PRUCO LIFE PRUVIDER VARIABLE APPRECIABLE ACCOUNT, 485BPOS, 1995-04-26

PRUCO LIFE PRUVIDER VARIABLE APPRECIABLE ACCOUNT
485BPOS, 1995-04-26

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As filed with the SEC on _______________. Registration No. 33-49994

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

----------

FORM S-6

Post-Effective Amendment No. 6

FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED
ON FORM N-8B-2

----------

PRUCO LIFE PRUVIDER VARIABLE APPRECIABLE ACCOUNT
(Exact Name of Trust)

PRUCO LIFE INSURANCE COMPANY
(Name of Depositor)

213 Washington Street
Newark, New Jersey 07102-2992
(800) 437-4016, Ext. 46
(Address and telephone number of principal executive offices)

----------

Thomas C. Castano
Assistant Secretary
Pruco Life Insurance Company
213 Washington Street
Newark, New Jersey 07102-2992
(Name and address of agent for service)

Copy to:
Jeffrey C. Martin
Shea & Gardner
1800 Massachusetts Avenue, N.W.
Washington, D.C. 20036

----------

PRUvider Variable Appreciable Life Insurance Contracts--The Registrant has
registered an indefinite amount of securities pursuant to Rule 24f-2 under the
Investment Company Act of 1940. The Rule 24f-2 notice for fiscal year 1994 was
filed on February 27, 1995.

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

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

/x/ on May 1, 1995 pursuant to paragraph (b) of Rule 485
---------------
(date)

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

o on pursuant to paragraph (a) of Rule 485
--------------------
(date)

<PAGE>

CROSS REFERENCE SHEET
(as required by Form N-8B-2)

N-8B-2 Item Number Location
- ------------------ --------

1. Cover Page

2. Cover Page

3. Not Applicable

4. Sale of the Contract and Sales
Commissions (Part 1B)

5. Pruco Life PRUvider Variable
Appreciable Account

6. Pruco Life PRUvider Variable
Appreciable Account

7. Not Applicable

8. Not Applicable

9. Litigation

10. Brief Description of the Contract;
Short-Term Cancellation Right or
"Free Look"; Transfers; How the
Contract Fund Changes with Investment
Experience; How a Contract's Death
Benefit Will Vary; Surrender of a
Contract; Withdrawal of Excess Cash
Surrender Value (Part 1B); When
Proceeds are Paid; Contract Loans;
Lapse and Reinstatement; Paid-Up
Insurance Option; The Fixed-Rate
Option; Voting Rights; Possible
Replacement of Series Fund (Part 1B)

11. Brief Description of the Contract;
Pruco Life PRUvider Variable
Appreciable Account

12. Cover Page; Brief Description of the
Contract; Flexible Portfolios;
Further Information About The Series
Fund; Sale of the Contract and Sales
Commissions (Part 1B)

13. Brief Description of the Contract;
Premiums; Allocation of Premiums;
Contract Fees and Charges; Reduction
of Charges for Concurrent Sales to
Several Individuals; (Part 1B); Sale
of the Contract and Sales Commissions
(Part 1B)

14. Brief Description of the Contract;
Detailed Information for Prospective
Contract Owners

15. Brief Description of the Contract;
Premiums; Allocation of Premiums;
Transfers; General Information About
Pruco Life PRUvider Variable
Appreciable Account, and The Fixed
Rate Option

16. Brief Description of the Contract;
Detailed Information for Prospective
Contract Owners

17. Surrender of a Contract; Withdrawal
of Excess Cash Surrender Value (Part
1B); When Proceeds are Paid

18. Pruco Life PRUvider Variable
Appreciable Account; How the Contract
Fund Changes with Investment
Experience

19. Reports to Contract Owners

20. Not Applicable

<PAGE>

N-8B-2 Item Number Location
- ------------------ --------

21. Contract Loans

22. Not Applicable

23. Not Applicable

24. Other Standard Contract Provisions
(Part 1B); Possible Replacement of
The Series Fund (Part 1B)

25. Brief Description of the Contract

26. Brief Description of the Contract;
Contract Fees and Charges

27. Brief Description of the Contract

28. Brief Description of the Contract;
Directors and Officers of Pruco Life
and Management of the Series Fund
(Part 1B)

29. Brief Description of the Contract

30. Not Applicable

31. Not Applicable

32. Not Applicable

33. Not Applicable

34. Not Applicable

35. Brief Description of the Contract

36. Not Applicable

37. Not Applicable

38. Sale of the Contract and Sales
Commissions (Part 1B)

39. Sale of the Contract and Sales
Commissions (Part 1B)

40. Not Applicable

41. Sale of the Contract and Sales
Commissions (Part 1B)

42. Not Applicable

43. Not Applicable

44. Brief Description of the Contract;
Further Information About the Series
Fund; How the Contract Fund Changes
with Investment Experience; How a
Contract's Death Benefit Will Vary

45. Not Applicable

46. Brief Description of the Contract;
Pruco Life PRUvider Variable
Appreciable Account; Further
Information About the Series Fund

47. Pruco Life PRUvider Variable
Appreciable Account; Further
Information About the Series Fund

48. Not Applicable

49. Not Applicable

50. Not Applicable

51. Not Applicable

52. Possible Replacement of the Series
Fund (Part 1B)

<PAGE>

N-8B-2 Item Number Location
- ------------------ --------

53. Tax Treatment of Contract Benefits;
Tax Treatment of Contract Benefits
(Part 1B)

54. Not Applicable

55. Not Applicable

56. Not Applicable

57. Not Applicable

58. Not Applicable

59. Financial Statements; Consolidated
Financial Statements of Pruco Life
Insurance Company and Subsidiaries

<PAGE>

PART I

INFORMATION REQUIRED IN PROSPECTUS

<PAGE>

PRUvider
Variable
Appreciable Life(R)
Insurance

May 1, 1995
PROSPECTUS

The Prudential Series Fund, Inc.
and
The Pruco Life PRUvider Variable Appreciable Account

SVAL-1 Ed 5-95 Pruco Life Insurance Company
Catalog No. 6469898

<PAGE>

PROSPECTUS
May 1, 1995

PRUCO LIFE INSURANCE COMPANY
PRUVIDER VARIABLE APPRECIABLE ACCOUNT

PRUvider(SM)
Variable Appreciable Life(R)
Insurance Contract

This prospectus describes a variable life insurance contract issued by Pruco
Life Insurance Company ("Pruco Life"), a stock life insurance company that is a
wholly-owned subsidiary of The Prudential Insurance Company of America ("The
Prudential"). Pruco Life calls this contract its PRUvider(SM) Variable
Appreciable Life(R) Insurance Contract* (the "Contract"). The Contract provides
whole-life insurance protection. The death benefit varies daily with investment
experience but will never be less than a guaranteed minimum amount (the face
amount specified in the Contract). The Contract also generally provides a cash
surrender value which does not have a guaranteed minimum amount.

The assets held for the purpose of paying benefits under these and other similar
contracts are segregated from the other assets of Pruco Life and are invested in
one or both of the current subaccounts of the Pruco Life PRUvider Variable
Appreciable Account (from now on, the "Account"). In this case, the assets will
be invested in the corresponding portfolio of The Prudential Series Fund, Inc.
(from now on, the "Series Fund"). The two portfolios of the Series Fund
currently available to Contract owners are the Conservatively Managed Flexible
Portfolio and the Aggressively Managed Flexible Portfolio. The contract owner
may also choose to have the assets invested in a fixed-rate option. This
prospectus describes the Contract generally, the Pruco Life PRUvider Variable
Appreciable Account and the securities issued by the Series Fund.

Although it is advantageous to the purchaser to pay a Scheduled Premium amount
on the dates due, which are at least once a year but may be more often,
purchasers have flexibility as to when and in what amounts they pay premiums.

Before you sign an application to purchase this life insurance contract, you
should read this prospectus with care and have any questions you may have
answered by your Pruco Life representative. If you do purchase the contract, you
should retain this prospectus for future reference, together with the contract
itself that you will receive.

Additional information about the contract and the Series Fund is set forth in a
separate Statement of Additional Information which is incorporated by reference
into this prospectus. It is available without charge upon request to the Pruco
Life Insurance Company at the address shown below.

REPLACING EXISTING LIFE INSURANCE WITH A CONTRACT DESCRIBED IN THIS PROSPECTUS
MAY NOT BE TO YOUR ADVANTAGE. IF YOU CURRENTLY OWN A LIFE INSURANCE CONTRACT,
THE BENEFITS AND COSTS OF PURCHASING ADDITIONAL INSURANCE UNDER THE EXISTING
POLICY SHOULD BE COMPARED WITH THE BENEFITS AND COSTS OF PURCHASING THE CONTRACT
DESCRIBED IN THIS PROSPECTUS. IN MAKING THIS COMPARISON, YOU SHOULD CONSULT WITH
A QUALIFIED TAX ADVISOR.

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.

Pruco Life Insurance Company
213 Washington Street
Newark, New Jersey 07102-2992
Telephone: (800) 437-4016, Ext. 46

*PRUvider is a service mark of The Prudential.
Appreciable Life is a registered mark of The Prudential.
SVAL-1 Ed. 5-95

<PAGE>

TABLE OF CONTENTS
Page

INTRODUCTION AND SUMMARY .................................................. 1
Brief Description of the Contract ................................ 1
Balanced Portfolios .............................................. 2
Conservatively Managed Flexible Portfolio ............... 2
Aggressively Managed Flexible Portfolio ................. 3
Fixed-Rate Option ................................................ 3
Transfers Between Investment Options ............................. 3
The Scheduled Premium ............................................ 3
Payment of Higher Premiums ....................................... 3
Contract Loans ................................................... 3
Differences Between the Contract and Variable Universal Life
Insurance Contracts ..................................... 3
FINANCIAL HIGHLIGHTS OF THE PORTFOLIOS OF THE SERIES FUND ................. 4
Illustrations of Cash Surrender Values, Death Benefits
and Accumulated Premiums ......................................... 7
GENERAL INFORMATION ABOUT
PRUCO LIFE PRUVIDER VARIABLE APPRECIABLE ACCOUNT AND THE
FIXED RATE OPTION ................................................ 8
Pruco Life PRUvider Variable Appreciable Account ................. 8
The Fixed-Rate Option ............................................ 8
DETAILED INFORMATION FOR PROSPECTIVE CONTRACT OWNERS ...................... 8
Requirements for Issuance of a Contract .......................... 8
Short-Term Cancellation Right or "Free Look" ..................... 9
Contract Fees and Charges ........................................ 9
Deductions from Premiums ................................ 9
Deductions from Portfolios .............................. 9
Monthly Deductions from Contract Fund ................... 9
Daily Deduction from the Contract Fund .................. 10
Surrender or Withdrawal Charges ......................... 11
Transaction Charges ..................................... 11
Contract Date .................................................... 11
Premiums ......................................................... 11
Allocation of Premiums ........................................... 12
Transfers ........................................................ 13
How the Contract Fund Changes with Investment Experience ......... 13
How a Contract's Death Benefit Will Vary ......................... 13
Contract Loans ................................................... 14
Surrender of a Contract .......................................... 14
Lapse and Reinstatement .......................................... 14
Fixed Extended Term Insurance ........................... 15
Fixed Reduced Paid-Up Insurance ......................... 15
Variable Reduced Paid-Up Insurance ...................... 15
What Happens If No Request Is Made? ..................... 15
Paid-Up Insurance Option ......................................... 15
When Proceeds Are Paid ........................................... 16
Living Needs Benefit ............................................. 16
Terminal Illness Option ................................. 16
Nursing Home Option ..................................... 16
Voting Rights .................................................... 17
Reports to Contract Owners ....................................... 17
Tax Treatment of Contract Benefits ............................... 17
Treatment as Life Insurance ............................. 17
Pre-Death Distributions ................................. 18
Other Tax Consequences .................................. 18
Other Contract Provisions ........................................ 18
FURTHER INFORMATION ABOUT THE SERIES FUND ................................. 18

<PAGE>

Page
INVESTMENT OBJECTIVES AND POLICIES
OF THE PORTFOLIOS ................................................ 19
Balanced Portfolios .............................................. 19
Conservatively Managed Flexible Portfolio ............... 19
Aggressively Managed Flexible Portfolio ................. 20
Foreign Securities ............................................... 20
Options, Futures Contracts and Swaps ............................. 21
Short Sales ...................................................... 21
Reverse Repurchase Agreements and Dollar Rolls ................... 21
Loans of Portfolio Securities .................................... 22
INVESTMENT RESTRICTIONS APPLICABLE TO THE PORTFOLIOS ...................... 22
INVESTMENT MANAGEMENT ARRANGEMENTS AND EXPENSES ........................... 22
Portfolio Brokerage and Related Practices ........................ 23
STATE REGULATION .......................................................... 23
EXPERTS ................................................................... 23
LITIGATION ................................................................ 23
EXPANDED TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION ......... 23
ADDITIONAL INFORMATION .................................................... 25
FINANCIAL STATEMENTS ...................................................... 25
FINANCIAL STATEMENTS OF THE PRUCO LIFE PRUvider VARIABLE APPRECIABLE
ACCOUNT ................................................................... A1
CONSOLIDATED FINANCIAL STATEMENTS OF
PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES ............................. B1

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO PERSON IS AUTHORIZED TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS AND THE PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION FOR
THE SERIES FUND.

<PAGE>

INTRODUCTION AND SUMMARY

This section provides only an overview of the more significant provisions of the
Contract. It omits details which are provided in the rest of this prospectus, as
well as in a Statement of Additional Information which is available to you upon
request without charge. A description of the contents of that Statement of
Additional Information is on page 23.

As you read this prospectus you should keep in mind that you are considering the
purchase of a life insurance contract. Because it is variable life insurance -
and variable life insurance has significant investment aspects and requires you
to make investment decisions - it is also a "security." That is why you have
been given this prospectus. Securities which are offered to the public must be
registered with the Securities and Exchange Commission, and the prospectus that
is a part of the registration statement must be given to all prospective buyers.
But because a substantial part of your premium pays for life insurance that will
pay to your beneficiary, in the event of your death, an amount far exceeding
your total premium payments, you should not buy this contract unless a major
reason for the purchase is to provide life insurance protection. Because the
contract provides whole-life or permanent insurance, it also serves a second
important objective. It can be expected to provide an increasing cash surrender
value that can be used during your lifetime.

Brief Description of the Contract

The PRUvider Variable Appreciable Life Contract (referred to from now on as the
"Contract") is issued and sold by the Pruco Life Insurance Company ("Pruco
Life"), a stock life insurance company, organized in 1971 under the laws of the
State of Arizona. It is licensed to sell life insurance and annuities in the
District of Columbia, Guam, and in all states except New York. These Contracts
are not offered in any state in which the necessary approvals have not yet been
obtained.

Pruco Life is a wholly-owned subsidiary of The Prudential, a mutual insurance
company founded in 1875 under the laws of the State of New Jersey. As of
December 31, 1994, The Prudential has invested over $442 million in Pruco Life
in connection with Pruco Life's organization and operation. The Prudential
intends from time to time to make additional capital contributions to Pruco Life
as needed to enable it to meet its reserve requirements and expenses in
connection with its business. The Prudential is under no obligation to make such
contributions and its assets do not back the benefits payable under the
Contract. Pruco Life's consolidated financial statements begin on page B1 and
should be considered only as bearing upon Pruco Life's ability to meet its
obligations under the Contracts.

The Contract is a form of flexible premium variable life insurance. It is built
around a Contract Fund, the amount of which changes every business day. That
amount represents the value of your Contract on that day although you will have
to pay a surrender charge if you decide to surrender the Contract during the
first ten Contract years.

A broad objective of the Contract is to provide benefits that will increase in
value if favorable investment results are achieved. Pruco Life has established a
separate account, like a separate division within the Company, called the Pruco
Life PRUvider Variable Appreciable Account. Whenever you pay a premium, Pruco
Life first deducts certain charges (described below) and, unless you decide
otherwise puts the remainder - often called the "net premium" - into the
Account, where it is combined with the net premiums from all other contracts
like this one. The money in the Account, including your Contract Fund, is then
invested in the following way. The Account is divided into 2 subaccounts and you
must decide which one[s] will hold the assets of your Contract Fund. The money
allocated to each subaccount is immediately invested in a corresponding
portfolio of The Prudential Series Fund, Inc. Those two portfolios -- called the
Conservatively Managed Flexible Portfolio and the Aggressively Managed Flexible
Portfolio -- differ in the amount of risk associated with them and are described
in more detail below.

Because the assets that relate to the Contract may be invested in these variable
investment options, the Contract offers an opportunity for your cash surrender
value to appreciate more rapidly than it would under comparable fixed-benefit
whole-life insurance. You, however, must accept the risk that if investment
performance is unfavorable the cash surrender value may not appreciate as
rapidly and, indeed, may decrease in value. If you prefer to avoid this risk you
may elect to allocate part or all of the net premiums in a fixed-rate option
under which a stated interest rate is credited to the amount of your Contract
Fund allocated to that option. See The Fixed-Rate Option, page 8.

Pruco Life deducts certain charges from each premium payment and from the
amounts held in the designated investment options. In addition, Pruco Life makes
certain additional charges if a Contract lapses or is surrendered during the
first 10 Contract years. All these charges, which are largely designed to cover
insurance costs and risks as well as sales and administrative expenses, are
fully described under Contract Fees and Charges on page 9. In brief, and subject
to that fuller description, the following diagram outlines the charges which may
be made:

<PAGE>

-------------------------------------------------------
Premium Payment
-------------------------------------------------------

---------------------------------------------
o less charge for taxes
attributable to premiums
o less $2 processing fee
---------------------------------------------

- --------------------------------------------------------------------------------
Invested Premium Amount
o To be invested in one or a combination of:
o The Conservatively Managed Flexible Portfolio
o The Aggressively Managed Flexible Portfolio
o The Fixed Rate Option
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Daily Charges
o A daily charge equivalent to an annual rate of up to 0.9% is deducted from
the assets of the subaccounts for mortality and expense risks.
o Management fees and expenses are deducted from the assets of the Series
Fund. See Deductions from Portfolios, page 9.
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Monthly Charges
o A sales charge is deducted from the Contract fund in the amount of 1/2 of
1% of the primary annual premium.
o The Contract fund is reduced by a guaranteed minimum death benefit risk
charge of not more than $0.01 per $1,000 of the face amount of insurance.
o The Contract fund is reduced by an administrative charge of up to $6 per
Contract and up to $0.19 per $1,000 of face amount of insurance (currently,
on a non-guaranteed basis, the $0.19 charge is decreased to $0.09 per
$1,000); if the face amount of the Contract is less than $10,000, there is
an additional charge of $0.30 per $1,000 of face amount.
o A charge for anticipated mortality is deducted, with the maximum charge
based on the non-smoker/smoker 1980 CSO Tables.
o If the Contract includes riders, a deduction from the
Contract fund will be made for charges applicable to those
riders; a deduction will also be made if the rating class of the insured
results in an extra charge.
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Possible Additional Charges
o If the Contract lapses or is surrendered during the first 10 years, a
contingent deferred sales charge is assessed; the maximum contingent
deferred sales charge during the first 5 years is 50% of the first year's
primary annual premium but this charge is both subject to other important
limitations and reduced for Contracts that have been in force for more than
5 years.
o If the Contract lapses or is surrendered during the first 10 years, a
contingent deferred administrative charge is assessed; during the first 5
years, this charge equals $5 per $1,000 of face amount and it begins to
decline uniformly after the fifth Contract year so that it disappears on
the tenth Contract anniversary.
o An administrative processing charge of $15 will be made in
connection with each withdrawal of excess cash surrender
value.
- --------------------------------------------------------------------------------

Because of the charges listed above, and in particular because of the
significant charges deducted upon early surrender or lapse, you should purchase
a Contract only if you intend and have the financial capability to keep it in
force for a substantial period.

When you first buy the Contract you give instructions to Pruco Life as to which
of the two subaccounts (and, therefore, which corresponding portfolios of the
Series Fund) you wish your Contract Fund invested. Thereafter you may make
changes in these allocations either in writing or by telephone. The investment
objectives of the portfolios, described more fully starting on page 19 of this
prospectus, and of the fixed rate option are as follows:

Balanced Portfolios

Conservatively Managed Flexible Portfolio. Achievement of a favorable total
investment return consistent with a portfolio having a conservatively managed
mix of money market instruments, fixed income securities, and common stocks, in
proportions believed by the investment manager to be appropriate for an investor
who desires diversifica-

<PAGE>

tion of investment who prefers a relatively lower risk of loss and a
correspondingly reduced chance of high appreciation.

Aggressively Managed Flexible Portfolio. Achievement of a high total investment
return consistent with a portfolio having an aggressively managed mix of money
market instruments, fixed income securities, and common stocks, in proportions
believed by the investment manager to be appropriate for an investor desiring
diversification of investment who is willing to accept a relatively high level
of loss in an effort to achieve greater appreciation.

Fixed-Rate Option. Guarantee against loss of principal plus income at a rate
which may change at yearly intervals, but will never be lower than an effective
annual rate of 4%.

Transfers Between Investment Options

You may at any time change the instructions for the allocation of your premiums
to the various investment options. You may also transfer amounts held in one
option to another. There are restrictions upon transfers out of the fixed-rate
option which Pruco Life may waive.

The Scheduled Premium

Your Contract sets forth an annual Scheduled Premium, or one that is payable
more frequently, such as monthly. Pruco Life guarantees that, if the Scheduled
Premiums are paid when due (or if missed premiums are paid later, with
interest), the death benefit will be paid upon the death of the insured. The
Contract will not lapse even if investment experience is unexpectedly so
unfavorable that the Contract Fund value drops to below zero.

The amount of the scheduled premium depends on the Contract's face amount, the
insured's sex (except where unisex rates apply) and age at issue, the insured's
risk classification, the rate for taxes attributable to premiums, and the
frequency of premium payments selected. Under certain low face amount Contracts
issued on younger insureds, the payment of the Scheduled Premium may cause the
Contract to be classified as a Modified Endowment Contract. See Tax Treatment of
Contract Benefits, page 17. The scheduled premium will not be increased (except
to reflect changes in the rate for taxes attributable to premiums). See
Premiums, page 11.

Payment of Higher Premiums

The payment of premiums in excess of Scheduled Premiums may cause the Contract
to be classified as a Modified Endowment Contract. If you make premium payments
in amounts high enough to turn the Contract into a Modified Endowment Contract,
Pruco Life will notify you, ask whether it is your intention to do so, and
return the premium, if you wish, with interest. See Premiums, page 11 and Tax
Treatment of Contract Benefits, page 17.

Contract Loans

The Contract permits the owner to borrow up to 90% of the amount of the cash
surrender value (100% of the portion allocated to the fixed-rate option) on
favorable terms. See Contract Loans, page 14. When a loan is made, the amount
held under the investment options described above is reduced, proportionately,
by the amount of the loan.

Differences Between the Contract and Variable Universal Life Insurance Contracts

Pruco Life believes that the most common form of universal life insurance,
offered by many other life insurance companies, is suitable for many people and,
although it does not now offer such a contract to the general public, it may do
so in the future. It believes, however, that there are features in that form of
universal life insurance, particularly in variable universal life insurance,
that enable it too easily to be used in an unsuitable way. Most universal life
insurance contracts also provide for premiums to be paid at irregular intervals
but with a recommended "target premium" to be paid at specified intervals.
Regular payment of the recommended target premiums, however, does not guarantee
- - as is the case with this Contract - that a death benefit will always be paid.
If the target premium is set too low and investment experience for some period
is unfavorable, the Contract Fund can drop to zero and then those contracts will
lapse. Similarly, if a contract owner skips several premium payments during a
period of financial strain, the same thing could happen, even after a contract
has been in force for many years. If that should happen, there will be little
incentive to reinstate the contract and the contract owner will have bought,
unintentionally and unnecessarily, very expensive term insurance. Two purposes
for which permanent insurance is bought - protection against death and savings
for later use - will not have been met.

Pruco Life's PRUvider Variable Appreciable Life Insurance Contract is a form of
life insurance that seeks to eliminate these defects. Although it provides much
of the flexibility of variable universal life, it differs in two important ways.
First, Pruco Life guarantees that if the Scheduled Premiums are paid when due
(or missed premiums are paid later with interest), the Contract will not lapse
and the face amount of insurance will be paid upon the death of the insured even
if, because of unfavorable investment experience, the Contract Fund value should
drop to below zero. Second, if all premiums are not paid when due (or made up),
the Contract will not lapse as long as the Contract Fund is higher than a stated
amount set forth in a table in the Contract - an amount that increases

3
<PAGE>

each year and in later years becomes quite high; it is called the "Tabular
Contract Fund." The Contract lapses when the Contract Fund falls to below this
stated amount, rather than when it drops to zero. Thus, when a PRUvider Variable
Appreciable Life Contract lapses, it may still have considerable value and you
will, therefore, have a substantial incentive to reinstate it, as well as an
opportunity to make a considered decision whether to do so or to take, in one
form or another, the cash surrender value. In effect, Pruco Life provides an
early and timely warning against the imprudent use of the flexibility provided
by the Contract.

In the following pages of this prospectus we describe in much greater detail all
of the provisions of the Contract. That description is preceded by two sets of
tables. The first set provides, in condensed form, financial information about
the portfolios of the Series Fund, beginning on the date each of them was first
established. The second set shows what the cash surrender values and death
benefits would be under a Contract issued on a hypothetical person, making
certain assumptions. These tables show generally how the values under the
Contract would vary, with different investment performances.

FINANCIAL HIGHLIGHTS OF THE PORTFOLIOS OF THE SERIES FUND

The tables that follow provide information about the annual investment income,
capital appreciation and expenses of the 2 available portfolios of the Series
Fund for each year, beginning with the year after the Series Fund was
established. They are prepared on a per share basis and therefore provide useful
information about the investment performance of each portfolio.

NOTE, HOWEVER, THAT THESE TABLES DO NOT TELL YOU HOW YOUR CONTRACT FUND WOULD
HAVE CHANGED DURING THIS PERIOD BECAUSE THEY DO NOT REFLECT THE DEDUCTIONS FROM
THE CONTRACT FUND OTHER THAN THE PORTFOLIO DEDUCTIONS.

4
<PAGE>

THE PRUDENTIAL SERIES FUND, INC. FINANCIAL HIGHLIGHTS

THE PRUDENTIAL SERIES FUND, INC.
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS INDICATED)
The following financial highlights information has been audited by Deloitte &
Touche LLP, Independent Auditors. Their report is included in the Statement of
Additional Information.
<TABLE>
<CAPTION>
AGGRESSIVELY MANAGED FLEXIBLE
-----------------------------------------------------------------------------------------
01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 01/01/89 01/01/88
TO TO TO TO TO TO TO
12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value at beginning of
period........................ $ 16.957 $ 16.005 $ 16.288 $ 13.996 $ 14.446 $ 13.123 $ 12.326
----------- ----------- ----------- ----------- ----------- ----------- -----------
Income From Investment
Operations:
Net investment income........... 0.473 0.566 0.583 0.650 0.715 0.813 0.724
Net realized and unrealized
gains (losses) on
investments................... (1.021) 1.882 0.607 2.809 (0.466) 1.989 0.840
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total from investment
operations.................. (0.548) 2.448 1.190 3.459 0.249 2.802 1.564
----------- ----------- ----------- ----------- ----------- ----------- -----------
Distributions to Shareholders:
Distributions from net
investment income............. (0.451) (0.567) (0.559) (0.654) (0.699) (0.813) (0.767)
Distributions from net realized
gains......................... (0.462) (0.929) (0.914) (0.513) 0 (0.666) 0
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total distributions......... (0.913) (1.496) (1.473) (1.167) (0.699) (1.479) (0.767)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in Net
Asset Value................... (1.461) 0.952 (0.283) 2.292 (0.450) 1.323 0.797
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net Asset Value at end of
period........................ $ 15.496 $ 16.957 $ 16.005 $ 16.288 $ 13.996 $ 14.446 $ 13.123
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total Investment Rate of
Return:**..................... (3.16%) 15.58 % 7.61 % 25.43 % 1.91 % 21.77 % 12.83%
Ratios/Supplemental Data:
Net assets at end of period (in
millions)..................... $3,481.5 $3,292.2 $2,435.6 $1,990.7 $1,507.8 $1,386.5 $1,103.9
Ratio of expenses net of
reimbursement to average net
assets........................ 0.66 % 0.66 % 0.67 % 0.67 % 0.69 % 0.69 % 0.70%
Ratio of net investment income
to average net assets......... 2.90 % 3.30 % 3.63 % 4.23 % 5.13 % 5.66 % 5.52%
Portfolio turnover rate......... 123.63 % 62.99 % 59.03 % 93.13 % 51.87 % 141.04 % 128.45%
Number of shares outstanding at
end of period (in millions)... 224.7 194.1 152.2 122.2 107.7 96.0 84.1

01/01/87 01/01/86 01/01/85
TO TO TO
12/31/87 12/31/86* 12/31/85*
----------- ----------- -----------
<S> <C> <C> <C>
Net Asset Value at beginning of
period........................ $ 13.555 $ 12.810 $ 10.469
----------- ----------- -----------
Income From Investment
Operations:
Net investment income........... 0.577 0.611 0.584
Net realized and unrealized
gains (losses) on
investments................... (0.753) 1.342 2.095
----------- ----------- -----------
Total from investment
operations.................. (0.176) 1.953 2.679
----------- ----------- -----------
Distributions to Shareholders:
Distributions from net
investment income............. (0.673) (0.456) (0.338)
Distributions from net realized
gains......................... (0.380) (0.752) 0
----------- ----------- -----------
Total distributions......... (1.053) (1.208) (0.338)
----------- ----------- -----------
Net increase (decrease) in Net
Asset Value................... (1.229) 0.745 2.341
----------- ----------- -----------
Net Asset Value at end of
period........................ $ 12.326 $ 13.555 $ 12.810
----------- ----------- -----------
----------- ----------- -----------
Total Investment Rate of
Return:**..................... (1.83 %) 15.48 % 25.87 %
Ratios/Supplemental Data:
Net assets at end of period (in
millions)..................... $1,062.4 $593.6 $138.7
Ratio of expenses net of
reimbursement to average net
assets........................ 0.71 % 0.67 % 0.93 %
Ratio of net investment income
to average net assets......... 4.09 % 4.43 % 4.65 %
Portfolio turnover rate......... 123.83 % 133.76 % 56.46 %
Number of shares outstanding at
end of period (in millions)... 86.2 43.8 6.1
</TABLE>
<TABLE>
<CAPTION>
CONSERVATIVELY MANAGED FLEXIBLE
-----------------------------------------------------------------------------------------
01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 01/01/89 01/01/88
TO TO TO TO TO TO TO
12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value at beginning of
period........................ $ 14.905 $ 14.243 $ 14.318 $ 13.060 $ 13.361 $ 12.295 $ 11.889
----------- ----------- ----------- ----------- ----------- ----------- -----------
Income From Investment
Operations:
Net investment income........... 0.528 0.486 0.558 0.687 0.821 0.891 0.773
Net realized and unrealized
gains (losses) on
investments................... (0.679) 1.229 0.410 1.738 (0.143) 1.155 0.424
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total from investment
operations.................. (0.151) 1.715 0.968 2.425 0.678 2.046 1.197
----------- ----------- ----------- ----------- ----------- ----------- -----------
Distributions to Shareholders:
Distributions from net
investment income............. (0.505) (0.468) (0.533) (0.668) (0.812) (0.887) (0.791)
Distributions from net realized
gains......................... (0.154) (0.585) (0.510) (0.499) (0.167) (0.093) 0
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total distributions......... (0.659) (1.053) (1.043) (1.167) (0.979) (0.980) (0.791)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in Net
Asset Value................... (0.810) 0.662 (0.075) 1.258 (0.301) 1.066 0.406
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net Asset Value at end of
period........................ $ 14.095 $ 14.905 $ 14.243 $ 14.318 $ 13.060 $ 13.361 $ 12.295
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total Investment Rate of
Return:**..................... (0.97%) 12.20% 6.95% 19.07% 5.27% 16.99% 10.19%
Ratios/Supplemental Data:
Net assets at end of period (in
millions)..................... $3,501.1 $3,103.2 $2,114.0 $1,500.0 $1,100.2 $976.0 $815.6
Ratio of expenses net of
reimbursement to average net
assets........................ 0.61% 0.60% 0.62% 0.63% 0.65% 0.64% 0.65%
Ratio of net investment income
to average net assets......... 3.61% 3.22% 3.88% 4.89% 6.21% 6.81% 6.22%
Portfolio turnover rate......... 125.18% 79.46% 62.07% 115.35% 44.04% 153.92% 110.67%
Number of shares outstanding at
end of period (in millions)... 248.4 208.2 148.4 104.8 84.2 73.0 66.3

All calculations are based on average month-end shares outstanding, where
applicable.

*The per share information of the Portfolios of The Prudential Series Fund,
Inc. has not been restated to reflect the operations of the Pruco Life Series
Fund, Inc. prior to the November 1, 1986 merger.

**Total investment returns are at the portfolio level and exclude contract
specific charges which would reduce returns.
This information should be read in conjunction with the financial statements
of The Prudential Series Fund, Inc. and notes thereto, which appear in the
Statement of Additional Information.
Further information about the performance of the portfolios is contained in
the Annual Report to Contract Owners which may be obtained without charge.

<PAGE>

PORTFOLIO RATES OF RETURN

The following table, based upon the immediately preceding condensed financial
information for the Series Fund, shows first the average annual compounded net
rates of return for each Portfolio for the year ended 12/31/94 for the 5 year
period ending on that date, and from the inception date of each Portfolio to
December 31, 1994. Then, the annual net rates of return for each Portfolio for
each year are shown. These rates of return should not be regarded as an estimate
or prediction of future performance. They may be useful in assessing the
competence and performance of the Series Fund's investment advisor and in
helping you to decide which portfolios to choose. AS STATED ABOVE, THIS
INFORMATION RELATES ONLY TO THE SERIES FUND AND DOES NOT REFLECT THE VARIOUS
OTHER CHARGES MADE UNDER THE CONTRACTS SUCH AS SALES AND ADMINISTRATIVE CHARGES
AND COST OF INSURANCE CHARGES. SEE CONTRACT FEES AND CHARGES, PAGE 9.
<TABLE>
<CAPTION>
5 YEAR 10 YEAR
PERIOD PERIOD INCEPTION
INCEPTION YEAR ENDED ENDED ENDED DATE TO YEAR ENDED YEAR ENDED YEAR ENDED
DATE 12/31/94 12/31/94 12/31/94 12/31/94 12/31/94 12/31/93 12/31/92
<S> <C> <C> <C> <C> <C> <C> <C> <C>
----------- ----------- ----------- ----------- ------------- ----------- ----------- -----------

AGGRESSIVELY
MANAGED FLEXIBLE 5/83 -3.2% 9.0% 11.7% 10.6% -3.2% 15.6% 7.6%

CONSERVATIVELY
MANAGED FLEXIBLE 5/83 -1.0% 8.3% 10.4% 9.9% -1.0% 12.2% 6.9%

YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
12/31/91 12/31/90 12/31/89 12/31/88 12/31/87 12/31/86 12/31/85
<S> <C> <C> <C> <C> <C> <C> <C>
----------- ----------- ----------- ----------- ----------- ----------- -----------
AGGRESSIVELY
MANAGED FLEXIBLE 25.4% 1.9% 21.8% 12.8% -1.8% 15.5% 25.9%
CONSERVATIVELY
MANAGED FLEXIBLE 19.1% 5.3% 17.0% 10.2% 1.5% 14.2% 21.1%
</TABLE>

<PAGE>

Illustrations of Cash Surrender Values, Death Benefits
and Accumulated Premiums

The following tables have been prepared to help show how values under the
Contract change with investment performance of the Account. The tables assume
that no portion of the Contract fund is allocated to the fixed-rate option. The
tables illustrate how cash surrender values (reflecting the deduction of
deferred sales load and administrative charges, if any) and death benefits of
Contracts issued on an insured of a given age would vary over time if the gross
investment return on the assets held in the selected Series Fund portfolios were
a uniform, after tax, annual rate of 0%, 4%, 8%, and 12% and minimum scheduled
premiums were paid. The death benefits and cash surrender values would be
different from those shown if the returns averaged 0%, 4%, 8%, and 12% but
fluctuated over and under those averages throughout the years.

The death benefits and cash surrender values shown in the first two tables on
pages T1 and T2 reflect Pruco Life's current charges. The values shown in these
tables are calculated upon the assumption that Pruco Life will continue to use
the administrative charges and mortality rates that it is currently using, even
though it is permitted under the Contract to use higher administrative charges
and the higher mortality charges specified in the 1980 CSO Table. While Pruco
Life does not currently intend to withdraw or modify these reductions in
charges, it reserves the right to do so.

The death benefits and cash surrender values shown in the next two tables on
pages T3 and T4 are calculated upon the assumption that the maximum
administrative charges allowable under the Contract and the maximum mortality
charges specified by the 1980 CSO Table are made throughout the life of the
Contract; they do not reflect Pruco Life's current practice of reducing the
administrative and mortality charges.

The amounts shown for the death benefit and cash surrender value as of each
Contract year reflect the fact that the net investment return on the assets held
in the subaccounts is lower than the gross, after-tax return of the Series
Fund's portfolios. This is because these tables assume an investment management
fee and other estimated Series Fund expenses totaling 0.64%. The 0.64% figure is
based on an average of the current management fees of the two available
portfolios and an analysis of historical operating expenses other than
management fees, taking into account any applicable expense offsets. Actual fees
and expenses of the portfolios associated with a Contract may be more or less
than 0.64%, will vary from year to year, and will depend on how the Contract
fund is allocated. Based on the above assumptions, gross annual rates of return
of 0%, 4%, 8%, and 12% correspond in the tables to approximate net annual rates
of return of - 1.54%, 2.46%, 6.46%, and 10.46%, respectively. The tables reflect
the fact that no charges for federal or state income taxes are currently made
against the Account (other than "taxes attributable to premiums"). If such a
charge is made in the future, it will take higher gross rates of return to
produce the same net after-tax returns. The tables assume that the insured is in
the preferred rating class, and the charge for federal, state and local taxes
attributable to premiums is 3.25%.

Upon request, Pruco Life will furnish a comparable hypothetical illustration
based on the proposed insured's age and sex (except where unisex rates apply)
and on the face amount or premium amount requested. The illustrations can be
prepared upon the assumptions that the insured is in the preferred or standard
rating class or in a different risk classification, and can assume that annual,
semi-annual, quarterly or monthly premiums are paid.

7
<PAGE>

ILLUSTRATIONS
-------------

THE PRUVIDER VARIABLE APPRECIABLE LIFE INSURANCE CONTRACT
MALE PREFERRED ISSUE AGE 35
$5,000 GUARANTEED DEATH BENEFIT
$173.70 ANNUAL PREMIUM (1)
USING CURRENT CONTRACTUAL CHARGES

Death Benefit (2) Cash Surrender Value (2)
---------------------------------------------------- ---------------------------------------------------
Assuming Hypothetical Gross (and Net) Assuming Hypothetical Gross (and Net)
Premiums Annual Investment Return of Annual Investment Return of
End of Accumulated ---------------------------------------------------- ---------------------------------------------------
Policy at 4% Interest 0% Gross 4% Gross 8% Gross 12% Gross 0% Gross 4% Gross 8% Gross 12% Gross
Year Per Year (-1.54% Net) (2.46% Net) (6.46% Net) (10.46% Net) (-1.54% Net) (2.46% Net) (6.46% Net) (10.46% Net)
------ ------------- ------------ ----------- ----------- ------------ ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 181 $ 5,003 $ 5,007 $ 5,011 $ 5,016 $ 0 $ 0 $ 1 $ 6
2 $ 369 $ 5,002 $ 5,013 $ 5,024 $ 5,036 $ 48 $ 58 $ 70 $ 82
3 $ 564 $ 5,000 $ 5,019 $ 5,040 $ 5,063 $ 101 $ 121 $ 142 $ 165
4 $ 767 $ 5,000 $ 5,024 $ 5,058 $ 5,095 $ 153 $ 184 $ 219 $ 256
5 $ 978 $ 5,000 $ 5,028 $ 5,078 $ 5,135 $ 204 $ 249 $ 300 $ 356
6 $ 1,198 $ 5,000 $ 5,033 $ 5,104 $ 5,186 $ 268 $ 329 $ 400 $ 482
7 $ 1,427 $ 5,000 $ 5,037 $ 5,133 $ 5,246 $ 330 $ 410 $ 505 $ 619
8 $ 1,665 $ 5,000 $ 5,042 $ 5,166 $ 5,318 $ 391 $ 492 $ 617 $ 768
9 $ 1,912 $ 5,000 $ 5,045 $ 5,203 $ 5,402 $ 451 $ 576 $ 734 $ 932
10 $ 2,169 $ 5,000 $ 5,048 $ 5,245 $ 5,499 $ 510 $ 661 $ 858 $ 1,112
15 $ 3,617 $ 5,000 $ 5,053 $ 5,536 $ 6,260 $ 717 $ 1,042 $ 1,525 $ 2,248
20 $ 5,379 $ 5,000 $ 5,039 $ 6,011 $ 9,057 $ 877 $ 1,448 $ 2,421 $ 4,095
25 $ 7,523 $ 5,000 $ 5,001 $ 6,926 $13,437 $ 962 $ 1,867 $ 3,613 $ 7,010
30 (Age 65) $10,132 $ 5,000 $ 5,000 $ 8,661 $19,408 $ 929 $ 2,280 $ 5,151 $11,541
35 $13,305 $ 5,000 $ 5,000 $10,596 $27,634 $ 686 $ 2,660 $ 7,075 $18,449
40 $17,166 $ 5,000 $ 5,000 $12,799 $39,087 $ 34 $ 2,960 $ 9,431 $28,804
45 $21,864 $ 5,000 $ 5,000 $15,368 $55,245 $ 0 $ 3,082 $12,256 $44,057

</TABLE>

(1) If premiums are paid more frequently than annually, the payments would
be $89.46 semi-annually, $46.15 quarterly or $16.90 monthly. The death
benefits and cash surrender values would be slightly different for a
Contract with more frequent premium payments.

(2) Assumes no Contract loan has been made.

THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE
IN THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A
REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL
RATES OF RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND
ON A NUMBER OF FACTORS INCLUDING THE INVESTMENT ALLOCATIONS MADE BY AN
OWNER, PREVAILING INTEREST RATES, AND RATES OF INFLATION. THE DEATH
BENEFIT AND CASH SURRENDER VALUE FOR A CONTRACT WOULD BE DIFFERENT
FROM THOSE SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED 0%, 4%, 8%,
AND 12% OVER A PERIOD OF YEARS BUT ALSO FLUCTUATED ABOVE OR BELOW
THOSE AVERAGES FOR INDIVIDUAL CONTRACT YEARS. NO REPRESENTATIONS CAN
BE MADE BY PRUCO LIFE OR THE SERIES FUND THAT THESE HYPOTHETICAL RATES
OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY
PERIOD OF TIME.

<PAGE>

THE PRUVIDER VARIABLE APPRECIABLE LIFE INSURANCE CONTRACT
MALE PREFERRED ISSUE AGE 35
$20,000 GUARANTEED DEATH BENEFIT
$390.90 ANNUAL PREMIUM (1)
USING CURRENT CONTRACTUAL CHARGES

Death Benefit (2) Cash Surrender Value (2)
---------------------------------------------------- ---------------------------------------------------
Assuming Hypothetical Gross (and Net) Assuming Hypothetical Gross (and Net)
Premiums Annual Investment Return of Annual Investment Return of
End of Accumulated ---------------------------------------------------- ---------------------------------------------------
Policy at 4% Interest 0% Gross 4% Gross 8% Gross 12% Gross 0% Gross 4% Gross 8% Gross 12% Gross
Year Per Year (-1.54% Net) (2.46% Net) (6.46% Net) (10.46% Net) (-1.54% Net) (2.46% Net) (6.46% Net) (10.46% Net)
------ ------------- ------------ ----------- ----------- ------------ ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 407 $20,012 $20,024 $20,036 $ 20,048 $ 38 $ 50 $ 62 $ 74
2 $ 829 $20,013 $20,046 $20,080 $ 20,115 $ 242 $ 275 $ 309 $ 345
3 $ 1,269 $20,001 $20,065 $20,132 $ 20,203 $ 441 $ 505 $ 572 $ 643
4 $ 1,726 $20,000 $20,081 $20,193 $ 20,315 $ 635 $ 738 $ 851 $ 973
5 $ 2,202 $20,000 $20,093 $20,264 $ 20,454 $ 831 $ 984 $ 1,154 $ 1,345
6 $ 2,697 $20,000 $20,110 $20,353 $ 20,633 $ 1,081 $ 1,293 $ 1,537 $ 1,816
7 $ 3,211 $20,000 $20,124 $20,456 $ 20,847 $ 1,332 $ 1,613 $ 1,946 $ 2,337
8 $ 3,746 $20,000 $20,136 $20,573 $ 21,103 $ 1,578 $ 1,939 $ 2,376 $ 2,907
9 $ 4,302 $20,000 $20,145 $20,707 $ 21,406 $ 1,819 $ 2,269 $ 2,831 $ 3,530
10 $ 4,881 $20,000 $20,152 $20,857 $ 21,760 $ 2,054 $ 2,604 $ 3,309 $ 4,212
15 $ 8,140 $20,000 $20,146 $21,922 $ 24,549 $ 2,888 $ 4,100 $ 5,876 $ 8,504
20 $12,106 $20,000 $20,057 $23,679 $ 34,279 $ 3,528 $ 5,695 $ 9,317 $ 15,497
25 $16,931 $20,000 $20,000 $26,641 $ 50,898 $ 3,870 $ 7,333 $13,899 $ 26,553
30 (Age 65) $22,801 $20,000 $20,000 $33,351 $ 73,548 $ 3,734 $ 8,939 $19,833 $ 43,738
35 $29,942 $20,000 $20,000 $40,833 $104,757 $ 2,747 $10,366 $27,261 $ 69,940
40 $38,631 $20,000 $20,000 $49,349 $148,208 $ 113 $11,386 $36,366 $109,216
45 $49,203 $20,000 $20,000 $59,285 $209,506 $ 0 $11,501 $47,278 $167,075

</TABLE>

(1) If premiums are paid more frequently than annually, the payments would
be $202.79 semi-annually, $103.98 quarterly or $36.59 monthly. The
death benefits and cash surrender values would be slightly different
for a Contract with more frequent premium payments.

(2) Assumes no Contract loan has been made.

<PAGE>

THE PRUVIDER VARIABLE APPRECIABLE LIFE INSURANCE CONTRACT
MALE PREFERRED ISSUE AGE 35
$5,000 GUARANTEED DEATH BENEFIT
$173.70 ANNUAL PREMIUM (1)
USING MAXIMUM CONTRACTUAL CHARGES

Death Benefit (2) Cash Surrender Value (2)
---------------------------------------------------- ---------------------------------------------------
Assuming Hypothetical Gross (and Net) Assuming Hypothetical Gross (and Net)
Premiums Annual Investment Return of Annual Investment Return of
End of Accumulated ---------------------------------------------------- ---------------------------------------------------
Policy at 4% Interest 0% Gross 4% Gross 8% Gross 12% Gross 0% Gross 4% Gross 8% Gross 12% Gross
Year Per Year (-1.54% Net) (2.46% Net) (6.46% Net) (10.46% Net) (-1.54% Net) (2.46% Net) (6.46% Net) (10.46% Net)
------ ------------- ------------ ----------- ----------- ------------ ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 181 $ 5,000 $ 5,000 $ 5,004 $ 5,009 $ 0 $ 0 $ 0 $ 0
2 $ 369 $ 5,000 $ 5,000 $ 5,010 $ 5,021 $ 35 $ 45 $ 56 $ 67
3 $ 564 $ 5,000 $ 5,000 $ 5,018 $ 5,039 $ 82 $ 100 $ 120 $ 141
4 $ 767 $ 5,000 $ 5,000 $ 5,028 $ 5,063 $ 127 $ 157 $ 188 $ 223
5 $ 978 $ 5,000 $ 5,000 $ 5,039 $ 5,092 $ 172 $ 213 $ 260 $ 313
6 $ 1,198 $ 5,000 $ 5,000 $ 5,053 $ 5,129 $ 228 $ 284 $ 349 $ 424
7 $ 1,427 $ 5,000 $ 5,000 $ 5,069 $ 5,173 $ 282 $ 355 $ 442 $ 545
8 $ 1,665 $ 5,000 $ 5,000 $ 5,088 $ 5,226 $ 335 $ 427 $ 539 $ 677
9 $ 1,912 $ 5,000 $ 5,000 $ 5,110 $ 5,289 $ 387 $ 499 $ 641 $ 820
10 $ 2,169 $ 5,000 $ 5,000 $ 5,135 $ 5,362 $ 437 $ 572 $ 748 $ 975
15 $ 3,617 $ 5,000 $ 5,000 $ 5,314 $ 5,944 $ 600 $ 883 $ 1,302 $ 1,932
20 $ 5,379 $ 5,000 $ 5,000 $ 5,614 $ 7,650 $ 709 $ 1,197 $ 2,023 $ 3,459
25 $ 7,523 $ 5,000 $ 5,000 $ 6,084 $11,146 $ 735 $ 1,490 $ 2,950 $ 5,815
30 (Age 65) $10,132 $ 5,000 $ 5,000 $ 6,949 $15,771 $ 627 $ 1,724 $ 4,132 $ 9,379
35 $13,305 $ 5,000 $ 5,000 $ 8,350 $21,951 $ 274 $ 1,821 $ 5,575 $14,656
40 $17,166 $ 5,000 $ 5,000 $ 9,876 $30,276 $ 0 $ 1,621 $ 7,278 $22,311
45 $21,864 $ 5,000 $ 5,000 $11,567 $41,579 $ 0 $ 678 $ 9,224 $33,158

</TABLE>

(2) Assumes no Contract loan has been made.

