Persons and
for the payment of the premiums.

This Policy becomes effective at 12:01 A.M. Standard Time on the Policy
Effective Date at the address of the Policyholder and will continue in force, in
accordance with the applicable provisions, unless terminated in accordance with
its provisions.

This Policy is non-participating and is not entitled to share in Our surplus
earnings.

/s/ Elizabeth M. Tuck /s/ R. J. O'Connell
Secretary President

GROUP FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
Non-Participating

21GVULD997

<PAGE>

INDEX

Policy Sections Page

Policy Schedule 2
Table Of Guaranteed Maximum Cost Of Insurance Rates 3
Policy Provisions 4

21GVULD997
2

<PAGE>

POLICY SCHEDULE

POLICY NUMBER GVULD12345

POLICYHOLDER XYZ Trust

POLICY EFFECTIVE DATE September 1, 1997

ELIGIBLE PERSONS: Exempt Employees Of ABC Corporation

21GVULD997
3

<PAGE>

<TABLE>
<CAPTION>
GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATES
PER $1,000 OF NET AMOUNT AT RISK - STANDARD RATE CLASS

ATT. NONSMOKER SMOKER ATT. NONSMOKER SMOKER
AGE MALE FEMALE MALE FEMALE AGE MALE FEMALE MALE FEMALE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
15 0.11334 0.07167 0.14668 0.08000 58 0.91249 0.64374 1.71209 0.96342
16 0.12334 0.07500 0.16336 0.08417 59 1.00517 0.68630 1.85844 1.01603
17 0.13085 0.07750 0.17503 0.08834 60 1.10872 0.73637 2.02157 1.07866
18 0.13585 0.08000 0.18420 0.09250 61 1.22399 0.79813 2.20568 1.15717
19 0.13918 0.08250 0.19003 0.09500 62 1.35683 0.87493 2.41330 1.25824
20 0.14001 0.08417 0.19337 0.09750 63 1.50726 0.96927 2.64531 1.38107
21 0.13835 0.08584 0.19337 0.09917 64 1.67446 1.07532 2.89921 1.51813
22 0.13585 0.08667 0.19003 0.10167 65 1.85761 1.18974 3.16834 1.66276
23 0.13251 0.08834 0.18670 0.10417 66 2.05588 1.30837 3.45019 1.80993
24 0.12918 0.09000 0.18169 0.10667 67 2.26846 1.42954 3.74228 1.95213
25 0.12501 0.09167 0.17586 0.10917 68 2.49956 1.55491 4.04882 2.09605
26 0.12251 0.09417 0.17252 0.11334 69 2.75590 1.69453 4.38161 2.25256
27 0.12084 0.09584 0.17086 0.11668 70 3.04591 1.85844 4.74911 2.43759
28 0.12001 0.09834 0.17086 0.12084 71 3.37720 2.05839 5.16234 2.67212
29 0.12001 0.10167 0.17336 0.12584 72 3.75991 2.30362 5.62985 2.95956
30 0.12084 0.10417 0.17753 0.13168 73 4.19334 2.59756 6.14840 3.30169
31 0.12334 0.10751 0.18336 0.13668 74 4.67004 2.93609 6.71732 3.69191
32 0.12668 0.11084 0.19086 0.14252 75 5.18002 3.31428 7.32577 4.11855
33 0.13168 0.11501 0.20087 0.15002 76 5.71918 3.72381 7.94851 4.57247
34 0.13751 0.12001 0.21254 0.15835 77 6.28340 4.16309 8.57456 5.04701
35 0.14418 0.12584 0.22671 0.16752 78 6.87612 4.63892 9.20818 5.54895
36 0.15168 0.13418 0.24339 0.18169 79 7.51606 5.16655 9.87149 6.09610
37 0.16169 0.14418 0.26423 0.19837 80 8.22374 5.76723 10.58673 6.70972
38 0.17252 0.15502 0.28758 0.21754 81 9.01809 6.45895 11.37459 7.40695
39 0.18420 0.16669 0.31426 0.23839 82 9.91568 7.25728 12.24905 8.20087
40 0.19837 0.18086 0.34511 0.26340 83 10.91280 8.15936 13.19603 9.11907
41 0.21337 0.19587 0.37847 0.29008 84 11.99039 9.15556 14.18421 10.11631
42 0.22921 0.21087 0.41517 0.31676 85 13.12417 10.23536 15.18033 11.17772
43 0.24672 0.22588 0.45520 0.34345 86 14.29993 11.39164 16.16033 12.29516
44 0.26590 0.24089 0.49941 0.37013 87 15.49991 12.62319 17.16810 13.45787
45 0.28758 0.25756 0.54613 0.39849 88 16.71909 13.93141 18.22020 14.67215
46 0.31092 0.27507 0.5945 0.42768 89 17.97489 15.32721 19.26842 15.93751
47 0.33594 0.29425 0.64708 0.45770 90 19.28573 16.82248 20.32834 17.34402
48 0.36346 0.31426 0.70382 0.49024 91 20.68242 18.45266 21.43307 18.86254
49 0.39348 0.33678 0.76558 0.52610 92 22.21790 20.28062 22.71710 20.55222
50 0.42768 0.36179 0.83402 0.56448 93 24.04369 22.43825 24.36888 22.54367
51 0.46688 0.38931 0.91166 0.60536 94 26.50346 25.22305 26.62992 25.22305
52 0.51192 0.42101 0.99933 0.65209 95 30.20739 29.24955 30.20739 29.24955
53 0.56365 0.45604 1.09870 0.70382 96 36.35803 35.72205 36.35802 35.72205
54 0.62121 0.49190 1.20728 0.75640 97 47.21179 46.86829 47.21179 46.86829
55 0.68546 0.53028 1.32341 0.81065 98 66.20701 66.09429 66.20701 66.09429
56 0.75557 0.56865 1.44625 0.86407 99 83.33333 83.33333 83.33333 83.33333
57 0.82985 0.60620 1.57581 0.91416

</TABLE>

21GVULD997
4

<PAGE>

POLICY PROVISIONS

Eligible Persons. Persons eligible to become Insured Persons under this Policy
are those described as Eligible Persons on the Policy Schedule.

Certificates. We will issue a Certificate to each Certificate Owner describing
each Insured Person's life insurance coverage under this Policy. The Certificate
will describe the benefits of this Policy, to whom the benefits will be paid,
and the limitations and conditions that apply.

A Certificate may be modified by rider or endorsement issued by Us to be
attached to the Certificate. The rider or endorsement will set forth the
modifications to the Certificate which affect the Insured Person.

Premiums. All premiums are payable in advance to Us. The planned premium for
each Insured Person is shown on that Insured Person's Certificate Information
Page.

Required Data. The Policyholder must give Us all data that We need to administer
this Policy.

Examination Of Records. We have the right to examine all records of the
Policyholder that pertain to the life insurance provided by this Policy.

Continuation Of This Policy. This Policy will continue in force, subject to the
Policy Termination provision.

Entire Contract. The entire contract ("Policy") consists of this Policy, the
Certificates, the Policyholder's application, each Insured Person's application
for life insurance coverage under this Policy, and any attached riders,
endorsements or amendments.

We rely on the Policyholder's application to issue this Policy and the
individual applications, if any, to issue certificates providing life insurance
coverage on each Insured Person. Statements made by the Policyholder or any
Insured Person or Certificate Owner are deemed to be representations and not
warranties. No such statement will be used to contest this Policy, a
Certificate, or a claim, unless a copy of the instrument is furnished to the
person making the statement or to his/her beneficiary.

Changing This Policy. This Policy may only be changed, in writing, by one of Our
executive officers. No other person, including an agent, has any authority to
change or reinstate this Policy or extend the time for paying a premium.

Conformity With State Statutes. Any provision of this Policy that, on the Policy
Effective Date, conflicts with state laws of the governing jurisdiction is
changed to meet the minimum requirements of those laws.

Policy Termination. This Policy may only be terminated with respect to the
issuance of new certificates. Either We or the Policyholder may terminate this
Policy upon giving at least 31 days written notice to the other. We will not
terminate this Policy prior to the end of the first year following the Policy
Effective Date.

Clerical Error. Clerical error will not void any Certificate issued under this
Policy which is otherwise validly in force, nor will it keep in force any
Certificate that otherwise would end.

Certificate Provisions Made Part Of This Policy. The remainder of this Policy
consists of provisions that appear in the Certificates, riders and endorsements.
A copy of the Certificates, riders and endorsements is added to and made a part
of this Policy.

21GVULD997
5

<PAGE>

[GRAPHIC AILIFE]
American International Life Assurance Company of New York
80 Pine Street
New York, New York 10005

GROUP FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
Non-Participating

21GVULD997

<PAGE>

EXHIBIT B
<PAGE>
[GRAPHIC AILIFE] (R) American International Life Assurance
Company of New York
80 Pine Street
New York, New York 10005
A capital stock company

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

Group Flexible Premium Variable Life Insurance Certificate

American International Life Assurance Company of New York, having issued a Group
Policy to the Group Policyholder shown in the Certificate Information section,
agrees to pay the Life Insurance Proceeds of this Certificate and to provide its
other benefits and rights in accordance with its provisions.

This is a flexible premium variable life insurance Certificate. You can, within
limits:

o increase or decrease the Face Amount;
o pay Premium at any time and in any amount;
o change the Life Insurance Proceeds Option;
o change the allocation of Net Premiums among Your investment options; and
o transfer amounts among Your investment options.

All of these rights and benefits are subject to the terms and conditions of this
Certificate. All requests for Certificate changes are subject to Our approval
and may require evidence of insurability.

We will put Your Net Premiums paid prior to the Allocation Date into the Money
Market Subaccount. On the Allocation Date all such Premiums will then be
allocated in accordance with directions contained in Your Certificate
application.

The portion of Your Certificate Account Value that is in a Subaccount will vary
up or down depending on the unit value of such Subaccount, which in turn depends
on the investment performance of the corresponding portfolio of a designated
investment company. There are no minimum guarantees as to such portion of Your
Certificate Account Value.

The portion of Your Certificate Account Value that is in Our Guaranteed Account
will accumulate, after deductions, at rates of interest We determine. Such rates
will not be less than 4% per year, compounded annually.

The Death Benefit Amount may be variable or fixed as described in the Benefits
We Pay section on page 7 of this Certificate.

