WRL SERIES ANNUITY ACCOUNT, 485APOS, 1996-02-29

WRL SERIES ANNUITY ACCOUNT
485APOS, 1996-02-29

Previous: VAN KAMPEN AMERICAN CAPITAL CALIFORNIA MUNICIPAL TRUST, NSAR-A, 1996-02-29

Next: WRL SERIES ANNUITY ACCOUNT, 485APOS, 1996-02-29

<PAGE> 1

As filed with the Securities and Exchange Commission on February 29, 1996

Registration No. 33-24856

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

PRE-EFFECTIVE AMENDMENT NO. ( )
--------------------------------

POST-EFFECTIVE AMENDMENT NO. 11 (X)

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

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940

Amendment No. 33 (X)

(Check appropriate box or boxes)

WRL SERIES ANNUITY ACCOUNT
(Exact Name of Registrant)

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
(Name of Depositor)
201 Highland Avenue
Largo, Florida 34640
(Address of Depositor's Principal Executive Offices) (Zip Code)

Depositor's Telephone Number, including Area Code:
(813) 585-6565

Thomas E. Pierpan, Esq.
Vice President and Counsel
Western Reserve Life Assurance Co. of Ohio
201 Highland Avenue
Largo, Florida 34640
(Name and Address of Agent for Service)

Copy to:

Stephen E. Roth, Esq.
Sutherland, Asbill & Brennan
1275 Pennsylvania Avenue, N.W.
Washington, D.C. 20004

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

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

on DATE , pursuant to paragraph (b) of Rule 485

60 days after filing pursuant to paragraph (a) of Rule 485

X on May 1, 1996 , pursuant to paragraph (a) of Rule 485

The Registrant has chosen to register an indefinite number of securities in
accordance with Rule 24f-2. The Rule 24f-2 notice for Registrant's most recent
fiscal year was filed on February __, 1996.

<PAGE> 2

WRL SERIES ANNUITY ACCOUNT
POST-EFFECTIVE AMENDMENT NO. 11 TO
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 ON FORM N-4

Cross Reference Sheet
Showing Location in Prospectus
and Statement of Additional Information
As Required by Form N-4

<TABLE>
<CAPTION>
FORM N-4 ITEM PROSPECTUS CAPTION
- ------------- ------------------
<S> <C> <C>
1. Cover Page........................................................... Cover Page

2. Definitions.......................................................... Definitions of Special Terms

3. Synopsis or Highlights............................................... Summary

4. Condensed Financial
Information.......................................................... Condensed Financial Information

5. General Description of
Registrant, Depositor,
and Portfolio Companies............................................. Western Reserve, the Series Account, and the
Fund; Voting Rights

6. Deductions........................................................... Charges and Deductions;
Distribution of the Contracts

7. General Description of
Variable Annuity Contracts........................................... Western Reserve, the Series
Account, and the Fund; The
Contract; Statement of
Additional Information

8. Annuity Period....................................................... The Contract - Annuity Provisions

9. Death Benefit........................................................ The Contract - Accumulation
Provisions - Death Benefits
during the Accumulation Period;
The Contract - Annuity
Provisions - Death Benefits
after the Maturity Date

10. Purchases and Contract
Value................................................................ The Contract - Accumulation
Provisions - Purchase Payments,
Net Purchase Payments,
Accumulation Unit Value;
Distribution of the Contracts

</TABLE>

(i)

<PAGE> 3

<TABLE>
<CAPTION>
FORM N-4 ITEM PROSPECTUS CAPTION
- ------------- ------------------
<S> <C> <C>
11. Redemptions......................................................... The Contract - Accumulation
Provisions - Partial Withdrawals
and Surrenders; Other Matters
Relating to the Contract -
Twenty Day Free Look

12. Taxes............................................................... Federal Tax Matters

13. Legal Proceedings................................................... Legal Proceedings

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

<TABLE>
<CAPTION>
STATEMENT OF ADDITIONAL
FORM N-4 ITEM INFORMATION CAPTION
- ------------- -----------------------
<S> <C> <C>
15. Cover Page............................................................. Cover Page

16. Table of Contents...................................................... Table of Contents

17. General Information and History........................................ Not Applicable

18. Services............................................................... Custodian; Independent
Accountants
19. Purchase of Securities Being
Offered................................................................ Addition, Deletion, and
Substitution of Investments

20. Underwriters........................................................... Distribution of Contracts

21. Calculation of Performance
Data................................................................... Calculation of Performance
Related Information

22. Annuity Payments....................................................... Not Applicable

23. Financial Statements................................................... Financial Statements
</TABLE>

(ii)

<PAGE> 4

PART A

INFORMATION REQUIRED IN A PROSPECTUS

<PAGE> 5

WRL FREEDOM VARIABLE ANNUITY
Flexible Payment Variable Accumulation
Deferred Annuity Contract

Issued By

Western Reserve Life Assurance Co. of Ohio
201 Highland Avenue
Largo, Florida 34640
(800) 851-9777
(813) 585-6565

This Prospectus describes the WRL Freedom Variable Annuity (the
"Contract"), a tax deferred variable annuity issued by Western Reserve Life
Assurance Co. of Ohio ("Western Reserve").

The Contract provides for accumulation of Contract Values on a variable
basis, a guaranteed basis, or a combination of both. If the variable
accumulation basis is chosen, Contract Values will be held in the WRL Series
Annuity Account (the "Series Account") and will vary according to the investment
performance of the underlying investment portfolios of the WRL Series Fund, Inc.
(the "Fund"). If the guaranteed basis is chosen, Contract Values will be
allocated to the Fixed Account and earn interest at no less than the minimum
guaranteed rate.

There are currently fourteen Sub-Accounts of the Series Account available
through this Contract (in addition to the Fixed Account) and Net Purchase
Payments will be allocated to one or more of these investment alternatives as
directed by the Owner. The fourteen investment portfolios of the Fund available
through this Contract are: the Aggressive Growth Portfolio, Emerging Growth
Portfolio, Growth Portfolio, Global Portfolio, Balanced Portfolio, Equity-Income
Portfolio, Bond Portfolio, Short-to-Intermediate Government Portfolio, Utility
Portfolio, Money Market Portfolio, Tactical Asset Allocation Portfolio, Value
Equity Portfolio, C.A.S.E. Growth Portfolio and Meridian/INVESCO Global Sector
Portfolio.

This Prospectus sets forth information about the Contract that a
prospective investor ought to know before investing. Additional information
about the Series Account has been filed with the Securities and Exchange
Commission in a Statement of Additional Information, dated May 1, 1996, which is
incorporated herein by reference. The Statement of Additional Information is
available upon written or oral request and without charge from Western Reserve,
P.O. Box 9051, Clearwater, FL 34618-9051; telephone number (800) 851-9777. The
table of contents for the Statement of Additional Information appears on page 36
of this Prospectus.

THE CONTRACT IS NOT A DEPOSIT OR OBLIGATION OF, OR GUARANTEED OR ENDORSED
BY, A BANK OR DEPOSITORY INSTITUTION, AND THE CONTRACT IS NOT FEDERALLY INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY
OTHER AGENCY, AND INVOLVES INVESTMENT RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL
AMOUNT INVESTED.

THIS PROSPECTUS MUST BE ACCOMPANIED OR PRECEDED BY CURRENT PROSPECTUSES FOR THE
WRL SERIES FUND, INC. CERTAIN PORTFOLIOS MAY NOT BE AVAILABLE IN ALL STATES.

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

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO DEALER, SALESPERSON OR OTHER PERSON
IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION
WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON.

THIS PROSPECTUS SHOULD BE RETAINED FOR FUTURE REFERENCE.

Prospectus Dated May 1, 1996

<PAGE> 6

TABLE OF CONTENTS

<TABLE>
<S> <C>
DEFINITIONS OF SPECIAL TERMS.............................................................. 1
SUMMARY................................................................................... 3
CONDENSED FINANCIAL INFORMATION........................................................... 7
CALCULATION OF YIELDS AND TOTAL RETURNS................................................... 10
OTHER PERFORMANCE DATA.................................................................... 12
PUBLISHED RATINGS......................................................................... 15
WESTERN RESERVE, THE SERIES ACCOUNT, AND THE FUND......................................... 15
Western Reserve Life Assurance Co. of Ohio....................................... 15
WRL Series Annuity Account....................................................... 15
WRL Series Fund, Inc............................................................. 16
CHARGES AND DEDUCTIONS.................................................................... 18
Withdrawal Charge................................................................ 19
Transfer Charge.................................................................. 20
Mortality and Expense Risk Charge................................................ 20
Administration Fee............................................................... 20
Premium Taxes.................................................................... 20
Deductions for Income Taxes...................................................... 21
Expenses of the Fund............................................................. 21
THE CONTRACT.............................................................................. 21
ACCUMULATION PROVISIONS.......................................................... 21
Purchase Payments....................................................... 21
Net Purchase Payments................................................... 22
Accumulation Units...................................................... 22
Experience Factor....................................................... 23
Transfers to and from, and among Sub-Accounts........................... 23
Dollar Cost Averaging................................................... 24
Asset Rebalancing Program............................................... 24
Partial Withdrawals and Surrenders...................................... 25
Partial Annuitization................................................... 26
Contract Loans for 401(a), 401(k), and 403(b) Contracts................. 27
Death Benefits during the Accumulation Period........................... 28
ANNUITY PROVISIONS............................................................... 29
Maturity Date and Selection of Annuity Options.......................... 29
Annuity Options......................................................... 29
Minimum Guaranteed Interest Rates....................................... 29
Death Benefits after the Maturity Date.................................. 29
Improved Annuity Rates.................................................. 30
Proof of Age, Sex, and Survival......................................... 30
</TABLE>

i
<PAGE> 7

TABLE OF CONTENTS (CONTINUED)

<TABLE>
<S> <C>
OTHER MATTERS RELATING TO THE CONTRACT.................................................... 30
Changes in Purchase Payments..................................................... 30
Twenty Day Free Look............................................................. 30
Contract Payments................................................................ 30
Ownership........................................................................ 30
Annuitant and Contingent Annuitant............................................... 31
Beneficiary...................................................................... 31
Modification or Waiver........................................................... 31
FEDERAL TAX MATTERS....................................................................... 31
Introduction..................................................................... 31
Company Tax Status............................................................... 32
Taxation of Annuities............................................................ 32
Qualified Plans.................................................................. 34
Additional Considerations........................................................ 35
THE FIXED ACCOUNT......................................................................... 36
Minimum Guaranteed and Current Interest Rates.................................... 37
Fixed Account Value.............................................................. 37
Allocations, Transfers and Withdrawals........................................... 37
DISTRIBUTION OF THE CONTRACTS............................................................. 38
VOTING RIGHTS............................................................................. 38
LEGAL PROCEEDINGS......................................................................... 39
STATEMENT OF ADDITIONAL INFORMATION....................................................... 39
</TABLE>

ii
<PAGE> 8

DEFINITIONS OF SPECIAL TERMS

ACCUMULATION PERIOD -- The period between the Contract Date and the
Maturity Date while the Contract is in force.

ACCUMULATION UNIT -- An accounting unit of measure used to calculate
Sub-Account values during the Accumulation Period.

ANNUITANT -- The person named to receive annuity payments.

ANNIVERSARY -- The same day and month as the Contract Date for each
succeeding year the Contract remains in force.

ATTAINED AGE -- The Issue Age plus the number of completed Contract Years.

BENEFICIARY -- The person(s) entitled to receive the death benefit proceeds
under the Contract.

CASH VALUE -- The Contract Value less any applicable premium taxes and any
contingent deferred sales charge.

CODE -- The Internal Revenue Code of 1986, as amended.

CONTINGENT ANNUITANT -- The person named to become the new Annuitant upon
the current Annuitant's death during the Accumulation Period if the Owner is
then still alive.

CONTRACT DATE -- The later of the date on which the initial Purchase
Payment is received and the date that the properly completed application is
received at Western Reserve's administrative office.

CONTRACT VALUE -- The sum of the Series Account Value and the Fixed Account
Value.

CONTRACT YEAR -- A period of twelve consecutive months beginning on the
Contract Date and any Anniversary thereafter.

DEATH REPORT DAY -- The Valuation Date coincident with or next following
the day on which Western Reserve has received both: (1) due proof of death; and
(2) a Written Notice for an election of (a) a single sum payment or (b) an
alternative election as provided under the death benefit provision of the
Contract.

FIXED ACCOUNT -- An option under the Contract that provides for
accumulation of Contract Values on a guaranteed basis.

FIXED ACCOUNT VALUE -- The value in the Fixed Account allocable to a
Contract.

FUND -- WRL Series Fund, Inc.

ISSUE AGE -- The age on the birthday nearest the Contract Date.

MATURITY DATE -- The date on which the Accumulation Period ends and annuity
payments are to commence.

NET PURCHASE PAYMENT -- The Purchase Payment less any applicable premium
taxes.

NON-QUALIFIED CONTRACTS -- Contracts issued in connection with plans.
Non-Qualified Contracts do not qualify for special Federal income tax treatment
under the Code.

OWNER -- The person(s) entitled to exercise all rights under the Contract
during the lifetime of the Annuitant. The Annuitant is the Owner unless the
application states otherwise, or unless a change of ownership is made at a later
time.

PORTFOLIO -- A separate investment portfolio of the Fund.

PURCHASE PAYMENTS -- Amounts paid by an Owner or on the Owner's behalf to
Western Reserve as consideration for the benefits provided by the Contract.

1
<PAGE> 9

DEFINITIONS OF SPECIAL TERMS (CONTINUED)

QUALIFIED CONTRACTS -- Contracts issued in connection with plans that
qualify for special Federal income tax treatment under the Code.

SERIES ACCOUNT OR SEPARATE ACCOUNT -- WRL Series Annuity Account, a
separate investment account composed of several Sub-Accounts established to
receive and invest Net Purchase Payments not allocated to the Fixed Account.

SERIES ACCOUNT VALUE -- The value in the Series Account allocable to a
Contract, which value is equal to the total of the values allocable to a
Contract in each of the Sub-Accounts.

SUB-ACCOUNT -- A sub-division of the Series Account that invests
exclusively in the shares of a specified Portfolio.

SURRENDER -- The termination of a Contract at the option of the Owner(s).

VALUATION DATE -- Each day on which the New York Stock Exchange is open for
business.

VALUATION PERIOD -- The period commencing at the end of one Valuation Date
and continuing to the end of the next succeeding Valuation Date.

WRITTEN NOTICE -- Written Notice means a notice by the Owner to Western
Reserve requesting or exercising a right of the Owner as provided in the
Contract. In order for a notice to be considered a Written Notice, it must: be
in writing, signed by the Owner; be in a form acceptable to Western Reserve; and
contain the information and documentation, as determined in Western Reserve's
sole discretion, necessary for Western Reserve to take the action requested or
for the Owner to exercise the right specified. A Written Notice will not be
considered complete until all necessary supporting documentation required or
requested by Western Reserve has been received by Western Reserve.

2
<PAGE> 10

SUMMARY

This summary provides you with an overview of the tax deferred variable
annuity contract offered by Western Reserve and funded by the Series Account and
the Fixed Account.

THE CONTRACT

The Contract is a tax deferred variable annuity contract that may be
purchased by submitting a completed application to Western Reserve for its
approval. The Contract provides for accumulation of Contract Values on a
variable basis, a guaranteed basis, or a combination of both, and for payment of
periodic annuity payments on a guaranteed basis. (For information about tax
status, see "FEDERAL TAX MATTERS" on pages 28-33.)

TWENTY DAY FREE LOOK

If an Owner is not satisfied with the Contract, it may be cancelled by
returning it within twenty days after receipt together with a written request
for cancellation. In such event, Western Reserve will pay the Owner an amount
equal to the sum of: (i) the difference, if any, between the Purchase Payments
received and the amounts allocated to the Sub-Accounts and the Fixed Account
under the Contract; (ii) the amount allocated to the Fixed Account under the
Contract; and (iii) the Series Account Value on the date Western Reserve or its
agent receives the returned Contract. (In certain states, Western Reserve will
refund the Purchase Payments.) (See "OTHER MATTERS RELATING TO THE
CONTRACT - Twenty Day Free Look" on page 27.)

THE FUND

The underlying variable investments for the Contracts are shares of
fourteen Portfolios of the Fund: the Aggressive Growth Portfolio, Emerging
Growth Portfolio, Growth Portfolio, Global Portfolio, Balanced Portfolio,
Equity-Income Portfolio, Bond Portfolio, Short-to-Intermediate Government
Portfolio, Utility Portfolio, Money Market Portfolio, Tactical Asset Allocation
Portfolio, Value Equity Portfolio, C.A.S.E. Growth Portfolio and
Meridian/INVESCO Global Sector Portfolio. Western Reserve reserves the right to
offer additional investment portfolios or mutual funds with differing investment
objectives. (See "WESTERN RESERVE, THE SERIES ACCOUNT, AND THE FUND - WRL Series
Fund, Inc." on page 14.)

PURCHASE PAYMENTS

The Owner may make Purchase Payments at such frequency as the Owner elects.
The initial Purchase Payment generally must accompany the application, and for
Non-Qualified Contracts must be at least $5,000; however, a minimum initial
Purchase Payment of $1,000 is allowed provided the application reflects
anticipated additional monthly periodic Purchase Payments of at least $100, via
electronic funds transfer from the Owner's bank account. For Individual
Retirement Annuities ("IRAs"), the minimum initial Purchase Payment is $1,000.
For Qualified Contracts other than IRAs, the minimum initial Purchase Payment is
$100. For all Contracts, subsequent Purchase Payments must be at least $100,
unless Western Reserve consents to a smaller amount. The maximum amount of
Purchase Payments that may be made in any Contract Year is $1,000,000, unless
Western Reserve consents to a larger amount. Western Reserve reserves the right
to reject any Purchase Payment for any reason permitted by law. (See
"ACCUMULATION PROVISIONS - Purchase Payments" on page 19.)

WITHDRAWAL AND SURRENDER PRIVILEGE

A Contract may be surrendered at any time prior to the Maturity Date, or
portions of the Cash Value may be withdrawn after the first Anniversary. The
Cash Value may not, however, be reduced by any partial withdrawal to less than
$10,000. (See "THE CONTRACT - Partial Withdrawals and Surrenders" on page 22.)
For Qualified Contracts issued under Code Section 403(b), certain restrictions
will apply.

3
<PAGE> 11

Moreover, a withdrawal or Surrender may have Federal income tax consequences.
(See "FEDERAL TAX MATTERS - Qualified Plans" on page 30.)

WITHDRAWAL CHARGE

No deductions for sales expenses are made from Purchase Payments. A
Withdrawal Charge, which is a contingent deferred sales charge, may, however, be
assessed against Contract Values when partially withdrawn or surrendered.

The length of time from receipt of a Purchase Payment to the time of a
partial withdrawal or Surrender of that Purchase Payment determines whether the
Withdrawal Charge will be deducted. The charge is a percentage of the amount of
each Purchase Payment partially withdrawn or surrendered within five years of
its payment. Purchase Payments are considered withdrawn or surrendered on a
first-in, first-out basis and Contract Value in excess of aggregate Purchase
Payments is considered withdrawn or surrendered before any Purchase Payments.
The charge is as follows:

<TABLE>
<CAPTION>
Number of Years
from Receipt of Each
Charge Purchase Payment
- ------ --------------------
<S> <C>
5% 0-5
0% More than 5
</TABLE>

For the first withdrawal or series of Systematic Partial Withdrawals during
each Contract Year, the Withdrawal Charge is waived for the first 10% of the
Contract Value that otherwise would be subject to the Withdrawal Charge. No
Withdrawal Charge will be assessed if Contract Values are applied to any annuity
option under the Contract. (See "CHARGES AND DEDUCTIONS - Withdrawal Charge" on
page 17.) Additionally, Code Section 72(q) currently imposes a 10% penalty tax
on partial withdrawals or Surrenders from Non-Qualified Contracts if such
partial withdrawals or Surrenders are made prior to age 59 1/2 and other
exceptions do not apply. (See "FEDERAL TAX MATTERS on page 28.)

MORTALITY AND EXPENSE RISK CHARGE

For assuming mortality and expense risks under the Contracts, Western
Reserve imposes a 1.25% per annum charge against all Contract Values held in the
Series Account. (See "CHARGES AND DEDUCTIONS - Mortality and Expense Risk
Charge" on page 18.)

ADMINISTRATION FEE

An Administration Fee of $30 is deducted annually on each Contract
Anniversary. (See "CHARGES AND DEDUCTIONS - Administration Fee" on page 18.)

PREMIUM TAXES

No deduction is made for premium taxes unless Western Reserve incurs a
premium tax under state law. Certain states impose premium taxes ranging up to
3.5% of Purchase Payments. (See "CHARGES AND DEDUCTIONS - Premium Taxes" on page
18.)

CHARGES BY THE FUND

The Fund is subject to certain fees, charges and expenses. (See "WESTERN
RESERVE, THE SERIES ACCOUNT, AND THE FUND - WRL Series Fund, Inc." on page 14
and the Prospectuses for the Fund.)

4
<PAGE> 12

SUMMARY OF CHARGES AND EXPENSES

The following table illustrates the charges and deductions under the
Contract, as well as the fees and expenses of the Fund.

