SEPARATE ACCOUNT VA C OF SMA LIFE ASSURANCE CO, 485BPOS, 1995-09-29

SEPARATE ACCOUNT VA C OF SMA LIFE ASSURANCE CO
485BPOS, 1995-09-29

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<PAGE>

File Number 2-53204
811-2558

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 39

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 30

Separate Account VA-C of SMA Life Assurance Company
---------------------------------------------------
(Exact Name of Trust)

SMA Life Assurance Company
--------------------------
(Name of Depositor)

440 Lincoln Street
Worcester, Massachusetts 01653
------------------------------
(Complete address of depositor's principal executive offices)

(508) 855-1000
(Registrant's telephone number including area code)

Abigail M. Armstrong, Secretary and Counsel
SMA Life Assurance Company
440 Lincoln Street
Worcester, Massachusetts 01653
(Name and complete address of agent for service)

It is proposed that this filing will become effective:

___ on _____________ pursuant to paragraph (a) of Rule 485
___ 60 days after filing pursuant to paragraph (a) of Rule 485
___ immediately after filing pursuant to paragraph (b) of Rule 485
X on October 1, 1995 pursuant to paragraph (b) of Rule 485
--- ---------------

VARIABLE ANNUITY POLICIES

Pursuant to Reg. Section 270.24f-2 of the Investment Company Act of 1940,
Registrant has registered an indefinite amount of its securities under the
Securities Act of 1933. The Rule 24f-2 Notice for the issuer's fiscal year
ended December 31, 1994 was filed on February 23, 1995.

<PAGE>

CROSS REFERENCE SHEET SHOWING LOCATION IN PROSPECTUS OF
ITEMS CALLED FOR BY FORM N-4

FORM N-4 ITEM NO. CAPTION IN PROSPECTUS
- ----------------- ---------------------
<S> <C>
1. . . . . . . . . . . . . . . . . Cover Page

2. . . . . . . . . . . . . . . . . "Special Terms"

3. . . . . . . . . . . . . . . . . "Summary"; "Annual and Transaction
Expenses"

4. . . . . . . . . . . . . . . . . Omitted

5. . . . . . . . . . . . . . . . . "Description of the Company, the
Separate Account and the Trust"

6. . . . . . . . . . . . . . . . . "Charges and Deductions:

7. . . . . . . . . . . . . . . . . "The Variable Annuity Policies"

8. . . . . . . . . . . . . . . . . Omitted

9. . . . . . . . . . . . . . . . . "Death Benefit"

10 . . . . . . . . . . . . . . . . "Purchase Payments"; "Computation
of Policy Values and Annuity
Payments"

11 . . . . . . . . . . . . . . . . "Surrender"; "Partial Redemption"

12 . . . . . . . . . . . . . . . . "Federal Tax Considerations"

13 . . . . . . . . . . . . . . . . "Legal Matters"

14 . . . . . . . . . . . . . . . . "Table of Contents of the Statement
of Additional Information"

<CAPTION>
FORM N-4 ITEM NO. CAPTION IN STATEMENT OF ADDITIONAL INFORMATION
- ----------------- ----------------------------------------------

15 . . . . . . . . . . . . . . . . "Cover Page"

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

17 . . . . . . . . . . . . . . . . "General Information and History"

18 . . . . . . . . . . . . . . . . "Services"

19 . . . . . . . . . . . . . . . . "Underwriters"

20 . . . . . . . . . . . . . . . . "Underwriters"

21 . . . . . . . . . . . . . . . . "Performance Information"

22 . . . . . . . . . . . . . . . . "Annuity Payments"

23 . . . . . . . . . . . . . . . . "Financial Statements"

</TABLE>
<PAGE>

PROSPECTUS SUPPLEMENT
Separate Accounts VA-A, VA-B, VA-C,VA-G, VA-H
(Supplement to prospectus dated May 1, 1995)

Effective October 1, 1995, the name of SMA Life Assurance Company has been
changed to Allmerica Financial Life Insurance and Annuity Company. The
attached prospectus is hereby amended to delete the name "SMA Life Assurance
Company" and to substitute Allmerica Financial Life Insurance and Annuity
Company.

* * *

Except in New York and Texas, the second paragraph under the caption "B.
Transfer Privilege" on page 21 is deleted and the following inserted:

Effective November 1, 1995, automatic transfers may also be made from policy
value allocated to the Company's General Account (a) to one or more of the
Separate Accounts or (b) in order to reallocate policy value among the
Separate Accounts. Automatic transfers from the General Account may be made
on a monthly, bimonthly, or quarterly basis, provided that: (i) the amount of
each monthly transfer cannot exceed 10% of policy value in the General
Account as of the date of the first transfer; (ii) each bimonthly transfer
cannot exceed 20% of policy value in the General Account as of the date of
the first transfer; (iii) each quarterly transfer cannot exceed 25% of
policy value in the General Account as of the date of the first transfer. No
other transfers are permitted from the General Account except during the
30-day period beginning on each policy anniversary. During that 30 day
annual "window" period, any amount (up to 100%) of policy value in the
General Account may be transferred.

In New York and Texas, the first sentence of the above is added as the
third paragraph under the caption.

OLDVA.STK SUPPLEMENT DATED OCTOBER 1, 1995

<PAGE>

This Prospectus describes individual variable annuity policies ("Policies")
offered for sale to individuals and businesses in connection with retirement
plans which may or may not qualify for special federal income tax treatment.
(For information about the tax status when used with a particular type of plan,
see "FEDERAL TAX CONSIDERATIONS".) The Following is a summary of information
about these Policies. More detailed information can be found under the
referenced captions in this Prospectus.

This Prospectus generally describes only the variable accumulation and variable
annuity aspects of the Policies, except where fixed values or fixed annuity
payments are specifically mentioned. Certain additional information about the
Policies is contained in a Statement of Additional Information, dated May 1,
1995 may be amended from time to time, which has been filed with the Securities
and Exchange Commission and is incorporated herein by reference. The Table of
Contents for the Statement of Additional Information is listed on page 14 of
this Prospectus. The Statement of Additional Information is available upon
request and without charge. To obtain the Statement of Additional Information,
fill out and return the attached request card or contact SMA Life Individual
Customer Services, SMA Life Assurance Company, 440 Lincoln Street, Worcester,
Massachusetts 01653.

THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY A CURRENT PROSPECTUS OF THE
ALLMERICA INVESTMENT TRUST.

INVESTORS SHOULD RETAIN A COPY OF THIS PROSPECTUS FOR FUTURE REFERENCE.

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

Dated May 1, 1995

<PAGE>

TABLE OF CONTENTS

SPECIAL TERMS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
ANNUAL AND TRANSACTION EXPENSES. . . . . . . . . . . . . . . . . . . . . . . .7
CONDENSED FINANCIAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . 11
PERFORMANCE INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION . . . . . . . . 14
WHAT IS AN ANNUITY?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
RIGHT TO REVOKE INDIVIDUAL RETIREMENT ANNUITY . . . . . . . . . . . . . . . 14
RIGHT TO REVOKE OR SURRENDER IN SOME STATES . . . . . . . . . . . . . . . . 14
DESCRIPTION OF THE COMPANY, THE SEPARATE ACCOUNTS, AND THE TRUST . . . . . . 15
VOTING RIGHTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
CHARGES AND DEDUCTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
A. Contingent Deferred Sales Charge. . . . . . . . . . . . . . . . . . 17
B. Charge for Administrative Expense . . . . . . . . . . . . . . . . . 19
C. Premium Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
D. Annual Charge Against Separate Account Assets . . . . . . . . . . 20

THE VARIABLE ANNUITY POLICIES. . . . . . . . . . . . . . . . . . . . . . . . 20
A. Purchase Payments . . . . . . . . . . . . . . . . . . . . . . . . . 21
B. Transfer Privilege. . . . . . . . . . . . . . . . . . . . . . . . . 21
C. Surrender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
D. Partial Redemption. . . . . . . . . . . . . . . . . . . . . . . . . 22
E. Death Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
F. The Spouse of the Annuitant as Beneficiary. . . . . . . . . . . . . 23
G. Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
H. Electing the Form of Annuity and Annuity Date . . . . . . . . . . . 24
I. Description of Variable Annuity Options . . . . . . . . . . . . . . 25
J. Norris Decision . . . . . . . . . . . . . . . . . . . . . . . . . . 26

<PAGE>

TABLE OF CONTENTS (continued)

K. Computation of Policy Values and Annuity Payments . . . . . . . . . 26

FEDERAL TAX CONSIDERATIONS. . . . . . . . . . . . . . . . . . . . . 28
A. Qualified and Non-Qualified Policies. . . . . . . . . . . . . . . . 28
B. Taxation of the Policies in General . . . . . . . . . . . . . . . . 28
C. Tax Withholding and Penalties . . . . . . . . . . . . . . . . . . . 29
D. Provisions Applicable to Qualified Employee Benefit Plans . . . . . 29
E. Qualified Employee Pension and Profit Sharing Trusts and Qualified
Annuity Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
F. Self-Employed Individuals . . . . . . . . . . . . . . . . . . . . . 30
G. Individual Retirement Account Plans . . . . . . . . . . . . . . . . 30
H. Simplified Employee Pensions. . . . . . . . . . . . . . . . . . . . 31
I. Public School Systems and Certain Tax-Exempt Organizations . . . . 31
J. Texas Optional Retirement Program . . . . . . . . . . . . . . . . . 31
K. Section 457 Plans for State Governments and Tax-Exempt Entities . . 31
L. Non-individual Owners . . . . . . . . . . . . . . . . . . . . . . . 32

REPORTS . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
CHANGES IN OPERATION OF THE SEPARATE ACCOUNTS . . . . . . . . . . . . . . . 32
CHANGE OF NAME OF THE SEPARATE ACCOUNTS . . . . . . . . . . . . . . . . . . 32
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
FURTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
APPENDIX A - MORE INFORMATION ABOUT THE GENERAL ACCOUNT . . . . . . . . . . 32
APPENDIX B - INFORMATION ABOUT DISCONTINUED POLICIES . . . . . . . . . . . . 33

<PAGE>

SPECIAL TERMS

As used in this Prospectus, the following terms have the indicated meanings:

ACCUMULATED VALUE: the sum of the value of all Accumulation Units in the
Separate Accounts and of the value of all accumulations in the General Account
of the Company then credited to the Policy, on any date before the date annuity
payments are to begin.

ACCUMULATION UNIT: a measure of the Policy Owner's interest in a Separate
Account before annuity payments begin.

ANNUITANT: the person designated in the Policy to whom the Annuity is to be
paid.

ANNUITY DATE: the date on which annuity payments begin.

ANNUITY UNIT: a measure of the value of the periodic annuity payments under the
Policy.

FIXED AMOUNT ANNUITY: an Annuity providing for payments which remain fixed in
amount throughout the annuity payment period.

GENERAL ACCOUNT: all the assets of the Company other than those held in a
Separate Account.

SEPARATE ACCOUNT: Separate Accounts VA-A, VA-B, VA-C, VA-G and VA-H, which are
separate investment accounts of the Company.

SURRENDER VALUE: the Accumulated Value of the Policy minus any contingent
deferred sales charge applicable upon surrender.

VALUATION DATE: a day on which the net asset value of the shares of any of the
Funds is determined and unit values of the Policies are determined. Valuation
dates currently occur on each day on which the New York Stock Exchange is open
for trading, and on such other days (other than a day during which no payment,
partial withdrawal, or surrender of a Policy was received) when there is a
sufficient degree of trading in a Fund's portfolio securities such that the
current net asset value of the Policies may be materially affected.

VALUATION PERIOD: the interval between two consecutive Valuation Dates.

VARIABLE ANNUITY: an Annuity providing for payments varying in amount in
accordance with the investment experience of the Growth Fund, the Investment
Grade Income Fund, or the Money Market Fund of Allmerica Investment Trust.

<PAGE>

SUMMARY

INVESTMENT OPTIONS. The Policies permit net purchase payments to be allocated
to Separate Account VA-A, Separate Accounts VA-B or VA-C, or Separate Accounts
VA-G or VA-H (called collectively the "Separate Accounts"), all separate
investment accounts of SMA Life Assurance Company ("Company"). Separate
Accounts VA-A, VA-C, and VA-H are available in connection with retirement plans
which meet the requirements of Sections 401, 403, 408, or 457 of the Internal
Revenue Code. Separate Accounts VA-A, VA-B, and VA-G are available in
connection with all other retirement plans. The Separate Accounts are
registered as unit investment trusts under the Investment Company Act of 1940,
as amended, (the "1940 Act") but such registration does not involve the
supervision of the management or investment practices or policies of the
Separate Accounts by the Securities and Exchange Commission (the "SEC"). For
information about the Separate Accounts and the Company, see "DESCRIPTION OF THE
COMPANY, THE SEPARATE ACCOUNTS, AND THE TRUST".

Each Separate Account invests its assets without sales charge in a corresponding
investment series of the Allmerica Investment Trust (the "Trust"). The Trust is
a no-load, open-end, diversified series investment company. Three of its
investment series are offered under the Policies: the Growth Fund, the
Investment Grade Income Fund, and the Money Market Fund (the "Funds"). Each of
the Funds operates pursuant to different investment objectives, discussed below.

The Trust was established for the purpose of providing a vehicle for the
investment of assets of various separate investment accounts established by
State Mutual Life Assurance Company of America ("State Mutual"), the Company, or
other affiliated life insurance companies. Shares of the Trust are not offered
to the general public but solely to such separate investment accounts.

The Policies also permit purchase payments to be allocated to accumulate at a
fixed rate of interest in the Company's General Account with net principal and
minimum interest guaranteed by the Company. For more information see APPENDIX
A, "MORE INFORMATION ABOUT THE GENERAL ACCOUNT".

INVESTMENT IN THE SEPARATE ACCOUNTS. The value of each Separate Account will
vary daily depending on the performance of the investments made by the
underlying Fund.

Separate Account VA-A invests in shares of the Growth Fund. The investment
objective of the Growth Fund is to achieve long-term growth of capital through
investments primarily in common stocks and securities convertible into common
stocks that are believed to represent significant underlying value in relation
to current market prices. Realization of current income, if any, is incidental
to this objective.

Separate Accounts VA-B and VA-C invest in shares of the Investment Grade Income
Fund. The Investment Grade Income Fund is invested in a diversified portfolio
of fixed income securities with the objective of seeking as high a level of
total return (including both income and realized and unrealized capital gains)
as is consistent with prudent investment management.

Separate Accounts VA-G and VA-H invest in shares of the Money Market Fund. The
Money Market Fund is invested in a diversified portfolio of high-quality,
short-term debt instruments with the objective of obtaining maximum current
income consistent with the preservation of capital and liquidity.

There can be no assurance that the investment objectives of the Funds can be
achieved or that the value of a Policy will equal or exceed the aggregate amount
of the purchase payments made under the Policy. For more information about the
investments of the Funds, see "DESCRIPTION OF THE COMPANY, THE SEPARATE
ACCOUNTS, AND THE TRUST".

Dividends or capital gains distributions received from a Fund are reinvested in
additional shares of that Fund, which are retained as assets of the Separate
Account.

TRANSFERS BETWEEN ACCOUNTS. The Policies permit amounts to be transferred among
the Separate Accounts and between the Separate Accounts and the General Account
of the Company prior to the Annuity Date, subject to certain limitations
described under "Transfer Privilege".

ANNUITY PAYMENTS. At retirement the owner of a Policy ("Policy Owner") may
select variable annuity payments based on one or more of the Separate Accounts,
fixed-amount annuity payments, or a combination of fixed-amount and variable
annuity payments. Fixed-amount annuity payments are guaranteed by the Company.

<PAGE>

See "THE VARIABLE ANNUITY POLICIES" for information about annuity payment
options, selecting the Annuity Date, and how annuity payments are calculated.

TYPES OF POLICIES. The Company offers two types of Policies -- Single Payment
Policies and Elective Payment Policies. These two types differ as to the minimum
initial purchase payment, the permissibility of subsequent payments, and
charges. Under Elective Payment Policies, purchase payments are not limited as
to frequency and number, but no payments may be submitted within one month of
the Annuity Date. Under Single Payment Policies, additional purchase payments
are permitted only during the first policy year.

REVOCATION RIGHTS. An individual purchasing a Policy intended to qualify as an
Individual Retirement Annuity ("IRA") may revoke the Policy at any time between
the date of the application and the date 10 days after receipt of the Policy.
In certain states any Policy owner may have special revocation rights. For more
information about revocation rights, see "RIGHT TO REVOKE INDIVIDUAL RETIREMENT
ANNUITY" and "RIGHT TO REVOKE OR SURRENDER IN SOME STATES".

PAYMENTS MINIMUMS AND MAXIMUMS. Under a Single Payment Policy, the minimum
payment is $10,000. During the first policy year only, the Company will permit
additional payments under a Single Payment Policy. Under an Elective Payment
Policy, the initial and each subsequent elective payment must be at least $50 if
made in connection with the monthly automatic payment plan, or a payroll
deduction plan. In all other instances the initial purchase payment under an
Elective Payment Policy must be at least $600 and subsequent payments must be at
least $50. However, in cases where the contribution on behalf of an employee
under an employer-sponsored retirement plan is less than $600 but more than $300
annually, the Company may issue a Policy on the employee, if the plan's average
annual contribution per eligible plan participant is at least $600.

The Company reserves the right to set maximum limits on the aggregate purchase
payments made under the Policy. In addition, the Internal Revenue Code imposes
maximum limits on contributions under qualified annuity plans. Because of such
maximum annual limits applicable to Section 408 annuities and because of the
minimum payment limitations imposed by the Company on single payment Policies,
Section 408 single payment annuities may be purchased only with "rollover
contributions", as defined by the Internal Revenue Code. See "FEDERAL TAX
CONSIDERATIONS".

CHARGES AND DEDUCTIONS. For a complete discussion of charges, see "CHARGES AND
DEDUCTIONS".

A. CONTINGENT DEFERRED SALES CHARGE. No sales charge is deducted from purchase
payments at the time the payments are made. However, depending on the length of
time the Policy has been in force, a contingent deferred sales charge may be
assessed for a surrender, partial redemption, or election of an annuity for a
specified number of years.

B. ADMINISTRATIVE EXPENSE. Deductions for administrative expense differ for
Single Payment and Elective Payment Policies. No administrative charge is
deducted from a Single Payment Policy. Under Elective Payment Policies, a
policy fee of $9 will be deducted semi-annually from the Accumulated Value under
the Policy for administrative expense when the Accumulated Value is less than
$10,000.

C. PREMIUM TAXES. A deduction for state premium taxes, if any, may be made as
described under "Premium Taxes". Premium taxes currently range from 0% to 3.50%.

D. SEPARATE ACCOUNT ASSET CHARGE. A daily charge, currently equivalent to
1.25% per annum, is made on the value of each Separate Account at each Valuation
Date. The charge is retained by the Company for certain risks and expenses it
assumes.

SURRENDER OR PARTIAL REDEMPTION. At any time before the Annuity Date, the
Policy Owner has the right either to surrender the Policy in full and receive
its current value, minus any applicable contingent deferred sales charge, or to
redeem a portion of the Policy's value subject to certain limits and any
applicable contingent deferred sales charge. There may be tax
consequences for surrender or redemptions. For further information, see
"Surrender" and "Partial Redemption", "Contingent Deferred Sales Charge", and
"FEDERAL TAX CONSIDERATIONS".

DEATH BENEFIT. If the Annuitant should die before the Annuity Date, a death
benefit will be paid to the beneficiary. This death benefit is equal to the
greater of (1) the Accumulated Value under the Policy or (2) of the sum of the
gross payment(s) made under the Policy minus the amount of all partial
redemptions. See "Death Benefit".

<PAGE>

SALES OF POLICIES. The Policies are sold by agents of the Company who are
registered representatives of Allmerica Investments, Inc., a broker-dealer
affiliate of the Company. The Policies also may be purchased from certain other
broker-dealers which are members of the National Association of Securities
Dealers, Inc., and whose representatives are authorized by applicable law to
sell variable annuity policies. See "Sales Expense".

The Company has outstanding certain variable annuity policies which are no
longer sold: individual qualified and non-qualified stipulated payment
contracts (discontinued March 31, 1971); all individual qualified and
non-qualified flexible payment, elective payment and single payment policies
sold prior to February 12, 1980; and group policies. This Prospectus does not
fully describe those contracts or the rights of policy owners thereunder but
does contain certain financial, historical and other information. For additional
information, see "INFORMATION ABOUT DISCONTINUED POLICIES".

ANNUAL AND TRANSACTION EXPENSES

The purpose of the following tables is to assist the Policy Owner in
understanding the various costs and expenses that a Policy Owner will bear
directly or indirectly under the Elective Payment Policies and the Single
Payment Policies. The tables reflect charges under the Policies, expenses of the
Separate Accounts, and expenses of the Funds of Allmerica Investment Trust. In
addition to the charges and expenses described below, in some states premium
taxes may be applicable.

The Examples demonstrate the cumulative expenses which would be paid by the
Policy Owner at 1-year, 3-year, 5-year, and 10-year intervals under certain
contingencies. Each Example assumes a $1,000 investment in a Separate Account
and a 5% annual return on assets. Because the expenses of the Funds of
Allmerica Investment Trust differ, separate Examples are used to illustrate the
expenses incurred by a Policy Owner on an investment in Separate Account VA-A,
in Separate Accounts VA-B and VA-C, and in Separate Accounts VA-G and VA-H.
Similarly, Examples are given for both Elective Payment Policies and Single
Payment Policies because their charges differ.

<TABLE>
<CAPTION>
Elective Payment Single Payment
---------------- --------------
Policies Policies
-------- --------
Policy Owner Transaction Expenses
---------------------------------
<S> <C> <C> <C>
Contingent Deferred Sales Charge Policy Year
The charge (as a percentage of amount surrendered 1-3 7% 5%
in excess of the amount, if any, which may be 4 6% 4%
surrendered free of charge) will be assessed upon 5 5% 3%
surrender, redemption, or annuitization under a 6 4% 2%
period certain option, within the indicated time 7 3% 1%
periods. 8 2% 0%
9 1% 0%

Annual Policy Fee
-----------------
A $9 semi-annual policy fee is deducted only when the
Accumulated Value under an Elective Payment Policy is $18 None
$10,000 or less.

Separate Account Annual Expenses
--------------------------------
(as a percentage of average account value)

Mortality and Expense Risk Fees 1.15% 1.15%

Other Separate Account Fees 0.10% 0.10%

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

Total Separate Account Annual Expenses 1.25% 1.25%

<PAGE>

Investment Grade
Growth Fund Income Fund Money Market Fund

Fund Annual Expenses
--------------------

Management Fees 0.48% 0.42% 0.31%

Other Fund Expenses 0.08% 0.16% 0.14%
----- ----- -----

Total Fund Annual Expenses 0.56% 0.58% 0.45%
</TABLE>

Under the Management Agreement with the Trust, the investment manager, Allmerica
Investment Management Company, Inc. ("Allmerica Investment") has declared a
voluntary expense limitation of 1.20% of average net assets for the Growth Fund,
1.00% for the Investment Grade Income Fund, and 0.60% for the Money Market Fund.
The declaration of a voluntary expense limitation in any year does not bind
Allmerica Investment to declare future expense limitations with respect to any
Fund.

THE INFORMATION GIVEN UNDER THE FOLLOWING EXAMPLES SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR
LESSER THAN THOSE SHOWN.

<TABLE>
<CAPTION>
Separate Account VA-A: GROWTH FUND

Elective Payment Policies#
(Accumulated Value less than $10,000) Single Payment Policies
------------------------------------- -----------------------

<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
(a) If you surrender your policy
or annuitize* under a period
certain option at the end of
the applicable period:

You would pay the
following expenses on a
$1,000 investment,
assuming 5% annual
return on assets:
$94 $136 $167 $248 $65 $106 $130 $213

(b) If you annuitize* under a
life option at the end of the
applicable time period or if
you do NOT surrender or
annuitize your policy:

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

$22 $67 $115 $248 $18 $57 $98 $213

<FN>
- -------------------------------------

# The expense information given in the Examples for Elective Payment
Policies is applicable to an Elective Payment Policy with an Accumulated Value
less than $10,000. Except for the contingent deferred sales charge, charges
under an Elective Payment Policy with an Accumulated Value greater than $10,000
are the same as the charges under a Single Payment Policy. As a result, the
expense information given on line (b) for Single Payment Policies also applies
to Elective Payment Policies with an Accumulated Value greater than $10,000. On
line (a), the aggregate expenses incurred by a Policyowner on a $1,000
investment at the end of 1, 3, 5, and 10 years would be $91, $126, $151, and
$213, respectively.

A semi-annual policy fee of $9 is deducted only from an Elective Payment
Policy when its Accumulated Value is $10,000 or less. Pursuant to requirements
of the 1940 Act, the policy fee has been reflected in the Examples by a method
intended to show the "average" impact of the policy fee on an investment in the
Separate Account. The total policy fees collected under the Policies by the
Company in 1990 are divided by the total average net assets attributable to the
Elective Payment Policies which were subject to the charge. The resulting
percentage is 0.34%, and the amount of the policy fee is assumed to be $3.40 in
the Examples.

* The policy fee is not deducted after annuitization. No contingent
deferred sales charge is assessed at the time of annuitization in any policy
year under an option including a life contingency.

</TABLE>

<PAGE>

<TABLE>
<CAPTION>
Separate Account VA-B and VA-C: INVESTMENT GRADE INCOME FUND

Elective Payment Policies#
(Accumulated Value less than $10,000) Single Payment Policies
------------------------------------- -----------------------

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

$94 $136 $168 $250 $65 $107 $131 $215

(b) If you annuitize* under a
life option at the end of the
applicable time period or if
you do NOT surrender or
annuitize your policy:

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

$22 $68 $116 $250 $19 $58 $99 $215

<FN>
- -------------------------------------

* The policy fee is not deducted after annuitization. No contingent
deferred sales charge is assessed at the time of annuitization in any policy
year under an option including a life contingency.

</TABLE>

<PAGE>

<TABLE>
<CAPTION>
Separate Account VA-G and VA-H: MONEY MARKET FUND

Elective Payment Policies#
(Accumulated Value less than $10,000) Single Payment Policies
------------------------------------- -----------------------

<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
(a) If you surrender your
policy or annuitize* under
a period certain option at
the end of the applicable
period:

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

$93 $133 $162 $237 $64 $103 $124 $201

(b) If you annuitize* under a
life option at the end of
the applicable time period
or if you do NOT surrender
or annuitize your policy:

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

$21 $64 $110 $237 $17 $54 $92 $201

<FN>
- -------------------------------------

* The policy fee is not deducted after annuitization. No contingent
deferred sales charge is assessed at the time of annuitization in any policy
year under an option including a life contingency.

</TABLE>

<PAGE>

CONDENSED FINANCIAL INFORMATION
SMA Life Assurance Company
Separate Accounts - Non-Qualified
VA-A,VA-B,VA-G

<TABLE>
<CAPTION>
1994 1993 1992 1991 1990 1989 1988 1987 1986 12/31/85 4/26/85* 1984
---- ---- ---- ---- ---- ---- ---- ---- ---- -------- -------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Separate Account
VA-A
Non-Qualified
Net Asset Value:

Beginning of 5.382 5.107 4.827 3.477 3.519 2.826 2.36 2.327 1.951 1.699 1.568 1.574
Period

End of Period 5.324 5.382 5.107 4.827 3.477 3.519 2.826 2.36 2.327 1.951 1.699 1.568

Number of Units 6,979 8615 8796 6756 5226 3959 3536 4021 2769 2010 2124 2181
Outstanding at
End of Period
(in thousands)

Separate Account
VA-B
Non-Qualified
Net Asset Value:

Beginning of 3.374 3.084 2.882 2.495 2.331 2.072 1.932 1.929 1.75 1.55 1.497 1.325
Period

End of Period 3.234 3.374 3.084 2.882 2.495 2.331 2.072 1.932 1.929 1.75 1.55 1.497

Number of Units 2,619 3095 2963 2223 1935 1469 1223 1241 1092 890 841 869
Outstanding at
End of Period
(in thousands)

Separate Account
VA-G
Non-Qualified
Net Asset Value:

Beginning of 1.671 1.643 1.603 1.527 1.425 1.318 1.239 1.177 1.12 1.08 1.057 1.000#
Period

End of Period 1.716 1.671 1.643 1.603 1.527 1.425 1.318 1.239 1.177 1.12 1.08 1.057

Number of Units 1,037 1801 4266 4690 6618 3835 3131 1547 180 141 138 134
Outstanding at
End of Period
(in thousands)

<FN>
* The Separate Accounts were reorganized as unit investment trusts effective
April 29, 1985. April 26, 1985 was the last Valuation Date prior to the
reorganization

# From January 24, 1984 (date of inception) through May 7, 1984, SMA Life
Assurance Company (sponsor) was the holder of all units of the Separate
Account and inclusion of the per unit income and capital changes for that
period is not considered appropriate. Accordingly, only the per unit income
and capital changes subsequent to May 7, 1984 are reflected.

