PACIFIC CORINTHIAN VAR SEP ACCT OF PACIFIC CORINTHIAN LIFE I, N-4, 1997-10-30

PACIFIC CORINTHIAN VAR SEP ACCT OF PACIFIC CORINTHIAN LIFE I
N-4, 1997-10-30

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<PAGE>

File 333-
File 811-7082

As filed with the Securities and Exchange Commission on October 30, 1997

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]

Pre-Effective Amendment No. _____ [ ]
Post-Effective Amendment No. [ ]

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 [ ]

Amendment No. 6 [X]
(Check appropriate box or boxes)

PACIFIC CORINTHIAN VARIABLE SEPARATE ACCOUNT OF
PACIFIC LIFE INSURANCE COMPANY
(Exact Name of Registrant)

PACIFIC LIFE INSURANCE COMPANY*
(Name of Depositor)

700 Newport Center Drive, Newport Beach, CA 92660
(Address of Depositor's Principal Executive Offices) (Zip Code)

(714) 640-3800
(Depositor's Telephone Number, including Area Code)

Diane N. Ledger
Vice President
Pacific Mutual Life Insurance Company
700 Newport Center Drive
Newport Beach, CA 92660
(Name and address of agent for service)

Copies of all communications to:

Jeffrey S. Puretz, Esq.
Dechert Price & Rhoads
1500 K Street, N.W., Suite 500
Washington, D.C. 20005

Approximate Date of Proposed Public Offering: As soon as practicable after
effectiveness of the Registration Statement and no later than October 31, 1997.

Title of Securities Being Registered: Interests in a separate account under
Individual Flexible Premium Deferred Annuity and Variable Accumulation
Contracts.

The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
shall determine.

*On September 1, 1997, Pacific Mutual Life Insurance Company converted from a
mutual insurance company to a stock insurance company under California law, and
changed its name to Pacific Life Insurance Company.
<PAGE>

Pacific Corinthian Variable Separate Account of
Pacific Life Insurance Company

Cross Reference Sheet Pursuant to Rule 495(a)

<TABLE>
<CAPTION>
Form N-4
Item Number Prospectus Caption
<C> <S>
Item 1 Cover Page
Item 2 Glossary of Special Terms
Item 3 Annual Separate Account and Fund Expenses
Item 4 Financial Highlights
Item 5 Pacific Life Insurance Company; The Separate
Account; The Pacific Select Fund
Item 6 Charges and Expenses
Item 7 The Contract
Item 8 The Contract - Payment Plans
Item 9 The Contract - Death Benefit
Item 10 The Contract
Item 11 The Contract - Transfers and Withdrawals
Item 12 Federal Income Tax Status
Item 13 Other Information
Item 14 Statement of Additional Information

Item Number Statement of Additional Information Caption

Item 15 Cover Page
Item 16 Table of Contents
Item 17 General Information and History; Prospectus -
Pacific Life Insurance Company
Item 18 Services
Item 19 Prospectus - The Contract
Item 20 Services - Distribution Agreement
Item 21 Performance Information
Item 22 Prospectus - Payment Plans
Item 23 Financial Statements
</TABLE>

PART C

Information required to be included in Part C is set forth under the appropriate
Item, so numbered, in Part C to this Registration Statement.
<PAGE>

PROSPECTUSES FOR:

. INDIVIDUAL FLEXIBLE PREMIUM DEFERRED ANNUITY AND VARIABLE ACCUMULATION
CONTRACT, ADMINISTERED BY PACIFIC CORINTHIAN VARIABLE SEPARATE ACCOUNT OF
PACIFIC LIFE INSURANCE COMPANY
DATED , 1997

. PACIFIC SELECT FUND DATED MAY 1, 1997

PACIFIC CORINTHIAN
[LOGO OF PACIFIC CORINTHIAN] VARIABLE ANNUITY
Pacific Life Insurance
Company

<PAGE>

[LOGO OF PACIFIC CORINTHIAN]

PROSPECTUS

PACIFIC CORINTHIAN VARIABLE ANNUITY
INDIVIDUAL FLEXIBLE PREMIUM DEFERRED ANNUITY
AND VARIABLE ACCUMULATION CONTRACT,
ADMINISTERED BY PACIFIC CORINTHIAN VARIABLE SEPARATE ACCOUNT OF
PACIFIC LIFE INSURANCE COMPANY
1-800-735-5535
700 NEWPORT CENTER DRIVE
NEWPORT BEACH, CA 92660
ANNUITY SERVICE OFFICE MAILING ADDRESS:
P.O. BOX 9000, NEWPORT BEACH, CALIFORNIA 92658-9030

This Prospectus describes Pacific Corinthian Variable Annuity--an individual
flexible premium deferred annuity and variable accumulation contract
("Contract") administered by Pacific Life Insurance Company ("Pacific Life" or
the "Company", formerly "Pacific Mutual Life Insurance Company") which is
funded in part by the Pacific Corinthian Variable Separate Account of Pacific
Life ("Separate Account").

The Contract was originally issued by First Capital Life Insurance Company,
and, pursuant to a Plan of Rehabilitation of First Capital Life Insurance
Company--In Conservation, the Contract has been administered by Pacific
Corinthian Life Insurance Company since January 1, 1993, and as of October 30,
1997, is now administered by Pacific Life. This Prospectus has been prepared
for the purpose of facilitating transfers among the variable subaccounts
("Variable Accounts") of the Separate Account or to or from the Fixed Account
of Pacific Life, and the acceptance of new premiums under existing Contracts.

Pacific Life is responsible for payment of the benefits provided in the
Contract, including those benefits funded by Pacific Life's General Account.
Accordingly, Policyholders ("Contract Owners") will look to Pacific Life
instead of Pacific Corinthian to fulfill the terms of their Contracts.

During the Accumulation Period, the Contract provides that Contract Value may
accumulate based upon allocation to the Separate Account or to the Fixed
Account of Pacific Life. Contract Owners bear all of the investment risk for
amounts allocated to the Separate Account, and amounts allocated to the Fixed
Account are subject to guarantees of Pacific Life as described in "The Fixed
Account." The Contract provides for fixed annuity payments.

Amounts allocated to a Variable Account are invested at net asset value,
without a sales charge, in one of eleven portfolios of the Pacific Select Fund
(the "Fund"): the Money Market Portfolio, the Equity Portfolio, the Bond and
Income Portfolio, the Government Securities Portfolio, the Equity Income
Portfolio, the Multi-Strategy Portfolio, the Managed Bond Portfolio, the High
Yield Bond Portfolio, the Equity Index Portfolio, the International Portfolio,
and the Growth LT Portfolio.

This Prospectus sets forth certain information about the Contract and the
Separate Account that Contract Owners should know. A "Statement of Additional
Information" dated , 1997 ("SAI") has been filed with the Securities
and Exchange Commission and can be obtained by calling or writing to Pacific
Life at the telephone number and address indicated above. The SAI is
incorporated by reference into this Prospectus. The Table of Contents for the
SAI appears in this prospectus on page 36.

THIS PROSPECTUS MUST BE ACCOMPANIED BY A CURRENT PROSPECTUS OF THE PACIFIC
SELECT FUND. BOTH PROSPECTUSES SHOULD BE READ CAREFULLY AND RETAINED FOR FUTURE
REFERENCE.

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

Prospectus Dated , 1997
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Glossary of Special Terms.................................................. 3
Introduction--Some Questions and Answers About the Contract................ 5
Annual Separate Account and Fund Expenses.................................. 8
Pacific Life Insurance Company ............................................ 14
The Separate Account....................................................... 14
The Pacific Select Fund.................................................... 15
Charges and Expenses....................................................... 17
The Contract............................................................... 19
The Accumulation Period.................................................. 19
Payment Plans............................................................ 24
Voting Rights............................................................ 27
Federal Income Tax Status.................................................. 28
Other Information.......................................................... 34
Appendix:
The Fixed Account........................................................ 37
</TABLE>

2
<PAGE>

GLOSSARY OF SPECIAL TERMS

ACCUMULATION PERIOD--The period between the Contract Date and the Annuity
Date.

ACCUMULATION UNIT--An accounting unit of measure used to calculate the value
of a Contract Owner's interest in a Variable Account.

ACCUMULATION VALUE--The value of the Contract Owner's interest in a Variable
Account (or in the Fixed Account). The combined Accumulation Values credited to
the Contract equal the Contract Value.

ANNUITANT--The person designated to receive or the person who is actually
receiving annuity payments under an annuity contract. If joint Annuitants are
named in the Contract, "Annuitant" means both Annuitants unless otherwise
specified.

ANNUITY--A series of periodic payments made to an Annuitant for life or for a
certain period, or for life with a minimum number of payments guaranteed.

ANNUITY DATE--The date on which annuity payments are to begin.

BENEFICIARY--The person or persons designated to receive any benefits under
the Contract upon the death of the Annuitant. If no Beneficiary is designated,
then the Contract Owner (if living), or otherwise the estate of the Contract
Owner, shall have the rights of the Beneficiary.

CONTRACT--The individual flexible premium deferred annuity and variable
accumulation contract described in this Prospectus.

CONTRACT DATE--The Valuation Day on which the initial premium was credited to
the Contract.

CONTRACT OWNER--The person or entity with legal rights of ownership of the
Contract. The Annuitant is the Contract Owner, unless the Contract provides
otherwise. If the Contract has been absolutely assigned, the assignee is the
Contract Owner. A collateral assignee is not the Contract Owner.

CONTRACT VALUE--The combined Accumulation Values credited to the Contract.

CONTRACT YEAR--Each twelve-month period beginning with the Contract Date.

CONTRIBUTION YEAR--Each Contract Year in which a premium payment is made and
each succeeding year measured from the end of the Contract Year during which
such payment was made. For example, if a Contract Owner makes an initial
premium payment of $15,000 and then makes a subsequent premium payment of
$10,000 during the fourth (4th) Contract Year, the fifth (5th) Contract Year
will be the fifth (5th) Contribution Year for the purpose of the initial
premium payment and the second (2nd) Contribution Year with respect to the
subsequent $10,000 premium payment.

FIXED ACCOUNT--Pacific Life's General Account, to which Accumulated Value may
be allocated for accumulation subject to Pacific Life guarantees as described
under "The Fixed Account."

FIXED ACCOUNT ACCUMULATION VALUE--The value of the Contract Owner's interest
in the General Account pursuant to the Fixed Account accumulation option. (See
"The Fixed Account.")

GENERAL ACCOUNT--All assets of the Company other than those allocated to the
Separate Account or to any other segregated investment account of the Company.

MILESTONE DATE--In determining the death benefit proceeds after the fifth
contract anniversary, the Milestone Date is the fifth contract anniversary and
each fifth anniversary thereafter.

3
<PAGE>

MINIMUM GUARANTEED DEATH BENEFIT--After the fifth contract anniversary, the
minimum guaranteed death benefit equals the death benefit as of the next
previous Milestone Date, increased by premiums paid since that Milestone Date
and decreased by any withdrawals, net of any contingent deferred sales charge,
received since that Milestone Date. After the fifth anniversary, the death
benefit proceeds will be the Contract Value, or, if larger, the minimum
guaranteed death benefit. (See "Death Benefit".)

NONQUALIFIED PLAN--A retirement plan which does not qualify for special
federal tax treatment under the Internal Revenue Code of 1986, as amended (the
"Code"). Generally, an individual purchaser who does not purchase the Contract
in connection with an IRA, Keogh or similar plan is deemed to purchase in
connection with a Nonqualified Plan.

OWNER BENEFICIARY--With respect to Contracts issued after January 18, 1985,
the person named to receive the death benefit proceeds upon the Contract
Owner's death during the Accumulation Period. If there is no Owner Beneficiary,
the death benefit shall be paid to the joint owner, if any, otherwise to the
Annuitant.

PREMIUM--The amounts paid to the Company as consideration for the Contract.

QUALIFIED PLAN--A retirement plan which qualifies for special federal tax
treatment under Sections 401, 403(a), 403(b), 408 or 457 of the Code.

REHABILITATION PLAN--A plan for the rehabilitation of First Capital Life
Insurance Company ("FCL")--In Conservation proposed by the Company and approved
by the Insurance Commissioner of the State of California and by an order dated
July 1, 1992 of the Superior Court of the State of California for the County of
Los Angeles. The plan was effected in part through an Agreement in Connection
with the Rehabilitation of First Capital Life Insurance Company
("Rehabilitation Agreement"), which is between the Insurance Commissioner of
the State of California, as Conservator of FCL, and the Company. Pursuant to
the Rehabilitation Plan, the Separate Account was transferred intact to Pacific
Life on October 30, 1997, and the Contracts became the obligations of Pacific
Life on that date.

SEPARATE ACCOUNT--A segregated investment account, the assets of which are
maintained separately from the other assets of the Company. The Separate
Account funds the Contracts described in this Prospectus.

VALUATION DAY--Each day that the New York Stock Exchange is open for trading.

VALUATION PERIOD--The period between successive valuations of the
Accumulation Units of the Variable Accounts (generally the period between
business days).

VARIABLE ACCOUNT--One of the subaccounts into which the Separate Account is
divided. The assets of each Variable Account are invested in a specified Fund
Portfolio. There are eleven Variable Accounts currently available to Contract
Owners; the Company may establish additional Variable Accounts at any time.

4
<PAGE>

INTRODUCTION

SOME QUESTIONS AND ANSWERS ABOUT THE CONTRACT

1. HOW DOES THE MERGER BETWEEN PACIFIC CORINTHIAN LIFE INSURANCE COMPANY AND
PACIFIC LIFE INSURANCE COMPANY AFFECT THE RIGHTS OF OWNERS UNDER THE
CONTRACTS?

This Contract was originally issued by First Capital Life Insurance Company.
Pursuant to the Plan of Rehabilitation of First Capital Life Insurance
Company--In Conservation ("Rehabilitation Plan"), the assets and liabilities
under the Contract were assumed by Pacific Corinthian Life Insurance Company, a
wholly owned subsidiary of Pacific Life Insurance Company, which has
administered the Contracts since January 1, 1993. On October 30, 1997 and
pursuant to the Rehabilitation Plan, Pacific Corinthian merged into Pacific
Life, and, as of that date, Pacific Life administers the Contracts.

The Merger has not affected the terms of the Contracts, although Pacific Life
is making available certain additional rights under the Contracts. Contract
Owners are now permitted to transfer Accumulation Value in the Variable
Accounts to the Fixed Account, and from the Fixed Account to any of the
Variable Accounts. Transfers will continue to be permitted among the Variable
Accounts. In addition, Contract Owners may elect annuity options so that
annuity payments may be made over a period of less than seven years.

2. AFTER THE MERGER, WHAT INSURANCE COMPANY IS RESPONSIBLE FOR THE BENEFITS
PROVIDED IN THE CONTRACT?

As a result of the Merger, Pacific Life has assumed the assets and
liabilities, including policy-related liabilities, of Pacific Corinthian.
Effective October 30, 1997, Contract Owners look to Pacific Life for the
benefits provided in the Contract.

Pacific Life is a wholly-owned subsidiary of Pacific LifeCorp, a holding
company which, in turn, is a wholly-owned subsidiary of Pacific Mutual Holding
Company. For more information on Pacific Life, see the discussion in the
section headed "Pacific Life Insurance Company."

3. WHAT IS THE DIFFERENCE BETWEEN A FIXED ANNUITY AND A VARIABLE ANNUITY?

Under a fixed annuity, the contract value and the amount of each annuity
payment are guaranteed by the insurance company issuing the contract. The
investment risk as well as the mortality risk are borne by the insurance
company. The contract owner bears the risk that the insurance company will be
able to pay for the benefits provided for in the contract. Under a variable
annuity, the contract value and the annuity payments are based on investment
performance, so that the contract owner bears the investment risk while the
insurance company bears the mortality risk.

4. WHAT TYPE OF ANNUITY IS THE CONTRACT?

The Contract described by this Prospectus provides for accumulation both on a
variable basis and on a fixed basis during the Accumulation Period, and is a
fixed annuity after the Annuity Date.

With respect to accumulation on a variable basis, the Accumulation Value
varies during the Accumulation Period with the investment performance of the
Variable Account(s) to which the Accumulation Value is allocated. Thus, the
entire investment risk is borne by the Contract Owner. Accumulation Value in
the Fixed Account is subject to the guarantees described under "The Fixed
Account." For these amounts, the investment risk is borne by Pacific Life;
however, the Contract Owner bears the risk of Pacific Life's ability to pay the
amounts so guaranteed.

Following the Annuity Date, the monthly annuity payment under the Contract is
guaranteed in amount by Pacific Life, and the investment risk is borne by the
Company. The Company bears the mortality risk under the Contract. (See "Charge
for Mortality Risk and Expense Risk of the Separate Account.")

5. WHAT IS THE STATUS OF FUNDS ALLOCATED TO THE SEPARATE ACCOUNT?

The assets of the Separate Account are segregated from the assets of the
General Account and other separate accounts of Pacific Life, and are not
chargeable with liabilities arising out of any other business conducted by
Pacific Life.

5
<PAGE>

6. MAY A CONTRACT OWNER MAKE ADDITIONAL PREMIUM PAYMENTS UNDER THE CONTRACT?

Yes. Additional premium payments for allocation to the Separate Account or
the Fixed Account may be made.

7. MAY A NEW CONTRACT BE PURCHASED?

No. Pacific Life does not currently accept applications for the sale of new
Contracts.

8. WHAT EXPENSES ARE CHARGED TO THE CONTRACT?

A Contingent Deferred Sales Charge may be deducted upon partial or complete
withdrawal or upon annuitization of a Contract. In no event will the charge
imposed exceed 5% of the aggregate premium payments. (See "Contingent Deferred
Sales Charge".)

A charge equal to 1.19% per year of each Variable Account's average daily net
assets is accrued daily and paid quarterly in order to reimburse Pacific Life
for undertaking the mortality risk and expense risk in connection with amounts
subject to variable accumulation. (See "Charge for Mortality Risk and Expense
Risk of the Separate Account".)

The Separate Account bears certain of its operating expenses, subject to the
Company's guarantee that such expenses will not exceed .25% of any Variable
Account's average daily net assets annually. Pacific Life further guarantees
that the ordinary operating expenses of a Variable Account together with
certain operating expenses incurred by the Series of the Fund in which the
Variable Account invests will not exceed .60% of average daily net assets
annually (taking into account for any adjustment for Fund expenses in excess of
state expense limitations).

During the Accumulation Period, each Contract is assessed an annual contract
maintenance charge of $30. This charge, which is not guaranteed and may be
changed, is designed to reimburse the Company for the cost of administering the
Contracts. (See "Contract Maintenance Charge".)

Any premium taxes with respect to a Contract will be paid by the Company when
due and deducted from the Contract Value as of the Annuity Date, when the
Contract is annuitized.

Investment advisory fees and operating expenses of the Fund are paid by the
Fund. Fund expenses are not specified under the terms of the Policy, and they
may vary from year to year. (See Separate "Account and Fund Expenses".)

9. MAY THE CONTRACT OWNER WITHDRAW ALL OR A PORTION OF THE CONTRACT VALUE?

All or a portion of the Contract Value allocated to the Separate Account may
be withdrawn during the Accumulation Period, except that the minimum partial
withdrawal is $500, and no partial withdrawal may be made if it would result in
a remaining Contract Value of less than $500. (See "Transfers and
Withdrawals".) No withdrawals are permitted following the commencement of
annuity payments under Optional Payment Plans D, E, or F. (See "Optional
Payment Plans".) Withdrawal of Accumulation Value allocated to the Fixed
Account is subject to limitation as described in "The Fixed Account."

A Contingent Deferred Sales Charge may be imposed on a Contract Owner making
more than one partial withdrawal during a Contract Year, or withdrawing an
amount in excess of 10% of the Contract Value during a Contract Year. (See
"Contingent Deferred Sales Charge".)

A penalty tax may be imposed pursuant to the Code upon withdrawal of amounts
accumulated under the Contract. For federal income tax consequences of partial
or complete withdrawal, see "Federal Income Tax Status".

6
<PAGE>

10. HOW ARE THE AMOUNTS OF THE ANNUITY PAYMENTS DETERMINED?

The proceeds available on the Annuity Date will be the Contract Value less
reductions, if any, for Contingent Deferred Sales Charges or premium taxes. A
Contingent Deferred Sales Charge will be imposed on any amount attributable to
a premium payment in its fifth contribution year or less. (See "Contingent
Deferred Sales Charge".) The Variable Account Accumulation Values will be
transferred to the General Account. Thereafter, the Annuitant will receive
fixed monthly payments based on the amount of the proceeds and the annuity
tables provided under the Contract for the Payment Plan selected. (See
"Optional Payments Plans".)

There can be no assurance that the Contract Value during the Accumulation
Period or the aggregate amount of annuity payments after the Annuity Date will
equal or exceed the aggregate premium payments.

11. WHAT IF THE ANNUITANT DIES DURING THE ACCUMULATION PERIOD?

Upon the death of the Annuitant on or before the fifth contract anniversary
and before the Annuity Date, the Company will pay the Beneficiary or
Beneficiaries a death benefit equal to the greater of (1) the aggregate premium
payments less any reductions in the Contract Value due to withdrawals or (2)
the Contract Value next determined following receipt of due proof of death by
the Company at its home office. After the fifth contract anniversary, there is
a minimum guaranteed death benefit equal to the death benefit as of the next
previous Milestone Date, increased by any premiums paid since that Milestone
Date and decreased by any withdrawals, net of contingent deferred sales charge,
received since that Milestone Date. After the fifth anniversary, the death
benefit proceeds will be the Contract Value, or, if larger, the minimum
guaranteed death benefit. (See "Death Benefit".)

12. WHAT IF THE CONTRACT OWNER DIES DURING THE ACCUMULATION PERIOD?

With respect to Contracts issued after January 18, 1985, if the Contract
Owner dies on or before the fifth contract anniversary date and before the
Annuitant and prior to the Annuity Date, the Company will pay the Owner
Beneficiary or Owner Beneficiaries a minimum death benefit equal to the greater
of (1) the aggregate premium payment less any reductions in the Contract Value
due to withdrawals, or (2) the Contract Value next determined following receipt
of due proof of death by the Company at its home office. After the fifth
contract anniversary, there is a minimum guaranteed death benefit equal to the
death benefit as of the next previous Milestone Date, increased by any premiums
paid since that Milestone Date and decreased by any withdrawals, net of
Contingent Deferred Sales Charge, received since that Milestone Date. After the
fifth anniversary, the death benefit proceeds will be the Contract Value, or,
if larger, the minimum guaranteed death benefit. (See "Death Benefit".) If
there are joint Owners, upon the death of the first joint Owner, the survivor
will become the sole Owner.

13. WHAT ARE THE MORTALITY RISKS ASSUMED UNDER THE CONTRACT BY PACIFIC LIFE
INSURANCE COMPANY?

Under the Contract, the Company guarantees during the Accumulation Period the
death benefit and the minimum guaranteed death benefit as described above. The
Company further guarantees that annuity payments will not be affected by a
change in the mortality experience assumed in establishing its obligation to
provide annuity payments under the Contract.

14. WHAT IS THE NATURE OF THE SECURITY DESCRIBED IN THIS PROSPECTUS?

Because the Accumulation Values allocated to the Variable Accounts during the
Accumulation Period are based upon the changing net asset value of the shares
of the underlying Portfolios of the Fund, the Contract is a security under
Federal law and is registered under the Securities Act of 1933, as amended. The
Separate Account is registered with the Securities and Exchange Commission
("SEC" or the "Commission") under the Investment Company Act of 1940, as
amended, as a unit investment trust.

7
<PAGE>

15. HOW CAN CONTRACT INQUIRIES BE MADE?

Contract Owners may make any inquiries regarding the Contract by contacting
the Annuity Service Office of Pacific Life at the address and phone number
listed above.

16. WHAT WAS THE REHABILITATION PLAN?

The Rehabilitation Plan was a plan proposed by the Company for the
rehabilitation of First Capital Life Insurance Company--In Conservation, which
had been placed in conservation on May 14, 1991 by order of the Superior Court
of the State of California for the County of Los Angeles (the "Conservation
Court"). The Insurance Commissioner of the State of California, who was
appointed the Conservator of FCL by the Conservation Court, recommended the
Rehabilitation Plan to the Conservation Court, and the Court approved the Plan
by order dated July 1, 1992. The rehabilitation was effected in part through
an Agreement in Connection with the Rehabilitation of First Capital Life
Insurance Company ("Rehabilitation Agreement"), which was between the
Insurance Commissioner of the State of California, as Conservator of FCL, and
the Company. In addition, the Plan called for Pacific Corinthian, to assume
the life insurance policies and annuity contracts that had been issued by FCL,
as well as certain of FCL's assets and liabilities. This assumption was
completed on December 31, 1992. The Plan provides that Pacific Corinthian be
merged into Pacific Life on or about October 30, 1997 (the "Merger"), and the
Merger was completed on October 30, 1997. In connection with the Merger, the
assets and liabilities of Pacific Corinthian, including the Pacific Corinthian
Separate Account, the assets therein and the liabilities connected therewith,
became the assets and liabilities of Pacific Life. The Pacific Corinthian
Separate Account was transferred intact to Pacific Life as part of the Merger,
and continues operations as the Separate Account that funds the variable
interests under the contracts. The Contracts are now obligations of Pacific
Life.

ANNUAL SEPARATE ACCOUNT AND FUND EXPENSES

The purpose of the information presented below to assist investors in
understanding the various costs and expenses borne directly and indirectly by
Owners of the Contracts with Accumulated Value allocated to the Variable
Accounts. The table reflects contractual charges, expenses of the Separate
Account, and charges and expenses of the Fund. Expenses shown under "Contract
Owner Transaction Expenses" and "The Mortality Expense Risk Fees" are
specified under the terms of the Contract and are fixed. Expenses shown under
"Account Fees and Expenses" may vary, and expenses shown under "Fund Annual
Expenses After Expense Limitation" are estimated expenses of the Fund; Fund
expenses are not specified under the terms of the Contract and may vary from
year to year. The table does not reflect premium taxes that may be imposed by
various jurisdictions. See "Premium Taxes". The information contained in the
table is not generally applicable to amounts allocated to the Fixed Account
(although certain contractual charges also apply to this Account).

For a further description of a Contract's costs and expenses, see "Charges
and Expenses". For a more complete description of the Fund's costs and
expenses, see the Fund Prospectus, which accompanies this Prospectus.

8
<PAGE>

CONTRACT OWNER TRANSACTION EXPENSES

Contingent Deferred Sales Charge

A Contingent Deferred Sales Charge is imposed upon amounts attributable to
premium payments withdrawn in excess of 10% of the Contract Value during any
contract year. The charge decreases 1% each year and in no event will the
charge exceed 5% of the aggregate premium payments.

<TABLE>
<CAPTION>
CONTRIBUTION
YEAR OF PREMIUMS CHARGES
---------------- -------
<S> <C>
1 5%
2 4%
3 3%
4 2%
5 1%
6 and thereafter. 0%
</TABLE>

Annual contract maintenance charge--$30

SEPARATE ACCOUNT ANNUAL EXPENSES
(as a percentage of average account value)

<TABLE>
<CAPTION>
MORTALITY ACCOUNT TOTAL SEPARATE
EXPENSE RISK FEES AND ACCOUNT ANNUAL
FEES EXPENSES(1) EXPENSES
------------ ----------- --------------
<S> <C> <C> <C>
Variable Account I--Money Market Port-
folio.................. 1.19% 0.01% 1.20%
Variable Account II--Equity Portfolio.. 1.19% 0.01% 1.20%
Variable Account III--Bond and Income
Portfolio.............. 1.19% 0.01% 1.20%
Variable Account IV--Government Securi-
ties Portfolio......... 1.19% 0.01% 1.20%
Variable Account VII--Equity Income
Portfolio.............. 1.19% 0.01% 1.20%
Variable Account IX--Multi-Strategy
Portfolio.............. 1.19% 0.01% 1.20%
Variable Account X--Managed Bond Port-
folio.................. 1.19% 0.01% 1.20%
Variable Account XI--High Yield Bond
Portfolio.............. 1.19% 0.01% 1.20%
Variable Account XII--Equity Index
Portfolio.............. 1.19% 0.01% 1.20%
Variable Account XIII--International
Portfolio.............. 1.19% 0.01% 1.20%
Variable Account XIV--Growth LT Portfo-
lio.................... 1.19% 0.01% 1.20%
</TABLE>

FUND ANNUAL EXPENSES
(as a percentage of average net assets)

<TABLE>
<CAPTION>
ADVISORY AND TOTAL FUND
MANAGEMENT OTHER OPERATING
FEES EXPENSES EXPENSES(2)
------------ ----------- --------------
<S> <C> <C> <C>
Money Market Portfolio................. .40% .08% .48%
Equity Portfolio....................... .65% .08% .73%
Bond and Income Portfolio.............. .60% .09% .69%
Government Securities Portfolio........ .60% .10% .70%
Equity Income Portfolio................ .65% .08% .73%
Multi Strategy Portfolio............... .65% .11% .76%
Managed Bond Portfolio................. .60% .09% .69%
High Yield Bond Portfolio.............. .60% .10% .70%
Equity Index Portfolio................. .21% .08% .29%
International Portfolio................ .85% .21% 1.06%
Growth LT Portfolio.................... .75% .10% .85%
</TABLE>

9
<PAGE>

EXAMPLE
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses per
$1,000 of initial premium assuming an initial
premium of $25,000, assuming (1) 5% annual
return and (2) redemption at the end of each
time period:
Variable Account I
- --Money Market................................ $65 $ 86 $107 $209
Variable Account II
- --Equity...................................... $67 $ 93 $120 $236
Variable Account III
- --Bond and Income............................. $67 $ 92 $118 $232
Variable Account IV
- --Government Securities....................... $67 $ 93 $118 $233
Variable Account VII
- --Equity Income............................... $67 $ 93 $120 $236
Variable Account IX
- --Multi Strategy.............................. $67 $ 94 $121 $239
Variable Account X
- --Managed Bond................................ $67 $ 92 $118 $232
Variable Account XI
- --High Yield Bond............................. $67 $ 93 $118 $233
Variable Account XII
- --Equity Index................................ $63 $ 80 $ 97 $189
Variable Account XIII
- --International............................... $70 $103 $137 $270
Variable Account XIV
- --Growth LT................................... $68 $ 97 $126 $248
You would pay the following expenses per
$1,000 of initial premium assuming an initial
premium of $25,000, assuming (1) 5% annual
return and (2) annuitization at the end of
each time period:
Variable Account I
- --Money Market................................ $65 $ 86 $107 $209
Variable Account II
- --Equity...................................... $67 $ 93 $120 $236
Variable Account III
- --Bond and Income............................. $67 $ 92 $118 $232
Variable Account IV
- --Government Securities....................... $67 $ 93 $118 $233
Variable Account VII
- --Equity Income............................... $67 $ 93 $120 $236
Variable Account IX
- --Multi Strategy.............................. $67 $ 94 $121 $239
Variable Account X
- --Managed Bond................................ $67 $ 92 $118 $232
Variable Account XI
- --High Yield Bond............................. $67 $ 93 $118 $233
Variable Account XII
- --Equity Index................................ $63 $ 80 $ 97 $189
Variable Account XIII
- --International............................... $70 $103 $137 $270
Variable Account XIV
- --Growth LT................................... $68 $ 97 $126 $248
</TABLE>

10
<PAGE>

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses per
$1,000 of initial premium assuming an initial
premium of $25,000, assuming (1) 5% annual
return and (2) no redemption of the Contract:
Variable Account I
- --Money Market................................ $18 $56 $ 97 $209
Variable Account II
- --Equity...................................... $21 $64 $110 $236
Variable Account III
- --Bond and Income............................. $20 $63 $108 $232
Variable Account IV
- --Government Securities....................... $20 $63 $108 $233
Variable Account VII
- --Equity Income............................... $21 $64 $110 $236
Variable Account IX
- --Multi-Strategy.............................. $21 $65 $111 $239
Variable Account X
- --Managed Bond................................ $20 $63 $108 $232
Variable Account XI
- --High Yield Bond............................. $20 $63 $108 $233
Variable Account XII
- --Equity Index................................ $16 $51 $ 87 $189
Variable Account XIII
- --International............................... $24 $74 $127 $270
Variable Account XIV
- --Growth LT................................... $22 $68 $116 $248
</TABLE>
- --------
(1) Based on the year ended December 31, 1996. See "Other Expenses" and
"Charges and Expenses".
(2) The expenses listed for the Fund Portfolios reflect current expenses for
the year ending December 31, 1996 adjusted to reflect a decrease in fees
for certain service providers for certain fund operating expenses. Actual
total expenses before the adjustment for the year ended December 31, 1996,
were: Money Market Portfolio--0.50%; Equity Portfolio--0.74%; Bond and
Income Portfolio--0.71%; Government Securities Portfolio--0.72%; Equity
Income Portfolio--0.75%; Multi-Strategy Portfolio--0.78%; Managed Bond
Portfolio--0.71%; High Yield Bond Portfolio--0.71%; Equity Index
Portfolio--0.31%; International Portfolio--1.07% and Growth LT Portfolio--
0.87%.

The purpose of this table is to assist the Contract Owner in understanding
the various costs and expenses that a Contract Owner will bear directly and
indirectly. The expenses of the Separate Account and the Fund, the underlying
investment vehicle, are included in the table. For additional information on
Separate Account expenses, including premium taxes payable on the Annuity Date,
see the section, "Charges and Expenses" of this Prospectus. A copy of the
prospectus for the Fund accompanies or precedes this Prospectus and contains
additional information on the Fund and its expenses.

On the Annuity Date, the proceeds attributable to the Variable Accounts are
transferred to the General Account of the Company. Thereafter, the Annuitant
will receive payments based upon the Contract proceeds, the Payment Plan
selected and the annuity tables in the contract. The Variable Account expenses
described in this table would not apply to annuity payments.

The example should not be considered a representation of past or future
expenses. Actual expenses may be greater or lesser than those shown. The
example assumes a $1,000 investment and a 5% annual rate of return. In
addition, the example reflects an average initial premium of approximately
$25,000 and a prorata portion of the annual maintenance charges. The assumed 5%
return is hypothetical and should not be considered a representation of past or
future actual returns, which may be greater or lesser than the assumed amount.

11
<PAGE>

FINANCIAL HIGHLIGHTS

The following tables present financial highlights with respect to each
Variable Account of the Pacific Corinthian Variable Separate Account. The
information in the tables for the years or periods ended December 31, 1987
through 1996 is included in the Pacific Corinthian Variable Separate Account's
financial statements The information for the years or periods ended December
31, 1994 through 1996 were audited by Deloitte and Touche LLP, independent
auditors. The information for the years or periods ended December 31, 1987
through 1993 were audited by different independent auditors. The tables should
be read in conjunction with the Pacific Corinthian Variable Separate Account's
financial statements, which are in the Pacific Corinthian Variable Separate
Account's Annual Report dated as of December 31, 1996.

SELECTED ACCUMULATION UNIT* INFORMATION+

Selected accumulation unit information as of the year ended December 31st for
each period:

- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
1987
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
ACCUMULATION
UNIT VALUE AT
BEGINNING OF
PERIOD:
Variable Account
I--Money
Market......... $1.210(a)
Variable Account
II--Equity..... $1.711(a)
Variable Account
III--Bond and
Income......... $1.769(a)
Variable Account
IV--Government
Securities..... $1.000(b)
Variable Account
VII--Equity
Income.........
Variable Account
IX--Multi-
Strategy++.....
Variable Account
X--Managed
Bond...........
Variable Account
XI--High Yield
Bond...........
Variable Account
XII--Equity
Index..........
Variable Account
XIII--
International..
Variable Account
XIV--Growth LT.
- ------------------------------------------------------------------------------------------------------------------------------
ACCUMULATION
UNIT VALUE AT
END OF PERIOD:
Variable Account
I--Money
Market......... $1.270
Variable Account
II--Equity..... $1.727
Variable Account
III--Bond and
Income......... $1.723
Variable Account
IV--Government
Securities..... $0.999
Variable Account
VII--Equity
Income.........
Variable Account
IX--Multi-
Strategy++.....
Variable Account
X--Managed
Bond...........
Variable Account
XI--High Yield
Bond...........
Variable Account
XII--Equity
Index..........
Variable Account
XIII--
International..
Variable Account
XIV--Growth LT.

- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(Balance of table and footnotes on next page.)

12
<PAGE>

(Continued from previous page.)

<TABLE>
<CAPTION>
1996 1995 1994 1993 1992 1991 1990 1989 1988
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NUMBER OF
ACCUMULATION
UNITS
OUTSTANDING AT
END OF PERIOD:
Variable Account
I--Money
Market......... 3,299,125 3,371,947 4,854,157 5,509,003 6,843,695 10,299,671 31,308,091 33,886,239 37,173,015
Variable Account
II--Equity..... 17,691,032 19,004,171 21,655,973 24,107,346 26,687,310 36,873,827 78,671,563 101,955,442 128,437,748
Variable Account
III--Bond and
Income......... 8,418,032 9,619,803 11,329,001 13,036,249 15,302,617 22,642,515 50,717,710 71,309,683 89,321,253
Variable Account
IV--Government
Securities..... 756,267 1,101,310 1,466,345 1,657,615 1,758,324 2,719,819 4,972,484 2,918,530 1,680,292
Variable Account
VII--Equity
Income......... 10,099,851 11,737,786 16,013,336 5,084,404 5,092,161 6,155,320 10,131,006 4,659,556
Variable Account
IX--Multi-
Strategy++..... 9,682,862 11,026,979 14,528,472 17,701,484 20,903,707 27,842,901 39,928,927 16,900,702
Variable Account
X--Managed
Bond........... 39,109 106,463
Variable Account
XI--High Yield
Bond........... 67,250 67,350
Variable Account
XII--Equity
Index.......... 255,873 224,355
Variable Account
XIII--
International.. 509,025 316,969
Variable Account
XIV--Growth LT. 936,498 619,020
- ------------------------------------------------------------------------------------------------------------------------
<CAPTION>
1987
- ------------------------------------------------------------------------------------------------------------------------
<S> <C>
NUMBER OF
ACCUMULATION
UNITS
OUTSTANDING AT
END OF PERIOD:
Variable Account
I--Money
Market......... 48,228,153
Variable Account
II--Equity..... 182,282,075
Variable Account
III--Bond and
Income......... 114,959,885
Variable Account
IV--Government
Securities..... 222,746
Variable Account
VII--Equity
Income.........
Variable Account
IX--Multi-
Strategy++.....
Variable Account
X--Managed
Bond...........
Variable Account
XI--High Yield
Bond...........
Variable Account
XII--Equity
Index..........
Variable Account
XIII--
International..
Variable Account
XIV--Growth LT.
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
* An Accumulation Unit is the unit of measure used to calculate the value of a
Contract Owner's interests in a Variable Account during the Accumulation
Period.
+ On December 31, 1992, the Pacific Corinthian Variable Separate Account
assumed the assets and liabilities of the Shearson VIP Separate Account in
accordance with the Rehabilitation Plan and accordingly, the information
presented up to December 31, 1992 is for the Shearson VIP Separate Account,
the Separate Account's predecessor for accounting purposes. On October 30,
1997, Pacific Corinthian Life Insurance Company was merged into Pacific
Life. In connection with the Merger, the Pacific Corinthian Variable
Separate Account was transferred intact to Pacific Life.
++ On December 31, 1994, the Variable Account name was changed to the Multi-
Strategy Variable Account when the underlying investment changed from the
Balanced Variable Account of the Shearson VIP Fund to the Multi-Strategy
Portfolio of the Pacific Select Fund.
Dates Variable Accounts began operations:(a) 08/31/83, (b)10/05/87, (c)
10/17/89, (d) 01/19/95, (e) 01/20/95 and (f) 02/03/95.

13
<PAGE>

PACIFIC LIFE INSURANCE COMPANY

Pacific Life is a life insurance company that is domiciled in California.
Pacific Life's operations include both life insurance and annuity products as
well as financial and retirement services. As of the end of 1996, Pacific Life
had over $50.8 billion of individual life insurance in force and total
admitted assets of approximately $21.2 billion. Pacific Life has been ranked
according to admitted assets as the 22nd largest life insurance carrier in the
nation for 1996. Together with its subsidiaries and affiliated enterprises,
Pacific Life has total assets and funds under management of over $136 billion.
Pacific Life is authorized to conduct life insurance and annuity business in
the District of Columbia and all states except New York. Pacific Life's
principal offices are located at 700 Newport Center Drive, Newport Beach,
California 92660.

Pacific Life was originally organized on January 2, 1868, under the name
"Pacific Mutual Life Insurance Company of California" and reincorporated as
"Pacific Mutual Life Insurance Company" on July 22, 1936. On September 1,
1997, Pacific Life converted from a mutual life insurance company to a stock
life insurance company ultimately controlled by a mutual holding company and
was authorized by California regulatory authorities to change our name to
Pacific Life Insurance Company. As part of the process, we have applied for
authorization to do business as Pacific Life Insurance Company in all states
in which we do business. It may be necessary for us to use forms bearing the
name Pacific Mutual Life Insurance Company at some times and places and forms
bearing the name Pacific Life Insurance Company at other times and places
during the transition period. Any request received in proper order or any
transaction made on a form bearing either of these names will be honored.

Pacific Life is a subsidiary of Pacific LifeCorp, a holding company which,
in turn, is a subsidiary of Pacific Mutual Holding Company, a mutual holding
company. Under their respective charters, Pacific Mutual Holding Company must
always hold at least 51% of the outstanding voting stock of Pacific LifeCorp,
and Pacific LifeCorp must always own 100% of the voting stock of Pacific Life.
Owners of the Contracts and Pacific Life's annuity contracts and life
insurance policies have certain membership interests in Pacific Mutual Holding
Company, consisting principally of the right to vote on the election of the
Board of Directors of the mutual holding company and on other matters, and
certain rights upon liquidation or dissolution of the mutual holding company.

The principal underwriter for the Contracts is Pacific Mutual Distributors,
Inc. ("PMD"). PMD is registered as a broker-dealer with the SEC and is a
wholly-owned subsidiary of Pacific Mutual Life. PMD is located at 700 Newport
Center Drive, Newport Beach, California, 92660.

THE SEPARATE ACCOUNT

The Separate Account is registered with the U.S. Securities and Exchange
Commission as a unit investment trust. Such registration does not involve any
supervision by the Commission of the administration or investment practices or
policies of the Separate Account or of any of the Variable Accounts.

The Pacific Corinthian Variable Separate Account was previously established
by a resolution of the Board of Directors of Pacific Corinthian Life Insurance
Company ("Pacific Corinthian") adopted on July 22, 1992, as the successor to
the Shearson VIP Separate Account of First Capital Life Insurance Company--In
Conservation ("Shearson VIP Separate Account") established July 29, 1981. On
December 31, 1992 the assets and liabilities of the Shearson VIP Separate
Account were assumed by the Pacific Corinthian Variable Separate Account
pursuant to an Amended and Restated Assumption Reinsurance Agreement in
accordance with the Rehabilitation Plan of First Capital Life Insurance
Company--In Conservation. Pursuant to the Rehabilitation Plan, on October 30,
1997 Pacific Corinthian was merged into Pacific Life (the "Merger"). In
connection with the Merger, the assets and liabilities of Pacific Corinthian,
including the Pacific Corinthian Variable Separate Account, became the assets
and liabilities of Pacific Life. Under the Merger, the Pacific Corinthian
Variable Separate Account was transferred intact to Pacific Life and continues
to operate as the Separate Account.

14
<PAGE>

The Separate Account is divided into subaccounts referred to as Variable
Accounts. Each Variable Account invests in shares of a designated Portfolio of
the underlying Fund: the Money Market Portfolio (Variable Account I), the
Equity Portfolio (Variable Account II), the Bond and Income Portfolio (Variable
Account III), the Government Securities Portfolio (Variable Account IV), the
Equity Income Portfolio (Variable Account VII), the Multi-Strategy Portfolio
(Variable Account IX), the Managed Bond Portfolio (Variable Account X), the
High Yield Bond Portfolio (Variable Account XI), the Equity Index Portfolio
(Variable Account XII), the International Portfolio (Variable Account XIII),
and the Growth LT Portfolio (Variable Account XIV). The Board of Directors of
the Company may establish additional Variable Accounts within the Separate
Account at any time. Each Variable Account is administered and accounted for as
part of the general business of the Company, but the income and gains or losses
of each Variable Account, whether realized or not, are credited to or charged
against the assets held in that Variable Account, without regard to the income
or capital gains or losses of any other Variable Account or of Pacific Life.
The assets of the Separate Account are not chargeable with liabilities arising
out of any other business conducted by Pacific Life. However, all obligations
arising under the Contract, including the promise to make annuity payments, are
general corporate obligations of the Company, and all of the Company's assets
are available to meet its expenses and obligations under the Contract.

THE PACIFIC SELECT FUND

PACIFIC SELECT FUND

The Fund is an open-end, diversified management investment company of the
series type organized as a Massachusetts business trust on May 4, 1987. The
Fund currently offers eleven separate portfolios for purchase by the Separate
Account, each with its own investment objective or objectives and investment
policies.

Shares of each Portfolio currently are offered only to separate accounts of
Pacific Life to serve as the underlying investment medium for variable annuity
and variable life insurance contracts. However, shares of each Portfolio may be
offered in the future to other separate accounts established by Pacific Life or
sold to separate accounts of other affiliated or unaffiliated insurance
companies.

15
<PAGE>

THE INVESTMENT ADVISER AND PORTFOLIO MANAGERS

Pacific Life Insurance Company, located at 700 Newport Center Drive, Newport
Beach, California 92660, serves as Investment Adviser to each of the Portfolios
of the Fund. Pacific Life is registered with the Commission as an investment
adviser. Pacific Life manages the Money Market and High Yield Bond Portfolios,
for which Pacific Life formulates and implements continuing programs for the
purchase and sale of securities in compliance with the investment objective,
policies, and restrictions of each of these Portfolios, and is responsible for
the day-to-day decisions to buy and sell securities for these Portfolios. For
the other Portfolios, the Investment Adviser and the Fund have engaged other
firms to serve as Portfolio Managers under the supervision of Pacific Life.

The following chart summarizes some basic data about each Portfolio of the
Fund. There can be no assurance that any Portfolio will achieve its objective.
More detailed information is contained in the accompanying prospectus of the
Fund, including information on the risks associated with the investments and
investment techniques of each of the Portfolios.

THE FUND'S PROSPECTUS ACCOMPANIES THIS PROSPECTUS AND SHOULD BE READ CAREFULLY
BEFORE INVESTING.