<TABLE>
<S> <C>
Owner Transaction Expenses
Sales Load Imposed on Purchases None
Withdrawal Charge
(as a % of each Purchase Payment withdrawn
received within the previous 5 years) 5%
Other Surrender Fees None
Transfer Charge
On first 12 transfers during each Contract Year None
On each transfer thereafter during same Contract Year $10.00
$30.00 Per
Annual Administration Fee Contract
Separate Account Annual Expenses (as a % of average Series Account Value)
Mortality and Expenses Risk Charges 1.25%
Other Account Fees and Expenses None
Total Separate Account Annual Expenses 1.25%
Fund Annual Expenses* (as a % of Fund average net assets)
</TABLE>

<TABLE>
<CAPTION>
Aggressive Emerging
Growth Growth Growth Global Balanced
Portfolio Portfolio Portfolio Portfolio Portfolio
---------- -------- --------- --------- ----------
<S> <C> <C> <C> <C> <C>
Management Fees 0.80% 0.80% 0.80% 0.80% 0.80%
Other Expenses (after reimbursement) 0.20% 0.12% 0.04% 0.21% 0.20%
Total Fund Annual Expenses 1.00% 0.92% 0.84% 1.01% 1.00%
</TABLE>

<TABLE>
<CAPTION>
Short-to- Tactical
Intermediate Equity- Money Asset Value C.A.S.E. Meridian/INVESCO
Bond Government Income Utility Market Allocation Equity Growth Global Sector
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
--------- ------------ --------- --------- --------- ---------- --------- --------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Management
Fees 0.50% 0.60% 0.80% 0.75% 0.50% 0.80% 0.80% 0.80% 1.10%
Other
Expenses
(after
reimbursement) 0.09% 0.21% 0.09% 0.25% 0.10% 0.20% 0.20% 0.20% 0.20%
Total Fund
Annual
Expenses 0.59% 0.81% 0.89% 1.00% 0.60% 1.00% 1.00% 1.00% 1.30%
</TABLE>

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

* Because the Value Equity and Meridian/INVESCO Global Sector Portfolios
commenced operations on May 1, 1996, the percentages set forth as "Other
Expenses" and "Total Fund Annual Expenses" are estimates. Because the C.A.S.E.
Growth Portfolio commenced operations on May 1, 1995, the "Other Expenses" and
"Total Fund Annual Expenses" are annualized.

The purpose of the preceding Table is to assist the Owner in understanding
the various costs and expenses that an Owner will bear directly and indirectly.
The Table reflects charges and expenses of the Separate Account as well as the
Portfolios of the Fund for the fiscal year ended December 31, 1995, except that
the "Other Expenses" and "Total Fund Annual Expenses" for the Value Equity and
Meridian/INVESCO Global Sector Portfolios are estimates. Because the C.A.S.E.
Growth Portfolio commenced operations on May 1, 1995, the "Other Expenses" and
"Total Fund Annual Expenses" are annualized. Expenses of the Fund may be higher
or lower in the future. The Table does not reflect any premium tax which may be
applicable. For more information on the charges described in this Table see
"CHARGES AND DEDUCTIONS" on page 16 and the Portfolios' Prospectuses which
accompany this Prospectus.

5
<PAGE> 13

In 1995, Western Reserve had undertaken to pay Fund expenses for each
Portfolio to the extent normal operating expenses of a Portfolio exceed a stated
percentage of the Portfolio's average daily net assets. In 1995, Western Reserve
reimbursed the C.A.S.E. Growth Portfolio in the amount of $23,832 and the
Utility Portfolio in the amount of $14,417. See each Portfolio's prospectus for
a description of the expense limitation applicable to that Portfolio.

Examples

An Owner would pay the following expenses on a $1,000 investment, assuming
a 5% annual return on assets:

1. If you surrender your Contract at the end of the applicable time period:

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Aggressive Growth Sub-Account $ $ $ $
Emerging Growth Sub-Account
Growth Sub-Account
Global Sub-Account
Balanced Sub-Account
Equity-Income Sub-Account
Bond Sub-Account
Short-to-Intermediate
Government Sub-Account
Utility Sub-Account
Money Market Sub-Account
Tactical Asset Allocation Sub-Account
Value Equity Sub-Account
C.A.S.E. Growth Sub-Account
Meridian/INVESCO Global Sector
Sub-Account
</TABLE>

2. If you annuitize or do not surrender at the end of the applicable time
period (note annuitization is not available before the fifth anniversary):

6
<PAGE> 14

The above examples assume that no transfer charges have been assessed. In
addition, the examples include the $30 Annual Administration Fee based on an
average Series Account Value per Contract of $ , which converts that
charge into an assumed charge at an annual rate of % of the Series Account
Value.

THESE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES AND THE ACTUAL EXPENSES PAID MAY BE GREATER OR LESS THAN THOSE SHOWN.
THE ASSUMED 5% ANNUAL RETURN IS HYPOTHETICAL AND SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE ANNUAL RETURNS, WHICH MAY BE GREATER OR LESS
THAN THE ASSUMED AMOUNT.

DEATH BENEFIT

If the Owner or the Annuitant dies before the Maturity Date, a death
benefit will be provided, unless certain elections or designations have been
made that would keep the Contract in force. After the Maturity Date, death
benefits will be paid in accordance with the annuity option then in effect. (See
"ACCUMULATION PROVISIONS - Death Benefits during the Accumulation Period" on
page 25 and "ANNUITY PROVISIONS - Death Benefits after the Maturity Date" on
page 26.)

ANNUITY PAYMENT OPTIONS

Annuity payment options are available under the Contract for distribution
of the Contract Value after the Maturity Date. The Maturity Date may not be
earlier than the end of the fifth Contract Year and cannot be deferred beyond
the Annuitant reaching Attained Age 90. (See "ANNUITY PROVISIONS - Maturity Date
and Selection of Annuity Options" on page 26.)

TRANSFERS

The Owner may transfer any or all of the Contract Value from the Series
Account to the Fixed Account, from the Fixed Account to the Series Account
(subject to certain restrictions), or among the Sub-Accounts. Twelve transfers
are permitted without charge in a Contract Year. Each additional transfer will
be subject to a transfer charge of $10. This charge will not be increased.
Certain restrictions apply to transfers from the Fixed Account. Western Reserve
may, at any time, revoke or modify the transfer privilege. (See "ACCUMULATION
PROVISIONS - Transfers to and from, and among Sub-Accounts" on page 21 and "THE
FIXED ACCOUNT - Allocations, Transfers and Withdrawals" on page 34.)

FIXED ACCOUNT

Fixed Account Values will be held in the general account of Western Reserve
and earn interest at no less than the minimum guaranteed rate. The Fixed Account
is discussed in the section entitled "THE FIXED ACCOUNT" beginning on page 33.

CONDENSED FINANCIAL INFORMATION

Accumulation Unit Values - WRL Series Annuity Account

<TABLE>
<CAPTION>
Period From February 24, 1989* to December 31, 1989
----------------------------------------------------------------
Number of
Accumulation Unit Accumulation Unit Accumulation Units
Value at Beginning Value at End Outstanding at End
Sub-Account of Period of Period of Period
- --------------------------------- ------------------ ----------------- -------------------
<S> <C> <C> <C>
Growth $ 10.000 $13.339 2,127,009
Bond 10.000 11.272 339,412
Money Market 10.000 10.579 279,180
</TABLE>

- ---------------------
* Commencement of operations.

7
<PAGE> 15

<TABLE>
<CAPTION>
Year Ended December 31, 1990
----------------------------------------------------------------
Number of
Accumulation Unit Accumulation Unit Accumulation Units
Value at Beginning Value at End Outstanding at End
Sub-Account of Period of Period of Period
- --------------------------------- ------------------ ----------------- -------------------
<S> <C> <C> <C>
Growth $ 13.399 $13.210 5,538,622
Bond 11.272 11.831 598,466
Money Market 10.579 11.235 1,774,514
</TABLE>

<TABLE>
<CAPTION>
Year Ended December 31, 1991
----------------------------------------------------------------
Number of
Accumulation Unit Accumulation Unit Accumulation Units
Value at Beginning Value at End Outstanding at End
Sub-Account of Period of Period of Period
- --------------------------------- ------------------ ----------------- -------------------
<S> <C> <C> <C>
Growth $ 13.210 $20.848 13,667,137
Bond 11.831 13.894 1,389,932
Money Market 11.235 11.681 2,482,842
</TABLE>

<TABLE>
<CAPTION>
Year Ended December 31, 1992
----------------------------------------------------------------
Number of
Accumulation Unit Accumulation Unit Accumulation Units
Value at Beginning Value at End Outstanding at End
Sub-Account of Period of Period of Period
- --------------------------------- ------------------ ----------------- -------------------
<S> <C> <C> <C>
Growth* $ 20.848 $21.071 26,351,578
Bond* 13.894 14.650 3,565,475
Money Market* 11.681 11.888 3,459,934
Global** 10.000 10.152 25,000
Short-to-Intermediate
Government** 10.000 10.036 85,000
</TABLE>

<TABLE>
<CAPTION>
Year Ended December 31, 1993
----------------------------------------------------------------
Number of
Accumulation Unit Accumulation Unit Accumulation Units
Value at Beginning Value at End Outstanding at End
Sub-Account of Period of Period of Period
- --------------------------------- ------------------ ----------------- -------------------
<S> <C> <C> <C>
Growth $ 21.071 $21.640 24,211,618
Bond 14.650 16.400 3,427,903
Money Market 11.888 12.030 2,231,209
Global 10.152 13.540 3,894,402
Short-to-Intermediate Government 10.036 10.360 531,827
</TABLE>

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

* This Sub-Account commenced operations on February 24, 1989.

** This Sub-Account commenced operations on December 3, 1992 and therefore the
fiscal period reported for this Sub-Account is only 28 days.

8
<PAGE> 16

<TABLE>
<CAPTION>
Period From March 1, 1993* to December 31, 1993
----------------------------------------------------------------
Number of
Accumulation Unit Accumulation Unit Accumulation Units
Value at Beginning Value at End Outstanding at End
Sub-Account of Period of Period of Period
- --------------------------------- ------------------ ----------------- -------------------
<S> <C> <C> <C>
Emerging Growth $ 10.000 $12.370 3,726,684
Equity-Income 10.000 11.250 3,311,227
</TABLE>

<TABLE>
<CAPTION>
Year Ended December 31, 1994
----------------------------------------------------------------
Number of
Accumulation Unit Accumulation Unit Accumulation Units
Value at Beginning Value at End Outstanding at End
Sub-Account of Period of Period of Period
- --------------------------------- ------------------ ----------------- -------------------
<S> <C> <C> <C>
Growth $ 21.640 $19.595 17,802,413
Bond 16.400 15.076 2,386,284
Money Market 12.030 12.294 3,056,431
Global 13.540 13.403 7,382,235
Short-to-Intermediate Government 10.360 10.192 314,292
Emerging Growth 12.370 11.315 4,961,450
Equity-Income 11.250 11.055 4,973,564
</TABLE>

<TABLE>
<CAPTION>
Period From March 1, 1994* to December 31, 1994
----------------------------------------------------------------
Number of
Accumulation Unit Accumulation Unit Accumulation Units
Value at Beginning Value at End Outstanding at End
Sub-Account of Period of Period of Period
- --------------------------------- ------------------ ----------------- -------------------
<S> <C> <C> <C>
Aggressive Growth $ 10.000 $ 9.792 1,491,572
Balanced 10.000 9.348 620,286
Utility 10.000 9.463 338,817
</TABLE>

<TABLE>
<CAPTION>
Year Ended December 31, 1995
----------------------------------------------------------------
Number of
Accumulation Unit Accumulation Unit Accumulation Units
Value at Beginning Value at End Outstanding at End
Sub-Account of Period of Period of Period
- --------------------------------- ------------------ ----------------- -------------------
<S> <C> <C> <C>
Growth $ $ $
Bond
Money Market
Global
Short-to-Intermediate Government
Emerging Growth
Equity-Income
Aggressive Growth
Balanced
Utility
</TABLE>

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

* Commencement of operations of these Sub-Accounts.

9
<PAGE> 17

<TABLE>
<CAPTION>
Period From January 3, 1995* to December 31, 1995
---------------------------------------------------------------
Number of
Accumulation Unit Accumulation Unit Accumulation Units
Value at Beginning Value at End Outstanding at End
Sub-Account of Period of Period of Period
- ---------------------------------- ------------------ ----------------- ------------------
<S> <C> <C> <C>
Tactical Asset $ $ $
Allocation
</TABLE>

<TABLE>
<CAPTION>
Period From May 1, 1995* to December 31, 1995
---------------------------------------------------------------
Number of
Accumulation Unit Accumulation Unit Accumulation Units
Value at Beginning Value at End Outstanding at End
Sub-Account of Period of Period of Period
- ---------------------------------- ------------------ ----------------- ------------------
<S> <C> <C> <C>
C.A.S.E. Growth $ $ $
</TABLE>

- ---------------------------------
* Commencement of operations of these Sub-Accounts.

Because the Value Equity and Meridian/INVESCO Global Sector Sub-Accounts
did not commence operations until May 1, 1996, there is no condensed financial
information for these Sub-Accounts for the year ended December 31, 1995.

The financial statements of the Series Account are in the Statement of
Additional Information.

CALCULATION OF YIELDS AND TOTAL RETURNS

From time to time, Western Reserve may disclose in advertisements and sales
literature yields and total returns for the Sub-Accounts representing the
Accumulation Period under a Contract. In addition, Western Reserve may, on the
same basis, advertise the effective yield of the Money Market Sub-Account under
a Contract. THESE YIELDS AND TOTAL RETURNS ARE BASED ON THE SUB-ACCOUNTS'
HISTORICAL PERFORMANCE ONLY AND ARE NOT INTENDED TO INDICATE FUTURE PERFORMANCE.
For more detailed information about the performance data calculations described
below, see the Statement of Additional Information.

YIELD

The yield of the Money Market Sub-Account for a Contract refers to the
annualized income produced by a hypothetical Series Account Value in the Money
Market Sub-Account under a Contract over a specified seven day period. The yield
calculation assumes that the same amount of income produced for that seven day
period is also produced for each seven day period over a fifty-two week period
and is shown as a percentage of the hypothetical Series Account Value. The
effective yield is calculated similarly but, when annualized, the income earned
by the Series Account Value in the Money Market Sub-Account is assumed to be
reinvested. The effective yield will be slightly higher than the yield because
of the compounding effect of this assumed reinvestment of income. Based on the
method of calculation described in the Statement of Additional Information, for
the seven-day period ended December 31, 1995, the current yield and effective
yield for the Money Market Sub-Account were as follows:

Current yield: = %

Effective yield: = %

The yield of a Sub-Account other than the Money Market Sub-Account ("other
Sub-Accounts"), refers to the income produced by a hypothetical Series Account
Value in the other Sub-Accounts over a specified thirty day period expressed as
a percentage rate of return for that period. The yield is calculated by assuming
that the income produced by the investment during that thirty day period is
produced each thirty day period over a twelve month period and is shown as a
percentage of the Series Account Value.

10
<PAGE> 18

Based on the method of calculation described in the Statement of Additional
Information, for the thirty day period ended December 31, 1995, the yield for
the following Sub-Account(s) was as follows:

<TABLE>
<S> <C>
Bond Sub-Account: = %
Short-to-Intermediate
Government Sub-Account: = %
</TABLE>

TOTAL RETURN

The total return of a Sub-Account for a Contract refers to return
quotations assuming a hypothetical Series Account Value in the Sub-Account has
been held for various periods of time including, but not limited to, a period
measured from the date the Sub-Account commenced operations. When a Sub-Account
has been in operation for one, five, and ten years, respectively, the total
return for these periods will be provided. The total return quotations for a
hypothetical Series Account Value will represent the average annual compounded
rates of return that would equate an initial Series Account Value of $1,000
under a Contract to the redemption value of that investment as of the last day
of each of the periods for which total return quotations are provided. FOR
PURPOSES OF THE TOTAL RETURN QUOTATIONS, THE CALCULATIONS TAKE INTO ACCOUNT ALL
FEES AND CHARGES THAT ARE CHARGED TO ALL CONTRACTS DURING THE ACCUMULATION
PERIOD. Such fees and charges include the $30 Administration Fee, calculated on
the basis of an estimated Series Account Value per Contract of $ ,
which converts that charge to an annual rate of % of the Series Account
Value. The calculations also assume a complete surrender as of the end of the
period and deduction of the Withdrawal Charge. THE CALCULATIONS DO NOT INCLUDE A
DEDUCTION FOR ANY PREMIUM TAXES THAT MAY BE APPLICABLE TO A PARTICULAR CONTRACT.

Based on the method of calculation described above and in more detail in
the Statement of Additional Information, the average annual total returns for
periods beginning with the commencement of each Sub-Account to December 31, 1995
were as follows:

<TABLE>
<CAPTION>
Period
From 2/24/89* Five Year Period Three Year Period One Year Period
Sub-Account to 12/31/95 Ended 12/31/95 Ended 12/31/95 Ended 12/31/95
- --------------- ------------- ---------------- ----------------- ---------------
<S> <C> <C> <C> <C>
Growth % % % %
Bond % % % %
Money Market % % % %
</TABLE>

<TABLE>
<CAPTION>
Period Three Year Period
From 12/3/92* Ended One Year Period
Sub-Account to 12/31/95 12/31/95 Ended 12/31/95
- -------------------------------- ------------- ----------------- ---------------
<S> <C> <C> <C>
Global % % %
Short-to-Intermediate Government % % %
</TABLE>

<TABLE>
<CAPTION>
Period
From 3/1/93* One Year Period
Sub-Account to 12/31/95 Ended 12/31/95
- ------------------------------------------------------- ------------ ---------------
<S> <C> <C>
Emerging Growth % %
Equity-Income % %
</TABLE>

<TABLE>
<CAPTION>
Period One Year Period
From 3/1/94* Ended
Sub-Account to 12/31/95 12/31/95
- ---------------------------------------------------- -------------- ---------------
<S> <C> <C>
Aggressive Growth % %
Balance % %
Utility % %
</TABLE>

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

* Commencement of operations of these Sub-Accounts.

11
<PAGE> 19

<TABLE>
<CAPTION>
Period
From 1/3/95*
Sub-Account to 12/31/95
- ---------------------------------------------------- --------------
<S> <C>
Tactical Asset Allocation %
</TABLE>

<TABLE>
<CAPTION>
Period
From 5/1/95*
Sub-Account to 12/31/95
- ---------------------------------------------------- --------------
<S> <C>
C.A.S.E. Growth %
</TABLE>

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

* Commencement of operations of this Sub-Account.

Because the Value Equity and Meridan/INVESCO Global Sector Sub-Accounts had
not yet commenced operations as of December 31, 1995, no performance information
is provided for these Sub-Accounts.

OTHER PERFORMANCE DATA

Western Reserve may from time to time disclose average annual total return
in non-standard formats and cumulative total return for Contracts funded by the
Sub-Accounts.

Western Reserve may from time to time also disclose in advertisements and
sales literature yields and non-standard total returns for the Sub-Accounts
(some of which do not include Contract and Series Account fees and charges)
including such disclosure for periods prior to the date the Series Account
commenced operations.

For periods prior to the date each Sub-Account commenced operations,
performance information will be calculated based on the performance of the
Fund's corresponding Portfolios and the assumption that the Sub-Accounts were in
existence for the same periods as those indicated for the corresponding Fund's
Portfolios, with a level of fees and charges approximately equal to those
currently assessed against the applicable Sub-Accounts or against Owners'
Contract Values under the Contracts.

NON-STANDARD PERFORMANCE DATA WILL ONLY BE DISCLOSED IF THE STANDARD
PERFORMANCE DATA FOR THE REQUIRED PERIODS IS ALSO DISCLOSED.

Based on the method of calculation described above and in more detail in
the Statement of Additional Information, the average annual total returns of the
Aggressive Growth, Emerging Growth, Growth, Global, Balanced, Equity-Income,
Bond, Short-to-Intermediate Government, Utility, Money Market, Tactical Asset
Allocation and C.A.S.E. Growth Sub-Accounts for the periods ended on December
31, 1995, were as follows:

<TABLE>
<CAPTION>
Period Three
From Five Year Year One Year
10/2/86* Period Period Period
to Ended Ended Ended
Sub-Account 12/31/95 12/31/95 12/31/95 12/31/95
- ------------------------------------ ---------- --------- --------- ---------
<S> <C> <C> <C> <C>
Growth % % % %
Bond % % % %
Money Market % % % %
</TABLE>

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

* Commencement of operations of the Fund's Portfolios.

12
<PAGE> 20

<TABLE>
<CAPTION>
Period Three Year One Year
From Period Period
12/3/92** to Ended Ended
Sub-Account 12/31/95 12/31/95 12/31/95
- ------------------------------------- ------------ ---------- --------
<S> <C> <C>
Global % %
Short-to-Intermediate Government % %
</TABLE>

<TABLE>
<CAPTION>
Period One Year
From Period
3/1/93** to Ended
Sub-Account 12/31/95 12/31/95
- ------------------------------------- ------------ --------
<S> <C> <C>
Emerging Growth % %
Equity-Income % %
</TABLE>

<TABLE>
<CAPTION>
Period One Year
From Period
3/1/94** to Ended
Sub-Account 12/31/95 12/31/95
- ------------------------------------- ------------ --------
<S> <C> <C>
Aggressive Growth % %
Balanced % %
Utility % %
</TABLE>

<TABLE>
<CAPTION>
Period
From
1/3/95** to
Sub-Account 12/31/95
- ------------------------------------- ------------
<S> <C>
Tactical Asset Allocation %
</TABLE>

<TABLE>
<CAPTION>
Period
From
5/1/95** to
Sub-Account 12/31/95
- ------------------------------------- ------------
<S> <C>
C.A.S.E. Growth %
</TABLE>

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

** Commencement of operations of the Sub-Accounts.

The average annual total returns set forth below are calculated in exactly
the same way as the average annual total returns set forth immediately above,
except that the AVERAGE ANNUAL TOTAL RETURNS ILLUSTRATED BELOW DO NOT TAKE INTO
ACCOUNT ANY CHARGE ON AMOUNTS SURRENDERED OR WITHDRAWN.

