PFL ENDEAVOR VARIABLE ANNUITY ACCOUNT /NEW/, 485BPOS, 2000-10-03

PFL ENDEAVOR VARIABLE ANNUITY ACCOUNT /NEW/
485BPOS, 2000-10-03

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<PAGE>

As filed with the Securities and Exchange Commission on October 3, 2000

Registration No. 33- 33085
811-06032
--------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C 20549

--------------------------------------------------------------------------------
FORM N-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Pre-Effective Amendment No.___

Post-Effective Amendment No. 22 X
---- -

and

REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940

Amendment No. 31 X
---- -

PFL ENDEAVOR VA SEPARATE ACCOUNT
-------------------------------------
(Exact Name of Registrant)

PFL ENDEAVOR VARIABLE ANNUITY ACCOUNT
-----------------------------------------
(Former Name of Registrant)

PFL LIFE INSURANCE COMPANY
--------------------------
(Name of Depositor)

4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499
--------------------------------------------------
(Address of Depositor's Principal Executive Offices)

Depositor's Telephone Number, including Area Code

(319) 297-8121

Frank A. Camp, Esquire
PFL Life Insurance Company
4333 Edgewood Road, N.E.
Cedar Rapids, Iowa 52499
(Name and Address of Agent for Service)

Copy to:

Frederick R. Bellamy, Esquire
Sutherland Asbill & Brennan LLP
1275 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-2404

1
<PAGE>

Title of Securities Being Registered:
Flexible Premium Variable Annuity Policies

It is proposed that this filing will become effective:

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

on _________ pursuant to paragraph (b) of Rule 485
-------

60 days after filing pursuant to paragraph (a) (1) of
------- Rule 485

on _________ pursuant to paragraph (a)(1) of Rule 485
-------

If appropriate, check the following box:

[_] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

2
<PAGE>

THE ENDEAVOR
VARIABLE ANNUITY

Issued Through
PFL ENDEAVOR VA SEPARATE ACCOUNT
by
PFL LIFE INSURANCE COMPANY

Prospectus
October 9, 2000

This prospectus and the mutual fund prospectuses give you important information
about the policies and the mutual funds. Please read them carefully before you
invest and keep them for future reference.

If you would like more information about The Endeavor Variable Annuity policy,
you can obtain a free copy of the Statement of Additional Information (SAI)
dated October 9, 2000. Please call us at (800) 525-6205 or write us at: PFL
Life Insurance Company, Financial Markets Division, Variable Annuity
Department, 4333 Edgewood Road N.E., Cedar Rapids, Iowa, 52499-0001. A
registration statement, including the SAI, has been filed with the Securities
and Exchange Commission (SEC) and is incorporated herein by reference.
Information about the variable annuity can be reviewed and copied at the SEC's
Public Reference Room in Washington, D.C. You may obtain information about the
operation of the public reference room by calling the SEC at 1-800-SEC-0330.
The SEC also maintains a web site (http://www.sec.gov) that contains the
prospectus, the SAI, material incorporated by reference, and other information.
The table of contents of the SAI is included at the end of this prospectus.

Please note that the policies and the separate account investment choices:
. are not bank deposits
. are not federally insured
. are not endorsed by any bank or government agency
. are not guaranteed to achieve their goal
. are subject to risks, including loss of premium

The Securities and Exchange Commission has not approved or disapproved these
securities, or passed upon the adequacy of this prospectus. Any representation
to the contrary is a criminal offense.

This flexible premium deferred (group or individual) annuity policy has many
investment choices. There is a separate account that currently offers thirty-
one mutual fund portfolios from the underlying funds listed below. There is
also a fixed account, which offers interest at rates that are guaranteed by PFL
Life Insurance Company (PFL). You can choose any combination of these
investment choices. You bear the entire investment risk for all amounts you put
in the separate account.

ENDEAVOR SERIES TRUST
Capital Guardian Global Portfolio
Capital Guardian U.S. Equity Portfolio
Capital Guardian Value Portfolio
Dreyfus Small Cap Value Portfolio
Dreyfus U.S. Government Securities Portfolio
Endeavor Asset Allocation Portfolio
Endeavor Money Market Portfolio
Endeavor Enhanced Index Portfolio
Endeavor High Yield Portfolio
Endeavor Janus Growth Portfolio
Jennison Growth Portfolio
T. Rowe Price Equity Income Portfolio
T. Rowe Price Growth Stock Portfolio
T. Rowe Price International Stock Portfolio

JANUS ASPEN SERIES--SERVICE SHARES
Janus Aspen--Aggressive Growth Portfolio
Janus Aspen--Strategic Value Portfolio
Janus Aspen--Worldwide Growth Portfolio

TRANSAMERICA VARIABLE INSURANCE FUND, INC.
Transamerica VIF Growth Portfolio

VARIABLE INSURANCE PRODUCTS FUND (VIP)--SERVICE CLASS 2
Fidelity--VIP Equity-Income Portfolio

VARIABLE INSURANCE PRODUCTS FUND II (VIP II)--SERVICE CLASS 2
Fidelity--VIP II Contrafund(R) Portfolio

VARIABLE INSURANCE PRODUCTS FUND III (VIP III)--SERVICE CLASS 2
Fidelity--VIP III Growth Opportunities Portfolio
Fidelity--VIP III Mid Cap Portfolio

WRL SERIES FUND, INC.
WRL Alger Aggressive Growth
WRL Gabelli Global Growth
WRL Goldman Sachs Growth
WRL Great Companies--Global/2/
WRL NWQ Value Equity
WRL Pilgrim Baxter Mid Cap Growth
WRL Salomon All Cap
WRL T. Rowe Price Dividend Growth
WRL T. Rowe Price Small Cap
<PAGE>

<TABLE>
<CAPTION>
TABLE OF CONTENTS Page

<S> <C>
GLOSSARY OF TERMS.......................................................... 3

SUMMARY.................................................................... 4

ANNUITY POLICY FEE TABLE................................................... 8

EXAMPLES................................................................... 11

1.THE ANNUITY POLICY....................................................... 13

2.PURCHASE................................................................. 13
Policy Issue Requirements................................................ 13
Premium Payments......................................................... 13
Initial Premium Requirements............................................. 13
Additional Premium Payments.............................................. 14
Maximum Total Premium Payments........................................... 14
Allocation of Premium Payments........................................... 14
Policy Value............................................................. 14

3.INVESTMENT CHOICES....................................................... 14
The Separate Account..................................................... 14
The Fixed Account........................................................ 15
Transfers................................................................ 16

4.PERFORMANCE.............................................................. 17

5.EXPENSES................................................................. 17
Surrender Charges........................................................ 17
Excess Interest Adjustment............................................... 18
Mortality and Expense Risk Fee........................................... 18
Administrative Charges................................................... 18
Premium Taxes............................................................ 18
Federal, State and Local Taxes........................................... 19
Transfer Fee............................................................. 19
Family Income Protector.................................................. 19
Portfolio Management Fees................................................ 19

6.ACCESS TO YOUR MONEY..................................................... 19
Withdrawals.............................................................. 19
Delay of Payment and Transfers........................................... 19
Excess Interest Adjustment............................................... 20

7.ANNUITY PAYMENTS (THE INCOME PHASE)...................................... 20
Annuity Payment Options.................................................. 20

8.DEATH BENEFIT............................................................ 22
When We Pay A Death Benefit.............................................. 22
When We Do Not Pay A Death Benefit....................................... 22
Amount of Death Benefit.................................................. 23
Guaranteed Minimum Death Benefit......................................... 23
Adjusted Partial Withdrawal.............................................. 24

9.TAXES.................................................................... 24
Annuity Policies in General.............................................. 24
Qualified and Nonqualified Policies...................................... 25
Withdrawals--Qualified Policies.......................................... 25
Withdrawals--403(b) Policies............................................. 25
Diversification and Distribution Requirements............................ 25
Withdrawals--Nonqualified Policies....................................... 25
Taxation of Death Benefit Proceeds....................................... 26
Annuity Payments......................................................... 26
Transfers, Assignments or Exchanges of Policies.......................... 27
Possible Tax Law Changes................................................. 27

10.ADDITIONAL FEATURES..................................................... 27
Systematic Payout Option................................................. 27
Family Income Protector.................................................. 27
Nursing Care and Terminal Condition Withdrawal Option.................... 29
Unemployment Waiver...................................................... 29
Telephone Transactions................................................... 30
Dollar Cost Averaging Program............................................ 30
Asset Rebalancing........................................................ 30

11.OTHER INFORMATION....................................................... 31
Ownership................................................................ 31
Assignment............................................................... 31
PFL Life Insurance Company............................................... 31
The Separate Account..................................................... 31
Mixed and Shared Funding................................................. 31
Reinstatements........................................................... 32
Voting Rights............................................................ 32
Distributor of the Policies.............................................. 32
Variations in Policy Provisions.......................................... 32
IMSA..................................................................... 32
Legal Proceedings........................................................ 32
Financial Statements..................................................... 33

TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION............... 33

APPENDIX A
Condensed Financial Information.......................................... 34

APPENDIX B
Historical Performance Data.............................................. 39

APPENDIX C
Policy Variations........................................................ 49
</TABLE>

2
<PAGE>

GLOSSARY OF TERMS

Accumulation Unit--An accounting unit of measure used in calculating the policy
value in the separate account before the annuity commencement date.

Adjusted Policy Value--The policy value increased or decreased by any excess
interest adjustment.

Annuitant--The person during whose life any annuity payments involving life
contingencies will continue.

Annuity Commencement Date--The date upon which annuity payments are to
commence. This date may be any date at least thirty days after the policy date
and may not be later than the last day of the policy month starting after the
annuitant attains age 85, except as expressly allowed by PFL. In no event will
this date be later than the last day of the month following the month in which
the annuitant attains age 95.

Annuity Payment Option--A method of receiving a stream of annuity payments
selected by the owner.

Cash Value--The adjusted policy value less any applicable surrender charge.

Excess Interest Adjustment--A positive or negative adjustment to amounts
withdrawn upon partial withdrawals, full surrenders, or transfers from the
guaranteed period options, or to amounts applied to annuity payment options.
The adjustment reflects changes in the interest rates declared by PFL since the
date any payment was received by, or an amount was transferred to, the
guaranteed period option. The excess interest adjustment can either decrease or
increase the amount to be received by the owner upon full surrender or
commencement of annuity payments, depending upon whether there has been an
increase or decrease in interest rates, respectively.

Fixed Account--One or more investment choices under the policy that are part of
PFL's general assets and are not in the separate account.

Guaranteed Period Options--The various guaranteed interest rate periods of the
fixed account which PFL may offer and into which premium payments may be paid
or amounts transferred.

Monthly Anniversary--The same date in each succeeding month as the policy date.
For purposes of the variable account, whenever the monthly anniversary falls on
a date other than a valuation date, the monthly anniversary will be deemed to
be the next valuation date.

Owner--Depending upon the state of issue, owner means either:
. the individual or entity that owns a certificate under a group contract; or
. the individual or entity that owns an individual policy.

Policy--Depending upon the state of issue, policy means either:
. the individual certificate under a group contract; or
. the individual policy.

Policy Value--On or before the annuity commencement date, the policy value is
equal to the owner's:
. premium payments; minus
. partial withdrawals (including the net effect of any applicable excess
interest adjustments and/or surrender charges on such withdrawals); plus
. interest credited in the fixed account; plus
. accumulated gains in the separate account; minus
. losses in the separate account; minus
. service charges, rider fees, premium taxes, and transfer fees, if any.

Policy Year--A policy year begins on the policy date and on each policy
anniversary.

Separate Account--PFL Endeavor VA Separate Account, a separate account
established and registered as a unit investment trust under the Investment
Company Act of 1940, as amended (the "1940 Act"), to which premium payments
under the policies may be allocated.

Subaccount--A subdivision within the separate account, the assets of which are
invested in specified portfolios of the underlying funds.

(Note: The SAI contains a more extensive Glossary.)

3
<PAGE>

SUMMARY

The sections in this summary correspond to sections in this prospectus, which
discuss the topics in more detail.

1. THE ANNUITY POLICY

The flexible premium variable annuity policy offered by PFL Life Insurance
Company (PFL, we, us, or our) provides a way for you to invest on a tax-
deferred basis in the following investment choices: thirty-one subaccounts of
the separate account and a fixed account of PFL. The policy is intended to
accumulate money for retirement or other long-term investment purposes.

This policy currently offers thirty-one subaccounts in the separate account
that are listed in Section 3. Each subaccount invests exclusively in shares of
one of the portfolios of the underlying funds. The policy value may depend on
the investment experience of the selected subaccounts. Therefore, you bear the
entire investment risk with respect to all policy value in any subaccount. You
could lose the amount that you invest.

The fixed account offers an interest rate that PFL guarantees. We guarantee to
return your investment with at least 3% annual interest for all amounts
allocated to the fixed account.

You can transfer money between any of the investment choices. We reserve the
right to impose a $10 fee for each transfer in excess of 12 transfers per
policy year.

The policy, like all deferred annuity policies, has two phases: the
"accumulation phase" and the "income phase." During the accumulation phase,
earnings accumulate on a tax-deferred basis and are taxed as ordinary income
when you take them out of the policy. The income phase occurs when you begin
receiving regular payments from your policy. The money you can accumulate
during the accumulation phase will largely determine the income payments you
receive during the income phase.

2. PURCHASE

You can buy a nonqualified policy with $5,000 or more, and a qualified policy
with $1,000 or more, under most circumstances. You can add as little as $50 at
any time during the accumulation phase.

3. INVESTMENT CHOICES

You can allocate your premium payments to one or more of the following mutual
fund portfolios described in the underlying fund prospectuses:

Capital Guardian Global Portfolio/(1)/
Capital Guardian U.S. Equity Portfolio/(2)/
Capital Guardian Value Portfolio/(3)/
Dreyfus Small Cap Value Portfolio
Dreyfus U.S. Government Securities Portfolio
Endeavor Asset Allocation Portfolio
Endeavor Money Market Portfolio
Endeavor Enhanced Index Portfolio
Endeavor High Yield Portfolio
Endeavor Janus Growth Portfolio
Jennison Growth Portfolio/(4)/
T. Rowe Price Equity Income Portfolio
T. Rowe Price Growth Stock Portfolio
T. Rowe Price International Stock Portfolio
Janus Aspen - Aggressive Growth Portfolio - Service Shares
Janus Aspen - Strategic Value Portfolio - Service Shares
Janus Aspen - Worldwide Growth Portfolio - Service Shares
Transamerica VIF Growth Portfolio
Fidelity - VIP Equity-Income Portfolio - Service Class 2
Fidelity - VIP II Contrafund(R) Portfolio - Service Class 2
Fidelity - VIP III Growth Opportunities Portfolio - Service Class 2
Fidelity - VIP III Mid Cap Portfolio - Service Class 2
WRL Alger Aggressive Growth
WRL Gabelli Global Growth
WRL Goldman Sachs Growth
WRL Great Companies--Global/2/
WRL NWQ Value Equity
WRL Pilgrim Baxter Mid Cap Growth
WRL Salomon All Cap
WRL T. Rowe Price Dividend Growth
WRL T. Rowe Price Small Cap

/(1)/Formerly known as Endeavor Select Portfolio.
/(2)/Formerly the PFL Endeavor Target Account.
/(3)/Formerly known as Endeavor Value Equity Portfolio.
/(4)/Formerly known as Endeavor Opportunity Value Portfolio.

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Depending upon their investment performance, you can make or lose money in any
of the subaccounts.

You can also allocate your premium payments to the fixed account.

4. PERFORMANCE

The value of the policy will vary up or down depending upon the investment
performance of the subaccounts you choose. We provide past performance
information in Appendix B and in the SAI. This data does not indicate future
performance.

5. EXPENSES

No deductions are made from premium payments at the time you buy the policy so
that the full amount of each premium payment is invested in one or more of your
investment choices.

We may deduct a surrender charge of up to 7% of premium payments withdrawn
within seven years after the premium is paid. To calculate surrender charges,
we consider the premium you paid to come out before any earnings.

Full surrenders, partial withdrawals, and transfers from a guaranteed period
option of the fixed account may also be subject to an excess interest
adjustment, which may increase or decrease the amount you receive. This
adjustment may also apply to amounts applied to an annuity payment option from
a guaranteed period option of the fixed account.

We deduct daily mortality and expense risk fees and administrative charges at
an annual rate of 1.40% (if you choose the "Return of Premium Death Benefit")
or 1.55% (if you choose any other death benefit option) from the assets in each
subaccount.

During the accumulation phase, we deduct an annual service charge of no more
than $35 from the policy value on each policy anniversary and at the time of
surrender. The charge is waived if either the policy value or the sum of all
premium payments, minus all partial withdrawals, is at least $50,000.

We will deduct state premium taxes, which currently range from 0% to 3.50%,
upon total surrender, payment of a death benefit, or when annuity payments
begin.

If you elect the "family income protector" rider, then there is an annual fee
during the accumulation phase of 0.30% of the minimum annuitization value. If
you receive annuity payments under the rider, then there is a guaranteed
payment fee at an annual rate of 1.25% of the daily net asset value in the
separate account.

The value of the net assets of the subaccounts will reflect the management fee
and other expenses incurred by the underlying portfolios.

6. ACCESS TO YOUR MONEY

You can take out $500 or more anytime during the accumulation phase (except
under certain qualified policies). After one year, you may, free of surrender
charges once each policy year, take out up to the greater of:
. 10% of your payments; or
. any gains in the policy.

Amounts withdrawn in the first year, or in excess of this free amount, may be
subject to a surrender charge and/or excess interest adjustment.

The gains in the policy are the amount equal to the policy value, minus the sum
of all premium payments, reduced by all prior partial withdrawals.

If you have policy value in the fixed account, you may also take up to the
greater of 10% of premium payments or any gains in the policy free of excess
interest adjustments.

You may have to pay income tax and a tax penalty on any money you take out.

Access to amounts held in qualified policies may be restricted or prohibited.

7. ANNUITY PAYMENTS (THE INCOME PHASE)

The policy allows you to receive income under one of five annuity payment
options. You may

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choose from fixed payment options, variable payment options, or a combination
of both. If you select a variable payment option, the dollar amount of your
payments may go up or down.

8. DEATH BENEFIT

If you are both the owner and the annuitant and you die before the income phase
begins, then your beneficiary will receive a death benefit.

Naming different persons as owner and annuitant can affect whether the death
benefit is payable and to whom amounts will be paid. Use care when naming
owners, annuitants and beneficiaries, and consult your agent if you have
questions.

You generally may choose one of the following guaranteed minimum death
benefits:
. 5% Annually Compounding
. Greater of 5% Annually Compounding through age 80 or Annual Step-Up through
age 80
. Monthly Step-Up through age 80
. Return of Premium

Charges are lower for the Return of Premium Death Benefit than they are for the
other three.

These choices are restricted for annuitants and owners over age 74.

If the owner is not the annuitant, no death benefit is paid if the owner dies.

9. TAXES

Your earnings, if any, are not taxed until you take them out. If you take money
out during the accumulation phase, earnings come out first for federal tax
purposes, and are taxed as ordinary income. If you are younger than 59 1/2 when
you take money out, you may be charged a 10% federal penalty tax on the
earnings. Payments during the income phase may be considered partly a return of
your original investment so that part of each payment would not be taxable as
income.

10. ADDITIONAL FEATURES

This policy has additional features that might interest you. These include the
following:

. You can arrange to have money automatically sent to you monthly, quarterly,
semi-annually or annually while your policy is in the accumulation phase.
This feature is referred to as the "systematic payout option." Amounts you
receive may be included in your gross income, and in certain circumstances,
may be subject to penalty taxes.

. You can elect an optional rider that guarantees you a minimum annuitization
value. This feature is called the "family income protector." There is an
extra charge for this rider and the rider may vary by state.

. Under certain unemployment circumstances, you may withdraw all or a portion
of the policy value free of surrender charges and excess interest
adjustments. This feature is called the "unemployment waiver."

. You may make transfers and/or change the allocation of additional premium
payments by telephone.

. You can arrange to have a certain amount of money (at least $500)
automatically transferred from the fixed account, the Endeavor Money Market
Subaccount, or the Dreyfus U.S. Government Securities Subaccount, either
monthly or quarterly, into your choice of one or more subaccounts. This
feature is called "dollar cost averaging."

. We will, upon your request, automatically transfer amounts among the
subaccounts on a regular basis to maintain a desired allocation of the
policy value among the various subaccounts. This feature is called "asset
rebalancing."

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These features are not available in all states and may not be suitable for your
particular situation.

11. OTHER INFORMATION

Right to Cancel Period. You may return your policy for a refund. The amount of
time you have to return the policy will depend on the state where the policy
was issued. Our right to cancel period is 10 days (after you receive the
policy), or whatever longer time may be permitted by state law. The amount of
the refund will generally be the policy value. We will pay the refund within 7
days after we receive written notice of cancellation and the returned policy.
The policy will then be deemed void. In some states you may have more or less
than 10 days to return a policy, or receive a refund of more (or less) than the
policy value.

No Probate. Usually, when the annuitant dies, the person you choose as your
beneficiary will receive the death benefit under this policy without going
through probate. State laws vary on how the amount that may be paid is treated
for estate tax purposes.

Who should purchase the Policy? This policy is designed for people seeking
long-term tax-deferred accumulation of assets, generally for retirement or
other long-term purposes; and for persons who have maximized their use of other
retirement savings methods, such as 401(k) plans. The tax-deferred feature is
most attractive to people in high federal and state tax brackets. The tax
deferral features of variable annuities are unnecessary when purchased to fund
a qualified plan. You should not buy this policy if you are looking for a
short-term investment or if you cannot take the risk of losing money that you
put in.

There are various fees and charges associated with variable annuities. You
should consider whether the features and benefits of this policy, unique to
variable annuities, such as the opportunity for lifetime income payments, a
guaranteed death benefit, the guaranteed level of certain charges, and the
family income protector, make this policy appropriate for your needs.

Financial Statements. Financial Statements for PFL and the separate account are
in the SAI.

12. INQUIRIES

If you need more information, please contact us at:

Administrative and Service Office
Financial Markets Division
Variable Annuity Department
PFL Life Insurance Company
4333 Edgewood Road N.E.
P.O. Box 3183
Cedar Rapids, IA 52406-3183

You may check your policy at www.pfllife.com/fmd. Follow the logon procedures.
You will need your pre-assigned Personal Identification Number ("PIN") to
access information about your policy.

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ANNUITY POLICY FEE TABLE
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

Policy Owner Transaction Expenses
-------------------------------------------
<S> <C>
Sales Load On Purchase Payments....... 0
Maximum Surrender Charge
(as a % of premium payments
surrendered)/(1)//(2)/.............. 7%
Annual Service Charge/(1)/.. $35 Per Policy
Transfer Fee/(1)/......... Currently No Fee
</TABLE>
<TABLE>
<CAPTION>
Separate Account Annual Expenses
(as a percentage of average account value)
<S> <C>
Mortality and Expense Risk Fee/(3)/..... 1.40%
Administrative Charge................... 0.15%
-----
TOTAL SEPARATE ACCOUNT ANNUAL EXPENSES.. 1.55%
</TABLE>
--------------------------------------------------------------------------------
Portfolio Annual Expenses/(4)/ (as a percentage of average net assets and after
expense reimbursements)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Total
Total Account
Portfolio and
Management Other Rule Annual Portfolio
Fees Expenses 12b-1 Fees Expenses Expenses
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Capital Guardian
Global/(5)/ 1.05% 0.39% -- 1.44% 2.99%
Capital Guardian U.S.
Equity/(6)/ 0.85% 0.15% -- 1.00% 2.55%
Capital Guardian
Value/(5)//(7)/ 0.85% 0.07% 0.08% 1.00% 2.55%
Dreyfus Small Cap
Value/(7)/ 0.80% 0.10% 0.32% 1.22% 2.77%
Dreyfus U.S. Government
Securities 0.65% 0.12% -- 0.77% 2.32%
Endeavor Asset
Allocation/(7)/ 0.75% 0.10% 0.02% 0.87% 2.42%
Endeavor Money Market 0.50% 0.05% -- 0.55% 2.10%
Endeavor Enhanced Index 0.75% 0.04% -- 0.79% 2.34%
Endeavor High Yield/(8)/ 0.78% 0.50% -- 1.28% 2.83%
Endeavor Janus
Growth/(8)/ 0.80% 0.05% -- 0.85% 2.40%
Jennison Growth/(5)//(7)/ 0.85% 0.05% 0.06% 0.96% 2.51%
T. Rowe Price Equity
Income/(7)/ 0.80% 0.07% 0.01% 0.88% 2.43%
T. Rowe Price Growth
Stock/(7)/ 0.80% 0.07% 0.01% 0.88% 2.43%
T. Rowe Price
International Stock 0.90% 0.10% -- 1.00% 2.55%
Janus Aspen--Aggressive
Growth--
Service Shares/(9)/ 0.65% 0.02% 0.25% 0.92% 2.47%
Janus Aspen--Strategic
Value--Service
Shares/(9)/ 0.65% 0.04% 0.25% 0.94% 2.49%
Janus Aspen--Worldwide
Growth--
Service Shares/(9)/ 0.65% 0.05% 0.25% 0.95% 2.50%
Transamerica VIF Growth 0.70% 0.15% -- 0.85% 2.40%
Fidelity--VIP Equity-
Income--Service Class
2/(10)/ 0.48% 0.10% 0.25% 0.83% 2.38%
Fidelity--VIP II
Contrafund(R)--Service
Class 2/(10)/ 0.58% 0.12% 0.25% 0.95% 2.50%
Fidelity--VIP III Growth
Opportunities--Service
Class 2/(10)/ 0.58% 0.13% 0.25% 0.96% 2.51%
Fidelity--VIP III Mid
Cap--Service Class
2/(10)/ 0.57% 0.43% 0.25% 1.25% 2.80%
WRL Alger Aggressive
Growth 0.80% 0.09% -- 0.89% 2.44%
WRL Gabelli Global
Growth/(11)//(12)/ 1.00% 0.20% -- 1.20% 2.75%
WRL Goldman Sachs
Growth/(11)/ 0.90% 0.10% -- 1.00% 2.55%
WRL Great Companies--
Global/2//(11)/ 0.80% 0.20% -- 1.00% 2.55%
WRL Janus Global/(13)/ 0.80% 0.12% -- 0.92% 2.47%
WRL NWQ Value Equity 0.80% 0.10% -- 0.90% 2.45%
WRL Pilgrim Baxter Mid
Cap Growth/(11)//(12)/ 0.90% 0.10% -- 1.00% 2.55%
WRL Salomon All Cap/(11)/ 0.90% 0.10% -- 1.00% 2.55%
WRL T. Rowe Price
Dividend
Growth/(11)//(12)/ 0.90% 0.10% -- 1.00% 2.55%
WRL T. Rowe Price Small
Cap/(11)/ 0.75% 0.25% -- 1.00% 2.55%
</TABLE>

8
<PAGE>

/(1)/ The surrender charge and transfer fee, if any are imposed, apply to each
policy, regardless of how policy value is allocated among the separate
account and the fixed account. The service charge applies to the fixed
account and the separate account, and is assessed on a pro rata basis
relative to each account's policy value as a percentage of the policy's
total policy value. The service charge is deducted on each policy
anniversary and at the time of surrender. There is no fee for the first
12 transfers per year. For additional transfers, PFL may charge a fee of
$10 per transfer, but currently does not charge for any transfers.

/(2)/ The surrender charge is decreased based on the number of years since the
premium payment was made, from 7% in the year in which the premium
payment was made, to 0% in the eighth year after the premium payment was
made. If applicable a surrender charge will only be applied to
withdrawals that exceed the amount available under certain listed
exceptions.

/(3)/ Mortality and expense risk fees shown (1.40%) are for the "5% Annually
Compounding Death Benefit," the "Greater of 5% Annually Compounding
through age 80 Death Benefit or Annual Step-Up through age 80 Death
Benefit," and the "Monthly Step-Up through age 80 Death Benefit." This
reflects a fee that is 0.15% per year higher than the 1.25%
corresponding fee for the "Return of Premium Death Benefit."

/(4)/ The fee table information relating to the underlying funds was provided
to PFL by the underlying funds, their investment advisers or managers,
and PFL has not and cannot independently verify the accuracy or
completeness of such information. Actual future expenses of the
portfolios may be greater or less than those shown in the Table.
Therefore, PFL disclaims any and all liability for such information.

/(5)/ Capital Guardian Global Portfolio was formerly Endeavor Select
Portfolio, Capital Guardian Value Portfolio was formerly Endeavor Value
Equity Portfolio and Jennison Growth Portfolio was formerly Endeavor
Opportunity Value Portfolio. On October 9, 2000, each Portfolio's
advisor and investment policy were changed. The "Other Expenses" shown
for 1999 were before these changes occurred. The "Management Fees" shown
are the current fees.

/(6)/ Capital Guardian U.S. Equity Portfolio commenced operations on October
9, 2000, so the expenses shown are estimates for the first year of
operations.

/(7)/ The Board of Trustees of Endeavor Series Trust (the "Trust") have
authorized an arrangement whereby, subject to best price and execution,
executing brokers will share commissions with the Trust's affiliated
broker. Under supervision of the Trustees, the affiliated broker will
use the "recaptured commissions" to promote marketing of the Trust's
shares. The staff of the Securities and Exchange Commission believes
that, through the use of these recaptured commissions, the Trust is
indirectly paying for distribution expenses and such amounts are shown
as 12b-1 fees in the above table. This use of recaptured commissions to
promote the sale of the Trust's shares involves no additional costs to
the Trust or any owner. Endeavor Series Trust, based on advice of
counsel, does not believe that recaptured brokerage commissions should
be treated as 12b-1 fees. For more information on the Trust's Brokerage
Enhancement Plan, see the Trust's prospectus accompanying this
Prospectus.

/(8)/ The "Management Fees" have been restated to reflect current fees.

/(9)/ The expenses in the Annuity Policy Fee Table are based on estimated
expenses the new Service Shares Class of each portfolio expects to incur
in its initial fiscal year.

/(10)/ Service Class 2 expenses are based on estimated expenses for the first
year. Fidelity VIP expenses are without any reimbursement.

/(11)/ Because WRL Goldman Sachs Growth, WRL Pilgrim Baxter Mid Cap Growth,
WRL

9
<PAGE>

Salomon All Cap, WRL T. Rowe Price Dividend Growth and WRL T. Rowe
Price Small Cap commenced operations on May 3, 1999, and because WRL
Gabelli Global Growth and WRL Great Companies--Global/2/ commenced
operations on September 1, 2000, the percentages set forth as "Other
Expenses" and "Total Portfolio Annual Expenses" are annualized.

/(12)/ The Management Fee in the Fee Table is based on portfolio average daily
net assets of up to $500 million for WRL Gabelli Global Growth, and up
to $100 million for WRL Pilgrim Baxter Mid Cap Growth and WRL T. Rowe
Price Dividend Growth. See the underlying fund prospectus for more
information.

/(13)/ Effective September 1, 2000, the WRL Janus Global portfolio was closed
to new investors.

10
<PAGE>

EXAMPLES

You would pay the following expenses on a $1,000 investment, assuming a
hypothetical 5% annual return on assets, assuming the entire policy value is in
the applicable subaccount, and assuming the family income protector rider has
not been selected:

The expenses reflect different mortality and expense risk fees depending on
which death benefit you select:
A = Return of Premium Death Benefit (1.25%)
B = 5% Annually Compounding Death Benefit, Greater of 5% Annually Compounding
through age 80 Death Benefit or Annual Step-Up through age 80 Death
Benefit, or Monthly Step-Up through age 80 Death Benefit (1.40%)

1 3 5 10 1 3 5 10
Subaccounts Year Years Years Years Year Years Years Years
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Capital Guardian Global A $ 99 $143 $196 $320 $ 29 $ 89 $ 151 $ 320
-----------------------------------------------------------
B $101 $147 $204 $334 $ 31 $ 93 $ 159 $ 334
----------------------------------------------------------------------------------------
Capital Guardian U.S.
Equity A $ 95 $130 $173 $277 $ 25 $ 76 $ 130 $ 277
-----------------------------------------------------------
B $ 96 $134 $181 $292 $ 26 $ 80 $ 137 $ 292
----------------------------------------------------------------------------------------
Capital Guardian Value A $ 95 $130 $173 $277 $ 25 $ 76 $ 130 $ 277
-----------------------------------------------------------
B $ 96 $134 $181 $292 $ 26 $ 80 $ 137 $ 292
----------------------------------------------------------------------------------------
Dreyfus Small Cap Value A $ 97 $136 $184 $298 $ 27 $ 82 $ 141 $ 298
-----------------------------------------------------------
B $ 98 $141 $192 $313 $ 28 $ 87 $ 148 $ 313
----------------------------------------------------------------------------------------
Dreyfus U.S. Government
Securities A $ 92 $123 $161 $253 $ 22 $ 69 $ 118 $ 253
-----------------------------------------------------------
B $ 94 $127 $169 $269 $ 24 $ 73 $ 126 $ 269
----------------------------------------------------------------------------------------
Endeavor Asset
Allocation A $ 93 $126 $166 $264 $ 23 $ 72 $ 123 $ 264
-----------------------------------------------------------
B $ 95 $130 $174 $279 $ 25 $ 76 $ 131 $ 279
----------------------------------------------------------------------------------------
Endeavor Money Market A $ 90 $116 $149 $231 $ 20 $ 62 $ 107 $ 231
-----------------------------------------------------------
B $ 92 $121 $157 $246 $ 22 $ 67 $ 114 $ 246
----------------------------------------------------------------------------------------
Endeavor Enhanced Index A $ 93 $123 $162 $255 $ 23 $ 69 $ 119 $ 255
-----------------------------------------------------------
B $ 94 $128 $170 $271 $ 24 $ 74 $ 127 $ 271
----------------------------------------------------------------------------------------
Endeavor High Yield A $ 97 $138 $188 $304 $ 27 $ 84 $ 144 $ 304
-----------------------------------------------------------
B $ 99 $143 $195 $319 $ 29 $ 89 $ 151 $ 319
----------------------------------------------------------------------------------------
Endeavor Janus Growth A $ 93 $125 $165 $262 $ 23 $ 71 $ 122 $ 262
-----------------------------------------------------------
B $ 95 $130 $173 $277 $ 25 $ 76 $ 130 $ 277
----------------------------------------------------------------------------------------
Jennison Growth A $ 94 $129 $171 $273 $ 24 $ 75 $ 128 $ 273
-----------------------------------------------------------
B $ 96 $133 $179 $288 $ 26 $ 79 $ 135 $ 288
----------------------------------------------------------------------------------------
T. Rowe Price Equity
Income A $ 93 $126 $166 $265 $ 23 $ 72 $ 124 $ 265
-----------------------------------------------------------
B $ 95 $131 $174 $280 $ 25 $ 77 $ 131 $ 280
----------------------------------------------------------------------------------------
T. Rowe Price Growth
Stock A $ 93 $126 $166 $265 $ 23 $ 72 $ 124 $ 265
-----------------------------------------------------------
B $ 95 $131 $174 $280 $ 25 $ 77 $ 131 $ 280
----------------------------------------------------------------------------------------
T. Rowe Price
International Stock A $ 95 $130 $173 $277 $ 25 $ 76 $ 130 $ 277
-----------------------------------------------------------
B $ 96 $134 $181 $292 $ 26 $ 80 $ 137 $ 292
----------------------------------------------------------------------------------------
Janus Aspen--Aggressive
Growth-- A $ 94 $127 $169 $269 $ 24 $ 73 $ 126 $ 269
-----------------------------------------------------------
Service Shares B $ 95 $132 $176 $284 $ 25 $ 78 $ 133 $ 284
----------------------------------------------------------------------------------------
Janus Aspen--Strategic
Value-- A $ 94 $128 $170 $271 $ 24 $ 74 $ 127 $ 271
-----------------------------------------------------------
Service Shares B $ 96 $132 $178 $286 $ 26 $ 78 $ 134 $ 286
----------------------------------------------------------------------------------------
Janus Aspen--Worldwide
Growth-- A $ 94 $128 $170 $272 $ 24 $ 74 $ 127 $ 272
-----------------------------------------------------------
Service Shares B $ 96 $133 $178 $287 $ 26 $ 79 $ 135 $ 287
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
</TABLE>

11
<PAGE>

EXAMPLES continued

<TABLE>
<CAPTION>
If the Policy is If the Policy is annuitized at
surrendered at the end the end of the applicable time
of the applicable period or if the Policy is simply
time period. kept in the accumulation phase.
1 3 5 10 1 3 5 10
Subaccounts Year Years Years Years Year Years Years Years
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Transamerica VIF Growth A $93 $125 $165 $262 $ 23 $ 71 $ 122 $ 262
------------------------------------------------------------
B $95 $130 $173 $277 $ 25 $ 76 $ 130 $ 277
-----------------------------------------------------------------------------------------
Fidelity--VIP Equity-
Income A $93 $125 $164 $260 $ 23 $ 71 $ 121 $ 260
------------------------------------------------------------
Service Class 2 B $94 $129 $172 $275 $ 24 $ 75 $ 129 $ 275
-----------------------------------------------------------------------------------------
Fidelity--VIP II
Contrafund(R) A $94 $128 $170 $272 $ 24 $ 74 $ 127 $ 272
------------------------------------------------------------
Service Class 2 B $96 $133 $178 $287 $ 26 $ 79 $ 135 $ 287
-----------------------------------------------------------------------------------------
Fidelity--VIP III Growth
Opportunities A $94 $129 $171 $273 $ 24 $ 75 $ 128 $ 273
------------------------------------------------------------
Service Class 2 B $96 $133 $179 $288 $ 26 $ 79 $ 135 $ 288
-----------------------------------------------------------------------------------------
Fidelity--VIP III Mid
Cap A $97 $137 $186 $301 $ 27 $ 83 $ 142 $ 301
------------------------------------------------------------
Service Class 2 B $99 $142 $194 $316 $ 29 $ 88 $ 149 $ 316
-----------------------------------------------------------------------------------------
WRL Alger Aggressive
Growth A $94 $126 $167 $266 $ 24 $ 72 $ 124 $ 266
------------------------------------------------------------
B $95 $131 $175 $281 $ 25 $ 77 $ 132 $ 281
-----------------------------------------------------------------------------------------
WRL Gabelli Global
Growth A $97 $136 $183 $296 $ 27 $ 82 $ 140 $ 296
------------------------------------------------------------
B $98 $140 $191 $311 $ 28 $ 86 $ 147 $ 311
-----------------------------------------------------------------------------------------
WRL Goldman Sachs Growth A $95 $130 $173 $277 $ 25 $ 76 $ 130 $ 277
------------------------------------------------------------
B $96 $134 $181 $292 $ 26 $ 80 $ 137 $ 292
-----------------------------------------------------------------------------------------
WRL Great Companies--
Global(/2/) A $95 $130 $173 $277 $ 25 $ 76 $ 130 $ 277
------------------------------------------------------------
B $96 $134 $181 $292 $ 26 $ 80 $ 137 $ 292
-----------------------------------------------------------------------------------------
WRL Janus Global A $94 $127 $169 $269 $ 24 $ 73 $ 126 $ 269
------------------------------------------------------------
B $95 $132 $176 $284 $ 25 $ 78 $ 133 $ 284
-----------------------------------------------------------------------------------------
WRL NWQ Value Equity A $94 $127 $168 $267 $ 24 $ 73 $ 125 $ 267
------------------------------------------------------------
B $95 $131 $175 $282 $ 25 $ 77 $ 132 $ 282
-----------------------------------------------------------------------------------------
WRL Pilgrim Baxter Mid
Cap Growth A $95 $130 $173 $277 $ 25 $ 76 $ 130 $ 277
------------------------------------------------------------
B $96 $134 $181 $292 $ 26 $ 80 $ 137 $ 292
-----------------------------------------------------------------------------------------
WRL Salomon All Cap A $95 $130 $173 $277 $ 25 $ 76 $ 130 $ 277
------------------------------------------------------------
B $96 $134 $181 $292 $ 26 $ 80 $ 137 $ 292
-----------------------------------------------------------------------------------------
WRL T. Rowe Price
Dividend Growth A $95 $130 $173 $277 $ 25 $ 76 $ 130 $ 277
------------------------------------------------------------
B $96 $134 $181 $292 $ 26 $ 80 $ 137 $ 292
-----------------------------------------------------------------------------------------
WRL T. Rowe Price Small
Cap A $95 $130 $173 $277 $ 25 $ 76 $ 130 $ 277
------------------------------------------------------------
B $96 $134 $181 $292 $ 26 $ 80 $ 137 $ 292
-----------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------
</TABLE>

The above tables will assist you in understanding the costs and expenses that
you will bear, directly or indirectly. These include the 1999 expenses of the
underlying portfolios, except for Capital Guardian U.S. Equity, Endeavor Janus
Growth, WRL Goldman Sachs Growth, WRL Pilgrim Baxter Mid Cap Growth, WRL
Salomon All Cap, WRL T. Rowe Price Dividend Growth and WRL T. Rowe Price Small
Cap (whose expenses listed above are estimated for the first full year of
operations). In addition to the expenses listed above, premium taxes may be
applicable.

These examples should not be considered a representation of past or future
expenses, and actual expenses may be greater or less than those shown. The
assumed 5% annual return is hypothetical and should not be considered a
representation of past or future annual returns, which may be greater or less
than the assumed rate.

In the examples, the $35 annual service charge is reflected as a charge of
0.0299% based on average policy value of $116,930.00.

These examples do not reflect the annual fee of 0.30% of the minimum
annuitization value for the family income protector rider. The above expense
figures would be approximately $3 per year higher if you elected that rider.

Financial Information. Condensed financial information for the subaccounts is
in Appendix A to this prospectus.

12
<PAGE>

1. THE ANNUITY POLICY

This prospectus describes The Endeavor Variable Annuity policy offered by PFL
Life Insurance Company.

An annuity is a contract between you, the owner, and an insurance company (in
this case PFL), where the insurance company promises to pay you an income in
the form of annuity payments. These payments begin on a designated date,
referred to as the annuity commencement date. Until the annuity commencement
date, your annuity is in the accumulation phase and the earnings (if any) are
tax deferred. Tax deferral means you generally are not taxed on your annuity
until you take money out of your annuity. After the annuity commencement date,
your annuity switches to the income phase.

The Endeavor Variable Annuity consists of either:
. a group annuity contract that we, PFL Life Insurance Company, issue to the
contract holder and an individual certificate that we issue to you; or
. an individual policy that we issue to you.

This prospectus describes your individual certificate or policy (both are
referred to as the policy in this prospectus). The policy is a flexible premium
variable annuity. You can use the policy to accumulate funds for retirement or
other long-term financial planning purposes. Your individual investment and
your rights are determined primarily by your own policy.

The policy is a "flexible premium" policy because after you purchase it, you
can generally make additional investments of any amount of $50 or more, until
the annuity commencement date. But you are not required to make any additional
investments.

The policy is a "variable" annuity because the value of your investments can go
up or down based on the performance of your investment choices. If you invest
in the separate account, the amount of money you are able to accumulate in your
policy during the accumulation phase depends upon the performance of your
investment choices. The amount of annuity payments you receive during the
income phase from the separate account also depends upon the investment
performance of your investment choices for the income phase. However, if you
annuitize under the family income protector rider, then PFL will guarantee a
minimum amount of your annuity payments.

The policy also contains a fixed account. The fixed account offers interest at
rates that we guarantee will not decrease during the selected guaranteed
period. There may be different interest rates for each different guaranteed
period that you select.

2. PURCHASE

Policy Issue Requirements

PFL will not issue a policy unless:
. PFL receives all information needed to issue the policy;
. PFL receives a minimum initial premium payment; and
. The annuitant and any joint owner are age 90 or younger.

Premium Payments

You should make checks for premium payments payable only to PFL Life Insurance
Company and send them to the administrative and service office. Your check must
be honored in order for PFL to pay any associated payments and benefits due
under the policy.

Initial Premium Requirements

The initial premium payment for nonqualified policies must be at least $5,000,
and at least $1,000 for qualified policies. There is no minimum initial premium
payment for policies issued under section 403(b) of the Internal Revenue Code;
however, your premium must be received within 90 days of the policy date or
your policy will be canceled. We will credit your initial premium payment to
your policy within two business days after the day we receive it and your
complete policy information. If we are unable to credit your initial premium
payment, we will contact you within five business days and explain why. We will
also return your initial premium payment at that time unless you let us keep it
and credit it as soon as possible.

13
<PAGE>

The date on which we credit your initial premium payment to your policy is the
policy date. The policy date is used to determine policy years, policy months
and policy anniversaries.

Additional Premium Payments

You are not required to make any additional premium payments. However, you can
make additional premium payments as often as you like during the lifetime of
the annuitant and during the accumulation phase. Additional premium payments
must be at least $50. We will credit additional premium payments to your policy
as of the business day we receive your premium and required information.
Additional premium payments must be received before the New York Stock Exchange
closes to get same-day pricing of the additional premium payment.

Maximum Total Premium Payments

We allow premium payments up to a total of $1,000,000 without prior approval.

Allocation of Premium Payments

When you purchase a policy, we will allocate your premium payment to the
investment choices you select. Your allocation must be in whole percentages and
must total 100%. We will allocate additional premium payments the same way,
unless you request a different allocation.

If you allocate premium payments to the dollar cost averaging fixed account,
you must give us instructions regarding the subaccount(s) to which transfers
are to be made or we cannot accept your premium payment.

You may change allocations for future additional premium payments by sending us
written instructions or by telephone, subject to the limitations described
under "Telephone Transactions." The allocation change will apply to premium
payments received on or after the date we receive the change request.

Policy Value

You should expect your policy value to change from valuation period to
valuation period. A valuation period begins at the close of trading on the New
York Stock Exchange on each business day and ends at the close of regular
trading on the next succeeding business day. A business day is each day that
the New York Stock Exchange is open. The New York Stock Exchange generally
closes at 4:00 p.m. eastern time. Holidays are generally not business days.

3. INVESTMENT CHOICES

The Separate Account

There are currently thirty-one variable subaccounts available under the
policies for new investors.

The subaccounts invest in shares of the various underlying fund portfolios. The
companies that provide investment advice and administrative services for the
underlying fund portfolios offered through this policy are listed below. The
following variable investment choices are currently offered through this
policy:

ENDEAVOR SERIES TRUST
Subadvised by Capital Guardian Trust Company
Capital Guardian Global Portfolio
Capital Guardian U.S. Equity Portfolio
Capital Guardian Value Portfolio
Subadvised by The Dreyfus Corporation
Dreyfus Small Cap Value Portfolio
Dreyfus U.S. Government Securities Portfolio
Subadvised by Morgan Stanley Asset Management
Endeavor Asset Allocation Portfolio
Endeavor Money Market Portfolio
Subadvised by J.P. Morgan Investment Management Inc.
Endeavor Enhanced Index Portfolio
Subadvised by Massachusetts Financial Services Company
Endeavor High Yield Portfolio
Subadvised by Janus Capital Corporation
Endeavor Janus Growth Portfolio
Subadvised by Jennison Associates LLC
Jennison Growth Portfolio
Subadvised by T. Rowe Price Associates, Inc.
T. Rowe Price Equity Income Portfolio
T. Rowe Price Growth Stock Portfolio

14
<PAGE>

Subadvised by T. Rowe Price International, Inc.
T. Rowe Price International Stock Portfolio

JANUS ASPEN SERIES--SERVICE SHARES
Managed by Janus Capital Corporation
Janus Aspen--Aggressive Growth Portfolio
Janus Aspen--Strategic Value Portfolio
Janus Aspen--Worldwide Growth Portfolio

TRANSAMERICA VARIABLE INSURANCE FUND, INC.
Managed by Transamerica Investment Management, LLC
Transamerica VIF Growth Portfolio

VARIABLE INSURANCE PRODUCTS FUND-SERVICE CLASS 2
Managed by Fidelity Management & Research Company
Fidelity-VIP Equity-Income Portfolio

VARIABLE INSURANCE PRODUCTS FUND II-SERVICE CLASS 2
Managed by Fidelity Management & Research Company
Fidelity-VIP II Contrafund(R) Portfolio

VARIABLE INSURANCE PRODUCTS FUND III-SERVICE CLASS 2
Managed by Fidelity Management & Research Company
Fidelity-VIP III Growth Opportunities Portfolio
Fidelity-VIP III Mid Cap Portfolio

WRL SERIES FUND, INC.
Subadvised by Fred Alger Management, Inc.
WRL Alger Aggressive Growth
Subadvised by Gabelli Asset Management Company
WRL Gabelli Global Growth
Subadvised by Goldman Sachs Asset Management
WRL Goldman Sachs Growth
Subadvised by Great Companies, L.L.C.
WRL Great Companies--Global/2/
Subadvised by NWQ Investment Management Company, Inc.
WRL NWQ Value Equity
Subadvised by Pilgrim Baxter & Associates, Ltd.
WRL Pilgrim Baxter Mid Cap Growth
Subadvised by Salomon Brothers Asset Management Inc
WRL Salomon All Cap
Subadvised by T. Rowe Price Associates, Inc.
WRL T. Rowe Price Dividend Growth
WRL T. Rowe Price Small Cap

The following subaccount is only available to owners that held an investment in
this subaccount on September 1, 2000. However, if you withdraw all your money
from this subaccount after September 1, 2000, you may not reinvest in this
subaccount.

WRL SERIES FUND, INC.
Subadvised by Janus Capital Corporation
WRL Janus Global

The general public may not purchase shares of these underlying fund portfolios.
The investment objectives and policies may be similar to other portfolios and
mutual funds managed by the same investment adviser or manager that are sold
directly to the public. You should not expect the investment results of the
underlying fund portfolios to be the same as those of other portfolios or
mutual funds.

More detailed information, including an explanation of the portfolio's
investment objectives, may be found in the current prospectus for the
underlying funds, which are attached to this prospectus. You should read the
prospectuses for the underlying funds carefully before you invest.

We may receive expense reimbursements or other revenues from the underlying
funds or their managers. The amount of these reimbursements or revenues, if
any, may be different for different funds or portfolios and may be based on the
amount of assets that PFL or the separate account invest in the underlying fund
portfolios.

We do not guarantee that any of the subaccounts will always be available for
premium payments, allocations, or transfers. See the SAI for more information
concerning the possible addition, deletion or substitution of investments.

The Fixed Account

Premium payments allocated and amounts transferred to the fixed account become
part of PFL's general account. Interests in

15
<PAGE>

the general account have not been registered under the Securities Act of 1933
(the "1933 Act"), nor is the general account registered as an investment
company under the 1940 Act. Accordingly, neither the general account nor any
interests therein are generally subject to the provisions of the 1933 or 1940
Acts. PFL has been advised that the staff of the SEC has not reviewed the
disclosures in this prospectus which relate to the fixed account.

We guarantee that the interest credited to the fixed account will not be less
than 3% per year. At the end of the guaranteed period option you selected, the
value in that guaranteed period option will automatically be transferred into a
new guaranteed period option of the same length (or the next shorter period if
the same period is no longer offered) at the current interest rate for that
period. You can transfer to another investment choice by giving us notice
within 30 days before the end of the expiring guaranteed period.

Surrenders or partial withdrawals from a guaranteed period option of the fixed
account are subject to an excess interest adjustment (except at the end of the
guaranteed period). This adjustment may increase or decrease the amount of
interest credited to your policy. The excess interest adjustment will not
decrease the interest credited to your policy below 3% per year, however. You
bear the risk that we will not credit interest greater than 3% per year. We
determine credited rates, which are guaranteed for at least one year, in our
sole discretion.

If you select the fixed account, your money will be placed with PFL's other
general assets. The amount of money you are able to accumulate in the fixed
account during the accumulation phase depends upon the total interest credited.
The amount of annuity payments you receive during the income phase from the
fixed portion of your policy will remain level for the entire income phase.

Transfers

During the accumulation phase, you may make transfers to or from any subaccount
or the fixed account as often as you wish within certain limitations.

Transfers from a guaranteed period option of the fixed account are limited to
the following:
. Transfers at the end of a guaranteed period, if you notify us within 30 days
prior to the end of the guaranteed period that you wish to transfer the
amount in that guaranteed period option to another investment choice. No
excess interest adjustment will apply.
. Transfers of amounts equal to interest credited. This may affect your
overall interest-crediting rate, because transfers are deemed to come from
the oldest premium payment first.
. Other than at the end of a guaranteed period, transfers of amounts from the
guaranteed period option in excess of amounts equal to interest credited,
are subject to an excess interest adjustment. If it is a negative
adjustment, the maximum amount you can transfer is 25% of the amount in that
guaranteed period option, less any previous transfers during the current
policy year. If it is a positive adjustment, we do not limit the amount that
you can transfer.

There are no transfers permitted out of the dollar cost averaging fixed account
option except through the dollar cost averaging program.

Transfers out of a subaccount must be at least $500, or the entire subaccount
value. Transfers of guaranteed period option amounts equal to interest credited
must be at least $50. If less than $500 remains, then we reserve the right to
either deny the transfer or include that amount in the transfer. Transfers must
be received while the New York Stock Exchange is open to get same-day pricing
of the transaction.

Currently, there is no charge for transfers and no limit on the number of
transfers during the accumulation phase. However, in the future, the number of
transfers permitted may be limited and a $10 charge per transfer may apply. We
reserve the right to prohibit transfers to the fixed account if we are
crediting an effective annual interest rate of 3.0% (the guaranteed minimum).

During the income phase of your policy, you may transfer values out of any
subaccount up to
16
<PAGE>

four times per year. However, you cannot transfer values out of the fixed
account in this phase. The minimum amount that can be transferred during this
phase is the lesser of $10 of monthly income, or the entire monthly income of
the annuity units in the subaccount from which the transfer is being made.

Transfers may be made by telephone, subject to the limitations described below
under "Telephone Transactions."

The policy you are purchasing was not designed for professional market timing
organizations or other persons that use programmed, large, or frequent
transfers. The use of such transfers may be disruptive to an underlying fund
portfolio. We reserve the right to reject any premium payment or transfer
request from any person, if, in our judgment, an underlying fund portfolio
would be unable to invest effectively in accordance with its investment
objectives and policies or would otherwise be potentially adversely affected or
if an underlying portfolio would reject our purchase order.

4. PERFORMANCE

PFL periodically advertises performance of the various subaccounts. We may
disclose at least three different kinds of performance. First, we may calculate
performance by determining the percentage change in the value of an
accumulation unit by dividing the increase (decrease) for that unit by the
value of the accumulation unit at the beginning of the period. This performance
number reflects the deduction of the mortality and expense risk fees and
administrative charges. It does not reflect the deduction of any applicable
premium taxes, surrender charges or fees for the family income protector rider.
The deduction of any applicable premium taxes, surrender charges or rider fees
would reduce the percentage increase or make greater any percentage decrease.

Second, any advertisement will also include total return figures, which reflect
the deduction of the mortality and expense risk fees, administrative charges
and surrender charges.

Third, in addition, for certain investment portfolios, performance may be shown
for the period commencing from the inception date of the investment portfolio.
These figures should not be interpreted to reflect actual historical
performance of the subaccounts.

We also may, from time to time, include in our advertising and sales materials,
tax deferred compounding charts and other hypothetical illustrations, which may
include comparisons of currently taxable and tax deferred investment programs,
based on selected tax brackets.

Appendix B contains performance information that you may find useful. It is
divided into various parts, depending upon the type of performance information
shown. Future performance will vary and future results will not be the same as
the results shown.

5. EXPENSES

There are charges and expenses associated with your policy that reduce the
return on your investment in the policy.

Surrender Charges

During the accumulation phase, you can withdraw part or all of the cash value
(restrictions may apply to qualified policies). Cash value is the adjusted
policy value less any applicable surrender charge. We may apply a surrender
charge to compensate us for expenses relating to policy sales, including
commissions to registered representatives and other promotional expenses. After
the first year, you can withdraw up to the greater of 10% of your premium
payments or any gains in the policy once each year free of surrender charges.
This amount is referred to as the free percentage and is determined at the time
of withdrawal. (The free percentage is not cumulative, so not withdrawing
anything in one year does not increase the free withdrawal amount in subsequent
years.) If you withdraw money in excess of the greater of 10% of your premium
payments or any gains in the policy, you might have to pay a surrender charge,
which is a contingent deferred sales charge, on the excess amount. The
following schedule shows the surrender charges that apply during

17
<PAGE>

the seven years following each premium payment:

For example, assume your premium is $100,000 and your policy value is $106,000
at the beginning of policy year 2 and you withdraw $30,000. Since that amount
is more than your free amount of $10,000, you would pay a surrender charge of
$1,400 on the remaining $20,000 (7% of $30,000-$10,000).

You receive the full amount of a requested partial withdrawal because we deduct
any applicable surrender charge (and any negative excess interest adjustment)
from your remaining policy value. You receive your cash value upon full
surrender. For surrender charge purposes, the oldest premium is considered to
be withdrawn first.

Keep in mind that withdrawals may be taxable, and if made before age 59 1/2,
may be subject to a 10% federal penalty tax. For tax purposes, withdrawals are
considered to come from earnings first.

Surrender charges are waived if you withdraw money under the nursing care and
terminal condition withdrawal option or the unemployment waiver.

Excess Interest Adjustment

Withdrawals of cash value from the fixed account may be subject to an excess
interest adjustment. This adjustment could retroactively reduce the interest
credited in the fixed account to the guaranteed minimum of 3% per year or
increase the amount credited. See "Excess Interest Adjustment" in Section 6 of
this propsectus.

Mortality and Expense Risk Fee

We charge a fee as compensation for bearing certain mortality and expense risks
under the policy. Examples include a guarantee of annuity rates, the death
benefits, certain expenses of the policy, and assuming the risk that the
current charges will be insufficient in the future to cover costs of
administering the policy. We may also pay distribution expenses out of this
charge.

For the Return of Premium Death Benefit the mortality and expense risk fee is
at an annual rate of 1.25% of assets. During the accumulation phase, for the 5%
Annually Compounding Death Benefit, the Greater of 5% Annually Compounding
through age 80 Death Benefit or Annual Step-Up through age 80 Death Benefit,
and the Monthly Step-Up through age 80 Death Benefit, the mortality and expense
risk fee is at an annual rate of 1.40% of assets. During the income phase, the
mortality and expense risk fee is always at an annual rate of 1.25% of assets.
This annual fee is assessed daily based on the net asset value of each
subaccount.

If this charge does not cover our actual costs, we absorb the loss. Conversely,
if the charge more than covers actual costs, the excess is added to our
surplus. We expect to profit from this charge. We may use any profit for any
proper purpose, including distribution expenses.

Administrative Charges

We deduct an administrative charge to cover the costs of administering the
policy. This charge is equal to an annual rate of 0.15% of the daily net asset
value of the separate account.

In addition, an annual service charge of $35 (but not more than 2% of the
policy value) is charged on each policy anniversary and at surrender. The
service charge is waived if your policy value or the sum of your premiums, less
all partial withdrawals, is at least $50,000.

Premium Taxes

Some states assess premium taxes on the premium payments you make. We currently
do not deduct for these taxes at the time you make a

18
<PAGE>

premium payment. However, we will deduct the total amount of premium taxes, if
any, from the policy value when:

. you elect to begin receiving annuity payments;
. you surrender the policy; or
. you die and a death benefit is paid (you must also be the annuitant for the
death benefit to be paid).

Generally, premium taxes range from 0% to 3.50%, depending on the state.

Federal, State and Local Taxes

We may in the future deduct charges from the policy for any taxes we incur
because of the policy. However, no deductions are being made at the present
time.

Transfer Fee

You are allowed to make 12 free transfers per year before the annuity
commencement date. If you make more than 12 transfers per year, we reserve the
right to charge $10 for each additional transfer. Premium payments, asset
rebalancing and dollar cost averaging transfers are not considered transfers.
All transfer requests made at the same time are treated as a single request.

Family Income Protector

If you elect the family income protector, there is an annual rider fee during
the accumulation phase of 0.30% of the minimum annuitization value, and a
guaranteed payment fee during the income phase of 1.25% of the daily net asset
value if you annuitize under the rider. The annual rider fee is also deducted
if you surrender the policy. We may raise these fees in the future.

Portfolio Management Fees

The value of the assets in each subaccount will reflect the fees and expenses
paid by the underlying fund. A description of these expenses is found in the
prospectuses for the underlying funds.

6. ACCESS TO YOUR MONEY

During the accumulation phase, you can have access to the money in your policy
in two ways:

. by making a withdrawal (either a complete or partial withdrawal); or
. by taking systematic payouts.

Withdrawals

If you want to make a complete withdrawal, you will receive your cash value.

If you want to take a partial withdrawal, in most cases it must be for at least
$500. Unless you tell us otherwise, we will take the withdrawal from each of
the investment choices in proportion to the policy value.

After one year, you may take up to the greater of 10% of your premium payments
or any gains in the policy free of surrender charges once each policy year.
Remember that any withdrawal you take will reduce the policy value, and might
reduce the amount of the death benefit. See Section 8, Death Benefit, for more
details.

Withdrawals may be subject to a surrender charge. Withdrawals from the fixed
account may also be subject to an excess interest adjustment. Income taxes,
federal tax penalties and certain restrictions may apply to any withdrawals you
make.

Withdrawals from qualified policies may be restricted or prohibited.

During the income phase, you will receive annuity payments under the annuity
payment option you select; however, you generally may not take any other
withdrawals, either complete or partial.

Delay of Payment and Transfers

19
<PAGE>

. the New York Stock Exchange is closed other than for usual weekends or
holidays or trading on the Exchange is otherwise restricted;
. an emergency exists as defined by the SEC or the SEC requires that trading
be restricted; or
. the SEC permits a delay for the protection of owners.

In addition, transfers of amounts from the subaccounts may be deferred under
these circumstances.

Pursuant to the requirements of certain state laws, we reserve the right to
defer payment of the cash value from the fixed account for up to six months. We
may defer payment of any amount until your premium check has cleared your bank.

Excess Interest Adjustment

Money that you withdraw from a guaranteed period option of the fixed account
before the end of its guaranteed period (the number of years you specified the
money would remain in the guaranteed period option) may be subject to an excess
interest adjustment. At the time you request a withdrawal, if interest rates
set by PFL have risen since the date of the initial guarantee, the excess
interest adjustment will result in a lower cash value on surrender. However, if
interest rates have fallen since the date of the initial guarantee, the excess
interest adjustment will result in a higher cash value on surrender.

Generally, all withdrawals from a guaranteed payment option during the first
policy year are subject to an excess interest adjustment. Any amount withdrawn
during a subsequent policy year in excess of the free percentage amount is also
generally subject to an excess interest adjustment. Beginning in the second
policy year, you can, however, withdraw up to the free percentage amount once
each policy year without an excess interest adjustment.

There will be no excess interest adjustment on any of the following:

. a lump sum withdrawal of up to the free percentage amount;

. nursing care and terminal condition withdrawals;

. unemployment waiver;

. withdrawals to satisfy any minimum distribution requirements; and

. systematic payout option payments, which do not exceed 10% of the premium.

Please note that in these circumstances you will not receive a higher cash
value if interest rates have fallen nor will you receive a lower cash value if
interest rates have risen.

7. ANNUITY PAYMENTS (THE INCOME PHASE)

You choose the annuity commencement date. You can change this date by giving us
written notice 30 days before the current annuity commencement date. The new
annuity commencement date must be at least 30 days after we receive notice of
the change. The latest annuity commencement date generally cannot be after the
policy month following the month in which the annuitant attains age 85 (in
certain cases, we may allow the date to be up to the last day of the month
following the month in which the annuitant attains age 95).

Election of Annuity Payment Option. Before the annuity commencement date, if
----------------------------------
the annuitant is alive, you may choose an annuity payment option or change your
election. If the annuitant dies before the annuity commencement date, the
beneficiary may elect to receive the death benefit in a lump sum or under one
of the annuity payment options (unless you become the new annuitant).

Unless you specify otherwise, the annuitant will receive the annuity payments.
After the annuitant's death, the beneficiary will receive any remaining
guaranteed payments.

Annuity Payment Options

20
<PAGE>

policy value" to provide these annuity payments. The adjusted policy value is
the policy value increased or decreased by any applicable excess interest
adjustment. If the adjusted policy value on the annuity commencement date is
less than $2,000, PFL reserves the right to pay it in one lump sum in lieu of
applying it under an annuity payment option. You can receive annuity payments
monthly, quarterly, semi-annually, or annually. (We reserve the right to change
the frequency if payments would be less than $50.)

Unless you choose to receive variable payments under annuity payment options 3
or 5, the amount of each payment will be set on the annuity commencement date
and will not change. You may, however, choose to receive variable payments
under payment options 3 and 5. The dollar amount of the first variable payment
will be determined in accordance with the annuity payment rates set forth in
the applicable table contained in the policy. The dollar amount of additional
variable payments will vary based on the investment performance of the
subaccount(s). The dollar amount of each variable payment after the first may
increase, decrease, or remain constant. If the actual investment performance
exactly matched the assumed investment return of 5% at all times, the amount of
each variable annuity payment would remain equal. If actual investment
performance exceeds the assumed investment return, the amount of the variable
annuity payments would increase. Conversely, if actual investment performance
is lower than the assumed investment return, the amount of the variable annuity
payments would decrease.

A charge for premium taxes and an excess interest adjustment may be made when
annuity payments begin.

The annuity payment options are explained below. Options 1, 2, and 4 are fixed
only. Options 3 and 5 can be fixed or variable.

Payment Option 1--Interest Payments. We will pay the interest on the amount we
-----------------------------------
use to provide annuity payments in equal payments, or this amount may be left
to accumulate for a period of time you and PFL agree to. You and PFL will agree
on withdrawal rights when you elect this option.

Payment Option 2--Income for a Specified Period. We will make level payments
-----------------------------------------------
only for the fixed period you choose. No funds will remain at the end.

Payment Option 3--Life Income. You may choose between:
-----------------------------

Fixed Payments
. No Period Certain--We will make level payments only during the annuitant's
lifetime.
. 10 Years Certain--We will make level payments for the longer of the
annuitant's lifetime or ten years.
. Guaranteed Return of Policy Proceeds--We will make level payments for the
longer of the annuitant's lifetime or until the total dollar amount of
payments we made to you equals the amount applied to this option.

Variable Payments
. No Period Certain--Payments will be made only during the lifetime of the
annuitant.
. 10 Years Certain--Payments will be made for the longer of the annuitant's
lifetime or ten years.

Payment Option 4--Income of a Specified Amount. Payments are made for any
----------------------------------------------
specified amount until the amount applied to this option, with interest, is
exhausted. This will be a series of level payments followed by a smaller final
payment.

Payment Option 5--Joint and Survivor Annuity. You may choose between:
--------------------------------------------

Fixed Payments
. Payments are made during the joint lifetime of the annuitant and a joint
annuitant of your selection. Payments will be made as long as either person
is living.

Variable Payments
. Payments are made during the joint lifetime of the annuitant and a joint
annuitant of your selection. Payments will be made as long as either person
is living.

NOTE CAREFULLY:
--------------

IF:
. you choose Life Income with No Period Certain or a Joint and Survivor
Annuity; and

21
<PAGE>

. the annuitant(s) dies before the due date of the second (third, fourth,
etc.) annuity payment;

THEN:
. we may make only one (two, three, etc.) annuity payments.

THEN:
. the remaining guaranteed payments will be continued to that person's
beneficiary, or their present value may be paid in a single sum.

We will not pay interest on amounts represented by uncashed annuity payment
checks if the postal or other delivery service is unable to deliver checks to
the payee's address of record. The person receiving payments is responsible for
keeping PFL informed of their current address.

Other annuity payment options may be arranged by agreement with PFL. Certain
annuity payment options may not be available in all states.

8. DEATH BENEFIT

We will pay a death benefit to your beneficiary, under certain circumstances,
if the annuitant dies before the accumulation phase and the annuitant was also
an owner. (If the annuitant was not an owner, a death benefit may or may not be
paid. See below). The beneficiary may choose an annuity payment option, or may
choose to receive a lump sum.

When We Pay A Death Benefit

Before the Annuity Commencement Date
------------------------------------
We will pay a death benefit to your beneficiary IF:
. you are both the annuitant and an owner of the policy; and
. you die before the annuity commencement date.

If the only beneficiary is your surviving spouse, then he or she may elect to
continue the policy as the new annuitant and owner, instead of receiving the
death benefit. All future surrender charges will be waived.

We will also pay a death benefit to your beneficiary IF:
. you are not the annuitant; and
. the annuitant dies before the annuity commencement date; and
. you specifically requested that the death benefit be paid upon the
annuitant's death.

Distribution requirements apply to the policy value upon the death of any
owner. These requirements are detailed in the SAI.

After the Annuity Commencement Date
-----------------------------------

The death benefit payable, if any, on or after the annuity commencement date
depends on the annuity payment option selected.

IF:
. you are not the annuitant; and
. you die on or after the annuity commencement date; and
. the entire interest in the policy has not been paid to you;

THEN:
. the remaining portion of such interest in the policy will be distributed at
least as rapidly as under the method of distribution being used as of the
date of your death.

When We Do Not Pay A Death Benefit

No death benefit is paid in the following cases:
-----------------------------------------------
IF:
. you are not the annuitant; and
. the annuitant dies prior to the annuity commencement date; and
. you did not specifically request that the death benefit be paid upon the
annuitant's death;
THEN:
. you will become the new annuitant and the policy will continue.

22
<PAGE>

IF:
. you are not the annuitant; and
. you die prior to the annuity commencement date;
THEN:
. the new owner (unless it is your spouse) must generally surrender the policy
within five years of your death for the policy value increased or decreased
by an excess interest adjustment.

Note carefully. If the owner does not name a contingent owner, the owner's
--------------
estate will become the new owner. If no probate estate is opened (because, for
example, the owner has precluded the opening of a probate estate by means of a
trust or other instrument), and PFL has not received written notice of the
trust as a successor owner signed prior to the owner's death, then that trust
may not exercise ownership rights to the policy. It may be necessary to open a
probate estate in order to exercise ownership rights to the policy if no
contingent owner is named in a written notice received by PFL.

Amount of Death Benefit

. policy value on the date we receive the required information; or
. cash value on the date we receive the required information (this could be
more than the policy value if there is a positive excess interest adjustment
that exceeds the surrender charge); or
. guaranteed minimum death benefit, if any, (discussed below), plus premium
payments, less partial withdrawals from the date of death to the date the
death benefit is paid.

Guaranteed Minimum Death Benefit

On the policy application, you generally may choose one of the four guaranteed
minimum death benefit options listed below.

After the policy is issued, you cannot make an election and the death benefit
cannot be changed.

There is an extra charge for death benefits A, B and C.

A. 5% Annually Compounding Death Benefit
-------------------------------------

The 5% Annually Compounding Death Benefit is:
. the total premium payments; less
. any adjusted partial withdrawals; plus
. interest at an effective annual rate of 5% from the premium payment date
or withdrawal date to the date of death.

The 5% Annually Compounding Death Benefit is not available if the owner or
annuitant is 75 or older on the policy date.

B. Greater of 5% Annually Compounding through age 80 Death Benefit or Annual
-------------------------------------------------------------------------
Step-Up through age 80 Death Benefit
------------------------------------

The death benefit under this option is the greater of 1 or 2 below:

1. The 5% Annually Compounding through age 80 Death Benefit is:
. the total premium payments; less
. any adjusted partial withdrawals; plus
. interest at an effective annual rate of 5% from the premium payment
date or withdrawal date to the earlier of the annuitant's date of
death or the annuitant's 81st birthday.
2. The Annual Step-Up through age 80 Death Benefit is equal to:
. the largest policy value on the policy date or on any policy
anniversary prior to the earlier of the annuitiant's date of death or
the annuitant's 81st birthday; plus
. any premium payments subsequent to the date of any policy anniversary
with the largest policy value; minus
. any adjusted partial withdrawals subsequent to the date of the policy
anniversary with the largest policy value.

23
<PAGE>

This benefit is not available if the owner or annuitant is age 81 or older
on the policy date.

C.Monthly Step-Up through age 80 Death Benefit
--------------------------------------------
The Monthly Step-Up through age 80 Death Benefit is:

. the largest policy value on the policy date or on any monthly
anniversary prior to the earlier of the annuitant's date of death or the
annuitant's 81st birthday; plus
. any premium payments subsequent to the date of any monthly anniversary
with the largest policy value; minus
. any adjusted partial withdrawals subsequent to the date of the monthly
anniversary with the largest policy value.

This benefit is not available if the owner or annuitant is age 81 or older
on the policy date.

D.Return of Premium Death Benefit
-------------------------------
The Return of Premium Death Benefit is:
. total premium payments; less
. any adjusted partial withdrawals (discussed below) as of the date of
death.

The Return of Premium Death Benefit will be in effect if you do not choose
one of the other death benefit options on the policy application. The
charges are lower for this option than for the other three.

THEN:
. we will increase the policy value to be equal to the guaranteed minimum
death benefit. This increase is made only at the time the surviving spouse
elects to continue the policy.

Adjusted Partial Withdrawal

When you request a partial withdrawal, your guaranteed minimum death benefit
will be reduced by an amount called the adjusted partial withdrawal. Under
certain circumstances, the adjusted partial withdrawal may be more than the
amount of your withdrawal request. It is also possible that if a death benefit
is paid after you have made a partial withdrawal, then the total amount paid
could be less than the total premium payments. We have included a detailed
explanation of this adjustment in the SAI.

9. TAXES

NOTE: PFL has prepared the following information on federal income taxes as a
general discussion of the subject. It is not intended as tax advice to any
individual. You should consult your own tax adviser about your own
circumstances. PFL has included an additional discussion regarding taxes in the
SAI.

Annuity Policies in General

Deferred annuity policies are a way of setting aside money for future needs
like retirement. Congress recognized how important saving for retirement is and
provided special rules in the Internal Revenue Code for annuities.

Simply stated, these rules provide that generally you will not be taxed on the
earnings, if any, on the money held in your annuity policy until you take the
money out. This is referred to as tax deferral. There are different rules as to
how you will be taxed depending on how you take the money out and the type of
policy--qualified or nonqualified (discussed below).

You will not be taxed on increases in the value of your policy until a
distribution occurs--either as a withdrawal or as annuity payments.

When a non-natural person (e.g., corporation or certain other entities other
than tax-qualified trusts) owns a nonqualified policy, the policy will
generally not be treated as an annuity for tax purposes.

24
<PAGE>

Qualified and Nonqualified Policies

If you purchase the policy under an individual retirement annuity, a pension
plan, or specially sponsored program, your policy is referred to as a qualified
policy.

Qualified policies are issued in connection with the following plans:
. Individual Retirement Annuity (IRA): A traditional IRA allows individuals to
make contributions, which may be deductible, to the policy. A Roth IRA also
allows individuals to make contributions to the policy, but it does not
allow a deduction for contributions, and distributions may be tax-free if
the owner meets certain rules.
. Tax-Sheltered Annuity (403(b) Plan): A 403(b) Plan may be made available to
employees of certain public school systems and tax-exempt organizations and
permits contributions to the policy on a pre-tax basis.
. Corporate Pension and Profit-Sharing and H.R. 10 Plan: Employers and self-
employed individuals can establish pension or profit-sharing plans for their
employees or themselves and make contributions to the policy on a pre-tax
basis.
. Deferred Compensation Plan (457 Plan): Certain governmental and tax-exempt
organizations can establish a plan to defer compensation on behalf of their
employees through contributions to the policy.

If you purchase the policy as an individual and not under an individual
retirement annuity, 403(b) plan, 457 plan, or pension or profit sharing plan,
your policy is referred to as a nonqualified policy.

Withdrawals--Qualified Policies

The information herein describing the taxation of nonqualified policies does
not apply to qualified policies.

