<PAGE> 1
The attached are incorporated by reference herein to the annual reports filed
by and on behalf of the following:
The Alger American Fund, filed February 23, 1998
Portfolios which include: Alger American Small Capitalization; Alger
American Growth; Alger American MidCap Growth; and Alger American
Leveraged AllCap
Berger Institutional Products Trust, filed February 27, 1998
Portfolios which include: Berger/BIAM IPT-International Fund
Canada Life of America Series Fund, Inc., filed March 3, 1998
Portfolios which include: Money Market; Managed; Bond; Value Equity,
International Equity; and Capital.
Dreyfus Variable Investment Fund, filed March 3, 1998
Portfolios which include: Dreyfus Growth and Income
The Dreyfus Socially Responsible Growth Fund, Inc., filed March 3, 1998
Portfolios which include: Dreyfus Socially Responsible
Fidelity Investments Variable Insurance Products Fund, filed February 24, 1998
Portfolios which include: Fidelity VIP Growth; Fidelity VIP High Income;
and Fidelity VIP Overseas
Fidelity Investments Variable Insurance Products Fund II, filed February 24,
1998
Portfolios which include: Fidelity VIP II Asset Manager, and Fidelity VIP
II Index 500
Seligman Portfolios, Inc., filed March 2, 1998
Portfolios which include: Communications and Information; and Frontier
The Montgomery Funds III, filed February 18, 1998
Portfolios which include: Montgomery Variable Series Emerging Markets
Fund; and Montgomery Variable Series Growth Fund
<PAGE> 2
[CANADA LIFE LOGO]
500 Mamaroneck Avenue
Harrison, NY 10528
(914) 835-8400
Fax: (914) 835-8432
March 1998
Dear VariFund(TM) Policyowner:
Enclosed for your review are the Canada Life of America Series Fund Annual
Report, the Annual Report for the Fidelity Investments Variable Insurance
products Fund and Fidelity Investments Variable Insurance Products Fund II, the
Seligman Portfolio Inc., the Dreyfus Variable Investment Fund, the Montgomery
Variable Funds III, the Berger/BIAM Fund and the Alger American Fund for the
period ending December 31, 1997. We encourage you to review this information
and refer to it as needed throughout the year.
Also, we are pleased to provide you with the enclosed two supplements to the
VariFund Variable Annuity prospectus dated May 1, 1997. The first supplement
provides the information on amended tax laws that allow for the use of both
Simple IRAs and Roth IRAs. For more information on the new IRA plans, please
contact your Registered Representative. The second supplement announces a
manager change for the Canada Life of America Series Fund Capital Portfolio.
For your convenience, the tear-off form below is provided to allow you to make
an additional payment to your VariFund contract. Policies issued before January
28, 1996, remain as flexible premium annuities and additional payments are
permitted. Policies issued after that date are single premium only.
Sincerely,
/s/ Sergio Benedetti
- --------------------
Sergio Benedetti
Marketing Actuary
- --------------------------------------------------------------------------------
Policyowner(s):__________________________________ Policy Number:________________
If you are changing allocation, please complete the following:
____ This payment only
____ This payment and all future payments
____ Re-allocate all current assets
__% Money Market __% Fidelity VIP Overseas
__% Managed __% Fidelity VIP II Asset Manager
__% Bond __% Fidelity Index 500
__% Value Equity __% Dreyfus Growth & Income
__% Capital __% Dreyfus Socially Responsible
__% International __% Alger Small Cap
__% Seligman Frontier __% Alger Growth
__% Seligman Communication & Information __% Alger MidCap
__% Fidelity VIP Growth __% Alger Leveraged AllCap
__% Fidelity VIP High Income __% Montgomery Emerging Markets
__% Fixed Account __% Montgomery Growth
__% Berger/BIAM IPT International
Total must equal 100%. Please make checks payable to Canada Life Insurance
Company of New York.
