AMERICAN SKANDIA LIFE ASSUR CORP VAR ACCT B CL 1 SUB ACCTS, N-4 EL, 1995-06-06

AMERICAN SKANDIA LIFE ASSUR CORP VAR ACCT B CL 1 SUB ACCTS
N-4 EL, 1995-06-06

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<PAGE> 1

FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON , 1995

REGISTRATION NO. 33- INVESTMENT COMPANY ACT NO. 811-5438
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

AMERICAN SKANDIA LIFE ASSURANCE CORPORATION VARIABLE ACCOUNT B
(CLASS 1 SUB-ACCOUNTS)
(Exact Name of Registrant)

AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(Name of Depositor)

ONE CORPORATE DRIVE, SHELTON, CONNECTICUT 06484
(Address of Depositor's Principal Offices)

(203) 926-1888
(Depositor's Telephone Number)

M. PATRICIA PAEZ, CORPORATE SECRETARY
ONE CORPORATE DRIVE, SHELTON, CONNECTICUT 06484
(Name and Address of Agent for Service of Process)

Copy To:

JOHN T. BUCKLEY, ESQ.
WERNER & KENNEDY
1633 BROADWAY, NEW YORK, NEW YORK 10019 (212) 408-6900
Approximate Date of Proposed Sale to the Public:

AUGUST 1, 1995 OR AS SOON AS PRACTICABLE FOLLOWING THE EFFECTIVE DATE
OF THIS REGISTRATION STATEMENT.

It is proposed that this filing become effective: (check appropriate space)
/ / immediately upon filing pursuant to paragraph (b) of Rule 485
/ / on __________pursuant to paragraph (b) of rule 485
/ / 60 days after filing pursuant to paragraph (a) (i) of rule 485
/ / on ______________pursuant to paragraph (a) (i) of Rule 485
/ / 75 days after filing pursuant to paragraph (a) (ii) of Rule 485
/ / on ______________pursuant to paragraph (a) (ii) of Rule 485
If appropriate, check the following box:
/ / This post-effective amendment designates a new effective date
for a previously filed post-effective amendment.

<TABLE>
====================================================================================================================
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
<CAPTION>
Proposed Proposed
Maximum Maximum
Amount Offering Aggregate Amount of
Title of Securities to be Price Offering Registration
to be Registered Registered Per Unit Price Fee
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
American Skandia Life Assurance
Corporation Annuity Contracts Indefinite* Indefinite* -- $500
====================================================================================================================
</TABLE>

*Pursuant to Rule 24f-2 of the Investment Company Act of 1940

Registrant has registered an indefinite number or amount of securities under the
Securities Act of 1933 pursuant to Rule 24f-2 of the Investment Company Act of
1940. The Rule 24f-2 Notice for Registrant's fiscal year 1995 will be filed
within 60 days of the close of the fiscal year.

REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS
MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A
FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

<PAGE> 2

CROSS REFERENCE SHEET PURSUANT TO RULE 495(a)

<TABLE>
<CAPTION>
N-4 Item No. Prospectus Heading
------------ ------------------
<S> <C>
1. Cover Page Cover Page

2. Definitions Definitions

3. Synopsis or Highlights Highlights

4. Condensed Financial Information Condensed Financial Information, Advertising

5. General Description of Registrant, Depositor Investment Options, Operations of the
and Portfolio Companies Separate Accounts, The Company

6. Deductions Charges Assessed or Assessable Against the Annuity, Charges
Assessed Against Assets, Charges of the Underlying Mutual Funds

7. General Description of Variable Purchasing Annuities, Rights, Benefits and
Annuity Contracts Services, Modification

8. Annuity Period Annuity Payments

9. Death Benefit Death Benefit

10. Purchases and Contract Value Purchasing Annuities, Account Value and Surrender Value

11. Redemptions Distributions, Pricing of Transfers and Distributions,
Deferral of Transactions

12. Taxes Certain Tax Considerations

13. Legal Proceedings Legal Proceedings

14. Table of Contents of the Statement of Contents of the Statement of
Additional Information Additional Information
</TABLE>

<TABLE>
<CAPTION>
SAI Heading
-----------
<S> <C>
15. Cover Page Statement of Additional Information

16. Table of Contents Table of Contents

17. General Information and History General Information Regarding American
Skandia Life Assurance Corporation

18. Services Independent Auditors

19. Purchase of Securities Being Offered Noted in Prospectus under Breakpoints,
Exchange Contracts, Bank Drafting and Sale of the Annuities

20. Underwriters Principal Underwriter
</TABLE>

(Continued)

<PAGE> 3

CROSS REFERENCE SHEET PURSUANT TO RULE 495(a)

<TABLE>
<CAPTION>
N-4 Item No. SAI Headings
------------ ------------
<S> <C>
21. Calculation of Performance Data Calculation of Performance Data

22. Annuity Payments Noted in Prospectus under Annuity Payments

23. Financial Statements Noted in Prospectus under The Company
</TABLE>

<TABLE>
<CAPTION>
Part C Heading
--------------
<S> <C>
24. Financial Statements and Exhibits Financial Statements
and Exhibits

25. Directors and Officers of the Depositor Noted in Prospectus under
Executives and Directors

26. Persons Controlled by or Under Persons Controlled By or
Common Control with the Under Common Control with the
Depositor or Registrant Depositor or Registrant

27. Number of Contractowners Number of Contractowners

28. Indemnification Indemnification

29. Principal Underwriters Principal Underwriters

30. Location of Accounts and Records Location of Accounts
and Records

31. Management Services Management Services

32. Undertakings Undertakings
</TABLE>

<PAGE> 4

This Prospectus describes a type of annuity (the "Annuity") being offered by
American Skandia Life Assurance Corporation ("we", "our" or "us"), One
Corporate Drive, Shelton, Connecticut, 06484. This flexible premium Annuity
may be offered as individual annuity contracts or as interests in a group
annuity. The Table of Contents is on Page 4. Definitions applicable to this
Prospectus are on Page 6. The highlights of this offering are described
beginning on Page 8. This Prospectus contains a detailed discussion of matters
you should consider before purchasing this Annuity. A Statement of Additional
Information has been filed with the Securities and Exchange Commission and is
available from us without charge upon request. The contents of the Statement
of Additional Information are described on Page 46. THE ANNUITY OR CERTAIN OF
ITS INVESTMENT OPTIONS MAY NOT BE AVAILABLE IN ALL JURISDICTIONS. VARIOUS
RIGHTS AND BENEFITS MAY DIFFER BETWEEN JURISDICTIONS TO MEET APPLICABLE LAWS
AND/OR REGULATIONS.

A Purchase Payment for this Annuity is assessed any applicable tax charge (see
"Tax Charges"). It is then allocated to the investment options you select,
except in certain jurisdictions, where allocations of Purchase Payments we
receive during the "free- look" period that you direct to any Sub-accounts are
temporarily allocated to the WF Money Market Sub-account (see "Allocation of
Net Purchase Payments"). You may transfer Account Value between investment
options (see "Investment Options" and "Transfers"). Account Value may be
distributed as periodic annuity payments in a "payout phase". Such annuity
payments can be guaranteed for life (see "Annuity Payments"). During the
"accumulation phase" (the period before any payout phase), you may surrender
the Annuity for its Surrender Value or make withdrawals (see "Distributions").
Such distributions may be subject to tax, including a tax penalty, and any
applicable contingent deferred sales charges (see "Contingent Deferred Sales
Charge"). A death benefit may be payable during the accumulation phase (see
"Death Benefit").

Account Value in the variable investment options increases or decreases daily
to reflect investment performance and the deduction of charges. No minimum
amount is guaranteed (see "Account Value in the Sub-accounts"). The variable
investment options are Class 1 Sub-accounts of American Skandia Life Assurance
Corporation Variable Account B ("Separate Account B") (see "Separate Accounts"
and "Separate Account B"). Each Sub-account invests exclusively in one
portfolio of an underlying fund or in an underlying fund that does not have
distinct portfolios. As of the date of this Prospectus, the underlying mutual
funds are Life & Annuity Trust ("LA Trust"), American Skandia Trust ("the AST
Trust") and The Alger American Fund. The portfolios of LA Trust in which the
Sub-accounts invest are: (a) WF Asset Allocation, (b) WF U.S. Government
Allocation, (c) WF Growth and Income, and (d) WF Money Market. The portfolios
of American Skandia Trust in which the Sub-accounts invest are: (a) JanCap
Growth, (b) T. Rowe Price International Equity, (c) Founders Capital
Appreciation, (d) INVESCO Equity Income, (e) PIMCO Total Return Bond, (f) PIMCO
Limited Maturity Bond, (g) AST Scudder International Bond and (h) Berger
Capital Growth. The portfolio of The Alger American Fund is Growth.

In most jurisdictions, Account Value may be allocated to a fixed investment
option during the accumulation phase. Account Value so allocated earns a fixed
rate of interest for a specified period of time referred to as a Guarantee
Period. Guarantee Periods of different durations may be offered (see "Fixed
Investment Options"). Such an allocation and the interest earned is guaranteed
by us only if held to its Maturity Date, and, where required by law, the 30
days prior to the Maturity Date. Otherwise, we do not guarantee any minimum
amount, because the value may be increased or decreased by a market value
adjustment (see "Account Value of the Fixed Allocations"). Assets supporting
such allocations in the accumulation phase are held in American Skandia Life
Assurance Corporation Separate Account D (see "Separate Accounts" and "Separate
Account D").
(continued on page 2)

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. PLEASE
READ THIS PROSPECTUS AND KEEP IT FOR FUTURE REFERENCE.
- --------------------------------------------------------------------------------
FOR FURTHER INFORMATION CALL 1-800-680-8920
Prospectus Dated: August 1, 1995
Statement of Additional Information Dated: August 1, 1995

1
<PAGE> 5
We guarantee fixed annuity payments. We also guaranty any adjustable annuity
payments we may make available (see "Annuity Payments").

Taxes on gains during the accumulation phase may be deferred until you begin to
take distributions from your Annuity. Distributions before age 59 1/2 may be
subject to a tax penalty. In the payout phase, a portion of each annuity
payment may be treated as a return of your "investment in the contract" until
it is completely recovered. Transfers between investment options are not
subject to taxation. The Annuity may also qualify for special tax treatment
under certain sections of the Code, including, but not limited to, Sections
401, 403 or 408 (see "Certain Tax Considerations").

PURCHASE PAYMENTS UNDER THESE ANNUITIES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK SUBSIDIARY OF WELLS FARGO BANK, N.A., AND
ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.

2
<PAGE> 6

(This page has been purposely left blank)

3
<PAGE> 7
TABLE OF CONTENTS
<TABLE>
<S> <C>
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
CONTRACT EXPENSE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
EXPENSE EXAMPLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
CONDENSED FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Unit Prices And Numbers Of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Yields On Money Market Sub-account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
INVESTMENT OPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Variable Investment Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Fixed Investment Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
OPERATIONS OF THE SEPARATE ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Separate Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Separate Account B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Separate Account D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
INSURANCE ASPECTS OF THE ANNUITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
CHARGES ASSESSED OR ASSESSABLE AGAINST THE ANNUITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Contingent Deferred Sales Charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Tax Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Transfer Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Allocation Of Annuity Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
CHARGES ASSESSED AGAINST THE ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Administration Charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Mortality and Expense Risk Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
CHARGES OF THE UNDERLYING MUTUAL FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
PURCHASING ANNUITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Uses Of The Annuity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Application And Initial Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Breakpoints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Exchange Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Bank Drafting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Right to Return the Annuity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Allocation of Net Purchase Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Balanced Investment Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Ownership, Annuitant and Beneficiary Designations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ACCOUNT VALUE AND SURRENDER VALUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Account Value in the Sub-accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Account Value of the Fixed Allocations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Additional Amounts in the Fixed Allocations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
RIGHTS, BENEFITS AND SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Additional Purchase Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Changing Revocable Designations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Allocation Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Renewals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Dollar Cost Averaging . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Rebalancing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Surrender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Medically-Related Surrender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Free Withdrawals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Partial Withdrawals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Systematic Withdrawals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Minimum Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Death Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Annuity Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Qualified Plan Withdrawal Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Pricing of Transfers and Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Transfers, Assignments or Pledges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Reports to You . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Lines of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . 36
Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Liquidity and Capital Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
</TABLE>

4
<PAGE> 8
<TABLE>
<S> <C>
Segment Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Reinsurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Executive Officers and Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Summary Compensation Table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Long-Term Incentive Plans - Awards in the Last Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . 42
Compensation of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Compensation Committee Interlocks and Insider Participation . . . . . . . . . . . . . . . . . . . . . . . 43
CERTAIN TAX CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Our Tax Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Tax Considerations Relating to Your Annuity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Non-natural Persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Natural Persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Assignments and Pledges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Penalty on Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Annuity Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Gifts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Tax Free Exchanges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Transfers Between Investment Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Generation-Skipping Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Diversification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Federal Income Tax Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Tax Considerations When Using Annuities in Conjunction with Qualified Plans . . . . . . . . . . . . . . . . . 45
Individual Retirement Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Tax Sheltered Annuities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Corporate Pension and Profit-sharing Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
H.R. 10 Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Tax Treatment of Distributions from Qualified Annuities . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 457 Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SALE OF THE ANNUITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
OTHER MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Deferral of Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Resolving Material Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Modification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Misstatement of Age or Sex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Ending the Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
APPENDIX A FINANCIAL STATEMENTS FOR AMERICAN SKANDIA LIFE ASSURANCE CORPORATION . . . . . . . . . . . . . . . . . . . 50
APPENDIX B SHORT DESCRIPTION OF THE UNDERLYING MUTUAL FUNDS' PORTFOLIO INVESTMENT
OBJECTIVES AND POLICIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
</TABLE>

5
<PAGE> 9

DEFINITIONS: The following are key terms used in this Prospectus. Other terms
are defined in this Prospectus as they appear.

ACCOUNT VALUE is the value of each allocation to a Sub-account or a Fixed
Allocation prior to the Annuity Date, plus any earnings, and/or less any
losses, distributions and charges thereon, before assessment of any applicable
contingent deferred sales charge. Account Value is determined separately for
each Sub-account and for each Fixed Allocation, and then totaled to determine
Account Value for your entire Annuity. Account Value of each Fixed Allocation
on other than such Fixed Allocation's Maturity Date may be calculated using a
market value adjustment.

ANNUITANT is the person upon whose life your Annuity is written.

ANNUITY is the type of annuity being offered pursuant to this Prospectus. It
is also, if issued, your individual Annuity, or with respect to a group
Annuity, the certificate evidencing your participation in a group Annuity. It
also represents an account we set up and maintain to track our obligations to
you.

ANNUITY DATE is the date annuity payments are to commence.

ANNUITY YEARS are continuous 12-month periods commencing on the Issue Date and
each anniversary of the Issue Date.

APPLICATION is the enrollment form or application form we may require you to
submit for an Annuity.

BENEFICIARY is a person designated as the recipient of the death benefit.

CODE is the Internal Revenue Code of 1986, as amended from time to time.

CONTINGENT ANNUITANT is the person named to become the Annuitant on the
Annuitant's death prior to the Annuity Date.

CURRENT RATES are the interest rates we offer to credit to Fixed Allocations
for the duration of newly beginning Guarantee Periods under this Annuity.
Current Rates are contained in a schedule of rates established by us from time
to time for the Guarantee Periods then being offered. We may establish
different schedules for different classes and for different annuities.

FIXED ALLOCATION is an allocation of Account Value that is to be credited a
fixed rate of interest for a specified Guarantee Period during the accumulation
phase and is to be supported by assets in Separate Account D.

GUARANTEE PERIOD is a period of time during the accumulation phase during which
we credit a fixed rate of interest on a Fixed Allocation.

IN WRITING is in a written form satisfactory to us and filed at the Office.

INTERIM VALUE is, as of any particular date, the initial value of a Fixed
Allocation plus all interest credited thereon, less the sum of all previous
transfers and withdrawals of any type from such Fixed Allocation of such
Interim Value and interest thereon from the date of each withdrawal or
transfer.

ISSUE DATE is the effective date of your Annuity.

MVA is a market value adjustment used in the determination of Account Value of
each Fixed Allocation as of a date other than such Fixed Allocation's Maturity
Date, and, where required by law, the 30 days prior to the Maturity Date.

MATURITY DATE is the last day in a Guarantee Period.

MINIMUM DISTRIBUTIONS are minimum amounts that must be distributed each year
from an Annuity if used in relation to certain qualified plans under the Code.

NET PURCHASE PAYMENT is a Purchase Payment less any applicable charge for
taxes.

6
<PAGE> 10
OFFICE is our business office, American Skandia Life Assurance Corporation, One
Corporate Drive, P.O. Box 862, Shelton, Connecticut 06484.

OWNER is either an eligible entity or person named as having ownership rights
in relation to an Annuity issued as an individual contract. An Annuity may be
issued as a certificate evidencing interest in a group annuity contract. If
so, the rights, benefits and requirements of and the events relating to an
Owner, as described in this Prospectus, will be the rights, benefits and
requirements of and events relating to the person or entity designated as the
participant in such certificate.

PURCHASE PAYMENT is a cash consideration you give us for certain rights,
privileges and benefits provided under an Annuity according to its terms.

SUB-ACCOUNT is a division of Separate Account B. We use Sub-accounts to
calculate variable benefits under this Annuity.

SURRENDER VALUE is the value of your Annuity available upon surrender prior to
the Annuity Date. It equals the Account Value as of the date we price the
surrender less any applicable contingent deferred sales charge.

SYSTEMATIC WITHDRAWAL is one of a plan of periodic withdrawals of Surrender
Value during the accumulation phase. Such a plan is subject to our rules.

UNIT is a measure used to calculate your Account Value in a Sub-account prior
to the Annuity Date.

UNIT PRICE is used for calculating (a) the number of Units allocated to a
Sub-account, and (b) the value of transactions into or out of a Sub-account or
benefits based on Account Value in a Sub-account prior to the Annuity Date.
Each Sub-account has its own Unit Price which will vary each Valuation Period
to reflect the investment experience of that Sub-account.

VALUATION DAY is every day the New York Stock Exchange is open for trading or
any other day that the Securities and Exchange Commission requires mutual funds
or unit investment trusts to be valued.

VALUATION PERIOD is the period of time between the close of business of the New
York Stock Exchange on successive Valuation Days.

"We", "us", or "our" means American Skandia Life Assurance Corporation.

"You" or "your" means the Owner.

7
<PAGE> 11

HIGHLIGHTS: The following are only the highlights of the Annuity being offered
pursuant to this Prospectus. A more detailed description follows these
highlights.

(1) INVESTMENT OPTIONS: We currently offer multiple variable and,
in most jurisdictions, fixed investment options.

During the accumulation phase, we currently offer a number of variable
investment options. Each of these investment options is a Class 1 Sub-account
of Separate Account B. Each Sub-account invests exclusively in one underlying
mutual fund or a portfolio of an underlying mutual fund. Certain of the
variable investment options may not be available in all jurisdictions. As of
the date of this Prospectus, we offer thirteen Sub-accounts. Four of the
underlying mutual fund portfolios are managed by Wells Fargo Bank, N.A. The
available portfolios of the LA Trust in which the Sub-accounts invest are as
follows: (a) WF Asset Allocation Fund; (b) WF U.S. Government Allocation Fund;
(c) WF Growth and Income Fund; (d) WF Money Market Fund. Wells Fargo Nikko
Investment Advisors ("WFNIA") serves as Sub-advisor for the Asset Allocation
Fund and the U.S. Government Allocation Fund. American Skandia Investment
Services, Incorporated ("ASISI"), formerly American Skandia Life Investment
Management, Inc., is the investment manager for the AST Trust. Currently,
ASISI engages a sub-advisor ("Sub-advisor") for each portfolio. The
Sub-advisor for each portfolio is as follows: (a) JanCap Growth Portfolio:
Janus Capital Corporation; (b) T. Rowe Price International Equity Portfolio:
T. Rowe Price Associates, Inc.; (c) Founders Capital Appreciation Portfolio:
Founders Asset Management, Inc.; (d) INVESCO Equity Income Portfolio: INVESCO
Funds Group, Inc.; (e) PIMCO Total Return Bond: Pacific Investment Management
Company; (f) PIMCO Limited Maturity Bond: Pacific Investment Management
Company; (g) AST Scudder International Bond Portfolio: Scudder, Stevens &
Clark, Inc.; and (h) Berger Capital Growth Portfolio: Berger Associates, Inc.
The Growth Portfolio of The Alger American Fund is managed by Fred Alger
Management, Inc.

In most jurisdictions, we also offer the option during the accumulation phase
of earning one or more fixed rates of interest on all or a portion of your
Account Value. As of the date of this Prospectus, we offered the option to
make allocations at interest rates that could be guaranteed for 1, 2, 3, 5, 7
and 10 years. Each such Fixed Allocation earns the fixed interest rate
applicable as of the date of such allocation. The interest rate credited to a
Fixed Allocation does not change during its Guarantee Period. You may maintain
multiple Fixed Allocations. From time-to-time we declare Current Rates for
Fixed Allocations beginning a new Guarantee Period. The rates we declare are
subject to a minimum, but we may declare higher rates. The minimum is
determined in relation to an index that we do not control.

The end of a Guarantee Period for a specific Fixed Allocation is called its
Maturity Date. At that time, the Guarantee Period normally "renews" and we
begin crediting interest for a new Guarantee Period lasting the same amount of
time as the one just ended. That Fixed Allocation then earns interest during
the new Guarantee Period at a rate that is not less than the one then being
earned by Fixed Allocations for that Guarantee Period by new Annuity purchasers
in the same class. You also may choose a different Guarantee Period from among
those we are then currently making available or you may transfer that Account
Value to a variable Sub- account.

In the payout phase, you may elect fixed annuity payments based on our then
current annuity rates. We may also make available adjustable annuity rates.

For more information, see the section entitled Investment Options, including
the following subsections: (a) Variable Investment Options; and (b) Fixed
Investment Options.

(2) OPERATIONS OF THE SEPARATE ACCOUNTS: In the accumulation
phase, the assets supporting guarantees we make in relation to Fixed
Allocations are held in our Separate Account D. This is a "non-unitized"
separate account. However, values and benefits calculated on the basis of
Fixed Allocations are guaranteed by our general account. In the payout phase,
fixed annuity payments and any adjustable annuity payments we may make
available are also guaranteed by our general account, but the assets supporting
such payments are not held in Separate Account D.

In the accumulation phase, the assets supporting the Account Values maintained
in the Sub-accounts are held in our Separate Account B. These are Class 1
Sub-accounts of Separate Account B. Values and benefits based on these
Sub-accounts are not guaranteed and will vary with the investment performance
of the underlying mutual funds or fund portfolios, as applicable.

For more information, see the section entitled Operations of the Separate
Accounts, including the following subsections: (a) Separate Accounts; (b)
Separate Account B; and (c) Separate Account D.

(3) INSURANCE ASPECTS OF THE ANNUITY: There are insurance risks
which we bear in relation to the Annuity. For more information, see the
section entitled Insurance Aspects of the Annuity.

(4) CHARGES ASSESSED OR ASSESSABLE AGAINST THE ANNUITY: The
Annuity charges which are assessed or may be assessable under certain
circumstances are the contingent deferred sales charge, the maintenance fee, a
charge for taxes and a transfer fee. These

8
<PAGE> 12
charges are allocated according to our rules. We may also charge for certain
special services. For more information, see the section entitled Charges
Assessed or Assessable Against the Annuity, including the following
subsections: (a) Contingent Deferred Sales Charge; (b) Tax Charges; (c)
Transfer Fee; and (d) Allocation of Annuity Charges.

(5) CHARGES ASSESSED AGAINST THE ASSETS: The charges assessed
against assets in the Sub-accounts are the administration charge and the
mortality and expense risk charges. There are no charges deducted from the
assets supporting Fixed Allocations. For more information, see the section
entitled Charges Assessed Against the Assets, including the following
subsections: (a) Administration Charge; and (b) Mortality and Expense Risk
Charges.

(6) CHARGES OF THE UNDERLYING MUTUAL FUNDS: Each underlying
mutual fund portfolio assesses various charges, including charges for
investment management and investment advisory fees. These charges generally
differ between portfolios within the underlying mutual fund. You will find
additional details in the fund prospectus and its statement of additional
information.

(7) PURCHASING ANNUITIES: Annuities are available for multiple
uses, including as a funding vehicle for various retirement programs which
qualify for special treatment under the Code. We may require a properly
completed Application, an acceptable Purchase Payment, and any other materials
under our underwriting rules before we agree to issue an Annuity. We may offer
special programs in relation to Annuities on which we receive large Purchase
Payments and/or Annuities obtained as an exchange of a contract issued by an
insurer not affiliated with us. You have the right to return an Annuity within
a "free-look" period if you are not satisfied with it. In most jurisdictions,
the initial Purchase Payment and any Purchase Payments received during the
"free- look" period are allocated according to your instructions. In
jurisdictions that require a "free-look" provision such that, if the Annuity is
returned under that provision, we must return at least your Purchase Payments
less any withdrawals, we temporarily allocate such Purchase Payments to the WF
Money Market Sub-account. Where permitted by law in such jurisdictions, we
will allocate such Purchase Payments according to your instructions, without
any temporary allocation to the WF Money Market Sub-account if you execute a
return waiver. We offer a balanced investment program in relation to your
initial Purchase Payment. Certain designations must be made, including an
Owner and an Annuitant. You may also make certain other designations that
apply to the Annuity if issued. These designations include a contingent Owner,
a Contingent Annuitant (Contingent Annuitants may be required in conjunction
with certain uses of the Annuity), a Beneficiary, and a contingent Beneficiary.
See the section entitled Purchasing Annuities, including the following
subsections: (a) Uses of the Annuity; (b) Application and Initial Payment;
(c) Breakpoints; (d) Exchange Contracts; (e) Bank Drafting; (f) Right to Return
the Annuity; (g) Allocation of Net Purchase Payments; (h) Balanced Investment
Program; and (i) Ownership, Annuitant and Beneficiary Designations.

(8) ACCOUNT VALUE AND SURRENDER VALUE: In the accumulation phase
your Annuity has an Account Value. Your total Account Value as of a particular
date is the sum of your Account Value in each Sub-account and in each Fixed
Allocation. Surrender Value is the Account Value less any applicable
contingent deferred sales charge. To determine your Account Value in each Sub-
account we multiply the Unit Price as of the Valuation Period for which the
calculation is being made times the number of Units attributable to you in that
Sub-account as of that Valuation Period. We also determine your Account Value
separately for each Fixed Allocation. A Fixed Allocation's Account Value as of
a particular date is determined by multiplying its then current Interim Value
times the MVA. No MVA applies to a Fixed Allocation as of its Maturity Date,
and, where required by law, the 30 days prior to the Maturity Date. Under
certain circumstances, the MVA formula may change. For more information, see
the section entitled Account Value and Surrender Value, including the following
subsections: (a) Account Value in the Sub-accounts; (b) Account Value of Fixed
Allocations; and (c) Additional Amounts in the Fixed Allocations.

(9) RIGHTS, BENEFITS AND SERVICES: You have a number of rights
and benefits under an Annuity once issued. We also currently provide a number
of services to Owners. These rights, benefits and services are subject to a
number of rules and conditions. These rights, benefits and services include,
but are not limited to, those described in this Prospectus. We accept
additional Purchase Payments during the accumulation phase. You may use bank
drafting to make Purchase Payments. You may change revocable designations.
You may transfer Account Values between investment options. Transfers in
excess of 12 per Annuity Year are subject to a fee. We offer dollar cost
averaging and rebalancing during the accumulation phase. During the
accumulation phase, surrender, free withdrawals and partial withdrawals are
available, as are medically-related surrenders under which the contingent
deferred sales charge is waived under specified circumstances. In the
accumulation phase we offer Systematic Withdrawals and, for Annuities used in
qualified plans, Minimum Distributions. We offer fixed annuity options, and
may offer adjustable annuity options that can guarantee payments for life. In
the accumulation phase, a death benefit may be payable. You may transfer or
assign your Annuity unless such rights are limited in conjunction with certain
uses of the Annuity. You may exercise certain voting rights in relation to the
underlying mutual fund portfolios in which the Sub-accounts invest. You have
the right to receive certain reports periodically.

For additional information, see the section entitled Rights, Benefits and
Services including the following subsections: (a) Additional Purchase
Payments; (b) Bank Drafting; (c) Changing Revocable Designations; (d)
Allocation Rules; (e) Transfers; (f) Renewals; (g) Dollar Cost Averaging; (h)
Rebalancing; (i) Distributions (including: (i) Surrender; (ii)
Medically-Related Surrender; (iii) Free Withdrawals; (iv) Partial Withdrawals;
(v) Systematic Withdrawals; (vi) Minimum Distributions; (vii) Death Benefit;
(viii) Annuity Payments; and (ix)

9
<PAGE> 13
Qualified Plan Withdrawal Limitations); (j) Pricing of Transfers and
Distributions; (k) Voting Rights; (l) Transfers, Assignments and Pledges; and
(m) Reports to You.

(10) THE COMPANY: American Skandia Life Assurance Corporation is a
wholly owned subsidiary of American Skandia Investment Holding Corporation,
whose indirect parent is Skandia Insurance Company Ltd.. Skandia Insurance
Company Ltd. is a Swedish company that holds a number of insurance companies in
many countries. The predecessor to Skandia Insurance Company Ltd. commenced
operations in 1855. For more information, see the section entitled The Company
and the following subsections: (a) Lines of Business; (b) Selected Financial
Data; (c) Management's Discussion and Analysis of Financial Condition and
Results of Operations (including: (i) Results of Operations; (ii) Liquidity
and Capital Resources; and (iii) Segment Information); (d) Reinsurance; (e)
Reserves; (f) Competition; (g) Employees; (h) Regulation; (i) Executive Officer
and Directors; and (j) Executive Compensation (including: (i) Summary
Compensation Table; (ii) Long Term Incentive Plans-Awards in the Last Fiscal
Year; (iii) Compensation of Directors; and (iv) Compensation Committee
Interlocks and Insider Participation).

AVAILABLE INFORMATION: A Statement of Additional Information is available from
us without charge upon request by writing American Skandia Life Assurance
Corporation, Stagecoach Annuity, P.O. Box 862, Shelton, CT 06484. It includes
further information, as described in the section of this Prospectus entitled
"Contents of the Statement of Additional Information." You may obtain a copy
of the Statement of Additional Information by filling in the coupon at the end
of this Prospectus and sending it (or a written request) to American Skandia
Life Assurance Corporation, Attention: Stagecoach Variable Annuity
Administration, P.O. Box 862, Shelton, CT 06484. This Prospectus is part of
the registration statements we filed with the Securities and Exchange
Commission ("SEC") regarding this offering. Additional information on us and
this offering is available in those registration statements and the exhibits
thereto. You may obtain copies of these materials at the prescribed rates from
the SEC's Public Reference Section, 450 Fifth Street, N.W., Washington, D.C.,
20549. You may inspect and copy those registration statements and the exhibits
thereto at the SEC's public reference facilities at the above address, Rm.
1024, and at the SEC's Regional Offices, 7 World Trade Center, New York, NY,
and the Everett McKinley Dirksen Building, 219 South Dearborn Street, Chicago,
IL.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE:

To the extent and only to the extent that any statement in a document
incorporated by reference into this Prospectus is modified or superseded by a
statement in this Prospectus or in a later-filed document, such statement is
hereby deemed so modified or superseded and not part of this Prospectus.

We furnish you without charge a copy of any or all the documents incorporated
by reference in this Prospectus, including any exhibits to such documents which
have been specifically incorporated by reference. We do so upon receipt of
your written or oral request. Please address your request to American Skandia
Life Assurance Corporation, Attention: Stagecoach, P.O. Box 862, Shelton,
Connecticut, 06484. Our phone number is 1-(800) 680-8920.

CONTRACT EXPENSE SUMMARY: The summary provided below includes information
regarding the expenses for your Annuity, for the Sub- accounts and for the
underlying mutual fund portfolios. The only expense applicable if you allocate
all your Account Value to Fixed Allocations would be the contingent deferred
sales charge.

More detail regarding the expenses of the underlying mutual funds and their
portfolios may be found either in the prospectuses for such mutual funds or in
the annual reports of such mutual funds.

The expenses of our Sub-accounts (not those of the underlying mutual fund
portfolios in which our Sub-accounts invest) are the same no matter which
Sub-account you choose. Therefore, these expenses are only shown once below.

10
<PAGE> 14

YOUR TRANSACTION EXPENSES

<TABLE>
<S> <C>
Contingent Deferred Sales Charge, 7% of each Purchase Payment,
as a percentage of Purchase Payments liquidated decreasing 1% in the third year,
another 1% in the fourth year
another 1% in the fifth year
another 1% in the sixth year
and another 1% in the 7th year
with none applicable as to a Purchase Payment
starting in the eighth year after
it was allocated to Account Value

Annual Maintenance Fee None

Tax Charges Dependent on the requirements of the applicable jurisdiction

Transfer Fee $10 for each transfer after the twelfth in any Annuity Year
</TABLE>

ANNUAL EXPENSES OF THE SUB-ACCOUNTS (AS A PERCENTAGE OF AVERAGE DAILY
NET ASSETS)

<TABLE>
<S> <C>
Mortality and Expense Risk Charges 1.25%
Administration Charges 0.15%
-----
Total Annual Expenses of the Sub-accounts 1.40%
</TABLE>

UNDERLYING MUTUAL FUND PORTFOLIO ANNUAL EXPENSES (AS A PERCENTAGE OF
AVERAGE NET ASSETS)

Unless otherwise shown, the expenses shown below are for the year ending
December 31, 1994. "N/A" shown below indicates that no entity has agreed to
reimburse the particular expense indicated. "+" indicates that no
reimbursement was provided in 1994, but that the underlying mutual fund has
indicated to us that current arrangements (which may change) provide for
reimbursement.