<TABLE>
<CAPTION>
PRIMARY INVESTMENTS
PORTFOLIO OBJECTIVE (UNDER NORMAL CIRCUMSTANCES) PORTFOLIO MANAGER

<C> <C> <S> <C>
Money Market Current income consistent Highest quality money Pacific Life
with preservation of capital market instruments.
- --------------------------------------------------------------------------------------------------------
High Yield Bond High level of current income Intermediate and long- Pacific Life
term, high-yielding,
lower and medium quality
(high risk) fixed-income
securities.
- --------------------------------------------------------------------------------------------------------
Managed Bond Maximize total return Investment grade Pacific Investment
consistent with prudent marketable debt Management Company
investment management securities. Will
normally maintain an
average portfolio
duration of 3-7 years.
- --------------------------------------------------------------------------------------------------------
Government Maximize total return U.S. Government Pacific Investment
Securities consistent with prudent securities including Management Company
investment management futures and options
thereon and high-grade
corporate debt
securities. Will
normally maintain an
average portfolio
duration of 3-7 years.
- --------------------------------------------------------------------------------------------------------
Growth LT Long-term growth of capital Common stock. Janus Capital Corporation
consistent with the
preservation of capital
- --------------------------------------------------------------------------------------------------------
Equity Income Long-term growth of capital Dividend paying common J.P. Morgan Investment
and income stock. Management Inc.
- --------------------------------------------------------------------------------------------------------
Multi-Strategy High total return Equity and fixed income J.P. Morgan Investment
securities. Management Inc.
- --------------------------------------------------------------------------------------------------------
Equity Capital appreciation Common stocks and Greenwich Street Advisors
securities convertible
into or exchangeable for
common stocks.
- --------------------------------------------------------------------------------------------------------
Bond and High level of current Investment grade debt Greenwich Street Advisors
Income income consistent with securities.
prudent investment
management and
preservation of capital
- --------------------------------------------------------------------------------------------------------
Equity Index Provide investment results Stocks included in the Bankers Trust Company
that correspond to the total S&P 500.
return performance of
common stocks publicly traded
in the U.S.
- --------------------------------------------------------------------------------------------------------
International Long-term capital Equity securities of Morgan Stanley Asset
appreciation corporations domiciled Management Inc.
outside the United
States.
</TABLE>

16
<PAGE>

CHARGES AND EXPENSES

CONTINGENT DEFERRED SALES CHARGE: Except as set forth below, a Contingent
Deferred Sales Charge ("Charge") is imposed on the dollar amount of any partial
or complete withdrawal of amounts attributable to premium payments under the
Contract during the Accumulation Period and on annuitization. Where there is a
partial withdrawal, the Charge is deducted from the remaining balance in the
Account. Where there are insufficient funds in the Account to cover the Charge,
the Charge is deducted from the amount withdrawn. One partial withdrawal per
Contract Year will be exempt from any Charge being imposed, provided the amount
of such withdrawal does not exceed 10% of the Contract Value at the time of
such withdrawal. The amount of any withdrawal in excess of 10% of the Contract
Value, and the entire amount of the second or subsequent withdrawal in the same
Contract Year, may be subject to the Charge. After consideration for any
withdrawal amount exempt from the Charge, in no event will the Charge imposed
exceed 5% of the aggregate premium payments.

When imposed, the Charge is based on the Contribution Year of each premium
payment at the following rates:

<TABLE>
<CAPTION>
WITHDRAWAL
CONTRIBUTION YEAR OF PREMIUM CHARGE
---------------------------- ----------
<S> <C>
1.............................................................. 5%
2.............................................................. 4%
3.............................................................. 3%
4.............................................................. 2%
5.............................................................. 1%
6 and thereafter............................................... 0%
</TABLE>

No Charge is applied in the sixth Contribution Year and thereafter.

For purposes of determining the amount of any Charge, withdrawals will be
attributed to premium payments on a first-in, first-out basis, even if the
Contract Owner elects to redeem amounts allocated to an Account (including the
Fixed Account) other than the Account to which such premium payment was
allocated. Any charge will be apportioned among the Variable Accounts or the
Fixed Account in the same proportion as the withdrawal is allocated.

The following example illustrates the operation of the Charge: A Contract
Owner makes premium payments of $5,000 in the first Contract Year, $2,000 in
the second Contract Year and $4,000 in the third Contract Year. Based on the
investment performance of the Variable Accounts to which the Contract Value is
allocated, the Contract Value has grown to $14,500 by the middle of the fourth
Contract Year. In that event, the Contract Owner may make one withdrawal of an
amount up to $1,450 (10% of the current Contract Value of $14,500) during the
fourth year without imposition of the Charge.

EXAMPLE 1: If the Contract Owner should make a partial withdrawal in the
amount of $6,000 at that time, the Charge would be imposed as follows:

<TABLE>
<CAPTION>
BASIS OF RATE OF
CHARGE CHARGE EXPLANATION
-------- ------- -----------
<C> <C> <S>
$1,450 None (10% of current Contract Value)
$4,550 2% (excess applied against $5,000 premium
in Contract Year 1 at Contribution Year
4 rate)
</TABLE>

17
<PAGE>

EXAMPLE 2: If the Contract Owner should make a partial withdrawal in the
amount of $13,000 at that time, the Charge would be imposed as follows:

<TABLE>
<CAPTION>
BASIS OF RATE OF
CHARGE CHARGE EXPLANATION
-------- ------- -----------
<C> <C> <S>
$1,450 None (10% of current Contract Value)
$5,000 2% (excess applied against $5,000 premium
in Contract Year 1 at Contribution Year
4 rate)
$2,000 3% (excess applied against $2,000 premium
in Contract Year 2 at Contribution Year
3 rate)
$4,000 4% (excess applied against $4,000 premium
in Contract Year 3 at Contribution Year
2 rate)
$ 550 None (no Charge is imposed on an amount in
excess of aggregate premium received)
</TABLE>

The Charge also applies to any annuitization where the Contract Value
includes an amount attributable to a premium payment for which the sixth
Contribution Year has not yet been reached. The amount of the Charge will be
determined in the same manner as for a withdrawal. In no event will the Charge
be imposed on an annuitization if a Payment Plan offered under the Contract and
Prospectus is elected or if the proceeds are applied to purchase a Single
Premium Immediate Annuity then offered by the Company or an affiliate thereof
and the annuity payment period is five years or longer.

The proceeds of the Charge are intended for use by the Company to cover
certain expenses relating to the distribution of the Contracts, including any
commissions to sales personnel and other promotional expenses. Pacific Life may
realize a profit from this charge to the extent it is not needed to cover
distribution expenses.

CONTRACT MAINTENANCE CHARGE: The Company has primary responsibility for
administration of the Contract and the Separate Account. During the
Accumulation Period, the Company assesses a Contract Maintenance Charge from
each Contract on the Contract Date and on December 31 of each calendar year,
whether or not any premium payment has been made during the year. For the
calendar year in which a Contract initially is purchased, the Contract
Maintenance Charge will be prorated so that the Contract will be assessed only
for the number of days remaining in the calendar year after the Contract Date.
If a Contract is surrendered on a date other than December 31, there will be no
refund of any portion of the Contract Maintenance Charge.

This charge is designed to reimburse the Company for administrative expenses
related to the maintenance of each Contract, rather than the expense of
administration of the Separate Account.

At the present time, the Contract Maintenance Charge is $30 per calendar year
and is apportioned equally among the Accounts to which the Contract Value is
allocated. With respect to the Variable Accounts, the Charge is assessed by
cancelling Accumulation Units.

The Contract Maintenance Charge imposed during the Accumulation Period is not
guaranteed and may be changed in future years. However, with respect to
Contracts issued in Pennsylvania, the Company has undertaken that any Contract
Maintenance Charge imposed may not exceed $50.

The Company does not anticipate that it will make any profit on the Contract
Maintenance Charge.

CHARGE FOR MORTALITY RISK AND EXPENSE RISK OF THE SEPARATE ACCOUNT: A charge
equal to 1.19% per year of each Variable Account's net assets is accrued daily
and paid monthly in order to reimburse the Company for undertaking the
mortality risk under the Contract and for bearing certain expense risks of the
Separate Account. Of the total annual charge, approximately 1.00% is
attributable to the mortality risk and .19% is attributable to the expense
risk.

18
<PAGE>

The mortality risk borne by the Company under the Contract results from (1)
its guarantee that during the Accumulation Period on or before the fifth
contract anniversary the death benefit will be at least equal to the aggregate
premium payments received by the Company, less any reductions in the Contract
Value caused by withdrawals, and after the fifth contract anniversary the death
benefit proceeds will be the Contract Value, or, if larger, the minimum
guaranteed death benefit, and (2) its guarantee that annuity payments will not
be affected by a change in the death rate assumed in establishing its
obligation to provide annuity payments under the Contract.

The expense risk borne by the Company results from its guarantee that
ordinary expenses borne directly by the Separate Account will not exceed 0.25%
of average daily net assets on an annual basis. The Company further guarantees
that the ordinary operating expenses of a Variable Account together with the
operating expenses incurred by its underlying Fund Portfolio, exclusive of
advisory and management fees, interest, taxes, brokerage commissions,
transaction costs or extraordinary expenses, will not exceed 0.6% of average
daily net assets annually after consideration for any adjustment by the Fund's
Investment Adviser and Manager for Fund expenses in excess of state expense
limitations, except that additional custodial costs associated with holding
foreign securities and foreign taxes on dividends, interests and gains will
also be excluded with respect to the underlying International Portfolio of the
Fund.

Pacific Life may ultimately realize a profit from this charge to the extent
it is not needed to cover mortality and administrative expenses, but Pacific
Life may realize a loss to the extent the charge is not sufficient.

OTHER EXPENSES: The Separate Account bears its own expenses, including fees
and expenses for accounting and legal costs, data processing costs,
registration fees, and expenses of preparation and distribution to Contract
Owners of reports and prospectuses. Such expenses will be allocated among the
Variable Accounts based on their relative net assets, unless they do not relate
to all the Variable Accounts.

The deductions and expenses of the underlying Fund are paid out of the assets
of the Fund and are described in the Fund's prospectus and in the section,
"Annual Separate Account and Fund Expenses" in this Prospectus.

PREMIUM TAXES: Any premium taxes imposed by states or municipalities will be
paid by the Company when due. The dollar amount of any premium tax will be
deducted from the Contract Value at the Annuity Date if the Contract is
annuitized. Premium taxes currently imposed range from 0.5% to 3.5%.

THE CONTRACT

The Contract is a flexible premium deferred annuity and variable accumulation
contract. The Contract was previously made available in connection with either
a retirement plan qualified under Sections 401, 403(a), 403(b), 408 or 457 of
the Internal Revenue Code ("Qualified Plan") or an individual purchaser
("Nonqualified Plan").

A. THE ACCUMULATION PERIOD

VALUATION

VALUATION OF AN ACCUMULATION UNIT: The value of an Accumulation Unit will
vary depending upon the investment experience of shares of the corresponding
Fund Portfolio. The Accumulation Unit value also is affected by expenses of the
Variable Account. The value of an Accumulation Unit for a Variable Account on
any Valuation Day is the value of the Unit determined on the Valuation Day
immediately preceding that Valuation Day multiplied by the net investment
factor for the Valuation Period.

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For each Valuation Period, a gross investment rate is determined for each
Variable Account. This rate is equal to (a) the change in the value of the
underlying Fund Series' shares and, if applicable, the value of any shares
resulting from reinvestment of a dividend on a Fund Series' shares, divided by
(b) the value of the underlying Fund Series' shares at the beginning of the
Valuation Period. The gross investment rate for any Valuation Period may be
positive or negative.

A net investment rate for each Variable Account for the Valuation Period is
then determined by deducting from the gross investment rate the daily accrual
for the charge for mortality and expense risks payable to the Company and
direct expenses of the Separate Account.

The net investment factor for each Variable Account for the Valuation Period
is then determined by adding 1.0 to the net investment rate for the Valuation
Period. The net investment factor for the Valuation Period may be greater or
less than 1.0, with the result that the value of an Accumulation Unit of that
Variable Account may increase or decrease during the Valuation Period.

NET ASSET VALUE: The net assets of the Variable Accounts are valued at or
about 4:00 P.M., New York City time, on each Valuation Day.

ALLOCATION OF PREMIUMS, TRANSFERS AND WITHDRAWALS

ALLOCATION OF PREMIUMS: Additional premium payments under the Contracts may
be allocated among the Variable Accounts or the Fixed Account. The minimum
additional premium payment is $500 for a Nonqualified Plan and $50 for a
Qualified Plan. The premium payments are priced with regard to the applicable
Variable Account at the Accumulation Unit Value next determined following
receipt of the premium payment. A premium payment will be allocated in
accordance with the most recent allocation instructions received from the
Contract Owner. Contract Owners may change their premium payment allocation by
telephone if a properly completed and signed Telephone Authorization Form is on
file at the Company's Annuity Service Office. The Company reserves the right to
require that a Contract Owner's allocation to any particular Variable Account
or the Fixed Account meet a certain minimum amount.

TRANSFERS: Prior to the Annuity Date, the Contract Owner may transfer all or
a part of the Accumulation Value among the Variable Accounts and the Fixed
Account. Transfers may be made by wire if authorized by the Contract Owner on
the application or if a Telephone Authorization Form has been properly
completed, signed and is on file at the Company's Annuity Service Office. The
minimum partial transfer amount is $500. No partial transfer may be made if,
after such partial transfer, the remaining Accumulation Value would be less
than $500 in any Variable Account or $1,000 in the Fixed Account.

Each such transfer will be made at the Accumulation Unit value next
determined following receipt of written notice at the Annuity Service Office of
the Company. With respect to the Fixed Account, such transfers are limited to
only one during each Contract Year. The Company reserves the right to limit the
number and frequency of transfers between Variable Accounts, and to impose a
fee or charge on transfers. With regard to Contracts issued in Pennsylvania,
any fee or charge imposed on a transfer will not exceed $50.

WITHDRAWALS: Contract Owners may withdraw the Accumulation Value allocated to
the Separate Account at any time and receive 100% of the Accumulation Value in
the Variable Accounts, net of any applicable Contingent Deferred Sales Charge.
Withdrawal of Accumulation Value from the Fixed Account is subject to
limitations as described under "The Fixed Account".

Withdrawals are permitted while the Contract is in force during the
Annuitant's life, except that no withdrawal is permitted following the
commencement of annuity payments under Payment Plans D, E, or F (see "Optional
Payment Plans") and before the death of the Owner, provided that with respect
to Contracts originally issued after January 18, 1985, if there are joint
Owners and the joint Owners are husband and wife, then on the death of the
survivor thereof; further provided, if the joint Owners are not husband and
wife, then on the death of the first joint Owner.

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The Contract Owner may select the Variable Account or Accounts from which a
withdrawal is to be made, provided that no partial withdrawal of the
Accumulation Value in an Account may be made if, as a result, the Contract
would have a remaining Accumulation Value of less than $500 in any Variable
Account. In addition, the minimum partial withdrawal that can be made is $500.

Election to withdraw must be in writing and a dollar amount or percentage of
withdrawal to be allocated to the Variable Accounts or the Fixed Account should
be indicated, provided that an Accumulation Value of at least $500 remains in
any Variable Account ($1,000 in the Fixed Account) after any partial
withdrawal.

Payment upon withdrawal with respect to Accumulation Value in the Variable
Accounts generally will be made within seven days from the date the request is
received by the Company and will be based on the value next determined after
the request for full or partial withdrawal has been received. If the request is
received on a day other than a Valuation Day, the value will be determined on
the first Valuation Day after receipt of the request.

See "Federal Income Tax Status," for a discussion of the tax consequences of
withdrawal. Withdrawal may result in a Contingent Deferred Sales Charge being
imposed. (See "Contingent Deferred Sales Charge.")

DELAY OF PAYMENTS ON TRANSFER OR WITHDRAWAL: With respect to the Accumulation
Value in each Variable Account, the Company may suspend the right of transfer
or withdrawal or delay payment on transfer or withdrawal for more than seven
days only:

1. when the New York Stock Exchange is closed;

2. when trading on the New York Stock Exchange is restricted;

3. when an emergency exists as a result of which disposal of securities
held in the Variable Account is not reasonably practicable or it is not
reasonably practicable to determine the value of a Variable Account's net
assets; or

4. during any other period when the Securities and Exchange Commission,
by order, so requires for the protection of Contract Owners, provided that
applicable rules, regulations and orders of the Securities and Exchange
Commission shall govern as to whether the conditions prescribed in (2) and
(3) exist.

TEXAS OPTIONAL RETIREMENT PROGRAM: Under the terms of the Optional Retirement
Program, if a participant makes the required contribution, the State of Texas
will contribute a specified amount to the participant's retirement account. If
a participant does not commence the second year of participation in the plan as
a "faculty member" as defined in Title 110B of the State of Texas Statutes, the
Company will return the State's contribution. If a participant does begin a
second year of participation, the employer's first year contributions will then
be applied as a purchase payment under the Qualified Contract, as will each
subsequent employer's contributions.

Title 8, Section 830.105 of the Texas Government Code restricts withdrawal of
contributions and earnings in a variable annuity contract in the Texas Optional
Retirement Program (ORP) prior to (1) termination of employment in all Texas
public institutions of higher education, (2) retirement, (3) death, or (4) the
participant's attainment of age 70 1/2. A participant in the Texas ORP will
not, therefore, be entitled to make full or partial withdrawals under a
Contract unless one of the foregoing conditions has been satisfied. Appropriate
certification must be submitted to redeem the participant's account. The value
of such Qualified Contract may, however, be transferred to other contracts or
other carriers during the period of participation in the Program.

CONSTRAINTS ON DISTRIBUTIONS FROM SECTION 403(B) ANNUITY CONTRACTS: Section
403(b) of the Code permits public school employees and employees of certain
types of charitable, educational, and

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scientific organizations specified in Section 501(c)(3) of the Code to purchase
annuity contracts, and, subject to certain limitations, exclude the amount of
purchase payments from gross income for tax purposes. Section 403(b) imposes
restrictions on certain distributions from tax-sheltered annuity contracts
meeting the requirements of Section 403(b), and applies to tax years beginning
on or after January 1, 1989.

Section 403(b) requires that distributions from Section 403(b) tax-sheltered
annuities that are attributable to employee contributions made after December
31, 1988 under a salary reduction agreement not begin before the employee
reaches age 59 1/2, separates from service, dies, becomes disabled, or incurs a
hardship. Furthermore, distributions of gains attributable to such
contributions accrued after December 31, 1988 may not be made on account of
hardship. Hardship, for this purpose, is generally defined as an immediate and
heavy financial need, such as paying for medical expenses, the purchase of a
residence, or paying certain tuition expenses that may only be met by the
distribution. Pacific Corinthian Life will not be responsible for monitoring
policy distributions prior to 59 1/2.

A participant in a Contract purchased as a tax-sheltered Section 403(b)
annuity contract will not, therefore, be entitled to exercise the right of
withdrawal, as described in this Prospectus, in order to receive his or her
Accumulation Value attributable to contributions under a salary reduction
agreement or any gains credited to such participant after December 31, 1988
under the Contract unless one of the above-described conditions has been
satisfied. A participant's Accumulation Value in a Contract may be able to be
transferred to certain other investment alternatives meeting the requirements
of Section 403(b) that are available under an employer's Section 403(b)
arrangements.

Pursuant to Revenue Ruling 90-24, a direct transfer between issuers of an
amount representing all or part of an individual's interest in a Section 403(b)
annuity or custodial account is not a distribution subject to tax or to
premature distribution penalty, provided the funds transferred continue after
the transfer to be subject to distribution requirements at least as strict as
those applicable to them before the transfer.

DEATH BENEFIT

If the Annuitant dies before the Annuity Date, a death benefit will be paid
to the Beneficiary. If joint Annuitants are named in the Contract, the death
benefit is payable only upon receipt of due proof of the death of both
Annuitants before the Annuity Date. Upon receipt of notice of death, the
Company will promptly send the Beneficiary a letter outlining the requirements
to process the claim and the payment options available. Death benefit proceeds
will be paid according to the payment option selected upon receipt by the
Company of due proof of death and selection of a payment option.

On or before the fifth contract anniversary, the amount of the death benefit
will be the greater of (1) the aggregate premium payments less any reductions
caused by previous withdrawals, or (2) the Contract Value next determined
following receipt of due proof of death by the Company at its home office.
After the fifth contract anniversary, the minimum guaranteed death benefit is
equal to the death benefit as of the next previous Milestone Date, increased by
any premiums paid since that Milestone Date and decreased by any withdrawals,
net of Contingent Deferred Sales Charge, received since that Milestone Date.
After the fifth contract anniversary, the death benefit proceeds will be the
Contract Value, or, if larger, the minimum guaranteed death benefit. If due
proof of death is received on a day other than a Valuation Day, the Contract
Value will be determined on the first Valuation Day after such receipt. (The
preceding provision is considered a "Stepped-Up" death benefit provision not
accepted for use in North Carolina.) The Contract Owner may, during the
lifetime of the Annuitant, elect to have all or a part of the death benefit
proceeds paid to the Beneficiary in a single sum or under one of the Optional
Payment Plans, provided that no Payment Plan may be selected unless the amount
of the death benefit proceeds applied to the Payment Plan exceeds $10,000.
Otherwise, the death benefit proceeds will be paid in cash. If the Contract
Owner has not made an election, the Beneficiary may do so after the death of
the Annuitant. (See "Payment Plans.")

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With respect to Contracts issued after January 18, 1985, if the Owner dies
before the Annuitant and prior to the Annuity Date, death benefit proceeds will
be paid to the Owner's Beneficiary upon receipt of due proof of the Owner's
death and instructions regarding payment. The term Owner means any owner. If
there are joint Owners, the term Owner means the first joint Owner to die
unless the joint Owners are husband and wife. If the joint Owners are husband
and wife and if the surviving spouse is the sole surviving joint tenant, the
term Owner refers to the survivor thereof. If the surviving spouse of the
deceased Owner is the Owner Beneficiary, or is the sole surviving joint tenant,
and if the deceased Owner was not the sole Annuitant, such spouse may choose to
continue this Contract in force on the same terms as before the Owner's death.
If there is no Owner Beneficiary, the death benefit proceeds shall be paid to
the joint Owner (if not a surviving spouse), if any, otherwise to the
Annuitant. Payment will be made either to the Owner Beneficiary or, if not
applicable, to the Beneficiary. If an Owner is not also an Annuitant, then, in
the event the deaths of the Owner and the Annuitant are under circumstances in
which it cannot be determined who died first, payment will be made to the
Annuitant's Beneficiary. If the Owner and the Annuitant are the same, payment
will be made to the Annuitant's Beneficiary.

If the Owner Beneficiary is the surviving spouse of the deceased Owner, he or
she may choose to receive a payment under any Payment Plan of the Contract that
could have been selected by the Owner. For any other Owner Beneficiary, only
those options may be chosen that provide for complete distribution of such
Owner's interest in the Contract:

1. within 5 years of the date of such Owner's death;

2. over the lifetime of the Owner Beneficiary; or

3. over a period that does not exceed the life expectancy of such Owner
Beneficiary, as defined by the Code and the Regulations adopted under the
Code.

Subparagraphs (2) and (3) apply only to individuals. All such payments must
start within one year of the date of such Owner's death. For purposes of these
required distribution rules, special provisions apply if the Owner is not an
individual (other than an Owner of a Contract under a Qualified Plan as defined
in Section 401 or 403 of the Code). The special provisions include a rule that
the so-called "primary annuitant" (the individual who is of primary importance
in determining the timing of payments under the annuity contract) will be
treated as the Owner and that a change in a primary annuitant will be treated
as the death of the Owner for purposes of determining the timing of required
distributions. No death benefit is payable in this situation. Rather, the
amount of the distribution will be (a) the Contract Value if the non-individual
Owner elects to maintain the Contract and reinvest the Contract Value into the
Contract in the same amount as immediately prior to the distribution, or (b)
the Contract Value less any Contract Maintenance Charge, and any reductions in
the Contract Value caused by withdrawals, if the non-individual Owner elects a
cash distribution. The amount of the distribution will be determined as of the
Valuation Day we receive, in proper form, the request to change the Primary
Annuitant and instructions regarding maintaining the Contract or cash
distribution.

On the death of any Owner after the Annuity Date, any guaranteed amounts
remaining unpaid will continue to be paid to the Annuitant pursuant to the
Payment Plan in force at the date of death. No death benefit will be paid if
the Owner dies after the Annuity Date. On the death of the Annuitant, any
unpaid benefit available will be paid to the Beneficiary of the Annuitant in
accordance with the "Payment Plan" section below.

If an election is not made within 60 days of our receipt of due proof of
death or, if earlier, 60 days (or shorter period as we permit) prior to the
first anniversary of the death, the single payment option will be deemed
elected, unless otherwise required by law. If the single payment option is
deemed elected, we will consider that deemed election as receipt of selection
of a payment option.

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ASSIGNMENTS

During the Accumulation Period, the Contract Owner may assign the Contract
while the Contract is in force during the Annuitant's lifetime. However, in the
event the Contract is issued under a Qualified Plan, it generally may not be
assigned, discounted, pledged as collateral for a loan or transferred. A
Collateral Assignment does not change ownership of the Contract. Amounts
payable under the Contract may not be assigned or encumbered and, to the extent
permitted by law, are not subject to levy, attachment or any other judicial
process for the payment of the payee's debts or obligations. No assignment of
any interest under the Contract is binding upon the Company until a written
assignment is received and recorded at the Company's home office; and the
Company assumes no responsibility with respect to the validity of any such
assignment. The assignment will go into effect when signed subject to any
payments made or other actions taken by the Company before the assignment is
recorded. An assignment of a Contract (including a collateral assignment) may
give rise to a taxable event.

CHANGE OF BENEFICIARY DESIGNATION

Subject to the rights of an irrevocable Beneficiary, the Contract Owner may
change or revoke a Beneficiary designation while the Contract is in force
during the Annuitant's lifetime by sending a written request to change or
revoke the Beneficiary designation in such form as the Company may require to
its home office. The change or revocation will not be binding on the Company
until it is received and recorded at its Annuity Service Office. The change
will go into effect when signed subject to any payments made or other actions
taken by the Company before the change is recorded.

CHANGE IN THE OPERATION OF THE SEPARATE ACCOUNT

If investment in the Fund or a Portfolio thereof is no longer possible or in
the opinion of the Company becomes inappropriate to the purpose of the
Contract, the Company may substitute another mutual fund (or portfolio) without
Contract Owners' consent. However, no such substitution will be made without
the necessary approval of the Securities and Exchange Commission.

At the Company's election and subject to the necessary vote by Contract
Owners, the Separate Account may be deregistered under the 1940 Act. In the
event registration is no longer required, deregistration of the Separate
Account requires an order by the Securities and Exchange Commission. In the
event of any such change in the operation of the Separate Account, the Company
may make appropriate endorsement to the Contract to reflect the change and take
such other action as may be necessary to effect such change.

MODIFICATION

Upon notice to the Contract Owner, or to payees during the Annuity Period,
the Company may modify the Contract, if such modification: (1) is necessary to
make the Contract comply with any applicable law or regulation issued by a
government agency to which the Company is subject; (2) is necessary to assure
that the Contract continues to qualify under the Internal Revenue Code or other
laws and regulations issued by a government agency relating to annuities or
variable annuities; (3) is necessary to reflect a change in the operation of
the Separate Account (see "Change in the Operation of the Separate Account,"
above); or (4) provides additional Variable Accounts. Any such modification may
require an order by the Securities and Exchange Commission. In the event of any
such modification, the Company may make an appropriate endorsement to the
Contract to reflect the change and take such action as may be necessary to
effect such change.

B. PAYMENT PLANS

ANNUITY DATE: The Contract Owner selects an Annuity Date at the time of
application. The Contract Owner may choose to annuitize at any time while the
Annuitant is living and while the Contract

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<PAGE>

is in force. Moreover, with respect to Accumulation Value in the Separate
Account, the Annuity Date may not be deferred beyond the first day of the month
following the Annuitant's 85th birthday. In the case of joint Annuitants, the
birthdate of the younger Annuitant will be used to determine the latest Annuity
Date.

For Qualified Contracts issued in connection with this Prospectus under
retirement plans, reference should be made to the terms of the particular
retirement plan for any limitations or restrictions on the Annuity Date. Under
Qualified Plans, annuity payments generally must begin no later than April 1 of
the calendar year following the year in which the Annuitant reaches age 70 1/2.

The Contract Owner may, during the life of the Annuitant at any time prior to
the Annuity Date, elect one of the Payment Plans. For Contracts issued in
connection with Qualified Plans, the selection of a Payment Plan may be limited
under the terms of the particular Qualified Plan and applicable law. If there
are joint Annuitants, Plans D or E may not be elected. The Contract Owner may
change a Payment Plan by written notice received at the Annuity Service Office
of the Company prior to the Annuity Date.

If no Payment Plan has been elected, monthly payments will be made starting
on the Annuity Date in accordance with Plan D, with guaranteed payments for ten
years, if there is a single Annuitant. If joint Annuitants are named in the
Contract, payments will be made in accordance with Plan F. (See "Optional
Payments Plans.")

The Contract Owner may, during the life of the Annuitant, change the Annuity
Date, provided written notice is received by the Company at its Annuity Service
Office at least 45 days prior to the Annuity Date set forth in the Contract.
The date selected as the new Annuity Date must be after the date the written
notice requesting a change of Annuity Date is received by the Company at its
Annuity Service Office.

DETERMINATION OF ANNUITY PAYMENTS: The proceeds on the Annuity Date will be
the Contract Value less reductions, if any, for Contingent Deferred Sales
Charge and premium taxes. A Contingent Deferred Sales Charge will be imposed on
any amount attributable to a premium payment in its fifth Contribution Year or
less. However, no Contingent Deferred Sales Charge will be imposed if the
proceeds are applied under a Payment Plan currently offered under this
Prospectus or to the purchase of a Single Premium Immediate Annuity then
offered by the Company or an affiliate thereof and the payment period elected
is five years or longer. The total Contract proceeds will be applied to the
Payment Plan elected. The proceeds attributable to the Variable Account(s) will
be transferred to the General Account. Thereafter, the Annuitant will receive
fixed monthly payments based on the proceeds and the annuity tables set forth
in the Contract.

Annuity payments are paid as equal monthly installments, except that with the
Company's consent the frequency of payments may be changed. If the frequency of
payments is less than monthly, the dollar amount of each payment will be
greater than if payments were made on a monthly basis. The Company reserves the
right to pay such proceeds in one lump sum if the net amount is less than
$10,000. If the frequency of payments selected would result in a periodic
payment of less than $20, the Company reserves the right to change the
frequency of payments in order to avoid payments of less than $20.

PAYMENT PLANS APPLICABLE TO DEATH BENEFIT: During the life of the Annuitant,
the Contract Owner may choose a Payment Plan that will apply to the death
benefit proceeds upon the death of the Annuitant. This choice may be changed
during the life of the Annuitant. To choose or change a Payment Plan, a written
notice must be received at the Annuity Service Office of the Company.

If the Contract Owner has not chosen a Payment Plan prior to the Annuitant's
death, a Beneficiary may make this choice upon the Annuitant's death.

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A Payment Plan is available for death benefit proceeds only if the amount of
the proceeds applied to that Plan is at least $10,000. Death benefit proceeds
of less than $10,000 will be paid in cash.

RIGHT TO PURCHASE SINGLE PREMIUM LIFE ANNUITY: In addition to the Payment
Plans listed in this Prospectus, the Contract Owner may on the Annuity Date
make a written request to the Annuity Service Office of the Company to
surrender the Contract and use the proceeds to purchase any single premium
immediate life annuity then made available by the Company or an affiliated life
insurance company.

OPTIONAL PAYMENT PLANS: Subject to restrictions applicable to Qualified
Plans, any one of the following optional Payment Plans may be elected.

PLAN A. INTEREST

The proceeds may be left on deposit with the Company to earn interest. The
Contract Owner may choose when the payee is to receive payments, subject to the
approval of the Company. If the payee dies before all payments have been made,
the Beneficiary will be paid the unpaid sum left on deposit plus any unpaid
interest up to the date of the payee's death. This option generally is not
available to Contracts issued in connection with Qualified Plans.

PLAN B. FIXED INSTALLMENTS

Proceeds plus interest will be paid in equal installments. Payments will
continue until principal and interest are exhausted. The principal is the
amount of proceeds applied to this plan. If the payee dies before all payments
have been made, the Beneficiary will be paid the unpaid sum left on deposit
with the Company plus any interest up to the date of the payee's death. For
Contracts issued in connection with Qualified Plans, the amount of the
installments generally must satisfy minimum distribution rules.

This plan may be used only if the total amount paid each year is $60 or more
for each $1,000 of proceeds.

PLAN C. FIXED PERIOD

Proceeds plus interest will be paid in equal installments for the number of
years chosen. The period chosen may not exceed 25 years. Under Contracts issued
in connection with Qualified Plans, the period elected generally may be no
longer than the joint life expectancy of the Annuitant and Beneficiary in the
year the Annuitant reaches age 70 1/2.

The election of a longer period results in smaller payments than would be
made if a shorter period were chosen. The Contract provides that under certain
circumstances, if the payee dies before the guaranteed payments have been made,
the discounted value of the remaining unpaid payments will be paid in one sum
to the Beneficiary. The discounted value will be based on interest compounded
annually at 4% or such higher rate that was used to determine the payments.

PLAN D. LIFE INCOME WITH GUARANTEED PAYMENT PERIOD

Proceeds will be used to provide payments in equal installments for as long
as the payee lives. A guaranteed payment period for 10 or 20 years can be
chosen. This means that even if the payee dies during this period, payments
will continue to be made until the end of the period chosen. The election of a
20 year guaranteed payment period results in smaller payments than would be
paid if a 10 year guaranteed period were chosen. Under Contracts issued in
connection with Qualified Plans, the 20 year

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<PAGE>

period will not be available if the joint life expectancy of the Annuitant and
Beneficiary is less than 20 years in the year the Annuitant reaches age 70 1/2.
The Contract provides that under certain circumstances, if the payee dies
before the guaranteed payments have been made, the discounted value of the
remaining unpaid guaranteed payments will be made in one sum to the
Beneficiary. The discounted value will be based on interest compounded annually
at 3.5% or such higher rate that was used to determine annuity payments.

PLAN E. INSTALLMENT REFUND

Proceeds will be used to provide payments in equal installments. Guaranteed
payments will continue until the sum of the payments equals the proceeds
applied. If the payee is still living at that time, payments will continue as
long as the payee lives. The Contract provides that under certain
circumstances, if the payee dies before the guaranteed payments have been made,
the discounted value of the remaining unpaid guaranteed payments will be paid
in one sum to the Beneficiary. The discounted value will be based on interest
compounded annually at 3.5% or such higher rate that was used to determine the
annuity payments.

PLAN F. JOINT AND SURVIVOR LIFE ANNUITY

Proceeds will be paid during the lifetimes of the joint Annuitants. Payment
of proceeds will continue as long as either Annuitant is living. After the
death of both Annuitants no further payments will be made. It would be possible
under this plan for only one annuity payment to be made if both payees died
before the due date of the second payment.

ANNUITY PAYMENT RATES: The Contract contains annuity payment rates for the
Payment Plans described in this Prospectus. The rates show the monthly payment
amount for each $1,000 of proceeds applied when this payment is based on the
minimum guaranteed interest rate. The minimum guaranteed interest rate for
Plans A, B and C is 4% per year, compounded annually, and for Plans D, E and F,
3.5% per year, compounded annually.

The annuity payment rates vary according to the Payment Plan elected and the
age of the payee. The mortality rate used to determine the annuity payment
rates for Payment Plans D, E and F is the A-1949 Mortality Table.

PROTECTION OF BENEFITS: Contract Owners considering assigning amounts under
Payment Plans, electing to receive a discounted lump sum cash settlement, or
transferring among Payment Plans should consult the Company's Annuity Service
Office to determine whether these measures are permitted for particular Payment
Plans.

INQUIRIES: If you have questions about the Contract, you may reach our
service representatives at 1-800-735-5535 between the hours of 7:00 a.m. and
5:00 p.m., Pacific time.

C. VOTING RIGHTS

Pacific Life is the legal owner of the shares of the Fund held by the
Variable Accounts of the Separate Account. In accordance with its view of
present applicable law, Pacific Life will exercise voting rights attributable
to the shares of each Portfolio of the Fund held in the Variable Accounts at
any regular and special meetings of the shareholders of the Fund on matters
requiring shareholder voting under the 1940 Act. Pacific Life will exercise
these voting rights based on instructions received from persons having the
voting interest in corresponding Variable Accounts of the Separate Account.
However, if the 1940 Act or any regulations thereunder should be amended, or if
the present interpretation thereof should

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change, and as a result Pacific Life determines that it is permitted to vote
the shares of the Fund in its own right, it may elect to do so.

The person having the voting interest under a Contract is the Owner. Unless
otherwise required by applicable law, the number of Fund shares of a particular
Portfolio as to which voting instructions may be given to us is determined by
dividing a Contract Owner's Accumulated Value in a Variable Account on a
particular date by the net asset value per share of that Portfolio as of the
same date. Fractional votes will be counted. The number of votes as to which
voting instructions may be given will be determined as of the date coincident
with the date established by the Fund for determining shareholders eligible to
vote at the meeting of the Fund. If required by the SEC, we reserve the right
to determine in a different fashion the voting rights attributable to the
shares of the Fund. Voting instructions may be cast in person or by proxy.

Voting rights attributable to the Contract Owner's Accumulated Value in a
Variable Account for which no timely voting instructions are received will be
voted by Pacific Life in the same proportion as the voting instructions that
are received in a timely manner for all Contracts participating in that
Variable Account. Pacific Life will also exercise the voting rights from assets
in each Variable Account that are not otherwise attributable to Contract
Owners, if any, in the same proportion as the voting instructions that are
received in a timely manner for all Contracts participating in that Variable
Account. If Pacific Life holds shares of a Portfolio in its General Account,
and/or if any of our non-insurance subsidiaries hold shares of a Portfolio,
such shares will be voted in the same proportion as votes cast by the Separate
Account and other separate accounts of Pacific Life, in the aggregate.

FEDERAL INCOME TAX STATUS

INTRODUCTION

The discussion contained herein is general in nature and is not intended as
tax advice. Any interested person should consult a competent tax adviser. The
discussion is limited to federal income tax laws and no attempt is made to
consider any applicable state or other tax laws. Moreover, the discussion
herein is based upon the Company's understanding of current federal income tax
laws as they are currently interpreted. No representation is made regarding the
likelihood of continuation of those federal income tax laws or of their current
interpretation by the Internal Revenue Service.

FEDERAL TAX STATUS OF THE COMPANY AND THE SEPARATE ACCOUNT

General

Pacific Life is taxed as a life insurance company under Part I, Subchapter L
of the Code. Because the Separate Account is not taxed as a separate entity and
its operations form a part of Pacific Life, Pacific Life will be responsible
for any Federal income taxes that become payable with respect to the income of
the Separate Account. However, each Variable Account will bear its allocable
share of such liabilities. Under current law, no item of dividend income,
interest income, or realized capital gain of the Variable Accounts will be
taxed to Pacific Life to the extent it is applied to increase reserves under
the Contracts.

Under the principles set forth in IRS Revenue Ruling 81-225 and Section
817(h) of the Code and regulations thereunder, Pacific Life believes that it
will be treated as the owner of the assets in the Separate Account for Federal
income tax purposes.

The Separate Account will invest its assets in a mutual fund that is intended
to qualify as a regulated investment company under Part I, Subchapter M of the
Code. If the requirements of the Code are met, the Fund generally will not be
taxed on amounts distributed on a timely basis to the Separate Account.

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Diversification Standards

Each Portfolio of the Fund will be required to adhere to regulations adopted
by the Treasury Department pursuant to Section 817(h) of the Code prescribing
asset diversification requirements for investment companies whose shares are
sold to insurance company separate accounts funding variable contracts. For
details on these diversification requirements, see "What is the Federal Income
Tax Status of the Fund" in the Fund's prospectus.

The IRS has stated in published rulings that a variable contract owner will
be considered the owner of separate account assets if the contract owner
possesses incidents of ownership in those assets, such as the ability to
exercise investment control over the assets. In those circumstances, income and
gains from the separate account assets would be includable in the variable
contract owner's gross income. The Treasury Department also announced, in
connection with the issuance of regulations concerning diversification, that
those regulations "do not provide guidance concerning the circumstances in
which investor control of the investments of a segregated asset account may
cause the investor [i.e., the Contract Owner], rather than the insurance
company, to be treated as the owner of the assets in the account." This
announcement also stated that guidance would be issued by way of regulations or
rulings on the "extent to which policyholders may direct their investments to
particular subaccounts without being treated as owners of the underlying
assets." As of the date of this Prospectus, no such guidance has been issued.

The ownership rights under the Contract are similar to, but different in
certain respects from, those described by the IRS in rulings in which it was
determined that policy owners were not owners of separate account assets. For
example, the Contract Owner has additional flexibility in allocating premium
payments and Contract Values. These differences could result in a Contract
Owner being treated as the owner of the Contract's pro rata portion of the
assets of the Separate Account. In addition, we do not know what standards will
be set forth, if any, in the regulations or rulings which the Treasury
Department has stated it expects to issue. We therefore reserve the right to
modify the Contract, as deemed appropriate by us, to attempt to prevent a
Contract Owner from being considered the owner of the Contract's pro rata share
of the assets of the Separate Account. Moreover, in the event that regulations
are adopted or rulings are issued, there can be no assurance that the Portfolio
will be able to operate as currently described in the Prospectus, or that the
Fund will not have to change any Portfolio's investment objective or investment
policies.

FEDERAL TAX STATUS OF CONTRACT OWNERS

NONQUALIFIED PLANS: The Company believes that the Contract Owner generally
will not be subject to income tax on increases in the Contract Value until
payments or distributions are received under the Contract. Increases in the
value of a Contract attributable to sources other than the investment
performance of the Variable Accounts may be taxable to Contract Owners as those
amounts are credited to their Contracts. Income taxation of benefits received
under the Contract, whether received before or after the Annuity Date, is
determined under Section 72 of the Code.

(a) Distributions before the Annuity Date. A distribution by full or partial
surrender prior to the Annuity Date may subject the Contract Owner to income
tax. If the Contract is assigned or pledged as collateral for a loan, the
amount assigned or pledged will be treated as a distribution.

If the distribution is by full surrender, the Contract Owner is taxed on the
amount distributed less premiums paid, with such premiums reduced by any prior
partial surrenders which were not subject to income tax.

A distribution by partial surrender is deemed to come first from any
previously untaxed accumulation which is distributed. The previously untaxed
accumulation is the Contract Value, computed without

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<PAGE>

adjustment for any applicable surrender penalty, less premiums paid, with such
premiums reduced by any prior partial surrenders which were not subject to
income tax.

A distribution attributable to a premium paid prior to August 14, 1982, will
be deemed to come first from principal, then from the untaxed accumulation. If
the Contract contains values attributable to premiums paid both prior to August
14, 1982, and after August 13, 1982, the order of distribution is as follows:
(1) pre-August 14, 1982 premiums; (2) untaxed accumulations attributable to
pre-August 14, 1982 premiums; (3) untaxed accumulations attributable to post-
August 13, 1982 premiums; and (4) post-August 13, 1982 premiums. Premiums paid
by means of a tax-free exchange of annuity contracts under Section 1035 of the
Code carry to the new annuity contract the original premium payment date or
dates for purposes of determining taxable distributions.

(b) Distributions after the Annuity Date. Where payments are received after
the Annuity Date pursuant to an annuity option (Payment Plans B, C, D, E, or
F), that portion of each payment which represents the Contract Owner's
investment in the Contract, as that term is defined in Section 72 of the Code,
is excluded from gross income for income tax purposes. To determine the
percentage of each payment which is excluded from taxable income, the
investment in the Contract, which is ordinarily the amount of premium payments
under the Contract less prior partial surrenders which were not subject to
income tax, is divided by the expected return under the Contract. The expected
return under the Contract in the case of Optional Payment Plans B or C is based
on the period of time that payments under the plan will be made. The expected
return under the Contract in the case of Optional Payment Plans D, E, or F is
based on the life expectancy of the Annuitant or Annuitants in the case of
joint Annuitants.

For annuities starting after December 31, 1986, the amount that may be
excluded from gross income is limited to the Contract Owner's investment in the
Contract. Once such investment has been recovered, the entire amount of each
remaining payment will be included in gross income. If, due to the death of the
Annuitant, payments cease before the full amount of the investment in the
Contract has been recovered, such unrecovered investment generally will be
allowed as a deduction to the Annuitant for his last taxable year.

If the Contract matures and if the Contract Owner elects to leave the
proceeds on deposit with the Company under Optional Payment Plan A, the
proceeds on maturity are taxed in the same manner as a full surrender and the
interest payments on the funds on deposit are included in the Contract Owner's
taxable income in the year the interest is received by the Contract Owner or
credited to the amount held on deposit.

(c) Death Benefits. The death benefit is taxable to the beneficiary as
ordinary income to the extent of gain in the Contract. Gain in the Contract is
equal to the death benefit less the premium paid with such premiums reduced by
prior non-taxable distributions.

(d) Penalty Tax. In certain circumstances, a taxable distribution from the
Contract will be subject to a penalty tax equal to ten (10) percent of the
taxable amount distributed.

The circumstances in which the penalty tax does not apply include the
following: distributions which are attributable to premiums paid ten (10) years
or more prior to the date of distribution if the Contract was issued prior to
January 19, 1985; distributions made on or after the death of the Contract
Owner; distributions made after the Contract Owner attains the age of fifty-
nine and one-half (59 1/2); distributions to a Contract Owner who has become
disabled; distributions made under Optional Payment Plans C, E, or F, provided
the distributions under such plans are substantially equal, are made not less
frequently than annually, and extend over the taxpayer's life or life
expectancy; and distributions attributable to premiums paid prior to August 14,
1982.

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<PAGE>

(e) Non-Natural Holders. Subject to several exceptions, in the case of
Contracts held by non-natural persons such as certain trusts and corporations,
income on the Contract is taxed currently to the Contract Owner. The rule does
not apply where the contract is acquired by the estate of a decedent, where the
contract is held by certain types of retirement plans, where the contract is a
qualified funding asset for structured settlements, where the contract is
purchased on behalf of an employee upon termination of a qualified plan, and in
the case of a so-called immediate annuity. Code Section 457 (deferred
compensation) plans for employees of state and local governments and tax-exempt
organizations are not within the purview of the exceptions.

(f) Aggregation of Contracts. For contracts entered into on or after October
21, 1988, for purposes of determining the amount of any distribution under Code
Section 72(e) (amounts not received as annuities) that is includable in gross
income, all annuity contracts issued by the same insurer to the same contract
owner during any calendar year are to be aggregated and treated as one
contract. Thus, any amount received under any such contract prior to the
contract's annuity start date, such as a partial surrender, dividend, or loan,
will be taxable (and possibly subject to the 10% penalty tax) to the extent of
the combined income in all such contracts.