<PAGE>

THE PRUVIDER VARIABLE APPRECIABLE LIFE INSURANCE CONTRACT
MALE PREFERRED ISSUE AGE 35
$20,000 GUARANTEED DEATH BENEFIT
$390.90 ANNUAL PREMIUM (1)
USING MAXIMUM CONTRACTUAL CHARGES

Death Benefit (2) Cash Surrender Value (2)
---------------------------------------------------- ---------------------------------------------------
Assuming Hypothetical Gross (and Net) Assuming Hypothetical Gross (and Net)
Premiums Annual Investment Return of Annual Investment Return of
End of Accumulated ---------------------------------------------------- ---------------------------------------------------
Policy at 4% Interest 0% Gross 4% Gross 8% Gross 12% Gross 0% Gross 4% Gross 8% Gross 12% Gross
Year Per Year (-1.54% Net) (2.46% Net) (6.46% Net) (10.46% Net) (-1.54% Net) (2.46% Net) (6.46% Net) (10.46% Net)
------ ------------- ------------ ----------- ----------- ------------ ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 407 $20,000 $20,000 $20,009 $ 20,020 $ 12 $ 23 $ 35 $ 46
2 $ 829 $20,000 $20,000 $20,023 $ 20,056 $ 190 $ 221 $ 253 $ 286
3 $ 1,269 $20,000 $20,000 $20,044 $ 20,110 $ 363 $ 422 $ 484 $ 550
4 $ 1,726 $20,000 $20,000 $20,072 $ 20,185 $ 532 $ 626 $ 730 $ 842
5 $ 2,202 $20,000 $20,000 $20,108 $ 20,282 $ 703 $ 842 $ 998 $ 1,172
6 $ 2,697 $20,000 $20,000 $20,151 $ 20,404 $ 923 $ 1,114 $ 1,335 $ 1,588
7 $ 3,211 $20,000 $20,000 $20,204 $ 20,556 $ 1,142 $ 1,395 $ 1,693 $ 2,045
8 $ 3,746 $20,000 $20,000 $20,266 $ 20,740 $ 1,356 $ 1,678 $ 2,069 $ 2,543
9 $ 4,302 $20,000 $20,000 $20,339 $ 20,960 $ 1,564 $ 1,964 $ 2,462 $ 3,084
10 $ 4,881 $20,000 $20,000 $20,423 $ 21,220 $ 1,766 $ 2,253 $ 2,875 $ 3,672
15 $ 8,140 $20,000 $20,000 $21,047 $ 23,311 $ 2,422 $ 3,471 $ 5,001 $ 7,266
20 $12,106 $20,000 $20,000 $22,120 $ 28,759 $ 2,863 $ 4,695 $ 7,758 $ 13,001
25 $16,931 $20,000 $20,000 $23,831 $ 41,954 $ 2,969 $ 5,824 $11,293 $ 21,888
30 (Age 65) $22,801 $20,000 $20,000 $26,578 $ 59,408 $ 2,533 $ 6,695 $15,806 $ 35,329
35 $29,942 $20,000 $20,000 $31,980 $ 82,730 $ 1,113 $ 6,983 $21,351 $ 55,234
40 $38,631 $20,000 $20,000 $37,865 $114,143 $ 0 $ 5,993 $27,903 $ 84,113
45 $49,203 $20,000 $20,000 $44,385 $156,794 $ 0 $ 1,813 $35,395 $125,039

</TABLE>

(2) Assumes no Contract loan has been made.

<PAGE>

GENERAL INFORMATION ABOUT
PRUCO LIFE PRUVIDER VARIABLE APPRECIABLE ACCOUNT AND THE
FIXED RATE OPTION

Pruco Life PRUvider Variable Appreciable Account. Pruco Life PRUvider Variable
Appreciable Account was established on July 10, 1992 under Arizona law as a
separate investment account. The Account meets the definition of a "separate
account" under the federal securities laws. The Account holds assets that are
segregated from all of Pruco Life's other assets.

The obligations to Contract owners and beneficiaries arising under the Contract
are general corporate obligations of Pruco Life. Pruco Life is also the legal
owner of the assets in the Account. Pruco Life will at all times maintain assets
in the Account with a total market value at least equal to the reserve and other
liabilities relating to the variable benefits attributable to the Account. These
assets may not be charged with liabilities which arise from any other business
Pruco Life conducts. In addition to these assets, the Account's assets may
include funds contributed by Pruco Life to commence operation of the Account and
may include accumulations of the charges Pruco Life makes against the Account.
From time to time these additional assets will be transferred to Pruco Life's
general account. Before making any such transfer, Pruco Life will consider any
possible adverse impact the transfer might have on the Account.

The Account is registered with the Securities and Exchange Commission ("SEC")
under the Investment Company Act of 1940 ("1940 Act") as a unit investment
trust, which is a type of investment company. This does not involve any
supervision by the SEC of the management or investment policies or practices of
the Account. For state law purposes, the Account is treated as a part or
division of Pruco Life. There are currently two subaccounts within the Account,
one of which invests in the Conservatively Managed Flexible Portfolio and the
other of which invests in the Aggressively Managed Flexible Portfolio of the
Series Fund. Additional subaccounts may be added in the future. The Account's
financial statements begin on page A1.

The Fixed-Rate Option. Because of exemptive and exclusionary provisions,
interests in the fixed-rate option under the Contract have not been registered
under the Securities Act of 1933 and the general account has not been registered
as an investment company under the Investment Company Act of 1940. Accordingly,
interests in the fixed-rate option are not subject to the provisions of these
Acts, and Pruco Life has been advised that the staff of the Securities and
Exchange Commission has not reviewed the disclosure in this Prospectus relating
to the fixed-rate option. Any inaccurate or misleading disclosure regarding the
fixed-rate option may, however, subject Pruco Life and its directors to civil
liability if that results in any damage.

As explained earlier, you may elect to allocate, either initially or by
transfer, all or part of the amount credited under the Contract to the
fixed-rate option, and the amount so allocated or transferred becomes part of
The Pruco Life's general assets. Sometimes this is referred to as Pruco Life's
general account, which consists of all assets owned by Pruco Life other than
those in the Account and in other separate accounts that have been or may be
established by Pruco Life. Subject to applicable law, Pruco Life has sole
discretion over the investment of the assets of the general account, and
Contract owners do not share in the investment experience of those assets.
Instead, Pruco Life guarantees that the part of the Contract Fund allocated to
the fixed-rate option will accrue interest daily at an effective annual rate
that Pruco Life declares periodically. This rate may not be less than an
effective annual rate of 4%. Currently, declared interest rates remain in effect
from the date money is allocated to the fixed-rate option until the Monthly date
in the same month in the following year. See Contract Date, page 11. Thereafter,
a new crediting rate will be declared each year and will remain in effect for
the calendar year. Pruco Life reserves the right to change this practice. Pruco
Life is not obligated to credit interest at a higher rate than 4%, although in
its sole discretion it may do so. Different crediting rates may be declared for
different portions of the Contract Fund allocated to the fixed-rate option. At
least annually and on request, a Contract owner will be advised of the interest
rates that currently apply to his or her Contract.

Transfers from the fixed-rate option are subject to strict limits. (See
Transfers, page 13). The payment of any cash surrender value attributable to the
fixed-rate option may be delayed up to 6 months (see When Proceeds Are Paid,
page 16).

DETAILED INFORMATION FOR PROSPECTIVE CONTRACT OWNERS

Requirements for Issuance of a Contract. Generally, the minimum initial
guaranteed death benefit that can be applied for is $5,000 and the maximum that
can be applied for is $25,000. The Contract may generally be issued on insureds
below the age of 76. Before issuing any Contract, Pruco Life requires evidence
of insurability which may include a medical examination. Non-smokers who meet
preferred underwriting requirements are offered the most favorable premium rate.
A higher premium is charged if an extra mortality risk is involved. These are
the

8
<PAGE>

current underwriting requirements. The Company reserves the right to change
these requirements on a non-discriminatory basis.

Short-Term Cancellation Right or "Free Look". Generally, you may return the
Contract for a refund within 10 days after you receive it, within 45 days after
Part I of the application for insurance is signed, or within 10 days after Pruco
Life mails or delivers a Notice of Withdrawal Right, whichever is latest. Some
states allow a longer period of time during which a Contract may be returned for
a refund. A refund can be requested by mailing or delivering the Contract to the
representative who sold it or to the Home Office specified in the Contract. A
Contract returned according to this provision shall be deemed void from the
beginning. You will then receive a refund of all premium payments made, plus or
minus any change due to investment experience in the value of the invested
portion of the premiums, calculated as if no charges had been made against the
Account or the Series Fund. However, if applicable law so requires, if you
exercise your short-term cancellation right, you will receive a refund of all
premium payments made, with no adjustment for investment experience.

Contract Fees and Charges. This section provides a detailed description of each
charge that is described briefly in the chart on page 1, and an explanation of
the purpose of the charge.

In several instances we will use the terms "maximum charge" and "current
charge." The "maximum charge," in each instance, will be the highest charge that
Pruco Life is entitled to make under the Contract. The "current charge" is the
lower amount that Pruco Life is now charging and which it intends to charge for
the indefinite future. However, if circumstances change, Pruco Life reserves the
right to increase each current charge, up to but to no more than the maximum
charge, without giving any advance notice.

A Contract owner may add several "riders" to the Contract which provide
additional benefits, which are charged for separately. The statement and
description of charges that follows assumes there are no riders to the Contract.

Deductions from Premiums

(a) A charge for taxes attributable to premiums is deducted from each premium.
That charge is currently made up of two parts. The first part is in an amount
equal to the state or local premium tax. It varies from jurisdiction to
jurisdiction and generally ranges from 0.75% to 5% of the premium received by
Pruco Life. The second part is for federal income taxes measured by premiums and
it is equal to 1.25% of the premium. Pruco Life believes that this charge is a
reasonable estimate of an increase in its federal income taxes resulting from a
1990 change in the Internal Revenue Code. It is intended to recover this
increased tax. During 1994 and 1993, Pruco Life received a total of
approximately $2,412,598 and $1,477,242, respectively, in taxes attributable to
premiums.

(b) A charge of $2 is deducted from each premium payment to cover the cost of
collecting and processing premiums. Thus, if you pay premiums annually, this
charge will be $2 per year. If you pay premiums monthly, the charge will be $24
per year. During 1994 and 1993, Pruco Life received a total of approximately
$753,128 and $294,890, respectively, in processing charges.

Deductions from Portfolios

(a) An investment advisory fee is deducted daily from each portfolio at an
annual rate of 0.55% for the Conservatively Managed Flexible Portfolio and 0.6%
for the Aggressively Managed Flexible Portfolio.

(b) The expenses incurred in conducting the investment operations of the
portfolios (such as investment advisory fees, custodian fees and preparation and
distribution of annual reports) are paid out of the portfolio's income. These
expenses also vary from portfolio to portfolio. The total expenses of each
portfolio for the year 1994 expressed as a percentage of the average assets
during the year are shown below:

---------------------------------------------------------------------
Other Total
Portfolio Advisory Fee Expenses Expenses
---------------------------------------------------------------------
Conservatively Managed Flexible 0.55% 0.06% 0.61%
Aggressively Managed Flexible 0.60% 0.06% 0.66%
---------------------------------------------------------------------

For the years 1994, 1993, and 1992, The Prudential received a total of
$66,413,206, $51,197,499, and $35,661,075, respectively, in investment
management fees for all of the Series Fund's portfolios.

Monthly Deductions from Contract Fund

The following monthly charges are deducted proportionately from the dollar
amounts held in each of the chosen investment option[s].

(a) A sales charge, often called a sales load, is deducted to pay part of the
costs Pruco Life incurs in selling the Contracts, including commissions,
advertising and the printing and distribution of prospectuses and sales
literature.

9
<PAGE>

The charge is equal to 0.5% of the "primary annual premium" which is equal to
the Scheduled Premium that would be payable if premiums were being paid
annually, less the two deductions from premiums (taxes attributable to premiums
and the $2 processing charge), and less the $6 part of the monthly deduction
described in (c) below, the $0.30 per $1,000 of face amount for Contracts with a
face amount of less than $10,000, and any extra premiums for riders or
substandard risks. The deduction is made whether the Contract owner is paying
premiums annually or more frequently. It is lower on Contracts issued on
insureds over 60 years of age. To summarize, this charge is somewhat less than
(significantly less for Contracts with small face amounts) 6% of the annual
Scheduled Premium.

There is a second sales load, which will be charged only if a Contract lapses or
is surrendered before the end of the 10th Contract year. It is often described
as a contingent deferred sales load ("CDSL") and is described later under
Surrender or Withdrawal Charges. During 1994 and 1993, Pruco Life received a
total of approximately $1,785,222 and $514,394, respectively, in sales load
charges.

(b) A charge of not more than $0.01 per $1000 of face amount of insurance is
made to compensate Pruco Life for the risk it assumes by guaranteeing that, no
matter how unfavorable investment experience may be, the death benefit will
never be less than the guaranteed minimum death benefit so long as Scheduled
Premiums are paid on or before the due date or during the grace period. This
charge will not be made if the Contract has been continued in force pursuant to
an option on lapse. During 1994 and 1993, Pruco Life received a total of
approximately $92,140 and $33,545, respectively, for this risk charge.

(c) An administrative charge of $6 plus up to $0.19 per $1,000 per month of face
amount of insurance is deducted each month. Currently, on a non- guaranteed
basis, this charge is reduced from $0.19 to $0.09 per $1,000. The charge is
intended to pay for processing claims, keeping records, and communicating with
Contract owners. If premiums are paid by automatic transfer under the Pru-Matic
Plan, as described on page 11, the current charge is further reduced to $0.07
per $1,000 of face amount. There is an additional charge of $0.30 per $1,000 of
face amount if the face amount of the Contract is less than $10,000. This
monthly administrative charge will not be made if the Contract has been
continued in force pursuant to an option on lapse. During 1994 and 1993, Pruco
Life received a total of approximately $5,161,744 and $1,853,895, respectively,
in monthly administrative charges.

(d) A mortality charge is deducted that is intended to be used to pay death
benefits. When an insured dies, the amount payable to the beneficiary is larger
than the Contract Fund and significantly larger if the insured dies in the early
years of a Contract. The mortality charges collected from all Contract owners
enables Pruco Life to pay the death benefit for the few insureds who die. The
maximum mortality charge is determined by multiplying the "net amount at risk"
under a Contract (the amount by which the Contract's death benefit, computed as
if there were neither riders nor Contract debt, exceeds the Contract Fund) by a
rate based upon the insured's current attained age and sex (except where unisex
rates apply) and the anticipated mortality for that class of persons. The
anticipated mortality is based upon mortality tables published by The National
Association of Insurance Commissioners called the Non-Smoker/Smoker 1980 CSO
Tables. Pruco Life may determine that a lesser amount than that called for by
these mortality tables will be adequate for insureds of particular ages and may
thus make a lower mortality charge for such persons. Any lower current mortality
charges are not applicable to Contracts in force pursuant to an option on lapse.
See Lapse and Reinstatement, page 14.

(e) If the Contract includes riders, Pruco Life deducts any charges applicable
to those riders from the Contract fund on each Monthly date. In addition, Pruco
Life will deduct on each Monthly date any extra charge incurred because of the
rating class of the insured.

(f) A charge may be deducted to cover federal, state or local taxes (other than
"taxes attributable to premiums" described above) that are imposed upon the
operations of the Account. At present no such taxes are imposed and no charge is
made.

Daily Deduction from the Contract Fund

Each day a charge is deducted from the assets of each of the subaccounts in an
amount equivalent to an effective annual rate of up to 0.9%. This charge is
intended to compensate Pruco Life for assuming mortality and expense risks under
the Contract. The mortality risk assumed is that insureds may live for shorter
periods of time than Pruco Life estimated when it determined what mortality
charge to make. The expense risk assumed is that expenses incurred in issuing
and administering the Contract will be greater than Pruco Life estimated in
fixing its administrative charges. Pruco Life will realize a profit from this
risk charge to the extent it is not needed to provide benefits and pay expenses
under the Contracts. This charge is not assessed against amounts allocated to
the fixed-rate option. During 1994 and 1993, Pruco Life received a total of
approximately $576,113 and $133,775, respectively, in mortality and expense risk
charges.

10
<PAGE>

Surrender or Withdrawal Charges

(a) An additional sales load (the CDSL) is charged if a Contract is surrendered
for its cash surrender value or lapses during the first 10 Contract years. It is
not deducted from the death benefit if the insured should die during this
period. This maximum contingent deferred charge is equal to 50% of the first
year's primary annual premium upon Contracts that lapse during the first 5
Contract years. That percentage is reduced uniformly on a daily basis starting
from the Contract's fifth anniversary until it disappears on the tenth
anniversary. Other important limitations apply. They are described more fully in
the Statement of Additional Information. The amount of this charge can be more
easily understood by reference to the following table which shows the sales
loads that would be paid by a 35 year old man with $20,000 face amount of
insurance, both through the monthly deductions from the Contract Fund described
above and upon the surrender of the Contract.

- --------------------------------------------------------------------------------
Cumulative Cumulative
Sales Load Total Sales
Cumulative Deducted Load as Per-
Surrender Scheduled from Contingent centage of
Last Day of Premiums Contract Deferred Total Sales Scheduled
Year No. Paid Fund Sales Load Load Premiums Paid
- --------------------------------------------------------------------------------
1 $ 390.90 $ 18.24 $ 87.22 $105.46 26.98%
2 781.80 36.48 104.16 140.64 17.99%
3 1,172.70 54.72 121.10 175.82 14.99%
4 1,563.60 72.96 138.04 211.00 13.49%
5 1,954.50 91.20 146.55 237.75 12.16%
6 2,345.40 109.44 121.80 231.24 9.86%
7 2,736.30 127.68 91.40 219.08 8.01%
8 3,127.20 145.92 60.80 206.72 6.61%
9 3,518.10 164.16 30.40 194.56 5.53%
10 3,909.00 182.40 0.00 182.40 4.67%
- --------------------------------------------------------------------------------

The percentages shown, in the last column will not be appreciably different
or insureds of different ages.

(b) An administrative charge of $5 per $1,000 of face amount of insurance
is deducted upon lapse or surrender to cover the cost of processing
applications, conducting medical examinations, determining insurability and
the insured's rating class, and establishing records. However, this charge
is reduced beginning on the Contract's fifth anniversary and declines daily
at a constant rate until it disappears entirely on the tenth Contract
anniversary. During 1994 and 1993, Pruco Life received a total of
approximately $94,251 and $15,552, respectively, for surrendered or lapsed
Contracts.

Transaction Charges

An administrative processing charge of $15 will be made in connection with each
withdrawal of excess cash surrender value of a Contract. This charge is
described in more detail in the Statement of Additional Information.

Contract Date. When the first premium payment is paid with the application for a
Contract, the Contract date will ordinarily be the later of the date of the
application or the date of any medical examination. In most cases no medical
examination will be necessary. If the first premium is not paid with the
application, the Contract date will ordinarily be the date the first premium was
paid and the Contract was delivered. Under certain circumstances, Pruco Life
will permit a Contract to be back-dated but only to a date not earlier than 6
months prior to the date of the application. It may be advantageous for a
Contract owner to have an earlier Contract date since that will result in the
use by Pruco Life of a lower issue age in determining the amount of the
scheduled premium. Pruco Life will require the payment of all premiums that
would have been due had the application date coincided with the back-dated
Contract date. The death benefit and cash surrender value under the Contract
will be equal to what they would have been had the Contract been issued on the
Contract date, all scheduled premiums been received on their due dates, and all
Contract charges been made.

Premiums. As already explained, the Contract provides for a Scheduled Premium
which, if paid when due or within a 61 day grace period, ensures that the
Contract will not lapse. If you pay premiums other than on a monthly basis, you
will receive a notice that a premium is due about 3 weeks before each due date.
If you pay premiums monthly, you will receive a book each year with 12 coupons
that will serve as a reminder. With Pruco Life's consent, you may change the
frequency of premium payments.

You may elect to have monthly premiums paid automatically under the "PruMatic
Premium Plan" by pre-authorized transfers from a bank checking account. If you
select the Pru-Matic Premium Plan, one of the current monthly charges will be
reduced. See Monthly Deductions From Contract Fund, page 9. Some Contract owners
may also be eligible to have monthly premiums paid by pre-authorized deductions
from an employer's payroll.

11
<PAGE>

The following table shows, for two face amounts, representative preferred and
standard annual premium amounts under Contracts issued on insureds who are not
substandard risks. These premiums do not reflect any additional riders or
supplementary benefits.

- --------------------------------------------------------------------------------
$10,000 Face Amount $20,000 Face Amount
---------------------------------------------------
Preferred Standard Preferred Standard
- --------------------------------------------------------------------------------
Male, age 35 $ 233.70 $ 274.01 $ 390.90 $ 471.52
at issue
- --------------------------------------------------------------------------------
Female, age 45 $ 278.04 $ 308.53 $ 479.59 $ 540.57
at issue
- --------------------------------------------------------------------------------
Male, age 55 $ 450.96 $ 562.17 $ 825.43 $1047.86
at issue
- --------------------------------------------------------------------------------

The following table compares annual and monthly premiums for insureds who are in
the preferred rating class. Note that in these examples the sum of 12 monthly
premiums for a particular Contract is approximately 110% to 116% of the annual
scheduled premium for that Contract.

- --------------------------------------------------------------------------------
$10,000 Face Amount $20,000 Face Amount
---------------------------------------------------
Monthly Annual Monthly Annual
- --------------------------------------------------------------------------------
Male, age 35 $ 22.43 $ 233.70 $ 36.59 $ 390.90
at issue
- --------------------------------------------------------------------------------
Female, age 45 $ 26.46 $ 278.04 $ 44.65 $ 479.59
at issue
- --------------------------------------------------------------------------------
Male, age 55 $ 41.96 $ 450.96 $ 75.66 $ 825.43
at issue
- --------------------------------------------------------------------------------

A significant feature of this Contract is that it permits you to pay greater
than Scheduled Premiums. This may be done by making occasional unscheduled
premium payments or on a periodic basis. If you wish, you may select a higher
contemplated premium than the Scheduled Premium. Pruco Life will then bill you
for the chosen premium. In general, the regular payment of higher premiums will
result in higher cash surrender values and higher death benefits. Conversely,
payment of a Scheduled Premium need not be made if the Contract Fund is
sufficiently large to enable the charges due under the Contract to be made
without causing the Contract to lapse. See Lapse and Reinstatement, page 14. The
payment of premiums in excess of Scheduled Premiums may cause the Contract to
become a Modified Endowment Contract. If this happens, loans and other
distributions which would otherwise not be taxable events will be subject to
federal income taxation. See Tax Treatment of Contract Benefits, page 17.

Pruco Life will generally accept any premium payment if the payment is at least
$25. Pruco Life does reserve the right, however, to limit unscheduled premiums
to a total of $5,000 in any Contract year, and to refuse to accept premiums that
would immediately result in more than a dollar-for-dollar increase in the death
benefit. See How a Contract's Death Benefit Will Vary, page 13. The privilege of
making large or additional premium payments offers a way of investing amounts
which accumulate without current income taxation, but again, there are tax
consequences if the Contract becomes a Modified Endowment Contract. See Tax
Treatment of Contract Benefits, page 17.

Allocation of Premiums. On the Contract date, a $2 processing charge and the
charge for taxes attributable to premiums are deducted from the initial premium.
The remainder is allocated on the Contract date among the subaccount[s] or the
fixed-rate option according to the desired allocation specified in the
application form. From this invested portion of the initial premium, the first
monthly deductions are made. See Contract Fees and Charges, page 9. The invested
portion of any part of the initial premium in excess of the Scheduled Premium is
placed in the selected investment option[s] on the date of receipt, but not
earlier than the Contract date. Thus, to the extent that the receipt of the
first premium precedes the Contract date, there will be a period during which
the Contract owner's initial premium will not be invested. All subsequent
premium payments, after the deduction from premiums, when received by Pruco Life
will be placed in the subaccount[s] or the fixed-rate option in accordance with
the allocation previously designated. Provided the Contract is not in default,
you may change the way in which subsequent premiums are allocated by giving
written notice to a Home Office. You may also change the way in which subsequent
premiums are allocated by telephoning the Home Office, provided you are enrolled
to

12
<PAGE>

use the Telephone Transfer system. There is no charge for reallocating future
premiums. If any part of the invested portion of a premium is allocated to a
particular investment option, that portion must be at least 10% on the date the
allocation takes effect. All percentage allocations must be in whole numbers.
For example, 33% can be selected but 331/3% cannot. Of course, the total
allocation of all selected investment options must equal 100%.

Transfers. If the Contract is not in default, or if the Contract is in force as
variable reduced paid-up insurance (see Lapse and Reinstatement, page 14), you
may, up to four times in each Contract year, transfer amounts from one
subaccount to the other subaccount or to the fixed-rate option. There is no
charge. All or a portion of the amount credited to a subaccount may be
transferred.

In addition, the total amount credited to a Contract held in the subaccounts may
be transferred to the fixed-rate option at any time during the first two
Contract years. If you wish to convert your variable Contract to a fixed-benefit
Contract in this manner, you must request a complete transfer of funds to the
fixed-rate option and should also change your allocation instructions regarding
any future premiums.

Transfers between subaccounts will take effect as of the end of the valuation
period in which a proper transfer request is received at a Home Office. The
request may be in terms of dollars, such as a request to transfer $1,000 from
one subaccount to the other, or may be in terms of a percentage reallocation
between subaccounts. In the latter case, as with premium reallocations, the
percentages must be in whole numbers. You may transfer amounts by proper written
notice to a Home Office, or by telephone, unless you ask that transfers by
telephone not be made. Pruco Life has adopted procedures designed to ensure that
requests by telephone are genuine and will require appropriate identification
for that purpose. Pruco Life cannot guarantee that you will be able to get
through to complete a telephone transfer during peak periods such as periods of
drastic economic or market change.

Transfers from the fixed-rate option are subject to restrictions and may only be
made with Pruco Life's consent. Transfers from the fixed-rate option to the
subaccounts are currently permitted once each Contract year and only during the
30-day period beginning on the Contract anniversary. The maximum amount which
may be transferred out of the fixed-rate option each year is currently the
greater of: (a) 25% of the amount in the fixed-rate option, or (b) $2,000. Such
transfer requests received prior to the Contract anniversary will be effected on
the Contract anniversary. Transfer requests received within the 30-day period
beginning on the Contract anniversary will be effected as of the end of the
valuation period in which a proper transfer request is received at a Home
Office. These limits are subject to change in the future.

How the Contract Fund Changes with Investment Experience. As explained above,
after the tenth Contract year, there will no longer be a surrender charge and,
if there is no Contract loan, the cash surrender value will be equal to the
Contract Fund. This section, therefore, also describes how the cash surrender
value of the Contract will change with investment experience.

On the Contract Date, the Contract Fund value is the initial premium less the
deductions from premiums and the first monthly deductions. See Contract Fees and
Charges, page 9. This amount is placed in the investment options designated by
the owner. Thereafter the Contract Fund value changes daily, reflecting
increases or decreases in the value of the securities in which the assets of the
subaccount have been invested, and interest credited on any amounts allocated to
the fixed-rate option. It is also reduced by the daily asset charge for
mortality and expense risks assessed against the variable investment options.
The Contract Fund value also increases to reflect the receipt of additional
premium payments and is decreased by the monthly deductions.

A Contract's cash surrender value on any date will be the Contract Fund value
reduced by the withdrawal charges, if any, and by any Contract debt. Upon
request, Pruco Life will tell a Contract owner the cash surrender value of his
or her Contract. It is possible, although highly unlikely, that the cash
surrender value of a Contract could decline to zero because of unfavorable
investment performance, even if a Contract owner continues to pay Scheduled
Premiums when due.

The tables on pages T1 through T4 of this prospectus illustrate what the death
benefit and cash surrender values would be for a representative Contract,
assuming uniform hypothetical investment results in the selected portfolio[s],
and also provide information about the aggregate premiums payable under the
Contract.

How a Contract's Death Benefit Will Vary. The death benefit will change from the
outset with investment experience. The precise way in which that will occur is
complicated and is described in the Statement of Additional Information. In
general, and assuming the optional paid-up benefit is not in effect, see Paid-Up
Insurance Option, on page 15, if the net investment performance is 4% per year
or higher, the death benefit will increase; if it is below 4%, it will decrease.
Pruco Life guarantees, however, that it will not decrease below the face amount
of insurance. If unfavorable experience of that kind should occur, it must be
offset by favorable experience before the death benefit begins to increase
again.

If the Contract is kept in force for several years and if investment performance
is relatively favorable, the Contract Fund value may grow to the point where, to
meet certain provisions of the Internal Revenue Code which require

13
<PAGE>

that the death benefit always be greater than the Contract Fund value, the death
benefit must be increased. The required difference between the death benefit and
Contract Fund value is higher at younger ages than at older ages. A precise
description is in the Statement of Additional Information.

Contract Loans. The owner may borrow from Pruco Life up to the "loan value" of
the Contract, using the Contract as the only security for the loan. The loan
value is equal to (1) 90% of an amount equal to the portion of the Contract fund
value attributable to the variable investment options and to any prior loan[s]
supported by the variable investment options, minus the portion of any charges
attributable to variable investment options that would be payable upon an
immediate surrender; plus (2) 100% of an amount equal to the portion of the
Contract fund value attributable to the fixed-rate option and to any prior
loan[s] supported by the fixed-rate option, minus the portion of any charges
attributable to the fixed-rate option that would be payable upon an immediate
surrender. The minimum amount that may be borrowed at any one time is $200
unless the proceeds are used to pay premiums on the Contract.

Interest charged on a loan accrues daily at a fixed effective annual rate of
5.5%. Interest payments on any loan are due at the end of each Contract year. If
interest is not paid when due, it is added to the principal amount of the loan.
The term "Contract debt" means the amount of all outstanding loans plus any
interest accrued but not yet due. If at any time the Contract debt exceeds what
the cash surrender value would be if there were no Contract debt, Pruco Life
will notify you of its intent to terminate the Contract in 61 days, within which
time you may repay all or enough of the loan to obtain a positive cash surrender
value and thus keep the Contract in force for a limited time.

When a loan is made, an amount equal to the loan proceeds will be transferred
out of the variable investment options and/or the fixed-rate option, as
applicable. The reduction will normally be made in the same proportions as the
value in each subaccount and the fixed-rate option bears to the total value of
the Contract. While a loan is outstanding, the amount that was so transferred
will continue to be treated as part of the Contract fund but it will be credited
with the assumed rate of return of 4% rather than with the actual rate of return
of the subaccount[s] or fixed-rate option.

A loan will not affect the amount of the premiums due. Should the death benefit
become payable while a loan is outstanding, or should the Contract be
surrendered, any Contract debt will be deducted from the death benefit or the
cash surrender value.

A loan will have an effect on a Contract's cash surrender value and may have an
effect on the death benefit, even if the loan is fully repaid, because the
investment results of the selected investment options will apply only to the
amount remaining invested under those options. The longer the loan is
outstanding, the greater the effect is likely to be. The effect could be
favorable or unfavorable. If investment results are greater than the rate being
credited upon the amount of the loan while the loan is outstanding, values under
the Contract will not increase as rapidly as they would have if no loan had been
made. If investment results are below that rate, Contract values will be higher
than they would have been had no loan been made. A loan that is repaid will not
have any effect upon the guaranteed minimum death benefit.

Consider the Contract issued on a 35 year old male insured illustrated in the
table on page T2 with an 8% gross investment return. Assume a $1,500 loan was
made under this Contract at the end of Contract year 8 and repaid at the end of
Contract year 10 and loan interest was paid when due. Upon repayment, the cash
surrender value would be $3,234.10. This amount is lower than the cash surrender
value shown on that page for the end of Contract year 10 because the loan amount
was credited with the 4% assumed rate of return rather than the 6.46% net return
for the designated subaccount[s] resulting from the 8% gross return in the
underlying Series Fund. Loans from Modified Endowment Contracts may be treated
for tax purposes as distributions of income. See Tax Treatment of Contract
Benefits, page 17.

Surrender of a Contract. You may surrender a Contract for its cash surrender
value while the insured is living. To surrender a Contract, you must deliver or
mail it, together with a written request, to a Home Office. The cash surrender
value of a surrendered Contract (taking into account the deferred sales and
administrative charges, if any) will be determined as of the end of the
valuation period in which such a request is received in the Home Office.
Surrender of a Contract may have tax consequences. See Tax Treatment of Contract
Benefits, page 17.

Lapse and Reinstatement. As has already been explained, if Scheduled Premiums
are paid on or before each due date, or within the grace period after each due
date, and there are no withdrawals, a Contract will remain in force even if the
investment results of that Contract's variable investment option[s] have been so
unfavorable that the Contract Fund has decreased to zero or less.

In addition, even if a Scheduled Premium is not paid, the Contract will remain
in force as long as the Contract Fund on any Monthly Date is equal to or greater
than the Tabular Contract Fund value on the following Monthly Date. (A Table of
Tabular Contract Fund Values is included in the Contract; the values increase
with each year the

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<PAGE>

Contract remains in force.) This could occur because of such factors as
favorable investment experience, deduction of current rather than maximum
charges, or the previous payment of greater than Scheduled Premiums.

However, if a Scheduled Premium is not paid, and the Contract Fund is
insufficient to keep the Contract in force, the Contract will go into default.
Should this happen, Pruco Life will send you a notice of default setting forth
the payment necessary to keep the Contract in force on a premium paying basis.
This payment must be received at a Home Office within the 61 day grace period
after the notice of default is mailed or the Contract will lapse. A Contract
that lapses with an outstanding Contract loan may have tax consequences. See Tax
Treatment of Contract Benefits, page 17.

A Contract that has lapsed may be reinstated within 5 years after the date of
default unless the Contract has been surrendered for its cash surrender value.
To reinstate a lapsed Contract, Pruco Life requires renewed evidence of
insurability, and submission of certain payments due under the Contract.

If your Contract does lapse, it will still provide some benefits. You can
receive the cash surrender value by making a request of Pruco Life prior to the
end of the 61 day grace period. You may also choose one of the three forms of
insurance described below for which no further premiums are payable.

Fixed Extended Term Insurance. The amount of insurance that would have been paid
on the date of default will continue for a stated period of time. You will be
told in writing how long that will be. The insurance amount will not change.
There will be a diminishing cash surrender value but no loan value. Extended
term insurance is not available to insureds in high risk classifications or
under Contracts issued in connection with tax-qualified pension plans.

Fixed Reduced Paid-Up Insurance. This insurance continues for the lifetime of
the insured but at an insurance amount that is generally lower than that
provided by fixed extended term insurance. It will decrease only if a Contract
loan is taken. You will be told, if you ask, what the amount of the insurance
will be. Fixed paid-up insurance has a cash surrender value and a loan value. It
is possible for this Contract to be classified as a Modified Endowment Contract
if this option is exercised during the first 7 Contract years. See Tax Treatment
of Contract Benefits, page 17.

Variable Reduced Paid-Up Insurance. This is similar to fixed paid-up insurance
and will initially be in the same amount. The Contract Fund will continue to
vary to reflect the experience of the selected investment options. There will be
a new guaranteed minimum death benefit. Variable reduced paid-up insurance has
cash surrender and loan values.

Variable reduced paid-up insurance is the automatic option provided upon lapse,
if the amount of variable reduced paid-up insurance is at least as great as the
amount of fixed extended term insurance which would have been provided upon
lapse. Variable reduced paid-up insurance will be available only if the insured
is not in one of the high risk rating classes for which Pruco Life does not
offer fixed extended term insurance. It is possible for this Contract to be
classified as a Modified Endowment Contract if this option is exercised during
the first 7 Contract years. See Tax Treatment of Contract Benefits, page 17.

What Happens If No Request Is Made? Except in the two situations described
below, if no request is made the "automatic option" will be fixed extended term
insurance. If that is not available to the insured, then fixed reduced paid-up
insurance will be provided. However, if variable reduced paid-up insurance is
available and the amount is at least as great as the amount of fixed extended
term insurance, then the automatic option will be variable reduced paid-up
insurance. This could occur when there is a Contract debt outstanding when the
Contract lapses.

Paid-Up Insurance Option. In certain circumstances you may elect to stop paying
premiums and to have guaranteed insurance coverage for the lifetime of the
insured. This benefit is available only if the following conditions are met: (1)
the Contract is not in default; (2) Pruco Life is not paying premiums in
accordance with any payment of premium benefit that may be included in the
Contract; and (3) the Contract fund is sufficiently large so that the calculated
guaranteed paid-up insurance amount is at least equal to the face amount of
insurance plus the excess, if any, of the Contract fund over the tabular
Contract fund. The amount of guaranteed paid-up insurance coverage may be
greater. It will be equal to the difference between the Contract fund and the
present value of future monthly charges from the Contract fund (other than
charges for anticipated mortality costs and for payment of premium riders)
multiplied by the attained age factor. This option will generally be available
only when the Contract has been in force for many years and the Contract fund
has grown because of favorable investment experience or the payment of
unscheduled premiums or both. Once the paid-up insurance option is exercised,
the actual death benefit is equal to the greater of the guaranteed paid-up
insurance amount and the Contract fund multiplied by the attained age factor.
Upon request, Pruco Life will quote the amount needed to pay up the Contract and
to guarantee the paid-up insurance amount as long as a payment equal to or
greater than the quoted amount is received within two weeks of the quote. There
is no guarantee if the remittance is received within the two week period and is
less than the quoted amount or if the remittance is received outside the two
week period. In this case, Pruco Life will add the remittance to the contract
fund and recalculate the guaranteed paid-up

15
<PAGE>

insurance amount. If the guaranteed paid-up insurance amount is equal to or
greater than the face amount, the paid-up request will be processed. If the
guaranteed paid-up insurance amount is calculated below the face amount, the
insured will be notified that the amount is insufficient to process the request.
In some cases, the quoted amount, if paid, would increase the death benefit by
more than it increases the contract fund. In these situations, underwriting
might be required to accept the premium payment and to process the paid-up
request. Pruco Life reserves the right to change this procedure in the future.
After the first Contract year, you must make a proper written request for the
Contract to become fully paid-up and send the Contract to a Pruco Life Home
Office to be endorsed. If this option is exercised during the first 7 Contract
years, the Contract may be classified as a "Modified Endowment Contract," see
Tax Treatment of Contract Benefits, page 17. A Contract in effect under a
paid-up insurance option will have cash surrender and loan values.

When Proceeds Are Paid. Pruco Life will generally pay any death benefit, cash
surrender value, loan proceeds or withdrawal within 7 days after receipt at a
Home Office of all the documents required for such a payment. Other than the
death benefit, which is determined as of the date of death, the amount will be
determined as of the end of the valuation period in which the necessary
documents are received. However, Pruco Life may delay payment of proceeds from
the subaccount[s] and the variable portion of the death benefit due under the
Contract if the sale or valuation of the Account's assets is not reasonably
practicable because the New York Stock Exchange is closed for other than a
regular holiday or weekend, trading is restricted by the SEC or the SEC declares
that an emergency exists.

With respect to the amount of any cash surrender value allocated to the
fixed-rate option, and with respect to a Contract in force as fixed reduced
paid-up insurance or as extended term insurance, Pruco Life expects to pay the
cash surrender value promptly upon request. However, Pruco Life has the right to
delay payment of such cash surrender value for up to 6 months (or a shorter
period if required by applicable law). Pruco Life will pay interest of at least
3% a year if it delays such a payment for more than 30 days (or a shorter period
if required by applicable law).

Living Needs Benefit. Contract applicants may elect to add the Living Needs
Benefit(SM) to their Contracts at issue, subject to Pruco Life's receipt of
satisfactory evidence of insurability. The benefit may vary state-by-state. It
can generally be added only when the aggregate face amounts of the insured's
eligible contracts equal $50,000 or more. There is no charge for adding the
benefit to the Contract. However, an administrative charge (not to exceed $150)
will be made at the time the Living Needs Benefit is paid.

The Living Needs Benefit allows the Contract owner to elect to receive an
accelerated payment of all or part of the Contract's death benefit, adjusted to
reflect current value, at a time when certain special needs exist. The adjusted
death benefit will always be less than the death benefit, but will generally be
greater than the Contract's cash surrender value. Depending upon state
regulatory approval, one or both of the following options may be available. A
Pruco Life representative should be consulted as to whether additional options
may be available.

Terminal Illness Option. This option is available if the insured is diagnosed as
terminally ill with a life expectancy of 6 months or less. When satisfactory
evidence is provided, Pruco Life will provide an accelerated payment of the
portion of the death benefit selected by the Contract owner as a Living Needs
Benefit. You may (1) elect to receive the benefit in a single sum or (2) receive
equal monthly payments for 6 months. If the insured dies before all the payments
have been made, the present value of the remaining payments will be paid to the
beneficiary designated in the Living Needs Benefit claim form in a single sum.

Nursing Home Option. This option is available after the insured has been
confined to an eligible nursing home for 6 months or more. When satisfactory
evidence is provided, including certification by a licensed physician, that the
insured is expected to remain in the nursing home until death, Pruco Life will
provide an accelerated payment of the portion of the death benefit selected by
the Contract owner as a Living Needs Benefit. You may (1) elect to receive the
benefit in a single sum or (2) receive equal monthly payments for a specified
number of years (not more than 10 nor less than 2), depending upon the age of
the insured. If the insured dies before all of the payments have been made, the
present value of the remaining payments will be paid to the beneficiary
designated in the Living Needs Benefit claim form in a single sum.

All or part of the Contract's death benefit may be accelerated under the Living
Needs Benefit. If the benefit is only partially accelerated, a death benefit of
at least $25,000 must remain under the Contract. Pruco Life reserves the right
to determine the minimum amount that may be accelerated.

No benefit will be payable if the Contract owner is required to elect it in
order to meet the claims of creditors or to obtain a government benefit. Pruco
Life can furnish details about the amount of Living Needs Benefit that is
available to an eligible Contract owner under a particular Contract, and the
adjusted premium payments that would be in effect if less than the entire death
benefit is accelerated.

The Contract owner should consider whether adding this settlement option is
appropriate in his or her given situation. Adding the Living Needs Benefit to
the Contract has no adverse consequences; however, electing to

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<PAGE>

use it could. Contract owners should consult a qualified tax advisor before
electing to receive this benefit. Unlike a death benefit received by a
beneficiary after the death of an insured, receipt of a Living Needs Benefit
payment may give rise to a federal or state income tax. Receipt of a Living
Needs Benefit payment may also affect a Contract owner's eligibility for certain
government benefits or entitlements.

Voting Rights. As stated above, all of the assets held in the subaccounts of the
Account will be invested in shares of the corresponding portfolios of the Series
Fund. Pruco Life is the legal owner of those shares and as such has the right to
vote on any matter voted on at Series Fund shareholders meetings. However, Pruco
Life will, as required by law, vote the shares of the Series Fund at any regular
and special shareholders meetings it is required to hold in accordance with
voting instructions received from Contract owners. The Series Fund will not hold
annual shareholders meetings when not required to do so under Maryland law or
the Investment Company Act of 1940. Series Fund shares for which no timely
instructions from Contract owners are received, and any shares attributable to
general account investments of Pruco Life will be voted in the same proportion
as shares in the respective portfolios for which instructions are received.

Matters on which Contract owners may give voting instructions including the
following: (1) election of the Board of Directors of the Series Fund; (2)
ratification of the independent accountant of the Series Fund; (3) approval of
the investment advisory agreement for a portfolio of the Series Fund
corresponding to the Contract owner's selected subaccount[s]; (4) any change in
the fundamental investment policy of a portfolio corresponding to the Contract
owner's selected subaccount[s]; and (5) any other matter requiring a vote of the
shareholders of the Series Fund. With respect to approval of the investment
advisory agreement or any change in a portfolio's fundamental investment policy,
Contract owners participating in such portfolios will vote separately on the
matter.

The number of shares in a portfolio for which you may give instructions is
determined by dividing the portion of your Contract Fund attributable to the
portfolio, by the value of one share of the portfolio. The number of votes for
which each Contract owner may give Pruco Life instructions will be determined as
of the record date chosen by the Board of Directors of the Series Fund. Pruco
Life will furnish Contract owners with proper forms and proxies to enable them
to give these instructions. Pruco Life reserves the right to modify the manner
in which the weight to be given voting instructions is calculated where such a
change is necessary to comply with current federal regulations or
interpretations of those regulations.

Pruco Life may, if required by state insurance regulations, disregard voting
instructions if such instructions would require shares to be voted so as to
cause a change in the sub-classification or investment objectives of one or more
of the Series Fund's portfolios, or to approve or disapprove an investment
advisory contract for the Series Fund. In addition, Pruco Life itself may
disregard voting instructions that would require changes in the investment
policy or investment advisor of one or more of the Series Fund's portfolios,
provided that Pruco Life reasonably disapproves such changes in accordance with
applicable federal regulations. If Pruco Life does disregard voting
instructions, it will advise Contract owners of that action and its reasons for
such action in the next annual or semi-annual report to Contract owners.

Reports to Contract Owners. Once each Contract year (except where the Contract
is in force as fixed extended term insurance or fixed reduced paid-up
insurance), you will be sent a statement that provides certain information
pertinent to your own Contract. These statements show all transactions during
the year that affected the value of your Contract Fund, including monthly
changes attributable to investment experience. That statement will also show the
current death benefit, cash surrender value, and loan values of your Contract.
On request, you will be sent a current statement in a form similar to that of
the annual statement described above, but Pruco Life may limit the number of
such requests or impose a reasonable charge if such requests are made too
frequently.

You will be sent an annual report of the Account. You will also be sent annual
and semi-annual reports of the Series Fund showing the financial condition of
the portfolios and the investments held in both.

Tax Treatment of Contract Benefits. The tax treatment of life insurance is
complex and may change, therefore if you need assistance, you should consult
with a qualified tax advisor. A more technical discussion of what follows is
contained in the Statement of Additional Information. Here Pruco Life provides,
not tax advice, but a general statement of how it believes the tax laws
currently apply in the most commonly occurring circumstances.

Treatment as Life Insurance. Pruco Life believes that the Contract should
qualify as "life insurance" under the Internal Revenue Code. This means that,
except as noted below, any annual increases in your Contract Fund, whether
attributable to income or capital appreciation, should not be included in your
income. In addition, the receipt of a death benefit by a beneficiary should not
result in taxable income.

Although Pruco Life believes the Contract should qualify as "life insurance" for
federal tax purposes, there are uncertainties, particularly because the
Secretary of the Treasury has not yet issued permanent regulations that bear on
this question. Accordingly, we have reserved the right to make changes -- which
will be applied uniformly to all Contract owners after advance written notice --
that we deem necessary to insure that the Contract will continue to qualify as
life insurance.

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<PAGE>

Pre-Death Distributions. The tax treatment of any distribution received by an
owner prior to an insured's death will depend upon whether the Contract is
classified as a Modified Endowment Contract.

If the Contract is not classified as a Modified Endowment Contract, proceeds
received in the event of a lapse, surrender of the Contract, or withdrawal of
part of the cash surrender value will generally not be taxable unless the total
amount received exceeds the gross premiums paid less the untaxed portion of any
prior withdrawals. In certain limited circumstances, all or a portion of a
withdrawal during the first 15 contract years may be taxable even if total
withdrawals do not exceed total premiums paid to date. The proceeds of any loan
will be treated as indebtedness of the owner and will not be treated as taxable
income.

If the Contract is classified as a Modified Endowment Contract, pre- death
distributions, including loans and withdrawals (even those made during the 2
year period before the Contract became a Modified Endowment Contract), will be
taxed first as investment income to the extent of gain in the Contract, and then
as a return of the Contract owner's investment in the Contract. In addition,
pre-death distributions (including full surrenders) will be subject to a penalty
of 10% of the amount includible in income unless the amount is distributed on or
after the owner reaches age 59 1/2, on account of the owner's disability, or as
a life annuity.

A Contract may be classified as a Modified Endowment Contract under various
circumstances. For example, low face amount Contracts issued on younger insureds
may be classified as a Modified Endowment Contract even though the Contract
owner pays only the Scheduled Premiums or even less than the Scheduled Premiums.
Before purchasing such a Contract, you should understand the tax treatment of
pre-death distributions and consider the purpose for which the Contract is being
purchased. More generally, a Contract may be classified as a Modified Endowment
Contract if premiums in excess of Scheduled Premiums are paid or the face amount
of insurance is decreased during the first seven Contract years, or if the face
amount of insurance is increased or if a rider is added or removed from the
Contract. You should consult with your tax advisor before making any of these
policy changes.

Other Tax Consequences. There may be federal estate taxes and state and local
estate and inheritance taxes payable if either the owner or the insured dies.
The transfer or assignment of the Contract to a new owner may also have tax
consequences. The individual situation of each Contract owner or beneficiary
will be significant.

Other Contract Provisions. There are several other Contract provisions that are
of less significance to you than those already described in detail either
because they relate to options that you may choose under the Contract but are
not likely to exercise for several years after you first purchase it or because
they are of a routine nature not likely to influence your decision to buy the
Contract. These provisions are summarized in the Expanded Table of Contents of
the Statement of Additional Information, page 23 and described in greater detail
in the Statement of Additional Information.

FURTHER INFORMATION ABOUT THE SERIES FUND

The Prudential Series Fund, Inc. (the "Series Fund") is a Maryland corporation
organized on November 15, 1982. It is registered under the Investment Company
Act of 1940 (the "1940 Act") as an open-end, diversified, management investment
company. This registration does not imply any supervision by the Securities and
Exchange Commission over the Series Fund's management or its investment policies
or practices.

The Series Fund is currently made up of sixteen separate portfolios, two of
which, the Conservatively Managed Flexible and Aggressively Managed Flexible
Portfolios are available to Contract owners. Each portfolio is, for many
purposes, in effect a separate investment fund, and a separate class of capital
stock is issued for each portfolio. Each share of capital stock issued with
respect to a portfolio has a pro-rata interest in the assets of that portfolio
and has no interest in the assets of any other portfolio. Each portfolio bears
its own liabilities and also its proportionate share of the general liabilities
of the Series Fund. In other respects the Series Fund is treated as one entity.
For example, the Series Fund has only one Board of Directors and owners of the
shares of each portfolio are entitled to vote for members of the Board.

Shares in the Series Fund are currently sold and redeemed at the close of each
business day, at their net asset value, determined in the manner described in
the Statement of Additional Information, only to separate accounts of The
Prudential and its subsidiaries. They may, in the future, be sold to other
insurers to fund benefits under variable life insurance and variable annuity
contracts issued by those companies.

The Prudential is the investment advisor of the Series Fund. The Prudential has
entered into a Service Agreement with its wholly-owned subsidiary The Prudential
Investment Corporation ("PIC"), which provides that PIC will furnish to The
Prudential such services as The Prudential may require in connection with the
performance of its obligations under an Investment Advisory Agreement with the
Series Fund. See Investment Management Arrangements and Expenses, page 22.

