NEW ENGLAND VARIABLE ACCOUNT, 485BPOS, 2000-04-27

NEW ENGLAND VARIABLE ACCOUNT
485BPOS, 2000-04-27

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 27, 2000
REGISTRATION NO. 333-11131
811-5338

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

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

FORM N-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]

PRE-EFFECTIVE AMENDMENT NO. [_]

POST-EFFECTIVE AMENDMENT NO. 5 [X]

AND

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]

AMENDMENT NO. 22 [X]

THE NEW ENGLAND VARIABLE ACCOUNT
(EXACT NAME OF REGISTRANT)

METROPOLITAN LIFE INSURANCE COMPANY
(NAME OF DEPOSITOR)

ONE MADISON AVENUE, NEW YORK, NEW YORK 10010
(ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES)

DEPOSITOR'S TELEPHONE NUMBER: (212) 578-5364

NAME AND ADDRESS OF AGENT FOR SERVICE: COPY TO:

Gary A. Beller, Esq. Stephen E. Roth, Esquire
Metropolitan Life Insurance Company Sutherland, Asbill & Brennan LLP
One Madison Avenue 1275 Pennsylvania Avenue, N.W.
New York, New York 10010 Washington, D.C. 20004-2404

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

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

[X] on May 1, 2000 pursuant to paragraph (b) of Rule 485

[_] 60 days after filing pursuant to paragraph (a)(1) of Rule 485

[ ] on (date) pursuant to paragraph (a)(1) of Rule 485

Title of Securities Being Registered: Individual Variable Annuity Contracts.

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<PAGE>

ZENITH ACCUMULATOR

INDIVIDUAL VARIABLE ANNUITY CONTRACTS
ISSUED BY
METROPOLITAN LIFE INSURANCE COMPANY

SUPPLEMENT DATED MAY 1, 2000

TO PROSPECTUS DATED MAY 1, 2000

The Puerto Rico Internal Revenue Code of 1994, as amended (the "PR Code")
provides the following tax treatment for Zenith Accumulator Individual
Variable Annuity Contracts ("the Contracts") issued to Contract Owners in the
Commonwealth of Puerto Rico. The Contracts will not be offered in Puerto Rico
as individual retirement annuities ("IRAs").

1. GENERAL TAX TREATMENT OF ANNUITIES

For Puerto Rico tax purposes, amounts received as an annuity under an
annuity contract are defined as amounts (determined based on a computation
with reference to life expectancy and mortality tables) received in periodical
installments and payable over a period longer than one year from the annuity
starting date.

Annuity payments generally have two elements: a part that constitutes a
return of the annuity's cost (return of capital) and a part that constitutes
income.

From each annuity payment received, taxpayers must include in their gross
income for income tax purposes the lower of (a) the annuity payments received
during the taxable year, or (b) 3% of the aggregate premiums or consideration
paid for the annuity divided by 12 and multiplied by the number of months in
respect to which the installment is paid. The excess over the 3% is excluded
from gross income until the aggregate premiums or consideration is recovered.

Once the annuity's cost has been fully recovered, all of the annuity payment
constitutes taxable income. There is no penalty tax on early distributions
from annuity contracts.

If a payment is received in a lump sum, the annuity's cost is recovered tax
free and the remainder constitutes taxable income.

2. A VARIABLE ANNUITY CONTRACT UNDER NONQUALIFIED PLANS

A variable annuity contract may be purchased by an employer for an employee
under a nonqualified stock bonus, pension, profit sharing or annuity plan. The
employer may purchase the variable annuity contract and transfer it to a trust
created under the terms of the nonqualified plan or can make contributions to
the nonqualified trust in order to provide [a] variable annuity contract[s]
for his employees.

The purchase payments paid or the employer's contributions made to a trust
under a plan during a taxable year of the employer which ends within or with a
taxable year of the trust, shall be included in the gross income of the
employee, if his beneficial interest in the employer's contributions is
nonforfeitable at the time the contribution is made. An employee's beneficial
interest in the contributions is nonforfeitable if there is no contingency
under the plan which may cause the employee to lose his rights in the
contribution.

When the contributions are included in the employee's gross income, they are
considered part of the consideration paid by him for the annuity. The amounts
contributed by the employer constitute consideration paid by the employee
which is taken into account for purposes of determining the taxable amount of
each annuity payment received.

S-1

VA-153-98
<PAGE>

The contributions paid by the employer to or under the nonqualified plan for
providing retirement benefits to the employees under an annuity or insurance
contract are deductible in the taxable year when paid if the employee's rights
to or derived from such employer's contribution are nonforfeitable at the time
the contribution is made.

If an amount is paid on behalf of the employee during the taxable year but
the rights of the employee therein are forfeitable at the time the amount is
paid, no employer deduction is allowable for such amount for any taxable year.

A nonqualified plan may not be subject to certain rules which apply to a
qualified plan such as rules regarding participation, vesting and funding.
Thus, nonqualified annuity plans may be used by an employer to provide
additional benefits to key employees.

Since a nonqualified trust is not tax-exempt, the trust itself will be
taxable on the income of the trust assets.

3. A VARIABLE ANNUITY CONTRACT UNDER A QUALIFIED PLAN

A variable annuity contract may be purchased by an employer for an employee
under a qualified pension, profit-sharing, stock bonus, annuity, or a cash or
deferred arrangement ("CODA") plan established pursuant to Section 1165 of the
PR Code. The employer has two alternatives: (1) purchase the annuity contract
and transfer the same to the trust under the plan, or (2) make contributions
to a trust under a qualified plan for the purpose of providing an annuity
contract for an employee.

Qualified plans must comply with the requirements of Section 1165(a) of the
PR Code which include, among others, certain participation requirements.

The trust created under the qualified plan is exempt from tax on its
investment income.

a. Contributions

The employer is entitled, in determining its net taxable income, to claim a
current income tax deduction for contributions made to the trust created under
the terms of a qualified plan. However, statutory limitations on the
deductibility of contributions made to the trust under a qualified plan limit
the amount of funds that may be contributed each year.

b. Distributions

The amount paid by the employer towards the purchase of the variable annuity
contract or contributed to the trust for providing variable annuity contracts
for the employees is not required to be included in the income of the
employee. However, any amount received or made available to the employee under
the qualified plan is includible in the gross income of the employee in the
taxable year in which received or made available.

In such case, the amount paid or contributed by the employer shall not
constitute consideration paid by the employee for the variable annuity
contract for purposes of determining the amount of annuity payments required
to be included in the employee's gross income. Thus, amounts actually
distributed or made available to any employee under the qualified plan shall
be included in their entirety in the employee's gross income.

Lump-sum proceeds from a qualified plan distributed on account of the
employee's separation from service may receive long term capital gain
treatment and will be taxed at a maximum rate of 20%.

The PR Code does not impose a penalty tax in cases of early (premature)
distributions from a qualified plan.

S-2
<PAGE>

c. Rollover

Deferral of the recognition of income continues upon the receipt of a
distribution by a participant from a qualified plan, if the total distribution
is contributed to another qualified retirement plan or individual retirement
account ("IRA") for the employee's benefit no later than sixty (60) days after
the distribution.

4. A Variable Annuity Contract Under a Keogh Plan

A variable annuity contract may be purchased for purposes of funding a self
employed retirement plan under Section 1165(f) of the PR Code. This plan is
commonly known as a Keogh plan or an HR 10 plan.

This plan permits self-employed individuals and owner-employees to adopt
pension plans, profit sharing plans or annuity plans for themselves and their
employees. A self-employed individual is any individual who carries on a trade
or business as a sole proprietor, an independent contractor or anyone who is
in business for himself or herself.

An owner-employee is any individual who owns all of an unincorporated
business. In the case of a corporation of individuals or a special partnership
under Subchapter K of the PR Code, an owner-employee is a shareholder or a
partner owning more than 10% of the interest in capital or profits.

Similar to a qualified plan, the variable annuity contract may be purchased
and be transferred to a trust, or contributions may be made to the trust for
the purpose of providing an annuity contract for the trust beneficiaries.

a. Contributions

A tax deduction may be claimed for contributions made to the plan. As in
other qualified plans, contributions to the plan are subject to certain
statutory limits. The limit on the deduction depends on the type of plan
selected.

Such contributions and the income generated from them are not taxable to the
owner-employee, his employees or to the self-employed individual until the
funds are distributed or made available to them.

The investment income generated from the contributions made to the plan
which are held in a qualified trust is tax exempt to the trust.

b. Distributions

Distributions made under a qualified self-employed retirement plan will be
subject to the rules described under 3(b) and (c) above.

S-3

<PAGE>

ZENITH ACCUMULATOR

Individual Variable Annuity Contracts
Issued By
The New England Variable Account of
Metropolitan Life Insurance Company
One Madison Avenue
New York, New York 10010
Designated Office:
New England Life Insurance Company
501 Boylston Street
Boston, Massachusetts 02116
(617) 578-2000

This prospectus describes individual variable annuity contracts (the
"Contracts") for individuals and some qualified and non-qualified retirement
plans. You may allocate purchase payments to one or more sub-accounts
investing in these Eligible Funds of New England Zenith Fund ("Zenith Fund"),
Metropolitan Series Fund, Inc. ("Metropolitan Fund") and the Variable
Insurance Products Fund ("VIP").

NEW ENGLAND ZENITH FUND Alger Equity Growth METROPOLITAN SERIES FUND
Series

Capital Growth Series
Back Bay Advisors Money Putnam International
Market Series Stock Portfolio*
Davis Venture Value
Back Bay Advisors Bond Series
Income Series

Harris Oakmark Mid Cap VARIABLE INSURANCE
Salomon Brothers ValueSeries PRODUCTS FUND
Strategic Bond
Opportunities Series Loomis Sayles Small Cap
Series

VIP Overseas Portfolio
Westpeak Growth and
Salomon Brothers U.S. Income Series
Government Series VIP Equity-Income
Morgan Stanley Portfolio
Balanced Series International Magnum
- -------- Equity Series

*Subject to any necessary state insurance department approvals.

DURING THE FOURTH QUARTER OF 2000, WE ANTICIPATE REPLACING THE MORGAN
STANLEY INTERNATIONAL MAGNUM EQUITY SERIES WITH THE PUTNAM INTERNATIONAL STOCK
PORTFOLIO, SUBJECT TO REGULATORY APPROVALS.

In most states you may also allocate purchase payments to a Fixed Account.
Limits apply to transfers to and from the Fixed Account.

We currently are not offering any new Contracts. However, holders of
existing Contracts may continue to make purchase payments.

Please read this prospectus carefully and keep it for reference. This
prospectus contains information that you should know before investing.

You can obtain a Statement of Additional Information ("SAI") about the
Contracts, dated May 1, 2000. The SAI is filed with the Securities and
Exchange Commission and is incorporated by reference in this prospectus. The
SAI Table of Contents is on page A-56 of the prospectus. For a free copy of
the SAI, write or call New England Securities Corporation, 399 Boylston St.,
Boston, Massachusetts 02116, 1-800-356-5015. The Securities and Exchange
Commission maintains a web site that contains the Statement of Additional
Information, material incorporated by reference, and other information
regarding registrants that file electronically with the Securities and
Exchange Commission. The address of the site is http://www.sec.gov.

The Securities and Exchange Commission has not approved these securities or
determined if this prospectus is truthful or complete. Any representation to
the contrary is a criminal offense.

May 1, 2000

THE ELIGIBLE FUND PROSPECTUSES ARE ATTACHED. PLEASE READ THEM AND KEEP THEM
FOR REFERENCE.

THE CONTRACTS HAVE RISKS INCLUDING POSSIBLE LOSS OF PRINCIPAL. THE CONTRACTS
AND ELIGIBLE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY FINANCIAL INSTITUTION AND ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
GOVERNMENT AGENCY.
<PAGE>

TABLE OF CONTENTS
OF
THE PROSPECTUS

<TABLE>
<CAPTION>
Page
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<S> <C>
GLOSSARY OF SPECIAL TERMS USED IN THIS PROSPECTUS......................... A-4
HIGHLIGHTS................................................................ A-5
EXPENSE TABLE............................................................. A-7
HOW THE CONTRACT WORKS.................................................... A-12
THE COMPANY............................................................... A-13
THE VARIABLE ACCOUNT...................................................... A-13
INVESTMENTS OF THE VARIABLE ACCOUNT....................................... A-13
New England Zenith Fund.................................................. A-14
Metropolitan Series Fund................................................. A-15
Variable Insurance Products Fund......................................... A-15
Investment Advice........................................................ A-15
Substitution of Investments.............................................. A-17
GUARANTEED OPTION......................................................... A-17
THE CONTRACTS............................................................. A-17
Purchase Payments........................................................ A-17
Allocation of Purchase Payments.......................................... A-18
Contract Value and Accumulation Unit Value............................... A-18
Payment on Death Prior to Annuitization.................................. A-19
Transfer Privilege....................................................... A-21
Dollar Cost Averaging.................................................... A-21
Surrenders............................................................... A-22
Systematic Withdrawals................................................... A-22
Loan Provision for Certain Tax Benefited Retirement Plans................ A-23
Disability Benefit Rider................................................. A-25
Suspension of Payments................................................... A-25
Ownership Rights......................................................... A-25
Requests and Elections................................................... A-26
Ten Day Right to Review.................................................. A-26
ADMINISTRATION CHARGES, CONTINGENT DEFERRED SALES CHARGE AND OTHER
DEDUCTIONS............................................................... A-27
Administration Charges................................................... A-27
Mortality and Expense Risk Charge........................................ A-27
Contingent Deferred Sales Charge......................................... A-28
Premium Tax Charges...................................................... A-29
Other Expenses........................................................... A-30
Charges Under Contracts Purchased by Exchanging a Fund I or Preference
Contract................................................................ A-30
ANNUITY PAYMENTS.......................................................... A-30
Election of Annuity...................................................... A-30
Annuity Options.......................................................... A-31
AMOUNT OF VARIABLE ANNUITY PAYMENTS....................................... A-32
Minimum Annuity Payments................................................. A-33
Proof of Age, Sex and Survival........................................... A-33
RETIREMENT PLANS OFFERING FEDERAL TAX BENEFITS............................ A-33
FEDERAL INCOME TAX STATUS................................................. A-34
Tax Status of the Company and the Variable Account....................... A-34
Taxation of the Contracts................................................ A-34
Special Rules for Annuities Purchased for Annuitants Under Retirement
Plans Qualifying for Tax Benefited Treatment............................ A-35
Special Rules for Annuities Used by Individuals or with Plans and Trusts
Not Qualifying Under the Code for Tax Benefited Treatment............... A-38
Tax Withholding.......................................................... A-39
</TABLE>

A-2
<PAGE>

<TABLE>
<CAPTION>
Page
----
<S> <C>
VOTING RIGHTS.............................................................. A-40
DISTRIBUTION OF CONTRACTS.................................................. A-40
THE FIXED ACCOUNT.......................................................... A-41
General Description of the Fixed Account.................................. A-41
Contract Value and Fixed Account Transactions............................. A-41
FINANCIAL STATEMENTS....................................................... A-42
INVESTMENT PERFORMANCE INFORMATION......................................... A-42
ACCUMULATION UNIT VALUES................................................... A-45
APPENDIX A: CONSUMER TIPS.................................................. A-48
APPENDIX B: PREMIUM TAX.................................................... A-49
APPENDIX C: AVERAGE ANNUAL TOTAL RETURN.................................... A-50
</TABLE>

A-3
<PAGE>

GLOSSARY OF SPECIAL TERMS USED IN THIS PROSPECTUS

We have tried to make this prospectus as understandable for you as possible.
However, in explaining how the Contract works, we use certain terms that have
special meanings. These terms are defined below:

ACCOUNT. A sub-account of the Variable Account or the Fixed Account.

ACCUMULATION UNIT. Used to calculate the Contract Value before
annuitization.

ANNUITANT. The person on whose life the Contract is issued.

ANNUITIZATION. Application of proceeds under the Contract to an annuity
option on the Maturity Date or upon an earlier surrender of the Contract.

ANNUITY UNIT. Used to calculate the dollar amount of annuity payments.

BENEFICIARY. The person designated to receive any benefits under a Contract
if a Contract Owner (or Annuitant, if the Contract is not owned by an
individual) dies before the Maturity Date.

CONTRACT YEAR. A twelve month period beginning with the date shown on your
Contract and with each Contract anniversary thereafter.

DEATH PROCEEDS (PRIOR TO ANNUITIZATION). The amount we pay prior to
annuitization, on receipt of due proof of death of a Contract Owner (or of the
annuitant if the Contract is not owned by an individual) and election of
payment.

DESIGNATED OFFICE. Our Designated Office for receipt of purchase payments,
loan repayments, requests and elections, and communications regarding death of
the Contract Owner (or Annuitant) is New England Life Insurance Company,
located at 501 Boylston Street, Boston, Massachusetts 02116, (800) 435-4117.

FIXED ACCOUNT. A part of the Company's general account to which you can
allocate net purchase payments under most Contracts. The Fixed Account
provides guarantees of principal and interest.

MATURITY DATE. The date on which annuity payments begin, as stated in the
application or as later deferred.

NET PURCHASE PAYMENT. A purchase payment, in which the premium tax and any
premium for the disability benefit rider, if applicable, has been deducted
before allocation to the accounts.

PAYEE. Any person or entity entitled to receive payment under the Contract.
The term includes (i) an Annuitant, (ii) a Beneficiary or contingent
Beneficiary who becomes entitled to death proceeds, and (iii) on surrender or
partial surrender of the Contract, the Contract Owner.

VARIABLE ACCOUNT. A separate investment account of the Company. The Variable
Account is divided into sub-accounts; each invests in shares of one Eligible
Fund.

VARIABLE ANNUITY. An annuity providing for income payments varying in amount
to reflect the investment experience of a separate investment account.

A-4
<PAGE>

HIGHLIGHTS

TAX DEFERRED VARIABLE ANNUITIES:

Earnings under variable annuities are usually not taxed until paid out. This
treatment is intended to encourage you to save for retirement.

THE CONTRACTS:

The Zenith Accumulator provides for variable annuity payments that begin at
the Maturity Date, or earlier if you choose to surrender and annuitize.
Variable annuity payments fluctuate with the investment results of the
Eligible Fund(s). (See "Annuity Payments.") We offer other variable annuities
with different fees and charges, that invest in the Eligible Funds. Your
registered representative has additional information.

PURCHASE PAYMENTS:

Currently, the initial minimum purchase payment is $5,000 and the minimum
subsequent purchase payment is usually $25. The subsequent purchase payment
may be higher in certain cases. We may limit the purchase payments you can
make.

OWNERSHIP:

A Purchaser may be an individual, employer, trust, custodian or any entity
specified in an eligible employee benefit plan. If the Contract is issued
under Section 408(b) or, generally, under Section 403(b), the Contract Owner
must be the Annuitant. Subject to state approval, certain retirement plans
qualified under the Internal Revenue Code ("the Code") may purchase the
Contract.

FOR ANY TAX QUALIFIED ACCOUNT E.G. 401(K) PLAN OR IRA, THE TAX DEFERRED
ACCRUAL FEATURE IS PROVIDED BY THE TAX QUALIFIED RETIREMENT PLAN. THEREFORE,
THERE SHOULD BE REASONS OTHER THAN TAX DEFERRAL FOR ACQUIRING AN ANNUITY
CONTRACT WITHIN A QUALIFIED PLAN.

For contract transactions, we rely on instructions from Contract Owners,
whether a trustee or custodian of an eligible retirement plan or an individual
owner.

INVESTMENT OPTIONS:

You may allocate net purchase payments to the sub-accounts or to the Fixed
Account (if available under your Contract). You can allocate your contract
value to a maximum of ten Accounts (including the Fixed Account) at any time.

You can change your net purchase payment allocation. We believe that under
current tax law you can transfer Contract Value between Accounts without
federal income tax.

Currently we allow 12 transfers free of charge per Contract Year prior to
annuitization. Additional transfers are $10 each. After variable annuity
payments begin, you may make one transfer per year without our consent. The
minimum transfer amount is currently $25 (or, if less, the amount of Contract
Value held in the sub-account from which the transfer is made). Special limits
apply to transfers of Contract Value to and from the Fixed Account. See "The
Fixed Account" for a description of transfers involving that account.

CHARGES:

We apply the following charges to your Contract:

. premium tax charge, in some states

. mortality and expense risk charge equal to an annual rate of .95% of the
Variable Account's daily net assets

. administration asset charge equal to an annual rate of .40% of the
Variable Account's daily net assets

A-5
<PAGE>

. annual contract administration charge of $30

. a contingent deferred sales charge equal to a maximum of 6.5% of Contract
Value, on certain full and partial surrenders and certain annuitization
transactions.

Certain waivers or reductions may apply. (See "Administration Charges,
Contingent Deferred Sales Charge and Other Deductions.")

The Eligible funds are subject to management fees and operating expenses.

We do not deduct a sales charge from purchase payments.

TEN DAY RIGHT TO REVIEW:

After you receive the Contract, you have ten days (more in some states) to
return it to us or our agent for cancellation. We will return all purchase
payments made (or, in certain states, Contract Value plus any premium taxes
deducted from purchase payments.)

PAYMENT ON DEATH:

If a Contract Owner (or the Annuitant, if the Contract is not owned by an
individual) dies before annuitization, the Beneficiary receives a death
benefit. Death Proceeds equal the greater of purchase payments adjusted for
any partial surrenders and the current Contract Value. Each is reduced by any
outstanding loan plus accrued interest. (See "Payment on Death Prior to
Annuitization.")

Death Proceeds are taxable and generally are included in the income of the
recipient as follows:

. If received under an annuity payment option, they are taxed in the same
manner as annuity payments.

. If distributed in a lump sum, they are taxed in the same manner as a full
surrender.

SURRENDERS:

Before annuitization you can send us a written request to surrender all or
part of your Contract Value. After a partial surrender, the remaining Contract
Value must be at least $500. (Special rules apply if the Contract has a loan.)
Federal tax laws penalize and may prohibit certain premature distributions
from the Contract. (See "Federal Income Tax Status.")

A Contingent Deferred Sales Charge will apply to certain full and partial
surrenders and certain annuitization transactions. On full surrender, a pro
rata portion of the annual administration contract charge will also be
deducted.

In any Contract Year, you may surrender an amount without our deducting
Contingent Deferred Sales Charge (the "free withdrawal amount"). The free
withdrawal amount is 10% of Contract Value on the date of the Surrender. (See
"Surrenders" and "Contingent Deferred Sales Charge.")
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A-6
<PAGE>

EXPENSE TABLE

The purpose of the table and the examples below is to explain the various
costs and expenses you will bear, directly or indirectly, as a Contract Owner.
These are deducted from purchase payments, the Variable Account, or the
Eligible Funds. In the examples following the table, we assume that you
allocated your entire purchase payment to one sub-account, with no transfers.

VARIABLE ACCOUNT

<TABLE>
<S> <C>
CONTRACT OWNER TRANSACTION EXPENSES(1)
Sales Charge Imposed on Purchases (as a percentage
of Contract Value)................................. 0%
Maximum Contingent Deferred Sales Charge(2) (as a
percentage of Contract Value)...................... 6.5%
Transfer Fee (per Contract Year)(3)................. $0 on the first twelve
$10 each thereafter
ANNUAL CONTRACT FEE
Administration Contract Charge (per Contract)(4) ... $30
SEPARATE ACCOUNT ANNUAL EXPENSES(5)
(as percentage of average net assets)
Mortality and Expense Risk Charge................... .95%
Administration Asset Charge......................... .40%
----
Total Separate Account Annual Expenses.......... 1.35%
</TABLE>

NEW ENGLAND ZENITH FUND

OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 1999
(AS A PERCENTAGE OF AVERAGE NET ASSETS AFTER CURRENT EXPENSE CAP OR EXPENSE
DEFERRAL)(6)

<TABLE>
<CAPTION>
SALOMON
BACK BAY BACK BAY BROTHERS SALOMON
ADVISORS ADVISORS STRATEGIC BROTHERS BACK BAY
MONEY BOND BOND U.S. ADVISORS ALGER EQUITY CAPITAL
MARKET INCOME OPPORTUNITIES GOVERNMENT MANAGED BALANCED GROWTH GROWTH
SERIES SERIES SERIES SERIES SERIES(7) SERIES SERIES SERIES
-------- -------- ------------- ---------- --------- -------- ------------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Management Fee.......... .35% .40% .65% .55% .50% .70% .75% .62%
Other Expenses.......... .05% .08% .16% .15% .08% .07% .05% .04%
--- --- --- --- --- --- --- ---
Total Series Operating
Expenses.............. .40% .48% .81% .70% .58% .77% .80% .66%
</TABLE>

<TABLE>
<CAPTION>
HARRIS LOOMIS
DAVIS OAKMARK SAYLES WESTPEAK WESTPEAK MORGAN STANLEY
VENTURE MID CAP SMALL GROWTH STOCK INTERNATIONAL
VALUE VALUE CAP AND INCOME INDEX MAGNUM EQUITY
SERIES SERIES SERIES SERIES SERIES(7) SERIES
------- ------- ------ ---------- --------- --------------
<S> <C> <C> <C> <C> <C> <C>
Management
Fee....... .75% .75% .90% .68% .25% .90%
Other Ex-
penses.... .06% .13% .10% .06% .10% .40%
--- --- ---- --- --- ----
Total Se-
ries Op-
erating
Expenses. .81% .88% 1.00% .74% .35% 1.30%
</TABLE>
- --------

A-7
<PAGE>

EXAMPLE (NOTE: The examples below are hypothetical. Although we base them on
the expenses shown in the expense table above, the examples are not
representations of past or future performance or expenses. Actual performance
and/or expenses may be more or less than shown.(8)) For purchase payments
allocated to each of the Series indicated:

You would pay the following direct and
indirect expenses on a $1,000 purchase
payment assuming 1) 5% annual return on the
underlying Series and 2) that a contingent
deferred sales charge would apply at the end
of each time period because you either
surrender your Contract or elect to
annuitize under a non-life contingency
option:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Back Bay Advisors Money Market............ $78.78 $111.38 $145.42 $224.90
Back Bay Advisors Bond Income............. 79.53 113.69 149.34 233.24
Salomon Brothers Strategic Bond Opportuni-
ties..................................... 82.65 123.17 165.35 266.84
Salomon Brothers U.S. Government.......... 81.61 120.02 160.05 255.77
Back Bay Advisors Managed................. 80.48 116.57 154.23 243.55
Balanced.................................. 82.28 122.02 163.43 262.84
Alger Equity Growth....................... 82.56 122.87 164.87 265.84
Capital Growth............................ 81.23 118.87 158.11 251.72
Davis Venture Value....................... 82.65 123.17 165.35 266.84
Harris Oakmark Mid Cap Value.............. 83.31 125.17 168.72 273.82
Loomis Sayles Small Cap................... 84.44 128.57 174.45 285.65
Westpeak Growth and Income................ 81.98 121.16 161.98 259.81
Westpeak Stock Index...................... 78.31 109.93 142.96 219.66
Morgan Stanley International Equity....... 87.25 137.06 188.63 314.56

You would pay the following direct and
indirect expenses on a $1,000 purchase
payment assuming 1) 5% annual return on the
underlying Series and 2) that no contingent
deferred sales charge would apply at the end
of each time period because you either do
not surrender your Contract or you elect to
annuitize under a variable life contingency
option(9):

<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Back Bay Advisors Money Market............ $18.46 $ 57.12 $ 98.22 $212.68
Back Bay Advisors Bond Income............. 19.26 59.56 102.33 221.11
Salomon Brothers Strategic Bond Opportuni-
ties..................................... 22.58 69.57 119.11 255.11
Salomon Brothers U.S. Government.......... 21.47 66.24 113.55 243.91
Back Bay Advisors Managed................. 20.27 62.60 107.45 231.54
Balanced.................................. 22.18 68.36 117.10 251.06
Alger Equity Growth....................... 22.48 69.26 118.61 254.10
Capital Growth............................ 21.07 65.03 111.52 239.81
Davis Venture Value....................... 22.58 69.57 119.11 255.11
Harris Oakmark Mid Cap Value.............. 23.28 71.68 122.64 262.17
Loomis Sayles Small Cap................... 24.48 75.28 128.65 274.14
Westpeak Growth and Income................ 21.87 67.45 115.58 248.00
Westpeak Stock Index...................... 17.96 55.59 95.64 207.38
Morgan Stanley International Equity....... 27.47 84.24 143.51 303.39
</TABLE>

A-8
<PAGE>

METROPOLITAN SERIES FUND, INC.

OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 1999

(AS A PERCENTAGE OF AVERAGE NET ASSETS)(10)

<TABLE>
<CAPTION>
PUTNAM
INTERNATIONAL
STOCK
PORTFOLIO*
-------------
<S> <C>
Management Fee.................................................... .90%
Other Expenses.................................................... .22%
----
Total Portfolio Operating Expenses.............................. 1.12%
</TABLE>

You would pay the following direct and indi-
rect expenses on a $1,000 purchase payment
assuming 1) 5% annual return on the under-
lying Portfolio and 2) that a contingent de-
ferred sales charge would apply at the end
of each time period because you either sur-
render your Contract or elect to annuitize
under a non-life contingency option:

1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Putnam International Stock Portfolio....... $85.57 $131.97 $180.15 $297.33

You would pay the following direct and
indirect expenses on a $1,000 purchase
payment assuming 1) 5% annual return on the
underlying Portfolio and 2) that no
contingent deferred sales charge would apply
at the end of each time period because you
either do not surrender your Contract or you
elect to annuitize under a variable life
contingency option(9):

<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Putnam International Stock Portfolio....... $25.68 $ 78.87 $134.62 $285.96
</TABLE>

- --------

*Availability of this Portfolio is subject to any necessary state insurance
department approvals.

VARIABLE INSURANCE PRODUCTS FUND

OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 1999

(AS A PERCENTAGE OF AVERAGE NET ASSETS PRIOR TO EXPENSE REDUCTIONS)(11)

<TABLE>
<CAPTION>
VIP
VIP EQUITY-
OVERSEAS INCOME
PORTFOLIO PORTFOLIO
--------- ---------
<S> <C> <C>
Management Fee.............................................. .73% .48%
Other Expenses.............................................. .18% .09%
--- ---
Total Portfolio Operating Expenses........................ .91% .57%
</TABLE>

A-9
<PAGE>

performance and/or expenses may be more or less than shown.(8)) For purchase
payments allocated to each of the Portfolios indicated

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
VIP Overseas Portfolio..................... $83.59 $126.02 $170.15 $276.80
VIP Equity-Income Portfolio................ 80.39 116.29 153.74 242.53

<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
VIP Overseas Portfolio..................... $23.58 $72.58 $124.14 $265.18
VIP Equity-Income Portfolio................ 20.17 62.30 106.94 230.51
</TABLE>

- --------
NOTES:
(1) Premium tax charges are not shown. They range from 0% (in most states)
to 3.5% of Contract Value (or if applicable purchase payments).
(2) We calculate the applicable Contingent Deferred Sales Charge as a
percentage of Contract Value. The maximum possible charge, as a
percentage of Contract Value, occurs in the first Contract Year and
reduces after each Contract Year to 0% by the eleventh Contract Year.
(3) We reserve the right to impose a charge of $10 on each transfer in
excess of four per year.
(4) We do not impose this charge after annuitization.
(5) We do not impose these charges on the Fixed Account or after
annuitization if annuity payments are made on a fixed basis.

(6) Without the applicable expense cap or expense deferral arrangement
(described below), Total Series Operating Expenses for the year ended
December 31, 1999 would have been: Salomon Brothers U.S. Government
Series, .72%. In 1999, the management fee for the Loomis Sayles Small
Cap Series was 1.00%, and Total Series Operating Expenses were capped at
1.00%. Without the expense cap, Total Series Operating Expenses would
have been 1.10%.

A-10
<PAGE>

(7) The Westpeak Stock Index Series and the Back Bay Advisors Managed Series
are not Eligible Funds for Contracts purchased after May 1, 1995.

(8) In these examples, the average Administration Contract Charge of .07%
has been used. (See (4), above.)
(9) The same would apply if you elect to annuitize under a fixed life
contingency option unless your Contract has been in effect less than
five years, in which case the expenses shown in the first three columns
of the preceding example would apply. (See "Contingent Deferred Sales
Charge.")

(10) Metropolitan Life Insurance Company ("MetLife") is the investment
adviser for the Portfolios of the Metropolitan Fund. The Portfolios pay
investment management fees to MetLife and also bear other expenses.

(11) Total annual expenses do not reflect certain expense reductions due to
directed brokerage arrangements and custodian interest credits. If we
included these reductions, total annual expenses would have been .56%
for VIP Equity-Income Portfolio and .87% for VIP Overseas Portfolio.

The investment adviser for VIP is Fidelity Management & Research Company
("FMR").

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

Condensed financial information containing the accumulation unit value
history appears at the end of this prospectus (p.A-45)

A-11
<PAGE>

How the Contract Works

PURCHASE PAYMENT CONTRACT VALUE DAILY DEDUCTION FROM
VARIABLE ACCOUNT
. You can make a . We allocate . We deduct a
one-time payments to your Mortality and
investment or choice, within Expense risk
establish an limits, of charge of 0.95% on
ongoing investment Eligible Funds an annual basis
program. and/or the Fixed from the Contract
Account. Value daily.

. The Contract Value . We deduct an
reflects purchase Administration
payments, Asset Charge of
investment 0.40% on an annual
experience, basis from the
interest payments, Contract Value
partial daily.
surrenders, loans
and Contract
charges.

CHARGES FROM PAYMENT

. Premium tax charge
may apply.

. The Contract Value . Investment
invested in the advisory fees are
Eligible Funds is deducted from the
not guaranteed. Eligible Fund
. Premium for assets daily.
disability benefit
rider, if elected.

. Earnings are
accumulated free
of any current
income taxes (see
page A-34).

ANNUAL CONTRACT FEE

. You may change the . We deduct a $30
ADDITIONAL PAYMENTS allocation of Administration
future payments, Contract Charge
within limits, at from the Contract
. Any time (subject any time. Value on each
to Company anniversary while
limits). Contract is in-
force, other than
under an annuity
payment option. We
deduct a pro rata
portion on full
surrender and at
annuitization.

. Prior to
annuitization, you
. Minimum $25. may transfer
Contract Value
among accounts,
within limits, up
to twelve times
per Contract Year
without charge
(special limits
apply to transfers
of Contract Value
to and from the
Fixed Account).

LOANS

. Are available to
participants of
certain tax
qualified pension
plans (see page A-
23).

SURRENDER CHARGE

. Allocations of
payments and
transfers of . Consists of
Contract Value Contingent
must comply with Deferred Sales
the rule that Charge (see page
Contract Value may A-28).
be allocated among
no more than ten
accounts,
including the
Fixed Account, at
any time.

SURRENDERS
. You can surrender
up to 10% of
Contract Value
each year without
incurring
surrender charges,
subject to any
applicable tax law
restrictions.

PREMIUM TAX CHARGE
. Where applicable,
is deducted from
purchase payments
(currently in
South Dakota) or
from Contract
Value when annuity
payments commence.

. Surrenders are
taxable to the
extent of gain.

RETIREMENT BENEFITS
. Lifetime income
options.

. Prior to age 59
1/2 a 10% penalty
tax may apply.

. Fixed and/or
variable payout
options.

ADDITIONAL BENEFITS

. You pay no taxes
on your investment
as long as it
remains in the
Contract.

. Premium tax charge
may apply.

DEATH PROCEEDS
. You can surrender
. Guaranteed not to your Contract at
be less than your any time for its
total contribution Contract Value,
to your Contract less any
net of any prior applicable
surrenders and Contingent
outstanding loans. Deferred Sales
Charge (subject to
. Death proceeds any applicable tax
pass to the law restrictions).
beneficiary . If the Contract
without probate. contains the
disability benefit
rider and the
Annuitant becomes
totally disabled,
we provide monthly
benefits.

A-12
<PAGE>

THE COMPANY

The Company is a life insurance company and wholly-owned subsidiary of
MetLife, Inc., a publicly traded company, whose principal office is at One
Madison Avenue, New York, N.Y. 10010. The Company was organized in 1868 under
the laws of the State of New York and has engaged in the life insurance
business under its present name since 1868. It operates as a life insurance
company in all 50 states, the District of Columbia, Puerto Rico and all
provinces of Canada. The Company has approximately $420 billion of assets
under management as of December 31, 1999 on a pro forma basis, including the
acquisition of GenAmerica Corp.

New England Life Insurance Company ("NELICO"), a subsidiary of the Company,
provides administrative services for the Contracts and the Variable Account
pursuant to an administrative services agreement with the Company. These
administrative services include maintenance of Contract Owner records and
accounting, valuation, regulatory and reporting services. NELICO, located at
501 Boylston Street, Boston, Massachusetts 02116, is the Company's Designated
Office for receipt of Purchase Payments, loan repayments, requests and
elections, and communications regarding death of the Annuitant, as further
described below.

THE VARIABLE ACCOUNT

The Variable Account was established as a separate investment account on
July 15, 1987, and is registered as a unit investment trust under the
Investment Company Act of 1940. The Variable Account meets the definition of a
"separate account" under Federal securities laws.

Applicable state insurance law provides that the assets in the Variable
Account equal to the reserves and other contract liabilities of the Variable
Account shall not be chargeable with liabilities arising out of any other
business the Company may conduct. The Company believes this means that the
assets of the Variable Account equal to its reserves and other contract
liabilities are not available to meet the claims of the Company's general
creditors and may only be used to support the Contract Values under the
Contracts. The income and realized and unrealized capital gains or losses of
the Variable Account are credited to or charged against the Variable Account
without regard to other income, gains or losses of the Company. All
obligations arising under the Contracts are, however, general corporate
obligations of the Company.

Purchase payments are allocated within the Variable Account to one or more
of the sub-accounts as you elect. The value of Accumulation Units credited to
your Contract and the amount of the variable annuity payments depend on the
investment experience of the Eligible Fund(s) that you select. The Company
does not guarantee the investment performance of the Variable Account. Thus,
you bear the full investment risk for all amounts contributed to the Variable
Account.

INVESTMENTS OF THE VARIABLE ACCOUNT

Purchase payments applied to the Variable Account will be invested in one or
more of the Eligible Funds listed below, at net asset value without deduction
of any sales charge, in accordance with the selection you make in your
application. You may change your selection of Eligible Funds for future
purchase payments at any time without charge. (See "Requests and Elections.")
You also may transfer previously invested amounts among the Eligible Funds,
subject to certain conditions. (See "Transfer Privilege.") Your Contract Value
may be distributed among no more than 10 accounts (including the Fixed
Account) at any time. The Company reserves the right to add or remove Eligible
Funds from time to time as investments for the Variable Account. See
"Substitution of Investments."

The investment objectives and policies of certain Eligible Funds are similar
to the investment objectives and policies of other funds that may be managed
by the same subadviser. The investment results of the Eligible Funds, however,
may be higher or lower than the results of such other funds. There can be no
assurance, and no representation is made, that the investment results of any
of the Eligible Funds will be comparable to the investment results of any
other fund, even if the other fund has the same subadviser.

A-13
<PAGE>

NEW ENGLAND ZENITH FUND: Currently, there are twelve Series of the New England
Zenith Fund that are Eligible Funds under the Contracts offered by this
prospectus. Two additional Series, the Back Bay Advisors Managed Series and
the Westpeak Stock Index Series, described below, are Eligible Funds only for
Contracts issued before May 1, 1995.

BACK BAY ADVISORS MONEY MARKET SERIES

The Back Bay Advisors Money Market Series investment objective is the
highest possible level of current income consistent with preservation of
capital. An investment in the Money Market Series is not insured or guaranteed
by the Federal Deposit Insurance Corporation or any other government agency.
Although the Money Market Series seeks to maintain a net asset value of $100
per share, it is possible to lose money by investing in the Money Market
Series.

BACK BAY ADVISORS BOND INCOME SERIES

The Back Bay Advisors Bond Income Series investment objective is a high
level of current income consistent with protection of capital.

SALOMON BROTHERS STRATEGIC BOND OPPORTUNITIES SERIES

The Salomon Brothers Strategic Bond Opportunities Series investment
objective is a high level of total return consistent with preservation of
capital.

SALOMON BROTHERS U.S. GOVERNMENT SERIES

The Salomon Brothers U.S. Government Series investment objective is a high
level of current income consistent with preservation of capital and
maintenance of liquidity.

BACK BAY ADVISORS MANAGED SERIES

The Back Bay Advisors Managed Series investment objective is a favorable
total return through investment in a diversified portfolio.

BALANCED SERIES (FORMERLY LOOMIS SAYLES BALANCED SERIES)

The Balanced Series investment objective is long-term total return from a
combination of capital appreciation and current income.

ALGER EQUITY GROWTH SERIES

The Alger Equity Growth Series investment objective is long-term capital
appreciation.

CAPITAL GROWTH SERIES

The Capital Growth Series investment objective is the long-term growth of
capital through investment primarily in equity securities of companies whose
earnings are expected to grow at a faster rate than the United States economy.

DAVIS VENTURE VALUE SERIES

The Davis Venture Value Series investment objective is growth of capital.

HARRIS OAKMARK MID CAP VALUE SERIES (FORMERLY GOLDMAN SACHS MIDCAP VALUE
SERIES)

The Harris Oakmark Mid Cap Value Series investment objective is long-term
capital appreciation.

LOOMIS SAYLES SMALL CAP SERIES

The Loomis Sayles Small Cap Series investment objective is long-term capital
growth from investments in common stocks or their equivalents.

A-14
<PAGE>

WESTPEAK GROWTH AND INCOME SERIES

The Westpeak Growth and Income Series investment objective is long-term
total return through investment in equity securities.

WESTPEAK STOCK INDEX SERIES

The Westpeak Stock Index Series investment objective is investment results
that correspond to the composite price and yield performance of the S&P 500
Index.

MORGAN STANLEY INTERNATIONAL MAGNUM EQUITY SERIES

The Morgan Stanley International Magnum Equity Series investment objective
is long-term capital appreciation through investment primarily in
international equity securities. In addition to the risks associated with
equity securities generally, foreign securities present additional risks.

WE INTEND TO SUBSTITUTE SHARES OF THE METROPOLITAN PUTNAM INTERNATIONAL
STOCK PORTFOLIO FOR SHARES OF THIS ELIGIBLE FUND ONCE WE RECEIVE NECESSARY
REGULATORY APPROVALS (CURRENTLY ANTICIPATED DURING THE FOURTH QUARTER OF
2000).

METROPOLITAN SERIES FUND, INC.: Currently, there is one Portfolio of the
Metropolitan Fund that is an Eligible Fund under the Contracts.

PUTNAM INTERNATIONAL STOCK PORTFOLIO*

The Putnam International Stock Portfolio's investment objective is long-term
growth of capital.

VARIABLE INSURANCE PRODUCTS FUND: Currently, there are two Portfolios of VIP
that are Eligible Funds under the Contracts.

VIP OVERSEAS PORTFOLIO

The VIP Overseas Portfolio seeks long-term growth of capital. Foreign
markets, particularly emerging markets, can be more volatile than the U.S.
market due to increased risks of adverse issuer, political, regulatory, market
or economic developments and can perform differently than the U.S. market.

VIP EQUITY-INCOME PORTFOLIO

The VIP Equity-Income Portfolio seeks reasonable income. The fund will also
consider the potential for capital appreciation. The fund seeks a yield which
exceeds the composite yield on the securities comprising the S&P 500.

- --------

*Availability of this Portfolio is subject to any necessary state insurance
department approvals.

INVESTMENT ADVICE

The Capital Growth Series receives investment advice from Capital Growth
Management Limited Partnership ("CGM"), an affiliate of NELICO. NEIM, which is
an indirect, wholly-owned subsidiary of NELICO, is the investment adviser for
the remaining series of the Zenith Fund. The chart below shows the sub-adviser
for each series of the Zenith Fund. NEIM, CGM and each sub-adviser is
registered with the SEC as an investment adviser under the Investment Advisers
Act of 1940.

A-15
<PAGE>

<TABLE>
<CAPTION>
Series Sub-Adviser
- ------ -----------
<S> <C>
Back Bay Advisors Money Market Series Back Bay Advisors, L.P.*
Back Bay Advisors Bond Income Series Back Bay Advisors, L.P.*
Salomon Brothers Strategic Bond Salomon Brothers Asset Management Inc***
Opportunities Series Salomon Brothers Asset Management Inc
Salomon Brothers U.S. Government Back Bay Advisors, L.P.*
Series Wellington Management Company, LLP.
Back Bay Advisors Managed Series Fred Alger Management, Inc.
Balanced Series Davis Selected Advisers, L.P.**
Alger Equity Growth Series Harris Associates L.P.*
Davis Venture Value Series Loomis, Sayles & Company, L.P.*
Harris Oakmark Mid Cap Value Series Westpeak Investment Advisors, L.P.*
Loomis Sayles Small Cap Series Westpeak Investment Advisors, L.P.*
Westpeak Growth and Income Series Morgan Stanley Dean Witter Investment
Westpeak Stock Index Series Management Inc.
Morgan Stanley International Equity
Series
</TABLE>
- --------
* An affiliate of NELICO
** Davis Selected may also delegate any of its responsibilities to Davis
Selected Advisers-NY, Inc., a wholly-owned subsidiary of Davis Selected.

*** In connection with Salomon Brothers Asset Management's service as sub-
adviser to the Strategic Bond Opportunities Series, Salomon Brothers'
London-based affiliate, Salomon Brothers Asset Management Limited,
provides certain sub-advisory services to Salomon Brothers Asset
Management Inc.

In the case of the Back Bay Advisors Money Market Series, Back Bay Advisors
Bond Income Series, Back Bay Advisors Managed Series, Westpeak Stock Index
Series, Westpeak Growth and Income Series, Harris Oakmark Mid Cap Value
Series, and Loomis Sayles Small Cap Series, New England Investment Management
became the adviser on May 1, 1995. The Harris Oakmark Mid Cap Value Series'
subadviser was Loomis, Sayles until May 1, 1998, when Goldman Sachs Asset
Management, a separate operating division of Goldman Sachs & Co., became the
subadviser. Harris Associates became the sub-adviser on May 1, 2000. The
Balanced Series' sub-adviser was Loomis, Sayles until May 1, 2000, when
Wellington Management Company became the subadviser.

More complete information on each Series of the Zenith Fund is contained in
the attached New England Zenith Fund prospectus, which you should read
carefully before investing, as well as in the New England Zenith Fund's
Statement of Additional Information, which may be obtained free of charge by
writing to New England Securities, 399 Boylston St., Boston, Massachusetts,
02116 or telephoning 1-800-356-5015.

MetLife is the investment adviser for the Metropolitan Series Fund
Portfolio. Putnam Investment Management, Inc. is the sub-investment manager of
the Putnam International Stock Portfolio. For more information regarding the
investment adviser and sub-investment manager of the Metropolitan Series Fund
Portfolio, see the Metropolitan Series Fund prospectus attached at the end of
this prospectus and its Statement of Additional Information.

The VIP Overseas Portfolio and the VIP Equity-Income Portfolio receive
investment advice from Fidelity Management & Research Company. More complete
information on the VIP Equity-Income and VIP Overseas Portfolios of the
Variable Insurance Products Fund is contained in the attached prospectus of
that Fund, which you should read carefully before investing, as well as in the
Variable Insurance Products Fund's Statement of Additional Information, which
may be obtained free of charge by writing to Fidelity Distributors
Corporation, 82 Devonshire Street, Boston, Massachusetts, 02109 or telephoning
1-800-356-5015.

You can also get information about the Zenith Fund, Metropolitan Fund or the
VIP Fund (including a copy of the SAI) by accessing the Securities and
Exchange Commission's website at http://www.sec.gov.

A-16
<PAGE>

attributable to the Contracts and certain other variable insurance products
that we and our affiliates issue. Some advisers and/or affiliates may pay us
more than others. New England Securities may also receive brokerage
commissions on securities transactions initiated by an investment adviser.

SUBSTITUTION OF INVESTMENTS

If investment in the Eligible Funds or a particular Series or Portfolio is
no longer possible or in the judgment of the Company becomes inappropriate for
the purposes of the Contract or for any other reason in our sole discretion,
the Company may substitute another Eligible Fund or Funds without your
consent. The substituted fund may have different fees and expenses.
Substitution may be made with respect to existing investments or the
investment of future purchase payments, or both. However, no such substitution
will be made without any necessary approval of the Securities and Exchange
Commission. Furthermore, we may close sub-accounts to allocation of purchase
payments or Contract Value, or both, at any time in our sole discretion.

GUARANTEED OPTION

Net purchase payments may also be allocated to the Fixed Account option in
states that have approved the Fixed Account option. The Fixed Account is a
part of the Company's general account and provides guarantees of principal and
interest. (See "The Fixed Account" for more information.)

THE CONTRACTS

The Contracts provide that purchase payments will be invested by the Company
in the Eligible Fund(s) you select and that, after annuitization, the Company
will make variable annuity payments on a monthly basis, unless you elect
otherwise. You assume the risk of investment gain or loss in that the value of
your Contract before annuitization and, in the case of a variable payment
option, the annuity payments after annuitization will vary with the investment
performance of those Eligible Funds in which your Contract is invested.

PURCHASE PAYMENTS

Under current rules, the minimum initial purchase payment for flexible
payment Contracts issued in connection with tax-benefited retirement plans
other than individual retirement accounts under Section 408(a) of the Code or
individual retirement annuities under Section 408(b) of the Code (both
referred to as "IRAs") or Roth IRAs under Section 408A of the Code ("Roth
IRAs") is $50. For flexible payment Contracts issued in connection with IRAs
and Roth IRAs (Roth IRAs will only be available if you have an existing IRA
Contract), the Company currently requires a minimum initial purchase payment
of $2,000, although the Company requires a minimum initial payment of $100 if
monthly payments are to be withdrawn from your bank checking account or Nvest
Cash Management Trust account, a service known as the Master Service Account
arrangement ("MSA"). For all other flexible payment Contracts, the minimum
initial purchase payment is $5,000, although the Company requires a minimum
initial payment of $100 if monthly payments are to be made through MSA. The
Company may consent to lower initial purchase payments in certain situations.
Additional purchase payments must be at least $25, although the Company
currently requires minimum additional purchase payments to be at least $50 if
they are made through a group billing arrangement (also known as a "list-bill"
arrangement) and $100 per month if they are made through MSA. The Company
reserves the right to limit the amount of purchase payments under a Contract
in any Contract Year to three times the anticipated annual contribution that
you specify in your Contract application. The Company currently limits
anticipated annual contributions to $100,000, so that the maximum amount you
may contribute in any Contract Year is $300,000, or three times your specified
anticipated annual contribution, if less. Except with the consent of the
Company, the minimum purchase payment for a single payment Contract is $2,000
for Contracts issued in connection with IRAs and $5,000 for all other
Contracts, and the maximum purchase payment for a single payment contract is
$1,000,000. Payments in addition to the required

A-17
<PAGE>

minimum purchase payment may also be made on a single payment Contract,
subject to the minimums set forth above. The Company reserves the right to
limit purchase payments made in any Contract Year or in total under a single
payment Contract.

The Company will determine whether to approve applications for new
Contracts, and will apply initial purchase payments under new Contracts not
later than 2 business days after a completed application (including the
initial purchase payment) is received at the Company's Designated Office. If
an application is not complete upon receipt, the Company will apply the
initial purchase payment not later than 2 business days after it is completed.
If an incomplete application is not completed within 5 days after the Company
receives it, however, the Company will inform the applicant of the reasons for
the delay and will refund any purchase payment unless the applicant consents
to allow the Company to retain the purchase payment until the application is
made complete. The Company reserves the right to reject any application.

ALLOCATION OF PURCHASE PAYMENTS

Net purchase payments are converted into Accumulation Units of the sub-
accounts you select, subject to the limitation that Contract Value may be
allocated among no more than 10 accounts, including the Fixed Account, at any
time. The number of Accumulation Units of each sub-account to be credited to
the Contract is determined by dividing the net purchase payment by the
Accumulation Unit Value for the selected sub-accounts next determined
following receipt of the purchase payment at the Company's Designated Office
(or, in the case of the initial purchase payment, next determined following
approval of the Contract application). In the case of an initial purchase
payment to be made by exchanging a variable annuity contract issued by New
England Variable Annuity Fund I (a "Fund I contract") or New England
Retirement Investment Account (a "Preference contract"), the payment will be
applied using the Accumulation Unit Value next determined following approval
of the Contract application and receipt of the proceeds of the Fund I or
Preference contract.

CONTRACT VALUE AND ACCUMULATION UNIT VALUE

The value of a Contract is determined by multiplying the number of
Accumulation Units credited to the Contract by the appropriate Accumulation
Unit Values. As described below, the Accumulation Unit Value of each sub-
account depends on the net investment experience of its corresponding Eligible
Fund and reflects fees and expenses borne by the Eligible Fund as well as
charges assessed against sub-account assets. The Accumulation Unit Value of
each sub-account was set at $1.00 on or about the date on which shares of the
corresponding Eligible Fund first became available to investors. The
Accumulation Unit Value is determined as of the close of regular trading on
the New York Stock Exchange on each day during which the Exchange is open for
trading by multiplying the last-determined Accumulation Unit Value by the net
investment factor determined as of the close of regular trading on the
Exchange on that day. To determine the net investment factor for any sub-
account, the Company takes into account the change in net asset value per
share of the Eligible Fund held in the sub-account as of the close of regular
trading on the Exchange on that day from the net asset value most recently
determined, the amount of dividends or other distributions made by that
Eligible Fund since the previous determination of net asset value per share,
and daily deductions for the Mortality and Expense Risk Charge and
Administration Asset Charge, equal, on an annual basis, to 1.35% of the
average daily net asset value of the sub-account. The formula for determining
the net investment factor is described under the caption "Net Investment
Factor" in the Statement of Additional Information.

The net investment factor may be greater or less than one, depending in part
upon the investment performance of the Eligible Fund which is the underlying
investment of the sub-account, and you bear this investment risk. The net
investment results are also affected by the deductions from sub-account assets
for the Mortality and Expense Risk Charge and Administration Asset Charge.

Under a Contract with the Fixed Account option, the total Contract Value
includes the amount of Contract Value held in the Fixed Account. Under a
Contract that permits Contract loans, the Contract Value also includes the
amount of Contract Value transferred to the Company's general account (but
outside of the Fixed Account) as a

A-18
<PAGE>

result of a loan and any interest credited on that amount. Interest earned on
the amount held in the general account as a result of a loan will be credited
to the Contract's sub-accounts annually in accordance with the allocation
instructions in effect for purchase payments under your Contract on the date
of the crediting. (See "Loan Provision for Certain Tax Benefited Retirement
Plans.")

PAYMENT ON DEATH PRIOR TO ANNUITIZATION

If the Annuitant dies after annuitization, the amount payable, if any, will
be as specified in the annuity payment option selected. Prior to
annuitization, the Contract's Death Proceeds are payable to the Beneficiary if
the Company receives due proof of death of: (1) the Contract Owner; or (2) the
Annuitant, in the case of a Contract that is not owned in an individual
capacity.

The Contract's Death Proceeds at any time are the greater of: (1) the sum of
all purchase payments adjusted for any partial surrenders; or (2) the current
Contract Value. For this purpose, the current Contract Value is the value next
determined after the later of the date when the Company receives at the
Designated Office: (1) due proof of death; or (2) an election of continuation
of the Contract (if available) or of payment either in one sum or under an
annuity payment option.

Death Proceeds will be reduced by the amount of any outstanding loan plus
accrued interest. (See "Loan Provision for Certain Tax Benefited Retirement
Plans.")

Options for Death Proceeds. The Death Proceeds, reduced by the amount of any
--------------------------
outstanding loan plus accrued interest, will be paid in a lump sum or will be
applied to provide one or more of the fixed or variable methods of payment
available. (See "Annuity Options.") The Contract Owner may elect the form of
payment during his or her lifetime (or during the Annuitant's lifetime, if the
Contract is not owned in an individual capacity). Such an election,
particularly in the case of Contracts issued in connection with retirement
plans qualifying for tax benefited treatment, is subject to any applicable
requirements of Federal tax law. If the Contract Owner has not made such an
election, payment will be in a single sum, unless the Beneficiary elects an
annuity payment option within 90 days after receipt by the Company of due
proof of the Annuitant's death or elects to apply the amount payable under the
Contract to purchase a new Contract. Whether and when such an election is made
could affect when the Death Proceeds are deemed to be received under the tax
laws.

The Company also intends to make Beneficiary Continuation and Spousal
Continuation provisions available under the Contracts, subject to any
necessary state approvals. Under these provisions, an eligible Beneficiary
would also have the option of continuing the Contract, as further described
below. IF EITHER BENEFICIARY OR SPOUSAL CONTINUATION APPLIES TO A CONTRACT,
AND AN ELIGIBLE BENEFICIARY DOES NOT MAKE AN ELECTION OF CONTINUATION OF THE
CONTRACT OR OF PAYMENT EITHER IN ONE SUM OR UNDER AN ANNUITY PAYMENT OPTION
WITHIN 90 DAYS AFTER THE COMPANY RECEIVES DUE PROOF OF DEATH, THE CONTRACT
WILL BE CONTINUED UNDER THE APPLICABLE CONTINUATION PROVISION.

For non-tax qualified plans, the Code requires that if any Contract Owner
(or, if applicable, the Annuitant) dies prior to annuitization, the Death
Proceeds must be either: (1) distributed within five years after the date of
death; or (2) applied to a payment option payable over the life (or over a
period not exceeding the life expectancy) of the Beneficiary, provided further
that payments under the payment option must begin within one year of the date
of death. Special options apply under a non-tax qualified plan for spouses.
See "Special Options for Spouses." There are comparable rules for
distributions on the death of the Annuitant under tax qualified plans;
however, if the Beneficiary under a tax qualified Contract is the Annuitant's
spouse, the Code generally allows distributions to begin by the year in which
the Annuitant would have reached age 70 1/2 (which may be more or less than
five years after the Annuitant's death). See "Taxation of the Contracts--
Special Rules for Annuities Purchased for Annuitants Under Retirement Plans
Qualifying for Tax Benefited Treatment--Distributions from the Contract."

If a Contract Owner (or, if applicable, the Annuitant) dies on or after
annuitization, the remaining interest in the Contract must be distributed at
least as quickly as under the method of distribution in effect on the date of
death.

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--BENEFICIARY CONTINUATION

In keeping with the Code's general requirement that Death Proceeds must be
distributed within five years after the death of a Contract Owner (or, if
applicable, the Annuitant), the Beneficiary Continuation provision permits a
Beneficiary to hold his or her share of the Death Proceeds (as determined
after the Death Proceeds have been reduced by the amount of any outstanding
loan plus accrued interest) in the Contract and to continue the Contract for a
period ending five years after the date of death, provided that the
Beneficiary's share of the Death Proceeds meets the Company's published
minimum (currently $5,000 for non-tax qualified Contracts and $2,000 for tax
qualified Contracts). THE CONTRACT CANNOT BE CONTINUED FOR ANY BENEFICIARY
WHOSE SHARE OF THE DEATH PROCEEDS DOES NOT MEET THE MINIMUM.

The Beneficiary has 90 days after the date the Company receives due proof of
death to make an election with respect to his or her share of the Death
Proceeds. The Beneficiary may elect either: (1) payment in a single sum; (2)
application to a permitted annuity payment option with payments to begin
within one year of the date of death; or (3) Beneficiary Continuation,
provided that the Beneficiary's share of the Death Proceeds meets the
Company's published minimum. IF THE BENEFICIARY DOES NOT MAKE AN ELECTION
WITHIN 90 DAYS AFTER THE COMPANY RECEIVES DUE PROOF OF DEATH, THE CONTRACT
WILL BE CONTINUED UNDER THE BENEFICIARY CONTINUATION PROVISION FOR A PERIOD
ENDING FIVE YEARS AFTER THE DATE OF DEATH. IF BENEFICIARY CONTINUATION IS NOT
AVAILABLE BECAUSE THE BENEFICIARY'S SHARE OF THE DEATH PROCEEDS DOES NOT MEET
THE COMPANY'S PUBLISHED MINIMUM, HOWEVER, THE DEATH PROCEEDS WILL BE PAID IN A
SINGLE SUM UNLESS THE BENEFICIARY ELECTS AN ANNUITY PAYMENT OPTION WITHIN 90
DAYS AFTER THE COMPANY RECEIVES DUE PROOF OF DEATH.

If the Contract is continued under the Beneficiary Continuation provision,
the Death Proceeds (reduced by the amount of any outstanding loan plus accrued
interest) become the Contract Value on the date the continuation is effected,
and will be allocated among the accounts in the same proportion as they had
been prior to the continuation. In addition, the Beneficiary will have the
right to make transfers and fully or partially surrender his or her Contract
Value, and no contingent deferred sales charge will apply. The Beneficiary
cannot, however, make additional purchase payments, take loans or exercise the
dollar cost averaging feature. Five years from the date of death of the
Contract Owner (or, if applicable, the Annuitant), the Company will pay the
Beneficiary's Contract Value to the Beneficiary. If the Beneficiary dies
during that five year period, the Beneficiary's death benefit will be the
Beneficiary's Contract Value on the date when the Company receives due proof
of the Beneficiary's death.

--SPECIAL OPTIONS FOR SPOUSES

Under the Spousal Continuation provision, the Contract may be continued
after the death of a Contract Owner (or the Annuitant, in the case of a
Contract that is not owned in an individual capacity) if the Contract
identifies the deceased spouse as the Contract Owner (or, if applicable, the
Annuitant) and the surviving spouse as the primary Beneficiary. In that case,
the surviving spouse can elect one of the following three options within 90
days after the Company receives due proof of death of the Contract Owner (or,
if applicable, the Annuitant). The surviving spouse may elect: (1) to receive
the Death Proceeds (reduced by the amount of any outstanding loan plus accrued
interest) either in one sum or under a permitted payment option; (2) to
continue the Contract under the Beneficiary Continuation provision; or (3) to
continue the Contract under the Spousal Continuation provision with the
surviving spouse as the Contract Owner (or, if applicable, the Annuitant). IF
THE SURVIVING SPOUSE DOES NOT MAKE AN ELECTION WITHIN 90 DAYS AFTER THE
COMPANY RECEIVES DUE PROOF OF DEATH, THE CONTRACT WILL AUTOMATICALLY BE
CONTINUED UNDER THE SPOUSAL CONTINUATION PROVISION, WITH THE RESULT THAT THE
SURVIVING SPOUSE WILL FOREGO THE RIGHT TO RECEIVE THE DEATH PROCEEDS AT THAT
TIME.

Under the Spousal Continuation provision, all terms and conditions of the
Contract that applied prior to the death will continue to apply, regardless of
whether or not the Contract is qualified for tax benefited treatment under the
Code, except that:

a. The surviving spouse will not be permitted to make additional purchase
payments or take loans under Contracts issued in connection with a
retirement plan qualifying for tax benefited treatment under Section 401 or
403 of the Internal Revenue Code; and

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<PAGE>

b. The Maturity Date will be reset to a later date, if necessary, based
on the age of the surviving spouse. The Maturity Date cannot be reset to an
earlier date. In the event the Maturity Date is reset, the new Maturity
Date will be the date when the surviving spouse reaches the maximum
maturity age under applicable state law. In most states, the maximum
maturity age is 95, but the maximum maturity age is 85 in New York and
Pennsylvania.

The Spousal Continuation provision will not be available if, at the time of
the Contract Owner's death, the surviving spouse is older than the maximum
maturity age under applicable state law. In addition, the Spousal Continuation
provision will not be available if, at the original Maturity Date, the
surviving spouse would be older than the maximum maturity age under applicable
state law.

A surviving spouse who elects Beneficiary Continuation, as opposed to
Spousal Continuation, under a Contract that is qualified for tax-benefited
treatment under the Code must begin to receive distributions from the Contract
by the earlier of: (1) five years after December 31st of the year of the
Contract Owner's (or, if applicable, the Annuitant's) death; and (2) the year
in which the Contract Owner (or, if applicable, the Annuitant) would have
reached age 70 1/2.

If a Contract is subject to a loan at the time the Contract Owner (or, if
applicable, the Annuitant) dies, and the Contract is continued under the
Spousal Continuation provision, the amount of the outstanding loan plus
accrued interest will be treated as a taxable distribution from the Contract
to the deceased Contract Owner, and the Contract Value will be reduced
accordingly.

TRANSFER PRIVILEGE

It is the position of the Company that you may transfer your Contract Value
among accounts without incurring adverse federal income tax consequences. It
is not clear, however, whether the Internal Revenue Service will limit the
number of transfers between sub-accounts and/or the Fixed Account in an
attempt to limit the Contract Owner's incidents of ownership in the assets
used to support the Contract. See "Taxation of the Contracts--Special Rules
for Annuities Used By Individuals or with Plans and Trusts not Qualifying
Under the Code for Tax Benefited Treatment." The Company currently allows 12
free transfers per Contract Year prior to annuitization. Additional transfers
are subject to a $10 charge per transfer. The Company reserves the right to
impose a charge of $10 on each transfer in excess of four per year and to
limit the number of transfers. Currently, after variable annuity payments have
commenced, you may make one transfer per year without the consent of the
Company, and the Fixed Account is not available under variable payment
options. Currently, the Company intends to allow one additional transfer, for
policy credits the Company has applied to the Back Bay Advisors Money Market
Series pursuant to the demutualization plan. All transfers are subject to the
requirement that the amount of Contract Value transferred be at least $25 (or,
if less, the amount of Contract Value held in the sub-account from which the
transfer is made) and that, after the transfer is effected, Contract Value be
allocated among not more than ten accounts, including the Fixed Account.
Transfers will be accomplished at the relative net asset values per share of
the particular Eligible Funds next determined after the request is received by
the Company's Designated Office. See "Requests and Elections" for information
regarding transfers made by written request and by telephone.

The Metropolitan Fund may restrict or refuse purchases or redemptions of
shares in their Portfolio as a result of certain market timing activities. You
should read the prospectus of this Eligible Fund for more details.

For special rules regarding transfers involving the Fixed Account, see "The
Fixed Account." Transfers out of the Fixed Account are limited as to timing,
------------------------------------------------------------
frequency and amount.
- --------------------

DOLLAR COST AVERAGING

The Company offers an automated transfer privilege referred to here as
dollar cost averaging. Under this feature you may request that a certain
amount of your Contract Value be transferred on the same day each month, prior
to annuitization, from any one account of your choice (excluding the Fixed
Account) to one or more of the other accounts (excluding the Fixed Account)
subject to the limitation that Contract Value may not be allocated to more
than 10 accounts, including the Fixed Account, at any time. Currently, a
minimum of $100 must be

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<PAGE>

transferred to each account that you select under this feature. Transfers made
under the dollar cost averaging program will not be counted against the twelve
transfers per year which may be made free of charge. You may cancel your use
of the dollar cost averaging program at any time prior to the monthly transfer
date. (See Appendix A for more information about Dollar Cost Averaging.)
Requests related to your use of the dollar cost averaging program should be
sent to the Designated Office.

SURRENDERS

Prior to annuitization, you may surrender the Contract for all or part of
the Contract Value (reduced by the amount of any outstanding loan plus accrued
interest.) (See "Loan Provision for Certain Tax Benefited Retirement Plans.")
This right is subject to any restrictions on surrender under applicable laws
relating to employee benefit plans or under the terms of the plans themselves.
The election to surrender must be in a form conforming to the Company's
administrative procedures and must be received at the Company's Designated
Office prior to the earlier of the Maturity Date or the Annuitant's death. You
may receive the proceeds in cash or apply them to an annuity payment option.
If you wish to apply the proceeds to a payment option, you must so indicate in
your surrender request; otherwise you will receive the proceeds in a lump sum
and may be taxed on them as a full distribution. Payment of surrender proceeds
normally will be made within 7 days, subject to the Company's right to suspend
payments under certain circumstances. (See "Suspension of Payments.") The
Federal tax laws impose penalties upon, and in some cases prohibit, certain
premature distributions from the Contracts before or after the date on which
annuity payments are to begin. (See "Federal Income Tax Status.") No surrender
is permitted in connection with a Contract issued pursuant to the Optional
Retirement Program of the University of Texas System prior to the plan
participant's death, retirement, or termination of employment in all Texas
public institutions of higher education.

On receipt of an election to surrender, the Company will cancel the number
of Accumulation Units necessary to equal the dollar amount of the surrender
request. On a full surrender, any applicable Administration Contract Charge
will be deducted from this amount. Any applicable Contingent Deferred Sales
Charge also will be deducted from this amount on a full or partial surrender.
Also, any applicable Contingent Deferred Sales Charge will be imposed upon the
application of proceeds to an annuity payment option unless you elect (a) a
variable life income option (payment options 2, 3 or 6 as described under
"Annuity Options") or (b) for Contracts that have been in force at least five
years, a fixed life income payment option (comparable to payment options 2, 3
or 6 as described under "Annuity Options" but on a fixed basis). (See
"Administration Charges, Contingent Deferred Sales Charge and Other
Deductions" and "Annuity Options."') A partial surrender will reduce the
Contract Value in the sub-accounts in proportion to the amount of Contract
Value in each sub-account, unless you request otherwise. Surrenders and
related charges will be based on Accumulation Unit Values next determined
after the election is received at the Company's Designated Office or, if
surrender proceeds are to be applied to an annuity payment option, at such
later date as may be specified in the request for surrender. After a partial
surrender, the remaining Contract Value must be at least $500 (unless the
Company consents to a lesser amount) or, if the Contract is subject to an
outstanding loan, the remaining unloaned Contract Value must be at least 10%
of the total Contract Value after the partial surrender or $500, whichever is
greater (unless the Company consents to a lesser amount). If the requested
partial surrender would not satisfy this requirement, at the Contract Owner's
option either the amount of the partial surrender will be reduced or the
transaction will be treated as a full surrender and any applicable Contingent
Deferred Sales Charge will be deducted from the proceeds.

Any surrender may result in adverse tax consequences. The Company currently
waives the Contingent Deferred Sales Charge on distributions that are intended
to satisfy required minimum distributions, calculated as if this Contract were
the participant's only retirement plan asset. This waiver only applies if the
required minimum distribution exceeds the free withdrawal amount and no
previous surrenders were made during the Contract Year. You are advised to
consult a qualified tax advisor as to the consequences of a distribution. (See
"Federal Income Tax Status--Taxation of the Contracts.")

SYSTEMATIC WITHDRAWALS

The Systematic Withdrawal feature available under the Contracts allows the
Contract Owner to have a portion of the Contract Value withdrawn automatically
at regularly scheduled intervals prior to annuitization. The application

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for the Systematic Withdrawal feature specifies the applicable terms and
conditions of the program. Systematic Withdrawals are processed on the same
day each month, depending on your election. If the New York Stock Exchange is
closed on the day when the withdrawal is to be made, the withdrawal will be
processed on the next business day. The Contingent Deferred Sales Charge will
apply to amounts received under the Systematic Withdrawal program in the same
manner as it applies to other partial surrenders and surrenders of Contract
Value. (See "Contingent Deferred Sales Charge.") Of course, continuing to make
purchase payments under the Contract while you are making Systematic
Withdrawals means that you could incur any applicable Contingent Deferred
Sales Charge on the withdrawals at the same time that you are making the new
purchase payments. The Federal tax laws may include systematic withdrawals in
the Contract Owner's gross income in the year in which the withdrawal amount
is received and will impose a penalty of 10% on certain systematic withdrawals
which are premature distributions.

LOAN PROVISION FOR CERTAIN TAX BENEFITED RETIREMENT PLANS

Contract loans are available to participants under TSA Plans that are not
subject to ERISA, to trustees of Qualified Plans and to fiduciaries of TSA
Plans subject to ERISA in those states where the insurance department has
approved the currently applicable Contract loan provision. (The Contracts are
only available on a limited basis to plans qualified under Section 401(k) of
the Code and are no longer being offered to TSA Plans subject to ERISA. See
"Retirement Plans Offering Federal Tax Benefits.")

