CANADA LIFE OF NEW YORK VARIABLE ANNUITY ACCOUNT 1, 485APOS, 1997-02-28

CANADA LIFE OF NEW YORK VARIABLE ANNUITY ACCOUNT 1
485APOS, 1997-02-28

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<PAGE> 1

As filed with the Securities and Exchange Commission on February 28, 1997.
------------------

Registration No. 33-32199
811-5961

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Securities and Exchange Commission
Washington, D.C. 20549

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FORM N-4

Registration Statement Under the Securities Act of 1933
Pre-Effective Amendment No.
Post-Effective Amendment No.10
and/or
Registration Statement Under The Investment Company Act Of 1940
Amendment No.11

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CANADA LIFE OF NEW YORK VARIABLE ANNUITY ACCOUNT 1
(Exact Name of Registrant)

CANADA LIFE INSURANCE COMPANY OF NEW YORK
(Name of Depositor)

500 Mamaroneck Avenue
Harrison, New York 10528
(Address of Depositor's Principal Executive Office)
Depositor's Telephone Number: (914) 835-8400

Paul R. McCadam
500 Mamaroneck Avenue
Harrison, New York, 10528
(Name and Address of Agent for Service)

Copy to:
Stephen E. Roth, Esquire
Sutherland, Asbill, & Brennan
1275 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-2404

It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b)
----

on _____ pursuant to paragraph (b)
----

60 days after filing pursuant to paragraph (a)(i)
----

x on May 1, 1997 pursuant to paragraph (a)(i)
----

75 days after filing pursuant to paragraph (a)(ii)
----
on _____ pursuant to paragraph (a)(ii) of Rule 485

If appropriate check the following box:

---- this Post-Effective Amendment designates a new
effective date for a new effective date for a
previously filed Post-Effective Amendment.

Pursuant to Rule 24f-2(a)(1) under the Investment company Act of 1940, the
Registrant has registered an indefinite number of shares. The Registrant will
file a Rule 24f-2 Notice before June 30, 1997 for its most recent fiscal year
ended December 31, 1996.

<PAGE> 2

CROSS REFERENCE SHEET
Pursuant to Rule 481(a)

Showing Location In Part A (Prospectus) And
Part B (Statement of Additional Information) of Registration
Statement of Information Required By Form N-4

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PART A

ITEM OF FORM N-4 PROSPECTUS CAPTION
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1. Cover Page Cover Page

2. Definitions DEFINITIONS

3. Synopsis SUMMARY

4. Condensed Financial Information CONDENSED FINANCIAL INFORMATION

5. General Description of Registrant,
Depositor and Portfolio Companies
a. Depositor THE COMPANY
b. Registrant The Variable Account
c. Portfolio Company The Fund
d. Fund Prospectus The Fund
e. Voting Rights VOTING RIGHTS
f. Administrators N/A

6. Deductions and Expenses Charges Against the Policy, Variable Account, & Fund
a. General Charges Against the Policy, Variable Account, & Fund
b. Sales Load % Charges Against the Policy, Variable Account, & Fund -
Surrender Charge
c. Special Purchase Plan N/A
d. Commissions DISTRIBUTION OF POLICIES
e. Expenses - Registrant Charges Against the Policy, Variable Account, & Fund
f. Fund Expenses Charges Against the Policy, Variable Account, & Fund -
Other Charges Including Investment Management Fees
g. Organizational Expenses N/A

7. General Description of Variable
Annuity Contracts
a. Persons With Rights DEFINITIONS - Owner, Joint Owner; Payment of Proceeds; Payment
Options; Partial Withdrawals; Other Policy Provisions; VOTING RIGHTS
b. (i) Allocation of Premium Payments Premiums
(ii) Transfers Transfers; Payment of Benefits, Partial Withdrawals, Cash
Surrenders, & Transfers - Postponement
(iii) Exchanges N/A

c. Changes Reserved Rights
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d. Inquiries SUMMARY - Questions

8. Annuity Period Payment Options

9. Death Benefit Payment of Proceeds; Payment of Benefits, Partial Withdrawals,
Cash Surrenders, & Transfers - Postponement; Payment Options

10. Purchases and Contract Value

a. Purchases Premiums

b. Valuation Variable Account Value

c. Daily Calculation Variable Account Value

d. Underwriter DISTRIBUTION OF POLICIES

11. Redemptions

a. - By Owners Payment of Proceeds - Proceeds on Surrender; Partial
Withdrawals; Payment of Benefits, Partial Withdrawals, Cash
Surrenders, & Transfers - Postponement

- By Annuitant Payment of Proceeds - Proceeds on Death of Last Surviving
Annuitant Before Annuity Date or Maturity Date; Payment
Options

b. Texas ORP N/A

c. Check Delay Payment of Benefits, Partial Withdrawals, Cash Surrenders, &
Transfers - Postponement

d. Lapse Premiums - Termination

e. Free Look Ten Day Right to Examine the Policy

12. Taxes Charges Against the Policy, Variable Account, & Fund - Taxes;
FEDERAL TAX STATUS

13. Legal Proceedings LEGAL PROCEEDINGS

14. Table of Contents of the Statement of STATEMENT OF ADDITIONAL INFORMATION TABLE OF CONTENTS
Additional Information

PART B

ITEM OF FORM N-4 STATEMENT OF ADDITIONAL INFORMATION CAPTION
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15. Cover Page Cover Page

16. Table of Contents STATEMENT OF ADDITIONAL INFORMATION TABLE OF CONTENTS

17. General Information and History See Prospectus - THE COMPANY; THE VARIABLE ACCOUNT AND THE FUND

18. Services

a. Fees and Expenses of Registrant N/A

b. Management Contract N/A

c. Custodian SAFEKEEPING OF ACCOUNT ASSETS
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d. Independent Public Accountant EXPERTS

e. Assets of Registrant SAFEKEEPING OF ACCOUNT ASSETS

f. Affiliated Persons N/A

g. Principal Underwriter See Prospectus - DISTRIBUTION OF POLICIES

19. Purchase of Securities Being Offered See Prospectus - DISTRIBUTION OF POLICIES

20. Underwriter See Prospectus - DISTRIBUTION OF POLICIES

21. Calculation of Performance Data CALCULATION OF YIELDS AND TOTAL RETURNS

22. Annuity Payments See Prospectus - Payment Options

23. Financial Statements FINANCIAL STATEMENTS
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<PAGE> 5

PART A

INFORMATION REQUIRED TO BE IN THE PROSPECTUS

<PAGE> 6

CANADA LIFE INSURANCE COMPANY OF NEW YORK
HOME OFFICE: 500 MAMARONECK AVENUE, HARRISON, NEW YORK 10528
(914) 835-8400

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PROSPECTUS
VARIABLE ANNUITY ACCOUNT 1
SINGLE PREMIUM VARIABLE DEFERRED ANNUITY POLICY

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This Prospectus describes the single premium variable deferred annuity policy
(the "policy") offered by Canada Life Insurance Company of New York ("we,"
"our," or "us"), a stock life insurance company domiciled in New York which is a
wholly-owned subsidiary of The Canada Life Assurance Company. The policy is
designed for use in connection with retirement plans which may or may not
qualify for special federal income tax treatment. The owner ("you") may allocate
net premiums when paid and policy value among the twenty-two sub-accounts of the
Canada Life of New York Variable Annuity Account 1 (the "Variable Account") and
the Fixed Account or both. The Fixed Account guarantees a minimum fixed rate of
interest for specified periods of time, currently one year, three years, five
years, seven years and ten years (each a "Guarantee Period"). The Fixed Account
is part of our general account and may not be available in all states.

Assets of each sub-account are invested in a corresponding portfolio of Canada
Life of America Series Fund, Inc. ("CLASF"); Fidelity Investments Variable
Insurance Products Fund ("Fidelity VIP"); Fidelity Investments Variable
Insurance Products Fund II ("Fidelity VIP II"); Seligman Portfolios, Inc.
("Seligman"); Dreyfus Variable Investment Fund ("Dreyfus"); The Dreyfus Socially
Responsible Growth Fund, Inc. ("Dreyfus Socially Responsible"); The Alger
American Fund ("Alger American"); The Montgomery Funds III ("Montgomery"); or
Berger Institutional Products Trust ("Berger Trust"). The policy value prior to
the annuity date, except for amounts in the Fixed Account, will vary according
to the investment performance of the portfolio of the Funds in which your
elected sub-accounts are invested. You bear the entire investment risk on
amounts allocated to the Variable Account. Except in the case of the one year
Guarantee Period, policy value and other values provided by this policy, when
based on the Fixed Account, are subject to a Market Value Adjustment, the
operation of which may result in downward adjustments of amounts withdrawn,
surrendered, or transferred, but net premiums and policy value allocated to the
Fixed Account are guaranteed to earn interest at an annual rate of at least
three percent.

This Prospectus sets forth basic information about the policy, the Variable
Account, and the Fixed Account that a prospective investor ought to know before
investing. Additional information about the policy and the Variable Account is
contained in the Statement of Additional Information, which has been filed with
the Securities and Exchange Commission. The Statement of Additional Information
is dated the same date as this Prospectus and is incorporated herein by
reference. The Table of Contents for the Statement of Additional Information is
on page __ of this Prospectus. You may obtain a copy of the Statement of
Additional Information free of charge by writing or calling us at the address or
phone number shown above.

PLEASE READ THIS PROSPECTUS CAREFULLY AND KEEP IT FOR FUTURE REFERENCE. THIS
PROSPECTUS MUST BE ACCOMPANIED BY A CURRENT PROSPECTUS FOR THE FUND.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE POLICIES AND SHARES OF THE FUNDS ARE NOT INSURED BY THE FDIC OR ANY OTHER
AGENCY. THEY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK AND ARE
NOT BANK GUARANTEED. THEY ARE SUBJECT TO MARKET FLUCTUATION,

<PAGE> 7

REINVESTMENT RISK AND POSSIBLE LOSS OF PRINCIPAL INVESTED.

*Policies issued prior to January 26, 1996 were issued as flexible premium
variable deferred annuity policies. Additional premium payments may be made
under such policies.

The date of this Prospectus is May 1, 1997.

<PAGE> 8

<PAGE> 9

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TABLE OF CONTENTS
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PAGE
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DEFINITIONS...................................................
SUMMARY.......................................................
TABLE OF EXPENSES.............................................
CONDENSED FINANCIAL INFORMATION...............................
THE COMPANY...................................................
THE VARIABLE ACCOUNT AND THE FUNDS............................
The Variable Account.....................................
The Funds................................................
Money Market.........................................
Managed..............................................
Bond.................................................
Value Equity.........................................
International Equity.................................
Capital..............................................
Fidelity VIP Growth..................................
Fidelity VIP High Income.............................
Fidelity VIP Overseas................................
Fidelity VIP II Asset Manager.......................
Fidelity VIP II Index 500............................
Seligman Communications and Information..............
Seligman Frontier....................................
Dreyfus Growth and Income............................
Dreyfus Socially Responsible Growth..................
Alger American Small Capitalization..................
Alger American Growth................................

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Alger American MidCap Growth.........................
Alger American Leveraged AllCap......................
Montgomery Emerging Markets..........................
Montgomery Growth....................................
Berger Institutional Product Trust...................
Reserved Rights.........................................
Change In Investment Policy..............................
The Fixed Account........................................
Guarantee Amount...............................
Guarantee Periods..............................
Market Value Adjustment........................
DESCRIPTION OF ANNUITY POLICY.................................
Ten Day Right To Examine Policy..........................
Premiums.................................................
Initial Premium......................................
Additional Premiums..................................
Wire Transmittal Privilege...........................
Electronic Data Transmission
of Application Information.........................
Net Premium Allocation...............................
Termination..........................................
Variable Account Value...................................
Units................................................
Unit Value...........................................
Net Investment Factor................................
Transfers................................................
Transfer Privilege...................................
Telephone Transfer Privilege.........................
Dollar Cost Averaging Privilege......................
Restrictions on Transfers from Fixed Account.........
Transfer Processing Fee..............................
Payment of Proceeds......................................
Proceeds.............................................
Proceeds on Annuity Date or Maturity Date............
Proceeds on Surrender................................
Proceeds on Death of Last Surviving Annuitant Before
Annuity Date or Maturity Date(The Death Benefit)...
Proceeds on Death of Any Owner Before
or After Annuity Date or Maturity Date.............
Interest on Proceeds.................................
Partial Withdrawals......................................
Systematic Withdrawal Privilege......................
Portfolio Rebalancing....................................

Loans....................................................
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PAGE
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Payment of Benefits, Partial Withdrawals,
Cash Surrenders and Transfers - Postponement.........
Charges Against the Policy, Variable
Account, and Funds...................................
Surrender Charge.....................................
Policy Administration Charge.........................
Daily Administration Fee.............................
Transfer Processing Fee...............................
Annualized Mortality and Expense Risk Charge..........
Waiver of Surrender Charges...........................
Reduction or Elimination of Surrender Charges.........
Reduction or Elimination of Policy Administration Charge
Taxes ...............................................
Other Charges Including Investment Advisory Fees.....
Payment Options..........................................
Election of Options...................................
Description of Payment Options........................
Payment Dates.........................................
Age and Survival of Payee.............................
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Death of Payee........................................
Betterment of Income..................................

Other Policy Provisions..................................
Owner or Joint Owner..................................
Beneficiary...........................................
Written Notice........................................
Periodic Reports......................................
Assignment............................................
Modification..........................................
YIELDS AND TOTAL RETURNS......................................
TAX DEFERRAL..................................................
FEDERAL TAX STATUS............................................
Introduction.............................................
The Company's Tax Status.................................
Tax Status of the Policy.................................
Diversification Requirements..........................
Required Distributions................................
Taxation of Annuities....................................
In General............................................
Withdrawals/Distributions.............................
Annuity Payments......................................
Taxation of Death Benefit Proceeds....................
Penalty Tax on Certain Withdrawals....................
Transfers, Assignments, or Exchanges of a Policy.........
Withholding..............................................
Multiple Policies........................................
Possible Tax Changes.....................................
Taxation of Qualified Plans..............................
Individual Retirement Annuities and
Simplified Employee Pensions (SEP/IRAs)...........
Minimum Distribution Requirements ("MDR") for IRA's...
Corporate and Self-Employed (H.R.10 and
Keogh) Pension and Profit-Sharing Plans...........
Deferred Compensation Plans...........................
Tax-Sheltered Annuity Plans...........................
Other Tax Consequences...................................
DISTRIBUTION OF POLICIES......................................
LEGAL PROCEEDINGS.............................................
VOTING RIGHTS.................................................
FINANCIAL STATEMENTS..........................................
STATEMENT OF ADDITIONAL INFORMATION - TABLE
OF CONTENTS...............................................
</TABLE>

DEFINITIONS

ANNUITANT: Any natural person whose life is used to determine the duration of
any payments made under a payment option involving life contingencies. The term
annuitant also includes any co-annuitant, a term used to refer to more than one
annuitant.

<PAGE> 12

ANNUITY DATE: The date when the policy value will be applied under an annuity
payment option.

BENEFICIARY: The person to whom we will pay the proceeds payable on your death
or the death of the annuitant.

CASH SURRENDER VALUE: The policy value less: 1) any applicable surrender charge;
2) the policy administration charge; and 3) any applicable market value
adjustment.

CO-ANNUITANT: A term used solely for the purpose of referring to more than one
annuitant. There is no other distinction between the terms annuitant and
co-annuitant. A co-annuitant: 1) is allowed but not required under a
non-qualified policy and 2) is not allowed under a qualified policy and any
designation of a co-annuitant under a qualified policy will be of no effect .

COMPANY: Canada Life Insurance Company of New York.

DUE PROOF OF DEATH: Proof of death that is satisfactory to us. Such proof may
consist of: 1) a certified copy of the death certificate; and/or 2) a certified
copy of the decree of a court of competent jurisdiction as to the finding of
death.

EFFECTIVE DATE: The date we accept your application and apply your initial
premium.

FIXED ACCOUNT: Part of our general account that provides a Guaranteed Interest
Rate for a specified Guarantee Period. This account is not part of and does not
depend on the investment performance of the Variable Account.

FUNDS: The Canada Life of America Series Fund, Inc.; Fidelity Investments
Variable Insurance Products Fund; Fidelity Investments Variable Insurance
Products Fund II; Seligman Portfolios, Inc.; Dreyfus Variable Investment Fund;
The Dreyfus Socially Responsible Growth Fund, Inc.; The Alger American Fund; The
Montgomery Funds III; and the Berger Trust.

GUARANTEE AMOUNT: Before the Annuity Date, the amount equal to that part of any
net premium allocated to or policy value transferred to the Fixed Account for a
designated Guarantee Period with a particular expiration date (including
interest thereon) less any withdrawals (including any applicable surrender
charges, any applicable Market Value Adjustment and any applicable premium tax
charge) or transfers (including any applicable Market Value Adjustments)
therefrom.

GUARANTEE PERIOD: A specific number of years for which we agree to credit a
particular effective annual rate of interest. We currently offer Guarantee
Periods of one, three, five, seven and ten years.

GUARANTEED INTEREST RATE: The applicable effective annual rate of interest that
we will pay on a Guarantee Amount. The Guaranteed Interest Rate will be at least
three percent per year.

HOME OFFICE: Our office at the address shown on page 1 of the Prospectus. This
is our mailing address.

<PAGE> 13

JOINT OWNER: A term used solely for the purpose of referring to more than one
owner. There is no other distinction between the terms owner and joint owner.

LAST SURVIVING ANNUITANT: The annuitant or co-annuitant that survives the
other.

MARKET VALUE ADJUSTMENT: A positive or negative adjustment that may apply to any
portion of a Guarantee Amount upon the surrender, withdrawal, or transfer of
such portion of the Guarantee Amount before the expiration of the Guarantee
Period applicable to that Guarantee Amount.

MATURITY DATE: The first day of the month after any annuitant's 85th birthday
(90th birthday pending regulatory approval).

NET PREMIUMS: The premium paid less any premium tax deducted in the year the
premium is paid.

NONQUALIFIED POLICY: A policy that is not a "qualified" policy under the
Internal Revenue Code of 1986, as amended (the "Code").See "FEDERAL TAX STATUS"
on page__.

OWNER: The owner is entitled to exercise all rights and privileges provided the
owner in the policy. The term owner also includes any joint owner.

PAC: Pre-authorized check, including electronic fund transfers.

POLICY: One of the flexible premium variable deferred annuity policies offered
by this Prospectus.

POLICY VALUE: The sum of the Variable Account value and the Fixed Account value.

POLICY DATE, YEARS, MONTHS, and ANNIVERSARIES: Are measured from the policy date
shown in the "Policy Details" of the policy.

QUALIFIED POLICY: A policy that is issued in connection with plans that receive
special federal income tax treatment under sections 401, 403(a), 403(b), 408 or
457 of the Code. See "FEDERAL TAX STATUS" on page __.

SUB-ACCOUNT(S): The Variable Account is divided into twenty-two sub-accounts.
The assets of the sub-accounts are invested in the corresponding portfolios of
the Funds.

<PAGE> 14

UNIT: A unit is a measurement used in the determination of the policy's Variable
Account value before the annuity date or maturity date.

VALUATION DAY: Each day the New York Stock Exchange is open for trading, except
for the business day after Christmas.

VALUATION PERIOD: The period beginning at the close of business on a valuation
day and ending at the close of business on the next succeeding valuation day.
The close of business is when the New York Stock Exchange closes (usually at
4:00 p.m. Eastern Time).

VARIABLE ACCOUNT: The Canada Life of New York Variable Annuity Account 1.

WE, OUR, and US: Canada Life Insurance Company of New York.

WRITTEN NOTICE: See the "Written Notice" provision on page __ in the "Other
Policy Provisions" section of this Prospectus.

YOU or YOUR: The owner. See the definitions of "Owner" and "Joint Owner" above.

<PAGE> 15

SUMMARY

TEN DAY RIGHT TO EXAMINE POLICY

You have ten days after you receive the policy to decide if the policy meets
your needs, and if the policy does not meet your needs to return the policy to
our Home Office. We will promptly return the policy value. When the policy is
issued as an Individual Retirement Annuity, during the first seven days of the
ten day period, we will return all premiums if this is greater than the amount
otherwise payable.

PREMIUMS

FOR POLICIES ISSUED ON OR AFTER JANUARY 26, 1996:

The minimum single premium is $5,000 ($2,000 if the Policy is an Individual
Retirement Annuity, but we reserve the right to lower or raise the mimimum
premium for IRA's). No further premiums are payable. Our prior approval is
required before your total premium paid exceeds $1,000,000. You may allocate
your net premium among the sub-accounts of the Variable Account and the Fixed
Account. See "Premiums" on page __.

FOR POLICIES ISSUED PRIOR TO JANUARY 26, 1996:

The minimum initial premium is $5,000 ($2,000 if the policy is an Individual
Retirement Annuity, but we reserve the right to lower or raise the minimum
premium for IRA's). However, the minimum initial premium is $100 ($50 if the
policy is an Individual Retirement Annuity) if submitted with a pre-authorized
check ("PAC") agreement. You may make additional premium payments during the
annuitant's lifetime and before the annuity date or maturity date. The minimum
additional premium is $1,000, or $100 per month if paid by PAC (or $50 per month
if paid by PAC if the policy is an Individual Retirement Annuity). Our prior
approval is required before your total premiums paid exceed $1,000,000. You may
allocate your net premiums among the sub-accounts of the Variable Account and
the Fixed Account. See "Premiums" on page __.

THE VARIABLE ACCOUNT

The Variable Account is a separate investment account consisting of twenty two
sub-accounts. The policy value before the annuity date or maturity date, except
for amounts in the Fixed Account, will vary according to the investment
performance of the portfolios of the Fund in which your elected sub-accounts are
invested. See "The Variable Account" on page __.