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<PAGE>

INVESTMENT OBJECTIVES AND POLICIES
OF THE PORTFOLIOS

Each portfolio of the Series Fund has a different objective which it pursues
through separate investment policies as described below. Since each portfolio
has a different investment objective, each can be expected to have different
investment results and incur different market and financial risks. Those risks,
as explained above, are borne by the Contract owner. The Series Fund may in the
future establish other portfolios with different investment objectives.

The investment objectives of each portfolio are fundamental and may not be
changed without the approval of the holders of a majority of the outstanding
shares of the portfolio affected (which for this purpose and under the 1940 Act
means the lesser of: (i) 67% of the shares represented at a meeting at which
more than 50% of the outstanding shares are represented; or (ii) more than 50%
of the outstanding shares). The policies by which a portfolio seeks to achieve
its investment objectives, however, are not fundamental. They may be changed by
the Board of Directors of the Series Fund without the approval of the
shareholders.

The investment objectives of both portfolios available to PRUvider Contract
owners are set forth on page 2. For the sake of convenience, they are repeated
here, followed in each case by a brief description of the policies of both
portfolios. In some cases a fuller description of those policies is in the
Statement of Additional Information. There is no guarantee that any of these
objectives will be met.

Balanced Portfolios

Conservatively Managed Flexible Portfolio. The objective of this portfolio is to
achieve a favorable total investment return consistent with a portfolio having a
conservatively managed mix of money market instruments, fixed income securities,
and common stocks in proportions believed by the investment manager to be
appropriate for an investor desiring diversification of investment who prefers a
relatively lower risk of loss than that associated with the Aggressively Managed
Flexible Portfolio while recognizing that this reduces the chances of greater
appreciation.

To achieve this objective, the Conservatively Managed Flexible Portfolio will
follow a policy of maintaining a more conservative asset mix among stocks, bonds
and money market instruments than the Aggressively Managed Flexible Portfolio.
In general, the portfolio manager will observe the following range of target
asset allocation mixes:

Asset Type Minimum Normal Maximum
---------- ------- ------ -------
Stocks 15% 35% 50%
Bonds 15% 35% 50%
Money Market 0% 30% 70%

The bond portion of the portfolio will be invested primarily in securities with
maturities of 2 to 10 years and ratings at the time of purchase within the four
highest grades determined by Moody's, S&P, or a similar nationally-recognized
rating service. A description of debt ratings is in the Statement of Additional
Information. Because of their shorter maturities, the value of the notes and
bonds in this portfolio will be less sensitive to changes in interest rates than
the longer-term bonds likely to be held in the Aggressively Managed Flexible
Portfolio. Thus, there will be less of a risk of loss of principal, but not as
much of a likelihood for greater appreciation in value. Up to 20% of the bond
portion of this portfolio may be invested in United States currency denominated
debt securities issued outside the United States by foreign or domestic issuers.
The common stock portion of this portfolio will be invested primarily in the
equity securities of major, established corporations in sound financial
condition that appear to offer attractive prospects of a total return from
dividends and capital appreciation that is superior to broadly based stock
indices. The money market portion of the portfolio will hold high-quality
short-term debt obligations with a maturity of 12 months or less (as described
in the Statement of Additional Information) and will maintain a dollar-weighted
average maturity of 120 days or less.

To the extent permitted by applicable insurance law, this portfolio may invest
up to 30% of its total assets in non-United States currency denominated debt and
equity securities of foreign and U.S. issuers. The particular risks of
investments in foreign securities are described under Foreign Securities on
page 21.

In addition, the portfolio may (i) purchase and sell options on equity
securities, debt securities, stock indices and foreign currencies (ii) purchase
and sell stock index, interest rate and foreign currency futures contracts and
options thereon; (iii) enter into forward foreign currency exchange contracts;
(iv) purchase securities on a when-issued or delayed delivery basis; (v) use
interest rate swaps; and (vi) make short sales. These techniques are described
briefly under Options, Futures Contracts and Swaps and Short Sales on page 21,
and in detail in the Statement of Additional Information.

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<PAGE>

The Conservatively Managed Flexible Portfolio is managed by Prudential
Investment Advisors ("PIA") and Prudential Diversified Investment Strategies
("PDI"), units of PIC, using a team of portfolio managers under the supervision
of Mark Stumpp, Managing Director, PIC. Mark Stumpp has been providing overall
asset allocation for the portfolio since 1994. Mr. Stumpp also supervises the
team of portfolio managers for the Aggressively Managed Flexible Portfolio of
the Series Fund and is portfolio manager for several employee benefit trusts
including the Prudential Retirement System for U.S. Employees and Special
Agents. Prior to 1994, he was responsible for corporate pension asset management
for Prudential Diversified Investment Strategies' corporate clients.

Aggressively Managed Flexible Portfolio. The objective of this portfolio is
achievement of a high total return consistent with a portfolio having an
aggressively managed mix of money market instruments, fixed income securities,
and common stocks, in proportions believed by The Prudential to be appropriate
for an investor desiring diversification of investment who is willing to accept
a relatively high level of loss in an effort to achieve greater appreciation.

To achieve this objective, the Aggressively Managed Flexible Portfolio will
follow a policy of maintaining a more aggressive asset mix among stocks, bonds
and money market investments than the Conservatively Managed Flexible Portfolio.
In general, the portfolio manager will observe the following range of target
asset allocation mixes:

Asset Type Minimum Normal Maximum
---------- ------- ------ -------
Stocks 25% 60% 100%
Bonds 0% 40% 75%
Money Market 0% 0% 75%

The bond component of this portfolio is expected under normal circumstances to
have a weighted average maturity of greater than 10 years. The values of bonds
with longer maturities are generally more sensitive to changes in interest rates
than those of shorter maturities. The bond portion of this portfolio will
primarily be invested in securities that have a rating at the time of purchase
within the four highest grades determined by Moody's, S&P, or a similar
nationally-recognized rating service. A description of debt ratings is in the
Statement of Additional Information. However, up to 25% of the bond component of
this portfolio may be invested in securities having ratings at the time of
purchase of "BB," "Ba" or lower, or if not rated, of comparable quality in the
opinion of the portfolio manager, these securities are also known as high risk
securities. Up to 20% of the bond portion of this portfolio may be invested in
United States currency denominated debt securities issued outside the United
States by foreign or domestic issuers. The established company common stock
component of this portfolio will consist of the equity securities of major
corporations that are believed to be in sound financial condition. In selecting
stocks of smaller capitalization companies, the portfolio manager will
concentrate on companies with a capitalization range of $75 million to $600
million that show above-average profitability (measured by return- on-equity,
earnings, and dividend growth rates) with modest price/earnings ratios. The
individual equity selections for this portfolio may tend to have more volatile
market values than the equity securities selected for the Common Stock Portfolio
or the Conservatively Managed Flexible Portfolio. The money market portion of
the portfolio will hold high-quality short-term debt obligations with a maturity
of 12 months or less (as described in the Statement of Additional Information)
and will maintain a dollar-weighted average maturity of 120 days or less.

To the extent permitted by applicable insurance law, this portfolio may invest
up to 30% of its total assets in non-United States currency denominated debt and
equity securities of foreign and U.S. issuers. The particular risks of
investment in foreign securities are described under Foreign Securities, below.

In addition, the portfolio may (i) purchase and sell options on equity
securities, debt securities, stock indices and foreign currencies (ii) purchase
and sell stock index, interest rate and foreign currency futures contracts and
options thereon; (iii) enter into forward foreign currency exchange contracts;
(iv) purchase securities on a when-issued or delayed delivery basis; (v) use
interest rate swaps; and (vi) make short sales. These techniques are described
briefly under Options, Futures Contracts and Swaps and Short Sales, below, and
in detail in the Statement of Additional Information.

The Aggressively Managed Flexible Portfolio is managed by Prudential Investment
Advisors ("PIA") and Prudential Diversified Investment Strategies ("PDI"), units
of PIC, using a team of portfolio managers under the supervision of Mark Stumpp,
Managing Director, PIC. Mark Stumpp has been providing overall asset allocation
for the portfolio since 1994. Mr. Stumpp also supervises the team of portfolio
managers for the Conservatively Managed Flexible Portfolio of the Series Fund
and is portfolio manager for several employee benefit trusts including the
Prudential Retirement System for U.S. Employees and Special Agents. Prior to
1994, he was responsible for corporate pension asset management for Prudential
Diversified Investment Strategies' corporate clients.

Foreign Securities. The bond components of the Conservatively Managed Flexible
and Aggressively Managed Flexible Portfolios may each invest up to 20% of their
assets in United States currency denominated debt securities issued outside the
United States by foreign or domestic issuers. To the extent permitted by
applicable insurance

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<PAGE>

law, the Conservatively Managed Flexible and Aggressively Managed Flexible
Portfolios may invest up to 30% of their total assets in debt and equity
securities denominated in a foreign currency and issued by foreign or domestic
issuers. Securities issued outside the United States and not publicly traded in
the United States, as well as American Depository Receipts ("ADRs") and
securities denominated in a foreign currency are referred to collectively in
this prospectus as "foreign securities."

ADRs are U.S. dollar-denominated certificates issued by a United States bank or
trust company and represent the right to receive securities of a foreign issuer
deposited in a domestic bank or foreign branch of a United States bank and
traded on a United States exchange or in an over-the-counter market. Investment
in ADRs has certain advantages over direct investment in the underlying foreign
securities because they are easily transferable, have readily available market
quotations, and the foreign issuers are usually subject to comparable auditing,
accounting, and financial reporting standards as domestic issuers.

Foreign securities involve risks of political and economic instability in the
country of the issuer, the difficulty of predicting international trade
patterns, the possibility of imposition of exchange controls and, in the case of
securities not denominated in United States currency, the risk of currency
fluctuations. Such securities may be subject to greater fluctuations in price
than domestic securities. Under certain market conditions, foreign securities
may be less liquid than domestic securities. In addition, there may be less
publicly available information about a foreign company than about a domestic
company. Foreign companies generally are subject to uniform accounting,
auditing, and financial reporting standards comparable to those applicable to
domestic companies. There is generally less government regulation of securities
exchanges, brokers, and listed companies abroad than in the United States, and,
with respect to certain foreign countries, there is a possibility of
expropriation, confiscatory taxation or diplomatic developments which could
affect investment in those countries. If the security is denominated in foreign
currency, it may be affected by changes in currency rates and in exchange
control regulations, and costs may be incurred in connection with conversions
between currencies. Finally, in the event of a default of any foreign debt
obligations, it may be more difficult for a portfolio to obtain or to enforce a
judgment against the issuers of such securities. See Forward Foreign Currency
Exchange Contracts in the Statement of Additional Information.

Options, Futures Contracts and Swaps. The description of the portfolios'
investment policies also state whether they will invest in what are sometimes
called derivative securities. These include options (which may be to buy or sell
equity securities, debt securities, stock indices, foreign currencies and stock
index futures contracts); futures contracts on interest bearing securities,
stock and interest rate indices, and foreign currencies; and interest rate
swaps. These investments have not in the past represented more than a very minor
part of the investments of any portfolio but may increase in the future.

A call option gives the owner the right to buy and a put option the right to
sell a designated security or index at a predetermined price for a given period
of time. They will be used primarily to hedge or minimize fluctuations in the
principal value of a portfolio or to generate additional income. They involve
risks which differ, depending upon the particular option. But they often offer
an attractive alternative to the purchase or sale of the related security.

Futures contracts represent a contractual obligation to buy or sell a designated
security or index within a stated period. They can be used as a hedge against or
to minimize fluctuations of a portfolio or as an efficient way of establishing
certain positions more quickly than direct purchase of the securities. They can
also be used to speculate, but this will not be done by any of the portfolios.
They involve risks of various kinds, all of which could result in losses rather
than in achieving the intended objective of any particular purchase.

Because options, futures and swaps are now used to such a limited extent, a full
description of these investments and the risks associated with them is in the
Statement of Additional Information.

Short Sales. The Conservatively Managed Flexible and Aggressively Managed
Flexible Portfolios may sell securities they do not own in anticipation of a
decline in the market value of those securities ("short sales"). The portfolio
will incur a loss as a result of the short sale if the price of the security
increases between the date of the short sale and the date on which the portfolio
replaces the borrowed security. The portfolio will realize a gain if the
security declines in price between those dates. This result is the opposite of
what one would expect from a cash purchase of a long position in a security. The
amount of any gain will be decreased, and the amount of any loss will be
increased, by the amount of any premium or interest paid in connection with the
short sale.

Reverse Repurchase Agreements and Dollar Rolls. The fixed income portions of the
Conservatively Managed Flexible and Aggressively Managed Flexible Portfolios may
use reverse repurchase agreements and dollar rolls. The money market portion of
these portfolios may use reverse repurchase agreements. Reverse repurchase
agreements involve the sale of securities held by a portfolio with an agreement
by the portfolio to repurchase the same securities at an agreed upon price and
date. During the reverse repurchase period, the portfolio often continues to
receive principal and interest payments on the sold securities. The terms of
each agreement reflect a rate of interest for use of the funds for the period,
and thus these agreements have the characteristics of borrowing by

21
<PAGE>

the portfolio. Dollar rolls involve sales by a portfolio of securities for
delivery in the current month with a simultaneous contract to repurchase
substantially similar securities (same type and coupon) from the same party at
an agreed upon price and date. During the roll period, the portfolio forgoes
principal and interest paid on the securities. A portfolio is compensated by the
difference between the current sales price and the forward price for the future
purchase (often referred to as the "drop") as well as by the interest earned on
the cash proceeds of the initial sale. A "covered roll" is a specific type of
dollar roll for which there is an offsetting cash position or a cash equivalent
security position which matures on or before the forward settlement date of the
dollar roll transaction. A portfolio will establish a segregated account with
its custodian in which it will maintain cash, U.S. Government securities or
other liquid high-grade debt obligations equal in value to its obligations in
respect of reverse repurchase agreements and dollar rolls. Reverse repurchase
agreements and dollar rolls involve the risk that the market value of the
securities retained by the portfolio may decline below the price of the
securities the portfolio has sold but is obligated to repurchase under the
agreement. In the event the buyer of securities under a reverse repurchase
agreement or dollar roll files for bankruptcy or becomes insolvent, the
portfolio's use of the proceeds of the agreement may be restricted pending a
determination by the other party, or its trustee or receiver, whether to enforce
the portfolio's obligation to repurchase the securities. No portfolio will
obligate more than 30% of its net assets in connection with reverse repurchase
agreements and dollar rolls.

Loans of Portfolio Securities. Both of the portfolios may from time to time lend
the securities they hold to broker-dealers, provided that such loans are made
pursuant to written agreements and are continuously secured by collateral in the
form of cash, U.S. Government Securities or irrevocable standby letters of
credit in an amount equal to at least the market value at all times of the
loaned securities plus the accrued interest and dividends. During the time
securities are on loan, the portfolio will continue to receive the interest and
dividends, or amounts equivalent thereto, on the loaned securities, while
receiving a fee from the borrower or earning interest on the investment of the
cash collateral.

There is a slight risk that the borrower may become insolvent, which might delay
carrying out a decision to sell the loaned security. This risk can be minimized
by careful selection of borrowers and requiring and monitoring the adequacy of
capital. No loans will be made to any broker affiliated with The Prudential.

INVESTMENT RESTRICTIONS APPLICABLE TO THE PORTFOLIOS

The Series Fund is subject to certain investment restrictions which are
fundamental to the operations of the Series Fund and may not be changed except
with the approval of a majority vote of the persons participating in the
affected portfolio.

The investments of the various portfolios are generally subject to certain
additional restrictions under state laws. In the event of future amendments to
the applicable New Jersey statutes, each portfolio will comply, without the
approval of the shareholders, with the statutory requirements as so modified.

A detailed discussion of investment restrictions applicable to the Series Fund
is in the Statement of Additional Information.

INVESTMENT MANAGEMENT ARRANGEMENTS AND EXPENSES

The Series Fund has entered into an Investment Advisory Agreement with The
Prudential under which The Prudential will, subject to the direction of the
Board of Directors of the Series Fund, be responsible for the management of the
Series Fund, and provide investment advice and related services to each
portfolio. The Prudential manages the assets that it owns as well as those of
various separate accounts established by The Prudential and those held by other
investment companies for which it acts as investment advisor. Total assets under
management as of December 31, 1994 was approximately $297 billion, which
includes approximately $212 billion owned by The Prudential and approximately
$85 billion of external assets under The Prudential's management.

Subject to The Prudential's supervision, substantially all of the investment
advisory services provided to the Series Fund by The Prudential with respect to
the Conservatively Managed Flexible and Aggressively Managed Flexible
Portfolios, are furnished by its wholly-owned subsidiary, PIC, pursuant to the
Service Agreement between The Prudential and PIC which provides that The
Prudential will reimburse PIC for its costs and expenses. The Conservatively
Managed Flexible and Aggressively Managed Flexible Portfolios are managed by
Prudential Investment Advisors ("PIA") and Prudential Diversified Investment
Strategies ("PDI"), units of PIC, using a team of portfolio managers under the
supervision of Mark Stumpp, Managing Director, PIC. PIC is registered as an
investment advisor under the Investment Advisers Act of 1940.

Under the Investment Advisory Agreement, The Prudential receives an investment
management fee as compensation for its services to the Series Fund. The fee is a
daily charge, payable quarterly, equal to an annual percentage of the average
daily net assets of each individual portfolio. It is set forth on page 9.

22
<PAGE>

For the year ended December 31, 1994, the Series Fund's total expenses were
0.59% of the average net assets of all of the Series Fund's portfolios. The
investment management fee for that period constituted 0.51% of the average net
assets. Further information about the investment management arrangements and the
expenses of the Series Fund is in the Statement of Additional Information.

Portfolio Brokerage and Related Practices. The Prudential is responsible for
decisions to buy and sell securities for the portfolios, the selection of
brokers and dealers to effect the transactions, and the negotiation of brokerage
commissions, if any. Fixed income securities, as well as equity securities
traded in the over-the-counter market, are generally traded on a "net" basis
with dealers acting as principals for their own accounts without a stated
commission, although the price of the security usually includes a profit to the
dealer.

An affiliated broker may be employed to execute brokerage transactions on behalf
of the portfolios, as long as the commissions are reasonable and fair compared
to the commissions received by other brokers in connection with comparable
transactions involving similar securities being purchased or sold on a
securities exchange during a comparable period of time. The Series Fund may not
engage in any transactions in which The Prudential or its affiliates, including
The Prudential Securities Incorporated, acts as principal, including
over-the-counter purchases and negotiated trades in which such a party acts as a
principal. Additional information about portfolio brokerage and related
transactions is in the Statement of Additional Information.

STATE REGULATION

Pruco Life is subject to regulation and supervision by the Department of
Insurance of the State of Arizona, which periodically examines its operations
and financial condition. It is also subject to the insurance laws and
regulations of all jurisdictions in which it is authorized to do business.

Pruco Life is required to submit annual statements of its operations, including
financial statements, to the insurance departments of the various jurisdictions
in which it does business to determine solvency and compliance with local
insurance laws and regulations.

In addition to the annual statements referred to above, Pruco Life is required
to file with Arizona and other jurisdictions a separate statement with respect
to the operations of all its variable contract accounts, in a form promulgated
by the National Association of Insurance Commissioners.

EXPERTS

The financial statements included in this prospectus have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their reports
appearing herein, and are included in reliance upon the reports of such firm
given upon their authority as experts in accounting and auditing. Deloitte &
Touche LLP's principal business address is Two Hilton Court, Parsippany, New
Jersey 07054-0319. Actuarial matters included in this prospectus have been
examined by Nancy D. Davis, FSA, MAAA, whose opinion is filed as an exhibit to
the registration statement.

LITIGATION

No litigation is pending that would have a material effect upon the Account or
the Series Fund.

EXPANDED TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION

Included in the registration statements for the Contracts and the Series Fund is
a Statement of Additional Information which is available without charge by
writing to Pruco Life at 213 Washington Street, Newark, New Jersey 07102-2992.
The following table of contents of that Statement provides a brief summary of
what is included in each section.

I. MORE DETAILED INFORMATION ABOUT THE CONTRACT.

Sales Load Upon Surrender. A description is given of exactly how Pruco
Life determines the amount of the part of the sales load that is imposed
only upon surrenders or withdrawals during the first 10 Contract years.

Reduction of Charges for Concurrent Sales to Several Individuals. Where
the Contract is sold at the same time to several individuals who are
members of an associated class and Pruco Life's expenses will be
reduced, some of the charges under those Contracts may be reduced.

Paying Premiums by Payroll Deduction. Your employer may pay monthly
premiums for you with deductions from your salary.

23
<PAGE>

Unisex Premiums and Benefits. In some states and under certain
circumstances, premiums and benefits will not vary with the sex of the
insured.

How the Death Benefit Will Vary. A description is given of exactly how
the death benefit may increase to satisfy Internal Revenue Code
requirements.

Withdrawal of Excess Cash Surrender Value. If the Contract Fund value is
high enough you may be able to withdraw part of the cash surrender value
while keeping the Contract in effect. There will be a transaction
charge. The death benefit will change. There may be tax consequences.
You should consult your Pruco Life representative to discuss whether a
withdrawal or a loan is preferable.

Tax Treatment of Contract Benefits. A fuller account is provided of
how Contract owners may be affected by federal income taxes.

Sale of the Contract and Sales Commissions. The Contract is sold
primarily by agents of The Prudential who are also registered
representatives of one of its subsidiaries, Pruco Securities
Corporation, a broker and dealer registered under the Securities and
Exchange Act of 1934. Generally, selling agents receive a commission of
50% of the Scheduled Premium in the first year, 10% for the next three
years and smaller commissions thereafter.

Riders. Various extra fixed-benefits may be obtained for an extra
premium. They are described in what are known as "riders" to the
Contract.

Other Standard Contract Provisions. The Contract contains several
provisions commonly included in all life insurance policies. They
include provisions relating to beneficiaries, misstatement of age or
sex, suicide, assignment, incontestability, and settlement options.

II. INVESTMENT OBJECTIVES AND POLICIES OF THE PORTFOLIOS.

General
Convertible Securities
Warrants
Options and Futures
When-Issued and Delayed Delivery Securities
Short Sales
Short Sales Against the Box
Interest Rate Swaps
Loans of Portfolio Securities
Illiquid Securities
Forward Foreign Currency Exchange Contracts

A more detailed description is given of these investments and the
policies of these portfolios.

III. INVESTMENT RESTRICTIONS.

There are many restrictions upon the investments the portfolios may make
and the practices in which they may engage; these are fundamental,
meaning they may not be changed without Contract owner approval.

IV. INVESTMENT MANAGEMENT ARRANGEMENTS AND EXPENSES.

A fuller description than that in the prospectus is given.

V. PORTFOLIO TRANSACTIONS AND BROKERAGE.

A description is given of how securities transactions are effected and
how The Prudential selects the brokers.

VI. DETERMINATION OF NET ASSET VALUE.

A full description is given of how the daily net asset value of each
portfolio is determined.

VII. SECURITIES IN WHICH THE MONEY MARKET PORTFOLIO MAY CURRENTLY INVEST.

A full description is given.

VIII. DEBT RATINGS.

A description is given of how Moody's Investors Services, Inc. and
Standard & Poor's Corporation describe the creditworthiness of debt
securities.

24
<PAGE>

IX. POSSIBLE REPLACEMENT OF THE SERIES FUND.

Although it is most unlikely, it is conceivable that Pruco Life might
wish to replace the Series Fund portfolios with other investment
options. SEC approval will be needed.

X. OTHER INFORMATION CONCERNING THE SERIES FUND.

Incorporation and Authorized Stock
Dividends, Distributions and Taxes
Custodian and Transfer Agent
Experts
License

More detail is provided about these matters.

XI. DIRECTORS AND OFFICERS OF PRUCO LIFE AND MANAGEMENT OF
THE SERIES FUND.

The names and recent affiliations of Pruco Life's directors and
executive officers are given. The same information is given for the
Series Fund.

XII. FINANCIAL STATEMENTS OF THE PRUDENTIAL SERIES FUND, INC.

XIII. THE PRUDENTIAL SERIES FUND, INC. SCHEDULE OF INVESTMENTS.

ADDITIONAL INFORMATION

A registration statement has been filed with the SEC under the Securities Act of
1933, relating to the offering described in this prospectus. This prospectus and
the Statement of Additional Information do not include all of the information
set forth in the registration statement. Certain portions have been omitted
pursuant to the rules and regulations of the SEC. The omitted information may,
however, be obtained from the SEC's principal office in Washington, D.C., upon
payment of a prescribed fee.

Further information may also be obtained from Pruco Life. Its address and
telephone number are on the cover of this prospectus.

FINANCIAL STATEMENTS

The financial statements of the Account should be distinguished from the
consolidated financial statements of Pruco Life which should be considered only
as bearing upon the ability of Pruco Life to meet its obligations under the
Contracts. The financial statements of the Series Fund are in the Statement of
Additional Information.

25
<PAGE>

FINANCIAL STATEMENTS OF
PRUCO LIFE PRUvider VARIABLE APPRECIABLE ACCOUNT

STATEMENTS OF NET ASSETS

December 31, 1994

<TABLE>
<CAPTION>
SUBACCOUNTS
------------------------------

AGGRESSIVELY CONSERVATIVELY
MANAGED MANAGED
TOTAL FLEXIBLE FLEXIBLE
-------------- -------------- --------------
<S> <C> <C> <C>
ASSETS
Investment in shares of The Prudential Series
Fund, Inc.
Portfolios at net asset value [Note 2]........ $ 87,858,560 $ 38,633,529 $ 49,225,031
-------------- -------------- --------------
LIABILITIES
Payable to Related Separate Account............. 337,089 0 337,089
-------------- -------------- --------------
NET ASSETS........................................ $ 87,521,471 $ 38,633,529 $ 48,887,942
-------------- -------------- --------------
-------------- -------------- --------------
NET ASSETS, representing:
Equity of Contract owners....................... $ 85,745,930 $ 37,774,804 $ 47,971,126
Equity of Pruco Life Insurance Company.......... 1,775,541 858,725 916,816
-------------- -------------- --------------
$ 87,521,471 $ 38,633,529 $ 48,887,942
-------------- -------------- --------------
-------------- -------------- --------------
</TABLE>

STATEMENTS OF OPERATIONS

For the year ended December 31, 1994

<TABLE>
<CAPTION>
SUBACCOUNTS
------------------------------

AGGRESSIVELY CONSERVATIVELY
MANAGED MANAGED
TOTAL FLEXIBLE FLEXIBLE
-------------- -------------- --------------
<S> <C> <C> <C>
INVESTMENT INCOME
Dividend distributions received................. $ 2,445,440 $ 942,724 $ 1,502,716

EXPENSES
Charges to Contract owners for assuming
mortality risk and expense risk [Note 3A]..... 576,113 251,732 324,381
-------------- -------------- --------------
NET INVESTMENT INCOME............................. 1,869,327 690,992 1,178,335
-------------- -------------- --------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Capital gains distributions received............ 1,439,356 951,248 488,108
Realized loss on shares redeemed
[average cost basis].......................... (2,077) (1,569) (508)
Net unrealized loss on investments.............. (4,745,569) (2,528,354) (2,217,215)
-------------- -------------- --------------
NET LOSS ON INVESTMENTS........................... (3,308,290) (1,578,675) (1,729,615)
-------------- -------------- --------------
NET DECREASE IN NET ASSETS
RESULTING FROM OPERATIONS....................... $ (1,438,963) $ (887,683) $ (551,280)
-------------- -------------- --------------
-------------- -------------- --------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS ON PAGE A3.
A1

<PAGE>

FINANCIAL STATEMENTS OF
PRUCO LIFE PRUVIDER VARIABLE APPRECIABLE ACCOUNT

STATEMENTS OF CHANGES IN NET ASSETS

For the years ended December 31, 1994 and 1993

<TABLE>
<CAPTION>
SUBACCOUNTS
------------------------------------------------------------------------------

AGGRESSIVELY CONSERVATIVELY
MANAGED MANAGED
TOTAL FLEXIBLE FLEXIBLE
------------------------------ ------------------------------ ------------------------------
1994 1993 1994 1993 1994 1993
-------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>

OPERATIONS:
Net investment income............ $ 1,869,327 $ 564,708 $ 690,992 $ 255,767 $ 1,178,335 $ 308,941
Capital gains distributions
received....................... 1,439,356 1,502,084 951,248 776,668 488,108 725,416
Realized gain (loss) on shares
redeemed
[average cost basis]........... (2,077) 1,490 (1,569) 55 (508) 1,435
Net unrealized loss on
investments.................... (4,745,569) (776,739) (2,528,354) (355,699) (2,217,215) (421,040)
-------------- -------------- -------------- -------------- -------------- --------------

NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM OPERATIONS........ (1,438,963) 1,291,543 (887,683) 676,791 (551,280) 614,752
-------------- -------------- -------------- -------------- -------------- --------------

NET INCREASE IN NET ASSETS
RESULTING FROM PREMIUM PAYMENTS
AND OTHER OPERATING TRANSFERS.... 48,924,502 36,912,827 21,856,622 16,111,519 27,067,880 20,801,308
-------------- -------------- -------------- -------------- -------------- --------------

NET INCREASE IN NET ASSETS
RESULTING FROM SURPLUS
TRANSFERS........................ 638,522 1,139,174 327,110 536,120 311,412 603,054
-------------- -------------- -------------- -------------- -------------- --------------

TOTAL INCREASE IN NET ASSETS....... 48,124,061 39,343,544 21,296,049 17,324,430 26,828,012 22,019,114

NET ASSETS:
Beginning of year................ 39,397,410 53,866 17,337,480 13,050 22,059,930 40,816
-------------- -------------- -------------- -------------- -------------- --------------
End of year...................... $ 87,521,471 $ 39,397,410 $ 38,633,529 $ 17,337,480 $ 48,887,942 $ 22,059,930
-------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- --------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS ON PAGE A3.
A2

<PAGE>

NOTES TO FINANCIAL STATEMENTS OF
PRUCO LIFE PRUVIDER VARIABLE APPRECIABLE ACCOUNT
FOR THE YEARS ENDED DECEMBER 31, 1994 AND DECEMBER 31, 1993

NOTE 1: GENERAL

Pruco Life PRUvider Variable Appreciable Account (the "Account") was established
on July 10, 1992 under Arizona law as a separate investment account of Pruco
Life Insurance Company ("Pruco Life") which is a wholly-owned subsidiary of The
Prudential Insurance Company of America ("The Prudential"). The assets of the
Account are segregated from Pruco Life's other assets.

The Account is registered under the Investment Company Act of 1940, as amended,
as a unit investment trust. There are two subaccounts within the Account, each
of which invests only in a corresponding portfolio of The Prudential Series
Fund, Inc. (the "Series Fund"). The Series Fund is a diversified open-end
management investment company, and is managed by The Prudential.

NOTE 2: INVESTMENT INFORMATION FOR THE PRUDENTIAL SERIES FUND, INC. PORTFOLIOS

The net asset value per share for each portfolio of the Series Fund, the number
of shares of each portfolio held by the subaccounts of the Account and the
aggregate cost of investments in such shares at December 31, 1994 were as
follows:

<TABLE>
<CAPTION>
PORTFOLIOS
-------------------------------
AGGRESSIVELY CONSERVATIVELY
PORTFOLIO MANAGED MANAGED
INFORMATION FLEXIBLE FLEXIBLE
- ------------------------------- -------------- ---------------
<S> <C> <C>
Number of shares: 2,493,128 3,492,385
Net asset value per share: $ 15.4960 $ 14.0950
Cost: $ 41,517,592 $ 51,863,286
</TABLE>

NOTE 3: CHARGES AND EXPENSES

A. Mortality Risk and Expense Risk Charges

The mortality risk and expense risk charges at an effective annual rate of
0.90% are applied daily against the net assets representing equity of
Contract owners held in each subaccount.

B. Deferred Sales Charge

A deferred sales charge is imposed upon the surrender of certain variable
life insurance contracts to compensate Pruco Life for sales and other
marketing expenses. The amount of any sales charge will depend on the number
of years that have elapsed since the Contract was issued. No sales charge
will be imposed after the tenth year of the Contract. No sales charge will
be imposed on death benefits.

C. Partial Withdrawal Charge

The partial withdrawal of the cash surrender value from certain variable
life insurance contracts invokes a charge of $15.

NOTE 4: TAXES

The operations of the subaccounts form a part of, and are taxed with, the
operations of Pruco Life. Under the Internal Revenue Code, all ordinary income
and capital gains allocated to the Contract owners are not taxed to Pruco Life.
As a result, the net asset values of the subaccounts are not affected by federal
income taxes on distributions received by the subaccounts.

NOTE 5: NET INCREASE IN NET ASSETS RESULTING FROM SURPLUS TRANSFERS

The increase in net assets resulting from surplus transfers represents the net
contributions of Pruco Life to the Account.

<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Contract Owners of
Pruco Life PRUvider Variable Appreciable
Account and the Board of Directors
of Pruco Life Insurance Company
Newark, New Jersey

We have audited the accompanying statements of net assets of Pruco Life PRUvider
Variable Appreciable Account of Pruco Life Insurance Company (comprising,
respectively, the Aggressively Managed Flexible and Conservatively Managed
Flexible subaccounts) as of December 31, 1994, and the related statements of
operations for the periods presented in the year then ended, and the statement
of changes in net assets for each of the periods presented in the two years then
ended. 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 in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 1994. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of each of the respective subaccounts
constituting the Pruco Life PRUvider Variable Appreciable Account as of December
31, 1994, and the results of their operations, and the changes in their net
assets for the respective stated periods in conformity with generally accepted
accounting principles.

Deloitte & Touche LLP
Parsippany, New Jersey
February 10, 1995

<PAGE>

CONSOLIDATED FINANCIAL STATEMENTS OF
PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

DECEMBER 31,
----------------------
1994 1993
---------- ----------
($000's)
ASSETS
Fixed maturities (market value
$2,596,172 and $2,951,602)........ $2,647,315 $2,835,251
Equity securities (cost $5,434 and
$4,405)........................... 3,326 2,788
Mortgage loans...................... 71,919 56,184
Investment in real estate........... 7,189 9,994
Policy loans........................ 493,862 420,271
Other long-term investments......... 4,044 2,753
Short-term investments.............. 191,455 201,079
---------- ----------
Total Investments................. 3,419,110 3,528,320
Cash................................ 27,780 671
Notes receivable from affiliates.... - 50,000
Interest receivable from
affiliates........................ - 23
Accrued investment income........... 59,382 56,785
Premiums due and deferred........... 16,821 16,569
Receivable from affiliates.......... 7,517 6,880
Federal income taxes--from
affiliate......................... 23,306 4,151
Other assets........................ 25,102 15,829
Assets held in Separate Accounts.... 3,511,784 3,492,876
---------- ----------
TOTAL ASSETS.......................... $7,090,802 $7,172,104
========== ==========

LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES:
Policy liabilities and insurance
reserves:
Future policy benefits and
claims.......................... $2,767,552 $2,912,283
Other policy claims and benefits
payable......................... 15,184 13,606
Interest Maintenance Reserve (IMR) 21,802 46,506
Payable to affiliates............... 30,257 54,286
Other liabilities................... 131,695 103,985
Asset Valuation Reserve (AVR)....... 23,690 22,692
Liabilities related to Separate
Accounts.......................... 3,424,535 3,399,953
---------- ----------
Total Liabilities..................... 6,414,715 6,553,311
---------- ----------
STOCKHOLDER'S EQUITY:
Common Stock, $10 par value;
authorized, 1,000,000 shares;
issued and outstanding, 250,000
shares............................ 2,500 2,500
Paid-in capital..................... 439,582 439,582
Unassigned surplus.................. 234,005 176,711
---------- ----------
Total Stockholder's Equity............ 676,087 618,793
---------- ----------
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY................ $7,090,802 $7,172,104
========== ==========

CONSOLIDATED STATEMENTS OF OPERATIONS

Years Ended December 31,
----------------------------------
1994 1993 1992
---------- ---------- ----------
($000's)
REVENUE
Premiums and annuity
considerations......... $ 611,820 $ 563,900 $ 497,088
Net investment income.... 245,977 260,939 274,037
Net realized investment
gains/(losses) (21,215) 8,878 28,117
Other income............. 13,259 18,882 16,043
---------- ---------- ----------
Total Revenue.............. 849,841 852,599 815,285
---------- ---------- ----------
BENEFITS AND EXPENSES
Current and future
benefits and claims.... 559,658 534,354 478,148
Commission expenses...... 30,169 28,386 17,956
General, administrative
and other expenses..... 119,309 129,171 111,745
---------- ---------- ----------
Total Benefits and
Expenses................. 709,136 691,911 607,849
---------- ---------- ----------
Income before provision
in lieu of federal
income tax............. 140,705 160,688 207,436
Provision in lieu of
federal income tax..... (87,750) (83,640) (96,578)
---------- ---------- ----------
NET INCOME................. $ 52,955 $ 77,048 $ 110,858
========== ========== ==========

SEE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

<PAGE>

CONSOLIDATED FINANCIAL STATEMENTS OF
PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY

Years Ended December 31,
-------------------------------
1994 1993 1992
--------- --------- ---------
($000's)
COMMON STOCK
Balance, beginning of
year................... $ 2,500 $ 2,500 $ 2,500
Issued during year....... - - -
--------- --------- ---------
Balance, end of year..... 2,500 2,500 2,500
--------- --------- ---------
Paid-in Capital
Balance, beginning of
year................... 439,582 439,582 439,582
Paid-in during year...... - - -
--------- --------- ---------
Balance, end of year..... 439,582 439,582 439,582
--------- --------- ---------
Unassigned Surplus
Balance, beginning of
year................... 176,711 162,530 98,966
Net income............... 52,955 77,048 110,858
Net unrealized investment
gains/(losses)......... 5,814 (9,351) 2,750
(Increase) decrease in
non-admitted assets.... (477) 575 130
(Increase) decrease in
AVR.................... (998) 5,909 3,681
Dividends to
stockholder............ - (60,000) (53,855)
--------- --------- ---------
Balance, end of year..... 234,005 176,711 162,530
--------- --------- ---------

TOTAL STOCKHOLDER'S
EQUITY..................... $ 676,087 $ 618,793 $ 604,612
========= ========= =========

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years Ended December 31,
-------------------------------------
1994 1993 1992
----------- ----------- -----------
($000's)
CASH FLOW FROM OPERATING ACTIVITIES
Net income................ $ 52,955 $ 77,048 $ 110,858
Adjustments to reconcile
net income to net cash
from operations:
Increase (decrease) in
policy liabilities and
insurance reserves.... (143,153) (124,602) 95,927
Net decrease in Separate
Accounts.............. 5,674 12,173 4,531
Net realized
investment(gains)/
losses................ 21,215 (8,878) (28,117)
Depreciation,
amortization and other
non-cash items........ 314 1,907 (1,810)
(Increase) decrease in
operating assets:
Policy loans.......... (73,591) (71,472) (86,306)
Notes receivable from
affiliates.......... 50,000 9,000 4,000
Interest receivable
from affiliates..... 23 420 361
Accrued investment
income.............. (2,597) 880 (45)
Premiums due and
deferred............ (252) (880) 47,374
Receivable from
affiliates.......... (637) 1,970 10,818
Federal income
taxes--from
affiliate........... (19,155) 6,879 (11,030)
Other assets.......... (9,273) (9,481) (3,476)
Increase (decrease) in
operating liabilities:
Payable to
affiliates............ (24,029) 13,260 (53,063)
Federal income
taxes--to
affiliate........... - - (497)
Other liabilities..... 27,710 34,632 (50,303)
----------- ----------- -----------

Cash Flow From (Used For)
Operating Activities...... (114,796) (57,144) 39,222
----------- ----------- -----------

CASH FLOW FROM INVESTING
ACTIVITIES
Proceeds from the sale/
maturity of:
Fixed maturities........ 2,710,424 1,687,992 3,898,399
Equity securities....... 1,909 4,032 1,791
Mortgage loans.......... 10,821 21,691 954
Other long-term
investments........... 607 520 -
Investment in real
estate................ 8,676 - -
Payments for the purchase
of:
Fixed maturities........ (2,561,081) (1,483,234) (3,986,331)
Equity securities....... (2,436) (3,068) (1,170)
Mortgage loans.......... (35,276) (918) -
Other long-term
investments........... (1,584) (84) (860)
Investment in real
estate................ - (20) (71)
Net proceeds (payments)
of short-term
investments........... 9,845 (116,735) 108,858
----------- ----------- -----------
Cash Flow From Investing
Activities................ 141,905 110,176 21,570
----------- ----------- -----------

CASH FLOW FROM FINANCING ACTIVITIES
Dividends paid............ - (60,000) (53,855)
----------- ----------- -----------
Net increase (decrease) in
Cash.................... 27,109 (6,968) 6,937
Cash, beginning of year... 671 7,639 702
----------- ----------- -----------
CASH, END OF YEAR........... $ 27,780 $ 671 $ 7,639
=========== =========== ===========

SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION
Non-cash financing:
Investment in real
estate from foreclosed
mortgage loans.......... $ 4,139 $ 7,300 $ 6,338
=========== =========== ===========
Cash paid in lieu of
income taxes............ $ 73,903 $ 76,760 $ 108,105
=========== =========== ===========

SEE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

<PAGE>

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF
PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES
For the Years Ended December 31, 1994, 1993, and 1992

1. Summary of Significant Accounting Policies and Principles

A. Principles of Consolidation

The accompanying financial statements include the consolidated accounts of
Pruco Life Insurance Company (Pruco Life), a stock life insurance company,
and its subsidiaries (collectively, the Company). Pruco Life is a
wholly-owned subsidiary of The Prudential Insurance Company of America
(The Prudential), a mutual life insurance company. The Company markets
individual life insurance and single pay deferred annuities primarily
through The Prudential's sales force. All significant intercompany
balances and transactions have been eliminated in consolidation.

B. Basis of Presentation

The financial statements are presented in conformity with Generally
Accepted Accounting Principles (GAAP), which for mutual life insurance
companies and their life insurance subsidiaries are statutory accounting
practices prescribed or permitted by state regulatory authorities in the
domiciliary states. Certain reclassifications have been made to the 1992
and 1993 financial statements and footnotes to conform to the 1994
presentation. Included in the Statement of Operations are certain items
which, under statutory accounting practices, are charged or credited
directly to surplus.

In 1994, The American Institute of Certified Public Accountants issued
Statement of Position 94-5 "Disclosures of Certain Matters in the
Financial Statements of Insurance Enterprises" ("SOP 94-5") which requires
insurance enterprises to disclose in their financial statements the
accounting methods used in their statutory financial statements that are
permitted by the state insurance departments rather than prescribed
statutory accounting practices.

Pruco Life Insurance Company, domiciled in the State of Arizona, prepares
its statutory financial statements in accordance with accounting practices
prescribed or permitted by the Arizona Department of Insurance ("the
Department"), and its insurance subsidiaries prepare statutory financial
statements in accordance with accounting practices prescribed or permitted
by their domiciliary home state insurance department. Prescribed statutory
accounting practices include publications of the National Association of
Insurance Commissioners (NAIC), state laws, regulations, and general
administrative rules. Permitted statutory accounting practices encompass
all accounting practices not so prescribed.

The Company has established guaranty fund liabilities for the insolvencies
of certain life insurance companies. The liabilities were established net
of premium tax credits and federal income tax. Prescribed statutory
accounting practices do not address the establishment of liabilities for
guaranty fund assessments.

The Company, with permission from the Department, prepares an Annual
Report that differs from the Annual Statement filed with the Department in
that subsidiaries are consolidated and certain financial statement
captions are presented differently.

<PAGE>

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF
PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES
For the Years Ended December 31, 1994, 1993, and 1992

The following is a reconciliation of Pruco Life's statutory net income
with net income per the consolidated financial statements.

<TABLE>
<CAPTION>
Years Ended December 31,
-------------------------------
1994 1993 1992
--------- --------- ---------
($000's)
<S> <C> <C> <C>
Pruco Life Statutory Net Income including net gains
and losses on sales of investments................ $ 49,374 $ 79,405 $ 126,507
Adjustments to reconcile to net income as follows:
Dividends from subsidiary......................... - (26,000) (27,162)
Change in determination of deferred premiums...... - - (12,495)
Provision for future assessments.................. 349 577 (3,493)
Net gain from operations in Separate Accounts..... 7,508 5,572 2,563
Income tax applicable to other than current
year............................................ (25,467) - -
Other............................................. 7,684 (2,429) 1,459
Subsidiaries' Net Income.......................... 13,507 19,923 23,479
--------- --------- ---------
Net Income.......................................... $ 52,955 $ 77,048 $ 110,858
========= ========= =========
</TABLE>

C. Future Application of Accounting Standards

The Financial Accounting Standards Board (the "FASB") issued Financial
Interpretation No. 40, "Applicability of Generally Accepted Accounting
Principles to Mutual Life Insurance and Other Enterprises", which, as
amended is effective for fiscal years beginning after December 15, 1995.
Interpretation No. 40 changes the current practice of the Company with
respect to utilizing statutory basis financial statements for general
purposes in that it would not allow such financial statements to be
referred to as having been prepared in accordance with GAAP.
Interpretation No. 40 requires GAAP financial statements to apply all GAAP
pronouncements, unless specifically exempted. Implementation of the
Interpretation will require significant effort and judgment as to
determining GAAP for insurance operations.

The Company is currently unable to determine the impact of Interpretation
No. 40 on its financial statements.

<PAGE>

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF
PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES
For the Years Ended December 31, 1994, 1993, and 1992

D. Selected Financial Data of Pruco Life

Pruco Life markets the Future Value Annuity Contract, an individual
deferred annuity contract. Only assets of Pruco Life, shown below, are
available to meet the guarantees under this annuity contract. The
following is the selected financial data of Pruco Life:

<TABLE>
<CAPTION>
December 31,
----------------------
1994 1993
---------- ----------
($000')
<S> <C> <C>
Assets:
Investments................................................. $2,758,088 $2,835,163
Investment in subsidiaries.................................. 169,816 156,515
Other assets................................................ 135,778 133,020
Assets held in Separate Accounts.............................. 2,869,734 2,846,792
---------- ----------
Total Assets.................................................. $5,933,416 $5,971,490
========== ==========
Liabilities:
Policy liabilities and insurance reserves................... $2,296,987 $2,417,098
Other liabilities........................................... 163,322 165,974
Liabilities related to Separate Accounts 2,797,020 2,769,625
---------- ----------
Total Liabilities........................................... $5,257,329 $5,352,697
========== ==========
</TABLE>

Years Ended December 31,
-------------------------------
1994 1993 1992
--------- --------- ---------
($000')

Revenues...................................... $ 698,685 $ 716,402 $ 675,863
--------- --------- ---------
Benefits, expenses and taxes.................. 659,237 633,277 561,322
--------- --------- ---------
Net Income.................................... $ 39,448 $ 83,125 $ 114,541
========= ========= =========

E. Investments

Fixed maturities, which include long-term bonds and redeemable preferred
stock, are stated primarily at amortized cost. Certain investments in this
category were non-income producing at December 31, 1994 and 1993. These
investments amounted to $13.2 million and $2 million, respectively. Equity
securities, which consist primarily of common stock, are carried at market
value which is based on quoted market prices, where available, or prices
provided by the National Association of Insurance Commissioners' (NAIC)
Securities Valuation Office (SVO).

Mortgage loans are carried at the lower of the fair value of the
underlying property or unpaid principal balance. At December 31, 1994, one
loan was in foreclosure in the amount of $6 million. At December 31, 1993,
aside from one loan in foreclosure, one mortgage, in the amount of $3
million, was in default.

Policy loans are stated primarily at unpaid principal balances.

All the Company's real estate investments were acquired through
foreclosure during 1994 and 1993. These properties are carried at the
lower of cost or fair value less disposition costs. Fair value is
considered to be the amount that could reasonably be expected in a current
transaction between willing parties, other than in forced or liquidation
sale. Depreciation on these properties for the years ended December 31,
1994 and 1993 was $456 thousand and $289 thousand, respectively.

Other long-term investments, which consist solely of limited partnerships,
are valued at the aggregate net equity in the partnerships. There were no
non-income producing investments in this category at December 31, 1994.
Certain investments in this category were non-income producing at December
31, 1993. These investments amounted to $118 thousand.

Short-term investments are stated at amortized cost, which approximates
fair value.

<PAGE>

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF
PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES
For the Years Ended December 31, 1994, 1993, and 1992

Realized investment gains and losses are reported based on specific
identification of the investments sold.

F. Future Policy Benefits, Losses and Claims

Reserves for individual life insurance are calculated using various
methods, interest rates and mortality tables which produce reserves that
meet the aggregate requirements of state laws and regulations.
Approximately 7% of individual life insurance reserves are determined
using the net level premium method, or by using the greater of a net level
premium reserve or the policy cash value. About 93% of individual life
insurance reserves are calculated according to the Commissioner's Reserve
Valuation Method ("CRVM"), or methods which compare CRVM reserves to
policy cash values.

Reserves for individual annuity contracts are determined using the
Commissioner's Annuity Reserve Valuation Method.

For life insurance, unpaid claims include estimates of both the death
benefits on reported claims and those which are incurred but not reported.

G. Revenue Recognition and Related Expenses

Premium revenues are recognized as income over the premium paying period
of the related policies. Annuity considerations are recognized as revenue
when received. Expenses, including new business acquisition costs such as
commissions, are charged to operations as incurred.

H. Asset Valuation Reserve and Interest Maintenance Reserve

The Asset Valuation Reserve (AVR) and the Interest Maintenance Reserve
(IMR) are required reserves for assets of life insurance companies. AVR is
calculated based on a statutory formula and designed to mitigate the
effect of valuation and credit related losses on unassigned surplus.

