PACIFIC SELECT EXEC SEPARATE ACCT PACIFIC LIFE INS, 485BPOS, 2000-05-01

PACIFIC SELECT EXEC SEPARATE ACCT PACIFIC LIFE INS
485BPOS, 2000-05-01

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As filed with the Securities and Exchange Commission on May 1, 2000
Registration No. 333-61135

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 4 TO
FORM S-6

FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2

PACIFIC SELECT EXEC SEPARATE ACCOUNT OF
PACIFIC LIFE INSURANCE COMPANY
(Exact Name of Registrant)

PACIFIC LIFE INSURANCE COMPANY
(Name of Depositor)

700 Newport Center Drive
P.O. Box 9000
Newport Beach, California 92660
(Address of Depositor's Principal Executive Office)

(949) 219-3743
(Depositor's Telephone Number, including Area Code)

Diane N. Ledger
Vice President
Pacific Life Insurance Company
700 Newport Center Drive
P.O. Box 9000
Newport Beach, California 92660
(Name and Address of Agent for Service of Process)

Copies to:

Jeffrey S. Puretz, Esq.
Dechert Price & Rhoads
1775 Eye Street, N.W.
Washington, D.C. 20006-2401

It is proposed that this filing will become effective on May 1, 2000 pursuant
to paragraph (b) of Rule 485.

Title of securities being registered: interests in the Separate Account under
M's Versatile Product Flexible Premium Variable Life Insurance Policies.

Filing fee: None
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Pacific Select Exec Separate Account of Pacific Life Insurance Company

CROSS-REFERENCE SHEET

Pursuant to Rule 404(c) of Regulation C under the Securities Act of 1933

(Form N-8B-2 Items required by Instruction as to the Prospectus in Form S-6)

Form N-8B-2 Form S-6
Item Number Heading in Prospectus

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1. (a) Name of trust................................. Prospectus front cover

(b) Title of securities issued.................... Prospectus front cover

2. Name and address of each depositor................. Prospectus front cover; Back cover

3. Name and address of trustee........................ N/A

4. Name and address of each principal underwriter..... About Pacific Life

5. State of organization of trust..................... Pacific Select Exec Separate
Account

6. Execution and termination of trust agreement....... Pacific Select Exec Separate
Account

7. Changes of name.................................... N/A

8. Fiscal year........................................ N/A

9. Material Litigation................................ N/A

II. General Description of the Trust and Securities of the Trust

10. (a) Registered or bearer securities............... M's Versatile Product basics; The death benefit

(b) Cumulative or distributive securities......... M's Versatile Product basics; The death benefit

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(d) Conversion, transfer, etc. ....................................... Withdrawals, surrenders and loans

(e) Periodic payment plan............................................. N/A

(f) Voting rights..................................................... Voting Rights

(g) Notice to security holders........................................ Reports we'll send you

(h) Consents required................................................. Voting Rights

(i) Other provisions.................................................. N/A

11. Type of securities comprising units................................... M's Versatile Product basics

12. Certain information regarding periodic payment plan certificates...... N/A

13. (a) Load, fees, expenses, etc. ....................................... Deductions from your premiums; Surrendering your policy

(b) Certain information regarding periodic payment plan certificates.. N/A

(d) Difference in price............................................... N/A

(e) Certain other fees, etc. ......................................... Deductions from your premiums; Surrendering your policy

(f) Certain other profits or benefits................................. The death benefit; Your policy's accumulated value

(g) Ratio of annual charges to income................................. N/A

14. Issuance of trust's securities........................................ M's Versatile Product basics
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15. Receipt and handling of payments from purchasers.......... How premiums work

16. Acquisition and disposition of underlying securities...... Your policy's accumulated value; Your investment options

17. Withdrawal or redemption.................................. Withdrawals, surrenders and loans

18. (a) Receipt, custody and disposition of income............ Your policy's accumulated value

(b) Reinvestment of distributions......................... N/A

(d) Schedule of distributions............................. N/A

19. Records, accounts and reports............................. Statements and Reports

20. Certain miscellaneous provisions of trust agreement:

(a) Amendment............................................. N/A

(b) Termination........................................... N/A

(e) and (f) Depositors, removal and successor............. N/A

21. Loans to security holders................................. Withdrawals, surrenders and loans

22. Limitations on liability.................................. N/A

23. Bonding arrangements...................................... N/A

24. Other material provisions of trust agreement.............. N/A

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III. Organizations, Personnel and Affiliated Persons of Depositor

25. Organization of depositor....................................................... About Pacific Life

26. Fees received by depositor...................................................... See Items 13(a) and 13(e)

27. Business of depositor........................................................... About Pacific Life

28. Certain information as to officials and affiliated persons of depositor......... About Pacific Life

29. Voting securities of depositor.................................................. N/A

30. Persons controlling depositor................................................... N/A

31. Payments by depositor for certain services rendered to trust.................... N/A

32. Payments by depositor for certain other services rendered to trust.............. N/A

33. Remuneration of employees of depositor for certain services rendered to trust... N/A

34. Remuneration of other persons for certain services rendered to trust............ N/A

IV. Distribution and Redemption of Securities

35. Distribution of trust's securities by states.................................... N/A

36. Suspension of sales of trust's securities....................................... N/A

37. Revocation of authority to distribute........................................... N/A
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38. (a) Method of distribution............ How policies are distributed

(b) Underwriting agreements........... How policies are distributed

39. (a) Organization of principal
underwriters...................... How policies are distributed

(b) N.A.S.D. membership of principal
underwriters...................... How policies are distributed

40. Certain fees received by principal
underwriters.......................... How policies are distributed

41. (a) Business of each principal
underwriter........................... How policies are distributed

(b) Branch offices of each principal
underwriter....................... N/A

42. Ownership of trust's securities by
certain persons....................... N/A

43. Certain brokerage commissions received
by principal underwriters............. N/A

44. (a) Method of valuation............... Your policy's accumulated value

(b) Schedule as to offering price..... How premiums work

45. Suspension of redemption rights....... Timing of payments, forms and requests
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46. (a) Redemption valuation.............. Withdrawals, surrenders and loans

(b) Schedule as to redemption price... Withdrawals, surrenders and loans

47. Maintenance of position in
underlying securities................. Your investment options

V. Information Concerning the Trustee
or Custodian

48. Organization and regulation N/A
of trustee............................

49. Fees and expenses of trustees......... N/A

50. Trustee's lien........................ N/A

VI. Information Concerning Insurance of
Holders of Securities

51. Insurance of holders of trust's
securities............................ The death benefit

VII. Policy of Registrant

52. (a) Provisions of trust agreement
with respect to selection or
elimination of underlying
securities........................ How our accounts work

(b) Transactions involving elimination
of underlying securities.......... How our accounts work

(c) Policy regarding substitution or
elimination of underlying
securities........................ See Items 13(a) and 52(a)

(d) Fundamental policy not otherwise
covered........................... N/A

53. Tax status of trust................... Variable life insurance and your
taxes

VIII. Financial and Statistical Information
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54. Trust's securities during last ten years... N/A

55. N/A

56. Certain information regarding periodic
payment plan certificates.................. N/A

57. N/A

58. N/A

59. Financial statements (Instruction 1(c)
of "Instructions as to the Prospectus" of
Form S-6).................................. Financial statements
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M'S VERSATILE PRODUCT PROSPECTUS MAY 1, 2000

M's Versatile Product is a flexible premium variable
life insurance policy issued by Pacific Life Insurance
Company.

This prospectus provides information that you should
know before buying a policy. It's accompanied by a
current prospectus for the Pacific Select Fund and the
M Fund, the funds that provide the underlying
portfolios for the variable investment options offered
under the policy. Please read these prospectuses
carefully and keep them for future reference.

Here's a list of all of the investment options
available under your policy:

This policy is not VARIABLE INVESTMENT OPTIONS
available in all
states. This Pacific Select Fund
prospectus is not
an offer in any Aggressive Equity Mid-Cap Value
state or
jurisdiction where Emerging Markets Equity Index
we're not legally
permitted to offer Diversified Research Small-Cap Index
the policy.
Small-Cap Equity REIT
(formerly called
"Growth") International Value
(formerly called
"International")
The policy is International
described in detail Large-Cap Government Securities
in this prospectus.
The Pacific Select
Fund and the M Fund Bond and Income
are described in Managed Bond
their prospectuses Equity
and in their Money Market
Statements of I-Net Tollkeeper(SM)
Additional High Yield Bond
Information (SAI).
No one has the Multi-Strategy Large-Cap Value
right to describe
the policy, Pacific Equity Income
Select Fund or the
M Fund any Growth LT
differently than
they have been M Fund
described in these
documents. Variable Account I: Brandes International Equity

You should be aware Variable Account II: Turner Core Growth
that the Securities
and Exchange Variable Account III: Frontier Capital Appreciation
Commission (SEC)
has not reviewed
the policy for its Variable Account IV: Clifton Enhanced U.S. Equity
investment merit, (formerly called "Enhanced U.S. Equity")
and does not
guarantee that the FIXED OPTIONS
information in this
prospectus is Fixed Account
accurate or
complete. It's a Fixed LT Account
criminal offense to
say otherwise.

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YOUR GUIDE TO THIS PROSPECTUS

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An overview of M's Versatile Product 4
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M's Versatile Product basics 13
Owners, person insured by the policy, and beneficiaries 14
Policy date, monthly payment date, and policy anniversary date 15
Statements and reports we'll send you 16
Your right to cancel 16
Timing of payments, forms and requests 17
Telephone transactions 18
- ------------------------------------------------------------------------------
The death benefit 19
Choosing your death benefit option 19
Choosing a death benefit qualification test 20
Comparing the death benefit options 21
When we pay the death benefit 23
Changing your death benefit option 23
Changing the face amount 24
Optional riders 25
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How premiums work 27
Planned periodic premium payments 27
Deductions from your premiums 28
Allocating your premiums 28
Limits on the premium payments you can make 29
- ------------------------------------------------------------------------------
Your policy's accumulated value 30
Calculating your policy's accumulated value 30
Monthly deductions 30
Lapsing and reinstatement 33
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Your investment options 35
Variable investment options 35
Fixed options 39
Transferring among investment options 39
Transfer programs 40
- ------------------------------------------------------------------------------
Withdrawals, surrenders and loans 42
Making withdrawals 42
Taking out a loan 43
Ways to use your policy's loan and withdrawal features 44
Surrendering your policy 45
- ------------------------------------------------------------------------------
General information about your policy 47
- ------------------------------------------------------------------------------
Variable life insurance and your taxes 50
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About Pacific Life 54
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Appendices 109
Appendix A: Mortality and expense risk face amount charge: rates
per $1,000 of initial face amount 109
Appendix B: Surrender charge: current rates per $1,000 of initial
face amount 110
Appendix C: Death benefit percentages 111
- ------------------------------------------------------------------------------
Where to go for more information back cover
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2
<PAGE>

Terms used in this prospectus
We've tried to make this prospectus easy to read and
understand, but you may find some words and terms that
are new to you. We've identified some of these below
and the pages where you'll find an explanation of what
they mean.

If you have any questions, please ask your registered
representative or call us at 1-800-800-7681.
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Accumulated value 30 Joint owners 14
Accumulation units 37 Lapse 33
Age 14 Loan account 43
In this prospectus, Allocation 28 Modified endowment con-
you and your mean Assignment 49 tract 52
the policyholder or Beneficiary 15 Monthly payment date 15
owner. Pacific Business day 17 Net amount at risk 31
Life, we, us and Cash surrender value 45 Net cash surrender value 45
our refer to Cash value accumulation Net premium 27
Pacific Life test 20 Net single premium 20
Insurance Company. Contingent beneficiary 15 Outstanding loan amount 43
M Fund refers to M Cost of insurance rate 30 Planned periodic premium 27
Fund, Inc. Policy Death benefit 19 Policy anniversary 15
means an M's Death benefit percentage 20 Policy date 15
Versatile Product Death benefit qualifica- Policy year 15
variable life tion test 20 Portfolio 35
insurance policy, Face amount 19 Proper form 17
unless we state Fixed account 39 Reinstatement 34
otherwise. Fixed LT account 39 Riders 25
Fixed options 39 Separate account 55
General account 55 Seven-pay limit 52
Guideline minimum death Tax code 50
benefit 20 Unit value 37
Guideline premium limit 29 Variable account 35
Guideline premium test 20 Variable investment op-
Illustration 16 tion 35
In force 13
Income benefit 47
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3
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AN OVERVIEW OF M'S VERSATILE PRODUCT

This overview tells you some key things you should know
about your policy. It's designed as a summary only--
please read the entire prospectus and your policy for
more detailed information.

Some states have different rules about how life
insurance policies are described or administered. The
terms of your policy, or of any endorsement or rider,
prevail over what's in this prospectus.

---------------------------------------------------------
M's Versatile
Product basics
M's Versatile Product is a flexible premium variable
life insurance policy.

This policy may be . Flexible premium means you can vary the amount and
appropriate if you frequency of your premium payments.
want to provide a
death benefit for . Variable means the policy's value depends on the
family members or performance of the investment options you choose.
others or to help
meet other long- . Life insurance means the policy provides a death
term financial benefit to the beneficiary you choose.
objectives. It may
not be the right In addition to providing a death benefit that is
kind of policy if generally free of federal income tax, any growth in
you plan to your policy's accumulated value is tax-deferred. You
withdraw money for can choose from 25 variable investment options, 21 of
short-term needs. which invest in a corresponding portfolio of the
Pacific Select Fund and four of which invest in a
corresponding portfolio of M Fund. You can also choose
from two fixed options, both of which provide a
Please discuss your guaranteed minimum rate of interest.
insurance needs and
financial You may choose to allocate net premium and accumulated
objectives with value to no more than 20 investment options at any one
your registered time.
representative.
M's Versatile Product is designed for long-term
You'll find more financial planning. Please take some time to read the
about the basics of information in this prospectus before you decide if
M's Versatile this life insurance policy meets your insurance needs
Product starting on and financial objectives.
page 13.
Your right to cancel
During the free look period, you have the right to
cancel your policy and return it to us or your
registered representative for a refund. The amount of
your refund may be more or less than the premium
payments you've made, depending on the state where you
signed your application. If you signed your application
in a state that requires us to refund premium payments,
we'll hold the net premiums in the Money Market
investment option until the free look transfer date.

4
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The death benefit
You can choose one of three death benefit options
Your policy depending on what is more important to you: a larger
provides a death death benefit or building the accumulated value of your
benefit for your policy.
beneficiary after
the person insured The death benefit will always be the greater of the
by the policy has death benefit under the option you choose or the
died, as long as guideline minimum death benefit.
your policy is in
force. This policy offers two ways to calculate the guideline
minimum death benefit: the cash value accumulation test
You'll find more and the guideline premium test. These are called death
about the death benefit qualification tests. The test you choose will
benefit starting on generally depend on the amount of premiums you want to
page 19. pay. In general, you should choose the cash value
accumulation test if you do not want to limit the
amount of premiums you can pay into your policy.

You cannot change your death benefit qualification
test. But you can change your death benefit option and
increase or decrease your policy's face amount (with
certain restrictions) while your policy is in force.
Any of these changes may affect your policy charges.

Optional riders
There are nine optional riders that provide extra
benefits, some at additional cost. Not all riders are
available in every state, and some riders may only be
added when you apply for your policy.

---------------------------------------------------------
How premiums work
Deductions from your premiums
Your policy gives We deduct a premium load from each premium payment you
you the flexibility make. The premium load is made up of a sales load, a
to choose the state and local tax charge, and a federal tax charge.
amount and
frequency of your Limits on the premium payments you can make
premium payments Federal tax law puts limits on the premium payments you
within certain can make in relation to your policy's death benefit. We
limits. Each may refuse all or part of a premium payment you make,
premium payment or remove all or part of a premium from your policy and
must be at least return it to you under certain circumstances.
$50.

You'll find more
about how premiums
work starting on
page 27.

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Your policy's
accumulated value
Accumulated value is the value of your policy on any
Accumulated value business day. It is not guaranteed - it depends on the
is used as the performance of the investment options you've chosen,
basis for the premium payments you've made, policy charges, and
determining policy how much you've borrowed or withdrawn from the policy.
benefits and
charges. If there Monthly deductions
is not enough We deduct a monthly charge from your policy's
accumulated value accumulated value on each monthly payment date. The
to cover policy charge is made up of cost of insurance, an
charges, your administrative charge, and a mortality and expense risk
policy could lapse. charge. If you add any riders, we'll add any charges
for them to your monthly charge.
You'll find more
about accumulated Lapsing and reinstatement
value starting on If there is not enough accumulated value to cover the
page 30. monthly charge on the day we make the deduction, your
policy may lapse - which means you'll no longer have
any insurance coverage. If your policy is in danger of
lapsing, we'll give you a grace period of 61 days to
pay the required premium. If your policy lapses at the
end of the grace period, you have five years from the
day it lapses to apply for a reinstatement.

5
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AN OVERVIEW OF M'S VERSATILE PRODUCT

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Your investment
options
You can choose from 25 variable investment options, 21
The investment of which invest in a corresponding portfolio of the
options you choose Pacific Select Fund and four of which invest in a
will affect your corresponding portfolio of the M Fund.
policy's
accumulated value, We're the investment adviser for the Pacific Select
and may affect the Fund. We oversee the management of all the fund's
death benefit. portfolios and manage two of the portfolios directly.
We've retained other portfolio managers to manage the
other portfolios.
Your policy's
accumulated value M Financial Investment Advisers, Inc. (MFIA) is the
may be allocated to investment adviser for the M Fund, and has retained
up to 20 investment other firms to manage the M Fund's portfolios. MFIA and
options at any one the M Fund's Board of Directors oversee the management
time. of all of the M Fund's portfolios.

Please review the
investment options The value of each portfolio will fluctuate with the
carefully and ask value of the investments it holds, and returns are not
your registered guaranteed.
representative to
help you choose the You can also choose from two fixed options, the Fixed
right ones for your account and the Fixed LT account, both of which provide
goals and risk a guaranteed minimum annual interest rate of 3%. We may
tolerance. offer a higher interest rate. If we do, we'll guarantee
that rate for one year.

You'll find more We allocate your premium payments and accumulated value
about the to the investment options you choose. Your policy's
investment options accumulated value will fluctuate depending on the
starting on page investment options you've chosen. You bear the
35. investment risk of any variable investment options you
choose.

In some states we'll hold your premium payments in the
Money Market investment option until the free look
transfer date. Please turn to Your right to cancel for
details.

You'll find out Transferring among investment options
more about our You can transfer among the investment options during
automatic transfer the life of your policy without paying any current
programs starting income tax. There is currently no charge for transfers.
on page 40.
You can make as many transfers as you like between
variable investment options. You can also make
automatic transfers from one variable investment option
to another using our dollar cost averaging or portfolio
rebalancing programs. These programs are not available
for the fixed options.

You can only make one transfer from each fixed option
in any 12-month period. For the Fixed account, each
transfer may be no more than $5,000 or 25% of the
accumulated value in the Fixed account, whichever is
greater. For the Fixed LT account, each transfer may be
no more than $5,000 or 10% of the accumulated value in
the Fixed LT account, whichever is greater. You can
only transfer to the fixed options in the policy month
right before each policy anniversary.

You can also make automatic transfers from the Fixed
account to other investment options during the first
policy year using our first year transfer program.

---------------------------------------------------------
Withdrawals,
surrenders and
loans
You can take out all or part of your policy's
Making a accumulated value while your policy is in force by
withdrawal, taking making withdrawals or surrendering your policy. You can
out a loan or take out a loan from us using your policy as security.
surrendering your You can also use your policy's loan and withdrawal
policy can change features to supplement your income, for example, during
your policy's tax retirement.
status, generate
taxable income, or Making withdrawals
make your policy You can withdraw part of your policy's net cash
more susceptible to surrender value starting on your policy's first
lapsing. Be sure to anniversary. This reduces your policy's accumulated
plan carefully value and could affect the face amount and death
before using these benefit.
policy benefits.

You'll find more
about withdrawals,
surrenders and
loans starting on
page 42.

6
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Taking out a loan
You can take out a loan from us using your policy's
accumulated value as security. You pay interest at an
annual rate of 3.25% on the amount you borrow. The
accumulated value used to secure your loan is set aside
in a loan account, where it earns interest at an annual
rate of 3%.

The amount in the loan account is not available to help
pay for any policy charges. Taking out a loan affects
the accumulated value of your policy because the amount
set aside in the loan account misses out on the
potential earnings available through the investment
options.

Surrendering your policy
You can surrender or cash in your policy for its net
cash surrender value while the person insured by the
policy is still living. If you surrender your policy
during the first 10 policy years, we'll apply a
surrender charge. If you increase your policy's face
amount and surrender your policy during the first 10
years after the increase, we'll apply a surrender
charge to the amount of the increase.

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Variable life Your beneficiary generally will not have to pay federal
insurance and your income tax on death benefit proceeds. You'll also
taxes generally not be taxed on any or all of your policy's
accumulated value unless you receive a cash
There are tax distribution by making a withdrawal or surrendering
issues to consider your policy.
when you own a life
insurance policy. If your policy is a modified endowment contract, all
These are described distributions you receive during the life of the policy
in detail starting may be subject to tax and a 10% penalty.
on page 50.

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About Pacific Life

When you buy a life Pacific Life is a life insurance company based in
insurance policy, California. We issue the policies. Pacific Select
you're relying on Distributors, Inc., (formerly called Pacific Mutual
the insurance Distributors, Inc.) our subsidiary, is the distributor
company that issues of the policies.
it to be able to
meet its financial How our accounts work
obligations to you. We put your premium payments in our general and
separate accounts. We own the assets in our accounts
and make the allocations to the investment options
You'll find more you've chosen.
about Pacific Life,
and our strength as Amounts allocated to the fixed options are held in our
a company, starting general account. Our general account includes all of
on page 54. our assets, except for those held in our separate
accounts. Our ability to meet our obligations under the
policy is backed by our strength as an insurance
We may use any company.
profit derived from
any charges under Amounts allocated to the variable investment options
the policy for any are held in our separate account. The assets in this
lawful purpose, account are kept separate from the assets in our
including our general account and our other separate accounts, and
distribution and are protected from our general creditors.
administrative
expenses.

7
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AN OVERVIEW OF M'S VERSATILE PRODUCT
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This section of the overview explains the fees and expenses associated with your
M's Versatile Product policy.

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Understanding policy expenses
and cash flow -------------------
Your premium
The chart to the right illustrates how You make a
cash normally flows through M's premium
Versatile Product policy. payment -------------------------------------------
v
The dark shaded boxes show the fees and ------------------- ------------------
expenses you pay directly or indirectly We deduct a
under your policy. These are explained premium load
in the pages that follow.
-------------------
In some states we'll hold your net Net premium
premium payments in the Money Market We allocate the ------------------
investment option until the free look net premium to
transfer date. Please turn to Your right the investment -----------------------------------
to cancel for details. options you
choose
-------------------

v v
------------------- ------------------- ---------------- ------------------
Fixed options Variable Pacific Select The funds
We hold investment Fund deduct
amounts you options advisory fees
allocate to these --> The variable ---> and other fund
options in our We hold investment expenses from
general account amounts you options invest the portfolios
allocate to these in the Pacific
options in our Select Fund's
separate account portfolios
------------------- ------------------- ------------------ ------------------

M Fund
The variable ------------------
investment We deduct:
options invest . cost of
in the M fund's insurance
portfolios . administrative
----------------- charge
. mortality and
We make monthly deductions expense risk
-----------------------------> charge
. rider charges
v
--------------- ----------------- ---------------- ------------------
------------------
Loan account Accumulated We deduct a
Accumulated value If you make withdrawal withdrawal charge
value set aside <---> ---------------------->
to secure a The total value
policy loan of your policy

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

------------------
We deduct a
surrender charge
If you surrender your policy . during the first
--------------------------------> 10 policy years
. during the first
10 years after
you increase the
face amount
------------------
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8
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Deductions from
your premiums
We deduct a premium load from each premium payment you
The premium load is make. The load is made up of three charges:
explained in more
detail on page 28. Sales load - 3.5% of each premium payment.

State and local tax charge - 2.35% of each premium
payment.

Federal tax charge - 1.50% of each premium payment.

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Deductions from We deduct a monthly charge from your policy's
your policy's accumulated value in the investment options on each
accumulated value monthly payment date. This charge is made up of three
charges:
The monthly charge
is explained in Cost of insurance - We deduct a cost of insurance
more detail charge based on the cost of insurance rate for your
starting on page policy's initial face amount and for each increase you
30. make to the face amount. We calculate this charge by
multiplying the current cost of insurance rate by a
An example discounted net amount at risk at the beginning of each
For a policy that policy month. When the person insured by the policy
insures a male non- reaches age 100, the cost of insurance charge is zero--
smoker who is age in other words, you no longer pay any cost of insurance
45 when the policy charge.
is issued, with:
Administrative charge - We deduct a charge of $7.50 a
. a face amount of month. When the person insured by the policy reaches
$350,000 age 100, the administrative charge is zero -- in other
. accumulated value words, you no longer pay any administrative charge.
of $30,000 after
deducting any
outstanding loan Mortality and expense risk charge - The mortality and
amount. expense risk charge varies depending on your policy's
face amount, the age of the person insured by the
The monthly charge policy, and accumulated value. We deduct a charge based
for the M&E risk on your policy's initial face amount and on each
face amount charge increase to the face amount. The charge is made up of
is: two separate charges:

. $126.00 under . The M&E risk face amount charge, which we deduct
death benefit every month during the first 10 policy years at a
Option A and rate that is based on the age of the person insured
Option C by the policy on the policy date and each $1,000 of
(($350,000 / the initial face amount of your policy. If you
1,000) X 0.360) increase your policy's face amount, the charge for
the amount of the increase is based on the age of the
. $181.30 under person insured by the policy on the day of the
death benefit increase.
Option B
(($350,000 / . The M&E risk asset charge, which we deduct every
1,000) X 0.518) month at a guaranteed maximum annual rate of:

The monthly charge . 0.45% (0.0375% monthly), of the first $25,000 of
for the M&E risk your policy's accumulated value in the investment
asset charge is options, plus
$9.58 (($25,000 X
0.0375%) plus . 0.05% (0.0042% monthly) of the accumulated value in
($5,000 X the investment options that exceeds $25,000.
0.0042%)).
We may charge a lower annual rate for the M&E risk
Sample rates for asset charge.
the M&E risk face
amount charge For the purposes of this charge, accumulated value is
appear in Appendix calculated on the monthly payment date before we deduct
A. the monthly charge, but after we deduct any outstanding
loan amount or allocate any new net premiums,
withdrawals or loans. When the person insured by the
policy reaches age 100, the annual rate is 0% -- in
other words, you no longer pay this charge.

Riders - If you add any riders to your policy, we add
any charges for them to your monthly charge.

9
<PAGE>

AN OVERVIEW OF M'S VERSATILE PRODUCT

---------------------------------------------------------
Withdrawal and
surrender charges
You can withdraw part of your policy's net cash
Withdrawal and surrender value at any time starting on your policy's
surrender charges first anniversary. There is a $25 charge for each
are explained in withdrawal you make. We deduct this charge
more detail on proportionately from all of your investment options.
pages 42 and 45.
If you surrender or cash in your policy during the
An example first 10 years of owning the policy, we'll deduct a
For a policy: surrender charge. If you increase your policy's face
. that insures a amount and surrender your policy during the first 10
male non-smoker years after the increase, we'll apply a surrender
who is age 45 charge to the amount of the increase.
when the policy
is issued The surrender charge is assessed at a rate that is
. with an initial based on the age and risk class of the person insured
face amount of by the policy on the policy date, and each $1,000 of
$350,000. the initial face amount of your policy. The amount of
the surrender charge does not change during the first
For death benefit policy month. We reduce the charge by 0.8403% a month
Option A and until it reaches zero at the end of 10 policy years.
Option C, the
surrender charge If you increase your policy's face amount, each
is: increase has a surrender charge and maximum surrender
charge based on the amount of the increase. If you
. $724.50 at issue decrease the face amount, the decrease will not affect
(($350,000 / your policy's surrender charge or maximum surrender
$1,000) X 2.07) charge.

. $219.19 at the
end of the
seventh policy
year ($724.50 -
($724.50 X .8403%
X 83 months))

For death benefit
Option B, the
surrender charge
is:

. $1,029.00 at
issue (($350,000
/ $1,000) X 2.94)

. $311.32 at the
end of the
seventh policy
year ($1,029.00 -
($1,029.00
X .8403% X 83
months))

The most we will
assess on any
surrendered policy
is $5.71 per $1,000
of face amount.

Sample rates for
the surrender
charge appear in
Appendix B.

10
<PAGE>

---------------------------------------------------------
Fees and expenses The Pacific Select Fund and the M Fund pay advisory
paid by the fees and other expenses. These are deducted from the
Pacific Select Fund assets of each portfolio and may vary from year to
and the M Fund year. They are not fixed and are not part of the terms
of your policy. If you choose a variable investment
You'll find more option, these fees and expenses affect you indirectly
about the Pacific because they reduce portfolio returns.
Select Fund
starting on page Fees and expenses paid by Pacific Select Fund
35, and in the Advisory fee
Pacific Select Pacific Life is the investment adviser to the Pacific
Fund's prospectus, Select Fund. The Pacific Select Fund pays an advisory
which accompanies fee to us for these services. The table below shows the
this prospectus. advisory fee as an annual percentage of each
portfolio's average daily net assets.
You'll find more
about the M Fund
starting on page Other expenses
35, and in the M
Fund's prospectus, The table also shows the fund expenses for each
which accompanies portfolio in 1999. To help limit fund expenses, we've
this prospectus. agreed to waive all or part of our investment advisory
fees or otherwise reimburse each portfolio for expenses
(not including advisory fees, additional costs
associated with foreign investing and extraordinary
expenses) that exceed 0.25% of its average daily net
assets. We do this voluntarily, but do not guarantee
that we'll continue to do so after December 31, 2001.
In 1999, Pacific Life reimbursed the Small-Cap Index
Portfolio $96,949.

<TABLE>
----------------------------------------------------------------
<CAPTION>
Portfolio Advisory fee Other expenses Total expenses+
----------------------------------------------------------------
As an annual % of average daily net assets
<S> <C> <C> <C>
Aggressive Equity 0.80 0.05 0.85
Emerging Markets/1/ 1.10 0.32 1.42
Diversified Research/2/ 0.90 0.05 0.95
Small-Cap Equity 0.65 0.05 0.70
International Large-
Cap/2/ 1.05 0.15 1.20
Bond and Income 0.60 0.06 0.66
Equity 0.65 0.04 0.69
I-Net Tollkeeper/2/ 1.50 0.15 1.65
Multi-Strategy 0.65 0.05 0.70
Equity Income 0.65 0.05 0.70
Growth LT 0.75 0.04 0.79
Mid-Cap Value 0.85 0.12 0.97
Equity Index/3/ 0.25 0.05 0.30
Small-Cap Index/4/ 0.50 0.44 0.94
REIT 1.10 0.18 1.28
International Value 0.85 0.16 1.01
Government Securities 0.60 0.06 0.66
Managed Bond/1/ 0.60 0.06 0.66
Money Market/1/ 0.35 0.05 0.40
High Yield Bond/1/ 0.60 0.06 0.66
Large-Cap Value 0.85 0.12 0.97
----------------------------------------------------------------
</TABLE>

/1/ Total net expenses for these portfolios in 1999,
after deduction of an offset for custodian credits,
were: 1.41% for Emerging Markets Portfolio, 0.65% for
Managed Bond Portfolio, 0.39% for Money Market
Portfolio, and 0.65% for High Yield Bond Portfolio.

/2/ Expenses are estimated. There were no actual
advisory fees or other expenses for these portfolios in
1999 because the portfolios started after December 31,
1999.

/3/ The advisory fee for the Equity Index Portfolio has
been adjusted to reflect the advisory fee increase
effective January 1, 2000. The actual advisory fee, and
total net expenses for this portfolio in 1999 after
deduction of an offset for custodian credits, were
0.16% and 0.20%, respectively.

/4/ Total net expenses for the Small-Cap Index
Portfolio in 1999, after the advisor's reimbursement
and deduction of an offset for custodian credits, were
0.75%.

+ The fund has adopted a brokerage enhancement 12b-1
plan, under which brokerage transactions may be placed
with broker-dealers in return for credits or other
compensation that may be used to help promote
distribution of fund shares. There are no fees or
charges to any portfolio under this plan, although the
fund's distributor may defray expenses of up to
approximately $300,000 for the year 2000, which it
might otherwise incur for distribution. If such
defrayed amount were considered a fund expense, it
would represent approximately .0023% or less of any
portfolio's average daily net assets.

11
<PAGE>

AN OVERVIEW OF M'S VERSATILE PRODUCT

Fees and expenses paid by the M Fund
Advisory fee
MFIA is the investment adviser to the M Fund. The M
Fund pays an advisory fee to MFIA for these services.
The table below shows the advisory fee as an annual
percentage of each portfolio's average daily net
assets.

Other expenses

The table also shows expenses the M Fund paid in 1999
as an annual percentage of each portfolio's average
daily net assets. MFIA has agreed to pay operating
expenses of the M Fund (not including brokerage or
other portfolio transaction expenses, expenses for
litigation, indemnification, taxes or other
extraordinary expenses) that exceed 0.25% of each
portfolio's average daily net assets. MFIA does this
voluntarily, but does not guarantee that it will
continue to do so after December 31, 2000.

<TABLE>
-------------------------------------------------------------
<S> <C> <C> <C>
M Fund Portfolios/1/ Advisory fee Other expenses Total expenses
-------------------------------------------------------------
<CAPTION>
As an annual % of average daily net assets
<S> <C> <C> <C>
Brandes International
Equity 0.98% 0.99% 1.95%
Turner Core Growth 0.45% 0.95% 1.40%
Frontier Capital
Appreciation 0.90% 0.57% 1.47%
Clifton Enhanced U.S.
Equity 0.40% 1.08% 1.48%
-------------------------------------------------------------
</TABLE>

/1/ The advisory fees for Brandes International Equity
and Clifton Enhanced U.S. Equity have been adjusted to
reflect a change in advisory fees effective May 1,
2000. Actual advisory fees in 1999 as a percent of
average daily net assets for the two funds were 0.96%
for the Brandes International Equity and 0.55% for the
Clifton Enhanced U.S. Equity. Actual total net expenses
for these portfolios in 1999 after the adviser's
reimbursements were: 1.21% for Brandes International
Equity, 0.70% for Turner Core Growth, 1.15% for
Frontier Capital Appreciation, and 0.80% for Clifton
Enhanced U.S. Equity. MFIA paid the difference.

12
<PAGE>

M'S VERSATILE PRODUCT BASICS

When you buy an M's Versatile Product life insurance
policy, you're entering into a contract with Pacific
Life Insurance Company. Your contract with us is made
up of your application, your policy, applications to
change or reinstate the policy, any amendments, riders
or endorsements to your policy, and specification
pages.

---------------------------------------------------------
Policy amendments When we approve your signed application, we'll issue
and endorsements your policy. If your application does not meet our
are a part of your underwriting requirements, we can reject it or ask you
policy and confirm for more information. Once we receive your first
changes you or we premium payment, the policy has been delivered to you
make to the policy. and any delivery requirements have been met, we'll
consider your policy to be in force. That's when our
Specification pages obligations under the policy begin.
summarize
information Your policy will be in force until one of the following
specific to your happens:
policy at the time . the person insured by the policy dies
the policy is . the grace period expires and your policy lapses, or
issued. . you surrender your policy.

If your policy is not in force when the person insured
Riders provide by the policy dies, we are not obligated to pay the
extra benefits, death benefit proceeds to your beneficiary.
some at additional
cost. Not all M's Versatile Product is a flexible premium variable
riders are life insurance policy that insures the life of one
available in every person and pays death benefit proceeds after that
state, and some person has died.
riders may only be
added when you Under a flexible premium life insurance policy, you
apply for your have the flexibility to choose the amount and frequency
policy. of your premium payments. You must, however, pay enough
premiums to cover the ongoing cost of policy benefits.
This policy may be
appropriate if you A premium load is deducted from each premium payment
want to provide a you make. The resulting net premium is allocated to the
death benefit for investment options you choose, and becomes part of your
family members or policy's accumulated value.
others or to help
meet other long- Charges are deducted from the accumulated value each
term financial month to help cover the cost of the policy's death
objectives. It may benefit and other expenses. If there is not enough
not be the right accumulated value to cover the monthly charge on the
kind of policy if day we make the deduction, your policy may lapse after
you plan to a grace period - which means you'll no longer have any
withdraw money for insurance coverage.
short-term needs.
Investment earnings will increase your policy's
Please discuss your accumulated value, while investment losses will
insurance needs and decrease it. The premium payments you'll be required to
financial make to keep your policy in force will be influenced by
objectives with the investment results of the investment options you've
your registered chosen.
representative.

In some states
we'll hold your net
premium payments in
the Money Market
investment option
until the free look
transfer date.
Please turn to Your
right to cancel for
details.

13
<PAGE>

M'S VERSATILE PRODUCT BASICS

---------------------------------------------------------
Owners, person Owners
insured by the The owner is the person named on the application who
policy, and makes the decisions about the policy and its benefits
beneficiaries while it's in force. You can own a policy by yourself
or with someone else. Two or more owners are called
Please consult your joint owners. You need the signatures of all owners for
financial advisor all policy transactions.
or a lawyer about
designating If one of the joint owners dies, the surviving owners
ownership will hold all rights under the policy. If the last
interests. joint owner dies, his or her estate will own the policy
unless you've given us other instructions.
If you would like
to change the owner A policy can also be owned by an institution, trust,
of your policy, corporation or group or sponsored arrangement. These
please contact us owners often buy more than one policy, which may
or your registered qualify them for reduced charges or lower premium
representative for payments.
a change of owner
form. We can We may reduce or waive the sales load or surrender
process the change charges on policies sold to our directors or employees,
only if we receive to any of our affiliates, or to trustees, employees or
your instructions affiliates of the fund.
in writing.
You can change the owner of your policy by completing a
change of owner form. Once we've received and recorded
your request, the change will be effective as of the
day you signed the change of owner form.

Person insured by the policy
Risk classes are This policy insures the life of one person who is age
usually based on 85 or younger at the time you apply for your policy,
age, gender, health and who has given us satisfactory evidence of
and whether or not insurability. Your policy refers to this person as the
the person to be insured. The policy pays death benefit proceeds after
insured by the this person has died.
policy smokes. Most
insurance companies The person to be insured by the policy is assigned an
use similar risk underwriting or insurance risk class which we use to
classification calculate cost of insurance and other charges. We
criteria. normally use the medical or paramedical underwriting
method to assign underwriting or insurance risk
When we refer to classes, which may require a medical examination. We
age throughout this may, however, use other forms of underwriting if we
prospectus, we're think it's appropriate.
using the word as
we've defined it When we use a person's age in policy calculations, we
here, unless we generally use his or her age as of the nearest policy
tell you otherwise. date, and we add one year to this age on each policy
anniversary date. For example, when we talk about
someone "reaching age 100", we're referring to the
policy anniversary date closest to that person's 100th
birthday, not to the day when he or she actually turns
100.

14
<PAGE>

Beneficiaries
The beneficiary is the person, people, entity or
entities you name to receive the death benefit
proceeds. Here are some things you need to know about
naming beneficiaries:

. You can name one or more primary beneficiaries who
each receive an equal share of the death benefit
proceeds unless you tell us otherwise. If one
beneficiary dies, his or her share will pass to the
surviving primary beneficiaries in proportion to the
share of the proceeds they're entitled to receive,
unless you tell us otherwise.

. You can also name a contingent beneficiary for each
primary beneficiary you name. The contingent
beneficiary will receive the death benefit proceeds
if the primary beneficiary dies.
If you would like
to change the . You can choose to make your beneficiary permanent
beneficiary of your (sometimes called irrevocable). You cannot change a
policy, please permanent beneficiary's rights under the policy
contact us or your without his or her permission.
registered
representative for . If none of your beneficiaries is still living when
a change of the death benefit proceeds are payable, you as the
beneficiary form. policy owner will receive the proceeds. If you're no
We can process the longer living, the proceeds will go to your estate.
change only if we
receive your . You can change your beneficiary at any time while the
instructions in person insured by the policy is still living, and
writing. while the policy is in force. The change will be
effective as of the day you signed the change of
beneficiary form.

---------------------------------------------------------
Policy date, Your policy date
monthly payment This is usually the day we approve your policy
date, policy application. It's also the beginning of your first
anniversary date policy year. Your policy's monthly, quarterly, semi-
annual and annual anniversary dates are based on your
In Massachusetts, policy date.
the policy date is
known as the issue The policy date is set so that it never falls on the
date. 29th, 30th or 31st of any month. We'll apply your first
premium payment as of your policy date or as of the day
we receive your premium, whichever is later.

Backdating your policy
In Ohio, your You can have your policy backdated up to six months, as
policy can be long as we approve it. Backdating in some cases may
backdated only lower your cost of insurance rates since these rates
three months. are based on the age of the person insured by the
policy. Your first premium payment must cover the
premium load and monthly charges for the period between
the backdated policy date and the day your policy is
issued.

Your monthly payment date
This is the day we deduct the monthly charges from your
policy's accumulated value. The first monthly payment
date is your policy date, and it's the same day each
month thereafter. Monthly charges are explained in the
section called Your policy's accumulated value.