THE FUNDS

The assets of each sub-account are invested in the corresponding portfolio of
the Funds. The Funds currently offer twenty-two portfolios available for
investment under the policy: Money Market; Managed; Bond; Value Equity (formerly
known as Equity); International Equity; Capital; Fidelity VIP Growth; Fidelity
VIP High Income; Fidelity VIP Overseas; Fidelity VIP II Asset Manager; Fidelity
VIP II Index 500; Seligman Communications and Information; Seligman Frontier;
Dreyfus Growth and Income; Dreyfus Socially Responsible; Alger American Small
Capitalization; Alger American Growth; Alger American

<PAGE> 16

MidCap Growth; Alger American Leveraged AllCap; Montgomery Emerging Markets;
Montgomery Growth Fund; and Berger IPT International Fund. The Funds are
diversified, open-end investment companies. See "The Funds" on page__.

THE FIXED ACCOUNT

The Fixed Account is not part of and does not depend on the investment
performance of the Variable Account. Under the Fixed Account you may allocate
all or a portion of net premium payments and transfer policy value among several
Guarantee Periods selected by you. We currently offer Guarantee Periods with
durations of one, three, five, seven, and ten years. If the amount allocated or
transferred remains in a Guarantee Period until the expiration date of a
Guarantee Period, its value will be equal to the amount originally allocated or
transferred, multiplied on an annually compounded basis, by its Guaranteed
Interest Rate. Except for the one year guarantee period, any surrender,
withdrawal, or transfer made before the expiration of a Guarantee Period will be
subject to a Market Value Adjustment that may increase or decrease the Guarantee
Amount (or portion thereof) being surrendered, withdrawn or transferred. Because
of this adjustment and for other reasons, the amount payable upon surrender,
withdrawal, or transfer may be more or less than the Guarantee Amount at the
time of the transaction. However, the Market Value Adjustment will never reduce
the earnings on amounts allocated to the Fixed Account to less than three
percent per year. The Market Value Adjustment does not apply to amounts
surrendered, withdrawn, or transferred from the one year Guarantee Period (See
"THE FIXED ACCOUNT - Market Value Adjustment").

TRANSFERS

You may transfer all or part of an amount in a sub-account or the Fixed Account
to another sub-account(s) or the Fixed Account, subject to certain restrictions.
See "Transfers" on page __.

DEATH BENEFIT

If we receive due proof of death of the last surviving annuitant before the
annuity date or maturity date ("such due proof"), we will pay the beneficiary a
death benefit.

THE FOLLOWING APPLIES ONLY TO POLICIES ISSUED ON OR AFTER MAY 1, 1996 OR
SUCH LATER DATE AS APPLICABLE REGULATORY APPROVALS ARE OBTAINED IN THE
JURISDICTION IN WHICH THE POLICIES ARE OFFERED:

If we receive such due proof during the first five years, the death
benefit is the greater of:

1. the premiums paid, less: a) any partial withdrawals, including
applicable surrender charges; and b) any incurred taxes; or
2. the policy value on the date we receive due proof of the
annuitant's death.

If we receive such due proof after the first five policy years, the
death benefit is the greatest of:

1. item "1" above; or

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<PAGE> 17

2. item"2" above; or

3. the policy value at the end of the most recent 5 policy year
period preceding the date we receive due proof of the
annuitant's death, adjusted for any of the following items that
occur after such last 5 policy year period: a) less any partial
withdrawals, including applicable surrender charges; b) less any
incurred taxes; and c) plus any premiums paid. The 5 policy year
periods are measured from the policy date (i.e., 5, 10, 15, 20,
etc.).

If on the date the policy was issued, all annuitants were attained age
80 or less, then after any annuitant attains age 81, the death benefit
is the greater of items"1" or "2" above. However, if on the date the
policy was issued, any annuitant was attained age 81 or more, then the
death benefit is the policy value.

THE FOLLOWING APPLIES ONLY TO POLICIES ISSUED FROM MAY 1, 1995 THROUGH
APRIL 30, 1996, OR SUCH LATER DATE AS APPLICABLE REGULATORY APPROVALS
ARE OBTAINED IN THE JURISDICTIONS IN WHICH THE CONTRACTS ARE OFFERED.

If we receive such due proof during the first seven policy years, the
death benefit is the greater of:

If we receive such due proof after the first seven policy years, the
death benefit is the greatest of:

1. item "1." above; or
2. item "2." above; or

3. the policy value at the end of the most recent 7 policy year
period preceding the date we receive due proof of the
annuitant's death, adjusted for any of the following items that
occur after such last 7 policy year period: a) less any partial
withdrawals, including applicable surrender charges; b) less any
incurred taxes; and c) plus any premiums paid. The 7 policy year
periods are measured from the policy date (i.e., 7, 14, 21, 28,
etc.). No further step-ups in Death Benefit will occur after the
age of 80.

THE FOLLOWING APPLIES ONLY TO CONTRACTS ISSUED PRIOR TO MAY 1, 1995 OR SUCH
LATER DATE AS APPLICABLE REGULATORY APPROVALS ARE OBTAINED IN THE
JURISDICTION IN WHICH THE CONTRACTS ARE OFFERED.

If we receive such due proof during the first five policy years, the death
benefit is the greater of:
1. the premiums paid, less: a) any partial withdrawals, including
applicable surrender charges; and b) any incurred taxes; or
2. the policy value on the date we receive due proof of the
annuitant's death.

If we receive such due proof after the first five policy years, the death
benefit is the greatest of:

1. item "1" above; or
2. item "2" above; or

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<PAGE> 18

3. the policy value at the end of the most recent 5 year policy
period preceding the date we receive due proof of the
annuitant's death, adjusted for any of the following items that
occur after such last 5 year policy period: a) less any partial
withdrawals, including applicable surrender charges; b) less any
incurred taxes; and c) plus any premiums paid. The 5 year policy
periods are measured from the policy date (i.e., 5, 10, 15, 20,
etc.).

No death benefit is payable if the policy is surrendered before the last
surviving annuitant's death.

See "Proceeds on Death of Last Surviving Annuitant Before Annuity Date or
Maturity Date" on page __.

PARTIAL WITHDRAWALS AND CASH SURRENDERS

You may withdraw part or all of the cash surrender value at any time before the
earlier of the death of the annuitant, the annuity date or maturity date,
subject to certain limitations. See "The Fixed Account" on pages __ and __,
"Partial Withdrawals" on page __ "Proceeds on Surrender" on page __. Partial
withdrawals and cash surrenders may be subject to federal income tax, including
a penalty tax. See "FEDERAL TAX STATUS" on page __.

POLICY CHARGES

No deduction for a sales charge is made when premiums are paid. However, a
surrender charge (contingent deferred sales charge) will be deducted when
certain partial withdrawals and cash surrenders are made. For the purpose
of determining if any surrender charge applies and the amount of such
charge, partial withdrawals and surrenders are taken according to these
rules from policy value attributable to premiums or investment earnings in
the following order:

SURRENDER CHARGE

<TABLE>
<S> <C>
1. Up to 100% of positive investment earnings of each variable sub-account available at
the time the request is made, once a policy year, PLUS.........................................................None
2. Up to 100% of current policy year's interest on the FIXED ACCOUNT at the time the
request for surrender/withdrawal is made, once a policy year, PLUS.............................................None
3. Up to 10% of total premiums STILL SUBJECT TO A SURRENDER CHARGE, once
a policy year, PLUS 100% of those premiums NOT SUBJECT TO A SURRENDER CHARGE, availablee
at any time....................................................................................................None
5. Premiums subject to a surrender charge:
For policies issued prior to May 1, 1995 or such later date as
applicable regulatory approvals are obtained in the
jurisdiction in which the contracts are offered: (For 5 years
from the date of payment, each premium is subject to a 6%
surrender charge. After the 5th year, no surrender charge will
apply to such payment)..................................................................................6%

For policies issued after April 30, 1995 or such later date as applicable regulatory
approvals are obtained:
Policy Years Since Premium Was Paid
</TABLE>

<PAGE> 19

<TABLE>
<S> <C>
Less than 1...........................................................................................6%
At least 1, but less than 2...........................................................................6%
At least 2, but less than 3...........................................................................5%
At least 3, but less than 4...........................................................................5%
At least 4, but less than 5...........................................................................4%
At least 5, but less than 6...........................................................................3%
At least 6, but less than 7...........................................................................2%
At least 7..........................................................................................None
</TABLE>

See "Surrender Charge" on page__.

We deduct a policy administration charge of $30 for the prior policy year on
each policy anniversary. If the policy value on the policy anniversary is
$75,000 or more, we will waive the policy administration charge for the prior
policy year. We will also deduct this charge for the current policy year if the
policy is surrendered for its cash surrender value, unless the surrender occurs
on the policy anniversary. See "Policy Administration Charge" on page __.

At each valuation period, we also deduct a daily administration fee at an
effective annual rate of 0.15% from the assets of the Variable Account. See
"Daily Administration Fee" on page __.

The first 12 transfers during each policy year are free under our current
Company policy, which we reserve the right to change. Although we are not
currently charging for transfers exceeding 12, we reserve the right to assess a
$25 fee per additional transfer. See "Transfer Processing Fee" on page__.

We deduct a mortality and expense risk charge at each valuation period from the
assets of the Variable Account at an effective annual rate of 1.25%. This charge
is not made after the annuity date or maturity date, or against any amounts in
the Fixed Account. See "Annualized Mortality and Expense Risk Charge" on page
__.

No premium tax is currently payable under New York law. We reserve the right to
deduct any premium taxes payable in respect of future premiums in the event New
York law should change. See "Taxes" on page __.

Each portfolio of the Funds in which the Variable Account invests is responsible
for its own expenses. In addition, charges for investment advisory services are
charged daily from each portfolio of each fund. See "Other Charges Including
Investment Advisory Fees" on page __ and the attached "PROSPECTUSES FOR THE
FUNDS."

LOANS

ANNUITY DATE, MATURITY DATE AND PAYMENT OPTIONS

On the annuity date, we will apply the policy value under a Payment Option 1,
unless you have elected to receive the cash surrender value in a lump sum, or
pursuant to a mutually agreed upon payment option, Payment Option 2. Payments
under these payment options do not depend on the Variable Account's investment
performance. The proceeds we will pay on the

<PAGE> 20

maturity date is the policy value. The payment options are: 1) Life Income; and
2) Mutual Agreement. See "Payment Options" on page __.

OTHER POLICY PROVISIONS

For information concerning the owner, beneficiary, written notice, periodic
policy reports, assignment, and modification see "Other Policy Provisions" on
page __.

FEDERAL TAX STATUS

For a brief discussion of our current understanding of the federal tax laws
concerning us and the annuity policies we issue see "Federal Tax Status" on page
__.

QUESTIONS

We will be happy to answer your questions about the policy or our procedures.
Call or write to us at the phone number or address on page 1. All inquiries
should include the policy number, and the names of the owner and the annuitant.

<PAGE> 21

TABLE OF EXPENSES

EXPENSE DATA

The following information regarding expenses assumes that the entire policy
value is in the Variable Account:

<TABLE>
<CAPTION>
POLICYOWNER TRANSACTION EXPENSES*
- ---------------------------------
<S> <C>
Sales load on premiums ................................................................................................None

Maximum contingent deferred sales charge as a percentage of amount
surrendered (10% of total premiums still subject to a surrender charge are
free of any sales load
See "Policy Charges" on page__).....................................................................................6%
Transfer fee
Current Policy - First 12 transfers each policy year.........................................................No fee

Each transfer thereafter..................................................................................No fee**

POLICY ADMINISTRATION CHARGE............................................................................$30 per policy
(waived for the prior policy year if the policy value is $75,000 or more on the policy anniversary)

VARIABLE ACCOUNT ANNUAL EXPENSES
(as a percentage of account value)
Mortality and expense risk charges...............................................................................1.25%
Daily Administration Fee***......................................................................................0.15%
Total Variable Account annual expenses...........................................................................1.40%

FUND'S ANNUAL EXPENSES****
(as a percentage of average net assets)
</TABLE>

<PAGE> 22

<TABLE>
<CAPTION>
TOTAL
MANAGEMENT OTHER EXPENSES ANNUAL
FEES AFTER EXPENSE EXPENSES
REIMBURSEMENT****
<S> <C> <C> <C>
Money Market 0.50% 0.25% 0.75%
Managed 0.50% 0.40% 0.90%
Bond 0.50% 0.40% 0.90%
Value Equity 0.50% 0.40% 0.90%
Capital 0.50% 0.40% 0.90%
International Equity 0.80% 0.40% 1.20%
Fidelity VIP Growth 0.61% 0.08% 0.69%
Fidelity VIP High Income 0.59% 0.12% 0.71%
Fidelity VIP Overseas 0.76% 0.17% 0.93%
Fidelity VIP II Asset Manager 0.64% 0.10% 0.74%
Fidelity VIP II Index 500 0.13% 0.15% 0.28%
Seligman Communications and 0.75% 0.12% 0.87%
Seligman Frontier 0.75% 0.17% 0.92%
Dreyfus Growth and Income 0.75% 0.03% 0.78%
Dreyfus Socially Responsible 0.75% 0.15% 0.90%
Alger American Small Capitalization 0.85% 0.03% 0.88%
Alger American Growth 0.75% 0.04% 0.79%
Alger American MidCap Growth 0.80% 0.04% 0.84%
Alger American Leveraged AllCap 0.85% 0.24% 1.09%
Montgomery Emerging Markets 1.22% 0.23% 1.45%
Montgomery Growth 0.00% 0.01% 0.01%
Berger IPT-International***** 0.90% 0.30% 1.20%
</TABLE>

* In addition to the policyowner transaction expenses reflected in the
table, a Market Value Adjustment applies to the Guarantee Amount
subject to surrender, withdrawal, or transfer except during the 30 days
following the expiration of a Guarantee Period. Because of this
adjustment and for other reasons, the amount payable upon surrender,
withdrawal, or transfer may be greater or less than the Guarantee
Amount at the time of the transaction. The Market Value Adjustment,
however, will never reduce the earnings on amounts allocated to the
Fixed Account to less than three percent per year and does not apply to
amounts surrendered, withdrawn, or transferred from the one year
Guarantee Period.

<PAGE> 23

** Although, currently we do not charge for transfers exceeding 12, we
reserve the right to charge a $25 fee per transfer.

*** The Daily Administration Fee is imposed only under policies issued
after May 1, 1994, or such later date as applicable regulatory
approvals are obtained in the jurisdiction in which the policies are
offered. We do not assess the Daily Administration Fee under policies
issued prior to May 1, 1994.

**** We currently reimburse CLASF for expenses that exceed 0.40% of the
average daily net assets of Managed, Bond, Value Equity, Capital and
International Equity Portfolios, and 0.25% of the Money Market
Portfolio. Absent such reimbursement, the "Other Expenses"" for the
Money Market Portfolio would have been ____% and for the International
Equity Portfolio ____%. "Other Expenses" for the Managed, Bond, Value
Equity, and Capital Portfolios did not exceed the reimbursement level
of 0.40%.

Fidelity VIP and Fidelity VIP II's expenses were voluntarily reduced
by the Funds' investment adviser. Absent reimbursement, Management
Fee, Other Expenses and Total Annual Expenses for the________,
_______, and ________ Portfolios would have been _______.

Management of Dreyfus Growth and Income and Dreyfus Socially
Responsible, in their sole discretion, may waivesome or all of their
fees and/or voluntarily assume certain expenses for these Funds. For
the fiscal year ended December 31, 1996, a portion of the management
fee for each of Dreyfus Growth and Income and Dreyfus Socially
Responsible was waived. Without such fee waivers, the Management Fees,
Other Expenses and Total Annual Expenses would have been ____%, ____%
and ____%, respectively, for Dreyfus Growth and Income, and ____%,
____% and ____%, respectively, for Dreyfus Socially Responsible. There
is no guarantee that any fee waivers or expense reimbursements will
continue in the future.

The Management Fees, Other Expenses and Total Annual Expenses absent
voluntary waivers were ___, ___, and ___, respectively for the Alger
American Leveraged AllCap Portfolio and ___, ___, and ___ for the
Montgomery Emerging Markets Portfolio. The Manager of the Montgomery
Growth Fund has agreed to reduce some or all of its management fees if
necessary to keep total annual operating expenses, expressed on an
annualized basis, for the Growth Fund at or below 1.50% of average net
assets. The Manager also may voluntarily reduce additional amounts to
increase the return to policyowners investing in the Montgomery Growth
Fund. The Manager may terminate these voluntary reductions at any
time. Any reductions made by the Manager in its fees are subject to
reimbursement by the Montgomery Growth Fund within the following three
years, provided the Portfolio is able to effect such reimbursement and
remain in compliance with applicable expense limitations. The maximum
Management Fees, Other Expenses and Total Annual Expenses absent
voluntary waivers for the Montgomery Growth Fund were ___, ___ and
___.

*****Berger IPT-International management fees and expenses are anticipated
numbers as the fund was not in existence as of 12/31/96.

See "Charges Against The Policy, Variable Account, And Funds," page__, and
the Funds Prospectus. In addition to the expenses listed above, premium
taxes may be applicable, which currently range between 0.5% to 3.5%,
according to the jurisdiction. In many jurisdictions, there is no tax at
all.

<PAGE> 24

EXAMPLES

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

1. _____ If the policy is surrendered at the end of the applicable time period:

<TABLE>
<CAPTION>
SUB-ACCOUNT 1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
Money Market $ 77 $ 117 $ 159 $ 263
Managed $ 79 $ 121 $ 166 $ 278
Bond $ 79 $ 121 $ 166 $ 278
Value Equity $ 79 $ 121 $ 166 $ 278
International Equity $ 82 $ 130 $ 181 $ 307
Capital $ 79 $ 121 $ 166 $ 278
Fidelity VIP II Asset Manager $ 77 $ 116 $ 158 $ 262
Fidelity VIP Growth $ 77 $ 115 $ 156 $ 257
Fidelity VIP High Income $ 77 $ 115 $ 157 $ 259
Fidelity VIP Overseas $ 79 $ 122 $ 168 $ 281
Fidelity VIP Index 500 $ 72 $ 102 $ 135 $ 214
Seligman Communications and Information $ 78 $ 120 $ 165 $ 275
Seligman Frontier $ 79 $ 122 $ 167 $ 280
Dreyfus Growth and Income $ 78 $ 117 $ 160 $ 266
Dreyfus Socially Responsible $ 79 $ 121 $ 166 $ 278
Alger American Small Capitalization $ 79 $ 120 $ 165 $ 276
Alger American Growth $ 78 $ 118 $ 161 $ 267
Alger American MidCap Growth $ 78 $ 119 $ 163 $ 272
Alger American Leveraged AllCap $ 81 $ 127 $ 176 $ 296
Montgomery Emerging Markets $ 84 $ 137 $ 193 $ 331
Montgomery Growth $ 70 $ 94 $ 120 $ 185
Berger IPT - International $ 82 $ 130 $ 181 $ 307
</TABLE>

<PAGE> 25

2. If the policy is annuitized or not surrendered at the end of the
applicable time period:

<TABLE>
<CAPTION>
SUB-ACCOUNT 1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
Money Market $ 23 $ 72 $ 123 $ 263
Managed $ 25 $ 76 $ 130 $ 278
Bond $ 25 $ 76 $ 130 $ 278
Value Equity $ 25 $ 76 $ 130 $ 278
International Equity $ 28 $ 85 $ 145 $ 307
Capital $ 25 $ 76 $ 130 $ 278
Fidelity VIP II Asset Manager $ 23 $ 71 $ 122 $ 262
Fidelity VIP Growth $ 23 $ 70 $ 120 $ 257
Fidelity VIP High Income $ 23 $ 70 $ 121 $ 259
Fidelity VIP Overseas $ 25 $ 77 $ 132 $ 281
Fidelity VIP Index 500 $ 18 $ 57 $ 99 $ 214
Seligman Communications and Information $ 24 $ 75 $ 129 $ 275
Seligman Frontier $ 25 $ 77 $ 131 $ 280
Dreyfus Growth and Income $ 24 $ 72 $ 124 $ 266
Dreyfus Socially Responsible $ 25 $ 76 $ 130 $ 278
Alger American Small Capitalization $ 25 $ 75 $ 129 $ 276
Alger American Growth $ 24 $ 73 $ 125 $ 267
Alger American MidCap Growth $ 24 $ 74 $ 127 $ 272
Alger American Leveraged AllCap $ 27 $ 82 $ 140 $ 296
Montgomery Emerging Markets $ 30 $ 92 $ 157 $ 331
Montgomery Growth $ 16 $ 49 $ 84 $ 185
Berger IPT - International $ 28 $ 85 $ 145 $ 307
</TABLE>

<PAGE> 26

The examples represent expenses incurred in connection with a 7 year surrender
charge period. Policies issued with a 5 year maximum surrender charge period
would be subject to lower expenses.

The examples provided above assume that no transfer charges have been assessed.
The examples also reflect a policy administration charge of .14% of assets,
determined by dividing the total policy administration charges collected by the
total average net assets of the sub-accounts of the Variable Account

THE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES, AND ACTUAL EXPENSES MAY BE GREATER OR LESSER 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 LESSER
THAN THE ASSUMED AMOUNT.

CONDENSED FINANCIAL INFORMATION

The following condensed financial information is derived from the financial
statements of the Variable Account. The data should be read in conjunction with
the financial statements, related notes and other financial information included
in the Statement of Additional Information. See the "FINANCIAL STATEMENTS"
section on page __ concerning financial statements contained in the Statement of
Additional Information.

The table below sets forth certain information regarding the sub-accounts for a
policy for the period from December 31, 1991 through December 31, 1996.
Accumulation Unit Values will not be provided for any date prior to the
inception of the Variable Account. As of December 31, 1996, the Montgomery
Growth and Berger IPT - International sub-accounts had not commenced operations.
Accordingly, condensed financial information is not available for those
sub-accounts.