The components of AVR at December 31, 1994 and 1993 are as follows:

<TABLE>
<CAPTION>
Fixed Equity Real Estate
Maturities Mortgages Securities & Other Inv. Total
----------- ----------- ----------- ------------ ---------
($000's)
<S> <C> <C> <C> <C> <C>
Transfer from December 31, 1992 --
AVR ............................... $23,152 $5,139 $310 $ 0 $28,601
Additions ........................... 7,197 0 650 2,353 10,200
Deductions .......................... (12,055) (1,440) (261) (2,353) (16,109)
------- ------ ---- ------ -------
End of Year 1993 -- AVR ............. 18,294 3,699 699 0 22,692
======= ====== ==== ====== =======
Beginning of Year 1994 -- AVR ....... 18,294 3,699 699 0 22,692
Additions ........................... 12,062 2,166 348 2,047 16,623
Deductions .......................... (10,454) (4,355) (314) (502) (15,625)
------- ------ ---- ------ -------
End of Year 1994 -- AVR ............. $19,902 $1,510 $733 $1,545 $23,690
======= ====== ==== ====== =======
</TABLE>

The IMR is designed to reduce the fluctuations of surplus resulting from
market interest rate movements. Predominantly all interest rate related
realized capital gains and losses are deferred and amortized into
investment income over the remaining life of the investment sold. The IMR
balance was $21.8 million and $46.5 million at December 31, 1994 and 1993,
respectively. "Net realized investment gains/(losses)" of $(19.9) million
and $19.2 million were deferred in 1994 and 1993, respectively. Amortized
into "Net investment income" were $4.8 million and $6.7 million of IMR for
the year ended December 31, 1994 and 1993, respectively.

I. Federal Income Taxes

The Company is a member of a group of affiliated companies which join in
filing a consolidated federal tax return. Pursuant to a tax allocation
agreement, current tax liabilities are determined for individual companies
based upon their separate return basis taxable income. Members with
taxable income incur an amount in lieu of the separate return basis
federal tax. Members with a loss for tax purposes recognize a current
benefit in proportion to the amount of their losses utilized in computing
consolidated taxable income. Differences

<PAGE>

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF
PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES
For the Years Ended December 31, 1994, 1993, and 1992

between estimated liabilities and actual payments are included in the
current year's operations as an adjustment to the provision in lieu of
income taxes. For the years 1993 and 1992, the Company was allocated a
portion of the consolidated income tax liability attributable to Section
809 of the Internal Revenue Code (commonly referred to as "Equity Tax").
Beginning in 1994, the Company will no longer be allocated this Equity
Tax.

Taxes on the Company are calculated under the Internal Revenue Code of
1986 which provides that life insurance companies be taxed on their gain
from operations after dividends to policyholders. In calculating this tax,
the Code requires the capitalization and amortization of policy
acquisition expenses.

J. Separate Accounts

Separate accounts represent funds for which investment income and
investment gains and losses accrue directly to, and investment risk is
borne by, the policyholders. Each account has specific investment
objectives. Assets are carried at market value. Deposits to such accounts
are included in revenues with a corresponding liability increase included
in benefits and expenses. The assets of each account are legally
segregated and are not subject to claims that arise out of any other
business of the Company. Consequently, management believes that it is
appropriate to combine Separate Account policyholder net investment income
and net realized and unrealized capital gains/(losses) along with benefit
payments and change in reserves in "Current and future benefits and
claims". Policyholder net investment income and net realized and
unrealized gains/(losses) for the years ended December 31, 1994, 1993 and
1992 were ($28) million, $443 million and $223 million, respectively.

2. Federal Income Taxes

The following is a reconciliation of the Company's federal tax provision as
computed at the federal tax rate with that computed at the Company's
effective tax rate. The below amounts include federal income tax applicable
to prior years, where appropriate.

<TABLE>
<CAPTION>
Years Ended December 31,
-------------------------------
1994 1993 1992
--------- --------- ---------
($000's)
<S> <C> <C> <C>

Operating income before federal income taxes.......... $ 140,705 $ 160,688 $ 207,436
Statutory tax rate.................................... 35% 35% 34%
--------- --------- ---------
Expected federal income taxes......................... 49,247 56,241 70,528
Tax effect of:
Statutory/tax policy reserve difference............. 19,949 14,577 (16,381)
Timing differences in tax/book income recognition on
investments....................................... 11,608 4,055 14,404
Timing differences in tax/book income recogni-
tion--other....................................... (6,816) (415) 921
Change in determination of deferred premiums........ - - 6,128
Decrease/(Increase) in life insurance premiums
deferred and uncollected.......................... (88) (308) 2,650
Capitalization of policy acquisition expenses....... 13,850 7,374 8,158
Allocated equity tax................................ - 2,116 10,170
--------- --------- ---------
Federal income taxes.................................. $ 87,750 $ 83,640 $ 96,578
========= ========= =========
Effective tax rate.................................... 62% 52% 47%
========= ========= =========
</TABLE>

<PAGE>

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF
PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES
For the Years Ended December 31, 1994, 1993, and 1992

3. Net Investment Income

Net investment income consisted of:
<TABLE>
<CAPTION>
Years Ended December 31,
-------------------------------
1994 1993 1992
--------- --------- ---------
($000's)
<S> <C> <C> <C>
Gross investment income
Fixed maturities.................................... $ 196,909 $ 216,660 $ 237,884
Equity securities................................... 14 22 14
Mortgage loans...................................... 4,041 6,359 7,529
Investment in real estate........................... 2,146 2,066 1,258
Policy loans........................................ 25,692 21,741 17,437
Short-term investments.............................. 12,676 9,031 11,638
Other............................................... 5,075 3,945 2,681
--------- --------- ---------
246,553 259,824 278,441

Investment expenses................................... (5,421) (5,570) (7,687)
--------- --------- ---------
Net investment income before IMR...................... 241,132 254,254 270,754

Amortization of Interest Maintenance Reserve.......... 4,845 6,685 3,283
--------- --------- ---------
Net investment income................................. $ 245,977 $ 260,939 $ 274,037
========= ========= =========
</TABLE>

4. Investments and Investment Gains (Losses)

<TABLE>
<CAPTION>
Years Ended December 31,
-------------------------------
1994 1993 1992
--------- --------- ---------
($000's)
<S> <C> <C> <C>
Realized Gains (Losses)
Fixed maturities..................................... $ (38,180) $ 32,471 $ 69,559
Equity securities.................................... 503 607 967
Mortgage loans....................................... (4,581) (2,592) (3,889)
Investment in real estate............................ 1,184 (2,004) (1,757)
Other................................................ (1) (411) 517
Tax effected amounts transferred to Interest
Maintenance Reserve.................................. 19,860 (19,193) (37,280)
--------- --------- ---------
Net realized investment gains.......................... $ (21,215) $ 8,878 $ 28,117
========= ========= =========
Unrealized Gains (Losses)
Fixed maturities..................................... 5,430 (9,380) 3,637
Equity securities.................................... (490) 260 (1,305)
Other................................................ 874 (231) 418
--------- --------- ---------
Net unrealized investment gains (losses)............... 5,814 (9,351) 2,750
Balance beginning of year.............................. (18,166) (8,815) (11,565)
--------- --------- ---------
Balance end of year.................................... $ (12,352) $ (18,166) $ (8,815)
========= ========= =========
</TABLE>

B8
<PAGE>

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF
PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES
For the Years Ended December 31, 1994, 1993, and 1992

Equity Securities at December 31,
($000's)
Unrealized
--------------------------------
Cost Gains Losses
--------- --------- ----------
1994........................................ $5,434 $ 386 $2,494
1993........................................ 4,405 742 2,359
1992........................................ 4,762 1,093 2,969

Fixed Maturities
($000's)

At December 31,
Increase (Decrease)
in Difference
Between Market Value
Amortized Market and Amortized
Cost Value Cost During the Year
---------- ---------- ----------------------
1994........................... $2,647,315 $2,596,172 $(167,494)
1993........................... 2,835,251 2,951,602 10,453
1992........................... 3,025,030 3,130,928 (74,958)

The amortized cost and estimated market value of fixed maturities at December
31, 1994 and 1993 are as follows:

<TABLE>
<CAPTION>
1994
------------------------------------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
($000's) ($000's) ($000's) ($000's)
---------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
U.S. Treasury securities and obligations of
U.S. government corporations and agencies... $ 409,678 $ 224 $20,259 $ 389,643
Obligations of U.S. and political
subdivisions................................ - - - -
Debt securities issued by foreign governments
and their agencies.......................... 86,026 2,075 2,310 85,791
Corporate securities.......................... 1,960,296 17,005 43,521 1,933,780
Mortgage-backed securities.................... 191,315 1,429 5,786 186,958
---------- ------- ------- ----------
Total......................................... $2,647,315 $20,733 $71,876 $2,596,172
========== ======= ======= ==========

<CAPTION>
1993
------------------------------------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
($000's) ($000's) ($000's) ($000's)
---------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
U.S. Treasury securities and obligations of
U.S. government corporations and agencies... $ 374,797 $ 3,819 $ 638 $ 377,978
Obligations of U.S. and political
subdivisions................................ 3,705 1,106 - 4,811
Debt securities issued by foreign governments
and their agencies.......................... 99,524 6,632 3 106,153
Corporate securities.......................... 2,070,066 107,643 4,514 2,173,195
Mortgage-backed securities.................... 287,159 6,223 3,917 289,465
---------- -------- ------ ----------
Total......................................... $2,835,251 $125,423 $9,072 $2,951,602
========== ======== ====== ==========
</TABLE>

B9
<PAGE>

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF
PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES
For the Years Ended December 31, 1994, 1993, and 1992

The amortized cost and estimated market value of debt securities at December 31,
1994 by contractual maturity, are shown below. Expected maturities will differ
from contractual maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties.

<TABLE>
<CAPTION>
Estimated
Amortized Market
Cost Value
($000's) ($000's)
---------- ----------
<S> <C> <C>
Due in one year or less................................. $ 127,296 $ 130,795
Due after one year through five years.................. 1,823,406 1,794,674
Due after five years through ten years................. 402,232 384,814
Due after ten years.................................... 103,066 98,931
---------- ----------
2,456,000 2,409,214
Mortgage-backed securities............................. 191,315 186,958
---------- ----------
Total.................................................. $2,647,315 $2,596,172
========== ==========
</TABLE>

Proceeds from the sale/maturity of debt securities during 1994, 1993 and
1992 were $2.7 billion, $1.7 billion and $3.9 billion, respectively. Gross
gains of $16.8 million, $44.5 million and $90.4 million and gross losses
of $49.8 million, $12.0 million and $20.8 million were realized on those
sales during 1994, 1993, and 1992, respectively.

The Company invests in both investment grade and non-investment grade
securities. The SVO of the NAIC rates fixed maturities held by insurers
(SVO rated securities accounted for approximately 93.6% and 93.0% of the
Company's total fixed maturities balances at both December 31, 1994 and
1993) for regulatory purposes and groups investments into six categories
ranging from highest quality bonds to those in or near default. The lowest
three NAIC categories represent, for the most part, high-yield securities
and are defined by the NAIC as including any security with a public agency
rating of B+ or B1 or less.

Included in "fixed maturities" are securities that are classified by the
NAIC as being in the lowest three rating categories. These approximated
1.5% and 1.6% of the Company's assets at December 31, 1994 and 1993,
respectively. The amount by which the market value of these securities
exceeded the carrying value was approximately $(.9) million and 1.0
million at December 31, 1994 and 1993, respectively.

5. Related Party Transactions

A. Service Agreements

The Company, The Prudential, Pruco Life of New Jersey and Pruco Securities
Corporation, an indirect wholly-owned subsidiary of The Prudential,
operate under service and lease agreements whereby services of officers
and employees, supplies, use of equipment and office space are provided.
The net cost of these services allocated to the Company were $78 million,
$98 million, and $71 million for the years ended December 31, 1994, 1993,
and 1992, respectively.

In a reorganization of the parent's Individual Insurance Department,
effective January 1, 1993, the corporate staff of the Company was absorbed
by the parent. The costs associated with these employees, which were
previously borne by the Company, are now charged to the Company under the
service and lease agreements with the parent.

B. Employee Benefit Plans

Pension Plans

The Company is a wholly-owned subsidiary of The Prudential which sponsors
a defined benefit pension plan. The defined benefit pension plan is
generally based on career average earnings and credit length of service.
The Prudential's funding policy is to contribute annually the amount
necessary to satisfy the Internal Revenue Service contribution guidelines.

No pension expense for contributions to the plan was allocated to the
Company in 1994, 1993 or 1992 because the plan was subject to the full
funding limitation under the Internal Revenue Code.

B10
<PAGE>

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF
PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES
For the Years Ended December 31, 1994, 1993, and 1992

Postretirement Life and Health Benefits

The Prudential also sponsors postretirement defined benefit plans which
provide certain life insurance and health care benefits. Substantially all
employees may become eligible to receive a benefit if they retire after
age 55 with at least 10 years of service. Prior to 1993, The Prudential's
policy was to fund the cost of providing these benefits in the years that
the employees were providing services to the Company. Effective for 1993,
The Prudential has recognized the cost of these benefits in accordance
with the accounting policy issued by the National Association of Insurance
Commissioners (NAIC). The NAIC's policy is similar to SFAS No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions"
except that the NAIC policy excludes non-vested employees and only allows
the transition obligation to be recognized immediately or amortized over
twenty years. The Prudential has elected to amortize its transition
obligation over twenty years. A provision for contributions to the
postretirement fund is included in the net cost of services allocated to
the Company discussed above for the years ended December 31, 1994, 1993
and 1992.

C. Reinsurance

The Company currently has two reinsurance agreements in place with The
Prudential (the reinsurer). Specifically: reinsurance of a Group Annuity
Contract, whereby the reinsurer, in consideration for a single premium
payment by the Company, provides Reinsurance equal to 100% of all payments
due under the Contract; and, a Yearly Renewable Term agreement in which
the Company may offer and the reinsurer may accept reinsurance on any life
in excess of the Company's maximum limit of retention ($2.5 million).
These agreements had no material effect on net income for the years ended
December 1994, 1993, and 1992.

D. Other Transactions

A certificate of deposit issued by The Prudential Bank and Trust Company
of $50 million as of December 31, 1993 was not renewed in 1994. The
Company also received a $9 million payment settlement of a promissory note
from Pruco Inc. during 1993.

The Company has issued approximately 375 variable universal life contracts
to The Prudential for the purpose of funding non-qualified pension
benefits for certain employees. Included in insurance premiums and annuity
considerations for the years ended December 31, 1994, 1993 and 1992 are
respectively, $12 million, $12 million and $13 million, which are
attributable to these contracts.

6. Dividends

The Company is subject to Arizona law which limits the amount of dividends
that insurance companies can pay to stockholders. The maximum dividend which
may be paid in any 12 month period without notification or approval is
limited to the lesser of 10% of surplus as of December 31 of the preceding
year or the net gain from operations of the preceding calendar year. Cash
dividends may only be paid out of surplus derived from realized net profits.
Based on these limitations and the Company's surplus position at December 31,
1994, the Company would be permitted a maximum of $60 million in dividend
distributions in 1995, all of which could be paid in cash, without approval
from The State of Arizona Department of Insurance.

7. Fair Value Information

The fair value amounts have been determined by the Company using available
information and reasonable valuation methodologies for only those accounts
for which fair value disclosures are required. Considerable judgment is
necessarily applied in interpreting data to develop the estimates of fair
value. Accordingly, the estimates presented may not be realized in a current
market exchange. The use of different market assumptions and/or estimation
methodologies could have a material effect on the estimated fair values.

The following methods and assumptions were used in calculating the fair
values. For all other financial instruments presented in the table, the
carrying value is a reasonable estimate of fair value.

Fixed Maturities. Fair values for fixed maturities, other than private
placement securities, are based on quoted market prices or estimates from
independent pricing services. Fair values for private placement securities
are estimated using a discounted cash flow model which considers the current
market spreads between the U.S.

B11
<PAGE>

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF
PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES
For the Years Ended December 31, 1994, 1993, and 1992

Treasury yield curve and corporate bond yield curve adjusted for the type of
issue, its current quality and its remaining average life. The fair value of
certain non-performing private placement securities is based on amounts
provided by state regulatory authorities.

Mortgage Loans. The fair value of the commercial mortgage and agricultural
loan portfolio is primarily based upon the present value of the scheduled
cash flows discounted at the appropriate U.S. Treasury rate, adjusted for the
current market spread for a similar quality mortgage. For certain
non-performing and other loans, fair value is based upon the value of the
underlying collateral.

Policy Loans. The estimated fair value is calculated using a discounted cash
flow model based upon current U.S. Treasury rates and historical loan
repayments.

Investment-Type Insurance Contract Liabilities. Fair values for the Company's
investment-type insurance contract liabilities are estimated using a
discounted cash flow model, based on interest rates currently being offered
for similar contracts.

The following table discloses the carrying amounts and estimated fair values
of the Company's financial instruments at December 31, 1994 and 1993.

<TABLE>
<CAPTION>
1994 1993
---------------------- ----------------------
Carrying Fair Carrying Fair
Value Value Value Value
---------- ---------- ---------- ----------
($000's) ($000's)
<S> <C> <C> <C> <C>
Financial Assets:
Fixed maturities ........................ $2,647,315 $2,596,172 $2,835,251 $2,951,602
Equity securities ....................... 3,326 3,326 2,788 2,788
Mortgage loans .......................... 71,919 71,805 56,184 58,738
Policy loans ............................ 493,862 448,617 420,271 416,243
Other long-term investments ............. 4,044 4,044 2,753 2,753
Short-term investments .................. 191,455 191,455 201,079 201,079

Financial Liabilities:
Investment-type insurance contracts ..... $ 794,691 $ 761,324 $1,053,025 $1,033,692
</TABLE>

8. Contingencies

Various lawsuits against the Company have arisen in the course of the
Company's business. In certain of these matters, large and/or indeterminate
amounts are sought. In the opinion of the Company, any ultimate liability
which would result from such litigation would not have a material adverse
effect on the Company's financial position.

B12
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Board of Directors of
Pruco Life Insurance Company
Newark, New Jersey

We have audited the accompanying consolidated statements of financial position
of Pruco Life Insurance Company and subsidiaries as of December 31, 1994 and
1993, and the related consolidated statements of operations, stockholder's
equity, and cash flows for each of the three years in the period ended December
31, 1994. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on the financial
statements based on our audits.

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

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Pruco Life Insurance Company and
subsidiaries as of December 31, 1994 and 1993, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1994 in conformity with generally accepted accounting principles.

Deloitte & Touche LLP
Parsippany, New Jersey
March 6, 1995

B13

<PAGE>

PRUvider(SM)
Variable Appreciable Life(R)
Insurance Contract

PRUCO LIFE INSURANCE COMPANY
213 Washington Street
Newark, New Jersey 07102-2992
Telephone: (800) 437-4016, Ext. 46

<PAGE>

PART IB

INFORMATION IN STATEMENT OF ADDITIONAL INFORMATION

<PAGE>

STATEMENT OF ADDITIONAL INFORMATION
May 1, 1995

PRUCO LIFE INSURANCE COMPANY
PRUVIDER VARIABLE APPRECIABLE ACCOUNT

PRUvider
Variable
APPRECIABLE
LIFE(R)___________________
INSURANCE CONTRACTS

PROVIDING FOR THE INVESTMENT
OF ASSETS IN THE
INVESTMENT PORTFOLIOS OF

THE PRUDENTIAL SERIES
FUND, INC.

The Pruco Life Insurance Company, a stock life insurance company that is a
wholly-owned subsidiary of the Prudential Insurance Company of America, offers a
variable life insurance contract called the PRUvider Variable Appreciable
Life(R) Insurance Contract*. The Contract provides whole-life insurance
protection. The death benefit varies daily with investment experience but will
never be less than the "face amount" of insurance specified in the Contract. The
Contract also generally provides a cash surrender value which also varies with
investment experience. There is no guaranteed minimum cash surrender value.

The assets held for the purpose of paying benefits under these contracts can be
invested in one or both of the two current subaccounts of the Pruco Life
PRUvider Variable Appreciable Account. The assets invested in each subaccount
are in turn invested in a corresponding portfolio of The Prudential Series Fund,
Inc., a diversified, open-end management investment company (commonly known as a
mutual fund) that is intended to provide a range of investment alternatives to
variable contract owners. Each portfolio is, for investment purposes, in effect
a separate fund. The two available Series Fund portfolios are the Conservatively
Managed Flexible Portfolio and the Aggressively Managed Flexible Portfolio. A
separate class of capital stock is issued for each portfolio. Shares of the
Series Fund are currently sold only to separate accounts of Pruco Life and
certain other insurers to fund the benefits under variable life insurance and
variable annuity contracts issued by those companies.

The PRUvider Variable Appreciable Life(R) Insurance Contract owner may also
choose to invest in a fixed-rate option which is described in the prospectus of
The Pruco Life PRUvider Variable Appreciable Account.

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

THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND SHOULD BE READ
IN CONJUNCTION WITH THE PROSPECTUS OF THE PRUCO LIFE PRUVIDER VARIABLE
APPRECIABLE ACCOUNT DATED MAY 1, 1995, WHICH IS AVAILABLE WITHOUT CHARGE UPON
WRITTEN REQUEST TO THE PRUCO LIFE INSURANCE COMPANY, 213 WASHINGTON STREET,
NEWARK, NEW JERSEY 07102-2992 OR BY TELEPHONING (800) 437-4016, Ext. 46.

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

Pruco Life Insurance Company
213 Washington Street
Newark, New Jersey 07102-2992
Telephone: (800) 437-4016, Ext. 46

*PRUvider is a service mark of The Prudential.
Appreciable Life is a registered mark of The Prudential.
SVAL-1SAI Ed 5-95
Catalog No. 64M086G

<PAGE>

STATEMENT OF ADDITIONAL INFORMATION
CONTENTS
Page
MORE DETAILED INFORMATION ABOUT THE CONTRACT .............................. 1
Sales Load Upon Surrender ........................................ 1
Reduction of Charges for Concurrent Sales to Several Individuals . 1
Paying Premiums by Payroll Deduction ............................. 1
Unisex Premiums and Benefits ..................................... 1
How the Death Benefit Will Vary .................................. 1
Withdrawal of Excess Cash Surrender Value ........................ 2
Tax Treatment of Contract Benefits ............................... 2
Treatment as Life Insurance ............................. 2
Pre-Death Distributions ................................. 3
Withholding ............................................. 4
Other Tax Considerations ................................ 4
Sale of the Contract and Sales Commissions ....................... 4
Riders ........................................................... 4
Other Standard Contract Provisions ............................... 5
Beneficiary ............................................. 5
Incontestability ........................................ 5
Misstatement of Age or Sex .............................. 5
Suicide Exclusion ....................................... 5
Assignment .............................................. 5
Settlement Options ...................................... 5
INVESTMENT OBJECTIVES AND POLICIES OF THE PORTFOLIOS ...................... 5
General .......................................................... 5
Convertible Securities ........................................... 5
Warrants ......................................................... 6
Options and Futures .............................................. 6
When-Issued and Delayed Delivery Securities ...................... 12
Short Sales ...................................................... 12
Short Sales Against the Box ...................................... 12
Interest Rate Swaps .............................................. 12
Loans of Portfolio Securities .................................... 13
Illiquid Securities .............................................. 13
Forward Foreign Currency Exchange Contracts ...................... 14
INVESTMENT RESTRICTIONS ................................................... 15
INVESTMENT MANAGEMENT ARRANGEMENTS AND EXPENSES ........................... 17
PORTFOLIO TRANSACTIONS AND BROKERAGE ...................................... 18
DETERMINATION OF NET ASSET VALUE .......................................... 19
SECURITIES IN WHICH THE MONEY MARKET PORTFOLIO MAY CURRENTLY INVEST ....... 21
DEBT RATINGS .............................................................. 23
POSSIBLE REPLACEMENT OF THE SERIES FUND ................................... 24
OTHER INFORMATION CONCERNING THE SERIES FUND .............................. 25
Incorporation and Authorized Stock ............................... 25
Dividends, Distributions and Taxes ............................... 25
Custodian and Transfer Agent ..................................... 25
Experts .......................................................... 25
License .......................................................... 25
DIRECTORS AND OFFICERS OF PRUCO LIFE AND MANAGEMENT OF THE SERIES FUND .... 26
FINANCIAL STATEMENTS OF THE PRUDENTIAL SERIES FUND, INC ................... A1
THE PRUDENTIAL SERIES FUND, INC. SCHEDULE OF INVESTMENTS .................. B1

<PAGE>

MORE DETAILED INFORMATION ABOUT THE CONTRACT

Sales Load Upon Surrender. A contingent deferred sales load is assessed if the
Contract lapses or is surrendered during the first 10 Contract years. No such
charge is applicable to the death benefit, no matter when that may become
payable. Subject to the additional limitations described below, for Contracts
that lapse or are surrendered during the first 5 Contract years the charge will
be equal to 50% of the first year's primary annual premium. In the next 5
Contract years that percentage is reduced uniformly on a daily basis until it
reaches zero on the tenth Contract anniversary. Thus, for Contracts surrendered
at the end of the sixth year, the maximum deferred sales charge will be 40% of
the first year's primary annual premium, for Contracts surrendered at the end of
year 7, the maximum deferred sales charge will be 30% of the first year's
primary annual premium, and so forth.

The contingent deferred sales load is also subject to a further limit at older
issue ages (approximately above age 61) in order to comply with certain
requirements of state law. Specifically, the contingent deferred sales load for
such insureds is no more than $32.50 per $1,000 of face amount.

The sales load is subject to a further important limitation that may,
particularly for Contracts that lapse or are surrendered within the first 5 or 6
years, result in a lower contingent deferred sales load than that described
above. (This limitation might also, under unusual circumstances, apply to reduce
the monthly sales load deductions described in the prospectus in item (c) under
Monthly Deductions from Contract Fund.) The limitation is applied in order to
conform with the requirements of the Investment Company Act of 1940 and
regulations adopted thereunder, which limit the amount of non-refundable sales
load that may be charged on contracts within the first 2 years.

The limitation is as follows: (Every Contract has associated with it a Guideline
Annual Premium ("GAP"), which is an amount determined actuarially in accordance
with a definition set forth in a regulation of the Securities and Exchange
Commission ("SEC").) The maximum aggregate sales load that Pruco Life will
charge (that is, the sum of the monthly sales load deduction and the contingent
deferred sales charge) will not be more than 30% of the premiums actually paid
until those premiums total one GAP plus no more than 9% of the next premiums
paid until total premiums are equal to 5 GAPS, plus no more than 6% of all
subsequent premiums. If the sales charges described above would at any time
exceed this maximum amount then the charge, to the extent of any excess, will
not be made.

Reduction of Charges for Concurrent Sales to Several Individuals. Pruco Life may
reduce the sales charges and/or other charges on individual Contracts sold to
members of a class of associated individuals, or to a trustee, employer or other
entity representing such a class, where it is expected that such multiple sales
will result in savings of sales or administrative expenses. Pruco Life
determines both the eligibility for such reduced charges, as well as the amount
of such reductions, by considering the following factors: (1) the number of
individuals; (2) the total amount of premium payments expected to be received
from these Contracts; (3) the nature of the association between these
individuals, and the expected persistency of the individual Contracts; (4) the
purpose for which the individual Contracts are purchased and whether that
purpose makes it likely that expenses will be reduced; and (5) any other
circumstances which Pruco Life believes to be relevant in determining whether
reduced sales or administrative expenses may be expected. Some of the reductions
in charges for these sales may be contractually guaranteed; other reductions may
be withdrawn or modified by Pruco Life on a uniform basis. Pruco Life's
reductions in charges for these sales will not be unfairly discriminatory to the
interests of any individual Contract owners.

Paying Premiums by Payroll Deduction. In addition to the annual, semi-annual,
quarterly and monthly premium payment modes, a payroll budget method of paying
premiums may also be available under certain Contracts. The employer generally
deducts the necessary amounts from employee paychecks and sends premium payments
to Pruco Life monthly. Any Pruco Life representative authorized to sell this
Contract can provide further details concerning the payroll budget method of
paying premiums.

Unisex Premiums and Benefits. The Contract generally employs mortality tables
that distinguish between males and females. Thus, premiums and benefits under
Contracts issued on males and females of the same age will generally differ.
However, in those states that have adopted regulations prohibiting sex-distinct
insurance rates, premiums and cost of insurance charges will be based on a
blended unisex rate whether the insured is male or female. In addition,
employers and employee organizations considering purchase of a Contract should
consult their legal advisors to determine whether purchase of a Contract based
on sex-distinct actuarial tables is consistent with Title VII of the Civil
Rights Act of 1964 or other applicable law. Pruco Life may offer the Contract
with unisex mortality rates to such prospective purchasers.

How the Death Benefit Will Vary. The death benefit will vary with investment
experience. Assuming no withdrawals, the death benefit will be equal to the face
amount of insurance plus the amount (if any) by which the Contract Fund value
exceeds the applicable "Tabular Contract Fund value" for the Contract (subject
to an exception described below under which the death benefit is higher). Each
Contract contains a table that sets forth

1
<PAGE>

the Tabular Contract Fund value as of the end of each of the first 20 years of
the Contract. Tabular Contract Fund values between Contract anniversaries are
determined by interpolation. The "Tabular Contract Fund value" for each Contract
year is an amount that is slightly less than the Contract Fund value that would
result as of the end of such year if only scheduled premiums were paid, they
were paid when due, the selected investment options earned a net return at a
uniform rate of 4% per year, full mortality charges based upon the 1980 CSO
Table were deducted, maximum sales load and expense charges were deducted, and
there was no Contract debt.

Thus, for a Contract with no withdrawals, the death benefit will equal the face
amount if the Contract Fund equals the Tabular Contract Fund value. If, due to
investment results greater than a net return of 4%, or to payment of greater
than scheduled premiums, or to smaller than maximum charges, the Contract Fund
value is a given amount greater than the Tabular Contract Fund value, the death
benefit will be the face amount plus that excess amount. If, due to investment
results less favorable than a net return of 4%, the Contract Fund value is less
than the tabular Contract Fund value, the death benefit will not fall below the
initial face amount stated in the Contract; however, this unfavorable investment
experience must first be offset by favorable performance or additional payments
that bring the Contract Fund up to the tabular level before favorable investment
results or additional payments will increase the death benefit. Again, the death
benefit will reflect a deduction for the amount of any Contract debt. See
Contract Loans in the prospectus.

The Contract Fund could grow to the point where it is necessary to increase the
death benefit by a greater amount in order to ensure that the Contract will
satisfy the Internal Revenue Code's definition of life insurance. Thus, the
death benefit will always be the greatest of (1) the face amount plus the
Contract Fund minus the tabular Contract Fund value; (2) the guaranteed minimum
death benefit; and (3) the Contract Fund times the attained age factor that
applies.

Withdrawal of Excess Cash Surrender Value. Under certain circumstances, a
Contract owner may withdraw a portion of the Contract's cash surrender value
without surrendering the Contract in whole or in part. The amount that a
Contract owner may withdraw is limited by the requirement that the Contract Fund
after withdrawal must not be less than the tabular Contract Fund value. (A Table
of Tabular Contract Fund Values is included in the Contract; the values increase
with each year the Contract remains in force.) But because the Contract Fund may
be made up in part by an outstanding Contract loan, there is a further
limitation that the amount withdrawn may not be larger than an amount sufficient
to reduce the cash surrender value to zero. The amount withdrawn must be at
least $200. An owner may make no more than four such withdrawals in each
Contract year, and there is a $15 administrative processing fee for each
withdrawal. An amount withdrawn may not be repaid except as a scheduled or
unscheduled premium subject to the applicable charges. Upon request, Pruco Life
will tell a Contract owner how much he or she may withdraw. Withdrawal of part
of the cash surrender value may have tax consequences. See Tax Treatment of
Contract Benefits, below. A temporary need for funds may also be met by making a
loan and you should consult your Pruco Life representative about how best to
meet your needs.

When a withdrawal is made, the cash surrender value and Contract Fund value are
reduced by the amount of the withdrawal, and the death benefit is accordingly
reduced. Neither the face amount of insurance nor the amount of scheduled
premiums will be changed due to a withdrawal of excess cash surrender value. No
surrender charges will be assessed upon a withdrawal.

Withdrawal of part of the cash surrender value increases the risk that the
Contract Fund may be insufficient to provide for benefits under the Contract. If
such a withdrawal is followed by unfavorable investment experience, the Contract
may lapse even if scheduled premiums continue to be paid when due. This is
because, for purposes of determining whether a lapse has occurred, Pruco Life
treats withdrawals as a return of premium.

Tax Treatment of Contract Benefits. Each prospective purchaser is urged to
consult a qualified tax advisor. The following discussion is not intended as tax
advice, and it is not a complete statement of what the effect of federal income
taxes will be under all circumstances. Rather, it provides information about how
Pruco Life believes the tax laws apply in the most commonly occurring
circumstances. There is no guarantee, however, that the current federal income
tax laws and regulations or interpretations will not change.

Treatment as Life Insurance. The Contract will be treated as "life insurance" as
long as it satisfies certain definitional tests set forth in Section 7702 of the
Internal Revenue Code (the "Code") and as long as the underlying investments for
the Contract satisfy diversification requirements set forth in Treasury
Regulations issued pursuant to Section 817(h) of the Code.

These diversification requirements must ordinarily be met within 1 year after
Contract owner funds are first allocated to the particular portfolio of the
Series Fund, and within 30 days after the end of each calendar quarter
thereafter. Each portfolio must meet one of two alternative tests. Under the
first test, no more than 55% of the portfolio's assets can be invested in any
one investment; no more than 70% of the assets can be invested in any two
investments; no more than 80% can be invested in any three investments; and no
more than 90% can be invested in any four investments. Under the second test,
the portfolio must meet the tax law diversification

2
<PAGE>

requirements for a regulated investment company and no more than 55% of the
value of the portfolio's assets can be invested in cash, cash items, Government
securities, and securities of other regulated investment companies.

For purposes of determining whether a variable account is adequately
diversified, each United States Government agency or instrumentality is treated
as a separate issuer. Compliance with diversification requirements will
generally limit the amount of assets that may be invested in federally insured
certificates of deposit and all types of securities issued or guaranteed by each
United States Government agency or instrumentality.

Pruco Life believes that it has taken adequate steps to cause the Contract to be
treated as life insurance for tax purposes. This means that: (1) except as noted
below, the Contract owner should not be taxed on any part of the Contract Fund,
including additions attributable to interest or appreciation; and (2) the death
benefit should be excludible from the gross income of the beneficiary under
section 101(a) of the Code.

However, Section 7702 of the Code, which defines life insurance for tax
purposes, gives the Secretary of the Treasury authority to prescribe regulations
to carry out the purposes of the Section. In this regard, proposed regulations
governing mortality charges were issued in 1991 and proposed regulations under
Sections 101, 7702, and 7702A governing the treatment of life insurance policies
that provide accelerated death benefits were issued in 1992. None of these
proposed regulations has yet been finalized. Additional regulations under
Section 7702 may also be promulgated in the future. Moreover, in connection with
the issuance of temporary regulations under Section 817(h), the Treasury
Department announced that such regulations do not provide guidance concerning
the extent to which Contract owners may direct their investments to particular
divisions of a separate account. Such guidance will be included in regulations
or rulings under Section 817(d) relating to the definition of a variable
contract.

Pruco Life intends to comply with final regulations issued under sections 7702
and 817. Therefore, it reserves the right to make such changes as it deems
necessary to assure that the Contract continues to qualify as life insurance for
tax purposes. Any such changes will apply uniformly to affected Contract owners
and will be made only after advance written notice to affected Contract owners.

Pre-Death Distributions. The taxation of pre-death distributions depends on
whether the Contract is classified as a Modified Endowment Contract. The
following discussion first deals with distributions under Contracts not so
classified, and then with Modified Endowment Contracts.

1. A surrender or lapse of the Contract may have tax consequences. Upon
surrender, the owner will not be taxed on the cash surrender value
except for the amount, if any, that exceeds the gross premiums paid
less the untaxed portion of any prior withdrawals. The amount of any
unpaid Contract debt will, upon surrender or lapse, be added to the
cash surrender value and treated, for this purpose, as if it had been
received. Any loss incurred upon surrender is generally not deductible.
The tax consequences of a surrender may differ if the proceeds are
received under any income payment settlement option.

A withdrawal generally is not taxable unless it exceeds total premiums
paid to the date of withdrawal less the untaxed portion of any prior
withdrawals. However, under certain limited circumstances, in the first
15 Contract years all or a portion of a withdrawal may be taxable if
the Contract Fund exceeds the total premiums paid less the untaxed
portion of any prior withdrawals, even if total withdrawals do not
exceed total premiums paid to date.

Extra premiums for optional benefits and riders generally do not count
in computing gross premiums paid, which in turn determines the extent
to which a withdrawal might be taxed.

Loans received under the Contract will ordinarily be treated as
indebtedness of the owner and will not be considered to be
distributions subject to tax.

2. Some of the above rules are changed if the Contract is classified as a
Modified Endowment Contract under section 7702A of the Code. A Contract
may be classified as a Modified Endowment Contract under various
circumstances. For example, low face amount Contracts issued on younger
insureds may be classified as a Modified Endowment Contract even though
the Contract owner pays only the Scheduled Premiums or even less than
the Scheduled Premiums. Before purchasing such a Contract, you should
understand the tax treatment of pre-death distributions and consider
the purpose for which the Contract is being purchased. More generally,
a Contract may be classified as a Modified Endowment Contract if
premiums in excess of Scheduled Premiums are paid or the face amount of
insurance is decreased during the first seven Contract years, or if the
face amount of insurance is increased or if a rider is added or removed
from the Contract. You should consult with your tax advisor before
making any of these policy changes.

If the Contract is classified as a Modified Endowment Contract, then
pre-death distributions, including loans and withdrawals, are
includible in income to the extent that the Contract fund prior to
surrender charges exceeds the gross premiums paid for the Contract
increased by the amount of any loans previously

3
<PAGE>

includible in income and reduced by any untaxed amounts previously
received other than the amount of any loans excludible from income.
These rules may also apply to pre-death distributions, including
loans, made during the 2 year period prior to the Contract becoming a
Modified Endowment Contract.

In addition, pre-death distributions from such Contracts (including
full surrenders) will be subject to a penalty of 10 percent of the
amount includible in income unless the amount is distributed on or
after age 59 1/2, on account of the taxpayer's disability, or as a life
annuity. It is presently unclear how the penalty tax provisions apply
to Contracts owned by nonnatural persons such as corporations.

Under certain circumstances, the Code requires two or more Modified
Endowment Contracts issued during a calendar year period to be treated
as a single contract for purposes of applying the above rules.

Withholding. The taxable portions of any amounts received under the Contract
will be subject to withholding to meet federal income tax obligations if the
Contract owner fails to elect that no taxes be withheld or in certain other
circumstances. Contract owners who do not provide a social security number or
other taxpayer identification number will not be permitted to elect out of
withholding. All recipients of such amounts may be subject to penalties under
the estimated tax rules if withholding and estimated tax payments are not
sufficient.

Other Tax Considerations. Transfer of the Contract to a new owner or assignment
of the Contract may have tax consequences depending on the circumstances. In the
case of a transfer of the Contract for a valuable consideration, the death
benefit may be subject to federal income taxes under section 101(a)(2) of the
Code. In addition, a transfer of the Contract to or the designation of a
beneficiary who is either 37 1/2 years younger than the Contract owner or a
grandchild of the Contract owner may have Generation Skipping Transfer tax
consequences under Section 2601 of the Code.

In certain circumstances, deductions for interest paid or accrued on Contract
debt or on other loans that are incurred or continued to purchase or carry the
Contract may be denied under section 163 of the Code as personal interest or
under section 264 of the Code. Contract owners should consult a tax advisor
regarding the application of these provisions to their circumstances.

Business-owned life insurance is subject to additional rules. Section 264(a)(1)
of the Code generally precludes business Contract owners from deducting premium
payments. Under section 264(a)(4) of the Code, a deduction is not allowed for
any interest paid or accrued on any Contract debt on an insurance policy to the
extent the indebtedness exceeds $50,000 per officer, employee or financially
interested person. The Code also imposes an indirect tax upon additions to the
Contract fund or the receipt of death benefits under business-owned life
insurance policies under certain circumstances by way of the corporate
alternative minimum tax.

The individual situation of each Contract owner or beneficiary will determine
the federal estate taxes and the state and local estate, inheritance and other
taxes due if the owner or insured dies.

Sale of the Contract and Sales Commissions. Pruco Securities Corporation
("Prusec"), an indirect wholly-owned subsidiary of The Prudential, acts as the
principal underwriter of the Contract. Prusec, organized in 1971 under New
Jersey law, is registered as a broker and dealer under the Securities Exchange
Act of 1934 and is a member of the National Association of Securities Dealers,
Inc. Prusec's principal business address is 1111 Durham Avenue, South
Plainfield, New Jersey 07080-2398. The Contract is sold by registered
representatives of Prusec who are also authorized by state insurance departments
to do so. The Contract may also be sold through other broker-dealers authorized
by Prusec and applicable law to do so. Registered representatives of such other
broker-dealers may be paid on a different basis than described below. Where the
insured is less than 60 years of age, the representative will generally receive
a commission of no more than 50% of the scheduled premiums for the first year,
no more than 10% of the scheduled premiums for the second, third, and fourth
years, no more than 3% of the scheduled premiums for the fifth through tenth
years, and no more than 2% of the scheduled premiums thereafter. For insureds
over 59 years of age, the commission will be lower. The representative may be
required to return all or part of the first year commission if the Contract is
not continued through the second year. Representatives with less than 3 years of
service may be paid on a different basis.

Sales expenses in any year are not equal to the deduction for sales load in that
year. Pruco Life expects to recover its total sales expenses over the periods
the Contracts are in effect. To the extent that the sales charges are
insufficient to cover total sales expenses, the sales expenses will be recovered
from Pruco Life's surplus, which may include amounts derived from the mortality
and expense risk charge and the guaranteed minimum death benefit risk charge
described in the prospectus under Daily Deduction from the Contract Fund and
item (d) under Monthly Deductions from Contract Fund.

Riders. When the Contract is first issued, the owner may be able to obtain extra
fixed benefits which may require an additional premium. These optional insurance
benefits will be described in what is known as a "rider" to the Contract.
Charges for the riders will be deducted from the Contract Fund on each Monthly
date. One rider pays an additional amount if the insured dies in an accident.
Another waives certain premiums if the insured is disabled

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within the meaning of the provision (or, in the case of a Contract issued on an
insured under the age of 15, if the applicant dies or becomes disabled within
the meaning of the provision). Others pay an additional amount if the insured
dies within a stated number of years after issue; similar benefits may be
available if the insured's child should die. The amounts of these benefits are
fully guaranteed at issue; they do not depend on the performance of the Account.
Certain restrictions may apply; they are clearly described in the applicable
rider.

Any Pruco Life representative authorized to sell the Contract can explain these
extra benefits further. Samples of the provisions are available from Pruco Life
upon written request.

Other Standard Contract Provisions.

Beneficiary. The beneficiary is designated and named in the application by the
Contract owner. Thereafter, the owner may change the beneficiary, provided it is
in accordance with the terms of the Contract. Should the insured die with no
surviving beneficiary, the insured's estate will become the beneficiary.

Incontestability. After the Contract has been in force during the insured's
lifetime for 2 years from the Contract date or, with respect to any change in
the Contract that requires Pruco Life's approval and could increase its
liability, after the change has been in effect during the insured's lifetime for
2 years from the effective date of the change, Pruco Life will not contest its
liability under the Contract in accordance with its terms.

Misstatement of Age or Sex. If the insured's stated age or sex (except where
unisex rates apply) or both are incorrect in the Contract, Pruco Life will
adjust the death benefits payable, as required by law, to reflect the correct
age and sex. Any death benefit will be based on what the most recent charge for
mortality would have provided at the correct age and sex.

Suicide Exclusion. Generally, if the insured, whether sane or insane, dies by
suicide within 2 years from the Contract date, Pruco Life will pay no more under
the Contract than the sum of the premiums paid.

Assignment. This Contract may not be assigned if such assignment would violate
any federal, state, or local law or regulation. Generally, the Contract may not
be assigned to an employee benefit plan or program without Pruco Life's consent.
Pruco Life assumes no responsibility for the validity or sufficiency of any
assignment, and it will not be obligated to comply with any assignment unless it
has received a copy at one of its Home Offices.

Settlement Options. The Contract grants to most owners, or to the beneficiary, a
variety of optional ways of receiving Contract proceeds, other than in a lump
sum. Any Pruco Life representative authorized to sell this Contract can explain
these options upon request.

INVESTMENT OBJECTIVES AND POLICIES OF THE PORTFOLIOS

General. The Prudential Series Fund, Inc. (the "Series Fund") has sixteen
separate portfolios, two of which, the Conservatively Managed Flexible Portfolio
and the Aggressively Managed Flexible Portfolio, are available to PRUvider
Contract owners. The portfolios are managed by The Prudential Insurance Company
of America ("The Prudential"), see Investment Management Arrangements and
Expenses, page 17.

Each of the portfolios seeks to achieve a different investment objective.
Accordingly, each portfolio can be expected to have different investment results
and to be subject to different financial and market risks. Financial risk refers
to the ability of an issuer of a debt security to pay principal and interest and
to the earnings stability and overall financial soundness of an issuer of an
equity security. Market risk refers to the degree to which the price of a
security will react to changes in conditions in securities markets in general,
and with particular reference to debt securities, to changes in the overall
level of interest rates.

The investment objectives of the Series Fund's portfolios that are available to
PRUvider Contract owners can be found under Investment Objectives and Policies
of the Portfolios in the prospectus.

Convertible Securities. The Conservatively Managed Flexible and Aggressively
Managed Flexible Portfolios may invest in convertible securities. A convertible
security is a fixed-income security (a bond or preferred stock) which may be
converted at a stated price within a specified period of time into a certain
quantity of the common stock of the same or a different issuer. Convertible
securities are senior to common stocks in a corporation's capital structure, but
are usually subordinated to similar nonconvertible securities. While providing a
fixed income stream (generally higher in yield than the income derivable from a
common stock but lower than that afforded by a similar nonconvertible security),
a convertible security also affords an investor the opportunity, through its
conversion feature, to participate in capital appreciation attendant upon a
market price advance in the convertible security's underlying common stock. The
price of a convertible security tends to increase as the market value of the
underlying stock rises, whereas it tends to decrease as the market value of the
underlying stock declines. While no securities investment is without risk,
investments in convertible securities generally entail less risk than
investments in the common stock of the same issuer.

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Warrants. The Conservatively Managed Flexible and Aggressively Managed Flexible
Portfolios may invest in warrants on common stocks. Warrants are options to buy
a number of shares of stock at a predetermined price during a specified period.
The risk associated with the purchase of a warrant is that the purchase price
will be lost if the market price of the stock does not reach a level that
justifies the exercise or sale of the warrant before it expires.

Options and Futures

Options on Equity Securities. The Conservatively Managed Flexible and
Aggressively Managed Flexible Portfolios may purchase and write (i.e., sell) put
and call options on equity securities that are traded on securities exchanges or
that are listed on the National Association of Securities Dealers Automated
Quotation System ("NASDAQ") or that result from privately negotiated
transactions with broker-dealers ("OTC options"). A call option is a short-term
contract pursuant to which the purchaser or holder, in return for a premium
paid, has the right to buy the equity security underlying the option at a
specified exercise price at any time during the term of the option. The writer
of the call option, who receives the premium, has the obligation, upon exercise
of the option, to deliver the underlying equity security against payment of the
exercise price. A put option is a similar contract which gives the purchaser or
holder, in return for a premium, the right to sell the underlying equity
security at a specified price during the term of the option. The writer of the
put, who receives the premium, has the obligation to buy the underlying security
at the exercise price upon exercise by the holder of the put.

A portfolio will write only "covered" options on stocks. A call option is
covered if: (1) the portfolio owns the security underlying the option; or (2)
the portfolio has an absolute and immediate right to acquire that security
without additional cash consideration (or for additional cash consideration held
in a segregated account by its custodian) upon conversion or exchange of other
securities it holds; or (3) the portfolio holds on a share-for-share basis a
call on the same security as the call written where the exercise price of the
call held is equal to or less than the exercise price of the call written or
greater than the exercise price of the call written if the difference is
maintained by the portfolio in cash, Treasury bills or other high grade
short-term debt obligations in a segregated account with its custodian. A put
option is covered if: (1) the portfolio deposits and maintains with its
custodian in a segregated account cash, U.S. Government securities or other
liquid high-grade debt obligations having a value equal to or greater than the
exercise price of the option; or (2) the portfolio holds on a share-for-share
basis a put on the same security as the put written where the exercise price of
the put held is equal to or greater than the exercise price of the put written
or less than the exercise price if the difference is maintained by the portfolio
in cash, Treasury bills or other high grade short-term debt obligations in a
segregated account with its custodian.

The Conservatively Managed Flexible and Aggressively Managed Flexible Portfolios
may also purchase "protective puts" (i.e., put options acquired for the purpose
of protecting a portfolio security from a decline in market value). In exchange
for the premium paid for the put option, the portfolio acquires the right to
sell the underlying security at the exercise price of the put regardless of the
extent to which the underlying security declines in value. The loss to the
portfolio is limited to the premium paid for, and transaction costs in
connection with, the put plus the initial excess, if any, of the market price of
the underlying security over the exercise price. However, if the market price of
the security underlying the put rises, the profit the portfolio realizes on the
sale of the security will be reduced by the premium paid for the put option less
any amount (net of transaction costs) for which the put may be sold. Similar
principles apply to the purchase of puts on debt securities and stock indices,
as described below under Options on Debt Securities and Options on Stock
Indices.

The portfolios may purchase call options for hedging and investment purposes. No
portfolio intends to invest more than 5% of its net assets at any one time in
the purchase of call options on stocks. These portfolios may also purchase
putable and callable equity securities, which are securities coupled with a put
or a call option provided by the issuer.

If the writer of an exchange-traded option wishes to terminate the obligation,
he or she may effect a "closing purchase transaction" by buying an option of the
same series as the option previously written. Similarly, the holder of an
exchange-traded option may liquidate his or her position by exercise of the
option or by effecting a "closing sale transaction" by selling an option of the
same series as the option previously purchased. A portfolio will realize a
profit from a closing transaction if the price of the transaction is less than
the premium received from writing the option or is more than the premium paid to
purchase the option. Because increases in the market price of a call option will
generally reflect increases in the market price of the underlying security, any
loss resulting from a closing purchase transaction with respect to a call option
is likely to be offset in whole or in part by appreciation of the underlying
equity security owned by the portfolio. Unlike exchange-traded options, OTC
options generally do not have a continuous liquid market. Consequently, the
portfolio will generally be able to realize the value of an OTC option it has
purchased only by exercising it or reselling it to the dealer who issued it.
Similarly, when the portfolio writes an OTC option, it generally will be able to
close out the OTC option prior to its expiration only by entering into a closing
purchase transaction with the dealer to which the portfolio originally wrote the
OTC option. There is, in general, no guarantee that closing purchase or closing
sale transactions can be effected.