Please Read This Certificate With Care. A Table Of Contents and a Certificate
summary may both be found on page 2. This Certificate does not participate in
the surplus of the Company.

Right To Examine This Certificate. You may examine this Certificate and, if for
any reason You are not satisfied with it, You may cancel it by returning this
Certificate to Our Administrative Office or to the Agent who sold it no later
than the later of (a) 10 days after You receive it; or (b) 45 days after the
application was signed. If You do this, We will refund the Premiums that were
paid on this Certificate.

/s/ Elizabeth M. Tuck /s/ R. J. O'Connell
Secretary President

26GVULD997

<PAGE>

CONTENTS

Certificate Summary 2
Certificate Information 3
Table Of Expense Charges 3a
Table Of Maximum Surrender Charges 3b
Table Of Guaranteed Maximum Cost Of Insurance Rates 3c
Table Of Minimum Death Benefit Factors 3d
Definitions 4
Certificate Owner And Beneficiary Provisions 6
The Benefits We Pay 7
Changing The Face Amount Or The Life Insurance Proceeds Option 8
The Premiums You Pay 9
Your Certificate Account Value And How It Works 10
Your Investment Options 11
Your Certificate Account Value 12
The Cash Surrender Value Of This Certificate 13
How A Loan Can Be Made 15
Our Separate Account 16
Our Annual Report To You 16
How Benefits Are Paid 17
Other Important Information 17
Exchange Option 19
Dollar Cost Averaging 19

Copies of the application for this Certificate and any additional benefit riders
are at the back of this Certificate.

CERTIFICATE SUMMARY

The Premiums You pay into this Flexible Premium Variable Life Insurance
Certificate, after deductions are made in accordance with the Table Of Expense
Charges in the Certificate Information section, are put into Your Certificate
Account Value. Amounts in Your Certificate Account Value are allocated at Your
direction to one or more Subaccounts and to Our Guaranteed Account.

The Subaccounts invest in shares of registered investment companies whose values
are subject to market fluctuations and investment risk. There is no guarantee of
principal or investment experience.

The Guaranteed Account earns interest at rates We declare in advance. The rates
are guaranteed not to be less than 4% per year, compounded annually. The
principal, after deductions, is also guaranteed.

If Life Insurance Proceeds Option I is in effect, the Death Benefit Amount is
the Face Amount. Such amount is fixed except when it is a percentage of Your
Certificate Account Value. If Life Insurance Proceeds Option II is in effect,
the Death Benefit Amount is the Face Amount plus Your Certificate Account Value.
The Death Benefit Amount under Life Insurance Proceeds Option II is variable.

We make monthly deductions from Your Certificate Account Value to cover the cost
of the benefits provided by this Certificate. If You give up this Certificate
for its Net Cash Surrender Value, make a Partial Surrender, reduce the Face
Amount, or if this Certificate ends without value at the end of a Grace Period,
We may deduct a surrender charge from Your Certificate Account Value.

The planned premium may not be sufficient to continue the Certificate and life
insurance coverage to the Maturity Date. The period for which the Certificate
and coverage will continue in force will depend on: (1) the timing, frequency,
and amount of premium payments; (2) changes in the Face Amount and the Life
Insurance Proceeds option; (3) the interest rates credited to Our Guaranteed
Account, and the investment performance of the Subaccounts; (4) the level of the
monthly cost of insurance deductions from the Certificate Account Value for this
Certificate, and for any benefits provided by riders to this Certificate; and
(5) any loan or partial surrender activity.

This is only a summary of what this Certificate provides. You should read the
entire Certificate carefully. Its terms govern Your rights and Our obligations.

26GVULD997 2

<PAGE>

CERTIFICATE INFORMATION

INSURED PERSON [JOHN DOE] AGE [35 MALE] [NONSMOKER]

OWNER [JOHN DOE]

FACE AMOUNT [$100,000]

DEATH BENEFIT
QUALIFICATION OPTION CASH VALUE ACCUMULATION TEST

LIFE INSURANCE
PROCEEDS OPTION OPTION I, LEVEL

CERTIFICATE NUMBER [XX XXX XXX]

BENEFICIARY AS STATED IN THE CERTIFICATE APPLICATION,
UNLESS CHANGED AS PROVIDED IN THIS CERTIFICATE

CERTIFICATE DATE [JANUARY 1, 1998]

ISSUE DATE [JANUARY 1, 1998]

MATURITY DATE [JANUARY 1, 2063]

INSURED PERSON'S
STATE OF RESIDENCE [SPECIMEN]

SEPARATE ACCOUNT [VARIABLE ACCOUNT II]

PARTIAL SURRENDER MINIMUM PARTIAL SURRENDER IS $500

CERTIFICATE LOAN MINIMUM LOAN IS $500

LOAN INTEREST RATE 8% (PAYABLE IN ARREARS)

TRANSFER MINIMUM TRANSFER AMOUNT IS $250

GROUP POLICYHOLDER XYZ TRUST

GROUP POLICY NUMBER GVULD12345

AN INITIAL PREMIUM OF [$800.00] IS DUE ON OR BEFORE DELIVERY OF THE CERTIFICATE.

[THE PLANNED PERIODIC PREMIUM OF [$800.00] IS PAYABLE [QUARTERLY]]. THE MINIMUM
PREMIUM WHICH WE WILL ACCEPT AT ANY TIME IS [$50].

THE LOANED PORTION OF YOUR CERTIFICATE ACCOUNT VALUE WILL BE CREDITED WITH
INTEREST AT AN ANNUAL RATE NOT LESS THAN 6%.

ANY ADDITIONAL BENEFIT RIDERS ARE LISTED BELOW.

THIS CERTIFICATE MAY END BEFORE THE MATURITY DATE IF EITHER (1) NO PREMIUMS ARE
PAID AFTER THE INITIAL PREMIUM OR (2) SUBSEQUENT PREMIUMS ARE NOT SUFFICIENT TO
CONTINUE THIS CERTIFICATE IN FORCE UNTIL THE MATURITY DATE. THE PLANNED PREMIUM
YOU HAVE SELECTED AND WHICH IS SHOWN ABOVE, MAY NOT PROVIDE COVERAGE TO THE
MATURITY DATE EVEN IF IT IS PAID AS SCHEDULED. EVEN IF COVERAGE IS PROVIDED TO
THE MATURITY DATE, THERE MAY BE LITTLE OR NO CASH VALUE AT THAT TIME.

26GVULD997 3

<PAGE>

CERTIFICATE INFORMATION (CONTINUED)

TABLE OF EXPENSE CHARGES

DEDUCTIONS FROM PREMIUMS:

CHARGE FOR APPLICABLE TAXES:

[2.00% OF EACH PREMIUM PAYMENT.] THIS AMOUNT IS SUBTRACTED FROM EACH
PREMIUM PAYMENT. WE RESERVE THE RIGHT TO CHANGE THIS PERCENTAGE TO
CONFORM TO CHANGES IN THE LAW OR IF THE OWNER CHANGES PLACE OF
RESIDENCE.

PREMIUM CHARGE:

[5.00% OF EACH PREMIUM.] WE RESERVE THE RIGHT TO CHANGE THIS CHARGE BUT
IT WILL NEVER BE MORE THAN 9.00%.

DEDUCTIONS FROM YOUR CERTIFICATE ACCOUNT VALUE:

ADDITIONAL FIRST YEAR ADMINISTRATIVE CHARGE:

[$20.00] IS DEDUCTED AT THE BEGINNING OF EACH CERTIFICATE MONTH DURING
THE FIRST CERTIFICATE YEAR. WE RESERVE THE RIGHT TO CHANGE THIS CHARGE
BUT IT WILL NEVER BE MORE THAN $25.00 A MONTH.

ADMINISTRATIVE CHARGE:

[$7.50] IS DEDUCTED AT THE BEGINNING OF EACH CERTIFICATE MONTH DURING
EACH CERTIFICATEYEAR. WE RESERVE THE RIGHT TO CHANGE THIS CHARGE BUT
IT WILL NEVER BE MORE THAN $10.00 A MONTH. CHANGES WILL BE AS
DESCRIBED IN THE CHANGES IN CERTIFICATE COST FACTORS PROVISION.

PARTIAL SURRENDER:

[$25.00] IS DEDUCTED WHENEVER THERE IS A PARTIAL SURRENDER. THERE ALSO
MAY BE A PARTIAL SURRENDER CHARGE AS DESCRIBED IN THE PARTIAL
SURRENDER PROVISION.

INCREASES IN FACE AMOUNT THAT YOU ASK FOR:

[$20.00] A MONTH IS DEDUCTED FOR THE 12 MONTHS IMMEDIATELY FOLLOWING
THE EFFECTIVE DATE OF THE INCREASE. WE RESERVE THE RIGHT TO CHANGE
THIS CHARGE BUT IT WILL NEVER BE MORE THAN $25.00 A MONTH.

TRANSFERS:

WE RESERVE THE RIGHT TO DEDUCT UP TO $25.00 FOR EACH TRANSFER OF
AMOUNTS AMONG YOUR INVESTMENT OPTIONS. HOWEVER WE WILL NOT MAKE A
CHARGE FOR THE FIRST 12 TRANSFERS IN ANY CERTIFICATE YEAR.

DEDUCTIONS FROM THE SEPARATE ACCOUNT(S):

A MORTALITY AND EXPENSE RISK CHARGE OF NOT MORE THAN THE EFFECTIVE RATE
OF 1.00% ANNUALLY ASSESSED AGAINST THE VALUE OF THE INVESTMENT OPTIONS.

26GVULD997 3a

<PAGE>

CERTIFICATE INFORMATION (CONTINUED)

TABLE OF MAXIMUM SURRENDER CHARGES FOR THE INITIAL FACE AMOUNT

POLICY SURRENDER
YEAR CHARGE
<S> <C>
1 $2,000.00
2 2,000.00
3 2,000.00
4 2,000.00
5 2,000.00
6 1,800.00
7 1,600.00
8 1,400.00
9 1,200.00
10 1,000.00
11 800.00
12 600.00
13 400.00
14 200.00
15 0.00

</TABLE>

A SURRENDER CHARGE WILL BE SUBTRACTED FROM YOUR CERTIFICATE ACCOUNT VALUE IF
THIS CERTIFICATE IS SURRENDERED FOR ITS NET CASH SURRENDER VALUE OR IF THIS
CERTIFICATE TERMINATES WITHIN THE FIRST FOURTEEN CERTIFICATE YEARS. A PARTIAL
SURRENDER CHARGE WILL ALSO BE SUBTRACTED FROM YOUR CERTIFICATE ACCOUNT VALUE IF
YOU MAKE A PARTIAL SURRENDER OF THIS CERTIFICATE.