There are special rules that govern with respect to qualified policies.
Generally, these rules restrict:
. the amount that can be contributed to the policy during any year; and
. the time when amounts can be paid from the policy.

In addition, a penalty tax may be assessed on amounts withdrawn from the policy
prior to the date you reach age 59 1/2, unless you meet one of the exceptions
to this rule. You may also be required to begin taking minimum distributions
from the policy by a certain date. The terms of the plan may limit the rights
otherwise available to you under the policy. We have provided more information
in the SAI.

You should consult your legal counsel or tax adviser if you are considering
purchasing a policy for use with any retirement plan.

Withdrawals--403(b) Policies

The Internal Revenue Code limits withdrawals from certain 403(b) policies.
Withdrawals can generally only be made when an owner:
. reaches age 59 1/2;
. leaves his/her job;
. dies;
. becomes disabled (as that term is defined in the Internal Revenue Code); or
. declares hardship. However, in the case of hardship, the owner can only
withdraw the premium payments and not any earnings.

Diversification and Distribution Requirements

The Internal Revenue Code provides that the underlying investments for a
variable annuity must satisfy certain diversification requirements in order to
be treated as an annuity. The policy must also meet certain distribution
requirements at the death of an owner in order to be treated as an annuity.
These diversification and distribution requirements are discussed in the SAI.
PFL may modify the policy to attempt to maintain favorable tax treatment.

Withdrawals--Nonqualified Policies

If you make a withdrawal from your policy before the annuity commencement date,
the Internal Revenue Code treats that withdrawal as first coming from earnings
and then from your

25
<PAGE>

premium payments. When you make a withdrawal you are taxed on the amount of the
withdrawal that is earnings. (The excess interest adjustment resulting from the
withdrawal may affect the amount on which you are taxed. The tax treatment of
excess interest adjustments is uncertain. You should consult a tax adviser if a
withdrawal results in an excess interest adjustment.) Different rules apply for
annuity payments. See "Annuity Payments" below.

The Internal Revenue Code also provides that withdrawn earnings may be subject
to a penalty. The amount of the penalty is equal to 10% of the amount that is
includable in income. Some withdrawals will be exempt from the penalty. They
include any amounts:
. paid on or after the taxpayer reaches age 59 1/2;
. paid after an owner dies;
. paid if the taxpayer becomes totally disabled (as that term is defined in
the Internal Revenue Code);
. paid in a series of substantially equal payments made annually (or more
frequently) under a lifetime annuity;
. paid under an immediate annuity; or
. which come from premium payments made prior to August 14, 1982.

All deferred non-qualified annuity policies that are issued by PFL (or its
affiliates) to the same owner during any calendar year are treated as one
annuity for purposes of determining the amount includable in the owner's income
when a taxable distribution occurs.

Taxation of Death Benefit Proceeds

Amounts may be distributed from the policy because of the death of an owner or
the annuitant. Generally, such amounts are includable in the income of the
recipient:
. if distributed in a lump sum, these amounts are taxed in the same manner as
a full surrender; or
. if distributed under an annuity payment option, these amounts are taxed in
the same manner as annuity payments.

For these purposes, the "investment in the contract" is not affected by the
owner's or annuitant's death. That is, the "investment in the contract" remains
generally the total premium payments (less amounts received which were not
includable in gross income). The same tax treatment applies to any amounts
distributed after an owner's death.

Annuity Payments

Although the tax consequences may vary depending on the annuity payment option
you select, in general, for nonqualified and certain qualified policies, only a
portion of the annuity payments you receive will be includable in your gross
income.

In general, the excludable portion of each annuity payment you receive will be
determined as follows:
. Fixed payments--by dividing the "investment in the contract" on the annuity
commencement date by the total expected value of the annuity payments for
the term of the payments. This is the percentage of each annuity payment
that is excludable.
. Variable payments--by dividing the "investment in the contract" on the
annuity commencement date by the total number of expected periodic payments.
This is the amount of each annuity payment that is excludable.

The remainder of each annuity payment is includable in gross income. Once the
"investment in the contract" has been fully recovered, the full amount of any
additional annuity payments is includable in gross income.

If you select more than one annuity payment option, special rules govern the
allocation of the policy's entire "investment in the contract" to each such
option, for purposes of determining the excludable amount of each payment
received under that option. We advise you to consult a competent tax adviser as
to the potential tax effects of allocating amounts to any particular annuity
payment option.

If, after the annuity commencement date, annuity payments stop because an
annuitant died, the excess (if any) of the "investment in the contract" as of
the annuity commencement date

26
<PAGE>

over the aggregate amount of annuity payments received that was excluded from
gross income is generally allowable as a deduction for your last taxable year.

Transfers, Assignments or Exchanges of Policies

A transfer of ownership or assignment of a policy, the designation of an
annuitant or payee or other beneficiary who is not also the owner, the
selection of certain annuity commencement dates, or a change of annuitant, may
result in certain income or gift tax consequences to the owner that are beyond
the scope of this discussion. An owner contemplating any such transfer,
assignment, selection, or change should contact a competent tax adviser with
respect to the potential tax effects of such a transaction.

Possible Tax Law Changes

Although the likelihood of legislative changes is uncertain, there is always
the possibility that the tax treatment of the policy could change by
legislation or otherwise. You should consult a tax adviser with respect to
legal developments and their effect on the policy.

10. ADDITIONAL FEATURES

Systematic Payout Option

You can select at any time (during the accumulation phase) to receive regular
payments from your policy by using the systematic payout option. Under this
option, you can receive the greater of (1) and (2), divided by the number of
payouts made per year, where:

(1)is up to 10% (annually) of your premium; and
(2)is any gains in the policy.

This amount may be taken free of surrender charges (and excess interest
adjustments). Payments can be made monthly, quarterly, semi-annually, or
annually. Each payment must be at least $50. Monthly and quarterly payments
must be made by electronic funds transfer directly to your checking or savings
account. There is no charge for this benefit.

Family Income Protector

The family income protector may vary by state and may not be available in all
states. For policies sold in New Jersey, certain provisions of the family
income protector differ from the following description. New Jersey residents
should see the separate supplement describing the family income protector for
New Jersey.

The optional "family income protector" rider assures you of a minimum level of
income in the future by guaranteeing a minimum annuitization value (discussed
below) after 10 years. You may elect to purchase this benefit, which guarantees
the total amount you will have to apply to a family income protector payment
option and which guarantees a minimum amount for those payments once you begin
to receive them. By electing this benefit, you can participate in the gains of
the underlying variable investment options you select while knowing that you
are guaranteed a minimum level of income in the future, regardless of the
performance of the underlying variable investment options.

You can annuitize under the family income protector (subject to the conditions
described below) at the greater of the adjusted policy value or the minimum
annuitization value.

Minimum Annuitization Value. The minimum annuitization value is:
---------------------------

. the policy value on the date the rider is issued; plus
. any additional premium payments; minus
. an adjustment for any withdrawals made after the date the rider is issued;
. which is accumulated at the annual growth rate written on page one of the
rider; minus
. any premium taxes.

The annual growth rate is currently 6% per year. PFL may, at its discretion,
change the rate in the future, but the rate will never be less than 3% per
year. Once the rider is added to your policy, the annual growth rate will not
vary during the life of that rider. Withdrawals may reduce the minimum
annuitization value on a basis greater than dollar-for-dollar. See the SAI for
more information.

The minimum annuitization value may only be used to annuitize using the family
income

27
<PAGE>

protector payment options and may not be used with any of the annuity payment
options listed in Section 7 of this prospectus. The family income protector
payment options are:

. Life Income--An election may be made for "No Period Certain" or "10 Years
Certain". In the event of the death of the annuitant prior to the end of the
chosen period certain, the remaining period certain payments will be
continued to the beneficiary.
. Joint and Full Survivor--An election may be made for "No Period Certain" or
"10 Years Certain". Payments will be made as long as either the annuitant or
joint annuitant is living. In the event of the death of both the annuitant
and joint annuitant prior to the end of the chosen period certain, the
remaining period certain payments will be continued to the beneficiary.

The minimum annuitization value is used solely to calculate the family income
protector annuity payments. The family income protector does not establish or
guarantee policy value or guarantee performance of any investment option.
Because this benefit is based on conservative actuarial factors, the level of
lifetime income that it guarantees may be less than the level that would be
provided by application of the policy value at otherwise applicable annuity
factors. Therefore, the family income protector should be regarded as a safety
net. The costs of annuitizing under the family income protector include the
guaranteed payment fee, and also the lower payout levels inherent in the
annuity tables used for those minimum payouts. These costs should be balanced
against the benefits of a minimum payout level.

In addition to the annual growth rate, other benefits and fees under the rider
(the rider fee, the fee waiver threshold, the guaranteed payment fee, and the
waiting period before the family income protector can be exercised) are also
guaranteed not to change after the rider is added. However, all of these
benefit specifications may change if you elect to upgrade the minimum
annuitization value.

Minimum Annuitization Value Upgrade. You can upgrade your minimum annuitization
-----------------------------------
value to the policy value on a policy anniversary. This may be done within 30
days after any policy anniversary before your 85th birthday (earlier if
required by state law). For your convenience, we will put the last date to
upgrade on page one of the rider.

If you upgrade:
. the current rider will terminate and a new one will be issued with its own
specified guaranteed benefits and fees;
. the new rider's specified benefits and fees may not be as advantageous as
before; and
. you will have a new ten year waiting period before you can exercise the
family income protector.

It generally will not be to your advantage to upgrade unless your policy value
exceeds your minimum annuitization value on the applicable policy anniversary.

Conditions of Exercise of the Family Income Protector. You can only annuitize
-----------------------------------------------------
using the family income protector within the 30 days after the tenth or later
policy anniversary after the family income protector is elected or, in the case
of an upgrade of the minimum annuitization value, the tenth or later policy
anniversary following the upgrade; PFL may, at its discretion, change the
waiting period before the family income protector can be exercised in the
future. You cannot, however, annuitize using the family income protector after
the policy anniversary after your 94th birthday (earlier if required by state
law). For your convenience, we will put the first and last date to annuitize
using the family income protector on page one of the rider.

Note Carefully--If you annuitize at any time other than indicated above, you
cannot use the family income protector.

Guaranteed Minimum Stabilized Payments. Annuity payments under the family
--------------------------------------
income protector are guaranteed to never be less than the initial payment. See
the SAI for information concerning the calculation of the initial payment. The
payments will also be "stabilized" or held constant during each policy year.

During the first policy year after annuitizing using the family income
protector, each stabilized payment will equal the initial payment. On each
28
<PAGE>

policy anniversary thereafter, the stabilized payment will increase or decrease
depending on the performance of the investment options you selected (but will
never be less than the initial payment), and then be held constant at that
amount for that policy year. The stabilized payment on each policy anniversary
will equal the greater of the initial payment or the payment supportable by the
annuity units in the selected investment options. See the SAI for additional
information concerning stabilized payments.

Family Income Protector Rider Fee. A rider fee, currently 0.30% of the minimum
---------------------------------
annuitization value on the policy anniversary, is charged annually prior to
annuitization. We will also charge this fee if you take a complete withdrawal.
The rider fee is deducted from each variable investment option in proportion to
the amount of policy value in each subaccount.

The rider fee on any given policy anniversary will be waived if the policy
value exceeds the fee waiver threshold. The fee waiver threshold currently is
two times the minimum annuitization value. PFL may, at its discretion, change
the fee waiver threshold in the future, but it will never be greater than two
and one-half times the minimum annuitization value.

Guaranteed Payment Fee. A guaranteed payment fee, currently equal to an
----------------------
effective annual rate of 1.25% of the daily net asset value in the separate
account, is reflected in the amount of the variable payments you receive if you
annuitize under the family income protector rider. The guaranteed payment fee
is included on page one of the rider.

Termination. The family income protector is irrevocable. You have the option
-----------
not to use the benefit but you will not receive a refund of any fees you have
paid. The family income protector will terminate upon the earliest of the
following:
. annuitization (you will still get guaranteed minimum stabilized payments if
you annuitize using the minimum annuitization value under the family income
protector),
. upgrade of the minimum annuitization value (although a new rider will be
issued),
. termination of your policy, or
. 30 days after the policy anniversary after your 94th birthday (earlier if
required by state law).

Nursing Care and Terminal Condition Withdrawal Option

No surrender charges or excess interest adjustment will apply if you or your
spouse has been:
. confined in a hospital or nursing facility for 30 days in a row; or
. diagnosed with a terminal condition (usually a life expectancy of 12 months
or less).

This benefit is also available to the annuitant or annuitant's spouse if the
owner is not a natural person.

You may exercise this benefit at any time (during the accumulation phase) and
there is no charge for this benefit.

This benefit may not be available in all states. See the policy or endorsement
for details and conditions.

Unemployment Waiver

No surrender charges or excess interest adjustment will apply to withdrawals if
you or your spouse is unemployed. In order to qualify, you (or your spouse,
whichever is applicable) must have been:
. employed full time for at least two years prior to becoming unemployed; and
. employed full time on the policy date; and
. unemployed for at least 60 days in a row at the time of the withdrawal; and
. must have a minimum cash value at the time of withdrawal of $5,000.

You must provide written proof from your State's Department of Labor, which
verifies that you qualify for and are receiving unemployment benefits at the
time of withdrawal.

You may exercise this benefit at any time (during the accumulation phase) and
there is no charge for this benefit.

This benefit is also available to the annuitant or annuitant's spouse if the
owner is not a natural

29
<PAGE>

person. This benefit may not be available in all states. See the policy for
details.

Telephone Transactions

You may make transfers and change the allocation of additional premium payments
by telephone IF:
. you select the "Telephone Transfer/Reallocation Authorization" box in the
policy enrollment form or enrollment information; or
. you later complete an authorization form.

You will be required to provide certain information for identification purposes
when requesting a transaction by telephone and we may record your telephone
call. We may also require written confirmation of your request. We will not be
liable for following telephone requests that we believe are genuine.

Telephone requests must be received while the New York Stock Exchange is open
to get same-day pricing of the transaction. We may discontinue this option at
any time.

Dollar Cost Averaging Program

During the accumulation phase, you may instruct us to automatically transfer
money from the dollar cost averaging fixed account option, the Dreyfus U.S.
Government Securities Subaccount, or the Endeavor Money Market Subaccount, into
any other subaccounts. There is no charge for this program.

Complete and clear instructions must be received before a dollar cost averaging
program will begin. The instructions must include:
. the subaccounts into which money from the dollar cost averaging fixed
account (or other subaccount(s) used for dollar cost averaging) is to be
transferred; and
. either the dollar amount to transfer monthly or quarterly (each transfer
must be at least $500) or the number of transfers (minimum of 6 monthly or 4
quarterly and maximum of 24 monthly or 8 quarterly).

Transfers must begin within 30 days. We will make the transfers on the 28th day
of the applicable month. You may change your allocations at anytime.

Only one dollar cost averaging program can run at one time. This means that any
addition to a dollar cost averaging program must change either the length of
the program or the dollar amount of the transfers. New instructions must be
received each time there is an addition to a dollar cost averaging program.

Any amount in the dollar cost averaging fixed account (or other subaccount(s)
used for dollar cost averaging) for which we have not received complete and
clear instructions will remain in the dollar cost averaging fixed account (or
other such subaccount) until we receive the instructions. If we have not
received complete and clear instructions within 30 days, the interest credited
in the dollar cost averaging fixed account may be adjusted downward, but not
below the guaranteed effective annual interest rate of 3%.

Dollar cost averaging buys more accumulation units when prices are low and
fewer accumulation units when prices are high. It does not guarantee profits or
assure that you will not experience a loss. You should consider your ability to
continue the dollar cost averaging program during all economic conditions.

We may credit different interest rates for dollar cost averaging programs of
varying time periods. If you discontinue the dollar cost averaging program
before its completion, then the interest credited on amounts in the dollar cost
averaging fixed account may be adjusted downward, but not below the minimum
guaranteed effective annual interest rate of 3%.

Asset Rebalancing

30
<PAGE>

and discontinue asset rebalancing. New instructions are required to start asset
rebalancing. Asset rebalancing ignores amounts in the fixed account. You can
choose to rebalance monthly, quarterly, semi-annually, or annually.

11. OTHER INFORMATION

Ownership

You, as owner of the policy, exercise all rights under the policy. You can
change the owner at any time by notifying us in writing. An ownership change
may be a taxable event.

Assignment

You can also assign the policy any time during your lifetime. PFL will not be
bound by the assignment until we receive written notice of the assignment. We
will not be liable for any payment or other action we take in accordance with
the policy before we receive notice of the assignment. There may be limitations
on your ability to assign a qualified policy. An assignment may have tax
consequences.

PFL Life Insurance Company

PFL Life Insurance Company was incorporated under the laws of the State of Iowa
on April 19, 1961 as NN Investors Life Insurance Company, Inc. It is engaged in
the sale of life and health insurance and annuity policies. PFL is a
Transamerica Company and a wholly-owned indirect subsidiary of AEGON USA, Inc.
which conducts most of its operations through subsidiary companies engaged in
the insurance business or in providing non-insurance financial services. All of
the stock of AEGON USA, Inc. is indirectly owned by AEGON N.V. of The
Netherlands, the securities of which are publicly traded. AEGON N.V., a holding
company, conducts its business through subsidiary companies engaged primarily
in the insurance business. PFL is licensed in the District of Columbia, Guam,
and in all states except New York.

All obligations arising under the policies, including the promise to make
annuity payments, are general corporate obligations of PFL.

The Separate Account

PFL established a separate account, called the PFL Endeavor VA Separate
Account, under the laws of the State of Iowa on January 19, 1990. The separate
account receives and currently invests the premium payments that are allocated
to it for investment in shares of the underlying mutual fund portfolios.

The separate account is registered with the SEC as a unit investment trust
under the 1940 Act. However, the SEC does not supervise the management, the
investment practices, or the policies of the separate account or PFL. Income,
gains and losses, whether or not realized, from assets allocated to the
separate account are, in accordance with the policies, credited to or charged
against the separate
account without regard to PFL's other income, gains or losses.

The assets of the separate account are held in PFL's name on behalf of the
separate account and belong to PFL. However, those assets that underlie the
policies are not chargeable with liabilities arising out of any other business
PFL may conduct. The separate account includes other subaccounts that are not
available under these policies.

Mixed and Shared Funding

Before making a decision concerning the allocation of premium payments to a
particular subaccount, please read the prospectuses for the underlying funds.
The underlying funds are not limited to selling their shares to this separate
account and can accept investments from any separate account or qualified
retirement plan. Since the portfolios of the underlying funds are available to
registered separate accounts offering variable annuity products of PFL, as well
as variable annuity and variable life products of other insurance companies,
and qualified retirement plans, there is a possibility that a material conflict
may arise between the interests of this separate account and one or more of the
other accounts of another participating insurance company. In the event of a
material conflict, the affected insurance companies, including PFL, agree to
take any necessary steps to resolve the matter. This includes removing their
separate

31
<PAGE>

accounts from the underlying funds. See the underlying funds' prospectuses for
more details.

Reinstatements

You may surrender your policy and transfer your money directly to another life
insurance company (sometimes referred to as a 1035 Exchange or a trustee-to-
trustee transfer). You may also request us to reinstate your policy after such
a transfer by returning the same total dollar amount of funds to the applicable
investment choices. The dollar amount will be used to purchase new accumulation
units at the then current price. Because of changes in market value, your new
accumulation units may be worth more or less than the units you previously
owned. We recommend that you consult a tax professional to explain the possible
tax consequences of exchanges and/or reinstatements.

Voting Rights

PFL will vote all shares of the underlying funds in accordance with
instructions we receive from you and other owners that have voting interests in
the portfolios. We will send you and other owners written requests for
instructions on how to vote those shares. When we receive those instructions,
we will vote all of the shares in proportion to those instructions. If,
however, we determine that we are permitted to vote the shares in our own
right, we may do so.

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

Distributor of the Policies

AFSG Securities Corporation is the principal underwriter of the policies. Like
PFL, it is a Transamerica Company and an indirect wholly owned subsidiary of
AEGON USA, Inc. It is located at 4333 Edgewood Road N.E., Cedar Rapids, IA
52499-0001. AFSG Securities Corporation is registered as a broker/dealer under
the Securities Exchange Act of 1934. It is a member of the National Association
of Securities Dealers, Inc.

Commissions of up to 6.25% of premium payments plus an annual continuing fee
based on policy values will be paid to broker/dealers who sell the policies
under agreements with AFSG Securities Corporation. These commissions are not
deducted from premium payments. In addition, certain production, persistency
and managerial bonuses may be paid. PFL may also pay compensation to financial
institutions for their services in connection with the sale and servicing of
the policies.

Variations in Policy Provisions

Certain provisions of the policies may vary from the descriptions in this
prospectus in order to comply with different state laws. See your policy for
variations since any such state variations will be included in your policy or
in riders or endorsements attached to your policy.

IMSA

PFL is a member of the Insurance Marketplace Standards Association (IMSA). IMSA
is an independent, voluntary organization of life insurance companies. It
promotes high ethical standards in the sales, advertising and servicing of
individual life insurance and annuity products. Companies must undergo a
rigorous self and independent assessment of their practices to become a member
of IMSA. The IMSA logo in our sales literature shows our ongoing commitment to
these standards.

Legal Proceedings

There are no legal proceedings to which the separate account is a party or to
which the assets of the separate account are subject. PFL, like other life
insurance companies, is involved in lawsuits. In some class action and other
lawsuits involving other insurers, substantial damages have been sought and/or
material settlement payments have been made. Although the outcome of any
litigation cannot be predicted with certainty, PFL believes that at the present
time there are no pending or threatened lawsuits that are reasonably likely to
have a material adverse impact on the separate account or PFL.

32
<PAGE>

Financial Statements

The financial statements of PFL and the subaccounts are included in the SAI.
TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION

<TABLE>
<S> <C>
Glossary of Terms
The Policy--General Provisions
Certain Federal Income Tax Consequences
Investment Experience
Family Income Protector--Additional Information
Historical Performance Data
Published Ratings
State Regulation of PFL
Administration
Records and Reports
Distribution of the Policies
Voting Rights
Other Products
Custody of Assets
Legal Matters
Independent Auditors
Other Information
Financial Statements
</TABLE>

33
<PAGE>

APPENDIX A

CONDENSED FINANCIAL INFORMATION

The accumulation unit values and the number of accumulation units outstanding
for each subaccount from the date of inception are shown in the following
tables.

5% Annually Compounding Death Benefit or Double Enhanced Death Benefit*
(Total Separate Account Annual Expenses: 1.55%)

<TABLE>
<CAPTION>
Accumulation Unit Accumulation Unit Number of
Value Value Accumulation
at Beginning of Year at End of Year Units at End of Year
------------------------------------------------------------------------------------
<S> <C> <C> <C>
Capital Guardian U.S.
Equity Subaccount***
1999/(13)/............. $ 1.121334 $ 0.962537 6,044,674
1998/(12)/............. $ 1.000000 $ 1.121334 4,444,952
------------------------------------------------------------------------------------
Dreyfus Small Cap Value
Subaccount
1999................... $ 1.781675 $ 2.270110 8,787,718.359
1998................... $ 1.849564 $ 1.781675 7,236,830.344
1997/(9)/.............. $ 1.635726 $ 1.849564 2,651,783.374
------------------------------------------------------------------------------------
Dreyfus U.S. Government
Securities Subaccount
1999................... $ 1.283673 $ 1.253119 6,668,600.311
1998................... $ 1.213942 $ 1.283673 5,114,379.634
1997/(9)/.............. $ 1.136634 $ 1.213942 858,785.418
------------------------------------------------------------------------------------
Endeavor Asset
Allocation Subaccount
1999................... $ 2.529863 $ 3.148754 10,427,868.661
1998................... $ 2.169995 $ 2.529863 7,169,923.981
1997/(9)/.............. $ 1.998344 $ 2.169995 1,857,541.490
------------------------------------------------------------------------------------
Endeavor Money Market
Subaccount
1999................... $ 1.236621 $ 1.275724 11,328,428.234
1998................... $ 1.185346 $ 1.236621 4,060,082.004
1997/(9)/.............. $ 1.170606 $ 1.185346 1,002,462.071
------------------------------------------------------------------------------------
Endeavor Enhanced Index
Subaccount
1999................... $ 1.574026 $ 1.831468 16,917,672.030
1998................... $ 1.216554 $ 1.574026 7,597,253.113
1997/(9)/.............. $ 1.066111 $ 1.216554 1,987,857.002
------------------------------------------------------------------------------------
Endeavor High Yield
Subaccount
1999................... $ 0.960378 $ 1.000739 3,346,479.952
1998/(11)/............. $ 1.000000 $ 0.960378 1,139,786.018
------------------------------------------------------------------------------------
Endeavor Janus Growth
Subaccount
1999................... $31.822714 $49.862043 2,138,499.285
1998................... $19.647490 $31.822714 1,055,990.702
1997/(9)/.............. $18.030324 $19.647490 331,277.459
------------------------------------------------------------------------------------
Jennison Growth
Subaccount**
1999................... $ 1.197263 $ 1.235481 8,078,978.665
1998................... $ 1.155963 $ 1.197263 7,330,811.955
1997/(9)/.............. $ 1.049539 $ 1.155963 2,879,146.147
------------------------------------------------------------------------------------
Capital Guardian Value
Subaccount**
1999................... $ 2.207647 $ 2.107532 9,518,037.409
1998................... $ 2.086425 $ 2.207657 8,178,731.965
1997/(9)/ $ 1.804168 $ 2.086425 2,607,465.410
</TABLE>

34
<PAGE>

5% Annually Compounding Death Benefit or Double Enhanced Death Benefit*
(Total Separate Account Annual Expenses: 1.55%)
continued . . .

35
<PAGE>

Return of Premium Death Benefit*
(Total Separate Account Annual Expenses: 1.40%)

<TABLE>
<CAPTION>
Accumulation Unit Accumulation Unit Number of
Value Value Accumulation
at Beginning of Year at End of Year Units at End of Year
------------------------------------------------------------------------------------
<S> <C> <C> <C>
Capital Guardian U.S.
Equity Subaccount***
1999/(13)/............. $1.122170 $0.964682 3,560,121
1998/(12)/............. $1.000000 $1.122170 1,697,953
------------------------------------------------------------------------------------
Dreyfus Small Cap Value
Subaccount
1999................... $1.785929 $2.278888 49,653,848.359
1998................... $1.851229 $1.785929 59,347,329.564
1997................... $1.496065 $1.851229 63,123,931.161
1996................... $1.206843 $1.496065 51,124,831.634
1995................... $1.072941 $1.206843 40,635,696.978
1994................... $1.107747 $1.072941 32,607,348.474
1993/(3)/.............. $1.000000 $1.107747 11,449,956.948
------------------------------------------------------------------------------------
Dreyfus U.S. Government
Securities Subaccount
1999................... $1.286733 $1.255919 38,368,703.838
1998................... $1.215033 $1.286733 41,241,127.664
1997................... $1.128769 $1.215033 30,043,275.031
1996................... $1.124292 $1.128769 17,561,825.527
1995................... $0.985803 $1.124292 8,456,764.729
1994/(4)/.............. $0.998670 $0.985803 3,102,671.789
------------------------------------------------------------------------------------
Endeavor Asset
Allocation Subaccount
1999................... $2.535888 $3.160924 100,119,683.393
1998................... $2.171948 $2.535888 116,236,043.595
1997................... $1.833135 $2.171948 127,262,704.167
1996................... $1.577873 $1.833135 124,998,927.667
1995................... $1.301669 $1.577873 122,974,873.030
1994................... $1.393488 $1.301669 130,909,987.116
1993................... $1.209859 $1.393488 69,252,242.665
1992................... $1.125386 $1.209859 11,637,563.615
1991/(1)/.............. $1.000000 $1.125386 3,775,618.731
------------------------------------------------------------------------------------
Endeavor Money Market
Subaccount
1999................... $1.239556 $1.280646 57,250,677.280
1998................... $1.196418 $1.239556 51,024,317.036
1997................... $ 1.15422 $1.196418 28,678,037.042
1996................... $ 1.11571 $ 1.15422 26,461,099.190
1995................... $ 1.07242 $ 1.11571 21,103,926.232
1994................... $ 1.05150 $ 1.07242 17,836,839.874
1993................... $ 1.04313 $ 1.05150 12,190,857.625
1992................... $ 1.02803 $ 1.04313 4,334,947.760
1991/(1)/.............. $ 1.00000 $ 1.02803 1,855,372.177
------------------------------------------------------------------------------------
Endeavor Enhanced Index
Subaccount
1999................... $1.577775 $1.838549 20,376,496.984
1998................... $1.217647 $1.577775 13,701,547.835
1997/(7)/.............. $1.000000 $1.217647 9,296,582.067
------------------------------------------------------------------------------------
Endeavor High Yield
Subaccount
1999................... $0.961203 $1.003083 8,977,276.504
1998/(11)/ ............ $1.000000 $0.961203 6,199,317.634
</TABLE>

36
<PAGE>

Return of Premium Death Benefit*
(Total Separate Account Annual Expenses: 1.40%)
continued . . .

<TABLE>
<CAPTION>
Accumulation Unit Accumulation Unit Number of
Value Value Accumulation
at Beginning of Year at End of Year Units at End of Year
------------------------------------------------------------------------------------
<S> <C> <C> <C>
Endeavor Janus Growth
Subaccount
1999................... $31.898334 $50.054351 13,723,324.372
1998................... $19.665157 $31.898334 15,001,694.599
1997................... $16.964068 $19.665157 16,307,024.863
1996................... $14.583843 $16.964068 15,174,482.394
1995................... $10.051117 $14.583843 13,337,196.679
1994................... $11.114865 $10.051117 12,758,957.591
1993................... $10.839753 $11.114865 9,252,403.800
1992/(8)/.............. $10.000000 $10.839753 1,119,066.376
------------------------------------------------------------------------------------
Jennison Growth
Subaccount**
1999................... $ 1.200101 $ 1.240246 16,283,827.424
1998................... $ 1.156993 $ 1.200101 18,189,950.241
1997................... $ 1.004355 $ 1.156993 14,927,829.243
1996/(6)/.............. $ 1.000000 $ 1.004355 314,119.406
------------------------------------------------------------------------------------
Capital Guardian Value
Subaccount**
1999................... $ 2.212928 $ 2.115695 66,030,029.169
1998................... $ 2.086130 $ 2.212928 78,666,773.562
1997................... $ 1.694854 $ 2.086130 82,171,833.799
1996................... $ 1.387903 $ 1.694854 65,227,195.342
1995................... $ 1.045610 $ 1.387903 46,194,663.692
1994................... $ 1.018576 $ 1.045610 30,512,231.489
1993/(2)/.............. $ 1.000000 $ 1.018576 10,958,836.984
------------------------------------------------------------------------------------
Capital Guardian Global
Subaccount**
1999................... $ 1.052609 $ 1.534754 8,189,238.812
1998/(10)/............. $ 1.000000 $ 1.052609 7,340,386.987
------------------------------------------------------------------------------------
T. Rowe Price Equity
Income Subaccount
1999................... $ 2.065623 $ 2.107761 74,445,822.349
1998................... $ 1.925022 $ 2.065623 83,821,265.291
1997................... $ 1.521680 $ 1.925022 79,662,847.306
1996................... $ 1.287240 $ 1.521680 42,673,040.677
1995/(5)/.............. $ 1.000000 $ 1.287240 14,943,358.393
------------------------------------------------------------------------------------
T. Rowe Price Growth
Stock Subaccount
1999................... $ 2.593121 $ 3.124914 42,063,488.642
1998................... $ 2.043487 $ 2.593121 45,596,534.725
1997................... $ 1.611613 $ 2.043487 44,624,829.320
1996................... $ 1.353339 $ 1.611613 30,237,847.748
1995/(5)/.............. $ 1.000000 $ 1.353339 14,196,707.745
------------------------------------------------------------------------------------
T. Rowe Price
International Stock
Subaccount
1999................... $ 1.533035 $ 2.001071 77,283,279.960
1998................... $ 1.346560 $ 1.533035 90,839,071.438
1997................... $ 1.330640 $ 1.346560 101,220,764.948
1996................... $ 1.171039 $ 1.330640 91,462,303.686
1995................... $ 1.073958 $ 1.171039 75,065,177.549
1994................... $ 1.156482 $ 1.073958 76,518,044.179
1993................... $ 0.989782 $ 1.156482 45,569,234.403
1992................... $ 1.041235 $ 0.989782 6,368,485.858
1991/(1)/.............. $ 1.000000 $ 1.041235 3,068,279.081
</TABLE>

37
<PAGE>

/(1)/ Period from April 8, 1991 through December 31, 1991.
/(2)/ Period from May 27, 1993 through December 31, 1993.
/(3)/ Period from May 4, 1993 through December 31, 1993.
/(4)/ Period from May 9, 1994 through December 31, 1994.
/(5)/ Period from January 3, 1995 through December 31, 1995.
/(6)/ Period from November 18, 1996, through December 31, 1996.
/(7)/ Period from May 1, 1997 through December 31, 1997.
/(8)/ Period from July 1, 1992 through December 31, 1992.
/(9)/ Period from May 23, 1997 through December 31, 1997.
/(10)/ Period from February 2, 1998 through December 31, 1998.
/(11)/ Period from June 2, 1998 through December 31, 1998.
/(12)/ Period from July 1, 1998 through December 31, 1998.
/(13)/ Period from January 1, 1999 through December 31, 1999.

* As of May 1, 2000 the death benefits available under this policy have been
changed to (1) 5% Annually Compounding Death Benefit, (2) Greater of 5%
Annually Compounding through age 80 Death Benefit or Annual Step-Up through
age 80 Death Benefit, (3) Monthly Step-Up Death Benefit, and (4) Return of
Premium. However, the corresponding unit values for each death benefit did
not change.
** Prior to October 9, 2000, the Capital Guardian Global Subaccount was called
the Endeavor Select Subaccount; the Capital Guardian Value Subaccount was
called the Endeavor Value Equity Subaccount; and the Jennison Growth
Subaccount was called the Endeavor Opportunity Value Subaccount. Their names
were changed at that time to reflect changes in the underlying portfolios'
advisors and investment policies. The unit values shown reflect the
portfolios' performance before those changes.
*** For periods prior to October 9, 2000, the unit values shown reflect
performance for the target account.

The Transamerica VIF Growth Subaccount, Janus Aspen--Aggressive Growth
Subaccount--Service Shares, Janus Aspen--Strategic Value Subaccount--Service
Shares, Janus Aspen--Worldwide Growth Subaccount--Service Shares, Fidelity--VIP
Equity-Income Subaccount, Fidelity--VIP II Contrafund(R) Subaccount, Fidelity--
VIP III Growth Opportunities Subaccount, Fidelity--VIP III Mid Cap Subaccount,
WRL Alger Aggressive Growth Subaccount, WRL Gabelli Global Growth Subaccount,
WRL Goldman Sachs Growth Subaccount, WRL Great Companies--Global/2/ Subaccount,
WRL Janus Global Subaccount, WRL NWQ Value Equity Subaccount, WRL Pilgrim
Baxter Mid Cap Growth Subaccount , WRL Salomon All Cap Subaccount, WRL T. Rowe
Price Dividend Growth Subaccount and WRL T. Rowe Price Small Cap Subaccount had
not commenced operations as of December 31, 1999, therefore, comparable data is
not available.

38
<PAGE>

APPENDIX B

HISTORICAL PERFORMANCE DATA

Standard Performance Data

PFL may advertise historical yields and total returns for the subaccounts of
the separate account. In addition, PFL may advertise the effective yield of the
subaccount investing in the Endeavor Money Market Portfolio (the "Endeavor
Money Market Subaccount"). These figures are calculated according to
standardized methods prescribed by the SEC. They are based on historical
earnings and are not intended to indicate future performance.

Endeavor Money Market Subaccount. The yield of the Endeavor Money Market
--------------------------------
Subaccount for a policy refers to the annualized income generated by an
investment under a policy in the subaccount over a specified seven-day period.
The yield is calculated by assuming that the income generated for that seven-
day period is generated each seven-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 under a
policy in the subaccount is assumed to be reinvested. The effective yield will
be slightly higher than the yield because of the compounding effect of this
assumed reinvestment.

Other Subaccounts. The yield of a subaccount (other than the Endeavor Money
-----------------
Market Subaccount) for a policy refers to the annualized income generated by an
investment under a policy in the subaccount over a specified thirty-day period.
The yield is calculated by assuming that the income generated by the investment
during that thirty-day period is generated each thirty-day period over a 12-
month period and is shown as a percentage of the investment.

The total return of a subaccount refers to return quotations assuming an
investment under a policy has been held in the subaccount for various periods
of time including a period measured from the date the subaccount commenced
operations. When a subaccount has been in operation for one, five, and ten
years, respectively, the total return for these periods will be provided. The
total return quotations for a subaccount will represent the average annual
compounded rates of return that equate an initial investment of $1,000 in the
subaccount to the redemption value of that investment as of the last day of
each of the periods for which total return quotations are provided.

The yield and total return calculations for a subaccount do not reflect the
effect of any premium taxes that may be applicable to a particular policy and
they do not reflect the rider charge for the optional family income protector.
To the extent that any or all of a premium tax is applicable to a particular
policy, the yield and/or total return of that policy will be reduced. For
additional information regarding yields and total returns calculated using the
standard formats briefly summarized above, please refer to the SAI, a copy of
which may be obtained from the administrative and service office upon request.

Based on the method of calculation described in the SAI, the average annual
total returns for periods from inception of the subaccounts to December 31,
1999, and for the one and five year periods ended December 31, 1999 are shown
in Table 1 below. Total returns shown reflect deductions for the mortality and
expense risk fee and the administrative charges. Performance figures may
reflect the 1.40% mortality and expense risk fee for the 5% Annually
Compounding Death Benefit and the Greater of 5% Annually Compounding through
age 80 Death Benefit or Annual Step-Up through age 80 Death Benefit, and the
Monthly Step-Up through age 80 Death Benefit, or the 1.25% mortality and
expense risk fee for the Return of Premium Death Benefit. Standard total return
calculations will reflect the effect of surrender charges that may be
applicable to a particular period.

39
<PAGE>

TABLE 1--A
Standard Average Annual Total Returns
(Assuming A Surrender Charge and No Family Income Protector)
--------------------------------------------------------------------------------
5% Annually Compounding Death Benefit or Double Enhanced Death Benefit *
(Total Separate Account Annual Expenses: 1.55%)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Inception
1 Year 5 Year of the
Ended Ended Subaccount Subaccount
Subaccount 12/31/99 12/31/99 to 12/31/99 Inception Date
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Capital Guardian Global/(1)/.. 40.42% N/A 22.73% February 2, 1998
Capital Guardian U.S.
Equity/(2)/.................. N/A N/A N/A October 9, 2000
Capital Guardian Value/(1)/... (10.00%) 14.76% 11.78% May 27, 1993
Dreyfus Small Cap Value/(3)/.. 22.14% 15.88% 12.90% May 4, 1993
Dreyfus U.S. Government
Securities................... (7.83%) 4.51% 3.72% May 9, 1994
Endeavor Asset Allocation..... 19.17% 19.05% 13.88% April 8, 1991
Endeavor Enhanced Index....... 11.02% N/A 24.36% May 1, 1997
Endeavor High Yield........... (1.21%) N/A (3.44%) June 2, 1998
Endeavor Janus Growth/(4)/.... 51.59% 37.56% 23.72% July 1, 1992
Jennison Growth/(1)/.......... (2.23%) N/A 5.97% November 18, 1996
T. Rowe Price Equity Income... (3.54%) N/A 15.63% January 3, 1995
T. Rowe Price Growth Stock.... 15.01% N/A 25.24% January 3, 1995
T. Rowe Price International
Stock(/5/)................... 25.08% 12.85% 8.06% April 8, 1991
Janus Aspen--Aggressive
Growth--Service Shares/(6)/.. N/A N/A N/A N/A
Janus Aspen--Strategic Value--
Service Shares/(6)/.......... N/A N/A N/A N/A
Janus Aspen--Worldwide
Growth--Service Shares/(6)/.. N/A N/A N/A N/A
Transamerica VIF Growth/(6)/.. N/A N/A N/A May 1, 2000
Fidelity--VIP Equity-Income--
Service Class 2/(6)/......... N/A N/A N/A May 1, 2000
Fidelity--VIP II
Contrafund(R)--Service Class
2/(6)/....................... N/A N/A N/A May 1, 2000
Fidelity--VIP III Growth
Opportunities--Service Class
2/(6)/....................... N/A N/A N/A May 1, 2000
Fidelity--VIP III Mid Cap--
Service Class 2/(6)/......... N/A N/A N/A May 1, 2000
WRL Alger Aggressive
Growth/(6)/.................. N/A N/A N/A May 1, 2000
WRL Gabelli Global
Growth/(6)/.................. N/A N/A N/A N/A
WRL Goldman Sachs
Growth(/6/).................. N/A N/A N/A May 1, 2000
WRL Great Companies--Global/2/
/(6)/........................ N/A N/A N/A N/A
WRL Janus Global/(6)//(7)/.... N/A N/A N/A May 1, 2000
WRL NWQ Value Equity/(6)/..... N/A N/A N/A May 1, 2000
WRL Pilgrim Baxter Mid Cap
Growth/(6)/.................. N/A N/A N/A May 1, 2000
WRL Salomon All Cap/(6)/...... N/A N/A N/A May 1, 2000
WRL T. Rowe Price Dividend
Growth/(6)/.................. N/A N/A N/A May 1, 2000
WRL T. Rowe Price Small
Cap/(6)/..................... N/A N/A N/A May 1, 2000
</TABLE>

40
<PAGE>

TABLE 1 - B
Standard Average Annual Total Returns
(Assuming A Surrender Charge and No Family Income Protector)
--------------------------------------------------------------------------------
Return of Premium Death Benefit*
(Total Separate Account Annual Expenses: 1.40%)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 Year 5 Year Inception of the Subaccount
Ended Ended Subaccount to Inception
Subaccount 12/31/99 12/31/99 12/31/99 Date
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Capital Guardian
Global/(1)/............. 40.64% N/A 22.92% February 2, 1998
Capital Guardian U.S.
Equity/(2)/............. N/A N/A N/A October 9, 2000
Capital Guardian
Value/(1)/.............. <9.86%> 14.92% 11.92% May 27, 1993
Dreyfus Small Cap
Value/(3)/.............. 22.33% 16.05% 13.06% May 4, 1993
Dreyfus U.S. Government
Securities.............. <7.85%> 4.64% 3.84% May 9, 1994
Endeavor Asset
Allocation.............. 19.36% 19.23% 14.04% April 8, 1991
Endeavor Enhanced Index.. 11.19% N/A 24.54% May 1, 1997
Endeavor High Yield...... <1.05%> N/A <3.29%> June 2, 1998
Endeavor Janus
Growth/(4)/............. 51.82% 37.77% 23.90% July 1, 1992
Jennison Growth/(1)/..... <2.07%> N/A 6.13% November 18, 1996
T. Rowe Price Equity
Income.................. <3.39%> N/A 15.80% January 3, 1995
T. Rowe Price Growth
Stock................... 15.19% N/A 25.42% January 3, 1995
T. Rowe Price
International
Stock/(5)/.............. 25.28% 13.02% 8.23% April 8, 1991
Janus Aspen - Aggressive
Growth - Service
Shares/(6)/............. N/A N/A N/A N/A
Janus Aspen - Strategic
Value - Service
Shares/(6)/............. N/A N/A N/A N/A
Janus Aspen - Worldwide
Growth - Service
Shares/(6)/............. N/A N/A N/A N/A
Transamerica VIF
Growth/(6)/............. N/A N/A N/A May 1, 2000
Fidelity - VIP Equity-
Income - Service Class
2/(6)/.................. N/A N/A N/A May 1, 2000
Fidelity - VIP II
Contrafund(R) - Service
Class 2/(6)/............ N/A N/A N/A May 1, 2000
Fidelity - VIP III Growth
Opportunities - Service
Class 2/(6)/............ N/A N/A N/A May 1, 2000
Fidelity - VIP III Mid
Cap - Service Class
2/(6)/.................. N/A N/A N/A May 1, 2000
WRL Alger Aggressive
Growth/(6)/............. N/A N/A N/A May 1, 2000
WRL Gabelli Global
Growth/(6)/............. N/A N/A N/A N/A
WRL Goldman Sachs
Growth/(6)/............. N/A N/A N/A May 1, 2000
WRL Great Companies -
Global/2/ /(6)/........ N/A N/A N/A N/A
WRL Janus
Global/(6)//(7)/........ N/A N/A N/A May 1, 2000
WRL NWQ Value
Equity/(6)/............. N/A N/A N/A May 1, 2000
WRL Pilgrim Baxter Mid
Cap Growth/(6)/......... N/A N/A N/A May 1, 2000
WRL Salomon All
Cap/(6)/................ N/A N/A N/A May 1, 2000
WRL T. Rowe Price
Dividend Growth/(6)/.... N/A N/A N/A May 1, 2000
WRL T. Rowe Price Small
Cap/(6)/................ N/A N/A N/A May 1, 2000
</TABLE>

/(1)/ Prior to October 9, 2000, the Capital Guardian Global Subaccount was
called the Endeavor Select Subaccount; the Capital Guardian Value
Subaccount was called the Endeavor Value Equity Subaccount; and the
Jennison Growth Subaccount was called the Endeavor Opportunity Value
Subaccount. Their names were changed at that time to reflect changes in
the underlying portfolios' advisors and investment policies. The
performance figures shown reflect the portfolios' performance before
those changes.
/(2)/ Effective October 9, 2000, shares of each series of the target account
were liquidated and the proceeds were used to purchase shares of the
Capital Guardian U.S. Equity Portfolio. This was a fundamental change in
the structure of the target account from an actively managed account to a
passive unit investment trust. In addition, Capital Guardian U.S. Equity
has a different subadviser and fundamentally different investment
policies. Therefore, no performance history is given for periods prior to
October 9, 2000 because such history is not relevant or applicable to the
Capital Guardian U.S. Equity Subaccount. See the SAI for performance
information for the target account prior to October 9, 2000.
/(3)/ Effective September 16, 1996, The Dreyfus Corporation became the adviser
to the Dreyfus Small Cap Value Portfolio, formerly known as Quest for
Value Small Cap Portfolio. The Portfolio was previously advised by OpCap
Advisors.

41
<PAGE>

/(4)/ Effective April 30, 1999, shares of the WRL Janus Growth Portfolio were
removed and replaced with shares of the Endeavor Janus Growth Portfolio.
The Endeavor Janus Growth Portfolio has the same investment objectives,
the same investment adviser (Janus Capital Corporation) and the same
advisory fees as the WRL Janus Growth Portfolio. Performance prior to May
1, 1999 reflects performance of the annuity subaccount while it was
invested in the WRL Janus Growth Portfolio.
/(5)/ Effective January 1, 1995, Rowe-Price Fleming International, Inc. became
the adviser to the T. Rowe Price International Stock Portfolio. The
Portfolio's name was changed from the Global Growth Portfolio and the
Portfolio's shareholders approved a change in investment objective from
investments in small capitalization companies on a global basis to
investments in a broad range of companies on an international basis
(i.e., non- U.S. companies). Effective August 8, 2000, T. Rowe Price
International, Inc. became the adviser to the Portfolio.
/(6)/ The Janus Aspen--Aggressive Growth Subaccount--Service Shares, Janus
Aspen--Strategic Value Subaccount--Service Shares, Janus Aspen--Worldwide
Growth Subaccount--Service Shares, Transamerica VIF Growth Subaccount,
Fidelity--VIP Equity-Income Subaccount, Fidelity--VIP II Contrafund(R)
Subaccount, Fidelity--VIP III Growth Opportunities Subaccount, Fidelity--
VIP III Mid Cap Subaccount, WRL Alger Aggressive Growth Subaccount, WRL
Gabelli Global Growth Subaccount, WRL Goldman Sachs Growth Subaccount,
WRL Great Companies--Global/2/ Subaccount, WRL Janus Global Subaccount,
WRL NWQ Value Equity Subaccount, WRL Pilgrim Baxter Mid Cap Growth
Subaccount, WRL Salomon All Cap Subaccount, WRL T. Rowe Price Dividend
Growth Subaccount, and WRL T. Rowe Price Small Cap Subaccount had not
commenced operations as of December 31, 1999, therefore, comparable
information is not available.
/(7)/ The WRL Janus Global Subaccount is only available to owners that held an
investment in this subaccount on September 1, 2000. However, if you
withdraw all your money from this subaccount after September 1, 2000, you
may not reinvest your money in this subaccount.
* As of May 1, 2000 the death benefits available under this policy have
been changed to (1) 5% Annually Compounding Death Benefit, (2) Greater of
5% Annually Compounding through age 80 Death Benefit or Annual Step-Up
through age 80 Death Benefit, (3) Monthly Step-Up Death Benefit, and (4)
Return of Premium. However, the total separate account annual expenses
for each death benefit did not change.

The figures in the above tables may reflect waiver of advisory fees and
reimbursement of other expenses. In the absence of such waivers, the average
annual total return figures above would have been lower. (See the Fee Table.)

Non-Standard Performance Data

In addition to the standard data discussed above, similar performance data for
other periods may also be shown.

PFL may also advertise or disclose average annual total return or other
performance data in non-standard formats for a subaccount of the separate
account. The non-standard performance data may assume that no surrender charge
is applicable, and may also make other assumptions such as the amount invested
in a subaccount, differences in time periods to be shown, or the effect of
partial withdrawals or annuity payments.

All non-standard performance data will be advertised only if the standard
performance data is also disclosed. For additional information regarding the
calculation of other performance data, please refer to the SAI.

The non-standard average annual total return figures shown in Table 2 are based
on the assumption that the policy is not surrendered, and therefore the
surrender charge is not imposed. Also, Table 2 does not reflect the rider
charge for the optional family income protector.

42
<PAGE>

TABLE 2--A
Non-Standardized Average Annual Total Returns
(Assuming No Surrender Charge or Family Income Protector)
--------------------------------------------------------------------------------
5% Annually Compounding Death Benefit or Double Enhanced Death Benefit*
(Total Separate Account Annual Expenses: 1.55%)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Inception
1 Year 5 Year of the Subaccount
Ended Ended Subaccount Inception
Subaccount 12/31/99 12/31/99 to 12/31/99 Date
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Capital Guardian Global/(1)/.. 45.59% N/A 24.96% February 2, 1998
Capital Guardian U.S.
Equity/(2)/.................. N/A N/A N/A October 9, 2000
Capital Guardian Value/(1)/... (4.54%) 14.99% 11.88% May 27, 1993
Dreyfus Small Cap Value/(3)/.. 27.41% 16.09% 12.99% May 4, 1993
Dreyfus U.S. Government
Securities................... (2.38%) 4.84% 4.01% May 9, 1994
Endeavor Asset Allocation..... 24.46% 19.24% 13.91% April 8, 1991
Endeavor Enhanced Index....... 16.36% N/A 25.45% May 1, 1997
Endeavor High Yield........... 4.20% N/A 0.05% June 2, 1998
Endeavor Janus Growth/(4)/.... 56.69% 37.66% 23.76% July 1, 1992
Jennison Growth/(1)/.......... 3.19% N/A 6.99% November 18, 1996
T. Rowe Price Equity Income... 1.89% N/A 15.94% January 3, 1995
T. Rowe Price Growth Stock.... 20.33% N/A 25.45% January 3, 1995
T. Rowe Price International
Stock/(5)/................... 30.34% 13.09% 8.10% April 8, 1991
Janus Aspen - Aggressive
Growth - Service
Shares/(6)/.................. N/A N/A N/A N/A
Janus Aspen - Strategic
Value - Service Shares/(6)/.. N/A N/A N/A N/A
Janus Aspen - Worldwide
Growth - Service
Shares/(6)/.................. N/A N/A N/A N/A
Transamerica VIF Growth/(6)/.. N/A N/A N/A May 1, 2000
Fidelity - VIP Equity-Income -
Service Class 2/(6)/........ N/A N/A N/A May 1, 2000
Fidelity - VIP II
Contrafund(R) - Service Class
2/(6)/....................... N/A N/A N/A May 1, 2000
Fidelity - VIP III Growth
Opportunities
- Service Class 2/(6)/....... N/A N/A N/A May 1, 2000
Fidelity - VIP III Mid Cap -
Service Class 2/(6)/........ N/A N/A N/A May 1, 2000
WRL Alger Aggressive
Growth/(6)/.................. N/A N/A N/A May 1, 2000
WRL Gabelli Global
Growth/(6)/.................. N/A N/A N/A N/A
WRL Goldman Sachs
Growth/(6)/.................. N/A N/A N/A May 1, 2000
WRL Great Companies -
Global/2//(6)/.............. N/A N/A N/A N/A
WRL Janus Global/(6)//(7)/.... N/A N/A N/A May 1, 2000
WRL NWQ Value Equity/(6)/..... N/A N/A N/A May 1, 2000
WRL Pilgrim Baxter Mid Cap
Growth/(6)/.................. N/A N/A N/A May 1, 2000
WRL Salomon All Cap/(6)/...... N/A N/A N/A May 1, 2000
WRL T. Rowe Price Dividend
Growth/(6)/.................. N/A N/A N/A May 1, 2000
WRL T. Rowe Price Small
Cap/(6)/..................... N/A N/A N/A May 1, 2000
</TABLE>
--------------------------------------------------------------------------------

43
<PAGE>

TABLE 2 - B
Non-Standardized Average Annual Total Returns
(Assuming No Surrender Charge or Family Income Protector)
--------------------------------------------------------------------------------
Return of Premium Death Benefit*
(Total Separate Account Annual Expenses: 1.40%)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 Year 5 Year Inception of the Subaccount
Ended Ended Subaccount to Inception
Subaccount 12/31/99 12/31/99 12/31/99 Date
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Capital Guardian
Global/(1)/............. 45.80% N/A 25.15% February 2, 1998
Capital Guardian U.S.
Equity/(2)/............. N/A N/A N/A October 9, 2000
Capital Guardian
Value/(1)/.............. (4.39%) 15.14% 12.02% May 27, 1993
Dreyfus Small Cap
Value/(3)/.............. 27.60% 16.26% 13.16% May 4, 1993
Dreyfus U.S. Government
Securities.............. (2.39%) 4.96% 4.14% May 9, 1994
Endeavor Asset
Allocation.............. 24.65% 19.42% 14.08% April 8, 1991
Endeavor Enhanced Index.. 16.53% N/A 25.63% May 1, 1997
Endeavor High Yield...... 4.36% N/A 0.19% June 2, 1998
Endeavor Janus
Growth/(4)/............. 56.92% 37.86% 23.94% July 1, 1992
Jennison Growth/(1)/..... 3.35% N/A 7.15% November 18, 1996
T. Rowe Price Equity
Income.................. 2.04% N/A 16.10% January 3, 1995
T. Rowe Price Growth
Stock................... 20.51% N/A 25.63% January 3, 1995
T. Rowe Price
International
Stock/(5)/.............. 30.53% 13.25% 8.26% April 8, 1991
Janus Aspen - Aggressive
Growth - Service
Shares/(6)/............. N/A N/A N/A N/A
Janus Aspen - Strategic
Value - Service
Shares/(6)/............. N/A N/A N/A N/A
Janus Aspen - Worldwide
Growth - Service
Shares/(6)/............. N/A N/A N/A N/A
Transamerica VIF
Growth/(6)/............. N/A N/A N/A May 1, 2000
Fidelity - VIP Equity-
Income - Service Class
2/(6)/.................. N/A N/A N/A May 1, 2000
Fidelity - VIP II
Contrafund(R) - Service
Class 2/(6)/............ N/A N/A N/A May 1, 2000
Fidelity - VIP III Growth
Opportunities - Service
Class 2/(6)/............ N/A N/A N/A May 1, 2000
Fidelity - VIP III Mid
Cap - Service Class
2/(6)/.................. N/A N/A N/A May 1, 2000
WRL Alger Aggressive
Growth/(6)/............. N/A N/A N/A May 1, 2000
WRL Gabelli Global
Growth/(6)/............. N/A N/A N/A N/A
WRL Goldman Sachs
Growth/(6)/............. N/A N/A N/A May 1, 2000
WRL Great Companies -
Global/2/ /(6)/........ N/A N/A N/A N/A
WRL Janus
Global/(6)//(7)/........ N/A N/A N/A May 1, 2000
WRL NWQ Value
Equity/(6)/............. N/A N/A N/A May 1, 2000
WRL Pilgrim Baxter Mid
Cap Growth/(6)/......... N/A N/A N/A May 1, 2000
WRL Salomon All
Cap/(6)/................ N/A N/A N/A May 1, 2000
WRL T. Rowe Price
Dividend Growth/(6)/.... N/A N/A N/A May 1, 2000
WRL T. Rowe Price Small
Cap/(6)/................ N/A N/A N/A May 1, 2000
</TABLE>

/(1)/Prior to October 9, 2000, the Capital Guardian Global Subaccount was
called the Endeavor Select Subaccount; the Capital Guardian Value
Subaccount was called the Endeavor Value Equity Subaccount; and the
Jennison Growth Subaccount was called the Endeavor Opportunity Value
Subaccount. Their names were changed at that time to reflect changes in
the underlying portfolios' advisors and investment policies. The
performance figures shown reflect the portfolios' performance before those
changes.
/(2)/Effective October 9, 2000, shares of each series of the target account
were liquidated and the proceeds were used to purchase shares of the
Capital Guardian U.S. Equity Portfolio. This was a fundamental change in
the structure of the target account from an actively managed account to a
passive unit investment trust. In addition, Capital Guardian U.S. Equity
has a different subadviser and fundamentally different investment
policies. Therefore, no performance history is given for periods prior to
October 9, 2000 because such history is not relevant or applicable to the
Capital Guardian U.S. Equity Subaccount. See the SAI for performance
information for the target account prior to October 9, 2000.
/(3)/Effective September 16, 1996, The Dreyfus Corporation became the adviser
to the Dreyfus Small Cap Value Portfolio, formerly known as Quest for
Value Small Cap Portfolio. The Portfolio was previously advised by OpCap
Advisors.
/(4)/Effective April 30, 1999, shares of the WRL Janus Growth Portfolio were
removed and replaced with shares of the Endeavor Janus Growth Portfolio.
The Endeavor Janus Growth Portfolio has the same investment objectives,
the same investment adviser (Janus Capital Corporation) and the same
advisory fees as the WRL Janus Growth

44
<PAGE>

Portfolio. Performance prior to May 1, 1999 reflects performance of the
annuity subaccount while it was invested in the WRL Janus Growth Portfolio.
/(5)/Effective January 1, 1995, Rowe-Price Fleming International, Inc. became
the Adviser to the T. Rowe Price International Stock Portfolio. The
Portfolio's name was changed from the Global Growth Portfolio and the
Portfolio's shareholders approved a change in investment objective from
investments in small capitalization companies on a global basis to
investments in a broad range of companies on an international basis (i.e.,
non-U.S. companies). Effective August 8, 2000, T. Rowe Price
International, Inc. became the adviser to the Portfolio.
/(6)/The Janus Aspen--Aggressive Growth Subaccount--Service Shares, Janus
Aspen--Strategic Value Subaccount--Service Shares, Janus Aspen--Worldwide
Growth Subaccount--Service Shares, Transamerica VIF Growth Subaccount,
Fidelity--VIP Equity-Income Subaccount, Fidelity--VIP II Contrafund(R)
Subaccount, Fidelity--VIP III Growth Opportunities Subaccount, Fidelity--
VIP III Mid Cap Subaccount, WRL Alger Aggressive Growth Subaccount, WRL
Gabelli Global Growth Subaccount, WRL Goldman Sachs Growth Subaccount, WRL
Great Companies--Global/2/ Subaccount, WRL Janus Global Subaccount, WRL
NWQ Value Equity Subaccount, WRL Pilgrim Baxter Mid Cap Growth Subaccount,
WRL Salomon All Cap Subaccount, WRL T. Rowe Price Dividend Growth
Subaccount, and WRL T. Rowe Price Small Cap Subaccount had not commenced
operations as of December 31, 1999, therefore, comparable information is
not available.
/(7)/The WRL Janus Global Subaccount is only available to owners that held an
investment in this subaccount on September 1, 2000. However, if you
withdraw all your money from this subaccount after September 1, 2000, you
may not reinvest your money in this subaccount.

Adjusted Historical Performance Data of the Portfolios. The following
performance data for the periods prior to the date the subaccount commenced
operations is based on the performance of the corresponding portfolio and the
assumption that the applicable subaccount was in existence for the same period
as the corresponding portfolio with a level of charges equal to those currently
assessed against the subaccount or against owner's policy values.

In addition, PFL may present historic performance data for the portfolios since
their inception reduced by some or all the fees and charges under the policy.
Such adjusted historic performance includes data that precedes the inception
dates on the subaccounts. This data is designed to show the performance that
would have resulted if the policy had been in existence during that time.

For instance, as shown in Table 3 below, PFL may disclose average annual total
returns for the portfolios reduced by all fees and charges under the policy, as
if the policy had been in existence. Such fees and charges include the
mortality and expense risk fee and the administrative charge.

45
<PAGE>

TABLE 3--A
Adjusted Historical Average Annual Total Returns/(1)/
(Assuming No Surrender Charge or Family Income Protector)
--------------------------------------------------------------------------------
5% Annually Compounding Death Benefit or Double Enhanced Death Benefit*
(Total Separate Account Annual Expenses: 1.55%)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Corresponding
10 Year Portfolio
Portfolio 1 Year 5 Year or Inception Inception Date
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Capital Guardian Global......... 45.59% N/A 24.96% February 3, 1998
Capital Guardian U.S. Equity.... N/A N/A N/A October 9, 2000
Capital Guardian Value.......... (4.54%) 14.99% 11.88% May 27, 1993
Dreyfus Small Cap Value/(2)/.... 27.41% 16.09% 12.99% May 4, 1993
Dreyfus U.S. Government
Securities..................... (2.38%) 4.84% 4.01% May 13, 1994
Endeavor Asset Allocation....... 24.46% 19.24% 13.91% April 8, 1991
Endeavor Enhanced Index......... 16.36% N/A 25.45% May 1, 1997
Endeavor High Yield............. 4.20% N/A 0.05% June 1, 1998
Endeavor Janus Growth........... N/A N/A 35.08% May 1, 1999
Jennison Growth................. 3.19% N/A 6.99% November 18, 1996
T. Rowe Price Equity Income..... 1.89% N/A 15.94% January 3, 1995
T. Rowe Price Growth Stock...... 20.33% N/A 25.45% January 3, 1995
T. Rowe Price International
Stock/(3)/..................... 30.34% 13.09% 8.10% April 8, 1991
Janus Aspen - Aggressive
Growth - Service Shares........ N/A N/A N/A December 31, 1999
Janus Aspen - Strategic Value -
Service Shares................ N/A N/A N/A December 31, 1999
Janus Aspen - Worldwide Growth -
Service Shares................ N/A N/A N/A December 31, 1999
Transamerica VIF Growth/(4)/.... 35.72% 45.88% 27.77%+ February 26, 1969
Fidelity - VIP Equity-Income -
Service Class 2/(5)/.......... 4.63% 16.76% 12.72%+ October 9, 1986
Fidelity - VIP II
Contrafund(R) - Service Class
2/(5)/......................... 22.27% N/A 25.76% January 3, 1995
Fidelity - VIP III Growth
Opportunities -Service Class
2/(5)/......................... 2.58% N/A 19.66% January 3, 1995
Fidelity - VIP III Mid Cap -
Service Class 2/(5)/.......... 46.72% N/A 50.74% December 28, 1998
WRL Alger Aggressive Growth..... 66.50% 34.56% 28.38% March 1, 1994
WRL Gabelli Global Growth....... N/A N/A N/A September 1, 2000
WRL Goldman Sachs Growth........ N/A N/A 16.62% May 3, 1999
WRL Great Companies -
Global/(2)/................... N/A N/A N/A September 1, 2000
WRL Janus Global................ 68.58% 30.94% 25.98% December 3, 1992
WRL NWQ Value Equity............ 6.29% N/A 9.07% May 1, 1996
WRL Pilgrim Baxter Mid Cap
Growth......................... N/A N/A 76.30% May 3, 1999
WRL Salomon All Cap............. N/A N/A 14.41% May 3, 1999
WRL T. Rowe Price Dividend
Growth......................... N/A N/A (8.36%) May 3, 1999
WRL T. Rowe Price Small Cap..... N/A N/A 37.13% May 3, 1999
-------------------------------------------------------------------------------
+ Ten Year Date
</TABLE>

46
<PAGE>

TABLE 3 - B
Adjusted Historical Average Annual Total Returns/(1)/
(Assuming No Surrender Charge or Family Income Protector)
--------------------------------------------------------------------------------
Return of Premium Death Benefit *
(Total Separate Account Annual Expenses: 1.40%)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Corresponding
10 Year Portfolio
Portfolio 1 Year 5 Year or Inception Inception Date
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Capital Guardian Global......... 45.80% N/A 25.15% February 3, 1998
Capital Guardian U.S. Equity.... N/A N/A N/A October 9, 2000
Capital Guardian Value.......... (4.39%) 15.14% 12.02% May 27, 1993
Dreyfus Small Cap Value/(2)/.... 27.60% 16.26% 13.16% May 4, 1993
Dreyfus U.S. Government
Securities..................... (2.39%) 4.96% 4.14% May 13, 1994
Endeavor Asset Allocation....... 24.65% 19.42% 14.08% April 8, 1991
Endeavor Enhanced Index......... 16.53% N/A 25.63% May 1, 1997
Endeavor High Yield............. 4.36% N/A 0.19% June 1, 1998
Endeavor Janus Growth........... N/A N/A 35.21% May 1, 1999
Jennison Growth................. 3.35% N/A 7.15% November 18, 1996
T. Rowe Price Equity Income..... 2.04% N/A 16.10% January 3, 1995
T. Rowe Price Growth Stock...... 20.51% N/A 25.63% January 3, 1995
T. Rowe Price International
Stock/(3)/..................... 30.53% 13.25% 8.26% April 8, 1991
Janus Aspen - Aggressive
Growth - Service Shares........ N/A N/A N/A December 31, 1999
Janus Aspen - Strategic Value -
Service Shares................ N/A N/A N/A December 31, 1999
Janus Aspen - Worldwide Growth -
Service Shares................ N/A N/A N/A December 31, 1999
Transamerica VIF Growth/(4)/.... 35.92% 39.58% 25.07%+ February 26, 1969
Fidelity - VIP Equity-Income -
Service Class 2/(5)/.......... 4.78% 16.94% 12.89%+ October 9, 1986
Fidelity - VIP II
Contrafund(R) - Service Class
2/(5)/......................... 22.45% N/A 25.95% January 3, 1995
Fidelity - VIP III Growth
Opportunities - Service Class
2/(5)/......................... 2.74% N/A 19.83% January 3, 1995
Fidelity - VIP III Mid Cap -
Service Class 2/(5)/.......... 46.94% N/A 50.96% December 28, 1998
WRL Alger Aggressive Growth..... 66.75% 34.76% 28.57% March 1, 1994
WRL Gabelli Global Growth....... N/A N/A N/A September 1, 2000
WRL Goldman Sachs Growth........ N/A N/A 16.74% May 3, 1999
WRL Great Companies -
Global/(2)/................... N/A N/A N/A September 1, 2000
WRL Janus Global................ 68.82% 31.13% 26.17% December 3, 1992
WRL NWQ Value Equity............ 6.45% N/A 9.24% May 1, 1996
WRL Pilgrim Baxter Mid Cap
Growth......................... N/A N/A 76.46% May 3, 1999
WRL Salomon All Cap............. N/A N/A 14.52% May 3, 1999
WRL T. Rowe Price Dividend
Growth......................... N/A N/A (8.26%) May 3, 1999
WRL T. Rowe Price Small Cap..... N/A N/A 37.26% May 3, 1999
-------------------------------------------------------------------------------
</TABLE>
+ Ten Year Date
/(1)/The calculation of total return performance for periods prior to inception
of the subaccounts reflects deductions for the mortality and expense risk
fee and administrative charge on a monthly basis, rather than a daily
basis. The monthly deduction is made at the beginning of each month and
generally approximates the performance that would have resulted if the
subaccounts had actually been in existence since the inception of the
portfolio.
/(2)/Effective September 16, 1996, The Dreyfus Corporation became the adviser
to the Dreyfus Small Cap Value Portfolio, formerly known as Quest for
Value Small Cap Portfolio. The portfolio was previously advised by OpCap
Advisors.
/(3)/Effective January 1, 1995, Rowe-Price Fleming International, Inc. became
the Adviser to the T. Rowe Price International Stock Portfolio. The
Portfolio's name was changed from the Global Growth Portfolio and the
Portfolio's shareholders approved a change in investment objective from
investments in small capitalization companies on a global basis to
investments in a broad range of companies on an international basis (i.e.,
non-U.S. companies). Effective August 8, 2000, T. Rowe Price
International, Inc. became the adviser to the Portfolio.
/(4)/The Growth Portfolio of the Transamerica Variable Insurance Fund, Inc., is
the successor to Separate Account Fund C of Transamerica Occidental Life
Insurance Company, a management investment company funding

47
<PAGE>

variable annuities, through a reorganization on November 1, 1996.
Accordingly, the performance data for the Transamerica VIF Growth Portfolio
include performance of its predecessor.
/(5)/Returns prior to January 12, 2000 for the portfolios are based on
historical returns for Initial Class Shares.
* As of May 1, 2000 the death benefits available under this policy have been
changed to (1) 5% Annually Compounding Death Benefit, (2) Greater of 5%
Annually Compounding through age 80 Death Benefit or Annual Step-Up
through age 80 Death Benefit, (3) Monthly Step-Up Death Benefit, and (4)
Return of Premium. However, the total separate account annual expenses for
each death benefit did not change.

48
<PAGE>

APPENDIX C

POLICY VARIATIONS

The dates shown below are the approximate first issue dates of the various
versions of the policy. These dates will vary by state in many cases. This
Appendix describes certain of the more significant differences in features of
the various versions of the policy. There may be additional variations. Please
see your actual policy and any attachments for determining your specific
coverage.

<TABLE>
<C> <S>
Approximate First Issue
Policy Form/Endorsement............................ Date
AV201 101 65 189 (Policy Form)..................... January 1991
AE830 292 (endorsement)............................ May 1992
AE847 394 (endorsement)............................ June 1994
AE871 295 (endorsement)............................ May 1995
AV254 101 87 196 (Policy Form)..................... June 1996
AE909 496 (endorsement)............................ June 1996
AE890 196 (endorsement)............................ June 1996
AV320 101 99 197 (Policy Form)..................... May 1997
AE945 197 (endorsement)............................ May 1997
AV376 101 106 1197 (Policy Form)................... May 1998
AV432 101 114 199 (Group Policy Form).............. May 2000
AV494 101 124 100 (Individual Policy Form)......... May 2000
</TABLE>

49
<PAGE>

<TABLE>
<S> <C> <C> <C> <C>
Product AV201 101 65 189 AV201 101 AV201 101 65 189, AV254 101 87 196,
Feature 65 189, AE847 394, and AE909 496, and
AE830 292, AE871 295 AE890 196
and
AE847 394
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Product AV320 101 99 197 and AV376 101 106 1197 and AV432 101 114 199 and
Feature AE945 197 AE 945 197 AV494 101 124 100
------------------------------------------------------------------------------------------------------------

Excess N/A N/A N/A Yes
Interest
Adjustment
------------------------------------------------------------------------------------------------------------
Excess Yes Yes Yes
Interest
Adjustment
------------------------------------------------------------------------------------------------------------

Guaranteed Total premiums paid, 5% Annually 5% Annually 5% Annually
Minimum less any partial Compounding Compounding Compounding
Death Benefit withdrawals and (Option A). (Option A) or Annual (Option A) or Annual
Option(s) any surrender Step-Up (Option B). Step-Up (Option B).
charges made before Option A is only Option A is only
death, accumulated at available if owner and available if owner
4% to the date we annuitant are both and annuitant are both
receive due proof of death under age 75. under age 75.
or the policy value on the
date we receive due
proof of death,
which ever is greater.
------------------------------------------------------------------------------------------------------------
Guaranteed 5% Annually 5% Annually 5% Annually
Minimum Compounding Compounding (Option Compounding
Death Benefit (Option A), Annual A), Double Enhanced (Option A), Greater of
Option(s) Step-Up (Option B), (Option B), or Return of 5% Annually
or Return of Premium Premium (Option C). Compounding through
(Option C). Option A is Option A is only age 80 or Annual
only available if owner available if owner Step-Up through age 80
and annuitant are both and annuitant (Option B), Return of
under age 75. Option B are both under Age 75. Premium (Option C),
is only available if owner Option B is only and Monthly Step-Up
and annuitant are available if owner through age 80 (Option
under age 81. and annuitant are D). Option A is only
both under age 81. available if owner and
annuitant are both under
age 75. Option B and D
are only available if
owner and annuitant are
both under age 81.
------------------------------------------------------------------------------------------------------------

Guaranteed 1 and 3 year guaranteed 1 and 3 year 1 and 3 year 1, 3, 5, and 7 year
Period periods available. guaranteed guaranteed guaranteed periods
Options periods available. periods available. available.
(available in
the fixed
account)
------------------------------------------------------------------------------------------------------------
Guaranteed 1, 3, 5 and 7 year 1, 3, 5, and 7 year 1, 3, 5, and 7 year
Period guaranteed periods guaranteed periods guaranteed periods
Options available. available. available.
(available in
the fixed
account)
------------------------------------------------------------------------------------------------------------

Minimum 4% 4% 4% 3%
effective
annual
interest rate
applicable to
the
fixed account
------------------------------------------------------------------------------------------------------------
Minimum 3% 3% 3%
effective
annual
interest rate
applicable to
the
fixed account
------------------------------------------------------------------------------------------------------------

Asset N/A N/A N/A Yes
Rebalancing
------------------------------------------------------------------------------------------------------------
Asset Yes Yes Yes
Rebalancing
------------------------------------------------------------------------------------------------------------

Death Proceeds Greater of 1) the policy Greater of (a) Greatest of (a) policy Greatest of (a) annuity
value on the date we policy value and purchase value, (b)
receive due proof of value and (b) (b) guaranteed cash value, and
death, or 2) the total 5% minimum (c) guaranteed
premiums paid for this Annually death benefit minimum death
policy, less any partial Compounding benefit.
withdrawals and any Death Benefit
surrender charges made
before death, accumulated
at 4% interest per annum
to the date we receive due
proof of death
------------------------------------------------------------------------------------------------------------
Death Proceeds Greatest of (a) policy Greatest of (a) policy Greatest of (a) policy
value, (b) cash value, and value, (b) cash value, value, (b) cash value,
(c) guaranteed minimum and (c) guaranteed and (c) guaranteed
death benefit. minimum minimum death benefit.
death benefit.
------------------------------------------------------------------------------------------------------------

Distribution N/A N/A N/A N/A
Financing
Charge
------------------------------------------------------------------------------------------------------------
Distribution Applicable Applicable N/A
Financing
Charge
------------------------------------------------------------------------------------------------------------

</TABLE>

50
<PAGE>

<TABLE>
<S> <C> <C> <C> <C> <C>
Product AV201 101 65 189 AV201 101 65 AV201 101 65 189, AV254 101 87 196, AV320 101 99 197
Feature 189, AE830 AE847 394, and AE909 496, and and AE945 197
292, AE871 295 AE890 196
and AE847 394
-----------------------------------------------------------------------------------------------------------------
Is Mortality & No No No No No
Expense
Risk Fee
different
after the
annuity
commencement
date?
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Product AV376 101 106 1197 AV432 101 114 199
Feature and AE 945 197 and AV494 101 124 100
-----------------------------------------------------------------------------------------------------------------
Is Mortality & Yes (1.10%, plus Yes (1.25%, plus
Expense administrative charge, administrative charge,
Risk Fee regardless of death regardless of death
different benefit chosen benefit chosen prior
after the prior to the annity to the annuity
annuity commencement date) commencement date.)
commencement
date?
-----------------------------------------------------------------------------------------------------------------

Dollar Cost N/A N/A N/A Yes Yes
Averaging
Fixed Account
Option
-----------------------------------------------------------------------------------------------------------------
Dollar Cost Yes Yes
Averaging
Fixed Account
Option
-----------------------------------------------------------------------------------------------------------------

Service Charge $35 assessed on $35 assessed Assessed only on a Assessed only on a Assessed either on a
each policy on each policy policy anniversary; policy anniversary; policy anniversary or
anniversary. Not anniversary. Waived if sum of Waived if sum of on surrender; Waived
deducted from Not deducted premium payments premium if sum of premium
the fixed from the fixed less partial payments less payments less partial
account. account. withdrawals is at partial withdrawals withdrawals or the
least $50,000 on is at least policy value is at least
the policy $50,000 on the $50,000 on the policy
anniversary. Not policy anniversary. anniversary or at the
deducted from the Not deducted time of surrender.
fixed account. from the fixed The service charge is
account. deducted pro-rata
from the investment
options.
-----------------------------------------------------------------------------------------------------------------
Service Charge Assessed either on a Assessed either on a
policy anniversary or policy anniversary or
on surrender; on surrender; Waived
Waived if sum of if sum of premium
premium payments payments less partial
less partial withdrawals or the
withdrawals or the policy value is at least
policy value is at $50,000 on The policy
least $50,000 on the anniversary or at the
policy anniversary or time of surrender. The
at the time of service charge is
surrender. The service deducted pro-rata from
charge is deducted the investment options.
pro-rata from the
investment options.
-----------------------------------------------------------------------------------------------------------------

Nursing Care N/A Yes Yes Yes Yes
and
Terminal
Condition
Withdrawal
Option
-----------------------------------------------------------------------------------------------------------------
Nursing Care Yes Yes
and
Terminal
Condition
Withdrawal
Option
-----------------------------------------------------------------------------------------------------------------
Unemployment N/A Yes
WaiverUnemployment N/A N/A N/A N/A N/A
Waiver
</TABLE>

51
<PAGE>

THE ENDEAVOR VARIABLE ANNUITY

Issued by
PFL LIFE INSURANCE COMPANY

Supplement Dated October 9, 2000
to the
Prospectus dated October 9, 2000

For New Jersey policies, the optional family income protector is as described
in this supplement and not as described in the prospectus.