The Department of Labor has issued regulations (the "ERISA regulations")
governing plan participant loans under retirement plans subject to ERISA.
Generally, the ERISA regulations will apply to retirement plans that qualify
under Sections 401(a) and 401(k) of the Code and employer-sponsored TSA Plans
(generally those to which employers make contributions not attributable to
salary reduction agreements). YOU AND YOUR EMPLOYER ARE RESPONSIBLE FOR
DETERMINING WHETHER YOUR PLAN IS SUBJECT TO AND COMPLIES WITH THE ERISA
REGULATIONS ON PARTICIPANT PLAN LOANS.

It is the responsibility of the trustee of a Qualified Plan or fiduciary of
a TSA Plan subject to ERISA to ensure that the proceeds of a Contract loan are
made available to a participant under a separate plan loan agreement, the
terms of which comply with all the plan qualification requirements including
the requirements of the ERISA regulations on plan loans. Therefore, the plan
loan agreement may differ from the Contract loan provisions and, if you are a
participant in a Qualified Plan or a TSA Plan subject to ERISA, you should
consult with the fiduciary administering the plan loan program to determine
your rights and obligations with respect to plan loans.

The ERISA regulations contain requirements for plan loans relating to their
maximum amount, availability, and other matters. Among the rules are the
requirements that the loan bear a reasonable rate of interest, be adequately
secured, provide a reasonable repayment schedule, and be made available on a
basis that does not discriminate in favor of employees who are officers or
shareholders or who are highly compensated. These regulations may change from
time to time. Failure to comply with these requirements may result in
penalties under the Code and under ERISA.

One of the current requirements of the ERISA regulations is that the plan
must charge a "commercially reasonable" rate of interest for plan loans. The
Contract loan interest rate may not be considered "commercially reasonable"
within the meaning of the ERISA regulations, and it is the responsibility of
the plan fiduciary to charge the participant any additional interest under the
plan loan agreement which may be necessary to make the overall rate charged
comply with the regulation. The ERISA regulations also currently require that
a loan be adequately secured, but provide that not more than 50% of the
participant's vested account balance under the plan may be used as security
for the loan. A Contract loan is secured by the portion of the Contract Value
which is held in the Company's general account as a result of the loan. The
plan fiduciary must ensure that the Contract Value held as security under the
Contract, plus any additional portion of the participant's vested account
balance which is used as security under the plan loan agreement, does not
exceed 50% of the participant's total vested account balance under the plan.

The amount of any loan may not exceed the maximum loan amount as determined
under the Company's maximum loan formula. The effect of a loan on your
Contract is that a portion of the Contract Value equal to the

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amount of the loan will be transferred to the Company's general account and
will earn interest (which is credited to the Contract) at the effective rate
of 4 1/2% per year. This earned interest will be credited to the Contract's
sub-accounts (and, if available under your Contract, to the Fixed Account)
annually in accordance with the allocation instructions in effect for purchase
payments under your Contract on the date of the crediting. Interest charged on
the loan will be 6 1/2% per year. Depending on the Company's interpretation of
applicable law and on the Company's administrative procedures, the interest
rates charged and earned on loaned amounts may be changed (for example, to
provide for a variable interest rate) with respect to new loans made. The
minimum loan amount is currently $500. Because the amount moved to the general
account as a result of the loan does not participate in the Variable Account's
investment experience, a Contract loan can have a permanent effect on the
Contract Value and Death Proceeds.

The Company will not permit more than one loan at a time on any Contract
except where state regulators require otherwise. In addition, the maximum
amount for a qualified loan is limited such that the amount of the loan, when
added to the outstanding loan balance of all other loans, whenever made, from
all other plans of the same employer, does not exceed $50,000 reduced by the
excess of the highest outstanding balance of loans under such plans during the
one-year period, ending on the day before the date on which the loan is made;
over the outstanding balance of loans under such plans on the date the loan is
made; or if less the greater of: (1) $10,000; or (2) 50% of the current value
of your nonforfeitable, accrued benefits under the plan. Loans must be repaid
within 5 years except for certain loans used for the purchase of a principal
residence, which must be repaid within 20 years. Repayment of the principal
amount and interest on the loan will be required in equal monthly installments
by means of repayment procedures established by the Company. Contract loans
are subject to applicable retirement program laws and their taxation is
determined under the Code. Under current practice, if a Contract loan
installment repayment is not made, the Company (unless restricted by law) may
make a full or partial surrender of the Contract in the amount of the unpaid
installment repayment on the Contract loan or, if there is a default on the
Contract loan, in an amount equal to the outstanding loan balance (plus any
applicable Contingent Deferred Sales Charge and $30 Administration Contract
Charge in each case). (A default on the loan is defined in the loan
application and includes, among other things, nonpayment of three consecutive
or a total of five installment repayments, or surrender of the Contract.) For
TSA Plans that are not subject to ERISA, the current actual distribution will
be limited to pre-1989 money unless you are age 59 1/2 or otherwise comply
with the legal requirements for permitted distributions under the TSA
Contract. If these limitations do not apply (i.e. you are under the age of 59
1/2 or no pre-1989 money is in your Contract) the Company will report the
amount of the unpaid installment repayment or default as a deemed distribution
for tax purposes, but will postpone an actual distribution from the Contract
until the earliest distribution date permitted under the law. An installment
repayment of less than the amount billed will not be accepted. A full or
partial surrender of the Contract to repay all or part of the loan may result
in serious adverse tax consequences for the plan participant (including
penalty taxes) and may adversely affect the qualification of the plan or
Contract. The trustee of a Qualified Plan or a TSA Plan subject to ERISA will
be responsible for reporting to the IRS and advising the participant of any
tax consequences resulting from the reduction in the Contract Value caused by
the surrender and for determining whether the surrender adversely affects the
qualification of the plan. In the case of a TSA Plan not subject to ERISA, the
Company will report the default to the IRS as a taxable distribution under the
Contract.

The Internal Revenue Service issued proposed regulations in December of
1997, which, if finalized in their present form, would require that if the
repayment terms of a loan are not satisfied after the loan has been made due
to a failure to make a loan repayment as scheduled, including any applicable
grace period, the balance of the loan would be deemed to be distributed. If
the loan is treated as a distribution under Code Section 72(p), the proposed
regulations state that the amount so distributed is to be treated as a taxable
distribution subject to the normal rules of Code Section 72, if the
participant's interest in the plan includes after-tax contributions (or other
tax basis). A deemed distribution would also be a distribution for purposes of
the 10 percent tax in Code Section 72(t). However, a deemed distribution under
Section 72(p) would not be treated as an actual distribution for purposes of
Code Section 401, the rollover and income averaging provisions of Section 402
and the distribution restrictions of Section 403(b).

Partial surrenders will be restricted by the existence of a loan and, after
any partial surrender, the remaining unloaned Contract Value must be at least
10% of the total Contract Value after the partial surrender or $500,

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whichever is greater (unless the Company consents to a lesser amount). If a
partial surrender by the Company to enforce the loan repayment schedule would
reduce the unloaned Contract Value below this amount, the Company reserves the
right to surrender the entire Contract and apply the Contract Value to the
Contingent Deferred Sales Charge, the $30 Administration Contract Charge and
the amount owed to the Company under the loan. If at any time an excess
Contract loan exists (that is, the Contract loan balance exceeds the Contract
Value), the Company has the right to terminate the Contract.

Unless you request otherwise, Contract loans will reduce the amount of the
Contract Value in the accounts in proportion to the Contract Value then in
each account. If any portion of the Contract loan was attributable to Contract
Value in the Fixed Account, then an equal portion of each loan repayment will
have to be allocated to the Fixed Account. (For example, if 50% of the loan
was attributable to your Fixed Account Contract Value, then 50% of each loan
repayment will be allocated to the Fixed Account). Unless you request
otherwise, a repayment will be allocated to the sub-accounts in the same
proportions to which the loan was attributable to the sub-accounts. (Under
certain loans made prior to the date of this prospectus and loans made in
South Carolina, repayments will be allocated, unless you request otherwise,
according to the allocation instructions in effect for purchase payments under
your Contract, pursuant to the terms of the applicable Contract loan
endorsement.)

The amount of the death proceeds, the amount payable upon surrender of the
Contract and the amount applied on the Maturity Date to provide annuity
payments will be reduced by the amount of any outstanding Contract loan plus
accrued interest. In these circumstances, the amount of the outstanding
contract loan plus accrued interest generally will be taxed as a taxable
distribution.

The tax and ERISA rules relating to participant loans under tax benefited
retirement plans are complex and in some cases unclear, and they may vary
depending on the individual circumstances of each loan. The Company strongly
recommends that you, your employer and your plan fiduciary consult a qualified
tax advisor regarding the currently applicable tax and ERISA rules before
taking any action with respect to loans.

The Company will provide further information regarding loans upon request.

DISABILITY BENEFIT RIDER

A disability benefit rider may be purchased, provided that the Annuitant
satisfies any applicable underwriting standards. This feature is available
only if you are under age 60 when your Contract is issued and if you plan to
make regular annual contributions to the Contract. If the Annuitant becomes
totally disabled, the rider provides that the Company will make monthly
purchase payments under the Contract, subject to the terms and conditions of
the rider.

SUSPENSION OF PAYMENTS

The Company reserves the right to suspend or postpone the payment of any
amounts due under the Contract or transfers of Contract Values between sub-
accounts when permitted under applicable Federal laws, rules and regulations.
Current Federal law permits such suspension or postponement if: (a) the New
York Stock Exchange is closed (other than for customary weekend and holiday
closings); (b) trading on the Exchange is restricted; (c) an emergency exists
such that it is not reasonably practicable to dispose of securities held in
the Variable Account or to determine the value of its assets; or (d) the
Securities and Exchange Commission by order so permits for the protection of
securities holders. Conditions described in (b) and (c) will be decided by or
in accordance with rules of the Securities and Exchange Commission.

OWNERSHIP RIGHTS

During the Annuitant's lifetime, all rights under the Contract are vested
solely in the Contract Owner unless otherwise provided. Such rights include
the right to change the Beneficiary, to change the payment option, to

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assign the Contract (subject to the restrictions referred to below), and to
exercise all other rights, benefits, options and privileges conferred by the
Contract or allowed by the Company. Transfer of ownership of the Contract
under an ERISA "Pension Plan" to a non-spousal beneficiary may require spousal
consent.

Qualified Plans and certain TSA Plans with sufficient employer involvement
are deemed to be "Pension Plans" under ERISA and may, therefore, be subject to
rules under the Retirement Equity Act of 1984. These rules require that
benefits from annuity contracts purchased by a Pension Plan and distributed to
or owned by a participant be provided in accordance with certain spousal
consent, present value and other requirements which are not enumerated in the
Contract. Thus, the tax consequences of the purchase of the Contracts by
Pension Plans should be considered carefully.

Those Contracts offered by the prospectus which are designed to qualify for
the favorable tax treatment described below under "Federal Income Tax Status"
contain restrictions on transfer or assignment, reflecting requirements of the
Code which must be satisfied in order to assure continued eligibility for such
tax treatment. In accordance with such requirements, ownership of such a
Contract may not be changed and the Contract may not be sold, assigned or
pledged as collateral for a loan or for any other purpose except under certain
limited circumstances. A Contract Owner contemplating a sale, assignment or
pledge of the Contract should carefully review its provisions and consult a
qualified tax advisor.

If Contracts offered by this prospectus are used in connection with deferred
compensation plans or retirement plans not qualifying for favorable Federal
tax treatment, such plans may also restrict the exercise of rights by the
Contract Owner. A Contract Owner should review the provisions of any such
plan.

REQUESTS AND ELECTIONS

Requests for transfers or reallocation of future purchase payments may be
made by telephone or written request (which may be telecopied) to the Company
at its Designated Office. Written requests for such transfers or changes of
allocation must be in a form acceptable to the Company. To request a transfer
or change of allocation by telephone, please contact your registered
representative, or contact the Company's Designated Office at 1-800-435-4117
between the hours of 9:00 a.m. and 4:00 p.m., Eastern Time. Requests for
transfer or reallocation by telephone will be automatically permitted. The
Company (or any servicer acting on its behalf) will use reasonable procedures
such as requiring certain identifying information from the caller, tape
recording the telephone instructions, and providing written confirmation of
the transaction, in order to confirm that instructions communicated by
telephone are genuine. Any telephone instructions reasonably believed by the
Company (or any servicer acting on its behalf) to be genuine will be your
responsibility, including losses arising from any errors in the communication
of instructions. As a result of this policy, you will bear the risk of loss.
If the Company (or any servicer acting on its behalf) does not employ
reasonable procedures to confirm that instructions communicated by telephone
are genuine, it may be liable for any losses due to unauthorized or fraudulent
transactions. All other requests and elections under a Contract must be in
writing signed by the proper party, must include any necessary documentation
and must be received at the Company's Designated Office to be effective. If
acceptable to the Company, requests or elections relating to Beneficiaries and
ownership will take effect as of the date signed unless the Company has
already acted in reliance on the prior status. The Company is not responsible
for the validity of any written request or election.

TEN DAY RIGHT TO REVIEW

Within 10 days (or more where required by applicable state insurance law) of
your receipt of an issued Contract you may return it to the Company at its
Designated Office for cancellation. Upon cancellation of the Contract, the
Company will refund all your purchase payments. If required by the insurance
law or regulations of the state in which your Contract is issued, however, the
Company will return to you an amount equal to the sum of (1) any difference
between the purchase payments made and the amounts allocated to the Variable
Account and (2) the Contract Value.

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<PAGE>

ADMINISTRATION CHARGES, CONTINGENT
DEFERRED SALES CHARGE AND OTHER DEDUCTIONS

The Company deducts various charges from Contract Value for the services
provided, expenses incurred and risks assumed in connection with the
Contracts. For example, the Company incurs costs and expenses in connection
with issuing Contracts, maintaining Contract Owner records and providing
accounting, valuation, regulatory and reporting services. The Company also
incurs costs and expenses associated with the marketing, sale and distribution
of the Contracts. In addition, the Company assumes mortality and expense risks
under the Contracts. In particular, the Company guarantees that the dollar
amount of the Administration Contract Charge and the amount of the
Administration Asset Charge as a percentage of Contract Value will not
increase over the life of a Contract, regardless of the actual expenses. Also,
the Company guarantees that, although annuity payments will vary according to
the performance of the investments you select, annuity payments will not be
affected by the mortality experience (death rate) of persons receiving such
payments or of the general population. The Company assumes this mortality risk
by virtue of annuity rates in the Contract that cannot be changed. The Company
also assumes the risk of making a minimum death benefit payment if the
Contract Owner (or, if applicable, the Annuitant) dies prior to annuitization.
(See "Payment on Death Prior to Annuitization.") The amount and manner of
deduction of Contract charges is described below. The amount of a charge may
not necessarily correspond to the costs associated with providing the services
or benefits indicated by the designation of the charge or associated with the
particular Contract. For example, the Contingent Deferred Sales Charge may not
fully cover all of the sales and distribution expenses actually incurred by
the Company, and proceeds from other charges, including the mortality and
expense risk charge, may be used in part to cover such expenses.

ADMINISTRATION CHARGES

The Company deducts two Administration Charges equal, on an annual basis, to
$30 per Contract plus .40% of the daily net assets of each sub-account. The
Administration Charges will be deducted from each sub-account in the ratio of
your interest therein to your total Contract Value. In addition, the Company
charges a transfer fee for certain transfers of Contract Value between
accounts, as described below.

The annual $30 Administration Contract Charge is deducted from the Contract
Value on each Contract anniversary for the prior Contract Year and will be
deducted on a pro rata basis at annuitization or at the time of a full
surrender if the annuitization or surrender occurs on a date other than a
Contract anniversary. The charge is not imposed after annuitization. In those
instances in which two Contracts are issued to permit the funding of a spousal
IRA, the Administration Contract Charge will be imposed only on the Contract
to which the larger purchase payments have been allocated in the Contract
application.

The Administration Asset Charge is equal to an annual rate of .40% of net
assets and is computed and deducted on a daily basis from each sub-account. As
a percentage of net assets, this charge will not increase over the life of a
Contract, but the total dollar amount of the charge will vary depending on the
level of net assets. The Administration Asset Charge will continue to be
assessed after annuitization if annuity payments are made on a variable basis.

Prior to annuitization, the Company currently imposes a transfer fee of $10
for each transfer of Contract Value in excess of 12 per Contract Year.
However, the Company intends to waive this charge and allow one additional
transfer for policy credits applied to the Back Bay Money Market Series
pursuant to the demutualization plan. The Company reserves the right to impose
a transfer fee of $10 on each transfer in excess of 4 per Contract Year and to
limit the number of transfers.

MORTALITY AND EXPENSE RISK CHARGE

The Company deducts a Mortality and Expense Risk Charge from the Variable
Account. This Charge is computed and deducted on a daily basis from the assets
in each sub-account attributable to the Contracts. The charge is at an annual
rate of .95% of the daily net assets of each such sub-account, of which .60%
represents a mortality risk charge and .35% represents an expense risk charge.
The Mortality and Expense Risk Charge as a

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<PAGE>

percentage of Contract Value will not increase over the life of a Contract.
The Mortality and Expense Risk Charge will continue to be assessed after
annuitization if annuity payments are made on a variable basis. (See "Annuity
Payments.")

CONTINGENT DEFERRED SALES CHARGE

The Company does not make any deductions for sales expenses from purchase
payments at the time of purchase. The Contingent Deferred Sales Charge, when
applicable, is intended to assist the Company in covering its expenses
relating to the sale of the Contracts, including commissions, preparation of
sales literature and other promotional activity.

No Contingent Deferred Sales Charge will apply after a Contract reaches its
Maturity Date. You select a Maturity Date when applying for your Contract. The
Maturity Date selected must be at least 10 years after issue of the Contract.
Under current rules, the Company may consent to issue a Contract with a
Maturity Date less than 10 years after issue, provided that the Contract Owner
is an employer-sponsored pension plan through which Contracts were purchased
prior to May 1, 1994. (See "Election of Annuity" for more information.) A
Contingent Deferred Sales Charge will be imposed in the event of certain
partial and full surrenders and applications of proceeds to certain payment
options prior to the Maturity Date. Up to 10% of the Contract Value on the
date of surrender may be surrendered without charge in any one Contract Year.
If there is more than one partial surrender in a Contract Year, the amount
that may be surrendered without charge is 10% of the Contract Value on the
date of the first partial surrender during such year. No charge will be
imposed for payments made upon death or application of proceeds to variable
life income payment options (payment options 2, 3 or 6 as described under
"Annuity Options" below) prior to the Maturity Date. If the Contract has been
in force for five years, no charge will be applied upon the election of a
fixed life income payment option (comparable to payment options 2, 3 or 6 as
described under "Annuity Options" below but on a fixed basis). The Contingent
Deferred Sales Charge will be applied upon the election of other forms of
payment prior to the Maturity Date. Any such election will be treated as a
full surrender for purposes of calculating the applicable Contingent Deferred
Sales Charge. The Contingent Deferred Sales Charge applied will equal the
following amounts if the transaction occurs in the years indicated:

PERCENTAGE OF CONTRACT VALUE WITHDRAWN
(AFTER FREE WITHDRAWAL OF 10% OF THE CONTRACT VALUE)

<TABLE>
<CAPTION>
CONTRACT YEAR
---------------------------------------------------------------
1 2 3 4 5 6 7 8 9 10 11 AND AFTER
--- --- --- --- --- --- --- --- --- --- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
6.5% 6.0% 5.5% 5.0% 4.5% 4.0% 3.5% 3.0% 2.0% 1.0% 0%
</TABLE>

In cases where the Company has consented to issue a Contract with less than
10 years to the Maturity Date, the Contingent Deferred Sales Charge will be
calculated as though the year of the Maturity Date is the tenth Contract Year
(and the preceding Contract Year is the ninth year, and so forth) resulting in
a lower percentage charge for each Contract Year shown in the table above.

In no event will the total Contingent Deferred Sales Charge exceed 8% of the
first $50,000 of purchase payments made under the Contract and 6.5% of the
amount of purchase payments in excess of $50,000. (For Contracts issued on
individuals age 50 or above to employer-sponsored pension plans through which
contracts were purchased prior to May 1, 1994, a different Contingent Deferred
Sales Charge scale may apply. The applicable scale is indicated on the
schedule page of the Contract.)

The following example illustrates the circumstances under which the maximum
sales load would apply. It is hypothetical only and is not intended to suggest
that these performance results would necessarily be achieved. For historical
performance results see the tables starting on page II-4 of the Statement of
Additional Information.

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<PAGE>

EXAMPLE: Assume that you purchased a Contract with a $10,000 single purchase
payment and that you surrendered the Contract during the fifth
Contract Year when the Contract Value had grown to $19,850.

Using the Contingent Deferred Sales Charge schedule in the chart
above, the Contingent Deferred Sales Charge would be: 4.5% X (90% of
$19,850), or $804. However, because this is larger than the maximum
allowable charge (8% of the $10,000 purchase payment), your actual
Contingent Deferred Sales Charge would be only $800.

The Company currently waives the Contingent Deferred Sales Charge on
distributions that are intended to satisfy minimum distributions, as required
by tax law, calculated as if this Contract were the participant's only
retirement plan asset. This waiver only applies if the required minimum
distribution exceeds the free withdrawal amount and no previous surrenders
were made during the Contract Year. (See "Federal Income Tax Status--Taxation
of the Contracts.")

In the case of a partial surrender, the Contingent Deferred Sales Charge is
deducted from the Contract Value remaining after the Contract Owner has
received the amount requested and is a percentage of the total amount
withdrawn. For example, if you requested a partial surrender of $100 (after
previously surrendering 10% of the Contract Value free of charge in that
Contract Year) and the applicable Contingent Deferred Sales Charge was 5%, the
total amount of Contract Value withdrawn in that transaction would be $105.26.
After giving effect to a partial surrender, including deduction of the
Contingent Deferred Sales Charge, the remaining Contract Value must be at
least $500 (unless the Company consents to a lesser amount) or, if the
Contract is subject to an outstanding loan, the remaining unloaned Contract
Value must be at least 10% of the total Contract Value after the partial
surrender or $500, whichever is greater (unless the Company consents to a
lesser amount). If the requested partial surrender would not satisfy this
requirement, at the Contract Owner's option either the amount of the partial
surrender will be reduced or the transaction will be treated as a full
surrender and the Contingent Deferred Sales Charge deducted from the proceeds.
The Contingent Deferred Sales Charge is deducted from the sub-accounts in the
same proportion as the Contract Value that you requested to be surrendered.

The Contingent Deferred Sales Charge will be waived in connection with an
exchange by a Contract Owner of one Zenith Accumulator Contract for another
Zenith Accumulator Contract.

PREMIUM TAX CHARGES

Various states impose a premium tax on annuity purchase payments received by
insurance companies. The Company may deduct these taxes from purchase payments
and currently does so for Contracts subject to the insurance tax law of South
Dakota. Certain states may require the Company to pay the premium tax at
annuitization rather than when purchase payments are received. In those states
the Company may deduct the premium tax, calculated as a percentage of Contract
Value, on the date when annuity payments are to begin. Deductions for state
premium tax charges currently range from 1/2% to 1.00% of the Contract Value
or purchase payment for Contracts used with retirement plans qualifying for
tax benefited treatment under the Code and from 1.00% to 3.50% of the Contract
Value or purchase payment for all other Contracts. The Company may in the
future deduct premium taxes under Contracts subject to the insurance tax laws
of other states, or the applicable premium tax rates may change. See Appendix
B for a list of premium tax rates paid by the Company.

Surrender of a Contract may result in a credit against the premium tax
liability of the Company in certain States. In such event, the surrender
proceeds will be increased by the amount of such tax credit.

Premium tax rates are subject to being changed by law, administrative
interpretations or court decisions. Premium tax amounts will depend on, among
other things, the state of residence of the Annuitant and the insurance tax
law of the state.

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<PAGE>

OTHER EXPENSES

A deduction for an investment advisory fee is made from, and certain other
expenses are paid out of, the assets of each Eligible Fund. (See "Expense
Table.") The prospectuses and Statements of Additional Information of the
Eligible Funds describe these deductions and expenses.

CHARGES UNDER CONTRACTS PURCHASED BY EXCHANGING A FUND I OR PREFERENCE
CONTRACT

If a Contract is purchased by exchanging a variable annuity contract issued
by New England Variable Annuity Fund I (a "Fund I contract") or New England
Retirement Investment Account (a "Preference contract"), the sales charges
will be calculated as described below. There will be no Contingent Deferred
Sales Charge on the transfer of assets from a Fund I or Preference contract to
a Zenith Accumulator Contract.

A Contract issued in exchange for a Fund I contract will have no Contingent
Deferred Sales Charge. No further purchase payments will be permitted to be
made under a Contract purchased by exchanging a Fund I contract. If you
purchase a Contract by exchanging a Fund I contract and you also hold or
acquire another Zenith Accumulator Contract, the $30 Administration Contract
Charge will only be imposed on one of the Contracts. Total asset-based charges
(including the investment advisory fee) under Fund I contracts currently equal
approximately 1.35%.

A Contract issued in exchange for a Preference contract will have no
Contingent Deferred Sales Charge. Although Preference contracts were
originally issued subject to a contingent deferred sales charge, there are no
longer any Preference contracts subject to such a charge. Preference contracts
have asset-based charges of 1.25% for mortality and expense risks, but do not
have an asset-based administration charge. Preference contracts impose a $30
annual administration charge.

If you are contemplating an exchange of a Fund I or Preference contract for
a Zenith Accumulator Contract, you should compare the charges deducted under
your existing contract and under the Zenith Accumulator Contract for mortality
and expense risk charges, administrative charges and investment advisory fees.

ANNUITY PAYMENTS

ELECTION OF ANNUITY

When applying for a Contract, you select the Maturity Date and an annuity
payment option. The Maturity Date selected must be at least 10 years after
issue of the Contract. Under current rules, the Company may consent to issue a
Contract with a Maturity Date less than 10 years after issue, provided that
the Contract Owner is an employer-sponsored pension plan through which
Contracts were purchased prior to May 1, 1994. Such Contracts are only
available, however, to Annuitants who are age 50 or over at the time of issue.
In addition, the applications for such Contracts must satisfy the Company's
suitability guidelines and, in the case of Annuitants between the ages of 50
and 58 1/2 at the time of issue, the Maturity Date must be no earlier than the
date at which the Annuitant would reach age 59 1/2. Once a Maturity Date is
selected, you cannot change it to an earlier date. However, you may surrender
the Contract at any time before the Maturity Date and apply the surrender
proceeds to an annuity payment option. At any time before the Maturity Date,
you may elect to defer the Maturity Date, but you must obtain Company consent
to defer if on the later Maturity Date the age of the Annuitant at his or her
nearest birthday would be more than seventy-five. You may change the annuity
payment option at any time prior to the Maturity Date. You may elect to have
annuity payments under a Contract made on a variable basis or on a fixed
basis, or you may designate a portion to be paid on a variable basis and a
portion on a fixed basis. If you select payments on a fixed basis, the amount
of Contract Value applied to the fixed payment option (net of any applicable
charges described under "Administration Charges, Contingent Deferred Sales
Charge and Other Deductions") will be transferred to the general account of
the Company, and the annuity payments will be fixed in amount and duration by
the annuity payment option selected, the age of the Payee and, for Contracts
issued in New York or Oregon for use in situations not involving an employer-
sponsored plan, by the sex of the Payee. (See "Amount of Variable Annuity
Payments.")

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<PAGE>

Requests to defer the Maturity Date, change payment options or make other
elections relating to annuity payments should be sent to the Designated
Office. Contracts acquired by retirement plans qualifying for tax benefited
treatment may be subject to various requirements concerning the time by which
benefit payments must commence, the period over which such payments may be
made, the annuity payment options that may be selected, and the minimum annual
amounts of such payments. Penalty taxes or other adverse tax consequences may
occur upon failure to meet such requirements.

ANNUITY OPTIONS

Prior to annuitization, you may elect, subject to any applicable
restrictions of Federal tax law, to have payments made under any of the
annuity payment options provided in the Contract. Any such election depends
upon written notice to (and, for variable annuity payment options to begin
during the first Contract Year, consent of) the Company. Requests relating to
annuity payment options should be sent to the Designated Office. In the event
of your death, without having made an election of an annuity payment option,
the beneficiary can elect any of the available options listed below, subject
to applicable Federal tax law restrictions. Payments will begin on the
Maturity Date, as stated in your application or as subsequently deferred, or,
in the case of a full surrender as otherwise specified. Pursuant to your
election, the Company shall apply all or any part designated by you of the
value of your Contract, less any applicable Contingent Deferred Sales Charge
and Administration Contract Charge, to any one of the annuity payment options
described below.

Prior to annuitization (but only if the Annuitant is living), you may elect
to apply all or any part of the Death Proceeds under any one of the annuity
payment options listed below or in any other manner agreeable to the Company.

The total amount of the Contract Value or Death Proceeds which may be
applied to provide annuity payments will be reduced by any applicable charges
and by the amount of any outstanding loan plus accrued interest. (See "Loan
Provision for Certain Tax Benefited Retirement Plans.")

The Contract provides for the variable annuity payment options listed
below.*

First Option: Variable Income for a Specified Number of Years.** The
Company will make variable monthly payments for the number of years
elected, which may not be more than 30 except with the consent of the
Company. THIS OPTION CANNOT BE SELECTED FOR DEATH PROCEEDS.

Second Option: Variable Life Income. The Company will make variable
monthly payments which will continue: while the Payee is living***; while
the Payee is living but for at least ten years; or while the Payee is
living but for at least twenty years. (The latter two alternatives are
referred to as Variable Life Income with Period Certain Option.)

Third Option: Variable Life Income, Installment Refund. The Company will
make variable monthly payments during the life of the Payee but for a
period at least as long as the nearest whole number of months calculated by
dividing the amount applied to this Option by the amount of the first
monthly payment.

Sixth Option: Variable Life Income for Two Lives. The Company will make
variable monthly payments which will continue: while either of two Payees
is living (Joint and Survivor Variable Life Income)***, while either of two
Payees is living but for at least 10 years (Joint and Survivor Variable
Life Income, 10 Years Certain); while two Payees are living, and, after the
death of one while the other is still living, two-thirds to the survivor
(Joint and 2/3 to Survivor Variable Life Income).*** THIS OPTION CANNOT BE
SELECTED FOR DEATH PROCEEDS.
- --------
* Your Contract lists a fourth and fifth option . . . however, due to tax law
considerations, these options are not available on a fixed or variable
basis.
** Application of proceeds under this option upon surrender will result in the
imposition of any applicable charge described under "Contingent Deferred
Sales Charge."
*** IT IS POSSIBLE UNDER THIS OPTION TO RECEIVE ONLY ONE VARIABLE ANNUITY
PAYMENT IF THE PAYEE DIES (OR PAYEES DIE) BEFORE THE DUE DATE OF THE
SECOND PAYMENT OR TO RECEIVE ONLY TWO VARIABLE ANNUITY PAYMENTS IF THE
PAYEE DIES (OR PAYEES DIE) BEFORE THE DUE DATE OF THE THIRD PAYMENT, AND
SO ON.

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<PAGE>

Comparable fixed payment options are also available for all of the options
described above. In addition, other annuity payment options (including other
periods certain) may be available from time to time, and you should consult
the Company as to their availability. If you do not elect an annuity payment
option by the Maturity Date, variable payments under the Contract will be made
while the Payee is living but for at least ten years. (This is the Second
Option: Variable Life Income with Period Certain.) If installments under an
annuity payment option are less than $20, the Company can change the payment
intervals to 3, 6 or 12 months in order to increase each payment to at least
$20.

The Payee under the first, second and sixth variable payment option may
withdraw the commuted value of the period certain portions of the payments.
The commuted value of such payments is calculated based on the assumed
interest rate under the Contract. The life income portion of the payment
option cannot be commuted, and variable annuity payments based on that portion
will resume at the expiration of the period certain if the Annuitant is alive
at that time. (See "Amount of Variable Annuity Payments.") In addition, after
the death of the Payee under the first, second or third variable payment
option or the surviving Payee under the sixth variable payment option, a Payee
named to receive any unpaid payments certain may withdraw the commuted value
of the payments certain under the same terms described above.

The availability of certain annuity payment options may be restricted on
account of Company policy and Federal tax law, which among other things, may
restrict payment to the life expectancy of the payee.

The Company continues to assess the Mortality and Expense Risk Charge after
the Maturity Date if annuity payments are made under any variable annuity
payment option, including an option not involving a life contingency and under
which the Company bears no mortality risk.

AMOUNT OF VARIABLE ANNUITY PAYMENTS

At the Maturity Date (or any other application of proceeds to a payment
option), the Contract Value (reduced by any applicable charges and by any
outstanding loan plus accrued interest) is applied toward the purchase of
monthly annuity payments. The amount of monthly variable payments will be
determined on the basis of (i) annuity purchase rates not lower than the rates
set forth in the Life Income Tables contained in the Contract that reflect the
Payee's age, (ii) the assumed interest rate selected, (iii) the type of
payment option selected, and (iv) the investment performance of the Eligible
Funds selected. (The Fixed Account is not available under variable payment
options.)

The annuity purchase rates are used to calculate the basic payment level
purchased by the Contract Value. These rates vary according to the age of the
Payee. The higher the Payee's age at annuitization, the greater the basic
payment level under options involving life contingencies, because the Payee's
life expectancy and thus the period of anticipated income payments will be
shorter. With respect to Contracts issued in New York or Oregon for use in
situations not involving an employer-sponsored plan, purchase rates used to
calculate the basic payment level will also reflect the sex of the Payee.
Under such Contracts, a given Contract Value will produce a higher basic
payment level for a male Payee than for a female Payee, reflecting the greater
life expectancy of the female Payee. If the Contract Owner has selected an
annuity payment option that provides for a refund at death of the Payee or
that guarantees that payments will be made for the balance of a period of a
certain number of years after the death of the Payee, the Contract Value will
purchase lower monthly benefits.

The dollar amount of the initial variable annuity payment will be at the
basic payment level. The assumed interest rate under the Contract will affect
both this basic payment level and the amount by which subsequent payments
increase or decrease. Each payment after the first will vary with the
difference between the net investment performance of the sub-accounts selected
and the assumed interest rate under the Contract. If the actual net investment
rate exceeds the assumed interest rate, the dollar amount of the annuity
payments will increase. Conversely, if the actual rate is less than the
assumed interest rate, the dollar amount of the annuity payments will
decrease. If actual investment performance is equal to the assumed interest
rate, the monthly payments will remain level.

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<PAGE>

Unless otherwise provided, the assumed interest rate will be at an annual
rate of 3.5%. You may select as an alternative an annual assumed interest rate
of 0% or, if allowed by applicable law or regulation, 5%. A higher assumed
interest rate will produce a higher first payment, a more slowly rising series
of subsequent payments when the actual net investment performance exceeds the
assumed interest rate, and a more rapid drop in subsequent payments when the
actual net investment performance is less than the assumed interest rate.

You may, even after variable annuity payments have commenced, direct that
all or a portion of your investment in one sub-account be transferred to
another sub-account of the Variable Account in the manner provided under
"Transfer Privilege."

MINIMUM ANNUITY PAYMENTS

Annuity payments will be made monthly. But if any payment would be less than
$20, the Company may change the frequency so that payments are at least $20
each.

PROOF OF AGE, SEX AND SURVIVAL

The Company may require proof of age, sex (if applicable) and survival of
any person upon the continuation of whose life annuity payments depend.

The foregoing descriptions are qualified in their entirety by reference to
the Statement of Additional Information and to the Contract, which contains
detailed information about the various forms of annuity payment options
available, and other matters also of importance.

RETIREMENT PLANS OFFERING FEDERAL TAX BENEFITS

The Federal tax laws provide for a variety of retirement plans offering tax
benefits. These plans, which may be funded through the purchase of the
individual variable annuity contracts offered in this prospectus, include:

1. Plans qualified under Section 401(a), 401(k), or 403(a) of the Code
("Qualified Plans") (At this time, the Contracts are only available on a
limited basis to plans qualified under Section 401(k). Contracts are not
being offered to 401(k) plans unless such plans already own Contracts on
participants.);

2. Annuity purchase plans adopted by public school systems and certain
tax-exempt organizations pursuant to Section 403(b) of the Code ("TSA
Plans") which are funded solely by salary reduction contributions and which
are not otherwise subject to ERISA. (The Contracts are no longer being
offered through TSA Plans that are subject to ERISA.);

3. Individual retirement accounts adopted by or on behalf of individuals
pursuant to Section 408(a) of the Code and individual retirement annuities
purchased pursuant to Section 408(b) of the Code (both of which may be
referred to as "IRAs"), including simplified employee pension plans, which
are specialized IRAs that meet the requirements of Section 408(k) of the
Code ("SEPs" and "SARSEPs"). SARSEPs are only allowed if owned prior to
January 1, 1999;

4. Roth Individual Retirement Accounts under Section 408A of the Code
("Roth IRAs"). (In some states Roth IRAs are available under this Contract
only if you have an existing IRA.)

5. Eligible deferred compensation plans (within the meaning of Section
457 of the Code) for employees of state and local governments and tax-
exempt organizations ("Section 457 Plans"); and

6. Governmental plans (within the meaning of Section 414(d) of the Code)
for governmental employees, including Federal employees ("Governmental
Plans").

A-33
<PAGE>

the state and Federal tax aspects of such plans. At this time, the Contracts
are not being offered to plans qualified under Section 401(k) of the Code
unless such plans already own Contracts on participants, and are no longer
being offered through TSA Plans that are subject to ERISA. The Company will
not provide all the administrative support appropriate for 401(k) plans or TSA
Plans subject to ERISA. Accordingly, the Contract should not be purchased for
use with such plans.

A summary of the Federal tax laws regarding contributions to, and
distributions from, the above tax benefited retirement plans may be found
below under the heading "Special Rules for Annuities Purchased for Annuitants
Under Retirement Plans Qualifying for Tax Benefited Treatment." It should be
understood that should a tax benefited retirement plan lose its qualification
for tax-exempt status, employees will lose some of the tax benefits described
herein.

In the case of certain TSA Plans under Section 403(b)(1) of the Code, IRAs
purchased under Section 408(b) of the Code and Roth IRAs under Section 408A of
the Code, the individual variable annuity contracts offered in this prospectus
comprise the retirement "plan" itself. These Contracts will be endorsed, if
necessary, to comply with Federal and state legislation governing such plans,
and such endorsements may alter certain Contract provisions described in this
prospectus. Refer to the Contracts and any endorsements for more complete
information.

FEDERAL INCOME TAX STATUS

The following discussion is intended as a general description of the Federal
income tax aspects of the Contracts. It is not intended as tax advice. For
more complete information, you should consult a qualified tax advisor.

TAX STATUS OF THE COMPANY AND THE VARIABLE ACCOUNT

The Company is taxed as a life insurance company under the Code. The
Variable Account and its operations are part of the Company's total operations
and are not taxed separately. Under current law no taxes are payable by the
Company on the investment income and capital gains of the Variable Account.
Such income and gains will be retained in the Variable Account and will not be
taxable until received by the Annuitant or the Beneficiary in the form of
annuity payments or other distributions.

The Contracts provide that the Company may make a charge against the assets
of the Variable Account as a reserve for taxes which may relate to the
operations of the Variable Account.

TAXATION OF THE CONTRACTS

The variable annuity contracts described in this prospectus are considered
annuity contracts the taxation of which is governed by the provisions of
Section 72 of the Code. As a general proposition, Contract Owners are not
subject to current taxation on increases in the value of the Contracts
resulting from earnings or gains on the underlying mutual fund shares until
they are received by the Annuitant or Beneficiary in the form of distributions
or annuity payments. (Exceptions to this rule are discussed below under
"Special Rules for Annuities Used by Individuals or with Plans and Trusts Not
Qualifying Under the Code for Tax Benefited Treatment.")

Under the general rule of Section 72, to the extent there is an "investment"
in the Contract, a portion of each annuity payment is excluded from gross
income as a return of such investment. The balance of each annuity payment is
includible in gross income and taxable as ordinary income. Once the
"investment" in a contract has been fully recovered, the entire amount of each
annuity payment is includible in gross income and taxable as ordinary income.
In general, earnings on all contributions to the Contract and contributions
made to a Contract which are deductible by the contributor will not constitute
an "investment" in the Contract under Section 72.

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(a) SPECIAL RULES FOR ANNUITIES PURCHASED FOR ANNUITANTS UNDER RETIREMENT
PLANS QUALIFYING FOR TAX BENEFITED TREATMENT

Set forth below is a summary of the Federal tax laws applicable to
contributions to, and distributions from, retirement plans that qualify for
Federal tax benefits. Such plans are defined above under the heading
"Retirement Plans Offering Federal Tax Benefits." You should understand that
the following summary does not include everything you need to know regarding
such tax laws.

The Code provisions and the rules and regulations thereunder regarding
retirement trusts and plans, the documents which must be prepared and executed
and the requirements which must be met to obtain favorable tax treatment for
them are very complex. Some retirement plans are subject to distribution and
other requirements that are not incorporated into our Contract administration
procedures. Owners, participants and beneficiaries are responsible for
determining that contributions, distributions and other transactions with
respect to the Contracts comply with applicable law. An Owner's rights under
this Contract may be limited by the terms of the retirement plan with which it
is used. A person contemplating the purchase of a Contract for use with a
retirement plan qualifying for tax benefited treatment under the Code should
consult a qualified tax advisor as to all applicable Federal and state tax
aspects of the Contracts and, if applicable, as to the suitability of the
Contracts as investments under ERISA.

(i) Plan Contribution Limitations

Statutory limitations on contributions to retirement plans that qualify for
federal tax benefits may limit the amount of money that may be contributed to
the Contract in any Contract Year. Any purchase payments attributable to such
contributions may be tax deductible to the employer and are not currently
taxable to the Annuitants for whom the Contracts are purchased. The
contributions to the Contract and any increase in Contract Value attributable
to such contributions are not subject to taxation until payments from the
Contract are made to the Annuitant or his/her Beneficiaries.

TSA PLANS

Purchase payments attributable to TSA Plans are not includible within the
Annuitant's income to the extent such purchase payments do not exceed certain
statutory limitations, including the "exclusion allowance." The exclusion
allowance is a calculation which takes into consideration the Annuitant's
includible compensation, number of years of service, and prior years of
contributions. For more information, the Annuitant should obtain a copy of IRS
Publication 571 on TSA Programs for Employees of Public Schools and Certain
Tax Exempt Organizations which will better assist the Annuitant in calculating
the exclusion allowance and other limitations to which he or she may be
subject for any given tax year. Any purchase payments attributable to
permissible contributions under Code Section 403(b) (and earnings thereon) are
not taxable to the Annuitant until amounts are distributed from the Contract.
However, these payments may be subject to FICA (Social Security) and Medicare
taxes.

IRAs, SEPs, SARSEPs

The maximum tax deductible purchase payment which may be contributed each
year to an IRA is the lesser of $2,000 or 100 percent of includible
compensation if the taxpayer is not covered under an employer plan. A spousal
IRA is available if the taxpayer and spouse file a joint return and the spouse
is not yet age 70 1/2. The maximum tax deductible purchase payment which a
taxpayer may make to a spousal IRA is $2,000. If covered under an employer
plan, taxpayers are permitted to make deductible purchase payments; however,
for 2000, the deductions are phased out and eventually eliminated, on a pro
rata basis, for adjusted gross income between $32,000 and $42,000 for an
individual, between $52,000 and $62,000 for the covered spouse of a married
couple filing jointly, between $150,000 and $160,000 for the non-covered
spouse of a married couple filing jointly, and between $0 and $10,000 for a
married person filing separately. A taxpayer may also make nondeductible
purchase payments. However, the total of deductible and nondeductible purchase
payments may not exceed the limits described above for deductible payments. An
IRA is also the vehicle that receives contributions to SEPs and SARSEPs.
Maximum contributions (including elective deferrals) to SEPs and SARSEPs are
currently limited to the lesser of 15% of compensation (generally up to
$170,000 for 2000) or $30,000. For more information concerning

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the contributions to IRAs, SEPs and SARSEPs, you should obtain a copy of IRS
Publication 590 on Individual Retirement Accounts. In addition to the above,
an individual may make a "rollover" contribution into an IRA with the proceeds
of certain distributions (as defined in the Code) from a Qualified Plan.

ROTH IRAs

In some states Roth IRAs are available under this Contract, subject to the
following limitations.

Eligible individuals can contribute to a Roth IRA. Contributions to a Roth
IRA are not deductible and must be made in cash or as a rollover or transfer
from another Roth IRA or other IRA. A rollover from or conversion of an IRA to
a Roth IRA may be subject to tax and other special rules may apply. The
maximum purchase payment which may be contributed each year to a Roth IRA is
the lesser of $2,000 or 100 percent of includible compensation. A spousal Roth
IRA is available if the taxpayer and spouse file a joint return. The maximum
purchase payment that a taxpayer may make to a spousal Roth IRA is $2,000.
Except in the case of a rollover or a transfer, no more than $2,000 can be
contributed in aggregate to all IRAs and Roth IRAs of either spouse during any
tax year. The Roth IRA contribution may be limited to less than $2,000
depending on the taxpayer's adjusted gross income ("AGI"). The maximum
contribution begins to phase out if the taxpayer is single and the taxpayer's
AGI is more than $95,000 or if the taxpayer is married and files a joint tax
return and the taxpayer's AGI is more than $150,000. The taxpayer may not
contribute to a Roth IRA if the taxpayer's AGI is over $110,000 (if the
taxpayer is single), $160,000 (if the taxpayer is married and files a joint
tax return), or $10,000 (if the taxpayer is married and files separate tax
returns). You should consult a tax adviser before combining any converted
amounts with any other Roth IRA contributions, including any other conversion
amounts from other tax years. To use the Contract in connection with a Roth
IRA, you must have an existing Contract that was issued in connection with an
IRA.

SECTION 457 PLANS

Generally, under a Section 457 Plan, an employee or executive may defer
income under a written agreement in an amount equal to the lesser of 33 1/3%
of includible compensation or $8,000. The amounts so deferred (including
earnings thereon) by an employee or executive electing to contribute to a
Section 457 Plan are includible in gross income only in the tax year in which
such amounts are paid or made available to that employee or executive or
his/her Beneficiary. With respect to a Section 457 Plan for a nonprofit
organization other than a governmental entity, (i) once contributed to the
plan, any Contracts purchased with employee contributions remain the sole
property of the employer and may be subject to the general creditors of the
employer and (ii) the employer retains all ownership rights to the Contract
including voting and redemption rights which may accrue to the Contract(s)
issued under the plan. The plans may permit participants to specify the form
of investment for their deferred compensation account. Depending on the terms
of the particular plan, a non-governmental employer may be entitled to draw on
deferred amounts for purposes unrelated to its Section 457 Plan obligations.

QUALIFIED PLANS

Code section 401(a) permits employers to establish various types of
retirement plans for employees and permits self-employed individuals to
establish retirement plans for themselves and their employees. These
retirement plans may permit the purchase of the Contracts to accumulate
retirement savings under the plans. Adverse tax consequences to the plan, to
the participant or to both may result if this Contract is assigned or
transferred to any individual as a means to provide benefit payments.

(ii) Distributions from the Contract

MANDATORY WITHHOLDING ON CERTAIN DISTRIBUTIONS

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required by the Code or in a specified annuity form. After December 31, 1999
permissible hardship withdrawals from TSA and 401(k) plans will no longer be
treated as an "eligible rollover distribution." Withholding can be avoided by
arranging a direct transfer of the eligible rollover distribution to a
Qualified Plan, TSA or IRA.

QUALIFIED PLANS, TSA PLANS, IRAS, ROTH IRAS, SEPS, SARSEPS AND GOVERNMENTAL
PLANS

Payments made from the Contracts held under a Qualified Plan, TSA Plan, IRA,
SEP, SARSEP or Governmental Plan are taxable under Section 72 of the Code as
ordinary income, in the year of receipt. Any amount received in surrender of
all or part of the Contract Value prior to annuitization will, subject to
restrictions and penalties discussed below, also be included in income in the
year of receipt. If there is any "investment in the Contract," a portion of
each amount received is excluded from gross income as a return of such
investment. Distributions or withdrawals prior to age 59 1/2 may be subject to
a penalty tax of 10% of the amount includible in income. This penalty tax does
not apply: (i) to distributions of excess contributions or deferrals; (ii) to
distributions made on account of the Annuitant's death, retirement, disability
or early retirement at or after age 55; (iii) when distribution from the
Contract is in the form of an annuity over the life or life expectancy of the
Annuitant (or joint lives or life expectancies of the Annuitant and his or her
Beneficiary); or (iv) when distribution is made pursuant to a qualified
domestic relations order. In the case of IRAs, SEPs and SARSEPS, the
exceptions for distributions on account of early retirement at or after age 55
or made pursuant to a qualified domestic relations order do not apply but
other exceptions may apply. A tax-free rollover may be made once each year
among individual retirement arrangements subject to the conditions and
limitations described in the Code.

Distributions from a Roth IRA generally are not taxed, except that, once
aggregate distributions exceed contributions to the Roth IRA, income tax and a
10% penalty tax may apply to distributions made (1) before age 59 1/2 (subject
to certain exceptions) or (2) during the five taxable years starting with the
year in which the first contribution is made to any Roth IRA. A 10% penalty
may apply to amounts attributable to a conversion from an IRA if they are
distributed during the five taxable years beginning with the year in which the
conversion was made.

If the Annuitant dies before distributions begin, distributions must be
completed within five years after death, unless payments begin within one year
after death and are made over a period not extending beyond the life (or life
expectancy) of the Beneficiary. Except under a Roth IRA, if the Annuitant's
spouse is the Beneficiary, distributions need not begin until the Annuitant
would have reached age 70 1/2. If the Annuitant dies after annuity payments
have begun, payments must continue to be made at least as rapidly as payments
made before death.

With respect to TSA Plans, elective contributions to the Contract made after
December 31, 1988 and any increases in Contract Value after that date may not
be distributed prior to attaining age 59 1/2, termination of employment, death
or disability. Contributions (but not earnings) made after December 31, 1988
may also be distributed by reason of financial hardship. These restrictions on
withdrawal will not apply to the Contract Value as of December 31, 1988. These
restrictions are not expected to change the circumstances under which
transfers to other investments which qualify for tax free treatment under
Section 403(b) of the Code may be made.

Except under a Roth IRA, annuity payments, periodic payments or annual
distributions must generally commence by April 1 of the calendar year
following the year in which the Annuitant attains age 70 1/2. In the case of a
Qualified Plan or a Governmental Plan, if the Annuitant is not a "five-percent
owner" as defined in the Code, these distributions must begin by the later of
the date determined by the preceding sentence or the year in which the
Annuitant retires. Each annual distribution must equal or exceed a "minimum
distribution amount" which is determined by minimum distribution rules under
the plan. A penalty tax of up to 50% of the amount which should be distributed
may be imposed by the IRS for failure to distribute the required minimum
distribution amount. The Company currently waives the Contingent Deferred
Sales Charge on distributions that are intended to satisfy required minimum
distributions, calculated as if this Contract were the participant's only
retirement plan asset. This waiver only applies if the required minimum
distribution exceeds the free withdrawal amount and no previous surrenders
were made during the Contract Year. Rules regarding required minimum
distributions apply to IRAs (including SEP and SARSEPs), Qualified Plans, TSA
Plans and Governmental Plans.

Other restrictions with respect to election, commencement, or distribution
of benefits may apply under the Contracts or under the terms of the Qualified
Plans in respect of which the Contracts are issued.

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SECTION 457 PLANS

When a distribution under a Contract held under a Section 457 Plan is made
to the Annuitant, such amounts are taxed as ordinary income in the year in
which received. The plan must not permit distributions prior to the
Annuitant's separation from service (except in the case of unforeseen
emergency).

Generally, annuity payments, periodic payments or annual distributions must
commence by April 1 of the calendar year following the year in which the
Annuitant attains age 70 1/2 and meet other distribution requirements. Minimum
distributions under a Section 457 Plan may be further deferred if the
Annuitant remains employed with the sponsoring employer. Each annual
distribution must equal or exceed a "minimum distribution amount" which is
determined by distribution rules under the plan. If the Annuitant dies before
distributions begin, the same special distribution rules generally apply in
the case of Section 457 Plans as apply in the case of Qualified Plans, TSA
Plans, IRAs, SEPs, SARSEPs and Governmental Plans. These rules are discussed
above in the immediately preceding section of this prospectus. An exception to
these rules provides that if the beneficiary is other than the Annuitant's
spouse, distribution must be completed within 15 years of death, regardless of
the beneficiary's life expectancy.

(b) SPECIAL RULES FOR ANNUITIES USED BY INDIVIDUALS OR WITH PLANS AND TRUSTS NOT
QUALIFYING UNDER THE CODE FOR TAX BENEFITED TREATMENT

For a Contract held by an individual, any increase in the accumulated value
of the Contract is not taxable until amounts are received, either in the form
of annuity payments as contemplated by the Contract or in a full or partial
lump sum settlement of the Company's obligations to the Contract Owner.

Under Section 72(u) of the Code, however, Contracts held by other than a
natural person (i.e. those held by a corporation or certain trusts) generally
will not be treated as an annuity contract for Federal income tax purposes.
This means a Contract Owner who is not a natural person will have to include
in income any increase during the taxable year in the accumulated value over
the investment in the Contract.

Section 817(h) of the Code requires the investments of the Variable Account
to be "adequately diversified" in accordance with Treasury Regulations.
Failure to do so means the variable annuity contracts described herein will
cease to qualify as annuities for Federal income tax purposes. Regulations
specifying the diversification requirements have been issued by the Department
of the Treasury, and the Company believes it complies fully with these
requirements.

In certain circumstances, owners of variable annuity contracts may be
considered the owners, for federal income tax purposes, of the assets of the
separate accounts used to support their contracts. In those circumstances,
income and gains from the separate account assets would be includible in the
variable contract owner's gross income. The IRS has stated in published
rulings that a variable contract owner will be considered the owner of
separate account assets if the contract owner possesses incidents of ownership
in those assets, such as the ability to exercise investment control over the
assets. The ownership rights under the Contract are similar to, but also
different in certain respects from, those described by the IRS in rulings in
which it was determined that contract owners were not owners of separate
account assets. For example, a Contract Owner has additional flexibility in
allocating premium payments and account values. These differences could result
in a Contract Owner being treated as the owner of a pro rata portion of the
assets of the Variable Account. In addition, the Company does not know what
standards will be set forth, if any, in regulations or rulings which the
Treasury Department may issue. The Company therefore reserves the right to
modify the Contract as necessary to attempt to prevent a Contract Owner from
being considered the owner of a pro rata share of the assets of the Variable
Account.

Any amount received in a surrender of all or part of the Contract Value
(including an amount received as a systematic withdrawal) prior to
annuitization will be included in gross income to the extent of any increases
in the value of the Contract resulting from earnings or gains on the
underlying mutual fund shares.

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The Code also imposes a ten percent penalty tax on amounts received under a
Contract, before or after annuitization, which are includible in gross income.
The penalty tax will not apply to any amount received under the Contract (1)
after the Contract Owner has attained age 59 1/2, (2) after the death of the
Contract Owner, (3) after the Contract Owner has become totally and
permanently disabled, (4) as one of a series of substantially equal periodic
payments made for the life (or life expectancy) of the Contract Owner or the
joint lives (or life expectancies) of the Contract Owner and a Beneficiary,
(5) if the Contract is purchased under certain types of retirement plans or
arrangements, (6) allocable to investments in the Contract before August 14,
1982, or (7) if the Contract is an immediate annuity contract.

In the calculation of any increase in value for contracts entered into after
October 4, 1988, all annuity contracts issued by the Company or its affiliates
to the same Contract Owner within a calendar year will be treated as one
contract.

If a Contract Owner or Annuitant dies, the tax law requires certain
distributions from the Contract. (See "Payment on Death Prior to
Annuitization.") Generally, such amounts are includible in the income of the
recipient as follows: (1) if distributed in a lump sum, they are taxed in the
same manner as a full surrender as described above; or (2) if distributed
under an Annuity Option, they are taxed in the same manner as Annuity
payments, as described above. For these purposes, the investment in the
Contract is not affected by the Contract Owner's (or Annuitant's) death. That
is, the investment in the Contract remains the amount of any purchase payments
paid which were not excluded from gross income.

A transfer of ownership of a Contract, the designation of an Annuitant,
Payee or other Beneficiary who is not also an Owner, the selection of certain
Maturity Dates, or the exchange of a Contract may result in certain tax
consequences that are not discussed herein. Anyone contemplating any such
designation, transfer, assignment, selection, or exchange should contact a
competent tax advisor with respect to the potential tax effects of such a
transaction.

TAX WITHHOLDING

The Code and the laws of certain states require tax withholding on
distributions made under annuity contracts, unless the recipient has made an
election not to have any amount withheld. The Company provides recipients with
an opportunity to instruct it as to whether taxes are to be withheld.

POSSIBLE CHANGES IN TAXATION

Although the likelihood of legislative change is uncertain, there is always
the possibility that the tax treatment of the Contracts could change by
legislation or other means. It is also possible that any change could be
retroactive (that is, effective prior to the date of the change). A tax
adviser should be consulted with respect to legislative developments and their
effect on the Contract.

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VOTING RIGHTS

The Company is the legal owner of the Eligible Fund shares held in the
Variable Account and has the right to vote those shares at meetings of the
Eligible Fund shareholders. However, to the extent required by Federal
securities law, the Company will give you, as Contract Owner, the right to
instruct the Company how to vote the shares that are attributable to your
Contract.

Prior to annuitization, the number of votes as to which you have a right of
instruction is determined by applying your percentage interest in a sub-
account to the total number of votes attributable to the sub-account. After
annuitization, the number of votes attributable to your Contract is determined
by applying the percentage interest reflected by the reserve for your Contract
to the total number of votes attributable to the sub-account. After
annuitization the votes attributable to your Contract decrease as reserves
underlying the Contract decrease.

Contract Owners who are entitled to give voting instructions and the number
of shares as to which they have a right of instruction will be determined as
of the record date for the meeting. All Eligible Fund shares held in any sub-
account of the Variable Account, or any other registered (or to the extent
voting privileges are granted by the issuing insurance company, unregistered)
separate accounts of the Company or any affiliate for which no timely
instructions are received will be voted for, against, or withheld from voting
on any proposition in the same proportion as the shares held in that sub-
account for all policies or contracts for which voting instructions are
received.

All Eligible Fund shares held by the general investment account (or any
unregistered separate account for which voting privileges are not extended) of
the Company or its affiliates will be voted in the same proportion as the
aggregate of (i) the shares for which voting instructions are received and
(ii) the shares that are voted in proportion to such voting instructions.

The SEC requires the Eligible Funds' Board of Trustees to monitor events to
identify conflicts that may arise from the sale of shares to variable life and
variable annuity separate accounts of affiliated and, if applicable,
unaffiliated insurance companies. Conflicts could arise as a result of changes
in state insurance law or Federal income tax law, changes in investment
management of any portfolio of the Eligible Funds, or differences between
voting instructions given by variable life and variable annuity contract
owners, for example. If there is a material conflict, the Boards of Trustees
will have an obligation to determine what action should be taken, including
the removal of the affected sub-account(s) from the Eligible Fund(s), if
necessary. If the Company believes any Eligible Fund action is insufficient,
the Company will consider taking other action to protect Contract Owners.
There could, however, be unavoidable delays or interruptions of operations of
the Variable Account that the Company may be unable to remedy.

Each Contract Owner is a policyholder of the Company and is entitled to vote
at the Company's Annual Meeting of Policyholders.

DISTRIBUTION OF CONTRACTS

New England Securities Corporation, the principal underwriter of the
Contracts and a wholly-owned subsidiary of NELICO, is a broker-dealer
registered under the Securities Exchange Act of 1934 and a member of the
National Association of Securities Dealers, Inc. Commissions of 3% of purchase
payments will be paid by the Company to the New England Securities registered
representative involved in the sale of a Contract if the Maturity Date
selected at issue is ten or more years after issue of the Contract. Lower
commissions will be paid if the Maturity Date selected at issue is less than
ten years after issue. A maximum override of .75% of purchase payments made
after the first Contract Year will be paid by the Company to the general agent
involved in the transaction.

New England Securities Corporation may enter into selling agreements with
other broker-dealers registered under the Securities Exchange Act of 1934
whose representatives are authorized by applicable law to sell variable

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annuity contracts. Commissions paid to such broker-dealers will not exceed 3%
of purchase payments. Commissions will be paid through the registered broker-
dealer, which may also be reimbursed for all or part of the expenses incurred
by the broker-dealer in connection with the sale of the Contracts.

THE FIXED ACCOUNT

A Fixed Account option is included under Contracts issued in those states
where it has been approved by the state insurance department. You may allocate
net purchase payments and may transfer Contract Value in the Variable Account
to the Fixed Account, which is part of the Company's general account. The
Fixed Account offers diversification to a Variable Account contract, allowing
the Contract Owner to protect principal and earn, at least, a guaranteed rate
of interest.

Because of exemptive and exclusionary provisions, interests in the Fixed
Account have not been registered under the Securities Act of 1933, and neither
the Fixed Account nor the general account has been registered as an investment
company under the Investment Company Act of 1940. Therefore, neither the
general account, the Fixed Account nor any interests therein are generally
subject to the provisions of these Acts, and the Company has been advised that
the staff of the Securities and Exchange Commission does not review
disclosures relating to the general account. Disclosures regarding the Fixed
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.

GENERAL DESCRIPTION OF THE FIXED ACCOUNT

The Company's general account consists of all assets owned by the Company
other than those in the Variable Account and the Company's other separate
accounts. The Company has sole discretion over the investment of assets in the
general account, including those in the Fixed Account. Contract Owners do not
share in the actual investment experience of the assets in the Fixed Account.
Instead, the Company guarantees that Contract Values in the Fixed Account will
be credited with interest at an effective annual net rate of at least 4.5% or
3%, depending on the date when your Contract was issued. The Company is not
obligated to credit interest at a rate higher than the minimum guaranteed rate
applicable to your Contract, although in its sole discretion it may do so. The
Company declares the current interest rate for the Fixed Account periodically.
Contract Values in the Fixed Account will be credited with interest daily.

The Company has the right to modify its method of crediting interest. Under
its current method, any net purchase payment or portion of Contract Value
allocated to the Fixed Account will earn interest at the declared annual rate
in effect on the date of the allocation. On each Contract Anniversary, the
Company will determine a portion, from 0% to 100%, of your Contract Value in
the Fixed Account which will earn interest at the Company's declared annual
rate in effect on the Contract Anniversary. The effective interest rate
credited at any time to your Contract Value in the Fixed Account will be a
weighted average of all the Fixed Account rates for your Contract. (See
"Contract Value and Fixed Account Transactions" below for a description of the
interest rate which will be applied to Contract loan repayments allocated to
the Fixed Account.)

CONTRACT VALUE AND FIXED ACCOUNT TRANSACTIONS

A Contract's total Contract Value will include its Contract Value in the
Variable Account, its Contract Value in the Fixed Account and, for Contracts
under which Contract loans are available, any of its Contract Value held in
the Company's general account (but outside the Fixed Account) as a result of a
Contract loan.

The annual $30 Administration Contract Charge will be deducted
proportionately from the Contract Value in the Fixed Account and in the
Variable Account. Unless you request otherwise, a partial surrender or
Contract loan will reduce the Contract Value in the sub-accounts of the
Variable Account and the Fixed Account proportionately.

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Except as described below, amounts in the Fixed Account are subject to the
same rights and limitations as are amounts in the Variable Account with
respect to transfers, surrenders, partial surrenders and Contract loans. The
following special rules apply to transfers and Contract loan repayments
involving the Fixed Account.

You may transfer amounts from the Fixed Account to the Variable Account once
----------------------------------------------------------------------------
each year within 30 days after the Contract anniversary. The amount of
- ----------------------------------------------------------------------
Contract Value which may be transferred from the Fixed Account is limited to
- ----------------------------------------------------------------------------
the greater of 25% of the Contract Value in the Fixed Account and $1,000,
- -------------------------------------------------------------------------
except with the consent of the Company. Also, after the transfer is effected,
- ---------------------------------------
Contract Value may not be allocated among more than ten of the accounts,
including the Fixed Account. The Company intends to restrict transfers of
Contract Value into the Fixed Account in the following circumstances: (1) for
the remainder of a Contract Year if an amount is transferred out of the Fixed
Account in that same Contract Year; (2) if the interest rate which would be
credited to the transferred amount would be equivalent to an annual effective
rate of 3% or 4.5% (whichever is the minimum guaranteed Fixed Account interest
rate for your Contract); or (3) if the total Contract Value in the Fixed
Account equals or exceeds a maximum amount established by the Company.

If any portion of a Contract loan was attributable to Contract Value in the
Fixed Account, then an equal portion of each loan repayment must be allocated
to the Fixed Account. (For example, if 50% of the loan was attributable to
your Fixed Account Contract Value, then 50% of each loan repayment will be
allocated to the Fixed Account.) See "Loan Provision for Certain Tax Benefited
Retirement Plans." The rate of interest for each loan repayment applied to the
Fixed Account will be the lesser of: (1) the effective interest rate for your
Contract on the date the loan repayment is applied to the Fixed Account; and
(2) the current Fixed Account interest rate set by the Company in advance for
that date.

The Company reserves the right to delay transfers, surrenders, partial
surrenders and Contract loans from the Fixed Account for up to six months.

FINANCIAL STATEMENTS

The financial statements of the Variable Account and the Company may be
found in the Statement of Additional Information.

INVESTMENT PERFORMANCE INFORMATION

The Company may advertise performance by illustrating hypothetical average
annual total returns for each sub-account of the Variable Account, based on
the actual investment experience of the Eligible Funds since their inception
and for the year-to-date, one, three, five, and ten year periods ending with
the date of the illustration. Such performance information will be accompanied
by SEC standard performance information for each sub-account, based on the
actual investment experience of the sub-account since its inception and for
the one, five, and ten year periods ending with the date of the information
shown. See "Calculation of Performance Data" in the Statement of Additional
Information and Appendix C of this prospectus.

The Company may also illustrate how the average annual total return for a
five year period was determined by illustrating the average annual total
return for each year in the five year period ending with the date of the
illustration. Such illustrations are based on the same assumptions and reflect
the same expenses and deductions described in the preceding paragraph. See
"Calculation of Performance Data" in the Statement of Additional Information
for an example of this type of illustration and Appendix C of this prospectus
for more information about how average annual total returns are calculated.

The Company may illustrate what would have been the growth and value of a
single $10,000 purchase payment for the Contract if it had been invested in
each of the Eligible Funds on the first day of the first month after those
Eligible Funds commenced operations. These illustrations show Contract Value
and surrender value,

A-42
<PAGE>

calculated in the same manner as when they are used to arrive at average
annual total return, as of the end of each year, ending with the date of the
illustration. The surrender values reflect the deduction of any applicable
Contingent Deferred Sales Charge, but do not reflect the deduction of any
premium tax charge. These illustrations may also show annual percentage
changes in Contract Value and surrender value, cumulative returns, and annual
effective rates of return. The difference between the Contract Value or
surrender value at the beginning and at the end of each year is divided by the
beginning Contract Value or surrender value to arrive at the annual percentage
change. The cumulative return is determined by taking the difference between
the $10,000 investment and the ending Contract Value or surrender value and
dividing it by $10,000. The annual effective rate of return is calculated in
the same manner as average annual total return. See "Calculation of
Performance Data" in the Statement of Additional Information for examples of
these illustrations and more information about how they are calculated.

The Variable Account may update the performance history of one or more of
its sub-accounts on a quarterly basis by illustrating the one, three, five,
and ten year values (or since inception, if less) of a single $10,000 purchase
payment invested at the beginning of such periods using the same method of
calculation described in the preceding paragraph, but using the periods ending
with the date of the quarterly illustration. Such illustrations will show the
Contract Value at the end of the period and the cumulative return and annual
effective rate of return for the period. The illustration may also include the
cumulative return and annual effective rate of return of an appropriate
securities index and the Consumer Price Index for the same period.

The Company may illustrate what would have been the change in value of a
$100 monthly purchase payment plan if the monthly payments had been invested
in each of the Eligible Funds on the first day of each month starting with the
first day of the first month after those Eligible Funds commenced operations.
These illustrations show cumulative payments, Contract Value and surrender
value as of the end of each year, ending with the date of the illustration.
Surrender values reflect the deduction of any applicable Contingent Deferred
Sales Charge. The illustrations also show annual effective rates of return,
which represent the compounded annual rates that the hypothetical purchase
payments would have had to earn in order to produce the Contract Value and
surrender value as of the date of the illustration. See "Calculation of
Performance Data" in the Statement of Additional Information for examples of
these illustrations and more information about how they are calculated.

The Variable Account may make available illustrations showing historical
Contract Values and the annual effective rate of return, based upon
hypothetical purchase payment amounts and frequencies, which can be selected
by the client. The method of calculation described in the preceding paragraph
will be used, but the illustration will reflect the effect of any premium tax
charge applicable in the state where the illustration is delivered. The
beginning date of the illustration can be selected by the client. Contract
Values will be shown as of the end of each calendar year in the period and as
of the end of the most recent calendar quarter.

Historical investment performance may also be illustrated by showing the
percentage change in the Accumulation Unit Value and annual effective rate of
return of a sub-account without reflecting the deduction of any Contingent
Deferred Sales Charge, premium tax charge, or the annual $30 Administration
Contract Charge, all of which have the effect of reducing historical
performance. The percentage change in unit value and annual effective rate of
return of each sub-account may be shown from inception of the Eligible Fund to
the date of the report and for the year-to-date, one year, three year, five
year, and ten year periods ending with the date of the report. The percentage
change in unit value and annual effective rate of return also may be compared
with the percentage change and annual effective rate for the Dow Jones
Industrial Average and S&P 500 Stock Index, as well as other unmanaged indices
of stock and bond performance and the Consumer Price Index, as described in
the Statement of Additional Information in the Notes to the illustration of
Annual Percentage Change in Contract Value and Annual Percentage Change in
Surrender Value for a $10,000 Single Purchase Payment Contract. The percentage
change is calculated by dividing the difference in unit or index values at the
beginning and end of the period by the beginning unit or index value. See the
Statement of Additional Information for a description of the method for
calculating the annual effective rate of return in this illustration.

In addition, the Company may illustrate how variable annuity income payments
under the Contract and commuted values of annuity income options change with
investment performance over periods of time; such

A-43
<PAGE>

illustrations may be hypothetical (based on assumed uniform annual rates of
return) or historical (based on historical annual returns of the sub-
accounts). See "Hypothetical Illustrations of Annuity Income Payouts" and
"Historical Illustrations of Annuity Income Payouts" in the Statement of
Additional Information for a description of these illustrations.

From time to time the Company may advertise (in sales literature or
advertising material) performance rankings of the sub-accounts of the Variable
Account assigned by independent services, such as Variable Annuity Research
and Data Services ("VARDS"). VARDS monitors and ranks the performance of
variable annuity accounts on an industry-wide basis in each of the major
categories of investment objectives. The performance analysis prepared by
VARDS ranks accounts on the basis of total return calculated using
Accumulation Unit Values. Thus, the effect of the Contingent Deferred Sales
Charge and Administration Contract Charge assessed under the Contracts is not
taken into consideration.