THIS TABLE ASSUMES NO FACE AMOUNT INCREASES.

IF THE FACE AMOUNT IS REDUCED WITHIN THE FIRST FOURTEEN CERTIFICATE YEARS, A PRO
RATA SHARE OF THE APPLICABLE SURRENDER CHARGE AT THAT TIME MAY BE DEDUCTED FROM
YOUR CERTIFICATE ACCOUNT VALUE.

RIGHT TO CHANGE CERTIFICATE COST FACTORS
ADDITIONAL AMOUNTS NOT GUARANTEED

SUBJECT TO MINIMUM GUARANTEED INTEREST RATES, MAXIMUM EXPENSE CHARGES AND
GUARANTEED MAXIMUM COST OF INSURANCE RATES, WE HAVE THE RIGHT TO CHANGE: (1) THE
RATE OF INTEREST CREDITED TO THE AMOUNT YOU HAVE IN OUR GUARANTEED ACCOUNT; (2)
THE MONTHLY COST OF INSURANCE RATE AND (3) THE EXPENSE CHARGES DEDUCTED UNDER
THE CERTIFICATE, WHICH MAY REQUIRE MORE PREMIUM TO BE PAID THAN WAS ILLUSTRATED,
OR MAY RESULT IN CERTIFICATE VALUES BEING LESS THAN THOSE ILLUSTRATED.

26GVULD997 3b

<PAGE>

<TABLE>
<CAPTION>
CERTIFICATE INFORMATION (CONTINUED)

GUARANTEED MAXIMUM COST OF INSURANCE RATES PER $1,000
OF NET AMOUNT AT RISK - MALE NONSMOKER RATE CLASS

ATTAINED MONTHLY ATTAINED MONTHLY
AGE RATE AGE RATE

<S> <C> <C> <C>
35 0.14418 68 2.49956
36 0.15168 69 2.75590
37 0.16169 70 3.04591
38 0.17252 71 3.37720
39 0.18420 72 3.75991
40 0.19837 73 4.19334
41 0.21337 74 4.67004
42 0.22921 75 5.18002
43 0.24672 76 5.71918
44 0.26590 77 6.28340
45 0.28758 78 6.87612
46 0.31092 79 7.51606
47 0.33594 80 8.22374
48 0.36346 81 9.01809
49 0.39348 82 9.91568
50 0.42768 83 10.91280
51 0.46688 84 11.99039
52 0.51192 85 13.12417
53 0.56365 86 14.29993
54 0.62121 87 15.49991
55 0.68546 88 16.71909
56 0.75557 89 17.97489
57 0.82985 90 19.28573
58 0.91249 91 20.68242
59 1.00517 92 22.21790
60 1.10872 93 24.04369
61 1.22399 94 26.50346
62 1.35683 95 30.20739
63 1.50726 96 36.35803
64 1.67446 97 47.21179
65 1.85761 98 66.20701
66 2.05588 99 83.33333
67 2.26846

</TABLE>

26GVULD997 3c

<PAGE>

CERTIFICATE INFORMATION (CONTINUED)

MINIMUM DEATH BENEFIT FACTORS

MALE NONSMOKER RATE CLASS

CASH VALUE ACCUMULATION TEST

Attained Percent of Attained Percent of
Age Account Value Age Account Value
<S> <C> <C> <C>

35 431 68 160
36 417 69 157
37 403 70 153
38 389 71 150
39 377 72 147
40 364 73 144
41 352 74 141
42 341 75 139
43 330 76 137
44 319 77 134
45 309 78 132
46 299 79 130
47 290 80 128
48 281 81 127
49 272 82 125
50 263 83 123
51 255 84 122
52 248 85 121
53 240 86 119
54 233 87 118
55 226 88 117
56 220 89 116
57 213 90 115
58 207 91 114
59 201 92 113
60 196 93 112
61 191 94 111
62 186 95 110
63 181 96 108
64 176 97 107
65 172 98 106
66 168 99 104
67 164

</TABLE>

26GVULD997 3d

<PAGE>

DEFINITIONS

Administrative Office. 80 Pine Street, New York, NY 10005.

Age. The Insured Person's age last birthday on the Certificate Date.

Allocation Date. The first business day following the completion of the Right To
Examine This Certificate period.

Attained Age. The Insured Person's age on the Certificate Date plus the number
of complete certificate years since the Certificate Date.

Beneficiary. The person(s) who is entitled to the Life Insurance Proceeds of
this Certificate.

Cash Surrender Value. Certificate Account Value less any applicable surrender
charge that would be deducted upon surrender.

Certificate. The document issued to an Owner which evidences insurance coverage
on the life of an Insured Person.

Certificate Account Value. The total of the amounts in the Separate Account or
Subaccounts and in Our General Account which are credited to a Certificate.

Certificate Anniversary. An anniversary of the Certificate Date.

Certificate Date. The first date as of which We have received the initial
Premium and an application in good order. If a Certificate is issued, insurance
is effective as of the Certificate Date.

Certificate Loan Account. The portion of the Certificate Account Value held in
the Guaranteed Account as collateral for Certificate loans.

Certificate Month. The month commencing with the Certificate Date and ending on
the day before the first Monthly Anniversary, or any following month commencing
with a Monthly Anniversary and ending on the day before the next Monthly
Anniversary.

Certificate Year. The year commencing with the Certificate Date and ending on
the day before the first Certificate Anniversary, or any following year
commencing with a Certificate Anniversary and ending on the day before the next
Certificate Anniversary.

Company, We, Our, Us. American International Life Assurance Company of New York.

Face Amount. The amount of insurance You have specified and from which the Death
Benefit Amount will be determined. The Face Amount on the Certificate Date is
shown in the Certificate Information section. The Face Amount may be changed as
provided in the Changing The Face Amount Or Life Insurance Proceeds Option
section.

Grace Period. The period of time following a Monthly Anniversary during which
this Certificate will continue in force while the Net Cash Surrender Value is
not sufficient to cover the total monthly deduction then due.

Guaranteed Account. An account within the general account which consists of all
of Our assets other than the assets of the Separate Account and any of Our other
separate accounts.

Insured Person. The person named in the Certificate Information section whose
life is insured under the provisions of this Certificate.

Issue Date. The date the Certificate is issued. It may be a later date than the
Certificate Date if the initial Premium is received at Our Administrative Office
and invested before underwriting has been completed. Once issued, Certificate
coverage is retroactive to the Certificate Date. The Issue Date is used to
measure contestability periods.

26GVULD997 4

<PAGE>

DEFINITIONS (CONTINUED)

Life Insurance Proceeds. The amount payable to the Beneficiary if the Insured
Person dies while the Certificate is in force.

Maturity Date. The Certificate Anniversary when the Insured Person reaches
Attained Age 100.

Monthly Anniversary. The same day as the Certificate Date for each succeeding
month, except that, for those months not having such a day, the last day of such
months.

Net Cash Surrender Value. The Cash Surrender Value less any Outstanding Loan.

Net Premium. A Premium less any expense charges deducted from the Premium.

Outstanding Loan. The total amount of Certificate loans including both principal
and accrued interest.

Owner, You, Your. The person who purchased this Certificate as shown in the
application, unless later changed. The Owner may be someone other than the
Insured Person.

Planned Periodic Premium. The amount of Premium You have selected to pay at the
frequency shown in the Certificate Information section.

Premium. The total consideration paid by You in exchange for Our obligations
under this Certificate.

Separate Account. Variable Account B, a separate investment account of American
International Life Assurance Company of New York.

Subaccount. A division of the Separate Account established to invest in a
particular fund and available for investment under the Certificate.

Valuation Date. Each day the New York Stock Exchange is open for business.

Valuation Period. A period commencing with the close of business on the New York
Stock Exchange on any particular day and ending at the close of business on the
New York Stock Exchange for the next succeeding Valuation Date.

26GVULD997 5

<PAGE>

CERTIFICATE OWNER AND BENEFICIARY PROVISIONS

Owner. The Owner of this Certificate is the Insured Person unless otherwise
stated in the application, or later changed.

As the Owner, You are entitled to exercise all the rights of this Certificate
while the Insured Person is living. To exercise a right, You do not need the
consent of anyone who has only a conditional or future ownership interest in
this Certificate.

Beneficiary. The Beneficiary is as stated in the application, unless later
changed. The Beneficiary is entitled to the Life Insurance Proceeds of this
Certificate. One or more beneficiaries for the Life Insurance Proceeds can be
named in the application. If more than one Beneficiary is named, they can be
classed as primary or contingent. If two or more persons are named in a class,
their shares in the benefit can be stated. The stated shares in the Life
Insurance Proceeds will be paid to any primary beneficiaries who survive the
Insured Person. If no primary beneficiaries survive, payment will be made to any
surviving contingent beneficiaries. Beneficiaries who survive in the same class
will share the Life Insurance Proceeds equally, unless You have made another
arrangement with Us.

If there is no designated Beneficiary living at the death of the Insured Person,
We will pay the Life Insurance Proceeds to the Owner, if living, otherwise to
the Owner's estate.

Changing The Owner Or Beneficiary. While the Insured Person is living, You may
change the Owner or Beneficiary by written notice in a form satisfactory to Us.
(You can get such a form from Our agent or by writing to Us at Our
Administrative Office.) The change will take effect on the date You sign the
notice. But, it will not apply to any payment We make or other action We take
before We receive the notice.

Assignment. You may assign this Certificate, if We agree. In any event, We will
not be bound by an assignment unless We have received it in writing at Our
Administrative Office. Your rights and those of any other person referred to in
this Certificate will be subject to the assignment. We assume no responsibility
for the validity of an assignment. An absolute assignment will be considered as
a change of ownership to the assignee.