<TABLE>
<CAPTION>
Five Three
Period Year Year One Year
From Period Period Period
10/2/86* to Ended Ended Ended
Sub-Account 12/31/95 12/31/95 12/31/95 12/31/95
- -------------------------------------- ----------- -------- -------- --------
<S> <C> <C> <C> <C>
Growth % % % %
Bond % % % %
Money Market % % % %
</TABLE>

<TABLE>
<CAPTION>
Period Three Year One Year
From Period Period
12/3/92** to Ended Ended
Sub-Account 12/31/95 12/31/95 12/31/95
- ------------------------------------- ------------ ---------- --------
<S> <C> <C> <C>
Global % % %
Short-to-Intermediate Government % % %
</TABLE>

13
<PAGE> 21

<TABLE>
<CAPTION>
Period One Year
From Period
3/1/94** to Ended
Sub-Account 12/31/94 12/31/95
- -------------------------------------- ------------ ---------
<S> <C> <C>
Aggressive Growth %
Balanced %
Utility %
</TABLE>

<TABLE>
<CAPTION>
Period
From
1/3/95** to
Sub-Account 12/31/95
- ------------------------------------- ------------
<S> <C>
Tactical Asset Allocation %
</TABLE>

<TABLE>
<CAPTION>
Period
From
5/1/95** to
Sub-Account 12/31/95
- ------------------------------------- ------------
<S> <C>
C.A.S.E. Growth %
</TABLE>

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

* Commencement of operations of the Fund's Portfolios.

** Commencement of operations of the Sub-Accounts.

Because the Value Equity and Meridian/INVESCO Global Sector Sub-Accounts
did not commence operations until May 1, 1996, no performance information is
provided for these Sub-Accounts.

Western Reserve may compare the performance of each Sub-Account in
advertising and sales literature to the performance of other variable annuity
issuers in general or to the performance of particular types of variable
annuities investing in mutual funds, or investment series of mutual funds with
investment objectives similar to each of the Sub-Accounts whose performance is
reported by Lipper Analytical Services, Inc. ("Lipper"), Variable Annuity
Research & Data Service ("VARDS") and Morningstar, Inc. ("Morningstar") or
reported by other services, companies, individuals or other industry or
financial publications of general interest, such as Forbes, Money, The Wall
Street Journal, Business Week, Barron's, Kiplinger's Personal Finance and
Fortune. Lipper, VARDS and Morningstar are independent services which monitor
and rank the performances of variable annuity issuers in each of the major
categories of investment objectives on an industry-wide basis.

Lipper's and Morningstar's rankings include variable life issuers as well
as variable annuity issuers. VARDS rankings compare only variable annuity
issuers. The performance analysis prepared by Lipper, VARDS and Morningstar each
rank such issuers on the basis of total return, assuming reinvestment of
distributions, but do not take sales charges, redemption fees or certain expense
deductions at the separate account level into consideration. In addition, VARDS
prepares risk adjusted rankings, which consider the effects of market risk on
total return performance. This type of ranking provides data as to which funds
provide the highest total return within various categories of funds defined by
the degree of risk inherent in their investment objectives.

14
<PAGE> 22

Western Reserve may also compare the performance of each Sub-Account in
advertising and sales literature to the Standard & Poor's Index of 500 Common
Stocks, a widely used measure of stock market performance or other widely
recognized indices. Unmanaged indices may assume the reinvestment of dividends,
but usually do not reflect any "deduction" for the expense of operating or
managing an investment portfolio.

In addition, Western Reserve may, as appropriate, compare each
Sub-Account's performance to that of other types of investments such as
certificates of deposit, savings accounts and U.S. Treasuries, or to certain
interest rate and inflation indices, such as the Consumer Price Index, which is
published by the U.S. Department of Labor and measures the average change in
prices over time of a fixed "market basket" of certain specified goods and
services. Similar comparisons of Sub-Account performance may also be made with
appropriate indices measuring the performance of a defined group of securities
widely recognized by investors as representing a particular segment of the
securities markets. For example, Sub-Account performance may be compared with
Donoghue Money Market Institutional Averages (money market rates), Lehman
Brothers Corporate Bond Index (corporate bond interest rates) or Lehman Brothers
Government Bond Index (long-term U.S. Government obligation interest rates).

PUBLISHED RATINGS

Western Reserve may from time to time publish in advertisements, sales
literature and reports to Owners, the ratings and other information assigned to
it by one or more independent rating organizations such as A.M. Best Company
("A.M. Best"), Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's
Insurance Rating Services ("Standard & Poor's") and Duff & Phelps Credit Rating
Co. ("Duff & Phelps"). A.M. Best's and Moody's ratings reflect their current
opinion of the relative financial strength and operating performance of an
insurance company in comparison to the norms of the life/health insurance
industry. Standard & Poor's and Duff & Phelps provide ratings which measure the
claims-paying ability of insurance companies. These ratings are opinions of an
approved insurance company's financial capacity to meet the obligations of its
insurance policies in accordance with their claims. Claims-paying ability
ratings do not refer to an insurer's ability to meet non-policy obligations
(i.e., debt/commercial paper).

WESTERN RESERVE, THE SERIES ACCOUNT, AND THE FUND

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO

Western Reserve was originally incorporated under the laws of Ohio on
October 1, 1957. Western Reserve is engaged in the business of writing life
insurance policies and annuity contracts. Western Reserve is admitted to do
business in 49 states and the District of Columbia. The administrative office of
Western Reserve is located in Largo, Florida; however, the mailing address is
P.O. Box 9051, Clearwater, FL 34618-9051. Western Reserve is wholly-owned by
First AUSA Life Insurance Company ("First AUSA"), a stock life insurance company
which is wholly-owned by AEGON USA, Inc. ("AEGON"). AEGON is a financial
services holding company whose primary emphasis is on life and health insurance
and annuity and investment products. AEGON is a wholly-owned indirect subsidiary
of AEGON nv, a Netherlands corporation, which is a publicly traded international
insurance group.

WRL SERIES ANNUITY ACCOUNT

The Series Account was established by Western Reserve as a separate account
on April 12, 1988. The Series Account meets the definition of a "separate
account" under the Federal securities laws. The Series Account will receive and
invest Net Purchase Payments paid under the Contracts. In addition, the Series
Account may be used for other variable annuity contracts issued by Western
Reserve.

Although the assets of the Series Account belong to Western Reserve, Ohio
insurance law provides that the assets in the Series Account attributable to
variable annuity contracts are not chargeable with liabilities

15
<PAGE> 23

arising out of any other business of Western Reserve's. However, the assets of
the Series Account are available to cover the liabilities of the general asset
account of Western Reserve to the extent that the Series Account's assets exceed
the liabilities arising under variable annuity contracts supported by it.

The Series Account is currently divided into twenty-one Sub-Accounts,
fourteen of which are offered under this Contract. Each Sub-Account invests
exclusively in shares of a single Portfolio of the Fund. Income and both
realized and unrealized gains or losses from the assets of each Sub-Account are
credited to or charged against that Sub-Account without regard to income, gains
or losses from any other Sub-Account or arising out of any other business of
Western Reserve. Western Reserve may add, delete or substitute investments held
by the Sub-Accounts as described in the Statement of Additional Information.

WRL SERIES FUND, INC.

The Series Account invests only in shares of the Fund, a series mutual fund
that is registered with the Securities and Exchange Commission ("SEC") under the
Investment Company Act of 1940, as amended (the "1940 Act") as an open-end
diversified management investment company.

The Fund currently has twenty-one Portfolios, fourteen of which are offered
under this Contract: the Aggressive Growth Portfolio, Emerging Growth Portfolio,
Growth Portfolio, Global Portfolio, Balanced Portfolio, Equity-Income Portfolio,
Bond Portfolio, Short-to-Intermediate Government Portfolio, Utility Portfolio,
Money Market Portfolio, Tactical Asset Allocation Portfolio, Value Equity
Portfolio, C.A.S.E. Growth Portfolio and Meridian/INVESCO Global Sector
Portfolio. The assets of each Portfolio are held separate from the assets of the
other Portfolios, and each Portfolio has different investment objectives and
policies. Thus, each Portfolio operates as a separate investment vehicle, and
the income or losses of one Portfolio is unrelated to that of any other
Portfolio.

The investment objectives and policies of each Portfolio are summarized
below. There is no assurance that any Portfolio will achieve its stated
objective. More detailed information, including a description of risks, can be
found in the prospectuses for the Fund, which should be read carefully.

AGGRESSIVE GROWTH PORTFOLIO: This Portfolio seeks long-term capital
appreciation by investing in a diversified, actively managed portfolio of equity
securities.

EMERGING GROWTH PORTFOLIO: This Portfolio seeks capital appreciation, by
investing primarily in common stocks of small and medium sized companies.

GROWTH PORTFOLIO: This Portfolio's objective is growth of capital.

GLOBAL PORTFOLIO: This Portfolio seeks long-term growth of capital in a
manner consistent with preservation of capital, primarily through investments in
common stocks of foreign and domestic issuers.

BALANCED PORTFOLIO: This Portfolio seeks preservation of capital, reduced
volatility, and superior long-term risk-adjusted returns by investment primarily
in common shock, convertible securities and fixed-income securities.

EQUITY-INCOME PORTFOLIO: This Portfolio seeks to provide current income,
long-term growth of income and capital appreciation, by investing primarily in
common stocks, income producing securities convertible into common stocks, and
fixed-income securities.

BOND PORTFOLIO: This Portfolio seeks the highest possible current income
within the confines of the primary goal of insuring the protection of capital by
investing in debt securities issued by the U.S. Government and its agencies and
in medium to high-quality corporate debt securities.

SHORT-TO-INTERMEDIATE GOVERNMENT PORTFOLIO: This Portfolio seeks as high a
level of current income as is consistent with preservation of capital, primarily
through investments in U.S. Government securities, including repurchase
agreements with respect to U.S. Government securities.

16
<PAGE> 24

UTILITY PORTFOLIO: This Portfolio's objective is to achieve high current
income and moderate capital appreciation by investing primarily in a
professionally managed and diversified portfolio of equity and debt securities
of utility companies.

MONEY MARKET PORTFOLIO: This Portfolio's objective is to obtain maximum
current income consistent with preservation of principal and maintenance of
liquidity.

TACTICAL ASSET ALLOCATION PORTFOLIO: This Portfolio seeks preservation of
capital and competitive investment returns by investing primarily in stocks,
United States Treasury bonds, notes and bills, and money market funds.

VALUE EQUITY PORTFOLIO: This Portfolio's objective is to achieve maximum,
consistent total return with minimum risk to principal.

C.A.S.E. GROWTH PORTFOLIO: This Portfolio's objective is capital growth
through investments in small to medium-sized companies.

MERIDIAN/INVESCO GLOBAL SECTOR PORTFOLIO: This Portfolio's objective is
growth of capital by following an asset allocation strategy that shifts among a
wide range of asset categories and within them, market sectors.

Western Reserve serves as investment adviser to the Fund and manages its
assets in accordance with policies, programs and guidelines established by the
Board of Directors of the Fund.

Janus Capital Corporation ("Janus") serves as sub-adviser to the Growth,
Bond and Global Portfolios of the Fund. Janus, located at 100 Fillmore Street,
Suite 300, Denver, Colorado 80206, has been engaged in the management of the
Janus funds since 1969.

AEGON USA Investment Management, Inc. ("AEGON Management") is sub-adviser
to the Short-to-Intermediate Government and Balanced Portfolios of the Fund.
AEGON Management, located at 4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499,
is a wholly-owned subsidiary of AEGON and thus is an affiliate of Western
Reserve.

Van Kampen American Capital Asset Management, Inc. ("Van Kampen American
Capital") is sub-adviser to the Emerging Growth Portfolio of the Fund. Van
Kampen American Capital, located at 2800 Post Oak Blvd., Houston, Texas 77056,
is a wholly-owned subsidiary of Van Kampen American Capital, Inc., which is a
wholly-owned subsidiary of Van Kampen American Capital Holding, Inc.

Luther King Capital Management Corporation ("Luther King"), located at 301
Commerce Street, Suite 1600, Fort Worth, Texas 76102, is sub-adviser to the
Equity-Income Portfolio of the Fund. Ultimate control of Luther King is
exercised by J. Luther King, Jr.

Federated Investment Counseling ("Federated") is sub-adviser to the Utility
Portfolio of the Fund. Federated, located at Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779, is a Delaware business trust organized on
April 11, 1989 and is a registered investment adviser under the Investment
Advisers Act of 1940. It is a subsidiary of Federated Investors.

Fred Alger Management, Inc. ("Fred Alger") is sub-adviser to the Aggressive
Growth Portfolio of the Fund. Fred Alger, located at 75 Maiden Lane, New York,
NY 10038, is a wholly-owned subsidiary of Fred Alger & Company, Incorporated,
which in turn is a wholly-owned subsidiary of Alger Associates, Inc., a
financial services holding company controlled by Fred M. Alger.

Dean Investment Associates, a Division of C.H. Dean and Associates, Inc.
("Dean") is sub-adviser to the Tactical Asset Allocation Portfolio of the Fund.
Dean, located at 2480 Kettering Tower, Dayton, Ohio 45423-2480, is a registered
investment adviser with the Securities and Exchange Commission. Dean is
wholly-owned by C.H. Dean and Associates, Inc.

17
<PAGE> 25

NWQ Investment Management Company, Inc. ("NWQ Investment") is sub-adviser
to the Value Equity Portfolio of the Fund. NWQ Investment, located at 655 South
Hope Street, 11th Floor, Los Angeles, California 90017, is a wholly-owned
subsidiary of United Asset Management Corporation.

C.A.S.E. Management, Inc. ("C.A.S.E. Management") is sub-adviser to the
C.A.S.E. Growth Portfolio of the Fund. C.A.S.E. Management, located at 2255
Glades Road, Suite 221-A, Boca Raton, Florida 33431, is a registered investment
advisory firm and a wholly-owned subsidiary of C.A.S.E. Inc. C.A.S.E. Inc. is
indirectly controlled by William Edward Lange, president and chief executive
officer of C.A.S.E. Management.

Meridian Investment Management Corporation ("Meridian") and INVESCO Global
Asset Management Limited ("INVESCO") serve as co-sub-advisers to the
Meridian/INVESCO Global Sector Portfolio of the Fund. Meridian, located at 12835
East Arapahoe Road, Tower II, 7th Floor, Englewood, Colorado 80112, is a
wholly-owned subsidiary of Meridian Management & Research Corporation. INVESCO,
located at Rosebank, 12 Bermudiana Road, Hamilton, Bermuda HM11, is an indirect
wholly-owned subsidiary of INVESCO PLC.

J.P. Morgan Investment Management Inc. ("J.P. Morgan") is sub-adviser to
the Money Market Portfolio of the Fund. J.P. Morgan, located at 522 Fifth
Avenue, New York, New York 10036, is a wholly-owned subsidiary of J.P. Morgan &
Co. Incorporated.

Shares of other portfolios of the Fund are sold through different variable
annuity contracts offered through the Series Account. In addition to the Series
Account, shares of certain portfolios of the Fund are sold to the WRL Series
Life Account, a separate account established by Western Reserve for its variable
life insurance policies, the PFL Endeavor Variable Annuity Account, a separate
account of PFL Life Insurance Company, the AUSA Endeavor Variable Annuity
Account, a separate account of AUSA Life Insurance Company, Inc., and to the
AUSA Series Life Account, a separate account of AUSA Life Insurance Company,
Inc., all affiliates of Western Reserve. Shares of the Fund may in the future be
sold to other separate accounts, including separate accounts established for
variable life insurance policies or variable annuity contracts issued by Western
Reserve or its affiliates. It is conceivable that, in the future, it may become
disadvantageous for variable life insurance separate accounts and variable
annuity separate accounts to invest in the Fund simultaneously. Although neither
Western Reserve nor the Fund currently foresees any such disadvantages, either
to variable life insurance policyowners or to variable annuity contract owners,
the Fund's Board of Directors intends to monitor events in order to identify any
material conflicts between the interests of such variable life insurance
policyowners and variable annuity contract owners and to determine what action,
if any, it should take. Such action could include the sale of Fund shares by one
or more of the separate accounts, which could have adverse consequences.
Material conflicts could result from, for example, (1) changes in state
insurance laws, (2) changes in Federal income tax laws, or (3) differences in
voting instructions between those given by variable life insurance policyowners
and those given by variable annuity contract owners. If the Board of Directors
were to conclude that separate funds should be established for variable life and
variable annuity separate accounts, Western Reserve will bear the attendant
expenses, but variable life insurance policyowners and variable annuity contract
owners would no longer have the economies of scale resulting from a larger
combined fund.

CHARGES AND DEDUCTIONS

Certain charges will be deducted in connection with the Contracts to
compensate Western Reserve for (1) administering the Contracts; (2) assuming
certain risks in connection with the Contracts; and (3) incurring expenses in
distributing the Contracts. The nature and amount of these charges are described
more fully below.

18
<PAGE> 26

WITHDRAWAL CHARGE

The length of time from receipt of a Purchase Payment to the time of a
partial withdrawal or surrender of that Purchase Payment determines whether the
Withdrawal Charge will be deducted. The charge is a percentage of each
respective Purchase Payment made during the five years immediately preceding the
partial withdrawal or Surrender of each respective Purchase Payment). The charge
is as follows:

<TABLE>
<CAPTION>
Number of Years
from Receipt of Each
Charge Purchase Payment
- ------ --------------------
<S> <C>
5% 0-5
0% Over 5
</TABLE>

For the first partial withdrawal or Systematic Partial Withdrawal (see,
"THE CONTRACT - Accumulation Provisions - Partial Withdrawals and Surrenders, p.
22), during each Contract Year, any applicable Withdrawal Charge is waived for
the first 10% of the Contract Value withdrawn. Thereafter, the full amount of
any subsequent partial withdrawal or Systematic Partial Withdrawal during the
remainder of that Contract Year will be subject to the Withdrawal Charge.
However, no waiver of a Withdrawal Charge will be made in connection with a
Surrender. In determining which amounts withdrawn are subject to the Withdrawal
Charge, partial withdrawals and Surrenders will be deemed made first from
Purchase Payments on a first-in, first-out basis, and then from any Contract
earnings.

For Contracts issued with an appropriate endorsement, if the Owner or a
joint Owner is confined to a nursing care facility (as defined in the
endorsement) for thirty (30) consecutive days or longer, Western Reserve will
also waive the Withdrawal Charge on Surrenders or partial withdrawals as
follows. Such confinement must begin after the Contract Date. Western Reserve
must receive satisfactory written evidence of such confinement within two (2)
months after the confinement ends. Western Reserve will waive the Withdrawal
Charge under the endorsement only for Surrenders and withdrawals made during
such confinement or within two (2) months after the confinement ends. The
endorsement is not available in all states.

The Withdrawal Charge is deducted from the Contract Value by cancelling the
number of Accumulation Units equal to the Withdrawal Charge. The amount of the
Withdrawal Charge will be determined as of the date the partial withdrawal or
Surrender payment is processed. In the event of a partial withdrawal, the Owner
will receive the full amount requested, and an amount equal to the Withdrawal
Charge will also be withdrawn in order for the Owner to receive the full amount
requested. For example, if the Owner requests a distribution in the amount of
$100 and the Withdrawal Charge is to be imposed on the full amount, the Owner
would receive $100, the total Contract Value withdrawn would be $105.26, and the
Withdrawal Charge would be $5.26 (which is 5% of $105.26). Any Surrender or
partial withdrawal may be subject to tax, and the Owner should, therefore,
consult with his or her tax adviser before requesting any Surrender or partial
withdrawal. (See "FEDERAL TAX MATTERS - Taxation of Annuities" on pages 29-30
and - "Qualified Plans" on pages 30-32.)

The Withdrawal Charge is imposed to enable Western Reserve to recover
certain sales expenses it advances, including the cost of printing prospectuses
and sales literature and any advertising costs. The proceeds of this charge may
not be sufficient to cover these expenses. To the extent they are not, Western
Reserve will cover the shortfall from its general account assets, which may
include profits from the Mortality and Expense Risk Charge, described below.

The Withdrawal Charge may be reduced when sales of Contracts are made to a
group of directors, officers and employees of the same employer (including
directors, officers and employees of Western

19
<PAGE> 27

Reserve and its affiliates), employer group, or similar party pursuant to a
retirement plan or similar arrangement under which Contracts are sold to a group
of individuals and such program results in a savings of sales expenses. The
amount of reduction will depend on factors such as the size of the group, total
Purchase Payments, and other relevant factors that might tend to reduce expenses
incurred in connection with such sales.

TRANSFER CHARGE

After twelve free transfers of Annuity Value among the Sub-Accounts each
Contract Year, each additional transfer will be subject to a Transfer Charge of
$10, which will be deducted from the amount transferred to compensate Western
Reserve for the costs of the transfer. All transfers made on any one day will be
considered a single transfer, with any transfer charge allocated equally. The
Transfer Charge will not be increased. Western Reserve does not anticipate
making a profit from this charge. Western Reserve may, at any time, revoke or
modify the transfer privilege.

MORTALITY AND EXPENSE RISK CHARGE

Western Reserve will deduct a daily Mortality and Expense Risk Charge from
the Series Account at an annual rate of 1.25% of the average daily net assets of
the Series Account. Western Reserve assumes two mortality risks: (1) that the
annuity rates under the Contracts cannot be changed to the detriment of Owners
even if Annuitants live longer than projected; and (2) Western Reserve may be
obligated to pay a death benefit claim in excess of a Contract's Cash Value.
(See "ANNUITY PROVISIONS - Improved Annuity Rates" on page 27 and "ACCUMULATION
PROVISIONS - Death Benefits during the Accumulation Period" on page 25.) Western
Reserve also assumes an expense risk through its guarantee not to increase the
charges for issuing and administering the Contracts, regardless of its actual
expenses.

If the Mortality and Expense Risk Charge is insufficient to cover actual
costs, the loss will be borne by Western Reserve; conversely, if the amount
deducted proves more than sufficient, the excess will be a profit to Western
Reserve. The Mortality and Expense Risk Charge will not be assessed against
either the Fixed Account Value or monies that have been applied to purchase an
annuity option.