In addition, the Treasury Department has broad regulatory authority in
applying this provision to prevent avoidance of the purposes of this new rule.
It is possible that, under this authority, the Treasury Department may apply
this rule to amounts that are paid as annuities (on and after the annuity start
date) under annuity contracts issued by the same company to the same owner
during any calendar year. In this case, annuity payments could be fully taxable
(and possibly subject to the 10% penalty tax) to the extent of the combined
income in all such contracts and regardless of whether any amount would
otherwise have been excluded from income because of the "exclusion ratio" under
the contract.

(g) Gift of Annuity Contracts. Generally, gifts of non-tax qualified
contracts prior to the annuity start date will trigger tax on the gain on the
contract, with the donee getting a stepped-up basis for the amount included in
the donor's income. The 10% penalty tax and gift tax also may be applicable.
This provision does not apply to transfers between spouses or incident to a
divorce.

QUALIFIED PLANS: The Contract is designed for use with several types of
Qualified Plans. The tax rules applicable to participants in such Qualified
Plans vary according to type of plan and the terms and conditions of the plan
itself. Therefore, no attempt is made herein to provide more than general
information about the use of the Contract with the various types of Qualified
Plans. Participants under such Qualified Plans, as well as Contract Owners,
Annuitants and Beneficiaries, are cautioned that the rights of any person to
any benefits under such Qualified Plans may be subject to the terms and
conditions of the plans themselves or limited by applicable law, regardless of
the terms and conditions of the Contract issued in connection therewith.

The amounts that may be contributed to Qualified Plans are subject to
limitations that may vary depending on the type of plan. In addition, early
distributions from most Qualified Plans may be subject to penalty taxes, or in
the case of distributions of amounts contributed under salary reduction
agreements, could cause the plan to be disqualified. Furthermore, distributions
from most Qualified Plans are subject to certain minimum distribution rules.
Failure to comply with these rules could result in disqualification of the
Qualified Plan and or a penalty tax upon the participants equal to fifty (50)
percent of the undistributed minimum required amount. As a result, the minimum
distribution rules could limit the availability of certain annuity options to
participants and their beneficiaries.

Generally, distributions from a Contract under a Qualified Plan (other than a
Contract issued under a Section 457 Plan) before the Annuity Date are taxed in
the same manner as described in Paragraph (b) above with respect to
distributions after the Annuity Date under Nonqualified Plans. The amount of
the Contract pledged or assigned as collateral for a loan may be treated as a
distribution from the Contract under certain Qualified Plans. Generally, in the
case of most Contracts under Qualified Plans,

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<PAGE>

the investment of the participant/beneficiary will be zero and distributions
before the Annuity Date will in such instances be fully taxable. The proceeds
of a full surrender of such a Contract may qualify for favorable tax treatment
as a "lump-sum distribution," subject to 5-year forward averaging for
distributions before December 31, 1999 (the Tax Reform Act of 1986 generally
eliminated 10-year forward averaging and phased out capital gain treatment).
However, early distribution of the proceeds of a Contract issued in connection
with certain Qualified Plans generally will be subject to a 10% penalty tax if
made before the participant reaches age 59 1/2 and not made on account of death
or disability, with certain exceptions. These exceptions include certain
distributions: (1) which are part of a series of substantially equal periodic
payments made (at least annually) for the life (or life expectancy) of the
participant or the joint lives (or joint life expectancies) of the participant
and a designated beneficiary, but in the case of a participant in a plan
qualified under section 401(a) of the Code or the owner of a 403(b) contract
only if the individual has separated from service; (2) also in the case of
corporate plans qualified under section 401(a) of the Code and 403(b)
contracts, made to an employee after termination of employment after reaching
age 55; (3) made to pay for certain medical expenses; or (4) in the case of
IRA's, made for certain qualifying expenditures for first-time homebuyers or
for qualified higher education expenses.

Generally, distributions of minimum amounts specified by the Code must
commence by April 1 of the calendar year following the calendar year in which
the participant reaches age 70 1/2; however, if a plan qualified under section
401(a) of the Code or a 403(b) contract so provides, no distributions are
required for individuals who are employed after age 70 1/2 (other then 5%
owners) until they retire. Additional distribution rules apply after the
applicant's death.

Generally, distributions after the Annuity Date are taxed in the same manner
as described in Paragraph (b) above with respect to Nonqualified Plans.
Distributions from certain retirement plans may also be subject to an excise
tax if the amount of such distributions exceeds certain threshold amounts
prescribed pursuant to the Code.

Following are brief descriptions of various types of Qualified Plans and of
the use of the Contract in connection therewith. Employees or other purchasers
of the Contract for use with any of the Qualified Plans described herein should
seek competent advice as to the suitability of the proposed plan document and
of the Contract to their specific needs.

(a) H.R. 10 Plans. The Self-Employed Individuals Tax Retirement Act of 1962,
as amended, which is commonly referred to as "H.R. 10," permits self-employed
individuals to establish Qualified Plans for themselves and their employees.
The tax law contains certain limitations with respect to such plans concerning
maximum permissible contributions, distribution dates, non-forfeitability of
interests and tax rates applicable to distributions. In order to establish such
a plan, a plan document, usually in prototype form pre-approved by the Internal
Revenue Service, is adopted and implemented by the employer.

The tax treatment of H.R. 10 plans is essentially the same as for corporate
plans. Some special restrictions apply to self-employed individuals who are
"owner-employees." An owner-employee is a sole proprietor or a partner who owns
more than 10% capital or a profit interest in a partnership.

(b) Simplified Employee Pension Plans. Section 408 of the Code permits
eligible employers to establish a retirement program known as a "Simplified
Employee Pension Plan." Such a plan may permit the purchase of the Contract to
provide benefits under the plan. In order to establish such a plan, a plan
document, usually in prototype form pre-approved by the Internal Revenue
Service, is adopted and implemented by the employer.

(c) Individual Retirement Accounts. Section 408 of the Code permits eligible
individuals to contribute to an individual retirement program known as an
"Individual Retirement Account" ("IRA"). In some cases contributions to an IRA
may be made on a tax-deductible basis. IRAs are subject to limitations on the
amount which may be contributed, the persons who may be eligible, and on the
time when distributions may commence. In addition, distributions from certain
other types of Qualified Plans may be placed on a tax-deferred basis into an
IRA.

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<PAGE>

(d) Corporate Pension and Profit-Sharing Plans. Sections 401(a) and 401(k) of
the Code permit corporate employers to establish various types of retirement
plans for employees. Such retirement plans may permit the purchase of the
Contract to provide benefits under the plans.

(e) Tax-Sheltered Annuities. Section 403(b) of the Code permits the purchase
of "tax-sheltered annuities" by public schools and certain charitable,
educational and scientific organizations described in Section 501(c) (3) of the
Code. These eligible employers may make contributions to the Contracts for the
benefit of their employees. Such contributions are not includible in the gross
income of the employee until the employee receives distributions from the
Contract. The amount of contributions to the tax-sheltered annuity is limited
to certain maximums imposed by the Code. Furthermore, the Code sets forth
additional restrictions governing such items as transferability, distributions,
nondiscrimination and withdrawals. Any employee should obtain competent tax
advice as to the tax treatment and suitability of such an investment. For a
discussion of restrictions on distributions from Section 403(b) tax-sheltered
annuities, see "Constraints on Distributions from Section 403(b) Annuity
Contracts".

(f) Deferred Compensation Plans for State and Local Governments. Section 457
of the Code permits employees of a state or local government (or of certain
other tax-exempt entities) to defer compensation through an eligible government
plan. Contributions to a Contract in connection with an eligible government
plan are subject to limitations.

WITHHOLDING: With respect to Contracts used in connection with Nonqualified
Plans, with certain limited exceptions, withholding on annuity payments and
other distributions from the Contract is required. However, recipients of
annuity payments or other distributions are allowed to make an election not to
have federal income tax withheld, which is revocable at any time.

The withholding rate generally will be applied only against the taxable
portions of annuity payments or other distributions, and will be based upon the
nature of the distribution. Federal tax will be withheld from annuity payments
pursuant to the recipient's withholding certificate. If no withholding
certificate is filed with the Company, tax will be withheld from annuity
payments on the basis that the payee is married with three withholding
exemptions.

Distributions from a Qualified Plan (not including an individual retirement
annuity subject to Code Section 408) to an employee, surviving spouse, or
former spouse who is an alternate payee under a qualified domestic relations
order, in the form of a lump sum settlement or periodic annuity payments for a
fixed period of fewer than 10 years are subject to mandatory income tax
withholding of 20% of the taxable amount of the distribution, unless (1) the
distributee directs the transfer of such amounts in cash to another Qualified
Plan or an IRA; or (2) the payment is a minimum distribution required under the
Code. The taxable amount is the amount of the distribution less the amount
allocable to after-tax contributions. All other types of taxable distributions
are subject to withholding unless the distributee elects not to have
withholding apply.

OTHER CONSIDERATIONS: The above description of the Federal income tax
consequences of the different types of Qualified Plans which may be funded by
the Contract described in this Prospectus is only a brief summary and is not
intended as tax advice. The rules governing the provisions of Qualified Plan
distributions are extremely complex and often difficult to comprehend. Anything
less than full compliance with the applicable rules, all of which are subject
to change, may have adverse tax consequences. A prospective Contract Owner
considering adoption of a Qualified Plan and purchase of a Contract in
connection therewith should first consult a qualified and competent tax
adviser, with regard to the suitability of the Contract as an investment
vehicle for the Qualified Plan. We are not the Administrator of your Qualified
Plan. You should also consult with your tax advisor and/or administrator before
you withdraw any portion of your Contract Value.

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<PAGE>

OTHER INFORMATION

REPORTS TO OWNERS

A statement will be sent quarterly to each Contract Owner setting forth a
summary of the transactions that occurred during the quarter, and indicating
the Contract Value and as of the end of each quarter. In addition, the
statement will indicate the allocation of Contract Value among the Fixed
Account and the Variable Accounts and any other information required by law.
Confirmations will also be sent out upon certain unscheduled transactions under
your contract. If you suspect an error on a confirmation or quarterly
statement, you must notify us in writing within 30 days from the date of the
first confirmation or statement on which the transaction appeared. When you
write, tell us your name, contract number and description of the error.

Each Contract Owner will also receive an Annual report containing financial
statements for the Separate Account and the Fund, the latter of which will
include a list of the portfolio securities of the Fund, as required by the 1940
Act, a semi-annual report containing financial statements for the Fund, and/or
such other reports as may be required by Federal securities laws.

TELEPHONE TRANSFER PRIVILEGES

You may request a transfer of Accumulated Value by telephone if an
authorization for telephone requests ("telephone authorization") is on file
with Pacific Life . All or part of any telephone conversation with respect to
transfer instructions may be recorded by Pacific Life. Telephone instructions
received by 1:00 P.M. Pacific time on any Valuation Date will be effected as of
the end of that Valuation Date in accordance with your instructions, (presuming
that the Free-Look Period has expired). Pacific Life reserves the right to deny
any telephone transfer request. If all telephone lines are busy (which might
occur, for example, during periods of substantial market fluctuations), you
might not be able to request transfers by telephone and would have to submit
written requests.

Pacific Life has established procedures to confirm that instructions
communicated by telephone are genuine. Under the procedures, any person
requesting a transfer by telephone must provide certain personal identification
as requested by Pacific Life, and Pacific Life will send a written confirmation
of all transfers requested by telephone within 7 days of the transfer. Upon
request in writing for telephone authorization, you authorize Pacific Life to
accept and act upon telephonic instructions for transfers involving your
Contract, and agree that neither Pacific Life, any of Pacific Life's
affiliates, nor Pacific Select Fund, nor any of the directors, trustees,
officers, employees or agents, will be liable for any loss, damages, cost, or
expense (including attorneys fees) arising out of any requests effected in
accordance with the telephone authorization and believed by Pacific Life to be
genuine, provided that Pacific Life has complied with its procedures. As a
result of this policy on telephone requests, you will bear the risk of loss
arising from the telephone transfer privileges.

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<PAGE>

PERFORMANCE INFORMATION

Performance information for the Variable Accounts, including the yield and
effective yield of the Variable Account investing in the Fund's Money Market
Portfolio ("Money Market Variable Account"), the yield of the remaining
Variable Accounts, and the total return of all Variable Accounts and historical
performance information for the Fund may appear in advertisements, reports, and
promotional literature to Owners.

Quotations of average annual total return for any Variable Account will be
expressed in terms of the average annual compounded rate of return on a
hypothetical investment in a Contract over a period of one, five, and ten years
(or, if less, up to the life of the Variable Account), and will reflect the
deduction of the applicable contingent deferred sales charge, the
administrative charge, the maintenance fee, the mortality and expense risk
charge, and the operating expenses of the Separate Account as shown in "Annual
Separate Account and Fund Expenses." Quotations of total return may
simultaneously be shown that do not take into account certain contractual
charges such as the contingent deferred sales charge, the administrative
charge, and the maintenance fee.

Performance information for any Variable Account reflects only the
performance of a hypothetical Contract under which Accumulated Value is
allocated to a Variable Account during a particular time period on which the
calculations are based. Performance information should be considered in light
of the investment objectives and policies, characteristics, and quality of the
Portfolio of the Fund in which the Variable Account invests, and the market
conditions during the given time period, and should not be considered as a
representation of what may be achieved in the future. For a description of the
methods used to determine yield and total return and of the usage of
performance and other related information for the Variable Accounts, see the
Statement of Additional Information.

Pacific Life may also provide you with reports on its rating as an insurance
company and on its claims-paying ability that are produced by rating agencies
and organizations.

SALES COMMISSIONS

Pacific Life and PMD pay sales commission directly to broker-dealers and
other expenses associated with premiums paid under the Contracts. Broker-
dealers may receive aggregate commission of up to 4.50% of aggregate premium
payments, and will be paid a persistency trail commission which will take into
account, among other things, the length of time premium payments have been held
under a Contract and Contract Values. A trail commission is not anticipated to
exceed 0.30%, on an annual basis, of the Contract Value considered in
connection with the trail commission. Pacific Life and PMD may also pay
override payments, expense allowances, bonuses, wholesaler fees and training
allowances. Registered representatives earn commissions from the broker-dealers
with which they are affiliated and such arrangements may vary. In addition,
registered representatives who meet specified production levels may qualify,
under sales incentive programs, to receive non-cash compensation such as
expense-paid trips, expense-paid educational seminars, and merchandise.

REGISTRATION STATEMENT

A Registration Statement under the 1933 Act has been filed with the SEC
relating to the Contracts described in this Prospectus. This Prospectus does
not include all the information included in the Registration Statement, certain
portions of which, including the Statement of Additional Information, have been
omitted pursuant to the rules and regulations of the SEC. The omitted
information may be obtained at the SEC's principal office in Washington, D.C.,
upon payment of the SEC's prescribed fees.

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FINANCIAL STATEMENTS

Audited financial statements of the Pacific Corinthian Variable Separate
Account as of December 31, 1996 and for each of the two years then ended, and
unaudited semi-annual financial statements as of June 30, 1997, are
incorporated by reference in the SAI from the Annual Report of the Pacific
Corinthian Variable Separate Account dated as of December 31, 1996 and the
Semi-Annual Report of the Pacific Corinthian Variable Separate Account dated as
of June 30, 1997, respectively. Audited consolidated financial statements of
Pacific Mutual Life as of December 31, 1996 and 1995, and for the three years
ended December 31, 1996, are contained in the SAI.

STATEMENT OF ADDITIONAL INFORMATION

The following list shows the contents of the Statement of Additional
Information:

Introduction
General Information and History
Services
Performance Information
Financial Statements
Independent Auditors' Report
Financial Statements of Pacific Mutual Life Insurance Company

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APPENDIX

THE FIXED ACCOUNT

Because of exemptive and exclusionary provisions, interests in the General
Account have not been registered under the Securities Act of 1933 ("1933 Act"),
nor is the General Account registered as an investment company under the 1940
Act. Accordingly, neither the General Account nor any interests therein are
generally subject to the provisions of the 1933 or 1940 Act. Disclosures
regarding the Fixed Account and the General Account, however, may be subject to
certain generally applicable provisions of the federal securities laws relating
to the accuracy and completeness of statements made in prospectuses. The
Company has been advised that the staff of the Securities and Exchange
Commission has not reviewed disclosure relating to the Fixed Account.

Accumulation Values allocated to the Fixed Account are combined in the
General Account of the Company with all the general assets of the Company and
are invested in those assets chosen by the Company and allowed by applicable
law. The Company allocates the investment income of the General Account to the
contracts covered by the General Account in the amounts guaranteed in such
contracts. Immediately prior to the Annuity Date, a Contract's current
Accumulation Value of each Variable Account, less any Contingent Deferred Sales
Charge or premium taxes, if applicable, is transferred to the General Account,
and becomes a portion of assets of the General Account. Immediately prior to
the Annuity Date, the Accumulation Value of the Fixed Account is also subject
to a reduction for any Contingent Deferred Sales Charge or premium taxes, if
applicable.

Under the Fixed Account option, the Company allocates payment to its General
Account, guarantees the amounts, and pays a fixed interest rate. The guaranteed
minimum interest credited to the Fixed Account will be at the effective rate of
4% per year, compounded daily. The Company may declare excess interest to the
Fixed Account at its sole discretion. Excess interest, if any, on the Fixed
Account is guaranteed for the first Contract year. Thereafter, any excess
interest will be declared on January 1 of each year and guaranteed for one
year.

The Company guarantees that, at any time, the Contract Owner's Fixed Account
Accumulation Value will not be less than the premium payments and transfers
allocated to the Fixed Account less reductions for Contract Maintenance
Charges, less transfers and reductions due to withdrawals, including any
Contingent Deferred Sales Charge, plus interest at the effective rate of 4% per
year, compounded daily.

Accumulated Value that was allocated or transferred to the Fixed Account
during one year may be credited with a different rate of excess interest than
amounts allocated or transferred to the Fixed Account in another year.
Therefore, at any given time, various portions of your Accumulated Value
allocated to the Fixed Account may be earning interest at different rates, of
excess interest depending upon the year during which such portions were
originally allocated or transferred to the Fixed Account. We bear the
investment risk for the Accumulated Value allocated to the Fixed Account and
for paying interest at the Guaranteed or excess rates, as applicable, on
amounts allocated to the Fixed Account.

Premium payments may not be allocated to the Fixed Account if the Fixed
Account Accumulation Value would be less than $1,000 (beginning in the second
Contract Year for Qualified Plans). Only one transfer to the Fixed Account from
a Variable Account, or from the Fixed Account to a Variable Account is
permitted during a Contract Year. The Company reserves the right to charge a
fee on transfers. No partial transfer or partial withdrawal may be made if the
remaining Accumulation Value would be less than $1,000 in the Fixed Account.
Partial and full withdrawals from the Fixed Account may result in a Contingent
Deferred Sales Charge being imposed. (See "Contingent Deferred Sales Charge").

For purposes of determining the interest rates to be credited on remaining
balances in the Fixed Account, the source of each withdrawal or transfer from
the Fixed Account is determined on a first-in,

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<PAGE>

first-out basis as follows: (1) the interest attributable to the earliest
premium payment or transfer applied to the Fixed Account; (2) the earliest
premium payment or transfer applied to the Fixed Account; and (3) the interest
attributable to and principal on each succeeding premium payment or transfer
applied to the Fixed Account in the order the premium payment or transfer was
received.

Unless the request for partial withdrawal specifies otherwise, withdrawals
will be made from each Variable Account in the same proportion that the
Contract Value in each Variable Account is allocated, with remaining amounts
withdrawn from the Fixed Account.

Contract Owners have no voting rights in the Separate Account with respect to
Fixed Account Accumulation Values.

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PROSPECTUS

Pacific Corinthian Variable Separate Account of
Pacific Life Insurance Company
700 Newport Center Drive
Newport Beach, California 92660, Telephone: (800) 735-5535

Annuity Service Office:
- ----------------------
P.O. Box 9000
Newport Beach, California 92658-9030

Principal Underwriter:
Pacific Mutual Distributors, Inc.
Member: NASD/SIPC
700 Newport Center Drive
P.O. Box 9000
Newport Beach, California 92660

Counsel:
- -------
Dechert Price & Rhoads
1500 K Street, N.W.
Suite 500
Washington, D.C. 20005

Prospectus dated , 1997

[LOGO OF PACIFIC CORINTHIAN]

<PAGE>

[LOGO OF PACIFIC CORINTHIAN}

Distributed by:

[LOGO OF PACIFIC MUTUAL DISTRIBUTORS, INC.]

Pacific Mutual Distributors, Inc.
Member NASD & SIPC
700 NEWPORT CENTER DRIVE, NB-3
NEWPORT BEACH, CA 92660
1-800-800-7681

FORM 15-20386-00
<PAGE>

PACIFIC CORINTHIAN VARIABLE ANNUITY

STATEMENT OF ADDITIONAL INFORMATION

, 1997

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

INDIVIDUAL FLEXIBLE PREMIUM DEFERRED ANNUITY
AND VARIABLE ACCUMULATION CONTRACT

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

ADMINISTERED BY
PACIFIC CORINTHIAN VARIABLE SEPARATE ACCOUNT OF
PACIFIC LIFE INSURANCE COMPANY

ADMINISTRATIVE OFFICES:
700 NEWPORT CENTER DRIVE
NEWPORT BEACH, CALIFORNIA 92660
TELEPHONE: 1-800-735-5535

ANNUITY SERVICE OFFICE MAILING ADDRESS:
P.O. BOX 9000
NEWPORT BEACH, CALIFORNIA 92658-9030

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

This Statement of Additional Information ("SAI") is intended to supplement
the information provided to investors in the Prospectus dated October 31,
1997, of Pacific Corinthian Variable Separate Account of Pacific Life
Insurance Company (the "Separate Account") and has been filed with the
Securities and Exchange Commission as part of the Separate Account's
Registration Statement. Investors should note, however, that this SAI is not
itself a prospectus and should be read carefully in conjunction with the
Separate Account's Prospectus and retained for future reference. A copy of the
Separate Account's Prospectus may be obtained from Pacific Life Insurance
Company.

The contents of this SAI are incorporated by reference in the Prospectus in
their entirety.

<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Introduction............................................................... 2
General Information and History............................................ 2
Services................................................................... 2
Performance Information.................................................... 3
Financial Statements....................................................... 5
Independent Auditors' Report............................................... 6
Financial Statements of Pacific Mutual Life Insurance Company.............. 7
</TABLE>

1
<PAGE>

INTRODUCTION

The Statement of Additional Information is designed to provide information
in addition to the information provided in the Prospectus. The information
contained herein is intended solely for investors who have read the Prospectus
and are interested in additional information regarding certain aspects of the
Separate Account's policies and operations. Captions in this Statement of
Additional Information generally correspond to like captions in the
Prospectus.

GENERAL INFORMATION AND HISTORY

For a description of the Individual Flexible Premium Deferred Annuity and
Variable Accumulation Contract (the "Contract"), Pacific Life Insurance
Company and its ownership structure, and the Pacific Corinthian Variable
Separate Account of Pacific Life Insurance Company (the "Separate Account"),
see the Prospectus. This SAI contains information that supplements the
information in the Prospectus. Defined terms used in this SAI have the same
meaning as set forth in the Prospectus.

SERVICES

DISTRIBUTION AGREEMENT

Pursuant to a Distribution Agreement between the Company on behalf of itself
and the Separate Account and Pacific Mutual Distributors, Inc. ("PMD"), PMD
acts as Distributor of the Contract. PMD is an indirect, wholly-owned
subsidiary of Pacific Life. Smith Barney, Inc. (or its predecessors), the
previous distributor, was paid or accrued commissions for 1996, 1995 and 1994
in the amount of $7,752,675, $6,392,097, and $6,089,139, respectively.

CUSTODIAN

The Company, subject to applicable laws and regulations, is responsible for
custody of the securities of the Separate Account and is responsible for their
safekeeping.

2
<PAGE>

PERFORMANCE INFORMATION

Performance information for the Variable Accounts, including the yield and
effective yield of the Variable Account investing in the Fund's Money Market
Portfolio ("Money Market Variable Account"), the yield of the remaining
Variable Accounts, and the total return of all Variable Accounts, and
historical performance information for the Pacific Select Fund may appear in
advertisements, reports, and promotional literature to Owners.

Current yield for the Money Market Variable Account will be based on the
change in the value of a hypothetical investment (exclusive of capital
charges) over a particular 7-day period, less a pro-rata share of the annual
Contract Maintenance Charge accrued over that period (the "base period"), and
stated as a percentage of the investment at the start of the base period (the
"base period return"). The base period return is then annualized by
multiplying by 365/7, with the resulting yield figures carried to at least the
nearest hundredth of one percent. The current yield for the seven day period
ended June 30, 1997 was 3.83%. For the same period, the effective yield was
3.91%. Calculation of "effective yield" begins with the same "base period
return" used in the calculation of yield, which is then annualized to reflect
weekly compounding pursuant to the following formula:

Effective Yield = [(Base Period Return + 1) (To the power of 365/7)] - 1

Quotations of yield for the remaining Variable Accounts will be based on all
investment income per Accumulation Unit earned during a particular 30-day
period, less expenses accrued during the period ("net investment income"), and
will be computed by dividing net investment income by the value of the
Accumulation Unit on the last day of the period, according to the following
formula:

YIELD = 2[(a-b + 1)/6/ - 1]
---
cd

where
a= net investment income earned during the period by the
Portfolio attributable to shares owned by the Variable
Account,
b= expenses accrued for the period (net of reimbursements),
c= the average daily number of Accumulation Units outstanding
during the period that were entitled to receive dividends,
and
d= the maximum offering price per Accumulation Unit on the last
day of the period.

Quotations of average annual total return for any Variable Account will be
expressed in terms of the average annual compounded rate of return of a
hypothetical investment in a Contract over a period of one, five, and ten
years (or, if less, up to the life of the Variable Account), calculated
pursuant to the following formula: P(1 + T)/n/ = ERV (where P = a hypothetical
initial payment of $1,000, T = the average annual total return, n = the number
of years, and ERV = the ending redeemable value of a hypothetical $1,000
payment made at the beginning of the period). All total return figures reflect
the deduction of the applicable contingent deferred sales charge, the
administrative charge, the maintenance fee, the mortality and expense risk
charge, and the operating expenses of the Separate Account as shown in the
Prospectus under "Annual Separate Account and Fund Expenses." Performance
information for Variable Accounts may also be advertised based on the
historical performance of the Fund Portfolio underlying the Variable Account
for periods beginning prior to the date each Variable Account commenced
operations. Any such performance calculation will be based on the assumption
that the Variable Account corresponding to the applicable Fund Portfolio was
in existence throughout the stated period and that the contractual charges and
expenses of the Variable Account during that period were equal to those
currently assessed under the Contract. Quotations of total return may
simultaneously be shown for the same or other periods that do not take into
account certain contractual charges such as the contingent deferred sales
charge, the administrative charge, and the maintenance fee.

Performance information for a Variable Account may be compared, in reports
and promotional literature, to the Standard & Poor's 500 Stock Index ("S&P
500"), the Dow Jones Industrial Average ("DJIA"), the Donoghue Money Market
Institutional Averages, the Lehman Brothers Government Corporate Index, the
Lehman Brothers Government Bond Index, the Salomon Brothers High Yield Bond
Indexes, the Morgan Stanley Capital International's EAFE Index or other
indices that measure performance of a pertinent group of securities so that
investors may compare a Variable Account's results with those of a group of
securities widely regarded by investors as representative of the securities
markets in general or representative of a particular type of security.

3
<PAGE>

Performance information may also be compared to (i) other groups of variable
annuity separate accounts or other investment products tracked by Lipper
Analytical Services, a widely used independent research firm which ranks
mutual funds and other investment companies by overall performance, investment
objectives, and assets, or tracked by other services, companies, publications
or persons who rank such investment companies on overall performance or other
criteria; and (ii) the Consumer Price Index (measure for inflation) to assess
the real rate of return from an investment in the Contract. Unmanaged indices
may assume the reinvestment of dividends but generally do not reflect
deductions for administrative and management costs and expenses.

Performance information for any Variable Account reflects only the
performance of a hypothetical Contract under which an Owner's Accumulated
Value is allocated to a Variable Account during a particular time period on
which the calculations are based. Performance information should be considered
in light of the investment objectives and policies, characteristics and
quality of the Portfolio of the Fund in which the Variable Account invests,
and the market conditions during the given time period, and should not be
considered as a representation of what may be achieved in the future.

Reports and promotional literature may also contain other information
including (i) the ranking of any Variable Account derived from rankings of
variable annuity separate accounts or other investment products tracked by
Lipper Analytical Services or by other rating services, companies,
publications, or other persons who rank separate accounts or other investment
products on overall performance or other criteria, (ii) the effect of tax-
deferred compounding on a Variable Account's investment returns, or returns in
general, which may be illustrated by graphs, charts, or otherwise, and which
may include a comparison, at various points in time, of the return from an
investment in a Contract (or returns in general) on a tax-deferred basis
(assuming one or more tax rates) with the return on a taxable basis, and (iii)
our rating or a rating of our claims paying ability as determined by firms
that analyze and rate insurance companies and by nationally recognized
statistical rating organizations.

The following table presents the annualized total return based on
Accumulation Values and Full Withdrawal Values for each Variable Account of
Pacific Corinthian Variable Separate Account for the one year period ended
June 30, 1997 and for the period from each such Variable Account's
commencement of investment in the Pacific Select Fund through June 30, 1997.
The table is based on a Contract for which the average initial premium is
approximately $25,000. The Accumulated Value (AV) returns reflect all Separate
Account and current Contract charges except the withdrawal charge. The Full
Withdrawal Value (FWV) returns reflect all Separate Account and current
Contract charges including the withdrawal charge that would have been deducted
if the contract had been surrendered on June 30, 1997. The total returns do
not reflect any deduction of premium taxes. The withdrawal charges range from
a maximum of 5% on premiums age 1, to 1% on premiums Age 5 and over. The
information presented also includes data representing unmanaged market
indices. Returns assume 100% of the premium payment was allocated to the
Variable Account shown.

4
<PAGE>

THE RESULTS SHOWN IN THIS SECTION ARE NOT AN ESTIMATE OR GUARANTEE OF FUTURE
INVESTMENT PERFORMANCE.

ANNUALIZED RATES OF RETURN FOR PERIODS ENDED JUNE 30, 1997
ALL NUMBERS ARE EXPRESSED AS A PERCENTAGE

<TABLE>
<CAPTION>
BEGINNING
1 YEAR DATE*
-------------- ----------------
VARIABLE ACCOUNTS AV FWV AV FWV
- ----------------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
Variable Account I -- Money Market.............. 3.77% (0.03%) 3.91% 2.76%
Variable Account II -- Equity................... 15.76% 11.76% 25.40% 24.52%
Variable Account III -- Bond and Income......... 7.96% 4.07% 11.80% 10.75%
Variable Account IV -- Government Securities.... 6.07% 2.25% 8.00% 6.90%
Variable Account VII -- Equity Income........... 29.16% 25.16% 26.23% 25.35%
Variable Account IX -- Multi-Strategy........... 18.31% 14.31% 17.83% 16.86%
Variable Account X -- Managed Bond.............. 7.12% 3.26% 8.65% 7.53%
Variable Account XI -- High Yield Bond.......... 12.74% 8.74% 12.18% 11.10%
Variable Account XII -- Equity Index............ 32.88% 28.88% 30.81% 29.96%
Variable Account XIII -- International.......... 24.28% 20.28% 18.14% 17.16%
Variable Account XIV -- Growth LT............... 9.68% 5.73% 20.87% 19.92%
<CAPTION>
MAJOR INDICES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
EAFE............................................ 12.83 9.12 12.83 6.58
First Boston High Yield Bond.................... 14.67 12.36 11.60 11.62
LB Aggregate.................................... 8.16 8.53 7.12 8.82
LBG/Bond........................................ 7.40 7.94 6.97 8.47
LBG/C Bond...................................... 7.75 8.34 7.23 8.72
LBG/C LT Bond................................... 9.20 10.56 9.04 9.99
Russell 2500.................................... 20.10 22.31 18.61 12.75
Russell 2000.................................... 16.33 20.06 17.87 11.14
S & P 500....................................... 34.70 28.86 19.78 14.66
</TABLE>
- --------
* Prior to January 1, 1995, the Variable Accounts within Pacific Corinthian
Variable Annuity's Separate Account invested in corresponding Series of
Pacific Corinthian Variable Fund. On December 31, 1994, the Series' assets
of Pacific Corinthian Variable Fund were acquired by Pacific Select Fund for
shares of Pacific Select Fund. Pacific Select Fund performance figures are
the relevant basis for the returns in 1995 and going forward. Returns are
based on the following beginning dates for each Variable Account: Money
Market 1/3/95; Managed Bond 1/20/95; Government Securities 1/3/95; High
Yield Bond 2/3/95; Growth LT 1/20/95; Equity Income 1/3/95; Equity 1/3/95;
Bond and Income 1/3/95; Multi-Strategy 1/3/95; Equity Index 1/20/95; and
International 1/19/95. Performance of the Equity Portfolio and the Bond and
Income Portfolio is based on the performance of predecessor portfolios of
Pacific Corinthian Variable Fund, which began their first full year of
operations 1/1/84 and were acquired by the Fund on 12/31/94. Effective June
1, 1997 Morgan Stanley Asset Management Inc. became the Portfolio Manager of
the International Portfolio.

The rates of return and hypothetical values shown above represent past
performance and neither guarantee nor predict future investment results.
Actual rates of return and values will fluctuate. The value of accumulation
units, when redeemed, may be more or less than the original costs. Investment
in the Money Market Variable Account is neither insured nor guaranteed by the
U.S. Government.

In order to help you understand how investment performance can affect your
Variable Account Accumulated Value, we are including performance information
based on the historical performance of the Portfolios of the Fund. The
information presented also includes data representing unmanaged market
indices.

FINANCIAL STATEMENTS

The financial statements of Pacific Mutual Life Insurance Company are
presented in this Statement of Additional Information. The audited financial
statements of the Pacific Corinthian Variable Separate Account as of December
31, 1996, and for each of the two years then ended, and the unaudited semi-
annual financial statements of the Pacific Corinthian Variable Separate
Account as of June 30, 1997, are incorporated herein by reference from the
Annual Report of the Pacific Corinthian Variable Separate Account dated as of
December 31, 1996, and the Semi-Annual Report of the Pacific Corinthian
Variable Separate Account dated as of June 30, 1997, respectively.

5
<PAGE>

INDEPENDENT AUDITORS' REPORT

Pacific Mutual Life Insurance Company and Subsidiaries:

We have audited the accompanying consolidated statements of financial
position of Pacific Mutual Life Insurance Company and subsidiaries (the
"Company") as of December 31, 1996 and 1995, and the related
consolidated statements of operations and equity and cash flows for
each of the three years in the period ended December 31, 1996. These
consolidated 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. 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 Pacific Mutual Life
Insurance Company and subsidiaries as of December 31, 1996 and 1995,
and the consolidated results of their operations and their cash flows
for each of the three years in the period ended December 31, 1996 in
conformity with generally accepted accounting principles.

As discussed in Note 1 to the consolidated financial statements, the
Company has adopted all applicable generally accepted accounting
principles relating to mutual life insurance companies for all periods
presented.

DELOITTE & TOUCHE LLP

Costa Mesa, California
February 22, 1997

6
<PAGE>

FINANCIAL STATEMENTS OF PACIFIC MUTUAL LIFE INSURANCE COMPANY

Pacific Mutual Life Insurance Company and Subsidiaries

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

<TABLE>
<CAPTION>
December 31,
1996 1995
- -------------------------------------------------------------------------------
(In Millions)
<S> <C> <C>
ASSETS
Investments:
Securities available for sale at fair value:
Fixed maturity securities $12,193.8 $11,359.2
Equity securities 260.8 218.5
Short-term investments 66.1 103.3
Mortgage loans 1,477.3 1,346.2
Real estate 280.0 288.6
Policy loans 3,131.8 2,793.3
Other investments 208.0 214.6
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS 17,617.8 16,323.7
Cash and cash equivalents 109.0 286.1
Deferred policy acquisition costs 531.5 391.1
Accrued investment income 202.5 198.8
Other assets 462.4 416.5
Separate account assets 8,142.1 5,686.9
- -------------------------------------------------------------------------------
TOTAL ASSETS $27,065.3 $23,303.1
- -------------------------------------------------------------------------------
LIABILITIES AND EQUITY
Liabilities:
Universal life, annuity and other investment contract de-
posits $13,877.4 $12,719.4
Future policy benefits 2,442.0 2,378.9
Policyholders' dividends payable 64.5 65.3
Borrowings 120.5 83.0
Surplus notes 149.6 149.6
Other liabilities 572.0 586.6
Separate account liabilities 8,142.1 5,686.9
- -------------------------------------------------------------------------------
Total Liabilities 25,368.1 21,669.7
- -------------------------------------------------------------------------------
Commitments and contingencies
Equity:
Retained earnings 1,318.0 1,151.4
Unrealized gain on available for sale securities, net 379.2 482.0
- -------------------------------------------------------------------------------
Total Equity 1,697.2 1,633.4
- -------------------------------------------------------------------------------
TOTAL LIABILITIES AND EQUITY $27,065.3 $23,303.1
- -------------------------------------------------------------------------------
</TABLE>

See Notes to Consolidated Financial Statements

7
<PAGE>

Pacific Mutual Life Insurance Company and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS AND EQUITY

<TABLE>
<CAPTION>
Years Ended December 31,
1996 1995 1994
- -------------------------------------------------------------------------------
(In Millions)
<S> <C> <C> <C>
REVENUES
Insurance premiums $ 465.4 $ 458.5 $ 455.9
Policy fees from universal life, annuity and
other investment contract deposits 348.6 309.0 280.0
Net investment income 1,063.0 1,022.3 933.6
Net realized capital gains (losses) 68.3 77.6 (2.1)
Investment management fees 14.1 12.9 144.6
Other income 188.6 139.4 203.6
- -------------------------------------------------------------------------------
TOTAL REVENUES 2,148.0 2,019.7 2,015.6
- -------------------------------------------------------------------------------
BENEFITS AND EXPENSES
Interest credited to universal life, annuity and
other investment contract deposits 653.2 654.2 638.6
Policy benefits paid or provided 664.7 668.5 590.2
Commission expenses 199.8 167.8 139.9
Operating expenses 350.0 308.3 433.8
- -------------------------------------------------------------------------------
TOTAL BENEFITS AND EXPENSES 1,867.7 1,798.8 1,802.5
- -------------------------------------------------------------------------------
INCOME BEFORE PROVISION FOR INCOME TAXES 280.3 220.9 213.1
Provision for income taxes 113.7 86.1 111.7
- -------------------------------------------------------------------------------
NET INCOME 166.6 134.8 101.4
Equity, beginning of year 1,633.4 809.3 942.8
Change in unrealized gain (loss) on available for
sale securities, net (102.8) 689.3 (234.9)
- -------------------------------------------------------------------------------
EQUITY, END OF YEAR $1,697.2 $1,633.4 $ 809.3
- -------------------------------------------------------------------------------
</TABLE>

See Notes to Consolidated Financial Statements

8
<PAGE>

Pacific Mutual Life Insurance Company and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Years Ended December 31,
1996 1995 1994
- --------------------------------------------------------------------------------
(In Millions)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 166.6 $ 134.8 $ 101.4
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization (1.4) (30.4) (28.3)
Deferred income taxes (49.7) (30.3) 26.2
Net realized capital (gains) losses (68.3) (77.6) 2.1
Deferred policy acquisition costs (140.4) 48.8 (126.5)
Interest credited to universal life, annuity
and other investment contract deposits 653.2 654.2 638.6
Change in accrued investment income (3.7) (16.1) 28.5
Change in future policy benefits 63.1 89.3 48.7
Change in policyholders' dividends payable (0.8) (0.5) (0.2)
Change in other assets and liabilities 169.7 172.9 (51.2)
- --------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 788.3 945.1 639.3
- --------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Available for sale securities:
Purchases (4,525.0) (3,001.3) (4,376.9)
Sales 2,511.0 1,940.3 2,690.3
Maturities and repayments 1,184.7 926.9 1,220.4
Held to maturity securities:
Purchases (181.9) (415.0)
Sales 62.3
Maturities and repayments 111.0 202.2
Repayments of mortgage loans 220.4 267.7 399.1
Proceeds from sales of mortgage loans and real
estate 14.5 27.4 52.8
Purchases of mortgage loans and real estate (414.3) (244.7) (237.7)
Distributions from partnerships 78.8 49.0
Change in policy loans (338.5) (389.8) (349.7)
Change in short-term investments 37.2 (66.7) 129.0
Other investing activity, net (120.1) (121.1) 15.7
- --------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES (1,351.3) (620.9) (669.8)
- --------------------------------------------------------------------------------
</TABLE>
(Continued)

See Notes to Consolidated Financial Statements

9
<PAGE>

Pacific Mutual Life Insurance Company and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Years Ended December 31,
(Continued) 1996 1995 1994
- -------------------------------------------------------------------------------
(In Millions)
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Policyholder account balances:
Deposits $ 2,105.0 $ 1,437.9 $ 1,355.0
Withdrawals (1,756.6) (1,774.2) (1,376.0)
Net change in borrowings 37.5 (43.8) 36.9
- -------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED IN) FINANCING AC-
TIVITIES 385.9 (380.1) 15.9
- -------------------------------------------------------------------------------
Net change in cash and cash equivalents (177.1) (55.9) (14.6)
Cash and cash equivalents, beginning of year 286.1 342.0 356.6
- -------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF YEAR $ 109.0 $ 286.1 $ 342.0
- -------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMA-
TION
Federal income taxes paid $ 185.9 $ 96.9 $ 82.8
Interest paid $ 27.2 $ 23.3 $ 24.1
- -------------------------------------------------------------------------------
</TABLE>

See Notes to Consolidated Financial Statements

10
<PAGE>

Pacific Mutual Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

Pacific Mutual Life Insurance Company ("Pacific Mutual Life") was
established in 1868 and is organized under the laws of the State of
California as a mutual life insurance company. Pacific Mutual Life
conducts business in every state except New York.

Pacific Mutual Life and its subsidiaries and affiliates have primary
business operations which consist of life insurance, annuities, pension
products, group employee benefits and investment management and advisory
services. These primary business operations provide a broad range of life
insurance, accumulation and investment products for individuals and
businesses and offer a range of investment products to institutions and
pension plans. Additionally, through its major subsidiaries and
affiliates, Pacific Mutual Life provides a variety of group employee
benefits, as well as investment management and advisory services.

BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements of Pacific Mutual Life
Insurance Company and subsidiaries (the "Company") have been prepared in
accordance with generally accepted accounting principles ("GAAP") and
include the accounts of Pacific Mutual Life and its wholly-owned
insurance subsidiaries, Pacific Corinthian Life Insurance Company ("PCL"-
Note 3), PM Group Life Insurance Company ("PM Group") and World-Wide
Holdings Limited, and its noninsurance subsidiaries, Pacific Financial
Asset Management Corporation ("PFAMCo"), Pacific Mutual Distributors,
Inc. ("PMD"), Pacific Mutual Realty Finance, Inc., Pacific Mezzanine
Associates, L.L.C. and MC Associates, LLC. All significant intercompany
transactions and balances have been eliminated. Pacific Mutual Life
prepares its regulatory financial statements based on accounting
practices prescribed or permitted by the Insurance Department of the
State of California. These consolidated financial statements differ from
those followed in reports to regulatory authorities (Note 2).

On December 21, 1995, Pacific Mutual Life completed a subsidiary
reorganization in which PFAMCo became a direct, wholly-owned subsidiary
of Pacific Mutual Life. Prior to the reorganization PFAMCo was a wholly-
owned, second-tier subsidiary of Pacific Mutual Life. The intermediate
company, Pacific Financial Holding Company ("PFHC"), and certain of its
assets and liabilities were merged into PFAMCo in connection with this
reorganization. The remaining assets were merged into Pacific Mutual Life
which consisted of investments in subsidiaries as follows: PFAMCo, PMD
and PM Group.

ACCOUNTING PRONOUNCEMENTS ADOPTED

Pacific Mutual Life has adopted the provisions of Statement of Financial
Accounting Standards ("SFAS") No. 120, "Accounting and Reporting by
Mutual Life Insurance Enterprises and by Insurance Enterprises for
Certain Long-Duration Participating Contracts," and Interpretation No.
40, "Applicability of Generally Accepted Accounting Principles to Mutual
Life Insurance and Other Enterprises" (the "Interpretation") issued by
the Financial Accounting Standards Board. SFAS No. 120 and the
Interpretation require that mutual life insurance companies and their
insurance subsidiaries adopt all applicable authoritative GAAP
pronouncements in any general purpose financial statements that they may
issue. This differs from prior years when Pacific Mutual Life issued its
regulatory financial statements as general purpose financial statements.
The accompanying consolidated financial statements for 1996, 1995 and
1994 reflect the effects of implementing SFAS No. 120 and the
Interpretation.

On January 1, 1996, the Company adopted SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of." SFAS No. 121 requires that long-lived assets, certain identifiable
intangibles and goodwill related to those assets to be held and used
shall be assessed for recoverability if certain events or changes in
circumstances are present. An impairment loss shall be recognized if the
carrying amount of

11
<PAGE>

Pacific Mutual Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

the asset exceeds the fair value of the asset. Adoption of this
accounting standard did not have a significant impact on the consolidated
financial position or consolidated results of operations of the Company.

On January 1, 1996, the Company also adopted SFAS No. 122, "Accounting
for Mortgage Servicing Rights." SFAS No. 122 requires that rights
acquired to service mortgage loans for others be recognized separately
from the mortgage loan asset. SFAS No. 122 also requires that capitalized
mortgage servicing rights be assessed for impairment based on the fair
value of those rights and any impairment should be recognized through a
valuation allowance. Adoption of this accounting standard did not have a
significant impact on the consolidated financial position or consolidated
results of operations of the Company.

NEW ACCOUNTING PRONOUNCEMENTS

In June 1996, the Financial Accounting Standards Board issued SFAS No.
125, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities," as amended by SFAS No. 127, "Deferral of
the Effective Date of Certain Provisions of FASB Statement No. 125." SFAS
No. 125 is effective for transfers and servicing of financial assets and
extinguishments of liabilities occurring after December 31, 1996. This
statement provides consistent accounting standards for securitizations
and other transfers of financial assets, determines when financial assets
(liabilities) should be considered sold (settled) and removed from the
statement of financial position, and determines when related revenues and
expenses should be recognized. The Company currently plans to adopt SFAS
No. 125 beginning on January 1, 1997. The adoption is not expected to
have a significant impact on the consolidated financial position or
consolidated results of operations of the Company.