26GVULD997 6
<PAGE>

THE BENEFITS WE PAY

Determination of Death Benefit Amount: You have chosen in the application one of
the two Death Benefit Qualification Methods available under the federal tax law;
and one of the two Life Insurance Proceeds Options. The two selections are shown
in the Certificate Information section. Prior to the Maturity Date, the Death
Benefit Amount will be determined based on those selections in the following
manner:

Life Insurance Proceeds Option I. The Face Amount includes the Account Value and
the Death Benefit Amount will be the larger of:

o the Face Amount on the date of death; or
o the Account Value on the date of death times the appropriate Minimum Death
Benefit Factor for the Attained Age, smoker status and sex of the Insured
Person at the time of death shown in the Table Of Minimum Death Benefit
Factors in the Certificate Information section.

Life Insurance Proceeds Option II. The Face Amount of Insurance is in addition
to the Account Value and the Death Benefit Amount will be the larger of:

o the Face Amount plus the Account Value on the date of death; or
o the Account Value on the date of death times the appropriate Minimum Death
Benefit Factor for the Attained Age, smoker status and sex of the Insured
Person at the time of death shown in the Table Of Minimum Death Benefit
Factors in the Certificate Information section.

Upon the Maturity Date, all riders attached to this Certificate will end, no
further premium will be accepted, and no further Insurance Charges will be
incurred. The Death Benefit Amount will then be equal to the Certificate Account
Value.

The determination of the Death Benefit Amount may be changed if the Internal
Revenue Service prescribes a different basis to ensure continued compliance with
the federal tax law.

Life Insurance Proceeds. We will pay the Life Insurance Proceeds of this
Certificate to the Beneficiary when We receive at Our Administrative Office (1)
proof satisfactory to Us that the Insured Person died while this Certificate was
in force; and (2) all other requirements We deem necessary before such payment
may be made. The Life Insurance Proceeds includes the following amounts, which
We will determine as of the date of the Insured Person's death:

o the Death Benefit Amount described above;
o plus any other benefits then due from riders to this Certificate;
o minus any Outstanding Loan and accrued loan interest;
o minus any overdue deductions from Your Certificate Account
Value if the Insured Person dies during a Grace Period.

We will add interest to the resulting amount for the period from the date of
death to the date of payment. We will compute the interest at a rate We
determine, but not less than the rate required by any applicable law. Payment of
the Life Insurance Proceeds may also be affected by other provisions of this
Certificate. See the Other Important Information Section, which includes
provisions regarding Our right to contest the Certificate, the suicide
exclusion, and what happens if age or sex has been misstated. Any exclusions or
limitations are listed in the Certificate Information section.

26GVULD997 7

<PAGE>

CHANGING THE FACE AMOUNT OR THE LIFE INSURANCE PROCEEDS OPTION

At any time after the first Certificate Year while this Certificate is in force,
You may change the Life Insurance Proceeds Option or the Face Amount by written
request to Us at Our Administrative Office. The Death Benefit Qualification
Method may not be changed. Any requested change is subject to Our approval and
the following:

1. You may ask Us to increase the Face Amount if You provide evidence
satisfactory to Us of the insurability of the Insured Person. If the Face
Amount is increased, then the cost of insurance rate for the amount of the
increase will be based on the rating class of the Insured Person on the
date of the increase, and the Insured Person's sex, smoker status and
Attained Age. Any increase You ask for must be at least $10,000. There is a
charge for such increase which is shown in the Certificate Information
section. We will deduct the charge from Your Certificate Account Value
beginning with the date the increase takes effect. Such deduction will be
made in accordance with the Treatment Of Deductions provision. If You
increase the Face Amount, an additional fourteen year surrender charge may
apply to that increase if any or all of that increase is surrendered before
the end of the fourteenth year from the effective date of increase. We will
not allow You to increase the Face Amount more than once during any
Certificate Year, nor will We allow You to increase the Face Amount after
the Insured Person's 65th birthday.

2. You may ask Us to reduce the Face Amount but not to less than the minimum
Face Amount for which We would then issue this Certificate under Our rules.
Any such reduction in the Face Amount may not be less than $5,000 or,
during the first five Certificate Years, more than 10% of the original Face
Amount. If You do this before the end of the fourteenth year or before the
end of the fourteenth year following an increase in the Face Amount, We may
deduct from Your Certificate Account Value a pro rata share of the
applicable surrender charge. Reductions will first be applied against the
most recent increase in the Face Amount. They will then be applied to prior
increases in the Face Amount in the reverse order in which such increases
took place, and then to the original Face Amount. We will not allow You to
reduce the Face Amount in the first year immediately following the
effective date of an increase in the Face Amount or more than once during
any Certificate Year.

3. You can change Your Life Insurance Proceeds Option. We may require that You
submit evidence satisfactory to Us that the Insured Person is insurable. If
You ask Us to change from Life Insurance Proceeds Option I to Life
Insurance Proceeds Option II, We will decrease the Face Amount by the
amount in Your Certificate Account Value on the date the change takes
effect. However, We reserve the right to decline to make such change if it
would reduce the Face Amount below the minimum Face Amount for which We
would then issue this Certificate under Our rules. If You ask Us to change
from Life Insurance Proceeds Option II to Life Insurance Proceeds Option I,
We will increase the Face Amount by the amount in Your Certificate Account
Value on the date the change takes effect. Such decreases and increases in
the Face Amount are made so that the Death Benefit Amount remains the same
on the date the change takes effect. However, if the Death Benefit Amount
is determined by a percentage multiple of the Certificate Account Value,
there may be an increase in the Death Benefit Amount.

4. The change will take effect at the beginning of the Certificate Month that
coincides with or next follows the date We approve Your request.

5. We reserve the right to decline to make any change that We determine would
cause this Certificate to fail to qualify as life insurance as defined in
Section 7702 of the Internal Revenue Code, as amended.

6. You may ask for a change by completing an Application For Change, which You
can get from Our agent or by writing to Us at Our Administrative Office. A
copy of Your Application For Change will be attached to the new Certificate
Information section that We will issue when the change is made. The new
section and the Application For Change will become a part of this
Certificate. We will require You to return this Certificate to Our
Administrative Office to make a Certificate change.

26GVULD997 8
<PAGE>

THE PREMIUMS YOU PAY

The initial Premium shown in the Certificate Information section is due on or
before delivery of this Certificate. No insurance will take effect before the
initial Premium is paid. Other Premiums may be paid at Our Administrative Office
at any time while this Certificate is in force and before the Maturity Date. If
requested, We will give a receipt signed by any of Our officers.

We will send Premium notices to You for the Planned Periodic Premium shown in
the Certificate Information section. You may skip Planned Periodic Premiums.
However, this may adversely affect the period of time that Your Certificate
stays in force and Your Certificate Account Value.

Limits. Each Premium after the initial one must be at least the minimum Premium
amount shown in the Certificate Information section. We reserve the right to
limit the amount of any Premium which is in addition to the Planned Periodic
Premium if acceptance of such premium would result in an increase in the Death
Benefit Amount greater than the amount of the premium.

We also reserve the right not to accept Premium (in a Certificate Year) that We
determine would cause this Certificate to fail to qualify as a life insurance
contract as defined in Section 7702 of the Internal Revenue Code, as amended.

Grace Period. In order for insurance coverage to remain in force, the Net Cash
Surrender Value must be sufficient to cover the total monthly deductions. If the
Net Cash Surrender Value at the beginning of any Certificate Month is less than
such deductions for that month, We will send a written notice within 30 days to
You and any assignee on Our records at the last known addresses stating that a
Grace Period of 61 days has begun, starting with the beginning of that
Certificate Month. The notice will also state the amount of premium which would
increase the Net Cash Surrender Value sufficiently to cover total monthly
deductions for 3 months if no changes were made. If We do not receive the
requested premium amount before the end of the Grace Period, this Certificate
will end without value.

If We do receive the requested premium amount before the end of the Grace
Period, but the Net Cash Surrender Value is still insufficient to cover total
monthly deductions, We will credit the Net Premium payment to Your Certificate
Account Value and will send a written notice that a new 61 day Grace Period has
begun and again request additional premium.

If the Insured Person dies during a Grace Period, We will pay the Life Insurance
Proceeds.

Reinstatement Of Your Certificate. If this Certificate has ended without value,
You may reinstate the Certificate while the Insured Person is alive if You:

1. ask for reinstatement of the Certificate within 3 years from the end of the
Grace Period; and
2. provide Us with satisfactory evidence of insurability ; and
3. pay a Premium sufficient to cover: (i) the total monthly administrative
charges from the beginning of the Grace Period to the effective date of
reinstatement; (ii) total monthly deductions for 3 months, calculated from
the effective date of reinstatement; and (iii) the charge for applicable
taxes, the Premium charge, and any increase in surrender charges associated
with this payment (We will determine the required Premium as if no interest
or investment performance were credited to or charged against Your
Certificate Account Value); and
4. repay or reinstate any Certificate loan which existed on the date the
Certificate ended.

The effective date of the reinstatement of this Certificate will be the
beginning of the Certificate Month which coincides with or next follows the date
We approve Your request.

We will deduct from the required Premium the charge for applicable taxes and the
Premium charge. The Certificate Account Value, any Certificate loan, and the
surrender charges applicable at the time of reinstatement will be those that
were in effect on the date this Certificate ended without value.

We will start to make monthly deductions again as of the effective date of
reinstatement. The monthly administrative charges from the beginning of the
Grace Period to the effective date of reinstatement will be deducted from the
Certificate Account Value as of the effective date of reinstatement.

26GVULD997 9
<PAGE>

YOUR CERTIFICATE ACCOUNT VALUE AND HOW IT WORKS

Premium. When We receive Your Premium, We subtract the expense charges shown in
the table in the Certificate Information section. We put the balance (the Net
Premium) into Your Certificate Account Value as of the date We receive the
Premium at Our Administrative Office, and before any deductions from Your
Certificate Account Value as of the Certificate Date if it is later than the
date of receipt. No Premiums will be applied to Your Certificate Account Value
until the full initial Premium, as shown on Your application, is received at Our
Administrative Office.

Monthly Deductions. At the beginning of each Certificate Month We make a
deduction from Your Certificate Account Value to cover monthly administrative
charges and to provide insurance coverage, subject to the Grace Period
provision. Such deduction for any Certificate Month is the sum of the following
amounts determined as of the beginning of that month:

o the monthly administrative charges and taxes;
o the monthly cost of insurance for the Insured Person; and
o the monthly cost of any benefits provided by riders attached to this
Certificate.