ADMINISTRATION FEE

On each Anniversary through the Maturity Date, Western Reserve will deduct
an Administration Fee of $30 as partial compensation for the cost of providing
administrative services under the Contracts. The Administration Fee is deducted
from each Sub-Account and the Fixed Account in proportion to the value each
bears to the Contract Value. If the Contract Value is surrendered other than on
an Anniversary, a full $30 fee will be deducted.

Western Reserve does not expect to earn a profit on the Administration Fee.
Even if administrative expenses increase, Western Reserve guarantees that it
will not increase the amount of the Administration Fee.

PREMIUM TAXES

Certain states and other governmental entities may impose a premium tax,
ranging up to 3.5% of Purchase Payments. If applicable, and if Western Reserve
has incurred or reasonably expects to incur expenses in respect to premium
taxes, the tax will be deducted, either from the Purchase Payment when received,
from amounts surrendered or withdrawn, from death benefit proceeds, or from the
amount applied to effect an annuity at the time annuity payments commence.
Western Reserve will deduct any applicable premium taxes when it incurs them,
but reserves the right to defer deduction to a later date as long as such
deferral is equitable to Owners.

Premium tax rates are subject to change by the respective state
legislatures, administrative interpretations, or judicial acts. The amount of
any such tax will depend on, among other things, the Owner's state of residence,
the status of Western Reserve in that state, and the insurance tax laws of such
state.

20
<PAGE> 28

DEDUCTIONS FOR INCOME TAXES

Currently, no charge is made to the Series Account for Federal income taxes
attributable to the Series Account. Western Reserve may, however, make such a
charge in the future subject to obtaining any necessary regulatory approvals.
Charges for any other applicable taxes, including any tax or other economic
burden resulting from the application of tax laws that Western Reserve
determines to be properly attributable to the Account, may also be made. (See
"FEDERAL TAX MATTERS - Company Tax Status" on page 29.)

EXPENSES OF THE FUND

Because the Series Account purchases shares of the Fund, the net assets of
the Series Account will reflect the investment advisory fee and other expenses
incurred by the Fund, as described in the Portfolios' Prospectuses.

THE CONTRACT

ACCUMULATION PROVISIONS

PURCHASE PAYMENTS

Owners may make Purchase Payments as frequently as they elect. Purchase
Payments are payable at Western Reserve's administrative office. The initial
Purchase Payment generally must accompany the application, and for Non-Qualified
Contracts must be at least $5,000; however, a minimum initial Purchase Payment
of $1,000 is allowed provided the application reflects anticipated additional
monthly periodic Purchase Payments of at least $100, via electronic funds
transfer from the Owner's bank account. For IRAs the minimum initial Purchase
Payment is $1,000 and for Qualified Contracts other than IRAs the minimum
initial Purchase Payment is $100. For all Contracts, subsequent Purchase
Payments are not required but may be made at any time and in any amount provided
that each payment is for a minimum of $100, unless Western Reserve consents to a
smaller amount and further provided that total Purchase Payments in any Contract
Year do not exceed $1,000,000, unless Western Reserve consents to a larger
amount.

As an accommodation to Owners, Western Reserve will accept transmittal of
both initial and subsequent Purchase Payments of at least $1,000 by wire
transfer. For initial Purchase Payments, the wire transfer must be accompanied
by a simultaneous telephone facsimile transmission of an application ("FAXED
Application"). Initial Purchase Payments accepted via wire transfer with FAXED
Application will be invested at the value next determined following receipt.
Initial Purchase Payments made by wire transfer not accompanied by simultaneous
FAXED Application, or accompanied by an incomplete FAXED Application, will be
retained for a period up to five business days while Western Reserve attempts to
obtain the FAXED Application or complete the essential information required to
establish the Contract and allocate the initial Purchase Payment at the
Accumulation Unit Value which will be determined after receipt of the FAXED
Application or information necessary to complete the application. If Western
Reserve cannot obtain the FAXED Application or essential information within five
business days, Western Reserve will return the initial Purchase Payment to the
applicant, unless the applicant consents to allow Western Reserve to retain the
initial Purchase Payment until the required FAXED Application or essential
information is received. When the FAXED Application contains all information
necessary to issue the Contract and allocate the Net Purchase Payment, but the
FAXED Application has not been signed by the Owner, Western Reserve will issue
the Contract and allocate the Net Purchase Payment as indicated in the FAXED
Application. At the same time, Western Reserve will also electronically prepare
a new application form, containing the same information received on the FAXED
Application, for delivery with the Contract to the Owner. Upon delivery, the
Owner will sign the electronically prepared application, which will be retained
by Western Reserve.

In the event the original application with original signature is later
received and the allocation instructions in that application are, for any
reason, inconsistent with those previously designate on the

21
<PAGE> 29

FAXED Application, the initial Purchase Payment will be reallocated in
accordance with the allocation instructions in the application with original
signature at the Accumulation Unit Value next determined after receipt of such
application.

Owners wishing to make payments via bank wire should instruct their banks
to wire Federal Funds as follows to:

Barnett Bank of Pinellas County
ABA # 063000047
For credit to: Western Reserve Life
Account #: 1263627596
Owner's Name:
Contract Number:

Attention: Annuity Accounting

Fax Number: (813) 588-1620

Western Reserve may reject any application or Purchase Payment for any reason
permitted by law.

NET PURCHASE PAYMENTS

The Net Purchase Payment is equal to the Purchase Payment less any premium
taxes. Initial and subsequent Net Purchase Payments are allocated according to
the Owner's direction among the Sub-Accounts of the Series Account, to the Fixed
Account, or to a combination of both. The Owner, or the registered
representative/agent of record for the Contract upon instructions from the
Owner, may change the allocation of subsequent Purchase Payments at any time
upon Written Notice to Western Reserve or by telephone by calling Western
Reserve's toll-free number, 1-800-851-9777. Western Reserve will employ the same
procedures to confirm that such telephone instructions are genuine as it employs
regarding transfers among Sub-Accounts and the Fixed Account by telephone.
Western Reserve reserves the right to limit such change to once each Contract
Year. Upon allocation to the Series Account, Net Purchase Payments are converted
into Accumulation Units of the appropriate Sub-Account based upon the value of
an Accumulation Unit in that Sub-Account on or following the Valuation Date on
which the Purchase Payment is received at Western Reserve's administrative
office. (See "Accumulation Units" below.) If the Contract application and other
information necessary for processing the request to apply the Purchase Payment
(collectively, the "application") are complete upon receipt, Western Reserve
will accept the application and apply the initial Net Purchase Payment within
two business days of receipt. If it is incomplete, Western Reserve will attempt
to have it properly completed within five business days of receipt, and if
unable to do so, Western Reserve will inform the prospective purchaser of the
reasons that the application is incomplete and request that the prospective
purchaser consent to Western Reserve retaining the Purchase Payment until the
application is properly completed. If such consent is not obtained, Western
Reserve will immediately return the entire Purchase Payment. Once the
application is complete, Western Reserve will accept it and apply the initial
Net Purchase Payment within two business days.

ACCUMULATION UNITS

The value of Accumulation Units will vary from one Valuation Period to the
next depending on the investment results experienced by each Sub-Account. When
each Sub-Account was first established, the initial value of an Accumulation
Unit for the Sub-Account was arbitrarily set at $10. The value of an
Accumulation Unit for each Sub-Account at the close of a Valuation Period is
determined by multiplying the Accumulation Unit value for that Sub-Account at
the close of the immediately preceding Valuation Period by the experience factor
for that Sub-Account for the current Valuation Period. The Accumulation Unit
value may increase, decrease, or remain the same from Valuation Period to
Valuation Period.

22
<PAGE> 30

EXPERIENCE FACTOR

The experience factor measures investment experience during a Valuation
Period. Each Sub-Account has its own distinct experience factor. In calculating
a Sub-Account's experience factor for a Valuation Period, the net asset value
for each share of the corresponding Portfolio of the Fund at the end of the
current Valuation Period is increased by the amount per Portfolio share of any
dividend or capital gain distribution received by the Portfolio during the
current valuation period and decreased by a per Portfolio share charge for any
applicable taxes. The total is then divided by the net asset value per Portfolio
share at the end of the preceding Valuation Period. A charge equal to 1.25% on
an annual basis of the net assets for each day in the Valuation Period is then
subtracted to compensate Western Reserve for certain mortality and expense
risks. (See "CHARGES AND DEDUCTIONS - Mortality and Expense Risk Charge" on page
18.)

PORTFOLIO SHARE NET ASSET VALUE. The net asset value per share of shares
of the Fund is determined once daily, as of the close of the regular session of
business on the New York Stock Exchange ("Exchange") (usually 4:00 p.m., Eastern
time), on each day the Exchange is open.

TRANSFERS TO AND FROM, AND AMONG SUB-ACCOUNTS

Before the Maturity Date, the Owner may, at any time, transfer amounts
among Sub-Accounts or from Sub-Accounts to the Fixed Account. Transfers may also
be made from the Fixed Account to the Sub-Accounts, subject to certain
restrictions. (See "THE FIXED ACCOUNT - Allocations, Transfers and Withdrawals"
on page 34.) Transfers are not available if the Owner has elected Dollar Cost
Averaging, the Asset Rebalancing Program or Systematic Partial Withdrawals.

The amount available for transfer from any Sub-Account, or the Fixed
Account is determined at the end of the Valuation Period during which the
transfer request is received at Western Reserve's administrative office. As
explained in the previous paragraph, the net asset value for each share of the
corresponding Portfolio of any Sub-Account is determined, once daily, as of the
close of the regular business session of the Exchange (usually 4:00 p.m.,
Eastern time), which coincides with the end of each Valuation Period. Therefore,
any transfer request received after 4:00 p.m., Eastern time, on any date the
Exchange is open for business will be processed utilizing the net asset value
for each share of the applicable Portfolio determined as of 4:00 p.m., Eastern
time, on the next day the Exchange is open for business.

The amount available for transfer from the Fixed Account will be determined
in the same manner. Owners may make transfer requests in writing, or by
telephone. Written requests must be in a form acceptable to Western Reserve. The
registered representative/agent of record for the Contract may, upon
instructions from the Owner, make telephone transfers upon request without the
necessity for the Owner to have previously authorized telephone transfers in
writing. If, for any reason, an Owner does not want the ability to make
transfers by telephone, the Owner should provide written notice to Western
Reserve at its administrative office. All telephone transfers should be made by
calling Western Reserve at our toll-free number: 1-800-851-9777.

Western Reserve will not be liable for complying with telephone
instructions it reasonably believes to be authentic, nor for any loss, damage,
cost or expense in acting on such telephone instructions, and Owners will bear
the risk of any such loss. Western Reserve will employ reasonable procedures to
confirm that telephone instructions are genuine. If Western Reserve does not
employ such procedures, it may be liable for losses due to unauthorized or
fraudulent instructions. Such procedures may include, among others, requiring
forms of personal identification prior to acting upon such telephone
instructions, providing written confirmation of such transactions to Owners
and/or tape recording of telephone transfer request instructions received from
Owners. Western Reserve may, at any time, revoke or modify the transfer
privilege. Under Western Reserve's current procedures, it will effect transfers
and determine all values in connection with transfers at the end of the
Valuation Period during which the transfer request is received at Western
Reserve's administrative office. Western Reserve currently imposes a $10 charge
for each transfer after the first twelve transfers during any Contract Year.
(See "CHARGES AND DEDUCTIONS - Transfer Charge" on page 18.)

23
<PAGE> 31

DOLLAR COST AVERAGING

The Owner may direct Western Reserve to automatically transfer specified
amounts from the Money Market Sub-Account, the Bond Sub-Account or the
Short-to-Intermediate Government Sub-Account, the Fixed Account or any
combination of these Accounts on a monthly basis to any other Sub-Account. This
service, offered without charge, is intended to allow the Owner to utilize
"Dollar Cost Averaging," a long-term investment method which provides for
regular, level investments over time. Western Reserve makes no guarantees that
Dollar Cost Averaging will result in a profit or protect against loss.

To qualify for Dollar Cost Averaging, a minimum of $10,000 must be in each
Account from which transfers will be made and at least $1,000, in the aggregate,
must be transferred each month, unless Western Reserve consents to a smaller
amount. To further qualify for Dollar Cost Averaging from the Fixed Account, no
more than one-tenth (1/10) of the amount in the Fixed Account at the
commencement of Dollar Cost Averaging can be transferred each month. Other types
of transfers from the Fixed Account may also be subject to other certain
restrictions. (See "THE FIXED ACCOUNT - Allocations, Transfers and Withdrawals"
on page 34.)

A Written Notice requesting this service, on a form provided by Western
Reserve, must be completed by the Owner in order to begin transfers. The first
transfer will occur during the month which follows receipt of the form,
providing the form is received by the 25th day of the month. Once elected,
transfers from the Money Market, Bond, Short-to-Intermediate Government
Sub-Accounts or the Fixed Account will be processed monthly until the entire
value of each Account from which transfers are made is completely depleted or
the Owner instructs Western Reserve in writing to cancel the monthly transfers.
For example, if $15,000 was allocated to the Money Market Sub-Account and
$10,000 was allocated to the Bond Sub-Account and transfers of $500 are made
each month from each of these Sub-Accounts to the Growth Sub-Account, transfers
of $500 per month would continue to be made from the Money Market Sub-Account
even though transfers from the Bond Sub-Account had ceased as a result of
depletion of value. Each transfer which occurs under the Dollar Cost Averaging
service will be counted towards the twelve free transfers allowed during each
Contract Year. Western Reserve reserves the right to discontinue offering Dollar
Cost Averaging upon 30 days written notice to Owners. Dollar Cost Averaging is
not available if the Owner has elected the Asset Rebalancing Program or
Systematic Partial Withdrawals.

ASSET REBALANCING PROGRAM

Western Reserve will offer a program, without charge, under which an Owner
may authorize Western Reserve to transfer automatically Annuity Value each
quarter to maintain a particular percentage allocation among the Sub-Accounts.
The Annuity Value allocated to each Sub-Account will grow or decline in value at
different rates. The Asset Rebalancing Program automatically reallocates the
Annuity Value in the Sub-Accounts at the end of each period to match the
Contract's currently effective Net Purchase Payment allocation schedule. The
Asset Rebalancing Program is intended to transfer Annuity Value from those Sub-
Accounts that have increased in value to those Sub-Accounts that have declined
in value. Over time, this method of investing may help an Owner buy low and sell
high. This investment method does not guarantee gains, nor does it assure that
any Sub-Account will not have losses.

To qualify for Asset Rebalancing, a minimum Annuity Value of $10,000 for an
existing Contract, or a minimum initial purchase payment of $10,000 for a new
Contract, is required. To participate in the Asset Rebalancing Program, a
properly completed Asset Rebalancing Request Form must be received by Western
Reserve at its Administrative Office. An Asset Rebalancing Request Form is
available upon request.

Owners may elect rebalancing to occur on each quarterly, semi-annual or
annual anniversary of the Contract Date. Following receipt of the Asset
Rebalancing Request Form, Western Reserve will effect the initial rebalancing of
Annuity Value on the next such anniversary, in accordance with the Contract's
current Net Purchase Payment allocation schedule. The amounts transferred will
be credited at the Accumulation Unit Value as of the end of the Valuation Dates
on which the transfers are made. If a day on which rebalancing would ordinarily
occur falls on a day on which the New York Stock Exchange is closed,

24
<PAGE> 32

rebalancing will occur on the next day the New York Stock Exchange is open. The
Asset Rebalancing Program is available only during the Accumulation Period, and
is not available if the Owner has elected Dollar Cost Averaging or Systematic
Partial Withdrawals.

An Owner may terminate participation at any time in the Asset Rebalancing
Program by oral or written request to Western Reserve's Administrative Office.
Participation in the Asset Rebalancing Program will terminate automatically if
any transfer is made to, or from, any Sub-Account, other than on account of a
scheduled rebalancing. If an Owner wishes to resume the Asset Rebalancing
Program after it has been canceled, a new Asset Rebalancing Request Form must be
completed and sent to Western Reserve's Administrative Office. Owners may start
and stop participation in the Asset Rebalancing Program at any time; however,
Western Reserve reserves the right to restrict entry into the Asset Rebalancing
Program to once per Contract Year. Annuity Value allocated to the Fixed Account
may not be included in the Asset Rebalancing Program.

Western Reserve may discontinue, modify, or suspend the Asset Rebalancing
program at any time.

Although the Asset Rebalancing Program is not available as of the date of
this Prospectus, Western Reserve anticipates its availability by the end of
1996, and will notify Owners accordingly.

PARTIAL WITHDRAWALS AND SURRENDERS

1. PARTIAL WITHDRAWALS. Prior to the earlier of the Maturity Date or the
death of the Annuitant (when no Contingent Annuitant has been named), the Owner
may partially withdraw a portion of the Series Account Value upon Written
Notice, to Western Reserve's administrative office. Although partial withdrawals
are currently permitted at any time prior to the Maturity Date, Western Reserve
reserves the right to refuse to permit any partial withdrawals prior to the
first Anniversary and may prohibit more than one partial withdrawal during any
Contract Year. Western Reserve may also refuse to accept a request for a partial
withdrawal if the Cash Value would be reduced below $10,000. No partial
withdrawals from the Fixed Account may be made without the consent of Western
Reserve. (See "THE FIXED ACCOUNT - Allocations, Transfers and Withdrawals" on
page 34.) All requests for partial withdrawals are processed at the Accumulation
Unit Value for each Sub-Account next computed after receipt and acceptance of
the request by Western Reserve at its administrative office. Western Reserve
will pay the partial withdrawal amount requested and cancel Accumulation Units
equal to the amount withdrawn from each Sub-Account plus any applicable premium
taxes and any applicable Withdrawal Charge. (See "CHARGES AND DEDUCTIONS -
Withdrawal Charge" on pages 17-18 and "Premium Taxes" on page 18.) The
Sub-Accounts for a partial withdrawal must be specified and the amount requested
to be withdrawn from each specified Sub-Account may not exceed the value of that
Sub-Account.

2. SYSTEMATIC PARTIAL WITHDRAWALS. The Owner may, by Written Notice on a
form provided by Western Reserve, elect to partially withdraw from the Series
Account after the first Anniversary up to 10% of the Cash Value annually (10% of
the initial Purchase Payment if elected at time of application for a Contract),
in equal monthly payments ("Systematic Partial Withdrawals") of at least $200
per month. The first withdrawal will occur during the month which follows
receipt of the form, providing the form is received by the 25th day of the
month. If Systematic Partial Withdrawals are elected at the time of application
for a Contract, a minimum initial Purchase Payment of at least $25,000 must
accompany the application, unless Western Reserve consents to a smaller amount.
A subsequent election is subject to the Contract then having a minimum of
$25,000 of Cash Value, unless Western Reserve consents to a smaller amount.
Western Reserve will pay the Systematic Partial Withdrawal amount requested and
cancel Accumulation Units equal to the amount withdrawn from the Sub-Accounts in
the same manner as the current Net Purchase Payment allocation instructions,
except no Systematic Partial Withdrawals are permitted from the Fixed Account.
Cancellation of units will occur ten days prior to the date selected on the form
for payment. The amount to be withdrawn from each Sub-Account may not exceed the
Cash Value of the Sub-Account. Western Reserve will not process a Systematic
Partial Withdrawal if the Cash Value for the entire Contract would be reduced
below $10,000.

25
<PAGE> 33

Systematic Partial Withdrawals may be discontinued by the Owner at any time
by notifying Western Reserve in writing. Western Reserve reserves the right to
discontinue offering Systematic Partial Withdrawals upon 30 days' written notice
to Owners. Western Reserve also reserves the right to assess a processing fee
for this service. Generally, under a Non-Qualified Contract, Systematic Partial
Withdrawals, like other distributions prior to the Maturity Date, are first
treated as taxable income to the extent that the Contract Value immediately
before a withdrawal exceeds the "investment in the contract" at that time. Any
additional amount withdrawn is not taxable. Further, under a Non-Qualified
Contract, a 10% penalty tax will generally be imposed on the taxable portion of
a partial withdrawal or a Systematic Partial Withdrawal made prior to the
Owner's age 59 1/2, unless certain exceptions apply. The Owner should,
therefore, consult with his or her tax adviser before requesting any partial
withdrawal or Systematic Partial Withdrawals. (For a further discussion of
taxation of, and tax penalties on, withdrawals under Non-Qualified Contracts and
Qualified Contracts, see "FEDERAL TAX MATTERS - Taxation of Annuities" on pages
29-30.)

3. SURRENDERS. The Owner may completely surrender the Contract at any time
prior to the Maturity Date. All requests for Surrender are processed at the
Accumulation Unit Value for each Sub-Account next computed after receipt and
acceptance of the Surrender request by Western Reserve at its administrative
office. Western Reserve will deduct the annual $30 Annual Administrative Fee,
any applicable premium taxes, and any applicable Withdrawal Charge from the
Surrender proceeds.

4. PARTIAL WITHDRAWALS AND SURRENDERS. The amount of any partial
withdrawal or Surrender will be paid promptly, and in any event within seven
days of receipt of Written Notice, complete with all necessary information at
Western Reserve's administrative office, except that Western Reserve reserves
the right to defer the right of a partial withdrawal under certain
circumstances. (See "OTHER MATTERS RELATING TO THE CONTRACT - Contract Payments"
on page 27.) Under Non-Qualified Contracts, Western Reserve will withhold from
each partial withdrawal, systematic partial withdrawal or Surrender for tax
purposes the minimum amount required by law, unless the Owner affirmatively
elects, before payments begin, to have either nothing withheld or a different
amount withheld. When Western Reserve incurs extraordinary charges, such as wire
transfers or overnight mail expenses, for expediting delivery of a partial
withdrawal or Surrender payment to a Contract Owner, Western Reserve will deduct
such charges from the payment. The current charge for a wire transfer is $15.
The current charge for overnight delivery is $20. For the protection of the
Owners, all requests for partial withdrawals or Surrenders of more than
$100,000, or where the partial withdrawal or Surrender proceeds are to be sent
to an address other than the address of record, will require a signature
guarantee. All required guarantees of signatures must be made by a national or
state bank, a member firm of a national stock exchange or any other institution
which is an eligible guarantor institution as defined by rules and regulations
of the SEC. If the Owner is a corporation, partnership, trust or fiduciary,
evidence of the authority of the person seeking redemption is required before
the request for withdrawal is accepted, including withdrawals under $100,000.
For additional information, Owners may call Western Reserve at (800) 851-9777.
Surrenders, partial withdrawals and Systematic Partial Withdrawals may be
subject to tax including a penalty tax. (See "FEDERAL TAX MATTERS - Taxation of
Annuities" on pages 29-30.) For certain Qualified Contracts, a partial
withdrawal may require the consent of the Owner's spouse under the Code and the
regulations promulgated thereunder by the Treasury Department (the "Treasury
Regulations"). (See "FEDERAL TAX MATTERS - Qualified Plans" on pages 30-32.) For
Qualified Contracts issued under Code Section 403(b), certain restrictions will
apply. (See "FEDERAL TAX MATTERS - Qualified Plans" on pages 30-32.)

