KEYNOTE SERIES ACCOUNT /NY/, 497, 2000-05-23

KEYNOTE SERIES ACCOUNT /NY/
497, 2000-05-23

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<PAGE> 1

KEYNOTE
SERIES ACCOUNT

MONEY MARKET SUBACCOUNT

INTERMEDIATE GOVERNMENT BOND SUBACCOUNT

CORE BOND SUBACCOUNT

BALANCED SUBACCOUNT

VALUE & INCOME SUBACCOUNT

EQUITY GROWTH SUBACCOUNT

CALVERT SERIES SUBACCOUNT

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

MAY 1, 2000

[MONY LOGO]
<PAGE> 2

KEYNOTE
SERIES ACCOUNT
("KEYNOTE")
GROUP VARIABLE ANNUITY CONTRACTS
SECTIONS 401(a), 401(k), 403(b), 408(IRA), 457 AND NQDC

ISSUED BY

MONY LIFE INSURANCE COMPANY("MONY")
1740 BROADWAY, NEW YORK, NEW YORK 10019; (914) 697-8000

MONY Life Insurance Company was organized as a mutual life insurance company
under the laws of the State of New York in 1842 under the name The Mutual Life
Insurance Company of New York. In 1998 MONY converted to a stock company through
demutualization and was renamed MONY Life Insurance Company ("MONY"). The
demutualization did not have any material effect on the Group Variable Annuity
Contracts.

The Group Variable Annuity Contracts ("Contracts") described in this
Prospectus are designed and offered as funding vehicles for retirement plans
maintained by state educational organizations, certain tax-exempt organizations,
IRA Contractholders, taxed organizations in the case of the Section 401(a)
and/or Section 401(k) Contracts and corporate nonqualified deferred compensation
contracts ("NQDC"). The Section 401(k) Contract will fund the benefits for tax
qualified pension and profit-sharing plans from employee contributions of such
organizations and employer contributions, if any. The Section 403(b) Contract
will purchase tax-deferred annuities for the employees of these same
organizations. The Section 457 Contract will provide deferred compensation
eligible for deferred tax treatment. The Section 401(a) Contract will fund
benefits for tax-qualified pension and profit-sharing plans of such
organizations as well as taxed subsidiaries of such organizations and
stand-alone taxed organizations. The Section 408 (Individual Retirement Account
("IRA")) Contract is a Group Variable Annuity Contract which will provide for
on-going or rollover contributions, from employees of tax-exempt or taxed
organizations and from members and employees of associations. The NQDC Contract
will provide deferred compensation eligible for deferred tax treatment to
employees of taxed organizations. Section references are to the Internal Revenue
Code of 1986, as amended.

Insofar as possible, the provisions of the Contracts are identical, and the
information provided in this Prospectus is generally applicable to all
Contracts. However, whenever statutory or administrative considerations require
significant differences among the Contracts, such differences are explained
separately for each.

Purchase Payments under the Contracts are allocated to a segregated
investment account of MONY Life Insurance Company ("MONY"), which account has
been designated Keynote. Purchase Payments directed to Keynote may be allocated
among such of the Subaccounts in Keynote as are made available under the
Contracts. The assets in each Subaccount are invested in a series of Diversified
Investors Portfolios or in the Calvert Social Balanced Portfolio ("Calvert
Series") at their net asset value. (See "Diversified Investors Portfolios" at
page 13 and Calvert Series at page 12.) The six currently available Series of
Diversified Investors Portfolios are the Money Market Series, Intermediate
Government Bond Series, Core Bond Series (formerly Government/Corporate Bond
Series), Balanced Series, Value & Income Series, formerly Equity Income and
Equity Growth Series. The Calvert Series is an actively managed, diversified
portfolio of common and preferred stocks, bonds, and money market instruments
which offer income and capital growth opportunity and which satisfy the social
concern criteria established by the Calvert Series. A copy of the Calvert Series
Prospectus appears at the end of this Keynote Prospectus.

KEYNOTE SUBACCOUNTS WHICH INVEST IN DIVERSIFIED INVESTORS PORTFOLIOS DO SO
UNDER A CORE/FEEDER ARRANGEMENT. UNLIKE OTHER FUNDING VEHICLES INTO WHICH
PURCHASE PAYMENTS MAY BE INVESTED THROUGH VARIABLE ANNUITY CONTRACTS ISSUED BY
INSURANCE COMPANIES, DIVERSIFIED INVESTORS PORTFOLIOS OFFERS ITS INTERESTS FOR
SALE TO OTHER TYPES OF COLLECTIVE INVESTMENT VEHICLES IN ADDITION TO INSURANCE
COMPANY SEPARATE ACCOUNTS REGISTERED AS INVESTMENT COMPANIES UNDER THE
INVESTMENT COMPANY ACT OF 1940. SUCH INVESTORS MAY INCLUDE MUTUAL FUNDS, BANK
COLLECTIVE TRUSTS AND UNREGISTERED INSURANCE COMPANY SEPARATE ACCOUNTS. SEE
"DIVERSIFIED INVESTORS PORTFOLIOS -- CORE/FEEDER STRUCTURE" ON PAGE 31 HEREIN.

The value of the Accumulation Accounts maintained in Keynote will vary based
upon the investment experience of the Subaccounts to which Purchase Payments are
allocated. The investment experience of the Subaccounts will vary based on the
underlying investment performance of the series of Diversified Investors
Portfolios and the Calvert Series.

This Prospectus sets forth the basic information that a prospective
purchaser should know before investing. Please keep this Prospectus for future
reference.

A Statement of Additional Information dated May 1, 2000 incorporated herein
by reference, and containing additional information about the Contracts and
Diversified Investors Portfolios, has been filed with the Securities and
Exchange Commission. The Statement of Additional Information is available from
MONY without charge upon written request to the above address or by telephoning
(914) 697-8000. The Table of Contents of the Statement of Additional Information
can be found on page 52 of this Prospectus.

This Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy the Contracts in any jurisdiction in which such may not be lawfully
made.

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. THIS
PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED (OR PRECEDED) BY A CURRENT PROSPECTUS
FOR THE CALVERT SERIES.
DATED MAY 1, 2000
<PAGE> 3

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Definitions................................................. 4
Synopsis.................................................... 6
Fee Table................................................... 6
The Contracts............................................... 7
Keynote..................................................... 8
Charges..................................................... 8
Credit And Allocation Of Purchase Payments.................. 9
Redemption.................................................. 9
Transfers................................................... 9
Payment Options............................................. 9
Voting Rights............................................... 9
Death Benefit............................................... 10
Distribution Of The Contracts............................... 10
Condensed Financial Information............................. 11
MONY........................................................ 12
Keynote Series Account...................................... 12
Calvert Series.............................................. 12
Diversified Investors Portfolios............................ 13
The Transaction............................................. 14
Charges..................................................... 15
Charges for Mortality and Expense Risks..................... 15
Annual Contract Charge...................................... 15
Investment Management Fee................................... 15
Premium Tax................................................. 16
Summary Of The Contracts.................................... 17
Eligible Purchasers......................................... 17
Ownership................................................... 17
Purchase Payments........................................... 17
Employer Sponsored Plan Requirements........................ 17
Rights Of The Participant Under The Contract................ 17
Rights Upon Suspension Of Contract or Termination Of Plan... 18
403(b) Contract............................................. 18
401(a) Contract/401(k) Contract and NQDC.................... 18
457 and 408 (IRA) Contracts................................. 18
Failure Of Qualification.................................... 18
Transfers................................................... 18
Rights Reserved By MONY..................................... 19
Credit Of Purchase Payments................................. 19
Allocation Of Purchase Payments............................. 19
Determination Of Unit Values................................ 20
Death Benefit............................................... 20
Redemption During The Accumulation Period................... 21
Restrictions Under The Texas Optional Retirement Program.... 21
Payment Options............................................. 21
Annuity Purchase Date....................................... 21
Fixed Annuity............................................... 22
Fixed Annuity Options....................................... 22
Payments To A Beneficiary Following The Annuitant's Death... 23
Voting Rights............................................... 23
</TABLE>

2
<PAGE> 4

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Distribution Of The Contracts............................... 24
Federal Tax Status.......................................... 25
Tax Treatment of MONY....................................... 25
Taxation of Diversified Investors Portfolios................ 25
Section 403(b) Annuities.................................... 25
Section 401(a) Plans........................................ 26
Section 408 (IRA) Contracts................................. 27
Minimum Distribution Requirements........................... 27
Section 457 Plans........................................... 28
Non-Qualified Deferred Compensation Contracts............... 28
Income Tax Withholding...................................... 28
Performance Data............................................ 30
Diversified Investors Portfolios............................ 31
Core/Feeder Structure....................................... 31
Investment Objectives and Policies.......................... 32
Investment Techniques and Restrictions...................... 43
Management of Diversified Investors Portfolios.............. 45
Other Information Regarding Diversified Investors
Portfolios................................................ 48
Purchase and Redemption of Interests in Diversified
Investors Portfolios...................................... 48
Experts..................................................... 51
Legal Proceedings........................................... 51
Financial Statements........................................ 51
Additional Information...................................... 51
Miscellaneous............................................... 51
Table Of Contents Of Statement Of Additional Information.... 52
Request For Keynote Statement Of Additional Information..... 53
Appendix.................................................... 54
</TABLE>

3
<PAGE> 5

DEFINITIONS

As used in this Prospectus, the following terms have the indicated meaning:

ACCUMULATION ACCOUNT: an account maintained for each Participant in which
is recorded the number of Units held for his/her credit.

ACCUMULATION PERIOD: the accumulation period for each Participant is the
period during which Purchase Payments may be made on his/her behalf. It begins
when the Participant begins participation under the Plan and ends as of his/her
Annuity Purchase Date (See "Annuity Purchase Date" page 21), or earlier
termination of his/her Accumulation Account.

BALANCED SERIES: Diversified Investors Balanced Portfolio, a series of
Diversified Investors Portfolios.

CALVERT SERIES: the Calvert Social Balanced Portfolio, a series of Calvert
Variable Series, Inc., an open-end management investment company registered
under the Investment Company Act of 1940, as amended.

CONTRACT(S): the group variable annuity contract(s) offered by MONY to
Contractholders or IRA Contractholders as described in this Prospectus.

CONTRACTHOLDER: a state educational organization or certain tax-exempt
organization employer or employer association for affiliated employers, taxed
subsidiaries of tax-exempt organizations and taxed stand alone organizations.

CONTRACT YEAR: a period of 12 months measured from the date of the Contract
issued to or adopted by the Contractholder, and anniversaries thereof.

DIVERSIFIED: Diversified Investment Advisors, Inc., a registered investment
adviser under the Investment Advisers Act of 1940.

DIVERSIFIED INVESTORS PORTFOLIOS: Diversified Investors Portfolios, an
open-end diversified management investment company registered under the
Investment Company Act of 1940, as amended.

EQUITY GROWTH SERIES: Diversified Investors Equity Growth Portfolio, a
series of Diversified Investors Portfolios.

FIXED ANNUITY: an annuity with payments which remain fixed throughout the
payment period and which do not reflect the investment experience of a separate
account.

CORE BOND SERIES: Diversified Investors Core Bond Portfolio, a series of
Diversified Investors Portfolios.

INTERMEDIATE GOVERNMENT BOND SERIES: Diversified Investors Intermediate
Government Bond Portfolio, a series of Diversified Investors Portfolios.

IRA CONTRACTHOLDER: a tax-exempt or taxed organization or an association of
members who share a common interest.

MONEY MARKET SERIES: Diversified Investors Money Market Portfolio, a series
of Diversified Investors Portfolios.

NQDC: Non-qualified deferred compensation arrangement available to taxed
organizations only.

PARTICIPANT: an employee participating under a Contract issued to or
adopted by his/her employer.

PLAN: a retirement plan or program under which benefits are to be provided
pursuant to a Contract described herein.

PORTFOLIO BUSINESS DAY: each day during which the Advisers of a Series are
open for business.

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<PAGE> 6

PURCHASE PAYMENT: the amount contributed and remitted to MONY by an
employer on behalf of a Participant.

SUBSTITUTION: the investment by Keynote Subaccounts in corresponding series
of Diversified Investors Portfolios of the proceeds received upon the redemption
by each Subaccount of shares of MONY Series Fund, Inc. in accordance with an
order of the Securities and Exchange Commission dated June 8, 1994.

SUBACCOUNT: a subdivision of Keynote which is available for the allocation
of Purchase Payments under the Contracts. Six Subaccounts invest in a
corresponding series of Diversified Investors Portfolios. The Calvert Series
Subaccount invests in the Calvert Series.

UNIT: the measure by which the value of an investor's interest in each
Subaccount is determined.

VALUATION DATE: each day at the close of business of the New York Stock
Exchange (currently at 4:00 p.m. New York City time), that the New York Stock
Exchange is open for trading or any other day on which there is sufficient
trading in securities of a series of Diversified Investors Portfolios or the
Calvert Series to affect materially the value of the Units of the corresponding
Subaccount. If the New York Stock Exchange extends its closing beyond 4:00 p.m.
New York City time, and continues to value after the time of closing of the
NYSE, MONY reserves the right to treat any payment or communication received
after 4:00 p.m. New York City time as being received as of the beginning of the
next day.

VALUATION PERIOD: The period between the ending of two successive Valuation
Dates.

VALUE & INCOME SERIES: Diversified Investors Equity Income Portfolio, a
series of Diversified Investors Portfolios.

NO PERSON IS AUTHORIZED TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS
OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS.

5
<PAGE> 7

SYNOPSIS

MONY LIFE INSURANCE COMPANY
KEYNOTE SERIES ACCOUNT

TABLE OF FEES(1)

<TABLE>
<S> <C>
Total Separate Account Annual Expenses (as a percentage of average
account values)
Mortality and Expense Risk Fees............................. 1.10%(2)
</TABLE>

(1) In addition to the mortality and expense risk fees, MONY reserves the
right to deduct an annual contract charge from a Participant's Accumulation
Account not to exceed $50. See "Charges -- Annual Contract Charge" at page 15.

(2) MONY reserves the right to charge maximum mortality and expense risk
fees of up to 1.25% upon notice.

Portfolio Company Annual Expenses:

DIVERSIFIED INVESTORS PORTFOLIOS AND CALVERT SOCIAL BALANCED PORTFOLIO
ANNUAL EXPENSES FOR THE YEAR ENDED DECEMBER 31, 1999
(AS A PERCENTAGE OF AVERAGE NET ASSETS)

<TABLE>
<CAPTION>
INTERMEDIATE
MONEY GOVERNMENT CORE VALUE & EQUITY
MARKET BOND BOND BALANCED INCOME GROWTH CALVERT
SERIES SERIES SERIES SERIES SERIES SERIES SERIES
------ ------------ ------ -------- ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
Management Fee (After fee
reimbursements)(1)................... 0.25% 0.35% 0.35% 0.45% 0.45% 0.62% 0.70%
Other Expenses(2)...................... 0.03% 0.04% 0.02% 0.05% 0.02% 0.02% 0.16%
Reimbursement from MONY(3)............. (0.18)% -- -- -- -- (0.14)% --
----- ---- ---- ---- ----- ----- ----
Total Annual Expenses After Fee
Reimbursements(4).................... 0.10% 0.39% 0.37% 0.50% 0.47% 0.50% 0.86%
</TABLE>

- ---------------
(1) The fees shown on the line "Management Fee" are the fees charged to each
series of Diversified Investors Portfolios by Diversified Investment
Advisors, Inc., after waiver. The expense table for Portfolio Company Annual
Expenses and the example reflect a voluntary undertaking by Diversified to
waive a portion of the investment advisory fees payable by series of
Diversified Investors Portfolios. Without such a waiver, the annual
investment advisory fee would be 0.25% for the Money Market Series, 0.35%
for the Intermediate Government Bond Series, 0.35% for the Core Bond Series,
0.45% for the Balanced Series, 0.45% for the Value & Income Series and 0.62%
for the Equity Growth Series. For the Calvert Series, the fees shown are
those charged by Calvert Asset Management Company to the Calvert Series.

(2) "Other Expenses" for each series of Diversified Investors Portfolios and for
the Calvert Series are actual for the year ended December 31, 1999.

(3) MONY has agreed to provide reimbursements to limit total Diversified
Investors Portfolios expenses for Keynote Participants in the Money Market
Series and the Equity Growth Series to .10% and .50%, respectively, of
average net assets of the applicable series with MONY reserving the right to
raise the limit upon notice.

(4) "Total Annual Expenses After Fee Reimbursements" for certain of the series
of Diversified Investors Portfolios reflect voluntary waivers and
reimbursements by Diversified. In the absence of such waivers and
reimbursements, "Total Annual Expenses After Fee Reimbursements" would be as

6
<PAGE> 8

follows for the following series: Money Market Series -- 0.28%; Intermediate
Government Bond Series -- 0.39%; Core Bond -- 0.37%; Balanced -- 0.50%;
Equity Income Series -- 0.46%; and Equity Growth Series -- 0.64%.

(5) Prior to August 17, 1999, Core Bond was named Diversified Investor
Government/Corporate Bond Series.

(6) Prior to April 5, 2000, Value & Income Portfolio was named Diversified
Investors Equity Income Portfolio.

The purpose of this table is to assist you in understanding the various
costs and expenses that you will bear directly and indirectly and reflects
expenses of the separate account as well as the portfolio applicable company.
(See Charges at page 15 for a more complete description of applicable costs and
expenses.)

Example

If you (i) surrender your contract at the end of the applicable time
period, (ii) annuitize at the end of the applicable time period or (iii) do not
surrender your contract, you would pay the following expenses on a $1,000
investment, assuming a 5% annual rate of return.

These examples assume a 5% return each year (the assumption of a 5% return
is required by the SEC for these examples and is not a prediction of any
subaccount's future performance). These examples should not be considered a
representation of past or future expenses, and actual expenses may be greater or
lesser than those shown. Premium taxes may also be applicable.

This example is based on fees after waivers and reimbursements as if those
waivers and reimbursements were in effect for the full 10 year period covered by
the example and reflect the imposition of the 1.10% mortality and expense risk
charge presently in effect.

<TABLE>
<CAPTION>
AFTER AFTER AFTER AFTER
SUBACCOUNT 1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
Money Market............................................ $12 $38 $ 66 $145
Intermediate Government Bond............................ $15 $47 $ 81 $178
Core Bond............................................... $15 $46 $ 80 $176
Balanced................................................ $16 $50 $ 87 $190
Value & Income.......................................... $16 $50 $ 86 $187
Equity Growth........................................... $16 $50 $ 87 $190
Calvert Series.......................................... $20 $62 $106 $229
</TABLE>

This example is based on fees after waivers and reimbursements as if those
waivers and reimbursements were in effect for the full 10 year period covered by
the example and reflects the imposition of the maximum mortality and expense
risk charge of 1.25% which may be imposed by MONY.

<TABLE>
<CAPTION>
AFTER AFTER AFTER AFTER
SUBACCOUNT 1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
Money Market............................................ $14 $43 $ 74 $162
Intermediate Government Bond............................ $17 $52 $ 89 $194
Core Bond............................................... $16 $51 $ 88 $192
Balanced................................................ $18 $55 $ 95 $206
Value & Income.......................................... $17 $54 $ 93 $203
Equity Growth........................................... $18 $55 $ 95 $206
Calvert................................................. $21 $66 $113 $244
</TABLE>

THE CONTRACTS

The Group Variable Annuity Contract(s) ("Contract(s)") described in this
Prospectus are designed and offered as funding vehicles for retirement Plans
maintained by state educational organizations, certain tax-exempt organizations,
IRA Contractholders and for taxed organizations for

7
<PAGE> 9

Section 401(a) and/or Section 401(k) Contracts and corporate nonqualified
deferred compensation Contracts ("NQDC"). The Section 401(k) Contract will fund
the benefits for tax-qualified pension and profit-sharing plans from
employee/employer contributions of such organizations. The Section 403(b)
Contract will purchase tax-deferred annuities for employees of these same
organizations. The Section 457 Contract will provide deferred compensation
eligible for deferred tax treatment. The Section 401(a) Contract will fund
benefits for tax-qualified pension and profit-sharing Plans of such tax-exempt
organizations as well as taxed subsidiaries of these organizations and
stand-alone taxed organizations; the non-qualified deferred compensation
Contracts ("NQDC") will fund benefits for taxed organizations. The Section 408
(Individual Retirement Account ("IRA")) Contract is a Group Variable Annuity
Contract which will provide for on-going or rollover contributions from
employees of tax-exempt or taxed organizations and from members and employees of
associations. Section references are to the Internal Revenue Code of 1986, as
amended (the "Code").