The monthly cost of insurance is the sum of a) Our current monthly cost of
insurance rate times the net amount at risk at the beginning of the Certificate
Month divided by $1,000; plus b) any extra charge per $1,000 of Face Amount
shown in the Certificate Information section, times the Face Amount at the
beginning of the Certificate Month divided by $1,000. If the Death Benefit
Amount is the Face Amount, then the net amount at risk is the Death Benefit
Amount divided by 1.0032737 minus the amount in Your Certificate Account Value
at that time. However, if the Death Benefit Amount is a percentage of the
Account Value of this Certificate, then the net amount at risk is the Death
Benefit Amount minus the amount in Your Certificate Account Value at that time.
The cost of insurance rate is based on the Face Amount and on the sex, Attained
Age, rating class, and smoker or non-smoker status of the Insured Person.

We will determine cost of insurance rates from time to time. Any change in the
cost of insurance rates We use will be as described in the Changes In
Certificate Cost Factors provision. The rates will never be more than those
shown in the Table Of Guaranteed Maximum Cost Of Insurance Rates in the
Certificate Information section.

Other Deductions. We also make the following additional deductions from Your
Certificate Account Value as they occur:

o We deduct a partial surrender charge if You make a partial surrender of
this Certificate.
o We deduct a surrender charge if, before the end of the fourteenth
Certificate Year, You give up this Certificate for its Net Cash Surrender
Value, You reduce the Face Amount, or if this Certificate terminates
without value at the end of a Grace Period. A surrender charge may also
apply to such transactions for up to fourteen years immediately following a
Face Amount increase.
o We deduct a charge if You increase the Face Amount.
o We deduct a charge for certain transfers.

Treatment Of Deductions. We will make all deductions based on the proportion
that Your unloaned value in Our Guaranteed Account and Your values in the
Subaccounts bear to the total unloaned value in Your Certificate Account Value.

26GVULD997 10

<PAGE>

YOUR INVESTMENT OPTIONS

Allocations. This Certificate provides investment options for the amount in Your
Certificate Account Value. Amounts put into Your Certificate Account Value are
allocated to the Subaccounts and to the unloaned portion of Our Guaranteed
Account at Your direction. You specified Your initial Premium allocation
percentages in Your application for this Certificate, a copy of which is
attached to this Certificate. Unless You change them, such percentages will also
apply to subsequent Premiums. However, any Premium which is put into Your
Certificate Account Value prior to the Allocation Date will initially be
allocated to the Money Market Subaccount. On the Allocation Date, any such
amounts then in the Money Market Subaccount will be allocated in accordance with
the directions contained in Your Certificate application. For any Premium
payment which requires evidence of insurability, the Net Premium will be
allocated to the Money Market Subaccount until such evidence is received and
reviewed. If approved, the Net Premium will then be allocated in accordance with
Your directions. Otherwise the total Premium payment will be returned.

No less than 5% of a Premium may be allocated to any one account. Allocation
percentages must be zero or a whole number not greater than 100%. The sum of the
Premium allocation percentages must equal 100%. You may change such allocation
percentages by written notice to Our Administrative Office. A change will take
effect on the date We receive it at Our Administrative Office except for changes
received on or prior to the Allocation Date which will take effect on the first
business day following the Allocation Date.

Transfers. At Your written request to Our Administrative Office, We will
transfer amounts from Your value in any Subaccounts to one or more other
Subaccounts or to Our Guaranteed Account. Any such transfer will take effect on
the date We receive Your written request for it at Our Administrative Office.

Once during each Certificate Year You may ask Us by written request to Our
Administrative Office to transfer an amount You specify from Your unloaned value
in Our Guaranteed Account to one or more Subaccounts. However, We will make such
a transfer only if (1) We receive Your written request at Our Administrative
Office within 30 days before or after a Certificate Anniversary; and (2) the
amount You specify is not more than the greater of 25% of Your unloaned value in
Our Guaranteed Account as of the date the transfer takes effect or the minimum
transfer amount shown in the Certificate Information section. In no event will
We transfer more than Your unloaned value in Our Guaranteed Account. The
transfer will take effect on the date We receive Your written request for it at
Our Administrative Office but not before the Certificate Anniversary.

The minimum amount that We will transfer from the amount You have in a
Subaccount is the lesser of the minimum transfer amount shown in the Certificate
Information section or the amount You have in that Subaccount on that date,
except as stated in the next paragraph. The minimum amount that We will transfer
from the amount You have in Our Guaranteed Account is the lesser of the minimum
transfer amount or Your unloaned value in Our Guaranteed Account as of the date
the transfer takes effect, except as stated in the next paragraph. If You do not
transfer the entire amount You have in a Subaccount or the entire unloaned
amount You have in Our Guaranteed Account, the remaining value in either must be
no less than the minimum transfer amount.

We will waive the minimum amount limitations set forth in the immediately
preceding paragraph if the total amount being transferred on that date is at
least the minimum transfer amount.

We reserve the right to make a transfer charge up to the amount shown in the
Certificate Information section. The transfer charge, if any, is deducted from
the amounts transferred from the Subaccounts and the Guaranteed Account based on
the proportion that the amount transferred from each Subaccount and the
Guaranteed Account bears to the total amount being transferred. A transfer from
the Money Market Subaccount on the Allocation Date (if applicable) will not
incur a transfer charge.

26GVULD997 11

<PAGE>

YOUR CERTIFICATE ACCOUNT VALUE

Your Certificate Account Value on the Certificate Date is equal to the initial
Net Premium. The amount in Your Certificate Account Value at any other time is
equal to the sum of the amounts You then have in Our Guaranteed Account and the
Subaccounts under this Certificate.

Your Value In The Subaccounts. The amount You have in a Subaccount under this
Certificate at any time is equal to the number of units this Certificate then
has in that Subaccount multiplied by the Subaccount's unit value at that time. A
Certificate transaction occurs when units of a Subaccount are either purchased
or redeemed. Amounts allocated, transferred to or added to a Subaccount are used
to purchase units of that Subaccount; units are redeemed when amounts are
deducted, loaned, transferred from, or fully or partially surrendered.

The number of units a Certificate has in a Subaccount at any time is equal to
the number of units purchased minus the number of units redeemed in that
Subaccount to that time. The number of units purchased or redeemed in a
Certificate transaction is equal to the dollar amount of the Certificate
transaction divided by the Subaccount's unit value on the date of the
Certificate transaction. Certificate transactions may be made on any day. The
unit value that applies to a transaction made on a business day will be the unit
value for that day. The unit value that applies to a transaction made on a
non-business day will be the unit value for the next business day.

We determine unit values for the Subaccounts at the end of each business day.
Generally, a business day is any day the New York Stock Exchange is open for
trading. A business day immediately preceded by one or more non-business
calendar days will include those non-business days as part of that business day.
For example, a business day which falls on a Monday will consist of that Monday
and the immediately preceding Saturday and Sunday.

The unit value of a Subaccount on any business day is equal to the unit value
for that Subaccount on the immediately preceding business day multiplied by the
net investment factor for that Subaccount on that business day.

The net investment factor for a Subaccount on any business day is (A / B) - C
where:

A = the net asset value of the shares in designated investment companies
that belong to the Subaccount at the close of business on such
business day before any Certificate transactions are made on that day,
plus the amount of any dividend or capital gain distribution paid by
the investment companies on that day;

B = the value of the assets in that Subaccount at the close of business
on the immediately preceding business day after all transactions were
made for that day; and

C = a charge for mortality and expense risks for each calendar day in
that business day, as defined above,corresponding to a charge not
exceeding the annual percentage amount shown in the Certificate
Information section, plus any charge for that day for taxes or amounts
set aside as a reserve for taxes.

The net asset value of an investment company's shares held in each Subaccount
will be the value reported to Us by that investment company.

26GVULD997 12
<PAGE>

YOUR CERTIFICATE ACCOUNT VALUE (CONTINUED)

Your Value In Our Guaranteed Account. The amount You have in Our Guaranteed
Account at any time is equal to the amounts allocated and transferred to it,
plus the interest credited to it, minus amounts deducted, transferred and
partially surrendered from it.

We will credit Our Guaranteed Account with interest rates We determine. An
interest rate of not less than the Certificate loan rate minus 2% will be
credited to the loaned amount in Our Guaranteed Account. Any change in the
interest rate We credit to the unloaned amount in Our Guaranteed Account will be
as described in the Changes In Certificate Cost Factors provision. The interest
rate applied to either the loaned or unloaned amount in Our Guaranteed Account
will not be less than 4% per year, compounded annually.

At the end of each Certificate Month We will credit interest on unloaned amounts
in Our Guaranteed Account as follows:

o On amounts that remain in Our Guaranteed Account for the entire Certificate
Month, from the beginning to the end of the Certificate Month.

o On amounts allocated to Our Guaranteed Account during a Certificate Month
that are Net Premium payments or loan repayments, from the date We receive
them to the end of the Certificate Month.

o On amounts transferred to Our Guaranteed Account during a Certificate
Month, from the date of the transfer to the end of the Certificate Month.

o On amounts deducted or partially surrendered from Our Guaranteed Account
during a Certificate Month, from the beginning of the Certificate Month, or
the date such amount is allocated to the Guaranteed Account, if later, to
the date of the deduction or partial surrender.

THE CASH SURRENDER VALUE OF THIS CERTIFICATE

Cash Surrender Value. The Cash Surrender Value on any date is equal to the
amount in Your Certificate Account Value on that date minus any surrender
charge.

Net Cash Surrender Value. The Net Cash Surrender Value is equal to the Cash
Surrender Value minus any Certificate loan and accrued loan interest. You may
give up this Certificate for its Net Cash Surrender Value at any time while the
Insured Person is living. To do this, You must send a written request
accompanied by this Certificate to Our Administrative Office. We will compute
the Net Cash Surrender Value as of the date We receive Your request and this
Certificate. All insurance coverage under this Certificate will end on such
date.

Surrender Charges. If You give up this Certificate for its Net Cash Surrender
Value or if it ends without value at the end of a Grace Period before the end of
the fourteenth Certificate Year, We will subtract a surrender charge from Your
Certificate Account Value. A table of maximum surrender charges for the initial
Face Amount is shown in the Certificate Information section. Surrender charges
will be reduced by any partial surrender charge incurred as the result of a
partial surrender and by any pro rata surrender charge incurred as a result of a
reduction in the Face Amount.

An increase in the Face Amount will result in an additional fourteen year
surrender charge applicable to that increase. The additional surrender charge
period will begin on the effective date of the increase.