Family Income Protector

The optional "family income protector" rider can be used to provide you a
certain level of income in the future by guaranteeing a minimum annuitization
value (discussed below). You may elect to purchase this benefit, which provides
a minimum amount you will have to apply to a family income protector payment
option and which guarantees a minimum level of those payments once you begin to
receive them. By electing this benefit, you can participate in the gains of the
underlying variable investment options you select while knowing that you are
guaranteed a minimum level of income in the future, regardless of the
performance of the underlying variable investment options.

You can annuitize under the family income protector (subject to the conditions
described below) at the greater of the policy value or the minimum
annuitization value (subject to any applicable adjustment).

Minimum Annuitization Value. If the family income protector is added when you
---------------------------
purchase the policy or in the first policy year, the minimum annuitization
value on the rider date (i.e., the date the rider is added to the policy) is
the total premium payments. If the family income protector is added after the
first policy year, the minimum annuitization value on the rider date is the
policy value.

After the rider date, the minimum annuitization value is:

. the minimum annuitization value on the rider date; plus
. any additional premium payments; minus
. an adjustment for any withdrawals made after the rider date;
. the result of which is accumulated at the annual growth rate; minus
. any premium taxes.

Please note that if you annuitize using the family income protector on any date
other than a rider anniversary, there may be a downward adjustment to your
minimum annuitization value. See "Minimum Annuitization Value Adjustment"
below.

The annual growth rate is 6% per year. Withdrawals may reduce the minimum
annuitization value on a basis greater than dollar-for-dollar. See the SAI for
more information. In addition to the immediate reduction in the minimum
annuitization value due to the withdrawal, the same withdrawal, if taken in the
rider year that you annuitize using the family income protector, may also
result in a negative minimum annuitization value adjustment. See "Minimum
Annuitization Value Adjustment" below.

The minimum annuitization value may only be used to annuitize using the family
income protector payment options and may not be used with any of the other
annuity payment options listed in the prospectus. The family income protector
payment options are:

S-1
<PAGE>

Certain". Payments will be made as long as either the annuitant or joint
annuitant is living. In the event of the death of both the annuitant and
joint annuitant prior to the end of the chosen period certain, the remaining
period certain payments will be continued to the beneficiary.

Please note that if you annuitize using the family income protector before the
10/th/ rider anniversary, the payments will be calculated with an annuity
factor age adjustment. See "Annuity Factor Age Adjustment" below.

Minimum Annuitization Value Adjustment. If you annuitize under the family
--------------------------------------
income protector on any date other than a rider anniversary, the minimum
annuitization value will be adjusted downward if your policy value has
decreased since the last rider anniversary (or the rider date for
annuitizations within the first rider year). The adjusted minimum annuitization
value will equal:

. the policy value on the date you annuitize; plus
. the minimum annuitization value on the most recent rider anniversary (or the
rider date for annuitizations within the first rider year); minus
. the policy value on the most recent rider anniversary (or the rider date for
annuitizations within the first rider year).

The minimum annuitization value will not be adjusted if:

. you annuitize on a rider anniversary; or
. your policy value has increased since the last rider anniversary (or the
rider date for annuitizations within the first rider year).

Annuity Factor Age Adjustment. If you annuitize using the family income
-----------------------------
protector before the 10/th/ rider anniversary, the first payment will be
calculated with an annuity factor age adjustment which subtracts up to 10 years
from your age resulting in all payments being lower than if an annuity factor
age adjustment was not used. See the SAI for information concerning the
calculation of the initial payment. The age adjustment is as follows:

<TABLE>
<CAPTION>
Age Adjustment:
Number of Years
Number of Years Since Subtracted from
the Rider Date Your Age
------------------------------------------------------------------------------
<S> <C>
0-1 10
1-2 9
2-3 8
3-4 7
4-5 6
5-6 5
6-7 4
7-8 3
8-9 2
9-10 1
>10 0
</TABLE>

Please note that the minimum annuitization value is used solely to calculate
the family income protector annuity payments. The family income protector does
not establish or guarantee policy value or guarantee performance of any
investment option. Because this benefit is based on conservative actuarial
factors, the level of lifetime income that it guarantees may be less than the
level that would be provided by application of the policy value at otherwise
applicable adjusted annuity factors. Therefore, the family income protector
should be regarded as a safety net. The costs of annuitizing under the family
income protector include the guaranteed payment fee, and also the lower payout
levels inherent in the annuity tables used for those minimum payouts (which may
also include an annuity factor age adjustment). These costs should be balanced
against the benefits of a minimum payout level.

In addition to the annual growth rate, other benefits and fees under the rider
(the rider fee, the fee waiver threshold, guaranteed payment fee, and the
annuity factor age adjustment) are also guaranteed not to change after the
rider is added. However, all of these benefit specifications may change if you
elect to upgrade the minimum annuitization value.

Minimum Annuitization Value Upgrade. You can upgrade your minimum annuitization
-----------------------------------
value to the policy value at any time before your 95/th/ birthday.

S-2
<PAGE>

If you upgrade:

. the current rider will terminate and a new one will be issued with its own
specified guaranteed benefits and fees; and
. the new rider's specified benefits and fees may not be as advantageous as
before.

It generally will not be to your advantage to upgrade unless your policy value
exceeds your minimum annuitization value at that time.

Conditions of Exercise of the Family Income Protector. You can annuitize using
-----------------------------------------------------
the family income protector at any time before your 95/th/ birthday. For your
convenience, we will put the last date to annuitize using the family income
protector on page one of the rider.

Note Carefully:

. If you annuitize at any time other than a rider anniversary, there may be a
negative adjustment to your minimum annuitization value. See "Minimum
Annuitization Value Adjustment."
. If you annuitize before the 10th rider anniversary there will be an annuity
factor age adjustment. See "Annuity Factor Age Adjustment."
. If you take a withdrawal during the rider year that you annuitize, your
minimum annuitization value will be reduced to reflect the withdrawal and
will likely be subject to a negative minimum annuitization value adjustment.

During the first rider year after annuitizing using the family income
protector, each stabilized payment will equal the initial payment. On each
rider anniversary thereafter, the stabilized payment will increase or decrease
depending on the performance of the investment options you selected (but will
never be less than the initial payment), and then be held constant at that
amount for that rider year. The stabilized payment on each rider anniversary
will equal the greater of the initial payment or the payment supportable by the
annuity units in the selected investment options. See the SAI for additional
information concerning stabilized payments.

Family Income Protector Rider Fee. A rider fee, currently 0.35% of the minimum
---------------------------------
annuitization value on the rider anniversary, is charged annually prior to
annuitization. We will also charge this fee upon termination. The rider fee is
deducted from each variable investment option in proportion to the amount of
policy value in each subaccount.

The rider fee on any given rider anniversary will be waived if the policy value
exceeds the fee waiver threshold. The fee waiver threshold currently is two
times the minimum annuitization value. PFL may, at its discretion, change the
fee waiver threshold in the future, but it will never be greater than two and
one-half times the minimum annuitization value.

Termination. The family income protector will terminate upon the earliest of
-----------
the following:

. the date we receive written notice from you requesting termination of the
family income protector;
. annuitization (you will still get guaranteed minimum stabilized payments if
you annuitize using the minimum annuitization value under the family income
protector);
. upgrade of the minimum annuitization value (although a new rider will be
issued);
. termination of your policy; or
. 30 days after the last date to elect the benefit as shown on page 1 of the
rider.

S-3
<PAGE>

STATEMENT OF ADDITIONAL INFORMATION

THE ENDEAVOR VARIABLE ANNUITY

Issued through

PFL ENDEAVOR VA SEPARATE ACCOUNT

Offered by

PFL LIFE INSURANCE COMPANY

This statement of additional information expands upon subjects discussed in the
current prospectus for the Endeavor Variable Annuity offered by PFL Life
Insurance Company. You may obtain a copy of the prospectus dated October 9,
2000 by calling 1-800-525-6205, or by writing to the Administrative and Service
Office, Financial Markets Division--Variable Annuity Dept., 4333 Edgewood Road
N.E., Cedar Rapids, Iowa 52499-0001. Terms used in the current prospectus for
the policy are incorporated in this Statement of Additional Information.

This Statement of Additional Information (SAI) is not a prospectus and should
be read only in conjunction with the prospectuses for the policy and the
underlying fund portfolios.

Dated: October 9, 2000

<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
GLOSSARY OF TERMS.......................................................... 3
THE POLICY--GENERAL PROVISIONS............................................. 5
Owner.................................................................... 5
Entire Policy............................................................ 5
Misstatement of Age or Sex............................................... 6
Addition, Deletion or Substitution of Investments........................ 6
Excess Interest Adjustment............................................... 6
Reallocation of Annuity Units After the Annuity Commencement Date........ 10
Annuity Payment Options.................................................. 10
Death Benefit............................................................ 11
Death of Owner........................................................... 14
Assignment............................................................... 14
Evidence of Survival..................................................... 14
Non-Participating........................................................ 14
Amendments............................................................... 14
Employee and Agent Purchases............................................. 15
CERTAIN FEDERAL INCOME TAX CONSEQUENCES.................................... 15
Tax Status of the Policy................................................. 15
Taxation of PFL.......................................................... 19
INVESTMENT EXPERIENCE...................................................... 19
Accumulation Units....................................................... 19
Annuity Unit Value and Annuity Payment Rates............................. 21
FAMILY INCOME PROTECTOR--ADDITIONAL INFORMATION............................ 22
HISTORICAL PERFORMANCE DATA................................................ 25
Money Market Yields...................................................... 25
Other Subaccount Yields.................................................. 26
Total Returns............................................................ 26
Other Performance Data................................................... 27
Adjusted Historical Performance Data..................................... 27
Past Performance for the Target Account.................................. 28
PUBLISHED RATINGS.......................................................... 28
STATE REGULATION OF PFL.................................................... 28
ADMINISTRATION............................................................. 29
RECORDS AND REPORTS........................................................ 29
DISTRIBUTION OF THE POLICIES............................................... 29
VOTING RIGHTS.............................................................. 29
OTHER PRODUCTS............................................................. 30
CUSTODY OF ASSETS.......................................................... 30
LEGAL MATTERS.............................................................. 30
INDEPENDENT AUDITORS....................................................... 30
OTHER INFORMATION.......................................................... 30
FINANCIAL STATEMENTS....................................................... 31
</TABLE>

2
<PAGE>

GLOSSARY OF TERMS

Accumulation Unit--An accounting unit of measure used in calculating the policy
value in the separate account before the annuity commencement date.

Adjusted Policy Value--An amount equal to the policy value increased or
decreased by any excess interest adjustments.

Administrative and Service Office--Financial Markets Division--Variable Annuity
Dept., PFL Life Insurance Company, 4333 Edgewood Road N.E., Cedar Rapids, Iowa
52499-0001.

Annuitant--The person during whose life any annuity payments involving life
contingencies will continue.

Annuity Payment Option--A method of receiving a stream of annuity payments
selected by the owner.

Annuity Unit--An accounting unit of measure used in the calculation of the
amount of the second and each subsequent variable annuity payment.

Beneficiary--The person who has the right to the death benefit set forth in the
policy.

Business Day--A day when the New York Stock Exchange is open for business.

Cash Value--The adjusted policy value less any applicable surrender charge.

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

Enrollment form--A written application, order form, or any other information
received electronically or otherwise upon which the policy is issued and/or is
reflected on the data or specifications page.

Excess Interest Adjustment--A positive or negative adjustment to amounts
withdrawn upon partial withdrawals, full surrenders or transfers, from the
guaranteed period options, or to amounts applied to annuity payment options.
The adjustment reflects changes in the interest rates declared by PFL since the
date any payment was received by, or an amount was transferred to, the
guaranteed period option. The excess interest adjustment can either decrease or
increase the amount to be received by the owner upon full surrender or
commencement of annuity payments, depending upon whether there has been an
increase or decrease in interest rates, respectively.

Fixed Account--One or more investment choices under the policy that are part of
PFL's general assets and which are not in the separate account.

Guaranteed Period Options--The various guaranteed interest rate periods of the
fixed account, which PFL may offer, into which premiums may be paid or amounts
may be transferred.

Nonqualified Policy--A policy other than a qualified policy.

Owner--Depending upon the state of issue, owner means either:
. the individual or entity that owns a certificate under a group contract; or
. the individual or entity that owns an individual policy.

3
<PAGE>

Participant--A person who makes premium payments or for whom premium payments
are made under the policy.

Policy--Depending upon the state of issue, policy means either:
. the individual certificate under a group contract; or
. the individual policy.

Policy Value--On or before the annuity commencement date, the policy value is
equal to the owner's:
. premium payments; minus
. partial withdrawals (including any applicable excess interest adjustments
and/or surrender charges on such withdrawals); plus
. interest credited in the fixed account; plus

. accumulated gains in the separate account; minus

. losses in the separate account; minus
. service charges, premium taxes, rider fees, and transfer fees, if any.

Policy Year--A policy year begins on the date in which the policy becomes
effective and on each anniversary thereof.

Premium Payment--An amount paid to PFL by the owner or on the owner's behalf as
consideration for the benefits provided by the policy.

Qualified Policy--A policy issued in connection with retirement plans that
qualify for special federal income tax treatment under the Code.

Separate Account--PFL Endeavor VA Separate Account, a separate account
established and registered as a unit investment trust under the Investment
Company Act of 1940 (the "1940 Act"), as amended, to which premium payments
under the policies may be allocated.

Service Charge--An annual charge on each policy anniversary (and a charge at
the time of surrender during any policy year) for policy maintenance and
related administrative expenses. This annual charge is $35, but will not exceed
2% of the policy value.

Subaccount--A subdivision within the separate account, the assets of which are
invested in a specified portfolio of the underlying funds.

Successor Owner--A person appointed by the owner to succeed to ownership of the
policy in the event of the death of the owner who is not the annuitant before
the annuity commencement date.

Surrender Charge--A percentage of each premium payment in an amount from 7% to
0% depending upon the length of time from the date of each premium payment. The
surrender charge is assessed on surrenders of, or partial withdrawals from, the
policy. A surrender charge may also be referred to as a "contingent deferred
sales charge."

Valuation Period--The period of time from one determination of accumulation
unit values and annuity unit values to the next subsequent determination of
values. Such determination shall be made on each business day.

Variable Annuity Payments--Payments made pursuant to an annuity payment option
which fluctuate as to dollar amount or payment term in relation to the
investment performance of the specified subaccounts within the separate
account.

Written Notice or Written Request--Written notice, signed by the owner, that
gives PFL the information it requires and is received at the administrative and
service office. For some transactions, PFL may accept an electronic notice such
as telephone instructions. Such electronic notice must meet the requirements
PFL establishes for such notices.

4
<PAGE>

In order to supplement the description in the prospectus, the following
provides additional information about PFL and the policy, which may be of
interest to a prospective purchaser.

THE POLICY--GENERAL PROVISIONS

Owner

The policy shall belong to the owner upon issuance of the policy after
completion of an enrollment form and delivery of the initial premium payment.
While the annuitant is living, the owner may: (1) assign the policy; (2)
surrender the policy; (3) amend or modify the policy with PFL's consent; (4)
receive annuity payments or name a payee to receive the payments; and (5)
exercise, receive and enjoy every other right and benefit contained in the
policy. The exercise of these rights may be subject to the consent of any
assignee or irrevocable beneficiary; and of your spouse in a community or
marital property state.

Unless PFL has been notified of a community or marital property interest in the
policy, it will rely on its good faith belief that no such interest exists and
will assume no responsibility for inquiry.

A successor owner can be named in the enrollment form, information provided in
lieu thereof, or in a written notice. The successor owner will become the new
owner upon your death, if you predecease the annuitant. If no successor owner
survives you and you predecease the annuitant, your estate will become the
owner.

Note carefully. If the owner does not name a contingent owner, the owner's
--------------
estate will become the new owner. If no probate estate is opened because the
owner has precluded the opening of a probate estate by means of a trust or
other instrument, unless PFL has received written notice of the trust as a
successor owner signed prior to the owner's death, that trust may not exercise
ownership rights to the policy. It may be necessary to open a probate estate in
order to exercise ownership rights to the policy if no contingent owner is
named in a written notice received by PFL.

The owner may change the ownership of the policy in a written notice. When this
change takes effect, all rights of ownership in the policy will pass to the new
owner. A change of ownership may have tax consequences.

When there is a change of owner or successor owner, the change will not be
effective until it is recorded in our records. Once recorded, it will take
effect as of the date the owner signs the written notice, subject to any
payment PFL has made or action PFL has taken before recording the change.
Changing the owner or naming a new successor owner cancels any prior choice of
successor owner, but does not change the designation of the beneficiary or the
annuitant.

If ownership is transferred (except to the owner's spouse) because the owner
dies before the annuitant, the cash value generally must be distributed to the
successor owner within five years of the owner's death, or payments must be
made for a period certain or for the successor owner's lifetime so long as any
period certain does not exceed that successor owner's life expectancy, if the
first payment begins within one year of your death.

Entire Policy

The policy, any endorsements thereon, the enrollment form, or information
provided in lieu thereof, constitute the entire contract between PFL and the
owner. All statements in the enrollment form are representations and not
warranties. No statement will cause the policy to be void or to be used in
defense of a claim unless contained in the enrollment form or information
provided in lieu thereof.

5
<PAGE>

Misstatement of Age or Sex

If the age or sex of the annuitant or owner has been misstated, PFL will change
the annuity benefit payable to that which the premium payments would have
purchased for the correct age or sex. The dollar amount of any underpayment
made by PFL shall be paid in full with the next payment due such person or the
beneficiary. The dollar amount of any overpayment made by PFL due to any
misstatement shall be deducted from payments subsequently accruing to such
person or beneficiary. Any underpayment or overpayment will include interest at
5% per year, from the date of the wrong payment to the date of the adjustment.
The age of the annuitant or owner may be established at any time by the
submission of proof satisfactory to PFL.

Addition, Deletion, or Substitution of Investments

PFL cannot and does not guarantee that any of the subaccounts will always be
available for premium payments, allocations, or transfers. PFL retains the
right, subject to any applicable law, to make certain changes in the separate
account and its investments. PFL reserves the right to eliminate the shares of
any portfolio held by a subaccount and to substitute shares of another
portfolio of the underlying funds, or of another registered open-end management
investment company for the shares of any portfolio, if the shares of the
portfolio are no longer available for investment or if, in PFL's judgment,
investment in any portfolio would be inappropriate in view of the purposes of
the separate account. To the extent required by the 1940 Act, as amended,
substitutions of shares attributable to your interest in a subaccount will not
be made without prior notice to you and the prior approval of the Securities
and Exchange Commission ("SEC"). Nothing contained herein shall prevent the
separate account from purchasing other securities for other series or classes
of variable annuity policies, or from effecting an exchange between series or
classes of variable annuity policies on the basis of your requests.

New subaccounts may be established when, in the sole discretion of PFL,
marketing, tax, investment or other conditions warrant. Any new subaccounts may
be made available to existing owners on a basis to be determined by PFL. Each
additional subaccount will purchase shares in a mutual fund portfolio, other
investment vehicle. PFL may also eliminate one or more subaccounts if, in its
sole discretion, marketing, tax, investment or other conditions warrant such
change. In the event any subaccount is eliminated, PFL will notify you and
request a reallocation of the amounts invested in the eliminated subaccount. If
no such reallocation is provided by you, PFL will reinvest the amounts in the
subaccount that invests in the Endeavor Money Market Portfolio (or in a similar
portfolio of money market instruments), in another subaccount, or in the fixed
account, if appropriate.

In the event of any such substitution or change, PFL may, by appropriate
endorsement, make such changes in the policies as may be necessary or
appropriate to reflect such substitution or change. Furthermore, if deemed to
be in the best interests of persons having voting rights under the policies,
the separate account may be (i) operated as a management company under the 1940
Act or any other form permitted by law, (ii) deregistered under the 1940 Act in
the event such registration is no longer required or (iii) combined with one or
more other separate accounts. To the extent permitted by applicable law, PFL
also may transfer the assets of the separate account associated with the
policies to another account or accounts.

Excess Interest Adjustment

Money that you withdraw from, transfer out of, or apply to an annuity payment
option from a guaranteed period option of the fixed account before the end of
its guaranteed period (the number of years you specified the money would remain
in the guaranteed period option) may be subject to an excess interest
adjustment. At the time you request a withdrawal, if interest rates set by PFL
have risen since the date of the initial guarantee, the excess interest
adjustment will result in a lower cash value. However, if interest rates have
fallen since the date of the initial guarantee, the excess interest adjustment
will result in a higher cash value.

6
<PAGE>

Excess interest adjustments will not reduce the adjusted policy value for a
guaranteed period option below the premium payments and transfers to that
guaranteed period option, less any prior partial withdrawals and transfers from
the guaranteed period option, plus interest at the policy's minimum guaranteed
effective annual interest rate of 3%. This is referred to as the excess
interest adjustment floor.

The formula that will be used to determine the excess interest adjustment is:

S* (G-C)* (M/12)

S = Gross amount being withdrawn that is subject to the excess interest
adjustment
G = Guaranteed interest rate in effect for the policy
C = Current guaranteed interest rate then being offered on new premiums for the
next longer option period than "M". If this policy form or such an option
period is no longer offered, "C" will be the U.S. Treasury rate for the
next longer maturity (in whole years) than "M" on the 25th day of the
previous calendar month, plus up to 2%.
M = Number of months remaining in the current option period, rounded up to the
next higher whole number of months.
* = multiplication
/\ = exponentiation

Example 1 (Surrender, rates increase by 3%):

<TABLE>
<S> <C>
Single premium: $50,000.00
----------------------------------------------------------------------------------------------------
Guarantee period: 5 Years
----------------------------------------------------------------------------------------------------
Guarantee rate: 5.50% per annum
----------------------------------------------------------------------------------------------------
Surrender: middle of contract year 2
----------------------------------------------------------------------------------------------------
Policy value at middle of contract year 2 = 50,000.00 * (1.055)/\ 1.5 = 54,181.21
----------------------------------------------------------------------------------------------------
Penalty free amount at middle of contract year 2 = 50,000.00 * .10 = 5,000.00
----------------------------------------------------------------------------------------------------
(assume any gain in the policy is less than 10%
of premium)
----------------------------------------------------------------------------------------------------
Amount subject to excess interest adjustment = 54,181.21-5,000.00 = 49,181.21
----------------------------------------------------------------------------------------------------
Excess interest adjustment floor = 50,000.00 * (1.03)/\ 1.5 = 52,266.79
----------------------------------------------------------------------------------------------------
Excess interest adjustment
----------------------------------------------------------------------------------------------------
G = .055
----------------------------------------------------------------------------------------------------
C = .085
----------------------------------------------------------------------------------------------------
M = 18
----------------------------------------------------------------------------------------------------
Excess interest adjustment = S* (G-C)* (M/12)
----------------------------------------------------------------------------------------------------
= 49,181.21 * (.055-.085) * (18/12)
= -2,213.15, but excess interest
adjustment cannot cause the adjusted policy
value to fall below the excess interest
adjustment floor, so the adjustment is
limited to 52,266.79-54,181.21
= -1,914.42
----------------------------------------------------------------------------------------------------
Adjusted policy value = policy value + excess interest adjustment
= 54,181.21 + (-2,213.15) = 51,968.06
----------------------------------------------------------------------------------------------------
Surrender charges = (50,000.00-5,000.00)* .07 = 3,150.00
----------------------------------------------------------------------------------------------------
Net surrender value at middle of contract year 2 = 54,181.21-3,150.00 = 51,031.21
----------------------------------------------------------------------------------------------------
</TABLE>

7
<PAGE>

Example 2 (Surrender, rates decrease by 1%):

<TABLE>
-------------------------------------------------------------------------------------------------
<S> <C>
Single premium: $50,000.00
-------------------------------------------------------------------------------------------------
Guarantee period: 5 Years
-------------------------------------------------------------------------------------------------
Guarantee rate: 5.50% per annum
-------------------------------------------------------------------------------------------------
Surrender: middle of contract year 2
-------------------------------------------------------------------------------------------------
Policy value at middle of contract year 2 = 50,000* (1.055)/\ 1.2 = 54,181.21
-------------------------------------------------------------------------------------------------
Penalty free amount at middle of contract = 50,000.00 * .10 = 5,000.00
year 2 (assume any gain in the policy is
less than 10% of premium)
-------------------------------------------------------------------------------------------------
Amount subject to excess interest adjustment = 54,181.21-5,000.00 = 49,181.21
-------------------------------------------------------------------------------------------------
Excess interest adjustment floor = 50,000* (1.03)/\ 1.5 = 52,266.79
-------------------------------------------------------------------------------------------------
Excess interest adjustment
-------------------------------------------------------------------------------------------------
G = .055
-------------------------------------------------------------------------------------------------
C = .045
-------------------------------------------------------------------------------------------------
M = 18
-------------------------------------------------------------------------------------------------
Excess interest adjustment = S* (G-C)* (M/12)
-------------------------------------------------------------------------------------------------
= 49,181.21* (.055-.045)* (18/12) = 737.72
-------------------------------------------------------------------------------------------------
Adjusted policy value = 54,181.21+737.72 = 54,918.93
-------------------------------------------------------------------------------------------------
Surrender charges = (50,000.00-5,000.00)* .07 = 3,150.00
-------------------------------------------------------------------------------------------------
Net surrender value at middle of contract year 2 = 54,918.93-3,150.00 = 51,768.93
-------------------------------------------------------------------------------------------------
</TABLE>

On a partial withdrawal, PFL will pay the policyholder the full amount of
withdrawal requested (as long as the policy value is sufficient). Amounts
withdrawn will reduce the policy value by an amount equal to:

R - E + SC

R = the requested partial withdrawal;
E = the excess interest adjustment; and
SC = the surrender charges on (EPW-E); where
EPW = the excess partial withdrawal amount.

8
<PAGE>

Example 3 (Partial Withdrawal, rates increase by 1%):

<TABLE>
-------------------------------------------------------------------------------------------------
<S> <C>
Single premium: $50,000.00
-------------------------------------------------------------------------------------------------
Guarantee period: 5 Years
-------------------------------------------------------------------------------------------------
Guarantee rate: 5.50% per annum
-------------------------------------------------------------------------------------------------
Partial withdrawal: $20,000; middle of contract year 2
-------------------------------------------------------------------------------------------------
Policy value at middle of contract year 2 = 50,000* (1.055)/\ 1.2 = 54,181.21
-------------------------------------------------------------------------------------------------
Penalty free amount at middle of contract = 50,000.00 * .10 = 5,000.00
year 2 (assume any gain in policy is less
than 10% of premium)
-------------------------------------------------------------------------------------------------
Excess interest adjustment/surrender charge
-------------------------------------------------------------------------------------------------
S = 20,000-5,000.00 = 15,000.00
-------------------------------------------------------------------------------------------------
G = .055
-------------------------------------------------------------------------------------------------
C = .065
-------------------------------------------------------------------------------------------------
M = 18
-------------------------------------------------------------------------------------------------
E = 15,000.00* (.055-.065)* (18/12) = -225.00
-------------------------------------------------------------------------------------------------
EPW = 20,000.00-5,000.00 = 15,000.00
-------------------------------------------------------------------------------------------------
SC = .07* (15,000.00-(-225.00) = 1,065.75
-------------------------------------------------------------------------------------------------
Remaining policy value at middle of contract = 54,181.21-(R-E+ surrender charge)
year 2
-------------------------------------------------------------------------------------------------
= 54,181.21-(20,000.00-(-225.00) + 1,065.75)
= 32,890.46
-------------------------------------------------------------------------------------------------
</TABLE>

Example 4 (Partial Withdrawal, rates decrease by 1%):

<TABLE>
-------------------------------------------------------------------------------------------------
<S> <C>
Single premium: $50,000.00
-------------------------------------------------------------------------------------------------
Guarantee period: 5 Years
-------------------------------------------------------------------------------------------------
Guarantee rate: 5.50% per annum
-------------------------------------------------------------------------------------------------
Partial withdrawal: $20,000; middle of contract year 2
-------------------------------------------------------------------------------------------------
Policy value at middle of contract year 2 = 50,000.00* (1.055)/\ 1.5 = 54,181.21
-------------------------------------------------------------------------------------------------
Penalty free amount at middle of contract = 50,000.00 * .10 = 5,000.00
year 2 (assume any gain in the policy is
less than 10% of premium)
-------------------------------------------------------------------------------------------------
Excess interest adjustment/surrender charge
-------------------------------------------------------------------------------------------------
S = 20,000-5,000.00 = 15,000.00
-------------------------------------------------------------------------------------------------
G = .055
-------------------------------------------------------------------------------------------------
C = .045
-------------------------------------------------------------------------------------------------
M = 18
-------------------------------------------------------------------------------------------------
E = 15,000.00 * (.055-.045)* (18/12) = 225.00
-------------------------------------------------------------------------------------------------
EPW = 20,000.00-5,000.00 = 15,000.00
-------------------------------------------------------------------------------------------------
SC = .07 * (15,000.00-225.00) = 1,034.25
-------------------------------------------------------------------------------------------------
Remaining policy value at middle of contract = 54,181.21-(R-E+surrender charge)
year 2
-------------------------------------------------------------------------------------------------
= 54,181.21-(20,000.00-225.00+1,034.25)
= 33,371.96
-------------------------------------------------------------------------------------------------
</TABLE>

9
<PAGE>

Reallocation of Annuity Units After the Annuity Commencement Date

After the annuity commencement date, you may reallocate the value of a
designated number of annuity units of a subaccount then credited to a policy
into an equal value of annuity units of one or more other subaccounts or the
fixed account. The reallocation shall be based on the relative value of the
annuity units of the account(s) or subaccount(s) at the end of the business day
on the next payment date. The minimum amount which may be reallocated is the
lesser of (1) $10 of monthly income or (2) the entire monthly income of the
annuity units in the account or subaccount from which the transfer is being
made. If the monthly income of the annuity units remaining in an account or
subaccount after a reallocation is less than $10, PFL reserves the right to
include the value of those annuity units as part of the transfer. The request
must be in writing to PFL's administrative and service office. There is no
charge assessed in connection with such reallocation. A reallocation of annuity
units may be made up to four times in any given policy year.

After the annuity commencement date, no transfers may be made from the fixed
account to the separate account.

Annuity Payment Options

During the lifetime of the annuitant and prior to the annuity commencement
date, the owner may choose an annuity payment option or change the election,
but written notice of any election or change of election must be received by
PFL at its administrative and service office at least thirty (30) days prior to
the annuity commencement date. If no election is made prior to the annuity
commencement date, annuity payments will be made under (i) Payment Option 3,
life income with level payments for 10 years certain, using the existing
adjusted policy value of the fixed account, or (ii) under Payment Option 3,
life income with variable payments for 10 years certain using the existing
policy value of the separate account, or (iii) in a combination of (i) and
(ii).

The person who elects an annuity payment option can also name one or more
successor payees to receive any unpaid amount PFL has at the death of a payee.
Naming these payees cancels any prior choice of a successor payee.

A payee who did not elect the annuity payment option does not have the right to
advance or assign payments, take the payments in one sum, or make any other
change. However, the payee may be given the right to do one or more of these
things if the person who elects the option tells PFL in writing and PFL agrees.

Variable Payment Options. The dollar amount of the first variable annuity
------------------------
payment will be determined in accordance with the annuity payment rates set
forth in the applicable table contained in the policy. The tables are based on
a 5% effective annual Assumed Investment Return and the "1983 Table a" (male,
female, and unisex if required by law) mortality table with projection using
projection Scale G factors, assuming a maturity date in the year 2000. ("The
1983 Table a" mortality rates are adjusted based on improvements in mortality
since 1983 to more appropriately reflect increased longevity. This is
accomplished using a set of improvement factors referred to as projection scale
G.) The dollar amount of additional variable annuity payments will vary based
on the investment performance of the subaccount(s) of the separate account
selected by the annuitant or beneficiary.

10
<PAGE>

Determination of the First Variable Payment. The amount of the first variable
-------------------------------------------
payment depends upon the sex (if consideration of sex is allowed under state
law) and adjusted age of the annuitant. The adjusted age is the annuitant's
actual age nearest birthday, on the annuity commencement date, adjusted as
follows:

<TABLE>
<CAPTION>
Annuity Commencement Date Adjusted Age
------------------------- ------------
<S> <C>
Before 2001 Actual Age
2001-2010 Actual Age minus 1
2011-2020 Actual Age minus 2
2021-2030 Actual Age minus 3
2031-2040 Actual Age minus 4
After 2040 As determined by PFL
</TABLE>

This adjustment assumes an increase in life expectancy, and therefore it
results in lower payments than without such an adjustment.

Determination of Additional Variable Payments. All variable annuity payments
---------------------------------------------
other than the first are calculated using annuity units and are credited to the
policy. The number of annuity units to be credited in respect of a particular
subaccount is determined by dividing that portion of the first variable annuity
payment attributable to that subaccount by the annuity unit value of that
subaccount on the annuity commencement date. The number of annuity units of
each particular subaccount credited to the policy then remains fixed, assuming
no transfers to or from that subaccount occur. The dollar value of variable
annuity units in the chosen subaccount will increase or decrease reflecting the
investment experience of the chosen subaccount. The dollar amount of each
variable annuity payment after the first may increase, decrease or remain
constant, and is equal to the sum of the amounts determined by multiplying the
number of annuity units of each particular subaccount credited to the policy by
the annuity unit value for the particular subaccount on the date the payment is
made.

Death Benefit

Adjusted Partial Withdrawal. The amount of your guaranteed minimum death
---------------------------
benefit is reduced due to a partial withdrawal called the adjusted partial
withdrawal. The reduction amount depends on the relationship between your
guaranteed minimum death benefit and policy value. The adjusted partial
withdrawal is equal to (1) multiplied by (2), where:
(1) is the gross partial withdrawals, where gross partial
withdrawal = requested withdrawal--excess interest adjustment + surrender
charges on (excess partial withdrawal--excess interest adjustment); and
(2) is the adjustment factor = current death benefit prior to the withdrawal
divided by the current policy value prior to the withdrawal.

11
<PAGE>

The following examples describe the effect of a withdrawal on the guaranteed
minimum death benefit and policy value.

Example 1
(Assumed Facts for Example)
<TABLE>
------------------------------------------------------------------------------
<C> <S>
$75,000 current guaranteed minimum death benefit before withdrawal
------------------------------------------------------------------------------
$50,000 current policy value before withdrawal
------------------------------------------------------------------------------
$75,000 current death benefit (larger of policy value and guaranteed minimum
death benefit)
------------------------------------------------------------------------------
6% current surrender charge percentage
------------------------------------------------------------------------------
$15,000 requested withdrawal
------------------------------------------------------------------------------
$5,000 surrender charge-free amount (assumes penalty free withdrawal is
available)
------------------------------------------------------------------------------
$10,000 excess partial withdrawal (amount subject to surrender charge)
------------------------------------------------------------------------------
$ 100 excess interest adjustment (assumes interest rates have decreased
since initial guarantee)
------------------------------------------------------------------------------
$ 594 surrender charge on (excess partial withdrawal less excess interest
adjustment) = 0.06* (10,000-100)
------------------------------------------------------------------------------
$10,194 reduction in policy value due to excess partial withdrawal = 10,000-
100+594
------------------------------------------------------------------------------
$23,241 adjusted partial withdrawal = (5,000+10,494) * (75,000/50,000)
------------------------------------------------------------------------------
$51,759 New guaranteed minimum death benefit (after withdrawal) = 75,000-
23,241
------------------------------------------------------------------------------
$34,506 New policy value (after withdrawal) = 50,000-15,494
</TABLE>

<TABLE>
<CAPTION>
Summary:
--------
<S> <C>
Reduction in guaranteed minimum death benefit = $23,241
Reduction in policy value = $15,494
</TABLE>

12
<PAGE>

Note, guaranteed minimum death benefit is reduced more than the policy value
since the guaranteed minimum death benefit was greater than the policy value
just prior to the withdrawal.

Example 2
(Assumed Facts for Example)
<TABLE>
------------------------------------------------------------------------------
<C> <S>
$50,000 current guaranteed minimum death benefit before withdrawal
------------------------------------------------------------------------------
$75,000 current policy value before withdrawal
------------------------------------------------------------------------------
$75,000 current death benefit (larger of policy value and guaranteed minimum
death benefit)
------------------------------------------------------------------------------
6% current surrender charge percentage
------------------------------------------------------------------------------
$15,000 requested withdrawal
------------------------------------------------------------------------------
$ 7,500 surrender charge-free amount (assumes penalty free withdrawal is
available)
------------------------------------------------------------------------------
$ 7,500 excess partial withdrawal (amount subject to surrender charge)
------------------------------------------------------------------------------
$ -100 excess interest adjustment (assumes interest rates have increased
since initial guarantee)
------------------------------------------------------------------------------
$ 456 surrender charge on (excess partial withdrawal less excess interest
adjustment) = 0.06*[(7500-(-100)]
------------------------------------------------------------------------------
$ 8,056 reduction in policy value due to excess partial
withdrawal = 7500-(-100) + 456 = 7500 + 100 + 456
------------------------------------------------------------------------------
$15,556 adjusted partial withdrawal = (7,500 + 8056) * (75,000/75,000)
------------------------------------------------------------------------------
$34,444 New guaranteed minimum death benefit (after withdrawal) = 50,000-
15,556
------------------------------------------------------------------------------
$59,444 New policy value (after withdrawal) = 75,000-15,556
</TABLE>

<TABLE>
<CAPTION>
Summary:
--------
<S> <C>
Reduction in guaranteed minimum death benefit = $15,556
Reduction in policy value = $15,556
</TABLE>

Note, the guaranteed minimum death benefit and policy value are reduced by the
same amount since the policy value was higher than the guaranteed minimum death
benefit just prior to the withdrawal.

Due proof of death of the annuitant is proof that the annuitant that is the
owner died prior to the commencement of annuity payments. A certified copy of a
death certificate, a certified copy of a decree of a court of competent
jurisdiction as to the finding of death, a written statement by the attending
physician, or any other proof satisfactory to PFL will constitute due proof of
death. Upon receipt of this proof and an election of a method of settlement and
return of the policy, the death benefit generally will be paid within seven
days, or as soon thereafter as PFL has sufficient information about the
beneficiary to make the payment. The beneficiary may receive the amount payable
in a lump sum cash benefit, or, subject to any limitation under any state or
federal law, rule, or regulation, under one of the annuity payment options
described above, unless a settlement agreement is effective at the death of the
owner preventing such election.

If the annuitant was the owner, and the beneficiary was not the annuitant's
spouse, the death benefit must (1) be distributed within five years of the date
of the deceased owner's death, or (2) payments under an annuity payment option
must begin no later than one year after the deceased owner's death and must be
made for the beneficiary's lifetime or for a period certain (so long as any
period certain does not exceed the beneficiary's life expectancy). Death
proceeds, which are not paid to or for the benefit of a natural person, must be
distributed within five years of the date of the deceased owner's death. If the
sole beneficiary is the deceased owner's surviving spouse, such spouse may
elect to continue the policy as the new annuitant and owner instead of
receiving the death benefit.

13
<PAGE>

If the annuitant is not the owner, and the owner dies prior to the annuity
commencement date, a successor owner may surrender the policy at any time for
the amount of the adjusted policy value. If the successor owner is not the
deceased owner's spouse, however, the adjusted policy value must be
distributed: (1) within five years after the date of the deceased owner's
death, or (2) payments under an annuity payment option must begin no later than
one year after the deceased owner's death and must be made for the successor
owner's lifetime or for a period certain (so long as any period certain does
not exceed the successor owner's life expectancy).

Beneficiary. The beneficiary designation in the enrollment form will remain in
-----------
effect until changed. The owner may change the designated beneficiary by
sending written notice to PFL. The beneficiary's consent to such change is not
required unless the beneficiary was irrevocably designated or law requires
consent. (If an irrevocable beneficiary dies, the owner may then designate a
new beneficiary.) The change will take effect as of the date the owner signs
the written notice, whether or not the owner is living when the notice is
received by PFL. PFL will not be liable for any payment made before the written
notice is received. If more than one beneficiary is designated, and the owner
fails to specify their interests, they will share equally.

Death of Owner

Federal tax law requires that if any owner (including any joint owner or any
successor owner who has become a current owner) dies before the annuity
commencement date, then the entire value of the policy must generally be
distributed within five years of the date of death of such owner. Certain rules
apply where (1) the spouse of the deceased owner is the sole beneficiary, (2)
the owner is not a natural person and the primary annuitant dies or is changed,
or (3) any owner dies after the annuity commencement date. See "Certain Federal
Income Tax Consequences" for more information about these rules. Other rules
may apply to qualified policies.

Assignment

During the lifetime of the annuitant you may assign any rights or benefits
provided by the policy if your policy is a nonqualified policy. An assignment
will not be binding on PFL until a copy has been filed at its administrative
and service office. Your rights and benefits and those of the beneficiary are
subject to the rights of the assignee. PFL assumes no responsibility for the
validity or effect of any assignment. Any claim made under an assignment shall
be subject to proof of interest and the extent of the assignment. An assignment
may have tax consequences.

Unless you so direct by filing written notice with PFL, no beneficiary may
assign any payments under the policy before they are due. To the extent
permitted by law, no payments will be subject to the claims of any
beneficiary's creditors.

Ownership under qualified policies is restricted to comply with the Code.

Evidence of Survival

PFL reserves the right to require satisfactory evidence that a person is alive
if a payment is based on that person being alive. No payment will be made until
PFL receives such evidence.

Non-Participating

The policy will not share in PFL's surplus earnings; no dividends will be paid.

Amendments

No change in the policy is valid unless made in writing by PFL and approved by
one of PFL's officers. No registered representative has authority to change or
waive any provision of the policy.

14
<PAGE>

PFL reserves the right to amend the policies to meet the requirements of the
Code, regulations or published rulings. You can refuse such a change by giving
written notice, but a refusal may result in adverse tax consequences.

Employee and Agent Purchases

The policy may be acquired by an employee or registered representative of any
broker/dealer authorized to sell the policy or their spouse or minor children,
or by an officer, director, trustee or bona-fide full-time employee of PFL or
its affiliated companies or their spouse or minor children. In such a case, PFL
may credit an amount equal to a percentage of each premium payment to the
policy due to lower acquisition costs PFL experiences on those purchases. The
credit will be reported to the Internal Revenue Service as taxable income to
the employee or registered representative. PFL may offer certain employer
sponsored savings plans, in its discretion reduced fees and charges including,
but not limited to, the annual service charge, the surrender charges, the
mortality and expense risk fee and the administrative charge for certain sales
under circumstances which may result in savings of certain costs and expenses.
In addition, there may be other circumstances of which PFL is not presently
aware which could result in reduced sales or distribution expenses. Credits to
the policy or reductions in these fees and charges will not be unfairly
discriminatory against any owner.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

The following summary does not constitute tax advice. It is a general
discussion of certain of the expected federal income tax consequences of
investment in and distributions with respect to a policy, based on the Code, as
amended, proposed and final Treasury Regulations thereunder, judicial
authority, and current administrative rulings and practice. This summary
discusses only certain federal income tax consequences to "United States
Persons," and does not discuss state, local, or foreign tax consequences.
United States Persons means citizens or residents of the United States,
domestic corporations, domestic partnerships and trusts or estates that are
subject to United States federal income tax regardless of the source of their
income.

Tax Status of the Policy

The following discussion is based on the assumption that the policy qualifies
as an annuity contract for federal income tax purposes.

Distribution Requirements. The Code requires that nonqualified policies contain
-------------------------
specific provisions for distribution of policy proceeds upon the death of any
owner. In order to be treated as an annuity contract for federal income tax
purposes, the Code requires that such policies provide that if any owner dies
on or after the annuity commencement date and before the entire interest in the
policy has been distributed, the remaining portion must be distributed at least
as rapidly as under the method in effect on such owner's death. If any owner
dies before the annuity commencement date, the entire interest in the policy
must generally be distributed within 5 years after such owner's date of death
or be used to purchase an immediate annuity under which payments will begin
within one year of such owner's death and will be made for the life of the
beneficiary or for a period not extending beyond the life expectancy of the
"designated beneficiary" as defined in section 72(s) of the Code. However, if
upon such owner's death prior to the annuity commencement date, such owner's
surviving spouse becomes the sole new owner under the policy, then the policy
may be continued with the surviving spouse as the new owner. Under the policy,
the beneficiary is the designated beneficiary of an owner/annuitant and the
successor owner is the designated beneficiary of an owner who is not the
annuitant. If any owner is not a natural person, then for purposes of these
distribution requirements,

15
<PAGE>

the primary annuitant shall be treated as an owner and any death or change of
such primary annuitant shall be treated as the death of an owner. The
nonqualified policies contain provisions intended to comply with these
requirements of the Code. No regulations interpreting these requirements of the
Code have yet been issued and thus no assurance can be given that the
provisions contained in the policies satisfy all such Code requirements. The
provisions contained in the policies will be reviewed and modified if necessary
to assure that they comply with the Code requirements when clarified by
regulation or otherwise.

Diversification Requirements. Section 817(h) of the Code provides that in order
----------------------------
for a variable contract which is based on a segregated asset account to qualify
as an annuity contract under the Code, the investments made by such account
must be "adequately diversified" in accordance with Treasury regulations. The
Treasury regulations issued under Section 817(h) (Treas. Reg. (S)1.817-5) apply
a diversification requirement to each of the subaccounts. The separate account,
through its underlying funds and their portfolios, intends to comply with the
diversification requirements of the Treasury. PFL has entered into agreements
with each underlying fund company which requires the portfolios to be operated
in compliance with the Treasury regulations.

Owner Control. In certain circumstances, owners of variable annuity contracts
-------------
may be considered the owners, for federal income tax purposes, of the assets of
the separate account used to support their contracts. In those circumstances,
income and gains from the separate account assets would be includable in the
variable annuity contract owner's gross income. Several years ago, the IRS
stated in published rulings that a variable annuity contract owner will be
considered the owner of separate account assets if the contract owner possesses
incidents of ownership in those assets, such as the ability to exercise
investment control over the assets. 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 (i.e., you), 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 way of regulations or
rulings on the "extent to which policyholders may direct their investments to
particular subaccounts without being treated as owners of the underlying
assets."

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

Withholding. The portion of any distribution under a policy that is includable
-----------
in gross income will be subject to federal income tax withholding unless the
recipient of such distribution elects not to have federal income tax withheld.
Election forms will be provided at the time distributions are requested or
made. The withholding rate varies according to the type of distribution and the
owner's tax status. For qualified policies, "eligible rollover distributions"
from Section 401(a) plans, Section 403(a) annuities, and Section 403(b) tax-
sheltered annuities are subject to a mandatory federal income tax withholding
of 20%. An eligible rollover distribution is the taxable portion of any
distribution from such a plan, except certain distributions such as
distributions required by the Code or distributions in a specified annuity
form. The 20% withholding does not apply, however, if the owner chooses a
"direct rollover" from the plan to another tax-qualified plan or IRA. Different
withholding requirements may apply in the case of non-United States persons.

16
<PAGE>

Qualified Policies. The qualified policy is designed for use with several types
------------------
of tax-qualified retirement plans. The tax rules applicable to participants and
beneficiaries in tax-qualified retirement plans vary according to the type of
plan and the terms and conditions of the plan. 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; and in other specified circumstances. Some retirement plans
are subject to distribution and other requirements that are not incorporated
into the policies or our policy administration procedures. Owners, participants
and beneficiaries are responsible for determining that contributions,
distributions and other transactions with respect to the policies comply with
applicable law.

For qualified plans under Section 401(a), 403(a), 403(b), and 457, the Code
requires that distributions generally must commence no later than the later of
April 1 of the calendar year following the calendar year in which the owner (or
plan participant) (i) reaches age 70 1/2 or (ii) retires, and must be made in a
specified form or manner. If the plan participant is a "5 percent owner" (as
defined in the Code), distributions generally must begin no later than April 1
of the calendar year in which the owner (or plan participant) reaches age 70
1/2. Each owner is responsible for requesting distributions under the policy
that satisfy applicable tax rules.

PFL makes no attempt to provide more than general information about use of the
policy with the various types of retirement plans. Purchasers of policies for
use with any retirement plan should consult their legal counsel and tax adviser
regarding the suitability of the policy.

Individual Retirement Annuities. In order to qualify as a traditional
-------------------------------
individual retirement annuity under Section 408(b) of the Code, a policy must
contain certain provisions: (i) the owner must be the annuitant; (ii) the
policy generally is not transferable by the owner, e.g., the owner may not
designate a new owner, designate a contingent owner or assign the policy as
collateral security; (iii) the total premium payments for any calendar year may
not exceed $2,000, except in the case of a rollover amount or contribution
under Section 402(c), 403(a)(4), 403(b)(8) or 408(d)(3) of the Code; (iv)
annuity payments or withdrawals must begin no later than April 1 of the
calendar year following the calendar year in which the annuitant attains age 70
1/2; (v) an annuity payment option with a period certain that will guarantee
annuity payments beyond the life expectancy of the annuitant and the
beneficiary may not be selected; and (vi) certain payments of death benefits
must be made in the event the annuitant dies prior to the distribution of the
policy value. Policies intended to qualify as traditional individual retirement
annuities under Section 408(b) of the Code contain such provisions. Amounts in
the IRA (other than nondeductible contributions) are taxed when distributed
from the IRA. Distributions prior to age 59 1/2 (unless certain exceptions
apply) are subject to a 10% penalty tax.

No part of the funds for an individual retirement account (including a Roth
IRA) or annuity should be invested in a life insurance contract, but the
regulations thereunder allow such funds to be invested in an annuity contract
that provides a death benefit that equals the greater of the premiums paid or
the cash value for the contract. The policy provides an enhanced death benefit
that could exceed the amount of such a permissible death benefit, but it is
unclear to what extent such an enhanced death benefit could disqualify the
policy as an IRA. 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 an enhanced death benefit provision, such as the
provision in the policy, comports with IRA qualification requirements.

Roth Individual Retirement Annuities (Roth IRA). The Roth IRA, under Section
-----------------------------------------------
408A of the Code, contains many of the same provisions as a traditional IRA.
However, there are some differences. First, the contributions are not
deductible and must be made in cash or as a rollover or transfer from

17
<PAGE>

another Roth IRA or other IRA. A rollover from or conversion of an IRA to a
Roth IRA may be subject to tax and other special rules may apply to the
rollover or conversion and to distributions attributable thereto. You should
consult a tax adviser before combining any converted amounts with any other
Roth IRA contributions, including any other conversion amounts from other tax
years. The Roth IRA is available to individuals with earned income and whose
modified adjusted gross income is under $110,000 for single filers, $160,000
for married filing jointly, and $10,000 for married filing separately. The
amount per individual that may be contributed to all IRAs (Roth and
traditional) is $2,000. Secondly, the distributions are taxed differently. The
Roth IRA offers tax-free distributions when made 5 tax years after the first
contribution to any Roth IRA of the individual and made after attaining age 59
1/2, to pay for qualified first time homebuyer expenses (lifetime maximum of
$10,000) or due to death or disability. All other distributions are subject to
income tax when made from earnings and may be subject to a premature withdrawal
penalty tax unless an exception applies. Unlike the traditional IRA, there are
no minimum required distributions during the owner's lifetime; however,
required distributions at death are generally the same.

Section 403(b) Plans. Under Section 403(b) of the Code, payments made by public
--------------------
school systems and certain tax exempt organizations to purchase policies for
their employees are excludable from the gross income of the employee, subject
to certain limitations. However, such payments may be subject to FICA (Social
Security) taxes. The policy includes a death benefit that in some cases may
exceed the greater of the premium payments or the policy value. The death
benefit could be characterized as an incidental benefit, the amount of which is
limited in any tax-sheltered annuity under Section 403(b). Because the death
benefit may exceed this limitation, employers using the policy in connection
with such plans should consult their tax adviser. Additionally, in accordance
with the requirements of the Code, Section 403(b) annuities generally may not
permit distribution of (i) elective contributions made in years beginning after
December 31, 1988, and (ii) earnings on those contributions and (iii) earnings
on amounts attributed to elective contributions held as of the end of the last
year beginning before January 1, 1989. Distributions of such amounts will be
allowed only upon the death of the employee, on or after attainment of age
591/2, separation from service, disability, or financial hardship, except that
income attributable to elective contributions may not be distributed in the
case of hardship.

Corporate Pension and Profit-Sharing Plans and H.R. 10 Plans. Sections 401(a)
------------------------------------------------------------
and 403(a) of the Code permit corporate employers to establish various types of
retirement plans for employees and self-employed individuals to establish
qualified plans for themselves and their employees. Such retirement plans may
permit the purchase of the policies to accumulate retirement savings. Adverse
tax consequences to the plan, the participant or both may result if the policy
is assigned or transferred to any individual as a means to provide benefit
payments. The policy includes a death benefit that in some cases may exceed the
greater of the premium payments or the policy value. The death benefit could be
characterized as an incidental benefit, the amount of which is limited in a
pension or profit sharing plan. Because the death benefit may exceed this
limitation, employers using the policy in connection with such plans should
consult their tax adviser.

Deferred Compensation Plans. Section 457 of the Code, while not actually
---------------------------
providing for a qualified plan as that term is normally used, provides for
certain deferred compensation plans with respect to service for state
governments, local governments, political sub-divisions, agencies,
instrumentalities and certain affiliates of such entities, and tax exempt
organizations. The policies can be used with such plans. Under such plans a
participant may specify the form of investment in which his or her
participation will be made. For non-governmental Section 457 plans, all such
investments, however, are owned by, and are subject to, the claims of the
general creditors of the sponsoring employer. Depending on the terms of the
particular plan, a non-government employer may be entitled to draw on deferred
amounts for purposes unrelated to its Section 457 plan obligations. In general,
all amounts received under a Section 457 plan are taxable and are subject to
federal income tax withholding as wages.

18
<PAGE>

Non-natural Persons. Pursuant to Section 72(u) of the Code, an annuity contract
-------------------
held by a taxpayer other than a natural person generally will not be treated as
an annuity contract under the Code; accordingly, an owner who is not a natural
person will recognize as ordinary income for a taxable year the excess of (i)
the sum of the policy value as of the close of the taxable year and all
previous distributions under the policy over (ii) the sum of the premium
payments paid for the taxable year and any prior taxable year and the amounts
includable in gross income for any prior taxable year with respect to the
policy. For these purposes, the policy value at year-end may have to be
increased by any positive excess interest adjustment, which could result from a
full surrender at such time. There is, however, no definitive guidance on the
proper tax treatment of excess interest adjustments, and the owner should
contact a competent tax adviser with respect to the potential tax consequences
of an excess interest adjustment. Notwithstanding the preceding sentences in
this paragraph, Section 72(u) of the Code does not apply to (i) a policy where
the nominal owner is not a natural person but the beneficial owner of which is
a natural person, (ii) a policy acquired by the estate of a decedent by reason
of such decedent's death, (iii) a qualified policy (other than one qualified
under Section 457) or (iv) a single-payment annuity where the annuity
commencement date is no later than one year from the date of the single premium
payment; instead, such policies are taxed as described above under the heading
"Taxation of Annuities."

Taxation of PFL

PFL at present is taxed as a life insurance company under part I of Subchapter
L of the Code. The separate account is treated as part of PFL and, accordingly,
will not be taxed separately as "regulated investment companies" under
Subchapter M of the Code. PFL does not expect to incur any federal income tax
liability with respect to investment income and net capital gains arising from
the activities of the separate account retained as part of the reserves under
the policy. Based on this expectation, it is anticipated that no charges will
be made against the separate account for federal income taxes. If, in future
years, any federal income taxes are incurred by PFL with respect to the
separate account, PFL may make a charge to that account.

INVESTMENT EXPERIENCE

A "net investment factor" is used to determine the value of accumulation units
and annuity units, and to determine annuity payment rates.

Accumulation Units

Allocations of a premium payment directed to a subaccount are credited in the
form of accumulation units. Each subaccount has a distinct accumulation unit
value. The number of units credited is determined by dividing the premium
payment or amount transferred to the subaccount by the accumulation unit value
of the subaccount as of the end of the valuation period during which the
allocation is made. For each subaccount, the accumulation unit value for a
given business day is based on the net asset value of a share of the
corresponding portfolio of the underlying funds less any applicable charges or
fees.

Upon allocation to the selected subaccount, premium payments are converted into
accumulation units of the subaccount. The number of accumulation units to be
credited is determined by dividing the dollar amount allocated to each
subaccount by the value of an accumulation unit for that subaccount as next
determined after the premium payment is received at the administrative and
service office or, in the case of the initial premium payment, when the
enrollment form is completed, whichever is later. The value of an accumulation
unit for each subaccount was arbitrarily established at $1 at the inception of
each subaccount. Thereafter, the value of an accumulation unit is determined as
of the close of trading on each day the New York Stock Exchange is open for
business.

19
<PAGE>

For the separate account, an index (the "net investment factor") which measures
the investment performance of a subaccount during a valuation period is used to
determine the value of an accumulation unit for the next subsequent valuation
period. The net investment factor may be greater or less than or equal to one;
therefore, the value of an accumulation unit may increase, decrease or remain
the same from one valuation period to the next. You bear this investment risk.
The net investment performance of a subaccount and deduction of certain charges
affect the accumulation unit value.

The net investment factor for any subaccount for any valuation period is
determined by dividing (a) by (b) and subtracting (c) from the result, where:

(a) is the net result of:
(1) the net asset value per share of the shares held in the subaccount
determined at the end of the current valuation period, plus
(2) the per share amount of any dividend or capital gain distribution made
with respect to the shares held in the subaccount if the ex-dividend
date occurs during the current valuation period, plus or minus
(3) a per share credit or charge for any taxes determined by PFL to have
resulted during the valuation period from the investment operations of
the subaccount;
(b) is the net asset value per share of the shares held in the subaccount
determined as of the end of the immediately preceding valuation period.
(c) is the charge for mortality and expense risk during the valuation period,
equal on an annual basis to 1.40% (for each of the 5% Annually Compounding
Death Benefit, the Greater of 5% Annually Compounding through age 80 Death
Benefit or Annual Step-Up through age 80 Death Benefit, and the Monthly
Step-Up through age 80 Death Benefit) and 1.25% (for the Return of Premium
Death Benefit) of the daily net asset value of the subaccount, plus the
0.15% administrative charge.

Illustration of Separate Account Accumulation Unit Value Calculations
(Assumes 5% Annually Compounding Death Benefit)
Formula and Illustration for Determining the Net Investment Factor

Net Investment Factor = (A + B - C) - E
-----------
D

<TABLE>
<C> <S> <C>
Where: A = The net asset value of an underlying
fund share as of the end of the
current valuation period.
Assume A = $11.57
B = The per share amount of any dividend
or capital gains distribution since
the end of the immediately preceding
valuation period.
Assume B = 0
C = The per share charge or credit for
any taxes reserved for at the end of
the current valuation period.
Assume C = 0
D = The net asset value of an underlying
fund share at the end of the
immediately preceding valuation
period.
Assume D = $11.40
E = The daily deduction for the
mortality and expense risk fee and
the administrative charge, which
totals 1.55% on an annual basis. On
a daily basis, E equals .0000421409.
</TABLE>

Then, the net investment factor = (11.57 + 0-0)-.0000421409 = Z = 1.0148701398
-------------
(11.40)

20
<PAGE>

Formula and Illustration for Determining Accumulation Unit Value

Accumulation Unit Value = A * B

<TABLE>
<C> <S> <C>
Where: A = The accumulation unit value
for the immediately
preceding valuation period.
Assume = $X
B = The net investment factor
for the current valuation
period.
Assume = Y
</TABLE>

Then, the accumulation unit value = $X * Y = $Z

Annuity Unit Value and Annuity Payment Rates

For the separate account, the amount of variable annuity payments will vary
with annuity unit values. Annuity unit values rise if the net investment
performance of the subaccount exceeds the assumed interest rate of 5% annually.
Conversely, annuity unit values fall if the net investment performance of the
subaccount is less than the assumed rate. The value of a variable annuity unit
in each subaccount was established at $1.00 on the date operations began for
that subaccount. For the separate account, the value of a variable annuity unit
on any subsequent business day is equal to (a) multiplied by (b) multiplied by
(c), where:
(a) is the variable annuity unit value on the immediately preceding
business day;
(b) is the net investment factor for the valuation period; and
(c) is the investment result adjustment factor for the valuation period.

The investment result adjustment factor for the valuation period is the product
of discount factors of .99986634 per day to recognize the 5% effective annual
assumed investment return. The valuation period is the period from the close of
the immediately preceding business day to the close of the current business
day.

The dollar amount of subsequent variable annuity payments will depend upon
changes in applicable annuity unit values.

The annuity payment rates vary according to the annuity option elected and the
sex and adjusted age of the annuitant at the annuity commencement date. The
policy also contains a table for determining the adjusted age of the annuitant.

Illustration of Calculations for Annuity Unit Value
and Variable Annuity Payments

Formula and Illustration for Determining Annuity Unit Value

Annuity Unit Value = A * B * C

<TABLE>
<C> <S> <C>
Where: A = annuity unit value for the
immediately preceding
valuation period.
Assume = $X
B = Net investment factor for
the valuation period for
which the annuity unit value
is being calculated.
Assume = Y
C = A factor to neutralize the
assumed interest rate of 5%
built into the Annuity
Tables used.
Assume = Z
</TABLE>

21
<PAGE>

Then, the annuity unit value is:

$X * Y * Z = $Q

Formula and Illustration for Determining Amount of
First Monthly Variable Annuity Payment

First monthly variable annuity payment = A * B
------
$1,000

<TABLE>
<C> <S> <C>
Where: A = The adjusted policy
value as of the annuity
commencement date.
Assume = $X
B = The Annuity purchase rate
per $1,000 of adjusted
policy value based upon
the option selected, the
sex and adjusted age of
the annuitant according to
the tables contained in
the policy.
Assume = $Y
</TABLE>

Then, the first monthly variable annuity payment = $X * $Y = $Z
-------
1,000

Formula and Illustration for Determining the Number of Annuity Units
Represented by Each Monthly Variable Annuity Payment

Number of annuity units = A
-
B

<TABLE>
<C> <S> <C>
Where: A = The dollar amount of the
first monthly variable
annuity payment.
Assume = $X
B = The annuity unit value for the
valuation date on which the
first monthly payment is due.
Assume = $Y
</TABLE>

Then, the number of annuity units = $X = Z
--
$Y

FAMILY INCOME PROTECTOR--ADDITIONAL INFORMATION

The amounts shown below are hypothetical guaranteed minimum monthly payment
amounts under the "family income protector" for a $100,000 premium when annuity
payments do not begin until the rider anniversary indicated in the left-hand
column. These figures assume the following:
. there were no subsequent premium payments or withdrawals;
. there were no premium taxes;
. the $100,000 premium is subject to the family income protector;
. the annuitant is (or both annuitants are) 60 years old when the rider is
issued;
. the annual growth rate is 6.0% (once established, an annual growth rate will
not change during the life of the family income protector rider); and
. there was no upgrade of the minimum annuitization value.

Six different annuity payment options are illustrated: a male annuitant, a
female annuitant and a joint and survivor annuity, each on a Life Only and a
Life with 10-Year Certain basis. The figures below, which are the amount of the
first monthly payment, are based on an assumed investment return of 3%.
Subsequent payments will never be less than the amount of the first payment
(although subsequent payments are calculated using a 5% assumed investment
return).

22
<PAGE>

<TABLE>
<CAPTION>
Life Only = Life Annuity with No Life 10 = Life Annuity with 10 Years
Period Certain Certain

--------------------------------------------------------------------------------------------
Rider Anniversary at
Exercise Date Male Female Joint & Survivor
--------------------------------------------------------------------------------------------
Life Only Life 10 Life Only Life 10 Life Only Life 10
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
10 (age 70) $1,135 $1,067 $ 976 $ 949 $ 854 $ 852
--------------------------------------------------------------------------------------------
15 1,833 1,634 1,562 1,469 1,332 1,318
--------------------------------------------------------------------------------------------
20 (age 80) 3,049 2,479 2,597 2,286 2,145 2,078
--------------------------------------------------------------------------------------------
</TABLE>

This hypothetical illustration should not be deemed representative of past or
future performance of any underlying variable investment option.

Withdrawals will affect the minimum annuitization value as follows: Each
policy year, withdrawals up to the limit of the total free amount (the minimum
annuitization value on the last policy anniversary multiplied by the annual
growth rate) reduce the minimum annuitization value on a dollar-for-dollar
basis. Withdrawals over this free amount will reduce the minimum annuitization
value on a pro rata basis by an amount equal to the minimum annuitization
value immediately prior to the excess withdrawal multiplied by the percentage
reduction in the policy value resulting from the excess withdrawal. The free
amount will always be a relatively small fraction of the minimum annuitization
value.

Examples of the effect of withdrawals on the minimum annuitization value are
as follows:

<TABLE>
<S> <C>
------------------------------------------------------------------------------------------------------
Example 1
------------------------------------------------------------------------------------------------------
Assumptions
------------------------------------------------------------------------------------------------------
. minimum annuitization value on last policy anniversary: $10,000
------------------------------------------------------------------------------------------------------
. minimum annuitization value at time of distribution: $10,500
------------------------------------------------------------------------------------------------------
. policy value at time of distribution: $15,000
------------------------------------------------------------------------------------------------------
. distribution amount: $ 500
------------------------------------------------------------------------------------------------------
. prior distribution in current policy year: None
------------------------------------------------------------------------------------------------------
Calculations
------------------------------------------------------------------------------------------------------
. maximum annual free amount: $10,000 X 6% = $600
------------------------------------------------------------------------------------------------------
. policy value after distribution: $15,000-$500 = $14,500
------------------------------------------------------------------------------------------------------
. minimum annual value after distribution: $10,500-$500 = $10,000
------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------
Example 2
------------------------------------------------------------------------------------------------------
Assumptions
------------------------------------------------------------------------------------------------------
. minimum annuitization value on last policy anniversary: $10,000
------------------------------------------------------------------------------------------------------
. minimum annuitization value at time of distribution: $10,500
------------------------------------------------------------------------------------------------------
. policy value at time of distribution: $15,000
------------------------------------------------------------------------------------------------------
. distribution amount: $ 1,500
------------------------------------------------------------------------------------------------------
. prior distribution in current policy year: $ 1,000
------------------------------------------------------------------------------------------------------
Calculations
------------------------------------------------------------------------------------------------------
. maximum annual free amount: $ 0.0
------------------------------------------------------------------------------------------------------
(prior distributions have exceeded the current year free amount of $600 [$10,000 X 6% = $600])
------------------------------------------------------------------------------------------------------
. policy value after distribution: $15,000-$1,500 = $13,500
------------------------------------------------------------------------------------------------------
(since the policy value is reduced 10% ($1,500/$15,000), the minimum annuitization value is also
reduced 10%)
------------------------------------------------------------------------------------------------------
. minimum annual value after distribution: $10,500-(10% X $10,500) = $9,450
------------------------------------------------------------------------------------------------------
</TABLE>

23
<PAGE>

<TABLE>
<S> <C>
----------------------------------------------------------------------------------------------------
Example 3
----------------------------------------------------------------------------------------------------
Assumptions
----------------------------------------------------------------------------------------------------
. minimum annuitization value on last policy anniversary: $10,000
----------------------------------------------------------------------------------------------------
. minimum annuitization value at time of distribution: $10,500
----------------------------------------------------------------------------------------------------
. policy value at time of distribution: $ 7,500
----------------------------------------------------------------------------------------------------
. distribution amount: $ 1,500
----------------------------------------------------------------------------------------------------
. prior distribution in current policy year: $ 1,000
----------------------------------------------------------------------------------------------------
Calculations
----------------------------------------------------------------------------------------------------
. maximum annual free amount: $ 0.0
----------------------------------------------------------------------------------------------------
(prior distributions have exceeded the current year free amount of $600 [$10,000 X 6% = $600])
----------------------------------------------------------------------------------------------------
. policy value after distribution: $ 7,500-$1,500 = $6,000
----------------------------------------------------------------------------------------------------
(since the policy value is reduced 20% ($1,500/$7,500), the minimum annuitization value is also
reduced 20%)
----------------------------------------------------------------------------------------------------
. minimum annual value after distribution: $10,500-(20% X $10,500) = $8,400
----------------------------------------------------------------------------------------------------
</TABLE>

The amount of the first payment provided by the family income protector will be
determined by multiplying each $1,000 of minimum annuitization value by the
applicable annuity factor shown on Schedule I of the family income protector
rider. The applicable annuity factor depends upon the annuitant's (and joint
annuitant's, if any) sex (or without regard to gender if required by law), age,
and the family income protector payment option selected and is based on a
guaranteed interest rate of 3% and the "1983 Table a" mortality table with
projection using projection Scale G factors, assuming a maturity date in the
year 2000. Subsequent payments will be calculated as described in the family
income protector rider using a 5% assumed investment return. Subsequent
payments may fluctuate annually in accordance with the investment performance
of the annuity subaccounts. However, subsequent payments are guaranteed to
never be less than the initial payment.

The stabilized payment on each subsequent policy anniversary after
annuitization using the family income protector will equal the greater of the
initial payment or the payment supportable by the annuity units in the selected
subaccounts. The supportable payment is equal to the number of variable annuity
units in the selected subaccounts multiplied by the variable annuity unit
values in those subaccounts on the date the payment is made. The variable
annuity unit values used to calculate the supportable payment will assume a 5%
assumed investment return. If the supportable payment at any payment date
during a policy year is greater than the stabilized payment for that policy
year, the excess will be used to purchase additional annuity units. Conversely,
if the supportable payment at any payment date during a policy year is less
than the stabilized payment for that policy year, there will be a reduction in
the number of annuity units credited to the policy to fund the deficiency. In
the case of a reduction, you will not participate as fully in the future
investment performance of the subaccounts you selected since fewer annuity
units are credited to your policy. Purchases and reductions will be allocated
to each subaccount on a proportionate basis.

PFL bears the risk that it will need to make payments if all annuity units have
been used in an attempt to maintain the stabilized payment at the initial
payment level. In such an event, PFL will make all future payments equal to the
initial payment. Once all the annuity units have been used, the amount of your
payment will not increase or decrease and will not depend upon the performance
of any subaccounts. To compensate PFL for this risk, a stabilized payment fee
will be deducted.

24
<PAGE>

HISTORICAL PERFORMANCE DATA

Money Market Yields

PFL may from time to time disclose the current annualized yield of the Endeavor
Money Market Subaccount, which invests in the Endeavor Money Market Portfolio,
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 Endeavor 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 and
income other than investment income) at the end of the 7-day period in the
value of a hypothetical account having a balance of 1 unit of the Endeavor
Money Market Subaccount at the beginning of the 7-day 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 (i) net income from the
portfolio attributable to the hypothetical account; and (ii) charges and
deductions imposed under a policy that are attributable to the hypothetical
account. The charges and deductions include the per unit charges for the
hypothetical account for (i) the administrative charges and (ii) the mortality
and expense risk fee. Current yield will be calculated according to the
following formula:

Current Yield = ((NCS * ES)/UV) * (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 and income other than investment income) for the 7-day
period attributable to a hypothetical account having a balance of 1
subaccount unit.
ES= Per unit expenses of the subaccount for the 7-day period.
UV= The unit value on the first day of the 7-day period.

Because of the charges and deductions imposed under a policy, the yield for the
Endeavor Money Market Subaccount will be lower than the yield for the Endeavor
Money Market Portfolio. The yield calculations do not reflect the effect of any
premium taxes that may be applicable to a particular policy.

PFL may also disclose the effective yield of the Endeavor Money Market
Subaccount for the same 7-day period, determined on a compounded basis. The
effective yield is calculated by compounding the base period return according
to the following formula:

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

25
<PAGE>

yield is affected by changes in interest rates on money market securities,
average portfolio maturity of the Endeavor Money Market Portfolio, the types
and quality of portfolio securities held by the Endeavor Money Market Portfolio
and its operating expenses. For the seven days ended December 31, 1999, the
yield of the Endeavor Money Market Subaccount was 3.84%, and the effective
yield was 3.91% for the 5% Annually Compounding Death Benefit, the Greater of
5% Annually Compounding through age 80 Death Benefit or Annual Step-Up through
age 80 Death Benefit, and the Monthly Step-Up through age 80 Death Benefit. For
the seven days ended December 31, 1999, the yield of the Endeavor Money Market
Subaccount was 3.99%, and the effective yield was 4.07% for the Return of
Premium Death Benefit.

Other Subaccount Yields

PFL may from time to time advertise or disclose the current annualized yield of
one or more of the subaccounts (except the Endeavor Money Market Subaccount)
for 30-day periods. The annualized yield of a subaccount refers to income
generated by the subaccount over a specific 30-day period. Because the yield is
annualized, the yield generated by a subaccount during the 30-day period is
assumed to be generated each 30-day period over a 12-month period. The yield is
computed by: (i) dividing the net investment income of the subaccount less
subaccount expenses for the period, by (ii) the maximum offering price per unit
on the last day of the period times the daily average number of units
outstanding for the period, (iii) compounding that yield for a 6-month period,
and (iv) multiplying that result by 2. Expenses attributable to the subaccount
include (i) the administrative charges and (ii) the mortality and expense risk
fee. The 30-day yield is calculated according to the following formula:

Yield = 2 * ((((NI - ES)/(U - UV)) + 1)/6/ - 1)

Where:
NI= Net investment income of the subaccount for the 30-day period
attributable to the subaccount's unit.
ES= Expenses of the subaccount for the 30-day period.
U= The average number of units outstanding.
UV= The unit value at the close (highest) of the last day in the 30-day
period.