</TABLE>

<PAGE>

SMA Life Assurance Company
Separate Accounts - Non-Qualified
VA-A,VA-C,VA-H

Beginning of 5.646 5.358 5.064 3.648 3.691 2.965 2.476 2.441 2.047 1.782 1.645 1.755
Period

End of Period 5.586 5.646 5.358 5.064 3.648 3.691 2.965 2.476 2.441 2.047 1.782 1.645

Number of Units 24,341 29,955 30,048 25,116 20,557 16,499 14,094 14,612 9,926 6,468 6,476 6,185
Outstanding at
End of Period
(in thousands)

Separate Account
VA-C
Qualified
Net Asset Value:

Beginning of 3.043 3.111 2.906 2.519 2.353 2.091 1.951 1.950 1.771 1.570 1.518 1.337
Period

End of Period 3.262 3.043 3.111 2.906 2.519 2.353 2.091 1.951 1.950 1.771 1.570 1.518

Number of Units 6,476 7,969 7,092 6,321 4,835 3,865 2,969 2,930 4,349 2,486 2,008 1,949
Outstanding at
End of Period
(in thousands)

Separate Account
VA-H
Qualified
Net Asset Value:

Beginning of 1.685 1.650 1.616 1.540 1.437 1.329 1.249 1.187 1.129 1.089 1.066 1.00#
Period

End of Period 1.730 1.685 1.650 1.616 1.540 1.437 1.329 1.249 1.187 1.129 1.089 1.066

Number of Units 3,335 5,133 9,359 12,669 9,094 3,948 2,130 2,226 431 546 351 283
Outstanding at
End of Period
(in thousands)

<FN>
* The Separate Accounts were reorganized as unit investment trusts effective
April 29, 1985. April 26, 1985 was the last Valuation Date prior to the
reorganization

# From January 24, 1984 (date of inception) through March 30, 1984, SMA Life
Assurance Company (sponsor) was the holder of all units of the Separate
Account and inclusion of the per unit income and capital changes for that
period is not considered appropriate. Accordingly, only the per unit income
and capital changes subsequent to March 30, 1984 are reflected.

</TABLE>

<PAGE>

PERFORMANCE INFORMATION

For its Elective and Single Payment Annuity policies, the Company from time to
time may advertise the "total return" of the Separate Accounts and the "yield"
and "effective yield" of Separate Account VA-G or Separate Account VA-H. Both
the total return and yield figures are based on historical earnings and are not
intended to indicate future performance.

The "total return" of a Separate Account refers to the total of the income
generated by an investment in the Separate Account and of the changes in the
value of the principal (due to realized and unrealized capital gains or losses)
for a specified period, reduced by certain charges, and expressed as a
percentage of the investment.

The "yield" of Separate Account VA-G or Separate Account VA-H refers to the
income generated by an investment in the Separate Account over a seven-day
period (which period will be specified in the advertisement). This income is
then "annualized", by assuming that the income generated in the specific week is
generated over a 52-week period. This annualized yield is shown as a percentage
of the investment. The "effective yield" calculation is similar, but when
annualized, the income earned by an investment in the Separate Account is
assumed to be reinvested. Thus the "effective yield" will be slightly higher
than the "yield" because of the compounding effect of this assumed reinvestment.

The total return, yield, and effective yield figures are adjusted to reflect the
Separate Account's asset charges. The total return figures also reflect the
contingent deferred sales load which would be assessed if the investment were
completely redeemed at the end of the specified period. The $9 semi-annual
administrative charge under Elective Payment policies with an Accumulated Value
of $10,000 or less is not included in the calculations; if a policy is subject
to the charge, the performance with respect to a Separate Account would be
reduced to the extent by which a portion of the charge is assessed to the policy
value in that Separate Account.

The Company may also advertise supplemental total return performance
information. Supplemental total return refers to the total of (1) the income
generated by an investment in the Separate Account and (2) the changes of value
of the principal (due to realized and unrealized capital gains or losses),
adjusted by the Separate Account's annual asset charges, and expressed as a
percentage of the investment. Because it is assumed that the investment is NOT
redeemed at the end of the specified period, the contingent deferred sales load
is NOT included in the calculation of supplemental total return.

Performance information for a Separate Account may be compared, in reports and
promotional literature, to: (i) the Standard & Poor's 500 Stock Index ("S & P
500"), Dow Jones Industrial Average ("DJIA"), Shearson Lehman Aggregate Bond
Index or other unmanaged indices so that investors may compare a Separate
Account's results with those of a group of unmanaged securities widely regarded
by investors as representative of the securities markets in general; (ii) other
groups of variable annuity separate accounts or other investment products
tracked by Lipper Analytical Services, a widely used independent research firm
which ranks mutual funds and other investment products by overall performance,
investment objectives, and assets, or tracked by other services, companies,
publications, or persons, such as Morningstar, Inc., who rank such investment
products on overall performance or other criteria; or (iii) the Consumer Price
Index (measure for inflation) to assess the real rate of return from an
investment in the Separate Account. Unmanaged indices may assume the
reinvestment of dividends but generally do not reflect deductions for
administrative and management costs and expenses.

Performance information for any Separate Account reflects only the performance
of a hypothetical investment in the Separate Account during the particular time
period on which the calculations are based. Performance information should be
considered in light of the investment objectives and policies, characteristics
and quality of the portfolio of the Fund of the Trust in which the Separate
Account invests and the market conditions during the given time period, and
should not be considered as a representation of what may be achieved in the
future.

<PAGE>

STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS

GENERAL INFORMATION AND HISTORY. . . . . . . . . . . . . . . . . . . . . . . 2
TAXATION OF THE SEPARATE ACCOUNTS AND THE COMPANY. . . . . . . . . . . . . . 3
SERVICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
UNDERWRITERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ANNUITY PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
PERFORMANCE INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

WHAT IS AN ANNUITY?

In general, an annuity is a policy designed to provide a retirement income in
the form of monthly payments for the lifetime of the purchaser or an individual
chosen by the purchaser. The retirement income payments are called annuity
payments and the individual receiving the payments is called the Annuitant.
Annuity payments may begin immediately after a lump sum purchase is made or may
begin after an investment period during which the amount necessary to provide
the desired amount of retirement income is accumulated.

Under an annuity policy, the insurance company assumes a mortality risk and an
expense risk. The mortality risk arises from the insurance company's guarantee
that annuity payments will continue for the life of the Annuitant, regardless of
how long the Annuitant lives or how long all Annuitants as a group live. The
expense risk arises from its guarantee that charges will not be increased beyond
the limits specified in the policy, regardless of actual costs of operations.

The Policy Owner's purchase payments, less any applicable deductions, are
invested by the insurance company. After retirement, annuity payments are paid
to the Annuitant for life or for such other period chosen by the Policy Owner.
In the case of a "fixed" annuity, the value of these annuity payments is
guaranteed by the insurance company, which assumes the risk of making the
investments to enable it to make these guaranteed payments. For more
information about fixed annuities see APPENDIX A, "MORE INFORMATION ABOUT THE
GENERAL ACCOUNT".

With a variable annuity, the value of the Policy and the annuity payments are
not guaranteed but will vary depending on the investment performance of a
portfolio of securities. Any investment gains or losses are reflected in the
value of the Policy and in the annuity payments. If the portfolio increases in
value, the value of the Policy increases. If the portfolio decreases in value,
the value of the Policy decreases.

RIGHT TO REVOKE INDIVIDUAL RETIREMENT ANNUITY

An individual purchasing a Policy intended to qualify as an Individual
Retirement Annuity ("IRA") may revoke the Policy at any time between the date of
the application and the date 10 days after receipt of the Policy and receive a
refund of the entire purchase payment. In order to revoke the Policy, the
Policy Owner must mail or deliver the Policy (if it has already been received),
to the agent through whom the Policy was purchased, to the principal office of
the Company at 440 Lincoln Street, Worcester, Massachusetts 01653, or to any
local agency of the Company. Mailing or delivery must occur on or before 10
days after receipt of the Policy for revocation to be effective.

If on the date of revocation the Surrender Value of the Policy exceeds the total
purchase payment, the Company will treat the revocation request as a request for
surrender (see "Surrender") and will pay the Policy Owner the Surrender Value of
the Policy.

The Separate Accounts' liability under this provision is limited to the Policy
Owner's Accumulated value in each Separate Account on the date of cancellation.
Any additional amounts refunded to the Policy Owner will be paid by the Company.

RIGHT TO REVOKE OR SURRENDER IN SOME STATES

In Georgia, Indiana, Michigan, Missouri, New York, North Carolina, South
Carolina, Texas, Utah, Washington and West Virginia, any Policy Owner may
revoke the Policy at any time between the date of application and the date 10
days after receipt of the Policy and receive a refund of the entire purchase
price, as described under "RIGHT TO REVOKE INDIVIDUAL RETIREMENT ANNUITY",
above.

<PAGE>

In all other states, a Policy Owner may surrender the Policy at any time between
the date of application and the date 10 days after receipt of the Policy. The
Company will pay to the Policy Owner an amount equal to the sum of (i) the
difference between the premium paid, including fees, and any amount allocated to
a Separate Account and (ii) the Accumulated Value of the Policy (on the date the
surrender request is received by the Company) attributable to any amount
allocated to a Separate Account. If the Policy was purchased as an IRA, the IRA
revocation right described above may be utilized in lieu of the special
surrender right.

DESCRIPTION OF THE COMPANY, THE SEPARATE ACCOUNTS, AND THE TRUST

THE COMPANY - The Company is a life insurance company organized under the laws
of Delaware in July, 1974. Its Principal Office is located at 440 Lincoln
Street, Worcester, Massachusetts 01653, Telephone 508-855-1000. The Company is
subject to the laws of the state of Delaware governing insurance companies and
to regulation by the Commissioner of Insurance of Delaware. In addition, the
Company is subject to the insurance laws and regulations of other states and
jurisdictions in which it is licensed to operate. As of December 31, 1994, the
Company had over $4 billion in assets and over $25 billion of life insurance in
force. The Company is an indirect wholly-owned subsidiary of State Mutual Life
Assurance Company of America ("State Mutual"), 440 Lincoln Street, Worcester,
Massachusetts. State Mutual, organized under the laws of Massachusetts in 1844,
is the fifth oldest life insurance company in America. As of December 31, 1994,
State Mutual and its subsidiaries (including the Company) had over $10 billion
in combined assets and over $42 billion of life insurance in force.

THE SEPARATE ACCOUNTS. Separate Account VA-A, Separate Account VA-B, Separate
Account VA-C, Separate Account VA-G, and Separate Account VA-H are separate
investment accounts of the Company. The assets used to fund the variable
portions of the Policies are set aside in the Separate Accounts, and are kept
separate and apart from the general assets of the Company. Each Separate
Account is administered and accounted for as part of the general business of the
Company, but the income, capital gains, or capital losses of each Separate
Account are allocated to such Separate Account, without regard to other income,
capital gains, or capital losses of the Company. Under Delaware law, the assets
of each Separate Account may not be charged with any liabilities arising out of
any other business of the Company.

Separate Account VA-A was authorized by vote of the Board of Directors of the
Company on March 31, 1967. Separate Accounts VA-B and VA-C were authorized by
vote of the Board of Directors of the Company on July 30, 1974. Separate
Accounts VA-G and VA-H were authorized by vote of the Board of Directors of the
Company on February 24, 1983.

The Separate Accounts were organized originally as diversified management
investment companies. Each Separate Account invested directly in a diversified
portfolio of securities which was managed by a Board of Managers. Effective
April 29, 1985, each Separate Account converted to a unit investment trust
investing exclusively in shares of a particular Fund of Allmerica Investment
Trust, as described below. Each separate Account meets the definition of
"separate account" under federal securities laws.

THE TRUST. Allmerica Investment Trust, formerly SMA Investment Trust, is an
open-end, diversified management investment company registered under the 1940
Act. Such registration does not involve supervision by the SEC of the
investments or investment policy of the Funds.

The Trust was established by State Mutual as a Massachusetts business trust on
October 11, 1984, for the purpose of providing a vehicle for the investment of
assets of various separate investment accounts established by State Mutual, the
Company, or other affiliated life insurance companies. Three investment Funds
of the Trust are offered under the Policies: the Growth Fund, the Investment
Grade Income Fund, and the Money Market Fund. Each Fund of the Trust has a
different investment objective which it pursues through separate investment
policies.

Shares of the Funds of the Trust are currently issued to separate accounts of
the Company which issue variable annuity contracts or variable life insurance
policies ("mixed funding"). It is conceivable that in the future such mixed
funding may be disadvantageous for variable annuity Policy Owners or variable
life Policy Owners. Although the Company and the Trust do not currently foresee
any such disadvantages, the Trustees of the Trust intend to monitor events in
order to identify any material conflicts between such Policy Owners and to
determine what action, if any, should be taken. If the Trustees were to
conclude that separate funds should be established for the variable life and the
variable annuity separate accounts, the Company will bear the attendant
expenses.

<PAGE>

Below is a summary of investment objectives of the Funds of the Trust. MORE
DETAILED INFORMATION REGARDING THE INVESTMENT OBJECTIVES, RESTRICTIONS AND
RISKS, EXPENSES PAID BY THE FUNDS, AND OTHER RELEVANT INFORMATION REGARDING THE
TRUST AND ITS FUNDS MAY BE FOUND IN THE CURRENT PROSPECTUS FOR THE TRUST, WHICH
ACCOMPANIES THIS PROSPECTUS AND SHOULD BE READ CAREFULLY BEFORE INVESTING.
There can be no assurance that the investment objectives of the Funds can be
achieved or that the value of a Policy will equal or exceed the aggregate amount
of the purchase payments made under the Policy.

INVESTMENT OBJECTIVES AND POLICIES OF THE GROWTH FUND. Separate Account VA-A
invests solely in shares of the Growth Fund. The investment objective of the
Growth Fund is to achieve long-term growth of capital through investing
primarily in common stocks and securities convertible into common stocks that
are believed to represent significant underlying value in relation to current
market prices. Realization of current investment income, if any, is incidental
to this objective. The Growth Fund is not limited to investments in any
particular type of company, and may invest in any company which, in the opinion
of management, is likely to further its investment objectives. Investments may
include, but are not limited to, developing or well-established companies,
whether small or large. The Growth Fund proposes to keep its assets fully
invested, but may maintain reasonable amounts in cash or in high-grade,
short-term debt securities to meet current expenses and anticipated redemptions,
and during temporary periods pending investment in accordance with its policies.

The Growth Fund normally will invest substantially all of its assets in
equity-type securities, including common stocks, warrants, and those preferred
stocks and debt securities convertible into or carrying rights to purchase
common stock or to participate in earnings, and real estate securities to the
extent permitted by the Growth Fund's investment restrictions.

The Growth Fund may invest in both listed and unlisted securities. The Growth
Fund also may invest in foreign, as well as domestic, securities.

INVESTMENT OBJECTIVES AND POLICIES OF THE INVESTMENT GRADE INCOME FUND.
Separate Accounts VA-B and VA-C invest solely in shares of the Investment Grade
Income Fund. The objective of the Investment Grade Income Fund is to seek as
high a level of total return, which includes capital appreciation as well as
income, as is consistent with prudent investment management. The Fund will
invest in a diversified portfolio of investment-grade debt securities and money
market instruments. The Fund intends to be fully invested at all times, but
because of current or anticipated money market and economic conditions, fiscal
and monetary policies and trends in short and long-term interest rates and
yields, will invest in money market instruments and in debt securities of short,
intermediate, and long-term maturities in such proportions as from time to time,
in management's judgment, seem appropriate to best achieve its objective. The
Investment Grade Income Fund may also invest in financial futures contracts and
related options.

INVESTMENT OBJECTIVES AND POLICIES OF THE MONEY MARKET FUND. Separate Accounts
VA-G and VA-H invest solely in shares of the Money Market Fund. The investment
objective of the Money Market Fund is to obtain maximum current income
consistent with preservation of capital and liquidity.

The Money Market Fund seeks to achieve its objective by investing in high
quality money market instruments. The Money Market Fund will purchase
obligations that mature within 397 days from the date of purchase and will
manage the portfolio to maintain a dollar-weighted maturity of 90 days or less.
Pursuant to Rule 2a-7 under the Act, the assets of the Money Market Fund will be
valued based upon the amortized cost method.

INVESTMENT ADVISORY SERVICES. Allmerica Investment Management Company, Inc.
("Allmerica Investment"), an indirect wholly owned subsidiary of State Mutual,
serves as investment adviser of the Trust. Pursuant to a Management Agreement
between the Trust and Allmerica Investment, Allmerica Investment has entered
into agreements ("Sub-Adviser Agreements") with other investment advisers
("Sub-Advisers") under which each Sub-Adviser manages the investments of one or
more of the Funds. Miller, Anderson & Sherrerd is the Sub-adviser of the Growth
Fund. Allmerica Asset Management, Inc., an indirect wholly owned subsidiary of
State Mutual, is the Sub-Adviser of the Investment Grade Income Fund and the
Money Market Fund. For a more thorough discussion of the Management and
Sub-adviser Agreements or of the investment policies of the Funds, see the
Prospectus of the Trust.

VOTING RIGHTS

The Company will vote Fund shares held by each Separate Account in accordance
with instructions received from Policy Owners and, after the Annuity Date, from
Annuitants. Each person having a voting interest in

<PAGE>

a Separate Account will be provided with proxy materials of the underlying Fund
together with a form with which to give voting instructions to the Company.
Fund shares for which no timely instructions are received will be voted in
proportion to the instructions which are received.

The number of votes which a Policy Owner or Annuitant may cast will be
determined by the Company as of the record date established by the Fund.

During the accumulation period, the number of Fund shares attributable to each
Policy Owner will be determined by dividing the dollar value of the Separate
Account Accumulation Units credited to the Policy by the net asset value of one
Fund share.

During the annuity period, the number of Fund shares attributable to each
Annuitant will be determined by dividing the reserve held in each Separate
Account for the Annuitant's variable annuity by the net asset value of one Fund
share. Ordinarily, the Annuitant's voting interest in the Fund will decrease as
the reserve for the variable annuity is depleted.

CHARGES AND DEDUCTIONS

Deductions under the Policies and charges against the assets of the Separate
Accounts are described below. Other deductions and expenses paid out of the
assets of the Funds of the Trust are described in the Prospectus and Statement
of Additional Information of the Trust.

A. CONTINGENT DEFERRED SALES CHARGE. No charge for sales expense is deducted
from purchase payments at the time the payments are made. However, a contingent
deferred sales charge may be deducted from the Accumulated Value of the Policy
in the case of surrender and/or partial redemption of the Policy or at the time
annuity payments begin, within certain time limits described below.

For all Single Payment Policies, and after the first policy year for Elective
Payment Policies, up to 10% of the Accumulated Value of a Policy may be redeemed
each year without a contingent deferred sales charge. If more than one partial
redemption is made during the policy year, on each subsequent redemption the
Policy Owner may redeem free of charge an amount equal to 10% of the Accumulated
Value of the Policy at that time, less the total of any prior redemptions in the
same policy year to which no charge was applied. This right is not cumulative
from policy year to policy year. In the case of a total surrender of the
Policy, up to 10% of the Accumulated Value may not be subject to charge. The
rules concerning partial redemptions will apply. In the event that a redemption
is made in excess of the amount which may be redeemed free of charge, only the
excess (the "Excess Amount") will be subject to a surrender charge.

The charge is applied as a percentage of the Excess Amount redeemed, but in no
event will the total contingent deferred sales charges exceed a maximum limit of
8% of total gross purchase payments under an Elective Payment Policy or 6.5% of
the total gross purchase payments under a Single Payment Policy. Such total
charge equals the aggregate of all applicable contingent deferred sales charges
for surrender, partial redemptions, and annuitization (as described below).

CHARGES FOR SURRENDER AND PARTIAL REDEMPTION. If a Policy is surrendered, or if
an Excess Amount is redeemed, a contingent deferred sales charge is imposed if
the Policy has been in force for less than nine full policy years under an
Elective Payment Policy, or less than seven full policy years under a Single
Payment Policy.

The contingent deferred sales charges differ for Elective Payment and Single
Payment Policies:

<PAGE>

(1) For Elective Payment Policies:

Policy year in
which Surrender Charge as Percentage
or Partial of Excess
Redemption Occurs Amount Redeemed*
----------------- --------------------

1-3 7%
4 6%
5 5%
6 4%
7 3%
8 2%
9 1%

(2) For Single Payment Policies:

Policy year in
which Surrender Charge as Percentage
or Partial of Excess
Redemption Occurs Amount Redeemed*
----------------- --------------------

1-3 5%
4 4%
5 3%
6 2%
7 1%

* Subject to the maximum limit described above.

The charge is applied as a percentage of the Excess Amount. The amount redeemed
equals the amount requested by the Policy Owner plus the charge, if any.

In the case of a surrender, the amount received by the Policy Owner is equal to
the entire Accumulated Value under the Policy net of the contingent deferred
sales charge or any tax withholding, if applicable. Subject to the same rules
that are applicable to partial redemptions, up to 10% of the Accumulated Value
of the Policy will not be subject to the charge.

Where a Policy Owner who is trustee under a pension plan surrenders, in whole or
in part, a Policy on a terminating employee, the trustee will be permitted to
reallocate all or a part of the total Accumulated Value under the Policy to
other policies issued by the Company and owned by the trustee, with no deduction
for any otherwise applicable contingent deferred sales charge. Any such
reallocation will be at the unit values for the Separate Account(s) as of the
valuation date on which a written, signed request is received at the Company's
principal office.

No contingent deferred sales charge is deducted if any Policy is surrendered, or
if a portion of Accumulated Value is redeemed, after expiration of the time
periods shown in the tables above.

For further information on surrender and partial redemption, including minimum
requirements on amount redeemed and amount remaining under the Policy in the
case of partial redemption, and important tax considerations, see "Surrender"
and "Partial Redemption" under "THE VARIABLE ANNUITY POLICIES", and "FEDERAL TAX
CONSIDERATIONS".

CHARGE AT THE TIME ANNUITY PAYMENTS BEGIN. If a period certain option is chosen
(Option V or the comparable fixed annuity option), a contingent deferred sales
charge will be deducted from the Accumulated Value of the Policy if the Annuity
Date occurs at any time during the surrender charge period of nine full policy
years under Elective Payment Policies or seven full policy years under Single
Payment Policies. The charge is the same as that which would apply had the
policy been surrendered on the Annuity Date, subject to the maximum limitation
described above.

<PAGE>

No contingent deferred sales charge is imposed at the time of annuitization in
any policy year under an option involving a life contingency (Options I, II,
III, IV-A, IV-B or the comparable fixed annuity options).

If an owner of a fixed annuity policy issued by the Company wishes to elect a
variable annuity option, the Company may permit such owner to exchange, at the
time of annuitization, the fixed policy for a Policy offered in this Prospectus.
The proceeds of the fixed policy, minus any contingent deferred sales charge
applicable under the fixed policy will be applied towards the variable annuity
option desired by the owner. The policy years will be computed from the issue
date of the fixed policy for purposes of determining the applicability of any
contingent deferred sales charge under the Policy upon annuitization. The
number of Annuity Units under the option will be calculated using the Annuity
Unit values as of the 15th of the month preceding the Annuity Date.

SALES EXPENSE. The Company pays sales commissions on the purchase payments of
Elective and Single Payment Policies equal to 5% and 3%, respectively, to
registered representatives of Allmerica Investments, Inc. Managers who
supervise the agents will receive overriding commissions ranging up to no more
than 2% of purchase payments.

The Company intends to recoup the commissions and other sales expenses through a
combination of anticipated contingent deferred sales charges, described above,
and the investment earnings on amounts allocated to accumulate on a fixed basis
in excess of the interest credited on fixed accumulations by the Company. There
is no additional charge to Policy Owners or to the Separate Accounts. Any
contingent deferred sales charges assessed on a Policy will be retained by the
Company except for amounts it may pay to Allmerica Investments, Inc. for
services it performs and expenses it may incur as principal underwriter and
general distributor.

B. CHARGE FOR ADMINISTRATIVE EXPENSE. There is no administrative expense
charge deducted from a Single Payment Policy.

Under Elective Payment Policies, a $9 policy fee currently is deducted twice a
year, whenever the Accumulated Value under the Policy is $10,000 or less. No
fee is deducted when the Accumulated Value is greater than $10,000. The policy
fee will be deducted from the Accumulated Value of the Policy as of the fourth
Friday of March and September of each year. No charge will be made if the
Policy has been in force less than 90 days, or after the Annuity Date.

Where policy value has been allocated to more than one account (General Account
and/or one or more of the Separate Accounts), a percentage of the total $9
policy fee will be deducted from the policy value in each account. The amount
of the charge deducted from each account will be equal to the percentage which
the policy value in that account represents of the total Accumulated Value under
the Policy. The deduction of the policy fee will result in cancellation of a
number of the Policy's Accumulation Units in the account. The number of
Accumulation Units cancelled will be equal in value to the percentage of the $9
amount deducted from the account.

After the first policy year, deduction of policy fees under Elective Payment
Policies will not reduce the effective interest rate credited to Policy amounts
allocated to the Company's General Account below the minimum rate guaranteed for
such amounts. See APPENDIX A, "MORE INFORMATION ABOUT THE GENERAL ACCOUNT".
The portion of the total Policy fees applicable to amounts allocated to the
General Account will be reduced or eliminated, as necessary, when full deduction
would result in an effective rate of interest below the minimum rate guaranteed.

Deductions for administrative expense are designed to reimburse the Company for
the cost of administration and related expenses and are not expected to be a
source of profit. The administrative functions and expense assumed by the
Company in connection with the Separate Accounts and the Policies include, but
are not limited to, clerical, accounting, actuarial and legal services, rent,
postage, telephone, office equipment and supplies, expenses of preparing and
printing registration statements, expense of preparing and typesetting
prospectuses and the cost of printing prospectuses not allocable to sales
expense, filing and other fees.

SALES AND ADMINISTRATIVE EXPENSE UNDER PREVIOUS SERIES OF POLICIES. The
previous series of the Company's Policies provided for sales and administrative
charges to be deducted from purchase payments. For more information see
Appendix B. "INFORMATION ABOUT DISCONTINUED POLICIES".

<PAGE>

C. PREMIUM TAXES. Some states and municipalities impose a premium tax on
variable annuity policies. State premium taxes currently range up to 3.50%.

The Company makes a charge for state and municipal premium taxes, where
applicable. In accordance with the law of the state involved, the premium tax
charge usually is deducted in one of two ways:

(1) The premium tax charge is deducted at the time the purchase payment is
received; or

(2) The premium tax charge is deducted at the time annuity payments begin.

Where permitted by state law, it is the Company's policy to follow the practice
in (2) above. However, if no amount for premium tax was deducted at the time
the purchase payment was received, but subsequently tax is determined to be due
prior to the Annuity Date, the Company reserves the right to deduct the premium
tax from the Policy value at the time such determination is made.

D. ANNUAL CHARGES AGAINST SEPARATE ACCOUNT ASSETS. The Company currently makes
a charge of 1.25% on an annual basis of the daily value of each Separate
Account's assets. The charge is for the mortality risk and expense risk which
the Company assumes in relation to the variable portion of the Policies. The
total charge may be increased or decreased by the Board of Directors of the
Company, but not more often than annually, and it may not exceed 1.275% on an
annual basis. No other charges are deducted from the assets of the Separate
Accounts.