Your policy anniversary date
This is the same day as your policy date every year
after we issue your policy. A policy year starts on
your policy date and each anniversary date, and ends on
the day before the next anniversary date.

15
<PAGE>

M'S VERSATILE PRODUCT BASICS

---------------------------------------------------------
Statements and We send the following statements and reports to policy
reports owners:
we'll send you
. a confirmation for many financial transactions,
usually including premium payments and transfers,
loans, loan repayments, withdrawals and surrenders.
We can create Monthly deductions and scheduled transactions made
customized under the dollar cost averaging, portfolio
hypothetical rebalancing and first year transfer programs are
illustrations of reported on your quarterly policy statement.
benefits under your
policy based on . a quarterly policy statement. The statement will tell
different you the accumulated value of your policy by
assumptions. investment options, cash surrender value, the amount
of the death benefit, the policy's face amount, and
We'll send you one any outstanding loan amount. It will also include a
policy illustration summary of all transactions that have taken place
free of charge each since the last quarterly statement, as well as any
policy year if you other information required by law.
ask for one. We
reserve the right . supplemental schedules of benefits and planned
to charge $25 for periodic premiums. We'll send these to you if you
additional change your policy's face amount or change any of the
illustrations. policy's other benefits.

. financial statements, at least annually or as
required by law, of the separate account and Pacific
Select Fund, that include a listing of securities for
each portfolio of the Pacific Select Fund.

. any financial statements that we receive from M Fund.

---------------------------------------------------------
Your right to During the free look period, you have the right to
cancel cancel your policy and return it to us or your
registered representative for a refund.
There are special
rules for the free The amount of your refund may be more or less than the
look period in premium payments you've made, depending on the state
certain states. where you signed your application. We'll always deduct
Here are some any outstanding loan amount from the amount we refund
examples: to you.
. In California the
free look period You'll find a complete description of the free look
ends 30 days period that applies to your policy on the policy's
after you receive cover sheet, or on a notice that accompanied your
your policy if policy. Generally, the free look period ends 10 days
you're 60 years after you receive your policy. Some states may have a
old or over or if different free look period if you are replacing another
you're replacing life insurance policy.
another life
insurance policy. In most states, your refund will be based on the
. In Colorado the accumulated value of your policy. In these states,
free look period we'll allocate your net premiums to the investment
ends after 15 options you've chosen. If you exercise your right to
days. cancel, your refund will be:
. In North Dakota
the free look . any charges or taxes we've deducted from your
period ends after premiums
20 days. . the net premiums allocated to the fixed options
. the accumulated value allocated to the variable
Please call us or investment options
your registered . any monthly charges and fees we've deducted from your
representative if policy's accumulated value in the variable investment
you have questions options.
about your right to
cancel your policy.

16
<PAGE>

In some states we're required to refund the premium
payments you've made. If you sign your application in
one of these states, we'll hold the net premiums in the
Money Market investment option until the free look
transfer date. On that day, we'll transfer the
accumulated value in the Money Market investment option
to the investment options you've chosen.

The free look transfer date is the latest of the
following:

. 15 days after we issue your policy
. when we consider your policy to be in force.

---------------------------------------------------------
Timing of payments, Effective date
forms and requests The effective date of payments, forms and requests you
send us is usually determined by the day and time we
A business day, receive the item in proper form at the mailing address
called a valuation that appears on the back cover of this prospectus.
date in your
policy, is any day Planned periodic premium payments, loan requests,
that the New York transfer requests, loan payments or withdrawal or
Stock Exchange and surrender requests that we receive in proper form
our life insurance before 4:00 p.m. Eastern time on a business day will
client services normally be effective as of the end of that day, unless
offices are open. the transaction is scheduled to occur on another
It usually ends at business day. If we receive your payment or request on
4:00 p.m. Eastern or after 4:00 p.m. Eastern time on a business day, your
time. payment or request will be effective as of the end of
the next business day. If a scheduled transaction falls
The New York Stock on a day that is not a business day, we'll process it
Exchange is usually as of the end of the next business day.
closed on weekends
and on the Other forms, notices and requests are normally
following days: effective as of the next business day after we receive
. New Year's Day, them in proper form, unless the transaction is
Martin Luther scheduled to occur on another business day. Change of
King, Jr. Day, owner and beneficiary forms are effective as of the day
President's Day, you sign the change form, once we receive them in
Good Friday, proper form.
Memorial Day,
July Fourth, Proper form
Labor Day, We'll process your requests once we receive all
Thanksgiving Day letters, forms or other necessary documents, completed
and Christmas to our satisfaction. Proper form may require, among
Day, other things, a signature guarantee or some other proof
and of authenticity. We do not generally require a
. the Friday before signature guarantee, but we may ask for one if it
New Year's Day, appears that your signature has changed, if the
July Fourth or signature does not appear to be yours, if we have not
Christmas Day if received a properly completed application or
that holiday confirmation of an application, or for other reasons to
falls on a protect you and us.
Saturday
. the Monday
following New
Year's Day, July
Fourth or
Christmas Day if
that holiday
falls on a Sunday

unless unusual
business conditions
exist, such as the
ending of a monthly
or the yearly
accounting period.

Our client services
offices are also
usually closed on
the following days:
. the Monday before
New Year's Day,
July Fourth, or
Christmas Day, if
any of these
holidays falls on
a Tuesday
. the Tuesday
before Christmas
Day if that
holiday falls on
a Wednesday
. the Friday after
New Year's Day,
July Fourth or
Christmas Day, if
any of these
holidays falls on
a Thursday
. the Friday after
Thanksgiving.

Call us or contact
your registered
representative if
you have any
questions about the
proper form
required for a
request.

17
<PAGE>

M'S VERSATILE PRODUCT BASICS

When we make payments and transfers
We'll normally send the proceeds of transfers,
withdrawals, loans, surrenders, exchanges and death
benefit payments within seven days after the effective
To request payment date of the request. We may delay payments and
of death benefit transfers, or the calculation of payments and transfers
proceeds, send us based on the value in the variable investment options
proof of death and under unusual circumstances, for example, if:
payment
instructions. . the New York Stock Exchange closes on a day other
than a regular holiday or weekend
. trading on the New York Stock Exchange is restricted
. an emergency exists as determined by the SEC, as a
result of which the sale of securities is not
practicable, or it is not practicable to determine
the value of a variable account's assets, or
. the SEC permits a delay for the protection of policy
owners.

We may delay transfers and payments from the fixed
options, including the proceeds from withdrawals,
surrenders and loans, for up to six months. We'll pay
interest at an annual rate of at least 3% on any
withdrawals or surrender proceeds from the fixed
options that we delay for 30 days or more.

We pay interest at an annual rate of at least 3% on
death benefit proceeds, calculated from the day the
person insured by the policy dies to the day we pay the
proceeds.

---------------------------------------------------------
Telephone You can make loans or transfers by telephone any time
transactions after the free look period as long as we have your
signed authorization form on file.

Here are some things you need to know about telephone
transactions:

. You must complete a telephone authorization form.
. If your policy is jointly owned, all joint owners
must sign the telephone authorization. We'll take
instructions from any owner.
. We may use any reasonable method to confirm that your
telephone instructions are genuine. For example, we
may ask you to provide personal identification or we
may record all or part of the telephone conversation.
We may refuse any transaction request made by
telephone.

We'll send you a written confirmation of each telephone
transaction.

Sometimes, you may not be able to make loans or
transfers by telephone, for example, if our telephone
lines are busy because of unusual market activity or a
significant economic or market change, or our telephone
lines are out of service during severe storms or other
emergencies. In these cases, you can send your request
to us in writing, or call us the next business day or
when service has resumed.

When you send us your telephone authorization form, you
agree that:

. we can accept and act upon instructions you give us
over the telephone
. neither we, any of our affiliates, the Pacific Select
Fund, or any director, trustee, officer, employee or
agent of ours or theirs will be liable for any loss,
damages, cost or expenses that result from
transactions processed because of a request by
telephone that we believe to be genuine, as long as
we have followed our own procedures
. you bear the risk of any loss that arises from your
right to make loans or transfers over the telephone.

18
<PAGE>

THE DEATH BENEFIT

We'll pay death benefit proceeds to your beneficiary
after the person insured by the policy dies while the
policy is still in force. Your beneficiary generally
will not have to pay federal income tax on death
benefit proceeds.

Your policy's This policy offers three death benefit options, Options
initial amount of A, B and C. The option you choose will generally depend
insurance coverage on which is more important to you: a larger death
is its initial face benefit or building the accumulated value of your
amount. We policy.
determine the face
amount based on This policy offers two ways to calculate the guideline
instructions minimum death benefit: the cash value accumulation test
provided in your and the guideline premium test. These are called death
application. benefit qualification tests. The test you choose will
generally depend on the amount of premiums you want to
The minimum face pay.
amount when a
policy is issued is Here are some things you need to know about the death
usually $50,000, benefit:
but we may reduce . You choose your death benefit option and death
this in some benefit qualification test on your policy
circumstances. application.

You'll find your . If you do not choose a death benefit option, we'll
policy's face assume you've chosen Option A.
amount, which . If you do not choose a death benefit qualification
includes any test, we'll assume you've chosen the guideline
increases or premium test.
decreases, in the . The death benefit will always be the greater of the
specification pages death benefit under the option you choose or the
in your policy. guideline minimum death benefit, calculated using the
death benefit qualification test you've chosen.

If you signed the . The death benefit will never be lower than the face
application for amount of your policy if you've chosen Option A or B.
your policy in Of course, the death benefit proceeds will always be
Florida, after the reduced by any outstanding loan amount.
person insured by
the policy reaches . We'll pay the death benefit proceeds to your
age 100, the death beneficiary when we receive proof of the death of the
benefit equals the person insured by the policy.
accumulated value.

---------------------------------------------------------
Choosing your death You can choose one of the following three options for
benefit option the death benefit on your application.

Option A - the Option B - the face amount of
face amount of your policy plus its accumulated
your policy. value.

[ILLUSTRATION [ILLUSTRATION APPEARS HERE]
APPEARS HERE]

The death benefit changes as
your policy's accumulated value
changes. The better your
investment options perform, the
larger the death benefit will
be.
Option C - the
face amount of
your policy plus
the total premiums
you've paid minus
any withdrawals or
distributions
made.

[ILLUSTRATION
APPEARS HERE]

The more premiums
you pay and the
less you withdraw,
the larger the
death benefit will
be.

19
<PAGE>

THE DEATH BENEFIT

---------------------------------------------------------
Choosing a death This policy offers two death benefit qualification
benefit tests, which we use to calculate the guideline minimum
qualification test death benefit. You choose one of these tests on your
application. Once you choose a test, you cannot change
The guideline it.
minimum death
benefit is the In general, you should choose the cash value
minimum death accumulation test if you do not want to limit the
benefit needed for amount of premiums you can pay into your policy. If you
your policy to want to pay a premium that increases the net amount at
qualify as life risk, however, you need to provide us with satisfactory
insurance under evidence of insurability before we can increase the
Section 7702 of the death benefit.
Internal Revenue
Code. The guideline minimum death benefit will generally be
smaller under the guideline premium test than under the
Net amount at risk cash value accumulation test.
is the difference
between the death Cash value accumulation test
benefit that would The cash value accumulation test is available to
be payable if the policies issued on or after February 1, 2000.
person insured by
the policy died and If you choose the cash value accumulation test, your
the accumulated policy's guideline minimum death benefit will be the
value of your greater of:
policy.
. the minimum death benefit amount that's needed for
the policy to qualify as life insurance under the tax
code or
There are other . 101% of the policy's accumulated value.
limits on premiums
you can pay into This test determines what the death benefit should be
your policy, which in relation to your policy's accumulated value. In
are described in general, as your policy's accumulated value increases,
How premiums work. the death benefit must also increase to ensure that
your policy qualifies as life insurance under the tax
code.
The cash value
accumulation test Under the test, a policy's death benefit must be large
is defined in enough to ensure that its cash surrender value, as
Section 7702(b) of defined in Section 7702 of the tax code (and which is
the tax code. based on accumulated value, among other things), is
never larger than the net single premium that's needed
An example to fund future benefits under the policy. The net
For a policy that single premium under your policy varies according to
insures a male, age the age, sex, and risk class of the person insured by
45 when the policy your policy. It's calculated using an interest rate of
was issued, with a at least 4% and the guaranteed mortality charges as of
standard nonsmoking the time the policy is issued. We'll use a higher
risk class, in interest rate if we've guaranteed it under your policy.
Policy Year 6 the
guideline minimum The death benefit determined by your policy's net
death benefit under single premium will be at least equal to the amount
the cash value required for the policy to qualify as life insurance
accumulation test under the tax code.
is calculated by
multiplying each Guideline premium test
$1,000 of If you choose the guideline premium test, we calculate
accumulated value the guideline minimum death benefit by multiplying your
by a "net single policy's accumulated value by a death benefit
premium factor" percentage.
of 2.4728.

The guideline You'll find a table of death benefit percentages in
premium test is Appendix C and in your policy. The death benefit
defined in Section percentage is based on the guideline premium limit and
7702(a)(2) of the the age of the person insured by the policy. It is 250%
tax code. when the person is age 40 or younger, and reduces as
the person gets older.

Death benefit Under this test, the total premiums you pay cannot
percentages are exceed your policy's guideline premium limit. You'll
defined in Section find a more detailed discussion of the guideline
7702(d) of the tax premium limit in How premiums work.
code.

20
<PAGE>

---------------------------------------------------------
Comparing the death The tables below compare the death benefits provided by
benefit options the policy's three death benefit options. The examples
are intended only to show differences in death benefits
and net amounts at risk. Accumulated value assumptions
may not be realistic.

The example below is based on the following:

. the person insured by the policy is age 45 at the
time the policy was issued and dies at the beginning
of the sixth policy year
. face amount is $100,000
. accumulated value at the date of death is $25,000
. total premium paid into the policy is $30,000
. the guideline minimum death benefit under the
guideline premium test is $46,250 (assuming a
guideline premium test factor of 185% x accumulated
value)
. the guideline minimum death benefit under the cash
value accumulation test is $61,820.00 (assuming a net
single premium factor of $2.4728 for each $1,000 of
accumulated value)

<TABLE>
-----------------------------------------------------------------------------------
<CAPTION>
If you select the guideline
premium test, the death
benefit is the larger of
these two amounts
------------------------------
Death Death benefit Guideline Net amount at
benefit How it's under minimum risk used for cost
option calculated the option death benefit of insurance charge
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Option A Face amount $100,000 $46,250 $74,754.01
Option B Face amount plus
accumulated value $125,000 $46,250 $99,692.51
Option C Face amount plus
premiums less distributions $130,000 $46,250 $104,680.21
-----------------------------------------------------------------------------------

-----------------------------------------------------------------------------------
<CAPTION>
If you select the cash value
accumulation test, the death
benefit is the larger of
these two amounts
------------------------------
Death Death benefit Guideline Net amount at
benefit How it's under minimum risk used for cost
option calculated the option death benefit of insurance charge
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Option A Face amount $100,000 $61,820.00 $74,754.01
Option B Face amount plus
accumulated value $125,000 $61,820.00 $99,692.51
Option C Face amount plus
premiums less distributions $130,000 $61,820.00 $104,680.21
-----------------------------------------------------------------------------------
</TABLE>

21
<PAGE>

THE DEATH BENEFIT

If the death Here's the same example, but with an accumulated value
benefit equals the of $75,000. Because accumulated value has increased,
guideline minimum the guideline minimum death benefit is now:
death benefit, any
increase in . $138,750 for the guideline premium test
accumulated value . $185,460 for the cash value accumulation test.
will cause an
automatic increase<TABLE>
in the death -----------------------------------------------------------------------------------
benefit. <CAPTION>
If you select the guideline
premium test, the death
benefit is the larger of
these two amounts
-----------------------------
Death Death benefit Guideline Net amount at
benefit How it's under minimum risk used for cost
option calculated the option death benefit of insurance charge
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Option A Face amount $100,000 $138,750 $63,408.68
Option B Face amount plus
accumulated value $175,000 $138,750 $99,569.51
Option C Face amount plus
premiums less distributions $130,000 $138,750 $63,408.68
-----------------------------------------------------------------------------------

-----------------------------------------------------------------------------------
<CAPTION>
If you select the cash value
accumulation test, the death
benefit is the larger of
these two amounts
-----------------------------
Death Death benefit Guideline Net amount at
benefit How it's under minimum risk used for cost
option calculated the option death benefit of insurance charge
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Option A Face amount $100,000 $185,460 $110,003.78
Option B Face amount plus
accumulated value $175,000 $185,460 $110,003.78
Option C Face amount plus
premiums less distributions $130,000 $185,460 $110,003.78
-----------------------------------------------------------------------------------
</TABLE>

These examples show that each death benefit option
provides a different level of protection. Keep in mind
that cost of insurance charges, which affect your
policy's accumulated value, increase with the amount of
the death benefit, as well as over time. The cost of
insurance is charged at a rate per $1,000 of the
discounted net amount at risk. As the net amount at
risk increases, your cost of insurance increases.
Accumulated value also varies depending on the
performance of the investment options in your policy.

22
<PAGE>

---------------------------------------------------------
When we pay the
death benefit
We calculate the amount of the death benefit proceeds
Your beneficiary as of the end of the day the person insured by the
can choose to policy dies. If that person dies on a day that is not a
receive the death business day, we calculate the proceeds as of the next
benefit proceeds in business day.
a lump sum or use
it to buy an income Your policy's beneficiary must send us proof that the
benefit. Please see person insured by the policy died while the policy was
the discussion in force, along with payment instructions.
about income
benefits in General Death benefit proceeds equal the total of the death
information about benefits provided by your policy and any riders you've
your policy. added, minus any outstanding loan amount, minus any
overdue charges.
It is important
that we have a We'll pay interest at an annual rate of at least 3% on
current address for the death benefit proceeds, calculated from the day the
your beneficiary so person insured by the policy dies to the day we pay the
that we can pay proceeds. In some states we may pay a higher rate of
death benefit interest if required by law.
proceeds promptly.
If we cannot pay
the proceeds to
your beneficiary
within five years
of the death of the
person insured by
the policy, we'll
be required to pay
them to the state.
---------------------------------------------------------
Changing your death
benefit option
You can change your death benefit option while your
policy is in force. Here's how it works:

We will not change . You can change the death benefit option once in any
your death benefit policy year.
option if it means
your policy will be . You must send us your request in writing.
treated as a
modified endowment . You can change to Option A or Option B.
contract, unless
you've told us in . You cannot change from any death benefit option to
writing that this Option C.
would be acceptable
to you. Modified . The change will become effective on the first monthly
endowment contracts payment date after we receive your request. If we
are discussed in receive your request on a monthly payment date, we'll
Variable life process it that day.
insurance and your
taxes. . The face amount of your policy will change by the
amount needed to make the death benefit under the new
option equal the death benefit under the old option
just before the change. We will not let you change
the death benefit option if doing so means the face
amount of your policy will become less than $50,000.
We may waive this minimum amount under certain
circumstances.
Net amount at risk
is the difference . Changing the death benefit option can also affect the
between the death monthly cost of insurance charge since this charge
benefit that would varies with the net amount at risk.
be payable if the
person insured by . The new death benefit option will be used in all
the policy died and future calculations.
the accumulated
value of your
policy.

23
<PAGE>

THE DEATH BENEFIT

---------------------------------------------------------
Changing the face
amount
You can increase or decrease your policy's face amount
If you change the starting on the first policy anniversary as long as we
face amount, we'll approve it. Here's how it works:
send you a
supplemental . You can change the face amount as long as the person
schedule of insured by the policy is still living.
benefits and
premiums. . You can only change the face amount once in any
policy year.

. You must send us your request in writing while your
policy is in force.

. The change will become effective on the first monthly
payment date after we receive your request. If we
If your policy's receive your request on a monthly payment date, we'll
death benefit is process it that day.
equal to the
guideline minimum . The person insured by the policy will also need to
death benefit, and agree to the change in face amount, if that person is
the net amount at someone other than you.
risk is more than
three times the . Increasing the face amount may increase the death
death benefit on benefit, and decreasing the face amount may decrease
the policy date, we the death benefit. The amount the death benefit
may reduce the changes will depend, among other things, on the death
death benefit by benefit option you've chosen and whether, and by how
requiring you to much, the death benefit is greater than the face
make a withdrawal amount before you make the change.
from your policy.
. Changing the face amount can affect the net amount at
If we require you risk, which affects the cost of insurance charge. An
to make a increase in the face amount may increase the cost of
withdrawal, we will insurance charge, while a decrease may decrease the
not charge you our charge.
usual $25
withdrawal fee, but . We can refuse your request to make the face amount
the withdrawal may less than $50,000. We can waive this minimum amount
be taxable. Please in certain situations, such as group or sponsored
turn to arrangements.
Withdrawals,
surrenders and Increasing the face amount
loans for Here are some additional things you should know about
information about increasing the face amount:
making withdrawals.
. You must give us satisfactory evidence of
insurability.

. Each increase you make to the face amount must be
$25,000 or more.

. We may charge you a fee of up to $100 for each
increase to cover the costs of processing the
request. We deduct the fee on the day the increase is
effective from all of your investment options in
proportion to the accumulated value you have in each
option.

. Increasing the face amount will increase the
mortality and expense risk charge.

Decreasing the face Decreasing the face amount
amount may affect Here are some additional things you should know about
your policy's tax decreasing the face amount:
status. To ensure
your policy . We'll apply any decrease in the face amount in the
continues to following order:
qualify as life . to the most recent increases you made to the face
insurance, we might amount in the order you made them
be required to . to the original face amount.
return part of your . We do not charge you for a decrease in face amount.
premium payments to . We can refuse your request to decrease the face
you if you've amount if making the change means:
chosen the . your policy will end because it no longer qualifies
guideline premium as life insurance
test, or make . the distributions we'll be required to make from
distributions from your policy's accumulated value will be greater
the accumulated than your policy's net cash surrender value
value, which may be . your policy will become a modified endowment
taxable. contract and you have not told us in writing that
this is acceptable to you.

For more
information, please
see Variable life
insurance and your
taxes.

24
<PAGE>

---------------------------------------------------------
Optional riders
There are nine optional riders that provide extra
Ask your registered benefits, some at additional cost. Not all riders are
representative for available in every state, and some riders may only be
more information added when you apply for your policy.
about the riders
available with the . Accidental death rider
policy, or about Provides additional insurance coverage in the event
other kinds of life of the accidental death of the person insured by the
insurance policies policy.
offered by Pacific
Life. . Children's term rider
Provides term insurance for the children of the
There may be tax person insured by the policy
consequences if you
exercise your . Annual renewable term rider
rights under the Provides annual renewal term insurance on the person
Accelerated living insured by the policy.
benefits rider.
Please see Variable . Annual renewable and convertible term rider
life insurance and Provides annual renewal term insurance on members of
your taxes for more the immediate family of the person insured by the
information. policy.

. Accounting benefit rider
Provides added protection benefit on the person
insured by the policy.

. Guaranteed insurability rider
Gives the right to buy additional insurance on the
Samples of the life of the person insured by the policy on certain
provisions for the specified dates without proof of insurability.
extra optional
benefits are . Waiver of charges rider
available from us Waives certain charges if the person insured by the
upon written policy becomes totally disabled before age 60.
request.
. Accelerated living benefits rider
Gives the policy owner access to a portion of the
policy's death benefit if the person insured by the
policy has been diagnosed with a terminal illness
resulting in a life expectancy of six months or less
(or longer than six months in some states).

. Disability benefit rider
Provides a monthly addition to the policy's
accumulated value when the person insured by the
policy has a qualifying disability, until he or she
reaches age 65.

We'll add any rider charges to the monthly charge we
deduct from your policy's accumulated value.

25
<PAGE>

THE DEATH BENEFIT

Things to keep in mind
We offer other variable life insurance policies which
provide insurance protection on the life of one person
or the lives of two people. The loads and charges on
these policies may be different. Combining a policy and
a rider, however, may be more economical than adding
another policy. It may also be more economical to
provide an amount of insurance coverage through a
policy alone.

Under certain circumstances, combining a policy with an
Annual renewable term rider or Accounting benefit rider
may result in a face amount equal to the face amount of
a single policy. Combining a policy and an Annual
renewable term rider will result in current charges
that are lower than for a single policy with the same
face amount.

However, your policy has guaranteed maximum charges.
Adding an Annual renewable term rider will result in
guaranteed maximum charges that are higher than for a
single policy with the same face amount.

Combining a policy with an Accounting benefit rider
could result in either higher or lower charges than
under a single policy. The timing of certain charges
for policies held for certain periods may also be
affected.

26
<PAGE>

HOW PREMIUMS WORK

Your policy gives you the flexibility to choose the
amount and frequency of your premium payments within
certain limits. Each premium payment must be at least
$50.

We deduct a premium load from each premium payment, and
then allocate your net premium to the investment
options you've chosen. Depending on the performance of
your investment options, and on how many withdrawals,
The amount, loans or other policy features you've taken advantage
frequency, and of, you may need to make additional premium payments to
period of time over keep your policy in force.
which you make
premium payments If we do not receive your first premium payment within
may affect whether 20 days after we issue your policy, we can cancel the
your policy will be policy and refund any partial premium payment you've
classified as a made. We may waive the 20 day requirement in some
modified endowment cases.
contract, or no
longer qualifies as
life insurance for
tax purposes. See
Variable life
insurance and your
taxes for more
information.
---------------------------------------------------------
Planned periodic You can schedule the amount and frequency of your
premium payments premium payments. We refer to scheduled premium
payments as your planned periodic premium. Here's how
Even if you pay all it works:
your premiums when
they're scheduled, . On your application, you choose a fixed amount of at
your policy could least $50 for each premium payment.
lapse if the
accumulated value, . You indicate whether you want to make premium
less any payments annually, semi-annually, or quarterly. You
outstanding loan can also choose monthly payments using our monthly
amount, is not Uni-check plan, which is described below.
enough to pay your
monthly charges. . We send you a notice to remind you of your scheduled
Turn to Your premium payment (except for monthly Uni-check
policy's payments, which are paid automatically). If you own
accumulated value more than one policy, we'll send one notice -- called
for more a listbill -- that reminds you of your payments for
information. all of your policies. You can choose to receive the
listbill every month. While you do not have to make
the premium payments you've scheduled, not making a
premium payment may have an impact on any financial
objectives you may have set for your policy's
accumulated value and death benefit, and could cause
your policy to lapse.

. We'll treat any payment you make during the life of
your policy as a loan repayment, not as a premium
payment, unless you tell us otherwise. When a
payment, or any portion of it, exceeds your
outstanding loan amount, we'll treat it as a premium
payment. Some states may require us to consider your
payments as premium payments if you have not given us
instructions to do otherwise.

27
<PAGE>

HOW PREMIUMS WORK

Monthly Uni-check plan
Once you've made your first premium payment, you can
make monthly premium payments using our Uni-check plan.
Here's how it works:

. you authorize us to withdraw a specified amount from
your checking account each month

. you can choose any day between the 4th and 28th of
the month

. if you do not specify a day for us to make the
withdrawal, we'll withdraw the premium payment on
your policy's monthly anniversary. If your policy's
monthly anniversary falls on the 1st, 2nd or 3rd of
the month, we'll withdraw the payment on the 4th of
each month.

---------------------------------------------------------
Deductions from
your premiums
We deduct a premium load from each premium payment you
Your net premium is make. The load is made up of three charges:
your premium
payment less the Sales load
premium load. We deduct a 3.5% sales load from each premium payment
you make.

This charge helps pay for the cost of distributing our
policies and is guaranteed not to increase. If our
sales and distribution expenses are more than the sales
load, we can recover these expenses from other charges,
such as the mortality and expense risk charge and the
surrender charge, and from any mortality gains.

State and local tax charge
We deduct 2.35% from each premium payment to pay state
and local premium and other taxes. The actual taxes we
pay vary from state to state, and in some instances,
among municipalities. We do not expect to profit from
this charge, and do not expect to change the rate
unless the rate we pay changes.

Federal tax charge
We deduct 1.50% from each premium payment to pay
federal taxes. We reserve the right to change this rate
to respond to changes in law.

---------------------------------------------------------
Allocating your
premiums
We generally allocate your net premiums to the
There are special investment options you've chosen on your application on
restrictions when the day we receive them. We currently limit your
allocating premiums allocations to 20 investment options at one time.
to the Fixed LT
account. When we allocate your first premium depends on the
state where you signed your policy application. If you
Please turn to Your signed your application in a state that requires us to
investment options return the premiums you've paid, we'll hold your net
for more premiums in the Money Market investment option until
information about the free look transfer date, and then transfer them to
the investment the investment options you've chosen.
options.
If you signed your application in a state that requires
refunds to be based on accumulated value, we allocate
net premiums to the investment options you've chosen on
the day we receive them.

28
<PAGE>

---------------------------------------------------------
Limits on the Federal tax law puts limits on the amount of premium
premium payments payments you can make in relation to your policy's
you can make death benefit. These limits apply in the following
situations:
Before you buy a
policy, you can ask . If you've chosen the guideline premium test as your
us or your death benefit qualification test and accepting the
registered premium means your policy will no longer qualify as
representative for life insurance for federal income tax purposes.
a personalized
illustration that The total amount you can pay in premiums and still have
will show you the your policy qualify as life insurance is your policy's
guideline single guideline premium limit. The sum of the premiums paid,
premium and less any withdrawals, at any time cannot exceed the
guideline level guideline premium limit, which is the greater of:
annual premiums.
. the guideline single premium or
. the sum of the guideline level annual premiums.

Your policy's guideline single premium and guideline
level annual premiums appear on your policy's
specification pages.

We may refuse to accept all or part of a premium
payment if, by accepting it, you will exceed your
policy's guideline premium limit. If we find that
you've exceeded your guideline premium limit, we may
remove all or part of a premium you've paid from your
policy as of the day we applied it, and return it to
you. We'll adjust the death benefit retroactively to
that date to reflect the reduction in premium payments.

You'll find a . If applying the premium in that policy year means
detailed discussion your policy will become a modified endowment
of modified contract.
endowment contracts
in Variable life A life insurance policy will become a modified
insurance and your endowment contract if the sum of premium payments made
taxes. during the first seven contract years, less a portion
of withdrawals, exceeds the seven-pay limit defined in
Section 7702A of the Internal Revenue Code.

Unless you've told us in writing that you want your
policy to become a modified endowment contract, we'll
remove all or part of the premium payment from your
policy as of the day we applied it and return it to
you. We'll also adjust the death benefit retroactively
to that date to reflect the reduction in premium
payments. If we receive such a premium within 20 days
before your policy anniversary, we'll hold it and apply
it to your policy on the anniversary date.

In both of these situations, if we remove an excess
premium from your policy, we'll return the premium
amount to you no later than 60 days after the end of
that policy year. We may adjust the amount for interest
or for changes in accumulated value that relate to the
amount of the excess premium payment we're returning to
you.

If we do not return the premium amount to you within
that time, we'll increase your policy's death benefit
retroactively, to the day we applied the premium, and
prospectively so that it's always the amount necessary
to ensure your policy qualifies as life insurance, or
to prevent it from becoming a modified endowment
contract. If we increase your death benefit, we'll
adjust cost of insurance or rider charges retroactively
and prospectively to reflect the increase.

Net amount at risk . If applying the premium payment to your policy will
is the difference increase the net amount at risk. This will happen if
between the death your policy's death benefit is equal to the guideline
benefit that would minimum death benefit or would be equal to it once we
be payable if the applied your premium payment.
person insured by
the policy died and We may choose to accept your premium payment in this
the accumulated situation, but before we do so, we may require
value of your satisfactory evidence of the insurability of the person
policy. insured by the policy.

We will not accept premium payments after the person
insured by the policy reaches age 100.

29
<PAGE>

YOUR POLICY'S ACCUMULATED VALUE

Accumulated value Accumulated value is the value of your policy on any
is used as the business day.
basis for
determining policy We use it to calculate how much money is available to
benefits and you for loans and withdrawals, and how much you'll
charges. receive if you surrender your policy. It also affects
the amount of the death benefit if you choose a death
benefit option that's calculated using accumulated
value.

The accumulated value of your policy is not
guaranteed - it depends on the performance of the
investment options you've chosen, the premium payments
you've made, policy charges and how much you've
borrowed or withdrawn from the policy.

---------------------------------------------------------
Calculating your Your policy's accumulated value is the total amount
policy's allocated to the variable investment options and the
accumulated value fixed options, plus the amount in the loan account.

Please see Taking We determine the value allocated to the variable
out a loan for investment options on any business day by multiplying
information about the number of accumulation units for each variable
loans and the loan investment option credited to your policy on that day,
account. by the variable investment option's unit value at the
end of that day. The process we use to calculate unit
values for the variable investment options is described
in Your investment options.

---------------------------------------------------------
Monthly deductions
We deduct a monthly charge from your policy's
If there is not accumulated value in the investment options each
enough accumulated monthly payment date.
value to pay the
monthly charge, Unless you tell us otherwise, we deduct the monthly
your policy could charge from the investment options that make up your
lapse. The policy's accumulated value, in proportion to the
performance of the accumulated value you have in each option. This charge
investment options is made up of three charges:
you choose, not
making planned Cost of insurance
premium payments,
or taking out a This charge covers the cost of providing you with life
loan all affect the insurance protection. Like other policy charges, we may
accumulated value profit from the cost of insurance charge and may use
of your policy. these profits for any lawful purpose such as the
payment of distribution and administrative expenses.

You'll find a
discussion about We deduct a cost of insurance charge based on the cost
when your policy of insurance rate for your policy's initial face amount
might lapse, and and for each increase you make to the face amount.
what you can do to
reinstate it, later There are maximum or guaranteed cost of insurance rates
in this section. associated with your policy. These rates are shown in
your policy's specification pages. When the person
insured by your policy reaches age 100, the guaranteed
cost of insurance rate is zero - in other words, you no
longer pay any cost of insurance.

Unisex rates are The guaranteed rates include the insurance risks
used in the state associated with insuring one person. They are
of Montana. They calculated using 1980 Commissioners Standard Ordinary
are also used when Mortality Tables or the 1980 Commissioners Ordinary
a policy is owned Mortality Table B, which are used for unisex cost of
by an employer in insurance rates. The rates are also based on the age,
connection with gender and risk class of the person insured by the
employment-related policy unless unisex rates are required.
or benefit
programs. Our current cost of insurance rates are based on the
age, risk class, smoking status and gender (unless
unisex rates are required) of the person insured by the
policy. These rates generally increase as the person's
age increases, and they vary with the number of years
the policy has been in force. Our current rates are
lower than the guaranteed rates and they will not
exceed the guaranteed rates in the future.

30
<PAGE>

Choosing a guaranteed period
Our current cost of insurance rates are not guaranteed.
You may choose a guaranteed period during which we'll
guarantee our current cost of insurance rates.

If the person insured by the policy is age 65 or
younger and in our standard risk class when the policy
is issued, you may choose a ten-year guaranteed period.
If the person insured by the policy is older than 65,
or is not in our standard risk class, you may choose a
five-year guaranteed period. You can only do this when
the policy is issued and you cannot change the
guaranteed period later.

If you increase the face amount, the cost of insurance
rates associated with the increase will have the same
five-year or ten-year guaranteed period that you chose
when the policy was issued. This will be effective on
the day of the increase. However, if the person insured
by the policy is older than age 65 or no longer
qualifies for our standard risk class on the day of the
increase, you'll receive the five-year guaranteed
period.

There is no charge for choosing a guaranteed period.

---------------------------------------------------------
If you add an How we calculate cost of insurance
annual renewable
term or accounting We calculate cost of insurance by multiplying the
benefit rider to current cost of insurance rate by a discounted net
your policy, we amount at risk at the beginning of each policy month.
will include the
face amount of the Net amount at risk for the cost of insurance
rider in this calculation is the difference between a discounted
calculation of cost death benefit that would be payable if the person
of insurance. insured by the policy died and the accumulated value of
your policy at the beginning of the policy month before
the monthly charge is due.

First, we calculate the total net amount at risk for
your policy in two steps:

. Step 1: we divide the death benefit that would be
payable at the beginning of the policy month by
1.002466.

. Step 2: we subtract your policy's accumulated value
at the beginning of the policy month from the amount
we calculated in step 1.

Next, we allocate the net amount at risk in proportion
to the face amount and each increase that's in force as
of your monthly payment date.

We then multiply the amount of each allocated net
amount at risk by the cost of insurance rate for each
coverage. The sum of these amounts is your cost of
insurance charge.

31
<PAGE>

YOUR POLICY'S ACCUMULATED VALUE

Administrative charge
We deduct a charge of $7.50 a month to help cover the
costs of administering and maintaining our policies. We
guarantee that this charge will not increase. When the
person insured by the policy reaches age 100, the
administrative charge is zero - in other words, you no
longer pay any administrative charge.

Mortality and expense risk charge
Mortality risk is the chance that the people insured by
policies we've issued do not live as long as expected.
This means the cost of insurance charges specified in
the policies may not be enough to pay out actual
claims.

Expense risk is the chance that our actual
administrative and operating expenses are more than
expenses we expected.

The mortality and expense risk charge helps compensate
us for these risks. It has two components, which are
described in the following box. We guarantee this
charge will not increase.

---------------------------------------------------------
An example How we calculate the mortality and expense risk charge

For a policy that The mortality and expense risk charge has two separate
insures a male non- charges:
smoker who is age
45 when the policy . M&E risk face amount charge We deduct a face amount
is issued, with: charge every month during the first 10 policy years,
at a rate that is based on the age of the person
insured by the policy on the policy date and on a
face amount component factor per $1,000 of the
. a face amount of initial face amount of your policy. The rates for the
$350,000 face amount component are shown in Appendix A.

. accumulated value
of $30,000 after
deducting any If you increase the face amount, each increase will
outstanding loan have a corresponding face amount charge related to the
amount. amount of the increase. We'll specify these charges in
a supplemental schedule of benefits at the time of the
The monthly charge increase. We'll apply each charge for 10 years from the
for the M&E risk day of the increase. If you decrease the face amount,
face amount charge the charge will remain the same.
is:
. M&E risk asset charge We deduct a risk asset charge
. $126.00 under every month at a guaranteed maximum annual rate of
death benefit 0.45% (0.0375% monthly) on the first $25,000 of your
Option A and policy's accumulated value in the investment options
Option C plus an annual rate of 0.05% (0.0042% monthly) of the
(($350,000 / accumulated value in the investment options that
1,000) X 0.360). exceeds $25,000. We may charge a lower annual rate
for the M&E risk asset charge. For the purposes of
. $181.30 under this charge, the amount of accumulated value is
death benefit calculated on the monthly payment date before we
Option B deduct the monthly charge, but after we deduct any
(($350,000 / outstanding loan amount or allocate any new net
1,000) X 0.518). premiums, withdrawals or loans. When the person
insured by the policy reaches age 100, the annual
The monthly charge rate is 0%--in other words, you no longer pay this
for the M&E risk charge.
asset charge is
$9.58 (($25,000 x
0.0375%) plus Charges for optional riders
($5,000 x If you add any riders to your policy, we add any
0.0042%)). charges for them to your monthly charge.

Sample rates for
the M&E risk face
amount charge
appear in
Appendix A.

32
<PAGE>

---------------------------------------------------------
Lapsing and Your policy will lapse if there is not enough
reinstatement accumulated value, after subtracting any outstanding
loan amount, to cover the monthly charge on the day we
make the deduction. Your policy's accumulated value is
affected by the following:

. loans or withdrawals you make from your policy

. not making planned premium payments

. the performance of your investment options

. charges under the policy.

There is no guarantee that your policy will not lapse
even if you pay your planned periodic premium.

If there is not enough accumulated value to pay the
total monthly charge, we deduct the amount that's
available and send you, and anyone you've assigned your
policy to, a notice telling you the minimum amount you
have to pay to keep your policy in force. This minimum
amount is equal to three times the monthly charge that
was due on the monthly payment date when there was not
enough accumulated value to pay the charge.

We'll give you a grace period of 61 days from when we
send the notice to pay the required premium. Your
policy will remain in force during the grace period.

If you do not make the minimum payment

If we do not receive your payment within the grace
period, your policy will lapse with no value. This
means we'll end your life insurance coverage.

Remember to tell us If you make the minimum payment
if your payment is
a premium payment. If we receive your payment within the grace period,
Otherwise, we'll we'll allocate your net premium to the investment
treat it as a loan options you've chosen and deduct the monthly charge
repayment. from your investment options in proportion to the
accumulated value you have in each option.

If your policy is in danger of lapsing and you have an
outstanding loan amount, you may find that making the
minimum payment would cause the total premiums paid to
exceed the maximum amount for your policy's face amount
under tax laws. In that situation, we will not accept
the portion of your payment that would exceed the
maximum amount. To stop your policy from lapsing,
you'll have to repay a portion of your outstanding loan
amount.

How to avoid future lapsing

To stop your policy from lapsing in the future, you may
want to make larger or more frequent premium payments
if tax laws permit it. Or if you have a loan, you may
want to repay a portion of it.

Paying death benefit proceeds during the grace period

If the person insured by the policy dies during the
grace period, we'll pay death benefit proceeds to your
beneficiary. We'll reduce the payment by any unpaid
monthly charges and any outstanding loan amount.

33
<PAGE>

YOUR POLICY'S ACCUMULATED VALUE

Reinstating a lapsed policy

If your policy lapses, you have five years from the end
of the grace period to apply for a reinstatement. We'll
reinstate it if you send us the following:

. a written application

. evidence satisfactory to us that the person insured
by the policy is still insurable

. a premium payment sufficient to keep your policy in
force for three months after the day your policy is
reinstated

. payment of all unpaid monthly charges that were due
in the grace period.