Because of the charges and deductions imposed by the separate account, the
yield for a subaccount will be lower than the yield for its corresponding
portfolio. The yield calculations do not reflect the effect of any premium
taxes that may be applicable to a particular policy.

The yield on amounts held in the subaccounts 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 types and quality of
its investments and its operating expenses affect a subaccount's actual yield.

Total Returns

PFL may from time to time also advertise or disclose total returns for one or
more of the subaccounts for various periods of time. One of the periods of time
will include the period measured from the date the subaccount commenced
operations. When a subaccount has been in operation for 1, 5 and 10 years,
respectively, the total return for these periods will be provided. Total
returns for other periods of time may from time to time also be disclosed.
Total returns represent the average annual compounded rates of return that
would equate an initial investment of $1,000 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.

26
<PAGE>

Total returns will be calculated using subaccount unit values which PFL
calculates on each business day based on the performance of the separate
account's underlying portfolio and the deductions for the mortality and expense
risk fee and the administrative charges. Total return calculations will reflect
the effect of surrender charges that may be applicable to a particular period.
The total return will then be calculated according to the following formula:

P (1+T)/N/ = ERV

Where:
T= The average annual total return net of subaccount 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.

Other Performance Data

PFL may from time to time also disclose average annual total returns in a non-
standard format in conjunction with the standard format described above. The
non-standard format will be identical to the standard format except that the
surrender charge percentage will be assumed to be 0%.

PFL may from time to time also disclose cumulative total returns in conjunction
with the standard format described above. The cumulative returns will be
calculated using the following formula.

CTR = (ERV / P)-1

Where:
CTR= The cumulative total return net of subaccount recurring charges for the
period.
ERV= The ending redeemable value of the hypothetical investment at the end of
the period.
P= A hypothetical initial payment of $1,000.

All non-standard performance data will only be advertised if the standard
performance data for the same period, as well as for the required period, is
also disclosed.

Adjusted Historical Performance Data

From time to time, sales literature or advertisements may quote average annual
total returns for periods prior to the date a particular subaccount commenced
operations. Such performance information for the subaccounts will be calculated
based on the performance of the various portfolios and the assumption that the
subaccounts were in existence for the same periods as those indicated for the
portfolios, with the level of policy charges that are currently in effect.

27
<PAGE>

Past Performance for the Target Account

<TABLE>
<S> <C> <C> <C>
--------------------------------------------------------------------------------
Standard Average Annual Total Returns
--------------------------------------------------------------------------------
5% Annually Compounding Death Benefit or Double Enhanced Death Benefit*
(Total Separate Account Annual Expenses: 1.55%)
--------------------------------------------------------------------------------
Inception
of the
1 Year Subaccount Subaccount
Ended to Inception
Subaccount 12/31/99 12/31/99 Date
--------------------------------------------------------------------------------
The Dow/SM/ Target 5 (July Series) (19.68%) (6.24%) July 1, 1998
--------------------------------------------------------------------------------
Return of Premium Death Benefit*
(Total Separate Account Annual Expenses: 1.40%)
--------------------------------------------------------------------------------
Inception
of the
1 Year Subaccount Subaccount
Ended to Inception
Subaccount 12/31/99 12/31/99 Date
--------------------------------------------------------------------------------
The Dow/SM/ Target 5 (July Series) (19.56%) (6.09%) July 1, 1998
--------------------------------------------------------------------------------
</TABLE>

PUBLISHED RATINGS

PFL may from time to time publish in advertisements, sales literature and
reports to owners, the ratings and other information assigned to it by one or
more independent rating organizations such as A.M. Best Company, Standard &
Poor's Insurance Ratings Services, Moody's Investors Service and Duff & Phelps
Credit Rating Co. The purpose of the ratings is to reflect the financial
strength and/or claims-paying ability of PFL. The ratings should not be
considered as bearing on the safety or investment performance of assets held in
the separate account or of the safety or riskiness of an investment in the
separate account. Each year the A.M. Best Company reviews the financial status
of thousands of insurers, culminating in the assignment of Best's Ratings.
These ratings reflect their current opinion of the relative financial strength
and operating performance of an insurance company in comparison to the norms of
the life/health insurance industry. In addition, the claims-paying ability of
PFL as measured by Standard & Poor's Insurance Ratings Services, Moody's
Investors Service or Duff & Phelps Credit Rating Co. may be referred to in
advertisements or sales literature or in reports to owners. These ratings are
opinions of an operating insurance company's financial capacity to meet the
obligations of its insurance policies in accordance with their terms. Claims-
paying ability ratings do not refer to an insurer's ability to meet non-policy
obligations (i.e., debt/commercial paper).

STATE REGULATION OF PFL

PFL is subject to the laws of Iowa governing insurance companies and to
regulation by the Iowa Division of Insurance. An annual statement in a
prescribed form is filed with the Division of Insurance each year covering the
operation of PFL for the preceding year and its financial condition as of the
end of such year. Regulation by the Division of Insurance includes periodic
examination to determine PFL's contract liabilities and reserves so that the
Division may determine the items are correct. PFL's books and accounts are
subject to review by the Division of Insurance at all times and a full

28
<PAGE>

examination of its operations is conducted periodically by the National
Association of Insurance Commissioners. In addition, PFL is subject to
regulation under the insurance laws of other jurisdictions in which it may
operate.

ADMINISTRATION

PFL performs administrative services for the policies. These services include
issuance of the policies, maintenance of records concerning the policies, and
certain valuation services.

RECORDS AND REPORTS

All records and accounts relating to the separate account will be maintained by
PFL. As presently required by the 1940 Act, as amended, and regulations
promulgated thereunder, PFL will mail to all owners at their last known address
of record, at least annually, reports containing such information as may be
required under that Act or by any other applicable law or regulation. Owners
will also receive confirmation of each financial transaction and any other
reports required by law or regulation.

DISTRIBUTION OF THE POLICIES

The policies are offered to the public through brokers licensed under the
federal securities laws and state insurance laws. The offering of the policies
is continuous and PFL does not anticipate discontinuing the offering of the
policies, however, PFL reserves the right to do so.

AFSG Securities Corporation, an affiliate of PFL, is the principal underwriter
of the policies and may enter into agreements with broker-dealers for the
distribution of the policies. During 1999 and 1998 the amount paid to AFSG
Securities Corporation was $25,271,316.00 and $13,075,039.78, respectively.
Prior to April 30, 1998, AEGON USA Securities, Inc. (also an affiliate of PFL)
was the principal underwriter. During 1998 and 1997, the amount paid to AEGON
USA Securities, Inc. and/or the broker-dealers for their services was
$8,891,105.79 and $29,678,498, respectively.

VOTING RIGHTS

To the extent required by law, PFL will vote the underlying funds' shares held
by the separate account at special shareholder meetings of the underlying funds
in accordance with instructions received from persons having voting interests
in the portfolios, although none of the underlying funds hold regular annual
shareholder meetings. If, however, the 1940 Act or any regulation thereunder
should be amended or if the present interpretation thereof should change, and
as a result PFL determines that it is permitted to vote the underlying funds
shares in its own right, it may elect to do so.

Before the annuity commencement date, you hold the voting interest in the
selected portfolios. The number of votes that you have the right to instruct
will be calculated separately for each subaccount. The number of votes that you
have the right to instruct for a particular subaccount will be determined by
dividing your policy value in the subaccount by the net asset value per share
of the corresponding portfolio in which the subaccount invests. Fractional
shares will be counted.

After the annuity commencement date, the person receiving annuity payments has
the voting interest, and the number of votes decreases as annuity payments are
made and as the reserves for the policy decrease. The person's number of votes
will be determined by dividing the reserve for the policy allocated to the
applicable subaccount by the net asset value per share of the corresponding
portfolio. Fractional shares will be counted.

29
<PAGE>

The number of votes that you or the person receiving income payments has the
right to instruct will be determined as of the date established by the
underlying fund for determining shareholders eligible to vote at the meeting of
the underlying fund. PFL will solicit voting instructions by sending you, or
other persons entitled to vote, written requests for instructions prior to that
meeting in accordance with procedures established by the underlying fund.
Portfolio shares as to which no timely instructions are received and shares
held by PFL in which you, or other persons entitled to vote, have no beneficial
interest will be voted in proportion to the voting instructions that are
received with respect to all policies participating in the same subaccount.

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

OTHER PRODUCTS

PFL makes other variable annuity policies available that may also be funded
through the separate account. These variable annuity policies may have
different features, such as different investment options or charges.

CUSTODY OF ASSETS

PFL holds assets of each of the subaccounts. The assets of each of the
subaccounts are segregated and held separate and apart from the assets of the
other subaccounts and from PFL's general account assets. PFL maintains records
of all purchases and redemptions of shares of the underlying funds held by each
of the subaccounts. Additional protection for the assets of the separate
account is afforded by PFL's fidelity bond, presently in the amount of
$5,000,000, covering the acts of officers and employees of PFL.

LEGAL MATTERS

Sutherland Asbill & Brennan LLP, of Washington D.C. has provided legal advice
to PFL relating to certain matters under the federal securities laws applicable
to the issue and sale of the policies.

INDEPENDENT AUDITORS

The statutory-basis financial statements and schedules of PFL as of December
31, 1999 and 1998, and for each of the three years in the period ended December
31, 1999, and the financial statements of certain subaccounts of PFL Endeavor
VA Separate Account, which are available for investment by The Endeavor
Variable Annuity policyowners as of December 31, 1999, and for each of the two
years in the period then ended, included in this Statement of Additional
Information have been audited by Ernst & Young LLP, Independent Auditors, 801
Grand Avenue, Suite 3400, Des Moines, Iowa 50309.

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 SAI. Not all
of the information set forth in the Registration Statement, amendments and
exhibits thereto has been included in the prospectus or this SAI. Statements
contained in the prospectus and this SAI 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.

30
<PAGE>

FINANCIAL STATEMENTS

The values of your interest in the separate account will be affected solely by
the investment results of the selected subaccount(s). Financial statements of
certain subaccounts of The PFL Endeavor VA Separate Account, which are
available for investment by the PFL Endeavor Variable Annuity contract owners,
are contained herein. The statutory-basis financial statements of PFL, which
are included in this SAI, should be considered only as bearing on the ability
of PFL to meet its obligations under the policies. They should not be
considered as bearing on the investment performance of the assets held in the
separate account.
<PAGE>

Financial Statements--Statutory Basis

PFL Life Insurance Company

Years ended December 31, 1999, 1998 and 1997
with Report of Independent Auditors
<PAGE>

PFL Life Insurance Company

Financial Statements--Statutory Basis

Years ended December 31, 1999, 1998 and 1997

Contents

<TABLE>
<S> <C>
Report of Independent Auditors.............................................. 1
Audited Financial Statements
Balance Sheets--Statutory Basis........................................... 3
Statements of Operations--Statutory Basis................................. 5
Statements of Changes in Capital and Surplus--Statutory Basis............. 6
Statements of Cash Flows--Statutory Basis................................. 7
Notes to Financial Statements--Statutory Basis............................ 9
Statutory-Basis Financial Statement Schedules
Summary of Investments--Other Than Investments in Related Parties......... 28
Supplementary Insurance Information....................................... 29
Reinsurance............................................................... 31
</TABLE>
<PAGE>

[LETTERHEAD OF ERNST & YOUNG LLP APPEARS HERE]

Report of Independent Auditors

The Board of Directors
PFL Life Insurance Company

We have audited the accompanying statutory-basis balance sheets of PFL Life
Insurance Company, an indirect wholly-owned subsidiary of AEGON N.V., as of
December 31, 1999 and 1998, and the related statutory-basis statements of
operations, changes in capital and surplus, and cash flows for each of the
three years in the period ended December 31, 1999. Our audits also included
the accompanying statutory-basis financial statement schedules required by
Article 7 of Regulation S-X. These financial statements and schedules are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements and schedules based on our audits.

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

As described in Note 1 to the financial statements, the Company presents its
financial statements in conformity with accounting practices prescribed or
permitted by the Insurance Division, Department of Commerce, of the State of
Iowa, which practices differ from accounting principles generally accepted in
the United States. The variances between such practices and accounting
principles generally accepted in the United States also are described in Note
1. The effects on the financial statements of these variances are not
reasonably determinable but are presumed to be material.

In our opinion, because of the effect of the matter described in the preceding
paragraph, the financial statements referred to above do not present fairly,
in conformity with accounting principles generally accepted in the United
States, the financial position of PFL Life Insurance Company at December 31,
1999 and 1998, or the results of its operations or its cash flows for each of
the three years in the period ended December 31, 1999.

1
<PAGE>

However, in our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of PFL Life Insurance
Company at December 31, 1999 and 1998, and the results of its operations and
its cash flows for each of the three years in the period ended December 31,
1999, in conformity with accounting practices prescribed or permitted by the
Insurance Division, Department of Commerce, of the State of Iowa. Also, in our
opinion, the related financial statement schedules, when considered in
relation to the basic statutory-basis financial statements taken as a whole,
present fairly in all material respects the information set forth therein.

/s/ Ernst & Young LLP

Des Moines, Iowa
February 18, 2000

2
<PAGE>

PFL Life Insurance Company

Balance Sheets--Statutory Basis
(Dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
December 31
1999 1998
----------- ----------
<S> <C> <C>
Admitted Assets
Cash and invested assets:
Cash and short-term investments........................ $ 53,695 $ 83,289
Bonds.................................................. 4,892,156 4,822,442
Stocks:
Preferred............................................ 17,074 14,754
Common (cost: 1999--$61,813; 1998--$34,731).......... 71,658 49,448
Affiliated entities (cost: 1999--$10,318; 1998--
$8,060)............................................. 6,764 5,613
Mortgage loans on real estate.......................... 1,339,202 1,012,433
Real estate, at cost less accumulated depreciation
($10,891 in 1999; $9,500 in 1998):
Home office properties............................... 7,829 8,056
Properties acquired in satisfaction of debt.......... 16,336 11,778
Investment properties................................ 33,707 44,325
Policy loans........................................... 59,871 60,058
Other invested assets.................................. 123,722 76,482
----------- ----------
Total cash and invested assets..................... 6,622,014 6,188,678
Premiums deferred and uncollected....................... 14,656 15,318
Accrued investment income............................... 65,364 65,308
Receivable from affiliate............................... -- 643
Federal income taxes recoverable........................ 1,335 639
Transfers from separate accounts due or accrued......... 92,309 70,866
Other assets............................................ 30,119 29,511
Separate account assets................................. 4,905,374 3,348,611
----------- ----------
Total admitted assets................................... $11,731,171 $9,719,574
=========== ==========
</TABLE>

3
<PAGE>

PFL Life Insurance Company

Balance Sheets--Statutory Basis
(Dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
December 31
1999 1998
----------- ----------
<S> <C> <C>
Liabilities and Capital and Surplus
Liabilities:
Aggregate reserves for policies and contracts:
Life................................................. $ 1,552,781 $1,357,175
Annuity.............................................. 4,036,751 3,925,293
Accident and health.................................. 254,571 205,736
Policy and contract claim reserves:
Life................................................. 8,681 9,101
Accident and health.................................. 37,466 48,906
Other policyholders' funds............................. 172,774 162,266
Remittances and items not allocated.................... 33,020 19,690
Asset valuation reserve................................ 103,193 91,588
Interest maintenance reserve........................... 36,120 50,575
Short-term notes payable to affiliates................. 144,500 9,421
Other liabilities...................................... 70,717 76,766
Payable for securities................................. 15,136 57,645
Payable to affiliates.................................. 11,517 --
Separate account liabilities........................... 4,899,289 3,342,884
----------- ----------
Total liabilities....................................... 11,376,516 9,357,046
Commitments and contingencies (Note 10)
Capital and surplus:
Common stock, $10 par value, 500,000 shares autho-
rized, 266,000 issued and outstanding................. 2,660 2,660
Paid-in surplus........................................ 154,282 154,282
Unassigned surplus..................................... 197,713 205,586
----------- ----------
Total capital and surplus............................... 354,655 362,528
----------- ----------
Total liabilities and capital and surplus............... $11,731,171 $9,719,574
=========== ==========
</TABLE>

See accompanying notes.

4
<PAGE>

PFL Life Insurance Company

Statements of Operations--Statutory Basis
(Dollars in thousands)

<TABLE>
<CAPTION>
Year ended December 31
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
Revenues:
Premiums and other considerations, net of
reinsurance:
Life.................................... $ 227,510 $ 516,111 $ 202,435
Annuity................................. 1,413,049 667,920 657,695
Accident and health..................... 160,570 178,593 207,982
Net investment income..................... 437,549 446,984 446,424
Amortization of interest maintenance re-
serve.................................... 7,588 8,656 3,645
Commissions and expense allowances on
reinsurance ceded........................ 24,741 32,781 49,859
Separate account fee income............... 49,826 37,137 --
---------- ---------- ----------
2,320,833 1,888,182 1,568,040
Benefits and expenses:
Benefits paid or provided for:
Life and accident and health benefits... 115,621 135,184 146,583
Surrender benefits...................... 1,046,611 732,796 658,071
Other benefits.......................... 169,479 152,209 126,495
Increase (decrease) in aggregate
reserves for policies and contracts:
Life.................................... 195,606 473,158 149,575
Annuity................................. 111,427 (278,665) (203,139)
Accident and health..................... 48,835 36,407 30,059
Other................................... 10,480 17,550 16,998
---------- ---------- ----------
1,698,059 1,268,639 924,642
Insurance expenses:
Commissions............................... 167,146 136,569 157,300
General insurance expenses................ 54,191 48,018 57,571
Taxes, licenses and fees.................. 12,382 19,166 8,715
Net transfers to separate accounts........ 309,307 302,839 297,480
Other expenses............................ 229 1,016 119
---------- ---------- ----------
543,255 507,608 521,185
---------- ---------- ----------
2,241,314 1,776,247 1,445,827
---------- ---------- ----------
Gain from operations before federal income
tax expense and net realized capital gains
on investments............................. 79,519 111,935 122,213
Federal income tax expense.................. 25,316 49,835 43,381
---------- ---------- ----------
Gain from operations before net realized
capital gains on investments............... 54,203 62,100 78,832
Net realized capital gains on investments
(net of related federal income taxes and
amounts transferred to interest maintenance
reserve)................................... 6,365 3,398 7,159
---------- ---------- ----------
Net income.................................. $ 60,568 $ 65,498 $ 85,991
========== ========== ==========
</TABLE>

See accompanying notes.

5
<PAGE>

PFL Life Insurance Company

Statements of Changes in Capital and Surplus--Statutory Basis
(Dollars in thousands)

<TABLE>
<CAPTION>
Total
Capital
Common Paid-in Unassigned and
Stock Surplus Surplus Surplus
------ -------- ---------- --------
<S> <C> <C> <C> <C>
Balance at January 1, 1997 $2,660 $154,129 $261,558 $418,347
Capital contribution.................... -- 153 -- 153
Net income.............................. -- -- 85,991 85,991
Change in net unrealized capital gains.. -- -- 3,592 3,592
Change in non-admitted assets........... -- -- (481) (481)
Change in asset valuation reserve....... -- -- (14,974) (14,974)
Dividend to stockholder................. -- -- (62,000) (62,000)
Surplus effect of sale of a division.... -- -- (161) (161)
Surplus effect of ceding commissions
associated with the sale of a
division............................... -- -- 5 5
Amendment of reinsurance agreement...... -- -- 389 389
Surplus effect of reinsurance
agreement.............................. -- -- 402 402
Change in liability for reinsurance in
unauthorized companies................. -- -- (1,901) (1,901)
------ -------- -------- --------
Balance at December 31, 1997 2,660 154,282 272,420 429,362
Net income.............................. -- -- 65,498 65,498
Change in net unrealized capital gains.. -- -- 4,504 4,504
Change in non-admitted assets........... -- -- (260) (260)
Change in asset valuation reserve....... -- -- (21,763) (21,763)
Dividend to stockholder................. -- -- (120,000) (120,000)
Increase in liability for reinsurance in
unauthorized companies................. -- -- 2,036 2,036
Tax benefit on stock options exercised.. -- -- 2,476 2,476
Change in surplus in separate accounts.. -- -- 675 675
------ -------- -------- --------
Balance at December 31, 1998 2,660 154,282 205,586 362,528
Net income.............................. -- -- 60,568 60,568
Change in net unrealized capital gains.. -- -- (20,217) (20,217)
Change in non-admitted assets........... -- -- (980) (980)
Change in asset valuation reserve....... -- -- (11,605) (11,605)
Dividend to stockholder................. -- -- (40,000) (40,000)
Tax benefit on stock options exercised.. -- -- 1,305 1,305
Change in surplus in separate accounts.. -- -- 245 245
Settlement of prior period tax returns
and other tax-related adjustments...... -- -- 2,811 2,811
------ -------- -------- --------
Balance at December 31, 1999.............. $2,660 $154,282 $197,713 $354,655
====== ======== ======== ========
</TABLE>

See accompanying notes.

6
<PAGE>

PFL Life Insurance Company

Statements of Cash Flows--Statutory Basis
(Dollars in thousands)

<TABLE>
<CAPTION>
Year ended December 31
1999 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
Operating activities
Premiums and other considerations, net
of reinsurance......................... $ 1,830,365 $ 1,396,428 $ 1,119,936
Net investment income................... 441,737 469,246 452,091
Life and accident and health claims..... (124,178) (138,249) (154,383)
Surrender benefits and other fund
withdrawals............................ (1,046,611) (732,796) (658,071)
Other benefits to policyholders......... (169,476) (152,167) (126,462)
Commissions, other expenses and other
taxes.................................. (238,192) (197,135) (225,042)
Net transfers to separate accounts...... (280,923) (276,375) (319,146)
Federal income taxes.................... (24,709) (72,176) (47,909)
Cash paid in conjunction with an
amendment of a reinsurance agreement... -- -- (4,826)
Cash received in connection with a
reinsurance agreement.................. -- -- 1,477
Other, net.............................. (23,047) (93,095) 89,693
----------- ----------- -----------
Net cash provided by operating
activities............................. 364,966 203,681 127,358
Investing activities
Proceeds from investments sold, matured
or repaid:
Bonds and preferred stocks............ 3,283,038 3,347,174 3,284,095
Common stocks......................... 60,293 34,564 34,004
Mortgage loans on real estate......... 158,739 192,210 138,162
Real estate........................... 13,367 5,624 6,897
Policy loans.......................... 186 -- --
Cash received from ceding commissions
associated with the sale of a
division............................. -- -- 8
Other................................. 6,133 7,210 57,683
----------- ----------- -----------
3,521,756 3,586,782 3,520,849
Cost of investments acquired:
Bonds and preferred stocks............ (3,398,158) (3,251,822) (3,411,442)
Common stocks......................... (76,200) (36,379) (37,339)
Mortgage loans on real estate......... (480,750) (257,039) (159,577)
Real estate........................... (7,568) (11,458) (2,013)
Policy loans.......................... -- (2,922) (2,922)
Cash paid in association with the sale
of a division........................ -- -- (591)
Other................................. (48,719) (44,514) (15,674)
----------- ----------- -----------
(4,011,395) (3,604,134) (3,629,558)
----------- ----------- -----------
Net cash used in investing activities... (489,639) (17,352) (108,709)
</TABLE>

7
<PAGE>

PFL Life Insurance Company

Statements of Cash Flows--Statutory Basis
(Dollars in thousands)

<TABLE>
<CAPTION>
Year ended December 31
1999 1998 1997
-------- -------- -------
<S> <C> <C> <C>
Financing activities
Issuance (repayment) of short-term intercompany
notes payable................................... $135,079 $ (6,979) $16,400
Capital contribution............................. -- -- 153
Dividends to stockholder......................... (40,000) (120,000) (62,000)
-------- -------- -------
Net cash provided by (used in) financing
activities...................................... 95,079 (126,979) (45,447)
-------- -------- -------
Increase (decrease) in cash and short-term
investments..................................... (29,594) 59,350 (26,798)
Cash and short-term investments at beginning of
year............................................ 83,289 23,939 50,737
-------- -------- -------
Cash and short-term investments at end of year... $ 53,695 $ 83,289 $23,939
======== ======== =======
</TABLE>

See accompanying notes.

8
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis

(Dollars in thousands)
December 31, 1999

1. Organization and Summary of Significant Accounting Policies

Organization

PFL Life Insurance Company ("the Company") is a stock life insurance company
and is a wholly-owned subsidiary of First AUSA Life Insurance Company ("First
AUSA"), which, in turn, is a wholly-owned subsidiary of AEGON USA, Inc.
("AEGON"). AEGON is an indirect wholly-owned subsidiary of AEGON N.V., a
holding company organized under the laws of The Netherlands.

Nature of Business

The Company sells individual non-participating whole life, endowment and term
contracts, as well as a broad line of single fixed and flexible premium
annuity products. In addition, the Company offers group life, universal life,
and individual and specialty health coverages. The Company is licensed in 49
states and the District of Columbia and Guam. Sales of the Company's products
are primarily through the Company's agents and financial institutions.

Basis of Presentation

The preparation of financial statements of insurance companies requires
management to make estimates and assumptions that affect amounts reported in
the financial statements and accompanying notes. Actual results could differ
from those estimates.

Significant estimates and assumptions are utilized in the calculation of
aggregate policy reserves, policy and contract claim reserves, guaranty fund
assessment accruals and valuation allowances on investments. It is reasonably
possible that actual experience could differ from the estimates and
assumptions utilized which could have a material impact on the financial
statements.

The accompanying financial statements have been prepared on the basis of
accounting practices prescribed or permitted by the Insurance Division,
Department of Commerce, of the State of Iowa ("Insurance Department"), which
practices differ in some respects from generally accepted accounting
principles. The more significant of these differences are as follows: (a)
bonds are generally reported at amortized cost rather than segregating the
portfolio into held-to-maturity (reported at amortized cost), available-for-
sale (reported at fair value), and trading (reported at fair value)
classifications; (b) acquisition costs of acquiring new business are charged
to current operations as incurred rather than deferred and amortized over the
life of the policies; (c) policy reserves on traditional life products

9
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis--(continued)

(Dollars in thousands)

1. Organization and Summary of Significant Accounting Policies (continued)

are based on statutory mortality rates and interest which may differ from
reserves based on reasonable assumptions of expected mortality, interest, and
withdrawals which include a provision for possible unfavorable deviation from
such assumptions; (d) policy reserves on certain investment products use
discounting methodologies based on statutory interest rates rather than full
account values; (e) reinsurance amounts are netted against the corresponding
asset or liability rather than shown as gross amounts on the balance sheet;
(f) deferred income taxes are not provided for the difference between the
financial statement and income tax bases of assets and liabilities; (g) net
realized gains or losses attributed to changes in the level of interest rates
in the market are deferred and amortized over the remaining life of the bond
or mortgage loan, rather than recognized as gains or losses in the statement
of operations when the sale is completed; (h) potential declines in the
estimated realizable value of investments are provided for through the
establishment of a formula-determined statutory investment reserve (reported
as a liability), changes to which are charged directly to surplus, rather than
through recognition in the statement of operations for declines in value, when
such declines are judged to be other than temporary; (i) certain assets
designated as "non-admitted assets" have been charged to surplus rather than
being reported as assets; (j) revenues for universal life and investment
products consist of premiums received rather than policy charges for the cost
of insurance, policy administration charges, amortization of policy initiation
fees and surrender charges assessed; (k) pension expense is recorded as
amounts are paid; (l) stock options settled in cash are recorded as expense of
the Company's indirect parent rather than charged to current operations; (m)
adjustments to federal income taxes of prior years are charged or credited
directly to unassigned surplus, rather than reported as a component of expense
in the statement of operations; (n) gains or losses on dispositions of
business are charged or credited directly to unassigned surplus rather than
being reported in the statement of operations; and (o) a liability is
established for "unauthorized reinsurers" and changes in this liability are
charged or credited directly to unassigned surplus. The effects of these
variances have not been determined by the Company but are presumed to be
material.

In 1998, the National Association of Insurance Commissioners ("NAIC") adopted
codified statutory accounting principles ("Codification") effective January 1,
2001. Codification will likely change, to some extent, prescribed statutory
accounting practices and may result in changes to the accounting practices
that the Company uses to prepare its statutory-basis financial statements.
Codification will require adoption by the various states before it becomes the
prescribed statutory basis of accounting for insurance companies domesticated
within those states. Accordingly, before Codification becomes effective for
the Company, the State of Iowa must adopt Codification as the prescribed basis
of accounting on which domestic insurers must report their statutory-basis
results to the Insurance Department. At this time, it is anticipated that the
State of Iowa will adopt Codification. However, based on current guidance,
management believes that the impact of Codification will not be material to
the Company's statutory-basis financial statements.

10
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis--(continued)

(Dollars in thousands)

1. Organization and Summary of Significant Accounting Policies (continued)

Cash and Short-Term Investments

For purposes of the statements of cash flows, the Company considers all highly
liquid investments with remaining maturity of one year or less when purchased
to be short-term investments.

Investments

Investments in bonds (except those to which the Securities Valuation Office of
the NAIC has ascribed a value), mortgage loans on real estate and short-term
investments are reported at cost adjusted for amortization of premiums and
accrual of discounts. Amortization is computed using methods which result in a
level yield over the expected life of the investment. The Company reviews its
prepayment assumptions on mortgage and other asset-backed securities at
regular intervals and adjusts amortization rates retrospectively when such
assumptions are changed due to experience and/or expected future patterns.
Investments in preferred stocks in good standing are reported at cost.
Investments in preferred stocks not in good standing are reported at the lower
of cost or market. Common stocks of unaffiliated and affiliated companies,
which includes shares of mutual funds and real estate investment trusts, are
carried at market value. Real estate is reported at cost less allowances for
depreciation. Depreciation is computed principally by the straight-line
method. Policy loans are reported at unpaid principal. Other invested assets
consist principally of investments in various joint ventures and are recorded
at equity in underlying net assets. Other "admitted assets" are valued,
principally at cost, as required or permitted by Iowa Insurance Laws.

Net realized capital gains and losses are determined on the basis of specific
identification and are recorded net of related federal income taxes. The Asset
Valuation Reserve ("AVR") is established by the Company to provide for
potential losses in the event of default by issuers of certain invested
assets. These amounts are determined using a formula prescribed by the NAIC
and are reported as a liability. The formula for the AVR provides for a
corresponding adjustment for realized gains and losses. Under a formula
prescribed by the NAIC, the Company defers, in the Interest Maintenance
Reserve ("IMR"), the portion of realized gains and losses on sales of fixed
income investments, principally bonds and mortgage loans, attributable to
changes in the general level of interest rates and amortizes those deferrals
over the remaining period to maturity of the security.

Interest income is recognized on an accrual basis. The Company does not accrue
income on bonds in default, mortgage loans on real estate in default and/or
foreclosure or which are delinquent more than twelve months, or on real estate
where rent is in arrears for more than three months. Further, income is not
accrued when collection is uncertain. During 1999, 1998 and 1997, the Company
excluded investment income due and accrued of $530, $102 and $177,
respectively, with respect to such practices.

11
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis--(continued)

(Dollars in thousands)

1. Organization and Summary of Significant Accounting Policies (continued)

The Company uses interest rate swaps and caps as part of its overall interest
rate risk management strategy for certain life insurance and annuity products.
The Company entered into several interest rate swap contracts to modify the
interest rate characteristics of the underlying liabilities. The net interest
effect of such swap transactions is reported as an adjustment of interest
income from the hedged items as incurred.

The Company has entered into an interest rate cap agreement to hedge the
exposure of changing interest rates. The cash flows from the interest rate cap
will help offset losses that might occur from changes in interest rates. The
cost of such agreement is included in interest expense ratably during the life
of the agreement. Income received as a result of the cap agreement will be
recognized in investment income as earned. Unamortized cost of the agreement
is included in other invested assets.

Aggregate Policy Reserves

Life, annuity and accident and health benefit reserves are developed by
actuarial methods and are determined based on published tables based on
statutorily specified interest rates and valuation methods that will provide,
in the aggregate, reserves that are greater than or equal to the minimum
required by law.

The aggregate policy reserves for life insurance policies are based
principally upon the 1941, 1958 and 1980 Commissioners' Standard Ordinary
Mortality and American Experience Mortality Tables. The reserves are
calculated using interest rates ranging from 2.00 to 6.00 percent and are
computed principally on the Net Level Premium Valuation and the Commissioners'
Reserve Valuation Methods. Reserves for universal life policies are based on
account balances adjusted for the Commissioners' Reserve Valuation Method.

Deferred annuity reserves are calculated according to the Commissioners'
Annuity Reserve Valuation Method including excess interest reserves to cover
situations where the future interest guarantees plus the decrease in surrender
charges are in excess of the maximum valuation rates of interest. Reserves for
immediate annuities and supplementary contracts with life contingencies are
equal to the present value of future payments assuming interest rates ranging
from 2.50 to 11.25 percent and mortality rates, where appropriate, from a
variety of tables.

Accident and health policy reserves are equal to the greater of the gross
unearned premiums or any required midterminal reserves plus net unearned
premiums and the present value of amounts not yet due on both reported and
unreported claims.

12
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis--(continued)

(Dollars in thousands)

1. Organization and Summary of Significant Accounting Policies (continued)

Policy and Contract Claim Reserves

Claim reserves represent the estimated accrued liability for claims reported
to the Company and claims incurred but not yet reported through the statement
date. These reserves are estimated using either individual case-basis
valuations or statistical analysis techniques. These estimates are subject to
the effects of trends in claim severity and frequency. The estimates are
continually reviewed and adjusted as necessary as experience develops or new
information becomes available.

Separate Accounts

Assets held in trust for purchases of variable annuity contracts and the
Company's corresponding obligation to the contract owners are shown separately
in the balance sheets. The assets in the separate accounts are valued at
market. Income and gains and losses with respect to the assets in the separate
accounts accrue to the benefit of the contract owners and, accordingly, the
operations of the separate accounts are not included in the accompanying
financial statements. The separate accounts do not have any minimum guarantees
and the investment risks associated with market value changes are borne
entirely by the contract owners. The Company received variable contract
premiums of $486,282, $345,319 and $281,095 in 1999, 1998 and 1997,
respectively. All variable account contracts are subject to discretionary
withdrawal by the contract owner at the market value of the underlying assets
less the current surrender charge.

Stock Option Plan

AEGON N.V. sponsors a stock option plan for eligible employees of the Company.
Under this plan, certain employees have indicated a preference to immediately
sell shares received as a result of their exercise of the stock options; in
these situations, AEGON N.V. has settled such options in cash rather than
issuing stock to these employees. These cash settlements are paid by the
Company, and AEGON N.V. subsequently reimburses the Company for such payments.
Under statutory accounting principles, the Company does not record any expense
related to this plan, as the expense is recognized by AEGON N.V. However, the
Company is allowed to record a deduction in the consolidated tax return filed
by the Company and certain affiliates. The tax benefit of this deduction has
been credited directly to surplus.

Reclassifications

Certain reclassifications have been made to the 1998 and 1997 financial
statements to conform to the 1999 presentation.

13
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis--(continued)

(Dollars in thousands)

2. Fair Values of Financial Instruments

Statement of Financial Accounting Standard ("SFAS") No. 107, Disclosures about
Fair Value of Financial Instruments, requires disclosure of fair value
information about financial instruments, whether or not recognized in the
statutory-basis balance sheet, for which it is practicable to estimate that
value. SFAS No. 119, Disclosures about Derivative Financial Instruments and
Fair Value of Financial Instruments, requires additional disclosure about
derivatives. In cases where quoted market prices are not available, fair
values are based on estimates using present value or other valuation
techniques. Those techniques are significantly affected by the assumptions
used, including the discount rate and estimates of future cash flows. In that
regard, the derived fair value estimates cannot be substantiated by
comparisons to independent markets and, in many cases, could not be realized
in immediate settlement of the instrument. SFAS No. 107 and No. 119 exclude
certain financial instruments and all nonfinancial instruments from their
disclosure requirements and allow companies to forego the disclosures when
those estimates can only be made at excessive cost. Accordingly, the aggregate
fair value amounts presented do not represent the underlying value of the
Company.

The following methods and assumptions were used by the Company in estimating
its fair value disclosures for financial instruments:

Cash and short-term investments: The carrying amounts reported in the
balance sheet for these instruments approximate their fair values.

Investment securities: Fair values for fixed maturity securities (including
redeemable preferred stocks) are based on quoted market prices, where
available. For fixed maturity securities not actively traded, fair values
are estimated using values obtained from independent pricing services or,
in the case of private placements, are estimated by discounting expected
future cash flows using a current market rate applicable to the yield,
credit quality, and maturity of the investments. The fair values for equity
securities, including affiliated mutual funds and real estate investment
trusts, are based on quoted market prices.

Mortgage loans and policy loans: The fair values for mortgage loans are
estimated utilizing discounted cash flow analyses, using interest rates
reflective of current market conditions and the risk characteristics of the
loans. The fair value of policy loans is assumed to equal their carrying
amount.

Investment contracts: Fair values for the Company's liabilities under
investment-type insurance contracts are estimated using discounted cash
flow calculations, based on interest rates currently being offered for
similar contracts with maturities consistent with those remaining for the
contracts being valued.

14
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis--(continued)

(Dollars in thousands)

2. Fair Values of Financial Instruments (continued)

Interest rate cap and interest rate swaps: Estimated fair value of the
interest rate cap is based upon the latest quoted market price. Estimated
fair value of interest rate swaps are based upon the pricing differential
for similar swap agreements.

Short-term notes payable to affiliates: The fair values for short-term
notes payable to affiliates are assumed to equal their carrying amount.

Fair values for the Company's insurance contracts other than investment
contracts are not required to be disclosed. However, the fair values of
liabilities under all insurance contracts are taken into consideration in the
Company's overall management of interest rate risk, which minimizes exposure
to changing interest rates through the matching of investment maturities with
amounts due under insurance contracts.

The following sets forth a comparison of the fair values and carrying amounts
of the Company's financial instruments subject to the provisions of SFAS No.
107 and No. 119:

<TABLE>
<CAPTION>
December 31
1999 1998
--------------------- ---------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Admitted assets
Cash and short-term investments... $ 53,695 $ 53,695 $ 83,289 $ 83,289
Bonds............................. 4,892,156 4,757,325 4,822,442 4,900,516
Preferred stocks.................. 17,074 15,437 14,754 14,738
Common stocks..................... 71,658 71,658 49,448 49,448
Affiliated common stock........... 6,764 6,764 5,613 5,613
Mortgage loans on real estate..... 1,339,202 1,299,160 1,012,433 1,089,315
Policy loans...................... 59,871 59,871 60,058 60,058
Interest rate cap................. 4,959 1,784 4,445 725
Interest rate swaps............... 8,134 10,609 1,916 6,667
Separate account assets........... 4,905,374 4,905,374 3,348,611 3,348,611
Liabilities
Investment contract liabilities... 4,207,369 4,059,842 4,084,683 4,017,509
Separate account liabilities...... 4,377,676 4,212,615 3,271,005 3,213,251
Short-term notes payable to
affiliates....................... 144,500 144,500 9,421 9,421
</TABLE>

15
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis--(continued)

(Dollars in thousands)

3. Investments

The carrying amounts and estimated fair values of investments in debt
securities were as follows:

<TABLE>
<CAPTION>
Gross Gross Estimated
Carrying Unrealized Unrealized Fair
Amount Gains Losses Value
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
December 31, 1999
Bonds:
United States Government and
agencies........................ $ 141,390 $ 142 $ 4,520 $ 137,012
State, municipal and other
government...................... 137,745 5,168 1,627 141,286
Public utilities................. 219,791 1,148 6,777 214,162
Industrial and miscellaneous..... 2,078,145 20,042 84,919 2,013,268
Mortgage and other asset-backed
securities...................... 2,315,085 24,214 87,702 2,251,597
---------- -------- -------- ----------
4,892,156 50,714 185,545 4,757,325
Preferred stocks................... 17,074 2 1,639 15,437
---------- -------- -------- ----------
$4,909,230 $ 50,716 $187,184 $4,772,762
========== ======== ======== ==========
December 31, 1998
Bonds:
United States Government and
agencies........................ $ 150,085 $ 2,841 $ 321 $ 152,605
State, municipal and other
government...................... 62,948 918 1,651 62,215
Public utilities................. 139,732 5,053 2,555 142,230
Industrial and miscellaneous..... 2,068,086 78,141 34,493 2,111,734
Mortgage and other asset-backed
securities...................... 2,401,591 45,185 15,044 2,431,732
---------- -------- -------- ----------
4,822,442 132,138 54,064 4,900,516
Preferred stocks................... 14,754 75 91 14,738
---------- -------- -------- ----------
$4,837,196 $132,213 $ 54,155 $4,915,254
========== ======== ======== ==========
</TABLE>

The carrying amounts and estimated fair values of bonds at December 31, 1999,
by contractual maturity, are shown below. Expected maturities may differ from
contractual maturities because borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties.

<TABLE>
<CAPTION>
Carrying Estimated
Amount Fair Value
---------- ----------
<S> <C> <C>
Due in one year or less............................... $ 194,654 $ 192,453
Due after one year through five years................. 1,151,170 1,121,353
Due after five years through ten years................ 908,926 873,402
Due after ten years................................... 322,321 318,520
---------- ----------
2,577,071 2,505,728
Mortgage and other asset-backed securities............ 2,315,085 2,251,597
---------- ----------
$4,892,156 $4,757,325
========== ==========
</TABLE>

16
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis--(continued)

(Dollars in thousands)

3. Investments (continued)

A detail of net investment income is presented below:

<TABLE>
<CAPTION>
Year ended December 31
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Interest on bonds and preferred stock............... $347,639 $374,478 $373,496
Dividends on equity investments..................... 734 1,357 1,460
Interest on mortgage loans.......................... 92,325 77,960 80,266
Rental income on real estate........................ 7,322 6,553 7,501
Interest on policy loans............................ 4,141 4,080 3,400
Other investment income............................. 7,978 2,576 613
-------- -------- --------
Gross investment income............................. 460,139 467,004 466,736
Less investment expenses............................ 22,590 20,020 20,312
-------- -------- --------
Net investment income............................... $437,549 $446,984 $446,424
======== ======== ========
</TABLE>

Proceeds from sales and maturities of debt securities and related gross
realized gains and losses were as follows:

<TABLE>
<CAPTION>
Year ended December 31
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
Proceeds.................................... $3,283,038 $3,347,174 $3,284,095
========== ========== ==========
Gross realized gains........................ $ 21,171 $ 48,760 $ 30,094
Gross realized losses....................... (32,259) (8,072) (17,265)
---------- ---------- ----------
Net realized gains (losses)................. $ (11,088) $ 40,688 $ 12,829
========== ========== ==========
</TABLE>

At December 31, 1999, investments with an aggregate carrying value of
$6,346,831 were on deposit with regulatory authorities or were restrictively
held in bank custodial accounts for the benefit of such regulatory authorities
as required by statute.

17
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis--(continued)

(Dollars in thousands)

3. Investments (continued)

Realized investment gains (losses) and changes in unrealized gains (losses)
for investments are summarized below:

<TABLE>
<CAPTION>
Realized
----------------------------
Year ended December 31
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Debt securities......... $(11,088) $ 40,688 $ 12,829
Equity securities....... 11,433 (879) 6,972
Mortgage loans on real
estate................. 4,661 12,637 2,252
Real estate............. 900 3,176 4,252
Short-term investments.. (1,407) 1,533 (19)
Other invested assets... 534 (2,523) 1,632
-------- -------- --------
5,033 54,632 27,918
Tax effect.............. (5,535) (22,290) (10,572)
Transfer from (to)
interest maintenance
reserve................ 6,867 (28,944) (10,187)
-------- -------- --------
Net realized gains...... $ 6,365 $ 3,398 $ 7,159
======== ======== ========
<CAPTION>
Change in Unrealized
----------------------------
Year ended December 31
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Bonds................... $(12,711) $ (836) $ 2,498
Preferred stocks........ (2,753) -- --
Common stocks........... (3,980) 3,751 1,097
Mortgage loans.......... (147) (150) --
Other invested assets... (626) 1,739 (3)
-------- -------- --------
Change in unrealized.... $(20,217) $ 4,504 $ 3,592
======== ======== ========

Gross unrealized gains and gross unrealized losses on equity securities are as
follows:

<CAPTION>
December 31
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Unrealized gains........ $ 11,369 $ 15,980 $ 10,356
Unrealized losses....... (5,078) (3,710) (3,836)
-------- -------- --------
Net unrealized gains.... $ 6,291 $ 12,270 $ 6,520
======== ======== ========
</TABLE>

18
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis--(continued)

(Dollars in thousands)

3. Investments (continued)

During 1999, the Company issued mortgage loans with interest rates ranging
from 6.42% to 8.67%. The maximum percentage of any one mortgage loan to the
value of the underlying real estate at origination was 84%. Mortgage loans
with a carrying value of $248 were non-income producing for the previous
twelve months. Accrued interest of $95 related to these mortgage loans was
excluded from investment income. The Company requires all mortgaged properties
to carry fire insurance equal to the value of the underlying property.

At December 31, 1999 and 1998, the Company held a mortgage loan loss reserve
in the asset valuation reserve of $15,173 and $16,104, respectively. The
mortgage loan portfolio is diversified by geographic region and specific
collateral property type as follows:

Geographic Distribution

<TABLE>
<CAPTION>
December 31
1999 1998
----- -----
<S> <C> <C>
South Atlantic.......... 27% 32%
Pacific................. 18 15
E. North Central........ 17 16
Middle Atlantic......... 15 10
Mountain................ 9 10
W. South Central........ 6 6
W. North Central........ 4 5
E. South Central........ 3 3
New England............. 1 3
</TABLE>
<TABLE>
<CAPTION>

Property Type Distribution

December 31
1999 1998
----- -----
<S> <C> <C>
Office.................. 39% 30%
Retail.................. 28 35
Industrial.............. 18 21
Apartment............... 11 12
Other................... 4 2
</TABLE>

At December 31, 1999, the Company had no investments (excluding U. S.
Government guaranteed or insured issues) which individually represented more
than ten percent of capital and surplus and the asset valuation reserve,
collectively.

19
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis--(continued)

(Dollars in thousands)

3. Investments (continued)

The Company utilizes a variety of off-balance sheet financial instruments as
part of its efforts to hedge and manage fluctuations in the market value of
its investment portfolio attributable to changes in general interest rate
levels and to manage duration mismatch of assets and liabilities. These
instruments include interest rate swaps and caps. All involve elements of
credit and market risks in excess of the amounts recognized in the
accompanying financial statements at a given point in time. The contract or
notional amounts of those instruments reflect the extent of involvement in the
various types of financial instruments.

The Company's exposure to credit risk is the risk of loss from a counterparty
failing to perform according to the terms of the contract. That exposure
includes settlement risk (i.e., the risk that the counterparty defaults after
the Company has delivered funds or securities under terms of the contract)
that would result in an accounting loss and replacement cost risk (i.e., the
cost to replace the contract at current market rates should the counterparty
default prior to settlement date). Credit loss exposure resulting from
nonperformance by a counterparty for commitments to extend credit is
represented by the contractual amounts of the instruments.

At December 31, 1999 and 1998, the Company's outstanding financial instruments
with on and off-balance sheet risks, shown in notional amounts, are summarized
as follows:

<TABLE>
<CAPTION>
Notional Amount
1999 1998
-------- --------
<S> <C> <C>
Derivative securities:
Interest rate swaps:
Receive fixed--pay floating............................... $115,000 $100,000
Receive floating--pay fixed............................... 64,017 --
Receive floating (uncapped)--pay floating (capped)........ 41,617 53,011
Receive floating (LIBOR--pay floating (S&P)............... 60,000 60,000
Interest rate cap agreements................................ 500,000 500,000
</TABLE>

4. Reinsurance

The Company reinsures portions of risk on certain insurance policies which
exceed its established limits, thereby providing a greater diversification of
risk and minimizing exposure on larger risks. The Company remains contingently
liable with respect to any insurance ceded, and this would become an actual
liability in the event that the assuming insurance company became unable to
meet its obligation under the reinsurance treaty.

20
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis--(continued)

(Dollars in thousands)

4. Reinsurance (continued)

Reinsurance assumption and cession treaties are transacted primarily with
affiliates. Premiums earned reflect the following reinsurance assumed and
ceded amounts:

<TABLE>
<CAPTION>
Year ended December 31
----------------------------------
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
Direct premiums.......................... $1,942,716 $1,533,822 $1,312,446
Reinsurance assumed...................... 2,723 2,366 2,038
Reinsurance ceded........................ (144,310) (173,564) (246,372)
---------- ---------- ----------
Net premiums earned...................... $1,801,129 $1,362,624 $1,068,112
========== ========== ==========
</TABLE>

The Company received reinsurance recoveries in the amount of $139,138,
$173,297 and $183,638 during 1999, 1998 and 1997, respectively. At December
31, 1999 and 1998, estimated amounts recoverable from reinsurers that have
been deducted from policy and contract claim reserves totaled $35,511 and
$47,956, respectively. The aggregate reserves for policies and contracts were
reduced for reserve credits for reinsurance ceded at December 31, 1999 and
1998 of $1,870,190 and $2,163,905, respectively.

At December 31, 1999, amounts recoverable from unauthorized reinsurers of
$39,996 (1998--$55,379) and reserve credits for reinsurance ceded of $48,297
(1998--$49,835) were associated with a single reinsurer and its affiliates.
The Company holds collateral under these reinsurance agreements in the form of
trust agreements totaling $85,431 at December 31, 1999, that can be drawn on
for amounts that remain unpaid for more than 120 days.

5. Income Taxes

For federal income tax purposes, the Company joins in a consolidated tax
return filing with certain affiliated companies. Under the terms of a tax-
sharing agreement between the Company and its affiliates, the Company computes
federal income tax expense as if it were filing a separate income tax return,
except that tax credits and net operating loss carryforwards are determined on
the basis of the consolidated group. Additionally, the alternative minimum tax
is computed for the consolidated group and the resulting tax, if any, is
allocated back to the separate companies on the basis of the separate
companies' alternative minimum taxable income.

21
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis--(continued)

(Dollars in thousands)

5. Income Taxes (continued)

Federal income tax expense differs from the amount computed by applying the
statutory federal income tax rate to gain from operations before federal
income tax expense and net realized capital gains (losses) on investments for
the following reasons:

<TABLE>
<CAPTION>
Year ended December 31
1999 1998 1997
------- ------- -------
<S> <C> <C> <C>
Computed tax at federal statutory rate (35%)..... $27,832 $39,177 $42,775
IMR amortization................................. (2,656) (3,030) (1,276)
Tax reserve adjustment........................... 1,390 607 2,004
Excess tax depreciation.......................... (219) (223) (392)
Deferred acquisition costs-- tax basis........... 5,979 11,827 4,308
Prior year under (over) accrual ................. (3,492) 1,750 (1,016)
Dividend received deduction...................... (1,666) (1,053) (941)
Charitable contributions......................... -- -- (848)
Other items--net................................. (1,852) 780 (1,233)
------- ------- -------
Federal income tax expense....................... $25,316 $49,835 $43,381
======= ======= =======
</TABLE>

Federal income tax expense differs from the amount computed by applying the
statutory federal income tax rate to realized gains (losses) due to the
differences in book and tax asset bases at the time certain investments are
sold.

Prior to 1984, as provided for under the Life Insurance Company Tax Act of
1959, a portion of statutory income was not subject to current taxation but
was accumulated for income tax purposes in a memorandum account referred to as
the policyholders' surplus account. No federal income taxes have been provided
for in the financial statements on income deferred in the policyholders'
surplus account ($20,387 at December 31, 1999). To the extent dividends are
paid from the amount accumulated in the policyholders' surplus account, net
earnings would be reduced by the amount of tax required to be paid. Should the
entire amount in the policyholders' surplus account become taxable, the tax
thereon computed at current rates would amount to approximately $7,135.

In 1999, the Company reached a final settlement with the Internal Revenue
Service for 1990 and 1991, resulting in a tax refund of $904 and interest
received of $548. These amounts were credited directly to unassigned surplus.
The Company also corrected an error in 1999 which related to the 1997 tax-
sharing agreement between the Company and various affiliates. This resulted in
a credit to unassigned surplus of $1,359.

The Company's federal income tax returns have been examined and closing
agreements have been executed with the Internal Revenue Service through 1992.
An examination is underway for years 1993 through 1997.

22
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis--(continued)

(Dollars in thousands)

6. Policy and Contract Attributes

A portion of the Company's policy reserves and other policyholders' funds
(including separate account liabilities) relate to liabilities established on
a variety of the Company's annuity and deposit fund products. There may be
certain restrictions placed upon the amount of funds that can be withdrawn
without penalty. The amount of reserves on these products, by withdrawal
characteristics, are summarized as follows:

<TABLE>
<CAPTION>
December 31
1999 1998
------------------- ------------------
Percent Percent
of of
Amount Total Amount Total
----------- ------- ---------- -------
<S> <C> <C> <C> <C>
Subject to discretionary withdrawal with
market value adjustment................ $ 114,544 1% $ 82,048 1%
Subject to discretionary withdrawal at
book value less surrender charge....... 828,490 8 515,778 5
Subject to discretionary withdrawal at
market value........................... 4,313,445 41 3,211,896 34
Subject to discretionary withdrawal at
book value (minimal or no charges or
adjustments)........................... 5,021,762 48 5,519,265 58
Not subject to discretionary withdrawal
provision.............................. 248,444 2 228,030 2
----------- --- ---------- ---
10,526,685 100% 9,557,017 100%
Less reinsurance ceded.................. 1,863,810 2,124,769
----------- ----------
Total policy reserves on annuities and
deposit fund liabilities............... $ 8,662,875 $7,432,248
=========== ==========
</TABLE>

A reconciliation of the amounts transferred to and from the separate accounts
is presented below:

<TABLE>
<CAPTION>
Year ended December 31
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Transfers as reported in the summary of
operations of the separate accounts statement:..
Transfers to separate accounts................. $486,282 $345,319 $281,095
Transfers from separate accounts............... (175,822) (42,671) (9,819)
-------- -------- --------
Net transfers to separate accounts............... 310,460 302,648 271,276
Reconciling adjustments--change in miscellaneous
income.......................................... (1,153) 191 26,204
-------- -------- --------
Transfers as reported in the summary of
operations of the life, accident and health
annual statement................................ $309,307 $302,839 $297,480
======== ======== ========
</TABLE>

23
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis--(continued)

(Dollars in thousands)

6. Policy and Contract Attributes (continued)

Reserves on the Company's traditional life products are computed using mean
reserving methodologies. These methodologies result in the establishment of
assets for the amount of the net valuation premiums that are anticipated to be
received between the policy's paid-through date to the policy's next
anniversary date. At December 31, 1999 and 1998, these assets (which are
reported as premiums deferred and uncollected) and the amounts of the related
gross premiums and loadings, are as follows:

<TABLE>
<CAPTION>
Gross Loading Net
------- ------- -------
<S> <C> <C> <C>
December 31, 1999
Life and annuity:
Ordinary direct first year business................ $ 2,823 $2,085 $ 738
Ordinary direct renewal business................... 20,950 6,289 14,661
Group life direct business......................... 638 243 395
Reinsurance ceded.................................. (1,269) (16) (1,253)
------- ------ -------
23,142 8,601 14,541
Accident and health:
Direct............................................. 138 -- 138
Reinsurance ceded.................................. (23) -- (23)
------- ------ -------
Total accident and health............................ 115 -- 115
------- ------ -------
$23,257 $8,601 $14,656
======= ====== =======
December 31, 1998
Life and annuity:
Ordinary direct first year business................ $ 3,346 $2,500 $ 846
Ordinary direct renewal business................... 21,435 6,365 15,070
Group life direct business......................... 1,171 536 635
Reinsurance ceded.................................. (1,367) (44) (1,323)
------- ------ -------
24,585 9,357 15,228
Accident and health:
Direct............................................. 108 -- 108
Reinsurance ceded.................................. (18) -- (18)
------- ------ -------
Total accident and health............................ 90 -- 90
------- ------ -------
$24,675 $9,357 $15,318
======= ====== =======
</TABLE>

At December 31, 1999 and 1998, the Company had insurance in force aggregating
$41,720 and $44,233, respectively, in which the gross premiums are less than
the net premiums required by the standard valuation standards established by
the Insurance Division, Department of Commerce, of the State of Iowa. The
Company established policy reserves of $871 and $998 to cover these
deficiencies at December 31, 1999 and 1998, respectively.

24
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis--(continued)

(Dollars in thousands)

7. Dividend Restrictions

The Company is subject to limitations, imposed by the State of Iowa, on the
payment of dividends to its parent company. Generally, dividends during any
twelve-month period may not be paid, without prior regulatory approval, in
excess of the greater of (a) 10 percent of statutory capital and surplus as of
the preceding December 31, or (b) statutory gain from operations before net
realized capital gains (losses) on investments for the preceding year. Subject
to the availability of unassigned surplus at the time of such dividend, the
maximum payment which may be made in 2000, without the prior approval of
insurance regulatory authorities, is $54,203.

The Company paid dividends to its parent of $40,000, $120,000 and $62,000 in
1999, 1998 and 1997, respectively.

8. Retirement and Compensation Plans

The Company's employees participate in a qualified benefit pension plan
sponsored by AEGON. The Company has no legal obligation for the plan. The
Company recognizes pension expense equal to its allocation from AEGON. The
pension expense is allocated among the participating companies based on the
SFAS No. 87 expense as a percent of salaries. The benefits are based on years
of service and the employee's compensation during the highest five consecutive
years of employment. Pension expense aggregated $408, $380 and $422 for the
years ended December 31, 1999, 1998 and 1997, respectively. The plan is
subject to the reporting and disclosure requirements of the Employee
Retirement and Income Security Act of 1974.

The Company's employees also participate in a contributory defined
contribution plan sponsored by AEGON which is qualified under Section 401(k)
of the Internal Revenue Service Code. Employees of the Company who customarily
work at least 1,000 hours during each calendar year and meet the other
eligibility requirements, are participants of the plan. Participants may elect
to contribute up to fifteen percent of their salary to the plan. The Company
will match an amount up to three percent of the participant's salary.
Participants may direct all of their contributions and plan balances to be
invested in a variety of investment options. The plan is subject to the
reporting and disclosure requirements of the Employee Retirement and Income
Security Act of 1974. Expense related to this plan was $267, $233 and $226 for
the years ended December 31, 1999, 1998 and 1997, respectively.

25
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis--(continued)

(Dollars in thousands)

8. Retirement and Compensation Plans (continued)

AEGON sponsors supplemental retirement plans to provide the Company's senior
management with benefits in excess of normal pension benefits. The plans are
noncontributory, and benefits are based on years of service and the employee's
compensation level. The plans are unfunded and nonqualified under the Internal
Revenue Service Code. In addition, AEGON has established incentive deferred
compensation plans for certain key employees of the Company. AEGON also
sponsors an employee stock option plan for individuals employed at least three
years and a stock purchase plan for its producers, with the participating
affiliated companies establishing their own eligibility criteria, producer
contribution limits and company matching formula. These plans have been
accrued or funded as deemed appropriate by management of AEGON and the
Company.

In addition to pension benefits, the Company participates in plans sponsored
by AEGON that provide postretirement medical, dental and life insurance
benefits to employees meeting certain eligibility requirements. Portions of
the medical and dental plans are contributory. The expenses of the
postretirement plans are charged to affiliates in accordance with an
intercompany cost sharing arrangement. The Company expensed $28, $62 and $62
for the years ended December 31, 1999, 1998 and 1997, respectively.

9. Related Party Transactions

The Company shares certain offices, employees and general expenses with
affiliated companies.

The Company receives data processing, investment advisory and management,
marketing and administration services from certain affiliates. During 1999,
1998 and 1997, the Company paid $19,983, $18,706 and $18,705, respectively,
for these services, which approximates their costs to the affiliates.

Payables to affiliates bear interest at the thirty-day commercial paper rate
of 5.7% at December 31, 1999. During 1999, 1998 and 1997, the Company paid net
interest of $1,994, $1,491 and $1,188, respectively, to affiliates.

During 1997, the Company received a capital contribution of $153 in cash from
its parent.

At December 31, 1999 and 1998, the Company has short-term notes payable to an
affiliate of $144,500 and $9,421, respectively. Interest on these notes
accrues at rates ranging from 4.85% to 5.90% at December 31, 1999 and 5.13% to
5.52% at December 31, 1998.

26
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis--(continued)

(Dollars in thousands)

9. Related Party Transactions (continued)

During 1998, the Company issued life insurance policies to certain affiliated
companies, covering the lives of certain employees of those affiliates.
Premiums of $174,000 related to these policies were recognized during the
year, and aggregate reserves for policies and contracts are $190,299 and
$181,720 at December 31, 1999 and 1998, respectively.

10. Commitments and Contingencies

The Company has issued Trust (synthetic) GIC contracts to plan sponsors
totaling $374,124 at December 31, 1999, pursuant to terms under which the plan
sponsor retains ownership of the assets related to these contracts. The
Company guarantees benefit responsiveness in the event that plan benefit
requests and other contractual commitments exceed plan cash flows. The plan
sponsor agrees to reimburse the Company for such benefit payments with
interest, either at a fixed or floating rate, from future plan and asset cash
flows. In return for this guarantee, the Company receives a premium which
varies based on such elements as benefit responsive exposure and contract
size. The Company underwrites the plans for the possibility of having to make
benefit payments and also must agree to the investment guidelines to ensure
appropriate credit quality and cash flow matching. The assets relating to such
contracts are not recognized in the Company's statutory-basis financial
statements.

The Company is a party to legal proceedings incidental to its business.
Although such litigation sometimes includes substantial demands for
compensatory and punitive damages, in addition to contract liability, it is
management's opinion, after consultation with counsel and a review of
available facts, that damages arising from such demands will not be material
to the Company's financial position.

The Company is subject to insurance guaranty laws in the states in which it
writes business. These laws provide for assessments against insurance
companies for the benefit of policyholders and claimants in the event of
insolvency of other insurance companies. Assessments are charged to operations
when received by the Company except where right of offset against other taxes
paid is allowed by law; amounts available for future offsets are recorded as
an asset on the Company's balance sheet. Potential future obligations for
unknown insolvencies are not determinable by the Company. The future
obligation has been based on the most recent information available from the
National Organization of Life and Health Insurance Guaranty Associations. The
Company has established a reserve of $19,662 and $17,901 and an offsetting
premium tax benefit of $7,429 and $7,631 at December 31, 1999 and 1998,
respectively, for its estimated share of future guaranty fund assessments
related to several major insurer insolvencies. The guaranty fund expense
(benefit) was $1,994, $1,985 and $(975) for the years ended December 31, 1999,
1998 and 1997, respectively.

27
<PAGE>

PFL Life Insurance Company

Summary of Investments--Other than
Investments in Related Parties

(Dollars in thousands)
December 31, 1999

SCHEDULE I

<TABLE>
<CAPTION>
Amount at Which
Market Shown in the
Type of Investment Cost(1) Value Balance Sheet
------------------ ---------- --------- ---------------
<S> <C> <C> <C>
Fixed maturities
Bonds:
United States Government and government
agencies and authorities............... $ 195,119 $ 189,752 $ 195,119
States, municipalities and political
subdivisions........................... 545,562 535,945 545,562
Foreign governments..................... 134,584 138,767 134,584
Public utilities........................ 219,791 214,162 219,791
All other corporate bonds............... 3,797,100 3,678,699 3,797,100
Redeemable preferred stock................ 17,074 15,437 17,074
---------- --------- ----------
Total fixed maturities.................... 4,909,230 4,772,762 4,909,230
Equity securities
Common stocks:
Banks, trust and insurance.............. 2,676 2,809 2,809
Industrial, miscellaneous and all
other.................................. 59,137 68,849 68,849
---------- --------- ----------
Total equity securities................... 61,813 71,658 71,658
Mortgage loans on real estate............. 1,339,202 1,339,202
Real estate............................... 41,536 41,536
Real estate acquired in satisfaction of
debt..................................... 16,336 16,336
Policy loans.............................. 59,871 59,871
Other long-term investments............... 123,722 123,722
Cash and short-term investments........... 53,695 53,695
---------- ----------
Total investments......................... $6,605,405 $6,615,250
========== ==========
</TABLE>
(1) Original cost of equity securities and, as to fixed maturities, original
cost reduced by repayments and adjusted for amortization of premiums or
accrual of discounts.

28
<PAGE>

PFL Life Insurance Company

Supplementary Insurance Information
(Dollars in thousands)

SCHEDULE III

<TABLE>
<CAPTION>
Future
Policy Policy
Benefits and
and Unearned Contract
Expenses Premiums Liabilities
---------- -------- -----------
<S> <C> <C> <C>
Year ended December 31, 1999
Individual life................................. $1,550,188 $ -- $ 8,607
Individual health............................... 133,214 10,311 10,452
Group life and health........................... 105,035 8,604 27,088
Annuity......................................... 4,036,751 -- --
---------- ------- -------
$5,825,188 $18,915 $46,147
========== ======= =======
Year ended December 31, 1998
Individual life................................. $1,355,283 $ -- $ 8,976
Individual health............................... 94,294 9,631 12,123
Group life and health........................... 93,405 10,298 36,908
Annuity......................................... 3,925,293 -- --
---------- ------- -------
$5,468,275 $19,929 $58,007
========== ======= =======
Year ended December 31, 1997
Individual life................................. $ 882,003 $ -- $ 8,550
Individual health............................... 62,033 9,207 12,821
Group life and health........................... 88,211 11,892 44,977
Annuity......................................... 4,204,125 -- --
---------- ------- -------
$5,236,372 $21,099 $66,348
========== ======= =======
</TABLE>

29
<PAGE>

PFL Life Insurance Company

Supplementary Insurance Information
(Dollars in thousands)

SCHEDULE III

<TABLE>
<CAPTION>
Benefits,
Claims
Net Losses and Other
Premium Investment Settlement Operating Premiums
Revenue Income* Expenses Expenses* Written
---------- ---------- ---------- --------- --------
<S> <C> <C> <C> <C> <C>
Year ended December 31,
1999
Individual life........... $ 226,456 $104,029 $ 274,730 $141,030 $ --
Individual health......... 77,985 10,036 58,649 35,329 77,716
Group life and health..... 83,639 10,422 61,143 38,075 81,918
Annuity................... 1,413,049 313,062 1,303,537 278,995 --
---------- -------- ---------- --------
$1,801,129 $437,549 $1,698,059 $493,429
========== ======== ========== ========
Year ended December 31,
1998
Individual life........... $ 514,194 $ 85,258 $ 545,720 $ 87,455 $ --
Individual health......... 68,963 8,004 48,144 30,442 68,745
Group life and health..... 111,547 11,426 82,690 54,352 108,769
Annuity................... 667,920 342,296 592,085 298,222 --
---------- -------- ---------- --------
$1,362,624 $446,984 $1,268,639 $470,471
========== ======== ========== ========
Year ended December 31,
1997
Individual life........... $ 200,175 $ 75,914 $ 211,921 $ 36,185 $ --
Individual health......... 63,548 5,934 37,706 29,216 63,383
Group life and health..... 146,694 11,888 103,581 91,568 143,580
Annuity................... 657,695 352,688 571,434 364,216 --
---------- -------- ---------- --------
$1,068,112 $446,424 $ 924,642 $521,185
========== ======== ========== ========
</TABLE>
-------------------------
* Allocations of net investment income and other operating expenses are based
on a number of assumptions and estimates, and the results would change if
different methods were applied.

30
<PAGE>

PFL Life Insurance Company

Reinsurance
(Dollars in thousands)

SCHEDULE IV

<TABLE>
<CAPTION>
Assumed Percentage
Ceded to From of Amount
Gross Other Other Net Assumed
Amount Companies Companies Amount to Net
---------- --------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Year ended December 31,
1999
Life insurance in
force.................. $6,538,901 $(500,192) $415,910 $6,454,619 6.4%
========== ========= ======== ========== ===
Premiums:
Individual life....... $ 227,363 $ 3,967 $ 2,723 $ 226,119 1.2%
Individual health..... 83,489 5,504 -- 77,985 --
Group life and
health............... 205,752 122,113 -- 83,639 --
Annuity............... 1,426,112 12,726 -- 1,413,386 --
---------- --------- -------- ---------- ---
$1,942,716 $ 144,310 $ 2,723 $1,801,129 0.2%
========== ========= ======== ========== ===
Year ended December 31,
1998
Life insurance in
force.................. $6,384,095 $ 438,590 $ 39,116 $5,984,621 .6%
========== ========= ======== ========== ===
Premiums:
Individual life....... $ 515,164 $ 3,692 $ 2,366 $ 513,838 .5%
Individual health..... 76,438 7,475 -- 68,963 --
Group life and
health............... 255,848 144,301 -- 111,547 --
Annuity............... 686,372 18,096 -- 668,276 --
---------- --------- -------- ---------- ---
$1,533,822 $ 173,564 $ 2,366 $1,362,624 .2%
========== ========= ======== ========== ===
Year ended December 31,
1997
Life insurance in
force.................. $5,025,027 $ 420,519 $ 35,486 $4,639,994 .8%
========== ========= ======== ========== ===
Premiums:
Individual life....... $ 201,691 $ 3,554 $ 2,038 $ 200,175 1.0%
Individual health..... 73,593 10,045 -- 63,548 --
Group life and
health............... 339,269 192,575 -- 146,694 --
Annuity............... 697,893 40,198 -- 657,695 --
---------- --------- -------- ---------- ---
$1,312,446 $ 246,372 $ 2,038 $1,068,112 .2%
========== ========= ======== ========== ===
</TABLE>

31
<PAGE>

Financial Statements

PFL Endeavor VA Separate Account -
The Endeavor Variable Annuity

Year ended December 31, 1999
with Report of Independent Auditors
<PAGE>

PFL Endeavor VA Separate Account -
The Endeavor Variable Annuity

Financial Statements

Year ended December 31, 1999

Contents

<TABLE>

<S> <C>
Report of Independent Auditors...................................... 1

Financial Statements

Balance Sheets...................................................... 2
Statements of Operations............................................ 4
Statements of Changes in Contract Owners' Equity.................... 6
Notes to Financial Statements....................................... 11

</TABLE>
<PAGE>

Report of Independent Auditors

The Board of Directors and Contract Owners
of The Endeavor Variable Annuity,
PFL Life Insurance Company

We have audited the accompanying balance sheets of certain subaccounts of PFL
Endeavor VA Separate Account (comprised of the Endeavor Money Market, Endeavor
Asset Allocation, T. Rowe Price International Stock, Endeavor Value Equity,
Dreyfus Small Cap Value, Dreyfus U.S. Government Securities, T. Rowe Price
Equity Income, T. Rowe Price Growth Stock, Endeavor Opportunity Value, Endeavor
Enhanced Index, Endeavor Select 50, Endeavor High Yield, and Endeavor Janus
Growth subaccounts), which are available for investment by contract owners of
The Endeavor Variable Annuity, as of December 31, 1999, and the related
statements of operations for the year then ended and changes in contract owners'
equity for the periods indicated thereon. These financial statements are the
responsibility of the Separate Account's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of mutual fund shares owned as of December 31,
1999, by correspondence with the mutual fund's transfer agent. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of each of the respective
subaccounts of PFL Endeavor VA Separate Account which are available for
investment by contract owners of The Endeavor Variable Annuity at December 31,
1999, and the results of their operations for the year then ended and changes in
their contract owners' equity for the periods indicated thereon in conformity
with accounting principles generally accepted in the United States.

/s/ Ernst & Young LLP

Des Moines, Iowa
January 28, 2000

1
<PAGE>

PFL Endeavor VA Separate Account -
The Endeavor Variable Annuity

Balance Sheets

December 31, 1999

<TABLE>
<CAPTION>
Endeavor Endeavor T. Rowe Price Dreyfus
Money Asset International Endeavor Small Cap
Market Allocation Stock Value Equity Value
Subaccount Subaccount Subaccount Subaccount Subaccount
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets
Cash $ 306 $ 49 $ 52 $ - $ 14
Investments in mutual funds,
at current market value:
Endeavor Series Trust:
Endeavor Money Market Portfolio 87,769,493 - - - -
Endeavor Asset Allocation Portfolio - 349,305,454 - - -
T. Rowe Price International Stock - - 170,059,268 - -
Portfolio
Endeavor Value Equity Portfolio - - - 159,758,990 -
Dreyfus Small Cap Value Portfolio - - - - 133,104,632
Dreyfus U.S. Government Securities
Portfolio - - - - -
T. Rowe Price Equity Income Portfolio - - - - -
T. Rowe Price Growth Stock Portfolio - - - - -
Endeavor Opportunity Value Portfolio - - - - -
Endeavor Enhanced Index Portfolio - - - - -
Endeavor Select 50 Portfolio - - - - -
Endeavor High Yield Portfolio - - - - -
Endeavor Janus Growth Portfolio - - - - -

Total investments in mutual funds 87,769,493 349,305,454 170,059,268 159,758,990 133,104,632
----------- ------------ ------------ ------------ ------------
Total assets $87,769,799 $349,305,503 $170,059,320 $159,758,990 $133,104,646
=========== ============ ============ ============ ============

Liabilities and contract owners' equity
Liabilities:
Contract terminations payable $ - $ - $ - $ 19 $ -
----------- ------------ ------------ ------------ ------------
Total liabilities - - - 19 -

Contract owners' equity:
Deferred annuity contracts terminable
by owners 87,769,799 349,305,503 170,059,320 159,758,971 133,104,646
----------- ------------ ------------ ------------ ------------
Total liabilities and contract owners'
equity $87,769,799 $349,305,503 $170,059,320 $159,758,990 $133,104,646
=========== ============ ============ ============ ============
</TABLE>

See accompanying notes.