With respect to Section 401(a), Section 401 (k) and NQDC Contracts, the
employer and/or the employee will make contributions pursuant to the terms and
conditions of the underlying retirement Plan. As to the Section 403(b) and
Section 457 Contracts, the employer will make Purchase Payments for each
participating employee pursuant to either a salary reduction agreement or an
agreement to forego a salary increase under which the employee decides the level
and number of Purchase Payments to his/her Accumulation Account, except with
respect to employer-sponsored Section 401(a) Plans under which the employer will
make contributions pursuant to the underlying retirement Plan. In the case of
the Section 408 IRA Contract, the employer will make Purchase Payments on behalf
of and as determined by each participating employee pursuant to a salary
deduction agreement.

KEYNOTE

Purchase Payments under the Contract(s) are allocated to Keynote which is a
separate account of MONY. Keynote is divided into Subaccounts, six of which
correspond to Diversified Investors Portfolios' Money Market, Intermediate
Government Bond, Core Bond, Balanced, Value & Income, and Equity Growth Series,
respectively. The Calvert Series Subaccount invests in the Calvert Series. The
assets in each Subaccount are invested in the corresponding series of
Diversified Investors Portfolios or the Calvert Series at their net asset value
(See "Diversified Investors Portfolios" at page 13 and "Calvert Series" at page
12.) Each series of Diversified Investors Portfolios is managed by Diversified
Investment Advisors, Inc. ("Diversified"). MONY Securities Corp., a wholly-owned
subsidiary of MONY, is the principal underwriter and distributor. The Calvert
Series is a series of Calvert Variable Series, Inc., (formerly, Acacia Capital
Corporation,) (the "Fund") a diversified open-end management company whose
investment adviser is Calvert Asset Management Company, Inc.

The value of a Participant's Accumulation Account maintained in Keynote
will vary based upon the investment experience of the series of Diversified
Investors Portfolios or the Calvert Series to which Purchase Payments are
allocated.

The Calvert Series is an actively managed portfolio of common and preferred
stocks, bonds, and money market instruments which offer income and capital
growth opportunity and which satisfy the social concern criteria established by
the Calvert Series. A copy of the Calvert Series Prospectus appears at the end
of this Keynote Prospectus. Diversified Investors Portfolios is an open-end,
diversified management investment company which has six series with differing
investment objectives available under the Contracts. See "Diversified Investors
Portfolios" at page 13 herein.

CHARGES

MONY makes daily charges against the net assets of Keynote at a maximum
annual rate of 1.25%, consisting of .80% for mortality risks and .45% for
administrative expense risks. The annual rate charged

8
<PAGE> 10

is 1.10% consisting of .70% for mortality risks and .40% for administrative
expense risk. However, MONY reserves the right to charge a maximum fee of 1.25%
upon notice thereafter. (See "Charges -- Charges for Mortality and Expense
Risks" on page 15.) In addition, MONY reserves the right to deduct an annual
contract charge, not to exceed $50, from a Participant's Accumulation Account
(See "Charges -- Annual Contract Charge" on page 15.)

In addition to the charges set forth above, Diversified, which serves as an
investment adviser to each series of Diversified Investors Portfolios, and
Calvert Asset Management Company, Inc., which serves as investment adviser to
the Calvert Series, impose a charge against the net asset value of each series
of Diversified Investors Portfolios or the Calvert Series, as appropriate,
computed daily, for investment advisory services and other expenses.

Premium taxes may be payable on annuity considerations. (See "Premium Tax"
on page 16.)

CREDIT AND ALLOCATION OF PURCHASE PAYMENTS

Purchase Payments will be credited to the Subaccounts designated by the
Participant in the form of Units. The number of Units credited will not change
but the dollar value of a Unit will vary depending upon the investment
experience of the series of Diversified Investors Portfolios or the Calvert
Series, as appropriate. (See "Credit of Purchase Payments" on page 19.)

REDEMPTION

A Participant may redeem at any time prior to the time an annuity benefit
takes effect and prior to his death all or a portion of the Units credited to
his Accumulation Account without any charge, subject to any limitations in the
underlying Plan. There are no redemption charges. (See "Restrictions Under the
Texas Optional Retirement Program" on page 21, for withdrawal restrictions
applicable to Contracts issued under the Texas Optional Retirement Program.)

A penalty tax may be payable under the Code upon the redemption of amounts
from an Accumulation Account under the Contract and other significant withdrawal
restrictions may be imposed by the Code. (See, "Section 403(b) Annuities" on
page 25 and "Section 408 IRA Contracts" on page 27.)

TRANSFERS

A Participant may transfer all or a portion of his/her Accumulation Account
in Keynote among the various Subaccounts. No transfer charges are imposed, and
there is no limit to the number of transfers. While MONY has no present
intention to do so, it reserves the right to impose transfer charges at a later
date. Transfers may be made in writing or by telephone by calling (914)
697-8000. (See "Transfers" on page 18.) MONY reserves the right to discontinue
allowing telephone transfers.

PAYMENT OPTIONS

Unless a Fixed Annuity is elected, a Participant will receive a lump sum
payment at the end of the Accumulation Period. The Contracts may provide for
several Fixed Annuity options: Life Annuity, Life Annuity With Period Certain,
Specified Fixed Period Annuity, Contingent Annuity and Contingent Annuity With
Period Certain. For NQDC, an installment payment option may also be available.
(See "Payment Options" on page 21.)

VOTING RIGHTS

To the extent required by law, MONY will vote the interests in Diversified
Investors Portfolios and the Calvert Series held in Keynote in accordance with
the instructions received from Contractholders, IRA Contractholders and NQDC
Contractholders; the Contractholders will instruct MONY in accordance with the
instructions received from Participants. (See "Voting Rights" on page 23.)

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<PAGE> 11

DEATH BENEFIT

If a Participant dies before the Annuity Purchase Date, the Accumulation
Account value will be paid to his/her beneficiary in a lump sum. (See "Death
Benefit" on page 20.)

DISTRIBUTION OF THE CONTRACTS

MONY Securities Corp. ("MSC") will be the principal underwriter and
distributor of the Contracts which will be sold by registered representatives
who are also licensed insurance agents of MONY. The Contracts may also be sold
through other broker-dealers authorized by MSC and applicable law and who may be
insurance agents licensed by an insurance company other than MONY. (See
"Distribution of the Contracts" on page 24.)

10
<PAGE> 12

CONDENSED FINANCIAL INFORMATION
KEYNOTE SERIES ACCOUNT
ACCUMULATION UNIT VALUES

KEYNOTE SUBACCOUNT*
<TABLE>
<CAPTION>
UNIT VALUE
------------------------------------------------------------------------------------------------
DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1990 1991 1992 1993 1994 1995 1996 1997 1998
-------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Equity Growth........ $13.65 $18.32 $18.07 $19.67 $21.65 $25.58 $30.06 $37.99 $51.57
Money Market......... 11.81 12.49 12.90 13.20 13.65 14.35 15.00 15.71 16.45
Balanced............. 12.74 15.29 15.37 16.92 16.66 21.25 24.62 29.12 32.46
Core Bond............ 12.38 14.52 15.71 17.81 16.70 19.63 20.10 21.66 23.15
Value & Income....... 11.34 13.60 14.93 16.91 16.86 22.48 26.38 33.99 38.08
Intermediate
Government Bond..... 10.00 11.00 11.73 12.58 12.24 13.84 14,21 15.13 16.07
Calvert Series....... 10.26 11.91 12.75 13.36 13.11 16.87 18.83 22.41 26.13

<CAPTION>
UNIT VALUE UNITS OUTSTANDING
-------- ------------------------------------------------------------------------------------------
DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1999 1990 1991 1992 1993 1994 1995 1996 1997
-------- --------- --------- --------- --------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Equity Growth........ $70.57 429,986 1,334,644 2,115,942 2,907,819 994,859 201,470 237,959 242,846
Money Market......... 17.18 590,354 702,177 637,701 656,262 179,143 58,026 56,311 47,018
Balanced............. 35.91 322,563 814,494 1,268,765 1,835,594 762,735 145,593 156,241 163,289
Core Bond............ 22.75 97,161 493,084 328,126 471,446 125,870 24,207 25,670 26,763
Value & Income....... 40.87 7,198,970 7,227,359 6,883,795 7,852,650 2,135,776 571,730 489,820 474,554
Intermediate
Government Bond..... 16.18 -- 3,840,526 1,628,553 1,591,845 768,905 50,325 47,901 14,366
Calvert Series....... 29.06 16,681 180,569 355,343 685,428 291,806 19,147 25,095 26,219

<CAPTION>
UNITS OUTSTANDING
-------------------
DEC. 31, DEC. 31,
1998 1999
-------- --------
<S> <C> <C> <C>
Equity Growth........ 247,234 142,912
Money Market......... 40,999 13,122
Balanced............. 167,348 77,105
Core Bond............ 39,571 16,207
Value & Income....... 434,610 266,130
Intermediate
Government Bond..... 27,614 13,708
Calvert Series....... 31,111 15,386
</TABLE>

- ---------------
* The commencement date for the Intermediate Government Bond Subaccount is May
1, 1991.

Further information about the performance of Keynote is contained in the
Annual Report of Keynote which is available, free of charge, by contacting
MONY at the address or at the telephone number set forth on the cover of this
Prospectus.

11
<PAGE> 13

MONY

MONY Life Insurance Company formerly organized as a mutual life insurance
company, under the laws of the State of New York in 1842 converted to a stock
life insurance company through demutualization. Its principal place of business
is 1740 Broadway, New York, N.Y. 10019. MONY is currently licensed to sell life
insurance and annuities in all states of the United States, the District of
Columbia, Puerto Rico and the U.S. Virgin Islands.

KEYNOTE SERIES ACCOUNT

Keynote was established by MONY under New York Insurance Law on December
16, 1987 as a separate account. Keynote will hold assets that are segregated
from all of MONY's other assets and at present is used only to support the
Contracts. MONY is the legal holder of the assets in Keynote and will at all
times maintain assets in Keynote with a total market value at least equal to the
contract liabilities for Keynote. The obligations under the Contracts are
obligations of MONY. Income, gains, and losses, whether or not realized, from
assets allocated to Keynote, are, in accordance with the Contracts, credited to
or charged against Keynote without regard to other income, gains, or losses of
MONY. The assets in Keynote may not be charged with liabilities which arise from
any other business MONY conducts. Keynote assets may include accumulation of the
charges MONY makes against a Contract participating in Keynote. From time to
time, any such additional assets may be transferred in cash to MONY's general
account.

Keynote is registered with the Securities and Exchange Commission ("SEC")
under the Investment Company Act of 1940 ("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 management or investment policies or practices of
Keynote. For state law purposes, Keynote is treated as a part or division of
MONY.

There are currently seven Subaccounts within Keynote which are available
for allocation of Purchase Payments under the Contracts. The Calvert Series
Subaccount invests only in the Calvert Social Balanced Portfolio (the "Calvert
Series"), a series of Calvert Variable Series, Inc. ("Calvert Variable"), an
open-end management investment company registered with the SEC under the 1940
Act. The six other Subaccounts invest in six respective series of Diversified
Investors Portfolios, an open-end diversified management investment company
registered with the SEC under the 1940 Act. Set forth below is a brief
description of the Calvert Series and Diversified Investors Portfolios. A full
description of the Calvert Series, its investment objectives, policies and
restrictions, its expenses, the risks attendant in investing therein and other
aspects of its operations is contained in the accompanying prospectus for the
Calvert Series. Full descriptions of the six series of Diversified Investors
Portfolios, their investment objectives, policies and restrictions, their
expenses, the risks attendant to investing therein and other aspects of their
operations are set forth herein under "Diversified Investors Portfolios" at page
13. Further disclosure appears in the Statement of Additional Information. Each
Participant should periodically consider his/her allocation among the
Subaccounts in light of current market conditions and the investment risks
attendant to investment in the various series of Diversified Investors
Portfolios and the Calvert Series.

CALVERT SERIES

The Calvert Series is a series of Calvert Variable Series, Inc. ("Calvert
Inc."), a Maryland corporation registered with the SEC under the 1940 Act as an
open-end management company, whose investment adviser is Calvert Asset
Management Company, Inc. The shares of the Fund are currently sold only to
insurance companies for allocation to their separate accounts to fund the
benefits under certain variable annuity and variable life insurance policies
issued by such companies. Because the Calvert Series sells its shares to
insurance companies offering both variable annuity and variable life insurance
policies, potential for conflict between the interests of Contractholders of
these contracts may arise. The Board of Directors of the Fund will monitor the
Calvert Series for the existence of any material irreconcilable conflict between
interests of Contractholders of all separate accounts investing in the Calvert
Series. If it

12
<PAGE> 14

is determined by a majority of the Board of the Fund that such conflict exists
then MONY will take whatever steps are necessary to eliminate the material
conflict, including withdrawing the assets allocable to some of the separate
accounts from Calvert Series and reinvesting them in a different investment
medium. For additional risk disclosure, see the Calvert Series prospectus which
is contained in the last section of this Prospectus. Keynote will purchase and
redeem shares from the Calvert Series at net asset value.

The investment objective of the Calvert Series is set forth in the
prospectus for the Calvert Series which appears at the end of this Prospectus.
Briefly, the objective is to achieve a total return above the rate of inflation
through an actively managed, diversified portfolio of common and preferred
stocks, bonds and money market instruments which offer income and capital growth
opportunity and which satisfy the social concern criteria established for the
Calvert Series. There can be no assurance that the objective of the Calvert
Series will be realized.

DIVERSIFIED INVESTORS PORTFOLIOS

Each of the other six Subaccounts of Keynote listed below invests
exclusively in the corresponding series of Diversified Investors Portfolios set
forth below:

<TABLE>
<CAPTION>
DIVERSIFIED SUBACCOUNT SERIES OF DIVERSIFIED INVESTORS PORTFOLIOS
---------------------- ------------------------------------------
<S> <C>
Keynote Money Market Subaccount.............. Diversified Investors Money Market Portfolio
(the "Money Market Series")
Keynote Intermediate Government Bond
Subaccount................................. Diversified Investors Intermediate Government
Bond Portfolio (the "Intermediate Government
Bond Series")
Keynote Core Bond Subaccount (formerly the
Keynote Long Term Bond Subaccount)......... Diversified Investors Core Bond Portfolio
(the "Core Bond Series")
Keynote Balanced Subaccount (formerly the
Keynote Diversified/Balanced Subaccount)... Diversified Investors Balanced Portfolio (the
"Balanced Series")
Keynote Value & Income Subaccount............ Diversified Investors Value & Income
Portfolio (the "Equity Income Series")
Keynote Equity Growth Subaccount............. Diversified Investors Equity Growth Portfolio
(the "Equity Growth Series")
</TABLE>

Diversified Investors Portfolios is registered with the SEC under the 1940
Act as an open-end diversified management investment company. This registration
does not involve supervision by the SEC of the management or investment
practices or policies of Diversified Investors Portfolios.

Diversified acts as investment adviser and administrator to each series of
Diversified Investors Portfolios. With respect to each series of Diversified
Investors Portfolios, Diversified has contracted for certain investment advisory
services with one or more subadvisers. Diversified and the subadviser or
subadvisers for a particular series of Diversified Investors Portfolios are
referred to herein collectively as the "Advisers". The investment objectives of
the series of Diversified Investors Portfolios currently available under the
Contracts through Subaccounts are described briefly below. There can be no
assurance that the investment objectives of any of the series will be met.

Money Market Series: To provide liquidity and as high a level of current
income as is consistent with the preservation of capital through investment in
domestic and foreign U.S. dollar-denominated money market obligations with
maturities of 397 days or less. An investor's interest in the Keynote Money
Market Subaccount is neither insured nor guaranteed by the U.S. Government.

Intermediate Government Bond Series: To provide as high a level of current
income as is consistent with the preservation of capital through investment in
U.S. Government and U.S. Government agency and instrumentality securities with
short and intermediate maturities and high quality short-term obligations.

13
<PAGE> 15

Core Bond Series: To achieve the maximum total return through investment
in investment grade debt securities, U.S. Government and U.S. Government agency
and instrumentality securities, collateralized mortgage obligations guaranteed
by these agencies and instrumentalities and high quality short-term obligations.

Balanced Series: To provide a high total return consistent with a broad
diversified mix of stocks, bonds and money market instruments.

Value & Income Series: To provide a high level of current income through
investment in a diversified portfolio of common stocks with relatively high
current yields; capital appreciation is a secondary objective.

Equity Growth Series: To provide a high level of capital appreciation
through investment in a diversified portfolio of common stocks with potential
for above average growth in earnings; current income is a secondary objective.

See "Diversified Investors Portfolios" at page 13 and the Statement of
Additional Information for more information on each series.

THE TRANSACTION

On December 31, 1993, MONY and AEGON USA, Inc. ("AEGON") entered into a
transaction pursuant to which MONY sold its group pension operation to AEGON
(the "Transaction"). As a part of the Transaction, the Contracts may be
transferred through assumption reinsurance to AUSA Life Insurance Company, Inc.
("AUSA"), a New York domiciled stock life insurance company and an indirect,
wholly-owned subsidiary of AEGON. Subject to the receipt of any necessary state
insurance department approvals and authorizations each Contractholder will
receive materials relating to this assumption.

In addition, as a result of the Transaction, the group fixed annuity
contracts which have been issued by MONY to Contractholders may also be
transferred to AUSA through assumption reinsurance. Based upon regulatory and
other consideration, the transfer of any fixed contract may occur before,
concurrent with, or after the transfer of the companion variable Contract which
is offered through this Prospectus. Accordingly, all references in this
Prospectus to a companion fixed annuity contract shall refer to the fixed
contract issued by MONY or the fixed contract which has been assumed by AUSA, as
appropriate.

AUSA is a wholly-owned subsidiary of First AUSA Life Insurance Company, a
stock life insurance company which is wholly-owned by AEGON. AEGON is a
financial services holding company whose primary emphasis is on life and health
insurance and annuity and investment products. AEGON is a wholly-owned indirect
subsidiary of AEGON nv, a Netherlands corporation which is a publicly traded
international insurance group.

14
<PAGE> 16

CHARGES

CHARGES FOR MORTALITY AND EXPENSE RISKS

The maximum daily charges against Keynote for mortality and expense risks
assumed by MONY are computed and deducted from the value of the net assets of
Keynote. This maximum daily charge will be at the rate of 0.003425% (equivalent
to an annual rate of 1.25%) of the average daily net assets of Keynote. The
daily charge will be deducted from the net asset value of Keynote, and therefore
the Subaccounts, on each Valuation Date. Where the previous day (or days) was
not a Valuation Date, the deduction on the Valuation Date will be 0.003425%
multiplied by the number of days since the last Valuation Date. The sum of these
charges on an annual basis will not exceed 1.25% of the average net assets
invested in Keynote. Of this charge, MONY estimates that .80% is for mortality
risk and .45% is for expense risk. (The daily charge from Keynote based on an
annual mortality and expense risk rate of 1.10%, .70% for mortality risks and
.40% for administrative expense risks, which was effective May 1, 1994, is
0.030139%.)

The mortality risk is that individuals may live for a longer period of time
than projected and therefore a greater amount of annuity benefits than projected
will be payable. The expense risk is that expenses incurred in issuing and
administering the Contract will exceed the administrative expense charge
provided in the Contract. MONY believes that this level of charge is within the
range of industry practice for comparable group variable annuity contracts.

Sales distribution expenses and any other expenses in excess of the
described charges will be paid from MONY's general account and not directly from
Keynote or from the mortality and expense risk charges. However, asset charges
for MONY's assumption of mortality and expense risks might be a source of
contribution to the surplus in MONY's general account.

ANNUAL CONTRACT CHARGE

MONY reserves the right to deduct an annual contract charge from a
Participant's Accumulation Account to reimburse MONY for administrative expenses
relating to the maintenance of the Contracts. MONY has no present intention to
impose such a charge; however, MONY may, in the future, impose such a charge in
accordance with the provisions of the Contracts. Any such annual charge will not
exceed $50. MONY also reserves the right, if such a charge is imposed, to waive,
on a temporary or permanent basis, all or part of such charge for certain
classes of Contracts or for certain new classes of Contracts which may be sold
in the future. If imposed, this charge would represent reimbursement for
administrative costs expected to be incurred over the life of the Contracts.
MONY does not anticipate any profit from this charge.