From time to time, articles discussing the Variable Account's investment
experience, performance rankings and other characteristics may appear in
national publications. Some or all of these publishers or ranking services
(including, but not limited to, Lipper Analytical Services, Inc. and
Morningstar) may publish their own rankings or performance reviews of variable
contract separate accounts, including the Variable Account. References to,
reprints or portions of reprints of such articles or rankings may be used by
the Company as sales literature or advertising material and may include
rankings that indicate the names of other variable contract separate accounts
and their investment experience.

The Company is a member of the Insurance Marketplace Standards Association
("IMSA"), and as such may include the IMSA logo and information about IMSA
membership in its advertisements. Companies that belong to IMSA subscribe to a
set of ethical standards covering the various aspects of sales and service for
individually sold life insurance and annuities.

A-44
<PAGE>

ACCUMULATION UNIT VALUES
(FOR AN ACCUMULATION UNIT OUTSTANDING THROUGHOUT THE PERIOD)

THE NEW ENGLAND VARIABLE ACCOUNT
CONDENSED FINANCIAL INFORMATION

<TABLE>
<CAPTION>
BACK BAY
ADVISORS
MONEY
MARKET
SUB-
ACCOUNT
--------
9/29/88* 1/1/89 1/1/90 1/1/91 1/1/92 1/1/93 1/1/94 1/1/95 1/1/96 1/1/97
TO TO TO TO TO TO TO TO TO TO
12/31/88 12/31/89 12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
-------- --------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Accumulation
Unit Value at
beginning of
period....... 1.384 1.408 1.518 1.620 1.697 1.738 1.766 1.811 1.889 1.959
2. Accumulation
Unit Value at
end of
period....... 1.408 1.518 1.620 1.697 1.738 1.766 1.811 1.889 1.959 2.036
3. Number of
Accumulation
Units
outstanding
at end of
period....... 915,605 7,661,069 21,629,006 26,332,938 26,759,532 25,016,975 30,220,356 33,015,018 33,412,517 26,785,902
<CAPTION>
1/1/98 1/1/99
TO TO
12/31/98 12/31/99
---------- ----------
<S> <C> <C>
1. Accumulation
Unit Value at
beginning of
period....... 2.036 2.114
2. Accumulation
Unit Value at
end of
period....... 2.114 2.190
3. Number of
Accumulation
Units
outstanding
at end of
period....... 33,716,959 36,481,209
</TABLE>

<TABLE>
<CAPTION>
BACK BAY
ADVISORS
BOND
INCOME
SUB-
ACCOUNT
--------
10/5/88* 1/1/89 1/1/90 1/1/91 1/1/92 1/1/93 1/1/94 1/1/95 1/1/96 1/1/97
TO TO TO TO TO TO TO TO TO TO
12/31/88 12/31/89 12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
-------- --------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Accumulation
Unit Value at
beginning of
period....... 1.631 1.634 1.810 1.930 2.247 2.398 2.664 2.540 3.037 3.134
2. Accumulation
Unit Value at
end of
period....... 1.634 1.810 1.930 2.247 2.398 2.664 2.540 3.037 3.134 3.429
3. Number of
Accumulation
Units
outstanding
at end of
period....... 299,002 4,287,540 10,139,527 17,797,335 28,871,719 41,939,487 41,657,182 42,231,987 41,138,874 37,260,367
<CAPTION>
SALOMON
BROTHERS
STRATEGIC
BOND
OPPORTUNITIES
SUB-ACCOUNT
-----------
1/1/98 1/1/99 10/31/94* 1/1/95* 1/1/96 1/1/97 1/1/98 1/1/99
TO TO TO TO TO TO TO TO
12/31/98 12/31/99 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
---------- ---------- ------------ --------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Accumulation
Unit Value at
beginning of
period....... 3.429 3.689 1.000 0.984 1.159 1.307 1.433 1.442
2. Accumulation
Unit Value at
end of
period....... 3.689 3.622 0.984 1.159 1.307 1.433 1.442 1.443
3. Number of
Accumulation
Units
outstanding
at end of
period....... 38,630,894 32,707,422 1,124,133 6,132,563 15,034,554 23,074,669 24,945,159 20,278,882
</TABLE>
- -----

* Date these sub-accounts were first available.

A-45
<PAGE>

<TABLE>
<CAPTION>
SALOMON
BROTHERS BACK BAY
U.S. ADVISORS
GOVERNMENT MANAGED
SUB- SUB-
ACCOUNT ACCOUNT**
---------- ---------
10/31/94* 1/1/95 1/1/96 1/1/97 1/1/98 1/1/99 9/21/88* 1/1/89 1/1/90 1/1/91
TO TO TO TO TO TO TO TO TO TO
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99 12/31/88 12/31/89 12/31/90 12/31/91
---------- --------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Accumulation
Unit Value at
beginning of
period....... 1.000 1.004 1.139 1.161 1.242 1.319 1.042 1.063 1.250 1.272
2. Accumulation
Unit Value at
end of
period....... 1.004 1.139 1.161 1.242 1.319 1.304 1.063 1.250 1.272 1.508
3. Number of
Accumulation
Units
outstanding
at end of
period....... 910,020 4,495,184 5,785,148 8,616,135 12,796,204 10,314,952 731,349 9,179,207 18,099,540 26,478,398

<CAPTION>
1/1/92 1/1/93 1/1/94 1/1/95 1/1/96 1/1/97 1/1/98 1/1/99
TO TO TO TO TO TO TO TO
12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Accumulation
Unit Value at
beginning of
period....... 1.508 1.588 1.733 1.691 2.190 2.485 3.103 3.664
2. Accumulation
Unit Value at
end of
period....... 1.588 1.733 1.691 2.190 2.485 3.103 3.664 3.975
3. Number of
Accumulation
Units
outstanding
at end of
period....... 41,588,546 60,696,659 61,961,278 56,145,463 52,130,165 48,490,618 42,358,784 37,391,028
</TABLE>

<TABLE>
<CAPTION>
ALGER
EQUITY
BALANCED GROWTH
SUB- SUB-
ACCOUNT ACCOUNT
--------- ---------
10/31/94 1/1/95 1/1/96* 1/1/97 1/1/98 1/1/99 10/31/94* 1/1/95 1/1/96 1/1/97
TO TO TO TO TO TO TO TO TO TO
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99 12/31/94 12/31/95 12/31/96 12/31/97
--------- ---------- ---------- ---------- ---------- ---------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Accumulation Unit
Value at
beginning of
period....... 1.000 0.997 1.227 1.415 1.622 1.747 1.000 0.956 1.402 1.566
2. Accumulation
Unit Value at
end of
period....... 0.997 1.227 1.415 1.622 1.747 1.636 0.956 1.402 1.566 1.941
3. Number of
Accumulation
Units
outstanding
at end of
period....... 1,736,189 10,987,597 20,107,324 28,677,041 30,824,135 27,038,754 1,857,319 24,163,685 40,025,594 44,518,891

<CAPTION>
1/1/98 1/1/99
TO TO
12/31/98 12/31/99
---------- ----------
<S> <C> <C>
1. Accumulation Unit
Value at
beginning of
period....... 1.941 2.829
2. Accumulation
Unit Value at
end of
period....... 2.829 3.744
3. Number of
Accumulation
Units
outstanding
at end of
period....... 49,255,773 60,072,409
</TABLE>

<TABLE>
<CAPTION>
CAPITAL
GROWTH
SUB-
ACCOUNT
--------
9/16/88* 1/1/89 1/1/90 1/1/91 1/1/92 1/1/93 1/1/94 1/1/95 1/1/96 1/1/97
TO TO TO TO TO TO TO TO TO TO
12/31/88 12/31/89 12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
-------- --------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Accumulation
Unit Value
at beginning
of period.... 4.645 4.612 5.950 5.666 8.608 7.978 9.050 8.298 11.300 13.496
2. Accumulation
Unit Value
at end of
period....... 4.612 5.950 5.666 8.608 7.978 9.050 8.298 11.300 13.496 16.442
3. Number of
Accumulation
Units
outstanding
at end
of period.... 439,393 5,337,778 12,591,788 21,719,884 33,645,983 40,091,665 43,592,961 41,663,900 41,363,155 40,200,592

DAVIS
VENTURE
VALUE
SUB-
ACCOUNT
---------
1/1/98 1/1/99 10/31/94* 1/1/95 1/1/96 1/1/97 1/1/98 1/1/99
TO TO TO TO TO TO TO TO
12/31/98 12/31/99 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
---------- ---------- --------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Accumulation
Unit Value
at beginning
of period.... 21.752 16.442 1.000 0.963 1.323 1.643 2.163 2.442
2. Accumulation
Unit Value
at end of
period....... 24.831 21.752 0.963 1.323 1.643 2.163 2.442 2.831
3. Number of
Accumulation
Units
outstanding
at end
of period.... 33,502,039 38,236,116 3,499,719 19,608,688 34,997,024 53,997,107 58,765,470 57,370,889
</TABLE>
- ------
* Date these sub-accounts were first available.

** These sub-accounts are only available through Contracts purchased prior to
May 1, 1995.

A-46
<PAGE>

<TABLE>
<CAPTION>
HARRIS
OAKMARK LOOMIS
MID CAP SAYLES
VALUE SMALL CAP
SUB- SUB-
ACCOUNT ACCOUNT
--------- ---------
10/1/93* 1/1/94 1/1/95 1/1/96 1/1/97 1/1/98 1/1/99 5/2/94* 1/1/95 1/1/96
TO TO TO TO TO TO TO TO TO TO
12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99 12/31/94 12/31/95 12/31/96
--------- ---------- ---------- ---------- ---------- ---------- ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Accumulation
Unit Value at
beginning of
period....... 1.125 1.137 1.119 1.439 1.669 1.932 1.802 1.000 0.959 1.219
2. Accumulation
Unit Value at
end of
period....... 1.137 1.119 1.439 1.669 1.932 1.802 1.784 0.959 1.219 1.572
3. Number of
Accumulation
Units
outstanding
at end of
period....... 4,515,611 15,572,344 19,773,057 24,345,379 24,035,279 21,347,155 17,151,815 2,988,971 13,533,326 26,307,748

<CAPTION>
WESTPEAK
GROWTH
AND INCOME
SUB-
ACCOUNT
----------
1/1/97 1/1/98 1/1/99 10/1/93* 1/1/94 1/1/95 1/1/96 1/1/97 1/1/98 1/1/99
TO TO TO TO TO TO TO TO TO TO
12/31/97 12/31/98 12/31/99 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Accumulation
Unit Value at
beginning of
period....... 1.572 1.936 1.878 1.105 1.132 1.103 1.486 1.731 2.279 2.799
2. Accumulation
Unit Value at
end of
period....... 1.936 1.878 2.441 1.132 1.103 1.486 1.731 2.279 2.799 3.019
3. Number of
Accumulation
Units
outstanding
at end of
period....... 39,442,109 40,318,239 32,700,411 3,359,317 16,092,325 21,168,965 26,104,465 30,306,103 35,514,558 35,663,197
</TABLE>

<TABLE>
<CAPTION>
MORGAN
STANLEY
WESTPEAK INTERNATIONAL
STOCK MAGNUM
INDEX EQUITY
SUB- SUB-
ACCOUNT** ACCOUNT
--------- -------------
1/1/92* 1/1/93 1/1/94 1/1/95 1/1/96 1/1/97 1/1/98 1/1/99 10/31/94* 1/1/95
TO TO TO TO TO TO TO TO TO TO
12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99 12/31/94 12/31/95
--------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Accumulation
Unit Value at
beginning of
period....... 1.592 1.644 1.780 1.775 2.398 2.898 3.788 4.781 1.000 1.024
2. Accumulation
Unit Value at
end of
period....... 1.540 1.780 1.775 2.398 2.898 3.788 4.781 5.678 1.024 1.073
3. Number of
Accumulation
Units
outstanding
at end of
period....... 2,583,607 11,017,884 14,282,355 15,539,608 15,623,253 15,874,978 15,292,906 15,111,062 2,916,120 11,062,106

<CAPTION>
1/1/96 1/1/97 1/1/98 1/1/99
TO TO TO TO
12/31/96 12/31/97 12/31/98 12/31/99
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
1. Accumulation
Unit Value at
beginning of
period....... 1.073 1.129 1.100 1.164
2. Accumulation
Unit Value at
end of
period....... 1.129 1.100 1.164 1.431
3. Number of
Accumulation
Units
outstanding
at end of
period....... 16,322,862 17,243,803 16,325,447 14,501,457
</TABLE>

<TABLE>
<CAPTION>
EQUITY-
INCOME OVERSEAS
SUB- SUB-
ACCOUNT ACCOUNT
--------- ----------
10/1/93* 1/1/94 1/1/95 1/1/96 1/1/97 1/1/98 1/1/99 10/1/93* 1/1/94 1/1/95
TO TO TO TO TO TO TO TO TO TO
12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99 12/31/93 12/31/94 12/31/95
--------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Accumulation
Unit Value at
beginning of
period....... 1.980 1.992 2.104 2.804 3.162 3.996 4.401 1.458 1.532 1.538
2. Accumulation
Unit Value at
end of
period....... 1.992 2.104 2.804 3.162 3.996 4.401 4.617 1.532 1.538 1.664
3. Number of
Accumulation
Units
outstanding
at end of
period....... 5,649,743 25,852,849 38,010,655 44,037,798 45,104,192 42,926,506 37,676,846 10,878,551 43,034,544 41,273,183

<CAPTION>
1/1/96 1/1/97 1/1/98 1/1/99
TO TO TO TO
12/31/96 12/31/97 12/31/98 12/31/99
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
1. Accumulation
Unit Value at
beginning of
period....... 1.664 1.859 2.046 2.276
2. Accumulation
Unit Value at
end of
period....... 1.859 2.046 2.276 3.202
3. Number of
Accumulation
Units
outstanding
at end of
period....... 44,846,316 45,289,247 40,546,153 36,251,177
</TABLE>
- ----
* Date these sub-accounts were first available.
**These sub-accounts are only available through Contracts purchased prior to
May 1, 1995.

Information on units and unit values is useful because they affect the
calculation of Contract Values. The value of a Contract is determined by
multiplying the number of Accumulation Units in each sub-account credited to
the Contract by the Accumulation Unit Value of the sub-account. The
Accumulation Unit Value of a sub-account depends in part on the net investment
experience of the Eligible Fund in which it invests. See "Contract Value and
Accumulation Unit Value" for more information.

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

A-47
<PAGE>

APPENDIX A

CONSUMER TIPS

DOLLAR COST AVERAGING

Dollar cost averaging allows a person to take advantage of the historical
long-term stock market results, assuming that they continue, although it does
not guarantee a profit or protect against a loss. If an investor follows a
program of dollar cost averaging on a long-term basis and the stock fund
selected performs at least as well as the S&P 500 has historically, it is
likely although not guaranteed that the price at which shares are surrendered,
for whatever reason, will be higher than the average cost per share.

An investor using dollar cost averaging invests the same amount of money in
the same professionally managed fund at regular intervals over a long period
of time. Dollar cost averaging keeps an investor from investing too much when
the price of shares is high and too little when the price is low. When the
price of shares is low, the money invested buys more shares. When it is high,
the money invested buys fewer shares. If the investor has the ability and
desire to maintain this program over a long period of time (for example, 20
years), and the stock fund chosen follows the historical upward market trends,
the price at which the shares are sold should be higher than their average
cost. The price could be lower, however, if the fund chosen does not follow
these historical trends.

Investors contemplating the use of dollar cost averaging should consider
their ability to continue the on-going purchases so that they can take
advantage of periods of low price levels.

DIVERSIFICATION

Diversifying investment choices can enhance returns, by providing a wider
opportunity for safe returns, and reduce risks, by spreading the chance of
loss. Holding a single investment requires of that investment a safe return
because a loss may risk the entire investment. By diversifying, on the other
hand, an investor can more safely take a chance that some investments will
under-perform and that others will over-perform. Thus an investor can
potentially earn a better-than-average rate of return on a diversified
portfolio than on a single safe investment. This is because, although portions
of a diversified investment may be totally lost, other portions may perform at
above-average rates that more than compensate for the loss.

MISCELLANEOUS

Toll-free telephone --A recording of daily unit values is available by
service: calling 1-800-333-2501.

--Fund transfers and changes of future purchase
payment allocations can be made by calling 1-800-
435-4117.

Written Communications: --All communications and inquiries regarding
address changes, premium payments, billing, fund
transfers, surrenders, loans, maturities and any
other processing matters relating to your
Contract should be directed to:

New England Annuities
P.O. Box 642
Back Bay Annex
Boston, Mass 02116

A-48
<PAGE>

APPENDIX B

PREMIUM TAX

Premium tax rates are subject to change. At present the Company pays premium
taxes in the following jurisdictions at the rates shown.

<TABLE>
<CAPTION>
CONTRACTS USED WITH TAX
JURISDICTION QUALIFIED RETIREMENT PLANS ALL OTHER CONTRACTS
- ------------ -------------------------- -------------------
<S> <C> <C>
California....................... 0.50% 2.35%
Maine............................ -- 2.00%
Nevada........................... -- 3.50%
Puerto Rico...................... 1.00% 1.00%
South Dakota..................... -- 1.25%
West Virginia.................... 1.00% 1.00%
Wyoming.......................... -- 1.00%
</TABLE>

See "Premium Tax Charges" in the prospectus for more information about how
premium taxes affect the Contracts.

A-49
<PAGE>

APPENDIX C

AVERAGE ANNUAL TOTAL RETURN

The tables below illustrate average annual total returns for each sub-
account for the periods shown, based on the actual investment experience of
the sub-accounts, and the Eligible Funds during those periods. The tables do
not represent what may happen in the future.

The Variable Account was not established until July, 1987. The Contracts
were not available until September, 1988. The Capital Growth, Back Bay
Advisors Bond Income and Back Bay Advisors Money Market Series commenced
operations on August 26, 1983. The Westpeak Growth and Income and Harris
Oakmark Mid Cap Value (formerly the Goldman Sachs Midcap Value Series)
commenced operations on April 30, 1993. The VIP Equity-Income Portfolio
commenced operations on October 9, 1986, and the VIP Overseas Portfolio
commenced operations on January 28, 1987. The Westpeak Stock Index and Back
Bay Advisors Managed Series commenced operations on May 1, 1987. The Loomis
Sayles Small Cap Series commenced operations on May 2, 1994. The other Zenith
Fund Series commenced operations on October 31, 1994. The Putnam International
Stock Portfolio commenced operations on May 1, 1991 and became available to
Zenith Accumulator Contractholders on May 1, 2000.

Calculations of average annual total return are based on the assumption that
a single investment of $1,000 was made at the beginning of each period shown.
The figures do not reflect the effect of any premium tax charges, which apply
in certain states, and which would reduce the results shown.

The average annual total return is related to surrender value and is
calculated as follows. The amount of the assumed $1,000 purchase payment for a
Contract issued at the beginning of the period is divided by the Accumulation
Unit Value of each sub-account at the beginning of the period shown to arrive
at the number of Accumulation Units purchased. The number of Accumulation
Units is reduced on each Contract anniversary to reflect deduction of the
annual $30 Administration Contract Charge from the Contract Value. Each such
$30 deduction reduces the number of units held under the Contract by an amount
equal to $30 divided by the Accumulation Unit Value on the date of the
deduction. The total number of units held under the Contract at the beginning
of the last Contract Year covered by the period shown is multiplied by the
Accumulation Unit Value on December 31, 1999 to arrive at the Contract Value
on that date. This Contract Value is then reduced by the applicable Contingent
Deferred Sales Charge and by the portion of the $30 Administration Contract
Charge which would be deducted upon surrender on December 31, 1999 to arrive
at the surrender value. The average annual total return is the annual
compounded rate of return which would produce the surrender value on December
31, 1999. In other words, the average annual total return is the rate which,
when added to 1, raised to a power reflecting the number of years in the
period shown, and multiplied by the initial $1,000 investment, yields the
surrender value at the end of the period. The average annual total returns
assume that no premium tax charge has been deducted.

Sub-account average annual total return, which is calculated in accordance
with the SEC standardized formula, uses the inception date of the sub-account
through which the Eligible Fund shown is available. Fund total return adjusted
for Contract charges uses the inception date of the Eligible Fund shown, and
therefore may reflect periods prior to the availablity of the corresponding
sub-account under the Contract. THIS INFORMATION DOES NOT INDICATE OR
REPRESENT FUTURE PERFORMANCE.

SUB-ACCOUNT AVERAGE ANNUAL TOTAL RETURN

For purchase payment allocated to the Back Bay Advisors Money Market Series:

<TABLE>
<CAPTION>
PERIOD ENDING DECEMBER 31, 1999
-------------------------------
<S> <C>
1 Year.............................................................. -4.87%
5 Years............................................................. 0.19%
10 Years............................................................ 0.87%
Since Inception of the Sub-Account.................................. 1.44%
</TABLE>

A-50
<PAGE>

For purchase payment allocated to the Back Bay Advisors Bond Income Series:

<TABLE>
<CAPTION>
PERIOD ENDING DECEMBER 31, 1999
-------------------------------
<S> <C>
1 Year............................................................. -9.94%
5 Years............................................................ 4.04%
10 Years........................................................... 4.85%
Since Inception of the Sub-Account................................. 5.12%

For purchase payment allocated to the Salomon Brothers Strategic Bond
Opportunities Series:

<CAPTION>
PERIOD ENDING DECEMBER 31, 1999
-------------------------------
<S> <C>
1 Year............................................................. -8.16%
5 Years............................................................ 4.72%
Since Inception of the Sub-Account................................. 4.06%

For purchase payment allocated to the Salomon Brothers U.S. Government
Series:

<CAPTION>
PERIOD ENDING DECEMBER 31, 1999
-------------------------------
<S> <C>
1 Year............................................................. -9.35%
5 Years............................................................ 1.90%
Since Inception of the Sub-Account................................. 1.81%

For purchase payment allocated to the Back Bay Advisors Managed Series:*

<CAPTION>
PERIOD ENDING DECEMBER 31, 1999
-------------------------------
<S> <C>
1 Year............................................................. -.20%
5 Years............................................................ 15.66%
10 Years........................................................... 9.99%
Since Inception of the Sub-Account................................. 10.52%

For purchase payment allocated to the Balanced Series:**

<CAPTION>
PERIOD ENDING DECEMBER 31, 1999
-------------------------------
<S> <C>
1 Year............................................................. -14.23%
5 Years............................................................ 7.34%
Since Inception of the Sub-Account................................. 6.88%

For purchase payment allocated to the Alger Equity Growth Series:

<CAPTION>
PERIOD ENDING DECEMBER 31, 1999
-------------------------------
<S> <C>
1 Year............................................................. 22.35%
5 Years............................................................ 28.52%
Since Inception of the Sub-Account................................. 26.48%

For purchase payment allocated to the Capital Growth Series:

<CAPTION>
PERIOD ENDING DECEMBER 31, 1999
-------------------------------
<S> <C>
1 Year............................................................. 5.15%
5 Years............................................................ 21.63%
10 Years........................................................... 13.21%
Since Inception of the Sub-Account................................. 14.19%

For purchase payment allocated to the Davis Venture Value Series:

<CAPTION>
PERIOD ENDING DECEMBER 31, 1999
-------------------------------
<S> <C>
1 Year............................................................. 6.84%
5 Years............................................................ 21.27%
Since Inception of the Sub-Account................................. 19.53%
</TABLE>
- --------

* These sub-accounts are only available through Contracts purchased prior to
May 1, 1995.

** The Balanced Series' subadviser was Loomis Sayles & Company, L.P. until May
1, 2000 when Wellington Management Company LLP became the subadviser.

A-51
<PAGE>

For purchase payment allocated to the Harris Oakmark Mid Cap Value Series:**

<TABLE>
<CAPTION>
PERIOD ENDING DECEMBER 31, 1999
-------------------------------
<S> <C>
1 Year.............................................................. -9.18%
5 Years............................................................. -6.75%
Since Inception of the Sub-Account.................................. 4.61%

For purchase payment allocated to the Loomis Sayles Small Cap Series:

<CAPTION>
PERIOD ENDING DECEMBER 31, 1999
-------------------------------
<S> <C>
1 Year.............................................................. 20.13%
5 Years............................................................. 17.58%
Since Inception of the Sub-Account.................................. 13.96%

For purchase payment allocated to the Westpeak Growth and Income Series:

<CAPTION>
PERIOD ENDING DECEMBER 31, 1999
-------------------------------
<S> <C>
1 Year.............................................................. -0.78%
5 Years............................................................. 19.43%
Since Inception of the Sub-Account.................................. 14.52%

For purchase payment allocated to the Westpeak Stock Index Series:*

<CAPTION>
PERIOD ENDING DECEMBER 31, 1999
-------------------------------
<S> <C>
1 Year.............................................................. 9.52%
5 Years............................................................. 23.31%
Since Inception of the Sub-Account.................................. 14.89%

For purchase payment allocated to the Morgan Stanley International Magnum
Equity Series:

<CAPTION>
PERIOD ENDING DECEMBER 31, 1999
-------------------------------
<S> <C>
1 Year.............................................................. 13.47%
5 Years............................................................. 3.19%
Since Inception of the Sub-Account.................................. 3.42%

For purchase payment allocated to the VIP Overseas Portfolio:

<CAPTION>
PERIOD ENDING DECEMBER 31, 1999
-------------------------------
<S> <C>
1 Year.............................................................. 30.28%
5 Years............................................................. 12.31%
Since Inception of the Sub-Account.................................. 10.09%

For purchase payment allocated to the VIP Equity-Income Portfolio:

<CAPTION>
PERIOD ENDING DECEMBER 31, 1999
-------------------------------
<S> <C>
1 Year.............................................................. -3.60%
5 Years............................................................. 14.09%
Since Inception of the Sub-Account.................................. 11.66%
</TABLE>
- --------

* These sub-accounts are only available through Contracts purchased prior to
May 1, 1995.

** Harris Associates L.P. became the subadviser on May 1, 2000. Prior to that
time other entities served as subadvisers.

A-52
<PAGE>

FUND TOTAL RETURN ADJUSTED FOR CONTRACT CHARGES

For purchase payment allocated to the Back Bay Advisors Money Market Series:

<TABLE>
<CAPTION>
PERIOD ENDING DECEMBER 31, 1999
-------------------------------
<S> <C>
1 Year............................................................. -4.87%
5 Years............................................................ 0.19%
10 Years........................................................... 0.87%
Since Inception of the Fund........................................ 2.56%

For purchase payment allocated to the Back Bay Advisors Bond Income Series:

<CAPTION>
PERIOD ENDING DECEMBER 31, 1999
-------------------------------
<S> <C>
1 Year............................................................. -9.94%
5 Years............................................................ 4.04%
10 Years........................................................... 4.85%
Since Inception of the Fund........................................ 6.36%

For purchase payment allocated to the Salomon Brothers Strategic Bond
Opportunities Series:

For purchase payment allocated to the Salomon Brothers U.S. Government
Series:

For purchase payments allocated to the Back Bay Advisors Managed Series:*

For purchase payment allocated to the Balanced Series:**

- --------

* These sub-accounts are only available through Contracts purchased prior to
May 1, 1995.

** The Balanced Series' subadviser was Loomis Sayles & Company, L.P. until May
1, 2000 when Wellington Management Company LLP became the subadviser.

A-53
<PAGE>

For purchase payment allocated to the Alger Equity Growth Series:

<TABLE>
<CAPTION>
PERIOD ENDING DECEMBER 31, 1999
-------------------------------
<S> <C>
1 Year.............................................................. 22.35%
5 Years............................................................. 28.52%
Since Inception of the Fund......................................... 26.48%

For purchase payment allocated to the Capital Growth Series:

<CAPTION>
PERIOD ENDING DECEMBER 31, 1999
-------------------------------
<S> <C>
1 Year.............................................................. 5.15%
5 Years............................................................. 21.63%
10 Years............................................................ 13.21%
Since Inception of the Fund......................................... 20.90%

For purchase payment allocated to the Davis Venture Value Series:

<CAPTION>
PERIOD ENDING DECEMBER 31, 1999
-------------------------------
<S> <C>
1 Year.............................................................. 6.84%
5 Years............................................................. 21.27%
Since Inception of the Fund......................................... 19.53%

For purchase payment allocated to the Harris Oakmark Mid Cap Value Series:**

<CAPTION>
PERIOD ENDING DECEMBER 31, 1999
-------------------------------
<S> <C>
1 Year.............................................................. -9.18%
5 Years............................................................. 6.75%
Since Inception of the Fund......................................... 6.30%

For purchase payment allocated to the Loomis Sayles Small Cap Series:

<CAPTION>
PERIOD ENDING DECEMBER 31, 1999
-------------------------------
<S> <C>
1 Year.............................................................. 20.13%
5 Years............................................................. 17.58%
Since Inception of the Fund......................................... 13.96%

For purchase payment allocated to the Westpeak Growth and Income Series:

<CAPTION>
PERIOD ENDING DECEMBER 31, 1999
-------------------------------
<S> <C>
1 Year.............................................................. -0.78%
5 Years............................................................. 19.43%
Since Inception of the Fund......................................... 15.33%

For purchase payments allocated to the Westpeak Stock Index Series:*

<CAPTION>
PERIOD ENDING DECEMBER 31, 1999
-------------------------------
<S> <C>
1 Year.............................................................. 9.52%
5 Years............................................................. 23.31%
10 Years............................................................ 13.86%
Since Inception of the Fund......................................... 12.59%
</TABLE>

- --------

* These sub-accounts are only available through Contracts purchased prior to
May 1, 1995.

** Harris Associates L.P. became the subadviser on May 1, 2000. Prior to that
time, other entities served as subadviser.

A-54
<PAGE>

For purchase payment allocated to the Morgan Stanley International Magnum
Equity Series:

<TABLE>
<CAPTION>
PERIOD ENDING DECEMBER 31, 1999
-------------------------------
<S> <C>
1 Year.............................................................. 13.47%
5 Years............................................................. 3.19%
Since Inception of the Fund......................................... 3.42%

For purchase payment allocated to the VIP Overseas Portfolio:

<CAPTION>
PERIOD ENDING DECEMBER 31, 1999
-------------------------------
<S> <C>
1 Year.............................................................. 30.28%
5 Years............................................................. 12.31%
10 Years............................................................ 7.10%
Since Inception of the Fund......................................... 6.79%

For purchase payment allocated to the VIP Equity-Income Portfolio:

<CAPTION>
PERIOD ENDING DECEMBER 31, 1999
-------------------------------
<S> <C>
1 Year.............................................................. -3.60%
5 Years............................................................. 14.09%
10 Years............................................................ 10.68%
Since Inception of the Fund......................................... 10.23%

For purchase payment allocated to the Putnam International Stock Portfolio:

<CAPTION>
PERIOD ENDING DECEMBER 31, 1999
-------------------------------
<S> <C>
1 Year.............................................................. 5.84%
5 Years............................................................. 1.41%
Since Inception of the Fund......................................... 3.23%
</TABLE>

Information is available illustrating the impact of fund performance on
annuity payouts. For examples, see "Historical Illustrations of Annuity Income
Payments" and "Hypothetical Illustrations of Annuity Income Payments" in the
Statement of Additional Information.

A-55
<PAGE>

TABLE OF CONTENTS
OF
STATEMENT OF ADDITIONAL INFORMATION

<TABLE>
<CAPTION>
Page
-----
<S> <C>
HISTORY................................................................... II-3
SERVICES RELATING TO THE VARIABLE ACCOUNT AND THE CONTRACTS............... II-3
PERFORMANCE COMPARISONS................................................... II-3
CALCULATION OF PERFORMANCE DATA........................................... II-4
NET INVESTMENT FACTOR..................................................... II-22
ANNUITY PAYMENTS.......................................................... II-22
HYPOTHETICAL ILLUSTRATIONS OF ANNUITY INCOME PAYOUTS...................... II-24
HISTORICAL ILLUSTRATIONS OF ANNUITY INCOME PAYOUTS........................ II-27
EXPERTS................................................................... II-30
LEGAL MATTERS............................................................. II-30
APPENDIX A................................................................ II-31
FINANCIAL STATEMENTS...................................................... F-1
</TABLE>

If you would like to obtain a copy of the Statement of Additional
Information, please complete the request form below and mail to:

New England Securities Corporation
399 Boylston Street
Boston, Massachusetts 02116

...............................................................................

Please send a copy of the Statement of Additional
Information of The New England Variable Account to:

-------------------------------------------------------
Name

-------------------------------------------------------
Street

-------------------------------------------------------
City State Zip

A-56
<PAGE>

RECEIPT

This is to acknowledge receipt of a Zenith Accumulator Prospectus dated May
1, 2000.

ZENITH ACCUMULATOR
INDIVIDUAL VARIABLE ANNUITY CONTRACTS
ISSUED BY
METROPOLITAN LIFE INSURANCE COMPANY
ONE MADISON AVENUE
NEW YORK, NEW YORK 10010

DESIGNATED OFFICE:
NEW ENGLAND LIFE INSURANCE COMPANY
501 BOYLSTON STREET
BOSTON, MASSACHUSETTS 02116-3700

_____________________________________ _____________________________________
(Date) (Client's Signature)
<PAGE>

ZENITH ACCUMULATOR

Individual Variable Annuity Contracts
Issued By

Metropolitan Life Insurance Company
One Madison Avenue
New York, New York 10010

Designated Office:
New England Life Insurance Company
501 Boylston Street
Boston, Massachusetts 02116
(617) 578-2000

SUPPLEMENT DATED MAY 1, 2000

TO THE PROSPECTUS DATED APRIL 30, 1999

This supplement updates certain information in the prospectus dated April
30, 1999, describing individual flexible and single purchase payment variable
annuity contracts (the "Contracts") funded by The New England Variable Account
(the "Variable Account"). You should read and retain this supplement. Certain
additional information about the Contracts is contained in a Statement of
Additional Information dated May 1, 2000, as it may be supplemented from time
to time, which has been filed with the Securities and Exchange Commission and
is incorporated herein by reference. A complete prospectus dated May 1, 2000,
as well as the Statement of Additional Information, may be obtained free of
charge by writing to New England Securities Corporation at 399 Boylston
Street, Boston, Massachusetts 02116 or telephoning 1-800-365-5015.

THE SECURITIES AND EXCHANGE COMMISSION MAINTAINS A WEBSITE THAT CONTAINS THE
STATEMENT OF ADDITIONAL INFORMATION, MATERIAL INCORPORATED BY REFERENCE, AND
OTHER INFORMATION REGARDING REGISTRANTS THAT FILE ELECTRONICALLY WITH THE
SECURITIES AND EXCHANGE COMMISSION. THE ADDRESS OF THE SITE IS
HTTP://WWW.SEC.GOV.

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED THESE SECURITIES OR
DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.

THE ELIGIBLE FUND PROSPECTUSES ARE ATTACHED. PLEASE READ THEM AND KEEP THEM
FOR REFERENCE.

DURING THE FOURTH QUARTER OF 2000, WE ANTICIPATE REPLACING THE MORGAN
STANLEY INTERNATIONAL MAGNUM EQUITY SERIES WITH THE PUTNAM INTERNATIONAL STOCK
PORTFOLIO, SUBJECT TO REGULATORY APPROVALS.

<PAGE>

HIGHLIGHTS

Condensed financial information containing the accumulation unit value
history appears at the end of this supplement.

EXPENSE TABLE

VARIABLE ACCOUNT

A-2
<PAGE>

NEW ENGLAND ZENITH FUND

OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 1999
(AS A PERCENTAGE OF AVERAGE NET ASSETS AFTER CURRENT EXPENSE CAP OR EXPENSE
DEFERRAL)(6)

<TABLE>
<CAPTION>
HARRIS LOOMIS
DAVIS OAKMARK SAYLES WESTPEAK WESTPEAK MORGAN STANLEY
VENTURE MID CAP SMALL GROWTH STOCK INTERNATIONAL
VALUE VALUE CAP AND INCOME INDEX MAGNUM EQUITY
SERIES SERIES SERIES SERIES SERIES(7) SERIES
------- ------- ------ ---------- --------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Management
Fee....... .75% .75% .90% .68% .25% .90%
Other Ex-
penses.... .06% .13% .10% .06% .10% .40%
--- --- ---- --- --- ----
Total Se-
ries Op-
erating
Expenses. .81% .88% 1.00% .74% .35% 1.30%
</TABLE>

METROPOLITAN SERIES FUND, INC.

OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 1999
(AS A PERCENTAGE OF AVERAGE NET ASSETS)(8)

<TABLE>
<CAPTION>
PUTNAM
INTERNATIONAL
STOCK
PORTFOLIO
-------------
<S> <C>
Management Fee.................................................... .90%
Other Expenses.................................................... .22%

----
Total Portfolio Operating Expenses.............................. 1.12%
</TABLE>
- --------
* Availability of this Portfolio is subject to any necessary state insurance
department approvals.

VARIABLE INSURANCE PRODUCTS FUND

OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 1999
(AS A PERCENTAGE OF AVERAGE NET ASSETS PRIOR TO EXPENSE REDUCTIONS)(9)

A-3
<PAGE>

- --------

EXAMPLE (NOTE: The examples below are hypothetical. Although we base them on
the expenses shown in the expense table above, the examples are not
representations of past or future performance or expenses. Actual performance
and/or expenses may be more or less than shown.(10)) For purchase payments
allocated to each of the Series indicated:

A-4
<PAGE>

EXAMPLE (NOTE: THE EXAMPLES BELOW ARE HYPOTHETICAL. ALTHOUGH WE BASE THEM ON
THE EXPENSES SHOWN IN THE EXPENSE TABLE ABOVE, THE EXAMPLES ARE NOT
REPRESENTATIONS OF PAST OR FUTURE PERFORMANCE OR EXPENSES. ACTUAL PERFORMANCE
AND/OR EXPENSES MAY BE MORE OR LESS THAN SHOWN.(10)) FOR PURCHASE PAYMENTS
ALLOCATED TO THE PORTFOLIO INDICATED:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Putnam International Stock Portfolio....... $85.57 $131.97 $180.15 $297.33

<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Putnam International Stock Portfolio....... $25.68 $ 78.87 $134.62 $285.96
</TABLE>

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
VIP Overseas Portfolio..................... $83.59 $126.02 $170.15 $276.80
VIP Equity-Income Portfolio................ 80.39 116.29 153.74 242.53

<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
VIP Overseas Portfolio..................... $23.58 $72.58 $124.14 $265.18
VIP Equity-Income Portfolio................ 20.17 62.30 106.94 230.51
</TABLE>

- --------
NOTES:
(1) Premium tax charges are not shown. They range from 0% (in most states)
to 3.5% of Contract Value (or if applicable purchase payments).

A-5
<PAGE>

(2) We calculate the applicable Contingent Deferred Sales Charge as a
percentage of Contract Value. The maximum possible charge, as a
percentage of Contract Value, occurs in the first Contract Year and
reduces after each Contract Year to 0% by the eleventh Contract Year.
(3) We reserve the right to impose a charge of $10 on each transfer in
excess of four per year.
(4) We do not impose this charge after annuitization.
(5) We do not impose these charges on the Fixed Account or after
annuitization if annuity payments are made on a fixed basis.
(6) Without the applicable expense cap or expense deferral arrangement
(described below), Total Series Operating Expenses for the year ended
December 31, 1999 would have been: Salomon Brothers U.S. Government
Series, .72%. In 1999, the management fee for the Loomis Sayles Small
Cap Series was 1.00%, and Total Series Operating Expenses were capped at
1.00%. Without the expense cap, Total Series Operating Expenses would
have been 1.10%.

Our affiliate, New England Investment Management, Inc., is the investment
adviser for the series of the Zenith Fund except for the Capital Growth
Series. New England Investment Management voluntarily limits the expenses
(other than brokerage costs, interest, taxes or extra-ordinary expenses)
of certain series with either an expense cap or expense deferral
arrangement. Under the expense cap, New England Investment Management
bears expenses of the Loomis Sayles Small Cap Series that exceed 1.00% of
average daily net assets. Under the expense deferral agreement, New
England Investment Management bears expenses which exceed a certain limit,
in the year the series incurs them and charges those expenses to the
series in a future year if actual expenses of the series are below the
limit. The limit on expenses for these Series are: .90% of average daily
net assets for the Harris Oakmark Mid Cap Value, MFS Investors and MFS
Research Managers Series; .70% of average daily net assets for the Salomon
Brothers U.S. Government Series; and 1.30% of average daily net assets for
Morgan Stanley International Magnum Equity Series. New England Investment
Management may end these expense limits at any time.
(7) The Westpeak Stock Index Series and the Back Bay Advisors Managed Series
are not Eligible Funds for Contracts purchased after May 1, 1995.
(8) Metropolitan Life Insurance Company ("MetLife") is the investment
adviser for the Portfolios of the Metropolitan Fund. The Portfolios pay
investment management fees to MetLife and also bear other expenses.
(9) Total annual expenses do not reflect certain expense reductions due to
directed brokerage arrangements and custodian interest credits. If we
included these reductions, total annual expenses would have been .56%
for VIP Equity-Income Portfolio and .87% for VIP Overseas Portfolio.
The investment adviser for VIP is Fidelity Management & Research Company
("FMR").
(10) In these examples, the average Administration Contract Charge of .07%
has been used. (See (4), above.)
(11) The same would apply if you elect to annuitize under a fixed life
contingency option unless your Contract has been in effect less than
five years, in which case the expenses shown in the first three columns
of the preceding example would apply. (See "Contingent Deferred Sales
Charge.")
- -------------------------------------------------------------------------------

A-6
<PAGE>

THE COMPANY

INVESTMENTS OF THE VARIABLE ACCOUNT

NEW ENGLAND ZENITH FUND: Currently, there are twelve Series of the New England
Zenith Fund that are Eligible Funds under the Contracts offered by this
prospectus. TWO ADDITIONAL SERIES, THE BACK BAY ADVISORS MANAGED SERIES AND
THE WESTPEAK STOCK INDEX SERIES, DESCRIBED BELOW, ARE ELIGIBLE FUNDS ONLY FOR
CONTRACTS ISSUED BEFORE MAY 1, 1995.

BACK BAY ADVISORS MONEY MARKET SERIES

BACK BAY ADVISORS BOND INCOME SERIES

The Back Bay Advisors Bond Income Series investment objective is a high
level of current income consistent with protection of capital.

SALOMON BROTHERS STRATEGIC BOND OPPORTUNITIES SERIES

The Salomon Brothers Strategic Bond Opportunities Series investment
objective is a high level of total return consistent with preservation of
capital.

A-7
<PAGE>

SALOMON BROTHERS U.S. GOVERNMENT SERIES

The Salomon Brothers U.S. Government Series investment objective is a high
level of current income consistent with preservation of capital and
maintenance of liquidity.

BACK BAY ADVISORS MANAGED SERIES

The Back Bay Advisors Managed Series investment objective is a favorable
total return through investment in a diversified portfolio.

BALANCED SERIES (FORMERLY LOOMIS SAYLES BALANCED SERIES)

The Balanced Series investment objective is long-term total return from a
combination of capital appreciation and current income.

ALGER EQUITY GROWTH SERIES

The Alger Equity Growth Series investment objective is long-term capital
appreciation.

CAPITAL GROWTH SERIES

DAVIS VENTURE VALUE SERIES

The Davis Venture Value Series investment objective is growth of capital.

HARRIS OAKMARK MID CAP VALUE SERIES (FORMERLY GOLDMAN SACHS MIDCAP VALUE
SERIES)

The Harris Oakmark Mid Cap Value Series investment objective is long-term
capital appreciation.

LOOMIS SAYLES SMALL CAP SERIES

The Loomis Sayles Small Cap Series investment objective is long-term capital
growth from investments in common stocks or their equivalents.

WESTPEAK GROWTH AND INCOME SERIES

The Westpeak Growth and Income Series investment objective is long-term
total return through investment in equity securities.

WESTPEAK STOCK INDEX SERIES

The Westpeak Stock Index Series investment objective is investment results
that correspond to the composite price and yield performance of the S&P 500
Index.

MORGAN STANLEY INTERNATIONAL MAGNUM EQUITY SERIES

A-8
<PAGE>

METROPOLITAN SERIES FUND, INC.: Currently, there is one Portfolio of the
Metropolitan Fund that is an Eligible Fund under the Contracts.

PUTNAM INTERNATIONAL STOCK PORTFOLIO*

The Putnam International Stock Portfolio's investment objective is long-term
growth of capital.

VARIABLE INSURANCE PRODUCTS FUND: Currently, there are two Portfolios of VIP
that are Eligible Funds under the Contracts.

VIP OVERSEAS PORTFOLIO

VIP EQUITY-INCOME PORTFOLIO

- --------

* Availability of this Portfolio is subject to any necessary state insurance
department approvals.

INVESTMENT ADVICE

<TABLE>
<CAPTION>
Series Sub-Adviser
- ------ -----------
<S> <C>
Back Bay Advisors Money Market Series Back Bay Advisors, L.P.*
Back Bay Advisors Bond Income Series Back Bay Advisors, L.P.*
Salomon Brothers Strategic Bond
Opportunities Series Salomon Brothers Asset Management Inc***
Salomon Brothers U.S. Government
Series Salomon Brothers Asset Management Inc
Back Bay Advisors Managed Series Back Bay Advisors, L.P.*
Balanced Series Wellington Management Company, LLP.
Alger Equity Growth Series Fred Alger Management, Inc.
Davis Venture Value Series Davis Selected Advisers, L.P.**
Harris Oakmark Mid Cap Value Series Harris Associates L.P.*
Loomis Sayles Small Cap Series Loomis, Sayles & Company, L.P.*
Westpeak Growth and Income Series Westpeak Investment Advisors, L.P.*
Westpeak Stock Index Series Westpeak Investment Advisors, L.P.*
Morgan Stanley International Equity Morgan Stanley Dean Witter Investment
Series Management Inc.
</TABLE>
- --------
* An affiliate of NELICO
** Davis Selected may also delegate any of its responsibilities to Davis
Selected Advisers-NY, Inc., a wholly-owned subsidiary of Davis Selected.

A-9
<PAGE>

An investment adviser or affiliates thereof may compensate NELICO and/or
certain affiliates for administrative, distribution, or other services
relating to Eligible Funds. This compensation is based on assets of the
Eligible Funds attributable to the Contracts and certain other variable
insurance products that we and our affiliates issue. Some advisers and/or
affiliates may pay us more than others. New England Securities may also
receive brokerage commissions on securities transactions initiated by an
investment adviser.

SUBSTITUTION OF INVESTMENTS

TRANSFER PRIVILEGE

Add this information to the first paragraph.

Currently, the Company intends to allow one additional transfer, for policy
credits the Company has applied to the Back Bay Advisors Money Market Series
pursuant to the demutualization plan.

The Metropolitan Fund may restrict or refuse purchases or redemptions of
shares in their Portfolios as a result of certain market timing activities.
You should read the prospectus of this Eligible Fund for more details.

A-10
<PAGE>

RETIREMENT PLANS OFFERING FEDERAL TAX BENEFITS

4. Roth Individual Retirement Accounts under Section 408A of the Code
("Roth IRAs"). (In some states Roth IRAs are available under this Contract
only if you have an existing IRA.)

5. Eligible deferred compensation plans (within the meaning of Section
457 of the Code) for employees of state and local governments and tax-
exempt organizations ("Section 457 Plans"); and

6. Governmental plans (within the meaning of Section 414(d) of the Code)
for governmental employees, including Federal employees ("Governmental
Plans").

An investor should consult a qualified tax or other advisor as to the
suitability of a Contract as a funding vehicle for retirement plans qualifying
for tax benefited treatment, as to the rules underlying such plans and as to
the state and Federal tax aspects of such plans. At this time, the Contracts
are not being offered to plans qualified under Section 401(k) of the Code
unless such plans already own Contracts on participants, and are no longer
being offered through TSA Plans that are subject to ERISA. The Company will
not provide all the administrative support appropriate for 401(k) plans or TSA
Plans subject to ERISA. Accordingly, the Contract should NOT BE PURCHASED FOR
USE WITH SUCH PLANS.

For any tax qualified account e.g. 401(k) plan or IRA, the tax deferred
accrual feature is provided by the tax qualified retirement plan. Therefore,
there should be reasons other than tax deferral for acquiring an annuity
contract within a qualified plan.

A-11
<PAGE>

FEDERAL INCOME TAX STATUS

TAX STATUS OF THE COMPANY AND THE VARIABLE ACCOUNT

The Contracts provide that the Company may make a charge against the assets
of the Variable Account as a reserve for taxes which may relate to the
operations of the Variable Account.

TAXATION OF THE CONTRACTS

(A) SPECIAL RULES FOR ANNUITIES PURCHASED FOR ANNUITANTS UNDER RETIREMENT
PLANS QUALIFYING FOR TAX BENEFITED TREATMENT

A-12
<PAGE>

(i) Plan Contribution Limitations

TSA PLANS

Purchase payments attributable to TSA Plans are not includible within the
Annuitant's income to the extent such purchase payments do not exceed certain
statutory limitations, including the "exclusion allowance." The exclusion
allowance is a calculation which takes into consideration the Annuitant's
includible compensation, number of years of service, and prior years of
contributions. For more information, the Annuitant should obtain a copy of IRS
Publication 571 on TSA Programs for Employees of Public Schools and Certain
Tax Exempt Organizations WHICH WILL BETTER ASSIST THE ANNUITANT IN CALCULATING
THE EXCLUSION ALLOWANCE AND OTHER LIMITATIONS TO WHICH HE OR SHE MAY BE
SUBJECT FOR ANY GIVEN TAX YEAR. ANY PURCHASE PAYMENTS ATTRIBUTABLE TO
PERMISSIBLE CONTRIBUTIONS UNDER CODE SECTION 403(B) (AND EARNINGS THEREON) ARE
NOT TAXABLE TO THE ANNUITANT UNTIL AMOUNTS ARE DISTRIBUTED FROM THE CONTRACT.
HOWEVER, THESE PAYMENTS MAY BE SUBJECT TO FICA (SOCIAL SECURITY) AND MEDICARE
TAXES.

IRAS, SEPS, SARSEPS

ROTH IRAS

In some states Roth IRAs are available under this Contract, subject to the
following limitations.

A-13
<PAGE>

than $150,000. The taxpayer may not contribute to a Roth IRA if the taxpayer's
AGI is over $110,000 (if the taxpayer is single), $160,000 (if the taxpayer is
married and files a joint tax return), or $10,000 (if the taxpayer is married
and files separate tax returns). You should consult a tax adviser before
combining any converted amounts with any other Roth IRA contributions,
including any other conversion amounts from other tax years. To use
the Contract in connection with a Roth IRA, you must have an existing Contract
that was issued in connection with an IRA.

SECTION 457 PLANS

QUALIFIED PLANS

(ii) Distributions from the Contract

MANDATORY WITHHOLDING ON CERTAIN DISTRIBUTIONS

Distributions called "eligible rollover distributions" from Qualified Plans
and from many TSA Plans are subject to mandatory withholding by the plan or
payor at the rate of 20%. An eligible rollover distribution is the taxable
portion of any distribution from a Qualified Plan or a TSA Plan, except for
certain distributions such as distributions required by the Code or in a
specified annuity form. After December 31, 1999 permissible hardship
withdrawals from TSA and 401(k) plans will no longer be treated as an
"eligible rollover distribution." Withholding can be avoided by arranging a
direct transfer of the eligible rollover distribution to a Qualified Plan, TSA
or IRA.

QUALIFIED PLANS, TSA PLANS, IRAS, ROTH IRAS, SEPS, SARSEPS AND GOVERNMENTAL
PLANS

A-14
<PAGE>

early retirement at or after age 55 or made pursuant to a qualified domestic
relations order do not apply but other exceptions may apply. A tax-free
rollover may be made once each year among individual retirement arrangements
subject to the conditions and limitations described in the Code.

SECTION 457 PLANS

A-15
<PAGE>

preceding section of this prospectus. An exception to these rules provides
that if the beneficiary is other than the Annuitant's spouse, distribution
must be completed within 15 years of death, regardless of the beneficiary's
life expectancy.

(B) SPECIAL RULES FOR ANNUITIES USED BY INDIVIDUALS OR WITH PLANS AND TRUSTS
NOT QUALIFYING UNDER THE CODE FOR TAX BENEFITED TREATMENT

For a Contract held by an individual, any increase in the accumulated value
of the Contract is generally not taxable until amounts are received, either in
the form of annuity payments as contemplated by the Contract or in a full or
partial lump sum settlement of the Company's obligations to the Contract
Owner.

A-16
<PAGE>

If a Contract Owner or Annuitant dies, the tax law requires certain
distributions from the Contract. (See "Payment on Death Prior to
Annuitization" in the April 30, 1999 prospectus.) Generally, such amounts are
includible in the income of the recipient as follows: (1) if distributed in a
lump sum, they are taxed in the same manner as a full surrender as described
above; or (2) if distributed under an Annuity Option, they are taxed in the
same manner as Annuity payments, as described above. For these purposes, the
investment in the Contract is not affected by the Contract Owner's (or
Annuitant's) death. That is, the investment in the Contract remains the amount
of any purchase payments paid which were not excluded from gross income.

PAYMENT ON DEATH

Death Proceeds are taxable and generally are included in the income of the
recipient as follows:

. If received under an annuity payment option, they are taxed in the same
manner as annuity payments.

. If distributed in a lump sum, they are taxed in the same manner as a
full surrender.

TAX WITHHOLDING

POSSIBLE CHANGES IN TAXATION

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

ACCUMULATION UNIT VALUES

Financial statements for the Variable Account and Metropolitan Life
Insurance Company are included in the Statement of Additional Information, a
copy of which can be obtained by writing to New England Securities Corporation
at 399 Boylston Street, Boston, Massachusetts 02116 or telephoning 1-800-356-
5015. Set forth below are accumulation unit values for Sub-accounts of the
Variable Account.

A-17
<PAGE>

ACCUMULATION UNIT VALUES
(FOR AN ACCUMULATION UNIT OUTSTANDING THROUGHOUT THE PERIOD)

THE NEW ENGLAND VARIABLE ACCOUNT
CONDENSED FINANCIAL INFORMATION

<TABLE>
<CAPTION>
BACK BAY
ADVISORS
MONEY
MARKET
SUB-
ACCOUNT
--------
<CAPTION>

9/29/88* 1/1/89 1/1/90 1/1/91 1/1/92 1/1/93 1/1/94 1/1/95 1/1/96 1/1/97
TO TO TO TO TO TO TO TO TO TO
12/31/88 12/31/89 12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
-------- --------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Accumulation
Unit Value at
beginning of
period....... 1.384 1.408 1.518 1.620 1.697 1.738 1.766 1.811 1.889 1.959
2. Accumulation
Unit Value at
end of
period....... 1.408 1.518 1.620 1.697 1.738 1.766 1.811 1.889 1.959 2.036
3. Number of
Accumulation
Units
outstanding
at end of
period....... 915,605 7,661,069 21,629,006 26,332,938 26,759,532 25,016,975 30,220,356 33,015,018 33,412,517 26,785,902
1/1/98 1/1/99
TO TO
12/31/98 12/31/99
---------- ----------
<S> <C> <C>
1. Accumulation
Unit Value at
beginning of
period....... 2.036 2.114
2. Accumulation
Unit Value at
end of
period....... 2.114 2.190
3. Number of
Accumulation
Units
outstanding
at end of
period....... 33,716,959 36,481,209
</TABLE>

<TABLE>
<CAPTION>
BACK BAY
ADVISORS
BOND
INCOME
SUB-
ACCOUNT
--------
<CAPTION>
SALOMON
BROTHERS
STRATEGIC
BOND
OPPORTUNITIES
SUB-ACCOUNT
-------------

10/5/88* 1/1/89 1/1/90 1/1/91 1/1/92 1/1/93 1/1/94 1/1/95 1/1/96 1/1/97
TO TO TO TO TO TO TO TO TO TO
12/31/88 12/31/89 12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
-------- --------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Accumulation
Unit Value at
beginning of
period....... 1.631 1.634 1.810 1.930 2.247 2.398 2.664 2.540 3.037 3.134
2. Accumulation
Unit Value at
end of
period....... 1.634 1.810 1.930 2.247 2.398 2.664 2.540 3.037 3.134 3.429
3. Number of
Accumulation
Units
outstanding
at end of
period....... 299,002 4,287,540 10,139,527 17,797,335 28,871,719 41,939,487 41,657,182 42,231,987 41,138,874 37,260,367
1/1/98 1/1/99 10/31/94* 1/1/95* 1/1/96 1/1/97 1/1/98 1/1/99
TO TO TO TO TO TO TO TO
12/31/98 12/31/99 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
---------- ---------- ------------- --------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Accumulation
Unit Value at
beginning of
period....... 3.429 3.689 1.000 0.984 1.159 1.307 1.433 1.442
2. Accumulation
Unit Value at
end of
period....... 3.689 3.622 0.984 1.159 1.307 1.433 1.442 1.443
3. Number of
Accumulation
Units
outstanding
at end of
period....... 38,630,894 32,707,422 1,124,133 6,132,563 15,034,554 23,074,669 24,945,159 20,278,882
</TABLE>
- -----
* Date these sub-accounts were first available.

A-18
<PAGE>

<TABLE>
<CAPTION>
SALOMON
BROTHERS BACK BAY
U.S. ADVISORS
GOVERNMENT MANAGED
SUB- SUB-
ACCOUNT ACCOUNT**
---------- ---------
<CAPTION>

10/31/94* 1/1/95 1/1/96 1/1/97 1/1/98 1/1/99 9/21/88* 1/1/89 1/1/90 1/1/91
TO TO TO TO TO TO TO TO TO TO
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99 12/31/88 12/31/89 12/31/90 12/31/91
---------- --------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Accumulation
Unit Value at
beginning of
period....... 1.000 1.004 1.139 1.161 1.242 1.319 1.042 1.063 1.250 1.272
2. Accumulation
Unit Value at
end of
period....... 1.004 1.139 1.161 1.242 1.319 1.304 1.063 1.250 1.272 1.508
3. Number of
Accumulation
Units
outstanding
at end of
period....... 910,020 4,495,184 5,785,148 8,616,135 12,796,204 10,314,952 731,349 9,179,207 18,099,540 26,478,398
1/1/92 1/1/93 1/1/94 1/1/95 1/1/96 1/1/97 1/1/98 1/1/99
TO TO TO TO TO TO TO TO
12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Accumulation
Unit Value at
beginning of
period....... 1.508 1.588 1.733 1.691 2.190 2.485 3.103 3.664
2. Accumulation
Unit Value at
end of
period....... 1.588 1.733 1.691 2.190 2.485 3.103 3.664 3.975
3. Number of
Accumulation
Units
outstanding
at end of
period....... 41,588,546 60,696,659 61,961,278 56,145,463 52,130,165 48,490,618 42,358,784 37,391,028
</TABLE>

<TABLE>
<CAPTION>
ALGER
EQUITY
BALANCED GROWTH
SUB- SUB-
ACCOUNT ACCOUNT
--------- ---------
<CAPTION>

10/31/94 1/1/95 1/1/96* 1/1/97 1/1/98 1/1/99 10/31/94* 1/1/95 1/1/96 1/1/97
TO TO TO TO TO TO TO TO TO TO
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99 12/31/94 12/31/95 12/31/96 12/31/97
--------- ---------- ---------- ---------- ---------- ---------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Accumulation Unit
Value at
beginning of
period....... 1.000 0.997 1.227 1.415 1.622 1.747 1.000 0.956 1.402 1.566
2. Accumulation
Unit Value at
end of
period....... 0.997 1.227 1.415 1.622 1.747 1.636 0.956 1.402 1.566 1.941
3. Number of
Accumulation
Units
outstanding
at end of
period....... 1,736,189 10,987,597 20,107,324 28,677,041 30,824,135 27,038,754 1,857,319 24,163,685 40,025,594 44,518,891
1/1/98 1/1/99
TO TO
12/31/98 12/31/99
---------- ----------
<S> <C> <C>
1. Accumulation Unit
Value at
beginning of
period....... 1.941 2.829
2. Accumulation
Unit Value at
end of
period....... 2.829 3.744
3. Number of
Accumulation
Units
outstanding
at end of
period....... 49,255,773 60,072,409
</TABLE>

<TABLE>
<CAPTION>
CAPITAL
GROWTH
SUB-
ACCOUNT
--------
<CAPTION>
DAVIS
VENTURE
VALUE
SUB-
ACCOUNT
---------

9/16/88* 1/1/89 1/1/90 1/1/91 1/1/92 1/1/93 1/1/94 1/1/95 1/1/96 1/1/97
TO TO TO TO TO TO TO TO TO TO
12/31/88 12/31/89 12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
-------- --------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Accumulation
Unit Value
at beginning
of period.... 4.645 4.612 5.950 5.666 8.608 7.978 9.050 8.298 11.300 13.496
2. Accumulation
Unit Value
at end of
period....... 4.612 5.950 5.666 8.608 7.978 9.050 8.298 11.300 13.496 16.442
3. Number of
Accumulation
Units
outstanding
at end
of period.... 439,393 5,337,778 12,591,788 21,719,884 33,645,983 40,091,665 43,592,961 41,663,900 41,363,155 40,200,592
1/1/98 1/1/99 10/31/94* 1/1/95 1/1/96 1/1/97 1/1/98 1/1/99
TO TO TO TO TO TO TO TO
12/31/98 12/31/99 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
---------- ---------- --------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Accumulation
Unit Value
at beginning
of period.... 21.752 16.442 1.000 0.963 1.323 1.643 2.163 2.442
2. Accumulation
Unit Value
at end of
period....... 24.831 21.752 0.963 1.323 1.643 2.163 2.442 2.831
3. Number of
Accumulation
Units
outstanding
at end
of period.... 33,502,039 38,236,116 3,499,719 19,608,688 34,997,024 53,997,107 58,765,470 57,370,889
</TABLE>
- ------
* Date these sub-accounts were first available.
** These sub-accounts are only available through Contracts purchased prior to
May 1, 1995.

A-19
<PAGE>

<TABLE>
<CAPTION>
HARRIS
OAKMARK LOOMIS
MID CAP SAYLES
VALUE SMALL CAP
SUB- SUB-
ACCOUNT ACCOUNT
--------- ---------
<CAPTION>
WESTPEAK
GROWTH
AND INCOME
SUB-
ACCOUNT
----------

10/1/93* 1/1/94 1/1/95 1/1/96 1/1/97 1/1/98 1/1/99 5/2/94* 1/1/95 1/1/96
TO TO TO TO TO TO TO TO TO TO
12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99 12/31/94 12/31/95 12/31/96
--------- ---------- ---------- ---------- ---------- ---------- ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Accumulation
Unit Value at
beginning of
period....... 1.125 1.137 1.119 1.439 1.669 1.932 1.802 1.000 0.959 1.219
2. Accumulation
Unit Value at
end of
period....... 1.137 1.119 1.439 1.669 1.932 1.802 1.784 0.959 1.219 1.572
3. Number of
Accumulation
Units
outstanding
at end of
period....... 4,515,611 15,572,344 19,773,057 24,345,379 24,035,279 21,347,155 17,151,815 2,988,971 13,533,326 26,307,748
1/1/97 1/1/98 1/1/99 10/1/93* 1/1/94 1/1/95 1/1/96 1/1/97 1/1/98 1/1/99
TO TO TO TO TO TO TO TO TO TO
12/31/97 12/31/98 12/31/99 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Accumulation
Unit Value at
beginning of
period....... 1.572 1.936 1.878 1.105 1.132 1.103 1.486 1.731 2.279 2.799
2. Accumulation
Unit Value at
end of
period....... 1.936 1.878 2.441 1.132 1.103 1.486 1.731 2.279 2.799 3.019
3. Number of
Accumulation
Units
outstanding
at end of
period....... 39,442,109 40,318,239 32,700,411 3,359,317 16,092,325 21,168,965 26,104,465 30,306,103 35,514,558 35,663,197
</TABLE>

<TABLE>
<CAPTION>
MORGAN
STANLEY
WESTPEAK INTERNATIONAL
STOCK MAGNUM
INDEX EQUITY
SUB- SUB-
ACCOUNT** ACCOUNT
--------- -------------
<CAPTION>

1/1/92* 1/1/93 1/1/94 1/1/95 1/1/96 1/1/97 1/1/98 1/1/99 10/31/94* 1/1/95
TO TO TO TO TO TO TO TO TO TO
12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99 12/31/94 12/31/95
--------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Accumulation
Unit Value at
beginning of
period....... 1.592 1.644 1.780 1.775 2.398 2.898 3.788 4.781 1.000 1.024
2. Accumulation
Unit Value at
end of
period....... 1.540 1.780 1.775 2.398 2.898 3.788 4.781 5.678 1.024 1.073
3. Number of
Accumulation
Units
outstanding
at end of
period....... 2,583,607 11,017,884 14,282,355 15,539,608 15,623,253 15,874,978 15,292,906 15,111,062 2,916,120 11,062,106
1/1/96 1/1/97 1/1/98 1/1/99
TO TO TO TO
12/31/96 12/31/97 12/31/98 12/31/99
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
1. Accumulation
Unit Value at
beginning of
period....... 1.073 1.129 1.100 1.164
2. Accumulation
Unit Value at
end of
period....... 1.129 1.100 1.164 1.431
3. Number of
Accumulation
Units
outstanding
at end of
period....... 16,322,862 17,243,803 16,325,447 14,501,457
</TABLE>

<TABLE>
<CAPTION>
EQUITY-
OVERSEAS INCOME
SUB- SUB-
ACCOUNT ACCOUNT
---------- ---------
<CAPTION>

10/1/93* 1/1/94 1/1/95 1/1/96 1/1/97 1/1/98 1/1/99 10/1/93* 1/1/94 1/1/95
TO TO TO TO TO TO TO TO TO TO
12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99 12/31/93 12/31/94 12/31/95
---------- ---------- ---------- ---------- ---------- ---------- ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. Accumulation
Unit Value at
beginning of
period....... 1.458 1.532 1.538 1.664 1.859 2.046 2.276 1.980 1.992 2.104
2. Accumulation
Unit Value at
end of
period....... 1.532 1.538 1.664 1.859 2.046 2.276 3.202 1.992 2.104 2.804
3. Number of
Accumulation
Units
outstanding
at end of
period....... 10,878,551 43,034,544 41,273,183 44,846,316 45,289,247 40,546,153 36,251,177 5,649,743 25,852,849 38,010,655
1/1/96 1/1/97 1/1/98 1/1/99
TO TO TO TO
12/31/96 12/31/97 12/31/98 12/31/99
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
1. Accumulation
Unit Value at
beginning of
period....... 2.804 3.162 3.996 4.401
2. Accumulation
Unit Value at
end of
period....... 3.162 3.996 4.401 4.617
3. Number of
Accumulation
Units
outstanding
at end of
period....... 44,037,798 45,104,192 42,926,506 37,676,846
</TABLE>
- ----
* Date these sub-accounts were first available.
**These sub-accounts are only available through Contracts purchased prior to
May 1, 1995.

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

A-20
<PAGE>

PREMIUM TAX

Premium tax rates are subject to change. At present the Company pays premium
taxes in the following jurisdictions at the rates shown.

See "Premium Tax Charges" in the prospectus for more information about how
premium taxes affect the Contracts.

A-21
<PAGE>

THE NEW ENGLAND VARIABLE ACCOUNT
ZENITH ACCUMULATOR
INDIVIDUAL VARIABLE ANNUITY CONTRACTS
ISSUED BY METROPOLITAN LIFE INSURANCE COMPANY
STATEMENT OF ADDITIONAL INFORMATION
(PART B)

MAY 1, 2000

This Statement of Additional Information is not a prospectus. This Statement
of Additional Information relates to the Prospectus dated May 1, 2000 and
should be read in conjunction therewith. A copy of the Prospectus may be
obtained by writing to New England Securities Corporation ("New England
Securities") 399 Boylston Street, Boston, Massachusetts 02116.

VA-180-00

II-1
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
-----
<S> <C>
History................................................................... II-3
Services Relating to the Variable Account and the Contracts............... II-3
Performance Comparisons................................................... II-3
Calculation of Performance Data........................................... II-4
Net Investment Factor..................................................... II-22
Annuity Payments.......................................................... II-22
Hypothetical Illustrations of Annuity Income Payouts...................... II-24
Historical Illustrations of Annuity Income Payouts........................ II-27
Experts................................................................... II-30
Legal Matters............................................................. II-30
Appendix A................................................................ II-31
Financial Statements...................................................... F-1
</TABLE>

II-2
<PAGE>

HISTORY

The New England Variable Account (the "Variable Account") is a separate
account of Metropolitan Life Insurance Company (the "Company"). The Variable
Account was originally a separate account of New England Mutual Life Insurance
Company, and became a separate account of the Company when New England Mutual
Life Insurance Company merged with and into the Company on August 30, 1996.

SERVICES RELATING TO THE VARIABLE ACCOUNT AND THE CONTRACTS

Auditors. Deloitte & Touche LLP, located at 200 Berkeley Street, Boston,
Massachusetts 02116, conducts an annual audit of the Variable Account's
financial statements.

Administrative Services Agreement. Pursuant to an administrative services
agreement between New England Life Insurance Company ("NELICO") and the
Company, NELICO serves as the Designated Office for servicing the Contracts
and performs certain other administrative services for the Company relating to
the Variable Account and the Contracts. NELICO is compensated for these
services based on the expenses it incurs in providing them. NELICO was a
wholly-owned subsidiary of New England Mutual Life Insurance Company before it
merged into the Company, and became a subsidiary of the Company as a result of
the merger. For services rendered, the Company paid NELICO $13,017,919.74 for
the period ended December 31, 1997, $12,580,160.06 for the period ended
December 31, 1998 and $12,320,436.64 for the period ended December 31, 1999.

Principal Underwriter. New England Securities Corporation ("New England
Securities"), an indirect subsidiary of the Company, serves as principal
underwriter for the Variable Account pursuant to a distribution agreement with
the Company. The Contracts are offered continuously and are sold by NELICO's
life insurance agents and insurance brokers who are registered representatives
of New England Securities. Contracts also may be sold by registered
representatives of broker-dealers that have selling agreements with New
England Securities. The Company pays commissions, none of which are retained
by New England Securities, to the registered representatives involved in
selling Contracts. For the years ended December 31, 1997, 1998 and 1999 the
Company paid commissions in the amount of $5,719,756.22, $5,427,972.77 and
$2,240,122.51, respectively.

PERFORMANCE COMPARISONS

Articles and releases, developed by the Company, the Eligible Funds (as
defined in the Prospectus) and other parties, about the Account or the
Eligible Funds regarding performance, rankings, statistics and analyses of the
Account's, the individual Eligible Funds' and fund groups' asset levels and
sales volumes, statistics and analyses of industry sales volumes and asset
levels, and other characteristics may appear in publications, including, but
not limited to, those publications listed in Appendix A to this Statement of
Additional Information. In particular, some or all of these publications may
publish their own rankings or performance reviews including the Account or the
Eligible Funds. References to or reprints of such articles may be used in the
Company's promotional literature. Such literature may refer to personnel of
the advisers, who have portfolio management responsibility, and their
investment style. The references may allude to or include excerpts from
articles appearing in the media.

The advertising and sales literature of the Contract and the Account may
refer to historical, current and prospective economic trends and may include
historical and current performance and total returns of investment
alternatives.

In addition, sales literature may be published concerning topics of general
investor interest for the benefit of registered representatives and
prospective Contractholders. These materials may include, but are not limited
to, discussions of college planning, retirement planning, reasons for
investing and historical examples of the investment performance of various
classes of securities, securities markets and indices.