We'll reinstate your policy as of the first monthly
payment date on or after the day we approve the
reinstatement. When we reinstate your policy, its
accumulated value will be the same as it was on the day
your policy lapsed. We'll allocate it according to your
most recent premium allocation instructions.

Reinstating a lapsed policy with an outstanding loan
amount

If you had an outstanding loan amount when your policy
lapsed, we will not pay or credit interest on it during
the period between the lapsing and reinstatement of
your policy. There are special rules that apply to
reinstating a policy with an outstanding loan amount:

. If we reinstate your policy on the first monthly
payment date that immediately follows the lapse,
we'll also reinstate the loan amount that was
outstanding the day your policy lapsed.

. If we reinstate your policy on any monthly payment
date other than the monthly payment date that
immediately follows the lapse, we'll deduct the
outstanding loan amount from your policy's
accumulated value. This means you will no longer have
an outstanding loan amount when your policy is
reinstated.

34
<PAGE>

YOUR INVESTMENT OPTIONS

This section tells you about the investment options
available under your policy and how they work.

You can change your We put your premium payments in our general and
premium allocation separate accounts. We own the assets in our accounts
instructions by and allocate your premiums, less any charges, to the
writing, sending a investment options you've chosen. Amounts allocated to
fax, or, if we have the fixed options are held in our general account.
your completed Amounts allocated to the variable investment options
telephone are held in our separate account.
authorization form
on file, by calling You choose your initial investment options on your
us at 1-800-800- application. If you choose more than one investment
7681. Or you can option, you must tell us the dollar amount or
ask your registered percentage you want to allocate to each option. You can
representative to change your premium allocation instructions at any
contact us. time.

You'll find The investment options you choose, and how they
information about perform, will affect your policy's accumulated value
when we allocate and may affect the death benefit. Please review the
premium payments to investment options carefully and ask your registered
your investment representative to help you choose the right ones for
options in How your goals and tolerance for risk. Make sure you
premiums work. understand any costs you may pay directly and
indirectly on your investment options because they will
affect the value of your policy.
Your policy's
accumulated value
may be allocated to
up to 20 investment
options at any one
time.

---------------------------------------------------------
Variable investment
options
You can choose from 25 variable investment options.
Variable investment Each variable investment option is set up as a variable
options are also account under our separate account and invests in a
known as variable corresponding portfolio of the Pacific Select Fund or
accounts. These the M Fund. Each portfolio invests in different
variable accounts securities and has its own investment goals, strategies
are divisions of and risks. The value of each portfolio will fluctuate
our separate with the value of the investments it holds, and returns
account. We bear are not guaranteed. Your policy's accumulated value
the direct will fluctuate depending on the investment options
operating expenses you've chosen. You bear the investment risk of any
of our separate variable investment options you choose.
account. For more
information about The following charts summarize the Pacific Select Fund
how these accounts and M Fund portfolios. You'll find detailed
work, see About descriptions of the portfolios in the Pacific Select
Pacific Life. Fund and M Fund prospectuses that accompany this
prospectus. There's no guarantee that a portfolio will
We're the achieve its investment objective. You should read both
investment adviser the fund prospectuses carefully before investing.
for the Pacific
Select Fund. We
oversee the
management of all
the fund's
portfolios, and
manage two of the
portfolios
directly. We've
retained other
portfolio managers
to manage the other
portfolios.

MFIA is the
investment adviser
for the M Fund, and
has retained other
firms to manage the
M Fund's
portfolios. MFIA
and the M Fund's
Board of Directors
oversee the
management of all
of the M Fund's
portfolios.

We are not
responsible for the
operation of the M
Fund or any of its
portfolios. We are
also not
responsible for
ensuring that the M
Fund and its
portfolios comply
with any laws that
apply.

35
<PAGE>

YOUR INVESTMENT OPTIONS

<TABLE>
<CAPTION>
PACIFIC SELECT FUND THE PORTFOLIO'S THE PORTFOLIO'S PORTFOLIO
PORTFOLIO INVESTMENT GOAL MAIN INVESTMENTS MANAGER
<S> <C> <C> <C>
Aggressive Equity Capital appreciation. Equity securities of small Alliance Capital
emerging-growth companies and Management L.P.
medium-sized companies.

Emerging Markets Long-term growth of Equity securities of companies Alliance Capital
capital. that are located in countries Management L.P.
generally regarded as "emerging
market" countries.

Diversified Research Long-term growth of Equity securities of U.S. Capital Guardian
capital. companies and securities whose Trust Company
principal markets are in the U.S.

Small-Cap Equity Growth of capital. Equity securities of smaller and Capital Guardian
(formerly called medium-sized companies. Trust Company
Growth)

International Large-Cap Long-term growth of Equity securities of non-U.S. Capital Guardian
capital. companies and securities whose Trust Company
principal markets are outside
of the U.S.

Bond and Income* Total return and income A wide range of fixed income Goldman Sachs Asset
consistent with prudent securities with varying terms to Management
investment management. maturity, with an emphasis
on long-term bonds.

Equity Capital appreciation. Equity securities of large U.S. Goldman Sachs Asset
Current income is of growth-oriented companies. Management
secondary importance.

I-Net Tollkeeper Long-term growth of Equity securities of companies Goldman Sachs Asset
capital. which use, support, or relate Management
directly or indirectly to use of
the Internet. Such companies
include those in the media,
telecommunications, and
technology sectors.

Multi-Strategy High total return. A mix of equity and fixed income J.P. Morgan
securities. Investment
Management Inc.

Equity Income Long-term growth of capital Equity securities of large and J.P. Morgan
and income. medium-sized dividend-paying U.S. Investment
companies. Management Inc.

Growth LT Long-term growth of capital Equity securities of a large Janus Capital
consistent with the number of companies of any size. Corporation
preservation of capital.

Mid-Cap Value Capital appreciation. Equity securities of medium-sized Lazard Asset
U.S. companies believed to be Management
undervalued.

Equity Index Investment results that Equity securities of companies Mercury Asset
correspond to the total that are included in the Standard Management US
return of common stocks & Poor's 500 Composite Stock
publicly traded in the U.S. Price Index.

Small-Cap Index Investment results that Equity securities of companies Mercury Asset
correspond to the total that are included in the Russell Management US
return of an index of small 2000 Small Stock Index.
capitalization companies.

REIT Current income and long- Equity securities of real estate Morgan Stanley
term capital appreciation. investment trusts. Asset Management

International Value Long-term capital Equity securities of companies of Morgan Stanley
(formerly called appreciation primarily any size located in developed Asset Management
International) through investment in countries outside of the U.S.
equity securities of
corporations domiciled in
countries other than the
U.S.

Government Securities Maximize total return Fixed income securities that are Pacific Investment
consistent with prudent issued or guaranteed by the U.S. Management Company
investment management. government, its agencies or
government-sponsored enterprises.

Managed Bond Maximize total return Medium and high-quality fixed Pacific Investment
consistent with prudent income securities with varying Management Company
investment management. terms to maturity.

Money Market Current income consistent Highest quality money market Pacific Life
with preservation of instruments believed to have
capital. limited credit risk.

High Yield Bond High level of current Fixed income securities with Pacific Life
income. lower and medium-quality credit
ratings and intermediate to long
terms to maturity.

Large-Cap Value Long-term growth of Equity securities of large U.S. Salomon Brothers
capital. Current income is companies. Asset Management
of secondary importance. Inc
</TABLE>

* The fund's board of trustees has approved a proposed reorganization of this
portfolio into the Managed Bond Portfolio, subject to the approval of the
shareholders of this portfolio. If shareholder approval is obtained, it is
expected that the reorganization will take place in the summer of 2000. If
the reorganization occurs, shareholders of this portfolio would become
shareholders of the Managed Bond Portfolio, and this Bond and Income
Portfolio would cease to exist.

36
<PAGE>

<TABLE>
<CAPTION>
M FUND THE PORTFOLIO'S THE PORTFOLIO'S PORTFOLIO
PORTFOLIO INVESTMENT GOAL MAIN INVESTMENTS MANAGER

<S> <C> <C> <C>
Brandes International Long-term capital Equity securities of foreign Brandes Investment
Equity appreciation. issuers, including common Partners, L.P.
stocks, preferred stocks and
securities that are convertible
into common stocks. Focuses on
stocks with capitalizations
of $1 billion or more

Turner Core Growth Fund Long-term capital Common stocks that show strong Turner Investment
appreciation. earnings potential and also Partners, Inc.
have reasonable valuations.

Frontier Capital Maximum capital Common stock of companies of Frontier Capital
Appreciation appreciation. all sizes with emphasis on Management Company,
stocks companies with Inc.
capitalizations of less than $3
billion.

Clifton Enhanced U.S. Above-market total return. Common stocks of U.S. companies The Clifton Group
Equity which the portfolio manager
believes have the potential for
higher rates of return than the
Standard & Poor's 500 Composite
Stock Price Index while having
risks similar to those of the
index.
</TABLE>

An example Calculating unit values
You ask us to When you choose a variable investment option, we credit
allocate $6,000 to your policy with accumulation units. The number of
the Government units we credit equals the amount we've allocated
Securities divided by the unit value of the variable account.
investment option Similarly, the number of accumulation units in your
on a business day. policy will be reduced when you make a transfer,
At the end of that withdrawal or loan from a variable investment option,
day, the unit value and when your monthly charges are deducted.
of the variable
account is $15. The value of an accumulation unit is the basis for all
We'll credit your financial transactions relating to the variable
policy with 400 investment options. We calculate the unit value for
units ($6,000 each variable account once every business day, usually
divided by $15). at or about 4:00 p.m. Eastern time.

The value of an Generally, for any transaction, we'll use the next unit
accumulation unit value calculated after we receive your written request.
is not the same as If we receive your written request before 4:00 p.m.
the value of a Eastern time, we'll use the unit value calculated as of
share in the the end of that business day. If we receive your
underlying request on or after 4:00 p.m. Eastern time, we'll use
portfolio. the unit value calculated as of the end of the next
business day.
For information
about timing of If a scheduled transaction falls on a day that is not a
transactions, see business day, we'll process it as of the end of the
M's Versatile next business day. For your monthly charge, we'll use
Product basics. the unit value calculated on your monthly payment date.
If your monthly payment date does not fall on a
business day, we'll use the unit value calculated as of
the end of the next business day.

The unit value calculation is based on the following:
. the investment performance of the underlying
portfolio
. any dividends or distributions paid by the underlying
portfolio
. any charges for any taxes that are, or may become,
associated with the operation of the variable
account.

The unit value of a variable account will change with
the value of its corresponding Pacific Select Fund or M
Fund portfolio. Changes in the unit value of a variable
account will not change the number of accumulation
units credited to your policy.

37
<PAGE>

YOUR INVESTMENT OPTIONS

A look at performance
Performance information may appear in advertisements,
sales literature, or reports to policy owners or
prospective buyers.

Information about the performance of any variable
account of the separate account reflects only the
performance of a hypothetical policy. The calculations
are based on allocating the hypothetical policy's
accumulated value to the variable account during a
particular time period.

Performance information is no guarantee of how a
variable account will perform in the future. You should
keep in mind the investment objectives and policies,
characteristics and quality of the portfolio of the
fund in which the variable account invests, and the
market conditions during the period of time that's
shown.

We may show performance information in any way that's
allowed under the law that applies to it. This may
include presenting a change in accumulated value due to
the performance of one or more variable accounts, or as
a change in a policy owner's death benefit.

We may show performance as a change in accumulated
value over time or in terms of the average annual
compounded rate of return on accumulated value. This
would be based on allocating premium payments for a
hypothetical policy to a particular variable account
over certain periods of time, including one year, or
from the day the variable account started operating. If
a portfolio has existed for longer than its
corresponding variable account, we may also show the
hypothetical returns that the variable account would
have achieved had it invested in the portfolio from the
day the portfolio started operating.

Performance may reflect the deduction of all policy
charges including premium load, the cost of insurance,
the administrative charge, and the mortality and
expense risk charge. The different death benefit
options will result in different expenses for the cost
of insurance, and the varying expenses will result in
different accumulated values.

Performance may also reflect the deduction of the
surrender charge, if it applies, by assuming the
hypothetical policy is surrendered at the end of the
particular period. At the same time, we may give other
performance figures that do not assume the policy is
surrendered and do not reflect any deduction of the
surrender charge.

In our advertisements, sales literature and reports to
policy owners, we may compare performance information
for a variable account to:

. other variable life separate accounts, mutual funds,
or investment products tracked by research firms,
ratings services, companies, publications, or persons
who rank separate accounts or investment products on
overall performance or other criteria

. the Consumer Price Index, to assess the real rate of
return from buying a policy by taking inflation into
consideration.

Reports and promotional literature may also contain our
rating or a rating of our claims-paying ability. These
ratings are set by firms that analyze and rate
insurance companies and by nationally recognized
statistical rating organizations.

Fees and expenses paid by the Pacific Select Fund and
the M Fund
You'll find more The Pacific Select Fund and the M Fund pay advisory
about Pacific fees and other expenses. These are deducted from the
Select Fund fees assets of each fund's portfolios and may vary from year
and expenses in An to year. They are not fixed and are not part of the
overview of M's terms of your policy. If you choose a variable
Versatile Product. investment option, these fees and expenses affect you
indirectly because they reduce portfolio returns. The
You'll find more Pacific Select Fund is governed by its own Board of
about M Fund fees Trustees. The M Fund is governed by its own Board of
and expenses in An Directors.
overview of M's
Versatile Product.

38
<PAGE>

---------------------------------------------------------
Fixed options
You can also choose from two fixed options: the Fixed
The fixed options account and the Fixed LT account. The fixed options
are not securities, provide a guaranteed minimum annual rate of interest.
so they do not fall The amounts allocated to the fixed options are held in
under any our general account.
securities act. For
this reason, the Here are some things you need to know about the fixed
SEC has not options:
reviewed the
disclosure in this . Accumulated value allocated to the fixed options
prospectus about earns interest on a daily basis, using a 365-day
these options. year. Our minimum annual interest rate is 3%.
However, other
federal securities . We may offer a higher annual interest rate on the
laws may apply to fixed options. If we do, we'll guarantee the higher
the accuracy and rate for one year.
completeness of the
disclosure about . There are no investment risks.
these options.
. There are limitations on when and how much you can
transfer from the fixed options. These limitations
are described below, in Transferring among investment
options.
For more
information about . We may limit the total amount you allocate to the
the general Fixed LT account for all Pacific Life policies you
account, see About own to $1,000,000 in any 12-month period, and
Pacific Life. transfer any amount over $1,000,000 to your other
investment options according to your most recent
instructions. We may increase the $1,000,000 limit at
any time at our sole discretion. You should contact
us to find out if a higher limit is in effect.

---------------------------------------------------------
Transferring among You can transfer among your investment options any time
investment options during the life of your policy without triggering any
current income tax. You can make transfers by writing
If your state to us, by making a telephone transfer, or by signing up
requires us to for one of our automatic transfer programs. You'll find
refund your more information about making telephone transfers in
premiums when you M's Versatile Product basics.
exercise your right
to cancel, you can Transfers will normally be effective as of the end of
make transfers and the business day we receive your written or telephone
use transfer request.
programs only after
the free look Here are some things you need to know about making
transfer date. For transfers:
more information,
please see M's . Your policy's accumulated value may be invested in up
Versatile Product to 20 investment options at one time.
basics.
. If you're making transfers between variable
investment options, there is no minimum amount
required and you can make as many transfers as you
If you live in like.
Connecticut,
Georgia, Maryland, . You can make transfers from the variable investment
North Carolina, options to the fixed options only in the policy month
North Dakota, or right before each policy anniversary.
Pennsylvania, you
can make transfers . You can only make one transfer from each fixed option
to the fixed in any 12-month period, except if you've signed up
options any time for the first year transfer program.
during the first 18
months of your . You can only transfer up to the greater of $5,000 or
policy. 25% of your policy's accumulated value in the Fixed
account in any 12-month period, except for scheduled
You'll find more transfers under the first year transfer program.
about the first
year transfer . You can only transfer up to the greater of $5,000 or
program later in 10% of your policy's accumulated value in the Fixed
this section. LT account in any 12-month period.

. Currently, there is no charge for making a transfer
but we may charge you in the future.

39
<PAGE>

YOUR INVESTMENT OPTIONS

. There is no minimum required value for the investment
option you're transferring to or from.
. You cannot make a transfer if your policy is in the
grace period and is in danger of lapsing.
. We can restrict or suspend transfers.
. We may choose to impose limits on transfer amounts,
the value of the investment options you're
transferring to or from, or the number and frequency
of transfers you can make.

---------------------------------------------------------
Transfer programs We offer three programs that allow you to make
automatic transfers of accumulated value from one
investment option to another. Under the dollar cost
averaging and portfolio rebalancing programs, you can
transfer among the variable investment options. Under
the first year transfer program, you can make transfers
from the Fixed account to the Fixed LT account and the
variable investment options.

Since the value of Dollar cost averaging program
accumulation units Our dollar cost averaging program allows you to make
can change, more scheduled transfers of $50 or more between variable
units are credited investment options without paying a transfer fee. It
for a scheduled does not allow you to make transfers to or from either
transfer when unit of the fixed options. Here's how the program works:
values are lower,
and fewer units . You can set up this program at any time while your
when unit values policy is in force.
are higher. This . You need to complete a request form to enroll in the
allows you to program.
average the cost of . You must have at least $5,000 in a variable
investments over investment option to start the program.
time. Investing . We'll automatically transfer accumulated value from
this way does not one variable investment option to one or more of the
guarantee profits other variable investment options you've selected.
or prevent losses.
. We'll process transfers as of the end of the business
day on your policy's monthly, quarterly, semi-annual
or annual anniversary, depending on the interval
you've chosen. We will not make the first transfer
until after the free look transfer date in states
that require us to return your premiums if you
exercise your right to cancel your policy.
. We will not charge you for the dollar cost averaging
program or for transfers made under this program,
even if we decide to charge you in the future for
transfers outside of the program, except if we have
to by law.
. We have the right to discontinue, modify or suspend
the program at any time.
. We'll keep making transfers at the intervals you've
chosen until one of the following happens:
. the total amount you've asked us to transfer has
been transferred
. there is no more accumulated value in the
investment option you're transferring from
. your policy enters the grace period and is in
danger of lapsing
. you tell us in writing to cancel the program
. we discontinue the program.

40
<PAGE>

Because the Portfolio rebalancing program
portfolio As the value of the underlying portfolios changes, the
rebalancing program value of the allocations to the variable investment
matches your options will also change. The portfolio rebalancing
original percentage program automatically transfers your policy's
allocations, we may accumulated value among the variable investment options
transfer money from according to your original percentage allocations.
an investment
option with Here's how the program works:
relatively higher . You can set up this program at any time while your
returns to one with policy is in force.
relatively lower . You enroll in the program by sending us a written
returns. signed request or a completed automatic rebalancing
form.
. Your first rebalancing will take place on the monthly
payment date you choose. You choose whether we should
make transfers quarterly, semi-annually or annually,
based on your policy date.
. If you cancel this program, you must wait 30 days to
begin it again.
. You cannot use this program if you're already using
the dollar cost averaging program.
. We do not currently charge for the portfolio
rebalancing program or for transfers made under this
program.
. We can discontinue, suspend or change the program at
any time.

This program allows First year transfer program
you to average the Our first year transfer program allows you to make
cost of investments monthly transfers during the first policy year from the
over your first Fixed account to the variable investment options or the
policy year. Fixed LT account. It does not allow you to transfer
Investing this way among variable investment options.
does not guarantee
profits or prevent Here's how the program works:
losses. . You enroll in the program when you apply for your
policy.
. You choose a regular amount to be transferred every
month for 12 months.
. We make the first transfer on the day we allocate
your first premium to the investment options you've
chosen. Each transfer will be made on the same day
every month.
. If you sign up for this program, we'll waive the
usual transfer limit for the Fixed account during the
first policy year.
. If we make the last transfer during the second policy
year, we will not count it toward the usual one
transfer per year limit for the Fixed account.
. If the accumulated value in the Fixed account is less
than the amount to be transferred, we'll transfer the
balance and then cancel the program.
. If there is accumulated value remaining in the Fixed
account at the end of the program, our usual rules
for the fixed account will apply.
. We do not currently charge for the first year
transfer program or for transfers made under this
program.

41
<PAGE>

WITHDRAWALS, SURRENDERS AND LOANS

You can take out all or part of your policy's
Making a accumulated value while your policy is in force by
withdrawal, taking making withdrawals or surrendering your policy. You can
out a loan or take out a loan from us using your policy as security.
surrendering your You can also use your policy's loan and withdrawal
policy can change features to supplement your income, for example, during
your policy's tax retirement.
status, generate
taxable income, or
make your policy
more susceptible to
lapsing. Be sure to
plan carefully
before using these
policy benefits.

If you withdraw a
larger amount than
you've paid into
your policy, your
withdrawal may be
considered taxable
income.

For more
information, see
Variable life
insurance and your
taxes.
---------------------------------------------------------
Making withdrawals You can withdraw part of your policy's net cash
surrender value starting on your policy's first
You can choose to anniversary. Here's how it works:
receive your
withdrawal in a . You must send us a written request that's signed by
lump sum or use it all owners.
to buy an income . Each withdrawal must be at least $200, and the net
benefit. Please see cash surrender value of your policy after the
the discussion withdrawal must be at least $500.
about income
benefits in General . If your policy has an outstanding loan amount, the
information about maximum withdrawal you can take is the amount, if
your policy. any, by which the cash surrender value just before
the withdrawal exceeds the outstanding loan amount
divided by 90%.

We will not accept
your request to . We'll charge you $25 for each withdrawal you make.
make a withdrawal
if it will cause . If you do not tell us which investment options to
your policy to take the withdrawal from, we'll deduct the withdrawal
become a modified and the withdrawal charge from all of your investment
endowment contract, options in proportion to the accumulated value you
unless you've told have in each option.
us in writing that
you want your . The accumulated value, cash surrender value and net
policy to become a cash surrender value of your policy will be reduced
modified endowment by the amount of each withdrawal.
contract.
. If the person insured under the policy dies after
you've sent a withdrawal request to us, but before
we've made the withdrawal, we'll deduct the amount of
the withdrawal from any death benefit proceeds owing.

How withdrawals affect your policy's death benefit
Making a withdrawal will affect your policy's death
benefit in the following ways:
. if your policy's death benefit does not equal the
guideline minimum death benefit, the death benefit
will decrease by the amount of your withdrawal.
. if your policy's death benefit equals the guideline
minimum death benefit, the death benefit may decrease
by more than the amount of your withdrawal.

How withdrawals affect your policy's face amount
If you've chosen death benefit Option B or Option C,
making a withdrawal does not reduce your policy's face
amount.

If you've chosen death benefit Option A, a withdrawal
may reduce your face amount. You can make one
withdrawal during each of the first 15 policy years of
up to 10% of the total premium payments you've made
without reducing your policy's face amount. If you
withdraw a larger amount, or make additional
withdrawals, the face amount will be reduced by the
amount, if any, by which the face amount exceeds the
death benefit immediately before the withdrawal, minus
the amount of the withdrawal.

42
<PAGE>

---------------------------------------------------------
Taking out a loan
You can borrow money from us any time while your policy
The amount in the is in force either by sending us a request in writing,
loan account, plus or over the telephone. You'll find more information
any interest you about requesting a loan by telephone in M's Versatile
owe, is referred to Product basics.
throughout this
prospectus as your When you borrow money from us, we use your policy's
outstanding loan accumulated value as security. You pay interest on the
amount. Your policy amount you borrow. The accumulated value set aside to
refers to this secure your loan also earns interest. Here's how it
amount as policy works:
debt.

Taking out a loan . To secure the loan, we transfer an amount equal to
will affect the the amount you're borrowing from your accumulated
growth of your value in the investment options to the loan account.
policy's We'll transfer this amount from your investment
accumulated value, options in proportion to the accumulated value you
and may affect the have in each option, unless you tell us otherwise.
death benefit. . Interest owing on the amount you've borrowed accrues
daily at an annual rate of 3.25%. Interest that has
accrued during the policy year is due on your policy
An example anniversary. If you do not pay the interest when it's
For a policy in due, we'll add it to the amount of your loan and
policy year 5 with: begin accruing interest on it from the day it was
. accumulated value due. We'll also transfer an amount equal to the
of $100,000 interest that was due, from your policy's accumulated
. an outstanding value to the loan account. We'll transfer this amount
loan amount of from your investment options in proportion to the
$60,000 accumulated value you have in each option, unless you
. a most recent tell us otherwise.
monthly charge of
$225 . The amount in the loan account earns interest daily
at an annual rate of 3.0%. On your policy
The maximum amount anniversary, we transfer the interest that's been
you can borrow is credited to the loan account proportionately to your
the greater of: investment options according to your most recent
allocation instructions.
$25,500 ((90% X
($100,000 - How much you can borrow
$5,000)) - $60,000) The minimum amount you can borrow is $200, unless there
are other restrictions in your state. You can borrow up
or to the larger of the following amounts:

$32,076.51 . 90% of the accumulated value in the investment
(a X (b / c)) - d, options, less any surrender charges that would apply
where: if you surrendered your policy on the day you took
a = $92,300 out the loan.
($100,000 - . the result of a X (b / c) - d, where:
$5,000 - ($12 X a = the accumulated value of your policy less any
$225)) surrender charges that would have applied if you
surrendered your policy on the day you took out
b = 1.03 the loan, and less 12 times the most recent
c = 1.0325 monthly charge

d = $60,000 b = 1.03
c = 1.0325
d = any outstanding loan amount.

Paying off your loan
You can pay off all or part of the loan any time while
your policy is in force. Unless you tell us otherwise,
we'll generally transfer any loan payments you make
proportionately to your investment options according to
your most recent allocation instructions. We may,
however, first transfer any loan payments you make to
the fixed options, up to the amount originally
transferred from the fixed options to the loan account.
We'll then transfer any excess amount to your variable
investment options according to your most recent
allocation instructions.

While you have an outstanding loan, we'll treat any
money you send us as a loan payment unless you tell us
otherwise in writing.

43
<PAGE>

WITHDRAWALS, SURRENDERS AND LOANS

Your outstanding What happens if you do not pay off your loan
loan amount could If you do not pay off your loan, we'll deduct the
result in taxable amount in the loan account, including any interest you
income if you owe, from one of the following:
surrender your
policy, if your . the death benefit proceeds before we pay them to your
policy lapses, or beneficiary
if your policy is a
modified endowment . the cash surrender value if you surrender your policy
contract. You
should talk to your . the amount we refund if you exercise your right to
tax advisor before cancel.
taking out a loan
under your policy. Taking out a loan, whether or not you repay it, will
See Taking out a have a permanent effect on the value of your policy.
loan in Variable For example, while your policy's accumulated value is
life insurance and held in the loan account, it will miss out on the
your taxes. potential earnings available through the variable
investment options. The amount of interest you earn on
the loan account may be less than the amount of
interest you would have earned from the fixed options.
These could lower your policy's accumulated value,
which could reduce the amount of the death benefit.

When a loan is outstanding, the amount in the loan
account is not available to help pay for any policy
charges. If, after deducting your outstanding loan
amount, there is not enough accumulated value in your
policy to cover the policy charges, your policy could
lapse. You may need to make additional premium payments
or loan repayments to prevent your policy from lapsing.
---------------------------------------------------------

You can use your policy's loan and withdrawal features
Ways to use your to supplement your income, for example, during
policy's loan and retirement.
withdrawal features
Using your policy to supplement your income does not
If you're change your rights or our obligations under the policy.
interested in using The terms for loans and withdrawals described in this
your life insurance prospectus remain the same.
policy to
supplement your Here are some things you should consider when setting
retirement income, up an income stream:
please contact us
for more . the rate of return you expect to earn on your
information. investment options

We can provide you . how long you would like to receive regular income
with illustrations
that give you . the amount of accumulated value you want to maintain
examples of how in your policy.
this could affect
the accumulated Understanding the risks
value, net cash Setting up an income stream may not be suitable for all
surrender value and policy owners. It's important to understand the risks
death benefit of that are involved in using your policy's loan and
your policy based withdrawal features.
on different
hypothetical gross You must always leave enough accumulated value in your
rates of return. We policy to help ensure your policy will continue to
will not use a qualify as life insurance and will not lapse. Your
higher rate than policy will lapse if there is not enough accumulated
12%, and will value, after subtracting any outstanding loan amount,
always compare it to cover the monthly charge on the day we make the
with a rate of 0% deduction and the grace period expires. If your policy
based on guaranteed lapses, we'll end your life insurance coverage.
insurance costs.
There are also charges associated with reinstating a
The hypothetical lapsed policy.
rates of return are
illustrative of You should consult with your financial adviser and
past or future carefully consider how much you can withdraw and borrow
results. Policy from your policy each year to set up your income
values and benefits stream.
would be different
from those shown in Remember that the performance of your investment
the illustrations options also affects your policy's accumulated value.
if: Poor performance can increase the danger of your policy
lapsing. And as the cost of insurance generally
. the gross annual increases with the age of the person insured by the
rates of return policy, this can also reduce the accumulated value.
are different
from the
hypothetical
rates
. premiums were not
paid as
illustrated
. loan interest was
paid when due.

44
<PAGE>

You can also ask In addition, you should carefully review the policy
for accompanying statements we send you. Your statements will allow you
charts and graphs to monitor your policy's accumulated value, less your
that compare outstanding loan amount, to ensure your policy can
results from continue to support the income stream you have chosen.
various retirement
strategies. If your policy lapses or you surrender your policy
after you have taken out a loan, you could face
You can ask your significant income tax liability in the year of the
registered lapse or surrender. Any outstanding loan amount will
representative for automatically be repaid when your policy lapses or you
illustrations surrender your policy. You could be taxed to the extent
showing how policy that the net surrender value plus the outstanding loan
charges may affect amount repaid exceeds the cost basis of your policy.
existing
accumulated value Interest on a loan is due to us on each policy
and how future anniversary. If we do not receive the interest when
withdrawals and due, we'll add it to the outstanding loan amount and
loans may affect begins accruing interest on it from the day it was due.
the accumulated This has a compounding effect and can add to your
value and death income tax liability.
benefit.
If the person insured by the policy dies, we'll deduct
Tax issues are any outstanding loan amount from the death benefit.
described in detail This means the death benefit proceeds will be less than
in Variable the death benefit and may be less than the face amount.
insurance and your
taxes.

---------------------------------------------------------
Surrendering your
policy
You can surrender or cash in your policy at any time
You can choose to while the person insured by the policy is still living.
receive your money Your policy's cash surrender value is its accumulated
in a lump sum or value less any surrender charge that applies. The net
use it to buy an cash surrender value equals your policy's cash
income benefit. surrender value after deducting any outstanding loan
Please see the amount.
discussion about
income benefits in Here are some things you need to know about
General information surrendering your policy:
about your policy. . You must send us your policy and a written request.
. We'll send you the policy's net cash surrender value.
If you surrender your policy during the first 10
If you increase policy years, we'll deduct a surrender charge that
your policy's face helps cover our costs for underwriting, issuing and
amount, we'll send distributing our policies.
you a supplemental
schedule of . Your policy's surrender charge is based on the
benefits that initial face amount of your policy and will never be
shows the greater than the maximum surrender charge. The
surrender charge maximum surrender charge is calculated at a rate that
associated with is based on the age and risk class of the person
the increase. insured by the policy, and each $1,000 of initial
face amount.
. There's no surrender charge on the initial face
amount after 10 policy years.
. We guarantee the surrender charge rates will not
increase.
. If you increase your policy's face amount, each
increase has a surrender charge and maximum surrender
charge, based on the amount of the increase, for
10 years.
. If you decrease the face amount, the decrease will
not affect your policy's surrender charge or maximum
surrender charge.

45
<PAGE>

WITHDRAWALS, SURRENDERS AND LOANS

---------------------------------------------------------
Sample rates for How we calculate the surrender charge
the surrender The surrender charge is assessed against your policy's
charge appear in accumulated value. They are based on the age and risk
Appendix B. class of the person insured by the policy, as well as
the death benefit option you choose, for each $1,000 of
An example the initial face amount of your policy.
For a policy:
. that insures a The amount of the surrender charge does not change
male non-smoker during the first policy month. We reduce the charge by
who is age 45 0.8403% each month until it reaches zero at the end of
when the policy 10 policy years.
is issued
. with an initial
face amount of
$350,000.
The maximum surrender charge on the initial face amount
For death benefit of your policy will never be more than $6.00 per $1,000
Option A and of initial face amount.
Option C, the
surrender charge
is:

. $724.50 at issue
(($350,000 /
$1,000) X 2.07)
. $219.19 at the
end of the
seventh policy
year ($724.50 -
($724.50 X .8403%
X 83 months))

For death benefit
Option B, the
surrender charge
is:

. $1,029.00 at
issue (($350,000
/ $1,000) X 2.94)
. $311.32 at the
end of the
seventh policy
year ($1,029.00 -
($1,029.00 X
.8403% X 83
months))

46
<PAGE>

GENERAL INFORMATION ABOUT YOUR POLICY

This section tells you some additional things you
should know about your policy.

---------------------------------------------------------
Income benefit If you surrender or make a withdrawal from your policy,
you can use the money to buy an income benefit that
provides a monthly income. Your policy's beneficiary
can use death benefit proceeds to buy an income
benefit. In addition to the income benefit described
below, you can choose from other income benefits we may
make available from time to time.

The following is one income benefit available under the
M's Versatile Product policy:

. The income benefit is based on the life of the person
receiving the income. If the policy owner is buying
the income benefit, monthly income will be based on
the owner's life. If the policy's beneficiary buys
the income benefit, monthly income will be based on
the beneficiary's life.
. We'll pay a monthly income for at least 10 years
regardless of whether the person receiving the income
is still alive.
. After 10 years, we'll only pay the monthly income for
as long as the person receiving it is still alive.
. The minimum monthly income benefit calculated must be
at least $100.
. For this income benefit, the amount you receive will
always be at least as much as the amount guaranteed
by your policy.

---------------------------------------------------------
Substituting the Starting on your policy's first anniversary, you can
person insured by apply to substitute the person insured by your policy.
your policy You must apply in writing and we must receive
satisfactory evidence of insurability of the new person
If you substitute to be insured by the policy. You can only add riders on
the person insured the new person insured by the policy if we approve the
by the policy, addition of the riders.
we'll send you a
revised schedule of The substitution will become effective on the first
benefits. monthly payment date after we approve your request. We
may have to adjust the face amount, accumulated value,
surrender charge and policy charges to reflect the
substitution.

We can refuse your request to substitute if, among
other reasons:

. we would be required to end the policy in order to
comply with new guideline premium limits under tax
law
. we would be required to make distributions from your
policy's accumulated value that are greater than the
net cash surrender value.

47
<PAGE>

GENERAL INFORMATION ABOUT YOUR POLICY

---------------------------------------------------------
Paying the death If the person insured by the policy, whether sane or
benefit in the case insane, commits suicide within two years of the policy
of suicide date, death benefit proceeds will be the total of all
premiums you've paid, less any outstanding loan amount
and any withdrawals you've made.

If you've substituted the person insured by the policy
and that person, whether sane or insane, commits
suicide within two years of the day the substitution
was made, we'll calculate death benefit proceeds
differently. Proceeds will be limited to the net cash
surrender value of your policy as of the day the
substitution was made, less any increase in any
outstanding loan amount, any withdrawals you've made,
and any dividends we've paid in cash, since the day the
substitution was made.

---------------------------------------------------------
Replacement of life The term replacement has a special meaning in the life
insurance or insurance industry. Before you make a decision to buy,
annuities we want you to understand what impact a replacement may
have on your existing insurance policy.

A replacement occurs when you buy a new life insurance
policy or annuity contract, and a policy or contract
you already own has been or will be:

. lapsed, forfeited, surrendered or partially
surrendered, assigned to the replacing insurer, or
otherwise terminated
. converted to reduced paid-up insurance, continued as
extended term insurance, or otherwise reduced in
value by the use of nonforfeiture benefits or other
policy values
. amended to effect either a reduction in benefits or
in the term for which coverage would otherwise remain
in force or for which benefits would be paid
. reissued with any reduction in cash value, or
. pledged as collateral or subject to borrowing,
whether in a single loan or under a schedule of
borrowing over a period of time.

There are circumstances when replacing your existing
life insurance policy or annuity contract can benefit
you. As a general rule, however, replacement is not in
your best interest. You should carefully compare the
costs and benefits of your existing policy or contract
with those of the new policy or contract to determine
whether replacement is in your best interest.

---------------------------------------------------------
Errors on your
application
If the age or gender of the person insured by your
If unisex cost of policy is stated incorrectly on your application, the
insurance rates death benefit under your policy will be the greater of
apply to your the following:
policy, we will not
adjust the face . the amount of death benefit that would be purchased
amount if we by the most recent cost of insurance charge for the
discover that correct age and gender or
gender has been . the guideline minimum death benefit for the correct
stated incorrectly age and gender.
on your
application. We'll adjust the accumulated value by recalculating all
previous cost of insurance charges and other monthly
deductions based on the correct age and gender.

48
<PAGE>

---------------------------------------------------------
Contesting the We have the right to contest the validity of your
validity policy for two years from the policy date. Once your
of your policy policy has been in force for two years from the policy
date during the lifetime of the person insured by the
policy, we generally lose the right to contest its
validity.

We also have the right to contest the validity of a
policy that you reinstate for two years from the day
that it was reinstated. Once your reinstated policy has
been in force for two years from the reinstatement date
during the lifetime of the person insured by the
policy, we generally lose the right to contest its
validity. During this period, we may contest your
policy only if there is a material misrepresentation on
your application for reinstatement.

We have the right to contest the validity of an
increase in the face amount of a policy for two years
from the day the increase becomes effective. Once the
increased face amount has been in force for two years
during the lifetime of the person insured by the
policy, we generally lose the right to contest its
validity.

We also have the right to contest the validity of a
policy if there has been a substitution to the person
insured by the policy. We can contest a policy's
validity for two years from the day the substitution
becomes effective. Once the substitution has been in
force for two years during the lifetime of the person
insured by the policy, we generally lose the right to
contest its validity.

Regardless of the above, we can contest the validity of
your policy for failure to pay premiums at any time.
The policy will terminate upon successful contest with
respect to the person insured by the policy.

---------------------------------------------------------
Assigning your
policy as
collateral
You can assign your policy as collateral to secure a
Assigning a policy loan, mortgage, or other kind of debt. Here's how it
that's a modified works:
endowment contract
may generate . An assignment does not change the ownership of the
taxable income and policy.
a 10% penalty tax. . After the policy has been assigned, your rights and
the rights of your beneficiary will be subject to the
assignment. The entire policy, including any income
benefit, rider, benefit and endorsement, will also be
subject to the assignment.
. We're not responsible for the validity of any
assignment.
. We must receive and record a copy of the original
assignment in a form that's acceptable to us before
we'll consider it binding.
. Unless otherwise provided, the person or organization
you assign your policy to may exercise the rights
under the policy, except the right to change the
policy owner or the beneficiary or the right to
choose a monthly income benefit.

---------------------------------------------------------
Non-participating This policy will not share in any of our surplus
earnings.

49
<PAGE>

VARIABLE LIFE INSURANCE AND YOUR TAXES

This discussion about taxes is based on our
understanding of the present federal income tax laws as
they are currently interpreted by the Internal Revenue
Service (IRS). It's based on the Internal Revenue Code
of (the tax code) and does not cover any state or local
tax laws.

The tax This is not a complete discussion of all federal income
consequences of tax questions that may arise under the policy. There
owning a policy or are special rules that we do not include here that may
receiving proceeds apply in certain situations.
from it may vary by
jurisdiction and We do not know whether the current treatment of life
according to the insurance policies under current federal income tax or
circumstances of estate or gift tax laws will continue. We also do not
each owner or know whether the current interpretations of the laws by
beneficiary. the IRS or the courts will remain the same. Future
legislation may adversely change the tax treatment of
Speak to a life insurance policies, other tax consequences
qualified tax described in this discussion or tax consequences that
adviser for relate directly or indirectly to life insurance
complete policies.
information about
federal, state and We do not make any guarantees about the tax status of
local taxes that your policy, and you should not consider the discussion
may apply to you. that follows to be tax advice.

---------------------------------------------------------
Tax treatment of Definition of life insurance
life insurance We believe that the policy qualifies as life insurance.
policies That means it will receive the same tax advantages as a
conventional fixed life insurance policy. The two main
In order to qualify tax advantages are:
as a life insurance
contract for . In general, your policy's beneficiary will not be
federal income tax subject to federal income tax when he or she receives
purposes, the the death benefit proceeds. This is true regardless
policy must meet of whether the beneficiary is an individual,
the statutory corporation, or other entity.
definition of life . You'll generally not be taxed on any or all of your
insurance. policy's accumulated value unless you receive a cash
distribution by making a withdrawal, surrendering
Death benefits may your policy, or in some instances, taking a loan from
be excluded from your policy.
income under
Section 101(a) of The tax laws defining life insurance, however, do not
the tax code. cover all policy features. Your policy may have
features that could prevent it from qualifying as life
insurance. For example, the tax laws have yet to
address many issues concerning the treatment of
substandard risk policies and policies with term
insurance on the person insured by the policy. We can
make changes to your policy if we believe the changes
are needed to ensure that your policy continues to
qualify as a life insurance contract.