- --------------- ---------------------------------
Date Contract Owner Signature
Canada Life Insurance Company of New York Home Office Harrison, NY
<PAGE> 3
VARIFUND(TM) ANNUITY
================================================================================
VARIABLE SUB-ACCOUNT PERFORMANCE Average Annual Total Returns For Periods
Ending December 31, 1997
Single Premium Variable Annuity Assuming Contract Continues
<TABLE>
<CAPTION>
ONE THREE FIVE TEN SINCE INCEPTION
PORTFOLIO TYPE PORTFOLIO YEAR YEAR YEAR YEAR INCEPTION DATE
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Equity Portfolios Alger American Growth 23.90% 23.00% 17.57% N/A 17.71% 01/08/89
Alger American Leveraged AllCap 17.92% N/A N/A N/A 31.65% 01/25/95
Alger American MidCap Growth 13.31% 21.18% N/A N/A 20.34% 05/03/93
Alger American Small Capitalization 9.75% 17.04% 11.02% N/A 17.52% 09/20/88
CLASF Capital 19.23% 20.45% N/A N/A 13.87% 04/23/93
CLASF Value Equity 25.13% 17.11% 10.95% N/A 10.71% 12/04/89
Dreyfus Growth & Income 14.50% 28.87% N/A N/A 21.85% 05/02/94
Dreyfus Socially Responsible 26.55% 26.12% N/A N/A 19.77% 10/07/93
Fidelity Index 500 30.75% 28.88% 18.18% N/A 18.14% 08/27/92
Fidelity VIP Growth 21.67% 22.42% 16.29% 15.49% 13.90% 10/09/86
Montgomery Growth 26.68% N/A N/A N/A 28.35% 02/09/96
Seligman Frontier 14.62% 22.53% N/A N/A 22.65% 10/11/94
---------------------------------------------------------------------------------------------------------
International Berger-IPT International N/A N/A N/A N/A (2.97)%* 05/01/97
CLASF International Equity 2.78% N/A N/A N/A 9.17% 04/24/95
Fidelity VIP Overseas 9.91% 9.79% 12.44% 8.02% 6.64% 01/28/87
Montgomery Emerging Markets (2.05)% N/A N/A N/A 1.66% 02/02/96
---------------------------------------------------------------------------------------------------------
Specialty Portfolio Seligman Communications & Information 20.43% 20.78% N/A N/A 20.55% 10/11/94
---------------------------------------------------------------------------------------------------------
Balanced CLASF Managed 15.92% 13.21% 8.79% N/A 8.88% 12/04/89
Fidelity VIP II Asset Manager 18.88% 15.66% 11.32% N/A 11.10% 09/06/89
---------------------------------------------------------------------------------------------------------
Fixed Income Portfolios CLASF Bond 6.49% 8.12% 5.43% N/A 6.27% 12/04/89
Fidelity VIP High Income 15.94% 15.68% 12.26% 11.18% 10.83% 09/19/85
---------------------------------------------------------------------------------------------------------
Money Market CLASF Money Market 3.42% 3.32% 2.58% N/A 2.94% 12/04/89
</TABLE>
CLASF Money Market Portfolio current yield (annualized yield for a seven day
period ended December 31, 1997) is 5.43%. VariFund Fixed Account rate was 4.75%
as of January 1, 1998. The performance data quoted is after the deduction of all
fees and charges, except for possible surrender charges. For performance figures
after the deduction of all fees and charges, including the maximum possible
surrender charge, please see the reverse side. Performance data represents past
performance and is not a guarantee of future results. Investment returns and
principal value may fluctuate so that an investor's shares, when redeemed, may
be more or less than his or her original cost. Performance figures for
portfolios with inception dates prior to December 4, 1989 reflect performance if
Varifund existed at the inception of those portfolios. Contact your registered
representative or call Canada Life Insurance Company of New York, Harrison, NY
at (800) 462-6666 for a Prospectus containing full details including information
on fees and charges. Please read the prospectus carefully before investing or
sending money. *Actual cumulative return since inception.