Because the Separate Accounts purchase shares of Allmerica Investment Trust, the
value of the net assets of the Separate Accounts will reflect the investment
advisory fee and other expenses incurred by the Funds of the Trust. The
Prospectus and Statement of Additional Information of the Trust contain
additional information concerning expenses of the Funds.

MORTALITY AND EXPENSE RISKS. The mortality risk arises from the Company's
guarantee that it will make annuity payments in accordance with annuity rate
provisions established at the time the Policy is issued for the life of the
Annuitant (or in accordance with the annuity option selected), no matter how
long the Annuitant (or other payee) lives and no matter how long all Annuitants
as a class live. The expense risk arises from the Company's guarantee that the
charges it makes will not exceed the limits described in the Policies and in
this Prospectus.

If the charge for mortality and expense risks is not sufficient to cover actual
mortality experience and expenses, the Company will absorb the losses. If
expenses are less than the amounts provided, the difference will be a profit to
the Company. To the extent this charge results in a profit to the Company, such
profit will be available for use by the Company for, among other things, the
payment of distribution, sales and other expenses. For assuming these risks the
Company currently receives an amount equivalent to an annual charge of 1.15% of
the daily value of each Separate Account.

Since mortality and expense risks involve future contingencies which are not
subject to precise determination in advance, it is not feasible to identify
specifically the portion of the charge which is applicable to each. The
Company estimates that a reasonable allocation might be 0.80% for mortality risk
and 0.35% for expense risk.

CONTINGENCY RESERVE FEE. In accordance with the requirements of New York
Insurance law, the Company has established a Contingency Reserve Fund in order
to provide against possible liabilities arising out of the Policies in excess of
the amounts allocated to the Separate Accounts. Of the total charge of 1.25%
described above, 0.10% is allocated to reimburse the Company for the
establishment of the Contingency Reserve Fund.

THE VARIABLE ANNUITY POLICIES

The Policies are designed for use in connection with several types of retirement
plans as well as for sale to individuals. Participants under such plans, as
well as Policy Owners, Annuitants, and beneficiaries, are cautioned that the
rights of any person to any benefits under the Policies may be subject to the
terms and conditions of the plans themselves, regardless of the terms and
conditions of the Policies.

The Policies offered by the Prospectus may be purchased from representatives of
Allmerica Investments, Inc., a registered broker-dealer under the Securities
Exchange Act of 1934 and a member of the National Association of Securities
Dealers, Inc. (NASD). Allmerica Investments, Inc., 440 Lincoln Street,
Worcester,

<PAGE>

Massachusetts, 01653, is indirectly wholly-owned by State Mutual. The Policies
also may be purchased from certain independent broker-dealers which are NASD
members.

Policy Owners may direct any inquiries to SMA Life Annuity Customer Services,
SMA Life Assurance Company, 440 Lincoln Street, Worcester, Massachusetts 01653.

A. PURCHASE PAYMENTS. Purchase payments under both Elective Payment Policies
and Single Payment Policies are payable to the Company. The initial payment
will be credited to the Policy as of the date that a properly completed
application and the payment is received by the Company at its principal office.
If an application is incomplete, or does not specify how payments are to be
allocated, the initial purchase payment will be returned within five business
days.

Additional payments subsequently will be credited to the Policy at the unit
values computed as of the Valuation Date that a purchase payment is received at
the Company's principal office.

The Policy Owner may change allocation instructions for new payments by giving
the Company written notice of the change. Any change in allocation instructions
will take effect with the first purchase payment received with or after the new
instructions are received by the Company.

Under Elective Payment Policies, purchase payments are not limited as to
frequency and number, but there are certain limitations as to amount. The
initial payment generally must be at least $600. Under a salary deduction or a
monthly automatic payment plan the minimum initial payment is $50. In all
cases, each subsequent payment must be at least $50. (Where the
contribution on behalf of an employee under an employer-sponsored retirement
plan is less than $600 but more than $300 annually, the Company may issue a
Policy on the employee, if the plan's average annual contribution per eligible
plan participant is at least $600.) Payments may be made at any time prior to
the policy month preceding the Annuity Date. Total elective payments may not
exceed the maximum limit specified in the Policy. If the payments are divided
among two or more accounts, a net amount of at least $10 of each payment must be
allocated to each account.

Under Single Payment Policies, the minimum purchase payment is $10,000. The
Company will establish a maximum single payment for each Policy. If payments
are divided between two or more accounts, at least $500 must be allocated to
each account.

With respect to Policies issued to a plan qualified under Sections 401, 403, 408
or 457 of the Code, the plan may impose limits on the rights set forth in this
Prospectus, such as the right to redeem the Policy.

B. TRANSFER PRIVILEGE. At any time prior to the Annuity Date, subject to the
Company's then current rules, a Policy Owner may have amounts transferred among
the Separate Accounts or between a Separate Account and the General Account
without imposition of any charge for sales or administrative expense. Transfer
values will be effected at the Accumulation Value next computed after receipt of
the transfer order. The Company will make transfers pursuant to written or
telephone requests. A properly completed authorization form must be on file
before telephone requests will by honored. The policy of the Company and its
agents and affiliates is that they will not be responsible for losses resulting
from acting upon telephone requests reasonably believed to be genuine. The
Company will employ reasonable procedures to confirm that instructions
communicated by telephone are genuine; otherwise, the Company may be liable for
any losses due to unauthorized or fraudulent instructions. The procedures the
Company follows for transactions initiated by telephone include requirements
that callers on behalf of a Policy Owner identify themselves by name and
identify the Annuitant by name, date of birth and social security number. All
transfer instructions by telephone are tape recorded.

Transfers involving the General Account are currently permitted only if:

(a) There has been at least a ninety (90) day period since the last
transfer from the General Account; and

(b) The amount transferred from the General Account in each transfer does
not exceed the lesser of $100,000 or 25% of the Accumulated Value
under the Policy.

These rules are subject to change by the Company.

<PAGE>

The Policy Owner may have automatic transfers of at least $100 each made on a
periodic basis from Separate Account VA-G or VA-H (which invest in the Money
Market Fund) to one or more of the other Separate Accounts available to the
Policy Owner or reallocate Policy value among the available Separate Accounts.
Automatic transfers may be made on a monthly, bimonthly, quarterly, semiannual
or annual schedule.

The transfer privilege is subject to the consent of the Company. The Company
reserves the right to impose limitations on transfers including, but not limited
to: (1) the minimum amount that may be transferred, (2) the minimum amount
that may remain in a Separate Account following a transfer from that Separate
Account, (3) the minimum period of time between transfers involving the General
Account, and (4) the maximum amount that may be transferred each time from the
General Account.

C. SURRENDER. At any time prior to the Annuity Date, a Policy Owner may
surrender the Policy and receive its Accumulated Value, less applicable charges.
The Policy Owner must return the Policy and a signed written request,
satisfactory to the Company, to the Company's principal office. The amount
payable to the Policy Owner upon surrender ("Surrender Amount") will be based on
the Accumulated Value of the Policy as of the Valuation Date on which the
request is received at the Company's principal office.

Before the Annuity Date a contingent deferred sales charge will be deducted upon
surrender if the Policy has been in force for less than nine full policy years
under Elective Payment Policies or less than seven full policy years under
Single Payment Policies. See "CHARGES AND DEDUCTIONS".

After the Annuity Date, only Policies under which future annuity payments are
limited to a specified period may be surrendered. The Surrender Amount is the
commuted value of any unpaid installments, computed on the basis of the assumed
interest rate incorporated into the annuity payments. No contingent deferred
sales charge is imposed after the Annuity Date.

The Surrender Amount is normally payable within seven days following the
Company's receipt of the surrender request. The Company reserves the right to
defer surrenders and partial redemptions of amounts in each Separate Account
during any period which (1) trading on the New York Stock Exchange is restricted
as determined by the SEC or such Exchange is closed for other than weekends and
holidays, (2) the SEC has by order permitted such suspension, or (3) an
emergency, as determined by the SEC, exists such that disposal of portfolio
securities or valuation of assets of each Separate Account is not reasonably
practicable.

The right is reserved by the Company to defer surrenders and partial redemptions
of amounts allocated to the Company's General Account for a period not to exceed
six months.

The surrender rights of Policy Owners who are participants under Section 403(b)
plans or who are participants in the Texas Optional Retirement Program (Texas
ORP) are restricted; see "FEDERAL TAX CONSIDERATIONS, I. Public School Systems
and Certain Tax Exempt Organizations and J. Texas Optional Retirement Program".

For important tax consequences which may result from surrender, see "FEDERAL TAX
CONSIDERATIONS".

D. PARTIAL REDEMPTION. At any time prior to the Annuity Date, a Policy Owner
may redeem a portion of the Accumulated Value of his or her Policy, subject to
the limits stated below. The Policy Owner must file a signed written request,
satisfactory to the Company, for redemption at the Company's Principal Office.
The written request must indicate the dollar amount the Policy Owner wishes to
receive and the accounts from which such amount is to be redeemed. The amount
redeemed equals the amount requested by the Policy Owner plus any applicable
contingent deferred sales charge as described under "CHARGES AND DEDUCTIONS".

Where allocations have been made to more than one account, a percentage of the
partial redemption may be allocated to each such account. A partial redemption
from a Separate Account will result in cancellation of a number of units
equivalent in value to the amount redeemed, computed as of the Valuation Date
that the request is received at the Company's principal office.

Each partial redemption must be in a minimum amount of $500 under a Single
Payment Policy or $200 under an Elective Payment Policy. No partial redemption
will be permitted if the Accumulated Value remaining under the Policy would be
reduced to less than $2,000 under a Single Payment Policy or to less

<PAGE>

than $1,000 under an Elective Payment Policy. Partial redemptions will be paid
in accordance with the time limitations described under "Surrender".

After the Annuity Date, only Policies under which future variable annuity
payments are limited to a specified period (Option V) may be partially redeemed.
A partial redemption after the Annuity Date will result in cancellation of a
number of Annuity Units equivalent in value to the amount redeemed.

For important restrictions on withdrawals which are applicable to Policy Owners
who are participants under Section 403(b) plans or under the Texas ORP, see
"FEDERAL TAX CONSIDERATIONS, I. Public School Systems and Certain Tax Exempt
Organizations and J. Texas Optional Retirement Program".

For important tax consequences which may result from partial redemptions, see
"FEDERAL TAX CONSIDERATIONS".

E. DEATH BENEFIT. If the Policy is issued to an individual, the Policy Owner
must also be the Annuitant. This restriction does not apply to Policies issued
to Trustees, corporations, other entities, or to Policies issued pursuant to a
state's Uniform Gifts to Minors Act. If the Annuitant's death occurs prior to
the Annuity Date, a death benefit will be paid to the beneficiary. The death
benefit is equal to the greater of (1) the Accumulated Value under the Policy or
(2) the total amount of gross payment(s) made under the Policy minus the amount
of all partial redemptions.

The death benefit generally will be paid to the beneficiary in one sum.
However, the beneficiary may, by written request, elect one of the following
options:

(1) The payment of the one sum may be delayed for a period not to exceed five
years from the date of the Annuitant's death.

(2) The death benefit may be paid in installments. Payments must begin within
one year from the date of the Annuitant's death, and are payable over the
life expectancy of the beneficiary.

(3) All or a portion of the death benefit may be used to provide a life annuity
for the beneficiary. Benefits must begin within one year from the date of
the Annuitant's death and are payable over a period not extended beyond the
life expectancy of the beneficiary. Any annuity benefits will be provided
in accordance with the annuity options of the Policy.

If there is more than one beneficiary, the death benefit will be paid in one sum
unless the Company consents to pay an annuity option chosen by the
beneficiaries.

If the Annuitant's death occurs on or after the Annuity Date but before the
completion of all guaranteed monthly annuity payments, any unpaid amounts or
installments will be paid to the beneficiary. The Company must pay the
remaining payments at least as rapidly as under the payment option in effect on
the date of the Annuitant's death. If there is more than one beneficiary, the
commuted value of such installments, computed on the basis of the assumed
interest rate incorporated in the annuity option table on which such payments
are based, shall be paid to the beneficiaries in one sum.

With respect to any death benefit, the Accumulated Value under the Policy shall
be based on unit values next computed after due proof of the Annuitant's death
has been received at the Company's principal office. If the beneficiary elects
to receive the death benefit in one sum, the death benefit will be paid within
seven business days. If the beneficiary (other than a spousal beneficiary of an
IRA See."F. The Spouse of the Annuitant as Beneficiary") has not elected an
annuity option within one year from the date notice of death is received by the
Company; the Company will pay a death benefit in one sum. The death benefit
will reflect any earnings or losses experienced during the period and any
withdrawals.

F. THE SPOUSE OF THE ANNUITANT AS BENEFICIARY. When a non-qualified Policy is
issued to an entity other than an individual, the Policy Owner may name the
Annuitant. If the Annuitant's spouse is named as beneficiary ("spousal
beneficiary") and if the Annuitant dies prior to the Annuity Date, at the
written request of the spousal beneficiary and with the consent of the Company
the spousal beneficiary will become the Annuitant. The death benefit will not be
paid and all other rights and benefits provided in the Policy will continue.
However, all or a portion of the death benefit may be withdrawn without charge
within one year of the date on which notice of death is received at the
Company's principal office.

<PAGE>

If a non-qualified Policy is issued to an individual (except pursuant to a
state's Uniform Gifts to Minors Act), or a qualified Policy is issued in
connection with a retirement plan qualified under Section 403(b) or 408 of the
Code, the Policy Owner must be the Annuitant. If such Annuitant dies prior to
the Annuity Date and the Annuitant's spouse is named beneficiary under the
Policy ("Spousal Beneficiary"), at the written request of the spousal
beneficiary and with the consent of the Company, the spousal beneficiary will
become the Owner and Annuitant and will have all rights described above.

G. ASSIGNMENT. The right to assign the Policy is available only to the Policy
Owner. However, Policies sold in connection with IRA plans and certain other
qualified plans are not assignable. Assignability of a Policy issued in
connection with an HR-10 Plan may be restricted. For more information about
these plans, see "FEDERAL TAX CONSIDERATIONS".

The Company will not be deemed to have knowledge of an assignment unless it is
made in writing and filed at the Company's principal office. The Company will
not assume responsibility for determining the validity of any assignment. If an
assignment of the Policy is in effect on the Annuity Date, the Company reserves
the right to pay to the assignee, in one sum, that portion of the Surrender
Value of the Policy to which the assignee appears to be entitled. The Company
will pay the balance, if any, in one sum to the Policy Owner in full settlement
of all liability under the Policy. The interest of the Annuitant and of any
beneficiary will be subject to any assignment.

H. ELECTING THE FORM OF ANNUITY AND THE ANNUITY DATE. Subject to certain
restrictions described below, the Policy Owner has the right (1) to select the
annuity option under which annuity payments are to be made, and (2) to determine
whether payments are to be made on a fixed or a variable basis, or a combination
fixed and variable basis. Annuity payments are determined on the basis of the
annuity tables in the Policy, by the annuity option selected by the Policy
Owner, and by the investment performance of the Separate Account(s) selected.

To the extent a fixed annuity is selected, Accumulated Value will be transferred
to the General Account of the Company, and the annuity payments will be fixed in
amount. See APPENDIX A, "MORE INFORMATION ABOUT THE GENERAL ACCOUNT".

Under a variable annuity, a payment equal to the value of the number of Annuity
Units in the Separate Account(s) is made each month. Since the value of an
Annuity Unit in a Separate Account will reflect the investment performance of
the Separate Account, the amount of each monthly payment will vary.

The annuity option selected must produce an initial payment of at least $50 (at
least $20 in New York). If a combination of fixed and variable payments is
selected, the initial payment on each basis must be at least $50. If the
annuity option(s) selected does not produce initial payments which meet these
minimums, the Company will pay the Accumulated Value in one sum. Once annuity
payments have commenced, the Annuitant cannot make partial redemptions or
surrender the annuity benefit and receive a lump sum settlement in lieu thereof,
except in the case where future annuity payments are limited to a period certain
(only under Option V or a comparable fixed option). Only beneficiaries entitled
to receive remaining payments for a period certain may elect to instead receive
a lump sum settlement.

The Annuity Date is selected by the Policy Owner. The Annuity Date may be the
first day of any month on or after the Annuitant's 50th birthday but before the
Annuitant's 75th birthday, with certain exceptions the Company may arrange. The
Owner may elect to change the Annuity Date by sending a request to the Company's
principal office at least one month before the new Annuity Date. The new
Annuity Date must be the first day of any month occurring on or after
the Annuitant's 50th birthday but before the Annuitant's 85th birthday. The new
Annuity Date must be within the life expectancy of the Annuitant. The Company
shall determine such life expectancy at the time a change in Annuity Date is
requested. The Internal Revenue Code and the terms of qualified plans impose
limitations on the age at which annuity payments may commence and the type of
annuity option selected. See "FEDERAL TAX CONSIDERATIONS" for further
information.

For Policies issued on and after April 1, 1985, if the Policy Owner does not
elect otherwise, annuity payments will be made in accordance with Option 1, a
variable life annuity with 120 monthly payments guaranteed. For Policies issued
prior to April 1, 1985, annuity payments will commence in accordance with the
fixed annuity option comparable to Option 1. If payments commence under a fixed
annuity option due to the Policy Owner's failure to elect otherwise, for a
period of one year the Annuitant may elect to convert future annuity benefits to
a variable annuity option involving a life contingency, without the imposition
of

<PAGE>

any fee or charge. The Company will notify the Annuitant of the first-year
conversion privilege at the time annuity payments commence.

Changes in either the Annuity Date or annuity option can be made up to one month
prior to the Annuity Date.

I. DESCRIPTION OF VARIABLE ANNUITY OPTIONS. The Company currently provides the
variable annuity options described below. Variable annuity options may be
funded through the Growth Fund or the Money Market Fund, or both.

The Company also provides fixed-amount annuity options, not described here,
which are comparable to the variable annuity options. Regardless of how
payments were allocated during the accumulation period, any one of the variable
annuity options, or any one of the fixed-amount options may be selected, or any
one of the variable annuity options may be selected in combination with any one
of the fixed-amount annuity options. Other annuity options may be offered by
the Company.

OPTION I--Variable Life Annuity with 120 Monthly Payments Guaranteed
A variable annuity payable monthly during the lifetime of the payee with the
guarantee that if the payee should die before 120 monthly payments have been
paid, the monthly annuity payments will continue to the beneficiary until a
total of 120 monthly payments have been paid.

OPTION II--Variable Life Annuity
A variable annuity payable monthly during the lifetime of the payee. It would
be possible under this option for the Annuitant to receive only one annuity
payment if the Annuitant dies prior to the due date of the second annuity
payment, two annuity payments if the Annuitant dies before the due date of the
third annuity payment, etc.

OPTION III--Unit Refund Variable Life Annuity
A variable annuity payable monthly during the lifetime of the payee with the
guarantee that if (1) exceeds (2) where:

(1) is the dollar amount of the Accumulated Value applied under this option
divided by the dollar amount of the first monthly payment under this
option, and

(2) is the number of monthly payments paid prior to the death of the payee,

then monthly variable annuity payments will be continued to the beneficiary
until the number of such payments equals the number determined in (1) above.

OPTION IV-A--Joint and Survivor Variable Life Annuity
A monthly variable annuity payable jointly to two payees during their joint
lifetime, and then continuing thereafter during the lifetime of the surviving
payee, where the amount of each such monthly payment to the surviving payee is
based on the same number of Annuity Units which applied during the joint
lifetime of the two payees. One of the payees must be the person designated as
the Annuitant in the Policy or the beneficiary electing this option. There is
no minimum number of payments under this option.

OPTION IV-B--Joint and Two-thirds Survivor Variable Life Annuity
A monthly variable annuity payable jointly to two payees during their joint
lifetime, and then continuing thereafter during the lifetime of the surviving
payee, where the amount of each such monthly payment to the surviving payee is
based upon two-thirds of the number of Annuity Units which applied during the
joint lifetime of the two payees. One of the payees must be the person
designated as the Annuitant in the Policy or the beneficiary electing this
option. There is no minimum number of payments under this option.

OPTION V--Variable Annuity Certain
A monthly variable annuity payable for a stipulated number of years from one to
30 years as selected.

It should be noted that Option V does not involve a life contingency. In the
computation of the payments under this option, the charges for annuity rate
guarantees and for the mortality and expense risk, which include a factor for
mortality risks, is made. Although not contractually required to do so, the
Company currently follows a practice of permitting persons receiving payments
under Option V to elect to convert to a variable annuity involving a life
contingency. The Company may discontinue or change this practice at any time,
but not with respect to Policy Owners who have elected Option V prior to the
date of any change. See

<PAGE>

"FEDERAL TAX CONSIDERATIONS" for a discussion of the possible adverse tax
consequences of selecting Option V.

J. NORRIS DECISION.

In the case of ARIZONA GOVERNING COMMITTEE V. NORRIS, the United States Supreme
Court ruled that in connection with retirement benefit options offered under
certain employer-sponsored employee benefit plans, annuity options based on
sex-distinct actuarial tables are not permissible under Title VII of the Civil
Rights Act of 1964. The ruling requires that benefits derived from
contributions paid into a plan after August 1, 1983 be calculated without regard
to the sex of the employee.

Annuity benefits attributable to payments received by the Company on or before
August 1, 1983 under a Policy issued in connection with an employer-sponsored
benefit plan affected by the NORRIS decision will be based on the greater of the
Company's sex-distinct Non-Guaranteed Current Annuity Option Rates or the
applicable sex-distinct guaranteed rates described in such Policy. Annuity
benefits attributable to payments received by the Company after August 1, 1983
under such plans will be based on the greater of the Company's unisex
Non-Guaranteed Current Annuity Option Rates or the guaranteed male rates
described in such Policy, regardless of whether the Annuitant is male or female.

Although the Company believes that the Supreme Court ruling does not affect
Policies funding IRA plans that are not employer-sponsored, except in California
the Company will apply certain aspects of the ruling to annuity benefits
attributable to payments received after August 1, 1983 under such Policies.
Such benefits will be based on the greater of the guaranteed male annuity rates
described in the Policies or the Company's sex-distinct Non-Guaranteed Current
Annuity Option Rates. In California, state law requires that all annuity
benefits arising out of Policies that are not issued in connection with
employer-sponsored plans affected by the NORRIS decision must be based on
sex-distinct annuity option rates. In Montana and Massachusetts, Policies are
based on unisex rates.

K. COMPUTATION OF POLICY VALUES AND ANNUITY PAYMENTS.

THE ACCUMULATION UNIT. Each net purchase payment is allocated to the account(s)
selected by the Policy Owner. Allocations to the Separate Accounts are credited
to the Policy in the form of Accumulation Units. Accumulation Units are
credited separately for each Separate Account. The number of Accumulation Units
of each Separate Account credited to the Policy is equal to the portion of the
net purchase payment allocated to the Separate Account, divided by the dollar
value of the applicable Accumulation Unit as of the Valuation Date the payment
is received at the Company's principal office. The number of Accumulation Units
resulting from each payment will remain fixed unless changed by a subsequent
split of Accumulation Unit value, a transfer, a partial redemption or surrender.
The dollar value of an Accumulation Unit of each Separate Account varies from
Valuation Date to Valuation Date based on the investment experience of that
Separate Account and will reflect the investment performance, expenses and
charges of the Funds of Allmerica Investment Trust. The value of an
Accumulation Unit was set at $1.00 on the first Valuation Date for each Separate
Account.

Allocations to the General Account are not converted into Accumulation Units,
but are credited interest at a rate periodically set by the Company. See
APPENDIX A, "MORE INFORMATION ABOUT THE GENERAL ACCOUNT".

The Accumulated Value under the Policy is determined by multiplying the number
of Accumulation Units in each Separate Account by the value of the applicable
Accumulation Unit on that Valuation Date, adding the products, and adding the
amount of the accumulations in the General Account, if any.

ADJUSTED GROSS INVESTMENT RATE. At each Valuation Date an adjusted gross
investment rate for each Separate Account for the Valuation Period then ended is
determined from the investment performance of that Separate Account for the
Valuation Period. Such rate is (1) the investment income of that Separate
Account for the Valuation Period, plus capital gains and minus capital losses of
that Separate Account for the Valuation Period, whether realized or unrealized,
adjusted for provisions made for taxes, if any, divided by (2) the amount of
that Separate Account's assets at the beginning of the Valuation Period. The
adjusted gross investment rate may be either positive or negative.

NET INVESTMENT RATE AND NET INVESTMENT FACTOR. The net investment rate for a
Separate Account's variable accumulations for any Valuation Period is equal to
the adjusted gross investment rate of the Separate Account for such Valuation
Period decreased by the equivalent for such period of 1.25% per

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annum. The annual charge of 1.25% may be increased or decreased by the Board of
Directors of the Company but may not exceed 1.275% per annum.

The net investment factor is 1.000000 plus the applicable net investment rate.

The dollar value of an Accumulation Unit as of a given Valuation Date is
determined by multiplying the dollar value of the corresponding Accumulation
Unit as of the immediately preceding Valuation Date by the appropriate net
investment factor.

For an illustration of Accumulation Unit calculation using a hypothetical
example see "ANNUITY PAYMENTS" in the Statement of Additional Information.

THE ANNUITY UNIT. The Annuity Unit is a measure of the value of the Annuitant's
monthly annuity payments under a variable annuity option on and after the
Annuity Date. The value of an Annuity Unit in each Separate Account was set at
$1.00 on the Valuation Date of the first variable annuity payment from such
Separate Account. The value of an Annuity Unit under a Separate Account on any
Valuation Date thereafter is equal to the value of such unit on the immediately
preceding Valuation Date, multiplied by the product of (1) the net investment
factor of the Account for the current Valuation Period and (2) a factor to
adjust benefits to neutralize the assumed interest rate. The assumed interest
rate, discussed below, is incorporated in the applicable variable annuity option
offered in the Policy.

DETERMINATION OF THE FIRST AND SUBSEQUENT ANNUITY PAYMENTS. The first monthly
annuity payment is based upon the Accumulated Value as of a date not more than
four weeks preceding the date the first annuity payment is due. Currently,
variable annuity payments are made on the first of the month based on unit
values as of the 15th day of the preceding month.

The Policy provides annuity rates which determine the dollar amount of the first
monthly payment under each form of annuity for each $1,000 of applied value
(Accumulated Value applied under a specific option to provide annuity income
payments, minus any applicable premium tax). The annuity rates in the Policy
are based on the Progressive Annuity Table assuming all births in 1925.

The amount of the first monthly payment depends upon the form of annuity
selected, the sex and age of the Annuitant and the value of the amount applied
under the annuity option (however, see "J. Norris Decision"). The variable
annuity options offered by the Company are based on a 3 1/2% assumed interest
rate. Variable payments are affected by the assumed interest rate used in
calculating the annuity option rates. Variable annuity payments will increase
over periods when the actual net investment result of the Separate Account(s)
funding the annuity exceeds the equivalent of the assumed interest rate for the
period. Variable annuity payments will decrease over periods when the actual
net investment result of the respective Separate Account is less than the
equivalent of the assumed interest rate for the period.

The dollar amount of the first monthly annuity payment under a particular option
is determined by multiplying (1) the Accumulated Value applied under that option
(after deduction for applicable contingent deferred sales charge and premium
tax, if any) divided by $1,000, by (2) the applicable amount of the first
monthly payment per $1,000 of value. The dollar amount of the first monthly
variable annuity payment is then divided by the value of an Annuity Unit of the
selected Separate Account(s), as of the Valuation Date used to calculate the
first monthly payment, to determine the number of Annuity Units represented by
the first payment. This number of Annuity Units remains fixed under
all annuity options except the joint and two-thirds survivor annuity option.
In each subsequent month, the dollar amount of the annuity payment is determined
by multiplying this fixed number of Annuity Units by the value of an Annuity
Unit on the applicable Valuation Date.

After the first variable annuity payment the dollar amount of each monthly
variable annuity payment will vary with the variations in the value of the
Annuity Unit of the selected Separate Account(s). The dollar amount of each
fixed amount monthly annuity payment will not change, except under the joint and
two-thirds survivor annuity option.

The Company may from time to time offer its Policy Owners both fixed and
variable annuity rates more favorable than those contained in the Policy. Any
such rates will be applied uniformly to all Policy Owners of the same class.