<TABLE>
<CAPTION>
Manage- Manage- Total Total
ment ment Other Other Annual Annual
Fee Fee Expenses Expenses Expense Expenses
after without after without after without
any any any any any any
applicable applicable applicable applicable applicable applicable
reimburse- reimburse- reimburse- reimburse- reimburse- reimburse-
ment ment ment ment ment ment
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Life & Annuity Trust
WF Asset Allocation(1) 0.00% 0.60% 0.70% 1.64% 0.70% 2.24%
WF U. S. Government Allocation(1) 0.00% 0.60% 0.70% 12.13% 0.70% 12.73%
WF Growth & Income(1) 0.00% 0.60% 0.70% 9.58% 0.70% 10.18%
WF Money Market(2) 0.00% 0.45% 0.55% 10.98% 0.55% 11.43%

American Skandia Trust
JanCap Growth N/A 0.90% + 0.28% + 1.18%
T. Rowe Price
International Equity(3) N/A 1.00% 0.75% 0.77% 1.75% 1.77%
Founders Capital Appreciation(3) N/A 0.90% 0.40% 0.65% 1.30% 1.55%
INVESCO Equity Income(3) N/A 0.75% + 0.39% + 1.14%
PIMCO Total Return Bond(3) N/A 0.65% + 0.37% + 1.02%
PIMCO Limited Maturity Bond(4) N/A 0.65% 0.40% 0.86% 1.05% 1.51%
AST Scudder International Bond(2) N/A 1.00% + 0.68% + 1.68%
Berger Capital Growth(2) N/A 0.75% 0.50% 0.95% 1.25% 1.70%

The Alger American Fund
Growth N/A 0.75% + 0.11% + 0.86%

</TABLE>

11
<PAGE> 15
The following notes indicate that certain portfolios commenced operations in
1994 or 1995 and therefore the expenses shown are annualized, and where
applicable, estimated and should not be considered representative of future
expenses; actual expenses may be greater than shown.

(1) These portfolios commenced operations in April, 1994, therefore expenses
are annualized.

(2) These portfolios commenced operations in May, 1994, therefore expenses are
annualized.

(3) These portfolios commenced operations on January 4, 1994, therefore
expenses are annualized.

(4) This portfolio commenced operation on May 1, 1995, therefore expenses
shown are annualized.

The expenses of the underlying mutual fund portfolios either are currently being
partially reimbursed or may be partially reimbursed in the future. There can be
no assurances that any reimbursement will continue. Management Fees, Other
Expenses and Total Annual Expenses are provided above on both a reimbursed and
not reimbursed basis, if applicable. See the prospectus or statement of
additional information of the underlying mutual fund for details.

EXPENSE EXAMPLES: The examples which follow are designed to assist you in
understanding the various costs and expenses you will bear directly or
indirectly if you maintain Account Value in the Sub-accounts. The examples
reflect expenses of our Sub-accounts, as well as those for the underlying mutual
fund portfolios.

The examples shown assume that: (a) all your Account Value is maintained only
in Sub-accounts; (b) fees and expenses remain constant; (c) there are no
withdrawals of Account Value during the period shown; (d) there are no transfers
or other transactions subject to a fee during the period shown; (e) no tax
charge applies; and (f) the expenses throughout the period for the underlying
mutual fund portfolios will be the lower of the expenses without any applicable
reimbursement or expenses after any applicable reimbursement, as shown above in
the section entitled Contract Expense Summary.

THE EXAMPLES ARE ILLUSTRATIVE ONLY - THEY SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES OF THE UNDERLYING MUTUAL FUND
PORTFOLIOS - ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. The
Sub-accounts are referred to below by their specific names.

EXAMPLES (AMOUNTS SHOWN ARE ROUNDED TO THE NEAREST DOLLAR)

If you surrender your Annuity at the end of the applicable time period, you
would pay the following expenses on a $1,000 investment, assuming 5% annual
return on assets:

<TABLE>
<CAPTION>
Sub-accounts After:
1 yr. 3 yrs. 5 yrs. 10 yrs.
<S> <C> <C> <C> <C>
WF Asset Allocation 92 127 154 245
WF U.S. Government Allocation 92 127 154 245
WF Growth and Income 92 127 154 245
WF Money Market 90 122 146 228
JanCap Growth 96 141 178 293
T. Rowe Price International Equity 102 158 207 349
Founders Capital Appreciation 98 145 185 306
INVESCO Equity Income 96 140 177 290
PIMCO Total Return Bond 95 136 170 277
PIMCO Limited Maturity Bond 95 137 172 280
AST Scudder International Bond 102 157 204 342
Berger Capital Growth 97 143 182 300
AA Growth 93 131 162 260
</TABLE>

12
<PAGE> 16
If you do not surrender your Annuity at the end of the applicable time period
or begin taking annuity payments at such time, you would pay the following
expenses on a $1,000 investment, assuming 5% annual return on assets:

<TABLE>
<CAPTION>
Sub-accounts After:
1 yr. 3 yrs. 5 yrs. 10 yrs.
<S> <C> <C> <C> <C>
WF Asset Allocation 22 67 114 245
WF U.S. Government Allocation 22 67 114 245
WF Growth and Income 22 67 114 245
WF Money Market 20 62 106 228
JanCap Growth 26 81 138 293
T. Rowe Price International Equity 32 98 167 349
Founders Capital Appreciation 28 85 145 306
INVESCO Equity Income 26 80 137 290
PIMCO Total Return Bond 25 76 130 277
PIMCO Limited Maturity Bond 25 77 132 280
AST Scudder International Bond 32 97 164 342
Berger Capital Growth 27 83 142 300
AA Growth 23 71 122 260
</TABLE>

CONDENSED FINANCIAL INFORMATION: The Unit Prices and number of Units in the
Sub-accounts are shown below, as is yield information on the WF Money Market
Sub-account. All or some of these Sub-accounts were available during the
periods shown as investment options for other variable annuities we offer
pursuant to different prospectuses. The charges assessed against the
Sub-accounts under the terms of those other variable annuities are the same as
the charges assessed against such Sub-accounts under the Annuity offered
pursuant to this Prospectus.

UNIT PRICES AND NUMBERS OF UNITS: The following table shows: (a) the
Unit Price as of the dates shown for Units in each of the Class 1 Sub-accounts
of Separate Account B being offered pursuant to this Prospectus or which we
offer pursuant to certain other prospectuses; and (b) the number of Units
outstanding in each such Sub-account as of the dates shown. The year in which
operations commenced in each such Sub-account is noted in parentheses. The
portfolios in which a particular Sub-account invests may or may not have
commenced operations prior to the date such Sub-account commenced operations.
The initial offering price for each Sub-account was $10.00.

Sub-account and the Year Sub-account Operations Commenced

<TABLE>
<CAPTION>
WF WF
WF U.S. Growth WF
Asset Government and Money
Allocation Allocation Income Market
(1994) (1994) (1994) (1994)
---- ------ ------ ------
<S> <C> <C> <C> <C>
No. of Units
- ------------
as of 12/31/94 743,176 84,609 204,067 144,050

Unit Price
- ----------
as of 12/31/94 $10.01 $ 9.94 $10.34 $10.18
</TABLE>

Sub-account and the Year Sub-account Operations Commenced

<TABLE>
<CAPTION>
T. Rowe
Price Founders INVESCO
JanCap International Capital Equity
Growth Equity Appreciation Income
(1994) (1994) (1994) (1994)
---- ------ ------ ------
<S> <C> <C> <C> <C>
No. of Units
- ------------
as of 12/31/94 22,354,170 11,166,758 2,575,105 6,633,333

Unit Price
- ----------
as of 12/31/94 $10.91 $ 9.49 $10.69 $ 9.61
</TABLE>

13
<PAGE> 17
<TABLE>
<CAPTION>
PIMCO AST
Total Scudder Berger
Return International Capital AA
Bond Bond Growth Growth
(1994) (1994) (1994) (1994)
------ ------ ------ ------
<S> <C> <C> <C> <C>
No. of Units
- ------------
as of 12/31/94 4,577,708 1,562,364 301,267 4,308,374

Unit Price
- ----------
as of 12/31/94 $9.61 $9.59 $9.94 $23.18
</TABLE>

The financial statements of the Sub-accounts being offered to you are found in
the Statement of Additional Information.

YIELDS ON MONEY MARKET SUB-ACCOUNT: Shown below are the current and
effective yields for a hypothetical contract. The yield is calculated based on
the performance of the WF Money Market Sub-account during the last seven days
of the calendar year ending prior to the date of this Prospectus. At the
beginning of the seven day period, the hypothetical contract had a balance of
one Unit. The current and effective yields reflect the recurring charges
against the Sub-account. Please note that current and effective yield
information will fluctuate. This information may not provide a basis for
comparisons with deposits in banks or other institutions which pay a fixed
yield over a stated period of time, or with investment companies which do not
serve as underlying funds for variable annuities.

<TABLE>
<CAPTION>
SUB-ACCOUNT CURRENT YIELD EFFECTIVE YIELD
----------- ------------- ---------------
<S> <C> <C>
WF Money Market 4.33% 4.42%
</TABLE>

INVESTMENT OPTIONS: We offer a range of variable and fixed options as ways to
invest your Account Value.

VARIABLE INVESTMENT OPTIONS: During the accumulation phase, we offer
a number of Sub-accounts as variable investment options. These are all Class 1
Sub-accounts of American Skandia Life Assurance Corporation Variable Account B
("Separate Account B"). Each of these Sub-accounts invests exclusively in one
underlying mutual fund portfolio of the LA Trust, the AST Trust or The Alger
American Fund. As of the date of this Prospectus, the Sub-accounts and the
portfolios in which they invest are as follows:

<TABLE>
<CAPTION>
Sub-account Underlying Mutual Fund Portfolio
----------- --------------------------------
<S> <C>
WF Asset Allocation Asset Allocation Fund
WF U.S. Government Allocation U.S. Government Allocation Fund
WF Growth and Income Growth and Income Fund
WF Money Market Money Market Fund
JanCap Growth JanCap Growth
T. Rowe Price International Equity T. Rowe Price International Equity
Founders Capital Appreciation Founders Capital Appreciation
INVESCO Equity Income INVESCO Equity Income
PIMCO Total Return Bond PIMCO Total Return Bond
PIMCO Limited Maturity Bond PIMCO Limited Maturity Bond
AST Scudder International Bond AST Scudder International Bond
Berger Capital Growth Berger Capital Growth
AA Growth Growth
</TABLE>

Certain Sub-accounts may not be available in all jurisdictions. If and when we
obtain approval of the applicable authorities to make such variable investment
options available, we will notify Owners of the availability of such
Sub-accounts.

We may make other underlying mutual funds available by creating new
Sub-accounts. Additionally, new portfolios may be made available by the
creation of new Sub-accounts from time to time. Such a new portfolio of an
underlying mutual fund may be disclosed in its prospectus. However, addition
of a portfolio does not require us to create a new Sub-account to invest in
that portfolio. We may take other actions in relation to the Sub-accounts
and/or Separate Account B (see "Modifications").

Each underlying mutual fund is registered under the Investment Company Act of
1940, as amended (the "1940 Act") as an open-end management investment company.
Each underlying mutual fund may or may not be diversified as defined in the
1940 Act. As of the date of

14
<PAGE> 18
this Prospectus, the portfolios in which Sub-accounts offered pursuant to this
Prospectus invest are those shown above. A summary of the investment
objectives and policies of such underlying mutual fund portfolios is found in
Appendix A. The trustees or directors, as applicable, of an underlying mutual
fund may add, eliminate or substitute portfolios from time to time. Generally,
each portfolio issues a separate class of shares. As of the date of this
Prospectus, shares of the underlying mutual fund portfolios are available only
to separate accounts of life insurance companies offering variable annuity and
variable life insurance products. However, the shares may be made available,
subject to obtaining all required regulatory approvals, for direct purchase by
various pension and retirement savings plans that qualify for preferential tax
treatment under the Code.

The investment objectives, policies, charges, operations, the attendant risks
and other details pertaining to each underlying mutual fund portfolio are
described in the prospectus of each underlying mutual fund and the statements
of additional information for such underlying mutual fund. Also included in
such information is the investment policy of each mutual fund or portfolio
regarding the acceptable ratings by recognized rating services for bonds and
other debt obligations. There can be no guarantee that any underlying mutual
fund or portfolio will meet its investment objectives.

Shares of the underlying mutual funds may be available to variable life
insurance and variable annuity separate accounts of other insurance companies.
Possible consequences of this multiple availability are discussed in the
subsection entitled Resolving Material Conflicts.

The prospectus for any underlying mutual fund or funds being considered by you
should be read in conjunction herewith. A copy of each prospectus may be
obtained without charge from us by calling 1-800-680-8920 or writing to us at
P.O. Box 883, Attention: Stagecoach Variable Annuity Administration, Shelton,
Connecticut, 06484-0883.

FIXED INVESTMENT OPTIONS: For the payout phase you may elect fixed
annuity payments based on our then current annuity rates. The discussion below
describes the fixed investment options in the accumulation phase.

As of the date of this Prospectus we offer in most jurisdictions in which the
Annuity is available Fixed Allocations with Guarantee Periods of 1, 2, 3, 5, 7
and 10 years. Each such Fixed Allocation is accounted for separately. Each
Fixed Allocation earns a fixed rate of interest throughout a set period of time
called a Guarantee Period. Multiple Fixed Allocations are permitted, subject
to our allocation rules. The duration of a Guarantee Period may be the same or
different from the duration of the Guarantee Periods of any of your prior Fixed
Allocations.

We may or may not be able to obtain approval in the future in certain
jurisdictions of endorsements to individual or group Annuities that include the
type of Fixed Allocations offered pursuant to this Prospectus. If such
approval is obtained, we will take those steps needed to make such Fixed
Allocations available to purchasers to whom Annuities were issued prior to the
date of such approval.

To the extent permitted by law, we reserve the right at any time to offer
Guarantee Periods with durations that differ from those which were available
when your Annuity was issued. We also reserve the right at any time to stop
accepting new allocations, transfers or renewals for a particular Guarantee
Period. Such an action may have an impact on the MVA (see "Account Value of
the Fixed Allocations").

A Guarantee Period for a Fixed Allocation begins: (a) when all or part of a
Net Purchase Payment is allocated for that particular Guarantee Period; (b)
upon transfer of any of your Account Value to a Fixed Allocation for that
particular Guarantee Period; or (c) when a Guarantee Period attributable to a
Fixed Allocation "renews" after its Maturity Date.

We declare the rates of interest applicable during the various Guarantee
Periods offered. Declared rates are effective annual rates of interest. The
rate of interest applicable to a Fixed Allocation is the one in effect when its
Guarantee Period begins. The rate is guaranteed throughout the Guarantee
Period. We inform you of the interest rate applicable to a Fixed Allocation,
as well as its Maturity Date, when we confirm the allocation. We declare
interest rates applicable to new Fixed Allocations from time-to-time. Any new
Fixed Allocation in an existing Annuity is credited interest at a rate not less
than the rate we are then crediting to Fixed Allocations for the same Guarantee
Period selected by new Annuity purchasers in the same class.

The interest rates we credit are subject to a minimum. We may declare a higher
rate. The minimum is based on both an INDEX and a REDUCTION to the interest
rate determined according to the index.

The INDEX is based on the published rate for certificates of indebtedness
(bills, notes or bonds, depending on the term of indebtedness) of the United
States Treasury at the most recent Treasury auction held at least 30 days prior
to the beginning of the applicable Fixed Allocation's

15
<PAGE> 19
Guarantee Period. The term (length of time from issuance to maturity) of the
certificates of indebtedness upon which the index is based is the same as the
duration of the Guarantee Period. If no certificates of indebtedness are
available for such term, the next shortest term is used. If the United States
Treasury's auction program is discontinued, we will substitute indexes which in
our opinion are comparable. If required, implementation of such substitute
indexes will be subject to approval by the Securities and Exchange Commission
and the Insurance Department of the jurisdiction in which your Annuity was
delivered. (For Annuities issued as certificates of participation in a group
contract, it is our expectation that approval of only the jurisdiction in which
such group contract was delivered applies.)

The REDUCTION used in determining the minimum interest rate is two and one
quarter percent of interest (2.25%).

Where required by the laws of a particular jurisdiction, a specific minimum
interest rate, compounded yearly, will apply should the index less the
reduction be less than the specific minimum interest rate applicable to that
jurisdiction.

WE MAY CHANGE THE INTEREST RATES WE CREDIT NEW FIXED ALLOCATIONS AT ANY TIME.
Any such change does not have an impact on the rates applicable to Fixed
Allocations with Guarantee Periods that began prior to such change. However,
such a change will affect the MVA (see "Account Value of the Fixed
Allocations").

We have no specific formula for determining the interest rates we declare.
Rates may differ between classes and between types of annuities we offer, even
for guarantees of the same duration starting at the same time. We expect our
interest rate declarations for Fixed Allocations to reflect the returns
available on the type of investments we make to support the various classes of
annuities supported by the assets in Separate Account D. However, we may also
take into consideration in determining rates such factors including, but not
limited to, the durations offered by the annuities supported by the assets in
Separate Account D, regulatory and tax requirements, the liquidity of the
secondary markets for the type of investments we make, commissions,
administrative expenses, investment expenses, our mortality and expense risks
in relation to Fixed Allocations, general economic trends and competition. OUR
MANAGEMENT MAKES THE FINAL DETERMINATION AS TO INTEREST RATES TO BE CREDITED.
WE CANNOT PREDICT THE RATES WE WILL DECLARE IN THE FUTURE.

OPERATIONS OF THE SEPARATE ACCOUNTS: The assets supporting our obligations
under the Annuities may be held in various accounts, depending on the
obligation being supported. In the accumulation phase, assets supporting
Account Values are held in separate accounts established under the laws of the
State of Connecticut. In the payout phase, assets supporting fixed annuity
payments and any adjustable annuity payments we make available are held in our
general account.

SEPARATE ACCOUNTS: We are the legal owner of assets in the separate
accounts. Income, gains and losses, whether or not realized, from assets
allocated to these separate accounts, are credited to or charged against each
such separate account in accordance with the terms of the annuities supported
by such assets without regard to our other income, gains or losses or to the
income, gains or losses in any other of our separate accounts. We will
maintain assets in each separate account with a total market value at least
equal to the reserve and other liabilities we must maintain in relation to the
annuity obligations supported by such assets. These assets may only be charged
with liabilities which arise from such annuities. This may include Annuities
offered pursuant to this Prospectus or certain other annuities we may offer.
The investments made by separate accounts are subject to the requirements of
applicable state laws. These investment requirements may differ between those
for separate accounts supporting variable obligations and those for separate
accounts supporting fixed obligations.

SEPARATE ACCOUNT B: In the accumulation phase, the assets supporting
obligations based on allocations to the variable investment options are held in
our Separate Account B. Separate Account B consists of multiple Sub-accounts.
Separate Account B was established by us pursuant to Connecticut law. Separate
Account B also holds assets of other annuities issued by us with values and
benefits that vary according to the investment performance of Separate Account
B.

The Sub-accounts offered pursuant to this Prospectus are all Class 1
Sub-accounts of Separate Account B. Each class of Sub-accounts in Separate
Account B has a different level of charges assessed against such Sub-accounts.

The amount of our obligations in relation to allocations to the Sub-accounts is
based on the investment performance of such Sub- accounts. However, the
obligations themselves are our general corporate obligations.

Separate Account B is registered with the SEC under the Investment Company Act
of 1940 (the "1940 Act") as a unit investment trust, which is a type of
investment company. This does not involve any supervision by the SEC of the
investment policies, management or practices of Separate Account B. Each
Sub-account invests only in a single mutual fund or mutual fund portfolio.

The only Sub-accounts available for allocation of your Account Value are those
offered pursuant to this Prospectus. Persons interested in our other annuities
may be offered the same or different Sub-accounts of Separate Account B or any
of our other separate accounts. Such sub-accounts may invest in some or all of
the same underlying mutual funds or portfolios of such underlying mutual funds
as the Sub-

16
<PAGE> 20
accounts offered pursuant to this Prospectus. As of the date of this
Prospectus, the Annuities offered pursuant to this Prospectus and annuities
offered pursuant to a number of other prospectuses maintained assets in Class 1
Sub-accounts. We may offer additional annuities that maintain assets in Class
1 Sub-accounts. In addition, some of the Class 1 Sub-accounts may invest in
underlying mutual funds or underlying mutual fund portfolios in which
Sub-accounts in other classes of Separate Account B invest.

You will find additional information about these underlying mutual funds and
portfolios in the prospectuses for such funds. Portfolios added to the
underlying mutual funds may or may not be offered through added Sub-accounts.

Sub-accounts are permitted to invest in underlying mutual funds or portfolios
that we consider suitable. We also reserve the right to add Sub-accounts,
eliminate Sub-accounts, to combine Sub-accounts, or to substitute underlying
mutual funds or portfolios of underlying mutual funds.

Values and benefits based on allocations to the Sub-accounts will vary with the
investment performance of the underlying mutual funds or fund portfolios, as
applicable. We do not guarantee the investment results of any Sub-account, nor
is there any assurance that the Account Value allocated to the Sub-accounts
will equal the amounts allocated to the Sub-accounts as of any time other than
the Valuation Period of such allocation. You bear the entire investment risk.

SEPARATE ACCOUNT D: In the accumulation phase, assets supporting our
obligations based on Fixed Allocations are held in Separate Account D, which is
a "non-unitized" separate account. Such obligations are based on the interest
rates we credit to Fixed Allocations and the terms of the Annuities. These
obligations do not depend on the investment performance of the assets in
Separate Account D. Separate Account D was established by us pursuant to
Connecticut law.

There are no discrete units in Separate Account D. No party with rights under
any annuity nor any group contract owner participates in the investment gain or
loss from assets belonging to Separate Account D. Such gain or loss accrues
solely to us. We retain the risk that the value of the assets in Separate
Account D may drop below the reserves and other liabilities we must maintain.
Should the value of the assets in Separate Account D drop below the reserve and
other liabilities we must maintain in relation to the annuities supported by
such assets, we will transfer assets from our general account to Separate
Account D to make up the difference. We have the right to transfer to our
general account any assets of Separate Account D in excess of such reserves and
other liabilities. We maintain assets in Separate Account D supporting a
number of annuities we offer.

The staff of the Securities and Exchange Commission have raised the issue of
whether the existence of a separate account supporting Fixed Allocations such
as Separate Account D, the assets of which are not chargeable with liabilities
arising out of any other business we conduct, is an investment company under
the 1940 Act. If it is determined that Separate Account D is an investment
company, it will be required to register and comply with the requirements of
the 1940 Act unless Separate Account D seeks and obtains an exemption from such
requirements. We have applied for an exemption without prejudice to our
position that Separate Account D is not an investment company and such
exemptive relief is not required. Such application for exemption may or may
not be granted.

If you surrender, withdraw or transfer Account Value from a Fixed Allocation
before the end of its Guarantee Period, you bear the risk inherent in the MVA
(see "Account Value of the Fixed Allocations"). The Account Value of a Fixed
Allocation is guaranteed on its Maturity Date (and, where required by law, 30
days prior to the Maturity Date) to be its then current Interim Value.

We operate Separate Account D in a fashion designed to meet the obligations
created by Fixed Allocations. Factors affecting these operations include the
following:

(1) The State of New York, which is one of the jurisdictions in
which we are licensed to do business, requires that we meet certain "matching"
requirements. These requirements address the matching of the durations of the
assets with the durations of obligations supported by such assets. We believe
these matching requirements are designed to control an insurer's ability to
risk investing in long-term assets to support short term interest rate
guarantees. We also believe this limitation controls an insurer's ability to
offer unrealistic rate guarantees.

(2) We employ an investment strategy designed to limit the risk of
default. Some of the guidelines of our current investment strategy for
Separate Account D include, but are not limited to the following:

(a) Investments may be made in cash; debt securities
issued by the United States Government or its agencies and instrumentalities;
money market instruments; short, intermediate and long-term corporate
obligations; asset-backed obligations; and municipal bonds.

17
<PAGE> 21
(b) At the time of purchase, fixed income securities will
be in one of the top four generic lettered rating classifications as
established by either Standard & Poor's or Moody's Investor Services, Inc.

We are not obligated to invest according to the aforementioned guidelines or
any other strategy except as may be required by Connecticut and other state
insurance laws.

(3) We have the sole discretion to employ investment managers that
we believe are qualified, experienced and reputable to manage Separate Account
D. Each manager is responsible for investment management of different portions
of Separate Account D. From time to time additional investment managers may be
employed or investment managers may cease being employed. We are under no
obligation to employ or continue to employ any investment manager(s).

(4) The assets in Separate Account D are accounted for at their
market value, rather than at book value.

(5) We are obligated by law to maintain our capital and surplus,
as well as our reserves, at the levels required by applicable state insurance
law and regulation.

INSURANCE ASPECTS OF THE ANNUITY: As an insurance company we bear the
insurance risk inherent in the Annuity. This includes the risks that mortality
and expenses exceed our expectations, and the investment and re-investment
risks in relation to the assets supporting obligations not based on the
investment performance of a separate account. We are subject to regulation
that requires reserving and other practices in a manner that minimizes the
insurance risk (see "Regulation").

CHARGES ASSESSED OR ASSESSABLE AGAINST THE ANNUITY: The Annuity charges which
are assessed or may be assessable under certain circumstances are the
contingent deferred sales charge, a charge for taxes and a transfer fee. These
charges are allocated according to our rules. The transfer charge is not
assessed if no Account Value is maintained in the Sub-accounts at the time such
charge is payable. However, we make certain assumptions regarding transfer
expenses as part of the overall expense assumptions used in determining the
interest rates we credit to Fixed Allocations. Charges are also assessed
against the Sub-accounts and the underlying mutual funds. We also may charge
you for special services, such as dollar cost averaging, rebalancing,
Systematic Withdrawals, Minimum Distributions, and additional reports. As of
the date of this Prospectus, we do not charge you for any special services.

CONTINGENT DEFERRED SALES CHARGE: Although we incur sales expenses in
connection with the sale of contracts (for example, preparation of sales
literature, expenses of selling and distributing the contracts, including
commissions, and other promotional costs), we do not deduct any charge from
your Purchase Payments for such expenses. However, a contingent deferred sales
charge may be assessed. We assess a contingent deferred sales charge against
the portion of any withdrawal or surrender that is deemed to be a liquidation
of your Purchase Payments paid within the preceding seven years. The
contingent deferred sales charge applies to each Purchase Payment that is
liquidated. It is a decreasing percentage of the Purchase Payment being
liquidated. The charge decreases as the Purchase Payment ages. The aging of a
Purchase Payment is measured from the date it is applied to your Account Value.
The charge is: year 1 -7.0%; year 2 - 7.0%; year 3 - 6.0%; year 4 - 5.0%; year
5 - 4.0%; year 6 - 3.0%; year 7 - 2.0%; year 8 and thereafter - 0%.

Each Annuity Year in the accumulation phase you may withdraw a limited amount
of Account Value without application of any contingent deferred sales charge
(see "Free Withdrawal"). However, for purposes of the contingent deferred
sales charge, amounts withdrawn as a free withdrawal are not considered as
liquidation of Purchase Payments. Account Value is deemed withdrawn according
to specific rules in determining how much, if any, contingent deferred sales
charge applies to a partial withdrawal (see "Partial Withdrawal"). There is no
contingent deferred sales charge if all Purchase Payments were received at
least 7 years prior to the date of either a full surrender or partial
withdrawal. Where permitted by law, any contingent deferred sales charge
applicable to a full surrender is waived if such full surrender qualifies under
our rules as a medically-related withdrawal (see "Medically-Related
Surrenders").

From time to time we may reduce the amount of the contingent deferred sales
charge, the period during which it applies, or both, when Annuities are sold to
individuals or a group of individuals in a manner that reduces sales expenses.
We would consider such factors as: (a) the size and type of group; (b) the
amount of Purchase Payments; (c) present Owners making additional Purchase
Payments; and/or (d) other transactions where sales expenses are likely to be
reduced.

No contingent deferred sales charge is imposed when any group annuity contract
or any Annuity issued pursuant to this Prospectus is owned on its Issue Date
by: (a) any parent company, affiliate or subsidiary of ours; (b) an officer,
director, employee, retiree, sales representative, or in the case of an
affiliated broker-dealer, registered representative of such company; (c) a
director or trustee of any underlying mutual fund; (d) a director, officer or
employee of any investment manager or sub-advisor providing investment
management and/or advisory services to an underlying mutual fund or any
affiliate of such investment managers sub- advisor; (e) a director, officer,
employee or registered representative of a broker-dealer that has a then
current selling agreement with American Skandia Marketing, Incorporated,
formerly Skandia Life Equity Sales Corporation; (f) the then current spouse of
any such person noted in (b) through (e), above; (g) parents

18
<PAGE> 22
of any such person noted in (b) through (f) above; and (h) such person's child
or other legal dependent under age of 21. No such group contract or Annuity is
eligible for any Additional Amount due to the size of Purchase Payments (see
"Breakpoints") or may qualify under any Exchange Program (see "Exchange
Contracts").

No contingent deferred sales charge is assessed on Minimum Distributions, to
the extent such Minimum Distributions are required from your Annuity at the
time it is taken. However, the charge may be assessed for any partial
withdrawal taken in excess of the Minimum Distribution, even if such amount is
taken to meet minimum distribution requirements in relation to other savings or
investments held pursuant to various retirement plans designed to qualify for
preferred tax treatment under various sections of the Code (see "Minimum
Distributions").

Any elimination of the contingent deferred sales charge or any reduction to the
amount or duration of such charges will not discriminate unfairly between
Annuity purchasers. We will not make any such changes to this charge where
prohibited by law.

Expenses incurred in connection with the sale of Annuities may exceed the
charges made for such purpose. We expect that the contingent deferred sales
charge will not be sufficient to cover the sales expenses. We expect to meet
any deficiency from any profit we may make on Annuities and from our surplus.
This may include proceeds from, among others, the mortality and expense risk
charges assessed against the Sub-accounts.

TAX CHARGES: In several states a tax is payable. We will deduct the
amount of tax payable, if any, from your Purchase Payments if the tax is then
incurred or from your Account Value when applied under an annuity option if the
tax is incurred at that time. The amount of the tax varies from jurisdiction
to jurisdiction. It may also vary depending on whether the Annuity qualifies
for certain treatment under the Code. In each jurisdiction, the state
legislature may change the amount of any current tax, may decide to impose the
tax, eliminate it, or change the time it becomes payable. In those
jurisdictions imposing such a tax, the tax rates currently in effect range up
to 3 1/2%. In addition to state taxes, local taxes may also apply. The
amounts of these taxes may exceed those for state taxes.

TRANSFER FEE: We charge $10.00 for each transfer after the twelfth in
each Annuity Year. However, the fee is only charged if there is Account Value
in at least one Sub-account immediately subsequent to such transfer.

ALLOCATION OF ANNUITY CHARGES: Charges applicable to a surrender are
used in calculating Surrender Value. Charges applicable to any type of
withdrawal are taken from the investment options in the same ratio as such a
withdrawal is taken from the investment options (see "Allocation Rules"). The
transfer fee is assessed against the Sub-accounts in which you maintain Account
Value immediately subsequent to such transfer. The transfer fee is allocated
on a pro-rata basis in relation to the Account Values in such Sub-accounts as
of the Valuation Period for which we price the applicable transfer. No fee is
assessed if there is no Account Value in any Sub-account at such time. Tax
charges are assessed against the entire Purchase Payment or Account Value as
applicable.

CHARGES ASSESSED AGAINST THE ASSETS: There are charges assessed against assets
in the Sub-accounts. These charges are described below. There are no charges
deducted from the Fixed Allocations. The factors we use in determining the
interest rates we credit Fixed Allocations are described above in the
subsection entitled "Fixed Investment Options". No charges are deducted from
assets supporting fixed or adjustable annuity payments. The factors we use in
determining fixed or adjustable annuity payments include, but are not limited
to, our expected investment returns, costs, risks and profit targets. We
reserve the right to assess a charge against the Sub-accounts and the Fixed
Allocations equal to any taxes which may be imposed upon the separate accounts.

ADMINISTRATION CHARGE: We assess each Class 1 Sub-account, on a daily
basis, an administration charge. The charge is 0.15% per year of the average
daily total value of such Sub-account.

We assess the administration charge at amounts we believe necessary to recover
the actual costs of administering the Account Values allocated to the Class 1
Sub-accounts and Separate Account B itself. The administration charge can be
increased only for Annuities issued subsequent to the effective date of any
such change.

A relationship does not necessarily exist between the portion of the
administration charge attributable to a particular Annuity and the expenses
attributable to that Annuity. However, we believe the total administration
charges made against the Class 1 Sub- accounts will not be greater than the
total anticipated costs. We allocate costs pro-rata between classes in
Separate Account B in proportion to the assets in various classes. Types of
expenses which might be incurred include, but are not necessarily limited to,
the expenses of: developing and maintaining a computer support system for
administering the Account Values in the Sub-accounts and Separate Account B
itself, preparing and delivering confirmations and quarterly statements,
processing transfers, withdrawal and surrender requests, responding to Owner
inquiries, reconciling and depositing cash receipts, calculating and monitoring
daily values of each Sub-account, reporting for the Sub-accounts, including
quarterly, semi-annual and annual reports, and mailing and tabulation of
shareholder proxy solicitations.

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<PAGE> 23
From time to time we may reduce the amount of the administration charge. We
may do so when Annuities are sold to individuals or a group of individuals in a
manner that reduces administrative expenses. We would consider such factors
as: (a) the size and type of group; (b) the number of Annuities purchased by an
Owner; (c) the amount of Purchase Payments; and/or (d) other transactions where
administration expenses are likely to be reduced.

Any elimination of the administration charge or any reduction of such charge
will not discriminate unfairly between Annuity purchasers. We will not make
any changes to these charges where prohibited by law.

MORTALITY AND EXPENSE RISK CHARGES: For Class 1 Sub-accounts, the
mortality risk charge is 0.90% per year and the expense risk charge is 0.35%
per year. These charges are assessed in combination each day against each
Sub-account at the rate of 1.25% per year of the average daily total value of
each Sub-account.