II-3
<PAGE>

CALCULATION OF PERFORMANCE DATA

The Variable Account was not established until July, 1987. The Contracts
were not available until September, 1988. The Capital Growth, Back Bay
Advisors Bond Income and Back Bay Advisors Money Market Series commenced
operations on August 26, 1983. The Westpeak Growth and Income and Harris
Oakmark Mid Cap Value (formerly the Goldman Sachs Midcap Value Series)
commenced operations on April 30, 1993. The VIP Equity-Income Portfolio
commenced operations on October 9, 1986, and the VIP Overseas Portfolio
commenced operations on January 28, 1987. The Westpeak Stock Index and Back
Bay Managed Series commenced operations on May 1, 1987. The Loomis Sayles
Small Cap Series commenced operations on May 2, 1994. The other Zenith Fund
Series commenced operations on October 31, 1994. The Putnam International
Stock Portfolio commenced operations on May 1, 1991 and became available to
Zenith Accumulator Contractholders on May 1, 2000.

The average annual total return is related to surrender value and is
calculated as follows. The amount of the assumed $1,000 purchase payment for a
Contract issued at the beginning of the period is divided by the Accumulation
Unit Value of the sub-account at the beginning of the period shown to arrive
at the number of Accumulation Units purchased. The number of Accumulation
Units is reduced on each Contract anniversary to reflect deduction of the
annual $30 Administration Contract Charge from the Contract Value. Each such
$30 deduction reduces the number of units held under the Contract by an amount
equal to $30 divided by the Accumulation Unit Value on the date of the
deduction. The total number of units held under the Contract at the beginning
of the last Contract Year covered by the period shown is multiplied by the
Accumulation Unit Value on December 31, 1999 to arrive at the Contract Value
on that date. This Contract Value is then reduced by the applicable Contingent
Deferred Sales Charge and by the portion of the $30 Administration Contract
Charge which would be deducted upon surrender on December 31, 1999 to arrive
at the surrender value. The average annual total return is the annual
compounded rate of return which would produce the surrender value on December
31, 1999. In other words, the average annual total return is the rate which,
when added to 1, raised to a power reflecting the number of years in the
period shown, and multiplied by the initial $1,000 investment, yields the
surrender value at the end of the period. The average annual total returns
assume that no premium tax charge has been deducted.

The following chart illustrates how the average annual total return was
determined for the five year period ending December 31, 1999 for the sub-
account investing in the Capital Growth Series based on the assumptions used
above. The units column below shows the number of accumulation units
hypothetically purchased by the investment in the Capital Growth Series in the
first year (assuming that no premium tax is deducted). The units are reduced
on each Contract anniversary to reflect the deduction of the $30
Administration Contract Charge. The illustration assumes no premium tax charge
is deducted.

The unit values of the sub-accounts reflect the change in the net asset
value of the underlying Eligible Funds plus the reinvestment of dividends from
net investment income and of distributions from net realized gains, if any.
The unit values also reflect the deduction of the Mortality and Expense Risk
Charge as well as the Administration Asset Charge.

<TABLE>
<CAPTION>
AVERAGE
UNIT CONTRACT SURRENDER ANNUAL TOTAL
DATE UNITS VALUE VALUE VALUE RETURN
- ---- -------- --------- -------- --------- ------------
<S> <C> <C> <C> <C> <C>
December 31, 1994............ 120.5171 8.297578 1000.00 -- --
December 31, 1995............ 117.8627 11.300017 1,331.85 1,259.93 25.99
December 31, 1996............ 115.6402 13.496435 1,560.73 1,483.47 21.80
December 31, 1997............ 113.8157 16.441932 1,871.35 1,787.14 21.35
December 31, 1998............ 112.4364 21.752481 2,445.77 2,346.72 23.77
December 31, 1999............ 111.2282 24.830578 2,761.86 2,662.43 21.63
</TABLE>

II-4
<PAGE>

The following charts illustrate what would have been the growth and value of
a $10,000 purchase payment for a Contract if it had been invested in each of
the Eligible Funds on the first day of the first month after those Eligible
Funds commenced operations if the Contract had been offered at that time:
September 1, 1983 in the case of the Back Bay Advisors Money Market, Back Bay
Advisors Bond Income and Capital Growth Series; November 1, 1986 in the case
of the VIP Equity-Income Portfolio; February 1, 1987 in the case of the VIP
Overseas Portfolio; May 1, 1987 in the case of the Westpeak Stock Index Series
and the Back Bay Advisors Managed Series; May 1, 1993 in the case of the
Westpeak Growth and Income and Harris Oakmark Mid Cap Value Series (formerly
Goldman Sachs Midcap Value Series); May 2, 1994 in the case of the Loomis
Sayles Small Cap Series; and November 1, 1994 for the other Zenith Fund
Series, and May 1, 1991 for the Putnam International Stock Portfolio of the
Metropolitan Series Fund. The figures shown do not reflect the deduction of
any premium tax charge. During the period when the Contingent Deferred Sales
Charge applies, the percentage return on surrender value from year to year
(after the 1st year) will be greater than the percentage return on Contract
Value for the same years. This is because the percentage return on surrender
value reflects not only investment experience but also the annual reduction in
the applicable Contingent Deferred Sales Charge. In the first chart, the
Contract Value and surrender value on each date shown are calculated in the
manner described in the preceding illustrations of average annual total
return, assuming that no premium tax charge is deducted.

In the second and third charts, the difference between the Contract Value or
surrender value at the beginning and at the end of each year is divided by the
beginning Contract Value or surrender value to arrive at the annual percentage
change. The cumulative return information set forth in these charts is
determined by taking the difference between the $10,000 investment and the
ending Contract Value or surrender value and dividing it by $10,000. The
annual effective rate of return in this illustration is calculated in the same
manner as the average annual total return described in the preceding
illustration, assuming that no premium tax charge is deducted.

II-5
<PAGE>

$10,000 SINGLE PURCHASE PAYMENT CONTRACT

INVESTMENT RESULTS

<TABLE>
<CAPTION>
CONTRACT VALUE(1)
--------------------------------------------------------------------------------------------------------------
SALOMON
BACK BAY BACK BAY BROTHERS SALOMON
ADVISORS ADVISORS STRATEGIC BROTHERS BACK BAY ALGER
MONEY BOND BOND U.S. MANAGED EQUITY CAPITAL
MARKET INCOME OPPORTUNITIES GOVERNMENT SERIES(2) BALANCED(3) GROWTH GROWTH
---------- ---------- ------------- ---------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
As of December 31:
1983............ $10,258.59 $10,339.37 $ 10,470.12
1984............ 11,175.34 11,453.64 10,237.14
1985............ 11,905.86 13,388.01 16,941.91
1986............ 12,514.94 15,137.25 32,599.29
1987............ 13,122.50 15,242.29 $ 9,844.68 49,087.62
1988............ 13,889.20 16,265.40 10,602.14 44,141.97
1989............ 14,941.00 17,990.50 12,423.1 56,919.65
1990............ 15,916.76 19,151.95 12,617.64 54,170.04
1991............ 16,648.66 22,256.25 14,926.64 82,262.43
1992............ 17,018.47 23,722.98 15,680.56 76,212.70
1993............ 17,259.12 26,326.49 17,086.43 86,417.09
1994............ 17,674.12 25,071.19 $ 9,838.87 $10,038.07 16,639.55 $ 9,968.28 $ 9,695.00 79,208.42
1995............ 18,401.19 29,948.07 11,557.83 11,360.92 21,514.34 12,242.06 14,193.96 107,838.80
1996............ 19,053.28 30,873.63 13,008.06 11,548.68 24,379.98 14,087.95 15,815.91 128,763.66
1997............ 19,770.95 33,745.25 14,224.45 12,328.54 30,407.16 16,117.12 19,572.63 156,835.46
1998............ 20,502.34 36,272.33 14,289.07 13,058.43 35,864.34 17,317.95 28,501.23 207,454.79
1999............ 21,201.50 35,588.76 14,270.63 12,875.72 38,880.28 16,191.16 37,682.20 236,777.25
<CAPTION>
CONTRACT VALUE(1)
--------------------------------------------------------------------------------------------------------------
MORGAN
HARRIS LOOMIS WESTPEAK STANLEY
DAVIS OAKMARK SAYLES GROWTH WESTPEAK INTERNATIONAL VIP PUTNAM
VENTURE MID CAP SMALL AND STOCK MAGNUM VIP EQUITY- INTERNATIONAL
VALUE VALUE(4) CAP INCOME INDEX(2) EQUITY OVERSEAS INCOME STOCK
---------- ---------- ---------- ---------- ---------- ------------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
As of December 31:
1983............
1984............
1985............
1986............ $ 9,888.64
1987............ $ 8,700.98 $ 9,345.49 9,615.25
1988............ 9,954.81 9,936.28 11,611.24
1989............ 12,748.34 12,343.46 13,412.67
1990............ 12,025.47 11,945.10 11,176.22
1991............ 15,441.83 12,695.83 14,462.11 $ 9,756.47
1992............ 16,313.91 11,156.05 16,645.30 8,614.09
1993............ $11,370.39 $11,321.11 17,628.00 15,078.13 19,396.57 12,523.98
1994............ $ 9,628.96 11,157.06 $ 9,590.97 11,004.57 17,555.45 $10,237.83 15,104.86 20,460.15 12,877.29
1995............ 13,201.25 14,313.48 12,156.37 14,780.39 23,679.19 10,698.65 16,311.44 27,238.96 12,904.09
1996............ 16,356.09 16,574.48 15,637.59 17,185.98 28,573.33 11,227.90 18,185.02 30,677.47 12,425.50
1997............ 21,511.40 19,149.94 19,225.09 22,593.88 37,314.92 10,904.04 19,981.29 38,742.01 11,942.91
1998............ 24,249.51 17,837.09 18,619.12 27,709.41 47,066.35 11,508.95 22,194.68 42,634.76 14,410.43
1999............ 28,083.49 17,631.72 24,161.33 29,864.28 55,866.17 14,116.24 31,190.25 44,695.45 16,522.24
<CAPTION>
SURRENDER VALUE(1)
--------------------------------------------------------------------------------------------------------------
SALOMON
BACK BAY BACK BAY BROTHERS SALOMON
ADVISORS ADVISORS STRATEGIC BROTHERS BACK BAY ALGER
MONEY BOND BOND U.S. MANAGED EQUITY CAPITAL
MARKET INCOME OPPORTUNITIES GOVERNMENT SERIES(2) BALANCED(3) GROWTH GROWTH
---------- ---------- ------------- ---------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
As of December 31:
1983............ $ 9,648.46 $ 9,724.51 $ 9,847.62
1984............ 10,561.87 10,825.14 9,674.33
1985............ 11,306.52 12,715.30 16,131.91
1986............ 11,941.77 14,446.07 31,789.29
1987............ 12,581.04 14,614.97 $ 9,248.76 48,277.62
1988............ 13,379.19 15,669.85 10,009.63 43,331.97
1989............ 14,460.36 17,413.80 11,788.16 56,109.65
1990............ 15,477.01 18,624.85 12,029.85 53,360.04
1991............ 16,338.98 21,845.84 14,302.11 81,452.43
1992............ 16,855.30 23,499.47 15,096.06 75,516.79
1993............ 17,249.12 26,316.49 16,528.21 86,407.09
1994............ 17,664.12 25,061.19 $ 9,258.29 $ 9,445.85 16,170.28 $ 9,380.13 $ 9,122.84 79,198.42
1995............ 18,391.19 29,938.07 10,928.71 10,742.43 21,107.08 11,575.99 13,422.49 107,828.80
1996............ 19,043.28 30,863.63 12,359.16 10,972.02 24,140.56 13,385.59 15,028.03 128,753.66
1997............ 19,760.95 33,735.25 13,579.35 11,768.76 30,387.16 15,386.85 18,767.63 156,825.48
1998............ 20,492.34 36,262.33 13,705.37 12,524.57 35,844.34 16,611.57 27,696.23 207,444.79
1999............ 21,191.50 35,578.76 13,751.89 12,407.20 38,860.28 15,603.28 36,877.20 236,767.25

<CAPTION>
SURRENDER VALUE(1)
--------------------------------------------------------------------------------------------------------------
MORGAN
HARRIS LOOMIS WESTPEAK STANLEY
DAVIS OAKMARK SAYLES GROWTH WESTPEAK INTERNATIONAL VIP PUTNAM
VENTURE MID CAP SMALL AND STOCK MAGNUM VIP EQUITY- INTERNATIONAL
VALUE VALUE(4) CAP INCOME INDEX(2) EQUITY OVERSEAS INCOME STOCK
---------- ---------- ---------- ---------- ---------- ------------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
As of December 31:
1983............
1984............
1985............
1986............ $ 9,305.15
1987............ $ 8,171.98 $ 8,771.28 9,091.03
1988............ 9,397.25 9,372.22 11,031.48
1989............ 12,097.30 11,704.96 12,804.10
1990............ 11,464.32 11,380.07 10,718.58
1991............ 14,796.43 12,154.15 13,936.47 $ 9,165.72
1992............ 15,706.61 10,726.94 16,115.97 8,128.93
1993............ $10,685.22 $10,638.82 17,052.72 14,575.67 18,867.86 11,884.04
1994............ $ 9,060.66 10,534.58 $ 9,012.40 10,390.32 17,061.45 $ 9,633.91 14,669.53 20,086.86 12,277.82
1995............ 12,483.38 13,584.96 11,482.43 14,028.76 23,232.96 10,115.92 15,990.34 26,988.81 12,361.47
1996............ 15,551.09 15,808.63 14,846.03 16,392.61 28,296.17 10,667.11 17,993.85 30,672.47 11,958.18
1997............ 20,706.40 18,354.37 18,407.59 21,773.88 37,294.92 10,408.36 19,953.79 38,737.01 11,546.71
1998............ 23,444.51 17,174.95 17,847.54 26,889.41 47,046.35 11,037.84 22,167.18 42,629.76 14,001.35
1999............ 27,278.49 17,056.32 23,343.83 29,044.28 55,846.17 13,603.05 31,162.75 44,690.45 16,204.84
</TABLE>

II-6
<PAGE>

ANNUAL PERCENTAGE CHANGE IN CONTRACT VALUE(1)
<TABLE>
<CAPTION>
SALOMON
BACK BAY BACK BAY BROTHERS SALOMON BACK BAY
ADVISORS ADVISORS STRATEGIC BROTHERS ADVISORS ALGER
MONEY BOND BOND U.S. MANAGED EQUITY
MARKET INCOME OPPORTUNITIES GOVERNMENT SERIES(2) BALANCED(3) GROWTH
-------- -------- ------------- ---------- --------- ----------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
As of December 31:
1983................... 2.59% 3.39%
1984................... 8.94 10.78
1985................... 6.54 16.89
1986................... 5.12 13.07
1987................... 4.85 0.69 -1.55%
1988................... 5.84 6.71 7.69
1989................... 7.57 10.61 17.18
1990................... 6.53 6.46 1.57
1991................... 4.60 16.21 18.30
1992................... 2.22 6.59 5.05
1993................... 1.41 10.97 8.97
1994................... 2.40 -4.77 -1.61% 0.38% -2.62 -0.32% -3.05%
1995................... 4.11 19.45 17.47 13.18 29.30 22.81 46.40
1996................... 3.54 3.09 12.55 1.65 13.32 15.08 11.43
1997................... 3.77 9.30 9.35 6.75 24.72 14.40 23.75
1998................... 3.70 7.49 0.45 5.92 17.95 7.45 45.62
1999................... 3.41 -1.88 -0.13 -1.40 8.41 -6.51 32.21
Cumulative Return....... 112.01 255.89 42.71 28.76 288.80 61.91 276.82
Annual Effective Rate of
Return................. 4.71 8.08 7.13 5.02 11.31 9.78 29.29
</TABLE>
<TABLE>
<CAPTION>
Morgan
HARRIS LOOMIS STANLEY
DAVIS OAKMARK SAYLES WESTPEAK WESTPEAK INTERNATIONAL VIP PUTNAM
CAPITAL VENTURE MID CAP SMALL GROWTH STOCK MAGNUM VIP EQUITY- INTERNATIONAL
GROWTH VALUE VALUE(4) CAP AND INCOME INDEX(2) EQUITY OVERSEAS INCOME STOCK
-------- ------- -------- ------ ---------- -------- ------------- -------- ------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
As of December 31:
1983................ 4.70%
1984................ -2.23
1985................ 65.49
1986................ 92.42 -1.11%
1987................ 50.58 -12.99% -6.55% -2.76
1988................ -10.08 14.41 6.32 20.76
1989................ 28.95 28.06 24.23 15.51
1990................ -4.83 -5.67 -3.23 -16.67
1991................ 51.86 28.41 6.28 29.40 -2.44%
1992................ -7.35 5.65 -12.13 15.10 -11.71
1993................ 13.39 13.70% 13.21% 8.06 35.16 16.53 45.39
1994................ -8.34 -3.71% -1.88 -4.09% -2.80 -0.41 2.38% 0.18 5.48 2.82
1995................ 36.15 37.10 28.29 26.75 34.31 34.88 4.50 7.99 33.13 0.21
1996................ 19.40 23.90 15.80 28.64 16.28 20.67 4.95 11.49 12.62 -3.71
1997................ 21.80 31.52 15.54 22.94 31.47 30.59 -2.88 9.88 26.29 -3.88
1998................ 32.28 12.73 -6.86 -3.15 22.64 26.13 5.55 11.08 10.05 20.66
1999................ 14.13 15.81 -1.15 29.77 7.78 18.70 22.65 40.53 4.83 14.65
Cumulative Return.... 2,267.77 180.83 76.32 141.61 198.64 458.66 41.16 211.90 346.95 65.22
Annual Effective Rate
of Return........... 21.38 22.13 8.88 16.85 17.83 14.55 6.90 9.21 12.05 5.96
</TABLE>
<TABLE>
<CAPTION>
LEHMAN
INTERMEDIATE
GOVERNMENT/
DOW JONES S&P 500 CORPORATE CONSUMER
INDUSTRIAL STOCK BOND PRICE
AVERAGE(5) INDEX(6) INDEX(7) INDEX(8)
---------- -------- ------------ --------
<S> <C> <C> <C> <C>
As of December 31:
1983............................... 5.11% 1.79% 4.51% 1.07%
1984............................... 1.35 6.27 14.37 3.95
1985............................... 33.62 31.73 18.06 3.77
1986............................... 27.25 18.66 13.13 1.13
1987............................... 5.55 5.25 3.66 4.41
1988............................... 16.21 16.61 6.67 4.42
1989............................... 32.24 31.69 12.77 4.65
1990............................... -.54 -3.10 9.16 6.11
1991............................... 24.25 30.47 14.62 3.06
1992............................... 7.40 7.62 7.17 2.90
1993............................... 16.97 10.08 8.79 2.75
1994............................... 5.02 1.32 -1.93 2.67
1995............................... 36.94 37.58 15.33 2.54
1996............................... 28.91 22.96 4.05 3.32
1997............................... 24.91 33.36 7.87 1.83
1998............................... 18.14 28.52 8.44 1.61
1999............................... 27.21 21.04 -2.15 2.68
Cumulative Return................... 1,791.58 1,653.04 357.92 72.44
Annual Effective Rate of Return..... 18.88 18.35 9.36 3.26
</TABLE>

II-7
<PAGE>

ANNUAL PERCENTAGE CHANGE IN SURRENDER VALUE(1)

<TABLE>
<CAPTION>
SALOMON
BACK BAY BACK BAY BROTHERS SALOMON BACK BAY
ADVISORS ADVISORS STRATEGIC BROTHERS ADVISORS ALGER
MONEY BOND BOND U.S. MANAGED EQUITY
MARKET INCOME OPPORTUNITIES GOVERNMENT SERIES(2) BALANCED(3) GROWTH
-------- -------- ------------- ---------- --------- ----------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
As of December 31:
1983................... -3.52% -2.75%
1984................... 9.47 11.32
1985................... 7.05 17.46
1986................... 5.62 13.61
1987................... 5.35 1.17 -7.51
1988................... 6.34 7.22 8.23
1989................... 8.08 11.13 17.77
1990................... 7.03 6.95 2.05
1991................... 5.57 17.29 18.89
1992................... 3.16 7.57 5.55
1993................... 2.34 11.99 9.49
1994................... 2.41 -4.77 -7.42% -5.54% -2.17 -6.20% -8.77%
1995................... 4.12 19.46 18.04 13.73 30.53 23.41 47.13
1996................... 3.55 3.09 13.09 2.14 14.37 15.63 11.96
1997................... 3.77 9.30 9.87 7.26 25.88 14.95 24.88
1998................... 3.70 7.49 0.93 6.42 17.96 7.96 47.57
1999................... 3.41 -1.89 0.34 -0.94 8.41 -6.07 33.15
Cumulative Return....... 111.92 255.79 37.52 24.07 288.60 56.03 268.77
Annual Effective Rate of
Return................. 4.71 8.08 6.36 4.26 11.31 9.00 28.75
</TABLE>

<TABLE>
<CAPTION>
MORGAN
HARRIS LOOMIS STANLEY
DAVIS OAKMARK SAYLES WESTPEAK WESTPEAK INTERNATIONAL VIP PUTNAM
CAPITAL VENTURE MID CAP SMALL GROWTH STOCK MAGNUM VIP EQUITY- INTERNATIONAL
GROWTH VALUE VALUE(4) CAP AND INCOME INDEX(2) EQUITY OVERSEAS INCOME STOCK
-------- ------- -------- ------ ---------- -------- ------------- -------- ------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
As of December 31:
1983................ -1.52%
1984................ -1.76
1985................ 66.75
1986................ 97.06 -6.95%
1987................ 51.87 -18.28 -12.29% -2.30
1988................ -10.24 14.99 6.85 21.34
1989................ 29.49 28.73 24.89 16.07
1990................ -4.90 -5.23 -2.78 -16.29
1991................ 52.65 29.07 6.80 30.02 -8.34%
1992................ -7.29 6.15 -11.74 15.64 -11.31
1993................ 14.42 6.85% 6.39% 8.57 35.88 17.08 46.19
1994................ -8.34 -9.39% -1.41 -9.88% -2.34 0.05 -3.66% 0.64 6.46 3.31
1995................ 36.15 37.78 28.96 27.41 35.02 36.17 5.00 9.00 34.36 0.68
1996................ 19.41 24.57 16.37 29.29 16.85 21.79 5.45 12.53 13.65 -3.26
1997................ 21.80 33.15 16.10 23.99 32.83 31.80 -2.43 10.89 26.29 -3.44
1998................ 32.28 13.22 -6.43 -3.04 23.49 26.15 6.05 11.09 10.05 21.26
1999................ 14.14 16.35 -0.69 30.80 8.01 18.70 23.24 40.58 4.83 15.74
Cumulative Return.... 2,267.67 172.78 70.56 133.44 190.44 458.46 36.03 211.63 346.90 62.05
Annual Effective Rate
of Return........... 21.38 21.45 8.34 16.14 17.34 14.54 6.14 9.20 12.04 5.73
</TABLE>

II-8

<PAGE>

<TABLE>
<CAPTION>
LEHMAN
INTERMEDIATE
GOVERNMENT/
DOW JONES S&P 500 CORPORATE CONSUMER
INDUSTRIAL STOCK BOND PRICE
AVERAGE(5) INDEX(6) INDEX(7) INDEX(8)
---------- -------- ------------ --------
<S> <C> <C> <C> <C>
As of December 31:
1983............................... 5.11% 1.79% 4.51% 1.07%
1984............................... 1.35 6.27 14.37 3.95
1985............................... 33.62 31.73 18.06 3.77
1986............................... 27.25 18.66 13.13 1.13
1987............................... 5.55 5.25 3.66 4.41
1988............................... 16.21 16.61 6.67 4.42
1989............................... 32.24 31.69 12.77 4.65
1990............................... -0.54 -3.10 9.16 6.11
1991............................... 24.25 30.47 14.62 3.06
1992............................... 7.40 7.62 7.17 2.90
1993............................... 16.97 10.08 8.79 2.75
1994............................... 5.02 1.32 -1.93 2.67
1995............................... 36.94 37.58 15.35 2.54
1996............................... 28.91 22.96 4.05 3.32
1997............................... 24.91 33.36 7.87 1.83
1998............................... 18.14 28.52 8.44 1.61
1999............................... 27.21 21.04 -2.15 2.68
Cumulative Return................... 1,791.58 1,653.04 357.92 72.44
Annual Effective Rate of Return..... 18.88 18.35 9.36 3.26
</TABLE>
- --------
NOTES:

(1) The Contract Value, surrender value and annual percentage change figures
assume reinvestment of dividends and capital gain distributions. The
Contract Value figures are net of all deductions and expenses except
premium tax. Each surrender value shown equals the Contract Value less
any applicable Contingent Deferred Sales Charge and a pro rata portion of
the annual $30 Administration Contract Charge. (See "Administration
Charges, Contingent Deferred Sales and Other Deductions.") 1983 figures
for the Capital Growth, Back Bay Advisors Bond Income and Back Bay
Advisors Money Market Series are from September 1 through December 31,
1983. The 1986 figure for the VIP Equity-Income Portfolio is from
November 1, 1986 through December 31, 1986; the 1987 figure for the VIP
Overseas Portfolio is from February 1, 1987 through December 31, 1987.
The 1987 figures for the Westpeak Stock Index and Back Bay Advisors
Managed Series are from May 1, 1987 through December 31, 1987. The 1993
figures for the Harris Oakmark Mid Cap Value and Westpeak Growth and
Income Series are from May 1, 1993 through December 31, 1993. The 1994
figure for the Loomis Sayles Small Cap Series is from May 2, 1994 through
December 31, 1994. The 1994 figures for the other Zenith Fund Series are
from November 1, 1994 through December 31, 1994. The 1991 figure for the
Putnam International Portfolio is from May 1, 1991 through December 31,
1991.

(2) The Westpeak Stock Index and Back Bay Advisors Managed Series are only
available through Contracts purchased prior to May 1, 1995.

(3) The Balanced Series' subadviser was Loomis Sayles & Company, L.P. until
May 1, 2000 when Wellington Management Company LLP became the subadviser.

(4) Harris Associates L.P. became the subadviser on May 1, 2000. Prior to
that time, other entities served as subadviser.

(5) The Dow Jones Industrial Average is an unmanaged index of 30 large
industrial stocks traded on the New York Stock Exchange. The annual
percentage change figures have been adjusted to reflect reinvestment of
dividends. 1983 figures are from September 1 through December 31, 1983.
(6) The S&P 500 Stock Index is an unmanaged weighted index of the stock
performance of 500 industrial, transportation, utility and financial
companies. The annual percentage change figures have been adjusted to
reflect reinvestment of dividends. 1983 figures are from September 1
through December 31, 1983.
(7) The Lehman Intermediate Government/Corporate Bond Index is a subset of
the Lehman Government/ Corporate Bond Index covering all issues with
maturities between 1 and 10 years which is comprised of taxable, publicly
issued, non-convertible debt obligations issued or guaranteed by the U.S.
Government or its agencies and another Lehman Index that is comprised of
taxable, fixed rate publicly issued, investment grade non-convertible
corporate debt obligations. 1983 figures are from September 1 through
December 31, 1983.
(8) The Consumer Price Index, published by the U.S. Bureau of Labor
Statistics, is a statistical measure of changes, over time, in the prices
of goods and services. 1983 figures are from September 1 through December
31, 1983.

II-9
<PAGE>

The chart below illustrates what would have been the change in value of a
$100 monthly investment in each of the Eligible Funds if monthly purchase
payments for a Contract had been made on the first day of each month starting
with September 1, 1983 for the Capital Growth, Back Bay Advisors Bond Income
and Back Bay Advisors Money Market Series; November 1, 1986 for the VIP
Equity-Income Portfolio; February 1, 1987 for the VIP Overseas Portfolio; May
1, 1987 for the Westpeak Stock Index Series and Back Bay Advisors Managed
Series; May 1, 1993 for the Harris Oakmark Mid Cap Value and Westpeak Growth
and Income Series; May 2, 1994 for the Loomis Sayles Small Cap Series,
November 1, 1994 for the other six Zenith Fund Series and May 1, 1991 for the
Putnam International Stock Portfolio. The figures shown do not reflect the
deduction of any premium tax charge, and only surrender values, not Contract
Values, reflect the deduction of any applicable Contingent Deferred Sales
Charge. Each purchase payment is divided by the Accumulation Unit Value of
each sub-account on the date of the investment to calculate the number of
Accumulation Units purchased. The total number of units under the Contract is
reduced on each Contract anniversary as a result of the $30 Administration
Contract Charge, as described in the illustrations of average annual total
return. The Contract Value and the surrender value are calculated according to
the methods described in the preceding examples. The annual effective rate of
return in this illustration represents the compounded annual rate that the
hypothetical purchase payments shown would have had to earn in order to
produce the Contract Value and surrender value illustrated on December 31,
1999. In other words, the annual effective rate of return is the rate which,
when added to 1 and raised to a power equal to the number of months for which
the payment is invested divided by twelve, and multiplied by the payment
amount, for all monthly payments, would yield the contract value or surrender
value on the ending date of the illustration.

INVESTMENT RESULTS

<TABLE>
<CAPTION>
CONTRACT VALUE
-----------------------------------------------------------------------------------------------------------
BACK BAY BACK BAY SALOMON
ADVISORS ADVISORS BROTHERS SALOMON ALGER
CUMULATIVE MONEY BOND CAPITAL CUMULATIVE STRATEGIC BOND BROTHERS U.S. EQUITY
PAYMENTS MARKET INCOME GROWTH PAYMENTS OPPORTUNITIES GOVERNMENT BALANCED(1) GROWTH
---------- ---------- ---------- ---------- ---------- -------------- ------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
As of December 31:
1983............ $ 400 $ 406.44 $ 405.13 $ 409.40
1984............ 1,600 1,673.57 1,720.27 1,648.95
1985............ 2,800 2,999.59 3,304.19 4,277.11
1986............ 4,000 4,362.45 4,982.85 9,765.58
1987............ 5,200 5,788.99 6,208.12 15,890.14
1988............ 6,400 7,350.98 7,835.43 15,451.37
1989............ 7,600 9,142.45 9,915.71 21,215.12
1990............ 8,800 10,970.63 11,807.13 21,316.48
1991............ 10,000 12,694.15 15,037.48 33,833.21
1992............ 11,200 14,182.75 17,272.18 32,549.81
1993............ 12,400 15,588.48 20,405.31 38,177.72
1994............ 13,600 17,179.87 20,609.31 36,110.66 $ 200 $ 196.89 $ 200.97 $ 200.89 $ 199.08
1995............ 14,800 19,112.88 25,924.91 50,536.57 1,400 1,507.66 1,476.06 1,543.68 1,671.74
1996............ 16,000 21,015.28 27,970.49 61,680.44 2,600 2,953.92 2,704.81 3,072.43 3,119.42
1997............ 17,200 23,035.65 31,839.31 76,386.05 3,800 4,468.88 4,116.70 4,784.73 5,139.40
1998............ 18,400 25,117.66 35,471.79 102,421.14 5,000 5,665.15 5,577.70 6,376.35 8,979.85
1999............ 19,600 27,204.91 36,000.18 118,236.35 6,200 6,851.58 6,681.23 7,090.73 13,293.36
Annual Effective
Rate of Return... 3.87 7.02 19.54 3.82% 2.85% 5.14% 29.94%
<CAPTION>
MORGAN
DAVIS STANLEY BACK BAY WESTPEAK
VENTURE INTERNATIONAL CUMULATIVE ADVISORS STOCK
VALUE MAGNUM EQUITY PAYMENTS MANAGED(2) INDEX(2)
----------- ------------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
As of December 31:
1983............
1984............
1985............
1986............
1987............ $ 800 $ 770.01 $ 692.54
1988............ 2,000 2,043.71 2,035.10
1989............ 3,200 3,667.24 3,919.94
1990............ 4,400 4,943.00 4,866.74
1991............ 5,600 7,152.27 7,578.85
1992............ 6,800 8,757.01 9,255.04
1993............ 8,000 10,767.63 11,234.80
1994............ $ 197.97 $ 204.56 9,200 11,675.61 12,385.13
1995............ 1,632.30 1,436.32 10,400 16,460.59 18,094.48
1996............ 3,373.37 2,706.36 11,600 19,948.81 23,166.00
1997............ 5,782.92 3,767.74 12,800 26,213.90 31.612.17
1998............ 7,808.14 5,140.59 14,000 32,236.96 41,250.07
1999............ 10,329.36 7,695.58 15,200 36,210.56 50,300.40
Annual Effective
Rate of Return... 19.81% 8.29% 12.87% 17.51%
</TABLE>
- ----

(1) The Balanced Series' subadviser was Loomis Sayles & Company, L.P. until
May 1, 2000 when Wellington Management Company LLP became the subadviser.

(2) The Westpeak Stock Index Series and the Back Bay Advisors Managed Series
are only available through Contracts purchased prior to May 1, 1995.

(3) Harris Associates L.P. became the subadviser on May 1, 2000. Prior to
that time, other entities served as subadviser.

II-10
<PAGE>

INVESTMENT RESULTS

<TABLE>
<CAPTION>
CONTRACT VALUE
-------------------------------------------------------------------------------------------------------
HARRIS
OAKMARK WESTPEAK LOOMIS VIP
CUMULATIVE MID CAP GROWTH & CUMULATIVE SAYLES CUMULATIVE VIP CUMULATIVE EQUITY-
PAYMENTS VALUE(3) INCOME PAYMENTS SMALL CAP PAYMENTS OVERSEAS PAYMENTS INCOME
---------- --------- ---------- ---------- ----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
As of December 31:
1983............
1984............
1985............
1986............ $ 200 $ 195.78
1987............ $ 1,100 $ 1,007.13 1,400 1,215.08
1988............ 2,300 2,306.86 2,600 2,714.98
1989............ 3,500 4,229.80 3,800 4,346.48
1990............ 4,700 5,222.71 5,000 4,721.63
1991............ 5,900 6,778.08 6,200 7,427.49
1992............ 7,100 7,031.68 7,400 9,840.29
1993............ $ 800 $ 848.90 $ 848.38 8,300 10,872.84 8,600 12,731.03
1994............ 2,000 2,021.49 2,002.46 $ 800 $ 782.65 9,500 12,048.05 9,800 14,650.43
1995............ 3,200 3,907.29 4,059.83 2,000 2,337.57 10,700 14,272.33 11,000 20,892.48
1996............ 4,400 5,786.10 6,026.98 3,200 4,363.73 11,900 17,185.14 12,200 24,811.34
1997............ 5,600 7,957.27 9,279.81 4,400 6,686.43 13,100 20,101.70 13,400 32,682.67
1998............ 6,800 8,532.56 12,712.04 5,600 7,671.86 14,300 23,575.58 14,600 37,233.40
1999............ 8,000 9,587.90 14,933.13 6,800 11,512.35 15,500 34,699.35 15,800 40,235.68
Annual Effective
Rate of Return... 5.35% 18.45% 18.51% 11.74% 13.26%
<CAPTION>
PUTNAM
CUMULATIVE INTERNATIONAL
PAYMENTS STOCK
---------- -------------
<S> <C> <C>
As of December 31:
1983............
1984............
1985............
1986............
1987............
1988............
1989............
1990............
1991............ $ 800 $ 812.73
1992............ 2,000 1,829.72
1993............ 3,200 4,040.12
1994............ 4,400 5,280.01
1995............ 5,600 6,513.62
1996............ 6,800 7,435.52
1997............ 8,000 8,252.48
1998............ 9,200 11,232.79
1999............ 10,400 14,199.73
Annual Effective
Rate of Return... 7.03%
</TABLE>
- -----

(1) The Balanced Series' subadviser was Loomis Sayles & Company, L.P. until
May 1, 2000 when Wellington Management Company LLP became the subadviser.

(2) The Westpeak Stock Index Series and the Back Bay Advisors Managed Series
are only available through Contracts purchased prior to May 1, 1995.

(3) Harris Associates L.P. became the subadviser on May 1, 2000. Prior to
that time, other entities served as subadviser.

II-11
<PAGE>

<TABLE>
<CAPTION>
CUMULATIVE
PAYMENTS
----------
<S> <C>
As of December 31:
1983............ $ 400
1984............ 1,600
1985............ 2,800
1986............ 4,000
1987............ 5,200
1988............ 6,400
1989............ 7,600
1990............ 8,800
1991............ 10,000
1992............ 11,200
1993............ 12,400
1994............ 13,600
1995............ 14,800
1996............ 16,000
1997............ 17,200
1998............ 18,400
1999............ 19,600
Annual Effective
Rate of Return...
<CAPTION>
SURRENDER VALUE
---------------------------------------------------------------------------------------------------------------
BACK BAY BACK BAY SALOMON SALOMON
ADVISORS ADVISORS BROTHERS BROTHERS ALGER DAVIS
MONEY BOND CAPITAL CUMULATIVE STRATEGIC BOND U.S. EQUITY VENTURE
MARKET INCOME GROWTH PAYMENTS OPPORTUNITIES GOVERNMENT BALANCED(1) GROWTH VALUE
---------- ---------- ---------- ---------- -------------- ----------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
As of December 31:
1983............ $ 372.66 $ 371.43 $ 375.45
1984............ 1,573.20 1,617.37 1,549.91
1985............ 2,841.11 3,130.63 4,055.39
1986............ 4,156.14 4,748.62 9,435.58
1987............ 5,544.54 5,946.69 15,464.14
1988............ 7,076.34 7,543.35 14,929.37
1989............ 8,844.46 9,593.36 20,597.12
1990............ 10,664.43 11,478.34 20,730.94
1991............ 12,455.65 14,756.80 33,214.21
1992............ 14,045.10 17,106.73 32,246.86
1993............ 15,578.48 20,395.31 38,167.72
1994............ 17,169.67 20,599.31 36,100.66 $ 200 $ 180.37 $ 184.22 $ 184.14 $ 182.44 $ 181.39
1995............ 19,102.88 25,914.91 50,526.57 1,400 1,421.25 1,391.35 1,455.32 1,576.47 1,539.15
1996............ 21,005.28 27,960.49 61,670.44 2,600 2,802.70 2,565.93 2,915.35 2,950.51 3,201.39
1997............ 23,025.65 31,829.31 26,193.90 3,800 4,262.78 3,926.45 4,564.41 4,903.13 5,517.69
1998............ 25,107.66 35,461.79 102,411.14 5,000 5,430.72 5,346.90 6,113.11 8,611.17 7,486.91
1999............ 27,194.91 35,990.18 118,226.35 6,200 6,599.92 6,435.71 6,830.46 12,809.80 9,952.50
Annual Effective
Rate of Return... 3.87 7.02 19.54 2.39% 1.42% 3.70% 28.44% 18.34%
</TABLE>
<TABLE>
<CAPTION>
MORGAN
STANLEY
INTERNATIONAL
MAGNUM CUMULATIVE
EQUITY PAYMENTS
--------- ----------
<S> <C> <C>
As of December 31:
1983............
1984............
1985............
1986............
1987............ $ 800
1988............ 2,000
1989............ 3,200
1990............ 4,400
1991............ 5,600
1992............ 6,800
1993............ 8,000
1994............ $ 187.60 9,200
1995............ 1,353.76 10,400
1996............ 2,567.39 11,600
1997............ 3,593.19 12,800
1998............ 4,927.40 14,000
1999............ 7,413.54 15,200
Annual Effective
Rate of Return... 6.85%

<CAPTION>
SURRENDER VALUE
----------------------------------------------------------------------------------------------------------------
HARRIS WESTPEAK LOOMIS
BACK BAY WESTPEAK OAKMARK GROWTH SAYLES
ADVISORS STOCK CUMULATIVE MID CAP AND CUMULATIVE SMALL CUMULATIVE VIP CUMULATIVE
MANAGED(2) INDEX(2) PAYMENTS VALUE(3) INCOME PAYMENTS CAP PAYMENTS OVERSEAS PAYMENTS
----------- ----------- ---------- ---------- ---------- ---------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
As of December 31:
1983............
1984............
1985............
1986............ $ 200
1987............ $ 704.96 $ 632.03 $ 1,100 $ 920.71 1,400
1988............ 1,913.35 1,905.21 2,300 2,154.79 2,600
1989............ 3,465.71 3,705.90 3,500 3,992.93 3,800
1990............ 4,700.56 4,627.74 4,700 4,960.18 5,000
1991............ 6,842.60 7,251.91 5,900 6,476.07 6,200
1992............ 8,421.76 8,901.86 7,100 6,751.04 7,400
1993............ 10,408.45 10,860.90 $ 800 $ 779.24 $ 778.75 8,300 10,502.85 8,600
1994............ 11,340.37 12,030.73 2,000 1,892.33 1,874.32 $ 800 $ 719.36 9,500 11,695.26 9,800
1995............ 16,144.30 17,748.78 3,200 3,693.88 3,838.86 2,000 2,193.84 10,700 13,987.92 11,000
1996............ 19,749.27 22,937.51 4,400 5,505.72 5,735.76 3,200 4,130.23 11,900 17,002.98 12,200
1997............ 26,193.90 31,592.17 5,600 7,615.01 8,883.98 4,400 6,363.04 13,100 20,074.20 13,400
1998............ 32,216.96 41,230.07 6,800 8,205.39 12,234.41 5,600 7,341.15 14,300 23,548.08 14,600
1999............ 36,190.56 50,280.40 8,000 9,265.88 14,442.73 6,800 11,077.90 15,500 34,671.85 15,800
Annual Effective
Rate of Return... 12.88% 17.50% 4.35% 17.46% 17.14% 11.73%
</TABLE>

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

VIP PUTNAM
EQUITY- CUMULATIVE INTERNATIONAL
INCOME PAYMENTS STOCK
----------- ---------- -------------
<S> <C> <C> <C>
As of December 31:
1983............
1984............
1985............
1986............ $ 179.32
1987............ 1,144.47
1988............ 2,575.59
1989............ 4,145.89
1990............ 4,525.41
1991............ 7,155.10 $ 800 $ 745.18
1992............ 9,525.32 2,000 1,710.91
1993............ 12,382.29 3,200 3,820.13
1994............ 14,381.73 4,400 5,022.41
1995............ 20,699.45 5,600 6,229.82
1996............ 24,806.34 6,800 7,147.84
1997............ 32,677.67 8,000 7,972.52
1998............ 37,228.90 9,200 10,909.50
1999............ 40,230.68 10,400 13,924.14
Annual Effective
Rate of Return... 13.26% 6.59%
</TABLE>
- -----

(1) The Balanced Series' subadviser was Loomis Sayles & Company, L.P. until
May 1, 2000 when Wellington Management Company LLP became the subadviser.

(2) The Westpeak Stock Index and Back Bay Advisors Managed Series are only
available through Contracts purchased prior to May 1, 1995.

(3) Harris Associates L.P. became the subadviser on May 1, 2000. Prior to that
time, other entities served as subadviser.

II-12
<PAGE>

As discussed in the prospectus in the section entitled "Investment
Performance Information," the Variable Account may illustrate historical
investment performance by showing the percentage change in unit value and the
annual effective rate of return of each sub-account of the Variable Account
for every calendar year since inception of the corresponding Eligible Funds to
the date of the illustration and for the 10, 5 and 1 year periods and the
year-to-date period ending with the date of the illustration. Examples of such
illustrations follow. Such illustrations do not reflect the impact of any
Contingent Deferred Sales Charge, premium tax charge, or the annual $30
Administration Contract Charge. The method of calculating the percentage
change in unit value is described in the prospectus under "Investment
Experience Information." The annual effective rate of return in these
illustrations is calculated by dividing the unit value at the end of the
period by the unit value at the beginning of the period, raising this quantity
to the power of 1/n (where n is the number of years in the period), and then
subtracting 1.

Set forth on the following pages are illustrations of the percentage change
in unit value information and annual effective rate of return information
discussed above that may appear in the Variable Account's Annual and Semi-
Annual Reports and in other illustrations of historical investment
performance. Such illustrations do not reflect the impact of any Contingent
Deferred Sales Charge or the annual $30 Administration Contract Charge.

BACK BAY ADVISORS MONEY MARKEY SUB-ACCOUNT

ANNUAL PERCENT CHANGE IN UNIT VALUE*

<TABLE>
<CAPTION>
ACCUMULATION %
DATE UNIT VALUE CHANGE
- ---- ------------ ------
<S> <C> <C>
August 26, 1983............................................. 1.000000
December 31, 1983........................................... 1.027165 2.7%
December 31, 1984........................................... 1.122053 9.2%
December 31, 1985........................................... 1.198477 6.8%
December 31, 1986........................................... 1.262853 5.4%
December 31, 1987........................................... 1.327245 5.1%
December 31, 1988........................................... 1.407892 6.1%
December 31, 1989........................................... 1.517621 7.8%
December 31, 1990........................................... 1.619846 6.7%
December 31, 1991........................................... 1.697425 4.8%
December 31, 1992........................................... 1.738206 2.4%
December 31, 1993........................................... 1.765866 1.6%
December 31, 1994........................................... 1.811432 2.6%
December 31, 1995........................................... 1.889065 4.3%
December 31, 1996........................................... 1.959126 3.7%
December 31, 1997........................................... 2.036045 3.9%
December 31, 1998........................................... 2.114493 3.9%
December 31, 1999........................................... 2.189734 3.6%
</TABLE>

PERCENT CHANGE IN UNIT VALUE AND ANNUAL EFFECTIVE RATE OF RETURN*

<TABLE>
<CAPTION>
% CHANGE ANNUAL
IN UNIT EFFECTIVE
VALUE RATE
-------- ---------
<S> <C> <C>
16 years, 4 months ended December 31, 1999................... 119.0% 4.9%
10 years ended December 31, 1999............................. 44.3% 3.7%
5 years ended December 31, 1999.............................. 20.9% 3.9%
1 year ended December 31, 1999............................... 3.6% 3.6%
</TABLE>
- --------

* Unit values do not reflect the impact of any Contingent Deferred Sales
Charge, premium tax charge or the annual $30 Administration Contract Charge.

II-13
<PAGE>

BACK BAY ADVISORS BOND INCOME SUB-ACCOUNT

ANNUAL PERCENT CHANGE IN UNIT VALUE*

<TABLE>
<CAPTION>
ACCUMULATION %
DATE UNIT VALUE CHANGE
- ---- ------------ ------
<S> <C> <C>
August 26, 1983............................................. 1.000000
December 31, 1983........................................... 1.027196 2.7%
December 31, 1984........................................... 1.141109 11.1%
December 31, 1985........................................... 1.337005 17.2%
December 31, 1986........................................... 1.514752 13.3%
December 31, 1987........................................... 1.528314 0.9%
December 31, 1988........................................... 1.633970 6.9%
December 31, 1989........................................... 1.810362 10.8%
December 31, 1990........................................... 1.930406 6.6%
December 31, 1991........................................... 2.246568 16.4%
December 31, 1992........................................... 2.397657 6.7%
December 31, 1993........................................... 2.663825 11.1%
December 31, 1994........................................... 2.539801 -4.7%
December 31, 1995........................................... 3.037039 19.6%
December 31, 1996........................................... 3.134109 3.2%
December 31, 1997........................................... 3.428788 9.4%
December 31, 1998........................................... 3.688741 7.6%
December 31, 1999........................................... 3.622325 -1.8%
</TABLE>

PERCENT CHANGE IN UNIT VALUE AND ANNUAL EFFECTIVE RATE OF RETURN*

<TABLE>
<CAPTION>
% CHANGE ANNUAL
IN UNIT EFFECTIVE
VALUE RATE
-------- ---------
<S> <C> <C>
16 years, 4 months ended December 31, 1999................... 262.2% 8.2%
10 years ended December 31, 1999............................. 100.1% 7.2%
5 years ended December 31, 1999.............................. 42.6% 7.4%
1 year ended December 31, 1999............................... -1.8% -1.8%
</TABLE>

SALOMON BROTHERS STRATEGIC BOND OPPORTUNITIES SUB-ACCOUNT

ANNUAL PERCENT CHANGE IN UNIT VALUE*

<TABLE>
<CAPTION>
ACCUMULATION %
DATE UNIT VALUE CHANGE
---- ------------ ------
<S> <C> <C>
October 31, 1994........................................... 1.000000
December 31, 1994.......................................... 0.983850 -1.6%
December 31, 1995.......................................... 1.158823 17.8%
December 31, 1996.......................................... 1.307292 12.8%
December 31, 1997.......................................... 1.432601 9.6%
December 31, 1998.......................................... 1.442191 0.7%
December 31, 1999.......................................... 1.443394 0.1%
</TABLE>
- --------

* Unit values do not reflect the impact of any Contingent Deferred Sales
Charge, premium tax charge or the annual $30 Administration Contract Charge.

II-14
<PAGE>

PERCENT CHANGE IN UNIT VALUE AND ANNUAL EFFECTIVE RATE OF RETURN*

<TABLE>
<CAPTION>
% CHANGE ANNUAL
IN UNIT EFFECTIVE
VALUE RATE
-------- ---------
<S> <C> <C>
5 years, 2 months ended December 31, 1999.................... 44.3% 7.4%
5 years ended December 31, 1999.............................. 46.7% 8.0%
1 year ended December 31, 1999............................... 0.1% 0.1%
</TABLE>

SALOMON BROTHERS U.S. GOVERNMENT SUB-ACCOUNT

ANNUAL PERCENT CHANGE IN UNIT VALUE*

<TABLE>
<CAPTION>
ACCUMULATION %
DATE UNIT VALUE CHANGE
- ---- ------------ ------
<S> <C> <C>
October 31, 1994............................................ 1.000000
December 31, 1994........................................... 1.003770 0.4%
December 31, 1995........................................... 1.139109 13.5%
December 31, 1996........................................... 1.160957 1.9%
December 31, 1997........................................... 1.242399 7.0%
December 31, 1998........................................... 1.318989 6.2%
December 31, 1999........................................... 1.303556 -1.2%
</TABLE>

PERCENT CHANGE IN UNIT VALUE AND ANNUAL EFFECTIVE RATE OF RETURN*

<TABLE>
<CAPTION>
% CHANGE ANNUAL
IN UNIT EFFECTIVE
VALUE RATE
-------- ---------
<S> <C> <C>
5 years, 2 months ended December 31, 1999.................... 30.4% 5.3%
5 years ended December 31, 1999.............................. 29.9% 5.4%
1 year ended December 31, 1999............................... -1.2% -1.2%
</TABLE>

BACK BAY ADVISORS MANAGED SUB-ACCOUNT**

ANNUAL PERCENT CHANGE IN UNIT VALUE*

<TABLE>
<CAPTION>
ACCUMULATION %
DATE UNIT VALUE CHANGE
---- ------------ ------
<S> <C> <C>
May 1, 1987................................................ 1.000000
December 31, 1987.......................................... .984530 -1.5%
December 31, 1988.......................................... 1.063444 8.0%
December 31, 1989.......................................... 1.249451 17.5%
December 31, 1990.......................................... 1.272224 1.8%
December 31, 1991.......................................... 1.508379 18.6%
December 31, 1992.......................................... 1.587827 5.3%
December 31, 1993.......................................... 1.733382 9.2%
December 31, 1994.......................................... 1.691157 -2.4%
December 31, 1995.......................................... 2.190193 29.5%
December 31, 1996.......................................... 2.485306 13.5%
December 31, 1997.......................................... 3.103331 24.9%
December 31, 1998.......................................... 3.663526 18.1%
December 31, 1999.......................................... 3.974735 8.5%
</TABLE>
- --------

* Unit values do not reflect the impact of any Contingent Deferred Sales
Charge, premium tax charge or the annual $30 Administration Contract Charge.

** These sub-accounts are only available through Contracts purchased prior to
May 1, 1995.

II-15
<PAGE>

PERCENT CHANGE IN UNIT VALUE AND ANNUAL EFFECTIVE RATE OF RETURN*

<TABLE>
<CAPTION>
% CHANGE ANNUAL
IN UNIT EFFECTIVE
VALUE RATE
------------ ---------
<S> <C> <C>
12 years, 8 months ended December 31, 1999.............. 297.5% 11.5%
10 years ended December 31, 1999........................ 218.1% 12.3%
5 years ended December 31, 1999......................... 135.0% 18.6%
1 year ended December 31, 1999.......................... 8.5% 8.5%
</TABLE>

BALANCED SUB-ACCOUNT***

ANNUAL PERCENT CHANGE IN UNIT VALUE*

<TABLE>
<CAPTION>
ACCUMULATION %
DATE UNIT VALUE CHANGE
---- ------------ ---------
<S> <C> <C>
October 31, 1994........................................ 1.000000
December 31, 1994....................................... 0.996791 -0.3%
December 31, 1995....................................... 1.227281 23.1%
December 31, 1996....................................... 1.415482 15.3%
December 31, 1997....................................... 1.622453 14.6%
December 31, 1998....................................... 1.746518 7.6%
December 31, 1999....................................... 1.635868 -6.3%
</TABLE>

PERCENT CHANGE IN UNIT VALUE AND ANNUAL EFFECTIVE RATE OF RETURN*

<TABLE>
<CAPTION>
% CHANGE ANNUAL
IN UNIT EFFECTIVE
VALUE RATE
-------- ---------
<S> <C> <C>
5 years, 2 months ended December 31, 1999.................... 63.6% 10.0%
5 years ended December 31, 1999.............................. 64.1% 10.4%
1 year ended December 31, 1999............................... -6.3% -6.3%
</TABLE>

ALGER EQUITY GROWTH SUB-ACCOUNT

ANNUAL PERCENT CHANGE IN UNIT VALUE*

<TABLE>
<CAPTION>
ACCUMULATION %
DATE UNIT VALUE CHANGE
---- ------------ ------
<S> <C> <C>
October 31, 1994........................................... 1.000000
December 31, 1994.......................................... 0.955891 -4.4%
December 31, 1995.......................................... 1.402375 46.7%
December 31, 1996.......................................... 1.565675 11.6%
December 31, 1997.......................................... 1.940577 23.9%
December 31, 1998.......................................... 2.829403 45.8%
December 31, 1999.......................................... 3.744249 32.3%
</TABLE>
- --------

* Unit values do not reflect the impact of any Contingent Deferred Sales
Charge, premium tax charge or the annual $30 Administration Contract Charge.

*** The Balanced Series' subadviser was Loomis Sayles & Company, L.P. until May
1, 2000 when Wellington Management Company, LLP became the subadviser.

II-16
<PAGE>

PERCENT CHANGE IN UNIT VALUE AND ANNUAL EFFECTIVE RATE OF RETURN*

<TABLE>
<CAPTION>
% CHANGE ANNUAL
IN UNIT EFFECTIVE
VALUE RATE
-------- ---------
<S> <C> <C>
5 years, 2 months ended December 31, 1999.................... 274.4% 29.1%
5 years ended December 31, 1999.............................. 291.7% 31.4%
1 year ended December 31, 1999............................... 32.3% 32.3%
</TABLE>

CAPITAL GROWTH SUB-ACCOUNT

ANNUAL PERCENT CHANGE IN UNIT VALUE*

<TABLE>
<CAPTION>
ACCUMULATION %
DATE UNIT VALUE CHANGE
---- ------------ ------
<S> <C> <C>
August 26, 1983............................................ 1.000000
December 31, 1983.......................................... 1.086144 8.6%
December 31, 1984.......................................... 1.065136 -1.9%
December 31, 1985.......................................... 1.766488 65.8%
December 31, 1986.......................................... 3.402150 92.6%
December 31, 1987.......................................... 5.125504 50.7%
December 31, 1988.......................................... 4.612285 -10.0%
December 31, 1989.......................................... 5.950283 29.0%
December 31, 1990.......................................... 5.665855 -4.8%
December 31, 1991.......................................... 8.607664 51.9%
December 31, 1992.......................................... 7.978068 -7.3%
December 31, 1993.......................................... 9.049554 13.4%
December 31, 1994.......................................... 8.297578 -8.3%
December 31, 1995.......................................... 11.300017 36.2%
December 31, 1996.......................................... 13.496435 19.4%
December 31, 1997.......................................... 16.441932 21.8%
December 31, 1998.......................................... 21.752481 32.3%
December 31, 1999.......................................... 24.830578 14.2%
</TABLE>

PERCENT CHANGE IN UNIT VALUE AND ANNUAL EFFECTIVE RATE OF RETURN*

<TABLE>
<CAPTION>
% CHANGE ANNUAL
IN UNIT EFFECTIVE
VALUE RATE
-------- ---------
<S> <C> <C>
16 years, 4 months ended December 31, 1999................... 2,383.1% 21.7%
10 years ended December 31, 1999............................. 317.3% 15.4%
5 years ended December 31, 1999.............................. 199.3% 24.5%
1 year ended December 31, 1999............................... 14.2% 14.2%
</TABLE>

DAVIS VENTURE VALUE SUB-ACCOUNT

ANNUAL PERCENT CHANGE IN UNIT VALUE*

<TABLE>
<CAPTION>
ACCUMULATION %
DATE UNIT VALUE CHANGE
---- ------------ ------
<S> <C> <C>
October 31, 1994........................................... 1.000000
December 31, 1994.......................................... 0.962860 -3.7%
December 31, 1995.......................................... 1.323183 37.4%
December 31, 1996.......................................... 1.642613 24.1%
December 31, 1997.......................................... 2.163463 31.7%
December 31, 1998.......................................... 2.442138 12.9%
December 31, 1999.......................................... 2.831476 15.9%
</TABLE>
- --------

* Unit values do not reflect the impact of any Contingent Deferred Sales
Charge, premium tax charge or the annual $30 Administration Contract Charge.

II-17
<PAGE>

PERCENT CHANGE IN UNIT VALUE AND ANNUAL EFFECTIVE RATE OF RETURN*

<TABLE>
<CAPTION>
% CHANGE ANNUAL
IN UNIT EFFECTIVE
VALUE RATE
-------- ---------
<S> <C> <C>
5 years, 2 months ended December 31, 1999.................... 183.1% 22.3%
5 years ended December 31, 1999.............................. 194.1% 24.1%
1 year ended December 31, 1999............................... 15.9% 15.9%
</TABLE>

HARRIS OAKMARK MID CAP VALUE SUB-ACCOUNT**

ANNUAL PERCENT CHANGE IN UNIT VALUE*

<TABLE>
<CAPTION>
ACCUMULATION %
DATE UNIT VALUE CHANGE
---- ------------ ------
<S> <C> <C>
April 30, 1993............................................. 1.000000
December 31, 1993.......................................... 1.137039 13.7%
December 31, 1994.......................................... 1.118794 -1.6%
December 31, 1995.......................................... 1.438865 28.6%
December 31, 1996.......................................... 1.669358 16.0%
December 31, 1997.......................................... 1.932280 15.7%
December 31, 1998.......................................... 1.802285 -6.7%
December 31, 1999.......................................... 1.784358 -1.0%
</TABLE>

PERCENT CHANGE IN UNIT VALUE AND ANNUAL EFFECTIVE RATE OF RETURN*

<TABLE>
<CAPTION>
% CHANGE ANNUAL
IN UNIT EFFECTIVE
VALUE RATE
-------- ---------
<S> <C> <C>
6 years, 8 months ended December 31, 1999.................... 78.4% 9.1%
5 years ended December 31, 1999.............................. 59.5% 9.8%
1 year ended December 31, 1999............................... -1.0% -1.0%
</TABLE>

LOOMIS SAYLES SMALL CAP SUB-ACCOUNT

ANNUAL PERCENT CHANGE IN UNIT VALUE*

<TABLE>
<CAPTION>
ACCUMULATION %
DATE UNIT VALUE CHANGE
---- ------------ ------
<S> <C> <C>
May 1, 1994................................................ 1.000000
December 31, 1994.......................................... 0.959097 -4.1%
December 31, 1995.......................................... 1.219226 27.1%
December 31, 1996.......................................... 1.571807 28.9%
December 31, 1997.......................................... 1.936137 23.2%
December 31, 1998.......................................... 1.877786 -3.0%
December 31, 1999.......................................... 2.440858 30.0%
</TABLE>

PERCENT CHANGE IN UNIT VALUE AND ANNUAL EFFECTIVE RATE OF RETURN*

<TABLE>
<CAPTION>
% CHANGE ANNUAL
IN UNIT EFFECTIVE
VALUE RATE
-------- ---------
<S> <C> <C>
5 years, 8 months ended December 31, 1999.................... 144.1% 17.1%
5 years ended December 31, 1999.............................. 154.5% 20.5%
1 year ended December 31, 1999............................... 30.0% 30.0%
</TABLE>
- --------

* Unit values do not reflect the impact of any Contingent Deferred Sales
Charge, premium tax charge or the annual $30 Administration Contract
Charge.

** Harris Associates L.P. became the subadviser on May 1, 2000. Prior to that
time, other entities served as subadviser.

II-18
<PAGE>

WESTPEAK GROWTH AND INCOME SUB-ACCOUNT

ANNUAL PERCENT CHANGE IN UNIT VALUE*

<TABLE>
<CAPTION>
ACCUMULATION %
DATE UNIT VALUE CHANGE
---- ------------ ------
<S> <C> <C>
April 30, 1993............................................. 1.000000
December 31, 1993.......................................... 1.132111 13.2%
December 31, 1994.......................................... 1.103489 -2.5%
December 31, 1995.......................................... 1.485762 34.6%
December 31, 1996.......................................... 1.730922 16.5%
December 31, 1997.......................................... 2.279329 31.7%
December 31, 1998.......................................... 2.798615 22.8%
December 31, 1999.......................................... 3.019311 7.9%
</TABLE>

PERCENT CHANGE IN UNIT VALUE AND ANNUAL EFFECTIVE RATE OF RETURN*

<TABLE>
<CAPTION>
% CHANGE ANNUAL
IN UNIT EFFECTIVE
VALUE RATE
-------- ---------
<S> <C> <C>
6 years, 8 months ended December 31, 1999.................... 201.9% 18.0%
5 years ended December 31, 1999.............................. 173.6% 22.3%
1 year ended December 31, 1999............................... 7.9% 7.9%
</TABLE>

WESTPEAK STOCK INDEX SUB-ACCOUNT**

ANNUAL PERCENT CHANGE IN UNIT VALUE*

<TABLE>
<CAPTION>
ACCUMULATION %
DATE UNIT VALUE CHANGE
---- ------------ ---------
<S> <C> <C>
May 1, 1987............................................. 1.000000
December 31, 1987....................................... .865890 -13.4%
December 31, 1988....................................... .993885 14.8%
December 31, 1989....................................... 1.276255 28.4%
December 31, 1990....................................... 1.206894 -5.4%
December 31, 1991....................................... 1.553102 28.7%
December 31, 1992....................................... 1.644023 5.9%
December 31, 1993....................................... 1.779677 8.3%
December 31, 1994....................................... 1.775473 -0.2%
December 31, 1995....................................... 2.398452 35.1%
December 31, 1996....................................... 2.897629 20.8%
December 31, 1997....................................... 3.787806 30.3%
December 31, 1998....................................... 4.781003 26.2%
December 31, 1999....................................... 5.678233 18.8%

PERCENT CHANGE IN UNIT VALUE AND ANNUAL EFFECTIVE RATE OF RETURN*

<CAPTION>
% CHANGE ANNUAL
IN UNIT EFFECTIVE
VALUE RATE
------------ ---------
<S> <C> <C>
12 years, 8 months ended December 31, 1999.............. 467.8% 14.7%
10 years ended December 31, 1999........................ 344.9% 16.1%
5 years ended December 31, 1999......................... 219.8% 26.2%
1 year ended December 31, 1999.......................... 18.8% 18.8%
</TABLE>
- --------

* Unit values do not reflect the impact of any Contingent Deferred Sales
Charge, premium tax charge or the annual $30 Administration Contract Charge.

** These sub-accounts are only available through Contracts purchased prior to
May 1, 1995.

II-19
<PAGE>

MORGAN STANLEY INTERNATIONAL MAGNUM EQUITY SUB-ACCOUNT

ANNUAL PERCENT CHANGE IN UNIT VALUE*

<TABLE>
<CAPTION>
ACCUMULATION %
DATE UNIT VALUE CHANGE
---- ------------ ------
<S> <C> <C>
October 31, 1994........................................... 1.000000
December 31, 1994.......................................... 1.023745 2.4%
December 31, 1995.......................................... 1.073005 4.8%
December 31, 1996.......................................... 1.129151 5.2%
December 31, 1997.......................................... 1.099535 -2.6%
December 31, 1998.......................................... 1.163698 5.8%
December 31, 1999.......................................... 1.430688 22.9%
</TABLE>

PERCENT CHANGE IN UNIT VALUE AND ANNUAL EFFECTIVE RATE OF RETURN*

<TABLE>
<CAPTION>
% CHANGE ANNUAL
IN UNIT EFFECTIVE
VALUE RATE
-------- ---------
<S> <C> <C>
5 years, 2 months ended December 31, 1999.................... 43.1% 7.2%
5 years ended December 31, 1999.............................. 39.8% 6.9%
1 year ended December 31, 1999............................... 22.9% 22.9%
</TABLE>

VIP OVERSEAS SUB-ACCOUNT

ANNUAL PERCENT CHANGE IN UNIT VALUE*

<TABLE>
<CAPTION>
ACCUMULATION %
DATE UNIT VALUE CHANGE
---- ------------ ------
<S> <C> <C>
January 28, 1987........................................... 1.000000
December 31, 1987.......................................... 0.934480 -6.6%
December 31, 1988.......................................... 0.996890 6.7%
December 31, 1989.......................................... 1.242056 24.6%
December 31, 1990.......................................... 1.204901 -3.0%
December 31, 1991.......................................... 1.283814 6.5%
December 31, 1992.......................................... 1.130753 -11.9%
December 31, 1993.......................................... 1.532303 35.5%
December 31, 1994.......................................... 1.537887 0.4%
December 31, 1995.......................................... 1.664159 8.2%
December 31, 1996.......................................... 1.858653 11.7%
December 31, 1997.......................................... 2.045625 10.1%
December 31, 1998.......................................... 2.275536 11.2%
December 31, 1999.......................................... 3.202059 40.7%
</TABLE>

PERCENT CHANGE IN UNIT VALUE AND ANNUAL EFFECTIVE RATE OF RETURN*

<TABLE>
<CAPTION>
% CHANGE ANNUAL
IN UNIT EFFECTIVE
VALUE RATE
-------- ---------
<S> <C> <C>
12 years, 11 months ended December 31, 1999.................. 220.2% 9.4%
10 years ended December 31, 1999............................. 157.8% 9.9%
5 years ended December 31, 1999.............................. 108.2% 15.8%
1 year ended December 31, 1999............................... 40.7% 40.7%
</TABLE>
- --------

* Unit values do not reflect the impact of any Contingent Deferred Sales
Charge, premium tax charge or the annual $30 Administration Contract Charge.

II-20
<PAGE>

VIP EQUITY-INCOME SUB-ACCOUNT

ANNUAL PERCENT CHANGE IN UNIT VALUE*

<TABLE>
<CAPTION>
ACCUMULATION %
DATE UNIT VALUE CHANGE
---- ------------ ------
<S> <C> <C>
October 9, 1986............................................ 1.000000
December 31, 1986.......................................... 0.998929 -0.1%
December 31, 1987.......................................... 0.974348 -2.5%
December 31, 1988.......................................... 1.179618 21.1%
December 31, 1989.......................................... 1.365709 15.8%
December 31, 1990.......................................... 1.141297 -16.4%
December 31, 1991.......................................... 1.480005 29.7%
December 31, 1992.......................................... 1.706687 15.3%
December 31, 1993.......................................... 1.991856 16.7%
December 31, 1994.......................................... 2.104085 5.6%
December 31, 1995.......................................... 2.804492 33.3%
December 31, 1996.......................................... 3.161755 12.7%
December 31, 1997.......................................... 3.996188 26.4%
December 31, 1998.......................................... 4.401039 10.1%
December 31, 1999.......................................... 4.616870 4.9%
</TABLE>

PERCENT CHANGE IN UNIT VALUE AND ANNUAL EFFECTIVE RATE OF RETURN*

<TABLE>
<CAPTION>
% CHANGE ANNUAL
IN UNIT EFFECTIVE
VALUE RATE
-------- ---------
<S> <C> <C>
13 years, 2 months ended December 31, 1999................... 361.7% 12.3%
10 years ended December 31, 1999............................. 238.1% 13.0%
5 years ended December 31, 1999.............................. 119.4% 17.0%
1 year ended December 31, 1999............................... 4.9% 4.9%
</TABLE>

PUTNAM INTERNATIONAL STOCK SUB-ACCOUNT

ANNUAL PERCENT CHANGE IN UNIT VALUE*

<TABLE>
<CAPTION>
ACCUMULATION %
DATE UNIT VALUE CHANGE
---- ------------ ------
<S> <C> <C>
May 1, 1991................................................ 1.000000 -
December 31, 1991.......................................... .975647 -2.4%
December 31, 1992.......................................... .864253 -11.4%
December 31, 1993.......................................... 1.259897 45.8%
December 31, 1994.......................................... 1.298281 3.0%
December 31, 1995.......................................... 1.304065 0.4%
December 31, 1996.......................................... 1.258598 -3.5%
December 31, 1997.......................................... 1.212622 -3.7%
December 31, 1998.......................................... 1.466246 20.9%
December 31, 1999.......................................... 1.684493 14.9%
</TABLE>

PERCENT CHANGE IN UNIT VALUE AND ANNUAL EFFECTIVE RATE OF RETURN*

<TABLE>
<CAPTION>
% CHANGE ANNUAL
IN UNIT EFFECTIVE
VALUE RATE
-------- ---------
<S> <C> <C>
8 years, 8 months ended December 31, 1999.................... 68.4% 6.2%
5 years ended December 31, 1999.............................. 29.7% 5.3%
1 year ended December 31, 1999............................... 14.9% 14.9%
</TABLE>
- --------

* Unit values do not reflect the impact of any Contingent Deferred Sales
Charge, premium tax charge or the annual $30 Administration Contract Charge.

II-21
<PAGE>

NET INVESTMENT FACTOR

The net investment factor ("Net Investment Factor") for each sub-account is
determined on each day on which the New York Stock Exchange is open for
trading as follows:

(1) The net asset value per share of the Eligible Fund held in the sub-
account determined as of the close of regular trading on the New York Stock
Exchange on a particular day;

(2) Plus the per share amount of any dividend or capital gains
distribution made by the Eligible Fund since the close of regular trading
on the New York Stock Exchange on the preceding trading day;

(3) Is divided by the net asset value per share of the Eligible Fund as
of the close of regular trading on the New York Stock Exchange on the
preceding trading day; and

(4) Finally, the daily charges for the Administration Asset Charge and
Mortality and Expense Risk Charge that have accumulated since the close of
regular trading on the New York Stock Exchange on the preceding trading day
are subtracted. (See "Administration Charges, Contingent Deferred Sales
Charge and Other Deductions" in the prospectus.) On an annual basis, the
total deduction for such charges equals 1.35% of the daily net asset value
of the Variable Account.

ANNUITY PAYMENTS

At annuitization, the Contract Value is applied toward the purchase of
monthly variable annuity payments. The amount of these payments will be
determined on the basis of (i) annuity purchase rates not lower than the rates
set forth in the Life Income Tables contained in the Contract that reflect the
age of the Payee at annuitization, (ii) the assumed interest rate selected,
(iii) the type of payment option selected, and (iv) the investment performance
of the Eligible Fund selected.

When a variable payment option is selected, the Contract proceeds will be
applied at annuity purchase rates, which vary depending on the particular
option selected and the age of the Payee, to calculate the basic payment level
purchased by the Contract Value. With respect to Contracts issued in New York
or Oregon for use in situations not involving an employer-sponsored plan,
annuity purchase rates used to calculate the basic payment level will also
reflect the sex of the Payee when the payment option involves a life
contingency. The impact of the choice of option and the sex and age of the
Payee on the level of annuity payments is described in the prospectus under
"Amount of Variable Annuity Payments."

The amount of the basic payment level is determined by applying the
applicable annuity purchase rate to the amount applied from each sub-account
to provide the annuity. This basic payment level is converted into annuity
units, the number of which remains constant. Each monthly annuity payment is
in an amount equal to that number of annuity units multiplied by the
applicable annuity unit value for that payment (described below). The
applicable annuity unit value for each sub-account will change from day to day
depending upon the investment performance of the sub-account, which in turn
depends upon the investment performance of the Eligible Fund in which the sub-
account invests.