26GVULD997 13

<PAGE>

THE CASH SURRENDER VALUE OF THIS CERTIFICATE (CONTINUED)

Pro Rata Surrender Charge. If the Face Amount is reduced before the end of the
fourteenth Certificate Year or within fourteen years immediately following a
Face Amount increase, because You asked for a reduction in the Face Amount, We
will also deduct a pro rata share of any applicable surrender charge from Your
Certificate Account Value. Reductions will first be applied against the most
recent increase in the Face Amount. They will then be applied to prior increases
in the Face Amount in the reverse order in which such increases took place, and
then to the original Face Amount.

The amount of any pro rata surrender charge will be determined by the formula (A
/ B) x C, where:

A = the amount of the reduction in the Face Amount.

B = the Face Amount immediately prior to the reduction.

C = the total surrender charge applicable to this Certificate immediately
prior to the reduction.

We have filed a detailed statement of the method of computing surrender charges
with the insurance supervisory official of the jurisdiction in which this
Certificate is delivered.

Partial Surrender. A partial surrender will result in a reduction in the Cash
Surrender Value and in Your Certificate Account Value equal to the partial
surrender amount as well as a reduction in Your Life Insurance Proceeds. If Life
Insurance Proceeds Option I is in effect, the partial surrender may also result
in a decrease in the Face Amount. However, We will not allow such partial
surrender if it would reduce the Face Amount to less than the minimum amount for
which We would then issue this Certificate under Our rules. We will also not
allow a partial surrender during the first Certificate Year or during the first
12 Certificate Months immediately following an increase in the Face Amount.
After such periods and while the Insured Person is living, You may ask for a
partial surrender by written request to Our Administrative Office no more than
twice during a Certificate Year. Your request will be subject to Our approval
based on Our rules in effect when We receive Your request, and to the minimum
partial surrender amount shown in the Certificate Information section. The
partial surrender amount deducted from the Certificate Account Value is equal to
the amount requested, plus the expense charge shown in the Table Of Expense
Charges in the Certificate Information section, plus the partial surrender
charge described below. We have the right to decline a request for a partial
surrender.

You may tell Us how much of each partial surrender is to come from Your unloaned
value in Our Guaranteed Account and from Your values in each of the Subaccounts.
If You do not tell Us, the partial surrender will be deducted from the
Certificate Account Value based on the proportion that Your unloaned value in
Our Guaranteed Account and Your values in the Subaccounts bear to the total
unloaned value in Your Certificate Account Value.

Such partial surrender and resulting reduction in the Death Benefit Amount, in
the Cash Surrender Value and in Your Certificate Account Value will take effect
on the date We receive Your written request for it at Our Administrative Office.
We will send You the applicable new page in the Certificate Information section
if a partial surrender results in a reduction in the Face Amount. It will become
a part of this Certificate. We may require You to return this Certificate to Our
Administrative Office to make a change.

Partial Surrender Charge. The partial surrender charge is equal to the amount of
the partial surrender plus the expense charge for a partial surrender, divided
by the Net Cash Surrender Value immediately prior to the partial surrender, and
then multiplied by the total surrender charge in effect at that time.

26GVULD997 14

<PAGE>

HOW A LOAN CAN BE MADE

Certificate Loans. After the first Certificate Year You can get a loan on this
Certificate while it has a loan value. This Certificate will be the only
security for the loan. The initial loan and each additional loan must be for at
least the minimum loan amount shown in the Certificate Information section. Any
amount on loan is part of Your Certificate Account Value.
We refer to this as the loaned portion of Your Certificate Account Value.

Loan Value. The loan value on any date is 90% of the Net Cash Surrender Value on
that date. The amount of the loan may not be more than the loan value. If You
request an increase to an existing loan, the amount requested will be added to
the amount of the existing loan and accrued loan interest.

Your request for a Certificate loan must be in writing to Our Administrative
Office. You may tell Us how much of the requested loan is to be allocated to
Your unloaned value in Our Guaranteed Account and Your value in each Subaccount.
Such values will be determined as of the date We receive Your request. If You do
not tell Us, We will allocate the loan based on the proportion that Your
unloaned value in Our Guaranteed Account and Your values in the Subaccounts bear
to the total unloaned value in Your Certificate Account Value.

The loaned portion of Your Certificate Account Value will be maintained as a
part of Our Guaranteed Account. Thus, when a loaned amount is allocated to a
Subaccount, We will redeem units of that Subaccount sufficient in value to cover
the amount of the loan so allocated and transfer that amount to Our Guaranteed
Account.

Loan Interest. Interest on a loan accrues daily at the loan interest rate shown
in the Certificate Information section. Loan interest is due on each Certificate
Anniversary. If the interest is not paid when due, it will be added to Your
Outstanding Loan and allocated based on the proportion that Your unloaned value
in Our Guaranteed Account and Your values in the Subaccounts bear to the total
unloaned value in Your Certificate Account Value. The unpaid interest will then
be treated as part of the loaned amount and will bear interest at the loan rate.

When unpaid loan interest is allocated to a Subaccount, We will redeem units of
that Subaccount sufficient in value to cover the amount of the interest so
allocated and transfer that amount to Our Guaranteed Account.

Loan Repayment. You may repay all or part of a Certificate loan at any time
while the Insured Person is alive and this Certificate is in force. We will
assume that any payment You make to Us while You have a loan and Your
Certificate is not in the Grace Period is a loan repayment, unless You tell Us
in writing that it is a Premium payment. A loan repayment will reduce the loaned
portion of Your Certificate Account Value and will then be allocated on the
basis of the Premium allocation percentages then in effect.

Failure to repay a Certificate loan or to pay loan interest will not terminate
this Certificate unless at the beginning of a Certificate Month the Net Cash
Surrender Value is less than the total monthly deduction then due. In that case,
the Grace Period provision will apply.

A Certificate loan will have a permanent effect on Your benefits under this
Certificate even if it is repaid.

26GVULD997 15

<PAGE>

OUR SEPARATE ACCOUNT

The Separate Account is identified in the Certificate Information section. We
established it and We maintain it under the laws of the State of New York.
Realized and unrealized gains and losses from the assets of Our Separate Account
are credited or charged against it without regard to Our other income, gains, or
losses. Assets are put in the Separate Account to support this Certificate and
other variable life insurance policies.

The assets of the Separate Account are Our property. The portion of its assets
equal to the reserves and other Certificate liabilities with respect to the
Separate Account will not be chargeable with liabilities arising out of any
other business We conduct. We may transfer assets of the Separate Account in
excess of its reserves and other liabilities to another separate account or to
Our General Account.

Subaccounts. Our Separate Account consists of Subaccounts. Each Subaccount
invests its assets in shares of a designated investment company or companies.
The Subaccounts that You chose for Your initial allocations are shown on the
application for this Certificate, a copy of which is attached to this
Certificate. We may from time to time make other Subaccounts available to You.
We will provide You with written notice of all material details including
investment objectives and all charges.

Subject to the prior approval of the insurance supervisory official of the
jurisdiction in which this Certificate was delivered, We have the right to:

1. change, add or delete designated investment companies;
2. add or remove Subaccounts; and
3. combine any two or more Subaccounts.

Consistent with state law, We have the right to:

1. register or deregister the Separate Account under the Investment Company
Act of 1940;
2. run the Separate Account under the direction of a committee, and discharge
such committee at any time;
3. restrict or eliminate any voting rights of Policy Owners, or other persons
who have voting rights as to the Separate Account; and
4. operate the Separate Account or one or more of the Subaccounts by making
direct investments, or in any other form. If We do so, We may invest the
assets of the Separate Account or one or more of the Subaccounts in any
legal investments. We will rely upon Our own or outside counsel for advice
in this regard. Also, unless otherwise required by law or regulation, an
investment advisor or any investment policy may not be changed without Our
consent. If required by law or regulation, the investment policy of a
Subaccount will not be changed by Us unless approved by the Superintendent
of Insurance of the State of New York or deemed approved in accordance with
such law or regulation. If so required, the process for getting such
approval is on file with the insurance supervisory official of the
jurisdiction in which this Certificate is delivered.

If any of these changes results in a material change in the underlying
investments of a Subaccount, We will notify You of such change, as required by
law. If You have value in that Subaccount, We will transfer it at Your written
direction from that Subaccount (without charge) to another Subaccount or to Our
Guaranteed Account, and You may then change Your Premium allocation percentages.

OUR ANNUAL REPORT TO YOU

For each Certificate Year, We will send You a report for this Certificate that
shows the current Life Insurance Proceeds, the value You have in Our Guaranteed
Account, the value You have in each Subaccount of Our Separate Account, the Cash
Surrender Value, and any Certificate loan with the current loan interest rate.
It will also show the Premiums paid and any other information as may be required
by the insurance supervisory official of the jurisdiction in which this
Certificate is delivered.

26GVULD997 16

<PAGE>

HOW BENEFITS ARE PAID

The Life Insurance Proceeds, or the surrender value of Your Certificate, will be
paid immediately in one sum.

OTHER IMPORTANT INFORMATION

Your Contract With Us. This Certificate is issued in consideration of the
payment of the initial Premium shown in the Certificate Information section.

This Certificate, and the attached copy of the initial application, any
supplemental application, all subsequent applications to change this
Certificate, and all additional Certificate Information sections added to this
Certificate, make up the entire contract. The rights conferred by this
Certificate are in addition to those provided by applicable Federal and State
laws and regulations.

Only Our executive officers can modify this contract or waive any of Our rights
or requirements under it. The person making these changes must put them in
writing and sign them.

Continuation Of Certificate Coverage. If the Policy terminates, or the Insured
Person otherwise becomes ineligible, coverage may be continued under this
Certificate by the timely payment of premiums directly to Our Home Office or to
one of Our agents.

Certificate Changes - Applicable Tax Law. For You and the Beneficiary to receive
the tax treatment accorded to life insurance under Federal law, this Certificate
must qualify initially and continue to qualify as life insurance under the
Internal Revenue Code or and successor law or regulation. Therefore, to assure
this qualification for You, We have reserved earlier in this Certificate the
right to decline to accept Premium, in whole or in part, to decline to change
the Life Insurance Proceeds Option, to decline to change the Face Amount or to
decline to make partial surrenders that would cause this Certificate to fail to
qualify as a life insurance contract as defined in Section 7702 of the Internal
Revenue Code, as amended. Further, We reserve the right to make changes in this
Certificate or its riders or to require additional Premium or to make
distributions from this Certificate to the extent We deem it necessary to
continue to qualify this Certificate as life insurance. Any such changes will
apply uniformly to all certificates that are affected and will be subject to the
prior approval of the insurance supervisory official of the jurisdiction in
which this Certificate is delivered. You will be given advance notice of such
changes.