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A portfolio's use of options on equity securities is subject to certain special
risks, in addition to the risk that the market value of the security will move
adversely to the portfolio's option position. An option position may be closed
out only on an exchange, board of trade or other trading facility which provides
a secondary market for an option of the same series. Although a portfolio will
generally purchase or write only those options for which there appears to be an
active secondary market, there is no assurance that a liquid secondary market on
an exchange will exist for any particular option, or at any particular time, and
for some options no secondary market on an exchange or otherwise may exist. In
such event it might not be possible to effect closing transactions in particular
options, with the result that the portfolio would have to exercise its options
in order to realize any profit and would incur brokerage commissions upon the
exercise of such options and upon the subsequent disposition of underlying
securities acquired through the exercise of call options or upon the purchase of
underlying securities for the exercise of put options. If a portfolio as a
covered call option writer is unable to effect a closing purchase transaction in
a secondary market, it will not be able to sell the underlying security until
the option expires or it delivers the underlying security upon exercise.

Reasons for the absence of a liquid secondary market on an exchange include the
following: (i) there may be insufficient trading interest in certain options;
(ii) restrictions may be imposed by an exchange on opening transactions or
closing transactions or both; (iii) trading halts, suspensions or other
restrictions may be imposed with respect to particular classes or series of
options or underlying securities; (iv) unusual or unforeseen circumstances may
interrupt normal operations on an exchange; (v) the facilities of an exchange or
a clearing corporation may not at all times be adequate to handle current
trading volume; or (vi) one or more exchanges could, for economic or other
reasons, decide or be compelled at some future date to discontinue the trading
of options (or a particular class or series of options), in which event the
secondary market on that exchange (or in the class or series of options) would
cease to exist, although outstanding options on that exchange that had been
issued by a clearing corporation as a result of trades on that exchange would
continue to be exercisable in accordance with their terms. There is no assurance
that higher than anticipated trading activity or other unforeseen events might
not, at times, render certain of the facilities of any of the clearing
corporations inadequate, which might cause an exchange to institute special
procedures that might interfere with the timely execution of customers' orders.

The purchase and sale of OTC options will also be subject to certain risks.
Unlike exchange-traded options, OTC options generally do not have a continuous
liquid market. Consequently, a portfolio will generally be able to realize the
value of an OTC option it has purchased only by exercising it or reselling it to
the dealer who issued it. Similarly, when a portfolio writes an OTC option, it
generally will be able to close out the OTC option prior to its expiration only
by entering into a closing purchase transaction with the dealer to which the
portfolio originally wrote the OTC option. While the portfolios will seek to
enter into OTC options only with dealers who agree to and which are expected to
be able to be capable of entering into closing transactions with the portfolio,
there can be no assurance that the portfolio will be able to liquidate an OTC
option at a favorable price at any time prior to expiration. In the event of
insolvency of the other party, the portfolio may be unable to liquidate an OTC
option. The Prudential monitors the creditworthiness of dealers with whom the
Series Fund enters into OTC option transactions under the general supervision of
the Series Fund's Board of Directors.

Options on Debt Securities. The Conservatively Managed Flexible and Aggressively
Managed Flexible Portfolios may purchase and write (i.e., sell) put and call
options on debt securities (including U.S. Government debt securities) that are
traded on U.S. securities exchanges or that result from privately negotiated
transactions with primary U.S. Government securities dealers recognized by the
Federal Reserve Bank of New York ("over-the-counter" or "OTC" options). Options
on debt are similar to options on stock, except that the option holder has the
right to take or make delivery of a debt security, rather than stock.

A portfolio will write only "covered" options. Options on debt securities are
covered in the same manner as options on stocks, discussed above, except that,
in the case of call options on U.S. Treasury Bills, the portfolio might own U.S.
Treasury Bills of a different series from those underlying the call option, but
with a principal amount and value corresponding to the option contract amount
and a maturity date no later than that of the securities deliverable under the
call option. The principal reason for a portfolio to write an option on one or
more of its securities is to realize through the receipt of the premiums paid by
the purchaser of the option a greater current return than would be realized on
the underlying security alone. Calls on debt securities will not be written
when, in the opinion of The Prudential, interest rates are likely to decline
significantly, because under those circumstances the premium received by writing
the call likely would not fully offset the foregone appreciation in the value of
the underlying security.

The portfolios may also write straddles (i.e., a combination of a call and a put
written on the same security at the same strike price where the same issue of
the security is considered "cover" for both the put and the call). In such
cases, the portfolio will also segregate or deposit for the benefit of the
portfolio's broker cash or liquid high-grade debt obligations equivalent to the
amount, if any, by which the put is "in the money." It is contemplated that each
portfolio's use of straddles will be limited to 5% of the portfolio's net assets
(meaning that the securities used for

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cover or segregated as described above will not exceed 5% of the portfolio's net
assets at the time the straddle is written). The writing of a call and a put on
the same security at the same strike price where the call and the put are
covered by different securities is not considered a straddle for purposes of
this limit.

The portfolios may purchase "protective puts" in an effort to protect the value
of a security that it owns against a substantial decline in market value.
Protective puts are described above in Options on Equity Securities, page 6. A
portfolio may wish to protect certain portfolio securities against a decline in
market value at a time when put options on those particular securities are not
available for purchase. A portfolio may therefore purchase a put option on
securities other than those it wishes to protect even though it does not hold
such other securities in its portfolio. While changes in the value of the put
option should generally offset changes in the value of the securities being
hedged, the correlation between the two values may not be as close in these
transactions as in transactions in which the portfolio purchases a put option on
an underlying security it owns.

The portfolios may also purchase call options on debt securities for hedging or
investment purposes. No portfolio currently intends to invest more than 5% of
its net assets at any one time in the purchase of call options on debt
securities. A portfolio may also purchase putable and callable debt securities,
which are securities coupled with a put or call option provided by the issuer.

If the writer of an exchange-traded option wishes to terminate the obligation,
he or she may effect a "closing purchase transaction" or a "closing sale
transaction" in a manner similar to that discussed above in connection with
options on equity securities.

The staff of the Securities and Exchange Commission has taken the position that
purchased OTC options and the assets used as "cover" for written OTC options are
illiquid for purposes of a portfolio's 15% limitation on investment in illiquid
securities. However, pursuant to the terms of certain no-action letters issued
by the staff, the securities used as cover for written OTC options may be
considered liquid provided that the portfolio sells OTC options only to
qualified dealers who agree that the portfolio may repurchase any OTC option it
writes for a maximum price to be calculated by a predetermined formula. In such
cases, the OTC option would be considered illiquid only to the extent that the
maximum repurchase price under the formula exceeds the intrinsic value of the
option.

The use of debt options is subject to the same risks described above in
connection with stock options.

Options on Stock Indices. The Conservatively Managed Flexible and Aggressively
Managed Flexible Portfolios may purchase and sell put and call options on stock
indices traded on securities exchanges or listed on NASDAQ or that result from
privately negotiated transactions with broker-dealers ("OTC options"). Options
on stock indices are similar to options on stock except that rather than the
right to take or make delivery of stock at a specified price, an option on a
stock index gives the holder the right to receive, upon exercise of the option,
an amount of cash if the closing level of the stock index upon which the option
is based is greater than, in the case of a call, or less than, in the case of a
put, the exercise price of the option. This amount of cash is equal to such
difference between the closing price of the index and the exercise price of the
option expressed in dollars times a specified multiple (the "multiplier"). The
writer of the option is obligated, in return for the premium received, to make
delivery of this amount. Unlike stock options, all settlements are in cash, and
gain or loss depends on price movements in the stock market generally (or in a
particular industry or segment of the market) rather than price movements in
individual stocks.

The multiplier for an index option performs a function similar to the unit of
trading for a stock option. It determines the total dollar value per Contract of
each point in the difference between the exercise price of an option and the
current level of the underlying index. A multiplier of 100 means that a
one-point difference will yield $100. Options on different indices may have
different multipliers.

The portfolios may purchase put and call options for hedging and investment
purposes. No portfolio intends to invest more than 5% of its net assets at any
one time in the purchase of puts and calls on stock indices. A portfolio may
effect closing sale and purchase transactions involving options on stock
indices, as described above in connection with stock options.

A portfolio will write only "covered" options on stock indices. A call option is
covered if the portfolio holds a portfolio of stocks at least equal to the value
of the index times the multiplier times the number of contracts. When a
portfolio writes a call option on a broadly based stock market index, the
portfolio will segregate or put into escrow with its custodian or pledge to a
broker as collateral for the option, cash, cash equivalents or "qualified
securities" (defined below) with a market value at the time the option is
written of not less than 100% of the current index value times the multiplier
times the number of contracts. If a portfolio has written an option on an
industry or market segment index, it will segregate or put into escrow with its
custodian or pledge to a broker as collateral for the option at least five
"qualified securities," all of which are stocks of issuers in such industry or
market segment, with a market value at the time the option is written of not
less than 100% of the current index value times the multiplier times the number
of contracts. Such stocks will include stocks which represent at least

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50% of the weighting of the industry or market segment index and will represent
at least 50% of the portfolio's holdings in that industry or market segment. No
individual security will represent more than 15% of the amount so segregated,
pledged or escrowed in the case of broadly based stock market index options or
25% of such amount in the case of industry or market segment index options. If
at the close of business on any day the market value of such qualified
securities so segregated, escrowed or pledged falls below 100% of the current
index value times the multiplier times the number of contracts, the portfolio
will so segregate, escrow or pledge an amount in cash, Treasury bills or other
high-grade short-term obligations equal in value to the difference. In addition,
when a portfolio writes a call on an index which is in-the-money at the time the
call is written, the portfolio will segregate with its custodian or pledge to
the broker as collateral, cash or U.S. Government or other high-grade short-term
debt obligations equal in value to the amount by which the call is in-the- money
times the multiplier times the number of contracts. Any amount segregated
pursuant to the foregoing sentence may be applied to the portfolio's obligation
to segregate additional amounts in the event that the market value of the
qualified securities falls below 100% of the current index value times the
multiplier times the number of contracts. A "qualified security" is an equity
security which is listed on a securities exchange or NASDAQ against which the
portfolio has not written a stock call option and which has not been hedged by
the portfolio by the sale of stock index futures. However, if the portfolio
holds a call on the same index as the call written where the exercise price of
the call held is equal to or less than the exercise price of the call written or
greater than the exercise price of the call written if the difference is
maintained by the portfolio in cash, Treasury bills or other high-grade
short-term obligations in a segregated account with its custodian, it will not
be subject to the requirement described in this paragraph.

A put option is covered if: (1) the portfolio holds in a segregated account
cash, Treasury bills or other high-grade short-term debt obligations of a value
equal to the strike price times the multiplier times the number of contracts; or
(2) the portfolio holds a put on the same index as the put written where the
strike price of the put held is equal to or greater than the strike price of the
put written or less than the strike price of the put written if the difference
is maintained by the portfolio in cash, Treasury bills or other high-grade
short-term debt obligations in a segregated account with its custodian. In
instances involving the purchase of futures contracts by a portfolio, an amount
of cash and cash equivalents, equal to the market value of the futures
contracts, will be deposited in a segregated account with the portfolio's
custodian and/or in a margin account with a broker to collateralize the position
and thereby ensure that the use of such futures is unleveraged.

The purchase and sale of options on stock indices will be subject to the risks
described above under Options on Equity Securities. In addition, the distinctive
characteristics of options on indices create certain risks that are not present
with stock options. Index prices may be distorted if trading of certain stocks
included in the index is interrupted. Trading in the index options also may be
interrupted in certain circumstances, such as if trading were halted in a
substantial number of stocks included in the index. If this occurred, a
portfolio would not be able to close out options which it had purchased or
written and, if restrictions on exercise were imposed, might be unable to
exercise an option it holds, which could result in substantial losses to the
portfolio. It is the policy of the portfolios to purchase or write options only
on stock indices which include a number of stocks sufficient to minimize the
likelihood of a trading halt in options on the index.

The ability to establish and close out positions on such options will be subject
to the development and maintenance of a liquid secondary market. A portfolio
will not purchase or sell any index option contract unless and until, in its
manager's opinion, the market for such options has developed sufficiently that
the risk in connection with such transactions is no greater than the risk in
connection with options on stocks.

There are certain special risks associated with writing calls on stock indices.
Because exercises of index options are settled in cash, a call writer such as a
portfolio cannot determine the amount of its settlement obligations in advance
and, unlike call writing on specific stocks, cannot precisely provide in advance
for, or cover, its potential settlement obligations by acquiring and holding the
underlying securities. The portfolios, however, will follow the "cover"
procedures described above.

Price movements in a portfolio's equity security portfolio probably will not
correlate precisely with movements in the level of the index and, therefore, in
writing a call on a stock index a portfolio bears the risk that the price of the
securities held by the portfolio may not increase as much as the index. In such
event, the portfolio would bear a loss on the call which is not completely
offset by movement in the price of the portfolio's equity securities. It is also
possible that the index may rise when the portfolio's securities do not rise in
value. If this occurred, the portfolio would experience a loss on the call which
is not offset by an increase in the value of its securities portfolio and might
also experience a loss in its securities portfolio. However, because the value
of a diversified securities portfolio will, over time, tend to move in the same
direction as the market, movements in the value of a portfolio's securities in
the opposite direction as the market would be likely to occur for only a short
period or to a small degree.

When a portfolio has written a call, there is also a risk that the market may
decline between the time the portfolio has a call exercised against it, at a
price which is fixed as of the closing level of the index on the date of the

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exercise, and the time the portfolio is able to sell stocks in its portfolio. As
with stock options, a portfolio will not learn that an index option has been
exercised until the day following the exercise date but, unlike a call on stock
where the portfolio would be able to deliver the underlying securities in
settlement, the portfolio may have to sell part of its stock portfolio in order
to make settlement in cash, and the price of such stocks might decline before
they can be sold. This timing risk makes certain strategies involving more than
one option substantially more risky with options in stock indices than with
stock options. For example, even if an index call which a portfolio has written
is "covered" by an index call held by the portfolio with the same strike price,
the portfolio will bear the risk that the level of the index may decline between
the close of trading on the date the exercise notice is filed with the clearing
corporation and the close of trading on the date the portfolio exercises the
call it holds or the time the portfolio sells the call, which in either case
would occur no earlier than the day following the day the exercise notice was
filed.

There are also certain special risks involved in purchasing put and call options
on stock indices. If a portfolio holds an index option and exercises it before
final determination of the closing index value for that day, it runs the risk
that the level of the underlying index may change before closing. If such a
change causes the exercised option to fall out-of- the-money, the portfolio will
be required to pay the difference between the closing index value and the
exercise price of the option (times the applicable multiplier) to the assigned
writer. Although the portfolio may be able to minimize the risk by withholding
exercise instructions until just before the daily cutoff time or by selling
rather than exercising an option when the index level is close to the exercise
price, it may not be possible to eliminate this risk entirely because the cutoff
times for index options may be earlier than those fixed for other types of
options and may occur before definitive closing index values are announced.

Options on Foreign Currencies. The Conservatively Managed Flexible and
Aggressively Managed Flexible Portfolios may purchase and write put and call
options on foreign currencies traded on U.S. or foreign securities exchanges or
boards of trade for hedging purposes in a manner similar to that in which
forward foreign currency exchange contracts (see Forward Foreign Currency
Exchange Contracts, page 14) and futures contracts on foreign currencies
(discussed under Futures Contracts, page 11) will be employed. Options on
foreign currencies are similar to options on stock, except that the option
holder has the right to take or make delivery of a specified amount of foreign
currency, rather than stock.

A portfolio may purchase and write options to hedge the portfolio's securities
denominated in foreign currencies. If there is a decline in the dollar value of
a foreign currency in which the portfolio's securities are denominated, the
dollar value of such securities will decline even though the foreign currency
value remains the same. To hedge against the decline of the foreign currency, a
portfolio may purchase put options on such foreign currency. If the value of the
foreign currency declines, the gain realized on the put option would offset, in
whole or in part, the adverse effect such decline would have on the value of the
portfolio's securities. Alternatively, a portfolio may write a call option on
the foreign currency. If the foreign currency declines, the option would not be
exercised and the decline in the value of the portfolio securities denominated
in such foreign currency would be offset in part by the premium the portfolio
received for the option.

If, on the other hand, the portfolio manager anticipates purchasing a foreign
security and also anticipates a rise in such foreign currency (thereby
increasing the cost of such security), the portfolio may purchase call options
on the foreign currency. The purchase of such options could offset, at least
partially, the effects of the adverse movements of the exchange rates.
Alternatively, a portfolio could write a put option on the currency and, if the
exchange rates move as anticipated, the option would expire unexercised.

A portfolio's successful use of currency exchange options on foreign currencies
depends upon the manager's ability to predict the direction of the currency
exchange markets and political conditions, which requires different skills and
techniques than predicting changes in the securities markets generally. For
instance, if the currency being hedged has moved in a favorable direction, the
corresponding appreciation of the portfolio's securities denominated in such
currency would be partially offset by the premiums paid on the options. Further,
if the currency exchange rate does not change, the portfolio net income would be
less than if the portfolio had not hedged since there are costs associated with
options.

The use of these options is subject to various additional risks. The correlation
between movements in the price of options and the price of the currencies being
hedged is imperfect. The use of these instruments will hedge only the currency
risks associated with investments in foreign securities, not market risks. The
portfolio's ability to establish and maintain positions will depend on market
liquidity. The ability of the portfolio to close out an option depends upon a
liquid secondary market. There is no assurance that liquid secondary markets
will exist for any particular option at any particular time.

Because there are two currencies involved, developments in either or both
countries can affect the values of options on foreign currencies. In addition,
the quantities of currency underlying option contracts represent odd lots in a
market dominated by transactions between banks; this can mean extra transaction
costs upon exercise.

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Option markets may be closed while round-the-clock interbank currency markets
are open, and this can create price and rate discrepancies.

Futures Contracts. The Conservatively Managed Flexible and Aggressively Managed
Flexible Portfolios may, to the extent permitted by applicable regulations,
attempt to reduce the risk of investment in equity securities by hedging a
portion of their equity portfolios through the use of stock index futures
contracts. A stock index futures contract is an agreement in which the seller of
the contract agrees to deliver to the buyer an amount of cash equal to a
specific dollar amount times the difference between the value of a specific
stock index at the close of the last trading day of the contract and the price
at which the agreement is made. No physical delivery of the underlying stocks in
the index is made.

The Conservatively Managed Flexible and Aggressively Managed Flexible Portfolios
may, to the extent permitted by applicable regulations, purchase and sell for
hedging purpose futures contracts on interest-bearing securities (such as U.S.
Treasury bonds and notes) or interest rate indices (referred to collectively as
"interest rate futures contracts").

The Conservatively Managed Flexible and Aggressively Managed Flexible Portfolios
may, to the extent permitted by applicable regulations, purchase and sell
futures contracts on foreign currencies or groups of foreign currencies for
hedging purposes.

When the futures contract is entered into, each party deposits with a broker or
in a segregated custodial account approximately 5% of the contract amount,
called the "initial margin." Subsequent payments to and from the broker, called
the "variation margin," will be made on a daily basis as the underlying
security, index or rate fluctuates making the long and short positions in the
futures contracts more or less valuable, a process known as "marking to the
market." The Board of Directors currently intends to limit futures trading so
that a portfolio will not enter into futures contracts or related options if the
aggregate initial margins and premiums exceed 5% of the fair market value of its
assets, after taking into account unrealized profits and unrealized losses on
any such contracts and options.

A portfolio's successful use of futures contracts depends upon the investment
manager's ability to predict the direction of the relevant market. The
correlation between movement in the price of the futures contract and the price
of the securities or currencies being hedged is imperfect. The ability of a
portfolio to close out a futures position depends on a liquid secondary market.
There is no assurance that liquid secondary markets will exist for any
particular futures contract at any particular time.

There are several additional risks associated with a portfolio's use of futures
contracts for hedging purposes. One such risk arises because of imperfect
correlation between movements in the price of the futures contract and the price
of the securities or currency that are the subject of the hedge. In the case of
futures contracts on stock or interest rate indices, the correlation between the
price of the futures contract and movements in the index might not be perfect.
To compensate for differences in historical volatility, a portfolio could
purchase or sell future contracts with a greater or lesser value than the
securities or currency it wished to hedge or purchase. In addition, temporary
price distortions in the futures market could be caused by a variety of factors.
Further, the ability of a portfolio to close out a futures position depends on a
liquid secondary market. There is no assurance that a liquid secondary market on
an exchange will exist for any particular futures contract at any particular
time. Further, each portfolio's successful use of futures contracts is to some
extent dependent on the ability of the portfolio manager to predict correctly
movements in the direction of the market, interest rates and/or currency
exchange rates.

In addition, the hours of trading of futures contracts may not conform to the
hours during which the portfolio may trade the underlying securities and/or
currency. To the extent that the futures markets close before the securities or
currency markets, significant price and rate movements can take place in the
securities and/or currency markets that cannot be reflected in the futures
markets.

Options on Futures Contracts. To the extent permitted by applicable insurance
law and federal regulations, the Conservatively Managed Flexible and
Aggressively Managed Flexible Portfolios may enter into certain transactions
involving options on stock index futures contracts, options on interest rate
futures contracts, and options on foreign currency futures contracts. An option
on a futures contract gives the purchaser or holder the right, but not the
obligation, to assume a position in a futures contract (a long position if the
option is a call and a short position if the option is a put) at a specified
price at any time during the option exercise period. The writer of the option is
required upon exercise to assume an offsetting futures position (a short
position if the option is a call and a long position if the option is a put).
Upon exercise of the option, the assumption of offsetting futures positions by
the writer and holder of the option will be accomplished by delivery of the
accumulated balance in the writer's futures margin account which represents the
amount by which the market price of the futures contract, at exercise, exceeds,
in the case of a call, or is less than, in the case of a put, the exercise price
of the option on the futures contract. As an alternative to exercise, the holder
or writer of an option may terminate a position by selling or purchasing an
option of the same series. There is no guarantee that such closing transactions
can be effected.

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The portfolios intend to utilize options on futures contracts for the same
purposes that they use the underlying futures contracts.

Options on futures contracts are subject to risks similar to those described
above with respect to option on securities, options on stock indices, and
futures contracts. These risks include the risk that the portfolio manager may
not correctly predict changes in the market, the risk of imperfect correlation
between the option and the securities being hedged, and the risk that there
might not be a liquid secondary market for the option. There is also the risk of
imperfect correlation between the option and the underlying futures contract. If
there were no liquid secondary market for a particular option on a futures
contract, the portfolio might have to exercise an option it held in order to
realize any profit and might continue to be obligated under an option it had
written until the option expired or was exercised. If the portfolio were unable
to close out an option it had written on a futures contract, it would continue
to be required to maintain initial margin and make variation margin payments
with respect to the option position until the option expired or was exercised
against the portfolio.

When-Issued and Delayed Delivery Securities. From time to time, in the ordinary
course of business, the Conservatively Managed Flexible and Aggressively Managed
Flexible Portfolios may purchase equity securities on a when-issued or delayed
delivery basis, that is, delivery and payment can take place a month or more
after the date of the transaction. The portfolios will limit such purchases to
those in which the date for delivery and payment falls within 120 days of the
date of the commitment. A portfolio will make commitments for such when-issued
transactions only with the intention of actually acquiring the securities. A
portfolio's custodian will maintain, in a separate account, cash, U.S.
Government securities or other high grade debt obligations having a value equal
to or greater than such commitments. If a portfolio chooses to dispose of the
right to acquire a when-issued security prior to its acquisition, it could, as
with the disposition of any other portfolio security, incur a gain or loss due
to market fluctuations.

In addition, the short-term portions of the portfolios may purchase money market
securities on a when-issued or delayed delivery basis on the terms set forth
under item 6 in SECURITIES IN WHICH THE MONEY MARKET PORTFOLIO MAY CURRENTLY
INVEST, page 21.

Short Sales. The Conservatively Managed Flexible and Aggressively Managed
Flexible Portfolios may sell securities they do not own in anticipation of a
decline in the market value of those securities ("short sales"). To complete
such a transaction, the portfolio will borrow the security to make delivery to
the buyer. The portfolio is then obligated to replace the security borrowed by
purchasing it at the market price at the time of replacement. The price at such
time may be more or less than the price at which the security was sold by the
portfolio. Until the security is replaced, the portfolio is required to pay to
the lender any interest which accrues during the period of the loan. To borrow
the security the portfolio may be required to pay a premium which would increase
the cost of the security sold. The proceeds of the short sale will be retained
by the broker to the extent necessary to meet margin requirements until the
short position is closed out. Until the portfolio replaces the borrowed
security, it will (a) maintain in a segregated account cash or U.S. Government
securities at such a level that the amount deposited in the account plus the
amount deposited with the broker as collateral will equal the current market
value of the security sold short and will not be less than the market value of
the security at the time it was sold short or (b) otherwise cover its short
position.

The portfolio will incur a loss as a result of the short sale if the price of
the security increases between the date of the short sale and the date on which
the portfolio replaces the borrowed security. The portfolio will realize a gain
if the security declines in price between those dates. This result is the
opposite of what one would expect from a cash purchase of a long position in a
security. The amount of any gain will be decreased, and the amount of any loss
will be increased, by the amount of any premium or interest paid in connection
with the short sale. No more than 25% of any portfolio's net assets will be,
when added together: (i) deposited as collateral for the obligation to replace
securities borrowed to effect short sales and (ii) allocated to segregated
accounts in connection with short sales.

Short Sales Against the Box. The portfolios may make short sales of securities
or maintain a short position, provided that at all times when a short position
is open the portfolio owns an equal amount of such securities or securities
convertible into or exchangeable, with or without payment of any further
consideration, for an equal amount of the securities of the same issuer as the
securities sold short (a "short sale against the box"); provided, that if
further consideration is required in connection with the conversion or exchange,
cash or U.S. Government securities in an amount equal to such consideration must
be put in a segregated account.

Interest Rate Swaps. The fixed income portions of the Conservatively Managed
Flexible and Aggressively Managed Flexible Portfolios may use interest rate
swaps to increase or decrease a portfolio's exposure to long- or short-term
interest rates. No portfolio currently intends to invest more than 5% of its net
assets at any one time in interest rate swaps.

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<PAGE>

Interest rate swaps, in their most basic form, involve the exchange by a
portfolio with another party of their respective commitments to pay or receive
interest. For example, a portfolio might exchange its right to receive certain
floating rate payments in exchange for another party's right to receive fixed
rate payments. Interest rate swaps can take a variety of other forms, such as
agreements to pay the net differences between two different indices or rates,
even if the parties do not own the underlying instruments. Despite their
differences in form, the function of interest rate swaps is generally the same -
to increase or decrease a portfolio's exposure to long- or short-term interest
rates. For example, a portfolio may enter into a swap transaction to preserve a
return or spread on a particular investment or a portion of its portfolio or to
protect against any increase in the price of securities the portfolio
anticipates purchasing at a later date.

The use of swap agreements is subject to certain risks. As with options and
futures, if the investment manager's prediction of interest rate movements is
incorrect, the portfolio's total return will be less than if the portfolio had
not used swaps. In addition, if the counterparty's creditworthiness declines,
the value of the swap would likely decline. Moreover, there is no guarantee that
a portfolio could eliminate its exposure under an outstanding swap agreement by
entering into an offsetting swap agreement with the same or another party.

A portfolio will maintain appropriate liquid assets in a segregated custodial
account to cover its current obligations under swap agreements. If a portfolio
enters into a swap agreement on a net basis, it will segregate assets with a
daily value at least equal to the excess, if any, of the portfolio's accrued
obligations under the swap agreement over the accrued amount the portfolio is
entitled to receive under the agreement. If a portfolio enters into a swap
agreement on other than a net basis, it will segregate assets with a value equal
to the full amount of the portfolio's accrued obligations under the agreement.

Loans of Portfolio Securities. The portfolios may from time to time lend the
securities they hold to broker-dealers, provided that such loans are made
pursuant to written agreements and are continuously secured by collateral in the
form of cash, U.S. Government securities or irrevocable standby letters of
credit in an amount equal to at least the market value at all times of the
loaned securities plus the accrued interest and dividends. During the time
securities are on loan, the portfolio will continue to receive the interest and
dividends or amounts equivalent thereto on the loaned securities while receiving
a fee from the borrower or earning interest on the investment of the cash
collateral. The right to terminate the loan will be given to either party
subject to appropriate notice. Upon termination of the loan, the borrower will
return to the lender securities identical to the loaned securities. The
portfolio will not have the right to vote securities on loan, but would
terminate the loan and retain the right to vote if that were considered
important with respect to the investment.

The primary risk in lending securities is that the borrower may become insolvent
on a day on which the loaned security is rapidly advancing in price. In such
event, if the borrower fails to return the loaned securities, the existing
collateral might be insufficient to purchase back the full amount of the
security loaned, and the borrower would be unable to furnish additional
collateral. The borrower would be liable for any shortage; but the portfolio
would be an unsecured creditor with respect to such shortage and might not be
able to recover all or any of it. However, this risk may be minimized by a
careful selection of borrowers and securities to be lent and by monitoring
collateral.

No portfolio will lend securities to broker-dealers affiliated with The
Prudential, including Prudential Securities Incorporated. This will not affect a
portfolio's ability to maximize its securities lending opportunities.

Illiquid Securities. The portfolios may invest up to 15% of its net assets in
illiquid securities. Illiquid securities are those which may not be sold in the
ordinary course of business within seven days at approximately the value at
which the portfolio has valued them. Variable and floating rate instruments that
cannot be disposed of within seven days and repurchase agreements with a
maturity of greater than seven days are considered illiquid.

The portfolios may purchase securities which are not registered under the
Securities Act of 1933 but which can be sold to qualified institutional buyers
in accordance with Rule 144A under that Act. Any such security will not be
considered illiquid so long as it is determined by the adviser, acting under
guidelines approved and monitored by the Board of Directors, that an adequate
trading market exists for that security. In making that determination, the
adviser will consider, among other relevant factors: (1) the frequency of trades
and quotes for the security; (2) the number of dealers willing to purchase or
sell the security and the number of other potential purchasers; (3) dealer
undertakings to make a market in the security; and (4) the nature of the
security and the nature of the marketplace trades. A portfolio's treatment of
Rule 144A securities as liquid could have the effect of increasing the level of
portfolio illiquidity to the extent that qualified institutional buyers become,
for a time, uninterested in purchasing these securities. In addition, the
adviser, acting under guidelines approved and monitored by the Board of
Directors, may conditionally determine, for purposed of the 15% test, that
certain commercial paper issued in reliance on the exemption from registration
in Section 4(2) of the Securities Act of 1933 will not be considered illiquid,
whether or not it may be resold under Rule 144A. To make that determination, the
following conditions must be met: (1) the security must not be traded flat or in
default as to principal or interest; (2) the security must be rated in one of
the two highest rating categories by at least two nationally recognized
statistical rating

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organizations ("NRSROs"), or if only one NRSRO rates the security, by that
NRSRO; if the security is unrated, the adviser must determine that the security
is of equivalent quality; and (3) the adviser must consider the trading market
for the specific security, taking into account all relevant factors. The adviser
will continue to monitor the liquidity of any Rule 144A security or any Section
4(2) commercial paper which has been determined to be liquid and, if a security
is no longer liquid because of changed conditions, the holdings of illiquid
securities will be reviewed to determine if any steps are required to assure
that the 15% test continues to be satisfied.

Forward Foreign Currency Exchange Contracts. To the extent permitted by
applicable insurance law, the Conservatively Managed Flexible and Aggressively
Managed Flexible Portfolios may purchase securities denominated in foreign
currencies. To address the currency fluctuation risk that such investments
entail, these portfolios may enter into forward foreign currency exchange
contracts in several circumstances. When a portfolio enters into a contract for
the purchase or sale of a security denominated in a foreign currency, or when a
portfolio anticipates the receipt in a foreign currency of dividends or interest
payments on a security which it holds, the portfolio may desire to "lock-in" the
U.S. dollar price of the security or the U.S. dollar equivalent of such dividend
or interest payment, as the case may be. By entering into a forward contract for
a fixed amount of dollars, for the purchase or sale of the amount of foreign
currency involved in the underlying transactions, the portfolio will be able to
protect itself against a possible loss resulting from an adverse change in the
relationship between the U.S. dollar and the subject foreign currency during the
period between the date on which the security is purchased or sold, or on which
the dividend or interest payment is declared, and the date on which such
payments are made or received.

Additionally, when a portfolio's manager believes that the currency of a
particular foreign country may suffer a substantial decline against the U.S.
dollar, the portfolio may enter into a forward contract for a fixed amount of
dollars, to sell the amount of foreign currency approximating the value of some
or all of the portfolio securities denominated in such foreign currency. The
precise matching of the forward contract amounts and the value of the securities
involved will not generally be possible since the future value of securities in
foreign currencies will change as a consequence of market movements in the value
of those securities between the date on which the forward contract is entered
into and the date it matures. The projection of short-term currency market
movement is extremely difficult, and the successful execution of a short-term
hedging strategy is highly uncertain. The portfolios will not enter into such
forward contracts or maintain a net exposure to such contracts where the
consummation of the contracts would obligate a portfolio to deliver an amount of
foreign currency in excess of the value of the securities or other assets
denominated in that currency held by the portfolio. Under normal circumstances,
consideration of the prospect for currency parities will be incorporated into
the long-term investment decisions made with regard to overall diversification
strategies. However, the portfolios believe that it is important to have the
flexibility to enter into such forward contracts when it is determined that the
best interests of the portfolios will thereby be served. A portfolio's custodian
will place cash or liquid high-grade equity or debt securities into a segregated
account of the portfolio in an amount equal to the value of the portfolio's
total assets committed to the consummation of forward foreign currency exchange
contracts. If the value of the securities placed in the segregated account
declines, additional cash or securities will be placed in the account on a daily
basis so that the value of the account will equal the amount of the portfolio's
commitments with respect to such contracts.

The portfolios generally will not enter into a forward contract with a term of
greater than 1 year. At the maturity of a forward contract, a portfolio may
either sell the portfolio security and make delivery of the foreign currency or
it may retain the security and terminate its contractual obligation to deliver
the foreign currency by purchasing an "offsetting" contract with the same
currency trader obligating it to purchase, on the same maturity date, the same
amount of the foreign currency.

It is impossible to forecast with absolute precision the market value of a
particular portfolio security at the expiration of the contract. Accordingly, it
may be necessary for a portfolio to purchase additional foreign currency on the
spot market (and bear the expense of such purchase) if the market value of the
security is less than the amount of foreign currency that the portfolio is
obligated to deliver and if a decision is made to sell the security and make
delivery of the foreign currency.

If a portfolio retains the portfolio security and engages in an offsetting
transaction, the portfolio will incur a gain or a loss (as described below) to
the extent that there has been movement in forward contract prices. Should
forward prices decline during the period between the portfolio's entering into a
forward contract for the sale of a foreign currency and the date it enters into
an offsetting contract for the purchase of the foreign currency, the portfolio
will realize a gain to the extent that the price of the currency it has agreed
to sell exceeds the price of the currency it has agreed to purchase. Should
forward prices increase, the portfolio will suffer a loss to the extent that the
price of the currency it has agreed to purchase exceeds the price of the
currency it has agreed to sell.

The portfolios' dealing in forward foreign currency exchange contracts will be
limited to the transactions described above. Of course, the portfolios are not
required to enter into such transactions with regard to their foreign

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currency-denominated securities. It also should be realized that this method of
protecting the value of the portfolio securities against a decline in the value
of a currency does not eliminate fluctuations in the underlying prices of the
securities which are unrelated to exchange rates. Additionally, although such
contracts tend to minimize the risk of loss due to a decline in the value of the
hedge currency, at the same time they tend to limit any potential gain which
might result should the value of such currency increase.

Although the portfolios value their assets daily in terms of U.S. dollars, they
do not intend physically to convert their holdings of foreign currencies into
U.S. dollars on a daily basis. They will do so from time to time, and investors
should be aware of the costs of currency conversion. Although foreign exchange
dealers do not charge a fee for conversion, they do realize a profit based on
the difference (the "spread") between the prices at which they are buying and
selling various currencies. Thus, a dealer may offer to sell a foreign currency
to a portfolio at one rate, while offering a lesser rate of exchange should the
portfolio desire to resell that currency to the dealer.

INVESTMENT RESTRICTIONS

Set forth below are certain investment restrictions applicable to the
portfolios. Restrictions 1, 3, 5, and 8-11 are fundamental and may not be
changed without shareholder approval as required by the 1940 Act. Restrictions
2, 4, 6, 7, and 12 are not fundamental and may be changed by the Board of
Directors without shareholder approval.

Neither of the portfolios available to PRUvider Contract owners will:

1. Buy or sell real estate and mortgages, although the portfolios may buy and
sell securities that are secured by real estate and securities of real
estate investment trusts and of other issuers that engage in real estate
operation. Buy or sell commodities or commodities contracts, except that
the Balanced Portfolios may purchase and sell stock index futures
contracts and related options, purchase and sell interest rate futures
contracts and related options, and purchase and sell foreign currency
futures contracts and related options and forward foreign currency
exchange contracts.

2. Except as part of a merger, consolidation, acquisition or reorganization,
invest more than 5% of the value of its total assets in the securities of
any one investment company or more than 10% of the value of its total
assets, in the aggregate, in the securities of two or more investment
companies, or acquire more than 3% of the total outstanding voting
securities of any one investment company.

3. Acquire securities for the purpose of exercising control or management of
any company except in connection with a merger, consolidation, acquisition
or reorganization.

4. Make short sales of securities or maintain a short position, except that
the Conservatively Managed Flexible and Aggressively Managed Flexible
Portfolios may sell securities short up to 25% of their net assets and may
make short sales against the box. Collateral arrangements entered into
with respect to options, futures contracts and forward contracts are not
deemed to be short sales. Collateral arrangements entered into with
respect to interest rate swap agreements are not deemed to be short sales.

5. Purchase securities on margin or otherwise borrow money or issue senior
securities except that the fixed income portions of the Balanced
Portfolios may enter into reverse repurchase agreements, dollar rolls and
may purchase securities on a when-issued and delayed delivery basis;
except that the money market portion of any portfolio may enter into
reverse repurchase agreements and may purchase securities on a when-issued
and delayed delivery basis; and except that the Aggressively Managed
Flexible and Conservatively Managed Flexible Portfolios may purchase
securities on a when-issued or a delayed delivery basis. The Series Fund
may also obtain such short-term credit as it needs for the clearance of
securities transactions and may borrow from a bank for the account of any
portfolio as a temporary measure to facilitate redemptions (but not for
leveraging or investment) or to exercise an option, an amount that does
not exceed 5% of the value of the portfolio's total assets (including the
amount owed as a result of the borrowing) at the time the borrowing is
made. Interest paid on borrowings will not be available for investment.
Collateral arrangements with respect to futures contracts and options
thereon and forward foreign currency exchange contracts (as permitted by
restriction no.1) are not deemed to be the issuance of a senior security
or the purchase of a security on margin. Collateral arrangements with
respect to the writing of options on debt securities, equity securities,
stock indices and foreign currencies by the Conservatively Managed
Flexible and Aggressively Managed Flexible Portfolios are not deemed to be
the issuance of a senior security or the purchase of a security on margin.
Collateral arrangements entered into by the Balanced Portfolios with
respect to interest rate swap agreements are not deemed to be the issuance
of a senior security or the purchase of a security on margin.

6. Enter into reverse repurchase agreements if, as a result, the portfolio's
obligations with respect to reverse repurchase agreements would exceed 10%
of the portfolio's net assets (defined to mean total assets at market
value less liabilities other than reverse repurchase agreements); except
that the fixed income portions

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<PAGE>

of the Conservatively Managed Flexible and Aggressively Managed Flexible
Portfolios may enter into reverse repurchase agreements and dollar rolls
provided that the portfolio's obligations with respect to those
instruments do not exceed 30% of the portfolio's net assets (defined to
mean total assets at market value less liabilities other than reverse
repurchase agreements and dollar rolls).

7. Pledge or mortgage assets, except that no more than 10% of the value of
any portfolio may be pledged (taken at the time the pledge is made) to
secure authorized borrowing and except that a portfolio may enter into
reverse repurchase agreements. Collateral arrangements entered into with
respect to futures and forward contracts and the writing of options are
not deemed to be the pledge of assets. Collateral arrangements entered
into with respect to interest rate swap agreements are not deemed to be
the pledge of assets.

8. Lend money, except that loans of up to 10% of the value of each portfolio
may be made through the purchase of privately placed bonds, debentures,
notes, and other evidences of indebtedness of a character customarily
acquired by institutional investors that may or may not be convertible
into stock or accompanied by warrants or rights to acquire stock.
Repurchase agreements and the purchase of publicly traded debt obligations
are not considered to be "loans" for this purpose and may be entered into
or purchased by a portfolio in accordance with its investment objectives
and policies.

9. Underwrite the securities of other issuers, except where the Series Fund
may be deemed to be an underwriter for purposes of certain federal
securities laws in connection with the disposition of portfolio securities
and with loans that a portfolio may make pursuant to item 8 above.

10. Make an investment unless, when considering all its other investments, 75%
of the value of a portfolio's assets would consist of cash, cash items,
obligations of the United States Government, its agencies or
instrumentalities, and other securities. For purposes of this restriction,
"other securities" are limited for each issuer to not more than 5% of the
value of a portfolio's assets and to not more than 10% of the issuer's
outstanding voting securities held by the Series Fund as a whole. Some
uncertainty exists as to whether certain of the types of bank obligations
in which a portfolio may invest, such as certificates of deposit and
bankers' acceptances, should be classified as "cash items" rather than
"other securities" for purposes of this restriction, which is a
diversification requirement under the 1940 Act. Interpreting most bank
obligations as "other securities" limits the amount a portfolio may invest
in the obligations of any one bank to 5% of its total assets. If there is
an authoritative decision that any of these obligations are not
"securities" for purposes of this diversification test, this limitation
would not apply to the purchase of such obligations.

11. Purchase securities of a company in any industry if, as a result of the
purchase, a portfolio's holdings of securities issued by companies in that
industry would exceed 25% of the value of the portfolio, except that this
restriction does not apply to purchases of obligations issued or
guaranteed by the U.S. Government, its agencies and instrumentalities or
issued by domestic banks. For purposes of this restriction, neither
finance companies as a group nor utility companies as a group are
considered to be a single industry and will be grouped instead according
to their services; for example, gas, electric, and telephone utilities
will each be considered a separate industry. For purposes of this
exception, domestic banks shall include all banks which are organized
under the laws of the United States or a state (as defined in the 1940
Act), U.S. branches of foreign banks that are subject to the same
regulations as U.S. banks and foreign branches of domestic banks (as
permitted by the SEC).

12. Invest more than 15% of its net assets in illiquid securities or invest
more than 10% of its net assets in the securities of unseasoned issuers.
For purposes of this restriction, (a) illiquid securities are those deemed
illiquid pursuant to SEC regulations and guidelines, as they may be
revised from time to time: and (b) unseasoned issuers are issuers (other
than U.S. Government agencies or instrumentalities) having a record,
together with predecessors, of less than 3 years' continuous operation.

The investments of the various portfolios are generally subject to certain
additional restrictions under the laws of the State of New Jersey. In the event
of future amendments to the applicable New Jersey statutes, each portfolio will
comply, without the approval of the shareholders, with the statutory
requirements as so modified. The pertinent provisions of New Jersey law as they
stand are, in summary form, as follows:

1. An Account may not purchase any evidence of indebtedness issued, assumed
or guaranteed by any institution created or existing under the laws of the
U.S., any U.S. state or territory, District of Columbia, Puerto Rico,
Canada or any Canadian province, if such evidence of indebtedness is in
default as to interest. "Institution" includes any corporation, joint
stock association, business trust, business joint venture, business
partnership, savings and loan association, credit union or other mutual
savings institution.

2. The stock of a corporation may not be purchased unless: (i) the
corporation has paid a cash dividend on the class of stock during each of
the past 5 years preceding the time of purchase; or (ii) during the 5-year
period the corporation had aggregate earnings available for dividends on
such class of stock sufficient to pay average dividends of 4% per annum
computed upon the par value of such stock or upon stated value if the
stock has

16
<PAGE>

no par value. This limitation does not apply to any class of stock which
is preferred as to dividends over a class of stock whose purchase is not
prohibited.

3. Any common stock purchased must be: (i) listed or admitted to trading on a
securities exchange in the United States or Canada; or (ii) included in
the National Association of Securities Dealers' national price listings of
"over-the-counter" securities; or (iii) determined by the Commissioner of
Insurance of New Jersey to be publicly held and traded and have market
quotations available.

4. Any security of a corporation may not be purchased if after the purchase
more than 10% of the market value of the assets of a portfolio would be
invested in the securities of such corporation.

As a result of these currently applicable requirements of New Jersey law, which
impose substantial limitations on the ability of the Series Fund to invest in
the stock of companies whose securities are not publicly traded or who have not
recorded a 5-year history of dividend payments or earnings sufficient to support
such payments, the portfolios will not generally hold the stock of newly
organized corporations. Nonetheless, an investment not otherwise eligible under
items 1 or 2 above may be made if, after giving effect to the investment, the
total cost of all such non-eligible investments does not exceed 5% of the
aggregate market value of the assets of the portfolio.

Investment limitations also arise under the insurance laws and regulations of
Arizona and may arise under the laws and regulations of other states. Although
compliance with the requirements of New Jersey law set forth above will
ordinarily result in compliance with any applicable laws of other states, under
some circumstances the laws of other states could impose additional restrictions
on the portfolios. For example, the Series Fund will generally invest no more
than 10% of its assets in the obligations of banks of the foreign countries
described in item 2 of SECURITIES IN WHICH THE MONEY MARKET PORTFOLIO MAY
CURRENTLY INVEST, page 21.

Current federal income tax laws require that the assets of each portfolio be
adequately diversified so that The Prudential and other insurers with separate
accounts which invest in the Series Fund and not the Contract owners, are
considered the owners of assets held in the Account for federal income tax
purposes. See Tax Treatment of Contract Benefits, page 2. The Prudential intends
to maintain the assets of each portfolio pursuant to those diversification
requirements.

INVESTMENT MANAGEMENT ARRANGEMENTS AND EXPENSES

The Series Fund and The Prudential have entered into an Investment Advisory
Agreement under which The Prudential will, subject to the direction of the Board
of Directors of the Series Fund, be responsible for the management of the Series
Fund, and provide investment advice and related services to each portfolio. As
noted in the prospectus, The Prudential has also entered into a Service
Agreement with its wholly-owned subsidiary, The Prudential Investment
Corporation ("PIC"), which provides that PIC will furnish to The Prudential such
services as The Prudential may require in connection with The Prudential's
performance of its obligations under the Investment Advisory Agreement.

The investment management fee for the Conservatively Managed Flexible Portfolio
is equal to an annual rate of 0.55% of the average daily net assets of each of
the portfolios. For the Aggressively Managed Flexible Portfolio, the fee is
equal to an annual rate of 0.6% of the average daily net assets of the
portfolio.

The Investment Advisory Agreement requires The Prudential to pay for maintaining
any Prudential staff and personnel who perform clerical, accounting,
administrative, and similar services for the Series Fund, other than investor
services and any daily Series Fund accounting services. It also requires The
Prudential to pay for the equipment, office space and related facilities
necessary to perform these services and the fees or salaries of all officers and
directors of the Series Fund who are affiliated persons of The Prudential or any
subsidiary of The Prudential.

Each portfolio pays all other expenses incurred in its individual operation and
also pays a portion of the Series Fund's general administrative expenses
allocated on the basis of the asset size of the respective portfolios. Expenses
that will be borne directly by the portfolios include redemption expenses,
expenses of portfolio transactions, shareholder servicing costs, interest,
certain taxes, charges of the Custodian and Transfer Agent, and other expenses
attributable to a particular portfolio. Expenses that will be allocated among
all portfolios include legal expenses, state franchise taxes, auditing services,
costs of printing proxies, costs of stock certificates, Securities and Exchange
Commission fees, accounting costs, the fees and expenses of directors of the
Series Fund who are not affiliated persons of The Prudential or any subsidiary
of The Prudential, and other expenses properly

17
<PAGE>

payable by the entire Series Fund. If the Series Fund is sued, litigation costs
may be directly applicable to one or more portfolios or allocated on the basis
of the size of the respective portfolios, depending upon the nature of the
lawsuit. The Series Fund's Board of Directors has determined that this is an
appropriate method of allocating expenses.

Under the Investment Advisory Agreement, The Prudential has agreed to refund to
the Conservatively Managed Flexible and Aggressively Managed Flexible Portfolios
the portion of the investment management fee for that portfolio equal to the
amount that the aggregate annual ordinary operating expenses of that portfolio
(excluding interest, taxes, and brokerage fees and commissions but including
investment management fees) exceeds 0.75% of the portfolio's average daily net
assets.

The Investment Advisory Agreement with The Prudential was most recently approved
by the Series Fund's Board of Directors, including a majority of the Directors
who are not interested persons of The Prudential, on February 28, 1995 with
respect to the Balanced Portfolios. The Investment Advisory Agreement was most
recently approved by shareholders in accordance with instructions from Contract
owners at their 1989 annual meeting with respect to the Balanced Portfolios. The
Agreement will continue in effect if approved annually by: (1) a majority of the
non-interested persons of the Series Fund's Board of Directors; and (2) by a
majority of the entire Board of Directors or by a majority vote of the
shareholders of each portfolio. The required shareholder approval of the
Agreement shall be effective with respect to any portfolio if a majority of the
voting shares of that portfolio vote to approve the Agreement, even if the
Agreement is not approved by a majority of the voting shares of any other
portfolio or by a majority of the voting shares of the entire Series Fund. The
Agreement provides that it may not be assigned by The Prudential and that it may
be terminated upon 60 days' notice by the Series Fund's Board of Directors or by
a majority vote of its shareholders. The Prudential may terminate the Agreement
upon 90 days' notice.

The Service Agreement between The Prudential and PIC was most recently ratified
by shareholders of the Series Fund at their 1989 annual meeting with respect to
the Balanced Portfolios. The Service Agreement between The Prudential and PIC
will continue in effect as to the Series Fund for a period of more than 2 years
from its execution, only so long as such continuance is specifically approved at
least annually in the same manner as the Investment Advisory Agreement between
The Prudential and the Series Fund. The Service Agreement may be terminated by
either party upon not less than 30 days' prior written notice to the other
party, will terminate automatically in the event of its assignment, and will
terminate automatically as to the Series Fund in the event of the assignment or
termination of the Investment Advisory Agreement between The Prudential and the
Series Fund. The Prudential is not relieved of its responsibility for all
investment advisory services under the Investment Advisory Agreement. The
Service Agreement provides for The Prudential to reimbursement PIC for its costs
and expenses incurred in furnishing investment advisory services.