For an illustration of variable annuity payment calculation using a hypothetical
example, see "ANNUITY PAYMENTS" in the Statement of Additional Information.

<PAGE>

FEDERAL TAX CONSIDERATIONS

The effect of federal income taxes on the value of a Policy, on redemptions or
surrenders, on annuity payments, and on the economic benefit to the Policy
Owner, Annuitant, or beneficiary depends upon a variety of factors. The
following discussion is based upon the Company's understanding of current
federal income tax laws as they are interpreted as of the date of this
Prospectus. No representation is made regarding the likelihood of continuation
of current federal income tax laws or of current interpretations by the Internal
Revenue Service (IRS).

IT SHOULD BE RECOGNIZED THAT THE FOLLOWING DISCUSSION OF FEDERAL INCOME TAX
ASPECTS OF AMOUNTS RECEIVED UNDER VARIABLE ANNUITY POLICIES IS NOT EXHAUSTIVE,
DOES NOT PURPORT TO COVER ALL SITUATIONS AND IS NOT INTENDED AS TAX ADVICE. A
QUALIFIED TAX ADVISER SHOULD ALWAYS BE CONSULTED WITH REGARD TO THE APPLICATION
OF LAW TO INDIVIDUAL CIRCUMSTANCES.

The Company intends to make a charge for any effect which the income, assets, or
existence of the Policies or the Separate Accounts may have upon its tax. The
Separate Accounts presently are not subject to tax, but the Company reserves the
right to assess a charge for taxes should the Separate Accounts at any time
become subject to tax. Any charge for taxes will be assessed on a fair and
equitable basis in order to preserve equity among classes of Policy Owners.

Any charge for taxes with respect to a Separate Account will be made as though
that Separate Account were a separate taxable entity. Accordingly, the charge
for taxes may be made irrespective of whether any taxes are payable currently by
the Company. Conversely, if any Separate Account would be entitled to a tax
refund on a separate entity basis at any such time, an equivalent amount will be
credited to that Separate Account by the Company at the time the Separate
Account would have become entitled to the refund if it were a separate taxable
entity. Under such policy, the Company may derive a temporary or permanent
benefit in the form of reduced taxes. Any federal income taxes applicable to
assets of the Company in the Separate Accounts and not attributable to the
Policies shall be paid by the Company and shall not affect Accumulations or
Annuity Unit values.

The Separate Accounts are considered to be a part of and taxed with the
operations of the Company. The Company is taxed as a life insurance company
under subchapter L of the Internal Revenue Code ("Code"). The Company files a
consolidated tax return with its parent, State Mutual, and other affiliates.

The Internal Revenue Service has issued regulations relating to the
diversification requirements for variable annuity and variable life insurance
contracts under Section 817(h) of the Code. The regulations provide that the
investments of a segregated asset account underlying a variable annuity contract
are adequately diversified if no more than 55% of the value of its assets is
represented by any one investment, no more than 70% by any two investments, no
more than 80% by any three investments, and no more than 90% by any four
investments. If the investments are not adequately diversified, the income on a
contract, for any taxable year of the Policy Owner, would be treated as ordinary
income received or accrued by the Policy Owner. It is anticipated that the
Funds of the Allmerica Investment Trust will comply with the diversification
requirements.

A. QUALIFIED AND NON-QUALIFIED POLICIES. From a federal tax viewpoint there
are two types of variable annuity Policies, qualified Policies and non-qualified
Policies. A qualified Policy is one that is purchased in connection with a
retirement plan which meets the requirements of Sections 401, 403, 408, or 457
of the Code, while a non-qualified Policy is one that is not so purchased. The
tax treatment for certain partial redemptions or surrenders will vary according
to whether they are made from a qualified Policy or a non-qualified Policy. For
more information on the tax provisions applicable to qualified Policies, see
Sections D through J, below.

B. TAXATION OF THE POLICIES IN GENERAL. The Company believes that the Policies
described in this Prospectus will, with certain exceptions (see K below), be
considered annuity policies under Section 72 of the Internal Revenue Code (the
"Code"). This section provides for the taxation of annuities. The following
discussion concerns annuities subject to Section 72. Section 72(e)(11)(A)(ii)
requires that all annuity policies issued by the same insurance company to the
same Policy Owner during any 12-month period be treated as a single Policy in
determining taxable distributions under Section 72(e).

With certain exceptions, any increase in the Accumulated Value of the Policy is
not taxable to the Policy Owner until received by such Owner. If the Policy is
surrendered or amounts are withdrawn prior to the

<PAGE>

Annuity Date, to the extent of the amount withdrawn any investment gain in value
over the cost basis of the policy would be taxed as ordinary income. Under the
current provisions of the Code, amounts received under a non-qualified Policy
prior to the annuity commencement date (including payments made upon the death
of the Annuitant or Policy Owner), or as non-periodic payments after the
annuity commencement date, are generally first attributable to any investment
gains credited to the Policy over the taxpayer's basis (if any) in the Policy.
Such amounts will be treated as income subject to federal income taxation.

If the Policy Owner transfers (assigns) the Policy to another individual as a
gift, the Code provides that the Policy Owner will incur taxable income at the
time of the transfer. The amount of the taxable income is equal to the excess,
if any, of the cash surrender value of the Policy over the Policy Owner's basis
at the time of the gift. An exception is provided for certain transfers between
spouses.

When annuity payments are commenced under the Policy, generally a portion of
each payment may be excluded from gross income. The excludable portion is
generally determined by a formula that establishes the ratio that the cost basis
of the Policy bears to the expected return under the Policy. The portion of the
payment in excess of the excludable amount is taxable as ordinary income. Once
all cost basis in the Policy is recovered, the entire payment is taxable. If
the last Annuitant dies before cost basis is recovered, a deduction for the
difference is allowed on the Annuitant's final tax return.

C. TAX WITHHOLDING AND PENALTIES. The Code requires withholding with respect
to payments or distributions from employee benefit plans, annuities, and IRAs,
unless a taxpayer elects not to have withholding. In addition, the Code
requires reporting to the IRS of the amount of income received with respect to
payment or distributions from annuities.

In certain situations, the Code provides for a tax penalty if, prior to death,
disability or attainment of age 59 1/2, a Policy Owner makes a withdrawal or
receives any amount under the Policy, unless the distribution is in the form of
a life annuity. The penalty is 10% of the amount includible in income by the
Policy Owner.

The 10% penalty tax may be imposed on the withdrawal of the investment gains if
the withdrawal is made prior to age 59-1/2. The penalty tax will not be imposed
after age 59-1/2, or if the withdrawal follows the death of the Policy Owner
(or, if the Policy Owner is not an individual, the death of the primary
Annuitant, as defined in the Code), or in the case of the "total disability" (as
defined in the Code) of the Annuitant. Furthermore, under Section 72 of the
Code, this penalty tax will not be imposed, irrespective of age, if the amount
received is one of a series of "substantially equal" periodic payments made at
least annually for the life or life expectancy of the payee. This requirement
is met when the Policy Owner elects to have distributions made over the Policy
Owner's life expectancy, or over the joint life expectancy of the Policy Owner
and the beneficiary. The requirement that the amount to be paid out as one of a
series of "substantially equal" periodic payments is met when the number of
units withdrawn to make each distribution is substantially the same.

The tax treatment of certain partial redemptions or surrenders of the
non-qualified Policies offered by this Prospectus will vary according to whether
the amount redeemed or surrendered is allocable to an investment in the Policy
made before or after certain dates.

D. PROVISIONS APPLICABLE TO QUALIFIED EMPLOYER PLANS. The tax rules applicable
to qualified employer plans, as defined by the Code, vary according to the type
of plan and the terms and conditions of the plan itself. Therefore, the
following is general information about the use of the Policies with various
types of qualified plans. The rights of any person to any benefits under such
qualified plans will be subject to the terms and conditions of the qualified
plans themselves regardless of the terms and conditions of the Policy issued in
connection with such qualified plans.

A loan to a participant or beneficiary from plans qualified under Sections 401
and 403 or an assignment or pledge of an interest in such a plan is generally
treated as a distribution. This general rule does not apply to loans which
contain certain repayment terms and do not exceed a specified maximum amount, as
required under Section 72(p).

E. QUALIFIED EMPLOYEE PENSION AND PROFIT SHARING TRUSTS AND QUALIFIED ANNUITY
PLANS. When an employee (including a self-employed individual) or one or more
of the employee's beneficiaries receives a "lump sum" distribution (a
distribution from a qualified plan described in Code Section 401(a) within one
taxable year equal to the total amount payable with respect to such an employee)
the taxable portion of such distribution may qualify for special treatment under
a special five-year income averaging provision of

<PAGE>

the Code. The employee must have had at least 5 years of participation under
the plan, and the lump sum distribution must be made after the employee has
attained age 59 1/2 or on account of his or her death, separation from the
employer's service (in the case of a common-law employee) or disability (in the
case of a self-employed individual). Such treatment can be elected for only one
taxable year once the individual has reached age 59 1/2. An employee who
attained age 50 before January 1, 1986 may elect to treat part of the taxable
portion of a lump-sum distribution as long-term capital gain and may also elect
10-year averaging instead of five-year averaging.

Qualified plans may accept non-deductible voluntary employee contributions up to
certain limits.

The Company can provide prototype plans for certain of the pension or profit
sharing plans for review by your legal counsel. For information, ask your
agent.

F. SELF-EMPLOYED INDIVIDUALS. The Self-Employed Individuals Tax Retirement Act
of 1962, as amended, frequently referred to as "H.R. 10", allows self-employed
individuals and partners to establish qualified pension and profit sharing
trusts and annuity plans to provide benefits for themselves and their employees.

These plans generally are subject to the same rules and requirements applicable
to corporate qualified plans, with some special restrictions imposed on
"owner-employees." An "owner-employee" is an employee who (1) owns the entire
interest in an unincorporated trade or business, or (2) owns more than 10% of
either the capital interest or profits interest in a partnership.

G. INDIVIDUAL RETIREMENT ACCOUNT PLANS. Any individual who earns
"compensation" (as defined in the Code and including alimony payable under a
court decree) from employment or self-employment, whether or not he or she is
covered by another qualified plan, may establish an Individual Retirement
Account or Annuity plan ("IRA") for the accumulation of retirement savings on a
tax-deferred basis. Income from investments is not included in "compensation".
The assets of an IRA may be invested in, among other things, annuity policies
including the Policies offered by this Prospectus.

Contributions to the IRA may be made by the individual or on behalf of the
individual by an employer. IRA contributions may be deductible up to the lesser
of (1) $2,000 or (2) 100% of compensation. The deduction is reduced
proportionately for adjusted gross income between $40,000 and $50,000 (between
$25,000 and $35,000 for unmarried taxpayers and between $0 and $10,000 for a
married taxpayer filing separately) if the taxpayer and his or her spouse file a
joint return and either is an active participant in an employer sponsored
retirement plan.

An individual and a working spouse each may have an IRA with the above-described
limit on each. An individual with an IRA may establish an additional IRA for a
non-working spouse if they file a joint return. Contributions to the two IRAs
together are deductible up to the lesser of $2,250 or 100% of compensation.

No deduction is allowed for contributions made for the year in which the
individual attains age 70 1/2 and years thereafter. Contributions for that year
and for years thereafter will result in certain adverse tax consequences.

Non-deductible contributions may be made to IRAs until the year in which the
individual attains age 70 1/2. Although these contributions may not be
deducted, taxes on their earnings are deferred until received. The maximum
permissible non-deductible contribution is $2,000 ($2,250 for a taxpayer and
non-working spouse). These limits are reduced by the amount of any deductible
contributions made by the taxpayer.

Contributions may be made with respect to a particular year until the due date
of the individual's federal income tax return for that year, not including
extensions. However, for reporting purposes, the Company will regard
contributions as being applicable to the year made unless it receives notice to
the contrary.

All annuity payments and other distributions under an IRA will be taxed as
ordinary income unless the owner has made non-deductible contributions. In
addition, a minimum level of distributions must begin no later than April 1
following the year in which the individual attains age 70 1/2, and failure to
make adequate distributions at this time may result in certain adverse tax
consequences to the individual.

Distributions from all of an individual's IRAs are treated as if they were a
distribution from one IRA and all distributions during the same taxable year are
treated as if they were one distribution. An individual who makes a
non-deductible contribution to an IRA or receives a distribution from an IRA
during the taxable year must provide certain information on the
individual's tax return to enable the IRS to

<PAGE>

determine the proportion of the IRA balance which represents non-deductible
contributions. If the required information is provided, that part of the amount
withdrawn which is proportionate to the individual's aggregate non-deductible
contributions over the aggregate balance of all of the individual's IRAs, is
excludable from income.

Distributions which are a return of a non-deductible contribution are
non-taxable, as they represent a return of basis. If the required information
is not provided to the IRS, distributions from an IRA to which both deductible
and non-deductible contributions have been made are presumed to be fully
taxable.

H. SIMPLIFIED EMPLOYEE PENSIONS. Employees may establish simplified employee
pensions ("SEPs") under Code Section 408(k) if certain requirements are met. A
SEP is an IRA to which the employer contributes under a written formula.
Currently, a SEP may accept employer contributions each year up to $30,000 or
15% of compensation (as defined), whichever is less. To establish SEPs the
employer must make a contribution for every employee age 21 and over who has
performed services for the employer for at least three of the five immediately
preceding calendar years and who has earned at least $300 for the year.

The employer's contribution is excluded from the employee's gross income for the
taxable year for which it was made up to the $30,000/15% limit. In addition to
the employer's contribution, the employee may contribute 100% of the employee's
earned income, up to $2,000, to the SEP, but such contributions will be subject
to the rules described above in "F. Individual Retirement Account Plans."

These plans are subject to the general employer's deduction limitations
applicable to all corporate qualified plans.

I. PUBLIC SCHOOL SYSTEMS AND CERTAIN TAX-EXEMPT ORGANIZATIONS. Under the
provisions of Section 403(b) of the Code, payments made for annuity policies
purchased for employees under annuity plans adopted by public school systems and
certain organizations which are tax exempt under Section 501(c)(3) of the Code
are excludable from the gross income of such employees to the extent that the
aggregate purchase payments for such annuity policies in any year do not exceed
the maximum contribution permitted under the Code.

For tax years beginning after 1988, a Policy qualifying under Section 403(b) of
the Code must provide that withdrawals or other distributions attributable to
salary reduction contributions (including earnings thereon) may not begin before
the employee attains age 59 1/2, separates from service, dies, or becomes
disabled. In the case of hardship a Policy Owner may withdraw amounts
contributed by salary reduction, but not the earnings on such amounts. Even
though a distribution may be permitted under these rules (e.g., for hardship or
after separation from service), it may nonetheless be subject to a 10% penalty
tax as a premature distribution, in addition to income tax.

The distribution restrictions are effective for years beginning after December
31, 1988, but only with respect to amounts that were not held under the Policy
as of that date.

J. TEXAS OPTIONAL RETIREMENT PROGRAM. Under a Code Section 403(b) annuity
policy issued as a result of participation in the Texas Optional Retirement
Program, distributions may not be received except in the case of the
participant's death, retirement or termination of employment in the Texas public
institutions of higher education. These restrictions are imposed by reason of
an opinion of the Texas Attorney General interpreting the Texas laws governing
the Optional Retirement Program.

K. SECTION 457 PLANS FOR STATE GOVERNMENTS AND TAX-EXEMPT ENTITIES. Code
Section 457 allows employees of a state, one of its political subdivisions, or
certain tax-exempt entities to participate in eligible government deferred
compensation plans. An eligible plan, by its terms, must not allow deferral of
more than $7,500 or 33 1/3% of a participant's includible compensation for the
taxable year, whichever is less. Includible compensation does not include
amounts excludable under the eligible deferred compensation plan or amounts paid
into a Code Section 403(b) annuity. The amount a participant may defer must be
reduced dollar-for-dollar by elective deferrals under a SEP, 401(k) plan or a
deductible employee contribution to a 501(c)(18) plan. Under eligible deferred
compensation plans the state, political subdivision, or tax-exempt entity will
be owner of the Policy.

If an employee also participates in another eligible plan or contributes to a
Code Section 403(b) annuity, a single limit of $7,500 will be applied for all
plans. Additionally, the employee must designate how much of the $7,500 or 33
1/3% limitation will be allocated among the various plans. Contributions to an
eligible plan will serve to reduce the maximum exclusion allowance for a Code
Section 403(b) annuity.

<PAGE>

Amounts received by employees under such plans generally are includible in gross
income in the year of receipt.

L. NON-INDIVIDUAL OWNERS. Non-individual Owners of deferred annuity contracts
(e.g., a corporation) generally will be currently taxed on any increase in the
cash surrender value of the deferred annuity attributable to contributions made
after February 28, 1986. This rule does not apply to immediate annuities or to
deferred annuities held by a qualified pension plan, an IRA, a 403(b) plan,
estates, employers with respect to terminated pension plans, or a nominee or
agent holding a contract for the benefit of an individual. Corporate-owned
annuities may result in exposure to the alternative minimum tax, to the extent
that such corporate-owned annuities result in an increase in a corporation's
book income. For tax years beginning after 1989, corporate-owned annuities may
result in exposure to the alternative minimum tax, to the extent that income on
the annuities increases the corporation's adjusted current earnings.

REPORTS

A Policy Owner is sent a report semi-annually which states certain financial
information about the Funds of Allmerica Investment Trust. The Company will
also furnish an annual report to the Policy Owner containing a statement of his
or her account, including unit values and other information required by
applicable law, rules and regulations.

CHANGES IN OPERATION OF THE SEPARATE ACCOUNTS

The Company reserves the right, subject to compliance with applicable law, to
(1) transfer assets from any Separate Account to another of the Company's
separate accounts having assets of the same class, (2) to operate any Separate
Account as a management investment company under the 1940 Act or in any other
form permitted by law, (3) to deregister any Separate Account under the 1940 Act
in accordance with the requirements of the 1940 Act and (4) to substitute the
shares of any other registered investment company for the Fund shares held by a
Separate Account, in the event that Fund shares are unavailable for Separate
Account investment, or if the Company shall determine that further investment in
such Fund shares is inappropriate in view of the purpose of the Separate
Account. In no event will the changes described above be made without notice to
Policy Owners in accordance with the 1940 Act.

CHANGE OF NAME OF THE SEPARATE ACCOUNTS

The Company reserves the right, subject to compliance with applicable law, to
change the names of the Separate Accounts.

LEGAL MATTERS

There are no legal proceedings pending to which any Separate Account is a party.

FURTHER INFORMATION

A Registration Statement under the Securities Act of 1933 relating to this
offering has been filed with the Securities and Exchange Commission. Certain
portions of the Registration Statement and amendments have been omitted from
this Prospectus pursuant to the rules and regulations of the Commission. The
omitted information may be obtained from the Commission's principal office in
Washington, D.C., upon payment of the Commission's prescribed fees.

APPENDIX A

MORE INFORMATION ABOUT THE GENERAL ACCOUNT

Because of exemption and exclusionary provisions in the securities laws,
interests in the General Account are not generally subject to regulation under
the provisions of the Securities Act of 1933 or the Investment Company Act of
1940. Disclosures regarding the fixed portion of the annuity contract and the
General Account may be subject to the provisions of the Securities Act of 1933
concerning the accuracy and completeness of statements made in the Prospectus.
The disclosures in this APPENDIX A have not been reviewed by the Securities and
Exchange Commission.

<PAGE>

The General Account of the Company is made up of all of the general assets of
the Company other than those allocated to any Separate Account. Allocations to
the General Account become part of the assets of the Company and are used to
support insurance and annuity obligations.

A portion or all of net purchase payments may be allocated to accumulate at a
fixed rate of interest in the General Account. Such net amounts are guaranteed
by the Company as to principal and a minimum rate of interest. Under Elective
Payment Policies, the minimum interest which may be credited on amounts
allocated to the General Account is 4.5% compounded annually for the first five
policy years, 4% compounded annually for the next five policy years, and 3.5%
compounded annually thereafter. Under Single Payment Policies, the minimum
interest which may be credited on amounts allocated to the General Account is
3.5% compounded annually. Additional "Excess Interest" may or may not be
credited at the sole discretion of the Company.

If a Policy is surrendered, or if an Excess Amount is redeemed, while the Policy
is in force and before the Annuity Date, a contingent deferred sales charge is
imposed if such event occurs before the Policy has been in force for nine full
policy years under an Elective Payment Policy, or seven full policy years under
a Single Payment Policy. Surrenders and redemptions are made on a
last-in/first-out basis.

LOANS FROM THE GENERAL ACCOUNT (QUALIFIED POLICIES ONLY)

Loans will be permitted only for TSAs and Policies issued to a plan qualified
under Section 401(a) of the Code. Loans are permitted only from a Policy's
accumulation in the General Account. The maximum loan amount is the amount
determined under the Company's maximum loan formula for qualified plans. The
minimum loan amount is $2,500. Loans will be secured by a security interest in
the Policy. Loans are subject to applicable retirement legislation and their
taxation is determined under the Federal income tax laws. The amount borrowed
will be transferred to a fixed, minimum guarantee loan assets account in the
Company's General Account, where it will accrue interest at a specified rate
below the then current loan interest rate. Generally, loans must be repaid
within five (5) years.

The amount of the death benefit, the amount payable on a full surrender and the
amount applied to provide an annuity on the Annuity Date will be reduced to
reflect any outstanding loan balance (plus accrued interest thereon). Partial
withdrawals may be restricted by the maximum loan limitation.

APPENDIX B

INFORMATION ABOUT DISCONTINUED POLICIES

This Prospectus is sent to owners of certain discontinued series of the
Company's variable annuity Policies including group annuity contracts (Group
Contracts) sold to fund Code Section 403(b) annuity plans, discontinued May 1,
1980, a series of individual flexible payment variable annuity contracts
(Flexible Contracts) discontinued October 15, 1975, and a series of individual
elective payment variable annuity Policies (Elective Policies) discontinued
February 12, 1980. Such policies differ in some respects from the Policies
described in this Prospectus. The significant differences between the
discontinued contracts and the Policies described in this Prospectus are
summarized below. For more detailed information contractholders should refer to
their contract or to the prospectus received at the time of purchase.

A. DISCONTINUED GROUP CONTRACTS. The discontinued Group Contracts differ from
the Policies described in this Prospectus in the following significant respects:

MASTER CONTRACTS. Under Group Contracts, a Master Group Contract is issued to
the employer. Enrolled employees are issued participation certificates which
set forth the participant's benefits under the contracts.

ACCUMULATION ACCOUNTS. Accumulation in the Separate Accounts investing in the
Investment Grade Income Fund and the Money Market Fund is not available under
Group Contracts.

SALES AND ADMINISTRATIVE EXPENSE CHARGE. Under Group Contracts, a charge for
sales and administrative expense is made from each purchase payment which
differs depending on whether the optional special minimum death benefit (MDB)
was purchased. Without the MDB the charge is 6.5% of each purchase payment
during the first 10 years of participation and 5.0% of each payment made
thereafter; with the MDB, the charge is 7.0% during the first 10 years of
participation and 6.0% thereafter.

<PAGE>

SPECIAL MINIMUM DEATH BENEFIT. Under the optional MDB referred to above, in the
event of the participant's death on or before the Annuity Date, the death
benefit is the greater of (a) and (b) where (a) is the participant's accumulated
value as of the valuation date coincident with or next following receipt by the
Company of due proof of the participant's death and (b) is 100% of the purchase
payments made on the participant's behalf minus the dollar amount of all partial
redemptions if death occurs prior to the participant's 65th birthday and 75% of
the purchase payments made on the participant's behalf minus the dollar amount
of all redemptions if death occurs thereafter. The appropriate amount will be
paid to the beneficiary in one sum unless an annuity option is elected by the
beneficiary. Without the MDB, the pre-retirement death benefit is equal to the
participant's accumulated value.

ASSET CHARGE. Under the Group Contracts, the maximum limitation on the asset
charge is 1.50%.

PURCHASE PAYMENT MINIMUM. Under Group Contracts, each purchase payment must be
at least $25 for each participant. If the payment is split between the fixed
and variable accounts, the minimum which can be allowed to an account is $10.

ASSUMED INTEREST RATE. When electing a variable annuity option, the Participant
selects an assumed interest rate of 3 1/2% or 5%. If the investment performance
for a particular period is greater than the assumed interest rate for the same
period, the annuity payments will increase; if the investment performance is
less than the assumed interest rate, the payment will decrease.

B. DISCONTINUED FLEXIBLE CONTRACTS. The discontinued Flexible Contracts differ
from the Policies described in this Prospectus in the following significant
respects:

ACCUMULATION ACCOUNTS. Accumulation in the Separate Accounts investing in the
Investment Grade Income Fund and the Money Market Fund is not available under
Flexible Contracts. In addition, under Flexible Contracts prior to the 1969
series, accumulation on a fixed basis is not available.

SALES AND ADMINISTRATIVE EXPENSE CHARGES. Under Flexible Contracts a deduction
is made from purchase payments for sales and administrative expense as follows:

<TABLE>
<CAPTION>
Portion
Representing
Portion Administrative
Portion of Percentage Representing and Other
Total Payments Deduction Sales Charge Expense Charge
-------------- --------- ------------ --------------

<S> <C> <C> <C>
First $10,000 10.0% 8.0% 2.0%
Next 15,000 9.0 6.5 2.5
Next 25,000 8.0 5.5 2.5
Next 25,000 7.0 5.0 2.0
Next 25,000 6.0 4.0 2.0
Balance 5.0 3.5 1.5

</TABLE>

There is no semi-annual policy fee under Flexible Contracts.

SURRENDER CHARGE. Under Flexible Contracts a charge is made on amounts
withdrawn or on contract surrenders during the first five contract years equal
to 2% of the amount surrendered or withdrawn.

ASSET CHARGE. Under Flexible Contracts, the maximum limitation on the asset
charge is 1.50%.

PRE-RETIREMENT DEATH BENEFIT. Under Flexible Contracts the pre-retirement death
benefit is equal to the accumulated value; there is no minimum death benefit.

PAYMENT MINIMUMS. Under Flexible Contracts, payments after the first must be at
least $100 or $25 in connection with the monthly automatic payment plan or any
employee benefit plan or for dividend transfers from insurance policies or
annuities written by State Mutual.

VOTING RIGHTS. Under Flexible Contracts the owner has voting rights after the
Annuity Date.

<PAGE>

ASSUMED INTEREST RATE. Under Flexible Contracts, annuity options are available
with a 3 1/2% or a 5% assumed interest rate as described above under
"Discontinued Group Contracts".

C. DISCONTINUED ELECTIVE POLICIES. The discontinued Elective Policies differ
from the Policies described in this Prospectus in the following significant
respects:

ACCUMULATION ACCOUNTS. Accumulation under the Money Market Account is not
available under Elective Policies.

SALES AND ADMINISTRATIVE EXPENSE CHARGE. Under Elective Policies a deduction is
made from purchase payments for sales and administrative expense as follows:

(1) Under elective payment variable annuity Policies, the charge for sales and
administrative expense during the first ten contract years is a percentage
of total purchase payments based on the following table:

<TABLE>
<CAPTION>
Portion
Representing
Portion Charge for
Portion of Percentage Representing Administrative
Total Payments Deduction Sales Charge Expense
-------------- --------- ------------ -------

<S> <C> <C> <C>
First $12,000 8.75% 6.50% 2.25%
Next 13,000 8.25 6.00 2.25
Next 25,000 7.25 5.00 2.25
Next 25,000 6.25 4.25 2.00
Next 25,000 5.25 3.50 1.75
Balance 4.25 2.75 1.50

</TABLE>

After the tenth Policy anniversary, all payments under elective payment Policies
will be charged at the rate of 4.25%.

(2) Where a purchase payment under an elective payment Policy arises from
amounts payable under insurance Policies or annuities (such as death
benefits, maturities under endowment contracts, surrender values and
dividends) written by State Mutual, insurance policies written by the
Company, or death benefits under fixed or variable annuities written by the
Company, the charge for sales and administrative expense which is applied
to such payment is based on the following table:

<TABLE>
<CAPTION>
Portion Representing
Portion Charge for
Portion of Percentage Representing Administrative
Total Payments Deduction Sales Charge Expense
-------------- --------- ------------ -------

<S> <C> <C> <C>
First $12,000 5.50% 3.25% 2.25%
Next 13,000 4.50 2.25 2.25
Next 25,000 3.50 1.50 2.00
Balance 2.50 .75 1.75

</TABLE>

After the tenth Policy anniversary, all payments will be charged at the rate of
2.50%.
There is no surrender or withdrawal charge on Elective Policies.
There is no semi-annual policy fee on Elective Policies.