INVESTMENTS

Fixed maturity securities and equity securities are reported at fair
value, with unrealized gains and losses, net of deferred income tax and
adjustments to related deferred policy acquisition costs, included as a
separate component of equity on the accompanying consolidated statements
of financial position. Trading securities, which are included in short-
term investments, are reported at fair value with unrealized gains and
losses included in net realized capital gains (losses) on the
accompanying consolidated statements of operations.

For mortgage-backed securities included in fixed maturity securities the
Company recognizes income using a constant effective yield based on
anticipated prepayments and the estimated economic life of the
securities. When estimates of prepayments change, the effective yield is
recalculated to reflect actual payments to date and anticipated future
payments. The net investment in the securities is adjusted to the amount
that would have existed had the new effective yield been applied since
the acquisition of the securities. This adjustment is reflected in net
investment income.

In the first and second quarter of 1995, Pacific Mutual Life sold two
securities from the held to maturity category. The amortized cost of the
securities was $62.3 million and a net after tax loss of $0.7 million was
realized on the sales. The securities were sold due to the significant
deterioration of the issuer's creditworthiness.

Beginning with the third quarter of 1995, Pacific Mutual Life transferred
approximately $1.5 billion of securities from the held to maturity
category to the available for sale category. This amount represented the
amortized cost of the securities at the date of transfer. The fair value
of those securities was approximately $1.6 billion, resulting in a net
after tax unrealized gain of $52.5 million, which was reflected as a
direct increase to equity. The change in classification was a result of a
change in management's intent with respect to these securities. In order
to have the flexibility to respond to changes in interest rates and to
take advantage of changes in the availability of and the yield on
alternative investments, management has determined that the
reclassification of these securities as available for sale was
appropriate.

12
<PAGE>

Pacific Mutual Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Realized gains and losses on investment transactions are determined on a
specific identification basis and are included in revenues.

Short-term investments are carried at fair value and include all trading
securities.

Derivative financial instruments are carried at fair value. Unrealized
gains and losses of derivatives used to hedge securities classified as
available for sale are reflected in a separate component of equity,
similar to the accounting of the underlying hedged assets. Realized gains
and losses on derivatives used for hedging are deferred and amortized
over the average life of the related hedged assets or insurance
liabilities. Unrealized gains and losses of other derivatives are
reflected in operations.

Mortgage loans and policy loans are stated at unpaid principal balances.

Real estate is carried at depreciated cost, or for real estate acquired
in satisfaction of debt, estimated fair value less estimated selling
costs at the date of acquisition if lower than the related unpaid
balance.

On November 15, 1994, PFAMCo and five of its subsidiaries (Pacific
Investment Management Company and subsidiaries, Parametric Portfolio
Associates, Inc., Cadence Capital Management Corporation, NFJ Investment
Group, Inc. and Blairlogie Capital Management Limited) entered into an
agreement and plan of consolidation with Thomson Advisory Group L.P., a
Delaware limited partnership with publicly traded units, to merge into a
newly capitalized partnership named PIMCO Advisors L.P. ("PIMCO
Advisors"). Collectively, PFAMCo and various of its subsidiaries
beneficially own approximately 42% of the outstanding General and Limited
Partner units of PIMCO Advisors as of December 31, 1996 and 1995. This
investment, which is included in other investments on the accompanying
consolidated statements of financial position, is accounted for on the
equity method.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include all liquid debt instruments with an
original maturity of three months or less.

DEFERRED POLICY ACQUISITION COSTS

The costs of acquiring new insurance business, principally commissions,
medical examinations, underwriting, policy issue and other expenses, all
of which vary with and are primarily related to the production of new
business, have been deferred. For universal life, annuity and other
investment contract products, such costs are generally amortized in
proportion to the present value of expected gross profits using the
assumed crediting rate. Adjustments are reflected in earnings or equity
in the period the Company experiences deviations in gross profit
assumptions. Adjustments directly affecting equity result from experience
deviations due to changes in unrealized gains and losses in investments
classified as available for sale. For life insurance products, such costs
are being amortized over the premium-paying period of the related
policies in proportion to premium revenues recognized, using assumptions
consistent with those used in computing policy reserves. For the years
ended December 31, 1996, 1995 and 1994, net amortization of deferred
policy acquisition costs included in operating expenses amounted to $70.0
million, $63.3 million and $44.2 million, respectively, on the
accompanying consolidated statements of operations and equity.

PRESENT VALUE OF FUTURE PROFITS

Included in other assets is $16.1 million and $38.4 million which
represents the present value of estimated future profits of acquired
business in connection with the rehabilitation of First Capital Life
Insurance Company ("FCL"-Note 3) as of December 31, 1996 and 1995,
respectively. The aforementioned future profits are discounted to

13
<PAGE>

Pacific Mutual Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

provide an appropriate rate of return and are being amortized over the
rehabilitation plan period. Amortization for the years ended December 31,
1996, 1995 and 1994 amounted to $24.2 million, $17.1 million and $4.7
million, respectively. During 1996, the Company changed certain
assumptions regarding the estimated life which resulted in an increase in
amortization in 1996 of approximately $17.0 million.

UNIVERSAL LIFE, ANNUITY AND OTHER INVESTMENT CONTRACT DEPOSITS

Universal life, annuity and other investment contract deposits are valued
using the retrospective deposit method and consist principally of
deposits received plus interest credited less accumulated assessments.
Interest credited to these policies ranged from 4% to 8.4% during 1996,
1995 and 1994.

The following detail of universal life, annuity and other investment
contract deposits is as follows:

<TABLE>
<CAPTION>
December 31,
1996 1995
-------------------
(In Millions)
<S> <C> <C>
Universal life $ 7,562.5 $ 6,930.7
Annuity 2,459.3 2,426.6
Other investment contract deposits 3,855.6 3,362.1
-------------------
$13,877.4 $12,719.4
-------------------
</TABLE>

The following detail of universal life, annuity and other investment
contract deposits policy fees and interest credited is as follows:

<TABLE>
<CAPTION>
Years Ended
December 31,
1996 1995 1994
--------------------
(In Millions)
<S> <C> <C> <C>
Policy fees
Universal life $318.4 $292.6 $267.1
Annuity 26.6 12.8 9.4
Other investment contract deposits 3.6 3.6 3.5
--------------------
Total policy fees $348.6 $309.0 $280.0
--------------------
Interest credited
Universal life $279.3 $258.6 $226.9
Annuity 131.9 125.2 120.7
Other investment contract deposits 242.0 270.4 291.0
--------------------
Total interest credited $653.2 $654.2 $638.6
--------------------
</TABLE>

FUTURE POLICY BENEFITS

Life insurance reserves are valued using the net level premium method.
Interest rate assumptions range from 4.5% to 9.3% for 1996, 1995 and
1994. Mortality, morbidity and withdrawal assumptions are generally based
on the Company's experience, modified to provide for possible unfavorable
deviations. Future dividends for participating business are provided for
in the liability for future policy benefits. Included in policy benefits
paid or provided on the accompanying consolidated statements of
operations and equity are dividends to policyholders.

14
<PAGE>

Pacific Mutual Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Dividends are provided based on dividend formulas approved by the Board
of Directors and reviewed for reasonableness and equitable treatment of
policyholders by an independent consulting actuary. As of December 31,
1996 and 1995, participating experience rated policies paying dividends
represented approximately 1% of direct written life insurance in force.

STATE GUARANTY FUND ASSESSMENTS

Insurance companies are subject to assessments by life and health
guaranty associations in most states in which they are licensed to do
business. These assessments are based on the volume and type of business
they sell in those states and may be partially recovered in some states
through a future reduction in premium taxes. Based on current information
available from the National Organization of Life and Health Guaranty
Association, the Company, as of December 31, 1996, has accrued in other
liabilities on the accompanying consolidated statements of financial
position an amount adequate for anticipated payments of known
insolvencies, net of estimated recoveries of premium tax offsets.

REVENUES AND EXPENSES

Insurance premiums are recognized as revenue when due. Benefits and
expenses, other than deferred policy acquisition costs, are recognized
when incurred.

Generally, receipts for universal life, annuities and other investment
contracts are classified as deposits. Policy fees from these contracts
include mortality charges, surrender charges and earned policy service
fees. Expenses related to these products include interest credited to
account balances and benefit amounts in excess of account balances.

Investment management fees are recorded as revenues during the period
such services are performed.

DEPRECIATION AND AMORTIZATION

Depreciation of investment real estate is computed on the straight-line
method over the estimated useful lives which range from 15 to 30 years.
Certain other assets are depreciated or amortized on the straight-line
method over varying periods ranging from 3 to 40 years. Depreciation of
investment real estate is included in net investment income on the
accompanying consolidated statements of operations and equity.
Depreciation and amortization of other assets is included in operating
expenses on the accompanying consolidated statements of operations and
equity.

FEDERAL INCOME TAXES

Pacific Mutual Life is taxed as a life insurance company for Federal
income tax purposes and files a consolidated Federal income tax return
with all its includable domestic subsidiaries. The amount of Federal
income tax expense includes an equity tax calculated by a prescribed
formula that incorporates a differential earnings rate between stock and
mutual life insurance companies. Deferred income taxes are provided for
timing differences in the recognition of revenues and expenses for
financial reporting and income tax purposes.

SEPARATE ACCOUNTS

Separate account assets are recorded at market value and the related
liabilities represent segregated contract owner funds maintained in
accounts with individual investment objectives. The investment results of
separate account assets generally pass through to separate account
policyholders and contract owners.

15
<PAGE>

Pacific Mutual Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair value of financial instruments disclosed in Notes 5
and 6 have been determined using available market information and
appropriate valuation methodologies. However, considerable judgment is
required to interpret market data to develop the estimates of fair value.
Accordingly, the estimates presented may not be indicative of the amounts
the Company could realize in a current market exchange. The use of
different market assumptions and/or estimation methodologies could have a
significant effect on the estimated fair value amounts.

USE OF ESTIMATES

The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.

2. STATUTORY RESULTS

The following are reconciliations of statutory surplus and statutory net
income for Pacific Mutual Life as calculated in accordance with
accounting practices prescribed or permitted by the Insurance Department
of the State of California, to the amounts reported as equity and net
income included in the accompanying consolidated financial statements:

<TABLE>
<CAPTION>
December 31,
1996 1995
------------------
(In Millions)
<S> <C> <C>
Statutory surplus $ 815.2 $ 723.2
Deferred policy acquisition costs 542.0 411.9
Unrealized gain on available for sale
securities, net 379.2 482.0
Asset valuation reserve 209.4 191.4
Deferred income tax 174.6 129.2
Subsidiary equity 60.7 66.0
Non-admitted assets 22.8 22.5
Surplus notes (149.6) (149.6)
Insurance and annuity reserves (340.4) (249.1)
Other (16.7) 5.9
------------------
Equity as reported herein $1,697.2 $1,633.4
------------------
</TABLE>

16
<PAGE>

Pacific Mutual Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. STATUTORY RESULTS (CONTINUED)

<TABLE>
<CAPTION>
Years Ended
December 31,
1996 1995 1994
----------------------
(In Millions)
<S> <C> <C> <C>
Statutory net income $113.1 $ 85.1 $ 81.0
Deferred policy acquisition costs 111.2 76.4 59.4
Deferred income tax 70.9 31.5 (27.7)
Interest maintenance reserve 3.8 12.2 (7.7)
Net realized gain (loss) on trading
securities (11.6) 13.2 (2.0)
Earnings of subsidiaries (33.0) 5.9 20.7
Insurance and annuity reserves (91.3) (95.5) (28.2)
Other 3.5 6.0 5.9
----------------------
Net income as reported herein $166.6 $134.8 $101.4
----------------------
</TABLE>

RISK-BASED CAPITAL

Each insurance company's state of domicile imposes minimum risk-based
capital requirements that were developed by the National Association of
Insurance Commissioners ("NAIC"). The formulas for determining the amount
of risk-based capital specify various weighting factors that are applied
to financial balances or various levels of activity based on the
perceived degree of risk. Regulatory compliance is determined by a ratio
of a company's regulatory total adjusted capital, as defined by the NAIC,
to its authorized control level risk-based capital, as defined by the
NAIC. Companies below specific trigger points or ratios are classified
within certain levels, each of which requires specified corrective
action. As of December 31, 1996 and 1995, the Company's ratios exceeded
the minimum risk-based capital requirements.

DIVIDENDS

Dividends to Pacific Mutual Life from its insurance subsidiaries are
subject to regulatory restrictions and approvals. The maximum amount of
dividends that can be paid by PM Group cannot exceed the lesser of 10% of
surplus as regards to policyholders, or the net statutory gain from
operations, without prior approval from the Insurance Commissioner of the
State of Arizona. During 1996, 1995 and 1994, PM Group received approval
to pay extraordinary dividends in excess of these limitations. PM Group
paid dividends of $25 million, $25 million and $20 million for the years
ended December 31, 1996, 1995 and 1994 of which $18 million, $17.2
million and $12.4 million, respectively, were considered extraordinary.

In accordance with the terms of the rehabilitation agreement (Note 3),
PCL is precluded from paying any dividends during the rehabilitation
period without the prior consent of the Insurance Department of the State
of California. No such dividends have been paid.

3. REHABILITATION OF FIRST CAPITAL LIFE INSURANCE COMPANY

Pursuant to a five-year rehabilitation agreement approved by a California
Superior Court and the Insurance Department of the State of California in
July 1992, Pacific Mutual Life, through its wholly-owned subsidiary, PCL,
will facilitate the rehabilitation of FCL. In accordance with the five-
year rehabilitation agreement, insurance policies of FCL were
restructured and substantially all the assets and certain liabilities of
FCL were assumed by PCL on December 31, 1992, pursuant to an assumption
reinsurance agreement and asset purchase agreement and have been
accounted for as a purchase transaction.

17
<PAGE>

Pacific Mutual Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3. REHABILITATION OF FIRST CAPITAL LIFE INSURANCE COMPANY (CONTINUED)

The rehabilitation agreement provides for the holders of restructured
policies to share in a substantial percentage of the unallocated
statutory surplus of PCL at the end of the rehabilitation period.
Policyholders have the option to surrender their restructured policies
with reduced benefits during this five-year period. During the
rehabilitation plan period, PCL is prohibited from issuing new insurance
policies. PCL will merge into Pacific Mutual Life, with Pacific Mutual
Life as the surviving entity, within thirty days following September 30,
1997, the end of the rehabilitation period.

In the event PCL is unable to pay contract benefits, Pacific Mutual Life
is obligated to contribute funds to pay those benefits in accordance with
the rehabilitation agreement.

4. ACQUISITION OF INSURANCE BLOCK OF BUSINESS

In 1996, Pacific Mutual Life signed a definitive agreement to acquire a
block of corporate-owned life insurance ("COLI") policies from
Confederation Life Insurance Company (U.S.) in Rehabilitation, which is
currently under rehabilitation. This block consists of approximately
40,000 policies, having a face amount of $9 billion and reserves of $1.7
billion. This block is primarily non-leveraged COLI. The transaction is
expected to close during the first half of 1997.

5. INVESTMENT IN FIXED MATURITY AND EQUITY SECURITIES

The amortized cost, gross unrealized gains and losses, and estimated fair
value of fixed maturity and equity securities are shown below. The
estimated fair value of publicly traded securities is based on quoted
market prices. For securities not actively traded, estimated fair values
were provided by independent pricing services specializing in "matrix
pricing" and modeling techniques. The Company also estimates certain fair
values based on interest rates, credit quality and average maturity or
from securities with comparable trading characteristics.

<TABLE>
<CAPTION>
Gross Unrealized Estimated
Amortized ---------------- Fair
Cost Gains Losses Value
-------------------------------------
(In Millions)
<S> <C> <C> <C> <C>
Available for Sale Securities
As of December 31, 1996:
U.S. Treasury securities and
obligations of U.S. government
authorities and agencies $ 297.9 $ 11.2 $ 0.3 $ 308.8
Obligations of states, political
subdivisions and foreign
governments 638.1 46.2 1.0 683.3
Corporate securities 6,848.3 506.3 91.9 7,262.7
Mortgage-backed and asset-backed
securities 3,753.6 98.0 19.4 3,832.2
Redeemable preferred stock 102.5 6.4 2.1 106.8
-------------------------------------
Total Fixed Maturity Securities $11,640.4 $668.1 $114.7 $12,193.8
-------------------------------------
Equity Securities $ 229.6 $ 40.8 $ 9.6 $ 260.8
-------------------------------------
</TABLE>

18
<PAGE>

Pacific Mutual Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5. INVESTMENT IN FIXED MATURITY AND EQUITY SECURITIES (CONTINUED)

<TABLE>
<CAPTION>
Gross Unrealized Estimated
Amortized ---------------- Fair
Cost Gains Losses Value
-------------------------------------
(In Millions)
<S> <C> <C> <C> <C>
Available for Sale Securities
As of December 31, 1995:
U.S. Treasury securities and
obligations of U.S. government
authorities and agencies $ 378.4 $ 33.4 $ 411.8
Obligations of states, political
subdivisions and foreign
governments 625.1 70.7 $ 3.3 692.5
Corporate securities 6,179.1 537.1 45.0 6,671.2
Mortgage-backed and asset-backed
securities 3,366.9 138.6 12.0 3,493.5
Redeemable preferred stock 89.4 3.1 2.3 90.2
-------------------------------------
Total Fixed Maturity Securities $10,638.9 $782.9 $62.6 $11,359.2
-------------------------------------
Equity Securities $ 192.3 $ 32.2 $ 6.0 $ 218.5
-------------------------------------
</TABLE>

The amortized cost and estimated fair values of fixed maturity securities
as of December 31, 1996, by contractual repayment date of principal, are
shown below. Expected maturities may differ from contractual maturities
because borrowers may have the right to call or prepay obligations with
or without call or prepayment penalties.

<TABLE>
<CAPTION>
Amortized Estimated
Cost Fair Value
--------------------
(In Millions)
<S> <C> <C>
Available for Sale:
Due in one year or less $ 1,482.3 $ 1,489.0
Due after one year through five years 2,830.0 3,042.3
Due after five years through ten years 1,907.4 1,991.7
Due after ten years 1,667.1 1,838.6
--------------------
7,886.8 8,361.6
Mortgage-backed and asset-backed securities 3,753.6 3,832.2
--------------------
Total $11,640.4 $12,193.8
--------------------
</TABLE>

Proceeds from sales of all available for sale securities during 1996,
1995 and 1994 were $2.5 billion, $1.9 billion and $2.7 billion,
respectively. Gross gains of $89.3 million, $58.0 million and $56.0
million and gross losses of $29.9 million, $32.3 million and $70.8
million were realized on those sales during 1996, 1995 and 1994,
respectively.

19
<PAGE>

Pacific Mutual Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5. INVESTMENTS IN FIXED MATURITY AND EQUITY SECURITIES (CONTINUED)

Major categories of investment income are summarized as follows:

<TABLE>
<CAPTION>
Years Ended December 31,
1996 1995 1994
--------------------------
(In Millions)
<S> <C> <C> <C>
Fixed maturity securities $ 831.6 $ 808.1 $ 741.3
Equity securities 17.8 7.3 8.9
Mortgage loans 107.9 112.9 136.3
Real estate 51.3 43.2 37.2
Policy loans 113.0 105.2 89.0
Other 48.9 47.1 3.3
--------------------------
Gross investment income 1,170.5 1,123.8 1,016.0
Investment expense 107.5 101.5 82.4
--------------------------
Net investment income $1,063.0 $1,022.3 $ 933.6
--------------------------
</TABLE>

The change in gross unrealized gain (loss) on investments in available
for sale and trading securities is as follows:

<TABLE>
<CAPTION>
December 31,
1996 1995 1994
-------------------------
(In Millions)
<S> <C> <C> <C>
Available for sale and trading securi-
ties:
Fixed maturity $(169.1) $1,039.3 $(320.6)
Equity 6.5 17.2 (29.7)
-------------------------
Total $(162.6) $1,056.5 $(350.3)
-------------------------
</TABLE>

As of December 31, 1996 and 1995, investments in fixed maturity
securities with a carrying value of $19.6 million and $20.5 million,
respectively, were on deposit with state insurance departments to satisfy
regulatory requirements.

No investment, aggregated by issuer, exceeded 10% of total equity as of
December 31, 1996.

The Company has no non-income producing fixed maturity securities,
mortgage loans, real estate or other long-term investments as of December
31, 1996.

20
<PAGE>

Pacific Mutual Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6. FINANCIAL INSTRUMENTS

The estimated fair values of the Company's financial instruments are as
follows:

<TABLE>
<CAPTION>
December 31, 1996 December 31, 1995
-------------------- --------------------
Carrying Estimated Carrying Estimated
Amount Fair Value Amount Fair Value
-----------------------------------------
(In Millions)
<S> <C> <C> <C> <C>
Assets:
Fixed maturity and equity
securities (Note 5) $12,454.6 $12,454.6 $11,577.7 $11,577.7
Mortgage loans 1,477.3 1,533.9 1,346.2 1,535.1
Policy loans 3,131.8 3,131.8 2,793.3 2,793.3
Cash and cash equivalents 109.0 109.0 286.1 286.1
Derivative financial
instruments:
Interest rate floors and
caps, options and
swaptions 59.3 59.3 39.4 39.4
Interest rate swap
contracts 1.0 1.0 2.4 2.4
Credit and total return
swaps 1.1 1.1 1.0 1.0
Liabilities:
Guaranteed interest
contracts 2,948.3 3,056.1 2,375.9 2,459.3
Deposit liabilities 799.6 800.6 876.3 899.4
Annuity liabilities 2,459.4 2,459.4 2,427.2 2,427.2
Surplus notes 149.6 157.5 149.6 157.7
Derivative financial
instruments:
Options written 1.5 1.5 1.5 1.5
Asset swap contracts 12.5 12.5 3.5 3.5
Foreign currency
derivatives 4.3 4.3 5.0 5.0
</TABLE>

The following methods and assumptions were used to estimate the fair
value of these financial instruments as of December 31, 1996 and 1995:

MORTGAGE LOANS

The estimated fair value of the mortgage loan portfolio is determined by
discounting the estimated future cash flow, using a year-end market rate
which is applicable to the yield, credit quality and average maturity of
the composite portfolio.

POLICY LOANS

The carrying amounts of policy loans are a reasonable estimate of their
fair values.

CASH AND CASH EQUIVALENTS

The carrying amounts of these items are a reasonable estimate of their
fair values.

DERIVATIVE FINANCIAL INSTRUMENTS

Derivatives are financial instruments whose value or cash flows are
"derived" from another source, such as an underlying security. They can
facilitate total return and, when used for hedging, they achieve the
lowest cost and most efficient execution of positions. Derivatives can
also be used to leverage by using very large notional amounts or by
creating formulas that multiply changes in the underlying security. The
Company's approach is to avoid highly leveraged or overly complex
investments. The Company utilizes certain derivative financial
instruments to diversify its business risk and to minimize its exposure
to fluctuations in market prices, interest rates or basis risk as well as
for facilitating total return. Risk is limited through modeling
derivative performance in product portfolios for hedging and setting loss
limits in total return portfolios.

21
<PAGE>

Pacific Mutual Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6. FINANCIAL INSTRUMENTS (CONTINUED)

Derivatives used by the Company involve elements of credit risk and
market risk in excess of amounts recognized in the accompanying
consolidated financial statements. The notional amounts of these
instruments reflect the extent of involvement in the various types of
financial instruments. The estimated fair values of these instruments are
based on quoted market prices, dealer quotations or internal price
estimates believed to be comparable to dealer quotations. These amounts
estimate what the Company would have to pay or receive if the contracts
were terminated. The Company determines, on an individual counterparty
basis, the need for collateral or other security to support financial
instruments with off-balance sheet counterparty risk.

A reconciliation of the notional or contract amounts and discussion of
the various derivative instruments is as follows:

<TABLE>
<CAPTION>
Balance Balance
Beginning Terminations End
of Year Acquisitions and Maturities of Year
----------------------------------------------
(In Millions)
<S> <C> <C> <C> <C>
December 31, 1996:
Interest rate floors and
caps, options and
swaptions $2,159.6 $3,075.0 $ 371.4 $4,863.2
Interest rate swap
contracts 619.6 620.9 252.2 988.3
Asset swap contracts 20.0 15.3 5.3 30.0
Credit and total return
swaps 146.1 307.2 96.8 356.5
Financial futures
contracts 310.1 3,358.9 3,059.8 609.2
Foreign currency
derivatives 15.4 43.1 17.1 41.4

December 31, 1995:
Interest rate floors and
caps, options and
swaptions 1,950.9 1,126.6 917.9 2,159.6
Interest rate swap
contracts 370.5 339.0 89.9 619.6
Asset swap contracts 30.0 10.0 20.0
Credit and total return
swaps 116.3 99.8 70.0 146.1
Financial futures
contracts 137.6 1,877.0 1,704.5 310.1
Foreign currency
derivatives 35.2 19.8 15.4
</TABLE>

Interest Rate Floors and Caps, Options and Swaptions
----------------------------------------------------
The Company uses interest rate floors and caps, options and swaptions to
hedge against fluctuations in interest rates and in its total return
portfolios. Interest rate floor agreements entitle the Company to receive
the differential, if below, between the specified rate and the current
value of the underlying index. Interest rate cap agreements entitle the
Company to receive the differential, if above, between the specified rate
and the current value of the underlying index. Options purchased involve
the right, but not the obligation, to purchase the underlying securities
at a specified price during a given time period. Swaptions are options to
enter into a swap transaction at a specified price. The Company uses
written covered call options on a limited basis. Gains and losses on
covered calls are offset by gains and losses on the underlying position.
Options and floors are reported as assets and options written are
reported as liabilities in the consolidated statements of financial
position. Cash requirements for these instruments are generally limited
to the premium paid by the Company at acquisition. The purchase premium
of these instruments is amortized on a constant effective yield basis and
included as a component of net investment income over the term of the
agreement. Interest rate floors and caps, options and swaptions mature
during fiscal years 1997 through 2007.

22
<PAGE>

Pacific Mutual Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6. FINANCIAL INSTRUMENTS (CONTINUED)

Interest Rate Swap Contracts
----------------------------
The Company uses interest rate swaps to manage interest rate risk. The
interest rate swap agreements generally involve the exchange of fixed and
floating rate interest payments or the exchange of floating to floating
interest payments tied to different indexes. Generally, no premium is
paid to enter into the contract and no principal payments are made by
either party. The amounts to be received or paid pursuant to these
agreements are accrued and recognized in the consolidated statements of
operations through an adjustment to net investment income over the life
of the agreements. The interest rate swap contracts mature during fiscal
years 1997 through 2026.

Asset Swap Contracts
--------------------
The Company uses asset swap contracts to manage interest rate and equity
risk to better match portfolio duration to liabilities. Asset swap
contracts involve the exchange of upside equity potential for preferred
cash flow streams. The amounts to be received or paid pursuant to these
agreements are accrued and recognized in the consolidated statements of
operations through an adjustment to net investment income over the life
of the agreements. The asset swap contracts mature during fiscal years
1998 through 2000.

Credit and Total Return Swaps
-----------------------------
The Company uses credit and total return swaps to take advantage of
market opportunities. Credit swaps involve the receipt of floating or
fixed rate payments in exchange for assuming potential credit losses of
an underlying security. Total return swaps involve the exchange of
floating rate payments for the total return performance of a specified
index or market. The amounts to be received or paid pursuant to these
agreements are accrued and recognized in the consolidated statements of
operations through an adjustment to net investment income over the life
of the agreements. Credit and total return swaps mature during fiscal
years 1997 through 2013.

Financial Futures Contracts
---------------------------
The Company uses exchange-traded financial futures contracts to hedge
cash flow timing differences between assets and liabilities and overall
portfolio duration. Assets and liabilities are rarely acquired or sold at
the same time, which creates a need to hedge their change in value during
the unmatched period. In addition, foreign currency futures may be used
to hedge foreign currency risk on non U.S. dollar denominated securities.
Financial futures contracts obligate the holder to buy or sell the
underlying financial instrument at a specified future date for a set
price and may be settled in cash or delivery of the financial instrument.
Price changes on futures are settled daily through the daily margin cash
flows. The notional amounts of the contracts do not represent future cash
requirements, as the Company intends to close out open positions prior to
expiration.

Foreign Currency Derivatives
----------------------------
The Company enters into foreign exchange forward contracts and swaps to
hedge against fluctuations in foreign currency exposure. Foreign currency
derivatives involve the exchange of foreign currency denominated payments
for U.S. dollar denominated payments. Gains and losses on foreign
exchange forward contracts offset currency gains and losses on the
related assets. The amounts to be received or paid under the foreign
currency swaps are accrued and recognized in the consolidated statements
of operations through an adjustment to net investment income over the
life of the agreements. Foreign currency derivatives expire during fiscal
years 1997 through 2006.

GUARANTEED INTEREST CONTRACTS AND DEPOSIT LIABILITIES

The estimated fair values of fixed maturity guaranteed interest contracts
are estimated using the rates currently offered for deposits of similar
remaining maturities. The estimated fair value of deposit liabilities
with no defined maturities is the amount payable on demand.

23
<PAGE>

Pacific Mutual Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6. FINANCIAL INSTRUMENTS (CONTINUED)

ANNUITY LIABILITIES

The fair value of annuity liabilities approximates carrying value and
primarily includes policyholder deposits and accumulated credited
interest.

SURPLUS NOTES

The estimated fair value of surplus notes is based on market quotes.

FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

Pacific Mutual Life has issued PRO GIC and Diversifier GIC contracts to
plan sponsors totaling $1.1 billion as of December 31, 1996, pursuant to
the terms of which the plan sponsor retains direct ownership and control
of the assets related to these contracts. Pacific Mutual Life agrees to
provide benefit responsiveness in the event that plan benefit requests
exceed plan cash flows. In return for this guarantee, Pacific Mutual Life
receives a fee which varies by contract. Pacific Mutual Life sets the
investment guidelines to provide for appropriate credit quality and cash
flow matching.

7. CONCENTRATION OF CREDIT RISK

The Company manages its investments to limit credit risk by diversifying
its portfolio among various security types and industry sectors. The
credit risk of financial instruments is controlled through credit
approvals, limits and monitoring procedures. Real estate and mortgage
loan investments are diversified by geographic location and property
type. Management believes that significant concentrations of credit risk
do not exist.

The Company is exposed to credit loss in the event of nonperformance by
the counterparties to interest rate swap contracts and other derivative
securities. However, the Company does not anticipate nonperformance by
the counterparties.

8. BORROWINGS

Pacific Mutual Life borrows for short-term needs by issuing commercial
paper. There were no commercial paper borrowings outstanding as of
December 31, 1996 and 1995. Pacific Mutual Life has a revolving credit
facility available of $250 million as of December 31, 1996 and 1995.
There were no borrowings under the revolving credit facility outstanding
as of December 31, 1996 and 1995.

PFHC had the ability to borrow up to $50 million from certain banks at
variable rates of interest. On December 21, 1995, outstanding loans
totaling $37 million were transferred to PFAMCo (Note 1). The borrowing
limit as of December 31, 1996 and 1995 was $150 million and $100 million,
respectively. The interest rate averaged 5.6%, 6.1% and 4.6% for the
years ended December 31, 1996, 1995 and 1994, respectively. The balance
outstanding as of December 31, 1996 and 1995 totaled $95.5 million and
$53 million, respectively. Outstanding borrowings are due and payable in
1997 and are subject to renewal.

During 1992, PFHC entered into a credit agreement with a group of banks
for borrowings of $45 million. Proceeds of this note were paid to PCL in
connection with the issuance of a certificate of contribution by PCL
(Note 3). On December 31, 1996 and 1995, the applicable interest rate was
6.2% and 6.5%, respectively. The outstanding balance of $25 million as of
December 31, 1996 was prepaid per the terms of the agreement on January
27, 1997.

24
<PAGE>

Pacific Mutual Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9. SURPLUS NOTES

Pacific Mutual Life has $150 million of Surplus Notes outstanding at an
interest rate of 7.9% maturing on December 30, 2023. Interest is payable
semiannually on June 30 and December 30. The Surplus Notes may not be
redeemed at the option of Pacific Mutual Life or any holder of the Notes.
The Surplus Notes are unsecured and subordinated to all present and
future senior indebtedness and policy claims of Pacific Mutual Life. Each
payment of interest on and the payment of principal of the Surplus Notes
may be made only with the prior approval of the Insurance Commissioner of
the State of California. Interest expense amounted to $11.8 million for
the years ended December 31, 1996, 1995 and 1994 and is included in net
investment income in the accompanying consolidated statements of
operations and equity.

10. INCOME TAXES

As required by SFAS No. 109, "Accounting for Income Taxes," the Company
accounts for income taxes using the liability method. Under SFAS No. 109,
the deferred tax consequences of changes in tax rates or laws must be
computed on the amounts of temporary differences and carryforwards
existing at the date a new law is enacted. Recording the effects of the
change involves adjusting deferred tax liabilities and assets with a
corresponding charge or credit recognized in the provision for income
taxes. The objective is to measure a deferred tax liability or asset
using the enacted tax rates and laws expected to apply to taxable income
in the periods in which the deferred tax liability or asset is expected
to be settled or realized.

The provision for income taxes is as follows:

<TABLE>
<CAPTION>
Years Ended
December 31,
1996 1995 1994
----------------------
(In Millions)
<S> <C> <C> <C>
Current $163.5 $116.4 $ 85.5
Deferred (49.8) (30.3) 26.2
----------------------
$113.7 $ 86.1 $111.7
----------------------
</TABLE>

The sources of the Company's provision for deferred taxes are as follows:

<TABLE>
<CAPTION>
Years Ended December 31,
1996 1995 1994
----------------------
(In Millions)
<S> <C> <C> <C>
Deferred policy acquisition costs $ 2.1 $ (6.0) $ (5.0)
Interest in advance 2.0 2.9 25.4
Investment valuation (7.3) 8.1 11.4
Reserves (28.5) (28.7) 7.1
Other (18.1) (6.6) (12.7)
----------------------
$(49.8) $(30.3) $ 26.2
----------------------
</TABLE>

25
<PAGE>

Pacific Mutual Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10. INCOME TAXES (CONTINUED)

A reconciliation of the provision for income taxes based on the
prevailing corporate tax rate to the provision reflected in the
consolidated financial statements is as follows:

<TABLE>
<CAPTION>
Years Ended December 31,
1996 1995 1994
---------------------------
(In Millions)
<S> <C> <C> <C>
Income taxes at the statutory rate $ 98.1 $77.3 $ 74.6
Equity tax-current year 16.3 36.1
Amortization of intangibles on equity
method investments 6.5 6.5
Non-taxable investment income (2.1) (2.1) (4.7)
Equity tax-recomputation of prior years (17.3)
Other 12.2 4.4 5.7
---------------------------
$113.7 $86.1 $111.7
---------------------------
</TABLE>

The net deferred tax asset (liability) included in other assets on the
accompanying consolidated statement of financial position was comprised
of the tax effects of the following temporary differences:

<TABLE>
<CAPTION>
December 31,
1996 1995
------------------
(In Millions)
<S> <C> <C>
Reserves $ 244.9 $ 216.4
Deferred compensation 27.6 25.4
Investment valuation 24.0 16.7
Postretirement benefits 9.8 9.4
Dividends 9.6 10.4
Interest in advance 1.7 3.6
Depreciation (9.8) (10.0)
Deferred policy acquisition costs (43.9) (41.8)
Other 22.1 6.1
------------------
Deferred taxes from operations 286.0 236.2
Unrealized gain on available for sale securities (204.5) (259.6)
------------------
Net deferred tax asset (liability) $ 81.5 $ (23.4)
------------------
</TABLE>

11. REINSURANCE

The Company accounts for reinsurance transactions utilizing SFAS No. 113,
"Accounting and Reporting for Reinsurance of Short-Duration And Long-
Duration Contracts." SFAS No. 113 establishes the conditions required for
a contract with a reinsurer to be accounted for as reinsurance and
prescribes accounting and reporting standards for those contracts.
Amounts receivable from reinsurers for reinsurance on future policy
benefits, universal life deposits, and unpaid losses is reported as an
asset and included in other assets on the accompanying consolidated
statements of financial position.

26
<PAGE>

Pacific Mutual Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11. REINSURANCE (CONTINUED)

The Company has reinsurance agreements with other insurance companies for
the purpose of diversifying risk and limiting exposure on larger risks
or, in the case of the producer-owned reinsurance company, to diversify
risk and retain top producing agents. All assets associated with
reinsured business remain with, and under the control of the Company.
Approximate amounts recoverable (payable) from (to) reinsurers include
the following amounts:

<TABLE>
<CAPTION>
December 31,
1996 1995
---------------
(In Millions)
<S> <C> <C>
Reinsured universal life deposits $(35.9) $(42.7)
Future policy benefits 90.0 87.7
Unpaid claims 4.6 7.8
Paid claims 8.4 7.9
</TABLE>

As of December 31, 1996, 85% of the reinsurance recoverables were from
one reinsurer, of which 100% is secured by payables to the reinsurer. To
the extent that the assuming companies become unable to meet their
obligations under these agreements, the Company remains contingently
liable. The Company does not anticipate nonperformance by the assuming
companies.

Revenues and benefits are shown net of the following reinsurance
transactions:

<TABLE>
<CAPTION>
Years Ended December 31,
1996 1995 1994
--------------------------
(In Millions)
<S> <C> <C> <C>
Ceded reinsurance netted against insurance
premiums $ 44.3 $ 29.2 $ 26.0
Assumed reinsurance included in insurance
premiums 17.8 15.6 20.2
Ceded reinsurance netted against policy fees 71.0 66.5 66.7
Ceded reinsurance netted against net invest-
ment
income 192.5 176.6 151.0
Ceded reinsurance netted against interest
credited 155.2 140.0 119.9
Ceded reinsurance netted against policy ben-
efits 56.7 51.4 45.4
Assumed reinsurance included in policy bene-
fits 9.9 14.5 16.8
</TABLE>

27
<PAGE>

Pacific Mutual Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

12. SEGMENT INFORMATION

The operations of the Company have been classified into four business
segments as follows: Individual Life Insurance and Annuities, Pensions,
Group Employee Benefits and Corporate and Other. These segments are based
on the organization of the Company and are generally distinguished by the
products offered. The Corporate and Other segment generally includes the
assets and operations that do not support the other segments such as
certain non-life insurance related subsidiary operations. Depreciation
expense and capital expenditures are not material and have not been
reported. Revenues, income before income taxes and assets by segment are
as follows:

<TABLE>
<CAPTION>
Years Ended December 31,
1996 1995 1994
-----------------------------
(In Millions)
<S> <C> <C> <C>
Revenues:
Individual Life Insurance and Annuities $ 962.1 $ 927.0 $ 795.9
Pensions 507.3 513.9 464.0
Group Employee Benefits 454.2 419.3 423.7
Corporate and Other 224.4 159.5 332.0
-----------------------------
$ 2,148.0 $ 2,019.7 $ 2,015.6
-----------------------------
Income before income taxes:
Individual Life Insurance and Annuities $ 92.0 $ 102.3 $ 94.8
Pensions 80.7 53.3 34.3
Group Employee Benefits 24.7 25.2 36.5
Corporate and Other 82.9 40.1 47.5
-----------------------------
$ 280.3 $ 220.9 $ 213.1
-----------------------------
<CAPTION>
December 31,
1996 1995 1994
-----------------------------
(In Millions)
<S> <C> <C> <C>
Assets:
Individual Life Insurance and Annuities $15,484.4 $12,953.2 $10,912.3
Pensions 8,097.2 7,592.5 6,497.9
Group Employee Benefits 344.4 329.8 341.3
Corporate and Other 3,139.3 2,427.6 1,954.3
-----------------------------
$27,065.3 $23,303.1 $19,705.8
-----------------------------
</TABLE>

13. PENSION PLAN, POSTRETIREMENT BENEFITS AND OTHER PLANS

PENSION PLAN

Pacific Mutual Life provides a qualified noncontributory defined benefit
pension plan which covers all eligible employees who have one year of
continuous employment and have attained age 21. The full-benefit vesting
period for all participants is five years.

Benefits for employees are based on years of service and the highest five
consecutive years of compensation during the last ten years of
employment. Pacific Mutual Life's funding policy is to contribute amounts
to the plan sufficient to meet the minimum funding requirements set forth
in the Employee Retirement Income Security Act of 1974, plus such
additional amounts as may be determined appropriate. Contributions are
intended to provide not only for benefits attributed to employment to
date but also for those expected to be earned in the future. All

28
<PAGE>

Pacific Mutual Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13. PENSION PLAN, POSTRETIREMENT BENEFITS AND OTHER PLANS (CONTINUED)
such contributions are made to a tax-exempt trust. Plan assets consist
primarily of group annuity contracts issued by Pacific Mutual Life, as
well as participating units of a real estate trust and mutual funds
managed by an indirect subsidiary of Pacific Mutual Life.

Components of net periodic pension cost are as follows:

<TABLE>
<CAPTION>
Years Ended December 31,
1996 1995 1994
-----------------------
(In Millions)
<S> <C> <C> <C>
Service cost-benefits earned during the year $ 3.7 $ 2.8 $ 3.2
Interest cost on projected benefit obligation 9.4 8.8 8.5
Actual return on plan assets (19.7) (24.1) 0.6
Amortization of net obligations and prior
service cost 8.0 14.0 (11.4)
-----------------------
Net periodic pension cost $ 1.4 $ 1.5 $ 0.9
-----------------------
</TABLE>

The following table sets forth the Plan's funded status and
amounts recognized on Pacific Mutual Life's consolidated
statements of financial position:

<TABLE>
<CAPTION>
December 31,
1996 1995
----------------
(In Millions)
<S> <C> <C>
Actuarial present value of benefit obligation:
Vested benefits $ 114.4 $ 115.8
Nonvested benefits 1.2 0.8
----------------
Accumulated benefit obligation 115.6 116.6
Effect of projected future compensation increases 18.5 19.5
----------------
Projected benefit obligation 134.1 136.1
Plan assets at fair value (141.2) (125.6)
----------------
Plan assets (in excess) less than projected benefit
obligation (7.1) 10.5
Unrecognized net gain (loss) 2.5 (15.5)
Unrecognized transition asset 6.0 7.2
Unrecognized prior service cost 2.2 2.5
----------------
Accrued pension cost $ 3.6 $ 4.7
----------------
</TABLE>

In determining the actuarial present value of the projected benefit
obligation as of December 31, 1996 and 1995, the weighted average
discount rate used was 7.5% and 7%, respectively, and the rate of
increase in future compensation levels was 6% for both years. The
expected long-term rate of return on plan assets was 8.5% in 1996 and
1995.

POSTRETIREMENT HEALTH CARE AND LIFE INSURANCE PLANS

Pacific Mutual Life sponsors a defined benefit health care plan and a
defined benefit life insurance plan ("the Plans") that provide
postretirement benefits for all eligible retirees and their dependents.
Generally, qualified employees may become eligible for these benefits if
they reach normal retirement age, have been covered under Pacific Mutual
Life's policy as an active employee for a minimum continuous period prior
to the date retired, and have an employment date before January 1, 1990.
The Plans contain cost-sharing features such as deductibles and
coinsurance, and require retirees to make contributions which can be
adjusted annually. Pacific Mutual Life's

29
<PAGE>

Pacific Mutual Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13. PENSION PLAN, POSTRETIREMENT BENEFITS AND OTHER PLANS (CONTINUED)

commitment to qualified employees who retire after April 1, 1994 is
limited to specific dollar amounts. Pacific Mutual Life reserves the
right to modify or terminate the Plans at any time. As in the past, the
general policy is to fund these benefits on a pay-as-you-go basis. The
amount of benefits paid under the programs during 1996, 1995 and 1994 was
approximately $1.6 million, $1.7 million and $1.7 million, respectively.

Components of net periodic postretirement benefit cost are as follows:

<TABLE>
<CAPTION>
Years Ended
December 31,
1996 1995 1994
-------------------
(In Millions)
<S> <C> <C> <C>
Service cost $ 0.2 $ 0.2 $ 0.2
Interest cost 1.5 1.9 1.8
Amortization (0.3) (0.3) (0.3)
-------------------
Net periodic postretirement benefit cost $ 1.4 $ 1.8 $ 1.7
-------------------
</TABLE>

The following table sets forth the Plan's funded status and amounts
recorded in other liabilities on the accompanying consolidated statements
of financial position:

<TABLE>
<CAPTION>
December 31,
1996 1995
-----------
(In Millions)
<S> <C> <C>
Accumulated postretirement obligation:
Retirees $17.3 $20.9
Fully eligible active plan participants 2.0 1.7
Other active plan participants 2.5 2.3
-----------
Total accumulated postretirement obligation 21.8 24.9
Fair value of plan assets -- --
-----------
Unfunded accumulated postretirement obligation 21.8 24.9
Unrecognized net gain 3.7 0.4
Prior service cost 1.3 1.6
-----------
Accrued postretirement benefit liability $26.8 $26.9
-----------
</TABLE>

The assumed health care cost trend rate used in measuring the accumulated
benefit obligation was 9% for 1996 and 10% for 1995 and is assumed to
decrease gradually to 4% in 2003 and remain at that level thereafter. The
amount reported is materially effected by the health care cost trend rate
assumptions. If the health care cost trend rate assumptions were
increased by 1%, the accumulated postretirement benefit obligation as of
December 31, 1996 and 1995 would be increased by 11.5% and 10.9%,
respectively. The effect of this change would increase the aggregate of
the service and interest cost components of the net periodic benefit cost
by 12.3%, 11.4% and 13.6% for 1996, 1995 and 1994, respectively.

The discount rate used in determining the accumulated postretirement
benefit obligation is 7.5% and 7% for 1996 and 1995, respectively.

OTHER PLANS

Pacific Mutual Life has a voluntary Retirement Incentive Savings Plan
pursuant to Section 401(k) of the Internal Revenue Code covering all
eligible employees of the Company. Pacific Mutual Life matches 50% of
each employees' contributions, up to a maximum of six percent of eligible
compensation.

30
<PAGE>

Pacific Mutual Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13. PENSION PLAN, POSTRETIREMENT BENEFITS AND OTHER PLANS (CONTINUED)

Pacific Mutual Life also has a deferred compensation plan which permits
certain employees to defer portions of their compensation and earn a
guaranteed interest rate on the deferred amounts. The interest rate is
determined annually and is guaranteed for one year. The compensation
which has been deferred has been accrued and the primary expense, other
than compensation, related to this plan is interest on the deferred
amounts.

The Company also has performance based incentive compensation plans for
its employees.

14. TRANSACTIONS WITH AFFILIATES

Pacific Mutual Life serves as the investment advisor for the Pacific
Select Fund, the investment vehicle provided to the Company's variable
life and variable annuity contractholders. Pacific Mutual Life charges
fees based upon the net asset value of the portfolios of the Pacific
Select Fund, which amounted to $14.3 million, $6.5 million and $3.0
million for the years ended December 31, 1996, 1995 and 1994,
respectively. In addition, Pacific Mutual Life entered into an agreement
with the Pacific Select Fund on October 1, 1995, to provide certain
support services for an administration fee which is based on an
allocation of actual costs. Such administration fees amounted to $108,000
and $28,550 for the years ended December 31, 1996 and 1995, respectively.