The tax code and tax regulations impose limitations on
unreasonable mortality and expense charges for purposes
of determining whether a policy qualifies as life
insurance for federal tax purposes. For life insurance
policies entered into on or after October 21, 1988,
these calculations must be based upon reasonable
mortality charges and other charges reasonably expected
to be actually paid.

50
<PAGE>

The Treasury Department has issued proposed regulations
about reasonable standards for mortality charges. While
we believe that our mortality costs and other expenses
used in calculating whether the policy qualifies as
life insurance are reasonable under current laws, we
cannot be sure that the IRS agrees with us. We can
change our mortality charges if we believe the changes
are needed to ensure that your policy qualifies as a
life insurance contract.

Section 817(h) of Diversification rules and ownership of the separate
the tax code account
describes the Your policy will not qualify for the tax benefit of a
diversification life insurance contract unless the separate account
rules. follows certain rules requiring diversification of
investments underlying the policy. In addition, the IRS
For more requires that the policyholder does not have control
information about over the underlying assets.
diversification
rules, please see The Treasury Department has announced that the
Managing the diversification rules "do not provide guidance
Pacific Select Fund concerning the circumstances in which it will treat an
in the accompanying investor, rather than the insurance company, as the
Pacific Select Fund owner of the assets in a separate account." The IRS
prospectus and treats a variable policy owner as the owner of separate
Distributions and account assets if he or she has the ability to exercise
Taxes in the investment control over them. Owners of the assets are
accompanying M Fund taxed on any income or gains the assets generate.
prospectus. Although the Treasury Department announced it would
provide further guidance on the issue, it had not done
so when we wrote this prospectus.

The ownership rights under your policy are similar to,
but different in certain respects from, those described
by the IRS in rulings in which it was determined that
policyowners were not owners of separate account
assets. Since you have greater flexibility in
allocating premiums and policy values than was the case
in those rulings, it is possible the IRS would treat
you as the owner of your policy's proportionate share
of the assets of the separate account.

We do not know what will be in future Treasury
Department regulations. We cannot guarantee that the
portfolios of the Pacific Select Fund or the M Fund
will be able to operate as currently described in the
prospectus, or that either of the funds will not have
to change any portfolio's investment objective or
policies. We can modify your policy if we believe it
will prevent you from being considered the owner of
your policy's proportionate share of the assets of the
separate account.

Policy exchanges Policy exchanges
fall under Section
1035(a) of the tax If you exchange your policy for another one that
code. insures the same person, it generally will be treated
as a tax-free exchange and, if so, will not result in
the recognition of gain or loss. If the person insured
by the policy is changed, the exchange will be treated
as a taxable exchange.

Change of ownership
You may have taxable income if you transfer ownership
of your policy, sell your policy, or change the
ownership of it in any way.

There are special Corporate owners
rules for There are special tax issues for corporate owners:
corporate-owned
policies. You . using your policy to fund deferred compensation
should consult your arrangements for employees has special tax
tax adviser. consequences
. corporate ownership of a policy may affect your
exposure to the alternative minimum tax and the
Section 59A of the environmental tax.
tax code deals with
the environmental
tax.

51
<PAGE>

VARIABLE LIFE INSURANCE AND YOUR TAXES

---------------------------------------------------------
Conventional life The tax treatment of your policy will depend upon
insurance policies whether it is a type of contract known as a modified
endowment contract. We describe modified endowment
Under Section 7702A contracts later in this section. If your policy is not
of the tax code, a modified endowment contract, it will be treated as a
policies that are conventional life insurance policy and will have the
not classified as following tax treatment:
modified endowment
contracts are taxed Surrendering your policy
as conventional When you surrender, or cash in, your policy, you'll
life insurance generally be taxed on the difference, if any, between
policies. the cash surrender value and the cost basis in your
policy.
The cost basis in
your policy is Making a withdrawal
generally the If you make a withdrawal after your policy has been in
premiums you've force for 15 years, you'll only be taxed on the amount
paid plus any you withdraw that exceeds the cost basis in the policy.
taxable
distributions less Special rules apply if you make a withdrawal within the
any withdrawals or first 15 policy years and it's accompanied by a
premiums previously reduction in benefits. In this case, there is a special
recovered that were formula under which you may be taxed on all or a
not taxable. portion of the withdrawal amount.

Taking out a loan
If you take out a loan, you will not pay tax on the
loan amount unless your policy is surrendered or lapses
and you have not repaid your outstanding loan amount.
The interest you pay, or that's accrued, on a loan is
generally nondeductible. Ask your tax adviser for more
information.

Loans and corporate-owned policies
If you borrow money to buy or carry certain life
insurance policies, tax law provisions may limit the
deduction of interest payable on loan proceeds. If the
taxpayer is an entity that's a direct or indirect
beneficiary of certain life insurance, endowment or
annuity contracts, a portion of the entity's deductions
for loan interest may be disallowed, even though this
interest may relate to debt that's completely unrelated
to the contract. There may be a limited exception that
applies to contracts issued on 20% owners, officers,
directors or employees of the entity. For more
information about this exception, you should consult
your tax adviser.

---------------------------------------------------------
Modified endowment A modified endowment contract is a special type of life
contracts insurance policy. If your policy is a modified
endowment contract, it will have the tax treatment
Section 7702A of described below. Any distributions you receive during
the tax code the life of the policy are treated differently than
defines a class of under conventional life insurance policies.
life insurance Withdrawals, loans, pledges, assignments and the
policies known as surrender of your policy are all considered
modified endowment distributions and may be subject to tax on an income-
contracts. Like first basis and a 10% penalty.
other life
insurance policies, When a policy becomes a modified endowment contract
the death benefit A life insurance policy becomes a modified endowment
proceeds paid to contract if, at any time during the first seven policy
your beneficiary years, the sum of actual premiums paid exceeds the
generally are not seven-pay limit. The seven-pay limit is the cumulative
subject to federal total of the level annual premiums (or seven-pay
income tax and your premiums) required to pay for the policy's future death
policy's and endowment benefits.
accumulated value
grows on a tax-
deferred basis
until you receive a
cash distribution.

If there is a
material change to
your policy, like a
change in the death
benefit, we may
have to retest your
policy and restart
the seven-pay
premium period to
determine whether
the change has
caused the policy
to become a
modified endowment
contract.

52
<PAGE>

For example, if the seven-pay premiums were $1,000 a
year, the maximum premiums you could pay during the
first seven years to avoid modified endowment treatment
would be $1,000 in the first year, $2,000 through the
first two years and $3,000 through the first three
years, etc. Under this test, an M's Versatile Product
policy may or may not be a modified endowment contract,
depending on the amount of premiums paid during the
policy's first seven contract years or after a material
change has been made to the policy.

Surrendering your policy
If you surrender your policy, you're taxed on the
amount by which the cash surrender value exceeds the
cost basis in the policy.

Making a withdrawal or taking out a loan
If you make a withdrawal or take out a loan from a
modified endowment contract, you're taxed on the amount
of the withdrawal or loan that's considered income,
including all previously non-taxed gains. Income is the
difference between the cash surrender value and the
cost basis in your policy. It's unclear whether
interest paid, or accrued, on a loan is considered
interest for federal income tax purposes. If you borrow
money to buy or carry certain life insurance policies,
tax law provisions may limit the deduction of interest
payable on loan proceeds. You should consult your tax
adviser.

All modified endowment contracts we or our affiliates
issue to you in a calendar year are treated as a single
contract when we calculate whether a distribution
amount is subject to tax.

10% penalty tax
If any amount you receive from a modified endowment
contract is taxable, you may also have to pay a penalty
tax equal to 10% of the taxable amount.

A taxpayer will not have to pay the penalty tax if any
of the following exceptions apply:
. you're at least 59 1/2 years old
. you're receiving an amount because you've become
disabled
. you're receiving an amount that's part of a series of
substantially equal periodic payments, paid out at
least annually. These payments may be made for your
life or life expectancy or for the joint lives or
joint life expectancies of you and your
beneficiaries.

Distributions before a policy becomes a modified
endowment contract
If your policy fails the seven-pay test and becomes a
modified endowment contract, any amount you receive or
are deemed to have received during the two years before
it became a modified endowment contract may be taxable.
The distribution would be treated as having been made
in anticipation of the policy's failing to meet the
seven-pay test under Treasury Department regulations
which are yet to be prescribed.
---------------------------------------------------------

Accelerated living benefits rider
Policy riders Amounts received under this rider should be generally
excluded from taxable income under Section 101(g) of
Please see the the tax code.
discussion of
optional riders in Benefits under the rider will be taxed, however, if
The death benefit. they are paid to someone other than a person insured by
the policy, and the person insured by the policy:
Please consult with
your tax adviser if . is a director, officer or employee of the person
you want to receiving the benefit, or
exercise your . has a financial interest in a business of the person
rights under this receiving the benefit.
rider.

In some cases there may be a question as to whether a
life insurance policy that has an accelerated living
benefit rider can meet technical aspects of the
definition of "life insurance contract" under the tax
code. We may reserve the right (but are not obligated)
to modify the rider to conform under tax code
requirements.

53
<PAGE>

ABOUT PACIFIC LIFE

Pacific Life Insurance Company is a life insurance
company based in California. Along with our
subsidiaries and affiliates, our operations include
life insurance, annuity, pension and institutional
products, group employee benefits, broker-dealer
operations, and investment advisory services. At the
end of 1999, we had over $101 billion of individual
life insurance and total admitted assets of
approximately $48.2 billion. We are ranked the 16th
largest life insurance carrier in the U.S. in terms of
1999 admitted assets.

The Pacific Life family of companies has total assets
under management of $315 billion. We are authorized to
conduct our life and annuity business in the District
of Columbia and in all states except New York. Our
principal office is at 700 Newport Center Drive,
Newport Beach, California 92660.

---------------------------------------------------------
How we're organized Pacific Life was established on January 2, 1868 under
the name, Pacific Mutual Life Insurance Company of
California. It was reincorporated as Pacific Mutual
Life Insurance Company on July 22, 1936. On September
1, 1997, Pacific Life converted from a mutual life
insurance company to a stock life insurance company.
Pacific Life is a subsidiary of Pacific LifeCorp, a
holding company, which in turn is a subsidiary of
Pacific Mutual Holding Company, a mutual holding
company.

Under their charters, Pacific Mutual Holding Company
must always hold at least 51% of the outstanding voting
stock of Pacific LifeCorp. Pacific LifeCorp must always
own 100% of the voting stock of Pacific Life. Owners of
Pacific Life's annuity contracts and life insurance
policies have certain membership interests in Pacific
Mutual Holding Company. They have the right to vote on
the election of the Board of Directors of the mutual
holding company and on other matters. They also have
certain rights if the mutual holding company is
liquidated or dissolved.

---------------------------------------------------------
How policies are
distributed Pacific Select Distributors, Inc. (PSD) (formerly
called Pacific Mutual Distributors, Inc.), our
subsidiary, is the distributor of our policies. PSD is
located at 700 Newport Center Drive, Newport Beach,
California 92660.

PSD is registered as a broker-dealer with the SEC and
is a member of the National Association of Securities
Dealers (NASD). We pay PSD for its services as our
distributor.

The policies are sold by registered representatives of
broker-dealers who have signed agreements with us and
PSD. Registered representatives must be licensed to
sell variable life insurance under the state insurance
and securities regulations that apply. Broker-dealers
must be registered with the SEC.

How we pay broker-dealers
We pay broker-dealers commission for promoting,
marketing and selling our policies. Broker-dealers pay
a portion of the commission to their registered
representatives, under their own arrangements.

54
<PAGE>

Commissions are based on "target" premiums we
determine. The commission we pay will vary with the
agreement, but the most common schedule of commissions
we pay is:

A target premium is
a hypothetical . 65% of premiums paid up to the first target premium
premium that is . 32% of premiums paid up to the second target premium
used only to . 12% of the premiums paid under targets 3-10
calculate . 3% of premiums paid in excess of the 10th target
commissions. It premium.
varies with the
death benefit We may pay broker-dealers an annual renewal commission
option you choose, of up to 0.20% of a policy's accumulated value less any
the age of the outstanding loan amount. We calculate the renewal
person insured by amount monthly and it becomes payable on each policy
the policy on the anniversary.
policy date, and
the gender (unless We may also pay override payments, expense and
unisex rates are marketing allowances, bonuses, wholesaler fees and
required) and risk training allowances.
class of the person
insured by the Registered representatives who meet certain sales
policy. levels can qualify for sales incentives programs we
sponsor. We may also pay them non-cash compensation
like expense-paid trips, expense-paid educational
seminars, and merchandise. They can choose to receive
A policy's target their compensation on a deferred basis.
premium will be
less than the
policy's guideline
level premiums.

---------------------------------------------------------
How our accounts We own the assets in our general account and our
work separate account. We allocate your net premiums to
these accounts according to the investment options
you've chosen.

General account
We can provide you Our general account includes all of our assets, except
with reports of our for those held in our separate accounts. We guarantee
ratings as an you an interest rate for up to one year on any amount
insurance company allocated to the fixed options. The rate is reset
and our ability to annually. The fixed options are part of our general
pay claims with account, which we may invest as we wish, according to
respect to our any laws that apply. We'll credit the guaranteed rate
general account even if the investments we make earn less. Our ability
assets. to pay these guarantees is backed by our strength as a
company.

The fixed options are not securities, so they do not
fall under any securities act. For this reason, the SEC
has not reviewed the disclosure in this prospectus
about the fixed options. However, other federal
securities laws may apply to the accuracy and
completeness of the disclosure about the fixed options.

Separate account
You'll find the Amounts allocated to the variable investment options
audited financial are held in our separate account. The assets in this
statements for the account are kept separate from the assets in our
Pacific Select Exec general account and our other separate accounts, and
separate account are protected from our general creditors.
later in this
section of the The separate account was established on May 12, 1988
prospectus. under California law under the authority of our Board
of Directors. It's registered with the SEC as a type of
This section of the investment company called a unit investment trust. The
prospectus also SEC does not oversee the administration or investment
includes the practices or policies of the account.
audited
consolidated The separate account is divided into variable accounts.
financial Each variable account invests in shares of a designated
statements for portfolio of the Pacific Select Fund or the M Fund. We
Pacific Life, which may add variable accounts that invest in other
we include to show portfolios of these funds or in other securities.
our strength as a
company and our
ability to meet our
obligations under
the policies.

55
<PAGE>

ABOUT PACIFIC LIFE

We're the legal owner of the assets in the separate
account, and pay its operating expenses. The separate
account is operated only for our variable life
insurance policies. We must keep enough money in the
account to pay anticipated obligations under the
insurance policies funded by the account, but we can
transfer any amount that's more than these anticipated
obligations to our general account. Some of the money
in the separate account may include charges we collect
from the account and any investment results on those
charges.

The separate We cannot charge the assets in the separate account
account is not the attributable to our reserves and other liabilities
only investor in under the policies funded by the account with any
the Pacific Select liabilities from our other business.
Fund or the M Fund.
Investment in the Similarly, the income, gains or losses, realized or
funds by other unrealized, of the assets of any variable account
separate accounts belong to that variable account and are credited to or
for variable charged against the assets held in that variable
annuity contracts account without regard to our other income, gains or
and variable life losses.
insurance contracts
could cause Making changes to the separate account
conflicts. For more We can add, change or remove any securities that the
information, please separate account or any variable account holds or buys,
see the Statements as long as we comply with the laws that apply.
of Additional
Information for the We can substitute shares of one Pacific Select Fund
Pacific Select Fund portfolio or M Fund portfolio with shares of another
and for the M Fund. portfolio or fund if:

. any portfolio is no longer available for investment
. our management believes that a portfolio is no longer
appropriate in view of the purposes of the policy.

We'll give you any required notice or receive any
required approval from policy owners or the SEC before
we substitute any shares. We'll comply with the filing
or other procedures established by insurance regulators
as required by law.

We can add new variable accounts, which may include
additional subaccounts of the separate account, to
serve as investment options under the policies. These
may be managed separate accounts or they may invest in
a new portfolio of the Pacific Select Fund or the
M Fund, or in shares of another investment company or
one of its portfolios, or in a suitable investment
vehicle with a specified investment objective.

We can add new variable accounts when we believe that
it's warranted by marketing needs or investment
conditions. We'll decide on what basis we'll make new
accounts available to existing policy owners.

We can also eliminate any of our variable accounts if
we believe marketing, tax or investment conditions
warrant it. We can terminate and liquidate any variable
account.

If we make any changes to variable accounts or
substitution of securities, we can make appropriate
changes to this policy or any of our other policies, by
appropriate endorsement, to reflect the change or
substitution.

56
<PAGE>

If we believe it's in the best interests of people
holding voting rights under the policies and we meet
any required regulatory approvals we can do the
following:

. operate the separate account as a management
investment company, unit investment trust, or any
other form permitted under securities or other laws
. register or deregister the separate account under
securities law
. combine the separate account with one of our other
separate accounts or our affiliates' separate
accounts
. combine one or more variable accounts
. create a committee, board or other group to manage
the separate account
. change the classification of any variable account.

Taxes we pay
We may be charged for state and local taxes. Currently,
we pay these taxes because they are small amounts with
respect to the policy. If these taxes increase
significantly, we may deduct them from the separate
account.

We may charge the separate account for any federal,
state and local taxes that apply to the separate
account or to our operations. This could happen if our
tax status or the tax treatment of variable life
insurance changes.

---------------------------------------------------------
Voting rights We're the legal owner of the shares of the Pacific
Select Fund and the M Fund that are held by the
variable accounts. We may vote on any matter at
shareholder meetings of the funds. However, we are
required by law to vote as you instruct on the shares
relating to your allocation in a variable investment
option. This is called your voting interest.

Your voting interest is calculated as of a day set by
the Board of Trustees of the Pacific Select Fund or the
Board of Directors of M Fund, called the record date.
Your voting interest equals the accumulated value in a
variable investment option divided by the net asset
value of a share of the corresponding portfolio.
Fractional shares are included. If allowed by law, we
may change how we calculate your voting interest.

We'll send you documents from the Pacific Select Fund
and the M Fund called proxy materials. They include
information about the items you'll be voting on and
forms for you to give us your instructions. We'll vote
shares held in the separate account for which we do not
receive voting instructions in the same proportion as
all other shares in the portfolio held by that separate
account for which we've received timely instructions.

We'll vote shares of any portfolio we hold in our
general account in the same proportion as the total
votes for all of our separate accounts, including this
separate account. We'll vote shares of any portfolio
held by any of our non-insurance affiliates in the same
proportion as the total votes for all of our separate
accounts and those of our insurance affiliates.

If the law changes to allow it, we can vote as we wish
on shares of the portfolios held in the separate
account.

When required by state insurance regulatory
authorities, we may disregard voting instructions that:

. would change a portfolio's investment objective or
subclassification
. would approve or disapprove an investment advisory
contract.

57
<PAGE>

ABOUT PACIFIC LIFE

We may disregard voting instructions on a change
initiated by policy owners that would change a
portfolio's investment policy, investment adviser or
portfolio manager if:

. our disapproval is reasonable
. we determine in good faith that the change would be
against state law or otherwise be inappropriate,
considering the portfolio's objectives and purpose,
and considering what effect the change would have on
us.

If we disregard any voting instructions, we'll include
a summary of the action we took and our reasons for it
in the next report to policy owners.

---------------------------------------------------------
Illustrations We will provide you with illustrations based on
different sets of assumptions upon your request. You
If you ask us, can request such illustrations at any time.
we'll provide you Illustrations may help you understand how your policy
with different values would vary over time based on different
kinds of assumptions. We have filed examples of such an
illustrations. illustration as an exhibit to the registration
statement that relates to the policy on file with the
. Illustrations SEC.
based on
information you
give us about the
age of the person
to be insured by
the policy, their
risk class, the
face amount, the
death benefit and
premium payments.

. Illustrations
that show the
allocation of
premium payments
to specified
variable
accounts. These
will reflect the
expenses of the
portfolio of the
Fund in which the
variable account
invests.

. Illustrations
that use a
hypothetical
gross rate of
return that's
greater than 12%.
These are
available only to
certain large
institutional
investors.

---------------------------------------------------------
State regulation We're subject to the laws of the state of California
governing insurance companies and to regulations issued
by the Commissioner of Insurance of California. In
addition, we're subject to the insurance laws and
regulations of the other states and jurisdictions in
which we're licensed or may become licensed to operate.

An annual statement in a prescribed form must be filed
with the Commissioner of Insurance of California and
with regulatory authorities of other states on or
before March 1st in each year. This statement covers
our operations for the preceding year and our financial
condition as of December 31st of that year. Our affairs
are subject to review and examination at any time by
the Commissioner of Insurance or his agents, and
subject to full examination of our operations at
periodic intervals.

---------------------------------------------------------
Legal proceedings The separate account is not involved in any legal
and legal matters proceedings that would have a material effect on policy
owners.

Legal matters concerning the issue and sale of the life
insurance policies described in this prospectus, our
organization and authority to issue the policies under
California law, and the validity of the forms of the
policies under California law, have been passed upon by
our general counsel. Legal matters relating to federal
securities laws and federal income tax laws have been
passed upon by Dechert Price & Rhoads.

58
<PAGE>

---------------------------------------------------------
Registration We've filed a registration statement with the SEC for
statement M's Versatile Product, under the Securities Act of
1933. The SEC's rules allow us to omit some of the
information required by the registration statement from
this prospectus. You can ask for it from the SEC's
office in Washington, D. C. They may charge you a fee.

---------------------------------------------------------
Management The following is a list of our directors and certain
officers, along with some information about their
business activities over the past five years. They do
not receive any compensation from the separate account
for services they provide to it nor do we pay any
separately allocable compensation for these services.

The business address of each of these people is c/o
Pacific Life Insurance Company, 700 Newport Center
Drive, Newport Beach, California 92660.

<TABLE>
<CAPTION>
NAME AND POSITION PRINCIPAL OCCUPATION DURING THE LAST FIVE YEARS

<S> <C>
Thomas C. Sutton Director, Chairman of the Board and Chief Executive Officer of Pacific Life;
Director, Chairman Director, Chairman of the Board and Chief Executive Officer of Pacific LifeCorp,
of the Board and August 1997 to present; Director, Chairman of the Board and Chief Executive Officer
Chief Executive of Pacific Mutual Holding Company, August 1997 to present; Trustee and Chairman of
Officer the Board and Former President of Pacific Select Fund; Director and Chairman of the
Board of Pacific Life & Annuity Company (formerly known as PM Group Life Insurance
Company); Management Board Member of PIMCO Advisors L.P., December 1997 to present;
Former Equity Board Member of PIMCO Advisors L.P.; Former Director of Pacific
Corinthian Life Insurance Company; Director of Newhall Land & Farming; The Irvine
Company; Edison International; and similar positions with other affiliated companies
of Pacific Life.

Glenn S. Schafer Director and President of Pacific Life; Executive Vice President and Chief Financial
Director and Officer of Pacific Life, April 1991 to January 1995; Director and President of
President Pacific LifeCorp, August 1997 to present; Director and President of Pacific Mutual
Holding Company, August 1997 to present; President (since February 1999) and Former
Trustee of Pacific Select Fund; Management Board Member of PIMCO Advisors L.P.,
December 1997 to present; Former Equity Board Member of PIMCO Advisors L.P.; Former
Director of Pacific Corinthian Life Insurance Company; Director of Pacific Life &
Annuity Company; and similar positions with other affiliated companies of Pacific
Life.

Khanh T. Tran Director (since August 1997), Senior Vice President and Chief Financial Officer of
Director, Senior Pacific Life, June 1996 to present; Vice President and Treasurer of Pacific Life,
Vice President and November 1991 to June 1996; Senior Vice President and Chief Financial Officer of
Chief Financial Pacific LifeCorp, August 1997 to present; Senior Vice President and Chief Financial
Officer Officer of Pacific Mutual Holding Company, August 1997 to present; Chief Financial
Officer to other affiliated companies of Pacific Life.

David R. Carmichael Director (since August 1997), Senior Vice President and General Counsel of Pacific
Director, Senior Life; Senior Vice President and General Counsel of Pacific LifeCorp, August 1997 to
Vice President and present; Senior Vice President and General Counsel of Pacific Mutual Holding
General Counsel Company, August 1997 to present; Director, Senior Vice President (since July 1998)
and General Counsel (since July 1998) of Pacific Life & Annuity Company; Director
of: Association of California Life and Health Insurance Companies and Association of
Life Insurance Counsel.

Audrey L. Milfs Director (since August 1997), Vice President and Corporate Secretary of Pacific
Director, Vice Life; Vice President and Corporate Secretary of Pacific LifeCorp, August 1997 to
President and present; Vice President and Secretary of Pacific Mutual Holding Company, August 1997
Corporate Secretary to present; Secretary of Pacific Select Fund; similar positions with other
affiliated companies of Pacific Life.

Lynn C. Miller Executive Vice President, Individual Insurance, of Pacific Life; Executive Vice
Executive Vice President of Pacific Life & Annuity Company, since July 1998.
President

Edward R. Byrd Vice President and Controller of Pacific Life; Vice President and Controller of
Vice President and Pacific LifeCorp, August 1997 to present; Vice President and Controller of Pacific
Controller Mutual Holding Company, August 1997 to present; and similar positions with other
affiliated companies of Pacific Life.

Brian D. Klemens Vice President and Treasurer of Pacific Life, December 1998 to present; Assistant
Vice President and Vice President, Accounting and Assistant Controller of Pacific Life, April 1994 to
Treasurer December 1998; Vice President and Treasurer of Pacific LifeCorp, June 1999 to
present; Vice President and Treasurer of Pacific Mutual Holding Company, June 1999
to present; Vice President and Treasurer of other affiliated companies of Pacific
Life.
</TABLE>

59
<PAGE>

ABOUT PACIFIC LIFE

---------------------------------------------------------
Financial
statements The next several pages contain the statement of net
assets of the Pacific Select Exec Separate Account as
of December 31, 1999 and the related statement of
operations for the year then ended and statements of
changes in net assets for each of the two years in the
period then ended.

These are followed by the consolidated financial
statements for Pacific Life as of December 31, 1999 and
1998 and for each of the three years ended December 31,
1999, which are included in this prospectus so you can
assess our ability to meet our obligations under the
policies.

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

Experts The consolidated financial statements of Pacific Life
as of December 31, 1999 and 1998 and for each of the
three years in the period ended December 31, 1999 and
the statement of net assets of Pacific Select Exec
Separate Account as of December 31, 1999 and the
related statement of operations for the year then ended
and statements of changes in net assets for each of the
two years in the period then ended included in this
prospectus have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their reports
appearing herein, and have been so included in reliance
upon the reports of such firm given upon their
authority as experts in accounting and auditing.

60
<PAGE>

INDEPENDENT AUDITORS' REPORT

The Board of Directors
Pacific Life Insurance Company:

We have audited the accompanying statement of assets and liabilities of
Pacific Select Exec Separate Account (comprised of the Aggressive Equity,
Emerging Markets, Growth, Bond and Income, Equity, Multi-Strategy, Equity
Income, Growth LT, Mid-Cap Value, Equity Index, Small-Cap Index, REIT,
International, Government Securities, Managed Bond, Money Market, High Yield
Bond, Large-Cap Value, Variable Account I, Variable Account II, Variable
Account III, and Variable Account IV Variable Accounts) as of December 31, 1999
and the related statement of operations for the year then ended and statement
of changes in net assets for each of the two years in the period then ended (as
to the Mid-Cap Value, Small-Cap Index, REIT, and Large-Cap Value Variable
Accounts, for the periods from commencement of operations through December 31,
1999). These financial statements are the responsibility of the Separate
Account's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, such financial statements present fairly, in all material
respects, the financial position of each of the respective Variable Accounts
constituting Pacific Select Exec Separate Account as of December 31, 1999 and
the results of their operations for the year then ended and the changes in
their net assets for each of the two years in the period then ended (as to the
Mid-Cap Value, Small-Cap Index, REIT, and Large-Cap Value Variable Accounts,
for the periods from commencement of operations through December 31, 1999), in
conformity with generally accepted accounting principles.

DELOITTE & TOUCHE LLP

Costa Mesa, California
February 10, 2000

61
<PAGE>

PACIFIC SELECT EXEC SEPARATE ACCOUNT
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
(In thousands)

<TABLE>
<CAPTION>
Aggressive Emerging Bond and Multi- Equity Growth Mid-Cap Equity Small-Cap
Equity Markets Growth Income Equity Strategy Income LT Value Index Index
Variable Variable Variable Variable Variable Variable Variable Variable Variable Variable Variable
Account Account Account Account Account Account Account Account Account Account Account
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
Aggressive
Equity Portfolio
(2,270 shares;
cost $28,345)... $33,035
Emerging Markets
Portfolio
(1,900 shares;
cost $14,846)... $19,910
Growth Portfolio
(9,705 shares;
cost $225,194).. $289,069
Bond and Income
Portfolio
(630 shares;
cost $7,935).... $6,997
Equity Portfolio
(1,589 shares;
cost $48,734)... $59,599
Multi-Strategy
Portfolio
(8,946 shares;
cost $134,934).. $151,897
Equity Income
Portfolio
(8,125 shares;
cost $186,348).. $225,466
Growth LT
Portfolio
(11,253 shares;
cost $266,532).. $536,446
Mid-Cap Value
Portfolio
(496 shares;
cost $5,142).... $5,208
Equity Index
Portfolio
(11,315 shares;
cost $298,365).. $434,565
Small-Cap Index
Portfolio
(547 shares;
cost $5,759).... $6,426
Receivables:
Due from Pacific
Life Insurance
Company......... 45 27 53 5 19 131 4 1
Fund shares
redeemed........ 26 88
-----------------------------------------------------------------------------------------------------
Total Assets..... 33,061 19,955 289,096 6,997 59,652 151,902 225,485 536,577 5,212 434,653 6,427
-----------------------------------------------------------------------------------------------------
LIABILITIES
Payables:
Due to Pacific
Life Insurance
Company......... 26 88
Fund shares
purchased....... 45 27 53 5 19 131 4 1
-----------------------------------------------------------------------------------------------------
Total
Liabilities...... 26 45 27 53 5 19 131 4 88 1
-----------------------------------------------------------------------------------------------------
NET ASSETS....... $33,035 $19,910 $289,069 $6,997 $59,599 $151,897 $225,466 $536,446 $5,208 $434,565 $6,426
-----------------------------------------------------------------------------------------------------
</TABLE>

See Notes to Financial Statements

62
<PAGE>

PACIFIC SELECT EXEC SEPARATE ACCOUNT
STATEMENT OF ASSETS AND LIABILITIES (Continued)
DECEMBER 31, 1999
(In thousands)

<TABLE>
<CAPTION>
Govern- High
Inter- ment Managed Money Yield Large-Cap
REIT national Securities Bond Market Bond Value Variable Variable Variable Variable
Variable Variable Variable Variable Variable Variable Variable Account Account Account Account
Account Account Account Account Account Account Account I II III IV
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
REIT Portfolio
(276 shares;
cost $2,783).... $2,643
International
Portfolio
(11,651 shares;
cost $188,119).. $215,349
Government
Securities
Portfolio
(2,200 shares;
cost $23,386)... $22,218
Managed Bond
Portfolio
(11,058 shares;
cost $120,723).. $114,197
Money Market
Portfolio
(13,001 shares;
cost $131,293).. $131,046
High Yield Bond
Portfolio
(5,450 shares;
cost $50,328)... $48,032
Large-Cap Value
Portfolio
(485 shares;
cost $5,320).... $5,378
Brandes
International
Equity Portfolio
(640 shares;
cost $8,485).... $9,927
Turner Core
Growth Portfolio
(943 shares;
cost $19,237)... $21,622
Frontier Capital
Appreciation
Portfolio
(401 shares;
cost $6,298).... $8,463
Enhanced U.S.
Equity Portfolio
(286 shares;
cost $5,315).... $6,005
Receivables:
Due from Pacific
Life Insurance
Company......... 4 74 3 2 7
Fund shares
redeemed........ 3 209 11
-----------------------------------------------------------------------------------------------------
Total Assets..... 2,647 215,423 22,221 114,200 131,255 48,043 5,380 9,927 21,622 8,463 6,012
-----------------------------------------------------------------------------------------------------
LIABILITIES
Payables:
Due to Pacific
Life Insurance
Company......... 3 209 11
Fund shares
purchased....... 4 74 3 2 7
-----------------------------------------------------------------------------------------------------
Total
Liabilities...... 4 74 3 3 209 11 2 7
-----------------------------------------------------------------------------------------------------
NET ASSETS....... $2,643 $215,349 $22,218 $114,197 $131,046 $48,032 $5,378 $9,927 $21,622 $8,463 $6,005
-----------------------------------------------------------------------------------------------------
</TABLE>

See Notes to Financial Statements

63
<PAGE>

PACIFIC SELECT EXEC SEPARATE ACCOUNT
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
(In thousands)

<TABLE>
<CAPTION>
Aggressive Emerging Bond and Multi- Equity Growth Mid-Cap Equity Small-Cap
Equity Markets Growth Income Equity Strategy Income LT Value Index Index
Variable Variable Variable Variable Variable Variable Variable Variable Variable Variable Variable
Account Account Account Account Account Account Account Account Account (1) Account Account (1)
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends....... $2,297 $60 $24,357 $647 $2,430 $12,175 $18,449 $24,658 $10 $5,600 $95
------------------------------------------------------------------------------------------------------------
Net Investment
Income........... 2,297 60 24,357 647 2,430 12,175 18,449 24,658 10 5,600 95
------------------------------------------------------------------------------------------------------------
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON
INVESTMENTS
Net realized
gain (loss) from
security
transactions.... 835 (293) 17,437 (147) 1,715 1,903 8,208 25,696 (70) 16,677 37
Net unrealized
appreciation
(depreciation)
on investments.. 3,261 6,681 51,373 (970) 8,860 (4,391) (1,356) 195,153 66 45,834 667
------------------------------------------------------------------------------------------------------------
Net Realized and
Unrealized Gain
(Loss) on
Investments...... 4,096 6,388 68,810 (1,117) 10,575 (2,488) 6,852 220,849 (4) 62,511 704
------------------------------------------------------------------------------------------------------------
NET INCREASE
(DECREASE) IN
NET ASSETS
RESULTING FROM
OPERATIONS...... $6,393 $6,448 $93,167 ($470) $13,005 $9,687 $25,301 $245,507 $6 $68,111 $799
------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Operations commenced during 1999 (see Note 1 to Financial Statements).

See Notes to Financial Statements

64
<PAGE>

PACIFIC SELECT EXEC SEPARATE ACCOUNT
STATEMENT OF OPERATIONS (Continued)
FOR THE YEAR ENDED DECEMBER 31, 1999
(In thousands)

(1) Operations commenced during 1999 (see Note 1 to Financial Statements).

See Notes to Financial Statements

65
<PAGE>

PACIFIC SELECT EXEC SEPARATE ACCOUNT
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1999
(In thousands)

<TABLE>
<CAPTION>
Aggressive Emerging Bond and Multi-
Equity Markets Growth Income Equity Strategy
Variable Variable Variable Variable Variable Variable
Account Account Account Account Account Account
-----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income............................... $2,297 $60 $24,357 $647 $2,430 $12,175
Net realized gain (loss) from security transactions. 835 (293) 17,437 (147) 1,715 1,903
Net unrealized appreciation (depreciation) on
investments........................................ 3,261 6,681 51,373 (970) 8,860 (4,391)
-----------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting
from Operations..................................... 6,393 6,448 93,167 (470) 13,005 9,687
-----------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
FROM POLICY TRANSACTIONS
Transfer of net premiums............................ 6,178 3,315 31,800 1,814 7,890 13,459
Transfers--policy charges and deductions............ (1,517) (908) (11,435) (439) (2,031) (6,081)
Transfers in (from other variable accounts)......... 29,901 25,855 227,823 6,748 59,920 23,609
Transfers out (to other variable accounts).......... (25,109) (24,440) (239,257) (5,539) (36,551) (18,440)
Transfers--other.................................... (577) (432) (12,699) (399) (700) (4,335)
-----------------------------------------------------------
Net Increase (Decrease) in Net Assets Derived
from Policy Transactions............................ 8,876 3,390 (3,768) 2,185 28,528 8,212
-----------------------------------------------------------
NET INCREASE IN NET ASSETS........................... 15,269 9,838 89,399 1,715 41,533 17,899
-----------------------------------------------------------
NET ASSETS
Beginning of Year.................................... 17,766 10,072 199,670 5,282 18,066 133,998
-----------------------------------------------------------
End of Year.......................................... $33,035 $19,910 $289,069 $6,997 $59,599 $151,897
-----------------------------------------------------------
<CAPTION>
Equity Growth Mid-Cap Equity Small-Cap
Income LT Value Index Index
Variable Variable Variable Variable Variable
Account Account Account (1) Account Account (1)
-----------------------------------------------------
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income............................... $18,449 $24,658 $10 $5,600 $95
Net realized gain (loss) from security transactions. 8,208 25,696 (70) 16,677 37
Net unrealized appreciation (depreciation) on
investments........................................ (1,356) 195,153 66 45,834 667
-----------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting
from Operations..................................... 25,301 245,507 6 68,111 799
-----------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
FROM POLICY TRANSACTIONS
Transfer of net premiums............................ 27,427 46,518 1,020 69,793 1,576
Transfers--policy charges and deductions............ (10,117) (16,923) (151) (19,242) (168)
Transfers in (from other variable accounts)......... 71,635 186,813 7,393 156,344 17,438
Transfers out (to other variable accounts).......... (63,749) (134,957) (2,988) (122,161) (13,186)
Transfers--other.................................... (12,898) (17,789) (72) (21,467) (33)
-----------------------------------------------------
Net Increase (Decrease) in Net Assets Derived
from Policy Transactions............................ 12,298 63,662 5,202 63,267 5,627
-----------------------------------------------------
NET INCREASE IN NET ASSETS........................... 37,599 309,169 5,208 131,378 6,426
-----------------------------------------------------
NET ASSETS
Beginning of Year.................................... 187,867 227,277 303,187
-----------------------------------------------------
End of Year.......................................... $225,466 $536,446 $5,208 $434,565 $6,426
-----------------------------------------------------
</TABLE>

(1) Operations commenced during 1999 (see Note 1 to Financial Statements).

See Notes to Financial Statements

66
<PAGE>

PACIFIC SELECT EXEC SEPARATE ACCOUNT
STATEMENT OF CHANGES IN NET ASSETS (Continued)
FOR THE YEAR ENDED DECEMBER 31, 1999
(In thousands)

<TABLE>
<CAPTION>
Govern- High
Inter- ment Managed Money Yield Large-Cap
REIT national Securities Bond Market Bond Value Variable Variable Variable Variable
Variable Variable Variable Variable Variable Variable Variable Account Account Account Account
Account (1) Account Account Account Account Account Account (1) I II III IV
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCREASE
(DECREASE) IN NET
ASSETS
FROM OPERATIONS
Net investment
income.......... $82 $7,401 $1,278 $8,539 $4,600 $3,845 $20 $312 $1,181 $243 $474
Net realized
gain (loss) from
security
transactions.... (15) 8,072 9 353 259 (1,968) 29 254 277 224 646
Net unrealized
appreciation
(depreciation)
on investments.. (140) 23,374 (1,640) (10,865) (137) (533) 58 1,374 1,904 1,903 141
---------------------------------------------------------------------------------------------------------------
Net Increase
(Decrease) in Net
Assets Resulting
from Operations.. (73) 38,847 (353) (1,973) 4,722 1,344 107 1,940 3,362 2,370 1,261
---------------------------------------------------------------------------------------------------------------
INCREASE
(DECREASE) IN NET
ASSETS
FROM POLICY
TRANSACTIONS
Transfer of net
premiums........ 327 29,734 3,788 15,623 255,115 9,673 915 1,409 1,432 1,411 885
Transfers--
policy charges
and deductions.. (65) (8,874) (1,057) (4,945) (9,879) (2,496) (177) (234) (290) (327) (259)
Transfers in
(from other
variable
accounts)....... 3,247 121,103 12,668 65,597 466,728 44,998 6,201 5,989 17,199 3,714 8,944
Transfers out
(to other
variable
accounts)....... (771) (114,670) (7,771) (59,239) (643,243) (46,917) (1,608) (632) (2,837) (2,450) (9,539)
Transfers--
other........... (22) (7,931) (2,206) (2,730) (11,504) (1,940) (60) (67) (192) (707) (273)
---------------------------------------------------------------------------------------------------------------
Net Increase
(Decrease) in Net
Assets Derived
from Policy
Transactions..... 2,716 19,362 5,422 14,306 57,217 3,318 5,271 6,465 15,312 1,641 (242)
---------------------------------------------------------------------------------------------------------------
NET INCREASE IN
NET ASSETS....... 2,643 58,209 5,069 12,333 61,939 4,662 5,378 8,405 18,674 4,011 1,019
---------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of
Year............. 157,140 17,149 101,864 69,107 43,370 1,522 2,948 4,452 4,986
---------------------------------------------------------------------------------------------------------------
End of Year...... $2,643 $215,349 $22,218 $114,197 $131,046 $48,032 $5,378 $9,927 $21,622 $8,463 $6,005
---------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Operations commenced during 1999 (see Note 1 to Financial Statements).