ASSUMED INTEREST RATE. Under Elective Policies, annuity options are available
with a 3 1/2% or a 5% assumed interest rate as described above under
"Discontinued Group Contracts".

PARTIAL REDEMPTION AND REPAYMENT UNDER NON-QUALIFIED CONTRACTS. Upon written
request signed by the Policy Owner filed at the Company's principal office, an
owner of an Elective Policy may redeem a portion of the accumulated value of his
or her Policy, subject to limits described below, and such amounts may be repaid
fully or in part at any time within a two-year period from the date of the
redemption without imposition of a charge for sales and administrative expense.
A transaction fee of $20 will be deducted from the amount of any such
redemption. Each partial redemption and each repayment must be in a minimum
amount of $200. Because the transaction fee is deducted at the time an amount
is redeemed, the Policy

<PAGE>

Owner should utilize this Policy provision only where he or she intends to repay
such amounts. Further, a Policy Owner considering utilizing this provision to
redeem small amounts should consider whether the charge for sales and
administrative expense, applicable upon repayment of such amounts in absence of
this provision, would be less than the $20 transaction fee. If any amount is
repaid at a time when the annuity rates contained in the Company's then
currently offered variable annuity Policies are less favorable than the annuity
rates contained in the Policy Owner's Policy, the Company reserves the right to
apply such less favorable rates to the portion of the Policy's accumulated value
attributable to the repayment.

A partial redemption will result in cancellation of a number of units equivalent
in value to the amount of the partial redemption, including the $20 transaction
fee as of the Valuation Date the request is received at the Company's principal
office. At the time a repayment is made, a number of units will be credited
equivalent to the amount repaid as of the Valuation Date the repayment is
received at the Company's principal office.

Partial redemption and repayment will not be permitted if the total of all
partial redemptions outstanding at any one time would exceed the total amount of
all payments made under the Policy, exclusive of repayments, minus the amount of
any partial redemptions or, if the withdrawal would reduce the owner's
accumulated value under the Policy to less than $500.

36
<PAGE>

ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY
INDIVIDUAL VARIABLE ANNUITY POLICIES
STATEMENT OF ADDITIONAL INFORMATION

Separate Account VA-A

Separate Account VA-B Separate Account VA-G
Separate Account VA-C Separate Account VA-H

THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS. IT SHOULD BE READ
IN CONJUNCTION WITH THE PROSPECTUS OF THE ABOVE LISTED SEPARATE ACCOUNTS DATED
MAY 1, 1995 ("THE PROSPECTUS"). THE PROSPECTUS MAY BE OBTAINED FROM INDIVIDUAL
CUSTOMER SERVICES, ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY 440
LINCOLN STREET, WORCESTER, MASSACHUSETTS 01653.

DATED OCTOBER 1, 1995

<PAGE>

STATEMENT OF ADDITIONAL INFORMATION

TABLE OF CONTENTS

GENERAL INFORMATION AND HISTORY. . . . . . . . . . . . . . 2

TAXATION OF THE SEPARATE ACCOUNTS AND THE
COMPANY. . . . . . . . . . . . . . . . . . . . . . . . . . 3

SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . 3

UNDERWRITERS . . . . . . . . . . . . . . . . . . . . . . . 3

ANNUITY PAYMENTS . . . . . . . . . . . . . . . . . . . . . 4

PERFORMANCE INFORMATION. . . . . . . . . . . . . . . . . . 5

FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . 8

GENERAL INFORMATION AND HISTORY

Separate Account VA-A, Separate Account VA-B, Separate Account VA-C, Separate
Account VA-G, and Separate Account VA-H are separate investment accounts of
Allmerica Financial Life Insurance and Annuity Company ("Company"). The Company
was formerly known as SMA Life Assurance Company until October 1, 1995. The
Company is a life insurance company organized under the laws of Delaware in July
1974. Its principal office is located at 440 Lincoln Street, Worcester,
Massachusetts 01653, telephone (508) 855-1000. The Company is wholly-owned by
SMA Financial Corp., a Massachusetts holding company which is in turn wholly-
owned by State Mutual Life Assurance Company of America ("State Mutual"). State
Mutual, 440 Lincoln Street, Worcester, Massachusetts, is a mutual life insurance
company organized under the laws of Massachusetts in 1844. State Mutual is in
the process of converting from a mutual life insurance company to a stock life
insurance company ("demutualization"). Following demutualization, State Mutual
will be known as First Allmerica Financial Life Insurance Company and will be a
wholly owned subsidiary of Allmerica Financial Corporation, 440 Lincoln Street,
Worcester, Massachusetts

The Separate Accounts were organized originally as open-end management
investment companies under the 1940 Act. The reorganization of the Separate
Accounts as unit investment trusts was approved by Policy Owners on April 18,
1985 and was effective on April 29, 1985.

Separate Account VA-A (named the American Variable Annuity Fund before January
1, 1982) was authorized by vote of the Board of Directors of the Company on
March 31, 1967. Separate Accounts VA-B and VA-C (named the A.V.A. Income Fund
and the A.V.A. Qualified Income Fund, respectively, before January 1, 1982) were
authorized by vote of the Board of Directors of the Company on July 30, 1974.
Separate Accounts VA-G and VA-H were authorized by vote of the Board of
Directors of the Company on February 24, 1983.

As of December 31, 1994, 0% of the assets of Separate Account VA-H was
attributable to the capital contributed by the Company to establish the Account.

-2-

<PAGE>

TAXATION OF THE SEPARATE
ACCOUNT AND THE COMPANY

The Separate Account are considered to be a part of and taxed with the
operations of the Company. The Company is taxed as a life insurance company
under subchapter L of the Code and files a consolidated tax return with its
parent and affiliated companies.

The Company intends to make a charge for any effect which the income, assets, or
existence of the Separate Account may have upon its tax. The Separate Account
presently are not subject to tax, but the Company reserves the right to assess a
charge for taxes should the Separate Accounts at any time become subject to tax.
Such charge for taxes, if any, will be assessed on a fair and equitable basis in
order to preserve equity among classes of Policy Owners and with respect to each
Separate Account as though that Separate Account were a separate taxable entity.
Accordingly, the charge for taxes may be made irrespective of whether any taxes
are payable currently by the Company. Conversely, if any Separate Account would
be entitled to a tax refund on a separate entity basis at any such time, an
equivalent amount will be credited to that Separate Account by the Company at
such time as the Separate Account would have become entitled to such refund if a
separate taxable entity. Under such policy, the Company may derive a temporary
or permanent benefit in the form of reduced taxes. Any federal income taxes
applicable to assets of the Company in the Separate Accounts and not
attributable to the Policies shall be paid by the Company and shall not affect
Accumulation or Annuity Unit values.

SERVICES

CUSTODIAN OF SECURITIES. The Company serves as custodian of the assets of the
Separate Account. Fund shares owned by the Separate Accounts are held on an
open account basis with Separate Account ownership of Fund shares reflected on
the records of the Funds and not represented by any transferable stock
certificates.

EXPERTS. The financial statements of the Company as of December 31, 1994 and
1993 and for each of the three years in the period ended December 31, 1994
and of the Separate Accounts of the Company as of December 31, 1994 and
for the two years then ended, included in this Statement of Additional
Information constituting part of the Registration Statement, have been so
included in reliance on the report of Price Waterhouse LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.

The financial statements of the Company included herein should be considered
only as bearing on the ability of the Company to meet its obligations under the
Policies.

UNDERWRITERS

Allmerica Investments, Inc., a registered broker-dealer under the Securities
Exchange Act of 1934 and a member of the National Association of Securities
Dealers, Inc. (NASD), serves as principal underwriter and general distributor
for the Policies pursuant to a contract between Allmerica Investments, Inc., the
Company, and the Separate Accounts. Allmerica Investments, Inc. distributes the
Policies on a best efforts basis. Allmerica Investments, Inc., 440 Lincoln
Street, Worcester, Massachusetts 01653 was organized in 1969 as a wholly-owned
subsidiary of State Mutual and is, at present, indirectly wholly-owned by State
Mutual.

The Policies offered by this Prospectus are offered continuously and may be
purchased from NASD registered representatives of Allmerica Investments, Inc.
and from certain independent broker-dealers which are NASD members and whose
representatives are authorized by applicable law to sell

-3-

<PAGE>

variable annuity policies.

Commissions are paid by the Company to its licensed insurance agents on sales of
the Policies. The Company intends to recoup the commission and other sales
expense through a combination of anticipated surrender, partial redemption,
and/or annuitization charges the investment earnings on amounts allocated to
accumulate on a fixed basis in excess of the interest credited on fixed
accumulations by the Company, and the profit, if any, from the mortality and
expense risk charge.

All persons selling the Policies are required to be licensed by their respective
state insurance authorities for the sale of variable annuity policies.
Registered representatives of Allmerica Investments, Inc. receive commissions on
the purchase payments of elective and single payment Policies equal to 5% and
3%, respectively. Managers who supervise the agents will receive overriding
commissions ranging up to no more than 2% of purchase payments. Independent
broker-dealers receive commissions of 5% and 4%, respectively, of which a
portion is paid to their registered representatives.

The aggregate amount of commissions paid to representatives of Allmerica
Investments, Inc. with respect to sales of the Company's Variable Annuity
Policies was $26,842,152.00 in 1994, $21,276,666.00 in 1993 and $20,808,483.00
in 1992.

These commissions are paid by the Company and do not result in any charge to
Policy Owners or to the Separate Account in addition to the charges described
under "CHARGES AND DEDUCTIONS" in the Prospectus.

ANNUITY PAYMENTS

The method by which the Accumulated Value under the Policy is determined is
described in detail under "K. Computation of Policy Values and Annuity
Payments"" in the Prospectus.

ILLUSTRATION OF ACCUMULATION UNIT CALCULATION USING HYPOTHETICAL EXAMPLE. The
Accumulation Unit calculation for a daily Valuation Period may be illustrated by
the following hypothetical example: Assume that the assets of a separate
account at the beginning of a one-day Valuation Period were $5,000,000; that the
value of an Accumulation Unit on the previous date was $1.135000; and that
during the Valuation Period, the investment income and net realized and
unrealized capital gains exceed net realized and unrealized capital losses by
$1,675. The Accumulation Unit value at the end of the current Valuation Period
would be calculated as follows:

<TABLE>
<CAPTION>
<S> <C>
(1) Accumulation Unit Value - Previous Valuation Period. . . . . . . $ 1.135000

(2) Value of Assets - Beginning of Valuation Period. . . . . . . . . $5,000,000

(3) Excess of investment income and net gains over capital losses. . . . $1,675

(4) Adjusted Gross Investment Rate for the valuation period (3):(2). . 0.000335

(5) Annual Charge (one day equivalent of 1.25% per annum). . . . . . . 0.000034

(6) Net Investment Rate (4)-(5). . . . . . . . . . . . . . . . . . . . 0.000301

(7) Net Investment Factor 1.000000 + (6) . . . . . . . . . . . . . . . 1.000301

(8) Accumulation Unit Value - Current Period (1)x(7) . . . . . . . . $ 1.135342
</TABLE>

-4-

<PAGE>

Conversely, if unrealized capital losses and charges for expenses and taxes
exceeded investment income and net realized capital gains by $1,675, the
accumulated unit value at the end of the Valuation Period would have been
$1.134581.

The method for determining the amount of annuity payments is described in detail
under "K. Computation of Policy Values and Annuity Payments" in the Prospectus.

ILLUSTRATION OF VARIABLE ANNUITY PAYMENT CALCULATION USING HYPOTHETICAL EXAMPLE.
The determination of the Annuity Unit value and the variable annuity payment
may be illustrated by the following hypothetical example: Assume an Annuitant
has 40,000 Accumulation Units in a Separate Account, and that the value of an
Accumulation Unit on the Valuation Date used to determine the amount of the
first variable annuity payment is $1.120000. On this basis, the Accumulated
Value of the Policy is $44,800 (40,000 x $1.120000). Assume also that the
Policy Owner elects an option for which the first monthly payment is $6.57 per
$1,000 of Accumulated Value applied. Assuming no premium tax or contingent
deferred sales charge, the first monthly payment would be 44.800 multiplied by
6.57 or $294.34.

Assume that the Annuity Unit value for the assumed rate of 3-1/2% per annum for
the Valuation Date as of which the first payment was calculated was $1.100000.
(Annuity Unit values will not be the same as Accumulation Unit values because
the former reflect the 3-1/2% assumed interest rate used in the annuity rate
calculations. See "The Annuity Unit".) When this is divided into the first
monthly payment the number of Annuity Units represented by that payment is
determined to be 267.5818. The value of this same number of Annuity Units will
be paid in each subsequent month under most options. Assume further that the
net investment factor for the Growth Account for the Valuation Period applicable
to the next annuity payment is 1.000190. Multiplying this factor by .999906
(the one-day adjustment factor for the assumed interest rate of 3-1/2% per
annum) produces a factor of 1.000096. This is then multiplied by the Annuity
Unit value on the immediately preceding Valuation Date (assumed here to be
$1.105000). The result is an Annuity Unit value of $1.105106 for the current
monthly payment. The current monthly payment is then determined by multiplying
the number of Annuity Units by the current Annuity Unit value, or 267.5818 times
$1.105106, which produces a current monthly payment of $295.71.

PERFORMANCE INFORMATION

TOTAL RETURN

"Total Return" refers to the total of the income generated by an investment in a
Separate Account and of the changes of value of the principal invested (due to
realized and unrealized capital gains or losses) for a specified period, reduced
by the Separate Account's asset charge and any applicable contingent deferred
sales load which would be assessed upon complete redemption of the investment.

The Total Return figures are calculated by standardized methods prescribed by
rules of the Securities and Exchange Commission. The quotations are computed by
finding the average annual compounded rates of return over the specified periods
that would equate the initial amount invested to the ending redeemable values,
according to the following formula:
(n)
P(1 + T) = ERV

Where: P = a hypothetical initial payment to the Separate Account of $1,000

-5-

<PAGE>

T = average annual total return

n = number of years

ERV = the ending redeemable value of the $1,000 payment at the end of the
specified period

The calculation of Total Return includes the annual charges against the assets
of the Separate Account. Prior to April 29, 1985 this charge is 1.50% on an
annual basis. From that date to February 15, 1991 the charge was 0.90% on an
annual basis. Since February 15, 1991, the charge has been 1.25% on an annual
basis. The calculation of ending redeemable value assumes the policy was issued
at the beginning of the period and a complete surrender of the policy at the
end of the period. The deduction of the contingent deferred sales charge, if
any, applicable at the end of the period is included in the calculation,
according to the following schedule:

(1) For Elective Payment Policies:

<TABLE>
<CAPTION>
Policy year in which Charge as Percentage
Complete Redemption Occurs of Amount Redeemed*
-------------------------- -------------------
<S> <C>
1-3 7%
4 6%
5 5%
6 4%
7 3%
8 2%
9 1%
</TABLE>

(2) For Single Payment Policies:
<TABLE>
<CAPTION>

Policy year in which Charge as Percentage
Complete Redemption Occurs of Amount Redeemed*
-------------------------- -------------------
<S> <C>
1-3 5%
4 4%
5 3%
6 2%
7 1%
</TABLE>

*Subject to the maximum limit described in the prospectus.

No contingent deferred sales charge is deducted upon expiration of the periods
specified above. After the first policy year, 10% of the amount redeemed is not
subject to the contingent sales load.

The calculations of Total Return for the Elective Payment policies does not
include the deduction of the $9 semi-annual charge for administrative expenses,
which is deducted from Elective payment policies with an Accumulated Value of
$10,000 or less. If a policy were subject to this charge, its Total Return with
respect to a Separate Account would be reduced to the extent by which a portion
of the charge is assessed to policy value in that Separate Account.

-6-

<PAGE>

SUPPLEMENTAL TOTAL RETURN INFORMATION

The Supplemental Total Return information in this section refers to the total of
the income generated by an investment in a Separate Account and of the changes
of value of the principal invested (due to realized and unrealized capital gains
or losses) for a specified period reduced by the Separate Account's asset
charges. However, it is assumed that the investment is NOT redeemed at the end
of each period. Because the contingent deferred sales load is NOT included in
the calculations, the Supplemental Total Return information is the same for both
Elective Payment Policies and Single Payment Policies.

The quotations of Supplemental Total Return are computed by finding the average
annual compounded rates of return over the specified periods that would equate
the initial amount invested to the ending values, according to the following
formula:
(n)
P(1 + T) = EV

Where: P = a hypothetical initial payment to the Separate Account of $1,000

T = average annual total return

n = number of years

EV = the ending value of the $1,000 payment at the end of the specified
period

The calculation of Supplemental Total Return reflects the annual charge against
the assets of the Separate Account. Prior to April 29, 1985 this charge was
1.50% on an annual basis. From that date to February 15, 1991 the charge was
0.90% on an annual basis. Since February 15, 1991, the charge has been 1.25% on
an annual basis. The ending value assumes that the policy is NOT redeemed at
the end of the specified period, and there is therefore no adjustment for the
contingent deferred sales charge that would be applicable if the policy was
redeemed at the end of the period.

The calculations of Supplemental Total Return for the Elective Payment policies
does not include the deduction of the $9 semi-annual charge for administrative
expenses, which is deducted from Elective Payment policies with an Accumulated
Value of $10,000 or less. If a policy were subject to this charge, its
Supplemental Total Return with respect to a Separate Account would be reduced to
the extent by which a portion of the charge is assessed to policy value in that
Separate Account.

YIELD AND EFFECTIVE YIELD - SEPARATE ACCOUNTS VA-G AND VA-H

Set forth below is yield and effective yioeld information for Separate Accounts
VA-G and VA-H, for the seven-day period ended December 31, 1994:

VA-G VA-H
Yield 2.44% 2.47%
Effective Yield 2.44% 2.47%

The yield and effective yield figures are calculated by standardized methods
prescribed by rules of the Securities and Exchange Commission. Under those
methods, the yield quotation is computed by determining the net change
(exclusive of capital changes) in the value of a hypothetical pre-existing
account having a balance of one accumulation unit of the respective Separate
Account at

-7-

<PAGE>

the beginning of the period, subtracting a charge reflecting the annual 0.90%
deduction for mortality and expense risk, dividing the difference by the value
of the account at the beginning of the same period to obtain the base period
return, and then multiplying the return for a seven-day base period by (365/7),
with the resulting yield carried to the nearest hundredth of one percent.

Separate Accounts VA-G and VA-H compute effective yield by compounding the
unannualized base period return by using the formula:
(365/7)
Effective Yield = [(base period return + 1) ] - 1

The calculations of yield and effective yield do NOT reflect the $9 semi-annual
charge for administrative expenses which deducted from Elective Payment policies
with Accumulated Value of $10,000 or less. If a policy were subject to this
charge, its yield or effective yield with respect to a Separate Account would be
reduced to the extent by which a portion of the charge is assessed to policy
value in the Separate Account.

FINANCIAL STATEMENTS

Financial Statements are included for Separate Accounts VA-A, VA-B, VA-C, VA-G
and VA-H of the Company and for the Company.

-8-

<PAGE>

SMA LIFE ASSURANCE COMPANY

FINANCIAL STATEMENTS

DECEMBER 31, 1994 and 1993

<PAGE>

SMA LIFE ASSURANCE COMPANY

December 31, 1994

Financial Statements
Report of Independent Accountants. . . . . . . . . . . . . . . . . . . . . . . 1
Statement of Financial Position. . . . . . . . . . . . . . . . . . . . . . . . 2
Statement of Operations and Changes in Stockholder's Equity. . . . . . . . . . 3
Statement of Cash Flows. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Notes to Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . 5

<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

February 13, 1995

To the Board of Directors and Stockholder of
SMA Life Assurance Company

In our opinion, the accompanying statement of financial position and the related
statements of operations and changes in stockholder's equity and of cash flows
present fairly, in all material respects, the financial position of SMA Life
Assurance Company at December 31, 1994 and 1993, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1994, in conformity with generally accepted accounting principles.
These financial statements are the responsibility of the Company's management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which 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,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.

As discussed in Note 1 to the financial statements, the Company may adopt
Statement of Financial Accounting Standards No. 120, "Accounting and Reporting
by Mutual Life Insurance Enterprises and by Insurance Enterprises for Certain
Long-Duration Participating Contracts", and Financial Accounting Standards Board
Interpretation No. 40, "Applicability of Generally Accepted Accounting
Principles to Mutual Life Insurance and Other Enterprises", in 1996. If these
pronouncements are adopted, the financial statements for the year ended December
31, 1994 will be retroactively restated for the effects of these changes in
accounting principles.

Price Waterhouse LLP
Boston, Massachusetts

<PAGE>

SMA LIFE ASSURANCE COMPANY
(A Wholly Owned Subsidiary of State Mutual Life Assurance Company of America)

STATEMENT OF FINANCIAL POSITION
as of December 31
(in thousands)

ASSETS 1994 1993
---- ----
<S> <C> <C>
Cash $ 7,248 $ 10,172
Investments:
Bonds 1,595,275 1,567,658
Stocks 12,283 23,478
Mortgage loans 295,532 383,059
Policy loans 116,600 109,014
Real estate 51,288 40,904
Short term investments 45,239 4,999
Other investment assets 27,443 314
----------- -----------
Total cash and investments 2,150,908 2,148,598

Premiums deferred and uncollected 5,452 6,953
Investment income due and accrued 39,442 39,993
Other assets 6,548 12,560
Assets held in separate accounts 1,869,695 1,296,620
----------- -----------

$ 4,072,045 $ 3,504,724
----------- -----------
----------- -----------
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:

Policy liabilities:
Life reserves $ 890,880 $ 905,813
Annuity and other fund reserves 928,325 925,098
Accident and health reserves 121,580 115,081
Claims payable 11,720 10,476
----------- -----------

Total policy liabilities 1,952,505 1,956,468

Expenses and taxes payable 17,484 43,123
Other liabilities 32,445 26,069
Asset valuation reserve 20,786 10,964
Obligations related to separate account business 1,859,502 1,285,884
----------- -----------

Total liabilities 3,882,722 3,322,508
----------- -----------

Stockholder's equity:
Common stock, $1,000 par value
Authorized - 10,000 shares
Issued and outstanding - 2,517 shares 2,517 2,517
Additional paid-in capital 199,307 199,307
Unassigned deficit (13,621) (20,744)
Special contingency reserves 1,120 1,136
----------- -----------
Total stockholder's equity 189,323 182,216
----------- -----------

$ 4,072,045 $ 3,504,724
----------- -----------
----------- -----------
</TABLE>

The accompanying notes are an integral part of these financial statements.

2
<PAGE>

SMA LIFE ASSURANCE COMPANY
(A WHOLLY OWNED SUBSIDIARY OF STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA)

STATEMENT OF OPERATIONS AND
CHANGES IN STOCKHOLDER'S EQUITY
for the year ended December 31
(In thousands)

REVENUE 1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Premiums and other considerations:
Life $ 195,633 $ 189,285 $ 181,992
Annuities 707,172 660,143 365,443
Accident and health 31,927 35,718 35,612
Reinsurance commissions and reserve adjustments 4,195 2,309 2,372
---------- ---------- ----------

Total premiums and other considerations 938,927 887,455 585,419

Net investment income 170,430 177,612 183,159
Realized capital gains (losses), net of tax (17,172) (7,225) 576
Other revenue 26,065 19,055 13,224
---------- ---------- ----------

Total revenue 1,118,250 1,076,897 782,378
---------- ---------- ----------

POLICY BENEFITS AND OPERATING EXPENSES
Policy benefits:
Claims, surrenders and other benefits 331,418 275,290 250,317
Increase in policy reserves 40,113 15,292 159,127
---------- ---------- ----------

Total policy benefits 371,531 290,582 409,444

Operating and selling expenses 164,175 160,928 134,482
Taxes, except capital gains tax 22,846 19,066 29,540
Net transfers to separate accounts 553,295 586,539 199,164
---------- ---------- ----------

Total policy benefits and operating expenses 1,111,847 1,057,115 772,630
---------- ---------- ----------

NET INCOME 6,403 19,782 9,748

STOCKHOLDER'S EQUITY AT BEGINNING OF YEAR 182,216 171,941 177,809
Unrealized capital gains (losses) on investments 12,170 (9,052) (20,770)
Transfer from (to) asset valuation reserve (9,822) 1,974 2,883
Other adjustments (1,644) (2,429) 2,271
---------- ---------- ----------

STOCKHOLDER'S EQUITY AT END OF YEAR $ 189,323 $ 182,216 $ 171,941
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

The accompanying notes are an integral part of these financial statements.

<PAGE>

SMA LIFE ASSURANCE COMPANY
(A WHOLLY OWNED SUBSIDIARY OF STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA)

STATEMENT OF CASH FLOWS
for the year ended December 31
(In thousands)

CASH FLOW FROM OPERATING ACTIVITIES 1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Premiums, deposits and other income $ 962,147 $ 902,725 $ 602,253
Allowances and reserve adjustments on
reinsurance ceded 3,279 22,185 18,918
Net investment income 173,294 182,843 182,531
Net increase in policy loans (7,585) (7,812) (8,777)
Benefits to policyholders and beneficiaries (330,900) (298,612) (257,274)
Operating and selling expenses and taxes (213,399) (176,361) (126,421)
Net transfers to separate accounts (600,760) (634,021) (221,492)
Other sources (applications) 19,868 7,757 (43,869)
---------- ---------- ----------

NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES 5,944 (1,296) 145,869
---------- ---------- ----------

CASH FLOW FROM INVESTING ACTIVITIES
Sales and maturities of long term investments:
Bonds 478,512 386,414 400,636
Stocks 63 64 80
Real estate and other invested assets 3,008 11,094 4,350
Repayment of mortgage principal 65,334 79,844 95,972
Capital gains tax (968) (3,296) --
Acquisition of long term investments:
Bonds (508,603) (466,086) (710,371)
Stocks -- -- (2,617)
Real estate and other invested assets (24,544) (2,392) (1,910)
Mortgage loans (364) (2,266) (852)
Other investing activities 18,934 (27,254) (3,001)
---------- ---------- ----------

NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES 31,372 (23,878) (217,713)
---------- ---------- ----------

Net change in cash and short term investments 37,316 (25,174) (71,844)

CASH AND SHORT TERM INVESTMENTS
Beginning of the year 15,171 40,345 112,189
---------- ---------- ----------

End of the year $ 52,487 $ 15,171 $ 40,345
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

The accompanying notes are an integral part of these financial statements.

4
<PAGE>

SMA LIFE ASSURANCE COMPANY
(A WHOLLY OWNED SUBSIDIARY OF STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA)

NOTES TO FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND BASIS OF PRESENTATION - SMA Life Assurance Company (SMA Life or
the "Company") is a wholly owned subsidiary of SMA Financial Corp., which is
wholly owned by State Mutual Life Assurance Company of America (State Mutual), a
mutual life insurance company. The stockholder's equity of the Company is being
maintained at a minimum level of 5% of general account assets by State Mutual in
accordance with a policy established by vote of State Mutual's Board of
Directors.

The Company's financial statements have been prepared on the basis of accounting
practices prescribed or permitted by the Insurance Department of the State of
Delaware and in conformity with practices prescribed by the National Association
of Insurance Commissioners (NAIC), which are generally accepted accounting
principles for mutual life insurance companies and their stock life insurance
subsidiaries.

Certain reclassifications have been made to prior year amounts to conform with
the current year presentation.

VALUATION OF INVESTMENTS - Investments in bonds are carried principally at
amortized cost, in accordance with NAIC guidelines. Preferred stocks are
carried generally at cost and common stocks are carried at market value. Policy
loans are carried principally at unpaid principal balances.

Mortgage loans on real estate are stated at unpaid principal balances, net of
unamortized discounts. Mortgage loans are reduced for losses expected by
management to be realized on transfers of mortgage loans to real estate (upon
foreclosure), on the disposition or settlement of mortgage loans and on mortgage
loans which management believes may not be collectible in full. In determining
the amount of the loss, management considers, among other things, the estimated
fair value of the underlying collateral. Investment real estate and real estate
acquired through foreclosure are carried at the lower of depreciated cost or
market value.