INVESTMENT MANAGEMENT FEE

Because Keynote purchases interests in certain series of Diversified
Investors Portfolios and the Calvert Series, the net assets of Keynote will
reflect the investment management fee and other expenses incurred by those
series of Diversified Investors Portfolios and the Calvert Series.

Diversified serves as the investment adviser to each series of Diversified
Investors Portfolios. For information with respect to the arrangements under
which Diversified provides such advisory services,including charges and
arrangements with subadvisers, reference is made to the information set forth
under "Management of Diversified Investors Portfolios" at page 45.

Calvert Asset Management Company, Inc. ("CAMCO") (4550 Montgomery Avenue,
Suite 1000N, Bethesda, Maryland 20814) is the investment adviser to the Calvert
Series and provides day-to-day investment management services to the Calvert
Series. It has been managing mutual funds since 1976. CAMCO is the investment
adviser for over 25 mutual funds, including the first and largest family of
socially screened funds. As of December 31, 1999, CAMCO had $6.5 billion in
assets under management.

CAMCO uses a team approach to its management of the Calvert Series. Reno J.
Martini, Senior Vice President and Chief Investment Officer, heads this team and
oversees the management of all Calvert Funds for CAMCO. Mr. Martini has over 15
years of experience in the investment industry and has been the head of CAMCO's
asset management team since 1985.

15
<PAGE> 17

NCM Capital Management Group, Inc., 103 West Main Street, Durham, North
Carolina 27701, has managed part of the equity investments of the Calvert Series
since 1995. NCM is one of the largest minority-owned investment management firms
in the country and provides products in equity fixed income and balanced
portfolio management. It is also one of the industry leaders in the employment
and training of minority and women investment professionals.

NCM's portfolio management team consists of several members, headed by
Maceo K. Sloan. Mr. Sloan has more than 10 years of experience in the investment
industry, and is a frequent panelist on Wall Street Week with Louis Rukeyser.

Calvert, Inc. has obtained an exemptive order from the Securities and
Exchange Commission to permit the Calvert Series, pursuant to approval by the
Board of Directors, to enter into and materially amend contracts with
subadvisers without shareholder approval.

PREMIUM TAX

Under the laws of certain jurisdictions, premium taxes are payable on
annuity considerations which can include Purchase Payments or the Accumulation
Account under the Contracts. Any applicable premium taxes will generally be
deducted when the Accumulation Account under a Contract is applied to purchase
an annuity. Under present laws, the range of premium taxes is from .5% to 3.5%.
Attached as an Appendix to this Prospectus is a schedule of applicable premium
taxes payable upon annuitization which are in effect as of the date of this
Prospectus. The laws of the various jurisdictions relating to annuity taxes and
the interpretations of such laws are subject to changes which may affect the
deductions, if any, under the Contracts for such taxes.

16
<PAGE> 18

SUMMARY OF THE CONTRACTS

ELIGIBLE PURCHASERS

State educational organizations and organizations that qualify for
tax-exempt status under Code Section 501(c)(3), including associations thereof
that qualify for tax-exempt status under Code Section 501(c)(3), are eligible
purchasers. In addition, any organization qualifying as an IRA Contractholder
may purchase an IRA Contract. Any type of non-profit organization as well as
taxed subsidiaries of tax-exempt organizations and taxed stand-alone
organizations may purchase a Section 401(a) and/or a Section 401(k) or an NQDC
Contract(s).

OWNERSHIP

The employer or association purchasing a Contract is the owner of the
Contract for the benefit of the Participants. The Contract will cover all
eligible Participants under a Plan. Each Participant will receive a certificate
at the time his/her first annuity payment becomes payable, or earlier, if
required by applicable law. The certificate summarizes the Participant's
benefits under the Contract.

PURCHASE PAYMENTS

With respect to the Section 401(a) Contract, the employer and/or employee
will make contributions pursuant to the underlying retirement Plan. The Section
401(k) and NQDC Contracts will accept employer and/or employee contributions
pursuant to the terms and conditions of the underlying Plan. As to the Section
403(b) Contract, the employer will make Purchase Payments in accordance with a
salary reduction agreement or an agreement to forego a salary increase, except
with respect to employer-sponsored Section 403(b) Plans under which the employer
will make contributions pursuant to the underlying retirement Plan. In the case
of the Section 408 IRA Contract, the employer will make Purchase Payments on
behalf of and as determined by each participating employee pursuant to a salary
reduction agreement. An Accumulation Account will be established for each
Participant which will record the number of Units held in each Subaccount.
Purchase Payments may be allocated among any of the Subaccounts.

All Purchase Payments in Keynote credited to an Accumulation Account are
vested and nonforfeitable. However, Purchase Payments made by employers,
including all such payments made under a Section 401(a) Contract, which are not
the result of a reduction in salary or a give up in salary agreement, under an
employer-sponsored Plan may be forfeitable but are generally subject to the
vesting requirements, where applicable, of the Employee Retirement Income
Security Act of 1974, as amended. In general, all Purchase Payments made to the
NQDC and Section 457 Contracts may be forfeitable even though partially or fully
vested.

EMPLOYER SPONSORED PLAN REQUIREMENTS

Since the Contracts are intended to implement the Plans of state
educational organizations, organizations that qualify for tax-exempt status
under Code Section 501(c)(3), IRA Contractholders and, in the case of Section
401(a) and/or Section 401(k) and NQDC Contracts, for taxed subsidiaries of such
organizations and stand-alone taxed organizations and since such Plans may be
sponsored by employers or associations who may have their own desires regarding
certain Plan details and the manner in which the Plan is to be administered,
there will be some variations in details in the Contract and Plan to reflect
such desires. Reference to the provisions of the Plan in which the individual is
a Participant must be made in all cases for particulars.

RIGHTS OF THE PARTICIPANT UNDER THE CONTRACT

There are no stipulated or required Purchase Payments to be made under the
Contract. Except for the 15 days prior to a Participant's Annuity Purchase Date
(See "Annuity Purchase Date" at page 21) during which no Purchase Payments will
be accepted by MONY, an employer may make Purchase Payments during a
Participant's Accumulation Period in the amount authorized by the Participant.
The Contract permits the Participant to elect his/her Annuity Purchase Date, to
allocate Purchase Payments, to redeem all or a portion of the Units in his/her
Accumulation Account, to designate beneficiaries, and to elect Fixed Annuity
options, except that employer-sponsored Plans may affect these rights.

17
<PAGE> 19

During a Participant's Accumulation Period, one's rights and those of the
Contractholder or IRA Contractholder shall be as set forth in the Contract and
Plan. On and after the Annuity Purchase Date, or on the Participant's death, if
earlier, all rights, as specified in the Contract and Plan, shall belong to the
Participant or beneficiary as the case may be.

RIGHTS UPON SUSPENSION OF CONTRACT OR TERMINATION OF PLAN

403(b) Contract

In the event that the making or receipt of all Purchase Payments under
certain 403(b) Contracts is discontinued or a Contractholder terminates its Plan
or discontinues Purchase Payments for a Participant, MONY shall give written
notice thereof to the appropriate Participant(s) together with notice of the
right of the Participant to elect to have the value of his/her Accumulation
Account applied under one of the following options: (1) to be held and
distributed by MONY in accordance with the terms of the Contract, (2) to be paid
to him/her in cash, or (3) in the event of suspension of the Contract or
termination of the Plan, to be transferred to an alternate funding agency (e.g.,
another insurance company). Certain other 403(b) Contracts require the
Contractholder, not MONY, to give written notice thereof to Participants.

401(a) Contract/401(k) Contract and NQDC Contracts

If the Contractholder terminates its Plan or discontinues Purchase
Payments, it is the Contractholder's responsibility, and not MONY's, to give
written notice thereof to the affected Participants. In such cases, the
Contractholder shall elect to have the entire balance held under the Contract
applied under one of the following options: (1) to be held and distributed by
MONY in accordance with the terms of the Contract; (2) to be transferred to an
alternate funding agency (e.g., another insurance company); or (3) to purchase
deferred, paid-up life annuity benefits for Participants.

457 and 408(IRA) Contracts

If the Contractholder or IRA Contractholder terminates its Plan or
discontinues Purchase Payments for a Participant, MONY shall give written notice
thereof to the appropriate Participant(s) together with notice of the right of
the Participant to elect to have the value of his/her Accumulation Account
applied under either of the following options: (1) to be held and distributed by
MONY in accordance with the terms of the Contract or (2) to be paid to him/her
in cash, except that, under the terms of certain 457 Contracts, the
Contractholder, not AUSA, shall give notice to affected Participants.

FAILURE OF QUALIFICATION

In the event that a Plan, Contractholder or IRA Contractholder or a
Participant thereunder becomes ineligible for any previously applicable tax
benefits under the Code, MONY upon notice thereof shall refuse during the period
of such ineligibility to accept Purchase Payments with respect to that Plan or
Participant. A failure of qualification under a particular Contract shall have
no effect on other issued and outstanding Contracts.

TRANSFERS

No transfers may be made between any of the Contracts; however, the
following transfers are permissible with respect to each Contract.

401(a), 401(k), 403(b), 457, 408(IRA) and NQDC Contracts

Transfers from the MONY Section 403(b), Section 401(a), Section 401(k) and
NQDC Group Fixed Annuity Contracts to a Participant's Accumulation Account under
the Keynote Contracts are permitted only to the Subaccounts which invest in the
Balanced Series, Equity Income Series, Equity Growth Series or Calvert Series.
Certain other restrictions which apply to transfers from the MONY Section
403(b), Section 401(a), Section 401(k) and NQDC Group Fixed Annuity and 408(IRA)
Contracts

18
<PAGE> 20

to the Keynote Contracts are contained in the MONY Section 403(b), Section
401(a), Section 401(k) and NQDC Group Fixed Annuity and Section 408(IRA)
Contracts.

Transfers may be made in writing or by telephoning (914) 697-8000.
Transfers are effective within 48 hours of receipt of instructions. All
Participants should be aware that a transfer authorized by telephone and
reasonably believed to be genuine by MONY may subject the Participant to risk of
loss if such instruction is subsequently found not to be genuine. MONY will
employ reasonable procedures, including requiring Participants to give certain
identification information and tape recording of telephone instructions, to
confirm that instructions communicated by telephone are genuine. To the extent
that MONY fails to use reasonable procedures to verify the genuineness of
telephone instructions, MONY may be liable for any losses due to telephone
instructions that prove to be fraudulent or unauthorized.

RIGHTS RESERVED BY MONY

Subject to compliance with applicable laws and, when required by law,
approval of the Contractholders, IRA Contractholders, NQDC Contractholders
and/or Participants and any appropriate regulatory authority, MONY reserves the
right to make the following changes:

(1) To operate Keynote in any form permitted under the 1940 Act or in any
other form permitted by law;

(2) To take any action necessary to comply with or obtain and continue any
exemptions from the 1940 Act;

(3) To transfer any assets in a Subaccount of Keynote to another Subaccount
of Keynote, or to one or more separate accounts, or to MONY's general
account to the extent permitted by law or to add, combine or remove
Subaccounts in a separate account;

(4) To substitute, for the interests in a series of Diversified Investors
Portfolios or the Calvert Series held in any Subaccount, interests in
another series of Diversified Investors Portfolios or interests in
another investment company or any other investment permitted by law;
and

(5) To make any necessary technical changes in the Contracts in order to
conform with any of the above-described actions or as may be required
or permitted by applicable laws affecting Keynote or the Contracts.

CREDIT OF PURCHASE PAYMENTS

A Participant's initial Purchase Payment will be credited to the
Participant's Accumulation Account to provide Units as of a Valuation Date for
the Valuation Period, not later than (1) two business days after receipt of the
Purchase Payment by MONY at 4 Manhattanville Road, Purchase, New York 10577, if
the contract application and/or Participant's enrollment form is complete upon
receipt, or (2) two business days after an application and/or enrollment form
which is incomplete upon receipt by MONY is made complete, provided that if such
information is not made complete within five business days after receipt, (i)
the prospective Participant will be informed of the reasons for the delay, and
(ii) the initial Purchase Payment will be returned immediately and in full,
unless the prospective Participant specifically consents to MONY retaining the
Purchase Payment until such information is made complete.

Subsequent Purchase Payments will be credited to the Participant's
Accumulation Account to provide Units as of the Valuation Date for the Valuation
Period in which the Purchase Payment is received in good order by MONY.

ALLOCATION OF PURCHASE PAYMENTS

Upon receipt of a Purchase Payment, it will be credited to the Subaccount
designated by the Participant in the form of Units. The number of Units to be
credited is determined by dividing the dollar amount allocated to the particular
Subaccount(s) by the Unit value of that Subaccount for the Valuation Date for
the Valuation Period on which the Purchase Payment is received. The number of
Units shall not be changed by any subsequent change in the value of a Unit, but
the dollar allocation

19
<PAGE> 21

value of a Unit will vary in amount depending upon the investment experience of
the applicable Subaccount.

Allocation instructions may be changed at any time by sending to MONY a
correctly completed allocation form. Any change in allocations will be effective
within 10 business days following receipt of the allocation form by MONY. If an
allocation form is incorrectly completed, Purchase Payments will be credited in
accordance with the most recent allocation form on record. MONY reserves the
right to limit a Participant's right to change allocation instructions to four
times a calendar year.

DETERMINATION OF UNIT VALUE

The Unit value for each of the Subaccounts was established at $10 for the
first Valuation Date. The Unit value for a Subaccount for any subsequent
Valuation Date is determined by subtracting (b) from (a) and dividing the result
by (c), where

(a) is the aggregate net asset value on the Valuation Date of all
investments by the Subaccount in the series of Diversified Investors
Portfolios or the Calvert Series in which the Subaccount invests, and

(b) is the mortality and expense risk charge accrued as of that Valuation
Date, and

(c) is the total number of Units held in the Subaccount on the Valuation
Date before the purchase or redemption of any Units on that Date.

DEATH BENEFIT

Under a Section 403(b), Section 457 and Section 408(IRA) Contract, if a
Participant dies before the Annuity Purchase Date (See "Annuity Purchase Date"
on page 21), the value of his/her Accumulation Account will be paid to the
beneficiary in a lump sum. If the beneficiary is under the age of 75 at the time
of the Participant's death, the beneficiary may elect to have this lump sum
applied to provide a Fixed Annuity. A lump sum payment to some extent may be
taxed as ordinary income to the beneficiary in the year received. A beneficiary
should consider the possible tax advantages to electing an annuity. (See
"Section 403(b) Annuities" on page 25). Under a Section 401(a) and/or Section
401(k) Contract, however, the underlying tax-qualified Plan is generally
required to provide that in the case of a married Participant, a survivorship
annuity death benefit will be paid to the surviving spouse if the Participant
dies prior to retirement. In each case involving a Section 401(a) and/or Section
401(k) Contract, reference must be made to the underlying Plan for particulars.

If the Participant dies before the Annuity Purchase Date, his/her entire
interest must generally be distributed within five (5) years after the date of
death, or if payable to a designated beneficiary must be annuitized over the
life of that designated beneficiary or over a period not extending beyond the
life expectancy of that beneficiary, within one year after the date of death. If
the beneficiary is the Participant's spouse, distributions are not required to
be made until the April 1st after the end of the calendar year in which the
Participant would have attained age 70 1/2; if the spouse dies before
distributions begin, the rules discussed above will apply as if the spouse were
the Participant (owner).

If a lump sum payment is elected, the Accumulation Account value will be
determined on the Valuation Date for the Valuation Period in which a certified
copy of the death certificate evidencing the Participant's death is received by
MONY. If a Fixed Annuity is elected, the Accumulation Account value will be
determined on the Valuation Date for the Valuation Period of the beneficiary's
Annuity Purchase Date. For Section 401(a) and/or Section 401(k) and NQDC
Contracts, the underlying Plan should be consulted to determine the options
available.

For NQDC Contracts, the remaining value will be paid to a designated
beneficiary. If no such beneficiary is so designated or in existence, the
remaining value will be paid in the following order: Participant's (1) spouse,
(2) children, (3) parents, (4) siblings and (5) estate.

For all Contracts except NQDC Contracts, the death benefit is guaranteed to
be not less than the total amount of all contributions, less any withdrawals,
made by the Participant.

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<PAGE> 22

REDEMPTION DURING THE ACCUMULATION PERIOD

For Section 403(b), Section 457 and Section 408(IRA) Contracts and subject
to applicable federal tax law restrictions, a Participant at any time during
his/her Accumulation Period and prior to his/her death may redeem all or a
portion of the Units credited to the Accumulation Account. There is no
redemption charge. (See "Federal Tax Status" on page 25.)

The Accumulation Account value redeemed or the Units remaining after a
partial redemption will be determined on the Valuation Date for the Valuation
Period in which a written request for a redemption on a form approved by MONY is
received by MONY. The Accumulation Account will be reduced by the lesser of the
number of Units obtained by dividing the amount of the redemption request by the
Unit value for that day or the number of Units remaining in the Accumulation
Account.

A full or partial redemption payment will be made within seven days after
receipt of the written request. A request for a partial redemption must specify
the Subaccount(s) from which the partial withdrawal is to be made. Payment may
be postponed as permitted by the 1940 Act. Currently, deferment is permissible
only when the New York Stock Exchange is closed or trading is restricted, when
an emergency exists as a result of which disposal of the interests in
Diversified Investors Portfolios or Calvert Series held by Keynote is not
reasonably practicable or it is not reasonably practicable to determine fairly
the value of these assets, or when the SEC has provided for such deferment for
the protection of Participants.

A withdrawal will generally have federal income tax consequences which may
include penalties. (See "Federal Tax Status" on page 25.)

With respect to Section 401(a) and Section 401(k) or NQDC Contracts, the
ability to withdraw funds during the Accumulation Period is generally more
limited; however, in each instance the underlying Plan document should be
consulted to determine what options, if any, are available.

RESTRICTIONS UNDER THE TEXAS OPTIONAL RETIREMENT PROGRAM

The Teacher Retirement System of Texas permits Participants in the Texas
Optional Retirement Program ("ORP") to redeem their interest in a variable
annuity contract issued under the ORP only upon termination of employment in the
Texas public institutions of higher education, retirement or death. Accordingly,
a Participant in the ORP will be required to obtain a certificate of termination
from his/her employer before he/she can redeem his/her Accumulation Account.

PAYMENT OPTIONS

With respect to Section 403(b), Section 457 and Section 408(IRA) Contracts,
unless a Fixed Annuity as described at page 22 is elected, payment to the
Participant shall be made at the end of his/her Accumulation Period in a lump
sum calculated in the same manner as if a total withdrawal request of one's
Accumulation Account had been received by MONY on his/her Annuity Purchase Date.
(See above for, "Redemption During the Accumulation Period".) However, Section
401(a) and Section 401(k) and NQDC Contracts provide the funding for the Plans
and reference to the particular Plan must be made in each case for details. For
example, tax-qualified Plans must generally provide by law that in the case of a
married Participant who does not properly elect otherwise, retirement annuity
benefits will be paid in the form of a contingent annuity with a survivorship
annuity benefit for his surviving spouse at least equal to 50% of the amount
which would have been payable if the Participant were living. For NQDC
Contracts, the employer may also provide for installment payments without the
purchase of an annuity.

ANNUITY PURCHASE DATE

The Annuity Purchase Date is the first day of the month coincident with or
following the receipt by MONY of written notice, submitted through the
Participant's employer, of the Participant's retirement (i.e., the termination
of employment with his/her employer). Subject to the terms of the Plan, a
Participant may elect to retire at any time and receive annuity benefits. As a
general rule, benefits must begin no later than April 1 of the calendar year
following the year in which the Participant attains age 70 at which time an
election to receive an annuity or lump sum benefit must be made.

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<PAGE> 23

In the case of a beneficiary who elects a Fixed Annuity, the Annuity
Purchase Date will be the first day of the month following receipt by MONY of
the election of a Fixed Annuity; however, if any election is received during the
last 15 days of a month, the Annuity Purchase Date will be the first day of the
second month after receipt of the election.

For Section 408(IRA) Contracts, the Annuity Purchase Date is the date the
annuity first begins under the terms of the IRA Contract.