PIMCO Advisors provides investment advisory services to the Company for
which the fees amounted to $6.2 million, $5.0 million and $0.4 million
for the years ended December 31, 1996, 1995 and 1994, respectively.
Included in equity securities on the accompanying consolidated statements
of financial position are investments in mutual funds and other
investments managed by PIMCO Advisors which amounted to $110.6 million
and $77.6 million as of December 31, 1996 and 1995, respectively.

Pacific Mutual Life provides certain support services to PIMCO Advisors.
Charges for these services are based on an allocation of actual costs and
amounted to $1.4 million, $1.9 million and $0.2 million for the years
ended December 31, 1996, 1995 and 1994, respectively.

15. SUBSIDIARY PROFIT-SHARING PLANS AND OTHER COMPENSATION PLANS

Prior to the PIMCO Advisors transaction (Note 1), certain of PFAMCo's
direct subsidiaries had nonqualified profit-sharing plans (the "Profit-
Sharing Plans") covering certain key employees ("Key Employees") and
other employees. The Profit-Sharing Plans provided for awards based on
the profitability of the respective subsidiary, as defined in the
employment agreements. Such profitability was primarily based on income
before income taxes and before profit-sharing. The awards ranged from 40%
to 80% of such amounts depending on the level of profitability. The
profit-sharing awards were fully vested as of the PIMCO Advisors
transaction date of November 15, 1994.

In addition, Key Employees of certain indirect subsidiaries participated
in long-term incentive plans that provided compensation under the Profit-
Sharing Plans for a specified period of time subsequent to their
termination of employment. These plans were terminated as of the PIMCO
Advisors transaction date.

Effective November 15, 1994, termination and non-competition agreements
were entered into with certain Key Employees. These agreements provide
terms and conditions for the allocation of future proceeds from
distributions and sales of certain PIMCO Advisors units and other
noncompete payments. When the amount of future payments to be made to a
Key Employee is determinable, a liability for such amount is established
and is included in other liabilities in the consolidated statements of
financial position.

For the years ended December 31, 1996, 1995 and 1994, approximately $35.3
million, $28.6 million and $166.9 million, respectively, is included in
operating expenses in the consolidated statements of operations related
to the above agreements.

31
<PAGE>

Pacific Mutual Life Insurance Company and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

16. INVESTMENT COMMITMENTS

The Company has outstanding commitments to make investments in fixed
maturities and other investments as follows (In Millions):

<TABLE>
<CAPTION>
Years Ending December 31:
-------------------------
<S> <C>
1997 $193.1
1998-2001 109.0
2002 and thereafter 19.5
------
Total $321.6
------
</TABLE>

17. LITIGATION

The Company is a respondent in a number of legal proceedings, some of
which involve extra-contractual damages. In the opinion of management,
the outcome of these proceedings is not likely to have a material adverse
effect on the consolidated financial position of the Company.
--------------------------------------------------------------------------

32
<PAGE>

FORM 15-20885-00
<PAGE>

Part C. Other Information

Item 24. Financial Statements and Exhibits

(a) Financial Statements

Contained in Part A:

Condensed Financial Information

Contained in Part B:

(1) Registrant's Financial Statements

Audited Financial Statements dated as of December 31, 1996
which are incorporated by reference from the Annual Report
include the following for Pacific Corinthian Variable Separate
Account:

Report of Independent Auditors
Statements of Assets and Liabilities
Statements of Operations
Statements of Changes in Net Assets
Notes to Financial Statements

Unaudited Financial Statements dated as of June 30, 1997 which
are incorporated by reference from the Semi-Annual Report
include the following for Pacific Corinthian Variable Separate
Account:

Statements of Assets and Liabilities
Statements of Operations
Statements of Changes in Net Assets
Notes to Financial Statements

(2) Depositor's Financial Statements

Audited Consolidated Financial Statements dated as of December
31, 1996 and 1995, and for the three years ended December 31,
1996 and included in Part B include the following for Pacific
Mutual Life:

Report of Independent Auditors
Consolidated Statement of Financial Position
Consolidated Statement of Operations and Equity
Consolidated Statement of Cash Flows
Notes to Consolidated Financial Statements
<PAGE>

<TABLE>
<CAPTION>
(b) Exhibits
<C> <S>
1. (a) Resolution of the Board of Directors of Pacific Corinthian Life
Insurance Company authorizing the establishment of the Pacific
Corinthian VIP Separate Account
(b) Authorization of the Establishment of Variable Accounts
(c) Resolution of the Board of Directors of Pacific Corinthian Life
Insurance Company authorizing participation in the rehabilitation
of First Capital Life Insurance Company.
(d) Resolution of the Board of Directors of Pacific Mutual Life
Insurance Company authorizing the merger with Pacific Corinthian
Life Insurance Company
(e) Resolution of the Board of Directors of Pacific Life Insurance
Company authorizing conformity to the terms of the current Bylaws

2. Not applicable

3. (a) Form of Distribution Agreement between Pacific Life and
Pacific Mutual Distributors, Inc. ("PMD")
(b) Form of Selling Agreement between Pacific Mutual Life, PMD and
various Broker-Dealers

4. (a) Form of Individual Flexible Premium Deferred Annuity and Variable
Accumulation Contract (Form 1080-385)
(b) Age Misstatement Endorsement (Form 0410-JA87)
(c) Pennsylvania Variable Annuity Endorsement (Form 0804-JA87)
(d) Fixed Account Accumulation Value Endorsement (Form 0806-DA84)
(e) Special Endorsement For Qualified Plans (Form 0807-EA84)
(f) Disclaimer Notice For Tax Qualified Plans (Form 0808-GA84)
(g) New Jersey Variable Annuity Endorsement (Form 0809-GA84)
(h) Individual Flexible Premium Deferred Annuity And Variable
Accumulation Contract Endorsement (Form 0810-LA84)
(i) Transfers Endorsement (Form 0812-KA85)
(j) Special Endorsement For Texas Optional Retirement Program (Form
0814-HA86)
(k) Premium Tax Endorsement (Form 0819-KA87)
(l) Some Rights We Reserve Endorsement (Form 0820-KA87)
(m) Right To Return Endorsement (Form 0821-LA87)
(n) Payment Plans and Contract Maintenance Charge Endorsement (Form
0822-AA88)
(o) Minimum Guaranteed Cash Values For Fixed Account (Form 0825-KA88)
(p) Contract Maintenance Charge Endorsement (Form 0827-BA88)
(q) Endorsement For Contracts Issued Under IRC Section 403(b) Plans
(Form 0827-EA89)
(r) Endorsement To Page 3 (Form 0828-GA89)
(s) Death Benefit Proceeds Endorsement (Form 0830-AA90)
(t) Death Benefit Proceeds Endorsement (Form 0830-AB90)
</TABLE>

<PAGE>

<TABLE>
<C> <S>
(u) Deferral Of Cash Surrender Value Endorsement (Form 4379-IA89)
(v) Important Notice (4930-FA90)
(w) Assumption Certificate (Form 0001-IA92)
(x) Rehabilitation Endorsement (6074/1192)

5. Not applicable

6. (a) Articles of Incorporation of Pacific Life
(b) By-Laws of Pacific Life

7. Form of Assumption Reinsurance Agreement

8. Not applicable

9. Opinion and Consent of General Counsel of Pacific Life

10. (a) Consent of Independent Auditors
(b) Consent of Dechert Price & Rhoads

11. Not applicable
12. Not applicable

13. Performance Calculations

14. Not applicable

15. Powers of Attorney
</TABLE>

Item 25. Directors and Officers of Pacific Life Insurance Company

<TABLE>
<CAPTION>
Name and Address Positions and Offices with Pacific Life
<S> <C>
Thomas C. Sutton Director, Chairman of the Board, and Chief
Executive Officer
Glenn S. Schafer Director and President
Richard M. Ferry Director
Donald E. Guinn Director
Ignacio E. Lozano, Jr. Director
Charles A. Lynch Director
Dr. Allen W. Mathies, Jr. Director
Charles D. Miller Director
Donn B. Miller Director
Jacqueline C. Morby Director
J. Fernando Niebla Director
Susan Westerberg Prager Director
</TABLE>

<PAGE>

<TABLE>
<S> <C>
Richard M. Rosenberg Director
James R. Ukropina Director
Raymond L. Watson Director
Edward Byrd Vice President and Controller
David R. Carmichael Senior Vice President and General Counsel
Audrey L. Milfs Vice President and Corporate Secretary
Gerald W. Robinson Executive Vice President
Khan T. Tran Senior Vice President and Chief Financial Officer
</TABLE>
- ---------
The address for each of the persons listed above is as follows:

700 Newport Center Drive
Newport Beach, California 92660

Item 26. Persons Controlled by or Under Common Control with Pacific Life

The following is an explanation of the organization chart of Pacific
Life's subsidiaries:

PACIFIC LIFE, SUBSIDIARIES & AFFILIATED ENTERPRISES
LEGAL STRUCTURE

Pacific Life is a California Stock Insurance Company wholly-owned
by Pacific LifeCorp (a Delaware Stock Holding Company) which is, in
turn, wholly-owned by Pacific Mutual Holding Company (a California
Mutual Holding Company). Pacific Life has a 40% ownership of American
Maturity Life Insurance Company (a Connecticut Corporation), a 50%
ownership of Pacific Mezzanine Associates, L.L.C. (a Delaware Limited
Liability Company), and is the parent company of Pacific Financial
Asset Management Corporation, Pacific Mutual Realty Finance, Inc., PM
Group Life Insurance Company (an Arizona corporation), Pacific Mutual
Distributors, Inc., and World-Wide Holdings Limited (a United Kingdom
Corporation). A subsidiary of Pacific Financial Asset Management
Corporation ("PFAMCo") is PMRealty Advisors Inc. PFAMCo owns 42% of
the outstanding partnership interests in PIMCO Advisors L.P. (a
Delaware Limited Partnership). Subsidiaries of Pacific Mutual
Distributors, Inc. include: Associated Financial Group, Inc.; Mutual
Service Corporation (a Michigan corporation), along with its
subsidiaries Advisors' Mutual Service Center, Inc. (a Michigan
corporation) and Titan Value Equities Group, Inc. (which PFAMCo 60%
owns); and United Planners' Group, Inc. (an Arizona corporation which
is 97% owned), along with its subsidiaries United Planners' Financial
Services of America (an Arizona Limited Partnership). Subsidiaries of
World-Wide Holdings Limited include: World-Wide Reassurance Company
Limited (a United Kingdom corporation) and World-Wide Reassurance
Company (BVI) Limited (a British Virgin Islands corporation). All
corporations are 100% owned unless otherwise indicated. All entities
are California corporations unless otherwise indicated.

<PAGE>

Item 27. Number of Contractholders as of October 23, 1997

12,267

Item 28. Indemnification

(a) The Distribution Agreement between Pacific Life and PMD
provides substantially as follows:

Pacific Life hereby agrees to indemnify and hold harmless PMD, its
officers, directors, and employees for any expenses (including legal
expenses), losses, claims, damages, or liabilities incurred by reason
of any untrue or alleged untrue statement or representation of a
material fact or any omission or alleged omission to state a material
fact required to be stated to make other statements not misleading, if
made in reliance on any prospectus, registration statement, post-
effective amendment thereof, or sales materials supplied or approved
by Pacific Life or the Separate Account. Pacific Life shall reimburse
each such person for any legal or other expenses reasonably incurred
in connection with investigating or defending any such loss,
liability, damage, or claim. However, in no case shall Pacific Life be
required to indemnify for any expenses, losses, claims, damages, or
liabilities which have resulted from the willful misfeasance, bad
faith, negligence, misconduct, or wrongful act of PMD.

PMD hereby agrees to indemnify and hold harmless Pacific Life, its
officers, directors, and employees, and the Separate Account for any
expenses, losses, claims, damages, or liabilities arising out of or
based upon any of the following in connection with the offer or sale
of the contracts: (1) except for such statements made in reliance on
any prospectus, registration statement or sales material supplied or
approved by Pacific Life or the Separate Account, any untrue or
alleged untrue statement or representation made; (2) any failure to
deliver a currently effective prospectus; (3) the use of any
unauthorized sales literature by any officer, employee or agent of PMD
or Broker; (4) any willful misfeasance, bad faith, negligence,
misconduct or wrongful act. PMD shall reimburse each such person for
any legal or other expenses reasonably incurred in connection with
investigating or defending any such loss, liability, damage, or claim.

(b) The Form of Selling Agreement between Pacific Mutual Life, PMD
and Various Broker-Dealers provides substantially as follows:

Pacific Mutual Life and PMD agree to indemnify and hold harmless
Selling Broker-Dealer and General Agent, their officers, directors,
agents and employees, against any and all losses, claims, damages or
liabilities to which they may become subject under the 1933 Act, the
1934 Act, or other federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or
liabilities ( or actions in respect thereof) arise out of or are based
upon any untrue statement or

<PAGE>

alleged untrue statements made not misleading in the registration
statement for the Contracts or for the shares of Pacific Select Fund
(the "Fund") filed pursuant to the 1933 Act, or any prospectus
included as a part thereof, as from time to time amended and
supplemented, or in any advertisement or sales literature approved in
writing by Pacific Mutual Life and PMD pursuant to Section IV.E. of
this Agreement.

Selling Broker-Dealer and General Agent agree to indemnify and hold
harmless Pacific Mutual Life, the Fund and PMD, their officers,
directors, agents and employees, against any and all losses, claims,
damages or liabilities to which they may become subject under the 1933
Act, the 1934 Act or other federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon: (a) any oral or written misrepresentation by
Selling Broker-Dealer or General Agent or their officers, directors,
employees or agents unless such misrepresentation is contained in the
registration statement for the Contracts or Fund shares, any
prospectus included as a part thereof, as from time to time amended
and supplemented, or any advertisement of sales literature approved in
writing by Pacific Mutual Life and PMD pursuant to Section IV.E. of
this Agreement, (b) the failure of Selling Broker-Dealer or General
Agent or their officers, directors, employees or agents to comply with
any applicable provisions of this Agreement or (c) claims by Sub-
agents or employees of General Agent or Selling Broker-Dealer for
payments of compensation or remuneration of any type. Selling Broker-
Dealer and General Agent will reimburse Pacific Mutual Life or PMD or
any director, officer, agent or employee of either entity for any
legal or other expenses reasonably incurred by Pacific Mutual Life,
PMD, or such officer, director, agent or employee in connection with
investigating or defending any such loss, claims, damages, liability
or action. This indemnity agreement will be in addition to any
liability which Broker-Dealer may otherwise have.

Item 29. Principal Underwriters

(a) PMD also acts as principal underwriter for Pacific Select
Separate Account, Pacific Select Exec Separate Account, Pacific
Select Variable Annuity Separate Account, Separate Account A,
Separate Account B, and Pacific Select Fund.

(b) For information regarding PMD, reference is made to Form B-D, SEC
File No. 8-15264, which is herein incorporated by reference.

(c) For the Registrant's fiscal year ended December 31, 1996,
Smith Barney, Inc., the Registrant's previous principal
underwriter, received $7,752,675 in net underwriting commissions.
The Registrant's current principal underwriter, Pacific Mutual
Distributors, Inc. received no commissions or compensation from
the Registrant in that fiscal year.

Item 30. Location of Accounts and Records

The accounts, books and other documents required to be maintained
by Registrant pursuant to Section 31(a) of the Investment Company
Act of 1940 and the rules under that section will be maintained
by Pacific Life at 700 Newport Center Drive, Newport Beach,
California 92660.

<PAGE>

Item 31. Management Services

Not applicable

Item 32. Undertakings

The Registrant hereby undertakes:

(a) to file a post-effective amendment to this Registration Statement
as frequently as is necessary to ensure that the audited
financial statements in this Registration Statement are never
more than 16 months old for so long as payments under the
variable annuity contracts may be accepted, unless otherwise
permitted.

(b) not applicable

(c) to deliver any Statement of Additional Information and any
financial statements required to be made available under this
Form promptly upon written or oral request.

Additional Representations

(a) The Registrant and its Depositor are relying upon American Council of
Life Insurance, SEC No-Action Letter, SEC Ref. No. 1P-6-88 (November 28, 1988)
with respect to annuity contracts offered as funding vehicles for retirement
plans meeting the requirements of Section 403(b) of the Internal Revenue Code,
and the provisions of paragraphs (1)-(4) of this letter have been complied with.

(b) REPRESENTATION PURSUANT TO SECTION 26(e) OF THE INVESTMENT COMPANY ACT
OF 1940: Pacific Life and Registrant represent that the fees and charges to be
deducted under the Variable Annuity Contract ("Contract") described in the
prospectus contained in this registration statement are, in the aggregate,
reasonable in relation to the services rendered, the expenses expected to be
incurred, and the risks assumed in connection with the Contract.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has caused this Registration Statement on
Form N-4 to be signed on its behalf by the undersigned thereunto duly authorized
in the City of Newport Beach, and the State of California on this 30th day of
October, 1997.

PACIFIC CORINTHIAN VARIABLE SEPARATE ACCOUNT
(Registrant)
By: PACIFIC LIFE INSURANCE COMPANY

By:
Thomas C. Sutton*
Chairman and Chief Executive Officer

By: PACIFIC LIFE INSURANCE COMPANY
(Depositor)

By:
Thomas C. Sutton*
Chairman and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated:
<TABLE>
<CAPTION>

Signature Title Date
<S> <C> <C>
Thomas C. Sutton* Director, Chairman of the Board ___________, 1997
and Chief Executive Officer

Glenn S. Schafer* Director and President ___________, 1997

Richard M. Ferry* Director ___________, 1997

Donald E. Guinn* Director ___________, 1997

Ignacio E. Lozano, Jr.* Director ___________, 1997

Charles A. Lynch* Director ___________, 1997

Dr. Allen W. Mathies, Jr.* Director ___________, 1997

Charles D. Miller* Director ___________, 1997

Donn B. Miller* Director ___________, 1997

Jacqueline C. Morby* Director ___________, 1997

J. Fernando Niebla* Director ___________, 1997
</TABLE>

<PAGE>

Signature Title Date
<S> <C> <C>
Susan Westerberg Prager* Director ___________, 1997

Richard M. Rosenberg* Director ___________, 1997

James R. Ukropina* Director ___________, 1997

Raymond L. Watson* Director ___________, 1997

Edward Byrd* Vice President and Controller ___________, 1997

</TABLE>
*By: _________________________ ___________, 1997
David R. Carmichael
as attorney-in-fact

(Powers of Attorney are contained in this Registration Statement for the Pacific
Corinthian Variable Separate Account as Exhibit 15.)

<PAGE>

EXHIBIT 99.1(a)

Resolution of the Board of Directors of Pacific Corinthian Life Insurance
Company authorizing the establishment of the Pacific Corinthian VIP Separate
Account
<PAGE>

EXHIBIT 99.1(a)

SECRETARY'S CERTIFICATE

PACIFIC CORINTHIAN LIFE INSURANCE COMPANY

RESOLVED, that the Board of Directors of this Corporation hereby authorizes this
Corporation to obtain approval from the appropriate regulatory authorities of an
amendment to its Certificate of Authority to issue variable life insurance
policies and variable annuity contracts and any derivative thereof being herein
collectively referred to as "variable contracts"; and

RESOLVED FURTHER, that the Board of Directors of this Corporation hereby
authorizes and directs the establishment of Separate Accounts ("Separate
Accounts") that may be required to which the amounts received by this
Corporation in connection with the sale of the Contracts shall be allocated; and

RESOLVED FURTHER, that within the Separate Accounts there may be a number of
Variable Accounts with different investment policies and objectives into which a
policyowner may direct his interests in the Separate Accounts and the Variable
Accounts; and

RESOLVED FURTHER, that the Separate Accounts are to be established and
maintained in accordance with the provisions of Section 10506 of the California
Insurance Code and the regulations promulgated under that Section; and

RESOLVED FURTHER, that any Officer of this Corporation is authorized and
directed to take whatever action may be necessary or advisable to establish and
maintain such Separate Accounts and to register, file or qualify the Contracts
for sale, including, but not limited to, determining the states or other
jurisdictions in which necessary or advisable action shall be taken to qualify,
file, or register the Contracts for sale, performing any and all acts as such
Office deems necessary or advisable to comply with the applicable laws of any
such state or jurisdiction including making any required filings with the
California Insurance Department or any other regulatory authority in California
or any other regulatory authority in any state or jurisdiction having
jurisdiction over the insurance activities of the Company or over the contracts;
performing any and all acts as such Officer deems necessary or advisable to
comply with the applicable laws of the United States including, but not limited
to, preparing and filing registration statements with the Securities and
Exchange Commission to register the Contracts or interests

1 of 2
<PAGE>

therein under the Securities Act of 1933 and the Investment Company Act of 1940
and to register the Separate Account under the Investment Company Act of 1940,
and to file an exemptive application if necessary or advisable under the
Investment Company Act of 1940 and to make such other filings or seek any
interpretations that are necessary or advisable from the Securities and Exchange
Commission or any other agency of the United States Government; or making any
filings, seek any interpretations, or make other submissions that such Officer
deems necessary or advisable with other regulatory authorities having
jurisdiction over the offer and sale of the Contracts and to execute and file
all requisite papers and documents, including, but not limited to, applications,
reports, surety bonds, irrevocable consents, powers of attorneys, and
appointments of agents for service of process, and the paying of all necessary
fees and expenses as in such Officer's judgment may be necessary or advisable.

I, AUDREY L. MILFS, do hereby certify that I am the duly elected, qualified and
acting Secretary of Pacific Corinthian life Insurance Company, a California
corporation, and as such I do hereby further certify that the foregoing is a
true and correct copy of a resolution adopted through unanimous written consent
of all the directors of Pacific Corinthian Life Insurance Company on July 22,
1992, and that said resolution has not been revoked or amended and is now in
full force and effect.

IN WITNESS WHEREOF, I have executed this certificate as Secretary of said
corporation on this 3/rd/ day of August, 1992.

/s/ AUDREY L. MILFS
Secretary

#4476

2 of 2

<PAGE>

EXHIBIT 99.1(b)

Authorization of the Establishment of Variable Accounts
<PAGE>

EXHIBIT 99.1(b)

OFFICE MEMORANDUM [Logo of Pacific Mutual Life Insurance Company]

DATE September 16, 1994

TO Ms. Marilee Roller and Mr. Glenn S. Schafer

FROM Ms. Diane N. Ledger

SUBJECT Authorization of the Establishment of Variable Accounts - Pacific
Corinthian Life Insurance Co.

We respectfully request that the following be authorized on behalf of Pacific
Corinthian Life Insurance Company:

1. The establishment of five additional Variable Accounts within the Pacific
Corinthian Variable Separate Account. Each Variable Account is to invest
exclusively in shares of each of the Managed Bond, High Yield Bond, Growth
LT, Equity Index and International Series of the Pacific Select Fund,
respectively.

2. The objectives of the Series are as follows:

a. Managed Bond - to maximize total return, consistent with prudent
investment management.

b. High Yield Bond - to seek a high level of current income.

c. Growth LT - long-term growth of capital in a manner consistent with the
preservation of capital.

d. Equity Index - to provide investment results that correspond to the
total return performance of common stocks that are publicly traded in
the United States.

e. International - to seek long-term capital appreciation primarily through
investment in equity securities of corporations domiciled in countries
other than the United States.

Authorized by: /s/ MARILEE ROLLER Date: September 16, 1994
Marilee Roller
President and Chief Operating Officer

Authorized by: /s/ GLENN S. SCHAFER Date: September 16, 1994
Glenn S. Schafer
Director and
Chief Financial Officer

<PAGE>

EXHIBIT 99.1(c)

Resolution of the Board of Directors of Pacific Corinthian Life Insurance
Company authorizing participation in the rehabilitation of First Capital Life
Insurance Company.
<PAGE>

EXHIBIT 99.1.C

SECRETARY'S CERTIFICATE

PACIFIC CORINTHIAN LIFE INSURANCE COMPANY

WHEREAS, Pacific Mutual Life Insurance Company, the sole shareholder of this
corporation, has entered into that certain agreement in connection with the
rehabilitation of First Capital Life Insurance Company dated as of July 28, 1992
(the "Plan") which, among other things, provides for the participation, as
specified therein, of this corporation in the rehabilitation of First Capital
Life Insurance Company, in conservation ("FCL").

NOW THEREFORE, BE IT RESOLVED, that the participation of this corporation in the
rehabilitation of FCL pursuant to the Plan be, and it hereby is, approved.

RESOLVED FURTHER, that the proper officers of this corporation be, and they
hereby are, authorized and directed to execute and deliver a Rehabilitation
Certificate of Contribution, Liquidity Notes, a Management Agreement, an
Assumption Reinsurance Agreement, all of which are exhibits to the Plan, and
such other agreements and documents as are specified or referred to in the Plan,
substantially in the form of the respective Exhibits attached to the Plan, with
such changes and modifications thereto as such officers shall, in their sole
discretion, deem necessary and proper in order to carry out the intent of this,
and the preceding resolution.

*****

I, AUDREY L. MILFS, do hereby certify that I am the duly elected, qualified
and acting Secretary of Pacific Corinthian Life Insurance Company, a California
corporation, and as such, I do hereby further certify that the foregoing is a
true and correct copy of a resolution adopted through unanimous written consent
of the Board of Directors of said corporation on October 26, 1992, and that said
resolution has not been revoked or amended and is now in full force and effect.

IN WITNESS WHEREOF, I have executed this certificate as Secretary of said
corporation on this 7th day of July, 1997.

/s/ AUDREY L. MILFS
Secretary

<PAGE>

EXHIBIT 99.1(d)

Resolution of the Board of Directors of Pacific Mutual Life Insurance Company
authorizing the merger with Pacific Corinthian Life Insurance Company.
<PAGE>

EXHIBIT 99.1(d)

SECRETARY'S CERTIFICATE

PACIFIC MUTUAL LIFE INSURANCE COMPANY

WHEREAS, pursuant to the authority granted by this Board of Directors, the
officers of this corporation proffered a bid (the "Bid") to rehabilitate First
Capital Life Insurance Company, in Conservation ("FCL"), and took other related
actions;

WHEREAS, the California Superior Court, Los Angeles County, has approved the
Corporation's Bid pursuant to its Order Approving and Adopting Final Plan of
Rehabilitation and Order of Rehabilitation dated July 1, 1992 (the "Order"); and

WHEREAS, in carrying out the terms of the Order, an Agreement in Connection with
the Rehabilitation of First Capital Life Insurance Company dated as of July 28,
1992 (the "Plan") between this Corporation and John Garamendi on behalf of FCL,
as the Insurance Commissioner of the State of California, has been executed and
delivered.

NOW THEREFORE, BE IT RESOLVED, that the prior acts of the officers of this
Corporation, and each of them, in proffering the Bid, obtaining the Order and in
executing and delivering the Plan and related agreements and acts be, and they
hereby are, ratified, confirmed and approved;

RESOLVED FURTHER, that the proper officers of this Corporation be, and they
hereby are, authorized to execute and deliver pursuant to the Plan, agreements
and documents specified in the Plan, including but not limited to a Management
Agreement, an Assumption Reinsurance Agreement, and such other agreements and
documents referred to in the Plan or contemplated thereby, with such amendments
and changes thereto as such officers shall in their sole discretion deem
necessary and proper in order to carry out the matters contained in the Plan and
the Order.

* * * * *

I, AUDREY L. MILFS, do hereby certify that I am the duly elected
qualified and acting Secretary of Pacific Mutual Life Insurance Company, a
California corporation, and I do hereby further certify that the foregoing is a
true and correct copy of a resolution adopted at a meeting of the Board of
Directors of said corporation held on October 28, 1992, at which a quorum was
present and voted in favor thereof, and that said resolution has not been
revoked or amended and is now in full force and effect.

IN WITNESS WHEREOF, I have executed this Certificate as Secretary of
said corporation on this 7th day of July, 1997.

/s/ Audrey L. Milfs
-------------------
Secretary

<PAGE>

EXHIBIT 99.1(e)

Resolution of the Board of Directors of Pacific Life Insurance Company
authorizing conformity to the terms of the current Bylaws
<PAGE>

PACIFIC LIFE INSURANCE COMPANY
CERTIFIED COPY OF RESOLUTION OF BOARD OF DIRECTORS

I, AUDREY L. MILFS, do hereby certify that I am the duly elected, qualified
and acting Secretary of Pacific Life Insurance Company (formerly Pacific Mutual
Life Insurance Company), a California corporation, and as such I do hereby
further certify that the following is a true and correct copy of a resolution
adopted at a meeting of the Board of Directors of said corporation held on the
27/th/ day of August, 1997, at which a quorum was present and voted in favor
thereof, and that said resolution has not been revoked or amended and is now in
full force and effect.

RESOLVED, that on and after September 1, 1997, any provision of any
resolution of the Board of Directors or consent of the members of this
Corporation adopted prior to the date hereof that conflicts or is inconsistent
with the Bylaws of this Corporation, be, and they hereby are, without further
action of the Board of Directors, amended to the extent necessary to conform
such provision to the terms of the current Bylaws of this Corporation.

IN WITNESS WHEREOF, I have executed this certificate as Secretary of said
corporation on this 22/nd/ day of October, 1997.

/s/ AUDREY L. MILFS
Secretary

<PAGE>

EXHIBIT 99.3(a)

Form of Distribution Agreement between Pacific Mutual Life and Pacific Mutual
Distributors, Inc. ("PMD")
<PAGE>

DISTRIBUTION AGREEMENT

AGREEMENT made as of the ______ day of __________________, 1997, by and
between Pacific Life Insurance Company, a California company, ("Pacific Life")
on its own behalf and on behalf of its Pacific Corinthian Variable Separate
Account (the "Separate Account"), and Pacific Mutual Distributors, Inc., a
California corporation ("PMD").

WHEREAS, Pacific Life has established and maintains the Separate Account, a
separate investment account, for the purpose of selling variable annuity
contracts ("Contracts") to commence after the effectiveness of the Registration
Statement relating thereto filed with the Securities and Exchange Commission on
Form N-4 pursuant to the Securities Act of 1933, as amended (the "1933 Act"),
through PMD, acting as general agent of Pacific Life;

WHEREAS, the Separate Account is or will be registered as a unit investment
trust under the Investment Company Act of 1940 (the "1940 Act");

WHEREAS, PMD is registered as a broker-dealer under the Securities Exchange
Act of 1934 (the "1934 Act") and is a member of the National Association of
Securities Dealers, Inc. ("NASD"); and

WHEREAS, Pacific Life desires to retain PMD as the distributor and
principal underwriter to provide for the sale and distribution to the public of
any Contracts issued by Pacific Life and funded by interests in the General
Account of Pacific Life and in the Separate Account and PMD is willing to render
such services;

NOW THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, the parties agree as follows:

1. Principal Underwriter. Pacific Life hereby appoints PMD, during the
term of this Agreement, subject to the registration requirements of the 1933 Act
and the 1940 Act and the provisions of the 1934 Act, to be the distributor and
principal underwriter for the sale of any Contracts to the public in each state
and other jurisdiction in which the Contracts may be lawfully sold. Pacific Life
also appoints PMD as its independent general agent for sale of its Contracts
(including any riders which Pacific Life may make available in connection
therewith or any contracts for which the Contracts may be exchanged or
converted) and for sale of such other annuity contracts or insurance contracts
as Pacific Life may, from time to time, authorize in writing by amendment
hereto. PMD shall offer the Contracts for sale and distribution at premium rates
set by Pacific Life.

Notwithstanding any other provision of this Agreement, it is understood and
agreed that Pacific Life shall at all times retain the ultimate responsibility
for and control of all functions performed pursuant to this Agreement, and for
marketing any and all Contracts, and reserves the right to direct, approve or
disapprove any action hereunder taken on its behalf by PMD.
<PAGE>

2. Selling Agreements. PMD is hereby authorized to enter into separate
written agreements, on such terms and conditions as PMD determines are not
inconsistent with this Agreement, with such organizations which agree to
participate as a general agent and/or broker-dealer in the distribution of the
Contracts and to use their best efforts to solicit applications for Contracts.
Any such broker-dealer (hereinafter "Broker") shall be both registered as a
broker-dealer under the 1934 Act and a member of the NASD. Except as provided
in Section 3 hereof, PMD shall be responsible for ensuring that Broker and its
agents or representatives and general agent and its sub-agents soliciting
applications for Contracts shall be duly and appropriately licensed, registered
and otherwise qualified for the sale of any such Contracts (and the riders and
other contracts offered in connection therewith) under the annuity laws and any
applicable blue sky laws of each state or other jurisdiction in which such
Contracts may be lawfully sold and in which Pacific Life is licensed to sell
such Contracts. Pacific Life shall undertake to appoint Broker's qualified
agents or representatives and general agent's sub-agents as life insurance
agents of Pacific Life, provided that Pacific Life reserves the right to refuse
to appoint any proposed representative, agent, or sub-agent, or once appointed,
to terminate such appointment. PMD shall be responsible for ensuring that Broker
and general agent supervise its agents, representatives, or sub-agents.

3. Life Insurance Agents. Pacific Life shall be responsible for ensuring
that Broker and its agents or representatives and general agent and its sub-
agents meet all qualifications and hold any licenses or authorizations that may
be required for the solicitation or sale of any Contracts under the insurance
laws of the applicable jurisdictions.

4. Suitability. Pacific Life desires to ensure that Contracts will be
sold to purchasers for whom the Contract will be suitable. PMD shall take
reasonable steps to ensure that the various representatives of Broker and sub-
agents of general agents shall not make recommendations to an applicant to
purchase a Contract in the absence of reasonable grounds to believe the purchase
of the Contract is suitable for such applicant. While not limited to the
following, a determination of suitability shall be based on information
furnished to a representative or sub-agent after reasonable inquiry of such
applicant concerning the applicant's other security holdings, retirement and
investment objectives, financial situation and needs, and the likelihood that
the applicant will continue to make any premium payments contemplated by the
Contracts and will keep the Contract in force for a sufficient period of time so
that Pacific Life's acquisition costs are amortized over a reasonable period
of time.

5. Conformity with Registration Statement and Approved Sales Materials.
In performing its duties as distributor, PMD will act in conformity with the
registration statement and with the instructions and directions of Pacific Life,
the requirements of the 1933 Act, the 1940 Act, the 1934 Act, and all other
applicable federal and state laws and regulations. PMD shall not give any
information nor make any representations, concerning any aspect of the Contract
or of Pacific Life's operations to any persons or entity unless such information
or representations are contained in the registration statement and the pertinent
prospectus filed with the Securities and Exchange Commission, or are contained
in sales or promotional literature approved by Pacific Life. PMD will not use
and will take reasonable steps to ensure Broker will not use any sales promotion
material and advertising which has not been previously approved by Pacific Life.
<PAGE>

6. Applications. Completed applications for Contracts solicited by such
Broker through its agents or representatives or by general agent through its
sub-agents shall be transmitted directly to Pacific Life. All payments under the
Contracts shall be made by check to Pacific Life or by other method acceptable
to Pacific Life, and if received by PMD, shall be held at all times in a
fiduciary capacity and remitted promptly to Pacific Life. All such payments will
be the property of Pacific Life. Pacific Life has the sole authority to approve
or reject such applications or payments and maintains ultimate responsibility
for underwriting. Anything in this Agreement to the contrary notwithstanding,
Pacific Life retains the ultimate right to control the sale of the Contracts and
to appoint and discharge life insurance agents of Pacific Life.

7. Standard of Care. PMD shall be responsible for exercising reasonable
care in carrying out the provisions of this Agreement.

8. Reports and Records. PMD shall be responsible for maintaining and
preserving accurate records relating to matters pertaining to this Agreement and
the Broker and general agent and their agents, representatives or sub-agents who
are licensed, registered and otherwise qualified to sell the Contracts, as
required by applicable laws and regulations, or as Pacific Life may reasonably
request for its own record-keeping or accounting purposes; calculating and
furnishing the fees payable to Brokers or general agents; and for furnishing
periodic reports to Pacific Life as to the sale of Contracts made pursuant to
this Agreement. The books, accounts and records of Pacific Life, the Separate
Account and PMD shall be maintained so as to clearly and accurately disclose the
nature and details of the transactions.

9. Investigation and Procedures. PMD and Pacific Life agree to
cooperate fully in any regulatory investigation or proceeding or judicial
proceeding arising in connection with any Contracts distributed under this
Agreement. PMD further agrees to furnish regulatory authorities with any
information or reports in connection with such services which may be requested
in order to ascertain whether the operations of Pacific Life and the Separate
Account are being conducted in a manner consistent with applicable laws and
regulations. PMD and Pacific Life further agree to cooperate fully in any
securities regulatory investigation or proceeding with respect to Pacific Life,
PMD, their affiliates and their agents or representatives to the extent that
such investigation or proceeding is in connection with any Contracts distributed
under this Agreement. Without limiting the foregoing:

(a) PMD will be notified promptly of any customer complaint or notice of
any regulatory investigation or proceeding or judicial proceeding received by
Pacific Life with respect to PMD or any agent, representative, or sub-agent of a
Broker or general agent or which may affect Pacific Life's issuance of any
contract sold under this Agreement; and

(b) PMD will promptly notify Pacific Life of any customer complaint or
notice of any regulatory investigation or proceeding received by PMD or its
affiliates with respect to PMD or any agent, representative, or sub-agent of a
Broker or general agent in connection with any Contract distributed under this
Agreement or any activity in connection with any such contract.
<PAGE>

In the case of a customer complaint, PMD and Pacific Life will cooperate in
investigating such complaint and any response will be sent to the other party to
this Agreement for approval not less than five business days prior to it being
sent to the customer or regulatory authority, except that if a more prompt
response is required, the proposed response shall be communicated by telephone,
telegraph or telecopier.

10. Indemnification. Pacific Life hereby agrees to indemnify and hold
harmless PMD and its officers and directors, and employees for any expenses
(including legal expenses), losses, claims, damages, or liabilities incurred by
reason of any untrue or alleged untrue statement or representation of a material
fact or any omission or alleged omission to state a material fact required to be
stated to make other statements not misleading, if made in reliance on any
prospectus, registration statement, post-effective amendment thereof, or sales
materials supplied or approved by Pacific Life or the Separate Account. Pacific
Life shall reimburse each such person for any legal or other expenses reasonably
incurred in connection with investigating or defending any such loss, liability,
damage, or claim. However, in no case shall Pacific Life be required to
indemnify for any expenses, losses, claims, damages or liabilities which have
resulted from the willful misfeasance, bad faith, negligence, misconduct, or
wrongful act of PMD.

PMD hereby agrees to indemnify and hold harmless Pacific Life, its
officers, directors, and employees, and the Separate Account for any expenses,
losses, claims, damages, or liabilities arising out of or based upon any of the
following in connection with the offer or sale of any Contract: 1) except for
such statements made in reliance on any prospectus, registration statement or
sales material supplied or approved by Pacific Life or the Separate Account, any
untrue or alleged untrue statement or representation made; 2) any failure to
deliver a currently effective prospectus; 3) the use of any unauthorized sales
literature by any officer, employee, agent, or sub-agent of PMD, Broker or
general agent; or 4) any willful misfeasance, bad faith, negligence, misconduct
or wrongful act. PMD shall reimburse each such person for any legal or other
expenses reasonably incurred in connection with investigating or defending any
such loss, liability, damage, or claim.

Promptly after receipt by a party entitled to indemnification ("Indemnified
Party") of notice of the commencement of any action, if a claim for
indemnification in respect thereof is to be made against Pacific Life or PMD
("Indemnifying Party") such Indemnified Party will notify Indemnifying Party in
writing of the commencement thereof, but failure to notify the Indemnifying
Party of any claim shall not relieve it from any liability which it may have to
the person against whom such action is brought otherwise than on account of this
Agreement contained in this Section 10. The Indemnifying Party will be entitled
to participate in the defense of the Indemnified Party, but such participation
will not relieve such Indemnifying Party of the obligation to reimburse the
Indemnified Party for reasonable legal and other expenses incurred by such
Indemnified Party in defending himself.

11. Agent of Pacific Life or Separate Account. Any person, even though
also an officer, director, employee, or agent of PMD, who may be or become an
officer, director, employee, or agent of Pacific Life or the Separate Account
shall be deemed, when rendering services to Pacific Life or the Separate Account
or acting in any business of Pacific Life or the Separate Account, to be
rendering such services to or acting solely for Pacific Life or the Separate
Account and not as an officer, director, employee, or agent or one under the
control or
<PAGE>

direction of PMD even though paid by PMD. Likewise, any person, even though also
an officer, director, employee, or agent of Pacific Life or the Separate
Account, who may be or become an officer, director, employee, or agent of PMD
shall be deemed when rendering services to PMD or acting in any business of PMD
to be rendering such services to or acting solely for PMD and not as an officer,
director, employee, or agent or one under the control or direction of Pacific
Life or the Separate Account even though paid by Pacific Life or the Separate
Account.

12. Books and Records. It is expressly understood and agreed that all
documents, reports, records, books, files, and other materials relating to this
Agreement and the services to be performed hereunder shall be the sole property
of Pacific Life and the Separate Account and that any such property held by PMD
shall be held by PMD only as agent, during the effective term of this Agreement.
This material shall be delivered to Pacific Life upon the termination of this
Agreement free from any claim or retention of rights by PMD. During the term of
this Agreement and for a period of three years from the date of termination of
this Agreement, PMD will not disclose or use any records or information and will
regard and preserve as confidential all information related to the business of
Pacific Life or the Separate Account that may be obtained by PMD from any source
as a result of this Agreement and will disclose such information only if Pacific
Life or the Separate Account has authorized such disclosure, or if such
disclosure is expressly required by applicable federal or state regulatory
authorities. PMD further acknowledges and agrees that, in the event of a breach
or threatened breach by it of the provisions of this Section 12, Pacific Life
will have no adequate remedy in moneys or damages and, accordingly, Pacific Life
shall be entitled in its discretion to seek an injunction against such breach.
However, no specification in this Agreement of a specific legal or equitable
remedy shall be construed as a waiver or prohibition against any other legal or
equitable remedy in the event of a breach of a provision of this Agreement.

13. Employees. PMD will not employ, except with the prior written
approval of the Commissioner of Insurance of the State of California, in any
material connection with the handling of the Separate Account's assets any
person who, to the knowledge of PMD:

(a) in the last 10 years has been convicted of any felony or misdemeanor
arising out of conduct involving embezzlement, fraudulent conversion, or
misappropriation of funds or securities, or involving violations of Sections
1341, 1342, or 1343 of Title 18, United States Code; or

(b) within the last 10 years has been found by any state regulatory
authority to have violated or has acknowledged violation of any provision of any
state insurance law involving fraud, deceit, or knowing misrepresentation; or

(c) within the last 10 years has been found by any federal or state
regulatory authorities to have violated or have acknowledged violation of any
provision of federal or state securities laws involving fraud, deceit, or
knowing misrepresentation.

14. Termination. This Agreement shall terminate automatically upon its
assignment without the prior written consent of both parties. This Agreement
may be terminated at any time, for any reason, by either party on 60 days'
written notice to the other party, without the payment of any penalty. Upon
termination of this Agreement, all authorizations, rights and obligations shall
cease
<PAGE>

except the obligation to settle accounts hereunder, including commissions on
premiums subsequently received for Contracts in effect at time of termination,
and the agreements contained in Sections 9 and 10 hereof.

15. Regulation. This Agreement shall be subject to the provisions of the
1940 Act and the 1934 Act and the rules, regulations and rulings thereunder, and
of the applicable rules and regulations of the NASD, and applicable state
insurance law and other applicable law, from time to time in effect, and the
terms hereof shall be interpreted and construed in accordance therewith.

16. Independent Contractor. PMD shall act as an independent contractor
and nothing herein contained shall constitute PMD or its agents, officers or
employees as agents, officers, or employees of Pacific Life in connection with
the sale of any Contract.

17. Notices. Notices of any kind to be given to PMD by Pacific Life or the
Separate Account shall be in writing and shall be duly given if mailed, first
class postage prepaid, or delivered to PMD at 700 Newport Center Drive, Newport
Beach, California 92660, or at such other address or to such individual as shall
be specified by PMD. Notices of any kind to be given to Pacific Life or the
Separate Account shall be in writing and shall be duly given if mailed, first
class postage prepaid, or delivered to them at 700 Newport Center Drive, Post
Office Box 9000, Newport Beach, California 92660, or at such other address or to
such individual as shall be specified by Pacific Life.

If any provisions of this Agreement shall be held or made invalid by a
court decision, statute rule or otherwise, the remainder of this Agreement shall
not be affected thereby.

18. Entire Agreement; Amendments. This Agreement (a) sets forth the
entire understanding of the parties with respect to the subject matter hereof;
(b) incorporates and merges any and all previous agreements, understandings, and
communications, oral or written; and (c) may not be modified, amended, or waived
except by a written instrument duly executed by the party against whom such
modification, amendment, or waiver is sought to be enforced.

19. Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.

20. Governing Law. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of California.
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.

PACIFIC LIFE INSURANCE COMPANY

By: __________________________________________
Chairman and Chief Executive Officer

ATTEST:

____________________________________
Secretary

PACIFIC MUTUAL DISTRIBUTORS, INC.

By: __________________________________________
President

WITNESS:

____________________________________

<PAGE>

EXHIBIT 99.3(b)

Form of Selling Agreement between Pacific Mutual Life, PMD and various
Broker-Dealers
<PAGE>

EXHIBIT 99.3(b)

PACIFIC MUTUAL LIFE INSURANCE COMPANY
VARIABLE CONTRACT SELLING AGREEMENT

This Agreement ("Agreement") is made as of September, 1996 by and among
PACIFIC MUTUAL LIFE INSURANCE COMPANY ("Pacific Mutual"), PACIFIC MUTUAL
DISTRIBUTORS, INC. ("Distributor"), a broker/dealer registered with the
Securities and Exchange Commission ("SEC") pursuant to the Securities Exchange
Act of 1934, as amended ("Exchange Act"), and a member of the National
Association of Securities Dealers, Inc. ("NASD"), SMITH BARNEY, INC., a
broker/dealer registered with the SEC pursuant to the Exchange Act and a member
of the NASD ("Broker/Dealer"), SBHU LIFE AGENCY, INC. and each listed
subsidiary and affiliated agency listed on Exhibit A which is attached hereto
and made a part hereof (jointly and severally referred to herein as "Agency");
Broker/Dealer and Agency jointly and severally hereinafter referred to
collectively as "Selling Entities".