Changes In Certificate Cost Factors. Changes in Certificate cost factors
(interest rates We credit, cost of insurance deductions, and expense charges)
will be by class and based upon changes in future expectations for such elements
as: investment earnings, mortality, persistency, expenses and taxes. Any change
in Certificate cost factors will be determined in accordance with procedures and
standards on file, if required, with the insurance supervisory official of the
jurisdiction in which this Certificate is delivered.

When The Certificate Is Incontestable. We have the right to contest the validity
of this Certificate based on material misstatements made in the initial
application for this Certificate. We also have the right to contest the validity
of any Certificate change or reinstatement based on material misstatements made
in any application for that change or reinstatement. However, We will not
contest the validity of this Certificate after it has been in force during the
lifetime of the Insured Person for two years from the Issue Date shown in the
Certificate Information section. We will not contest any Certificate change that
requires evidence of insurability, or any reinstatement of this Certificate,
after the change or reinstatement has been in force for two years during the
Insured Person's lifetime.

No statement will be used to contest a claim unless contained in an application.

All statements made in an application are representations and not warranties.

See any additional benefit riders for modifications of this provision that apply
to them.

26GVULD997 17
<PAGE>

OTHER IMPORTANT INFORMATION (CONTINUED)

What If Age Or Sex Has Been Misstated? If the Insured Person's age or sex has
been misstated on any application, the Death Benefit Amount and any benefits
provided by riders to this Certificate will be those which would be purchased by
the most recent deduction for the cost of insurance, and the cost of any
benefits provided by riders, at the correct age and sex.

How The Suicide Exclusion Affects Benefits. If the Insured Person commits
suicide within two years after the Issue Date shown in the Certificate
Information section, Our liability will be limited to the payment of a single
amount. This amount will be equal to the Premiums paid, minus any loan and
accrued loan interest, minus any partial surrender, and minus the cost of any
riders attached to this Certificate. If the Insured Person commits suicide
within two years after the effective date of a change that You asked for that
increases the Death Benefit Amount, then Our liability as to the increase in
amount will be limited to the payment of a single sum equal to the monthly cost
of insurance deductions made for such increase plus the expense charge deducted
for the increase.

How We Measure Certificate Periods And Anniversaries. We measure Certificate
Years, Certificate Months, and Certificate Anniversaries from the Certificate
Date. Each Certificate Month begins on the same day as the Certificate Date for
each succeeding month, except that, for those months not having such a day, it
is the last day of that month.

How, When And What We May Defer. We may not be able to obtain the value of the
assets of the Subaccounts if: (1) the New York Stock Exchange is closed; or (2)
the Securities and Exchange Commission requires trading to be restricted or
declares an emergency. During such times, as to amounts allocated to the
Subaccounts, We may defer:

1. determination and payment of partial surrenders;

2. determination and payment of any Death Benefit Amount in excess of the Face
Amount;

3. payments of loans;

4. determination of the unit values of the Subaccounts; and

5. any requested transfer or the transfer on the Allocation Date.

As to amounts allocated to Our Guaranteed Account, We may defer payment of any
surrender or loan amount for up to six months after We receive a request for it.
We will allow interest, at a rate of at least 4% a year, on any Net Cash
Surrender Value payment derived from Our Guaranteed Account that We defer for 10
days or more after We receive a request for it.

The Basis We Use For Computation. We provide Cash Surrender Values that are at
least equal to those required by law. If required to do so, We have filed with
the insurance supervisory official of the jurisdiction in which this Certificate
is delivered, a detailed statement of Our method of computing such values. We
compute reserves under this Certificate by the Commissioners' Reserve Valuation
Method.

We base minimum Cash Surrender Values and reserves on the 1980 Commissioners'
Standard Ordinary Male or Female, Smoker or Non-Smoker, Mortality Tables, Age
Last Birthday. We also use these tables as the basis for determining maximum
insurance costs, taking account of sex, Attained Age, rating class and Smoker or
Non-Smoker status of the Insured Person. We use an effective annual interest
rate of 4%.

Certificate Illustrations. Upon request We will give You an illustration of the
future benefits under this Certificate based upon both guaranteed and current
cost factor assumptions. However, if You ask Us to do this more than once in any
Certificate Year, We reserve the right to charge You a fee not exceeding $25 for
this service.

Certificate Changes. You may add additional benefit riders or make other
changes, subject to Our rules at the time of change.

26GVULD997 18

<PAGE>

EXCHANGE OPTION

Your Exchange Right. You may exchange this Certificate while it is in force for
flexible premium fixed benefit life insurance coverage on the life of the
Insured Person, without evidence of insurability. This exchange may be made
either:

1. within 24 months after the Issue Date while this Certificate is in force;
or
2. within 24 months after any increase in the Face Amount of this Certificate;
or
3. within 60 days of the effective date of a material change in the investment
policy of a Subaccount, or within 60 days of the notification of such
change, if later. In the event of such a change, the Company will notify
You and give You information on the options available.

When an exchange is requested, We accomplish this by transferring all monies to
the Guaranteed Account. There is no charge for this transfer. Once this option
is exercised, Your entire Certificate Account Value must remain in the
Guaranteed Account for the life of this Certificate. The Face Amount in effect
at the time of the exchange will remain unchanged. The Certificate Date, Issue
Date and issue age of the Insured Person will remain unchanged. The Owner and
Beneficiary will remain the same as were recorded immediately before the
exchange.

DOLLAR COST AVERAGING

Dollar Cost Averaging. Using Our Dollar Cost Averaging Plan Request Form, You
may elect automatic monthly transfers from the Money Market Subaccount into
other Subaccounts for a specified dollar amount, or a specified number of months
not in excess of 24, in accordance with the following:

1. the allocation to the Subaccounts will be based on the premium allocation
that is in effect at the time of each transfer;
2. if You elect Dollar Cost Averaging in conjunction with Your application for
this Certificate, the automatic transfers will begin on the first Monthly
Anniversary following the end of the Free Look Period;
3. if You elect Dollar Cost Averaging after this Certificate has been issued,
the automatic transfers will begin on the second Monthly Anniversary
following Our receipt of Your election;
4. this option may be elected at any time provided there is a minimum balance
of $2,000 in the Money Market Subaccount; 5. all premiums received after
the date You elect Dollar Cost Averaging will be applied to the Money
Market Subaccount for the purpose of Dollar Cost Averaging.

If You elect to transfer a specific dollar amount each month, automatic
transfers will continue until Your Money Market Subaccount is depleted. If You
elect to transfer based on a specific number of months, each month We will
transfer a fraction of the balance in the Money Market Fund equal to one divided
by the number of months remaining in the period. For example, if You elect to
transfer over a 12 month period, the first transfer will be 1/12th of the
balance in the Money Market Fund, the second transfer will be 1/11th of the
balance, the third transfer will be 1/10th of the balance and so on until the
end of the requested period.

Automatic monthly transfers will continue until one of the following conditions
occurs:

1. the balance in the Money Market Subaccount is depleted;
2. We receive Your written request to cancel future transfers;
3. We receive notification of the death of the Insured Person; or
4. this Certificate ends without value.

26GVULD997 19

<PAGE>

[GRAPHIC AILIFE]
American International Life Assurance Company of New York
80 Pine Street
New York, New York 10005

Flexible Premium Variable Life Insurance. Life Insurance Proceeds payable upon
death while this Certificate is in force. Adjustable Face Amount. Premiums may
be paid while Insured Person is living and before the Maturity Date. Net Cash
Surrender Value must be sufficient to keep the Certificate in force. Values
provided by this Certificate are based on declared interest rates, and on the
investment performance of the Subaccounts. Certificate values are not guaranteed
as to dollar amount. This is a non-participating Certificate.

26GVULD997

<PAGE>

EXHIBIT C
<PAGE>
AMERICAN INTERNATIONAL LIFE
ASSURANCE COMPANY OF NEW YORK
80 Pine Street, New York, NY 10005 Life Insurance Application

1. PROPOSED INSURED

First Name Middle Initial Last Name
___________________________________________________________________________

Date of Birth ______________ Age _______ Sex ____M ____F
mo. day yr.
Place of Birth _____________________

Social Security No. _______ - _______ - _______

Citizenship ____ U.S. _____ Other (Country _________________)

Number Street or Route City State Zip
___________________________________________________________________________

Telephone Occupation and Duties
Home (___)_______________ Employer:
Business (___)_______________ Address:

2. OWNER (if other than proposed insured)

First Name Middle Initial Last Name
___________________________________________________________________________

Social Security Or Tax I.D. No. _______ - _______ - ________

Number Street or Route City State Zip
___________________________________________________________________________
If a contingent Owner is desired, indicate in special instructions below.

3. BENEFICIARY

Primary ______________________________ Relationship ______________________

Contingent ___________________________ Relationship ______________________

4. PLAN SELECTION

Plan _________________________________ Insurance Amount $_________________

___Waiver of Premium ____Accidental Death $_________ ____Other

Death Benefit Option (Universal Life Only) ____Option I (level)
____Option II (enhanced)

5. PREMIUM INFORMATION

Premium Paid with Application $_______________
(must be at least two months premium for the plan and insurance amount
applied for)

Frequency: ____Annual ____Semi-Annual ___Quarterly ____ ______________

Universal Life Only: Planned Initial Premium $_________________

Planned Periodic Payment $________________

24GVAPP997
<PAGE>

6. OTHER IMPORTANT INFORMATION

Life Insurance now in force:
(if none, so state)

Company Amount Plan Year Issued
__________________________________________________________________________

a. Have you ever had a request for life or disability Yes No
insurance declined, postponed, rated, or restricted
in any way, or are any other applications for
insurance pending or contemplated? ____ ____

b. Will the covergae applied for replace or change
any existing life insurance or annuity? ____ ____

c. Within the past two years have you flown or
taken instruction as a pilot or engaged in any
kind of racing, scuba or sky diving, hang gliding,
or do you intend to? ____ ____

d. Within the past five years have you used
amphetamines, narcotics, barbiturates,
hallucinogens, or marijuana, or received treatment
for drug or alcohol use? ____ ____

e. Have you ever had your driver's license
restricted or revoked? ____ ____
Driver License No. ______________________

f. Proposed Insured's: Height_____ft. ____in.
Weight _____lbs. Any recent weight loss? ____ ____

g. Within the past 12 months have you smoked
cigarettes or used any other tobacco products? ____ ____

h. Do you intend to reside or travel outside
the United States? ____ ____

Give details to "Yes" responses to questions 6(a)
through 6(h).