FIXED ANNUITY

Fixed Annuity payments are not made from Keynote but are made from the
general account of MONY which supports insurance and annuity obligations.
Because of exemptive and exclusionary provisions, Fixed Annuity payments and
interests in the general account have not been registered under the Securities
Act of 1933, nor is the general account registered as an investment company
under the 1940 Act. Accordingly, neither the general account nor any interests
therein are generally subject to the provisions of the 1933 or 1940 Acts. The
SEC staff has not reviewed the disclosures in this Prospectus that relate to the
Fixed Annuity payments and interests in the general account. Disclosures
regarding Fixed Annuity payments and the general account in this Prospectus,
however, may be subject to certain generally applicable provisions of the
federal securities laws relating to the accuracy and completeness of statements
made in prospectuses.

A Fixed Annuity may not be elected if the initial monthly payment under the
form elected would be less than $20. Fixed Annuity payments will be made monthly
unless the annuitant elects to receive payments annually, semi-annually or
quarterly. Any such election must be made at the same time that the annuitant
elects to receive a Fixed Annuity and cannot be changed during the annuity
period. Once a Fixed Annuity takes effect, it may not be redeemed, surrendered
or changed to any other form of annuity.

FIXED ANNUITY OPTIONS

The following Fixed Annuity options may be available:

(i) Life Annuity -- Annuity payments will be made during the lifetime of
the annuitant. It would be possible for the annuitant to receive no
annuity payment if he/she died prior to the date of the first annuity
payment.

(ii) Life Annuity With Period Certain -- Annuity payments will be made
during the lifetime of the annuitant with the guarantee that if the
annuitant dies before a period certain elected, the beneficiary will
receive payments for the duration of the period. The period certain
may be any number of years between 5 and 20 inclusive.

(iii) Specified Fixed Period Annuity -- Annuity payments will be made for a
specified fixed period elected by the annuitant. If the annuitant
dies during the specified fixed period, the annuity payments for the
remainder of the period will be paid to the beneficiary. No annuity
payments are made after the expiration of the specified fixed period
even if the annuitant survives. The specified fixed period may be for
any number of years between 10 and 30 years inclusive.

(iv) Contingent Annuity -- Annuity payments will be made during the joint
lifetimes of the annuitant and a designated second person
("contingent annuitant") with payments continued during the
remaining lifetime of the contingent annuitant. Annuity payments to
the contingent annuitant may be made in the same amount paid while
both annuitants lived or a lesser percentage of this amount. For
Section 401(a) and/or Section 401(k) Contracts, in the absence of a
proper election by the Participant, a contingent annuity with a
survivorship annuity benefit for the surviving spouse at least equal
to 50% of the amount which would have been payable if the
Participant were living will be the normal form of benefit.

If the contingent annuitant dies before the first annuity payment to
the annuitant, the contingent annuity election will be void and the
annuitant will receive a Life Annuity. If the contingent annuitant
dies after the first annuity payment to the annuitant, but before
the death of the annuitant, annuity payments under the Contingent
Annuity election will be

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<PAGE> 24

made to the annuitant during his/her lifetime. If the annuitant and
the contingent annuitant die before the date of the first annuity
payment, no annuity payments will be made.

(v) Contingent Annuity With Period Certain -- Annuity payments will be
made during the joint lifetimes of the annuitant and a designated
second person ("contingent annuitant"). Annuity payments to the
contingent annuitant may be in the same amount as paid to the
annuitant or a lessor percentage of that amount and will be made for a
period certain of any number of years between 5 and 20 years
inclusive.

The Life Annuity With Period Certain and the Specified Fixed Period Annuity
may only be elected for a number of years that will not exceed an annuitant's
life expectancy. The annuity benefit option elected by the Participant will
affect the level of annuity payments the Participant will receive. The longer
annuity payments are projected to continue based upon actuarial possibilities,
the lower annuity payments will be.

The annuity purchase rates for these Fixed Annuity benefits shall not
exceed, during the first 10 years of the Contracts, the maximum rates set forth
in the Contracts. Thereafter, the annuity purchase rate will be the rate
declared by MONY for all Fixed Annuity benefits purchased under the applicable
Contract in the same Contract Year in which the Annuity Purchase Date occurs.
The guaranteed level of Fixed Annuity payments will be determined based upon (i)
a Participant's Accumulation Account value on the Annuity Purchase Date, (ii)
the applicable annuity purchase rate on the Annuity Purchase Date which will
reflect the age of the Participant and (iii) the type of Fixed Annuity option
elected.

PAYMENTS TO A BENEFICIARY FOLLOWING THE ANNUITANT'S DEATH

If any annuity payment is payable to the beneficiary after the death of an
annuitant on or after his/her Annuity Purchase Date but during a period certain,
it shall be payable as each payment becomes due to the beneficiary. If the
benefit is payable to more than one beneficiary, it shall be paid in equal
shares to such beneficiaries, the survivors or survivor, unless the annuitant
has elected otherwise. Upon the death of the last surviving beneficiary, MONY
shall pay the commuted value of any remaining payments in a lump sum cash
payment to the estate of such last surviving beneficiary in lieu of any further
income payments.

The annuitant's beneficiary may direct in writing to MONY that any income
payable after the death of the annuitant or contingent annuitant be terminated
and a single commuted value be paid to the beneficiary. The commuted values
referred to above shall be based upon the value of the payments for the balance
of the period certain determined as of the date MONY receives written notice of
the beneficiary's election to receive the commuted value on the basis of the
interest rate (compounded annually) inherent in the annuity purchase rate
applied to provide the annuitant's Fixed Annuity.

VOTING RIGHTS

The assets held in the Subaccounts of Keynote will be invested in the
corresponding series of Diversified Investors Portfolios or the Calvert Series.
MONY is the legal holder of these interests and shares held in a Subaccount and
as such has the right to vote to elect the governing Boards of Diversified
Investors Portfolios and the Fund, to vote upon certain matters that are
required by the 1940 Act to be approved or ratified by the shareholders of a
mutual fund, and to vote upon any other matter that may be voted upon at a
shareholders' meeting. To the extent required by law, MONY will vote at regular
and special shareholder meetings in accordance with the instructions received
from Contractholders, IRA Contractholders and NQDC Contractholders. The record
date for any such vote shall be selected by the governing Boards of Diversified
Investors Portfolios or the Calvert Series. MONY will furnish Contractholders,
IRA Contractholders and NQDC Contractholders with the proper forms to enable
them to give it these instructions.

Each Contractholder, IRA Contractholder and NQDC Contractholder will have
the equivalent of one vote per $100 of the dollar value of the Accumulation
Accounts in a Contract held in each Subaccount of Keynote, with fractional votes
for amounts less than $100. These votes, represented as votes per $100 of
Accumulation Account value in each Subaccount of Keynote, are converted into a

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<PAGE> 25

proportionate number of votes in beneficial interests in a series of Diversified
Investors Portfolios or shares of the Calvert Series. Interests held in each
Subaccount for which no timely instructions from Contractholders, IRA
Contractholders or NQDC Contractholders are received will be voted by MONY in
the same proportion as those interests in that Subaccount for which instructions
are received. Should applicable federal securities laws or regulations permit,
MONY may elect to vote in its own right.

A Participant will have the right to instruct the Contractholder, IRA
Contractholder or NQDC Contractholder with respect to interests in the series of
Diversified Investors Portfolios or the Calvert Series attributable to his/her
portion of the Accumulation Account held in each Subaccount of Keynote. Each
Participant under the Contract shall receive a statement of the amount
attributable to his/her participation in each Subaccount of Keynote and stating
his/her right to instruct the Contractholder as to how to vote such interest.
MONY will provide voting instruction materials to the Contractholder, IRA
Contractholder or NQDC Contractholder and to the Participants.

The Contractholder, IRA Contractholder and NQDC Contractholder shall
provide voting instructions to MONY with respect to interests attributable to
the Accumulation Account values held in a Subaccount in accordance with
instructions received by Participants. For interests for which no timely
instructions from Participants are received, the Contractholder, IRA
Contractholder or NQDC Contractholder will instruct MONY to vote these interests
in the same proportion as those shares for which instructions from Participants
are received.

Matters on which the Contractholder, IRA Contractholder or NQDC
Contractholder may give voting instructions include the following: (1) election
of the governing Boards Diversified Investors Portfolios or the Fund; (2)
ratification of the independent accountant of Diversified Investors Portfolios
or the Calvert Series; (3) approval of any change in the Investment Advisory
Agreement or any Subadvisory Agreement for a series of Diversified Investors
Portfolios or the Calvert Series corresponding to the Contractholder's, IRA
Contractholder's or NQDC Contractholder's selected Subaccount(s); (4) any change
in the fundamental investment policies of a series of Diversified Investors
Portfolios or the Calvert Series corresponding to the Contractholder's, IRA
Contractholder's or NQDC Contractholder's selected Subaccount(s); and (5) any
other matter requiring a vote of the shareholders of Diversified Investors
Portfolios or the Calvert Series. With respect to approval of the Investment
Advisory Agreements or Subadvisory Agreements or any change in a fundamental
investment policy, Contractholders, IRA Contractholders and NQDC Contractholders
participating in that Subaccount will vote separately on the matter pursuant to
the requirements of Rule 18f-2 under the 1940 Act.

MONY may, if required by state insurance officials, disregard voting
instructions if those instructions would require voting to cause a change in the
subclassification or investment objectives or policies of one or more of the
series of Diversified Investors Portfolios or the Calvert Series, or to approve
or disapprove an investment adviser or principal underwriter for one or more
series of Diversified Investors Portfolios or the Calvert Series. In addition,
MONY may disregard voting instructions that would require changes in the
investment objectives or policies of any series of Diversified Investors
Portfolios or the Calvert Series or in an investment adviser or principal
underwriter for Diversified Investors Portfolios or the Calvert Series, if MONY
reasonably disapproves those changes in accordance with applicable federal
regulations. If MONY disregards voting instructions, it will advise
Contractholders, IRA Contractholders, NQDC Contractholders and Participants of
that action and its reasons for the action in the next semiannual report to
Contractholders, IRA Contractholders, NQDC Contractholders and Participants.

DISTRIBUTION OF THE CONTRACTS

MSC will act as the principal underwriter and the distributor of the
Contracts pursuant to an underwriting agreement, on behalf of Keynote, with
Diversified Investors Portfolios and the Calvert Series. MSC will perform all
sales, marketing and administrative functions relative to the Contracts which
participate in Keynote, with certain exceptions in connection with the use of
other authorized broker-dealers. MSC is registered as a broker-dealer under the
Securities Exchange Act of 1934 and is a member of the National Association of
Securities Dealers. The Contracts are sold by individuals who are registered
representatives of MSC and who are also licensed as insurance agents for the
Company.

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<PAGE> 26

The Contracts may also be sold through registered representatives of other
broker-dealers authorized by MSC and applicable law who may be insurance agents
licensed by an insurance company other than MONY. Commissions and other expenses
directly related to the sale of the Contracts will not exceed 8 percent of
Purchase Payments. Additional expense allowance may be paid for other services
not directly related to the sale of the Contracts. Such services include the
training of personnel and the production of promotional literature.

FEDERAL TAX STATUS

The ultimate effect of federal income taxes on Fixed Annuity payments and
on the economic benefit to the Participant, annuitant, payee and beneficiary
depends on the tax and employment status of the individual concerned.

The discussion which follows on the treatment of MONY and of the Contracts
under federal income tax law is general in nature, is based upon MONY's
understanding of current federal income tax laws, and is not intended as tax
advice. No representation is made regarding the likelihood of continuation of
the present federal income tax law or of the current interpretations by the
Internal Revenue Service. No attempt is made to consider any applicable state or
other tax laws. Each Contractholder, IRA Contractholder, NQDC Contractholders
and Participant contemplating investment in the Contracts should consult a
qualified tax adviser.

Participants receiving large distributions (generally those in excess of
$150,000 (as indexed) per year; or lump sum distributions in excess of $750,000
(as indexed)) from qualified retirement Plans, including those funded through
Section 401(a), Section 408(IRA) and Section 403(b) Contracts, may be subject to
a 15% excise tax on their distributions in excess of a specified amount. The
Small Business Job Protection Act of 1996 suspended the imposition of the excess
distribution excise tax in 1997, 1998 and 1999. Finally, the Taxpayer Relief Act
of 1997 has repealed the excise tax (and a related estate tax on excess
retirement accumulations) for all subsequent years.

TAX TREATMENT OF MONY

MONY is taxed as a life insurance company under Part I, Subchapter L of the
Code. Investment income from the assets of Keynote are reinvested and taken into
account in determining the value of Keynote. Under existing federal income tax
law, the investment income of Keynote, including realized capital gains, is
substantially not taxed to MONY.

TAXATION OF DIVERSIFIED INVESTORS PORTFOLIOS

Diversified Investors Portfolios is organized as a New York trust. None of
its series are subject to any income or franchise tax in the State of New York.
Each of its series, since it is taxed as a partnership, is not subject to
federal income taxation. MONY, as an investor in a series of Diversified
Investors Portfolios, will be taxable on its share (as determined in accordance
with the governing instruments of Diversified Investors Portfolios) of such
series' ordinary income and capital gain in determining its income tax
liability. The determination of such share will be made in accordance with the
Code and regulations promulgated thereunder. See "Tax Treatment of MONY" above.

SECTION 403(b) ANNUITIES

Purchase Payments made under a Contract meeting the requirements of Section
403(b) of the Code afford certain federal income tax benefits to employees of
state educational organizations, and organizations which are tax-exempt under
Section 501(c)(3) of the Code.

The employer may make contributions to the Contract or the employer may
agree with the Participant that in return for employer contributions to the
Contract, the Participant will take a reduction in salary or give up a salary
increase. The agreement may not be changed with respect to earnings of the
Participant while the agreement is in effect. The Participant can only make one
agreement with his/her employer during the year, but the Participant may
terminate the agreement at any time with respect to amounts not yet earned. No
federal income tax is payable by the Participant on increases in the value of
his/her Accumulation Account until payments are received by the Participant.

Purchase Payments meeting the requirements of Sections 402(g), 403(b) and
415 of the Code are not includable in the gross income of the Participant at the
time they are made. Under Sec-

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<PAGE> 27

tion 402(g) of the Code, Purchase Payments made under a reduction in salary or a
give up in salary increase agreement ("elective deferrals") are excluded from a
Participant's gross income to the extent of the lesser of $10,500 (as indexed)
or the Participant's exclusion allowance. The $10,500 (as indexed) limit will be
reduced on a dollar for dollar basis by employee pre-tax elective deferrals made
by that individual under a Section 401(k) Plan, a simplified employee pension
plan, or other tax deferred annuity. Under Section 403(b) of the Code, Purchase
Payments made under a reduction in salary or a give up in salary agreement
and/or contributed by the employer are excluded from a Participant's gross
income to the extent of the applicable "exclusion allowance". The "exclusion
allowance" is equal to 20% of a Participant's includable compensation (taxable
earnings) for the tax year, multiplied by the number of years of employment,
reduced by the total of Purchase Payments made in prior tax years.

When Fixed Annuity payments commence, or if the Participant obtains a
partial or full redemption of the Units credited to his/her Accumulation Account
under the Contract, the amount received will be includable as ordinary income in
the year received, except that such portion of any amount received as is deemed
to represent a return of Purchase Payments originally included as gross income
made by the Participant will not be taxed. Full redemptions do not qualify for
special capital gains treatment nor 5-year income averaging applicable to
qualified plan lump sum distributions. However if a Participant makes a full
redemption after attaining age 59 1/2 or on account of a separation from
service, he/she may delay including the distribution in income by making a
rollover transfer, subject to requirements set by the Code, to an Individual
Retirement Account or another Section 403(b) annuity. A partial redemption of at
least 50% of the balance to the credit of a Participant on account of a
separation from service may be rolled over to an Individual Retirement Account,
subject to requirements set by the Code.

If the Participant receives any amount under the Contract, the Participant
must pay an additional tax of 10% of the amount of the distribution includable
in gross income for the taxable year. This additional tax shall not apply to
distributions which are (1) made after the date on which the Participant attains
age 59 1/2, (2) made to a beneficiary on or after the death of the Participant,
(3) attributable to the Participant's becoming permanently disabled, (4) made
after separation from service in a series of substantially equal periodic
payments made for the life (or life expectancy) of the Participant or the joint
lives (or joint life expectancies) of the Participant and his beneficiary, (5)
made to a Participant after separation of service after attainment of age 55,
(6) made to a Participant for medical care (not to exceed the amount deductible
by the employee), or (7) paid to alternate payees under a qualified domestic
relations order.

Restrictions on Withdrawals of Elective Contributions. Effective January
1, 1989 and thereafter, any funds in the Participant's account balance other
than funds attributable to assets held at the close of the last year beginning
before January 1, 1989 will be restricted from withdrawal except upon attainment
of age 59 1/2, separation from service, death, disability or hardship (hardship
withdrawals are to be limited to the amount of the Participant's own
contributions exclusive of earnings). However, any funds in the Participant's
account balance attributable to employer contributions, if any, and the earnings
thereon will not be restricted unless specifically provided for by the
employer's plan.

In tax years beginning after 1988, Section 403(b) Plans (other than church
plans) will be subject to nondiscrimination and coverage requirements, as well
as special rules with respect to minimum distributions.

SECTION 401(a) PLANS

An employer maintaining a pension or profit sharing Plan which satisfies
the requirements of Section 401(a) of the Code may make contributions to the
Contract which are generally currently deductible by the employer and are not
currently taxed to the Participants. The Code prescribes various limitations on
the maximum amount which may be contributed on behalf of any Participant.
Generally, annual contributions on behalf of a Participant may not exceed the
lesser of $30,000 (as indexed) or 25% of such Participant's compensation. In the
case of a 401(k) plan, the annual deferral limit for the Participant's elective
contributions is $10,500 (as indexed). In addition, Participants may make
after-tax contributions to the Contract if their Section 401(a) Plan permits.

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<PAGE> 28

When Fixed Annuity payments commence, or if the Participant obtains a
partial redemption of the units credited to his/her Accumulation Account under
the Contract, the amount received will be includable as ordinary income in the
year received, except that such portion of any amount received as is deemed to
represent a return of Participant after-tax Purchase Payments will not be taxed.
Full redemptions may qualify for special capital gains treatment or 5-year or
10-year income averaging if the payment constitutes a "lump sum distribution,"
as that term is defined in the Code and if certain conditions are met.

The special five-year forward averaging is available to a recipient of a
lump-sum distribution, received in a taxable year beginning before January 1,
2000, from a qualified retirement plan only if all these conditions are
satisfied: (1) The distribution is received on or after the employee has reached
age 59 1/2 (except for recipients making the ten-year forward averaging election
for employees who reached age 50 before 1986); (2) the recipient elects special
five-year forward averaging for the taxable year for all lump-sum distributions
received during that taxable year; and (3) no lump-sum distribution from the
same plan was rolled over tax-free into an IRA or another qualified plan.

The rules governing rollovers of distributions from a Section 401(a) Plan
are parallel to those dealing with distributions from Section 403(b) annuities.
(If the Participant receives a direct distribution from the plan, automatic
withholding of 20% will be made on the distribution -- even though it is
rendered not currently taxable by the Participant's subsequent rollover or
transfer of the gross amount to an IRA or another employer's plan.
Alternatively, the Participant may avoid the automatic 20% withholding by
directing the plan to transfer the amount involved directly to the IRA or
another employer's qualified plan. See "Income Tax Withholding" below.) In
addition, the 10% penalty on premature distributions from Section 403(b)
annuities is also applicable to Section 401(a) Plan distributions.

SECTION 408 (IRA) CONTRACTS

An individual, participating under a Contract which satisfies the
requirements of Section 408 of the Code, may make contributions to the Contract.
The Code prescribes various limitations on the maximum amounts which may be
contributed by or on behalf of the Participant and on the deductibility of the
contributions for federal income tax purposes. No federal income tax is payable
by the Participant on increases in the value of his/her Accumulation Account
until payments are received by the Participant.

When Fixed Annuity payments commence, or if the Participant obtains a
partial redemption of the units credited to his/her Accumulation Account under
the Contract, the amount received will be includable as ordinary income in the
year received, except that such portion of any amount received which is deemed
to represent a return of Participant nondeductible Purchase Payments will not be
taxed. Full or partial redemptions do not qualify for special capital gains
treatment nor 10-year income averaging applicable to certain qualified plan
distributions.