This Agreement is for the purpose of providing for the distribution of
certain variable life insurance policies and/or annuity contracts set forth in
Schedule A hereto and of any successor additional SEC registered insurance
products (as discussed in Paragraph 3 of this Agreement) issued by Pacific
Mutual and approved for distribution by Distributor through representatives who
are both (a) state insurance licensed and appointed agents of Pacific Mutual (if
and as required by state insurance law), and associated with Agency and (b)
NASD Subagents of Broker/Dealer who are appropriately licensed with the NASD
and with the relevant states pursuant to state securities law (if and as
required by state law). The variable life insurance policies and/or variable
annuity contracts set forth in Schedule A which is attached hereto, and made a
part hereof, as such Schedule may be amended and/or restated from time to time
to include any successor or additional SEC registered insurance products, and
together with any riders or endorsements to such policies and contracts,
certificates relating to such policies and contracts, supplemental contracts and
forms are referred to collectively herein as the "Contracts".

1. APPOINTMENT

In consideration of the mutual promises and covenants contained in this
Agreement, Pacific Mutual and Distributor appoint Broker/Dealer and those
persons associated with Agency who are NASD Registered Representatives (or
Subagents as defined in paragraph 4 below) of Broker/Dealer, state insurance
licensed, and appointed by Pacific Mutual (if and as required by state law) to
procure applications for the Contracts.

These appointments are not deemed to be exclusive in any manner and extend
only to those jurisdictions set forth in Schedule B which is attached hereto and
made a part hereof, as such Schedule B may be amended from time to time by
Pacific Mutual in its sole discretion, and with written notice to Selling
Entities, where the Contracts specified in such Schedule B have been approved
for sale.

Pacific Mutual will provide Selling Entities with written advanced notice
regarding the jurisdictions in which Pacific Mutual is authorized to solicit
applications for the Contracts and any limitations on the availability of such
Contracts in any jurisdiction.

2. RESPONSIBILITIES

Broker/Dealer is authorized to collect the premium on the Contracts and
must remit such premiums to Pacific Mutual in the manner set forth in the
applicable Compensation Schedule set forth in the applicable Schedule D.
Contract applications shall be taken only on preprinted, state-appropriate
application forms supplied by Pacific Mutual or in an electronic format approved
by Pacific Mutual and by Smith Barney. All completed applications, supporting
documents and payments are the sole property of Pacific Mutual and must be
promptly delivered to Pacific Mutual. All applications are subject to
acceptance by Pacific Mutual at its sole discretion; provided, however, that
Pacific Mutual will not discriminate based upon race, creed or color.

3. NEW PRODUCTS

Distributor may propose and Pacific Mutual may issue additional or
successor products, in which event Broker/Dealer will be informed in writing and
in advance of the new product and its related Compensation Schedule. Pacific
Mutual may not accept business for any new product until Broker/Dealer gives
written approval of such product to be sold through its Subagents. If and/or
when Broker/Dealer provides Pacific Mutual with

1
<PAGE>

written approval of such new product(s) and agrees to its related Compensation
Schedule (which may be in the form of an executed Compensation Schedule for such
new product(s)), which shall be attached to and made a part of this Agreement as
an amendment or addendum to the applicable Schedule D, or as a new Schedule D
hereto, and receives the amendment(s) of Schedules A and B to this Agreement to
name such new product(s) and to identify where their offer and sale has been
approved, then Pacific Mutual and Distributor may distribute such new products
through the Selling Entities. If Broker/Dealer does not give written approval to
a new product and an order for same is accepted by Pacific Mutual, Distributor,
their agents or employees, then Distributor will be responsible for the
unapproved sale. Approval of new products by Broker/Dealer shall be deemed
approval by Agency.

4. SUBAGENTS

Agency is authorized to appoint Subagents to solicit sales of the Contracts
("Subagents"); provided, however, that Pacific Mutual shall have the right in
its sole reasonable discretion to terminate the appointment of any Subagent upon
notice from Pacific Mutual to Agency. Agency covenants and agrees that no
Subagent shall commence solicitation nor aid, directly or indirectly, in the
solicitation of any application for any Contract unless, at the time of such
solicitation or aid, such Subagent is appropriately licensed for such product
under applicable insurance laws and is an NASD Registered Representative of
Broker/Dealer.

Selling Entities each represent that they have, for each Subagent,
fulfilled all requirements set forth in the form of general letter of
recommendation set forth in Schedule C which is attached hereto and made a part
hereof; and agree, upon reasonable advance written request by Pacific Mutual, to
furnish proof of such fulfillment as Pacific Mutual may require in connection
with any investigation or inquiry conducted by Pacific Mutual or any
governmental or regulatory body.

5. SALES MATERIAL

Neither Selling Entities nor Pacific Mutual nor any of their respective
Subagents, officers, directors, employees, affiliates, representatives or agents
shall utilize in their marketing efforts for the Contracts any written brochure,
descriptive literature, printed and published material, audio-visual material or
standard letters without notice to and approval by each other; provided,
however, that prospectuses, statements of additional information and supplements
or amendments thereto, and annual and semi-annual reports provided to Selling
Entities by Pacific Mutual or Distributor shall not require approval of Selling
Entities. Pacific Mutual and Broker/Dealer agree to submit to each other for
the other's review as to content, any advertising and/or marketing materials
prepared by the other which it wishes the other party to use. If either party
disapproves any materials, it will inform the other party of the basis for its
disapproval. If the disapproval cannot be resolved to the satisfaction of
Broker/Dealer, Broker/Dealer will have no obligation to use such materials in
its solicitation of the Contracts. If the disapproval cannot be resolved to the
satisfaction of Pacific Mutual, Broker/Dealer will not be able to use such
materials in its solicitation of the Contracts. In order for either party to
review and approve materials not produced by the other, the non-producing party
must provide the other party with evidence that any material proposed to be used
was filed with the NASD in accordance with applicable rules and copies of
correspondence with the NASD relating to the proposed material. All advertising
material and sales promotional material produced and published by Selling
Entities or their agents shall be and remain the sole and exclusive property of
Selling Entities and shall be used solely and exclusively by Selling Entities
and their agents. Such material shall not be used by Pacific Mutual nor its
agents without Broker/Dealer's prior consent. All advertising material and
sales promotional material produced or published by Pacific Mutual or
Distributor shall remain the sole and exclusive property of Pacific Mutual
and/or Distributor, respectively; and such material shall not be used by Selling
Entities or by its agents without Pacific Mutual's prior written consent.

6. RECORDS

In accordance with the requirements of federal and state laws and rules of
applicable self-regulatory organizations ("SROs"), as defined in the Exchange
Act, including but not limited to the Rules of Fair Practice of the NASD ("NASD
Rules"), all parties shall maintain complete records concerning the sale of the
Contracts, information regarding the customers relating to the sale and/or
servicing of the Contracts, including the manner and extent of distribution of
any sales, marketing or other solicitation material, shall make such records and
files available to staff of a party hereto at such times as the other party
hereto may reasonably request and shall make

2
<PAGE>

such material available to personnel of state insurance departments, the NASD or
other regulatory agency, including the SEC, that have regulatory authority over
the parties to this Agreement.

7. DELIVERY OF PROSPECTUSES

Selling Entities covenant and agree that each solicitation, will be made by
use of a currently effective prospectus, that a prospectus will be delivered
concurrently with each sales presentation or upon confirmation of a sale, that
Selling Entities shall instruct and supervise Subagents that no statements shall
be made by Subagents to a client superseding or controverting any statement made
in the prospectus. Pacific Mutual and Distributor shall furnish Selling
Entities, at no cost to Selling Entities, reasonable quantities of currently
effective prospectuses and such other material as Pacific Mutual and Distributor
deem necessary to aid in the solicitation of Contracts. Such material shall be
delivered to Selling Entities prior to the effective date of this Agreement.

8. BROKER/DEALER REPRESENTATIONS

Broker/Dealer represents and covenants that:

(a) Broker/Dealer is affiliated with Agency which is an entity properly
licensed under the insurance laws of the jurisdiction(s) in which Broker/Dealer
will act under this Agreement;

(b) Broker/Dealer is registered with the SEC as a broker/dealer under the
Exchange Act, a member of the NASD and will, throughout the duration of this
Agreement, remain in compliance with the requirements of the NASD and of the
Exchange Act, including but not limited to laws requiring that the Broker/Dealer
and each of its Subagents be appropriately securities registered, insurance
licensed and appointed by Pacific Mutual (if and as required by law), and such
other applicable federal or state laws;

(c) Broker/Dealer has established rules, procedures, and supervisory review
techniques necessary to train and to supervise the activities of its NASD
Subagents who are state insurance licensed;

(d) Broker/Dealer, including any Subagent, shall only sell or recommend for
sale any Contract to any person with reasonable grounds for believing, after
appropriate inquiry, that the purchase of that Contract is suitable for that
person;

(e) Upon request by Pacific Mutual and Distributor, Broker/Dealer will
furnish such appropriate records as are necessary to document the training,
licensing and supervision required by subparagraph (c) above, and client
suitability determinations required by subparagraph (d) above; provided,
however, that nothing herein shall be deemed to require Selling Entities to
create or maintain separate procedures or create new processes so long as such
procedures in effect adequately address supervisory issues raised by this
Agreement.

9. AGENCY REPRESENTATIONS

Agency represents, warrants and covenants that each Subagent will comply
fully with the requirements of state insurance law and applicable federal laws,
including but not limited to assuring appropriate state insurance licensing and
appointment by Pacific Mutual, as necessary according to state law and will
establish rules and procedures necessary to supervise the activities of licensed
and appointed agents of Pacific Mutual associated with Agency. Upon request by
Pacific Mutual or Distributor, Agency will furnish such appropriate records as
are necessary to document such supervision.

10. SELLING ENTITIES REPRESENTATIONS

Selling Entities represent that they:

(a) shall take reasonable steps to prevent payment of commissions to
employees and/or agents of Selling Entities with respect to Contracts held by
persons who were solicited in states where such employees and/or agents are not
appointed with Pacific Mutual at the time of such payments;

3
<PAGE>

(b) shall take reasonable steps to prevent solicitation of sales of
contracts to persons who reside in the states set forth in Exhibit B, which is
attached hereto and made a part hereof, by any employees and/or agents and
Subagents who are not appointed with Pacific Mutual in such states at the time
of such solicitations.

(c) shall take reasonable steps to prevent the payment of commissions to
any of its employees, agents and/or Subagents who are not appropriately
registered with the NASD and applicable states.

11. PACIFIC MUTUAL REPRESENTATIONS

(a) Pacific Mutual represents that the prospectus(es) and registration
statement(s) relating to the Contracts that are and shall be in effect from time
to time contain no untrue statements of material fact and do not omit to state
material facts, the omission of which makes any statement contained in such
prospectus(es) and registration statement(s) misleading. Further, Pacific
Mutual represents that it will file current updated information with the SEC as
required by applicable federal law and that current updated prospectuses shall
be delivered to Broker/Dealer in a timely manner.

(b) Pacific Mutual will not directly or indirectly (i) solicit applicants
provided to Pacific Mutual by Broker/Dealer or its agents for the purpose of
inducing them to purchase any products or (ii) sell, assign, transfer to,
disclose in any manner, with or without consideration any list of applicants
provided to Pacific Mutual by Broker/Dealer or its agents; provided, however,
this paragraph shall not apply to any applicant who was previously a
policyholder of Pacific Mutual nor to anything done or required to be done under
applicable law or this Agreement; and further provided that nothing herein is
intended to restrict or limit Pacific Mutual from accepting business from any
agent (not affiliated with Selling Entities) which involves or relates to a
client or applicant of Smith Barney, nor to impose any liability or
responsibility on Pacific Mutual for the acts of any agent appointed by Pacific
Mutual who is not also an employee of Pacific Mutual and a Subagent of
Distributor.

(c) Nothing in this Paragraph 11 shall be deemed to prohibit or limit
Pacific Mutual's rights or abilities to send confirmations, notices, statements,
annual and semi-annual reports and/or other communications generally sent to its
Contractholders.

(d) Pacific Mutual shall be fully liable to Broker/Dealer for any damage
caused to it by virtue of any unauthorized dissemination of Broker/Dealer's
customer lists and information regarding customers by Pacific Mutual.

(e) Pacific Mutual shall take reasonable steps to prevent payment of
commissions to Selling Entities with respect to Contracts sold to persons who
were solicited in states where Subagents are not appointed with Pacific Mutual
at the time of such payment.

(f) Pacific Mutual shall take reasonable steps to reject applications for
Contracts for persons who reside in the states set forth in Exhibit B, which are
submitted by any Subagents who are not appointed by Pacific Mutual in such
states.

(g) Pacific Mutual shall take reasonable steps to prevent the payment of
commissions to Selling Entities with respect to sales of Contracts by Subagents
who are not appropriately registered with the NASD.

(h) Pacific Mutual agrees that, with respect to Contracts as defined in
this Agreement, Pacific Mutual will notify Broker/Dealer in the event that
management of Pacific Mutual, in its ordinary course of business, becomes aware
that Subagents are attempting to circumvent this Agreement by submitting
Contracts through any broker/dealer other than Smith Barney, Inc.

12. DISTRIBUTOR REPRESENTATIONS

Distributor represents that it is a broker/dealer under the Exchange Act, a
member of the NASD and will, throughout the duration of this Agreement remain in
compliance with the requirements of the NASD and of the Exchange Act, including
but not limited to laws requiring that the Broker/Dealer and each of its

4
<PAGE>

Subagents/Registered Representatives be appropriately securities registered,
insurance licensed, and in compliance with such other applicable federal or
state laws.

13. COMPENSATION

13.1 Pacific Mutual, through Distributor, will remit to Broker/Dealer or
Agency compensation as set forth in the applicable Schedules D which are
attached hereto and made a part hereof, which payments or termination thereof
shall be governed by the administrative rules established by Pacific Mutual in
its sole discretion and agreed to by Broker/Dealer prior to the effective date
of this Agreement, which agreement shall be evidenced by execution of this
Agreement. Selling Entities shall pay all Subagents. Pacific Mutual reserves
the right not to pay compensation on a Contract, the premium for which is paid
in whole or in part by the loan or surrender value of any other life insurance
policy or annuity contract issued by Pacific Mutual.

13.2 Pacific Mutual may offset, against any claim for commission and any
other compensation payable to Broker/Dealer or Agency under this Agreement, any
indebtedness of, respectively, Broker/Dealer or Agency, whether such
indebtedness arises under this Agreement or arises in connection with the sale
of "traditional" (non-variable/non-registered) life and/or annuities products
issued by Pacific Mutual. Such indebtedness shall constitute a first lien
against any such compensation. Neither Broker/Dealer nor Agency may offset,
against any such indebtedness, any compensation accruing under this Agreement.

14. COMPLAINTS AND INVESTIGATIONS

All parties agree to cooperate fully with each other in any insurance or
securities regulatory investigation or proceeding or judicial proceeding with
respect to the parties to this Agreement and their agents or representatives to
the extent that such investigation or proceeding is in connection with the
Contracts distributed under this Agreement. Without limiting the foregoing:

(a) All parties shall promptly notify each other of any complaint or
comment regarding the Contracts and/or any allegation that any party or its
agents or employees violated any law, regulation or rule in soliciting
applications for or servicing the Contracts. All parties shall promptly
investigate such complaint or allegation, take appropriate remedial measures and
notify the other parties of same. Each party shall provide the other parties
with full details of and correspondence relating to any of the foregoing,
including copies of all legal documents pertaining thereto.

(b) All parties shall cooperate fully with the other parties in any
regulatory proceeding, arbitration proceeding or judicial proceeding involving
the solicitation of applications for or the servicing of Contracts.

15. INDEMNIFICATION

15.1 Pacific Mutual and Distributor agree to, jointly and severally,
indemnify and hold harmless Selling Entities, their officers, directors, agents
and employees, against any and all losses, claims, damages, or liabilities
including, without limitation, reasonable attorney's fees and expenses to which
they may become subject under the Securities Act, the Exchange Act, the
Investment Company Act of 1940, or other federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact or any
omission or alleged omission to state a material fact required to be stated or
necessary to make the statements made not misleading in the registration
statement for the Contracts or for the shares of Pacific Select Fund (the
"Fund") filed pursuant to the Securities Act, or any prospectus included as a
part thereof, as from time to time amended and supplemented, or in any
advertisement or sales literature produced by Pacific Mutual or Distributor,
including seminar materials or the form of illustration for Contracts provided
by Pacific Mutual and Distributor for use in solicitation relating to the
Contracts. This indemnification shall apply to the accuracy of the content of
any illustration provided by Pacific Mutual or Distributor to Selling Entities;
provided, however, that neither Pacific Mutual nor Distributor shall be
responsible for the assumptions given to Pacific Mutual by Subagents and used
(i.e., hypothetical expected returns) in illustrations produced for Selling
Entities nor for insuring that sufficient numbers of illustrations are produced
or delivered to the client. In addition, Pacific Mutual and Distributor agree
to include in the foregoing indemnification their failure to deliver updated

5
<PAGE>

prospectuses to Broker/Dealer in a timely manner and any act or omission of a
director, officer or employee of Pacific Mutual or Distributor, proven to be in
violation of a state or federal statute by a court of competent jurisdiction or
a panel of arbitrators constituted to hear the controversy, including, without
limitation, any failure of Pacific Mutual or Distributor to be appropriately
registered or licensed.

15.2 Selling Entities agree to, jointly and severally, hold harmless and
indemnify Pacific Mutual and Distributor and any of their respective affiliates,
employees, officers, agents and directors (collectively, "Indemnified Persons")
against any and all losses, claims, damages, liabilities and expenses
(including, without limitation, losses occasioned by any rescission of any
Contract pursuant to a "free look" provision (as defined by the terms of any
Contract) or by any return of initial purchase payment in connection with an
incomplete application including, without limitation, reasonable attorneys' fees
and expenses and any loss attributable to the investment experience under a
Contract, that any Indemnified Person may incur from liabilities resulting or
arising out of or based upon (a) any untrue or alleged untrue statement other
than statements contained in the registration statement or prospectus relating
to any Contract, (b) any inaccurate or misleading, or allegedly inaccurate or
misleading sales material used in connection with any marketing or solicitation
relating to any Contract, other than current sales material which is provided
preprinted by Pacific Mutual or Distributor, (c) any use of any sales material
that either has not been specifically approved in writing by Pacific Mutual or
Distributor or that, although previously approved in writing by Pacific Mutual
or Distributor, has been disapproved, in writing by either of them, for further
use, or (d) any act or omission of a Subagent, director, officer or employee of
Selling Entities, proven to be in violation of a state or federal statute by a
court of competent jurisdiction or a panel of arbitrators constituted to hear
the controversy, including, without limitation, any failure of Selling Entities
or any Subagent to be registered as required as a broker/dealer under the 1934
Act, or licensed in accordance with the rules of any applicable self-regulatory
organization or insurance regulator, provided, however, that this
indemnification shall not apply to a "free look" caused by the act or omission
by Pacific Mutual or Distributor, including officers, directors or employees of
Pacific Mutual or Distributor.

16. FIDELITY BOND

Selling Entities each represent and covenant that all directors, officers,
employees and Subagents of Selling Entities licensed pursuant to this Agreement
or who have access to funds of Pacific Mutual are and will continue to be
covered by a comprehensive crime coverage policy (fidelity bond) including
coverage for larceny, embezzlement and other defalcation. This bond shall be
maintained at Broker/Dealer's and/or Agency's expense. Such bond shall be at
least equivalent to the minimal coverage required under the NASD Rules, and
which includes coverage of life insurance and annuity business. Selling
Entities acknowledge that Pacific Mutual may require evidence that such coverage
is in force, and Broker/Dealer or Agency shall promptly give notice to Pacific
Mutual of any notice of cancellation or change of coverage.

17. LIMITATIONS OF AUTHORITY

The Contract forms are the sole property of Pacific Mutual. No person or
party other than Pacific Mutual has the right or authority to: (i) make, alter,
modify, discharge or rescind any Contract; (ii) waive any provision with respect
to any Contract; (iii) incur indebtedness or liability, or expend or contract
for expenditure of any funds on behalf of Pacific Mutual or the Contracts; (iv)
extend the time for payment of any premiums, bind Pacific Mutual to reinstate
any terminated Contracts, or accept notes for payment of premiums; (v) enter
into any proceeding in a court of law or before a regulatory agency in the name
of or on behalf of Pacific Mutual; or (vi) institute or file any response to any
legal proceeding in connection with any matter pertaining to the Contracts on
behalf of Pacific Mutual without the prior written consent of Pacific Mutual
(except that if Selling Entities themselves are named as a party or parties in
such proceedings each named party may enter into legal proceedings on its own
behalf without the written consent of Pacific Mutual).

18. GENERAL PROVISIONS

18.1 WAIVER

Failure of any of the parties to insist promptly upon strict compliance
with any of the obligations of any other party under this Agreement will not be
deemed to constitute a waiver of the right to enforce strict compliance.

6
<PAGE>

18.2 INDEPENDENT CONTRACTORS

Selling Entities are each an independent contractor and not an employee or
subsidiary of Pacific Mutual or Distributor. Nothing contained in this
Agreement or otherwise shall be deemed to make any Subagent of Broker/Dealer or
any Subagent appointed by Agency an employee or agent of Pacific Mutual or
Distributor for tax or any other purposes. Neither Pacific Mutual nor
Distributor shall have any responsibility for training or supervision of any
such Subagent or registered representative or of any other employee or affiliate
of any Selling Entities.

18.3 ASSIGNMENT

This Agreement shall not be assigned, nor the duties delegated, by either
party without the prior written consent of the other party, which consent shall
not be unreasonably withheld or delayed. Notwithstanding the foregoing, the
right to receive commissions under this Agreement shall be freely assignable,
subject to applicable law, in the event either party is merged with or purchased
by another entity. Each party agrees to notify the other party within 20
(twenty) days of any change in their corporate ownership. Thereafter, each
party shall have the right to immediately terminate this Agreement by providing
written notice to the other party. Any purported assignment in violation of
this Paragraph 18.3 is void.

18.4 NOTICE

Any notice required or otherwise given pursuant to this Agreement may be
given electronically by facsimile or electronic mail (but not orally by
telephone) or by mail, postage paid, (including any express mail service),
transmitted to the last address communicated by the receiving party to the other
parties to this Agreement. The current address for mailing purposes of this
Agreement shall be set forth on the signature page.

18.5 SEVERABILITY

To the extent this Agreement may be in conflict with any applicable law or
regulation, this Agreement shall be construed in a manner consistent with such
law or regulation. The invalidity or illegality of any provisions of this
Agreement shall not be deemed to affect the validity or legality of any other
provision of this Agreement.

18.6 AMENDMENT

Except as expressly provided herein, this Agreement may be amended only by
a writing signed by all parties. The Schedules hereto may be amended by Pacific
Mutual or Distributor upon 30 days' written notice to Broker/Dealer and Agency
which shall be deemed received the earlier of actual receipt or 30 days after
mailing or transmission. The submission of an application for the Contracts by
Selling Entities or Agency after the date of any such amendment shall constitute
such party's agreement to such amendment. No amendment will impair the right to
receive commissions as accrued with respect to Contracts issued and applications
procured prior to the amendment. This Agreement does not apply to any variable
life or annuity contract which was initially issued by First Capital Corporation
("FCC Contracts") which is currently carried by Pacific Corinthian Life
Insurance Company and which may, in the future, be deemed by operation of law to
become a Pacific Mutual contract. FCC Contracts may only be covered by this
Agreement if an amendment to that effect is signed by all parties.

18.7 TERMINATION

This Agreement may be terminated by any party for any reason upon 30 days'
prior written notice. It may be terminated, for cause, by any party
immediately. Termination of this Agreement shall not impair the right to
receive commissions accrued with respect to applications procured prior to the
termination except as otherwise specifically provided in the applicable Schedule
D hereto. Selling Entities agree that, following the termination of this
Agreement for any reason, they will not enter into any plan, program scheme or
course of action which would systematically attempt to attract Contract owners
away from Pacific Mutual, except that Selling Entities may always recommend a
move to another company's product if such move would be more suitable than
Pacific Mutual's products for a particular client or clients or in the event of
a detrimental change in the financial stability of Pacific Mutual which Selling
Entities believe would jeopardize their clients (as determined by Selling
Entities). Termination of this Agreement shall not terminate Selling Entities'
rights to commissions on policies sold by Selling Entities prior to such
termination, except as provided in any Schedule D to this

7
<PAGE>

Agreement. This paragraph shall not be in derogation of any right of set-off of
other remedies Pacific Mutual may have on monies owed.

18.8 SURVIVAL

The representations, warranties and covenants of each of the parties as set
forth in this Agreement are continuous during the term of this Agreement and
each party agrees to notify each other party to this Agreement immediately, in
writing, if, at any time during the course of this Agreement, any of the
representations, warranties or covenants set forth herein become inaccurate or
untrue, including the facts related thereto. All representations and warranties
made in or pursuant to this Agreement and the provisions of Paragraphs 6.
Records, 14.Complaints, 15.Indemnification, 17.Limitations on Authority,
18.5.Severability, 18.7.Termination, 18.10.Arbitration, and 18.11.Proprietary
Information, of this Agreement shall survive the termination of this Agreement.

18.9 ARBITRATION AND GOVERNING LAW

All parties to this is Agreement agree to submit any dispute hereunder to
the Arbitration Department of the New York Stock Exchange or the NASD to be
heard in accordance with the rules then in effect. This Agreement shall be
construed in accordance with the laws of the State of California, without giving
effect to the conflict of law provisions thereof. To the extent that
jurisdiction of a court is required in order to (i) enforce the judgment of an
arbitration panel, (ii) appeal an arbitration panel's ruling in accordance with
the rules of the NYSE or NASD, as applicable, or (iii) obtain a ruling on a
point of law related to any arbitration, then the parties consent to the
jurisdiction of the courts of the State of California and to the jurisdiction of
federal courts located within California.

18.10 CONFIDENTIAL/PROPRIETARY INFORMATION

(a) The parties expressly acknowledge that they may reveal certain
Confidential Information (as defined in paragraph (b) below) to the other in
performance of this Agreement and agree not to, nor allow its officers,
affiliates, employees or agents to, convey any confidential information to any
third party, except as may be required under the terms of this Agreement.
Pacific Mutual agrees that names, addresses, and other information as to
customers or policyholders given to it by Smith Barney is Confidential
Information owned by Smith Barney and shall not be disclosed to any person not a
party to this Agreement without Smith Barney's prior written approval. Selling
Entities acknowledge that information pertaining to any Distributor program or
service is proprietary in nature and belongs exclusively to Distributor.

(b) Each party acknowledges and agrees that any and all information
emanating from the other's business in any form is "Confidential Information",
and each party agrees that it will not, during or after the term of this
Agreement, permit the duplication, use, or disclosure of any such Confidential
Information to any person (other than an employee, agent or representative of
the other party, or any service provider retained by any party which has been
instructed with respect to the confidential nature of the confidential
information, who must have such information for the performance of its
obligation hereunder), unless such duplication, use or disclosure is
specifically authorized by the other party in writing prior to any disclosure.
Each party shall instruct any service provider retained by it when information
is "Confidential Information" as defined herein and advise them to maintain its
confidentiality. Each party shall use reasonable diligence, and in no event
less than that degree of care which such party uses in respect to its own
confidential information of like nature, to prevent the unauthorized disclosure
or reproduction of such information to any third party. Without limiting the
generality of the foregoing, to the extent that this Agreement permits the
copying of Confidential Information, all such copies shall bear the same
confidentiality notices, legends, and intellectual property rights designations
that appear in the original versions.

(c) For the purposes of this Paragraph 18.10, the term "Confidential
Information" shall not include: information which is in the public domain;
information known to the recipient party as of the date of this Agreement as
shown by the recipient party's written records, unless the recipient party
agreed to keep such information in confidence at the time of its receipt; and
information properly obtained hereafter from a source who is not under an
obligation of confidentiality with respect to such information.

8
<PAGE>

19. ENTIRE AGREEMENT

This Agreement shall constitute the entire agreement among the parties and
supersedes all prior agreements and understandings, whether written or verbal.
This Agreement cannot be altered except in a writing signed by the parties
below.

By signing below, each of the undersigned agrees to have read and be bound
by the terms and conditions of this Agreement. Each of the undersigned
acknowledges receipt of a copy of this fully executed Agreement.

PACIFIC MUTUAL LIFE INSURANCE COMPANY
700 Newport Center Drive
Newport Beach, CA 92660

By: /s/ GLENN S. SCHAFER
---------------------------------
Name: Glenn S. Schafer
------------------------------
Title: President
-----------------------------

PACIFIC MUTUAL DISTRIBUTORS, INC.
700 Newport Center Drive
Newport Beach, CA 92660

By: /s/ GERALD W. ROBINSON
--------------------------------
Name: Gerald W. Robinson
------------------------------
Title: President and CEO
-----------------------------

SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013

By: /s/ JERALD E. HAMPTON
---------------------------------
Name: Jerald E. Hampton
------------------------------
Title: Executive Vice President
-----------------------------

SBHU LIFE AGENCY, INC.
ON ITS OWN BEHALF AND ON BEHALF OF EACH OF THE SUBSIDIARIES
AND AFFILIATED AGENCIES SET FORTH IN EXHIBIT A HERETO
388 Greenwich Street
New York, New York 10013

By: /s/ STEPHEN T. MARYNOWSKI
---------------------------------
Name: Stephen T. Marynowski
------------------------------
Title: Vice President/EVP
-----------------------------

9
<PAGE>

EXHIBIT A

List of Subsidiaries and Affiliated Agencies of SBHU Life Agency, Inc.

<TABLE>
<CAPTION>
Tax I.D. Number
---------------
<S> <C>
Robinson Humphrey Insurance Services of Alabama, Inc. 58-1560819
SBHU Life Agency, Inc. 13-2896238
SBHU Life Agency of Arizona, Inc. 86-0364031
SBS Insurance Brokerage Agency of Arkansas, Inc. 13-2947888
SBS Insurance Agency of Hawaii, Inc. 99-0226240
SBS Insurance Agency of Idaho, Inc. 82-0353604
SBHU Life Agency of Indiana, Inc. 35-1453612
SBS Insurance Brokers of Kentucky, Inc. 62-0972701
Smith Barney Life Agency, Inc. 13-3582818
SBS Insurance Agency of Maine, Inc. 13-2786303
SBHU Life Agency of Massachusetts, Inc. 04-2738507
SBS Insurance Agency of Montana, Inc. 13-3125892
SBS Insurance Agency of Nevada, Inc. 13-2969550
SBS Insurance Brokers of New Hampshire, Inc. 13-2781361
SBS Insurance Brokers of North Dakota, Inc. 93-0901581
SBHU Life Agency of Ohio, Inc. 34-1265302
SBHU Life Agency of Oklahoma, Inc. 13-3041479
SBS Insurance Agency of South Dakota, Inc. 46-0355008
SBHU Life Agency of Texas, Inc. 75-1723370
SBHU Life Agency of Utah, Inc. 87-0348277
SBS Insurance Agency of Wyoming, Inc. 13-2992342
SBS Life Insurance Agency of Puerto Rico, Inc. 13-3763544
</TABLE>

10
<PAGE>

EXHIBIT B

States in which Subagents must be appointed by Pacific Mutual
PRIOR to making solicitations in the State
<TABLE>
<CAPTION>
<S> <C>
Alabama Mississippi
Arkansas New Hampshire
Delaware New Mexico
District of Columbia North Carolina
Georgia Ohio (non-resident)
Kentucky Oklahoma
Maine Pennsylvania
Maryland (non-resident) West Virginia
Massachusetts
</TABLE>

11
<PAGE>

AMENDMENT #1
TO
PACIFIC MUTUAL LIFE INSURANCE COMPANY
VARIABLE CONTRACT SELLING AGREEMENT

This Amendment Number 1 is made this _____ day of _______, 1997 amending
the Agreement dated September, 1996 (the "Agreement"), made by and among PACIFIC
MUTUAL LIFE INSURANCE COMPANY ("Pacific Mutual"), PACIFIC MUTUAL DISTRIBUTORS,
INC. ("Distributor"), SMITH BARNEY, INC. ("Broker/Dealer"), SBHU LIFE AGENCY,
INC. and each listed subsidiary and affiliated agency listed on Exhibit A which
is attached hereto and made a part hereof (jointly and severally referred to
herein as "Agency"), Broker/Dealer and Agency jointly and severally hereinafter
referred to collectively as "Selling Entities".

Pacific Mutual, Distributor and Selling Entities hereby agree that
effective with this Amendment, the Agreement shall apply to all variable annuity
contracts which were initially issued by First Capital Corporation (FCC
Contracts) which are currently carried by Pacific Corinthian Life Insurance
Company and which, on or about October 30, 1997, will be deemed by operation of
law to become Pacific Mutual Contracts.

All other terms and conditions of the Agreement shall remain in full force
and effect.

The FCC Contracts are not available for new sales. Updated Exhibits A, B
and D (commission schedule) to the Agreement are attached hereto.

PACIFIC MUTUAL LIFE INSURANCE COMPANY PACIFIC MUTUAL DISTRIBUTORS, INC.
700 Newport Center Drive 700 Newport Center Drive
Newport Beach, CA 92660 Newport Beach, CA 92660

By: By:
------------------------------------- -----------------------------
Name: Glenn S. Schafer Name: Gerald W. Robinson
---------------------------------- --------------------------
Title: President Title: President and CEO
---------------------------------- --------------------------

SMITH BARNEY INC. SBHU LIFE AGENCY, INC.
388 Greenwich Street ON ITS OWN BEHALF AND ON BEHALF OF
New York, New York 10013 EACH OF THE SUBSIDIARIES AND
AFFILIATED AGENCIES SET FORTH IN
By: EXHIBIT A ATTACHED HERETO
------------------------------------- 388 Greenwich Street
Name: Jerald E. Hampton New York, New York 10013
---------------------------------
Title: Executive Vice President By:
-------------------------------- -----------------------------
Name: Stephen T. Marynowski
--------------------------
Title: Vice President/EVP
--------------------------

1
<PAGE>

[Schedules A, B and D to be attached at a later date.]

<PAGE>

EXHIBIT 99.4(a)

Form of Individual Flexible Premium Deferred Annuity and Variable Accumulation
Contract (Form 1080-385)
<PAGE>

99.4(a)
FIRST CAPITAL LIFE
FIRST CAPITAL LIFE INSURANCE COMPANY
10241 Wateridge Circle
P.O. Box 85727
San Diego, California 92138-5727

This is your annuity contract on the life of the annuitant. We will pay the
annuitant a monthly lifetime income starting on the annuity date. We will pay
the beneficiary any death benefit proceeds when we receive due proof of the
annuitant's death.

RIGHT TO EXAMINE YOUR CONTRACT

We want you to fully understand and be satisfied with your contract. If for any
reason, you are not satisfied, return the contract to our Annuity Service Office
within 10 days after receiving it. If you do, the contract will be void from
the contract date. We will refund:

. any premium payments allocated to the Fixed Account;
. any contract maintenance charge imposed on the Separate Account; and
. any Separate Account accumulation value as of the valuation day we receive
the contract.

No withdrawal charge will be imposed.

/s/ ANDREW L. LOEB /s/ FRED A. BUCK
Secretary President

INDIVIDUAL FLEXIBLE PREMIUM DEFERRED ANNUITY AND
VARIABLE ACCUMULATION CONTRACT

. Flexible premiums
. Variable and fixed accumulation period prior to the annuity date; fixed
annuity payments thereafter
. Monthly life income to annuitant starting on the annuity date
. Death benefit proceeds payable if the annuitant dies before the annuity
date
. No dividends

ACCUMULATION VALUES PROVIDED BY THIS CONTRACT VARY WITH INVESTMENT EXPERIENCE OF
THE VARIABLE ACCOUNTS TO WHICH THE CONTRACT VALUE IS ALLOCATED AND ARE NOT
GUARANTEED AS TO DOLLAR AMOUNTS.
<PAGE>

FOR YOUR CONTRACT/PAGE 3

ANNUITANT: AGE:
JOHN DOE 35

ANNUITANT: AGE:
JANE DOE 35

CONTRACT NUMBER:0000000000V

DATES:

CONTRACT DATE: JANUARY 2, 1987

ANNUITY DATE: JULY 1, 2032

FIRST PREMIUM: $5,000.00

PLANNED PREMIUM PAYABLE: ANNUALLY

PLANNED PREMIUM: $1,000.00

CONTRACT MAINTENANCE CHARGE: $30.00 Each Calendar Year

The Contract may be funded during the accumulation period by the Hutton VIP
Separate Account (The "Separate Account") which is divided into four subaccounts
("Variable Accounts"). Premium payments allocated to a variable account are
invested in the following designated series of the Hutton VIP Fund.

VARIABLE ACCOUNTS: FUND SERIES:
<PAGE>

PAGE SECTIONS OF YOUR CONTRACT

3 For Your Contract Only

4 Your Contract with First Capital Life Insurance Company
Premium Payments

5 Contract Value

7 Full and Partial Withdrawal Benefits During Accumulation Period

8 Transfers
Qualified Plan Special Provisions

9 Annuity Payments

10 Beneficiary, Death of Owner and Proceeds

12 Payment Plans

16 General Terms
<PAGE>

FIRST CAPITAL LIFE INSURANCE COMPANY

YOUR CONTRACT WITH FIRST CAPITAL LIFE INSURANCE COMPANY

In this contract, the words WE, US and OUR mean First Capital Life Insurance
Company. YOU and YOUR mean the contract owner. If there are joint annuitants,
ANNUITANT means both joint annuitants unless otherwise indicated.

This is a legal contract that you have entered into with us. We promise to
provide the benefits described in this contract. In return, you have submitted
a completed application, a copy of which is attached. You also have paid the
first PREMIUM payment shown on Page 3.

The entire agreement consists of:

. the basic contract;

. endorsements, if any; and

. the attached copy of your application, and any amendments.

CONTRACT DATE

The contract begins on the CONTRACT DATE shown on Page 3. Contract months and
years are measured from the contract date.

RIGHTS OF THE CONTRACT OWNER

As the contract owner, you can exercise the rights given by this contract.
These include:

. the right to make premium payments according to the PREMIUM PAYMENTS
section;

. the right to allocate each premium payment to a variable account(s) and to
the Fixed Account according to the PREMIUM PAYMENTS section;

. the right to a withdrawal benefit according to the FULL AND PARTIAL
WITHDRAWAL BENEFITS DURING ACCUMULATION PERIOD section;

. the right to change the annuity date according to the ANNUITY PAYMENTS
section;

. the right to transfer accumulation values between variable accounts and
between the variable accounts and the Fixed Account according to the
TRANSFERS section;

. the right to choose the beneficiary according to the BENEFICIARY, DEATH OF
OWNER AND PROCEEDS section;

. the right to choose the owner's beneficiary according to the BENEFICIARY,
DEATH OF OWNER AND PROCEEDS section;

. the right to choose how proceeds will be paid according to the PAYMENT
PLANS section;

. the right to assign ownership or assign the contract as security for an
obligation according to the GENERAL TERMS section.
<PAGE>

If you die before the annuitant, all of these rights belong to your beneficiary
unless these rights have been properly assigned (see the GENERAL TERMS section
on assignments). If there are joint owners, upon the death of the first joint
owner the survivor will become sole owner.

CHANGING THE TERMS OF THIS CONTRACT

No change in this contract is valid unless approved by one of our officers and
endorsed on or attached to your contract. No agent has the authority to make any
changes or waive any contract provision.

PREMIUM PAYMENTS

Premium payments are flexible. This means you can choose the amount and
frequency of payments subject to the minimums required. Premium payments will
be deposited in the Separate Account and the Fixed Account as of the valuation
day they are received in good order at our Annuity Service Office. VALUATION
DAY means:

. each day that the New York Stock Exchange is open for trading; and

. each other day on which there is sufficient degree of trading in the
Separate Account's underlying Fund portfolio that the current accumulation
value might be materially affected by changes in the value of the shares of
the underlying Fund Series.

4
<PAGE>

The actual amount and frequency of premium payments will affect the contract
value (see CONTRACT VALUE section).

FIRST PREMIUM

The amount of the first premium is shown on PAGE 3.

PLANNED PREMIUM PAYMENTS

The amount and frequency of the planned premium payments you initially selected
are shown on PAGE 3. You can request to change the amount and frequency.

You can choose to have planned premium payment reminder notices sent at 12, 6 or
3 month intervals. We will accept requests for notices to be sent at more
frequent intervals at our sole discretion.

If you desire, we can deduct planned premium payments from your bank account
monthly.

UNSCHEDULED ADDITIONAL PREMIUM PAYMENTS

You may make additional premium payments at any time before the annuity date
shown on PAGE 3.

LIMITATION OF PREMIUM PAYMENTS

If this contract is purchased in connection with a nonqualified plan under the
Internal Revenue Code, we reserve the right to limit premium payments to an
aggregate amount of $500,000.

MINIMUM ADDITIONAL PREMIUM PAYMENTS

Each premium payment after the first premium payment must be at least:

. $500 for a nonqualified plan contract

. $50 for a qualified plan contract

ALLOCATION OF PREMIUM PAYMENTS

You may allocate your premium payment to the Separate Account in one or more
variable accounts and to the Fixed Account. The FIXED ACCOUNT is part of the
General Account. The SEPARATE ACCOUNT is the segregated investment account
which is made up of a series of variable accounts as shown on Page 3. We may,
from time to time, add a variable account(s) or separate account(s), to which
you may allocate premium payments. In such event, your right to allocate to an
additional variable account or separate account will be shown on an endorsement
to Page 3. However, your rights will be limited to the terms and conditions
imposed on such additional account(s).

Unless you choose otherwise, we will invest your payment in the Money Market
Account. The minimum accumulation value in a variable account must be at least
$500 (beginning in the second Contract Year for a Qualified Plan). You may
allocate to more than one variable account only if, as a result, the
accumulation value in a variable account is at least $500 (including Qualified
Plans). The minimum accumulation value in the Fixed Account must be at least
$1,000. In the event that the value in an account should fall below the
minimum, we reserve the right to terminate the contract.

WHERE TO PAY

You may make your premium payments to our Annuity Service Office or to an
authorized agent. If payment is made to an agent, a receipt signed by one of
our officers will be issued. The agent will also sign the receipt.
<PAGE>

CONTRACT VALUE

During the accumulation period the CONTRACT VALUE is the sum of your
accumulation values of the Separate Account and the Fixed Account. The
ACCUMULATION PERIOD is the period between the contract date and the annuity
date.

DETERMINING THE SEPARATE ACCOUNT ACCUMULATION VALUE

ACCUMULATION UNIT

We will credit this contract with that number of accumulation units in each
variable account which results from:

. the amount of premium payment allocated to the variable account; and

. the amount transferred to the variable account.

To determine the number of ACCUMULATION UNITS, we divide the amount allocated
and or transferred by the accumulation unit value of the variable account at the
end of the valuation period during which the allocation or transfer was made.
VALUATION PERIOD means the period between valuation days.

ACCUMULATION UNIT VALUE

We determine the ACCUMULATION UNIT VALUE on each valuation day by multiplying
the accumulation unit value at the beginning of the valuation period by the net
investment factor for the valuation period. We set the value of an accumulation
unit for

5
<PAGE>

each variable account at $1.00 on the date each variable account began
operations.

We determine the net investment factor for the valuation period in the following
manner:

. First, we determine the gross investment rate by dividing the change in
the value of the underlying Fund Series by the value of the underlying Fund
Series share at the beginning of the valuation period. The gross
investment rate may be positive or negative and may increase or decrease.

. Then we determine the net investment rate by deducting from the gross
investment rate the daily accrual for the charge for mortality and expense
risks and direct expenses of the Separate Account.

. Finally, we add 1.0 to the net investment rate.

The charge for the mortality and expense risks of the Separate Account is equal
to 1.19% per year of the average daily net assets of each variable account and
is accrued daily. The mortality risk we bear results from our guarantee that:

. prior to the annuity date the death benefit will be at least equal to the
total of all premiums paid less reductions caused by previous withdrawals,
if any; and

. annuity payments will not be adversely affected by a change in our assumed
death rate.

The Separate Account will bear its own administrative expenses; including legal
and accounting costs; data processing costs; expenses of qualification and
registration with federal and state authorities; costs for printing and mailing
reports and notices to contract owners; and recordkeeping expenses. The expense
risk we bear results from our guarantee that the expenses borne directly by the
Separate Account, not including the charge for mortality and expense risks, will
not exceed .25% per year of average daily net assets on an annual basis.

We further guarantee that the ordinary operating expenses of a variable account
together with the operating expenses incurred by its underlying Fund Series,
exclusive of advisory fees, interest, taxes, brokerage commissions, transaction
costs or extraordinary expenses, will not exceed .6% of average daily net assets
annually after consideration for any adjustment by the Advisor for Fund expenses
in excess of State expense limitations.

SEPARATE ACCOUNT ACCUMULATION VALUE

The SEPARATE ACCOUNT ACCUMULATION VALUE for any valuation period is determined
as follows:

. First we determine the accumulation value of each variable account by
multiplying the number of accumulation units credited to each variable
account by corresponding accumulation unit value at the end of the
valuation period.

. Then we add the accumulation value of each variable account.

The accumulation unit value (value in dollar amount per unit) of a variable
account will vary (increase or decrease) with the investment experience of the
variable account. The number of accumulation units will not change due to a
change in the accumulation unit value.

DETERMINING THE FIXED ACCOUNT ACCUMULATION VALUE

We will credit this contract on each valuation day with:

. the amount of premium payment allocated to the Fixed Account;

. the amount of any transfer to the Fixed Account;
<PAGE>

. interest from the valuation day the premium payment is deposited or the
transfer is made.

From this amount we subtract:

. the Fixed Account's share of the contract maintenance charge, when due;

. reductions caused by any partial withdrawal when made; and

. the amount of any transfer from the Fixed Account when made.

The FIXED ACCOUNT ACCUMULATION VALUE is the resulting amount. We guarantee the
effective rate of interest shall be at least 4% per year, compounded daily.
From time to time, we may pay interest at a rate greater than the guaranteed
rate, at our sole discretion.

The nonforfeiture values are not less than the minimum values required by the
law of the state in which this contract is delivered.

CONTRACT MAINTENANCE CHARGE

We will deduct a CONTRACT MAINTENANCE CHARGE as shown on Page 3 from the
contract value on the contract date and on December 31 of each calendar year
prior to the annuity date. On the contract date, we will prorate the charge.
You will be assessed only 1/365 of the annual charge for each day remaining in
the calendar year. An equal portion of the charge will be deducted for your
accumulation value in each variable account and Fixed Account in which you have
an interest.

6
<PAGE>

The number of accumulation units needed to cover the charge will be redeemed
from each variable account on the day such charge is deducted.

We reserve the right to increase the amount of this charge. Any change will be
shown on an endorsement to Page 3. We do not expect to make a profit on this
charge or any increase.