<PAGE>

<TABLE>
<CAPTION>
Dreyfus U.S. T. Rowe T. Rowe Endeavor Endeavor Endeavor
Government Price Equity Price Growth Opportunity Enhanced Endeavor Endeavor Janus
Securities Income Stock Value Index Select 50 High Yield Growth
Subaccount Subaccount Subaccount Subaccount Sub-account Subaccount Subaccount Subaccount
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 117 $ 23 $ - $ - $ - $ - $ 21 $ 151
- - - - - - - -
- - - - - - - -
- - - - - - - -
- - - - - - - -
- - - - - - - -

56,544,417 - - - - - - -
- 188,863,195 - - - - - -
- - 163,533,646 - - - - -
- - - 30,177,386 - - - -
- - - - 68,447,367 - - -
- - - - - 21,942,904 - -
- - - - - - 12,353,885 -
- - - - - - - 793,541,887
------------------------------------------------------------------------------------------------------------------------------------
56,544,417 188,863,195 163,533,646 30,177,386 68,447,367 21,942,904 12,353,885 793,541,887
------------------------------------------------------------------------------------------------------------------------------------
$56,544,534 $188,863,218 $163,533,646 $30,177,386 $68,447,367 $21,942,904 $12,353,906 $793,542,038
====================================================================================================================================

$ - $ - $ 24 $ 9 $ 4 $ 454 $ - $ -
------------------------------------------------------------------------------------------------------------------------------------
- - 24 9 4 454 - -

56,544,534 188,863,218 163,533,622 30,177,377 68,447,363 21,942,450 12,353,906 793,542,038
------------------------------------------------------------------------------------------------------------------------------------
$56,544,534 $188,863,218 $163,533,646 $30,177,386 $68,447,367 $21,942,904 $12,353,906 $793,542,038
====================================================================================================================================
</TABLE>

3
<PAGE>

PFL Endeavor VA Separate Account -
The Endeavor Variable Annuity

Statements of Operations

Year ended December 31, 1999

<TABLE>
<CAPTION>
Endeavor Endeavor Dreyfus
Money Asset T. Rowe Price Endeavor Small Cap
Market Allocation International Value Equity Value
Subaccount Subaccount Stock Subaccount Subaccount Subaccount
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net investment income (loss)
Income:
Dividends $ 3,548,603 $ 76,602,884 $ 3,681,637 $ 9,540,409 $12,224,080
Expenses:
Administrative, mortality and
expense risk charges 1,088,322 4,609,654 2,105,452 2,583,033 1,737,153
----------------------------------------------------------------------------------------
Net investment income (loss) 2,460,281 71,993,230 1,576,185 6,957,376 10,486,927

Net realized and unrealized capital
gain (loss) from investments
Net realized capital gain (loss)
from sales of investments:
Proceeds from sales 59,680,010 54,875,239 25,328,592 33,738,458 24,494,652
Cost of investments sold 59,680,010 36,918,146 18,224,997 17,534,592 18,879,862
----------------------------------------------------------------------------------------
Net realized capital gain (loss)
from sales of investments - 17,957,093 7,103,595 16,203,866 5,614,790

Net change in unrealized
appreciation/depreciation of
investments:
Beginning of the period - 94,839,308 29,398,690 47,733,402 610,980
End of the period - 76,366,310 61,364,281 17,161,909 13,780,787
----------------------------------------------------------------------------------------
Net change in unrealized
appreciation/depreciation of
investments - (18,472,998) 31,965,591 (30,571,493) 13,169,807
----------------------------------------------------------------------------------------
Net realized and unrealized capital
gain (loss) from investments - (515,905) 39,069,186 (14,367,627) 18,784,597
----------------------------------------------------------------------------------------
Increase (decrease) from operations $ 2,460,281 $ 71,477,325 $40,645,371 $ (7,410,251) $29,271,524
========================================================================================
</TABLE>

(1) For the period January 1, 1999 through April 30, 1999, activity reflected in
this subaccount is related to investments in the Growth Portfolio of the WRL
Series Fund, Inc. As of the close of business on April 30, 1999, the
investments in the Growth Portfolio of the WRL Series Fund, Inc. were
replaced by investments in the Endeavor Janus Growth Portfolio of the
Endeavor Series Trust. The investment results of the Endeavor Janus Growth
Portfolio of the Endeavor Series Trust are reflected in this subaccount for
the period May 1, 1999 through December 31, 1999.

See accompanying notes.

4
<PAGE>

<TABLE>
<CAPTION>
T. Rowe
Dreyfus U.S Price T. Rowe Endeavor Endeavor Endeavor
Government Equity Price Growth Opportunity Enhanced Endeavor Endeavor Janus
Securities Income Stock Value Index Select 50 High Yield Growth
Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount (1)
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 3,456,066 $ 12,641,601 $11,815,554 $ 618,805 $ 2,174,860 $ - $170,102 $ -

854,883 2,882,892 2,083,598 459,082 746,374 218,284 149,944 8,711,294
-----------------------------------------------------------------------------------------------------------------------
2,601,183 9,758,709 9,731,956 159,723 1,428,486 (218,284) 20,158 (8,711,294)

13,840,180 26,989,554 20,040,306 5,864,428 5,820,430 4,230,767 1,787,696 60,582,739
13,010,488 17,640,149 10,860,992 4,818,708 4,049,743 3,692,961 1,797,166 22,521,113
-----------------------------------------------------------------------------------------------------------------------

829,692 9,349,405 9,179,314 1,045,720 1,770,687 537,806 (9,470) 38,061,626

3,299,771 32,402,901 40,241,014 1,717,937 5,456,345 367,289 (101,578) 230,450,414
(1,515,521) 17,553,340 49,303,492 1,559,779 10,085,427 6,324,425 248,969 489,322,707
-----------------------------------------------------------------------------------------------------------------------

(4,815,292) (14,849,561) 9,062,478 (158,158) 4,629,082 5,957,136 350,547 258,872,293
-----------------------------------------------------------------------------------------------------------------------
(3,985,600) (5,500,156) 18,241,792 887,562 6,399,769 6,494,942 341,077 296,933,919
-----------------------------------------------------------------------------------------------------------------------
$(1,384,417) $ 4,258,553 $27,973,748 $1,047,285 $ 7,828,255 $6,276,658 $361,235 $288,222,625
=======================================================================================================================
</TABLE>

5
<PAGE>

PFL Endeavor VA Separate Account -
The Endeavor Variable Annuity

Statements of Changes in Contract Owners' Equity

Years ended December 31, 1999 and 1998, except as noted

<TABLE>
<CAPTION>
Endeavor Money
Market Subaccount
--------------------------------------
1999 1998
--------------------------------------
<S> <C> <C>
Operations:
Net investment income (loss) $ 2,460,281 $ 1,850,977
Net realized capital gain (loss) - -
Net change in unrealized appreciation/depreciation of investments - -
--------------------------------------
Increase (decrease) from operations 2,460,281 1,850,977

Contract transactions:
Net contract purchase payments 4,184,404 10,252,467
Transfer payments from (to) other subaccounts or general account 47,398,164 48,735,402
Contract terminations, withdrawals and other deductions (34,541,331) (28,079,774)
--------------------------------------
Increase (decrease) from contract transactions 17,041,237 30,908,095
--------------------------------------
Net increase (decrease) in contract owners' equity 19,501,518 32,759,072

Contract owners' equity:
Beginning of the period 68,268,281 35,509,209
--------------------------------------
End of the period $ 87,769,799 $ 68,268,281
======================================
</TABLE>

(1) Commencement of operations, February 2, 1998.
(2) Commencement of operations, June 2, 1998.
(3) For the period January 1, 1999 through April 30, 1999 and the year ended
December 31, 1998 activity reflected in this subaccount is related to
investments in the Growth Portfolio of the WRL Series Fund, Inc. As of the
close of business on April 30, 1999, the investments in the Growth Portfolio
of the WRL Series Fund, Inc. were replaced by investments in the Endeavor
Janus Growth Portfolio of the Endeavor Series Trust. The investment results
and contract transactions of the Endeavor Janus Growth Portfolio of the
Endeavor Series Trust are reflected in this subaccount for the period May 1,
1999 through December 31, 1999.

See accompanying notes.

6
<PAGE>

<TABLE>
<CAPTION>
Endeavor Asset T. Rowe Price International Stock Endeavor Value Equity Dreyfus Small Cap
Allocation Subaccount Subaccount Subaccount Value Subaccount
-----------------------------------------------------------------------------------------------------------------------------------
1999 1998 1999 1998 1999 1998 1999 1998
-----------------------------------------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C> <C> <C>
$ 71,993,230 $ 25,143,462 $ 1,576,185 $ 24,018 $ 6,957,376 $ 2,551,531 $ 10,486,927 $ 14,348,570
17,957,093 15,368,540 7,103,595 5,372,820 16,203,866 10,309,441 5,614,790 4,605,936
(18,472,998) 5,120,954 31,965,591 13,186,784 (30,571,493) (2,402,866) 13,169,807 (23,635,805)
-----------------------------------------------------------------------------------------------------------------------------------
71,477,325 45,632,956 40,645,371 18,583,622 (7,410,251) 10,458,106 29,271,524 (4,681,299)

6,364,673 7,751,120 2,805,336 3,549,278 3,362,496 7,892,609 3,670,073 4,884,428
1,734,481 9,885,194 (5,687,984) (1,391,049) (8,727,249) 8,030,869 (5,159,567) 5,631,072
(43,171,489) (30,807,589) (16,570,536) (11,831,109) (19,605,766) (11,097,586) (13,561,181) (8,711,899)
-----------------------------------------------------------------------------------------------------------------------------------
(35,072,355) (13,171,275) (19,453,184) (9,672,880) (24,970,519) 4,825,892 (15,050,675) 1,803,601
-----------------------------------------------------------------------------------------------------------------------------------
36,404,990 32,461,681 21,192,187 8,910,742 (32,380,770) 15,283,998 14,220,849 (2,877,698)

312,900,513 280,438,832 148,867,133 139,956,391 192,139,741 176,855,743 118,883,797 121,761,495
-----------------------------------------------------------------------------------------------------------------------------------
$349,305,503 312,900,513 $170,059,320 $148,867,133 $159,758,971 $192,139,741 $133,104,646 $118,883,797
===================================================================================================================================
</TABLE>

7
<PAGE>

PFL Endeavor VA Separate Account -
The Endeavor Variable Annuity

Statements of Changes in Contract Owners' Equity (continued)

<TABLE>
<CAPTION>
Dreyfus U. S. Government T. Rowe Price Equity
Securities Subaccount Income Subaccount
----------------------------------------- ----------------------------------------
1999 1998 1999 1998
----------------------------------------- ----------------------------------------
<S> <C> <C> <C> <C>
Operations:
Net investment income (loss) $ 2,601,183 $ 810,004 $ 9,758,709 $ 6,381,651
Net realized capital gain (loss) 829,692 718,636 9,349,405 6,137,656
Net change in unrealized appreciation/
depreciation of investments (4,815,292) 1,220,284 (14,849,561) (196,177)
----------------------------------------- ----------------------------------------
Increase (decrease) from operations (1,384,417) 2,748,924 4,258,553 12,323,130

Contract transactions:
Net contract purchase payments 1,716,035 2,893,052 6,428,097 10,487,935
Transfer payments from (to) other
subaccounts or general account 2,442,635 20,635,333 (5,080,402) 24,359,021

Contract terminations, withdrawals and other
deductions (5,861,230) (4,191,885) (15,380,492) (9,469,152)
----------------------------------------- ----------------------------------------
Increase (decrease) from contract transactions (1,702,560) 19,336,500 (14,032,797) 25,377,804
----------------------------------------- ----------------------------------------
Net increase (decrease) in contract owners'
equity (3,086,977) 22,085,424 (9,774,244) 37,700,934

Contract owners' equity:
Beginning of the period 59,631,511 37,546,087 198,637,462 160,936,528
----------------------------------------- ----------------------------------------
End of the period $56,544,534 $59,631,511 $188,863,218 $198,637,462
========================================= ========================================
</TABLE>

See accompanying notes.

8
<PAGE>

<TABLE>
<CAPTION>
T. Rowe Price Growth Endeavor Opportunity Endeavor Enhanced Endeavor Select 50
Stock Subaccount Value Subaccount Index Subaccount Subaccount
------------------------- -------------------------- ----------------------------- ------------------------------
1999 1998 1999 1998 1999 1998 1999 1998 (1)
------------------------- -------------------------- ----------------------------- ------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 9,731,956 $ 3,348,013 $ 159,723 $ (76,618) $ 1,428,486 $ (237,009) $ (218,284) $ (148,106)
9,179,314 5,402,575 1,045,720 332,516 1,770,687 2,009,971 537,806 6,008

9,062,478 18,529,523 (158,158) 436,100 4,629,082 4,248,929 5,957,136 367,289
------------------------- -------------------------- ----------------------------- ------------------------------
27,973,748 27,280,111 1,047,285 691,998 7,828,255 6,021,891 6,276,658 225,191

8,010,794 8,063,881 1,303,197 2,772,444 12,507,712 5,091,422 1,452,753 5,104,909

3,127,443 12,046,608 339,147 7,579,451 16,950,842 9,494,972 1,496,379 8,520,254

(12,068,091) (5,988,744) (3,118,939) (1,036,786) (2,415,680) (770,341) (987,398) (146,296)
------------------------- -------------------------- ----------------------------- ------------------------------
(929,854) 14,121,745 (1,476,595) 9,315,109 27,042,874 13,816,053 1,961,734 13,478,867
------------------------- -------------------------- ----------------------------- ------------------------------

27,043,894 41,401,856 (429,310) 10,007,107 34,871,129 19,837,944 8,238,392 13,704,058

136,489,728 95,087,872 30,606,687 20,599,580 33,576,234 13,738,290 13,704,058 -
------------------------- -------------------------- ----------------------------- ------------------------------
$163,533,622 $136,489,728 $ 30,177,377 $30,606,687 $ 68,447,363 $ 33,576,234 $ 21,942,450 $ 13,704,058
========================= ========================== ============================= ==============================
</TABLE>

9
<PAGE>

PFL Endeavor VA Separate Account -
The Endeavor Variable Annuity

Statements of Changes in Contract Owners' Equity (continued)

<TABLE>
<CAPTION>
Endeavor High Endeavor Janus
Yield Subaccount Growth Subaccount
-------------------------- ---------------------------
1999 1998 (2) 1999 (3) 1998
-------------------------- ---------------------------
<S> <C> <C> <C> <C>
Operations:
Net investment income (loss) $ 20,158 $ (44,824) $ (8,711,294) $ (1,416,394)
Net realized capital gain (loss) (9,470) (9,818) 38,061,626 19,922,296
Net change in unrealized appreciation/ depreciation
of investments 350,547 (101,578) 258,872,293 179,762,559
-------------------------- ---------------------------
Increase (decrease) from operations 361,235 (156,220) 288,222,625 198,268,461

Contract transactions:
Net contract purchase payments 1,140,835 915,210 33,583,885 13,619,696
Transfer payments from (to) other subaccounts or
general account 4,234,193 6,321,348 33,455,083 5,207,304
Contract terminations, withdrawals and other
deductions (435,785) (26,910) (73,853,110) (32,150,881)
-------------------------- ---------------------------
Increase (decrease) from contract transactions 4,939,243 7,209,648 (6,814,142) (13,323,881)
-------------------------- ---------------------------
Net increase (decrease) in contract owners' equity 5,300,478 7,053,428 281,408,483 184,944,580

Contract owners' equity:
Beginning of the period 7,053,428 - 512,133,555 327,188,975
-------------------------- ---------------------------
End of the period $12,353,906 $7,053,428 $793,542,038 $512,133,555
========================== ===========================
</TABLE>

See accompanying notes.

10
<PAGE>

PFL Endeavor VA Separate Account -
The Endeavor Variable Annuity

Notes to Financial Statements

December 31, 1999

1. Organization and Summary of Significant Accounting Policies

Organization

The PFL Endeavor VA Separate Account (the "Mutual Fund Account") is a segregated
investment account of PFL Life Insurance Company ("PFL Life"), an indirect
wholly-owned subsidiary of AEGON N.V., a holding company organized under the
laws of The Netherlands.

The Mutual Fund Account is registered with the Securities and Exchange
Commission as a Unit Investment Trust pursuant to provisions of the Investment
Company Act of 1940. The Mutual Fund Account consists of sixteen investment
subaccounts, thirteen of which are invested in specified portfolios of the
Endeavor Series Trust (the "Series Fund"). Activity in these thirteen investment
subaccounts is available to contract owners of The Endeavor Variable Annuity,
The Endeavor Platinum Variable Annuity and The Endeavor ML Variable Annuity,
also issued by PFL Life. The amounts reported herein represent the activity
related to contract owners of The Endeavor Variable Annuity only. The remaining
three subaccounts (not included herein), are available to the contract owners of
The Endeavor ML Variable Annuity.

Prior to April 30, 1999, the Growth Portfolio of the WRL Series Fund, Inc. was
available to contract owners of the AUSA Endeavor Variable Annuity as an
investment option. As of the close of business on April 30, 1999, all shares of
the Growth Portfolio of the WRL Series Fund, Inc. were exchanged for shares of
the Endeavor Janus Growth Portfolio of the Endeavor Series Trust. This exchange
had no impact at the date of transfer on investments in mutual funds or total
contract owners' equity. The Endeavor Select 50 Subaccount and the Endeavor High
Yield Subaccount commenced operations on February 2, 1998 and June 2, 1998,
respectively.

Investments

Net purchase payments received by the Mutual Fund Account for the Endeavor
Variable Annuity are invested in the portfolios of the Series Fund as selected
by the contract owner. Investments are stated at the closing net asset values
per share on December 31, 1999.

Realized capital gains and losses from sale of shares in the Series Fund are
determined on the first-in, first-out basis. Investment transactions are
accounted for on the trade date (date the order to buy or sell is executed) and
dividend income is recorded on the ex-dividend date. Unrealized gains or losses
from investments in the Series Funds are credited or charged to contract owners'
equity.

Dividend Income

Dividends received from the Series Fund investments are reinvested to purchase
additional mutual fund shares.

11
<PAGE>

PFL Endeavor VA Separate Account -
The Endeavor Variable Annuity

Notes to Financial Statements (continued)

2. Investments

A summary of the mutual fund investments at December 31, 1999 follows:

<TABLE>
<CAPTION>
Net Asset
Number of Value Per
Shares Held Share Market Value Cost
----------------------------------------------------------------------------------
Endeavor Series Trust:
<S> <C> <C> <C> <C>
Endeavor Money Market Portfolio 87,769,493.420 $ 1.00 $ 87,769,493 $ 87,769,493
Endeavor Asset Allocation Portfolio 15,260,177.093 22.89 349,305,454 272,939,144
T. Rowe Price International Stock
Portfolio 8,144,600.937 20.88 170,059,268 108,694,987
Endeavor Value Equity Portfolio 7,991,945.475 19.99 159,758,990 142,597,081
Dreyfus Small Cap Value Portfolio 8,062,061.314 16.51 133,104,632 119,323,845
Dreyfus U. S. Government Securities
Portfolio 4,904,112.530 11.53 56,544,417 58,059,938
T. Rowe Price Equity Income Portfolio 9,685,292.055 19.50 188,863,195 171,309,855
T. Rowe Price Growth Stock Portfolio 5,690,105.985 28.74 163,533,646 114,230,154
Endeavor Opportunity Value Portfolio 2,402,658.133 12.56 30,177,386 28,617,607
Endeavor Enhanced Index Portfolio 3,769,128.129 18.16 68,447,367 58,361,940
Endeavor Select 50 Portfolio 1,392,316.226 15.76 21,942,904 15,618,479
Endeavor High Yield Portfolio 1,224,369.214 10.09 12,353,885 12,104,916
Endeavor Janus Growth Portfolio 8,320,665.694 95.37 793,541,887 304,219,180
</TABLE>

The aggregate cost of purchases and proceeds from sales of investments were as
follows:

<TABLE>
<CAPTION>
Period ended December 31
1999 1998
------------------------------------------ ----------------------------------------
Purchases Sales Purchases Sales
------------------------------------------ ----------------------------------------
<S> <C> <C> <C> <C>
Endeavor Series Trust:
Endeavor Money Market Portfolio $79,180,868 $59,680,010 $82,754,569 $49,994,502
Endeavor Asset Allocation Portfolio 91,796,111 54,875,239 52,695,950 40,723,979
T. Rowe Price International Stock
Portfolio 7,451,505 25,328,592 13,850,183 23,499,007
Endeavor Value Equity Portfolio 15,725,334 33,738,458 27,742,865 20,365,515
Dreyfus Small Cap Value Portfolio 19,930,871 24,494,652 34,791,919 18,639,922
Dreyfus U. S. Government Securities
Portfolio 14,738,690 13,840,180 28,831,445 8,684,956
T. Rowe Price Equity Income Portfolio 22,715,419 26,989,554 46,857,838 15,098,466
T. Rowe Price Growth Stock Portfolio 28,842,407 20,040,306 29,825,835 12,356,125
Endeavor Opportunity Value Portfolio 4,547,566 5,864,428 11,936,643 2,698,237
Endeavor Enhanced Index Portfolio 34,291,788 5,820,430 21,223,496 7,644,832
Endeavor Select 50 Portfolio 5,974,395 4,230,767 14,447,584 1,116,547
Endeavor High Yield Portfolio 6,747,061 1,787,696 7,387,605 222,766
Endeavor Janus Growth Portfolio 45,057,140 60,582,739 32,159,664 46,900,164
</TABLE>

12
<PAGE>

PFL Endeavor VA Separate Account -
The Endeavor Variable Annuity

Notes to Financial Statements (continued)

3. Contract Owners' Equity

Contract owners' equity in the Endeavor Money Market and Endeavor High Yield
Subaccounts include amounts of $1,837,619 and $4,012,308, respectively, which
represent the current market value of PFL Life's capital contribution to the
Subaccounts. A summary of deferred annuity contracts terminable by owners at
December 31, 1999 follows:

<TABLE>
<CAPTION>
Return of Premium Death Benefit
--------------------------------------------------------------------
Accumulation Accumulation Total Contract
Subaccount Units Owned Unit Value Value
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Endeavor Money Market 57,250,677.280 $ 1.280646 $ 73,317,851
Endeavor Asset Allocation 100,119,683.393 3.160924 316,470,710
T. Rowe Price International Stock 77,283,279.960 2.001071 154,649,330
Endeavor Value Equity 66,030,029.169 2.115695 139,699,403
Dreyfus Small Cap Value 49,653,848.359 2.278888 113,155,559
Dreyfus U. S. Government Securities 38,368,703.838 1.255919 48,187,984
T. Rowe Price Equity Income 74,445,822.349 2.107761 156,914,001
T. Rowe Price Growth Stock 42,063,488.642 3.124914 131,444,785
Endeavor Opportunity Value 16,283,827.424 1.240246 20,195,952
Endeavor Enhanced Index 20,376,496.984 1.838549 37,463,188
Endeavor Select 50 8,189,238.812 1.534754 12,568,467
Endeavor High Yield 8,977,276.504 1.003083 9,004,953
Endeavor Janus Growth 13,723,324.372 50.054351 686,912,095
</TABLE>

<TABLE>
<CAPTION>
5% Annually Compounding Death Benefit and
Double Enhanced Death Benefit
--------------------------------------------------------------------
Accumulation Accumulation Total Contract
Subaccount Units Owned Unit Value Value
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Endeavor Money Market 11,328,428.234 $ 1.275724 $ 14,451,948
Endeavor Asset Allocation 10,427,868.661 3.148754 32,834,793
T. Rowe Price International Stock 7,730,718.841 1.993345 15,409,990
Endeavor Value Equity 9,518,037.409 2.107532 20,059,568
Dreyfus Small Cap Value 8,787,718.359 2.270110 19,949,087
Dreyfus U. S. Government Securities 6,668,600.311 1.253119 8,356,550
T. Rowe Price Equity Income 15,216,376.264 2.099660 31,949,217
T. Rowe Price Growth Stock 10,308,335.059 3.112902 32,088,837
Endeavor Opportunity Value 8,078,978.665 1.235481 9,981,425
Endeavor Enhanced Index 16,917,672.030 1.831468 30,984,175
Endeavor Select 50 6,125,056.867 1.530432 9,373,983
Endeavor High Yield 3,346,479.952 1.000739 3,348,953
Endeavor Janus Growth 2,138,499.285 49.862043 106,629,943
</TABLE>

13
<PAGE>

PFL Endeavor VA Separate Account -
The Endeavor Variable Annuity

Notes to Financial Statements (continued)

3. Contract Owners' Equity (continued)

A summary of changes in contract owners' account units follows:

<TABLE>
<CAPTION>
Endeavor Endeavor T. Rowe Price Endeavor Dreyfus
Money Asset International Value Small Cap
Market Allocation Stock Equity Value
Subaccount Subaccount Subaccount Subaccount Subaccount
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Units outstanding at January 1, 1998 29,680,499 129,120,246 103,938,710 84,779,299 65,775,715
Units purchased 8,780,066 5,319,799 3,151,691 4,863,625 3,936,590
Units redeemed and transferred 16,623,834 (11,034,077) (9,969,270) (2,797,418) (3,128,145
----------------------------------------------------------------------------------------
Units outstanding December 31, 1998 55,084,399 123,405,968 97,121,131 86,845,506 66,584,160
Units purchased 3,406,737 2,967,300 2,046,384 1,734,534 2,019,432
Units redeemed and transferred 10,087,970 (15,825,716) (14,153,516) (13,031,973) (10,162,025)
Units outstanding December 31, 1999 68,579,106 110,547,552 85,013,999 75,548,067 58,441,567
========================================================================================
</TABLE>

<TABLE>
<CAPTION>
Dreyfus U. S. T. Rowe T. Rowe Endeavor Endeavor
Government Price Equity Price Growth Opportunity Enhanced
Securities Income Stock Value Index
Subaccount Subaccount Subaccount Subaccount Subaccount
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Units outstanding at January 1, 1998 30,902,060 83,605,957 46,533,877 17,806,975 11,284,439
Units purchased 3,937,425 7,850,910 5,170,894 3,193,899 4,678,116
Units redeemed and transferred 11,516,022 4,735,878 947,291 4,519,888 5,336,246
---------------------------------------------------------------------------------------
Units outstanding December 31, 1998 46,355,507 96,192,745 52,652,062 25,520,762 21,298,801
Units purchased 1,567,405 3,381,703 3,431,517 1,334,281 8,076,870
Units redeemed and transferred (2,885,608) (9,912,249) (3,711,755) (2,492,237) 7,918,498
Units outstanding December 31, 1999 45,037,304 89,662,199 52,371,824 24,362,806 37,294,169
=======================================================================================
</TABLE>

<TABLE>
<CAPTION>
Endeavor Select Endeavor High Endeavor Janus
50 Subaccount Yield Subaccount Growth Subaccount
---------------------------------------------------------

<S> <C> <C> <C>
Units outstanding at January 1, 1998 - - 16,638,302
Units purchased 5,148,085 1,503,092 769,674
Units redeemed and transferred 7,878,677 5,836,012 (1,350,291)
---------------------------------------------------------
Units outstanding December 31, 1998 13,026,762 7,339,104 16,057,685
Units purchased 1,268,526 1,300,049 965,658
Units redeemed and transferred 19,008 3,684,603 (1,161,519)
Units outstanding December 31, 1999 14,314,296 12,323,756 15,861,824
=========================================================
</TABLE>

14
<PAGE>

PFL Endeavor VA Separate Account -
The Endeavor Variable Annuity

Notes to Financial Statements (continued)

4. Administrative, Mortality and Expense Risk Charges

Administrative charges include an annual charge of the lesser of 2% of the
policy value or $35 per contract which will commence on the first policy
anniversary of each contract owner's account. For policies issued on or after
May 1, 1995, this charge is waived if the sum of the premium payments less the
sum of all partial withdrawals equals or exceeds $50,000 on the policy
anniversary. Charges for administrative fees to the variable annuity contracts
are an expense of the Mutual Fund Account. PFL Life also deducts a daily charge
equal to an annual rate .15% of the contract owner's account for administrative
expenses. For certain policies sold on or after May 1, 1997 during the first
seven policy years, PFL Life deducts a daily distribution finance charge equal
to an effective rate of .15% of the contract owner's account.

PFL Life deducts a daily charge for assuming certain mortality and expense
risks. For the 5% Annual Compounding Death Benefit and the Double Enhanced Death
Benefit, this charge is equal to an effective annual rate of 1.25% of the value
of the contract owner's individual account. For the Retirement Premium Death
Benefit, the corresponding charge is equal to an effective annual rate of 1.10%
of the value of the contract owner's individual account.

5. Taxes

Operations of the Mutual Fund Account form a part of PFL Life, which is taxed as
a life insurance company under Subchapter L of the Internal Revenue Code of
1986, as amended (the "Code"). The operations of the Mutual Fund Account are
accounted for separately from other operations of PFL Life for purposes of
federal income taxation. The Mutual Fund Account is not separately taxable as a
regulated investment company under Subchapter M of the Code and is not otherwise
taxable as an entity separate from PFL Life. Under existing federal income tax
laws, the income of the Mutual Fund Account, to the extent applied to increase
reserves under the variable annuity contracts, is not taxable to PFL Life.
<PAGE>

THE ENDEAVOR ML
VARIABLE ANNUITY

Issued Through

PFL ENDEAVOR VA SEPARATE ACCOUNT
by
PFL LIFE INSURANCE COMPANY

Prospectus

October 9, 2000

This prospectus and the mutual fund prospectuses give you important
information about the policies and the mutual funds. Please read them
carefully before you invest and keep them for future reference.

If you would like more information about The Endeavor ML Variable Annuity
policy, you can obtain a free copy of the Statement of Additional Information
(SAI) dated October 9, 2000. Please call us at (800) 525-6205 or write us at:
PFL Life Insurance Company, Financial Markets Division, Variable Annuity
Department, 4333 Edgewood Road N.E., Cedar Rapids, Iowa, 52499-0001. A
registration statement, including the SAI, has been filed with the Securities
and Exchange Commission (SEC) and is incorporated herein by reference.
Information about this variable annuity can be reviewed and copied at the
SEC's Public Reference Room in Washington, D.C. You may obtain information
about the operation of the public reference room by calling the SEC at 1-800-
SEC-0330. The SEC also maintains a web site (http://www.sec.gov) that contains
the prospectus, the SAI, material incorporated by reference, and other
information. The table of contents of the SAI is included at the end of this
prospectus.

The Securities and Exchange Commission has not approved or disapproved these
securities, or passed upon the adequacy of this prospectus. Any representation
to the contrary is a criminal offense.

This flexible premium deferred (group or individual) annuity policy has many
investment choices. There is a separate account that currently offers thirty-
four mutual fund portfolios from the underlying funds listed below. There is
also a fixed account, which offers interest at rates that are guaranteed by
PFL Life Insurance Company (PFL). You can choose any combination of these
investment choices. You bear the entire investment risk for all amounts you
put in the separate account.

MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
Merrill Lynch Basic Value Focus Fund
Merrill Lynch High Current Income Fund
Merrill Lynch Developing Capital Markets Focus Fund

ENDEAVOR SERIES TRUST

Capital Guardian Global Portfolio

Capital Guardian U.S. Equity Portfolio

Capital Guardian Value Portfolio
Dreyfus Small Cap Value Portfolio
Dreyfus U.S. Government Securities Portfolio
Endeavor Asset Allocation Portfolio
Endeavor Money Market Portfolio
Endeavor Enhanced Index Portfolio
Endeavor High Yield Portfolio
Endeavor Janus Growth Portfolio

Jennison Growth Portfolio
T. Rowe Price Equity Income Portfolio
T. Rowe Price Growth Stock Portfolio
T. Rowe Price International Stock Portfolio

JANUS ASPEN SERIES - SERVICE SHARES

Janus Aspen - Aggressive Growth Portfolio

Janus Aspen - Strategic Value Portfolio

Janus Aspen - Worldwide Growth Portfolio

TRANSAMERICA VARIABLE INSURANCE FUND, INC.
Transamerica VIF Growth Portfolio

VARIABLE INSURANCE PRODUCTS FUND (VIP) - SERVICE CLASS 2
Fidelity - VIP Equity-Income Portfolio

VARIABLE INSURANCE PRODUCTS FUND II (VIP II) - SERVICE CLASS 2
Fidelity - VIP II Contrafund(R) Portfolio

VARIABLE INSURANCE PRODUCTS FUND III (VIP III) - SERVICE CLASS 2
Fidelity - VIP III Growth Opportunities Portfolio
Fidelity - VIP III Mid Cap Portfolio

WRL SERIES FUND, INC.
WRL Alger Aggressive Growth

WRL Gabelli Global Growth
WRL Goldman Sachs Growth

WRL Great Companies - Global/2/
WRL NWQ Value Equity
WRL Pilgrim Baxter Mid Cap Growth
WRL Salomon All Cap
WRL T. Rowe Price Dividend Growth
WRL T. Rowe Price Small Cap
<PAGE>

<TABLE>
<CAPTION>
TABLE OF CONTENTS Page

<S> <C>
GLOSSARY OF TERMS.......................................................... 3

SUMMARY.................................................................... 4

ANNUITY POLICY FEE TABLE................................................... 8

EXAMPLES................................................................... 11

1.THE ANNUITY POLICY....................................................... 14

2.PURCHASE................................................................. 14
Policy Issue Requirements................................................ 14
Premium Payments......................................................... 14
Initial Premium Requirements............................................. 14
Additional Premium Payments.............................................. 15
Maximum Total Premium Payments........................................... 15
Allocation of Premium Payments........................................... 15
Policy Value............................................................. 15

3.INVESTMENT CHOICES....................................................... 15
The Separate Account..................................................... 15
The Fixed Account........................................................ 17
Transfers................................................................ 17

4.PERFORMANCE.............................................................. 18

5.EXPENSES................................................................. 18
Surrender Charges........................................................ 18
Excess Interest Adjustment............................................... 19
Mortality and Expense Risk Fee........................................... 19
Administrative Charges................................................... 20
Premium Taxes............................................................ 20
Federal, State and Local Taxes........................................... 20
Transfer Fee............................................................. 20
Family Income Protector.................................................. 20
Portfolio Management Fees................................................ 20

6.ACCESS TO YOUR MONEY..................................................... 20
Withdrawals.............................................................. 20
Delay of Payment and Transfers........................................... 21
Excess Interest Adjustment............................................... 21

7. ANNUITY PAYMENTS (THE INCOME PHASE)..................................... 21
Annuity Payment Options.................................................. 22

8.DEATH BENEFIT............................................................ 23
When We Pay A Death Benefit.............................................. 23
When We Do Not Pay A Death Benefit....................................... 24
Amount of Death Benefit.................................................. 24
Guaranteed Minimum Death Benefit......................................... 24
Adjusted Partial Withdrawal.............................................. 25
</TABLE>

<TABLE>
<S> <C>
9.TAXES.................................................................... 25
Annuity Policies in General.............................................. 25
Qualified and Nonqualified Policies...................................... 26
Withdrawals--Qualified Policies.......................................... 26
Withdrawals--403(b) Policies............................................. 26
Diversification and Distribution Requirements............................ 27
Withdrawals--Nonqualified Policies....................................... 27
Taxation of Death Benefit Proceeds....................................... 27
Annuity Payments......................................................... 27
Transfers, Assignments or Exchanges of Policies.......................... 28
Possible Tax Law Changes................................................. 28

10.ADDITIONAL FEATURES..................................................... 28
Systematic Payout Option................................................. 28
Family Income Protector.................................................. 28
Nursing Care and Terminal Condition Withdrawal Option ................... 30
Unemployment Waiver...................................................... 30
Telephone Transactions................................................... 31
Dollar Cost Averaging Program............................................ 31
Asset Rebalancing........................................................ 32

11.OTHER INFORMATION....................................................... 32
Ownership................................................................ 32
Assignment............................................................... 32
PFL Life Insurance Company............................................... 32
The Separate Account..................................................... 32
Mixed and Shared Funding................................................. 33
Reinstatements........................................................... 33
Voting Rights............................................................ 33
Distributor of the Policies.............................................. 33
Variations in Policy Provisions.......................................... 33
IMSA..................................................................... 33
Legal Proceedings........................................................ 34
Financial Statements..................................................... 34

TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION............... 34

APPENDIX A
Condensed Financial Information............................................ 35

APPENDIX B
Historical Performance Data................................................ 40

APPENDIX C
Policy Variations.......................................................... 53
</TABLE>

2
<PAGE>

GLOSSARY OF TERMS

Accumulation Unit--An accounting unit of measure used in calculating the policy
value in the separate account before the annuity commencement date.

Adjusted Policy Value--The policy value increased or decreased by any excess
interest adjustment.

Annuitant--The person during whose life any annuity payments involving life
contingencies will continue.

Annuity Payment Option--A method of receiving a stream of annuity payments
selected by the owner.

Cash Value--The adjusted policy value less any applicable surrender charge.

Excess Interest Adjustment--A positive or negative adjustment to amounts
withdrawn upon partial withdrawals, full surrenders, transfers, or to amounts
applied to annuity payment options, from the guaranteed period options. The
adjustment reflects changes in the interest rates declared by PFL since the
date any payment was received by, or an amount was transferred to, the
guaranteed period option. The excess interest adjustment can either decrease or
increase the amount to be received by the owner upon full surrender or
commencement of annuity payments, depending upon whether there has been an
increase or decrease in interest rates, respectively.

Fixed Account--One or more investment choices under the policy that are part of
PFL's general assets and are not in the separate account.

Guaranteed Period Options--The various guaranteed interest rate periods of the
fixed account which PFL may offered and into which premium payments may be paid
or amounts transferred.

Monthly Anniversary--The same date in each succeeding month as the policy date.
For purposes of the variable account, whenever the monthly anniversary falls on
a date other than the valuation date, the monthly anniversary will be deemed to
be the next valuation date.

Owner--Depending upon the state of issue, owner means either:
. the individual or entity that owns a certificate under a group contract; or
. the individual or entity that owns an individual policy.

Policy--Depending upon the state of issue, policy means either:
. the individual certificate under a group contract; or
. the individual policy.

. accumulated gains or losses in the separate account; minus

. losses in the separate account; minus
. service charges, rider fees, premium taxes, and transfer fees, if any.

Policy Year--A policy year begins on the policy date and on each policy
anniversary.

Subaccount--A subdivision within the separate account, the assets of which are
invested in separate portfolios of the underlying funds.

(Note: The SAI contains
a more extensive Glossary.)

3
<PAGE>

SUMMARY

The sections in this summary correspond to sections in this prospectus, which
discuss the topics in more detail.

1.THE ANNUITY POLICY

The flexible premium variable annuity policy offered by PFL Life Insurance
Company (PFL, we, us or our) provides a way for you to invest on a tax-deferred
basis in the following investment choices: thirty-four subaccounts of the
separate account and a fixed account of PFL. The policy is intended to
accumulate money for retirement or other long-term investment purposes.

This policy currently offers thirty-four subaccounts in the separate account
that are listed in Section 3. Each subaccount invests exclusively in shares of
one of the portfolios of the underlying funds. The policy value may depend on
the investment experience of the selected subaccounts. Therefore, you bear the
entire investment risk with respect to all policy value in any subaccount. You
could lose the amount that you invest.

The fixed account offers an interest rate that PFL guarantees. We guarantee to
return your investment with at least 3% annual interest credited for all
amounts allocated to the fixed account.

You can transfer money between any of the investment choices. We reserve the
right to impose a $10 fee for each transfer in excess of 12 transfers per
policy year.

2.PURCHASE

You can buy a nonqualified policy with $5,000 or more, and a qualified policy
with $1,000 or more, under most circumstances. You can add as little as $50 at
any time during the accumulation phase.

3.INVESTMENT CHOICES

You can allocate your premium payments to one or more of the following mutual
fund portfolios described in the underlying fund prospectuses:

Merrill Lynch Basic Value Focus Fund
Merrill Lynch High Current Income Fund
Merrill Lynch Developing Capital Markets Focus Fund

Capital Guardian Global Portfolio(/1/)

Capital Guardian U.S. Equity Portfolio(/2/)

Capital Guardian Value Portfolio(/3/)
Dreyfus Small Cap Value Portfolio
Dreyfus U.S. Government Securities Portfolio
Endeavor Asset Allocation Portfolio
Endeavor Money Market Portfolio
Endeavor Enhanced Index Portfolio
Endeavor High Yield Portfolio
Endeavor Janus Growth Portfolio

Jennison Growth Portfolio(/4/)
T. Rowe Price Equity Income Portfolio
T. Rowe Price Growth Stock Portfolio
T. Rowe Price International Stock Portfolio

Janus Aspen - Aggressive Growth Portfolio - Service Shares

Janus Aspen - Strategic Value Portfolio - Service Shares

Janus Aspen - Worldwide Growth Portfolio - Service Shares
Transamerica VIF Growth Portfolio
Fidelity - VIP Equity-Income Portfolio - Service Class 2
Fidelity - VIP II Contrafund(R) Portfolio - Service Class 2
Fidelity - VIP III Growth Opportunities Portfolio - Service Class 2
Fidelity - VIP III Mid Cap Portfolio - Service Class 2
WRL Alger Aggressive Growth

WRL Gabelli Global Growth
WRL Goldman Sachs Growth

WRL Great Companies - Global/2/
WRL NWQ Value Equity
WRL Pilgrim Baxter Mid Cap Growth

4
<PAGE>

WRL Salomon All Cap
WRL T. Rowe Price Dividend Growth
WRL T. Rowe Price Small Cap

(/1/) Formerly known as Endeavor Select Portfolio

(/2/) Formerly the PFL Endeavor Target Account.

(/3/) Formerly known as Endeavor ValueEquity Portfolio.

(/4/) Formerly Known as Endeavor Opportunity Value Portfolio.

Depending upon their investment performance, you can make or lose money in any
of the subaccounts.

You can also allocate your premium payments to the fixed account.

4.PERFORMANCE

The value of the policy will vary up or down depending upon the investment
performance of the subaccounts you choose. We provide performance information
in Appendix B and in the SAI. This data does not indicate future performance.

5.EXPENSES

No deductions are made from premium payments at the time you buy the policy so
that the full amount of each premium payment is invested in one or more of your
investment choices.

Full surrenders, partial withdrawals and transfers from a guaranteed period
option of the fixed account may also be subject to an excess interest
adjustment, which may increase or decrease the amount you receive. This
adjustment may also apply to amounts applied to an annuity payment option from
a guaranteed period option of the fixed account.

We will deduct state premium taxes, which currently range from 0% to 3.50%,
upon total surrender, payment of a death benefit, or when annuity payments
begin.

The value of the net assets of the subaccounts will reflect the management fee
and other expenses incurred by the underlying portfolios.

6.ACCESS TO YOUR MONEY

. up to 10% of your payments; or
. any gains in the policy.

Amounts withdrawn in the first year, or in excess of this free amount, may be
subject to a surrender charge and/or excess interest adjustment.

The gains in the policy are the amount equal to the policy value, minus the sum
of all premium payments, reduced by all prior partial withdrawals.

If you have policy value in the fixed account, you may also take up to the
greater of 10% of premium payments or any gains in the policy free of excess
interest adjustments.

You may have to pay income tax and a tax penalty on any money you take out.

5
<PAGE>

Access to amounts held in qualified policies may be restricted or prohibited.

7. ANNUITY PAYMENTS (THE INCOME PHASE)

The policy allows you to receive income under one of five annuity payment
options. You may choose from fixed payment options, variable payment options,
or a combination of both. If you select a variable payment option, the dollar
amount of your payments may go up or down.

8.DEATH BENEFIT

If you are both the owner and the annuitant and you die before the income phase
begins, then your beneficiary will receive a death benefit.

Charges are lower for the Return of Premium Death Benefit than they are for the
other three.

These choices are restricted for annuitants and owners over age 74.

If the owner is not the annuitant, no death benefit is paid if the owner dies.

9.TAXES

10.ADDITIONAL FEATURES

This policy has additional features that might interest you. These include the
following:
. You can arrange to have money automatically sent to you monthly, quarterly,
semi-annually or annually while your policy is in the accumulation phase.
This feature is referred to as the "systematic payout option." Amounts you
receive may be included in your gross income, and in certain circumstances,
may be subject to penalty taxes.
. You can elect an optional rider that guarantees you a minimum annuitization
value. This feature is called the "family income protector." There is an
extra charge for this rider and the rider may vary by state.

. Under certain medically related circumstances, you may withdraw all or part
of the policy value without a surrender charge and excess interest
adjustment. This feature is called the "nursing care and terminal condition
withdrawal option."
. Under certain unemployment circumstances, you may withdraw all or a portion
of the policy value free of surrender charges and excess interest
adjustments. This feature is called the "unemployment waiver."
. You may make transfers and/or change the allocation of additional premium
payments by telephone.

. You can arrange to have a certain amount of money (at least $500)
automatically transferred from the fixed account, the Dreyfus U.S.
Government Securities Subaccount, or the Endeavor Money Market Subaccount,
either monthly or quarterly, into your choice of one or more subaccounts.
This feature is called "dollar cost averaging."
. We will, upon your request, automatically transfer amounts among the
subaccounts on a regular basis to maintain a desired allocation of the
policy value among the

6
<PAGE>

various subaccounts. This feature is called "asset rebalancing."

These features are not available in all states and may not be suitable for your
particular situation.

11.OTHER INFORMATION

There are various fees and charges associated with variable annuities. You
should consider whether the features and benefits of this policy, such as the
opportunity for lifetime income payments, a guaranteed death benefit, the
guaranteed level of certain charges, and the family income protector, make this
policy appropriate for your needs.

Financial Statements. Financial Statements for PFL and the separate account are
in the SAI.

12.INQUIRIES

If you need more information, please contact us at:

Administrative and Service Office
Financial Markets Division
Variable Annuity Department
PFL Life Insurance Company
4333 Edgewood Road N.E.
P.O. Box 3183
Cedar Rapids, IA 52406-3183

You may check your policy at www.pfllife.com/fmd. Follow the logon
procedures. You will need your pre-assigned Personal Identification Number
("PIN") to access information about your policy.

7
<PAGE>

ANNUITY POLICY FEE TABLE
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Policy Owner Transaction
Expenses
-----------------------------------------------
<C> <S> <C>
Sales Load On Purchase Payments....... 0
Maximum Surrender Charge
(as a % of Premium Payments
Surrendered)(/1/)(/2/)............... 7%
Annual Service Charge(/1/).. $35 Per Policy
Transfer Fee(/1/)........... Currently No Fee
</TABLE>
<TABLE>
<CAPTION>
Separate Account Annual Expenses
(as a percentage of average account
value)
<S> <C>
Mortality and Expense Risk
Fee(/3/).................... 1.40%
Administrative Charge........ 0.15%
-----
TOTAL SEPARATE ACCOUNT
ANNUAL EXPENSES............. 1.55%
</TABLE>
<TABLE>
--------------------------------------------------------------------------------
<CAPTION>
Portfolio Annual Expenses(/4/)
(as a percentage of average net assets and after expense reimbursements)
--------------------------------------------------------------------------------
Total
Total Account
Rule Portfolio and
Management Other 12b-1 Annual Portfolio
Fees Expenses Fees Expenses Expenses
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Merrill Lynch Basic Value Focus
Fund(/5/)..................... 0.60% 0.06% -- 0.66% 2.21%
Merrill Lynch High Current
Income Fund(/5/).............. 0.50% 0.02% -- 0.52% 2.07%
Merrill Lynch Developing
Capital Markets
Focus Fund(/5/)............... 0.58% 0.67% -- 1.25% 2.80%
Capital Guardian Global(/6/)... 1.05% 0.39% -- 1.44% 2.99%
Capital Guardian U.S.
Equity(/7/)................... 0.85% 0.15% -- 1.00% 2.55%
Capital Guardian
Value(/6/)(/8/)............... 0.85% 0.07% 0.08% 1.00% 2.55%
Dreyfus Small Cap Value(/8/)... 0.80% 0.10% 0.32% 1.22% 2.77%
Dreyfus U.S. Government
Securities.................... 0.65% 0.12% -- 0.77% 2.32%
Endeavor Asset Allocation(/8/). 0.75% 0.10% 0.02% 0.87% 2.42%
Endeavor Money Market.......... 0.50% 0.05% -- 0.55% 2.10%
Endeavor Enhanced Index........ 0.75% 0.04% -- 0.79% 2.34%
Endeavor High Yield(/9/)....... 0.78% 0.50% -- 1.28% 2.83%
Endeavor Janus Growth(/9/)..... 0.80% 0.05% -- 0.85% 2.40%
Jennison Growth(/6/)(/8/)...... 0.85% 0.05% 0.06% 0.96% 2.51%
T. Rowe Price Equity
Income(/8/)................... 0.80% 0.07% 0.01% 0.88% 2.43%
T. Rowe Price Growth
Stock(/8/).................... 0.80% 0.07% 0.01% 0.88% 2.43%
T. Rowe Price International
Stock......................... 0.90% 0.10% -- 1.00% 2.55%
Janus Aspen - Aggressive Growth
- Service Shares(/10/)........ 0.65% 0.02% 0.25% 0.92% 2.47%
Janus Aspen - Strategic Value -
Service Shares(/10/).......... 0.65% 0.04% 0.25% 0.94% 2.49%
Janus Aspen - Worldwide Growth
- Service Shares(/10/)........ 0.65% 0.05% 0.25% 0.95% 2.50%
Transamerica VIF Growth
Portfolio..................... 0.70% 0.15% -- 0.85% 2.40%
Fidelity - VIP Equity-Income
Portfolio - Service Class
2(/11/)....................... 0.48% 0.10% 0.25% 0.83% 2.38%
Fidelity - VIP II Contrafund(R)
- Service Class 2(/11/)....... 0.58% 0.12% 0.25% 0.95% 2.50%
Fidelity - VIP III Growth
Opportunities - Service Class
2(/11/)....................... 0.58% 0.13% 0.25% 0.96% 2.51%
Fidelity - VIP III Mid Cap -
Service Class 2(/11/)......... 0.57% 0.43% 0.25% 1.25% 2.80%
WRL Alger Aggressive Growth.... 0.80% 0.09% -- 0.89% 2.44%
WRL Gabelli Global
Growth(/12/)(/13/)............ 1.00% 0.20% -- 1.20% 2.75%
WRL Goldman Sachs Growth(/12/). 0.90% 0.10% -- 1.00% 2.55%
WRL Great Companies - Global
/2/(/12/)..................... 0.80% 0.20% -- 1.00% 2.55%
WRL Janus Global(/14/)......... 0.80% 0.12% -- 0.92% 2.47%
WRL NWQ Value Equity........... 0.80% 0.10% -- 0.90% 2.45%
WRL Pilgrim Baxter Mid Cap
Growth(/12/)(/13/)............ 0.90% 0.10% -- 1.00% 2.55%
WRL Salomon All Cap(/12/)...... 0.90% 0.10% -- 1.00% 2.55%
WRL T. Rowe Price Dividend
Growth(/12/)(/13/)............ 0.90% 0.10% -- 1.00% 2.55%
WRL T. Rowe Price Small
Cap(/12/)..................... 0.75% 0.25% -- 1.00% 2.55%
</TABLE>

8
<PAGE>

(/1/) The surrender charge and transfer fee, if any are imposed, apply to each
policy, regardless of how policy value is allocated among the separate
account and the fixed account. The service charge applies to the fixed
account and the separate account, and is assessed on a pro rata basis
relative to each account's policy value as a percentage of the policy's
total policy value. The service charge is deducted on each policy
anniversary and at the time of surrender. There is no fee for the first
12 transfers per year. For additional transfers, PFL may charge a fee of
$10 per transfer, but currently does not charge for any transfers.

(/2/) The surrender charge is decreased based on the number of years since the
premium payment was made, from 7% in the year in which the premium
payment was made, to 0% in the eighth year after the premium payment was
made. If applicable a surrender charge will only be applied to
withdrawals that exceed the amount available under certain listed
exceptions.

(/3/) Mortality and expense risk fees shown (1.40%) are for the "5% Annually
Compounding Death Benefit," the "Greater of 5% Annually Compounding
through age 80 Death Benefit or Annual Step-Up through age 80 Death
Benefit", and the "Monthly Step-Up through age 80 Death Benefit." This
reflects a fee that is 0.15% per year higher than the 1.25%
corresponding fee for the "Return of Premium Death Benefit."

(/4/) The fee table information relating to the underlying funds was provided
to PFL by the underlying funds, their investment advisers or managers,
and PFL has not and cannot independently verified the accuracy or
completeness of such information. Actual future expenses of the
portfolios may be greater or less than those shown in the Table.
Therefore, PFL disclaims any and all liability for such information.

(/5/) These reflect expenses on Class A shares for the year ended December 31,
1999. Reimbursement agreements are in effect that limit operating
expenses exclusive of any distribution fees imposed on shares of Class B
Common Stock, paid by each portfolio of the Merrill Lynch Variable
Series Funds, Inc. in a given year to 1.25% of its average daily net
assets. Any such expenses in excess of 1.25% of the average daily net
assets will be reimbursed to the portfolio by MLAM, which in turn will
be reimbursed by Merrill Lynch Life Agency, Inc., an affiliate of MLAM.

(/6/) Capital Guardian Global Portfolio was formerly Endeavor Select
Portfolio, Capital Guardian Value Portfolio was formerly Endeavor Value
Equity Portfolio and Jennison Growth Portfolio was formerly Endeavor
Opportunity Value Portfolio. On October 9, 2000, each Portfolio's
advisor and investment policy were changed. The "Other Expenses" shown
for 1999 were before these changes occurred. The "Management Fees" shown
are the current fees.

(/7/) Capital Guardian U.S. Equity Portfolio commenced operations on October
9, 2000, so the expenses shown are estimates for the first year of
operations.

(/8/) The Board of Trustees of Endeavor Series Trust (the "Trust") have
authorized an arrangement whereby, subject to best price and execution,
executing brokers will share commissions with the Trust's affiliated
broker. Under supervision of the Trustees, the affiliated broker will
use the "recaptured commissions" to promote marketing of the Trust's
shares. The staff of the Securities and Exchange Commission believes
that, through the use of these recaptured commissions, the Trust is
indirectly paying for distribution expenses and such amounts are shown
as 12b-1 fees in the above table. This use of recaptured commissions to
promote the sale of the Trust's shares involves no additional costs to
the Trust or any owner. Endeavor Series Trust, based on advice of
counsel, does not believe that recaptured brokerage commissions should
be treated as 12b-1 fees. For more information on the Trust's Brokerage
Enhancement Plan, see the

9
<PAGE>

Trust's prospectus accompanying this Prospectus.

(/9/) The "Management Fees" have been restated to reflect current fees.

(/10/) The expenses in the Annuity Policy Fee Table are based on estimated
expenses the new Service Shares Class of each portfolio expects to
incur in its initial fiscal year.

(/11/) Service Class 2 expenses are based on estimated expenses for the first
year. Fidelity VIP expenses are without any reimbursements.

(/12/) Because WRL Goldman Sachs Growth, WRL Pilgrim Baxter Mid Cap Growth,
WRL Salomon All Cap, WRL T. Rowe Price Dividend Growth, and WRL T. Rowe
Price Small Cap commenced operations on May 3, 1999, and because WRL
Gabelli Global Growth and WRL Great Companies--Global/2/ commenced
operations on September 1, 2000, the percentages set forth as "Other
Expenses" and "Total Portfolio Annual Expenses" are annualized.

(/13/) The Management Fee in the Fee Table is based on portfolio average daily
net assets of up to $500 million for WRL Gabelli Global Growth, and up
to $100 million for WRL Pilgrim Baxter Mid Cap Growth and WRL T. Rowe
Price Dividend Growth. See the underlying fund prospectus for more
information.

(/14/) Effective September 1, 2000, the WRL Janus Global portfolio was closed
to new investors.
10
<PAGE>

EXAMPLES

The expenses reflect different mortality and expense risk fees depending on
which death benefit you select:
A = Return of Premium Death Benefit (1.25%)
B = 5% Annually Compounding Death Benefit, Greater of 5% Annually Compounding
through age 80 Death Benefit or Annual Step-Up through age 80 Death Benefit, or
Monthly Step-Up through age 80 Death Benefit (1.40%)

<TABLE>
<CAPTION>
If the Policy is
annuitized at the end
of
the applicable time
period
If the Policy is or if the Policy is
surrendered at the simply kept
end of the applicable in the accumulation
time period. phase.
------------------------------------------
1 3 5 10 1 3 5 10
Subaccounts Year Years Years Years Year Years Years Years
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Merrill Lynch Basic Value
Focus...................... A $ 91 $120 $155 $242 $21 $66 $112 $242
B $ 93 $124 $163 $257 $23 $70 $120 $257
-------------------------------------------------------------------------------
Merrill Lynch High Current
Income..................... A $ 90 $115 $147 $228 $20 $61 $105 $228
B $ 91 $120 $155 $243 $21 $66 $113 $243
-------------------------------------------------------------------------------
Merrill Lynch Developing
Capital Markets A $ 97 $137 $186 $301 $27 $83 $142 $301
Focus...................... B $ 99 $142 $194 $316 $29 $88 $149 $316
-------------------------------------------------------------------------------
Capital Guardian Global..... A $ 99 $143 $196 $320 $29 $89 $151 $320
B $101 $147 $204 $334 $31 $93 $159 $334
-------------------------------------------------------------------------------
Capital Guardian U.S.
Equity..................... A $ 95 $130 $173 $277 $25 $76 $130 $277
B $ 96 $134 $181 $292 $26 $80 $137 $292
-------------------------------------------------------------------------------
Capital Guardian Value...... A $ 95 $130 $173 $277 $25 $76 $130 $277
B $ 96 $134 $181 $292 $26 $80 $137 $292
-------------------------------------------------------------------------------
Dreyfus Small Cap Value..... A $ 97 $136 $184 $298 $27 $82 $141 $298
B $ 98 $141 $192 $313 $28 $87 $148 $313
-------------------------------------------------------------------------------
Dreyfus U.S. Government
Securities................. A $ 92 $123 $161 $253 $22 $69 $118 $253
B $ 94 $127 $169 $269 $24 $73 $126 $269
-------------------------------------------------------------------------------
Endeavor Asset Allocation... A $ 93 $126 $166 $264 $23 $72 $123 $264
B $ 95 $130 $174 $279 $25 $76 $131 $279
-------------------------------------------------------------------------------
Endeavor Money Market....... A $ 90 $116 $149 $231 $20 $62 $107 $231
B $ 92 $121 $157 $246 $22 $67 $114 $246
-------------------------------------------------------------------------------
Endeavor Enhanced Index..... A $ 93 $123 $162 $255 $23 $69 $119 $255
B $ 94 $128 $170 $271 $24 $74 $127 $271
-------------------------------------------------------------------------------
Endeavor High Yield......... A $ 97 $138 $188 $304 $27 $84 $144 $304
B $ 99 $143 $195 $319 $29 $89 $151 $319
-------------------------------------------------------------------------------
Endeavor Janus Growth....... A $ 93 $125 $165 $262 $23 $71 $122 $262
B $ 95 $130 $173 $277 $25 $76 $130 $277
-------------------------------------------------------------------------------
Jennison Growth............. A $ 94 $129 $171 $273 $24 $75 $128 $273
B $ 96 $133 $179 $288 $26 $79 $135 $288
-------------------------------------------------------------------------------
T. Rowe Price Equity Income. A $ 93 $126 $166 $265 $23 $72 $124 $265
B $ 95 $131 $174 $280 $25 $77 $131 $280
-------------------------------------------------------------------------------
T. Rowe Price Growth Stock.. A $ 93 $126 $166 $265 $23 $72 $124 $264
B $ 95 $131 $174 $280 $25 $77 $131 $280
-------------------------------------------------------------------------------
T. Rowe Price International
Stock...................... A $ 95 $130 $173 $277 $25 $76 $130 $277
B $ 96 $134 $181 $292 $26 $80 $137 $292
-------------------------------------------------------------------------------
</TABLE>

11
<PAGE>

EXAMPLES continued

<TABLE>
<CAPTION>
If the Policy is
annuitized at the end of
If the Policy is the applicable time period
surrendered at the or if the Policy is simply
end of the applicable kept
time period. in the accumulation phase.
------------------------------------------------
1 3 5 10 1 3 5 10
Subaccounts Year Years Years Years Year Years Years Years
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Janus Aspen - Aggressive
Growth - A $94 $127 $169 $269 $24 $73 $126 $269
Service Shares......... B $95 $132 $176 $284 $25 $78 $ 133 $ 284
-------------------------------------------------------------------------------------
Janus Aspen - Strategic
Value - A $94 $128 $170 $271 $ 24 $ 74 $ 127 $ 271
Service Shares......... B $96 $132 $178 $286 $ 26 $ 78 $ 134 $ 286
-------------------------------------------------------------------------------------
Janus Aspen - Worldwide
Growth - A $94 $128 $170 $272 $ 24 $ 74 $ 127 $ 272
Service Shares......... B $96 $133 $178 $287 $ 26 $ 79 $ 135 $ 287
-------------------------------------------------------------------------------------
Transamerica VIF Growth. A $93 $125 $165 $262 $ 23 $ 71 $ 122 $ 262
B $95 $130 $173 $277 $ 25 $ 76 $ 130 $ 277
-------------------------------------------------------------------------------------
Fidelity - VIP Equity-
Income A $93 $125 $164 $260 $ 23 $ 71 $ 121 $ 260
Service Class 2........ B $94 $129 $172 $275 $ 24 $ 75 $ 129 $ 275
-------------------------------------------------------------------------------------
Fidelity - VIP II
Contrafund(R) A $94 $128 $170 $272 $ 24 $ 74 $ 127 $ 272
Service Class 2........ B $96 $133 $178 $287 $ 26 $ 79 $ 135 $ 287
-------------------------------------------------------------------------------------
Fidelity - VIP III
Growth Opportunities A $94 $129 $171 $273 $ 24 $ 75 $ 128 $ 273
Service Class 2........ B $96 $133 $179 $288 $ 26 $ 79 $ 135 $ 288
-------------------------------------------------------------------------------------
Fidelity - VIP III Mid
Cap A $97 $137 $186 $301 $ 27 $ 83 $ 142 $ 301
Service Class 2........ B $99 $142 $194 $316 $ 29 $ 88 $ 149 $ 316
-------------------------------------------------------------------------------------
WRL Alger Aggressive
Growth................. A $94 $126 $167 $266 $ 24 $ 72 $ 124 $ 266
B $95 $131 $175 $281 $ 25 $ 77 $ 132 $ 281
-------------------------------------------------------------------------------------
WRL Gabelli Global
Growth................. A $97 $136 $183 $296 $ 27 $ 82 $ 140 $ 296
B $98 $140 $191 $311 $ 28 $ 86 $ 147 $ 311
-------------------------------------------------------------------------------------
WRL Goldman Sachs
Growth................. A $95 $130 $173 $277 $ 25 $ 76 $ 130 $ 277
B $96 $134 $181 $292 $ 26 $ 80 $ 137 $ 292
-------------------------------------------------------------------------------------
WRL Great Companies -
Global/2/ ............. A $95 $130 $173 $277 $ 25 $ 76 $ 130 $ 277
B $96 $134 $181 $292 $ 26 $ 80 $ 137 $ 292
-------------------------------------------------------------------------------------
WRL Janus Global........ A $94 $127 $169 $269 $ 24 $ 73 $ 126 $ 269
B $95 $132 $176 $284 $ 25 $ 78 $ 133 $ 284
-------------------------------------------------------------------------------------
WRL NWQ Value Equity.... A $94 $127 $168 $267 $ 24 $ 73 $ 125 $ 267
B $95 $131 $175 $282 $ 25 $ 77 $ 132 $ 282
-------------------------------------------------------------------------------------
WRL Pilgrim Baxter Mid
Cap Growth............. A $95 $130 $173 $277 $ 25 $ 76 $ 130 $ 277
B $96 $134 $181 $292 $ 26 $ 80 $ 137 $ 292
-------------------------------------------------------------------------------------
WRL Salomon All Cap..... A $95 $130 $173 $277 $ 25 $ 76 $ 130 $ 277
B $96 $134 $181 $292 $ 26 $ 80 $ 137 $ 292
-------------------------------------------------------------------------------------
WRL T. Rowe Price
Dividend Growth........ A $95 $130 $173 $277 $ 25 $ 76 $ 130 $ 277
B $96 $134 $181 $292 $ 26 $ 80 $ 137 $ 292
-------------------------------------------------------------------------------------
WRL T. Rowe Price Small
Cap.................... A $95 $130 $173 $277 $ 25 $ 76 $ 130 $ 277
B $96 $134 $181 $292 $ 26 $ 80 $ 137 $ 292
</TABLE>

The above tables will assist you in understanding the costs and expenses that
you will bear, directly or indirectly. These include the 1999 expenses of the
underlying portfolios, except for Capital Guardian U.S. Equity, Endeavor Janus
Growth, WRL Goldman Sachs Growth, WRL Pilgrim Baxter Mid Cap Growth, WRL
Salomon All Cap, WRL T. Rowe Price Dividend Growth, and WRL T. Rowe Price Small
Cap, (whose expenses listed above are estimated for the first full year of
operations). In addition to the expenses listed above, premium taxes may be
applicable.

These examples should not be considered a representation of past or future
expenses, and actual expenses may be greater or less than those shown. The
assumed 5% annual

12
<PAGE>

return is hypothetical and should not be considered a representation of past or
future annual returns, which may be greater or less than the assumed rate.

In the examples, the $35 annual service charge is reflected as a charge of
0.0299% based on average policy value of $116,930.00.

Financial Information. Condensed financial information for the subaccounts is
in Appendix A to this prospectus.

13
<PAGE>

1.THE ANNUITY POLICY

This prospectus describes The Endeavor ML Variable Annuity policy offered by
PFL Life Insurance Company.

The Endeavor ML Variable Annuity consists of either:
. a group annuity contract that we, PFL Life Insurance Company, issue to the
contract holder and an individual certificate that we issue to you; or
. an individual policy that we issue to you.

This prospectus describes your individual certificate or policy (both are
referred to as policy in this prospectus). The policy is a flexible premium
variable annuity. You can use the policy to accumulate funds for retirement or
other long-term financial planning purposes. Your individual investment and
your rights are determined primarily by your own policy.

2.PURCHASE

Policy Issue Requirements

Premium Payments

Initial Premium Requirements

14
<PAGE>

and explain why. We will also return your initial premium payment at that time
unless you let us to keep it and credit it as soon as possible.

The date on which we credit your initial premium payment to your policy is the
policy date. The policy date is used to determine policy years, policy months
and policy anniversaries.

Additional Premium Payments

Maximum Total Premium Payments

We allow premium payments up to a total of $1,000,000 without prior approval.

Allocation of Premium Payments

Policy Value

You should expect your policy value to change from valuation period to
valuation period. A valuation period begins at the close of trading at the New
York Stock Exchange on each business day and ends at the close of regular
trading on the next succeeding business day. A business day is each day that
the New York Stock Exchange is open. The New York Stock Exchange generally
closes at 4:00 p.m. eastern time. Holidays are generally not business days.

3.INVESTMENT CHOICES

The Separate Account

There are currently thirty-four variable subaccounts available under the
policies for new investors. The subaccounts invest in shares of the various
underlying fund portfolios. The companies that provide investment advice and
administrative services for the underlying fund portfolios offered through this
policy are listed below. The following variable investment choices are
currently offered through this policy:

MERRILL LYNCH VARIABLE SERIES FUNDS, INC.
Managed by Merrill Lynch Asset Management, L.P.
Merrill Lynch Basic Value Focus Fund
Merrill Lynch High Current Income Fund
Merrill Lynch Developing Capital Markets Focus Fund

ENDEAVOR SERIES TRUST

Subadvised by Capital Guardian Trust Company

Capital Guardian Global Portfolio

Capital Guardian U.S. Equity Portfolio

Capital Guardian Value Portfolio
Subadvised by The Dreyfus Corporation
Dreyfus Small Cap Value Portfolio
Dreyfus U.S. Government Securities Portfolio
Subadvised by Morgan Stanley Asset Management
Endeavor Asset Allocation Portfolio
Endeavor Money Market Portfolio
Subadvised by J.P. Morgan Investment Management Inc.
Endeavor Enhanced Index Portfolio

15
<PAGE>

Subadvised by Massachusetts Financial Services Company
Endeavor High Yield Portfolio
Subadvised by Janus Capital Corporation
Endeavor Janus Growth Portfolio

Subadvised by Jennison Associates LLC

Jennison Growth Portfolio
Subadvised by T. Rowe Price Associates, Inc.
T. Rowe Price Equity Income Portfolio
T. Rowe Price Growth Stock Portfolio
Subadvised by Rowe Price-Fleming International, Inc.
T. Rowe Price International Stock Portfolio

JANUS ASPEN SERIES - SERVICE SHARES

Managed by Janus Capital Corporation

Janus Aspen - Aggressive Growth Portfolio

Janus Aspen - Strategic Value Portfolio

Janus Aspen - Worldwide Growth Portfolio

TRANSAMERICA VARIABLE INSURANCE FUND, INC.
Managed by Transamerica Investment Management, LLC
Transamerica VIF Growth Portfolio

VARIABLE INSURANCE PRODUCTS FUND -SERVICE CLASS 2
Managed by Fidelity Management & Research Company
Fidelity - VIP Equity-Income Portfolio

VARIABLE INSURANCE PRODUCTS FUND II -SERVICE CLASS 2
Managed by Fidelity Management & Research Company
Fidelity - VIP II Contrafund(R) Portfolio

VARIABLE INSURANCE PRODUCTS FUND III -SERVICE CLASS 2
Managed by Fidelity Management & Research Company
Fidelity - VIP III Growth Opportunities Portfolio
Fidelity - VIP III Mid Cap Portfolio

WRL SERIES FUND, INC.
Subadvised by Fred Alger Management, Inc.
WRL Alger Aggressive Growth

Subadvised by Gabelli Asset Management Company

WRL Gabelli Global Growth
Subadvised by Goldman Sachs Asset Management
WRL Goldman Sachs Growth

Subadvised by Great Companies, L.L.C.

WRL Great Companies - Global/2/
Subadvised by NWQ Investment Management Company, Inc.
WRL NWQ Value Equity
Subadvised by Pilgrim Baxter & Associates, Ltd.
WRL Pilgrim Baxter Mid Cap Growth
Subadvised by Salomon Brothers Asset Management Inc
WRL Salomon All Cap
Subadvised by T. Rowe Price Associates, Inc.
WRL T. Rowe Price Dividend Growth
WRL T. Rowe Price Small Cap

WRL SERIES FUND, INC.

Subadvised by Janus Capital Corporation

WRL Janus Global

We may receive expense reimbursements or other revenues from the underlying
funds or their managers. The amount of these reimbursements or revenues, if
any, may be different for different funds and portfolios and may be based on
the amount of assets that PFL

16
<PAGE>

or the separate account invests in the underlying fund portfolios.

The Fixed Account

Premium payments allocated and amounts transferred to the fixed account become
part of PFL's general account. Interests in the general account have not been
registered under the Securities Act of 1933 (the "1933 Act"), nor is the
general account registered as an investment company under the 1940 Act.
Accordingly, neither the general account nor any interests therein are
generally subject to the provisions of the 1933 or 1940 Acts. PFL has been
advised that the staff of the SEC has not reviewed the disclosures in this
prospectus which relate to the fixed account.

We guarantee that the interest credited to the fixed account will not be less
than 3% per year. At the end of a guaranteed period option you selected, the
value in that guaranteed period option will automatically be transferred into a
new guaranteed period option of the same length (or the next shorter period if
the same period is no longer offered) at the current interest rate for that
period. You can transfer to another investment choice by giving us notice
within 30 days before the end of the expiring guaranteed period.

Transfers

During the accumulation phase, you may make transfers to or from any subaccount
or fixed account as often as you wish within certain limitations.

Transfers from a guaranteed period option of the fixed account are limited to
the following:

. Transfers at the end of a guaranteed period, if you notify us within 30 days
prior to the end of the guaranteed period that you wish to transfer the
amount in that guaranteed period option to another investment choice. No
excess interest adjustment will apply.
. Transfers of amounts equal to interest credited. This may affect your
overall interest-crediting rate, because transfers are deemed to come from
the oldest premium payment first.
. Other than at the end of a guaranteed period, transfers of amounts from the
guaranteed period option in excess of amounts equal to interest credited are
subject to an excess interest adjustment. If it is a negative adjustment,
the maximum amount you can transfer is 25% of the amount in that guaranteed
period option, less any previous transfers during the current policy year.
If it is a positive adjustment, we do not limit the amount that you can
transfer.

There are no transfers permitted out of the dollar cost averaging fixed account
option except through the dollar cost averaging program.

Transfers out of a subaccount must be at least $500, or the entire subaccount
value. Transfers

17
<PAGE>

of guaranteed period option amounts equal to interest credited must be at least
$50. If less than $500 remains, then we reserve the right to either deny the
transfer or include that amount in the transfer. Transfers must be received
while the New York Stock Exchange is open to get same-day pricing of the
transaction.

During the income phase of your policy, you may transfer values out of any
subaccount up to four times per year. However, you cannot transfer values out
of the fixed account in this phase. The minimum amount that can be transferred
during this phase is the lesser of $10 of monthly income, or the entire monthly
income of the annuity units in the subaccount from which the transfer is being
made.

Transfers may be made by telephone, subject to the limitations described below
under "Telephone Transactions."

4.PERFORMANCE

Second, any advertisement will also include total return figures, which reflect
the deduction of the mortality and expense risk fees, administrative charges
and surrender charges.

5.EXPENSES

There are charges and expenses associated with your policy that reduce the
return on your investment in the policy.

Surrender Charges

18
<PAGE>

relating to policy sales, including commissions to registered representatives
and other promotional expenses. After the first year, you can withdraw up to
the greater of 10% of your premium payments or any gains in the policy once
each year free of surrender charges. This amount is referred to as the free
percentage and is determined at the time of withdrawal. (The free percentage is
not cumulative, so not withdrawing anything in one year does not increase the
free withdrawal amount in subsequent years.) If you withdraw money in excess of
the greater of 10% of your premium payments or any gains in the policy, you
might have to pay a surrender charge, which is a contingent deferred sales
charge, on the excess amount. The following schedule shows the surrender
charges that apply during the seven years following each premium payment:

<TABLE>
<CAPTION>
Surrender Charge
Number of Years Since (as a percentage of
Premium Payment Date premium withdrawn)
---------------------------------------------------------------------------------
<S> <C>
0-1 7%
---------------------------------------------------------------------------------
1-2 7%
---------------------------------------------------------------------------------
2-3 6%
---------------------------------------------------------------------------------
3-4 6%
---------------------------------------------------------------------------------
4-5 5%
---------------------------------------------------------------------------------
5-6 4%
---------------------------------------------------------------------------------
6-7 2%
</TABLE>

Keep in mind that withdrawals may be taxable, and if made before age 59 1/2,
may be subject to a 10% federal penalty tax. For tax purposes, withdrawals are
considered to come from earnings first.

Surrender charges are waived if you withdraw money under the nursing care and
terminal condition withdrawal option or the unemployment waiver.

Excess Interest Adjustment

Mortality and Expense Risk Fee

19
<PAGE>

Administrative Charges

We deduct an administrative charge to cover the costs of administering the
policy. This charge is equal to an annual rate of 0.15% of the daily net asset
value of the separate account.

Premium Taxes

Some states assess premium taxes on the premium payments you make. We currently
do not deduct for these taxes at the time you make a premium payment. However,
we will deduct the total amount of premium taxes, if any, from the policy value
when:
. you elect to begin receiving annuity payments;
. you surrender the policy; or
. you die and a death benefit is paid (you must also be the annuitant for the
death benefit to be paid).

Generally, premium taxes range from 0% to 3.50%, depending on the state.

Federal, State and Local Taxes

We may in the future deduct charges from the policy for any taxes we incur
because of the policy. However, no deductions are being made at the present
time.

Transfer Fee

Family Income Protector

Portfolio Management Fees

The value of the assets in each subaccount will reflect the fees and expenses
paid by the underlying fund. A description of these expenses is found in the
prospectuses for the underlying funds.

6.ACCESS TO YOUR MONEY

During the accumulation phase, you can have access to the money in your policy
in two ways:
. by making a withdrawal (either a complete or partial withdrawal); or
. by taking systematic payouts.

Withdrawals

If you want to make a complete withdrawal, you will receive your cash value.

20
<PAGE>

Withdrawals from qualified policies may be restricted or prohibited.

During the income phase, you will receive annuity payments under the annuity
payment option you select; however, you generally may not take any other
withdrawals, either complete or partial.

Delay of Payment and Transfers

Payment of any amount due from the separate account for a surrender, a death
benefit, or the death of the owner of a nonqualified policy, will generally
occur within seven business days from the date PFL receives all required
information. PFL may defer such payment from the separate account if:
. the New York Stock Exchange is closed other than for usual weekends or
holidays or trading on the Exchange is otherwise restricted;
. an emergency exists as defined by the SEC or the SEC requires that trading
be restricted; or
. the SEC permits a delay for the protection of owners.

In addition, transfers of amounts from the subaccounts may be deferred under
these circumstances.

Excess Interest Adjustment

There will be no excess interest adjustment on any of the following:
. a lump sum withdrawal of up to the free percentage amount;
. nursing care and terminal condition withdrawals;
. unemployment waivers;
. withdrawals to satisfy any minimum distribution requirements; and
. systematic payout option payments, which do not exceed 10% of the premium.