An asset valuation reserve (AVR) for bonds, mortgage loans, stocks, real estate,
and other invested assets is maintained by appropriations from surplus in
accordance with a formula specified by the NAIC and is classified as a
liability.

FINANCIAL INSTRUMENTS - In the normal course of business, the Company enters
into transactions involving various types of financial instruments including
investments such as bonds and stocks and investment and loan commitments. These
instruments involve credit risk and also may be subject to risk of loss due to
interest rate fluctuations. The Company evaluates and monitors each financial
instrument individually and, when appropriate, obtains collateral or other
security to minimize losses.

RECOGNITION OF PREMIUM INCOME AND ACQUISITION COSTS - In general, premiums are
recognized as revenue over the premium paying period of the policies;
commissions and other costs of acquiring the policies are charged to operations
when incurred.

SEPARATE ACCOUNTS - Separate account assets and liabilities represent segregated
funds administered and invested by the Company for the benefit of certain
variable annuity and variable life contractholders. Assets consist principally
of bonds, common stocks, and short term obligations at market value. The
investment income, gains, and losses of these accounts generally accrue to the
contractholders and therefore, are not included in the Company's net income.
Appreciation and depreciation of the Company's interest in the separate
accounts, including undistributed net investment income, is reflected in
stockholder's equity.

INSURANCE RESERVES AND ANNUITY AND OTHER FUND RESERVES - Reserves for life
insurance, annuities, and accident and health insurance are established in
amounts adequate to meet the estimated future obligations of policies in force.
These liabilities are computed based upon mortality, morbidity and interest rate
assumptions applicable to these coverages, including provision for adverse
deviation. Interest rates range from 3% to 6% for life insurance and 3 1/2% to
9 1/2% for annuities, and mortality and morbidity assumptions reflect the
Company's experience and industry standards. The assumptions vary by plan, age
at issue, year of issue and duration. Claims reserves are computed based on
historical experience modified for expected trends in frequency and severity.
Withdrawal characteristics of annuity and other fund reserves vary by contract.

<PAGE>

SMA LIFE ASSURANCE COMPANY
(A WHOLLY OWNED SUBSIDIARY OF STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA)

At December 31, 1994 and 1993, approximately 77% and 70%, respectively, of the
contracts (included in both the general account and separate accounts of the
Company) were not subject to discretionary withdrawal or were subject to
withdrawal at book value less surrender charge.

FEDERAL INCOME TAXES - State Mutual, its non-insurance domestic subsidiaries and
SMA Life file a consolidated United States Federal income tax return. Entities
included within the consolidated group are segregated into either a life
insurance or non-life insurance company subgroup. The consolidation of these
subgroups is subject to certain statutory restrictions on the percentage of
eligible non-life taxable operating losses that can be applied to offset life
company taxable income. Allmerica P&C and its subsidiaries file a separate
United States Federal income tax return.

The Federal income tax for the non-life insurance subsidiaries is calculated on
a separate return basis. Any current tax liability (benefit) is paid to
(reimbursed by) State Mutual. Tax benefits resulting from taxable operating
losses of the non-life subsidiaries are not reimbursed currently by State
Mutual. However, to the extent such losses are utilized by the consolidated
group, they are reflected as a liability of State Mutual.

The Federal income tax for the life companies is calculated on a line of
business basis, excluding the operating results of the non-insurance
subsidiaries and Allmerica P&C. The tax is allocated to each life company based
on its contribution to the taxable income or loss of each line of business.

CAPITAL GAINS AND LOSSES - Realized capital gains and losses, net of applicable
capital gains tax or benefit, exclusive of those transferred to the interest
maintenance reserve (IMR), are included in the statement of operations.
Unrealized capital gains and losses are reflected as direct credits or charges
to stockholder's equity. The IMR, which is included in other liabilities,
establishes a reserve for realized gains and losses, net of tax, resulting from
changes in interest rates on short and long term fixed income investments. Net
realized gains and losses charged to the IMR are amortized into net investment
income over the remaining life of the investment sold.

PENDING ACCOUNTING PRONOUNCEMENT - In April 1993, the Financial Accounting
Standards Board (FASB) issued Interpretation No. 40, "Applicability of Generally
Accepted Accounting Principles to Mutual Life Insurance and Other Enterprises"
(FIN 40), which establishes a different definition of generally accepted
accounting principles for mutual life insurance companies (and their stock life
insurance subsidiaries). Under the Interpretation, financial statements of
mutual life insurance companies (and their stock life insurance subsidiaries)
which are prepared on the basis of statutory accounting, will no longer be
characterized as in conformity with generally accepted accounting principles.

In January 1995, the FASB issued Statement of Financial Accounting Standards No.
120, "Accounting and Reporting by Mutual Life Insurance Enterprises and by
Insurance Enterprises for Certain Long-Duration Participating Contracts" (SFAS
No. 120), and the American Institute of Certified Public Accountants (AICPA)
issued Statement of Position No. 95-1, "Accounting for Certain Insurance
Activities of Mutual Life Insurance Enterprises" (SOP 95-1). SFAS No. 120
extends the requirements of SFAS No. 60, "Accounting and Reporting by Insurance
Enterprises," No. 97, "Accounting and Reporting by Insurance Enterprises for
Certain Long-Duration Contracts and for Realized Gains and Losses from the Sale
of Investments," and No. 113, "Accounting and Reporting for Reinsurance of
Short-Duration and Long-Duration Contracts," to mutual life insurance
enterprises. SOP 95-1 establishes accounting for certain participating life
insurance contracts for mutual life insurance enterprises. SFAS No. 120
requires mutual life insurance enterprises (and permits stock life insurance
enterprises) to apply the provisions of SOP 95-1 to those contracts which meet
the conditions in SFAS No. 120.

FIN 40, SFAS No. 120 and SOP 95-1 are all effective for financial statements
issued for fiscal years beginning after December 15, 1995.

Management of the Company has not yet determined the effect on its financial
statements of applying the new pronouncements nor whether it will continue to
present its general purpose financial statements in conformity with the
statutory basis of accounting or adopt the accounting changes required in order
to continue to present its financial statements in conformity with generally
accepted accounting principles. If the Company chooses to adopt the accounting
changes required, the effect of the changes would be reported retroactively
through restatement of all previously issued financial statements beginning with
the earliest year presented. The cumulative effect of adopting these changes
would be included in the earliest year presented.

6
<PAGE>

SMA LIFE ASSURANCE COMPANY
(A WHOLLY OWNED SUBSIDIARY OF STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA)

NOTE 2 - INVESTMENTS

BONDS - The carrying value and fair value of investments in bonds,are as
follows:

<TABLE>
<CAPTION>
December 31, 1994
-----------------
Gross Gross
Carrying Unrealized Unrealized Fair
(In thousands) Value Appreciation Depreciation Value
----- ------------ ------------ -----
<S> <C> <C> <C> <C>
Federal government bonds $ 17,651 $ 8 $ 762 $ 16,897
State, local and government agency bonds 1,110 54 -- 1,164
Foreign government bonds 31,863 83 3,735 28,211
Corporate securities 1,462,871 8,145 56,011 1,415,005
Mortgage-backed securities 81,780 268 1,737 80,311
----------- ----------- ----------- -----------

$ 1,595,275 $ 8,558 $ 62,245 $ 1,541,588
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>

<TABLE>
<CAPTION>
December 31, 1994
-----------------
Gross Gross
Carrying Unrealized Unrealized Fair
(In thousands) Value Appreciation Depreciation Value
----- ------------ ------------ -----
<S> <C> <C> <C> <C>
Federal government bonds $ 7,969 $ 356 $ -- $ 8,325
State, local and government agency bonds 15,212 678 -- 15,890
Foreign government bonds 24,152 720 9 24,863
Corporate securities 1,519,050 74,777 4,430 1,589,397
Mortgage-backed securities 1,275 92 -- 1,367
----------- ----------- ----------- -----------

Total $ 1,567,658 $ 76,623 $ 4,439 $ 1,639,842
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>

The carrying value and fair value by contractual maturity at December 31, 1994,
are shown below. Actual maturities will differ from contractual maturities
because borrowers may have the right to call or prepay obligations with or
without call or prepayment penalties or the Company may have the right to put or
sell the obligation back to the issuer. Mortgage-backed securities are
classified based on expected maturities.

Carrying Fair
(In thousands) Value Value
----- -----
<S> <C> <C>
Due in one year or less $ 225,814 $ 224,695
Due after one year through five years 774,918 751,778
Due after five years through ten years 428,080 404,377
Due after ten years 166,463 160,738
----------- -----------

Total $ 1,595,275 $ 1,541,588
----------- -----------
----------- -----------
</TABLE>

MORTGAGE LOANS AND REAL ESTATE - Mortgage loans and real estate investments, are
diversified by property type and location. Real estate investments have been
obtained primarily through foreclosure. Mortgage loans are collateralized by
the related properties and are generally no more than 75% of the property value
at the time the original loan is made. At December 31, 1994 and 1993, mortgage
loan and real estate investments were distributed by the following types and
geographic regions:

7
<PAGE>

SMA LIFE ASSURANCE COMPANY
(A WHOLLY OWNED SUBSIDIARY OF STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA)

(In thousands)

Property Type 1994 1993
- ------------- ---- ----
<S> <C> <C>
Office buildings $ 140,292 $ 172,694
Residential 57,061 74,514
Retail 72,787 72,756
Industrial/Warehouse 39,424 62,572
Other 37,256 41,427
--------- ---------

Total $ 346,820 $ 423,963
--------- ---------
--------- ---------
<CAPTION>

Geographic Region 1994 1993
- ----------------- ---- ----
<S> <C> <C>
South Atlantic $ 92,934 $ 118,434
East North Central 72,704 78,343
Middle Atlantic 48,688 58,291
Pacific 39,892 45,666
West North Central 27,377 33,325
Mountain 12,211 31,116
New England 26,613 28,759
East South Central 6,224 8,250
West South Central 20,177 21,779
--------- ---------

Total $ 346,820 $ 423,963
--------- ---------
--------- ---------
</TABLE>

NET INVESTMENT INCOME - The components of net investment income for the year
ended December 31 were as follows:

(In thousands) 1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Bonds $ 123,495 $ 126,729 $ 119,777
Stocks 1,799 953 692
Mortgage loans 31,945 40,823 52,406
Real estate 8,425 9,493 8,412
Policy loans 8,797 8,215 7,701
Other investments 1,651 674 344
Short term investments 1,378 840 1,848
--------- --------- ---------
177,490 187,727 191,180
Less investment expenses 9,138 11,026 8,035
--------- --------- ---------

Net investment income, before IMR amortization 168,352 176,701 183,145

IMR amortization 2,078 911 14
--------- --------- ---------

Net investment income $ 170,430 $ 177,612 $ 183,159
--------- --------- ---------
--------- --------- ---------

</TABLE>

REALIZED CAPITAL GAINS AND LOSSES - Realized capital gains (losses) on
investments for the years ended December 31 were as follows:

(In thousands) 1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Bonds $ 645 $ 10,133 $ 3,302
Stocks (62) 16 33
Mortgage loans (17,142) (83) 162
Real Estate 605 (2,044) 1,985
--------- --------- ---------
(15,954) 8,022 5,482
Less income tax 968 3,296 4,623
--------- --------- ---------

Net realized capital gains (losses) before transfer to IMR (16,922) 4,726 859
Net realized capital gains transferred to IMR (250) (11,951) (283)
--------- --------- ---------

Net realized capital gains (losses) $ (17,172) $ (7,225) $ 576
--------- --------- ---------
--------- --------- ---------
</TABLE>

8
<PAGE>

SMA LIFE ASSURANCE COMPANY
(A WHOLLY OWNED SUBSIDIARY OF STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA)

Proceeds from voluntary sales of investments in bonds during 1994, 1993 and 1992
were $178,640 thousand, $131,783 thousand and $153,218 thousand, respectively.
Gross gains of $3,010 thousand, $4,523 thousand and $3,043 thousand and gross
losses of $4,553 thousand, $450 thousand and $139 thousand, respectively, were
realized on those sales.

NOTE 3 - FAIR VALUE DISCLOSURES OF FINANCIAL INFORMATION

Statement of Financial Accounting Standards No. 107, "Disclosures about Fair
Value of Financial Instruments" requires disclosure of fair value information
about certain financial instruments (insurance contracts, real estate, goodwill
and taxes are excluded) for which it is practicable to estimate such values,
whether or not these instruments are included in the balance sheet. The fair
values presented for certain financial instruments are estimates which, in many
cases, may differ significantly from the amounts which could be recognized upon
immediate liquidation. In cases where market prices are not available,
estimates of fair value are based on discounted cash flow analyses which utilize
current interest rates for similar financial instruments which have comparable
terms and credit quality.

The following methods and assumptions were used to estimate the fair value of
each class of financial instruments:

FINANCIAL ASSETS:

CASH AND SHORT TERM INVESTMENTS - The carrying amounts reported in the statement
of financial position approximate fair value.

BONDS - Fair values are based on quoted market prices, if available. If a
quoted market price is not available, fair values are estimated using
independent pricing sources or internally developed pricing models using
discounted cash flow analyses.

STOCKS - Fair values are based on quoted market prices, if available. If a
quoted market price is not available, fair values are estimated using
independent pricing sources or internally developed pricing models.

MORTGAGE LOANS - Fair values are estimated by discounting the future contractual
cash flows using the current rates at which similar loans would be made to
borrowers with similar credit ratings. The fair value of below investment grade
mortgage loans is limited to the lesser of the present value of the cash flows
or book value.

POLICY LOANS - The carrying amount reported in the statement of financial
position approximates fair value since policy loans have no defined maturity
dates and are inseparable from the insurance contracts.

FINANCIAL LIABILITIES:

ANNUITY AND OTHER FUND RESERVES (WITHOUT MORTALITY/MORBIDITY FEATURES) - Fair
values for the Company's liabilities under individual annuity contracts are
estimated based on current surrender values.

9
<PAGE>

SMA LIFE ASSURANCE COMPANY
(A WHOLLY OWNED SUBSIDIARY OF STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA)

The estimated fair values of the financial instruments as of December 31 were as
follows:

1994 1993
---- ----
Carrying Fair Carrying Fair
(In thousands) Value Value Value Value
----- ----- ----- -----
<S> <C> <C> <C> <C>
Financial Assets:
Cash $ 7,248 $ 7,248 $ 10,172 $ 10,172
Short term investments 45,239 45,239 4,999 4,999
Bonds 1,595,275 1,541,588 1,567,658 1,639,842
Stocks 12,283 12,283 32,478 32,478
Mortgage loans 295,532 291,704 383,059 395,327
Policy loans 116,600 116,600 109,014 109,014

Financial Liabilities:
Individual annuity contracts 869,230 862,662 870,112 865,668
Supplemental contracts without life
contingencies 16,673 16,673 14,842 14,842
Other contract deposit funds 1,105 1,105 1,317 1,317

</TABLE>

NOTE 4 - FEDERAL INCOME TAXES

The federal income tax provisions for 1994, 1993 and 1992 were $13,109 thousand,
$8,551 thousand and $18,108 thousand, respectively, which include taxes
applicable to realized capital gains of $968 thousand, $3,296 thousand and
$4,623 thousand.

The effective federal income tax rates were 67%, 30% and 65% in 1994, 1993 and
1992, respectively. The differences between the federal statutory rate and the
Company's effective tax rates are primarily related to decreases in taxable
income for the write-offs of mortgage loans; and increases in taxable income for
differences in policyholder liabilities for federal income tax purposes and
financial reporting purposes and the deferral of policy acquisition costs for
federal tax purposes. The Company paid to State Mutual $14,353 thousand,
$8,100 thousand and $30,000 thousand in 1994, 1993 and 1992, respectively, for
its federal income taxes.

The consolidated federal income tax returns are routinely audited by the
Internal Revenue Service (IRS) and provisions are routinely made in the
financial statements in anticipation of the results of these audits. The
Internal Revenue Service (IRS) has completed its examination of all of the
consolidated federal income tax returns through 1988. Deficiencies asserted
with respect to tax years 1977 through 1981 have been paid and recorded and the
consolidated group has filed a recomputation of such years with appeals claiming
a refund with respect to certain agreed upon issues, but has not recognized any
benefit in its financial statements. The consolidated group is currently
considering its response to certain adjustments proposed by the IRS with respect
to the consolidated federal income tax returns for 1982 and 1983. If upheld,
these proposed adjustments would result in additional payments; however, the
consolidated group will vigorously defend its position with respect to these
adjustments. In management's opinion, adequate tax liabilities have been
established for all years.

NOTE 5 - REINSURANCE

The Company participates in reinsurance to reduce overall risks, including
exposure to large losses and to permit recovery of a portion of direct losses.
Reinsurance contracts do not relieve the Company from its obligation to its
policyholders. Reinsurance financial data for the years ended December 31, is as
follows:

(In thousands) 1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Reinsurance premiums assumed $ 3,788 $ 4,190 $ 4,614
Reinsurance premiums ceded 17,430 14,798 15,570
Deduction from insurance liability including
reinsurance recoverable on unpaid claims 46,734 42,805 48,191

</TABLE>

10
<PAGE>

SMA LIFE ASSURANCE COMPANY
(A Wholly Owned Subsidiary of State Mutual Life Assurance Company of America)

The Company cedes to State Mutual approximately 10% of its individual life
business. Premiums ceded to State Mutual aggregated $7,771 thousand, $9,000
thousand and $9,586 thousand in 1994, 1993 and 1992, respectively. The Company
has also entered into various reinsurance agreements with State Mutual under
which certain insurance risks related to individual accident and health
business, premium income and related expenses are assumed by the Company from
State Mutual. Premiums assumed pursuant to these agreements aggregated $3,788
thousand, $4,190 thousand and $4,614 thousand in 1994, 1993 and 1992,
respectively .

NOTE 6 - DIVIDEND RESTRICTIONS

Delaware has enacted laws governing the payment of dividends by insurers. These
laws affect the dividend paying ability of the Company. Pursuant to Delaware's
statute, the maximum amount of dividends and other distributions that an insurer
may pay in any twelve month period, without the prior approval of the Delaware
Commissioner of Insurance, is limited to the greater of (i) 10% of its statutory
policyholder surplus as of the preceding December 31 or (ii) the individual
company's statutory net gain from operations for the preceding calendar year (if
such insurer is a life company) or its net income (not including realized
capital gains) for the preceding calendar year (if such insurer is not a life
company). Any dividends to be paid by an insurer, whether or not in excess of
the aforementioned threshold, from a source other than earned surplus would also
require the prior approval of the Delaware Commissioner of Insurance. While the
Company is currently operating on a profitable basis, it has a negative earned
surplus position and accordingly is precluded from paying dividends to State
Mutual without the approval of the Commissioner of Insurance.

NOTE 7 - RELATED PARTY TRANSACTIONS

State Mutual provides management, operating personnel and facilities on a cost
reimbursement basis to the Company. Expenses for services received from State
Mutual were $102,461 thousand, $98,676 thousand and $88,273 thousand in 1994,
1993 and 1992, respectively. The net amounts payable to State Mutual and
affiliates for accrued expenses and various other liabilities and receivables
were $8,344 thousand and $12,182 thousand at December 31, 1994 and 1993,
respectively.

During 1992, the Company sold a building to an affiliated company at its
estimated fair value of $4,350 thousand. The Company recognized a capital gain
on the sale, net of tax, in the amount of $1,310 thousand.

NOTE 8 - FUNDS ON DEPOSIT

In March 1994, the Company voluntarily withdrew from being licensed in New York.
In connection with the withdrawal State Mutual, which is licensed in New York,
became qualified to sell the products previously sold by SMA Life in New York.
The Company agreed with the New York Department of Insurance to maintain,
through a custodial account in New York, a security deposit, the market value of
which will at all times equal 102% of all outstanding general account
liabilities of the Company for New York policyholders, claimants and creditors.
As of December 31, 1994, the carrying value and fair value of the assets on
deposit was $327,899 thousand and $323,474 thousand, respectively, which is in
excess of the required amount.

Additional securities with a carrying value of $3,855 thousand and $3,353
thousand were on deposit with various other state and governmental authorities
as of December 31, 1994 and 1993, respectively.

NOTE 9 - LITIGATION

The Company has been named a defendant in various legal proceedings arising in
the normal course of business. In the opinion of management, based on the
advice of legal counsel, the ultimate resolution of these proceedings will not
have a material effect on the Company's financial statements.

<PAGE>

VARIABLE ANNUITY SEPARATE ACCOUNTS
STATEMENTS OF ASSETS AND LIABILITIES - December 31, 1994

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
SEPARATE ACCOUNT SEPARATE ACCOUNT SEPARATE ACCOUNT
VA-A VA-B VA-C
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS:
Investment in shares of Allmerica Investment Trust . . . . . . $ 180,061,518 $ 8,497,572 $ 21,164,144

LIABILITIES:
Payable to SMA Life Assurance Company (Sponsor). . . . . . . . 451,146 28,605 35,858
------------- ------------ ------------
Net assets . . . . . . . . . . . . . . . . . . . . . . . . . $ 179,610,372 $ 8,468,967 $ 21,128,286
------------- ------------ ------------
------------- ------------ ------------

Net asset distribution by category:
Qualified variable annuity policies . . . . . . . . . . . . $ 139,875,929 --- $ 21,128,286
Non-qualified variable annuity policies . . . . . . . . . . 39,734,443 $ 8,468,967 ---
------------- ------------ ------------
$ 179,610,372 $ 8,468,967 $ 21,128,286
------------- ------------ ------------
------------- ------------ ------------

Units outstanding and net asset value per unit:
Post 1974 Series:
Qualified units outstanding, December 31, 1994. . . . . . . 24,340,890 --- 6,476,049
Net asset value per qualified unit, December 31, 1994 . . . $ 5.585790 --- $ 3.262527
Non-qualified units outstanding, December 31, 1994. . . . . 6,979,265 2,618,578 ---
Net asset value per non-qualified unit, December 31, 1994 . $ 5.324423 $ 3.234185 ---

Pre 1974 Series:
Qualified units outstanding, December 31, 1994. . . . . . . 691,318 --- ---
Net asset value per qualified unit, December 31, 1994 . . . $ 5.659956 --- ---
Non-qualified units outstanding, December 31, 1994. . . . . 477,075 --- ---
Net asset value per non-qualified unit, December 31, 1994 . $ 5.395129 --- ---

</TABLE>

The accompanying notes are an integral part of these financial statements.

<PAGE>

VARIABLE ANNUITY SEPARATE ACCOUNTS

- ----------------------------------------------------------------------------------------------------------
SEPARATE ACCOUNT SEPARATE ACCOUNT
VA-G VA-H
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS:
Investment in shares of Allmerica Investment Trust............ $ 1,783,622 $ 5,783,605

LIABILITIES:
Payable to SMA Life Assurance Company (Sponsor)............... 4,814 13,560
-------------- --------------
Net assets.................................................. $ 1,778,808 $ 5,770,045
-------------- --------------
-------------- --------------

Net asset distribution by category:
Qualified variable annuity policies........................ --- $ 5,770,045
Non-qualified variable annuity policies.................... $ 1,778,808 ---
------------- --------------
$ 1,778,808 $ 5,770,045
------------- --------------
------------- --------------

Units outstanding and net asset value per unit:
Post 1974 Series:
Qualified units outstanding, December 31, 1994............. --- 3,335,462
Net asset value per qualified unit, December 31, 1994...... --- $ 1.729909
Non-qualified units outstanding, December 31, 1994......... 1,036,806 ---
Net asset value per non-qualified unit, December 31, 1994 $ 1.715661 ---

Pre 1974 Series:
Qualified units outstanding, December 31, 1994............. --- ---
Net asset value per qualified unit, December 31, 1994...... --- ---
Non-qualified units outstanding, December 31, 1994......... --- ---
Net asset value per non-qualified unit, December 31, 1994.. --- ---

</TABLE>

<PAGE>

VARIABLE ANNUITY SEPARATE ACCOUNTS
Statements of Operations For the Year Ended December 31, 1994

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
SEPARATE ACCOUNT SEPARATE ACCOUNT SEPARATE ACCOUNT
VA-A VA-B VA-C
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends. . . . . . . . . . . . . . . . . . . . . . . . . $ 12,321,642 $ 562,147 $ 1,450,392

EXPENSES:
Mortality and expense risk fees. . . . . . . . . . . . . . 2,476,035 114,102 295,292
------------ ------------ ------------
Net investment income. . . . . . . . . . . . . . . . . . . 9,845,607 448,045 1,155,100
------------ ------------ ------------

REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain (loss) . . . . . . . . . . . . . . . . . 6,548,274 (1,349) (35,786)
Net unrealized (loss). . . . . . . . . . . . . . . . . . . (18,669,593) (862,779) (2,212,717)
------------ ------------ ------------

Net realized and unrealized gain (loss) on investments . . (12,121,319) (864,128) (2,248,503)
------------ ------------ ------------

Net increase(decrease) in net assets from operations . . . $ (2,275,712) $ (416,083) $ (1,093,403)
------------ ------------ ------------
------------ ------------ ------------
</TABLE>

The accompanying notes are an integral part of these financial statements.

<PAGE>

VARIABLE ANNUITY SEPARATE ACCOUNTS

- ----------------------------------------------------------------------------------------------
SEPARATE ACCOUNT SEPARATE ACCOUNT
VA-G VA-H
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Dividends................................................. $ 90,881 $ 255,706

EXPENSES:
Mortality and expense risk fees........................... 30,048 84,360
----------- -----------
Net investment income..................................... 60,833 171,346
----------- -----------

REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain (loss).................................. --- ---
Net unrealized (loss)..................................... --- ---
----------- -----------

Net realized and unrealized gain (loss) on investments.... --- ---
----------- -----------
Net increase(decrease) in net assets from operations...... $ 60,833 $ 171,346
----------- -----------
----------- -----------

</TABLE>

<PAGE>

VARIABLE ANNUITY SEPARATE ACCOUNTS
STATEMENTS OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
SEPARATE ACCOUNT VA-A SEPARATE ACCOUNT VA-B
FOR THE YEAR ENDED FOR THE YEAR ENDED
12/31/94 12/31/93 12/31/94 12/31/93
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE(DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income. . . . . . . . . . . . . . . . . . . . . $ 9,845,607 $ 21,549,755 $ 448,045 $ 571,790
Net realized gain (loss) from security transactions. . . . . . 6,548,274 5,040,981 (1,349) 123,451
Net unrealized gain (loss) on investments. . . . . . . . . . . (18,669,593) (14,763,298) (862,779) 166,586
------------- ------------- ------------- -------------

Net increase (decrease) in net assets from operations. . . . . (2,275,712) 11,827,438 (416,083) 861,827

FROM CAPITAL TRANSACTIONS:
Net purchase payments. . . . . . . . . . . . . . . . . . . . . 10,489,533 14,802,251 159,236 329,864
Terminations . . . . . . . . . . . . . . . . . . . . . . . . . (14,302,061) (10,308,747) (579,689) (194,230)
Annuity benefits . . . . . . . . . . . . . . . . . . . . . . . (1,828,037) (1,115,929) (6,040) (30,825)
Other transfers from (to) the General Account of
SMA Life Assurance Company (Sponsor). . . . . . . . . . . . (35,084,901) (6,155,359) (1,133,064) 336,336
Net (decrease) in investment by
SMA Life Assurance Company (Sponsor). . . . . . . . . . . . --- --- --- ---
------------- ------------- ------------- -------------
Net increase(decrease) in net assets from capital transactions (40,725,466) (2,777,784) (1,559,557) 441,145
------------- ------------- ------------- -------------

Net increase(decrease) in net assets . . . . . . . . . . . . . (43,001,178) 9,049,654 (1,975,640) 1,302,972

NET ASSETS:
Beginning of year. . . . . . . . . . . . . . . . . . . . . . . 222,611,550 213,561,896 10,444,607 9,141,635
------------- ------------- ------------- -------------
End of year. . . . . . . . . . . . . . . . . . . . . . . . . . $ 179,610,372 $ 222,611,550 $ 8,468,967 $ 10,444,607
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>

The accompanying notes are an integral part of these financial statements.