PARTIAL ANNUITIZATION

Prior to the Maturity Date, and without Surrender of the Contract, the
Owner may request that a portion of the Contract Value be applied to purchase a
periodic annuity under a supplemental contract with Western Reserve. No such
partial annuitization may take place until the first Anniversary, and any
subsequent partial annuitization must be at least five years after the
immediately preceding one. In addition, no partial annuitization amount will be
permitted if it will: (1) reduce the Cash Value below $10,000; (2) exceed 50%

26
<PAGE> 34

of the Cash Value; or (3) purchase a monthly income of less than $100. No amount
from the Fixed Account may be partially annuitized without Western Reserve's
consent.

The Owner must specify the Sub-Accounts from which amounts are to be
partially withdrawn, and any applicable premium taxes will be deducted from the
amount partially withdrawn.

A partial annuitization may be subject to tax. (See "FEDERAL TAX
MATTERS - Taxation of Annuities" on pages 29-30.)

CONTRACT LOANS FOR 401(A), 401(K), AND 403(B) CONTRACTS

After the twenty day Free Look Period and during the Accumulation Period,
(1) Owners of Contracts used in connection with a Tax Sheltered Annuity Plan
("TSA Plan") under Section 403(b) of the Code, if the TSA Plan is not subject to
the Employee Retirement Income Security Act of 1974, and (2) Owners of Contracts
purchased by a pension, profit-sharing, or other similar plan qualified under
Section 401(a) of the Code (a "401 Plan"), including a Section 401(k) plan,
where a plan trustee is the Owner, may elect a Contract loan endorsement under
which the Owner can receive Contract loans. The availability of Contract loans
will also be governed by the provisions of the TSA plans or 401 Plans involved.
An Owner of a Contract used in connection with a TSA Plan or 401 Plan may be
subject to income tax or tax penalties if loans from the plan are not repaid in
accordance with applicable provisions of the Code. In addition, Internal Revenue
Service authorities suggest that a Contract loan may, at least in certain
circumstances, result in adverse tax consequences for the TSA Plan or 401 Plan.
Accordingly, a competent tax advisor should be consulted before a Contract loan
is requested.

If the Contract loan endorsement is available, the Owner can borrow against
the Contract an amount which may not exceed the lesser of (1) 50% of the Cash
Value or (2) $50,000 reduced by the highest outstanding loan balance during the
1-year period ending on the day before the loan date (determined below).
However, if the Cash Value is less than $20,000, the Owner may borrow against
the Contract the lesser of (1) 80% of the Cash Value or (2) $10,000. In all
events, the minimum amount that can be borrowed is $1,000. The Owner has the
sole responsibility for requesting loans and making loan repayments that comply
with applicable tax requirements.

When a loan is made, an amount equal to the loan will be withdrawn from the
Sub-Accounts and the Fixed Account, as specified by the Owner, and transferred
to the loan reserve. The loan reserve is part of the Fixed Account used as
collateral for any Contract loan. If no Sub-Account or the Fixed Account is
specified, the loan will be made from each Sub-Account and the Fixed Account in
accordance with the Owner's current purchase payment allocation. Amounts
transferred to the loan reserve do not participate in the investment experience
of the Sub-Account or the Fixed Account from which they were withdrawn.

All loan requests are processed at the Accumulation Unit Value for each
Sub-Account next computed after receipt and acceptance of the loan request by
Western Reserve at its administrative office. The loan date is the date Western
Reserve processes the loan request. Under its current procedures, Western
Reserve does not charge a fee to cover loan processing and expenses associated
with establishment and administration of the loan reserve. However, Western
Reserve reserves the right to charge such a fee or change it from time to time.
The Contract will be the sole security for the loan. Western Reserve reserves
the right to limit the number of loans an Owner may make during a Contract Year.

On each Anniversary, Western Reserve will compare the amount of the
outstanding loan to the amount in the loan reserve. Western Reserve will also
make this comparison whenever the Owner repays all or part of the loan. At each
such time, if the amount of the outstanding loan (plus any unpaid interest)
exceeds the amount in the loan reserve, Western Reserve will withdraw the
difference from the Contract's Sub-Accounts and the Fixed Account and transfer
it to the loan reserve, in the same fashion as when a loan is made. If the
amount in the loan reserve exceeds the amount of the outstanding loan, Western
Reserve will withdraw the difference from the loan reserve and transfer it to
the Sub-Accounts and the Fixed Account in accordance with the Owner's current
payment allocation. However, Western Reserve reserves the right to require the
transfer to the Fixed Account if the amount was transferred from the Fixed
Account to establish the loan.

27
<PAGE> 35

If the Contract loan at any time exceeds the Cash Value of the Contract,
Western Reserve will mail a notice to the last known address of the Owner and
any assignee of record. If the excess amount is not paid within 31 days after
mailing of the notice, the Contract will terminate without value.

LOAN INTEREST. Interest on any loan will be at the Contract loan annual
rate of 6% in arrears unless, under a 401 Plan, a higher rate is requested by
the Owner in the loan application. (See "Repayment of Loans", below.)

Amounts in the loan reserve will earn interest at a minimum guaranteed
effective annual interest rate of 4% per year. Western Reserve may declare from
time to time higher current interest rates. Different current interest rates may
be applied to the Fixed Account attributable to the loan reserve than to the
rest of the Fixed Account.

REPAYMENT OF LOANS. Principal and interest must be repaid in substantially
level quarterly or monthly payments over a 5-year period or, if the loan is used
to acquire the Owner's principal residence, a 10, 15 or 20-year period, but such
an extended period cannot go beyond the year the Owner attains age 70 1/2. If a
loan installment repayment is not received within 31 days from the installments'
original due date, a deemed distribution of the entire amount of the outstanding
loan principal, interest due, and any applicable charges under the Contract
including any Withdrawal Charge, will take place. Under a TSA Plan, this
distribution may be subject to income tax and a penalty tax, and may cause
Section 403(b) of the Code. (See "Federal Tax Matters -- Qualified Plan," page
.)

While the Contract is in force and during the Accumulation Period, any loan
may be repaid in full. If not repaid, loans will automatically reduce the amount
of any death benefit proceeds, the amount payable upon a partial withdrawal or
Surrender of the Contract and the amount applied on the Maturity Date to provide
annuity payments.

DEATH BENEFITS DURING THE ACCUMULATION PERIOD

If the Annuitant dies during the Accumulation Period and no Contingent
Annuitant is named, Western Reserve will pay the death benefit proceeds to the
Beneficiary upon receipt of due proof of death. If any Owner should die during
the Accumulation Period, and an alternative election by the Beneficiary is not
made as described below, Western Reserve will pay the death benefit proceeds to
the Beneficiary upon receipt of due proof of death.

The death benefit proceeds during the Accumulation Period will be the
greatest of (1) the Contract Value as of the Death Report Day; or (2) the excess
of (a) the amount of purchase payments paid, less (b) any partial withdrawal and
partial annuitization amounts withdrawn from the Contract; or (3) the Contract
Value of as the fifth Contract anniversary, less any amounts withdrawn from the
Contract after the fifth Contract Year to pay for partial withdrawals or partial
annuitization.

If the Beneficiary is the spouse of the deceased Owner, then the
Beneficiary may elect to keep the Contract in force in lieu of receiving the
death benefit proceeds. If the Beneficiary is not the spouse, the Beneficiary
may elect one of the following options that provide for complete distribution of
the death benefit proceeds and termination of this Contract: (i) within five
years of the date of such Owner's death; (ii) over the lifetime of the
Beneficiary; or (iii) over a period that does not exceed the life expectancy of
such Beneficiary, as defined by the Code and the Treasury Regulations.
Subparagraphs (ii) and (iii) apply only to individuals. All such payments must
start within one year of the date of such Owner's death. (For a more detailed
explanation of these requirements, see "FEDERAL TAX MATTERS - Additional
Considerations" on page 32.)

If a Qualified Contract is issued to a retirement plan, similar provisions
will apply upon the death of the plan participant. However, the required
distribution rules are more complex in the case of a Qualified Contract held by
a plan. Plan participants should consult a qualified pension or tax advisor
concerning the operation of these rules.

28
<PAGE> 36

ANNUITY PROVISIONS

MATURITY DATE AND SELECTION OF ANNUITY OPTIONS

Provided the Contract is still In Force, annuity payments will begin on the
Maturity Date, which is, for both Non-Qualified Contracts and Qualified
Contracts, the Anniversary nearest Attained Age 90. However, the Owner may
change the Maturity Date at any time prior to the Maturity Date by written
request. Any new Maturity Date must be at least five years after the Contract
Date, and the Attained Age of the Annuitant as of the new Maturity Date cannot
be greater than 90. The Qualified Contract is designed for use with several
types of qualified plans. Consult your tax adviser about the use of a Qualified
Contract with qualified plans, including the specified minimum distribution
rules applicable to such plans.

Annuity payments will be paid under Option B (described below), with 120
payments guaranteed, unless the Owner elects otherwise. The Owner may change the
annuity option by written request at any time prior to the Maturity Date. The
Owner may also select or change the frequency of annuity payments, which may be
monthly, quarterly, semi-annually or annually, subject to the requirement that
the annuity option and payment frequency provides for payments of at least $100
per period. If this is not possible, a lump sum payment will be made.

ANNUITY OPTIONS

The Owner may select one or more of the annuity options described below, or
any alternate form of settlement acceptable to Western Reserve. Treasury
Regulations may preclude the availability of certain annuity options in
connection with certain Qualified Contracts. The level of annuity payments under
the following options is based upon the option selected and, depending on the
option chosen, such factors as the Annuitant's age when payments begin and the
duration of guaranteed payments, if any.

OPTION A - FIXED INSTALLMENTS. The annuity proceeds will be paid in equal
installments over a fixed period of 5, 10, 15, 20, 25 or 30 years.

OPTION B - LIFE INCOME. The annuity proceeds will be paid in equal
installments: (1) during the lifetime of the Annuitant only ("Life Annuity");
(2) during a fixed period certain and for the remaining lifetime of the
Annuitant ("Certain Periods"); or (3) until the sum of installments paid equals
the annuity proceeds applied and for the remaining life of the Annuitant
("Installment Refund"). Guaranteed payment periods may be elected for 5 and 10
years under the Certain Period option, or for the period in which the total
payments will be equal to the annuity proceeds on the Maturity Date under the
Installment Refund option.

OPTION C - JOINT AND SURVIVOR LIFE INCOME. The proceeds will be paid
during the joint lifetimes of the Annuitant and a designated Co-Annuitant and
will (1) continue upon the death of the first payee for the remaining lifetime
of the survivor or (2) be reduced by one-third upon the death of the first payee
and continue for the remaining lifetime of the survivor.

MINIMUM GUARANTEED INTEREST RATES

The annuity options discussed above provide for the determination of
annuity payments on a fixed basis, as opposed to a variable basis. That is,
Western Reserve guarantees that after the Maturity Date, monies held under an
annuity option will be credited with interest at a minimum guaranteed effective
annual rate of 4.0%. In addition to guaranteeing this minimum rate, Western
Reserve may from time to time and in its sole discretion credit higher interest
rates.

DEATH BENEFITS AFTER THE MATURITY DATE

Death benefits, if any, payable after the Maturity Date will be paid in
accordance with the annuity option then in effect. (For additional information
about death benefit payments under the Contract, see "ACCUMULATION
PROVISIONS - Death Benefits during the Accumulation Period" on page 25.)

29
<PAGE> 37

IMPROVED ANNUITY RATES

Western Reserve guarantees that if, at the Maturity Date, it is offering
annuity contracts of the same type and class as the Contract with more favorable
rates contained in the income tables therein, the improved rates will be made
available to the Owner.

PROOF OF AGE, SEX, AND SURVIVAL

Western Reserve may require proper proof of age and sex of any Annuitant or
Co-Annuitant prior to making the first annuity payment. Prior to making any
payment, Western Reserve may require proper proof that the Annuitant or
Co-Annuitant is alive and legally qualified to receive such payment. If required
by law to ignore differences in sex of any payee, annuity payments will be
determined using unisex rates.

OTHER MATTERS RELATING TO THE CONTRACT

CHANGES IN PURCHASE PAYMENTS

The Owner may change the amount and the mode of the anticipated Purchase
Payment pattern specified in the Contract, if agreed to by Western Reserve.

TWENTY DAY FREE LOOK

An Owner may, at any time within twenty days of receipt of the Contract,
return it to the agent from whom it was purchased or to Western Reserve at its
administrative office. If the Contract is returned within this twenty day
period, Western Reserve will pay to the Owner the sum of: (1) the difference, if
any, between the Purchase Payments received and the amounts allocated to the
Series Account and the Fixed Account under the Contract; plus (2) the amount
allocated to the Fixed Account under the Contract; and (3) the Series Account
Value on the date Western Reserve or its authorized agent receives the returned
Contract. The Owner bears the investment risk during the twenty day period.
(Certain states require Western Reserve to refund the Purchase Payment, which
may be greater or less than the amount computed above. In these states, Western
Reserve bears the investment risk during the twenty day period.)

CONTRACT PAYMENTS

All payments under the Contract will be paid in one sum unless the Owner
elects otherwise. Western Reserve reserves the right to suspend or postpone the
right of withdrawal or postpone the date of payment for any period: (1) the
Exchange is closed, other than customary weekend and holiday closing, or trading
on the Exchange is restricted as determined by the SEC; (2) the SEC by order
permits postponement for the protection of Owners; or (3) an emergency exists,
as determined by the SEC, as a result of which valuation or disposal of
securities is not reasonably practicable. Transfers may also be postponed under
these circumstances.

Payments of any amounts derived from Purchase Payments paid by check or
bank draft may be delayed until the check or bank draft has cleared the payor's
bank.

OWNERSHIP

The Owner is the person entitled to exercise all rights under the Contract.
Prior to the Maturity Date, the Owner is the person designated in the
application or as subsequently named. If two Owners are named, the Contract will
be owned jointly and the consent of each Owner will be required to exercise
ownership rights under the Contract. These rights may be subject to the consent
of any assignee or irrevocable Beneficiary.

With regard to Non-Qualified Contracts, ownership of the Contract may be
changed or the Contract collaterally assigned at any time during the lifetime of
the Annuitant and prior to the Maturity Date, subject to the rights of any
irrevocable Beneficiary. The assignment of a Contract will be treated as a
distribution of the

30
<PAGE> 38

Contract Value for Federal tax purposes. (See "FEDERAL TAX MATTERS - Taxation of
Annuities" on pages 29-30.) Any change of ownership or assignment must be made
in writing and accepted by Western Reserve, and, if accepted, will be effective
as of the date accepted by Western Reserve. Western Reserve assumes no liability
for any payments made or actions taken before a change is accepted and shall not
be responsible for the validity or effect of any change of ownership or
assignment.

With regard to Qualified Contracts, ownership of the Contract generally may
be assigned, but only to the extent permitted by the Code and the terms of the
underlying retirement plan.

ANNUITANT AND CONTINGENT ANNUITANT

The Annuitant is the person named in the application to receive annuity
payments. If no person is so named, the Owner will be the Annuitant. As of the
Maturity Date, and upon agreement with Western Reserve, the Owner may elect a
different Annuitant or, if annuity Option C has been selected, add a joint
annuitant. On the Maturity Date, the Annuitant(s) will become the payee(s) and
receive the annuity payments.

A Contingent Annuitant may also be named in the application. If a
Contingent Annuitant has been named and the Annuitant dies during the
Accumulation Period while the Owner is alive, the Contract will continue in
force and the Contingent Annuitant will become the new Annuitant. If no
Contingent Annuitant has been named and the Annuitant dies during the
Accumulation Period, the Contract will terminate and a death benefit will be
paid to the Beneficiary. (See "ACCUMULATION PROVISIONS - Death Benefits during
the Accumulation Period" on page 25.) At any time during the Accumulation
Period, and upon agreement with Western Reserve, the Owner may add or change the
Contingent Annuitant.

BENEFICIARY

The Beneficiary is the person or persons named in the application or as
subsequently changed. The Beneficiary may be changed during the lifetime of the
Annuitant, subject to the rights of any irrevocable Beneficiary. Any change must
be made in writing and received at Western Reserve's administrative office and,
if accepted, will be effective as of the date on which signed by the Owner.
Western Reserve assumes no liability for any payments made or actions taken
before the change is received and shall not be responsible for the validity or
effect of the change. Prior to the Maturity Date, if no Beneficiary survives the
Annuitant, the Owner or the Owner's estate will be the Beneficiary. The interest
of any Beneficiary is subject to that of any assignee. In the case of certain
Qualified Contracts, the Treasury Regulations prescribe certain limitations on
the designation of a Beneficiary.

MODIFICATION OR WAIVER

The contract and the application constitute the entire Contract. Only
statements in the application can be used to void the Contract or defend a
claim. The statements are considered representations and not warranties. No
Contract provision can be waived or changed except by endorsement. Only the
President or Secretary of Western Reserve can agree to change or waive any
provision of the Contract.

The Contract may not be modified by Western Reserve without the consent of
the Owner, except as may be required to make it conform to any law or regulation
or ruling issued by a governmental agency or to improve the rights and/or
benefits under the Contract.

FEDERAL TAX MATTERS

INTRODUCTION

The Contracts are designed for use by individuals to accumulate Contract
Values and may be used by retirement plans regardless of whether the plans
qualify for special Federal income tax treatment. The ultimate effect of Federal
income taxes on the amounts held under a Contract, on annuity payments, and on

31
<PAGE> 39

the economic benefits to the Owner, Annuitant or Beneficiary depends on Western
Reserve's tax status, on the type of retirement plan for which the Contract is
purchased, and upon the tax and employment status of the individual concerned.

The following discussion is general in nature and is not intended as tax
advice. Each person concerned should consult a competent tax adviser. No attempt
is made to consider any applicable state or other tax laws. Moreover, the
discussion is based upon Western Reserve's understanding of the Federal income
tax laws as they are currently interpreted. Western Reserve makes no
representations regarding the likelihood of continuation of the Federal income
tax laws, the Treasury Regulations, or the current interpretations by the
Internal Revenue Service (the "Service"). For a discussion of Federal income
taxes as they relate to the Fund, please see the accompanying Prospectuses for
the Portfolios.

COMPANY TAX STATUS

Western Reserve is taxed as a life insurance company under Part 1 of
Subchapter L of the Code. Because the Series Account is not an entity separate
from Western Reserve and its operations form a part of Western Reserve, it will
not be taxed separately as a "regulated investment company" under Subchapter M
of the Code. Investment income and realized capital gains on the assets of the
Series Account are reinvested and taken into account in determining the Contract
Value. Western Reserve believes that under existing Federal income tax law, the
Series Account's investment income, including realized net capital gains, will
not be taxed to Western Reserve. Based upon this belief, it is anticipated that
no charges will be made against the Series Account for Federal income tax.
Western Reserve reserves the right to make a deduction for taxes from the assets
of the Series Account should they be imposed with respect to such items in the
future.

TAXATION OF ANNUITIES

The following discussion assumes the Contract will qualify as an annuity
contract for Federal income tax purposes.

1. IN GENERAL. Code Section 72 governs taxation of annuities. In general,
an Owner is not taxed on increases in value under a Contract until some form of
distribution is made under the Contract. The exception to this rule is that
generally, an Owner of any deferred annuity contract who is not a natural person
must include in income any increase in the excess of the Contract Value over the
investment in the Contract during the taxable year with respect to Purchase
Payments made after February 28, 1986. However, there are some exceptions to
this exception and you may wish to discuss these with your tax counsel. The
taxable portion of a distribution (in the form of an annuity or lump sum
payment) is generally taxed as ordinary income. For this purpose, the
assignment, pledge, or agreement to assign or pledge any portion of the Contract
Value generally will be treated as a distribution.

2. PARTIAL WITHDRAWALS AND SURRENDERS. In the case of a partial
withdrawal, Systematic Partial Withdrawal or Surrender distributed to a
participant or Beneficiary under a Qualified Contract (other than a Qualified
Contract used in a retirement plan that qualifies for special Federal income tax
treatment under section 457 of the Code as to which there are special rules), a
ratable portion of the amount received is taxable, generally based on the ratio
of the investment in the Contract to the total Contract Value. The "investment
in the contract" generally equals the portion, if any, of any Purchase Payments
paid by or on behalf of an individual under a Contract which is not excluded
from the individual's gross income. For contracts issued in connection with
qualified plans, the "investment in the contract" can be zero.