With respect to the mortality risk charge, we assume the risk that the
mortality experience under the Annuities may be less favorable than our
assumptions. This could arise for a number of reasons, such as when persons
upon whose lives annuity payments are based live longer than we anticipated, or
when the Sub-accounts decline in value resulting in losses in paying death
benefits. If our mortality assumptions prove to be inadequate, we will absorb
any resulting loss. Conversely, if the actual experience is more favorable
than our assumptions, then we will benefit from the gain. We also assume the
risk that the administration charge may be insufficient to cover our actual
administration costs. If we realize a profit from the mortality and expense
risk charges, such profit may be used to recover sales expenses incurred which
may not be recovered by the contingent deferred sales charge.

CHARGES OF THE UNDERLYING MUTUAL FUNDS: Each underlying mutual fund assesses
various charges for investment management and investment advisory fees. These
charges generally differ between portfolios within the same underlying mutual
fund. You will find additional details in each fund prospectus and its
statement of additional information.

PURCHASING ANNUITIES: You may purchase an Annuity for various purposes. You
must meet our requirements before we issue an Annuity and it takes effect.
Certain benefits are available to certain classes of purchasers, including, but
not limited to, those who submit Purchase Payments above specified breakpoint
levels and those who are exchanging a contract issued by another insurer for an
Annuity. You have a "free-look" period during which you may return your
Annuity for a refund amount which may be less or more than your Purchase
Payment, except in specific circumstances.

USES OF THE ANNUITY: The Annuity may be issued in connection with or
purchased as a funding vehicle for certain retirement plans which meet the
requirements of various sections of the Code, including Sections 401
(corporate, association, or self-employed individuals' retirement plans),
Section 403(b) (tax-sheltered annuities available to employees of certain
qualifying employers) and Section 408 (individual retirement accounts and
individual retirement annuities - "IRAs"; Simplified Employee Pensions). We
may require additional information regarding such plans before we issue an
Annuity to be used in connection with such retirement plans. We may also
restrict or change certain rights and benefits, if in our opinion, such
restrictions or changes are necessary for your Annuity to be used in connection
with such retirement plans. The Annuity may also be used in connection with
plans that do not qualify under the sections of the Code noted above. Some of
the potential tax consequences resulting from various uses of the Annuities are
discussed in the section entitled "CERTAIN TAX CONSIDERATIONS".

APPLICATION AND INITIAL PAYMENT: You must meet our underwriting
requirements and forward a Purchase Payment if you seek to purchase an Annuity.
These requirements may include a properly completed Application. Where
permitted by law we may issue an Annuity without completion of an Application
for certain classes of Annuities.

The minimum initial Purchase Payment we accept is $10,000 if the Annuity is not
to be used in connection with a plan designed to qualify for special treatment
under the Code (see "Certain Tax Considerations") or unless you authorize the
use of bank drafting to make Purchase Payments (see "Bank Drafting"). The
minimum is $2,000 if the Annuity is purchased in connection with a plan which
is designed to so qualify unless you authorize the use of bank drafting to make
additional Purchase Payments. If you choose bank drafting, we may accept a
lower initial Purchase Payment provided that the Purchase Payments received in
the first year total at least $10,000. The initial Purchase Payment must be
paid by check or by wire transfer. It cannot be made through bank drafting.
Our Office must give you prior approval before we accept a Purchase Payment
that would result in the Account Value of all annuities you maintain with us
exceeding $500,000. We confirm each Purchase Payment in writing. Multiple
annuities purchased from us within the same calendar year may be treated for
tax purposes as if they were a single annuity (see "Certain Tax
Considerations").

We reserve the right to allocate your initial Net Purchase Payment to the
investment options up to two business days after we receive, at our Office, all
of our requirements for issuing the Annuity as applied for. We may retain the
Purchase Payment and not allocate the initial Net Purchase Payment to the
investment options for up to five business days while we attempt to obtain all
such requirements. We will try to reach you or any other party from whom we
need any information or materials. If the requirements cannot be fulfilled
within that time, we

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<PAGE> 24
will (a) attempt to inform you of the delay, and (b) return the amount of the
Purchase Payment, unless you specifically consent to our retaining it until all
our requirements are met. Once our requirements are met, the initial Net
Purchase Payment is applied to the investment options within two business days.
Once we accept your Purchase Payment and our requirements are met, we issue an
Annuity.

BREAKPOINTS: Wherever allowed by law, we reserve the right to credit
certain additional amounts ("Additional Amounts") to your Annuity if you submit
large initial or subsequent Purchase Payments. Such Additional Amounts are
credited by us on your behalf with funds from our general account. As of the
date of this Prospectus, we were making such a program available. However, we
reserve the right to modify, suspend or terminate it at any time, or from time
to time, without notice.

The current breakpoints for qualifying for Additional Amounts are shown below.
Also shown is the value of such Additional Amounts as a percentage of your
Purchase Payment. The percentage also depends on the age of the oldest of any
Owner or the Annuitant on the date we receive the applicable Purchase Payment
at our Office.

<TABLE>
<CAPTION>
AGE OF THE OLDEST OF ANY OWNER OR THE
ANNUITANT WHEN WE RECEIVE THE APPLICABLE ADDITIONAL AMOUNT AS A PERCENTAGE
TOTAL PURCHASE PAYMENTS RECEIVED PURCHASE PAYMENT AT OUR OFFICE OF THE PURCHASE PAYMENT
-------------------------------- ------------------------------ -----------------------
<S> <C> <C>
At least $1,000,000.00 but
less than $5,000,000.00 Less than Age 75 3.00%

At least $1,000,000.00 but Age 75
less than $5,000,000.00 and older 1.50%

$5,000,000.00 or more Less than Age 75 3.75%

$5,000,000.00 or more Age 75
and older 2.00%
</TABLE>

However, the value of any Additional Amounts combined with any Exchange Credits
due under any exchange program we offer may not exceed the specified maximum
percentage under such exchange program (see "Exchange Contracts").

Additional Amounts are added at the same time the qualifying Net Purchase
Payment is allocated to the investment options, and are allocated to the
investment options in the same manner as such qualifying Net Purchase Payment.
Should you exercise your right to return the Annuity, the then current value of
any Additional Amount as of the date your Annuity is canceled will be deducted
from your Account Value prior to determining the amount to be returned to you.
We do not consider Additional Amounts to be "investment in the contract" for
income tax purposes (see "Certain Tax Considerations"). Additional Amounts
credited are not included in any amounts you may withdraw without assessment of
the contingent deferred sales charge (see "Contingent Deferred Sales Charge").

Generally, the breakpoints apply separately to each Purchase Payment. However,
we will apply the breakpoints cumulatively if you provide us In Writing
evidence satisfactory to us that you will submit additional Purchase Payments
within a 13 month period. We require an initial Purchase Payment of at least
$500,000.00 before we agree to such a program if it is designed to provide a
total of at least $1,000,000.00 of Purchase Payments over 13 months. We
require an initial Purchase Payment of at least $2,500,000.00 before we agree
to such a program if it is designed to provide a total of at least
$5,000,000.00 over 13 months.

We retain the right to recover an amount from your Annuity if such additional
Purchase Payments are not received. The amount we may recover is the greater
of the value of the Additional Amounts when applied or a percentage of your
Account Value as of the date of such recovery. The percentage equals the ratio
between the Additional Amounts and the Purchase Payments received. Amounts
recovered will be taken pro-rata from the investment options based on the
Account Values in the investment options as of the date of the recovery. If
the amount of the recovery exceeds your then current Surrender Value, we will
recover all remaining Account Value and terminate your Annuity.

FAILURE TO INFORM US IN WRITING AT OR PRIOR TO THE TIME OF THE INITIAL PURCHASE
PAYMENT THAT YOU INTEND TO SUBMIT A PAIR OR SERIES OF LARGE PURCHASE PAYMENTS
WITHIN A 6 MONTH PERIOD MAY RESULT IN YOUR ANNUITY BEING CREDITED NO ADDITIONAL
AMOUNTS OR FEWER ADDITIONAL AMOUNTS THAN WOULD OTHERWISE BE CREDITED TO YOU.

EXCHANGE CONTRACTS: We reserve the right to offer an exchange program
(the "Exchange Program") available only to purchasers who exchange an existing
contract issued by another insurance company not affiliated with us (an
"Exchange Contract") for an Annuity or who add, under certain qualified plans,
to an existing Annuity by exchanging an Exchange Contract. As of the date of
this Prospectus,

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<PAGE> 25
where allowed by law, we were making such a program available. However, we
reserve the right to modify, suspend, or terminate it at any time or from time
to time without notice. If such an Exchange Program is in effect, it will
apply to all such exchanges for an Annuity.

Such a program would be available only where permitted by law to owners of
insurance or annuity contracts deemed not to constitute "securities" issued by
an investment company. Therefore, while a currently owned variable annuity or
variable life insurance policy may be exchanged for an Annuity pursuant to
Section 1035 of the Code, or where applicable, may qualify for a "rollover" or
transfer to an Annuity pursuant to certain other sections of the Code, such an
exchange, "rollover" or transfer of such a currently owned variable annuity or
variable life insurance policy subject to the 1940 Act will not qualify for any
Exchange Program being offered in relation to Annuities offered pursuant to
this Prospectus. You should carefully evaluate whether any particular Exchange
Program we offer benefits you more than if you continue to hold your Exchange
Contract. Factors to consider include, but are not limited to: (a) the
amount, if any, of the surrender charges under your Exchange Contract, which
you should ascertain from your insurance company; (b) the time remaining under
your Exchange Contract during which surrender charges apply; (c) the on-going
charges, if any, under your Exchange Contract versus the on-going charges under
an Annuity; (d) the contingent deferred sales charge under an Annuity; (e) the
amount and timing of any benefits under such an Exchange Program; and (f) the
potentially greater cost to you if the contingent deferred sales charge on an
Annuity or the surrender charge on your Exchange Contract exceeds the benefits
under such an Exchange Program. There could be adverse federal income tax
consequences. You should consult with your tax advisor as to the tax
consequences of such an exchange (see "Tax Free Exchanges").

Under the Exchange Program available as of the date of this Prospectus we add
certain amounts to your Account Value as exchange credits ("Exchange Credits").
Such Exchange Credits are credited by us on behalf of the Owners of Exchange
Contracts with funds from our general account. Subject to a specified limit
(the "Exchange Credit Limit") discussed below, the Exchange Credits equal the
surrender charge paid, if any, to the other insurance company plus the
difference, if any, between the "annuity value" and the "surrender value"
attributable to a difference in interest rates that have been or would be
credited to such values in annuities typically referred to as "two tier"
annuities. Both such amounts hereafter are referred to as a "surrender
charge". Determination of whether an Exchange Contract is a "two tier" annuity
qualifying for Exchange Credits is in our sole discretion. A "two-tier"
annuity is generally credited higher interest rates if there are no or limited
withdrawals before annuitization, and a lower interest rate would apply upon
surrender and most withdrawals.

Exchange Credits are not included in any amounts returned to you during the
"free-look" period described below.

This Exchange Program is subject to the following rules:

(1) We do not add Exchange Credits unless we receive In Writing
evidence satisfactory to us:

(a) of the surrender charge, if any, you paid to
surrender the Exchange Contract and the amount of any such charge (you may have
particular difficulty in obtaining satisfactory evidence of any surrender
charge paid to surrender an Exchange Contract typically referred to as a "two
tier" annuity); and

(b) that you acknowledge that you are aware that the
contingent deferred sales charge under this Annuity will be assessed in full
against any subsequent surrender or partial withdrawal to the extent then
applicable.

(2) The ratio of the Exchange Credits to be added to any Fixed
Allocation is the ratio between such Fixed Allocation and the Purchase Payment
that qualifies for this Exchange Credit on the date we allocate the Purchase
Payment. Exchange Credits not added to Fixed Allocations, if any, are
allocated pro-rata among the Sub-accounts based on your Account Values in such
Sub-accounts at the time we allocate the Exchange Credits.

(3) The Exchange Credit is allocated as of the later of (a), (b)
or (c); where

(a) is the date the applicable Purchase Payment is
allocated to the investment options;

(b) is 30 days after the Issue Date; and

(c) is the date we receive, In Writing, evidence
satisfactory to us of the amount of the surrender charge you paid to surrender
the Exchange Contract.

For the fixed investment options, interest on the Exchange Credits is credited
as of the later of (a) or (b), where:

(a) is the date the applicable Purchase Payment was allocated; and

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<PAGE> 26
(b) is the date we receive, In Writing, evidence
satisfactory to us of the amount of the surrender charge you paid to surrender
the Exchange Contract, if more than 30 days after the Issue Date.

(4) The value of the Exchange Credits as of the date of the
allocation to the investment options equals the lesser of the Exchange Credit
Limit or the surrender charge you paid to surrender the Exchange Contract. The
Exchange Credit Limit is a percentage of the net amount payable upon surrender
of the Exchange Contract. The Exchange Credit Limit depends on: (a) the age
of the oldest of any Owner or the Annuitant on the date we receive the
applicable Purchase Payment at our Office; and (b) the amount of proceeds we
receive upon surrender of the Exchange Contract ("Exchange Proceeds"). The
current limits are as follows:

<TABLE>
<CAPTION>
Age of the oldest of any Owner or the
Annuitant when we receive the Exchange Exchange Credit Limit
applicable Purchase Payment at our Office Proceeds for all other uses
- ----------------------------------------- -------- ------------------
<S> <C> <C>
Under 75 $10,000 or more 5.50%
Under 75 $5,000 to $9,999.99 2.70%
Under 75 Under $5,000 1.80%
75 or over Under $5,000 0.00%
75 or over $5,000 to $9,999.99 0.00%
75 or over $10,000 or more 2.75%
</TABLE>

The Exchange Credit Limit is not based on any other Purchase Payment. We
reserve the right at any time and from time to time to increase or decrease the
Exchange Credit Limit. However, the Exchange Credit Limit in effect at any
time will apply to all purchases qualifying for the Exchange Program.

(5) The value of any Exchange Credits is not considered "growth"
for purposes of determining amounts available as a free withdrawal (see "Free
Withdrawal").

(6) We do not consider additional amounts credited to Account
Value under the Exchange Program to be an increase in your "investment in the
contract" (see "Certain Tax Considerations").

BANK DRAFTING: You may make Purchase Payments to your Annuity using
bank drafting, but only for allocations to variable investment options.
However, you must pay at least one prior Purchase Payment by check or wire
transfer. We may accept an initial Purchase Payment lower than our standard
minimum Purchase Payment requirement of $10,000 if you also furnish bank
drafting instructions that provide amounts that will meet a $10,000 minimum
Purchase Payment requirement to be paid within 12 months. For Annuities
designed to qualify for special tax treatment under the Code, we may accept an
initial Purchase Payment lower than our standard minimum Purchase Payment
requirement of $10,000 if you also furnish bank drafting instructions that
provide amounts that will meet a $2,000 minimum Purchase Payment requirement to
be paid within 12 months. We may accept Purchase Payments in an amount as low
as $100, but it must be accompanied by a bank drafting authorization form
allowing monthly Purchase Payments of at least $75.

RIGHT TO RETURN THE ANNUITY: You have the right to return the Annuity
within twenty-one days of receipt or longer where required by law. The period
in which you can take this action is known as a "free-look" period. To
exercise your right to return the Annuity during the "free-look" period, you
must return the Annuity. The amount to be refunded is the then current Account
Value plus any tax charge deducted and less any Additional Amounts added due to
premium size (see "Breakpoints"). This is the "standard refund". If necessary
to meet Federal requirements for IRAs or certain state law requirements, we
return the greater of the "standard refund" or the Purchase Payments received
less any withdrawals (see "Allocation of Net Purchase Payments"). For
Annuities subject to California law, owners who are age 60 or older (or
annuitants if the annuity is owned by a non-natural person) may return the
Annuity within thirty days of receipt. The amount refunded is the standard
refund. We tell you how we determine the amount payable under any such right
at the time we issue your Annuity. Upon the termination of the "free-look"
period, if you surrender your Annuity, you may be assessed certain charges (see
"Charges Assessed or Assessable Against the Annuity").

ALLOCATION OF NET PURCHASE PAYMENTS: All allocations of Net Purchase
Payments are subject to our allocation rules (see "Allocation Rules").
Allocation of the portion of the initial Purchase Payment and any Net Purchase
Payments received during the "free-look" period that you wish to allocate to
any Sub-accounts are subject to an additional allocation rule if state law
requires return of at least your Purchase Payments should you return the
Annuity under such "free-look" provision. If such state law applies to your
Annuity: (a) we allocate any portion of any such Net Purchase Payments that
you indicate you wish to go into the Sub- accounts to the WF Money Market
Sub-account; and (b) at the end of such "free-look" period we reallocate
Account Value according to your then most recent allocation instructions to us,
subject to our allocation rules. However, where permitted by law in such
jurisdictions, we will allocate such Net Purchase Payments according to your
instructions, without any temporary allocation to the WF Money Market
Sub-account, if you execute a return

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<PAGE> 27
waiver ("Return Waiver"). Under the Return Waiver, you waive your right to the
return of the greater of the "standard refund" or the Purchase Payments
received less any withdrawals. Instead, you only are entitled to the return of
the "standard refund" (see "Right to Return the Annuity").

Your initial Purchase Payments, as well as other Purchase Payments will be
allocated in accordance with the then current requirements of any rebalancing,
asset allocation or market timing program which you have authorized or have
authorized an independent third party to use in connection with your Annuity
(see "Allocation Rules").

BALANCED INVESTMENT PROGRAM: We offer a balanced investment program
in relation to your Purchase Payment if Fixed Allocations are available under
your Annuity. If you choose this program, we commit a portion of your Net
Purchase Payment as a Fixed Allocation for the Guarantee Period you select.
This Fixed Allocation will have grown pre-tax to equal the exact amount of your
entire Purchase Payment at the end of its initial Guarantee Period, if no
amounts are transferred or withdrawn from such Fixed Allocation. The rest of
your Net Purchase Payment is invested in the other investment options you
select.

OWNERSHIP, ANNUITANT AND BENEFICIARY DESIGNATIONS: You make certain
designations that apply to the Annuity if issued. These designations are
subject to our rules and to various regulatory or statutory requirements
depending on the use of the Annuity. These designations include an Owner (if
the Annuity is issued as a certificate representing interest in a group annuity
contract, the designation will be for a participant), a contingent Owner, an
Annuitant, a Contingent Annuitant, a Beneficiary, and a contingent Beneficiary.
Certain designations are required, as indicated below. Such designations will
be revocable unless you indicate otherwise or we endorse your Annuity to
indicate that such designation is irrevocable to meet certain regulatory or
statutory requirements. Changing the Owner or Annuitant designations may
affect the minimum death benefit (see "Death Benefits").

Some of the tax implications of various designations are discussed in the
section entitled CERTAIN TAX CONSIDERATIONS. However, there are other tax
issues than those addressed in that section, including, but not limited to,
estate and inheritance tax issues. You should consult with a competent tax
counselor regarding the tax implications of various designations. You should
also consult with a competent legal advisor as to the implications of certain
designations in relation to an estate, bankruptcy, community property, where
applicable, and other matters.

An Owner must be named. You may name more than one Owner. If you do, all
rights reserved to Owners are then held jointly. We require the consent In
Writing of all joint Owners for any transaction for which we require the
written consent of Owners. Where required by law, we require the consent In
Writing of the spouse of any person with a vested interest in an Annuity.
Naming someone other than the payor of any Purchase Payment as Owner may have
gift, estate or other tax implications.

Where allowed by law, you may name a contingent Owner. However, this
designation takes effect only on or after the Annuity Date.

You must name an Annuitant. We do not accept a designation of joint
Annuitants. You may name one or more Contingent Annuitants. There may be
adverse tax consequences if a Contingent Annuitant succeeds an Annuitant and
the Annuity is owned by a trust that is neither tax exempt nor does not qualify
for preferred treatment under certain sections of the Code, such as Section 401
(a "non- qualified" trust). In general, the Code is designed to prevent the
benefit of tax deferral from continuing for long periods of time on an
indefinite basis. Continuing the benefit of tax deferral by naming one or more
Contingent Annuitants when the Annuity is owned by a non-qualified trust might
be deemed an attempt to extend the tax deferral for an indefinite period.
Therefore, adverse tax treatment may depend on the terms of the trust, who is
named as Contingent Annuitant, as well as the particular facts and
circumstances. You should consult your tax advisor before naming a Contingent
Annuitant if you expect to use an Annuity in such a fashion. Where allowed by
law, you must name Contingent Annuitants according to our rules when an Annuity
is used as a funding vehicle for certain retirement plans designed to meet the
requirements of Section 401 of the Code.

You may name more than one primary and more than one contingent Beneficiary and
if you do, the proceeds will be paid in equal shares to the survivors in the
appropriate beneficiary class, unless you have requested otherwise In Writing.
If the primary Beneficiary dies before death proceeds become payable, the
proceeds will become payable to the contingent Beneficiary. If no Beneficiary
is alive when death proceeds become payable or in the absence of any
Beneficiary designation, the proceeds will vest in you or your estate.

ACCOUNT VALUE AND SURRENDER VALUE: In the accumulation phase your Annuity has
an Account Value. Your total Account Value is the sum of your Account Value in
each investment option. Surrender Value is the Account Value less any
applicable contingent deferred sales charge.

ACCOUNT VALUE IN THE SUB-ACCOUNTS: We determine your Account Value
separately for each Sub-account. To determine the Account Value in each
Sub-account we multiply the Unit Price as of the Valuation Period for which the
calculation is being made times the

24
<PAGE> 28
number of Units attributable to you in that Sub-account as of that Valuation
Period. The method we use to determine Unit Prices is shown in the Statement
of Additional Information.

The number of Units attributable to you in a Sub-account is the number of Units
you purchased less the number transferred or withdrawn. We determine the
number of Units involved in any transaction specified in dollars by dividing
the dollar value of the transaction by the Unit Price of the effected
Sub-account as of the Valuation Period applicable to such transaction.

ACCOUNT VALUE OF THE FIXED ALLOCATIONS: We determine the Account
Value of each Fixed Allocation separately. A Fixed Allocation's Account Value
as of a particular date is determined by multiplying its then current Interim
Value times the MVA.

A formula is used to determine the MVA. The formula is applied separately to
each Fixed Allocation. Values and time durations used in the formula are as of
the date for which the Account Value is being determined. The formula is:

[ (1+I) / (1+J+0.0010)] (N/12)

where:

I is the interest rate being credited to the Fixed Allocation;

J is the interest rate (for your class of annuities) being
credited to new Fixed Allocations with Guarantee Period
durations equal to the number of years (rounded to the next
higher integer when occurring on other than an anniversary of
the beginning of the Fixed Allocation's Guarantee Period)
remaining in your Fixed Allocation Guarantee Period;

N is the number of months (rounded to the next higher integer
when occurring on other than a monthly anniversary of the
beginning of the Guarantee Period) remaining in such Guarantee
Period.

No MVA applies in determining a Fixed Allocation's Account Value on its
Maturity Date, and, where required by law, the 30 days prior to the Maturity
Date. If we are not offering a Guarantee Period with a duration equal to the
number of years remaining in a Fixed Allocation's Guarantee Period, we
calculate a rate for "J" above using a specific formula. This formula is
described in the Statement of Additional Information.

Our Current Rates are expected to be sensitive to interest rate fluctuations,
thereby making each MVA equally sensitive to such changes. There would be a
downward adjustment when the applicable Current Rate plus 0.10 percent of
interest exceeds the rate credited to the Fixed Allocation and an upward
adjustment when the applicable Current Rate is more than 0.10 percent of
interest lower than the rate being credited to the Fixed Allocation. See the
Statement of Additional Information for an illustration of how the MVA works.

We reserve the right, from time to time, to determine the MVA using an interest
rate lower than the Current Rate for all transactions applicable to a class of
Annuities. We may do so at our sole discretion. This would benefit all such
Annuities if transactions to which the MVA applies occur while we use such
lower interest rate.

ADDITIONAL AMOUNTS IN THE FIXED ALLOCATIONS: To the extent permitted
by law, we reserve the right, from time to time, to credit Additional Amounts
to Fixed Allocations. We may do so at our sole discretion. We may offer to
credit such Additional Amounts only in relation to Fixed Allocations of
specific durations (i.e. 7 or 10 years) when used as part of certain programs
we offer such as the balanced investment program and dollar cost averaging (see
"Balanced Investment Program" and "Dollar Cost Averaging"). We would provide
such Additional Amounts with funds from our general account and credit them to
the applicable Fixed Allocation. Such a program is subject to the following
rules:

(1) The Additional Amounts are credited in relation to initial or
additional Purchase Payments, not to Account Value transferred to a Fixed
Allocation for use in the applicable programs. The Additional Amounts are not
credited in relation to any exchange of another annuity issued by us for an
Annuity.

(2) The Additional Amounts are credited as of the later of the
date the applicable Purchase Payment is allocated to the applicable Fixed
Allocation or the 30th day after the Issue Date.

(3) Interest on the Additional Amounts is credited as of the date
the applicable Purchase Payment is allocated to the applicable Fixed
Allocation.

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(4) The Additional Amounts are a percentage of the amount credited
to the applicable Fixed Allocation. However, we may change the percentage from
time to time.

(5) There is an increase to any applicable "adjustment amount" in
the MVA formula, which otherwise is 0.0010, to 0.0020 (see "Account Value of
the Fixed Allocations"). This change would only apply to a transfer, surrender
or withdrawal from the applicable Fixed Allocation, but not to any payments of
death benefit proceeds or a medically-related surrender (see "Medically-
Related Surrender"). This change could reduce your Account Value.

(6) We do not consider Additional Amounts to be "investment in the
contract" for income tax purposes (see "Certain Tax Considerations").

(7) Additional Amounts credited are not included in any amounts
you may withdraw without assessment of the contingent deferred sales charge
pursuant to the Free Withdrawal provision (see "Free Withdrawals").

(8) We determine if a Purchase Payment is received during the
period we are offering such credits based on the earlier of: (a) the date we
receive at our Office the applicable Purchase Payment; or (b) the date we
receive at our Office our requirements in relation to either an exchange of an
existing annuity issued by another insurer or a "rollover" or transfer of such
an annuity pursuant to specific sections of the Code.

(9) No Purchase Payment may be applied to more than one program
crediting Additional Amounts solely to a Fixed Allocation.

(10) We reserve the right to reduce the Additional Amount, when the
Additional Amount combined with amounts we credit under various other programs
we may offer, such as the Exchange Program, exceed the Exchange Credit Limit
(see "Exchange Contracts").

RIGHTS, BENEFITS AND SERVICES: The Annuity provides various rights, benefits
and services subsequent to its issuance and your decision to keep it beyond the
free-look period. A number of these rights, benefits and services, as well as
some of the rules and conditions to which they are subject, are described
below. These rights, benefits and services include, but are not limited to:
(a) making additional Purchase Payments; (b) changing revocable designations;
(c) transferring Account Values between investment options; (d) receiving lump
sum payments, Systematic Withdrawals or Minimum Distributions, annuity payments
and death benefits; (e) transferring or assigning your Annuity; (f) exercising
certain voting rights in relation to the underlying mutual funds in which the
Sub-accounts invest; and (g) receiving reports. These rights, benefits and
services may be limited, eliminated or altered when an Annuity is purchased in
conjunction with a qualified plan. We may require presentation of proper
identification, including a personal identification number ("PIN") issued by
us, prior to accepting any instruction by telephone. To the extent permitted
by law or regulation, neither we or any person authorized by us will be
responsible for any claim, loss, liability or expense in connection with a
telephone transfer if we or such other person acted on telephone transfer
instructions in good faith in reliance on your telephone transfer authorization
and on reasonable procedures to identify persons so authorized through
verification methods which may include a request for your Social Security
number or a personal identification number (PIN) as issued by us. We may be
liable for losses due to unauthorized or fraudulent instructions should we not
follow such reasonable procedures.

ADDITIONAL PURCHASE PAYMENTS: The minimum for any additional Purchase
Payment is $100 except as part of a bank drafting program (see "Bank
Drafting"), or less where required by law. Additional Purchase Payments may be
paid at any time before the Annuity Date. Subject to our allocation rules, we
allocate additional Net Purchase Payments according to your instructions.
Should no instructions be received, we shall return your additional Purchase
Payment.

CHANGING REVOCABLE DESIGNATIONS: Unless you indicated that a prior
choice was irrevocable or your Annuity has been endorsed to limit certain
changes, you may request to change Owner, Annuitant and Beneficiary
designations by sending a request In Writing. Where allowed by law, such
changes will be subject to our acceptance. Some of the changes we will not
accept include, but are not limited to: (a) a new Owner subsequent to the
death of the Owner or the first of any joint Owners to die, except where a
spouse-Beneficiary has become the Owner as a result of an Owner's death; (b) a
new Annuitant subsequent to the Annuity Date if the annuity option selected
includes a life contingency; and (c) a new Annuitant prior to the Annuity Date
if the Annuity is owned by an entity.

ALLOCATION RULES: In the accumulation phase, you may maintain Account
Value in up to 10 Sub-accounts. You may also maintain an unlimited number of
Fixed Allocations. Should you request a transaction that would leave less than
any minimum amount we then require in an investment option, we reserve the
right, to the extent permitted by law, to add the balance of your Account Value
in the applicable Sub-account or Fixed Allocation to the transaction and close
out your balance in that investment option.

Should you either: (a) request rebalancing services (see "Rebalancing"); (b)
authorize an independent third party to transact transfers on your behalf and
such third party arranges for rebalancing of any portion of your Account Value
in accordance with any asset allocation

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strategy; or (c) authorize an independent third party to transact transfers in
accordance with a market timing strategy; then all Purchase Payments, including
the initial Purchase Payment, received while your Annuity is subject to such an
arrangement are allocated to the same investment options and in the same
proportions as then required pursuant to the applicable rebalancing, asset
allocation or market timing program, unless we have received alternate
instructions. Such allocation requirements terminate simultaneous to the
termination of an authorization for rebalancing or any authorization to a third
party to transact transfers on your behalf.

Withdrawals of any type are taken pro-rata from the investment options based on
the then current Account Values in such investment options unless we receive
instructions from you prior to such withdrawal. For this purpose only, the
Account Value in all your then current Fixed Allocations is deemed to be in one
investment option. If you transfer or withdraw Account Value from multiple
Fixed Allocations and do not provide instructions indicating the Fixed
Allocations from which Account Value should be taken: (a) we transfer Account
Value first from the Fixed Allocation with the shortest amount of time
remaining to the end its Guarantee Period, and then from the Fixed Allocation
with the next shortest amount of time remaining to the end of its Guarantee
Period, etc.; and (b) if there are multiple Fixed Allocations with the same
amount of time left in each Guarantee Period, as between such Fixed Allocations
we first take Account Value from the Fixed Allocation that had the shorter
Guarantee Period.

TRANSFERS: In the accumulation phase you may transfer Account Value
between investment options, subject to our allocation rules (see "Allocation
Rules"). Transfers are not subject to taxation (see "Transfers Between
Investment Options"). We charge $10.00 for each transfer after the twelfth in
any Annuity Year, including transfers transacted as part of a dollar cost
averaging program (see "Dollar Cost Averaging") or any rebalancing, market
timing, asset allocation or similar program which you employ or you authorize
to be employed on your behalf. Renewals or transfers of Account Value from a
Fixed Allocation at the end of its Guarantee Period are not subject to the
transfer charge and are not counted in determining whether other transfers may
be subject to the transfer charge (see "Renewals"). Your transfer request must
be In Writing or meet our requirements for accepting instructions we receive
over the phone.

We reserve the right to limit the number of transfers in any Annuity Year for
all existing or new Owners. We also reserve the right to limit the number of
transfers in any Annuity Year or to refuse any transfer request for an Owner or
certain Owners if we believe that: (a) excessive trading by such Owner or
Owners or a specific transfer request or group of transfer requests may have a
detrimental effect on Unit Values or the share prices of the underlying mutual
fund portfolios; or (b) we are informed by one or more of the underlying mutual
funds that the purchase or redemption of shares is to be restricted because of
excessive trading or a specific transfer or group of transfers is deemed to
have a detrimental effect on share prices of an affected underlying mutual fund
portfolio or portfolios.

To the extent permitted by law, we may require up to 2 business days' notice of
any transfer into or out of a fixed allocation if the market value of such
transfer is at least $1,000,000.00.

In order to help you determine whether you wish to transfer Account Values to a
Fixed Allocation, you may obtain our Current Rates by writing us or calling us
at 1-800-680-8920.

Where permitted by law, we may accept your authorization of a third party to
transfer Account Values on your behalf, subject to our rules. We may suspend
or cancel such acceptance at any time. We notify you of any such suspension or
cancellation. We may restrict the investment options that will be available
for transfers or allocations of Net Purchase Payments during any period in
which you authorize such third party to act on your behalf. We give the third
party you authorize prior notification of any such restrictions. However, we
will not enforce such a restriction if we are provided evidence satisfactory to
us that: (a) such third party has been appointed by a court of competent
jurisdiction to act on your behalf; or (b) such third party has been appointed
by you to act on your behalf for all your financial affairs.

We or an affiliate of ours may provide administrative or other support services
to independent third parties you authorize to conduct transfers on your behalf
or who provide recommendations as to how your Account Values should be
allocated. This includes, but is not limited to, transferring Account Values
between investment options in accordance with market timing strategies employed
by such third parties. Such independent third parties may or may not be
appointed our agents for the sale of Annuities. However, WE DO NOT ENGAGE ANY
THIRD PARTIES TO OFFER INVESTMENT ALLOCATION SERVICES OF ANY TYPE, SO THAT
PERSONS OR FIRMS OFFERING SUCH SERVICES DO SO INDEPENDENT FROM ANY AGENCY
RELATIONSHIP THEY MAY HAVE WITH US FOR THE SALE OF ANNUITIES. WE THEREFORE TAKE
NO RESPONSIBILITY FOR THE INVESTMENT ALLOCATIONS AND TRANSFERS TRANSACTED ON
YOUR BEHALF BY SUCH THIRD PARTIES OR ANY INVESTMENT ALLOCATION RECOMMENDATIONS
MADE BY SUCH PARTIES. We do not currently charge you extra for providing these
support services.