<PAGE> 27

<TABLE>
<CAPTION>
ACCUMULATION
UNIT VALUE*
AS OF AS OF AS OF AS OF AS OF AS OF
SUB-ACCOUNT 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92

<S> <C> <C> <C>
Money Market $11.93 $11.50 $11.27
Managed $16.56 $13.75 $13.97 $13.07
Bond $14.98 $12.98 $13.69 $12.57
Value Equity $17.34 $14.21 $14.11 $13.56
International Equity****
Capital** $13.96 $10.54 $11.14
Fidelity Growth*** $31.96 $23.62
Fidelity High Income*** $22.97
Fidelity Overseas*** $16.68 $15.33
Fidelity Asset Manager*** $18.12 $15.56
Seligman Communications
and Information**** $14.23
Seligman Frontier **** $13.89
Fidelity Index 500*****
Dreyfus Growth & Income*****
Dreyfus Socially Responsible*****
Alger American Small Capitalization****
Alger American Growth*****
Alger American Mid Cap Growth*****
Alger American Leveraged All Cap****
Montgomery Emerging Markets*****
</TABLE>

<PAGE> 28

* Accumulation Unit Values prior to 1994 do not reflect the .15% Daily
Administration Fee imposed after May 1, 1994. Accumulation Unit
Values for year ended 12/31/94 reflect the .15% Daily Administration
Fee.

** Commenced operations on May 1, 1993.
*** Commenced operations on May 1, 1994.
**** Commenced operations on May 1, 1995.
***** Commenced operations on May 1, 1996.

<PAGE> 29

<TABLE>
<CAPTION>
NUMBER OF UNITS
OUTSTANDING AT
END OF PERIOD
AS OF AS OF AS OF AS OF *AS OF
SUB-ACCOUNT 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92
- ----------- --------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
Money Market 193 195 4,393
Managed 9,125 13,982 12,645 4,766
Bond 517 517 1,203 403
Value Equity 5,798 6,262 8,387 1,017
International Equity
Capital 10,013 7,094
Fidelity VIP Growth 3,259 1,752
Fidelity VIP High Income 0 1,206
Fidelity VIP Overseas 63 594
Fidelity VIP II Asset Manager 6,880 7,647
Fidelity VIP II Index 500
Seligman Communications
and Information 18,611
Seligman Frontier 2,237
Dreyfus Growth & Income
Dreyfus Socially Responsible
Alger American Small Capitalization
Alger American Growth
Alger American Mid CapGrowth
Alger American Leveraged All Cap
Montgomery Emerging Markets
</TABLE>

<PAGE> 30

* The number of accumulation units for CLASF decreased in 1991 and 1990
due to the transfer of seed money from the Variable Account to our
general account to meet California's insurance regulations. This did
not affect the seed money in the underlying Portfolio.

<PAGE> 31

THE COMPANY

Canada Life Insurance Company of New York ("we," "our," and "us") is a stock
life insurance company with assets as of December 31, 1996 of approximately $___
million. We were incorporated under New York law on June 7, 1971, and our Home
Office is located at 500 Mamaroneck Avenue, Harrison, New York 10528. We
currently are principally engaged in issuing and reinsuring annuity policies in
the state of New York.

We share our A.M. Best Company rating with our parent company, The Canada Life
Assurance Company. From time to time, we will quote this rating, our rating from
Standard & Poor's Corporation, Duff & Phelps Inc., and/or Moody's Investors
Service for claims paying ability. These ratings address the financial ability
of these companies to meet their contractual obligations in accordance with the
terms of their insurance contracts. They do not take into account deductibles,
surrender or cancellation penalties, or timeliness of claim payment, nor do they
address the suitability of the policy for a particular purchaser. Also, these
evaluations do not refer to the ability of these companies to meet non-policy
obligations.

We are a wholly-owned subsidiary of The Canada Life Assurance Company, a
Canadian life insurance company headquartered in Toronto, Ontario, Canada, with
a U.S. home office in Atlanta, Georgia. The Canada Life Assurance Company:
commenced insurance operations in 1847, and has been actively operating in the
United States since 1889; and is one of the largest life insurance companies in
North America with consolidated assets as of December 31, 1996 of approximately
$____ billion (U.S. dollars).

Obligations under the policies are obligations of Canada Life Insurance Company
of New York.

We are subject to regulation and supervision by the New York Insurance Bureau,
as well as the applicable laws and regulations of all jurisdictions in which
we are authorized to do business.

THE VARIABLE ACCOUNT, THE FUNDS
AND FIXED ACCOUNT

THE VARIABLE ACCOUNT

We established the Canada Life of New York Variable Annuity Account 1 (the
"Variable Account") as a separate investment account on September 23, 1989 under
New York law. Although we own the assets in the Variable Account, these assets
are held separately from our other assets and are not part of our general
account. The income, gains or losses, whether or not realized, from the assets
of the Variable Account are credited to or charged against the Variable Account
in accordance with the policies without regard to our other income, gains or
losses.

The portion of the assets of the Variable Account equal to the reserves and
other contract liabilities of the Variable Account will not be charged with
liabilities that arise from any other business that we conduct and will be held
in the Variable Account. We have the right to transfer to our general account
any assets of the Variable Account which are in excess of such reserves and
other liabilities.

The Variable Account is registered with the Securities and Exchange Commission
(the "SEC") as a unit investment trust under the Investment Company Act of 1940
(the "1940 Act") and meets the definition of a "separate account" under the
federal securities laws. However, registration under the 1940 Act does not
involve the supervision by the SEC of the management or investment policies or
practices of the Variable Account.

The Variable Account currently is divided into twenty-two sub-accounts with the

<PAGE> 32

assets of each sub-account invested in shares of the corresponding portfolios of
the Funds described below.

THE FUNDS

The Variable Account invests in shares of CLASF, Fidelity VIP, Fidelity VIP II,
Seligman, Dreyfus, The Dreyfus Socially Responsible, Alger American, Montgomery
and Berger Trust. The Funds are management investment companies of the series
type with one or more investment portfolios. Each Fund is registered with the
SEC as an open-end, management investment company. Such registration does not
involve supervision of the management or investment practices or policies of the
Company or the portfolios by the SEC.

The Funds may, in the future, create additional portfolios that may or may not
be available as investment options under the policies. Each portfolio has its
own investment objectives and the income and losses for each portfolio are
determined separately for that portfolio.

The investment objectives and policies of each portfolio are summarized below.
THERE IS NO ASSURANCE THAT ANY PORTFOLIO WILL ACHIEVE ITS STATED OBJECTIVES.
More detailed information, including a description of risks and expenses, may be
found in the prospectuses for the Funds which must accompany or precede this
prospectus and which should be read carefully and retained for future reference.

CANADA LIFE OF AMERICA SERIES FUND, INC.

The Canada Life of America Series Fund, Inc., ("CLASF") currently has six
portfolios: Money Market; Managed; Bond; Value Equity; International Equity; and
Capital.

CLASF is a diversified open-end investment company incorporated in Maryland.
CLASF has four portfolios which use the investment advisory services of CL
Capital Management, Inc., a Georgia corporation: Money Market; Managed; Bond;
and Value Equity. CLASF has one portfolio, the International Equity Portfolio,
which uses the sub-investment advisory services of Canada Life Investment
Management Limited, a Toronto, Ontario, Canada SEC-registered investment
adviser. CLASF also has one portfolio, the Capital Portfolio, which uses the
sub-investment advisory services of J. & W. Seligman & Co. Incorporated, an
unaffiliated investment manager that is a Delaware Corporation. CL Capital
Management, Inc. is a wholly owned subsidiary of our Company. Canada Life
Investment Management Limited is a subsidiary of The Canada Life Assurance
Company. The following is a brief description of the investment objectives of
each of the current portfolios of CLASF.

MONEY MARKET PORTFOLIO

The Money Market Portfolio seeks the highest possible level of current income
consistent with preservation of capital and liquidity by investing in money
market instruments maturing in thirteen months or less.

<PAGE> 33
MANAGED PORTFOLIO

The Managed Portfolio seeks as high a level of return as possible through
capital appreciation and income consistent with prudent investment risk and
preservation of capital, by investing in equities, fixed income debt instruments
and money market instruments.

BOND PORTFOLIO

The Bond Portfolio seeks as high a level of current income and capital
appreciation as is consistent with preservation of principal, by investing
primarily in fixed income debt instruments.

VALUE EQUITY PORTFOLIO

The Value Equity Portfolio seeks long-term growth and income by investing in
common stocks and other equity securities which are believed to have
appreciation potential.

INTERNATIONAL EQUITY PORTFOLIO

The International Equity Portfolio seeks long-term capital appreciation by
investing in equity or equity-type securities of companies located outside of
the United States.

CAPITAL PORTFOLIO

The Capital Portfolio seeks capital appreciation, not current income, by
investing in common stocks and securities convertible into or exchangeable for
common stocks, in common stock purchase warrants, in debt securities and in
preferred stocks believed to provide capital appreciation opportunities.

Since CLASF may be available to other separate accounts, including registered
separate accounts for variable annuity and variable life products, and
non-registered separate accounts for group annuity products of the Company,
Canada Life Insurance Company of New York, and The Canada Life Assurance
Company, it is possible that material conflicts may arise between the interests
of the Variable Account and one or more other separate accounts investing in
CLASF. CLASF's board of directors will monitor events to identify any
irreconcilable material conflict. Upon being advised of such a conflict, we will
take any steps we believe necessary to resolve the matter, including removing
the assets of the Variable Account from one or more portfolios.

FIDELITY INVESTMENTS VARIABLE INSURANCE PRODUCTS FUND

The Fidelity Investments Variable Insurance Products Fund ("Fidelity VIP") acts
as one of the funding vehicles for the policy with three Portfolios available
under the policy: Fidelity VIP Growth; Fidelity VIP High Income; and Fidelity
VIP Overseas. Fidelity VIP is managed by Fidelity Management & Research Company
("Investment Manager").

FIDELITY VIP GROWTH PORTFOLIO

The Fidelity VIP Growth Portfolio seeks to achieve capital appreciation. The
Portfolio normally purchases common stocks, although its investments are not
restricted to any one type of security.

<PAGE> 34

FIDELITY VIP HIGH INCOME PORTFOLIO

The Fidelity VIP High Income Portfolio seeks to obtain a high level of current
income by investment primarily in high yielding, lower-rated, fixed income
securities, while also considering growth of capital. Please refer to the
accompanying Fidelity prospectus for a description and explanation of the unique
risks associated with investing in high risk, high yielding, lower rated fixed
income securities.

FIDELITY VIP OVERSEAS PORTFOLIO

The Fidelity VIP Overseas Portfolio seeks long-term growth of capital primarily
through investments in foreign securities. This portfolio provides a means for
investors to diversify their own portfolios by participating in companies and
economies outside of the United States.

FIDELITY INVESTMENTS VARIABLE INSURANCE PRODUCTS FUND II

The Fidelity Investments Variable Insurance Products Fund II ("Fidelity VIP II")
acts as one of the funding vehicles for the policy with the VIP II Asset Manager
and VIP II Index 500 Portfolios available under the policy. Fidelity VIP II is
managed by Fidelity Management & Research Company ("Investment Manager").

FIDELITY VIP II ASSET MANAGER PORTFOLIO

The Fidelity VIP II Asset Manager Portfolio seeks high total return with reduced
risk over the long-term by allocating its assets among domestic and foreign
stocks, bonds and short-term fixed-income instruments.

FIDELITY VIP II INDEX 500 PORTFOLIO

The Fidelity VIP II Index 500 Portfolio seeks a total return which corresponds
to that of the Standard & Poor's Composite Index of 500 Stocks.

SELIGMAN PORTFOLIOS, INC.

Seligman Portfolios, Inc. ("Seligman") currently has twelve portfolios, two of
which are available under the policy: Communications and Information; and
Frontier. Seligman is a diversified open-ended investment company incorporated
in Maryland which uses the investment management services of J. & W. Seligman &
Co. Incorporated, a Delaware corporation.

SELIGMAN COMMUNICATIONS AND INFORMATION PORTFOLIO

The investment objective of this Portfolio is to produce capital gain, not
income, by investing primarily in securities of companies operating in the
communications, information and related industries.

<PAGE> 35

SELIGMAN FRONTIER PORTFOLIO

The investment objective of this Portfolio is to produce growth in capital
value; income may be considered but will be only incidental to the Portfolio's
investment objective. In general, securities owned are likely to be those issued
by small to medium sized companies selected for their growth potential.

DREYFUS VARIABLE INVESTMENT FUND

Dreyfus Variable Investment Fund is an open-end, management investment company,
that is intended to be a funding vehicle for variable annuity and variable life
insurance contracts. One of the Fund's portfolios is available under this
policy, the Dreyfus Growth and Income Portfolio.

DREYFUS GROWTH AND INCOME PORTFOLIO

The Growth and Income Portfolio seeks long-term capital growth, current income
and growth of income, consistent with reasonable investment risk. The Portfolio
invests primarily in equity and debt securities and money market instruments of
domestic and foreign issuers. The proportion of the Portfolio's assets invested
in each type of security will vary from time to time in accordance with The
Dreyfus Corporation's assessment of economic conditions and investment
opportunities.

THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.

The Dreyfus Socially Responsible Growth Fund, Inc. ("Dreyfus Socially
Responsible") is an open-end, diversified, management investment company fund,
that is intended to be a funding vehicle for variable annuity contracts and
variable life insurance policies to be offered by the separate accounts of
various life insurance companies.

Dreyfus Socially Responsible seeks to provide capital growth by investing
principally in common stocks, or securities convertible into common stock, of
companies which, in the opinion of the Fund's management, not only meet
traditional investment standards, but also show evidence that they conduct their
business in a manner that contributes to the enhancement of the quality of life
in America. Current income is a secondary goal.

THE ALGER AMERICAN FUND

The Alger American Fund ("Alger American") is intended to be a funding vehicle
for variable annuity contracts and variable life insurance policies to be
offered by the separate accounts of certain life insurance companies; and its
shares may also be offered to qualified pension and retirement plans. Each
Portfolio has distinct investment objectives and policies. Further information
regarding the investment practices of each of the Portfolios is set forth below.

<PAGE> 36

ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO

The investment objective of the Portfolio is long-term capital appreciation.
Except during temporary defensive periods, the Portfolio invests at least 65% of
its total assets in equity securities of companies that, at the time of purchase
of the securities, have total market capitalization within the range of
companies included in the Russell 2000 Growth Index or the S&P Small Cap 600
Index, updated quarterly. The Portfolio may invest up to 35% of its total assets
in equity securities of companies that, at the time of purchase, have total
market capitalization outside this combined range and in excess of that amount
(up to 100% of its assets) during temporary defensive periods.

ALGER AMERICAN GROWTH PORTFOLIO

The Alger American Growth Portfolio seeks long-term capital appreciation by
investing in a diversified, actively managed portfolio of equity securities,
primarily of companies, that, at the time of purchase, have total market
capitalization of $1 billion or greater.

ALGER AMERICAN MIDCAP GROWTH PORTFOLIO

The investment objective of the Portfolio is long-term capital appreciation.
Except during temporary defensive periods, the Portfolio invests at least 65% of
its total assets in equity securities of companies that, at the time of purchase
of the securities, have total market capitalization within the range of
companies included in the S&P MidCap 400 Index, updated quarterly. The Portfolio
may invest up to 35% of its total assets in equity securities of companies that,
at the time of purchase, have total market capitalization outside the range of
companies included in the S&P MidCap 400 Index and in excess of that amount (up
to 100% of its assets) during temporary defensive periods.

ALGER AMERICAN LEVERAGED ALLCAP PORTFOLIO

The Alger American Leveraged AllCap Portfolio seeks long-term capital
appreciation by investing primarily in a diversified, actively managed portfolio
of equity securities. The Portfolio may engage in leveraging (up to 33 1/3% of
its assets) and options and futures transactions, which are deemed to be
speculative and which may cause the Portfolio's net asset value to be more
volatile than the net asset value of a fund that does not engage in these
activities.

THE MONTGOMERY FUNDS III

Shares of Montgomery Emerging Markets Fund and Montgomery Growth Fund,
portfolios of The Montgomery Funds III ("Montgomery"), an open-end investment
company, are available under this policy.

MONTGOMERY EMERGING MARKETS FUND

The investment objective of this portfolio is capital appreciation, which under
normal conditions it seeks by investing at least 65% of its total assets in
equity securities of companies in countries having emerging markets. For these
purposes, the portfolio defines an emerging market country as having an economy
that is or would be considered by the World Bank or the United Nations to be
emerging or developing.

<PAGE> 37

MONTGOMERY GROWTH FUND

The investment objective of this portfolio is capital appreciation, which under
normal conditions it seeks by investing at least 65% of its total assets in the
equity securities of domestic companies. In addition to capital appreciation,
the Montgomery Growth Fund emphasizes value.

BERGER INSTITUTIONAL PRODUCTS TRUST

Shares of the Berger IPT-International Fund, a portfolio of Berger Institutional
Products Trust, an open-end investment company, are available under this policy.
The portfolio is advised by BBOI Worldwide LLC, which has delegated daily
management of the portfolio to Bank of Ireland Asset Management Limited. The
investment objective of the Berger IPT-International Fund is long-term capital
appreciation. The portfolio seeks to achieve this objective by investing
primarily in common stocks of well established companies located outside the
United States. The portfolio intends to diversify its holdings among several
countries and to have, under normal market conditions, at least 65% of the
portfolio's total assets invested in the securities of companies located in at
least five countries, not including the United States.

RESERVED RIGHTS

We reserve the right to substitute shares of another portfolio of CLASF,
Fidelity VIP, Fidelity VIP II, Seligman, Dreyfus, Dreyfus Socially Responsible,
Alger American, Montgomery, or Berger Trust or shares of another registered
open-end investment company if, in the judgment of our management, investment in
shares of one or more portfolios is no longer appropriate for any legitimate
reason, including: a change in investment policy; or a change in the tax laws;
or the shares are no longer available for investment. We will obtain the
approval of the SEC before we make a substitution of shares, if such approval is
required by law.

When permitted by law, we also reserve the right to: create new variable
accounts; combine variable accounts, including the Canada Life of New York
Variable Annuity Account 1; remove, combine or add sub-accounts and make the new
sub-accounts available to policyowners at our discretion; add new portfolios to
CLASF; deregister the Variable Account under the 1940 Act if registration is no
longer required; make any changes required by the 1940 Act; and operate the
Variable Account as a managed investment company under the 1940 Act or any other
form permitted by law.

If a change is made, we will send you a revised Prospectus and any notice
required by law.

CHANGE IN INVESTMENT POLICY

The investment policy of a sub-account of the Variable Account may not be
changed unless: the change is approved, if required, by the New York Insurance
Bureau; and a statement of such approval is filed, if required, with the
insurance department of the state in which the policy is delivered.

<PAGE> 38

THE FIXED ACCOUNT

An owner may allocate some or all of the net premium payments and transfer some
or all of the policy value to the Fixed Account, which is part of our general
account and pays interest at declared rates (Guaranteed Interest Rates)
guaranteed for selected periods of time from one to ten years (Guarantee
Periods). The principal, after deductions, is also guaranteed. Since the Fixed
Account is part of the general account, we assume the risk of investment gain or
loss on this amount. All assets in the general account are subject to our
general liabilities from business operations. The Fixed Account may not be
available in all states.

Due to certain exemptive and exclusionary provisions, interests issued by us in
connection with the Fixed Account have not been registered under the Securities
Act of 1933 (the "1933 Act"), and neither the Fixed Account nor the general
account has been registered as an investment company under the 1940 Act.
Accordingly, neither the interests in the Fixed Account, the Fixed Account, nor
the general account are generally subject to regulation under the 1933 Act and
the 1940 Act. Disclosures relating to the interests in the Fixed Account, the
Fixed Account, and the general account, however, may be subject to certain
generally applicable provisions of the federal securities laws relating to the
accuracy of statements made in a registration statement.

GUARANTEE AMOUNT

The portion of the policy value allocated to the Fixed Account is the Guarantee
Amount which is credited with interest, as described below. The Guarantee Amount
reflects interest credited to the policy value in the Guarantee Periods, net
premium payments allocated to or policy value transferred to Guarantee Periods
and charges assessed in connection with the policy. The Guarantee Amount is
guaranteed to accumulate at a minimum effective annual interest rate of 3%.

GUARANTEE PERIODS

From time to time we will offer to credit Guarantee Amount with interest at
specific guaranteed rates for specific periods of time. These periods of time
are known as Guarantee Periods. We may offer one or more Guarantee Periods of
one to ten years' duration at any time but will always offer a Guarantee Period
of one year. We currently offer Guarantee Periods of one, three, five, seven and
ten years. The interest rates available at any time will vary with the number of
years in the Guarantee Period but will always be equal to or greater than an
effective annual interest rate of 3%.

Guarantee Periods begin on the date as of which a net premium payment is
allocated to or a portion of the policy value is transferred to the Guarantee
Period, and end on the last calendar day of the month when the number of years
in the Guarantee Period elected (measured from the end of the calendar month in
which the amount was allocated or transferred to the Guarantee Period) has
elapsed.

Allocations of net premium payments and transfers of policy value to the Fixed
Account for a Guarantee Period may have different applicable Guaranteed Interest
Rates depending on the timing of such allocations or transfers. However, amounts
allocated to the Fixed Account for a specified Guarantee Period during a
calendar month will receive the same Guaranteed Interest Rate. The applicable
Guaranteed Interest Rate does not change during a Guarantee Period. If the
allocated or transferred amount remains in the fixed rate interest option until
the end of the applicable Guarantee Period, its value will be equal to the
amount originally allocated or transferred, multiplied, on an annually
compounded basis, by its Guaranteed Interest Rate. If a Guarantee Amount is
surrendered, withdrawn, or transferred prior to the expiration of the Guarantee
Period, the Guaranteed Amount is subject to a Market Value Adjustment, as
described below, the application of which may result in the payment of an amount
greater or less than the Guarantee Amount at the time of the transaction. The
Market Value Adjustment, however, will never reduce the earnings on amounts
allocated to the fixed interest rate option to less than

<PAGE> 39

three percent per year and does not apply to amounts surrendered, withdrawn, or
transferred from the one year Guarantee Period or to provide death, nursing
home, terminal illness benefits, and annuitization.