If the Participant receives any amount under the Contract prior to
attainment of age 59 1/2, the Participant must pay an additional excise tax of
10% of the amount of the distribution includable in gross income for the taxable
year. The additional tax shall not apply to distributions which are (1) made to
a beneficiary on or after the death of the Participant, (2) attributable to the
Participant's becoming permanently disabled, (3) made in a series of
substantially equal periodic payments made for the life (or life expectancy) of
the Participant or the joint lives (or joint life expectancies) of the
Participant and his/her beneficiary, (4) made for certain allowable medical care
expenses, (5) made for certain "qualified higher education expenses" or (6) made
as "qualified first time homebuyer distributions" (not to exceed $10,000 in the
aggregate). Any full or partial redemption will not be includable in ordinary
income if the Participant rolls over the distribution within 60 days to another
IRA.

MINIMUM DISTRIBUTION REQUIREMENTS

If the actual distributions from a qualified retirement plan, eligible
state or local government deferred compensation plan or an IRA are less than the
minimum required to be distributed commencing by April 1 in the calendar year
following the year the Participant attains age 70 1/2 (or, in the case of a
plan, the year of the Participant's retirement if still employed with the plan
sponsor at that

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age.) (see "Annuity Purchase Date" on page 21), the difference is considered to
be an excess accumulation and the IRS may impose a 50% excise tax on this excess
amount.

SECTION 457 PLANS

Section 457 of the Code allows employees of or independent contractors who
furnish services to a state or local government to establish an eligible
deferred compensation plan allowing the deferral of certain limited amounts of
compensation by way of salary reduction. Generally, the annual deferral limit is
the lesser of $8,000 (as indexed) or 33 1/3% of the Participant's includable
compensation. There is a "catch-up" provision which may permit a Participant to
defer a greater amount prior to retirement. State and local government includes
a state, a political subdivision of a state, any agency or instrumentality of
either of them, a tax-exempt rural electric cooperative or its tax-exempt
affiliates. Contributions are based on a special definition of compensation and
include any amounts contributed to a Section 403(b) tax sheltered annuity for
determining the contribution limits. All amounts deferred and property bought
with those amounts or income earned on those amounts remain the property of the
employer and are subject to the claims of its general creditors. However, under
the Small Business Job Protection Act of 1996 the assets of new eligible plans
of state and local governments must be held in trust for the "exclusive benefit"
of the Participant's (and their beneficiaries). Eligible plans existing before
the enactment of this law must comply with the trust and "exclusive benefit"
requirement by January 1, 1999. Distributions from a Section 457 plan are
subject to Section 401(a)(9) of the Code in addition to the rules applicable
under Section 457 of the Code and must begin no later than the April 1st of the
calendar year following the year in which the participant attains age 70 1/2
(or, if later, the year in which he retires).

NON-QUALIFIED DEFERRED COMPENSATION CONTRACTS

Taxed employers may establish a non-qualified deferred compensation
arrangement funded by non-qualified deferred compensation contracts allowing the
deferral of compensation through salary reduction. Such plans include, but are
not limited to, excess benefit plans, plans maintained by an employer primarily
for a select group of management or highly compensated employees, as well as
rabbi and secular trusts. Taxed employers for these non-qualified deferred
compensation plans include corporations, partnerships, S corporations and any of
their affiliates or subsidiaries. Contributions are determined on the plan's
definition of compensation. All amounts deferred by employees and any income
earned thereon remain the property of the employer and are subject to the claims
of its general creditors. In-service withdrawals from non-qualified deferred
compensation plans may be permitted for reasons of hardship under certain
conditions as specified in the plans. Distributions from these plans are
permitted when the Participant terminates employment, becomes permanently
disabled, retires, dies or as otherwise specified in the plan. As a general
rule, the Participant is subject to taxation upon receipt of the funds, and
there is usually no tax consequences to the employer, i.e., no deduction is
available for an employee's salary reduction agreement until paid out.

Such non-qualified deferred compensation arrangements for taxable employers
may be funded by either a Keynote Contract alone or by a Keynote Contract in
combination with a Fixed Annuity Contract.

INCOME TAX WITHHOLDING

Unless the Participant or payee elects to have no withholding, the taxable
portion of distributions under a Contract will be subject to income tax
withholding under federal and certain state laws. MONY will notify recipients of
taxable distributions under a Contract of their right to elect not to have
withholding apply.

For NQDC Contracts, Form W-2 withholding by the employer may be required.

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Effective January 1, 1992, distributions from qualified retirement plans
and Section 403(b) Contracts, other than individual retirement arrangements
("IRAs"), generally will be subject to mandatory federal income tax withholding
unless they either are:

1. Part of a series of substantially equal periodic payments (at
least annually) for the participant's life or life expectancy, the joint
lives or life expectancies of the participant and his/her beneficiary, or a
period certain of not less than 10 years, or

2. Required by the Code upon the participant's attainment of age
70 1/2 or death.

Such withholding will apply even if the distribution is rolled over into
another qualified plan including an IRA. The withholding can be avoided if the
participant's interest is directly transferred by the old plan to another
eligible qualified plan including an IRA. A direct transfer to the new plan can
be made only in accordance with the terms of the old plan. If withholding is not
avoided, the amount withheld may be subject to income tax and penalties unless
an equivalent amount is also rolled over into an IRA.

Pursuant to Revenue Ruling 90-24 of the Code, an exchange of a Section
403(b) annuity contract for another Section 403(b) annuity contract may qualify
as a tax-free exchange.

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<PAGE> 31

PERFORMANCE DATA

From time to time the performance of one or more of the Subaccounts may be
advertised. The performance data contained in these advertisements is based upon
historical earnings and is not indicative of future performance. The data for
each Subaccount reflects the results of the corresponding series of Diversified
Investors Portfolios or the Calvert Series and recurring charges and deductions
borne by or imposed on the Subaccount and on the corresponding series of the
Diversified Investors Portfolios or the Calvert Series. Set forth below for each
Subaccount is the manner in which the data contained in such advertisements will
be calculated.

Money Market Subaccount. The performance data for this Subaccount will
reflect the "yield", "effective yield" and "total return". The "yield" of the
Subaccount refers to the income generated by an investment in the Subaccount
over the seven day period stated in the advertisement. This income is
"annualized", that is, the amount of income generated by the investment during
that week is assumed to be generated each week over a 52-week period and is
shown as a percentage of the investment. The "effective yield" is calculated
similarly, but, when annualized, the income earned by an investment in the
Subaccount is assumed to be reinvested. The "effective yield" will be slightly
higher than the "yield" because of the compounding effect of this assumed
reinvestment. The total return is calculated as shown below.

Intermediate Government Bond, Core Bond, Balanced, Value & Income, Equity
Growth and Calvert Series Subaccounts. The performance data for these
Subaccounts will reflect the "yield" and "total return". The "yield" of each of
these Subaccounts refers to the income generated by an investment in that
Subaccount over the 30 day period stated in the advertisement and is the result
of dividing that income by the value of the Subaccount. The value of each
Subaccount is the average daily number of Units outstanding multiplied by the
Unit Value on the last day of the period. The "yield" reflects deductions for
all charges, expenses, and fees of both the Series and the Subaccount Variable.
"average annual total return" for each of these Subaccounts and the Money Market
Subaccount refers to the return a Contractholder would receive during the period
indicated if a $1,000 Purchase Payment was made the indicated number of years
ago. It reflects historical investment results less charges and deductions of
both the Series and the Subaccount, with the distribution being made in cash
rather than in the form of one of the settlement options, at the close of the
period for which the "annualized total return" data is given.

Total return is historical in nature and is not intended to indicate future
performance. Total return will be quoted for the most recent one-year period,
and the average annual total return will be quoted for the most recent five- and
ten-year periods, or the period from the commencement of the public offering of
the Contracts, if shorter. Actual total return quotations may also be advertised
for other specified periods, such as calendar years and calendar quarters.
Cumulative total return for periods of more than one year may also be quoted.
These figures will be accompanied by the standard, average annual total return
quotations.

From time to time, any series of Diversified Investors Portfolios or the
Calvert Series may provide information concerning general economic conditions
and supply comparative performance data and rankings, with respect to comparable
investments for the same period, for unmanaged market indices such as the Dow
Jones Industrial Average and the Standard and Poor's 500, and from recognized
independent sources such as Bank Rate Monitor, Money, Forbes, Barron's, Lipper
Analytical Services, Inc., CDA Investment Technologies, Inc., Frank Russell
Universe Data, Wiesenberger Investment Companies Service, Mutual Fund Values,
Mutual Fund Forecaster, VARDS and Morningstar.

In addition, reference may be made in advertisements to various indices
including, without limitation, the Standard & Poor's 500 Stock Index, Salomon
Brothers Broad Investment Grade Index and Lehman Brothers Government/Corporate
Bond Index, and Russell Price Driven Index, in order to provide the reader a
basis of comparison for performance.

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DIVERSIFIED INVESTORS PORTFOLIOS

Six Subaccounts of Keynote invest exclusively in corresponding series of
Diversified Investors Portfolios. Diversified Investors Portfolios is a trust
organized on September 1, 1993 under the laws of the State of New York and is
registered under the 1940 Act as an open-end, diversified management investment
company. The investment objectives of the series of Diversified Investors
Portfolios currently available under the Contracts through such Subaccounts are
as follows:

Money Market Series: To provide liquidity and as high a level of income as
is consistent with the preservation of capital, through investment in domestic
and foreign U.S. dollar-denominated money market obligations with maturities of
397 days or less. An investor's interest in the Money Market Series is neither
insured nor guaranteed by the U.S. Government.

Intermediate Government Bond Series: To provide as high a level of current
income as is consistent with preservation of capital, through investment in U.S.
Government and U.S. Government agency and instrumentality securities with short
and intermediate maturities, and high quality short-term obligations.

Core Bond Series: To achieve the maximum total return through investment
in investment grade debt securities, U.S. Government and U.S. Government agency
and instrumentality securities, collateralized mortgage obligations guaranteed
by these agencies or instrumentalities and high quality short-term obligations.

Balanced Series: To provide a high total return consistent with a broad
diversified mix of stocks, bonds and money market instruments.

Equity Growth Series: To provide a high level of capital appreciation
through investment in a diversified portfolio of common stocks with potential
for above-average growth in earnings; current income is a secondary objective.

There can, of course, be no assurance that any series of Diversified
Investors Portfolios will achieve its investment objectives.

CORE/FEEDER STRUCTURE

Each Subaccount which invests in Diversified Investors Portfolios does so
through a two tier, core/feeder fund structure in which each Subaccount invests
in a corresponding series of Diversified Investors Portfolios.

In addition to selling beneficial interests to such Subaccounts,
Diversified Investors Portfolios may sell beneficial interests of its series to
other insurance company separate accounts, mutual funds, collective investment
vehicles or institutional investors. Such investors will invest in a series of
Diversified Investors Portfolios on the same terms and conditions as the
applicable Subaccount and will pay a proportionate share of the Series'
expenses. However, the other investors investing in such series are not required
to sell their shares at the same public offering price as the Subaccount due to
variations in sales commissions and other operating expenses. Therefore,
Contractholders should be aware that these differences may result in differences
in returns experienced by investors in the different entities that invest in
each series of Diversified Investors Portfolios.

Smaller entities investing in a series of Diversified Investors Portfolios
may be materially affected by the actions of larger entities investing in that
series. For example, if a large fund withdraws from a series of Diversified
Investors Portfolios, the remaining investors may experience higher pro rata
operating expenses, thereby producing lower returns. Additionally, the affected
series may become less diverse, resulting in increased portfolio risk. (However,
this possibility also exists for any type of collective investment vehicle which
has institutional or other large investors.) Also, investors with a greater pro
rata ownership in a series of Diversified Investors Portfolios could have
effective voting control of the operations of that series. Whenever a Subaccount
is requested to vote on matters pertaining to a series of the Diversified
Investors Portfolios (other than a vote to continue a series upon

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the withdrawal of an investor in the series), MONY, as the legal owner of all
assets in the Subaccount, shall vote in accordance with the procedures set forth
under "Voting Rights" at page 23, including, to the extent required by law,
procedures through which MONY shall receive instructions with respect to such
vote from Contractholders and/or Participants. Certain changes in the investment
objectives, policies or restrictions of a series of Diversified Investors
Portfolios may require that MONY withdraw a Subaccount's interest in that
series. Any such withdrawal could result in a distribution "in kind" of
portfolio securities (as opposed to a cash distribution from the series). If
securities are distributed, the Subaccount could incur brokerage or other
charges in converting the securities to cash. In addition, the distribution in
kind may result in a less diversified portfolio of investments or adversely
affect the liquidity of the Subaccount. Notwithstanding the above, there are
other ways for Diversified Investors Portfolios to meet redemption requests from
its investors, such as temporary borrowings.

INVESTMENT OBJECTIVES AND POLICIES

Each of the Subaccounts described above seeks to achieve its investment
objective by investing all of its assets in a corresponding series of
Diversified Investors Portfolios, which is a diversified, open-end management
investment company. The investment objective of each series of Diversified
Investors Portfolios may be changed without the approval of the investors in
that series, but not without written notice thereof to its investors (including
a Subaccount) 30 days prior to implementing the change. MONY may withdraw the
investment of a Subaccount from its corresponding series of Diversified
Investors Portfolios on any Portfolio Business Day (see page 48). Upon any such
withdrawal, MONY would consider what action might be taken, including the
investment of all the assets of the Subaccount in another pooled investment
entity having the same investment objective.

Each series of Diversified Investors Portfolios has a different investment
objective which it pursues through the investment policies described below.
Since each series of Diversified Investors Portfolios has a different investment
objective, each can be expected to have different investment results and be
subject to different market and financial risks. See "Investment Techniques and
Restrictions" herein and in the Statement of Additional Information for a
description of the fundamental policies of each series of Diversified Investors
Portfolios that cannot be changed without approval by the holders of a "majority
of the outstanding voting securities" (as defined in the 1940 Act) of such
series. Except as stated otherwise, all investment guidelines, policies and
restrictions of each series described herein and in the Statement of Additional
Information are non-fundamental.

Each series of Diversified Investors Portfolios has a different portfolio
turnover rate which is the percentage computed by dividing the lesser of
portfolio purchases or sales by the average value of the series in each case
excluding securities with maturities at the time of acquisition of one year or
less. Brokerage expenses can be expected to be higher as a result of higher
portfolio turnover rates. The rate of portfolio turnover is not a limiting
factor when it is deemed appropriate to purchase or sell securities of a series.

With respect to each series of Diversified Investors Portfolios,
Diversified has contracted for certain investment advisory services with one or
more subadvisers. Diversified and the subadviser(s) for a particular series of
Diversified Investors Portfolios are referred to herein collectively as the
"Advisers". There can be no guarantee that the investment objective of any of
the series of Diversified Investors Portfolios will be met. The following
sections describe the investment objective and policies of each series of
Diversified Investors Portfolio currently available under the Contracts through
Subaccounts.

MONEY MARKET SERIES. The investment objective of the Money Market Series
is to provide liquidity and as high a level of current income as is consistent
with the preservation of capital. The Money Market Series invests in high
quality short-term money market instruments. Securities in which the Money
Market Series invests may not earn as high a level of current income as
long-term or lower quality securities which generally have less liquidity,
greater market risk and more fluctuation in market value.

To achieve its investment objective, the Money Market Series invests in
U.S. dollar-denominated short-term money market obligations, including
securities issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, certificates of deposit, time deposits, bankers' acceptances
and

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other short-term obligations issued by domestic banks and domestic branches and
subsidiaries of foreign banks, and high quality commercial paper and other
short-term corporate obligations, including those with floating or variable
rates of interest. In addition, the Money Market Series may lend its portfolio
securities, enter into repurchase agreements and reverse repurchase agreements,
and invest in securities issued by foreign banks and corporations outside the
United States. The Money Market Series reserves the right to concentrate 25% or
more of its total assets in obligations of banks.

In accordance with Rule 2a-7 under the 1940 Act, the Money Market Series
will maintain a dollar-weighted average portfolio maturity of 90 days or less,
purchase only instruments having remaining maturities of 397 days or less and
invest only in U.S. dollar-denominated securities determined in accordance with
procedures established by the Board of Trustees of Diversified Investors
Portfolios (the "Board of Trustees") to present minimal credit risks and which
are rated in one of the two highest rating categories for debt obligations by at
least two nationally recognized statistical rating organizations (an "NRSRO")
(or one NRSRO if the instrument was rated by only one such organization) or, if
unrated, are of comparable quality as determined in accordance with procedures
established by the Board of Trustees (collectively, "Eligible Securities").

Eligible Securities include "First Tier Securities" and "Second Tier
Securities." First Tier Securities include those that possess a rating in the
highest category in the case of a single-rated security or at least two ratings
in the highest rating category in the case of multiple-rated securities or, if
the securities do not possess a rating, are determined to be of comparable
quality by the Advisers pursuant to the guidelines adopted by the Board of
Trustees. All other Eligible Securities are Second Tier Securities. The Money
Market Series will invest at least 95% of its total assets in First Tier
Securities.

The NRSROs currently rating instruments of the type the Money Market Series
may purchase are Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's
Corporation ("S&P"), Duff & Phelps, Inc., Fitch Investors Service, Inc., IBCA
Limited, IBCA Inc. and Thomson BankWatch, Inc., and their rating criteria are
described in the Appendix to the Statement of Additional Information. The
Statement of Additional Information contains further information concerning the
rating criteria and other requirements governing the Money Market Series'
investments, including information relating to the treatment of securities
subject to a tender or demand feature and securities deemed to possess a rating
based on comparable rated securities of the same issuer.

In addition, the Money Market Series will not invest more than 5% of its
total assets in the securities (including the securities collateralizing a
repurchase agreement) of, or subject to puts (including letters of credit,
guaranties or other credit support) issued by, a single issuer, except that (i)
the Money Market Series may invest more than 5% of its total assets in a single
issuer for a period of up to three business days in certain limited
circumstances, (ii) the Money Market Series may invest in obligations issued or
guaranteed by the U.S. Government without any such limitation, and (iii) the
limitation with respect to puts does not apply to unconditional puts if no more
than 10% of the Money Market Series' total assets is invested in securities
issued or guaranteed by the issuer of the unconditional put. Investments in
Second Tier Securities will be limited to 5% of the Money Market Series' total
assets, with the investment in any one such issuer being limited to no more than
the greater of 1% of the Money Market Series' total assets or $1,000,000. As to
each security, these percentages are measured at the time the Money Market
Series purchases the security.

The Money Market Series seeks to achieve its investment objective through
investments in the following types of U.S. dollar-denominated money market
instruments.

BANK OBLIGATIONS. The Money Market Series may invest in U.S.
dollar-denominated certificates of deposit, time deposits, bankers'
acceptances and other short-term obligations issued by banks. Certificates
of deposit are certificates evidencing the obligation of a bank to repay
funds deposited with it for a specified period of time. Such instruments
include Yankee Certificates of Deposit, which are certificates of deposit
denominated in U.S. dollars and issued in the United States by the domestic
branch of a foreign bank. Time deposits are non-negotiable deposits
maintained in a banking institution for a specified period of time at a
stated interest rate. Time deposits which may be held by the Money Market
Series are not insured by the Federal Deposit Insurance Corporation or any
other agency of the U.S. Government. The Money Market Series will not
invest more than

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10% of the value of its net assets in time deposits maturing in longer than
seven days and other instruments which are illiquid or not readily
marketable. The Money Market Series may also invest in certificates of
deposit and time deposits issued by foreign banks outside the United
States.

The Money Market Series may also invest in bankers' acceptances and other
short-term obligations. Bankers' acceptances are credit instruments
evidencing the obligation of a bank to pay a draft drawn on it by a
customer. These instruments reflect the obligation both of the bank and of
the drawer to pay the face amount of the instrument upon maturity. The
other short-term obligations may include uninsured, direct obligations
which have either fixed, floating or variable interest rates.

To the extent the Money Market Series' investments are concentrated in the
banking industry, the Money Market Series will have correspondingly greater
exposure to the risk factors which are characteristic of such investments.
Sustained increases in interest rates can adversely affect the availability
or liquidity and cost of capital funds for a bank's lending activities, and
a deterioration in general economic conditions could increase the exposure
to credit losses. In addition, the value of and the investment return on
investments in the Money Market Series could be affected by economic or
regulatory developments in or related to the banking industry, which
industry also is subject to the effects of the concentration of loan
portfolios in leveraged transactions and in particular businesses, and
competition within the banking industry, as well as with other types of
financial institutions. The Money Market Series, however, will seek to
minimize its exposure to such risks by investing only in debt securities
which are determined to be of high quality.