See Notes to Financial Statements

67
<PAGE>

PACIFIC SELECT EXEC SEPARATE ACCOUNT
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998
(In thousands)

<TABLE>
<CAPTION>
Aggressive Emerging Bond and Multi- Equity Growth Equity
Equity Markets Growth Income Equity Strategy Income LT Index
Variable Variable Variable Variable Variable Variable Variable Variable Variable
Account Account Account Account Account Account Account Account Account
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS
FROM OPERATIONS
Net investment income.. $5 $117 $20,232 $147 $507 $12,030 $18,901 $6,250 $4,853
Net realized gain
(loss) from security
transactions........... 653 (1,951) 10,581 19 369 3,108 5,470 5,163 11,629
Net unrealized
appreciation
(depreciation) on
investments............ 1,132 (935) (23,983) 13 1,989 5,144 9,750 63,381 43,404
----------------------------------------------------------------------------------------
Net Increase (Decrease)
in Net Assets Resulting
from Operations......... 1,790 (2,769) 6,830 179 2,865 20,282 34,121 74,794 59,886
----------------------------------------------------------------------------------------
INCREASE (DECREASE) IN
NET ASSETS
FROM POLICY TRANSACTIONS
Transfer of net
premiums............... 4,086 3,183 31,972 1,056 2,976 14,554 24,939 29,295 44,705
Transfers--policy
charges and
deductions............. (969) (663) (10,609) (197) (633) (5,260) (7,949) (9,146) (12,955)
Transfers in (from
other variable
accounts).............. 20,958 27,300 89,840 6,550 17,627 13,875 46,109 82,877 108,028
Transfers out (to other
variable accounts)..... (16,962) (25,040) (87,886) (2,820) (8,527) (17,159) (35,074) (53,981) (73,002)
Transfers--other....... (610) (355) (10,466) (171) (432) (5,646) (5,765) (7,000) (10,763)
----------------------------------------------------------------------------------------
Net Increase in Net
Assets Derived
from Policy
Transactions............ 6,503 4,425 12,851 4,418 11,011 364 22,260 42,045 56,013
----------------------------------------------------------------------------------------
NET INCREASE IN NET
ASSETS.................. 8,293 1,656 19,681 4,597 13,876 20,646 56,381 116,839 115,899
----------------------------------------------------------------------------------------
NET ASSETS
Beginning of Year....... 9,473 8,416 179,989 685 4,190 113,352 131,486 110,438 187,288
----------------------------------------------------------------------------------------
End of Year............. $17,766 $10,072 $199,670 $5,282 $18,066 $133,998 $187,867 $227,277 $303,187
----------------------------------------------------------------------------------------
</TABLE>

See Notes to Financial Statements

68
<PAGE>

PACIFIC SELECT EXEC SEPARATE ACCOUNT
STATEMENT OF CHANGES IN NET ASSETS (Continued)
FOR THE YEAR ENDED DECEMBER 31, 1998
(In thousands)

<TABLE>
<CAPTION>
Govern- High
Inter- ment Managed Money Yield
national Securities Bond Market Bond Variable Variable Variable Variable
Variable Variable Variable Variable Variable Account Account Account Account
Account Account Account Account Account I II III IV
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS
FROM OPERATIONS
Net investment income.. $11,985 $881 $5,533 $3,392 $3,403 $87 $52 $21 $154
Net realized gain
(loss) from security
transactions........... 5,435 164 663 (3) (87) 8 96 (64) 183
Net unrealized
appreciation
(depreciation) on
investments............ (10,085) 59 1,408 14 (2,165) 72 460 44 366
--------------------------------------------------------------------------------------
Net Increase in Net
Assets Resulting from
Operations.............. 7,335 1,104 7,604 3,403 1,151 167 608 1 703
--------------------------------------------------------------------------------------
INCREASE (DECREASE) IN
NET ASSETS
FROM POLICY TRANSACTIONS
Transfer of net
premiums............... 28,077 2,186 13,456 164,872 7,612 238 408 1,305 1,358
Transfers--policy
charges and
deductions............. (8,359) (699) (3,939) (6,168) (2,255) (62) (93) (245) (156)
Transfers in (from
other variable
accounts).............. 71,891 10,097 52,698 268,634 34,691 749 2,159 1,700 1,697
Transfers out (to other
variable accounts)..... (64,225) (5,218) (36,135) (399,943) (29,075) (97) (880) (1,374) (481)
Transfers--other....... (6,520) (742) (4,332) (13,775) (2,461) (12) (37) (44) 111
--------------------------------------------------------------------------------------
Net Increase in Net
Assets Derived
from Policy
Transactions............ 20,864 5,624 21,748 13,620 8,512 816 1,557 1,342 2,529
--------------------------------------------------------------------------------------
NET INCREASE IN NET
ASSETS.................. 28,199 6,728 29,352 17,023 9,663 983 2,165 1,343 3,232
--------------------------------------------------------------------------------------
NET ASSETS
Beginning of Year....... 128,941 10,421 72,512 52,084 33,707 539 783 3,109 1,754
--------------------------------------------------------------------------------------
End of Year............. $157,140 $17,149 $101,864 $69,107 $43,370 $1,522 $2,948 $4,452 $4,986
--------------------------------------------------------------------------------------
</TABLE>

See Notes to Financial Statements

69
<PAGE>

PACIFIC SELECT EXEC SEPARATE ACCOUNT
NOTES TO FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES

The Pacific Select Exec Separate Account (the "Separate Account") is
registered as a unit investment trust under the Investment Company Act of 1940,
as amended, and is currently comprised of twenty-two subaccounts called
Variable Accounts: the Aggressive Equity Variable Account, the Emerging Markets
Variable Account, the Growth Variable Account, the Bond and Income Variable
Account, the Equity Variable Account, the Multi-Strategy Variable Account, the
Equity Income Variable Account, the Growth LT Variable Account, the Mid-Cap
Value Variable Account, the Equity Index Variable Account, the Small-Cap Index
Variable Account, the REIT Variable Account, the International Variable
Account, the Government Securities Variable Account, the Managed Bond Variable
Account, the Money Market Variable Account, the High Yield Bond Variable
Account, the Large-Cap Value Variable Account, and the Variable Accounts I
through IV. The assets in each of the first eighteen Variable Accounts are
invested in shares of the corresponding portfolios of Pacific Select Fund and
the assets of the last four Variable Accounts (Brandes International Equity,
Turner Core Growth, Frontier Capital Appreciation and Enhanced U.S. Equity) are
invested in shares of the corresponding portfolios of M Fund, Inc.
(collectively, the "Funds"). Each Variable Account pursues different investment
objectives and policies. The financial statements of the Funds, including the
schedules of investments, are either included in Sections B through E of this
report or provided separately and should be read in conjunction with the
Separate Account's financial statements.

The Separate Account has organized and registered with the Securities and
Exchange Commission four new Variable Accounts: the Mid-Cap Value Variable
Account, the Small-Cap Index Variable Account, the REIT Variable Account, and
the Large-Cap Value Variable Account. The Mid-Cap Value Variable Account, the
Small-Cap Index Variable Account, and the Large-Cap Value Variable Account
commenced operations on January 8, 1999, and the REIT Variable Account
commenced operations on January 19, 1999.

The Separate Account was established by Pacific Life Insurance Company
("Pacific Life") on May 12, 1988 and commenced operations on November 22, 1988.
Under applicable insurance law, the assets and liabilities of the Separate
Account are clearly identified and distinguished from the other assets and
liabilities of Pacific Life. The assets of the Separate Account will not be
charged with any liabilities arising out of any other business conducted by
Pacific Life, but the obligations of the Separate Account, including benefits
related to variable life insurance, are obligations of Pacific Life.

The Separate Account held by Pacific Life represents funds from individual
flexible premium variable life policies. The assets of the Separate Account are
carried at market value.

The preparation of the accompanying financial statements requires management
to make estimates and assumptions that affect the reported amounts of assets
and liabilities at the date of the financial statements and the reported
amounts of income and expenses during the reporting period. Actual results
could differ from those estimates.

A. Valuation of Investments

Investments in shares of the Funds are valued at the reported net asset values
of the respective portfolios. Valuation of securities held by the Funds is
discussed in the notes to their financial statements.

B. Security Transactions

Transactions are recorded on the trade date. Realized gains and losses on
sales of investments are determined on the basis of identified cost.

C. Federal Income Taxes

The operations of the Separate Account will be reported on the Federal income
tax return of Pacific Life, which is taxed as a life insurance company under
the provisions of the Tax Reform Act of 1986. Under current tax law, no Federal
income taxes are expected to be paid by Pacific Life with respect to the
operations of the Separate Account.

2. DIVIDENDS

During 1999, the Funds declared dividends for each portfolio. The amounts
accrued by the Separate Account for its share of the dividends were reinvested
in additional full and fractional shares of the related portfolio.

3. CHARGES AND EXPENSES

With respect to variable life insurance policies funded by the Separate
Account, Pacific Life makes certain deductions from premiums for sales load and
state premium taxes before amounts are allocated to the Separate Account.
Pacific Life also makes certain deductions from the net assets of each Variable
Account for the mortality and expense risks Pacific Life assumes,
administrative expenses, cost of insurance, charges for optional benefits and
any sales and underwriting surrender charges. The operating expenses of the
Separate Account are paid by Pacific Life.

4. RELATED PARTY AGREEMENT

Pacific Mutual Distributors, Inc., a wholly-owned subsidiary of Pacific Life,
serves as principal underwriter of variable life insurance policies funded by
interests in the Separate Account, without remuneration from the Separate
Account.

70
<PAGE>

PACIFIC SELECT EXEC SEPARATE ACCOUNT
NOTES TO FINANCIAL STATEMENTS (Continued)

5. SEPARATE ACCOUNT'S COST OF INVESTMENTS IN THE FUNDS SHARES

The investment in the Funds shares are carried at identified cost, which
represents the amount available for investment (including reinvested
distributions of net investment income and realized gains). Total cost and
market value of the Separate Account's investments in the Funds as of December
31, 1999 were as follows (amounts in thousands):

<TABLE>
<CAPTION>
Variable Accounts
-------------------------------------------------------------------------------
Aggressive Emerging Bond and Multi- Equity Growth
Equity Markets Growth Income Equity Strategy Income LT
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total cost of investments
at beginning of year $16,338 $11,689 $187,167 $5,250 $16,061 $112,643 $147,393 $152,516
Add: Total net proceeds
from policy
transactions 19,528 12,400 103,914 4,132 40,979 16,057 33,867 110,353
Reinvested
distributions from
the Funds:
(a) Net investment
income 60 468 388 42 3,612 1,810
(b) Net realized gain 2,297 23,889 259 2,388 8,563 16,639 24,658
-------------------------------------------------------------------------------
Sub-Total 38,163 24,149 315,438 10,029 59,470 140,875 199,709 287,527
Less: Cost of investments
disposed during the
year 9,818 9,303 90,244 2,094 10,736 5,941 13,361 20,995
-------------------------------------------------------------------------------
Total cost of investments
at end of year 28,345 14,846 225,194 7,935 48,734 134,934 186,348 266,532
Add: Unrealized
appreciation
(depreciation) 4,690 5,064 63,875 (938) 10,865 16,963 39,118 269,914
-------------------------------------------------------------------------------
Total market value of
investments at end of
year $33,035 $19,910 $289,069 $6,997 $59,599 $151,897 $225,466 $536,446
-------------------------------------------------------------------------------

<CAPTION>
Govern-
Mid-Cap Equity Small-Cap Inter- ment Managed Money
Value (1) Index Index (1) REIT (1) national Securities Bond Market
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total cost of investments
at beginning of year $212,820 $153,283 $16,677 $97,525 $69,218
Add: Total net proceeds
from policy
transactions $6,149 94,678 $6,917 $2,925 63,456 9,456 32,380 302,607
Reinvested
distributions from
the Funds:
(a) Net investment
income 10 4,038 27 76 1,200 1,012 5,982 4,600
(b) Net realized gain 1,562 68 6 6,201 266 2,557
-------------------------------------------------------------------------------
Sub-Total 6,159 313,098 7,012 3,007 224,140 27,411 138,444 376,425
Less: Cost of investments
disposed during the
year 1,017 14,733 1,253 224 36,021 4,025 17,721 245,132
-------------------------------------------------------------------------------
Total cost of investments
at end of year 5,142 298,365 5,759 2,783 188,119 23,386 120,723 131,293
Add: Unrealized
appreciation
(depreciation) 66 136,200 667 (140) 27,230 (1,168) (6,526) (247)
-------------------------------------------------------------------------------
Total market value of
investments at end of
year $5,208 $434,565 $6,426 $2,643 $215,349 $22,218 $114,197 $131,046
-------------------------------------------------------------------------------

<CAPTION>
High Yield Large-Cap
Bond Value (1) I II III IV
-----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Total cost of investments
at beginning of year $45,134 $1,454 $2,467 $4,191 $4,437
Add: Total net proceeds
from policy
transactions 25,603 $5,805 7,684 16,504 3,055 2,983
Reinvested
distributions from
the Funds:
(a) Net investment
income 3,845 20 56 20 7
(b) Net realized gain 256 1,161 243 467
-----------------------------------------------------------
Sub-Total 74,582 5,825 9,450 20,152 7,489 7,894
Less: Cost of investments
disposed during the
year 24,254 505 965 915 1,191 2,579
-----------------------------------------------------------
Total cost of investments
at end of year 50,328 5,320 8,485 19,237 6,298 5,315
Add: Unrealized
appreciation
(depreciation) (2,296) 58 1,442 2,385 2,165 690
-----------------------------------------------------------
Total market value of
investments at end of
year $48,032 $5,378 $9,927 $21,622 $8,463 $6,005
-----------------------------------------------------------
</TABLE>
____________
(1) Operations commenced during 1999 (See Note 1 to Financial Statements).

71
<PAGE>

PACIFIC SELECT EXEC SEPARATE ACCOUNT
NOTES TO FINANCIAL STATEMENTS (Continued)

6. TRANSACTIONS IN SEPARATE ACCOUNT UNITS AND SELECTED ACCUMULATION UNIT **
INFORMATION

Transactions in Separate Account units for the year ended December 31, 1999
and the selected accumulation unit information as of December 31, 1999 were as
follows:

<TABLE>
<CAPTION>
Variable Accounts
---------------------------------------------------------------------------------------------
Aggressive Emerging Bond and Multi- Equity Growth
Equity Markets Growth Income Equity Strategy Income LT
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total units outstanding
at beginning of year 1,392,776 1,425,050 5,054,100 407,552 1,208,588 3,899,102 4,153,101 7,088,988
Increase (decrease) in
units resulting from
policy transactions:
(a) Transfer of net
premiums 446,295 391,154 731,566 146,464 466,028 378,029 566,767 1,090,385
(b) Transfers--policy
charges and
deductions (109,665) (106,579) (260,557) (35,534) (119,693) (170,710) (209,156) (396,786)
(c) Transfers in (from
other variable
accounts) 2,146,964 3,074,166 4,963,234 535,185 3,543,441 572,679 1,295,559 4,047,924
(d) Transfers out (to
other variable
accounts) (1,801,331) (2,898,051) (5,249,564) (439,413) (2,178,697) (445,339) (1,169,106) (2,989,259)
(e) Transfers--other (41,457) (51,197) (278,610) (31,698) (41,773) (104,711) (236,551) (394,019)
---------------------------------------------------------------------------------------------
Sub-Total 640,806 409,493 (93,931) 175,004 1,669,306 229,948 247,513 1,358,245
---------------------------------------------------------------------------------------------
Total units outstanding
at end of year 2,033,582 1,834,543 4,960,169 582,556 2,877,894 4,129,050 4,400,614 8,447,233
---------------------------------------------------------------------------------------------
Accumulation Unit Value:
At beginning of year $12.76 $7.07 $39.51 $12.96 $14.95 $34.37 $45.24 $32.06
At end of year $16.24 $10.85 $58.28 $12.01 $20.71 $36.79 $51.24 $63.51

<CAPTION>
Govern-
Mid-Cap Equity Small-Cap Inter- ment Managed Money
Value (1) Index Index (1) REIT (1) national Securities Bond Market
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total units outstanding
at beginning of year 7,178,724 7,183,483 722,500 4,098,497 4,086,161
Increase (decrease) in
units resulting from
policy transactions:
(a) Transfer of net
premiums 101,351 1,525,978 154,672 32,153 1,297,474 162,177 639,829 14,668,834
(b) Transfers--policy
charges and
deductions (15,187) (421,266) (16,372) (6,499) (385,569) (45,293) (202,469) (568,862)
(c) Transfers in (from
other variable
accounts) 733,125 3,170,097 1,703,414 317,169 5,106,667 511,147 2,606,449 26,594,956
(d) Transfers out (to
other variable
accounts) (308,361) (2,484,612) (1,291,374) (76,125) (4,851,038) (308,321) (2,349,734) (36,739,991)
(e) Transfers--other (7,378) (436,615) (3,136) (2,097) (335,483) (87,525) (108,284) (657,157)
---------------------------------------------------------------------------------------------
Sub-Total 503,550 1,353,582 547,204 264,601 832,051 232,185 585,791 3,297,780
---------------------------------------------------------------------------------------------
Total units outstanding
at end of year 503,550 8,532,306 547,204 264,601 8,015,534 954,685 4,684,288 7,383,941
---------------------------------------------------------------------------------------------
Accumulation Unit Value:
At beginning of year $10.00 $42.23 $10.00 $10.00 $21.88 $23.74 $24.85 $16.91
At end of year $10.34 $50.93 $11.74 $9.99 $26.87 $23.27 $24.38 $17.75

<CAPTION>
High Yield Large-Cap
Bond Value (1) I II III IV
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Total units outstanding
at beginning of year 1,598,243 127,998 167,752 342,807 304,588
Increase (decrease) in
units resulting from
policy transactions:
(a) Transfer of net
premiums 351,193 86,694 95,802 72,580 94,055 49,583
(b) Transfers--policy
charges and
deductions (90,794) (16,717) (16,143) (14,391) (22,248) (14,533)
(c) Transfers in (from
other variable
accounts) 1,565,039 580,019 404,864 806,745 246,076 500,082
(d) Transfers out (to
other variable
accounts) (1,635,967) (150,215) (43,231) (144,796) (161,952) (533,493)
(e) Transfers--other (67,640) (5,540) (4,604) (9,779) (46,779) (15,217)
-------------------------------------------------------------------
Sub-Total 121,831 494,241 436,688 710,359 109,152 (13,578)
-------------------------------------------------------------------
Total units outstanding
at end of year 1,720,074 494,241 564,686 878,111 451,959 291,010
-------------------------------------------------------------------
Accumulation Unit Value:
At beginning of year $27.14 $10.00 $11.89 $17.57 $12.99 $16.37
At end of year $27.92 $10.88 $17.58 $24.62 $18.72 $20.64
</TABLE>
____________
** Accumulation Unit: unit of measure used to calculate the value of a Policy
Owner's interest in a Variable Account during the accumulation period.

(1) Operations commenced during 1999 (See Note 1 to Financial Statements).

72
<PAGE>

INDEPENDENT AUDITORS' REPORT

Pacific Life Insurance Company and Subsidiaries:

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

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

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

DELOITTE & TOUCHE LLP

Costa Mesa, California
February 22, 2000

73
<PAGE>

Pacific Life Insurance Company and Subsidiaries

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

<TABLE>
<CAPTION>
December 31,
1999 1998
- -------------------------------------------------------------------------------
(In Millions)
<S> <C> <C>
ASSETS
Investments:
Securities available for sale at estimated fair value:
Fixed maturity securities $14,814.0 $13,804.7
Equity securities 295.2 547.5
Trading securities at estimated fair value 99.9 97.0
Mortgage loans 2,920.2 2,788.7
Real estate 236.0 172.7
Policy loans 4,258.5 4,003.2
Other investments 882.7 951.7
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS 23,506.5 22,365.5
Cash and cash equivalents 439.4 154.1
Deferred policy acquisition costs 1,446.1 899.8
Accrued investment income 287.2 259.3
Other assets 830.7 361.2
Separate account assets 23,613.1 15,844.0
- -------------------------------------------------------------------------------
TOTAL ASSETS $50,123.0 $39,883.9
- -------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
Universal life and investment-type products $19,045.5 $17,973.0
Future policy benefits 4,386.0 2,480.5
Short-term and long-term debt 224.4 445.1
Other liabilities 939.2 813.3
Separate account liabilities 23,613.1 15,844.0
- -------------------------------------------------------------------------------
TOTAL LIABILITIES 48,208.2 37,555.9
- -------------------------------------------------------------------------------
Commitments and contingencies
Stockholder's Equity:
Common stock - $50 par value; 600,000 shares authorized,
issued and outstanding 30.0 30.0
Paid-in capital 139.9 126.2
Unearned ESOP shares (11.6)
Retained earnings 2,034.5 1,663.5
Accumulated other comprehensive income (loss) -
Unrealized gain (loss) on securities available for
sale, net (278.0) 508.3
- -------------------------------------------------------------------------------
TOTAL STOCKHOLDER'S EQUITY 1,914.8 2,328.0
- -------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $50,123.0 $39,883.9
- -------------------------------------------------------------------------------
</TABLE>

See Notes to Consolidated Financial Statements

74
<PAGE>

Pacific Life Insurance Company and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
Years Ended December 31,
1999 1998 1997
- -------------------------------------------------------------------------------
(In Millions)
<S> <C> <C> <C>
REVENUES
Universal life and investment-type product policy
fees $ 653.8 $ 525.3 $ 431.2
Insurance premiums 483.9 537.1 526.4
Net investment income 1,473.3 1,413.6 1,325.4
Net realized investment gains 101.5 39.4 85.4
Commission revenue 234.3 220.1 146.6
Other income 144.7 112.5 97.9
- -------------------------------------------------------------------------------
TOTAL REVENUES 3,091.5 2,848.0 2,612.9
- -------------------------------------------------------------------------------

BENEFITS AND EXPENSES
Interest credited to universal life and investment-
type products 904.4 880.8 797.8
Policy benefits paid or provided 734.4 757.0 712.6
Commission expenses 484.6 387.2 305.1
Operating expenses 453.4 468.0 507.9
- -------------------------------------------------------------------------------
TOTAL BENEFITS AND EXPENSES 2,576.8 2,493.0 2,323.4
- -------------------------------------------------------------------------------

INCOME BEFORE PROVISION FOR INCOME TAXES 514.7 355.0 289.5
Provision for income taxes 143.7 113.5 113.5
- -------------------------------------------------------------------------------

NET INCOME $ 371.0 $ 241.5 $ 176.0
- -------------------------------------------------------------------------------
</TABLE>

See Notes to Consolidated Financial Statements

75
<PAGE>

Pacific Life Insurance Company and Subsidiaries

CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY

<TABLE>
<CAPTION>
Accumulated
Common Stock Unearned Other
------------- Paid-in ESOP Retained Comprehensive
Shares Amount Capital Shares Earnings Income (Loss) Total
- -----------------------------------------------------------------------------------------
(In Millions)

<S> <C> <C> <C> <C> <C> <C> <C>
BALANCES,
JANUARY 1, 1997 $1,318.0 $ 379.2 $1,697.2
Comprehensive income:
Net income 176.0 176.0
Change in unrealized
gain on securities
available for sale,
net 196.0 196.0
--------
Total comprehensive
income 372.0
Issuance of partnership
units by affiliate $ 85.1 85.1
Initial member
capitalization of
Pacific Mutual Holding
Company (2.0) (2.0)
Issuance of common
stock 0.6 $30.0 35.0 (65.0)
Dividend paid to
Pacific LifeCorp (5.0) (5.0)
- -----------------------------------------------------------------------------------------

BALANCES,
DECEMBER 31, 1997 0.6 30.0 120.1 1,422.0 575.2 2,147.3
Comprehensive income:
Net income 241.5 241.5
Change in unrealized
gain on securities
available for sale,
net (66.9) (66.9)
--------
Total comprehensive
income 174.6
Issuance of partnership
units by affiliate 6.1 6.1
- -----------------------------------------------------------------------------------------
BALANCES,
DECEMBER 31, 1998 0.6 30.0 126.2 1,663.5 508.3 2,328.0
Comprehensive loss:
Net income 371.0 371.0
Change in unrealized
gain on securities
available for sale,
net (786.3) (786.3)
--------
Total comprehensive
loss (415.3)
Issuance of partnership
units by affiliate 10.6 10.6
Capital contribution 3.1 3.1
Purchase of ESOP note $(13.1) (13.1)
Allocation of unearned
ESOP shares 1.5 1.5
- -----------------------------------------------------------------------------------------

BALANCES,
DECEMBER 31, 1999 0.6 $30.0 $139.9 $(11.6) $2,034.5 $(278.0) $1,914.8
- -----------------------------------------------------------------------------------------
</TABLE>

See Notes to Consolidated Financial Statements

76
<PAGE>

Pacific Life Insurance Company and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Years Ended December 31,
1999 1998 1997
- ------------------------------------------------------------------------------
(In Millions)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 371.0 $ 241.5 $ 176.0
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization on fixed maturity securities (77.8) (39.4) (26.6)
Depreciation and other amortization 20.5 26.0 38.3
Earnings of equity method investees (92.9) (99.0) (78.1)
Deferred income taxes (8.5) (20.6) (14.4)
Net realized investment gains (101.5) (39.4) (85.4)
Net change in deferred policy acquisition
costs (546.3) (171.9) (196.4)
Interest credited to universal life and in-
vestment-type products 904.4 880.8 797.8
Change in trading securities (2.9) (14.3) (18.3)
Change in accrued investment income (27.9) 3.1 (59.9)
Change in future policy benefits 58.1 (9.7) (16.3)
Change in other assets and liabilities 207.1 102.2 574.9
- ------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 703.3 859.3 1,091.6
- ------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES
Securities available for sale:
Purchases (4,173.4) (4,330.5) (6,272.3)
Sales 2,333.8 2,209.3 2,224.1
Maturities and repayments 1,400.3 2,221.8 2,394.6
Repayments of mortgage loans 681.0 334.9 179.3
Proceeds from sales of mortgage loans and
real estate 24.4 43.3 104.4
Purchases of mortgage loans and real estate (886.3) (1,246.3) (643.7)
Distributions from partnerships 138.2 119.5 91.6
Change in policy loans (255.3) (129.7) (301.4)
Cash received from acquisitions of insurance
blocks of business 164.9 1,215.9
Other investing activity, net 255.6 (466.6) (70.8)
- ------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES (316.8) (1,244.3) (1,078.3)
- ------------------------------------------------------------------------------
</TABLE>
(Continued)

See Notes to Consolidated Financial Statements

77
<PAGE>

Pacific Life Insurance Company and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Years Ended December 31,
(Continued) 1999 1998 1997
- -------------------------------------------------------------------------------
(In Millions)
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Policyholder account balances:
Deposits $ 4,453.4 $ 4,007.0 $ 2,679.8
Withdrawals (4,322.3) (3,770.7) (2,667.3)
Net change in short-term and long-term
debt (220.7) 191.5 (16.5)
Purchase of ESOP note (13.1)
Allocation of unearned ESOP shares 1.5
Initial capitalization of Pacific Mutual
Holding Company (2.0)
Dividend paid to Pacific LifeCorp (5.0)
- -------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES (101.2) 427.8 (11.0)
- -------------------------------------------------------------------------------

Net change in cash and cash equivalents 285.3 42.8 2.3
Cash and cash equivalents, beginning of
year 154.1 111.3 109.0
- -------------------------------------------------------------------------------

CASH AND CASH EQUIVALENTS, END OF YEAR $ 439.4 $ 154.1 $ 111.3
- -------------------------------------------------------------------------------

SUPPLEMENTAL SCHEDULE OF INVESTING AND FINANCING ACTIVITIES
In connection with the acquisitions of an annuity and an insurance block of
business in 1999 and 1997, respectively, as discussed in Note 4, the following
assets and liabilities were assumed:

Fixed maturity securities $ 1,592.7
Cash and cash equivalents 164.9 $ 1,215.9
Policy loans 440.3
Other assets 100.4 43.4
--------- ---------
Total assets assumed $ 1,858.0 $ 1,699.6
--------- ---------

Policyholder account values $ 1,693.8
Annuity reserves $ 1,847.4
Other liabilities 10.6 5.8
--------- ---------
Total liabilities assumed $ 1,858.0 $ 1,699.6
--------- ---------

- -------------------------------------------------------------------------------
SUPPLEMENTAL SCHEDULE OF NON CASH FINANCING ACTIVITIES
As a result of the Conversion in 1997, as discussed in Note 1, $65 million of
retained earnings was allocated for the issuance of 600,000 shares of common
stock with a par value totaling $30 million and $35 million to paid-in
capital.

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

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Income taxes paid $ 83.0 $ 127.9 $ 153.0
Interest paid $ 23.3 $ 24.0 $ 26.1
- -------------------------------------------------------------------------------
</TABLE>

See Notes to Consolidated Financial Statements

78
<PAGE>

Pacific Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

Pacific Life Insurance Company ("Pacific Life") was established in 1868 and
is organized under the laws of the State of California as a stock life
insurance company. Pacific Life is an indirect subsidiary of Pacific Mutual
Holding Company ("PMHC"), a mutual holding company, and a wholly owned
subsidiary of Pacific LifeCorp, an intermediate stock holding company. PMHC
and Pacific LifeCorp were organized pursuant to consent received from the
Insurance Department of the State of California and the implementation of a
plan of conversion to form a mutual holding company structure in 1997 (the
"Conversion"). As a result of the Conversion, $65 million of retained
earnings was allocated for the issuance of 600,000 shares of common stock
with a par value totaling $30 million and $35 million to paid-in capital.

Pacific Life and its subsidiaries and affiliates have primary business
operations which consist of life insurance, annuities, pension and
institutional products, group employee benefits, broker-dealer operations,
and investment management and advisory services. Pacific Life's primary
business operations provide a broad range of life insurance, asset
accumulation and investment products for individuals and businesses and
offer a range of investment products to institutions and pension plans.

BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements of Pacific Life
Insurance Company and Subsidiaries (the "Company") have been prepared in
accordance with generally accepted accounting principles ("GAAP") and
include the accounts of Pacific Life and its majority owned and controlled
subsidiaries. All significant intercompany transactions and balances have
been eliminated. Pacific Life prepares its regulatory financial statements
based on accounting practices prescribed or permitted by the Insurance
Department of the State of California. These consolidated financial
statements differ from those filed with regulatory authorities (Note 2).

NEW ACCOUNTING PRONOUNCEMENTS

On January 1, 1999, the Company adopted the American Institute of Certified
Public Accountants ("AICPA") Statement of Position ("SOP") 98-1,
"Accounting for the Cost of Computer Software Developed or Obtained for
Internal Use." SOP 98-1 requires that certain costs incurred in developing
internal use computer software be capitalized. Adoption of this accounting
standard did not have a material impact on the Company's consolidated
financial statements.

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133, as amended by SFAS No.
137, "Accounting for Derivative Instruments and Hedging Activities--
Deferral of the Effective Date of FASB Statement No. 133," is effective for
fiscal years beginning after June 15, 2000. SFAS No. 133 requires, among
other things, that all derivatives be recognized in the consolidated
statements of financial condition as either assets or liabilities and
measured at estimated fair value. The corresponding derivative gains and
losses should be reported based upon the hedge relationship, if such a
relationship exists. Changes in the estimated fair value of derivatives
that are not designated as hedges or that do not meet the hedge accounting
criteria in SFAS No. 133 are required to be reported in income. The Company
is required to adopt SFAS No. 133 as of January 1, 2001. The Company is in
the process of quantifying the impact of SFAS No. 133 on its consolidated
financial statements.

During 1998, the AICPA issued SOP 98-7, "Deposit Accounting: Accounting for
Insurance and Reinsurance Contracts That Do Not Transfer Insurance Risk."
SOP 98-7 provides guidance on how to account for insurance and reinsurance
contracts that do not transfer insurance risk under a method referred to as
deposit accounting. SOP 98-7 is effective for fiscal years beginning after
June 15, 1999. The Company currently plans to adopt

79
<PAGE>

Pacific Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

SOP 98-7 on January 1, 2000. Adoption of this accounting standard is not
expected to have a material impact on the Company's consolidated financial
statements.

INVESTMENTS

Available for sale fixed maturity and equity securities are reported at
estimated fair value, with unrealized gains and losses, net of deferred
income taxes and adjustments related to deferred policy acquisition costs,
included as a separate component of equity on the accompanying consolidated
statements of financial condition. The cost of fixed maturity and equity
securities is adjusted for impairments in value deemed to be other than
temporary. Trading securities are reported at estimated fair value with
unrealized gains and losses included in net realized investment gains on
the accompanying consolidated statements of operations.

For mortgage-backed securities included in fixed maturity securities, the
Company recognizes income using a constant effective yield based on
anticipated prepayments and the estimated economic life of the securities.
When estimates of prepayments change, the effective yield is recalculated
to reflect actual payments to date and anticipated future payments. The net
investment in the securities is adjusted to the amount that would have
existed had the new effective yield been applied since the acquisition of
the securities. This adjustment is reflected in net investment income on
the accompanying consolidated statements of operations.

Realized gains and losses on investment transactions are determined on a
specific identification basis and are included in net realized investment
gains on the accompanying consolidated statements of operations.

Derivative financial instruments are carried at estimated fair value.
Unrealized gains and losses of derivatives used to hedge securities
classified as available for sale are reflected in a separate component of
equity on the accompanying consolidated statements of financial condition,
similar to the accounting of the underlying hedged assets. Realized gains
and losses on derivatives used for hedging are deferred and amortized over
the average life of the related hedged assets or liabilities. Unrealized
gains and losses of other derivatives are included in net realized
investment gains on the accompanying consolidated statements of operations.

Mortgage loans, net of valuation allowances, and policy loans are stated at
unpaid principal balances.

Real estate is carried at depreciated cost, net of writedowns, or, for real
estate acquired in satisfaction of debt, estimated fair value less
estimated selling costs at the date of acquisition if lower than the
related unpaid balance.

Partnership and joint venture interests in which the Company does not have
a controlling interest or a majority ownership are generally recorded using
the equity method of accounting and are included in other investments on
the accompanying consolidated statements of financial condition.

The Company, through its wholly owned subsidiary Pacific Asset Management
LLC ("PAM"), has an approximate 33% beneficial ownership interest in PIMCO
Advisors L.P. ("PIMCO Advisors") as of December 31, 1999 and 1998. In
December 1997, PIMCO Advisors completed a transaction in which it acquired
the assets of Oppenheimer Capital, L.P., including its interest in
Oppenheimer Capital, by issuing approximately 33 million PIMCO Advisors
General and Limited Partner units. In connection with this transaction, the
Company increased its investment in PIMCO Advisors to reflect the excess of
the Company's pro rata share of PIMCO Advisors partners' capital subsequent
to this transaction over the carrying value of the Company's investment in
PIMCO Advisors. The net result of this transaction was to directly increase
stockholder's equity by $85.1 million. During 1999 and 1998, the Company
increased its investment in PIMCO Advisors to reflect its pro rata share of
the increase to PIMCO Advisors partners' capital due to the issuance of
additional partnership units. For the years ended December 31, 1999 and
1998, there was a direct increase to the Company's stockholder's equity of
$10.6 million and $6.1 million, respectively. During 1998, the Company also
acquired the beneficial ownership of additional partnership units. Deferred
taxes resulting from these transactions have been included in the
accompanying consolidated financial statements.

80
<PAGE>

Pacific Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

On October 31, 1999, PAM entered into an Implementation and Merger
Agreement with Allianz of America, Inc. ("Allianz") and a number of other
parties in which Allianz will purchase 70% of the outstanding partnership
units of PIMCO Advisors. PAM is exchanging its interest in PIMCO Advisors
for a beneficial economic interest in a new class of PIMCO Advisors
partnership units with a cash distribution comprised of a fixed and
variable return. This transaction is anticipated to close during the first
half of 2000, subject to certain closing conditions and approvals.

In connection with this transaction, PAM has entered into a Continuing
Investment Agreement with Allianz with respect to its investment in PIMCO
Advisors. The investment in PIMCO Advisors held by PAM will be subject to
put and call options held by PAM and Allianz, respectively. The put option
gives PAM the right to require Allianz, on the last business day of each
calendar quarter, to purchase all of the investment in PIMCO Advisors held
by PAM. The put option price would be the distributions per unit amount, as
defined in the Continuing Investment Agreement, for the most recently
completed four calendar quarters multiplied by a factor of 14.0. The call
option gives Allianz the right to require PAM, on any January 31, April 30,
July 31, or October 31, beginning on January 31, 2003, to sell its
investment in PIMCO Advisors to Allianz. The call option price would be the
distributions per unit, as defined in the Continuing Investment Agreement,
for the most recently completed four calendar quarters multiplied by a
factor of 14.0 if the call per unit value is at least $50.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include all liquid debt instruments with an
original maturity of three months or less.

DEFERRED POLICY ACQUISITION COSTS

The costs of acquiring new insurance business, principally commissions,
medical examinations, underwriting, policy issue and other expenses, all of
which vary with and are primarily related to the production of new
business, have been deferred. For universal life, annuity and other
investment-type products, such costs are generally amortized over the
expected life of the contract in proportion to the present value of
expected gross profits using the assumed crediting rate. Adjustments are
reflected in earnings or equity in the period the Company experiences
deviations in gross profit assumptions. Adjustments directly affecting
equity result from experience deviations due to changes in unrealized gains
and losses in investments classified as available for sale. For traditional
life insurance products, such costs are being amortized over the premium-
paying period of the related policies in proportion to premium revenues
recognized, using assumptions consistent with those used in computing
policy reserves. For the years ended December 31, 1999, 1998 and 1997,
amortization of deferred policy acquisition costs included in commission
expenses amounted to $131.7 million, $73.0 million and $50.2 million,
respectively, and included in operating expenses amounted to $55.4 million,
$33.5 million and $29.4 million, respectively, on the accompanying
consolidated statements of operations.

UNIVERSAL LIFE AND INVESTMENT-TYPE PRODUCTS

Universal life and investment-type products, including guaranteed
investment contracts and funding agreements, are valued using the
retrospective deposit method and consist principally of deposits received
plus interest credited less accumulated assessments. Interest credited to
these policies primarily ranged from 4% to 8.4% during 1999, 1998 and 1997.

FUTURE POLICY BENEFITS

Life insurance reserves are valued using the net level premium method.
Interest rate assumptions ranged from 4.5% to 9.3% for 1999, 1998 and 1997.
Mortality, morbidity and withdrawal assumptions are generally based on the
Company's experience, modified to provide for possible unfavorable
deviations. Future dividends for

81
<PAGE>

Pacific Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

participating business are provided for in the liability for future policy
benefits. Dividends to policyholders are included in policy benefits paid
or provided on the accompanying consolidated statements of operations.

Dividends are accrued based on dividend formulas approved by the Board of
Directors and reviewed for reasonableness and equitable treatment of
policyholders by an independent consulting actuary. As of December 31, 1999
and 1998, participating experience rated policies paying dividends
represented approximately 1% of direct written life insurance in force.

REVENUES AND EXPENSES

Insurance premiums are recognized as revenue when due. Benefits and
expenses, other than deferred policy acquisition costs, are recognized when
incurred.

Generally, receipts for universal life, annuities and other investment-type
products are classified as deposits. Policy fees from these contracts
include mortality charges, surrender charges and earned policy service
fees. Expenses related to these products include interest credited to
account balances and benefit amounts in excess of account balances.

Commission revenue from Pacific Life's broker-dealer subsidiaries is
recorded on the trade date.

DEPRECIATION AND AMORTIZATION

Depreciation of investment real estate is computed on the straight-line
method over the estimated useful lives which range from 5 to 30 years.
Certain other assets are depreciated or amortized on the straight-line
method over periods ranging from 3 to 40 years. Depreciation of investment
real estate is included in net investment income on the accompanying
consolidated statements of operations. Depreciation and amortization of
certain other assets is included in operating expenses on the accompanying
consolidated statements of operations.

INCOME TAXES

Pacific Life is taxed as a life insurance company for income tax purposes
and is included in the consolidated income tax returns of PMHC. Prior to
1998, Pacific Life was subject to an equity tax calculated by a prescribed
formula that incorporated a differential earnings rate between stock and
mutual life insurance companies. In December 1998, the Internal Revenue
Service released Revenue Ruling 99-3 which exempts Pacific Life from this
tax for taxable years beginning in 1998. Deferred income taxes are provided
for timing differences in the recognition of revenues and expenses for
financial reporting and income tax purposes.

SEPARATE ACCOUNTS

Separate account assets are recorded at market value and the related
liabilities represent segregated contract owner funds maintained in
accounts with individual investment objectives. The investment results of
separate account assets generally pass through to separate account contract
owners.

ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair value of financial instruments, disclosed in Notes 5, 6
and 7, has been determined using available market information and
appropriate valuation methodologies. However, considerable judgment is
required to interpret market data to develop the estimates of fair value.
Accordingly, the estimates presented may not be indicative of the amounts
the Company could realize in a current market exchange. The use of
different market assumptions and/or estimation methodologies could have a
significant effect on the estimated fair value amounts.

82
<PAGE>

Pacific Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

RISKS AND UNCERTAINTIES

The Company operates in a business environment which is subject to various
risks and uncertainties. Such risks and uncertainties include, but are not
limited to, interest rate risk, investment market risk, credit risk and
legal and regulatory changes.