During the 30 day period following the expiration of a Guarantee Period ("30 day
window"), a policyowner may transfer the Guarantee Amount from the expiring
Guaranteed Period to another fixed interest rate option with a new Guarantee
Period or to a sub-account(s). A Market Value Adjustment will not apply if the
Guarantee Amount from the expired Guarantee Period is surrendered, withdrawn, or
transferred during the 30 day window. During the 30 day window, the Guarantee
Amount will accrue interest at an annual effective rate of 3% unless the
Guarantee Amount remains in the fixed account in which case you will receive the
interest rate in accordance with the Guarantee Period chosen.

We will generally generate and forward notice to owners in writing at least 10
days prior to the expiration date of any Guarantee Period about the then
currently available Guarantee Periods and the Guaranteed Interest Rates
applicable to such Guarantee Periods. A new Guarantee Period of the same
duration as the previous Guarantee Period will commence automatically on the
first day following the expired Guarantee Period, unless we receive Written
Notice prior to the expiration of the 30 day window of the owner's election of a
different Guarantee Period from among those being offered by us at that time, or
instructions to transfer all or a portion of the expiring Guarantee Amount to a
sub-account. If we do not receive such Written Notice and are not offering a
Guarantee Period of the same duration as the expiring Guarantee Period or if the
duration of the expiring Guarantee Period would, if renewed, extend beyond the
annuity date, then a new Guarantee Period of one year will commence
automatically on the first day following the expiration of the expired Guarantee
Period.

To the extent permitted by law, we reserve the right at any time to offer
Guarantee Periods that differ from those available when an owner's policy was
issued. We also reserve the right, at any time, to stop accepting net premium
payment allocations or transfers of policy value to a particular Guarantee
Period. Since the specific Guarantee Periods available may change periodically,
please contact our Home Office to determine the Guarantee Periods currently
being offered.

Owners allocating net premium payments and/or policy value to the Fixed Account
do not participate in the investment performance of assets of the Fixed Account,
and this performance does not determine the policy value attributable to the
Fixed Account or benefits relating thereto. The Fixed Account provides values
and benefits based only upon the net purchase payments and policy values
allocated thereto, the Guaranteed Interest Rate credited on such amounts, and
any charges or Market Value Adjustments imposed on such amounts in accordance
with the terms of the policy.

MARKET VALUE ADJUSTMENT

A Market Value Adjustment reflects the relationship between: (i) the Guaranteed
Interest Rate being applied to the Guarantee Period from which the Guarantee
Amount is requested to be surrendered, withdrawn, or transferred; and (ii) the
current Guaranteed Interest Rate that we credit for a Guarantee Period equal in
duration to the Guarantee Period from which the Guarantee Amount will be
surrendered, withdrawn, or transferred. If a Guarantee Period of such duration
is not being offered, we will use the linear interpolation of the Guaranteed
Interest rates for the Guarantee Periods closest in duration that is available.
Any surrender, withdrawal, or transfer of a Guarantee Amount is subject to a
Market Value Adjustment, unless the effective date of the surrender, withdrawal,
or transfer is within 30 days after the end of a Guarantee Period or the
surrender, withdrawal or transfer of a Guarantee Amount is from the one year
Guarantee Period. The Market Value Adjustment will be applied after the
deduction of any applicable policy administration charge or transfer fee, and
before the deduction of any applicable surrender charge or charge for taxes on
premium payments. The Market Value Adjustment, however, will never reduce the
earnings on amounts allocated to the Fixed Account to less than 3% per year.

Generally, if the Guaranteed Interest Rate for the selected Guarantee Period is
lower than the Guaranteed Interest Rate currently being offered for new
Guarantee Periods of duration equal to the selected Guarantee Period as of the
date that the Market Value Adjustment is applied, then the application of the
Market Value Adjustment will result in the payment, upon surrender, withdrawal,
or transfer of an amount less than the Guarantee Amount (or portion thereof)
being surrendered,

<PAGE> 40

withdrawn, or transferred. Conversely, if the Guaranteed Interest Rate for the
selected Guarantee Period is higher than the Guaranteed Interest Rate currently
being offered for new Guarantee Periods of a duration equal the selected
Guarantee Period as of the date that the Market Value Adjustment is applied,
then the application of the Market Value Adjustment will result in the payment,
upon surrender, withdrawal, or transfer of an amount greater than the Guarantee
Amount (or portion thereof) being surrendered, withdrawn, or transferred.

The Market Value Adjustment is computed by multiplying the amount being
surrendered, withdrawn, or transferred, (the "Amount") by the Market Value
Adjustment Factor. The Market Value Adjustment Factor is calculated as follows:

Market Value Adjustment Factor = Lesser of (a) (1 + i) n/12
-----------------
(1 +r + .005)n/12

or (b) 1.05

where:

"i" is the Guaranteed Interest Rate currently being credited to the
"Amount";

"r" is the Guaranteed Interest Rate that is currently being offered
for a Guarantee Period of duration equal to the Guarantee Period for
the Guarantee Amount from which the "Amount" is taken; and

"n" is the number of months remaining to the expiration of the
Guarantee Period for the Guarantee Amount from which the "Amount" is
taken.

DESCRIPTION OF ANNUITY POLICY

TEN DAY RIGHT TO EXAMINE POLICY

You have ten days after you receive the policy to decide if the policy meets
your needs and if the policy does not meet your needs to return the policy to
our Home Office. We will promptly return the policy value. When the policy is
issued as an Individual Retirement Annuity, during the first seven days of the
ten day period, we will return all premiums if this is greater than the amount
otherwise payable.

PREMIUMS

INITIAL PREMIUM

A prospective owner must submit a properly completed application along with a
check made payable to us for the initial premium. The minimum initial premium is
$5,000 ($2,000 if the Policy is an Individual Retirement Annuity, but we reserve
the right to lower or raise the minimum premium for IRAs). However, for policies
issued prior to January 26, 1996, the minimum initial premium is $100 ($50 if
the Policy is an Individual Retirement Annuity) when a prospective owner has
enclosed a completed pre-authorized check ("PAC") agreement for additional
premiums to be automatically withdrawn monthly from the owner's bank account.

<PAGE> 41

The application is subject to our underwriting standards. If the application is
properly completed and is accompanied by all the information necessary to
process it, including the initial premium, we will normally accept the
application and apply the initial net premium within two valuation days of
receipt at our Home Office. However, we may retain the premium for up to five
valuation days while we attempt to complete the processing of an incomplete
application. If this cannot be achieved within five valuation days, we will
inform the prospective owner of the reasons for the delay and immediately return
the premium, unless the prospective owner specifically consents to our retaining
the premium until the application is made complete. If the prospective owner
consents to our retaining the premium, we will apply the initial net premium
within two valuation days of when the application is complete.

ADDITIONAL PREMIUMS

NO ADDITIONAL PREMIUMS ARE PAYABLE ON POLICIES ISSUED ON OR AFTER JANUARY 26,
1996.

The minimum additional premium is $600. However, the minimum additional premium
paid by PAC is $50 per month (We will apply additional net premiums as of
receipt at our Home Office).

You may make additional premium payments at any time during the annuitant's
lifetime and before the earlier of the annuity date or maturity date. Our prior
approval is required before we will accept an additional premium which, together
with the total of other premiums paid, would exceed $1,000,000. We will give you
a receipt for each additional premium payment.

WIRE TRANSMITTAL PRIVILEGE

If a written agreement between us and broker/dealers who use wire transmittals
is in effect, as a privilege to you we will accept transmittal of the initial
and, for policies issued prior to January 26, 1996, additional premiums by wire
order from the broker/dealer to our designated financial institution. A copy of
such transmittal must be simultaneously sent to our Home Office via a telephone
facsimile transmission that also contains the essential information we require
to begin application processing and/or to allocate the net premium. We will
normally apply the initial net premium within two valuation days of receipt at
our Home Office of the facsimile transmission that contains a copy of the wire
order and such required essential information. We may retain such wire orders
for up to five valuation days while an attempt is made to obtain such required
information that we do not receive via such facsimile transmission. If such
required information is not obtained within five valuation days, we will inform
the broker/dealer, on behalf of the prospective owner, of the reasons for the
delay and immediately return the premium wired to us to the broker/dealer who
will return the full premium paid to the prospective owner, unless we receive
within such five valuation days the prospective owner's specific written consent
to our retaining the premium until we receive such required information via
facsimile transmission.

Our acceptance of the wire order and facsimile does not create a contractual
obligation with us until we receive and accept a properly completed original
application. If we do not receive a properly completed original application
within ten valuation days of receipt of the initial premium via wire order, we
will return the premium wired to us to the broker/dealer who will return the
full premium paid to the prospective owner. If the allocation instructions in
the properly completed original application are inconsistent with such
instructions contained in the facsimile transmission, the policy value will be
reallocated in accordance with the allocation instructions in the application at
the price which was next determined after receipt of the wire order.

ELECTRONIC DATA TRANSMISSION OF APPLICATION INFORMATION

In certain states, we will also accept, by agreement with broker-dealers who use
electronic data transmissions of application information, wire transmittals of
initial premium payments from the broker-dealer to the Company for purchase of
the policy. Contact us to find out about state availability.

<PAGE> 42

Upon receipt of the electronic data and wire transmittal, we will process the
information and allocate the premium payment according to the policyowner's
instructions. Based on the information provided, we will generate a policy and a
verification letter to be forwarded to the policyowner for signature.

During the period from receipt of the initial premium until the signed
verification letter is received, the policyowner may not execute any financial
transactions with respect to the policy unless such transactions are requested
in writing by the owner and signature guaranteed.

NET PREMIUM ALLOCATION

You elect in your application how you want your initial net premium to be
allocated among the sub-accounts and the Fixed Account. Any additional net
premiums (for policies issued prior to January 26, 1996) will be allocated in
the same manner, unless at the time of payment we have received your written
notice to the contrary. The total allocation must equal 100%.

We cannot guarantee that a sub-account or shares of a portfolio will always be
available. If an owner requests that all or part of a premium be allocated to a
sub-account at a time when the sub-account or underlying portfolio is not
available, we will immediately return that portion of the premium to you, unless
you specify otherwise.

TERMINATION

____ THE FOLLOWING APPLIES TO POLICIES ISSUED ON OR AFTER JANUARY 26, 1996:

____ We may pay you the policy value and terminate the policy if before the
annuity date the policy value is less than $2,000.

____ THE FOLLOWING APPLIES TO POLICIES ISSUED PRIOR TO JANUARY 26, 1996:

____ We may pay you the cash surrender value and terminate the policy if before
the annuity date or maturity date all of these events simultaneously exist:

1. you have not paid any premiums for at least two years;
2. the policy value is less than $2,000; and
3. the total premiums paid, less any partial withdrawals, is less than
$2,000.

We will mail you a notice of our intention to terminate this policy at least six
months in advance. The policy will automatically terminate on the date specified
in the notice, unless we receive an additional premium before the termination
date specified in the notice. This additional premium must be at least the
minimum amount specified in "Additional Premiums."

We will mail you a notice of our intention to terminate this policy at least six
months in advance. The policy will automatically terminate on the date specified
in the notice.

VARIABLE ACCOUNT VALUE

The Variable Account value before the annuity date or maturity date is
determined by multiplying the number of units credited to this policy for each
sub-account by the current unit value of these units.

<PAGE> 43

UNITS

We credit net premiums in the form of units. The number of units credited to the
policy for each sub-account is determined by dividing the net premium allocated
to that sub-account by the unit value for that sub-account at the end of the
valuation period during which we receive the premium at our Home Office.

We will credit units for the initial net premium on the effective date of the
policy. We will adjust the units for any transfers in or out of a sub-account,
including any transfer processing fee.

We will cancel the appropriate number of units based on the unit value at the
end of the valuation period in which any of the following events occur: the
policy administration charge of $30 is assessed; the date we receive and file
your written notice for a partial withdrawal or a cash surrender; the date of a
systematic withdrawal; the earlier of the annuity date or maturity date; or the
date we receive due proof of your death or the annuitant's death.

UNIT VALUE

The unit value for each sub-account's first valuation period is set at $10. The
unit value for each subsequent valuation period is determined by multiplying the
unit value at the end of the immediately preceding valuation period by the net
investment factor for the valuation period for which the value is being
determined.

The unit value for a valuation period applies to each day in that period. The
unit value may increase or decrease from one valuation period to the next.

NET INVESTMENT FACTOR

The net investment factor is an index that measures the investment performance
of a sub-account from one valuation period to the next. Each sub-account has a
net investment factor, which may be greater than or less than one.

The net investment factor for each sub-account for a valuation period equals 1
plus the rate of return earned by the relevant portfolio, adjusted for the
effect of taxes charged or credited to the sub-account and the mortality and
expense risk charge.

The rate of return of the relevant portfolio is equal to the fraction obtained
by dividing (a) by (b) where:

(a) is the net investment income and net gains, realized and unrealized,
credited during the current valuation period; and
(b) is the value of the net assets of the relevant portfolio at the end of
the preceding valuation period, adjusted for the net capital
transactions and dividends declared during the current valuation
period.

TRANSFERS

TRANSFER PRIVILEGE

You may transfer all or a part of an amount in the sub-account(s) to another
sub-account(s) or to the Fixed Account, or transfer a part of an amount in the
Fixed Account to the sub-account(s), subject to these general restrictions and
the additional restrictions in "Restrictions on Transfers from Fixed Account":
1. the Company's minimum transfer amount, currently $250;
2. a transfer request that would reduce the amount in that
sub-account or the Fixed Account below $500 will be treated as a
transfer request for the entire amount in that sub-account or the
Fixed Account; and

<PAGE> 44

3. transfers from the Fixed Account except from the one year
Guarantee Period may be subject to a Market Value Adjustment.

We cannot guarantee that a sub-account or shares of a portfolio will always be
available. If you request an amount in a sub-account or Fixed Account be
transferred to a sub-account at a time when the sub-account or underlying
portfolio is unavailable, we will not process your transfer request, and this
request will not be counted as a transfer for purposes of determining the number
of free transfers executed. The Company reserves the rights to change its
minimum transfer amount requirements.

TELEPHONE TRANSFER PRIVILEGE

You may direct us to act on transfer instructions given by telephone, subject to
our procedures, by initialing the authorization on the application or by
subsequently completing our administrative form. The authorization will continue
in effect until we receive your written revocation or we discontinue this
privilege. We reserve the right to change our procedures and to discontinue this
privilege.

We will employ reasonable procedures to confirm that instructions communicated
by telephone are genuine. If we do not employ such reasonable procedures, we may
be liable for any losses due to unauthorized or fraudulent instructions. These
procedures may include, but are not limited to, possible recording of telephone
calls and obtaining appropriate personal security codes and contract number
before effecting any transfers.

DOLLAR COST AVERAGING PRIVILEGE ("DCA")

You may elect to have us automatically transfer specified amounts FROM ANY ONE
variable sub-account or the one year Guarantee Period under the Fixed Account
(either one a "disbursement" account) TO ANY OTHER variable sub-account(s) or
Guarantee Period under the Fixed Account on a periodic basis, subject to our
administrative procedures and the restrictions in "Transfer Privilege" above.
This privilege is intended to allow you to utilize "Dollar Cost Averaging," a
long-term investment method which provides for regular, level, investments over
time. We make no representation or guarantee that DCA will result in a profit or
protect against loss.

To initiate DCA, we must receive your written notice on our form. Once elected,
such transfers will be processed until the entire value of the sub-account or
the one year Guarantee Period under the Fixed Account is completely depleted; or
we receive your written revocation of such monthly transfers; or we discontinue
this privilege. We reserve the right to change our procedures or to discontinue
the DCA privilege upon 30 days written notice to you.

RESTRICTIONS ON TRANSFERS FROM FIXED ACCOUNT

Other than transfers made pursuant to DCA, you may transfer an amount from a
Guarantee Period under the Fixed Account to the sub-account(s) of the Variable
Account, subject to these additional restrictions:

<PAGE> 45

1. Transfers from a Guarantee Period other than the one year Guarantee
Period may be subject to a Market Value Adjustment.
2. Transfers from one Guarantee Period to another are prohibited other
than within the 30 day window.

Under our current procedures, the transfer will be made on the valuation date
that occurs on or next following the date we receive your transfer request at
our Home Office.

TRANSFER PROCESSING FEE

There is no limit to the number of transfers that you can make between
sub-accounts or to the Fixed Account. However, other than transfers made
pursuant to DCA, we only allow one transfer each year from the Guarantee Periods
under the Fixed Account (see "Restrictions on Transfers from Fixed Account"
above). The first 12 transfers during each policy year are free under our
current policy, which we reserve the right to change. Although, currently we do
not charge for transfers exceeding 12, we reserve the right to charge a $25 fee
per transfer. For the purposes of assessing the fee, each transfer request
(which includes a written notice or telephone call, but does not include dollar
cost averaging automatic transfers) is considered to be one transfer, regardless
of the number of sub-accounts or the Fixed Account affected by the transfer. The
processing fee will be charged proportionately to the receiving sub-account(s)
and/or the Fixed Account.

PAYMENT OF PROCEEDS

PROCEEDS

Proceeds means the amount we will pay under your policy when the first of the
following events occurs: the annuity date or maturity date; or the policy is
surrendered; or we receive due proof of death of the last surviving annuitant or
any owner. We will pay any proceeds in a single sum that may be payable due to
death before the annuity date or maturity date, unless an election is made for a
payment option. See "Election of Options" on page __. The policy ends when we
pay the proceeds.

"Due Proof of Death" is proof of death that is satisfactory to us. Such proof
may consist of: 1) a certified copy of the dath certificate; and/or 2) a
certified copy of the decree of a court of competent jurisdiction as to the
finding of death.

For any annuity benefit with payments of five years or more, such annuity
benefits at the time the policy value is applied under a payment option will not
be less than those that would be provided by the application of an amount to
purchase any single premium immediate annuity policy offered by us at the time
to the same class of annuitants. Such amount shall be the greater of the cash
surrender value or 95% of what the cash surrender value would be if there were
no surrender charge.

PROCEEDS ON ANNUITY DATE OR MATURITY DATE

If Payment Option 1 is in effect on the annuity date, the proceeds we will pay
is the policy value. See "Payment Options" on page__. If the proceeds are paid
in a lump sum on the annuity date, we will pay the cash surrender value.

<PAGE> 46

An option may not be elected and we will pay the proceeds in a lump sum if the
amount to be applied under a payment option is less than $2,000 or any periodic
payment under the payment option would be less than $20.

You may change the annuity date, subject to these limitations:

1. we must receive your written notice at our Home Office at least
30 days before the current annuity date;
2. the requested annuity date must be a date that is at least 30
days after we receive your written notice; and
3. the requested annuity date should be no later than the maturity
date

The proceeds on the Maturity Date will be the policy value. The Maturity Date is
the first day of the month after any annuitant's 85th birthday (90th birthday
pending regulatory approval).

PROCEEDS ON SURRENDER

If you surrender the policy before the annuity date, the proceeds we will pay is
the cash surrender value. The cash surrender value is the policy value, less any
applicable surrender charge, the policy administration charge and any applicable
Market Value Adjustment. The cash surrender value will be determined on the date
we receive your written notice for surrender and this policy at our Home Office.

You may surrender the policy for its cash surrender value at any time before the
earlier of the death of the annuitant, the annuity date or maturity date.
However, the surrender proceeds may be subject to a federal income tax,
including a penalty tax. See "Federal Tax Status" on page __.

You may elect to have the cash surrender value paid in a single sum or under a
payment option. See "Payment Options" on page__. The policy ends when we pay the
cash surrender value.

PROCEEDS ON DEATH OF LAST SURVIVING ANNUITANT BEFORE ANNUITY DATE OR MATURITY
DATE (THE DEATH BENEFIT)

If we receive due proof of death of the last surviving annuitant before the
annuity date or maturity date ("such due proof"), the proceeds we will pay to
the beneficiary is the death benefit.

THE FOLLOWING APPLIES ONLY TO POLICIES ISSUED ON OR AFTER MAY 1, 1996 OR
SUCH LATER DATE AS APPLICABLE REGULATORY APPROVALS ARE OBTAINED:

If we receive such due proof during the first five years, the death
benefit is the greater of:
1. the premiums paid, less: a) any partial withdrawals,
including applicable surrender charges; and b) any
incurred taxes; or
2. the policy value on the date we receive due proof of the
annuitant's death.

If we receive such due proof after the first five policy years, the
death benefit is the greatest of:
1. item "1" above; or
2. item "2" above; or
3. the policy value at the end of the most recent 5 policy
year period preceding the date we receive due proof of the
annuitant's death, adjusted for any of the following items
that occur after such last 5 policy year period: a) less any
partial withdrawals, including applicable surrender charges;
b) less any incurred taxes; and c) plus any premiums paid.
The 5 policy year periods are measured from the policy date
(i.e., 5, 10, 15, 20, etc.).

<PAGE> 47

If on the date the policy was issued, all annuitants were attained age
80 or less, then after any annuitant attains age 81, the death benefit
is the greater of items "1" or "2" above. However, if on the date the
policy was issued, any annuitant was attained age 81 or more, then the
death benefit is the policy value.

If we receive such due proof during the first seven policy years, the
death benefit is the greater of:
1. the premiums paid, less: a) any partial withdrawals,
including applicable surrender charges; and b) any
incurred taxes; or
2. the policy value on the date we receive due proof of the
annuitant's death.