The selection of an assumed interest rate ("Assumed Interest Rate") will
affect both the basic payment level and the amount by which subsequent
payments increase or decrease. The basic payment level is calculated on the
assumption that the Net Investment Factors applicable to the Contract will be
equivalent on an annual basis to a net investment return at the Assumed
Interest Rate. If this assumption is met following the date any payment is
determined, then the amount of the next payment will be exactly equal to the
amount of the preceding payment. If the actual Net Investment Factors are
equivalent to a net investment return greater than the Assumed Interest Rate,
the next payment will be larger than the preceding one; if the actual Net
Investment Factors are equivalent to a net investment return smaller than the
Assumed Interest Rate, then

II-22
<PAGE>

the next payment will be smaller than the preceding payment. The definition of
the Assumed Interest Rate, and the effect of the level of the Assumed Interest
Rate on the amount of monthly payments is explained in the prospectus under
"Amount of Variable Annuity Payments."

The number of annuity units credited under a variable payment option is
determined as follows:

(1) The proceeds under a deferred Contract, or the net purchase payment
under an immediate Contract (at such time as immediate Contracts may be
made available), are applied at the Company's annuity purchase rates for
the selected Assumed Interest Rate to determine the basic payment level.
(The amount of Contract Value or Death Proceeds applied will be reduced by
any applicable Contingent Deferred Sales Charge, Administration Contract
Charge and the amount of any outstanding loan plus accrued interest.)

(2) The number of annuity units is determined by dividing the amount of
the basic payment level by the applicable annuity unit value(s) next
determined following the date of application of proceeds (in the case of a
deferred Contract) or net purchase payment (in the case of an immediate
Contract.)

The dollar amount of the initial payment will be at the basic payment level.
The dollar amount of each subsequent payment is determined by multiplying the
number of annuity units by the applicable annuity unit value which is
determined at least 14 days before the payment is due.

The value of an annuity unit for each sub-account depends on the Assumed
Interest Rate and on the Net Investment Factors applicable at the time of
valuation. The initial annuity unit values were set at $1.00 effective on or
about the date on which shares of the corresponding Eligible Funds were first
publicly available. The Net Investment Factor and, therefore, changes in the
value of an annuity unit under a variable payment option, reflect the
deduction of the Mortality and Expense Risk Charge and Administration Asset
Charge. (See "Net Investment Factor" above.)

The annuity unit value for each sub-account is equal to the corresponding
annuity unit value for the sub-account previously determined multiplied by the
applicable Net Investment Factor for that sub-account for the New York Stock
Exchange trading day then ended, and further multiplied by the assumed
interest factor ("Assumed Interest Factor") for each day of the valuation
period. The Assumed Interest Factor represents the daily equivalent of the
Contract's annual Assumed Interest Rate. In the calculation of annuity unit
values, the Assumed Interest Factor has the effect of reducing the Net
Investment Factor by an amount equal to the daily equivalent of the Contract's
Assumed Interest Rate. The result of this adjustment is that if the Net
Investment Factor for a valuation period is greater (when expressed as an
annual net investment return) than the Assumed Interest Rate, the annuity unit
value will increase. If the Net Investment Factor for the period is less (when
expressed as an annual net investment return) than the Assumed Interest Rate,
the annuity unit value will decrease. At an Assumed Interest Rate of 3.5%, the
Assumed Interest Factor is .9999058. Assumed Interest Factors for other
Assumed Interest Rates are computed on a consistent basis.

An illustration of annuity income payments under various hypothetical and
historical rates appear below. The monthly equivalents of the hypothetical
annual net returns of (2.09)%, 3.50%, 3.79%, 5.75% and 7.71% shown in the
tables at pages II-25 and II-26 are (.17)%, .29%, .31%, .47% and .62%.

II-23
<PAGE>

HYPOTHETICAL ILLUSTRATIONS OF ANNUITY INCOME PAYOUTS

The following tables have been prepared to show how variable annuity income
payments under the Contract change with investment performance over an
extended period of time. The tables illustrate how monthly annuity income
payments would vary over time if the return on assets in the selected
portfolios were a uniform gross annual rate of 0%, 5.70%, 6%, 8% or 10%. The
values would be different from those shown if the returns averaged 0%, 5.70%,
6%, 8% or 10%, but fluctuated over and under those averages throughout the
years.

The tables reflect the daily charge to the sub-accounts for assuming
mortality and expense risks, which is equivalent to an annual charge of .95%
and the daily administrative charge which is equivalent to an annual charge of
0.40%. The amounts shown in the tables also take into account the Eligible
Funds' management fees and operating expenses which are assumed to be at an
annual rate of .76% of the average daily net assets of the Eligible Funds
(based on an average of all the Eligible Funds). Actual fees and expenses of
the Eligible Funds associated with your Contract may be more or less than
.76%, will vary from year to year, and will depend on how you allocate your
Contract Value. See the section in your current prospectus entitled "Expense
Table" for more complete details. The monthly annuity income payments
illustrated are on a pre-tax basis. The federal income tax treatment of
annuity income considerations is generally described in the section of your
current prospectus entitled "Federal Income Tax Status."

The tables show both the gross rate and the net rate. The difference between
gross and net rates represents the 1.35% for mortality and expense risk and
administrative charges and the assumed 0.76% for investment management and
operating expenses. Since these charges are deducted daily from assets, the
difference between the gross and net rate is not exactly 2.11%.

Two tables follow. The first table assumes that 100% of the Contract Value
is allocated to a variable annuity income option, the second assumes that 50%
of the Contract Value is placed under a fixed annuity income option, using the
fixed crediting rate the Company offered on the fixed annuity income option at
the date of the illustration. Both illustrations assume that the final value
of the accumulation account is $100,000 and is applied at age 65 to purchase a
life annuity for a guaranteed period of 10 years certain and life thereafter.

When part of the Contract Value has been allocated to the fixed annuity
income option, the guaranteed minimum annuity income payment resulting from
this allocation is also shown. The illustrated variable annuity income
payments are determined through the use of standard mortality tables and an
assumed interest rate of 3.5% per year. Thus, actual performance greater than
3.5% per year will result in increasing annuity income payments and actual
performance less than 3.5% per year will result in decreasing annuity income
payments. The Company offers alternative Assumed Interest Rates from which you
may select. Fixed annuity income payments remain constant. Initial monthly
annuity income payments under a fixed annuity income payout are generally
higher than initial payments under a variable income payout option.

These tables show the monthly income payments for several hypothetical
constant assumed interest rates. Of course, actual investment performance will
not be constant and may be volatile. Actual monthly income amounts would
differ from those shown if the actual rate of return averaged the rate shown
over a period of years, but also fluctuated above or below those averages for
individual contract years. Upon request, and when you are considering an
annuity income option, the Company will furnish a comparable illustration
based on your individual circumstances.

II-24
<PAGE>

ANNUITY PAY-OUT ILLUSTRATION
(100% VARIABLE PAYOUT)

<TABLE>
<C> <C> <S> <C>
ANNUITANT: John Doe GROSS AMOUNT OF CONTRACT
SEX: Unisex VALUE: $100,000
ANNUITY OPTION SELECTED: Life Income DATE OF ILLUSTRATION: 1/1/00
with 10 Years
Certain*
FREQUENCY OF INCOME PAYMENTS: Monthly
</TABLE>

FIXED MONTHLY ANNUITY INCOME PAYMENT BASED ON CURRENT RATES, IF 100% FIXED
ANNUITY OPTION SELECTED FOR AGE 65: $678.61

ILLUSTRATIVE AMOUNTS BELOW ASSUME THAT 100% OF THE CONTRACT VALUE IS ALLOCATED
TO VARIABLE PAYOUT.

ASSUMED INTEREST RATE AT WHICH MONTHLY VARIABLE PAYMENTS REMAIN CONSTANT: 3.5%

VARIABLE MONTHLY ANNUITY INCOME PAYMENT ON THE DATE OF THE
ILLUSTRATION: $581.00

MONTHLY INCOME PAYMENTS WILL VARY WITH INVESTMENT PERFORMANCE. NO MINIMUM
DOLLAR AMOUNT IS GUARANTEED.

<TABLE>
<CAPTION>
AMOUNT OF FIRST MONTHLY PAYMENT IN YEAR SHOWN
WITH AN ASSUMED RATE OF RETURN OF:
----------------------------------------------
GROSS 0% 5.70% 6% 8% 10%
PAYMENT CALENDAR ----- ----------------- -------- -------- ----------
YEAR YEAR AGE NET** -2.09% 3.50% 3.79% 5.75% 7.71%
- ------- -------- --- ----- ----------------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 2000 65 $581.00 $ 581.00 $581.00 $581.00 $ 581.00
2 2001 66 549.64 581.00 582.63 593.62 604.61
3 2002 67 519.98 581.00 584.26 606.51 629.18
4 2003 68 491.92 581.00 585.89 619.69 654.76
5 2004 69 465.37 581.00 587.53 633.14 681.37
10 2009 74 352.64 581.00 595.79 704.95 831.54
15 2014 79 267.21 581.00 604.17 784.91 1,014.82
20 2019 84 202.48 581.00 612.67 873.93 1,238.50
</TABLE>

IT IS EMPHASIZED THAT THE ASSUMED RATES OF RETURN SHOWN ABOVE ARE ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE PERFORMANCE.
ACTUAL PERFORMANCE RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL
DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE BY
THE CONTRACT OWNER AND THE VARIOUS RATES OF RETURN OF THE PORTFOLIOS SELECTED.
THE AMOUNT OF THE INCOME PAYMENT WOULD BE DIFFERENT FROM THAT SHOWN IF THE
ACTUAL PERFORMANCE AVERAGED THE ASSUMED RATES OF RETURN SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR
INDIVIDUAL CONTRACT YEARS. SINCE IT IS HIGHLY LIKELY THAT PERFORMANCE WILL
FLUCTUATE FROM MONTH TO MONTH, MONTHLY INCOME (BASED ON THE VARIABLE ACCOUNT)
WILL ALSO FLUCTUATE. NO REPRESENTATION CAN BE MADE BY THE COMPANY OR THE FUNDS
THAT THIS HYPOTHETICAL PERFORMANCE CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
- --------
* Income payments are made during the Annuitant's lifetime. If the Annuitant
dies before payments have been made for the 10 Year Certain Period, payments
will be continued for the balance of the Certain Period. The cumulative
amount of income payments received under the annuity depends on how long the
Annuitant lives after the Certain Period. An annuity pools the mortality
experience of Annuitants. Annuitants who die earlier, in effect, subsidize
the payments for those who live longer.
** The illustrated Net Assumed Rates of Return reflect the deduction of
average fund expenses and the 1.35% Mortality and Expense Risk and
Administration Asset Charges from the Gross Rates of Return.

II-25
<PAGE>

ANNUITY PAY-OUT ILLUSTRATION
(50% VARIABLE--50% FIXED PAYOUT)

<TABLE>
<C> <C> <S> <C>
ANNUITANT: John Doe GROSS AMOUNT OF CONTRACT
SEX: Unisex VALUE: $100,000
ANNUITY OPTION SELECTED: Life Income DATE OF ILLUSTRATION: 1/1/00
with 10
Years Certain*
FREQUENCY OF INCOME PAYMENTS: Monthly
</TABLE>

FIXED MONTHLY ANNUITY INCOME PAYMENT FOR AGE 65 BASED ON CURRENT RATES, IF
100% FIXED ANNUITY OPTION SELECTED: $678.61

ILLUSTRATIVE AMOUNTS BELOW ASSUME THAT 50% OF THE CONTRACT VALUE IS ALLOCATED
TO VARIABLE PAYOUT AND 50% TO FIXED PAYOUT

ASSUMED INTEREST RATE AT WHICH MONTHLY VARIABLE PAYMENTS REMAIN CONSTANT: 3.5%

MONTHLY INCOME PAYMENTS WILL VARY WITH INVESTMENT PERFORMANCE, BUT WILL NEVER
BE LESS THAN: $339.31. THE MONTHLY GUARANTEED PAYMENT OF $339.31 IS BEING
PROVIDED BY THE $50,000 APPLIED UNDER THE FIXED ANNUITY OPTION.

<TABLE>
<CAPTION>
AMOUNT OF FIRST MONTHLY PAYMENT IN YEAR SHOWN
WITH AN ASSUMED RATE OF RETURN OF:
-------------------------------------------------
GROSS 0% 5.70% 6% 8% 10%
PAYMENT CALENDAR ----- --------- --------- --------- --------- ---------
YEAR YEAR AGE NET** -2.09% 3.50% 3.79% 5.75% 7.71%
- ------- -------- --- ----- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 2000 65 $629.81 $629.81 $629.81 $629.81 $629.81
2 2001 66 614.13 629.81 630.62 636.11 641.61
3 2002 67 599.30 629.81 631.43 642.56 653.90
4 2003 68 585.26 629.81 632.25 649.15 666.68
5 2004 69 571.99 629.81 633.07 655.88 679.99
10 2009 74 515.62 629.81 637.20 691.78 755.08
15 2014 79 472.91 629.81 641.39 731.76 846.72
20 2019 84 440.55 629.81 645.64 776.27 958.56
</TABLE>

IT IS EMPHASIZED THAT THE ASSUMED RATES OF RETURN SHOWN ABOVE ARE ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE PERFORMANCE.
ACTUAL PERFORMANCE RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL
DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE BY
THE CONTRACT OWNER AND THE VARIOUS RATES OF RETURN OF THE PORTFOLIOS SELECTED.
THE AMOUNT OF THE INCOME PAYMENT WOULD BE DIFFERENT FROM THAT SHOWN IF THE
ACTUAL PERFORMANCE AVERAGED THE ASSUMED RATES OF RETURN SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR
INDIVIDUAL CONTRACT YEARS. SINCE IT IS HIGHLY LIKELY THAT PERFORMANCE WILL
FLUCTUATE FROM MONTH TO MONTH, MONTHLY INCOME (BASED ON THE VARIABLE ACCOUNT)
WILL ALSO FLUCTUATE. NO REPRESENTATION CAN BE MADE BY THE COMPANY OR THE FUNDS
THAT THIS HYPOTHETICAL PERFORMANCE CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
- --------
* Income payments are made during the Annuitant's lifetime. If the Annuitant
dies before payments have been made for the 10 Year Certain Period, payments
will be continued for the balance of the Certain Period. The cumulative
amount of income payments received under the annuity depends on how long the
Annuitant lives after the Certain Period. An annuity pools the mortality
experience of Annuitants. Annuitants who die earlier, in effect, subsidize
the payments for those who live longer.
** The illustrated Net Assumed Rates of Return apply only to the variable
portion of the monthly payment and reflect the deduction of average fund
expenses and the 1.35% Mortality and Expense Risk and Administration Asset
Charges from the Gross Rate of Return.

II-26
<PAGE>

HISTORICAL ILLUSTRATIONS OF ANNUITY INCOME PAYOUTS

The following tables have been prepared to show how variable annuity income
payments under the Contract change with investment performance over an
extended period of time. In comparison with hypothetical illustrations based
on a uniform annual rate of return, the table uses historical annual returns
to illustrate that monthly annuity income payments vary over time based on
fluctuations in annual returns.

The tables reflect the daily charge to the sub-accounts for assuming
mortality and expense risks, which is equivalent to an annual charge of .95%
and the daily administrative charge which is equivalent to an annual charge of
.40%. The amounts shown in the tables also take into account the actual
Eligible Funds' management fees and operating expenses. Actual fees and
expenses of the Eligible Funds associated with your Contract may be more or
less than the historical fees, will vary from year to year, and will depend on
how you allocate your Contract Value. See the section in your current
prospectus entitled "Expense Table" for more complete details. The monthly
annuity income payments illustrated are on a pre-tax basis. The federal income
tax treatment of annuity income considerations is generally described in the
section of your current prospectus entitled "Federal Income Tax Status."

The following tables assume that 100% of the Contract Value is allocated to
a variable annuity income option, that the final value of the accumulation
account is $100,000 and is applied at age 65 to purchase a life annuity for a
guaranteed period of 10 years certain and life thereafter. The table assumes
that the Annuitant was age 65 in 1983, the year of inception for the Capital
Growth, Back Bay Advisors Bond Income and Back Bay Advisors Money Market
Series, and that the Annuitant's age had increased by the time the other
Eligible Funds became available. The historical variable annuity income
payments are based on an assumed interest rate of 3.5% per year. Thus, actual
performance greater than 3.5% per year resulted in an increased annuity income
payment and actual performance less than 3.5% per year resulted in a decreased
annuity income payment. The Company offers alternative Assumed Interest Rates
(AIR) from which you may select: 0% and 5%. An AIR of 0% will result in a
lower initial payment than a 3.5% or 5% AIR. Similarly, an AIR of 5% will
result in a higher initial payment than a 0% or 3.5% AIR. The illustrations
are based on the current annuity purchase rates used by the Company. The rates
may differ at the time you annuitize.

The table illustrates the amount of the first monthly payment for each year
shown. During each year, the monthly payments would vary to reflect
fluctuations in the actual rate of return on the Eligible Funds. Upon request,
and when you are considering an annuity income option, the Company will
furnish a comparable illustration based on your individual circumstances.

II-27
<PAGE>

ANNUITY PAY-OUT HISTORICAL ILLUSTRATION
(100% VARIABLE PAYOUT)
<TABLE>
<C> <C> <S> <C>
ANNUITANT: John Doe GROSS AMOUNT OF CONTRACT
SEX: Unisex VALUE: $100,000
DATE OF ILLUSTRATION: 1/1/00
ANNUITY OPTION SELECTED: Life Income with 10 Years Certain*
FREQUENCY OF INCOME PAYMENTS: Monthly
</TABLE>

FIXED MONTHLY ANNUITY INCOME PAYMENT BASED ON CURRENT RATES, IF 100% FIXED
ANNUITY OPTION SELECTED: FOR AGE 65: $678.61; FOR AGE 69: $727.77; FOR AGE 75:
$817.97; AND FOR AGE 76: $834.43.

ILLUSTRATIVE AMOUNTS BELOW ASSUME THAT 100% OF THE CONTRACT VALUE IS ALLOCATED
TO VARIABLE PAYOUT.

ASSUMED INTEREST RATE AT WHICH MONTHLY VARIABLE PAYMENTS REMAIN
CONSTANT: 3.50%

MONTHLY INCOME PAYMENTS WILL VARY WITH INVESTMENT PERFORMANCE. NO MINIMUM
DOLLAR AMOUNT IS GUARANTEED.

AMOUNT OF FIRST MONTHLY PAYMENT IN YEAR SHOWN WITH
100% OF THE CONTRACT VALUE INVESTED IN:

<TABLE>
<CAPTION>
SALOMON
BACK BAY BACK BAY STRATEGIC SALOMON ALGER
PAYMENT CALENDAR MONEY BOND BOND U.S. BACK BAY EQUITY CAPITAL
YEAR YEAR AGE MARKET INCOME OPPORTUNITIES GOVERNMENT MANAGED BALANCED GROWTH GROWTH
- ------- -------- --- -------- --------- ------------- ---------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1983 65 $581.00 $ 581.00 $ 581.00
2 1984 66 589.21 593.85 601.36
3 1985 67 621.82 637.34 569.73
4 1986 68 641.71 721.50 912.93
5 1987 69 653.31 789.77 $ 642.00 1,698.78
6 1988 70 663.40 769.90 617.60 2,472.75
7 1989 71 679.85 795.21 644.48 2,149.71
8 1990 72 708.06 851.26 731.61 2,679.54
9 1991 73 730.20 877.02 719.75 2,465.18
10 1992 74 739.29 986.14 824.49 3,618.49
11 1993 75 731.38 1,016.77 838.49 3,240.10
12 1994 76 717.90 1,091.45 $765.00 $765.00 884.40 $ 765.00 $ 765.00 3,550.97
13 1995 77 711.52 1,005.44 748.36 763.51 833.68 758.20 737.42 3,145.80
14 1996 78 716.92 1,161.63 851.64 837.15 1,043.17 901.95 1,045.27 4,139.22
15 1997 79 718.30 1,158.11 928.18 824.28 1,143.60 1,004.99 1,127.42 4,776.14
16 1998 80 721.25 1,224.15 982.75 852.27 1,379.69 1,112.99 1,350.12 5,621.74
17 1999 81 723.71 1,272.43 955.87 874.22 1,573.66 1,157.58 1,901.94 7,185.99
18 2000 82 724.12 1,207.26 924.32 834.77 1,649.61 1,047.58 2,431.79 7,925.45
</TABLE>
INVESTMENT PERFORMANCE RESULTS CONTAINED IN THIS REPORT REPRESENT PAST
PERFORMANCE AND ARE NOT INDICATIVE OF FUTURE RETURNS. THE PERFORMANCE RESULTS
OF A CONTRACT MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER
OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE BY THE CONTRACT OWNER
AND THE VARIOUS RATES OF RETURN OF THE PORTFOLIOS SELECTED. SINCE IT IS HIGHLY
LIKELY THAT PERFORMANCE WILL FLUCTUATE FROM MONTH TO MONTH, MONTHLY INCOME
(BASED ON THE VARIABLE ACCOUNT) WILL ALSO FLUCTUATE. NO REPRESENTATION CAN BE
MADE BY THE COMPANY OR THE FUNDS THAT THESE HISTORICAL RETURNS CAN BE ACHIEVED
FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.

THE PAYMENTS IN THIS ILLUSTRATION ARE NET OF ALL CHARGES: MORTALITY AND
EXPENSE RISK CHARGE AND ADMINISTRATION ASSET CHARGE (1.35%), MANAGEMENT FEES
AND OTHER EXPENSES (These may vary from year to year. The following expenses
are for the year ended December 31, 1999 after giving effect to current
expense caps or deferrals: 1.00% Loomis Sayles Small Cap, 1.30% Morgan Stanley
International Magnum, .80% Alger Equity Growth, .88% Harris Oakmark Mid Cap
Value, .81% Davis Venture Value, .74% Westpeak Growth and Income, .35%
Westpeak Stock Index, .77% Balanced, .58% Back Bay Managed, .81% Salomon
Strategic Bond Opportunities, .48% Back Bay Bond Income, .70% Salomon US
Government, .40% Back Bay Money Market. The following expenses are for the
year ended December 31, 1999 and are unaffected by expense caps or deferrals:
.91% Fidelity VIP Overseas, .66% Capital Growth, .57% VIP Fidelity Equity-
Income and 1.12% Putnam International Stock.)
- -------
* Income payments are made during the Annuitant's lifetime. If the Annuitant
dies before payments have been made for the 10 Year Certain Period,
payments will be continued for the balance of the Certain Period. The
cumulative amount of income payments received under the annuity depends on
how long the Annuitant lives after the Certain Period. An annuity pools the
mortality experience of Annuitants. Annuitants who die earlier, in effect,
subsidize the payments for those who live longer.

II-28
<PAGE>

ANNUITY PAY-OUT HISTORICAL ILLUSTRATION
(100% VARIABLE PAYOUT)

<TABLE>
<C> <C> <S> <C>
ANNUITANT: John Doe GROSS AMOUNT OF CONTRACT
SEX: Unisex VALUE: $100,000
DATE OF ILLUSTRATION: 1/1/00
ANNUITY OPTION SELECTED: Life Income with 10 Years Certain*
FREQUENCY OF INCOME PAYMENTS: Monthly
</TABLE>

FIXED MONTHLY ANNUITY INCOME PAYMENT BASED ON CURRENT RATES, IF 100% FIXED
ANNUITY OPTION SELECTED: FOR AGE 65: $678.61; FOR AGE 68: $714.61; FOR AGE
69: $727.77; FOR AGE 73: $786.00; FOR AGE 76: $834.43.

ILLUSTRATIVE AMOUNTS BELOW ASSUME THAT 100% OF THE CONTRACT VALUE IS ALLOCATED
TO VARIABLE PAYOUT.

ASSUMED INTEREST RATE AT WHICH MONTHLY VARIABLE PAYMENTS REMAIN
CONSTANT: 3.50%

MONTHLY INCOME PAYMENTS WILL VARY WITH INVESTMENT PERFORMANCE. NO MINIMUM
DOLLAR AMOUNT IS GUARANTEED.

AMOUNT OF FIRST MONTHLY PAYMENT IN YEAR SHOWN WITH
100% OF THE CONTRACT VALUE INVESTED IN:

<TABLE>
<CAPTION>
HARRIS WESTPEAK MORGAN
DAVIS OAKMARK LOOMIS GROWTH WESTPEAK STANLEY FIDELITY PUTNAM
PAYMENT CALENDAR VENTURE MID CAP SAYLES AND STOCK INTERNATIONAL FIDELITY VIP EQUITY- INTERNATIONAL
YEAR YEAR AGE VALUE VALUE SMALL CAP INCOME INDEX MAGNUM VIP OVERSEAS INCOME STOCK
- ------- -------- --- --------- --------- --------- --------- --------- ------------- ------------ ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1983 65
2 1984 66
3 1985 67
4 1986 68 $ 626.00
5 1987 69 $ 642.00 $ 642.00 615.48
6 1988 70 545.85 581.39 580.03
7 1989 71 605.30 599.19 678.42
8 1990 72 750.98 721.30 758.88
9 1991 73 686.15 676.06 612.74 $710.00
10 1992 74 853.12 695.98 767.71 676.90
11 1993 75 $ 747.00 $ 747.00 872.44 592.22 855.28 579.28
12 1994 76 $ 765.00 829.98 $ 765.00 826.38 912.49 $765.00 775.38 964.44 815.91
13 1995 77 732.39 789.05 733.73 778.25 879.55 778.70 751.89 984.32 816.93
14 1996 78 972.43 980.46 901.19 1,012.42 1,147.99 788.57 786.11 1,267.62 785.29
15 1997 79 1,166.26 1,098.95 1,122.40 1,139.48 1,339.89 801.70 848.22 1,380.64 735.08
16 1998 80 1,484.12 1,229.02 1,335.81 1,449.76 1,692.29 754.27 901.98 1,686.00 684.28
17 1999 81 1,618.63 1,107.57 1,251.74 1,719.86 2,063.79 771.29 969.42 1,794.02 799.42
18 2000 82 1,813.22 1,059.48 1,572.07 1,792.74 2,368.20 916.18 1,318.01 1,818.36 887.35
</TABLE>

INVESTMENT PERFORMANCE RESULTS CONTAINED IN THIS REPORT REPRESENT PAST
PERFORMANCE AND ARE NOT INDICATIVE OF FUTURE RETURNS. THE PERFORMANCE RESULTS
OF A CONTRACT MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER
OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS MADE BY THE CONTRACT OWNER
AND THE VARIOUS RATES OF RETURN OF THE PORTFOLIOS SELECTED. SINCE IT IS HIGHLY
LIKELY THAT PERFORMANCE WILL FLUCTUATE FROM MONTH TO MONTH, MONTHLY INCOME
(BASED ON THE VARIABLE ACCOUNT) WILL ALSO FLUCTUATE. NO REPRESENTATION CAN BE
MADE BY THE COMPANY OR THE FUNDS THAT THESE HISTORICAL RETURNS CAN BE ACHIEVED
FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.

THE PAYMENTS IN THIS ILLUSTRATION ARE NET OF ALL CHARGES: MORTALITY AND
EXPENSE RISK CHARGE AND ADMINISTRATION ASSET CHARGE (1.35%), MANAGEMENT FEES
AND OTHER EXPENSES (These may vary from year to year. The following expenses
are for the year ended December 31, 1999 after giving effect to current
expense caps or deferrals: 1.00% Loomis Sayles Small Cap, 1.30% Morgan Stanley
International Magnum, .80% Alger Equity Growth, .88% Harris Oakmark Mid Cap
Value, .81% Davis Venture Value, .74% Westpeak Growth and Income, .35%
Westpeak Stock Index, .77% Balanced, .58% Back Bay Managed, .81% Salomon
Strategic Bond Opportunities, .48% Back Bay Bond Income, .70% Salomon US
Government, .40% Back Bay Money Market. The following expenses are for the
year ended December 31, 1999 and are unaffected by expense caps or deferrals:
.91% Fidelity VIP Overseas, .66% Capital Growth, .57% Fidelity VIP Equity-
Income and 1.12% Putnam International Stock.)
- -------
* Income payments are made during the Annuitant's lifetime. If the Annuitant
dies before payments have been made for the 10 Year Certain Period,
payments will be continued for the balance of the Certain Period. The
cumulative amount of income payments received under the annuity depends on
how long the Annuitant lives after the Certain Period. An annuity pools the
mortality experience of Annuitants. Annuitants who die earlier, in effect,
subsidize the payments for those who live longer.

II-29
<PAGE>

EXPERTS

The financial statements of The New England Variable Account of Metropolitan
Life Insurance Company ("MetLife") and the consolidated financial statements
of MetLife included in this Statement of Additional Information, have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
reports appearing herein, and have been so included in reliance upon the
reports of such firm given upon their authority as experts in accounting and
auditing.

LEGAL MATTERS

Legal matters in connection with the Contracts described in this
registration statement have been passed on by Christopher P. Nicholas,
Associate General Counsel of the Company. Sutherland Asbill & Brennan LLP,
Washington, D.C., has provided advice on certain matters relating to the
Federal securities laws.

II-30
<PAGE>

APPENDIX A

ABC and affiliates Fortune Public Broadcasting
Atlanta Constitution Fox Newtwork and Service
Atlanta Journal affiliates Quinn, Jane Bryant
Austin American Fund Action (syndicated column)
Statesman Hartford Courant Registered
Baltimore Sun Houston Chronicle Representative
Barron's INC Research Magazine
Bond Buyer Indianapolis Star Resource
Boston Business Journal Institutional Investor Reuters
Boston Globe Investment Dealers Rukeyser's Business
Boston Herald Digest (syndicated column)
Broker World Investment Vision Sacramento Bee
Business Radio Network Investor's Daily San Francisco Chronicle
Business Week Journal of Commerce San Francisco Examiner
CBS and affiliates Kansas City Star San Jose Mercury
CFO LA Times Seattle Post-
Changing Times Leckey, Andrew Intelligencer
Chicago Sun Times (syndicated column) Seattle Times
Chicago Tribune Life Association News Smart Money
Christian Science Miami Herald St. Louis Post Dispatch
Monitor Milwaukee Sentinel St. Petersburg Times
Christian Science Money Standard & Poor's
Monitor News Service Money Maker Outlook
Cincinnati Enquirer Money Management Letter Standard & Poor's Stock
Cincinnati Post Morningstar Guide
CNBC National Public Radio Stanger's Investment
CNN National Underwriter Advisor
Columbus Dispatch NBC and affiliates Stockbroker's Register
Dallas Morning News New England Business Strategic Insight
Dallas Times-Herald New England Cable News Tampa Tribune
Denver Post New Orleans Times- Time
Des Moines Register Picayune Tobias, Andrew
Detroit Free Press New York Daily News (syndicated column)
Donoghues Money Fund New York Times UPI
Report Newark Star Ledger US News and World Report
Dorfman, Dan (syndicated Newsday USA Today
column) Newsweek Value Line
Dow Jones News Service Nightly Business Report Wall St. Journal
Economist Orange County Register Wall Street Letter
FACS of the Week Orlando Sentinel Wall Street Week
Financial News Network Pension World Washington Post
Financial Planning Pensions and Investments WBZ
Financial Services Week Personal Investor WBZ-TV
Financial World Philadelphia Inquirer WCVB-TV
Forbes Porter, Sylvia WEEI
Fort Worth Star-Telegram (syndicated column) WHDH
Portland Oregonian Worcester Telegram
Worth Magazine
WRKO

II-31
<PAGE>

REPORT OF INDEPENDENT AUDITORS

To the Contract Owners of The New England Variable Account
of Metropolitan Life Insurance Company:

We have audited the accompanying statement of assets and liabilities and the
related statement of operations of The New England Variable Account (comprised
of the following Sub-Accounts: Capital Growth, Bond Income, Money Market,
Stock Index, Managed, Midcap Value (formerly Avanti Growth), Growth and Income
(formerly Value Growth), Small Cap, U.S. Government, Balanced, Equity Growth,
International Magnum Equity (formerly International Equity), Venture Value,
Strategic Bond Opportunities, Equity-Income and Overseas) of Metropolitan Life
Insurance Company as of and for the year ended December 31, 1999, and the
related statements of changes in net assets for each of the two years in the
period then ended for all Sub-Accounts. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position and the results of operations of
the respective aforementioned Sub-Accounts comprising The New England Variable
Account of Metropolitan Life Insurance Company, as of and for the year ended
December 31, 1999, and the changes in net assets for each of the two years in
the period then ended, in conformity with accounting principles generally
accepted in the United States of America.

Deloitte & Touche LLP

Boston, Massachusetts
April 26, 2000

F-1
<PAGE>

THE NEW ENGLAND VARIABLE ACCOUNT
OF
METROPOLITAN LIFE INSURANCE COMPANY
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999

<TABLE>
<CAPTION>
SHARES COST MARKET VALUE
------------- ------------ --------------
<S> <C> <C> <C>
ASSETS
Investments in sub-accounts, at value
(Note 2)
NEW ENGLAND ZENITH FUND:
Capital Growth Series.............. 1,915,867.620 $764,589,117 $ 832,885,131
Back Bay Advisors Bond Income Se-
ries............................... 1,169,680.720 126,271,186 118,605,625
Back Bay Advisors Money Market Se-
ries............................... 799,627.840 79,962,784 79,962,784
Westpeak Stock Index Series........ 372,111.140 43,970,941 85,898,507
Back Bay Advisors Managed Series... 756,025.970 123,679,221 148,793,471
Goldman Sachs Midcap Value Series.. 251,733.070 34,602,284 30,640,949
Westpeak Growth and Income Series.. 543,155.700 92,766,876 107,805,543
Loomis Sayles Small Cap Series..... 396,131.770 60,156,069 79,911,662
Salomon Brothers U. S. Government
Series............................. 1,245,288.970 14,360,263 13,461,574
Loomis Sayles Balanced Series...... 3,197,331.380 44,571,365 44,283,040
Alger Equity Growth Series......... 7,675,195.860 153,235,681 225,190,246
Morgan Stanley International Magnum
Equity Series...................... 1,467,890.810 16,689,953 20,770,655
Davis Venture Value Series......... 6,098,030.180 107,517,286 162,634,465
Salomon Brothers Strategic Bond Op-
portunities Series................. 2,746,317.780 32,493,271 29,303,211
VARIABLE INSURANCE PRODUCTS FUND:
Equity-Income Portfolio............ 6,773,787.310 128,040,852 174,154,072
Overseas Portfolio................. 4,235,131.160 79,859,392 116,211,999
--------------
</TABLE>
<TABLE>
<S> <C>
Total investments in sub-accounts, at value..................... 2,270,512,934
Dividends receivable............................................ 11,970
--------------
Total assets................................................ 2,270,524,904
LIABILITIES
Due to Metropolitan Life Insurance Company...................... 2,671,697
--------------
NET ASSETS...................................................... $2,267,853,207
==============
CONTRACT OWNERS' EQUITY
Owners of annuity contracts..................................... $2,254,956,405
Annuity reserves (Note 2)....................................... 12,896,802
--------------
TOTAL FOR VARIABLE ANNUITY CONTRACTS........................ $2,267,853,207
==============
</TABLE>

See Notes to Financial Statements

F-2
<PAGE>

THE NEW ENGLAND VARIABLE ACCOUNT
OF
METROPOLITAN LIFE INSURANCE COMPANY

STATEMENT OF OPERATIONS

FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1999

<TABLE>
<CAPTION>
CAPITAL BOND MONEY STOCK MIDCAP GROWTH SMALL
GROWTH INCOME MARKET INDEX MANAGED VALUE AND INCOME CAP
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ ----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INCOME:
Dividends....... $162,137,176 $ 8,745,170 $3,521,617 $ 1,992,485 $20,962,434 $ 382,798 $14,145,526 $ 209,713
------------ ----------- ---------- ----------- ----------- ---------- ----------- -----------
EXPENSES:
Mortality and
expense risk
charge.......... 7,725,456 1,247,852 695,977 760,324 1,451,137 329,194 1,016,255 634,485
Administrative
charge.......... 3,861,230 604,615 336,129 361,356 699,163 165,099 494,172 318,746
------------ ----------- ---------- ----------- ----------- ---------- ----------- -----------
Total expenses. 11,586,686 1,852,467 1,032,106 1,121,680 2,150,300 494,293 1,510,427 953,231
------------ ----------- ---------- ----------- ----------- ---------- ----------- -----------
Net investment
income.......... 150,550,490 6,892,703 2,489,511 870,805 18,812,134 (111,495) 12,635,099 (743,518)
------------ ----------- ---------- ----------- ----------- ---------- ----------- -----------
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON
INVESTMENTS:
Net unrealized
appreciation
(depreciation)
on investments:
Beginning of
year........... 145,060,563 2,310,498 -- 35,395,038 39,832,342 (4,695,144) 23,551,474 3,419,848
End of year.... 68,296,013 (7,665,561) -- 41,927,566 25,114,250 (3,961,335) 15,038,667 19,755,593
------------ ----------- ---------- ----------- ----------- ---------- ----------- -----------
Net change in
unrealized
appreciation
(depreciation). (76,764,550) (9,976,059) -- 6,532,528 (14,718,092) 733,809 (8,512,807) 16,335,745
Net realized
gain (loss) on
investments..... 31,243,383 474,439 -- 6,126,853 8,080,082 (942,117) 3,802,104 1,935,190
------------ ----------- ---------- ----------- ----------- ---------- ----------- -----------
Net realized and
unrealized gain
(loss) on
investments.... (45,521,167) (9,501,620) -- 12,659,381 (6,638,010) (208,308) (4,710,703) 18,270,935
------------ ----------- ---------- ----------- ----------- ---------- ----------- -----------
NET INCREASE
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS...... $105,029,323 $(2,608,917) $2,489,511 $13,530,186 $12,174,124 $ (319,803) $ 7,924,396 $17,527,417
============ =========== ========== =========== =========== ========== =========== ===========
<CAPTION>
U.S.
GOVERNMENT
SUB-ACCOUNT
-----------
<S> <C>
INCOME:
Dividends....... $ 804,807
-----------
EXPENSES:
Mortality and
expense risk
charge.......... 145,781
Administrative
charge.......... 68,199
-----------
Total expenses. 213,980
-----------
Net investment
income.......... 590,827
-----------
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON
INVESTMENTS:
Net unrealized
appreciation
(depreciation)
on investments:
Beginning of
year........... (104,090)
End of year.... (898,689)
-----------
Net change in
unrealized
appreciation
(depreciation). (794,599)
Net realized
gain (loss) on
investments..... (1,476)
-----------
Net realized and
unrealized gain
(loss) on
investments.... (796,075)
-----------
NET INCREASE
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS...... $(205,248)
===========
</TABLE>

See Notes to Financial Statements

F-3
<PAGE>

THE NEW ENGLAND VARIABLE ACCOUNT
OF
METROPOLITAN LIFE LIFE INSURANCE COMPANY

STATEMENT OF OPERATIONS

FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1999

<TABLE>
<CAPTION>
STRATEGIC
EQUITY INTERNATIONAL VENTURE BOND EQUITY-
BALANCED GROWTH MAGNUM EQUITY VALUE OPPORTUNITIES INCOME OVERSEAS
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT TOTAL
----------- ----------- ------------- ----------- ------------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INCOME:
Dividends........ $ 2,665,079 $27,730,944 $ 73,230 $ 3,171,598 $ 2,348,573 $ 8,886,140 $ 3,632,373 $261,409,663
----------- ----------- ---------- ----------- ----------- ----------- ----------- ------------
EXPENSES:
Mortality and ex-
pense risk
charge.......... 474,133 1,701,611 179,517 1,467,503 309,920 1,776,914 914,897 20,830,956
Administrative
charge.......... 237,504 830,508 88,837 724,543 147,093 876,422 456,181 10,269,797
----------- ----------- ---------- ----------- ----------- ----------- ----------- ------------
Total expenses... 711,637 2,532,119 268,354 2,192,046 457,013 2,653,336 1,371,078 31,100,753
----------- ----------- ---------- ----------- ----------- ----------- ----------- ------------
Net investment
income.......... 1,953,442 25,198,825 (195,124) 979,552 1,891,560 6,232,804 2,261,295 230,308,910
----------- ----------- ---------- ----------- ----------- ----------- ----------- ------------
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON INVEST-
MENTS:
Net unrealized
appreciation
(depreciation)
on investments:
Beginning of
year............. 6,569,059 50,532,653 504,963 39,486,146 (1,287,072) 52,711,019 9,403,008 402,690,305
End of year...... (288,325) 71,954,566 4,080,702 55,117,179 (3,190,060) 46,113,220 36,352,607 367,746,393
----------- ----------- ---------- ----------- ----------- ----------- ----------- ------------
Net change in
unrealized ap-
preciation (de-
preciation)..... (6,857,384) 21,421,913 3,575,739 15,631,033 (1,902,988) (6,597,799) 26,949,599 (34,943,912)
Net realized gain
(loss) on in-
vestments....... 1,715,594 4,291,403 514,203 5,750,062 (32,516) 9,304,792 4,576,287 76,838,283
----------- ----------- ---------- ----------- ----------- ----------- ----------- ------------
Net realized and
unrealized gain
(loss) on in-
vestments....... (5,141,790) 25,713,316 4,089,942 21,381,095 (1,935,504) 2,706,993 31,525,886 41,894,371
----------- ----------- ---------- ----------- ----------- ----------- ----------- ------------
NET INCREASE (DE-
CREASE) IN NET
ASSETS RESULTING
FROM OPERATIONS.. $(3,188,348) $50,912,141 $3,894,818 $22,360,647 $ (43,944) $ 8,939,797 $33,787,181 $272,203,281
=========== =========== ========== =========== =========== =========== =========== ============
</TABLE>

See Notes to Financial Statements

F-4
<PAGE>

THE NEW ENGLAND VARIABLE ACCOUNT
OF
METROPOLITAN LIFE INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1999

<TABLE>
<CAPTION>
CAPITAL BOND MONEY STOCK MIDCAP GROWTH AND
GROWTH INCOME MARKET INDEX MANAGED VALUE INCOME SMALL CAP
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- ------------ ------------ ----------- ------------ ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FROM INVESTMENT
ACTIVITIES:
Net investment
income.......... $ 150,550,490 $ 6,892,703 $ 2,489,511 $ 870,805 $ 18,812,134 $ (111,495) $ 12,635,099 $ (743,518)
Net realized and
unrealized
gain (loss) on
investments... (45,521,167) (9,501,620) -- 12,659,381 (6,638,010) (208,308) (4,710,703) 18,270,935
------------- ------------ ------------ ----------- ------------ ----------- ------------ ------------
Increase
(decrease) in
net assets
derived from
investment
activities..... 105,029,323 (2,608,917) 2,489,511 13,530,186 12,174,124 (319,803) 7,924,396 17,527,417
------------- ------------ ------------ ----------- ------------ ----------- ------------ ------------
FROM CONTRACT-
RELATED
TRANSACTIONS:
Net premiums
transferred
from
Metropolitan
Life Insurance
Company........ 21,720,726 3,982,893 4,392,239 1,527,449 2,926,306 1,200,036 3,951,032 3,110,909
Net transfers
(to) from other
sub-accounts... (42,369,603) (7,990,514) 33,003,847 6,112,025 (2,356,625) (5,420,405) 7,476,182 (9,113,553)
Net transfers to
Metropolitan
Life Insurance
Company
Surrenders...... (80,066,854) (15,975,607) (29,268,644) (8,149,748) (17,447,521) (3,254,109) (10,388,029) (7,026,279)
Annuity
benefits....... (4,177,571) (1,457,127) (2,066,596) (331,923) (1,861,017) (74,445) (677,026) (391,031)
------------- ------------ ------------ ----------- ------------ ----------- ------------ ------------
Increase
(decrease) in
net assets
derived from
contract-
related
transactions... (104,893,302) (21,440,355) 6,060,846 (842,197) (18,738,857) (7,548,923) 362,159 (13,419,954)
------------- ------------ ------------ ----------- ------------ ----------- ------------ ------------
NET INCREASE
(DECREASE) IN
NET ASSETS...... 136,021 (24,049,272) 8,550,357 12,687,989 (6,564,733) (7,868,726) 8,286,555 4,107,463
NET ASSETS, AT
BEGINNING OF THE
YEAR............ 831,738,970 142,526,183 71,333,786 73,116,140 155,184,159 38,473,704 99,391,729 75,709,596
------------- ------------ ------------ ----------- ------------ ----------- ------------ ------------
NET ASSETS, AT
END OF THE YEAR. $ 831,874,991 $118,476,911 $ 79,884,143 $85,804,129 $148,619,426 $30,604,978 $107,678,284 $ 79,817,059
============= ============ ============ =========== ============ =========== ============ ============
<CAPTION>
U.S.
GOVERNMENT
SUB-ACCOUNT
------------
<S> <C>
FROM INVESTMENT
ACTIVITIES:
Net investment
income.......... $ 590,827
Net realized and
unrealized
gain (loss) on
investments... (796,075)
------------
Increase
(decrease) in
net assets
derived from
investment
activities..... (205,248)
------------
FROM CONTRACT-
RELATED
TRANSACTIONS:
Net premiums
transferred
from
Metropolitan
Life Insurance
Company........ 483,391
Net transfers
(to) from other
sub-accounts... (1,523,591)
Net transfers to
Metropolitan
Life Insurance
Company
Surrenders...... (1,810,602)
Annuity
benefits....... (375,865)
------------
Increase
(decrease) in
net assets
derived from
contract-
related
transactions... (3,226,667)
------------
NET INCREASE
(DECREASE) IN
NET ASSETS...... (3,431,915)
NET ASSETS, AT
BEGINNING OF THE
YEAR............ 16,878,032
------------
NET ASSETS, AT
END OF THE YEAR. $13,446,117
============
</TABLE>

See Notes to Financial Statements

F-5
<PAGE>

THE NEW ENGLAND VARIABLE ACCOUNT
OF
METROPOLITAN LIFE INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1999

<TABLE>
<CAPTION>
STRATEGIC
EQUITY INTERNATIONAL VENTURE BOND
BALANCED GROWTH MAGNUM EQUITY VALUE OPPORTUNITIES EQUITY-INCOME OVERSEAS
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ ------------- ------------ ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
FROM INVESTMENT
ACTIVITIES:
Net investment
income......... $ 1,953,442 $ 25,198,825 $ (195,124) $ 979,552 $ 1,891,560 $ 6,232,804 $ 2,261,295
Net realized and
unrealized gain
(loss) on
investments.... (5,141,790) 25,713,316 4,089,942 21,381,095 (1,935,504) 2,706,993 31,525,886
----------- ------------ ----------- ------------ ----------- ------------ ------------
Increase
(decrease) in
net assets
derived from
investment
activities..... (3,188,348) 50,912,141 3,894,818 22,360,647 (43,944) 8,939,797 33,787,181
----------- ------------ ----------- ------------ ----------- ------------ ------------
FROM CONTRACT-
RELATED
TRANSACTIONS:
Net premiums
transferred
from
Metropolitan
Life Insurance
Company........ 2,298,968 6,622,737 636,928 5,877,661 1,215,713 5,594,484 3,137,518
Net transfers
(to) from other
sub-accounts... (4,423,494) 43,747,487 (1,117,734) 5,314,675 (5,003,804) (11,857,048) (4,477,845)
Net transfers to
Metropolitan
Life Insurance
Company
Surrenders...... (3,971,459) (14,945,949) (1,567,630) (13,755,714) (2,632,262) (16,625,208) (8,175,196)
Annuity
benefits....... (320,564) (775,266) (97,691) (869,039) (240,640) (1,027,216) (458,291)
----------- ------------ ----------- ------------ ----------- ------------ ------------
Increase
(decrease) in
net assets
derived from
contract-
related
transactions... (6,416,549) 34,649,009 (2,146,127) (3,432,417) (6,660,993) (23,914,988) (9,973,814)
----------- ------------ ----------- ------------ ----------- ------------ ------------
NET INCREASE
(DECREASE) IN
NET ASSETS...... (9,604,897) 85,561,150 1,748,691 18,928,230 (6,704,937) (14,975,191) 23,813,367
NET ASSETS, AT
BEGINNING OF THE
YEAR............ 53,836,730 139,364,909 18,998,370 143,516,062 35,975,353 188,924,290 92,265,042
----------- ------------ ----------- ------------ ----------- ------------ ------------
NET ASSETS, AT
END OF THE YEAR. $44,231,833 $224,926,059 $20,747,061 $162,444,292 $29,270,416 $173,949,099 $116,078,409
=========== ============ =========== ============ =========== ============ ============
<CAPTION>
TOTAL
---------------
<S> <C>
FROM INVESTMENT
ACTIVITIES:
Net investment
income......... $ 230,308,910
Net realized and
unrealized gain
(loss) on
investments.... 41,894,371
---------------
Increase
(decrease) in
net assets
derived from
investment
activities..... 272,203,281
---------------
FROM CONTRACT-
RELATED
TRANSACTIONS:
Net premiums
transferred
from
Metropolitan
Life Insurance
Company........ 68,678,990
Net transfers
(to) from other
sub-accounts... --
Net transfers to
Metropolitan
Life Insurance
Company
Surrenders...... (235,060,811)
Annuity
benefits....... (15,201,308)
---------------
Increase
(decrease) in
net assets
derived from
contract-
related
transactions... (181,583,129)
---------------
NET INCREASE
(DECREASE) IN
NET ASSETS...... 90,620,152
NET ASSETS, AT
BEGINNING OF THE
YEAR............ 2,177,233,055
---------------
NET ASSETS, AT
END OF THE YEAR. $2,267,853,207
===============
</TABLE>

See Notes to Financial Statements

F-6
<PAGE>

THE NEW ENGLAND VARIABLE ACCOUNT
OF
METROPOLITAN LIFE INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
CAPITAL MIDCAP GROWTH
GROWTH BOND INCOME MONEY MARKET STOCK INDEX MANAGED VALUE AND INCOME SMALL CAP
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------ ------------ ------------ ----------- ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FROM INVESTMENT
ACTIVITIES:
Net investment
income......... $ 97,821,413 $ 8,206,703 $ 2,326,567 $ 141,152 $ 11,399,822 $ 8,503,761 $ 5,704,275 $ 211,504
Net realized and
unrealized gain
(loss) on
investments.... 108,477,121 1,651,852 -- 15,283,573 13,486,856 (11,608,473) 11,264,348 (2,763,683)
------------ ------------ ------------ ----------- ------------ ----------- ----------- -----------
Increase
(decrease) in
net assets
derived from
investment
activities..... 206,298,534 9,858,555 2,326,567 15,424,725 24,886,678 (3,104,712) 16,968,623 (2,552,179)
------------ ------------ ------------ ----------- ------------ ----------- ----------- -----------
FROM CONTRACT-
RELATED
TRANSACTIONS:
Net premiums
transferred
from
Metropolitan
Life Insurance
Company........ 40,049,726 9,884,251 21,340,577 1,452,914 3,314,419 3,200,779 10,189,551 9,221,354
Net transfers
(to) from other
sub-accounts... (16,399,017) 7,345,385 10,492,616 1,106,109 (4,093,865) (5,037,997) 10,591,095 (1,407,877)
Net transfers to
Metropolitan
Life Insurance
Company
Surrenders...... (55,755,674) (12,177,589) (15,124,947) (4,948,891) (13,125,043) (2,832,814) (7,306,989) (5,507,926)
Annuity
benefits....... (5,896,454) (1,217,314) (2,867,828) (319,600) (1,533,523) (366,760) (316,533) (449,424)
------------ ------------ ------------ ----------- ------------ ----------- ----------- -----------
Increase
(decrease) in
net assets
derived from
contract-
related
transactions... (38,001,419) 3,834,733 13,840,418 (2,709,468) (15,438,012) (5,036,792) 13,157,124 1,856,127
------------ ------------ ------------ ----------- ------------ ----------- ----------- -----------
NET INCREASE
(DECREASE) IN
NET ASSETS...... 168,297,115 13,693,288 16,166,985 12,715,257 9,448,666 (8,141,504) 30,125,747 (696,052)
NET ASSETS, AT
BEGINNING OF THE
YEAR............ 663,441,855 128,832,895 55,166,801 60,400,883 145,735,493 46,615,208 69,265,982 76,405,648
------------ ------------ ------------ ----------- ------------ ----------- ----------- -----------
NET ASSETS, AT
END OF THE YEAR. $831,738,970 $142,526,183 $ 71,333,786 $73,116,140 $155,184,159 $38,473,704 $99,391,729 $75,709,596
============ ============ ============ =========== ============ =========== =========== ===========
<CAPTION>
U.S.
GOVERNMENT
SUB-ACCOUNT
------------
<S> <C>
FROM INVESTMENT
ACTIVITIES:
Net investment
income......... $ 532,480
Net realized and
unrealized gain
(loss) on
investments.... 205,220
------------
Increase
(decrease) in
net assets
derived from
investment
activities..... 737,700
------------
FROM CONTRACT-
RELATED
TRANSACTIONS:
Net premiums
transferred
from
Metropolitan
Life Insurance
Company........ 1,780,311
Net transfers
(to) from other
sub-accounts... 4,991,367
Net transfers to
Metropolitan
Life Insurance
Company
Surrenders...... (1,299,860)
Annuity
benefits....... (39,667)
------------
Increase
(decrease) in
net assets
derived from
contract-
related
transactions... 5,432,151
------------
NET INCREASE
(DECREASE) IN
NET ASSETS...... 6,169,851
NET ASSETS, AT
BEGINNING OF THE
YEAR............ 10,708,181
------------
NET ASSETS, AT
END OF THE YEAR. $16,878,032
============
</TABLE>

See Notes to Financial Statements

F-7
<PAGE>

THE NEW ENGLAND VARIABLE ACCOUNT
OF
METROPOLITAN LIFE INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS

FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
STRATEGIC
EQUITY INTERNATIONAL VENTURE BOND EQUITY-
BALANCED GROWTH MAGNUM EQUITY VALUE OPPORTUNITIES INCOME OVERSEAS
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ ------------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
FROM INVESTMENT
ACTIVITIES:
Net investment
income......... $ 1,600,374 $ 3,400,965 $ 140,808 $ 2,031,528 $ 1,926,025 $ 8,910,295 $ 5,777,425
Net realized and
unrealized gain
(loss) on
investments.... 2,044,148 38,319,444 778,190 13,407,368 (1,779,711) 8,638,393 3,955,853
----------- ------------ ----------- ------------ ----------- ------------ ------------
Increase
(decrease) in
net assets
derived from
investment
activities..... 3,644,522 41,720,409 918,998 15,438,896 146,314 17,548,688 9,733,278
----------- ------------ ----------- ------------ ----------- ------------ ------------
FROM CONTRACT-
RELATED
TRANSACTIONS:
Net premiums
transferred
from
Metropolitan
Life Insurance
Company........ 7,354,133 11,871,287 1,872,270 18,560,719 6,181,058 13,382,867 6,400,225
Net transfers
(to) from other
sub-accounts... 409,136 8,530,395 (1,287,125) 2,835,730 (476,855) (8,394,490) (9,204,607)
Net transfers to
Metropolitan
Life Insurance
Company
Surrenders...... (3,955,175) (8,522,044) (1,383,343) (9,477,930) (2,850,826) (13,042,340) (6,886,447)
Annuity
benefits....... (523,862) (687,556) (105,037) (708,014) (193,496) (1,264,955) (628,414)
----------- ------------ ----------- ------------ ----------- ------------ ------------
Increase
(decrease) in
net assets
derived from
contract-
related
transactions... 3,284,232 11,192,082 (903,235) 11,210,505 2,659,881 (9,318,918) (10,319,243)
----------- ------------ ----------- ------------ ----------- ------------ ------------
NET INCREASE
(DECREASE) IN
NET ASSETS...... 6,928,754 52,912,491 15,763 26,649,401 2,806,195 8,229,770 (585,965)
NET ASSETS, AT
BEGINNING OF THE
YEAR............ 46,907,976 86,452,418 18,982,607 116,866,661 33,169,158 180,694,520 92,851,007
----------- ------------ ----------- ------------ ----------- ------------ ------------
NET ASSETS, AT
END OF THE YEAR. $53,836,730 $139,364,909 $18,998,370 $143,516,062 $35,975,353 $188,924,290 $ 92,265,042
=========== ============ =========== ============ =========== ============ ============
<CAPTION>
TOTAL
---------------
<S> <C>
FROM INVESTMENT
ACTIVITIES:
Net investment
income......... $ 158,635,097
Net realized and
unrealized gain
(loss) on
investments.... 201,360,499
---------------
Increase
(decrease) in
net assets
derived from
investment
activities..... 359,995,596
---------------
FROM CONTRACT-
RELATED
TRANSACTIONS:
Net premiums
transferred
from
Metropolitan
Life Insurance
Company........ 166,056,441
Net transfers
(to) from other
sub-accounts... --
Net transfers to
Metropolitan
Life Insurance
Company
Surrenders...... (164,197,838)
Annuity
benefits....... (17,118,437)
---------------
Increase
(decrease) in
net assets
derived from
contract-
related
transactions... (15,259,834)
---------------
NET INCREASE
(DECREASE) IN
NET ASSETS...... 344,735,762
NET ASSETS, AT
BEGINNING OF THE
YEAR............ 1,832,497,293
---------------
NET ASSETS, AT
END OF THE YEAR. $2,177,233,055
===============
</TABLE>

See Notes to Financial Statements

F-8
<PAGE>

THE NEW ENGLAND VARIABLE ACCOUNT
OF
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS

1. NATURE OF OPERATIONS.

The New England Variable Account (the "Account") is registered as a unit
investment trust under the Investment Company Act of 1940 and is a funding
vehicle for individual variable annuity contracts. The operations of the
Account are part of Metropolitan Life Insurance Company (the "Company"). Prior
to August 30, 1996, the Account was a part of New England Mutual Life
Insurance Company. Effective August 30, 1996, New England Mutual Life
Insurance Company merged into Metropolitan Life Insurance Company ("MetLife").
MetLife is a wholly-owned subsidiary of MetLife Inc., a publicly traded
company. The Account has sixteen investment sub-accounts as of December 31,
1999, each of which invests in one series of the New England Zenith Fund
("Zenith Fund") or one portfolio of the Variable Insurance Products Fund. The
Zenith Fund and the Variable Insurance Products Fund ("VIP") are diversified,
open-end management investment companies. The series of the Zenith Fund and
portfolios of the Variable Insurance Products Fund in which the sub-accounts
invest are referred to herein as the "Eligible Funds."

2. SIGNIFICANT ACCOUNTING POLICIES.

The following is a summary of the significant accounting policies
consistently followed by the Account.

A. Security Valuation--The Eligible Fund shares are valued at the closing
net asset value per share as determined by each fund as of the close of
regular trading on the New York Stock Exchange (currently 4:00 p.m. Eastern
Standard Time) on each day the Exchange is open for trading.

B. Security Transactions and Related Investment Income--Security
transactions are accounted for on the trade date (the date the order to buy
or sell is executed) and dividend income is recorded on the ex-dividend
date. Net investment income and net realized and unrealized gains and
losses on investments are allocated to the contracts on each valuation date
based upon the contract's pro rata share of each sub-account. Realized
gains and losses from sales of investments are computed on the basis of
first in first out.

C. Federal Income Taxes--The operations of the Account are included in
the federal income tax return of the Company, which is taxed as a Life
Insurance Company under the provisions of the Internal Revenue Code (the
"Code"). Under the current provisions of the Code, the Company does not
expect to incur federal income taxes on the earnings of the Account to the
extent the earnings are credited under the contracts. Based on this, no
charge is being made currently to the Account for federal income taxes. The
Company will review periodically the status of such decision based on
changes in the tax law. Such a charge may be made in future years for any
federal income taxes that would be attributable to the earnings associated
with and credited to the contracts.

D. Annuity Reserves--Annuity reserves are computed for currently payable
contracts according to the 1983-a Mortality Tables. The assumed interest
rate may be 0%, 3.5%, or 5% as elected by the annuitant and as regulated by
laws of the respective states. Adjustments to annuity reserves are
reimbursed to or from the Company. For contracts payable on or after
January 1, 1998 annuity reserves will be computed according to the Annuity
2000 Mortality Tables.

E. Estimates--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.

F-9
<PAGE>

THE NEW ENGLAND VARIABLE ACCOUNT
OF
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS--Continued

3. PURCHASES AND SALES OF INVESTMENT SECURITIES.

The following table shows the aggregate cost of shares purchased and
proceeds from sales of Eligible Funds for the year ended December 31, 1999:

<TABLE>
<CAPTION>
SERIES PURCHASES SALES
------ ------------ ------------
<S> <C> <C>
NEW ENGLAND ZENITH FUND:
Capital Growth..................................... $220,255,358 $174,544,013
Back Bay Advisors Bond Income...................... 27,023,792 41,580,649
Back Bay Advisors Money Market..................... 109,091,677 100,202,198
Westpeak Stock Index............................... 19,086,922 19,047,713
Back Bay Advisors Managed.......................... 32,319,395 32,250,206
Goldman Sachs Midcap Value......................... 6,760,219 14,428,676
Westpeak Growth and Income......................... 36,225,982 23,215,349
Loomis Sayles Small Cap............................ 10,951,094 25,106,284
Salomon Brothers U.S. Government................... 5,348,031 7,987,536
Loomis Sayles Balanced............................. 9,087,678 13,559,950
Alger Equity Growth................................ 102,102,808 42,152,577
Morgan Stanley International Magnum Equity......... 4,056,745 6,395,531
Davis Venture Value................................ 30,168,023 32,593,797
Salomon Brothers Strategic Bond Opportunities...... 6,637,500 11,415,825
VARIABLE INSURANCE PRODUCTS FUND:
Equity-Income Portfolio............................ 25,581,249 43,272,093
Overseas Portfolio................................. 28,029,034 35,711,603
</TABLE>

The Account purchases or redeems shares of the sixteen Eligible Funds based
on the amount of net premiums invested in the account, transfers among the
sub-accounts, policy loans, surrender payments, and annuity payments.

4. CHARGES DEDUCTED BY THE COMPANY.

A. Administrative charge--a fixed administrative charge of $30.00 per
contract year is deducted from the contract value on each contract
anniversary.

B. Mortality and expense risk and administrative asset charges--a charge for
the mortality/expense risk assumed by the Company and for administrative
expenses, equal to an annual rate of 1.35% of the net assets of the Account is
deducted on a daily basis. The mortality risk is the risk that guaranteed
annuity payments or minimum death benefit payments made by the Company exceed
amounts deducted from the net assets of the Account. The expense risk is the
risk that administrative costs incurred by the Company exceed amounts deducted
from the net assets of the account.

C. Contingent deferred sales charge--In the event of a partial or full
surrender, a contingent deferred sales charge may be imposed. Charges for
investment Advisery fees and other expenses are deducted from the assets of
the Eligible Funds.

F-10
<PAGE>

THE NEW ENGLAND VARIABLE ACCOUNT
OF
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS--CONTINUED

5. INVESTMENT ADVISERS.

The investment adviser and sub-adviser for each of the Eligible Funds are
listed in the chart below. New England Investment Management, Inc. ("NEIM")
(formerly, TNE Advisers, Inc.), which is an indirect, wholly owned subsidiary
of the Company, and each of the sub-advisers are registered with the
Securities and Exchange Commission as investment advisers under the Investment
Advisers Act of 1940.

<TABLE>
<CAPTION>
SERIES ADVISER SUB-ADVISER
- ------ ------- -----------
<S> <C> <C>
Capital Growth.......... Capital Growth Management, L.P.* --
Back Bay Advisors Bond Back Bay Advisors, L.P.*
Income................. NEIM
Back Bay Advisors Money Back Bay Advisors, L.P.*
Market................. NEIM
Westpeak Stock Index.... NEIM Westpeak Investment
Advisors, L.P.*
Back Bay Advisors Back Bay Advisors, L.P.*
Managed................ NEIM
Goldman Sachs Midcap Goldman Sachs & Co.
Value.................. NEIM
Westpeak Growth and Westpeak Investment
Income................. NEIM Advisors, L.P.*
Loomis Sayles Small Cap. Loomis Sayles & Company,
NEIM L.P.*
Salomon Brothers U.S. Salomon Brothers Asset
Government............. NEIM Management Inc
Loomis Sayles Balanced.. Loomis Sayles & Company,
NEIM L.P.*
Alger Equity Growth..... NEIM Fred Alger Management, Inc.
Morgan Stanley
International Magnum Morgan Stanley Dean Witter
Equity ................ NEIM Investment Management Inc.
Davis Venture Value..... NEIM Davis Selected Advisers,
Inc. (a)
Salomon Brothers
Strategic Bond Salomon Brothers Asset
Opportunities.......... NEIM Management Inc (b)
VIP Equity-Income
Portfolio ............. Fidelity Management & Research Co. --
VIP Overseas Portfolio.. Fidelity Management & Research Co. --
</TABLE>
- --------
* An Affiliate of the Company

(a) Davis Selected Advisers, L.P. may also delegate any of its
responsibilities to Davis Selected Advisers-NY, Inc. a wholly-owned
subsidiary of Davis Selected Advisers, L.P.

(b) In connection with Salomon Brothers Asset Management Inc's service as
subadviser to the Strategic Bond Opportunities Series, Salomon Brothers
Asset Management Inc's London based affiliate, Salomon Brothers Asset
Management Limited provides certain subadvisory services to Salomon
Brothers Asset Management Inc.

F-11
<PAGE>

THE NEW ENGLAND VARIABLE ACCOUNT
OF
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS--Continued

Effective May 1, 1998, Goldman Sachs Asset Management, ("Goldman Sachs"),
became the subadvisor of the Loomis Sayles Avanti Growth Series, succeeding
Loomis Sayles & Company, L.P., and the name of the Series was changed to the
"Goldman Sachs Midcap Value Series". Goldman Sachs is a separate operating
division of Goldman, Sachs & Co.

Effective March 26, 1999, TNE Advisers, Inc. changed its name to New England
Investment Management, Inc.

6. REGISTRATION EXPENSES.

The company has assumed the cost of registering the Account and its
contracts for distribution under applicable federal and state laws.

F-12
<PAGE>

THE NEW ENGLAND VARIABLE ACCOUNT
OF
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS--Continued

7. VARIABLE ANNUITY CONTRACT UNIT ACTIVITY.

A summary of units outstanding for variable annuity contracts at December 31,
1999:

<TABLE>
<CAPTION>
CAPITAL GROWTH BOND INCOME MONEY MARKET STOCK INDEX MANAGED MIDCAP VALUE
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
--------------- --------------- ---------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Units
Outstanding
1/1/99......... 38,236,510.5847 38,638,164.8915 33,735,645.3769 15,293,054.6164 42,359,235.0648 21,347,180.9398
Units Purchased. 887,085.3860 1,612,936.8887 22,633,109.9581 1,937,975.4491 1,488,929.2495 2,061,585.5997
Units Redeemed.. (5,621,567.0330) (7,543,680.1657) (19,887,546.6586) (2,119,968.4025) (6,457,136.7364) (6,256,951.7131)
--------------- --------------- ---------------- --------------- --------------- ---------------
Units
Outstanding
12/31/99....... 33,502,038.9377 32,707,421.6145 36,481,208.6764 15,111,061.6630 37,391,027.5779 17,151,814.8264
=============== =============== ================ =============== =============== ===============
Unit Value
12/31/99....... $ 24.830578 $ 3.622325 $ 2.189734 $ 5.678233 $ 3.974735 $ 1.784358
=============== =============== ================ =============== =============== ===============
<CAPTION>
GROWTH
AND INCOME SMALL CAP
SUB-ACCOUNT SUB-ACCOUNT
---------------- -----------------
<S> <C> <C>
Units
Outstanding
1/1/99......... 35,514,613.1211 40,318,543.2206
Units Purchased. 4,186,617.5092 2,636,531.4514
Units Redeemed.. (4,038,033.2982) (10,254,663.9967)
---------------- -----------------
Units
Outstanding
12/31/99....... 35,663,197.3321 32,700,410.6753
================ =================
Unit Value
12/31/99....... $ 3.019311 $ 2.440858
================ =================
<CAPTION>
INTERNATIONAL STRATEGIC BOND
U.S. GOVERNMENT BALANCED EQUITY GROWTH MAGNUM EQUITY VENTURE VALUE OPPORTUNITIES
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
--------------- --------------- ---------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Units Outstand-
ing 1/1/99..... 12,796,188.5960 30,825,179.0133 49,255,941.6244 16,325,859.4584 58,766,565.1982 24,944,929.6244
Units Purchased. 1,600,855.9932 1,693,840.1258 16,105,744.3097 2,032,515.5048 4,844,041.6760 1,348,799.8282
Units Redeemed.. (4,082,093.0259) (5,480,264.7896) (5,289,276.4870) (3,856,917.6224) (6,239,718.2305) (6,014,847.8721)
--------------- --------------- ---------------- --------------- --------------- ---------------
Units Outstand-
ing 12/31/99... 10,314,951.5633 27,038,754.3495 60,072,409.4471 14,501,457.3408 57,370,888.6437 20,278,881.5805
=============== =============== ================ =============== =============== ===============
Unit Value
12/31/99....... $ 1.303556 $ 1.635868 $ 3.744249 $ 1.430688 $ 2.831476 $ 1.443394
=============== =============== ================ =============== =============== ===============
<CAPTION>
EQUITY INCOME OVERSEAS
SUB-ACCOUNT SUB-ACCOUNT
---------------- -----------------
<S> <C> <C>
Units Outstand-
ing 1/1/99..... 42,927,201.9630 40,546,509.4817
Units Purchased. 1,643,864.8425 4,116,135.7036
Units Redeemed.. (6,894,221.0205) (8,411,467.7398)
---------------- -----------------
Units Outstand-
ing 12/31/99... 37,676,845.7850 36,251,177.4455
================ =================
Unit Value
12/31/99....... $ 4.616870 $ 3.202059
================ =================
</TABLE>

F-13

<PAGE> 1

INDEX TO FINANCIAL STATEMENTS

METROPOLITAN LIFE INSURANCE COMPANY
Independent Auditors' Report................................
Consolidated Statements of Income for the years ended
December 31, 1999, 1998 and 1997..........................
Consolidated Balance Sheets at December 31, 1999 and 1998...
Consolidated Statements of Equity for the years ended
December 31, 1999, 1998 and 1997..........................
Consolidated Statements of Cash Flows for the years ended
December 31, 1999, 1998 and 1997..........................
Notes to Consolidated Financial Statements..................
</TABLE>
<PAGE> 2

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Policyholders of
Metropolitan Life Insurance Company:

We have audited the accompanying consolidated balance sheets of
Metropolitan Life Insurance Company and subsidiaries (the "Company") as of
December 31, 1999 and 1998, and the related consolidated statements of income,
equity and cash flows for each of the three years in the period ended December
31, 1999. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

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

In our opinion, such consolidated financial statements present fairly, in
all material respects, the consolidated financial position of Metropolitan Life
Insurance Company and subsidiaries at December 31, 1999 and 1998, and the
consolidated results of their operations and their consolidated cash flows for
each of the three years in the period ended December 31, 1999 in conformity with
generally accepted accounting principles.