<PAGE>

VARIABLE ANNUITY SEPARATE ACCOUNTS

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
SEPARATE ACCOUNT VA-C SEPARATE ACCOUNT VA-G
FOR THE YEAR ENDED FOR THE YEAR ENDED
12/31/94 12/31/93 12/31/94 12/31/93
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCREASE(DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income . . . . . . . . . . . . . . . . . . . . $ 1,155,100 $ 1,452,522 $ 60,833 $ 81,990

Net realized gain (loss) from security transactions . . . . . (35,786) 235,787 --- ---

Net unrealized gain (loss) on investments . . . . . . . . . . (2,212,717) 464,015 --- ---
------------ ------------ ------------ ---------

Net increase (decrease) in net assets from operations . . . . (1,093,403) 2,152,324 60,833 81,990

FROM CAPITAL TRANSACTIONS:
Net purchase payments . . . . . . . . . . . . . . . . . . . . 1,374,331 2,286,417 245,690 562,707
Terminations. . . . . . . . . . . . . . . . . . . . . . . . . (2,222,511) (1,057,396) (256,150) (121,444)
Annuity benefits. . . . . . . . . . . . . . . . . . . . . . . (53,233) (111,024) (115) (90,083)
Other transfers from (to) the General Account of
SMA Life Assurance Company (Sponsor). . . . . . . . . . . . (4,004,650) 1,788,882 (1,282,493) (4,431,632)
Net (decrease) in investment by
SMA Life Assurance Company (Sponsor). . . . . . . . . . . . --- --- --- ---
------------ ------------ ------------ -----------
Net increase(decrease) in net assets from capital transactions (4,906,063) 2,906,879 (1,293,068) (4,080,452)
------------ ------------ ------------ -----------

Net increase(decrease) in net assets. . . . . . . . . . . . . (5,999,466) 5,059,203 (1,232,235) (3,998,462)

NET ASSETS:
Beginning of year . . . . . . . . . . . . . . . . . . . . . . 27,127,752 22,068,549 3,011,043 7,009,505
------------ ------------ ------------ -----------
End of year . . . . . . . . . . . . . . . . . . . . . . . . . $ 21,128,286 $ 27,127,752 $ 1,778,808 $ 3,011,043
------------ ------------ ------------ -----------
------------ ------------ ------------ -----------

--------------------------------------
SEPARATE ACCOUNT VA-H
FOR THE YEAR ENDED
12/31/94 12/31/93
--------------------------------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income . . . . . . . . . . . . . . . . . . . . $ 171,346 $ 203,382
Net realized gain (loss) from security transactions . . . . . --- ---

Net unrealized gain (loss) on investments . . . . . . . . . . --- ---
---------- ----------
Net increase (decrease) in net assets from operations . . . . 171,346 203,382

CAPITAL TRANSACTIONS:
Net purchase payments . . . . . . . . . . . . . . . . . . . . 2,636,131 2,715,598
Terminations. . . . . . . . . . . . . . . . . . . . . . . . . (1,537,902) (1,051,313)
Annuity benefits. . . . . . . . . . . . . . . . . . . . . . . (14,100) (63,243)
Other transfers from (to) the General Account of
SMA Life Assurance Company (Sponsor). . . . . . . . . . . . (4,136,601) (8,543,145)
Net (decrease) in investment by
SMA Life Assurance Company (Sponsor). . . . . . . . . . . . --- (115,596)
------------ ------------
Net increase(decrease) in net assets from capital transactions (3,052,472) (7,057,699)
------------ ------------

Net increase(decrease) in net assets. . . . . . . . . . . . . (2,881,126) (6,854,317)

NET ASSETS:
Beginning of year . . . . . . . . . . . . . . . . . . . . . . (8,651,171) 15,505,488
------------ -----------
End of year . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,770,045 $ 8,651,171
------------ -----------
------------ -----------

</TABLE>

<PAGE>

VARIABLE ANNUITY SEPARATE ACCOUNTS
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 1994

NOTE 1 - ORGANIZATION

Separate Accounts VA-A, VA-B, VA-C, VA-G and VA-H (the Separate Accounts) are
separate investment accounts of SMA Life Assurance Company (the Company),
established for the purpose of separating from the general assets of the Company
those assets used to fund the variable portion of certain variable annuity
policies issued by the Company. The Company is a wholly-owned subsidiary of
State Mutual Life Assurance Company of America (State Mutual). Under applicable
insurance law, the assets and liabilities of the Separate Accounts are clearly
identified and distinguished from the assets and liabilities of the Company. The
Separate Accounts cannot be charged with liabilities arising out of any other
business of the Company.

The Separate Accounts are registered individually as unit investment trusts
under the Investment Company Act of 1940, as amended (the 1940 Act). Each
Separate Account invests exclusively in a corresponding investment portfolio of
the Allmerica Investment Trust (the Trust) managed by Allmerica Investment
Management Company, Inc., a wholly-owned subsidiary of State Mutual. The Trust
is an open-end, diversified series management investment company registered
under the 1940 Act.

The Separate Accounts have two types of variable annuity policies, "qualified"
policies and "non-qualified" policies. A qualified policy is one that is
purchased in connection with a retirement plan which meets the requirements of
Section 401, 403, 408, or 457 of the Internal Revenue Code, while a
non-qualified policy is one that is not purchased in connection with one of the
indicated retirement plans. The tax treatment for certain partial redemptions or
surrenders will vary according to whether they are made from a qualified policy
or a non-qualified policy.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Investments - Security transactions are recorded on the trade date.
Investments in shares of the Trust are stated at the net asset value per share
of the respective investment portfolio of the Trust. Net realized gains and
losses on securities sold are determined on the average cost method. Dividends
and capital gain distributions are recorded on the ex-dividend date and are
reinvested in additional shares of the respective investment portfolio of the
Trust at net asset value.

<PAGE>

VARIABLE ANNUITY SEPARATE ACCOUNTS
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 1994, Continued

Federal Income Taxes - The Company is taxed as a "life insurance company"
under Subchapter L of the Internal Revenue Code and files a consolidated Federal
Income Tax return with State Mutual. The Company anticipates no tax liability
resulting from the operations of the Separate Accounts. Therefore, no provision
for income taxes has been charged against the Separate Accounts.

Capital Transactions - The components of the prior year's net increase
(decrease) in net assets from capital transactions have been disclosed in the
current year Statements of Changes in Net Assets to conform to the current year
presentation.

NOTE 3 - INVESTMENTS

The number of shares owned, aggregate cost, and net asset value per share of
each Separate Account's investment in the Trust at December 31, 1994 were as
follows:

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
PORTFOLIO INFORMATION
SEPARATE INVESTMENT NUMBER OF AGGREGATE NET ASSET
ACCOUNT PORTFOLIO SHARES COST VALUE PER SHARE
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
VA-A Growth 99,262,138 $ 164,758,170 $ 1.814

VA-B] Investment Grade Income 8,396,810 8,938,134 1.012
VA-C] Income 20,913,186 22,266,615 1.012

VA-G] Money Market 1,783,622 1,783,622 1.000
VA-H] 5,783,605 5,783,605 1.000

</TABLE>

NOTE 4 - RELATED PARTY TRANSACTIONS

The Company makes a charge of 1.25% per annum based on the average daily net
assets of each Separate Account at each valuation date for mortality and expense
risks. This charge is deducted in the daily computation of unit values but is
paid to the Company on a monthly basis. The total annual charge may be increased
or decreased by the Board of Directors of the Company once each year but the
total charge may not exceed 1.275% per annum. On February 15, 1991, the Board of
Directors of the Company increased the charge form .90% to 1.25% on policies
issued in the 1974 and later series. The total charge on policies issued prior
to 1974 will remain at .90% per annum due to a contract fee limit. Net purchase
payments represent gross purchase payments less applicable premium taxes.

Allmerica Investments, Inc., (Allmerica Investments), a wholly-owned
subsidiary of State Mutual, is principal underwriter and general distributor of
the Separate Accounts, and does not receive any compensation for sales of the
Variable Annuity policies. Commissions are paid to registered representatives of
Allmerica Investments by the Company. As the current series of policies have a
contingent deferred sales charge, no deduction is made for sales charges at the
time of the sale. For the year ended December 31, 1994, the Company received
$242,448, $6,534, $35,170, $5,182, and $16,672 for contingent deferred sales
charges applicable to Separate Accounts VA-A, VA-B, VA-C, VA-G and VA-H,
respectively.

<PAGE>

VARIABLE ANNUITY SEPARATE ACCOUNTS
NOTES TO FINANCIAL STATEMENTS - December 31, 1994, Continued

NOTE 5 - POLICYOWNERS AND SPONSOR TRANSACTIONS

Transactions from policyowners and sponsor were as follows:

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
1994 1993
---- ----
UNITS AMOUNT UNITS AMOUNT
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Separate Account VA-A
Qualified
Issuance of units. . . . . . . . . . . . . . 3,217,242 $ 18,088,383 2,496,132 $ 13,667,644
Redemption of units. . . . . . . . . . . . . (8,895,152) (49,863,496) (2,701,341) (15,093,938)
--------- ------------- --------- -------------
Net (decrease) . . . . . . . . . . . . . . . (5,677,910) $ (31,775,113) (205,209) $ (1,426,294)
--------- ------------- --------- -------------
--------- ------------- --------- -------------

Non-Qualified
Issuance of units. . . . . . . . . . . . . . 724,261 $ 4,025,736 306,689 $ 1,784,986
Redemption of units. . . . . . . . . . . . . (2,396,939) (12,976,089) (579,172) (3,136,476)
--------- ------------- --------- -------------
Net (decrease) . . . . . . . . . . . . . . . (1,672,678) $ (8,950,353) (272,483) $ (1,351,490)
--------- ------------- --------- -------------
--------- ------------- --------- -------------

Separate Account VA-B
Issuance of units. . . . . . . . . . . . . . 219,814 $ 728,534 274,610 $ 909,682
Redemption of units. . . . . . . . . . . . . (696,519) (2,288,091) (143,221) (468,537)
--------- ------------- --------- -------------
Net increase (decrease). . . . . . . . . . . (476,705) $ (1,559,557) 131,389 $ 441,145
--------- ------------- --------- -------------
--------- ------------- --------- -------------

Separate Account VA-C
Issuance of units. . . . . . . . . . . . . . 866,192 $ 2,892,853 1,629,955 $ 5,387,883
Redemption of units. . . . . . . . . . . . . (2,359,679) (7,798,916) (753,334) (2,481,004)
--------- ------------- --------- -------------
Net increase (decrease). . . . . . . . . . . (1,493,487) $ (4,906,063) 876,621 $ 2,906,879
--------- ------------- --------- -------------
--------- ------------- --------- -------------

Separate Account VA-G
Issuance of units. . . . . . . . . . . . . . 663,363 $ 1,116,875 1,186,914 $ 1,964,628
Redemption of units. . . . . . . . . . . . . (1,428,113) (2,409,943) (3,651,634) (6,045,080)
--------- ------------- --------- -------------
Net (decrease) . . . . . . . . . . . . . . . (764,750) $ (1,293,068) (2,464,720) $ (4,080,452)
--------- ------------- --------- -------------
--------- ------------- --------- -------------

Separate Account VA-H
Issuance of units. . . . . . . . . . . . . . 1,591,663 $ 2,706,234 3,551,033 $ 5,950,676
Redemption of units. . . . . . . . . . . . . (3,389,635) (5,758,706) (7,777,346) (13,008,375)
--------- ------------- --------- -------------
Net (decrease) . . . . . . . . . . . . . . . (1,797,972) $ (3,052,472) (4,226,313) $ (7,057,699)
--------- ------------- --------- -------------
--------- ------------- --------- -------------
</TABLE>

<PAGE>

VARIABLE ANNUITY SEPARATE ACCOUNTS
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 1994, Continued

NOTE 6 - DIVERSIFICATION REQUIREMENTS

Under the provisions of Section 817(h) of the Internal Revenue Code, a
variable annuity contract, other than a contract issued in connection with
certain types of employee benefit plans, will not be treated as an annuity
contract for federal income tax purposes for any period for which the
investments of the segregated asset account on which the contract is based are
not adequately diversified. The Code provides that the "adequately diversified"
requirement may be met if the underlying investments satisfy either a statutory
safe harbor test or diversification requirements set forth in regulations issued
by the Secretary of Treasury.

The Internal Revenue Service has issued regulations under Section 817(h) of
the Code. The Company believes that the Separate Accounts satisfy the current
requirements of the regulations, and it intends that the Separate Accounts will
continue to meet such requirements.

NOTE 7 - PURCHASES AND SALES OF SECURITIES

Cost of purchases and proceeds from sales of the Trust shares by the Separate
Accounts during the year ended December 31, 1994 were as follows:

SEPARATE
ACCOUNT INVESTMENT PORTFOLIO PURCHASES SALES
- ---------- -------------------- ------------- -------------
<S> <C> <C> <C>
VA-A Growth. . . . . . . . . . . . . . $ 15,813,185 $ 46,362,731

VA-B Investment Grade Income . . . . . 3,975,306 8,807,948
VA-C

VA-G Money Market. . . . . . . . . . . 5,013,055 9,129,385
VA-H ------------- -------------
Totals. . . . . . . . . . . . . . $ 24,801,546 $ 64,300,064
------------- -------------
------------- -------------
</TABLE>

<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors of SMA Life
Assurance Company and Policyowners
of Separate Accounts VA-A, VA-B, VA-C, VA-G
and VA-H of SMA Life Assurance Company

In our opinion, the accompanying statements of assets and liabilities
and the related statements of operations and of changes in net assets present
fairly, in all material respects, the financial position of Separate Accounts
VA-A, VA-B, VA-C, VA-G and VA-H of SMA Life Assurance Company at December 31,
1994, the results of each of their operations for the year then ended and the
changes in each of their net assets for each of the two years in the period then
ended, in conformity with generally accepted accounting principles. These
financial statements are the responsibility of SMA Life Assurance Company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at
December 31, 1994 by correspondence with the Trust, provide a reasonable basis
for the opinion expressed above.

PRICE WATERHOUSE LLP
Boston, Massachusetts

February 13, 1995

<PAGE>

PART C. OTHER INFORMATION

Item 24. FINANCIAL STATEMENTS AND EXHIBITS.

(A) FINANCIAL STATEMENTS
FINANCIAL STATEMENTS INCLUDED IN PART A
None

FINANCIAL STATEMENTS INCLUDED IN PART B
Financial Statements for Separate Accounts VA-A, VA-B, VA-C, VA-G and VA-H
Financial Statements for SMA Life Assurance Company

FINANCIAL STATEMENTS INCLUDED IN PART C
None

(B) EXHIBITS

Exhibit 1 - Vote Authorizing Establishment of Registrant was filed previously
on February 21, 1986, and is incorporated herein by reference.

Exhibit 2 - Not Applicable. Pursuant to Rule 26a-2, the Insurance Company
may hold the assets of the Registrant NOT pursuant to a trust
indenture or other such instrument.

Exhibit 3 - Sales and Administrative Services Agreement, Specimen Variable
Annuity Dealer Agreement, Schedule of Sales Commissions, were
previously filed as Exhibit 1(3)a, 1(3)b and 1(3)c of
Registrant's Form S-6, filed March 1, 1985 and are incorporated
herein by reference.

Exhibit 4 Elective Payment and Single Payment Policy forms were previously
filed as Exhibit 1(5) of Registrant's Form S-6 filed March 1,
1985 and Exhibit 4 of Registrant's Form N-4 filed February 21,
1986, and are incorporated herein be reference.

Exhibit 5 - Application Forms were previously filed as Exhibit 1(10) of
Registrant's Form S-6 filed March 1, 1985, and are incorporated
herein by reference.

Exhibit 6 - The Depositor's Articles of Incorporation and Bylaws, as Amended

Exhibit 7 - Not Applicable.

Exhibit 8 - AUV Calculation Services Agreement with The Shareholder Services
Group dated March 31, 1995 was previously filed on May 1, 1995,
and is incorporated herein by reference.

Exhibit 9 - Consent and Opinion of Counsel.

Exhibit 10 - Consent of Independent Accountants.

Exhibit 11 - None.

Exhibit 12 - None.

Exhibit 13 - None.

Exhibit 14 - Not Applicable.

<PAGE>

Item 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR.

The principal business address of all the following Directors and Officers
is:
440 Lincoln Street
Worcester, Massachusetts 01653

Name and Position Principal Occupation
----------------- --------------------
Barry Z. Aframe Vice President and Counsel, State Mutual
Vice President and Counsel

Abigail M. Armstrong Counsel, State Mutual
Secretary and Counsel

Richard J. Baker Vice President and Secretary, State Mutual
Director and Vice President

Whitworth F. Bird, Jr., M.D. Vice President and Medical Director, State Mutual
Vice President and
Medical Director

Alan R. Boyer Vice President, State Mutual
Vice President

Mark R. Colborn Vice President, and Controller, State Mutual
Vice President and
Controller

Lisa M. Coleman Vice President, State Mutual
Vice President

Dix F. Davis Vice President, State Mutual
Vice President

Bruce A. Emond Vice President, State Mutual
Vice President

Edward W. Ford Vice President, State Mutual
Vice President

Bruce H. Freedman Vice President, State Mutual
Vice President

Brian L. Hirst Vice President and Actuary, State Mutual
Vice President and Actuary

Kruno Huitzingh Vice President and Chief Information Officer,
Vice President and Chief State Mutual
Information Officer

John P. Kavanaugh Vice President, State Mutual
Vice President

John F. Kelly Senior Vice President, General Counsel, and
Director Assistant Secretary, State Mutual

Richard H. Kremer Vice President, State Mutual
Vice President

Jeffrey P. Lagarce Vice President, State Mutual
Vice President

Joseph W. MacDougall, Jr. Vice President, Associate General Counsel, and
Vice President, Associate Assistant Secretary, State Mutual
General Counsel
and Assistant Secretary

William H. Mawdsley Vice President and Actuary, State Mutual
Vice President and Actuary

<PAGE>

Roderick A. McGarry, II Vice President, State Mutual
Vice President

John W. Nunley Vice President, State Mutual
Vice President

John F. O'Brien Director, President and Chief Executive Officer,
Director and Chairman State Mutual
of the Board

Edward J. Parry, III Vice President and Treasurer, State Mutual
Vice President and Treasurer

Richard M. Reilly Vice President, State Mutual
Director, President and CEO

Henry P. St. Cyr Vice President and Asst. Treasurer, State Mutual
Vice President and Asst.
Treasurer

Eric Simonsen Vice President and Chief Financial Officer, State
Director, Vice President Mutual
and Chief Financial Officer

Ann K. Tripp Vice President, State Mutual
Vice President

Jerome F. Weihs Vice President, State Mutual
Vice President

Diane E. Wood Vice President, State Mutual
Vice President

Item 26. PERSONS UNDER COMMON CONTROL WITH REGISTRANT. See attached
organization chart.

STATE MUTUAL LIFE ASSURANCE COMPANY OF AMERICA

NAME ADDRESS TYPE OF BUSINESS
---- ------- ----------------
AAM Equity Fund 440 Lincoln Street Massachusetts Grantor
Worcester MA 01653 Trust

Allmerica Asset 440 Lincoln Street Investment advisory
Management, Inc. Worcester MA 01653 services

Allmerica Employees 440 Lincoln Street Insurance Agency
Insurance Agency, Inc. Worcester MA 01653

Allmerica Financial 440 Lincoln Street Insurance Agency
Services Insurance Worcester, MA 01653
Agency, Inc.

Allmerica Funds 440 Lincoln Street Investment Company
Worcester MA 01653

Allmerica Institutional 440 Lincoln Street Accounting, marketing
Services, Inc. Worcester MA 01653 and shareholder services for
investment companies

Allmerica Investment 440 Lincoln Street Holding Company
Services, Inc. Worcester, MA 01653
(formerly Allmerica
Financial Services, Inc.)

<PAGE>

Allmerica Investment 440 Lincoln Street Investment Advisory
Management Company, Inc. Worcester MA 01653 Services

Allmerica Investments, 440 Lincoln Street Securities, retail broker-
Inc. Worcester MA 01653 dealer

Allmerica Investment Trust 440 Lincoln Street Investment Company
(formerly SMA Worcester MA 01653
Investment Trust)

Allmerica Property 440 Lincoln Street Holding Company
and Casualty Companies, Worcester MA 01653
Inc.

Allmerica Realty 440 Lincoln Street Investment Advisory
Advisors, Inc. Worcester MA 01653 services

Allmerica Securities Trust 440 Lincoln Street Investment Company
Worcester MA 01653

Allmerica Services, Inc. 440 Lincoln Street Service Company
Worcester MA 01653

Allmerica Trust Company, 440 Lincoln Street Limited purpose national
N.A. Worcester MA 01653 trust company

AMGRO, Inc. 472 Lincoln Street Premium financing
Worcester MA 01653

APC Funding Corp. 440 Lincoln Street Special purpose funding
Worcester MA 01653 vehicle for commercial
paper

Beltsville Drive Limited 440 Lincoln Street Real estate partnership
Partnership Worcester MA 01653

Citizens Corporation 440 Lincoln Street Holding Company
Worcester MA 01653

Citizens Insurance 645 West Grand River Multi-line fire &
Company of America Howell MI 48843 casualty insurance

Citizens Insurance 645 West Grand River Multi-line fire &
Company of Ohio Howell MI 48843 casualty insurance

Citizens Management, Inc. 645 West Grand River Services management
Howell MI 48843 company

Greendale Special 440 Lincoln Street Massachusetts Grantor
Placements Fund Worcester MA 01653 Trust

The Hanover American 100 North Parkway Multi-line fire &
InsuranceCompany Worcester MA 01653 casualty insurance

The Hanover Insurance 100 North Parkway Multi-line fire &
Company Worcester MA 01605 casualty insurance

<PAGE>

Hanover Texas Insurance 801 East Campbell Incorporated Branch
Management Company, Inc. Road Richardson TX Office of The Hanover
75081 Insurance Company
Attorney-in-fact for
Hanover Lloyd's
Insurance Company

Hanover Lloyd's Insurance 801 East Campbell Multi-line fire &
Company Road Richardson TX casualty insurance
75081

Hollywood Center, Inc. 440 Lincoln Street General business
Worcester MA 01653 corporation

Linder Skokie Real Estate 440 Lincoln Street General business
Corporation Worcester MA 01653 corporation

Lloyds Credit Corporation 440 Lincoln Street Premium financing
Worcester MA 01653 service franchises

Logan Wells Water Company, 603 Heron Drive Water Company, serving
Inc. Bridgeport NJ 08014 land development
investment

Massachusetts Bay 100 North Parkway Multi-line fire &
Insurance Company Worcester MA 01653 casualty

SMA Financial Corp. 440 Lincoln Street Holding Company
Worcester MA 01653

Allmerica Financial 440 Lincoln Street Life insurance, accident
Life Insurance and Worcester MA 01653 & health insurance,
Annuity Company annuities, variable annuities
and variable life insurance

Somerset Square, Inc. 440 Lincoln Street General business
Worcester MA 01653 corporation

Sterling Risk Management 100 North Parkway Risk management
Services, Inc. Worcester MA 01605 services

Item 27. NUMBER OF CONTRACT OWNERS.

As of December 31, 1994, the following number of contract owners had
interests in the Separate Accounts:
<TABLE>
<CAPTION>
Qualified Non-Qualified
Contracts Contracts
--------- ---------
<S> <C> <C>
Separate Account VA-A 11,809 2,046

Separate Account VA-B N/A 647

Separate Account VA-C 3,201 N/A

Separate Account VA-G N/A 207

Separate Account VA-H 991 N/A
</TABLE>

Item 28. INDEMNIFICATION.

Article VIII of the Bylaws of Allmerica Financial Life Insurance and Annuity
Company (the Depositor) state: Each Director and each Officer of the
Corporation, whether or not in office, (and his executors or administrators),
shall be indemnified or reimbursed by the Corporation against all

<PAGE>

expenses actually and necessarily incurred by him in the defense or reasonable
settlement of any action, suit, or proceeding in which he is made a party by
reason of his being or having been a Director or Officer of the Corporation,
including any sums paid in settlement or to discharge judgement, except in
relation to matters as to which he shall be finally adjudged in such action,
suit or proceeding to be liable for negligence or misconduct in the performance
of his duties as such Director or Officer; and the foregoing right of
indemnification or reimbursement shall not affect any other rights to which he
may be entitled under the Articles of Incorporation, any statute, bylaw,
agreement, vote of stockholders, or otherwise.

Item 29. PRINCIPAL UNDERWRITERS.

(a) Allmerica Investments, Inc. also acts as principal underwriter for the
following:
- VEL Account, VEL II Account, Separate Accounts VA-K, VA-P,
Allmerica Select Separate Account and Inheiritage Account of Allmerica
Financial Life Insurance and Annuity Company
- Separate Account I, Separate Accounts VA-K, VA-P, Allmerica Select
Separate Account,
VEL II Account and Inheiritage Account of State Mutual
- Allmerica Investment Trust

(b) The Principal Business Address of each of the following Directors and
Officers of Allmerica Investments, Inc. is:
440 Lincoln Street
Worcester, Massachusetts 01653

Name Position or Office with Underwriter
---- -----------------------------------
Abigail M. Armstrong Secretary and Counsel

Philip J. Coffey Vice President

Bob A. Freelove Vice President

John F. Kelly Director

John F. O'Brien Director

Stephen Parker PRESIDENT AND CEO

Edward J. Parry, III Treasurer

Richard M. Reilly Director

Eric A. Simonsen Director

Ronald K. Smith Vice President

Mark Steinberg Senior Vice President

Robert T. Stemple Vice President and Controller

Item 30. LOCATION OF ACCOUNTS AND RECORDS.

Each account, book or other document required to be maintained by Section 31(a)
of the Investment Company Act of 1940 and Rules 31a-1 to 31a-3 thereunder are
maintained by the Company at 440 Lincoln Street, Worcester, Massachusetts or on
behalf of the Company by the Shareholder Services Group, Inc. at 290 Donald
Lynch Boulevard, Marlborough, Massachusetts.

Item 31. MANAGEMENT SERVICES.

Effective March 31, 1995, the Company has engaged The Shareholder Services
Group, Inc., 53 State Street, Boston, Massachusetts to provide daily unit value
calculations and related services for the Company's separate accounts.

Item 32. UNDERTAKINGS.

(a) Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned registrant hereby undertakes to file with
the Securities and Exchange Commission

<PAGE>

such supplementary and periodic information, documents, and reports as may be
prescribed by any rule or regulation of the Commission heretofore or hereafter
duly adopted pursuant to authority conferred in that section.

(b) The registrant hereby undertakes to include in the prospectus a postcard
that the applicant can remove to send for a Statement of Additional Information.

(c) The registrant hereby undertakes to deliver a Statement of Additional
Information promptly upon written or oral request, according to the requirements
of this Form.

(d) Insofar as indemnification for liability arising under the 1933 Act may be
permitted to Directors, Officers and Controlling Persons of Registrant under any
registration statement, underwriting agreement or otherwise, Registrant has been
advised that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by Registrant of expenses incurred or
paid by a Director, Officer or Controlling Person of Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
Director, Officer or Controlling Person in connection with the securities being
registered, Registrant 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 1933 Act and will be governed by the final
adjudication of such issue.

Item 33. REPRESENTATIONS CONCERNING WITHDRAWAL RESTRICTIONS ON SECTION 403(B)
PLANS AND UNDER THE TEXAS OPTIONAL RETIREMENT PROGRAM.

Registrant, a separate account of Allmerica Financial Life Insurance and Annuity
Company ("Company"), states that it is (a) relying on Rule 6c-7 under the 1940
Act with respect to withdrawal restrictions under the Texas Optional Retirement
Program ("Program") and (b) relying on the "no-action" letter (Ref. No. IP-6-88)
issued on November 28, 1988 to the American Council of Life Insurance, in
applying the withdrawal restrictions of Internal Revenue Code Section
403(b)(11). Registrant has taken the following steps in reliance on the letter:

1. Appropriate disclosures regarding the redemption restrictions imposed by the
Program and by Section 403(b)(11) have been included in the prospectus of
each registration statement used in connection with the offer of the
Company's variable contracts.