If we receive such due proof after the first seven policy years, the
death benefit is the greatest of:
1. item "1." above; or
2. item "2." above; or
3. the policy value at the end of the most recent 7 policy
year period preceding the date we receive due proof of
the annuitant's death, adjusted for any of the following
items that occur after such last 7 policy year period:
a) less any partial withdrawals, including applicable
surrender charges; b) less any incurred taxes; and c)
plus any premiums paid. The 7 policy year periods are
measured from the policy date (i.e., 7, 14, 21, 28,
etc.). No further step-ups in Death Benefits will occur
after the age of 80.

THE FOLLOWING APPLIES ONLY TO CONTRACTS ISSUED PRIOR TO MAY 1, 1995 OR
SUCH LATER DATE AS APPLICABLE REGULATORY APPROVALS ARE OBTAINED IN THE
JURISDICTION IN WHICH THE CONTRACTS ARE OFFERED.

If we receive such due proof during the first five policy years, the
death benefit is the greater of:

1. the premiums paid, less: a) any partial withdrawals,
including applicable surrender charges; and b) any
incurred taxes; or
2. the policy value on the date we receive due proof of the
annuitant's death.

If we receive such due proof after the first five policy years, the
death benefit is the greatest of:

1. item "1" above; or

2. item "2" above; or

3. the policy value at the end of the most recent 5 policy
year period preceding the date we receive due proof of the
annuitant's death, adjusted for any of the following
items that occur after such last 5 policy year period:
a) less any partial withdrawals, including applicable
surrender charges; b) less any incurred taxes; and c) plus
any premiums paid. The 5 policy year periods are measured
from the policy date (i.e., 5, 10, 15, 20, etc.).

No death benefit is payable if the policy is surrendered before the last
surviving annuitant's death.

PROCEEDS ON DEATH OF ANY OWNER BEFORE OR AFTER ANNUITY DATE OR MATURITY DATE

If you are not the annuitant, and we receive due proof of your death before the
annuity date or maturity date we will pay the beneficiary the policy value as of
the date we receive due proof of your death. If you are the last surviving
annuitant, and we receive due proof of your death before the annuity date or
maturity date we will pay the beneficiary the death benefit described in
"Proceeds on Death of Annuitant Before Annuity Date or Maturity Date." If any
owner dies before the annuity date, Federal tax law requires the policy value be
distributed within five years after the date of such owner's death regardless of
whether

<PAGE> 48

such owner is or is not an annuitant, unless such owner's spouse is the
designated beneficiary, in which case the policy may be continued with the
surviving spouse as the new owner. All such distributions will be made in
accordance with the requirements of the Investment Company Act of 1940.

A "designated beneficiary" is the person designated by you as a beneficiary and
to whom the benefits of the policy pass by reason of an owner's death and must
be a natural person.

If any owner dies on or after the earlier of the annuity date, any remaining
payments must be distributed at least as rapidly as under the payment option in
effect on the date of such owner's death.

The distribution requirements described above will be considered satisfied as to
any portion of the proceeds:

1. payable to or for the benefit of a designated beneficiary; and
2. which is distributed over the life (or period not exceeding the
life expectancy) of that beneficiary, provided that the
beneficiary is a natural person and such distributions begin
within one year of the owner's death.

If you are not a natural person, the primary annuitant as determined in
accordance with Section 72(s) of the Code (i.e., the individual the events in
the life of whom are of primary importance in effecting the timing or amount of
the payout under the policy) will be treated as an owner for purposes of these
distribution requirements, and any change in the primary annuitant will be
treated as the death of an owner.

PARTIAL WITHDRAWALS

You may withdraw part of the cash surrender value at any time before the
earlier of the death of the last surviving annuitant, the annuity date or
maturity date, subject to these limits:
1. the Company's minimum partial withdrawal, currently $250;
2. the maximum partial withdrawal is the amount that would leave a
cash surrender value of $5,000;
3. a partial withdrawal request which would reduce the amount in a
sub-account or a Guarantee Period under the Fixed Account below
$500 will be treated as a request for a full withdrawal of the
amount in that sub-account or a Guarantee Period; and
4. a partial withdrawal request for an amount exceeding $10,000 must
be accompanied by a guarantee of the owner's signature by a
commercial bank, trust company, or savings and loan.

On the date we receive your written notice for a partial withdrawal at our Home
Office, we will withdraw the amount of the partial withdrawal from the policy
value, and we will then deduct any applicable surrender charge from the
remaining policy value. The Company reserves the right to change its minimum
partial withdrawal amount requirements.

You may specify the amount to be withdrawn from certain sub-accounts or
Guarantee Periods under the Fixed Account. If you do not provide this
information to us, we will withdraw proportionately from the sub-accounts and
the Guarantee Periods under the Fixed Account in which you are invested. If you
do provide this information to us, but the amount in the designated sub-accounts
and Guarantee Periods is inadequate to comply with your withdrawal request, we
will first withdraw from the specified sub-accounts and the Guarantee Periods
under the Fixed Account. The remaining balance will be withdrawn proportionately
from the other sub-accounts and the Guarantee Periods in which you are invested.

Any partial or systematic withdrawal may be included in the owner's gross income
in the year in which the withdrawal occurs, and may be subject to federal income
tax, including a penalty tax equal to 10% of the amount treated as taxable
income, and the Code restricts certain distributions under Tax-Sheltered Annuity
Plans and other qualified plans. See "Federal Tax Status" on page __.

<PAGE> 49

SYSTEMATIC WITHDRAWAL PRIVILEGE ("SWP")

You may elect to withdraw a fixed-level amount from the sub-account(s) and the
Guarantee Period(s) under the Fixed Account on a monthly, quarterly, or
semi-annual basis beginning 30 days after the Effective Date, if we receive your
written notice on our form and the policy meets the Company's minimum premium,
currently $25,000, and in accordance with "Partial Withdrawals" above (when
surrender charges are applicable). No minimum is necessary when Surrender
Charges are not applicable. While Surrender Charges are applicable, each year
you may withdraw as follows:

1. Up to 100% of positive investment earnings of each variable
sub-account available at the time the SWP is executed/processed;
PLUS
2. Up to 100% of current policy year's interest on the FIXED
ACCOUNT available at the time the SWP is executed/processed;
PLUS
3. Up to 10% of total premiums still subject to a surrender charge;
PLUS 4. Up to 100% of total premiums NOT SUBJECT TO A SURRENDER
CHARGE.

NOTE: Withdrawals other than from the one year Guarantee Period will be
subject to a Market Value Adjustment.

When no Surrender Charges are applicable, the entire policy is available for
systematic withdrawal. The Systematic Withdrawal Privilege will end at the
earliest of the date: when the sub-account(s) and Guarantee Period(s) you
specified for these withdrawals has no remaining amount to withdraw; or the cash
surrender value is reduced to $5,000; or you elect to pay premiums by
pre-authorized check; or we receive your written notice to end this privilege;
or we elect to discontinue this privilege upon 30 days written notice to you.
Use of this privilege during a policy year counts as your first 10% free
withdrawal of total premiums under the "Surrender Charge" provision. References
to partial withdrawals in other provisions of this Prospectus include systematic
withdrawals. If applicable, a charge for premium taxes may be deducted from each
systematic withdrawal payment. The Company reserves the right to change its
minimum systematic withdrawal amount requirements.

PORTFOLIO REBALANCING ("REBALANCING")

Portfolio Rebalancing is an investment strategy in which, on a quarterly,
semi-annual or annual basis, your policy value in the sub-accounts only is
reallocated back to its original portfolio allocation, regardless of changes in
individual portfolio values from the time of the last Rebalancing. We make no
representation or guarantee that Rebalancing will result in a profit, protect
you against loss or ensure that you meet your financial goals.

To initiate Rebalancing, we must receive your written notice on our form.
Participation in Rebalancing is voluntary and can be modified or discontinued at
any time by you in writing on our form. Portfolio Rebalancing is not available
for amounts invested and earnings thereon in the Fixed Account.

Once elected, we will continue to perform Rebalancing until we are instructed
otherwise. We reserve the right to change our procedures or discontinue offering
Rebalancing upon 30 days written notice to you.

<PAGE> 50

LOANS

The Company may offer a loan privilege to owners of policies issued in
connection with Section 403(b) qualified plans that are not subject to Title I
of ERISA. If offered, owners of such policies may obtain loans using the policy
as the only security for the loan. Loans are subject to provisions of the Code
and to applicable retirement program rules (collectively, "loan rules"). Tax
advisers and retirement plan fiduciaries should be consulted prior to exercising
loan privileges. Policy loans that satisfy certain requirements with respect to
loan amount and repayment are not treated as taxable distributions. If these
requirements are not satisfied, or if the policy terminates while a loan is
outstanding, the loan balance will be treated as a taxable distribution and may
be subject to penalty tax, and the treatment of the policy under Section 403(b)
may be adversely affected.

If loans are offered, the following will apply:

Under the terms of the policy, qualified policies have a maximum loan
value equal to 80% of the policy value, although loan rules may serve to
reduce such maximum loan value in some cases. The amount available for a
loan at any given time is the loan value less any outstanding debt. Debt
equals the amount of any loans plus accrued interest. Loans will be made
only upon written request from the owner. The Company will make loans
within seven days of receiving a properly completed loan application
(applications are available from the Company), subject to postponement
under the same circumstances that payment of withdrawals may be
postponed. See "Partial Withdrawals" on page __.

When an owner requests a loan, the Company will reduce the owner's
investment in the investment accounts and transfer the amount of the
loan to the loan account, a part of the Company's general account. The
owner may designate the investment accounts from which the loan is to be
withdrawn. Absent such a designation, the amount of the loan will be
withdrawn from the investment accounts in accordance with the rules for
making partial withdrawals. See "Partial Withdrawals" on page __. The
policy provides that owners may repay policy debt at any time. Under
applicable loan rules, loans generally must be repaid within five years,
repayments must be made at least quarterly and repayments must be made
in substantially equal amounts. When a loan is repaid, the amount of the
repayment will be transferred from the loan account to the investment
accounts. The owner may designate the investment accounts to which a
repayment is to be allocated. Otherwise, the repayment will be allocated
in the same manner as the owner's most recent premium (for policies
issued after April 30, 1995, or such later date as regulatory approval
is obtained) or most recent premium (for policies issued prior to May 1,
1995, or such later date as regulatory approval is obtained). On each
policy anniversary, the Company will transfer from the investment
accounts to the loan account the amount by which the debt on the policy
exceeds the balance in the loan account.

The Company charges interest of 6% per year on policy loans. Loan
interest is payable in arrears and, unless paid in cash, the accrued
loan interest is added to the amount of the debt and bears interest at
6% as well. The Company credits interest with respect to amounts held in
the loan account at a rate of 4% per year. Consequently, the net cost of
loans under the policy is 2%. If on any date debt under a policy exceeds
the policy value, the policy will be in default. In such case the owner
will receive a notice indicating the payment needed to bring the policy
out of default and will have a thirty-one day grace period within which
to pay the default amount. If the required payment is not made within
the grace period, the policy will be foreclosed (terminated without
value).

The amount of any debt will be deducted from the minimum death benefit.
See "Proceeds on Death of Last Surviving Annuitant Before Annuity Date
or Maturity Date" on page ___. In addition, debt, whether or not repaid,
will have a permanent effect on the policy value because the investment
results of the investments accounts will apply only to the unborrowed
portion of the policy value. The longer debt is outstanding, the greater
the effect is likely to be. The effect could be favorable or
unfavorable. If the investment results are greater than the rate being
credited on amounts held in the loan account while the debt is
outstanding, the policy value will not

<PAGE> 51

increase as rapidly as it would have if no debt were outstanding. If
investment results are below that rate, the policy value will be higher
than it would have been had no debt been outstanding.

PAYMENT OF BENEFITS, PARTIAL WITHDRAWALS, CASH SURRENDERS AND TRANSFERS -
POSTPONEMENT

We will usually pay any proceeds payable, amounts partially withdrawn, or
the cash surrender value within seven calendar days after:
1. we receive your written notice for a partial withdrawal or a cash
surrender; or
2. the date chosen for any systematic withdrawal; or
3. we receive due proof of your death or the death of the last
surviving annuitant.

However, we can postpone the payment of proceeds, amounts withdrawn, the
cash surrender value, or the transfer of amounts between sub-accounts if:

1. the New York Stock Exchange is closed, other than customary
weekend and holiday closings, or trading on the exchange is
restricted as determined by the SEC; or
2. the SEC permits by an order the postponement for the protection
of policyowners; or
3. the SEC determines that an emergency exists that would make the
disposal of securities held in the Variable Account or the
determination of the value of the Variable Account's net assets
not reasonably practicable.

If the cash surrender value payable at a surrender, partial withdrawal or in
a lump sum on the annuity date or maturity date is not mailed or delivered
within ten working days after we receive the documentation necessary to
complete the transaction, we will add interest from the date we receive the
necessary documentation, unless the amount of such interest is less than
$25. The rate of interest we will apply is the rate the company pays for
dividends on deposit in our whole life insurance portfolio. We guarantee
that the interest rate will never be less than 2.5%.

We have the right to defer payment of any partial withdrawal, cash
surrender, or transfer from the Fixed Account for up to six months from the
date we receive your written notice for a withdrawal, surrender or transfer.

CHARGES AGAINST THE POLICY, VARIABLE ACCOUNT, AND FUNDS

SURRENDER CHARGE

No deduction for a sales charge is made when premiums are paid. However, a
surrender charge (contingent deferred sales charge) will be deducted when
certain partial withdrawals and cash surrenders are made to at least
partially reimburse us for certain expenses relating to the sale of the
policy, including commissions to registered representatives and other
promotional expenses. A surrender charge may also be applied to the proceeds
paid on the annuity date, unless the proceeds are applied under Payment
Option 1.

For the purpose of determining if any surrender charge applies and the
amount of such charge, partial withdrawals and surrenders are taken
according to these rules from policy value attributable to premiums or
investment earnings in the following order:

<TABLE>
<CAPTION>
SURRENDER CHARGE
<S> <C>
1. Up to 100% of positive investment earnings of each variable sub-account available at
the time the request is made, once a policy year, PLUS..........................................................None
2. Up to 100% of current policy year's interest on the FIXED ACCOUNT at the time the
request for surrender/withdrawal is made, once a policy year, PLUS..............................................None
</TABLE>

<PAGE> 52

<TABLE>
<S> <C>
3. Up to 10% of total premiums STILL SUBJECT TO A SURRENDER CHARGE, once a policy
year, PLUS......................................................................................................None
4. Up to 100% of those premiums NOT SUBJECT TO A SURRENDER CHARGE, available
at any time.....................................................................................................None
5. Premiums subject to a surrender charge:

For policies issued prior to May 1, 1995 or such later date as
applicable regulatory approvals are obtained in the jurisdiction
in which the contracts are offered (For 5 years from the date of
payment, each premium is subject to a 6% surrender
charge. After the 5th year, no surrender charge will apply to such payment)................................6%

For policies issued after April 30, 1995 or such later date as
applicable regulatory approvals are obtained in the jurisdiction
in which the contracts are offered:
Policy Years Since Premium Was Paid
Less than 1.........................................................................................6%
At least 1, but less than 2.........................................................................6%
At least 2, but less than 3.........................................................................5%
At least 3, but less than 4.........................................................................5%
At least 4, but less than 5.........................................................................4%
At least 5, but less than 6.........................................................................3%
At least 6, but less than 7.........................................................................2%
At least 7........................................................................................None
</TABLE>

Any surrender charge will be deducted proportionately from the
sub-account(s) or the Guarantee Periods under the Fixed Account being
surrendered or partially withdrawn in relation to the amount(s) withdrawn.
If the amount remaining in a sub-account or a Guarantee Period after the
withdrawal is insufficient to cover the proportionate surrender charge
deduction, the balance of the surrender charge will be assessed
proportionately from any other sub-account and Guarantee Period in which you
are invested.

POLICY ADMINISTRATION CHARGE

To cover the costs of providing certain administrative services attributable
to the policies and the operations of the Variable Account, including policy
records, communicating with policyowners, and processing transactions, we
deduct a policy administration charge of $30 for the prior policy year on
each policy anniversary. If the policy value on the policy anniversary is
$75,000 or more, we will waive the policy administration charge for the
prior policy year. We will also deduct this charge for the current policy
year if the policy is surrendered for its cash surrender value, unless the
policy is surrendered on a policy anniversary.

The charge will be assessed proportionately from any sub-accounts and the
Guarantee Periods under the Fixed Account in which you are invested. If the
charge is obtained from one of the sub-accounts, we will cancel the
appropriate number of units credited to this policy based on the unit value
at the end of the valuation period when the charge is assessed.

<PAGE> 53

DAILY ADMINISTRATION FEE

At each valuation period, we deduct a daily administration fee at an
effective annual rate of 0.15% from the net assets of each sub-account of
the Variable Account. This daily administration fee is intended to reimburse
us for other administrative costs under the policies.

TRANSFER PROCESSING FEE

The first 12 transfers during each policy year are free under our current
policy, which we reserve the right to change. Although, currently we do not
charge for transfers exceeding 12, we reserve the right to charge a $25 fee
per transfer. For the purposes of assessing the fee, each transfer request
(which includes a written notice or telephone call, but does not include
dollar cost averaging automatic transfers) is considered to be one transfer,
regardless of the number of sub-accounts or Guarantee Periods under the
Fixed Account affected by the transfer. The processing fee will be charged
proportionately to the receiving sub-account(s) and/or the Fixed Account.
See "Transfers" on page __ for the rules concerning transfers.

ANNUALIZED MORTALITY AND EXPENSE RISK CHARGE

The mortality risk we assume is the risk that annuitants may live for a
longer period of time than we estimated when we established our guarantees
in the policy. Because of these guarantees, each annuitant is assured that
their longevity will not have an adverse effect on the annuity payments they
receive. The mortality risk we assume also includes our guarantee to pay a
death benefit if the annuitant dies before the annuity date or maturity
date. The expense risk we assume is the risk that the surrender charges,
policy administration charges, daily administration fee, and transfer fees
may be insufficient to cover our actual future expenses.

The annual mortality and expense risk charge is deducted at each valuation
period from the assets of the Variable Account at an effective annual rate
of 1.25% of the value of the net assets in the Variable Account. We
guarantee that the rate of this charge will never increase. This charge is
not made after the earlier of the annuity date or maturity date, and this
charge is not made against any Fixed Account value. This charge consists of
approximately 0.85% to cover the mortality risk, and approximately 0.40% to
cover the expense risk.

REDUCTION OR ELIMINATION OF SURRENDER CHARGES

The amount of the surrender charge on a policy may be reduced or eliminated
when some or all of the policies are to be sold to a group of individuals in
such a manner that results in savings of sales expenses. In determining
whether to reduce the surrender charge, the Company will consider certain
factors including the following:

<PAGE> 54

1. The size and type of group to which the sales are to be made
will be considered. Generally, sales expenses for a larger group
are smaller than for a smaller group because of the ability to
implement large numbers of sales with fewer sales contacts.
2. The total amount of premiums to be received will be considered.
Per dollar sales expenses are likely to be less on larger
premiums than on smaller ones.
3. Any prior or existing relationship with the Company will be
considered. Policy sales expenses are likely to be less when
there is a prior or existing relationship because of the
likelihood of implementing more sales with fewer sales contacts.
4. The level of commissions paid to selling broker-dealers will be
considered. Certain broker-dealers may offer policies in
connection with financial planning programs offered on a fee for
service basis. In view of the financial planning fees, such
broker-dealers may elect to receive lower commissions for sales
of the policies, thereby reducing the Company's sales expenses.

If, after consideration of the foregoing factors, it is determined that
there will be a reduction in sales expenses, the Company will provide a
reduction in the surrender charge. The surrender charge will be eliminated
when a policy is issued to an officer, director, employee, or relative
thereof of: the Company; The Canada Life Assurance Company; J. & W. Seligman
Co. Incorporated; or any of their affiliates. In no event will reduction or
elimination of the surrender charge be permitted where such reduction or
elimination will be discriminatory to any person.

REDUCTION OR ELIMINATION OF POLICY ADMINISTRATION CHARGE

The amount of the policy administration charge on a policy may be reduced or
eliminated when some or all of the policies are to be sold to a group of
individuals in such a manner that results in savings of administration
expenses. In addition, if the policy value on the policy anniversary is
$75,000 or more, we will waive the policy administration charge for the
prior policy year. In determining whether to reduce or eliminate the
administration charges, the Company will consider certain factors including
the following:
1. The size and type of group to which administrative services are
to be provided will be considered.
2. The total amount of premiums to be received will be considered.

If, after consideration of the foregoing factors, it is determined that
there will be a reduction or elimination of administration expenses, the
Company will provide a reduction in the policy administration charge. In no
event will reduction or elimination of the administration charge be
permitted where such reduction or elimination will be discriminatory to any
person.

TAXES

No premium tax is currently payable under New York law. We reserve the
right to deduct any premium taxes payable in respect of future premiums in
the event New York law should change.

When any tax is deducted from the policy value, it will be deducted
proportionately from the sub-accounts and the Guarantee Periods under the
Fixed Account in which you are invested.

We reserve the right to charge or provide for any taxes levied by any
governmental entity, including:
1. taxes that are against or attributable to premiums, policy values
or annuity payments; or
2. taxes that we incur which are attributable to investment income
or capital gains retained as part of our reserves under the
policies or from the establishment or maintenance of the
Variable Account.

<PAGE> 55
OTHER CHARGES INCLUDING INVESTMENT ADVISORY FEES

Each portfolio is responsible for all of its operating expenses. In
addition, fees for investment advisory services are charged monthly from
each portfolio at an annual rate of the monthly net assets of the portfolio.
The Prospectus and Statement of Additional Information for each Fund
provides more information concerning the investment advisory fee, other
charges assessed against the portfolio(s) each Fund offers, and the
investment advisory services provided to such portfolio(s).