Generally, in the case of a partial withdrawal, Systematic Partial
Withdrawal, or Surrender under a Non-Qualified Contract before the Maturity
Date, amounts received are first treated as taxable income to the extent that
the Contract Value immediately before the partial withdrawal, Systematic Partial
Withdrawal or Surrender exceeds the "investment in the contract" at that time.
Any additional amount partially withdrawn, applied to a Systematic Partial
Withdrawal or surrendered is not taxable. In the event of a partial withdrawal
or Systematic Partial Withdrawal from, or Surrender of, a Non-Qualified
Contract, Western Reserve will

32
<PAGE> 40

withhold for tax purposes the minimum amount required by law, unless the Owner
affirmatively elects, before payments begin, to have either nothing withheld or
a different amount withheld. A partial annuitization may be treated as a partial
withdrawal from the Contract prior to the Maturity Date, which could generate
taxable income to the extent the amounts held under the Contract exceed the
investment in the Contract. Accordingly, an Owner should contact a competent tax
advisor before effecting a partial annuitization.

3. ANNUITY PAYMENTS. Although the tax consequences may vary depending on
the annuity option elected under the Contract, in general, only the portion of
the annuity payment that represents the amount by which the Contract Value
exceeds the investment in the Contract will be taxed; after the investment in
the Contract is recovered, the full amount of any additional annuity payments is
taxable. For annuity payments on a fixed basis, in general, there is no tax on
the portion of each payment which represents the same ratio that the "investment
in the contract" bears to the total expected value of the annuity payments for
the term of the payments; however, the remainder of each annuity payment is
taxable until the recovery of the investment in the Contract, and thereafter the
full amount or each annuity payment is taxable. If death occurs before full
recovery of the investment in the Contract, the unrecovered amount may be
deducted on the Annuitant's final tax return.

4. PENALTY TAX ON CERTAIN DISTRIBUTIONS. In the case of a distribution
pursuant to a Non-Qualified Contract, a penalty tax may be imposed equal to 10%
of the amount treated as taxable income. The penalty tax is not imposed in
certain circumstances, including, generally, distributions: (1) made on or after
the date on which the Owner attains age 59 1/2, (2) made as a result of death of
the Owner or disability of the taxpayer, or (3) received in substantially equal
installments as a life annuity. Other tax penalties may apply to certain
distributions pursuant to a Qualified Contract.

5. TAXATION OF DEATH BENEFIT PROCEEDS. Amounts may be distributed from a
Contract because of the death of an Owner or an Annuitant. Generally, such
amounts are includable in the income of the recipient as follows: (1) if
distributed in a lump sum, they are taxed in the same manner as a full Surrender
of the Contract, as described above, or (2) if distributed under an annuity
option, they are taxed in the same manner as annuity payments, as described
above.

6. MULTIPLE CONTRACTS. All non-qualified, deferred annuity contracts
entered into after October 21, 1988 that are issued by Western Reserve (or its
affiliates) to the same Owner during any calendar year are to be treated as one
annuity contract for purposes of determining the amount includable in an
individual's gross income. There may be other situations in which the Treasury
may conclude that it would be appropriate to aggregate two or more annuity
contracts purchased by the same owner. Accordingly, an Owner should consult a
competent tax adviser before purchasing more than one Contract or other annuity
contracts.

7. TRANSFERS, ASSIGNMENTS OR EXCHANGES OF CONTRACTS. A transfer of
ownership or assignment of a Contract, the designation of an Annuitant or other
Beneficiary who is not also the Owner, or a change of Annuitant, may result in
certain income or gift tax consequences to the Owner that are beyond the scope
of this discussion. An Owner contemplating any such transfer, assignment or
change should contact a competent tax adviser in respect to the potential tax
effects of such a transaction.

8. POSSIBLE CHANGES IN TAXATION. In past years, legislation has been
proposed that would have adversely modified the Federal taxation of certain
annuities. For example, one such proposal would have changed the tax treatment
of non-qualified annuities that did not have "substantial life contingencies" by
taxing income as it is credited to the annuity. Although as of the date of this
Prospectus Congress is not considering any legislation regarding the taxation of
annuities, there is always the possibility that the tax treatment of annuities
could change by legislation or other means (such as the IRS regulations, revenue
rulings, judicial decisions, etc.). Moreover, it is also possible that any
change could be effective prior to the date of the change.

33
<PAGE> 41

QUALIFIED PLANS

The Qualified Contract is designed for use with several types of qualified
retirement plans. The tax rules applicable to participants and beneficiaries in
such qualified plans vary according to the type of plan and the terms and
conditions of the plan itself. Special favorable tax treatment may be available
for certain types of contributions and distributions (including special rules
for certain lump sum distributions). Adverse tax consequences may result from
contributions in excess of specified limits, distributions prior to age 59 1/2
(subject to certain exceptions), distributions that do not conform to specified
minimum distribution rules, aggregate distributions in excess of a specified
annual amount, and in certain other circumstances. Therefore, Western Reserve
makes no attempt to provide more than general information about use of the
Contract with the various types of qualified plans. Owners and participants
under qualified plans as well as Annuitants and Beneficiaries are cautioned that
the rights of any person to any benefits under qualified plans may be subject to
the terms and conditions of the plan themselves, regardless of the terms and
conditions of the Contract issued in connection therewith. Some retirement plans
are subject to distribution and other requirements that are not incorporated
into our Contract administration procedures. Owners, participants and
beneficiaries are responsible for determining that contributions, distributions
and other transactions with respect to the Contracts comply with applicable law.
Purchasers of Contracts for use with any qualified plan should seek competent
legal and tax advice regarding the suitability of the Contract therefore.

1. (a) SECTION 403(B) PLANS. Under Section 403(b) of the Code, payments
made by public school systems and certain tax exempt organizations to purchase
annuity policies for their employees are excludable from the gross income of the
employee, subject to certain limitations. However, such payments may be subject
to FICA (Social Security) taxes. Additionally, in accordance with the
requirements of the Code, Section 403(b) annuities generally may not permit
distribution of (i) elective contributions made in years beginning after
December 31, 1988, and (ii) earnings on those contributions and (iii) earnings
on amounts attributed to elective contributions held as of the end of the last
year beginning before January 1, 1989. Distributions of such amounts will be
allowed only upon the death of the employee, on or after attainment of age
59 1/2, separation from service, disability, or financial hardship, except that
income attributable to elective contributions may not be distributed in the case
of hardship.

(b) RESTRICTIONS UNDER THE TEXAS OPTIONAL RETIREMENT PROGRAM. Section
36.105 of the Texas Educational Code permits participants in the Texas Optional
Retirement Program (ORP) to withdraw their interest in a variable annuity policy
issued under the ORP only upon: (1) termination of employment in the Texas
public institutions of higher education; (2) retirement; or (3) death.
Accordingly, a participant in the ORP (or the participant's estate if the
participant has died) will be required to obtain a certificate of termination
from the employer or a certificate of death before the account can be redeemed.

(c) RESTRICTIONS UNDER QUALIFIED CONTRACTS. Other restrictions with
respect to the election, commencement, or distribution of benefits may apply
under Qualified Contracts or under the terms of the plans in respect of which
Qualified Contracts are issued.

2. INDIVIDUAL RETIREMENT ANNUITIES. Sections 219 and 408 of the Code
permit individuals or their employers to contribute to an individual retirement
program known as an "Individual Retirement Annuity" or an "IRA". Individual
Retirement Annuities are subject to limitation on the amount which may be
contributed and deducted and the time when distributions may commence. In
addition, distributions from certain other types of qualified plans may be
placed into an Individual Retirement Annuity on a tax-deferred basis. The
Internal Revenue Service has not reviewed the Contract for qualification as an
IRA, and has not addressed in a ruling of general applicability whether a death
benefit provision such as the provision in the Contract comports with IRA
qualification requirements.

3. CORPORATE PENSION AND PROFIT-SHARING PLANS AND H.R. 10 PLANS. Section
401(a) and 403(a) of the Code permit corporate employers to establish various
types of retirement plans for employees and self-employed individuals to
establish qualified plans for themselves and their employees. These retirement
plans may permit the purchase of the Contracts to accumulate retirement savings
under the plans. Adverse

34
<PAGE> 42

tax or other legal consequences to the plan, to the participant or to both may
result if this Contract is assigned or transferred to any individual as a means
to provide benefit payments.

4. DEFERRED COMPENSATION PLANS. Section 457 of the Code, although not
actually providing for a qualified plan as that term is normally used, provides
for certain deferred compensation plans with respect to service for state
governments, local governments, political subdivisions, agencies,
instrumentalities and certain affiliates of such entities and tax exempt
organizations which enjoy special treatment. The Contracts can be used with such
plans. Under such plans, a participant may specify the form of investment in
which his or her participation will be made. All such investments, however, are
owned by, and are subject to, the claims of the general creditors of the
sponsoring employer. Depending on the terms of the particular plan, the employer
may be entitled to draw on deferred amounts for purposes unrelated to its
section 457 plan obligations. In general, all amounts received under a section
457 plan are taxable and are subject to federal income tax withholding as wages.

5. DISTRIBUTION FROM QUALIFIED PLANS. Under the tax qualification rules
for Section 401(a), 403(b), 408 and 457 plans, distributions generally must
commence no later than April 1 of the calendar year following the calendar year
in which the Owner (or plan participant) reaches age 70 1/2, and must be made in
specified form and manner. Special rules and other restrictions may apply
depending on the type of plan and the particular circumstances. Each Owner is
responsible for requesting distributions under the Contract that satisfy
applicable tax rules, and should consult a qualified tax adviser.

The above description of Federal income tax consequences pertaining to the
different types of qualified plans that may be funded by the Contracts is only a
brief summary and is not intended as tax advice. The rules governing the
provisions of qualified plans are extremely complex and often difficult to
comprehend. In addition, the Tax Reform Act has significantly changed a great
many rules for qualified plans. Anything less than full compliance with the
applicable rules, all of which are subject to change, may have significant
adverse tax consequences. A prospective purchaser considering the purchase of a
Contract in connection with a qualified plan should first consult a qualified
and competent tax adviser with regard to the suitability of the Contract as an
investment vehicle for the qualified plan.

ADDITIONAL CONSIDERATIONS

1. DIVERSIFICATION. Section 817(h) of the Code requires that the
investments of the Series Account must be "adequately diversified" in accordance
with Treasury regulations in order for the Contracts to qualify as annuity
contracts under Section 72 of the Code. The Series Account, through the Fund,
intends to comply with the diversification requirements prescribed by the
Treasury in Reg. Sec. 1.817.5, which affect how the Fund's assets may be
invested. Western Reserve believes the Series Account will, thus, meet the
diversification requirements of Section 817(h). If the Series Account does not
meet those diversification requirements, Owners would be taxed currently on any
investment income under the Contract.

In certain circumstances, owners of variable annuity contracts may be
considered the owners, for Federal income tax purposes, of the assets of the
separate account used to support their contracts. In those circumstances, income
and gains from the separate account assets would be includable in the variable
annuity contract owner's gross income. The Treasury Department has stated in
published rulings that a variable annuity contract owner will be considered the
owner of separate account assets if the contract owner possesses incidents of
ownership in those assets, such as the ability to exercise investment control
over the assets. The Treasury Department has also announced, in connection with
the issuance of regulations concerning investment diversification, that those
regulations "do not provide guidance concerning the circumstances in which
investor control of the investments of a segregated asset account may cause the
investor (i.e., the contract owner), rather than the insurance company, to be
treated as the owner of the assets in the account." This announcement further
states that guidance would be issued by way of regulations or rulings on the
"extent to which policyholders may direct their investments to particular
subaccounts without being treated as owners of the underlying assets."

35
<PAGE> 43

The ownership rights under the Contract are similar to, but different in
certain respects from, those described by the IRS in rulings in which it was
determined that contract owners were not owners of separate account assets. For
example, the owner of a Contract has the choice of more sub-accounts in which to
allocate net purchase payments and Contract values, and may be able to transfer
among sub-accounts more frequently than in such rulings. These differences could
result in an Owner being treated as the owner of the assets of the Series
Account. In addition, Western Reserve does not know what standards will be set
forth, if any, in the regulations or rulings which the Treasury Department has
stated it expects to issue. Western Reserve therefore reserves the right to
modify the Contract as necessary to attempt to prevent an Owner from being
considered the owner of a pro rata share of the assets of the Series Account.

2. DISTRIBUTION-AT-DEATH RULES. The Code also requires non-qualified
annuity contracts to contain specific provision for distribution of the Contract
proceeds upon the death of the Owner. In order to be treated as an Annuity
Contract for Federal income tax purposes, the Code requires that such Contracts
provide that (a) if any Owner dies on or after the Maturity Date and before the
entire interest in the Contract has been distributed, the remaining portion must
be distributed at least as rapidly as under the method in effect on the Owner's
death; and (b) if any Owner dies before the Maturity Date, the entire interest
in the Contract must generally be distributed within 5 years after the Owner's
date of death. These requirements will be considered satisfied if the entire
interest of the Contract is used to purchase an immediate annuity under which
payments will begin within one year of the Owner's death and will be made for
the life of the Beneficiary or for a period not extending beyond the life
expectancy of the Beneficiary. The Owner's Beneficiary is the person to whom
ownership of the Contract passes by reasons of death and must be a natural
person. If the Beneficiary is the Owner's surviving spouse, the Contract may be
continued with the surviving spouse as the new Owner. Non-Qualified Contracts
will be reviewed and modified if necessary to attempt to assure that they comply
with the Code requirements when clarified by regulation or otherwise. Other
rules may apply to Qualified Contracts.

3. WITHHOLDING. Withholding of Federal income taxes on the taxable portion
of all distributions may be required unless the recipient elects not to have any
such amounts withheld and properly notifies Western Reserve of that election.
Different rules may apply to United States citizens or expatriates living
abroad. In addition, some states have enacted legislation requiring withholding.
Effective January 1, 1993, certain distributions from Section 401(a), 403(a) and
403(b) Plans are subject to mandatory withholding.

4. SECTION 1035 EXCHANGES. Code Section 1035 provides that no gain or loss
shall be recognized on the exchange of one annuity contract for another. If the
surrendered Contract was issued prior to August 14, 1982, the tax rules that
formerly provided that the Surrender was taxable only to the extent the amount
received exceeds the Owner's investment in the Contract will continue to apply
to amounts allocable to investment in the Contract before August 14, 1982. In
contrast, Contracts issued on or after January 19, 1985 in a Code Section 1035
exchange are treated as new Contracts for purposes of the penalty and
distribution-at-death rules. Special rules and procedures apply to Code Section
1035 transactions. Prospective purchasers wishing to take advantage of Code
Section 1035 should consult their tax advisors.

5. DIVERSIFICATION AND QUALIFIED PLANS. Code Section 817(h) applies to
variable annuity contracts other than pension plan contracts. The regulations
reiterate that the diversification requirements do not apply to pension plan
contracts. All of the qualified retirement plans (described above) are defined
as pension plan contracts for these purposes. Notwithstanding the exception of
Qualified Contracts from application of the diversification rules, the
investment vehicle for Western Reserve's Qualified Contracts (i.e., the Fund)
will be structured to comply with the diversification standards because it
serves as the investment vehicle for Non-Qualified Contracts as well as
Qualified Contracts.

THE FIXED ACCOUNT

An Owner may allocate Net Purchase Payments and transfer Contract Values to
the Fixed Account, which is part of Western Reserve's general account. Because
of exemptive and exclusionary provisions,

36
<PAGE> 44

interests in the Fixed Account have not been registered under the Securities Act
of 1933 and neither the Fixed Account nor the general account has been
registered as an investment company under the 1940 Act. Accordingly, neither the
Fixed Account, the general account nor any interests therein are generally
subject to the provisions of these Acts and Western Reserve has been advised
that the staff of the SEC has not reviewed the disclosure in this Prospectus
relating to the Fixed Account. Disclosure regarding the Fixed Account may,
however, be subject to certain generally applicable provisions of the Federal
securities laws relating to the accuracy and completeness of statements made in
prospectuses.

The portion of the Contract Value allocated to the Fixed Account (the
"Fixed Account Value") will be credited with rates of interest, as described
below. Because the Fixed Account Value becomes part of Western Reserve's general
account, Western Reserve assumes the risk of investment gain or loss on this
amount. All assets in the general account are subject to Western Reserve's
general liabilities from business operations.

MINIMUM GUARANTEED AND CURRENT INTEREST RATES

The Fixed Account Value is guaranteed to accumulate at a minimum effective
annual interest rate of 4%. Western Reserve presently credits the Fixed Account
Value with current rates in excess of the minimum guarantee but it is not
obligated to do so. These current interest rates are influenced by, but do not
necessarily correspond to, prevailing general market interest rates. Because
Western Reserve, at its sole discretion, anticipates changing the current
interest rate from time to time, different allocations to and from the Fixed
Account Value will be credited with different current interest rates.

Western Reserve further guarantees that when a higher or lower current
interest rate is declared on an allocation to the Fixed Account Value, that new
interest rate will be guaranteed on such allocation for at least a one year
period measured from the date of each Purchase Payment or transfer (the
"Guarantee Period"). At the end of the Guarantee Period, Western Reserve
reserves the right to declare a new current interest rate on such allocation and
accrued interest thereon (which may be a different current interest rate than
the current interest rate on new allocations to the Fixed Account Value on that
date). The rate declared on such allocation and accrued interest thereon at the
end of each Guarantee Period will be guaranteed again for another Guarantee
Period. At the end of any Guarantee Period, any interest credited on the Fixed
Account Value in excess of the minimum guaranteed rate of 4% per year will be
determined in the sole discretion of Western Reserve. The Owner assumes the risk
that interest credited may not exceed the guaranteed minimum rate.

Allocations from the Fixed Account Value to provide: a) partial withdrawal
amounts, b) partial annuitization amounts, c) transfers to the Series Account,
or d) the Annual Contract Charge are currently, for the purpose of crediting
interest, accounted for on a last in, first out ("LIFO") method.

Western Reserve reserves the right to change the method of crediting
interest from time to time, provided that such changes will not have the effect
of reducing the guaranteed rate of interest below 4% per annum.

FIXED ACCOUNT VALUE

At the end of any Valuation Period, the Fixed Account Value is equal to:

1. The sum of all Net Purchase Payments allocated to the Fixed Account;
plus

2. Any amounts transferred from a Sub-Account to the Fixed Account; plus

3. Total interest credited to the Fixed Account; minus

4. Any partial annuitizations from the Fixed Account; minus

5. Any partial withdrawals or Surrenders from the Fixed Account; minus

6. Any amounts transferred to a Sub-Account from the Fixed Account; minus

7. Any amounts charged to the Fixed Account to pay the Administration Fee.

37
<PAGE> 45

ALLOCATIONS, TRANSFERS AND WITHDRAWALS

Net Purchase Payments and transfers to the Fixed Account will be allocated
to the Fixed Account on the first Valuation Date on or following the date
Western Reserve receives the payment or transfer request at its administrative
office, except that any allocation of the initial Net Purchase Payment will take
place on the Contract Date.

Transfers may be made from the Fixed Account to a Sub-Account once each
Contract Year. No transfer charge will apply to transfers from the Fixed Account
to a Sub-Account. Amounts may be withdrawn from the Fixed Account for partial
annuitizations, partial withdrawals, and Surrenders only upon written request
and (other than for Surrenders) only with Western Reserve's consent. Western
Reserve further reserves the right to defer payment of transfers, partial
withdrawals, or Surrenders (but not partial annuitizations) from the Fixed
Account for up to six months. In addition, Contract provisions relating to
transfers, partial annuitizations, partial withdrawals or Surrenders from the
Series Account will also apply to the Fixed Account. Dollar Cost Averaging may
be done from the Fixed Account. (See "THE CONTRACT - ACCUMULATION
PROVISIONS - Transfer to and from, and among Sub-Accounts" on page 21.)

DISTRIBUTION OF THE CONTRACTS

The Contracts will be sold by individuals who, in addition to being
licensed as life insurance agents for Western Reserve, are also registered
representatives of InterSecurities, Inc., which has the same address as Western
Reserve, an affiliate of Western Reserve and the principal underwriter of the
Contracts, or of broker-dealers who have entered into written sales agreements
with the principal underwriter. InterSecurities, Inc. is registered with the SEC
under the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc. No amounts have been retained by
InterSecurities, Inc. for acting as principal underwriter for the Contracts.
Western Reserve agents and other registered representatives will generally
receive sales commissions of up to 3.5% of Purchase Payments. In addition,
certain production, persistency and managerial bonuses may be paid. Subject to
applicable Federal and state laws and regulations, Western Reserve may also pay
compensation to banks and other financial institutions for their services in
connection with the sale and servicing of the Contracts. The level of such
compensation will not exceed that paid to broker-dealers for their sale of the
Contracts.

VOTING RIGHTS

To the extent required by law, Western Reserve will vote the Fund shares
held in the Series Account at shareholder meetings of the Fund in accordance
with instructions received from persons having voting interests in the
corresponding Sub-Accounts of the Series Account. Except as required by the 1940
Act, the Fund does not hold regular or special shareholder meetings. If the 1940
Act or any regulation thereunder should be amended or if the present
interpretation thereof should change, and as a result Western Reserve determines
that it is permitted to vote the Fund shares in its own right, it may elect to
do so.

The number of votes that an Owner has the right to instruct will be
calculated separately for each Sub-Account, and will be determined by dividing
the portion of the Contract Value in that Sub-Account by $100. Fractional shares
will be counted. The number of votes of the Portfolio that the Owner has the
right to instruct will be determined as of the date established by that
Portfolio for determining shareholders eligible to vote at the meeting of the
Fund. Voting instructions will be solicited by written communications prior to
such meeting in accordance with procedures established by the Fund.

Western Reserve will vote Fund shares as to which no timely instructions
are received and Fund shares that are not attributable to Owners in proportion
to the voting instructions that are received with respect to all Contracts
participating in that Portfolio. Voting instructions to abstain on any item to
be voted upon will reduce the votes eligible to be cast by Western Reserve.

Each person having a voting interest in a Sub-Account will receive proxy
materials, reports and other materials relating to the appropriate Portfolio.