U.S. GOVERNMENT AND AGENCY SECURITIES. Securities issued or guaranteed by
the U.S. Government or its agencies or instrumentalities include U.S.
Treasury securities, which differ only in their interest rates, maturities
and times of issuance. Treasury Bills have initial maturities of one year
or less; Treasury Notes have initial maturities of one to ten years; and
Treasury Bonds generally have initial maturities of greater than ten years.
Some obligations issued or guaranteed by U.S. Government agencies and
instrumentalities, for example, Government National Mortgage Association
pass-through certificates, are supported by the full faith and credit of
the U.S. Treasury; others, such as those of the Federal Home Loan Banks, by
the right of the issuer to borrow from the Treasury; others, such as those
issued by the Federal National Mortgage Association, by discretionary
authority of the U.S. Government to purchase certain obligations of the
agency or instrumentality; and others, such as those issued by the Student
Loan Marketing Association, only by the credit of the agency or
instrumentality. While the U.S. Government provides financial support to
such U.S. Government-sponsored agencies or instrumentalities, no assurance
can be given that it will always do so, since it is not so obligated by
law. The Money Market Series will invest in such securities only when the
Advisers are satisfied that the credit risk with respect to the issuer is
minimal. The Money Market Series itself, and its share price and yield, are
not guaranteed by the U.S. Government. For additional information on U.S.
Government securities, see "Diversified Investors Portfolios" in the
Statement of Additional Information.

COMMERCIAL PAPER. Commercial paper consists of short-term, unsecured
promissory notes issued to finance short-term credit needs. The commercial
paper purchased by the Money Market Series will consist only of U.S.
dollar-denominated direct obligations issued by domestic and foreign
entities. The other corporate obligations in which the Money Market Series
may invest consist of high quality, U.S. dollar-denominated short-term
bonds and notes issued by domestic corporations.

The Money Market Series may invest in commercial paper issued by major
corporations in reliance on the exemption from registration afforded by
Section 3(a)(3) of the Securities Act of 1933, as amended (the "1933 Act").
Such commercial paper may be issued only to finance current transactions
and must mature in nine months or less. Trading of such commercial paper is
conducted primarily by institutional investors through investment dealers,
and individual investor participation in the commercial paper market is
very limited.

UNSECURED PROMISSORY NOTES. The Money Market Series also may purchase
unsecured promissory notes ("Notes") which are not readily marketable and
have not been registered under the

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1933 Act, provided such investments are consistent with the Money Market
Series' investment objective. The Notes purchased by the Money Market
Series will have remaining maturities of 13 months or less and will be
deemed by the Board of Trustees of Diversified Investors Portfolios, or by
the Advisers on its behalf, to present minimal credit risks and will meet
the quality criteria set forth above. The Money Market Series will invest
no more than 10% of its net assets in such Notes and in other securities
that are not readily marketable (which securities would include floating
and variable rate demand obligations as to which the Money Market Series
cannot exercise the demand feature described in the Statement of Additional
Information and as to which there is no secondary market).

RESTRICTED SECURITIES. The Money Market Series may invest in securities
that are subject to legal or contractual restrictions on resale. These
securities may be illiquid and, thus, the Money Market Series may not
purchase them to the extent that more than 10% of the value of its net
assets would be invested in illiquid securities. However, if a substantial
market of qualified institutional buyers develops pursuant to Rule 144A
under the 1933 Act for such securities held by the Money Market Series, the
Money Market Series intends to treat such securities as liquid securities
in accordance with procedures approved by the Board of Trustees of
Diversified Investors Portfolios. To the extent that for a period of time,
qualified institutional buyers cease purchasing such restricted securities
pursuant to Rule 144A, the Money Market Series' investing in such
securities may have the effect of increasing the level of illiquidity in
the Money Market Series during such period.

REPURCHASE AGREEMENTS AND REVERSE REPURCHASE AGREEMENTS. Repurchase
agreements involve the acquisition by the Money Market Series of an
underlying debt instrument subject to an obligation of the seller to
repurchase, and the Money Market Series to resell, the instrument at a
fixed price, usually not more than one week after its purchase. The Money
Market Series or a sub-custodian will have custody of securities acquired
by the Money Market Series under a repurchase agreement.

Repurchase agreements may be entered into for the Series with sellers which
are usually member banks of the Federal Reserve System or member firms of
the New York Stock Exchange (or a subsidiary thereof). Such transactions
afford an opportunity for the Series to earn a return on available cash
with minimal market risk. Certain costs may be incurred by the Money Market
Series in connection with the sale of the securities if the seller does not
repurchase them in accordance with the repurchase agreement. In addition,
if bankruptcy proceedings are commenced with respect to the seller of the
securities, realization on the securities by the Money Market Series may be
delayed or limited. The Money Market Series will consider on an ongoing
basis the creditworthiness of the institutions with which it enters into
repurchase agreements. Repurchase agreements are considered collateralized
loans under the 1940 Act.

The Money Market Series may borrow funds for temporary or emergency
purposes, such as meeting larger than anticipated redemption requests, and not
for leverage. One means of borrowing is by agreeing to sell portfolio securities
to financial institutions such as banks and broker-dealers and to repurchase
them at a mutually agreed date and price (a "reverse repurchase agreement"). At
the time the Money Market Series enters into a reverse repurchase agreement it
will place in a segregated custodial account cash, U.S. Government securities or
high-grade debt obligations having a value equal to the repurchase price,
including accrued interest. Reverse repurchase agreements involve the risk that
the market value of the securities sold by the Money Market Series may decline
below the repurchase price of those securities.

FOREIGN SECURITIES. The Money Market Series may invest in U.S.
dollar-denominated foreign securities issued outside the United States,
such as obligations of foreign branches and subsidiaries of domestic banks
and foreign banks, including Eurodollar certificates of deposit, Eurodollar
time deposits and Canadian time deposits, commercial paper of Canadian and
other foreign issuers, and U.S. dollar-denominated obligations issued or
guaranteed by one or more foreign governments or any of their agencies or
instrumentalities. Foreign securities may represent a greater degree of
risk than do securities of domestic issuers due to possible exchange rate
fluctuations, possible exchange controls, less publicly available
information, more volatile markets, less securities regulation, less

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favorable tax provisions (including possible withholding taxes), changes in
governmental administration or economic or monetary policy (in the United
States or abroad), war or expropriation. For a complete description of
foreign securities the Money Market Series may purchase, see "Diversified
Investors Portfolios -- Investment Policies" in the Statement of Additional
Information.

CERTAIN OTHER OBLIGATIONS. In order to allow for investments in new
instruments that may be created in the future, upon MONY supplementing this
Prospectus, the Money Market Series may invest in obligations other than
those listed previously, provided such investments are consistent with the
investment objective, policies and restrictions of the Money Market Series.

The Statement of Additional Information includes a discussion of additional
investment techniques such as zero coupon obligations, variable rate and
floating rate securities, participation interests, guaranteed investment
contracts and when-issued and forward commitment securities. The Statement
of Additional Information also includes a discussion of non-fundamental
investment policies, as well as a listing of specific investment
restrictions which constitute fundamental policies of the Money Market
Series and which cannot be changed without the approval of the holders of a
"majority of the outstanding voting securities" (as defined in the 1940
Act) of the Money Market Series. See "Diversified Investors
Portfolios -- Investment Restrictions" in the Statement of Additional
Information.

INTERMEDIATE GOVERNMENT BOND SERIES. The investment objective of the
Intermediate Government Bond Series is to provide as high a level of current
income as is consistent with the preservation of capital. The yield of the
Intermediate Government Bond Fund Series normally is expected to be higher than
a money market fund but lower than a longer-term or lower quality bond fund. The
Intermediate Government Bond Series pursues its investment objective by
investing in U.S. Government obligations and high quality short-term obligations
(including repurchase agreements and reverse repurchase agreements).

The Advisers attempt to maintain the Intermediate Government Bond Series'
"duration" between one and five years, which means that the Intermediate
Government Bond Fund Series' overall sensitivity to interest rates should be
similar to that of bonds and notes with remaining average maturities from one to
five years. The Intermediate Government Bond Series' dollar-weighted average
maturity (or dollar-weighted average life in the case of mortgage-backed
securities) may be longer than four years from time to time, but will not exceed
ten years under normal conditions. The Intermediate Government Bond Series may
hold individual securities with remaining maturities of up to thirty years.

Since the value of fixed income securities generally fluctuates inversely
with changes in interest rates, the duration of the Intermediate Government Bond
Series will vary to reflect the Advisers' assessments of prospective changes in
interest rates. The Advisers' strategy will be to adjust the duration of the
Intermediate Government Bond Fund Series so that the Intermediate Government
Bond Series may benefit from relative price appreciation when interest rates
decline and may protect capital value when interest rates rise. The success of
this strategy will depend on the Advisers' ability to manage the Intermediate
Government Bond Fund Series through changes in interest rates, and there is a
risk that the value of the securities held by the Intermediate Government Bond
Series will decline.

The following is a discussion of the various investments of and techniques
employed by the Intermediate Government Bond Series. Additional information
about the investment policies of the Intermediate Government Bond Series appears
under "Diversified Investors Portfolios" in the Statement of Additional
Information.

U.S. GOVERNMENT AND AGENCY SECURITIES. The Intermediate Government Bond
Series may invest in U.S. Government securities. See "U.S. Government and
Agency Securities" above under Money Market Series.

The Intermediate Government Bond Series may invest a portion of its assets
in short-term U.S. Government securities with remaining maturities of one
year or less and repurchase agreements relating thereto. When the Advisers
believe market conditions warrant a temporary defensive

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position, the Intermediate Government Bond Series may invest up to 100% of
its assets in these instruments.

SHORT-TERM INSTRUMENTS. Cash, commercial paper, short-term obligations,
repurchase agreements or other forms of debt securities may be held to
provide a reserve for future purchases of securities during periods of
unusual market conditions or in order to reduce volatility, or as a
temporary defensive measure when the Advisers determine securities markets
to be overvalued. The Intermediate Government Bond Series limits its
short-term investments to those U.S. dollar-denominated instruments which
are determined by or on behalf of the Board of Trustees to present minimal
credit risks and which are of "high quality" as determined by a major
rating service or, in the case of instruments which are not rated, are of
comparable quality pursuant to procedures established by the Board of
Trustees. Investments in high quality short-term instruments may, in many
circumstances, result in a lower yield than would be available from
investments in instruments with a lower quality or longer term.

REPURCHASE AGREEMENTS AND REVERSE REPURCHASE AGREEMENTS. Repurchase
agreements and reverse repurchase agreements may be entered into for the
Intermediate Government Bond Series. See "Repurchase Agreements and Reverse
Repurchase Agreements" under Money Market Series.

The Intermediate Government Bond Series may borrow funds for temporary or
emergency purposes, such as meeting larger than anticipated redemption
requests, and not for leverage.

RESTRICTED SECURITIES. The Intermediate Government Bond Series may not
invest more than 15% of its net assets in securities that are subject to
legal or contractual restrictions on resale unless a dealer or
institutional trading market in such securities exists, in which case such
restricted securities would be considered exempt from such 15% limit. Under
the supervision of the Board of Trustees, the Advisers determine the
liquidity of restricted securities and, through reports from the Advisers,
the Board of Trustees will monitor trading activity in restricted
securities. Because Rule 144A is relatively new, it is not possible to
predict how these markets will develop. If institutional trading in
restricted securities were to decline, the liquidity of the Intermediate
Government Bond Series could be adversely affected. See "Restricted
Securities" above under Money Market Series.

OPTIONS AND FUTURES CONTRACTS. The Intermediate Government Bond Series may
buy and sell options and futures contracts to manage its exposure to
changing interest rates and securities prices. Some options and futures
strategies, including selling futures, buying puts, and writing calls,
hedge the Intermediate Government Bond Series' investments against price
fluctuations. Other strategies, including buying futures, writing puts and
buying calls, tend to increase market exposure. The Intermediate Government
Bond Series may invest in options (including over-the-counter options) and
futures contracts based on any type of security or index related to its
investments.

Options and futures can be volatile investments, and involve certain risks.
If the Advisers apply a hedge at an inappropriate time or judge interest
rates incorrectly, options and futures strategies may lower the
Intermediate Government Bond Series' return. The costs of hedging are not
reflected in the Intermediate Government Bond Series' yield but are
reflected in the Intermediate Government Bond Series' total return. The
Intermediate Government Bond Series' could also experience losses if its
options and futures positions were poorly correlated with its other
investments, or if it could not close out its positions because of an
illiquid secondary market.

The Intermediate Government Bond Series currently does not intend to engage
in the writing of options, except for the purpose of terminating an
existing position or under the limited circumstances described under
"Diversified Investors Portfolios" in the Statement of Additional
Information. Nevertheless, the Intermediate Government Bond Series has the
authority to write options and may do so in the future if the Advisers
determine that such transactions are in the best interests of the
Intermediate Government Bond Series.

DELAYED DELIVERY TRANSACTIONS. In order to help ensure the availability of
suitable securities for the Intermediate Government Bond Series, the
Advisers may purchase securities for the Interme-

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diate Government Bond Series on a "when-issued" or on a "forward delivery"
basis, which means that the obligations would be delivered to the
Intermediate Government Bond Series at a future date beyond customary
settlement time. Under normal circumstances, the Intermediate Government
Bond Series would take delivery of such securities. In general, the
Intermediate Government Bond Series would not pay for the securities until
they are received, and would not start earning interest on the obligations
until the contractual settlement date. While awaiting delivery of the
obligations purchased on such basis, the Intermediate Government Bond
Series would establish a segregated account consisting of cash, cash
equivalents or high grade liquid debt securities equal to the amount of its
commitments to purchase "when-issued" securities. An increase in the
percentage of the Intermediate Government Bond Series' assets committed to
the purchase of securities on a "when-issued" basis may increase the
volatility of its net asset value.

OTHER INVESTMENTS AND INVESTMENT TECHNIQUES. The Intermediate Government
Bond Series may also utilize the following investments and investment
techniques and practices: investments in foreign securities, options on
futures contracts, foreign currency exchange transactions, options on
foreign currencies. The Intermediate Government Bond Series does not intend
to utilize any of these investment practices to the extent of more than 5%
of its assets. See "Diversified Investors Portfolios" in the Statement of
Additional Information for further information.

CORE BOND SERIES. The investment objective of the Core Bond Series is to
achieve the maximum total return. The Core Bond Series' yield normally is
expected to be higher than a money market fund but lower than a longer-term or
lower quality bond fund. The Core Bond Series pursues its investment objective
by investing in investment grade debt securities, U.S. Government obligations,
including U.S. Government agency and instrumentality obligations and
collateralized mortgage obligations guaranteed by these agencies and high
quality short-term obligations (including repurchase agreements and reverse
repurchase agreements). At least 65% of the Series' assets is invested in U.S.
Government securities, corporate bonds and short-term instruments.

The Advisers attempt to maintain the Core Bond Series' "duration" between
three and ten years, which means that the Core Bond Series' overall sensitivity
to interest rates should be slightly more then that of bonds and notes with
remaining average maturities from three to fifteen years. The Core Bond Series'
dollar-weighted average maturity (or dollar-weighted average life in the case of
mortgage-backed securities) may be longer than fifteen years from time to time,
but will not exceed thirty years under normal conditions.

Since the value of fixed income securities generally fluctuates inversely
with changes in interest rates, the duration of the Core Bond Series will vary
to reflect the Advisers' assessments of prospective changes in interest rates.
The Advisers' strategy will be to adjust the duration of the Core Bond Series so
that the Core Bond Series may benefit from relative price appreciation when
interest rates decline and may protect capital value when interest rates rise.
The success of this strategy will depend on the Advisers' ability to manage the
Core Bond Series through changes in interest rates, and there is a risk that the
value of the securities held by the Core Bond Series will decline.

The following is a discussion of the various investments of and techniques
employed by the Core Bond Series. Additional information about the investment
policies of the Core Bond Series appears under "Diversified Investors
Portfolios" in the Statement of Additional Information.

U.S. GOVERNMENT AND AGENCY SECURITIES. The Core Bond Series may invest in
U.S. Government securities. See "U.S. Government and Agency Securities"
above under Money Market Series.

The Core Bond Series may invest a portion of its assets in short-term U.S.
Government securities with remaining maturities of one year or less and
repurchase agreements relating thereto. When the Advisers believe market
conditions warrant a temporary defensive position, the Core Bond Series may
invest up to 100% of its assets in these instruments.

CORPORATE BONDS. The Core Bond Series may purchase debt securities of
United States corporations only if they carry a rating of at least Baa from
Moody's or BBB from S&P or which, if not rated by these rating agencies,
are judged by the Advisers to be of comparable quality. Securities rated
Baa by Moody's or BBB by S&P may have speculative characteristics. Changes
in economic

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conditions or other circumstances are more likely to lead to a weakened
capacity to make principal and interest payments than is the case for
higher grade securities. See the Appendix to the Statement of Additional
Information for an explanation of these ratings.

FOREIGN SECURITIES. The Core Bond Series may invest in securities of
foreign issuers. The Core Bond Series' investments in unlisted foreign
securities are subject to the overall restrictions applicable to
investments in illiquid securities. Foreign securities may represent a
greater degree of risk than do securities of domestic issuers due to
possible exchange rate fluctuations, possible exchange controls, less
publicly available information, more volatile markets, less securities
regulation, less favorable tax provisions (including possible withholding
taxes), changes in governmental administration or economic or monetary
policy (in the United States or abroad), war or expropriation. Forward
foreign currency exchange contracts may also be entered into for the
purchase or sale of foreign currency solely for hedging purposes against
adverse rate changes. A currency exchange contract allows a definite price
in dollars to be fixed for foreign securities that have been purchased or
sold (but not settled) for the Core Bond Series. Entering into such
exchange contracts may result in the loss of all or a portion of the
benefits which otherwise could have been obtained from favorable movements
in exchange rates. In addition, entering into such contracts means
incurring certain transaction costs and bearing the risks of incurring
losses if rates do not move in the direction anticipated.

SHORT-TERM INSTRUMENTS. Cash, commercial paper, short-term obligations,
repurchase agreements, bank certificates of deposit or other forms of debt
securities may be held to provide a reserve for future purchases of
securities, during periods of unusual market conditions or in order to
reduce volatility, or as a temporary defensive measure when the Advisers
determine securities markets to be overvalued. See "Short-Term Instruments"
above under Intermediate Government Bond Series.

REPURCHASE AGREEMENTS AND REVERSE REPURCHASE AGREEMENTS. The Core Bond
Series may enter into repurchase agreements and reverse repurchase
agreements. See "Repurchase Agreements and Reverse Repurchase Agreements"
above under Money Market Series. The Core Bond Series may borrow Funds for
temporary or emergency purposes, such as meeting larger then anticipated
redemption requests, and not for leverage.

RESTRICTED SECURITIES. The Core Bond Series may not invest more than 15%
of its net assets in securities that are subject to legal or contractual
restrictions on resale. See "Restricted Securities" above under Money
Market Series.

OPTIONS AND FUTURES CONTRACTS. The Core Bond Series may buy and sell
options and futures contracts to manage its exposure to changing interest
rates and securities prices. See "Options and Futures Contracts" above
under Intermediate Government Bond Series. The Core Bond Series currently
does not intend to engage in the writing of options, except for the purpose
of terminating an existing position or under the limited circumstances
described in the Statement of Additional Information. Nevertheless, the
Core Bond Series has the authority to write options and may do so in the
future if the Advisers determine that such transactions are in the best
interests of the Core Bond Series.

DELAYED DELIVERY TRANSACTIONS. In order to help ensure the availability of
suitable securities for the Core Bond Series, the Advisers may purchase
securities for the Core Bond Series on a "when-issued" or on a "forward
delivery" basis, which means that the Securities would be delivered to the
Core Bond Series at a future date beyond customary settlement times. See
"Delayed Delivery Transactions" above under Intermediate Government Bond
Series.

OTHER INVESTMENTS AND INVESTMENT TECHNIQUES. The Core Bond Series may also
utilize the following investments and investment techniques and practices:
options on futures contracts and options on foreign currencies. The Core
Bond Series does not intend to utilize any of these investments or
techniques to the extent of more than 5% of its assets. See the Statement
of Additional Information for further information.