The Prudential also serves as the investment advisor to several other investment
companies. When investment opportunities arise that may be appropriate for more
than one entity for which The Prudential serves as investment advisor, The
Prudential will not favor one over another and may allocate investments among
them in an impartial manner believed to be equitable to each entity involved.
The allocations will be based on each entity's investment objectives and its
current cash and investment positions. Because the various entities for which
The Prudential acts as investor advisor have different investment objectives and
positions, The Prudential may from time to time buy a particular security for
one or more such entities while at the same time it sells such securities for
another.

PORTFOLIO TRANSACTIONS AND BROKERAGE

The Prudential is responsible for decisions to buy and sell securities, options
on securities and indices, and futures and related options for the Series Fund.
The Prudential is also responsible for the selection of brokers, dealers, and
futures commission merchants to effect the transactions and the negotiation of
brokerage commissions, if any. Broker-dealers may receive brokerage commissions
on Series Fund portfolio transactions, including options and the purchase and
sale of underlying securities upon the exercise of options. Orders may be
directed to any broker or futures commission merchant including, to the extent
and in the manner permitted by applicable law, Prudential Securities
Incorporated, an indirect wholly-owned subsidiary of The Prudential.

Bonds, including convertible bonds, and equity securities traded in the
over-the-counter market are generally traded on a "net" basis with dealers
acting as principal for their own accounts without a stated commission, although
the price of the security usually includes a profit to the dealer. In
underwritten offerings, securities are purchased at a fixed price which includes
an amount of compensation to the underwriter, generally referred to as the
underwriter's concession or discount. On occasion, certain money market
instruments and U.S. Government agency securities may be purchased directly from
the issuer, in which case no commissions or discounts are paid. The Series Fund
will not deal with Prudential Securities Incorporated in any transaction in
which Prudential

18
<PAGE>

Securities Incorporated acts as principal. Thus, it will not deal with
Prudential Securities Incorporated if execution involves Prudential Securities
Incorporated's acting as principal with respect to any part of the Series Fund's
order.

Portfolio securities may not be purchased from any underwriting or selling
syndicate of which Prudential Securities Incorporated, during the existence of
the syndicate, is a principal underwriter (as defined in the 1940 Act) except in
accordance with rules of the Securities and Exchange Commission. This
limitation, in the opinion of the Series Fund, will not significantly affect the
portfolios' current ability to pursue their respective investment objectives.
However, in the future it is possible that the Series Fund may under other
circumstances be at a disadvantage because of this limitation in comparison to
other funds not subject to such a limitation.

In placing orders for portfolio securities of the Series Fund, The Prudential is
required to give primary consideration to obtaining the most favorable price and
efficient execution. Within the framework of this policy, The Prudential will
consider the research and investment services provided by brokers, dealers or
futures commission merchants who effect or are parties to portfolio transactions
of the Series Fund, The Prudential or The Prudential's other clients. Such
research and investment services are those which brokerage houses customarily
provide to institutional investors and include statistical and economic data and
research reports on particular companies and industries. Such services are used
by The Prudential in connection with all of its investment activities, and some
of such services obtained in connection with the execution of transactions for
the Series Fund may be used in managing other investment accounts. Conversely,
brokers, dealers or futures commission merchants furnishing such services may be
selected for the execution of transactions for such other accounts, and the
services furnished by such brokers, dealers or futures commission merchants may
be used by The Prudential in providing investment management for the Series
Fund. Commission rates are established pursuant to negotiations with the broker,
dealer or futures commission merchant based on the quality and quantity of
execution services provided by the broker in the light of generally prevailing
rates. The Prudential's policy is to pay higher commissions to brokers, other
than Prudential Securities Incorporated, for particular transactions than might
be charged if a different broker had been selected on occasions when, in The
Prudential's opinion, this policy furthers the objective of obtaining best price
and execution. The Prudential's present policy is not to permit higher
commissions to be paid on Series Fund transactions in order to secure research,
statistical, and investment services from brokers. The Prudential might in the
future authorize the payment of such higher commissions but only with the prior
concurrence of the Board of Directors of the Series Fund, if it is determined
that the higher commissions are necessary in order to secure desired research
and are reasonable in relation to all the services that the broker provides.

Subject to the above considerations, Prudential Securities Incorporated may act
as a securities broker or futures commission merchant for the Series Fund. In
order for Prudential Securities Incorporated to effect any portfolio
transactions for the Series Fund, the commissions received by Prudential
Securities Incorporated must be reasonable and fair compared to the commissions
received by other brokers in connection with comparable transactions involving
similar securities being purchased or sold on a securities exchange during a
comparable period of time. This standard would allow Prudential Securities
Incorporated to receive no more than the remuneration that would be expected to
be received by an unaffiliated broker or futures commission merchant in a
commensurate arm's-length transaction. Furthermore, the Board of Directors of
the Series Fund, including a majority of the non-interested directors, has
adopted procedures which are reasonably designed to provide that any
commissions, fees or other remuneration paid to Prudential Securities
Incorporated are consistent with the foregoing standard. In accordance with Rule
11a2-2(T) under the Securities Exchange Act of 1934, Prudential Securities
Incorporated may not retain compensation for effecting transactions on a
securities exchange for the Series Fund unless the Series Fund has expressly
authorized the retention of such compensation in a written contract executed by
the Series Fund and Prudential Securities Incorporated. Rule 11a2-2(T) provides
that Prudential Securities Incorporated must furnish to the Series Fund at least
annually a statement setting forth the total amount of all compensation retained
by Prudential Securities Incorporated from transactions effected for the Series
Fund during the applicable period. Brokerage and futures transactions with
Prudential Securities Incorporated are also subject to such fiduciary standards
as may be imposed by applicable law.

For the years 1994, 1993, and 1992, the Series Fund paid a total of $11,579,886,
$9,492,283, and $5,802,658, respectively, in brokerage commissions for all
portfolios. Of those amounts, $560,155, $977,695, and $873,920, for 1994, 1993,
and 1992, respectively, was paid out to Prudential Securities Incorporated. For
1994, the commissions paid to this affiliated broker constituted 4.80% of the
total commissions paid by the Series Fund for that year. Transactions through
this affiliated broker accounted for 6.04% of the aggregate dollar amount of
transactions for all of the portfolios of the Series Fund involving the payment
of commissions.

DETERMINATION OF NET ASSET VALUE

Shares in the Series Fund are currently offered continuously, without sales
charge, at prices equal to the respective net asset values of the portfolios,
only to separate accounts to fund benefits payable under the Contracts described
in the variable life insurance and variable annuity prospectuses. The Series
Fund may at some later date also offer

19
<PAGE>

its shares to other separate accounts of The Prudential or other insurers. The
Prudential acts as principal underwriter to the Series Fund. As such, The
Prudential receives no underwriting compensation from the Series Fund.

As noted in the prospectus, the net asset value of the shares of each portfolio
is determined once daily on each day the New York Stock Exchange ("NYSE") is
open for business. The NYSE is open for business Monday through Friday except
for the days on which the following holidays are observed: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day.

In determining the net asset value of any intermediate or long-term fixed income
securities of the Balanced Portfolios (other than debt obligations with
remaining maturities of less than 60 days, which are valued at amortized cost)
will be valued utilizing an independent pricing service to determine valuations
for normal institutional size trading units of securities. The pricing service
considers such factors as security prices, yields, maturities, call features,
ratings, and developments relating to specific securities in arriving at
securities valuations.

All short-term debt obligations in the money market portions of the Balanced
Portfolios of 12 months maturity or less are valued on an amortized cost basis
in accordance with an order obtained from the Securities and Exchange
Commission. This means that each obligation will be valued initially at its
purchase price and thereafter by amortizing any discount or premium uniformly to
maturity, regardless of the impact of fluctuating interest rates on the market
value of the obligation. This highly practical method of valuation is in
widespread use and almost always results in a value that is extremely close to
the actual market value. In order to continue to utilize the amortized cost
method of valuation, the Money Market Portfolio may not purchase any security
with a remaining maturity of more than 12 months and must maintain a
dollar-weighted average portfolio maturity of 120 days or less. In the event of
sizeable changes in interest rates, however, the value determined by this method
may be higher or lower than the price that would be received if the obligation
were sold. The Series Fund's Board of Directors has established procedures to
monitor whether any material deviation occurs and, if so, will promptly consider
what action, if any, should be initiated to prevent unfair results to Contract
owners. The short-term portion of these portfolios may be invested only in high
quality instruments, as described in SECURITIES IN WHICH THE MONEY MARKET
PORTFOLIO MAY CURRENTLY INVEST, page 21.

The net asset value of the common stocks and convertible debt securities of the
portfolios will be determined in the following manner. Any security for which
the primary market is on an exchange is generally valued at the last sale price
on such exchange as of the close of the NYSE (which is currently 4:00 p.m. New
York City time) or, in the absence of recorded sales, at the mean between the
most recently quoted bid and asked prices. NASDAQ National Market System equity
securities are valued at the last sale price or, if there was no sale on such
day, at the mean between the most recently quoted bid and asked prices. Other
over-the-counter equity securities are valued at the mean between the most
recently quoted bid and asked prices. Convertible debt securities that are
actively traded in the over-the-counter market, including listed securities for
which the primary market is believed to be over-the-counter, are valued at the
mean between the most recently quoted bid and asked prices. Corporate bonds
(other than convertible debt securities) are valued on the same basis as
intermediate or long-term fixed income securities, as described above.
Short-term debt instruments which mature in less than 60 days are valued at
amortized cost. For valuation purposes, quotations of foreign securities in a
foreign currency are converted to U.S. dollar equivalents.

Generally, trading in foreign securities, as well as corporate bonds, U.S.
Government securities, and money market instruments, is substantially completed
each day at various times prior to the close of the NYSE. The values of any such
securities are determined as of such times for purposes of computing a
portfolio's net asset value. Foreign currency exchange rates are also generally
determined prior to the close of the NYSE. If an extraordinary event occurs
after the close of an exchange on which that security is traded, the security
will be valued at fair value as determined in good faith by the applicable
portfolio manager under procedures established by and under the general
supervision of the Series Fund's Board of Directors.

With respect to all the portfolios which utilize such investments, options on
stock and stock indices traded on national securities exchanges are valued at
the average of the quoted bid and asked prices as of the close of the respective
exchange (which is currently 4:10 p.m. New York City time). Futures contracts
are marked to market daily, and options thereon are valued at their last sale
price, as of the close of the applicable commodities exchanges (which is
currently 4:15 p.m. New York City time).

Securities or assets for which market quotations are not readily available will
be valued at fair value as determined by The Prudential under the direction of
the Board of Directors of the Series Fund.

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<PAGE>

SECURITIES IN WHICH THE MONEY MARKET PORTFOLIO MAY CURRENTLY INVEST*

The Money Market Portfolio, and the other portfolios to the extent their
investment policies so provide, may invest in the following liquid, short-term,
debt securities regularly bought and sold by financial institutions:

1. U.S. Treasury Bills and other obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities. These are debt securities
(including bills, certificates of indebtedness, notes, and bonds) issued or
guaranteed by the U.S. Treasury or by an agency or instrumentality of the U.S.
Government that is established under the authority of an act of Congress.
Although all obligations of agencies and instrumentalities are not direct
obligations of the U.S. Treasury, payment of the interest and principal on them
is generally backed directly or indirectly by the U.S. Government. This support
can range from the backing of the full faith and credit of the United States, to
U.S. Treasury guarantees or to the backing solely of the issuing instrumentality
itself. Securities which are not backed by the full faith and credit of the
United States include but are not limited to obligations of the Tennessee Valley
Authority, the Federal National Mortgage Association, the Federal Home Loan
Mortgage Corporation, and the United States Postal Service, each of which has
the right to borrow from the U.S. Treasury to meet its obligations, and
obligations of the Federal Farm Credit System and the Federal Home Loan Banks,
the obligations of which may only be satisfied by the individual credit of the
issuing agency. Obligations of the Government National Mortgage Association, the
Farmers Home Administration, and the Export-Import Bank are examples of
securities that are backed by the full faith and credit of the United States.

2. Obligations (including certificates of deposit, bankers' acceptances, and
time deposits) of domestic banks, foreign branches of U.S. banks, U.S. branches
of foreign banks, and foreign offices of foreign banks provided that such bank
has, at the time of the portfolio's investment, total assets of at least $1
billion or the equivalent. Obligations of any savings and loan association or
savings bank organized under the laws of the United States or any state thereof,
provided that such association or savings bank has, at the time of the
portfolio's investment, total assets of at least $1 billion. The term
"certificates of deposit" includes both Eurodollar certificates of deposit,
which are traded in the over-the-counter market, and Eurodollar time deposits,
for which there is generally not a market. "Eurodollars" are dollars deposited
in banks outside the United States. An investment in Eurodollar instruments
involves risks that are different in some respects from an investment in debt
obligations of domestic issuers, including future political and economic
developments such as possible expropriation or confiscatory taxation that might
adversely affect the payment of principal and interest on the Eurodollar
instruments.

"Certificates of deposit" are certificates evidencing the indebtedness of a
commercial bank to repay funds deposited with it for a definite period of time
(usually from 14 days to 1 year). "Bankers' acceptances" are credit instruments
evidencing the obligation of a bank to pay a draft which has been drawn on it by
a customer. These instruments reflect the obligation both of the bank and of the
drawer to pay the face amount of the instrument upon maturity. "Time deposits"
are non-negotiable deposits in a bank for a fixed period of time.

3. Commercial paper, variable amount demand master notes, bills, notes and other
obligations issued by a U.S. company, a foreign company or a foreign government,
its agencies, instrumentalities or political subdivisions, denominated in U.S.
dollars, and, at the date of investment, rated at least A or A-2 by Standard &
Poor's Corporation ("S&P"), A or Prime-2 by Moody's Investors Service
("Moody's") or, if not rated, issued by an entity having an outstanding
unsecured debt issue rated at least A or A-2 by S&P or A or Prime-2 by Moody's.
For a description of corporate bond ratings, see Debt Ratings, page 23. If such
obligations are guaranteed or supported by a letter of credit issued by a bank,
such bank (including a foreign bank) must meet the requirements set forth in
paragraph 2 above. If such obligations are guaranteed or insured by an insurance
company or other non-bank entity, such insurance company or other non-bank
entity must represent a credit of high quality, as determined by the Series
Fund's investment adviser (which as noted above is currently The Prudential)
under the supervision of the Series Fund's Board of Directors.

As stated above in paragraphs 2 and 3, the Money Market Portfolio and short-term
portions of the other portfolios may contain obligations of foreign branches of
domestic banks and domestic branches of foreign banks, as well as commercial
paper, bills, notes, and other obligations issued in the United States by
foreign issuers, including foreign governments, their agencies, and
instrumentalities. This involves certain additional risks. These risks include
future political and economic developments in the country of the issuer, the
possible imposition of withholding taxes on interest income payable on such
obligations held by the Series Fund, the possible seizure or nationalization of
foreign deposits, and the possible establishment of exchange controls or other
foreign governmental laws or restrictions which might affect adversely the
payment of principal and interest on such obligations held by the Series Fund.
In addition, there may be less publicly available information about a foreign
issuer than about a domestic one, and foreign issuers may not be subject to the
same accounting, auditing and financial recordkeeping standards and requirements
as domestics issuers. Securities issued by foreign issuers may be subject to
greater fluctuations in price than securities issued by U.S. entities. Finally,
in the event of default

* Although the Money Market Portfolio is not available to PRUvider Contract
owners, any short-term portion of the Balanced Portfolios may be invested in the
types of securities described in this section.

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<PAGE>

with respect to any such foreign debt obligations, it may be more difficult for
the Series Fund to obtain or to enforce a judgment against the issuers of such
securities.

4. Repurchase Agreements. When the Money Market Portfolio purchases money market
securities of the types described above, it may on occasion enter into a
repurchase agreement with the seller wherein the seller and the buyer agree at
the time of sale to repurchase of the security at a mutually agreed upon time
and price. The period of maturity is usually quite short, possibly overnight or
a few days, although it may extend over a number of months. The resale price is
in excess of the purchase price, reflecting an agreed-upon market rate effective
for the period of time the portfolio's money is invested in the security, and is
not related to the coupon rate of the purchased security. Repurchase agreements
may be considered loans of money to the seller of the underlying security, which
are collateralized by the securities underlying the repurchase agreement. The
Series Fund will not enter into repurchase agreements unless the agreement is
"fully collateralized" (i.e., the value of the securities is, and during the
entire term of the agreement remains, at least equal to the amount of the 'loan'
including accrued interest). The Series Fund will take possession of the
securities underlying the agreement and will value them daily to assure that
this condition is met. The Series Fund has adopted standards for the parties
with whom it will enter into repurchase agreements which it believes are
reasonably designed to assure that such a party presents no serious risk of
becoming involved in bankruptcy proceedings within the time frame contemplated
by the repurchase agreement. In the event that a seller defaults on a repurchase
agreement, the Series Fund may incur a loss in the market value of the
collateral, as well as disposition costs; and, if a party with whom the Series
Fund had entered into a repurchase agreement becomes involved in bankruptcy
proceedings, the Series Fund's ability to realize on the collateral may be
limited or delayed and a loss may be incurred if the collateral securing the
repurchase agreement declines in value during the bankruptcy proceedings.

The Series Fund will not enter into repurchase agreements with The Prudential or
its affiliates, including Prudential Securities Incorporated. This will not
affect the Series Fund's ability to maximize its opportunities to engage in
repurchase agreements.

5. Reverse Repurchase Agreements. The Money Market Portfolio may use reverse
repurchase agreements, which are described under Reverse Repurchase Agreements
and Dollar Rolls in the prospectus. No portfolio may obligate more than 10% of
its net assets in connection with reverse repurchase agreements, except that the
fixed income portions of the Conservatively Managed Flexible and Aggressively
Managed Flexible Portfolios may obligate up to 30% of their net assets in
connection with reverse repurchase agreements and dollar rolls.

6. When-Issued and Delayed Delivery Securities. From time to time, in the
ordinary course of business, the Money Market Portfolio may purchase securities
on a when-issued or delayed delivery basis (i.e., delivery and payment can take
place a month or more after the date of the transaction). The purchase price and
the interest rate payable on the securities are fixed on the transaction date.
The securities so purchased are subject to market fluctuation, and no interest
accrues to the portfolio until delivery and payment take place. At the time the
portfolio makes the commitment to purchase securities on a when-issued or
delayed delivery basis, it will record the transaction and thereafter reflect
the value, each day, of such securities in determining its net asset value. The
portfolio will make commitments for when-issued transactions only with the
intention of actually acquiring the securities and, to facilitate such
acquisitions, the Series Fund's custodian bank will maintain in a separate
account securities of the portfolio having a value equal to or greater than such
commitments. On delivery dates for such transactions, the portfolio will meet
its obligations from maturities or sales of the securities held in the separate
account and/or from then available cash flow. If the portfolio chooses to
dispose of the right to acquire a when-issued security prior to its acquisition,
it could, as with the disposition of any other obligation, incur a gain or loss
due to market fluctuation. No when-issued commitments will be made if, as a
result, more than 15% of the portfolio's net assets would be so committed.

The Board of Directors of the Series Fund has adopted policies for the Money
Market Portfolio to conform to amendments of an SEC rule applicable to money
market funds, like the portfolio. These policies do not apply to any other
portfolio. The policies are as follows: (1) The portfolio will not invest more
than 5% of its assets in the securities of any one issuer (except U.S.
Government securities); however, the portfolio may exceed the 5% limit with
respect to a single security rated in the highest rating category for up to
three business days after the purchase thereof; (2) To be eligible for
investment, a security must be a United States dollar-denominated instrument
that the Series Fund's Board has determined to present minimal credit risks and
must be rated in one of the two highest rating categories by at least two
nationally recognized statistical rating organizations ("NRSROs") assigning a
rating to the security or issue, or if only one NRSRO has assigned a rating,
that NRSRO. An unrated security must be deemed to be of comparable quality as
determined by the Series Fund's Board. In other words, the portfolio will invest
in only first tier or second tier securities. First tier securities are
securities which are rated by at least two NRSROs, or by the only NRSRO that has
rated the security, in the highest short-term rating category, or unrated
securities of comparable quality as determined by the Series Fund's Board.
Second tier securities are eligible securities that are not first tier
securities; (3) The portfolio will not invest more than 5% of its total assets
in second tier securities; (4) The portfolio may not invest more than 1% of its
assets

22
<PAGE>

in second tier securities of any one issuer; (5) In the event a first tier
security held by the portfolio is downgraded and becomes a second tier security,
or in the case of an unrated security the Series Fund's Board determines it is
no longer of comparable quality to a first tier security, or in the event The
Prudential becomes aware that an NRSRO has rated a second tier security or an
unrated portfolio security below its second highest rating, the Board will
reassess promptly whether the security presents minimal credit risks and shall
cause the portfolio to take such action as the Board determines is in the best
interests of the portfolio and its shareholders; (6) In the event of a default
or if because of a rating downgrade a security held in the portfolio is no
longer an eligible investment, the portfolio will sell the security as soon as
practicable unless the Series Fund's Board makes a specific finding that such
action would not be in the best interest of the portfolio; and (7) The
portfolio's dollar-weighted average maturity will be no more than 90 days. The
Series Fund's Board of Directors has adopted written procedures delegating to
the investment advisor under certain guidelines the responsibility to make
several of the above-described determinations, including certain credit quality
determinations.

DEBT RATINGS

Moody's Investors Services, Inc. describes its categories of corporate debt
securities and its "Prime-1" and "Prime-2" commercial paper as follows:

Bonds:

Aaa - Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position
of such issues.

Aa - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high grade bonds. They are rated lower than the best bonds
because margins of protection may not as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there
may be other elements present which make the long term risks appear
somewhat larger than in Aaa securities.

A - Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements
may be present which suggest a susceptibility to impairment sometime in
the future.

Baa - Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics as
well.

Ba - Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.

B - Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance
of other terms of the contract over any long period of time may be small.

Ca - Bonds which are rated Caa are of poor standing. Such issues may be
in default or there may be present elements of danger with respect to
principal or interest.

Ca - Bonds which are rated Ca represent obligations which are speculative in
a high degree. Such issues are often in default or have other marked
shortcomings.

Commercial paper:

o Issuers rated Prime-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1 repayment
capacity will normally be evidenced by the following characteristics:

-- Leading market positions in well-established industries.
-- High rates of return of funds employed.
-- Conservative capitalization structures with moderate reliance on debt
and ample asset protection.
-- Broad margins in earnings coverage of fixed financial charges and
high internal cash generation.
-- Well established access to a range of financial markets and assured
sources of alternate liquidity.

23
<PAGE>

o Issuers rated Prime-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will normally
be evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.

Standard & Poor's Corporation describes its grades of corporate debt securities
and its "A" commercial paper as follows:

Bonds:

AAA Bonds rated AAA are highest grade obligations. They possess
the ultimate degree of protection as to principal and
interest. Marketwise they move with interest rates, and hence
provide the maximum safety on all counts.

AA Bonds rated AA also qualify as high grade obligations, and in
the majority of instances differ from AAA issues only in small
degree. Here, too, prices move with the long term money
market.

A Bonds rated A are regarded as upper medium grade. They have
considerable investment strength but are not entirely free
from adverse effects of changes in economic and trade
conditions. Interest and principal are regarded as safe. They
are predominately reflect money rates in their market
behavior, but to some extent, also economic conditions.

BBB Bonds rated BBB, or medium grade, are borderline between
definitely sound obligations and those where the speculative
element begins to predominate. These bonds have adequate asset
coverage and normally are protected by satisfactory earnings.
Their susceptibility to changing conditions, particularly to
depressions, necessitates constant watching. Marketwise, the
bonds are more responsive to business and trade conditions
than to interest rates. This group is the lowest which
qualifies for commercial bank investment.

BB-B-CCC-CC Bonds rated BB, B, CCC and CC are regarded, on balance, as
predominantly speculative with respect to the issuer's
capacity to pay interest and repay principal in accordance
with the terms of the obligations. BB indicates the lowest
degree of speculation and CC the highest degree of
speculation. While such bonds will likely have some quality
and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.

Commercial paper:

Commercial paper rated A by Standard & Poor's Corporation has the following
characteristics: Liquidity ratios are better than the industry average. Long
term senior debt rating is "A" or better. In some cases BBB credits may be
acceptable. The issuer has access to at least two additional channels of
borrowings. Basic earnings and cash flow have an upward trend with allowances
made for unusual circumstances. Typically, the issuer's industry is well
established, the issuer has a strong position within its industry and the
reliability and quality of management is unquestioned. Issuers rated A are
further referred to by use of numbers 1, 2 and 3 to denote relative strength
within this classification.

POSSIBLE REPLACEMENT OF THE SERIES FUND

Although The Prudential believes it to be unlikely, it is possible that in the
judgment of its management, one or more of the portfolios of the Series Fund may
become unsuitable for investment by Contract owners because of investment policy
changes, tax law changes, or the unavailability of shares for investment. In
that event, The Prudential may seek to substitute the shares of another
portfolio or of an entirely different mutual fund. Before this can be done, the
approval of the SEC, and possibly one or more state insurance departments, will
be required. Contract owners will be notified of such substitution.

In addition, although it is highly unlikely, it is conceivable that in the
future it may become disadvantageous for both variable life insurance and
variable annuity contract separate accounts to invest in the same underlying
mutual fund. Although neither the companies which invest in the Series Fund nor
the Series Fund currently foresees any such disadvantage, the Series Fund's
Board of Directors intends to monitor events in order to identify any material
conflict between variable life insurance and variable annuity contract owners
and to determine what action, if any, should be taken in response thereto.
Material conflicts could result from such things as: (1) changes in state
insurance law; (2) changes in federal income tax law; (3) changes in the
investment management of any portfolio of the Series Fund; or (4) difference
between voting instructions given by variable life insurance and variable
annuity contract owners. The Prudential will bear the expense, if it does become
necessary, of remedying any material conflict including establishing a new
underlying investment company and segregating the assets held under variable
life insurance and variable annuity contracts.

24
<PAGE>

OTHER INFORMATION CONCERNING THE SERIES FUND

Incorporation and Authorized Stock. The Series Fund was incorporated under
Maryland law on November 15, 1982. The authorized Capital Stock of the Series
Fund consists of 2 billion shares, par value $0.01 per share. The shares of
Capital Stock are divided into sixteen classes: Money Market Portfolio Capital
Stock (200 million shares), Bond Portfolio Capital Stock (200 million shares),
High Yield Bond Portfolio Capital Stock (100 million shares), Government
Securities Portfolio Capital Stock (100 million shares), Common Stock Portfolio
Capital Stock (200 million shares), Stock Index Portfolio Capital Stock (100
million shares), High Dividend Stock Portfolio Capital Stock (100 million
shares), Natural Resources Portfolio Capital Stock (100 million shares), Global
Equity Portfolio Capital Stock (100 million shares), Conservatively Managed
Flexible Portfolio Capital Stock (300 million shares), Aggressively Managed
Flexible Portfolio Capital Stock (300 million shares), Zero Coupon Bond
Portfolio 1995 Capital Stock (25 million shares), Zero Coupon Bond Portfolio
2000 Capital Stock (25 million shares), Zero Coupon Bond Portfolio 2005 Capital
Stock (50 million shares), Growth Stock Portfolio Capital Stock (50 million
shares), Small Capitalization Stock Portfolio Capital Stock (50 million shares).
The shares of each portfolio, when issued, will be fully paid and
non-assessable, will have no conversion, exchange or similar rights, and will be
freely transferable. Each share of stock will have a pro rata interest in the
assets of the portfolio to which the stock of that class relates and will have
no interest in the assets of any other portfolio.

Dividends, Distributions and Taxes. The Series Fund is qualified as a regulated
investment company under Section 851 of the Internal Revenue Code and
distributes substantially all of each portfolio's net investment income and
realized gains from securities transactions to the respective subaccounts, which
immediately reinvest it. For each taxable year in which it and each of its
portfolios so qualify, the Series Fund will not be subject to tax on net
investment income and realized gains from securities transactions distributed to
shareholders.

Custodian and Transfer Agent. Chemical Bank, 4 New York Plaza, New York, N.Y.
10004, is the custodian of the assets held by all the portfolios, except the
Global Equity Portfolio, and is authorized to use the facilities of the
Depository Trust Company and the facilities of the book-entry system of the
Federal Reserve Bank with respect to securities held by these portfolios.
Chemical Bank is also authorized to use the facilities of the Mortgage Backed
Security Clearing Corporation (a subsidiary of the Midwest Stock Exchange) with
respect to mortgage-backed securities held by any of these portfolios. Chemical
Bank maintains certain financial and accounting books and records pursuant to an
agreement with the Series Fund. Brown Brothers Harriman & Co. ("Brown
Brothers"), 40 Water Street, Boston, MA 02109, is the custodian of the assets of
the Global Equity Portfolio. Brown Brothers employs subcustodians, who were
approved by the directors of the Series Fund in accordance with regulations of
the Securities and Exchange Commission, for the purpose of providing custodial
service for the Global Equity Portfolio's foreign assets held outside the United
States. Morgan Guaranty Trust Company, 60 Wall Street, New York, NY 10260 is the
custodian of the assets held in connection with repurchase agreements entered
into by the portfolios and is authorized to use the facilities of the book-entry
system of the Federal Reserve Bank. The directors of the Series Fund monitor the
activities of the custodians and the subcustodians.

The Prudential is the transfer agent and dividend-disbursing agent for the
Series Fund. The Prudential as transfer agent issues and redeems shares of the
Series Fund and maintains records of ownership for the shareholders.

Experts. The financial statements of the Series Fund included in this statement
of additional information and the FINANCIAL HIGHLIGHTS included in the
prospectus have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their report appearing herein and are included in reliance upon the
report of such firm given upon their authority as experts in accounting and
auditing. Deloitte & Touche LLP's principal business address is Two Hilton
Court, Parsippany, NJ 07054-0319.

License. As part of the Investment Advisory Agreement, The Prudential has
granted the Series Fund a royalty-free, non-exclusive license to use the words
"The Prudential" and its registered service mark of a rock representing the Rock
of Gibraltar. However, The Prudential may terminate this license if The
Prudential or a company controlled by it ceases to be the Series Fund's
investment advisor. The Prudential may also terminate the license for any other
reason upon 60 days written notice; but, in this event, the Investment Advisory
Agreement shall also terminate 120 days following receipt by the Series Fund of
such notice, unless a majority of the outstanding voting securities of the
Series Fund vote to continue the Agreement notwithstanding termination of the
license.

25
<PAGE>

DIRECTORS AND OFFICERS OF PRUCO LIFE AND MANAGEMENT OF THE SERIES FUND

DIRECTORS AND OFFICERS OF PRUCO LIFE

The directors and officers of Pruco Life, listed with their principal
occupations during the past 5 years, are shown below.

DIRECTORS OF PRUCO LIFE

E. MICHAEL CAULFIELD, Director. -- Chief Executive Officer, Prudential Preferred
Financial Services since 1995; 1993 to 1995: President, Prudential Preferred
Financial Services; 1992 to 1993: President, Prudential Property and Casualty
Insurance Company*; Prior to 1992: President of Investment Services of The
Prudential.

ROBERT P. HILL, Chairman and Director.-- Executive Vice President of The
Prudential.

GARNETT L. KEITH, JR., Director. -- Vice Chairman of The Prudential.

IRA J. KLEINMAN, Director. -- President, Prudential Select Marketing since 1993;
1992 to 1993: Senior Vice President of The Prudential; Prior to 1992: Vice
President of The Prudential.

ESTHER H. MILNES, President and Director. -- Senior Vice President and Chief
Actuary, Prudential Insurance and Financial Services since 1993; Prior to 1993:
Vice President and Associate Actuary of The Prudential.

I. EDWARD PRICE, Vice Chairman and Director. -- Chief Executive Officer,
International Insurance of The Prudential since 1994; 1993 to 1994: President,
International Insurance of The Prudential; Prior to 1993: Senior Vice President
and Company Actuary of The Prudential.

DONALD G. SOUTHWELL, Director. -- President, Prudential Insurance and Financial
Services since 1993; Prior to 1993: Senior Vice President of The Prudential.

OFFICERS WHO ARE NOT DIRECTORS

BEVERLY R. BARNEY, Senior Vice President. -- Vice President and Associate
Actuary, Prudential Insurance and Financial Services since 1995; 1993 to 1995:
Senior Vice President and Associate Actuary, Prudential Direct; 1991 to 1993:
Senior Vice President and Actuary of Pruco Life; Prior to 1991: Vice President
and Actuary of Pruco Life.

ROBERT EARL, Senior Vice President. -- Vice President, Strategic Initiatives,
Prudential Preferred Financial Services since 1993; Prior to 1993: Vice
President Regional Marketing of The Prudential.

JOHN P. GUALTIERI, Senior Vice President and Assistant Secretary. -- Vice
President and Insurance Counsel of The Prudential since 1993. Prior to 1993:
Senior Vice President and General Counsel of Pruco Life.

RICHARD F. LAMBERT, Senior Vice President, Chief Actuary, Appointed Actuary. --
Vice President and Associate Actuary, Prudential Preferred Financial Services
since 1993; 1991 to 1993: Vice President and Actuary of The Prudential. Prior to
1991: Vice President, Prudential Select Marketing.

DOROTHY K. LIGHT, Secretary. -- Vice President and Secretary of The Prudential.

DIANE M. MCGOVERN, Vice President and Actuary. -- Vice President and Assistant
Actuary of The Prudential.

MARTIN PFINSGRAFF, Treasurer. -- Vice President and Treasurer of The Prudential
since 1991; Prior to 1991: Managing Director, Corporate Finance of The
Prudential.

MICHAEL R. SHAPIRO, Senior Vice President. -- Senior Vice President, Prudential
Select Brokerage.

LAWRENCE J. SUNDRAM, Senior Vice President. -- Senior Vice President of Property
and Casualty, Prudential Insurance and Financial Services since 1994; 1993 to
1994: Vice President, Prudential Insurance and Financial Services; Prior to
1993: Vice President, District Agencies Marketing for The Prudential.

STEPHEN P. TOOLEY, Vice President, Comptroller and Chief Accounting Officer. --
Vice President and Comptroller, Prudential Insurance and Financial Services
since 1993; Prior to 1993: Director, Financial Analysis for The Prudential.

The business address of all directors and officers of Pruco Life is 213
Washington Street, Newark, New Jersey 07102-2992.

* Subsidiary of The Prudential

26
<PAGE>

MANAGEMENT OF THE SERIES FUND

The names of all directors and officers of the Series Fund and the principal
occupation of each during the last 5 years are shown below. Unless otherwise
stated, the address of each director and officer is Prudential Plaza, Newark,
New Jersey 07102-3777.

ROBERT P. HILL*, Chairman of the Board--Executive Vice President of The
Prudential.

E. MICHAEL CAULFIELD*, President and Director--Chief Executive Officer,
Prudential Preferred Financial Services since 1995; 1993 to 1995: President,
Prudential Preferred Financial Services; 1992 to 1993: President, Prudential
Property and Casualty Insurance Company; Prior to 1992: President of Investment
Services of The Prudential.

SAUL K. FENSTER, Director--President of New Jersey Institute of Technology.
Address: 323 Martin Luther King Boulevard, Newark, New Jersey 07102.

W. SCOTT McDONALD, JR., Director--Executive Vice President of Fairleigh
Dickinson University since 1991: Prior to 1991: Executive Vice President of Drew
University. Address: 23 Forest Road, Madison, New Jersey 07940.

JOSEPH WEBER, Director--Vice President, Interclass (international corporate
learning). Address: 37 Beachmont Terrace, North Caldwell, New Jersey 07006.

MENDEL A. MELZER, Vice President--Senior Vice President and Chief Financial
Officer of Prudential Preferred Financial Services since 1993; 1991 to 1993:
Managing Director, The Prudential Investment Corporation; Prior to 1991: Senior
Vice President, Prudential Capital Corporation.

STEPHEN P. TOOLEY, Comptroller--Vice President and Comptroller of Prudential
Insurance and Financial Services since 1993; Prior to 1993: Director, Financial
Analysis of The Prudential.

THOMAS C. CASTANO, Secretary and Treasurer--Assistant General Counsel of The
Prudential since 1993; Prior to 1993: Assistant General Counsel of Pruco Life
Insurance Company.

No director or officer of the Series Fund who is also an officer, director or
employee of The Prudential or its affiliates is entitled to any remuneration
from the Series Fund for services as one of its directors or officers. Each
director of the Series Fund who is not an interested person of the Series Fund
will receive a fee of $2,000 per year plus $200 per portfolio for each meeting
of the Board attended and will be reimbursed for all expenses incurred in
connection with attendance at meetings.

*These members of the Board are interested persons of The Prudential, its
affiliates or the Series Fund as defined in the 1940 Act. Certain actions of the
Board, including the annual continuance of the Investment Advisory Agreement
between the Series Fund and The Prudential, must be approved by a majority of
the members of the Board who are not interested persons of The Prudential, its
affiliates or the Series Fund. Mr. Hill and Mr. Caulfield, two of the five
members of the Board, are interested persons of The Prudential and the Series
Fund, as that term is defined in the 1940 Act, because they are officers and/or
affiliated persons of The Prudential, the investment advisor to the Series Fund.
Messrs. Fenster, McDonald, and Weber are not interested persons of The
Prudential, its affiliates or the Series Fund. However, Mr. Fenster is President
of the New Jersey Institute of Technology. The Prudential has issued a group
annuity contract to the Institute and provides group life and group health
insurance to its employees.

<PAGE>

FINANCIAL STATEMENTS OF
THE PRUDENTIAL SERIES FUND, INC.
AGGRESSIVELY MANAGED FLEXIBLE PORTFOLIO

STATEMENT OF ASSETS AND LIABILITIES
December 31, 1994

ASSETS
Investments, at value (cost:
$3,347,362,272).......................... $3,478,056,152
Cash....................................... 1,392
Interest and dividends receivable.......... 23,489,135
Receivable for securities sold............. 35,026,977
--------------
Total Assets............................. 3,536,573,656
--------------
LIABILITIES
Accrued expenses........................... 323,207
Payable for securities purchased........... 49,250,851
Payable to investment adviser.............. 5,363,453
Payable for portfolio shares redeemed...... 95,846
--------------
Total Liabilities........................ 55,033,357
--------------
NET ASSETS................................... $3,481,540,299
==============
Net assets were comprised of:
Common stock, at $0.01 par value......... $ 2,246,733
Paid-in capital, in excess of par........ 3,405,640,023
--------------
3,407,886,756
Accumulated distributions in excess of net
investment income........................ (7,770,622)
Accumulated distributions in excess of net
realized gains........................... (49,268,078)
Net unrealized appreciation (depreciation)
Securities............................... 130,693,880
Foreign currency translations............ (1,637)
--------------
Net assets, December 31, 1994.............. $3,481,540,299
==============
Net asset value per share of 224,673,289
outstanding shares of common stock
(authorized 300,000,000 shares).......... $ 15.4960
==============
STATEMENT OF OPERATIONS
Year Ended December 31, 1994
INVESTMENT INCOME
Dividends.................................. $ 40,972,935
Interest................................... 80,410,745
---------------
121,383,680
---------------
EXPENSES
Investment management fee.................. 20,399,604
Shareholders' reports...................... 895,362
Foreign withholding tax.................... 571,581
Accounting fees............................ 231,918
Custodian expense -- net................... 153,924
S.E.C. fees................................ 129,279
Professional fees.......................... 120,289
Directors' expense......................... 3,420
Miscellaneous expenses..................... 189
---------------
22,505,566
---------------
NET INVESTMENT INCOME........................ 98,878,114
---------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCIES
Net realized gain (loss) on investments --
Securities transactions.................. 23,860,613
Futures contracts........................ (22,340)
---------------
Net realized gain on investments........... 23,838,273
---------------
Net unrealized loss on investments and
foreign currencies--
Securities............................... (230,569,722)
Foreign currency translations............ (1,637)
---------------
Net unrealized loss on investments and
foreign currencies....................... (230,571,359)
---------------
NET LOSS ON INVESTMENTS AND FOREIGN
CURRENCIES................................... (206,733,086)
---------------
NET DECREASE IN NET ASSETS RESULTING FROM
OPERATIONS................................... ($ 107,854,972)
================

STATEMENTS OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31
---------------------------------------
1994 1993
------------------ -------------------
<S> <C> <C>
OPERATIONS:
Net investment income.................................................................. $ 98,878,114 $ 94,441,961
Net realized gain on investments....................................................... 23,838,273 202,429,143
Net unrealized gain(loss) on investments and foreign currency translations............. (230,571,359) 106,972,046
------------------ -------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS........................ (107,854,972) 403,843,150
------------------ -------------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income.................................................................. (96,126,295) (96,961,144)
Net realized gain from investment transactions......................................... (98,311,584) (167,511,713)
------------------ -------------------
TOTAL DIVIDENDS TO SHAREHOLDERS........................................................ (194,437,879) (264,472,857)
------------------ -------------------
CAPITAL TRANSACTIONS:
Capital stock sold [22,611,559 and 28,416,647 shares, respectively].................... 370,947,414 490,167,019
Reinvestment of dividend distributions [12,531,550 and 15,710,066 shares,
respectively]......................................................................... 194,437,879 264,472,857
Capital stock repurchased [(4,617,224) and (2,154,837) shares, respectively]........... (73,719,278) (37,398,394)
------------------ -------------------
NET INCREASE IN NET ASSETS RESULTING FROM CAPITAL TRANSACTIONS......................... 491,666,015 717,241,482
------------------ -------------------
TOTAL INCREASE IN NET ASSETS............................................................. 189,373,164 856,611,775
NET ASSETS:
Beginning of year...................................................................... 3,292,167,135 2,435,555,360
------------------ -------------------
End of year............................................................................ $ 3,481,540,299 $ 3,292,167,135
================== ===================
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS ON PAGES B11 THROUGH B14.

<PAGE>

FINANCIAL STATEMENTS OF
THE PRUDENTIAL SERIES FUND, INC.
CONSERVATIVELY MANAGED FLEXIBLE PORTFOLIO

STATEMENT OF ASSETS AND LIABILITIES
December 31, 1994
ASSETS
Investments, at value (cost:
$3,443,877,594).......................... $3,468,953,719
Cash....................................... 2,043
Interest and dividends receivable.......... 24,063,629
Receivable for securities sold............. 20,886,513
--------------
Total Assets............................. 3,513,905,904
--------------
LIABILITIES
Accrued expenses........................... 304,995
Payable for securities purchased........... 7,467,333
Payable to investment adviser.............. 4,963,479
Payable for portfolio shares redeemed...... 65,811
--------------
Total Liabilities........................ 12,801,618
--------------
NET ASSETS................................... $3,501,104,286
==============
Net assets were comprised of:
Common stock, at $0.01 par value......... $ 2,483,940
Paid-in capital, in excess of par........ 3,488,749,211
--------------
3,491,233,151
Distributions in excess of net investment
income................................... (2,593,413)
Accumulated distributions in excess of net
realized gains........................... (12,611,577)
Net unrealized appreciation................ 25,076,125
--------------
Net assets, December 31, 1994.............. $3,501,104,286
==============
Net asset value per share of 248,394,018
outstanding shares of common stock
(authorized 300,000,000 shares).......... $ 14.0950
==============

STATEMENT OF OPERATIONS
Year Ended December 31, 1994
INVESTMENT INCOME
Dividends.................................. $ 21,577,417
Interest................................... 121,932,781
---------------
143,510,198
---------------
EXPENSES
Investment management fee.................. 18,730,421
Shareholders' reports...................... 982,095
Foreign withholding tax.................... 524,162
Accounting fees............................ 216,958
S.E.C. fees................................ 165,214
Custodian expense -- net................... 114,541
Professional fees.......................... 102,549
Directors' expense......................... 3,365
Miscellaneous expenses..................... 182
---------------
20,839,487
---------------
NET INVESTMENT INCOME........................ 122,670,711
---------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain on investments --
Securities transactions.................. 30,566,616
Futures contracts........................ 184,405
---------------
Net realized gain on investments........... 30,751,021
Net unrealized loss on investments......... (184,854,002)
---------------
NET LOSS ON INVESTMENTS...................... (154,102,981)
---------------
NET DECREASE IN NET ASSETS RESULTING FROM
OPERATIONS................................... ($ 31,432,270)
==============

STATEMENTS OF CHANGES IN NET ASSETS

YEARS ENDED DECEMBER 31
---------------------------------------
1994 1993
------------------ -------------------
<S> <C> <C>
OPERATIONS:
Net investment income.................................................................. $ 122,670,711 $ 83,594,970
Net realized gain on investments....................................................... 30,751,021 116,251,058
Net unrealized gain(loss) on investments............................................... (184,854,002) 86,497,365
------------------ -------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS........................ (31,432,270) 286,343,393
------------------ -------------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income.................................................................. (120,740,360) (84,057,597)
Net realized gain from investment transactions......................................... (37,214,012) (113,728,724)
------------------ -------------------
TOTAL DIVIDENDS TO SHAREHOLDERS........................................................ (157,954,372) (197,786,321)
------------------ -------------------
CAPITAL TRANSACTIONS:
Capital stock sold [34,889,459 and 48,698,296 shares, respectively].................... 514,344,688 736,447,769
Reinvestment of dividend distributions [11,198,868 and 13,291,624 shares,
respectively]......................................................................... 157,954,372 197,786,321
Capital stock repurchased [(5,887,371) and (2,225,762) shares, respectively]........... (84,977,146) (33,653,303)
------------------ -------------------
NET INCREASE IN NET ASSETS RESULTING FROM CAPITAL TRANSACTIONS......................... 587,321,914 900,580,787
------------------ -------------------
TOTAL INCREASE IN NET ASSETS............................................................. 397,935,272 989,137,859
NET ASSETS:
Beginning of year...................................................................... 3,103,169,014 2,114,031,155
------------------ -------------------
End of year............................................................................ $ 3,501,104,286 $ 3,103,169,014
================== ===================
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS ON PAGES B11 THROUGH B14.