<PAGE> 4
VARIABLE SUB-ACCOUNT PERFORMANCE
Average Annual Total Returns For Periods Ending December 31, 1997
Assuming Contract is Surrendered At End Of Period
<TABLE>
<CAPTION>
ONE THREE FIVE TEN SINCE INCEPTION
PORTFOLIO TYPE PORTFOLIO YEAR YEAR YEAR YEAR INCEPTION DATE
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Equity Portfolios Alger American Growth 18.50% 22.00% 17.28% N/A 17.71% 01/08/89
Alger American Leveraged AllCap 12.52% N/A N/A N/A 30.74% 01/25/95
Alger American MidCap Growth 7.91% 20.15% N/A N/A 19.95% 05/03/93
Alger American Small Capitalization 4.35% 15.93% 10.66% N/A 17.52% 09/20/88
CLASF Capital 13.83% 19.41% N/A N/A 13.39% 04/23/93
CLASF Value Equity 19.73% 16.01% 10.59% N/A 10.71% 12/04/89
Dreyfus Growth & Income 9.10% 27.96% N/A N/A 21.12% 05/02/94
Dreyfus Socially Responsible 21.15% 25.17% N/A N/A 19.29% 10/07/93
Fidelity Index 500 25.35% 27.97% 17.91% N/A 17.90% 08/27/92
Fidelity VIP Growth 16.27% 21.41% 16.00% 15.49% 13.90% 10/09/86
Montgomery Growth 21.28% N/A N/A N/A 26.05% 02/09/96
Seligman Frontier 9.22% 21.52% N/A N/A 21.76% 10/11/94
---------------------------------------------------------------------------------------------------------
International Berger-IPT International N/A N/A N/A N/A (8.37)%* 05/01/97
CLASF International Equity (2.62)% N/A N/A N/A 7.71% 04/24/95
Fidelity VIP Overseas 4.51% 8.53% 12.10% 8.02% 6.64% 01/28/87
Montgomery Emerging Markets (7.45)% N/A N/A N/A (1.16)% 02/02/96
---------------------------------------------------------------------------------------------------------
Specialty Portfolio Seligman Communications & Information 15.03% 19.74% N/A N/A 19.63% 10/11/94
---------------------------------------------------------------------------------------------------------
Balanced CLASF Managed 10.52% 12.03% 8.40% N/A 8.88% 12/04/89
Fidelity VIP II Asset Manager 13.48% 14.53% 10.97% N/A 11.00% 09/06/89
---------------------------------------------------------------------------------------------------------
Fixed Income Portfolios CLASF Bond 1.09% 6.82% 4.99% N/A 6.27% 12/04/89
Fidelity VIP High Income 10.54% 14.55% 11.91% 11.18% 10.83% 09/19/85
---------------------------------------------------------------------------------------------------------
Money Market CLASF Money Market (1.98)% 1.90% 2.08% N/A 2.94% 12/04/89
</TABLE>
The above figures are SEC required "standardized" performance returns which
include the deduction of all fees and charges, including the maximum possible
sales charge. These figures may not be applicable to your contract, since you
may not have to pay these early withdrawal charges. Please see the prospectus
for more details. CLASF refers to Canada Life of America Series Fund, Inc.
Fidelity VIP and Fidelity VIP II refer to Fidelity Investments Variable
Insurance Products Fund and Fidelity Investments Variable Insurance Products
Fund II. *Actual cumulative return since inception less the maximum possible
sales charge.
Annuities are not deposits of, obligations of, or guaranteed by any depository
institution. They are not insured by FDIC or any federal agency, and as such
are subject to investment risk including possible loss of principal invested.
The FIXED account portions of a variable annuity (NOT the separate accounts)
are backed by the issuing insurance company.
Variable Annuity Contract Issued By: Canada Life Insurance Company of New York,
500 Mamaroneck Avenue, Harrison, NY 10528
Distributed By: Canada Life of America Financial Services, Inc. 6201 Powers
Ferry Road, N.W., Atlanta, GA 30339