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<PAGE> 41

BALANCED SERIES. The investment objective of the Balanced Series is to
provide a high total investment return consistent with a broad diversified mix
of stocks, bonds and money market instruments. The Balanced Series pursues its
investment objective by investing in a managed mix of common stocks (and/or
equivalents including American Depository Receipts), preferred stocks, debt
securities of U.S. domiciled corporations, U.S. government securities,
commercial paper of U.S. corporations, and bank obligations. The Advisers will
determine the proportions of each type of investment to achieve an asset mix
they believe appropriate for an investor who desires diversification of
investment. The Balanced Series will vary the proportion of each type of asset
purchased according to the Advisers' interpretations of changes in economic
conditions and the sensitivity of each type of investment to those changes. The
Advisers seek to shift emphasis among stocks, bonds and short-term instruments
to maximize participation in positive markets and preservation of capital in
negative markets and otherwise in response to market conditions.

The Balanced Series policy is to invest its assets in a broad list of
equity and fixed income securities, such as common stocks, preferred stocks and
bonds, including short-term obligations. The list may be diversified not only by
companies and industries, but also by type of security. Some fixed income
securities may also have a right to purchase common stock by means of a
conversion privilege or attached warrants. The Balanced Series may vary the
percentage of assets invested in any one type of security in accordance with the
Advisers' interpretation of economic and market conditions, fiscal and monetary
policy, and underlying securities values. However, at least 25% of the total
assets of the Balanced Series are always invested in fixed income senior
securities including debt securities and preferred stock. In selecting common
stocks, emphasis is placed on investing in established companies with market
capitalizations of $100,000,000 or more and seasoned management teams. Most of
the Balanced Series' non-convertible long-term debt investments consist of
"investment grade" securities (rated Baa or better by Moody's or BBB or better
by S&P), although unrated debt securities may be purchased and held if they are
judged by the Advisers to be of equivalent quality. Securities rated Baa by
Moody's or BBB by S&P may have speculative characteristics. Changes in economic
conditions or other circumstances may weaken more severely the capacity of
issuers of Baa or BBB securities to make principal and interest payments than in
the case for issuers of higher grade bonds. Less than 5% of the Balanced Series
investments consist of securities rated Baa by Moody's or BBB by S&P. For a
description of these ratings, see the Appendix to the Statement of Additional
Information.

The Balanced Series may invest a portion of its assets in short-term U.S.
Government securities with remaining maturities of one year or less and
repurchase agreements relating thereto. When the Advisers believe market
conditions warrant a temporary defensive position, the Balanced Series may
invest up to 100% of its assets in these instruments or other money market
instruments.

VALUE & INCOME SERIES. The investment objective of the Value & Income
Series is to provide a high level of current income through investment in a
diversified portfolio of common stocks with relatively high current yields;
capital appreciation is a secondary objective. The Value & Income Series seeks
to achieve its investment objective by investing primarily in a diversified
portfolio of stocks of companies which, in the opinion of the Advisers, are
fundamentally sound financially and which pay relatively high dividends on a
consistent basis. The Advisers attempt to manage the Value & Income Series so
that it will out-perform other equity income funds in negative markets. As a
result of this objective, the Income Series may underperform relative to other
equity income funds in positive markets. The Value & Income Series invests
primarily in common stocks listed on the New York Stock Exchange and on other
national securities exchanges and, to a lesser extent, in stocks that are traded
over-the-counter. The Value & Income Series also invests in bonds and short-term
obligations as well as securities convertible into common stocks, preferred
stocks, debt securities and short-term obligations. The Value & Income Series
allocates its investments among different industries and companies, and changes
its portfolio securities for investment considerations and not for trading
purposes.

The Value & Income Series' policy is to invest in a broad list of equity
and fixed income securities, including short-term obligations. The list may be
diversified not only by companies and industries, but also by type of security.
Some fixed income securities may also have a call on common stock by means of a
conversion privilege or attached warrants. The Value & Income Series may vary
the percentage of

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assets invested in any one type of security in accordance with the Advisers'
interpretation of economic and market conditions, fiscal and monetary policy,
and underlying security values. It is contemplated that most of the Value &
Income Series' non-convertible long-term debt investments will consist of
"investment grade" securities (rated Baa or better by Moody's or BBB or better
by S&P). However, the Value & Income Series may also invest not more than 25% of
its assets in fixed income securities which either are rated in lower than
"investment grade" categories by either Moody's or S&P or are unrated when, in
the opinion of the Advisers, such an investment presents a greater opportunity
to achieve the Value & Income Series' investment objective with comparable risk
to an investment in "investment grade" securities. Securities rated Baa by
Moody's or BBB by S&P may have speculative risk characteristics.

Non-Investment Grade Obligations. Non-investment grade obligations (those
that are rated Ba or lower by Moody's or BB or lower by S&P or comparable
unrated obligations), commonly referred to as "junk bonds", are speculative in
nature. Risks associated with junk bonds are (a) the relative youth and growth
of the market for such securities, (b) the sensitivity of such securities to
interest rate and economic changes, (c) the lower degree of protection of
principal and interest payments, (d) the relatively low trading market liquidity
for the securities, (e) the impact that legislation may have on the high yield
bond market (and, in turn, on the Value & Income Series' net asset value and
investment practices), and (f) the creditworthiness of the issuers of such
securities. During an economic downturn or substantial period of rising interest
rates, highly leveraged issuers may experience financial stress which would
adversely affect their ability to service their principal and interest payment
obligations, to meet projected business goals and to obtain additional
financing. An economic downturn could also disrupt the market for junk bonds and
adversely effect the value of outstanding bonds and the ability of the issuers
to repay principal and interest. If the issuer of a debt obligation held by the
Value & Income Series defaulted, the Value & Income Series could incur
additional expenses to seek recovery. Adverse publicity and investor
perceptions, whether or not based on fundamental analysis, may also decrease the
values and liquidity of junk bonds held by the Value & Income Series, especially
in a thinly traded market. For a description of ratings of debt obligations
which may be purchased by the Value & Income Series, see the Appendix to the
Statement of Additional Information.

EQUITY GROWTH SERIES. The investment objective of the Equity Growth Series
is to provide a high level of capital appreciation through investment in a
diversified portfolio of common stocks with potential for above average growth
in earnings and dividends; current income is a secondary objective. The Equity
Income seeks to achieve its investment objective by investing primarily in a
diversified portfolio of common stocks, but may also invest in other types of
securities such as preferred stocks, convertible and non-convertible bonds,
warrants and foreign securities including American Depository Receipts. Under
normal circumstances, at least 65% of the assets of the Equity Income are
invested in equity securities. This is a fundamental investment policy and may
not be changed without investor approval. The Equity Growth Series invests
primarily in stocks of companies that have a market value of all their issued
and outstanding common stock of $10 to $15 billion and preferred stocks and
common stocks listed on the New York Stock Exchange and on other national
securities exchanges and, to a lesser extent, in stocks that are traded
over-the-counter. The Equity Growth Series also invests in bonds and short-term
obligations as well as securities convertible into common stocks, preferred
stocks, debt securities and short-term obligations. The Equity Growth Series
allocates its investments among different industries and companies, and changes
its portfolio securities for investment considerations and not for trading
purposes.

The Equity Growth Series' policy is to invest in a broad list of equity and
fixed income securities, including short-term obligations. The list may be
diversified not only by companies and industries, but also by type of security.
Some fixed income securities may also have a call on common stock by means of a
conversion privilege or attached warrants. The Equity Growth Series may vary the
percentage of assets invested in any one type of security in accordance with the
Adviser's interpretation of economic and market conditions, fiscal and monetary
policy, and underlying security values. It is contemplated that most of the
Equity Growth Series' non-convertible long-term debt investments will consist of
"investment grade" securities (rated Baa or better by Moody's or BBB or better
by S&P). However, the

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Equity Growth Series may also invest not more than 25% of its assets in fixed
income securities which either are rated in lower than "investment grade"
categories by either Moody's or S&P or are unrated when, in the opinion of the
Adviser, such an investment presents a greater opportunity to achieve the Equity
Growth Series' investment objective with comparable risk to an investment in
"investment grade" securities. Such lower rated or unrated fixed income
securities have speculative risk characteristics. See "Non-Investment Grade
Obligations" above under Equity Income Series.

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INVESTMENT TECHNIQUES AND RESTRICTIONS

INVESTMENT TECHNIQUES FOR THE BALANCED SERIES, VALUE & INCOME SERIES AND EQUITY
GROWTH SERIES (COLLECTIVELY, THE "SERIES").

Foreign Securities. Each Series' current policy is not to invest more than
25% of its assets in securities of foreign issuers, including investments in
sponsored American Depository Receipts ("ADRs"). ADRs are receipts typically
issued by an American bank or trust company evidencing ownership of the
underlying foreign securities. Each Series' investments in unlisted foreign
securities, not including ADRs, are subject to the overall restrictions
applicable to investments in illiquid securities. Foreign securities, including
ADRs, may represent a greater degree of risk than do securities of domestic
issuers due to possible exchange rate fluctuations, possible exchange controls,
less publicly available information, more volatile markets, less securities
regulation, less favorable tax provisions (including possible withholding
taxes), changes in governmental administration or economic or monetary policy
(in the United States or abroad), war or expropriation. Each Series may invest
up to 5% of its assets in closed-end investment companies which primarily hold
foreign securities. Forward foreign currency exchange contracts may also be
entered into for the purchase or sale of foreign currency solely for hedging
purposes against adverse rate changes. A currency exchange contract allows a
definite price in dollars to be fixed for foreign securities that have been
purchased or sold (but not settled) for each Series. Entering into such exchange
contracts may result in the loss of all or a portion of the benefits which
otherwise could have been obtained from favorable movements in exchange rates.
In addition, entering into such contracts means incurring certain transaction
costs and bearing the risk of incurring losses if rates do not move in the
direction anticipated.

Options and Futures Contracts. Each Series may enter into transactions in
futures contracts, options on futures contracts, options on securities indexes
and options on securities, for the purpose of hedging each Series' securities,
which would have the effect of reducing the volatility of its net asset value.
In general, each such transaction involves the establishment of a position which
is expected to move in a direction opposite to that of the security or
securities being hedged.

For example, each Series may sell futures contracts, or purchase put
options on futures contracts, securities indexes or securities for the purpose
of protecting against an anticipated decline in the value of securities held by
that Series. In the event that such decline occurs, and the hedging transaction
is successful, the reduced value of portfolio securities will be offset, in
whole or in part, by a corresponding gain on the futures or option position.
Conversely, when the Series is not fully invested in the securities market, and
it expects a significant market advance, it may purchase futures contracts or
call options on futures contracts, securities indexes or securities in order to
gain rapid market exposure that may in part or entirely offset increases in the
cost of securities that that Series intends to purchase.

The Statement of Additional Information includes further information about
the transactions in futures and option contracts that may be entered into by
each Series.

Gain or loss to each Series on transactions in security index futures or
options will depend on price movements in the stock market generally (or in a
particular industry or segment of the market), rather than price movements of
individual securities. A securities index assigns relative values to the
securities included in the index and the index fluctuates with changes in the
market values of the securities so included. Some securities index futures or
options are based on broad market indexes, such as the Standard & Poor's 500 or
the New York Stock Exchange Composite Index. In contrast, certain exchanges
offer futures or options on narrower market indexes, such as the Standard &
Poor's 100 or indexes based on an industry or market segment, such as oil and
gas stocks. Options on indexes and options on securities are traded on
securities exchanges regulated by the SEC. Futures contracts and options on
futures contracts are traded only on designated contract markets regulated by
the Commodity Futures Trading Commission and through a registered futures
commission merchant which is a member of such contract market. A commission must
be paid on each completed purchase and sale transaction. Transactions on such
exchanges are cleared through a clearing corporation, which guarantees
performance between the clearing members which are parties to each contract.

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Each Series currently does not intend to engage in the writing of options,
except for the purpose of terminating an existing position or under the limited
circumstances described in the Statement of Additional Information.
Nevertheless, each Series has the authority to write options and may do so in
the future if the Advisers determine that such transactions are in the best
interests of the Series.

Short-Term Instruments. Each of the Series may invest in cash, commercial
paper, short-term obligations, repurchase agreements or other forms of debt
securities. See "Short-Term Instruments" above under Intermediate Government
Bond Series.

Repurchase Agreements and Reverse Repurchase Agreements. Each of the
Series may enter into repurchase agreements and reverse repurchase agreements
and may borrow funds for temporary or emergency purposes, such as meeting larger
than expected redemption requests, and not for leverage. See "Repurchase
Agreements and Reverse Repurchase Agreements" above under Intermediate
Government Bond Series.

Restricted Securities. Each of the Series may not invest more than 15% of
its net assets in securities that are subject to legal or contractual
restrictions on resale. See "Restricted Securities" above under Money Market
Bond Series.

Delayed Delivery Transactions. In order to help insure the availability of
suitable securities for each of the Series the Advisers may purchase securities
for each such Series on a "when-issued" or on a "forward delivery" basis. See
"Delayed Delivery Transactions" above under Intermediate Government Bond Series.

Changes to the securities of each Series are generally made without regard
to the length of time a security has been held, or whether a sale would result
in the recognition of a profit or loss. Therefore, the rate of portfolio
turnover is not a limiting factor to trading when such trading is deemed
appropriate. Each Series engages in trading if it believes a transaction net of
costs (including custodian charges) will help it achieve its investment
objectives. The amount of brokerage commissions and realized capital gains will
tend to increase as the level of portfolio activity increases. The primary
consideration in placing portfolio security transactions with broker-dealers for
execution is to obtain, and maintain the availability of, execution at the most
favorable prices and in the most effective manner possible. See "Portfolio
Transactions and Brokerage Commissions" in the Statement of Additional
Information.

INVESTMENT RESTRICTIONS FOR ALL SERIES OF DIVERSIFIED INVESTORS PORTFOLIOS

As "diversified" funds, no more than 5% of the assets of any series of
Diversified Investors Portfolios may be invested in the securities of one issuer
(other than U.S. Government securities), except that up to 25% of each series'
assets may be invested without regard to this limitation. No series of
Diversified Investors Portfolios will invest more than 25% of its assets in the
securities of issuers in any one industry. These are fundamental investment
policies which may not be changed without investor approval. As a nonfundamental
operating policy, no more than 15% (10% in the case of the Money Market Series)
of the net assets of any series may be invested in (i) securities the resale of
which is restricted under federal securities laws and (ii) illiquid or not
readily marketable securities (including repurchase agreements maturing in more
than seven days). Additional fundamental and operating policies of Diversified
Investors Portfolios are contained in the Statement of Additional Information.

LENDING OF PORTFOLIO SECURITIES

The Series have the authority to lend portfolio securities to brokers,
dealers and other financial organizations. By lending its securities, a Series
can increase its income by continuing to receive interest on the loaned
securities as well as by either investing the cash collateral in short-term
securities or obtaining yield in the form of interest paid when U.S. Government
obligations are used as collateral. There may be risks of delay in receiving
additional collateral or risks of delay in recovery of the securities or even
loss of rights in the collateral should the borrower of the securities fail
financially. A Series will adhere to the following conditions whenever its
securities are loaned: (i) the Series must receive at least 100% cash collateral
or equivalent securities from the borrower; (ii) the borrower must increase this
collateral whenever the market value of the loaned securities including accrued
interest exceeds the level of the collateral; (iii) the Series must be able to
terminate the loan at any time; (iv) the Series must receive reasonable interest
on the loan, as well as any dividends, interest or other

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distributions on the loaned securities, and any increase in market value; (v)
the Series may pay only reasonable custodian fees in connection with the loan;
and (vi) voting rights on the loaned securities may pass to the borrower.
However, if a material event adversely affecting the loaned securities were to
occur, the Series would terminate the loan and regain the right to vote the
securities.

MANAGEMENT OF DIVERSIFIED INVESTORS PORTFOLIOS

The Board of Trustees of Diversified Investors Portfolios provides broad
supervision over the affairs of Diversified Investors Portfolios. For further
information about the Trustees of Diversified Investors Portfolios, see
"Diversified Investors Portfolios" in the Statement of Additional Information. A
majority of the Trustees of Diversified Investors Portfolios are not affiliated
with the Advisers.

INVESTMENT ADVISORY SERVICES. Diversified Investment Advisors, Inc.
("Diversified") manages the assets of each series of Diversified Investors
Portfolios pursuant to an Investment Advisory Agreement (the "Advisory
Agreement") with Diversified Investors Portfolios with respect to each series
and in accordance with the investment policies described herein and in the
Statement of Additional Information. Subject to such further policies as the
Board of Trustees of Diversified Investors Portfolios may determine, Diversified
provides general investment advice to each series. For its services under the
Advisory Agreement, Diversified receives from each series fees accrued daily and
paid monthly at an annual rate equal to the percentages specified in the table
below of the corresponding series' average daily net assets. Diversified is
currently waiving a portion of its investment advisory fee. Investment
management decisions are made by a committee of Diversified's personnel and not
by a particular individual.

Diversified is an indirect, wholly-owned subsidiary of AEGON USA, Inc.
("AEGON") which is a financial services holding company whose primary emphasis
is life and health insurance and annuity and investment products. AEGON is an
indirect, wholly-owned subsidiary of AEGON N.V., a Netherlands corporation which
is a publicly traded international insurance group. Diversified was incorporated
in 1992 for the purpose of acting as investment adviser to Diversified Investors
Portfolios. Accordingly, Diversified Investors Portfolios is the first family of
investment companies for which Diversified serves as investment adviser. It is
Diversified's responsibility to select, subject to the review and approval of
the Diversified Investors Portfolios' Board of Trustees, appropriate subadvisers
with distinguished backgrounds and to review such subadvisers' continued
performance.

For each series, Diversified has entered into an Investment Subadvisory
Agreement (each a "Subadvisory Agreement") with the subadvisers listed in the
table below (each a "Subadviser," and collectively the "Subadvisers"). For its
services under each Subadvisory Agreement, the Subadvisers receive a fee from
Diversified at an annual rate equal to the percentages specified in the table
below of the corresponding series' average daily net assets. Each fee will be
accrued monthly by multiplying the arithmetic average of the beginning and
ending monthly net assets in the series by the fee schedule and dividing by 12.
Each fee will be paid on a quarterly basis.

<TABLE>
<CAPTION>
COMPENSATION RATES(%)
DIVERSIFIED INVESTORS PORTFOLIO -------------------------
PORTFOLIO SERIES SUBADVISERS ADVISER(1) SUBADVISERS
--------------------- ---------------------------------- ---------- -----------
<S> <C> <C> <C>
Money Market Series Capital Management Group 0.25 0.05
Intermediate Government Bond Series Capital Management Group 0.35 0.15
Core Bond Series Payden & Rygel (2) 0.15
Balanced Series Aeltus Investment Management, Inc. 0.45 (3)
Payden & Rygel (2)
Value & Income Series Asset Management Group 0.45 (4)
Equity Growth Series Dresdner RCM Global 0.62 (5)
Investors, LLC
Montag & Caldwell, Inc.
</TABLE>

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

(1) The Adviser is currently waiving a portion of its fee. See
"Synopsis -- Table of Fees" at page 6 for a discussion of the fee waivers
currently in effect.

(2) For Aeltus, 0.20% on the first $200,000,000 of average net assets, 0.15% on
the next $300,000,000 of average net assets, 0.125% on the next $500,000,000
of average net assets, and 0.10% on all assets in excess of $1,000,000,000.
For Payden & Rygel, 0.20% on the first $50,000,000 of average net assets,
0.15% on the next $50,000,000 of average net assets, and 0.10% on all assets
in excess of $100,000,000.

(3) 0.35% on the first $50,000,000 of average net assets of the Balanced
Portfolio, 0.30% on the next $50,000,000 in assets and 0.25% on assets in
excess of $100,000,000.

(4) 0.25% on the first $100,000,000 of average net assets of the Equity Income
Portfolio and 0.20% on assets in excess of $100,000,000.

(5) 0.50% on the first $50,000,000 in assets, 0.25% on the next $50,000,000 in
assets; and 0.20% on assets in excess of $100,000,000.