Interest rate risk is the potential for interest rates to change, which can
cause fluctuations in the value of investments. To the extent that
fluctuations in interest rates cause the duration of assets and liabilities
to differ, the Company may have to sell assets prior to their maturity and
realize losses. The Company controls its exposure to this risk by, among
other things, asset/liability matching techniques which attempt to match
the duration of assets and liabilities and utilization of derivative
instruments. Additionally, the Company includes contractual provisions
limiting withdrawal rights for certain of its products. A substantial
portion of the Company's liabilities are not subject to surrender or can be
surrendered only after deduction of a surrender charge or a market value
adjustment.

Credit risk is the risk that issuers of investments owned by the Company
may default or that other parties may not be able to pay amounts due to the
Company. The Company manages its investments to limit credit risk by
diversifying its portfolio among various security types and industry
sectors. The credit risk of financial instruments is controlled through
credit approval procedures, limits and ongoing monitoring. Real estate and
mortgage loan investment risks are limited by diversification of geographic
location and property type. Management does not believe that significant
concentrations of credit risk exist.

The Company is also exposed to credit loss in the event of nonperformance
by the counterparties to interest rate swap contracts and other derivative
securities. The Company manages this risk through credit approvals and
limits on exposure to any specific counterparty. However, the Company does
not anticipate nonperformance by the counterparties.

The Company is subject to various state and Federal regulatory authorities.
The potential exists for changes in regulatory initiatives which can result
in additional, unanticipated expense to the Company. Existing Federal laws
and regulations affect the taxation of life insurance or annuity products,
and insurance companies. There can be no assurance as to what, if any,
cases might be decided or future legislation might be enacted, or if
decided or enacted, whether such cases or legislation would contain
provisions with possible negative effects on the Company's life insurance
or annuity products.

USE OF ESTIMATES

The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.

RECLASSIFICATIONS

Certain prior year amounts have been reclassified to conform to the 1999
financial statement presentation.

83
<PAGE>

Pacific Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. STATUTORY RESULTS

The following are reconciliations of statutory capital and surplus, and
statutory net income for Pacific Life, as calculated in accordance with
accounting practices prescribed or permitted by the Insurance Department of
the State of California, to the amounts reported as stockholder's equity
and net income included on the accompanying consolidated financial
statements:

<TABLE>
<CAPTION>
December 31,
1999 1998
------------------
(In Millions)
<S> <C> <C>
Statutory capital and surplus $1,219.1 $1,157.4
Deferred policy acquisition costs 1,398.6 944.5
Deferred income taxes 304.5 307.1
Asset valuation reserve 232.1 298.7
Non admitted assets 83.3 40.4
Subsidiary equity 25.2 26.5
Surplus notes (149.6) (149.6)
Unrealized gain (loss) on securities
available for sale, net (278.0) 508.3
Insurance and annuity reserves (845.2) (654.4)
Other (75.2) (150.9)
------------------
Stockholder's equity as reported herein $1,914.8 $2,328.0
------------------
</TABLE>

<TABLE>
<CAPTION>
Years Ended December 31,
1999 1998 1997
-------------------------
(In Millions)
<S> <C> <C> <C>
Statutory net income $ 168.4 $ 187.6 $ 121.5
Deferred policy acquisition costs 379.2 177.3 160.4
Deferred income taxes (2.7) 17.9 41.2
Earnings of subsidiaries (27.5) (32.8) (40.6)
Insurance and annuity reserves (184.3) (145.1) (107.0)
Other 37.9 36.6 0.5
-------------------------
Net income as reported herein $ 371.0 $ 241.5 $ 176.0
-------------------------
</TABLE>

84
<PAGE>

Pacific Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. STATUTORY RESULTS (Continued)

RISK-BASED CAPITAL

Risk-based capital is a method developed by the National Association of
Insurance Commissioners ("NAIC") to measure the minimum amount of capital
appropriate for an insurance company to support its overall business
operations in consideration of its size and risk profile. The formulas for
determining the amount of risk-based capital specify various weighting
factors that are applied to financial balances or various levels of
activity based on the perceived degree of risk. The adequacy of a company's
actual capital is measured by the risk-based capital results as determined
by the formulas. Companies below minimum risk-based capital requirements
are classified within certain levels, each of which requires specified
corrective action. As of December 31, 1999 and 1998, Pacific Life and
Pacific Life & Annuity Company, formerly PM Group Life Insurance Company, a
wholly owned Arizona domiciled life insurance subsidiary of Pacific Life,
exceeded the minimum risk-based capital requirements.

CODIFICATION

In 1998, the NAIC adopted the Codification of Statutory Accounting
Principles ("Codification"). The Codification, which is intended to
standardize regulatory accounting and reporting for the insurance industry,
is proposed to be effective January 1, 2001. However, statutory accounting
principles will continue to be established by individual state laws and
permitted practices and it is uncertain when, or if, the states of
California and Arizona will require adoption of Codification for the
preparation of statutory financial statements. The Company has not
finalized the quantification of the effects of Codification on its
statutory financial statements.

DIVIDEND RESTRICTIONS

Dividend payments by Pacific Life to Pacific LifeCorp in any 12-month
period cannot exceed the greater of 10% of statutory capital and surplus as
of the preceding year-end or the statutory net gain from operations for the
previous calendar year, without prior approval from the Insurance
Department of the State of California. Based on this limitation and 1999
statutory results, Pacific Life could pay $174.0 million in dividends in
2000 without prior approval. No dividends were paid during 1999 and 1998.

The maximum amount of ordinary dividends that can be paid by PL&A without
restriction cannot exceed the lesser of 10% of statutory surplus as regards
to policyholders, or the statutory net gain from operations. No dividends
were paid during 1999 and 1998.

PERMITTED PRACTICE

Net cash distributions received on PAM's investment in PIMCO Advisors are
recorded as income as permitted by the Insurance Department of the State of
California for statutory accounting purposes.

3. CLOSED BLOCK

In connection with the Conversion, an arrangement known as a closed block
(the "Closed Block") was established, for dividend purposes only, for the
exclusive benefit of certain individual life insurance policies that had an
experience based dividend scale for 1997. The Closed Block was designed to
give reasonable assurance to holders of Closed Block policies that policy
dividends will not change solely as a result of the Conversion.

Assets that support the Closed Block, which are primarily included in fixed
maturity securities, policy loans and accrued investment income, amounted
to $293.5 million and $311.6 million as of December 31, 1999 and 1998,
respectively. Liabilities allocated to the Closed Block, which are
primarily included in future policy benefits amounted to $341.8 million and
$352.8 million as of December 31, 1999 and 1998, respectively. The
contribution

85
<PAGE>

Pacific Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3. CLOSED BLOCK (Continued)

to income from the Closed Block amounted to $3.8 million, $5.1 million and
$5.7 million and is primarily included in insurance premiums, net
investment income and policy benefits paid or provided for the years ended
December 31, 1999, 1998 and 1997, respectively.

4. ACQUISITIONS

Effective July 15, 1999, Pacific Life acquired a payout annuity block of
business from Confederation Life Insurance Company (U.S.) in
Rehabilitation, which is currently under rehabilitation ("Confederation
Life"). This block of business consists of approximately 16,000 annuitants
having reserves of $1.8 billion. The assets received as part of this
acquisition amounted to $1.6 billion in fixed maturity securities and $0.2
billion in cash.

The remaining cost of acquiring this annuity business, representing the
amount equal to the excess of the estimated fair value of the reserves
assumed over the estimated fair value of the assets acquired, amounted to
$74.5 million as of December 31, 1999, and is included in deferred policy
acquisition costs on the accompanying consolidated statement of financial
condition. Amortization of this asset for the year ended December 31, 1999
amounted to $0.4 million, and is included in commission expense on the
accompanying consolidated statement of operations.

On June 1, 1997, Pacific Life acquired a block of corporate-owned life
insurance ("COLI") policies from Confederation Life, which consisted of
approximately 38,000 policies having a face amount of insurance of
$8.6 billion and reserves of $1.7 billion. The assets received as part of
this acquisition amounted to $1.2 billion in cash and $0.4 billion in
policy loans. This block is primarily non leveraged COLI.

The remaining cost of acquiring this COLI business, representing the amount
equal to the excess of the estimated fair value of the reserves assumed
over the estimated fair value of the assets acquired, amounted to $27.9
million and $36.5 million as of December 31, 1999 and 1998, respectively,
and is included in deferred policy acquisition costs on the accompanying
consolidated statements of financial condition. Amortization of this asset
for the years ended December 31, 1999, 1998 and 1997 amounted to $8.6
million, $7.7 million and $0.9 million, respectively, and is included in
commission expenses on the accompanying consolidated statements of
operations.

During 1999, Pacific Life acquired a 95% interest in Grayhawk Golf
Holdings, LLC, which owns 100% of a real estate investment property in
Arizona.

86
<PAGE>

Pacific Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5. INVESTMENT IN FIXED MATURITY AND EQUITY SECURITIES

The amortized cost, gross unrealized gains and losses, and estimated fair
value of fixed maturity and equity securities available for sale are shown
below. The estimated fair value of publicly traded securities is based on
quoted market prices. For securities not actively traded, estimated fair
values were provided by independent pricing services specializing in
"matrix pricing" and modeling techniques. The Company also estimates
certain fair values based on interest rates, credit quality and average
maturity or from securities with comparable trading characteristics.

<TABLE>
<CAPTION>
Gross Unrealized
Amortized ----------------- Estimated
Cost Gains Losses Fair Value
--------------------------------------
(In Millions)
<S> <C> <C> <C> <C>
As of December 31, 1999:
-----------------------
U.S. Treasury securities and
obligations of U.S. government
authorities and agencies $ 107.7 $ 9.3 $ 1.0 $ 116.0
Obligations of states, political
subdivisions 642.0 13.0 27.7 627.3
Foreign governments 285.0 10.5 6.7 288.8
Corporate securities 8,725.0 220.3 387.4 8,557.9
Mortgage-backed and asset-backed
securities 5,323.8 33.7 251.1 5,106.4
Redeemable preferred stock 108.5 14.2 5.1 117.6
--------------------------------------
Total fixed maturity securities $15,192.0 $ 301.0 $ 679.0 $14,814.0
--------------------------------------
Total equity securities $ 269.3 $ 57.0 $ 31.1 $ 295.2
--------------------------------------
As of December 31, 1998:
-----------------------
U.S. Treasury securities and
obligations of U.S. government
authorities and agencies $ 95.6 $ 25.1 $ 120.7
Obligations of states, political
subdivisions 481.9 91.3 $ 11.8 561.4
Foreign governments 253.1 28.3 4.3 277.1
Corporate securities 7,888.7 446.3 124.5 8,210.5
Mortgage-backed and asset-backed
securities 4,434.7 143.1 53.0 4,524.8
Redeemable preferred stock 104.0 11.3 5.1 110.2
--------------------------------------
Total fixed maturity securities $13,258.0 $ 745.4 $ 198.7 $13,804.7
--------------------------------------
Total equity securities $ 364.4 $ 202.6 $ 19.5 $ 547.5
--------------------------------------
</TABLE>

87
<PAGE>

Pacific Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5. INVESTMENT IN FIXED MATURITY AND EQUITY SECURITIES (Continued)

The amortized cost and estimated fair value of fixed maturity securities
available for sale as of December 31, 1999, by contractual repayment date
of principal, are shown below. Expected maturities may differ from
contractual maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties.

<TABLE>
<CAPTION>
Amortized Estimated
Cost Fair Value
--------------------
(In Millions)
<S> <C> <C>
Due in one year or less $ 566.5 $ 572.6
Due after one year through five years 3,324.0 3,366.5
Due after five years through ten years 2,995.9 2,921.4
Due after ten years 2,981.8 2,847.1
--------------------
9,868.2 9,707.6
Mortgage-backed and asset-backed
securities 5,323.8 5,106.4
--------------------
Total $15,192.0 $14,814.0
--------------------
</TABLE>

Major categories of investment income are summarized as follows:

<TABLE>
<CAPTION>
Years Ended December 31,
1999 1998 1997
--------------------------
(In Millions)
<S> <C> <C> <C>
Fixed maturity securities $1,030.3 $ 929.7 $ 940.2
Equity securities 14.6 13.5 10.2
Mortgage loans 205.6 174.6 129.5
Real estate 46.5 38.1 53.6
Policy loans 158.6 161.5 144.3
Other 131.7 203.2 156.2
--------------------------
Gross investment income 1,587.3 1,520.6 1,434.0
Investment expense 114.0 107.0 108.6
--------------------------
Net investment income $1,473.3 $1,413.6 $1,325.4
--------------------------
</TABLE>

88
<PAGE>

Pacific Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5. INVESTMENT IN FIXED MATURITY AND EQUITY SECURITIES (Continued)

Net realized investment gain, including changes in valuation allowances,
are as follows:

<TABLE>
<CAPTION>
Years Ended December 31,
1999 1998 1997
------------------------
(In Millions)
<S> <C> <C> <C>
Fixed maturity securities available for
sale:
Gross gain $ 89.3 $ 92.7 $ 56.3
Gross loss (72.9) (84.8) (31.1)
Equity securites available for sale:
Gross gain 109.0 40.9 36.1
Gross loss (52.0) (6.8) (6.2)
Mortgage loans on real estate 10.1 (10.7) (4.6)
Real estate 18.0 1.2 16.9
Other investments 6.9 18.0
------------------------
Total $101.5 $ 39.4 $ 85.4
------------------------
</TABLE>

The change in gross unrealized gain on investments in available for sale
and trading securities is as follows:

<TABLE>
<CAPTION>
December 31,
1999 1998 1997
--------------------------
(In Millions)
<S> <C> <C> <C>
Available for sale securities:
Fixed maturity $ (924.7) $(229.5) $223.5
Equity (157.2) 63.1 85.7
--------------------------
Total $(1,081.9) $(166.4) $309.2
--------------------------
Trading securities $ 0.4 $ (2.5) $ (1.1)
--------------------------
</TABLE>

As of December 31, 1999 and 1998, investments in fixed maturity securities
with a carrying value of $12.6 million and $13.0 million, respectively,
were on deposit with state insurance departments to satisfy regulatory
requirements. One diversified financial security, rated AA, exceeds 10% of
total stockholder's equity as of December 31, 1999.

89
<PAGE>

Pacific Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6. FINANCIAL INSTRUMENTS

The estimated fair values of the Company's financial instruments are as
follows:

<TABLE>
<CAPTION>
December 31, 1999 December 31, 1998
-------------------- --------------------
Carrying Estimated Carrying Estimated
Amount Fair Value Amount Fair Value
-----------------------------------------
(In Millions)
<S> <C> <C> <C> <C>
Assets:
Fixed maturity and equity
securities (Note 5) $15,109.2 $15,109.2 $14,352.2 $14,352.2
Trading securities 99.9 99.9 97.0 97.0
Mortgage loans 2,920.2 2,983.8 2,788.7 2,911.2
Policy loans 4,258.5 4,258.5 4,003.2 4,003.2
Cash and cash equivalents 439.4 439.4 154.1 154.1
Derivative instruments 43.5 43.5 176.1 176.1
Liabilities:
Guaranteed interest contracts 6,365.0 6,296.3 5,665.3 5,751.0
Deposit liabilities 544.9 533.7 599.9 626.7
Annuity liabilities 1,323.3 1,304.8 1,448.0 1,430.1
Short-term debt 60.0 60.0 295.5 295.5
Long-term debt 164.4 164.3 149.6 176.0
Derivative instruments 229.5 229.5 36.0 36.0
</TABLE>

90
<PAGE>

Pacific Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6. FINANCIAL INSTRUMENTS (Continued)

The following methods and assumptions were used to estimate the fair value
of these financial instruments as of December 31, 1999 and 1998:

TRADING SECURITIES

The estimated fair value of trading securities is based on quoted market
prices.

MORTGAGE LOANS

The estimated fair value of the mortgage loan portfolio is determined by
discounting the estimated future cash flows, using a year-end market rate
which is applicable to the yield, credit quality and average maturity of
the composite portfolio.

POLICY LOANS

The carrying amounts of policy loans are a reasonable estimate of their
fair values because interest rates are generally variable and based on
current market rates.

CASH AND CASH EQUIVALENTS

The carrying values approximate fair values due to the short-term
maturities of these instruments.

GUARANTEED INTEREST CONTRACTS AND DEPOSIT LIABILITIES

The estimated fair value of fixed maturity guaranteed interest contracts is
estimated using the rates currently offered for deposits of similar
remaining maturities. The estimated fair value of deposit liabilities with
no defined maturities is the amount payable on demand.

ANNUITY LIABILITIES

The estimated fair value of annuity liabilities approximates carrying value
and primarily includes policyholder deposits and accumulated credited
interest.

SHORT-TERM DEBT

The carrying amount of short-term debt is a reasonable estimate of its fair
value because the interest rates are variable and based on current market
rates.

LONG-TERM DEBT

The estimated fair value of surplus notes is based on market quotes. The
carrying amount of other long-term debt is a reasonable estimate of its
fair value because the interest on the debt is approximately the same as
current market rates.

FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

Pacific Life has issued certain contracts to 401(k) plans totaling $1.7
billion as of December 31, 1999, pursuant to the terms of which the 401(k)
plan retains direct ownership and control of the assets related to these
contracts. Pacific Life agrees to provide benefit responsiveness in the
event that plan benefit requests exceed plan cash flows. In return for this
guarantee, Pacific Life receives a fee which varies by contract. Pacific
Life sets the investment guidelines to provide for appropriate credit
quality and cash flow matching.

91
<PAGE>

Pacific Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7. DERIVATIVE INSTRUMENTS

Derivatives are financial instruments whose value or cash flows are
"derived" from another source, such as an underlying security. They can
facilitate total return and, when used for hedging, they achieve the lowest
cost and most efficient execution of positions. Derivatives can also be
used as leverage by using very large notional amounts or by creating
formulas that multiply changes in the underlying security. The Company's
approach is to avoid highly leveraged or overly complex investments. The
Company utilizes certain derivative financial instruments to diversify its
business risk and to minimize its exposure to fluctuations in market
prices, interest rates or basis risk as well as for facilitating total
return. Risk is limited through modeling derivative performance in product
portfolios for hedging and setting loss limits in total return portfolios.

Derivatives used by the Company involve elements of credit risk and market
risk in excess of amounts recognized on the accompanying consolidated
financial statements. The notional amounts of these instruments reflect the
extent of involvement in the various types of financial instruments. The
estimated fair values of these instruments are based on dealer quotations
or internal price estimates believed to be comparable to dealer quotations.
These amounts estimate what the Company would have to pay or receive if the
contracts were terminated at that time. The Company determines, on an
individual counterparty basis, the need for collateral or other security to
support financial instruments with off balance sheet counterparty risk.

Outstanding derivatives with off balance sheet risks, shown in notional or
contract amounts along with their carrying value and estimated fair values
as of December 31, 1999 and 1998 are as follows:

<TABLE>
<CAPTION>
Assets (Liabilities)
----------------------------------------------------------
Notional or Carrying Estimated Carrying Estimated
Contract Amounts Value Fair Value Value Fair Value
----------------- -------- ---------- -------- ----------
1999 1998 1999 1999 1998 1998
----------------------------------------------------------
(In Millions)
<S> <C> <C> <C> <C> <C> <C>
Interest rate floors,
caps, options and
swaptions $1,003.0 $2,653.0 $ 5.0 $ 5.0 $ 67.9 $ 67.9
Interest rate swap
contracts 2,867.5 2,608.6 38.5 38.5 (23.3) (23.3)
Asset swap contracts 58.1 63.2 (3.6) (3.6) (3.6) (3.6)
Credit default and total
return swaps 2,061.9 649.6 (43.1) (43.1) (9.1) (9.1)
Financial futures
contracts 676.8 608.9
Foreign currency
derivatives 1,685.1 1,131.2 (182.8) (182.8) 108.2 108.2
----------------------------------------------------------
Total derivatives $8,352.4 $7,714.5 $(186.0) $(186.0) $140.1 $140.1
----------------------------------------------------------
</TABLE>

92
<PAGE>

Pacific Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7. DERIVATIVE INSTRUMENTS (Continued)

A reconciliation of the notional or contract amounts and discussion of the
various derivative instruments are as follows:

<TABLE>
<CAPTION>
Balance Terminations Balance
Beginning and End
of Year Acquisitions Maturities of Year
--------------------------------------------
(In Millions)
<S> <C> <C> <C> <C>
December 31, 1999:
------------------
Interest rate floors, caps,
options and swaptions $2,653.0 $ 670.9 $2,320.9 $1,003.0
Interest rate swap
contracts 2,608.6 1,226.2 967.3 2,867.5
Asset swap contracts 63.2 7.8 12.9 58.1
Credit default and total
return swaps 649.6 1,617.3 205.0 2,061.9
Financial futures contracts 608.9 5,586.8 5,518.9 676.8
Foreign currency
derivatives 1,131.2 874.0 320.1 1,685.1

December 31, 1998:
------------------
Interest rate floors, caps,
options and swaptions 2,730.0 160.6 237.6 2,653.0
Interest rate swap
contracts 2,026.1 960.8 378.3 2,608.6
Asset swap contracts 67.4 30.3 34.5 63.2
Credit default and total
return swaps 288.5 771.5 410.4 649.6
Financial futures contracts 214.1 4,108.4 3,713.6 608.9
Foreign currency
derivatives 207.0 959.4 35.2 1,131.2
</TABLE>

Interest Rate Floors, Caps, Options and Swaptions
-------------------------------------------------

The Company uses interest rate floors, caps, options and swaptions to hedge
against fluctuations in interest rates and to take positions in its total
return portfolios. Interest rate floor agreements entitle the Company to
receive the difference when the current rate of the underlying index is
below the strike rate. Interest rate cap agreements entitle the Company to
receive the difference when the current rate of the underlying index is
above the strike rate. Options purchased involve the right, but not the
obligation, to purchase the underlying securities at a specified price
during a given time period. Swaptions are options to enter into a swap
transaction at a specified price. The Company uses written covered call
options on a limited basis. Gains and losses on covered calls are offset by
gains and losses on the underlying position. Floors, caps and options are
reported as assets and options written are reported as liabilities on the
accompanying consolidated statements of financial condition. Cash
requirements for these instruments are generally limited to the premium
paid by the Company at acquisition. The purchase premium of these
instruments is amortized on a constant effective yield basis and included
as a component of net investment income on the accompanying consolidated
statements of operations over the term of the agreement. Interest rate
floors and caps, options and swaptions mature during the years 2000 through
2017.

Interest Rate Swap Contracts
----------------------------

The Company uses interest rate swaps to manage interest rate risk and to
take positions in its total return portfolios. The interest rate swap
agreements generally involve the exchange of fixed and floating rate
interest payments or the exchange of floating to floating interest payments
tied to different indexes. Generally, no premium is paid to enter into the
contract and no principal payments are made by either party. The amounts to

93
<PAGE>

Pacific Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7. DERIVATIVE INSTRUMENTS (Continued)

be received or paid pursuant to these agreements are accrued and recognized
through an adjustment to net investment income on the accompanying
consolidated statements of operations over the life of the agreements. The
interest rate swap contracts mature during the years 2000 through 2021.

Asset Swap Contracts
--------------------

The Company uses asset swap contracts to manage interest rate and equity
risk to better match portfolio duration to liabilities. Asset swap
contracts involve the exchange of upside equity potential for fixed income
streams. The amounts to be received or paid pursuant to these agreements
are accrued and recognized through an adjustment to net investment income
on the accompanying consolidated statements of operations over the life of
the agreements. The asset swap contracts mature during the years 2000
through 2005.

Credit Default and Total Return Swaps
-------------------------------------

The Company uses credit default and total return swaps to take advantage of
market opportunities. Credit default swaps involve the receipt of fixed
rate payments in exchange for assuming potential credit exposure of an
underlying security. Total return swaps involve the exchange of floating
rate payments for the total return performance of a specified index or
market. The amounts to be received or paid pursuant to these agreements are
accrued and recognized through an adjustment to net investment income on
the accompanying consolidated statements of operations over the life of the
agreements. Credit default and total return swaps mature during the years
2000 through 2028.

Financial Futures Contracts
---------------------------

The Company uses exchange-traded financial futures contracts to hedge cash
flow timing differences between assets and liabilities and overall
portfolio duration. Assets and liabilities are rarely acquired or sold at
the same time, which creates a need to hedge their change in value during
the unmatched period. In addition, foreign currency futures may be used to
hedge foreign currency risk on non-U.S. dollar denominated securities.
Financial futures contracts obligate the holder to buy or sell the
underlying financial instrument at a specified future date for a set price
and may be settled in cash or by delivery of the financial instrument.
Price changes on futures are settled daily through the required margin cash
flows. The notional amounts of the contracts do not represent future cash
requirements, as the Company intends to close out open positions prior to
expiration.

Foreign Currency Derivatives
----------------------------

The Company enters into foreign exchange forward contracts and swaps to
hedge against fluctuations in foreign currency exposure. Foreign currency
derivatives involve the exchange of foreign currency denominated payments
for U.S. dollar denominated payments. Gains and losses on foreign exchange
forward contracts offset losses and gains, respectively, on the related
foreign currency denominated assets. The amounts to be received or paid
under the foreign currency swaps are accrued and recognized through an
adjustment to net investment income on the accompanying consolidated
statements of operations over the life of the agreements. Foreign currency
derivatives expire during the years 2000 through 2013.

94
<PAGE>

Pacific Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8. UNIVERSAL LIFE AND INVESTMENT-TYPE PRODUCTS

The detail of universal life and investment-type product liabilities is as
follows:

<TABLE>
<CAPTION>
December 31,
1999 1998
-------------------
(In Millions)
<S> <C> <C>
Universal life $10,807.7 $10,218.0
Investment-type products 8,237.8 7,755.0
-------------------
$19,045.5 $17,973.0
-------------------
</TABLE>

The detail of universal life and investment-type product policy fees and
interest credited net of reinsurance ceded is as follows:

<TABLE>
<CAPTION>
Years Ended
December 31,
1999 1998 1997
--------------------
(In Millions)
<S> <C> <C> <C>
Policy fees:
Universal life $509.2 $439.9 $377.5
Investment-type products 144.6 85.4 53.7
--------------------
Total policy fees $653.8 $525.3 $431.2
--------------------
Interest credited:
Universal life $443.9 $440.8 $368.2
Investment-type products 460.5 440.0 429.6
--------------------
Total interest credited $904.4 $880.8 $797.8
--------------------
</TABLE>

95
<PAGE>

Pacific Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9. LIABILITY FOR UNPAID CLAIMS AND CLAIM ADJUSTMENT EXPENSES

Activity in the liability for unpaid claims and claim adjustment expenses,
which is included in future policy benefits on the accompanying
consolidated statements of financial condition, is summarized as follows:

<TABLE>
<CAPTION>
Years Ended
December 31,
1999 1998
--------------
(In Millions)
<S> <C> <C>
Balance at January 1 $137.4 $140.5
Less reinsurance recoverables 0.1 0.7
--------------
Net balance at January 1 137.3 139.8
--------------
Incurred related to:
Current year 376.8 412.9
Prior years (33.8) (18.3)
--------------
Total incurred 343.0 394.6
--------------
Paid related to:
Current year 286.7 303.5
Prior years 77.1 93.6
--------------
Total paid 363.8 397.1
--------------
Net balance at December 31 116.5 137.3
Plus reinsurance recoverables 0.1 0.1
--------------
Balance at December 31 $116.6 $137.4
--------------
</TABLE>

As a result of payment of prior years' estimated claims, the provision for
claims and claim adjustment expenses decreased by $33.8 million and $18.3
million for the years ended December 31, 1999 and 1998, respectively. The
reduction is primarily due to lower than anticipated settlement of claims
and reduced claim adjustment expenses.

96
<PAGE>

Pacific Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10. SHORT-TERM AND LONG-TERM DEBT

Pacific Life borrows for short-term needs by issuing commercial paper.
There was no commercial paper debt outstanding as of December 31, 1999.
Principal of $234.9 million and interest payable of $0.6 million was
outstanding as of December 31, 1998 bearing an average interest rate of
5.2%. As of December 31, 1999 and 1998, Pacific Life had a revolving credit
facility of $350 million. There was no debt outstanding under the revolving
credit facility as of December 31, 1999 and 1998.

PAM had bank borrowings outstanding of $60 million as of December 31, 1999
and 1998. The interest rate was 6.0%, 5.1% and 6.2% as of December 31,
1999, 1998 and 1997, respectively. Outstanding debt is due and payable in
2000 and subject to renewal. The borrowing limit for PAM as of December 31,
1999 and 1998 was $100 million and $200 million, respectively.

In connection with Pacific Life's acquisition of Grayhawk Golf Holdings,
LLC in 1999, the Company assumed a note payable with a maturity date of May
22, 2008. The note bears a fixed rate of interest of 7.6%. The outstanding
balance as of December 31, 1999 was $14.8 million.

Pacific Life has $150 million of long-term debt which consists of surplus
notes outstanding at an interest rate of 7.9% maturing on December 30,
2023. Interest is payable semiannually on June 30 and December 30. The
surplus notes may not be redeemed at the option of Pacific Life or any
holder of the surplus notes. The surplus notes are unsecured and
subordinated to all present and future senior indebtedness and policy
claims of Pacific Life. Each payment of interest on and the payment of
principal of the surplus notes may be made only with the prior approval of
the Insurance Commissioner of the State of California. Interest expense
amounted to $11.8 million for each of the years ended December 31, 1999,
1998 and 1997 and is included in net investment income on the accompanying
consolidated statements of operations.

97
<PAGE>

Pacific Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11. INCOME TAXES

The Company accounts for income taxes using the liability method. The
deferred tax consequences of changes in tax rates or laws must be computed
on the amounts of temporary differences and carryforwards existing at the
date a new tax law is enacted. Recording the effects of a change involves
adjusting deferred tax liabilities and assets with a corresponding charge
or credit recognized in the provision for income taxes. The objective is to
measure a deferred tax liability or asset using the enacted tax rates and
laws expected to apply to taxable income in the periods in which the
deferred tax liability or asset is expected to be settled or realized.

The provision for income taxes is as follows:

<TABLE>
<CAPTION>
Years Ended
December 31,
1999 1998 1997
----------------------
(In Millions)
<S> <C> <C> <C>
Current $152.2 $134.1 $127.9
Deferred (8.5) (20.6) (14.4)
----------------------
$143.7 $113.5 $113.5
----------------------
</TABLE>

The sources of the Company's provision for deferred taxes are as follows:

<TABLE>
<CAPTION>
Years Ended
December 31,
1999 1998 1997
----------------------
(In Millions)
<S> <C> <C> <C>
Policyholder reserves $ 50.9 $(29.5) $ 20.1
Deferred policy acquisition costs 20.0 (12.6) (18.0)
Non deductible reserves 4.0 28.2 (27.6)
Partnership income (25.6) 20.8
Investment valuation (28.0) (24.5) 3.9
Duration hedging (29.6) 20.8 (2.6)
Other (0.2) (2.6) 9.8
----------------------
Deferred taxes from operations (8.5) 0.6 (14.4)
Release of subsidiary deferred
taxes (21.2)
----------------------
Deferred tax provision $ (8.5) $(20.6) $(14.4)
----------------------
</TABLE>

The Company's acquisition of a controlling interest in a subsidiary allowed
such subsidiary to be included in PMHC's consolidated income tax return.
That inclusion resulted in the release of certain deferred taxes in 1998.

98
<PAGE>

Pacific Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11. INCOME TAXES (Continued)

A reconciliation of the provision for income taxes based on the prevailing
corporate statutory tax rate to the provision reflected in the consolidated
financial statements is as follows:

<TABLE>
<CAPTION>
Years Ended
December 31,
1999 1998 1997
----------------------
(In Millions)
<S> <C> <C> <C>
Provision for income taxes at the statutory
rate $180.1 $124.2 $101.3
Amortization of intangibles on equity
method investments 2.0 4.3 7.6
Non taxable investment income (7.3) (3.6) (2.6)
Tax settlement (7.5)
Low income housing tax credits (19.2) (3.9)
Equity tax (5.0) 5.0
Other (4.4) (2.5) 2.2
----------------------
Provision for income taxes $143.7 $113.5 $113.5
----------------------
</TABLE>

The net deferred tax asset (liability), included in other assets on the
accompanying consolidated statements of financial condition, is comprised
of the following tax effected temporary differences:

<TABLE>
<CAPTION>
December 31,
1999 1998
---------------
(In Millions)
<S> <C> <C>
Deferred tax assets
Policyholder reserves $203.4 $ 254.3
Investment valuation 72.7 44.7
Deferred compensation 35.4 33.7
Duration hedging 21.1 (8.5)
Postretirement benefits 9.0 8.9
Dividends 8.4 7.6
Partnership income 4.8 (20.8)
Non deductible reserves 1.9 5.9
Other 3.1 5.2
---------------
Total deferred tax assets 359.8 331.0

Deferred tax liabilities
Deferred policy acquisition costs 44.0 24.0
Depreciation 2.7 2.4
---------------
Total deferred tax liabilities 46.7 26.4
---------------
Net deferred tax asset from operations 313.1 304.6
Unrealized (gain) loss on securities 150.8 (272.3)
Issuance of partnership units by affiliate (81.1) (74.9)
---------------
Net deferred tax asset (liability) $382.8 $ (42.6)
---------------
</TABLE>

99
<PAGE>

Pacific Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

12. COMPREHENSIVE INCOME

The Company displays comprehensive income and its components on the
accompanying consolidated statements of stockholder's equity and the note
herein. Other comprehensive income is shown net of reclassification
adjustments and net of income tax in the accompanying consolidated
statements of stockholder's equity. The disclosure of the gross components
of other comprehensive income is as follows:

<TABLE>
<CAPTION>
Years Ended December 31,
1999 1998 1997
--------------------------
(In Millions)
<S> <C> <C> <C>
Calculation of Holding Gain (Loss):
-----------------------------------
Gross holding gain (loss) on securities
available for sale $(1,179.7) $(53.8) $ 359.8
Deferred policy acquisition costs 43.9 (6.9) (3.1)
Tax (expense) benefit 397.7 21.1 (125.1)
--------------------------
Holding gain (loss) on securities available
for sale, net of tax $ (738.1) $(39.6) $ 231.6
--------------------------
Calculation of Reclassification Adjustment:
-------------------------------------------
Realized gain on sale of securities
available for sale $ 73.4 $ 42.0 $ 55.1
Tax expense (25.2) (14.7) (19.5)
--------------------------
Reclassification adjustment, net of tax $ 48.2 $ 27.3 $ 35.6
--------------------------
Amounts Reported in Other Comprehensive Income:
-----------------------------------------------
Holding gain (loss) on securities available
for sale, net of tax $ (738.1) $(39.6) $ 231.6
Less reclassification adjustment, net of tax 48.2 27.3 35.6
--------------------------
Net unrealized gain (loss) recognized in
other comprehensive income (loss) $ (786.3) $(66.9) $ 196.0
--------------------------
</TABLE>

100
<PAGE>

Pacific Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13. REINSURANCE

The Company has reinsurance agreements with other insurance companies for
the purpose of diversifying risk and limiting exposure on larger mortality
risks or, in the case of a producer-owned reinsurance company, to diversify
risk and retain top producing agents. Amounts receivable from reinsurers
for reinsurance of future policy benefits, universal life deposits, and
unpaid losses is reported as an asset and included in other assets on the
accompanying consolidated statements of financial condition. All assets
associated with business reinsured on a yearly renewable term and modified
coinsurance basis remain with, and under the control of the Company.
Approximate amounts recoverable (payable) from (to) reinsurers include the
following amounts:

<TABLE>
<CAPTION>
December 31,
1999 1998
--------------
(In Millions)
<S> <C> <C>
Reinsured universal life deposits $(55.3) $(46.0)
Future policy benefits 141.8 108.9
Unpaid claims 8.5 12.5
Paid claims 6.4 24.3
</TABLE>

As of December 31, 1999, 74% of the reinsurance recoverables were from one
reinsurer, of which 100% is secured by payables to the reinsurer. To the
extent that the assuming companies become unable to meet their obligations
under these agreements, the Company remains contingently liable. The
Company does not anticipate nonperformance by the assuming companies.

Revenues and benefits are shown net of the following reinsurance
transactions:

<TABLE>
<CAPTION>
Years Ended
December 31,
1999 1998 1997
--------------------
(In Millions)
<S> <C> <C> <C>
Ceded reinsurance netted against insurance
premiums $ 92.8 $ 82.7 $ 70.7
Assumed reinsurance included in insurance premiums 13.9 17.2 18.1
Ceded reinsurance netted against policy fees 52.3 65.0 77.5
Ceded reinsurance netted against net investment
income 211.9 203.3 204.9
Ceded reinsurance netted against interest credited 110.5 162.8 165.8
Ceded reinsurance netted against policy benefits 88.4 121.3 93.4
Assumed reinsurance included in policy benefits 8.3 17.7 12.7
</TABLE>

101
<PAGE>

Pacific Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

14. SEGMENT INFORMATION

The Company's six operating segments are Life Insurance, Institutional
Products, Annuities, Group Insurance, Broker-Dealers and Investment
Management. These segments have been identified based on differences in
products and services offered. All other activity is included in Corporate
and Other.

The Life Insurance segment offers universal life, variable universal life
and other life insurance products to individuals, small businesses and
corporations through a network of distribution channels that include branch
offices, marketing organizations, national accounts and a national producer
group that has produced over 10% of the segment's in force business. The
Institutional Products segment offers investment and annuity products to
pension fund sponsors and other institutional investors primarily through
its home office marketing team. The Annuities segment offers variable and
fixed annuities to individuals, small businesses and qualified plans
through financial institutions, National Association of Securities Dealers
("NASD") firms, and regional and national wirehouses.

The Group Insurance segment offers group life, health and dental insurance,
and stop loss insurance products to corporate, government and labor-
management-negotiated plans. The group life, health and dental insurance is
distributed through a network of sales offices and the stop loss insurance
is distributed through a network of third party administrators. The Broker-
Dealers segment includes five NASD registered firms that provide securities
and insurance brokerage services and investment advisory services through
approximately 3,200 registered representatives. The Investment Management
segment is primarily comprised of the Company's investment in PIMCO
Advisors (Note 1). PIMCO Advisors offers a diversified range of investment
products through separately managed accounts, and institutional, retail and
offshore funds.

Corporate and Other primarily includes investment income, expenses and
assets not attributable to the operating segments, and the operations of
the Company's reinsurance subsidiary located in the United Kingdom.
Corporate and Other also includes the elimination of intersegment revenues,
expenses and assets.

The Company uses the same accounting policies and procedures to measure
segment income and assets as it uses to measure its consolidated net income
and assets. Net investment income and investment gains are allocated based
on invested assets purchased and held as is required for transacting the
business of that segment. Overhead expenses are allocated based on services
provided. Interest expense is allocated based on the short-term borrowing
needs of the segment and is included in net investment income. The income
tax provision is allocated based on each segment's actual tax liability.

Intersegment revenues include commissions paid by the Life Insurance
segment and the Annuities segment for variable product sales to the Broker-
Dealers segment. Investment Management segment assets have been reduced by
an intersegment note payable of $100.5 million and $110 million as of
December 31, 1999 and 1998, respectively. The related intersegment note
receivable is included in Corporate and Other segment assets.

The Company generates substantially all of its revenues and income from
customers located in the United States. Additionally, substantially all of
the Company's assets are located in the United States.

Depreciation expense and capital expenditures are not material and have not
been reported herein. The Company's significant non cash item disclosed
herein is interest credited to universal life and investment-type products.

102
<PAGE>

Pacific Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

14. SEGMENT INFORMATION (Continued)

Financial information for each of the business segments is as follows:

<TABLE>
<CAPTION>
Life Institutional Group Broker- Investment Corporate
Insurance Products Annuities Insurance Dealers Management and Other Total
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
External customers and (In Millions)
other revenue
December 31, 1999 $ 502.0 $ 39.1 $ 205.0 $478.4 $253.2 $ 14.9 $ 24.1 $ 1,516.7
December 31, 1998 431.9 43.2 124.0 521.2 236.1 17.0 21.6 1,395.0
December 31, 1997 395.6 61.4 83.3 480.6 154.0 21.2 6.0 1,202.1
Intersegment revenues
December 31, 1999 348.5 (348.5) -
December 31, 1998 185.3 (185.3) -
December 31, 1997 143.3 (143.3) -
Net investment income
excluding earnings of
equity method investees
December 31, 1999 580.2 645.1 78.3 23.4 0.9 8.3 44.2 1,380.4
December 31, 1998 586.5 565.5 88.6 23.1 0.9 8.0 42.0 1,314.6
December 31, 1997 507.2 509.6 149.4 24.9 0.8 6.2 49.2 1,247.3
Earnings of equity
method investees
December 31, 1999 (0.7) (1.2) (0.1) 107.9 (13.0) 92.9
December 31, 1998 0.1 103.1 (4.2) 99.0
December 31, 1997 0.2 80.7 (2.8) 78.1
Net realized investment
gains (losses)
December 31, 1999 12.6 26.8 0.1 (0.6) 9.9 52.7 101.5
December 31, 1998 4.1 (13.6) 4.6 1.7 4.0 38.6 39.4
December 31, 1997 9.9 12.8 0.6 2.0 20.8 39.3 85.4
Total revenues
December 31, 1999 1,094.1 709.8 283.3 501.2 602.6 141.0 (240.5) 3,091.5
December 31, 1998 1,022.5 595.2 217.2 546.0 422.3 132.1 (87.3) 2,848.0
December 31, 1997 912.7 584.0 233.3 507.5 298.1 128.9 (51.6) 2,612.9

Income (loss) before
provision for
income tax
December 31, 1999 178.4 111.9 73.2 30.4 11.9 62.6 46.3 514.7
December 31, 1998 151.1 74.6 34.1 10.3 9.9 60.1 14.9 355.0
December 31, 1997 132.4 98.3 23.5 28.8 6.4 24.6 (24.5) 289.5
Provision (benefit) for
income tax
December 31, 1999 54.4 30.7 24.0 10.1 5.2 11.3 8.0 143.7
December 31, 1998 52.6 21.2 11.3 2.9 4.5 2.1 18.9 113.5
December 31, 1997 55.8 33.9 9.4 9.1 2.7 10.1 (7.5) 113.5
Net income (loss)
December 31, 1999 124.0 81.2 49.2 20.3 6.7 51.3 38.3 371.0
December 31, 1998 98.5 53.4 22.8 7.4 5.4 58.0 (4.0) 241.5
December 31, 1997 76.6 64.4 14.1 19.7 3.7 14.5 (17.0) 176.0

Interest credited on
universal life and
investment-type
products
December 31, 1999 451.4 383.8 65.1 4.1 904.4
December 31, 1998 449.6 354.1 71.0 6.1 880.8
December 31, 1997 378.8 299.8 106.2 13.0 797.8

Assets
As of December 31, 1999 16,276.1 17,649.4 14,565.2 341.5 60.9 264.5 965.4 50,123.0
As of December 31, 1998 14,578.2 15,221.0 8,384.2 361.1 55.8 267.3 1,016.3 39,883.9
</TABLE>

103
<PAGE>

Pacific Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

15. PENSION PLANS, POSTRETIREMENT BENEFITS AND OTHER PLANS

PENSION PLANS

Pacific Life has defined benefit pension plans which cover all eligible
employees who have one year of continuous employment and have attained age
21. The full-benefit vesting period for all participants is five years.