Deloitte & Touche LLP

New York, New York
February 7, 2000
<PAGE> 3

METROPOLITAN LIFE INSURANCE COMPANY

CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(IN MILLIONS)

<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
REVENUES
Premiums.................................................... $12,088 $11,503 $11,278
Universal life and investment-type product policy fees...... 1,438 1,360 1,418
Net investment income....................................... 9,816 10,228 9,491
Other revenues.............................................. 2,154 1,994 1,491
Net realized investment gains (losses) (net of amounts
allocable to other accounts of $(67), $608 and $231,
respectively)............................................. (70) 2,021 787
------- ------- -------
25,426 27,106 24,465
------- ------- -------
EXPENSES
Policyholder benefits and claims (excludes amounts directly
related to net realized investment gains (losses) of
$(21), $368 and $161, respectively)....................... 13,105 12,638 12,403
Interest credited to policyholder account balances.......... 2,441 2,711 2,878
Policyholder dividends...................................... 1,690 1,651 1,742
Other expenses (excludes amounts directly related to net
realized investment gains (losses) of $(46), $240 and $70,
respectively)............................................. 6,755 8,019 5,771
------- ------- -------
23,991 25,019 22,794
------- ------- -------
Income before provision for income taxes and extraordinary
item...................................................... 1,435 2,087 1,671
Provision for income taxes.................................. 593 740 468
------- ------- -------
Income before extraordinary item............................ 842 1,347 1,203
Extraordinary item -- demutualization expense............... 225 4 --
------- ------- -------
Net income.................................................. $ 617 $ 1,343 $ 1,203
======= ======= =======
</TABLE>

See accompanying notes to consolidated financial statements.
<PAGE> 4

METROPOLITAN LIFE INSURANCE COMPANY

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
(IN MILLIONS)

<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
ASSETS
Investments:
Fixed maturities available-for-sale, at fair value........ $ 96,981 $100,767
Equity securities, at fair value.......................... 2,006 2,340
Mortgage loans on real estate............................. 19,739 16,827
Real estate and real estate joint ventures................ 5,649 6,287
Policy loans.............................................. 5,598 5,600
Other limited partnership interests....................... 1,331 1,047
Short-term investments.................................... 3,055 1,369
Other invested assets..................................... 1,501 1,484
-------- --------
135,860 135,721

Cash and cash equivalents................................... 2,789 3,301
Accrued investment income................................... 1,725 1,994
Premiums and other receivables.............................. 6,681 5,972
Deferred policy acquisition costs........................... 8,492 6,538
Deferred income taxes....................................... 603 --
Other....................................................... 4,141 3,752
Separate account assets..................................... 64,941 58,068
-------- --------
$225,232 $215,346
======== ========
LIABILITIES AND EQUITY
Liabilities:
Future policy benefits...................................... $ 73,582 $ 72,701
Policyholder account balances............................... 45,901 46,494
Other policyholder funds.................................... 4,498 4,061
Policyholder dividends payable.............................. 974 947
Short-term debt............................................. 4,208 3,585
Long-term debt.............................................. 2,514 2,903
Current income taxes payable................................ 548 403
Deferred income taxes payable............................... -- 545
Other....................................................... 14,376 10,772
Separate account liabilities................................ 64,941 58,068
-------- --------
211,542 200,479
-------- --------

Commitments and contingencies (Note 9)

Equity:
Retained earnings........................................... 14,100 13,483
Accumulated other comprehensive income (loss)............... (410) 1,384
-------- --------
13,690 14,867
-------- --------
$225,232 $215,346
======== ========
</TABLE>

See accompanying notes to consolidated financial statements.
<PAGE> 5

METROPOLITAN LIFE INSURANCE COMPANY

CONSOLIDATED STATEMENTS OF EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(IN MILLIONS)

<TABLE>
<CAPTION>
ACCUMULATED OTHER
COMPREHENSIVE INCOME (LOSS)
-----------------------------------------
NET FOREIGN MINIMUM
UNREALIZED CURRENCY PENSION
COMPREHENSIVE RETAINED INVESTMENT TRANSLATION LIABILITY
TOTAL INCOME (LOSS) EARNINGS GAINS (LOSSES) ADJUSTMENT ADJUSTMENT
----- ------------- -------- -------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1997....... $11,983 $10,937 $ 1,028 $ 18 $ --
Comprehensive income:
Net income..................... 1,203 $ 1,203 1,203
-------
Other comprehensive income:
Unrealized investment gains,
net of related offsets,
reclassification
adjustments and income
taxes...................... 870 870
Foreign currency translation
adjustments................ (49) (49)
-------
Other comprehensive income... 821 821
-------
Comprehensive income........... $ 2,024
=======
------- ------- ------- ----- ----
Balance at December 31, 1997..... 14,007 12,140 1,898 (31) --
Comprehensive income:
Net income..................... 1,343 $ 1,343 1,343
-------
Other comprehensive loss:
Unrealized investment losses,
net of related offsets,
reclassification
adjustments and income
taxes...................... (358) (358)
Foreign currency translation
adjustments................ (113) (113)
Minimum pension liability
adjustment................. (12) (12)
-------
Other comprehensive loss..... (483) (483)
-------
Comprehensive income........... $ 860
=======
------- ------- ------- ----- ----
Balance at December 31, 1998..... 14,867 13,483 1,540 (144) (12)
Comprehensive loss:
Net income..................... 617 $ 617 617
-------
Other comprehensive loss:
Unrealized investment losses,
net of related offsets,
reclassification
adjustments and income
taxes...................... (1,837) (1,837)
Foreign currency translation
adjustments................ 50 50
Minimum pension liability
adjustment................. (7) (7)
-------
Other comprehensive loss..... (1,794) (1,794)
-------
Comprehensive loss............. $(1,177)
=======
------- ------- ------- ----- ----
Balance at December 31, 1999..... $13,690 $14,100 $ (297) $ (94) $(19)
======= ======= ======= ===== ====
</TABLE>

See accompanying notes to consolidated financial statements.
<PAGE> 6

METROPOLITAN LIFE INSURANCE COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(IN MILLIONS)

<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income.................................................. $ 617 $ 1,343 $ 1,203
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization expenses.................. 173 56 (36)
(Gains) losses from sales of investments and businesses,
net................................................... 137 (2,629) (1,018)
Change in undistributed income of real estate joint
ventures and other limited partnership interests...... (322) (91) 157
Interest credited to policyholder account balances...... 2,441 2,711 2,878
Universal life and investment-type product policy
fees.................................................. (1,438) (1,360) (1,418)
Change in accrued investment income..................... 269 (181) (215)
Change in premiums and other receivables................ (619) (2,681) (792)
Change in deferred policy acquisition costs, net........ (389) (188) (159)
Change in insurance related liabilities................. 2,248 1,481 2,364
Change in income taxes payable.......................... 22 251 (99)
Change in other liabilities............................. 857 2,390 (206)
Other, net.............................................. (131) (260) 213
-------- -------- --------
Net cash provided by operating activities................... 3,865 842 2,872
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Sales, maturities and repayments of:
Fixed maturities........................................ 73,120 57,857 75,346
Equity securities....................................... 760 3,085 1,821
Mortgage loans on real estate........................... 1,992 2,296 2,784
Real estate and real estate joint ventures.............. 1,062 1,122 2,046
Other limited partnership interests..................... 469 146 166
Purchases of:
Fixed maturities........................................ (72,253) (67,543) (76,603)
Equity securities....................................... (410) (854) (2,121)
Mortgage loans on real estate........................... (4,395) (2,610) (4,119)
Real estate and real estate joint ventures.............. (341) (423) (624)
Other limited partnership interests..................... (465) (723) (338)
Net change in short-term investments...................... (1,577) (761) 63
Net change in policy loans................................ 2 133 17
Purchase of businesses, net of cash received.............. (2,972) -- (430)
Proceeds from sales of businesses......................... -- 7,372 135
Net change in investment collateral....................... 2,692 3,769 --
Other, net................................................ (73) (183) 191
-------- -------- --------
Net cash provided by (used in) investing activities......... (2,389) 2,683 (1,666)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Policyholder account balances:
Deposits................................................ 18,428 19,361 16,061
Withdrawals............................................. (20,650) (21,706) (18,831)
Short-term debt, net...................................... 623 (1,002) 1,265
Long-term debt issued..................................... 44 693 989
Long-term debt repaid..................................... (433) (481) (104)
-------- -------- --------
Net cash used in financing activities....................... (1,988) (3,135) (620)
-------- -------- --------
Change in cash and cash equivalents......................... (512) 390 586
Cash and cash equivalents, beginning of year................ 3,301 2,911 2,325
-------- -------- --------
CASH AND CASH EQUIVALENTS, END OF YEAR...................... $ 2,789 $ 3,301 $ 2,911
======== ======== ========
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest.................................................. $ 388 $ 367 $ 422
======== ======== ========
Income taxes.............................................. $ 587 $ 579 $ 589
======== ======== ========
</TABLE>

See accompanying notes to consolidated financial statements.
<PAGE> 7

METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS ARE IN MILLIONS UNLESS OTHERWISE STATED.)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUSINESS

Metropolitan Life Insurance Company ("MetLife") and its subsidiaries (the
"Company") is a leading provider of insurance and financial services to a broad
section of institutional and individual customers. The Company offers life
insurance, annuities and mutual funds to individuals and group insurance and
retirement and savings products and services to corporations and other
institutions.

PLAN OF REORGANIZATION

On September 28, 1999, the board of directors of MetLife adopted, pursuant
to the New York Insurance Law, a plan of reorganization, and subsequently
adopted amendments to the plan, pursuant to which MetLife proposes to convert
from a mutual life insurance company to a stock life insurance company and
become a wholly-owned subsidiary of MetLife, Inc. The plan was approved by
MetLife's voting policyholders on February 7, 2000. The plan will become
effective at such time as the New York Superintendent of Insurance
("Superintendent") approves it based on finding, among other things, that the
plan is fair and equitable to policyholders. The plan requires an initial public
offering of common stock and provides for other capital raising transactions on
the effective date of the plan.

On the date the plan of reorganization becomes effective, each
policyholder's membership interest will be extinguished and each eligible
policyholder will be entitled to receive, in exchange for that interest, trust
interests representing shares of common stock of MetLife, Inc. to be held in a
trust, cash or an adjustment to their policy values in the form of policy
credits, as provided in the plan. In addition, when MetLife demutualizes,
MetLife's Canadian branch will make cash payments to holders of certain policies
transferred to Clarica Life Insurance Company ("Clarica Life") in connection
with the sale of a substantial portion of MetLife's Canadian operations in 1998.
See Note 9.

The plan of reorganization requires that MetLife establish and operate a
closed block for the benefit of holders of certain individual life insurance
policies of MetLife. Assets will be allocated to the closed block in an amount
that is expected to produce cash flows which, together with anticipated revenue
from the policies included in the closed block, are reasonably expected to be
sufficient to support obligations and liabilities relating to these policies,
including, but not limited to, provisions for the payment of claims and certain
expenses and taxes, and for the continuation of policyholder dividend scales in
effect for 1999, if the experience underlying such dividend scales continues,
and for appropriate adjustments in such scales if the experience changes. The
closed block assets, the cash flows generated by the closed block assets and the
anticipated revenues from the policies in the closed block will benefit only the
holders of these policies included in the closed block. To the extent that, over
time, cash flows from the assets allocated to the closed block and claims and
other experience relating to the closed block are, in the aggregate, more or
less favorable than assumed in establishing the closed block, total dividends
paid to the closed block policyholders in the future may be greater than or less
than which would have been paid to these policyholders if the policyholder
dividend scales in effect for 1999 had been continued. Any cash flows in excess
of amounts assumed will be available for distribution over time to closed block
policyholders and will not be available to stockholders. The closed block will
continue in effect until the last policy in the closed block is no longer in
force.
<PAGE> 8
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The accounting principles to account for the participating policies
included in the closed block will be those used prior to the date of the
demutualization. However, a policyholder dividend obligation will be established
for earnings that will be paid to policyholders as additional dividends in the
amounts described below, unless these earnings are offset by future unfavorable
experience in the closed block. Although all of the cash flows of the closed
block are for the benefit of closed block policyholders, the excess of closed
block liabilities over closed block assets at the effective date will represent
the estimated maximum future contributions from the closed block expected to be
reported in income as the contribution from the closed block after income taxes.
The contribution from the closed block will be recognized in income over the
period the policies and contracts in the closed block remain in force.
Management believes that over time the actual cumulative contributions from the
closed block will approximately equal the expected cumulative contributions, due
to the effect of dividend changes. If, over the period the closed block remains
in existence, the actual cumulative contribution from the closed block is
greater than the expected cumulative contribution from the closed block, the
expected cumulative contribution will be recognized in income with the excess
recorded as a policyholder dividend obligation, because the excess of the actual
cumulative contribution from the closed block over the expected cumulative
contribution will be paid to closed block policyholders as additional
policyholder dividends unless offset by future unfavorable experience of the
closed block. If over such period, the actual cumulative contribution from the
closed block is less than the expected cumulative contribution from the closed
block, the actual contribution will be recognized in income. However, dividends
in the future may be changed, which would be intended to increase future actual
contribution until the actual contribution equal the expected cumulative
contribution.

BASIS OF PRESENTATION

The accompanying consolidated financial statements have been prepared in
conformity with generally accepted accounting principles ("GAAP"). The New York
State Insurance Department (the "Department") recognizes only statutory
accounting practices for determining and reporting the financial condition and
results of operations of an insurance company for determining solvency under the
New York Insurance Law. No consideration is given by the Department to financial
statements prepared in accordance with GAAP in making such determination.

The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the dates of
the financial statements and the reported amounts of revenues and expenses
during the reporting periods. The most significant estimates include those used
in determining deferred policy acquisition costs, investment allowances and the
liability for future policyholder benefits. Actual results could differ from
those estimates.

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of
MetLife and its subsidiaries, partnerships and joint ventures in which MetLife
has a majority voting interest or general partner interest with limited removal
rights by limited partners. All material intercompany accounts and transactions
have been eliminated.

The Company accounts for its investments in real estate joint ventures and
other limited partnership interests in which it does not have a controlling
interest, but more than a minimal interest, under the equity method of
accounting.

Minority interest related to consolidated entities included in other
liabilities was $245 and $274 at December 31, 1999 and 1998, respectively.
<PAGE> 9
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Certain amounts in the prior years' consolidated financial statements have
been reclassified to conform with the 1999 presentation.

INVESTMENTS

The Company's fixed maturity and equity securities are classified as
available-for-sale and are reported at their estimated fair value. Unrealized
investment gains and losses on securities are recorded as a separate component
of other comprehensive income (loss), net of policyholder related amounts and
deferred income taxes. The cost of fixed maturity and equity securities is
adjusted for impairments in value deemed to be other than temporary. These
adjustments are recorded as realized losses on investments. Realized gains and
losses on sales of securities are determined on a specific identification basis.
All security transactions are recorded on a trade date basis.

Mortgage loans on real estate are stated at amortized cost, net of
valuation allowances. Valuation allowances are established for the excess
carrying value of the mortgage loan over its estimated fair value when it is
probable that, based upon current information and events, the Company will be
unable to collect all amounts due under the contractual terms of the loan
agreement. Valuation allowances are based upon the present value of expected
future cash flows discounted at the loan's original effective interest rate or
the collateral value if the loan is collateral dependent. Interest income earned
on impaired loans is accrued on the net carrying value amount of the loan based
on the loan's effective interest rate.

Real estate, including related improvements, is stated at cost less
accumulated depreciation. Depreciation is provided on a straight-line basis over
the estimated useful life of the asset (typically 20 to 40 years). Cost is
adjusted for impairment whenever events or changes in circumstances indicate the
carrying amount of the asset may not be recoverable. Impaired real estate is
written down to estimated fair value with the impairment loss being included in
realized losses on investments. Impairment losses are based upon the estimated
fair value of real estate, which is generally computed using the present value
of expected future cash flows from the real estate discounted at a rate
commensurate with the underlying risks. Real estate acquired in satisfaction of
debt is recorded at estimated fair value at the date of foreclosure. Valuation
allowances on real estate held-for-sale are computed using the lower of
depreciated cost or estimated fair value, net of disposition costs.

Policy loans are stated at unpaid principal balances.

Short-term investments are stated at amortized cost, which approximates
fair value.

DERIVATIVE INSTRUMENTS

The Company uses derivative instruments to manage market risk through one
of four principal risk management strategies: the hedging of invested assets,
liabilities, portfolios of assets or liabilities and anticipated transactions.
The Company's derivative strategy employs a variety of instruments including
financial futures, financial forwards, interest rate and foreign currency swaps,
floors, foreign exchange contracts, caps and options.

The Company's derivative program is monitored by senior management. The
Company's risk of loss is typically limited to the fair value of its derivative
instruments and not to the notional or contractual amounts of these derivatives.
Risk arises from changes in the fair value of the underlying instruments and,
with respect to over-the-counter transactions, from the possible inability of
counterparties to meet the terms of the contracts. The Company has strict
policies regarding the financial stability and credit standing of its major
counterparties.
<PAGE> 10
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Company's derivative instruments are designated as hedges and are
highly correlated to the underlying risk at contract inception. The Company
monitors the effectiveness of its hedges throughout the contract term using an
offset ratio of 80 to 125 percent as its minimum acceptable threshold for hedge
effectiveness. Derivative instruments that lose their effectiveness are marked
to market through net investment income.

Gains or losses on financial futures contracts entered into in anticipation
of investment transactions are deferred and, at the time of the ultimate
investment purchase or disposition, recorded as an adjustment to the basis of
the purchased assets or to the proceeds on disposition. Gains or losses on
financial futures used in asset risk management are deferred and amortized into
net investment income over the remaining term of the investment. Gains or losses
on financial futures used in portfolio risk management are deferred and
amortized into net investment income or policyholder benefits over the remaining
life of the hedged sector of the underlying portfolio.

Financial forward contracts that are entered into to purchase securities
are marked to fair value through other comprehensive income (loss), similar to
the accounting for the investment security. Such contracts are accounted for at
settlement by recording the purchase of the specified securities at the
contracted value. Gains or losses resulting from the termination of forward
contracts are recognized immediately as a component of net investment income.

Interest rate and certain foreign currency swaps involve the periodic
exchange of payments without the exchange of underlying principal or notional
amounts. Net receipts or payments are accrued and recognized over the term of
the swap agreement as an adjustment to net investment income or other expense.
Gains or losses resulting from swap terminations are amortized over the
remaining term of the underlying asset or liability. Gains and losses on swaps
and certain foreign forward exchange contracts entered into in anticipation of
investment transactions are deferred and, at the time of the ultimate investment
purchase or disposition, reflected as an adjustment to the basis of the
purchased assets or to the proceeds of disposition. In the event the asset or
liability underlying a swap is disposed of, the swap position is closed
immediately and any gain or loss is recorded as an adjustment to the proceeds
from disposition.

The Company periodically enters into collars, which consist of purchased
put and written call options, to lock in unrealized gains on equity securities.
Collars are marked to market through other comprehensive income (loss), similar
to the accounting for the underlying equity securities. Purchased interest rate
caps and floors are used to offset the risk of interest rate changes related to
insurance liabilities. Premiums paid on floors, caps and options are split into
two components, time value and intrinsic value. Time value is amortized over the
life of the applicable derivative instrument. The intrinsic value and any gains
or losses relating to these derivative instruments adjust the basis of the
underlying asset or liability and are recognized as a component of net
investment income over the term of the underlying asset or liability being
hedged as an adjustment to the yield.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents.
<PAGE> 11
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS

Property, equipment and leasehold improvements, which are included in other
assets, are stated at cost, less accumulated depreciation and amortization.
Depreciation is determined using either the straight-line or
sum-of-the-years-digits method over the estimated useful lives of the assets.
Estimated lives range from 20 to 40 years for real estate and 5 to 15 years for
all other property and equipment. Accumulated depreciation of property and
equipment and accumulated amortization on leasehold improvements was $1,130 and
$1,098 at December 31, 1999 and 1998, respectively. Related depreciation and
amortization expense was $103, $116 and $103 for the years ended December 31,
1999, 1998 and 1997, respectively.

DEFERRED POLICY ACQUISITION COSTS

The costs of acquiring new insurance business that vary with, and are
primarily related to, the production of new business are deferred. Such costs,
which consist principally of commissions, agency and policy issue expenses, are
amortized with interest over the expected life of the contract for participating
traditional life, universal life and investment-type products. Generally,
deferred policy acquisition costs are amortized in proportion to the present
value of estimated gross margins or profits from investment, mortality, expense
margins and surrender charges. Interest rates are based on rates in effect at
the inception of the contracts. Actual gross margins or profits can vary from
management's estimates resulting in increases or decreases in the rate of
amortization. Management periodically updates these estimates and evaluates the
recoverability of deferred policy acquisition costs. When appropriate,
management revises its assumptions of the estimated gross margins or profits of
these contracts, and the cumulative amortization is re-estimated and adjusted by
a cumulative charge or credit to current operations.

Deferred policy acquisition costs for non-participating traditional life,
non-medical health and annuity policies with life contingencies are amortized in
proportion to anticipated premiums. Assumptions as to anticipated premiums are
made at the date of policy issuance and are consistently applied during the
lives of the contracts. Deviations from estimated experience are included in
operations when they occur. For these contracts, the amortization period is
typically the estimated life of the policy.

Deferred policy acquisition costs related to internally replaced contracts
are expensed at date of replacement.

Deferred policy acquisition costs for property and casualty insurance
contracts, which are primarily comprised of commissions and certain underwriting
expenses, are deferred and amortized on a pro rata basis over the applicable
contract term or reinsurance treaty.

On September 28, 1999, the Company's Board of Directors adopted a plan of
reorganization. Consequently, in the fourth quarter of 1999, the Company was
able to commit to state insurance regulatory authorities that it would establish
investment sub-segments to further align investments with the traditional
individual life business of the Individual segment. As a result, future
dividends for the traditional individual life business will be determined based
on the results of the new investment sub-segments. Additionally, estimated
future gross margins used to determine amortization of deferred policy
acquisition costs and the amount of unrealized investment gains and losses
relating to these products are based on investments in the new sub-segments.
Using the investments in the sub-segments to determine estimated gross margins
and unrealized investment gains and losses increased 1999 amortization of
deferred policy acquisition costs by $56 (net of income taxes of $32) and
decreased other comprehensive loss in 1999 by $123 (net of income taxes of $70).
<PAGE> 12
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Information regarding deferred policy acquisition costs is as follows:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Balance at January 1.................................. $ 6,538 $6,436 $7,227
Capitalized during the year........................... 1,160 1,025 1,000
------- ------ ------
Total............................................ 7,698 7,461 8,227
------- ------ ------
Amortization allocated to:
Net realized investment gains (losses).............. (46) 240 70
Unrealized investment gains (losses)................ (1,628) (216) 727
Other expenses...................................... 862 587 771
------- ------ ------
Total amortization............................... (812) 611 1,568
------- ------ ------
Dispositions and other................................ (18) (312) (223)
------- ------ ------
Balance at December 31................................ $ 8,492 $6,538 $6,436
======= ====== ======
</TABLE>

Amortization of deferred policy acquisition costs is allocated to (1)
realized investment gains and losses to provide consolidated statement of income
information regarding the impact of such gains and losses on the amount of the
amortization, (2) unrealized investment gains and losses to provide information
regarding the amount of deferred policy acquisition costs that would have been
amortized if such gains and losses had been realized and (3) other expenses to
provide amounts related to the gross margins or profits originating from
transactions other than investment gains and losses.

Realized investment gains and losses related to certain products have a
direct impact on the amortization of deferred policy acquisition costs.
Presenting realized investment gains and losses net of related amortization of
deferred policy acquisition costs provides information useful in evaluating the
operating performance of the Company. This presentation may not be comparable to
presentations made by other insurers.

INTANGIBLE ASSETS

The excess of cost over the fair value of net assets acquired ("goodwill")
and other intangible assets, including the value of business acquired, are
included in other assets. Goodwill is amortized on a straight-line basis over a
period ranging from 10 to 30 years. The Company continually reviews goodwill to
assess recoverability from future operations using undiscounted cash flows.
Impairments are recognized in operating results if a permanent diminution in
value is deemed to have occurred. Other intangible assets are amortized over the
expected policy or contract duration in relation to the present value of
estimated gross profits from such policies and contracts.
<PAGE> 13
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
GOODWILL OTHER INTANGIBLE ASSETS
-------------------- --------------------------
1999 1998 1997 1999 1998 1997
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
YEARS ENDED DECEMBER 31
Net Balance at January 1.............. $404 $359 $136 $1,006 $1,055 $ 767
Acquisitions.......................... 237 67 240 156 39 355
Amortization.......................... (30) (22) (17) (114) (88) (67)
---- ---- ---- ------ ------ ------
Net Balance at December 31............ $611 $404 $359 $1,048 $1,006 $1,055
==== ==== ==== ====== ====== ======
DECEMBER 31
Accumulated amortization.............. $118 $ 88 $ 392 $ 278
==== ==== ====== ======
</TABLE>

FUTURE POLICY BENEFITS AND POLICYHOLDER ACCOUNT BALANCES

Future policy benefit liabilities for participating traditional life
insurance policies are equal to the aggregate of (a) net level premium reserves
for death and endowment policy benefits (calculated based upon the nonforfeiture
interest rate, ranging from 3% to 10%, and mortality rates guaranteed in
calculating the cash surrender values described in such contracts), (b) the
liability for terminal dividends and (c) premium deficiency reserves, which are
established when the liabilities for future policy benefits plus the present
value of expected future gross premiums are insufficient to provide for expected
future policy benefits and expenses after deferred policy acquisition costs are
written off.

Future policy benefit liabilities for traditional annuities are equal to
accumulated contractholder fund balances during the accumulation period and the
present value of expected future payments after annuitization. Interest rates
used in establishing such liabilities range from 3% to 8%. Future policy benefit
liabilities for non-medical health insurance are calculated using the net level
premium method and assumptions as to future morbidity, withdrawals and interest,
which provide a margin for adverse deviation. Interest rates used in
establishing such liabilities range from 3% to 10%. Future policy benefit
liabilities for disabled lives are estimated using the present value of benefits
method and experience assumptions as to claim terminations, expenses and
interest. Interest rates used in establishing such liabilities range from 3% to
10%.

Policyholder account balances for universal life and investment-type
contracts are equal to the policy account values, which consist of an
accumulation of gross premium payments plus credited interest, ranging from 2%
to 17%, less expenses, mortality charges and withdrawals.

The liability for unpaid claims and claim expenses for property and
casualty insurance represents the amount estimated for claims that have been
reported but not settled and claims incurred but not reported. Liabilities for
unpaid claims are estimated based upon the Company's historical experience and
other actuarial assumptions that consider the effects of current developments,
anticipated trends and risk management programs. Revisions of these estimates
are included in operations in the year such refinements are made.

RECOGNITION OF INSURANCE REVENUE AND RELATED BENEFITS

Premiums related to traditional life and annuity policies with life
contingencies are recognized as revenues when due. Benefits and expenses are
provided against such revenues to recognize profits over the estimated lives of
the policies. When premiums are due over a significantly shorter period than the
period over which benefits are provided, any excess profit is deferred and
recognized into operations in a constant relationship to insurance in-force or,
for annuities, the amount of expected future policy benefit payments.
<PAGE> 14
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Premiums related to non-medical health contracts are recognized on a pro
rata basis over the applicable contract term.

Premiums related to universal life and investment-type products are
credited to policyholder account balances. Revenues from such contracts consist
of amounts assessed against policyholder account balances for mortality, policy
administration and surrender charges. Amounts that are charged to operations
include interest credited and benefit claims incurred in excess of related
policyholder account balances.

Premiums related to property and casualty contracts are recognized as
revenue on a pro rata basis over the applicable contract term. Unearned premiums
are included in other liabilities.

DIVIDENDS TO POLICYHOLDERS

Dividends to policyholders are determined annually by the board of
directors. The aggregate amount of policyholders' dividends is related to actual
interest, mortality, morbidity and expense experience for the year, as well as
management's judgment as to the appropriate level of statutory surplus to be
retained by MetLife and its insurance subsidiaries.

DIVIDEND RESTRICTIONS

MetLife, when it converts from a mutual life insurance company to a stock
life insurance company, may be restricted as to the amounts it may pay as
dividends to MetLife, Inc. Under the New York Insurance Law, the Superintendent
has broad discretion to determine whether the financial condition of a stock
life insurance company would support the payment of dividends to its
shareholders. The Department has established informal guidelines for the
Superintendent's determinations which focus upon, among other things, the
overall financial condition and profitability of the insurer under statutory
accounting practices.

PARTICIPATING BUSINESS

Participating business represented approximately 19% and 21% of the
Company's life insurance in-force, and 84% and 81% of the number of life
insurance policies in-force, at December 31, 1999 and 1998, respectively.
Participating policies represented approximately 42% and 44%, 39% and 40%, and
41% and 41% of gross and net life insurance premiums for the years ended
December 31, 1999, 1998 and 1997, respectively.

INCOME TAXES

MetLife and its includable life insurance and non-life insurance
subsidiaries file a consolidated U.S. federal income tax return in accordance
with the provisions of the Internal Revenue Code, as amended (the "Code"). Under
the Code, the amount of federal income tax expense incurred by mutual life
insurance companies includes an equity tax calculated based upon a prescribed
formula that incorporates a differential earnings rate between stock and mutual
life insurance companies. MetLife will not be subject to the equity tax when it
converts to a stock life insurance company. The future tax consequences of
temporary differences between financial reporting and tax bases of assets and
liabilities are measured at the balance sheet dates and are recorded as deferred
income tax assets and liabilities.

REINSURANCE

The Company has reinsured certain of its life insurance and property and
casualty insurance contracts with other insurance companies under various
agreements. Amounts due from
<PAGE> 15
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

reinsurers are estimated based upon assumptions consistent with those used in
establishing the liabilities related to the underlying reinsured contracts.
Policy and contract liabilities are reported gross of reinsurance credits.
Deferred policy acquisition costs are reduced by amounts recovered under
reinsurance contracts. Amounts received from reinsurers for policy
administration are reported in other revenues.

SEPARATE ACCOUNTS

Separate accounts are established in conformity with insurance laws and are
generally not chargeable with liabilities that arise from any other business of
the Company. Separate account assets are subject to general account claims only
to the extent the value of such assets exceeds the separate account liabilities.
Investments (stated at estimated fair value) and liabilities of the separate
accounts are reported separately as assets and liabilities. Deposits to separate
accounts, investment income and realized and unrealized gains and losses on the
investments of the separate accounts accrue directly to contractholders and,
accordingly, are not reflected in the Company's consolidated statements of
income and cash flows. Mortality, policy administration and surrender charges to
all separate accounts are included in revenues. See Note 6.

FOREIGN CURRENCY TRANSLATION

Balance sheet accounts of foreign operations are translated at the exchange
rates in effect at each year-end and income and expense accounts are translated
at the average rates of exchange prevailing during the year. The local
currencies of foreign operations are the functional currencies unless the local
economy is highly inflationary. Translation adjustments are charged or credited
directly to other comprehensive income (loss). Gains and losses from foreign
currency transactions are reported in other expenses and were insignificant for
all years presented.

EXTRAORDINARY ITEM -- DEMUTUALIZATION EXPENSE

The accompanying consolidated statements of income include extraordinary
charges of $225 (net of income taxes of $35) and $4 (net of income taxes of $2)
for the years ended December 31, 1999 and 1998, respectively, related to costs
associated with the demutualization.

APPLICATION OF ACCOUNTING PRONOUNCEMENTS

Effective January 1, 1999, the Company adopted Statement of Position
("SOP") 98-5, Reporting on the Costs of Start-Up Activities ("SOP 98-5"). SOP
98-5 broadly defines start-up activities. SOP 98-5 requires costs of start-up
activities and organization costs to be expensed as incurred. Adoption of SOP
98-5 did not have a material effect on the Company's consolidated financial
statements.

Effective January 1, 1999, the Company adopted SOP 98-1, Accounting for the
Costs of Computer Software Developed or Obtained for Internal Use ("SOP 98-1").
SOP 98-1 provides guidance for determining when an entity should capitalize or
expense external and internal costs of computer software developed or obtained
for internal use. Adoption of the provisions of SOP 98-1 had the effect of
increasing other assets by $82 at December 31, 1999.

Effective January 1, 1999, the Company adopted SOP 97-3, Accounting for
Insurance and Other Enterprises for Insurance Related Assessments ("SOP 97-3").
SOP 97-3 provides guidance on accounting by insurance and other enterprises for
assessments related to insurance activities including recognition, measurement
and disclosure of guaranty fund and other insurance related
<PAGE> 16
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

assessments. Adoption of SOP 97-3 did not have a material effect on the
Company's consolidated financial statements.

In 1998, the Company adopted the provisions of Statement of Financial
Accounting Standards No. 125, Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities ("SFAS 125") which were
deferred by SFAS 127, Deferral of the Effective Date of Certain Provisions of
FASB Statement No. 125. The deferred provisions provide accounting and reporting
standards related to repurchase agreements, dollar rolls, securities lending and
similar transactions. Adoption of the provisions had the effect of increasing
assets and liabilities by $3,769 at December 31, 1998 and increasing other
revenues and other expenses by $266 for the year ended December 31, 1998.

During 1997, the Company changed to the retrospective interest method of
accounting for investment income on structured notes in accordance with Emerging
Issues Task Force Consensus No. 96-12, Recognition of Interest Income and
Balance Sheet Classification of Structured Notes. This accounting change
increased 1997 net investment income by $175, which included an immaterial
amount related to prior years.

In June 1999, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 137, Accounting for Derivative Instruments
and Hedging Activities -- Deferral of the Effective Date of FASB Statement No.
133 ("SFAS 137"). SFAS 137 defers the provisions of Statement of Financial
Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging
Activities ("SFAS 133") until January 1, 2001. SFAS 133 requires, among other
things, that all derivatives be recognized in the consolidated balance sheets as
either assets or liabilities and measured at fair value. The corresponding
derivative gains and losses should be reported based upon the hedge
relationship, if such a relationship exists. Changes in the fair value of
derivatives that are not designated as hedges or that do not meet the hedge
accounting criteria in SFAS 133 are required to be reported in income. The
Company is in the process of quantifying the impact of SFAS 133 on its
consolidated financial statements.

In October 1998, the American Institute of Certified Public Accountants
("AICPA") issued Statement of Position ("SOP") 98-7, Accounting for Insurance
and Reinsurance Contracts That Do Not Transfer Insurance Risk ("SOP 98-7"). SOP
98-7 provides guidance on the method of accounting for insurance and reinsurance
contracts that do not transfer insurance risk, defined in the SOP as the deposit
method. SOP 98-7 classifies insurance and reinsurance contracts for which the
deposit method is appropriate into those that 1) transfer only significant
timing risk, 2) transfer only significant underwriting risk, 3) transfer neither
significant timing or underwriting risk and 4) have an indeterminate risk. The
Company is required to adopt SOP 98-7 as of January 1, 2000. Adoption of SOP
98-7 is not expected to have a material effect on the Company's consolidated
financial statements.
<PAGE> 17
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

2. INVESTMENTS

The components of net investment income were as follows:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Fixed maturities.................................... $ 6,766 $ 6,563 $ 6,445
Equity securities................................... 40 78 50
Mortgage loans on real estate....................... 1,479 1,572 1,684
Real estate and real estate joint ventures.......... 1,426 1,529 1,718
Policy loans........................................ 340 387 368
Other limited partnership interests................. 199 196 302
Cash, cash equivalents and short-term investments... 173 187 169
Other............................................... 501 841 368
------- ------- -------
10,924 11,353 11,104
Less: Investment expenses........................... 1,108 1,125 1,613
------- ------- -------
$ 9,816 $10,228 $ 9,491
======= ======= =======
</TABLE>

Net realized investment gains (losses), including changes in valuation
allowances, were as follows:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Fixed maturities........................................ $(538) $ 573 $ 118
Equity securities....................................... 99 994 224
Mortgage loans on real estate........................... 28 23 56
Real estate and real estate joint ventures.............. 265 424 446
Other limited partnership interests..................... 33 13 12
Sales of businesses..................................... -- 531 139
Other................................................... (24) 71 23
----- ------ ------
(137) 2,629 1,018
Amounts allocable to:
Future policy benefit loss recognition................ -- (272) (126)
Deferred policy acquisition costs..................... 46 (240) (70)
Participating contracts............................... 21 (96) (35)
----- ------ ------
$ (70) $2,021 $ 787
===== ====== ======
</TABLE>

Realized investment gains (losses) have been reduced by (1) additions to
future policy benefits resulting from the need to establish additional
liabilities due to the recognition of investment gains, (2) deferred policy
acquisition cost amortization to the extent that such amortization results from
realized investment gains and losses, and (3) additions to participating
contractholder accounts when amounts equal to such investment gains and losses
are credited to the contractholders' accounts. This presentation may not be
comparable to presentations made by other insurers.
<PAGE> 18
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The components of net unrealized investment gains (losses), included in
accumulated other comprehensive income (loss), were as follows:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Fixed maturities.................................... $(1,828) $ 4,809 $ 4,766
Equity securities................................... 875 832 1,605
Other invested assets............................... 165 154 294
------- ------- -------
(788) 5,795 6,665
------- ------- -------
Amounts allocable to:
Future policy benefit loss recognition............ (249) (2,248) (2,189)
Deferred policy acquisition costs................. 697 (931) (1,147)
Participating contracts........................... (118) (212) (312)
Deferred income taxes............................... 161 (864) (1,119)
------- ------- -------
491 (4,255) (4,767)
------- ------- -------
$ (297) $ 1,540 $ 1,898
======= ======= =======
</TABLE>

The changes in net unrealized investment gains (losses) were as follows:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Balance at January 1.................................. $ 1,540 $1,898 $1,028
Unrealized investment gains (losses) during the
year................................................ (6,583) (870) 3,402
Unrealized investment (gains) losses relating to:
Future policy benefit loss recognition.............. 1,999 (59) (970)
Deferred policy acquisition costs................... 1,628 216 (727)
Participating contracts............................. 94 100 (303)
Deferred income taxes................................. 1,025 255 (532)
------- ------ ------
Balance at December 31................................ $ (297) $1,540 $1,898
======= ====== ======
Net change in unrealized investment gains (losses).... $(1,837) $ (358) $ 870
======= ====== ======
</TABLE>
<PAGE> 19
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

FIXED MATURITIES AND EQUITY SECURITIES

Fixed maturities and equity securities at December 31, 1999 were as
follows:

<TABLE>
<CAPTION>
COST OR GROSS UNREALIZED
AMORTIZED ---------------- ESTIMATED
COST GAIN LOSS FAIR VALUE
--------- ---- ---- ----------
<S> <C> <C> <C> <C>
Fixed Maturities:
Bonds:
U.S. Treasury securities and
obligations of U.S. government
corporations and agencies.......... $ 5,990 $ 456 $ 147 $ 6,299
States and political subdivisions.... 1,583 4 45 1,542
Foreign governments.................. 4,090 210 94 4,206
Corporate............................ 47,505 585 1,913 46,177
Mortgage and asset-backed
securities......................... 27,396 112 847 26,661
Other................................ 12,235 313 462 12,086
------- ------ ------ -------
98,799 1,680 3,508 96,971
Redeemable preferred stocks............. 10 -- -- 10
------- ------ ------ -------
$98,809 $1,680 $3,508 $96,981
======= ====== ====== =======
Equity Securities:
Common stocks........................... $ 980 $ 921 $ 35 $ 1,866
Nonredeemable preferred stocks.......... 151 -- 11 140
------- ------ ------ -------
$ 1,131 $ 921 $ 46 $ 2,006
======= ====== ====== =======
</TABLE>

Fixed maturities and equity securities at December 31, 1998 were as
follows:

<TABLE>
<CAPTION>
COST OR GROSS UNREALIZED
AMORTIZED ----------------- ESTIMATED
COST GAIN LOSS FAIR VALUE
--------- ---- ---- ----------
<S> <C> <C> <C> <C>
Fixed Maturities:
Bonds:
U.S. Treasury securities and
obligations of U.S. government
corporations and agencies.......... $ 6,640 $1,117 $ 10 $ 7,747
States and political subdivisions.... 597 26 -- 623
Foreign governments.................. 3,435 254 88 3,601
Corporate............................ 46,377 2,471 260 48,588
Mortgage and asset-backed
securities......................... 26,456 569 46 26,979
Other................................ 12,438 1,069 293 13,214
------- ------ ---- --------
95,943 5,506 697 100,752
Redeemable preferred stocks............. 15 -- -- 15
------- ------ ---- --------
$95,958 $5,506 $697 $100,767
======= ====== ==== ========
Equity Securities:
Common stocks........................... $ 1,286 $ 923 $ 77 $ 2,132
Nonredeemable preferred stocks.......... 222 4 18 208
------- ------ ---- --------
$ 1,508 $ 927 $ 95 $ 2,340
======= ====== ==== ========
</TABLE>
<PAGE> 20
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Company held foreign currency derivatives with notional amounts of
$4,002 and $716 to hedge the exchange rate risk associated with foreign bonds at
December 31, 1999 and 1998, respectively. The Company also held options with
fair values of $(11) to hedge the market value of common stocks at December 31,
1998.

At December 31, 1999, fixed maturities held by the Company that were below
investment grade or not rated by an independent rating agency had an estimated
fair value of $8,813. At December 31, 1999, non-income producing fixed
maturities were insignificant.

The amortized cost and estimated fair value of bonds at December 31, 1999,
by contractual maturity date, are shown below:

<TABLE>
<CAPTION>
AMORTIZED ESTIMATED
COST FAIR VALUE
--------- ----------
<S> <C> <C>
Due in one year or less............................... $ 3,180 $ 3,217
Due after one year through five years................. 18,152 18,061
Due after five years through ten years................ 23,755 23,114
Due after ten years................................... 26,316 25,918
------- -------
71,403 70,310
Mortgage and asset-backed securities.................. 27,396 26,661
------- -------
$98,799 $96,971
======= =======
</TABLE>

Fixed maturities not due at a single maturity date have been included in
the above table in the year of final maturity. Actual maturities may differ from
contractual maturities due to the exercise of prepayment options.

Sales of securities were as follows:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Securities classified as available-for-sale:
Proceeds.......................................... $59,852 $46,913 $69,275
Gross realized gains.............................. $ 605 $ 2,053 $ 965
Gross realized losses............................. $ 911 $ 486 $ 627
Fixed maturities classified as held-to-maturity:
Proceeds.......................................... $ -- $ -- $ 352
Gross realized gains.............................. $ -- $ -- $ 5
Gross realized losses............................. $ -- $ -- $ 1
</TABLE>

Gross realized losses above exclude writedowns recorded during 1999 for
permanently impaired available-for-sale securities of $133.

During 1997, fixed maturities with an amortized cost of $11,682 were
transferred from held-to-maturity to available-for-sale. Other comprehensive
income at the date of reclassification was increased by $198 excluding the
effects of deferred income taxes and policyholder related amounts.

Excluding investments in U.S. governments and agencies, the Company is not
exposed to any significant concentration of credit risk in its fixed maturities
portfolio.
<PAGE> 21
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

SECURITIES LENDING PROGRAM

The Company participates in securities lending programs whereby large
blocks of securities, which are returnable to the Company on short notice and
included in investments, are loaned to third parties, primarily major brokerage
firms. The Company requires a minimum of 102% of the fair value of the loaned
securities to be separately maintained as collateral for the loans. Securities
with a cost or amortized cost of $6,458 and $4,005 and estimated fair value of
$6,391 and $4,552 were on loan under the program at December 31, 1999 and 1998,
respectively. The Company was liable for cash collateral under its control of
$6,461 and $3,769 at December 31, 1999 and 1998, respectively. This liability is
included in other liabilities. Security collateral on deposit from securities
borrowers is returnable to them on short notice and is not reflected in the
consolidated financial statements.

STATUTORY DEPOSITS

The Company had investment assets on deposit with regulatory agencies of
$476 and $466 at December 31, 1999 and 1998, respectively.

MORTGAGE LOANS ON REAL ESTATE

Mortgage loans were categorized as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------------------
1999 1998
------------------ ------------------
AMOUNT PERCENT AMOUNT PERCENT
------ ------- ------ -------
<S> <C> <C> <C> <C>
Commercial mortgage loans.................. $14,931 75% $12,503 74%
Agricultural mortgage loans................ 4,816 24% 4,256 25%
Residential mortgage loans................. 82 1% 241 1%
------- --- ------- ---
19,829 100% 17,000 100%
=== ===
Less: Valuation allowances................. 90 173
------- -------
$19,739 $16,827
======= =======
</TABLE>

Mortgage loans on real estate are collateralized by properties primarily
located throughout the United States. At December 31, 1999, approximately 16%,
8% and 8% of the properties were located in California, New York and Florida,
respectively. Generally, the Company (as the lender) requires that a minimum of
one-fourth of the purchase price of the underlying real estate be paid by the
borrower.

Certain of the Company's real estate joint ventures have mortgage loans
with the Company. The carrying values of such mortgages were $547 and $606 at
December 31, 1999 and 1998, respectively.
<PAGE> 22
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Changes in mortgage loan valuation allowances were as follows:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Balance at January 1................................. $ 173 $ 289 $ 469
Additions............................................ 40 40 61
Deductions for writedowns and dispositions........... (123) (130) (241)
Deductions for disposition of affiliates............. -- (26) --
----- ----- -----
Balance at December 31............................... $ 90 $ 173 $ 289
===== ===== =====
</TABLE>

A portion of the Company's mortgage loans on real estate was impaired and
consisted of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------
1999 1998
---- ----
<S> <C> <C>
Impaired mortgage loans with valuation allowances.......... $540 $ 823
Impaired mortgage loans without valuation allowances....... 437 375
---- ------
977 1,198
Less: Valuation allowances................................. 83 149
---- ------
$894 $1,049
==== ======
</TABLE>

The average investment in impaired mortgage loans on real estate was
$1,134, $1,282 and $1,680 for the years ended December 31, 1999, 1998 and 1997,
respectively. Interest income on impaired mortgages was $101, $109 and $110 for
the years ended December 31, 1999, 1998 and 1997, respectively.

The investment in restructured mortgage loans on real estate was $980 and
$1,140 at December 31, 1999 and 1998, respectively. Interest income of $80, $74
and $91 was recognized on restructured loans for the years ended December 31,
1999, 1998 and 1997, respectively. Gross interest income that would have been
recorded in accordance with the original terms of such loans amounted to $92,
$87 and $116 for the years ended December 31, 1999, 1998 and 1997, respectively.

Mortgage loans on real estate with scheduled payments of 60 days (90 days
for agriculture mortgages) or more past due or in foreclosure had an amortized
cost of $44 and $65 at December 31, 1999 and 1998, respectively.
<PAGE> 23
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

REAL ESTATE AND REAL ESTATE JOINT VENTURES

Real estate and real estate joint ventures consisted of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1999 1998
---- ----
<S> <C> <C>
Real estate and real estate joint ventures
held-for-investment....................................... $5,440 $6,301
Impairments................................................. (289) (408)
------ ------
5,151 5,893
------ ------
Real estate and real estate joint ventures held-for-sale.... 719 546
Impairments................................................. (187) (119)
Valuation allowance......................................... (34) (33)
------ ------
498 394
------ ------
$5,649 $6,287
====== ======
</TABLE>

Accumulated depreciation on real estate was $2,235 and $2,065 at December
31, 1999 and 1998, respectively. Related depreciation expense was $247, $282 and
$338 for the years ended December 31, 1999, 1998 and 1997, respectively.

Real estate and real estate joint ventures were categorized as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------
1999 1998
----------------- -----------------
AMOUNT PERCENT AMOUNT PERCENT
------ ------- ------ -------
<S> <C> <C> <C> <C>
Office........................................ $3,846 68% $4,265 68%
Retail........................................ 587 10% 640 10%
Apartments.................................... 474 8% 418 7%
Land.......................................... 258 5% 313 5%
Agriculture................................... 96 2% 195 3%
Other......................................... 388 7% 456 7%
------ --- ------ ---
$5,649 100% $6,287 100%
====== === ====== ===
</TABLE>

The Company's real estate holdings are primarily located throughout the
United States. At December 31, 1999, approximately 25%, 24% and 10% of the
Company's real estate holdings were located in New York, California and Texas,
respectively.

Changes in real estate and real estate joint ventures held-for-sale
valuation allowance were as follows:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Balance at January 1....................................... $ 33 $110 $ 661
Additions charged (credited) to operations................. 36 (5) (76)
Deductions for writedowns and dispositions................. (35) (72) (475)
---- ---- -----
Balance at December 31..................................... $ 34 $ 33 $ 110
==== ==== =====
</TABLE>

Investment income related to impaired real estate and real estate joint
ventures held-for-investment was $61, $105 and $28 for the years ended December
31, 1999, 1998 and 1997, respectively. Investment income related to real estate
and real estate joint ventures held-for-sale
<PAGE> 24
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

was $14, $3 and $11 for the years ended December 31, 1999, 1998 and 1997,
respectively. The carrying value of non-income producing real estate and real
estate joint ventures was $22 and $1 at December 31, 1999 and 1998,
respectively.

The Company owned real estate acquired in satisfaction of debt of $47 and
$154 at December 31, 1999 and 1998, respectively.

Real estate of $37, $69 and $151 was acquired in satisfaction of debt
during the years ended December 31, 1999, 1998 and 1997, respectively.

LEVERAGED LEASES

Leveraged leases, included in other invested assets, consisted of the
following:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1999 1998
---- ----
<S> <C> <C>
Investment............................................... $1,016 $1,067
Estimated residual values................................ 559 607
------ ------
1,575 1,674
Unearned income.......................................... (417) (471)
------ ------
$1,158 $1,203
====== ======
</TABLE>

The investment amounts set forth above are generally due in monthly
installments. The payment periods generally range from four to 15 years, but in
certain circumstances are as long as 30 years. Average yields range from 7% to
12%. These receivables are generally collateralized by the related property.

3. DERIVATIVE INSTRUMENTS

The table below provides a summary of the carrying value, notional amount
and current market or fair value of derivative financial instruments (other than
equity options) held at December 31, 1999 and 1998:

<TABLE>
<CAPTION>
1999 1998
------------------------------------------ ------------------------------------------
CURRENT MARKET CURRENT MARKET
OR FAIR VALUE OR FAIR VALUE
CARRYING NOTIONAL -------------------- CARRYING NOTIONAL --------------------
VALUE AMOUNT ASSETS LIABILITIES VALUE AMOUNT ASSETS LIABILITIES
-------- -------- ------ ----------- -------- -------- ------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Financial futures.................. $ 27 $ 3,140 $37 $ 10 $ 3 $ 2,190 $ 8 $ 6
Foreign exchange contracts......... -- -- -- -- -- 136 -- 2
Interest rate swaps................ (32) 1,316 11 40 (9) 1,621 17 50
Foreign currency swaps............. -- 4,002 26 103 (1) 580 3 62
Caps............................... 1 12,376 3 -- -- 8,391 -- --
---- ------- --- ---- --- ------- --- ----
Total contractual commitments...... $ (4) $20,834 $77 $153 $(7) $12,918 $28 $120
==== ======= === ==== === ======= === ====
</TABLE>
<PAGE> 25
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following is a reconciliation of the notional amounts by derivative
type and strategy at December 31, 1999 and 1998:

<TABLE>
<CAPTION>
DECEMBER 31, 1998 TERMINATIONS/ DECEMBER 31, 1999
NOTIONAL AMOUNT ADDITIONS MATURITIES NOTIONAL AMOUNT
----------------- --------- ------------- -----------------
<S> <C> <C> <C> <C>
BY DERIVATIVE TYPE
Financial futures................... $ 2,190 $18,259 $17,309 $ 3,140
Foreign exchange contracts.......... 136 702 838 --
Interest rate swaps................. 1,621 429 734 1,316
Foreign currency swaps.............. 580 3,501 79 4,002
Caps................................ 8,391 5,860 1,875 12,376
------- ------- ------- -------
Total contractual commitments....... $12,918 $28,751 $20,835 $20,834
======= ======= ======= =======
BY STRATEGY
Liability hedging................... $ 8,741 $ 5,865 $ 2,035 $12,571
Invested asset hedging.............. 864 4,288 937 4,215
Portfolio hedging................... 2,830 13,920 14,729 2,021
Anticipated transaction hedging..... 483 4,678 3,134 2,027
------- ------- ------- -------
Total contractual commitments....... $12,918 $28,751 $20,835 $20,834
======= ======= ======= =======
</TABLE>

The following table presents the notional amounts of derivative financial
instruments by maturity at December 31, 1999:

<TABLE>
<CAPTION>
REMAINING LIFE
-------------------------------------------------------------------
ONE YEAR AFTER ONE YEAR AFTER FIVE YEARS
OR LESS THROUGH FIVE YEARS THROUGH TEN YEARS AFTER TEN YEARS TOTAL
-------- ------------------ ----------------- --------------- -----
<S> <C> <C> <C> <C> <C>
Financial futures......... $3,140 $ -- $ -- $ -- $ 3,140
Interest rate swaps....... 833 483 -- -- 1,316
Foreign currency swaps.... 7 3,371 503 121 4,002
Caps...................... 3,426 8,930 20 -- 12,376
------ ------- ---- ---- -------
Total contractual
commitments............. $7,406 $12,784 $523 $121 $20,834
====== ======= ==== ==== =======
</TABLE>

In addition to the derivative instruments above, the Company uses equity
option contracts as invested asset hedges. There were ninety-two thousand equity
option contracts outstanding with a carrying value of $(11) and a market value
of $(11) at December 31, 1998.

4. FAIR VALUE INFORMATION

The estimated fair values of financial instruments have been determined by
using available market information and the valuation methodologies described
below. Considerable judgment is often required in interpreting market data to
develop estimates of fair value. Accordingly, the estimates presented herein may
not necessarily be indicative of amounts that could be realized in a current
market exchange. The use of different assumptions or valuation methodologies may
have a material effect on the estimated fair value amounts.
<PAGE> 26
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Amounts related to the Company's financial instruments were as follows:

<TABLE>
<CAPTION>
NOTIONAL CARRYING ESTIMATED
DECEMBER 31, 1999 AMOUNT VALUE FAIR VALUE
- ----------------- -------- -------- ----------
<S> <C> <C> <C>
Assets:
Fixed maturities.................................. $96,981 $96,981
Equity securities................................. 2,006 2,006
Mortgage loans on real estate..................... 19,739 19,452
Policy loans...................................... 5,598 5,618
Short-term investments............................ 3,055 3,055
Cash and cash equivalents......................... 2,789 2,789
Mortgage loan commitments......................... $465 -- (7)
Liabilities:
Policyholder account balances..................... 37,170 36,893
Short-term debt................................... 4,208 4,208
Long-term debt.................................... 2,514 2,466
Investment collateral............................. 6,451 6,451
</TABLE>

<TABLE>
<CAPTION>
NOTIONAL CARRYING ESTIMATED
DECEMBER 31, 1998 AMOUNT VALUE FAIR VALUE
- ----------------- -------- -------- ----------
<S> <C> <C> <C>
Assets:
Fixed maturities................................. $100,767 $100,767
Equity securities................................ 2,340 2,340
Mortgage loans on real estate.................... 16,827 17,793
Policy loans..................................... 5,600 6,143
Short-term investments........................... 1,369 1,369
Cash and cash equivalents........................ 3,301 3,301
Mortgage loan commitments........................ $472 -- 14
Liabilities:
Policyholder account balances.................... 37,448 37,664
Short-term debt.................................. 3,585 3,585
Long-term debt................................... 2,903 3,006
Investment collateral............................ 3,769 3,769
</TABLE>

The methods and assumptions used to estimate the fair values of financial
instruments are summarized as follows:

FIXED MATURITIES AND EQUITY SECURITIES

The fair value of fixed maturities and equity securities are based upon
quotations published by applicable stock exchanges or received from other
reliable sources. For securities in which the market values were not readily
available, fair values were estimated using quoted market prices of comparable
investments.

MORTGAGE LOANS ON REAL ESTATE AND MORTGAGE LOAN COMMITMENTS

Fair values for mortgage loans on real estate are estimated by discounting
expected future cash flows, using current interest rates for similar loans with
similar credit risk. For mortgage loan commitments, the estimated fair value is
the net premium or discount of the commitments.
<PAGE> 27
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

POLICY LOANS

Fair values for policy loans are estimated by discounting expected future
cash flows using U.S. treasury rates to approximate interest rates and the
Company's past experiences to project patterns of loan accrual and repayment
characteristics.

CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

The carrying values for cash and cash equivalents and short-term
investments approximated fair market values due to the short-term maturities of
these instruments.

POLICYHOLDER ACCOUNT BALANCES

The fair value of policyholder account balances are estimated by
discounting expected future cash flows, based on interest rates currently being
offered for similar contracts with maturities consistent with those remaining
for the agreements being valued.

SHORT-TERM AND LONG-TERM DEBT AND INVESTMENT COLLATERAL

The fair values of short-term and long-term debt and investment collateral
are determined by discounting expected future cash flows, using risk rates
currently available for debt with similar terms and remaining maturities.

DERIVATIVE INSTRUMENTS

The fair value of derivative instruments, including financial futures,
financial forwards, interest rate and foreign currency swaps, floors, foreign
exchange contracts, caps and options are based upon quotations obtained from
dealers or other reliable sources. See Note 3 for derivative fair value
disclosures.

5. EMPLOYEE BENEFIT PLANS

PENSION BENEFIT AND OTHER BENEFIT PLANS

The Company is both the sponsor and administrator of defined benefit
pension plans covering all eligible employees and sales representatives of
MetLife and certain of its subsidiaries. Retirement benefits are based upon
years of credited service and final average earnings history.

The Company also provides certain postemployment benefits and certain
postretirement health care and life insurance benefits for retired employees
through insurance contracts. Substantially all of the Company's employees may,
in accordance with the plans applicable to the
<PAGE> 28
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

postretirement benefits, become eligible for these benefits if they attain
retirement age, with sufficient service, while working for the Company.

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------
PENSION BENEFITS OTHER BENEFITS
---------------- ----------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Change in projected benefit obligation:
Projected benefit obligation at beginning of year.... $3,920 $3,573 $1,708 $1,763
Service cost....................................... 100 90 28 31
Interest cost...................................... 271 257 107 114
Actuarial (gains) losses........................... (260) 212 (281) (74)
Divestitures, curtailments and terminations........ (22) 24 10 (13)
Change in benefits................................. -- 12 -- --
Benefits paid........................................ (272) (248) (89) (113)
------ ------ ------ ------
Projected benefit obligation at end of year.......... 3,737 3,920 1,483 1,708
------ ------ ------ ------
Change in plan assets:
Contract value of plan assets at beginning of year... 4,403 4,056 1,123 1,004
Actuarial return on plan assets.................... 575 680 141 171
Employer contribution.............................. 20 15 24 61
Benefits paid...................................... (272) (248) (89) (113)
Other payments..................................... -- (100) -- --
------ ------ ------ ------
Contract value of plan assets at end of year......... 4,726 4,403 1,199 1,123
------ ------ ------ ------
Over (under) funded.................................. 989 483 (284) (585)
------ ------ ------ ------
Unrecognized net asset at transition................. (66) (98) -- --
Unrecognized net actuarial gains..................... (564) (78) (487) (322)
Unrecognized prior service cost...................... 127 145 (2) (2)
------ ------ ------ ------
Prepaid (accrued) benefit cost....................... $ 486 $ 452 $ (773) $ (909)
====== ====== ====== ======
Qualified plan prepaid pension cost.................. $ 632 $ 568 $ -- $ --
Non-qualified plan accrued pension cost.............. (146) (116) -- --
------ ------ ------ ------
Prepaid benefit cost................................. $ 486 $ 452 $ -- $ --
====== ====== ====== ======
</TABLE>

The aggregate projected benefit obligation and aggregate contract value of
plan assets for the pension plans were as follows:

<TABLE>
<CAPTION>
NON-QUALIFIED
QUALIFIED PLAN PLAN TOTAL
---------------- -------------- ----------------
1999 1998 1999 1998 1999 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Aggregate projected benefit
obligation...................... $3,482 $3,697 $ 255 $ 223 $3,737 $3,920
Aggregate contract value of plan
assets (principally Company
contracts)...................... 4,726 4,403 -- -- 4,726 4,403
------ ------ ----- ----- ------ ------
Over (under) funded............... $1,244 $ 706 $(255) $(223) $ 989 $ 483
====== ====== ===== ===== ====== ======
</TABLE>
<PAGE> 29
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The assumptions used in determining the aggregate projected benefit
obligation and aggregate contract value for the pension and other benefits were
as follows:

<TABLE>
<CAPTION>
PENSION BENEFITS OTHER BENEFITS
---------------------------- -----------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Weighted average assumptions at
December 31,
Discount rate....................... 6.25% - 7.75% 6.5% - 7.25% 6% - 7.75% 7%
Expected rate of return on plan
assets............................ 8% - 10.5% 8.5% - 10.5% 6% - 9% 7.25% - 9%
Rate of compensation increase....... 4.5% - 8.5% 4.5% - 8.5% N/A N/A
</TABLE>

The assumed health care cost trend rates used in measuring the accumulated
nonpension postretirement benefit obligation were 6.5% for pre-Medicare eligible
claims and 6% for Medicare eligible claims in both 1999 and 1998.

Assumed health care cost trend rates may have a significant effect on the
amounts reported for health care plans. A one-percentage point change in assumed
health care cost trend rates would have the following effects:

<TABLE>
<CAPTION>
ONE PERCENT ONE PERCENT
INCREASE DECREASE
----------- -----------
<S> <C> <C>
Effect on total of service and interest cost components.... $ 14 $ 11
Effect of accumulated postretirement benefit obligation.... $134 $111
</TABLE>

The components of periodic benefit costs were as follows:

<TABLE>
<CAPTION>
PENSION BENEFITS OTHER BENEFITS
--------------------- ------------------
1999 1998 1997 1999 1998 1997
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Service cost............................... $ 100 $ 90 $ 74 $ 28 $ 31 $ 30
Interest cost.............................. 271 257 247 107 114 122
Expected return on plan assets............. (363) (337) (324) (89) (79) (66)
Amortization of prior actuarial gains...... (6) (11) (5) (11) (13) (4)
Curtailment (credit) cost.................. (17) (10) -- 10 4 --
----- ----- ----- ---- ---- ----
Net periodic benefit cost (credit)......... $ (15) $ (11) $ (8) $ 45 $ 57 $ 82
===== ===== ===== ==== ==== ====
</TABLE>

SAVINGS AND INVESTMENT PLANS

The Company sponsors savings and investment plans for substantially all
employees under which the Company matches a portion of employee contributions.
The Company contributed $45, $43 and $44 for the years ended December 31, 1999,
1998 and 1997, respectively.

6. SEPARATE ACCOUNTS

Separate accounts reflect two categories of risk assumption: non-guaranteed
separate accounts totaling $47,618 and $39,490 at December 31, 1999 and 1998,
respectively, for which the policyholder assumes the investment risk, and
guaranteed separate accounts totaling $17,323 and $18,578 at December 31, 1999
and 1998, respectively, for which MetLife contractually guarantees either a
minimum return or account value to the policyholder.
<PAGE> 30
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Fees charged to the separate accounts by the Company (including mortality
charges, policy administration fees and surrender charges) are reflected in the
Company's revenues as universal life and investment-type product policy fees and
totaled $485, $413 and $287 for the years ended December 31, 1999, 1998 and
1997, respectively. Guaranteed separate accounts consisted primarily of Met
Managed Guaranteed Interest Contracts and participating close out contracts. The
average interest rates credited on these contracts were 6.5% and 7% at December
31, 1999 and 1998, respectively. The assets that support these liabilities were
comprised of $16,874 and $16,639 in fixed maturities at December 31, 1999 and
1998, respectively. The portfolios are segregated from other investments and are
managed to minimize liquidity and interest rate risk. In order to minimize the
risk of disintermediation associated with early withdrawals, these investment
products carry a graded surrender charge as well as a market value adjustment.

7. DEBT

Debt consisted of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1999 1998
---- ----
<S> <C> <C>
MetLife:
6.300% surplus notes due 2003.......................... $ 397 $ 397
7.000% surplus notes due 2005.......................... 249 249
7.700% surplus notes due 2015.......................... 198 198
7.450% surplus notes due 2023.......................... 296 296
7.785% surplus notes due 2024.......................... 148 148
7.800% surplus notes due 2025.......................... 248 248
Other.................................................... 130 207
------ ------
1,666 1,743
------ ------
Investment related:
Floating rate debt, interest based on LIBOR............ -- 212
Exchangeable debt, interest rates ranging from 4.90% to
5.80%, due 2001 and 2002............................ 369 371
------ ------
369 583
------ ------
Total MetLife............................................ 2,035 2,326
------ ------
Nvest:
7.060% senior notes due 2003........................... 110 110
7.290% senior notes due 2007........................... 160 160
------ ------
270 270
------ ------
Other Affiliated Companies:
Fixed rate notes, interest rates ranging from 6.96% to
8.51%, maturity dates ranging from 2000 to 2008..... 170 179
Other.................................................. 39 128
------ ------
209 307
------ ------
Total long-term debt..................................... 2,514 2,903
Total short-term debt.................................... 4,208 3,585
------ ------
$6,722 $6,488
====== ======
</TABLE>
<PAGE> 31
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Short-term debt consisted of commercial paper with a weighted average
interest rate of 6.05% and 5.31% and a weighted average maturity of 74 and 44
days at December 31, 1999 and 1998, respectively.

The Company maintains unsecured credit facilities aggregating $7,000
(five-year facility of $1,000 expiring in April 2003; 364-day facility of $1,000
expiring in April 2000; 364-day facility of $5,000 expiring in September 2000).
Both $1,000 facilities bear interest at LIBOR plus 20 basis points. The $5,000
facility bears interest at various rates under specified borrowing scenarios.
The facilities can be used for general corporate purposes and also provide
backup for the Company's commercial paper program. At December 31, 1999, there
were no outstanding borrowings under any of the facilities.

Payments of interest and principal on the surplus notes, subordinated to
all other indebtedness, may be made only with the prior approval of the
Superintendent. Subject to the prior approval of the Superintendent, the 7.45%
surplus notes may be redeemed, in whole or in part, at the election of the
Company at any time on or after November 1, 2003.

Each issue of investment related debt is payable in cash or by delivery of
an underlying security owned by the Company. The amount payable at maturity of
the debt is greater than the principal of the debt if the market value of the
underlying security appreciates above certain levels at the date of debt
repayment as compared to the market value of the underlying security at the date
of debt issuance.

The aggregate maturities of long-term debt are $93 in 2000, $194 in 2001,
$210 in 2002, $415 in 2003, $126 in 2004 and $1,477 thereafter.

Interest expense related to the Company's outstanding indebtedness was
$358, $333 and $344 for the years ended December 31, 1999, 1998 and 1997,
respectively.

8. ACQUISITIONS AND DISPOSITIONS

In 1999 and 1997, respectively, the Company acquired assets of $4,832 and
$3,777 and assumed liabilities of $1,860 and $3,347 through the acquisition of
certain insurance and non-insurance operations. The aggregate purchase prices
were allocated to the assets and liabilities acquired based on their estimated
fair values.

During 1998, the Company sold MetLife Capital Holdings, Inc. (a commercial
financing company) and a substantial portion of its Canadian and Mexican
insurance operations, which resulted in a realized investment gain of $531.
During 1997, the Company sold its United Kingdom insurance operations, which
resulted in a realized investment gain of $139. Such sales caused a reduction in
assets of $10,663 and $4,342 and liabilities of $3,691 and $4,207 in 1998 and
1997, respectively.

See Note 16 for information regarding the Company's acquisition of
GenAmerica Corporation.

9. COMMITMENTS AND CONTINGENCIES

LITIGATION

The Company is currently a defendant in approximately 500 lawsuits raising
allegations of improper marketing and sales of individual life insurance
policies or annuities. These lawsuits are generally referred to as "sales
practices claims".
<PAGE> 32
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

On December 28, 1999, after a fairness hearing, the United States District
Court for the Western District of Pennsylvania approved a class action
settlement resolving a multidistrict litigation proceeding involving alleged
sales practices claims. The settlement class includes most of the owners of
permanent life insurance policies and annuity contracts or certificates issued
pursuant to individual sales in the United States by Metropolitan Life Insurance
Company, Metropolitan Insurance and Annuity Company or Metropolitan Tower Life
Insurance Company between January 1, 1982 and December 31, 1997. This class
includes owners of approximately six million in-force or terminated insurance
policies and approximately one million in-force or terminated annuity contracts
or certificates.

In addition to dismissing the consolidated class actions, the District
Court's order also bars sales practices claims by class members for sales by the
defendant insurers during the class period, effectively resolving all pending
class actions against these insurers. The defendants are in the process of
having these claims dismissed.

Under the terms of the order, only those class members who excluded
themselves from the settlement may continue an existing, or start a new, sales
practices lawsuit against Metropolitan Life Insurance Company, Metropolitan
Insurance and Annuity Company or Metropolitan Tower Life Insurance Company for
sales that occurred during the class period. Approximately 20,000 class members
elected to exclude themselves from the settlement. Over 400 of the approximately
500 lawsuits noted above are brought by individuals who elected to exclude
themselves from the settlement.

The settlement provides three forms of relief. General relief, in the form
of free death benefits, is provided automatically to class members who did not
exclude themselves from the settlement or who did not elect the claim evaluation
procedures set forth in the settlement. The claim evaluation procedures permit a
class member to have a claim evaluated by a third party under procedures set
forth in the settlement. Claim awards made under the claim evaluation procedures
will be in the form of policy adjustments, free death benefits or, in some
instances, cash payments. In addition, class members who have or had an
ownership interest in specified policies will also automatically receive
deferred acquisition cost tax relief in the form of free death benefits. The
settlement fixes the aggregate amounts that are available under each form of
relief.

The Company expects that the total cost of the settlement will be
approximately $957. This amount is equal to the amount of the increase in
liabilities for the death benefits and policy adjustments and the present value
of expected cash payments to be provided to included class members, as well as
attorneys' fees and expenses and estimated other administrative costs, but does
not include the cost of litigation with policyholders who are excluded from the
settlement. The Company believes that the cost of the settlement will be
substantially covered by available reinsurance and the provisions made in its
consolidated financial statements, and thus will not have a material adverse
effect on its business, results of operations or financial position. The Company
has not yet made a claim under those reinsurance agreements and, although there
is a risk that the carriers will refuse coverage for all or part of the claim,
the Company believes this is very unlikely to occur. The Company believes it has
made adequate provision in its consolidated financial statements for all
probable losses for sales practices claims, including litigation costs involving
policyholders who are excluded from the settlement.

The class action settlement does not resolve nine purported or certified
class actions currently pending against New England Mutual Life Insurance
Company with which the Company merged in 1996. Eight of those actions have been
consolidated as a multidistrict proceeding for pre-trial purposes in the United
States District Court in Massachusetts. That Court certified a mandatory class
as to those claims. Following an appeal of that certification, the United States
<PAGE> 33
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Court of Appeals remanded the case to the District Court for further
consideration. The Company is negotiating a settlement with class counsel.

The class action settlement also does not resolve three putative sales
practices class action lawsuits which have been brought against General American
Life Insurance Company. These lawsuits have been consolidated in a single
proceeding in the United States District Court for the Eastern District of
Missouri. General American Life Insurance Company and counsel for plaintiffs
have negotiated a settlement in principle of this consolidated proceeding.
General American Life Insurance Company has not reached agreement with
plaintiffs' counsel on the attorneys' fees to be paid. However, negotiations are
ongoing.

In addition, the class action settlement does not resolve two putative
class actions involving sales practices claims filed against Metropolitan Life
Insurance Company in Canada. The class action settlement also does not resolve a
certified class action with conditionally certified subclasses against
Metropolitan Life Insurance Company, Metropolitan Insurance and Annuity Company,
Metropolitan Tower Life Insurance Company and various individual defendants
alleging improper sales abroad. That lawsuit is pending in a New York federal
court.

In the past, the Company has resolved some individual sales practices
claims through settlement, dispositive motion or, in a few instances, trial.
Most of the current cases seek substantial damages, including in some cases
punitive and treble damages and attorneys' fees. Additional litigation relating
to the Company's marketing and sales of individual life insurance may be
commenced in the future.