Please note that in these circumstances you will not receive a higher cash
value if interest rates have fallen nor will you receive a lower cash value if
interest rates have risen.

7. ANNUITY PAYMENTS (THE INCOME PHASE)

Election of Annuity Payment Option. Before the annuity commencement date, if
the annuitant is alive, you may choose an annuity payment option or change your
election. If the annuitant dies before the annuity commencement date, the
beneficiary may elect to receive the death

21
<PAGE>

benefit in a lump sum or under one of the annuity payment options (unless you
become the new annuitant).

Unless you specify otherwise, the annuitant will receive the annuity payments.
After the annuitant's death, the beneficiary will receive any remaining
guaranteed payments.

Annuity Payment Options

The policy provides five annuity payment options that are described below
(these options are not available under the family income protector). You may
choose any combination of annuity payment options. We will use your "adjusted
policy value" to provide these annuity payments. The adjusted policy value is
the policy value increased or decreased by any applicable excess interest
adjustment. If the adjusted policy value on the annuity commencement date is
less than $2,000, PFL reserves the right to pay it in one lump sum in lieu of
applying it under an annuity payment option. You can receive annuity payments
monthly, quarterly, semi-annually, or annually. (We reserve the right to change
the frequency if payments would be less than $50.)

A charge for premium taxes and an excess interest adjustment may be made when
annuity payments begin.

The annuity payment options are explained below. Options 1, 2, and 4 are fixed
only. Options 3 and 5 can be fixed or variable.

Payment Option 1--Interest Payments. We will pay the interest on the amount we
use to provide annuity payments in equal payments, or this amount may be left
to accumulate for a period of time you and PFL agree to. You and PFL will agree
on withdrawal rights when you elect this option.

Payment Option 2--Income for a Specified Period. We will make level payments
only for the fixed period you choose. No funds will remain at the end.

Payment Option 3--Life Income. You may choose between:
Fixed Payments
. No Period Certain--We will make level payments only during the annuitant's
lifetime.
. 10 Years Certain--We will make level payments for the longer of the
annuitant's lifetime or ten years.
. Guaranteed Return of Policy Proceeds--We will make level payments for the
longer of the annuitant's lifetime or until the total dollar amount of
payments we made to you equals the amount applied to this option.
Variable Payments
. No Period Certain--Payments will be made only during the lifetime of the
annuitant.
. 10 Years Certain--Payments will be made for the longer of the annuitant's
lifetime or ten years.

Payment Option 4--Income of a Specified Amount. Payments are made for any
specified amount until the amount applied to this option, with interest, is
exhausted. This will be a series of level payments followed by a smaller final
payment.

22
<PAGE>

Payment Option 5--Joint and Survivor Annuity. You may choose between:
Fixed Payments
. Payments are made during the joint lifetime of the annuitant and a joint
annuitant of your selection. Payments will be made as long as either person
is living.
Variable Payments
. Payments are made during the joint lifetime of the annuitant and a joint
annuitant of your selection. Payments will be made as long as either person
is living.

NOTE CAREFULLY:

IF:
. you choose Life Income with No Period Certain or a Joint and Survivor
Annuity; and
. the annuitant(s) dies before the due date of the second (third, fourth,
etc.) annuity payment;
THEN:
. we may make only one (two, three, etc.) annuity payments.

IF:
. you choose Income for a Specified Period, Life Income with 10 years Certain,
Life Income with Guaranteed Return of Policy Proceeds, or Income of a
Specified Amount; and
. the person receiving payments dies prior to the end of the guaranteed
period;
THEN:
. the remaining guaranteed payments will be continued to that person's
beneficiary, or their present value may be paid in a single sum.

Other annuity payment options may be arranged by agreement with PFL. Certain
annuity payment options may not be available in all states.

8.DEATH BENEFIT

When We Pay A Death Benefit

Before the Annuity Commencement Date
We will pay a death benefit to your beneficiary IF:
. you are both the annuitant and an owner of the policy; and
. you die before the annuity commencement date.

Distribution requirements apply to the policy value upon the death of any
owner. These requirements are detailed in the SAI.

After the Annuity Commencement Date
The death benefit payable, if any, on or after the annuity commencement date
depends on the annuity payment option selected.

IF:
. you are not the annuitant; and
. you die on or after the annuity commencement date; and
. the entire interest in the policy has not been paid to you;
THEN:
. the remaining portion of such interest in the policy will be distributed at
least as rapidly

23
<PAGE>

as under the method of distribution being used as of the date of your death.

When We Do Not Pay A Death Benefit

No death benefit is paid in the following cases:

IF:
. you are not the annuitant; and
. the annuitant dies prior to the annuity commencement date; and
. you did not specifically request that the death benefit be paid upon the
annuitant's death;
THEN:
. you will become the new annuitant and the policy will continue.

Note carefully. If the owner does not name a contingent owner, the owner's
estate will become the new owner. If no probate estate is opened (because, for
example, the owner has precluded the opening of a probate estate by means of a
trust or other instrument), and PFL has not received written notice of the
trust as a successor owner signed prior to the owner's death, then that trust
may not exercise ownership rights to the policy. It may be necessary to open a
probate estate in order to exercise ownership rights to the policy if no
contingent owner is named in a written notice received by PFL.

Amount of Death Benefit

Death benefit provisions may differ from state to state. The death benefit may
be paid as a lump sum or as annuity payments. The amount of the death benefit
depends on the guaranteed minimum death benefit option you chose when you
bought the policy. The death benefit will be the greatest of:
. policy value on the date we receive the required information; or
. cash value on the date we receive the required information (this could be
more than the policy value if there is a positive excess interest adjustment
that exceeds the surrender charge); or
. guaranteed minimum death benefit, if any, (discussed below), plus premium
payments, less partial withdrawals from the date of death to the date the
death benefit is paid.

Guaranteed Minimum Death Benefit

On the policy application, you generally may choose one of the four guaranteed
minimum death benefit options listed below.

After the policy is issued, you cannot make an election and the death benefit
cannot be changed.

There is an extra charge for death benefits A, B and C.

A. 5% Annually Compounding Death Benefit

The 5% Annually Compounding Death Benefit is not available if the owner or
annuitant is 75 or older on the policy date.

B. Greater of 5% Annually Compounding through age 80 Death Benefit or Annual
Step-Up through age 80 Death Benefit

The death benefit under this option is the greater of 1 or 2 below:

24
<PAGE>

date or withdrawal date to the earlier of the annuitant's date of
death or the annuitant's 81st birthday.

2. The Annual Step-Up through age 80 Death Benefit is equal to:
. the largest policy value on the policy date or on any policy
anniversary prior to the earlier of the annuitant's date of death or
the annuitant's 81st birthday; plus
. any premium payments subsequent to the date of any policy
anniversary with the largest policy value; minus
. any adjusted partial withdrawals subsequent to the date of the
policy anniversary with the largest policy value.

These benefits are not available if the owner or annuitant is age 81 or
older on the policy date.

C. Monthly Step-Up through age 80 Death Benefit

The Monthly Step-Up through age 80 Death Benefit is:
. the largest policy value on the policy date or on any monthly
anniversary prior to the earlier of the annuitant's date of death or the
annuitant's 81st birthday; plus
. any premium payments subsequent to the date of any monthly anniversary
with the largest policy value; minus
. any adjusted partial withdrawals subsequent to the date of the monthly
anniversary with the largest policy value.

This benefit is not available if the owner or annuitant is age 81 or older
on the policy date.

D. Return of Premium Death Benefit

The Return of Premium Death Benefit is:
. total premium payments; less
. any adjusted partial withdrawals (discussed below) as of the date of
death.

IF, under all four death benefit options:
. the surviving spouse elects to continue the policy instead of receiving the
death benefit; and
. the guaranteed minimum death benefit is greater than the policy value;
THEN:
. we will increase the policy value to be equal to the guaranteed minimum
death benefit. This increase is made only at the time the surviving spouse
elects to continue the policy.

Adjusted Partial Withdrawal

9.TAXES

Annuity Policies in General

Deferred annuity policies are a way of setting aside money for future needs
like retirement.

25
<PAGE>

Congress recognized how important saving for retirement is and provided special
rules in the Internal Revenue Code for annuities.

You will not be taxed on increases in the value of your policy until a
distribution occurs--either as a withdrawal or as annuity payments.

Qualified and Nonqualified Policies

If you purchase the policy under an individual retirement annuity, a pension
plan, or specially sponsored program, your policy is referred to as a qualified
policy.

Withdrawals--Qualified Policies

The information herein describing the taxation of nonqualified policies does
not apply to qualified policies. There are special rules that govern with
respect to qualified policies. Generally, these rules restrict:
. the amount that can be contributed to the policy during any year; and
. the time when amounts can be paid from the policies.

Withdrawals--403(b) Policies

26
<PAGE>

Diversification and Distribution Requirements

Withdrawals--Nonqualified Policies

If you make a withdrawal from your policy before the annuity commencement date,
the Internal Revenue Code treats that withdrawal as first coming from earnings
and then from your premium payments. When you make a withdrawal you are taxed
on the amount of the withdrawal that is earnings. (The excess interest
adjustment resulting from the withdrawal may affect the amount on which you are
taxed. The tax treatment of excess interest adjustments is uncertain. You
should consult a tax adviser if a withdrawal results in an excess interest
adjustment.) Different rules apply for annuity payments. See "Annuity Payments"
below.

Taxation of Death Benefit Proceeds

Annuity Payments

The remainder of each annuity payment is includable in gross income. Once the

27
<PAGE>

"investment in the contract" has been fully recovered, the full amount of any
additional annuity payments is includable in gross income.

If, after the annuity commencement date, annuity payments stop because an
annuitant died, the excess (if any) of the "investment in the contract" as of
the annuity commencement date over the aggregate amount of annuity payments
received that was excluded from gross income is generally allowable as a
deduction for your last taxable year.

Transfers, Assignments or Exchanges of Policies

Possible Tax Law Changes

10.ADDITIONAL FEATURES

Systematic Payout Option

(1) is up to 10% (annually) of your premium; and

(2) is any gains in the policy.

Family Income Protector

You can annuitize under the family income protector (subject to the conditions
described below) at the greater of the adjusted policy value or the minimum
annuitization value.

Minimum Annuitization Value. The minimum annuitization value is:
. the policy value on the date the rider is issued; plus
. any additional premium payments; minus

28
<PAGE>

. an adjustment for any withdrawals made after the date the rider is issued;
. which is accumulated at the annual growth rate written on page one of the
rider; minus
. any premium taxes.

The minimum annuitization value may only be used to annuitize using the family
income protector payment options and may not be used with any of the annuity
payment options listed in Section 7 of this prospectus. The family income
protector payment options are:
. Life Income--An election may be made for "No Period Certain" or "10 Years
Certain". In the event of the death of the annuitant prior to the end of the
chosen period certain, the remaining period certain payments will be
continued to the beneficiary.
. Joint and Full Survivor--An election may be made for "No Period Certain" or
"10 Years Certain". Payments will be made as long as either the annuitant or
joint annuitant is living. In the event of the death of both the annuitant
and joint annuitant prior to the end of the chosen period certain, the
remaining period certain payments will be continued to the beneficiary.

Minimum Annuitization Value Upgrade. You can upgrade your minimum annuitization
value to the policy value on a policy anniversary. This may be done within 30
days after any policy anniversary before your 85th birthday (earlier if
required by state law). For your convenience, we will put the last date to
upgrade on page one of the rider.

It generally will not be to your advantage to upgrade unless your policy value
exceeds your minimum annuitization value on the applicable policy anniversary.

Conditions of Exercise of the Family Income Protector. You can only annuitize
using the family income protector within the 30 days after the tenth or later
policy anniversary after the family income protector is elected or, in the case
of an upgrade of the minimum annuitization value, the tenth or later policy
anniversary following the upgrade. PFL may, at its discretion, change the
waiting period before the family income protector can be exercised in the
future. You cannot, however, annuitize using the family income protector after
the policy

29
<PAGE>

anniversary after your 94th birthday (earlier if required by state law). For
your convenience, we will put the first and last date to annuitize using the
family income protector on page one of the rider.

Note Carefully--If you annuitize at any time other than indicated above, you
cannot use the family income protector.

Guaranteed Minimum Stabilized Payments. Annuity payments under the family
income protector are guaranteed to never be less than the initial payment. See
the SAI for information concerning the calculation of the initial payment. The
payments will also be "stabilized" or held constant during each policy year.

During the first policy year after annuitizing using the family income
protector, each stabilized payment will equal the initial payment. On each
policy anniversary thereafter, the stabilized payment will increase or decrease
depending on the performance of the investment options you selected (but will
never be less than the initial payment), and then be held constant at that
amount for that policy year. The stabilized payment on each policy anniversary
will equal the greater of the initial payment or the payment supportable by the
annuity units in the selected investment options. See the SAI for additional
information concerning stabilized payments.

Family Income Protector Rider Fee. A rider fee, currently 0.30% of the minimum
annuitization value on the policy anniversary, is charged annually prior to
annuitization. We will also charge this fee if you take a complete withdrawal.
The rider fee is deducted from each variable investment option in proportion to
the amount of policy value in each subaccount.

Guaranteed Payment Fee. A guaranteed payment fee, currently equal to an
effective annual rate of 1.25% of the daily net asset value in the separate
account, is reflected in the amount of the variable payments you receive if you
annuitize under the family income protector rider. The guaranteed payment fee
is included on page one of the rider.

Termination. The family income protector is irrevocable. You have the option
not to use the benefit but you will not receive a refund of any fees you have
paid. The family income protector will terminate upon the earliest of the
following:
. annuitization (you will still get guaranteed minimum stabilized payments if
you annuitize using the minimum annuitization value under the family income
protector),
. upgrade of the minimum annuitization value (although a new rider will be
issued),
. termination of your policy, or
. 30 days after the policy anniversary after your 94th birthday (earlier if
required by state law).

Nursing Care and Terminal Condition Withdrawal Option

This benefit is also available to the annuitant or annuitant's spouse if the
owner is not a natural person.

You may exercise this benefit at any time (during the accumulation phase) and
there is no charge for this benefit.

This benefit may not be available in all states. See the policy or endorsement
for details and conditions.

Unemployment Waiver

No surrender charges or excess interest adjustment will apply to withdrawals if
you or your spouse is unemployed. In order to qualify,

30
<PAGE>

you (or your spouse, whichever is applicable) must have been:
. employed full time for at least two years prior to becoming unemployed; and
. employed full time on the policy date; and
. unemployed for at least 60 days in a row at the time of the withdrawal; and
. must have a minimum cash value at the time of withdrawal of $5,000.

You must provide written proof from your State's Department of Labor, which
verifies that you qualify for and are receiving unemployment benefits at the
time of withdrawal.

You may exercise this benefit at any time (during the accumulation phase) and
there is no charge for this benefit.

This benefit is also available to the annuitant or annuitant's spouse if the
owner is not a natural person. This benefit may not be available in all states.
See the policy for details.

Telephone Transactions

Telephone requests must be received while the New York Stock Exchange is open
to get same-day pricing of the transaction. We may discontinue this option at
any time.

Dollar Cost Averaging Program

Transfers must begin within 30 days. We will make the transfers on the 28th day
of the applicable month. You may change your allocations at anytime.

We may credit different interest rates for dollar cost averaging programs of
varying time

31
<PAGE>

periods. If you discontinue the dollar cost averaging program before its
completion, then the interest credited on amounts in the dollar cost averaging
fixed account may be adjusted downward, but not below the minimum guaranteed
effective annual interest rate of 3%.

Asset Rebalancing

During the accumulation phase you can instruct us to automatically rebalance
the amounts in your subaccounts to maintain your desired asset allocation. This
feature is called asset rebalancing and can be started and stopped at any time
free of charge. However, we will not rebalance if you are in the dollar cost
averaging program or if any other transfer is requested. If a transfer is
requested, we will honor the requested transfer and discontinue asset
rebalancing. New instructions are required to start asset rebalancing. Asset
rebalancing ignores amounts in the fixed account. You can choose to rebalance
monthly, quarterly, semi-annually, or annually.

11.OTHER INFORMATION

Ownership

You, as owner of the policy, exercise all rights under the policy. You can
change the owner at any time by notifying us in writing. An ownership change
may be a taxable event.

Assignment

You can also assign the policy any time during your lifetime. PFL will not be
bound by the assignment until we receive written notice of the assignment. We
will not be liable for any payment or other action we take in accordance with
the policy before we receive notice of the assignment. An assignment may be a
taxable event. There may be limitations on your ability to assign a qualified
policy. An assignment may have tax consequences.

PFL Life Insurance Company

PFL Life Insurance Company was incorporated under the laws of the State of Iowa
on April 19, 1961 as NN Investors Life Insurance Company, Inc. It is engaged in
the sale of life and health insurance and annuity policies. PFL is a
Transamerica Company and a wholly owned indirect subsidiary of AEGON USA, Inc.
which conducts most of its operations through subsidiary companies engaged in
the insurance business or in providing non-insurance financial services. All of
the stock of AEGON USA, Inc. is indirectly owned by AEGON N.V. of The
Netherlands, the securities of which are publicly traded. AEGON N.V., a holding
company, conducts its business through subsidiary companies engaged primarily
in the insurance business. PFL is licensed in the District of Columbia, Guam,
and in all states except New York.

All obligations arising under the policies, including the promise to make
annuity payments, are general corporate obligations of PFL.

The Separate Account

The separate account is registered with the SEC as a unit investment trust
under the 1940 Act. However, the SEC does not supervise the management, the
investment practices, or the policies of the separate account or PFL. Income,
gains and losses, whether or not realized, from assets allocated to the
separate account are, in accordance with the policies, credited to or charged
against the separate account without regard to PFL's other income, gains or
losses.

32
<PAGE>

Mixed and Shared Funding

Reinstatements

You may surrender your policy and transfer your money directly to another life
insurance company (sometimes referred to as a 1035 Exchange or a trustee-to-
trustee transfer). You may also request us to reinstate your policy after such
a transfer by returning the same total dollar amount of funds to the applicable
investment choices. The dollar amount will be used to purchase new accumulation
units at the then-current price. Because of changes in market value, your new
accumulation units may be worth more or less than the units you previously
owned. We recommend that you consult a tax professional to explain the possible
tax consequences of exchanges and/or reinstatements.

Voting Rights

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

Distributor of the Policies

Variations in Policy Provisions

IMSA

33
<PAGE>

self and independent assessment of their practices to become a member of IMSA.
The IMSA logo in our sales literature shows our ongoing commitment to these
standards.

Legal Proceedings

Financial Statements

The financial statements of PFL and the subaccounts are included in the SAI.

TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION

Glossary of Special Terms
The Policy--General Provisions
Certain Federal Income Tax Consequences
Investment Experience
Family Income Protector--Additional Information
Historical Performance Data
Published Ratings
State Regulation of PFL
Administration
Records and Reports
Distribution of the Policies

Voting Rights
Other Products
Custody of Assets
Legal Matters
Independent Auditors
Other Information
Financial Statements

34
<PAGE>

APPENDIX A

CONDENSED FINANCIAL INFORMATION

The accumulation unit values and the number of accumulation units outstanding
for each subaccount from the date of inception are shown in the following
tables.

5% Annually Compounding Death Benefit or Double Enhanced Death Benefit*

(Total Separate Account Annual Expenses: 1.55%)

<TABLE>
<CAPTION>
Accumulation Accumulation Number of
Unit Value Unit Value Accumulation
at Beginning at End Units at
of Year of Year End of Year
-------------------------------------------------------------------------------
<S> <C> <C> <C>
Merrill Lynch Basic Value Focus ML
Subaccount
1999.............................. $1.128892 $1.343442 10,438,672.328
1998.............................. $1.045149 $1.128892 1,297,000.676
1997(/1/)......................... $1.000000 $1.045149 1,158,912.186
-------------------------------------------------------------------------------
Merrill Lynch High Current Income
ML Subaccount
1999.............................. $0.991602 $1.032293 6,868,040.687
1998.............................. $1.036753 $0.991602 1,798,460.840
1997(/1/)......................... $1.000000 $1.036753 1,515,274.846
-------------------------------------------------------------------------------
Merrill Lynch Developing Capital
Markets Focus ML Subaccount
1999.............................. $0.540808 $0.0879578 1,905,288.618
1998.............................. $.776036 $0.540808 265,187.471
1997(/1/)......................... $1.000000 $0.776036 731,215.174
-------------------------------------------------------------------------------
Capital Guardian U.S. Equity ML
Subaccount***
1999(/5/)......................... $1.121334 $ 0.962537 1,693,186
1998(/4/)......................... $1.000000 $ 1.121334 662,269
-------------------------------------------------------------------------------
Dreyfus Small Cap Value ML
Subaccount
1999.............................. $1.785929 $2.270485 6,466,464.732
1998.............................. $1.849865 $1.785929 767,224.503
1997(/1/)......................... $1.763002 $1.849865 1,303,710.955
-------------------------------------------------------------------------------
Dreyfus U.S. Government Securities
ML Subaccount
1999.............................. $1.286733 $1.253314 4,528,567.266
1998.............................. $1.214143 $1.286733 1,216,510.180
1997(/1/)......................... $1.156486 $1.214143 250,859.166
-------------------------------------------------------------------------------
Endeavor Asset Allocation ML
Subaccount
1999.............................. $2.535888 $3.149277 5,298,098.838
1998.............................. $2.170350 $2.535888 581,570.894
1997(/1/)......................... $2.073492 $2.170350 560,006.492
-------------------------------------------------------------------------------
Endeavor Money Market ML Subaccount
1999.............................. $1.239556 $1.275932 4,284,434.467
1998.............................. $1.195541 $1.239556 358,756.987
1997(/1/)......................... $1.174747 $1.195541 237,144.180
-------------------------------------------------------------------------------
Endeavor Enhanced Index ML
Subaccount
1999.............................. $1.577775 $1.831774 15,093,778.210
1998.............................. $1.216754 $1.577775 972,108.717
1997(/1/)......................... $1.140312 $1.216754 842,854.350
-------------------------------------------------------------------------------
Endeavor High Yield ML Subaccount
1999.............................. $0.961203 $1.000739 2,298,661.602
1998(/3/)......................... $1.000000 $0.961203 121,411.851
</TABLE>

35
<PAGE>

5% Annually Compounding Death Benefit or Double Enhanced Death Benefit*

(Total Separate Account Annual Expenses: 1.55%)
continued

36
<PAGE>

Return of Premium Death Benefit*

(Total Separate Account Annual Expenses: 1.40%)

<TABLE>
<CAPTION>
Accumulation Accumulation Number of
Unit Value Unit Value Accumulation
at Beginning at End Units at
of Year of Year End of Year
-------------------------------------------------------------------------------
<S> <C> <C> <C>
Merrill Lynch Basic Value Focus ML
Subaccount
1999.............................. $1.126397 $1.348411 2,454,557.131
1998.............................. $1.045922 $1.126397 5,316,789.797
1997(/1/)......................... $1.000000 $1.045922 279,869.269
-------------------------------------------------------------------------------
Merrill Lynch High Current Income
ML Subaccount
1999.............................. $0.989413 $1.036111 1,743,155.373
1998.............................. $1.037515 $0.989413 5,690,546.719
1997(/1/)......................... $1.000000 $1.037515 296,791.692
-------------------------------------------------------------------------------
Merrill Lynch Developing Capital
Markets Focus ML Subaccount
1999.............................. $0.539622 $0.882824 423,799.182
1998.............................. $0.776606 $0.539622 1,369,352.447
1997(/1/)......................... $1.000000 $0.776606 190,773.375
-------------------------------------------------------------------------------
Capital Guardian U.S. Equity ML
Subaccount***
1999(/5/)......................... $1.122170 $0.964682 316,391
1998(/4/)......................... $1.000000 $1.122170 175,738
-------------------------------------------------------------------------------
Dreyfus Small Cap Value ML
Subaccount
1999.............................. $1.781970 $2.278888 $1,327,060.532
1998.............................. $1.851229 $1.781970 4,007,192.724
1997(/1/)......................... $1.763002 $1.851229 427,723.238
-------------------------------------------------------------------------------
Dreyfus U.S. Government Securities
ML Subaccount
1999.............................. $1.283878 $1.255919 1,667,132.394
1998.............................. $1.215033 $1.283878 2,530,595.105
1997(/1/)......................... $1.156486 $1.215033 142,705.078
-------------------------------------------------------------------------------
Endeavor Asset Allocation ML
Subaccount
1999.............................. $2.530280 $3.160924 1,189,043.271
1998.............................. $2.171948 $2.530280 2,567,841.512
1997(/1/)......................... $2.073492 $2.171948 146,972.115
-------------------------------------------------------------------------------
Endeavor Money Market ML Subaccount
1999.............................. $1.236824 $1.280646 547,317.665
1998.............................. $1.196418 $1.236824 1,488,032.472
1997(/1/)......................... $1.174747 $1.196418 186,769.997
1997(/1/)......................... $1.757991 $1.925022 399,676.687
-------------------------------------------------------------------------------
Endeavor Enhanced Index ML
Subaccount
1999.............................. $1.574288 $1.838549 3,001,172.313
1998.............................. $1.217647 $1.574288 4,212,857.466
1997(/1/)......................... $1.140312 $1.217647 517,261.206
-------------------------------------------------------------------------------
Endeavor High Yield ML Subaccount
1999.............................. $0.960378 $1.003083 625,739.546
1998(/3/)......................... $1.000000 $0.960378 277,923.144
-------------------------------------------------------------------------------
Endeavor Janus Growth ML Subaccount
1999.............................. $31.827882 $50.054351 292,621.286
1998.............................. $19.665157 $31.827882 468,647.981
1997(/1/)......................... $19.367467 $19.665157 22,707.469
</TABLE>

37
<PAGE>

Return of Premium Death Benefit*

(Total Separate Account Annual Expenses: 1.40%)
continued

<TABLE>
<CAPTION>
Accumulation Accumulation Number of
Unit Value Unit Value Accumulation
at Beginning at End Units at
of Year of Year End of Year
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
<S> <C> <C> <C>
Jennison Growth ML Subaccount**
1999............................... $1.197456 $1.240246 941,150.633
1998............................... $1.156993 $1.197456 4,355,754.613
1997(/1/).......................... $1.103566 $1.156993 278,938.732
-------------------------------------------------------------------------------
Capital Guardian Value ML
Subaccount**
1999............................... $2.208027 $2.115695 961,278.161
1998............................... $2.086130 $2.208027 3,058,826.681
1997(/1/).......................... $1.951455 $2.086130 185,606.823
-------------------------------------------------------------------------------
Capital Guardian Global ML
Subaccount**
1999............................... $1.051197 $1.534754 447,744.356
1998(/2/).......................... $1.000000 $1.051197 2,154,769.996
-------------------------------------------------------------------------------
T. Rowe Price Equity Income ML
Subaccount
1999............................... $2.061049 $2.107761 1,874,943.660
1998............................... $1.925022 $2.061049 5,183,438.967
1997(/1/).......................... $1.757991 $1.925022 399,676.687
-------------------------------------------------------------------------------
T. Rowe Price Growth Stock ML
Subaccount
1999............................... $2.587405 $3.124914 1,602,288.797
1998............................... $2.043487 $2.587405 3,959,439.113
1997(/1/).......................... $1.905196 $2.043487 275,873.510
-------------------------------------------------------------------------------
T. Rowe Price International Stock ML
Subaccount
1999............................... $1.529630 $2.001071 1,186,858.494
1998............................... $1.346560 $1.529630 3,171,012.285
1997(/1/).......................... $1.490376 $1.346560 396,884.393
</TABLE>

(/1/) Period from July 3, 1997 through December 31, 1997.
(/2/) Period from February 2, 1998 through December 31, 1998.

(/3/) Period from June 2, 1998 through December 31, 1998.

(/4/) Period from July 1, 1998 through December 31, 1998.

(/5/) Period from January 1, 1999 through December 31, 1999.

** Prior to October 9, 2000, the Capital Guardian Global Subaccount was
called the Endeavor Select Subaccount; the Capital Guardian Value
Subaccount was called the Endeavor Value Equity Subaccount; and the
Jennison Growth Subaccount was called the Endeavor Opportunity Value
Subaccount. Their names were changed at that time to reflect changes in
the underlying portfolios' advisors and investment policies. The unit
values shown reflect the portfolios' performance before those changes.

*** For periods prior to October 9, 2000, the unit values shown reflect
performance for the target account.

38
<PAGE>

The Transamerica VIF Growth Subaccount, Janus Aspen--Aggressive Growth
Subaccount--Service Shares, Janus Aspen--Strategic Value--Service Shares, Janus
Aspen--Worldwide Growth Subaccount--Service Shares, Fidelity--VIP Equity-Income
Subaccount, Fidelity--VIP II Contrafund(R) Subaccount, Fidelity--VIP III Growth
Opportunities Subaccount, Fidelity--VIP III Mid Cap Subaccount, WRL Alger
Aggressive Growth Subaccount, WRL Gabelli Global Growth Subaccount, WRL Goldman
Sachs Growth Subaccount, WRL Great Companies--Global/2/ Subaccount, WRL Janus
Global Subaccount, WRL NWQ Value Equity Subaccount, WRL Pilgrim Baxter Mid Cap
Growth Subaccount, WRL Salomon All Cap Subaccount, WRL T. Rowe Price Dividend
Growth Subaccount, and WRL T. Rowe Price Small Cap Subaccount had not commenced
operations as of December 31, 1999, therefore, comparable data is not
available.

39
<PAGE>

APPENDIX B

HISTORICAL PERFORMANCE DATA

Standardized Performance Data

Endeavor Money Market Subaccount. The yield of the Endeavor Money Market
Subaccount for a policy refers to the annualized income generated by an
investment under a policy in the subaccount over a specified seven-day period.
The yield is calculated by assuming that the income generated for that seven-
day period is generated each seven-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 under a
policy in the subaccount is assumed to be reinvested. The effective yield will
be slightly higher than the yield because of the compounding effect of this
assumed reinvestment.

Other Subaccounts. The yield of a subaccount (other than the Endeavor Money
Market Subaccount) for a policy refers to the annualized income generated by an
investment under a policy in the subaccount over a specified thirty-day period.
The yield is calculated by assuming that the income generated by the investment
during that thirty-day period is generated each thirty-day period over a 12-
month period and is shown as a percentage of the investment.

The yield and total return calculations for a subaccount do not reflect the
effect of any premium taxes that may be applicable to a particular policy and
they do not reflect the rider charge for the optional family income protector.
To the extent that any or all of a premium tax is applicable to a particular
policy, the yield and/or total return of that policy will be reduced. For
additional information regarding yields and total returns calculated using the
standard formats briefly summarized above, please refer to the Statement of
Additional Information, a copy of which may be obtained from the administrative
and service office upon request.

40
<PAGE>

TABLE 1--A
Standard Average Annual Total Returns
(Assuming A Surrender Charge and No Family Income Protector)
5% Annually Compounding Death Benefit or Double Enhanced Death Benefit*

(Total Separate Account Annual Expenses: 1.55%)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Inception
1 Year 5 Year of the Subaccount
Ended Ended Subaccount Inception
Subaccount 12/31/99 12/31/99 to 12/31/99 Date(/9/)
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Merrill Lynch Basic Value
Focus(/1/).................. 13.95% N/A 11.04% July 2, 1997
Merrill Lynch High Current
Income(/1/)................. (1.08%) N/A (0.54%) July 2, 1997
Merrill Lynch Developing
Capital Markets Focus(/1/).. 57.94% N/A (7.05%) July 2, 1997
Capital Guardian Global(/2/). 40.42% N/A 22.73% February 2, 1998
Capital Guardian U.S.
Equity(/3/)................. N/A N/A N/A October 9, 2000
Capital Guardian Value(/2/).. (10.00%) 14.76% 11.78% May 27, 1993
Dreyfus Small Cap Value(/4/). 22.14% 15.88% 12.90% May 4, 1993
Dreyfus U.S. Government
Securities.................. (7.83%) 4.51% 3.72% May 9, 1994
Endeavor Asset Allocation.... 19.17% 19.05% 13.88% April 8, 1991
Endeavor Enhanced Index...... 11.02% N/A 24.36% May 1, 1997
Endeavor High Yield.......... (1.21%) N/A (3.44%) June 2, 1998
Endeavor Janus Growth(/5/)... 51.59% 37.56% 23.72% July 1, 1992
Jennison Growth(/2/)......... (2.23%) N/A 5.97% November 18, 1996
T. Rowe Price Equity Income.. (3.54%) N/A 15.63% January 3, 1995
T. Rowe Price Growth Stock... 15.01% N/A 25.24% January 3, 1995
T. Rowe Price International
Stock(/6/).................. 25.08% 12.85% 8.06% April 8, 1991
Janus Aspen - Aggressive
Growth -
Service Shares(/7/)......... N/A N/A N/A N/A
Janus Aspen - Strategic Value
- Service Shares(/7/)....... N/A N/A N/A N/A
Janus Aspen - Worldwide
Growth -
Service Shares(/7/)......... N/A N/A N/A N/A
Transamerica VIF Growth(/7/). N/A N/A N/A May 1, 2000
Fidelity - VIP Equity-Income
- Service Class 2(/7/)...... N/A N/A N/A May 1, 2000
Fidelity - VIP II
Contrafund(R) -
Service Class 2(/7/)........ N/A N/A N/A May 1, 2000
Fidelity - VIP III Growth
Opportunities - Service
Class 2(/7/)................ N/A N/A N/A May 1, 2000
Fidelity - VIP III Mid Cap -
Service Class 2(/7/)........ N/A N/A N/A May 1, 2000
WRL Alger Aggressive
Growth(/7/)................. N/A N/A N/A May 1, 2000
WRL Gabelli Global
Growth(/7/)................. N/A N/A N/A N/A
WRL Goldman Sachs
Growth(/7/)................. N/A N/A N/A May 1, 2000
WRL Great Companies -
Global/2/(/7/).............. N/A N/A N/A N/A
WRL Janus Global(/7/)(/8/)... N/A N/A N/A May 1, 2000
WRL NWQ Value Equity(/7/).... N/A N/A N/A May 1, 2000
WRL Pilgrim Baxter Mid Cap
Growth(/7/)................. N/A N/A N/A May 1, 2000
WRL Salomon All Cap(/7/)..... N/A N/A N/A May 1, 2000
WRL T. Rowe Price Dividend
Growth(/7/)................. N/A N/A N/A May 1, 2000
WRL T. Rowe Price Small
Cap(/7/).................... N/A N/A N/A May 1, 2000
</TABLE>

41
<PAGE>

TABLE 1--B
Standard Average Annual Total Returns
(Assuming A Surrender Charge and No Family Income Protector)
Return of Premium Death Benefit*

(Total Separate Account Annual Expenses: 1.40%)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Inception
1 Year 5 Year of the Subaccount
Ended Ended Subaccount Inception
Subaccount 12/31/99 12/31/99 to 12/31/99 Date(/9/)
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Merrill Lynch Basic Value
Focus(/1/).................. 14.12% N/A 11.22% July 2, 1997
Merrill Lynch High Current
Income(/1/)................. (0.92%) N/A (0.39%) July 2, 1997
Merrill Lynch Developing
Capital Markets Focus(/1/).. 58.18% N/A (6.91%) July 2, 1997
Capital Guardian Global(/2/). 40.64% N/A 22.92% February 2, 1998
Capital Guardian U.S.
Equity(/3/)................. N/A N/A N/A October 9, 2000
Capital Guardian Value(/2/).. (9.86%) 14.92% 11.92% May 27, 1993
Dreyfus Small Cap Value(/4/). 22.33% 16.05% 13.06% May 4, 1993
Dreyfus U.S. Government
Securities.................. (7.85%) 4.64% 3.84% May 9, 1994
Endeavor Asset Allocation.... 19.36% 19.23% 14.04% April 8, 1991
Endeavor Enhanced Index...... 11.19% N/A 24.54% May 1, 1997
Endeavor High Yield.......... (1.05%) N/A (3.29%) June 2, 1998
Endeavor Janus Growth(/5/)... 51.82% 37.77% 23.90% July 1, 1992
Jennison Growth(/2/)......... (2.07%) N/A 6.13% November 18, 1996
T. Rowe Price Equity Income.. (3.39%) N/A 15.80% January 3, 1995
T. Rowe Price Growth Stock... 15.19% N/A 25.42% January 3, 1995
T. Rowe Price International
Stock(/6/).................. 25.28% 13.02% 8.23% April 8, 1991
Janus Aspen - Aggressive
Growth -Service Shares(/7/). N/A N/A N/A N/A
Janus Aspen - Strategic
Value -Service Shares(/7/).. N/A N/A N/A N/A
Janus Aspen - Worldwide
Growth -Service Shares(/7/). N/A N/A N/A N/A
Transamerica VIF Growth(/7/). N/A N/A N/A May 1, 2000
Fidelity - VIP Equity-
Income -
Service Class 2(/7/)........ N/A N/A N/A May 1, 2000
Fidelity - VIP II
Contrafund(R) -
Service Class 2(/7/)........ N/A N/A N/A May 1, 2000
Fidelity - VIP III Growth
Opportunities -Service Class
2(/7/)...................... N/A N/A N/A May 1, 2000
Fidelity - VIP III Mid Cap -
Service Class 2(/7/)........ N/A N/A N/A May 1, 2000
WRL Alger Aggressive
Growth(/7/)................. N/A N/A N/A May 1, 2000
WRL Gabelli Global
Growth(/7/)................. N/A N/A N/A N/A
WRL Goldman Sachs
Growth(/7/)................. N/A N/A N/A May 1, 2000
WRL Great Companies -
Global/2/(/7/)............. N/A N/A N/A N/A
WRL Janus Global(/7/)(/8/)... N/A N/A N/A May 1, 2000
WRL NWQ Value Equity(/7/).... N/A N/A N/A May 1, 2000
WRL Salomon All Cap(/7/)..... N/A N/A N/A May 1, 2000
WRL Pilgrim Baxter Mid Cap
Growth(/7/)................. N/A N/A N/A May 1, 2000
WRL T. Rowe Price Dividend
Growth(/7/)................. N/A N/A N/A May 1, 2000
WRL T. Rowe Price Small
Cap(/7/).................... N/A N/A N/A May 1, 2000
</TABLE>

42
<PAGE>

(/1/) The Subaccounts invest in Class A shares of Merrill Lynch Variable Series
Funds, Inc. portfolios. There are no 12b-1 fees deducted from Class A
shares.

(/2/) Prior to October 9, 2000, the Capital Guardian Global Subaccount was
called the Endeavor Select Subaccount; the Capital Guardian Value
Subaccount was called the Endeavor Value Equity Subaccount; and the
Jennison Growth Subaccount was called the Endeavor Opportunity Value
Subaccount. Their names were changed at that time to reflect changes in
the underlying portfolios' advisors and investment policies. The
performance figures shown reflect the portfolios' performance before
those changes.

(/3/) Effective October 9, 2000, shares of each series of the target account
were liquidated and the proceeds were used to purchase shares of the
Capital Guardian U.S. Equity Portfolio. This was a fundamental change in
the structure of the target account from an actively managed account to a
passive unit investment trust. In addition, Capital Guardian U.S. Equity
has a different subadviser and fundamentally different investment
policies. Therefore, no performance history is given for periods prior to
October 9, 2000 because such history is not relevant or applicable to the
Capital Guardian U.S. Equity Subaccount. See the SAI for performance
information for the target account prior to October 9, 2000.

(/5/) Effective April 30, 1999, shares of the WRL Janus Growth Portfolio were
removed and replaced with shares of the Endeavor Janus Growth Portfolio.
The Endeavor Janus Growth Portfolio has the same investment objectives,
the same investment adviser (Janus Capital Corporation) and the same
advisory fees as the WRL Janus Growth Portfolio. Performance prior to May
1, 1999 reflects performance of the annuity subaccount while it was
invested in the WRL Janus Growth Portfolio.

(/6/) Effective January 1, 1995, Rowe-Price Fleming International, Inc. became
the Adviser to the T. Rowe Price International Stock Portfolio. The
Portfolio's name was changed from the Global Growth Portfolio and the
Portfolio's shareholders approved a change in investment objective from
investments in small capitalization companies on a global basis to
investments in a broad range of companies on an international basis
(i.e., non-U.S. companies). Effective August 8, 2000, T. Rowe Price
International, Inc. became the adviser to the Portfolio.

(/7/) The Janus Aspen--Aggressive Growth Subaccount--Service Shares, Janus
Aspen--Strategic Value Subaccount--Service Shares, Janus Aspen--Worldwide
Growth Subaccount--Service Shares, Transamerica VIF Growth Subaccount,
Fidelity--VIP Equity-Income Subaccount, Fidelity--VIP II Contrafund(R)
Subaccount, Fidelity--VIP III Growth Opportunities Subaccount, Fidelity--
VIP III Mid Cap Subaccount, WRL Alger Aggressive Growth Subaccount, WRL
Gabelli Global Growth Subaccount, WRL Goldman Sachs Growth Subaccount,
WRL Great Companies--Global/2/ Subaccount, WRL Janus Global Subaccount,
WRL NWQ Value Equity Subaccount, WRL Pilgrim Baxter Mid Cap Growth
Subaccount , WRL Salomon All Cap Subaccount, WRL T. Rowe Price Dividend
Growth Subaccount, and WRL T. Rowe Price Small Cap Subaccount had not
commenced operations as of December 31, 1999, therefore, comparable
information is not available.

(/9/) Performance prior to July 3, 1997, reflects performance of PFL Endeavor
VA Separate Account subaccounts prior to the offering of the PFL Endeavor
ML version of the policies.

43
<PAGE>

Non-Standardized Performance Data

In addition to the standard data discussed above, similar performance data for
other periods may also be shown.

44
<PAGE>

TABLE 2--A
Non-Standardized Average Annual Total Returns
(Assuming No Surrender Charge or Family Income Protector)
5% Annually Compounding Death Benefit or Double Enhanced Death Benefit*

(Total Separate Account Annual Expenses: 1.55%)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Inception
1 Year 5 Year of the Subaccount
Ended Ended Subaccount Inception
Subaccount 12/31/99 12/31/99 to 12/31/99 Date(/9/)
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Merrill Lynch Basic Value
Focus(/1/).................. 19.27% N/A 12.54% July 2, 1997
Merrill Lynch High Current
Income(/1/)................. 4.33% N/A 1.28% July 2, 1997
Merrill Lynch Developing
Capital Markets Focus(/1/).. 63.00% N/A (5.01%) July 2, 1997
Capital Guardian Global(/2/). 45.59% N/A 24.96% February 2, 1998
Capital Guardian U.S.
Equity(/3/)................. N/A N/A N/A October 9, 2000
Capital Guardian Value(/2/).. (4.54%) 14.99% 11.88% May 27, 1993
Dreyfus Small Cap Value(/4/). 27.41% 16.09% 12.99% May 4, 1993
Dreyfus U.S. Government
Securities.................. (2.38%) 4.84% 4.01% May 9, 1994
Endeavor Asset Allocation.... 24.46% 19.27% 13.91% April 8, 1991
Endeavor Enhanced Index...... 16.36% N/A 25.45% May 1, 1997
Endeavor High Yield.......... 4.20% N/A 0.05% June 2, 1998
Endeavor Janus Growth(/5/)... 56.69% 37.66% 23.76% July 1, 1992
Jennison Growth(/2/)......... 3.19% N/A 6.99% November 18, 1996
T. Rowe Price Equity Income.. 1.89% N/A 15.94% January 3, 1995
T. Rowe Price Growth Stock... 20.33% N/A 25.45% January 3, 1995
T. Rowe Price International
Stock(/6/).................. 30.34% 13.09% 8.10% April 8, 1991
Janus Aspen - Aggressive
Growth -
Service Shares(/7/)......... N/A N/A N/A N/A
Janus Aspen - Strategic Value
-
Service Shares(/7/)......... N/A N/A N/A N/A
Janus Aspen - Worldwide
Growth -
Service Shares(/7/)......... N/A N/A N/A N/A
Transamerica VIF Growth(/7/). N/A N/A N/A May 1, 2000
Fidelity - VIP Equity-Income
-
Service Class 2(/7/)........ N/A N/A N/A May 1, 2000
Fidelity - VIP II
Contrafund(R) -
Service Class 2(/7/)........ N/A N/A N/A May 1, 2000
Fidelity - VIP III Growth
Opportunities - Service
Class 2(/7/)................ N/A N/A N/A May 1, 2000
Fidelity - VIP III Mid Cap -
Service Class 2(/7/)........ N/A N/A N/A May 1, 2000
WRL Alger Aggressive
Growth(/7/)................. N/A N/A N/A May 1, 2000
WRL Gabelli Global
Growth(/7/)................. N/A N/A N/A N/A
WRL Goldman Sachs
Growth(/7/)................. N/A N/A N/A May 1, 2000
WRL Great Companies -
Global/2/(/7/).............. N/A N/A N/A N/A
WRL Janus Global(/7/)(/8/)... N/A N/A N/A May 1, 2000
WRL NWQ Value Equity(/7/).... N/A N/A N/A May 1, 2000
WRL Pilgrim Baxter Mid Cap
Growth(/7/)................. N/A N/A N/A May 1, 2000
WRL Salomon All Cap(/7/)..... N/A N/A N/A May 1, 2000
WRL T. Rowe Price Dividend
Growth(/7/)................. N/A N/A N/A May 1, 2000
WRL T. Rowe Price Small
Cap(/7/).................... N/A N/A N/A May 1, 2000
</TABLE>

45
<PAGE>

TABLE 2--B
Non-Standardized Average Annual Total Returns
(Assuming No Surrender Charge and Family Income Protector)
Return of Premium Death Benefit*

(Total Separate Account Annual Expenses: 1.40%)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Inception
1 Year 5 Year of the Subaccount
Ended Ended Subaccount Inception
Subaccount 12/31/99 12/31/99 to 12/31/99 Date(/9/)
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Merrill Lynch Basic Value
Focus(/1/).................. 19.45% N/A 12.72% July 2, 1997
Merrill Lynch High Current
Income(/1/)................. 4.49% N/A 1.43% July 2, 1997
Merrill Lynch Developing
Capital Markets Focus(/1/).. 63.24% N/A (4.87%) July 2, 1997
Capital Guardian Global(/2/). 45.80% N/A 25.15% February 2, 1998
Capital Guardian U.S.
Equity(/3/)................. N/A N/A N/A October 9, 2000
Capital Guardian Value(/2../. (4.39%) 15.14% 12.02% May 27, 1993
Dreyfus Small Cap Value(/4/). 27.60% 16.26% 13.16% May 4, 1993
Dreyfus U.S. Government
Securities.................. (2.39%) 4.96% 4.14% May 9, 1994
Endeavor Asset Allocation.... 24.65% 19.42% 14.08% April 8, 1991
Endeavor Enhanced Index...... 16.53% N/A 25.63% May 1, 1997
Endeavor High Yield.......... 4.36% N/A 0.19% June 2, 1998
Endeavor Janus Growth(/5/)... 56.92% 37.86% 23.94% July 1, 1992
Jennison Growth(/2/)......... 3.35% N/A 7.15% November 18, 1996
T. Rowe Price Equity Income.. 2.04% N/A 16.10% January 3, 1995
T. Rowe Price Growth Stock... 20.51% N/A 25.63% January 3, 1995
T. Rowe Price International
Stock(/6/).................. 30.53% 13.25% 8.26% April 8, 1991
Janus Aspen - Aggressive
Growth -
Service Shares(/7/)......... N/A N/A N/A N/A
Janus Aspen - Strategic Value
-
Service Shares(/7/)......... N/A N/A N/A N/A
Janus Aspen - Worldwide
Growth -
Service Shares(/7/)......... N/A N/A N/A N/A
Transamerica VIF Growth(/7/). N/A N/A N/A May 1, 2000
Fidelity - VIP Equity-Income
-
Service Class 2(/7/)........ N/A N/A N/A May 1, 2000
Fidelity - VIP II
Contrafund(R) -
Service Class 2(/7/)........ N/A N/A N/A May 1, 2000
Fidelity - VIP III Growth
Opportunities - Service
Class 2(/7/)................ N/A N/A N/A May 1, 2000
Fidelity - VIP III Mid Cap -
Service Class 2(/7/)........ N/A N/A N/A May 1, 2000
WRL Alger Aggressive
Growth(/7/)................. N/A N/A N/A May 1, 2000
WRL Gabelli Global
Growth(/7/)................. N/A N/A N/A N/A
WRL Goldman Sachs
Growth(/7/)................. N/A N/A N/A May 1, 2000
WRL Great Companies -
Global/2/(/7/).............. N/A N/A N/A N/A
WRL Janus Global(/7/)(/8/)... N/A N/A N/A May 1, 2000
WRL NWQ Value Equity(/7/).... N/A N/A N/A May 1, 2000
WRL Pilgrim Baxter Mid Cap
Growth(/7/)................. N/A N/A N/A May 1, 2000
WRL Salomon All Cap(/7/)..... N/A N/A N/A May 1, 2000
WRL T. Rowe Price Dividend
Growth(/7/)................. N/A N/A N/A May 1, 2000
WRL T. Rowe Price Small
Cap(/7/).................... N/A N/A N/A May 1, 2000
</TABLE>

46
<PAGE>

(/1/) The Subaccounts invest in Class A shares of Merrill Lynch Variable Series
Funds, Inc. portfolios. There are no 12b-1 fees deducted from Class A
shares.

(/4/) Effective September 16, 1996, The Dreyfus Corporation became the adviser
to the Dreyfus Small Cap Value Portfolio, formerly known as Quest for
Value Small Cap Portfolio. The Portfolio was previously advised by OpCap
Advisors.
(/5/) Effective April 30, 1999, shares of the WRL Janus Growth Portfolio were
removed and replaced with shares of the Endeavor Janus Growth Portfolio.
The Endeavor Janus Growth Portfolio has the same investment objectives,
the same investment adviser (Janus Capital Corporation) and the same
advisory fees as the WRL Janus Growth Portfolio. Performance prior to May
1, 1999 reflects performance of the annuity subaccount while it was
invested in the WRL Janus Growth Portfolio.

(/7/) The Janus Aspen--Aggressive Growth Subaccount--Service Shares, Janus
Aspen--Strategic Value Subaccount--Service Shares, Janus Aspen--Worldwide
Growth Subaccount--Service Shares, Transamerica VIF Growth Subaccount,
Fidelity--VIP Equity-Income Subaccount, Fidelity--VIP II Contrafund(R)
Subaccount, Fidelity--VIP III Growth Opportunities Subaccount, Fidelity--
VIP III Mid Cap Subaccount, WRL Alger Aggressive Growth Subaccount, WRL
Gabelli Global Growth Subaccount, WRL Goldman Sachs Growth Subaccount,
WRL Great Companies--Global/2/ Subaccount, WRL Janus Global Subaccount,
WRL NWQ Value Equity Subaccount, WRL Pilgrim Baxter Mid Cap Growth
Subaccount, WRL Salomon All Cap Subaccount, WRL T. Rowe Price Dividend
Growth Subaccount, and WRL T. Rowe Price Small Cap Subaccount had not
commenced operations as of December 31, 1999, therefore, comparable
information is not available.

(/8/) The WRL Janus Global Subaccount is only available to owners that held an
investment in this subaccount on September 1, 2000. However, if you
withdraw all your money from this subaccount after September 1, 2000, you
may not reinvest your money in this subaccount.
(/9/) Performance prior to July 3, 1997, reflects performance of PFL Endeavor
Variable Annuity Subaccounts prior to the offering of the Policies
through Merrill Lynch.

47
<PAGE>

48
<PAGE>

TABLE 3--A
Adjusted Historical Average Annual Total Returns(/1/)
(Assuming No Surrender Charge or Family Income Protector)
5% Annually Compounding Death Benefit or Double Enhanced Death Benefit*

(Total Separate Account Account Annual Expenses: 1.55%)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Corresponding
10 Year Portfolio
Portfolio 1 Year 5 Year or Inception Inception Date
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Capital Guardian Global........ 45.59% N/A 24.96% February 3, 1998
Capital Guardian U.S. Equity... N/A N/A N/A October 9, 2000
Capital Guardian Value......... (4.54%) 14.99% 11.88% May 27, 1993
Dreyfus Small Cap Value(/2/)... 27.41% 16.09% 12.99% May 4, 1993
Dreyfus U.S. Government
Securities.................... (2.38%) 4.84% 4.01% May 13, 1994
Endeavor Asset Allocation...... 24.46% 19.24% 13.91% April 8, 1991
Endeavor Enhanced Index........ 16.36% N/A 25.45% May 1, 1997
Endeavor High Yield............ 4.20% N/A 0.05% June 1, 1998
Endeavor Janus Growth.......... 56.69% 37.66% 35.08% May 1, 1999
Jennison Growth................ 3.19% N/A 6.99% November 18, 1996
T. Rowe Price Equity Income.... 1.89% N/A 15.94% January 3, 1995
T. Rowe Price Growth Stock..... 20.33% N/A 25.45% January 3, 1995
T. Rowe Price International
Stock(/3/).................... 30.34% 13.09% 8.10% April 8, 1991
Janus Aspen - Aggressive
Growth -
Service Shares................ N/A N/A N/A December 31, 1999
Janus Aspen - Strategic Value -

Service Shares................ N/A N/A N/A December 31, 1999
Janus Aspen - Worldwide
Growth -
Service Shares................ N/A N/A N/A December 31, 1999
Transamerica VIF Growth(/4/)... 35.72% 45.88% 27.77%+ February 26, 1969
Fidelity - VIP Equity-Income -
Service Class 2(/5/).......... 4.63% 16.76% 12.72%+ October 9, 1986
Fidelity - VIP II
Contrafund(R) -
Service Class 2(/5/).......... 22.27% N/A 25.76% January 3, 1995
Fidelity - VIP III Growth
Opportunities -
Service Class 2(/5/).......... 2.58% N/A 19.66% January 3, 1995
Fidelity - VIP III Mid Cap -
Service Class 2(/5/).......... 46.72% N/A 50.74% December 28, 1998
WRL Alger Aggressive Growth.... 66.50% 34.56% 28.38% March 1, 1994
WRL Gabelli Global Growth...... N/A N/A N/A September 1, 2000
WRL Goldman Sachs Growth....... N/A N/A 16.82% May 3, 1999
WRL Great Companies -
Global/2/ ................... N/A N/A N/A September 1, 2000
WRL Janus Global(/6/).......... 68.58% 30.94% 25.98% December 3, 1992
WRL NWQ Value Equity........... 6.29% N/A 9.07% May 1, 1996
WRL Pilgrim Baxter Mid Cap
Growth........................ N/A N/A 76.30% May 3, 1999
WRL Salomon All Cap............ N/A N/A 14.41% May 3, 1999
WRL T. Rowe Price Dividend
Growth........................ N/A N/A (8.36%) May 3, 1999
WRL T. Rowe Price Small Cap.... N/A N/A 37.13% May 3, 1999
</TABLE>
-------------------------------------------------------------------------------
+Ten Year Date

49
<PAGE>

TABLE 3--B
Adjusted Historical Average Annual Total Returns(/1/)
(Assuming No Surrender Charge or Family Income Protector)
Return of Premium Death Benefit*

(Total Separate Account Annual Expenses: 1.40%)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Corresponding
10 Year Portfolio
Portfolio 1 Year 5 Year or Inception Inception Date
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Capital Guardian Global........ 45.80% N/A 25.15% February 3, 1998
Capital Guardian U.S. Equity... N/A N/A N/A October 9, 2000
Capital Guardian Value......... (4.39%) 15.14% 12.02% May 27, 1993
Dreyfus Small Cap Value(/2/)... 27.60% 16.26% 13.16% May 4, 1993
Dreyfus U.S. Government
Securities.................... (2.39%) 4.96% 4.14% May 13, 1994
Endeavor Asset Allocation...... 24.65% 19.42% 14.08% April 8, 1991
Endeavor Enhanced Index........ 16.53% N/A 25.63% May 1, 1997
Endeavor High Yield............ 4.36% N/A 0.19% June 1, 1998
Endeavor Janus Growth.......... 56.92% 37.86% 35.21% May 1, 1999
Jennison Growth................ 3.35% N/A 7.15% November 18, 1996
T. Rowe Price Equity Income.... 2.04% N/A 16.10% January 3, 1995
T. Rowe Price Growth Stock..... 20.51% N/A 25.63% January 3, 1995
T. Rowe Price International
Stock(/3/).................... 30.53% 13.25% 8.26% April 8, 1991
Janus Aspen - Aggressive
Growth - Service Shares....... N/A N/A N/A December 31, 1999
Janus Aspen - Strategic Value -
Service Shares................ N/A N/A N/A December 31, 1999
Janus Aspen - Worldwide
Growth -Service Shares........ N/A N/A N/A December 31, 1999
Transamerica VIF Growth(/4/)... 35.92% 39.58% 25.07%+ February 26, 1969
Fidelity - VIP Equity-Income -
Service Class 2(/5/).......... 4.78% 16.94% 12.89% October 9, 1986
Fidelity - VIP II
Contrafund(R) -
Service Class 2(/5/).......... 22.45% N/A 25.95% January 3, 1995
Fidelity - VIP III Growth
Opportunities -Service Class
2(/5/)........................ 2.74% N/A 19.83% January 3, 1995
Fidelity - VIP III Mid Cap -
Service Class 2(/5/).......... 46.94% N/A 50.96% December 28, 1998
WRL Alger Aggressive Growth.... 66.75% 34.76% 28.57% March 1, 1994
WRL Gabelli Global Growth...... N/A N/A N/A September 1, 2000
WRL Goldman Sachs Growth....... N/A N/A 16.74% May 3, 1999
WRL Great Companies -
Global/2/.................... N/A N/A N/A September 1, 2000
WRL Janus Global(/6/).......... 68.82% 31.13% 26.17% December 3, 1992
WRL NWQ Value Equity........... 6.45% N/A 9.24% May 1, 1996
WRL Pilgrim Baxter Mid Cap
Growth........................ N/A N/A 76.46% May 3, 1999
WRL Salomon All Cap............ N/A N/A 14.52% May 3, 1999
WRL T. Rowe Price Dividend
Growth........................ N/A N/A (8.26%) May 3, 1999
WRL T. Rowe Price Small Cap.... N/A N/A 37.26% May 3, 1999
</TABLE>
-------------------------------------------------------------------------------
+Ten Year Date

50
<PAGE>

(/1/)The calculation of total return performance for periods prior to inception
of the subaccounts reflects deductions for the mortality and expense risk
fee and administrative charge on a monthly basis, rather than a daily
basis. The monthly deduction is made at the beginning of each month and
generally approximates the performance that would have resulted if the
subaccounts had actually been in existence since the inception of the
portfolio.
(/2/)Effective September 16, 1996, The Dreyfus Corporation became the adviser
to the Dreyfus Small Cap Value Portfolio, formerly known as Quest for
Value Small Cap Portfolio. The portfolio was previously advised by OpCap
Advisors.

(/3/)Effective January 1, 1995, Rowe-Price Fleming International, Inc. became
the Adviser to the T. Rowe Price International Stock Portfolio. The
Portfolio's name was changed from the Global Growth Portfolio and the
Portfolio's shareholders approved a change in investment objective from
investments in small capitalization companies on a global basis to
investments in a broad range of companies on an international basis (i.e.,
non-U.S. companies). Effective August 8, 2000, T. Rowe Price
International, Inc. became the adviser to the Portfolio.

(/4/)The Growth Portfolio of the Transamerica Variable Insurance Fund, Inc., is
the successor to Separate Account Fund C of Transamerica Occidental Life
Insurance Company, a management investment company funding variable
annuities, through a reorganization on November 1, 1996. Accordingly, the
performance data for the Transamerica VIF Growth Portfolio include
performance of its predecessor.
(/5/)Returns prior to January 12, 2000 for the portfolios are based on
historical returns for Initial Class Shares.

(/6/)The WRL Janus Global Subaccount is only available to owners that held an
investment in this subaccount on September 1, 2000. However, if you
withdraw all your money from this subaccount after September 1, 2000, you
may not reinvest your money in this subaccount.

The figures in the above tables may reflect waiver of advisory fees and
reimbursement of other expenses. In the absence of such waivers, the average
annual total return figures would have been lower. (See the Fee Table.)

Merrill Lynch Variable Series Funds, Inc.--Adjusted Historical Data. Prior to
July 3, 1997, the Merrill Lynch Basic Value Focus Subaccount, the Merrill Lynch
Developing Capital Markets Focus Subaccount and the Merrill Lynch High Current
Income Subaccount (the "Merrill Lynch Subaccounts") had not yet commenced
operations. However, Table 3 shows average annual total return information
based on the hypothetical assumption that those subaccounts have been available
to the PFL Endeavor ML Variable Annuity Account since inception of the
underlying portfolios.

51
<PAGE>

TABLE 3
5% Annually Compounding Death Benefit or Double Enhanced Death Benefit*
(Assuming No Family Income Protector)
(Total Separate Account Annual Expenses: 1.55%)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Corresponding
Portfolio
10 Year or Inception
Portfolio 1 Year 5 Year Inception Date(/1/)
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Merrill Lynch Basic Value Focus..... 19.27% 17.67% 14.92% July 1, 1993
Merrill Lynch High Current Income... 4.33% 6.46% 8.60%+ April 20, 1982
Merrill Lynch Developing Capital
Markets Focus...................... 63.00% 2.04% 0.72% May 2, 1994
-------------------------------------------------------------------------------
Return of Premium Death Benefit*
(Assuming No Family Income Protector)
(Total Separate Account Annual Expenses: 1.40%)
-------------------------------------------------------------------------------
<CAPTION>
Corresponding
Portfolio
10 Year or Inception
Portfolio 1 Year 5 Year Inception Date(/1/)
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Merrill Lynch Basic Value Focus..... 19.45% 17.85% 15.09% July 1, 1993
Merrill Lynch High Current Income... 4.49% 6.62% 8.76%+ April 20, 1982
Merrill Lynch Developing Capital
Markets Focus...................... 63.24% 2.20% 0.87% May 2, 1994
</TABLE>
-------------------------------------------------------------------------------
+Ten Year Date

(/1/)The Subaccounts invest in Class A shares of the Merrill Lynch Variable
Series Funds, Inc. portfolios. The performance data for periods prior to
the date the Merrill Lynch Subaccounts commenced operations is based on
the performance of the underlying portfolios and the assumption that the
Merrill Lynch Subaccounts were in existence for the same period as the
corresponding portfolios, with a level of charges equal to those currently
assessed against the Subaccount or against owners' policy values under the
Policies. The Merrill Lynch Basic Value Focus Fund commenced operations on
July 1, 1993; the Merrill Lynch Developing Capital Markets Focus Fund
commenced operations on May 2, 1994; and the Merrill Lynch High Current
Income Fund commenced operations on April 20, 1982. For purposes of the
calculation of the performance data prior to dates of inception of the
subaccounts, the deductions for the mortality and expense risk fee, and
administrative charge are made on a monthly basis, rather than a daily
basis. The monthly deduction is made at the beginning of each month and in
PFL's opinion generally approximates the performance that would have
resulted if the Merrill Lynch Subaccounts had actually been in existence
since the inception of the underlying portfolios. Performance data for
periods of less than seven years reflect deduction of the surrender
charge.

52
<PAGE>

APPENDIX C

POLICY VARIATIONS

<TABLE>
------------------------------------------------------------------------
<S> <C>
Policy Form/Endorsement Approximate First Issue Date
AV201 101 65 189 (Policy Form) January 1991
AE830 292 (endorsement) May 1992
AE847 394 (endorsement) June 1994
AE871 295 (endorsement) May 1995
AV254 101 87 196 (Policy Form) June 1996
AE909 496 (endorsement) June 1996
AE890 196 (endorsement) June 1996
AV320 101 99 197 (Policy Form) May 1997
AE945 197 (endorsement) May 1997
AV376 101 106 1197 (Policy Form) May 1998
AV432 101 114 199 (Group Policy Form) May 2000
AV494 101 124 100 (Individual Policy Form) May 2000
------------------------------------------------------------------------
</TABLE>

53
<PAGE>

<TABLE>
<CAPTION>
AV201 101 65 AV201 101 65 AV254 101 87 AV320 101 99 AV376 101 106 AV432 101 114
AV201 101 65 189, AE830 292, 189, AE847 394, 196, AE909 496, 197 and AE945 1197 and AE 945 199 and AV494
Product Feature 189 and AE847 394 and AE871 295 and AE890 196 197 197 101 124 100
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Excess Interest N/A N/A N/A Yes Yes Yes Yes
Adjustment
---------------------------------------------------------------------------------------------------------------------------------
Guaranteed Total premiums 5% Annually 5% Annually 5% Annually 5% Annually 5% Annually 5% Annually
Minimum Death paid, less any Compounding Compounding Compounding Compounding Compounding Compounding
Benefit partial (Option A). (Option A) or (Option A) or (Option A), (Option A), (Option A),
Option(s) withdrawals Annual Step-Up Annual Step-Up Annual Step-Up Double Greater of 5%
and any (Option B). (Option B). (Option B), or Enhanced Annually
surrender Option A is Option A is Return of (Option B), or Compounding
charges made only available only available Premium Return of through age 80
before death, if owner and if owner and (Option C). Premium or Annual
accumulated at annuitant are annuitant are Option A is (Option C). Step-Up
4% to the date both under age both under age only available Option A is through age 80
we receive due 75. 75. if owner and only available (Option B),
proof of death annuitant are if owner and Return of
or the policy both under age annuitant are Premium
value on the 75. Option B both under Age (Option C),
date we is only 75. Option B and Monthly
receive due available if is only Step-Up
proof of owner and available if through age 80
death, which annuitant are owner and (Option D).
ever is under age 81. annuitant are Option A is
greater. both under age only available
81. if owner and
annuitant are
both under age
75. Option B
and D are only
available if
owner and
annuitant are
both under age
81.
---------------------------------------------------------------------------------------------------------------------------------
Guaranteed 1 and 3 year 1 and 3 year 1 and 3 year 1, 3, 5, and 7 1, 3, 5 and 7 1, 3, 5, and 7 1, 3, 5, and 7
Period Options guaranteed guaranteed guaranteed year year year year
(available in periods periods periods guaranteed guaranteed guaranteed guaranteed
the fixed available. available. available. periods periods periods periods
account) available. available. available. available.
---------------------------------------------------------------------------------------------------------------------------------
Minimum 4% 4% 4% 3% 3% 3% 3%
effective annual
interest rate
applicable to
the fixed
account
---------------------------------------------------------------------------------------------------------------------------------
Asset N/A N/A N/A Yes Yes Yes Yes
Rebalancing
---------------------------------------------------------------------------------------------------------------------------------
Death Proceeds Greater of 1) Greater of (a) Greatest of Greatest of Greatest of Greatest of Greatest of
the policy policy value (a) policy (a) annuity (a) policy (a) policy (a) policy
value on the and (b) 5% value and (b) purchase value, (b) value, (b) value, (b)
date we Annually guaranteed value, (b) cash value, cash value, cash value,
receive due Compounding minimum death cash value, and (c) and (c) and (c)
proof of Death Benefit benefit and (c) guaranteed guaranteed guaranteed
death, or 2) guaranteed minimum death minimum death minimum death
the total minimum death benefit. benefit. benefit.
premiums paid benefit.
for this
policy, less
any partial
withdrawals
and any
surrender
charges made
before death,
accumulated at
4% interest
per annum to
the date we
receive due
proof of death
</TABLE>

54
<PAGE>

<TABLE>
<CAPTION>
AV201 101 65 AV201 101 65 AV254 101 87 AV320 101 99 AV376 101 106 AV432 101 114
AV201 101 65 189, AE830 292, 189, AE847 394, 196, AE909 496, 197 and AE945 1197 and AE 945 199 and AV494
Product Feature 189 and AE847 394 and AE871 295 and AE890 196 197 197 101 124 100
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Distribution N/A N/A N/A N/A Applicable Applicable N/A
Financing Charge
---------------------------------------------------------------------------------------------------------------------------------
Is Mortality & No No No No No Yes (1.10%, Yes (1.25%,
Expense Risk Fee plus plus
different after administrative administrative
the annuity charge, charge,
commencement regardless of regardless of
date? death benefit death benefit
chosen prior chosen prior
to the annuity to the annuity
commencement commencement
date) date).
---------------------------------------------------------------------------------------------------------------------------------
Product Feature AV201 101 65 AV201 101 65 AV201 101 65 AV254 101 87 AV320 101 99 AV376 101 106 AV432 101 114
189 189, AE830 189, AE847 196, AE909 197 and AE945 1197 and AE945 199 and AV494
292, and AE847 394, and AE871 496, and AE890 197 197 101 124 100
394 295 196
---------------------------------------------------------------------------------------------------------------------------------
Dollar Cost N/A N/A N/A Yes Yes Yes Yes
Averaging Fixed
Account Option
---------------------------------------------------------------------------------------------------------------------------------
Service Charge $35 assessed $35 assessed Assessed only Assessed only Assessed Assessed Assessed
on each policy on each policy on a policy on a policy either on a either on a either on a
anniversary. anniversary. anniversary; anniversary; policy policy policy
Not deducted Not deducted Waived if sum Waived if sum anniversary or anniversary or anniversary or
from the fixed from the fixed of premium of premium on surrender; on surrender; on surrender;
account. account. payments less payments less Waived if sum Waived if sum Waived if sum
partial partial of premium of premium of premium
withdrawals is withdrawals is payments less payments less payments less
at least at least partial partial partial
$50,000 on the $50,000 on the withdrawals or withdrawals or withdrawals or
policy policy the policy the policy the policy
anniversary. anniversary. value is at value is at value is at
Not deducted Not deducted least $50,000 least $50,000 least $50,000
from the fixed from the fixed on the policy on the policy on The policy
account. account. anniversary or anniversary or anniversary or
at the time of at the time of at the time of
surrender. The surrender. The surrender. The
service charge service charge service charge
is deducted is deducted is deducted
pro-rata from pro-rata from pro-rata from
the investment the investment the investment
options. options. options.
---------------------------------------------------------------------------------------------------------------------------------
Nursing Care and N/A Yes Yes Yes Yes Yes Yes
Terminal
Condition
Withdrawal
Option
---------------------------------------------------------------------------------------------------------------------------------
Unemployment N/A N/A N/A N/A N/A N/A Yes
Waiver
</TABLE>

55
<PAGE>

THE ENDEAVOR ML
VARIABLE ANNUITY

Issued by

PFL LIFE INSURANCE COMPANY

Supplement Dated
October 9, 2000
to the
Prospectus dated
October 9, 2000

For New Jersey policies, the optional family income protector is as described
in this supplement and not as described in the prospectus.

Family Income Protector

Minimum Annuitization Value. If the family income protector is added when you
purchase the policy or in the first policy year, the minimum annuitization
value on the rider date (i.e., the date the rider is added to the policy) is
the total premium payments. If the family income protector is added after the
first policy year, the minimum annuitization value on the rider date is the
policy value.

After the rider date, the minimum annuitization value is:

S-1
<PAGE>

living. In the event of the death of both the annuitant and joint annuitant
prior to the end of the chosen period certain, the remaining period certain
payments will be continued to the beneficiary.

Please note that if you annuitize using the family income protector before the
10th rider anniversary, the payments will be calculated with an annuity factor
age adjustment. See "Annuity Factor Age Adjustment" below.

Minimum Annuitization Value Adjustment. If you annuitize under the family
income protector on any date other than a rider anniversary, the minimum
annuitization value will be adjusted downward if your policy value has
decreased since the last rider anniversary (or the rider date for
annuitizations within the first rider year). The adjusted minimum annuitization
value will equal:
. the policy value on the date you annuitize; plus
. the minimum annuitization value on the most recent rider anniversary (or the
rider date for annuitizations within the first rider year); minus
. the policy value on the most recent rider anniversary (or the rider date for
annuitizations within the first rider year).

The minimum annuitization value will not be adjusted if:
. you annuitize on a rider anniversary; or
. your policy value has increased since the last rider anniversary (or the
rider date for annuitizations within the first rider year).

Annuity Factor Age Adjustment. If you annuitize using the family income
protector before the 10th rider anniversary, the first payment will be
calculated with an annuity factor age adjustment which subtracts up to 10 years
from your age resulting in all payments being lower than if an annuity factor
age adjustment was not used. See the SAI for information concerning the
calculation of the initial payment. The age adjustment is as follows:

<TABLE>
<CAPTION>
Age Adjustment:
Number of Years
Number of Years Since Subtracted from
the Rider Date Your Age
----------------------------------------
<S> <C>
0-1 10
----------------------------------------
1-2 9
----------------------------------------
2-3 8
----------------------------------------
3-4 7
----------------------------------------
4-5 6
----------------------------------------
5-6 5
----------------------------------------
6-7 4
----------------------------------------
7-8 3
----------------------------------------
8-9 2
----------------------------------------
9-10 1
----------------------------------------
greater than 10 0
</TABLE>

Minimum Annuitization Value Upgrade. You can upgrade your minimum annuitization
value to

S-2
<PAGE>

the policy value at any time before your 95th birthday.

If you upgrade:
. the current rider will terminate and a new one will be issued with its own
specified guaranteed benefits and fees; and
. the new rider's specified benefits and fees may not be as advantageous as
before.

It generally will not be to your advantage to upgrade unless your policy value
exceeds your minimum annuitization value at that time.

Conditions of Exercise of the Family Income Protector. You can annuitize using
the family income protector at any time before your 95th birthday. For your
convenience, we will put the last date to annuitize using the family income
protector on page one of the rider.

Note Carefully:
. If you annuitize at any time other than a rider anniversary, there may be a
negative adjustment to your minimum annuitization value. See "Minimum
Annuitization Value Adjustment."
. If you annuitize before the 10th rider anniversary there will be an annuity
factor age adjustment. See "Annuity Factor Age Adjustment."
. If you take a withdrawal during the rider year that you annuitize, your
minimum annuitization value will be reduced to reflect the withdrawal and
will likely be subject to a negative minimum annuitization value adjustment.

Family Income Protector Rider Fee. A rider fee, currently 0.35% of the minimum
annuitization value on the rider anniversary, is charged annually prior to
annuitization. We will also charge this fee upon termination. The rider fee is
deducted from each variable investment option in proportion to the amount of
policy value in each subaccount.

Termination. The family income protector will terminate upon the earliest of
the following:
. the date we receive written notice from you requesting termination of the
family income protector;
. annuitization (you will still get guaranteed minimum stabilized payments if
you annuitize using the minimum annuitization value under the family income
protector);
. upgrade of the minimum annuitization value (although a new rider will be
issued);
. termination of your policy; or
. 30 days after the last date to elect the benefit as shown on page 1 of the
rider.

S-3
<PAGE>

STATEMENT OF ADDITIONAL INFORMATION

THE ENDEAVOR ML VARIABLE ANNUITY

Issued through

PFL ENDEAVOR VA SEPARATE ACCOUNT

Offered by

PFL LIFE INSURANCE COMPANY

This Statement of Additional Information expands upon subjects discussed in the
current prospectus for the Endeavor ML Variable Annuity offered by PFL Life
Insurance Company. You may obtain a copy of the prospectus dated October 9,
2000 by calling 1-800-525-6205, or by writing to the Administrative and Service
Office, Financial Markets Division--Variable Annuity Dept., 4333 Edgewood Road,
N.E., Cedar Rapids, Iowa 52499-0001. Terms used in the current prospectus for
the policy are incorporated in this Statement of Additional Information.

This Statement of Additional Information (SAI) is not a prospectus and should
be read only in conjunction with the prospectuses for the policy and the
underlying fund portfolios.