38
<PAGE> 46

LEGAL PROCEEDINGS

There are at present no legal proceedings to which the Series Account is a
party or to which the assets of the Series Account are subject. Western Reserve
is not involved in any litigation that is of material importance in relation to
its total assets or that relates to the Series Account. InterSecurities, Inc.,
the Series Account's principal underwriter, is not presently a party to any
legal proceedings that are likely to have a material adverse effect upon its
ability to perform its contract with the Series Account.

STATEMENT OF ADDITIONAL INFORMATION

The Statement of Additional Information contains information and financial
statements relating to the Series Account and Western Reserve. The Table of
Contents of the Statement of Additional Information is set forth below:

1. Custodian
2. Independent Public Accountants
3. Distribution of Contracts
4. Calculation of Performance Related Information
5. Addition, Deletion, and Substitution of Investments
6. Financial Statements

Inquiries and requests for a Statement of Additional Information should be
directed to Western Reserve Life Assurance Co. of Ohio, P.O. Box 9051,
Clearwater, Florida 34618-9051; telephone number (800) 851-9777.

WRL00006-05/96

39
<PAGE> 47

PART B

INFORMATION REQUIRED IN A STATEMENT OF
ADDITIONAL INFORMATION

<PAGE> 48

WRL SERIES ANNUITY ACCOUNT

WRL FREEDOM VARIABLE ANNUITY

Flexible Payment Variable Accumulation
Deferred Annuity Contract

Issued by

Western Reserve Life Assurance Co. of Ohio
201 Highland Avenue
Largo, Florida 34640
Telephone: (800) 851-9777
(813) 585-6565

STATEMENT OF ADDITIONAL INFORMATION

This Statement of Additional Information is not a Prospectus and should be read
in conjunction with the Prospectus, dated May 1, 1996, which is available
without charge by contacting Western Reserve Life Assurance Co. of Ohio
("Western Reserve") at P.O. Box 9051, Clearwater, Florida 34618-9051 or at the
above telephone number.

May 1, 1996

WRL00007-05/96

<PAGE> 49

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Custodian.............................................................................. 3
Independent Public Accountants......................................................... 3
Legal Matters.......................................................................... 3
Distribution of Contracts.............................................................. 3
Calculation of Performance Related Information......................................... 3
Addition, Deletion, and Substitution of Investments.................................... 6
Financial Statements................................................................... 6
</TABLE>

2
<PAGE> 50

CUSTODIAN

The assets of WRL Series Annuity Account (the "Series Account") are held by
Western Reserve. The assets of the Series Account are kept physically segregated
and held apart from the general account of Western Reserve. Western Reserve
maintains records of all purchases and redemptions of shares of the WRL Series
Fund, Inc. (the "Fund"). Additional protection for the assets of the Series
Account is provided by a blanket bond issued to AEGON U.S. Holding Corporation
("AEGON U.S.") in the amount of $5 million (subject to a $1 million deductible),
covering all of the employees of AEGON U.S. and its affiliates, including
Western Reserve. A Stockbrokers Blanket Bond, issued to AEGON U.S.A. Securities,
Inc., provides additional fidelity coverage to a limit of $11 million, subject
to a $50,000 deductible.

INDEPENDENT PUBLIC ACCOUNTANTS

The accounting firm of Price Waterhouse LLP, independent certified public
accountants, provided audit services to the Series Account for the year ended
December 31, 1995. The principal business address of Price Waterhouse LLP is
1055 Broadway, Kansas City, Missouri 64105. The accounting firm of Ernst & Young
LLP, independent auditors, provided audit services to Western Reserve for the
year ended December 31, 1995. The principal business address of Ernst & Young
LLP is 801 Grand Avenue, Suite 3400, Des Moines, Iowa 50309-2764.

LEGAL MATTERS

Sutherland, Asbill & Brennan, Washington, D.C., has provided advice on
certain legal matters concerning Federal securities laws in connection with the
Contracts. All matters of Ohio law pertaining to the Contracts, including the
validity of the Contracts and Western Reserve's right to issue the Contracts
under Ohio insurance law, have been passed upon by Thomas E. Pierpan, Esq., Vice
President and Counsel of Western Reserve.

DISTRIBUTION OF CONTRACTS

The offering of Contracts will be made on a continuous basis.

CALCULATION OF PERFORMANCE RELATED INFORMATION

A. YIELD AND EFFECTIVE YIELD QUOTATIONS FOR THE MONEY MARKET SUB-ACCOUNT

Yield - The yield quotation set forth in the Prospectus for the Money
Market Sub-Account is for the seven days ended on the date of the most recent
balance sheet of the Series Account included in the registration statement, and
is computed by determining the net change, exclusive of capital changes, in the
value of a hypothetical pre-existing account having a balance of one
Accumulation Unit in the Money Market Sub-Account at the beginning of the
period, subtracting a hypothetical charge reflecting deductions from Owner
accounts, and dividing the difference by the value of the account at the
beginning of the base period to obtain the base period return, and multiplying
the base period return by (365/7) with the resulting figure carried to at least
the nearest hundredth of one percent.

Effective Yield - The effective yield quotation set forth in the Prospectus
for the Money Market Sub-Account is for the seven days ended on the date of the
most recent balance sheet of the Series Account included in the registration
statement. The effective yield is computed by determining the net change,
exclusive of capital changes, in the value of a hypothetical pre-existing
Sub-Account having a balance of one Accumulation Unit in the Money Market
Sub-Account at the beginning of the period. A hypothetical charge, reflecting
deductions from Owner accounts, is subtracted from the balance. The difference
is divided by the value of the account at the beginning of the base period to
obtain the base period return,

3
<PAGE> 51

which is then compounded by adding 1. Next the sum is raised to a power equal to
365 divided by 7, and 1 is subtracted from the result. The following formula
describes the computation:

EFFECTIVE YIELD = ({BASE PERIOD RETURN + 1}(365/7)) - 1

The effective yield is shown at least to the nearest hundredth of one
percent.

Hypothetical Charge - For purposes of the yield and effective yield
computations, the hypothetical charge reflects all fees and charges that are
charged to all Owner accounts in proportion to the length of the base period.
Such fees and charges include the $30 Administration Fee, calculated on the
basis of an average Series Account Value per Contract of $ , which
converts that charge to an assumed charge at an annual rate of % of the
Series Account Value. The yield and effective yield quotations do not reflect
any deduction for premium taxes or transfer charges that may be applicable to a
particular Contract, nor do they reflect the Withdrawal Charge that may be
assessed at the time of redemption in an amount ranging up to 5% of the
requested redemption amount. The specific Withdrawal Charge fees percentage
applicable to a particular redemption depends on the length of time Purchase
Payments have been held under the Contract and whether redemptions have been
previously made during that Contract Year. (See "Charges and
Deductions - Withdrawal Charge" on pages 18-19 of the Prospectus.) No fees or
sales charges are assessed upon annuitization under the Contracts except premium
taxes. Realized gains and losses from the sale of securities and unrealized
appreciation and depreciation of assets held by the Money Market Sub-Account and
the Fund are excluded from the calculation of yield.

B. TOTAL RETURN AND YIELD QUOTATIONS FOR THE AGGRESSIVE GROWTH, EMERGING
GROWTH, GROWTH, GLOBAL, BALANCED, EQUITY-INCOME, BOND,
SHORT-TO-INTERMEDIATE GOVERNMENT, UTILITY, TACTICAL ASSET ALLOCATION,
VALUE EQUITY, C.A.S.E. GROWTH AND MERIDIAN/INVESCO GLOBAL SECTOR SUB-
ACCOUNTS

The total return quotations set forth in the Prospectuses for all of these
Sub-Accounts holding assets for the Contracts are average annual total return
quotations for the one, five, and ten-year periods (or, while a Sub-Account has
been in existence for a period of less than five or ten years, for such lesser
period) ended on the date of the most recent balance sheet of the Series Account
and for the period from the date the Sub-Accounts commenced operations until the
aforesaid date. The quotations are computed by finding the average annual
compounded rates of return over the relevant periods that would equate the
initial amount invested to the ending redeemable value, according to the
following formula:

P(1 + T)(n) = ERV

<TABLE>
<S> <C> <C> <C>
Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value at the end of the particular period of a hypothetical
$1,000 payment made at the beginning of the particular period.
</TABLE>

For purposes of the total return quotations for all these Sub-Accounts, the
calculations take into effect all fees that are charged to all Owner accounts.
Such fees include the $30 Administration Fee, calculated on the basis of an
average Series Account Value per Contract of $ , which translates that
charge into an assumed charge at an annual rate of % of the Series Account
value. The calculations also assume a complete redemption as of the end of the
particular period. The calculations do not reflect the effect of any premium
taxes or transfer charges that may be applicable to a particular Contract.

The yield quotations, if any, for all of the Sub-Accounts except the Money
Market Sub-Account set forth in the Prospectuses are based on the thirty-day
period ended on the date of the most recent balance sheet of the Series Account
and is computed by dividing the net investment income per Accumulation Unit
earned

4
<PAGE> 52

during the period by the maximum offering price per unit on the last date of the
period, according to the following formula:

a-b
---
YIELD = 2[(cd + 1)(6) - 1]

Where: a = net investment income earned during the period by the
corresponding Portfolio of the Fund attributable to shares
owned by the Sub-Account.

b = expenses accrued for the period (net of reimbursement).

c = the average daily number of Accumulation Units outstanding
during the period.

d = the maximum offering price per Accumulation Unit on the last
day of the period.

For purposes of the yield quotations for all of these Sub-Accounts the
calculations take into effect all fees that are charged to all Owner accounts.
Such fees include the $30 Administration Fee, calculated on the basis of an
average Series Account Value per Contract of $ , which translates that
charge into an assumed charge at an annual rate of % of the Series Account
value. The calculations do not take into account any premium taxes, the
Withdrawal Charge or any transfer charges.

Premium taxes currently range from 0% to 3.5% of Purchase Payments
depending upon the jurisdiction in which the Contract is delivered. A Withdrawal
Charge may be assessed at the time of redemption in an amount ranging up to 5%
of the requested redemption amount, with the specific percentage applicable to a
particular redemption depending on the length of time Purchase Payments were
held under the Contract, and whether redemptions had been previously made during
that Contract Year. (See "Charges and Deductions - Withdrawal Charge" on pages
18-19 of the Prospectus.)

C. OTHER PERFORMANCE DATA

Western Reserve may from time to time disclose average annual total return
in non-standard formats and cumulative total return for Contracts funded by the
Sub-Accounts.

Western Reserve may from time to time also disclose in advertisements and
sales literature yields and non-standard total returns for the Sub-Accounts
(some of which do not include Contract and Series Account fees and charges)
including such disclosure for the Sub-Accounts for periods prior to the date the
Sub-Accounts commenced operations.

For periods prior to the date each Sub-Account commenced operations,
performance information will be calculated based on the performance of the
Fund's corresponding Portfolios that commenced operations prior to each
Sub-Account, and the assumption that each Sub-Account was in existence for the
same periods as those indicated for each respective Portfolio, with a level of
fees and charges approximately equal to those currently assessed against each
Sub-Account and the Contract. The Prospectus contains a table which shows
average annual total returns for periods prior to the date each Sub-Account
commenced operations. The Prospectus also contains a similar table for the same
periods which shows average annual total returns which do not reflect any charge
on amounts surrendered or withdrawn. The total returns in the second table are
calculated in exactly the same manner as those in the preceding table, except
that the ending redeemable value of the hypothetical account for the periods is
replaced with an ending value for the periods that does not take into account
any charge on amounts surrendered or withdrawn.

Non-standard performance data will only be disclosed if the standard
performance data for the required periods is also disclosed.

D. ADVERTISING AND SALES LITERATURE

From time to time Western Reserve may refer to the diversifying process of
asset allocation based on the Modern Portfolio Theory developed by Nobel Prize
winning economist Harry Markowitz. The basic assumptions of Modern Portfolio
Theory are the selection of individual investments has little impact on

5
<PAGE> 53

portfolio performance, market timing strategies seldom work, markets are
efficient, and portfolio selection should be made among asset classes. Modern
Portfolio Theory allows an investor to determine an efficient portfolio
selection that will provide a higher return with the same risk or the same
return with lower risk.

When presenting the asset allocation process Western Reserve may outline
the process of personal and investment risk analysis including determining
individual risk tolerances and a discussion of the different types of investment
risk. Western Reserve may classify investors into four categories based on their
risk tolerance and will quote various industry experts on which types of
investments are best suited to each of the four risk categories. The industry
experts quoted may include Ibbotson Associates, CDA Investment Technologies,
Lipper Analytical Services and any other expert which has been deemed by the
Company to be appropriate. Western Reserve may also provide a historical
overview of the performance of a variety of investment market indices, the
performance of these indices over time, and the performance of different asset
classes, such as stocks, bonds, cash equivalents, etc. Western Reserve may also
discuss investment volatility including the range of returns for different asset
classes and over different time horizons, and the correlation between the
returns of different asset classes. Western Reserve may also discuss the basis
of portfolio optimization including the required inputs and the construction of
efficient portfolios using sophisticated computer-based techniques. Finally,
Western Reserve may describe various investment strategies and methods of
implementation, the periodic rebalancing of diversified portfolios, the use of
dollar cost averaging techniques, a comparison of the tax impact of purchase
payments made on a "before tax" basis through a tax-qualified plan with those
made on an "after tax" basis outside of a tax-qualified plan, and a comparison
of tax-deferred versus non tax-deferred accumulation of purchase payments.

ADDITION, DELETION, AND SUBSTITUTION OF INVESTMENTS

Western Reserve reserves the right, subject to compliance with applicable
law, to make additions to, deletions from or substitutions for the shares that
are held by the Series Account or that the Series Account may purchase. Western
Reserve reserves the right to eliminate the shares of any of the Portfolios of
the Fund and to substitute shares of another Portfolio of the Fund or of another
open-end registered investment company, if the shares of a Portfolio are no
longer available for investment, or if in Western Reserve's judgment further
investment in any Portfolio should become inappropriate in view of the purposes
of the Series Account. Western Reserve will not, however, substitute any shares
attributable to an Owner's interest in a Sub-Account without notice to and prior
approval of the Securities and Exchange Commission, to the extent required by
the Investment Company Act of 1940, as amended (the "1940 Act") or other
applicable law.

Western Reserve also reserves the right to establish additional
Sub-Accounts, each of which would invest in a new Portfolio of the Fund, or in
shares of another investment company, with a specified investment objective. New
Sub-Accounts may be established when, in the sole discretion of Western Reserve,
marketing, tax or investment conditions warrant, and any new Sub-Accounts will
be made available to existing Owners on a basis to be determined by Western
Reserve. Western Reserve may also eliminate one or more Sub-Accounts if, in its
sole discretion, marketing, tax or investment conditions warrant.

In the event of any such substitution or change, Western Reserve may by
appropriate endorsement make such changes in the Contracts and other annuity
contracts as may be necessary or appropriate to reflect such substitution or
change. If deemed by Western Reserve to be in the best interests of persons
having voting rights under the Contracts, the Series Account may be operated as
a management company under the 1940 Act, or, subject to any required approval,
it may be deregistered under that Act in the event such registration is no
longer required.

FINANCIAL STATEMENTS

The financial statements of Western Reserve which are included in this
Statement of Additional Information should be considered only as bearing on the
ability of Western Reserve to meet its obligations

6
<PAGE> 54

under the Contracts. They should not be considered as bearing on the investment
performance of the assets held in the Series Account.

Financial Statements for Western Reserve for the years ended December 31,
1995, 1994 and 1993 have been prepared on the basis of statutory accounting
principles, rather than generally accepted accounting principles ("GAAP").

INDEX TO FINANCIAL STATEMENTS

WRL SERIES ANNUITY ACCOUNT:

Report of Independent Accountants dated January 31, 1996

Statement of assets, liabilities and equity accounts at December 31, 1995

Statement of operations for the year ended December 31, 1995 and statement
of changes in equity accounts for the years ended December 31, 1995 and
1994

Notes to Financial Statements

WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO:

Report of Independent Auditors dated ,

Statutory-Basis Balance sheet at December 31, 1995 and 1994

Statutory-Basis Statement of operations for the years ended December 31,
1995, 1994 and 1993

Statutory-Basis Statement of capital and surplus for the years ended
December 31, 1995, 1994 and 1993

Statutory-Basis Statement of cash flows for the years ended December 31,
1995, 1994 and 1993

Notes to Statutory-Basis Financial Statements

Statutory-Basis Financial Statement Schedules

7
<PAGE> 55

WRL Series Annuity Account

PART C
OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements

The financial statements for the WRL Series Annuity Account
and for Western Reserve Life Assurance Co. of Ohio ("Western
Reserve") will be included in a future Amendment.
(b) Exhibits
(1) Copy of resolution of the Board of Directors of Western
Reserve establishing the Series Account. 1/

(2) Not Applicable.

(3) Distribution of Contracts

(a) Form of Master
Service and Distribution Compliance Agreement. 5/

(b) Form of Broker/Dealer Supervisory and Service Agreement. 2/

(4) (a) Specimen Flexible Payment Variable Accumulation
Deferred Annuity Contract. 4/

(b) Contract Loan Endorsements. 7/

(5) Application for Flexible Payment Variable Accumulation
Deferred Annuity Contract. 1/

(6) (a) Copy of Second Amended Articles of Incorporation of Western
Reserve .3/
(b) Copy of Amended Code of Regulations of Western Reserve. 5/

(7) Not Applicable.

(8) Not Applicable.

(9) Opinion and Consent of Norman W. Allen, Esq. as to
Legality of Securities Being Registered. 6/

C-1

<PAGE> 56

(10) (a) Written Consent of Sutherland, Asbill & Brennan. 9/
(b) Written Consent of Ernst & Young LLP. 9/
(c) Written Consent of Price Waterhouse LLP. 9/

(11) Not Applicable.

(12) Not Applicable.

(13) Schedules for Computation of Performance
Quotations 7/

(14) Powers of Attorney. 8/

_____________________________________

1/ This exhibit was previously filed on Form N-4 dated October 11, 1988
(File No. 33-24856) and is incorporated herein by reference.

2/ This exhibit was previously filed on Pre-Effective Amendment No. 1 to the
Form S-6 Registration Statement dated December 19, 1989 (File No.
33-31140) and is incorporated herein by reference.

3/ This exhibit was previously filed on Post-Effective Amendment No. 1 to
the Form N-4 Registration Statement dated May 1, 1989 (File No. 33-24856)
and is incorporated herein by reference.

4/ This exhibit was previously filed on Post-Effective Amendment No. 2 to
the Form N-4 Registration Statement dated May 1, 1990 (File No. 33-24856)
and is incorporated herein by reference.

5/ This exhibit was previously filed on Post-Effective Amendment No. 3 to
the Form N-4 Registration Statement dated March 1, 1991 (File No.
33-24856) and is incorporated herein by reference.

6/ This exhibit was previously filed on Post-Effective Amendment No. 4 to
the Form N-4 Registration Statement dated May 1, 1991 (File No. 33-24856)
and is incorporated herein by reference.

7/ This exhibit was previously filed on Post-Effective Amendment No. 7 to
the Form N-4 Registration Statement dated April 28, 1993 (File No.
33-24856) and is incorporated herein by reference.

8/ This exhibit was previously filed on Post-Effective Amendment No. 10 to
the Form N-4 Registration Statement dated April 25, 1995 (File No.
33-24856) and is incorporated herein by reference.

9/ To be filed by Amendment.

C-2

<PAGE> 57

Item 25.Directors and Officers of the Depositor

Principal Position and Offices
Name Business Address with Depositor
------------------------ ------------------------ ----------------------

John R. Kenney (1) Chairman of the Board,
Chief Executive Officer
and President

Patrick S. Baird 4333 Edgewood Rd. N.E. Director
Cedar Rapids, Iowa 52499

Lyman H. Treadway 30195 Chagrin Boulevard Director
Suite 210N
Cleveland, OH 44124

Jack E. Zimmerman 507 St. Michel Circle Director
Kettering, Ohio 45429

Alan M. Yaeger (1) Executive Vice

President, Actuary and
Chief Financial Officer

G. John Hurley (1) Executive Vice President

William H. Geiger (1) Senior Vice President,
Secretary and General
Counsel

Richard B. Franz, II (1) Senior Vice President

and Treasurer

Allan J. Hamilton (1) Vice President and
Controller

_________________________
(1) 201 Highland Avenue, Largo, Florida 34640

C-3

<PAGE> 58

ITEM 26. Persons Controlled By Or Under Common Control With The Depositor Or
Registrant.