<PAGE>

THE PRUDENTIAL SERIES FUND, INC.
SCHEDULE OF INVESTMENTS
AGGRESSIVELY MANAGED FLEXIBLE PORTFOLIO

DECEMBER 31, 1994

<TABLE>
<CAPTION>
MARKET
COMMON STOCKS -- 58.8% SHARES VALUE
------------- --------------
<S> <C> <C>
AEROSPACE -- 0.8%
Boeing Co....................................... 287,200 $ 13,426,600
Loral Corp...................................... 392,000 14,847,000
--------------
28,273,600
--------------
ALUMINUM -- 1.1%
Aluminum Co. of America......................... 426,700 36,962,888
--------------
AUTOS - CARS & TRUCKS -- 1.2%
Ford Motor Co................................... 442,900 12,401,200
General Motors Corp. (Class 'E' Stock).......... 814,600 31,362,100
--------------
43,763,300
--------------
BANKS AND SAVINGS & LOANS -- 1.9%
Bank of New York Company, Inc................... 1,549,400 44,932,600
Norwest Corp.................................... 597,800 13,973,575
Washington Mutual, Inc.......................... 407,800 6,881,625
--------------
65,787,800
--------------
BEVERAGES -- 0.3%
+Dr. Pepper/Seven-Up Cos., Inc................... 467,300 11,974,563
--------------
CHEMICALS -- 2.4%
A. Schulman, Inc................................ 189,400 5,208,500
Air Products & Chemicals, Inc................... 470,900 21,013,913
Dow Chemical Co................................. 316,800 21,304,800
Eastman Chemical Co............................. 326,500 16,488,250
Imperial Chemical Industries, PLC, ADR.......... 275,400 12,806,100
+McWhorter Technologies, Inc.................... 243,950 3,628,756
OM Group, Inc................................... 183,700 4,408,800
--------------
84,859,119
--------------
CHEMICALS - SPECIALTY -- 0.9%
IMC Global, Inc................................. 699,100 30,236,075
--------------
COMMERCIAL SERVICES -- 1.0%
First Financial Management Corp................. 156,700 9,656,638
ServiceMaster, L.P.............................. 443,550 10,811,531
Southeby's Holdings, Inc. (Class 'A' Stock)..... 465,100 5,348,650
Wellman, Inc.................................... 355,300 10,037,225
--------------
35,854,044
--------------
COMPUTER SERVICES -- 2.7%
+American Management Systems, Inc................ 673,100 12,957,175
Automatic Data Processing, Inc.................. 690,400 40,388,400
First Data Corp................................. 509,800 24,151,775
+Microsoft Corp.................................. 161,300 9,859,463
National Data Corp.............................. 232,200 5,979,150
--------------
93,335,963
--------------
COSMETICS & SOAPS -- 0.3%
Gillette Co..................................... 125,700 9,396,075
--------------
DIVERSIFIED GAS -- 0.4%
+Basin Exploration, Inc.......................... 281,700 3,098,700
Cross Timbers Oil Co............................ 810,000 12,150,000
--------------
15,248,700
--------------
DIVERSIFIED OFFICE EQUIPMENT -- 0.8%
International Business Machines Corp............ 381,000 28,003,500
--------------
DRUGS AND HOSPITAL SUPPLIES -- 2.6%
Abbott Laboratories............................. 580,700 18,945,338
Baxter International, Inc....................... 725,000 20,481,250
Pfizer, Inc..................................... 285,300 22,039,425
Schering-Plough Corp............................ 350,100 25,907,400
+Thermotrex Corp................................. 354,100 4,780,350
--------------
92,153,763
--------------
ELECTRICAL EQUIPMENT -- 1.2%
Baldor Electric Co.............................. 489,440 13,214,880
Belden, Inc..................................... 409,700 9,115,825
W.W. Grainger, Inc.............................. 177,600 10,256,400
Westinghouse Electric Corp...................... 674,200 8,258,950
--------------
40,846,055
--------------
ELECTRONICS -- 2.0%
+ADT Ltd......................................... 1,314,400 14,129,800
Emerson Electric Co............................. 883,800 55,237,500
--------------
69,367,300
--------------
FINANCIAL SERVICES -- 2.2%
Dean Witter, Discover & Co...................... 903,400 30,602,675
Federal Home Loan Mortgage Corp................. 403,700 20,386,850
GFC Financial Corp.............................. 232,400 7,378,700
Manufactured Home Communities, Inc.............. 717,900 14,268,262
T. Rowe Price & Associates...................... 170,200 5,106,000
--------------
77,742,487
--------------
FOODS -- 2.4%
Archer-Daniels-Midland Co....................... 3,512,040 72,435,825
Pioneer Hi-Bred International, Inc.............. 301,500 10,401,750
--------------
82,837,575
--------------
FOREST PRODUCTS -- 1.8%
Caraustar Industries, Inc....................... 419,500 9,333,875
International Paper Co.......................... 134,800 10,160,550
Willamette Industries, Inc...................... 881,200 41,857,000
--------------
61,351,425
--------------
GAS PIPELINES -- 0.3%
+Seagull Energy Corp............................. 535,400 10,239,525
--------------
HEALTHCARE -- 0.2%
+Sybron International Corp....................... 205,100 7,075,950
--------------
HOSPITAL MANAGEMENT -- 2.1%
Columbia / HCA Healthcare Corp.................. 840,442 30,676,132
+Health Care and Retirement Corp................. 576,400 17,364,050
+Healthtrust, Inc.-The Hospital Co............... 374,700 11,896,725
+Homedco Group, Inc.............................. 111,500 4,195,188
National Medical Enterprises, Inc............... 583,600 8,243,350
--------------
72,375,445
--------------
INSURANCE -- 3.4%
American International Group, Inc............... 411,800 40,356,400
CCP Insurance, Inc.............................. 74,800 1,524,050
Chubb Corp...................................... 302,000 23,367,250
General Re Corp................................. 323,900 40,082,625
</TABLE>

<PAGE>

AGGRESSIVELY MANAGED FLEXIBLE PORTFOLIO (CONTINUED)

DECEMBER 31, 1994
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
NAC Re Corp..................................... 277,400 $ 9,292,900
PennCorp Financial Group, Inc................... 256,100 3,361,313
--------------
117,984,538
--------------
LEISURE -- 1.3%
Carnival Corp. (Class 'A' Stock)................ 1,755,500 37,304,375
Royal Caribbean Cruise, Ltd..................... 233,600 6,657,600
--------------
43,961,975
--------------
MACHINERY -- 0.1%
+Thermo Fibertek, Inc............................ 219,800 3,489,325
--------------
MEDIA -- 3.4%
American Media, Inc. (Class 'A' Stock).......... 408,600 6,639,750
Capital Cities/ABC, Inc......................... 347,400 29,615,850
Comcast Corp. (Class 'A' Stock)................. 276,000 4,243,500
Gannett Co., Inc................................ 400,000 21,300,000
+Rogers Communications, Inc. (Class 'B'
Stock)........................................ 350,100 4,679,441
Shaw Communications, Inc. (Class 'B' Stock)..... 703,700 5,016,572
+Tele-Communications, Inc. (Class 'A' Stock)..... 1,107,200 24,081,600
Tribune Co...................................... 420,400 23,016,900
--------------
118,593,613
--------------
MINERAL RESOURCES -- 1.8%
Placer Dome, Inc................................ 912,000 19,836,000
Potash Corp. of Saskatchewan, Inc............... 876,500 29,801,000
+Sante Fe Pacific Gold Corp...................... 950,300 12,235,112
--------------
61,872,112
--------------
MISCELLANEOUS - BASIC INDUSTRY -- 6.1%
+American Business Information, Inc.............. 624,500 11,553,250
Danaher Corp.................................... 110,300 5,763,175
Expeditors International of Washington, Inc..... 359,000 7,808,250
General Electric Co............................. 660,800 33,700,800
Illinois Tool Works, Inc........................ 936,600 40,976,250
Libbey, Inc..................................... 323,600 5,663,000
Martin Marietta Materials, Inc.................. 631,800 11,214,450
Modine Manufacturing Co......................... 308,900 8,880,875
Pentair, Inc.................................... 258,200 10,908,950
+Scholastic Corp................................. 139,800 7,129,800
The Rival Co.................................... 181,700 3,179,750
+Thermo Electron Corp............................ 563,100 25,269,113
Tyco International Ltd.......................... 881,600 41,876,000
--------------
213,923,663
--------------
MISCELLANEOUS - CONSUMER GROWTH/STABLE -- 0.7%
+DeVRY, Inc...................................... 380,100 11,783,100
Kellwood Co..................................... 533,900 11,211,900
--------------
22,995,000
--------------
PETROLEUM -- 2.5%
Amoco Corp...................................... 401,000 23,709,125
Royal Dutch Petroleum Co., ADR.................. 586,300 63,027,250
--------------
86,736,375
--------------
PETROLEUM SERVICES -- 0.8%
+Mesa, Inc....................................... 1,037,800 5,059,275
Total SA, ADR................................... 739,100 21,803,450
--------------
26,862,725
--------------
RAILROADS -- 0.3%
Illinois Central Corp........................... 372,700 11,460,525

REAL ESTATE DEVELOPMENT -- 1.6%
Crescent Real Estate Equities, Inc.............. 480,600 13,036,275
Duke Realty Investments, Inc.................... 434,000 12,260,500
Equity Residential Properties Trust............. 451,100 13,533,000
Federal Realty Investment Trust................. 285,200 5,882,250
Weingarten Realty Investors..................... 306,800 11,620,050
--------------
56,332,075
--------------
RESTAURANTS -- 0.2%
Sbarro, Inc..................................... 342,900 8,915,400
--------------
RETAIL -- 2.0%
Dayton-Hudson Corp.............................. 307,400 21,748,550
Edison Brothers Stores.......................... 143,400 2,652,900
Harcourt General, Inc........................... 468,800 16,525,200
Tiffany & Co.................................... 203,300 7,928,700
+Toys 'R' Us, Inc............................... 707,400 21,575,700
--------------
70,431,050
--------------
STEEL -- 2.1%
Broken Hill Proprietary Co., Ltd., ADR.......... 539,050 33,218,955
+LTV Corp........................................ 933,000 15,161,250
Worthington Industries, Inc..................... 1,206,100 24,122,000
--------------
72,502,205
--------------
TELECOMMUNICATIONS -- 2.4%
+Airtouch Communications, Inc.................... 527,900 15,375,088
AT&T Corp....................................... 846,200 42,521,550
TCA Cable TV, Inc............................... 482,300 10,490,025
Telecomunicacoes Brasileiras, SA, ADR........... 39,700 1,776,455
Telefonos de Mexico (Class 'L' Stock), ADR...... 290,000 11,890,000
--------------
82,053,118
--------------
TEXTILES -- 0.4%
Russell Corp.................................... 168,900 5,299,237
Unifi, Inc...................................... 272,500 6,948,750
--------------
12,247,987
--------------
TOBACCO -- 1.1%
Philip Morris Companies, Inc.................... 438,900 25,236,750
UST, Inc........................................ 463,400 12,859,350
--------------
38,096,100
--------------
TOTAL COMMON STOCKS
(Cost $1,884,990,437).......................................... 2,046,142,938
--------------
<CAPTION>

PAR MARKET
LONG-TERM BONDS -- 24.6% VALUE VALUE
------------- --------------
<S> <C> <C>
FINANCIAL -- 3.1%
Associates Corp. of North America,
8.250%, 12/01/99.............................. $ 33,900,000 $ 33,701,685
Banc One Credit Card Master Trust, CMO,
7.750%, 12/15/99, Series 1994-B, Class B...... 5,000,000 4,937,500
Chase Manhattan Credit Card Trust,
7.400%, 05/15/00, Series 1992-1............... 5,000,000 4,921,850
Ford Credit Grantor Trust, CMO,
7.300%, 10/15/99, TR 1994-8, Class A.......... 13,614,932 13,449,000
Ford Motor Credit Co.,
7.750%, 11/15/02.............................. 2,815,000 2,684,468
</TABLE>

<PAGE>

AGGRESSIVELY MANAGED FLEXIBLE PORTFOLIO (CONTINUED)

DECEMBER 31, 1994
<TABLE>
<CAPTION>
PAR MARKET
LONG-TERM BONDS (CONTINUED) VALUE VALUE
------------- --------------
<S> <C> <C>
General Motors Acceptance Corp., M.T.N.,
6.500%, 06/10/96.............................. $ 10,000,000 $ 9,789,200
7.000%, 05/19/97, Tranche #TR00401............ 10,000,000 9,683,700
7.000%, 06/02/97, Tranche #TR00476............ 6,000,000 5,806,980
7.375%, 07/20/98, Tranche #TR00667............ 4,500,000 4,329,855
7.850%, 03/05/97, Tranche #TR00187............ 3,200,000 3,161,153
oMBNA Master Credit Card Trust, CMO,
5.495%, 01/15/02, Series 1994-1, Class A...... 7,500,000 7,480,313
Standard Credit Card Master Trust, CMO,
7.250%, 04/07/08, Series 1994-2A, Class A..... 4,500,000 4,100,625
Westinghouse Credit Corp., M.T.N.,
8.750%, 06/03/96, Tranche #TR00248............ 3,330,000 3,338,924
--------------
107,385,253
--------------
FOREIGN -- 4.4%
**Banco Del Estado-Chile,
8.390%, 08/01/01.............................. 3,500,000 3,298,750
Banco Ganadero, SA, M.T.N.,
9.750%, 08/26/99, Tranche #TR00001............ 7,300,000 7,081,000
**Cemex, SA,
8.875%, 06/10/98.............................. 5,000,000 4,387,500
**Cemex, SA, M.T.N.,
9.500%, 09/20/01, Tranche #TR00010............ 12,500,000 10,625,000
**Compania Sud Americana de Vapores, SA,
7.375%, 12/08/03.............................. 7,250,000 5,935,938
Controladora Commercial Mexicana, SA,
8.750%, 04/21/98.............................. 15,100,000 12,835,000
Empresa Columbia de Petroleos,
7.250%, 07/08/98.............................. 8,250,000 7,342,500
Empresas La Moderna, SA,
10.250%, 11/12/97............................. 2,000,000 1,750,000
Financiera Energetic Nacional,
6.625%, 12/13/96.............................. 5,100,000 4,896,000
**Financiera Energetic Nacional, M.T.N.,
9.000%, 11/08/99.............................. 9,900,000 9,420,432
Fomento Economico Mexicano, SA,
9.500%, 07/22/97.............................. 3,700,000 3,669,359
**Grupo Embotellador Mexicana,
10.750%, 11/19/97............................. 8,020,000 7,137,800
Grupo Televisa, SA,
10.000%, 11/09/97............................. 4,000,000 3,620,000
**Kansallis-Osake Pankki, N.Y.,
8.650%, 12/29/49.............................. 9,000,000 8,707,500
Korea Development Bank,
5.875%, 12/01/98.............................. 1,900,000 1,727,290
6.750%, 12/01/05.............................. 8,000,000 6,778,080
9.250%, 06/15/98.............................. 10,400,000 10,565,672
Korea Electric Power Corp.,
7.750%, 04/01/13.............................. 2,225,000 1,929,921
New Zealand Government,
9.875%, 01/15/11.............................. 7,300,000 8,225,713
Republic of Columbia,
7.125%, 05/11/98.............................. 2,700,000 2,479,782
7.250%, 02/23/04.............................. 4,100,000 3,377,375
8.750%, 10/06/99.............................. 900,000 858,375
Republic of South Africa,
9.625%, 12/15/99.............................. 8,300,000 8,219,593
**Republic of Trinidad and Tobago,
11.750%, 10/03/04............................. 9,000,000 9,112,500
United Mexican States,
5.820%, 06/28/01.............................. 1,375,000 976,250
6.970%, 08/12/00.............................. 2,300,000 1,771,000
8.500%, 09/15/02.............................. 6,925,000 5,574,625
--------------
152,302,955
--------------
INDUSTRIAL -- 5.3%
Avenor, Inc.,
9.375%, 02/15/04.............................. 11,100,000 10,472,156
Columbia/HCA Healthcare Corp., M.T.N.,
8.850%, 01/01/07, Tranche #TR00009............ 15,400,000 15,369,200
Delta Air Lines, Inc.,
7.710%, 05/14/97.............................. 1,300,000 1,238,328
9.750%, 05/15/21.............................. 10,790,000 9,918,384
9.875%, 01/01/98.............................. 27,650,000 27,964,381
10.375%, 02/01/11............................. 6,950,000 6,794,807
Enterprise Rent A Car, M.T.N.,
8.750%, 12/15/99, Tranche #TR00001............ 13,750,000 13,702,563
Fleming Companies, Inc., C.D.,
10.625%, 12/15/01............................. 28,000,000 28,000,000
Ford Motor Co.,
9.000%, 09/15/01.............................. 3,000,000 3,061,140
News America Holdings, Inc.,
7.750%, 01/20/24.............................. 4,650,000 3,797,981
oOccidental Petroleum Corp., M.T.N.,
6.312%, 11/04/99.............................. 5,000,000 4,960,460
Oryx Energy Co.,
9.300%, 05/01/96.............................. 2,350,000 2,330,355
Oryx Energy Co., M.T.N.,
6.050%, 02/01/96, Tranche #TR00013............ 10,500,000 10,106,250
PT Alatief Freeport Financial Co.,
9.750%, 04/15/01.............................. 7,600,000 7,410,000
RJR Nabisco, Inc.,
8.625%, 12/01/02.............................. 14,080,000 13,059,621
8.750%, 08/15/05.............................. 2,500,000 2,279,300
Tele-Communications, Inc.,
7.875%, 08/01/13.............................. 7,000,000 5,830,650
9.875%, 06/15/22.............................. 4,700,000 4,606,657
Transco Energy,
9.125%, 05/01/98.............................. 14,000,000 14,017,500
--------------
184,919,733
--------------
U.S. GOVERNMENT & AGENCY OBLIGATIONS -- 11.8%
Federal National Mortgage Association,
Zero Coupon, 07/05/14......................... 10,000,000 2,035,200
Government National Mortgage Association,
8.950%, 10/15/28, Pool #222286................ 4,024,004 4,000,514
</TABLE>

<PAGE>

AGGRESSIVELY MANAGED FLEXIBLE PORTFOLIO (CONTINUED)

DECEMBER 31, 1994
<TABLE>
<CAPTION>
PAR MARKET
LONG-TERM BONDS (CONTINUED) VALUE VALUE
------------- --------------
<S> <C> <C>
United States Treasury Bonds,
6.250%, 08/15/23.............................. $ 21,510,000 $ 17,486,985
8.875%, 08/15/17.............................. 53,900,000 58,717,043
8.875%, 02/15/19, Series 2019................. 29,800,000 32,537,726
9.250%, 02/15/16, Series 2016................. 16,200,000 18,227,592
11.250%, 02/15/15............................. 119,750,000 158,219,688
12.000%, 08/15/13............................. 17,250,000 22,937,153
United States Treasury Notes,
6.500%, 08/15/97.............................. 15,000,000 14,545,350
7.500%, 10/31/99, Series 1999................. 42,250,000 41,642,445
7.750%, 11/30/99.............................. 16,125,000 16,064,530
7.875%, 11/15/04.............................. 24,750,000 24,819,547
--------------
411,233,773
--------------
TOTAL LONG-TERM BONDS
(Cost $886,300,335)............................................ 855,841,714
--------------
<CAPTION>

PRINCIPAL
SHORT-TERM INVESTMENTS -- 16.5% AMOUNT VALUE
------------- --------------
<S> <C> <C>
BANK-RELATED INSTRUMENTS -- 1.1%
Bank of Tokyo, Ltd., C.D.,
6.460%, 03/30/95.............................. 5,000,000 5,000,000
Banque Nationale De Paris, C.D.,
6.010%, 02/01/95.............................. 15,000,000 15,000,000
Fuji Bank, Ltd, C.D.,
5.906%, 01/20/95.............................. 14,000,000 14,000,000
Sanwa Bank, Ltd., C.D.,
6.040%, 02/02/95.............................. 4,000,000 4,000,000
--------------
38,000,000
--------------
COMMERCIAL PAPER -- 5.2%
American Home Products Corp.,
5.900%, 01/31/95.............................. 16,000,000 15,926,578
American Honda Finance Corp.,
5.980%, 01/31/95.............................. 2,000,000 1,990,698
American Telephone & Telegraph Co.,
6.300%, 03/24/95.............................. 500,000 493,000
Asset Securitization Cooperative Corp.,
5.970%, 02/02/95.............................. 4,000,000 3,980,100
6.050%, 02/01/95.............................. 3,100,000 3,084,892
Bankers Trust New York Corp.,
5.150%, 04/03/95.............................. 5,000,000 4,935,625
5.440%, 01/24/95.............................. 7,800,000 7,775,248
Chemical Bank,
6.000%, 01/23/95.............................. 250,000 249,167
6.250%, 01/03/95.............................. 656,000 656,000
CIT Group Holdings, Inc.,
5.500%, 01/17/95.............................. 11,000,000 10,976,472
Coca-Cola Enterprises, Inc.,
6.170%, 03/07/95.............................. 16,000,000 15,827,240
Corporate Asset Funding Co., Inc.,
5.500%, 01/11/95.............................. 3,000,000 2,996,333
Dean Witter, Discover & Co.,
5.970%, 02/01/95.............................. 16,000,000 15,923,053
First National Bank of Chicago,
5.180%, 02/27/95, Tranche #TR00072............ 1,000,000 999,143
5.688%, 02/22/95, Tranche #TR00087............ 5,000,000 5,000,000
Ford Motor Credit Co.,
6.070%, 01/31/95.............................. 4,335,000 4,314,534
Gateway Fuel Corp.,
5.800%, 01/20/95.............................. 1,082,000 1,079,037
General Electric Capital Corp.,
5.500%, 01/12/95.............................. 4,000,000 3,994,500
General Motors Acceptance Corp.,
5.740%, 01/17/95.............................. 16,100,000 16,064,061
Greyhound Financial Corp.,
6.300%, 01/27/95.............................. 2,000,000 1,991,600
Hanson Finance, PLC,
6.280%, 03/01/95.............................. 1,000,000 990,057
Household Finance Corp.,
5.500%, 01/12/95.............................. 5,000,000 4,993,125
International Lease Finance Corp.,
6.200%, 03/20/95.............................. 5,000,000 4,934,556
ITT Corp.,
5.820%, 01/17/95.............................. 2,000,000 1,995,473
ITT Financial Corp.,
6.200%, 01/23/95.............................. 6,000,000 5,979,333
Konica Finance USA Corp.,
6.200%, 01/10/95.............................. 1,000,000 998,794
McKenna Triangle National Corp.,
6.150%, 01/17/95.............................. 100,000 99,761
Merrill Lynch & Co., Inc.,
5.750%, 01/17/95.............................. 5,000,000 4,988,819
Morgan Guaranty Trust Co.,
6.500%, 05/18/95.............................. 259,200 252,882
NationsBank Corp. of North Carolina,
5.400%, 01/23/95.............................. 11,000,000 10,967,000
Newell Co.,
6.000%, 01/05/95.............................. 8,946,000 8,943,018
Public Service Electric & Gas Co.,
6.020%, 01/10/95.............................. 8,700,000 8,689,816
Sears, Roebuck Acceptance Corp.,
6.050%, 02/06/95.............................. 10,000,000 9,942,861
Transamerica Corp.,
6.150%, 01/20/95.............................. 350,000 348,984
--------------
182,381,760
--------------
MEDIUM TERM NOTES -- 0.6%
NationsBank Corp. of Texas, M.T.N.,
6.030%, 01/31/95, Tranche #TR00023............ 5,000,000 5,000,000
PNC Bank N.A., M.T.N.,
5.150%, 02/22/95, Tranche #TR00005............ 5,000,000 5,000,033
oXerox Credit Corp., M.T.N.,
6.800%, 06/02/95, Tranche #TR00016............ 10,000,000 10,002,050
--------------
20,002,083
--------------
PROMISSORY NOTES -- 0.1%
SRD Finance, Inc.,
6.150%, 01/12/95.............................. 3,000,000 2,995,388
Sumitomo Electric Finance U.S.A., Inc.,
6.050%, 01/26/95.............................. 2,000,000 1,992,269
--------------
4,987,657
--------------
</TABLE>

<PAGE>

AGGRESSIVELY MANAGED FLEXIBLE PORTFOLIO (CONTINUED)
DECEMBER 31, 1994
<TABLE>
<CAPTION>
PRINCIPAL
SHORT-TERM INVESTMENTS (CONTINUED) AMOUNT VALUE
------------- --------------
<S> <C> <C>
REPURCHASE AGREEMENTS -- 9.5%
Joint Repurchase Agreement Account,
5.720%, 01/03/95 (see Note 4)................. $ 330,700,000 $ 330,700,000
--------------
TOTAL SHORT-TERM INVESTMENTS..................................... 576,071,500
--------------
OTHER ASSETS -- 0.1%
(net of liabilities)........................................... 3,484,147
--------------
TOTAL NET ASSETS -- 100.0%....................................... $3,481,540,299
==============

The following abbreviations are used in portfolio descriptions:

ADR American Depository Receipt
C.D. Certificates of Deposit
CMO Collateralized Mortgage Obligations
L.P. Limited Partnership
M.T.N. Medium Term Note
PLC Public Limited Company (British Corporation)
SA Sociedad Anonima (Spanish Corporation) or Societe
Anonyme (French Corporation)

**Indicates a restricted security; the aggregate cost of the restricted
securities is $63,175,092. The aggregate value, $58,625,420 is
approximately 1.7% of net assets. (See Note 2)

+No dividend was paid on this security during the 12 months ending December
31, 1994.

oIndicates a variable rate security.
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS ON PAGES B11 THROUGH B14.

<PAGE>

CONSERVATIVELY MANAGED FLEXIBLE PORTFOLIO

DECEMBER 31, 1994

<TABLE>
<CAPTION>
MARKET
COMMON STOCKS -- 34.8% SHARES VALUE
------------- --------------
<S> <C> <C>
AEROSPACE -- 1.1%
+Coltec Industries, Inc.......................... 311,000 $ 5,325,875
GenCorp, Inc.................................... 676,800 8,037,000
Loral Corp...................................... 338,100 12,805,538
Rockwell International Corp..................... 253,100 9,048,325
+UNC, Inc........................................ 289,100 1,734,600
--------------
36,951,338
--------------
AUTOS - CARS & TRUCKS -- 1.9%
A.O. Smith Corp................................. 466,800 11,436,600
Ford Motor Co................................... 318,300 8,912,400
General Motors Corp............................. 192,800 8,145,800
General Motors Corp. (Class 'E' Stock).......... 325,600 12,535,600
General Motors Corp. (Class 'H' Stock).......... 465,900 16,248,263
Titan Wheel International, Inc.................. 332,600 9,229,650
--------------
66,508,313
--------------
BANKS AND SAVINGS & LOANS -- 2.4%
First Bank System, Inc.......................... 490,900 16,322,425
First Interstate Bancorp........................ 300,000 20,287,500
KeyCorp......................................... 937,400 23,435,000
Norwest Corp.................................... 1,060,200 24,782,175
--------------
84,827,100
--------------
CHEMICALS -- 1.1%
Imperial Chemical Industries, PLC, ADR.......... 371,300 17,265,450
OM Group, Inc................................... 308,400 7,401,600
W.R. Grace & Co................................. 318,800 12,313,650
--------------
36,980,700
--------------
CHEMICALS - SPECIALTY -- 0.8%
Ferro Corp...................................... 655,200 15,642,900
M.A. Hanna Co................................... 464,000 11,020,000
--------------
26,662,900
--------------
COMMERCIAL SERVICES -- 0.2%
+Welbilt Corp.................................... 168,600 5,627,025
--------------
COMPUTER SERVICES -- 0.5%
National Data Corp.............................. 413,400 10,645,050
+Paxar Corp...................................... 818,343 8,183,430
--------------
18,828,480
--------------
CONSTRUCTION -- 0.2%
Ply-Gem Industries.............................. 400,000 7,650,000
--------------
CONTAINERS -- 0.5%
Ball Corp....................................... 363,600 11,453,400
+Sealed Air Corp................................. 167,800 6,082,750
--------------
17,536,150
--------------
DIVERSIFIED GAS -- 0.1%
+Basin Exploration, Inc.......................... 148,000 1,628,000
--------------
DRUGS AND HOSPITAL SUPPLIES -- 1.1%
Schering-Plough Corp............................ 289,000 21,386,000
Warner-Lambert Co............................... 210,600 16,216,200
--------------
37,602,200
--------------
ELECTRICAL EQUIPMENT -- 0.3%
Belden Corp..................................... 524,300 11,665,675
--------------
ELECTRONICS -- 0.4%
+ADT Ltd......................................... 620,000 6,665,000
+IMO Industries, Inc............................. 477,900 5,973,750
--------------
12,638,750
--------------
FINANCIAL SERVICES -- 1.3%
American Express Co............................. 319,000 9,410,500
Dean Witter, Discover & Co...................... 736,500 24,948,938
Reinsurance Group of America, Inc............... 487,800 12,012,075
--------------
46,371,513
--------------
FOODS -- 0.4%
Universal Foods Corp............................ 542,000 14,905,000
--------------
FOREST PRODUCTS -- 0.6%
Mead Corp....................................... 455,900 22,168,137
--------------
FURNITURE -- 0.1%
Leggett & Platt, Inc............................ 128,700 4,504,500
--------------
GAS PIPELINES -- 0.4%
Enron Oil & Gas Co.............................. 332,700 6,238,125
+Seagull Energy Corp............................. 387,200 7,405,200
--------------
13,643,325
--------------
HOSPITAL MANAGEMENT -- 1.3%
+Healthtrust, Inc.-The Hospital Co............... 735,700 23,358,475
National Medical Enterprises, Inc............... 1,650,000 23,306,250
--------------
46,664,725
--------------
HOUSING RELATED -- 0.8%
+Giant Cement Holdings, Inc...................... 415,200 4,930,500
+Owens-Corning Fiberglas Corp.................... 662,800 21,209,600
--------------
26,140,100
--------------
INSURANCE -- 2.4%
Emphesys Financial Group, Inc................... 314,600 9,988,550
Equitable of Iowa Companies..................... 372,700 10,528,775
Financial Security Assurance Holdings, Ltd...... 226,200 4,750,200
National Re Corp................................ 207,600 5,449,500
PennCorp Financial Group, Inc................... 638,400 8,379,000
Provident Life & Accident Insurance Co. (Class
'B' Stock).................................... 177,200 3,854,100
TIG Holdings, Inc............................... 588,300 11,030,625
Trenwick Group, Inc............................. 276,200 11,703,975
W.R. Berkley Corp............................... 192,800 7,230,000
Western National Corp........................... 900,000 11,587,500
--------------
84,502,225
--------------
LEISURE -- 0.4%
+Caesars World, Inc.............................. 213,100 14,224,424
--------------
MACHINERY -- 0.6%
DT Industries, Inc.............................. 234,500 2,520,875
+INDRESCO, Inc................................... 390,700 5,567,475
Kaydon Corp..................................... 229,700 5,512,800
Parker-Hannifin Corp............................ 136,500 6,210,750
--------------
19,811,900
--------------
MEDIA -- 2.2%
Central Newspapers (Class 'A' Stock)............ 331,700 9,329,063
Comcast Corp. (Class 'A' Stock)................. 362,500 5,573,438
Comcast Corp. (Special Class 'A' Stock)......... 9,600 150,600
Lee Enterprises, Inc............................ 168,700 5,820,150
Media General, Inc. (Class 'A' Stock)........... 123,600 3,507,150
+Tele-Communications, Inc. (Class 'A' Stock)..... 848,200 18,448,350
Time Warner, Inc................................ 599,500 21,057,437
Times Mirror Co. (Class 'A' Stock).............. 400,000 12,550,000
--------------
76,436,188
--------------
</TABLE>

<PAGE>

CONSERVATIVELY MANAGED FLEXIBLE PORTFOLIO (CONTINUED)
DECEMBER 31, 1994
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
MISCELLANEOUS - BASIC INDUSTRY -- 4.8%
American Publishing Co. (Class 'A' Stock)....... 161,400 $ 1,775,400
BW/IP, Inc. (Class 'A' Stock)................... 379,200 6,493,800
Danaher Corp.................................... 227,800 11,902,550
Diebold, Inc.................................... 421,400 17,330,075
Donaldson Company, Inc.......................... 400,400 9,609,600
+Enterra Corp..................................... 280,300 5,325,700
+FMC Corp........................................ 110,800 6,398,700
+IDEX Corp....................................... 190,400 8,044,400
+Itel Corp....................................... 168,700 5,841,238
ITT Corp........................................ 144,000 12,762,000
+Litton Industries, Inc.......................... 259,700 9,608,900
Mark IV Industries, Inc......................... 545,300 10,769,675
Mascotech, Inc.................................. 607,300 7,818,988
Pentair, Inc.................................... 472,950 19,982,137
+SPS Transaction Services, Inc................... 192,800 5,061,000
Textron, Inc.................................... 96,400 4,856,150
Trinity Industries, Inc......................... 385,500 12,143,250
+Wolverine Tube, Inc............................. 279,500 6,638,125
York International Corp......................... 199,000 7,338,125
--------------
169,699,813
--------------
MISCELLANEOUS - CONSUMER GROWTH/STABLE -- 1.0%
Eastman Kodak Co................................ 372,300 17,777,325
Whitman Corp.................................... 913,400 15,756,150
--------------
33,533,475
--------------
PETROLEUM -- 0.9%
Cabot Oil & Gas Corp. (Class 'A' Stock)......... 594,400 8,618,800
Elf Aquitaine, ADR.............................. 530,100 18,686,025
Parker & Parsley Petroleum Co................... 257,800 5,284,900
--------------
32,589,725
--------------
PETROLEUM SERVICES -- 0.7%
+Mesa, Inc....................................... 1,008,400 4,915,950
Murphy Oil Corp................................. 190,800 8,109,000
Oryx Energy Co.................................. 849,400 10,086,625
--------------
23,111,575
--------------
RAILROADS -- 1.1%
Burlington Northern, Inc........................ 259,000 12,464,375
+Chicago & North Western Transportation Co....... 671,600 12,928,300
Illinois Central Corp........................... 440,000 13,530,000
--------------
38,922,675
--------------
REAL ESTATE DEVELOPMENT -- 0.7%
Zeneca Group, PLC, ADR.......................... 607,200 24,971,100
--------------
RESTAURANTS -- 0.4%
Morrison Restaurants, Inc....................... 350,300 8,582,350
+Shoney's, Inc................................... 530,100 6,758,775
--------------
15,341,125
--------------
RETAIL -- 1.3%
+Best Products Corp., Inc........................ 1,081,600 7,030,400
+Caldor Corp..................................... 382,100 8,501,725
Harcourt General, Inc........................... 277,500 9,781,875
K mart Corp..................................... 621,400 8,078,200
Rite Aid Corp................................... 258,200 6,035,425
Sears, Roebuck & Co............................. 139,800 6,430,800
--------------
45,858,425
--------------
RUBBER -- 0.3%
Goodyear Tire & Rubber Co....................... 269,800 9,072,024
--------------
STEEL -- 0.3%
+Material Sciences Corp.......................... 675,000 10,715,624
--------------
TELECOMMUNICATIONS -- 1.6%
+Airtouch Communications, Inc.................... 385,500 11,227,688
Century Telephone Enterprises, Inc.............. 337,300 9,950,350
MCI Communications Corp......................... 661,100 12,147,713
+Nextel Communications, Inc. (Class 'A'
Stock)........................................ 495,400 7,121,375
Rochester Telephone Corp........................ 797,700 16,851,412
--------------
57,298,538
--------------
TEXTILES -- 0.4%
+Owens-Illinois, Inc............................ 552,700 6,079,700
V.F. Corp....................................... 181,900 8,844,888
--------------
14,924,588
--------------
TRUCKING/SHIPPING -- 0.2%
Ryder System, Inc............................... 385,500 8,481,000
--------------
TOTAL COMMON STOCKS
(Cost $1,152,952,120).......................................... 1,218,998,355
--------------
<CAPTION>

PAR MARKET
LONG-TERM BONDS -- 27.3% VALUE VALUE
------------- --------------
<S> <C> <C>
FINANCIAL -- 5.2%
Associates Corp. of North America,
6.875%, 01/15/97.............................. $ 5,250,000 $ 5,117,018
8.250%, 12/01/99.............................. 34,100,000 33,900,515
8.375%, 01/15/98.............................. 1,100,000 1,099,989
Banc One Credit Card Master Trust, CMO,
7.750%, 12/15/99, Series 1994-B, Class B...... 5,100,000 5,036,250
oChrysler Financial Corp.,
3.813%, 11/15/96.............................. 13,200,000 13,264,415
Chrysler Financial Corp., M.T.N.,
5.390%, 08/27/96, Tranche #TR00041............ 7,300,000 7,005,810
CIGNA Mortgage Securities, Inc.,
9.400%, 01/15/02, Series 1988-1, Class A2..... 3,362,186 3,329,614
Citicorp, M.T.N.,
8.500%, 02/24/97, Tranche #TR00128............ 5,100,000 5,131,263
Dean Witter, Discover & Co.,
6.000%, 03/01/98.............................. 2,500,000 2,334,275
Discover Card Trust,
7.875%, 04/16/98, Series #1991-C, Class B..... 10,000,000 9,959,300
Federal Express Corp., M.T.N.,
10.010%, 06/01/98, Tranche #SR00067........... 3,000,000 3,101,790
10.050%, 06/15/99, Tranche #SR00068........... 500,000 521,055
First Union Corp.,
9.450%, 06/15/99.............................. 4,000,000 4,112,080
Ford Credit Grantor Trust, CMO,
7.300%, 10/15/99, Series 1994-8, Class A...... 11,669,941 11,527,714
Ford Motor Credit Co.,
7.750%, 11/15/02.............................. 3,300,000 3,146,979
General Motors Acceptance Corp.,
8.250%, 08/01/96.............................. 5,000,000 4,985,950
</TABLE>

<PAGE>

CONSERVATIVELY MANAGED FLEXIBLE PORTFOLIO (CONTINUED)
DECEMBER 31, 1994
<TABLE>
<CAPTION>
PAR MARKET
LONG-TERM BONDS (CONTINUED) VALUE VALUE
------------- --------------
<S> <C> <C>
General Motors Acceptance Corp., M.T.N.,
6.300%, 09/10/97, Tranche #TR00532............ $ 5,000,000 $ 4,735,700
6.500%, 06/10/96.............................. 13,000,000 12,725,960
7.375%, 07/20/98, Tranche #TR00667............ 4,650,000 4,474,184
7.500%, 11/04/97, Tranche #TR00598............ 15,000,000 14,602,050
7.850%, 03/05/97, Tranche #TR00187............ 3,300,000 3,259,938
Mellon Financial Co.,
6.500%, 12/01/97.............................. 1,650,000 1,577,565
Standard Credit Card Master Trust,
7.250%, 04/07/08, Series 1994-2A, Class A..... 4,650,000 4,237,313
Standard Credit Card Trust,
9.375%, 03/10/96, Series 1990-1............... 7,000,000 7,028,420
Union Bank Finland, Ltd.,
5.250%, 06/15/96.............................. 16,650,000 15,942,542
Westinghouse Credit Corp., M.T.N.,
8.750%, 06/03/96, Tranche #00248.............. 2,600,000 2,606,968
--------------
184,764,657
--------------
FOREIGN -- 4.5%
**Banco Del Estado-Chile,
8.390%, 08/01/01.............................. 3,700,000 3,487,250
**Banco Ganadero, SA, M.T.N.,
9.750%, 08/26/99, Tranche #TR00001............ 7,300,000 7,081,000
**oCemex, SA,
6.250%, 10/25/95, Series B.................... 4,250,000 4,165,000
**Cemex, SA, M.T.N.,
9.500%, 09/20/01, Tranche #TR00010............ 12,500,000 10,625,000
**Compania Sud Americana de Vapores, SA,
7.375%, 12/08/03.............................. 10,000,000 8,187,500
Controladora Commercial Mexicana, SA,
8.750%, 04/21/98.............................. 5,190,000 4,411,500
Empresa Columbia de Petroleos,
7.250%, 07/08/98.............................. 8,250,000 7,342,500
Financiera Energetic Nacional,
6.625%, 12/13/96.............................. 5,000,000 4,800,00
**Financiera Energetic Nacional, M.T.N.,
9.000%, 11/08/99.............................. 9,900,000 9,420,432
Fomento Economico Mexicano, SA,
9.500%, 07/22/97.............................. 5,150,000 5,107,352
**Grupo Condumex, SA, M.T.N.,
6.250%, 07/27/96.............................. 4,300,000 3,827,000
**Grupo Embotellador Mexicana,
10.750%, 11/19/97............................. 8,015,000 7,133,350
Grupo Televisa, SA,
10.000%, 11/09/97............................. 7,250,000 6,561,250
oHydro-Quebec,
3.438%, 09/30/49.............................. 3,500,000 2,925,780
**Kansallis-Osake Pankki, N.Y.,
8.650%, 12/29/49.............................. 10,000,000 9,675,000
Kansallis-Osake Pankki, N.Y., C.D.,
6.125%, 05/15/98.............................. 6,160,000 5,715,494
Korea Development Bank,
5.875%, 12/01/98.............................. 1,900,000 1,727,290
6.750%, 12/01/05.............................. 10,400,000 8,811,504
9.250%, 06/15/98.............................. 10,000,000 10,159,300
Korea Electric Power Corp.,
7.750%, 04/01/13.............................. 2,350,000 2,038,343
Republic of Columbia,
7.125%, 05/11/98.............................. 2,775,000 2,548,664
7.250%, 02/23/04.............................. 5,400,000 4,448,250
8.750%, 10/06/99.............................. 925,000 882,219
Republic of South Africa,
9.625%, 12/15/99.............................. 8,200,000 8,120,563
**Republic of Trinidad and Tobago,
11.750%, 10/03/04............................. 9,300,000 9,416,250
United Mexican States,
5.820%, 06/28/01.............................. 1,375,000 976,250
6.970%, 08/12/00.............................. 2,300,000 1,771,000
8.500%, 09/15/02.............................. 6,850,000 5,514,250
--------------
156,879,291
--------------
INDUSTRIAL -- 4.3%
Arkla, Inc., M.T.N.,
9.250%, 12/18/97, Tranche #TR00027............ 3,000,000 2,988,840
Avenor, Inc.,
9.375%, 02/15/04.............................. 11,225,000 10,590,086
Coca-Cola Enterprises, Inc.,
6.500%, 11/15/97.............................. 3,750,000 3,582,975
Columbia/HCA Healthcare Corp., M.T.N.,
8.850%, 01/01/07, Tranche #TR00009............ 12,700,000 12,674,600
Comdisco, Inc.,
8.950%, 05/15/95.............................. 19,420,000 19,533,800
Delta Air Lines, Inc.,
9.750%, 05/15/21.............................. 10,800,000 9,927,575
10.375%, 02/01/11............................. 6,850,000 6,697,040
**Enterprise Rent A Car, M.T.N.,
8.750%, 12/15/99.............................. 13,750,000 13,702,563
Ford Motor Co.,
9.000%, 09/15/01.............................. 3,900,000 3,979,482
Hanson Overseas Corp.,
5.500%, 01/15/96.............................. 2,000,000 1,953,980
News America Holdings, Inc.,
7.750%, 01/20/24.............................. 4,550,000 3,716,304
Oryx Energy Co., M.T.N.,
6.050%, 02/01/96, Tranche #TR00013............ 12,000,000 11,550,000
PT Alatief Freeport Financial Co.,
9.750%, 04/15/01.............................. 8,950,000 8,726,250
RJR Nabisco, Inc.,
8.625%, 12/01/02.............................. 14,350,000 13,310,056
8.750%, 08/15/05.............................. 2,550,000 2,324,886
Sears, Roebuck & Co., M.T.N.,
9.420%, 04/01/96, Series IV................... 1,000,000 1,018,625
Sears, Roebuck Acceptance Corp.,
9.000%, 09/15/96.............................. 2,000,000 2,024,140
Tele-Communications, Inc.,
7.875%, 08/01/13.............................. 6,800,000 5,664,060
9.875%, 06/15/22.............................. 4,700,000 4,606,658
**Time Warner, Inc.,
6.050%, 07/01/95.............................. 8,000,000 7,933,040
</TABLE>

<PAGE>

CONSERVATIVELY MANAGED FLEXIBLE PORTFOLIO (CONTINUED)
DECEMBER 31, 1994
<TABLE>
<CAPTION>
PAR MARKET
LONG-TERM BONDS (CONTINUED) VALUE VALUE
------------- --------------
<S> <C> <C>
Westinghouse Electric Corp., M.T.N.,
8.700%, 06/20/96, Tranche #TR00029............ $ 2,950,000 $ 2,956,136
--------------
149,461,096
--------------
U.S. GOVERNMENT & AGENCY OBLIGATIONS -- 13.3%
Federal National Mortgage Association,
9.050%, 04/10/00.............................. 14,000,000 14,647,500
United States Treasury Bonds,
6.250%, 08/15/23.............................. 29,585,000 24,051,717
11.250%, 02/15/15............................. 168,850,000 223,093,063
12.000%, 08/15/13............................. 50,450,000 67,082,861
United States Treasury Notes,
6.000%, 11/30/97.............................. 87,600,000 83,534,484
7.250%, 11/15/96.............................. 21,000,000 20,835,990
7.500%, 10/31/99.............................. 8,550,000 8,427,050
7.750%, 11/30/99.............................. 4,525,000 4,508,031
7.875%, 11/15/04.............................. 19,075,000 19,128,601
--------------
465,309,297
--------------
TOTAL LONG-TERM BONDS
(Cost $997,384,451)............................................ 956,414,341
--------------
<CAPTION>

PRINCIPAL
SHORT-TERM INVESTMENTS -- 36.9% AMOUNT VALUE
------------- --------------
<S> <C> <C>
BANK-RELATED INSTRUMENTS -- 5.9%
Bank of Tokyo, Ltd., C.D.,
6.460%, 03/30/95.............................. 25,000,000 25,000,000
Banque Nationale De Paris, C.D.,
6.010%, 02/01/95.............................. 35,000,000 35,000,000
Chemical Bank, N.Y., T.D.,
6.250%, 01/03/95.............................. 7,393,000 7,393,000
Fuji Bank, Ltd., C.D.,
5.906%, 01/20/95.............................. 7,000,000 7,000,000
6.360%, 03/21/95.............................. 15,000,000 15,000,000
Fuji Bank, Ltd., T.D.,
6.400%, 01/03/95.............................. 25,000,000 25,000,000
National Westminister Bank, PLC, C.D.,
5.800%, 01/23/95.............................. 1,000,000 999,870
Republic National Bank of New York, C.D.,
4.300%, 03/08/95.............................. 21,000,000 20,988,906
Sanwa Bank, Ltd., C.D.,
6.040%, 02/02/95.............................. 50,000,000 50,000,000
Sumitomo Bank, Ltd., C.D.,
5.960%, 01/30/95.............................. 10,000,000 10,000,000
Sumitomo Bank, Ltd., T.D.,
6.060%, 02/01/95.............................. 10,000,000 10,000,000
--------------
206,381,776
--------------
COMMERCIAL PAPER -- 23.8%
oAmerican Express Centurion Bank,
4.500%, 08/04/95, Tranche #TR00037............ 4,000,000 3,999,765
American Home Products Corp.,
5.900%, 01/31/95.............................. 61,440,000 61,158,059
American Honda Finance Corp.,
5.980%, 01/31/95.............................. 13,000,000 12,939,535
Aristar, Inc.,
5.540%, 01/23/95.............................. 1,000,000 996,922
6.300%, 03/20/95.............................. 2,000,000 1,973,400
Asset Securitization Cooperative Corp.,
5.500%, 01/23/95.............................. 9,000,000 8,972,500
5.970%, 02/02/95.............................. 6,000,000 5,970,150
6.050%, 02/01/95.............................. 12,800,000 12,737,618
Bankers Trust New York Corp.,
5.150%, 04/03/95.............................. 25,637,000 25,306,924
5.440%, 01/24/95.............................. 17,200,000 17,145,419
Barclays Bank, PLC,
6.100%, 02/17/95.............................. 500,000 496,188
Chrysler Financial Corp.,
5.750%, 01/17/95.............................. 23,000,000 22,948,569
CIESCO,
5.500%, 01/11/95.............................. 5,000,000 4,993,889
CIT Group Holdings, Inc.,
5.500%, 01/17/95.............................. 13,000,000 12,972,194
5.970%, 02/01/95.............................. 14,000,000 13,932,672
Coca-Cola Enterprises, Inc.,
6.015%, 02/01/95.............................. 23,000,000 22,888,555
6.120%, 01/31/95.............................. 31,970,000 31,817,823
6.170%, 03/07/95.............................. 4,900,000 4,847,092
Corporate Receivables Corp.,
6.170%, 03/07/95.............................. 47,000,000 46,492,518
6.570%, 05/23/95.............................. 11,100,000 10,816,395
Dean Witter, Discover & Co.,
5.970%, 02/01/95.............................. 7,344,000 7,308,680
Deerfield Capital,
6.090%, 01/17/95.............................. 19,900,000 19,852,870
Duracell, Inc.,
6.300%, 02/10/95.............................. 2,000,000 1,986,700
Falcon Asset Securitization Corp.,
6.100%, 01/13/95.............................. 11,000,000 10,981,360
6.170%, 03/07/95.............................. 8,975,000 8,878,092
General Electric Capital Corp.,
6.430%, 04/13/95.............................. 6,150,000 6,040,154
6.450%, 04/13/95-04/18/95..................... 36,350,000 35,684,396
General Motors Acceptance Corp.,
5.740%, 01/17/95.............................. 60,500,000 60,364,951
Golden Peanut Co.,
5.600%, 02/01/95-02/03/95..................... 9,500,000 9,455,589
Greyhound Financial Corp.,
6.180%, 02/16/95.............................. 7,649,000 7,591,225
6.290%, 02/08/95.............................. 5,000,000 4,968,550
6.300%, 01/27/95.............................. 7,000,000 6,970,600
6.330%, 02/07/95.............................. 2,000,000 1,987,692
Hanson Finance, PLC,
5.470%, 01/17/95.............................. 2,000,000 1,995,746
6.260%, 03/03/95.............................. 5,000,000 4,948,703
6.270%, 03/09/95.............................. 13,000,000 12,852,829
6.280%, 03/01/95.............................. 4,000,000 3,960,227
Heller Financial, Inc.,
6.300%, 03/14/95.............................. 6,000,000 5,926,500
International Lease Finance Corp.,
6.200%, 03/20/95.............................. 10,000,000 9,869,111
ITT Corp.,
5.820%, 01/17/95.............................. 7,000,000 6,984,157
ITT Financial Corp.,
6.200%, 01/20/95.............................. 28,000,000 27,918,022
Maguire/Thomas Partners,
6.100%, 01/18/95.............................. 5,000,000 4,987,292
MCA Funding Corp.,
5.100%, 01/09/95.............................. 5,000,000 4,995,750
5.120%, 01/17/95.............................. 22,000,000 21,956,196
</TABLE>

<PAGE>

CONSERVATIVELY MANAGED FLEXIBLE PORTFOLIO (CONTINUED)
DECEMBER 31, 1994
<TABLE>
<CAPTION>
PRINCIPAL
SHORT-TERM INVESTMENTS (CONTINUED) AMOUNT VALUE
------------- --------------
<S> <C> <C>
McKenna Triangle National Corp.,
6.100%, 01/23/95.............................. $ 1,000,000 $ 996,611
Merrill Lynch & Co., Inc.,
5.750%, 01/17/95.............................. 15,000,000 14,966,458
Morgan Stanley Group, Inc.,
6.270%, 03/01/95.............................. 8,500,000 8,415,616
National Australia Funding, Inc.,
5.600%, 02/01/95.............................. 2,000,000 1,990,978
NationsBank Corp. of North Carolina,
5.400%, 01/23/95.............................. 19,000,000 18,943,000
Newell Co.,
6.000%, 01/05/95.............................. 21,054,000 21,046,982
Preferred Receivables Funding Corp.,
5.650%, 01/11/95.............................. 13,000,000 12,983,678
Public Service Electric & Gas Co.,
6.020%, 01/17/95.............................. 11,000,000 10,974,248
Republic National Bank of New York,
5.750%, 02/01/95.............................. 5,000,000 4,999,985
Sears Roebuck Acceptance Corp.,
6.050%, 02/07/95.............................. 37,000,000 36,782,368
State Street Bank & Trust,
5.950%, 01/17/95.............................. 33,377,000 33,299,769
WCP Funding, Inc.,
6.280%, 03/06/95.............................. 4,000,000 3,956,738
Westpac Capital Corp.,
6.280%, 03/14/95.............................. 6,000,000 5,926,733
Whirlpool Corp.,
5.660%, 02/02/95.............................. 2,000,000 1,990,567
Whirlpool Financial Corp.,
5.600%, 02/06/95-02/09/95..................... 3,000,000 2,983,667
5.610%, 02/10/95.............................. 5,000,000 4,970,392
WMX Technologies,
5.200%, 05/12/95.............................. 4,000,000 3,925,467
5.225%, 02/07/95.............................. 3,000,000 2,984,760
Xerox Credit Corp.,
5.970%, 02/01/95.............................. 32,000,000 31,846,107
--------------
835,855,703
--------------
MEDIUM TERM NOTES -- 2.4%
PNC Bank N.A., M.T.N.,
5.150%, 02/22/95, Tranche #TR00005............ 10,000,000 10,000,066
oCorestates Capital Corp., M.T.N.,
6.020%, 07/19/95, Tranche #TR00076............ 10,000,000 10,002,084
**oGoldman Sachs Group, L.P., M.T.N.,
3.875%, 04/13/95.............................. 48,000,000 48,000,000
oXerox Credit Corp., M.T.N.,
6.800%, 06/02/95, Tranche #TR00016............ 15,000,000 15,003,075
--------------
83,005,225
--------------
PROMISSORY NOTES -- 1.3%
Diamond Lease USA, Inc.,
6.100%, 01/18/95.............................. 1,000,000 997,458
Lehman Brothers Holdings, Inc.,
5.028%, 05/23/95.............................. 32,000,000 32,000,000
Seiko Corporation of America,
6.100%, 01/20/95.............................. 3,000,000 2,991,358
SRD Finance, Inc.,
6.100%, 01/12/95.............................. 3,000,000 2,995,425
Sumitomo Electric Finance U.S.A., Inc.,
6.050%, 01/26/95.............................. 8,000,000 7,969,078
--------------
46,953,319
--------------
REPURCHASE AGREEMENTS -- 3.5%
Joint Repurchase Agreement Account,
5.720%, 01/03/95 (see Note 4)................. 121,345,000 121,345,000
--------------
TOTAL SHORT-TERM INVESTMENTS..................................... 1,293,541,023
--------------
OTHER ASSETS -- 1.0%
(net of liabilities)........................................... 32,150,567
--------------
TOTAL NET ASSETS -- 100.0%....................................... $3,501,104,286
==============
<FN>

The following abbreviations are used in portfolio descriptions:

ADR American Depository Receipt
C.D. Certificates of Deposit
CMO Collateralized Mortgage Obligations
M.T.N. Medium Term Note
PLC Public Limited Company (British Corporation)
SA Sociedad Anonima (Spanish Corporation) or Societe
Anonyme (French Corporation)
T.D. Time Deposit

**Indicates a restricted security; the aggregate cost of the restricted
securities is $148,547,029. The aggregate value, $142,653,385 is
approximately 4.1% of net assets. (See Note 2)

+No dividend was paid on this security during the 12 months ending December
31, 1994.

oIndicates a variable rate security.