PAYMENT OPTIONS

The policy ends when we pay the proceeds on the earlier of the annuity date
or maturity date. On the annuity date, we will apply the policy value under
Payment Option 1, unless you have an election of a payment option on file at
our Home Office to receive the cash surrender value in a single sum, or to
receive a mutually agreed upon payment option (Payment Option 2). See
"Proceeds on Annuity Date or Maturity Date" on page __. We require the
surrender of your policy so that we may pay the cash surrender value or
issue a supplemental contract for the applicable payment option. The term
"payee" means a person who is entitled to receive payment under this
section.

ELECTION OF OPTIONS

You may elect an option or revoke or change your election at any time before
the annuity date or maturity date while the annuitant is living. If an
election is not in effect at the annuitant's death or if payment is to be
made in one sum under an existing election, the beneficiary may elect one of
the options. This election must be made within one year after the last
surviving annuitant's death and before any payment has been made.

An election of an option and any revocation or change must be made in a
written notice. It must be filed with our Home Office with the written
consent of any irrevocable beneficiary or assignee.

An option may not be elected and we will pay the proceeds in one sum if
either of the following conditions exist:

1. the amount to be applied under the option is less than $2,000; or
2. any periodic payment under the election would be less than $20.

DESCRIPTION OF PAYMENT OPTIONS

Payment Option 1: Life Income

We will pay the proceeds in equal amounts at the beginning of each month,
during the payee's lifetime.

The amount of each payment will be determined from the tables in the policy
which apply to Payment Option 1, using the payee's age. Age will be
determined from the nearest birthday at the due date of the first payment.

Payment Option 2: Mutual Agreement

We will pay the proceeds according to other terms, if those terms are
mutually agreed upon.

PAYMENT DATES

The payment dates of the options will be calculated from the date on which
the proceeds become payable.

<PAGE> 56
AGE AND SURVIVAL OF PAYEE

We have the right to require proof of age of the payee(s) before making any
payment. When any payment depends on the payee's survival, we will have the
right, before making the payment, to require proof satisfactory to us that
the payee is alive.

DEATH OF PAYEE

At the death of the payee, or the last survivor of the payees, any amount
remaining to be paid under this section will become payable in one sum,
unless specified otherwise.

BETTERMENT OF INCOME

The annuity benefits at the time the policy value is applied under a payment
option will not be less than those that would be provided by the application
of an amount defined in the policy to purchase any single premium annuity
policy offered by us at the time to the same class of annuitants. Such
amount will be the greater of the cash surrender value or 95% of what the
cash surrender value would be if there were no surrender charge.

OTHER POLICY PROVISIONS

OWNER OR JOINT OWNER

During any annuitant's lifetime and before the earlier of the annuity date
or maturity date, you have all the rights and privileges granted by the
policy. If you appoint an irrevocable beneficiary or assignee, then your
rights will be subject to those of that beneficiary or assignee.

During any annuitant's lifetime and before the earlier of the annuity date
or maturity date, you may name a new owner, joint owner or annuitant by
giving us written notice.

With respect to Qualified Policies generally, however, the contract may not
be assigned (other than to us), joint ownership is not permitted, and the
Owner must be the annuitant.

BENEFICIARY

We will pay the beneficiary any proceeds payable on your death or the death
of the last surviving annuitant. During the annuitant's lifetime and before
the earlier of the annuity date or maturity date, you may name and change
one or more beneficiaries by giving us written notice. However, we will
require written notice from any irrevocable beneficiary or assignee
specifying their consent to the change.

We will pay the proceeds under the beneficiary appointment in effect at the
date of death. If you have not designated otherwise in your appointment, the
proceeds will be paid to the surviving beneficiary(ies) equally. If no
beneficiary is living when you die or the last surviving annuitant dies, or
if none has been appointed, the proceeds will be paid to you or to your
estate.

WRITTEN NOTICE

Written Notice must be signed by you, dated, and of a form and content
acceptable to us. Your written notice will not be effective until we receive
it at our Home Office. However, the change provided in your written notice
to name or change the owner or beneficiary will then be effective as of the
date you signed the written notice:
1. subject to any payments made or other action we take before we
receive and file your written notice; and
2. whether or not you or the last surviving annuitant are alive when
we receive and file your written notice.

<PAGE> 57

PERIODIC REPORTS

We will mail you a report showing the following items about your policy:
1. the number of units credited to the policy and the dollar value
of a unit;
2. the policy value;
3. any premiums paid, withdrawals, and charges made since the last
report; and
4. any other information required by law.

The information in the report will be as of a date not more than two months
before the date of the mailing. We will mail the report to you:
1. at least annually, or more often as required by law; and
2. to your last address known to us.

ASSIGNMENT

You may assign a nonqualified policy or an interest in it at any time before
the earlier of the annuity date or maturity date during any annuitant's
lifetime. An assignment must be in a written notice acceptable to us. It
will not be binding on us until we receive and file it at our Home Office.
We are not responsible for the validity of any assignment. Your rights and
the rights of any beneficiary will be affected by an assignment.

An assignment of a nonqualified policy may result in certain tax
consequences to the owner. See "Transfers, Assignment or Exchanges of a
Policy" on page __.

MODIFICATION

Upon notice to you, we may modify the policy, but only if such modification:
1. is necessary to make the policy or the Variable Account comply
with any law or regulation issued by a governmental agency to
which we are subject; or
2. is necessary to assure continued qualification of the policy
under the Code or other federal or state laws relating to
retirement annuities or variable annuity policies; or
3. is necessary to reflect a change in the operation of the Variable
Accounts; or
4. provides additional variable account and/or fixed accumulation
options.

In the event of any such modification, we may make any appropriate
endorsement to the policy.

YIELDS AND TOTAL RETURNS

From time to time, we may advertise yields, effective yields, and total
returns for the sub-accounts. THESE FIGURES ARE BASED ON HISTORICAL EARNINGS
AND DO NOT INDICATE OR PROJECT FUTURE PERFORMANCE. Each sub-account may,
from time to time, advertise performance relative to certain performance
rankings and indices compiled by independent organizations. More detailed
information as to the calculation of performance information, as well as
comparisons with unmanaged market indices, appears in the Statement of
Additional Information.

Effective yields and total returns for the sub-accounts are based on the
investment performance of the corresponding portfolio of the Funds. The
Funds' performance in part reflects the Funds' expenses including any
expense reimbursement or fee waiver arrangements as previously described.

<PAGE> 58

The yield of the Money Market Sub-Account refers to the annualized income
generated by an investment in the Sub-Account over a specified 7 day period.
The yield is calculated by assuming that the income generated for that 7 day
period is generated each 7 day period over a 52 week period and is shown as
a percentage of the investment. The effective yield is calculated similarly
but, when annualized, the income earned by an investment in the 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.

The yield of a sub-account (except the Money Market Sub-Account) refers to
the annualized income generated by an investment in the sub-account over a
specified 30 day or one month period. The yield is calculated by assuming
that the income generated by the investment during that 30 day or one month
period is generated each period over a 12 month period and is shown as a
percentage of the investment.

The total return of a sub-account refers to return quotations assuming an
investment under a policy has been held in the sub-account 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 1, 5, and 10 years, respectively, the total return for these
periods will be provided.

The average annual total return quotations represent the average annual
compounded rates of return that would equate an initial investment of $1,000
under a policy to the redemption value of that investment as of the last day
of each of the periods for which total return quotations are provided.
Average annual total return information shows the average percentage change
in the value of an investment in the sub-account from the beginning date of
the measuring period to the end of that period. This standardized version of
average annual total return reflects all historical investment results, less
all charges and deductions applied against the sub-account (including any
surrender charge that would apply if an Owner terminated the policy at the
end of each period indicated, but excluding any deductions for premium
taxes).

We may, in addition, advertise total return performance information computed
on a different basis. We may present total return information computed on
the same basis as described above, except deductions will not include the
surrender charge. This presentation assumes that the investment in the
policy persists beyond the period when the surrender charge applies,
consistent with the long-term investment and retirement objectives of the
policy.

We 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 portfolios of mutual funds with investment
objectives similar to each of the sub-accounts. Lipper Analytical Services,
Inc. ("Lipper") and the Variable Annuity Research Data Service ("VARDS") 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. Other services or publications may also be cited in
our advertising and sales literature.

Lipper'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 and VARDS 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

<PAGE> 59

provide the highest total return within various categories of funds defined
by the degree of risk inherent in their investment objectives.

We may also compare the performance of each sub-account in advertising and
sales literature to the Standard & Poor's composite index of 500 common
stocks, a widely used index to measure stock market performance. This
unmanaged index does not reflect any "deduction" for the expense of
operating or managing an investment portfolio. We may also make comparison
to Lehman Brothers Government/Corporate Bond Index, an index that includes
the Lehman Brothers Government Bond and Corporate Bond Indices. These
indices are total rate of return indices. The Government Bond Index includes
the Treasury Bond Index (public obligations of the U.S. Treasury) and the
Agency Bond Index (publicly issued debt of U.S. Government agencies,
quasi-federal corporations, and corporate debt guaranteed by the U.S.
Government). The Corporate Bond Index includes publicly issued, fixed rate,
nonconvertible investment grade dollar-denominated, SEC registered corporate
debt. All issues have at least a one-year maturity, and all returns are at
market value inclusive of accrued interest. Other independent indices such
as those prepared by Lehman Brothers Bond Indices may also be used as a
source of performance comparison.

We may also compare the performance of each sub-account in advertising and
sales literature to the Dow Jones Industrial Average, a stock average of 30
blue chip stock companies that does not represent all new industries. Other
independent averages such as those prepared by Dow Jones & Company, Inc. may
also be used as a source of performance comparison. Day-to-day changes may
not be reflective of the overall market when an average is composed of a
small number of companies.

TAX DEFERRAL

Under current tax laws any increase in policy value is generally not taxable
to you or the annuitant until received, subject to certain exceptions. See
"FEDERAL TAX STATUS" on page __. This deferred tax treatment may be
beneficial to you in building assets in a long-range investment program.

We may also distribute sales literature or other information including the
effect of tax-deferred compounding on a sub-account's investment returns, or
returns in general, which may be illustrated by tables, graphs, charts or
otherwise, and which may include a comparison, at various points in time, of
the return from an investment in a policy (or returns in general) on a
tax-deferred basis (assuming one or more tax rates) with the return on a
currently taxable basis where allowed by state laws. All income and capital
gains derived from sub-account investments are reinvested and compound
tax-deferred until distributed. Such tax-deferred compounding can result in
substantial long-term accumulation of assets, provided that the investment
experience of the underlying portfolios of the Funds is positive.

FEDERAL TAX STATUS

THE FOLLOWING DISCUSSION IS GENERAL AND IS NOT INTENDED AS TAX ADVICE

INTRODUCTION

This discussion is not intended to address the tax consequences resulting
from all of the situations in which a person may be entitled to or may
receive a distribution under the annuity policy we issue. Any person
concerned about these tax implications should consult a tax adviser before
initiating any transaction. This discussion is based upon general
understanding of the present Federal income tax laws. No representation is
made as to the likelihood of the continuation of the present Federal income
tax laws or of the current interpretation by the Internal Revenue Service.
Moreover, no attempt has been made to consider any applicable state or other
tax laws.

<PAGE> 60

The policy may be purchased on a nonqualified tax basis ("Nonqualified
Policy") or purchased and used in connection with plans qualifying for
favorable tax treatment ("Qualified Policy"). The Qualified Policy was
designed for use by individuals whose premium payments are comprised of
proceeds from and/or contributions under retirement plans which are intended
to qualify as plans entitled to special income tax treatment under Sections
401(a), 401(k), 403(a), 403(b), 408 or 457 of the Code. The ultimate effect
of Federal income tax on the amounts held under a policy, or annuity
payments, and on the economic benefit to the owner, the annuitant, or the
beneficiary depends on the type of retirement plan, on the tax and
employment status of the individual concerned and on our tax status. In
addition, certain requirements must be satisfied in purchasing a Qualified
Policy with proceeds from a tax-qualified plan and receiving distributions
from a Qualified Policy in order to continue receiving favorable tax
treatment. Therefore, purchasers of Qualified Policies should seek legal and
tax advice regarding the suitability of a policy for their situation, the
applicable requirements, and the tax treatment of the rights and benefits of
a policy. The following discussion assumes that Qualified Policies are
purchased with proceeds from and/or contributions under retirement plans
that receive the intended special Federal income tax treatment.

THE COMPANY'S TAX STATUS

The Variable Account is not separately taxed as a "regulated investment
company" under Subchapter M of the Code. The operations of the Variable
Account are a part of and taxed with our operations. We are taxed as a life
insurance company under Subchapter L of the Code.

At the present time, we make no charge for any Federal, state or local taxes
(other than premium taxes) that we incur which may be attributable to the
Variable Account or to the policies. However, we do reserve the right to
make a charge in the future for any such tax or other economic burden
resulting from the application of the tax laws that we determine to be
properly attributable to the Variable Account or to the policies.

TAX STATUS OF THE POLICY

DIVERSIFICATION REQUIREMENTS

Section 817(h) of the Code provides that separate account investments
underlying a policy must be "adequately diversified" in accordance with
Treasury regulations in order for the policy to qualify as an annuity policy
under Section 72 of the Code. The Variable Account, through each portfolio
of CLASF, Fidelity VIP, Fidelity VIP II, Seligman, Dreyfus, Dreyfus Socially
Responsible, Alger American, Montgomery, and Berger Trust intends to comply
with the diversification requirements prescribed in regulations under
Section 817(h) of the Code, which affect how the assets in the various
divisions of the Accounts may be invested. Although we do not have control
over CLASF, Fidelity VIP, Fidelity VIP II, Seligman, Dreyfus, Dreyfus
Socially Responsible, Alger American, Montgomery, or Berger Trust in which
the Variable Account invests, we believe that each portfolio in which the
Variable Account owns shares will meet the diversification requirements and
that therefore the Policy will be treated as an annuity under the Code.

In certain circumstances, variable annuity policyowners may be considered
the owners, for Federal income tax purposes, of the assets of the separate
account used to support their policies. In those circumstances, income and
gains from the separate account assets would be includable in the variable
annuity policyowner's gross income. Several years ago, the IRS stated in
published rulings that a variable policyowner will be considered the owner
of separate account assets if the policyowner possesses incidents of
ownership in those assets, such as the ability to exercise investment
control over the assets. More recently, the Treasury Department 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, rather than the insurance
company, to be treated as the owner of the assets in the account." This
announcement also stated that guidance would be issued by

<PAGE> 61

way of regulations or rulings on the "extent to which policyholders may
direct their investments to particular sub-accounts without being treated as
owners of the underlying assets."

The ownership rights under the policy are similar to, but different in
certain respects from, those described by the IRS in rulings in which it was
determined that policyowners were not owners of separate account assets. For
example, the owner of the policy has the choice of more subdivisions to
which to allocate premiums and policy values then such rulings, has a choice
of investment strategies different from such rulings, and may be able to
transfer among subdivisions more frequently than in such rulings. These
differences could result in the policyowner being treated as the owner of
the assets of the Variable Account. In addition, we do not know what
standards will be set forth in the regulations or rulings which the Treasury
Department has stated it expects to issue. We therefore reserve the right to
modify the policy as necessary to attempt to prevent the policyowner from
being considered the owner of the assets of the Variable Account.

REQUIRED DISTRIBUTIONS

In addition to the requirements of Section 817(h) of the Code, in order to
be treated as an annuity policy for Federal income tax purposes, Section
72(s) of the Code requires any Nonqualified Policy to provide that (a) if
any owner dies on or after the annuity commencement date but prior to the
time the entire interest in the Policy has been distributed, the remaining
portion of such interest will be distributed at least as rapidly as under
the method of distribution being used as of the date of that owner's death;
and (b) if any owner dies prior to the annuity commencement date, the entire
interest in the Policy will be distributed within five years after the date
of the owner's death. These requirements will be considered satisfied as to
any portion of the owner's interest which is payable to or for the benefit
of a "designated beneficiary" and which is distributed over the life of such
"designated beneficiary" or over a period not extending beyond the life
expectancy of that beneficiary, provided that such distributions begin
within one year of that owner's death. The owner's "designated beneficiary"
is the person designated by such owner as a beneficiary and to whom proceeds
of the Policy passes by reason of death and must be a natural person.
However, if the owner's "designated beneficiary" is the surviving spouse of
the owner, the Policy may be continued with the surviving spouse as the new
owner.

The Nonqualified Policies contain provisions which are intended to comply
with the requirements of Section 72(s) of the Code, although no regulations
interpreting these requirements have yet been issued. We intend to review
such provisions and modify them if necessary to assure that they comply with
the requirements of Code Section 72(s) when clarified by regulation or
otherwise.

Other rules may apply to Qualified Policies [see "Minimum Distribution
Requirements ("MDR") for IRA's, page__].

The following discussion assumes that the policies will qualify as annuity
contracts for Federal income tax purposes.

TAXATION OF ANNUITIES

IN GENERAL

Section 72 of the Code governs taxation of annuities in general. We believe
that an owner who is a natural person generally is not taxed on increases in
the value of a policy until distribution occurs by withdrawing all or part
of the accumulation value (e.g., partial withdrawal or surrenders) or as
annuity payments under the annuity option elected. For this purpose, the
assignment, pledge, or agreement to assign or pledge any portion of the
accumulation value (and in the case of a Qualified Policy, any portion of an
interest in the qualified plan) generally will be treated as a distribution.
The taxable portion of a distribution (in the form of a single sum payment
or an annuity) is taxable as ordinary income.

<PAGE> 62

The owner of any annuity policy who is not a natural person generally must
include in income any increase in the excess of the policy's accumulation
value over the policy's "investment in the contract" during the taxable
year. There are some exceptions to this rule and a prospective owner that is
not a natural person may wish to discuss these with a tax adviser.

The following discussion generally applies to policies owned by natural
persons.

WITHDRAWALS/DISTRIBUTIONS

In the case of a distribution under a Qualified Policy (other than a Section
457 plan), under Section 72(e) of the Code a ratable portion of the amount
received is taxable, generally based on the ratio of the "investment in the
contract" to the participant's total accrued benefit or balance under the
retirement plan. The "investment in the contract" generally equals the
portion, if any, of any premium payments paid by or on behalf of any
individual under a Policy which was not excluded from the individual's gross
income. For policies issued in connection with qualified plans, the
"investment in the contract" can be zero. Special tax rules may be available
for certain distributions from Qualified Policies.

In the case of a withdrawal/distribution (e.g. surrender, partial withdrawal
of systematic withdrawal) under a Nonqualified Policy before the annuity
date, under Code Section 72(e) amounts received are generally first treated
as taxable income to the extent that the accumulation value immediately
before the withdrawal exceeds the "investment in the contract" at that time.
Any additional amount withdrawn is not taxable.

ANNUITY PAYMENTS

Although tax consequences may vary depending on the annuity option elected
under an annuity policy, under Code Section 72(b), generally gross income
does not include that part of any amount received as an annuity under an
annuity policy that bears the same ratio to such amount as the investment in
the contract bears to the expected return at the annuity starting date. For
variable income payments, in general, the taxable portion (prior to recovery
of the investment in the contract) is determined by a formula which
establishes the specific dollar amount of each annuity payment that is not
taxed. The dollar amount is determined by dividing the "investment in the
contract" by the total number of expected periodic payments. For fixed
income payments (prior to recovery of the investment in the contract), in
general, there is no tax on the amount 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 income payment is taxable. In all cases, after the
"investment in the contract" is recovered, the full amount of any additional
annuity payments is taxable.

TAXATION OF DEATH BENEFIT PROCEEDS

Amounts may be distributed from a policy because of the death of an owner or
the last surviving 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 policy; or
2. if distributed under a payment option, they are taxed in the same
manner as annuity payments.

PENALTY TAX ON CERTAIN WITHDRAWALS

In the case of a distribution pursuant to a Nonqualified Policy, there
may be imposed a Federal penalty tax equal to 10% of the amount treated as
taxable income. In general, however, there is no penalty tax on
distributions:

1. made on or after the taxpayer reaches age 59 1/2;
2. made on or after the death of an owner (or if the owner is not an
individual, the death of the primary annuitant);

<PAGE> 63

3. attributable to the owner becoming disabled;
4. as part of a series of substantially equal periodic payments (not
less frequently than annually) for the life (or life expectancy)
of the taxpayer or the joint lives (or joint life expectancies)
of the taxpayer and beneficiary;
5. made under an annuity policy that is purchased with a single premium
when the annuity starting date is no later than a year from
purchase of the annuity and substantially equal periodic
payments are made, not less frequently than annually, during the
annuity period; and
6. made under certain annuities issued in connection with structured
settlement agreements.

Other tax penalties may apply to certain distributions under a Qualified
Policy, as well as to certain contributions, loans and other circumstances.

TRANSFERS, ASSIGNMENTS, OR EXCHANGES OF A POLICY

A transfer of ownership, the designation of an annuitant or other
beneficiary who is not also the owner, the designation of certain annuity
starting dates, or the exchange of a policy may result in certain tax
consequences to the owner that are not discussed herein. An owner
contemplating any such transfer, assignment, designation, or exchange of a
policy should contact a tax adviser with respect to the potential tax
effects of such a transaction.

WITHHOLDING

Pension and annuity distributions generally are subject to withholding for
the recipient's Federal income tax liability at rates that vary according to
the type of distribution and the recipient's tax status. Recipients,
however, generally are provided the opportunity to elect not to have tax
withheld from distributions. Effective January 1, 1993, withholding is
mandatory for certain distributions from Qualified contracts.

MULTIPLE POLICIES

Section 72(e)(11) of the Code treats all nonqualified deferred annuity
policies entered into after October 21, 1988, that are issued by us (or our
affiliates) to the same owner during any calendar year as one annuity policy
for purposes of determining the amount includable in gross income under Code
Section 72(e). The effects of this rule are not yet clear; however, it could
affect the time when income is taxable and the amount that might be subject
to the 10% penalty tax described above. In addition, the Treasury Department
has specific authority to issue regulations that prevent the avoidance of
Section 72(e) through the serial purchase of annuity contracts or otherwise.
There may also 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, a policyowner should consult a tax adviser
before purchasing more than one annuity contract.