Benefits for employees are based on years of service and the highest five
consecutive years of compensation during the last ten years of employment.
Pacific Life's funding policy is to contribute amounts to the plan
sufficient to meet the minimum funding requirements set forth in the
Employee Retirement Income Security Act of 1974, plus such additional
amounts as may be determined appropriate. Contributions are intended to
provide not only for benefits attributed to employment to date but also for
those expected to be earned in the future. All such contributions are made
to a tax-exempt trust. Plan assets consist primarily of group annuity
contracts issued by Pacific Life, as well as mutual funds managed by an
affiliate of Pacific Life.

Components of the net periodic pension benefit are as follows:

<TABLE>
<CAPTION>
Years Ended
December 31,
1999 1998 1997
----------------------
(In Millions)
<S> <C> <C> <C>
Service cost - benefits earned during the
year $ 4.6 $ 4.0 $ 3.6
Interest cost on projected benefit
obligation 11.5 10.9 10.4
Expected return on plan assets (16.3) (15.0) (12.8)
Amortization of net obligations and prior
service cost (1.4) (1.4) (1.4)
----------------------
Net periodic pension benefit $ (1.6) $ (1.5) $ (0.2)
----------------------
</TABLE>

104
<PAGE>

Pacific Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

15. PENSION PLANS, POSTRETIREMENT BENEFITS AND OTHER PLANS (Continued)

The following tables set forth the pension plans' reconciliation of benefit
obligation, plan assets and funded status for the years ended:

<TABLE>
<CAPTION>
December 31,
1999 1998
--------------
(In Millions)
<S> <C> <C>
Change in Benefit Obligation:
-----------------------------
Benefit obligation, beginning of year $177.8 $157.9
Service cost 4.6 4.0
Interest cost 11.5 10.9
Plan expense (0.3) (0.3)
Actuarial (gain) loss (30.7) 11.9
Benefits paid (7.0) (6.6)
--------------
Benefit obligation, end of year $155.9 $177.8
--------------

Change in Plan Assets:
----------------------
Fair value of plan assets, beginning of year $195.3 $180.3
Actual return on plan assets 23.6 21.9
Plan expense (0.3) (0.3)
Benefits paid (7.0) (6.6)
--------------
Fair value of plan assets, end of year $211.6 $195.3
--------------

Funded Status Reconciliation:
-----------------------------
Funded status $ 55.7 $ 17.5
Unrecognized transition asset (47.7) (3.6)
Unrecognized prior service cost (2.4) (1.0)
Unrecognized actuarial gain (0.8) (9.7)
--------------
Prepaid pension cost $ 4.8 $ 3.2
--------------
</TABLE>

In determining the actuarial present value of the projected benefit
obligation as of December 31, 1999 and 1998, the weighted average discount
rate used was 8.0% and 6.5%, respectively, and the rate of increase in
future compensation levels was 5.5% and 5.0%, respectively. The expected
long-term rate of return on plan assets was 8.5% in 1999 and 1998.

105
<PAGE>

Pacific Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

15. PENSION PLANS, POSTRETIREMENT BENEFITS AND OTHER PLANS (Continued)

POSTRETIREMENT BENEFITS

Pacific Life sponsors a defined benefit health care plan and a defined
benefit life insurance plan (the "Plans") that provide postretirement
benefits for all eligible retirees and their dependents. Generally,
qualified employees may become eligible for these benefits if they reach
normal retirement age, have been covered under Pacific Life's policy as an
active employee for a minimum continuous period prior to the date retired,
and have an employment date before January 1, 1990. The Plans contain cost-
sharing features such as deductibles and coinsurance, and require retirees
to make contributions which can be adjusted annually. Pacific Life's
commitment to qualified employees who retire after April 1, 1994 is limited
to specific dollar amounts. Pacific Life reserves the right to modify or
terminate the Plans at any time. As in the past, the general policy is to
fund these benefits on a pay-as-you-go basis.

The net periodic postretirement benefit cost for the years ended December
31, 1999, 1998 and 1997 is $0.5 million, $0.7 million and $0.8 million,
respectively. As of December 31, 1999 and 1998, the accumulated benefit
obligation is $19.7 million and $19.3 million, respectively. The fair value
of the plan assets as of December 31, 1999 and 1998 is zero. The amount of
accrued benefit cost included in other liabilities on the accompanying
consolidated statements of financial condition is $24.4 million and $25.3
million as of December 31, 1999 and 1998, respectively.

The Plans include both indemnity and HMO coverage. The assumed health care
cost trend rate used in measuring the accumulated benefit obligation for
indemnity coverage was 8.0% for 1999 and 1998 and is assumed to decrease
gradually to 3.5% in 2003 and remain at that level thereafter. The assumed
health care cost trend rate used in measuring the accumulated benefit
obligation for HMO coverage was 7.0% for 1999 and 1998 and is assumed to
decrease gradually to 3.0% in 2003 and remain at that level thereafter.

The amount reported is materially effected by the health care cost trend
rate assumptions. If the health care cost trend rate assumptions were
increased by 1%, the accumulated postretirement benefit obligation as of
December 31, 1999 would be increased by 8.0%, and the aggregate of the
service and interest cost components of the net periodic benefit cost would
increase by 10.1%. If the health care cost trend rate assumptions were
decreased by 1%, the accumulated postretirement benefit obligation as of
December 31, 1999 would be decreased by 7.0%, and the aggregate of the
service and interest cost components of the net periodic benefit cost would
decrease by 8.9%.

The discount rate used in determining the accumulated postretirement
benefit obligation is 8.0% and 6.5% for 1999 and 1998, respectively.

OTHER PLANS

Pacific Life provides a voluntary Retirement Incentive Savings Plan
("RISP") pursuant to Section 401(k) of the Internal Revenue Code covering
all eligible employees of the Company. Effective October 1, 1997, Pacific
Life's RISP changed the matching percentage of each employee's
contributions from 50% to 75%, up to a maximum of 6% of eligible employee
compensation and restricted the matched investment to an Employee Stock
Ownership ("ESOP"). ESOP contributions made by the Company amounted to $5.4
million, $5.2 million and $1.1 million for the years ended December 31,
1999, 1998 and 1997, respectively, and are included in operating expenses
on the accompanying consolidated statements of operations.

The ESOP was formed at the time of the Conversion and is currently only
available to the participants of the RISP in the form of matching
contributions. Pacific LifeCorp issued 1.7 million shares of common stock
at

106
<PAGE>

Pacific Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

15. PENSION PLANS, POSTRETIREMENT BENEFITS AND OTHER PLANS (Continued)

$12.50 per share to the ESOP ("ESOP Shares") on September 2, 1997, in
exchange for a promissory note in the amount of $21.2 million ("ESOP
Note"). Interest and principal payments made by the ESOP to Pacific
LifeCorp were funded by ESOP contributions from Pacific Life.

On July 27, 1999, Pacific Life loaned cash to the ESOP to pay off the ESOP
Note due Pacific LifeCorp. This loan is included in unearned ESOP shares on
the accompanying consolidated statement of stockholder's equity as of
December 31, 1999. The unearned ESOP shares account is reduced as ESOP
shares are released for allocation to participants through ESOP
contributions by Pacific Life. In addition, when the fair value of ESOP
shares being released for allocation to participants exceeds the original
issue price of those shares, paid-in capital is increased by this
difference and reflected as a capital contribution on the accompanying
consolidated statement of stockholder's equity as of December 31, 1999.

Pacific Life also has a deferred compensation plan which permits certain
employees to defer portions of their compensation and earn a guaranteed
interest rate on the deferred amounts. The interest rate is determined
annually and is guaranteed for one year. The compensation which has been
deferred has been accrued and the primary expense, other than compensation,
related to this plan is interest on the deferred amounts.

The Company also has performance-based incentive compensation plans for its
employees.

16. TRANSACTIONS WITH AFFILIATES

Pacific Life serves as the investment advisor for the Pacific Select Fund,
the investment vehicle provided to the Company's variable life and variable
annuity contractholders. Pacific Life charges fees based upon the net asset
value of the portfolios of the Pacific Select Fund, which amounted to $69.7
million, $42.1 million and $27.5 million for the years ended December 31,
1999, 1998 and 1997, respectively. In addition, Pacific Life provides
certain support services to the Pacific Select Fund for an administration
fee which is based on an allocation of actual costs. Such administration
fees amounted to $265,000, $232,000 and $165,000 for the years ended
December 31, 1999, 1998 and 1997, respectively.

PIMCO Advisors provides investment advisory services to the Company for
which the fees amounted to $7.3 million, $16.9 million and $11.4 million
for the years ended December 31, 1999, 1998 and 1997, respectively.
Included in equity securities on the accompanying consolidated statements
of financial condition are investments in mutual funds and other
investments managed by PIMCO Advisors which amounted to $3.2 million and
$40.3 million as of December 31, 1999 and 1998, respectively.

Pacific Life provides certain support services to PIMCO Advisors. Charges
for these services are based on an allocation of actual costs and amounted
to $1.0 million, $1.2 million and $1.2 million for the years ended December
31, 1999, 1998 and 1997, respectively.

17. TERMINATION AND NON COMPETITION AGREEMENTS

The Company has termination and non competition agreements with certain
former key employees of PAM's subsidiaries. These agreements provide terms
and conditions for the allocation of future proceeds received from
distributions and sales of certain PIMCO Advisors units and other non
compete payments. When the amount of future obligations to be made to a key
employee is determinable, a liability for such amount is established.

For the years ended December 31, 1999, 1998 and 1997, approximately $53.6
million, $49.4 million and $85.8 million, respectively, is included in
operating expenses on the accompanying consolidated statements of

107
<PAGE>

Pacific Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

17. TERMINATION AND NON COMPETITION AGREEMENTS (Continued)

operations related to the termination and non competition agreements. This
includes payments of $43.1 million in 1997 to former key employees who
elected to sell to PAM's subsidiaries their rights to the future proceeds
from the PIMCO Advisors units.

In connection with the closing of the PIMCO Advisors transaction (Note 1),
the termination and non competition agreements with certain former key
employees of PAM's subsidiaries will be assumed by Allianz.

18. COMMITMENTS AND CONTINGENCIES

The Company has outstanding commitments to make investments primarily in
fixed maturity securities, mortgage loans, limited partnerships and other
investments as follows (In Millions):

<TABLE>
<CAPTION>
Years Ending December 31:
-------------------------
<S> <C>
2000 $437.0
2001 through 2004 210.8
2005 and thereafter 144.3
------
Total $792.1
------
</TABLE>

The Company leases office facilities under various non cancelable operating
leases. Aggregate minimum future commitments as of December 31, 1999
through the term of the leases are approximately $43.3 million.

Pacific Life has a contingent liability of approximately $23 million
related to the posting of an appeal bond in conjunction with one of its
investments. An unrelated third party has agreed to reimburse Pacific Life
for 50% of any losses incurred under the bond. In addition, Pacific Life
has given a commitment for additional capital funding, as may be required,
to certain of its subsidiaries.

Pacific Life was named in civil litigation proceedings similar to other
litigation brought against many life insurers alleging misconduct in the
sale of products, sometimes referred to as market conduct litigation. The
class of plaintiffs included, with some exceptions, all persons who owned,
as of December 31, 1997 (or as of the date of policy termination, if
earlier), individual whole life, universal life or variable life insurance
policies sold by Pacific Life on or after January 1, 1982. Pacific Life has
settled this litigation pursuant to a final settlement agreement approved
by the Court in November 1998. The settlement agreement was implemented
during 1999.

Further, the Company is a respondent in a number of other legal
proceedings, some of which involve allegations for extra-contractual
damages. In the opinion of management, the outcome of the foregoing
proceedings is not likely to have a material adverse effect on the
consolidated financial position or results of operations of the Company.

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

108
<PAGE>

APPENDIX A - MORTALITY AND EXPENSE RISK FACE AMOUNT CHARGE: RATES PER
$1,000 OF INITIAL FACE AMOUNT
<TABLE>
<CAPTION>
Death Benefit Option A or C Death Benefit Option B
--------------------------------------- ---------------------------------------
Nonsmoker Smoker Nonsmoker Smoker
Issue ------------------- ------------------- ------------------- -------------------
age Male Female Unisex Male Female Unisex Male Female Unisex Male Female Unisex
- ----- ----- ------ ------ ----- ------ ------ ----- ------ ------ ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
5 0.062 0.051 0.060 0.062 0.051 0.060 0.149 0.124 0.124 0.149 0.124 0.144
10 0.062 0.051 0.060 0.062 0.051 0.060 0.149 0.124 0.124 0.149 0.124 0.144
15 0.062 0.051 0.060 0.062 0.051 0.060 0.149 0.124 0.124 0.149 0.124 0.144
20 0.115 0.092 0.110 0.146 0.112 0.140 0.256 0.223 0.250 0.267 0.234 0.262
25 0.140 0.115 0.136 0.180 0.140 0.173 0.291 0.256 0.284 0.301 0.265 0.295
30 0.163 0.135 0.158 0.207 0.165 0.199 0.328 0.290 0.290 0.337 0.298 0.330
35 0.191 0.159 0.187 0.238 0.192 0.231 0.376 0.330 0.330 0.384 0.337 0.375
40 0.260 0.217 0.254 0.324 0.262 0.314 0.440 0.383 0.383 0.448 0.389 0.436
45 0.360 0.300 0.350 0.448 0.360 0.433 0.518 0.444 0.444 0.527 0.449 0.511
50 0.458 0.379 0.444 0.564 0.451 0.544 0.613 0.518 0.518 0.625 0.522 0.603
55 0.548 0.456 0.532 0.669 0.535 0.647 0.729 0.610 0.610 0.743 0.616 0.722
60 0.718 0.597 0.696 0.866 0.691 0.834 0.796 0.731 0.731 0.866 0.741 0.834
65 0.917 0.760 0.888 0.947 0.867 0.959 0.917 0.760 0.760 0.947 0.867 0.959
70 0.926 0.763 0.892 0.930 0.860 0.933 0.926 0.763 0.763 0.930 0.860 0.933
75 0.920 0.764 0.889 0.920 0.852 0.925 0.920 0.764 0.764 0.920 0.852 0.925
80 0.910 0.786 0.883 0.910 0.845 0.942 0.910 0.786 0.786 0.910 0.845 0.942
85 1.060 1.026 1.051 1.067 1.051 1.076 1.060 1.026 1.026 1.067 1.051 1.076
- ---
--------------------------------------------------
-------------------------------------------------
</TABLE>

If the person insured by the policy is assigned a risk classification other
than standard, a factor is applied to the M&E risk face amount charge according
to the nonstandard table rating assigned to that person insured. If the person
insured is assigned a nonstandard rating reflected in the table below, the rate
above that applies to the person insured is multiplied by the nonstandard table
factor below that applies.

NONSTANDARD TABLE FACTORS

<TABLE>
<CAPTION>
Nonstandard Table Number
Issue -------------------------------------------------------------------------------
age 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
----- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0-45 1.05 1.10 1.15 1.20 1.25 1.30 1.35 1.40 1.45 1.50 1.55 1.60 1.65 1.70 1.75 1.80
50 1.05 1.10 1.15 1.20 1.25 1.30 1.35 1.40 1.45 1.50 1.55 1.60 1.65 1.65 1.65 1.65
55 1.05 1.10 1.15 1.20 1.25 1.30 1.35 1.35 1.35 1.35 1.35 1.35 1.35 1.35 1.35 1.35
60 1.05 1.05 1.05 1.05 1.05 1.05 1.05 1.05 1.05 1.05 1.05 1.05 1.05 1.05 1.05 1.05
65-85 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
- ----
-----------------------------------------------------------------------------------
</TABLE>

Representative figures shown. For issue ages not listed, please ask your
registered representative.

109
<PAGE>

APPENDIX B - SURRENDER CHARGE: CURRENT RATES PER $1,000 OF INITIAL FACE
AMOUNT
<TABLE>
<CAPTION>
Death Benefit Option A or C Death Benefit Option B
--------------------------------------- ---------------------------------------
Nonsmoker Smoker Nonsmoker Smoker
Issue ------------------- ------------------- ------------------- -------------------
age Male Female Unisex Male Female Unisex Male Female Unisex Male Female Unisex
- ----- ----- ------ ------ ----- ------ ------ ----- ------ ------ ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
5 $0.33 $0.26 $0.32 $0.33 $0.26 $0.32 $0.89 $0.74 $0.87 $0.89 $0.74 $0.87
10 $0.33 $0.26 $0.32 $0.33 $0.26 $0.32 $0.89 $0.74 $0.87 $0.89 $0.74 $0.87
15 $0.33 $0.26 $0.32 $0.33 $0.26 $0.32 $0.89 $0.74 $0.87 $0.89 $0.74 $0.87
20 $0.66 $0.53 $0.64 $0.84 $0.64 $0.80 $1.51 $1.33 $1.49 $1.58 $1.39 $1.54
25 $0.82 $0.67 $0.79 $1.04 $0.80 $0.99 $1.71 $1.50 $1.66 $1.77 $1.55 $1.71
30 $0.96 $0.79 $0.93 $1.20 $0.95 $1.16 $1.93 $1.70 $1.89 $1.97 $1.75 $1.94
35 $1.11 $0.93 $1.08 $1.38 $1.11 $1.33 $2.18 $1.92 $2.13 $2.21 $1.96 $2.16
40 $1.51 $1.26 $1.47 $1.87 $1.50 $1.80 $2.53 $2.20 $2.47 $2.56 $2.23 $2.49
45 $2.07 $1.73 $2.01 $2.55 $2.05 $2.46 $2.94 $2.53 $2.85 $2.96 $2.55 $2.88
50 $2.67 $2.23 $2.59 $3.27 $2.62 $3.15 $3.54 $3.00 $3.42 $3.58 $3.01 $3.45
55 $3.25 $2.72 $3.16 $3.93 $3.16 $3.80 $4.27 $3.60 $4.16 $4.30 $3.60 $4.19
60 $4.25 $3.54 $4.12 $5.07 $4.07 $4.88 $4.70 $4.28 $4.76 $5.07 $4.31 $4.88
63 $4.95 $4.13 $4.80 $5.69 $4.69 $5.63 $4.95 $4.45 $4.80 $5.69 $4.69 $5.63
64 $5.22 $4.35 $5.06 $5.54 $4.93 $5.71 $5.22 $4.47 $5.06 $5.54 $4.93 $5.71
65 $5.37 $4.48 $5.20 $5.45 $5.06 $5.54 $5.37 $4.48 $5.20 $5.45 $5.06 $5.54
66 $5.47 $4.56 $5.30 $5.38 $5.14 $5.41 $5.47 $4.56 $5.30 $5.38 $5.14 $5.41
70 $5.31 $4.43 $5.15 $5.19 $4.94 $5.24 $5.31 $4.43 $5.15 $5.19 $4.94 $5.24
75 $5.09 $4.26 $4.94 $4.90 $4.69 $4.97 $5.09 $4.26 $4.94 $4.90 $4.69 $4.97
80 $4.61 $3.88 $4.47 $4.45 $4.21 $4.66 $4.61 $3.88 $4.47 $4.45 $4.21 $4.66
85 $3.79 $3.21 $3.67 $3.79 $3.38 $3.79 $3.79 $3.21 $3.67 $3.79 $3.38 $3.79
- ---
--------------------------------------------------
-------------------------------------------------
</TABLE>

If the person insured by the policy is assigned a risk classification other
than standard, a factor is applied to the surrender charge rate according to
the nonstandard table rating assigned to that person insured. If the person
insured is assigned a nonstandard rating reflected in the table of nonstandard
table factors at the bottom of Appendix A on the previous page, the rate above
that applies to the person insured is multiplied by the nonstandard table
factor that applies.

Representative figures shown. For issue ages not listed, please ask your
registered representative.

110
<PAGE>

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

111
<PAGE>

M'S VERSATILE PRODUCT WHERE TO GO FOR MORE INFORMATION

The M's Versatile For more information about M's Versatile Product,
Product variable please call or write to us at the address below. You
life insurance should also use this address to send us any notices,
policy is forms or requests about your policy.
underwritten by
Pacific Life
Insurance Company.

---------------------------------------------------------
How to contact us Pacific Life Insurance Company
Client Services Department
700 Newport Center Drive
P.O. Box 7500
Newport Beach, California 92658-7500

1-800-800-7681
7 a.m. through 5 p.m. Pacific time

---------------------------------------------------------
How to contact the You can also find reports and other information about
SEC the policy and separate account from the SEC. The SEC
may charge you a fee for this information.

Public Reference Section of the SEC
Washington, D.C. 20549-6009
1-800-SEC-0330
Internet: www.sec.gov
<PAGE>

Underwritten by:

[LOGO OF PACIFIC LIFE APPEARS HERE]
Pacific Life Insurance Company
700 Newport Center Drive
Newport Beach, CA 92660
(800) 800-7681

Visit us at our web site: www.pacificlife.com

[LOGO OF IMSA APPEARS HERE]

*Membership promotes ethical market conduct
for individual life insurance and annuities

15-21390-01 5/00
<PAGE>

PACIFIC SELECT EXEC SEPARATE ACCOUNT

PART II. ADDITIONAL INFORMATION NOT REQUIRED IN PROSPECTUS

Contents of Registration Statement

This Registration Statement on Form S-6 comprises the following papers and
documents:

The facing sheet.
The cross-reference sheet.

The Prospectus consisting of 111 pages.

The undertaking to file reports.
Representation pursuant to Section 26(e) of the Investment Company Act of 1940.
The Signatures.
Written consent of the following person (included in the exhibits shown below):

Dechert Price & Rhoads, Outside Counsel
The following exhibits:

1. (1) (a) Resolution of the Board of Directors of the Depositor dated
November 22, 1989 and copies of the Memoranda concerning Pacific
Select Exec Separate Account dated May 12, 1988 and January 26,
1993. /1/

(b) Resolution of the Board of Directors of Pacific Life Insurance
Company authorizing conformity to the terms of the current
Bylaws. /1/

(2) Inapplicable

(3) (a) Distribution Agreement Between Pacific Life Insurance Company and
Pacific Mutual Distributors, Inc. (formerly known as Pacific Equities
Network) /1/

(b) Form of Selling Agreement Between Pacific Mutual Distributors, Inc.
and Various Broker-Dealers /2/

(4) Inapplicable

(5) (a) Flexible Premium Variable Life Insurance Policy /1/

(b) Annual Renewable Term Rider (form R98-ART) /1/

(d) Accelerated Living Benefit Rider (form R92-ABR) /1/

(e) Spouse Term Rider (form R98-SPT) /1/

(f) Children's Term Rider (form R84-CT) /1/

(g) Waiver of Charges (form R98-WC) /2/

(h) Accidental Death Benefit (form R84-AD) /1/

(i) Guaranteed Insurability Rider (form R84-GI) /1/

(j) Disability Benefit Rider (form R84-DB) /1/

(k) M&E Risk Charge Endorsement /4/

(6) (a) Bylaws of Pacific Life Insurance Company /1/

(b) Articles of Incorporation of Pacific Life Insurance Company /1/
<PAGE>

(7) Inapplicable

(8) Inapplicable

(9) (a) Participation Agreement between Pacific Life Insurance Company and
Pacific Select Fund /4/
(b) M Fund, Inc. Participation Agreement with Pacific Life Insurance
Company /4/

(10) Application for Flexible Premium Variable Life Insurance Policy &
General Questionnaire /1/

2. Form of Opinion and consent of legal officer of Pacific Life as to
legality of Policies being registered /1/

3. Inapplicable

4. Inapplicable

5. Inapplicable

6. (a) Consent of Deloitte & Touche LLP

(b) Consent of Dechert Price & Rhoads /1/

7. (a) Opinion of Actuary

(b) Form of Illustration of Policy Benefits

8. Memorandum Describing Issuance, Transfer and Redemption Procedures /1/

9. Power of Attorney /4/

10. Inapplicable

11. Inapplicable

12. Inapplicable

13. Inapplicable

14. Inapplicable

15. Inapplicable

16. Inapplicable

17. Inapplicable

/1/ Filed as part of Registration Statement on Form S-6 via EDGAR on August 10,
1998, File No. 333-61135, Accession Number 0001017062-98-001706.

/2/ Filed as part of Pre-Effective Amendment No. 1 to the Registration Statement
on Form S-6 via EDGAR on November 19, 1999, File No. 333-61135, Accession
Number 0001017062-98-002349.

/3/ Filed as part of Post-Effective Amendment No. 1 to the Registration
Statement on Form S-6 via EDGAR on April 27, 1999, File No. 333-61135,
Accession Number 0001017062-99-000722.

/4/ Filed as part of Post-Effective Amendment No. 2 to the Registration
Statement on Form S-6 via EDGAR on February 29, 2000, File No. 333-61135,
Accession Number 0001017062-00-000579.
<PAGE>

UNDERTAKING TO FILE REPORTS

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

REPRESENTATION PURSUANT TO SECTION 26(e) OF THE INVESTMENT COMPANY ACT OF 1940

Pacific Life Insurance Company and Registrant represent that the fees and
charges to be deducted under the variable Life Insurance Policy ("Policy")
described in the prospectus contained in this registration statement are, in the
aggregate, reasonable in relation to the services rendered, the expenses to be
incurred, and the risks assumed in connection with the Policy.
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Pacific Select Exec Separate Account of Pacific Life Insurance Company certfies
that it meets all of the requirements for effectiveness of this Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Post-Effective Amendment No. 4 to the Registration Statement on Form
S-6 to be signed on its behalf by the undersigned thereunto duly authorized in
the City of Newport Beach, and State of California, on this 1st day of May,
2000.

PACIFIC SELECT EXEC SEPARATE ACCOUNT
(Registrant)

BY: PACIFIC LIFE INSURANCE COMPANY
(Depositor)

BY: _________________________________
Thomas C. Sutton*
Chief Executive Officer

*BY: /s/ DAVID R. CARMICHAEL
David R. Carmichael
as attorney-in-fact

(Power of Attorney is contained as Exhibit 9 in Post-Effective Amendment
No. 2 to the Registration Statement on Form S-6 for the Pacific Select Exec
Separate Account, File No. 333-61135, Accession Number 0001017062-00-000579,
and incorporated by reference herein.
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, Pacific Life
Insurance Company certfies that it meets all of the requirements for
effectiveness of this Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and has duly caused this Post-Effective Amendment No. 4
to the Registration Statement to be signed on its behalf by the undersigned
thereunto duly authorized all in the City of Newport Beach, and State of
California, on this 1st day of May, 2000.

BY: PACIFIC LIFE INSURANCE COMPANY
(Registrant)

BY: _________________________________
Thomas C. Sutton*
Chief Executive Officer

*BY: /s/ DAVID R. CARMICHAEL
David R. Carmichael
as attorney-in-fact

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, this Post-Effective
Amendment No. 4 to the Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated:

<C> <S> <C>
Signature Title Date

____________________ Director, Chairman of the Board __________ , 2000
Thomas C. Sutton* and Chief Executive Officer

____________________ Director and President __________ , 2000
Glenn S. Schafer*

____________________ Director, Senior Vice President and __________ , 2000
Khanh T. Tran* Chief Financial Officer

____________________ Director, Senior Vice President and __________ , 2000
David R. Carmichael* General Counsel

____________________ Director, Vice President and __________ , 2000
Audrey L. Milfs* Corporate Secretary

____________________ Vice President and Controller __________ , 2000
Edward R. Byrd*

____________________ Vice President and Treasurer __________ , 2000
Brian D. Klemens*

____________________ Executive Vice President __________ , 2000
Lynn C. Miller*

*BY: /s/ DAVID R. CARMICHAEL May 1, 2000
David R. Carmichael
as attorney-in-fact
</TABLE>

(Powers of Attorney are contained as Exhibit 9 in Post-Effective Amendment No. 2
to the Registration Statement on Form S-6 of Pacific Select Exec Separate
Account, File No. 333-61135, Accession Number 0001017062-00-000579, and
incorporated by reference herein.

<PAGE>

EXHIBIT 6.(a)

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Post-Effective Amendment No. 4 to Registration
Statement No. 333-61135 on Form S-6 of our report dated February 10, 2000,
related to the statement of assets and liabilities of Pacific Select Exec
Separate Account of Pacific Life Insurance Company as of December 31, 1999, and
the related statement of operations for the year then ended and statement of
changes in net assets for each of the two years in the period then ended, and of
our report dated February 22, 2000, related to the consolidated financial
statements of Pacific Life Insurance Company and subsidiaries as of December 31,
1999 and 1998, and for each of the three years in the period ended December 31,
1999, appearing in the Prospectus of M's Versatile Product, which is part of
such Registration Statement.

We also consent to the reference to us under the heading "Experts" appearing in
such Prospectus.

DELOITTE & TOUCHE LLP

Costa Mesa, California
May 1, 2000

<PAGE>

EXHIBIT 7.(a)

[Letterhead of Pacific Life]

April 21, 2000

PACIFIC LIFE INSURANCE COMPANY
700 Newport Center Drive
Newport Beach, CA 92660

RE: M's Versatile Product Flexible Premium Variable Life Insurance Policy

To whom it may concern:

In my capacity as Assistant Vice President of the Product Design Department of
Pacific Life Insurance Company, I have provided actuarial advice concerning:

The preparation of the Post-Effective Amendment No. 4 to the Registration
Statement on Form S-6 filed by Pacific Life Insurance Company with the
Securities and Exchange Commission under the Securities Act of 1933 with respect
to variable life insurance policies (the "Registration Statement") and the
preparation of the policy forms for the variable life insurance policies
described in the Registration Statement (the "Policies").

It is my professional opinion that:

The illustration of death benefits, cash values and accumulated premiums shown
in this Post-Effective Amendment No. 4 to the Registration Statement on Form S-6
as Exhibit 7(b), based on the assumptions used in the illustrations, are
consistent with the provisions of the Policies. The rate structure of the
Policies has not been designed so as to make the relationship between premiums
and benefits, as shown in the illustrations, appear to be correspondingly more
favorable to the prospective purchaser of the Policies at age 45 in the
underwriting classes illustrated than to prospective purchasers of Policies at
other ages or underwriting classes.

I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement.

Sincerely,

/s/ LAWRENCE M. HERSH

Lawrence M. Hersh, FSA, MAAA
Assistant Vice President

<PAGE>

EXHIBIT 7(b)
ILLUSTRATION 1
M'S VERSATILE PRODUCT - GPT (FORM 98-52M)
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE

CLIENT PREMIUMS ALLOCATED TO VARIABLE ACCOUNT
SELECT NON-SMOKER MALE AGE 45 PRESENTED BY Pacific Life
Producer

SUMMARY PAGE

<TABLE>
<CAPTION>
---CURRENT POLICY CHARGES--- -----------------GUARANTEED POLICY CHARGES---------------

ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
-----6.00% (5.08% NET)----- -----0.00% (-0.87% NET)---- -----6.00% (5.08% NET)-----

NET NET NET NET NET NET
PREMIUMS ACCUM'D SURR'R DEATH ACCUM'D SURR'R DEATH ACCUM'D SURR'R DEATH
ANNUALIZED PLUS 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
YEAR PREMIUM INTEREST (EOY) (EOY) (EOY) (EOY) (EOY) (EOY) (EOY) (EOY) (EOY)
==== ========== ======== ======= ====== ======= ======= ====== ======= ======= ====== =======
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 10000.00 $10,500 $7,513 $6,738 $412,377 $5,455 $4,681 $412,377 $5,887 $5,112 $412,377
2 10000.00 $21,525 $15,299 $14,610 $412,377 $10,716 $10,028 $412,377 $11,921 $11,232 $412,377
3 10000.00 $33,101 $23,378 $22,775 $412,377 $15,776 $15,174 $412,377 $18,102 $17,500 $412,377
4 10000.00 $45,256 $31,811 $31,294 $412,377 $20,633 $20,117 $412,377 $24,440 $23,924 $412,377
5 10000.00 $58,019 $40,634 $40,204 $412,377 $25,285 $24,854 $412,377 $30,951 $30,520 $412,377
6 10000.00 $71,420 $49,877 $49,532 $412,377 $29,732 $29,387 $412,377 $37,638 $37,294 $412,377
7 10000.00 $85,491 $59,564 $59,306 $412,377 $33,945 $33,687 $412,377 $44,485 $44,227 $412,377
8 10000.00 $100,266 $69,718 $69,546 $412,377 $37,905 $37,733 $412,377 $51,484 $51,312 $412,377
9 10000.00 $115,779 $80,359 $80,273 $412,377 $41,583 $41,497 $412,377 $58,619 $58,533 $412,377
10 10000.00 $132,068 $91,504 $91,504 $412,377 $44,948 $44,948 $412,377 $65,874 $65,874 $412,377
15 10000.00 $226,575 $165,309 $165,309 $412,377 $65,438 $65,438 $412,377 $114,390 $114,390 $412,377
20 10000.00 $347,192 $258,509 $258,509 $412,377 $74,535 $74,535 $412,377 $169,757 $169,757 $412,377
25 10000.00 $501,134 $379,333 $379,333 $440,026 $64,358 $64,358 $412,377 $233,789 $233,789 $412,377
30 10000.00 $697,607 $534,891 $534,891 $572,333 $18,008 $18,008 $412,377 $314,457 $314,457 $412,377
35 10000.00 $948,362 $734,238 $734,238 $770,950 ## ## ## $434,861 $434,861 $456,605
</TABLE>

## ADDITIONAL PREMIUM PAYMENTS REQUIRED TO MAINTAIN REQUESTED BENEFITS.

ALL VALUES EXCEPT PREMIUMS, LOANS, LOAN INTEREST AND WITHDRAWALS ARE VALUES AT
THE END OF THE POLICY YEAR. THE 'NET SURRENDER VALUE' IS EQUAL TO THE
ACCUMULATED VALUE, LESS ANY POLICY DEBT AND LESS ANY SURRENDER CHARGES. THE 'NET
DEATH BENEFIT' IS THE POLICY DEATH BENEFIT LESS ANY POLICY DEBT.

THE PREMIUM MODE ASSUMED IN THIS ILLUSTRATION IS ANNUAL.

SUMMARY PAGES

THIS ILLUSTRATION SHOWS HOW THE PERFORMANCE OF THE UNDERLYING VARIABLE
INVESTMENT OPTIONS COULD AFFECT THE POLICY VALUES AND DEATH BENEFIT. THE
INFORMATION IS HYPOTHETICAL AND MAY NOT BE USED TO PREDICT INVESTMENT RESULTS.
PLEASE REFER TO THE SUMMARY PAGE FOR A FULL EXPLANATION OF FEES AND EXPENSES.

PACIFIC LIFE INSURANCE COMPANY
THIS ILLUSTRATION IS NOT VALID UNLESS PRESENTED WITH SUMMARY PAGES

VERSION TIME GPT - NONGI DATE PAGE OF

<PAGE>

M'S VERSATILE PRODUCT - GPT (FORM 98-52M)
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
CLIENT PREMIUMS ALLOCATED TO VARIABLE ACCOUNT
SELECT NON-SMOKER MALE AGE 45 PRESENTED BY Pacific Life

Producer

ANY LOANS OR WITHDRAWALS ILLUSTRATED ARE BASED ON CURRENT POLICY CHARGE
ASSUMPTIONS AND MIGHT NOT BE AVAILABLE UNDER GUARANTEED POLICY CHARGE
ASSUMPTIONS.

THIS ILLUSTRATION SHOWS A POLICY LOAN. THE LOAN IS AUTOMATICALLY REPAID FROM THE
GROSS DEATH BENEFIT AT THE DEATH OF THE INSURED, RESULTING IN THE ESTIMATED
PAYMENT TO THE BENEFICIARY OF THE NET DEATH BENEFIT ILLUSTRATED. UPON LAPSE OR
SURRENDER, THE LOAN IS AUTOMATICALLY REPAID, RESULTING IN THE ESTIMATED PAYMENT
TO THE POLICYOWNER OF THE NET SURRENDER AMOUNT. THE AUTOMATIC REPAYMENT OF THE
LOAN DURING A LAPSE OR SURRENDER WILL CAUSE THE RECOGNITION OF TAXABLE INCOME,
TO THE EXTENT THAT THE NET SURRENDER VALUE PLUS THE AMOUNT OF THE REPAID LOAN
EXCEEDS THE POLICY OWNER'S BASIS IN THE POLICY.

THE POLICY WILL LAPSE IF THE ACCUMULATED VALUE LESS POLICY DEBT IS INSUFFICIENT
TO COVER THE CURRENT MONTHLY DEDUCTION ON ANY MONTHLY PAYMENT DATE, AND A GRACE
PERIOD EXPIRES WITHOUT THE POLICY OWNER MAKING A SUFFICIENT PAYMENT. IF THE
POLICY IS INSUFFICIENTLY FUNDED IN RELATION TO THE INCOME STREAM FROM THE
POLICY, THE POLICY CAN LAPSE PREMATURELY AND RESULT IN A SIGNIFICANT INCOME TAX
LIABILITY TO THE OWNER IN THE YEAR IN WHICH THE LAPSE OCCURS.

A POLICY OWNER SHOULD BE CAREFUL TO STRUCTURE A POLICY SO THAT THE POLICY WILL
NOT LAPSE PREMATURELY UNDER VARIOUS MARKET SCENARIOS AS A RESULT OF WITHDRAWALS
AND/OR LOANS TAKEN FROM THE POLICY. THE POLICY OWNER SHOULD ALSO REQUEST AT
LEAST ANNUALLY A REVISED ILLUSTRATION THAT REFLECTS CURRENT POLICY VALUES TO
ASSURE THAT THE POLICY IS SUFFICIENTLY FUNDED TO SUPPORT A DESIRED INCOME
STREAM, IF ANY.

INITIAL GUIDELINE SINGLE PREMIUM: $111,482.20
INITIAL GUIDELINE LEVEL PREMIUM: $10,000.10
INITIAL SEVEN PAY PREMIUM: $23,088.12

THIS IS AN ILLUSTRATION AND NOT A CONTRACT. ALTHOUGH THE INFORMATION CONTAINED
IN THIS ILLUSTRATION IS BASED ON CERTAIN TAX AND LEGAL ASSUMPTIONS, IT IS NOT
INTENDED TO BE TAX OR LEGAL ADVICE. SUCH ADVICE SHOULD BE OBTAINED FROM
APPLICANT'S OWN COUNSEL OR OTHER ADVISOR.

THIS ILLUSTRATION MUST BE PRECEDED OR ACCOMPANIED BY THE CURRENT PROSPECTUSES
FOR THE SEPARATE ACCOUNT AND THE FUND. READ THE PROSPECTUSES CAREFULLY BEFORE
INVESTING OR SENDING MONEY.

---ASSUMED TAX BRACKET---
START END AMOUNT
1 35 31.00

THE CURRENT POLICY CHARGES AND COST OF INSURANCE RATES ARE SUBJECT TO CHANGE.
POLICY VALUES WILL VARY FROM THOSE ILLUSTRATED IF ACTUAL RATES DIFFER FROM THOSE
ASSUMED. CURRENT COST OF INSURANCE RATES ARE NOT DEPENDENT UPON FUTURE
IMPROVEMENTS IN UNDERLYING MORTALITY.

VALUES ILLUSTRATED UNDER THE GUARANTEED POLICY CHARGE COLUMNS ASSUME MAXIMUM
COST OF INSURANCE RATES. CURRENT COST OF INSURANCE RATES FOR THE BASE COVERAGE
ARE GUARANTEED FOR THE FIRST 5 YEARS.

HYPOTHETICAL FUTURE VALUES ARE BASED ON CURRENT COST OF INSURANCE RATES AND
HYPOTHETICAL GROSS EARNINGS RATE ASSUMPTIONS AS DESCRIBED BELOW.