RENEWALS: A renewal is a transaction that occurs automatically as of
the last day of a Fixed Allocation's Guarantee Period unless we receive
alternative instructions. This day as to each Fixed Allocation is called its
Maturity Date. As of the end of a Maturity Date, the Fixed Allocation's
Guarantee Period "renews" and a new Guarantee Period of the same duration as
the one just completed begins. However, the renewal will not occur if the
Maturity Date, and where required by law, the 30 days prior to the Maturity
Date, is on the date we apply your Account Value to determine the annuity
payments that begin on the Annuity Date (see "Annuity Payments").

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As an alternative to a renewal, you may transfer all or part of that Fixed
Allocation's Account Value to make a different Fixed Allocation or you may
transfer such Account Value to one or more Sub-accounts, subject to our
allocation rules. To accomplish this, we must receive instructions from you In
Writing at least two business days before the Maturity Date. No MVA applies to
transfers of a Fixed Allocation's Account Value occurring as of its Maturity
Date, and where required by law, the 30 days prior to the Maturity Date. An
MVA will apply in determining the Account Value of a Fixed Allocation at the
time annuity payments are determined, unless the Maturity Date of such Fixed
Allocation is the 15th day before the Annuity Date (see "Annuity Payments").

At least 30 days prior to a Maturity Date, or earlier if required by law or
regulation, we inform you of the Guarantee Periods available as of the date of
such notice. We do not provide a similar notice if the Fixed Allocation's
Guarantee Period is of less than a year's duration. Such notice may include an
example of the rates we are then crediting new Fixed Allocations as of the date
such notice is prepared. The rates actually credited to a Fixed Allocation as
of the date of any renewal or transfer immediately subsequent to the Maturity
Date may be more or less than any rates quoted in such notice.

If your Fixed Allocation's then ending Guarantee Period is no longer available
for new allocations and renewals or you choose a different Guarantee Period
that is no longer available on the date following the Maturity Date, we will
try to reach you so you may make another choice. If we cannot reach you, we
will assign the next shortest Guarantee Period then currently available for new
allocations and renewals to that Fixed Allocation.

DOLLAR COST AVERAGING: We offer dollar cost averaging in the
accumulation phase. Dollar cost averaging is a program designed to provide for
regular, approximately level investments over time. You may choose to transfer
earnings only, principal plus earnings or a flat dollar amount. We make no
guarantee that a dollar cost averaging program will result in a profit or
protect against a loss in a declining market. You may select this program by
submitting to us a request In Writing. You may cancel your participation in
this program In Writing or by phone if you have previously authorized our
acceptance of such instructions.

Dollar cost averaging is available from any of the investment options we choose
to make available for such a program. Your annuity must have an Account Value
of not less than $10,000 at the time of the first transfer under a dollar cost
averaging program. Transfers under a dollar cost averaging program are counted
in determining the applicability of the transfer fee (see "Transfers"). We
reserve the right to limit the investment options into which Account Value may
be transferred as part of a dollar cost averaging program. We currently do not
permit dollar cost averaging programs where Account Value is transferred to
Fixed Allocations. We also reserve the right to charge a processing fee for
this service. Should we suspend or cancel the offering of this service, such
suspension or cancellation will not affect any dollar cost averaging programs
then in effect. Dollar cost averaging is not available while a market timing
type of program is used in connection with your Annuity. While participating
in an asset allocation program, dollar cost averaging is available only from a
Fixed Allocation. If participating in dollar cost averaging while using an
asset allocation program, dollar cost averaging transfers to one or more
Sub-accounts must be identical to current dollar cost averaging Sub-account
allocations. When an asset allocation program is changed, future dollar cost
averaging allocations will also be automatically changed to match the asset
allocation program.

Dollar cost averaging from Fixed Allocations are subject to the following
rules: (a) you may only use Fixed Allocations with Guarantee Periods of 1, 2
or 3 years; (b) such a program may only be selected in conjunction with and
simultaneous to a new or renewing Fixed Allocation; (c) only averaging of
earnings only or principal plus earnings is permitted; (d) a program averaging
principal plus earnings from a Fixed Allocation must be designed to last that
Fixed Allocation's entire current Guarantee Period; (e) dollar cost averaging
transfers from a Fixed Allocation are not subject to the MVA; (f) dollar cost
averaging may be done on a monthly basis only; and (g) you may not
simultaneously use Account Value in any Fixed Allocation to participate in
dollar cost averaging and receive Systematic Withdrawals or Minimum
Distributions from such Fixed Allocation (see "Systematic Withdrawals" and
"Minimum Distributions").

We reserve the right, from time to time, to credit additional amounts
("Additional Amounts") if you allocate Purchase Payments to Fixed Allocations
as part of a dollar cost averaging program. Such an offer is at our sole
discretion and is subject to our rules, including but not limited to, a change
to the MVA formula. For more information see "Additional Amounts in the Fixed
Allocations".

REBALANCING: We offer, during the accumulation phase,
automatic quarterly, semi-annual or annual rebalancing among the variable
investment options of your choice. This provides the convenience of automatic
rebalancing without having to provide us instructions on a periodic basis.
Failure to choose this option does not prevent you from providing us with
transfer instructions from time-to-time that have the effect of rebalancing.
It also does not prevent other requested transfers from being transacted.

Under this program, Account Values in variable investment options are
rebalanced quarterly, semi-annually or annually, as applicable, to the
percentages you request. The rebalancing may occur quarterly, semi-annually or
annually based upon the Issue Date. If a transfer is requested involving any
investment option participating in an automatic rebalancing program, we
automatically alter the rebalancing percentages going forward (unless we
receive alternate instructions) to the ratios between Account Values in the
variable investment options as of the effective date of such requested transfer
once it has been processed. Automatic rebalancing is delayed one quarter if
Account Value is being maintained in the WF Money Market Sub-account for the
duration of your Annuity's "free-look" period and rebalancing would otherwise
occur during such period (see "Allocation of Net Purchase Payments").

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You may change the percentage allocable to each variable investment option at
any time. However, you may not choose to allocate less than 5% of Account
Value to any variable investment option.

We do not offer automatic rebalancing in connection with Fixed Allocations.
The Account Value of your Annuity must be at least $10,000 when we receive your
automatic rebalancing request. We may require that all variable investment
options in which you maintain Account Value must be used in the rebalancing
program. You may maintain Account Value in at least two and not more than ten
variable investment options when using a rebalancing program. You may not
simultaneously participate in rebalancing and dollar cost averaging.
Rebalancing also is not available when a program of Systematic Withdrawals of
earnings or earnings plus principal is in effect.

For purposes of determining the number of transfers made in any Annuity Year,
all rebalancing transfers made on the same day are treated as one transfer. We
reserve the right to charge a processing fee for signing up for this service.

To elect to participate or to terminate participation in automatic rebalancing,
we may require instructions In Writing at our Office in a form satisfactory to
us.

DISTRIBUTIONS: Distributions available from your Annuity during the
accumulation phase include surrender, medically- related surrender, free
withdrawals, partial withdrawals, Systematic Withdrawals, Minimum Distributions
(in relation to qualified plans) and a death benefit. In the payout phase we
pay annuity payments. Distributions from your Annuity generally are subject to
taxation, and may be subject to a tax penalty as well (see "Certain Tax
Considerations"). You may wish to consult a professional tax advisor for tax
advice prior to exercising any right to an elective distribution. During the
accumulation phase, any distribution other than a death benefit: (a) must
occur prior to any death that would cause a death benefit to become payable;
and (b) will occur subsequent to our receipt of a completed request In Writing.

SURRENDER: Surrender of your Annuity for its Surrender Value
is permitted during the accumulation phase. A contingent deferred sales charge
may apply to such surrender (see "Contingent Deferred Sales Charge"). Your
Annuity must accompany your surrender request.

MEDICALLY-RELATED SURRENDER: Where permitted by law, you may
apply to surrender your Annuity for its Account Value prior to the Annuity Date
upon occurrence of a "Contingency Event". The Annuitant must be alive as of
the date we pay the proceeds of such surrender request. If the Owner is one or
more natural persons, all such Owners must also be alive at such time.
Specific details and definitions of terms in relation to this benefit may
differ in certain jurisdictions. This waiver of any applicable contingent
deferred sales charge is subject to our rules. This benefit is not available
if the total Purchase Payments received exceed $500,000.00 for all annuities
issued by us with this benefit for which the same person is named as Annuitant.
A "Contingency Event" occurs if the Annuitant is:

(1) First confined in a "Medical Care Facility" while your Annuity
is in force and remains confined for at least 90 days in a row; or

(2) First diagnosed as having a "Fatal Illness" while your Annuity
is in force.

"Medical Care Facility" means any state licensed facility providing medically
necessary in-patient care which is prescribed by a licensed "Physician" in
writing and based on physical limitations which prohibit daily living in a
non-institutional setting. "Fatal Illness" means a condition diagnosed by a
licensed "Physician" which is expected to result in death within 2 years for
80% of the diagnosed cases. "Physician" means a person other than you, the
Annuitant or a member of either your or the Annuitant's families who is state
licensed to give medical care or treatment and is acting within the scope of
that license. We must receive satisfactory proof of the Annuitant's
confinement or Fatal Illness In Writing.

FREE WITHDRAWALS: Each Annuity Year in the accumulation phase
you may withdraw a limited amount of Account Value without application of any
applicable contingent deferred sales charge. Such free withdrawals are
available to meet liquidity needs. Free withdrawals are not available at the
time of a surrender of an Annuity. Withdrawals of any type made prior to age
59 1/2 may be subject to a 10% tax penalty (see "Penalty on Distributions").

The minimum amount available as a free withdrawal is $100. Amounts received as
Systematic Withdrawals or as Minimum Distributions are deemed to come first
from the amount available under this Free Withdrawal provision (see "Systematic
Withdrawals" and "Minimum Distributions"). You may also request to receive as
a lump sum any free withdrawal amount not already received that Annuity Year
under a plan of Systematic Withdrawals or as Minimum Distributions.

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There is a cumulative maximum free withdrawal amount which is determined in the
following manner. The maximum free withdrawal amount is the lesser of (a) and
(b) where (a) is the contract's Account Value less any remaining contingent
deferred sales charge and (b) is the greater of (1) and (2) where (1) is the
contract's "growth" plus "unliquidated" "old" Purchase Payments and (2) is an
amount which is 10% of the first Purchase Payment and is increased by 10% of
each subsequent Purchase Payment when it is received and by 10% of all
"unliquidated" Purchase Payments on the first day of each Annuity Year after
the first, and is reduced by all amounts received under this Free Withdrawal
provision. "Growth" equals the then current Account Value less all
"unliquidated" Purchase Payments and less the value at the time credited of any
Exchange Credits or Additional Amounts (see "Exchange Contracts" and
"Breakpoints"). In order to determine future increases in the free withdrawal
amount, amounts are deemed to be withdrawn first from "growth" and then from
"unliquidated" "old" Purchase Payments. "Unliquidated" means not previously
surrendered or withdrawn. "Old" Purchase Payments are Purchase Payments
allocated to Account Value more than seven years prior to the partial
withdrawal. For purposes of the contingent deferred sales charge, amounts
withdrawn as a free withdrawal are not considered a liquidation of Purchase
Payments. Therefore, any free withdrawal will not reduce the amount of any
applicable contingent deferred sales charge upon any partial withdrawal or
subsequent surrender.

PARTIAL WITHDRAWALS: You may withdraw part of your Surrender
Value. The minimum partial withdrawal amount is $100. The Surrender Value
that must remain in the Annuity as of the date of this transaction is $1,000.
If the amount of the partial withdrawal request exceeds the maximum amount
available under this provision, we reserve the right to treat your request as
one for a full surrender.

Amounts withdrawn that are not in excess of the free withdrawal amount are
deemed to come first from "growth" and then from "unliquidated" "old" Purchase
Payments. On a partial withdrawal, the contingent deferred sales charge is
assessed against any "unliquidated" "new" Purchase Payments withdrawn.
"Unliquidated" means not previously surrendered or withdrawn. "New" Purchase
Payments are those received in the seven (7) years prior to the date as of
which a free withdrawal occurs. For the purpose of determining the applicable
contingent deferred sales charge to be assessed, amounts are deemed to be
withdrawn in the following order:

(1) From any amount then available as a free withdrawal; then from

(2) "Old" Purchase Payments (Purchase Payments allocated to
Account Value more than seven years prior to the partial withdrawal); then from

(3) "New" Purchase Payments (If there are multiple "new" Purchase
Payments, the one received earliest is liquidated first, then the one received
next earliest, and so forth); then from

(4) Other Surrender Value.

SYSTEMATIC WITHDRAWALS: We offer Systematic Withdrawals of
earnings only, principal plus earnings or a flat dollar amount. Systematic
Withdrawals from Fixed Allocations are limited to earnings only. You may
choose at any time to begin such a program if withdrawals are to come solely
from Account Value maintained in the Sub-accounts. Systematic Withdrawals are
deemed to be withdrawn from Surrender Value in the same order as partial
withdrawals for purposes of determining if the contingent deferred sales charge
applies. Penalties may apply (see "Free Withdrawals").

A Systematic Withdrawal from a Fixed Allocation is not subject to the MVA. We
calculate the Fixed Allocation's credited interest since the prior withdrawal
as A minus B, plus C, where:

A is the Interim Value of the applicable Fixed Allocation as of the
date of the Systematic Withdrawal;

B is the Interim Value of the applicable Fixed Allocation as of the
beginning of its then current Guarantee Period; and

C is the total of all partial or free withdrawals and any transfers
from such Fixed Allocation since the beginning of its then
current Guarantee Period.

Systematic Withdrawals are available on a monthly, quarterly, semi-annual or
annual basis. You may not simultaneously receive Systematic Withdrawals from a
Fixed Allocation and participate in a dollar cost averaging program under which
Account Value is transferred from the same Fixed Allocation (see "Dollar Cost
Averaging"). Systematic Withdrawals are not available while you are taking any
Minimum Distributions (see "Minimum Distributions"). Systematic Withdrawals of
earnings or earnings plus principal are not available while any rebalancing or
asset allocation program is in effect in relation to your Annuity.

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The Surrender Value of your Annuity must be at least $20,000 when we accept
your request for a program of Systematic Withdrawals. The minimum for each
Systematic Withdrawal is $100. For any scheduled Systematic Withdrawal other
than the last that does not meet this minimum, we reserve the right to defer
such a withdrawal and add the amount that would have been withdrawn to the
amount that is to be withdrawn at the next Systematic Withdrawal.

We reserve the right to charge a processing fee for this service. Should we
suspend or cancel offering Systematic Withdrawals, such suspension or
cancellation will not affect any Systematic Withdrawal programs then in effect.

MINIMUM DISTRIBUTIONS: You may elect to have us calculate
Minimum Distributions annually if your Annuity is being used for certain
qualified purposes under the Code. We calculate such amounts assuming the
Minimum Distribution amount is based solely on the value of your Annuity. The
required Minimum Distribution amounts applicable to your particular situation
may depend on other annuities, savings or investments of which we are unaware,
so that the required amount may be greater than the Minimum Distribution amount
we calculate based on the value of your Annuity. We reserve the right to
charge a fee for each annual calculation. Minimum Distributions are not
available if you are taking Systematic Withdrawals (see "Systematic
Withdrawals"). You may elect to have Minimum Distributions paid out monthly,
quarterly, semi-annually or annually.

Each Minimum Distribution will be taken from the investment options you select.
However, the portion of any Minimum Distribution that can be taken from any
Fixed Allocations may not exceed the then current ratio between your Account
Value in all Fixed Allocations you maintain and your total Account Value. No
MVA applies to any portion of Minimum Distributions taken from Fixed
Allocations. Minimum Distributions are not available from any Fixed
Allocations if such Fixed Allocation is being used in a dollar cost averaging
program (see "Dollar Cost Averaging").

No contingent deferred sales charge is assessed against amounts withdrawn as a
Minimum Distribution, but only to the extent of the Minimum Distribution
required from your Annuity at the time it is taken. The contingent deferred
sales charge may apply to additional amounts withdrawn to meet minimum
distribution requirements in relation to other retirement programs you may
maintain.

Amounts withdrawn as Minimum Distributions are considered to come first from
the amounts available as a free withdrawal (see "Free Withdrawals") as of the
date of the yearly calculation of the Minimum Distribution amount. Minimum
Distributions over that amount are not deemed to be a liquidation of new
Purchase Payments (see "Partial Withdrawals").

DEATH BENEFIT: In the accumulation phase, a death benefit is
payable. IF THE ANNUITY IS OWNED BY ONE OR MORE NATURAL PERSONS, IT IS PAYABLE
UPON THE FIRST DEATH OF SUCH OWNERS. If the Annuity is owned by an entity, the
death benefit is payable upon the Annuitant's death, if there is no Contingent
Annuitant. If a Contingent Annuitant was designated before the Annuitant's
death and the Annuitant dies, the Contingent Annuitant then becomes the
Annuitant. There may be adverse tax consequences for certain entity Owners if
they name a Contingent Annuitant (see "Ownership, Annuitant and Beneficiary
Designations").

The person upon whose death the death benefit is payable is referred to below
as the "decedent". For purposes of this death benefit provision, "withdrawals"
means withdrawals of any type (free withdrawals, partial withdrawals,
Systematic Withdrawals, Minimum Distributions) before assessment of any
applicable contingent deferred sales charge and after any applicable MVA. For
purposes of this provision, persons named Owner or Annuitant within 60 days of
the Issue Date are treated as if they were an Owner or Annuitant on the Issue
Date.

The death benefit is as follows, and is subject to the conditions described in
(1),(2) and (3) below:

(1) If death occurs prior to the decedent's age 85: the death
benefit is the greater of your Account Value in Sub- accounts plus the Interim
Value of any Fixed Allocations, and the minimum death benefit ("Minimum Death
Benefit"). The Minimum Death Benefit is the sum of all Purchase Payments less
the sum of all withdrawals.

(2) If death occurs when the decedent is age 85 or older: the
death benefit is your Account Value.

(3) If a decedent was not named an Owner or Annuitant as of the
Issue Date and did not become such as a result of a prior Owner's or
Annuitant's death: the Minimum Death Benefit is suspended as to that person
for a two year period from the date he or she first became an Owner or
Annuitant. If that person's death occurs during the suspension period and
prior to age 85, the death benefit is your Account Value in Sub-accounts plus
the Interim Value of any Fixed Allocations. If death occurs during the
suspension period when such decedent is age 85 or older, the death benefit is
your Account Value. After the suspension period is completed, the death
benefit is the same as if such person had been an Owner or Annuitant on the
Issue Date.

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<PAGE> 35
The amount of the death benefit is determined as of the date we receive In
Writing: (a) "due proof of death"; (b) all representations we require or which
are mandated by applicable law or regulation in relation to the death claim and
the payment of death proceeds; and (c) any applicable election of the mode of
payment of the death benefit, if not previously elected by the Owner. The
death benefit is reduced by any annuity payments made prior to the date we
receive In Writing such due proof of death. The following constitutes "due
proof of death": (a) a certified copy of a death certificate; (b) a certified
copy of a decree of a court of competent jurisdiction as to the finding of
death; or (c) any other proof satisfactory to us.

If the death benefit becomes payable prior to the Annuity Date due to the death
of the Owner and the Beneficiary is the Owner's spouse, then in lieu of
receiving the death benefit, such Owner's spouse may elect to be treated as an
Owner and continue the Annuity.

In the event of your death, the benefit must be distributed within: (a) five
years of the date of death; or (b) over a period not extending beyond the life
expectancy of the Beneficiary or over the life of the Beneficiary.
Distribution after your death to be paid under (b) above, must commence within
one year of the date of death.

If the Annuitant dies before the Annuity Date, the Contingent Annuitant will
become the Annuitant. Where allowed by law, if the Annuity is owned by one or
more natural persons, the oldest of any such Owners not named as the Annuitant
immediately becomes the Contingent Annuitant if: (a) the Contingent Annuitant
predeceases the Annuitant; or (b) if you do not designate a Contingent
Annuitant.

In the payout phase, we continue to pay any "certain" payments (payments not
contingent on the continuance of any life) to the Beneficiary subsequent to the
death of the Annuitant.

ANNUITY PAYMENTS: Annuity payments can be guaranteed for
life, for a certain period, or for a certain period and life. We make
available fixed payments, and as of the date of this Prospectus, adjustable
payments (payments which may or may not be changed on specified adjustment
dates based on annuity purchase rates we are then making available to annuities
of the same class). We may or may not be making adjustable annuities available
on the Annuity Date. To the extent there is any tax basis in the annuity, a
portion of each annuity payment is treated for tax purposes as a return of such
basis until such tax basis is exhausted. The amount deemed such a return of
basis is determined in accordance with the requirements of the Code (see
"Certain Tax Considerations").

You may choose an Annuity Date, an annuity option and the frequency of annuity
payments when you purchase an Annuity, or at a later date. Your choice of
Annuity Date and annuity option may be limited depending on your use of the
Annuity and the applicable jurisdiction. Subject to our rules, you may choose
an Annuity Date, option and frequency of payments suitable to your needs and
circumstances. Such rules may include a prohibition on annuitization within 1
year of the Issue Date. You should consult with competent tax and financial
advisors as to the appropriateness of any such choice. Should Annuities
subject to New York law be made available, the Annuity Date for such Annuities
may not exceed the first day of the calendar month following the Annuitant's
85th birthday. Other jurisdictions may impose similar requirements.

You may change your choices at any time up to 30 days before the earlier of:
(a) the date we would have applied your Account Value to an annuity option had
you not made the change; or (b) the date we will apply your Account Value to an
annuity option in relation to the new Annuity Date you are then selecting. You
must request this change In Writing. The Annuity Date must be the first or the
fifteenth day of a calendar month.

In the absence of an election In Writing: (a) the Annuity Date is the first
day of the calendar month first following the later of the Annuitant's 85th
birthday or the fifth anniversary of our receipt at our Office of your request
to purchase an Annuity; and (b) where allowed by law, fixed monthly payments
will commence under option 2, described below, with 10 years certain. Should
Annuities subject to New York law be made available, for such Annuities, in the
absence of an election In Writing: (a) the Annuity Date is the first day of
the calendar month following the Annuitant's 85th birthday; and (b) fixed
monthly payments will commence under Option 2, described below, with 10 years
certain. Other jurisdictions may impose similar requirements. The amount to
be applied is your Annuity's Account Value 15 business days prior to the
Annuity Date. In determining your annuity payments, we credit interest using
our then current crediting rate for this purpose, which is not less than 3% of
interest per year, between the date Account Value is applied to an annuity
option and the Annuity Date. If there is any remaining contingent deferred
sales charge applicable as of the Annuity Date, then the annuity option you
select must include a certain period of not less than 5 years' duration. As a
result of this rule, making additional Purchase Payments within seven years of
the Annuity Date will prevent you from choosing an annuity option with a
certain period of less than 5 years' duration. Annuity options in addition to
those shown are available with our consent. The minimum initial amount payable
is the minimum initial annuity amount we allow under our then current rules.
Should you wish to receive a lump sum payment, you must request to surrender
your Annuity prior to the Annuity Date (see "Surrender").

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<PAGE> 36
You may elect to have any amount of the proceeds due to the Beneficiary applied
under any of the options described below, but only to the extent selecting such
an option does not alter the tax status of the Annuity. Except where a lower
amount is required by law, the minimum monthly annuity payment is $50.

If you have not made an election prior to proceeds becoming due, the
Beneficiary may elect to receive the death benefit under one of the annuity
options. However, if you made an election, the Beneficiary may not alter such
election.

For purposes of the annuity options described below, the term "key life" means
the person or persons upon whose life any payments dependent upon the
continuation of life are based.

(1) Option 1 - Payments for Life: Under this option, income is
payable periodically prior to the death of the key life, terminating with the
last payment due prior to such death. Since no minimum number of payments is
guaranteed, this option offers the maximum level of periodic payments of the
life contingent annuity options. It is possible that only one payment will be
payable if the death of the key life occurs before the date the second payment
was due, and no other payments nor death benefits would be payable.

(2) Option 2 - Payments for Life with 10, 15, or 20 Years
Certain: Under this option, income is payable periodically for 10, 15, or 20
years, as selected, and thereafter until the death of the key life. Should the
death of the key life occur before the end of the period selected, the
remaining payments are paid to the Beneficiary to the end of such period.

(3) Option 3 - Payments Based on Joint Lives: Under this option,
income is payable periodically during the joint lifetime of two key lives, and
thereafter during the remaining lifetime of the survivor, ceasing with the last
payment prior to the survivor's death. No minimum number of payments is
guaranteed under this option. It is possible that only one payment will be
payable if the death of all the key lives occurs before the date the second
payment was due, and no other payments nor death benefits would be payable.

(4) Option 4 - Payments for a Certain Period: Under this option,
income is payable periodically for a specified number of years. The number of
years is subject to our then current rules. Should the payee die before the
end of the specified number of years, the remaining payments are paid to the
Beneficiary to the end of such period. Note that under this option, payments
are not based on how long we expect any key life to live. Therefore, that
portion of the mortality risk charge assessed to cover the risk that key lives
outlive our expectations provides no benefit to an Owner selecting this option.

The first payment varies according to the annuity options and payment frequency
selected. The first periodic payment is determined by multiplying the Account
Value (expressed in thousands of dollars) as of the close of business of the
fifteenth day preceding the Annuity Date, plus interest at not less than 3% per
year from such date to the Annuity Date, by the amount of the first periodic
payment per $1,000 of value obtained from our then current annuity rates for
that type of annuity and for the frequency of payment selected. Our then
current rates will not be less than our guaranteed minimum rates. These
guaranteed minimum rates are derived from the 1983a Individual Annuity
Mortality Table with ages set back one year for males and two years for females
and with an assumed interest rate of 3% per annum. Where required by law or
regulation, such annuity table will have rates that do not differ according to
the gender of the key life. Otherwise, the rates will differ according to the
gender of the key life.

QUALIFIED PLAN WITHDRAWAL LIMITATIONS: The Annuities are
endorsed such that there are surrender or withdrawal limitations when used in
relation to certain retirement plans for employees which qualify under various
sections of the Code. These limitations do not affect certain roll-overs or
exchanges between qualified plans. Distribution of amounts attributable to
contributions made pursuant to a salary reduction agreement (as defined in Code
section 403(b)), or attributable to transfers to a tax sheltered annuity from a
custodial account (as defined in Code section 403(b)(7)), is restricted to the
employee's: (a) separation from service; (b) death; (c) disability (as defined
in Section 72(m)(7) of the Code); (d) reaching age 59 1/2; or (e) hardship.
Hardship withdrawals are restricted to amounts attributable to salary reduction
contributions, and do not include investment results. In the case of tax
sheltered annuities, these limitations do not apply to certain salary reduction
contributions made and investment results earned prior to dates specified in
the Code. In addition, the limitation on hardship withdrawals does not apply
to salary reduction contributions made and investment results earned prior to
dates specified in the Code which have been transferred from custodial
accounts. Rollovers from the types of plans noted to another qualified plan or
to an individual retirement account or individual retirement annuity are not
subject to the limitations noted. Certain distributions, including rollovers,
that are not transferred directly to the trustee of another qualified plan, the
custodian of an individual retirement account or the issuer of an individual
retirement annuity may be subject to automatic 20% withholding for Federal
income tax. This may also trigger withholding for state income taxes (see
"Certain Tax Considerations").

We may make annuities available through the Texas Optional Retirement Program
subsequent to receipt of the required regulatory approvals and implementation.
In addition to the restrictions required for such Annuities to qualify under
Section 403(b) of the Code, Annuities issued in the Texas Optional Retirement
Program are amended as follows: (a) no benefits are payable unless you die
during, or are retired or

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<PAGE> 37
terminated from, employment in all Texas institutions of higher education; and
(b) if a second year of participation in such program is not begun, the total
first year State of Texas' contribution will be returned, upon its request, to
the appropriate institute of higher education.

With respect to the restrictions on withdrawals set forth above, we are relying
upon: 1) a no-action letter dated November 28, 1988 from the staff of the
Securities and Exchange Commission to the American Council of Life Insurance
with respect to annuities issued under Section 403(b) of the Code, the
requirements of which have been complied with by the us; and 2) Rule 6c-7 under
the 1940 Act with respect to annuities made available through the Texas
Optional Retirement Program, the requirements of which have been complied with
by the us.

PRICING OF TRANSFERS AND DISTRIBUTIONS: We "price" transfers and
distributions on the dates indicated below:

(1) We price "scheduled" transfers and distributions as of the
date such transactions are so scheduled. "Scheduled" transactions include
transfers under a dollar cost averaging program, Systematic Withdrawals,
Minimum Distributions, transfers previously scheduled with us at our Office
pursuant to any on-going rebalancing, asset allocation or similar program, and
annuity payments.

(2) We price "unscheduled" transfers, partial withdrawals and free
withdrawals as of the date we receive at our Office the request for such
transactions. "Unscheduled" transfers include any transfers processed in
conjunction with any market timing program, or transfers not previously
scheduled with us at our Office pursuant to any rebalancing, asset allocation
or similar program which you employ or you authorize to be employed on your
behalf. "Unscheduled" transfers received pursuant to an authorization to
accept transfers over the phone are priced as of the Valuation Period we
receive the request at our Office for such transactions.

(3) We price surrenders, medically-related surrenders and death
benefits as of the date we receive at our Office all materials we require for
such transactions and such materials are satisfactory to us (see "Surrenders",
"Medically-related Surrenders" and "Death Benefits").

The pricing of transfers and distributions involving Sub-accounts includes the
determination of applicable Unit Price for the Units transferred or
distributed. The pricing of transfers and distributions involving Fixed
Allocations includes the determination of any applicable MVA. Any applicable
MVA alters the amount available when all the Account Value in a Fixed
Allocation is being transferred or distributed. Any applicable MVA alters the
amount of Interim Value needed when only a portion of the Account Value is
being transferred or distributed. Unit Prices may change each Valuation Period
to reflect the investment performance of the Sub- accounts. The MVA applicable
to each Fixed Allocation changes once each month and also each time we declare
a different rate for new Fixed Allocations. Payment (but not pricing) is
subject to our right to defer transactions for a limited period (see "Deferral
of Transactions").

VOTING RIGHTS: You have voting rights in relation to Account Value
maintained in the Sub-accounts. You do not have voting rights in relation to
Account Value maintained in any Fixed Allocations or in relation to fixed or
adjustable annuity payments.

We will vote shares of the underlying mutual funds or portfolios in which the
Sub-accounts invest in the manner directed by Owners. Owners give instructions
equal to the number of shares represented by the Sub-account Units attributable
to their Annuity.

We will vote the shares attributable to assets held in the Sub-accounts solely
for us rather than on behalf of Owners, or any share as to which we have not
received instructions, in the same manner and proportion as the shares for
which we have received instructions. We will do so separately for each
Sub-account from various classes that may invest in the same underlying mutual
fund portfolio.

The number of votes for an underlying mutual fund or portfolio will be
determined as of the record date for such underlying mutual fund or portfolio
as chosen by its board of trustees or board of directors, as applicable. We
will furnish Owners with proper forms and proxies to enable them to instruct us
how to vote.

You may instruct us how to vote on the following matters: (a) changes to the
board of trustees or board of directors, as applicable; (b) changing the
independent accountant; (c) approval of changes to the investment advisory
agreement or adoption of a new investment advisory agreement; (d) any change in
the fundamental investment policy; and (e) any other matter requiring a vote of
the shareholders.

With respect to approval of changes to the investment advisory agreement,
approval of a new investment advisory agreement or any change in fundamental
investment policy, only Owners maintaining Account Value as of the record date
in a Sub-account investing in the applicable underlying mutual fund portfolio
will instruct us how to vote on the matter, pursuant to the requirements of
Rule 18f-2 under the 1940 Act.

TRANSFERS, ASSIGNMENTS OR PLEDGES: Generally, your rights in an
Annuity may be transferred, assigned or pledged for loans at any time.
However, these rights may be limited depending on your use of the Annuity.
These transactions may be subject to income taxes and certain penalty taxes
(see "CERTAIN TAX CONSIDERATIONS"). You may transfer, assign or pledge your
rights to another person at any

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<PAGE> 38
time, prior to any death upon which the death benefit is payable. You must
request a transfer or provide us a copy of the assignment In Writing. A
transfer or assignment is subject to our acceptance. Prior to receipt of this
notice, we will not be deemed to know of or be obligated under any assignment
prior to our receipt and acceptance thereof. We assume no responsibility for
the validity or sufficiency of any assignment. Transfer of all or a portion of
ownership rights may affect the minimum death benefit (see "Death Benefits").

REPORTS TO YOU: We will provide you with reports once each quarter.
You may request additional reports. We reserve the right to charge up to $50
for each such additional report.

THE COMPANY: American Skandia Life Assurance Corporation is a wholly owned
subsidiary of American Skandia Investment Holding Corporation, whose indirect
parent is Skandia Insurance Company Ltd. Skandia Insurance Company Ltd. is
part of a group of companies whose predecessor commenced operations in 1855.
Two of our affiliates, American Skandia Marketing, Incorporated, formerly
Skandia Life Equity Sales Corporation, and American Skandia Information
Services and Technology Corporation, formerly American Skandia Business
Services Corporation, may undertake certain administrative functions on our
behalf. Our affiliate, American Skandia Investment Services, Incorporated,
formerly American Skandia Life Investment Management, Inc., currently acts as
the investment manager to the American Skandia Trust. We currently engage
Skandia Investment Management, Inc., an affiliate whose indirect parent is
Skandia Insurance Company Ltd., as investment manager for our general account.
We are under no obligation to engage or continue to engage any investment
manager.

LINES OF BUSINESS: As of the date of this Prospectus, we offer: (a)
certain deferred annuities that are registered with the Securities and Exchange
Commission, including variable annuities, fixed interest rate annuities that
include a market value adjustment feature, and annuities that offer both
variable and fixed investment options, such as the Annuities offered pursuant
to this Prospectus; (b) certain other fixed deferred annuities that are not
registered with the Securities and Exchange Commission; and (c) fixed and
adjustable immediate annuities. We may, in the future, offer other annuities,
life insurance and other forms of insurance.