</FN>
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS ON PAGES B11 THROUGH B14.

B10

<PAGE>

NOTES TO THE FINANCIAL STATEMENTS OF THE
AGGRESSIVELY MANAGED FLEXIBLE AND CONSERVATIVELY MANAGED FLEXIBLE
PORTFOLIOS OF THE PRUDENTIAL SERIES FUND, INC.
FOR THE YEARS ENDED DECEMBER 31, 1994 AND DECEMBER 31, 1993

NOTE 1: GENERAL

The Prudential Series Fund, Inc. ("Series Fund"), a Maryland corporation,
organized on November 15, 1982, is a diversified open-end management investment
company registered under the Investment Company Act of 1940, as amended. The
Series Fund is composed of sixteen Portfolios, each with a separate series of
capital stock. Shares in the Series Fund are currently sold only to certain
separate accounts of The Prudential Insurance Company of America ("The
Prudential"), Pruco Life Insurance Company and Pruco Life Insurance Company of
New Jersey (together referred to as the "Companies") to fund benefits under
certain variable life insurance and variable annuity contracts issued by the
Companies. The Portfolio options available to PRUvider contract owners are the
Aggressively Managed Flexible and the Conservatively Managed Flexible
Portfolios.

The shareholders of Pruco Life Series Fund, Inc. ("Pruco Fund") and the Series
Fund approved the merger of the Pruco Fund into the Series Fund as of November
1, 1986. The merger combined five portfolios with identical investment
strategies (Money Market, Bond, Common Stock, Aggressively Managed Flexible and
Conservatively Managed Flexible) of the Pruco Fund with their counterpart in the
Series Fund. The merger was effected by converting the net assets of the Pruco
Fund at the merger date into shares of the Series Fund at the share price of
that day and was accounted for as a pooling of interest.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SECURITIES VALUATION: Equity securities are valued at market. Securities traded
on a national securities exchange are valued at the last sales price on such
exchange as of the close of the New York Stock Exchange or, in the absence of
recorded sales, at the mean between the most recently quoted bid and asked
prices. For any securities not traded on a national securities exchange but
traded in the over-the-counter market, the securities are valued at the mean
between the most recently quoted bid and asked prices, except that securities
for which quotations are furnished through a nationwide automated quotation
system approved by the National Association of Securities Dealers, Inc.
("NASDAQ") are valued at the last sales price or if there was no sale on such
day, at the mean between the most recently quoted bid and asked prices.
Convertible debt securities are valued at the mean between the most recently
quoted bid and asked prices provided by principal market makers. High yield
bonds are valued either by quotes received from principal market makers or by an
independent pricing service which determines prices by analysis of quality,
coupon, maturity and other adjustment factors. Long-term bonds are valued at
market, based on valuation prices by an independent pricing service which
determines prices by analysis of quality, coupon, maturity and other adjustment
factors. Short-term investments are valued at amortized cost, which with accrued
interest approximates market value. Amortized cost is computed using the cost on
the date of purchase adjusted for constant amortization of discount or premium
to maturity. The interest rates shown for Commercial Paper, Promissory Notes,
and certain U.S. Government Agency Obligations on the Schedules of Investments
are the discount rates paid at the time of purchase. Any security for which a
quotation is unavailable is valued at fair value as determined in good faith by
or under the direction of the Series Fund's Board of Directors.

The ability of issuers of debt securities held by specific Portfolios of the
Series Fund to meet their obligations may be affected by economic developments
in a specific country or industry.

The portfolios of the Fund may invest up to 15% of their total assets in
securities which are subject to legal or contractual restrictions on resale or
for which no readily available market exists ("restricted securities").
Restricted securities are valued pursuant to the valuation procedures noted
above.

DERIVATIVE FINANCIAL INSTRUMENTS: The Series Fund may engage in various
portfolio strategies to seek increased returns by hedging the portfolios against
adverse movements in the equity, debt, and currency markets. Losses may arise
due to changes in the value of the contract or if the counterparty does not
perform under the contract.

OPTION WRITING: When the Series Fund sells an option, an amount equal to the
premium received is recorded as a liability and is subsequently adjusted to the
current market value of the option written. Premiums received from writing
options which expire unexercised are treated on the expiration date as gains
from the sale of

B11

<PAGE>

securities. As to options which are closed, the difference between the premium
and the amount paid on effecting a closing purchase transaction, including
brokerage commissions, is also treated as a gain, or if the premium received is
less than the amount paid for the closing purchase transaction, as a loss. If a
call option is exercised, the premium is added to the proceeds from the sale in
determining whether a gain or loss has been realized.

The Series Fund's use of written options involves, to varying degrees, elements
of market risk in excess of the amount recognized in the statement of assets and
liabilities. The contract or notional amounts reflect the extent of the Series
Fund's involvement in these financial instruments. Risks arise from the possible
movements in foreign exchange rates and securities values underlying these
instruments.

STOCK INDEX FUTURES: Portfolios of the Fund may attempt to reduce the risk of
investment in equity securities by hedging a portion of their equity portfolios
through the use of stock index futures traded on a commodities exchange or board
of trade. A stock index futures contract is an agreement in which the seller of
the contract agrees to deliver to the buyer an amount of cash equal to a
specific dollar amount times the difference between the value of a specific
stock index at the close of the last trading day of the contract and the price
at which the agreement was made. Upon entering into a futures contract, a
Portfolio is required to pledge to the broker liquid assets equal to the minimum
"initial margin," approximately 5% of the contract amount. The Portfolio further
agrees to receive or pay to the broker an amount of cash equal to the futures
contract's daily fluctuation in value. These receipts or payments are known as
the "variation margin" and are recorded as unrealized gains or losses. When a
futures contract is closed, the Portfolio records a realized gain or loss equal
to the difference between the value of the contract at the time it was opened
and the value at the time it was closed.

FOREIGN CURRENCY TRANSACTIONS: The books and records of the Series Fund are
maintained in U.S. dollars. Foreign currency amounts are translated into U.S.
dollars on the following basis:

(i) market value of investment securities, other assets and liabilities at the
mid daily rate of exchange as reported by a major New York City bank;

(ii) purchases and sales of investment securities, income and expenses at the
rate of exchange prevailing on the respective dates of such transactions.

Since the net assets of the Series Fund are presented at the foreign exchange
rates and market values at the close of the fiscal period, it is not practical
to isolate that portion of the results of operations arising as a result of
changes in the foreign exchange rates from the fluctuations arising from change
in the market prices of securities held at the end of the fiscal period.
Similarly, it is not practical to isolate the effect of changes in foreign
exchange rates from the fluctuations arising from changes in the market prices
of equities sold during the fiscal year.

Foreign security and currency transactions may involve certain considerations
and risks not typically associated with those of domestic origin as a result of,
among other factors, the possibility of political and economic instability and
the level of government supervision and regulation of foreign security markets.

The bond components of the Aggressively Managed Flexible and Conservatively
Managed Flexible Portfolios may each invest up to 20% of their assets in United
States currency denominated debt securities issued outside the United States by
foreign or domestic issuers. Further, the Aggressively Managed Flexible
Portfolio may invest up to 30% of its total assets in debt and equity securities
denominated in a foreign currency and issued by foreign or domestic issuers.

Net realized gains and losses on foreign currency transactions represent net
foreign exchange gains and losses from holding of foreign currencies; currency
gains or losses realized between the trade and settlement dates on security
transactions; and the difference between the amounts of the dividends and
foreign taxes recorded on the Series Fund's books and the U.S. dollar equivalent
amounts actually received or paid. Net currency gains and losses from valuing
foreign currency denominated assets and liabilities at fiscal period end
exchange rates are reflected as a component of unrealized loss on foreign
currencies.

FORWARD FOREIGN EXCHANGE CONTRACTS: The Series Fund is authorized to enter into
forward foreign exchange contracts as a hedge against either specific
transactions or portfolio positions. Such contracts are not entered on the
Series Fund's records. However, the effect on operations is recorded from the
date the Series Fund enters into such contracts. Premium or discount is
amortized over the life of the contracts.

B12

<PAGE>

SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Dividend income is recorded on
the ex-dividend date. Interest income is accrued daily on both long-term bonds
and short-term investments. Interest income also includes net amortization from
the purchase of fixed-income securities. Long-term security and option
transactions are recorded on the first business day following the trade date,
except that transactions on the last business day of the reporting cycle are
recorded on that date. Short-term security and futures transactions are recorded
on trade date. Realized gains and losses from security transactions are
determined and accounted for on the basis of identified cost.

DISTRIBUTIONS AND TAXES: The Portfolios of the Series Fund intend to continue
to qualify for and elect the special tax treatment afforded regulated investment
companies under Subchapter M of the Internal Revenue Code, thereby relieving the
Series Fund of Federal income taxes. To so qualify, the Series Fund intends to
distribute substantially all of its net investment income and net realized
capital gains, if any, less any available capital loss carry forward.

EXPENSES: Each Portfolio pays for certain expenses incurred in its individual
operation, and also pays a portion of the Series Fund's general administrative
expenses allocated on the basis of the asset size of the respective Portfolios.

The Series Fund has an arrangement with Chemical Banking Corporation, a
custodian bank. On a daily basis, cash funds which are not invested earn a
credit which is used to offset custody charges on a Portfolio basis. For the
year ended December 31, 1994, the total of the credit used was:

Conservatively Managed Flexible Portfolio..................... $ 91,232
Aggressively Managed Flexible Portfolio....................... 41,492

NOTE 3: INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES

INVESTMENT MANAGEMENT AND ACCOUNTING FEES: Pursuant to an investment advisory
agreement (the "Agreement"), The Prudential receives an investment management
fee, calculated daily, at an effective annual rate of 0.55% of the average daily
net assets of the Conservatively Managed Flexible Portfolio and 0.60% of the
average daily net assets of the Aggressively Managed Flexible Portfolio. Under
the Agreement, The Prudential has agreed to refund to a portfolio the portion of
the management fee for that Portfolio equal to the amount that the aggregate
annual ordinary operating expenses (excluding interest, taxes and brokerage
commissions) exceeds 0.75% of the Portfolio's average daily net assets. The
Agreement also requires the Series Fund to reimburse The Prudential for the cost
of maintaining staff and personnel who provide daily accounting services for the
operation of the Series Fund.

DIRECTORS' EXPENSES: The Series Fund pays for the fees and expenses of those
members of the Series Fund's Board of Directors who are not officers or
employees of The Prudential or its affiliates.

BROKERAGE COMMISSIONS: For the year ended December 31, 1994, Prudential
Securities Inc., an indirect, wholly-owned subsidiary of The Prudential, earned
$560,155 in brokerage commissions from Portfolio transactions executed on behalf
of the Series Fund.

NOTE 4: JOINT REPURCHASE AGREEMENT ACCOUNT

The Portfolios of the Series Fund transfer uninvested cash balances into a
single joint account, the daily aggregate balance of which is invested in one or
more repurchase agreements collateralized by U.S. Government obligations. The
Series Fund's undivided interest in the joint repurchase agreement account
represented $974,388,000 in the principal amount as of December 31, 1994. The
Portfolios of the Series Fund with cash in the joint account had the following
percentage participation in the account:

Aggressively Managed Flexible Portfolio....................... 33.94%
Conservatively Managed Flexible Portfolio..................... 12.45%
All other portfolios (currently not available to PRUvider).... 53.61%
----------
100.00%

B13

<PAGE>

As of such date, each repurchase agreement in the joint account and the
collateral thereof were as follows:

Banker's Trust Securities Repurchase Agreement, dated 12/30/94, in the principal
amount of $225,000,000, repurchase price $225,143,746, due 1/3/95;
collateralized by $225,555,000 U.S. Treasury Notes, 8%, due 5/15/01.

Goldman Sachs Repurchase Agreement, dated 12/30/94, in the principal amount of
$67,388,000, repurchase price $67,427,309, due 1/3/95; collateralized by
$61,265,000 U.S. Treasury Bonds, 8.875%, due 2/15/19.

Morgan Stanley Repurchase Agreement, dated 12/30/94, in the principal amount of
$278,000,000, repurchase price $278,171,508, due 1/3/95; collateralized by
$143,865,000 U.S. Treasury Notes, 5.125%, due 3/31/98; $142,980,000 U.S.
Treasury Notes, 8.75%, due 10/15/97.

Nomura Securities Repurchase Agreement, dated 12/30/94, in the principal amount
of $179,000,000, repurchase price $179,119,333, due 1/3/95; collateralized by
$26,435,000 U.S. Treasury Bonds, 7.125%, due 2/15/23; $33,240,000 U.S. Treasury
Bonds, 7.875%, due 2/15/21; $118,360,000 U.S. Treasury Bonds, 8.125%, due
8/15/19.

Smith Barney Repurchase Agreement, dated 12/30/94, in the principal amount of
$100,000,000, repurchase price $100,065,552, due 1/3/95; collateralized by
$4,805,000 U.S. Treasury Bonds, 12.0%, due 8/15/13; $17,000,000 U.S. Treasury
Bonds, 7.125%, due 2/15/23; $15,000,000 U.S. Treasury Bonds, 8.875%, due
2/15/19; $17,000,000 U.S. Treasury Bonds, 11.875%, due 11/15/03; $33,000,000
U.S. Treasury Bonds, 11.125%, due 8/15/03.

UBS Securities Repurchase Agreement, dated 12/30/94, in the principal amount of
$125,000,000, repurchase price $125,079,860, due 1/3/95; collateralized by
$45,000,000 U.S. Treasury Bonds, 14.0%, due 11/15/11; $62,000,000 U.S. Treasury
Notes, 5.125%, due 3/31/96.

NOTE 5: PURCHASE AND SALE OF SECURITIES

The aggregate cost of purchase and the proceeds from the sales of securities
(excluding short-term issues) for the year ended December 31, 1994 were as
follows:

Cost of Purchases:

AGGRESSIVELY CONSERVATIVELY
MANAGED MANAGED
FLEXIBLE FLEXIBLE
-------------- --------------
Debt Securities................. $2,110,107,294 $2,264,216,698
Equity Securities............... $1,463,207,489 $ 587,491,444

Proceeds From Sales:

AGGRESSIVELY CONSERVATIVELY
MANAGED MANAGED
FLEXIBLE FLEXIBLE
-------------- --------------
Debt Securities................. $1,985,428,664 $2,265,817,380
Equity Securities............... $1,492,407,199 $ 430,107,759

The federal income tax basis and unrealized appreciation/depreciation of the
Fund's investments as of December 31, 1994 were as follows:

AGGRESSIVELY CONSERVATIVELY
MANAGED MANAGED
FLEXIBLE FLEXIBLE
-------------- --------------
Gross Unrealized Appreciation... $ 224,521,828 147,865,296
Gross Unrealized Depreciation... 93,827,948 122,789,171
Total Net Unrealized............ 130,693,880 25,076,125
Tax Basis....................... 3,347,362,272 3,443,877,594

B14

<PAGE>

INDEPENDENT AUDITORS' REPORT

The Shareholders and Board of Directors of The Prudential Series Fund, Inc.:

We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of the Aggressively Managed Flexible and
Conservatively Managed Flexible Portfolios (two of the portfolios comprising The
Prudential Series Fund, Inc.), as of December 31, 1994, the related statements
of operations for the year then ended, the statements of changes in net assets
for each of the two years in the period then ended, and financial highlights
contained in the prospectus for each of the ten years in the period then ended.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1994 by correspondence with the custodian and brokers; where
replies were not received from brokers, we performed other auditing procedures.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of each of the respective portfolios of The
Prudential Series Fund, Inc. as of December 31, 1994, the results of their
operations for the year then ended, the changes in their net assets for each of
the two years in the period then ended, and financial highlights for each of the
ten years in the period then ended in conformity with generally accepted
accounting principles.

Deloitte & Touche LLP
Parsippany, New Jersey
February 10, 1995

B15

<PAGE>

PART II

OTHER INFORMATION

<PAGE>

UNDERTAKING TO FILE REPORTS

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 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.

UNDERTAKING WITH RESPECT TO INDEMNIFICATION

The Prudential Directors' and Officers' Liability and Corporation Reimbursement
Program, purchased by The Prudential from Aetna Casualty & Surety Company, CNA
Insurance Company, Lloyds of London, Great American Insurance Company, Reliance
Insurance Company, Corporate Officers & Directors Assurance Ltd., A.C.E.
Insurance Company, Ltd., XL Insurance Company, Ltd., and Zurich-American
Insurance Company, provides coverage for "Loss" (as defined in the policies)
arising from any claim or claims by reason of any actual or alleged act, error,
misstatement, misleading statement, omission, or breach of duty by persons in
the discharge of their duties solely in their capacities as directors or
officers of The Prudential, any of its subsidiaries, or certain investment
companies affiliated with The Prudential. Coverage is also provided to the
individual directors or officers for such Loss, for which they shall not be
indemnified. Loss essentially is the legal liability on claims against a
director or officer, including adjudicated damages, settlements and reasonable
and necessary legal fees and expenses incurred in defense of adjudicatory
proceedings and appeals therefrom. Loss does not include punitive or exemplary
damages or the multiplied portion of any multiplied damage award, criminal or
civil fines or penalties imposed by law, taxes or wages, or matters which are
insurable under the law pursuant to which the policies are construed.

There are a number of exclusions from coverage. Among the matters excluded are
Losses arising as the result of (1) claims brought about or contributed to by
the criminal or deliberate fraudulent acts of a director or officer, and (2)
claims arising from actual or alleged performance of, or failure to perform,
services as, or in any capacity similar to, an investment adviser, investment
banker, underwriter, broker or dealer, as those terms are defined in the
Securities Act of 1933, the Securities Exchange Act of 1934, the Investment
Advisers Act of 1940, the Investment Company Act of 1940, any rules or
regulations thereunder, or any similar federal, state or local statute, rule or
regulation.

The limit of coverage under the Program for both individual and corporate
reimbursement coverage is $150,000,000. The retention for corporate
reimbursement coverage is $10,000,000 per loss.

The relevant provisions of New Jersey law permitting or requiring
indemnification, New Jersey being the state of organization of The Prudential,
can be found in Section 14A:3-5 of the New Jersey Statutes Annotated. The
relevant provisions of Arizona law, Arizona being the state of organization of
Pruco Life, can be found in Section 10-005 of the Arizona Statutes Annotated.
The text of The Prudential's by-law 27, which relates to indemnification of
officers and directors, is incorporated by reference to Exhibit (8)(ii) of
Post-Effective Amendment No. 26 to Form N-3, Registration No. 2-76580, filed
April , 1995, on behalf of The Prudential Variable Contract Account-10. The text
of Pruco Life's by-laws, Article VIII, which relates to indemnification of
officers and directors, is incorporated by reference to Exhibit 1.A.(6)(b) to
this Registration Statement.

Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the 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, the 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 Act and will be governed by the final adjudication of
such issue.

II-1

<PAGE>

CONTENTS OF REGISTRATION STATEMENT

This Registration Statement comprises the following papers and documents:

The facing sheet.

Cross-reference to items required by Form N-8B-2.

The prospectus consisting of 51 pages.

The Statement of Additional Information consisting of 46 pages.

The undertaking to file reports.

The undertaking with respect to indemnification.

The signatures.

Written consents of the following persons:

1. Deloitte & Touche LLP, independent auditors.
2. Clifford E. Kirsch, Esq.
3. Nancy D. Davis, FSA, MAAA

The following exhibits:

1. The following exhibits correspond to those required by paragraph
A of the instructions as to exhibits in Form N-8B-2:

A. (1) Resolution of Board of Directors of Pruco Life Insurance
Company establishing the Pruco Life PRUvider Variable
Appreciable Account. (Note 5)
(2) Not Applicable.
(3) Distributing Contracts:
(a) Distribution Agreement between Pruco Securities
Corporation and Pruco Life Insurance Company.
(Note 5)
(b) Proposed form of Agreement between Pruco Securities
Corporation and independent brokers with respect to
the Sale of the Contracts. (Note 5)
(c) Schedules of Sales Commissions. (Note 5)
(4) Not Applicable.
(5) PRUvider Variable Appreciable Life Insurance Contract.
(Note 5)
(6) (a) Articles of Incorporation of Pruco Life Insurance
Company, as amended July 25, 1972. (Note 2)
(b) By-laws of Pruco Life Insurance Company, as amended
June 14, 1983. (Note 3)
(7) Not Applicable.
(8) Not Applicable.
(9) Not Applicable.
(10) (a) Application Form Part I for PRUvider Variable
Appreciable Life Insurance Contract.
(Note 5)
(b) Application Form Part II for PRUvider Variable
Appreciable Life Insurance Contract.
(Note 5)
(c) Supplement to the Application for PRUvider Variable
Appreciable Life Insurance Contract. (Note 5)
(11) Form of Notice of Withdrawal Right. (Note 6)

(12) Memorandum describing Pruco Life Insurance Company's
issuance, transfer, and redemption procedures for the
Contracts pursuant to Rule 6e-3(T)(b)(12)(iii) and
method of computing cash adjustment upon exercise of
right to exchange for fixed-benefit insurance pursuant
to Rule 6e-3(T)(b)(13)(v)(B). (Note 1)

(13) Available Contract Riders.
(a) Rider for Insured's Payment of Premium Benefit.
(Note 5)
(b) Rider for Applicant's Payment of Premium Benefit.
(Note 5)
(c) Rider for Insured's Accidental Death and
Dismemberment Benefit. (Note 5)
(d) Rider for Option to Purchase Additional Insurance
on Life of Insured. (Note 5)
(e) Rider for Level Term Insurance Benefit on Dependent
Children. (Note 5)
(f) Rider for Level Term Insurance Benefit on Dependent
Children--from Term Conversions. (Note 5)

II-2

<PAGE>

(g) Rider for Level Term Insurance Benefit on Dependent
Children--from Term Conversions or Attained Age
Change. (Note 5)
(h) Living Needs Benefit Rider
(i) for use in Florida. (Note 4)
(ii) for use in all approved jurisdictions except
Florida. (Note 4)
(i) Rider for Term Insurance Benefit on Life of
Insured--Decreasing Amount. (Note 7)
(j) Rider for Term Insurance Benefit on Life of Insured
Spouse--Decreasing Amount. (Note 7)

(k) Endorsement altering the Assignment provision ORD
89224--94-P. (Note 10)

2. See Exhibit 1.A.(5).

3. Opinion and Consent of Clifford E. Kirsch, Esq. as to the
legality of the securities being registered. (Note 1)

4. None.

5. Not Applicable.

6. Opinion and Consent of Nancy D. Davis, FSA, MAAA, as to
actuarial matters pertaining to the securities being registered.
(Note 1)

7. Indemnification Agreement. (Note 8)

8. Powers of Attorney. (Note 9)

27. Financial Data Schedule. (Note 1)

(Note 1) Filed herewith.
(Note 2) Incorporated by reference to Exhibit 1.A.(6)(a), Form N-8B-2
Registration No. 2-80513, filed November 22, 1982, on behalf of
the Pruco Life Variable Insurance Account.
(Note 3) Incorporated by reference to Post-Effective Amendment No. 13 to
Form S-6, Registration No. 2-89558, filed March 2, 1989, on
behalf of the Pruco Life Variable Appreciable Account.
(Note 4) Incorporated by reference to Post-Effective Amendment No. 16 to
Form S-6, Registration No. 2-89558, filed April 26, 1990, on
behalf of the Pruco Life Variable Appreciable Account.
(Note 5) Incorporated by reference to Registrant's Form S-6, filed July
24, 1992.
(Note 6) Incorporated by reference to Pre-Effective Amendment No. 1 to
this Registration Statement, filed October 22, 1992.
(Note 7) Incorporated by reference to Post-Effective Amendment No. 2 to
Form S-6, Registration No. 33-49994, filed April 28, 1993.
(Note 8) Incorporated by reference to Post-Effective Amendment No. 3 to
Form S-6, Registration No. 33-49994, filed March 2, 1994.
(Note 9) Incorporated by reference to Form S-1, Registration No.
33-86780, filed November 23, 1994 on behalf of the Pruco Life
Real Property Account.

(Note 10) Incorporated by reference to Post-Effective Amendment No. 5 to
Form S-6, Registration No. 33-49994, filed February 13, 1995.

II-3

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that this Amendment is filed solely for one or more of the purposes
specified in Rule 485(b)(1) under the Securities Act of 1933 and that no
material event requiring disclosure in the prospectus, other than one listed in
Rule 485(b)(1), has occurred since the filing date of a Post-Effective Amendment
filed under Rule 485(a) which has become effective, and has caused this
Registration Statement to be signed on its behalf by the undersigned thereunto
duly authorized, and its seal hereunto affixed and attested, all in the city of
Newark and the State of New Jersey, on this 24th day of April, 1995.

(Seal) Pruco Life PRUvider Variable Appreciable Account
(Registrant)

By: Pruco Life Insurance Company
(Depositor)

Attest: /s/ Thomas C. Castano By: /s/ Esther H. Milnes
---------------------------- ----------------------------
Thomas C. Castano Esther H. Milnes
Assistant Secretary President

Pursuant to the requirements of the Securities Act of 1933, this Post-Effective
Amendment No. 6 to the Registration Statement has been signed below by the
following persons in the capacities indicated on this 24th day of April, 1995.

Signature and Title
-------------------

/s/ *
- -------------------------------------
Robert P. Hill
Chairman of the Board

/s/ *
- -------------------------------------
Esther Milnes
President and Director

/s/ *
- -------------------------------------
Stephen Tooley
Chief Accounting Officer and
Comptroller

/s/ *
- -------------------------------------
E. Michael Caulfield
Director

/s/ * *By: /s/ Thomas C. Castano
- ------------------------------------- ---------------------------------
Garnett L. Keith, Jr. Thomas C. Castano
Director (Attorney-in-Fact)

/s/ *
- -------------------------------------
Ira J. Kleinman
Director

/s/ *
- -------------------------------------
I. Edward Price
Director

/s/ *
- -------------------------------------
Donald G. Southwell
Director

II-4

<PAGE>

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Post-Effective Amendment No. 6 to Registration
Statement No. 33-49994 on Form S-6 of Pruco Life PRUvider Variable Appreciable
Account of Pruco Life Insurance Company of our report dated February 10, 1995,
relating to the financial statements of Pruco Life PRUvider Variable Appreciable
Account, and of our report dated March 6, 1995 relating to the consolidated
financial statements of Pruco Life Insurance Company and subsidiaries appearing
in the Prospectus, which is part of such Registration Statement, and to the
reference to us under the heading "Experts" in such Prospectus.

/s/ Deloitte & Touche LLP
Parsippany, New Jersey
April 24, 1995

II-5

<PAGE>

EXHIBIT INDEX

Consent of Deloitte & Touche LLP, Page II-5
independent auditors

1.A.(12) Memorandum describing Pruco Life Page II-7
Insurance Company's issuance, transfer,
and redemption procedures for the
Contracts pursuant to Rule
6e-3(T)(b)(12)(iii) and method of
computing cash adjustment upon exercise
of right to exchange for fixed-benefit
insurance pursuant to Rule
6e-3(T)(b)(13)(v)(B).

3. Opinion and Consent of Clifford E. Page II-17
Kirsch, Esq. as to the legality of the
securities being registered.

6. Opinion and Consent of Nancy D. Davis, Page II-18
FSA, MAAA, as to actuarial matters
pertaining to the securities being
registered.

27. Financial Data Schedule Page II-20

II-6

Exhibit 1.A.(12)

Description of Pruco Life's Issuance, Transfer
and Redemption Procedures for
PRUvider Variable Appreciable Life Insurance Contracts
Pursuant to Rule 6e-3(T)(b)(12)(iii)

and

Method of Computing Adjustments in
Payments and Cash Surrender Values Upon
Conversion to Fixed Benefit Policies
Pursuant to Rule 6e-3(T)(b)(13)(v)(B)

This document sets forth the administrative procedures that will be
followed by Pruco Life Insurance Company ("Pruco Life") in connection with the
issuance of its PRUvider Variable Appreciable Life Insurance Contract
("Contract"), the transfer of assets held thereunder, and the redemption by
contract owners of their interests in said Contracts. The document also explains
the method that Pruco Life will follow in making a cash adjustment when a
Contract is exchanged for a fixed benefit insurance policy pursuant to Rule
6e-3(T)(b)(13)(v)(B).

I. Procedures Relating to Issuance and Purchase of the Contracts

A. Premiums Schedules and Underwriting Standards

Premiums for the Contract will not be the same for all owners. Insurance
is based on the principle of pooling and distribution of mortality risks, which
assumes that each owner pays a premium commensurate with the Insured's mortality
risk as actuarially determined utilizing factors such as age, sex (in most
cases), smoking status, health and occupation. A uniform premium for all
Insureds would discriminate unfairly in favor of those Insureds representing
greater risks. However, for a given face amount of insurance, Contracts issued
on insureds in a given risk classification will have the same scheduled premium.

The underwriting standards and premium processing practices followed by
Pruco Life are similar to those followed in connection with the offer and sale
of fixed-benefit life insurance, modified where necessary to meet the
requirements of the federal securities laws.

B. Application and Initial Premium Processing

Upon receipt of a completed application form from a prospective owner,
Pruco Life will follow certain insurance underwriting (i.e., evaluation of risk)
procedures designed to determine whether the proposed Insured is insurable. In
the majority of cases this will involve only evaluation of the answers to the
questions on the

II-7

<PAGE>

application and will not include a medical examination. In other cases, the
process may involve such verification procedures as medical examinations and may
require that further information be provided by the proposed Insured before a
determination can be made. A Contract cannot be issued, i.e., physically issued
through Pruco Life's computerized issue system, until this underwriting
procedure has been completed.

These processing procedures are designed to provide immediate benefits to
every prospective owner who pays the initial scheduled premium at the time the
application is submitted, without diluting any benefit payable to any existing
owner. Although a Contract cannot be issued until after the underwriting process
has been completed, such a proposed Insured will receive immediate insurance
coverage for the face amount of the Contract, if he or she proves to be
insurable and the owner has paid the first scheduled premium.

The Contract Date marks the date on which benefits begin to vary in
accordance with the investment performance of the selected investment option(s).
It is also the date as of which the insurance age of the proposed Insured is
determined. It represents the first day of the Contract year and therefore
determines the Contract anniversary and also the Monthly Dates. It also
represents the commencement of the suicide and contestable periods for purposes
of the Contract.

If the initial scheduled premium is paid with the application and no
medical examination is required (so that Part 2 of the application is not
completed) the Contract Date will ordinarily be the date of the application. If
an unusual delay is encountered (for example, if a request for further
information is not met promptly), the Contract Date will be 21 days prior to the
date on which the Contract is physically issued. If a medical examination is
required, the Contract Date will ordinarily be the date on which Part 2 of the
application (the medical report) is completed, subject to the same qualification
as that noted above.

If the initial scheduled premium is not paid with the application, the
Contract Date will be the Contract Date stated in the Contract, which will
generally be the date the initial premium is received from the owner and the
Contract is delivered.

There are two principal variations from the foregoing procedure. First, if
the owner wishes permanent insurance protection and variability of benefits to
commence at a future date, he or she can designate that date and purchase term
insurance in a fixed amount for the intervening period. The maximum length of
initial term insurance available is eleven months.

II-8

<PAGE>

Second, if permitted by the insurance laws of the state in which the
Contract is issued, the Contract may be back dated up to six months, provided
that all past due scheduled premiums are paid with the application and that the
backdating results in a lower insurance age for the Insured. The values under
the Contract and the amount(s) deposited into the selected investment option(s)
will be calculated upon the assumptions that the Contract has been issued on the
Contract Date and all scheduled premiums had been received on their due dates.
If the initial premium paid is in excess of the aggregate of the scheduled
premiums due since the Contract Date, the excess (after the front-end
deductions) will be credited to the Contract and placed in the selected
investment option(s) on the date of receipt.

In general, (1) the invested portion of the initial scheduled premium will
be placed in the Contract Fund and allocated to the selected investment options
as of the Contract Date; and (2) the invested portion of any premiums in excess
of the initial scheduled premium will be placed in the Contract Fund and
allocated to the selected investment options as of the later of the Contract
Date and the date received.

If, however, one or more premium due dates has passed before all
requirements for the issuance of the Contract have been satisfied, (1) the
invested portion of the initial scheduled premium will be placed in the Contract
Fund as of the Contract Date, (2) scheduled premiums will be placed in the
Contract Fund as of the intervening premium due dates, and (3) any premium
payments in excess of the aggregate premiums due since the Contract Date will be
placed in the Contract Fund as of the date of receipt.

C. Premium Processing

Whenever a premium after the first is received, unless the Contract is in
default past its days of grace, Pruco Life will subtract the front-end
deductions. What is left will be invested in the selected investment option(s)
on the date received (or, if that is not a business day, on the next business
day). There is an exception if the Contract is in default within its days of
grace. Then, to the extent necessary to end the default, premiums will be
credited as of the date of the default or the Monthly Date after default, and
premiums greater than this amount will be credited when received.

D. Reinstatement

The Contract may be reinstated within five years after default (this
period will be longer if required by state law) unless the Contract has been
surrendered for its cash surrender value. A Contract will be reinstated upon
receipt by Pruco Life of a written application for reinstatement, production of
evidence of insurability

II-9

<PAGE>

satisfactory to Pruco Life and payment of at least the amount required to bring
the premium account up to zero on the first monthly date on which a scheduled
premium is due after the date of reinstatement. Any contract debt under reduced
paid-up insurance must be repaid with interest or carried over to the reinstated
contract.

Pruco Life will treat the amount paid upon reinstatement as a premium. It
will deduct the front-end charges, plus any charges in arrears, other than
mortality charges, with interest. The contract fund of the reinstated Contract
will, immediately upon reinstatement, be equal to this net premium payment, plus
the cash surrender value of the Contract immediately before reinstatement, plus
a refund of that part of the deferred sales and administrative charges which
would be charged if the Contract were surrendered immediately after
reinstatement. The original Contract Date still controls for purposes of
calculating any contingent deferred sales and administrative charges, and any
termination dividends.

The reinstatement will take effect as of the date the required proof of
insurability and payment of the reinstatement amount have been received by Pruco
Life at its Home Office.

Pruco Life may agree to accept a lower amount than described above. This
lower amount must be at least the amount necessary to bring the contract fund
after reinstatement up to the tabular contract fund, plus the estimated monthly
charges for the next three months. The contract fund after reinstatement will be
calculated in the same way as described above. In this case, the premium account
after reinstatement will be negative, so payment of future scheduled premiums
does not guarantee that the contract will not lapse at some time in the future.

There is an alternative to this reinstatement procedure that applies only
if reinstatement is requested within three months after the contract went into
default. In such a case evidence of insurability will not be required and the
amount of the required payment will be the lesser of the unpaid scheduled
premiums and the amount necessary to make the contract fund equal to the tabular
contract fund on the third Monthly Date following the date on which the Contract
went into default.

E. Repayment of Loan

A loan made under the Contract may be repaid with an amount equal to the
monies borrowed plus interest which accrues daily, at a fixed annual rate of
5-1/2%.

When a loan is made, Pruco Life will transfer an amount equal to the
contract loan from the investment option(s). Under the loan provision, the
amount of contract fund attributable to the outstanding contract loan

II-10

<PAGE>

will be credited with interest at an annual rate of at least 4%, and Pruco Life
thus will realize the difference between that rate and the fixed loan interest
rate, which will be used to cover the loan investment expenses, income taxes, if
any, and processing costs.

Upon repayment of Contract debt, the loan portion of the payment (i.e.,
not the interest) will be added to the investment option(s). Amounts originally
borrowed from the fixed-rate option will be allocated to the fixed-rate option,
and the rest will be allocated among the variable investment option(s) in
proportion to the amounts in each variable investment option attributable to the
Contract as of the date of repayment.

II. Transfers

The Pruco Life PRUvider Variable Appreciable Account ("Account") currently
has two subaccounts, each of which is invested in shares of a corresponding
portfolio of The Prudential Series Fund, Inc. ("Fund"), which is registered
under the 1940 Act as an open-end diversified management investment company. In
addition, a fixed-rate option is available for investment by contract owners.
Provided the Contract is not in default or is in force as variable reduced
paid-up insurance, the owner may, up to four times in each contract year,
transfer amounts from one subaccount to another subaccount or to the fixed-rate
option. All or a portion of the amount credited to a subaccount may be
transferred.

In addition, the entire amount of the contract fund may be transferred to
the fixed-rate option at any time during the first two contract years. A
contract owner who wishes to convert his or her variable contract to a
fixed-benefit contract in this manner must request a complete transfer of funds
to the fixed-rate option and his or her allocation instructions regarding any
future premiums.

Transfers among subaccounts will take effect at the end of the valuation
period during which a proper written request or authorized telephone request is
received at a Home Office. The request may be in terms of dollars, such as a
request to transfer $1,000 from one account to another, or may be in terms of a
percentage reallocation among subaccounts. In the latter case, as with premium
reallocations, the percentages must be in whole numbers.

Transfers from the fixed-rate option to other investment options are
currently permitted only once each contract year and only during the thirty-day
period beginning on the contract anniversary. The maximum amount which may
currently be transferred out of the fixed-rate option each year is the greater
of: (a) 25% of the amount in the fixed-rate option, and (b) $1,000. Such
transfer requests received prior to the contract

II-11

<PAGE>

anniversary will be effected on the contract anniversary. Transfer requests
received within the thirty-day period beginning on the contract anniversary will
be effected as of the end of the valuation period during which the request is
received. These limits are subject to change in the future.

III. "Redemption" Procedures: Surrender and Related Transactions

A. Surrender for Cash Surrender Value

If the insured party under a Contract is alive, Pruco Life will pay,
within seven days, the Contract's cash surrender value as of the date of receipt
at its Home Office of the Contract and a signed request for surrender. The
Contract's cash surrender value is computed as follows:

1. If the Contract is not in default: The cash surrender value is
the contract fund, minus any surrender charge, consisting of a deferred sales
charge and a deferred administrative charge, minus any contract debt.

The deferred sales charge and deferred administrative charge are described
in the prospectus. The deferred administrative charge is designed to recover the
administrative expenses, such as underwriting expenses, incurred in connection
with the issuance of a Contract. As a result, in the early months after issue,
there may be no cash surrender value if only scheduled premiums are paid.

2. If the Contract is in default during its days of grace, Pruco
Life will compute the cash surrender value as of the date the Contract went into
default. It will adjust this value for any loan the owner took out or paid back
or any premium payments or withdrawals made in the days of grace.

3. If the Contract is in default beyond its days of grace, the cash
surrender value as of any date will be either the value on that date of any
extended insurance benefits then in force, or the value on that date of any
fixed or variable reduced paid-up insurance benefit then in force, less any
Contract debt.

In lieu of the payment of the cash surrender value in a single sum upon
surrender of a Contract, an election may be made by the owner to apply all or a
portion of the proceeds under one of the fixed benefit settlement options
described in the Contract or, with the approval of Pruco Life, a combination of
options. An option is available only if the proceeds to be applied are $2,000 or
more or would result in periodic payments of at least $20.00. The fixed-benefit
settlement options are subject to the restrictions and limitations set forth in
the Contract.

B. Withdrawal of Excess Cash Surrender Value

II-12

<PAGE>

A withdrawal may be made only if the following conditions are satisfied.
First, the amount withdrawn, plus the cash surrender value after withdrawal, may
not be more than the cash surrender value before withdrawal. Second, the
contract fund after the withdrawal must not be less than the tabular contract
fund after the withdrawal. Third, the amount withdrawn must be at least $200. An
owner may make no more than four such withdrawals in a Contract year, and there
is a fee of the lesser of $15 and 2% of the amount withdrawn for each such
withdrawal. An amount withdrawn may not be repaid except as a premium subject to
the Contract charges.

Whenever a withdrawal is made, the death benefit payable will immediately
be reduced by at least the amount of the withdrawal. This will not change the
guaranteed minimum amount of insurance (i.e., the face amount) nor the amount of
the scheduled premium that will be payable thereafter on such a Contract.

C. Death Claims

Pruco Life will pay a death benefit to the beneficiary within seven days
after receipt at its Home Office of due proof of death of the Insured and all
other requirements necessary to make payment. State Insurance laws impose
various requirements, such as receipt of tax waiver, before payment of the death
benefit may be made. In addition, payment of the death benefit is subject to the
provisions of the Contract regarding suicide and incontestability. In the event
Pruco Life should contest the validity of a death claim, an amount up to the
portion of the Contract fund in the variable investment options will be
withdrawn, if appropriate, and held in Pruco Life's general account.

The following describes the death benefit if the Contract is not in
default past its days of grace. The death benefit is the face amount, plus any
excess of the contract fund over the tabular contract fund, less any contract
debt. There may be an additional amount payable from an extra benefit added to
the Contract by rider. Tabular contract funds on Contract anniversaries are
shown in the contract data pages. Tabular contract funds at intermediate times
can be obtained by interpolation.

If the contract fund grows to exceed the net single premium at the
insured's attained age for the death benefit described above, the death benefit
will be the contract fund, divided by such net single premium. The death benefit
will be adjusted for any contract debt and any extra benefits in the same manner
as above.

The proceeds payable on death also will include interest (at a rate
determined by The Prudential from time to time) from the date that the death
benefit is computed (the date of death) until the date of payment.

II-13

<PAGE>

Pruco Life will make payment of the death benefit out of its general
account, and will transfer assets, if appropriate, from the Account to the
general account in an amount up to the contract fund.

In lieu of payment of the death benefit in a single sum, an election may
be made to apply all or a portion of the proceeds under one of the fixed benefit
settlement options described in the Contract or, with the approval of Pruco
Life, a combination of options. The election may be made by the owner during the
Insured's lifetime, or, at death, by the beneficiary.

An option in effect at death may not be changed to another form of benefit
after death. An option is available only if the proceeds to be applied are
$1,000 or more or would result in periodic payments of at least $20.00. The
fixed benefit settlement options are subject to the restrictions and limitations
set forth in the Contract.

D. Default and Options on Lapse

The Contract is in default on any Monthly Date on which the premium
account is less than zero and the contract fund is less than an amount which
will grow at the assumed net rate of return to the tabular contract fund
applicable on the next Monthly Date. Monthly Dates occur on the Contract Date
and in each later month on the same day of the month as the Contract Date. The
Contract provides for a grace period commencing on the Monthly Date on which the
Contract goes into default and extending at least 61 days after the mailing date
of the notice of default. The insurance coverage continues in force during the
grace period, but if the Insured dies during the grace period, any charges due
during the grace period are deducted from the amount payable to the beneficiary.

Except for Contracts issued on certain insureds in high risk rating
classes, a lapsed Contract will normally provide extended term insurance at
expiration of the grace period. The death benefit of the extended term insurance
is equal to the death benefit of the Contract (excluding riders) as of the date
of default, less any Contract debt. The extended term insurance will continue
for a length of time that depends on the cash surrender value on the due date of
first unpaid premium, the amount of insurance, and the age and sex of the
insured. However, extended term insurance may be exchanged, if the contract
owner so elects, for fixed or variable reduced paid-up insurance within three
months of the due date of the premium in default. The face amount of the reduced
paid-up insurance will depend on the cash surrender value on the due date of the
premium in default, and the age and sex of the insured. Variable reduced paid-up
is only available if the

II-14

<PAGE>

amount of such insurance is at least as great as the amount of extended
insurance, and if the insured is not in a high risk rating class.

Contracts issued on the above-mentioned high risk insureds will be
converted to fixed reduced paid-up whole-life insurance at expiration of the
grace period.

If the amount of variable reduced paid-up (VRPU) is at least equal to the
amount of extended term insurance, and VRPU is available, then VRPU will be the
automatic option on lapse.

E. Loans

The Contract provides that an owner, if no premium is in default beyond
the grace period, may take out a loan at any time a loan value is available. The
Contract also provides for a loan value if the Contract is in effect under the
contract value option for fixed or variable reduced paid-up insurance, but not
if it is in effect as extended term insurance. The owner may borrow money on
completion of a form satisfactory to Pruco Life. The Contract is the only
security for the loan. Disbursement of the amount of the loan will be made
within seven days of receipt of the form at a Home Office. The investment
options will be debited in the amount of the loan on the date the form is
received. The percentage of the loan withdrawn from each investment option will
normally be equal to the percentage of the value of such assets held in the
investment option. An owner may borrow up to the Contract's full loan value. The
loan provision is described in the prospectus.

A loan does not affect the amount of premiums due. When a loan is made,
the contract fund is not reduced, but the value of the assets relating to the
Contract held in the investment option(s) is reduced. Accordingly, the daily
changes in the cash surrender value will be different from what they would have
been had no loan been taken. Cash surrender values and the death benefit are
thus permanently affected by any Contract debt, whether or not repaid.

The guaranteed minimum death benefit is not affected by Contract debt if
premiums are duly paid. However, on settlement the amount of any Contract debt
is subtracted from the insurance proceeds. If Contract debt ever becomes equal
to or more than what the cash surrender value would be if there was no Contract
debt, all the Contract's benefits will end 31 days after notice is mailed to the
owner and any known assignee, unless payment of an amount sufficient to end the
default is made within that period.

F. Optional Paid-Up Benefit

II-15

<PAGE>

The Contract has an optional paid-up benefit that may be exercised if the
guaranteed paid-up insurance amount is equal to or exceeds the greater of the
face amount and the face amount plus the contract fund, before deduction of any
monthly charges, minus the tabular contract fund. The guaranteed paid-up
insurance amount is the value of the contract fund minus the present value of
the future charges, the result multiplied by the attained age factor (the
reciprocal of the net single premium). Once exercised you may not make future
premium payments without Pruco Life's permission.

IV. Cash Adjustment Upon Exchange of Contract

As described previously, at any time during the first 24 months after a
Contract is issued, so long as the Contract is not in default, the Owner may
transfer all amounts in the variable investment options into the fixed-rate
option. This option is provided in lieu of the option to exchange to a
comparable fixed-benefit life insurance combined.

II-16

Exhibit 3

April 24, 1995

Pruco Life Insurance Company
213 Washington Street
Newark, New Jersey 07102-2992

To Pruco Life Insurance Company:

In my capacity as Chief Legal Officer and Assistant Secretary of Pruco Life
Insurance Company ("Pruco Life"), I have reviewed the establishment on July 10,
1992 of the Pruco Life PRUvider Variable Appreciable Account (the "Account") by
the Executive Committee of the Board of Directors of Pruco Life as a separate
account for assets applicable to certain variable life insurance contracts,
pursuant to the provisions of Section 20-651 of the Arizona Insurance Code. I am
responsible for oversight of the preparation and review of the Registration
Statement on Form S-6, as amended, filed by Pruco Life with the Securities and
Exchange Commission (Registration No. 33-49994) under the Securities Act of 1933
for the registration of certain variable appreciable life insurance contracts
issued with respect to the Account.

I am of the following opinion:

(1) Pruco Life was duly organized under the laws of Arizona and is a
validly existing corporation.

(2) The Account has been duly created and is validly existing as a
separate account pursuant to the aforesaid provisions of Arizona
law.

(3) The portion of the assets held in the Account equal to the reserve
and other liabilities for variable benefits under the variable life
insurance contracts is not chargeable with liabilities arising out
of any other business Pruco Life may conduct.

(4) The variable life insurance contracts are legal and binding
obligations of Pruco Life in accordance with their terms.

In arriving at the foregoing opinion, I have made such examination of law and
examined such records and other documents as I judged to be necessary or
appropriate.

I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement.

Very truly yours,

Clifford E. Kirsch

II-17

Exhibit 6

April 24, 1995

Pruco Life Insurance Company
213 Washington Street
Newark, New Jersey 07102-2992

To Pruco Life Insurance Company:

This opinion is furnished in connection with the registration by Pruco Life
Insurance Company of variable life insurance contracts ("Contracts") under the
Securities Act of 1933. The prospectus included in Post-Effective Amendment No.
6 to Registration Statement No. 33-49994 on Form S-6 describes the Contracts. I
have reviewed the Contract form and I have participated in the preparation and
review of the Registration Statement and Exhibits thereto. In my opinion:

(1) The illustrations of cash surrender values and death benefits
included in the section of the prospectus entitled "Illustrations",
based on the assumptions stated in the illustrations, are consistent
with the provisions of the Contract. The rate structure of the
Contract has not been designed so as to make the relationship
between premiums and benefits, as shown in the illustrations, appear
more favorable to a prospective purchaser of a Contract issued on a
male age 35 than to prospective purchasers of Contracts on males of
other ages or on females.

(2) The illustration of the effect of a Contract loan on the cash
surrender value included in the section of the prospectus entitled
"Contract Loans", based on the assumptions stated in the
illustration, is consistent with the provisions of the Contract.

II-18

<PAGE>

-2-

(3) The deduction in an amount equal to 1.25% of each premium is a
reasonable charge in relation to the additional income tax burden
imposed upon Pruco Life and its parent company, The Prudential
Insurance Company of America, as the result of the enactment of
Section 848 of the Internal Revenue Code. In reaching that
conclusion a number of factors were taken into account that, in my
opinion, were appropriate and which resulted in a projected
after-tax rate of return that is a reasonable rate to use in
discounting the tax benefit of the deductions allowed in Section 828
in taxable years subsequent to the year in which the premiums are
received.

I hereby consent to the use of this opinion as an exhibit to the Registration
Statement and to the reference to my name under the heading "Experts" in the
prospectus.

Very truly yours,

Nancy D. Davis, FSA, MAAA
Vice President and Assistant Actuary
The Prudential Insurance Company of America

II-19

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