THIS ILLUSTRATION ASSUMES THAT ALL PREMIUMS HAVE BEEN ALLOCATED TO THE VARIABLE
ACCOUNTS. THE HYPOTHETICAL RATES OF RETURN AND VALUES SHOWN ARE ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED AS A REPRESENTATION OF PAST OR FUTURE INVESTMENT
RESULTS. THE ILLUSTRATED POLICY VALUES MIGHT NOT BE ACHIEVED IF ACTUAL RATES OF
RETURN OR POLICY CHARGES DIFFER FROM THOSE ASSUMED. ACTUAL RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS
INCLUDING THE INVESTMENT ALLOCATIONS MADE TO THE VARIABLE ACCOUNTS BY AN OWNER
AND THE EXPERIENCE OF THE ACCOUNTS. NO REPRESENTATION CAN BE MADE BY PACIFIC
LIFE, THE SEPARATE ACCOUNT, OR THE FUND THAT THESE HYPOTHETICAL RATES OF RETURN
CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.

SUMMARY PAGES

PACIFIC LIFE INSURANCE COMPANY
THIS ILLUSTRATION IS NOT VALID UNLESS PRESENTED WITH SUMMARY PAGES

VERSION TIME GPT - NONGI DATE PAGE OF
<PAGE>

M'S VERSATILE PRODUCT - GPT (FORM 98-52M)
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE

CLIENT PREMIUMS ALLOCATED TO VARIABLE ACCOUNT
SELECT NON-SMOKER MALE AGE 45 PRESENTED BY Pacific Life
Producer

YOU HAVE REQUESTED THAT THIS ILLUSTRATION REFLECT YOUR SELECTION OF UNDERLYING
PORTFOLIOS. THE AMOUNTS SHOWN FOR THE DEATH BENEFITS, ACCUMULATED VALUES AND
CASH SURRENDER VALUES IN THIS ILLUSTRATION REFLECT YOUR SELECTION OF UNDERLYING
PORTFOLIOS AND ACTUAL FUND EXPENSES (EXCLUDING ANY FOREIGN TAXES) INCURRED BY
THE PORTFOLIOS FOR THE YEAR ENDING DECEMBER 31, 1999.

UNDERLYING PORTFOLIOS

<TABLE>
<CAPTION>
Investment
Advisory Other
Portfolio Fee Expenses
-----------------------------------------------------
<S> <C> <C>
Money Market 0.35% 0.04%
Managed Bond 0.60% 0.05%
Government Securities 0.60% 0.06%
High Yield 0.60% 0.05%
Small-Cap Equity 0.65% 0.05%
Equity Income 0.65% 0.05%
Multi-Strategy 0.65% 0.05%
International Value 0.85% 0.16%
Equity Index 0.25% 0.04%
Growth LT 0.75% 0.04%
Equity 0.65% 0.04%
Aggressive Equity 0.80% 0.05%
Emerging Markets 1.10% 0.31%
Small-Cap Index 0.50% 0.25%
Mid-Cap Value 0.85% 0.12%
Large-Cap Value 0.85% 0.12%
REIT 1.10% 0.18%
Diversified Research 0.90% 0.05%
International Large-Cap 1.05% 0.15%
I-Net Tollkeeper 1.50% 0.15%
Brandes
International .86% .19%
Turner Core
Growth .45% .25%
Frontier Capital .90% .25%
Enhanced U.S. .40% .25%
</TABLE>

YOU HAVE SELECTED ALLOCATIONS IN THE UNDERLYING PORTFOLIOS AS STATED ABOVE. THE
AVERAGE ANNUAL EXPENSES WEIGHTED ACCORDING TO YOUR ALLOCATION PERCENTAGES ARE
EQUIVALENT TO AN ANNUAL RATE OF 0.75% FOR INVESTMENT ADVISORY FEES AND 0.12% FOR
OPERATING EXPENSES (AFTER ANY OFFSET FOR CUSTODIAN CREDITS AND EXCLUDING ANY
FOREIGN TAXES) WHICH AMOUNTS TO A TOTAL OF 0.87%. THE OPERATING EXPENSES FOR
THE DIVERSIFIED RESEARCH, INTERNATIONAL LARGE-CAP AND I-NET TOLLKEEPER ARE
ESTIMATED. THE SMALL-CAP EQUITY PORTFOLIO WAS FORMERLY CALLED THE GROWTH
PORTFOLIO. THE INTERNATIONAL VALUE PORTFOLIO WAS FORMERLY CALLED THE
INTERNATIONAL PORTFOLIO. THIS ILLUSTRATION ASSUMES THAT THE ABOVE ALLOCATIONS
REMAIN UNCHANGED. IF YOU CHANGE YOUR ALLOCATIONS, WE RECOMMEND THAT YOU REQUEST
AN ILLUSTRATION REFLECTING THE NEW ALLOCATIONS.

THE AVERAGE ANNUAL EXPENSES FOR ALL AVAILABLE UNDERLYING PORTFOLIOS FOR THE
YEAR ENDING DECEMBER 31, 1999 ARE EQUIVALENT TO AN ANNUAL RATE OF 0.75% FOR
INVESTMENT ADVISORY FEES AND 0.12% FOR OPERATING EXPENSES (AFTER ANY OFFSET
FOR CUSTODIAN CREDITS AND EXCLUDING ANY FOREIGN TAXES) WHICH AMOUNTS TO A
TOTAL OF 0.87%.

THIS ILLUSTRATION IS NOT VALID UNLESS PRESENTED WITH SUMMARY PAGES
VERSION MS7.33 - 3.31 01:20PM GPT - NONGI 3-1-2000 PAGE OF

<PAGE>

M'S VERSATILE PRODUCT - GPT (FORM 98-52M)
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE

CLIENT PREMIUMS ALLOCATED TO VARIABLE ACCOUNT
SELECT NON-SMOKER MALE AGE 45 PRESENTED BY Pacific Life

Producer

THE HYPOTHETICAL GROSS ANNUAL EARNINGS RATE ASSUMPTION IS AFTER BROKERAGE
EXPENSES AND ANY FOREIGN TAXES. A PORTFOLIO'S FOREIGN INVESTMENTS MAY BE SUBJECT
TO FOREIGN TAXES. FOREIGN TAXES FROM INTEREST AND DIVIDEND INCOME ARE TREATED AS
A DEDUCTION FROM RELEVANT INCOME FOR ACCOUNTING PURPOSES RATHER THAN AS AN
EXPENSE.

THE AMOUNTS SHOWN FOR THE DEATH BENEFITS, ACCUMULATED VALUES AND CASH SURRENDER
VALUES REFLECT THE FACT THAT THE NET INVESTMENT RETURN ON THE VARIABLE ACCOUNTS
IS LOWER THAN THE GROSS RETURN ON THE ASSETS AS A RESULT OF CHARGES LEVIED
AGAINST THE ACCOUNTS.

AFTER DEDUCTION OF THESE AMOUNTS, HYPOTHETICAL ILLUSTRATED GROSS ANNUAL
INVESTMENT RETURNS OF 0.00% AND 6.00% CORRESPOND TO APPROXIMATE NET ANNUAL RATES
OF RETURN OF -0.87% AND 5.08% RESPECTIVELY.

NO CHARGE IS CURRENTLY IMPOSED UPON A TRANSFER OF ACCUMULATED VALUE BETWEEN
ACCOUNTS. HOWEVER, PACIFIC LIFE MAY ASSESS SUCH A CHARGE AT A FUTURE DATE

INTEREST IS CHARGED ON POLICY LOANS AT AN EFFECTIVE ANNUAL RATE OF 3.25% IN
ARREARS. INTEREST IS CREDITED TO THE PORTION OF THE ACCUMULATED VALUE SECURING
THE POLICY LOAN AT AN EFFECTIVE ANNUAL RATE OF 3.00%

POLICY LOANS AND/OR WITHDRAWALS MAY HAVE AN ADVERSE EFFECT ON THE POLICY OWNER'S
BENEFITS.

---DEATH BENEFIT OPTION---
START END OPTION
1 35 LEVEL

---BASE POLICY FACE AMOUNT---
START END AMOUNT
1 35 412,377

FUTURE ACTION REQUIRED BY POLICY OWNER

If you want to change the premium amount that you are billed, you must request
the change in writing.

PACIFIC LIFE INSURANCE COMPANY
THIS ILLUSTRATION IS NOT VALID UNLESS PRESENTED WITH SUMMARY PAGES

VERSION TIME GPT - NONGI DATE PAGE OF
<PAGE>

M'S VERSATILE PRODUCT - GPT (FORM 98-52M)
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
CLIENT PREMIUMS ALLOCATED TO VARIABLE ACCOUNT
SELECT NON-SMOKER MALE AGE 45 PRESENTED BY Pacific Life
Producer

DECREASES IN ART RIDER AMOUNTS MUST BE REQUESTED AT THE TIME OF THE DECREASE.

WHEN THE DEATH BENEFIT IS GREATER THAN THE FACE AMOUNT DUE TO ACCUMULATED VALUE
GROWTH, PAYMENT OF ADDITIONAL PREMIUM WILL BE SUBJECT TO APPROVAL.

UNDER CURRENT FEDERAL TAX LAW, THIS POLICY WILL QUALIFY AS LIFE INSURANCE ONLY
IF THE SUM OF PREMIUMS PAID AT ANY TIME DOES NOT EXCEED THE GREATER OF THE
GUIDELINE SINGLE PREMIUM OR THE SUM OF THE GUIDELINE LEVEL PREMIUMS AT SUCH
TIME. THE GUIDELINE PREMIUMS WILL CHANGE WHENEVER THERE IS A CHANGE IN THE FACE
AMOUNT OF INSURANCE OR IN OTHER POLICY BENEFITS

BASED ON OUR UNDERSTANDING OF THE INTERNAL REVENUE CODE AND THE ASSUMPTIONS IN
THIS ILLUSTRATION, THIS POLICY WOULD NOT BECOME A MODIFIED ENDOWMENT CONTRACT
(MEC). THE FEDERAL INCOME TAX CONSEQUENCES OF A MEC CAN BE SIGNIFICANT.
CONSULT YOUR TAX ADVISOR FOR FURTHER DETAILS.

ALL VALUES ASSUME PREMIUMS AND LOAN INTEREST ARE PAID WHEN DUE. IF A PAYMENT IS
RECEIVED WITHOUT BEING DESIGNATED AS A PREMIUM PAYMENT OR LOAN PAYMENT, AND
THERE IS AN OUTSTANDING LOAN, THE PAYMENT WILL BE APPLIED AS A LOAN PAYMENT.

THIS ILLUSTRATION WAS PREPARED FOR PRESENTATION IN THE STATE OF CALIFORNIA.

M'S VERSATILE PRODUCT IS DISTRIBUTED BY
Pacific Select Distributors, Inc., (formerly known as Pacific Mutual
Distributors, Inc.)
MEMBER NASD & SIPC, A SUBSIDIARY OF PACIFIC LIFE

PACIFIC LIFE INSURANCE COMPANY
THIS ILLUSTRATION IS NOT VALID UNLESS PRESENTED WITH SUMMARY PAGES

VERSION TIME GPT - NONGI DATE PAGE OF
<PAGE>

ILLUSTRATION 2
M'S VERSATILE PRODUCT - GPT (FORM 98-52M)
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE

CLIENT PREMIUMS ALLOCATED TO VARIABLE ACCOUNT
SELECT NON-SMOKER MALE AGE 45 PRESENTED BY Pacific Life
Producer

SUMMARY PAGE
<TABLE>
<CAPTION>
---CURRENT POLICY CHARGES--- -----------------GUARANTEED POLICY CHARGES------------------

ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
-----12.00% (11.03% NET)---- ----0.00% (-0.87% NET)---- ----12.00% (11.03% NET)----

NET NET NET NET NET NET
PREMIUMS ACCUM'D SURR'R DEATH ACCUM'D SURR'R DEATH ACCUM'D SURR'R DEATH
ANNUALIZED PLUS 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
YEAR PREMIUM INTEREST (EOY) (EOY) (EOY) (EOY) (EOY) (EOY) (EOY) (EOY) (EOY)
==== ========== ======== ======= ====== ======= ======= ====== ======= ======= ====== =======
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 10000.00 $10,500 $7,995 $7,220 $412,377 $5,455 $4,681 $412,377 $6,320 $5,545 $412,377
2 10000.00 $21,525 $16,757 $16,069 $412,377 $10,716 $10,028 $412,377 $13,181 $12,492 $412,377
3 10000.00 $33,101 $26,382 $25,779 $412,377 $15,776 $15,174 $412,377 $20,635 $20,033 $412,377
4 10000.00 $45,256 $37,016 $36,500 $412,377 $20,633 $20,117 $412,377 $28,767 $28,250 $412,377
5 10000.00 $58,019 $48,789 $48,358 $412,377 $25,285 $24,854 $412,377 $37,655 $37,224 $412,377
6 10000.00 $71,420 $61,835 $61,491 $412,377 $29,732 $29,387 $412,377 $47,385 $47,041 $412,377
7 10000.00 $85,491 $76,303 $76,045 $412,377 $33,945 $33,687 $412,377 $58,032 $57,774 $412,377
8 10000.00 $100,266 $92,350 $92,178 $412,377 $37,905 $37,733 $412,377 $69,692 $69,520 $412,377
9 10000.00 $115,779 $110,152 $110,066 $412,377 $41,583 $41,497 $412,377 $82,470 $82,384 $412,377
10 10000.00 $132,068 $129,901 $129,901 $412,377 $44,948 $44,948 $412,377 $96,484 $96,484 $412,377
15 10000.00 $226,575 $277,958 $277,958 $412,377 $65,438 $65,438 $412,377 $203,642 $203,642 $412,377
20 10000.00 $347,192 $528,077 $528,077 $644,254 $74,535 $74,535 $412,377 $389,113 $389,113 $474,718
25 10000.00 $501,134 $946,486 $946,486 $1,097,924 $64,358 $64,358 $412,377 $698,830 $698,830 $810,643
30 10000.00 $697,607 $1,647,430 $1,647,430 $1,762,751 $18,008 $18,008 $412,377 $1,208,121 $1,208,121 $1,292,689
35 10000.00 $948,362 $2,827,322 $2,827,322 $2,968,688 ## ## ## $2,056,591 $2,056,591 $2,159,420
</TABLE>

## ADDITIONAL PREMIUM PAYMENTS REQUIRED TO MAINTAIN REQUESTED BENEFITS.

THE PREMIUM MODE ASSUMED IN THIS ILLUSTRATION IS ANNUAL.

SUMMARY PAGES

PACIFIC LIFE INSURANCE COMPANY
THIS ILLUSTRATION IS NOT VALID UNLESS PRESENTED WITH SUMMARY PAGES

VERSION TIME GPT - NONGI DATE PAGE OF

<PAGE>

M'S VERSATILE PRODUCT - GPT (FORM 98-52M)
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
CLIENT PREMIUMS ALLOCATED TO VARIABLE ACCOUNT
SELECT NON-SMOKER MALE AGE 45 PRESENTED BY Pacific Life

Producer

ANY LOANS OR WITHDRAWALS ILLUSTRATED ARE BASED ON CURRENT POLICY CHARGE
ASSUMPTIONS AND MIGHT NOT BE AVAILABLE UNDER GUARANTEED POLICY CHARGE
ASSUMPTIONS.

INITIAL GUIDELINE SINGLE PREMIUM: $111,482.20
INITIAL GUIDELINE LEVEL PREMIUM: $10,000.10
INITIAL SEVEN PAY PREMIUM: $23,088.12

THIS ILLUSTRATION MUST BE PRECEDED OR ACCOMPANIED BY THE CURRENT PROSPECTUSES
FOR THE SEPARATE ACCOUNT AND THE FUND. READ THE PROSPECTUSES CAREFULLY BEFORE
INVESTING OR SENDING MONEY.

---ASSUMED TAX BRACKET---
START END AMOUNT
1 35 31.00

VALUES ILLUSTRATED UNDER THE GUARANTEED POLICY CHARGE COLUMNS ASSUME MAXIMUM
COST OF INSURANCE RATES. CURRENT COST OF INSURANCE RATES FOR THE BASE COVERAGE
ARE GUARANTEED FOR THE FIRST 5 YEARS.

HYPOTHETICAL FUTURE VALUES ARE BASED ON CURRENT COST OF INSURANCE RATES AND
HYPOTHETICAL GROSS EARNINGS RATE ASSUMPTIONS AS DESCRIBED BELOW.

SUMMARY PAGES

PACIFIC LIFE INSURANCE COMPANY
THIS ILLUSTRATION IS NOT VALID UNLESS PRESENTED WITH SUMMARY PAGES

VERSION TIME GPT - NONGI DATE PAGE OF
<PAGE>

M'S VERSATILE PRODUCT - GPT (FORM 98-52M)
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE

CLIENT PREMIUMS ALLOCATED TO VARIABLE ACCOUNT
SELECT NON-SMOKER MALE AGE 45 PRESENTED BY Pacific Life
Producer

UNDERLYING PORTFOLIOS

<TABLE>
<CAPTION>
Investment
Advisory Other
Portfolio Fee Expenses
----------------------------------------------------
<S> <C> <C>
Money Market 0.35% 0.04%
Managed Bond 0.60% 0.05%
Government Securities 0.60% 0.06%
High Yield 0.60% 0.05%
Small-Cap Equity 0.65% 0.05%
Equity Income 0.65% 0.05%
Multi-Strategy 0.65% 0.05%
International Value 0.85% 0.16%
Equity Index 0.25% 0.04%
Growth LT 0.75% 0.04%
Equity 0.65% 0.04%
Aggressive Equity 0.80% 0.05%
Emerging Markets 1.10% 0.31%
Small-Cap Index 0.50% 0.25%
Mid-Cap Value 0.85% 0.12%
Large-Cap Value 0.85% 0.12%
REIT 1.10% 0.18%
Diversified Research 0.90% 0.05%
International Large-Cap 1.05% 0.15%
I-Net Tollkeeper 1.50% 0.15%
Brandes
International .86% .19%
Turner Core
Growth .45% .25%
Frontier Capital .90% .25%
Enhanced U.S. .40% .25%
</TABLE>

THIS ILLUSTRATION IS NOT VALID UNLESS PRESENTED WITH SUMMARY PAGES
VERSION MS7.33 - 3.31 01:20PM GPT - NONGI 3-1-2000 PAGE OF

<PAGE>

M'S VERSATILE PRODUCT - GPT (FORM 98-52M)
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE

CLIENT PREMIUMS ALLOCATED TO VARIABLE ACCOUNT
SELECT NON-SMOKER MALE AGE 45 PRESENTED BY Pacific Life

Producer

AFTER DEDUCTION OF THESE AMOUNTS, HYPOTHETICAL ILLUSTRATED GROSS ANNUAL
INVESTMENT RETURNS OF 0.00% AND 6.00% CORRESPOND TO APPROXIMATE NET ANNUAL RATES
OF RETURN OF -0.87% AND 5.08% RESPECTIVELY.

NO CHARGE IS CURRENTLY IMPOSED UPON A TRANSFER OF ACCUMULATED VALUE BETWEEN
ACCOUNTS. HOWEVER, PACIFIC LIFE MAY ASSESS SUCH A CHARGE AT A FUTURE DATE

POLICY LOANS AND/OR WITHDRAWALS MAY HAVE AN ADVERSE EFFECT ON THE POLICY OWNER'S
BENEFITS.

---DEATH BENEFIT OPTION---
START END OPTION
1 35 LEVEL

---BASE POLICY FACE AMOUNT---
START END AMOUNT
1 35 412,377

FUTURE ACTION REQUIRED BY POLICY OWNER

If you want to change the premium amount that you are billed, you must request
the change in writing.

PACIFIC LIFE INSURANCE COMPANY
THIS ILLUSTRATION IS NOT VALID UNLESS PRESENTED WITH SUMMARY PAGES

VERSION TIME GPT - NONGI DATE PAGE OF
<PAGE>

M'S VERSATILE PRODUCT - GPT (FORM 98-52M)
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
CLIENT PREMIUMS ALLOCATED TO VARIABLE ACCOUNT
SELECT NON-SMOKER MALE AGE 45 PRESENTED BY Pacific Life
Producer

DECREASES IN ART RIDER AMOUNTS MUST BE REQUESTED AT THE TIME OF THE DECREASE.

WHEN THE DEATH BENEFIT IS GREATER THAN THE FACE AMOUNT DUE TO ACCUMULATED VALUE
GROWTH, PAYMENT OF ADDITIONAL PREMIUM WILL BE SUBJECT TO APPROVAL.

THIS ILLUSTRATION WAS PREPARED FOR PRESENTATION IN THE STATE OF CALIFORNIA.

M'S VERSATILE PRODUCT IS DISTRIBUTED BY
Pacific Select Distributors, Inc., (formerly known as Pacific Mutual
Distributors, Inc.)
MEMBER NASD & SIPC, A SUBSIDIARY OF PACIFIC LIFE

PACIFIC LIFE INSURANCE COMPANY
THIS ILLUSTRATION IS NOT VALID UNLESS PRESENTED WITH SUMMARY PAGES

VERSION TIME GPT - NONGI DATE PAGE OF
<PAGE>

ILLUSTRATION 3
M'S VERSATILE PRODUCT - GPT (FORM 98-52M)
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE

CLIENT PREMIUMS ALLOCATED TO VARIABLE ACCOUNT
SELECT NON-SMOKER MALE AGE 45 PRESENTED BY Pacific Life
Producer

SUMMARY PAGE

<TABLE>
<CAPTION>
---CURRENT POLICY CHARGES--- -----------------GUARANTEED POLICY CHARGES---------------

ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
-----6.00% (5.28% NET)----- -----0.00% (-0.68% NET)---- -----6.00% (5.28% NET)-----

NET NET NET NET NET NET
PREMIUMS ACCUM'D SURR'R DEATH ACCUM'D SURR'R DEATH ACCUM'D SURR'R DEATH
ANNUALIZED PLUS 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
YEAR PREMIUM INTEREST (EOY) (EOY) (EOY) (EOY) (EOY) (EOY) (EOY) (EOY) (EOY)
==== ========== ======== ======= ====== ======= ======= ====== ======= ======= ====== =======
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 10000.00 $10,500 $7,529 $6,754 $412,377 $5,469 $4,694 $412,377 $5,901 $5,126 $412,377
2 10000.00 $21,525 $15,347 $14,658 $412,377 $10,754 $10,065 $412,377 $11,962 $11,274 $412,377
3 10000.00 $33,101 $23,475 $22,873 $412,377 $15,848 $15,245 $412,377 $18,184 $17,582 $412,377
4 10000.00 $45,256 $31,977 $31,460 $412,377 $20,747 $20,231 $412,377 $24,578 $24,061 $412,377
5 10000.00 $58,019 $40,889 $40,459 $412,377 $25,451 $25,021 $412,377 $31,160 $30,729 $412,377
6 10000.00 $71,420 $50,244 $49,899 $412,377 $29,959 $29,615 $412,377 $37,936 $37,592 $412,377
7 10000.00 $85,491 $60,068 $59,810 $412,377 $34,242 $33,984 $412,377 $44,891 $44,633 $412,377
8 10000.00 $100,266 $70,385 $70,213 $412,377 $38,280 $38,108 $412,377 $52,018 $51,845 $412,377
9 10000.00 $115,779 $81,219 $81,133 $412,377 $42,043 $41,957 $412,377 $59,303 $59,217 $412,377
10 10000.00 $132,068 $92,589 $92,589 $412,377 $45,500 $45,500 $412,377 $66,732 $66,732 $412,377
15 10000.00 $226,575 $168,166 $168,166 $412,377 $66,592 $66,592 $412,377 $116,618 $116,618 $412,377
20 10000.00 $347,192 $264,662 $264,662 $412,377 $76,508 $76,508 $412,377 $174,588 $174,588 $412,377
25 10000.00 $501,134 $391,035 $391,035 $453,600 $67,353 $67,353 $412,377 $243,480 $243,480 $412,377
30 10000.00 $697,607 $554,867 $554,867 $593,708 $22,238 $22,238 $412,377 $333,877 $333,877 $412,377
35 10000.00 $948,362 $766,811 $766,811 $805,151 $0* $0* ## $469,449 $469,449 $492,922
</TABLE>

## ADDITIONAL PREMIUM PAYMENTS REQUIRED TO MAINTAIN REQUESTED BENEFITS.

THE PREMIUM MODE ASSUMED IN THIS ILLUSTRATION IS ANNUAL.

SUMMARY PAGES

PACIFIC LIFE INSURANCE COMPANY
THIS ILLUSTRATION IS NOT VALID UNLESS PRESENTED WITH SUMMARY PAGES

VERSION TIME GPT - NONGI DATE PAGE OF

<PAGE>

M'S VERSATILE PRODUCT - GPT (FORM 98-52M)
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
CLIENT PREMIUMS ALLOCATED TO VARIABLE ACCOUNT
SELECT NON-SMOKER MALE AGE 45 PRESENTED BY Pacific Life

Producer

ANY LOANS OR WITHDRAWALS ILLUSTRATED ARE BASED ON CURRENT POLICY CHARGE
ASSUMPTIONS AND MIGHT NOT BE AVAILABLE UNDER GUARANTEED POLICY CHARGE
ASSUMPTIONS.

INITIAL GUIDELINE SINGLE PREMIUM: $111,482.20
INITIAL GUIDELINE LEVEL PREMIUM: $10,000.10
INITIAL SEVEN PAY PREMIUM: $23,088.12

THIS ILLUSTRATION MUST BE PRECEDED OR ACCOMPANIED BY THE CURRENT PROSPECTUSES
FOR THE SEPARATE ACCOUNT AND THE FUND. READ THE PROSPECTUSES CAREFULLY BEFORE
INVESTING OR SENDING MONEY.

---ASSUMED TAX BRACKET---
START END AMOUNT
1 35 31.00

VALUES ILLUSTRATED UNDER THE GUARANTEED POLICY CHARGE COLUMNS ASSUME MAXIMUM
COST OF INSURANCE RATES. CURRENT COST OF INSURANCE RATES FOR THE BASE COVERAGE
ARE GUARANTEED FOR THE FIRST 5 YEARS.

HYPOTHETICAL FUTURE VALUES ARE BASED ON CURRENT COST OF INSURANCE RATES AND
HYPOTHETICAL GROSS EARNINGS RATE ASSUMPTIONS AS DESCRIBED BELOW.

SUMMARY PAGES

PACIFIC LIFE INSURANCE COMPANY
THIS ILLUSTRATION IS NOT VALID UNLESS PRESENTED WITH SUMMARY PAGES

VERSION TIME GPT - NONGI DATE PAGE OF
<PAGE>

M'S VERSATILE PRODUCT - GPT (FORM 98-52M)
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE

CLIENT PREMIUMS ALLOCATED TO VARIABLE ACCOUNT
SELECT NON-SMOKER MALE AGE 45 PRESENTED BY Pacific Life
Producer

UNDERLYING PORTFOLIOS

YOU HAVE SELECTED ALLOCATIONS IN THE UNDERLYING PORTFOLIOS AS STATED ABOVE. THE
AVERAGE ANNUAL EXPENSES WEIGHTED ACCORDING TO YOUR ALLOCATION PERCENTAGES ARE
EQUIVALENT TO AN ANNUAL RATE OF 0.62% FOR INVESTMENT ADVISORY FEES AND 0.06% FOR
OPERATING EXPENSES (AFTER ANY OFFSET FOR CUSTODIAN CREDITS AND EXCLUDING ANY
FOREIGN TAXES) WHICH AMOUNTS TO A TOTAL OF 0.68%. THE OPERATING EXPENSES FOR
THE DIVERSIFIED RESEARCH, INTERNATIONAL LARGE-CAP AND I-NET TOLLKEEPER ARE
ESTIMATED. THE SMALL-CAP EQUITY PORTFOLIO WAS FORMERLY CALLED THE GROWTH
PORTFOLIO. THE INTERNATIONAL VALUE PORTFOLIO WAS FORMERLY CALLED THE
INTERNATIONAL PORTFOLIO. THIS ILLUSTRATION ASSUMES THAT THE ABOVE ALLOCATIONS
REMAIN UNCHANGED. IF YOU CHANGE YOUR ALLOCATIONS, WE RECOMMEND THAT YOU REQUEST
AN ILLUSTRATION REFLECTING THE NEW ALLOCATIONS.

THIS ILLUSTRATION IS NOT VALID UNLESS PRESENTED WITH SUMMARY PAGES
VERSION MS7.33 - 3.31 01:20PM GPT - NONGI 3-1-2000 PAGE OF

<PAGE>

M'S VERSATILE PRODUCT - GPT (FORM 98-52M)
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE

CLIENT PREMIUMS ALLOCATED TO VARIABLE ACCOUNT
SELECT NON-SMOKER MALE AGE 45 PRESENTED BY Pacific Life

Producer

AFTER DEDUCTION OF THESE AMOUNTS, HYPOTHETICAL ILLUSTRATED GROSS ANNUAL
INVESTMENT RETURNS OF 0.00% AND 6.00% CORRESPOND TO APPROXIMATE NET ANNUAL RATES
OF RETURN OF -0.87% AND 5.08% RESPECTIVELY.

NO CHARGE IS CURRENTLY IMPOSED UPON A TRANSFER OF ACCUMULATED VALUE BETWEEN
ACCOUNTS. HOWEVER, PACIFIC LIFE MAY ASSESS SUCH A CHARGE AT A FUTURE DATE

POLICY LOANS AND/OR WITHDRAWALS MAY HAVE AN ADVERSE EFFECT ON THE POLICY OWNER'S
BENEFITS.

---DEATH BENEFIT OPTION---
START END OPTION
1 35 LEVEL

---BASE POLICY FACE AMOUNT---
START END AMOUNT
1 35 412,377

FUTURE ACTION REQUIRED BY POLICY OWNER

If you want to change the premium amount that you are billed, you must request
the change in writing.

PACIFIC LIFE INSURANCE COMPANY
THIS ILLUSTRATION IS NOT VALID UNLESS PRESENTED WITH SUMMARY PAGES

VERSION TIME GPT - NONGI DATE PAGE OF
<PAGE>

M'S VERSATILE PRODUCT - GPT (FORM 98-52M)
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
CLIENT PREMIUMS ALLOCATED TO VARIABLE ACCOUNT
SELECT NON-SMOKER MALE AGE 45 PRESENTED BY Pacific Life
Producer

DECREASES IN ART RIDER AMOUNTS MUST BE REQUESTED AT THE TIME OF THE DECREASE.

WHEN THE DEATH BENEFIT IS GREATER THAN THE FACE AMOUNT DUE TO ACCUMULATED VALUE
GROWTH, PAYMENT OF ADDITIONAL PREMIUM WILL BE SUBJECT TO APPROVAL.

THIS ILLUSTRATION WAS PREPARED FOR PRESENTATION IN THE STATE OF CALIFORNIA.

M'S VERSATILE PRODUCT IS DISTRIBUTED BY
Pacific Select Distributors, Inc., (formerly known as Pacific Mutual
Distributors, Inc.)
MEMBER NASD & SIPC, A SUBSIDIARY OF PACIFIC LIFE

PACIFIC LIFE INSURANCE COMPANY
THIS ILLUSTRATION IS NOT VALID UNLESS PRESENTED WITH SUMMARY PAGES

VERSION TIME GPT - NONGI DATE PAGE OF
<PAGE>

ILLUSTRATION 4
M'S VERSATILE PRODUCT - GPT (FORM 98-52M)
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE

CLIENT PREMIUMS ALLOCATED TO VARIABLE ACCOUNT
SELECT NON-SMOKER MALE AGE 45 PRESENTED BY Pacific Life
Producer

SUMMARY PAGE

<TABLE>
<CAPTION>
---CURRENT POLICY CHARGES--- -----------------GUARANTEED POLICY CHARGES---------------

ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF
----12.00% (11.24% NET)----- -----0.00% (-0.68% NET)---- ----12.00% (11.24% NET)-----

NET NET NET NET NET NET
PREMIUMS ACCUM'D SURR'R DEATH ACCUM'D SURR'R DEATH ACCUM'D SURR'R DEATH
ANNUALIZED PLUS 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
YEAR PREMIUM INTEREST (EOY) (EOY) (EOY) (EOY) (EOY) (EOY) (EOY) (EOY) (EOY)
==== ========== ======== ======= ====== ======= ======= ====== ======= ======= ====== =======
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 10000.00 $10,500 $8,012 $7,237 $412,377 $5,469 $4,694 $412,377 $6,335 $5,561 $412,377
2 10000.00 $21,525 $16,811 $16,122 $412,377 $10,754 $10,065 $412,377 $13,227 $12,538 $412,377
3 10000.00 $33,101 $26,494 $25,891 $412,377 $15,848 $15,245 $412,377 $20,730 $20,127 $412,377
4 10000.00 $45,256 $37,214 $36,698 $412,377 $20,747 $20,231 $412,377 $28,932 $28,415 $412,377
5 10000.00 $58,019 $49,105 $48,675 $412,377 $25,451 $25,021 $412,377 $37,916 $37,485 $412,377
6 10000.00 $71,420 $62,308 $61,964 $412,377 $29,959 $29,615 $412,377 $47,772 $47,428 $412,377
7 10000.00 $85,491 $76,979 $76,720 $412,377 $34,242 $33,984 $412,377 $58,582 $58,323 $412,377
8 10000.00 $100,266 $93,282 $93,110 $412,377 $38,280 $38,108 $412,377 $70,446 $70,274 $412,377
9 10000.00 $115,779 $111,405 $111,319 $412,377 $42,043 $41,957 $412,377 $83,478 $83,392 $412,377
10 10000.00 $132,068 $131,548 $131,548 $412,377 $45,500 $45,500 $412,377 $97,806 $97,806 $412,377
15 10000.00 $226,575 $283,303 $283,303 $412,377 $66,592 $66,592 $412,377 $207,932 $207,932 $412,377
20 10000.00 $347,192 $542,033 $542,033 $661,280 $76,508 $76,508 $412,377 $400,494 $400,494 $488,602
25 10000.00 $501,134 $978,961 $978,961 $1,135,595 $67,353 $67,353 $412,377 $724,155 $724,155 $840,020
30 10000.00 $697,607 $1,717,965 $1,717,965 $1,838,222 $22,238 $22,238 $412,377 $1,261,470 $1,261,470 $1,349,773
35 10000.00 $948,362 $2,973,812 $2,973,812 $3,122,502 $0* $0* ## $2,165,089 $2,165,089 $2,273,343
</TABLE>

## ADDITIONAL PREMIUM PAYMENTS REQUIRED TO MAINTAIN REQUESTED BENEFITS.

THE PREMIUM MODE ASSUMED IN THIS ILLUSTRATION IS ANNUAL.

SUMMARY PAGES

PACIFIC LIFE INSURANCE COMPANY
THIS ILLUSTRATION IS NOT VALID UNLESS PRESENTED WITH SUMMARY PAGES

VERSION TIME GPT - NONGI DATE PAGE OF

<PAGE>

M'S VERSATILE PRODUCT - GPT (FORM 98-52M)
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
CLIENT PREMIUMS ALLOCATED TO VARIABLE ACCOUNT
SELECT NON-SMOKER MALE AGE 45 PRESENTED BY Pacific Life

Producer

ANY LOANS OR WITHDRAWALS ILLUSTRATED ARE BASED ON CURRENT POLICY CHARGE
ASSUMPTIONS AND MIGHT NOT BE AVAILABLE UNDER GUARANTEED POLICY CHARGE
ASSUMPTIONS.

INITIAL GUIDELINE SINGLE PREMIUM: $111,482.20
INITIAL GUIDELINE LEVEL PREMIUM: $10,000.10
INITIAL SEVEN PAY PREMIUM: $23,088.12

THIS ILLUSTRATION MUST BE PRECEDED OR ACCOMPANIED BY THE CURRENT PROSPECTUSES
FOR THE SEPARATE ACCOUNT AND THE FUND. READ THE PROSPECTUSES CAREFULLY BEFORE
INVESTING OR SENDING MONEY.

---ASSUMED TAX BRACKET---
START END AMOUNT
1 35 31.00

VALUES ILLUSTRATED UNDER THE GUARANTEED POLICY CHARGE COLUMNS ASSUME MAXIMUM
COST OF INSURANCE RATES. CURRENT COST OF INSURANCE RATES FOR THE BASE COVERAGE
ARE GUARANTEED FOR THE FIRST 5 YEARS.

HYPOTHETICAL FUTURE VALUES ARE BASED ON CURRENT COST OF INSURANCE RATES AND
HYPOTHETICAL GROSS EARNINGS RATE ASSUMPTIONS AS DESCRIBED BELOW.

SUMMARY PAGES

PACIFIC LIFE INSURANCE COMPANY
THIS ILLUSTRATION IS NOT VALID UNLESS PRESENTED WITH SUMMARY PAGES

VERSION TIME GPT - NONGI DATE PAGE OF
<PAGE>

M'S VERSATILE PRODUCT - GPT (FORM 98-52M)
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE

CLIENT PREMIUMS ALLOCATED TO VARIABLE ACCOUNT
SELECT NON-SMOKER MALE AGE 45 PRESENTED BY Pacific Life
Producer

UNDERLYING PORTFOLIOS

YOU HAVE SELECTED ALLOCATIONS IN THE UNDERLYING PORTFOLIOS AS STATED ABOVE. THE
AVERAGE ANNUAL EXPENSES WEIGHTED ACCORDING TO YOUR ALLOCATION PERCENTAGES ARE
EQUIVALENT TO AN ANNUAL RATE OF 0.62% FOR INVESTMENT ADVISORY FEES AND 0.06% FOR
OPERATING EXPENSES (AFTER ANY OFFSET FOR CUSTODIAN CREDITS AND EXCLUDING ANY
FOREIGN TAXES) WHICH AMOUNTS TO A TOTAL OF 0.68%. THE OPERATING EXPENSES FOR
THE DIVERSIFIED RESEARCH, INTERNATIONAL LARGE-CAP AND I-NET TOLLKEEPER ARE
ESTIMATED. THE SMALL-CAP EQUITY PORTFOLIO WAS FORMERLY CALLED THE GROWTH
PORTFOLIO. THE INTERNATIONAL VALUE PORTFOLIO WAS FORMERLY CALLED THE
INTERNATIONAL PORTFOLIO. THIS ILLUSTRATION ASSUMES THAT THE ABOVE ALLOCATIONS
REMAIN UNCHANGED. IF YOU CHANGE YOUR ALLOCATIONS, WE RECOMMEND THAT YOU REQUEST
AN ILLUSTRATION REFLECTING THE NEW ALLOCATIONS.

THIS ILLUSTRATION IS NOT VALID UNLESS PRESENTED WITH SUMMARY PAGES
VERSION MS7.33 - 3.31 01:20PM GPT - NONGI 3-1-2000 PAGE OF

<PAGE>

M'S VERSATILE PRODUCT - GPT (FORM 98-52M)
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE

CLIENT PREMIUMS ALLOCATED TO VARIABLE ACCOUNT
SELECT NON-SMOKER MALE AGE 45 PRESENTED BY Pacific Life

Producer

AFTER DEDUCTION OF THESE AMOUNTS, HYPOTHETICAL ILLUSTRATED GROSS ANNUAL
INVESTMENT RETURNS OF 0.00% AND 6.00% CORRESPOND TO APPROXIMATE NET ANNUAL RATES
OF RETURN OF -0.87% AND 5.08% RESPECTIVELY.

NO CHARGE IS CURRENTLY IMPOSED UPON A TRANSFER OF ACCUMULATED VALUE BETWEEN
ACCOUNTS. HOWEVER, PACIFIC LIFE MAY ASSESS SUCH A CHARGE AT A FUTURE DATE

POLICY LOANS AND/OR WITHDRAWALS MAY HAVE AN ADVERSE EFFECT ON THE POLICY OWNER'S
BENEFITS.

---DEATH BENEFIT OPTION---
START END OPTION
1 35 LEVEL

---BASE POLICY FACE AMOUNT---
START END AMOUNT
1 35 412,377

FUTURE ACTION REQUIRED BY POLICY OWNER

If you want to change the premium amount that you are billed, you must request
the change in writing.

PACIFIC LIFE INSURANCE COMPANY
THIS ILLUSTRATION IS NOT VALID UNLESS PRESENTED WITH SUMMARY PAGES

VERSION TIME GPT - NONGI DATE PAGE OF
<PAGE>

M'S VERSATILE PRODUCT - GPT (FORM 98-52M)
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
CLIENT PREMIUMS ALLOCATED TO VARIABLE ACCOUNT
SELECT NON-SMOKER MALE AGE 45 PRESENTED BY Pacific Life
Producer

DECREASES IN ART RIDER AMOUNTS MUST BE REQUESTED AT THE TIME OF THE DECREASE.

WHEN THE DEATH BENEFIT IS GREATER THAN THE FACE AMOUNT DUE TO ACCUMULATED VALUE
GROWTH, PAYMENT OF ADDITIONAL PREMIUM WILL BE SUBJECT TO APPROVAL.

THIS ILLUSTRATION WAS PREPARED FOR PRESENTATION IN THE STATE OF CALIFORNIA.

M'S VERSATILE PRODUCT IS DISTRIBUTED BY
Pacific Select Distributors, Inc., (formerly known as Pacific Mutual
Distributors, Inc.)
MEMBER NASD & SIPC, A SUBSIDIARY OF PACIFIC LIFE

PACIFIC LIFE INSURANCE COMPANY
THIS ILLUSTRATION IS NOT VALID UNLESS PRESENTED WITH SUMMARY PAGES

VERSION TIME GPT - NONGI DATE PAGE OF