HOME OFFICE AMENDMENTS AND CORRECTIONS SPECIAL INSTRUCTIONS
(for home office use only where permitted
by state statute)

7. Have you within the past five years: Yes No

(a) Consulted a physician for any reason,
had an electrocardiogram or other diagnostic
tests? ____ ____

(b) Been in a clinic, hospital, or medical
facility for observation or treatment? ____ ____

24GVAPP997
<PAGE>
8. Have you ever had or been treated for or had indication of:

(a) Cancer, stroke, or heart attack? ____ ____

(b) Diabetes, glandular disorder, enlarged
lymph nodes, epilepsy, or any mental or nervous
disorder? ____ ____

(d) Kidney, urinary, or reproductive disorder, or
sexually transmitted disease? ____ ____

(e) Liver or gastro-intestinal disorder? ____ ____

(f) Asthma, emphysema, or other respiratory disorder? ____ ____

(g) Loss of vision, amputation, deformity,
arthritis, or other musculo-skeletal disorder? ____ ____

9. Any family history of diabetes or heart disease? ____ ____

10. Have you ever had or been told you have:

(a) "AIDS" (Acquired Immune Deficiency Syndrome)? ____ ____

(b) "AIDS" Related Complex (ARC)? ____ ____

11. Are you presently taking any medication? ____ ____

12. Family History

Age if State of Age at
Living Health Death Cause of Death

Father _______ _______ _______ _______________
Mother _______ _______ _______ _______________
Brothers & Sisters: _______ _______ _______ _______________
# Living___ Dead___ _______ _______ _______ _______________

24GVAPP997
<PAGE>

INSTRUCTIONS: Give full details for all "Yes" answers to questions 7 to 12. Give
dates, treatment, duration of illness, and names and addresses of all attending
physicians and medical facilities. Please, attach additional sheet, if needed.

13. Personal Physician: (if none, so state)

Name: _________________________________

Address:_______________________________
_______________________________________

Date and Reason Last Seen:

I hereby represent all my statements and answers to the above questions to be
correct and true to the best of my knowledge and belief. This application and
any amendments shall be a part of any insurance issued by the Company. No
medical examiner or agent can make or change a contract or waive any of the
Company's rights or requirements. Unless otherwise provided by the Conditional
Temporary Insurance Agreement, if applicable, no insurance will take effect
unless and until, while the insured is living, the application is approved, the
full initial premium is paid, the certificate is delivered to and accepted by
the owner, and answers and statements in this application continue to be
complete and true at the time of such payment and acceptance. Acceptance of any
certificate issued based on this application will be a ratification of any
amendments or corrections noted by AIG Life Insurance Company in the space
headed "Home Office Amendments and Corrections", except that if required by
state statue or regulation, any change in amount, age, plan of insurance,
additional benefits, or classification must be agreed to in writing.

24GVAPP997

<PAGE>

I authorize any physician or medical professional, hospital, clinic or
medically-related facility, insurer or reinsurer, Veterans Administration
facility, the Medical Information Bureau, Inc., consumer reporting agency,
employer or person, to disclose to AIG Life Insurance Company and its
reinsurers, medical and other information pertaining to me for use in
determining insurability. I authorize all such sources, except the MIB, Inc., to
give such information to any insurance support organization authorized by AIG
Life Insurance Company to collect and transmit such information. I agree that
this authorization shall be valid from the date signed for a period of 2 1/2
years. I agree that a photocopy of this authorization shall be as valid as the
original. I understand that a copy is available to me upon request. I hereby
acknowledge receipt of the Notice to Applicant Part One and Part Two. By
applying for coverage, I hereby agree to become a participant in the [ABC Group
Trust].

Signed at ___________________________ ___________________________________
(City, State) (Date) (Signature of Proposed Insured
or Parent if a Minor)

______________________________________ ___________________________________
(Signature of Owner if Other than (Signature of Witness)
Proposed Insured)

AGENT: Do you have any reason to believe the coverage applied for is to replace
or change any existing annuities or life insurance on the life of the
Proposed Insured? YES_____ NO_____

______________________________________ ___________________________________
(Signature of Agent) (Printed Name of Agent) (Code No.)

______________________________________ ___________________________________
(Address of Agency) (Printed Name of Agency) (Code No.)

(____)________________________________ (____)_____________________________
(Agent Phone No.) (Agency Phone No.)

24GVAPP997

<PAGE>

AMERICAN INTERNATIONAL LIFE
ASSURANCE COMPANY OF NEW YORK
80 Pine Street, New York, NY 10005

PLEASE PRINT ALL ANSWERS Supplemental Application For Life Insurance

1. Proposed Insured

_______________________________________________________________________
First Name M.I. Last Name

2. Birth Date

____________________________________________
Month Day Year

3. Social Security Number - -
--------------------------------

4. Allocation of premium (Must be in 1% increments and no less than 5% to any
one fund. Total must equal 100%.)

Guaranteed Account ____% TEMPLETON
International ____%
Developing Markets ____%
ALLIANCE
Growth and Income ____%
Premier Growth ____% AIM
Quasar ____% AIM V.I. Value ____%

FIDELITY GOLDMAN SACHS
VIP Money Market ____% Growth and Income ____%
VIP II Index 500 ____% CORE U.S. Equity ____%
VIP II Contrafund ____% CORE Large Cap Growth ____%
CORE Small Cap Equity ____%
MORGAN STANLEY Capital Growth ____%
Fixed Income ____% Mid Cap Equity ____%
High Yield ____% International Equity ____%
Global Equity ____% Global Income ____%
U.S. Real Estate ____% High Yield ____%

NEUBERGER & BERMAN
Partners ____%

NOTE: The Net Premium will be allocated to the Fidelity Money Market
Fund until the end of the Right to Examine This Certificate period.

5. Dollar Cost Averaging (Minimum of $2,000 must be Yes____ No____
allocated to the Fidelity Money Market Fund).
If elected you must complete the Dollar Cost
Averaging Plan Request Form.

24GVSUP997
<PAGE>

6. (a) Did the Owner receive current prospectuses? Yes____ No____

(b) Does the Owner understand that:

- The death benefit may increase or decrease
depending on investment performance? Yes____ No____

- The cash value may increase or decrease
depending on the investment performance? Yes____ No____

- The Certificate will lapse if the cash
surrender value becomes insufficient to
cover the total monthly deductions? Yes____ No____

7. Suitability

What is the Owner's:

- Approximate net worth ______________
- Income earned ______________
- Income unearned ______________
- Number of dependents ______________
- Marginal tax bracket ______________
- Investment Objective(s) (check all that apply):
Growth_____ Growth and Income_____ Income_____
Capital Appreciation_____ Speculation_____

I, the Owner, represent that the statements and answers in this supplemental
application are written as made by me and are complete and true to the best of
my knowledge and belief.

Signed on _____________________, 19____ ___________________________________
Signature of Owner
at____________________, State of ______

_______________________________________ ___________________________________
Signature of Soliciting Agent Signature of Proposed Insured if
not Owner (Parent if Proposed
Insured is Age 15 or less)

24GVSUP997

EXHIBIT D

OPINION AND CONSENT OF COUNSEL

Ladies and Gentlemen:

I have made such examination of the law and have examined such company
records and documents as in my judgment are necessary or appropriate to enable
me to render the opinion that:

1. American International Life Assurance Company of New York is a
valid and existing stock life insurance company of the State
of New York.

2. Variable Account B is a separate investment account of
American International Life Assurance Company of New York
created and validly existing pursuant to the New York
Insurance Laws and the Regulations thereunder.

3. All of the prescribed corporate procedures for the issuance of
the Policies have been followed, and, when such Policies are
issued in accordance with the Prospectus contained in the
Registration Statement, all state requirements relating to
such Policies will have been complied with.

4. Upon the acceptance of Premiums made by Owners pursuant to a
Policy issued in accordance with the Prospectus contained in
the Registration Statement and upon compliance with the
applicable law, such Owner will have a legally issued, fully
paid, non-assessable contractual interest in such Policy.

This opinion, or a copy hereof, may be used as an exhibit to or in
connection with the filing with the Securities and Exchange Commission of the
Registration Statement on Form S-6 for the Policies to be issued by American
International Life Assurance Company of New York and Variable Account B.

/s/ Kenneth D. Walma
Kenneth D. Walma
Assistant Secretary and Associate Counsel

Dated: March 20, 1998

<PAGE>

EXHIBIT E

OPINION AND CONSENT OF ACTUARY

On behalf of American International Life Assurance Company of New York,
I hereby consent to the inclusion of the section entitled "Illustrations of
Account Value, Net Cash Surrender Value, Life Insurance Proceeds, and
Accumulated Premium" and of the table in Appendix A entitled "Maximum Initial
Surrender Charge Per $1,000 of Initial Specified Face Amount" in the
registration statement on Form S-6 registering Group Flexible Premium Variable
Universal Life Insurance Policies. The illustrations have been prepared in
accordance with standard actuarial principles and reflect the operation of the
Policy by taking into account all charges under the Policy and the underlying
funds.

/s/ A. Hasan Qureshi
A. Hasan Qureshi, FIA, MAAA
Vice President and Actuary

Dated: March 20, 1998

<PAGE>

EXHIBIT F

March 23, 1998

American International Life Assurance
Company of New York
80 Pine Street
New York, New York 10005

Ladies and Gentlemen:

We hereby consent to the reference to our name under the caption "Legal
Matters" in the Prospectus contained in the Registration Statement on Form S-6
filed on March 23, 1998, by American International Life Assurance Company of New
York and Variable Account B with the Securities and Exchange Commission under
the Securities Act of 1933 and the Investment Company Act of 1940.

Very truly yours,

/s/ Jorden Burt Boros Cicchetti Berenson & Johnson LLP
Jorden Burt Boros Cicchetti Berenson & Johnson LLP