SELECTED FINANCIAL DATA: The following selected financial data are
qualified by reference to, and should be read in conjunction with, the
financial statements, including related notes thereto, and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
included elsewhere in this Prospectus. The selected financial data as of and
for each of the five years ended December 31, 1994, 1993, 1992, 1991 and 1990
has been audited by Deloitte & Touche LLP, independent auditors whose report
thereon is included herein. The selected financial data as of and for the
_____-month periods ended________, 1995 and 1994 are taken or derived from the
company's unaudited interim financial statements included elsewhere in the
Registration Statement and, in the opinion of management, have been prepared on
the same basis as the audited financial statements included herein and include
all adjustments, consisting only of normal recurring adjustments, necessary for
a fair presentation of such data. The results of operations for an interim
period are not necessarily indicative of the results for the full year or any
other interim period. [To be filed by Amendment.]

INCOME STATEMENT DATA:
<TABLE>
<CAPTION>
______, ______,
1995 1994 1994 1993 1992 1991 1990
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
REVENUES:
Net investment income $ 1,300,217 $ 692,758 $ 892,053 $ 723,253 $ 846,522
Annuity premium income 70,000 101,643 1,304,629 2,068,452 1,268,612
Annuity charges and fees* 24,779,785 11,752,984 4,846,134 1,335,079 220,362
Net realized capital gains (losses) (1,942) 330,024 195,848 4,278 (60,167)
Fee income 2,111,801 938,336 125,179 0 0
Other income 24,550 1,269 15,119 45,010 18,890
----------- ----------- ---------- ---------- ----------
Total revenues $28,284,411 $13,817,014 $7,378,962 $4,176,072 $2,294,219
=========== =========== ========== ========== ==========
</TABLE>

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<PAGE> 39
BENEFITS AND EXPENSES:
<TABLE>
<S> <C> <C> <C> <C> <C>
Return credited to contractowners (516,730) 252,132 560,243 235,470 454,212
Annuity benefits 369,652 383,515 276,997 107,536 16,425
Increase in annuity policy reserves 5,766,003 1,208,454 1,331,278 2,045,722 1,253,859
Underwriting, acquisition and
other insurance expenses 18,942,720 9,547,951 11,338,765 7,294,400 6,796,317
Interest expense 3,615,845 187,156 0 0 0
-------------- -------------- ------------ ------------ ------------
Total benefits and expenses $ 28,177,490 $ 11,579,208 $ 13,507,283 $ 9,683,128 $ 8,520,813
============== ============== ============ ============ ============

Income tax $ 247,429 $ 182,965 $ 0 $ 0 $ 0
============== ============== ============ ============ ============

Net income (loss) $ (140,508) $ 2,054,841 $ (6,128,321) $ (5,507,056) $ (6,226,594)
============== ============== ============ ============ ============
BALANCE SHEET DATA:
Total Assets $2,864,416,329 $1,558,548,537 $552,345,206 $239,435,675 $76,259,603
============== ============== ============ ============ ===========

Surplus Notes $ 69,000,000 $ 20,000,000 $ 0 $ 0 $ 0
============== ============== ============ ============ ===========

Shareholder's Equity $ 52,205,524 $ 52,387,687 $ 46,332,846 $ 14,292,772 $12,848,857
============== ============== ============= ============ ===========
</TABLE>

*On annuity sales of $1,372,874,000, $890,640,000, $287,596,000, $141,017,000
and $53,218,000 during the years ended December 31, 1994, 1993, 1992, 1991, and
1990, respectively, with contractowner assets under management of
$2,661,161,000, $1,437,554,000, $495,176,000, $217,425,000 and $60,633,000 as
of December 31, 1994, 1993, 1992, 1991, and 1990 respectively.

The above selected financial data should be read in conjunction with the
financial statements and the notes thereto.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

RESULTS OF OPERATIONS: The Company's long term business plan
was developed reflecting the current sales and marketing approach. Sales
volume increased 54%, 210% and 104% in 1994, 1993, and 1992, respectively.
This was the fifth year of significant growth in sales volume for the Company.
Assets grew 84%, 182% and 131% in 1994, 1993 and 1992, respectively. These
increases were a direct result of the substantial sales volume increasing
separate account assets and deferred acquisition costs. Liabilities grew 87%,
198% and 125% in 1994, 1993 and 1992, respectively, as result of the reserves
required for the increased sales activity and also borrowing during 1994 and
1993 needed to fund the acquisition costs of the Company's variable annuity
business.

The Company experienced a net loss after tax in 1994, which was in excess of
plan. This loss is a result of additional reserving of approximately $4.6
million to cover the minimum death benefit exposure in the Company's annuity
contracts along with higher than expected general expenses relative to sales
volume. The additional reserve may be required from time to time, within the
variable annuity market place, and is a result of volatility in the financial
markets as it relates to the underlying separate account investments. The
Company achieved profits in 1993 of $2 million which was expected.

In 1992, the Company experienced a net loss after tax. Losses were anticipated
in the early years of operation, however 1992 was greater than anticipated, due
to management's decision to invest in developing proprietary distribution as
well as upgrading the core processing system.

Increasing volume of annuity sales results in higher assets under management.
The fees realized on assets under management has resulted in annuity charges
and fees to increase 111%, 143% and 263% in 1994, 1993 and 1992, respectively.

Net investment income increased 88%, decreased 22% and increased 23% in 1994,
1993 and 1992, respectively. The increase in 1994 is a result of the increase
in the Company's bonds and short-term investments, which were $33.6 million and
$29.1 million at December 31, 1994 and 1993, respectively. The decrease in
1993 is a result of the need to liquidate investments to support the cash needs
required to fund the acquisition costs on the variable annuity business.

Fee income has increased 125% and 650% in 1994 and 1993, respectively, as a
result of income from transfer agency type activities and fees for service in
support of marketing public mutual funds.

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<PAGE> 40
Return credited to contractowners represents revenues on the variable and
market value adjusted annuities offset by the benefit payments and change in
reserves required on this business. Also included are the benefit payments and
change in reserves on immediate annuity contracts without significant mortality
risks. The result for the year was better than anticipated due to separate
account investment return on the market value adjusted contracts being in
excess of the benefits and required reserves.

Annuity benefits represent payments on annuity contracts with mortality risks,
this being the immediate annuity with life contingencies and supplementary
contracts with life contingencies.

Increase in annuity policy reserves represent change in reserves for the
immediate annuity with life contingencies, supplementary contracts with life
contingencies and minimum death benefit. The significant increase in 1994
reflects the required increase in the minimum death benefit reserve on variable
annuity contracts. This increase covers the escalating death benefit in the
product which was further enhanced as a result of poor performance of the
underlying mutual funds within the variable annuity contracts.

Underwriting, acquisition and other insurance expenses are made up of $46.2
million of commissions and $26.2 million of general expenses offset by the net
capitalization of deferred acquisition costs totaling $53.7 million. This
compares to the same period last year of $36.7 million of commissions and $19.3
million of general expenses offset by the net capitalization of deferred
acquisition costs totaling $46.3 million.

Underwriting, acquisition and other insurance expenses in 1992 were made up of
$16.1 million of commissions and $15.5 million of general expenses offset by
the net capitalization of deferred acquisition costs totaling $20.3 million.

Interest expense increased $3.4 million over the previous year as a result of
the $69 million in surplus notes.

LIQUIDITY AND CAPITAL RESOURCES: The liquidity requirement of
the Company was met by cash from insurance operations, investment activities
and borrowings from its parent.

As previously stated, the Company had significant growth during 1994. The
sales volume of $1.372 billion was primarily (approximately 90%) variable
annuities which carry a contingent deferred sales charge. This type of product
causes a temporary cash strain in that 100% of the proceeds are invested in
separate accounts supporting the product leaving a cash (but not capital)
strain caused by the acquisition cost for the new business. This cash strain
required the Company to look beyond the insurance operations and investments of
the Company. During 1994, the Company borrowed an additional $49 million from
its parent in the form of surplus notes and extended the reinsurance agreement
(which was initiated in 1993) with a large reinsurer in support of its cash
needs. The Company also entered into a second reinsurance agreement effective
January 1, 1994. The reinsurance agreements are modified coinsurance
arrangements where the reinsurer shares in the experience of a specific book of
business. The income and expense items presented above are net of reinsurance.

The Company is reviewing various options to fund the cash strain anticipated
from the acquisition costs on the coming years' sales volume.

The tremendous growth of this young organization has depended on capital
support from its parent. In 1992 and 1993, the parent contributed the capital
needed to provide a capital base for the Company's planned future growth.

As of December 31, 1994 and December 31, 1993, shareholder's equity was
$52,205,524 and $52,387,687 respectively, which includes the carrying value of
the state insurance licenses in the amount of $5,012,500 and $5,162,500
respectively.

The Company has long term surplus notes with its parent and a short term
borrowing with an affiliate. No dividends have been paid to its parent
company.

SEGMENT INFORMATION: As of the date of this Prospectus, we
offered only variable and fixed deferred annuities and immediate annuities.

REINSURANCE: We have entered into two reinsurance agreements with a
large reinsurer. These reinsurance agreements are modified coinsurance
arrangements with the reinsurer sharing in the experience of a specific block
of business which includes the annuities described in this Prospectus.

RESERVES: We are obligated to carry on our statutory books, as
liabilities, actuarial reserves to meet our obligations on outstanding annuity
or life insurance contracts. This is required by the life insurance laws and
regulations in the jurisdictions in which we do business. Such reserves are
based on mortality and/or morbidity tables in general use in the United States.
In general,

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<PAGE> 41
reserves are computed amounts that, with additions from premiums to be
received, and with interest on such reserves compounded at certain assumed
rates, are expected to be sufficient to meet our policy obligations at their
maturities if death occurs in accordance with the mortality tables employed.
In the accompanying Financial Statements these reserves for policy obligations
are determined in accordance with generally accepted accounting principles and
are included in the liabilities of our separate accounts and the general
account liabilities for future benefits of annuity or life insurance contracts
we issue.

COMPETITION: We are engaged in a business that is highly competitive
due to the large number of insurance companies and other entities competing in
the marketing and sale of insurance products. There are approximately 2300
stock, mutual and other types of insurers in the life insurance business in the
United States.

EMPLOYEES: As of December 31, 1994, we had 158 direct salaried
employees. An affiliate, American Skandia Information Services and Technology
Corporation, formerly American Skandia Business Services Corporation, that
provides services almost exclusively to us, had 52 direct salaried employees.

REGULATION: We are organized as a Connecticut stock life insurance
company, and are subject to Connecticut law governing insurance companies. We
are regulated and supervised by the Connecticut Commissioner of Insurance. By
March 1 of every year, we must prepare and file an annual statement, in a form
prescribed by the Connecticut Insurance Department, which covers our operations
for the preceding calendar year, and must prepare and file our statement of
financial condition as of December 31 of such year. The Commissioner and his
or her agents have the right at all times to review or examine our books and
assets. A full examination of our operations will be conducted periodically
according to the rules and practices of the National Association of Insurance
Commissioners ("NAIC"). We are subject to the insurance laws and various
federal and state securities laws and regulations and to regulatory agencies,
such as the Securities and Exchange Commission (the "SEC") and the Connecticut
Banking Department, which administer those laws and regulations.

We can be assessed up to prescribed limits for policyholder losses incurred by
insolvent insurers under the insurance guaranty fund laws of most states. We
cannot predict or estimate the amount any such future assessments we may have
to pay. However, the insurance guaranty laws of most states provide for
deferring payment or exempting a company from paying such an assessment if it
would threaten such insurer's financial strength.

Several states, including Connecticut, regulate insurers and their affiliates
under insurance holding company laws and regulations. This applies to us and
our affiliates. Under such laws, inter-company transactions, such as dividend
payments to parent companies and transfers of assets, may be subject to prior
notice and approval, depending on factors such as the size of the transaction
in relation to the financial position of the companies.

Currently, the federal government does not directly regulate the business of
insurance. However, federal legislative, regulatory and judicial decisions and
initiatives often have significant effects on our business. Types of changes
that are most likely to affect our business include changes to: (a) the
taxation of life insurance companies; (b) the tax treatment of insurance
products; (c) the securities laws, particularly as they relate to insurance and
annuity products; (d) the "business of insurance" exemption from many of the
provisions of the anti-trust laws; (e) the barriers preventing most banks from
selling or underwriting insurance: and (f) any initiatives directed toward
improving the solvency of insurance companies. We would also be affected by
federal initiatives that have impact on the ownership of or investment in
United States companies by foreign companies or investors.

EXECUTIVE OFFICERS AND DIRECTORS:

Our executive officers and directors, their ages, positions with us and
principal occupations are indicated below. The immediately preceding work
experience is provided for officers that have not been employed by us or an
affiliate for at least five years as of the date of this Prospectus.

<TABLE>
<CAPTION>
Name/ Position with American Skandia
Age Life Assurance Corporation Principal Occupation
- --- -------------------------- --------------------
<S> <C> <C>
Alan Blank Vice President, Vice President,
46 National Sales Manager, National Sales Manager, Banking:
Banking American Skandia Life
Assurance Corporation
</TABLE>

Mr. Blank joined us in 1994. He previously held the position of
Vice-Chairman at Liberty Securities.

38
<PAGE> 42

<TABLE>
<S> <C> <C>
Gordon C. Boronow* President President and
42 and Chief Chief Operating Officer:
Operating Officer, American Skandia Life
Director (since July, 1991) Assurance Corporation

Nancy F. Brunetti Vice President, Vice President, Business and
33 Business and Application Application Development:
Development American Skandia Life
Assurance Corporation
</TABLE>

Ms. Brunetti joined us in 1992. She previously held the position
of Senior Business Analyst at Monarch Life Insurance Company.

<TABLE>
<S> <C> <C>
Malcolm M. Campbell Director Director of Operations,
39 (since April, 1991) Assurance and Financial
Services Division:
Skandia Insurance Company Ltd.

Jan R. Carendi* Chief Executive Executive Vice President and
50 Officer and Member of Corporate Management
Chairman of the Group: Skandia Insurance
Board of Directors Company Ltd.
Director (since May, 1988)

Lincoln R. Collins Senior Vice President, Senior Vice President,
35 Product Management Product Management:
American Skandia Life
Assurance Corporation

Gene Crawford Vice President, Vice President,
50 Human Resources Human Resources:
American Skandia Investment
Holding Corporation
</TABLE>

Ms. Crawford joined us in 1994. She previously held the position
of Vice President with Skandia Direct Operations Corporation.

<TABLE>
<S> <C> <C>
Henrik Danckwardt Director (since July, 1991) Director of Finance
42 and Administration,
Assurance and Financial
Services Division:
Skandia Insurance Company Ltd.

Wade A. Dokken Executive Vice President Executive Vice President
35 and Chief and Chief
Marketing Officer Marketing Officer:
Director (since July, 1991) American Skandia Life
Assurance Corporation;
President and
Chief Operating Officer:
American Skandia Marketing,
Incorporated
</TABLE>
- ----------------------------
*Trustees of American Skandia Trust, one of the underlying mutual funds in which
the Sub-accounts offered pursuant to this Prospectus invest.

39
<PAGE> 43
<TABLE>
<S> <C> <C>
Kevin J. Hart Vice President and Vice President and
40 National Sales Manager, National Sales Manager,
Wirehouses Wirehouses:
American Skandia Life
Assurance Corporation
</TABLE>

Mr. Hart joined us in 1993. He previously held the position of
Regional Vice President with G. T. Global.

<TABLE>
<S> <C> <C>
N. David Kuperstock Vice President, Vice President,
43 Product Development Product Development:
American Skandia Life
Assurance Corporation

Christopher J. Luise Vice President, Vice President,
28 Systems Management/ Systems Management/
Research and Development Research and Development:
American Skandia Life
Assurance Corporation
</TABLE>

Mr. Luise joined us in 1995. He previously held the position of Vice President
of Adnet Technologies, Inc.

<TABLE>
<S> <C> <C>
Thomas M. Mazzaferro Senior Vice President and Senior Vice President and
42 Chief Financial Officer, Chief Financial Officer:
Director (since October, 1994) American Skandia Life
Assurance Corporation

Dianne Michael Vice President, Vice President,
40 Concierge Desk Concierge Desk:
American Skandia Life
Assurance Corporation
</TABLE>

Ms. Michael joined us in 1995. She previously held the position
of Vice President with J. P. Morgan Investment Management Inc.

<TABLE>
<S> <C> <C>
Gunnar Moberg Director (since November, 1994) Director - Marketing and
41 Sales, Assurances and
Financial Services
Division: Skandia
Insurance Company Ltd.

M. Patricia Paez Assistant Vice President, Assistant Vice President,
35 and Corporate Secretary Corporate Secretary:
American Skandia Life
Assurance Corporation

Rodney D. Runestad Vice President and Vice President and
45 Valuation Actuary Valuation Actuary:
American Skandia Life
Assurance Corporation

Hayward Sawyer Vice President and Vice President and
50 National Sales Manager, National Sales Manager,
Financial Planners Financial Planners:
American Skandia Life
Assurance Corporation
</TABLE>

Mr. Sawyer joined us in 1994. He previously held the position of
Regional Vice President with AIM Distributors, Inc.

40
<PAGE> 44
<TABLE>
<S> <C> <C>
Robert B. Seaberg Vice President and Vice President and
47 National Marketing Director National Marketing Director:
American Skandia Life
Assurance Corporation
</TABLE>

Mr. Seaberg joined us in 1993. He previously held the position of
Senior Vice President with USF&G Investor Life Services.

<TABLE>
<S> <C> <C>
Todd L. Slade Vice President, Vice President,
37 Applications Applications Development:
Development American Skandia Life
Assurance Corporation

Anders O. Soderstrom Director (since President and
35 October, 1994) Chief Operating Officer:
American Skandia Information
Services and Technology Corporation

Amanda C. Sutyak Executive Vice Executive Vice President
37 President and and Deputy Chief
Deputy Chief Operating Officer:
Operating Officer, American Skandia Life
Director (since Assurance Corporation
July, 1991)

C. Ake Svensson Treasurer, Vice President, Treasurer
44 Director (since and Corporate Controller:
December, 1994) American Skandia Investment
Holding Corporation

Bayard F. Tracy Senior Vice Senior Vice President,
47 President, Institutional Sales and Marketing:
Institutional Sales American Skandia Life
and Marketing, Assurance Corporation
Director (since
October, 1994)

Jeffrey M. Ulness Vice President, Vice President,
35 Securities and Securities and Marketing Counsel:
Marketing Counsel American Skandia Life
Assurance Corporation
</TABLE>

Mr. Ulness joined us in 1994. He previously held positions of Counsel
at North American Security Life Insurance Company from March, 1991 to July,
1994 and Associate at LeBoeuf, Lamb, Leiby, Green and McRae, L.L.P. from
January, 1990 to March 1991.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE: The summary table below
summarizes the compensation payable to our Chief Executive Officer and to the
most highly compensated of our executive officers whose compensation exceeded
$100,000 in the fiscal year immediately preceding the date of this Prospectus.

41
<PAGE> 45
<TABLE>
<CAPTION>
Name and Principal Annual Annual Other Annual
Position Year Salary Bonus Compensation
($) ($) ($)
<S> <C> <C> <C> <C>
Jan R. Carendi - 1994 $170,569
Chief Executive 1993 214,121
Officer 1992 124,078 0 $46,803

Alan Blank - 1994 $265,125
Vice President and 1993 0
National Sales Manager, 1992 0
Banking

Wade A. Dokken - 1994 $558,299
Executive Vice President 1993 318,637
and Chief Marketing 1992 343,975
Officer

Kevin J. Hart 1994 $671,804
Vice President and 1993 334,992
National Sales Manager, 1992 0
Wirehouses

Robert Seaberg 1994 $207,625
Vice President, 1993 54,075 0 $21,575
Marketing 1992 0
</TABLE>

LONG-TERM INCENTIVE PLANS - AWARDS IN THE LAST FISCAL YEAR:
The following table provides information regarding our long- term incentive
plan. Units are awarded to executive officers and other personnel. The table
shows units awarded to our Chief Executive Officer and the most highly
compensated of our executive officers whose compensation exceeded $100,000 in
the fiscal year immediately preceding the date of this Prospectus. This
program is designed to induce participants to remain with the company over long
periods of time and to tie a portion of their compensation to the fortunes of
the company. Currently, the program consists of multiple plans. A new plan
may be instituted each year. Participants are awarded units at the beginning
of a plan. Generally, participants must remain employed by the company or its
affiliates at the time such units are payable in order to receive any payments
under the plan. There are certain exceptions, such as in cases of retirement
or death.

Changes in the value of units reflect changes in the "embedded value" of the
company. "Embedded value" is the net asset value of the company (valued at
market value and not including the present value of future profits), plus the
present value of the anticipated future profits (valued pursuant to state
insurance law) on its existing contracts. Units will not have any value for
participants if the embedded value does not increase by certain target
percentages during the first four years of a plan. The target percentages may
differ between each plan. Any amounts available under a plan are paid out in
the fifth through eighth years of a plan. Payments are postponed if the
payment would exceed 20% of any profit (as determined under state insurance
law) earned by the company in the prior fiscal year. Amounts otherwise payable
as of the end of 1994 were so postponed. The amount to be received by a
participant at the time any payment is due will be the then current number of
units payable multiplied by the then current value of such units.

<TABLE>
<CAPTION>
--------Estimated Future Payouts--------
Name Number of Units Period Until Payout Threshold Target Maximum
(#) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
Jan R. Carendi 70,000 Various $207,830
Alan Blank 4,583 Various 0
Wade A. Dokken 64,270 Various $542,495
Kevin J. Hart 15,500 Various $14,738
Robert Seaberg 5,000 Various 0

</TABLE>

42
<PAGE> 46
COMPENSATION OF DIRECTORS: The following directors were
compensated as shown below in 1994:

<TABLE>
<S> <C> <C> <C>
Malcolm M. Campbell $3,500 Gunnar Moberg $1,250
Henrik Danckwardt $4,000
</TABLE>

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION:
The compensation committee of our board of directors as of December 31, 1994
consisted of Malcolm M. Campbell and Henrik Danckwardt.

CERTAIN TAX CONSIDERATIONS: The following is a brief summary of certain
Federal income tax laws as they are currently interpreted. No one can be
certain that the laws or interpretations will remain unchanged or that agencies
or courts will always agree as to how the tax law or regulations are to be
interpreted. This discussion is not intended as tax advice. You may wish to
consult a professional tax advisor for tax advice as to your particular
situation.

OUR TAX CONSIDERATIONS: We are taxed as a life insurance company
under Part I, subchapter L, of the Code.

TAX CONSIDERATIONS RELATING TO YOUR ANNUITY: Section 72 of the Code
governs the taxation of annuities in general. Taxation of an annuity is
largely dependent upon: (a) whether it is used in a qualified pension or
profit sharing plan or other retirement arrangement eligible for special
treatment under the Code; and (b) the status of the beneficial owner as either
a natural or non-natural person (when the annuity is not used in a retirement
plan eligible for special tax treatment). Non-natural persons include
corporations, trusts, and partnerships, except where these entities own an
annuity for the benefit of natural persons. Natural persons are individuals.

NON-NATURAL PERSONS: Any increase during a tax year in the
value of an annuity if not used in a retirement plan eligible for special
treatment under the Code is currently includible in the gross income of a
non-natural person that is the contractholder. There are exceptions if an
annuity is held by: (a) a structured settlement company; (b) an employer with
respect to a terminated pension plan; (c) entities other than employers, such
as a trust, holding an annuity as an agent for a natural person; or (d) a
decedent's estate by reason of the death of the decedent.

NATURAL PERSONS: Increases in the value of an annuity when
the contractholder is a natural person generally are not taxed until
distribution occurs. Distribution can be in a lump sum payment or in annuity
payments under the annuity option elected. Certain other transactions may be
deemed to be a distribution. The provisions of Section 72 of the Code
concerning these distributions are summarized briefly below.

DISTRIBUTIONS: Distributions received before the annuity
payments begin are treated as being derived first from "income on the contract"
and includible in gross income. The amount of the distribution exceeding
"income on the contract" is not included in gross income. "Income on the
contract" for an annuity is computed by subtracting from the value of all
"related contracts" (our term, discussed below) the taxpayer's "investment in
the contract": an amount equal to total purchase payments for all "related
contracts" less any previous distributions or portions of such distributions
from such "related contracts" not includible in gross income. "Investment in
the contract" may be affected by whether an annuity or any "related contract"
was purchased as part of a tax-free exchange of life insurance or annuity
contracts under Section 1035 of the Code.

"Related contracts" may mean all annuity contracts or certificates evidencing
participation in a group annuity contract for which the taxpayer is the
beneficial owner and which are issued by the same insurer within the same
calendar year, irrespective of the named annuitants. It is clear that "related
contracts" include contracts prior to when annuity payments begin. However,
there may be circumstances under which "related contracts" may include
contracts recognized as immediate annuities under state insurance law or
annuities for which annuity payments have begun. In a ruling addressing the
applicability of a penalty on distributions, the Internal Revenue Service
treated distributions from a contract recognized as an immediate annuity under
state insurance law like distributions from a deferred annuity. The situation
addressed by such ruling included the fact that: (a) the immediate annuity was
obtained pursuant to an exchange of contracts; and (b) the purchase payments
for the exchanged contract were contributed more than one year prior to the
first annuity payment payable under the immediate annuity. This ruling also
may or may not imply that annuity payments from a deferred annuity on or after
its annuity date may be treated the same as distributions prior to the annuity
date if such deferred annuity was: (a) obtained pursuant to an exchange of
contracts; and (b) the purchase payments for the exchanged contract were made
or may be deemed to have been made more than one year prior to the first
annuity payment.

If "related contracts" include immediate annuities or annuities for which
annuity payments have begun, then "related contracts" would have to be taken
into consideration in determining the taxable portion of each annuity payment
(as outlined in the "Annuity Payments" subsection below) as well as in
determining the taxable portion of distributions from an annuity or any "related
contracts" before annuity payments have begun. We cannot guarantee that
immediate annuities or annuities for which annuity

43
<PAGE> 47
payments have begun could not be deemed to be "related contracts". You are
particularly cautioned to seek advice from your own tax advisor on this matter.

ASSIGNMENTS AND PLEDGES: Any assignment or pledge of any
portion of the value of an annuity before annuity payments have begun are
treated as a distribution subject to taxation under the distribution rules set
forth above. Any gain in an annuity subsequent to the assignment or pledge of
an entire annuity while such assignment or pledge remains in effect is treated
as "income on the contract" in the year in which it is earned. For annuities
not issued for use as qualified plans (see "Tax Considerations When Using
Annuities in Conjunction with Qualified Plans"), the cost basis of the annuity
is increased by the amount of any assignment or pledge includible in gross
income. The cost basis is not affected by any repayment of any loan for which
the annuity is collateral or by payment of any interest thereon.

PENALTY ON DISTRIBUTIONS: Subject to certain exceptions, any
distribution is subject to a penalty equal to 10% of the amount includible in
gross income. This penalty does not apply to certain distributions, including:
(a) distributions made on or after the taxpayer's age 59 1/2; (b) distributions
made on or after the death of the holder of the contract, or, where the holder
of the contract is not a natural person, the death of the annuitant; (c)
distributions attributable to the taxpayer's becoming disabled; (d)
distributions which are part of a scheduled series of substantially equal
periodic payments for the life (or life expectancy) of the taxpayer (or the
joint lives of the taxpayer and the taxpayer's Beneficiary); (e) distributions
of amounts which are allocable to "investments in the contract" made prior to
August 14, 1982; (f) payments under an immediate annuity as defined in the
Code; (g) distributions under a qualified funding asset under Code Section
130(d); or (h) distributions from an annuity purchased by an employer on the
termination of a qualified pension plan that is held by the employer until the
employee separates from service.

Any modification, other than by reason of death or disability, of distributions
which are part of a scheduled series of substantially equal periodic payments
as noted in (d), above, that occur before the taxpayer's age 59 1/2 or within 5
years of the first of such scheduled payments will result in the requirement to
pay the taxes that would have been due had the payments been treated as subject
to tax in the years received, plus interest for the deferral period. It is our
understanding that the Internal Revenue Service does not consider a scheduled
series of distributions to qualify under (d), above, if the holder of the
annuity retains the right to modify such distributions at will, even if such
right is not exercised or, for a variable annuity, if the distributions are not
based on a substantially equal number of Units, rather than a substantially
equal dollar amount.

The Internal Revenue Service has ruled that the exception to the 10% penalty
described above for "non-qualified" immediate annuities as defined under the
Code may not apply to annuity payments under a contract recognized as an
immediate annuity under state insurance law obtained pursuant to an exchange of
contracts if (a) purchase payments for the exchanged contract were contributed
or deemed to be contributed more than one year prior to the first annuity
payment payable under the immediate annuity; and (b) the annuity payments under
the immediate annuity do not meet the requirements of any other exception to
the 10% penalty. This ruling may or may not imply that the exception to the
10% penalty may not apply to annuity payments paid pursuant to a deferred
annuity obtained pursuant to an exchange contract if: (a) purchase payments
for the exchanged contract were contributed to or may be deemed to be
contributed more than one year prior to the first annuity payment pursuant to
the deferred annuity contract; or (b) the annuity payments pursuant to the
deferred annuity do not meet the requirements of any other exception to the 10%
penalty.

ANNUITY PAYMENTS: The taxable portion of each payment is
determined by a formula which establishes the ratio that "investment in the
contract" bears to the total value of annuity payments to be made. However,
the total amount excluded under this ratio is limited to the "investment in the
contract". The formula differs between fixed and variable annuity payments.
Where the annuity payments cease because of the death of the person upon whose
life payments are based and, as of the date of death, the amount of annuity
payments excluded from taxable income by the exclusion ratio does not exceed
the investment in the contract, then the remaining portion of unrecovered
investment is allowed as a deduction in the tax year of such death.

GIFTS: The gift of an annuity to other than the spouse of the
contract holder (or former spouse incident to a divorce) is treated for tax
purposes as a distribution.

TAX FREE EXCHANGES: Section 1035 of the Code permits certain
tax-free exchanges of a life insurance, annuity or endowment contract for an
annuity. If an annuity is obtained by a tax-free exchange of a life insurance,
annuity or endowment contract purchased prior to August 14, 1982, then any
distributions other than as annuity payments which do not exceed the portion of
the "investment in the contract" (purchase payments made into the other
contract, less prior distributions) prior to August 14, 1982, are not included
in taxable income. In all other respects, the general provisions of the Code
apply to distributions from annuities obtained as part of such an exchange.

44
<PAGE> 48
TRANSFERS BETWEEN INVESTMENT OPTIONS: Transfers between
investment options are not subject to taxation. The Treasury Department may
promulgate guidelines under which a variable annuity will not be treated as an
annuity for tax purposes if persons with ownership rights have excessive
control over the investments underlying such variable annuity. Such guidelines
may or may not address the number of investment options or the number of
transfers between investment options offered under a variable annuity. It is
not known whether such guidelines, if in fact promulgated, would have
retroactive effect. It is also not known what effect, if any, such guidelines
may have on transfers between the investment options of the Annuity offered
pursuant to this Prospectus. We will take any action, including modifications
to your Annuity or the Sub-accounts, required to comply with such guidelines if
promulgated.

GENERATION-SKIPPING TRANSFERS: Under the Code certain taxes
may be due when all or part of an annuity is transferred to or a death benefit
is paid to an individual two or more generations younger than the contract
holder. These taxes tend to apply to transfers of significantly large dollar
amounts. We may be required to determine whether a transaction must be treated
as a direct skip as defined in the Code and the amount of the resulting tax.
If so required, we will deduct from your Annuity or from any applicable payment
to be treated as a direct skip any amount we are required to pay as a result of
the transaction.

DIVERSIFICATION: Section 817(h) of the Code provides that a
variable annuity contract, in order to qualify as an annuity, must have an
"adequately diversified" segregated asset account (including investments in a
mutual fund by the segregated asset account of insurance companies). The
Treasury Department's regulations prescribe the diversification requirements
for variable annuity contracts. We believe the underlying mutual fund
portfolios should comply with the terms of these regulations.

FEDERAL INCOME TAX WITHHOLDING: Section 3405 of the Code
provides for Federal income tax withholding on the portion of a distribution
which is includible in the gross income of the recipient. Amounts to be
withheld depend upon the nature of the distribution. However, under most
circumstances a recipient may elect not to have income taxes withheld or have
income taxes withheld at a different rate by filing a completed election form
with us.

Certain distributions, including rollovers from most retirements plans, may be
subject to automatic 20% withholding for Federal income taxes. This will not
apply to: (a) any portion of a distribution paid as Minimum Distributions; (b)
direct transfers to the trustee of another retirement plan; (c) distributions
from an individual retirement account or individual retirement annuity; (d)
distributions made as substantially equal periodic payments for the life or
life expectancy of the participant in the retirement plan or the life or life
expectancy of such participant and his or her designated beneficiary under such
plan; and (e) certain other distributions where automatic 20% withholding may
not apply.

TAX CONSIDERATIONS WHEN USING ANNUITIES IN CONJUNCTION WITH QUALIFIED
PLANS: There are various types of qualified plans for which an annuity may be
suitable. Benefits under a qualified plan may be subject to that plan's terms
and conditions irrespective of the terms and conditions of any annuity used to
fund such benefits ("qualified contract"). We have provided below general
descriptions of the types of qualified plans in conjunction with which we may
issue an Annuity. These descriptions are not exhaustive and are for general
informational purposes only. We are not obligated to make or continue to make
new Annuities available for use with all the types of qualified plans shown
below.

The tax rules regarding qualified plans are complex. The application of these
rules depend on individual facts and circumstances. Before purchasing an
Annuity for use in funding a qualified plan, you should obtain competent tax
advice, both as to the tax treatment and suitability of such an investment.