Regulatory authorities in a small number of states, including both
insurance departments and one state attorney general, as well as the National
Association of Securities Dealers, Inc., have ongoing investigations or
inquiries relating to the Company's sales of individual life insurance policies
or annuities, including investigations of alleged improper replacement
transactions and alleged improper sales of insurance with inaccurate or
inadequate disclosures as to the period for which premiums would be payable.
Over the past several years, the Company has resolved a number of investigations
by other regulatory authorities for monetary payments and certain other relief,
and may continue to do so in the future.

MetLife is also a defendant in numerous lawsuits seeking compensatory and
punitive damages for personal injuries allegedly caused by exposure to asbestos
or asbestos-containing products. MetLife has never engaged in the business of
manufacturing, producing, distributing or selling asbestos or
asbestos-containing products. Rather, these lawsuits, currently numbering in the
thousands, have principally been based upon allegations relating to certain
research, publication and other activities of one or more of MetLife's employees
during the period from the 1920s through approximately the 1950s and alleging
that MetLife learned or should have learned of certain health risks posed by
asbestos and, among other things, improperly publicized or failed to disclose
those health risks. Legal theories asserted against MetLife have included
negligence, intentional tort claims and conspiracy claims concerning the health
risks associated with asbestos. While MetLife believes it has meritorious
defenses to these claims, and has not suffered any adverse judgments in respect
of these claims, most of the cases have been resolved by settlements. MetLife
intends to continue to exercise its best judgment regarding settlement or
defense of such cases. The number of such cases that may be brought or the
aggregate amount of any liability that MetLife may ultimately incur is
uncertain.

Significant portions of amounts paid in settlement of such cases have been
funded with proceeds from a previously resolved dispute with MetLife's primary,
umbrella and first level excess liability insurance carriers. MetLife is
presently in litigation with several of its excess
<PAGE> 34
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

liability insurers regarding amounts payable under its policies with respect to
coverage for these claims. The trial court has granted summary judgment to these
insurers. MetLife has appealed. There can be no assurances regarding the outcome
of this litigation or the amount and timing of recoveries, if any, from these
excess liability insurers. MetLife's asbestos-related litigation with these
insurers should have no effect on recoveries under the excess insurance policies
described below.

The Company has recorded, in other expenses, charges of $499 ($317
after-tax), $1,895 ($1,203 after-tax) and $300 ($190 after-tax) for the years
ended December 31, 1999, 1998 and 1997, respectively, for sales practices claims
and claims for personal injuries caused by exposure to asbestos or
asbestos-containing products. The 1999 charge was principally related to the
settlement of the multidistrict litigation proceeding involving alleged improper
sales practices, accruals for sales practices claims not covered by the
settlement and other legal costs. The 1998 charge was comprised of $925 and $970
for sales practices claims and asbestos-related claims, respectively. The
Company recorded the charges for sales practices claims based on preliminary
settlement discussions and the settlement history of other insurers.

Prior to the fourth quarter of 1998, the Company established a liability
for asbestos-related claims based on settlement costs for claims that the
Company had settled, estimates of settlement costs for claims pending against
the Company and an estimate of settlement costs for unasserted claims. The
amount for unasserted claims was based on management's estimate of unasserted
claims that would be probable of assertion. A liability is not established for
claims which management believes are only reasonably possible of assertion.
Based on this process, the accrual for asbestos-related claims at December 31,
1997 was $386. Potential liabilities for asbestos-related claims are not easily
quantified, due to the nature of the allegations against the Company, which are
not related to the business of manufacturing, producing, distributing or selling
asbestos or asbestos-containing products, adding to the uncertainty as to the
number of claims that may be brought against the Company.

During 1998, the Company decided to pursue the purchase of excess insurance
to limit its exposure to asbestos-related claims. In connection with the
negotiations with the casualty insurers to obtain this insurance, the Company
obtained information that caused management to reassess the accruals for
asbestos-related claims. This information included:

- Information from the insurers regarding the asbestos-related claims
experience of other insureds, which indicated that the number of claims
that were probable of assertion against the Company in the future was
significantly greater than it had assumed in its accruals. The number of
claims brought against the Company is generally a reflection of the
number of asbestos-related claims brought against asbestos defendants
generally and the percentage of those claims in which the Company is
included as a defendant. The information provided to the Company relating
to other insureds indicated that the Company had been included as a
defendant for a significant percentage of total asbestos-related claims
and that it may be included in a larger percentage of claims in the
future, because of greater awareness of asbestos litigation generally by
potential plaintiffs and plaintiffs' lawyers and because of the
bankruptcy and reorganization or the exhaustion of insurance coverage of
other asbestos defendants; and that, although volatile, there was an
upward trend in the number of total claims brought against asbestos
defendants.

- Information derived from actuarial calculations the Company made in the
fourth quarter of 1998 in connection with these negotiations, which
helped to frame, define and quantify this liability. These calculations
were made using, among other things, current information regarding the
Company's claims and settlement experience (which reflected the Com-
<PAGE> 35
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

pany's decision to resolve an increased number of these claims by
settlement), recent and historic claims and settlement experience of
selected other companies and information obtained from the insurers.

Based on this information, the Company concluded that certain claims that
previously were considered as only reasonably possible of assertion were now
probable of assertion, increasing the number of assumed claims to approximately
three times the number assumed in prior periods. As a result of this
reassessment, the Company increased its liability for asbestos-related claims to
$1,278 at December 31, 1998.

During 1998, the Company paid $1,407 of premiums for excess of loss
reinsurance agreements and excess insurance policies, consisting of $529 for the
excess of loss reinsurance agreements for sales practices claims and excess
mortality losses and $878 for the excess insurance policies for asbestos-related
claims.

The Company obtained the excess of loss reinsurance agreements to provide
reinsurance with respect to sales practices claims made on or prior to December
31, 1999 and for certain mortality losses in 1999. These reinsurance agreements
have a maximum aggregate limit of $650, with a maximum sublimit of $550 for
losses for sales practices claims. This coverage is in excess of an aggregate
self-insured retention of $385 with respect to sales practices claims and $506,
plus the Company's statutory policy reserves released upon the death of
insureds, with respect to life mortality losses. At December 31, 1999, the
subject losses under the reinsurance agreements due to sales practices claims
and related counsel fees from the time the Company entered into the reinsurance
agreements did not exceed that self-insured retention. The maximum sublimit of
$550 for sales practices claims was within a range of losses that management
believed were reasonably possible at December 31, 1998. Each excess of loss
reinsurance agreement for sales practices claims and mortality losses contains
an experience fund, which provides for payments to the Company at the
commutation date if experience is favorable at such date. The Company accounts
for the aggregate excess of loss reinsurance agreements as reinsurance; however,
if deposit accounting were applied, the effect on the Company's consolidated
financial statements in 1998, 1999 and 2000 would not be significant.

Under reinsurance accounting, the excess of the liability recorded for
sales practices losses recoverable under the agreements of $550 over the premium
paid of $529 results in a deferred gain of $21 which is being amortized into
income over the settlement period from January 1999 through April 2000. Under
deposit accounting, the premium would be recorded as an other asset rather than
as an expense, and the reinsurance loss recoverable and the deferred gain would
not have been recorded. Because the agreements also contain an experience fund
which increases with the passage of time, the increase in the experience fund in
1999 and 2000 under deposit accounting would be recognized as interest income in
an amount approximately equal to the deferred gain that will be amortized into
income under reinsurance accounting.

The excess insurance policies for asbestos-related claims provide for
recovery of losses up to $1,500, which is in excess of a $400 self-insured
retention ($878 of which was recorded as a recoverable at December 31, 1999 and
1998). The asbestos-related policies are also subject to annual and per-claim
sublimits. Amounts are recoverable under the policies annually with respect to
claims paid during the prior calendar year. Although amounts paid in any given
year that are recoverable under the policies will be reflected as a reduction in
the Company's operating cash flows for that year, management believes that the
payments will not have a material adverse effect on the Company's liquidity.
Each asbestos-related policy contains an experience fund and a reference fund
that provides for payments to the Company at the commutation date if experience
under the policy to such date has been favorable, or pro rata reductions from
time to
<PAGE> 36
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

time in the loss reimbursements to the Company if the cumulative return on the
reference fund is less than the return specified in the experience fund.

A purported class action suit involving policyholders in 32 states has been
filed in a Rhode Island state court against MetLife's subsidiary, Metropolitan
Property and Casualty Insurance Company, with respect to claims by policyholders
for the alleged diminished value of automobiles after accident-related repairs.
A similar "diminished value" allegation was made recently in a Texas Deceptive
Trade Practices Act letter and lawsuit which involve a Metropolitan Property and
Casualty Company policyholder. A purported class action has been filed against
Metropolitan Property and Casualty Insurance Company and its subsidiary,
Metropolitan Casualty Insurance Company, in Florida by a policyholder alleging
breach of contract and unfair trade practices with respect to Metropolitan
Casualty Insurance Company allowing the use of parts not made by the original
manufacturer to repair damaged automobiles. These suits are in the early stages
of litigation and Metropolitan Property and Casualty Insurance Company and
Metropolitan Casualty Insurance Company intend to vigorously defend themselves
against these suits. Similar suits have been filed against several other
personal lines property and casualty insurers.

The United States, the Commonwealth of Puerto Rico and various hotels and
individuals have sued MetLife Capital Corporation, a former subsidiary of the
Company, seeking damages for clean up costs, natural resource damages, personal
injuries and lost profits and taxes based upon, among other things, a release of
oil from a barge which was being towed by the M/V Emily S. In connection with
the sale of MetLife Capital, the Company acquired MetLife Capital's potential
liability with respect to the M/V Emily S lawsuit. MetLife Capital had entered
into a sale and leaseback financing arrangement with respect to the M/V Emily S.
The plaintiffs have taken the position that MetLife Capital, as the owner of
record of the M/V Emily S, is responsible for all damages caused by the barge,
including the oil spill. The governments of the United States and Puerto Rico
have claimed damages in excess of $150. At a mediation, the action brought by
the United States and Puerto Rico was conditionally settled, provided that the
governments have access to additional sums from a fund contributed to by oil
companies to help remediate oil spills. The Company can provide no assurance
that this action will be settled in this manner.

Three putative class actions have been filed by Conning Corporation
shareholders alleging that the Company's announced offer to purchase the
publicly-held Conning shares is inadequate and constitutes a breach of fiduciary
duty (see Note 16). The Company believes the actions are without merit, and
expects that they will not materially affect its offer to purchase the shares.

A civil complaint challenging the fairness of the plan of reorganization
and the adequacy and accuracy of the disclosures to policyholders regarding the
plan has been filed in New York Supreme Court for Kings County on behalf of an
alleged class consisting of the policyholders of MetLife who should have
membership benefits in MetLife and were and are eligible to receive notice, vote
and receive consideration in the demutualization. The complaint seeks to enjoin
or rescind the plan and seeks other relief. The defendants named in the
complaint are MetLife and the individual members of its board of directors and
MetLife, Inc. MetLife believes that the allegations made in the complaint are
wholly without merit, and intends to vigorously contest the complaint.

Various litigation, claims and assessments against the Company, in addition
to those discussed above and those otherwise provided for in the Company's
consolidated financial statements, have arisen in the course of the Company's
business, including, but not limited to, in connection with its activities as an
insurer, employer, investor, investment advisor and taxpayer. Further, state
insurance regulatory authorities and other Federal and state authorities
regularly
<PAGE> 37
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

make inquiries and conduct investigations concerning the Company's compliance
with applicable insurance and other laws and regulations.

In some of the matters referred to above, very large and/or indeterminate
amounts, including punitive and treble damages, are sought. While it is not
feasible to predict or determine the ultimate outcome of all pending
investigations and legal proceedings or provide reasonable ranges of potential
losses, it is the opinion of the Company's management that their outcomes, after
consideration of available insurance and reinsurance and the provisions made in
the Company's consolidated financial statements, are not likely to have a
material adverse effect on the Company's consolidated financial position.
However, given the large and/or indeterminate amounts sought in certain of these
matters and the inherent unpredictability of litigation, it is possible that an
adverse outcome in certain matters could, from time to time, have a material
adverse effect on the Company's operating results or cash flows in particular
quarterly or annual periods.

TRANSFERRED CANADIAN POLICIES

In July 1998, MetLife sold a substantial portion of its Canadian operations
to Clarica Life. As part of that sale, a large block of policies in effect with
MetLife in Canada were transferred to Clarica Life, and the holders of the
transferred Canadian policies became policyholders of Clarica Life. Those
transferred policyholders are no longer policyholders of MetLife and, therefore,
are not entitled to compensation under the plan of reorganization. However, as a
result of a commitment made in connection with obtaining Canadian regulatory
approval of that sale, if MetLife demutualizes, its Canadian branch will make
cash payments to those who are, or are deemed to be, holders of those
transferred Canadian policies. The payments, which will be recorded in other
expenses in the same period as the effective date of the plan, will be
determined in a manner that is consistent with the treatment of, and fair and
equitable to, eligible policyholders of MetLife. The amount of the payment is
dependent upon the initial public offering price of common stock to be issued on
the effective date of the plan of demutualization.

YEAR 2000

The Year 2000 issue was the result of the widespread use of computer
programs written using two digits (rather than four) to define the applicable
year. Such programming was a common industry practice designed to avoid the
significant costs associated with additional mainframe capacity necessary to
accommodate a four-digit field. As a result, any of the Company's computer
systems that have time-sensitive software may recognize a date using "00" as the
year 1900 rather than the year 2000. This could result in major system failures
or miscalculations. The Company has conducted a comprehensive review of its
computer systems to identify the systems that could be affected by the Year 2000
issue and has implemented a plan to resolve the issue. There can be no
assurances that the Year 2000 plan of the Company or that of its vendors or
third parties have resolved all Year 2000 issues. Further, there can be no
assurance that there will not be any future system failure or that such failure,
if any, will not have a material impact on the operations of the Company.

LEASES

In accordance with industry practice, certain of the Company's income from
lease agreements with retail tenants is contingent upon the level of the
tenants' sales revenues. Additionally, the Company, as lessee, has entered into
various lease and sublease agreements
<PAGE> 38
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

for office space, data processing and other equipment. Future minimum rental and
subrental income and minimum gross rental payments relating to these lease
agreements were as follows:

<TABLE>
<CAPTION>
GROSS
RENTAL SUBLEASE RENTAL
INCOME INCOME PAYMENTS
------ -------- --------
<S> <C> <C> <C>
2000......................................... $ 817 $13 $156
2001......................................... 740 12 135
2002......................................... 689 11 111
2003......................................... 612 9 90
2004......................................... 542 9 69
Thereafter................................... 2,032 27 299
</TABLE>

10. INCOME TAXES

The provision for income taxes was as follows:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Current:
Federal................................................... $643 $668 $370
State and local........................................... 24 60 10
Foreign................................................... 4 99 26
---- ---- ----
671 827 406
---- ---- ----
Deferred:
Federal................................................... (78) (25) 28
State and local........................................... 2 (8) 9
Foreign................................................... (2) (54) 25
---- ---- ----
(78) (87) 62
---- ---- ----
Provision for income taxes.................................. $593 $740 $468
==== ==== ====
</TABLE>

Reconciliations of the income tax provision at the U.S. statutory rate to
the provision for income taxes as reported were as follows:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Tax provision at U.S. statutory rate........................ $502 $730 $585
Tax effect of:
Tax exempt investment income.............................. (39) (40) (30)
Surplus tax............................................... 125 18 (40)
State and local income taxes.............................. 18 31 15
Tax credits............................................... (5) (25) (15)
Prior year taxes.......................................... (31) 4 (2)
Sale of businesses........................................ -- (19) (41)
Other, net................................................ 23 41 (4)
---- ---- ----
Provision for income taxes.................................. $593 $740 $468
==== ==== ====
</TABLE>
<PAGE> 39
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Deferred income taxes represent the tax effect of the differences between
the book and tax basis of assets and liabilities. Net deferred income tax assets
and liabilities consisted of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1999 1998
---- ----
<S> <C> <C>
Deferred income tax assets:
Policyholder liabilities and receivables............... $3,042 $3,108
Net operating losses................................... 72 22
Net unrealized investment losses....................... 161 --
Employee benefits...................................... 192 174
Litigation related..................................... 468 312
Other.................................................. 242 158
------ ------
4,177 3,774
Less: Valuation allowance.............................. 72 21
------ ------
4,105 3,753
------ ------
Deferred income tax liabilities:
Investments............................................ 1,472 1,529
Deferred policy acquisition costs...................... 1,967 1,887
Net unrealized investment gains........................ -- 864
Other.................................................. 63 18
------ ------
3,502 4,298
------ ------
Net deferred income tax asset (liability)................ $ 603 $ (545)
====== ======
</TABLE>

Foreign net operating loss carryforwards generated deferred income tax
benefits of $72 and $21 at December 31, 1999 and 1998, respectively. The Company
has recorded a valuation allowance related to these tax benefits. The valuation
allowance reflects management's assessment, based on available information, that
it is more likely than not that the deferred income tax asset for foreign net
operating loss carryforwards will not be realized. The benefit will be
recognized when management believes that it is more likely than not that the
portion of the deferred income tax asset is realizable.

The Company has been audited by the Internal Revenue Service for the years
through and including 1993. The Company is being audited for the years 1994,
1995 and 1996. The Company believes that any adjustments that might be required
for open years will not have a material effect on the Company's consolidated
financial statements.

11. REINSURANCE

The Company assumes and cedes insurance with other insurance companies. The
Company continually evaluates the financial condition of its reinsurers and
monitors concentration of credit risk in an effort to minimize its exposure to
significant losses from reinsurer insolvencies. The Company is contingently
liable with respect to ceded reinsurance should any reinsurer be unable to meet
its obligations under these agreements. The amounts in the consolidated
statements of income are presented net of reinsurance ceded.

The Company's life insurance operations participate in reinsurance in order
to limit losses, minimize exposure to large risks and to provide additional
capacity for future growth. During
<PAGE> 40
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

1998, the Company began reinsuring, under yearly renewal term policies, 90
percent of the mortality risk on universal life policies issued after 1983. The
Company also reinsures 90 percent of the mortality risk on term life insurance
policies issued after 1995 under yearly renewal term policies and coinsures 100
percent of the mortality risk in excess of $25 and $35 on single and joint
survivorship policies, respectively.

During 1997, the Company obtained a 100 percent coinsurance policy to
provide coverage for contractual payments generated by certain portions of the
Company's non-life contingency long-term guaranteed interest contracts and
structured settlement lump sum contracts issued during the periods 1991 through
1993. The policy was amended in 1998 to include structured settlement lump sum
payments issued during the period 1983 through 1990, 1994 and 1995. Reinsurance
recoverables under the contract, which has been accounted for as a financing
transaction, were $1,372 and $1,374 at December 31, 1999 and 1998, respectively.

See Note 9 for information regarding certain excess of loss reinsurance
agreements providing coverage for risks associated primarily with sales
practices claims.

The Company has exposure to catastrophes, which are an inherent risk of the
property and casualty insurance business and could contribute to material
fluctuations in the Company's results of operations. The Company uses excess of
loss and quota share reinsurance arrangements to limit its maximum loss, provide
greater diversification of risk and minimize exposure to larger risks. The
Company's reinsurance program is designed to limit a catastrophe loss to no more
than 10% of the Auto & Home segment's statutory surplus.

The effects of reinsurance were as follows:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Direct premiums..................................... $13,249 $12,763 $12,728
Reinsurance assumed................................. 484 409 360
Reinsurance ceded................................... (1,645) (1,669) (1,810)
------- ------- -------
Net premiums........................................ $12,088 $11,503 $11,278
======= ======= =======
Reinsurance recoveries netted against policyholder
benefits.......................................... $ 1,626 $ 1,744 $ 1,648
======= ======= =======
</TABLE>

The effects of reinsurance with GenAmerica Corporation ("GenAmerica") were
as follows:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Premiums ceded to GenAmerica.............................. $108 $113 $61
==== ==== ===
Reinsurance recoveries from GenAmerica netted against
policyholder benefits................................... $ 74 $ 28 $24
==== ==== ===
</TABLE>

Reinsurance recoverables, included in other receivables, were $2,898 and
$3,134 at December 31, 1999 and 1998, respectively, of which $5 and $5,
respectively, were recoverable from GenAmerica. Reinsurance and ceded
commissions payables, included in other liabilities, were $148 and $105 at
December 31, 1999 and 1998, respectively.
<PAGE> 41
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following provides an analysis of the activity in the liability for
benefits relating to property and casualty and group accident and non-medical
health policies and contracts:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Balance at January 1................................ $ 3,320 $ 3,655 $ 3,345
Reinsurance recoverables.......................... (233) (229) (215)
------- ------- -------
Net balance at January 1............................ 3,087 3,426 3,130
------- ------- -------
Acquisition of business............................. 204 -- --
------- ------- -------
Incurred related to:
Current year...................................... 3,129 2,726 2,855
Prior years....................................... (16) (245) 88
------- ------- -------
3,113 2,481 2,943
------- ------- -------
Paid related to:
Current year...................................... (2,128) (1,967) (1,832)
Prior years....................................... (759) (853) (815)
------- ------- -------
(2,887) (2,820) (2,647)
------- ------- -------
Balance at December 31.............................. 3,517 3,087 3,426
Add: Reinsurance recoverables..................... 272 233 229
------- ------- -------
Balance at December 31.............................. $ 3,789 $ 3,320 $ 3,655
======= ======= =======
</TABLE>

12. OTHER EXPENSES

Other expenses were comprised of the following:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Compensation........................................ $ 2,590 $ 2,478 $ 2,078
Commissions......................................... 937 902 766
Interest and debt issue costs....................... 405 379 453
Amortization of policy acquisition costs (excludes
amortization of $(46), $240 and $70, respectively,
related to realized investment gains and
(losses))......................................... 862 587 771
Capitalization of policy acquisition costs.......... (1,160) (1,025) (1,000)
Rent, net of sublease income........................ 239 155 179
Minority interest................................... 55 67 56
Restructuring charge................................ -- 81 --
Other............................................... 2,827 4,395 2,468
------- ------- -------
$ 6,755 $ 8,019 $ 5,771
======= ======= =======
</TABLE>

During 1998, the Company recorded charges of $81 to restructure
headquarters operations and consolidate certain agencies and other operations.
These costs have been fully paid at December 31, 1999.
<PAGE> 42
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

13. STATUTORY FINANCIAL INFORMATION

The reconciliations of MetLife's statutory surplus and net change in
statutory surplus, determined in accordance with accounting practices prescribed
or permitted by insurance regulatory authorities, with equity and net income
determined in conformity with generally accepted accounting principles were as
follows:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1999 1998
---- ----
<S> <C> <C>
Statutory surplus........................................... $ 7,630 $ 7,388
GAAP adjustments for:
Future policy benefits and policyholder account
balances............................................... (4,167) (6,830)
Deferred policy acquisition costs......................... 8,381 6,560
Deferred income taxes..................................... 886 (190)
Valuation of investments.................................. (2,102) 3,981
Statutory asset valuation reserves........................ 3,189 3,381
Statutory interest maintenance reserves................... 1,114 1,486
Surplus notes............................................. (1,602) (1,595)
Other, net................................................ 361 686
------- -------
Equity...................................................... $13,690 $14,867
======= =======
</TABLE>

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Net change in statutory surplus......................... $ 242 $ 10 $ 227
GAAP adjustments for:
Future policy benefits and policyholder account
balances........................................... 556 127 (38)
Deferred policy acquisition costs..................... 379 224 149
Deferred income taxes................................. 154 234 62
Valuation of investments.............................. 473 1,158 (387)
Statutory asset valuation reserves.................... (226) (461) 1,136
Statutory interest maintenance reserves............... (368) 312 53
Other, net............................................ (593) (261) 1
----- ------ ------
Net income.............................................. $ 617 $1,343 $1,203
===== ====== ======
</TABLE>
<PAGE> 43
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

14. OTHER COMPREHENSIVE INCOME (LOSS)

The following table sets forth the reclassification adjustments required
for the years ended December 31, 1999, 1998 and 1997 to avoid double-counting in
other comprehensive income (loss) items that are included as part of net income
for the current year that have been reported as a part of other comprehensive
income (loss) in the current or prior year:

<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Holding (losses) gains on investments arising during the
year...................................................... $(6,314) $ 1,493 $ 4,257
Income tax effect of holding gains or losses................ 2,262 (617) (1,615)
Transfer of securities from held-to-maturity to
available-for-sale:
Holding gains on investments.............................. -- -- 198
Income tax effect......................................... -- -- (75)
Reclassification adjustments:
Realized holding (gains) losses included in current year
net income............................................. 38 (2,013) (844)
Amortization of premium and discount on investments....... (307) (350) (209)
Realized holding (losses) gains allocated to other
policyholder amounts................................... (67) 608 231
Income tax effect......................................... 120 729 312
Allocation of holding losses (gains) on investments relating
to other policyholder amounts............................. 3,788 (351) (2,231)
Income tax effect of allocation of holding gains and losses
to other policyholder amounts............................. (1,357) 143 846
------- ------- -------
Net unrealized investment (losses) gains.................... (1,837) (358) 870
------- ------- -------
Foreign currency translation adjustments arising during the
year...................................................... 50 (115) (46)
Reclassification adjustment for sale of investment in
foreign operation......................................... -- 2 (3)
------- ------- -------
Foreign currency translation adjustment..................... 50 (113) (49)
------- ------- -------
Minimum pension liability adjustment........................ (7) (12) --
------- ------- -------
Other comprehensive income (loss)........................... $(1,794) $ (483) $ 821
======= ======= =======
</TABLE>

15. BUSINESS SEGMENT INFORMATION

The Company provides insurance and financial services to customers in the
United States, Canada, Central America, South America, Europe and Asia. The
Company's business is divided into six segments: Individual, Institutional, Auto
& Home, International, Asset Management and Corporate. These segments are
managed separately because they either provide different products and services,
require different strategies or have different technology requirements.

Individual offers a wide variety of individual insurance and investment
products, including life insurance, annuities and mutual funds. Institutional
offers a broad range of group insurance and retirement and savings products and
services, including group life insurance, non-medical health insurance such as
short and long-term disability, long-term care and dental insurance and other
insurance products and services. Auto & Home provides insurance coverages
including private passenger automobile, homeowners and personal excess liability
insurance. International provides life insurance, accident and health insurance,
annuities and retirement and savings
<PAGE> 44
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

products to both individuals and groups, and auto and homeowners coverage to
individuals. Asset Management provides a broad variety of asset management
products and services to individuals and institutions such as mutual funds for
savings and retirement needs, commercial real estate advisory and management
services, and institutional and retail investment management. Through its
Corporate segment, the Company reports items that are not allocated to any of
the business segments.

Set forth in the tables below is certain financial information with respect
to the Company's operating segments for the years ended December 31, 1999, 1998
and 1997. The accounting policies of the segments are the same as those
described in the summary of significant accounting policies, except for the
method of capital allocation. The Company allocates capital to each segment
based upon an internal capital allocation system that allows the Company to more
effectively manage its capital. The Company has divested operations that did not
meet targeted rates of return, including its commercial leasing business
(Corporate segment) and substantial portions of its Canadian operations
(International segment), and insurance operations in the United Kingdom
(International segment). The Company evaluates the performance of each operating
segment based upon income or loss from operations before provision for income
taxes and non-recurring items (e.g. items of unusual or infrequent nature). The
Company allocates non-recurring items (primarily consisting of sales practices
claims and claims for personal injuries caused by exposure to asbestos or
asbestos-containing products) and prior to its sale in 1998, the results of
MetLife Capital Holdings, Inc. to the Corporate segment.

<TABLE>
<CAPTION>
AUTO
AT OR FOR THE YEAR ENDED & ASSET CONSOLIDATION/
DECEMBER 31, 1999 INDIVIDUAL INSTITUTIONAL HOME INTERNATIONAL MANAGEMENT CORPORATE ELIMINATION TOTAL
- ------------------------ ---------- ------------- ---- ------------- ---------- --------- -------------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Premiums................ $ 4,289 $ 5,525 $1,751 $ 523 $ -- $ -- $ -- $ 12,088
Universal life and
investment-type
product policy fees... 888 502 -- 48 -- -- -- 1,438
Net investment income... 5,346 3,755 103 206 80 605 (279) 9,816
Other revenues.......... 558 629 21 12 803 59 72 2,154
Net realized investment
gains (losses)........ (14) (31) 1 1 -- (41) 14 (70)
Policyholder benefits
and claims............ 4,625 6,712 1,301 463 -- -- 4 13,105
Interest credited to
policyholder account
balances.............. 1,359 1,030 -- 52 -- -- -- 2,441
Policyholder
dividends............. 1,509 159 -- 22 -- -- -- 1,690
Other expenses.......... 2,719 1,589 514 248 795 1,031 (141) 6,755
Income (loss) before
provision for income
taxes and
extraordinary item.... 855 890 61 5 88 (408) (56) 1,435
Income (loss) after
provision for income
taxes before
extraordinary item.... 555 567 56 21 51 (358) (50) 842
Total assets............ 109,401 88,127 4,443 4,381 1,036 19,834 (1,990) 225,232
Deferred policy
acquisition costs..... 8,049 106 93 244 -- -- -- 8,492
Separate account
assets................ 28,828 35,236 -- 877 -- -- -- 64,941
Policyholder
liabilities........... 72,956 47,781 2,318 2,187 -- 6 (293) 124,955
Separate account
liabilities........... 28,828 35,236 -- 877 -- -- -- 64,941
</TABLE>
<PAGE> 45
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
AUTO
AT OR FOR THE YEAR ENDED & ASSET CONSOLIDATION/
DECEMBER 31, 1998 INDIVIDUAL INSTITUTIONAL HOME INTERNATIONAL MANAGEMENT CORPORATE ELIMINATION TOTAL
- ------------------------ ---------- ------------- ---- ------------- ---------- --------- -------------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Premiums................ $ 4,323 $ 5,159 $1,403 $ 618 $ -- $ -- $ -- $ 11,503
Universal life and
investment-type
product policy fees... 817 475 -- 68 -- -- -- 1,360
Net investment income... 5,480 3,885 81 343 75 682 (318) 10,228
Other revenues.......... 474 575 36 33 817 111 (52) 1,994
Net realized investment
gains................. 659 557 122 117 -- 679 (113) 2,021
Policyholder benefits
and claims............ 4,606 6,416 1,029 597 -- (10) -- 12,638
Interest credited to
policyholder account
balances.............. 1,423 1,199 -- 89 -- -- -- 2,711
Policyholder
dividends............. 1,445 142 -- 64 -- -- -- 1,651
Other expenses.......... 2,577 1,613 386 352 799 2,601 (309) 8,019
Income (loss) before
provision for income
taxes and
extraordinary item.... 1,702 1,281 227 77 93 (1,119) (174) 2,087
Income (loss) after
provision for income
taxes before
extraordinary item.... 1,069 846 161 56 49 (691) (143) 1,347
Total assets............ 103,614 88,741 2,763 3,432 1,164 20,852 (5,220) 215,346
Deferred policy
acquisition costs..... 6,194 82 57 205 -- -- -- 6,538
Separate account
assets................ 23,013 35,029 -- 26 -- -- -- 58,068
Policyholder
liabilities........... 71,571 49,406 1,477 2,043 -- 1 (295) 124,203
Separate account
liabilities........... 23,013 35,029 -- 26 -- -- -- 58,068
</TABLE>

<TABLE>
<CAPTION>
AUTO
AT OR FOR THE YEAR ENDED & ASSET CONSOLIDATION/
DECEMBER 31, 1997 INDIVIDUAL INSTITUTIONAL HOME INTERNATIONAL MANAGEMENT CORPORATE ELIMINATION TOTAL
- ------------------------ ---------- ------------- ---- ------------- ---------- --------- -------------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Premiums................. $ 4,327 $ 4,689 $1,354 $ 908 $ -- $ -- $ -- $ 11,278
Universal life and
investment-type product
policy fees............ 855 426 -- 137 -- -- -- 1,418
Net investment income.... 4,754 3,754 71 504 78 700 (370) 9,491
Other revenues........... 338 357 25 54 682 19 16 1,491
Net realized investment
gains.................. 356 45 9 142 -- 326 (91) 787
Policyholder benefits and
claims................. 4,597 5,934 1,003 869 -- -- -- 12,403
Interest credited to
policyholder account
balances............... 1,422 1,319 -- 137 -- -- -- 2,878
Policyholder dividends... 1,340 305 -- 97 -- -- -- 1,742
Other expenses........... 2,394 1,178 351 497 679 966 (294) 5,771
Income before provision
for income taxes....... 877 535 105 145 81 79 (151) 1,671
Income after provision
for income taxes....... 599 339 74 126 45 163 (143) 1,203
Total assets............. 95,323 83,473 2,542 7,412 1,136 18,641 (5,745) 202,782
Deferred policy
acquisition costs...... 5,912 40 56 428 -- -- -- 6,436
Separate account assets.. 17,345 30,473 -- 520 -- -- -- 48,338
Policyholder
liabilities............ 70,686 49,547 1,509 5,615 -- 1 -- 127,358
Separate account
liabilities............ 17,345 30,473 -- 520 -- -- -- 48,338
</TABLE>
<PAGE> 46
METROPOLITAN LIFE INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Individual segment includes an equity ownership interest in Nvest
Companies, L.P. ("Nvest") under the equity method of accounting. Nvest has been
included within the Asset Management segment due to the types of products and
strategies employed by the entity. The individual segment's equity in earnings
of Nvest, which is included in net investment income, was $48, $49 and $45 for
the years ended December 31, 1999, 1998 and 1997, respectively. The investment
in Nvest was $196, $252 and $216 at December 31, 1999, 1998 and 1997,
respectively.

Net investment income and net realized investment gains are based upon the
actual results of each segment's specifically identifiable asset portfolio.
Other costs and operating costs were allocated to each of the segments based
upon: (1) a review of the nature of such costs, (2) time studies analyzing the
amount of employee compensation costs incurred by each segment, and (3) cost
estimates included in the Company's product pricing.

The consolidation/elimination column includes the elimination of all
intersegment amounts and the Individual segment's ownership interest in Nvest.
The principal component of the intersegment amounts related to intersegment
loans, which bore interest at rates commensurate with related borrowings.

Revenues derived from any customer did not exceed 10% of consolidated
revenues. Revenues from U.S. operations were $24,637, $25,643 and $22,664 for
the years ended December 31, 1999, 1998 and 1997, respectively, which
represented 97%, 96% and 93%, respectively, of consolidated revenues.

16. SUBSEQUENT EVENTS

On January 6, 2000, the Company acquired GenAmerica for $1.2 billion. In
connection with this acquisition, the Company incurred $900 of short-term debt.
GenAmerica is a holding company which includes General American Life Insurance
Company, 48.3% of the outstanding shares of Reinsurance Group of America ("RGA")
common stock, a provider of reinsurance, and 61.0% of the outstanding shares of
Conning Corporation common stock, an asset manager. On January 18, 2000, the
Company announced that it had proposed to acquire all of the outstanding shares
of Conning common stock not already owned by it for $10.50 per share in cash, or
approximately $55. At December 31, 1999, the Company owned 9.6% of the
outstanding shares of RGA common stock which were acquired on November 24, 1999
for $125. Subsequent to the GenAmerica acquisition, the Company owned 57.9% of
the outstanding shares of RGA common stock. Total assets, revenues and net loss
of GenAmerica were $23,594, $3,916 and $(174), respectively, at or for the year
ended December 31, 1999.

As part of the acquisition agreement, in September 1999 the Company assumed
$5,752 of General American Life funding agreements and received cash of $1,926
and investment assets with a market value of $3,826. In October 1999, as part of
the assumption arrangement, the holders of General American Life funding
agreements aggregating $5,136 elected to have the Company redeem the funding
agreements for cash. General American Life agreed to pay the Company a fee of
$120 in connection with the assumption of the funding agreements. The fee will
be considered as part of the purchase price to be allocated to the fair value of
assets and liabilities acquired. The Company also agreed to make a capital
contribution of $120 to General American Life after the completion of the
acquisition.

At the date of the acquisition agreement, the Company and GenAmerica were
parties to a number of reinsurance agreements. In addition, as part of the
acquisition, the Company entered into agreements effective as of July 25, 1999,
which coinsured new and certain existing business of General American Life and
some of its affiliates. See Note 11.

<PAGE>

THE NEW ENGLAND VARIABLE ACCOUNT

PART C. OTHER INFORMATION
-----------------

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
---------------------------------
(a) Financial Statements

The following financial statements of the Registrant are included in Part B
of this Post-Effective Amendment on Form N-4:

Statement of Assets and Liabilities as of December 31, 1999.

Statement of Operations for the year ended December 31, 1999.

Statement of Changes in Net Assets for the years ended December 31, 1999
and 1998.

Notes to Financial Statements.

The following financial statements of the Depositor are included in Part B
of this Post-Effective Amendment on Form N-4:

Consolidated Balance Sheets as of December 31, 1999 and 1998.

Consolidated Statements of Income for the years ended December 31, 1999,
1998 and 1997.

Consolidated Statements of Equity for the years ended December 31, 1999,
1998 and 1997.

Consolidated Statements of Cash Flows for the years ended December 31,
1999, 1998 and 1997.

Notes to Consolidated Financial Statements.

(b) Exhibits

(1) (i) Resolutions of Board of Directors of New England Mutual Life Insurance
Company authorizing the Registrant are incorporated herein by reference to
the Registration Statement on Form N-4 (No. 333-11131) filed on August 30,
1996.

(ii) Resolutions of the Depositor adopting the Registrant as a separate
account are incorporated herein by reference to the Registration Statement
on Form N-4 (No. 333-11131) filed on August 30, 1996.
<PAGE>

(2) None

(3) (i) Distribution Agreement is incorporated herein by reference to the
Registration Statement on Form N-4 (No. 333-11131) filed on August 30,
1996.

(ii) Form of Selling Agreement with other broker-dealers is incorporated
herein by reference to Post-Effective Amendment No. 2 to the Registration
Statement on Form N-4 (No. 333-11131) filed on May 1, 1998.

(4) (i) Form of New England Mutual Life Insurance Company Variable Annuity
Contract is incorporated herein by reference to Post-Effective Amendment
No. 2 to the Registration Statement on Form N-4 (No. 333-11131) filed on
May 1, 1998.

(ii) Form of New England Mutual Life Insurance Company Contract Loan
Endorsement is incorporated herein by reference to Post-Effective Amendment
No. 2 to the Registration Statement on Form N-4 (No. 333-11131) filed on
May 1, 1998.

(iii) Forms of New England Mutual Life Insurance Company Endorsements,
(Death of Owner, Individual Retirement Annuity, and Sample of Benefits for
Disability of Annuitant) are incorporated herein by reference to Post-
Effective Amendment No. 2 to the Registration Statement on Form N-4 (No.
333-11131) filed on May 1, 1998.

(iv) Forms of Metropolitan Life Insurance Company Endorsements (New
Contract Loan, Spousal/Beneficiary Continuation) are incorporated herein by
reference to Post-Effective Amendment No. 2 to the Registration Statement
on Form N-4 (No. 333-11131) filed on May 1, 1998.

(v) Form of Metropolitan Life Insurance Company Endorsement to New England
Mutual Life Insurance Company Variable Annuity Contract (See (4)(i) above)
is incorporated herein by reference to the Registration Statement on Form
N-4 (No. 333-11131) filed on August 30, 1996.

(vi) Metropolitan Life Insurance Company Variable Annuity Contract and
Application are incorporated herein by reference to the Registration
Statement on Form N-4 (No. 333-11131) filed on August 30, 1996.

(vii) Forms of Metropolitan Life Insurance Company Endorsements (Fixed
Account, Contract Loans, Tax-Sheltered Annuity, Periodic Reports and
Postponement of Surrender) are incorporated herein by reference to the
Registration Statement on Form N-4 (No. 333-11131) filed on August 30,
1996.

(viii) Forms of New England Mutual Life Insurance Company Endorsements
(Contract Loans, Fixed Account, Tax-Sheltered Annuity and Rider Benefits of
Disability of Annuitant and Modification of Variable Life Income Section
and New York Endorsement) is incorporated by reference to Post-Effective
Amendment No. 3 to the Registration Statement on Form N-4 (No. 333-11131)
filed on February 26, 1999.

III-2
<PAGE>

(ix) Form of Metropolitan Life Insurance Company Endorsement (Roth
Individual Retirement Annuity) is incorporated herein by reference to Post-
Effective Amendment No. 3 to the Registration Statement on Form N-4 (No.
333-11131) filed on February 26, 1999.

(x) Forms of Endorsements (Fixed Account and Postponement of Fixed Account
Values) are incorporated herein by reference to Post-Effective Amendment
No. 4 to the Registration Statement on Form N-4 (No. 333-11131) filed on
April 26, 1999.

(xi) Forms of Endorsements (TSA)

(5) (i) New England Mutual Life Insurance Company Application is incorporated
herein by reference to Post-Effective Amendment No. 3 to the Registration
Statement on Form N-4 (No. 333-11131) filed on February 26, 1999.

(ii) For Metropolitan Life Insurance Company Application see (4)(vi) above.

(6) (i) Charter and By-Laws of Metropolitan Life Insurance Company are
incorporated herein by reference to the Registration Statement on Form N-4
(No. 333-11131) filed on August 30, 1996.

(ii) By-Laws Amendment is incorporated herein by reference to the
Registration Statement on Form N-4 (No. 333-11131) filed on August 30,
1996.

(iii) Amended and Restated Charter and By-Laws of Metropolitan Life
Insurance Company.

(7) None

(8) (i) Administrative Services Agreement is incorporated herein by reference
to the Registration Statement on Form N-4 (No. 333-11131) filed on August
30, 1996.

(ii) Participation Agreement Among Variable Insurance Products Fund,
Fidelity Distributors Corporation and New England Mutual Life Insurance
Company is incorporated herein by reference to Post-Effective Amendment No.
2 to the Registration Statement on Form N-4 (No. 333-11131) filed on May 1,
1998.

(iii) Amendment No. 1 to Participation Agreement Among Variable Insurance
Products Fund, Fidelity Distributors Corporation and New England Mutual
Life Insurance Company is incorporated by reference to Post-Effective
Amendment No. 15 to the Registration Statement on Form N-4 (No. 33-17377)
filed on April 1, 1996.

(iv) Assignment of Participation Agreement from New England Mutual Life
Insurance Company to Metropolitan Life Insurance Company is incorporated
herein by reference to the Registration Statement on Form N-4 (No. 333-
11131) filed on August 30, 1996.

III-3
<PAGE>

(v) Form of Participation Agreement between Metropolitan Series Fund, Inc.
and Metropolitan Life Insurance Company is incorporated by reference to
Post-Effective Amendment No. 26 to the Registration Statement on Form N-1A
(File No. 2-80751) filed April 6, 2000.

(9) Opinion and consent of Christopher P. Nicholas, Esq.

(10) (i) Consent of Deloitte & Touche LLP.

(ii) Consent of Sutherland Asbill and Brennan LLP.

(11) None

(12) None

(13) Schedule of computations for performance quotations is incorporated herein
by reference to Post-Effective Amendment No. 2 to the Registration
Statement on Form N-4 (No. 333-11131) filed on May 1, 1998.

(14) Powers of Attorney are incorporated herein by reference to the Registration
Statement on Form N-4 (No. 333-11131) filed on August 30, 1996, except for
Gerald Clark, Burton A. Dole and Charles M. Leighton whose powers of
attorney were filed with Post-Effective Amendment No. 1 to the Registration
Statement (File No. 333-11131) on April 30, 1997 and Robert H. Benmosche
and Stewart G. Nagler whose powers of attorney were filed with Post-
Effective Amendment No. 23 to the Registration Statement of Metropolitan
Life Separate Account E (File No. 2-90380) filed April 3, 1998. Power of
Attorney for Virginia M. Wilson is incorporated herein by reference to Pre-
Effective Amendment No. 2 to Registration Statement of Metropolitan Life
Separate Account (File No. 333-80547) filed November 1, 1999.

ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR

<TABLE>
<CAPTION>
Name Principal Occupation and Positions and Offices
---- ------------------------ ---------------------
Business Address with Depositor
---------------- --------------
<S> <C> <C>
Curtis H. Barnette Chairman and Chief Director
Executive Officer
Bethlehem Steel Corporation
1170 Eighth Avenue
Martin Tower 2118
Bethlehem, PA 18016-7699
</TABLE>

III-4
<PAGE>

<TABLE>
<CAPTION>
Name Principal Occupation and Positions and Offices
---- ------------------------ ---------------------
Business Address with Depositor
---------------- --------------
<S> <C> <C>
Robert H. Benmosche Chairman of the Board, President Chairman of the Board,
and Chief Executive Officer President and Chief Executive
Metropolitan Life Insurance Officer
Company
One Madison Avenue,
New York, NY 10010

Gerald Clark Vice-Chairman of the Board and Vice-Chairman of the Board and
Chief Investment Officer Chief Investment Officer
Metropolitan Life Insurance
Company
One Madison Avenue
New York, NY 10010

Joan Ganz Cooney Chairman, Executive Committee Director
Children's Television Workshop
One Lincoln Plaza
New York, NY 10023

Burton A. Dole, Jr. Retired Chairman, President and Director
Chief Executive Officer
Nellcor Puritan Bennett
2200 Faraday Avenue
Carlsbad, CA 92008-7208

James R. Houghton Retired Chairman of the Board Director
Corning Incorporated
80 East Market Street, 2nd Floor
Corning, NY 14830

Harry P. Kamen Retired Chairman and Chief Director
Executive Officer
Metropolitan Life Insurance Company
200 Park Avenue, Suite 5700
New York, NY 10166

Helene L. Kaplan Of Counsel, Skadden, Arps Director
Slate Meagher and Flom
919 Third Avenue
New York, NY 10022
</TABLE>

III-5
<PAGE>

<TABLE>
<CAPTION>
Name Principal Occupation and Positions and Offices
---- ------------------------ ---------------------
Business Address with Depositor
---------------- --------------
<S> <C> <C>

Charles H. Leighton Retired Chairman and Chief Director
Executive Officer
CML Group, Inc.
524 Main Street
Bolton, MA 01720

Allen E. Murray Retired Chairman of the Board Director
and Chief Executive Officer
Mobil Corporation
375 Park Avenue, Suite 2901
New York, NY 10152

Stewart G. Nagler Vice-Chairman of the Board and Vice-Chairman of the Board and
Chief Financial Officer Chief Financial Officer
Metropolitan Life Insurance Company
One Madison Avenue
New York, NY 10010

John J. Phelan, Jr. Retired Chairman and Chief Director
Executive Officer
New York Stock Exchange, Inc.
P. O. Box 312
Mill Neck, NY 11765

Hugh B. Price President and Chief Executive Director
Officer
National Urban League, Inc.
120 Wall Street, 7th & 8th Floors
New York, NY 10005

Ruth J. Simmons, PH.D. President Director
Smith College
College Hall 20
North Hampton, MA 01063

William C. Steere, Jr. Chairman of the Board and Chief Director
Executive Officer
Pfizer, Inc.
235 East 42nd Street
New York, NY 10016
</TABLE>

III-6
<PAGE>

Set forth below is a list of certain principal officers of Metropolitan Life.
The principal business address of each officer of Metropolitan Life is One
Madison Avenue, New York, New York 10010.

<TABLE>
<CAPTION>
Name Position with Metropolitan Life
---- -------------------------------
<S> <C>

Robert H. Benmosche Chairman of the Board, President and Chief Executive Officer

Gerald Clark Vice-Chairman of the Board and Chief Investment Officer

Stewart C. Nagler Vice-Chairman of the Board and Chief Financial Officer

Gary A. Beller Senior Executive Vice-President and General Counsel

James H. Benson President, Individual Business, Chief Executive Officer and
President, New England Life Insurance Company
C. Robert Hendrickson Senior Executive Vice-President
Richard A. Liddy Senior Executive Vice-President
Catherine A. Rein Senior Executor Vice-President; President and Chief Executive
Officer of Metropolitan Property and Casualty Insurance Company
William J. Toppeta Senior Executive Vice-President
John H. Tweedie Senior Executive Vice-President
Lisa Weber Senior Vice-President
Judy E. Weiss Executive Vice-President and Chief Actuary
Virginia M. Wilson Senior Vice President and Controller
</TABLE>

The principle occupation of each officer, except the following officers during
the last five years has been as an officer of Metropolitan Life Insurance
Company or an affiliate thereof. Gary A. Beller has been an officer of
Metropolitan Life Insurance Company since November, 1994; prior thereto, he was
a Consultant and Executive Vice-President and General Counsel of the American
Express Company. Robert H. Benmosche has been an officer of Metropolitan Life
Insurance Company since September, 1995; prior thereto, he was an Executive
Vice-President of Paine Webber. Lisa Weber has been an officer of Metropolitan
Life since March 16, 1998; prior thereto she was a Director of Diversity
Strategy and Development and an Associate Director of Human Resources of
PaineWebber. Virginia M. Wilson joined MetLife in 1999; prior thereto, she was a
Senior Vice President and Controller of Transamerica Life Companies and an Audit
Partner with Deloitte & Touche. Richard A. Liddy is Senior Executive Vice
President of General American, a subsidiary of MetLife. The business address of
each officer is One Madison Avenue, New York, New York 10010.

III-7
<PAGE>

ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE INSURANCE
COMPANY OR REGISTRANT.

The registrant is a separate account of Metropolitan Life Insurance Company
under the New York Insurance law. Under said law the assets allocated to the
separate account are the property of Metropolitan Life Insurance Company.
Metropolitan Life Insurance Company is a wholly-owned subsidiary of MetLife,
Inc. a publicly traded company. The following outline indicates those persons
who are controlled by or under common control with Metropolitan Life Insurance
Company:

III-8

<PAGE>
ORGANIZATIONAL STRUCTURE OF METROPOLITAN AND SUBSIDIARIES
AS OF APRIL 3, 2000

The following is a list of subsidiaries of Metropolitan Life Insurance Company
("Metropolitan"). It is expected that Metropolitan will become a wholly-owned
subsidiary of MetLife, Inc. on or about April 7, 2000. MetLife, Inc. will become
a publicly-traded company at that time. Those entities which are listed at the
left margin (labelled with capital letters) are direct subsidiaries of
Metropolitan. Unless otherwise indicated, each entity which is indented under
another entity is a subsidiary of such indented entity and, therefore, an
indirect subsidiary of Metropolitan. Certain inactive subsidiaries have been
omitted from the Metropolitan Organizational listing. The voting securities
(excluding directors' qualifying shares, if any) of the subsidiaries listed are
100% owned by their respective parent corporations, unless otherwise indicated.
The jurisdiction of domicile of each subsidiary listed is set forth in the
parenthetical following such subsidiary.

A. Metropolitan Tower Corp. (Delaware)

1. Metropolitan Property and Casualty Insurance Company (Rhode Island)

a. Metropolitan Group Property and Casualty Insurance Company
(Rhode Island)

i. Metropolitan Reinsurance Company (U.K.) Limited (Great
Britain)

b. Metropolitan Casualty Insurance Company (Rhode Island)
c. Metropolitan General Insurance Company (Rhode Island)
d. Metropolitan Direct Property and Casualty Insurance Company
(Georgia)
e. Metropolitan P&C Insurance Services, Inc. (California)
f. Metropolitan Lloyds, Inc. (Texas)
g. Met P&C Managing General Agency, Inc. (Texas)

h. Economy Fire & Casualty Company
i. Economy Preferred Insurance Company
j. Economy Premier Assurance Company

2. Metropolitan Insurance and Annuity Company (Delaware)

a. MetLife Europe I, Inc. (Delaware)
b. MetLife Europe II, Inc. (Delaware)
c. MetLife Europe III, Inc. (Delaware)
d. MetLife Europe IV, Inc. (Delaware)
e. MetLife Europe V, Inc. (Delaware)

3. MetLife General Insurance Agency, Inc. (Delaware)

a. MetLife General Insurance Agency of Alabama, Inc. (Alabama)
b. MetLife General Insurance Agency of Kentucky, Inc. (Kentucky)
c. MetLife General Insurance Agency of Mississippi, Inc.
(Mississippi)
d. MetLife General Insurance Agency of Texas, Inc. (Texas)
e. MetLife General Insurance Agency of North Carolina, Inc. (North
Carolina)
f. MetLife General Insurance Agency of Massachusetts, Inc.
(Massachusetts)

<PAGE>

4. Metropolitan Asset Management Corporation (Delaware)

(a.) MetLife Capital, Limited Partnership (Delaware).
Partnership interests in MetLife Capital, Limited
Partnership are held by Metropolitan (90%) and
Metropolitan Asset Management Corporation (10%).

(i.) MetLife Capital Credit L.P. (Delaware).
Partnership interests in MetLife Capital Credit
L.P. are held by Metropolitan (90%) and
Metropolitan Asset Management Corporation (10%).

(1) MetLife Capital CFLI Holdings, LLC (DE)

(a.) MetLife Capital CFLI Leasing, LLC
(DE)

b. MetLife Financial Acceptance Corporation (Delaware).
MetLife Capital Holdings, Inc. holds 100% of the voting
preferred stock of MetLife Financial Acceptance Corporation.
Metropolitan Property and Casualty Insurance Company holds
100% of the common stock of MetLife Financial Acceptance
Corporation.

c. MetLife Investments Limited (United Kingdom). 23rd Street
Investments, Inc. holds one share of MetLife Investments
Limited.

d. MetLife Investments Asia Limited (Hong Kong). One share of
MetLife Investments Asia Limited is held by W&C Services, Inc.,
a nominee of Metropolitan Asset Management Corporation.

e. MetLife Investment, S.A. 23rd Street Investment, Inc. holds one
share of MetLife Investments Limited and MetLife Investments,
S.A.

5. SSRM Holdings, Inc. (Delaware)

a. State Street Research & Management Company (Delaware). Is a
sub-investment manager for the Growth, Income, Diversified
and Aggressive Growth Portfolios of Metropolitan Series
Fund, Inc.

i. State Street Research Investment Services, Inc.
(Massachusetts)

<PAGE>

b. SSR Realty Advisors, Inc. (Delaware)

i. Metric Management Inc. (Delaware)
ii. Metric Property Management, Inc. (Delaware)

(1) Metric Realty (Delaware). SSR Realty Advisors, Inc.
and Metric Property Management, Inc. each hold 50% of
the common stock of Metric Realty.

(2) Metric Colorado, Inc. (Colorado). Metric Property
Management, Inc. holds 80% of the common stock of
Metric Colorado, Inc.

iii. Metric Capital Corporation (California)
iv. Metric Assignor, Inc. (California)
v. SSR AV, Inc. (Delaware)

6. MetLife Holdings, Inc. (Delaware)

a. MetLife Funding, Inc. (Delaware)
b. MetLife Credit Corp. (Delaware)

7. Metropolitan Tower Realty Company, Inc. (Delaware)

8. Security First Group, Inc. (DE)

a. Security First Life Insurance Company (DE)
b. Security First Insurance Agency, Inc. (MA)
c. Security First Insurance Agency, Inc. (NV)
d. Security First Group of Ohio, Inc. (OH)
e. Security First Financial, Inc. (DE)
f. Security First Investment Management Corporation (DE)
g. Security First Financial Agency, Inc. (TX)

9. Natiloportem Holdings, Inc. (Delaware)

a. Services Administrativos Gen, S.A. de CV One Share of Servicos
Administrativos Gen. S.A. de C.V. is held by a nominee of
Natiloportem Holdings, Inc.

B. Metropolitan Tower Life Insurance Company (Delaware)

C. MetLife Security Insurance Company of Louisiana (Louisiana)

<PAGE>

D. MetLife Texas Holdings, Inc. (Delaware)

1. Texas Life Insurance Company (Texas)

a. Texas Life Agency Services, Inc. (Texas)

b. Texas Life Agency Services of Kansas, Inc. (Kansas)

E. MetLife Securities, Inc. (Delaware)

F. 23rd Street Investments, Inc. (Delaware)

G. Santander Met, S.A. (Spain). Shares of Santander Met, S.A. are held by
Metropolitan (50%) and by an entity (50%) unaffiliated with Metropolitan.

1. Seguros Genesis, S.A. (Spain)
2. Genesis Seguros Generales, Sociedad Anomina de Seguros y Reaseguros
(Spain)

I. MetLife Saengmyoung Insurance Company Ltd. (Korea).

J. Metropolitan Life Seguros de Vida S.A. (Argentina)

K. Metropolitan Life Seguros de Retiro S.A. (Argentina).

L. Met Life Holdings Luxembourg (Luxembourg)

M. Metropolitan Life Holdings, Netherlands BV (Netherlands)

N. MetLife International Holdings, Inc. (Delaware)

O. Metropolitan Life Insurance Company of Hong Kong Limited (Hong Kong)

P. Metropolitan Marine Way Investments Limited (Canada)

Q. P.T. MetLife Sejahtera (Indonesia) Shares of P.T. MetLife Sejahtera are
held by Metropolitan (80%) and by an entity (20%) unaffiliated with
Metropolitan.

R. Seguros Genesis S.A. (Mexico) Metropolitan holds 85.49%, Metropolitan Tower
Corp. holds 7.31% and Metropolitan Asset Management Corporation holds 7.20%
of the common stock of Seguros Genesis S.A.

S. Metropolitan Life Seguros de Vida S.A. (Uruguay). One share of Metropolitan
Life Seguros de Vida S.A. is held by Alejandro Miller Artola, a nominee of
Metropolitan Life Insurance Company.

T. Metropolitan Life Seguros E Previdencia Privada S.A. (Brazil)

<PAGE>

U. MetLife (India) Ltd.

V. Hyatt Legal Plans, Inc. (Delaware)

1. Hyatt Legal Plans of Florida, Inc. (Fl)

W. One Madison Merchandising L.L.C. (Connecticut) Ownership of membership
interests in One Madison Merchandising L.L.C. is as follows: Metropolitan
owns 99% and Metropolitan Tower Corp. owns 1%.

X. Metropolitan Realty Management, Inc. (Delaware)

1. Edison Supply and Distribution, Inc. (Delaware)
2. Cross & Brown Company (New York)

a. CBNJ, Inc. (New Jersey)

Y. MetPark Funding, Inc. (Delaware)

Z. Transmountain Land & Livestock Company (Montana)

AA. Farmers National Company (Nebraska)

1. Farmers National Commodities, Inc. (Nebraska)

A.B. MetLife Trust Company, National Association. (United States)
A.C. Benefit Services Corporation (Georgia)
A.D. G.A. Holding Corporation (MA)
A.E. MetLife, Inc.
A.F. CRH., Co, Inc. (MA)
A.G. 334 Madison Euro Investments, Inc.
A.H. Park Twenty Three Investments Company 1% Voting Control of Park Twenty
Three Investment Company is held by St. James Fleet Investments Two
Limited
a. Convent Stution Euro Investments Four Company 1% voting control of
Convert Stution Euro Investments Four Company is held by 334 Madison
Euro Investments, Inc. as nominee for Park Twenty Three Investments
Company.
A.I. L/C Development Corporation (CA)
A.J. One Madison Investments (Cayco) Limited 1% Voting Control of One Madison
Investment (Cayco) Limited is held by Convent Station Euro Investments
Four Company.
A.K. New England Portfolio Advisors, Inc. (MA)
A.L. CRB Co., Inc. (MA) AEW Real Estate Advisors, Inc. holds 49,000 preferred
non-voting shares of CRB Co., Inc. AEW Advisors, Inc. holds 1,000
preferred non-voting shares of CRB Co., Inc.
A.M. New England Life Mortgage Funding Corporation (MA)
A.N. Mercadian Capital L.P. (DE). Metropolitan holds a 95% limited partner
interest and an unaffiliated third party holds 5% of Mercadian Capital
L.P.
A.O. Mercadian Funding L.P. (DE). Metropolitan holds a 95% limited partner
interest and an unaffiliated third party holds 5% of Mercadian
Funding L.P.
A.P. St. James Fleet Investments two Limited.

<PAGE>

A.Q. MetLife New England Holdings, Inc. (DE)
1. Fulcrum Financial Advisors, Inc. (MA)
2. New England Life Insurance Company (MA)
a. New England Life Holdings, Inc. (DE)
i. New England Securities Corporation (MA)
(1) Hereford Insurance Agency, Inc. (MA)
(2) Hereford Insurance Agency of Alabama, Inc. (AL)
(3) Hereford Insurance Agency of Minnesota, Inc. (MN)
(4) Hereford Insurance Agency of Ohio, Inc. (OH)
(5) Hereford Insurance Agency of New Mexico, Inc. (NM)
(6) Hereford Insurance Agency of Wyoming, Inc.
(7) Hereford Insurance Agency of Oklahoma, Inc.

ii. TNE Information Services, Inc. (MA)
(1) First Connect Insurance Network, Inc. (DE)
(2) Interative Financial Solutions, Inc. (MA)
iii. N.L. Holding Corp. (Del)(NY)
(1) Nathan & Lewis Securities, Inc. (NY)
(2) Nathan & Lewis Associates, Inc. (NY)
(a) Nathan and Lewis Insurance Agency of Massachusetts,
Inc. (MA)
(b) Nathan and Lewis Associates of Texas, Inc. (TX)
(3) Nathan & Lewis Associates--Arizona, Inc. (AZ)
(4) Nathan & Lewis of Nevada, Inc. (NV)
(5) Nathan and Lewis Associates Ohio, Incorporated (OH)

iv. New England Securities Corporation
v. New England Investment Management Inc.

b. Exeter Reassurance Company, Ltd. (MA)
c. Omega Reinsurance Corporation (AZ)
d. New England Pension and Annuity Company (DE)
e. Newbury Insurance Company, Limited (Bermuda)

A.R. General American Life
1. General American Life Insurance Company
a. GenAm Benefits Life Insurance Company
b. Paragon Life Insurance Company
c. Security Equity Life Insurance Company
d. Cova Corporation
i. Cova Financial Services Life Insurance Company
(1) Cova Financial Life Insurance Company
(2) First Cova Life Insurance Company
ii. Cova Investment Advisory Corporation
(1) Cova Investment Advisory Corporation
(2) Cova Investment Allocution Corporation
(3) Cova Life Sales Company
(4) Cova Life Administration Services Company
e. General Life Insurance Company
i. General Life Insurance Company of America
f. Equity Intermediary Company
i. Reinsurance Group of America, Incorporated
1. Reinsurance Company of Missouri Incorporated
a. RGA Reinsurance Company
b. Fairfield Management Group, Inc.
i. Reinsurance Partners, Inc.
ii. Great Rivers Reinsurance Management, Inc.
iii. RGA (U.K.) Underwriting Agency Limited
2. Triad Re, Ltd
3. RGA Americas Reinsurance Company, Ltd.
4. RGA Reinsurance Company (Barbados) Ltd.
(a) RGA/Swiss Financial Group, L.L.C.
5. RGA International Ltd.
(a) RGA Financial Products Limited
(b) RGA Canada Management Company, Ltd.
(i) RGA Life Reinsurance Company of Canada
6. Benefit Resource Life Insurance Company (Bermuda) Ltd.
7. RGA Holdings Limited
(a) RGA Managing Agency Limited
(b) RGA Capital Limited
8. RGA South African Holdings (Pty) Ltd.
(a) RGA Reinsurance Company of South Africa Limited
9. RGA Australian Holdings Pty Limited
(a) RGA Reinsurance Company of Australia Limited
10. General American Argentina Seguros
11. RGA Argentina, S.A.
12. RGA Sudamerica, S.A.
(a) RGA Reinsurance
(b) BHIF American Seguros de Vida, S.A.

g. GenAm Holding Company
i. NaviSys Incorporated
ii. NaviSys Illustration Solutions, Inc.
iii. NaviSys Asia Pacifica Limited
iv. NaviSys de Mexico S.A. de C.V.
99% of the shares of NaviSys de Mexico S.A. de C.V. are held
by NaviSys Incorporated and 1% is held by General American
Life Insurance Company.
v. NaviSys Enterprise Solutions, Inc.
vi. Red Oak Realty Company
vii. White Oak Royalty Company
viii. GenMark Incorporated
(a) Stan Mintz Associates, Inc.
(b) GenMark Insurance Agency of Alabama, Inc.
(c) GenMark Insurance Agency of Massachusetts, Inc.
(d) GenMark Insurance Agency of Ohio, Inc.
(e) GenMark Insurance Agency of Texas, Inc.
ix. Conning Corporation
(a) Conning, Inc.
(i) Conning & Company
(1) Conning Asset Management Company

2. Collaborative Strategies, Inc.
3. Virtual Finances.Com, Inc.
4. Missouri Reinsurance (Barbados) Inc.
5. GenAmerican Capital I
6. GenAmerican Management
7. Walnut Street Securities, Inc.
a. WSS Insurance Agency of Alabama, Inc.
b. WSS Insurance Agency of Massachusetts, Inc.
c. WSS Insurance Agency of Ohio, Inc.
d. WSS Insurance Agency of Texas, Inc.
e. Walnut Street Advisers, Inc.

3. Nvest Corporation (MA)
a. Nvest, L.P. (DE) Nvest Corporation holds a 1.69% general partnership
interest and MetLife New England Holdings, Inc. 3.19% general
partnership interest in Nvest, L.P.
b. Nvest Companies, L.P. (DE) Nvest Corporation holds a 0.0002% general
partnerhship interest in Nvest Companies, L.P. Nvest, L.P. holds a
14.64% general partnership interest in Nvest Companies, L.P.
Metropolitan holds a 46.23% limited partnership interest in Nvest
Companies, L.P.
i. Nvest Holdings, Inc. (DE)
(1) Back Bay Advisors, Inc. (MA)
(a) Back Bay Advisors, L.P. (DE)
Back Bay Advisors, Inc.
holds a 1% general partner
interest and NEIC
Holdings, Inc. holds a 99%
limited partner interest
in Back Bay Advisors, L.P.
(2) R & T Asset Management, Inc. (MA)
(a) Reich & Tang Distributors, Inc. (DE)
(b) Reich & Tang Asset Management
R & T Asset Management, Inc.
holds a 0.5% general partner interest and
NEIC Holdings, Inc. hold a 99.5% limited
partner interest in &
Asset Management, L.P.
(c) Reich & Tang Services, Inc. (DE)

<PAGE>

(3) Loomis, Sayles & Company, Inc. (MA)
(a) Loomis Sayles & Company, L.P. (DE)
Loomis Sayles & Company, Inc.
holds a 1% general partner interest and
R & T Asset Management, Inc. holds a 99%
limited partner interest in Loomis Sayles &
Company, L.P.
(4) Westpeak Investment Advisors, Inc. (MA)
(a) Westpeak Investment Advisors, L.P. (DE)
Westpeak Investment Advisors, Inc.
holds a 1% general partner interest and
Reich & Tang holds a 99% limited
partner interest in Westpeak Investment
Advisors, L.P.
(i) Westpeak Investment Advisors Australia
Limited Pty.
(5) Vaughan, Nelson Scarborough & McCullough (DE)
(a) Vaughan, Nelson Scarborough & McCullough, L.P. (DE)
VNSM, Inc. holds a 1% general partner interest and
Reich & Tang Asset Management, Inc. holds a 99%
limited partner interest in Vaughan, Nelson
Scarborough & McCullough, L.P.

(i) VNSM Trust Company

(6) MC Management, Inc. (MA)
(a) MC Management, L.P. (DE)
MC Management, Inc. holds a 1% general partner
interest and R & T Asset Management, Inc.
holds a 99% limited partner interest in MC
Management, L.P.
(7) Harris Associates, Inc. (DE)
(a) Harris Associates Securities L.P. (DE)
Harris Associates, Inc. holds a 1% general partner
interest and Harris Associates L.P. holds a
99% limited partner interest in Harris Associates
Securities, L.P.
(b) Harris Associates L.P. (DE)
Harris Associates, Inc. holds a 0.33% general
partner interest and NEIC Operating Partnership,
L.P. holds a 99.67% limited partner interest in
Harris Associates L.P.
(i) Harris Partners, Inc. (DE)
(ii) Harris Partners L.L.C. (DE)
Harris Partners, Inc. holds a 1%
membership interest and
Harris Associates L.P. holds a 99%
membership interest in Harris Partners L.L.C.
(1) Aurora Limited Partnership (DE)
Harris Partners L.L.C. holds a 1% general
partner interest

<PAGE>

(2) Perseus Partners L.P. (DE) Harris Partners
L.L.C. holds a 1% general partner interest

(3) Pleiades Partners L.P. (DE) Harris
Partners L.L.C. holds a 1% general partner
interest

(4) Stellar Partners L.P. (DE)
Harris Partners L.L.C. holds a 1% general
partner interest

(5) SPA Partners L.P. (DE) Harris Partners
L.L.C. holds a 1% general partner interest
(8) Graystone Partners, Inc. (MA)
(a) Graystone Partners, L.P. (DE)
Graystone Partners, Inc. holds a 1%
general partner interest and New England
NEIC Operating Partnership, L.P.
holds a 99% limited partner interest in
Graystone Partners, L.P.

(9) NEF Corporation (MA)
(a) New England Funds, L.P. (DE) NEF Corporation holds a
1% general partner interest and NEIC Operating
Partnership, L.P. holds a 99% limited
partner interest in New England Funds, L.P.
(b) New England Funds Management, L.P. (DE) NEF
Corporation holds a 1% general partner interest and
NEIC Operating Partnership, L.P. holds a 99%
limited partner interest in New England Funds
Management, L.P.
(10) New England Funds Service Corporation
(11) AEW Capital Management, Inc. (DE)
(a) AEW Securities, L.P. (DE) AEW Capital Management, Inc. holds
a 1% general partnership and AEW Capital Management, L.P.
holds a 99% limited partnership interest in AEW Securities,
L.P.
ii. Nvest Associates, Inc.
iii. Snyder Capital Management, Inc.
(1) Snyder Capital Management, L.P. NEIC Operating
Partnership holds a 99.5% limited partnership
interest and Snyder Capital Management Inc. holds a
0.5% general partnership interest.
iv. Jurika & Voyles, Inc.
(1) Jurika & Voyles, L.P NEIC Operating Partnership,
L.P. holds a 99% limited partnership interest and
Jurika & Voyles, Inc. holds a 1% general partnership
interest.
v. Capital Growth Management, L.P. (DE)
NEIC Operating Partnership, L.P. holds a 50% limited partner
interest in Capital Growth Management, L.P.
vi. Nvest Partnerships, LLC ( )

<PAGE>

vii. AEW Capital Management L.P. (DE)
New England Investment Companies, L.P. holds a 99% limited partner
interest and AEW Capital Management, Inc. holds a 1% general
partner interest in AEW Capital Management, L.P.
(1) AEW II Corporation ( )
(2) AEW Partners III, Inc. ( )
(3) AEW TSF, Inc. ( )
(4) AEW Exchange Management, LLC
(5) AEWPN, LLC ( )
(6) AEW Investment Group, Inc. (MA)
(a) Copley Public Partnership Holding, L.P. (MA)
AEW Investment Group, Inc. holds a 25% general partnership
interest and AEW Capital Management, L.P. holds a 75%
limited partnership interest in Copley Public Partnership
Holding, L.P.
(b) AEW Management and Advisors L.P. (MA)
AEW Investment Group, Inc. holds a 25% general partnership
interest and AEW Capital Management, L.P. holds a 75% limited
partnership interest in AEW Management and Advisors L.P.
ii. AEW Real Estate Advisors, Inc. (MA)
1. AEW Advisors, Inc. (MA)
2. Copley Properties Company, Inc. (MA)
3. Copley Properties Company II, Inc. (MA)
4. Copley Properties Company III, Inc. (MA)
5. Fourth Copley Corp. (MA)
6. Fifth Copley Corp. (MA)
7. Sixth Copley Corp. (MA)
8. Seventh Copley Corp. (MA).
9. Eighth Copley Corp. (MA).
10. First Income Corp. (MA).
11. Second Income Corp. (MA).
12. Third Income Corp. (MA).
13. Fourth Income Corp. (MA).
14. Third Singleton Corp. (MA).
15. Fourth Singleton Corp. (MA)
16. Fifth Singleton Corp. (MA)
17. Sixth Singleton Corp. (MA).
18. BCOP Associates L.P. (MA)
AEW Real Estate Advisors, Inc. holds a 1% general
partner interest in BCOP Associates L.P.
ii. CREA Western Investors I, Inc. (MA)
1. CREA Western Investors I, L.P. (DE)
CREA Western Investors I, Inc. holds a 24.28% general
partnership interest and Copley Public Partnership Holding,
L.P. holds a 57.62% limited partnership interest in CREA
Western Investors I, L.P.
iii. CREA Investors Santa Fe Springs, Inc. (MA)

(7) Copley Public Partnership Holding, L.P. (DE)
AEW Capital Management, L.P. holds a 75% limited partner interest and
AEW Investment Group, Inc. holds a 25% general partner interest and
CREA Western Investors I, L.P holds a 57.62% Limited Partnership
interest.