POSSIBLE TAX CHANGES

In recent 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

<PAGE> 64

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 IRS
regulations, revenue rulings, and judicial decisions). Moreover, it is also
possible that any legislative change could be retroactive (that is,
effective prior to the date of such change).

TAXATION OF QUALIFIED PLANS

The policies are designed for use with several types of qualified plans. The
tax rules applicable to participants in these 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. 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
commencement and minimum distribution rules, aggregate distributions in
excess of a specified annual amount, and in certain other circumstances.
Therefore, no attempt is made to provide more than general information about
the use of the policies with the various types of qualified retirement
plans. Policyowners, annuitants, and beneficiaries are cautioned that the
rights of any person to any benefits under these qualified retirement plans
may be subject to the terms and conditions of the plans themselves,
regardless of the terms and conditions of the policy, but we shall not be
bound by the terms and conditions of such plans to the extent such terms
contradict the policy, unless we consent. Some retirement plans are subject
to distribution and other requirements that are not incorporated in the
administration of the policies. Owners are responsible for determining that
contributions, distributions and other transactions with respect to the
policies satisfy applicable law. Brief descriptions follow of the various
types of qualified retirement plans in connection with which we will issue a
policy. We will amend the policy as instructed to conform it to the
applicable legal requirements for such plan.

INDIVIDUAL RETIREMENT ANNUITIES AND SIMPLIFIED EMPLOYEE PENSIONS (SEP/IRAS)

Section 408 of the Code permits eligible individuals to contribute to an
individual retirement program known as an "Individual Retirement Annuity" or
"IRA". These IRAs are subject to limits on the amount that may be
contributed, the persons who may be eligible and on the time when
distributions may commence. Also, distributions from certain other types of
qualified retirement plans may be "rolled over" on a tax-deferred basis into
an IRA. Sales of the policy for use with IRAs may be subject to special
requirements of the Internal Revenue Service.

Section 408(k) of the Code allows employers to establish simplified employee
pension plans for their employees, using an IRA for such purpose, if certain
criteria are met. Under these plans the employer may, within specified
limits, make deductible contributions on behalf of the employee to an IRA.
Employers intending to use the policy in connection with such plans should
seek advice.

Purchasers of a policy for use with IRAs will be provided with supplemental
information required by the Internal Revenue Service or other appropriate
agency. Such purchasers will have the right to revoke their purchase within
seven days of the earlier of the establishment of the IRA or their purchase.
Purchasers should seek competent advice as to the suitability of the policy
for use with IRAs. The Internal Revenue Service has not reviewed the Policy
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
policy comports with IRA qualification requirements.

MINIMUM DISTRIBUTION REQUIREMENTS ("MDR") FOR IRAS

The Code requires that minimum distribution from an IRA begin no later than
April 1 of the year following the year in which the owner attains age
70 1/2(Failure to do so results in a penalty of 50% of the amount not
withdrawn. This penalty is in addition to normal income tax. We will
calculate the MDR only for funds invested in this Policy and subject to our

<PAGE> 65

administrative guidelines, including but not limited to: 1) minimum
withdrawal amount of $250; 2) while surrender charges are applicable, up to
10% of total premium plus 100% of any sub-account earnings and 100% of
current policy year's Fixed Account interest may be withdrawn; and 3) use of
MDR counts as the once a policy year free withdrawal.

As an administrative practice, we will calculate and distribute an amount
from an IRA using the method contained in the Code's minimum distribution
requirements. The annual distribution is determined by dividing the prior
December 31st value for the policy by a life expectancy factor. The factor
will be based on either your life or the life expectancies of your life and
your designated beneficiary, as directed by you, and based on tables found
in the IRS' regulations. Factors are redetermined for each year's
distribution. The value of the policy to be used in this calculation is the
policy value on the December 31st prior to the year for which each
subsequent payment is made. The life expectancy factor is determined by
using the appropriate IRS chart based on one of the following circumstances:
1. Your life expectancy (Single Life Expectancy);
2. Joint life expectancy between you and your designated beneficiary
(Joint Life and Last Survivor Expectancy); or
3. Your life expectancy and a non-spouse beneficiary more than 10 years
younger than you (Minimum Distribution Incident Benefit
Requirement).

The Code Minimum Distribution Requirements also apply to distribution from
qualified plans other than IRA's. You are responsible for ensuring that
distributions from such plans satisfy the Code minimum distribution
requirements.

CORPORATE AND SELF-EMPLOYED (H.R.10 AND KEOGH) PENSION AND PROFIT-SHARING
PLANS

Sections 401(a), 401(k) and 403(a) of the Code permit corporate employers to
establish various types of tax-favored retirement plans for employees. The
Self-Employed Individual Tax Retirement Act of 1962, as amended, commonly
referred to as "H.R.10" or "Keogh", permits self-employed individuals also
to establish such tax-favored retirement plans for themselves and their
employees. Such retirement plans may permit the purchase of the policies in
order to accumulate retirement savings under the plans. Adverse tax
consequences to the plan, to the participant or to both may result if this
policy is assigned or transferred to any individual as a means to provide
benefit payments. Employers intending to use the policy in connection with
such plans should seek advice.

DEFERRED COMPENSATION PLANS

Section 457 of the Code provides for certain deferred compensation plans.
These plans may be offered with respect to service for state governments,
local governments, political subdivisions, agencies, instrumentalities and
certain affiliates of such entities, and tax exempt organizations. The plans
may permit participants to specify the form of investment for their deferred
compensation account. All distributions are taxable as ordinary income. All
investments are owned by the sponsoring employer and are subject to the
claims of the general creditors of the employer.

TAX-SHELTERED ANNUITY PLANS

Section 403(b) of the Code permits public school systems and certain
tax-exempt organizations specified in Section 501(c)(3) to make payments to
purchase annuity policies for their employees. Such payments are excludable
from the employee's gross income (subject to certain limitations), but may
be subject to FICA (Social Security) taxes. Under Code requirements, Section
403(b) annuities generally may not permit distribution of: 1) elective
contributions made in years beginning after December 31, 1988; 2) earnings
on those contributions; and 3) earnings on amounts attributed to elective
contributions held as of the end of the last year beginning before January
1, 1989. Under Code requirements, distributions of such amounts will be
allowed only: 1) upon the death of the employee; or 2) on or after
attainment of age 59 1/2; or 3) separation from service; or 4) disability;
or 5) financial hardship, except that income attributable to elective
contributions may not be distributed in the case of hardship. With respect
to these restrictions, the Company is relying upon a no-action

<PAGE> 66

letter dated November 28, 1988, from the staff of the SEC to the American
Council of Life Insurance, the requirements for which have been or will be
complied with by the Company.

OTHER TAX CONSEQUENCES

As noted above, the foregoing comments about the Federal tax consequences
under these policies are not exhaustive and special rules are provided with
respect to other tax situations not discussed in this Prospectus. Further,
the Federal income tax consequences discussed herein reflect our
understanding of current law and the law may change. Federal estate and
state and local estate, inheritance, and other tax consequences of ownership
or receipt of distributions under a Policy depend on the individual
circumstances of each owner or recipient of the distribution. A tax adviser
should be consulted for further information.

DISTRIBUTION OF POLICIES

The policies will be offered to the public on a continuous basis, and we do
not anticipate discontinuing the offering of the policies. However, we
reserve the right to discontinue the offering. Applications for policies are
solicited by agents who are registered representatives of Canada Life of
America Financial Services, Inc. ("CLAFS"). CLAFS is a wholly owned
subsidiary of Canada Life Insurance Company of America, a Michigan
corporation. CLAFS, a Georgia corporation organized on January 18, 1988, is
registered with the SEC under the Securities Exchange Act of 1934 as a
broker-dealer and is a member of the National Association of Securities
Dealers, Inc. The policies may also be sold through other broker-dealers
registered under the Securities Exchange Act of 1934 whose representatives
are authorized by applicable law to sell variable annuity policies.CLAFS
will pay distribution compensation to selling broker-dealers in varying
amounts which, under normal circumstances, is not expected to exceed 6.5% of
premium payments under the policies. We may from time to time pay additional
compensation pursuant to promotional contracts. In some circumstances, we
may provide reimbursement of certain sales and marketing expenses. CLAFS
will pay a promotional agent fee for providing marketing support for the
distribution of the contracts.

CLAFS acts as the principal underwriter, as defined in the Investment
Company Act of 1940, of the policies for the Variable Account pursuant to a
distribution agreement involving CLAFS and us. CLAFS is not obligated to
sell any specific number of policies. CLAFS principal business address is
6201 Powers Ferry Road, NW, Atlanta, Georgia.

LEGAL PROCEEDINGS

There are at present no legal proceedings to which the Variable Account is a
party or the assets of the Variable Account are subject. We are not involved
in any litigation that is of material importance in relation to our total
assets or that relates to the Variable Account.

<PAGE> 67

VOTING RIGHTS

To the extent deemed to be required by law and as described in the
Prospectuses for the Funds, shares held in the Variable Account and in our
general account will be voted by us at regular and special shareholder
meetings in accordance with instructions received from persons having voting
interests in the corresponding sub-accounts. If however, the Investment
Company Act of 1940 or any regulation thereunder should be amended, or if
the present interpretation thereof should change, or if we determine that we
are allowed to vote the shares in our own right, we may elect to do so.

The number of votes which are available to you will be calculated separately
for each sub-account of the Variable Account, and may include fractional
votes. The number of votes attributable to a sub-account will be determined
by applying your percentage interest, if any, in a particular sub-account to
the total number of votes attributable to that sub-account. You hold a
voting interest in each sub-account to which the Variable Account value is
allocated. You only have voting interest prior to the annuity date or
maturity date.

The number of votes which are available to you will be determined as of the
date coincident with the date established for determining shareholders
eligible to vote at the relevant meeting. Voting instructions will be
solicited by written communication prior to such meeting in accordance with
established procedures.

Shares as to which no timely instructions are received and shares held by us
in a sub-account as to which you have no beneficial interest will be voted
in proportion to the voting instructions which are received with respect to
all policies participating in that sub-account. Voting instructions to
abstain on any item to be voted upon will be applied to reduce the total
number of votes cast on such item.

Each person having a voting interest in a sub-account will receive proxy
materials, reports, and other material relating to the appropriate
portfolio.

FINANCIAL STATEMENTS

Our balance sheets as of December 31, 1996 and 1995, and the related
statements of operations, accumulated surplus, and cash flows for each of
the three years in the period ended December 31, 1996, as well as the Report
of Independent Auditors and the Actuary's Report thereon, are contained in
the Statement of Additional Information. The Variable Account's statement of
net assets as of December 31, 1996, and the related statement of operations
and the statements of changes in net assets for the periods indicated
therein, as well as the Report of Independent Auditors, are contained in the
Statement of Additional Information.

The financial statements of the Company included in the Statement of
Additional Information should be considered only as bearing on the ability
of the Company to meet its obligations under the policies. They should not
be considered as bearing on the investment performance of the assets held in
the Variable Account.

<PAGE> 68

STATEMENT OF ADDITIONAL INFORMATION - TABLE OF CONTENTS

<TABLE>
<S> <C>
ADDITIONAL POLICY PROVISIONS
Contract ............................................................... 2
Incontestability ....................................................... 2
Misstatement of Age .................................................... 2
Currency ............................................................... 2
Place of Payment ....................................................... 3
Non-Participation ...................................................... 3
Our Consent ............................................................ 3
CALCULATION OF YIELDS AND TOTAL RETURNS
Money Market Yields .................................................... 3
Other Sub-Account Yields ............................................... 4
Total Returns .......................................................... 4
Effect of the Policy Administration Charge on Performance Data ......... 6
SAFEKEEPING OF ACCOUNT ASSETS .................................................. 6
STATE REGULATION ............................................................... 7
RECORDS AND REPORTS ............................................................ 7
LEGAL MATTERS .................................................................. 7
EXPERTS ........................................................................ 7
OTHER INFORMATION .............................................................. 7
FINANCIAL STATEMENTS ........................................................... 7
</TABLE>

<PAGE> 69

PART B

INFORMATION REQUIRED TO BE IN THE

STATEMENT OF ADDITIONAL INFORMATION

<PAGE> 70

CANADA LIFE INSURANCE COMPANY OF NEW YORK
HOME OFFICE: 500 MAMARONECK AVENUE, HARRISON, NEW YORK 10528
PHONE: (914) 835-8400

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

STATEMENT OF ADDITIONAL INFORMATION
VARIABLE ANNUITY ACCOUNT 1
SINGLE PREMIUM VARIABLE DEFERRED ANNUITY POLICY

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

This Statement of Additional Information contains information in addition to the
information described in the Prospectus for the single premium variable
deferred annuity policy (the "policy") offered by Canada Life Insurance Company
of New York. This Statement of Additional Information is not a Prospectus, and
it should be read only in conjunction with the Prospectuses for the policy;
Canada Life of America Series Fund, Inc.; Fidelity Investments Variable
Insurance Products Fund; Fidelity Investments Variable Insurance Products Fund
II; Seligman Portfolios, Inc.; Dreyfus Variable Investment Fund; The Dreyfus
Socially Responsible Growth Fund, Inc.; The Alger American Fund; The Montgomery
Funds III, and the Berger Trust Fund. The Prospectuses are dated the same date
as this Statement of Additional Information. You may obtain copies of the
Prospectuses by writing or calling us at our address or phone number shown
above.

The date of this Statement of Additional Information is May 1, 1997.

<PAGE> 71

STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS

<TABLE>
<S> <C>
ADDITIONAL POLICY PROVISIONS
Contract...........................................................................................................2
Incontestability...................................................................................................2
Misstatement Of Age................................................................................................2
Currency...........................................................................................................2
Place Of Payment...................................................................................................3
Non-Participation..................................................................................................3
Our Consent........................................................................................................3

CALCULATION OF YIELDS AND TOTAL RETURNS
Money Market Yields................................................................................................3
Other Sub-account Yields...........................................................................................4
Total Returns......................................................................................................4
Effect Of The Policy Administration Charge On Performance Data.....................................................6

SAFEKEEPING OF ACCOUNT ASSETS...............................................................................................6

STATE REGULATION............................................................................................................7

RECORDS AND REPORTS.........................................................................................................7

LEGAL MATTERS...............................................................................................................7

EXPERTS.....................................................................................................................7

OTHER INFORMATION...........................................................................................................7

FINANCIAL STATEMENTS........................................................................................................7
</TABLE>

ADDITIONAL POLICY PROVISIONS

CONTRACT

The entire contract is made up of the policy and the application for the policy.
The statements made in the application are deemed representations and not
warranties. We cannot use any statement in defense of a claim or to void the
policy unless it is contained in the application and a copy of the application
is attached to the policy at issue.

INCONTESTABILITY

We will not contest the policy after it has been in force during the annuitant's
lifetime for two years from the date of issue of the policy.

MISSTATEMENT OF AGE

If the age of any annuitant has been misstated, we will pay the amount which the
proceeds would have purchased at the correct age.

If we make an overpayment because of an error in age, the overpayment plus
interest at 3% compounded annually will be a debt against the policy. If the
debt is not repaid, future payments will be reduced accordingly.

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<PAGE> 72

If we make an underpayment because of an error in age, any annuity payments will
be recalculated at the correct age, and future payments will be adjusted. The
underpayment with interest at 3% compounded annually will be paid in a single
sum.

CURRENCY

All amounts payable under the policy will be paid in United States currency.

PLACE OF PAYMENT

All amounts payable by us will be payable at our Home Office at the address
shown on page one of this Statement of Additional Information.

NON-PARTICIPATION

The policy is not eligible for dividends and will not participate in our
divisible surplus.

OUR CONSENT

If our consent is required, it must be given in writing. It must bear the
signature, or a reproduction of the signature, of our President, Secretary or
Actuary.

CALCULATION OF YIELDS AND TOTAL RETURNS

MONEY MARKET YIELDS

We may, from time to time, quote in advertisements and sales literature the
current annualized yield of the Money Market Sub-account for a 7 day period in a
manner which does not take into consideration any realized or unrealized gains
or losses on shares of the Money Market Portfolio or on its portfolio
securities. This current annualized yield is computed by determining the net
change (exclusive of realized gains and losses on the sale of securities and
unrealized appreciation and depreciation) at the end of the 7 day period in the
value of a hypothetical account under a policy having a balance of 1 unit of the
Money Market Sub-account at the beginning of the period, dividing such net
change in account value by the value of the account at the beginning of the
period to determine the base period return, and annualizing this quotient on a
365 day basis. The net change in account value reflects: 1) net income from the
Portfolio attributable to the hypothetical account; and 2) charges and
deductions imposed under the policy which are attributable to the hypothetical
account. The charges and deductions include the per unit charges for the
hypothetical account for: 1) the policy administration charge; 2) the daily
administration fee; and 3) the mortality and expense risk charge. The yield
calculation reflects an average per unit policy administration charge of $30 per
year per policy deducted at the end of each policy year. Current Yield will be
calculated according to the following formula:

Current Yield = ((NCS-ES)/UV) X (365/7)

Where:

NCS = the net change in the value of the Portfolio (exclusive of
realized gains and losses on the sale of securities and
unrealized appreciation and depreciation) for the 7 day period
attributable to a hypothetical account having a balance of 1
Sub-account unit.

ES = per unit expenses of the Sub-account for the 7 day period.

UV = the unit value on the first day of the 7 day period.

The current yield for the 7 day period ended December 31, 1996 was 3.61%.

We may also quote the effective yield of the Money Market Sub-account for the
same 7 day period, determined on a compounded basis. The effective yield is
calculated by compounding the unannualized base period return according to the
following formula:

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<PAGE> 73

365/7
Effective Yield = (1+((NCS-ES)/UV)) -1
Where:

ES = per unit expenses of the Sub-account for the 7 day period.

UV = the unit value for the first day of the 7 day period.

The effective yield for the 7 day period ended December 31, 1996 was 3.68%.

Because of the charges and deductions imposed under the policy, the yield for
the Money Market Sub-account will be lower than the yield for the Money Market
Portfolio.

The yields on amounts held in the Money Market Sub-account normally will
fluctuate on a daily basis. Therefore, the disclosed yield for any given past
period is not an indication or representation of future yields or rates of
return. The Money Market Sub-Account's actual yield is affected by changes in
interest rates on money market securities, average portfolio maturity of the
Money Market Portfolio, the types and quality of portfolio securities held by
the Money Market Portfolio of the Fund, and the Money Market Portfolio's
operating expenses.

OTHER SUB-ACCOUNT YIELDS

We may, from time to time, quote in sales literature and advertisements the
current annualized yield of one or more of the (except the Money Market
Sub-account) for a policy for 30 day or one month periods. The annualized yield
of a sub-account refers to income generated by the sub-account over a specific
30 day or one month period. Because the yield is annualized, the yield generated
by a sub-account during the 30 day or one month period is assumed to be
generated each period over a 12 month period. The yield is computed by: 1)
dividing the net investment income of the portfolio attributable to the
sub-account units less sub-account expenses for the period; by 2) the maximum
offering price per unit on the last day of the period multiplied by the daily
average number of units outstanding for the period; by 3) compounding that yield
for a 6 month period; and by 4) multiplying that result by 2. Expenses
attributable to the sub-account include 1) the policy administration charge, 2)
the daily administration fee, and 3) the mortality and expense risk charge. The
yield calculation reflects a policy administration charge of $30 per year per
policy deducted at the end of each policy year. For purposes of calculating the
30 day or one month yield, an average policy administration charge per dollar of
policy value in the Variable Account is used to determine the amount of the
charge attributable to the sub-account for the 30 day or one month period as
described below. The 30 day or one month yield is calculated according to the
following formula:

Yield = 2 x ((((NI-ES)/(U x UV)) + 1)6 - 1)
Where:

NI = net income of the portfolio for the 30 day or one month period
attributable to the sub-account's units.

ES = expenses of the sub-account for the 30 day or one month
period.

U = the average number of units outstanding.

UV = the unit value at the close (highest) of the last day in the
30 day or one month period.

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<PAGE> 74

Because of the charges and deductions imposed under the policies, the yield for
the sub-account will be lower than the yield for the corresponding portfolio.

The yield on the amounts held in the sub-accounts normally will fluctuate over
time. Therefore, the disclosed yield for any given past period is not an
indication or representation of future yields or rates of return. The
sub-account's actual yield is affected by the types and quality of portfolio
securities held by the portfolio, and its operating expenses.

Yield calculations do not take into account the surrender charge under the
policy. The surrender charge is equal to 6% of premiums paid during that current
policy year and the previous 4 policy years on certain amounts surrendered or
withdrawn under the policy as described in the Prospectus. A surrender charge
will not be imposed on the first withdrawal in any policy year on an amount up
to 10% of the premiums paid during that current policy year and the previous 4
policy years, if the systematic withdrawal privilege is not elected in that
policy year.

TOTAL RETURNS

We may, from time to time, also quote in sales literature or advertisements
total returns, including average annual total returns for one or more of the
sub-accounts for various periods of time. We will always include quotes of
average annual total return for the period measured from the date the
sub-account commenced operations. When a sub-account has been in operation for
1, 5, and 10 years, respectively, the average annual total return for these
periods will be provided.

Average annual total returns for other periods of time may, from time to time,
also be disclosed. Average annual total returns represent the average annual
compounded rates of return that would equate an initial investment of $1,000
under a policy to the redemption value of that investment as of the last day of
each of the periods. The ending date for each period for which total return
quotations are provided will be for the most recent month-end practicable,
considering the type and media of the communication and will be stated in the
communication.

Average annual total returns will be calculated using sub-account unit values
which we calculate on each valuation day based on the performance of the
sub-account's underlying portfolio, and the deductions for the mortality and
expense risk charge, daily administration fee and the policy administration
charge of $30 per year per policy deducted at the end of each policy year. For
purposes of calculating total return, an average per dollar policy
administration charge attributable to the hypothetical account for the period is
used. The total return will then be calculated according to the following
formula:

TR = ((ERV/P)1/N)-1

Where:

TR = the average annual total return net of sub-account recurring
charges.