Qualified contracts include special provisions changing or restricting certain
rights and benefits otherwise available to non-qualified annuities. You should
read your Annuity carefully to review any such changes or limitations. The
changes and limitations may include, but may not be limited to restrictions on
ownership, transferability, assignability, contributions, distributions, as
well as reductions to the minimum allowable purchase payment for an annuity and
any subsequent annuity you may purchase for use as a qualified contract.
Additionally, various penalty and excise taxes may apply to contributions or
distributions made in violation of applicable limitations.

INDIVIDUAL RETIREMENT PROGRAMS: Eligible individuals may
maintain an individual retirement account or individual retirement annuity
("IRA"). Subject to limitations, contributions of certain amounts may be
deductible from gross income. Purchasers of IRAs are to receive a special
disclosure document, which describes limitations on eligibility, contributions,
transferability and distributions. It also describes the conditions under
which distributions from IRAs and other qualified plans may be rolled over or
transferred into an IRA on a tax-deferred basis. Eligible employers that meet
specified criteria may establish simplified employee pensions for employees
using the employees' IRAs. These arrangements are known as SEP-IRAs. Employer
contributions that may be made to SEP-IRAs are larger than the amounts that may
be contributed to other IRAs, and may be deductible to the employer.

45
<PAGE> 49

TAX SHELTERED ANNUITIES: A tax sheltered annuity ("TSA")
under Section 403(b) of the Code is a contract into which contributions may be
made for the benefit of their employees by certain qualifying employers:
public schools and certain charitable, educational and scientific
organizations. Such contributions are not taxable to the employee until
distributions are made from the TSA. The Code imposes limits on contributions,
transfers and distributions. Nondiscrimination requirements apply as well.

CORPORATE PENSION AND PROFIT-SHARING PLANS: Annuities may be
used to fund employee benefits of various retirement plans established by
corporate employers. Contributions to such plans are not taxable to the
employee until distributions are made from the retirement plan. The Code
imposes limitations on contributions and distributions. The tax treatment of
distributions is subject to special provisions of the Code, and also depends on
the design of the specific retirement plan. There are also special
requirements as to participation, nondiscrimination, vesting and
nonforfeitability of interests.

H.R. 10 PLANS: Annuities may also be used to fund benefits of
retirement plans established by self-employed individuals for themselves and
their employees. These are commonly known as "H.R. 10 Plans" or "Keogh Plans".
These plans are subject to most of the same types of limitations and
requirements as retirement plans established by corporations. However, the
exact limitations and requirements may differ from those for corporate plans.

TAX TREATMENT OF DISTRIBUTIONS FROM QUALIFIED ANNUITIES: A
10% penalty tax applies to the taxable portion of a distribution from a
qualified contract unless one of the following exceptions apply to such
distribution: (a) it is part of a properly executed transfer to another IRA,
an individual retirement account or another eligible qualified plan; (b) it
occurs on or after the taxpayer's age 59 1/2; (c) it is subsequent to the death
or disability of the taxpayer (for this purpose disability is as defined in
Section 72(m)(7) of the Code); (d) it is part of substantially equal periodic
payments to be paid not less frequently than annually for the taxpayer's life
or life expectancy or for the joint lives or life expectancies of the taxpayer
and a designated beneficiary; (e) it is subsequent to a separation from service
after the taxpayer attains age 55; (f) it does not exceed the employee's
allowable deduction in that tax year for medical care; and (g) it is made to an
alternate payee pursuant to a qualified domestic relations order. The
exceptions stated above in (e), (f) and (g) do not apply to IRAs.

SECTION 457 PLANS: Under Section 457 of the Code, deferred
compensation plans established by governmental and certain other tax exempt
employers for their employees may invest in annuity contracts. The Code limits
contributions and distributions, and imposes eligibility requirements as well.
Contributions are not taxable to employees until distributed from the plan.
However, plan assets remain the property of the employer and are subject to the
claims of the employer's general creditors until such assets are made available
to participants or their beneficiaries.

SALE OF THE ANNUITIES: American Skandia Marketing, Incorporated ("ASM, Inc."),
formerly Skandia Life Equity Sales Corporation, a wholly- owned subsidiary of
American Skandia Investment Holding Corporation, acts as the principal
underwriter of the Annuities. ASM, Inc.'s principal business address is One
Corporate Drive, Shelton, Connecticut 06484. ASM, Inc. is a member of the
National Association of Securities Dealers, Inc. ("NASD").

DISTRIBUTION: ASM, Inc. will enter into distribution agreements with
certain broker-dealers registered under the Securities and Exchange Act of 1934
or with entities which may otherwise offer the Annuities that are exempt from
such registration. Under such distribution agreements such broker-dealers or
entities may offer Annuities to persons who have established an account with
the broker- dealer or entity. In addition, ASM, Inc. may offer Annuities
directly to potential purchasers. The maximum concession to be paid on
premiums received is 6.5%. We reserve the right to base concessions from
time-to-time on the investment options chosen by Annuity Owners, including
investment options that may be deemed our "affiliates" or "affiliates" of ASM,
Inc. under the Investment Company Act of 1940 ("1940 Act").

ADVERTISING: We may advertise certain information regarding the
performance of the investment options. Details on how we calculate performance
measures for the Sub-accounts are found in the Statement of Additional
Information. This performance information may help you review the performance
of the investment options and provide a basis for comparison with other
annuities. This information may be less useful when comparing the performance
of the investment options with other savings or investment vehicles. Such
other investments may not provide some of the benefits of annuities, or may not
be designed for long-term investment purposes. Additionally other savings or
investment vehicles may not be treated like annuities under the Code.

The information we may advertise regarding the Fixed Allocations may include
the then current interest rates we are crediting to new Fixed Allocations.
Information on Current Rates will be as of the date specified in such
advertisement. Rates will be included in advertisements to the extent
permitted by law. Given that the actual rates applicable to any Fixed
Allocation are as of the date of

46
<PAGE> 50
any such Fixed Allocation's Guarantee Period begins, the rate credited to a
Fixed Allocation may be more or less than those quoted in an advertisement.

Performance information on the Sub-accounts is based on past performance only
and is no indication of future performance. Performance of the Sub-accounts
should not be considered a representation of the performance of such
Sub-accounts in the future. Performance of the Sub- accounts is not fixed.
Actual performance will depend on the type, quality and, for some of the
Sub-accounts, the maturities of the investments held by the underlying mutual
fund portfolios and upon prevailing market conditions and the response of the
underlying mutual fund portfolios to such conditions. Actual performance will
also depend on changes in the expenses of the underlying mutual fund
portfolios. Such changes are reflected, in turn, in the Sub-accounts which
invests in such underlying mutual fund portfolio. In addition, the amount of
charges assessed against each Sub-account will affect performance.

Some of the underlying mutual fund portfolios existed prior to the inception of
these Sub-accounts. Performance quoted in advertising regarding such
Sub-accounts may indicate periods during which the Sub-accounts have been in
existence but prior to the initial offering of the Annuities, or periods during
which the underlying mutual fund portfolios have been in existence, but the
Sub-accounts have not. Such hypothetical performance is calculated using the
same assumptions employed in calculating actual performance since inception of
the Sub-accounts.

As part of any advertisement of Standard Total Return, we may advertise the
"Non-standard Total Return" of the Sub-accounts. Non-standard Total Return
does not take into consideration the Annuity's contingent deferred sales
charge.

Advertisements we distribute may also compare the performance of our
Sub-accounts with: (a) certain unmanaged market indices, including but not
limited to the Dow Jones Industrial Average, the Standard & Poor's 500, the
Shearson Lehman Bond Index, the Frank Russell non-U.S. Universal Mean, the
Morgan Stanley Capital International Index of Europe, Asia and Far East Funds,
and the Morgan Stanley Capital International World Index; and/or (b) other
management investment companies with investment objectives similar to the
mutual fund or portfolio underlying the Sub-accounts being compared. This may
include the performance ranking assigned by various publications, including but
not limited to the Wall Street Journal, Forbes, Fortune, Money, Barron's,
Business Week, USA Today and statistical services, including but not limited to
Lipper Analytical Services Mutual Funds Survey, Lipper Annuity and Closed End
Survey, the Variable Annuity Research Data Survey, SEI, Morningstar Mutual Fund
Sourcebook and the Morningstar Variable Annuity/Life Sourcebook.

American Skandia Life Assurance Corporation may advertise its rankings and/or
ratings by independent financial ratings services. Such rankings may help you
in evaluating our ability to meet our obligations in relation to Fixed
Allocations, pay minimum death benefits, pay annuity payments or administer
Annuities. Such rankings and ratings do not reflect or relate to the
performance of Separate Account B.

OTHER MATTERS: Outlined below are certain miscellaneous matters you should
know before investing in an Annuity.

DEFERRAL OF TRANSACTIONS: We may defer any distribution or transfer
from a Fixed Allocation or an annuity payout for a period not to exceed the
lesser of 6 months or the period permitted by law. If we defer a distribution
or transfer from any Fixed Allocation or any annuity payout for more than
thirty days or less where required by law, we pay interest at the mimimum rate
required by law but not less than 3% per year on the amount deferred. We may
defer payment of proceeds of any distribution from any Sub-account or any
transfer from a Sub-account for a period not to exceed 7 calendar days from the
date the transaction is effected. Any deferral period begins on the date such
distribution or transfer would otherwise have been transacted (see "Pricing of
Transfers and Distributions").

All procedures, including payment, based on the valuation of the Sub-accounts
may be postponed during the period: (1) the New York Stock Exchange is closed
(other than customary holidays or weekends), or trading on the New York Stock
Exchange is restricted as determined by the SEC; (2) the SEC permits
postponement and so orders; or (3) the SEC determines that an emergency exists
making valuation or disposal of securities not reasonably practical.

RESOLVING MATERIAL CONFLICTS: Underlying mutual funds or portfolios
may be available to registered separate accounts offering either or both life
and annuity contracts of insurance companies not affiliated with us. We also
may offer life insurance and/or annuity contracts that offer different variable
investment options from those offered under this Annuity, but which invest in
the same underlying mutual funds or portfolios. It is possible that
differences might arise between our Separate Account B and one or more accounts
of other insurance companies which participate in a portfolio. It is also
possible that differences might arise between a Sub-account offered under this
Annuity and variable investment options offered under different life insurance
policies or annuities we offer, even though such different variable investment
options invest in the same underlying mutual fund or portfolio. In some cases,
it is possible that the differences could be considered "material conflicts."
Such a "material conflict" could also arise

47
<PAGE> 51
due to changes in the law (such as state insurance law or Federal tax law)
which affect either these different life and annuity separate accounts or
differing life insurance policies and annuities. It could also arise by reason
of differences in voting instructions of persons with voting rights under our
policies and/or annuities and those of other companies, persons with voting
rights under annuities and those with rights under life policies, or persons
with voting rights under one of our life policies or annuities with those under
other life policies or annuities we offer. It could also arise for other
reasons. We will monitor events so we can identify how to respond to such
conflicts. If such a conflict occurs, we will take the necessary action to
protect persons with voting rights under our life policies or annuities
vis-a-vis those with rights under life policies or annuities offered by other
insurance companies. We will also take the necessary action to treat equitably
persons with voting rights under this Annuity and any persons with voting
rights under any other life policy or annuity we offer.

MODIFICATION: We reserve the right to any or all of the following:
(a) combine a Sub-account with other Sub-accounts; (b) combine Separate Account
B or a portion thereof with other "unitized" separate accounts; (c) terminate
offering certain Guarantee Periods for new or renewing Fixed Allocations; (d)
combine Separate Account D with other "non-unitized" separate accounts; (e)
deregister Separate Account B under the 1940 Act; (f) operate Separate Account
B as a management investment company under the 1940 Act or in any other form
permitted by law; (g) make changes required by any change in the Securities Act
of 1933, the Exchange Act of 1934 or the 1940 Act; (h) make changes that are
necessary to maintain the tax status of your Annuity under the Code; and (i)
make changes required by any change in other Federal or state laws relating to
retirement annuities or annuity contracts.

Also, from time to time, we may make additional Sub-accounts available to you.
These Sub-accounts will invest in underlying mutual funds or portfolios of
underlying mutual funds we believe to be suitable for the Annuity. We may or
may not make a new Sub-account available to invest in any new portfolio of one
of the current underlying mutual funds should such a portfolio be made
available to Separate Account B.

We may eliminate Sub-accounts, combine two or more Sub-accounts or substitute
one or more new underlying mutual funds or portfolios for the one in which a
Sub-account is invested. Substitutions may be necessary if we believe an
underlying mutual fund or portfolio no longer suits the purpose of the Annuity.
This may happen due to a change in laws or regulations, or a change in the
investment objectives or restrictions of an underlying mutual fund or
portfolio, or because the underlying mutual fund or portfolio is no longer
available for investment, or for some other reason. We would obtain prior
approval from the insurance department of our state of domicile, if so required
by law, before making such a substitution, deletion or addition. We also would
obtain prior approval from the SEC so long as required by law, and any other
required approvals before making such a substitution, deletion or addition.

We reserve the right to transfer assets of Separate Account B, which we
determine to be associated with the class of contracts to which your Annuity
belongs, to another "unitized" separate account. We also reserve the right to
transfer assets of Separate Account D which we determine to be associated with
the class of contracts to which your annuity belongs, to another "non-unitized"
separate account. We notify you (and/or any payee during the payout phase) of
any modification to your Annuity. We may endorse your Annuity to reflect the
change.

MISSTATEMENT OF AGE OR SEX: If there has been a misstatement of the
age and/or sex of any person upon whose life annuity payments or the minimum
death benefit are based, we make adjustments to conform to the facts. As to
annuity payments: (a) any underpayments by us will be remedied on the next
payment following correction; and (b) any overpayments by us will be charged
against future amounts payable by us under your Annuity.

ENDING THE OFFER: We may limit or discontinue offering Annuities.
Existing Annuities will not be affected by any such action.

INDEMNIFICATION: Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors, officers or
persons controlling the registrant pursuant to the foregoing provisions, the
registrant has been informed that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is therefore unenforceable.

LEGAL PROCEEDINGS: As of the date of this Prospectus, neither we nor
ASM, Inc. were involved in any litigation outside the ordinary course of
business, and know of no material claims.

48
<PAGE> 52
CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION: The following are the
contents of the Statement of Additional Information:

(1) General Information Regarding American Skandia Life Assurance
Corporation

(2) Principal Underwriter

(3) Calculation of Performance Data

(4) Unit Price Determinations

(5) Calculating the Market Value Adjustment

(6) Independent Auditors

(7) Legal Experts

(8) Appendix A - Financial Statements for Separate Account B
(Class 1 Sub-accounts)

FINANCIAL STATEMENTS: The financial statements which follow in Appendix A are
those of American Skandia Life Assurance Corporation for the years ended
December 31, 1994, 1993 and 1992, respectively. Also included are the
unaudited financial statements for the period ending _______, 1995. Financial
statements for the Class 1 Sub-accounts of Separate Account B are found in the
Statement of Additional Information.

49
<PAGE> 53

APPENDIXES

APPENDIX A FINANCIAL STATEMENTS FOR AMERICAN SKANDIA LIFE ASSURANCE
CORPORATION

APPENDIX B UNDERLYING MUTUAL FUNDS' PORTFOLIO INVESTMENT OBJECTIVES AND
POLICIES

50
<PAGE> 54

APPENDIX A

FINANCIAL STATEMENTS FOR AMERICAN SKANDIA LIFE ASSURANCE CORPORATION

<PAGE> 55

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholder of
American Skandia Life Assurance Corporation
Shelton, Connecticut

We have audited the accompanying statements of financial condition of American
Skandia Life Assurance Corporation (a wholly-owned subsidiary of its ultimate
parent, Skandia Insurance Company Ltd.) as of December 31, 1994 and 1993, and
the related statements of operations, shareholder's equity, and cash flows for
each of the three years in the period ended December 31, 1994. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, such financial statements present fairly, in all material
respects, the financial position of American Skandia Life Assurance Corporation
as of December 31, 1994 and 1993, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 1994 in
conformity with generally accepted accounting principles.

DELOITTE & TOUCHE LLP
New York, New York
March 15, 1995

2
<PAGE> 56

AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of Skandia Insurance Company

STATEMENTS OF FINANCIAL CONDITION

<TABLE>
<CAPTION>
AS OF DECEMBER 31,
1994 1993
--------------- ------------------

<S> <C> <C>
ASSETS
- ------

Investments:
Fixed maturities - at amortized cost $ 9,621,865 $ 9,664,709
Investment in mutual funds - at market value 840,637 0
Short-term investments - at amortized cost 24,000,000 19,400,000
--------------- ------------------
Total investments 34,462,502 29,064,709

Cash and cash equivalents 23,909,463 9,834,854
Accrued investment income 173,654 128,807
Deferred acquisition costs 174,009,609 90,023,536
Receivable from affiliates 459,960 728,095
State insurance licenses 5,012,500 5,162,500
Other assets 1,261,513 519,472
Separate account assets 2,625,127,128 1,423,086,564
--------------- ------------------

Total Assets $ 2,864,416,329 $ 1,558,548,537
=============== ==================

LIABILITIES AND SHAREHOLDER'S EQUITY
- ------------------------------------

LIABILITIES:
Reserve for future contractowner benefits $ 11,422,381 $ 4,323,811
Annuity policy reserves 24,054,255 18,049,652
Income tax payable 36,999 13,626
Accounts payable and accrued expenses 31,753,380 18,343,252
Payable to affiliates 261,552 272,908
Payable to reinsurer 40,105,406 11,550,216
Short-term borrowing-affiliate 10,000,000 10,000,000
Surplus notes 69,000,000 20,000,000
Deferred contract charges 449,704 520,821
Separate account liabilities 2,625,127,128 1,423,086,564
--------------- ------------------

Total Liabilities 2,812,210,805 1,506,160,850
--------------- ------------------

SHAREHOLDER'S EQUITY:
Common stock, $80 par, 25,000 shares
authorized, issued and outstanding 2,000,000 2,000,000
Additional paid-in capital 71,623,932 71,623,932
Unrealized investment gains and losses (41,655) 0
Accumulated deficit (21,376,753) (21,236,245)
--------------- ------------------

Total Shareholder's Equity 52,205,524 52,387,687
--------------- ------------------

Total Liabilities and Shareholder's Equity $ 2,864,416,329 $ 1,558,548,537
=============== ==================
</TABLE>

See notes to financial statements

3
<PAGE> 57
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
1994 1993 1992
-------------- -------------- ---------------

<S> <C> <C> <C>
REVENUES:
- --------
Net investment income $ 1,300,217 $ 692,758 $ 892,053
Annuity premium income 70,000 101,643 1,304,629
Annuity charges and fees 24,779,785 11,752,984 4,846,134
Net realized capital gains/(losses) (1,942) 330,024 195,848
Fee Income 2,111,801 938,336 125,179
Other 24,550 1,269 15,119
-------------- -------------- ---------------
Total Revenues 28,284,411 13,817,014 7,378,962
-------------- -------------- ---------------

BENEFITS AND EXPENSES:
- ---------------------
Benefits:
Return credited to contractowners (516,730) 252,132 560,243
Annuity benefits 369,652 383,515 276,997
Increase in annuity policy reserves 5,766,003 1,208,454 1,331,278
-------------- -------------- ---------------

5,618,925 1,844,101 2,168,518
-------------- -------------- ---------------

Expenses:
Underwriting, acquisition and other insurance expenses 18,792,720 9,397,951 11,188,765
Amortization of state insurance licenses 150,000 150,000 150,000
Interest expense 3,615,845 187,156 0
-------------- -------------- ---------------

22,558,565 9,735,107 11,338,765
-------------- -------------- ---------------

Total Benefits and Expenses 28,177,490 11,579,208 13,507,283
-------------- -------------- ---------------

Income (loss) from operations before federal income taxes 106,921 2,237,806 (6,128,321)

Income tax 247,429 182,965 0
-------------- -------------- ---------------

Net income (loss) $ (140,508) $ 2,054,841 $ (6,128,321)
============== ============== ===============
</TABLE>

See notes to financial statements

<PAGE> 58

AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

STATEMENTS OF SHAREHOLDER'S EQUITY

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
1994 1993 1992
---------------- --------------- ---------------

<S> <C> <C> <C>
Common stock, balance at beginning and end of year $ 2,000,000 $ 2,000,000 $ 2,000,000
---------------- --------------- ---------------
Additional paid-in capital:
Balance at beginning of year 71,623,932 67,623,932 29,455,537
Additional contributions 0 4,000,000 38,168,395
---------------- --------------- ---------------

Balance at end of year 71,623,932 71,623,932 67,623,932
---------------- --------------- ---------------

Unrealized investment gains and losses:
Balance at beginning of year 0 0 0
Change in unrealized investment gains and losses (41,655) 0 0
---------------- --------------- ---------------

Balance at end of year (41,655) 0 0
---------------- --------------- ---------------

Accumulated deficit:
Balance at beginning of year (21,236,245) (23,291,086) (17,162,765)
Net income (loss) (140,508) 2,054,841 (6,128,321)
---------------- --------------- ---------------

Balance at end of year (21,376,753) (21,236,245) (23,291,086)
---------------- --------------- ---------------

TOTAL SHAREHOLDER'S EQUITY $ 52,205,524 $ 52,387,687 $ 46,332,846
================ =============== ===============
</TABLE>

See notes to financial statements

5
<PAGE> 59

AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of Skandia Insurance Company Ltd.)

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
1994 1993 1992
--------------- --------------- -------------
<S> <C> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:

Net income (loss) $ (140,508) $ 2,054,841 $ (6,128,321)
Adjustments to reconcile net income (loss) to net cash used
in operating activities:
Increase in annuity policy reserves 6,004,603 4,223,289 4,642,056
Increase/(decrease) in policy and contract claims 0 (52,400) 52,400
Amortization of bond (discount)/premium 21,964 6,754 (3,028)
Amortization of state insurance licenses 150,000 150,000 150,000
Increase in receivables and other assets (473,906) (550,486) (368,781)
(Increase)/decrease in accrued investment income (44,847) 154,902 (117,211)
Increase in accounts payables and accrued expenses 13,422,145 13,939,151 2,183,766
Change in deferred acquisition costs (83,986,073) (57,387,042) (20,333,049)
Change in deferred contract charges (71,117) 13,898 79,549
Realized loss/(gain) on sale of investments 1,942 (330,024) (195,848)
--------------- --------------- -------------
Net cash used in operating activities (65,115,797) (37,777,117) (20,038,467)
--------------- --------------- -------------

CASH FLOW FROM INVESTING ACTIVITIES:

Purchase of fixed maturity investments (1,989,120) (6,847,630) (28,893,029)
Proceeds from sale and maturity of fixed maturity investments 2,010,000 10,971,574 25,076,925
Purchase of shares in mutual funds (922,822) 0 0
Proceeds from sale of shares in mutual funds 38,588 0 0
Purchase of short-term investments (513,100,000) (1,207,575,307) (226,075,687)
Sale of short-term investments 508,500,000 1,202,333,907 211,916,764
Investments in separate accounts (1,365,775,177) (890,125,018) (286,852,200)
--------------- --------------- -------------

Net cash used in investing activities (1,371,238,531) (891,242,474) (304,827,227)
--------------- --------------- -------------

CASH FLOW FROM FINANCING ACTIVITIES:

Capital contributions from parent 0 4,000,000 38,168,395
Surplus notes 49,000,000 20,000,000 0
Short-term borrowing 0 10,000,000 0
Increase in payable to reinsurer 28,555,190 11,550,216 0
Proceeds from annuity sales 1,372,873,747 890,639,947 287,595,902
--------------- --------------- -------------

Net cash provided by financing activities 1,450,428,937 936,190,163 325,764,297
--------------- --------------- -------------

Net increase in cash and cash equivalents 14,074,609 7,170,572 898,603

Cash and cash equivalents at beginning of year 9,834,854 2,664,282 1,765,679

Cash and cash equivalents at end of year $ 23,909,463 $ 9,834,854 $ 2,664,282
=============== =============== =============

SUPPLEMENTAL CASH FLOW DISCLOSURE:
Income taxes paid $ 161,398 $ 169,339 $ 0
=============== =============== =============

Interest paid $ 557,639 $ 111,667 $ 0
=============== =============== =============
</TABLE>

See notes to financial statements

6
<PAGE> 60

AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of
Skandia Insurance Company Ltd.)

NOTES TO FINANCIAL STATEMENTS

1. ORGANIZATION AND OPERATION

American Skandia Life Assurance Corporation (the "Company") is a
wholly-owned subsidiary of American Skandia Investment Holding
Corporation (the "Parent"), which in turn is a wholly-owned subsidiary
of Skandia Insurance Company Ltd., a Swedish corporation.

The Company develops annuity products and issues its products through
its affiliated broker/dealer company, Skandia Life Equity Sales
Corporation. The Company currently issues variable, fixed, market
value adjusted and immediate annuities.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Basis of Reporting

The accompanying financial statements have been prepared in
accordance with generally accepted accounting principles.

B. Investments

Investments in fixed maturities are reported at amortized cost.
Investments in mutual funds are reported at market value.
Short-term investments are reported at cost which approximates
market value.

Realized gains and losses on disposal of investments are
determined by the specific identification method and are
included in revenues.

C. Cash Equivalents

The Company considers all highly liquid time deposits purchased
with a maturity of three months or less to be cash equivalents.

D. Licenses

Licenses to do business in all states have been capitalized and
reflected at the purchase price of $6 million less accumulated
amortization. The cost of the licenses is being amortized over
40 years.

7
<PAGE> 61

AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of
Skandia Insurance Company Ltd.)

NOTES TO FINANCIAL STATEMENTS (continued)

3. NET INVESTMENT INCOME

Additional information with respect to net investment income for the
years ended December 31, 1994, 1993 and 1992 is as follows:

<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Fixed Maturities $ 616,987 $409,552 $836,885
Mutual Funds 12,049 0 0
Short-Term Investments 142,421 394,545 105,846
Cash and Cash Equivalents 633,298 15,034 23,844
Interest on Policy Loans 1,275 1,015 0
---------- -------- --------

Total Investment Income 1,406,030 820,146 966,575

Investment Expenses 105,813 127,388 74,522
---------- -------- --------

Net investment income $1,300,217 $692,758 $892,053
========== ======== ========
</TABLE>

4. INVESTMENTS

The Company adopted Statement of Financial Accounting Standards (SFAS)
No. 115, "Accounting for Certain Investments in Debt and Equity
Securities", effective January 1, 1994.

The Company has classified its debt securities as held-to-maturity in
that it has the explicit intent to hold these securities to maturity.
Therefore, these securities are carried at amortized cost.

The Company has classified its mutual fund investments as
available-for-sale. Therefore, these investments are carried at
market value and changes in unrealized gains and losses are reported
as a component of shareholder's equity.

The adoption of SFAS No. 115 had no impact on the Company's financial
statements.

The carrying value (amortized cost), gross unrealized gains (losses)
and estimated market value of investments in fixed maturities by
category as of December 31, 1994 and 1993 are shown below. All
securities are publicly traded for which market values were obtained
from an independent pricing service.

8
<PAGE> 62

AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of
Skandia Insurance Company Ltd.)

NOTES TO FINANCIAL STATEMENTS (continued)

Investments in fixed maturities as of December 31, 1994 and 1993 consist of the
following:

<TABLE>
<CAPTION>
1994
----

Gross Gross
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
---- ----- ------ -----
<S> <C> <C> <C> <C>
U.S. Government
Obligations $3,796,390 $2,119 $156,759 $3,641,750

Obligations of
State and Political
Subdivisions 261,852 0 9,156 252,696

Corporate
Securities 5,563,623 0 547,023 5,016,600
---------- ------ -------- ----------

Totals $9,621,865 $2,119 $712,938 $8,911,046
========== ====== ======== ==========
</TABLE>

The amortized cost and market value of fixed maturities, by contractual
maturity, at December 31, 1994 are shown below.

<TABLE>
<CAPTION>
Amortized Market
Cost Value
---- -----
<S> <C> <C>
Due in one year or less $ 100,112 $ 101,000

Due after one through five years 6,251,719 5,905,746

Due after five through ten years 3,270,034 2,904,300
---------- ----------

$9,621,865 $8,911,046
========== ==========
</TABLE>

9
<PAGE> 63
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of
Skandia Insurance Company Ltd.)

NOTES TO FINANCIAL STATEMENTS (continued)

<TABLE>
<CAPTION>
1993
----

Gross Gross
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
---- ----- ------ -----
<S> <C> <C> <C> <C>
U. S.
Government
Obligations $3,823,900 $119,184 $1,144 $3,941,940

Obligations of
State and
Political
Subdivisions 267,331 0 428 266,903

Corporate
Securities 5,573,478 0 21,079 5,552,399
---------- -------- ------- ----------

Totals $9,664,709 $119,184 $22,651 $9,761,242
========== ======== ======= ==========
</TABLE>

Proceeds from maturities and sales of investments in debt securities
during 1994, 1993 and 1992 were $2,010,000, 10,971,574, and $25,076,925,
respectively.

Gross gains and gross losses realized were as follows:

<TABLE>
<CAPTION>
Gross Gross
Gains Losses
----- ------
<S> <C> <C>
1994 $ 0 $ 0

1993 $ 329,000 $ 0

1992 $ 498,790 $ 301,596
</TABLE>

Investments in mutual funds at December 31, 1994 are as follows:

<TABLE>
<CAPTION>
Gross Gross
Unrealized Unrealized Market
Cost Gains Losses Value
---- ----- ------ -----
<S> <C> <C> <C> <C>
Mutual Funds $882,292 $4,483 $46,138 $840,637
</TABLE>

Proceeds from sales of investments in mutual funds during 1994 were
$38,588. Gross losses were $1,942.

10
<PAGE> 64

AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of
Skandia Insurance Company Ltd.)

NOTES TO FINANCIAL STATEMENTS (continued)

5. RECOGNITION OF REVENUE AND CONTRACT BENEFITS

Annuity contracts without significant mortality risk, as defined by
Financial Accounting Standard No. 97, are classified as investment
contracts (variable, market value adjusted and certain immediate
annuities) and those with mortality risk (immediate annuities) as
insurance products. The policy of revenue and contract benefit
recognition is described below.

Revenues for variable annuity contracts consist of charges against
contractowner account values for mortality and expense risks and
administration fees and an annual maintenance fee per contract.
Benefit reserves for variable annuity contracts represent the account
value of the contracts, and are included in the separate account
liabilities.

Revenues for market value adjusted annuity contracts consist of
separate account investment income reduced by benefit payments and
change in reserves in support of contractowner obligations, all of
which is included in return credited to contractowners. Benefit
reserves for these contracts represent the account value of the
contracts, and are included in the general account liability for
future contractowner benefits to the extent in excess of the separate
account liabilities.

Revenues for immediate annuity contracts without life contingencies
consist of net investment income. Revenues for immediate annuity
contracts with life contingencies consist of single premium payments
recognized as annuity considerations when received. Benefit reserves
for these contracts are based on the Society of Actuaries 1983 - a
Table with an assumed interest rate of 8.25%.

Annuity sales were $1,372,874,000, $890,640,000, $287,596,000 for
1994, 1993 and 1992, respectively. Annuity contract assets under
management were $2,661,161,000, $1,437,554,000, and $495,176,000 at
December 31, 1994, 1993 and 1992, respectively.

6. DEFERRED ACQUISITION COSTS

The costs of acquiring new business, which vary with and are primarily
related to the production of new business, are being amortized in
relation to the present value of estimated gross profits. These costs
include commissions, cost of contract issuance, and certain selling
expenses that vary with production. Details of the deferred
acquisition costs for the years ended December 31 follow:

11
<PAGE> 65

AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of
Skandia Insurance Company Ltd.)

NOTES TO FINANCIAL STATEMENTS (continued)

<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Balance at beginning of year $ 90,023,536 $32,636,494 $12,303,445

Acquisition costs deferred
during the year 85,801,180 59,676,296 21,406,981

Acquisition costs amortized
during the year 1,815,107 2,289,254 1,073,932
------------ ----------- -----------

Balance at end of year $174,009,609 $90,023,536 $32,636,494
============ =========== ===========
</TABLE>

7. DEFERRED CONTRACT CHARGES

Certain contracts are assessed a front-end fee at the time of issue.
These fees are deferred and recognized in income in relation to the
present value of estimated gross profits of the related contracts.
Details of the deferred contract charges for the years ended December
31 follow:

<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Balance at beginning of year $520,821 $506,923 $427,374

Contract charges deferred
during the year 87,114 144,537 168,091

Contract charges amortized
during the year 158,231 130,639 88,542
-------- -------- --------

Balance at end of year $449,704 $520,821 $506,923
======== ======== ========
</TABLE>

12
<PAGE> 66

AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of
Skandia Insurance Company Ltd.)

NOTES TO FINANCIAL STATEMENTS (continued)

8. INCOME TAXES

The Company adopted Statement of Financial Accounting Standards
("SFAS") No. 109 "Accounting for Income Taxes", effective January 1,
1993. The Company previously accounted for income taxes in accordance
with Accounting Principles Board Opinion ("APB") No. 11. There was no
cumulative effect of adopting SFAS No. 109 on the Company's financial
statements on the date of adoption.

The Company files a separate federal income tax return. As of
December 31, 1994, the Company has a net operating tax loss
carryforward of $4,182,332, which expires in 2007.

Deferred income taxes reflect the net tax effects of (a) temporary
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax
purposes, and (b) operating loss and tax credit carryforwards. The
tax effects of significant items comprising the Company's deferred tax
balance as of December 31, 1994 and 1993, are as follows:

<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Deferred Tax (Liabilities):
Deferred acquisition costs ($37,885,053) ($23,152,548)
Payable to reinsurer (12,754,591) (3,824,435)
Other (214,505) (101,517)
----------- -----------

Total ($50,854,149) ($27,078,500)
----------- -----------

Deferred Tax Assets:
Deferred contract charge $ 157,396 $ 182,287
Net separate account liabilities 51,637,155 27,935,015
Reserve for future contractowner benefits 3,997,833 1,513,334
Net operating loss carryforward 1,813,670 4,536,790
Other 878,030 190,300
----------- -----------

Total $58,484,084 $34,357,726
----------- -----------

Net before valuation allowance $ 7,629,935 $ 7,279,226

Valuation allowance (7,629,935) (7,279,226)
----------- -----------

Net deferred tax balance $ 0 $ 0
----------- -----------
</TABLE>

13
<PAGE> 67

AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of
Skandia Insurance Company Ltd.)