<PAGE>

(8) AEW Real Estate Advisors, Limited Partnership (MA)
AEW Real Estate Advisors, Inc. holds a 25% general partnership interest
and AEW Capital Management, L.P. holds a 75% limited partnership
interest in AEW Real Estate Advisors, Limited Partnership.
(9) AEW Hotel Investment Corporation (MA)
(a.) AEW Hotel Investment, Limited Partnership (MA)
AEW Hotel Investment Corporation holds a 1% general
partnership interest and AEW Capital Management, L.P. holds a
99% limited partnership interest in AEW Hotel Investment,
Limited Partnership.
(10) Aldrich Eastman Global Investment Strategies, LLC (DE)
AEW Capital Management, L.P. holds a 25% membership interest and an
unaffiliated third party holds a 75% membership interest in Aldrich
Eastman Global Investment Strategies, LLC.

In addition to the entities listed above, Metropolitan (or where indicated an
affiliate) also owns an interest in the following entities, among others:

1) CP&S Communications, Inc., a New York corporation, holds federal radio
communications licenses for equipment used in Metropolitan owned facilities and
airplanes. It is not engaged in any business.

2) Quadreal Corp., a New York corporation, is the fee holder of a parcel of
real property subject to a 999 year prepaid lease. It is wholly owned by
Metropolitan, having been acquired by a wholly owned subsidiary of Metropolitan
in 1973 in connection with a real estate investment and transferred to
Metropolitan in 1988.

3) Met Life International Real Estate Equity Shares, Inc., a Delaware
corporation, is a real estate investment trust. Metropolitan owns approximately
18.4% of the outstanding common stock of this company and has the right to
designate 2 of the 5 members of its Board of Directors.

4) Metropolitan Structures is a general partnership in which Metropolitan owns
a 50% interest.

5) Metropolitan owns, via its subsidiary, AFORE Genesis Metropolitan S.A. de
C.V., approximately 61.7% of SIEFORE Genesis S.A. de C.V., a mutual fund.

6) Metropolitan owns varying interests in certain mutual funds distributed by
its affiliates. These ownership interests are generally expected to decrease as
shares of the funds are purchased by unaffiliated investors.

7) Metropolitan Lloyds Insurance Company of Texas, an affiliated association,
provides homeowner and related insurance for the Texas market. It is an
association of individuals designated as underwriters. Metropolitan Lloyds,
Inc., a subsidiary of Metropolitan Property and Casualty Insurance Company ("MET
P&C"), serves as the attorney-in-fact and manages the association.

8) Metropolitan directly owns 100% of the non-voting preferred stock of Nathan
and Lewis Associates Ohio, Incorporated, an insurance agency. 100% of the voting
common stock of this company is held by an individual who has agreed to vote
such shares at the direction of N.L. Holding Corp. (DEL), an indirect wholly
owned subsidiary of Metropolitan.

<PAGE>

9) 100% of the capital stock of Hereford Insurance Agency of Oklahoma, Inc.
(OK) is owned by an officer. New England Life Insurance Company controls the
issuance of additional stock and has certain rights to purchase such officer's
shares.

10) 100% of the capital stock of Fairfield Insurance Agency of Texas, Inc. (TX)
is owned by an officer. New England Life Insurance Company controls the
issuance of additional stock and has certain rights to purchase such officer's
shares.

11) Mezzanine Investment Limited Partnerships ("MILPs"), Delaware limited
partnerships, are investment vehicles through which investments in certain
entities are held. A wholly owned subsidiary of Metropolitan serves as the
general partner of the limited partnerships and Metropolitan directly owns a 99%
limited partnership interest in each MILP. The MILPs have various's ownership
interests in certain companies. The various MILPs own, directly or indirectly,
100% of the voting stock of the following company: Coating Technologies
International, Inc.

NOTE: THE METROPOLITAN LIFE ORGANIZATIONAL CHART DOES NOT INCLUDE REAL ESTATE
JOINT VENTURES AND PARTNERSHIPS OF WHICH METROPOLITAN LIFE AND/OR ITS
SUBSIDIARIES IS AN INVESTMENT PARTNER. IN ADDITION, CERTAIN INACTIVE
SUBSIDIARIES HAVE ALSO BEEN OMITTED.

<PAGE>

ITEM 27. NUMBER OF CONTRACTHOLDERS

As of March 31, 2000, there were 21,616 owners of tax-qualified Contracts and
11,876 owners of non-qualified contracts.

ITEM 28. INDEMNIFICATION

Metropolitan Life Insurance Company has secured a Financial Institutions Bond in
the amount of $50,000,000 subject to a $5,000,000 deductible. Metropolitan
maintains a directors' and officers' liability policy with a maximum coverage of
$300 million under which Metropolitan and New England Securities Corporation,
the Registrant's underwriter (the "Underwriter") as well as certain other
subsidiaries of Metropolitan are covered. A provision in Metropolitan's by-laws
provides for the indemnification (under certain circumstances) of individuals
serving as directors or officers of Metropolitan.

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

ITEM 29. PRINCIPAL UNDERWRITERS

(a) New England Securities Corporation also serves as principal underwriter
for:

New England Zenith Fund
New England Variable Annuity Fund I
New England Life Retirement Investment Account
New England Variable Life Separate Account
New England Variable Annuity Separate Account

(b) The directors and officers of the Registrant's principal underwriter,
New England Securities Corporation, and their addresses are as follows:

III-9
<PAGE>

<TABLE>
<CAPTION>
Name Positions and Offices with Positions and Offices with
Principal Underwriter Registrant
<S> <C> <C>

Thomas W. McConnell* Chairman of the Board, Director, None
President and CEO
Bradley W. Anderson* Vice President None
Steven J. Brash*** Assistant Treasurer None
Mary M. Diggins** Vice President, General Counsel, None
Secretary and Clerk
Thom A. Faria** Director None
Mark A. Greco* Vice President and Chief Operating None
Officer
Gregory M. Harrison*** Assistant Treasurer None
Laura A. Hutner* Vice President None
Mitchell A. Karman** Vice President None
Rebecca Kovatch* Vice President None
Joanne Logue** Vice President None
Genevieve Martin* Vice President None
John Peruzzi** Assistant Vice President and None
Controller

Robert F. Regan** Vice President None
Jonathan M. Rozek* Vice President None
Andrea M. Ruesch* Vice President None
Michael E. Toland* Vice President, Chief Compliance None
Officer, Chief Financial Officer,
Treasurer, Assistant Secretary and
Assistant Clerk
H. James Wilson** Director None

Principal Business Address: *399 Boylston Street, Boston, MA 02116
**501 Boylston Street, Boston, MA 02116
***MetLife - One Madison Avenue, New York, NY
</TABLE>

Net Underwriting Compensation
Name of Principal Discounts and Redemption or Brokerage Other
Underwriter Commissions Annuitization Commissions Compensation
----------------- ----------------- ------------- ----------- ------------

New England
Securities $2,240,122.51 0 0 0
Corporation

</TABLE>

Commissions are paid by the Company directly to agents who are registered
representatives of the Principal Underwriter or to broker-dealers that have
entered into a selling agreement with the principal underwriter with respect to
sales of the Contracts.

III-10
<PAGE>

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS

The following companies will maintain possession of the documents required
by Section 31(a) of the Investment Company Act of 1940 and the Rules thereunder:

(a) Registrant

(b) New England Life Insurance Company
501 Boylston Street Boston,
Massachusetts 02116

(d) New England Securities Corporation
399 Boylston Street
Boston, Massachusetts 02116

ITEM 31. MANAGEMENT SERVICES

Not applicable

ITEM 32. UNDERTAKINGS

Registrant hereby makes the following undertakings:

(1) To file a post-effective amendment to this registration statement as
frequently as is necessary to ensure that the audited financial statements
contained in the registration statement are never more than 16 months old for so
long as payments under the variable annuity contracts may be accepted;

(2) To include either (a) as part of any application to purchase a contract
offered by the prospectus, a space that an applicant can check to request a
Statement of Additional Information or (b) a postcard or similar written
communication affixed to or included in the prospectus that the applicant can
remove to send for a Statement of Additional Information;

(3) To deliver a Statement of Additional Information and any financial
statements required to be made available under this Form N-4 promptly upon
written or oral request;

(4) To offer Contracts to participants in the Texas Optional Retirement Program
in reliance upon Rule 6c-7 of the Investment Company Act of 1940 and to comply
with paragraphs (a)-(d) of that Rule; and

III-11
<PAGE>

(5) To comply with and rely upon the Securities and Exchange Commission No-
Action Letter to the American Council of Life Insurance, dated November 28,
1988, regarding Sections 22(e), 27(c)(1) and 27(d) of the Investment Company Act
of 1940.

Metropolitan Life Insurance Company represents that the fees and charges
deducted under the Contracts described in this Registration Statement, in the
aggregate, are reasonable in relation to the services rendered, the expenses to
be incurred, and the risks assumed by Metropolitan Life Insurance Company under
the Contracts.

III-12
<PAGE>

SIGNATURES

As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant, The New England Variable Account, certifies that it meets
the requirements of Securities Act Rule 485(b) for effectiveness of this
Amendment to the Registration Statement and has caused this Amendment to the
Registration Statement to be signed on its behalf, in the City of New York, and
the State of New York on the 26th day of April, 2000.

THE NEW ENGLAND VARIABLE ACCOUNT

BY: METROPOLITAN LIFE INSURANCE COMPANY

BY: /s/ GARY A. BELLER, ESQ.
------------------------------

GARY A. BELLER, ESQ.
SENIOR EXECUTIVE VICE PRESIDENT
AND GENERAL COUNSEL

Attest: /s/ Cheryl D. Martino
---------------------
Cheryl D. Martino
Assistant Secretary

III-13
<PAGE>

SIGNATURES

As required by the Securities Act of 1933 and the Investment Company Act of
1940, Metropolitan Life Insurance Company certifies that it meets the
requirements of Securities Act Rule 485(b) for effectiveness of this Amendment
to the Registration Statement and has caused this Amendment to the Registration
Statement to be signed on its behalf, in the City of New York, and the State of
New York on the 26th day of April, 2000.

METROPOLITAN LIFE INSURANCE COMPANY

BY: /s/ GARY A. BELLER, ESQ.
------------------------

GARY A. BELLER, ESQ.
SENIOR EXECUTIVE VICE PRESIDENT
AND GENERAL COUNSEL

Attest: /s/ Cheryl D. Martino
---------------------
Cheryl D. Martino
Assistant Secretary

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons, in the
capacities indicated, on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE Title Date
--------- ----- ----
<S> <C> <C>
Chairman of the Board, President and
* Chief Executive Officer April 26, 2000
- -------------------------------------------
ROBERT H. BENMOSCHE
Vice-Chairman of the Board and
* Chief Financial Officer (Principal April 26, 2000
- ------------------------------------------- Financial Officer)
STEWART G. NAGLER

Senior Vice President and Controller
* (Principal Accounting Officer) April 26, 2000
- -------------------------------------------
VIRGINIA M. WILSON

* Director April 26, 2000
- -------------------------------------------
CURTIS H. BARNETTE
</TABLE>

III-14
<PAGE>

<TABLE>
<CAPTION>
SIGNATURE Title Date
--------- ----- ----
<S> <C> <C>
Vice Chairman of the Board and Chief
* Investment Officer April 26, 2000
- -------------------------------------------
GERALD CLARK

* Director April 26, 2000
- -------------------------------------------
JOAN GANZ COONEY

* Director April 26, 2000
- -------------------------------------------
BURTON A. DOLE, JR.

* Director April 26, 2000
- -------------------------------------------
JAMES R. HOUGHTON

* Director April 26, 2000
- -------------------------------------------
HARRY P. KAMEN

* Director April 26, 2000
- -------------------------------------------
HELENE L. KAPLAN

* Director April 26, 2000
- -------------------------------------------
CHARLES H. LEIGHTON

* Director April 26, 2000
- -------------------------------------------
ALLEN E. MURRAY

* Director April 26, 2000
- -------------------------------------------
JOHN J. PHELAN, JR.

* Director April 26, 2000
- -------------------------------------------
HUGH B. PRICE
</TABLE>

III-15
<PAGE>

<TABLE>
<CAPTION>
SIGNATURE Title Date
--------- ----- ----

<S> <C> <C>
* Director April 26, 2000
- -------------------------------------------
RUTH J. SIMMONS, Ph.D.

Director April 26, 2000
- -------------------------------------------
WILLIAM C. STEERE, JR.

April 26, 2000
/s/ CHRISTOPHER P. NICHOLAS
- -------------------------------------------
CHRISTOPHER P. NICHOLAS, ESQ.
ATTORNEY-IN-FACT
</TABLE>

* Executed by Christopher P. Nicholas, Esq. on behalf of those indicated
pursuant to Powers of Attorney filed with the Registration Statement on Form N-4
(No. 333-11131) filed on August 30, 1996 except for Gerald Clark, Burton A. Dole
and Charles M. Leighton whose powers of attorney were filed with Post-Effective
Amendment No. 1 to the Registration Statement (File No. 333-11131) on April 30,
1997 and Robert H. Benmosche and Stewart G. Nagler whose powers of attorney were
filed with Post-Effective Amendment No. 23 to the Registration Statement of
Metropolitan Life Separate Account E (File No. 2-90380) filed April 3, 1998.
Power of Attorney for Virginia M. Wilson is incorporated herein by reference to
Pre-Effective Amendment No. 2 to Registration Statement of Metropolitan Life
Separate Account (File No. 333-80547) filed November 1, 1999.

u:\zava-va-2000.doc
485(b) Filing
April 25, 2000

III-16
<PAGE>

EXHIBIT INDEX
-------------

(2) None

(3) (i) Distribution Agreement is incorporated herein by reference to the
Registration Statement on Form N-4 (No. 333-11131) filed on August 30, 1996.

(4) (i) Form of New England Mutual Life Insurance Company Variable Annuity
Contract is incorporated herein by reference to Post-Effective Amendment No.
2 to the Registration Statement on Form N-4 (No. 333-11131) filed on May 1,
1998.

(ii) Form of New England Mutual Life Insurance Company Contract Loan
Endorsement_is incorporated herein by reference to Post-Effective Amendment
No. 2 to the Registration Statement on Form N-4 (No. 333-11131) filed on May
1, 1998.

(iv) Forms of Metropolitan Life Insurance Company Endorsements (New Contract
Loan, Spousal/Beneficiary Continuation) are incorporated herein by reference
to Post-Effective Amendment No. 2 to the Registration Statement on Form N-4
(No. 333-11131) filed on May 1, 1998.

(viii) Forms of New England Mutual Life Insurance Company Endorsements
(Contract Loans, Fixed Account, Tax-Sheltered Annuity and Rider Benefits of
Disability of Annuitant and Modification of Variable Life Income Section and
New York Endorsement) is incorporated by reference to Post-Effective
Amendment No. 3 to the Registration Statement on Form N-4 (No. 333-11131)
filed on February 26, 1999.

(x) Forms of Endorsements (Fixed Account and Postponement of Fixed Account
Values) are incorporated herein by reference to Post-Effective Amendment No.
4 to the Registration Statement on Form N-4 (No. 333-11131) filed on April
26, 1999.

(xi) Forms of Endorsements (TSA)

(ii) For Metropolitan Life Insurance Company Application see (4)(vi) above.

(6) (i) Charter and By-Laws of Metropolitan Life Insurance Company are
incorporated herein by reference to the Registration Statement on Form N-4
(No. 333-11131) filed on August 30, 1996.

(ii) By-Laws Amendment is incorporated herein by reference to the
Registration Statement on Form N-4 (No. 333-11131) filed on August 30, 1996.

(iii) Amended and Restated Charter and By-Laws of Metropolitan Life
Insurance Company.

(7) None

(8) (i) Administrative Services Agreement is incorporated herein by reference to
the Registration Statement on Form N-4 (No. 333-11131) filed on August 30,
1996.

(ii) Participation Agreement Among Variable Insurance Products Fund,
Fidelity Distributors Corporation and New England Mutual Life Insurance
Company is

2
<PAGE>

incorporated herein by reference to Post-Effective Amendment No. 2 to the
Registration Statement on Form N-4 (No. 333-11131) filed on May 1, 1998.

(iii) Amendment No. 1 to Participation Agreement Among Variable Insurance
Products Fund, Fidelity Distributors Corporation and New England Mutual Life
Insurance Company is incorporated by reference to Post-Effective Amendment
No. 15 to the Registration Statement on Form N-4 (No. 33-17377) filed on
April 1, 1996.

(9) Opinion and consent of Christopher P. Nicholas, Esq.

(10) (i) Consent of Deloitte & Touche LLP.

(ii) Consent of Sutherland Asbill and Brennan LLP.

(11) None

(12) None

<PAGE>

- --------------------------------------------------------------------------------
Endorsement: Tax-Sheltered Annuity Endorsement To Qualify the Contract under
Section 403(b) of the Internal Revenue Code of 1986 ("the Code")

1. Provisions for Certain Qualified Plan Contracts

In order to comply with provisions of the Internal Revenue Code, the terms
of this endorsement shall amend the Contract and override all conflicting
provisions of the Contract. It shall be effective as of the Date of Issue
of the Contract for Contracts intended to qualify under the Code Section
403(b).

2. Restriction on Transferability

This Contract is for the exclusive benefit of the Annuitant and his/her
beneficiaries. It is not transferable by the Owner, and the Owner's
interest in the Contract is nonforfeitable. The Owner of the Contract is
the Annuitant.

Except for contract loans permitted under Code Section 72(p) and Section 5
of this Endorsement, the Contract may not be sold, assigned, discounted, or
pledged as collateral or as security for the performance of an obligation
or for any other purpose, pursuant to Code Sections 401(a) and 403(b).

3. Limit on Contributions

Premiums, contributions or purchase payments under this Contract and all
other Section 403(b) policies issued to the same Owner may not exceed the
limitations in Code Sections 403(b)(2), 415 or the limitations of Code
Section 402(g) that apply to salary reduction elective deferrals under this
Contract and all other contracts and plans through your employer. The
Company will also accept purchase payments resulting from eligible rollover
distributions under Code Sections 403(b)(8) and 408(d)(3)(A)(iii) and
transfers from other tax-sheltered annuities in accordance with Rev. Rul.
90-24.

If permitted under Federal tax law and under your employer's 403(b) plan,
purchase payments in excess of the permissible limitations under Sections
403(b) or 415 may be retained under this contract and treated as after-tax
employee purchase payments.

4. Payments Prior to Age 59 1/2

Salary reduction elective deferral premiums, contributions or purchase
payments after 1988 and the earnings credited to those payments cannot be
withdrawn until the Owner attains age 59 1/2, retires, terminates
employment, becomes disabled, encounters financial hardship or dies. This
restriction also applies to earnings after 1988 on amounts attributable to
pre-1989 elective deferral premiums, contributions or purchase payments. We
are required by Code Section 403(b)(11) to prohibit these withdrawals.

To the extent that we are required to apply the withdrawal restrictions of
the Code Section 403(b)(7)(A)(ii) to balances transferred on a non-taxable
basis into this Contract, we will do so.

"Disabled" means there is a medically determinable disability of such a
nature that the Owner is unable to engage in any substantial gainful
activity and that can be expected to result in death or be of long,
continued and indefinite duration.

Any request for withdrawal will be approved upon evidence that the
withdrawal satisfies applicable requirements of law or regulations.

In the case of financial hardship withdrawals will not include any earnings
on the contributions, purchase payments and premiums made through salary
reductions.
<PAGE>

- --------------------------------------------------------------------------------
5. Contract Loans

If your Contract permits loans, the following rules apply. Contract Loans
must be repaid within 5 years from the date of the loan. Such repayment
must be on a level basis over the 5-year period with repayments being made
at least monthly. If the Contract Loan is made to acquire a dwelling unit
which is to be used within a reasonable time as the principal residence of
the Owner, it must be repaid within a reasonable time but not limited to 5
years.

Such Contract Loan shall not exceed the lesser of (a) or (b), where (a)
equals $50,000 less the excess (if any) of (i) the highest outstanding loan
balance during the one year period ending on the day before such loan is
made over (ii) the outstanding loan balance on the date such loan is made
and (b) equals the greater of (i) 50% of the Contract Value or (ii)
$10,000.

Notwithstanding anything else in this contract to the contrary, the terms
of the loan are governed by Section 72(p) of the Code and any rules and
regulations issued thereunder.

6. Distribution of Owner's Interest

The Owner's entire interest in this Contract attributable to post-1986
premiums, purchase payments and contributions and post-1986 earnings
(whether attributable to those premiums, purchase payments and
contributions) will be distributed or commence to be distributed, no later
than the required beginning date. Distribution will be made in equal or
substantially equal amounts, over (a) the life of the Owner, or the lives
of the Owner and the designated beneficiary, or (b) a period not extending
beyond the life expectancy of the Owner, or the joint and last survivor
life expectancy of the Owner and the designated beneficiary.

Annuity Payments must be made in periodic payments at intervals no longer
than one year. In addition, payments must be either non-increasing or they
may increase only as provided in Q&A F-3 of Section 1.401(a)(9)-1 of the
Proposed Income Tax Regulations.

Life expectancy and joint and last survivor expectancy are computed by use
of the return multiples contained in Section 1.72-9 of the Income Tax
Regulations. Life expectancies may be recalculated annually, except that
the life expectancy of a non-spouse beneficiary may not be recalculated,
instead life expectancy will be calculated using the attained age of such
beneficiary during the calendar year in which the beneficiary attains age
70 1/2, and payments for subsequent years shall be calculated based on such
life expectancy reduced by one year for each calendar year which has
elapsed since the calendar year life expectancy was first calculated.

If you attained age 70 1/2 before January 1, 1988, or if you are a
participant in a church or governmental plan, you do not have to start to
receive your account balance until April 1 of the calendar year following
the year in which you retire.

For taxable years beginning after December 31, 1996 (except in the case of
a 5% or more owner of the employer), distributions do not have to begin
until April 1 of the calendar year following the later of (i) the calendar
year in which you attain age 70 1/2, or (ii) if your plan permits, the
calendar year in which you retire.
<PAGE>

- --------------------------------------------------------------------------------
7. Distribution upon Owner's Death

If the Owner dies before the entire interest in this Contract is
distributed, the following distribution provisions shall apply:

1. If the Owner dies after distribution of the Owner's interest has
commenced the remaining portion of such interest will continue to be
distributed at least as rapidly as under the method of distribution
being used prior to the Owner's death.

2. If the Owner dies before distribution of the Owner's interest
commences, the Owner's entire interest will be distributed in
accordance with one of the following three provisions:

a. The Owner's entire interest will be paid by December 31 of the
calendar year containing the fifth anniversary of the Owner's
death.

b. If the Owner's interest is payable to a designated beneficiary
who is not the Owner's spouse and the Owner has not elected (a)
above, then the Owner's entire interest may be distributed in
substantially equal installments over the life of the designated
beneficiary or a period not extending beyond the life expectancy
of the designated beneficiary on or before December 31 of the
calendar year immediately following the calendar year in which
the Owner died.

c. If the designated beneficiary of the Owner is the Owner's
surviving spouse, the spouse may elect to receive equal or
substantially equal payments over the life of the spouse or over
a period not extending beyond the life expectancy of the
surviving spouse. Such distribution shall not be required earlier
than the later of (1) December 31 of the calendar year
immediately following the calendar year in which the Owner died
or (2) December 31 of the calendar year in which the Owner would
have attained age 70 1/2. Such election must be made no later
than the earlier of December 31 of the calendar year containing
the fifth anniversary of the Owner's death or the date
distributions are required to begin pursuant to the preceding
sentence.

8. Special Rules for Distribution of Owner's Interest and For Distributions
upon Owner's Death

A. For the purposes of the above, payments will be calculated by the use
of the return multiples specified in Tables V and VI of Section 1.72-9
of the Income Tax Regulations. For purposes of distributions beginning
after the Owner's death, the surviving spouse may elect to have life
expectancies recalculated annually. In the case of any other
designated beneficiary, life expectancies shall be calculated using
the attained age of such beneficiary during the calendar year in which
distributions are required to begin pursuant to this section, and
payments for any subsequent calendar year shall be calculated based on
such life expectancy reduced by one year for each calendar year which
has elapsed since the calendar year life expectancy was first
calculated.

B. Distribution thereunder shall be made in accordance with the
requirements of Code Section 401(a)(9), and the regulations
thereunder, including the incidental death benefit requirements of
Code Section 401 (a)(9)(G), and the regulations thereunder, including
the minimum distribution incidental benefit requirement, and Section
1.401(a)(9)-2 of the proposed regulations.

C. Distributions under this section are considered to have begun if
distributions are made on account of the individual reaching his or
her required beginning date or if prior to the required beginning date
distributions irrevocably commence to an individual over a period
permitted and in an annuity form acceptable under Section 1.401(a)(9)
of the proposed regulations.

D. Minimum distribution requirements may be satisfied by receiving a
distribution from one Tax Sheltered Annuity that is equal to the
amount required to satisfy the minimum distribution requirements for
two or more Tax Sheltered Annuities. For this purpose, the owner of
two or more Tax Sheltered Annuities may use the alternative method
described in Notice 88- 38, 1988-1, C.B. 524, to satisfy the minimum
distribution requirements described above.
<PAGE>

- --------------------------------------------------------------------------------
9. Eligible Rollover Distributions

For distributions made after 1992, notwithstanding any provision of this
certificate to the contrary that would otherwise limit an election under
this provision, you (or your surviving spouse or former spouse who is an
alternate payee under a qualified domestic relations order, as defined in
Code Section 414(p)), hereinafter referred to as distributee, may elect at
the time and in the manner prescribed by us as payor (and if applicable,
the Plan Administrator) to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan you specify in a
direct rollover. A direct rollover is a payment of an eligible rollover
distribution under this certificate to the eligible retirement plan
specified by the distributee. An eligible rollover distribution from this
certificate is the taxable portion of any distribution to you, except that
an eligible rollover distribution does not include the following: (a) any
distribution that is one of a series of substantially equal periodic
payments (not less frequently than annually) made for the life (or life
expectancy of the distributee or the joint lives or joint life
expectancies) of the distributee and his or her beneficiary; (b) any
distribution that is one of a series of substantially equal periodic
payments (not less frequently than annually) for a specified period of 10
years or more; (c) any distribution to the extent such distribution is
required under Code Section 401(a)(9); (d) the portion of any distribution
that is not includible in gross income; or (e) any other withdrawal or
distribution which the tax law requires be excluded from treatment as an
eligible rollover distribution.

Notwithstanding anything in the contract to the contrary, if you make
withdrawals on account of unforeseen financial hardship after December 31,
1999 of any post-1988 salary reduction contributions, such withdrawals
shall not be considered eligible rollover distributions.

An eligible retirement plan is an individual retirement account as
described in Code Section 408(a), an individual retirement annuity as
described in Code Section 408(b), a tax-sheltered annuity as described
in Code Section 403(b), that accepts your eligible rollover
distribution. However, in the case of an eligible rollover
distribution to your surviving spouse, an eligible retirement plan is
an individual retirement account or individual retirement annuity.

This endorsement shall be interpreted and administered in accordance with
the requirements of Code Section 403(b). If the terms of this endorsement
conflict with the terms of the plan, where not prohibited by the Code or
regulations thereunder, the terms of the plan shall govern.

In order to preserve the status of your policy as a Section 403(b) annuity,
we have the right to amend it to make it comply with federal income tax
rules. We will notify you of any amendments and when required by law, we
will obtain the approval of the appropriate regulatory authority.

You are responsible for the tax treatment of any contributions, withdrawals
and distributions made from the Contract, and you must provide the Company
with all necessary instructions and information as may be required to
report properly on the qualified status of the Contract.

The Company will refund all or part of your account balance if necessary to
maintain your Contract as a 403(b) annuity. To the extent otherwise
permitted by your plan, we may also, where necessary to maintain your
Contract as a 403(b) annuity, treat contributions as after-tax employee
contributions.

New England Life Insurance Company
501 Boylston Street, Boston, Massachusetts

[GRAPHIC] /s/ Daniel D. Jordan
President Secretary
<PAGE>

METROPOLITAN LIFE INSURANCE COMPANY
(A Mutual Company Incorporated in New York State)

ENDORSEMENT

This Endorsement amends the Tax Sheltered Annuity ("TSA") contract to which it
is attached by adding provisions required by the Internal Revenue Code of 1986
("Code") to assure continued qualification as a TSA under Section 403(b).

1. Provisions for Certain Qualified Plan Contracts. In order to comply with
provisions of the Internal Revenue Code, the terms of this endorsement
shall amend the Contract and override all conflicting provisions of the
Contract. It shall be effective as of the Date of Issue of the Contract for
Contracts intended to qualify under the Code Section 403(b).

2. Restriction on Transferability. This Contract is for the exclusive benefit
of the Annuitant and his/her beneficiaries. The Owner of the Contract is
the Annuitant. It is not transferable by the Owner, and the Owner's
interest in the Contract is nonforfeitable. Pursuant to Code Sections
401(a) and 403(b), except to the extent permitted as a Contract loan under
section 5 of this Endorsement in accordance with 72(p) of the Code, the
Contract may not be sold, assigned, discounted, or pledged as collateral or
as security for the performance of an obligation or for any other purpose.

3. Limit on Contributions. Contributions under this Contract and all other
Section 403(b) contracts issued to the same Owner may not exceed the
limitations in Code Sections 403(b)(2), 415 or the limitations of Code
Section 402(g) that apply to salary reduction elective deferrals under this
Contract and all other contracts and plans through your employer. The
Company will also accept contributions resulting from eligible rollover
distributions under Code Sections 403(b)(8) and 408(d)(3)(A)(iii) and
transfers from other tax-sheltered annuities in accordance with Rev. Rul.
90-24.

4. Payments Prior to Age 59 1/2. Salary reduction elective deferral
contributions after 1988 and the earnings credited to those contributions
cannot be withdrawn until the Owner attains age 59 1/2, retires, terminates
employment, becomes disabled, encounters financial hardship or dies. This
restriction also applies to earnings after 1988 on amounts attributable to
pre-1989 elective deferral contributions. We are required by Code Section
403(b)(11) to prohibit these withdrawals.

To the extent that we are required to apply the withdrawal restrictions of
the Code Section 403(b)(7)(A)(ii) to account balances transferred on a
non-taxable basis into this Contract, we will do so.

Any request for withdrawal will be approved upon evidence that the
withdrawal satisfies applicable requirements of law or regulations.

In the case of financial hardship, withdrawals will not include any
earnings on the contributions made through salary reductions.

1
<PAGE>

5. Contract Loans. If your Contract permits loans, the following rules apply:

Contract loans must be repaid within 5 years from the date of the loan.
Such repayment must be on a level basis over the 5-year period with
repayments being made at least quarterly. If the Contract loan is made to
acquire a dwelling unit which is to be used within a reasonable time as
your principal residence, it must be repaid within a reasonable time as
provided in your loan agreement, which may exceed 5 years.

Your TSA or 403(b) Plan may further limit the amount of your loan and the
circumstances under which it can be made.

Notwithstanding anything else in this contract to the contrary, the terms
of the loan are governed by Section 72(p) of the Code and any rules and
regulations issued thereunder.

6. Distribution of Owner's Interest. Your entire interest in this Contract
attributable to post-1986 contributions and post-1986 earnings (whether
attributable to those contributions) will be distributed or commence to be
distributed, no later than the required beginning date. Distribution will
be made in equal or substantially equal amounts, over (a) the life of the
Owner, or the lives of the Owner and the designated beneficiary, or (b) a
period not extending beyond the life expectancy of the Owner, or the joint
and last survivor life expectancy of the Owner and the designated
beneficiary.

Annuity payments must be made in periodic payments at intervals no longer
than one year. In addition, payments must be either non- increasing or they
may increase only as provided in Q&A F-3 of Section 1.401(a)(9)-1 of the
Proposed Income Tax Regulations.

Life expectancy and joint and last survivor life expectancy are computed by
use of the return multiples contained in Section 1.72-9 of the Income Tax
Regulations. Life expectancies may be recalculated annually, except that
the life expectancy of a non-spouse beneficiary may not be recalculated,
instead life expectancy will be calculated using the attained age of such
beneficiary during the calendar year in which the beneficiary attains age
70 1/2, and payments for subsequent years shall be calculated based on such
life expectancy reduced by one year for each calendar year which has
elapsed since the calendar year life expectancy was first calculated.

For taxable years beginning after December 31, 1996 (except in the case of
a more than 5% owner) , distributions do not have to begin until April 1 of
the calendar year following the later of (i) the calendar year in which you
attain age 70 1/2, or (ii) if your plan permits, the calendar year in which
you retire.

2
<PAGE>

7. Distribution upon Owner's Death. If the Owner dies before the entire
interest in this Contract is distributed, the following distribution
provisions shall apply:

2. If the Owner dies before distribution of the Owner's interest
commences, the Owner's entire interest will be distributed in
accordance with one of the following three provisions:

a. The Owner's entire interest will be paid by December 31 of the
calendar year containing the fifth anniversary of the Owner's
death.

8. Special Rules for Distribution of Owner's Interest and For Distributions
upon Owner's Death.

B. Distribution thereunder shall be made in accordance with the
requirements of Code Section 401(a)(9), and the regulations
thereunder, including the incidental death benefit requirements of
Code Section 401(a)(9)(G), and the regulations thereunder, including
the minimum distribution incidental benefit requirement, and Section
1.401(a)(9)-2 of the proposed regulations.

3
<PAGE>

D. Minimum distribution requirements may be satisfied by receiving a
distribution from one TSA that is equal to the amount required to
satisfy the minimum distribution requirements for two or more TSAs.
For this purpose, the owner of two or more TSAs may use the
alternative method described in Notice 88-38, 1988-1, C.B. 524, to
satisfy the minimum distribution requirements described above.

9. Eligible Rollover Distributions. For distributions made after 1992,
notwithstanding any provision of this contract to the contrary that would
otherwise limit an election under this provision, you or your surviving
spouse or former spouse who is an alternate payee under a qualified
domestic relations order, as defined in Code Section 414(p) of the Code
(hereinafter referred to as distributee), may elect at the time and in the
manner prescribed by MetLife as payor and, if applicable, the plan
administrator, to have any portion of an eligible rollover distribution
paid directly to an eligible retirement plan specified by the distributee
in a direct rollover. An eligible rollover distribution from this contract
is the taxable portion of any distribution made to the distributee, except
that an eligible rollover distribution does not include the following:

. any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the
life (or life expectancy of the distributee or the joint lives or
joint life expectancies) of the distributee and his or her named
beneficiary;

. any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) for a specified
period of 10 years or more;

. any distribution to the extent such distribution is required under
Section 401(a)(9) of the Code; or

. the portion of any distribution that is not includible in gross
income.

An eligible rollover distribution is subject to mandatory 20% income tax
withholding unless a distributee elects a direct rollover to an eligible
retirement plan. An eligible retirement plan is an individual retirement
account as described in Section 408(a) of the Code, an individual
retirement annuity under Section 408(b), or, except for your surviving
spouse, a tax-sheltered annuity as described in Code Section 403(b) of the
Code, that accepts your eligible rollover distribution.

This Endorsement shall be interpreted and administered in accordance with the
requirements of Code Section 403(b). If the terms of this Endorsement conflict
with the terms of the plan, where not prohibited by the Code or regulations
thereunder, the terms of the plan shall govern.

In order to preserve the status of your policy as a Section 403(b) annuity, we
have the right to amend it to make it comply with federal income tax rules. We
will notify you of any amendments and when required by law, we will obtain the
approval of the appropriate regulatory authority.

4
<PAGE>

You are responsible for the tax treatment of any contributions, withdrawals and
distributions made from the Contract, and you must provide the Company with all
necessary instructions and information as may be required to report properly on
the qualified status of the Contract.

The Company will refund all or part of your account balance if necessary to
maintain your Contract as a 403(b) annuity. To the extent otherwise permitted by
your plan, we may also, where necessary to maintain your Contract as a 403(b)
annuity, treat contributions as after-tax employee contributions.

Metropolitan Life Insurance Company
Administrative Office:
501 Boylston Street, Boston, Massachusetts

ABCD ABCD
President Secretary

<PAGE>

Exhibit 8(iii)

AMENDED AND RESTATED CHARTER OF
METROPOLITAN LIFE INSURANCE COMPANY

Under
Sections 1206 and 7312 of the Insurance Law
and Section 807 of the Business Corporation Law

The undersigned, being the Chairman of the Board, President and Chief
Executive Officer and the Secretary of Metropolitan Life Insurance Company,
respectively, hereby certify that:

1. The name of the corporation is Metropolitan Life Insurance
Company.
2. The corporation was incorporated on May 4, 1866 under the name
"National Travelers Insurance Company." The name of the corporation was changed
to "Metropolitan Life Insurance Company" on March 24, 1868.

3. The Charter of the corporation is hereby amended, as authorized by
Sections 1206 and 7312 of the Insurance Law of New York (the "Insurance Law")
and Section 801 of the Business Corporation Law of New York, in connection with
the reorganization of the corporation from a mutual life insurance company to a
stock life insurance company pursuant to Section 7312 of the Insurance Law (a)
to establish the capital of the corporation in the amount of $10,000,000 and to
authorize shares of Common Stock, par value $.01 per share, as the shares of the
corporation, (b) to change references in the Charter from "mutual" to "stock"
and from "policyholders" to "shareholders", and (c) to eliminate classes of
directors and to provide that each director will be elected for a one-year term.

4. The amendment and restatement of the Charter was authorized by the
affirmative vote of at least two-thirds of all votes cast on ________, 1999 by
policyholders entitled to vote on the plan of reorganization of the corporation
pursuant to Section 7312 of the Insurance Law.

5. The text of the Charter, as amended by the filing of this Amended
and Restated Charter, is hereby restated to read in full as follows:
<PAGE>

ARTICLE I

CORPORATE NAME

The name of the corporation shall continue to be "Metropolitan Life
Insurance Company." The corporation may use, in the transaction of any or all of
its business and affairs in Canada, including the exercise of any or all of its
rights, such name or such name expressed in the French language. Such name when
so expressed shall be "La Metropolitaine, compagnie d'assurance vie."

ARTICLE II

PLACE OF BUSINESS

The corporation shall be located and have its principal place of
business in the Borough of Manhattan, City of New York, County of New York, and
State of New York.

ARTICLE III

ANNUAL MEETING OF SHAREHOLDERS

The annual meeting of the shareholders of the corporation for the
election of directors and for the transaction of such other business as properly
may come before such meeting shall be held on the fourth Tuesday of April, or
otherwise, within 60 days thereafter, as the Board may determine, provided that
the Superintendent of Insurance of the State of New York (or any governmental
officer, body or authority that succeeds the Superintendent as the primary
regulator of the corporation's insurance business under applicable law) is given
notice of the date determined by the Board prior to such date, at such place,
either within or without the State of New York, as may be fixed from time to
time by resolution of the Board and set forth in the notice or waiver of notice
of the meeting.

2
<PAGE>

ARTICLE IV

BUSINESS OF THE CORPORATION

The business of the corporation and the kinds of insurance to be
undertaken by it are:

(1) "life insurance," meaning every insurance upon the lives
of human beings, and every insurance appertaining thereto,
including the granting of endowment benefits, additional
benefits in the event of death by accident, additional
benefits to safeguard the contract from lapse, accelerated
payments of part or all of the death benefit or a special
surrender value upon diagnosis (A) of terminal illness
defined as a life expectancy of twelve months or less, or
(B) of a medical condition requiring extraordinary medical
care or treatment regardless of life expectancy, or upon
(C) certification by a licensed health care practitioner
of any condition which requires continuous care for the
remainder of the insured's life in an eligible facility or
at home when the insured is chronically ill as defined by
Section 7702(B) of the Internal Revenue Code and
regulations thereunder, provided the accelerated payments
qualify under Section 101(g)(3) of the Internal Revenue
Code and all other applicable sections of federal law in
order to maintain favorable tax treatment or provide a
special surrender value, upon total and permanent
disability of the insured, and optional modes of
settlement of proceeds. "Life insurance" also includes
additional benefits to safeguard the contract against
lapse in the event of unemployment of the insured. Amounts
paid the insurer for life insurance and proceeds applied
under optional modes of settlement or under dividend
options may be allocated by the insurer to one or more
separate accounts pursuant to Section 4240 of the
Insurance Law;

(2) "annuities," meaning all agreements to make periodical
payments for a period certain or where the making or
continuance of all or some of a series of such payments,
or the amount of any such payment, depends upon the
continuance of human life, except payments made under the
authority of paragraph one hereof. Amounts paid the
insurer to provide annuities and proceeds applied under
optional modes of settlement or under dividend options may
be allocated by the insurer to one or more separate
accounts pursuant to Section 4240 of the Insurance Law;
and

3
<PAGE>

(3) "accident and health insurance," meaning (i) insurance
against death or personal injury by accident or by any
specified kind or kinds of accident and insurance against
sickness, ailment or bodily injury, including insurance
providing disability benefits pursuant to article nine of
the workers' compensation law, except as specified in item
(ii) hereof; and (ii) non-cancellable disability
insurance, meaning insurance against disability resulting
from sickness, ailment or bodily injury (but excluding
insurance solely against accidental injury) under any
contract which does not give the insurer the option to
cancel or otherwise terminate the contract at or after one
year from its effective date or renewal date.

as heretofore authorized by and under this Charter and paragraphs 1, 2 and 3 of
Section 1113(a) of the Insurance Law; together with such reinsurance business
(in addition to reinsurance of the kinds of insurance business hereinabove
stated) as may be permitted to the corporation by Section 1114 of said Law;
together with such business in which the corporation may be authorized to engage
pursuant to any amendment to paragraphs 1, 2 and 3 of Section 1113(a) or Section
1114 of said Law which may be hereafter adopted; and together with any other
kind or kinds of business to the extent reasonably ancillary or necessarily or
properly incidental to the kinds of insurance business which the corporation is
so authorized to do.

The corporation shall also have the general rights, powers and
privileges now or hereafter granted by the Insurance Law or any other law to
stock life insurance companies having power to do the kinds of business
hereinabove referred to and any and all other rights, powers and privileges of a
corporation, as the same may now or hereafter be declared by applicable law.

ARTICLE V

CORPORATE POWERS

Section 1. The business of the corporation shall be managed under the
direction of its Board, by committees thereof and by such officers and agents as
the Board or such committees may empower.

4
<PAGE>

Section 2. The Board shall consist of not less than thirteen
directors (except for vacancies temporarily unfilled) nor more than thirty
directors, as may be determined by the Board by resolution adopted by a majority
of the authorized number of directors immediately prior to such determination.
Not less than one- third of the directors shall be persons who are not officers
or employees of the corporation or of any entity controlling, controlled by, or
under common control with the corporation, and who are not beneficial owners of
a controlling interest in the voting stock of the corporation or any such entity
("Outside Directors").

Section 3. The Board shall have power to make and prescribe such
ByLaws, rules and regulations for the transaction of the business of the
corporation and the conduct of its affairs, not inconsistent with the laws of
the State of New York and this Charter as may be deemed expedient, and to amend
or repeal such By-Laws, rules and regulations, except as otherwise provided in
such By-Laws.

Section 4. The Board shall have the power to declare by by-law what
number of directors shall constitute a quorum for the transaction of business;
provided, however, that such number shall be no less than a majority of the
authorized number of directors, at least one of whom shall be an Outside
Director.

Section 5. The Board shall elect or appoint a Chairman, a Chief
Executive Officer, a President, one or more Vice-Presidents, a Chief Financial
Officer, a Secretary, a Treasurer, a Controller and a General Counsel and such
other officers as it may deem appropriate, except that officers of the rank of
Vice-President and below may be elected or appointed by the Compensation
Committee of the Board. Officers shall have such powers and perform such duties
as may be authorized by the By-Laws or by or pursuant to authorization of the
Board or the Chief Executive Officer.

5
<PAGE>

ARTICLE VI

ELECTION OF DIRECTORS AND OFFICERS

Section 1. The directors of the corporation shall be elected by the
shareholders as prescribed by law and the By-Laws of the corporation. The
officers of the corporation shall be elected or appointed as provided in the
By-Laws of the corporation. Each director shall be at least 18 years old, at all
times a majority of the directors shall be citizens and residents of the United
States and not less than three shall be residents of the State of New York.

Section 2. Vacancies in the Board, including vacancies resulting
from any increase in the authorized number of directors or the removal of any
director, except a removal of a director without cause, shall be filled by a
vote of the Board until the next annual meeting of shareholders of the
corporation, except that if the number of directors then in office is less than
a quorum, such vacancies may be filled by a vote of a majority of directors then
in office.

ARTICLE VII

LIABILITY OF DIRECTORS

No director shall be personally liable to the corporation or any of
its shareholders or any of its policyholders for damages for any breach of duty
as a director; provided, however, that the foregoing provision shall not
eliminate or limit:

(i) the liability of a director if a judgment or other final
adjudication adverse to the director establishes that the
director personally gained in fact a financial profit or
other advantage to which he or she was not legally
entitled or establishes that the director's acts or
omissions were in bad faith or involved intentional
misconduct or were acts or omissions (a) which the
director knew or reasonably should have known violated the
Insurance Law or (b) which violated a specific

6
<PAGE>

standard of care imposed on directors directly, and not by
reference, by a provision of the Insurance Law (or any
regulations promulgated thereunder), or (c) which
constituted a knowing violation of any other law; or

(11) the liability of a director for any act or omission prior
to April 26, 1990.

ARTICLE VIII

STOCK

The amount of capital of the corporation shall be $10,000,000 and
shall consist of 1,000,000,000 authorized shares of Common Stock, par value $.01
per share.

ARTICLE IX

DURATION

The duration of the corporation shall be perpetual.

7
<PAGE>

AMENDED AND RESTATED
BY-LAWS OF METROPOLITAN LIFE INSURANCE COMPANY

ARTICLE I

SHAREHOLDERS

Section 1.1 Annual Meetings. The annual meeting of the shareholders
of the corporation for the election of directors and for the transaction of such
other business as properly may come before such meeting shall be held on the
fourth Tuesday of April, or otherwise, within 60 days thereafter, as the Board
may determine, provided that the Superintendent of Insurance of the State of New
York (or any governmental officer, body or authority that succeeds the
Superintendent as the primary regulator of the corporation's insurance business
under applicable law) is given notice of the date determined by the Board prior
to such date, at such place, either within or without the State of New York, as
may be fixed from time to time by resolution of the Board and set forth in the
notice or waiver of notice of the meeting.

Section 1.2 Special Meetings. Special meetings of the shareholders
may be called at any time by the Chief Executive Officer (or, in the event of
such Chief Executive Officer's absence or disability, by the President), or by
the Board. A special meeting shall be called by the Chief Executive Officer (or,
in the event of such Chief Executive Officer's absence or disability, by the
President), or by the Secretary, immediately upon receipt of a written request
therefor by shareholders holding in the aggregate not less than 25% of the
outstanding shares of the corporation at the time entitled to vote at any
meeting of the shareholders, which request shall state the purpose or purposes
of such meeting. If such officers shall fail to call such meeting within 20 days
after receipt of such request, any shareholder executing such request may call
such meeting. Such special meetings of the shareholders shall be held at such
places, within or without the State of New York, as shall be specified in the
respective notices or waivers of notice thereof.

Section 1.3 Notice of Meetings. The Secretary or any Assistant
Secretary shall cause written notice of the place, date and hour of each meeting
of the shareholders, and, in the case of a special meeting, the purpose or
purposes for which such meeting is called and by or at whose direction such
notice is being issued, to be given personally or by first class mail, not fewer
than ten nor more than sixty days before the date of the meeting.

8
Amended and Restated By-Laws
Metropolitan Life Insurance Company
<PAGE>

No notice of any meeting of shareholders need be given to any
shareholder who submits a signed waiver of notice, in person or by proxy,
whether before or after the meeting. Neither the business to be transacted at,
nor the purpose of, any regular or special meeting of the shareholders need be
specified in a written waiver of notice. The attendance of any shareholder, in
person or by proxy, at a meeting of shareholders shall constitute a waiver of
notice of such meeting, except when the shareholder attends a meeting for the
express purpose of objecting, prior to the conclusion of the meeting, to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.

Section 1.4 Quorum. Except as otherwise required by law or by the
Charter, the presence in person or by proxy of the holders of record of a
majority of the votes of shares entitled to vote at any meeting of shareholders
shall constitute a quorum for the transaction of business at such meeting. When
a quorum is once present to organize a meeting, it is not broken by the
subsequent withdrawal of any shareholders.

Section 1.5 Voting. Every holder of record of shares entitled to vote
at a meeting of shareholders shall be entitled to one vote for each share
standing in such shareholder's name on the books of the corporation on the
record date set therefor. Except as otherwise required by law or by the Charter
or by Section 1.7 hereof (regarding the election of directors), any corporate
action shall be authorized by a majority of the votes cast in favor of or
against such action by the holder of record of shares represented at any meeting
at which a quorum is present. An abstention shall not constitute a vote cast.

Section 1.6 Proxies. Every shareholder entitled to vote at any
meeting of the shareholders or to express consent to or dissent from corporate
action without a meeting may, in any legally valid manner, authorize another
person or persons to vote at any such meeting and express such consent or
dissent for such shareholder by proxy. No such proxy shall be voted or acted
upon after the expiration of eleven months from the date of such proxy, unless
such proxy provides for a longer period. Every proxy shall be revocable at the
pleasure of the shareholder executing it, except in those cases where applicable
law provides that a proxy shall be irrevocable.

Section 1.7 Election and Term of Directors. The directors shall be
elected at each annual meeting of the shareholders to hold office until the next
annual meeting of shareholders. Each director shall hold office until the
expiration of the term for which he or she is elected and until such director's
successor has been duly elected and qualified, or until his or her earlier
death, resignation or removal. At each annual meeting of the share holders of
the corporation, at which a quorum is present, the directors shall be elected by
a plurality of the votes cast by the holders of shares entitled to vote in such
election.

Amended and Restated By-Laws
Metropolitan Life Insurance Company
<PAGE>

Section 1.8 Organization; Procedure. The Board shall determine whom
from among the officer directors shall preside at the meeting of shareholders.
The order of business and all other matters of procedure at every meeting of
shareholders may be determined by such presiding officer. The Secretary, or in
the event of the Secretary's absence or disability, an Assistant Secretary or,
in the Assistant Secretary's absence, an appointee of the presiding officer,
shall act as Secretary of the meeting.

Section 1.9 Consent of Shareholders in Lieu of Meeting. Whenever the
vote of shareholders at a meeting thereof is required or permitted to be taken
for or in connection with any corporate action, by law, by the Charter or by
these By-Laws, the meeting and vote of shareholders may be dispensed with, if
all of the shareholders who would have been entitled to vote upon the action if
such meeting were held shall consent in writing to such corporate action being
taken.

ARTICLE II

BOARD OF DIRECTORS

Section 2.1 Regular Board Meetings. Regular meetings of the Board for
the transaction of any business shall be held at such times and places, either
within or without the State of New York, as may be fixed from time to time by
resolution of the Board; provided, however, that at least one regular meeting of
the Board shall be held in each calendar year. One regular meeting of the Board
in each calendar year shall be designated as the Annual Organization Meeting.
Except as otherwise required by law or these ByLaws, notice of regular meetings
need not be given.

Section 2.2 Special Board Meetings, Waiver of Notice. Special
meetings of the Board shall be held whenever called by the chief executive
officer or by any three directors. Notice of each such special meeting shall be
mailed to each director at such director's residence or usual place of business
or other address filed with the Secretary for such purpose, or shall be sent to
such director by any form of telecommunication, or be delivered or given to such
director personally or by telephone, not later than the second day preceding the
day on which such meeting is to be held. Notice of any meeting of the Board need
not, however, be given to any director who submits a signed waiver of notice,
whether before or after the meeting, or who attends the meeting without
protesting, prior thereto or at its commencement, the lack of notice. Every such
notice shall state the time, place and purpose of the meeting.

Section 2.3 Participation by Telephone. Any one or more members of
the Board or any committee thereof may participate in any meeting of the Board
or such committee by means of a conference telephone or similar communications
equipment allowing all persons participating in the meeting to hear each other
at the same time.

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Participation by such means shall constitute presence in person at a meeting of
the Board or such committee for quorum and voting purposes.

Section 2.4 Action Without a Meeting. Any action which is required or
permitted to be taken by the Board or any committee thereof may be taken without
a meeting if all members of the Board or such committee consent in writing to
the adoption of a resolution authorizing the action; provided, however, that the
Annual Organization Meeting of the Board may not be conducted by such unanimous
written consent. The resolution and the written consents thereto by the members
of the Board or such committee shall be filed with the minutes of the
proceedings of the Board or committee.

Section 2.5 Number, Quorum and Adjournments. The Board shall consist
of not less than thirteen directors (except for vacancies temporarily unfilled)
nor more than thirty directors, as may be determined by the Board by resolution
adopted by a majority of the authorized number of directors immediately prior to
any such determination. The authorized number of directors of the corporation
may be increased or decreased at any time by a vote of the majority of the
authorized number of directors immediately prior to such vote; provided,
however, that no such decrease in the authorized number of directors shall
shorten the term of any incumbent director. Not less than one-third of the
directors shall be persons who are not officers or employees of the corporation
or of any entity controlling, controlled by, or under common control with the
corporation and who are not beneficial owners of a controlling interest in the
voting stock of the corporation or any such entity ("Outside Directors"). At any
meeting of the Board, the presence of at least a majority of the authorized
number of directors, at least one of whom shall be an Outside Director, shall
constitute a quorum for the transaction of business. Except as otherwise
provided by law or these By-Laws, the vote of a majority of the directors
present at the time of the vote, if a quorum is present at such time, shall be
the act of the Board. A majority of the directors present, whether or not a
quorum shall be present, may adjourn any meeting. Notice of the time and place
of an adjourned meeting of the Board shall be given if and as determined by a
majority of the directors present at the time of the adjournment.

Section 2.6 Presiding Officer. The Board shall determine whom from
among the officer directors shall preside at meetings of the Board. In the event
of the absence or disability of all such officer directors, the Board shall
select one of its members present to preside.

Section 2.7 Board Vacancies. Any vacancy in the Board, including any
vacancy resulting from any increase in the authorized number of directors or the
removal of any director, except a removal of a director without cause, shall be
filled by a vote of the Board until the next annual meeting of shareholders of
the corporation and until such director's successor shall have been elected and
qualified; provided, however, that if the

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number of directors then in office is less than a quorum, any vacancy may be
filled by a vote of a majority of directors then in office.

ARTICLE III

COMMITTEES

Section 3.1 Standing Committees. The Board shall have the following
standing committees, each consisting of not less than five directors, as shall
be determined by the Board:

Executive Committee
Investment Committee
Compensation Committee
Audit Committee
Nominating and Corporate Governance Committee

Section 3.2 Designation of Members and Chairmen of Standing
Committees. At its first meeting following the annual meeting of shareholders of
the corporation, the Board shall, by resolution adopted by a majority of the
then authorized number of directors, designate from among the directors the
members of the standing committees and from among the members of each such
committee a chairman thereof, which members shall serve as such, at the pleasure
of the Board, so long as they shall continue in office as directors, until the
meeting following the next annual meeting of shareholders of the corporation and
thereafter until the appointment of their successors. Each member of the Audit
Committee, the Compensation Committee and the Nominating and Corporate
Governance Committee shall be an Outside Director, and not less than one-third
of the members of each other committee shall be Outside Directors. The Board may
by similar resolution designate one or more directors as alternate members of
such committees, who may replace any absent member or members at any meeting of
such committees; provided, however, that the membership of the committee shall
satisfy the preceding sentence following such designation. Vacancies in the
membership or chairmanship of any standing committee may be filled in the same
manner as original designations at any regular or special meeting of the Board,
and the chief executive officer may designate from among the remaining members
of any standing committee whose chairmanship is vacant a chairman who shall
serve until a successor is designated by the Board.

Section 3.3 Notices of Times of Meetings of Standing Committees and
Presiding Officers. Meetings of each standing committee shall be held upon call
of the chief executive officer, or upon call of the chairman of such standing
committee or two members of such standing committee. Meetings of each standing
committee may also be held at such other times as it may determine. Meetings of
a standing committee shall be

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held at such places and upon such notice as it shall determine or as shall be
specified in the calls of such meetings. Any such chairman, if present, or such
member or members of each committee as may be designated by the chief executive
officer, shall preside at meetings thereof or, in the event of the absence or
disability of any thereof or failing such designation, the committee shall
select from among its members present a presiding officer.

Section 3.4 Quorum. At each meeting of any standing committee there
shall be present to constitute a quorum for the transaction of business at least
a majority of the members but in no event less than three members, at least one
of whom shall be an Outside Director. Subject to the preceding sentence, any
alternate member who is replacing an absent member shall be counted in
determining whether a quorum is present. The vote of a majority of the members
present at a meeting of any standing committee at the time of the vote, if a
quorum is present at such time, shall be the act of such committee.

Section 3.5 Standing Committee Minutes. Each of the standing
committees shall keep minutes of its meetings which shall be reported to the
Board at its regular meetings and, if called for by the Board, at any special
meeting.

Section 3.6 Executive Committee. The Executive Committee shall make
recommendations to the Board with respect to the policyholder dividend and
surplus policies and practices of the corporation and, during the intervals
between meetings of the Board, except as otherwise provided in Section 3.12,
shall have and may exercise the authority of the Board in the management of the
property, business and affairs of the corporation, including the authority to
declare dividends in respect of the corporation's stock.

Section 3.7 Investment Committee. The Investment Committee, subject
to and as may be provided in any resolution of the Board, shall have and may
exercise the authority of the Board with respect to the management of the assets
of the corporation, including purchases and sales thereof, the manner of
designating depositaries for all monies received by the corporation, which shall
be deposited in the name of the corporation, and the manner of disposition of
the funds of the corporation so deposited.

Section 3.8 Compensation Committee. The Compensation Committee shall
recommend to the Board the selection of all principal officers (as determined by
the Committee) and such other officers as the Committee may determine to elect
or appoint as officers, shall evaluate the performance and recommend to the
Board the compensation of such principal officers and such other officers as the
Committee may determine, and shall recommend to the Board any plan to issue
options for the purchase of shares of the corporation's stock to its officers or
employees. Except as otherwise provided in any resolution of the Board, the
Committee shall have and may exercise all the authority of the Board with
respect to compensation, benefits and personnel administration of the

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employees of the corporation and may elect or appoint officers as provided in
Section 4.2 of these By-Laws.

Section 3.9 Audit Committee. The Audit Committee shall have and may
exercise the authority of the Board: to recommend to the Board the selection of
the corporation's independent certified public accountants; to review the scope,
plans and results relating to the internal and external audits of the
corporation and its financial statements; and to review the financial condition
of the corporation. Except as otherwise provided in any resolution of the Board,
the Committee shall have and may exercise the authority of the Board: to monitor
and evaluate the integrity of the corporation's financial reporting processes
and procedures; to assess the significant business and financial risks and
exposures of the corporation and to evaluate the adequacy of the corporation's
internal controls in connection with such risks and exposures, including, but
not limited to, accounting and audit controls over cash, securities, receipts,
disbursements and other financial transactions; and to review the corporation's
policies on ethical business conduct and monitor compliance therewith.

Section 3.10 Nominating and Corporate Governance Committee. The
Nominating and Corporate Governance Committee shall nominate candidates for
Director for election by shareholders and for filling vacancies on the Board,
and may recommend to the Board any plan to issue options for the purchase of
shares of the corporation's stock to its non-employee directors. Except as
otherwise provided in any resolution of the Board, the Committee shall review
and make recommendations to the Board with respect to the organization,
structure, size, composition and operation of the Board and its Committees,
including, but not limited to, the compensation for non-employee directors and
shall review and make recommendations with respect to other corporate governance
matters and matters that relate to the corporation's status as a member of a
publicly-traded group of companies.

Section 3.11 Special Committees. The Board may, by resolution adopted
by a majority of the then authorized number of directors, designate special
committees, each consisting of three or more directors of the corporation, which
committees, except as otherwise prescribed by law or by Section 3.12, shall have
and may exercise the authority of the Board to the extent provided in the
resolutions designating such committees. Nothing herein shall be deemed to
prevent the chief executive officer from appointing one or more special
committees of directors for the purpose of advising the chief executive officer;
provided, however, that no such committee shall have or may exercise any
authority of the Board.

Section 3.12 Limitations of the Authority of Committees.
Notwithstanding any other provisions of these By-Laws, no committee shall have
authority as to the following matters:

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(1) the submission to shareholders of any action that needs
shareholder approval under applicable law;

(2) the filling of vacancies in the Board or in any committee;

(3) the fixing of compensation of the directors for serving on the
Board or on any committee;

(4) the amendment or repeal of these By-Laws or adoption of new
By-Laws; and

(5) the amendment or repeal of any resolution of the Board which by
its terms shall not be so amendable or repealable.

ARTICLE IV

OFFICERS

Section 4.1 Chief Executive Officer. The Board shall determine whom
from among the officer directors shall act as Chief Executive Officer.

Subject to the control of the Board and to the extent not otherwise
prescribed by these By-Laws, the Chief Executive Officer shall supervise the
carrying out of the policies adopted or approved by the Board, shall manage the
business of the Company and shall possess such other powers and perform such
other duties as may be incident to the office of chief executive officer.

Section 4.2 Other Officers. In addition to the Chief Executive
Officer, the Board shall elect or appoint a Chairman, a President, one or more
Vice-Presidents, a Chief Financial Officer, a Secretary, a Treasurer, a
Controller and a General Counsel, and such other officers as it may deem
appropriate, except that officers of the rank of Vice-President and below may be
elected or appointed by the Compensation Committee of the Board. Officers other
than the Chief Executive Officer shall have such powers and perform such duties
as may be authorized by these By-Laws or by or pursuant to authorization of the
Board or the Chief Executive Officer.

All officers shall hold office at the pleasure of the Board.

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ARTICLE V

EXECUTION OF PAPERS

Section 5.1 Instruments. Any officer, or any employee or agent
designated for the purpose by the Chief Executive Officer, or a designee of the
Chief Executive Officer, shall have power to execute all instruments in writing
necessary or desirable for the corporation to execute in the transaction and
management of its business and affairs (including, without limitation, contracts
and agreements, transfers of bonds, stocks, notes and other securities, proxies,
powers of attorney, deeds, leases, releases, satisfactions and instruments
entitled to be recorded in any jurisdiction, but excluding, to the extent
otherwise provided for in these By-Laws, authorizations for the disposition of
the funds of the corporation deposited in its name and policies, contracts,
agreements, amendments and endorsements of, for or in connection with insurance
or annuities) and to affix the corporate seal.

Section 5.2 Disposition of Funds. All funds of the corporation
deposited in its name shall be subject to disposition by check or other means,
in such manner as the Investment Committee may determine.

Section 5.3 Policies. All policies, contracts, agreements, amendments
and endorsements, executed by the corporation as insurer, of, for or in
connection with insurance or annuities shall bear such signature or signatures
of such officer or officers as may be designated for the purpose by the Board.

Section 5.4 Facsimile Signatures. All instruments necessary or
desirable for the corporation to execute in the transaction and management of
its business and affairs, including those set forth in Sections 5.2 and 5.3 of
these By-Laws, may be executed by use of or bear facsimile signatures as and to
the extent authorized by the Board or a committee thereof or the chief executive
officer. If any officer or employee whose facsimile signature has been placed
upon any form of instrument shall have ceased to be such officer or employee
before an instrument in such form is issued, such instrument may be issued with
the same effect as if such person had been such officer or employee at the time
of its issue.

ARTICLE VI

CAPITAL STOCK

Section 6.1 Certificates of Shares. Every holder of shares in the
corporation shall be entitled to have a certificate (unless such shares shall be
uncertificated shares) signed by, or in the name of the corporation by (i) the
Chairman of the Board, the President or a Vice-President, and (ii) by the
Treasurer or an Assistant Treasurer, or the

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Secretary or an Assistant Secretary, certifying the number of shares owned by
him or her in the corporation. Such certificate shall be in such form as the
Board may determine, to the extent consistent with applicable provisions of law,
the Charter and these By-Laws. Within a reasonable time after the issuance of
uncertificated shares, the corporation shall send to the registered owner
thereof a written notice containing the information required to be set forth or
stated on certificates.

Section 6.2 Lost, Stolen or Destroyed Certificates. The Board may
direct that a new certificate be issued in place of any certificate previously
issued by the corporation alleged to have been lost, stolen or destroyed, upon
delivery to the Board of an affidavit of the owner or owners of such
certificate, setting forth such allegation. The Board may require the owner of
such lost, stolen or destroyed certificate, or such owner's legal
representative, to give the corporation a bond sufficient to indemnify it
against any claim that may be made against it on account of the alleged loss,
theft or destruction of any such certificate or the issuance of any such new
certificate.

Section 6.3 Transfers of Stock; Registered Shareholders. Shares of
stock of the corporation shall be transferable only upon the books of the
corporation kept for such purpose upon surrender to the corporation or its
transfer agent or agents of a certificate (unless such shares shall be
uncertificated shares) representing shares, duly endorsed or accompanied by
appropriate evidence of succession, assignment or authority to transfer. Within
a reasonable time after the transfer of uncertificated shares, the corporation
shall send to the registered owner thereof a written notice containing the
information required to be set forth or stated on certificates.

The Board, subject to these By-laws, may make such rules, regulations
and conditions as it may deem expedient concerning the subscription for, issue,
transfer and registration of, shares of stock. Except as otherwise provided by
law, the corporation, prior to due presentment for registration of transfer, may
treat the registered owner of shares as the person exclusively entitled to vote,
to receive notifications, and otherwise to exercise all the rights and powers of
an owner.

Section 6.4 Record Date. For the purpose of determining the
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or to express consent to or dissent from any proposal
or corporate action in writing without a meeting, or entitled to receive payment
of any dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of shares
or for the purpose of any other lawful action, the Board may fix, in advance, a
record date, which shall not be more than sixty days nor less than ten days
before the date of such meeting, nor more than fifty days prior to any other
action.

Section 6.5 Transfer Agent and Registrar. The Board may appoint one
or more transfer agents and one or more registrars, and may require all
certificates representing

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shares to bear the signature of any such transfer agents or registrar. The same
person may act as transfer agent and registrar for the corporation.

Section 6.6 Dividends. Subject to any applicable provisions of law
and the Charter, dividends or other distributions upon the outstanding shares of
the corporation may be declared by the Board at any regular or special meeting
of the Board, or by the Executive Committee as provided in Section 3.6, and any
such dividend or distribution may be paid in cash, property, bonds or shares of
the corporation, including the bonds or shares of other corporations, except as
limited by applicable law.

ARTICLE VII

GENERAL

Section 7.1 Indemnification of Directors and Officers. To the full
extent permitted by the laws of the State of New York, the corporation shall
indemnify any person made or threatened to be made a party to any action or
proceeding, whether civil or criminal, by reason of the fact that such person,
or such person's testator or intestate,

(1) is or was a director or officer of the corporation, or

(2) serves or served another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise in any
capacity at the request of the corporation, and also is or was a
director or officer of the corporation, against judgments,
fines, amounts paid in settlement and reasonable expenses,
including attorneys' fees, actually and necessarily incurred
in connection with or as a result of such action or
proceeding, or any appeal therein.

ARTICLE VIII

AMENDMENT OF BY-LAWS

Section 8.1 Amendments. These By-Laws or any of them may be amended,
altered or repealed by the Board at any regular or special meeting if written
notice setting forth the proposed amendment, alteration or repeal shall have
been mailed to all directors at least five days before the meeting or upon the
affirmative vote by the holders of a majority of the outstanding shares;
provided, however, that Section 7.1 of these By-Laws may not be amended, altered
or repealed by the Board or the shareholders so as to affect adversely any then
existing rights of any director or officer.

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EXHIBIT 9

Metropolitan Life Insurance Company
One Madison Avenue, New York, New York 10010

[LOGO OF METLIFE
APPEARS HERE]

Christopher P. Nicholas
Associate General Counsel
Law Department

April 26, 2000

Metropolitan Life Insurance Company
One Madison Avenue
New York, New York 10010

Ladies and Gentlemen:

This opinion is furnished in connection with the filing with the Securities
and Exchange Commission of a post-effective amendment to the Registration
Statement on Form N-4 under the Securities Act of 1933 and the Investment
Company Act of 1940. This amendment is being filed by The New England Variable
Account (the "Account") with respect to individual variable annuity contracts
(the "Contracts") issued by Metropolitan Life Insurance Company ("Metropolitan
Life").

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

1. Metropolitan Life has been duly organized under the laws of the State of
New York and is a validly existing corporation.

2. The Account is validly existing as a separate account pursuant to
Section 4240 of Chapter 28 of the Consolidated Laws of New York.

3. The portion of the assets to be held in the Account equal to the reserves
and other liabilities under the Contracts and under other variable annuity
contracts the purchase payments of which may be allocated to the Account is not
chargeable with liabilities arising out of any other business Metropolitan Life
may conduct.

4. The Contracts, when issued as contemplated by the Registration Statement
and in compliance with applicable local law, will constitute legal, validly
issued and binding obligations of Metropolitan Life in accordance with their
terms.

I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of my name under the caption "Legal
Matters" in the Statement of Additional Information contained in the
Registration Statement on Form N-4 (File No. 333-11131).

Very truly yours,

/s/ Christopher P. Nicholas

Christopher P. Nicholas
Associate General Counsel

<PAGE>

Exhibit 10 (i)

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Post-Effective Amendment No. 5 to the Registration
Statement No. 333-11131 of The New England Variable Account (the "Separate
Account") of Metropolitan Life Insurance Company (the "Company") of our reports
dated February 7, 2000 and April 26, 2000, respectively, appearing in the
Statement of Additional Information, which is part of such Registration
Statement.

We also consent to the reference to us under the heading "Experts" in such
Statement of Additional Information.

Deloitte & Touche LLP
Boston, Massachusetts
April 26, 2000

<PAGE>

Exhibit 10(ii)

[Sutherland Asbill & Brennan LLP]

CONSENT OF SUTHERLAND ASBILL & BRENNAN LLP

We consent to the reference to our firm in the statement of additional
information included in Post-Effective Amendment No. 5 to the Registration
Statement on Form N-4 for Zenith Accumulator, issued through the New England
Variable Account (File No. 333-11131). In giving this consent, we do not admit
that we are in the category of persons whose consent is required under Section 7
of the Securities Act of 1933.

SUTHERLAND ASBILL & BRENNAN LLP

By: /s/ Kimberly J. Smith
-------------------------------------------------
Kimberly J. Smith

Washington, D.C.
April 26, 2000