VERENGING AEGON Netherlands Membership Association

AEGON n.v. Netherlands Corporation (55.19%)

AEGON Netherland n.v. Netherlands Corporation (100%)

AEGON Nevark Holding B.V. Netherlands Corporation (100%)

Groninger Financieringen B.V. Netherlands Corporation (100%)

AEGON International B.V. Netherlands Corporation (100%)

Voting Trust - (Trustees - K.J. Storm, William H. Foster, H.B. Van Wijk)

AEGON U.S. Holding Corporation (DE) (100%)
Short Hills Management Company (NJ) (100%)
CORPA Reinsurance Company (NY) (100%)
AEGON Management Company (IN) (100%)
RCC North America Inc. (DE) (100%)

AEGON USA, Inc. - Holding Co. (IA) (100%
First AUSA Life Insurance Company - Insurance Holding Co. (MD) (100%)
AUSA Life Insurance Company, Inc. - Insurance (NY) (100%)
Life Investors Insurance Company of America - Insurance (IA) (100%)
International Life Investors Insurance Company - Insurance (NY)
(100%)
Bankers United Life Assurance Company - Insurance (IA) (100%)
PFL Life Insurance Company - Insurance (IA) (100%)
Southwest Equity Life Insurance Company - Insurance (AZ) (100% Voting
Common)
Iowa Fidelity Life Insurance Company - Insurance (AZ) (100% Voting
Common)
Western Reserve Life Assurance Company of Ohio - Insurance (OH) (100%)
WRL Series Fund, Inc. - Mutual fund (MD)
Monumental Life Insurance Company - Insurance (MD) (100%)
Monumental General Casualty Company - Insurance (MD) (100%)
United Financial Services, Inc. - General Agency (MD) (100%)
Bankers Financial Life Insurance Company - Insurance (AZ)
The Whitestone Corporation - Insurance agency (MD) (100%)
Cadet Holding Corp. - Holding company (IA) (100%)
AUSA Holding Company - Holding company (MD) (100%)
Monumental General Insurance Group, Inc. - Holding company (MD) (100%)
Monumental General Administrators, Inc. - Provides management
services to unaffiliated third party administrator (MD) (100%)
Executive Management and Consultant Services, Inc. - Provides
actuarial consulting services (MD) (100%)
Monumental General Mass Marketing, Inc. - Marketing arm for sale
of mass marketed insurance coverages (MD) (100%)
AUSA Financial Markets, Inc. - Marketing (IA) (100%)
Universal Benefits Corporation - Third party administrator (IA) (100%)
Investors Warranty of America, Inc. - Provider of automobile extended
maintenance contracts (IA) (100%)
Massachusetts Fidelity Trust Company - Trust company (IA) (100%)

C-4

<PAGE> 59

Money Services, Inc. - Provides financial counseling for employees and
agents of affiliated companies (DE) (100%)
Zahorik Company, Inc. - Broker-dealer (CA) (100%)
ZCI, Inc. (AL) (100%)
Intersecurities, Inc. - Broker-dealer (DE) (100%)
ISI Insurance Agency Inc. & its Subsidiaries - Insurance agency (CA)
(100%)
Associated Mariner Financial Group, Inc. - Holding company management
services (MI) (100%)
Mariner Financial Services, Inc. - Broker/Dealer (MI) (100%)
Mariner/ISI Planning Corporation - Financial planning (MI) (100%)
Associated Mariner Agency, Inc. and its Subsidiaries- Insurance agency
(MI) (100%)
Mariner Mortgage Corporation - Mortgage origination (MI) (100%)
Idex Investor Services, Inc. - Shareholder services (FL) (100%)
Idex Management, Inc. - Investment advisor (DE) (50%)
Idex Fund - Mutual fund (MA)
Idex II Series Fund - Mutual fund (MA)
Idex Fund 3 - Mutual fund (MA)
Transunion Casualty Company - Insurance (IA) (100%)
AUSA Institutional Marketing Group, Inc. - Insurance agency (MN) (100%)
Colorado Annuity Agency, Inc. - Insurance agency (MN) (100%)
Diversified Investment Advisors, Inc. - Registered investment advisor
(DE) (100%)
Diversified Investors Securities Corporation - Broker-dealer
(DE) (100%)
AEGON USA Securities, Inc. - Broker-dealer (IA) (100%)
AEGON USA Managed Portfolios, Inc. - Mutual fund (MD)
American Forum for Fiscal Fitness, Inc. - Marketing (IA) (100%)
Supplemental Insurance Division, Inc. - Insurance (TN) (100%)
Creditor Resources, Inc. - Credit insurance (MI) (100%)
CRC Creditor Resources Canadian Dealer Network Inc. - Insurance agency
(Canada)
AEGON USA Investment Management, Inc. - Investment advisor (IA) (100%)
AEGON USA Realty Advisors, Inc. - Provides real estate administrative and
real estate investment services (IA) (100%)
Melson & Associates, Inc. - Real estate financial management
consulting (TX) (100%)
Landauer Realty Advisors, Inc. - Real estate counseling (IA)
(100%)
Landauer Associates, Inc. - Real estate counseling (DE) (100%)
AEGON USA Realty Management, Inc. - Real estate management (IA)
(100%)
Realty Information Systems, Inc. - Information systems for real
estate investment management (IA) (100%)
USP Real Estate Investment Trust - Real estate investment trust
(IA)
Cedar Income Fund Ltd. - Real estate investment trust (IA)
Forty-Six Hundred Limited Partnership - Limited partnership (IA)
JLW Financial Management Systems, Inc. - Provides management expertise and
administrative services for credit unions (IN) (60%)

Item 27. Number of Contractowners.

As of April 1, 1996, non-qualified contracts and
qualified contracts were In Force.

C-5

<PAGE> 60
Item 28. Indemnification

Provisions exist under the Ohio General Corporation Law, the Second
Amended Articles of Incorporation of Western Reserve and the Amended
Code of Regulations of Western Reserve whereby Western Reserve may
indemnify certain persons against certain payments incurred by such
persons. The following excerpts contain the substance of these
provisions.

Ohio General Corporation Law

SECTION 1701.13 AUTHORITY OF CORPORATION.

(E)(1) A corporation may indemnify or agree to indemnify any person who
was or is a party or is threatened to be made a party, to any threatened,
pending, or completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative, other than an action by or in the right of
the corporation, by reason of the fact that he is or was a director, officer,
employee, or agent of the corporation, or is or was serving at the request of
the corporation as a director, trustee, officer, employee, or agent of another
corporation (including a subsidiary of this corporation), domestic or foreign,
nonprofit or for profit, partnership, joint venture, trust, or other
enterprise, against expenses, including attorneys' fees, judgments, fines, and
amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit, or proceeding if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit, or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendre or its equivalent, shall not, of
itself create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and with respect to any criminal action or
proceeding, he had reasonable cause to believe that his conduct was unlawful.

(2) A corporation may indemnify or agree to indemnify any person who
was or is a party, or is threatened to be made a party to any threatened,
pending, or completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that he is or was a
director, officer, employee, or agent of the corporation, or is or was serving
at the request of the corporation as a director, trustee, officer, employee, or
agent of another corporation, domestic or foreign, nonprofit or for profit,
partnership, joint venture, trust, or other enterprise, against expenses,
including attorneys' fees, actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, except that no indemnification shall be
made in respect of any of the following:

(a) Any claim, issue, or matter as to which such person shall have
been adjudged to be liable for negligence or misconduct in the performance of
his duty to the corporation unless, and only to the extent that the court of
common pleas, or the court in which such action or suit was brought determines
upon application that, despite the adjudication of liability, but in view of
all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses as the court of common pleas or such
other court shall deem proper;

C-6

<PAGE> 61

(b) Any action or suit in which the only liability asserted against a
director is pursuant to section 1701.95 of the Revised Code.

(3) To the extent that a director, trustee, officer, employee, or agent
has been successful on the merits or otherwise in defense of any action, suit,
or proceeding referred to in divisions (E)(1) and (2) of this section, or in
defense of any claim, issue, or matter therein, he shall be indemnified against
expenses, including attorneys' fees, actually and reasonably incurred by him in
connection therewith.

(4) Any indemnification under divisions (E)(1) and (2) of this section,
unless ordered by a court, shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the director,
trustee, officer, employee, or agent is proper in the circumstances because he
has met the applicable standard of conduct set forth in divisions (E)(1) and
(2) of this section. Such determination shall be made as follows:

(a) By a majority vote of a quorum consisting of directors of the
indemnifying corporation who were not and are not parties to or threatened with
any such action, suit, or proceeding;

(b) If the quorum described in division (E)(4)(a) of this section is
not obtainable or if a majority vote of a quorum of disinterested directors so
directs, in a written opinion by independent legal counsel other than an
attorney, or a firm having associated with it an attorney, who has been
retained by or who has performed services for the corporation, or any person to
be indemnified within the past five years;

(d) By the court of common pleas or the court in which such action,
suit, or proceeding was brought.

Any determination made by the disinterested directors under division
(E)(4)(a) or by independent legal counsel under division (E)(4)(b) of this
section shall be promptly communicated to the person who threatened or brought
the action or suit by or in the right of the corporation under division (E)(2)
of this section, and within ten days after receipt of such notification, such
person shall have the right to petition the court of common pleas or the court
in which such action or suit was brought to review the reasonableness of such
determination.

(5)(a) Unless at the time of a director's act or omission that is the
subject of an action, suit or proceeding referred to in divisions (E)(1) and
(2) of this section, the articles or the regulations of a corporation state by
specific reference to this division that the provisions of this division do not
apply to the corporation and unless the only liability asserted against a
director in an action, suit, or proceeding referred to in divisions (E)(1) and
(2) of this section is pursuant to section 1701.95 of the Revised Code,
expenses, including attorney's fees, incurred by a director in defending the
action, suit, or proceeding shall be paid by the corporation as they are
incurred, in advance of the final disposition of the action, suit, or
proceeding upon receipt of an undertaking by or on behalf of the director in
which he agrees to do both of the following:

(i) Repay such amount if it is proved by clear and convincing
evidence in a court of competent jurisdiction that his action or failure to act
involved an act or omission undertaken with deliberate intent to cause injury
to the corporation or undertaken with reckless disregard for the best interests
of the corporation;

C-7

<PAGE> 62

(ii) Reasonably cooperate with the corporation concerning the
action, suit, or proceeding.

(b) Expenses, including attorneys' fees incurred by a director,
trustee, officer, employee, or agent in defending any action, suit, or
proceeding referred to in divisions (E)(1) and (2) of this section, may be paid
by the corporation as they are incurred, in advance of the final disposition of
the action, suit, or proceeding as authorized by the directors in the specific
case upon receipt of an undertaking by or on behalf of the director, trustee,
officer, employee, or agent to repay such amount, if it ultimately is
determined that he is entitled to be indemnified by the corporation.

(6) The indemnification authorized by this section shall not be
exclusive of, and shall be in addition to, any other rights granted to those
seeking indemnification under the articles or the regulations or any agreement,
vote of shareholders or disinterested directors, or otherwise, both as to
action in his official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has ceased to be a
director, trustee, officer, employee, or agent and shall inure to the benefit
of the heirs, executors, and administrators of such a person.

(7) A corporation may purchase and maintain insurance or furnish
similar protection, including but not limited to trust funds, letters of
credit, or self-insurance on behalf of or for any person who is or was a
director, officer, employee, or agent of the corporation, or is or was serving
at the request of the corporation as a director, trustee, officer, employee, or
agent of another corporation, domestic or foreign, nonprofit or for profit,
partnership, joint venture, trust, or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising out
of his status as such, whether or not the corporation would have the power to
indemnify him against such liability under this section. Insurance may be
purchased from or maintained with a person in which the corporation has a
financial interest.

(8) The authority of a corporation to indemnify persons pursuant to
divisions (E)(1) and (2) of this section does not limit the payment of expenses
as they are incurred, indemnification, insurance, or other protection that may
be provided pursuant to divisions (E)(5), (6), and (7) of this section.
Divisions (E)(1) and (2) of this section do not create any obligation to repay
or return payments made by the corporation pursuant to divisions (E)(5), (6),
or (7).

(9) As used in this division, references to "corporation" include all
constituent corporations in a consolidation or merger and the new or surviving
corporation, so that any person who is or was a director, officer, employee, or
agent of such a constituent corporation, or is or was serving at the request of
such constituent corporation as a director, trustee, officer, employee or agent
of another corporation, domestic or foreign, nonprofit or for profit,
partnership, joint venture, trust, or other enterprise, shall stand in the same
position under this section with respect to the new or surviving corporation as
he would if he had served the new or surviving corporation in the same
capacity.

Second Amended Articles of Incorporation of Western Reserve

ARTICLE EIGHTH

EIGHTH: (1) The corporation may indemnify or agree to indemnify any
person who was or is a party or is threatened to be made a party, to any
threatened, pending, or completed action, suit, or proceeding, whether civil,
criminal, administrative, or investigative, other than an action by or in the
right of the corporation, by reason of the fact that he is or was a director,
officer, employee, or agent of the corporation, or is or was serving at the
request of the corporation as a director, trustee, officer, employee, or agent
of another corporation (including a subsidiary of this corporation), domestic
or foreign, nonprofit or for profit, partnership, joint venture, trust, or
other enterprise, against expenses, including attorneys' fees, judgments,
fines, and amounts paid in settlement

C-8

<PAGE> 63
actually and reasonably incurred by him in connection with such action, suit,
or proceeding if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the corporation, and with
respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. The termination of any action, suit, or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendre or its equivalent, shall not, of itself create a presumption that the
person did not act in good faith and in a manner which he reasonably believed
to be in or not opposed to the best interests of the corporation, and with
respect to any criminal action or proceeding, he had reasonable cause to
believe that his conduct was unlawful.

(2) The corporation may indemnify or agree to indemnify any person who
was or is a party, or is threatened to be made a party to any threatened,
pending, or completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that he is or was a
director, officer, employee, or agent of the corporation, or is or was serving
at the request of the corporation as a director, trustee, officer, employee, or
agent of another corporation (including a subsidiary of this corporation),
domestic or foreign, nonprofit or for profit, partnership, joint venture,
trust, or other enterprise against expenses, including attorneys' fees,
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification shall be made in respect of any
claim, issue, or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
corporation unless, and only to the extent that the court of common pleas, or
the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability, but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses as the court of common pleas or such other court
shall deem proper.

(3) To the extent that a director, trustee, officer, employee, or agent
has been successful on the merits or otherwise in defense of any action, suit,
or proceeding referred to in sections (1) and (2) of this article, or in
defense of any claim, issue, or matter therein, he shall be indemnified against
expenses, including attorneys' fees, actually and reasonably incurred by him in
connection therewith.

(4) Any indemnification under sections (1) and (2) of this article,
unless ordered by a court, shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the director,
trustee, officer, employee, or agent is proper in the circumstances because he
has met the applicable standard of conduct set forth in sections (1) and (2) of
this article. Such determination shall be made (a) by a majority vote of a
quorum consisting of directors of the indemnifying corporation who were not and
are not parties to or threatened with any such action, suit, or proceeding, or
(b) if such a quorum is not obtainable or if a majority vote of a quorum of
disinterested directors so directs, in a written opinion by independent legal
counsel other than an attorney, or a firm having associated with it an
attorney, who has been retained by or who has performed services for the
corporation, or any person to be indemnified within the past five years, or (c)
by the shareholders, or (d) by the court of common pleas or the court in which
such action, suit, or proceeding was brought. Any determination made by the
disinterested directors under section (4)(a) or by independent legal counsel
under section (4)(b) of this article shall be promptly communicated to the
person who threatened or brought the action or suit by or in the right of the
corporation under section (2) of this article, and within ten days after
receipt of such notification, such person shall have the right to petition the
court of common pleas or the court in which such action or suit was brought to
review the reasonableness of such determination.

C-9

<PAGE> 64

(5) Expenses, including attorneys' fees incurred in defending any
action, suit, or proceeding referred to in sections (1) and (2) of this
article, may be paid by the corporation in advance of the final disposition of
such action, suit, or proceeding as authorized by the directors in the specific
case upon receipt of a written undertaking by or on behalf of the director,
trustee, officer, employee, or agent to repay such amount, unless it shall
ultimately be determined that he is entitled to be indemnified by the
corporation as authorized in this article. If a majority vote of a quorum of
disinterested directors so directs by resolution, said written undertaking need
not be submitted to the corporation. Such a determination that a written
undertaking need not be submitted to the corporation shall in no way affect the
entitlement of indemnification as authorized by this article.

(6) The indemnification provided by this article shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under the articles or the regulations or any agreement, vote of
shareholders or disinterested directors, or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
trustee, officer, employee, or agent and shall inure to the benefit of the
heirs, executors, and administrators of such a person.

(7) The Corporation may purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee, or agent of the
corporation, or is or was serving at the request of the corporation as a
director, trustee, officer, employee, or agent of another corporation
(including a subsidiary of this corporation), domestic or foreign, nonprofit or
for profit, partnership, joint venture, trust, or other enterprise against any
liability asserted against him and incurred by him in any such capacity or
arising out of his status as such, whether or not the corporation would have
the power to indemnify him against such liability under this section.

(8) As used in this section, references to "the corporation" include
all constituent corporations in a consolidation or merger and the new or
surviving corporation, so that any person who is or was a director, officer,
employee, or agent of such a constituent corporation, or is or was serving at
the request of such constituent corporation as a director, trustee, officer,
employee or agent of another corporation (including a subsidiary of this
corporation), domestic or foreign, nonprofit or for profit, partnership, joint
venture, trust, or other enterprise shall stand in the same position under this
article with respect to the new or surviving corporation as he would if he had
served the new or surviving corporation in the same capacity.

(9) The foregoing provisions of this article do not apply to any
proceeding against any trustee, investment manager or other fiduciary of an
employee benefit plan in such person's capacity as such, even though such
person may also be an agent of this corporation. The corporation may indemnify
such named fiduciaries of its employee benefit plans against all costs and
expenses, judgments, fines, settlements or other amounts actually and
reasonably incurred by or imposed upon said named fiduciary in connection with
or arising out of any claim, demand, action, suit or proceeding in which the
named fiduciary may be made a party by reason of being or having been a named
fiduciary, to the same extent it indemnifies an agent of the corporation. To
the extent that the corporation does not have the direct legal power to
indemnify, the corporation may contract with the named fiduciaries of its
employee benefit plans to indemnify them to the same extent as noted above.
The corporation may purchase and maintain insurance on behalf of such named
fiduciary covering any liability to the same extent that it contracts to
indemnify.

C-10

<PAGE> 65
Amended Code of Regulations of Western Reserve

ARTICLE V

Indemnification of Directors and Officers

Each Director, officer and member of a committee of this Corporation,
and any person who may have served at the request of this Corporation as a
Director, officer or member of a committee of any other corporation in which
this Corporation owns shares of capital stock or of which this Corporation is a
creditor (and his heirs, executors and administrators) shall be indemnified by
the Corporation against all expenses, costs, judgments, decrees, fines or
penalties as provided by, and to the extent allowed by, Article Eighth of the
Corporation's Articles of Incorporation, as amended.

Rule 484 Undertaking

Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling persons of
Western Reserve pursuant to the foregoing provisions or otherwise, Western
Reserve has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by Western
Reserve of expenses incurred or paid by a director, officer or controlling
person of Western Reserve in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, Western Reserve will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of
whether such indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.

Item 29. Principal Underwriter

(a) InterSecurities, Inc. ("ISI"), formerly known
as Idex Distributors, Inc. and before that, as Pioneer
Western Distributors, Inc., currently distributes
securities of WRL Series Life Account and the mutual funds
managed by Idex Management, Inc., an affiliate of ISI.

(b) Directors and Officers of ISI

<TABLE>
Principal Position and Offices
Name Business Address with Underwriter
-------------- ------------------------ ---------------------
<S> <C> <C>
John R. Kenney (1) Chairman of the Board

J. Will Paull 17199 N. Laurel Park Dr. Director
Livonia, MI 48152-3908

</TABLE>

- --------------------------
(1) 201 Highland Avenue, Largo, Florida 34640

C-11
<PAGE> 66

<TABLE>
<CAPTION>
<S> <C> <C>
G. John Hurley (1) Director, President
and Chief Executive
Officer

William H. Geiger (1) Director and Secretary

Thomas R. Moriarty (1) Senior Vice President

Donald L. Cudney (1) Senior Vice President

Richard B. Franz, II (1) Treasurer
</TABLE>

- --------------------------
(1) 201 Highland Avenue, Largo, Florida 34640

Not Applicable

Item 30. Location of Accounts and Records

All accounts, books, or other documents required to be maintained
by Section 31(a) of the 1940 Act and the rules promulgated
thereunder are maintained by the Registrant through Western
Reserve, 201 Highland Avenue, Largo, Florida 34640.

Item 31. Management Services

Not Applicable

Item 32. Undertakings

Not Applicable

Item 33. Section 403(b)(11) Representation

Registrant represents that in connection with its offering of
Contracts as funding vehicles for retirement plans meeting the
requirements of Section 403(b) of the Internal Revenue Code of
1986, Registrant is relying on the no-action letter issued by the
Office of Insurance Products and Legal Compliance, Division of
Investment Management, to the American Council of Life Insurance
dated November 28, 1988 (Ref. No. IP-6-88), and that the
provisions of paragraphs (1) - (4) thereof have been complied
with.

Texas ORP Representation

The Registrant intends to offer Contracts to participants in the
Texas Optional Retirement Program. In connection with that
offering, the Registrant is relying on Rule 6c-7 under the
Investment Company Act of 1940 and is complying with, or shall
comply with, paragraphs (a) - (d) of that Rule.

C-12

<PAGE> 67
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, as amended, the Registrant has duly caused this
Post-Effective Amendment No. 11 to its Registration Statement to be signed on
its behalf by the undersigned, thereunder duly authorized, in the City of
Largo, State of Florida, on this 26th day of February, 1996.

WRL SERIES ANNUITY ACCOUNT
(Registrant)

By: /s/ John R. Kenney
--------------------------------
John R. Kenney, Chairman of the
Board, President and Chief
Executive Officer of Western
Reserve Life Assurance Co. of Ohio

WESTERN RESERVE LIFE ASSURANCE
CO. OF OHIO
(Depositor)

By: /s/ John R. Kenney
--------------------------------
John R. Kenney, Chairman of
the Board, President and Chief
Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 11 to this Registration Statement has been signed
below by the following persons in the capacities and on the dates indicated:

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

/s/ John R. Kenney Chairman of the Board, February 26, 1996
----------------------- President and Chief
John R. Kenney Executive Officer
(Principal Executive
Officer)

/s/ Richard B. Franz II Senior Vice President February 26, 1996
----------------------- and Treasurer
Richard B. Franz II

/s/ Alan M. Yaeger Executive Vice President, February 26, 1996
----------------------- Chief Financial Officer &
Alan M. Yaeger Actuary

</TABLE>

<PAGE> 68

/s/ Allan J. Hamilton Vice President and February 26, 1996
----------------------- Controller
Allan J. Hamilton

/s/ Patrick S. Baird Director February 26, 1996
-----------------------
Patrick S. Baird */

/s/ Lyman H. Treadway Director February 26, 1996
-----------------------
Lyman H. Treadway */

/s/Jack E. Zimmerman Director February 26, 1996
-----------------------
Jack E. Zimmerman */

*/ /s/ Thomas E. Pierpan
- -----------------------------
Signed by Thomas E. Pierpan
As Attorney-in-fact