FULL AND PARTIAL WITHDRAWAL BENEFITS DURING ACCUMULATION PERIOD

During the accumulation period, subject to the BENEFICIARY, DEATH OF OWNER AND
PROCEEDS section, you may withdraw all of the contract value less the withdrawal
charge, if any, by surrendering your contract to us (see the CONTINGENT DEFERRED
SALES CHARGE section). You may make this request:

. while this contract is in force during the annuitant's life; and

. before the death of the owner, provided, if there are joint owners and the
joint owners are husband and wife, then the death of the survivor thereof;
further provided, if the joint owners are not husband and wife, then on the
death of the first joint owner.

You may withdraw a part of the contract value during the accumulation period
provided:

. The withdrawal amount is at least $500.

. No partial withdrawal may be made if it results in a remaining contract
value of less than $500.

. No partial withdrawal may be made from a variable account if it results in
a remaining accumulation value in any variable account of less than $500.

. No partial withdrawal may be made from the Fixed Account if it results in
a remaining accumulation value of less than $1,000.

You may select the variable account(s) and Fixed Account from which the
withdrawal will be made. Unless you state otherwise, the withdrawal will be
made from each variable account and Fixed Account in which you have an interest
in the same proportion that the amount of withdrawal bears to your current
contract value.

A request for a full or partial withdrawal must be in writing to our Annuity
Service Office. If the amount to be withdrawn exceeds $10,000, your signature
must be guaranteed by one of the following:

. a commercial bank;

. a trust company; or

. a member firm of the National Association of Securities Dealers, Inc.

Withdrawals may be subject to a withdrawal charge (see the Contingent deferred
Sales Charge section).

We will redeem the number of accumulation units needed for any withdrawal from a
variable account. The current number of accumulation units in the variable
account(s) will be reduced by the number redeemed. We will determine the
reduction in accumulation units based on the accumulation unit value at the end
of the valuation period during which we receive the written notice, in good
order, at our Annuity Service Office.

We will pay an amount withdrawn within seven calendar days after the written
request is received by us, except as provided in the GENERAL TERMS section under
delay of payments or transfer.
<PAGE>

CONTINGENT DEFERRED SALES CHARGE (WITHDRAWAL CHARGE)

Full and partial withdrawals may be subject to a contingent deferred sales
charge (withdrawal charge). The WITHDRAWAL CHARGE is a percentage of the amount
withdrawn.

The withdrawal charge is based on the contribution year of each premium payment.
The first CONTRIBUTION YEAR for each premium payment is the contract year during
which such payment is made. Each succeeding contribution year for such premium
payment is measured from the end of the contract year during which such payment
was made. Withdrawal amounts will be applied against premium payments in the
chronological order in which the premium payments are received to determine any
withdrawal charge.

Contribution Withdrawal
Year Charge
<S> <C>

1 5%
2 4%
3 3%
4 2%
5 1%
6 and 0%
thereafter
</TABLE>

On the first withdrawal during any contract year an amount equal to or less than
10% of the

7
<PAGE>

current contract value will be exempt from any withdrawal charge. The amount of
any withdrawal in excess of 10% of the contract value and the entire amount of
any subsequent withdrawal in the same contract year may be subject to the
withdrawal charge. After consideration for any withdrawal amount exempt from
the charge, no charge will be imposed on an amount in excess of the total
premium payments. Any withdrawal charge will be applied to each account in the
same proportion that the withdrawal from each variable account and Fixed Account
bears to the total amount withdrawn.

No charge will be imposed in the event of death. Upon annuitization, the
contract value may be subject to a withdrawal charge. However, in no event will
we impose a charge on the annuity date if you elect to apply the proceeds to:

. a Payment Plan offered under this contract; or

. purchase a Single Premium Immediate Annuity then offered by us as long as
the annuity period is five years or longer.

TRANSFERS

During the Accumulation Period, you may transfer all or part of the accumulation
value:

. in a variable account to another variable account or to the Fixed Account;
or

. in the Fixed Account to a variable account(s);

except that:

. The amount transferred must be at least $500.

. No partial transfer may be made if as a result the remaining accumulation
value in a variable account will be less than $500 and $1,000 in the Fixed
Account.

. You may make only one (1) transfer to or from the Fixed Account in any
contract year.

Transfers will be made on the valuation day next following the day we receive
written notice signed by you at our Annuity Service Office. Although we do not
anticipate any limit on such transfer, we reserve the right to limit the number
and frequency of variable account transfers, and to impose a fee or charge on
transfers.

We will redeem the number of accumulation units needed for the transfer from a
variable account. The current number of accumulation units in the variable
account will be reduced by the number redeemed. We will determine the reduction
in accumulation units based on the accumulation unit value at the end of the
valuation period during which we receive the written notice, in good order, at
our Annuity Service Office, except as provided in the GENERAL TERMS section
under delay of payments or transfers.

QUALIFIED PLAN SPECIAL PROVISIONS

If your contract is issued under Internal Revenue Code Sections 401, 403(b), 408
or 457, the following provisions override any inconsistent provisions of this
Contract. If we must amend any provision of this contract to comply with the
Internal Revenue Code, the Internal Revenue Service regulations, or published
revenue rulings, we may amend without obtaining your consent.

Except for Pension Plans and Profit Sharing Plans, your contract is
nontransferable except to us. It may not be sold, assigned, discounted, or
pledged as collateral for a loan or security for the performance of an
obligation or for any other purpose.

Except in the case of a Pension or Profit Sharing Plan or a 408(a) plan, an
owner of the contract is the annuitant.
<PAGE>

Payment Plan A, Interest, shall not be available nor shall any other Payment
Plan be elected which would result in less than the annuitant's entire interest
in the contract being distributed over the life expectancy of the annuitant.

If your contract is issued under a 403(b) Plan, unless you choose otherwise, we
apply the proceeds on the annuity date to Payment Plan F.

If your contract is issued as an Individual Retirement Annuity (IRA) or as a
Simplified Employee

8
<PAGE>

Pension Plan (SEP) IRA, the following overriding provisions also apply.

1. Except in the case of a rollover the annual premium payment may not exceed:

the lesser of $2,000 or 100% of compensation includable in the annuitant's
gross income for any taxable year, or the then applicable limitation, if an
IRA; or

the lesser of $30,000 or 25% of compensation includable in the annuitant's
gross income (up to a maximum of $200,000 compensation) for any taxable
year, or the then applicable limitation, if a SEP IRA.

The premium is not fixed.

2. We must distribute the annuitant's entire interest in your contract no
later than the close of the tax year in which the annuitant attains age 70
1/2. We must distribute the benefits:

over your life or the lives of the annuitant and the annuitant's spouse; or

over a period not extending beyond the annuitant's life expectancy or the
life expectancy of the annuitant and the annuitant's spouse; or

in a lump sum.

If the annuitant dies before receiving the entire proceeds we must begin to
distribute any remaining annuity benefit:

. within five (5) years of the annuitant's death; or

. within five (5) years of the later of the annuitant's death or the
annuitant's spouse's death if distribution has begun under an annuity with
the annuitant's spouse.

The remaining annuity benefit must be paid in a lump sum or used to purchase an
immediate annuity for the beneficiary. If an immediate annuity is purchased,
the term of the annuity must be for the life of the beneficiary or for a term
not extending beyond the life expectancy of the beneficiary. The preceding
sentence shall not apply if you elect an annuity benefit over a term certain and
the term certain meets the requirements of paragraph number 2 above.

The annuitant's entire interest in this contract is nonforfeitable.

If your contract is issued under a Deferred Compensation Plan intended to
qualify under IRC Section 457, the following overriding provisions apply.

1. All rights under the contract, including those which may be exercised by
the annuitant or a beneficiary, are owned exclusively by the owner.

2. All benefits payable under the contract shall be paid to or at the
direction of the owner.

3. Payment Plan A, Interest, shall not be available nor shall any other
payment plan be elected which would result in less than the annuitant's
entire interest in the contract being distributed over the life expectancy
of the annuitant.

ANNUITY PAYMENTS

On the annuity date this contract becomes a fixed annuity. The proceeds from
the Separate Account will be transferred to our General Account and added to the
proceeds from the Fixed Account. The total proceeds will be an amount equal to
the contract value on the valuation day immediately preceding the annuity date
less any premium tax and any
<PAGE>

withdrawal charge, if applicable (see CONTINGENT DEFERRED SALES CHARGE section).
This amount is used to pay the annuitant, starting on the annuity date, a
monthly lifetime income.

Unless you choose otherwise, we apply the proceeds:

. Under payment plan D with guaranteed payments for 10 years if there is a
single annuitant.

. Under payment plan F if there are joint annuitants.

. You can choose to apply the total proceeds under any of the payment plans
described in the PAYMENT PLANS section. We must receive your request to do
so before the annuity date. If there are joint annuitants, plans D and E
cannot be chosen.

RIGHT TO PURCHASE SINGLE PREMIUM LIFE ANNUITY AT REDUCED RATES

You may make a written request to us to surrender your contract and use the full
withdrawal proceeds to purchase any single premium immediate life annuity then
offered by us. The premium rate for the annuity will be 3% less than our
published rate if your contract was in force for at least five years.

CHANGING THE ANNUITY DATE

You can change the annuity date by notifying us in writing. We must receive
your notice at least 45 days prior to the current annuity date. The new annuity
date must be:

9
<PAGE>

. No later than the first day of the month following any annuitant's 85/th/
birthday (if there are joint annuitants, annuitant means the younger
annuitant); and

. after the date we receive your notice.

REQUIRED PROOF OF AGE

We can require proof of the annuitant's age before we make any annuity payment.
If the annuitant's age is misstated, or in the case of joint annuitants, if the
age of either joint annuitant is misstated, we will adjust the annuity payments.
The benefits payable will be what the total proceeds would buy at the correct
age.

REQUIRED PROOF THAT THE ANNUITANT IS STILL ALIVE

If payments depend on the annuitant being alive, we can require satisfactory
proof that he or she is alive before we make further payments.

BENEFICIARY, DEATH OF OWNER AND PROCEEDS

BENEFICIARY

The beneficiary is the person named to receive the death benefit proceeds upon
the annuitant's death. The beneficiary is as named in the application for this
contract unless later changed. There can be one or more beneficiaries.

You can name any beneficiary to be a permanent beneficiary. The interest of
such beneficiary cannot be changed without his or her consent. Otherwise, you
can change beneficiaries as explained below. Unless you state otherwise, all
rights of a beneficiary, including a permanent beneficiary, will end if he or
she dies before the annuitant.

DEATH OF OWNER - OWNER'S BENEFICIARY

The owner's beneficiary is the person named to receive the death benefit
proceeds upon the owner's death during the accumulation period. The owner's
beneficiary is as named in the application for this contract, unless later
changed.

You may name any owner's beneficiary to be an owner's permanent beneficiary.
The interest of such owner's beneficiary cannot be changed without his or her
written consent. Otherwise, you can change an owner's beneficiary as explained
in the Changing the Owner's Beneficiary provision.

Unless you state otherwise, all rights of an owner's beneficiary, including an
owner's permanent beneficiary, will end if he or she dies before the owner.

For the purpose of this provision, the term owner means any owner. If there are
joint owners, the term owner means the first joint owner to die unless the joint
owners are husband and wife. If the joint owners are husband and wife and if
the surviving spouse is the sole surviving joint tenant, the term owner refers
to the survivor thereof.

DEATH OF OWNER - DEATH BENEFIT

If the owner dies prior to the annuity date, we will pay the owner's beneficiary
the death benefit proceeds. No death benefit will be paid if the owner dies
after the annuity date.

DEATH OF OWNER - PAYMENT OF PROCEEDS

If the owner's beneficiary is the surviving spouse of the deceased owner, he or
she may choose to receive a payment under any payment plan of this contract.
For any other owner's beneficiary, only those options may be chosen that provide
for complete distribution of such owner's interest in the contract:
<PAGE>

1. within 5 years of the date of such owner's death;

2. over the life time of the owner's beneficiary; or

3. over a period that does not exceed the life expectancy of such owner's
beneficiary, as defined by the Internal Revenue Code and Regulations
adopted under the Code.

Subparagraphs (2) and (3) apply only to individuals. All such payments must
start within one year of the date of such owner's death.

CONTRACT CONTINUATION - SURVIVING SPOUSE

If the surviving spouse of the deceased owner is the owner's beneficiary, or is
the sole surviving joint tenant, and if the deceased owner was not the sole
annuitant, such spouse may choose to continue this contract in force on the same
terms as before the owner's death.

DEATH OF BOTH OWNER AND ANNUITANT

Payment will be made either to the beneficiary or to the owner's beneficiary,
but not both, according to whichever first becomes applicable. If an owner is
not also an annuitant, then, in

10
<PAGE>

the event the death of the owner and the annuitant is under circumstances in
which it cannot be determined who died first, payment will be made to the
annuitant's beneficiary. If the owner and the annuitant are the same, payment
will be made to the annuitant's beneficiary.

NO OWNER BENEFICIARY

If there is no owner beneficiary, the death benefit proceeds shall be paid to
the joint owner, if any, otherwise to the annuitant.

DEATH OF OWNER AFTER ANNUITY DATE

on the death of any owner after the annuity date, any guaranteed amounts
remaining unpaid will continue to be paid to the annuitant pursuant to the
payment plan in force at the date of death. On the death of the annuitant, any
unpaid benefit available will be paid to the beneficiary of the annuitant in
accordance with the Payment After a Payee Dies provision of the PAYMENT PLANS
section.

CHANGING THE BENEFICIARY

You can change the beneficiary at any time during the annuitant's life. To do
so, send a written request to our Annuity Service Office. The request must be
in a form we accept. The change will go into effect when it is signed subject
to any payments we make or other actions we take before we record the change.

A change cancels all prior beneficiaries; except it will not cancel any
permanent beneficiary without such beneficiary's written consent.

CHANGING THE OWNER'S BENEFICIARY

You may change the owner's beneficiary at any time during the owner's life. To
do so, send a written request to our home office. The request must be in a form
we accept. The change will go into effect when it is signed, subject to any
payments we make or other actions we take before we record the change.

A change cancels all prior owner's beneficiaries; except it will not cancel any
owner's permanent beneficiary without such owner's beneficiary's written
consent.

PROCEEDS

Proceeds means the amount payable on:

. the exercise of a withdrawal; or

. the annuity date; or

. the owner's death prior to the annuity date; or

. the annuitant's death, or in the case of joint annuitants, the death of
the last survivor of the joint annuitants, prior to the annuity date.

The proceeds payable on the owner's death or annuitant's death, whichever first
become applicable, will be the greater of:

. the contract value; or

. the total of all premiums paid less reductions caused by previous
withdrawals, if any.
<PAGE>

The death benefit proceeds will be determined at the end of the valuation period
during which we receive due proof of death at our home office. The proceeds
from the Separate Account will be immediately transferred to our General
Account.

All proceeds are subject to the restrictions below.

PAYMENT OF PROCEEDS

Proceeds may be paid in one sum or under our payment plans. Before proceeds are
paid, they will be used to pay the interest of anyone to whom this contract has
been assigned. Assignments will be paid in one sum (see GENERAL TERMS section
on assignments).

If there is no beneficiary at the time of the annuitant's death, we will pay the
proceeds to you or your beneficiary.

If the death benefit proceeds are not paid in one sum or applied under a payment
plan within 30 days after we receive due proof of the annuitant's death, we will
pay interest. Interest will be paid at the rate of 3.5% a year from the date we
receive due proof of death until paid. If state law requires payment of a
greater amount, we will pay that amount.

To the extent allowed by law, all payments under this contract will be free from
creditor claims or legal process.

11
<PAGE>

PAYMENT PLANS

Proceeds can be left with us and paid under a payment plan. We will provide an
endorsement to this contract to indicate:

. the payment plan elected, if any;

. the proceeds applied to the payment plan;

. the amount of the monthly guaranteed payment.

A plan is available only if the amount of proceeds applied is at least $10,000;
otherwise the proceeds will be paid in cash.

While the annuitant is alive, you can choose a plan that will apply to the death
benefit proceeds upon the death of the annuitant. This choice can be changed
during the life of the annuitant. If you have not chosen a plan prior to the
annuitant's death, a beneficiary can make this choice upon the annuitant's
death. To choose a plan, send a written request to our Annuity Service Office.
We will send you the proper forms to complete. Your request will go into effect
when we record it. The person named to receive payments under a plan is called
a PAYEE. If there are joint payees, payee means both joint payees unless
otherwise indicated. If a payee is other than a living human being, a plan will
be available only with our consent.

The minimum interest rate for plans A, B and C is 4% a year, compounded yearly.
We may pay a higher rate at our discretion.

PLAN A. INTEREST

The proceeds may be left on deposit with us to earn interest. You can choose
when you want to receive payments, subject to our approval.

PLAN B. FIXED INSTALLMENTS

Proceeds plus interest will be paid in equal installments. Payments will
continue until principal and interest are exhausted. The principal is the
amount of proceeds applied to this plan.

This plan can be used only if the total amount paid each year is $60 or more for
each $1,000 of proceeds applied.

PLAN C. FIXED PERIOD

Proceeds plus interest will be paid in equal installments for the number of
years chosen. The period chosen cannot be more than 25 years. The following
table shows the monthly payment for each $1,000 of proceeds applied.

AMOUNT OF EACH INSTALLMENT PER $1,000 OF PROCEEDS FOR PLAN C
<TABLE>
<CAPTION>

Fixed Fixed Fixed Fixed Fixed
Period Monthly Period Monthly Period Monthly Period Monthly Period Monthly
Years Install. Years Install. Years Install. Years Install. Years Install.
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $84.84 6 $15.56 11 $9.31 16 $7.00 21 $5.81
2 43.29 7 13.59 12 8.69 17 6.71 22 5.64
3 29.40 8 12.12 13 8.17 18 6.44 23 5.49
4 22.47 9 10.97 14 7.72 19 6.21 24 5.35
5 18.32 10 10.06 15 7.34 20 6.00 25 5.22

</TABLE>
12
<PAGE>

PLAN D. LIFE INCOME WITH GUARANTEED PAYMENT PERIOD

Proceeds will be used to provide monthly payments for as long as the payee
lives. A guaranteed payment period of 10 or 20 years can be chosen. This means
that if the payee dies during this period, payments will continue to be made
until the end of the period chosen.

The following table shows the monthly payment for each $1,000 of proceeds
applied.

AMOUNT OF EACH INSTALLMENT PER $1,000 OF PROCEEDS FOR PLAN D
<TABLE>
<CAPTION>

Guaranteed Guaranteed Guaranteed
Period Period Period
Age of Payee 10 Yrs. 20 Yrs. Age of Payee 10 Yrs. 20 Yrs. Age of Payee 10 Yrs. 20 Yrs.
<S> <C> <C> <C> <C> <C> <C> <C> <C>
10* + + 35 $3.61 $3.60 60 $5.12 $4.81
11 + $3.15 36 3.64 3.63 61 5.23 4.88
12 + 3.16 37 3.68 3.66 62 5.35 4.95
13 + 3.17 38 3.71 3.69 63 5.47 5.02
14 + 3.19 39 3.75 3.73 64 5.60 5.08

15 + 3.20 40 3.78 3.76 65 5.73 5.15
16 + 3.21 41 3.82 3.80 66 5.87 5.21
17 + 3.23 42 3.87 3.84 67 6.01 5.27
18 + 3.24 43 3.91 3.88 68 6.16 5.33
19 + 3.26 44 3.96 3.92 69 6.32 5.39

20 $3.27 3.27 45 4.01 3.96 70 6.48 5.44
21 3.29 3.29 46 4.06 4.01 71 6.65 5.49
22 3.31 3.30 47 4.11 4.05 72 6.83 5.53
23 3.33 3.32 48 4.17 4.10 73 7.01 5.57
24 3.34 3.34 49 4.23 4.15 74 7.19 5.61

25 3.36 3.36 50 4.29 4.20 75 7.38 5.64
26 3.38 3.38 51 4.35 4.26 76 7.57 5.67
27 3.40 3.40 52 4.42 4.31 77 7.76 5.69
28 3.43 3.42 53 4.50 4.37 78 7.95 5.70
29 3.45 3.44 54 4.57 4.43 79 8.14 5.72
30 3.47 3.47 55 4.65 4.49 80# 8.32 5.73
31 3.50 3.49 56 4.74 4.55
32 3.52 3.52 57 4.83 4.62
33 3.55 3.54 58 4.92 4.68
34 3.58 3.57 59 5.02 4.75

</TABLE>
* - Ages 10 and under. # - Ages 80 and over. + - Not available at this age.

13
<PAGE>

PLAN E. INSTALLMENT REFUND

Proceeds will be used to provide payments in equal installments. Guaranteed
payments will continue until the sum of the payments equals the proceeds
applied. If the payee is still living at that time, payments will continue as
long as the payee lives. If the payee dies before the guaranteed payments have
been made, the commuted value of the remaining unpaid guaranteed payments will
be paid to the beneficiary. The table below shows the monthly payment for each
$1,000 of proceeds applied.

AMOUNT OF EACH INSTALLMENT PER $1,000 OF PROCEEDS FOR PLAN E
<TABLE>
<CAPTION>

Install. Install. Install.
Age of Payee Refund Age of Payee Refund Age of Payee Refund
<S> <C> <C> <C> <C> <C>
10* $3.14 35 $3.59 60 $4.93
11 3.15 36 3.62 61 5.03
12 3.16 37 3.65 62 5.13
13 3.18 38 3.68 63 5.24
14 3.19 39 3.72 64 5.35

15 3.20 40 3.75 65 5.46
16 3.21 41 3.79 66 5.59
17 3.23 42 3.83 67 5.72
18 3.24 43 3.87 68 5.86
19 3.25 44 3.91 69 6.00

20 3.27 45 3.95 70 6.16
21 3.29 46 4.00 71 6.32
22 3.30 47 4.05 72 6.49
23 3.32 48 4.10 73 6.68
24 3.34 49 4.15 74 6.87

25 3.36 50 4.21 75 7.08
26 3.37 51 4.26 76 7.30
27 3.39 52 4.32 77 7.53
28 3.42 53 4.39 78 7.78
29 3.44 54 4.46 79 8.04

30 3.46 55 4.53 80# 8.32
31 3.48 56 4.60
32 3.51 57 4.68
33 3.54 58 4.76
34 3.56 59 4.84
</TABLE>
* - Ages 10 and under. # - Ages 80 and over.

14
<PAGE>

PLAN F. JOINT AND SURVIVOR, LIFE ONLY

Proceeds will be used to provide payments during the lifetimes of the joint
annuitants. Payment of proceeds will continue as long as either is living.
After the death of both annuitants no further payments will be paid. The
following table shows the monthly payment for each $1,000 of proceeds applied
for various five-year age intervals. Monthly payments for other ages not shown
are available upon request.

AMOUNT OF EACH INSTALLMENT PER $1,000 OF PROCEEDS FOR PLAN F
<TABLE>
<CAPTION>

Age

60 65 70 75 80
<S> <C> <C> <C> <C> <C> <C>
Age 60 $4.48 $4.68 $4.85 $4.97 $5.07
65 4.68 4.98 5.25 5.48 5.66
70 4.85 5.25 5.68 6.08 6.41
75 4.97 5.48 6.08 6.71 7.31
80 5.07 5.66 6.41 7.31 8.28
</TABLE>

OTHER FACTS ABOUT PAYMENT PLANS

FIRST INSTALLMENT

The first installment under Plans B, C, D, E and F is payable on the effective
day of the payment plan.

PROTECTION OF BENEFITS

Unless you permit otherwise, if you choose a payment plan, the payee cannot do
the following:

. assign amounts under Plans B, C, D, E and F;

. commute amounts under Plan B or C.

You can commute or assign the amounts if the amounts have not already been
commuted or the contract is not currently assigned.

COMMUTE means to receive a discounted lump sum cash settlement instead of future
payments. Amounts under Plans D, E and F can never be commuted while the payee
is alive.

A payee can receive at any time the proceeds held under Plan A unless you
otherwise provide.

TRANSFER BETWEEN PLANS

A payee who can receive the commuted amount under a plan can apply that amount
under another plan. If transfer is made to Plan D, E or F, the then current
tables and terms of payment offered by us will apply.

EVIDENCE PAYEE IS ALIVE

We have the right to require proof satisfactory to us that the payee is alive
prior to making any payment.

PROOF OF AGE

For Plans D, E and F, we have the right to require proof satisfactory to us of
the payee's date of birth before making any payment.
<PAGE>

PAYMENT AFTER A PAYEE DIES

Unless you provide otherwise, if a payee dies, we will make a single payment of
the unpaid benefit for Plans A, B, C, D and E. The payment will be made to the
beneficiary of the payee. If no beneficiary is named, payment will be made to
the payee's estate. The single payment is determined as follows:

. Plans A and B - The unpaid sum left with us plus any unpaid interest up to
the date of the payee's death.

. Plan C - The commuted value of the remaining unpaid payments.

. Plan D and E - The commuted value of the remaining unpaid guaranteed
payments.

The interest rate used to commute is 4% for C and 3.5% for D and E or such
higher interest rate that was used to determine payments.

Unless otherwise provided under Plans C, D and E, the beneficiary of the payee
may elect to receive payments over the balance of the period for Plan C or the
balance of the guaranteed period for plans D and E.

16
<PAGE>

GENERAL TERMS

ASSIGNING YOUR CONTRACT

During the annuitant's life, you can:

. assign ownership of this contract to someone else; or

. assign this contract as security for an obligation. (This does not assign
ownership.)

A signed copy of the assignment must be sent to our Annuity Service Office on a
form we accept. The assignment will go into effect when it is signed subject to
any payments we make or other actions we take before we record it. We are not
responsible for the validity of any assignment.

If there are permanent beneficiaries or permanent owner beneficiaries, you need
their consent before assigning your contract.

LIMITS ON OUR CONTESTING THIS CONTRACT

We will not contest the original validity of this contract.

DELAY OF PAYMENT OR TRANSFER - SEPARATE ACCOUNT

During the accumulation period, we may suspend the right of transfer or delay
paying you more than seven calendar days only:

. When the New York Stock Exchange is closed (other than normal closings);

. When the trading on the New York Stock Exchange is restricted;

. When an emergency exists as determined by the Securities and Exchange
Commission so that it is not reasonably practicable to dispose of
securities held or it is not reasonably practicable to determine the net
asset value of a variable account;

. During any other period when the Securities and Exchange Commission, by
order, so requires for the protection of the contract owners.

DELAY OF PAYMENT OR TRANSFER - GENERAL ACCOUNT

We may suspend the right of transfer or delay paying you withdrawal or
termination proceeds during the accumulation period and any commuted amount
after the annuity date for up to 6 months, or the period allowed by law,
whichever is less.

STATUTORY BASIS OF CONTRACT VALUES

All reserves are greater than or equal to those required by statute. Reserve
means the amount we hold to pay future benefits.

NO DIVIDENDS

This contract will not pay dividends. It will not participate in any of our
surplus or earnings.
<PAGE>

PAYMENTS

All death benefits and annuity payments under this contract will be made from
our home office.

WHEN THIS CONTRACT ENDS

This contract ends when any of the following events occur:

. You request that this contract end.

. The annuitant dies.

. The contract value is zero.

PREMIUM TAXES

Any premium taxes will be deducted on the annuity date when the contract is
annuitized.

PROTECTION OF BENEFITS

To the extent permitted by law, all rights and payments under this contract are
not subject to creditor claims or legal process.

VOTING RIGHTS

You will have voting rights under this contract until:

. the annuity date;

. the death of the annuitant; or

. full withdrawal.

We will send you the voting instruction material of the appropriate Fund Series
in connection with the exercise of your voting rights. To be entitled to vote,
you must have an interest in the Separate Account on both the date as of which
the number of votes was determined and the date of the written notice.

During the accumulation period, the number of votes you may cast in any meeting
of shareholders is based on the number of accumulation units you have in the
Separate Account. In matters which pertain only to a particular variable
account, you have voting rights based on the number of accumulation units you
have in such variable account.

Only owners with contracts having an interest in the affected

16
<PAGE>

variable account shall have voting rights as to such matters.

You have no voting rights with respect to your interest in the Fixed Account.

REPORTS TO CONTRACT OWNERS

During the accumulation period, we will send you at least semiannually each
year, a report which shows:

. the current contract value;

. the current number of accumulation units credited to each variable account
in which you have an interest; and

. the current accumulation value of each variable account and Fixed Account
in which you have an interest.

We will also send you at least semiannually, a statement of the investments of
the underlying Fund Series held by the Separate Account.

OWNERSHIP OF SEPARATE ACCOUNT ASSETS

We have exclusive and absolute control of our assets, including all assets in
the Separate Account.

LIABILITIES OF SEPARATE ACCOUNT

The assets in the Separate Account are held for the exclusive benefit of
contract owners having an interest in the Separate Account. We may not charge
the Separate Account with liabilities which arise from any other business we
conduct. We may not charge any variable account's assets with liabilities which
arise from any business of other variable accounts. Such assets will be held
for the exclusive benefit of contract owners having a interest in the variable
account. We do not hold ourselves to be trustee with respect to such assets.

GENERAL ACCOUNT

The General Account contains all of our assets other than those allocated to the
Separate Account or to any other segregated investment account.

<PAGE>

EXHIBIT 99.4(b)

Age Misstatement Endorsement (Form 0410-JA87)
<PAGE>

EXHIBIT 99.4(b)

FIRST CAPITAL LIFE
INSURANCE COMPANY

AGE MISSTATEMENT ENDORSEMENT

This endorsement becomes a part of the contract to which it is attached.

The following sentence is added to the Required Proof of Age subsection of the
ANNUITY PAYMENTS section.

Any underpayments will be made up immediately by the company and
overpayments will be deducted from the succeeding payments by the company
as necessary.

Signed for the Company at La Jolla, California.

/s/ ANDREW L. LOEB /s/ FRED A BUCK
Secretary President

0410-JA87

<PAGE>

EXHIBIT 99.4(c)

Pennsylvania Variable Annuity Endorsement (Form 0804-JA87)
<PAGE>

EXHIBIT 99.4(c)

FIRST CAPITAL LIFE
INSURANCE COMPANY

PENNSYLVANIA VARIABLE ANNUITY ENDORSEMENT

This endorsement becomes a part of the contract to which it is attached.

The first sentence of the third paragraph of the Contract Maintenance Charge
subsection of the CONTRACT VALUE section is hereby replaced by the following:

We reserve the right to increase the amount of this charge; however, it
will never be increased to an amount in excess of $50. Except for the
right to increase the Contract Maintenance Charge as described in the
preceding sentence, expense results shall not adversely affect the Separate
Account Accumulation Value.

The second paragraph of the TRANSFERS section is hereby replaced by the
following:

Transfers will be made on the valuation day next following the day we
receive written notice signed by you at our Annuity Service Office.
Although we do not anticipate any limit on such transfer, we reserve the
right to limit the number and frequency of variable account transfers, and
to impose a fee or charge on such transfers. If a fee or charge is
imposed, we guarantee that it will not exceed $50.

Signed for the Company at San Diego, California.

/s/ ANDREW L. LOEB /s/ FRED A BUCK
Secretary President

0804-JA87 a

<PAGE>

EXHIBIT 99.4(d)

Fixed Account Accumulation Value Endorsement (Form 0806-DA84)
<PAGE>

EXHIBIT 99.4(d)

FIRST CAPITAL LIFE
INSURANCE COMPANY

FIXED ACCOUNT ACCUMULATION VALUE ENDORSEMENT

This endorsement becomes part of the contract to which it is attached.

The following is added at the end of the Contract Maintenance Charge subsection
of the Contract Value section:

Regardless of anything in the contract to the contrary, we guarantee:

1) that the contract maintenance charge assessed to the Fixed Account
will not exceed $30 annually; and

2) that if no premium is paid into the Fixed Account during a contract
year, the contract maintenance charge may only be imposed to the
extent that it is deducted from interest in excess of 3% per annum.

Signed for the Company at San Diego, California.

/s/ ANDREW L. LOEB /s/ FRED A BUCK
Secretary President

0806-DA84 b

<PAGE>

EXHIBIT 99.4(e)

Special Endorsement For Qualified Plans (Form 0807-EA84)
<PAGE>

EXHIBIT 99.4(e)

FIRST CAPITAL LIFE
INSURANCE COMPANY

SPECIAL ENDORSEMENT FOR QUALIFIED PLANS

This endorsement becomes part of the Contract to which it is attached.

The following is added at the end of the Qualified Plan Special Provisions
Section:

If your contract is issued under Internal Revenue Code sections 401, 403(b) or
408, the following overriding provisions apply.

1. Except in the case of a Pension or Profit Sharing Plan, trusteed or
custodial Keogh Plan, or a 408(a) Plan, the Owner of the contract is the
Annuitant.

2. Payment Plan A, Interest, shall not be available nor shall any other
Payment Plan be elected which would result in less than 50% of the value of
the benefits payable under the contract being distributed over the life
expectancy of the Annuitant.

3. Your entire interest in the contract is nonforfeitable.

If your contract is issued under a Deferred Compensation Plan intended to
qualify under IRC Section 457, the following overriding provisions apply.

1. All rights under the contract, including those rights which may be
exercised by the Annuitant or a beneficiary, are owned exclusively by the
Owner.

2. All benefits payable under the contract shall be paid to or at the
direction of the Owner.

3. Payment Plan A, Interest, shall not be available nor shall any other
Payment Plan be elected which would result in less than 50% of the value of
the benefits payable under the contract being distributed over the life
expectancy of the Annuitant.

Signed for the Company at San Diego, California.

/s/ ANDREW L. LOEB /s/ FRED A. BUCK
Secretary President

0807-EA84 b

<PAGE>

EXHIBIT 99.4(f)

Disclaimer Notice For Tax Qualified Plans (Form 0808-GA84)
<PAGE>

EXHIBIT 99.4(f)

FIRST CAPITAL LIFE
INSURANCE COMPANY

DISCLAIMER NOTICE FOR TAX QUALIFIED PLANS

This endorsement becomes a part of the contract to which it is attached.

This plan is intended to qualify under the Internal Revenue Code for tax favored
status. Language contained in this policy referring to Federal tax statues or
rules is informational and instructional and this language is not subject to
approval or disapproval by the state in which this policy is issued for
delivery.

Your qualifying status is the controlling factor as to whether your funds will
receive tax favored treatment rather than the insurance contract. Please ask
your tax advisor if you have any questions as to whether or not you qualify.

Signed for the Company at San Diego, California.

/s/ ANDREW L. LOEB /s/ FRED A BUCK
Secretary President

0808-GA84 a

<PAGE>

EXHIBIT 99.4(g)

New Jersey Variable Annuity Endorsement (Form 0809-GA84)
<PAGE>

EXHIBIT 99.4(g)

FIRST CAPITAL LIFE
INSURANCE COMPANY

NEW JERSEY VARIABLE ANNUITY ENDORSEMENT

This endorsement becomes a part of the policy to which it is attached.

The last paragraph of the separate Account Accumulation Value subsection of the
CONTRACT VALUE section is replaced by the following:

The accumulation unit value (value in dollar amount per unit) of a variable
account will vary (increase or decrease) with the investment experience of
the variable account. The number of accumulation units will not change due
to a change in the accumulation unit value.

The following subsection is added following the Unscheduled Additional Premium
Payments subsection of the PREMIUM PAYMENTS section:

Limitation of Premium Payments

If this contract is purchased in connection with a nonqualified plan under the
Internal Revenue Code, we reserve the right to limit premium payments to an
aggregate amount of $500,000.

Signed for the Company at San Diego, California.

/s/ ANDREW L. LOEB /s/ FRED A. BUCK
Secretary President

0809-GA84 b

<PAGE>

EXHIBIT 99.4(h)

Individual Flexible Premium Deferred Annuity and Variable Accumulation Contract
Endorsement (Form 0810-LA84)
<PAGE>

EXHIBIT 99.4(h)

FIRST CAPITAL LIFE
INSURANCE COMPANY

INDIVIDUAL FLEXIBLE PREMIUM DEFERRED ANNUITY
AND VARIABLE ACCUMULATION CONTRACT ENDORSEMENT

As required by Section 72(s) of the Internal Revenue Code of 1954, as amended by
the Tax Reform Act of 1984, the contract is amended as follows.

The Rights of the Contract Owner provision of the YOUR CONTRACT WITH FIRST
CAPITAL LIFE INSURANCE COMPANY section is amended by adding the following:

. the right to choose the owner's beneficiary according to the DEATH OF
OWNER - BENEFICIARY AND PROCEEDS section.

The last paragraph of the Rights of the Contract Owner provision is amended to
read as follows:

If you die before the annuitant, all of these rights belong to the owner's
beneficiary unless these rights have been properly assigned (see the
General Terms section on assignments). If there are joint owners, upon the
death of the first joint owner the survivor will become sole owner.

The first paragraph of the FULL & PARTIAL WITHDRAWAL BENEFITS DURING
ACCUMULATION PERIOD section is amended to read as follows:

Subject to the BENEFICIARY AND PROCEEDS section, you may withdraw a part of
the contract value or all of the contract value less the withdrawal charge,
if any, by surrendering the contract to us (see CONTINGENT DEFERRED SALES
CHARGE section). You may make the request:

1. while this contract is in force during the annuitant's life, except that
no withdrawal is permitted after the annuity date under Payment Plans D,
E or F; or

2. before the death of the owner, provided, if there are joint owners and
the joint owners are husband and wife, then the death of the survivor
thereof; further provided, if the joint owners are not husband and wife,
then on the death of the first joint owner.

The following provision is added immediately following the BENEFICIARY AND
PROCEEDS section:

Death of Owner - Beneficiary and Proceeds.

The owner's beneficiary is the person named to receive the death benefit
proceeds upon the owner's death during the accumulation period. The
owner's beneficiary is as named in the application for this contract,
unless later changed.

You may name any owner's beneficiary to be an owner's permanent
beneficiary. The interest of such owner's beneficiary cannot be changed
without his or her written consent. Otherwise, you can change an owner's
beneficiary as explained below.

Unless you state otherwise, all rights of an owner's beneficiary, including
an owner's permanent beneficiary, will end if he or she dies before the
owner.

0810-LA84 Page 1 of 3 a
<PAGE>

For the purpose of this provision, the term OWNER means any owner. If
there are joint owners, the term OWNER means the first joint owner to die
unless the joint owners are husband and wife. If the joint owners are
husband and wife and if the surviving spouse is the sole surviving joint
tenant, the term OWNER refers to the survivor thereof.

Changing the Owner's Beneficiary.

You may change the owner's beneficiary at any time during the owner's life.
To do so, send a written request to our home office. The request must be
in a form we accept. The change will go into effect when it is signed,
subject to any payments we make or other actions we take before we record
the change.

A change cancels all prior owner's beneficiaries; except, it will not
cancel any owner's permanent beneficiary without such owner's beneficiary's
written consent.

Death Benefit - Owner Death.

If the owner dies prior to the annuity date, we will pay the owner's
beneficiary the death proceeds. No death benefit will be paid if the owner
dies after the annuity date.

Proceeds - Owner Death.

The proceeds payable on the owner's death will be the greater of:

. the contract value; or

. the total of all premiums paid less reduction caused by previous
withdrawals, if any.

The death benefit proceeds will be determined at the end of the valuation
period during which we receive due proof of death at our home office. The
proceeds from the Separate Account will be immediately transferred to our
General Account.

Payment of Proceeds - Owner Death.

If the owner's beneficiary is the surviving spouse of the deceased owner,
he or she may choose to receive a payment under any payment plan of this
contract. For any other owner's beneficiary, only those options may be
chosen that provide for complete distribution of such owner's interest in
the contract:

1. within 5 years of the date of such owner's death;

2. over the lifetime of the owner's beneficiary; or

3. over a period that does not exceed the life expectancy of such owner's
beneficiary, as defined by the Internal Revenue Code and Regulations
adopted under the Code.

Subparagraphs (2) and (3) apply only to individuals. All such payments
must start within one year of the date of such owner's death.

Contract Continuation - Surviving Spouse

If the surviving spouse of the deceased owner is the owner's beneficiary,
or is the sole surviving joint tenant, and if the deceased owner was not
the sole annuitant, such spouse may choose to continue this contract in
force on the same terms as before the owner's death.
<PAGE>

Death of Both Owner And Annuitant

Payment will be made either to the beneficiary or to the owner's
beneficiary, but not both, according to whichever first becomes applicable.
If an owner is not also an annuitant, then, in the event the death of the
owner and the annuitant is under

0810-LA84 Page 2 of 3
<PAGE>

circumstances in which it cannot be determined who died first, payment will
be made to the annuitant's beneficiary. If the owner and the annuitant are
the same, payment will be made to the annuitant's beneficiary.

No Owner Beneficiary.

If there is no owner beneficiary, the death benefit proceeds shall be paid
to the joint owner, if any, otherwise to the annuitant.

Death After Annuity Date

On the death of any owner after the annuity date, any guaranteed amounts
remaining unpaid will continue to be paid to the annuitant pursuant to the
payment plan in force at the date of death. On the death of the annuitant,
any unpaid benefit available will be paid to the beneficiary of the
annuitant in accordance with the Payment After a Payee Dies provision of
the PAYMENT PLAN section.

This amendment controls over any contrary provision in the contract.

Signed for the Company at La Jolla, California.

/s/ ANDREW L. LOEB /s/ FRED A. BUCK
Secretary President

0810-LA84 Page 3 of 3

<PAGE>

EXHIBIT 99.4(i)

Transfers Endorsement (Form 0812-KA85)
<PAGE>

EXHIBIT 99.4(i)

FIRST CAPITAL LIFE
INSURANCE COMPANY

TRANSFERS ENDORSEMENT

This endorsement becomes a part of the policy to which it is attached.

The first sentence of the second paragraph of the TRANSFERS section is amended
to read:

Transfers will be made at the Accumulation Unit Value next determined
following our receipt of a written notice signed by you at our Annuity
Service Office.

Signed for the Company at San Diego, California.

/s/ ANDREW L. LOEB /s/ FRED A. BUCK
Secretary President

0812-KA85 a

<PAGE>

EXHIBIT 99.4(j)

Special Endorsement For Texas Optional Retirement Program (Form 0814-HA86)
<PAGE>

EXHIBIT 99.4(j)

FIRST CAPITAL LIFE
INSURANCE COMPANY

SPECIAL ENDORSEMENT FOR
TEXAS OPTIONAL RETIREMENT PROGRAM

This endorsement is to be attached to and becomes a part of the Contract of each
purchaser who is also a participant in the Texas Optional Retirement Program
("Program").

Notwithstanding any provision of the contract to the contrary, the following
restrictions apply to participants in the Texas Optional Retirement Program,
pursuant to Texas law:

(a) loans against the cash value of a contract, surrender of contracts and
other withdrawals to buy an annuity or make payment to you, your estate or
your beneficiary may be made only if you die, retire or terminate
employment in all Texas institutions of higher education, as defined under
Texas law.

(b) withdrawals may only be made if we first receive (1) a written
statement from the appropriate institution verifying your vesting status
and termination of employment, and, except in case of your death, (2) a
written statement from you that you are not transferring employment to
another Texas institution of higher education.

(c) if you die, retire, or terminate employment in all Texas institutions
of higher education before you are vested in the Program (this currently
requires one year of participation in the Program), any amounts provided by
the State's matching contribution will be refunded to the appropriate
institution and not included in any payment we make.

(d) a withdrawal to make payment to an entity providing another funding
vehicle may be made only to the extent permitted under the Program.

We reserve the right to change these restrictions, or to add restrictions,
without your consent, to the extent necessary to maintain compliance with the
laws and regulations applicable to the Program.

Signed for the Company at La Jolla, California.

/s/ ANDREW L. LOEB /s/ FRED A BUCK
Secretary President

0814-HA86

<PAGE>

EXHBIT 99.4(k)

Premium Tax Endorsement (Form 0819-KA87)
<PAGE>

EXHIBIT 99.4(k)

FIRST CAPITAL LIFE
INSURANCE COMPANY

PREMIUM TAX ENDORSEMENT

This endorsement becomes a part of the contract to which it is attached.

The Premium Tax subsection of the GENERAL TERMS section is deleted in its
entirety.

Signed for the Company at La Jolla, California.

/s/ ANDREW L. LOEB /s/ FRED A. BUCK
Secretary President

0819-KA87

<PAGE>

EXHIBIT 99.4(l)

Some Rights We Reserve Endorsement (Form 0820-KA87)
<PAGE>

EXHIBIT 99.4(l)

FIRST CAPITAL LIFE
INSURANCE COMPANY

SOME RIGHTS WE RESERVE ENDORSEMENT

This endorsement becomes a part of the contract to which it is attached.

The following subsection is added at the end of the GENERAL TERMS section:

SOME RIGHTS WE RESERVE

When permitted by law, and subject to any necessary regulatory approval,
and if required by law, after any appropriate contractowner notification
has been given or contractowner approval by vote has been obtained, we
reserve the right to:

. deregister the Separate Account under the Investment Company Act of
1940;

. add or remove any Variable Account;

. combine a Variable Account with another Variable Account;

. change the investment policy of a Variable Account, but only after
permitting you to transfer without charge, the Account Value from any
affected Variable Account to other Variable Accounts or to the Fixed
Account;

. manage the Separate Account under the direction of a committee at any
time;

. operate the Separate Account as a management company under the
Investment Company Act of 1940, or in any other form permitted by law,
if we deem it to be in the best interest of contractowners; and

. restrict or eliminate any voting rights of contractowners, or other
persons who have voting rights as to the Separate Account, or vote
some or all shares owned by us at our discretion.

If investment in the Fund or a portfolio series is no longer possible or in our
opinion becomes inappropriate to the purpose of this contract, we may substitute
another mutual fund or series without your consent. However, we will make no
such substitution without first notifying you and securing any necessary
approval of the appropriate regulatory authorities.

Signed for the Company at La Jolla, California.

/s/ ANDREW L. LOEB /s/ FRED A. BUCK
Secretary President

0820-KA87

<PAGE>

EXHIBIT 99.4(m)

Right To Return Endorsement (Form 0821-LA87)
<PAGE>

EXHIBIT 99.4(m)

FIRST CAPITAL LIFE
INSURANCE COMPANY

RIGHT TO RETURN ENDORSEMENT

This endorsement becomes a part of the policy to which it is attached.

The Right to Examine Your Contract provision on the face of this contract is
hereby replaced by the following:

RIGHT TO EXAMINE YOUR CONTRACT

We want you to fully understand and be satisfied with your contract. If
for any reason, you are not satisfied, return the contract to our Annuity
Service Office within 20 days after receiving it. If you do, the contract
will be void from the contract date. We will refund all premium paid. No
withdrawal charge will be imposed.

The following paragraph is added to the ANNUITY PAYMENTS section:

We guarantee that annuity payments starting on the annuity date are fixed
as to the dollar amount and will not be affected by variations in expenses
or mortality experience.

Signed for the Company at La Jolla, California.