45
<PAGE> 47

Diversified has selected Subadvisers for each series which have been
approved by the Trustees of Diversified Investors Portfolios and the investors
in said series and has entered into an Investment Subadvisory Agreement with
each Subadviser. It is the responsibility of a Subadviser to make the day-
to-day investment decisions of the series and to place the purchase and sales
orders for securities transactions of such series, subject in all cases to the
general supervision of Diversified. Each Subadviser makes the investment
selections for its respective series consistent with the guidelines and
directions set by Diversified and the Board of Trustees of Diversified Investors
Portfolios. Each Subadviser furnishes at its own expense all services,
facilities and personnel necessary in connection with managing the corresponding
series' investments and effecting securities transactions for a series. The
subadvisers are as follows:

MONEY MARKET SERIES
INTERMEDIATE GOVERNMENT
BOND SERIES Capital Management Group, a division of 1740
Advisers, Inc., a wholly-owned subsidiary of MONY
Life Insurance Company. Capital Management Group
has been a registered investment adviser since
1971. The address of Capital Management Group is
1740 Broadway, New York 10019.

The following representatives of Capital Management
Group are primarily responsible for the day-to-day
management of the Portfolios:

Money Market Series: David E. Wheeler, Investment
Vice President and Portfolio Manager, has been
responsible for the day-to-day management of the
Portfolio since 1997. Mr. Wheeler has been employed
by Capital Management Group since 1994 and was
employed at AIG Investment Advisers prior to 1994.

Intermediate Government Bond Series and Core Bond
Series: Gregory Staples, Vice President, has been
responsible for the day-to-day management of the
Intermediate Government Bond Portfolio since 1994.
Mr. Staples has been employed by Capital Management
Group since 1987.

CORE BOND SERIES: Payden & Rygel. Payden was formed in 1984 and is
owned by certain of its employees. Payden (or its
predecessor) has been a registered investment
adviser since 1983. The principal business address
of Payden is 333 South Grand Avenue, 32nd Floor,
Los Angeles, California 90071.

BALANCED SERIES
AELTUS INVESTMENT
MANAGEMENT, INC.
PAYDEN & RYGEL: Aeltus Investment Management, Inc. Aeltus was
formed in 1972 and is an indirect wholly-owned
subsidiary of Aetna Inc. Aeltus has been a
registered investment adviser since 1972. The
principal business address of Aeltus is 10 State
House Square, Hartford, Connecticut 06103-3602.

Geoffrey A. Brod, Portfolio Manager, has been
responsible for the day-to-day supervision of the
Balanced Fund on behalf of Aeltus since 1999 and
has been employed by Aeltus or its parent company
since 1966.

Payden & Rygel. Payden was formed in 1984 and is
owned by certain of its employees. Payden (or its
predecessor) has been a registered investment
adviser since 1983. The principal business

46
<PAGE> 48

address of Payden is 333 South Grand Avenue, 32nd
Floor, Los Angeles, California 90071.

VALUE & INCOME SERIES: Asset Management Group, a division of 1740
Advisers, Inc., which is a wholly-owned subsidiary
of MONY. Asset Management Group has been a
registered investment adviser since 1971. The
address of Asset Management Group is 1740 Broadway,
New York, New York 10019.

Investment management decisions at Asset Management
Group are made by committee and not by managers
individually.

Sanford C. Bernstein & Co. Inc., Sanford Bernstein
was incorporated in 1969 and is owned by Sanford C.
Bernstein Inc. Sanford Bernstein has been a
registered investment adviser since 1975. The
address of Sanford Bernstein is 767 Fifth Avenue,
New York, New York 10153.

EQUITY GROWTH SERIES: Dresdner RCM Global Investors, LLC
Montag & Caldwell, Inc.

Dresdner RCM Global Investors, LLC was established
in 1996, when Dresdner Bank acquired RCM Capital
Management, LLC. Dresdner RCM has been a registered
investment adviser since 1972. The principal
address of Dresdner RCM is Four Embarcadero Center,
Suite 2900, San Francisco, California 94111.

Investment management decisions of Dresdner RCM are
made by committee and not by managers individually.

Montag & Caldwell Incorporated was established in
1945 and is owned by Alleghany Corporation. Montag
& Caldwell has been a registered investment adviser
since 1968. The principal address of Montag &
Caldwell is 3343 Peachtree Road, N.E., Suite 1100,
Atlanta, Georgia 30326-1022.

Investment management decisions of Montag &
Caldwell are made by committee and not by managers
individually.

ADMINISTRATOR. Pursuant to an Administrative Services Agreement (and the
Advisory Agreement), Diversified, as Administrator, provides Diversified
Investors Portfolios with general office facilities and supervises the overall
administration of Diversified Investors Portfolios, including, among other
responsibilities, the negotiation of contracts and fees with, and the monitoring
of performance and billings of, the independent contractors and agents of
Diversified Investors Portfolios; the preparation and filing of all documents
required for compliance by Diversified Investors Portfolios with applicable laws
and regulations; providing equipment and clerical personnel necessary for
maintaining the organization of Diversified Investors Portfolios; preparation of
certain documents in connection with meetings of Trustees and investors of
Diversified Investors Portfolios; and the maintenance of books and records of
Diversified Investors Portfolios. Diversified provides persons satisfactory to
the Board of Trustees of Diversified Investors Portfolios to serve as officers
of Diversified Investors Portfolios. Such officers, as well as certain other
employees and Trustees of Diversified Investors Portfolios, may be directors,
officers or employees of Diversified or its affiliates. The Administrator
receives no additional fee for its administrative services to Diversified
Investors Portfolios.

47
<PAGE> 49

EXPENSES. The expenses of Diversified Investors Portfolios include the
compensation of its Trustees who are not affiliated with the Adviser or
Diversified; governmental fees; interest charges; taxes; fees and expenses of
independent auditors, of legal counsel and of any transfer agent, depository,
registrar or dividend disbursing agent of Diversified Investors Portfolios;
insurance premiums; and expenses of calculating the net asset value of, and the
net income on, beneficial interests in the series of Diversified Investors
Portfolios. Expenses of Diversified Investors Portfolios also include the
expenses connected with the execution, recording and settlement of securities
transactions; fees and expenses of Diversified Investors Portfolios' custodian
for all services to the series of Diversified Investors Portfolios, including
safekeeping of funds and securities and maintaining required books and accounts;
expenses of preparing and mailing reports to investors and to governmental
officers and commissions; expenses of meetings of investors and Trustees of
Diversified Investors Portfolios; and the advisory fees payable to Diversified
under the Advisory Agreement.

CUSTODIAN, TRANSFER AGENT, AND DIVIDEND DISBURSING AGENT. Investors Bank &
Trust Company is the custodian of the securities held by Diversified Investors
Portfolios and is authorized to use the facilities of the Depository Trust
Company and the facilities of the book-entry system for the Federal Reserve
Bank. Investors Bank & Trust Company is the transfer agent and
dividend-disbursing agent for Diversified Investors Portfolios.

EXCLUSIVE PLACEMENT AGENT. Diversified Investors Portfolios has retained
the services of Diversified Investors Securities Corp., ("DISC") as Exclusive
Placement Agent. The principal business address of DISC is 4 Manhattanville
Road, Purchase, New York 10577. DISC receives no compensation as Exclusive
Placement Agent.

OTHER INFORMATION REGARDING
DIVERSIFIED INVESTORS PORTFOLIOS

PURCHASE AND REDEMPTION OF INTERESTS IN DIVERSIFIED INVESTORS
PORTFOLIOS. Beneficial interests in the series of Diversified Investors
Portfolios described in this Prospectus are currently being offered by DISC to
MONY for allocation to Subaccounts to fund benefits payable under the Contracts.
Investments in Diversified Investors Portfolios may only be made by investment
companies, insurance company separate accounts, common or commingled trust funds
or similar organizations or entities that are "accredited investors" within the
meaning of Regulation D under the 1933 Act. This Prospectus does not constitute
an offer to sell, or the solicitation of an offer to buy, any beneficial
interests in the series of Diversified Investors Portfolios.

The net asset value of each series of Diversified Investors Portfolios is
determined each day during which the Advisers of that series are open for
business ("Portfolio Business Day"). This determination is made once each day as
of the close of regular trading on the New York Stock Exchange, currently 4:00
p.m., New York time (the "Valuation Time").

Each investor in a series of Diversified Investors Portfolios may add to or
reduce its investment in such series on each Portfolio Business Day. As of the
Valuation Time on each such day, the value of each investor's beneficial
interest in a series will be determined by multiplying the net asset value of
the series by the percentage, effective for that day, which represents that
investor's share of the aggregate beneficial interests in the series. Any
additions or reductions, which are to be effected as of the Valuation Time on
such day, will then be effected. The investor's percentage of the aggregate
beneficial interests in a series will then be recomputed as the percentage equal
to the fraction (i) the numerator of which is the value of such investor's
investment in the series as of the Valuation Time on such day plus or minus, as
the case may be, the amount of net additions to or reductions in the investor's
investment in the series effected as of the Valuation Time, and (ii) the
denominator of which is the aggregate net asset value of the series as of the
Valuation Time on such day, plus or minus, as the case may be, the amount of net
additions to or reductions in the aggregate net asset value of the series as of
the Valuation Time on such day, plus or minus as the case may be, the amount of
net additions to or

48
<PAGE> 50

reductions in the aggregate investments in the series by all investors in such
series. The percentage so determined will then be applied to determine the value
of the investor's interest in the series as of the Valuation time on the
following Portfolio Business Day.

An investor in a series of Diversified Investors Portfolios may withdraw
all or any portion of its investment at the net asset value next determined if a
withdrawal request in proper form is furnished by the investor to Diversified
Investors Portfolios by the designated cut-off time for each accredited
investor. The proceeds of a reduction or a withdrawal will be paid by
Diversified Investors Portfolios in federal funds normally on the Portfolio
Business Day the withdrawal is effected, but in any event within seven days.
Diversified Investors Portfolios, on behalf of each of its series, reserves the
right to pay redemptions in kind. Unless requested by an investor, Diversified
Investors Portfolios will not make a redemption in kind to the investor, except
in situations where that investor may make redemptions in kind. Diversified
Investors Portfolios, on behalf of each of its series, has elected, however, to
be governed by Rule 18f-1 under the 1940 Act, as a result of which Diversified
Investors Portfolios is obligated to redeem beneficial interests in each series
with respect to any one investor during any 90 day period, solely in cash up to
the lesser of $250,000 or 1% of the net asset value of the series at the
beginning of the period. Investments in a series may not be transferred.

The right to redeem beneficial interests or to receive payment with respect
to any redemption may be suspended only (i) for any period during which trading
on the New York Stock Exchange is restricted as determined by the Securities and
Exchange Commission or when the New York Stock Exchange is closed (other than
customary weekend and holiday closings), (ii) for any period during which an
emergency exists as defined by the Securities and Exchange Commission as a
result of which disposal of a series' securities or determination of the net
asset value of each series is not reasonably practicable, and (iii) for such
other periods as the Securities and Exchange Commission may by order permit for
the protection of investors in any series of Diversified Investors Portfolios.

NET ASSET VALUE. Diversified Investors Portfolios values the securities of
the Money Market Series based on the amortized cost method of valuation.
Securities of other series of Diversified Investors Portfolios are valued based
on their current market value when market quotations are available. Where market
quotations are not available, assets are valued at fair value as determined in
good faith under the direction of Diversified Investors Portfolios' Board of
Trustees. Debt obligations with 60 days or less remaining to maturity may be
valued by the amortized cost method, which the Diversified Investor Portfolios'
Trustees have determined to constitute fair value for such securities. For more
information on the valuation of portfolio securities, see "Diversified Investors
Portfolios" in the Statement of Additional Information.

TAXATION OF DIVERSIFIED INVESTORS PORTFOLIOS. Diversified Investors
Portfolios is organized as a New York trust. None of its series is subject to
any income or franchise tax in the State of New York. However, each investor in
a series will be taxable on its share (as determined in accordance with the
governing instruments of Diversified Investors Portfolio) of the series'
ordinary income and capital gain in determining its income tax liability. The
determination of such share will be made in accordance with the Code, and
regulations promulgated thereunder.

Diversified Investors Portfolios, since it is taxed as a partnership, is
not subject to federal income taxation. Instead, any investor in Diversified
Investors Portfolios must take into account, in computing its federal income tax
liability, its share of Diversified Investors Portfolios' income, gains, losses,
deductions, credits and tax preference items, without regard to whether it has
received any cash distributions from Diversified Investors Portfolios.

Withdrawals by any investor in Diversified Investors Portfolios from its
corresponding series generally will not result in recognizing any gain or loss
for federal income tax purposes, except that (1) gain will be recognized to the
extent that any cash distributed exceeds the basis of such investor's interest
in the series prior to the distribution, (2) income or gain will be realized if
the withdrawal is in liquidation of such investor's entire interest in the
series and includes a disproportionate share of any unrealized receivables held
by the series and (3) loss will be recognized if the distribution is in

49
<PAGE> 51

liquidation of that entire interest and consists solely of cash and/or
unrealized receivables. The basis of any investor's interest in Diversified
Investors Portfolios generally equals the amount of cash and the basis of any
property that such investor invests in a series, increased by such investor's
share of income from that series and decreased by the amount of any cash
distributions and the basis of any property distributed from that series.

DESCRIPTION OF BENEFICIAL INTERESTS, VOTING RIGHTS AND
LIABILITIES. Diversified Investors Portfolios is organized as a series trust
under the laws of the State of New York. Under the Declaration of Trust, the
Trustees are authorized to issue beneficial interests in one or more series
(each a "Series"). Investment in each series may not be transferred, but an
investor may withdraw all or any portion of its investment at any time at net
asset value. Investors in a series (e.g., investment companies, insurance
company separate accounts and common and commingled trust funds) will each be
liable for all obligations of that series (and of no other series). However, the
risk of an investor in a series incurring financial loss on account of such
liability is limited to circumstances in which both inadequate insurance existed
and the series itself was unable to meet its obligations. Investments in each
series have no preemptive or conversion rights and are fully paid and
nonassessable, except as set forth below.

Each investor is entitled to a vote in proportion to the amount of its
investment in each series. Investors in a series will vote as a separate class,
except as to voting for election of Trustees of Diversified Investors
Portfolios, as otherwise required by the 1940 Act, or if determined by the
Trustees of Diversified Investors Portfolios to be a matter which affects all
series. As to any matter which does not affect a particular series, only
investors in the one or more affected series are entitled to vote. Diversified
Investors Portfolios is not required and has no current intention of holding
special meetings of investors, but special meetings of investors will be held
when in the judgment of the Trustees of Diversified Investors Portfolios, it is
necessary or desirable to submit matters for an investor vote. Changes in
fundamental policies will be submitted to investors for approval. Investors
under certain circumstances (e.g., upon application and submission of certain
specified documents to the Trustees of Diversified Investors Portfolios by a
specified number of investors) have the right to communicate with other
investors in connection with requesting a meeting of investors for the purpose
of removing one or more Trustees of Diversified Investors Portfolios. Investors
also have the right to remove one or more Trustees of Diversified Investors
Portfolios without a meeting by a declaration in writing by a specified number
of investors. Upon liquidation of a series, investors would be entitled to share
pro rata in the net assets of that series (and no other series) available for
distribution to investors. See "Voting Rights" at page 23.

Each series determines its net income and realized capital gains, if any,
on each Portfolio Business Day and allocates all such income and gain pro rata
among the investors in such series at the time of such determination.

The "net income" of each series shall consist of (i) all income accrued,
less the amortization of any premium, on the assets of the series, less (ii) all
actual and accrued expenses of the series determined in accordance with
generally accepted accounting principles. Interest income includes discount
earned (including both original issue and market discount) on discount paper
accrued ratably to the date of maturity and any net realized gains or losses on
the assets of a series. All the net income of each series is allocated pro rata
among the investors in the series (and no other series).

Inquiries regarding the Diversified Investors Portfolios may be directed to
4 Manhattanville Road, Purchase, New York 10577 (914-697-8000).

50
<PAGE> 52

EXPERTS

The balance sheets of MONY as of December 31, 1999 and 1998 and the related
statements of operations and cash flows for the years then ended, as well as the
statements of assets and liabilities for Keynote Series Account as of December
31, 1999, and the related statements of operations for the year then ended and
the statements of changes in net assets for the years ended December 31, 1998
and 1998 have been audited by PricewaterhouseCoopers LLP, independent
accountants, whose reports thereon are set forth in the Statement of Additional
Information. These financial statements have been included in reliance on the
report of the said firm, given on the authority of that firm as experts in
auditing and accounting.

LEGAL PROCEEDINGS

MONY is engaged in various kinds of routine litigation which, in the
opinion of management, are not of material importance in relation to the total
capital, results of operations, surplus or cash flows of MONY. There are no
legal proceedings to which Keynote is a party.

FINANCIAL STATEMENTS

The financial statements for MONY, included in the Statement of Additional
Information, should be distinguished from the financial statements of Keynote,
included in the Statement of Additional Information, and should be considered
only as bearing on the ability of MONY to meet its obligations under the
Contracts. The financial statements of MONY should not be considered as bearing
on the investment performance of the assets held in Keynote.

ADDITIONAL INFORMATION

This Prospectus does not contain all the information set forth in the
registration statement, certain portions of which have been omitted (including
financial statements relating to MONY) pursuant to the rules and regulations of
the SEC. The omitted information may be obtained from the SEC's principal office
in Washington, D.C., upon payment of the fees prescribed by the Commission.

For further information with respect to MONY, the Contracts offered by this
Prospectus and Diversified Investors Portfolios, including the Statement of
Additional Information (which includes financial statements relating to MONY),
contact MONY at its address or phone number set forth on the cover of this
Prospectus for requesting such statement.

For further information with respect to the Calvert Series, Calvert
Variable Series, Inc. or Calvert Asset Management Company, Inc., including a
Statement of Additional Information, contact Calvert, Inc. at 4550 Montgomery
Avenue, Suite 1000N, Bethesda, Maryland 20814, or call (301) 951-4820.

MISCELLANEOUS

The Accounts are separate registered accounts of AUSA. There is a
possibility that one Account might become liable for a misstatement in this
Prospectus about the other Account. AUSA believes this possibility is remote.

51
<PAGE> 53

TABLE OF CONTENTS
OF
STATEMENT OF ADDITIONAL INFORMATION

<TABLE>
<CAPTION>
ITEM PAGE
---- ----
<S> <C>
Independent Accountants..................................... 2
Sale of Contracts/Principal Underwriter..................... 2
Performance Data............................................ 2
Diversified Investors Portfolios............................ 5
Investment Objectives, Policies and Restrictions,........... 5
Determination of Net Asset Value; Valuation of Securities... 23
Management of Diversified Investors Portfolios.............. 23
Independent Accountants..................................... 26
Capital Stock and Other Securities.......................... 26
Taxation.................................................... 28
Financial Statements of MONY................................ 29
Appendix.................................................... A-1
</TABLE>

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<PAGE> 54

REQUEST FOR KEYNOTE

STATEMENT OF ADDITIONAL INFORMATION

Detach and return in an envelope addressed:

MONY
c/o Diversified Investment Advisors, Inc.
4 Manhattanville Road
Purchase, New York 10577
Attn: Not-For-Profit Service

Please make sure that your name and the address to which you wish MONY to
send the current Keynote Statement of Additional Information appears below:

Name
----------------------------------------------------------------------------
Address
-------------------------------------------------------------------------

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

Employer
------------------------------------------------------------------------

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<PAGE> 55

APPENDIX

APPLICABLE PREMIUM TAX RATES

<TABLE>
<CAPTION>
PREMIUM TAX RATE PERCENT
--------------------------
QUALIFIED NON QUALIFIED
--------- -------------
<S> <C> <C>
California.................................................. .50% 2.35%
District of Columbia........................................ -- --
Kentucky.................................................... 2.00% 2.00%
Maine....................................................... -- 2.00%
Nevada...................................................... -- 3.50%
Puerto Rico................................................. 1.00% 1.00%
South Dakota................................................ -- 1.25%
West Virginia............................................... 1.00% 1.00%
Wyoming..................................................... -- 1.00%
</TABLE>

54
<PAGE> 56

Information about contracts can also be reviewed and copied at the SEC's Public
Reference Room in Washington, DC. You can get information on the operation of
the Public Reference Room by calling the SEC at 1-800-SEC-0330. You can receive
copies of this information by sending your request and a duplicating fee to the
SEC's Public Reference Section, Washington, DC 20549-6009.

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<PAGE> 57

BULK RATE
U.S. POSTAGE
PAID
NEW YORK, N.Y.
PERMIT NO. 8048

FORM NO. 13443SL 5/00