Dated: October 9, 2000

<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
GLOSSARY OF TERMS.......................................................... 3
THE POLICY--GENERAL PROVISIONS............................................. 5
Owner.................................................................... 5
Entire Policy............................................................ 5
Misstatement of Age or Sex............................................... 6
Addition, Deletion or Substitution of Investments........................ 6
Excess Interest Adjustment............................................... 6
Reallocation of Annuity Units After the Annuity Commencement Date........ 9
Annuity Payment Options.................................................. 9
Death Benefit............................................................ 11
Death of Owner........................................................... 13
Assignment............................................................... 13
Evidence of Survival..................................................... 13
Non-Participating........................................................ 13
Amendments............................................................... 14
Employee and Agent Purchases............................................. 14
CERTAIN FEDERAL INCOME TAX CONSEQUENCES.................................... 14
Tax Status of the Policy................................................. 14
Taxation of PFL.......................................................... 18
INVESTMENT EXPERIENCE...................................................... 18
Accumulation Units....................................................... 18
Annuity Unit Value and Annuity Payment Rates............................. 20
FAMILY INCOME PROTECTOR--ADDITIONAL INFORMATION............................ 22
HISTORICAL PERFORMANCE DATA................................................ 24
Money Market Yields...................................................... 24
Other Subaccount Yields.................................................. 25
Total Returns............................................................ 26
Other Performance Data................................................... 27
Adjusted Historical Performance Data..................................... 27
Past Performance of the Target Account................................... 27
PUBLISHED RATINGS.......................................................... 28
STATE REGULATION OF PFL.................................................... 28
ADMINISTRATION............................................................. 28
RECORDS AND REPORTS........................................................ 28
DISTRIBUTION OF THE POLICIES............................................... 29
VOTING RIGHTS.............................................................. 29
OTHER PRODUCTS............................................................. 29
CUSTODY OF ASSETS.......................................................... 30
LEGAL MATTERS.............................................................. 30
INDEPENDENT AUDITORS....................................................... 30
OTHER INFORMATION.......................................................... 30
FINANCIAL STATEMENTS....................................................... 30
</TABLE>

-2-
<PAGE>

GLOSSARY OF TERMS

Accumulation Unit--An accounting unit of measure used in calculating the policy
value in the separate account before the annuity commencement date.

Adjusted Policy Value--An amount equal to the policy value increased or
decreased by any excess interest adjustments.

Administrative and Service Office--Financial Markets Division - Variable
Annuity Dept., PFL Life Insurance Company, 4333 Edgewood Road, N.E., Cedar
Rapids, Iowa 52499-0001.

Annuitant--The person during whose life any annuity payments involving life
contingencies will continue.

Annuity Payment Option--A method of receiving a stream of annuity payments
selected by the owner.

Annuity Unit--An accounting unit of measure used in the calculation of the
amount of the second and each subsequent variable annuity payment.

Beneficiary--The person who has the right to the death benefit set forth in the
policy.

Business Day--A day when the New York Stock Exchange is open for business.

Cash Value--The adjusted policy value less any applicable surrender charge.

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

Fixed Account--One or more investment choices under the policy that are part of
PFL's general assets and which are not in the separate accounts.

Guaranteed Period Options--The various guaranteed interest rate periods of the
fixed account, which PFL may offer, into which premiums may be paid or amounts
may be transferred.

Nonqualified Policy--A policy other than a qualified policy.

-3-
<PAGE>

Owner--Depending upon the state of issue, owner means either:
. the individual or entity that owns a certificate under a group contract; or
. the individual or entity that owns an individual policy.

Participant--A person who makes premium payments or for whom premium payments
are made under the policy.

Policy--Depending upon the state of issue, policy means either:
. the individual certificate under a group contract; or
. the individual policy.

. accumulated gains or losses in the separate account; minus

. losses in the separate account; minus
. service charges, premium taxes, rider fees, and transfer fees, if any.

Policy Year--A policy year begins on the policy date in which the policy
becomes effective and on each policy anniversary.

Premium Payment--An amount paid to PFL by the owner or on the owner's behalf as
consideration for the benefits provided by the policy.

Qualified Policy--A policy issued in connection with retirement plans that
qualify for special federal income tax treatment under the Code.

Subaccount--A subdivision within the separate account, the assets of which are
invested in a specified portfolio of the underlying funds.

Successor Owner--A person appointed by the owner to succeed to ownership of the
policy in the event of the death of the owner who is not the annuitant before
the annuity commencement date.

-4-
<PAGE>

In order to supplement the description in the prospectus, the following
provides additional information about PFL and the policy, which may be of
interest to a prospective purchaser.

THE POLICY--GENERAL PROVISIONS

Owner

Unless PFL has been notified of a community or marital property interest in
the policy, it will rely on its good faith belief that no such interest exists
and will assume no responsibility for inquiry.

Note carefully. If the owner does not name a contingent owner, the owner's
estate will become the new owner. If no probate estate is opened because the
owner has precluded the opening of a probate estate by means of a trust or
other instrument, unless PFL has received written notice of the trust as a
successor owner signed prior to the owner's death, that trust may not exercise
ownership rights to the policy. It may be necessary to open a probate estate
in order to exercise ownership rights to the policy if no contingent owner is
named in a written notice received by PFL.

The owner may change the ownership of the policy in a written notice. When
this change takes effect, all rights of ownership in the policy will pass to
the new owner. A change of ownership may have tax consequences.

When there is a change of owner or successor owner, the change will not be
effective until it is recorded in our records, Once recorded, it will take
effect as of the date the owner signs the written notice, subject to any
payment PFL has made or action PFL has taken before recording the change.
Changing the owner or naming a new successor owner cancels any prior choice of
successor owner, but does not change the designation of the beneficiary or the
annuitant.

Entire Policy

-5-
<PAGE>

Misstatement of Age or Sex

Addition, Deletion, or Substitution of Investments

PFL cannot and does not guarantee that any of the subaccounts will always be
available for premium payments, allocations, or transfers. PFL retains the
right, subject to any applicable law, to make certain changes in the separate
account and its investments. PFL reserves the right to eliminate the shares of
any portfolio held by a subaccount and to substitute shares of another
portfolio of the underlying funds, or of another registered open-end management
investment company for the shares of any portfolio, if the shares of the
portfolio are no longer available for investment or if, in PFL's judgment,
investment in any portfolio would be inappropriate in view of the purposes of
the separate account. To the extent required by the 1940 Act, substitutions of
shares attributable to your interest in a subaccount will not be made without
prior notice to you and the prior approval of the Securities and Exchange
Commission ("SEC"). Nothing contained herein shall prevent the separate account
from purchasing other securities for other series or classes of variable
annuity policies, or from effecting an exchange between series or classes of
variable annuity policies on the basis of your requests.

Excess Interest Adjustment

-6-
<PAGE>

The formula that will be used to determine the excess interest adjustment is:

S*(G-C)* (M/12)

S = Gross amount being withdrawn that is subject to the excess interest
adjustment
G = Guaranteed Interest Rate in effect for the policy
C = Current Guaranteed Interest Rate then being offered on new premiums for
the next longer option period than "M". If this policy form or such an
option period is no longer offered, "C" will be the U.S. Treasury rate for
the next longer maturity (in whole years) than "M" on the 25th day of the
previous calendar month, plus up to 2%.
M = Number of months remaining in the current option period, rounded up to the
next higher whole number of months.
* = multiplication
/\= exponentiation

Example 1 (Surrender, rates increase by 3%):

<TABLE>
<S> <C>
Single premium: $50,000.00
-----------------------------------------------------------------------------------------
Guarantee period: 5 Years
-----------------------------------------------------------------------------------------
Guarantee rate: 5.50% per annum
-----------------------------------------------------------------------------------------
Surrender: middle of contract year 2
-----------------------------------------------------------------------------------------
Policy value at middle of contract year 2 = 50,000.00* (1.055) /\1.5 = 54,181.21
-----------------------------------------------------------------------------------------
Penalty free amount at middle of
contract year 2 = 50,000.00* .10 = 5,000.00
-----------------------------------------------------------------------------------------
(assume any gains in the policy is less
than 10% of premium)
-----------------------------------------------------------------------------------------
Amount subject to excess interest adjustment = 54,181.21 - 5,000.00 = 49,181.21
-----------------------------------------------------------------------------------------
Excess interest adjustment floor = 50,000.00* (1.03) /\1.5 = 52,266.79
-----------------------------------------------------------------------------------------
Excess interest adjustment
-----------------------------------------------------------------------------------------
G = .055
-----------------------------------------------------------------------------------------
C = .085
-----------------------------------------------------------------------------------------
M = 18
-----------------------------------------------------------------------------------------
Excess interest adjustment = S* (G - C)* (M/12)
-----------------------------------------------------------------------------------------
= 49,181.21* (.055 - .085)* (18/12)
-----------------------------------------------------------------------------------------
= - 2,213.15, but excess interest
adjustment cannot cause the adjusted
policy value to fall below the excess
interest adjustment floor, so the
adjustment is limited to 52,266.79 -
54,181.21 = - 1,914.42
-----------------------------------------------------------------------------------------
Adjusted policy value = policy value + excess interest
adjustment
= 54,181.21 + ( - 2,213.15) = 51,968.06
-----------------------------------------------------------------------------------------
Surrender charges = (50,000.00 - 5,000.00)* .07 = 3,150.00
-----------------------------------------------------------------------------------------
Net surrender value at middle of
contract year 2 = 54,181.21 - 3,150.00 = 51,031.21

</TABLE>

-7-
<PAGE>

Example 2 (Surrender, rates decrease by 1%):

<TABLE>
<S> <C>
Single premium: $50,000.00
-----------------------------------------------------------------------------------------
Guarantee period: 5 Years
-----------------------------------------------------------------------------------------
Guarantee rate: 5.50% per annum
-----------------------------------------------------------------------------------------
Surrender: middle of contract year 2
-----------------------------------------------------------------------------------------
Policy value at middle of contract year 2 = 50,000.00* (1.055)/\ 1.2 = 54,181.21
-----------------------------------------------------------------------------------------
Penalty free amount at middle of
contract year 2 = 50,000.00* .10 = 5,000.00
-----------------------------------------------------------------------------------------
(assume any gain in the policy is less than
10% of premium)
-----------------------------------------------------------------------------------------
Amount subject to excess interest adjustment = 54,181.21-5,000.00 = 49,181.21
-----------------------------------------------------------------------------------------
EIA Floor = 50,000.00* (1.03)/\ 1.5 = 52,266.79
-----------------------------------------------------------------------------------------
Excess interest adjustment
-----------------------------------------------------------------------------------------
G = .055
-----------------------------------------------------------------------------------------
C = .045
-----------------------------------------------------------------------------------------
M = 18
-----------------------------------------------------------------------------------------
Excess interest adjustment = S* (G-C)* (M/12)
-----------------------------------------------------------------------------------------
= 49,181.21* (.055-.045)* (18/12) = 737.72
-----------------------------------------------------------------------------------------
Adjusted policy value = 54,181.21+737.72 = 54,918.93
-----------------------------------------------------------------------------------------
Surrender charges = (50,000.00-5,000.00)* .07 = 3,150.00
-----------------------------------------------------------------------------------------
Net surrender value at middle of
contract year 2 = 54,918.93-3,150.00 = 51,768.93

</TABLE>
On a partial withdrawal, PFL will pay the owner the full amount of withdrawal
requested (as long as the policy value is sufficient). Amounts withdrawn will
reduce the policy value by an amount equal to:
R - E+SC
R = the requested partial withdrawal;
E = the excess interest adjustment.
SC = the surrender charges on (EPW - E); where
EPW = the excess partial withdrawal amount.

Example 3 (Partial Withdrawal, rates increase by 1%):

<TABLE>
<S> <C>
Single premium: $50,000.00
--------------------------------------------------------------------------------------
Guarantee period: 5 Years
--------------------------------------------------------------------------------------
Guarantee rate: 5.50% per annum
--------------------------------------------------------------------------------------
Partial withdrawal: $20,000.00; middle of contract year 2
--------------------------------------------------------------------------------------
Policy value at middle of contract year 2 = 50,000.00* (1.055)/\ 1.2 = 54,181.21
--------------------------------------------------------------------------------------
Penalty Free Amount at middle of
contract year 2 = 50,000.00* .10 = 5,000.00
--------------------------------------------------------------------------------------
(assume any gain in the policy is less than
10% of premium)
--------------------------------------------------------------------------------------
Excess interest adjustment/surrender charge
--------------------------------------------------------------------------------------
S = 20,000-5,000.00 = 15,000.00
--------------------------------------------------------------------------------------
G = .055
--------------------------------------------------------------------------------------
C = .065
--------------------------------------------------------------------------------------
M = 18
--------------------------------------------------------------------------------------
E = 15,000.00* (.055-.065)* (18/12) = - 225.00
--------------------------------------------------------------------------------------
EPW = 20,000.00-5,000.00 = 15,000.00
--------------------------------------------------------------------------------------
SC = .07* (15,000.00-(-225.00) = 1,065.75
--------------------------------------------------------------------------------------
Remaining policy value at middle of = 54,181.21-(R-E+surrender charge)
contract year 2
--------------------------------------------------------------------------------------
= 54,181.21-(20,000-
(-225.00)+1,065.75)
= 32,890.46
</TABLE>

-8-
<PAGE>

Example 4 (Partial Withdrawal, rates decrease by 1%):

<TABLE>
<S> <C>
Single premium: $50,000.00
---------------------------------------------------------------------------------------------
Guarantee period: 5 Years
---------------------------------------------------------------------------------------------
Guarantee rate: 5.50% per annum
---------------------------------------------------------------------------------------------
Partial withdrawal: $20,000.00; middle of policy year 2
---------------------------------------------------------------------------------------------
Policy value at middle of contract year 2 = 50,000.00* (1.055)/\ 1.5 = 54,181.21
---------------------------------------------------------------------------------------------
Penalty free amount at middle of
contract year 2 = 50,000.00* .10 = 5,000.00
---------------------------------------------------------------------------------------------
(assume any gain in the policy is less than
10% of premium)
---------------------------------------------------------------------------------------------
Excess interest adjustment/surrender charge
---------------------------------------------------------------------------------------------
S = 20,000.00 - 5,000.00 = 15,000.00
---------------------------------------------------------------------------------------------
G = .055
---------------------------------------------------------------------------------------------
C = .045
---------------------------------------------------------------------------------------------
M = 18
---------------------------------------------------------------------------------------------
E = 15,000.00* (.055 - .045)*
(18/12) = 225.00
---------------------------------------------------------------------------------------------
EPW = 20,000.00 - 5,000.00 = 15,000.00
---------------------------------------------------------------------------------------------
SC = .07* (15,000.00 - 225.00) = 1,034.25
---------------------------------------------------------------------------------------------
Remaining policy value at middle of
contract year 2 = 54,181.21 - (R-E + surrender charge)
---------------------------------------------------------------------------------------------
= 54,181.21 - (20,000.00 - 225.00 + 1,034.25)
= 33,371.96
</TABLE>

Reallocation of Annuity Units After the Annuity Commencement Date

After the annuity commencement date, no transfers may be made from the fixed
account to the separate account.

Annuity Payment Options

-9-
<PAGE>

Option 3, life income with variable payments for 10 years certain using the
existing policy value of the separate account, or (iii) in a combination of (i)
and (ii).

Variable Payment Options. The dollar amount of the first variable annuity
payment will be determined in accordance with the annuity payment rates set
forth in the applicable table contained in the policy. The tables are based on
a 5% effective annual Assumed Investment Return and the "1983 Table a" (male,
female, and unisex if required by law) mortality table with projection using
projection Scale G factors, assuming a maturing date in the year 2000. ("The
1983 Table a" mortality rates are adjusted based on improvements in mortality
since 1983 to more appropriately reflect increased longevity. This is
accomplished using a set of improvement factors referred to as projection scale
G.) The dollar amount of additional variable annuity payments will vary based
on the investment performance of the subaccount(s) of the separate account
selected by the annuitant or beneficiary.

Determination of the First Variable Payment. The amount of the first variable
payment depends upon the sex (if consideration of sex is allowed under state
law) and adjusted age of the annuitant. The adjusted age is the annuitant's
actual age nearest birthday, on the annuity commencement date, adjusted as
follows:

<TABLE>
<CAPTION>
Annuity
Commencement
Date Adjusted Age
------------ ------------
<S> <C>
Before 2001 Actual Age
2001-2010 Actual Age minus 1
2011-2020 Actual Age minus 2
2021-2030 Actual Age minus 3
2031-2040 Actual Age minus 4
After 2040 As determined by PFL
</TABLE>

This adjustment assumes an increase in life expectancy, and therefore it
results in lower payments than without such an adjustment.

Determination of Additional Variable Payments. All variable annuity payments
other than the first are calculated using annuity units that are credited to
the policy. The number of annuity units to be credited in respect of a
particular subaccount is determined by dividing that portion of the first
variable annuity payment attributable to that subaccount by the annuity unit
value of that subaccount on the annuity commencement date. The number of
annuity units of each particular subaccount credited to the policy then remains
fixed, assuming no transfers to or from that subaccount occur. The dollar value
of variable annuity units in the chosen subaccount will increase or decrease
reflecting the investment experience of the chosen subaccount. The dollar
amount of each variable annuity payment after the first may increase, decrease
or remain constant, and is equal to the sum of the amounts determined by
multiplying the number of annuity units of each particular subaccount credited
to the policy by the annuity unit value for the particular subaccount on the
date the payment is made.

-10-

<PAGE>

Death Benefit

Adjusted Partial Withdrawal. The amount of your Guaranteed Minimum Death
Benefit is reduced due to a partial withdrawal called the adjusted partial
withdrawal. The reduction amount depends on the relationship between your
Guaranteed Minimum Death Benefit and policy value. The adjusted partial
withdrawal is (1) multiplied by (2), where:

(1) is the gross partial withdrawals, where gross partial withdrawal =
requested withdrawal minus excess interest adjustment plus surrender
charges on (excess partial withdrawal--excess interest adjustment); and

(2) is the adjustment factor = current death benefit prior to the
withdrawal divided by the current policy value prior to the withdrawal.

The following examples describe the effect of a withdrawal on the guaranteed
minimum death benefit and policy value.

Example 1
(Assumed Facts for Example)
<TABLE>
------------------------------------------------------------------------------
<C> <S>
$75,000 current guaranteed minimum death benefit before withdrawal
------------------------------------------------------------------------------
$50,000 current policy value before withdrawal
------------------------------------------------------------------------------
$75,000 current death benefit (larger of policy value and guaranteed minimum
death benefit)
------------------------------------------------------------------------------
6% current surrender charge percentage
------------------------------------------------------------------------------
$15,000 requested withdrawal
------------------------------------------------------------------------------
$ 5,000 surrender charge-free amount (assumes penalty free withdrawal is
available)
------------------------------------------------------------------------------
$10,000 excess partial withdrawal- (amount subject to surrender charge)
------------------------------------------------------------------------------
$ 100 excess interest adjustment (assumes interest rates have decreased
since initial guarantee)
------------------------------------------------------------------------------
$ 594 surrender charge on (excess partial withdrawal less excess interest
adjustment) = 0.06 * (10,000-100)
------------------------------------------------------------------------------
$10,494 reduction in policy value due to excess partial withdrawal = 10,000-
100 + 594
------------------------------------------------------------------------------
$23,241 adjusted partial withdrawal = $5,000 + 10,494* (75,000/50,000)
------------------------------------------------------------------------------
$51,759 New guaranteed minimum death benefit (after withdrawal) = 75,000-
23,241
------------------------------------------------------------------------------
$34,506 New policy value (after withdrawal) = 50,000-15,494
</TABLE>

<TABLE>
<CAPTION>
Summary:
--------
<S> <C>
Reduction in guaranteed minimum death benefit = $23,241
Reduction in policy value = $15,494
</TABLE>

Note, guaranteed minimum death benefit is reduced more than the policy value
since the guaranteed minimum death benefit was greater than the policy value
just prior to the withdrawal.

-11-
<PAGE>

Example 2
(Assumed Facts for Example)
<TABLE>
----------------------------------------------------------------------------------------------
<S> <C>
$50,000 current guaranteed minimum death benefit before withdrawal
----------------------------------------------------------------------------------------------
$75,000 current policy value before withdrawal
----------------------------------------------------------------------------------------------
$75,000 current death benefit (larger of policy value and guaranteed minimum death benefit)
----------------------------------------------------------------------------------------------
6% current surrender charge percentage
----------------------------------------------------------------------------------------------
$15,000 requested withdrawal
----------------------------------------------------------------------------------------------
$ 7,500 surrender charge-free amount (assumes penalty free withdrawal is available)
----------------------------------------------------------------------------------------------
$ 7,500 excess partial withdrawal- (amount subject to surrender charge)
----------------------------------------------------------------------------------------------
$-100 excess interest adjustment
(assumes interest rates have increased since initial guarantee)
----------------------------------------------------------------------------------------------
$ 456 surrender charge on (excess partial withdrawal less excess interest adjustment)
= 0.06*[(7500-(-100)]
----------------------------------------------------------------------------------------------
$ 8,056 reduction in policy value due to excess partial withdrawal = 7,500-(-100) + 456 =
7,500 + 100 + 456
----------------------------------------------------------------------------------------------
$15,556 adjusted partial withdrawal = (7,500 + 8,056)* (75,000/75,000)
----------------------------------------------------------------------------------------------
$34,444 New guaranteed minimum death benefit (after withdrawal) = 50,000-15,556
----------------------------------------------------------------------------------------------
$59,444 New policy value (after withdrawal) = 75,000-15,556
</TABLE>

<TABLE>
<CAPTION>
Summary:
--------
<S> <C>
Reduction in guaranteed minimum death benefit = $15,556
Reduction in policy value = $15,556
</TABLE>

Note, the guaranteed minimum death benefit and policy value are reduced by the
same amount since the policy value was higher than the guaranteed minimum death
benefit just prior to the withdrawal.

If the annuitant was the owner, and the beneficiary was not the annuitant's
spouse, the death benefit must (1) be distributed within five years of the date
of the deceased owner's death, or (2) payments under an annuity payment option
must begin no later than one year after the deceased owner's death and must be
made for the beneficiary's lifetime or for a period certain (so long as any
period certain does not exceed the beneficiary's life expectancy). Death
Proceeds, which are not paid to or for the benefit of a natural person, must be
distributed within five years of the date of the deceased owner's death. If the
sole beneficiary is the deceased owner's surviving spouse, such spouse may
elect to continue the policy as the new annuitant and owner instead of
receiving the death benefit.

-12-
<PAGE>

Beneficiary. The beneficiary designation in the enrollment form will remain in
effect until changed. The owner may change the designated beneficiary by
sending written notice to PFL. The beneficiary's consent to such change is not
required unless the beneficiary was irrevocably designated or law requires
consent. (If an irrevocable beneficiary dies, the owner may then designate a
new beneficiary.) The change will take effect as of the date the owner signs
the written notice, whether or not the owner is living when the notice is
received by PFL. PFL will not be liable for any payment made before the written
notice is received. If more than one beneficiary is designated, and the owner
fails to specify their interests, they will share equally.

Death of Owner

Assignment

Ownership under qualified policies is restricted to comply with the Code.

Evidence of Survival

PFL reserves the right to require satisfactory evidence that a person is alive
if a payment is based on that person being alive. No payment will be made until
PFL receives such evidence.

Non-Participating

The policy will not share in PFL's surplus earnings; no dividends will be paid.

-13-
<PAGE>

Amendments

No change in the policy is valid unless made in writing by PFL and approved by
one of PFL's officers. No registered representative has authority to change or
waive any provision of the policy.

Employee and Agent Purchases

The policy may be acquired by an employee or registered representative of any
broker/dealer authorized to sell the policy or their spouse or minor children,
or by an officer, director, trustee or bona-fide full-time employee of PFL or
its affiliated companies or their spouse or minor children. In such a case, PFL
may credit an amount equal to a percentage of each premium payment to the
policy due to lower acquisition costs PFL experiences on those purchases. The
credit will be reported to the Internal Revenue Service as taxable income to
the employee or registered representative. PFL may offer certain employer
sponsored savings plans, in its discretion, reduced fees and charges including,
but not limited to, the annual service charge, the surrender charges, the
mortality and expense risk fee and the administrative charge for certain sales
under circumstances which may result in savings of certain costs and expenses.
In addition, there may be other circumstances of which PFL is not presently
aware which could result in reduced sales or distribution expenses. Credits to
the policy or reductions in these fees and charges will not be unfairly
discriminatory against any owner.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

Tax Status of the Policy

The following discussion is based on the assumption that the policy qualifies
as an annuity contract for federal income tax purposes.

Distribution Requirements. The Code requires that nonqualified policies contain
specific provisions for distribution of policy proceeds upon the death of any
owner. In order to be treated as an annuity contract for federal income tax
purposes, the Code requires that such policies provide that if any owner dies
on or after the annuity commencement date and before the entire interest in the
policy has been distributed, the remaining portion must be distributed at least
as rapidly as under the method in effect on such owner's death. If any owner
dies before the annuity commencement date, the entire interest in the policy
must generally be distributed within 5 years after such owner's date of death
or be used to purchase an immediate annuity under which payments will begin
within one year of such owner's death and will be made for the life of the
beneficiary or for a period not extending beyond the life expectancy of the
"designated beneficiary" as defined in Section 72(s) of the Code. However, if
upon such owner's death prior to the annuity commencement date, such owner's
surviving spouse

-14-
<PAGE>

becomes the sole new owner under the policy, then the policy may be continued
with the surviving spouse as the new owner. Under the policy, the beneficiary
is the designated beneficiary of an owner/annuitant and the successor owner is
the designated beneficiary of an owner who is not the annuitant. If any owner
is not a natural person, then for purposes of these distribution requirements,
the primary annuitant shall be treated as an owner and any death or change of
such primary annuitant shall be treated as the death of an owner. The
nonqualified policies contain provisions intended to comply with these
requirements of the Code. No regulations interpreting these requirements of the
Code have yet been issued and thus no assurance can be given that the
provisions contained in the policies satisfy all such Code requirements. The
provisions contained in the policies will be reviewed and modified if necessary
to assure that they comply with the Code requirements when clarified by
regulation or otherwise.

Diversification Requirements. Section 817(h) of the Code provides that in order
for a variable contract which is based on a segregated asset account to qualify
as an annuity contract under the Code, the investments made by such account
must be "adequately diversified" in accordance with Treasury regulations. The
Treasury regulations issued under Section 817(h) (Treas. Reg. (S)1.817-5) apply
a diversification requirement to each of the subaccounts. The separate account,
through its underlying funds and their portfolios, intends to comply with the
diversification requirements of the Treasury. PFL has entered into agreements
with each underlying fund company which requires the portfolios to be operated
in compliance with the Treasury regulations.

Owner Control. In certain circumstances, owners of variable annuity contracts
may be considered the owners, for federal income tax purposes, of the assets of
the separate account used to support their contracts. In those circumstances,
income and gains from the separate account assets would be includable in the
variable annuity contract owner's gross income. Several years ago, the IRS
stated in published rulings that a variable annuity contract owner will be
considered the owner of separate account assets if the contract owner possesses
incidents of ownership in those assets, such as the ability to exercise
investment control over the assets. 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 (i.e. you), 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 way of regulations or
rulings on the "extent to which policyholders may direct their investments to
particular subaccounts without being treated as owners of the underlying
assets."

Withholding. The portion of any distribution under a policy that is includable
in gross income will be subject to federal income tax withholding unless the
recipient of such distribution elects not to have federal income tax withheld.
Election forms will be provided at the time distributions are requested or
made. The withholding rate varies according to the type of distribution and the
owner's tax status. For qualified policies, "eligible rollover distributions"
from Section 401(a) plans, Section 403(a) annuities, and Section 403(b) tax-
sheltered annuities are subject to a mandatory federal income tax withholding

-15-
<PAGE>

of 20%. An eligible rollover distribution is the taxable portion of any
distribution from such a plan, except certain distributions such as
distributions required by the Code or distributions in a specified annuity
form. The 20% withholding does not apply, however, if the owner chooses a
"direct rollover" from the plan to another tax-qualified plan or IRA. Different
withholding requirements may apply in the case of non-United States persons.

Qualified Policies. The qualified policy is designed for use with several types
of tax-qualified retirement plans. The tax rules applicable to participants and
beneficiaries in tax-qualified retirement plans vary according to the type of
plan and the terms and conditions of the plan. 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; and in other specified circumstances. Some retirement plans
are subject to distribution and other requirements that are not incorporated
into the policies or our policy administration procedures. Owners, participants
and beneficiaries are responsible for determining that contributions,
distributions and other transactions with respect to the policies comply with
applicable law.

Individual Retirement Annuities. In order to qualify as a traditional
individual retirement annuity under Section 408(b) of the Code, a policy must
contain certain provisions: (i) the owner must be the annuitant; (ii) the
policy generally is not transferable by the owner, e.g., the owner may not
designate a new owner, designate a contingent owner or assign the policy as
collateral security; (iii) the total premium payments for any calendar year may
not exceed $2,000, except in the case of a rollover amount or contribution
under Section 402(c), 403(a)(4), 403(b)(8) or 408(d)(3) of the Code; (iv)
annuity payments or withdrawals must begin no later than April 1 of the
calendar year following the calendar year in which the annuitant attains age 70
1/2; (v) an annuity payment option with a period certain that will guarantee
annuity payments beyond the life expectancy of the annuitant and the
beneficiary may not be selected; and (vi) certain payments of death benefits
must be made in the event the annuitant dies prior to the distribution of the
policy value. Policies intended to qualify as traditional individual retirement
annuities under Section 408(b) of the Code contain such provisions. Amounts in
the IRA (other than nondeductible contributions) are taxed when distributed
from the IRA. Distributions prior to age 59 1/2 (unless certain exceptions
apply) are subject to a 10% penalty tax.

-16-
<PAGE>

enhanced death benefit provision, such as the provision in the policy, comports
with IRA qualification requirements.

Roth Individual Retirement Annuities (Roth IRA). The Roth IRA, under Section
408A of the Code, contains many of the same provisions as a traditional IRA.
However, there are some differences. First, the contributions are not
deductible and must be made in cash or as a rollover or transfer from another
Roth IRA or other IRA. A rollover from or conversion of an IRA to a Roth IRA
may be subject to tax and other special rules may apply to the rollover or
conversion and to distributions attributable thereto. You should consult a tax
adviser before combining any converted amounts with any other Roth IRA
contributions, including any other conversion amounts from other tax years. The
Roth IRA is available to individuals with earned income and whose modified
adjusted gross income is under $110,000 for single filers, $160,000 for married
filing jointly, and $10,000 for married filing separately. The amount per
individual that may be contributed to all IRAs (Roth and traditional) is
$2,000. Secondly, the distributions are taxed differently. The Roth IRA offers
tax-free distributions when made 5 tax years after the first contribution to
any Roth IRA of the individual and made after attaining age 59 1/2, to pay for
qualified first time homebuyer expenses (lifetime maximum of $10,000) or due to
death or disability. All other distributions are subject to income tax when
made from earnings and may be subject to a premature withdrawal penalty tax
unless an exception applies. Unlike the traditional IRA, there are no minimum
required distributions during the owner's lifetime; however, required
distributions at death are generally the same.

Section 403(b) Plans. Under Section 403(b) of the Code, payments made by public
school systems and certain tax exempt organizations to purchase policies for
their employees are excludable from the gross income of the employee, subject
to certain limitations. However, such payments may be subject to FICA (Social
Security) taxes. The policy includes a death benefit that in some cases may
exceed the greater of the premium payments or the policy value. The death
benefit could be characterized as an incidental benefit, the amount of which is
limited in any tax-sheltered annuity under Section 403(b). Because the death
benefit may exceed this limitation, employers using the policy in connection
with such plans should consult their tax adviser. Additionally, in accordance
with the requirements of the Code, Section 403(b) annuities generally may not
permit distribution of (i) elective contributions made in years beginning after
December 31, 1988, and (ii) earnings on those contributions and (iii) earnings
on amounts attributed to elective contributions held as of the end of the last
year beginning before January 1, 1989. Distributions of such amounts will be
allowed only upon the death of the employee, on or after attainment of age 59
1/2, separation from service, disability, or financial hardship, except that
income attributable to elective contributions may not be distributed in the
case of hardship.

Corporate Pension and Profit-Sharing Plans and H.R. 10 Plans. Sections 401(a)
and 403(a) of the Code permit corporate employers to establish various types of
retirement plans for employees and self-employed individuals to establish
qualified plans for themselves and their employees. Such retirement plans may
permit the purchase of the policies to accumulate retirement savings. Adverse
tax consequences to the plan, the participant or both may result if the policy
is assigned or transferred to any individual as a means to provide benefit
payments. The policy includes a death benefit that in some cases may exceed the
greater of the premium payments or the policy value. The death benefit could be
characterized as an incidental benefit, the amount of which is limited in an
pension or profit sharing plan. Because the death benefit may exceed this
limitation, employers using the policy in connection with such plans should
consult their tax adviser.

Deferred Compensation Plans. Section 457 of the Code, while not actually
providing for a qualified plan as that term is normally used, provides for
certain deferred compensation plans with respect to service for state
governments, local governments, political sub-divisions, agencies,
instrumentalities and certain affiliates of such entities, and tax exempt
organizations. The policies can be used with such plans. Under such plans a
participant may specify the form of investment in which his or her

-17-
<PAGE>

participation will be made. For non-governmental Section 457 plans, all such
investments, however, are owned by, and are subject to, the claims of the
general creditors of the sponsoring employer. Depending on the terms of the
particular plan, a non-government employer may be entitled to draw on deferred
amounts for purposes unrelated to its Section 457 plan obligations. In general,
all amounts received under a Section 457 plan are taxable and are subject to
federal income tax withholding as wages.

Non-natural Persons. Pursuant to Section 72(u) of the Code, an annuity contract
held by a taxpayer other than a natural person generally will not be treated as
an annuity contract under the Code; accordingly, an owner who is not a natural
person will recognize as ordinary income for a taxable year the excess of (i)
the sum of the policy value as of the close of the taxable year and all
previous distributions under the policy over (ii) the sum of the premium
payments paid for the taxable year and any prior taxable year and the amounts
includable in gross income for any prior taxable year with respect to the
policy. For these purposes, the policy value at year-end may have to be
increased by any positive excess interest adjustment, which could result from a
full surrender at such time. There is, however, no definitive guidance on the
proper tax treatment of excess interest adjustments, and the owner should
contact a competent tax adviser with respect to the potential tax consequences
of an excess interest adjustment. Notwithstanding the preceding sentences in
this paragraph, Section 72(u) of the Code does not apply to (i) a policy where
the nominal owner is not a natural person but the beneficial owner of which is
a natural person, (ii) a policy acquired by the estate of a decedent by reason
of such decedent's death, (iii) a qualified policy (other than one qualified
under Section 457) or (iv) a single-payment annuity where the annuity
commencement date is no later than one year from the date of the single premium
payment; instead, such policies are taxed as described above under the heading
"Taxation of Annuities."

Taxation of PFL

INVESTMENT EXPERIENCE

A "net investment factor" is used to determine the value of accumulation units
and annuity units, and to determine annuity payment rates.

Accumulation Units

-18-
<PAGE>

The net investment factor for any subaccount for any valuation period is
determined by dividing (a) by (b) and subtracting (c) from the result, where:

(a) is the net result of:

(1) the net asset value per share of the shares held in the subaccount
determined at the end of the current valuation period, plus

(2) the per share amount of any dividend or capital gain distribution
made with respect to the shares held in the subaccount if the ex-
dividend date occurs during the current valuation period, plus or
minus

(3) a per share credit or charge for any taxes determined by PFL to have
resulted during the valuation period from the investment operations
of the subaccount;

(b) is the net asset value per share of the shares held in the subaccount
determined as of the end of the immediately preceding valuation period.

(c) is the charge for mortality and expense risk during the valuation
period, equal on an annual basis to 1.40% (for each of the 5% Annually
Compounding Death Benefit, the Greater of 5% Annually Compounding through
age 80 Death Benefit or Annual Step-Up Death Benefit, and the Monthly Step-
Up through age 80 Death Benefit) and 1. 25% (for the Return of Premium
Death Benefit) of the daily net asset value of the subaccount, plus the
0.15% administrative charge.

-19-
<PAGE>

Illustration of Separate Account Accumulation Unit Value Calculations
(Assumes 5% Annually Compounding Death Benefit)
Formula and Illustration for Determining the Net Investment Factor

Net Investment Factor = (A + B - C) - E
-----------
D

<TABLE>
<C> <S> <C>
Where: A = The net asset value of an underlying fund share as of the end of
the current valuation Period.
Assume.....................................A = $11.57
B = The per share amount of any dividend or capital gains distribution
since the end of the immediately preceding valuation period.
Assume..........................................B = 0
C = The per share charge or credit for any taxes reserved for at the
end of the current Valuation period.
Assume..........................................C = 0
D = The net asset value of an underlying fund share at the end of the
immediately preceding Valuation period.
Assume.....................................D = $11.40
E = The daily deduction for the mortality and expense risk fee and the
administrative charge, which totals 1.55% on an annual basis. On a
daily basis, E = .0000421409.

Then, the net investment factor = (11.57 + 0 - 0) - .0000421409 = Z = 1.0148701398
---------------
(11.40)
</TABLE>

Formula and Illustration for Determining Accumulation Unit Value

Accumulation Unit Value = A * B

<TABLE>
<C> <S> <C>
Where: A = The accumulation unit value for the immediately preceding valuation
period.
Assume............................................ = $X
B = The net investment factor for the current valuation period.
Assume............................................. = Y
</TABLE>

Then, the accumulation unit value = $X * Y = $Z

Annuity Unit Value and Annuity Payment Rates

For both the separate account, the amount of variable annuity payments will
vary with annuity unit values. Annuity unit values rise if the net investment
performance of the subaccount exceeds the assumed interest rate of 5% annually.
Conversely, annuity unit values fall if the net investment performance of the
subaccount is less than the assumed rate. The value of a variable annuity unit
in each subaccount was established at $1.00 on the date operations began for
that subaccount. For the separate account, the value of a variable annuity unit
on any subsequent business day is equal to (a) multiplied by (b) multiplied by
(c), where:

(a) is the variable annuity unit value on the immediately preceding
business day;

(b) is the net investment factor for the valuation period; and

-20-
<PAGE>

The dollar amount of subsequent variable annuity payments will depend upon
changes in applicable annuity unit values.

Illustration of Calculations for Annuity Unit Value
and Variable Annuity Payments

Formula and Illustration for Determining Annuity Unit Value

Annuity Unit Value = A * B * C

<TABLE>
<C> <S> <C>
Where: A = annuity unit value for the immediately preceding valuation period.
Assume........................................... = $X
B = Net investment factor for the valuation period for which the
annuity unit value is being calculated.
Assume............................................ = Y
C = A factor to neutralize the assumed interest rate of 5% built into
the Annuity Tables used.
Assume............................................ = Z
</TABLE>

Then, the annuity unit value is:

$X * Y * Z = $Q

Formula and Illustration for Determining Amount of
First Monthly Variable Annuity Payment

First monthly variable annuity payment = A * B
------
$1,000

<TABLE>
<C> <S> <C>
Where: A = The cash value as of the annuity commencement date.
Assume.......................................... = $X
B = The Annuity purchase rate per $1,000 of cash value based upon the
option selected, the sex and adjusted age of the annuitant
according to the tables contained in the policy.
Assume.......................................... = $Y
</TABLE>

Then, the first monthly variable annuity payment = $X * $Y = $Z
-------
1,000

-21-
<PAGE>

Formula and Illustration for Determining the Number of Annuity Units
Represented by Each Monthly Variable Annuity Payment

Number of annuity units = A
-
B

<TABLE>
<C> <S> <C>
Where: A = The dollar amount of the first monthly variable annuity payment.
Assume........................................... = $X
B = The annuity unit value for the valuation date on which the first
monthly payment is due.
Assume........................................... = $Y
</TABLE>

Then, the number of annuity units = $X = Z
--
$Y

FAMILY INCOME PROTECTOR--ADDITIONAL INFORMATION

. there were no subsequent premium payments, or withdrawals;

. there were no premium taxes;

. the $100,000 premium is subject to the family income protector;

. the annuitant is (or both annuitants are) 60 years old when the rider is
issued;

. the annual growth rate is 6.0% (once established, an annual growth rate will
not change during the life of the family income protector rider); and

. there was no upgrade of the minimum annuitization value.

Life Only = Life Annuity with No Period Certain Life 10 = Life Annuity with 10 Years Certain

Rider Anniversary at
Exercise Date Male Female Joint & Survivor
----------------------------------------------------------------------------------------------
Life Only Life 10 Life Only Life 10 Life Only Life 10
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
10 (age 70) $1,135 $1,067 $ 976 $ 949 $ 854 $ 852
----------------------------------------------------------------------------------------------
15 1,833 1,634 1,562 1,469 1,332 1,318
----------------------------------------------------------------------------------------------
20 (age 80) 3,049 2,479 2,597 2,286 2,145 2,078
</TABLE>

This hypothetical illustration should not be deemed representative of past or
future performance of any underlying variable investment option.

-22-
<PAGE>

basis. Withdrawals over this free amount will reduce the minimum annuitization
value on a pro rata basis by an amount equal to the minimum annuitization value
immediately prior to the excess withdrawal multiplied by the percentage
reduction in the policy value resulting from the excess withdrawal. The free
amount will always be a relatively small fraction of the minimum annuitization
value.

Examples of the effect of withdrawals on the minimum annuitization value are as
follows:

Example 1
Assumptions
------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
. minimum annuitization value on last policy
anniversary: $10,000
------------------------------------------------------------------------------------------------------------------------------------
. minimum annuitization value at time of
distribution: $10,500
------------------------------------------------------------------------------------------------------------------------------------
. policy value at time of distribution: $15,000
------------------------------------------------------------------------------------------------------------------------------------
. distribution amount: $ 500
------------------------------------------------------------------------------------------------------------------------------------
. prior distribution in current policy year: None
------------------------------------------------------------------------------------------------------------------------------------
Calculations
------------------------------------------------------------------------------------------------------------------------------------
. maximum annual free amount: $10,000 X 6% = $600
------------------------------------------------------------------------------------------------------------------------------------
. policy value after distribution: $15,000-$500 = $14,500
------------------------------------------------------------------------------------------------------------------------------------
. minimum annual value after distribution: $10,500-$500 = $10,000
------------------------------------------------------------------------------------------------------------------------------------
Example 2
Assumptions
------------------------------------------------------------------------------------------------------------------------------------
. minimum annuitization value on last policy
anniversary: $10,000
------------------------------------------------------------------------------------------------------------------------------------
. minimum annuitization value at time of
distribution: $10,500
------------------------------------------------------------------------------------------------------------------------------------
. policy value at time of distribution: $15,000
------------------------------------------------------------------------------------------------------------------------------------
. distribution amount: $ 1,500
------------------------------------------------------------------------------------------------------------------------------------
. prior distribution in current policy year: $ 1,000
------------------------------------------------------------------------------------------------------------------------------------
Calculations
------------------------------------------------------------------------------------------------------------------------------------
. maximum annual free amount: $ 0.0
------------------------------------------------------------------------------------------------------------------------------------
(prior distributions have exceeded the current year free amount of $600
[$10,000 X 6% = $600])
------------------------------------------------------------------------------------------------------------------------------------
. policy value after distribution: $15,000-$1,500 = $13,500
------------------------------------------------------------------------------------------------------------------------------------
(since the policy value is reduced 10% ($1,500/$15,000), the minimum
annuitization value is also reduced 10%)
------------------------------------------------------------------------------------------------------------------------------------
. minimum annual value after distribution: $10,500-(10% X $10,500) = $9,450
------------------------------------------------------------------------------------------------------------------------------------
Example 3
Assumptions
------------------------------------------------------------------------------------------------------------------------------------
. minimum annuitization value on last policy
anniversary: $10,000
------------------------------------------------------------------------------------------------------------------------------------
. minimum annuitization value at time of
distribution: $10,500
------------------------------------------------------------------------------------------------------------------------------------
. policy value at time of distribution: $ 7,500
------------------------------------------------------------------------------------------------------------------------------------
. distribution amount: $ 1,500
------------------------------------------------------------------------------------------------------------------------------------
. prior distribution in current policy year: $ 1,000
------------------------------------------------------------------------------------------------------------------------------------
Calculations
------------------------------------------------------------------------------------------------------------------------------------
.maximum annual free amount: $ 0.0
------------------------------------------------------------------------------------------------------------------------------------
(prior distributions have exceeded the current year free amount of $600
[$10,000 X 6% = $600])
------------------------------------------------------------------------------------------------------------------------------------
. policy value after distribution: $ 7,500-$1,500 = $6,000
------------------------------------------------------------------------------------------------------------------------------------
(since the policy value is reduced 20% ($1,500/$7,000), the minimum
annuitization value is also reduced 20%)
------------------------------------------------------------------------------------------------------------------------------------
. minimum annual value after distribution: $10,500-(20% X $10,500) = $8,400
</TABLE>

-23-
<PAGE>

HISTORICAL PERFORMANCE DATA

Money Market Yields

PFL may from time to time disclose the current annualized yield of the Endeavor
Money Market Subaccount, which invests in the Endeavor Money Market Portfolio,
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 Endeavor 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 and
income other than investment income) at the end of the 7-day period in the
value of a hypothetical account having a balance of 1 unit of the Endeavor
Money Market Subaccount at the beginning of the 7-day 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 (i) net income from the
portfolio attributable to the hypothetical account; and (ii) charges and
deductions imposed under a policy that are attributable to the hypothetical
account. The charges and deductions include the per unit charges for the
hypothetical account for (i) the administrative charges; and (ii) the mortality
and expense risk fee. Current yield will be calculated according to the
following formula:

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

-24-
<PAGE>

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 and income other than investment income) for the 7-day
period attributable to a hypothetical account having a balance of 1
subaccount unit.

ES = Per unit expenses of the subaccount for the 7-day period.

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

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

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 and income other than investment income) for the 7-day
period attributable to a hypothetical account having a balance of 1
subaccount unit.

ES = Per unit expenses of the subaccount for the 7-day period.

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

The yield on amounts held in the Endeavor Money Market Subaccount 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 Endeavor Money Market Subaccount's actual yield is affected by
changes in interest rates on money market securities, average portfolio
maturity of the Endeavor Money Market Portfolio, the types and quality of
portfolio securities held by the Endeavor Money Market Portfolio and its
operating expenses. For the seven days ended December 31, 1999, the yield of
the Endeavor Money Market Subaccount was 3.84%, and the effective yield was
3.91% for the 5% Annually Compounding Death Benefit, the Greater of 5% annually
compounding through age 80 Death Benefit or Annual Step-Up through age 80 Death
Benefit, and the Monthly Step-Up through age 80 Death Benefit. For the seven
days ended December 31, 1999, the yield of the Endeavor Money Market Subaccount
was 3.99%, and the effective yield was 4.07% for the Return of Premium Death
Benefit.

Other Subaccount Yields

-25-
<PAGE>

units outstanding for the period, (iii) compounding that yield for a 6-month
period, and (iv) multiplying that result by 2. Expenses attributable to the
subaccount include (i) the administrative charges; (ii) the mortality and
expense risk fee; and (iii) the distribution financing charge. The 30-day yield
is calculated according to the following formula:

Yield = 2 * ((((NI-ES)/(U-UV))+1)/6/-1)

Where:

NI= Net investment income of the subaccount for the 30-day period
attributable to the subaccount's unit.

ES= Expenses of the subaccount for the 30-day period.

U= The average number of units outstanding.

UV= The unit value at the close (highest) of the last day in the 30-day
period.

Total Returns

Total returns will be calculated using subaccount unit values which PFL
calculates on each business day based on the performance of the separate
account's underlying portfolio, and deductions for the mortality and expense
risk fee, and the administrative charges. Total return calculations will
reflect the effect of surrender charges that may be applicable to a particular
period. The total return will then be calculated according to the following
formula:

P (1+T)N = ERV

Where:

T = The average annual total return net of subaccount 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.

-26-
<PAGE>

Other Performance Data

PFL may from time to time also disclose cumulative total returns in conjunction
with the standard format described above. The cumulative returns will be
calculated using the following formula.

CTR = (ERV/P) -1

Where:

CTR = The cumulative total return net of subaccount recurring charges for the
period.

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

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

All non-standardized performance data will only be advertised if the
standardized performance data for the same period, as well as for the required
period, is also disclosed.

Adjusted Historical Performance Data

Past Performance for the Target Account

Standard Average Annual Total Returns
--------------------------------------------------------------------------------

5% Annually Compounding Death Benefit or Double Enhanced Death Benefit*

(Total Separate Account Annual Expenses: 1.55%)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Inception
1 Year of the Subaccount
Ended Subaccount Inception
Subaccount 12/31/99 to 12/31/99 Date
----------------------------------------------------------------------
<S> <C> <C> <C>
The Dow SM Target 5 (July Series) (19.68%) (6.24%) July 1, 1998
----------------------------------------------------------------------
</TABLE>

Return of Premium Death Benefit*

(Total Separate Account Annual Expenses: 1.40%)

<TABLE>
----------------------------------------------------------------------
<CAPTION>
Inception
1 Year of the Subaccount
Ended Subaccount Inception
Subaccount 12/31/99 to 12/31/99 Date
----------------------------------------------------------------------
<S> <C> <C> <C>
The Dow SM Target 5 (July Series) (19.56%) (6.09%) July 1, 1998
</TABLE>

* As of May 1, 2000, the death benefits available under this policy have been
changed to (1) 5% Annually Compounding Death Benefit, (2) Greater of 5%
Annually Compounding through age 80 Death Benefit or Annual Step-Up through
age 80 Death Benefit, (3) Monthly Step-Up Death Benefit, and (4) Return of
Premium. However, the total separate account annual expenses for each death
benefit did not change.

-27-
<PAGE>

PUBLISHED RATINGS

STATE REGULATION OF PFL

ADMINISTRATION

PFL performs administrative services for the policies. These services include
issuance of the policies, maintenance of records concerning the policies, and
certain valuation services.

RECORDS AND REPORTS

-28-
<PAGE>

DISTRIBUTION OF THE POLICIES

AFSG Securities Corporation, an affiliate of PFL, is the principal underwriter
of the policies and may enter into agreements with broker-dealers for the
distribution of the policies. During 1999 and 1998 the amount paid to AFSG
Securities Corporation was $6,309,434.00 and $13,075,039.78, respectively.
Prior to April 30, 1998, AEGON USA Securities, Inc. (also an affiliate of PFL)
was the principal underwriter. During 1998 and 1997, the amount paid to AEGON
USA Securities, Inc. and/or the broker-dealers for their services was
$8,891,105.79 and $29,678,498, respectively.

VOTING RIGHTS

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

OTHER PRODUCTS

-29-
<PAGE>

CUSTODY OF ASSETS

PFL holds the assets of each of the subaccounts. The assets of each of the
subaccounts are segregated and held separate and apart from the assets of the
other subaccounts and from PFL's general account assets. PFL maintains records
of all purchases and redemptions of shares of the underlying funds held by each
of the subaccounts. Additional protection for the assets of the separate
account is afforded by PFL's fidelity bond, presently in the amount of
$5,000,000, covering the acts of officers and employees of PFL.

LEGAL MATTERS

Sutherland Asbill & Brennan LLP, of Washington D.C. has provided legal advice
relating to certain matters under the federal securities laws applicable to the
issue and sale of the policies to PFL.

INDEPENDENT AUDITORS

The statutory-basis financial statements and schedules of PFL as of December
31, 1999 and 1998, and for each of the three years in the period ended December
31, 1999, and the financial statements of the subaccounts of PFL Endeavor VA
Separate Account, which are available for investment by The Endeavor ML
Variable Annuity policyowners, as of December 31, 1999, and for the two years
in the period then ended, included in this SAI have been audited by Ernst &
Young LLP, Independent Auditors, 801 Grand Avenue, Suite 3400, Des Moines, Iowa
50309.

OTHER INFORMATION

FINANCIAL STATEMENTS

The values of your interest in the separate account will be affected solely by
the investment results of the selected subaccount(s). Financial statements of
certain subaccounts of The PFL Endeavor VA Separate Account, which are
available for investment by the PFL Endeavor ML Variable Annuity contract
owners, are contained herein. The statutory-basis financial statements of PFL,
which are included in this SAI, should be considered only as bearing on the
ability of PFL to meet its obligations under the policies. They should not be
considered as bearing on the investment performance of the assets held in the
separate account.

-30-
<PAGE>

Financial Statements--Statutory Basis

PFL Life Insurance Company

Years ended December 31, 1999, 1998 and 1997
with Report of Independent Auditors
<PAGE>

PFL Life Insurance Company

Financial Statements--Statutory Basis

Years ended December 31, 1999, 1998 and 1997

Contents

[LETTERHEAD OF ERNST & YOUNG LLP APPEARS HERE]

Report of Independent Auditors

The Board of Directors
PFL Life Insurance Company

1
<PAGE>

/s/ Ernst & Young LLP

Des Moines, Iowa
February 18, 2000

2
<PAGE>

PFL Life Insurance Company

Balance Sheets--Statutory Basis
(Dollars in thousands, except per share amounts)

3
<PAGE>

PFL Life Insurance Company

Balance Sheets--Statutory Basis
(Dollars in thousands, except per share amounts)

See accompanying notes.

4
<PAGE>

PFL Life Insurance Company

Statements of Operations--Statutory Basis
(Dollars in thousands)

See accompanying notes.

5
<PAGE>

PFL Life Insurance Company

Statements of Changes in Capital and Surplus--Statutory Basis
(Dollars in thousands)

See accompanying notes.

6
<PAGE>

PFL Life Insurance Company

Statements of Cash Flows--Statutory Basis
(Dollars in thousands)

7
<PAGE>

PFL Life Insurance Company

Statements of Cash Flows--Statutory Basis
(Dollars in thousands)

See accompanying notes.

8
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis

(Dollars in thousands)
December 31, 1999

1. Organization and Summary of Significant Accounting Policies

Organization

Nature of Business

Basis of Presentation

9
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis--(continued)

(Dollars in thousands)

1. Organization and Summary of Significant Accounting Policies (continued)

10
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis--(continued)

(Dollars in thousands)

1. Organization and Summary of Significant Accounting Policies (continued)

Cash and Short-Term Investments

For purposes of the statements of cash flows, the Company considers all highly
liquid investments with remaining maturity of one year or less when purchased
to be short-term investments.

Investments

11
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis--(continued)

(Dollars in thousands)

1. Organization and Summary of Significant Accounting Policies (continued)

Aggregate Policy Reserves

12
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis--(continued)

(Dollars in thousands)

1. Organization and Summary of Significant Accounting Policies (continued)

Policy and Contract Claim Reserves

Separate Accounts

Stock Option Plan

Reclassifications

Certain reclassifications have been made to the 1998 and 1997 financial
statements to conform to the 1999 presentation.

13
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis--(continued)

(Dollars in thousands)

2. Fair Values of Financial Instruments

The following methods and assumptions were used by the Company in estimating
its fair value disclosures for financial instruments:

Cash and short-term investments: The carrying amounts reported in the
balance sheet for these instruments approximate their fair values.

14
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis--(continued)

(Dollars in thousands)

2. Fair Values of Financial Instruments (continued)

Short-term notes payable to affiliates: The fair values for short-term
notes payable to affiliates are assumed to equal their carrying amount.

The following sets forth a comparison of the fair values and carrying amounts
of the Company's financial instruments subject to the provisions of SFAS No.
107 and No. 119:

15
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis--(continued)

(Dollars in thousands)

3. Investments

The carrying amounts and estimated fair values of investments in debt
securities were as follows:

16
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis--(continued)

(Dollars in thousands)

3. Investments (continued)

A detail of net investment income is presented below:

Proceeds from sales and maturities of debt securities and related gross
realized gains and losses were as follows:

17
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis--(continued)

(Dollars in thousands)

3. Investments (continued)

Realized investment gains (losses) and changes in unrealized gains (losses)
for investments are summarized below:

Gross unrealized gains and gross unrealized losses on equity securities are as
follows:

18
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis--(continued)

(Dollars in thousands)

3. Investments (continued)

Geographic Distribution

Property Type Distribution

19
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis--(continued)

(Dollars in thousands)

3. Investments (continued)

At December 31, 1999 and 1998, the Company's outstanding financial instruments
with on and off-balance sheet risks, shown in notional amounts, are summarized
as follows:

4. Reinsurance

20
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis--(continued)

(Dollars in thousands)

4. Reinsurance (continued)

Reinsurance assumption and cession treaties are transacted primarily with
affiliates. Premiums earned reflect the following reinsurance assumed and
ceded amounts:

5. Income Taxes

21
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis--(continued)

(Dollars in thousands)

5. Income Taxes (continued)

22
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis--(continued)

(Dollars in thousands)

6. Policy and Contract Attributes

A reconciliation of the amounts transferred to and from the separate accounts
is presented below:

23
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis--(continued)

(Dollars in thousands)

6. Policy and Contract Attributes (continued)

24
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis--(continued)

(Dollars in thousands)

7. Dividend Restrictions

The Company paid dividends to its parent of $40,000, $120,000 and $62,000 in
1999, 1998 and 1997, respectively.

8. Retirement and Compensation Plans

25
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis--(continued)

(Dollars in thousands)

8. Retirement and Compensation Plans (continued)

9. Related Party Transactions

The Company shares certain offices, employees and general expenses with
affiliated companies.

During 1997, the Company received a capital contribution of $153 in cash from
its parent.

26
<PAGE>

PFL Life Insurance Company

Notes to Financial Statements--Statutory Basis--(continued)

(Dollars in thousands)

9. Related Party Transactions (continued)

10. Commitments and Contingencies

27
<PAGE>

PFL Life Insurance Company

Summary of Investments--Other than
Investments in Related Parties

(Dollars in thousands)
December 31, 1999

SCHEDULE I

28
<PAGE>

PFL Life Insurance Company

Supplementary Insurance Information
(Dollars in thousands)

SCHEDULE III

29
<PAGE>

PFL Life Insurance Company

Supplementary Insurance Information
(Dollars in thousands)

SCHEDULE III

30
<PAGE>

PFL Life Insurance Company

Reinsurance
(Dollars in thousands)

SCHEDULE IV

31
<PAGE>

Financial Statements

PFL Endeavor VA Separate Account -
The Endeavor ML Variable Annuity

Year ended December 31, 1999
with Report of Independent Auditors
<PAGE>

PFL Endeavor VA Separate Account -
The Endeavor ML Variable Annuity

Financial Statements

Year ended December 31, 1999

Contents

<TABLE>
<S> <C>
Report of Independent Auditors.......................................... 1

Financial Statements

Balance Sheets.......................................................... 2
Statements of Operations................................................ 6
Statements of Changes in Contract Owners' Equity........................ 10
Notes to Financial Statements........................................... 17
</TABLE>
<PAGE>

Report of Independent Auditors

The Board of Directors and Contract Owners
of The Endeavor ML Variable Annuity,
PFL Life Insurance Company

We have audited the accompanying balance sheets of certain subaccounts of PFL
Endeavor VA Separate Account (comprised of the Endeavor Money Market, Endeavor
Asset Allocation, T. Rowe Price International Stock, Endeavor Value Equity,
Dreyfus Small Cap Value, Dreyfus U.S. Government Securities, T. Rowe Price
Equity Income, T. Rowe Price Growth Stock, Endeavor Opportunity Value, Endeavor
Enhanced Index, Endeavor Select 50, Endeavor High Yield, Endeavor Janus Growth,
High Current Income, Developing Capital Markets Focus, and Basic Value Focus
subaccounts), which are available for investment by contract owners of The
Endeavor ML Variable Annuity, as of December 31, 1999, and the related
statements of operations for the year then ended and changes in contract owners'
equity for the periods indicated thereon. These financial statements are the
responsibility of the Separate Account's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of mutual fund shares owned as of December 31,
1999, by correspondence with the mutual funds' transfer agents. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of each of the respective
subaccounts of PFL Endeavor VA Separate Account which are available for
investment by contract owners of The Endeavor ML Variable Annuity at December
31, 1999, and the results of their operations for the year then ended and
changes in their contract owners' equity for the periods indicated thereon in
conformity with accounting principles generally accepted in the United States.

/s/ Ernst & Young LLP

Des Moines, Iowa
January 28, 2000

1
<PAGE>

PFL Endeavor VA Separate Account -
The Endeavor ML Variable Annuity

Balance Sheets

December 31, 1999

<TABLE>
<CAPTION>
Endeavor Money
Market
Subaccount
------------------
Assets
<S> <C>
Cash $ 17
Investments in mutual funds, at current market value:
Endeavor Series Trust:
Endeavor Money Market Portfolio 6,167,550
Endeavor Asset Allocation Portfolio -
T. Rowe Price International Stock Portfolio -
Endeavor Value Equity Portfolio -
Dreyfus Small Cap Value Portfolio -
Dreyfus U. S. Government Securities Portfolio -
T. Rowe Price Equity Income Portfolio -
T. Rowe Price Growth Stock Portfolio -
Endeavor Opportunity Value Portfolio -
Endeavor Enhanced Index Portfolio -
Endeavor Select 50 Portfolio -
Endeavor High Yield Portfolio -
Endeavor Janus Growth Portfolio -
Merrill Lynch Variable Series Funds, Inc.:
High Current Income Fund -
Developing Capital Markets Focus Fund -
Basic Value Focus Fund -
------------------
Total investments in mutual funds 6,167,550
------------------
Total assets $6,167,567
==================

Liabilities and contract owners' equity
Liabilities:
Contract terminations payable $ -
------------------
Total liabilities -

Contract owners' equity:
Deferred annuity contracts terminable by owners 6,167,567
------------------
Total liabilities and contract owners' equity $6,167,567
==================
</TABLE>

See accompanying notes.

2
<PAGE>

<TABLE>
<CAPTION>
Endeavor T. Rowe Price Dreyfus Dreyfus U. S.
Asset International Endeavor Small Cap Government T. Rowe Price
Allocation Stock Value Equity Value Securities Equity Income
Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 3 $ - $ 2 $ 6 $ - $ -

- - - - - -
20,443,653 - - - - -
- 13,229,963 - - - -
- - 11,422,908 - - -
- - - 17,706,227 - -
- - - - 7,769,504 -
- - - - - 22,636,822
- - - - - -
- - - - - -
- - - - - -
- - - - - -
- - - - - -
- - - - - -

- - - - - -
- - - - - -
- - - - - -
-------------------------------------------------------------------------------------------------------------
20,443,653 13,229,963 11,422,908 17,706,227 7,769,504 22,636,822
-------------------------------------------------------------------------------------------------------------
$20,443,656 $13,229,963 $11,422,910 $17,706,233 $7,769,504 $22,636,822
=============================================================================================================

$ - $ 1 $ - $ - $ 4 $ 6
-------------------------------------------------------------------------------------------------------------
- 1 - - 4 6

20,443,656 13,229,962 11,422,910 17,706,233 7,769,500 22,636,816
-------------------------------------------------------------------------------------------------------------
$20,443,656 $13,229,963 $11,422,910 $17,706,233 $7,769,504 $22,636,822
=============================================================================================================
</TABLE>

3
<PAGE>

PFL Endeavor VA Separate Account -
The Endeavor ML Variable Annuity

Balance Sheets (continued)

<TABLE>
<CAPTION>
T. Rowe
Price Endeavor
Growth Opportunity
Stock Value
Subaccount Subaccount
-------------------------------------
Assets
<S> <C> <C>
Cash $ 7 $ -
Investments in mutual funds, at current market value:
Endeavor Series Trust:
Endeavor Money Market Portfolio - -
Endeavor Asset Allocation Portfolio - -
T. Rowe Price International Stock Portfolio - -
Endeavor Value Equity Portfolio - -
Dreyfus Small Cap Value Portfolio - -
Dreyfus U. S. Government Securities Portfolio - -
T. Rowe Price Equity Income Portfolio - -
T. Rowe Growth Stock Portfolio 29,582,797 -
Endeavor Opportunity Value Portfolio - 6,446,965
Endeavor Enhanced Index Portfolio - -
Endeavor Select 50 Portfolio - -
Endeavor High Yield Portfolio - -
Endeavor Janus Growth Portfolio - -
Merrill Lynch Variable Series Funds, Inc.:
High Current Income Fund - -
Developing Capital Markets Focus Fund - -
Basic Value Focus Fund - -
-------------------------------------
Total investments in mutual funds 29,582,797 6,446,965
-------------------------------------
Total assets $29,582,804 $6,446,965
=====================================

Liabilities and contract owners' equity
Liabilities:
Contract terminations payable $ - $ 2
-------------------------------------
Total liabilities - 2

Contract owners' equity:
Deferred annuity contracts terminable by owners 29,582,804 6,446,963
-------------------------------------
Total liabilities and contract owners' equity $29,582,804 $6,446,965
=====================================
</TABLE>

See accompanying notes.

4
<PAGE>

<TABLE>
<CAPTION>
Developing
Endeavor Endeavor High Capital
Enhanced Endeavor Endeavor Janus Current Markets Basic Value
Index Select 50 High Yield Growth Income Focus Focus
Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 48 $ - $ 4 $ 5 $ - $ - $ -
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
33,166,144 - - - - - -
- 5,315,729 - - - - -
- - 2,928,025 - - - -
- - - 82,641,754 - - -
- - - - 8,895,938 - -
- - - - - 2,050,022 -
- - - - - - 17,333,740
---------------------------------------------------------------------------------------------------------------
33,166,144 5,315,729 2,928,025 82,641,754 8,895,938 2,050,022 17,333,740
---------------------------------------------------------------------------------------------------------------
$33,166,192 $5,315,729 $ 2,928,029 $82,641,759 $ 8,895,938 $2,050,022 $17,333,740
===============================================================================================================

$ - $ 113 $ - $ - $ 6 $ 32 $ 237
---------------------------------------------------------------------------------------------------------------
- 113 - - 6 32 237

33,166,192 5,315,616 2,928,029 82,641,759 8,895,932 2,049,990 17,333,503
---------------------------------------------------------------------------------------------------------------
$33,166,192 $5,315,729 $ 2,928,029 $82,641,759 $ 8,895,938 $2,050,022 $17,333,740
===============================================================================================================
</TABLE>

5
<PAGE>

PFL Endeavor VA Separate Account -
The Endeavor ML Variable Annuity

Statements of Operations

Year ended December 31, 1999

<TABLE>
<CAPTION>
Endeavor Money
Market
Subaccount
-----------------
<S> <C>
Net investment income (loss)
Income:
Dividends $ 203,616
Expenses:
Administrative, mortality and expense risk charges 65,851
-----------------
Net investment income (loss) 137,765

Net realized and unrealized capital gain (loss) from investments
Net realized capital gain (loss) from sales of investments:
Proceeds from sales 5,113,007
Cost of investments sold 5,113,007
-----------------
Net realized capital gain (loss) from sales of investments -

Net change in unrealized appreciation/depreciation of investments:
Beginning of the period -
End of the period -
-----------------
Net change in unrealized appreciation/depreciation of investments -
-----------------
Net realized and unrealized capital gain (loss) from investments -
-----------------
Increase (decrease) from operations $ 137,765
=================
</TABLE>

See accompanying notes.

6
<PAGE>

<TABLE>
<CAPTION>
Endeavor T. Rowe Price Dreyfus Dreyfus U. S.
Asset International Endeavor Small Cap Government T. Rowe Price
Allocation Stock Value Equity Value Securities Equity Income
Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 2,499,155 $ 169,939 $ 448,242 $ 979,304 $ 326,065 $ 986,858

185,955 117,951 144,533 171,260 92,775 265,465
------------------------------------------------------------------------------------------------------
2,313,200 51,988 303,709 808,044 233,290 721,393

971,063 722,472 1,700,474 1,250,831 2,051,925 1,114,035
973,599 663,649 1,658,836 1,443,727 2,085,094 1,019,442
------------------------------------------------------------------------------------------------------
(2,536) 58,823 41,638 (192,896) (33,169) 94,593

364,626 410,143 195,745 (552,080) 93,076 453,344
1,240,455 2,980,629 (708,954) 1,760,335 (241,731) (351,116)
------------------------------------------------------------------------------------------------------
875,829 2,570,486 (904,699) 2,312,415 (334,807) (804,460)
------------------------------------------------------------------------------------------------------
873,293 2,629,309 (863,061) 2,119,519 (367,976) (709,867)
------------------------------------------------------------------------------------------------------
$ 3,186,493 $2,681,297 $ (559,352) $2,927,563 $ (134,686) $ 11,526
======================================================================================================
</TABLE>

7
<PAGE>

PFL Endeavor VA Separate Account -
The Endeavor ML Variable Annuity

Statements of Operations (continued)

<TABLE>
<CAPTION>
Endeavor
T. Rowe Price Opportunity
Growth Stock Value
Subaccount Subaccount
-------------------------------------
<S> <C> <C>
Net investment income (loss)
Income:
Dividends $ 1,295,562 $ 104,939
Expenses:
Administrative, mortality and expense risk charges 274,740 87,290
-------------------------------------
Net investment income (loss) 1,020,822 17,649

Net realized and unrealized capital gain (loss) from investments
Net realized capital gain (loss) from sales of investments:
Proceeds from sales 1,831,705 1,824,390
Cost of investments sold 1,433,726 1,772,264
-------------------------------------
Net realized capital gain (loss) from sales of investments 397,979 52,126

Net change in unrealized appreciation/depreciation of investments:
Beginning of the period 1,535,618 14,349
End of the period 4,351,252 104,917
-------------------------------------
Net change in unrealized appreciation/depreciation of investments 2,815,634 90,568
-------------------------------------
Net realized and unrealized capital gain (loss) from investments 3,213,613 142,694
-------------------------------------
Increase (decrease) from operations $ 4,234,435 $ 160,343
=====================================
</TABLE>

See accompanying notes.

8
<PAGE>

264,962 49,512 20,510 598,066 124,487 17,257 173,082
-------------------------------------------------------------------------------------------------------------------
338,083 (49,512) (3,390) (598,066) 779,561 14,316 2,426,609

802,970 659,745 131,769 1,284,341 1,372,212 330,652 625,675
565,959 616,723 125,358 739,205 1,592,342 392,113 724,430
-------------------------------------------------------------------------------------------------------------------
237,011 43,022 6,411 545,136 (220,130) (61,461) (98,755)

1,157,511 74,974 13,143 4,210,495 (664,011) (217,296) 40,964
3,412,163 1,529,927 53,689 26,009,253 (874,408) 457,571 (612,115)
-------------------------------------------------------------------------------------------------------------------
2,254,652 1,454,953 40,546 21,798,758 (210,397) 674,867 (653,079)
-------------------------------------------------------------------------------------------------------------------
2,491,663 1,497,975 46,957 22,343,894 (430,527) 613,406 (751,834)
-------------------------------------------------------------------------------------------------------------------
$ 2,829,746 $1,448,463 $ 43,567 $21,745,828 $ 349,034 $ 627,722 $ 1,674,775
===================================================================================================================
</TABLE>

9
<PAGE>

PFL Endeavor VA Separate Account -
The Endeavor ML Variable Annuity

Statements of Changes in Contract Owners' Equity

Years ended December 31, 1999 and 1998, except as noted

<TABLE>
<CAPTION>
Endeavor Money Market Subaccount
-----------------------------------
1999 1998
-----------------------------------
<S> <C> <C>
Operations:
Net investment income (loss) $ 137,765 $ 51,321
Net realized capital gain (loss) - -
Net change in unrealized appreciation/depreciation of investments - -
-----------------------------------
Increase (decrease) from operations 137,765 51,321

Contract transactions:
Net contract purchase payments 4,418,851 1,804,285
Transfer payments from (to) other subaccounts or general account (212,212) 80,181
Contract terminations, withdrawals and other deductions (461,970) (157,625)
-----------------------------------
Increase from contract transactions 3,744,669 1,726,841
-----------------------------------
Net increase in contract owners' equity 3,882,434 1,778,162

Contract owners' equity:
Beginning of the period 2,285,133 506,971
-----------------------------------
End of the period $ 6,167,567 $2,285,133
===================================
</TABLE>

(1) Commencement of operations, February 2, 1998.
(2) Commencement of operations, June 2, 1998.
(3) For the period January 1, 1999 through April 30, 1999 and the year ended
December 31, 1998, activity reflected in this subaccount is related to
investments in the Growth Portfolio of the WRL Series Fund, Inc. As of the
close of business on April 30, 1999, the investments in the Growth Portfolio
of the WRL Series Fund, Inc. were replaced by investments in the Endeavor
Janus Growth Portfolio of the Endeavor Series Trust. The investment results
and contract transactions of the Endeavor Janus Growth Portfolio of the
Endeavor Series Trust are reflected in this subaccount for the period May 1,
1999 through December 31, 1999.

See accompanying notes.

10
<PAGE>

<TABLE>
<CAPTION>
Endeavor Asset Allocation T. Rowe Price International Endeavor
Subaccount Stock Subaccount Value Equity Subaccount
--------------------------------- ------------------------------------- -------------------------------------
1999 1998 1999 1998 1999 1998
--------------------------------- ------------------------------------- -------------------------------------
<S> <C> <C> <C> <C> <C>
$ 2,313,200 $ 349,447 $ 51,988 $ (6,200) $ 303,709 $ 45,775
(2,536) 6,356 58,823 (25,050) 41,638 15,209
875,829 354,393 2,570,486 495,006 (904,699) 146,607
--------------------------------- ------------------------------------- -------------------------------------
3,186,493 710,196 2,681,297 463,756 (559,352) 207,591

4,302,495 2,598,582 3,163,240 1,033,058 2,645,791 3,256,698
5,399,436 3,290,707 1,632,718 2,187,777 1,668,580 2,633,332
(416,925) (162,084) (196,314) (179,109) (202,365) (65,388)
--------------------------------- ------------------------------------- -------------------------------------
9,285,006 5,727,205 4,599,644 3,041,726 4,112,006 5,824,642
--------------------------------- ------------------------------------- -------------------------------------
12,471,499 6,437,401 7,280,941 3,505,482 3,552,654 6,032,233

7,972,157 1,534,756 5,949,021 2,443,539 7,870,256 1,838,023
--------------------------------- ------------------------------------- -------------------------------------
$ 20,443,656 $ 7,972,157 $ 13,229,962 $ 5,949,021 $ 11,422,910 $ 7,870,256
================================= ===================================== =====================================
</TABLE>

11
<PAGE>

PFL Endeavor VA Separate Account -
The Endeavor ML Variable Annuity

Statements of Changes in Contract Owners' Equity (continued)

<TABLE>
<CAPTION>
Dreyfus Small Cap Value Dreyfus U. S. Government
Subaccount Securities Subaccount
--------------------------------- -----------------------------------
1999 1998 1999 1998
--------------------------------- -----------------------------------
<S> <C> <C> <C> <C>
Operations:
Net investment income (loss) $ 808,044 $ 644,027 $ 233,290 $ 31,656
Net realized capital gain (loss) (192,896) (341,963) (33,169) 24,368
Net change in unrealized appreciation/
depreciation of investments 2,312,415 (495,138) (334,807) 80,508
--------------------------------- -----------------------------------
Increase (decrease) from operations 2,927,563 (193,074) (134,686) 136,532

Contract transactions:
Net contract purchase payments 3,545,506 2,579,315 2,438,360 1,840,411
Transfer payments from (to) other
subaccounts or general account 2,923,591 3,192,530 992,545 2,418,528

Contract terminations, withdrawals and
other deductions (201,332) (271,369) (341,018) (59,142)
--------------------------------- -----------------------------------
Increase from contract transactions 6,267,765 5,500,476 3,089,887 4,199,797
--------------------------------- -----------------------------------
Net increase in contract owners' equity 9,195,328 5,307,402 2,955,201 4,336,329

Contract owners' equity:
Beginning of the period 8,510,905 3,203,503 4,814,299 477,970
--------------------------------- -----------------------------------
End of the period $ 17,706,233 $ 8,510,905 $ 7,769,500 $ 4,814,299
================================= ===================================
</TABLE>

(1) Commencement of operations, February 2, 1998.
(2) Commencement of operations, June 2, 1998.
(3) For the period January 1, 1999 through April 30, 1999 and the year ended
December 31, 1998, activity reflected in this subaccount is related to
investments in the Growth Portfolio of the WRL Series Fund, Inc. As of the
close of business on April 30, 1999, the investments in the Growth Portfolio
of the WRL Series Fund, Inc. were replaced by investments in the Endeavor
Janus Growth Portfolio of the Endeavor Series Trust. The investment results
and contract transactions of the Endeavor Janus Growth Portfolio of the
Endeavor Series Trust are reflected in this subaccount for the period May 1,
1999 through December 31, 1999.