NOTES TO FINANCIAL STATEMENTS (continued)

The significant components of tax expense are as follows:

<TABLE>
<CAPTION>
Federal State
------- -----
1994 1993 1994
---- ---- ----
<S> <C> <C> <C>
Current tax expense $184,771 $182,965 $62,658

Deferred tax expense (benefit):
(exclusive of the effects of
the change in valuation allowance) (350,709) (404,480) 0

Change in valuation allowance 350,709 404,480 0
-------- -------- -------

Total deferred tax expense 0 0 0
-------- -------- -------

Total income tax expense $184,771 $182,965 $62,658
</TABLE>

The income tax expense was different from the amount computed by
applying the federal statutory tax rate of 35% to pre-tax income from
continuing operations as follows:

<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Income before taxes $ 106,921 $2,237,806
Income tax rate 35% 35%
---------- ----------

Tax expense at federal
statutory income tax rate 37,422 783,232

Tax effect of:

Permanent tax differences (82,188) 63,535

Difference between financial
statement and taxable income 3,161,331 2,414,254

Utilization of net operating
loss carryforwards (3,116,565) (3,261,021)

Alternative minimum tax 184,771 182,965
---------- ----------

Income tax expense $ 184,771 $ 182,965
========== ==========
</TABLE>

14
<PAGE> 68

AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of
Skandia Insurance Company Ltd.)

NOTES TO FINANCIAL STATEMENTS (continued)

9. RELATED PARTY TRANSACTIONS

Certain operating costs (including personnel, rental of office space,
furniture, and equipment) and investment expenses have been charged to
the Company at cost by American Skandia Business Services Corporation,
an affiliated company; and likewise, the Company has charged operating
costs to American Skandia Life Investment Management, Inc., an
affiliated company. Income received for these items was $248,799 and
$146,134 for the years ended December 31, 1994 and 1993, respectively.
The total cost to the Company for these items was $8,524,840,
$3,537,566 and $3,244,582 for the years ended December 31, 1994, 1993,
and 1992 respectively. Amounts receivable from affiliates under this
arrangement were $317,285 and $446,388 as of December 31, 1994 and
1993, respectively. Amounts payable to affiliates under this
arrangement were $261,552 and $272,615 as of December 31, 1994 and
1993, respectively.

10. LEASES

The Company leases office space under a lease agreement established in
1989 with an affiliate (American Skandia Business Services
Corporation). The lease expense for 1994, 1993 and 1992 was $961,080,
$280,363 and $222,948, respectively. Future minimum lease payments
per year and in aggregate as of December 31, 1994 are as follows:

<TABLE>
<S> <C>
1995 $900,896
1996 900,896
1997 900,896
1998 900,896
1999 and thereafter 6,122,817
----------

Total $9,726,401
==========
</TABLE>

11. RESTRICTED ASSETS

In order to comply with certain state insurance departments'
requirements, the Company maintains bonds/notes on deposit with
various states. The carrying value of these deposits amounted to
$3,410,135 and $3,015,949 as of December 31, 1994 and 1993,
respectively. These deposits are required to be maintained for the
protection of contractowners within the individual states.

15
<PAGE> 69

AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of
Skandia Insurance Company Ltd.)

NOTES TO FINANCIAL STATEMENTS (continued)

12. RETAINED EARNINGS AND DIVIDEND RESTRICTIONS

Statutory basis shareholder's equity was $95,001,971, $60,666,243, and
$36,468,375, at December 31, 1994, 1993 and 1992, respectively.

The statutory basis net income(loss) was ($9,789,297), $387,695, and
($9,390,154) for the years ended December 31, 1994, 1993 and 1992,
respectively.

Under state insurance laws, the maximum amount of dividends that can
be paid to shareholders without prior approval of the state insurance
departments is subject to restrictions relating to statutory surplus
and net gain from operations. No amounts may be distributed without
approval at December 31, 1994.

13. SEPARATE ACCOUNTS

Assets and liabilities in Separate Account are shown as separate
captions in the statement of financial condition. The assets consist
of long-term bonds, investments in mutual funds and short-term
securities, all of which are carried at market value.

Included in Separate Account liabilities is $259,556,863 and
$86,056,159 at December 31, 1994 and 1993, respectively, relating to
annuity contracts for which the contractholder is guaranteed a fixed
rate of return. Separate Account assets of $269,488,557 and
$86,079,532 at December 31, 1994 and 1993, respectively, consisting of
long term bonds, short term securities, transfers due from general
account and cash are in support of these annuity contracts, as
pursuant to state regulation.

Effective January 1, 1994 the Company has reclassified from revenues
the separate account investment return. Separate Account investment
return represents investment income and realized/unrealized gains and
losses earned in the separate accounts. The Separate Account
investment return is now being netted against a similar amount
included in benefits and expenses which represents separate account
investment return credited to the contractowner; consequently having
no effect on the net income (loss) of the Company. Such amounts were
($20.3) million, $101.3 million, and $27 million for the years ended
December 31, 1994, 1993 and 1992, respectively. Prior to 1994, the
Separate Account investment return was reported as revenue. Since
this revenue is directly credited to the reserve for the Company's
obligation to contractowners, it was netted in return credited to
contractowners under benefits and expenses.

16
<PAGE> 70
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of
Skandia Insurance Company Ltd.)

NOTES TO FINANCIAL STATEMENTS (continued)

The Company analyzed the presentation of the Separate Account
operations and believes a better presentation is to offset the
separate account investment return directly against the return
credited to contractowners. This is based on the fact that the
Separate Account investment return does not benefit the Company but
constitutes a credit (charge) to the contractowners. This is a
presentation change and has no effect on the net income (loss)
reported by the Company. The related revenue and expense categories
on the Statement of Operations for the years ended December 31, 1993
and 1992, respectively, have been reclassified to reflect this
presentation change.

14. CONTRACT WITHDRAWAL PROVISIONS

Approximately 98% of the Company's separate account liabilities are
subject to discretionary withdrawal with market value adjustment by
contractholders. Separate account assets which are carried at market
value are adequate to pay such withdrawals which are generally subject
to surrender charges ranging from 7.5% to 1% for contracts held less
than 7 years.

15. EMPLOYEE BENEFITS

In 1989, the Company established a 401(k) plan for which substantially
all employees are eligible. Company contributions to this plan on
behalf of the participants were $431,559, $250,039, and $195,785 for
the years ended December 31, 1994, 1993, and 1992, respectively.

The Company has a long-term incentive plan where units are awarded to
executive officers and other personnel. The program consists of
multiple plans. A new plan is instituted each year. Generally,
participants must remain employed by the Company or its affiliates at
the time such units are payable in order to receive any payments under
the plan. The accrued liability representing the value of these units
is $1,564,407 and $496,235 as of December 31, 1994 and 1993,
respectively.

In 1994, the Company established a deferred compensation plan which is
available to the internal field marketing staff and certain officers.
Company contributions to this plan on behalf of the participants were
$106,882.

16. REINSURANCE

The Company cedes reinsurance under a modified co-insurance
arrangement. The reinsurance arrangement provides additional capacity
for growth in supporting the cash flow strain from the Company's
variable annuity business. The reinsurance is effected under a quota
share contract. The Company did not reinsure any of its business
prior to 1993.

17
<PAGE> 71

AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of
Skandia Insurance Company Ltd.)

NOTES TO FINANCIAL STATEMENTS (continued)

The effect of the reinsurance agreement on the Company's operations
was to reduce annuity charges and fee income for 1994 and 1993 as
follows:

<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Gross $30,116,166 $12,446,277
Ceded 5,336,381 693,293
----------- -----------
Net $24,779,785 $11,752,984
=========== ===========
</TABLE>

Such ceded reinsurance does not relieve the Company from its
obligations to policyholders. The Company remains liable to its
policyholders for the portion reinsured to the extent that any
reinsurer does not meet the obligations assumed under the reinsurance
agreement.

17. SURPLUS NOTES

During 1994, the Company received $49 million from its parent in
exchange for four surplus notes, two in the amount of $10 million, one
in the amount of $15 million and one in the amount of $14 million, at
interest rates of 7.28%, 7.90%, 9.13% and 9.78%, respectively.
Interest payable at December 31, 1994 for these notes is $1,618,504.

During 1993, the Company received $20 million from its parent in
exchange for a surplus note in the amount of $20 million at a 6.84%
interest rate. Interest payable at December 31, 1994 is $1,398,400.

Payment of interest and repayment of principal for these notes was not
approved by the Insurance Commissioner of the State of Connecticut.

18. SHORT TERM BORROWING

During 1993, the Company received a $10 million loan payable from
Skandia AB, a Swedish affiliate. The loan matures on March 6, 1995
and bears interest at 7.225%. The total interest expense to the
Company was $569,618 and $149,861 for the years ended December 31,
1994 and 1993, respectively, of which $50,174 and $38,194 was payable
as of December 31, 1994 and 1993, respectively.

18
<PAGE> 72

AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
(a wholly-owned subsidiary of
Skandia Insurance Company Ltd.)

NOTES TO FINANCIAL STATEMENTS (continued)

19. QUARTERLY FINANCIAL DATA (Unaudited)

The following table summarizes information with respect to the
operations of the Company. The 1993 information has been reclassified
as discussed in Note 13.

<TABLE>
<CAPTION>
Three Months Ended
------------------
1994 March 31 June 30 September 30 December 31
---- -------- ------- ------------ -----------
<S> <C> <C> <C> <C>
Premiums and other insurance
revenues $5,594,065 $6,348,777 $7,411,686 $7,631,608
Net investment income 252,914 336,149 264,605 446,549
Net realized capital gains (losses)
0 (30,829) 25,914 2,973
---------- ---------- ---------- ----------
Total revenues $5,846,979 $6,654,097 $7,702,205 $8,081,130
========== ========== ========== ==========

Benefits and expenses $5,701,460 $7,883,829 $8,157,535 $6,434,666
========== ========== ========== ==========

Net income (loss) $ 104,636 ($1,257,768) ($503,793) $1,516,417
========== ========== ========== ==========
</TABLE>

<TABLE>
<CAPTION>
Three Months Ended
------------------
1993 March 31 June 30 September 30 December 31
---- -------- ------- ------------ -----------
<S> <C> <C> <C> <C>
Premiums and other insurance
revenues $2,022,274 $2,809,431 $3,440,822 $4,521,705
Net investment income 296,167 156,692 90,177 149,722
Net realized capital gains (losses) 329,000 (640) 1,664 0
---------- ---------- ---------- ----------
Total revenues $2,647,441 $2,965,483 $3,532,663 $4,671,427
========== ========== ========== ==========

Benefits and expenses $1,878,923 $2,186,773 $3,371,426 $4,142,086
========== ========== ========== ==========

Net income $ 735,444 $ 757,619 $ 94,582 $ 467,196
========== ========== ========== ==========
</TABLE>

19
<PAGE> 73

UNAUDITED INTERIM FINANCIAL STATEMENTS FOR AMERICAN SKANDIA LIFE ASSURANCE
CORPORATION

[TO BE FILED BY AMENDMENT]

1
<PAGE> 74

APPENDIX B

SHORT DESCRIPTION OF THE
UNDERLYING MUTUAL FUNDS' PORTFOLIO INVESTMENT OBJECTIVES AND POLICIES

Short descriptions of the portfolios of the Life & Annuity Trust, the
applicable portfolios of the American Skandia Trust and the Growth portfolio of
The Alger American Fund are found below.

Please refer to the prospectuses of each underlying mutual fund for more
complete details and risk factors applicable to certain portfolios.

LIFE & ANNUITY TRUST

ASSET ALLOCATION FUND: THE ASSET ALLOCATION FUND'S INVESTMENT OBJECTIVE IS TO
SEEK OVER THE LONG TERM A HIGH LEVEL OF TOTAL RETURN, INCLUDING NET REALIZED
AND UNREALIZED CAPITAL GAINS AND NET INVESTMENT INCOME, CONSISTENT WITH
REASONABLE RISK. The Fund seeks to achieve its objective by pursuing an asset
allocation strategy. This strategy is based upon the premise that certain
asset classes from time to time are under- or over-valued relative to
eachother by the market, and that under-valued asset classes represent
relatively better long-term, risk-adjusted investment opportunities. Timely,
low-cost shifts among common stocks, U.S. Treasury bonds and money market
instruments (as determined by their perceived relative over- or under-
valuation) can, therefore, produce attractive investment returns. Using this
strategy, Wells Fargo Nikko Investment Advisors ("WFNIA"), as the Fund's
investment sub-adviser, regularly determines the appropriate mix of asset
classes and the Fund's portfolio is periodically adjusted to achieve this mix.
The Fund is not designed to profit from short-term market changes.

In determining the appropriate mix, WFNIA uses an investment model developed
over the past 20 years, which is also used by WFNIA as a basis for managing
large employee benefit trust funds and other institutional accounts. The Asset
Allocation Model, which is proprietary to WFNIA, analyzes extensive financial
data from numerous sources and recommends a portfolio allocation among common
stocks, U.S. Treasury bonds and money market instruments. As further described
in the Fund's "Prospectus Appendix - Additional Investment Policies," WFNIA
bases its investment decisions on the Asset Allocation Model's results. At any
given time, substantially all of the Fund's assets may be invested in a single
asset class and the relative allocation among the asset classes may shift
significantly from time to time.

GROWTH AND INCOME FUND: THE GROWTH AND INCOME FUND SEEKS TO EARN CURRENT
INCOME AND ACHIEVE LONG-TERM CAPITAL APPRECIATION. It seeks to achieve this
objective by investing primarily in common stocks and preferred stocks and debt
securities that are convertible into common stocks. Under normal market
conditions, the Fund invests at least 65% of its total assets in common stocks
and securities which are convertible into common stocks and at least 65% of its
total assets in income-producing securities. Up to 10% of the Fund's assets
may be invested in securities of foreign issuers. The Growth and Income Fund
invests in common stocks of issuers that exhibit a strong earnings growth trend
and that are believed by Wells Fargo Bank, as investment adviser, to have above
average prospects for future earnings growth. The Fund maintains a portfolio
of common stocks diversified among industries and companies. The Fund may
invest in common stocks of large companies (i.e., those companies with more
that $750 million in capitalization) that Wells Fargo Bank believes offer the
potential for long-term earnings growth or above-average dividend yield. Some
investments also may be made in common stocks of medium and smaller sized
companies (i.e., those companies with at least $250 million, but less than $750
million in capitalization ) that appear to have the potential to generate high
levels of future revenue and earnings growth and where the investment
opportunity may not be fully reflected in the price of the securities but that
may involve greater risks than investments in larger companies. The Growth and
Income Fund intends generally to invest less than 50% of its assets in the
securities of medium and smaller sized companies and the remainder in
securities of larger sized companies. However, the actual percentages may vary
according to changes in market conditions and the judgment of the Fund's
investment adviser of how best to achieve the Fund's investment objective. The
Growth and Income Fund may also invest in convertible securities that provide
current income and are issued by companies with the characteristics described
above and that have a strong earnings and credit record. At most, 5% of the
Fund's net assets will be invested in convertible debt securities that are
either rated below the four highest rating categories by one or more nationally
recognized statistical rating organizations, such as Moody's Investor Service,
Inc. or Standard & Poor's Corporation (which includes securities also known as
"junk bonds"), or unrated securities determined by Wells Fargo Bank to be of
comparable quality.

1
<PAGE> 75
MONEY MARKET FUND: THE MONEY MARKET FUND SEEKS TO PROVIDE INVESTORS WITH A
HIGH LEVEL OF INCOME, WHILE PRESERVING CAPITAL AND LIQUIDITY, BY INVESTING IN
HIGH-QUALITY, SHORT-TERM SECURITIES. The Fund only invests its assets in U.S.
dollar-denominated, high-quality money market instruments, and may engage in
certain other investment activities as described in the Prospectus. Permitted
investments consist of obligations of the U.S. Government, its agencies or
instrumentalities (including government-sponsored enterprises), obligations of
domestic and foreign banks, commercial paper, and repurchase agreements and
other debt obligations such as municipal obligations, asset-backed securities
and securities issued by special purpose entities. The Fund also may invest in
unrated instruments determined by Wells Fargo Bank to be of comparable quality
to other rated instruments that the Fund is permitted to purchase and otherwise
purchased in accordance with Fund procedures. A more complete description of
these investments and investment activities is contained in the Fund's
"Prospectus Appendix - Additional Investment Policies" and in the Fund's SAI.

U.S. GOVERNMENT ALLOCATION FUND: THE U.S. GOVERNMENT ALLOCATION FUND'S
INVESTMENT OBJECTIVE IS TO SEEK OVER THE LONG TERM A HIGH LEVEL OF TOTAL
RETURN, INCLUDING NET REALIZED AND UNREALIZED CAPITAL GAINS AND NET INVESTMENT
INCOME, CONSISTENT WITH REASONABLE RISK. The Fund seeks to achieve its
objective by pursuing a strategy of allocating and reallocating its investments
among the following three classes of debt instruments: long-term U.S. Treasury
bonds, intermediate-term U.S. Treasury notes, and short-term money market
instruments. This strategy is based upon the premise that those classes of
debt securities from time to time are over- or under-valued relative to each
other by the market, and that under-valued asset classes represent relatively
better long-term investment opportunities. Timely, low-cost shifts among such
securities (as determined by their perceived relative over- or under-valuation)
can, therefore produce attractive long-term investment returns. Using this
strategy, WFNIA regularly determines the appropriate mix of asset classes, and
the Fund's portfolio is periodically adjusted to achieve this mix. Under
normal market conditions, the Fund invests at least 65% of the value of its
total assets in U.S. Government obligations. In determining the appropriate
mix, WFNIA, as the Fund's investment sub-adviser, uses an investment model, the
U.S. Government Allocation Model, which is also used by WFNIA as a basis for
managing large employee benefit trust funds and other institutional accounts.
The model, which is proprietary to WFNIA, analyzes risk, correlation and
expected return data and recommends a portfolio allocation among the three
classes of debt instruments. As further described in the Fund's "Prospectus
Appendix - Additional Investment Policies," WFNIA bases its investment
decisions on the model's results. At any given time, substantially all of the
Fund's assets may be invested in a single asset class, and the relative
allocation among the asset classes may shift significantly from time to time.
The Fund is not designed to profit from short-term market changes. The Fund
may purchase U.S. Treasury bonds with remaining maturities of at least 20
years. Under normal market conditions, the dollar-weighted average maturity of
this portion of the Fund's portfolio is expected to range between 22 and 28
years. The Fund may purchase U.S. Treasury notes and other U.S. Treasury
securities with remaining maturities ranging from one to 20 years. Under
normal market conditions, the dollar-weighted average maturity of this portion
of the Fund's portfolio is expected to range between three and seven years.
The Fund may purchase short-term money market instruments with remaining
maturities of one year or less. The Fund also may enter into futures and
options contracts and options on futures contracts and make margin payments in
connection with such contracts, invest in unrated instruments determined by the
Fund's adviser to be of investment quality comparable to other rated
instruments that the Fund is permitted to purchase, and purchase securities on
a delayed delivery or when-issued basis.

AMERICAN SKANDIA TRUST

JANCAP GROWTH PORTFOLIO: THE INVESTMENT OBJECTIVE OF THE JANCAP GROWTH
PORTFOLIO IS GROWTH OF CAPITAL IN A MANNER CONSISTENT WITH THE PRESERVATION OF
CAPITAL. Realization of income is not a significant investment consideration
and any income realized on investments, therefore, will be incidental to this
objective. The objective will be pursued by emphasizing investments in common
stocks. Common stock investments will be in industries and companies that the
portfolio's sub-advisor believes are experiencing favorable demand for their
products and services, and which operate in a favorable competitive and
regulatory environment. Investments may be made to a lesser degree in
preferred stocks, convertible securities, warrants, and debt securities of U.S.
issuers, when the JanCap Growth Portfolio perceives an opportunity for capital
growth from such securities or so that a return may be received on its idle
cash. Debt securities which the portfolio may purchase include corporate bonds
and debentures (not to exceed 5% of net assets in bonds rated below investment
grade), mortgage-backed and asset-backed securities, zero-coupon bonds,
indexed/structured notes, high-grade commercial paper, certificates of deposit
and repurchase agreements. Securities of foreign issuers, including securities
of foreign governments and Euromarket securities, also may be purchased.
Although it is the general policy of the JanCap Growth Portfolio to purchase
and hold securities for capital growth, changes will be made whenever the
portfolio's sub-advisor believes they are advisable. Because investment
changes usually will be made without reference to the length of time a security
has been held, a significant number of short-term transactions may result.

2
<PAGE> 76
Investments also may be made in "special situations" from time to time. A
"special situation" arises when, in the opinion of the portfolio's sub-advisor,
the securities of a particular company will be recognized and appreciate in
value due to a specific development, such as a technological breakthrough,
management change or a new product at that company. Subject to certain
limitations, the JanCap Growth Portfolio may purchase and write options on
securities (including index options) and options on foreign currencies, and may
invest in futures contracts for the purchase or sale of instruments based on
financial indices, including interest rates or an index of U.S. Government or
foreign government securities or equity or fixed-income securities, futures
contracts on foreign currencies and fixed income securities ("futures
contracts"), options on futures contracts, forward contracts and swaps and
swap-related products. These instruments will be used primarily for hedging
purposes. Investment of up to 15% of the JanCap Growth Portfolio's total
assets may be made in securities that are considered illiquid because of the
absence of a readily available market or due to legal or contractual
restrictions.

T. ROWE PRICE INTERNATIONAL EQUITY PORTFOLIO: THE INVESTMENT OBJECTIVE OF THE
T. ROWE PRICE INTERNATIONAL EQUITY PORTFOLIO IS TO SEEK TOTAL RETURN ON ITS
ASSETS THROUGH INVESTMENTS IN COMMON STOCKS OF ESTABLISHED, NON-U.S. COMPANIES.
Investments may be made solely for capital appreciation or solely for income or
any combination of both for the purpose of achieving a higher overall return.
Total return consists of capital appreciation or depreciation, dividend income,
and currency gains or losses. The portfolio intends to diversify investments
broadly among countries and to normally have at least three different countries
represented in the portfolio. The portfolio may invest in countries of the Far
East and Western Europe as well as South Africa, Australia, Canada and other
areas (including developing countries). Under unusual circumstances, the
portfolio may invest substantially all of its assets in one or two countries.

FOUNDERS CAPITAL APPRECIATION PORTFOLIO: THE INVESTMENT OBJECTIVE OF FOUNDERS
CAPITAL APPRECIATION PORTFOLIO IS CAPITAL APPRECIATION. The portfolio will
normally invest at least 65% of its total assets in common stocks of U.S.
companies with market capitalizations of $1.5 billion or less. These stocks
normally will be traded in the over-the-counter market. Since it may engage in
short-term trading, the portfolio normally will have annual portfolio turnover
rates in excess of 100%.

INVESCO EQUITY INCOME PORTFOLIO: THE INVESTMENT OBJECTIVE OF THE INVESCO
EQUITY INCOME PORTFOLIO IS TO SEEK HIGH CURRENT INCOME WHILE FOLLOWING SOUND
INVESTMENT PRACTICES. Capital growth potential is an additional, but
secondary, consideration in the selection of portfolio securities. The
portfolio seeks to achieve its objective by investing in securities which will
provide a relatively high-yield and stable return and which, over a period of
years, may also provide capital appreciation. The portfolio normally will
invest between 60% and 75% of its assets in dividend-paying, marketable common
stocks of domestic and foreign industrial issuers. The portfolio also will
invest in convertible bonds, preferred stocks and debt securities. The
portfolio may depart from the basic investment objective and assume a defensive
position with a large portion of its assets temporarily invested in high
quality corporate bonds, or notes and government issues, or held in cash. The
portfolio's investments in common stocks may decline in value. To minimize the
risk this presents, the portfolio only invests in dividend-paying common stocks
of domestic and foreign industrial issuers which are marketable, and will not
invest more than 5% of the portfolio's assets in the securities of any one
company or more than 25% of the portfolio's assets in any one industry. The
portfolio's investments in debt securities will generally be subject to both
credit risk and market risk. There are no fixed-limitations regarding
portfolio turnover. The rate of portfolio turnover may fluctuate as a result
of constantly changing economic conditions and market circumstances.
Securities initially satisfying the portfolio's basic objectives and policies
may be disposed of when they are no longer suitable. As a result, it is
anticipated that the portfolio's annual portfolio turnover rate may be in
excess of 100%, and may be higher than that of other investment companies
seeking current income with capital growth as a secondary consideration.
Increased portfolio turnover would cause the portfolio to incur greater
brokerage costs than would otherwise be the case.

PIMCO TOTAL RETURN BOND PORTFOLIO: THE INVESTMENT OBJECTIVE OF THE PIMCO TOTAL
RETURN BOND PORTFOLIO IS TO SEEK TO MAXIMIZE TOTAL RETURN. A SECONDARY
OBJECTIVE IS PRESERVATION OF CAPITAL. THE SUB-ADVISOR WILL SEEK TO EMPLOY
PRUDENT INVESTMENT MANAGEMENT TECHNIQUES, ESPECIALLY IN LIGHT OF THE BROAD
RANGE OF INVESTMENT INSTRUMENTS IN WHICH THE PORTFOLIO MAY INVEST. The
proportion of the portfolio's assets committed to investment in securities with
particular characteristics (such as maturity, type and coupon rate) will vary
based on the outlook for the U.S. and foreign economies, the financial markets
and other factors. The portfolio will invest at least 65% of its assets in the
following types of securities which may be issued by domestic or foreign
entities and denominated in U.S. dollars or foreign currencies: securities
issued or guaranteed by the U.S. Government, its agencies or instrumentalities;
corporate debt securities; corporate commercial paper; mortgage and other
asset-backed securities; variable and floating rate debt securities; bank
certificates of deposit; fixed time deposits and bankers' acceptances;
repurchase agreements and reverse repurchase agreements; obligations of foreign
governments or their subdivisions, agencies and instrumentalities,
international agencies

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<PAGE> 77
or supranational entities; and foreign currency exchange-related securities,
including foreign currency warrants. The portfolio will invest in a
diversified portfolio of fixed-income securities of varying maturities with a
portfolio duration from three to six years. The portfolio may invest up to 20%
of assets in corporate debt securities that are rated below investment grade
(i.e., rated below Baa by Moody's or BBB by S&P or, if unrated, determined by
the Sub-advisor to be of comparable quality). These securities are regarded as
high risk and predominantly speculative with respect to the issuer's continuing
ability to meet principal and interest payments (see the underlying fund
prospectus for details).

PIMCO LIMITED MATURITY BOND PORTFOLIO: THE INVESTMENT OBJECTIVE OF THE PIMCO
LIMITED MATURITY BOND PORTFOLIO IS TO SEEK TO MAXIMIZE TOTAL RETURN, CONSISTENT
WITH PRESERVATION OF CAPITAL AND PRUDENT INVESTMENT MANAGEMENT. The portfolio
will invest at least 65% of its total assets in the following types of
securities, which may be issued by domestic or foreign entities and denominated
in U.S. dollars or foreign currencies: securities issued or guaranteed by the
U.S. Government, its agencies or instrumentalities ("U.S. Government
securities"); corporate debt securities; corporate commercial paper; mortgage
and other asset-backed securities; variable and floating rate debt securities;
bank certificates of deposit, fixed time deposits and bankers' acceptances;
repurchase agreements and reverse repurchase agreements; obligations of foreign
governments or their subdivisions, agencies and instrumentalities,
international agencies or supranational entities; and foreign currency
exchange-related securities, including foreign currency warrants.

The portfolio may hold different percentages of its assets in these various
types of securities, and may invest all of its assets in derivative instruments
or in mortgage- or asset-backed securities. There are special risks involved
in these instruments. The portfolio will invest in a diversified portfolio of
fixed income securities of varying maturities with a portfolio duration from
one to three years. The portfolio may invest up to 10% of its assets in
corporate debt securities that are rated below investment grade but rated B or
higher by Moody's or S&P (or, if unrated, determined by the Sub-advisor to be
of comparable quality). The portfolio may also invest up to 20% of its assets
in securities denominated in foreign currencies. The "total return" sought by
the portfolio will consist of interest and dividends from underlying
securities, capital appreciation reflected in unrealized increases in value of
portfolio securities (realized by the shareholder only upon selling shares) or
realized from the purchase and sale of securities, and use of futures and
options, or gains from favorable changes in foreign currency exchange rates
The portfolio may invest directly in U.S. dollar- or foreign currency-
denominated fixed income securities of non-U.S. issuers. The portfolio will
limit its foreign investments to securities of issuers based in developed
countries (including Newly Industrialized Countries, "NICs", such as Taiwan,
South Korea and Mexico). Investing in the securities of issuers in any foreign
country involves special risks.

AST SCUDDER INTERNATIONAL BOND PORTFOLIO: THE AST SCUDDER INTERNATIONAL BOND
PORTFOLIO SEEKS TO PROVIDE INCOME PRIMARILY BY INVESTING IN A MANAGED PORTFOLIO
OF HIGH-GRADE DEBT SECURITIES DENOMINATED IN FOREIGN CURRENCIES ("INTERNATIONAL
BONDS"). AS A SECONDARY OBJECTIVE, THE PORTFOLIO SEEKS PROTECTION AND POSSIBLE
ENHANCEMENT OF PRINCIPAL VALUE BY ACTIVELY MANAGING CURRENCY, BOND MARKET AND
MATURITY EXPOSURE AND BY SECURITY SELECTION. The portfolio is intended for
long-term investors who can accept the risks associated with investing in
international bonds. Total return from investment in the portfolio will
consist of income after expenses, bond price gains (or losses) in terms of the
local currency and currency gains (or losses). For tax purposes, realized
gains and losses on currency are regarded as ordinary income and loss and
could, under certain circumstances, have an impact on distributions. The value
of the portfolio will fluctuate in response to various economic factors, the
most important of which are fluctuations in foreign currency exchange rates and
interest rates.

The portfolio will normally invest at least 65% of its total assets in bonds
denominated in foreign currencies. Because the portfolio's investments are
primarily denominated in foreign currencies, exchange rates are likely to have
a significant impact on total portfolio performance. For example, a fall in
the U.S. dollar's value relative to the Japanese yen will increase the U.S.
dollar value of a Japanese bond held in the portfolio, even though the price of
that bond in yen terms remains unchanged. Conversely, if the U.S. dollar rises
in value relative to the yen, the U.S. dollar value of a Japanese bond will
fall. Investors should be aware that exchange rate movements can be
significant and endure for long periods of time.

Because of the portfolio's long-term investment objective, investors should not
rely on an investment in the portfolio for their short-term financial needs and
should not view the portfolio as a vehicle for playing short-term swings in the
international bond and foreign exchange markets. Shares of the portfolio alone
should not be regarded as a complete investment program. Also, investors
should be aware that investing in international bonds may involve a higher
degree of risk than investing in U.S. bonds.

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<PAGE> 78
BERGER CAPITAL GROWTH PORTFOLIO: THE INVESTMENT OBJECTIVE OF THE PORTFOLIO IS
TO ACHIEVE LONG-TERM CAPITAL APPRECIATION. THE PORTFOLIO SEEKS TO ACHIEVE THIS
OBJECTIVE PRIMARILY BY INVESTING IN COMMON STOCKS OF ESTABLISHED COMPANIES. AS
A HIGH LEVEL OF INCOME RETURN IS NOT AN INVESTMENT OBJECTIVE, ANY INCOME
PRODUCED WILL BE A BY-PRODUCT OF THE EFFORT TO ACHIEVE THE PORTFOLIO'S
OBJECTIVE. In selecting its portfolio securities, the sub-advisor places
primary emphasis on established companies which it believes to have favorable
growth prospects. Common stocks usually constitute all or most of the
portfolio's investment holdings, but the portfolio remains free to invest in
securities other than common stocks, and may do so when deemed substantial
positions in securities convertible into common stocks, and it may also
purchase government securities, preferred stocks and other senior securities if
the sub-advisor believes these are likely to be the best suited at that time to
achieve the portfolio's objective. The portfolio's policy of investing in
securities believed to have a potential for capital growth means that the
assets of the portfolio generally may be subject to greater fluctuation in
value than if the portfolio invested in other securities.

THE ALGER AMERICAN FUND

ALGER AMERICAN GROWTH PORTFOLIO: THE INVESTMENT OBJECTIVE OF THE ALGER
AMERICAN GROWTH PORTFOLIO IS LONG-TERM CAPITAL APPRECIATION. INCOME IS A
CONSIDERATION IN THE SELECTION OF INVESTMENTS BUT IS NOT AN INVESTMENT
OBJECTIVE OF THE PORTFOLIO. It seeks to achieve its objective by investing in
equity securities, such as common or preferred stocks and limited partnership
interests that are listed on a national securities exchange, or securities
convertible into or exchangeable for equity securities, including warrants and
rights, selected by the investment manager on the basis of original research
produced by its research analysts. Except during temporary defensive periods,
the portfolio may invest at least 85 percent of its net assets in equity
securities and at least 65 percent of its net assets in equity securities of
companies that, at the time of purchase, have total market capitalization of $1
billion or greater.

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<PAGE> 79

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<PAGE> 80

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<PAGE> 81

This prospectus contains a short description of the contents of the
Statement of Additional Information. You have the right to receive
from us such Statement of Additional Information. To do so, please
complete the following, detach it and forward it to us at:

AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
ATTENTION: STAGECOACH
P.O. BOX 862
SHELTON, CONNECTICUT 06484

PLEASE SEND ME A STATEMENT OF ADDITIONAL INFORMATION THAT CONTAINS
FURTHER DETAILS ABOUT THE AMERICAN SKANDIA ANNUITY DESCRIBED IN
PROSPECTUS WFV2-PROS (08/95).