2. Appropriate disclosures regarding the redemption restrictions imposed by the
Program and by Section 403(b)(11) have been included in sales literature
used in connection with the offer of the Company's variable contracts.

3. Sales Representatives who solicit participants to purchase the variable
contracts have been instructed to specifically bring the redemption
restrictions imposed by the Program and by Section 403(b)(11) to the
attention of potential participants.

4. A signed statement acknowledging the participant's understanding of (i) the
restrictions on redemption imposed by the Program and by Section 403(b)(11)
and (ii) the investment alternatives available under the employer's
arrangement will be obtained from each participant who purchases a variable
annuity contract prior to or at the time of purchase.

Registrant hereby represents that it will not act to deny or limit a transfer
request except to the extent that a Service-Ruling or written opinion of
counsel, specifically addressing the fact pattern involved and taking into
account the terms of the applicable employer plan, determines that denial or
limitation is necessary for the variable annuity contracts to meet the
requirements of the Program or of Section 403(b). Any transfer request not so
denied or limited will be effected as expeditiously as possible.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this post-effective
amendment to the Registration Statement to be signed on its behalf by the
undersigned, all in the City of Worcester, and Commonwealth of Massachusetts
on the 25th day of September, 1995. Registrant certifies that it meets the
requirements of Securities Act Rule 485(b) for effectiveness of this post-
effective amendment to its Registration Statement.

SMA LIFE ASSURANCE COMPANY
SEPARATE ACCOUNT VA-C

Attest: /s/ Joseph W. MacDougall, Jr.
----------------------------------------
Joseph W. MacDougall, Jr.
Vice President, Associate General Counsel
and Assistant Secretary

Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed by the following persons in the
capacities and on the date indicated.

Signature Title Date
- --------- ----- ----

/s/ Richard M. Reilly Director, President and September 25, 1995
- -------------------------- Chief Executive Officer
Richard M. Reilly

/s/ John F. O'Brien Director and Chairman of the
- -------------------------- Board
John F. O'Brien

/s/ Eric A. Simonsen Director, Vice President and
- -------------------------- Chief Financial Officer
Eric A. Simonsen

/s/ Mark R. Colborn Vice President and
- -------------------------- Controller
Mark R. Colborn

/s/ Richard J. Baker Director and Vice President
- --------------------------
Richard J. Baker

/s/ John F. Kelly Director
- -------------------------
John F. Kelly

<PAGE>

CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION

SMA LIFE ASSURANCE COMPANY, a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware, DOES HEREBY
CERTIFY:

FIRST: That at a meeting of the Board of Directors of SMA Life Assurance
Company resolutions were duly adopted setting forth a proposed amendment of the
Certificate of Incorporation of said corporation, declaring said amendment to be
advisable and calling a meeting of the stockholders of said corporation for
consideration thereof. The resolution setting forth the proposed amendment is
as follows:

RESOLVED: That the Certificate of Incorporation of this corporation be amended
by changing the Article thereof numbered "First" so that as amended said Article
shall be and read as follows: "THE NAME OF THE CORPORATION IS ALLMERICA
FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY."

SECOND: That at a meeting of the Board of Directors of SMA Life Assurance
Company resolutions were duly adopted setting forth a proposed amendment of the
Certificate of Incorporation of said corporation, declaring said amendment to be
advisable and calling a meeting of the stockholders of said corporation for
consideration thereof. The resolution setting forth the proposed amendment is
as follows:

RESOLVED: That effective October 1, 1995, and subject to the approval of the
Stockholder of the Company, the Certificate of Incorporation of SMA Life
Assurance Company, a Delaware corporation, shall be amended to add the following
as Article Tenth:

"A director or officer of this corporation shall not be liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director or officer, except to the extent that exculpation from
liability is not permitted under the General Corporation Law of the State of
Delaware as in effect at the time such liability is determined. No amendment or
repeal of this paragraph shall apply to or have any effect on the liability of
alleged liability of any director or officer of the corporation for or with
respect to any acts or omissions of such director or officer occurring prior to
such amendment or repeal.

THIRD: That thereafter, pursuant to resolution of its Board of Directors, a
special meeting of the stockholders of said corporation was duly called and
held, upon notice in accordance with Section 222 of the General Corporation Law
of the State of Delaware, at which meeting the necessary number of shares as
required by statue were voted in favor of the amendments.

<PAGE>

FOURTH: That said amendments were duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.

FIFTH: That the capital of said corporation shall not be reduced or increased
by reason of said amendment.

SIXTH: That the effective date of said amendments shall be October 1, 1995.

In Witness Whereof, said SMA Life Assurance Company has caused its corporate
seal to be hereunto affixed and this certificate to be signed by Bradford K.
Gallagher, its President, and Abigail M. Armstrong, its Secretary, this 29th day
of June 1995.

By:
------------------------------------
President
(Corporate Seal)

By:
------------------------------------
Secretary
Attest:

__________________________

<PAGE>

CERTIFICATE OF AMENDMENT

CERTIFICATE OF INCORPORATION

***

American Variable Annuity Life Assurance Company, a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware,

DOES HEREBY CERTIFY:

FIRST: That at a meeting of the Board of Directors of American Variable
Annuity Life Assurance Company resolutions were duly adopted setting forth a
proposed amendment of the Certificate of Incorporation of said corporation,
declaring said amendment to be advisable and calling a meeting of the
stockholders of said corporation for consideration thereof. The resolution
setting forth the proposed amendment is as follows:

RESOLVED, that the Certificate of Incorporation of this corporation be
amended by changing the Article thereof numbered "FIRST" so that, as amended
said Article shall be and read as follows:

"The name of the corporation is SMA Life Assurance Company"

SECOND: That thereafter, pursuant to resolution of its Board of Directors,
a special meeting of the stockholders of said corporation was duly called and
held, upon notice in accordance with Section 222 of the General Corporation Law
of the State of Delaware at which meeting the necessary number of shares as
required by statute were voted in favor of the amendment.

THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.

FOURTH: That the capital of said corporation shall not be reduced under or
by reason of said amendment.

FIFTH: That the effective date of said amendment shall be January 1,
1982.

IN WITNESS WHEREOF, said American Variable Annuity Life Assurance Company
has caused its corporate seal to be hereunto affixed and this certificate to be
signed by John M. Quinlan, its President, and Sheila B. St. Hilaire, its
Secretary, this 28th day of September, 1981.

/s/ John M. Quinlen
----------------------------------
By: John M. Quinlan
President

/s/ Sheila B. St. Hilaire
---------------------------------
(CORPORATE SEAL) By: Sheila B. St. Hilaire
Secretary

ATTEST: Ralph L. Diller, Asst. Secretary

<PAGE>
CERTIFICATE OF INCORPORATION

AMERICAN VARIABLE ANNUITY LIFE ASSURANCE COMPANY, INC.

KNOW ALL MEN BY THESE PRESENTS: EXHIBIT A

That the following Certificate of Incorporation of AMERICAN VARIABLE ANNUITY
LIFE ASSURANCE COMPANY, INC. shall henceforth be, and constitute the Certificate
of Incorporation of said Corporation as follows:

First: The name of the Corporation is American Variable Annuity Life
Assurance Company, Inc.

Second: Its registered office in the State of Delaware is located at No. 229
South State Street, Dover, County of Kent. The registered agent in
charge thereof at such address is The Prentice-Hall Corporation
System, Inc.

Third: The nature of the business or objects or purposes to be transacted,
promoted, or carried on by the Corporation are as follows:

(a) The insuring of lives of persons and every insurance pertaining
thereto or connected therewith, including accident and health
insurance and the granting or disposing of annuities and the
transacting of disability insurance, whether on a group,
individual, franchise or reinsurance basis, and any other type of
insurance or other business which may be or hereafter be lawfully
conducted by legal reserve life insurance companies organized
under the laws of the State of Delaware. Any such business may be
transacted on a variable basis stated in terms of units or
otherwise but payable in lawful currency, or on a fixed basis
stated in terms of predetermined amounts of lawful currency; the
Corporation may transact any such business in Delaware or
elsewhere.

(b) The Directors of the Corporation shall have the power to segregate
and hold separate from the other funds and assets of the
Corporation premiums or other funds received from the sale of
various types and classes of policies and annuity contracts; the
amount held may be invested in such proportions and in such manner
as determined by the Board of Directors of the Corporation or by a
committee thereof; except as may otherwise by required under
Subsection (c) hereof. The assets held in such separate account
or accounts shall not be chargeable with liabilities arising out
of any other business the Corporation may conduct, but shall be
held and applied exclusively for the benefit of the holders or
beneficiaries of those variable annuity contracts or life
insurance policies with respect to which the account or accounts
have been established;

(c) If a separate account is registered with an Agency of the Federal
Government having jurisdiction over such separate account or
contracts issued in connection therewith, provisions may be made
in the rules and regulations for such separate account for voting
by
<PAGE>

owners of a separate account contracts with respect to the
election of a board of managers for such account, ratification of
the selection of auditors for such account by such board, approval
of investment advisory service contracts for such account, and
such other matters as may be required by applicable law.

Fourth: The authorized capital stock of the Corporation shall be 10,000 shares
of $1,000 par value per share. Stock authorized but not issued may be
issued for such consideration as shall be fixed from time to time by
the Board of Directors, but the consideration shall at all times be
not less than the par value of said shares. When shares of stock
shall be issued, and paid for in cash at the rate determined by the
Board of Directors, such shares shall thereafter be nonassessable.

Fifth: The names and places of residence of the incorporators are as follows:

Ralph L. Diller, 11 Notre Dame Street, Leominster, Massachusetts
01543;
Gaynelle G. Jones, 8 Wabon Street, Dorchester, Massachusetts 02121;
Marilyn G. Quattrocchi, Harris Avenue, Lincoln, Rhode Island 02865

Sixth: The powers of the incorporators shall terminate upon the filing of
this Certificate of Incorporation, and the initial Board of Directors
of the Corporation shall be composed of:

Harold E. Ahlquist 75 Birchwood Drive
Holden, Massachusetts 01520

W. Douglas Bell 50 Wyndhurst Drive
Holden, Massachusetts 01520

Norman C. Cross 35 Leominster Road
Lunenburg, Massachusetts 01420

Roland A. Erickson 20 Church Street
Greenwich, Connecticut 06830

Frederick Fedeli 22 High Street
Southboro, Massachusetts 01772

John H. Freese 85 Wyndhurst Drive
Holden, Massachusetts 01520

Ralph F. Gow 14 Monmouth Road
Worcester, Massachusetts 01609

Paul R. O'Connell 34 Drury Lane
Worcester, Massachusetts 01609

and they shall serve until the Annual Meeting of the Corporation to be
held on the second Wednesday of April, 1975 and until their successors
shall have been elected and qualified.

Seventh: The following additional provisions not inconsistent with law are
hereby established for the management, conduct, and regulation of the
business and officers of the Corporation, and for creating, limiting,
defining, and

<PAGE>

regulating the powers of the Corporation and of its directors and
stockholders:

(a) The affairs and business of the Corporation shall be managed and
controlled by a Board of Directors consisting of not less than
three (3).

(b) The Directors shall be elected in such number, for such terms, and
in such manner as shall be provided in the By-laws and any
Director of the Corporation may be removed at any annual or
special meeting of stockholders by the same vote as that required
to elect a Director.

(c) Meetings of stockholders may be held outside the State of Delaware
if the By-laws so provide, in such place as shall be designated in
the notice of meeting. Except as otherwise required by law, the
presence in person or by proxy of the holders of a majority of the
shares of stock entitled to vote shall constitute a quorum at any
meeting of stockholders.

Eighth: The Corporation shall have perpetual existence unless sooner
terminated by the affirmative vote of the holders of two-thirds (2/3)
of the issued and outstanding stock.

Ninth: These Articles of Incorporation may be amended by written
authorization of the holders of a majority of the shares of stock
outstanding and entitled to vote or by affirmative vote of such a
majority voting at a lawful meeting of such stockholders provided
notice given for such meeting includes due notice of the proposal to
amend.

We, the undersigned, for the purpose of forming a corporation under the laws of
the State of Delaware, do make, file, and record this Certificate, and do
certify that the facts herein stated are true; and we have accordingly hereunto
set our respective hands.

Dated at July 26, 1974.

Ralph L. Diller

Gaynelle G. Jones

Marilyn G. Quattrocchi

<PAGE>
Commonwealth of Massachusetts )
)ss
County of Worcester )

Be it remembered, that on this 26th day of July, 1974, there personally appeared
before me, the undersigned, a notary public, Ralph L. Diller, Gaynelle G. Jones,
Marilyn G. Quattrocchi, parties to the foregoing Certificate of Incorporation,
known to me personally to be such, and I having first made known to them and
each of them the contents of said Certificate, they did each severally
acknowledge that they signed, sealed, and delivered the same as their voluntary
act and deed, and each deposed that the facts therein stated were truly set
forth.

Given under my hand and seal of office the day of the year aforesaid.

Robert G. Juneau
Notary Public

My Commission Expires: May 30, 1980

<PAGE>

AGREEMENT OF MERGER

AMERICAN VARIABLE ANNUITY LIFE ASSURANCE COMPANY
(AN ARKANSAS COMPANY)

AND

AMERICAN VARIABLE ANNUITY LIFE ASSURANCE COMPANY, INC.
(A DELAWARE COMPANY)

This Agreement and Plan of Merger (hereinafter referred to as "Agreement")
made as of this 23rd day of September, 1974, between American Variable Annuity
Life Assurance Company (hereinafter referred to as AVA Co.), a stock insurance
company incorporated and existing under the laws of the State of Arkansas and
having its principal place of business in Little Rock, Arkansas, and American
Variable Annuity Life Assurance Company, Inc. (hereinafter referred to as AVA,
Inc.), a stock insurance company incorporated and existing under the laws of the
State of Delaware and having its registered office in Dover, Delaware and its
principal place of business in Worcester, Massachusetts. (Said companies being
sometimes hereinafter called "Constituent Companies").

Whereas, the purpose of this Agreement is to accomplish the transfer of the
domicile of AVA Co. from the State of Arkansas to the State of Delaware through
the utilization of the merger statutes of the respective states, and

Whereas, after full consideration, the Boards of Directors of the
Constituent Companies have deemed it is in the best interests of the Companies
and their shareholders that the Constituent Companies be merged as a single
company and the Surviving Company of said merger comprise the same business
enterprise as AVA Co.

WITNESSETH:

IN CONSIDERATION of the terms and of the mutual agreements, covenants, and
provisions herein contained, and pursuant to the laws of Arkansas and of
Delaware, this Agreement of Merger is made and entered into by and between the
Board of Directors of the said AVA Co. and the Board of Directors of the said
AVA, Inc., do hereby agree as follows:

(1) At the effective date and time set forth herein, AVA Co. is hereby
merged into and with AVA, Inc. with AVA, Inc. the surviving and continuing
company under the laws of the State of Delaware. At the effective date of
merger AVA, Inc. shall assume the name of American Variable Annuity Life
Assurance Company (hereinafter referred to as the "Surviving Company").

(2) The Surviving Company shall continue as a stock insurance company,
and shall have the objects and purposes stated in its Certificate of
Incorporation, Exhibit A annexed, and in general terms have the power and
authority to transact any business which AVA Co. is empowered and authorized to
transact, and shall have the authority to transact any business which domestic
life and health insurance companies are now or hereafter may be authorized to
transact under the laws of the State of Delaware.

(3) At the said effective date and time, and by operation of the
applicable

<PAGE>

laws and statutes of the State of Arkansas and the State of Delaware relating to
the merger of stock insurance corporations, all of the rights and assets of AVA
Co. including without limitation assets tangible and intangible, real and
personal, of whatsoever kind and character and wheresoever located, including
all separate accounts of AVA Co., shall become the assets of the Surviving
Company.

(4) At the effective date and time and by operation of the applicable
laws and statutes of the State of Arkansas and the State of Delaware, the
Surviving Company shall assume and shall be liable and responsible for any and
all of the legal liabilities and legal obligations of AVA Co. then outstanding,
including without limitation, all liabilities for taxes, all liabilities under
insurance contracts theretofore issued or then on binder, and all other legal
liabilities and obligations of AVA Co.

(5) Prior to the merger, the Board of Directors of AVA, Inc. shall
adopt a resolution to be effective at the time of the merger providing that such
separate account or accounts as may be established and maintained by AVA Co. at
the time of the merger shall be deemed to be separate accounts of the Surviving
Company pursuant to the provisions of Delaware law and that the existence of
such separate account or accounts shall continue uninterrupted.

(6) The Surviving Company, through its appropriate officers and
directors, is hereby authorized in the name of either of the Constituent
Companies or in its own name, to execute, acknowledge, and deliver all
instruments of further assurance and to do all other such acts or things as it
may, at any time, deem necessary or desirable to vest in the Surviving Company
any property or rights of any of the merged corporations, or to carry out any of
the purposes expressed in this Agreement.

(7) The registered office of the Surviving Company in Delaware shall be
in Dover, County of Kent, Delaware. The principal office of the Surviving
Company shall be in the City of Worcester, in the County of Worcester,
Massachusetts.

(8) The present By-Laws of AVA, Inc. set forth in Exhibit 3, shall be
the By-Laws of the Surviving Company unless and until altered, amended or
repealed in the manner therein provided.

(9) All shares if authorized and outstanding capital stock of AVA,
Inc., such stock being owned in its entirety AVA Co., shall be cancelled on the
effective date of the merger.

(10) All shares of authorized and outstanding capital stock of AVA Co.
owned in its entirety by State Mutual Life Assurance Company of America, shall
be cancelled effective the date of the merger and stock of the Surviving Company
shall be issued to State Mutual in amounts equivalent to the stock owned in AVA
Co. prior to the merger.

(11) The Constituent Companies agree to do and perform each and every
act required by the laws of Delaware and Arkansas to effectuate such merger.

(12) The proper officers of the respective companies hereto are
authorized and directed from time to time, as the occasion may arise, to do all
acts and to execute and acknowledge all affidavits, deeds, contracts,
assurances, assignments and instruments in writing, and to sign and deliver all
checks on the bank accounts of the respective parties hereto, and do anything
else deemed necessary or proper to

<PAGE>

carry out the provisions of this Agreement, and to affix the corporate seals of
the respective parties to any such instrument in writing.

(13) The merger shall become effective at the close of business December
31, 1974.

(14) In order to clarify the intention of the parties hereto or to
effect or facilitate the filing, recording or official approval of this
Agreement and Plan of Merger and the consummation hereof in accordance with the
purpose and intent of this Agreement, any of the terms or conditions of this
Agreement may be, at any time prior to the merger, amended by mutual agreement
of the Constituent Companies by action duly taken by the respective Boards of
Directors.

(15) This Agreement shall be contingent upon approval by the
shareholders of the Constituent Companies and upon approval by a majority of the
variable annuity contract owners of AVA Co. as the term majority is defined in
the By-Laws and Regulations of its separate account American Variable Annuity
Fund.

(16) This Agreement shall be and become void and of no effect and the
merger contemplated hereby shall be deemed to be abandoned if a majority of the
Board of Directors of either Constituent Companies, at a meeting thereof duly
called and held, shall be resolution deem that it is inadvisable to consummate
the merger.

(17) This Agreement shall further be contingent upon obtaining necessary
approval from the Commissioners of Insurance in the States of Arkansas and
Delaware and the approval of the appropriate governmental regulatory agencies.

(18) No director or officer of either of the Constituent Companies or of
any parent corporation or subsidiary insurer, shall receive any fee, commission,
other compensation or valuable consideration whatever other than regular salary
directly or indirectly, for in any manner aiding, promoting or assisting in the
merger.

(19) Without further action of the shareholders of AVA Co. or AVA, Inc.
or the Boards of Directors of the Constituent Companies, the officers of the
Surviving Company shall be the officers of AVA, Inc. immediately prior to the
merger and there shall be eight initial directors of the Surviving Company whose
names and addresses are as follows:

Harold E. Ahlquist, Jr. Member
75 Birchwood Drive
Holden MA 01520

W. Douglas Bell Chairman
50 Wyndhurst Drive
Holden MA 01520

Norman C. Cross Member
38 Dusty Miller Road
Falmouth MA 02540

Roland A. Erickson Member
101 M Lewis Street
Greenwich CT 06830

<PAGE>

Frederick Fedeli Member
22 High Street
Southboro MA 01772

John H. Freese Member
85 Wyndhurst Drive
Holden MA 01520

Ralph F. Gow Member
14 Monmouth Road
Worcester MA 01609

Paul R. O'Connell Member
34 Drury Lane
Worcester MA 01609

IN WITNESS WHEREOF, American Variable Annuity Life Assurance Company and
American Variable Annuity Life Assurance Company, Inc. have caused this
Agreement to be executed in their corporate names by their respective officers
and who by majorities of their Boards of Directors on this 23rd day of
September, 1974.

AMERICAN VARIABLE ANNUITY LIFE
ASSURANCE COMPANY

(Corporate Seal) By: John H. Freese, President

Attest: Ralph L. Diller, Secretary

Directors of American Variable Annuity Life Assurance Company:

Harold E. Ahlquist, Jr. Frederick Fedeli

W. Douglas Bell John H. Freese

Norman C. Cross Ralph G. Gow

Roland A. Erickson Paul R. O'Connell

AMERICAN VARIABLE ANNUITY LIFE
ASSURANCE COMPANY, INC.

/s/ John H. Freese
--------------------------------
(Corporate Seal) By: John H. Freese, President

Attest: Ralph L. Diller, Secretary

<PAGE>

Directors of American Variable Annuity Life Assurance Company, Inc.:

Harold E. Ahlquist, Jr. Frederick Fedeli

W. Douglas Bell John H. Freese

Norman C. Cross Ralph F. Gow

Roland A. Erickson Paul R. O'Connell

<PAGE>

CERTIFICATE OF OWNERSHIP AND MERGER

MERGING

AMERICAN VARIABLE ANNUITY LIFE ASSURANCE COMPANY

INTO

AMERICAN VARIABLE ANNUITY LIFE ASSURANCE COMPANY, INC.

American Variable Annuity Life Assurance Company, a corporation organized under
the laws of the State of Arkansas does hereby certify:

FIRST: That it was organized pursuant to the provisions of the Arkansas
Insurance Laws on the 23rd day of January, 1967.

SECOND: That it owns all of the outstanding shares of capital stock of
American Variable Annuity Life Assurance Company, Inc., a corporation organized
pursuant to the provisions of the General Corporation Laws of the State of
Delaware on the 26th day of July, 1974.

THIRD: That its Board of Directors at a meeting held on the 30th day of July,
1974 determined to merge the Corporation into said American Variable Annuity
Life Assurance company, Inc. and did adopt the following resolution:

"RESOLVED: That subject to the approval of State Mutual Life
Assurance Company of America as the sole shareholder of the
company and the approval of the company's variable annuity
contract owners, the company enter into a merger agreement with
its wholly owned subsidiary, American Variable Annuity Life
Assurance Company, Inc. effective with the close of business,
December 31, 1974. The appropriate officers of the company are
hereby authorized to execute the merger agreement substantially
in the form attached hereto and take whatever action may be
necessary to carry out the terms of said merger agreement."

FOURTH: That the attached copy of the Agreement of Merger is the same as that
approved and authorized by resolution of the Board of Directors of the Company
on July 30,1974.

FIFTH: That the sole stockholder of the Company, State Mutual Life Assurance
Company of America, at a stockholder meeting duly called and held on August 16,
1974 for the purpose of approving the merger voted to approve the merger of the
Company into its wholly owned subsidiary, American Variable Annuity Life
Assurance Company, Inc. pursuant to the Agreement of Merger as authorized by the
Board of Directors of the Company on July 30, 1974.

SIXTH: That pursuant to the Agreement of Merger approved and authorized by
the Company's Board of Directors, the merger of American Variable Annuity Life
Assurance Company into American Variable Annuity Life Assurance Company, Inc.
shall be effective at the close of business December 31, 1974.

SEVENTH: That pursuant to the Agreement of Merger approved and authorized by
the Company's Board of Directors, the surviving company shall, effective with
the

<PAGE>

merger, assume the name American Variable Annuity Life Assurance Company.

IN WITNESS WHEREOF, said American Variable Annuity Life Assurance Company, has
caused this Certificate of Ownership and Merger to be signed by John H. Freese,
its President, and Ralph L. Diller, its Secretary, and its corporate seal to be
affixed thereto this 5th day of December, A.D. 1974.

AMERICAN VARIABLE ANNUITY LIFE
ASSURANCE COMPANY

By: /s/ John H. Freese
--------------------------------
President

By: /s/ Ralph L. Diller
--------------------------------
Secretary

(CORPORATE SEAL)

<PAGE>

STATE OF MASSACHUSETTS

COUNTY OF WORCESTER

BE IT REMEMBERED that on this 5th day of December, 1974, personally came
before me, a Notary Public in and for the County and State aforesaid, John H.
Freese, President and Ralph L. Diller, Secretary of American Variable Annuity
Life Assurance Company, a corporation of the State of Arkansas, and they duly
executed said certificate before me and severally acknowledged the said
certificate to be their act and deed and the act and deed of said corporation
and the facts stated therein are true; that the signatures of the said officers
are in the handwriting of each of said officers respectively; and that the seal
affixed to said certificate is the common or corporate seal of said corporation.

IN WITNESS WHEREOF, I have hereunto set my hand and seal of office the day
and year aforesaid.

Ethel Demark
Notary Public

(SEAL)

<PAGE>

EXHIBIT 9
September 25, 1995

SMA Life Assurance Company
440 Lincoln Street
Worcester MA 01653

Gentlemen:

In my capacity as Counsel of SMA Life Assurance Company (the "Company"), I
have participated in the preparation of the Post-Effective Amendments to the
Registration Statements for Separate Accounts VA-A, VA-B, VA-C, VA-G and VA-H
(collectively, the "Separate Accounts"), on Form N-4 under the Securities Act
of 1933 and the Investment Company Act of 1940, with respect to the Company's
individual qualified variable annuity contracts and individual non-qualified
variable annuity contracts.

I am of the following opinion:

1. The Separate Accounts are separate accounts of the Company validly
existing pursuant to the Delaware Insurance Code and the regulations
issued thereunder.

2. The assets held in the Separate Accounts are not chargeable with
liabilities arising out of any other business the Company may conduct.

3. The individual qualified and non-qualified variable annuity contracts,
when issued in accordance with the Prospectus contained in the
Registration Statements and upon compliance with applicable local law,
will be legal and binding obligations of the Company in accordance
with their terms and when sold will be legally issued, fully paid and
non-assessable.

In arriving at the foregoing opinion, I have made such examination of law and
examined such records and other documents as in my judgment are necessary or
appropriate. I hereby consent to the filing of this opinion as an exhibit to
the Post-Effective Amendments to the Registration Statements of the Separate
Accounts filed under the Securities Act of 1933.

Very truly yours,
/s/ Sheila B. St. Hilaire
Sheila B. St. Hilaire
Counsel

<PAGE>
EXHIBIT 10

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in the Statement of Additional Information
constituting part of this Post-Effective Amendment No. 39 to the Registration
Statement on Form N-4 of our report dated February 13, 1995 relating to the
financial statements of SMA Life Assurance Company and our report dated
February 13, 1995, relating to the financial statements of Separate Account
VA-C of SMA Life Assurance Company, both of which appear in such Statement of
Additional Information. We also consent to the reference to us under the
heading "Experts" in such statement of Additional Information.

/s/ Price Waterhouse LLP

Price Waterhouse LLP
Boston, Massachusetts
September 25, 1995

<PAGE>
<ARTICLE> 6
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<NUMBER> 52
<NAME> SMA VARIABLE ANNUITY SEPARATE ACCOUNT VA-C

<S> <C>
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<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
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<APPREC-INCREASE-CURRENT> (2,212,717)
<NET-CHANGE-FROM-OPS> (1,093,403)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
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<NUMBER-OF-SHARES-SOLD> 866,192
<NUMBER-OF-SHARES-REDEEMED> 2,359,679
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (5,999,466)
<ACCUMULATED-NII-PRIOR> 0
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<PER-SHARE-NAV-BEGIN> 3.404
<PER-SHARE-NII> 0.178
<PER-SHARE-GAIN-APPREC> (0.319)
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<PER-SHARE-NAV-END> 3.263
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</TABLE>