ERV = the ending redeemable value of the hypothetical account at the
end of the period.

P = a hypothetical initial payment of $1,000.

N = the number of years in the period.

The total returns assume that the maximum fees and charges are imposed for
calculations.

-5-

<PAGE> 75

Average annual total returns for the periods ending December 31, 1996 as shown
below for the sub-accounts were:

<TABLE>
<CAPTION>
From Fund
Sub-Account 1 Year 5 Year 10 Year Fund Inception
Return Return Return Inception Date
<S> <C> <C> <C> <C> <C>
Money Market* (2.33)% 1.68% *** 2.88% 12/04/89
Managed* (1.19)% 6.57% *** 7.91% 12/04/89
Bond* (2.27)% 4.75% *** 6.23% 12/04/89
Value Equity* 0.05% 7.11% *** 8.81% 12/04/89
Capital* 5.55% ** *** 11.55% 04/23/93
International Equity* 12.19% ** *** 10.17% 04/25/95
Alger Small Capitalization* (2.74)% 9.03% *** 18.49% 09/20/88
Alger Leveraged AllCap* 5.00% ** *** 37.28% 01/25/95
Alger American MidCap Growth* 4.86% ** *** 21.60% 05/30/93
Alger American Growth* 6.29% 14.64% *** 16.95% 01/08/89
Dreyfus Growth and Income* 13.10% ** *** 23.53% 05/02/94
Dreyfus Socially Responsible* 14.07% ** *** 16.76% 10/07/93
Fidelity VIP Growth* 7.61% 13.17% 13.48% 13.11% 10/09/86
Fidelity VIP High Income* 6.94% 12.96% 9.52% 10.33% 09/19/85
Fidelity VIP Overseas* 6.14% 7.12% *** 6.20% 01/28/87
Fidelity VIP II Asset Manager* 7.50% 9.25% *** 9.93% 09/06/89
Fidelity VIP II Index 500* 15.63% ** *** 14.89% 08/27/92
Seligman Communications and 1.80% ** *** 18.98% 10/11/94
Information*
Seligman Frontier* 16.71% ** *** 24.88% 10/11/94
Montgomery Emerging Markets* (0.86)% ** *** (0.04)% 02/02/96

</TABLE>

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<PAGE> 76

* The Inception Dates of the Sub-Accounts are as follows: Money Market,
Managed, Bond and Value Equity, 12/4/89; Capital 5/1/93; Fidelity VIP
Growth, Fidelity VIP High Income, Fidelity VIP Oversead, and Fidelity
VIP Asset Manager, 5//9; International Equity, Seligman Communications
and Information, and Seligman Frontier 5/1/95; Fidelity VIP II Index
500, Dreyfus Growth and Income, Dreyfus Socially Responsible, Alger
American Small Capitalization, Alger American Growth, Alger American
MidCap Growth, Alger American Leveraged AllCap and Montgomery
Emerging Markets, 5/1/96.

** These Sub-accounts invest in portfolios that have not been in operation
five years as of December 31, 1996, and accordingly, no five year
average annual total return is available.

*** These Sub-Accounts invest in portfolios that have not been in operation
ten years as of December 31, 1996, and accordingly, no ten year average
annual return is available.

As of December 31, 1996, the Montgomery Growth Fund and the Berger IPT
International Subaccounts had not commenced operations. Accordingly, we have
not provided average annual total return information for these subaccounts.

We may, from time to time, also quote in sales literature or advertisements,
total returns that do not reflect the surrender charge. These are calculated in
exactly the same way as average annual total returns described above, except
that the ending redeemable value of the hypothetical account for the period is
replaced with an ending value for the period that does not take into account any
charge on amounts surrendered or withdrawn.

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<PAGE> 77

Average annual total returns without a surrender charge for the periods shown
below for the sub-accounts were:

<TABLE>
<CAPTION>
1 Year Return 5 Year Return 10 Year Return Inception Date

<S> <C> <C> <C> <C> <C>
Money Market* 3.07% 2.18% *** 2.88% 12/04/89
Managed* 4.21% 6.98% *** 7.91% 12/04/89
Bond* 3.13% 5.20% *** 6.23% 12/04/89
Value Equity* 5.45% 7.52% *** 8.81% 12/04/89
Capital* 10.95% ** *** 12.45% 04/23/93
International Equity* 17.59% ** *** 13.13% 04/25/95
Alger Small Capitalization* 2.66% 9.41% *** 18.49% 09/20/88
Alger Leveraged AllCap* 10.40% ** *** 39.34% 01/25/95
Alger American MidCap Growth* 10.26% ** *** 22.32% 05/03/93
Alger American Growth* 11.69% 14.95% *** 16.95% 01/08/89
Dreyfus Growth and Income* 18.50% ** *** 24.71% 05/02/94
Dreyfus Socially Responsible* 19.47% ** *** 17.73% 10/07/93
Fidelity VIP Growth* 13.01% 13.49% 13.48% 13.16% 10/09/86
Fidelity VIP High Income* 12.34% 13.29% 9.52% 10.39% 09/19/85
Fidelity VIP Overseas* 11.54% 7.53% *** 6.31% 01/28/87
Fidelity VIP II Asset Manager* 12.90% 9.62% *** 10.07% 09/06/89
Fidelity VIP II Index 500* 21.03% ** *** 15.41% 08/27/92
Seligman Communications and 7.20% ** *** 20.58% 10/11/94
Information*
Seligman Frontier* 22.11% ** *** 26.39% 10/11/94
Montgomery Emerging Markets* 4.54% ** *** 5.36% 02/02/96
</TABLE>

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<PAGE> 78

* The Inception Dates of the Sub-accounts are as follows: Money Market,
Managed, Bond and Value Equity, 12/4/89; Capital 5/1/93; Fidelity VIP
Growth, Fidelity VIP High Income, Fidelity VIP oversead, and Fidelity
VIP Asset Manager, 5//94; International Equity, Seligman
Communications and Information, and Seligman Frontier 5/1/95; Fidelity
VIP II Index 500, Dreyfus Growth and Income, Dreyfus Socially
Responsible, Alger American Small Capitalization, Alger American
Growth, Alger American MidCap Growth, Alger American Leveraged AllCap
and Montgomery Emerging Markets, 5/1/96.

** These Sub-accounts invest in portfolios that have not been in operation
five years as of December 31, 1996, and accordingly, no five year
average annual total return is available.

*** These Sub-Accounts invest in portfolios that have not been in operation
ten years as of December 31, 1996, and accordingly, no ten year average
annual return is available.

As of December 31, 1996, the Montgomery Growth Fund and the Berger IBT-
International Fund sub-accounts had not commenced operations. Accordingly, we
have not provided average annual total return information for those sub-
accounts.

EFFECT OF THE POLICY ADMINISTRATION CHARGE ON PERFORMANCE DATA

The policy provides for a $30 policy administration charge to be assessed
annually on each policy anniversary proportionately from any sub-accounts or
Fixed Account in which you are invested. If the policy value on the policy
anniversary is $75,000 or more, we will waive the policy administration charge
for the prior policy year. For purposes of reflecting the policy administration
charge in yield and total return quotations, we will convert the annual charge
into a per-dollar per-day charge based on the average policy value in the
Variable Account of all policies on the last day of the period for which
quotations are provided. The per-dollar per-day average charge will then be
adjusted to reflect the basis upon which the particular quotation is calculated.

SAFEKEEPING OF ACCOUNT ASSETS

We hold the title to the assets of the Variable Account. The assets are kept
physically segregated and held separate and apart from our general account
assets and from the assets in any other separate account we have.

Records are maintained of all purchases and redemptions of portfolio shares held
by each of the sub-accounts.

Our officers and employees are covered by an insurance company blanket bond
issued by America Home Assurance Company to The Canada Life Assurance Company,
our parent Company, in the amount of $25 million. The bond insures against
dishonest and fraudulent acts of officers and employees.

STATE REGULATION

We are subject to the insurance laws and regulations of all the jurisdictions
where we are licensed to operate. The availability of certain policy rights and
provisions depends on state approval and/or filing and review processes. The
policies will be modified to comply with the requirements of each applicable
jurisdiction.

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<PAGE> 79
RECORDS AND REPORTS

We will maintain all records and accounts relating to the Variable Account. As
presently required by the Investment Company Act of 1940 and regulations
promulgated thereunder, reports containing such information as may be required
under the Act or by any other applicable law or regulation will be sent to you
semi-annually at your last address known to us.

LEGAL MATTERS

All matters relating to New York law pertaining to the policies, including the
validity of the policies and our authority to issue the policies, have been
passed upon by David A. Hopkins. Sutherland, Asbill & Brennan of Washington,
D.C., has provided advice on certain matters relating to the federal securities
laws.

EXPERTS

Our balance sheets as of December 31, 1996 and 1995, and the related statements
of operations, accumulated surplus, and cash flows for each of the three years
in the period ended December 31, 1996, included in this Statement of Additional
Information and Registration Statement as well as the Variable Account's
statement of net assets as of December 31, 1996, and the related statement of
operations and the statements of changes in net assets for the periods indicated
therein included in this Statement of Additional Information and Registration
Statement have been audited by Ernst & Young, Chartered Accountants of Toronto,
Canada as set forth in their reports thereon appearing elsewhere herein and in
the Registration Statement, and are included in reliance upon such reports given
upon the authority of such firm as experts in accounting and auditing.

OTHER INFORMATION

A registration statement has been filed with the SEC under the Securities Act of
1933 as amended, with respect to the policies discussed in this Statement of
Additional Information. Not all of the information set forth in the registration
statement, amendments and exhibits thereto has been included in this Statement
of Additional Information. Statements contained in this Statement of Additional
Information concerning the content of the policies and other legal instruments
are intended to be summaries. For a complete statement of the terms of these
documents, reference should be made to the instruments filed with the SEC.

FINANCIAL STATEMENTS

The Variable Account's statement of net assets as of December 31, 1996, and the
related statement of operations and the statements of changes in net assets for
the periods indicated therein, as well as the Report of Independent Auditors,
are contained herein. Ernst & Young, Chartered Accountants, serve as independent
auditors for the Variable Account.

Our balance sheets as of December 31, 1996 and 1995, and the related statements
of operations, accumulated surplus, and cash flows for each of the three years
in the period ended December 31, 1996, as well as the Report of Independent
Auditors, are contained herein. The financial statements of the Company should
be considered

-10-

<PAGE> 80

only as bearing on our ability to meet our obligations under the
policies. They should not be considered as bearing on the investment performance
of the assets held in the Variable Account.

-11-

<PAGE> 81

PART C

OTHER INFORMATION

<PAGE> 82

PART C

OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements
To be filed in a subsequent Post-Effective Amendment

(b) Exhibits
(1) Resolution of the Board of Directors of Canada Life Insurance
Company of New York authorizing establishment of the Variable
Account 1.*

(2) Not applicable.
(3) (a) Form of Distribution Agreement*
(b) Form of Selling Agreement*

(4) (a) Form of Annuity Policy
To be filed in a subsequent Post-Effective Amendment
(b) Riders and Endorsements***

(5) Form of Application
To be filed in a subsequent Post-Effective Amendment

(6) (a) Certificate of Incorporation of Canada Life Insurance
Company of New York.*
(b) By-Laws of Canada Life Insurance Company of New York*
(c) Amendment to the By-Laws of Canada Life Insurance Company
of New York passed by the Board on November 19, 1993.***

(7) Not applicable

(8) (a) Participation Agreement*
(b) Service Agreement*

(9) Opinion and Consent of Counsel**

(10) (a) Consent of Counsel
(b) Consent of Independent Counsel
To be filed in a subsequent Post-Effective Amendment
(c) Consent of Independent Auditors
To be filed in a subsequent Post-Effective Amendment

(11) Not applicable

(12) Not applicable

(13) Not applicable

- ------------------------
* Incorporated herein by reference with the initial filing of this Form
N-4 Registration Statement (File No. 33-32199) filed on November 21,
1989.

** Incorporated herein by reference with the Post-Effective Amendment No.
1 of this Form N-4 Registration Statement (File No. 33-32199) filed on
March 20, 1991.

*** Incorporated herein by reference with the Post-Effective Amendment No.
7 of this Form N-4 Registration Statement (File No. 33-32199) filed on
April 14, 1995.

<PAGE> 83

Item 25. Directors and Officers of the Depositor

<TABLE>
<CAPTION>
Name and Principal
Business Address Positions and Offices with Depositor
---------------- ------------------------------------
<S> <C>
David A. Nield (1) Chairman and Director
D. Allen Loney (2) President and Director
Paul R. McCadam (3) Vice-President and Chief Operating Officer
Mary L. Craft (2) Director of Administration
Dr. Robert W. Lund (2) Medical Director
Donald K. Cooper (3) Director of Marketing
Jeffrey R. Wilt (3) Director of Marketing
William S. McIlwaine (2) Director of Group Sales
Don D. Myers (2) Accounting Officer
Gary M. Haddow (2) Administrative Officer
Kenneth T. Ledwos (2) Actuary
Sergio Benedetti (2) Marketing Actuary
Janet G. Deskins Marketing Actuary
John W. Pratt (2) Actuarial Associate
M. G. Libenson Internal Auditor
David A. Hopkins (2) Secretary
Roy W. Linden (1) Assistant Secretary
George N. Isaac (1) Treasurer
Edward P. Ovsenny (1) Assistant Treasurer
Brian J. Lynch (1) Assistant Treasurer
Wendy M. Michaud (3) Chief Underwriter
Gordon N. Farquhar (4) Director
Christopher T. Green (5) Director
Alfred F. Kelly (6) Director
William E. Kelly (7) Director
William B. Morris (9) Director
Harry Van Benschoten (10) Director
Julius Vogel (11) Director
</TABLE>

- --------------------------
(1) The business address is 330 University Avenue, Toronto, Ontario,
Canada M5G 1R8.
(2) The business address is 6201 Powers Ferry Road, NW, Suite 600,
Atlanta, GA, USA 30339.
(3) The business address is 500 Mamaroneck Avenue, Harrison, New
York, USA 10528.
(4) The business address is 43 Meadow Avenue, Weekapaug, Rhode
Island, USA 02891
(5) The business address is 1000 Cathedral Place, 298 Main Street,
Buffalo, New York, USA 14202.
(6) The business address is 232 Crestwood Avenue, Tuckahoe, New
York, USA 10707
(7) The business address is 320 Park Avenue, New York, New York,
USA 10022.
(8) The business address is 4 Glenellen Drive East, Toronto,
Ontario, Canada M8Y 2G5
(9) The business address is 9 West 57th Street, New York, New York,
USA 10019
(10) The business address is 105 Seminary Street, New Canaan,
Connecticut, USA 06840
(11) The business address is 72 Colt Road, Summit, New Jersey, USA
07901

<PAGE> 84

Item 26. Persons Controlled by or Under Common Control With the Depositor or
Registrant

<TABLE>
<CAPTION>
PERCENT OF
VOTING
SECURITIES PRINCIPAL
NAME JURISDICTION OWNED BUSINESS
---- ------------ ----- --------
<S> <C> <C> <C>
The Canada Life Assurance Canada Mutual Company Life Insurance and Health
Company

Adason Properties Limited Canada Ownership of all voting securities Property Management
through Canada Life

The Canada Life Assurance England Ownership of all voting securities Life Insurance
Company of Great Britain through Canada Life

Canada Life Unit Trust England Ownership of all voting securities Unit Trust Management
Managers Limited through Canada Life of Great Britain

Canada Life Mortgage Canada Ownership of all voting securities Mortgage Portfolios
Services Ltd. through Canada life Management

Canada Life Data Services Canada Ownership of all voting securities Data Support Services
Limited through Canada Life

The CLGB Property Company England Ownership of all voting securities Property Management
Limited through Canada Life of Great Britain

CLASSO Benefit Services Canada Ownership of all voting securities Administrative Services
Limited through Canada Life

Canada Life Casualty Canada Ownership of all voting securities Property and Casualty
Insurance Company through Canada Life Insurance

Canada Life Investment Canada Ownership of all voting securities Investment Counseling
Management Limited through Canada Life

Sherway Centre Limited Canada Ownership of all voting securities Property Management
through Canada Life

The Canada Life Assurance Rep. of Ireland Ownership of all voting securities Life Insurance
Company of Ireland Limited through Canada Life of Great Britain

Canlife - IBI Investment Rep. of Ireland Ownership of 50% of voting Equity Fund Management
Services Limited securities through Canada Life of
Ireland Limited and 50% through the
Investment Bank of Ireland

Canada Life Financial England Ownership of all voting securities Unit Fund Sales and
Services Company Limited through Canada Life of Great Britain Management

Canada Life Financial Rep. of Ireland Ownership of all voting securities Unit Fund Sales and
Services Company of Ireland through Canada Life of Ireland Management
Limited

Canada Life Insurance Michigan Ownership of all voting securities Life Insurance
Company of America (CLICA) through Canada Life
</TABLE>

<PAGE> 85

<TABLE>
<S> <C> <C> <C>
Canada Life of America Georgia Ownership of all voting securities Broker Dealer
Financial Services Inc. through CLICA

Canada Life of America Maryland Ownership of all voting securities Mutual Fund
Series Fund, Inc. through CLICA

CLMS Realty Ltd. Canada 99% of the common shares and Realtor
100% of the convertible preference
shares are owned by Canada Life

Canada Life Pension & Rep. of Ireland Ownership of all voting securities Unit Trust
Annuities (Ireland) Limited through Canada Life Assurance
(Ireland) Limited

CLAI Limited Rep. of Ireland Ownership of all voting securities Holding Company
through Canada Life of Great Britain

The Canada Life Assurance Rep. of Ireland Ownership of all voting securities Life Insurance
Company of Ireland Limited through CLAI Limited

CL Capital Management, Inc. Georgia Ownership of all voting securities Investment Management
through CLICA
</TABLE>

Item 27. Number of Policy Owners
As of December 31, 1996 there are 22 owners of Nonqualified
Policies and 43 owners of Qualified Policies.

Item 28. Indemnification*

Item 29. Principal Underwriter*

Item 30. Location of Accounts and Records
All accounts and records required to be maintained by Section
31(a) of the 1940 Act and the rules under it are maintained by
CLNY at its Home Office at 500 Mamaroneck Avenue, Harrison,
New York 10528.

Item 31. Management Services*

Item 32. Undertakings**

(f) "Canada Life Insurance Company of New York hereby represents
that the fees and charges deducted under the Policy, in
the aggregate, are reasonable in relation to the services
rendered, the expenses expected to be incurred, and the
risks assumed by Canada Life Insurance Company of New York".

- ----------------------------
* Incorporated herein by reference with the initial filing of this Form
N-4 Registration Statement (File No. 33-32199) filed on November 21,
1989.

** Undertakings (a) - (d) are incorporated herein by reference to the
initial filing of this Form N-4 Registration Statement (File No.
33-32199) filed on November 21, 1989. Undertaking (e) is incorporated
herein by reference to the Post-Effective Amendment No. 2 of this Form
N-4 Registration Statement (File No. 33-32199) filed April 30, 1992.

<PAGE> 86

SIGNATURES

As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant certifies that it has caused this Post-Effective
Amendment Number 10 to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, and the State of New
York on this 28th day of February, 1997.

CANADA LIFE INSURANCE COMPANY OF NEW YORK
VARIABLE ANNUITY ACCOUNT 1

By: /s/ D. A. Loney
----------------------
D. A. Loney, President
Canada Life Insurance Company of New York

CANADA LIFE INSURANCE COMPANY OF NEW YORK

By: /s/ D. A. Loney
----------------------
D. A. Loney, President

As required by the Securities Act of 1933, this Post-Effective
Amendment Number 10 has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ D. A. Nield Chairman and Director 2/28/97
--------------------------------------------
D. A. Nield

/s/ D. A. Loney President and Director 2/28/97
--------------------------------------------
D. A. Loney

/s/ G. N. Farquhar Director 2/28/97
--------------------------------------------
G. N. Farquhar

/s/ C. T. Greene Director
--------------------------------------------
C. T. Greene 2/28/97
</TABLE>

<PAGE> 87

<TABLE>
<S> <C> <C>
/s/ A. F. Kelly Director 2/28/97
--------------------------------------------
A. F. Kelly

/s/ W. E. Kelly Director 2/28/97
--------------------------------------------
W. E. Kelly

/s/ W. B. Morris Director 2/28/97
--------------------------------------------
W. B. Morris

/s/ H. Van Benschoten Director 2/28/97
--------------------------------------------
H. Van Benschoten

/s/ J. Vogel Director 2/28/97
--------------------------------------------
J. Vogel
</TABLE>

<PAGE> 88

EXHIBIT INDEX

Exhibit Number Description of Exhibit

10 (a) Consent of Counsel

<PAGE> 89

<PAGE> 90

<PAGE> 91

<PAGE> 1

Exhibit 10 (a)
Consent of Counsel

<PAGE> 2

February 28, 1997

Board of Directors
Canada Life Insurance Company of New York
Canada Life of New York Variable Annuity Account 1
500 Mamaroneck Avenue
Harrison, New York 10528

Gentlemen:

I hereby consent to the use of my name under the Caption "Legal Matters" in
the Statement of Additional Information contained in Post-effective
Amendment No. 10 to the Registration Statement on Form N-4 (File No.
33-32199) filed by Canada Life Insurance Company of New York and Canada
Life of New York Variable Annuity Account 1 with the Securities and
Exchange Commission. In giving this consent, I do not admit that I am in
the category of persons whose consent is required under Section 7 of the
Securities Act of 1933.

Sincerely,

/s/ David A. Hopkins

David A. Hopkins
Chief Counsel, U.S. Division

DAH/dr

<PAGE> 3

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