_________________________________________________________________
(print your name)

_________________________________________________________________
(address)

_________________________________________________________________
(city/state/zip code)

<PAGE> 82
ADDITIONAL INFORMATION: Inquiries will be answered by calling your
representative or by writing to:

AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
P.O. Box 862
Shelton, Connecticut 06484

Issued by: Serviced by:

AMERICAN SKANDIA LIFE AMERICAN SKANDIA LIFE
ASSURANCE CORPORATION ASSURANCE CORPORATION
One Corporate Drive P.O. Box 883
Shelton, Connecticut 06484 Shelton, Connecticut 06484
Telephone: 1-800-680-8920 Telephone: 1-800-680-8920

AMERICAN SKANDIA MARKETING, INCORPORATED
One Corporate Drive
Shelton, Connecticut 06484
Telephone: (203) 926-1888

<PAGE> 83

STATEMENT OF ADDITIONAL INFORMATION

The variable investment options under the annuity contracts, registered under
the Securities Act of 1933 and the Investment Company Act of 1940, are issued
by AMERICAN SKANDIA LIFE ASSURANCE CORPORATION VARIABLE ACCOUNT B (CLASS 1
SUB-ACCOUNTS) and AMERICAN SKANDIA LIFE ASSURANCE CORPORATION. The fixed
investment options thereunder, registered solely under the Securities Act of
1933, are issued by AMERICAN SKANDIA LIFE ASSURANCE CORPORATION and the assets
supporting such securities are maintained in AMERICAN SKANDIA LIFE ASSURANCE
CORPORATION SEPARATE ACCOUNT D.

THIS STATEMENT OF ADDITIONAL INFORMATlON IS NOT A PROSPECTUS. THE INFORMATION
CONTAINED HEREIN SHOULD BE READ IN CONJUNCTlON WITH THE PROSPECTUS FOR THE
ANNUITY CONTRACTS ISSUED BY AMERICAN SKANDIA LIFE WHICH ARE REFERRED TO HEREIN.

THE PROSPECTUS SETS FORTH INFORMATION THAT A PROSPECTIVE INVESTOR OUGHT TO KNOW
BEFORE lNVESTING. FOR A COPY OF THE PROSPECTUS SEND A WRITTEN REQUEST TO
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION, P.O. BOX 862, SHELTON, CONNECTICUT
06484, OR TELEPHONE 1-800-680- 8920.

Date of Prospectus: August 1, 1995 Date of Statement of Additional Information: August 1, 1995

TABLE OF CONTENTS

ITEM PAGE
- ---- ----
<S> <C>
General Information Regarding American Skandia Life
Assurance Corporation 1
Principal Underwriter 1
Calculation of Performance Data 2
Unit Price Determinations 3
Calculating the Market Value Adjustments 4
Independent Auditors 5
Legal Experts 5
Financial Statements for Separate Account B (Class 1 Sub-accounts) 5
</TABLE>

GENERAL INFORMATION REGARDING AMERICAN SKANDIA LIFE ASSURANCE CORPORATION:
American Skandia Life Assurance Corporation ("we", "our" or "us") is a
wholly-owned subsidiary of American Skandia Investment Holding Corporation
whose indirect parent is Skandia Insurance Company Ltd. Skandia Insurance
Company Ltd. is part of a group of companies whose predecessor commenced
operations in 1855. Skandia Insurance Company Ltd. is a major worldwide
insurance company operating from Stockholm, Sweden which owns and controls,
directly or through subsidiary companies, numerous insurance and related
companies. We are organized as a Connecticut stock life insurance company, and
are subject to Connecticut law governing insurance companies. Our mailing
address is P.O. Box 883, Shelton, Connecticut 06484.

PRINCIPAL UNDERWRITER: American Skandia Marketing, Incorporated ("ASM, Inc."),
formerly Skandia Life Equity Sales Corporation serves as principal underwriter
for the Annuities. We and ASM, Inc. are wholly-owned subsidiaries of American
Skandia Investment Holding Corporation.

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<PAGE> 84

Annuities may be sold by agents of ASM, Inc. or agents of securities brokers or
insurance brokers who enter into agreements with ASM, Inc. and who are legally
qualified under federal and state law to sell the Annuities in those states
where the Annuities are to be offered. The Annuities are offered on a
continuous basis. ASM, Inc. is registered with the Securities and Exchange
Commission under the Securities Exchange Act of 1934 as a broker dealer and is
a member of the National Association of Securities Dealers, Inc. ASM, Inc.
receives no underwriting commissions.

CALCULATION OF PERFORMANCE DATA: We may advertise our Current Rates for new
Fixed Allocations, to the extent permitted by law. We may advertise the
performance of Sub-accounts using two types of measures. These measures are
"current and effective yield", which may be used for money market type
Sub-accounts, and "total return," which may be used with other types of
Sub-accounts. The following descriptions provide details on how we calculate
these measures for Sub-accounts:

(1) CURRENT AND EFFECTIVE YIELD: The current yield of a money
market type Sub-account is calculated based upon a seven day period ending on
the date of calculation. The current yield of such a Sub-account is computed
by determining the change (exclusive of capital changes) in the Account Value
of a hypothetical pre-existing allocation by an Owner to such a Sub-account
(the "Hypothetical Allocation") having a balance of one Unit at the beginning
of the period, and dividing such net change in the Account Value of the
Hypothetical Allocation by the Account Value of the Hypothetical Allocation at
the beginning of the same period to obtain the base period return, and
multiplying the result by (365/7). The resulting figure will be carried to at
least the nearest l00th of one percent.

We compute effective compound yield for a money market type Sub-account
according to the method prescribed by the Securities and Exchange Commission.
The effective yield reflects the reinvestment of net income earned daily on
assets of such a Sub-account. Net investment income for yield quotation
purposes will not include either realized or capital gains and losses or
unrealized appreciation and depreciation.

(2) TOTAL RETURN: Total return for the other Sub-accounts is
computed by using the formula:

P(1+T)(n) = ERV

where:

P = a hypothetical allocation of $1,000;

T = average annual total return;

n = the number of years over which total return is being measured; and

ERV = the Account Value of the hypothetical $1,000 payment as of the
end of the period over which total return is being measured.

The Sub-accounts offered as variable investment options for the Annuities have
been available as variable investment options in other annuities we offer. In
addition, some of the underlying mutual fund portfolios existed prior to the
inception of these Sub- accounts. Performance quoted in advertising regarding
such Sub-accounts may indicate periods during which the Sub-accounts have been
in existence but prior to the initial offering of the Annuities, or periods
during which the underlying mutual fund portfolios have been in existence, but
the Sub-accounts have not. Such hypothetical performance is calculated using
the same assumptions employed in calculating actual performance since inception
of the Sub-accounts.

As part of any advertisement of Standard Total Return, we may advertise the
"Non-standard Total Return" of the Sub-accounts. Non-standard Total Return is
calculated in the same manner as the standardized returns except that the
calculations assume no redemption at the end of the applicable periods, thus
these figures do not take into consideration the Annuity's contingent deferred
sales charge.

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<PAGE> 85
As described in the Prospectus, Annuities may be offered in certain situations
in which the contingent deferred sales charge or certain other charges or fees
may be eliminated or reduced. Advertisements of performance in connection with
the offer of such Annuities will be based on the charges applicable to such
Annuities.

Shown below are total return figures for the periods shown. Figures are shown
only for Sub-accounts operational as of December 31, 1994. "Standard" total
return and "Non-standard" total return figures, as described above, are shown.
These figures assume that all charges and fees are applicable, except that for
"Non-standard" return, the contingent deferred sales charge is not applied.
The "inception-to-date" figures shown below are based on the inception date of
an underlying mutual fund portfolio. Any performance of such portfolios prior
to inception of a Sub-account is provided by the underlying mutual funds. The
total return for any Sub- account reflecting performance prior to such
Sub-account's inception is based on such information.

<TABLE>
<CAPTION>
STANDARD TOTAL RETURN NON-STANDARD TOTAL RETURN
Incep- Incep-
1 3 5 tion-to 1 3 5 tion-to
Yr. Yr. Yr. -Date Yr. Yr. Yr. -Date
<S> <C> <C> <C> <C> <C> <C> <C> <C>
WF Asset Allocation N/A N/A N/A -5.97% N/A N/A N/A 1.03%
WF U.S. Government Allocation N/A N/A N/A -7.80% N/A N/A N/A -0.80%
WF Growth and Income N/A N/A N/A -2.20% N/A N/A N/A 4.80%
WF Money Market N/A N/A N/A N/A N/A N/A N/A N/A
JanCap Growth -12.86% N/A N/A 1.44% -5.86% N/A N/A 4.15%
T. Rowe Price International Equity N/A N/A N/A -12.20% N/A N/A N/A -5.20%
Founders Capital Appreciation N/A N/A N/A 0.00% N/A N/A N/A 7.00%
INVESCO Equity Income N/A N/A N/A -10.90% N/A N/A N/A -3.90%
PIMCO Total Return Bond N/A N/A N/A -10.90% N/A N/A N/A -3.90%
PIMCO Limited Maturity Bond N/A N/A N/A N/A N/A N/A N/A N/A
AST Scudder International Bond N/A N/A N/A -13.14% N/A N/A N/A -6.14%
Berger Capital Growth N/A N/A N/A -9.91% N/A N/A N/A -2.91%
AA Growth -6.97% 8.53% 13.22% 15.03% 0.03% 10.20% 13.71% 15.27%
</TABLE>

The performance quoted in any advertising should not be considered a
representation of the performance of the Sub-accounts in the future since
performance is not fixed. Actual performance will depend on the type, quality
and, for some of the Sub-accounts, the maturities of the investments held by
the underlying mutual funds and upon prevailing market conditions and the
response of the underlying mutual funds to such conditions. Actual performance
will also depend on changes in the expenses of the underlying mutual funds. In
addition, the amount of charges against each Sub-account will affect
performance.

The information provided by these measures may be useful in reviewing
the performance of the Sub-accounts, and for providing a basis for comparison
with other annuities. These measures may be less useful in providing a basis
for comparison with other investments that neither provide some of the benefits
of such annuities nor are treated in a similar fashion under the Internal
Revenue Code.

UNIT PRICE DETERMINATIONS: For each Sub-account the initial Unit Price was
$10.00. The Unit Price for each subsequent period is the net investment factor
for that period, multiplied by the Unit Price for the immediately preceding
Valuation Period. The Unit Price for a Valuation Period applies to each day in
the period. The net investment factor is an index that measures the investment
performance of and charges assessed against a Sub-account from one Valuation
Period to the next. The net investment factor for a Valuation Period is: (a)
divided by (b), less (c) where:

(a) is the net result of:

(1) the net asset value per share of the underlying mutual
fund shares held by that Sub-account at the end of the current Valuation Period
plus the per share amount of any dividend or capital gain distribution declared
and unpaid by the underlying mutual fund during that Valuation Period; plus or
minus

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<PAGE> 86
(2) any per share charge or credit during the Valuation Period
as a provision for taxes attributable to the operation or maintenance of that
Sub-account.

(b) is the net result of:

(1) the net asset value per share plus any declared and unpaid
dividends per share of the underlying mutual fund shares held in that
Sub-account at the end of the preceding Valuation Period; plus or minus

(2) any per share charge or credit during the preceding
Valuation Period as a provision for taxes attributable to the operation or
maintenance of that Sub-account.

We value the assets in each Sub-account at their fair market value in
accordance with accepted accounting practices and applicable laws and
regulations. The net investment factor may be greater than, equal to, or less
than one.

CALCULATING THE MARKET VALUE ADJUSTMENTS: The market value adjustment ("MVA")
is used in determining the Account Value of each Fixed Allocation. The formula
used to determine the MVA is applied separately to each Fixed Allocation.
Values and time durations used in the formula are as of the date the Account
Value is being determined. Current Rates and available Guarantee Periods are
those for the class of Annuities you purchase pursuant to the Prospectus
available in conjunction with this Statement of Additional Information. The
formula is:

[(1+I) / (1+J+0.0010)](N/12)

where:

I is the interest rate being credited to the Fixed Allocation;

J is the interest rate (for your class of annuities) being credited to
new Fixed Allocations with Guarantee Period durations equal to the
number of years (rounded to the next higher integer when occurring on
other than an anniversary of the beginning of the Fixed Allocation's
Guarantee Period) remaining in your Fixed Allocation Guarantee Period
( the "Remaining Period");

N is the number of months (rounded to the next higher integer when
occurring on other than a monthly anniversary of the beginning of the
Guarantee Period) remaining in such Guarantee Period.

No MVA applies in determining a Fixed Allocation's Account Value on its
Maturity Date. The formula may be changed if Additional Amounts have been
added to a Fixed Allocation. For more information, see the section of the
Prospectus entitled "Additional Amounts in the Fixed Allocations."

Irrespective of the above, we apply certain formulas to determine "I" and "J"
when we do not offer Guarantee Periods with a duration equal to the Remaining
Period. These formulas are as follows:

(a) If we offer Guarantee Periods to your class of Annuities with
durations that are both shorter and longer than the Remaining
Period, we interpolate a rate for "J" between our then current
interest rates for Guarantee Periods with the next shortest and
next longest durations then available for new Fixed Allocations
for your class of Annuities.

(b) If we no longer offer Guarantee Periods to your class of
Annuities with durations that are both longer and shorter than
the Remaining Period, we determine rates for "J" and, for
purposes of determining the MVA only, for "I" based on the
Moody's Corporate Bond Yield Average - Monthly Average Corporates
(the "Average"), as published by Moody's Investor Services, Inc.,
its successor, or an equivalent service should such Average no
longer be published by Moody's. For determining I, we will use
the Average published on or immediately prior to the start of the
applicable Guarantee Period. For determining J, we will use the
Average for the Remaining Period published on or immediately
prior to the date the MVA is calculated.

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<PAGE> 87
The following examples show the effect of the MVA in determining Account Value.
The example assumes: (a) Account Value of $50,000 for the Fixed Allocation at
the beginning of its Guarantee Period; (b) a Guarantee Period of 5 years; (c)
an interest rate of 5%, which is an effective annual rate; and (d) the date of
the calculation is the end of the third year since the beginning of the
Guarantee Period. That means there are two exact years remaining to the end of
the Guarantee Period.

EXAMPLE OF UPWARD ADJUSTMENT: Assume that J = 3.5% and there have
been no transfers or withdrawals. At this point I = 5% (0.05) and N = 24
(number of months remaining in the Guarantee Period). Then:

(a) MVA = [(1+I)/(1+J+0.0010)](N/12) = [1.05/1.036](2) = 1.027210;
and

(b) Account Value = Interim Value X MVA = $59,456.20.

EXAMPLE OF DOWNWARD ADJUSTMENT: Assume that J = 6% and there have
been no transfers or withdrawals. At this point I = 5% (0.05) and N = 24, the
number of months remaining in the Guarantee Period. Then:

(a) MVA = [(1+I)/(1+J+.0010)](N/12) = [1.05/1.061](2) = 0.979372; and

(b) Account Value = Interim Value X MVA = $56,687.28.

INDEPENDENT AUDITORS: Deloitte & Touche LLP, Two World Financial
Center, New York, New York 10281-1433, independent auditors, have performed an
annual audit of American Skandia Life Assurance Corporation and an annual audit
of American Skandia Life Assurance Corporation Variable Account B (Class 1
Sub-accounts). Audited financial statements regarding American Skandia Life
Assurance Corporation as of December 31, 1994 and 1993, and the related
statements of operations, shareholder's equity, and cash flows for each of the
three years in the period ended December 31, 1994 and unaudited interim
financial statements are included in the Prospectus. Audited financial
statements for Variable Account B (Class 1 Sub-accounts) are included herein.
The audited financial statements included herein and in the Prospectus have
been audited by Deloitte & Touche LLP, independent auditors, as stated in the
report herein and in the Prospectus, and are included in reliance upon the
report of such firm given upon their authority as experts in accounting and
auditing. The Company's unaudited interim financial statements, in the opinion
of the management, have been prepared on the same basis as the audited
statements included herein and include all adjustments, consisting only of
normal recurring adjustments, necessary for a fair presentation of such data.
The results of operations for an interim period are not necessarily indicative
of the results for the full year or any other interim period.

LEGAL EXPERTS: Counsel with respect to Federal laws and regulations applicable
to the issue and sale of the Annuities and with respect to Connecticut law is
Werner & Kennedy, 1633 Broadway, New York, New York 10019.

FINANCIAL STATEMENTS FOR SEPARATE ACCOUNT B (CLASS 1 SUB-ACCOUNTS): The
financial statements which follow in Appendix A are those of American Skandia
Life Assurance Corporation Variable Account B (Class 1 Sub-accounts) for the
year ended December 31, 1994. There are other Sub-accounts included in
Variable Account B (Class 1) that are not available in the product described in
the applicable prospectus.

To the extent and only to the extent that any statement in a document
incorporated by reference into this Statement of Additional Information is
modified or superseded by a statement in this Statement of Additional
Information or in a later-filed document, such statement is hereby deemed so
modified or superseded and not part of this Statement of Additional
Information.

We furnish you without charge a copy of any or all of documents incorporated by
reference in this Statement of Additional Information, including any exhibits
to such documents which have been specifically incorporated by reference. We
do so upon receipt of your written or oral request. Please address your
request to American Skandia Life Assurance Corporation, Attention: Stagecoach,
P.O. Box 862, Shelton, Connecticut 06484. Our phone number is 1-(800)
680-8920.

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FINANCIALS TO FOLLOW

[TO BE FILED BY AMENDMENT]

6
<PAGE> 89

PART C

OTHER INFORMATION

1
<PAGE> 90

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS:

(a) All financial statements are included in Part A and Part B of the
Registration Statement.

(b) Exhibits are attached as indicated.

(1) Copy of the resolution of the board of directors of Depositor
authorizing the establishment of the Registrant for Separate
Account B (previously filed in the initial Registration
Statement No. 33-19363, filed December 30, 1987).

(2) Not applicable. American Skandia Life Assurance Corporation
maintains custody of all assets.

(3) (a) Form of Revised Principal Underwriting Agreement
between American Skandia Life Assurance Corporation
and American Skandia Marketing, Incorporated,
formerly Skandia Life Equity Sales Corporation
(previously filed in Post-Effective Amendment No. 3
to Registration Statement No. 33-44436, filed April,
20, 1993).

(b) Form of Revised Dealer Agreement (previously filed in
Post-Effective Amendment No. 3 to Registration
Statement No. 33-44436, filed April 20, 1993).

(4) Copy of the form of the Annuity. [TO BE FILED BY AMENDMENT]

(5) A copy of the form application used with the Annuity
(previously filed in Pre-Effective Amendment No. 2 to this
Registration Statement, filed March 15, 1994).

(6) (a) Copy of the certificate of incorporation of American
Skandia Life Assurance Corporation (previously filed
in Pre-Effective Amendment No. 2 to Registration
Statement No. 33-19363, filed July 27, 1988).

(b) Copy of the By-Laws of American Skandia Life
Assurance Corporation (previously filed in
Pre-Effective Amendment No. 2 to Registration
Statement No. 33-19363, filed July 27, 1988).

(7) Not applicable.

(8) (a) American Skandia Trust (previously filed in
Post-Effective Amendment No. 5 to Registration
Statement No. 33-19363, filed February 28, 1990. At
such time, what later became American Skandia Trust
was known as the Henderson Global Asset Trust).

(b) Life & Annuity Trust Agreement (previously filed in
Post-Effective Amendment No. 1 to Registration
Statement No. 33-71118, filed February 17, 1995).

(c) The Alger American Fund (previously filed in
Post-Effective Amendment No. 5 to Registration
Statement No. 33-19363, filed February 28, 1990).

(9) Opinion and consent of Werner & Kennedy.
[TO BE FILED BY AMENDMENT]

(10) Consent of Deloitte & Touche LLP.
[TO BE FILED BY AMENDMENT]

(11) Not applicable.

(12) Not applicable.

(13) Calculation of Performance Information for Advertisement of
Performance.

(14) Not applicable.

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<PAGE> 91

ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR: The Directors and Officers
of the Depositor are shown in Part A.

ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR
REGISTRANT: The Depositor does not directly or indirectly control any person.
The following persons are under common control with the Depositor by American
Skandia Investment Holding Corporation:

(1) American Skandia Information Services and Technology
Corporation ("ASIST"), formerly American Skandia Business
Services Corporation: The organization is a general business
corporation organized in the State of Delaware. Its primary
purpose is to provide various types of business services to
American Skandia Investment Holding Corporation and all of its
subsidiaries including computer systems acquisition,
development and maintenance, human resources acquisition,
development and management, accounting and financial reporting
services and general office services.

(2) American Skandia Marketing, Incorporated ("ASM.Inc."),
formerly Skandia Life Equity Sales Corporation: The
organization is a general business corporation organized in
the State of Delaware. It was formed primarily for the
purpose of acting as a broker-dealer in securities. It acts
as the principal "underwriter" of annuity contracts deemed to
be securities, as required by the Securities and Exchange
Commission, which insurance policies are to be issued by
American Skandia Life Assurance Corporation. It provides
securities law supervisory services in relation to the
marketing of those products of American Skandia Life Assurance
Corporation registered as securities. It also provides such
services in relation to marketing of certain public mutual
funds. It also has the power to carry on a general financial,
securities, distribution, advisory, or investment advisory
business; to act as a general agent or broker for insurance
companies and to render advisory, managerial, research and
consulting services for maintaining and improving managerial
efficiency and operation.

(3) American Skandia Investment Services, Incorporated ("ASISI"),
formerly American Skandia Life Investment Management, Inc.:
The organization is a general business corporation organized
in the state of Connecticut. The organization is authorized
to provide investment service and investment management advice
in connection with the purchasing, selling, holding or
exchanging of securities or other assets to insurance
companies, insurance-related companies, mutual funds or
business trusts. Its primary role is expected to be as
investment manager for certain mutual funds to be made
available primarily through the variable insurance products of
American Skandia Life Assurance Corporation.

(4) Skandia Vida: This subsidiary American Skandia Life Assurance
Corporation was organized in March, 1995, and is expected to
begin operations in July, 1995. It expects to be offering
investment oriented life insurance or annuity products
designed for long-term savings through independent banks and
brokers.

ITEM 27. NUMBER OF CONTRACT OWNERS: Not applicable.

ITEM 28. INDEMNIFICATION: Under Section 33-320a of the Connecticut General
Statutes, the Depositor must indemnify a director or officer against judgments,
fines, penalties, amounts paid in settlement and reasonable expenses including
attorneys' fees, for actions brought or threatened to be brought against him in
his capacity as a director or officer when certain disinterested parties
determine that he acted in good faith and in a manner he reasonably believed to
be in the best interests of the Depositor. In any criminal action or
proceeding, it also must be determined that the director or officer had no
reason to believe his conduct was unlawful. The director or officer must also
be indemnified when he is successful on the merits in the defense of a
proceeding or in circumstances where a court determines that he is fairly and
reasonable entitled to be indemnified, and the court approves the amount. In
shareholder derivative suits, the director or officer must be finally adjudged
not to have breached this duty to the Depositor or a court must determine that
he is fairly and reasonably entitled to be indemnified and must approve the
amount. In a claim based upon the director's or officer's purchase or sale of
the

3
<PAGE> 92

Registrants' securities, the director or officer may obtain indemnification
only if a court determines that, in view of all the circumstances, he is fairly
and reasonably entitled to be indemnified and then for such amount as the court
shall determine. The By-Laws of American Skandia Life Assurance Corporation
("ASLAC") also provide directors and officers with rights of indemnification,
consistent with Connecticut Law.

The foregoing statements are subject to the provisions of Section 33-320a.

Directors and officers of ASLAC and ASM, Inc. can also be indemnified pursuant
to indemnity agreements between each director and officer and American Skandia
Investment Holding Corporation, a corporation organized under the laws of the
state of Delaware. The provisions of the indemnity agreement are governed by
Section 45 of the General Corporation Law of the State of Delaware.

The directors and officers of ASLAC and ASM, Inc. are covered under a directors
and officers liability insurance policy issued by an unaffiliated insurance
company to Skandia Insurance Company Ltd., their ultimate parent. Such policy
will reimburse ASLAC or ASM, Inc., as applicable, for any payments that it
shall make to directors and officers pursuant to law and, subject to certain
exclusions contained in the policy, will pay any other costs, charges and
expenses, settlements and judgments arising from any proceeding involving any
director or officer of ASLAC or ASM, Inc., as applicable, in his or her past or
present capacity as such.

Registrant hereby undertakes as follows: Insofar as indemnification for
liabilities arising under the Securities Act of 1933 (the "Act") may be
permitted to directors, officers and controlling persons of Registrant pursuant
to the foregoing provisions, or otherwise, Registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and, therefore, is unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by Registrant of expenses incurred or paid by a director,
officer or controlling person of Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, unless
in the opinion of Registrant's counsel the matter has been settled by
controlling precedent, Registrant will 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) At present, ASM, Inc. acts as principal underwriter only for annuities
to be issued by ASLAC.

(b) Directors and officers of ASM,Inc.

<TABLE>
<CAPTION>
Positions and Offices
Name and Principal Business Address with Underwriter
- ------------------ ---------------- ---------------------------
<S> <C>
Gordon C. Boronow Vice President and Director
American Skandia Life Assurance Corporation
One Corporate Drive, P.O. Box 883
Shelton, Connecticut 06484-0883

Jan R. Carendi Chief Executive Officer
Skandia Insurance Company Ltd. and Chairman of the
Sveavagen 44, S-103 50 Stockholm, Sweden Board of Directors

Wade A. Dokken President, Chief Operating
American Skandia Life Assurance Corporation Officer and Director
One Corporate Drive, P.O. Box 883
Shelton, Connecticut 06484-0883

N. David Kuperstock Assistant Vice President,
American Skandia Life Assurance Corporation Staff Counsel and Director
One Corporate Drive, P.O. Box 883
Shelton, Connecticut 06484-0883
</TABLE>

4
<PAGE> 93

<TABLE>
<S> <C>
Thomas M. Mazzaferro Vice President and
American Skandia Life Assurance Corporation Chief Financial Officer
One Corporate Drive, P.O. Box 883
Shelton, Connecticut 06484-0883

Mary Ellen O'Leary Assistant Vice President and
American Skandia Life Assurance Corporation Staff Counsel
One Corporate Drive, P.O. Box 883
Shelton, Connecticut 06484-0883

M. Patricia Paez Assistant Corporate Secretary
American Skandia Life Assurance Corporation
One Corporate Drive, P.O. Box 883
Shelton, Connecticut 06484-0883

M. Priscilla Pannell Corporate Secretary
American Skandia Life Assurance Corporation
One Corporate Drive, P.O. Box 883
Shelton, Connecticut 06484-0883

Amanda C. Sutyak Vice President
American Skandia Life Assurance Corporation
One Corporate Drive, P.O. Box 883
Shelton, Connecticut 06484-0883

C. Ake Svensson Treasurer
American Skandia Life Assurance Corporation
One Corporate Drive, P.O. Box 883
Shelton, Connecticut 06484-0883
</TABLE>

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS: Accounts and records are
maintained by ASLAC at its principal office in Shelton, Connecticut.

ITEM 31. MANAGEMENT SERVICES: None

ITEM 32. UNDERTAKINGS:

(a) Registrant hereby undertakes to file a post-effective amendment to
this Registration Statement as frequently as is necessary to ensure that the
audited financial statements in the Registration Statement are never more than
16 months old so long as payments under the annuity contracts may be accepted
and allocated to the Sub-accounts of Separate Account B.

(b) Registrant hereby undertakes to include either (1) as part of any
enrollment form or application to purchase a contract offered by the
prospectus, a space that an applicant or enrollee can check to request a
Statement of Additional Information, or (2) a post card or similar written
communication affixed to or included in the prospectus that the applicant can
remove to send for a Statement of Additional Information.

(c) Registrant hereby undertakes to deliver any Statement of Additional
Information and any financial statements required to be made available under
this form promptly upon written or oral request.

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<PAGE> 94

SIGNATURES

As required by the Securities Act of 1933 and the Investment Company
Act of 1940, the Registrant has duly caused this registration statement to be
signed on its behalf, in the Town of Shelton and State of Connecticut, on this
2nd day of June, 1995.

AMERICAN SKANDIA LIFE ASSURANCE CORPORATION VARIABLE ACCOUNT B
(CLASS 1 SUB-ACCOUNTS)
REGISTRANT

BY: AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
------------------------------------------------

By:s/M. Patricia Paez Attest:s/Diana D. Steigauf
M. Patricia Paez, Corporate Secretary Diana D. Steigauf

AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
DEPOSITOR

By:s/M. Patricia Paez Attest:s/Diana D. Steigauf
M. Patricia Paez, Corporate Secretary Diana D. Steigauf

As required by the Securities Act of 1933, this Registration Statement has been
signed by the following persons in the capacities and on the date indicated.

<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
(PRINCIPAL EXECUTIVE OFFICER)
<S> <C> <C>
Jan R. Carendi*
--------------- Chief Executive Officer, June 2, 1995
Jan R. Carendi Chairman of the Board and Director

(PRINCIPAL FINANCIAL OFFICER AND PRINCIPAL ACCOUNTING OFFICER)

s/Thomas M. Mazzaferro Senior Vice President and June 2, 1995
Thomas M. Mazzaferro Chief Financial Officer

(BOARD OF DIRECTORS)

Jan. R. Carendi* Gordon C. Boronow* Malcolm M. Campbell*
---------------- ------------------ --------------------
Jan. R. Carendi Gordon C. Boronow Malcolm M. Campbell

Henrik Danckwardt* Amanda C. Sutyak* Wade A. Dokken*
------------------ ----------------- ---------------
Henrik Danckwardt Amanda C. Sutyak Wade A. Dokken

Thomas M. Mazzaferro** Gunnar Moberg** Bayard F. Tracy**
---------------------- --------------- -----------------
Thomas M. Mazzaferro Gunnar Moberg Bayard F. Tracy

Anders Soderstrom** C. Ake Svensson***
- ------------------- ------------------
Anders Soderstrom C. Ake Svensson
</TABLE>
*/**/***By:s/M. Patricia Paez
M. Patricia Paez

*Pursuant to Powers of Attorney previously filed with Post-Effective
Amendment No. 10 to Registration Statement No. 33-19363
**Pursuant to Powers of Attorney previously filed with the initial
filing of Registration Statement No. 33-86918.
***Pursuant to Power of Attorney previously filed with the initial
filing of Registration Statement No. 33-88360.

<PAGE> 95

EXHIBITS

As noted in Item 24 (b), various exhibits are incorporated by
reference, will be filed by amendment or are not applicable.
The exhibits included are as follows:

No. 9 Opinion and consent of Werner & Kennedy [TO
BE FILED BY AMENDMENT]

No. 10 Consent of Deloitte & Touche LLP [TO BE FILED
BY AMENDMENT]

No. 13 Calculation of Performance Information for
Advertisement of Performance

<PAGE> 1
EXHIBIT NO. 13
<PAGE> 2

CALCULATION OF PERFORMANCE INFORMATION FOR ADVERTISEMENT OF PERFORMANCE

I. Money Market Type Sub-account - Current and Effective Yield

This Registration Statement includes, in the Prospectus, current and effective
yields for a money market type Sub-account in which Units were held during the
seven day period ending December 31, 1994.

The Unit Values used to show the current and effective yields for the Wells
Fargo Money Market Sub-account were:

Beginning of the period: 10.167517
End of the period: 10.175956

II. Other Types of Sub-accounts - Total Return

This Registration Statement includes, in the Statement of Additional
Information, Total Return figures for the Sub-accounts (other than money market
type Sub-accounts) shown. Both "standard" and "non-standard" figures were
provided for the periods 1 year, 3 year, 5 year and inception-to-date for those
Sub-accounts which were available prior to 1995 pursuant to a different offer
made by the Registrant pursuant to a different prospectus. However, the
calculation of the Total Return figures shown uses the charges applicable to
the annuities offered pursuant to this Registration Statement. A description
of how such values were calculated is provided below for all of the figures.

The Registrant expects to currently use 1 year, 3 year, 5 year and
inception-to-date figures. As Sub-accounts age, 10 year figures will be added.
The inception-to-date figures shown in the Statement of Additional Information
use December 31, 1994 as the end of the measuring period.

The formula for calculating standard and non-standard total return for each
period was as follows:

A. Standard Total Return - 1 Year

Standard Total Return = (1 + x) - .07 - 1; where

x = Sub-account total return for the year 1994;

.07 represents the contingent deferred sales charge during the
first year subsequent to a Purchase Payment.

B. Non-standard Total Return - 1 Year

Non-standard Total Return = (1 + x) - 1; where x is defined as in A,
above.

C. Standard Total Return - 3 Year

Standard Total Return = [(1 + x) - .06](1/3) - 1; where

x = Sub-account total return for the year 1994;

.06 represents the contingent deferred sales charge during the
third year subsequent to a Purchase Payment.

D. Non-standard Total Return - 3 Year

Non-standard Total Return = (1 + x)(1/3) - 1; where x is defined as in
C, above.

1
<PAGE> 3

E. Standard Total Return - 5 Year

Standard Total Return = [(1 + x) - .04](1/5) - 1; where

x = Sub-account total return for the year 1994;

.04 represents the contingent deferred sales charge during the
fifth year subsequent to a Purchase Payment.

F. Non-standard Total Return - 5 Year

Non-standard Total Return = (1 + x)(1/5) - 1; where x is defined as in
E, above.

G. Standard Total Return - Inception-to-date

Standard Total Return = (1 + x)(365/N) - CDSC - 1 IF N IS LESS THAN
365; or

[(1 + x) - CDSC](365/N) - 1 IF N IS GREATER
THAN OR EQUAL TO 365; where

x = Sub-account total return from inception to December 31,
1994;

N = Number of days from inception to December 31, 1994;

CDSC = Contingent deferred sales charge applicable to such
Annuity as of 12/31/94.

H. Non-standard Total Return - Inception-to-date

Non-standard Total Return = (1 + x)(365/N) - 1; where x and N are
defined as in G, above.

The Total Return values shown in the Statement of Additional Information were
based on the Unit Price of $10.00 on the date of inception of the Sub-account,
and the Unit Prices on 12/31/94 as shown in section entitled "Condensed
Financial Information" of the Prospectus.