See accompanying notes.

12
<PAGE>

<TABLE>
<CAPTION>
T. Rowe Price Equity Income T. Rowe Price Growth Stock Endeavor
Subaccount Subaccount Opportunity Value Subaccount
-------------------------------- ------------------------------------- -------------------------------------
1999 1998 1999 1998 1999 1998
-------------------------------- ------------------------------------- -------------------------------------
<S> <C> <C> <C> <C> <C>
$ 721,393 $ 224,281 $ 1,020,822 $ 140,477 $ 17,649 $ (12,504)
94,593 48,603 397,979 48,848 52,126 14,324

(804,460) 314,785 2,815,634 1,455,971 90,568 (633)
-------------------------------- ------------------------------------- -------------------------------------
11,526 587,669 4,234,435 1,645,296 160,343 1,187

5,248,393 4,720,603 8,403,335 4,221,988 1,058,822 2,834,478

4,940,145 4,925,191 5,651,477 3,845,353 (601,328) 1,919,107

(593,335) (290,766) (632,262) (114,339) (109,616) (90,309)
-------------------------------- ------------------------------------- -------------------------------------
9,595,203 9,355,028 13,422,550 7,953,002 347,878 4,663,276
-------------------------------- ------------------------------------- -------------------------------------
9,606,729 9,942,697 17,656,985 9,598,298 508,221 4,664,463

13,030,087 3,087,390 11,925,819 2,327,521 5,938,742 1,274,279
-------------------------------- ------------------------------------- -------------------------------------
$ 22,636,816 $ 13,030,087 $ 29,582,804 $ 11,925,819 $ 6,446,963 $ 5,938,742
================================ ===================================== =====================================
</TABLE>

13
<PAGE>

PFL Endeavor VA Separate Account -
The Endeavor ML Variable Annuity

Statements of Changes in Contract Owners' Equity (continued)

<TABLE>
<CAPTION>
Endeavor Enhanced Endeavor Select 50
Index Subaccount Subaccount
------------------------------------ ----------------------------------
1999 1998 1999 1998 (1)
------------------------------------ ----------------------------------
<S> <C> <C> <C> <C>
Operations:
Net investment income (loss) $ 338,083 $ (47,293) $ (49,512) $ (20,587)
Net realized capital gain (loss) 237,011 56,407 43,022 (6,836)
Net change in unrealized appreciation/
depreciation of investments 2,254,652 1,114,533 1,454,953 74,974
------------------------------------ ----------------------------------
Increase (decrease) from operations 2,829,746 1,123,647 1,448,463 47,551

Contract transactions:
Net contract purchase payments 12,106,597 3,314,042 954,350 1,822,818
Transfer payments from (to) other
subaccounts or general account 10,436,549 2,226,570 391,477 693,965

Contract terminations, withdrawals
and other deductions (372,720) (153,627) (41,045) (1,963)
------------------------------------ ----------------------------------
Increase from contract transactions 22,170,426 5,386,985 1,304,782 2,514,820
------------------------------------ ----------------------------------
Net increase in contract owners' equity 25,000,172 6,510,632 2,753,245 2,562,371

Contract owners' equity:
Beginning of the period 8,166,020 1,655,388 2,562,371 -
------------------------------------ ----------------------------------
End of the period $ 33,166,192 $ 8,166,020 $ 5,315,616 $ 2,562,371
==================================== ==================================
</TABLE>

(1) Commencement of operations, February 2, 1998.
(2) Commencement of operations, June 2, 1998.
(3) For the period January 1, 1999 through April 30, 1999 and the year ended
December 31, 1998, activity reflected in this subaccount is related to
investments in the Growth Portfolio of the WRL Series Fund, Inc. As of the
close of business on April 30, 1999, the investments in the Growth Portfolio
of the WRL Series Fund, Inc. were replaced by investments in the Endeavor
Janus Growth Portfolio of the Endeavor Series Trust. The investment results
and contract transactions of the Endeavor Janus Growth Portfolio of the
Endeavor Series Trust are reflected in this subaccount for the period May 1,
1999 through December 31, 1999.

See accompanying notes.

14
<PAGE>

<TABLE>
<CAPTION>
Developing Capital
Endeavor High Yield Endeavor Janus High Current Income Markets Focus
Subaccount Growth Subaccount Subaccount Subaccount
------------------------ -------------------------- --------------------------- ---------------------------
1999 1998 (2) 1999 (3) 1998 1999 1998 1999 1998
------------------------ -------------------------- --------------------------- ---------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ (3,390) $ (1,263) $ (598,066) $ (40,959) $ 779,561 $ 396,136 $ 14,316 $ (3,291)

6,411 (1,892) 545,136 118,650 (220,130) (101,819) (61,461) (173,704)

40,546 13,143 21,798,758 4,515,303 (210,397) (658,076) 674,867 (122,464)
------------------------ -------------------------- --------------------------- --------------------------
43,567 9,988 21,745,828 4,592,994 349,034 (363,759) 627,722 (299,459)

1,561,899 285,792 25,718,106 5,602,811 942,760 1,724,497 301,942 174,872

977,430 87,832 18,433,931 5,034,772 675,815 4,279,386 275,000 292,614

(38,479) - (1,072,303) (510,596) (485,335) (105,358) (37,023) (1,283)
------------------------ -------------------------- --------------------------- --------------------------
2,500,850 373,624 43,079,734 10,126,987 1,133,240 5,898,525 539,919 466,203
------------------------ -------------------------- --------------------------- --------------------------
2,544,417 383,612 64,825,562 14,719,981 1,482,274 5,534,766 1,167,641 166,744

383,612 - 17,816,197 3,096,216 7,413,658 1,878,892 882,349 715,605
------------------------ -------------------------- --------------------------- --------------------------
$ 2,928,029 $ 383,612 $ 82,641,759 $ 17,816,197 $ 8,895,932 $ 7,413,658 $ 2,049,990 $ 882,349
======================== ========================== =========================== ==========================
</TABLE>

15
<PAGE>

PFL Endeavor VA Separate Account -
The Endeavor ML Variable Annuity

Statements of Changes in Contract Owners' Equity (continued)

<TABLE>
<CAPTION>
Basic Value Focus Subaccount
-----------------------------------
1999 1998
-----------------------------------
<S> <C> <C>
Operations:
Net investment income (loss) $ 2,426,609 $ 165,338
Net realized capital gain (loss) (98,755) (97,851)
Net change in unrealized appreciation/depreciation of investments (653,079) 70,811
-----------------------------------
Increase (decrease) from operations 1,674,775 138,298

Contract transactions:
Net contract purchase payments 4,601,605 2,167,226
Transfer payments from (to) other subaccounts or general account 3,938,706 3,731,353
Contract terminations, withdrawals and other deductions (334,573) (87,844)
-----------------------------------
Increase from contract transactions 8,205,738 5,810,735
-----------------------------------
Net increase in contract owners' equity 9,880,513 5,949,033

Contract owners' equity:
Beginning of the period 7,452,990 1,503,957
-----------------------------------
End of the period $ 17,333,503 $ 7,452,990
===================================
</TABLE>

(1) Commencement of operations, February 2, 1998.
(2) Commencement of operations, June 2, 1998.
(3) For the period January 1, 1999 through April 30, 1999 and the year ended
December 31, 1998, activity reflected in this subaccount is related to
investments in the Growth Portfolio of the WRL Series Fund, Inc. As of the
close of business on April 30, 1999, the investments in the Growth
Portfolio of the WRL Series Fund, Inc. were replaced by investments in the
Endeavor Janus Growth Portfolio of the Endeavor Series Trust. The
investment results and contract transactions of the Endeavor Janus Growth
Portfolio of the Endeavor Series Trust are reflected in this subaccount for
the period May 1, 1999 through December 31, 1999.

See accompanying notes.

16
<PAGE>

PFL Endeavor VA Separate Account -
The Endeavor ML Variable Annuity

Notes to Financial Statements

December 31, 1999

1. Organization and Summary of Significant Accounting Policies

Organization

PFL Endeavor VA Separate Account (the "Mutual Fund Account") is a segregated
investment account of PFL Life Insurance Company ("PFL Life"), an indirect
wholly-owned subsidiary of AEGON N.V., a holding company organized under the
laws of The Netherlands.

The Mutual Fund Account is registered with the Securities and Exchange
Commission as a Unit Investment Trust pursuant to provisions of the Investment
Company Act of 1940. The Mutual Fund Account consists of sixteen investment
subaccounts, thirteen of which are invested in specified portfolios of the
Endeavor Series Trust and three of which are invested in specified portfolios of
the Merrill Lynch Variable Series Funds, Inc. (each a "Series Fund" and
collectively "The Series Funds"). Activity in these sixteen investment
subaccounts is available to contract owners of The Endeavor ML Variable Annuity.
The Endeavor Series Trust portfolios of the Mutual Fund Account are also
available to the contract owners of The Endeavor Variable Annuity and The
Endeavor Platinum Variable Annuity, also issued by PFL Life. The amounts
reported herein represent the activity related to contract owners of The
Endeavor ML Variable Annuity only.

Investments

Net purchase payments received by the Mutual Fund Account for The Endeavor ML
Variable Annuity are invested in the portfolios of the Series Funds as selected
by the contract owner. Investments are stated at the closing net asset values
per share on December 31, 1999.

Realized capital gains and losses from the sale of shares in the Series Funds
are determined on the first-in, first-out basis. Investment transactions are
accounted for on the trade date (date the order to buy or sell is executed) and
dividend income is recorded on the ex-dividend date. Unrealized gains or losses
from the investments in the Series Funds are credited or charged to contract
owners' equity.

17
<PAGE>

PFL Endeavor VA Separate Account -
The Endeavor ML Variable Annuity

Notes to Financial Statements (continued)

1. Organization and Summary of Significant Accounting Policies (continued)

Dividend Income

Dividends received from the Series Funds investments are reinvested to purchase
additional mutual fund shares.

2. Investments

A summary of the mutual fund investments at December 31, 1999 follows:

<TABLE>
<CAPTION>
Net Asset
Number of Value Per Market
Shares Held Share Value Cost
------------------------------------------------------------------------
Endeavor Series Trust:
<S> <C> <C> <C> <C>
Endeavor Money Market Portfolio 6,167,550.240 $ 1.00 $ 6,167,550 $ 6,167,550
Endeavor Asset Allocation Portfolio 893,125.968 22.89 20,443,653 19,203,198
T. Rowe Price International Stock
Portfolio 633,618.913 20.88 13,229,963 10,249,334
Endeavor Value Equity Portfolio 571,431.111 19.99 11,422,908 12,131,862
Dreyfus Small Cap Value Portfolio 1,072,454.711 16.51 17,706,227 15,945,892
Dreyfus U. S. Government Securities
Portfolio 673,851.164 11.53 7,769,504 8,011,235
T. Rowe Price Equity Income Portfolio 1,160,862.663 19.50 22,636,822 22,987,938
T. Rowe Price Growth Stock Portfolio 1,029,324.878 28.74 29,582,797 25,231,545
Endeavor Opportunity Value Portfolio 513,293.414 12.56 6,446,965 6,342,048
Endeavor Enhanced Index Portfolio 1,826,329.518 18.16 33,166,144 29,753,981
Endeavor Select 50 Portfolio 337,292.467 15.76 5,315,729 3,785,802
Endeavor High Yield Portfolio 290,190.768 10.09 2,928,025 2,874,336
Endeavor Janus Growth Portfolio 866,538.265 95.37 82,641,754 56,632,501
Merrill Lynch Variable Series Funds, Inc.:
High Current Income Fund 927,626.444 9.59 8,895,938 9,770,346
Developing Capital Markets Focus Fund 198,261.286 10.34 2,050,022 1,592,451
Basic Value Focus Fund 1,274,539.708 13.60 17,333,740 17,945,855
</TABLE>

18
<PAGE>

PFL Endeavor VA Separate Account -
The Endeavor ML Variable Annuity

Notes to Financial Statements (continued)

2. Investments (continued)

The aggregate cost of purchases and proceeds from sales of investments were as
follows:

<TABLE>
<CAPTION>
Period ended December 31
1999 1998
------------------------------------- ----------------------------------
Purchases Sales Purchases Sales
------------------------------------- ----------------------------------
<S> <C> <C> <C> <C>
Endeavor Series Trust:
Endeavor Money Market
Portfolio $ 8,995,415 $5,113,007 $ 3,330,920 $1,552,747
Endeavor Asset Allocation
Portfolio 12,569,264 971,063 6,565,495 488,873
T. Rowe Price International Stock
Portfolio 5,374,107 722,472 3,762,010 726,552
Endeavor Value Equity Portfolio 6,116,187 1,700,474 6,327,438 457,072
Dreyfus Small Cap Value
Portfolio 8,326,631 1,250,831 7,249,271 1,104,863
Dreyfus U. S. Government Securities
Portfolio 5,375,106 2,051,925 4,896,767 665,314
T. Rowe Price Equity Income
Portfolio 11,430,634 1,114,035 10,450,104 870,863
T. Rowe Price Growth Stock
Portfolio 16,275,071 1,831,705 8,591,850 498,442
Endeavor Opportunity Value
Portfolio 2,189,923 1,824,390 4,960,140 309,396
Endeavor Enhanced Index
Portfolio 23,311,429 802,970 5,852,261 512,616
Endeavor Select 50 Portfolio 1,915,073 659,795 2,812,251 317,963
Endeavor High Yield Portfolio 2,629,224 131,769 396,057 23,695
Endeavor Janus Growth Portfolio 43,766,008 1,284,341 11,119,284 1,033,370
Merrill Lynch Variable Series
Funds, Inc.:
High Current Income Fund 3,285,004 1,372,212 7,063,232 768,564
Developing Capital Markets
Focus Fund 884,919 330,652 933,880 471,000
Basic Value Focus Fund 11,258,197 625,675 6,661,744 685,655
</TABLE>

19
<PAGE>

PFL Endeavor VA Separate Account -
The Endeavor ML Variable Annuity

Notes to Financial Statements (continued)

3. Contract Owners' Equity

A summary of deferred annuity contracts terminable by owners at December 31,
1999 follows:

<TABLE>
<CAPTION>
Return of Premium Death Benefit
------------------------------------------------------
Total
Accumulation Accumulation Contract
Subaccount Units Owned Unit Value Value
-------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Endeavor Money Market 547,317.665 $ 1.280646 $ 700,920
Endeavor Asset Allocation 1,189,043.271 3.160924 3,758,475
T. Rowe Price International Stock 1,186,858.494 2.001071 2,374,988
Endeavor Value Equity 961,278.161 2.115695 2,033,771
Dreyfus Small Cap Value 1,327,060.532 2.278888 3,024,222
Dreyfus U. S. Government Securities 1,667,132.394 1.255919 2,093,783
T. Rowe Price Equity Income 1,874,943.660 2.107761 3,951,933
T. Rowe Price Growth Stock 1,602,288.797 3.124914 5,007,015
Endeavor Opportunity Value 941,150.633 1.240246 1,167,258
Endeavor Enhanced Index 3,001,172.313 1.838549 5,517,802
Endeavor Select 50 447,744.356 1.534754 687,178
Endeavor High Yield 625,739.546 1.003083 627,669
Endeavor Janus Growth 292,621.286 50.054351 14,646,969
High Current Income 1,743,155.373 1.036111 1,806,102
Developing Capital Markets Focus 423,799.182 0.882824 374,140
Basic Value Focus 2,454,557.131 1.348411 3,309,752
</TABLE>

20
<PAGE>

PFL Endeavor VA Separate Account -
The Endeavor ML Variable Annuity

Notes to Financial Statements (continued)

3. Contract Owners' Equity (continued)

<TABLE>
<CAPTION>
5% Annually Compounding Death Benefit and Double
Enhanced Death Benefit
--------------------------------------------------------
Total
Accumulation Accumulation Contract
Subaccount Units Owned Unit Value Value
---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Endeavor Money Market 4,284,434.467 $ 1.275932 $ 5,466,647
Endeavor Asset Allocation 5,298,098.838 3.149277 16,685,181
T. Rowe Price International Stock 5,444,716.625 1.993671 10,854,974
Endeavor Value Equity 4,454,289.314 2.107887 9,389,139
Dreyfus Small Cap Value 6,466,464.732 2.270485 14,682,011
Dreyfus U. S. Government Securities 4,528,567.266 1.253314 5,675,717
T. Rowe Price Equity Income 8,897,631.087 2.099984 18,684,883
T. Rowe Price Growth Stock 7,893,482.303 3.113428 24,575,789
Endeavor Opportunity Value 4,272,750.319 1.235669 5,279,705
Endeavor Enhanced Index 15,093,778.210 1.831774 27,648,390
Endeavor Select 50 3,024,268.788 1.530432 4,628,438
Endeavor High Yield 2,298,661.602 1.000739 2,300,360
Endeavor Janus Growth 1,363,436.730 49.870147 67,994,790
High Current Income 6,868,040.687 1.032293 7,089,830
Developing Capital Markets Focus 1,905,288.618 0.879578 1,675,850
Basic Value Focus 10,438,672.328 1.343442 14,023,751
</TABLE>

A summary of changes in contract owners' account units follows:

<TABLE>
<CAPTION>
Endeavor Money Endeavor Asset T. Rowe Price Endeavor Dreyfus Small
Market Allocation International Value Equity Cap Value
Subaccount Subaccount Stock Subaccount Subaccount Subaccount
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Units outstanding at
January 1, 1998 423,914 707,039 1,815,704 881,579 1,731,434
Units purchased 1,487,348 1,149,076 746,202 1,592,370 1,532,802
Units redeemed and
transferred (64,473) 1,293,297 1,325,688 1,089,315 1,510,181
-----------------------------------------------------------------------------------------
Units outstanding at
December 31, 1998 1,846,789 3,149,412 3,887,594 3,563,264 4,774,417
Units purchased 3,501,097 1,567,446 1,969,645 1,236,337 1,791,102
Units redeemed and
transferred (516,134) 1,770,284 774,336 615,966 1,228,006
-----------------------------------------------------------------------------------------
Units outstanding at
December 31, 1999 4,831,752 6,487,142 6,631,575 5,415,567 7,793,525
=========================================================================================
</TABLE>

21
<PAGE>

PFL Endeavor VA Separate Account -
The Endeavor ML Variable Annuity

Notes to Financial Statements (continued)

3. Contract Owners' Equity (continued)

<TABLE>
<CAPTION>
T. Rowe
Dreyfus U. S. T. Rowe Price Endeavor Endeavor
Government Price Equity Growth Opportunity Enhanced
Securities Income Stock Value Index
Subaccount Subaccount Subaccount Subaccount Subaccount
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Units outstanding at
January 1, 1998 393,564 1,604,708 1,139,626 1,101,975 1,360,116
Units purchased 1,744,597 2,522,299 1,957,627 2,399,424 2,402,882
Units redeemed and
transferred 1,608,944 2,192,537 1,510,496 1,456,736 1,421,968
-------------------------------------------------------------------------------------------
Units outstanding at
December 31, 1998 3,747,105 6,319,544 4,607,749 4,958,135 5,184,966
Units purchased 2,058,292 2,521,366 3,146,319 866,656 7,196,921
Units redeemed and
transferred 390,303 1,931,665 1,741,703 (610,890) 5,713,064
-------------------------------------------------------------------------------------------
Units outstanding at
December 31, 1999 6,195,700 10,772,575 9,495,771 5,213,901 18,094,951
===========================================================================================
</TABLE>

<TABLE>
<CAPTION>
Developing
Endeavor High Capital
Endeavor Endeavor Janus Current Markets Basic Value
Select 50 High Yield Growth Income Focus Focus
Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Units outstanding at
January 1, 1998 - - 157,546 1,812,067 921,989 1,438,781
Units purchased 1,757,749 313,529 238,081 1,878,705 249,351 2,100,810
Units redeemed
and transferred 679,446 85,806 163,939 3,798,236 463,200 3,074,199
-------------------------------------------------------------------------------------------------------
Units outstanding at
December 31, 1998 2,437,195 399,335 559,566 7,489,008 1,634,540 6,613,790
Units purchased 782,406 1,576,601 680,673 934,974 404,915 3,570,339
Units redeemed
and transferred 252,413 948,465 415,819 187,214 289,633 2,709,100
-------------------------------------------------------------------------------------------------------
Units outstanding at
December 31, 1999 3,472,014 2,924,401 1,656,058 8,611,196 2,329,088 12,893,229
=======================================================================================================
</TABLE>

22
<PAGE>

PFL Endeavor VA Separate Account -
The Endeavor ML Variable Annuity

Notes to Financial Statements (continued)

4. Administrative, Mortality and Expense Risk Charges

Administrative charges include an annual charge of the lesser of 2% of the
policy value or $35 per contract which will commence on the first policy
anniversary of each contract owner's account. This charge is waived if the sum
of the premium payments less the sum of the partial withdrawals equals or
exceeds $50,000 on the policy anniversary. PFL Life also deducts a daily charge
equal to an annual rate of .15% of the contract owners' account for
administrative expenses. In addition, during the first seven policy years, PFL
Life deducts a daily distribution finance charge equal to an effective annual
rate of .15% of the contract owners' account.

PFL Life deducts a daily charge for assuming certain mortality and expense
risks. For the 5% Annually Compounding Death Benefit and Double Enhanced Death
Benefit, this charge is equal to an effective annual rate of 1.25% of the value
of the contract owners' individual account. For the Return of Premium Death
Benefit, the corresponding charge is equal to an effective annual rate of 1.10%
of the contract owners' individual account.

5. Taxes

23
<PAGE>

PART C OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS

(a) Financial Statements

All required financial statements are included in Part B of this
Registration Statement.

(b) Exhibits: The following exhibits are filed herewith:

(1) (a) Resolution of the Board of Directors of PFL Life
Insurance Company authorizing establishment of the Mutual
Fund Account. Note 1.

(b) Authorization Changing Name of the Mutual Fund Account.
Note 9.

(2) Not Applicable.

(3) (a) Principal Underwriting Agreement by and between PFL Life
Insurance Company, on its own behalf and on the behalf of
the Mutual Fund Account, and MidAmerica Management
Corporation. Note 3.

(a)(1) Principal Underwriting Agreement by and between PFL Life
Insurance Company, on its own behalf and on the behalf of
the Mutual Fund Account, and AFSG Securities Corporation.
Note 12.

(a)(2) Termination of Principal Underwriting Agreement by and
between AEGON USA Securities, Inc., formerly known as
MidAmerica Management Corporation, and PFL Life Insurance
Company on its own behalf and on the behalf of PFL
Endeavor Variable Annuity Account. Note 14.

(b) Form of Broker/Dealer Supervision and Sales Agreement by
and between AFSG Securities Corporation and the
Broker/Dealer. Note 12.
(4) (a) Form of Policy for the Endeavor Variable Annuity. Note 3.

(b) Form of Policy Endorsement (Required Distributions). Note
3.

(d) Form of Policy Endorsement (Nursing Care). Note 7.

(e) Form of Policy Endorsement (Death Benefit). Note 8.

(f) Form of Policy for the Endeavor Variable Annuity. Note
10.

(g) Form of Policy Endorsement (Nursing Care). Note 10.

(h) Form of Policy for the Endeavor FI Variable Annuity.
Note 11.

(i) Form of Policy Endorsement for the Endeavor FI (Nursing
Care). Note 11

(j) Form of Policy Endorsement for the Endeavor Variable
Annuity. (Nursing Care) Note 11.

(k) Form of Policy for the Endeavor Variable Annuity.
Note 12.

(l) Form of Policy Endorsement (New Separate Accounts and
Annuity Commencement Date). Note 12.

(m) Form of Policy Endorsement for the PFL Endeavor Variable
Annuity and the PFL Endeavor ML Variable Variable Annuity
<PAGE>

(GMIB) Note 14.

(n) Form of Policy Endorsement for the PFL Endeavor Variable
Annuity and the PFL Endeavor ML Variable Annuity (403(b)
Loan). Note 15.

(o) Form of Group Master Policy and Optional Riders for the
Endeavor Variable Annuity. Note 20

(p) Form of Group Certificate for the Endeavor Variable
Annuity. Note 20

(q) Form of Individual Policy for the Endeavor Variable
Annuity. Note 20

(5) (a) Form of Application for the Endeavor Variable Annuity.
Note 11.

(b) Form of Application for the Endeavor FI Variable Annuity.
Note 11.

(d) Form of Application for the PFL Endeavor Variable
Annuity. Note 12.

(e) Form of Application for the PFL Endeavor Variable
Annuity. Note 14.

(f) Form of Application for the PFL Endeavor ML Variable
Annuity. Note 14.

(g) Form of Group Master Application for the Endeavor
Variable Annuity. Note 20

(6) (a) Articles of Incorporation of PFL Life Insurance Company.
Note 3.

(b) Bylaws of PFL Life Insurance Company. Note 3.

(7) Not Applicable.

(8) (a) Participation Agreement by and between PFL Life Insurance
Company and Endeavor Series Trust. Note 3.

(b) Participation Agreement with WRL Series Fund, Inc. Note
5.

(b)(1) Amendment No. 12 to Participation Agreement among WRL
Series Fund, In., PFL Life Insurance Company, AUSA Life
Insurance Company, Inc., and Peoples Benefit Life
Insurance Company. Note 17

(8)(b)(2) Amendment No. 15 to Participation Agreement among WRL
Series Fund, Inc., PFL Life Insurance Company, AUSA Life
Insurance Company, Inc., and Peoples Benefit Life
Insurance Company. Note 22

(c) Administrative Services Agreement by and between PFL Life
Insurance Company and State Street Bank and Trust Company
(assigned to Vantage Computer Systems, Inc.). Note 2.

(d) Amendment and Assignment of Administrative Services
Agreement. Note 3.

(e) Second Amendment to Administrative Services Agreement.
Note 4.

(f) Termination Notice of Administrative Services Agreement
by and between PFL Life Insurance Company and Vantage
Computer Systems, Inc. Note 10.

(g) Participation Agreement by and between PFL Life Insurance
Company and Merrill Lynch Asset Management L.P. for the
Endeavor ML Variable Annuity Note 11.

(h) Amendment to Participation Agreement by and between PFL
Life Insurance Company and Endeavor Series Trust.
Note 11.
<PAGE>

(h)(1) Amendment No. 6 to Participation Agreement by and between
PFL Life Insurance Company, Endeavor Management Co. and
Endeavor Series Trust. Note 17

(8)(h)(2) Amendment to Schedule A of the Participation Agreement by
and between PFL Life Insurance Company and Endeavor
Series Trust. Note 22

(i) Participation Agreement by and between PFL Life Insurance
Company and Transamerica Variable Insurance Fund, Inc.
Note 20

(j) Participation Agreement by and between variable Insurance
Product Funds and Variable Insurance Products Fund II,
Fidelity Distributors Corporation, and PFL Life Insurance
Company, and Addendums thereto. Note 18

(j)(1) Amended Schedule A to Participation Agreement by and
between Variable Insurance Product Funds and Variable
Insurance Products Fund II, Fidelity Distributors
Corporation, and PFL Life Insurance Company. Note 20

(k) Participation Agreement between Variable Insurance
Products Fund III, Fidelity Distributors Corporation, and
PFL Life Insurance Company. Note 19

(k)(1) Amended Schedule A to Participation Agreement between
Variable Insurance Products Fund III, Fidelity
Distributors Corporation, and PFL Life Insurance Company.
Note 20

(8)(l) Participation Agreement by and between Janus Aspen Series
and PFL Life Insurance Company. Note 21

(8)(l)(1) Amendment No. 2 to Participation Agreement by and between
Janus Aspen Series and PFL Life Insurance Company. Note
22

1
<PAGE>

(9) (a) Opinion and Consent of Counsel. Note 2.

(b) Consent of Counsel. Note 2.

(10) (a) Consent of Independent Auditors. Note 22.

(b) Opinion and Consent of Actuary. Note 20.

(11) Not Applicable.

(12) Not Applicable.

(13) Performance Data Calculations. Note 16.

(14) Powers of Attorney (P.S. Baird, W.L. Busler, D.C.
Kolsrud, R.J. Kontz). Note 6. (Craig D. Vermie) Note 9.
(Brenda K. Clancy) Note 10. Larry N. Norman Note 14.

Note 1. Filed with the initial filing of this Form N-4 Registration
Statement (File No. 33-33085 on January 23, 1990.

Note 2. Filed with Pre-Effective Amendment No. 1 to this Form N-4
Registration Statement (File No. 33-33085) on April 9, 1990.

Note 3. Filed with Post-Effective Amendment No. 2 to this Form N-4
Registration Statement (File No. 33-33085) on April 1, 1991.

Note 4. Filed with Post-Effective Amendment No. 3 to this Form N-4
Registration Statement (File No. 33-33085) on April 29, 1992.

Note 5. Filed with Post-Effective Amendment No. 5 to this Form N-4
Registration Statement (File No. 33-33085) on April 30, 1993.

Note 6. Filed with Post-Effective Amendment No. 6 to this Form N-4
Registration Statement (File No. 33-33085) on January 28,
1994.

Note 7. Filed with Post-Effective Amendment No. 7 to this Form N-4
Registration Statement (File No. 33-33085) on March 29, 1994.

Note 8. Filed with Post-Effective Amendment No. 10 to this Form N-4
Registration Statement (File No. 33-33085) on April 27, 1995.

Note 9. Filed with Post-Effective Amendment No. 11 to this Form N-4
Registration Statement (File No. 33-33085) on April 24, 1996.

Note 10. Filed with Post-Effective Amendment No. 12 to this Form N-4
Registration Statement (File No. 33-33085) on February 28,
1997.

Note 11. Filed with Post-Effective Amendment No. 13 to this Form N-4
Registration Statement (File No. 33-33085) on April 29, 1997.

Note 12. Filed with Post-Effective Amendment No. 14 to this Form N-4
Registration Statement (File No. 33-33085) on February 27,
1998.

Note 13. Filed with Post-Effective Amendment No. 15 to this Form N-4
Registration Statement (File No. 33-33085) on April 29, 1998.

Note 14. Filed with Post-Effective Amendment No. 16 to this Form N-4
Registration Statement (File No. 33-33085) on September 28,
1998.

Note 15. Filed with Post-Effective Amendment No. 17 to this Form N-4
Registration Statement (File No. 33-33085) on January 25,
1999.

Note 16. Filed with Post-Effective Amendment No. 19 to this Form N-4
Registration Statement (File No. 33-33085) on April
29, 1999.

Note 17. Filed with the Initial filing of Form N-4 Registration
Statement for the Access Variable Annuity (File No. 333-94489)
on January 12, 2000.
<PAGE>

Note 18. Incorporated by reference to Pre-Effective Amendment No. 1 to
Form N-4 Registration Statement (File No. 333-07509) on
December 6, 1996.

Note 19. Incorporated by reference to Post-Effective Amendment No. 1 to
Form N-4 Registration Statement (File No. 333-07509) on April
29, 1997.

Note 20. Filed with Post-Effective Amendment No. 21 to this Form N-4
Registration Statement (File No. 33-33085) on April 27,
2000.

Note 21. Incorporated by reference to Post-Effective Amendment No. 3 to
Form N-4 Registration Statement (333-26209) on April 28,
2000.

Note 22. Filed herewith.

2
<PAGE>

ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR

<TABLE>
<CAPTION>
PRINCIPAL POSITIONS
NAME AND AND OFFICES WITH
BUSINESS ADDRESS DEPOSITOR
---------------- ---------
<S> <C>
Lary N. Norman Director, Chairman of
4333 Edgewood Road, N.E. the Board and President
Cedar Rapids, IA 52499

Patrick S. Baird Director, Senior Vice President
4333 Edgewood Road, N.E. and Chief Operating
Cedar Rapids, IA 52499 Officer

Craig D. Vermie Director
4333 Edgewood Road, N.E. Vice President,
Cedar Rapids, IA 52499 Secretary, and General
Counsel

Douglas C. Kolsrud Director, Senior Vice President,
4333 Edgewood Road, N.E. Chief Investment Officer
Cedar Rapids, IA 52499 and Corporate Actuary

Robert J. Kontz Vice President and
4333 Edgewood Road, N.E. Corporate Controller
Cedar Rapids, IA 52499

Bart Herbert, Jr Director and Executive
4333 Edgewood Road, N.E. Vice President
Cedar Rapids, IA 52499

Brenda K. Clancy Vice President
4333 Edgewood Road, N.E. Treasurer and Chief
Cedar Rapids, IA 52499 Financial Officer
</TABLE>

ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE
DEPOSITOR OR REGISTRANT

<TABLE>
<CAPTION>
Jurisdiction of Percent of Voting
Name Incorporation Securities Owned Business
---- --------------- ---------------- --------
<S> <C> <C> <C>
AEGON N.V. Netherlands 51.16% of Vereniging Holding company
AEGON Netherlands
Membership Association

Groninger Financieringen B.V. Netherlands 100% AEGON N.V. Holding company

AEGON Netherland N.V. Netherlands 100% AEGON N.V. Holding company

AEGON Nevak Holding B.V. Netherlands 100% AEGON N.V. Holding company

AEGON International N.V. Netherlands 100% AEGON N.V. Holding company

Voting Trust Trustees: Delaware Voting Trust
K.J. Storm
Donald J. Shepard H.B.
Van Wijk Dennis Hersch

AEGON U.S. Holding Corporation Delaware 100% Voting Trust Holding company

Short Hills Management Company New Jersey 100% AEGON U.S. Holding company
Holding Corporation

CORPA Reinsurance Company New York 100% AEGON U.S. Holding company
Holding Corporation

AEGON Management Company Indiana 100% AEGON U.S. Holding company
</TABLE>
<PAGE>

<TABLE>
<S> <C> <C> <C>
Holding Corporation

RCC North America Inc. Delaware 100% AEGON U.S. Holding company
Holding Corporation

AEGON USA, Inc. Iowa 100% AEGON U.S. Holding company
Holding Corporation

Transamerica Holding Company Delaware 100% AEGON USA, Inc. Holding Company

AEGON Funding Corp. Delaware 100% Transamerica Issue debt securities-net
Holding Company proceeds used to make
loans to affiliates

First AUSA Life Insurance Maryland 100% AEGON USA, Inc. Insurance holding company
Company

AUSA Life Insurance New York 82.33% First AUSA Life Insurance
Company, Inc. Insurance Company
17.67% Veterans Life
Insurance Company

Life Investors Insurance Iowa 100% First AUSA Life Ins. Co. Insurance
Company of America

Life Investors Alliance, LLC Delaware 100% LIICA Purchase, own, and hold the
equity interest of other entities

Great American Insurance Iowa 100% LIICA Marketing
Agency, Inc.

Bankers United Life Iowa 100% Life Investors Ins. Insurance
Assurance Company Company of America

PFL Life Insurance Company Iowa 100% First AUSA Life Ins. Co. Insurance

AEGON Financial Services Minnesota 100% PFL Life Insurance Co. Marketing
Group, Inc.

AEGON Assignment Corporation Kentucky 100% AEGON Financial Administrator of structured
of Kentucky Services Group, Inc. settlements

AEGON Assignment Corporation Illinois 100% AEGON Financial Administrator of structured
Services Group, Inc. settlements

Southwest Equity Life Ins. Co. Arizona 100% of Common Voting Stock Insurance
First AUSA Life Ins. Co.

Iowa Fidelity Life Insurance Co. Arizona 100% of Common Voting Stock Insurance
First AUSA Life Ins. Co.

Western Reserve Life Assurance Ohio 100% First AUSA Life Ins. Co. Insurance
Co. of Ohio

WRL Series Fund, Inc. Maryland Various Mutual fund

WRL Investment Services, Inc. Florida 100% Western Reserve Life Provides administration for
Assurance Co. of Ohio affiliated mutual fund

WRL Investment Florida 100% Western Reserve Life Registered investment advisor
Management, Inc. Assurance Co. of Ohio

ISI Insurance Agency, Inc. California 100% Western Reserve Life Insurance agency
And Subsidiaries Assurance Co. of Ohio

ISI Insurance Agency Alabama 100% ISI Insurance Agency, Inc. Insurance Agency
of Alabama, Inc.

ISI Insurance Agency Ohio 100% ISI Insurance Agency, Inc. Insurance agency
of Ohio, Inc.

ISI Insurance Agency Massachusetts 100% ISI Insurance Agency Inc. Insurance Agency
of Massachusetts, Inc.

ISI Insurance Agency Texas 100% ISI Insurance Agency, Inc. Insurance agency
of Texas, Inc.
</TABLE>

3
<PAGE>

<TABLE>
<S> <C> <C> <C>
ISI Insurance Agency Hawaii 100% ISI Insurance Insurance agency
of Hawaii, Inc. Agency, Inc.

ISI Insurance Agency New Mexico 100% ISI Insurance Insurance agency
New Mexico, Inc. Agency, Inc.

AEGON Equity Group, Inc. Florida 100% Western Reserve Life Insurance Agency
Assurance Co. of Ohio

Monumental General Casualty Co. Maryland 100% First AUSA Life Ins. Co. Insurance

United Financial Services, Inc. Maryland 100% First AUSA Life Ins. Co. General agency

Bankers Financial Life Ins. Co. Arizona 100% First AUSA Life Ins. Co. Insurance

The Whitestone Corporation Maryland 100% First AUSA Life Ins. Co. Insurance agency

Cadet Holding Corp. Iowa 100% First AUSA Life Holding company
Insurance Company

Monumental General Life Puerto Rico 51% First AUSA Life Insurance
Insurance Company of Insurance Company
Puerto Rico 49% Baldrich & Associates
of Puerto Rico

AUSA Holding Company Maryland 100% AEGON USA, Inc. Holding company

Monumental General Insurance Maryland 100% AUSA Holding Co. Holding company
Group, Inc.

Trip Mate Insurance Agency, Inc. Kansas 100% Monumental General Sale/admin. of travel
Insurance Group, Inc. insurance

Monumental General Maryland 100% Monumental General Provides management srvcs.
Administrators, Inc. Insurance Group, Inc. to unaffiliated third party
administrator

Executive Management and Maryland 100% Monumental General Provides actuarial consulting
Consultant Services, Inc. Administrators, Inc. services

Monumental General Mass Maryland 100% Monumental General Marketing arm for sale of
Marketing, Inc. Insurance Group, Inc. mass marketed insurance
coverages

AUSA Financial Markets, Inc. Iowa 100% AUSA Holding Co. Marketing

Transamerica Capital, Inc. California 100% AUSA Holding Co. Broker/Dealer

Endeavor Management Company California 100% AUSA Holding Co. Investment Management

Universal Benefits Corporation Iowa 100% AUSA Holding Co. Third party administrator

Investors Warranty of Iowa 100% AUSA Holding Co. Provider of automobile
America, Inc. extended maintenance
contracts

Massachusetts Fidelity Trust Co. Iowa 100% AUSA Holding Co. Trust company

Money Services, Inc. Delaware 100% AUSA Holding Co. Provides financial counseling
for employees and agents of
affiliated companies

ADB Corporation Delaware 100% Money Services, Inc. Special purpose limited
Liability company

ORBA Insurance Services, Inc. California 10.56% Money Services, Inc. Insurance agency

Zahorik Company, Inc. California 100% AUSA Holding Co. Broker-Dealer

ZCI, Inc. Alabama 100% Zahorik Company, Inc. Insurance agency

Zahorik Texas, Inc. Texas 100% Zahorik Company, Inc. Insurance agency
</TABLE>
<PAGE>

<TABLE>
<S> <C> <C> <C>
Long, Miller & Associates, L.L.C. California 33-1/3% AUSA Holding Co. Insurance agency

AEGON Asset Management Delaware 100% AUSA Holding Co. Registered investment advisor
Services, Inc.

InterSecurities, Inc. Delaware 100% AUSA Holding Co. Broker-Dealer

Associated Mariner Financial Michigan 100% InterSecurities, Inc. Holding co./management
Group, Inc. services

Associated Mariner Ins. Agency Massachusetts 100% Associated Mariner Insurance agency
of Massachusetts, Inc. Agency, Inc.

Associated Mariner Agency Ohio 100% Associated Mariner Insurance agency
Ohio, Inc. Agency, Inc.

Associated Mariner Agency Texas 100% Associated Mariner Insurance agency
Texas, Inc. Agency, Inc.

Idex Investor Services, Inc. Florida 100% AUSA Holding Co. Shareholder services

Idex Management, Inc. Delaware 100% AUSA Holding Co. Investment advisor

IDEX Mutual Funds Massachusetts Various Mutual fund

Diversified Investment Delaware 100% AUSA Holding Co. Registered investment advisor
Advisors, Inc.

Diversified Investors Securities Delaware 100% Diversified Investment Broker-Dealer
Corp. Advisors, Inc.
</TABLE>
<PAGE>

<TABLE>
<S> <C> <C> <C>
George Beram & Company, Inc. Massachusetts 100% Diversified Investment Employee benefit and
Advisors, Inc. actuarial consulting

AEGON USA Securities, Inc. Iowa 100% AUSA Holding Co. Broker-Dealer (De-registered)

Creditor Resources, Inc. Michigan 100% AUSA Holding Co. Credit insurance

CRC Creditor Resources Canada 100% Creditor Resources, Inc. Insurance agency
Canadian Dealer Network Inc.

Weiner Agency, Inc. Maryland 100% Creditor Resources, Inc. Insurance agency

AEGON USA Investment Iowa 100% AUSA Holding Co. Investment advisor
Management, Inc.

AEGON USA Realty Iowa 100% AUSA Holding Co. Provides real estate
Advisors, Inc. administrative and real
estate investment services

AEGON USA Real Estate Delaware 100% AEGON USA Realty Real estate and mortgage
Services, Inc. Advisors, Inc. holding company

QSC Holding, Inc. Delaware 100% AEGON USA Realty Real estate and financial
Advisors, Inc. software production and sales

LRA, Inc. Iowa 100% AEGON USA Realty Real estate counseling
Advisors, Inc.

Landauer Associates, Inc. Delaware 100% AEGON USA Realty Real estate counseling
Advisors, Inc.

Landauer Realty Associates, Inc. Texas 100% Landauer Associates, Inc. Real estate counseling

Realty Information Systems, Inc. Iowa 100% AEGON USA Realty Information Systems for
Advisors, Inc. real estate investment
management

USP Real Estate Investment Trust Iowa 12.89% First AUSA Life Ins. Co. Real estate investment trust
13.11% PFL Life Ins. Co.
4.86% Bankers United Life
Assurance Co.

RCC Properties Limited Iowa AEGON USA Realty Advisors, Limited Partnership
Partnership Inc. is General Partner and 5%
owner.

Commonwealth General Delaware 100% AEGON USA, Inc. Holding company
Corporation ("CGC")

AFSG Securities Corporation Pennsylvania 100% CGC Broker-Dealer

Benefit Plans, Inc. Delaware 100% CGC TPA for Peoples Security Life
Insurance Company

Durco Agency, Inc. Virginia 100% Benefit Plans, Inc. General agent

Capital 200 Block Corporation Delaware 100% CGC Real estate holdings

Capital Real Estate Delaware 100% CGC Furniture and equipment
Development Corporation lessor

Commonwealth General. Kentucky 100% CGC Administrator of structured
Assignment Corporation settlements

Diversified Financial Products Inc. Delaware 100% CGC Provider of investment,
marketing and admin. services
to ins. cos.

Monumental Agency Group, Inc. Kentucky 100% CGC Provider of srvcs. to ins. cos.

PB Investment Advisors, Inc. Delaware 100% CGC Registered investment advisor
(de-registered)
</TABLE>
<PAGE>

<TABLE>
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Southlife, Inc. Tennessee 100% CGC Investment subsidiary

Commonwealth General LLC Turks & 100% CGC Special-purpose subsidiary
Caicos Islands

Ampac Insurance Agency, Inc. Pennsylvania 100% CGC Provider of management
(EIN 23-1720755) support services

Compass Rose Development Pennsylvania 100% Ampac Insurance Special-purpose subsidiary
Corporation Agency, Inc.

Financial Planning Services, Inc. Dist. Columbia 100% Ampac Insurance Special-purpose subsidiary
Agency, Inc.

Frazer Association Illinois 100% Ampac Insurance TPA license-holder
Consultants, Inc. Agency, Inc.

National Home Life Corporation Pennsylvania 100% Ampac Insurance Special-purpose subsidiary
Agency, Inc.

Valley Forge Associates, Inc. Pennsylvania 100% Ampac Insurance Furniture & equipment lessor
Agency, Inc.

Veterans Benefits Plans, Inc. Pennsylvania 100% Ampac Insurance Administrator of group
Agency, Inc. insurance programs

Veterans Insurance Services, Inc. Delaware 100% Ampac Insurance Special-purpose subsidiary
Agency, Inc.
</TABLE>
<PAGE>

<TABLE>
<S> <C> <C> <C>
Academy Insurance Group, Inc. Delaware 100% CGC Holding company

Academy Life Insurance Co. Missouri 100% Academy Insurance Insurance company
Group, Inc.

Pension Life Insurance New Jersey 100% Academy Life Insurance company
Company of America Insurance Company

FED Financial, Inc. Delaware 100% Academy Insurance Special-purpose subsidiary
Group, Inc.

Ammest Development Corp. Inc. Kansas 100% Academy Insurance Special-purpose subsidiary
Group, Inc.

Ammest Insurance Agency, Inc. California 100% Academy Insurance General agent
Group, Inc.

Ammest Massachusetts Massachusetts 100% Academy Insurance Special-purpose subsidiary
Insurance Agency, Inc. Group, Inc.

Ammest Realty, Inc. Pennsylvania 100% Academy Insurance Special-purpose subsidiary
Group, Inc.

Ampac, Inc. Texas 100% Academy Insurance Managing general agent
Group, Inc.

Ampac Insurance Agency, Inc. Pennsylvania 100% Academy Insurance Special-purpose subsidiary
(EIN 23-2364438) Group, Inc.

Force Financial Group, Inc. Delaware 100% Academy Insurance Special-purpose subsidiary
Group, Inc.

Force Financial Services, Inc. Massachusetts 100% Force Fin. Group, Inc. Special-purpose subsidiary

Military Associates, Inc. Pennsylvania 100% Academy Insurance Special-purpose subsidiary
Group, Inc.

NCOAA Management Company Texas 100% Academy Insurance Special-purpose subsidiary
Group, Inc.

NCOA Motor Club, Inc. Georgia 100% Academy Insurance Automobile club
Group, Inc.

Unicom Administrative Pennsylvania 100% Academy Insurance Provider of admin. services
Services, Inc. Group, Inc.

Unicom Administrative Germany 100% Unicom Administrative Provider of admin. services
Services, GmbH Services, Inc.

Capital General Development Delaware 100% CGC Holding company
Corporation

Monumental Life Maryland 73.23% Capital General Insurance company
Insurance Company Development Company
26.77% First AUSA Life
Insurance Company

AEGON Special Markets Maryland 100% Monumental Life Marketing company
Group, Inc. Insurance Company

Peoples Benefit Life Missouri 3.7% CGC Insurance company
Insurance Company 20.0% Capital Liberty, L.P.
76.3% Monumental Life
Insurance Company

Veterans Life Insurance Co. Illinois 100% Peoples Benefit Insurance company
Life Insurance Company

Peoples Benefit Services, Inc. Pennsylvania 100% Veterans Life Ins. Co. Special-purpose subsidiary

Coverna Direct Insurance Maryland 100% Peoples Benefit Insurance agency
Insurance Services, Inc. Life Insurance Company
</TABLE>

<PAGE>

<TABLE>
<S> <C> <C> <C>
Ammest Realty Corporation Texas 100% Monumental Life Special purpose subsidiary
Insurance Company

JMH Operating Company, Inc. Mississippi 100% Monumental Life Real estate holdings
Insurance Company

Capital Liberty, L.P. Delaware 99.0% Monumental Life Holding Company
Insurance Company
1.0% CGC

Transamerica Corporation Delaware 100% AEGON NV Major interest in insurance
and finance

Transamerica Pacific Insurance Hawaii 100% Transamerica Corp. Life insurance
Company, Ltd.

TREIC Enterprises, Inc. Delaware 100% Transamerica Corp. Investments

ARC Reinsurance Corporation Hawaii 100% Transamerica Corp. Property & Casualty Ins.

Transamerica Management, Inc. Delaware 100% ARC Reinsurance Corp. Asset management

Inter-America Corporation California 100% Transamerica Corp. Insurance Broker
</TABLE>

<PAGE>

<TABLE>
<S> <C> <C> <C>
Pyramid Insurance Company, Ltd. Hawaii 100% Transamerica Corp. Property & Casualty Ins.

Pacific Cable Ltd. Bmda. 100% Pyramid Ins. Co., Ltd. Sold 25% of TC Cable, Inc.
stock in 1998

Transamerica Business Tech Corp. Delaware 100% Transamerica Corp. Telecommunications and
data processing

Transamerica CBO I, Inc. Delaware 100% Transamerica Corp. Owns and manages a pool of
high-yield bonds

Transamerica Corporation (Oregon) Oregon 100% Transamerica Corp. Name holding only-Inactive

Transamerica Finance Corp. Delaware 100% Transamerica Corp. Commercial & Consumer
Lending & equip. leasing

TA Leasing Holding Co., Inc. Delaware 100% Transamerica Fin. Corp. Holding company

Trans Ocean Ltd. Delaware 100% TA Leasing Hldg Co. Inc. Holding company

Trans Ocean Container Corp. Delaware 100% Trans Ocean Ltd. Intermodal Leasing
("TOCC")

SpaceWise Inc. Delaware 100% TOCC Intermodal leasing

Trans Ocean Container
Finance Corp. Delaware 100% TOCC Intermodal leasing

Trans Ocean Leasing
Deutschland GmbH Germany 100% TOCC Intermodal leasing

Trans Ocean Leasing PTY Ltd. Austria 100% TOCC Intermodal leasing

Trans Ocean Management S.A. Switzerland 100% TOCC Intermodal leasing

Trans Ocean Regional
Corporate Holdings California 100% TOCC Holding company

Trans Ocean Tank Services Corp. Delaware 100% TOCC Intermodal leasing

Transamerica Leasing Inc. Delaware 100% TA Leasing Holding Co. Leases & Services intermodal
equipment

Transamerica Leasing Holdings Delaware 100% Transamerica Leasing Inc. Holding Company
Inc. ("TLHI")

Greybox Logistics Services Inc. Delaware 100% TLHI Intermodal Leasing

Greybox L.L.C. Delaware 100% TLHI Intermodal freight container
interchange facilitation
service

Transamerica Trailer France 100% Greybox L.L.C. Leasing
Leasing S.N.C.

Greybox Services Limited U.K. 100% TLHI Intermodal Leasing

Intermodal Equipment, Inc. Delaware 100% TLHI Intermodal leasing

Transamerica Leasing N.V. Belg. 100% Intermodal Equipment Inc. Leasing

Transamerica Leasing SRL Italy 100% Intermodal Equipment Inc. Leasing

Transamerica Distribution Delaware 100% TLHI Provided door-to-door
Services, Inc. services for the domestic
transportation of temperature-
sensitive products

Transamerica Leasing Belg. 100% TLHI Leasing
Coordination Center

Transamerica Leasing do Braz. 100% TLHI Container Leasing
</TABLE>
<PAGE>

<TABLE>
<S> <C> <C> <C>
Brasil Ltda.

Transamerica Leasing GmbH Germany 100% TLHI Leasing

Transamerica Leasing Limited U.K. 100% TLHI Leasing

ICS Terminals (UK) Limited U.K. 100% Transamerica. Leasing
Leasing Limited

Transamerica Leasing Pty. Ltd. Australia 100% TLHI Leasing

Transamerica Leasing (Canada) Inc. Canada 100% TLHI Leasing

Transamerica Leasing (HK) Ltd. H.K. 100% TLHI Leasing

Transamerica Leasing S. Africa 100% TLHI Intermodal leasing
(Proprietary) Limited

Transamerica Tank Container Australia 100% TLHI The Australian (domestic)
Leasing Pty. Limited leasing of tank containers

Transamerica Trailer Holdings I Inc. Delaware 100% TLHI Holding company

Transamerica Trailer Holdings II, Inc. Delaware 100% TLHI Holding company
</TABLE>
<PAGE>

<TABLE>
<S> <C> <C> <C>
Transamerica Trailer Holdings III, Inc. Delaware 100% TLHI Holding company

Transamerica Trailer Leasing AB Swed. 100% TLHI Leasing

Transamerica Trailer Leasing AG Swetzerland 100% TLHI Leasing

Transamerica Trailer Leasing A/S Denmark 100% TLHI Leasing

Transamerica Trailer Leasing GmbH Germany 100% TLHI Leasing

Transamerica Trailer Leasing Belgium 100% TLHI Leasing
(Belgium) N.V.

Transamerica Trailer Leasing Netherlands 100% TLHI Leasing
(Netherlands) B.V.

Transamerica Trailer Spain S.A. Spain 100% TLHI Leasing

Transamerica Transport Inc. New Jersey 100% TLHI Dormant

Transamerica Commercial Delaware 100% Transamerica Fin. Corp. Holding company for
Finance Corporation, I ("TCFCI") Commercial/consumer
finance subsidiaries

Transamerica Equipment Financial Delaware 100% TCFCI
Services Corporation

BWAC Credit Corporation Delaware 100% TCFCI

BWAC International Corporation Delaware 100% TCFCI

BWAC Twelve, Inc. Delaware 100% TCFCI Holding company for
premium finance subsidiaries

TIFCO Lending Corporation Illinois 100% BWAC Twelve, Inc. General financing & other
services in the US &
elsewhere

Transamerica Insurance Finance Maryland 100% BWAC Twelve, Inc. Provides insurance premium
Corporation ("TIFC") financing in the US with the
exception of CA and HI

Transamerica Insurance Finance Maryland 100% TIFC Provides Insurance premium
Company (Europe) financing in California

Transamerica Insurance Finance California 100% TIFC Disability ins. & holding co.
Corporation, California for various insurance
subsidiaries of Transamerica
Corporation

Transamerica Insurance Finance ON 100% TIFC Provides ins. premium
Corporation, Canada financing in Canada

Transamerica Business Credit Delaware 100% TCFCI Provides asset based lending
Corporation ("TBCC") leasing & equip. financing

Transamerica Mezzanine Delaware 100% TBCC Holds investments in several
Financing, Inc. joint ventures/partnerships

Transamerica Business Advisory Grp. Delaware 100% TBCC

Bay Capital Corporation Delaware 100% TBCC Special purpose company for
the purchase of real estate tax
liens

Coast Funding Corporation Delaware 100% TBCC Special purpose company for
the purchase of real estate tax
liens

Transamerica Small Business Delaware 100% TBCC
Capital, Inc. ("TSBC")
</TABLE>
<PAGE>

<TABLE>
<S> <C> <C> <C>
Emergent Business Capital Delaware 100% TSBC
Holdings, Inc.

Gulf Capital Corporation Delaware 100% TBCC Special purpose company for
the purchase of real estate tax
liens

Direct Capital Equity Investment, Inc. Delaware 100% TBCC Small business loans

TA Air East, Corp Delaware 100% TBCC Special purpose corp. which
hold an ownership interest
or leases aircraft

TA Air I, Corp. Delaware 100% TBCC Special purpose corp. which
hold an ownership interest
or leases aircraft

TA Air II, Corp. Delaware 100% TBCC Special purpose corp. which
hold an ownership interest
or leases aircraft

TA Air III, Corp. Delaware 100% TBCC special purpose corp. which
hold an ownership interest
or leases aircraft
</TABLE>
<PAGE>

<TABLE>
<S> <C> <C> <C>
TA Air IV, Corp. Delaware 100% TBCC Special purpose corp. which
hold an ownership interest
or leases aircraft

TA Air V, Corp. Delaware 100% TBCC Special purpose corp. which
hold an ownership interest
or leases aircraft

TA Air VI, Corp. Delaware 100% TBCC Special purpose corp. which
hold an ownership interest
or leases aircraft

TA Air VII, Corp. Delaware 100% TBCC Special purpose corp. which
hold an ownership interest or
leases aircraft

TA Air VIII, Corp. Delaware 100% TBCC Special purpose corp. which
hold an ownership interest or
leases aircraft

TA Air IX, Corp. Delaware 100% TBCC Special purpose corp. which
hold an ownership interest
or leases aircraft

TA Air X, Corp. Delaware 100% TBCC Special purpose corp. which
hold an ownership interest
or leases aircraft

TA Air XI, Corp. Delaware 100% TBCC Special purpose corp. which
hold an ownership interest
or leases aircraft

TA Air XII, Corp. Delaware 100% TBCC Special purpose corp. which
hold an ownership interest
or leases aircraft

TA Air XIII, Corp. Delaware 100% TBCC Special purpose corp. which
hold an ownership interest
or leases aircraft

TA Air XIV, Corp. Delaware 100% TBCC Special purpose corp. which
hold an ownership interest
or leases aircraft

TA Air XV, Corp. Delaware 100% TBCC Special purpose corp. which
hold an ownership interest
or leases aircraft

TA Marine I Corp. Delaware 100% TBCC Special purpose corp. which
hold an ownership interest or
leases barges or ships

TA Marine II Corp. Delaware 100% TBCC Special purpose corp. which
hold an ownership interest or
leases barges or ships

TBC I, Inc. Delaware 100% TBCC Special purpose corp.

TBC II, Inc. Delaware 100% TBCC Special purpose corp.

TBC III, Inc. Delaware 100% TBCC Special purpose corp.

TBC IV, Inc. Delaware 100% TBCC Special purpose corp.

TBC V, Inc. Delaware 100% TBCC Special purpose corp.

TBC VI, Inc. Delaware 100% TBCC Special purpose corp.

TBC Tax I, Inc. Delaware 100% TBCC Special purpose co. for the
</TABLE>
<PAGE>

<TABLE>
<S> <C> <C> <C>
purchase of real estate tax lien

TBC Tax V, Inc. Delaware 100% TBCC Special purpose co. for the
purchase or real estate tax lien

TBC Tax VI, Inc. Delaware 100% TBCC Special purpose co. for the
purchase or real estate tax lien

TBC Tax VII, Inc. Delaware 100% TBCC Special purpose co. for the
purchase or real estate tax lien

TBC Tax VIII, Inc. Delaware 100% TBCC Special purpose co. for the
purchase of real estate tax lien

TBC Tax IX, Inc. Delaware 100% TBCC Special purpose co. for the
purchase of real estate tax lien
</TABLE>
<PAGE>

<TABLE>
<S> <C> <C> <C>
The Plain Company Delaware 100% TBCC Special purpose corp. which
hold an ownership interest or
leases aircraft.

Transamerica Distribution Delaware 100% TCFCI Holding corp. for inventory,
Finance Corporation ("TDFC") comm. Leasing, retail finance
comm. Recovery service and
accounts

Transamerica Accounts Holding Corp. Delaware 100% TDFC

Transamerica Commercial Delaware 100% TDFC Wholesale floor plan for
Finance Corporation ("TCFC") appliances, electronics,
computers, office equip. and
marine equipment.

Transamerica Acquisition Canada 100% TCFC Holding company
Corporation, Canada

Transamerica Distribution Finance Delaware 100% TCFC
Corporation - Overseas, Inc.
("TDFCO")

TDF Mauritius Limited Mauritius 100% TDFCO Mauritius holding company
of our Indian Joint Venture

Inventory Funding Trust Delaware 100% TCFC

Inventory Funding Company, LLC Delaware 100% Inventory Funding Trust

TCF Asset Management Corporation Colorado 100% TCFC A depository for foreclosed
real and personal property

Transamerica Joint Ventures, Inc. Delaware 100% TCFC To enter into general partner-
ships for the ownership of
comm. & finance business

Transamerica Inventory Delaware 100% TDFC Holding co. for inventory
Finance Corporation ("TIFC") finance subsidiaries

Transamerica GmbH, Inc. Delaware 100% TIFC Commercial lending in
Germany

Transamerica Fincieringsmaatschappij
B.V. Netherlands 100% Trans. GmbH, Inc. Commercial lending in
Europe

BWAC Seventeen, Inc. Delaware 100% TIFC Holding co. for principal
Canadian operation, Trans-
America Comm. Finance
Corp, Canada

Transamerica Commercial ON 100% BWAC Seventeen, Inc. Shell corp.- Dormant
Finance Canada, Limited

Transamerica Commercial Canada 100% BWAC Seventeen, Inc. Commercial finance
Finance Corporation, Canada

BWAC Twenty-One, Inc. Delaware 100% TIFC Holding co. for United
Kingdom operation, Trans-
America Comm. Finance
Limited

Transamerica Commercial U.K. 100% BWAC Twenty-One Inc. Commercial lending in the
Finance Limited ("TCFL") United Kingdom.

Whirlpool Financial Corporation 100% TCFL Inactive commercial finance
Polska Spzoo Company in Poland

Transamerica Commercial U.K. 100% BWAC Twenty-One Inc. Holding Company
Holdings Limited
</TABLE>
<PAGE>

<TABLE>
<S> <C> <C> <C>
Transamerica Commercial Finance U.K. 100% Trans. Commercial
Limited Holdings Limited

Transamerica Commercial Finance France 100% BWAC Twenty-One Inc. Carries out factoring trans-
France S.A. actions in France & abroad

Transamerica GmbH Inc. Delaware 100% BWAC Twenty-One Inc. Holding co. for Transamerica
Financieringsmaatschappij
B.V.

Transamerica Retail Financial Delaware 100% TIFC Provides retail financing
Services Corporation ("TRFSC")

Transamerica Bank, NA Delaware 100% TRFSC Bank (Credit Cards)

Transamerica Consumer Finance Delaware 100% TRFSC Consumer finance holding
Holding Company ("TCFHC") company

Transamerica Mortgage Company Delaware 100% TCFHC Consumer mortgages

Transamerica Consumer Mortgage Delaware 100% TCFHC Securitization company
Receivables Company

Metropolitan Mortgage Company Florida 100% TCFHC Consumer mortgages
</TABLE>
<PAGE>

<TABLE>
<S> <C> <C> <C>
Easy Yes Mortgage, Inc. Florida 100% Metropolitan Mtg. Co. No active business/Name
holding only

Easy Yes Mortgage, Inc. Georgia 100% Metropolitan Mtg. Co. No active business/Name
holding only

First Florida Appraisal Services, Inc. Georgia 100% Metropolitan Mtg. Co. Appraisal and inspection
services

First Georgia Appraisal Services, Inc. Georgia 100% First FL App. Srvc, Inc. Appraisal services

Freedom Tax Services, Inc. Florida 100% Metropolitan Mtg. Co. Property tax information
services

J.J. & W. Advertising, Inc. Florida 100% Metropolitan Mtg. Co. Advertising and marketing
services

J.J. & W. Realty Corporation Florida 100% Metropolitan Mtg. Co. To hold problem REO
properties

Liberty Mortgage Company of Florida 100% Metropolitan Mtg. Co. No active business/Name
Ft. Myers, Inc. holding only

Metropolis Mortgage Company Florida 100% Metropolitan Mtg. Co. No active business/Name
holding only

Perfect Mortgage Company Florida 100% Metropolitan Mtg. Co. No active business/Name
holding only

Transamerica Vendor Financial Srvc. Delaware 100% TDFC Provides commercial lease

Transamerica Distribution Finance 100% TCFCI
Corporation de Mexico ("TDFCM")

TDF de Mexico Mexico 100% TDFCM

Transamerica Corporate Services 100% TDFCM
De Mexico

Transamerica Home Loan California 100% TFC Consumer mortgages

Transamerica Lending Company Delaware 100% TFC Consumer lending

Transamerica Financial Products, Inc. California 100% Transamerica Corp. Service investments

Transamerica Insurance Corporation California 100% Transamerica Corp. Provides insurance premium
of California ("TICC") financing in California

Arbor Life Insurance Company Arizona 100% TICC Life insurance, disability
insurance

Plaza Insurance Sales Inc. California 100% TICC Casualty insurance placement

Transamerica Advisors, Inc. California 100% TICC Retail sale of investment
advisory services

Transamerica Annuity Services Corp. New Mexico 100% TICC Performs services required for
structured settlements

Transamerica Financial Resources, Inc. Delaware 100% TICC Retail sale of securities
products

Financial Resources Insurance Texas 100% Transamerica Fin. Res. Retail sale of securities
Agency of Texas products

TBK Insurance Agency of Ohio, Inc. Ohio 100% Transamerica Fin. Res. Variable insurance contract
sales in state of Ohio

Transamerica Financial Resources Alabama 100% Transamerica Fin. Res. Insurance agent & broker
Agency of Alabama, Inc.

Transamerica Financial Resources Ins. Massachusetts 100% Transamerica Fin. Res. Insurance agent & broker
</TABLE>
<PAGE>

<TABLE>
<S> <C> <C> <C>
Agency of Massachusetts, Inc.

Transamerica International Insurance Delaware 100% TICC Holding & administering
Services, Inc. ("TIIS") foreign operations

Home Loans and Finance Ltd. U.K. 100% TIIS Inactive

Transamerica Occidental Life California 100% TICC Licensed in all forms of life
Insurance Company ("TOLIC") insurance, accident and
sickness insurance

NEF Investment Company California 100% TOLIC Real estate development

Transamerica Life Insurance and N. Carolina 100% TOLIC Writes life and pension ins.
Annuity Company ("TLIAC") originally incorporated in CA
April 14, 1966

Transamerica Assurance Company Missouri 100% TLIAC Life and disability insurance

Gemini Investments, Inc. Delaware 100% TLIAC Investment subsidiary

Transamerica Life Insurance Company Canada 100% TOLIC Sells individual life insurance
of Canada & investment products in all
provinces and territories of
Canada
</TABLE>
<PAGE>

<TABLE>
<S> <C> <C> <C>
Transamerica Life Insurance Company New York 100% TOLIC Licensed in NY to market life
of New York insurance, annuities and
health
insurance

Transamerica South Park Delaware 100% TOLIC Provide market analysis of
Resources, Inc. certain undeveloped land
holdings held by TOLIC

Transamerica Variable Insurance Maryland 100% TOLIC Mutual Fund
Fund, Inc.

USA Administration Services, Inc. Kansas 100% TOLIC Third party administrator

Transamerica Products, Inc. California 100% TICC Parent co. of various
subsidiary corp. which are
formed to be co-general
partners of proprietary limited

Transamerica Securities Sales Corp. Maryland 100% Transamerica Prod. Inc. Retail sale of the variable life
ins. and variable annuity
products of the Transamerica
life companies

Transamerica Service Company Delaware 100% Transamerica Prod. Inc. Passive loss tax service for
Lloyd's U.S. names

Transamerica Intellitech, Inc. Delaware 100% TICC Real estate information and
technology services

Transamerica International Delaware 100% TICC Investments
Holdings, Inc.

Transamerica Investment Services, Inc. Delaware 100% TICC Investment adviser

Transamerica Income Shares, Inc. Maryland 100% Trans. Invest. Srvc. Inc. Transamerica investment
services

Transamerica LP Holdings Corp. Delaware 100% TICC Limited partnership
Investment (initial
limited partner
of Transamerica
Delaware, L.P.)

Transamerica Real Estate Tax Service N/A 100% TICC Real estate tax reporting and
(A Division of Transamerica Corp) processing services

Transamerica Realty Services, Inc. Delaware 100% TICC Responsible for real estate
investments for Transamerica

Bankers Mortgage Company of CA California 100% Transamerica Realty Srv. Holds bank account and owns
certain residual investments in
certain French real estate
projects which are managed
special purpose company for
the purchase of real estate tax
liens.

Pyramid Investment Corporation Delaware 100% Transamerica Realty Srv. Owns office buildings in San
Francisco and other properties

The Gilwell Company California 100% Transamerica Realty Srv. Ground lessee of 517
Washington Street,
San Francisco

Transamerica Affordable Housing, Inc. California 100% Transamerica Realty Srv. Owns general partnership
interests in low-income
housing tax credit
partnerships

Transamerica Minerals Company California 100% Transamerica Realty Srv. Owner and lessor of oil and
gas properties
</TABLE>
<PAGE>

<TABLE>
<S> <C> <C> <C>
Transamerica Oakmont Corporation California 100% Transamerica Realty Srv. General partner in
Transamerica/Oakmont
Retirement Associates

Transamerica Senior Properties, Inc. Delaware 100% TICC Owns congregate care and
assisted living retirement
Properties

Transamerica Senior Living, Inc. Delaware 100% Trans. Sr. Prop. Inc. Manages congregate care and
assisted living retirement
properties.
</TABLE>
<PAGE>

ITEM 27. NUMBER OF POLICYOWNERS

As of December 31, 1999, there were 31,174 Owners of the
Policies.

ITEM 28. INDEMNIFICATION

The Iowa Code (Sections 490.850 et. seq.) provides for permissive
indemnification in certain situations, mandatory indemnification in other
situations, and prohibits indemnification in certain situations. The Code also
specifies procedures for determining when indemnification payments can be made.

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

ITEM 29. PRINCIPAL UNDERWRITER

AFSG Securities Corporation
4333 Edgewood Road, N.E.
Cedar Rapids, IA 52499-0001

The directors and officers of
AFSG Securities Corporation
are as follows:(5)

<S> <C>
Larry N. Norman Ann Spaes
Director and President Director and Vice President

Frank A. Camp Darin Smith
Secretary Assistant Vice President
and Assistant Secretary

Lisa Wachendorf Linda Gilmer
Director, Vice President and Treasurer/Controller
Compliance Officer and Chief

Thomas R. Moriarty Robert Warner
Vice President Assistant Compliance
Officer

Priscilla Hechler Emily Bates
Assistant Vice President and Assistant Treasurer
Assistant Secretary

Thomas Pierpan Clifton Flenniken
Assistant Vice President and Assistant Treasurer
Assistant Secretary
</TABLE>
_____________________
/5/ The principal business address of each person listed is AFSG Securities
Corporation, 4333 Edgewood Road, N.E., Cedar Rapids, IA 52499-0001.

13
<PAGE>

Commissions and Other Compensation Received by Principal Underwriter.

AFSG Securities Corporation, the broker/dealer, received $30,348,568.76 and
$13,075,039.78 from the Registrant for the year ending December 31, 1999 and for
the period from May 1, 1998 through December 31, 1998 respectively, for its
services in distributing the Policies. No other commission or compensation was
received by the principal underwriter, directly or indirectly, from the
Registrant during the fiscal year.

AFSG Securities Corporation serves as the principal underwriter for the PFL
Endeavor Variable Annuity Account, the PFL Endeavor Platinum Variable Annuity
Account, the PFL Retirement Builder Variable Annuity Account, the PFL Life
Variable Annuity Account A, the PFL Life Variable Annuity Account C, the PFL
Life Variable Annuity Account D, PFL Life Variable Annuity Account E, the PFL
Wright Variable Annuity Account and the AUSA Endeavor Variable Annuity Account.
These accounts are separate accounts of PFL Life Insurance Company or AUSA Life
Insurance Company, Inc. AFSG Securities Corporation also serves as principal
underwriter for Separate Account I, Separate Account II, Separate Account IV and
Separate Account V of Peoples Benefit Life Insurance Company, and for Separate
Account B and Separate Account C of AUSA Life Insurance Company, Inc.

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS

The records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and Rules 31a-1 to 31a-3 promulgated thereunder,
are maintained by PFL Life Insurance Company at 4333 Edgewood Road, N.E., Cedar
Rapids, Iowa 52499.

ITEM 31. MANAGEMENT SERVICES.

All management Policies are discussed in Part A or Part B.

ITEM 32. UNDERTAKINGS

(a) Registrant undertakes that it will file a post-effective
amendment to this registration statement as frequently as necessary to ensure
that the audited financial statements in the registration statement are never
more than 16 months old for so long as Premiums under the Policy may be
accepted.

(b) Registrant undertakes that it will include either (i) a
postcard or similar written communication affixed to or included in the
Prospectus that the applicant can remove to send for a Statement of Additional
Information or (ii) a space in the Policy application that an applicant can
check to request a Statement of Additional Information.

(c) Registrant undertakes to deliver any Statement of Additional
Information and any financial statements required to be made available under
this Form promptly upon written or oral request to PFL at the address or phone
number listed in the Prospectus.

(d) PFL Life Insurance Company hereby represents that the fees and
charges deducted under the policies, in the aggregate, are reasonable in
relation to the services rendered, the expenses expected to be incurred, and the
risks assumed by PFL Life Insurance Company.

SECTION 403(B) REPRESENTATIONS

PFL represents that it is relying on a no-action letter dated November
28, 1988, to the American Council of Life Insurance (Ref. No. IP-6-88),
regarding Sections 22(e), 27(c)(1), and 27(d) of the Investment Company Act of
1940, in connection with redeemability restrictions on Section 403(b) Policies,
and that paragraphs numbered (1) through (4) of that letter will be complied
with.

STATEMENT PURSUANT TO RULE 6C-7: TEXAS OPTIONAL RETIREMENT PROGRAM

PFL and the Mutual Fund Account rely on 17 C.F.R. Sec. 270.6c-7, and
represent that the provisions of that Rule have been or will be complied with.

14
<PAGE>

SIGNATURES

As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant hereby certifies that this Amendment to the Registration
Statement meets the requirements for effectiveness pursuant to paragraph (b) of
Rule 485 and has caused this Registration Statement to be signed on its behalf,
in the City of Cedar Rapids and State of Iowa, on this 2nd day of October,
2000.

PFL ENDEAVOR VA SEPARATE
ACCOUNT

PFL LIFE INSURANCE COMPANY
Depositor

/s/ Larry N. Norman
----------------------------------
Larry N. Norman
President

As required by the Securities Act of 1933, this Registration Statement has been
signed by the following persons in the capacities and on the duties indicated.

Signatures Title Date
---------- ----- ----

/s/ Patrick S. Baird Director October 2, 2000
------------------------
Patrick S. Baird

/s/ Craig D. Vermie Director October 2, 2000
------------------------
Craig D. Vermie

/s/ Larry N. Norman Director October 2, 2000
------------------------
Larry N. Norman (Principal Executive Officer)

/s/ Bart Herbert, Jr. Director October 2, 2000
------------------------
Bart Herbert, Jr.

/s/ Douglas C. Kolsrud Director October 2, 2000
------------------------
Douglas C. Kolsrud

/s/ Robert J. Kontz Vice President and October 2, 2000
------------------------
Robert J. Kontz Corporate Controller

/s/ Brenda K. Clancy Treasurer October 2, 2000
------------------------
Brenda K. Clancy

<PAGE>

Registration No.
33-33085

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_______________

EXHIBITS

FORM N-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

FOR

PFL ENDEAVOR VA SEPARATE ACCOUNT

_______________
<PAGE>

EXHIBIT INDEX
-------------

Exhibit No. Description of Exhibit Page No.*
----------- ---------------------- ---------

(8)(b)(2) Amendment No. 15 to Participation Agreement among WRL
Series Fund, Inc., PFL Life Insurance Company, AUSA Life
Insurance Company, Inc. and Peoples Benefit Life
Insurance Company

(8)(h)(2) Amendment to Schedule A of the Participation Agreement
by and between PFL Life Insurance Company and Endeavor
Series Trust

(8)(l)(1) Amendment to Participation Agreement by and between
Janus Aspen Series and PFL Life Insurance Company

(10)(a) Consent of Independent Auditors

________________________
* Page numbers included only in manually executed original.