/s/ ANDREW L. LOEB /s/ FRED A. BUCK
Secretary President

0821-LA87

<PAGE>

EXHIBIT 99.4(n)

Payment Plans and Contract Maintenance Charge Endorsement (Form 0822-AA88)
<PAGE>

EXHIBIT 99.4(n)

FIRST CAPITAL LIFE
INSURANCE COMPANY

PAYMENT PLANS AND CONTRACT MAINTENANCE CHARGE ENDORSEMENT

This endorsement becomes a part of the contract to which it is attached.

The second paragraph of the PAYMENT PLANS section is replaced by the following:

A plan is available only if the monthly guaranteed payment is at least $20;
otherwise the proceeds will be paid in cash.

The first sentence of the third paragraph of the Contract Maintenance Charge
subsection of the CONTRACT VALUE section is hereby replaced by the following:

Signed for the Company at La Jolla, California.

/s/ ANDREW L. LOEB /s/ FRED A. BUCK
Secretary President

0822-AA88

<PAGE>

EXHIBIT 99.4(o)

Minimum Guaranteed Cash Values for Fixed Account (Form 0825-KA88)
<PAGE>

EXHIBIT 99.4(o)

FIRST CAPITAL LIFE
INSURANCE COMPANY

TABLE OF MINIMUM GUARANTEED CASH VALUES
FOR THE FIXED ACCOUNT

This endorsement is a part of the attached policy and is subject to its
provisions.

The following subsection is added at the end of the CONTRACT VALUE section.

The table of cash values for the fixed account shown below is based on the
minimum guaranteed interest rate of 4% and on assumed $1000 annual premiums
paid at the beginning of each year, starting on January 1.

If a rate of interest greater than the minimum guaranteed rate is credited,
or if the premiums allocated to the fixed account do not follow the
schedule shown, or if partial cash benefits are received, the cash values
will be different from those shown. For current cash values, please
contact the Company.
<TABLE>
<CAPTION>

POLICY ANNUAL ACCOUNT CASH CASH VALUE
YEAR PREMIUM VALUE VALUE RATE OF RETURN

Signed for the Company at San Diego, California.

/s/ ANDREW L. LOEB /s/ FRED A. BUCK
Secretary President

0825-KA88

<PAGE>

EXHIBIT 99.4(p)

Contract Maintenance Charge Endorsement (Form 0827-BA88)
<PAGE>

EXHIBIT 99.4(p)

FIRST CAPITAL LIFE
INSURANCE COMPANY

CONTRACT MAINTENANCE CHARGE ENDORSEMENT

This endorsement becomes a part of the contract to which it is attached.

The Contract Maintenance Charge shown on page 3 is imposed during the
Accumulation Period and may be changed in future years. However, the charge
will never exceed $50 in any contract year.

Signed for the Company at La Jolla, California.

/s/ ANDREW L. LOEB /s/ FRED A. BUCK
Secretary President

<PAGE>

EXHIBIT 99.4(q)

Endorsement For Contracts Issued Under IRC Section 403(b) Plans (Form 0827-EA89)
<PAGE>

EXHIBIT 99.4(q)

FIRST CAPITAL LIFE
INSURANCE COMPANY

ENDORSEMENT FOR CONTRACTS ISSUED UNDER
IRC SECTION 403(b) PLANS

This endorsement becomes part of the contract to which it is attached. It
applies for contracts issued under Internal Revenue Code Section 403(b).

The last paragraph of the Allocation of Premium Payments subsection of the
PREMIUM PAYMENTS section is hereby replaced by the following:

Unless you choose otherwise, we will invest your payment in the Money
Market Account. If your contract value is less than $200 at any time after
the end of the 1/st/ contract year, we reserve the right to terminate the
contract, returning to you the contract value.

Signed for the Company at San Diego, California.

/s/ ANDREW L. LOEB /s/ FRED A BUCK
Secretary President

0827-EA89

<PAGE>

EXHIBIT 99.4(r)

Endorsement To Page 3 (Form 0828-GA89)
<PAGE>

EXHIBIT 99.4(r)

FIRST CAPITAL LIFE
INSURANCE COMPANY

ENDORSEMENT TO PAGE 3

This endorsement becomes a part of the contract to which it is attached.

The variable accounts and corresponding fund series available under your
contract are listed below. Premiums may be allocated to these variable accounts
as provided for in the PREMIUM PAYMENTS section and accumulation values may be
transferred into or out of these variable accounts as provided in the TRANSFERS
section.

<TABLE>
<CAPTION>
VARIABLE ACCOUNTS CORRESPONDING FUND SERIES
<S> <C>
Variable Account I Money Market
Variable Account II Equity
Variable Account III Bond and Income
Variable Account IV Government Securities
Variable Account V Basic Value Series
Variable Account VI High Yield Series
Variable Account VII Equity Income Series
Variable Account VIII Dreman Contrarian Series
Variable Account IX Zweig Total Return Series
</TABLE>

In the future, you will be notified of the variable accounts and the
corresponding fund series under your contract by means of a current prospectus,
not by a further Endorsement to page 3.

Signed for the Company at San Diego, California.

/s/ ANDREW T. LOEB /s/ FRED A. BUCK
Secretary President

0828-GA89

<PAGE>

EXHIBIT 99.4(s)

Death Benefit Proceeds Endorsement (Form 0830-AA90)
<PAGE>

EXHIBIT 99.4(s)

FIRST CAPITAL LIFE
INSURANCE COMPANY

DEATH BENEFIT PROCEEDS ENDORSEMENT

This endorsement becomes a part of the contract which it accompanies.

The Proceeds subsection of the BENEFICIARY, DEATH OF OWNER AND PROCEEDS section,
is hereby replaced by the following:

Proceeds means the amount payable on:

. the exercise of a withdrawal; or

. the owner's death prior to the annuity date; or

. the annuitant's death, or in the case of joint annuitants, the death
of the last survivor of the joint annuitants, prior to the annuity
date.

On or before the fifth contract anniversary, the proceeds, also called
death benefit proceeds, payable on the owner's death or the annuitant's
death, whichever first becomes applicable, will be the greater of:

. the contract value; or

. the total of all premiums paid less reductions caused by previous
withdrawals, if any.

For the purpose of describing the death benefit proceeds after the fifth
anniversary, we define milestone date to refer to the fifth contract
anniversary and each fifth anniversary thereafter. After the fifth
contract anniversary, there is a minimum guaranteed death benefit equal to
the death benefit as of the immediately preceding milestone date, increased
by any premiums paid since that milestone date and decreased by any
withdrawals, net of withdrawal charge, received since that milestone date.
After the fifth anniversary, the death benefit proceeds will be the
contract value, or, if larger, the minimum guaranteed death benefit.

The death benefit proceeds will be determined at the end of the valuation
period during which we receive due proof of death at our home office. The
proceeds from the Separate Account will be immediately transferred to our
General Account.

All proceeds are subject to the restrictions below.

Signed by the Company at San Diego, California.

/s/ ANDREW L. LOEB /s/ FRED A. BUCK
Secretary President

0830-AA90 a

<PAGE>

EXHIBIT 99.4(t)

Death Benefit Proceeds Endorsement (Form 0830-AB90)
<PAGE>

EXHIBIT 99.4(t)

FIRST CAPITAL LIFE
INSURANCE COMPANY

DEATH BENEFIT PROCEEDS ENDORSEMENT

This endorsement becomes a part of the contract which it accompanies.

The Proceeds subsection of the BENEFICIARY AND PROCEEDS section, is hereby
replaced by the following:

Proceeds means the amount payable on:

. the exercise of a withdrawal; or

. the owner's death prior to the annuity date; or

. the annuitant's death (or in the case of joint annuitants, the death
of the last survivor of the joint annuitants), prior to the annuity
date.

. the contract value; or

. the total of all premiums paid less reductions caused by previous
withdrawals, if any.

For the purpose of describing the death benefit proceeds after the fifth
anniversary, we define milestone date to refer to the fifth contract
anniversary and each fifth anniversary thereafter. After the fifth
contract anniversary, there is a minimum guaranteed death benefit equal to
the death benefit as of the next previous milestone date, increased by any
premiums paid since that milestone date and decreased by any withdrawals,
net of withdrawal charge, received since that milestone date. After the
fifth anniversary, the death benefit proceeds will be the contract value,
or, if larger, the minimum guaranteed death benefit.

The death benefit proceeds will be determined at the end of the valuation
period during which we receive due proof of death at our home office. The
proceeds from the Separate Account will be immediately transferred to our
General Account.

All proceeds are subject to the restrictions below.

Signed by the Company at San Diego, California.

/s/ ANDREW L. LOEB /s/ FRED A. BUCK
Secretary President

0830-AB90

<PAGE>

EXHIBIT 99.4(u)

Deferral Of Cash Surrender Value Endorsement (Form 4379-IA89)
<PAGE>

EXHIBIT 99.4(u)

FIRST CAPITAL LIFE
INSURANCE COMPANY

DEFERRAL OF CASH SURRENDER VALUE ENDORSEMENT

This endorsement becomes a part of the policy to which it is attached.

In the event of a deferral of payment of a cash surrender value under the
provision of the Delay of Payment subsection of the GENERAL TERMS section,
we shall pay interest to the policyholder at the rate specified in section
28-22-104(2), Idaho Code as established and in existence at the time of the
surrender demand.

Signed for the Company at San Diego, California

/s/ ANDREW L. LOEB /s/ FRED A. BUCK
Secretary President

4379-IA89

<PAGE>

EXHIBIT 99.4(v)

Important Notice (4930-FA90)
<PAGE>

EXHIBIT 99.4(v)

FIRST CAPITAL LIFE
INSURANCE COMPANY

IMPORTANT NOTICE

This policy is a legal contract between First Capital Life Insurance Company and
the Owner as designated on Page 3 of the policy.

READ YOUR POLICY CAREFULLY. This cover sheet provides only a brief outline of
some of the important features of your policy. This is not the insurance
contract, and only the actual policy provisions will control. The policy itself
sets forth in detail the rights and obligations of both you and First Capital
Life Insurance Company. IT IS THEREFORE IMPORTANT THAT YOU READ YOUR POLICY.

Please be advised of the following:

1. The Insured (or Annuitant) under this policy is shown on Page 3.

2. The benefit provided under this policy is shown on Page 3.

3. To file a claim, you (which includes your beneficiary and/or legal
representative) may contact the agent through whom you purchased the
policy, or you may contact our Home Office by telephone (619) 452-9060 or
in writing (P.O. Box 85733, San Diego, CA 92186-5733). Once so notified,
we will provide you with appropriate claim reporting forms and additional
important information you will need to properly report such claim.

4. A TABLE OF CONTENTS is included in the policy which will assist you in
locating specific additional information, such as limitations and
conditions of the policy coverage(s); definitions of key words and phrases;
provisions governing cancellation, renewal and amendment of the policy by
either you or First Capital Life Insurance Company; options available under
the policy; and other matters of concern or interest.

5. A brief description of the policy is found on the cover of your policy.

Additional information may be available either from the agent through whom you
purchased the policy, or from our Customer Service Department:

First Capital Life Insurance Company
Customer Service Department
P.O. Box 85733
San Diego, CA 92186-5733

Telephone: (619) 452-9060

4930-FA90

<PAGE>

EXHIBIT 99.4(w)

Assumption Certificate (Form 0001-IA92)

<PAGE>

EXHIBIT 99.4(w)

[LOGO OF PACIFIC CORINTHIAN]

PACIFIC CORINTHIAN LIFE INSURANCE COMPANY, ADMINISTRATIVE OFFICES
10221 WATERIDGE CIRCLE, P.O. BOX 85744, SAN DIEGO, CALIFORNIA 92186-5744
TELEPHONE 1-800-735-5535

ASSUMPTION CERTIFICATE

Issued To:

This is to certify that, pursuant to the terms of a Reinsurance and Assumption
Agreement, the above policy (contract) and all endorsements thereto (herein
called the "Policy" ("Contract"), issued by FIRST CAPITAL LIFE INSURANCE
COMPANY, a California stock insurance corporation was assumed by PACIFIC
CORINTHIAN LIFE INSURANCE COMPANY, a California stock insurance corporation.

This change is effective as of DECEMBER 31, 1992.

All of the terms and conditions of the Policy (Contract) remain unchanged,
except that PACIFIC CORINTHIAN LIFE INSURANCE COMPANY shall be the insurer. All
premium payments, notices and claims on the Policy (Contract) shall hereafter be
made directly to PACIFIC CORINTHIAN LIFE INSURANCE COMPANY as though it had
issued the Policy (Contract) originally, at the administrative address indicated
above.

YOU SHOULD ATTACH THIS ASSUMPTION CERTIFICATE TO THE POLICY (CONTRACT).

Inquiries concerning the Policy (Contract) should be directed to PACIFIC
CORINTHIAN LIFE INSURANCE COMPANY.

IN WITNESS WHEREOF, PACIFIC CORINTHIAN LIFE INSURANCE COMPANY has caused this
Assumption Certificate to be signed by its duly authorized officers this 31/st/
day of December, 1992.

PACIFIC CORINTHIAN LIFE INSURANCE
COMPANY

By /s/ MARILEE ROLLER

MARILEE ROLLER, PRESIDENT

Attest:

/s/ AUDREY L. MILFS

Audrey L. Milfs, Secretary

0001-IA92
PC
Page 1 of 1

<PAGE>

EXHIBIT 99.4(x)

Rehabilitation Endorsement (6074/1192)

<PAGE>

EXHIBIT 99.4(x)

ENDORSEMENT
INFORMATION
REGARDING YOUR
FIRST CAPITAL LIFE
RESTRUCTURED CONTRACT

WITH INFORMATION CONCERNING
[Logo of Pacific Corinthian]
<PAGE>

GENERAL INFORMATION

This information has been prepared to assist you in obtaining information on
your contract and in requesting changes available during the Rehabilitation
Plan. Most transactions available during the Plan Period may be requested once
each contract year after October 30, 1992, the Closing Date. Please refer to
the enclosed documents for additional information on each available benefit.

HOW TO MAKE CHANGES TO YOUR CONTRACT:

All requests should be sent to: First Capital Life Insurance Company, P.O. Box
85733, San Diego, CA 92186-5733. All forms must be properly completed and signed
by the contract owner(s). Please pay particular attention to the tax questions
if applicable.

. IF YOU HAVE A LIFE INSURANCE CONTRACT:

To request a partial or full surrender, loan, annuitization, billing changes,
address or premium change, please use the contract service request form #26200.
Forms required to request a Tax Free Exchange where the surrender proceeds are
to be sent to another company may be obtained by writing First Capital Life or
calling the First Capital Life Hotline. All full surrender requests must be
postmarked at least 5 days but no more than 60 days prior to the contract
anniversary date.

To request a contract change such as a decrease to the specified amount, option
change or deletion of a benefit or rider, please use the contract amendment
request form #2112-CA90.

If you would like to place your contract on a monthly pre-authorized check mode,
please call the First Capital Life Hotline for instructions.

. IF YOU HAVE A SINGLE PREMIUM DEFERRED ANNUITY OR A SINGLE PREMIUM
IMMEDIATE ANNUITY:

To request a partial or full surrender, address change or annuitization for a
Single Premium Deferred Annuity, or a full surrender or address change for a
Single Premium Immediate Annuity, please use the contract service request form
#26200. Forms required to request a Tax Free Exchange or Transfer of Assets
where the surrender proceeds are to be sent to another company may be obtained
by writing First Capital Life or calling the First Capital Life Hotline. All
full surrender requests must be postmarked at least 5 days but no more than 60
days prior to the contract anniversary date.

. IF YOU HAVE A VIP ANNUITY:

To request a partial or full surrender, fund transfer within the Separate
Accounts, address change or annuitization, please use the contract service
request form #7616. Forms required to request a Tax Free Exchange or Transfer
of Assets where the surrender proceeds are to be sent to another company may be
obtained by writing First Capital Life or calling the First Capital Life
Hotline. All full surrender requests must be postmarked at least 5 days but no
more than 60 days prior to the contract anniversary date.

HOW TO OBTAIN ADDITIONAL INFORMATION AND ASSISTANCE WITH YOUR CONTRACT:

You may contact your First Capital Life agent or call the First Capital Life
Hotline at (800) 735-5535.

First Capital Life's Interactive Voice Response system (IVR) is available to you
24 hours a day to provide you with current information about your contract's
values, billing status and amount of available partial surrender or loan. You
may also obtain the interest rate currently being credited on renewals. You can
access IVR by dialing (800) 735-5535 on your touch tone phone.
<PAGE>

You will be asked to:

1. Enter your contract number. Life contract numbers begin with zero "0" or
with "AA" and end with "M". Annuity contracts begin and end with "V". Use
"8" on your phone to enter "V".

2. Press the pound (#) sign.

3. Enter the last 2 digits of the insured's or annuitant's year of birth.

4. Press the pound (#) sign.

You will also be able to speak to a Representative if you need further
assistance, Monday through Thursday, 6:30 a.m. to 4:30 p.m. and Friday, 6:30
a.m. to 1:15 p.m., Pacific Time.
<PAGE>

FIRST CAPITAL LIFE INSURANCE COMPANY

REHABILITATION ENDORSEMENT

In accordance with the Order Approving and Adopting Final Plan of Rehabilitation
approved by the Superior Court of Los Angeles County, California executed on
July 1, 1992 (the "Order"), this insurance policy or contract shall be
restructured to conform with the terms of the rehabilitation plan adopted as
embodied in the Order, the Agreement in Connection with the Rehabilitation of
First Capital Life Insurance Company ("FCL") dated July 29, 1992 (the
"Rehabilitation Plan" or the "Plan"):

THIS ENDORSEMENT SHALL INCORPORATE INTO THIS POLICY OR CONTRACT THE TERMS AND
CONDITIONS IMPOSED BY THE REHABILITATION AGREEMENT. EACH AND EVERY TERM OR
CHANGE IMPOSED BY THE REHABILITATION PLAN IS INCORPORATED INTO THIS POLICY OR
CONTRACT AND SHALL CONTROL OVER ANY OTHER TERMS OF THIS POLICY OR CONTRACT. A
COPY OF THE REHABILITATION AGREEMENT MAY BE OBTAINED BY CONTACTING FCL IN
CONSERVATION:

FIRST CAPITAL LIFE INSURANCE COMPANY
IN CONSERVATION
P.O. BOX 85836
SAN DIEGO, CALIFORNIA 92186-5836

THE REHABILITATION AGREEMENT MAKES NUMEROUS CHANGES WHICH AFFECT POLICYHOLDERS'
RIGHTS UNDER THIS POLICY OR CONTRACT DURING THE PLAN PERIOD. THE FOLLOWING IS A
PARTIAL LIST OF THESE CHANGES:

This Endorsement (including Exhibit 1) sets forth certain items of restructuring
as set forth in the Rehabilitation Agreement. This policy or contract is
restructured to become a "restructured contract" or "restructured policy". The
Rehabilitation Plan contemplates that these restructured policies and contracts
shall be restructured policies and contracts of FCL until on or after December
31, 1992, when liability under the restructured policies and contracts may be
transferred to and assumed by Pacific Corinthian Life Insurance Company
("Pacific Corinthian"). As a restructured contract or policy, this contract or
policy shall be subject to the provisions of the Order.

A. THE ROLE OF PACIFIC CORINTHIAN LIFE INSURANCE COMPANY

Pacific Corinthian may assume the liabilities of this policy or contract on
or after December 31, 1992. Until such an assumption by Pacific
Corinthian, this policy or contract will remain an FCL restructured policy
or contract.

B. EFFECT ON CREDITED INTEREST UNDER THE PLAN OF REHABILITATION

The interest rate credited to the unloaned account value under the policy
or contract will be based on the net rate earned on Pacific Corinthian's
investments (or FCL's investments, as appropriate) over the Plan Period, as
hereinafter defined, less one hundred fifty (150) basis points (1.50%).1/
In determining this net rate, capital gains and losses are amortized over a
specified time period. The minimum cumulative guaranteed interest rate
will be four percent (4%) compounded annually for policyholders or contract
holders who remain during the entire Plan Period.

C. POLICY LOANS AND PARTIAL SURRENDERS

Life insurance policyholders shall be entitled to make a new loan of up to
10% of the Net Loan Value at any time, once each policy year. Net Loan
Value means the maximum amount of policy loans permitted under the policy.

Policyholders or contract holders who have not received a policy loan in a
particular policy year may make a partial surrender of up to 10% of the
General Account Net Cash Value at any time, once each policy year. Net Cash
Value means cash value less the aggregate amount of outstanding policy
loans against the policy.

1/ For Capital Horizons policies, this number is 225 basis points (2.25%).

Page 1 of 4
<PAGE>

Partial surrenders are subject to contractual surrender charges, if any,
but partial surrenders will not be subject to the Surrender Proceeds
Adjustment, as defined in Section F below.

D. DURATION OF THE PLAN OF REHABILITATION

The Plan Period for the Rehabilitation Plan will commence with the closing
of the Rehabilitation Agreement on October 30, 1992 (the "Closing") and
will terminate on the earlier of (i) the last day of the calendar quarter
in which the Conservator approves the termination of the Rehabilitation
Plan or (ii) the last day of the calendar quarter ending immediately prior
to the five-year anniversary of the Closing. The duration of the
Rehabilitation Plan shall be known herein as the "Plan Period".

E. ADDITIONAL CREDITS

Policyholders or contract holders who remain until the end of the Plan
Period are eligible for a proportional share of two additional credits,
calculated pursuant to formulae contained in the Rehabilitation Agreement.
The First Credit will be ninety percent (90%) of Adjusted Surplus (as
defined in the Rehabilitation Agreement) but will not exceed an amount
necessary to provide each policy or contract with the net account value
that would have resulted if such policy or contract had been credited with
interest at a rate of six and one-half percent (6 1/2%) on a cumulative
basis, compounded annually during the Plan Period. To the extent that
ninety percent (90%) of Adjusted Surplus exceeds the First Credit,
policyholders and contract holders will receive ten percent (10%) of such
excess with the remaining ninety percent (90%) being paid to FCL for use in
payment of creditors.

F. LIMITATIONS ON SURRENDERS OF POLICY

Each policyholder or contract holder shall have the right to surrender this
policy or contract in full once each Plan year on the day prior to the
policy or contract anniversary date. An exception if the Capital
Dimensions product, which is deemed to have the right to surrender once
each year on the contract anniversary date.

Upon surrender of this policy or contract, a Surrender Proceeds Adjustment
(as described in the Rehabilitation Agreement) will be made to the cash
value, and the policyholder or contract holder shall receive a check for
the adjusted amount (the "Surrender Amount"). The percentage of cash value
that the policyholder or contract holder will receive after the Surrender
Proceeds Adjustment is made, but prior to subtracting policy loans, is as
follows:

Plan year one: 90%;
Plan year two: 90%;
Plan year three: 90%;
Plan year four: 93%;
Plan year five: 96%;
At end of Plan: 100%

PLUS (Life policies only) 100% of the net premiums paid during the Plan
Period. However, in no event shall the aggregate surrender payments exceed
the Net Cash Value of the policy.

The above adjustments shall not apply to Separate Account cash values
concerning variable annuity contracts. The adjustments shall apply to
General Account cash values only.

The Surrender Amount for single premium immediate annuity contracts shall
be calculated by multiplying the Surrender Proceeds Adjustment by the
contract's statutory reserve.

G. ADDITIONAL ADJUSTMENTS TO THE SURRENDER PAYMENT

If the policyholder or contract holder has not taken the entire 10% partial
surrender or loan available during the contract year in which the surrender
request is made, the unused portion will be exempt from the Surrender
Proceeds Adjustment.

For a policyholder or contract holder who is a resident of a state which
has not released special deposits, an additional adjustment will be made to
the cash value.

H. ADDITIONAL CHANGES WHICH MAY BE MADE ONLY TO A LIFE POLICY

Certain changes may be made by the policyholder to a restructured life
insurance policy during the Plan Period:

Page 2 of 4
<PAGE>

DEATH BENEFITS:

During the Plan Period, the policyholder may decrease the life insurance
death benefit by an aggregate amount of five percent (5%) each policy year
of the Plan, subject to contractual minimums.

DEATH BENEFIT OPTION CHANGES:

During the Plan Period, the policyholder may change the death benefit
option on a life insurance policy, subject to contractual minimums. If the
policy is currently Option 1 (a level death benefit), it may be changed to
Option 2 (an increasing death benefit). If the contract is Option 2, the
policy may be changed to Option 1.

CHANGES TO RIDERS AND ADDITIONAL BENEFITS:

The death benefit under each of the following may be decreased by an
aggregate amount of five percent (5%) during each year of the Plan period,
subject to contractual minimums: Spouse Benefit Rider, Children's Benefit
Rider, Term Rider for Universal Life and Accidental Death Benefit. These
riders and additional benefits, including Waiver of Cost, may also be
deleted at any time. The Spouse Benefit Rider, or Term Rider for Universal
Life may be converted according to the provisions of the rider, for the
same amount currently in force. The Children's Benefit Rider may be
converted pursuant to the provisions of the rider.

Holders of a Valueplan policy will be permitted to cancel the automatic
increase provision which will allow the death benefit to remain at the
current amount.

In addition, during the Plan Period each life insurance policyholder will
be entitled to surrender his or her policy in full for a nonforfeiture
extended term contract under which the Net Cash Value shall be applied to
provide existing death benefits less any outstanding policy loans for a set
term of years where such term is actuarially determined based on the non-
forfeiture provisions of the policy.

I. ANNUITIZATION

At any time during the Plan Period, the policyholder or contract holder
may:

a. exercise the annuitization options provided in a life insurance
policy and/or annuity contract with payments made over a period of
at least seven years;

OR INSTEAD the policyholder or contract holder may:

b. surrender the contract in full and convert the Net Cash Value to an
immediate annuity with payments made over a period of at least
seven years.

The Net Cash Value that is applied to these options shall not be affected
by the Surrender Proceeds Adjustment described in Section F. The Separate
Account portion of a variable annuity may be annuitized pursuant to the
terms of the annuity. The General Account portion of a variable annuity
shall remain subject to the limitations set forth in the Rehabilitation
Agreement.

(For single premium deferred annuities only): The holder of a single
premium deferred annuity which matures before the end of the Plan Period
must either extend the contract maturity date of the annuity contract to
the day after the Plan Period ends or annuitize the annuity contract for a
period of at least seven years.

J. BAIL OUT PROVISIONS

A bail out provision found in some policies and contracts permits, under
certain criteria, surrender of the policies or contracts without incurring
contractual surrender charges. As to such policies and contracts, a
violation of the bail out rate floor during the Plan Period will give rise
to a right to exercise the bail out right on the day preceding an
appropriate subsequent contract or policy anniversary date; however, the
Surrender Proceeds Adjustment set forth above shall apply. No exercise may
be made of a bail out right which existed or exists prior to the
commencement of the Plan period. Notwithstanding the foregoing, in no
event shall a contract holder or policyholder have greater rights to invoke
a bail out provision than contained in their contract or policy.

Page 3 of 4
<PAGE>

K. DEATH BENEFITS

Death benefits shall be paid during the Plan Period.

L. CONTRACT HOLDER HARDSHIPS

If a restructured contract holder or policyholder suffers demonstrable
financial hardship during the Plan Period, he or she may apply for an
exemption from the limitations on withdrawals contained in the
Rehabilitation Agreement. Hardship payments will be limited to the lesser
of Net Cash Value, Net Loan Value or $50,000, or such greater amount to
which Pacific Mutual Life Insurance Company and the Conservator may
mutually agree. Hardships shall be governed by criteria set by the
Rehabilitation Agreement, and denials of hardship applications may be
reviewed by the Court.

M. AFTER THE PLAN PERIOD

After the Plan period, the Rehabilitation Plan provides that Pacific
Corinthian shall be merged into Pacific Mutual Life Insurance Company. At
the end of the Plan Period, access will be provided to 100% of cash values,
to the same extent as the policy or contract permitted when FCL was not in
conservation, except as provided in the Rehabilitation Plan.

SIGNED FOR THE COMPANY AT SAN DIEGO, CALIFORNIA.

/s/ ANDREW L. LOEB /s/ FRED A. BURL
Secretary President

Page 4 of 4
<PAGE>

EXHIBIT 1
TO
REHABILITATION
ENDORSEMENT
FOR
FIRST CAPITAL LIFE
RESTRUCTURED CONTRACTS
<PAGE>

EXHIBIT 1 TO REHABILITATION ENDORSEMENT

A. PURPOSE OF ENDORSEMENT
On May 14, 1991, First Capital Life Insurance Company ("FCL") was placed
into Conservation by the Superior Court of Los Angeles County, California ("the
Court"). The Court commenced hearings concerning the adoption of a plan of
rehabilitation on April 21, 1992. On July 1, 1992, the Court entered its Order
Approving and Adopting Final Plan of Rehabilitation Plan and Order of
Rehabilitation (the "Order"). The Order authorized the California Insurance
Commissioner, as Conservator (the "Conservator") of FCL, to implement a plan of
rehabilitation with Pacific Mutual Life Insurance Company ("Pacific Mutual").
The Order:

i. approved the closing of transactions contemplated by the Agreement in
Connection with the Rehabilitation of FCL (the "Rehabilitation
Agreement") and Ancillary Documents (the "Ancillary Documents")
between the Conservator, on behalf of FCL, and Pacific Mutual.

ii. ratified the execution and delivery of the Rehabilitation Agreement
and the Ancillary Documents, as modified; and

iii. approved and adopted the Conservator's final rehabilitation plan as
reflected in the Order, as it incorporates the Motion of
Rehabilitation, the Rehabilitation Agreement and Ancillary Documents,
(collectively, the "Rehabilitation Plan" or "Plan").

Pursuant to the Rehabilitation Plan, Pacific Mutual will participate in
FCL's rehabilitation by:

a. causing a new insurance company called Pacific Corinthian Life
Insurance Company ("Pacific Corinthian"), to assume substantially all
of the assets and policyholder and contract holder liabilities of FCL;
capitalizing Pacific Corinthian with a minimum of $50 million cash,
with $45 million of that amount evidenced by a certificate of
contribution and the balance evidenced by common stock;

b. providing certain funding commitments to Pacific Corinthian during the
Rehabilitation Plan; and

c. managing the business operations and investments of Pacific
Corinthian.

This Exhibit describes how the FCL policy or contract will be restructured
(the "restructured contract or policy") through the Rehabilitation Plan. The
restructured policy or contract will have the same terms, conditions and
provisions of such policyholder's or contract holder's present policy or
contract, except as expressly modified by the Rehabilitation Agreement.

YOUR RIGHTS UNDER YOUR POLICY OR CONTRACT AND THE ENDORSEMENT SHALL BE
GOVERNED BY THE ORDER, THE REHABILITATION AGREEMENT, AND THE ANCILLARY DOCUMENTS
OR AS OTHERWISE ORDERED BY THE COURT WITH JURISDICTION OVER THE CONSERVATION AND
REHABILITATION OF FCL. NEITHER THE ENDORSEMENT NOR THIS EXHIBIT SEEK TO REPLACE
OR SUPERSEDE THE TERMS OF THE ORDER OR THE REHABILITATION PLAN.

B. THE PLAN PERIOD FOR THE REHABILITATION PLAN
The Plan Period for the Rehabilitation Plan commenced on the Closing of the
Rehabilitation Agreement (October 30, 1992) (the "Closing") and will terminate
on the earlier of (i) the last day of the calendar quarter in which the
Conservator approves the termination of the Rehabilitation Plan or (ii) the last
day of the calendar quarter ending immediately prior to the five-year
anniversary of the Closing Date (the "Plan Period").

C. CREDITING RATE
The current crediting rates on unloaned account values will remain in place
until the expiration of the interest guarantee period in effect immediately
prior to the Closing, as set forth in the original contract or policy. In the
case of Selector and Tempo contracts, the contractual interest guarantee period
shall be deemed to expire on December 31, 1992. After the expiration of the
interest guarantee period in effect immediately prior to the Closing, crediting
rates on unloaned account values for each subsequent one year interest guarantee
period shall be calculated according to the provisions set forth in the
Rehabilitation Agreement. Notwithstanding the foregoing, restructured contracts
or policies which remain in force over the Plan Period shall be guaranteed a

Page B-1
<PAGE>

minimum unloaned account value at the end of the Plan Period based on a minimum
cumulative crediting rate equivalent to four percent (4%) per annum compounded
annually over the Plan Period. For purposes of determining whether the actual
unloaned account value satisfies this minimum four percent (4%) accumulation
test, such actual unloaned account value shall include the First Credit, as
hereinafter defined and as defined in the Rehabilitation Agreement and is
subject to any adjustments pursuant to Section 15.1.4(c) and (d) and Section
20.3 of the Rehabilitation Agreement.

During the Plan Period, the Rehabilitation Agreement provides for a
crediting rate applicable to the unloaned portion of the account value that is
150 basis points (1.5%)1/ less than the earned rate on Pacific Corinthian's (or
FCL's, as appropriate) invested assets.2/ The earned rate is based on the actual
investment results of Pacific Corinthian's (or FCL's, as appropriate) asset
portfolio and will be impacted by any capital gain and loss amortization that
occurs during the period in which the rate is set.

The loaned portion of the account value relating to a restructured policy
(less an amount equal to the aggregate preferred loans outstanding) will be
credited with interest at the interest rate calculated from time to time
pursuant to the terms of the FCL policy that the restructured policy modifies.
The portion of the loaned account value equal to any outstanding preferred loans
will be credited with interest at a separate interest rate calculated from time
to time pursuant to the terms of the FCL policy that the restructured policy
modifies.

D. LOANS AND PARTIAL SURRENDERS DURING PLAN PERIOD
During the Plan Period, subject to the terms of the Rehabilitation
Agreement, restructured policies with a policy loan provision will be entitled
to make one new policy loan each policy year in an amount not to exceed ten
percent (10%) of the net loan value of such restructured policy, provided the
policy loans do not exceed, in the aggregate, the maximum amount of policy loans
permitted by the FCL policy which such restructured policy modifies. Interest
due on all policy loans outstanding under the restructures policy shall be due
in arrears, and therefore shall be added to the outstanding loan balance at the
end of the policy year, to the extent that it remains unpaid at such time.

Similarly, subject to limitations set forth in the Rehabilitation
Agreement, during the Plan Period each life insurance policyholder or annuity
contract holder will have the right to effect a single partial surrender during
each policy year in an amount not to exceed ten percent (10%) of the excess of
the net cash value over the separate account cash value of his or her
restructured contract or policy; provided, however, that a contract holder or
policyholder shall not be permitted to effect partial surrenders which, in the
aggregate, exceed the maximum partial surrenders permitted under the FCL
contract or policy which the restructured contract or policy modifies.

No holder of a restructured policy or contract will be permitted to effect
both a loan and a partial surrender in any given policy or contract year during
the Plan Period.

E. ANNUITY PAYMENT OPTION, MATURITY DATE AND ANNUITY QUALIFICATION
PROVISIONS
During the Plan Period, each contract holder or policyholder will be
entitled to exercise any annuitization option provided for in the restructured
FCL annuity contract or life policy that the restructured contract or policy
modifies; provided, however, that the option is other than to pay out a death
benefit due under the contract, the annuity payments must be made over a period
of no less than seven years.

The Rehabilitation Agreement also provides contract holders with two
options for restructured annuity contracts maturing between the date the
conservation of FCL was instituted and the end of the Plan period: a) an option
to extend the maturity date of the annuity contract to the last day of the Plan
Period; or b) an option to elect a contractual annuitization plan, provided that
annuity payments are to be made over a period of no less than seven years. In
the absence of an express election or other indication to the contrary, the
contract holder is deemed to elect the option (a) above.

The separate account portion of a variable annuity may be annuitized
pursuant to the terms of the annuity contract.

1/ For Capital Horizons policies, this number is 225 basis points (2.25%).
2/ A full explanation of the calculation of crediting rates during the Plan
Period is contained in Sections 1.113 and 4.2 of the Rehabilitation
Agreement.

Page B-2
<PAGE>

Any restructured annuity contract to which this Endorsement is attached is
intended to qualify as an annuity contract for Federal tax purposes. To that
end, the provisions of this annuity contract (including the Endorsement and any
other rider or endorsement), particularly any provisions requiring any
distribution(s) upon the death of any contract owner or holder, are to be
interpreted to ensure such tax qualification, notwithstanding any other
provision to the contrary.

F. TRANSFERS TO AND FROM SEPARATE ACCOUNTS
During the Plan Period, no variable annuity contract holder will be
permitted to transfer any portion of any account value from the general account
to the separate account or from the separate account to the general account.

G. DEATH BENEFIT PROVISIONS FOR LIFE POLICIES
During the Plan Period, subject to the terms of the Rehabilitation
Agreement, a policyholder will be permitted to reduce the specified or face
amount of a restructured life insurance policy from time to time during the Plan
Period in accordance with the terms of the such policy; provided, however, that
such reductions do not decrease the specified amount of such policy by more than
five percent (5%) each policy year during the Plan Period.

Any restructured life insurance policy to which this endorsement is
attached (the "Life Policy") is intended to qualify as a life insurance contract
for Federal tax purposes, and the death benefit under the Life Policy is
intended to qualify for the Federal income tax exclusion. To that end, the
provisions of the Life Policy (including the Endorsement and any other rider or
endorsement) are to be interpreted to ensure such tax qualification,
notwithstanding any other provision to the contrary. If at any time the
premiums paid under the Life Policy exceed the amount allowable for such tax
qualification, such excess amount shall be removed from the Life Policy as of
the date of its payment, together with interest thereon from such date, and any
appropriate adjustment in the death benefit shall be made as of such date. If
this excess amount (and interest) is not refunded within sixty (60) days after
the end of the applicable contract year, the death benefit under the Life Policy
shall be increased retroactively so that at no time is this death benefit ever
less than the amount needed to ensure such tax qualification. To the extent
that the death benefit as of any time is increased by the provisions of the
Rehabilitation Agreement, appropriate adjustments will be made in any cost of
insurance or supplemental benefits as of that time, retroactively or otherwise,
that are consistent with such an increase, and such adjustments may be made by
right of set-off against any death benefits payable.

H. LIMITATION ON BAIL OUT PROVISIONS
No contract holder or policyholder will have the right to exercise a
contractual "bail out" provision where the right to bail out has arisen between
the date of the Order and the Closing. A bail out provision means any provision
of a contract or policy which increases the net cash value of the contract or
policy solely because of a decrease in the rate of interest credited to the net
account value of such contract. A contract holder or policyholder will be
permitted to exercise a bail out provision on the date preceding an appropriate
subsequent contract or policy anniversary date if a new right to bail out arises
after the Closing, provided, however, that the exercise of such a bail out right
does not avoid the surrender proceeds adjustments described in the following
section. Notwithstanding the foregoing, in no event shall a contract holder or
a policyholder have greater rights to invoke a bail out provision than contained
in their contract or policy.

I. CASH SURRENDERS DURING THE PLAN PERIOD
Under the Rehabilitation Agreement, on the day immediately prior to each
anniversary date of each contract or policy, a contract holder or policyholder
will be entitled to surrender his or her restructured contract or policy in full
and receive a cash surrender payment.3/ The cash surrender payment shall be
subject to a Surrender Proceeds Adjustment (as described in the Rehabilitation
Agreement) and which may be summarized as follows: Surrender payments will be
ninety percent (90%) of the general account cash value if the surrender occurs
after the first day of the Plan Period but on or before the third anniversary of
the Closing of the Rehabilitation Agreement; ninety-three percent (93%) of the
general account cash value if the surrender occurs after the third anniversary
of the Closing, but on or before the fourth anniversary of the Closing; ninety-
six percent (96%) of the general account cash value if the surrender occurs
after the fourth anniversary of the Closing, but on or before the last day of
the Plan Period; and one hundred percent (100%) of the general account cash
value if the surrender occurs after the fifth anniversary of the Closing.

3/ For a Capital Dimensions contract, the date will be deemed to be the
anniversary date.

Page B-3
<PAGE>

In each case, the amount payable to the contract holder or policyholder is
further reduced by the aggregate amount of any outstanding policy loans, and
special deposit adjustments, if applicable. Regardless of when the surrender
occurs, variable annuity contract holders will receive one hundred percent
(100%) of their separate account cash values. In addition, policyholders shall
receive one hundred percent (100%) of all universal life premiums paid after the
Closing, except that no policyholder shall receive a return of more premium than
would be returnable pursuant to the terms of the FCL contract.

If the contract holder is the holder of a Single Premium Immediate Annuity
contract, then the above-specified percentages shall be multiplied by that
contract's statutory reserve to determine the surrender value.

If the restructured contract holder or policyholder has not received a ten
percent (10%) loan or partial surrender during the policy year in which the full
cash surrender request is made, the surrender payment will be calculated by
assuming that such a request was made contemporaneously with the cash surrender
request, thereby increasing the amount of the surrender payment. If the
restructured contract holder or policyholder has received a loan or partial
surrender during the policy year in which the full cash surrender request is
made, but that loan or partial surrender is less than ten percent (10%), a
request for the difference between ten percent (10%) and the amount requested
shall be assumed to have been made a part of a request for partial surrender
contemporaneously with the full cash surrender request, thereby increasing the
amount of the surrender payment. Nothing in this provision shall create a right
to request more than one loan or partial surrender in a particular policy year.

In the event a contract holder or policyholder resides in a state that has
not released its deposit of cash or securities held in connection with
maintaining FCL's insurance license in that state, the amount of the contract
holder's or policyholder's surrender payment will be reduced by the contract
holder's or policyholder's proportionate share of such deposit compared to the
aggregate cash values of all contract holders and policyholders residing in that
state.

The foregoing surrender payments will be mailed to the surrendering
contract holder or policyholder no more than ninety (90) days after the contract
anniversary date. If the aggregate surrender payments due exceed the amount of
short term investments held by FCL or Pacific Corinthian, as appropriate, then
payments will be made within one hundred eighty (180) days of the contract
anniversary date. If payment is not made by the 90/th/ or 180/th/ day as set
forth above, interest will accrue at the rate of four percent (4%) per annum.
Each policyholder or contract holder must allow five (5) days notice for
processing of surrenders.

J. ADDITIONAL CREDIT AT END OF PLAN PERIOD
At the end of the Plan Period, a credit statement will be prepared
regarding the financial position of Pacific Corinthian in accordance with the
statutory accounting principles prescribed or permitted by the California
Insurance Commissioner, and a nationally recognized independent accounting firm
will be retained to audit the credit statement and an independent actuarial firm
will be retained to review certain balances. Based on the credit statement,
contract holders or policyholders who have maintained their restructured
contracts or policies in force through the end of the Plan period may receive a
proportional share of two additional credits, calculated pursuant to formulae
contained in the Rehabilitation Agreement. The first credit (the "First
Credit") will be ninety percent (90%) of the capital and surplus of Pacific
Corinthian, with certain adjustments, including subtraction of unpaid interest
and principal on the Certificate of Contribution and addition of any Mandatory
Securities Valuation Reserves required, as provided for in the Rehabilitation
Agreement, ("Adjusted Surplus"), at the end of the Plan period, but not to
exceed the aggregate amount necessary to provide each contract or policy with a
Net Account Value (as defined and adjusted pursuant to the Rehabilitation
Agreement) that would have resulted if such contract or policy had been credited
with interest at a rate of six and one-half percent (6 1/2%) on a cumulative
basis, compounded annually during the Plan Period. To the extent that ninety
percent (90%) of Adjusted Surplus exceeds the First Credit, such excess will be
shared between policyholders, contract holders and creditors as follows:
policyholders and contract holders shall receive ten percent (10%) of such
excess (the "Second Credit") and the remaining ninety percent (90%) of such
excess shall be paid to FCL creditors.

Each policyholder or contract holder will be entitled to his or her
allocable percentage of the aggregate total of the First Credit, and if
applicable, the Second Credit. The Allocable Percentage means the fraction the
numerator of which equals the Credit Account Value of an individual contract or
policy and the denominator of which equals the aggregate Credit Account Values
of all eligible policies and contracts. The amount of the First and Second
Credits shall be limited to the amounts set forth above.

Page B-4
<PAGE>

Any such additional credits payable to policyholders and contract holders
will be added to the general account values of those restructured contracts and
policies that have such account values. For eligible restructured contracts
that have annuitized either prior to the Closing or as permitted by the
Rehabilitation Agreement, future annuity payments thereunder will be increased
in the same proportion as such restructured contract holder's credit bears to
the statutory reserves attributable to such contract holder's contract. Payment
will be mailed on the credit allocation date to those eligible contract holders
or policyholders who have surrendered their restructured contract or policies
after the last day of the Plan Period, but prior to calculation and distribution
of the credits.

The payment of any credits with respect to restructured contracts and
policies also is subject to reduction for certain FCL-related tax items, which
include additional tax liabilities that may be asserted for periods prior to the
Closing, as well as for additional taxes that may be asserted relating to the
computation of tax reserves and a tax on deferred acquisition costs. If certain
company tax benefits are realized, they will be distributed annually with
respect to restructured contracts that remain in force at such time for up to
five years after the end of the Plan Period.

K. CONTRACT HOLDER OR POLICYHOLDER HARDSHIPS
If a contract holder or policyholder suffers demonstrable financial
hardship during the Plan period, he or she may apply for an exemption from the
limitations on cash surrenders or withdrawals contained in the Rehabilitation
Agreement. In order to qualify for such an exemption, a contract holder or
policyholder will be required to document financial difficulty and one of the
following: 1) an inability to pay for food and shelter; 2) terminal illness,
permanent disability or substantial incurred medical expenses; 3) imminent
removal from a hospital, nursing home or other health care facility due to
failure to pay for such medical services or 4) such other emergencies of an
unusual nature as a hardship review committee determines in its discretion.
Hardship payments will be limited to the lesser of net cash value, net loan
value or $50,000, or such greater amount to which Pacific Mutual and the
Conservator may mutually agree. Reasonable procedural rules may be established
for evaluating requests for hardship relief. Any contract holder or
policyholder whose request for hardship relief is denied may apply to the Court
for consideration of whether the contract holder or policyholder satisfies the
hardship standards set forth in the Rehabilitation Agreement.

L. FUTURE CHANGES TO FCL RESTRUCTURED CONTRACTS
During the Plan Period, Pacific Corinthian may, subject to the prior
approval of the Conservator, modify certain provisions of the Rehabilitation
Agreement, or add one or more provisions to the Rehabilitation Agreement, if any
such modifications or additions are more beneficial or favorable to
policyholders or contract holders. Any such modifications or additions would be
applicable to all policyholders and contract holders.

M. MANAGEMENT OF FCL DURING THE PLAN PERIOD
I. LIQUIDATION OF FCL AND CREATION OF PACIFIC CORINTHIAN. The
closing of the Assumption and Reinsurance Agreement, which is anticipated to
occur on or before December 31, 1992, will result in all FCL restructured
contracts and policies becoming Pacific Corinthian contracts and policies. FCL
will ultimately be liquidated. At the end of the Plan period, Pacific
Corinthian will be merged into Pacific Mutual.

II. MANAGEMENT OF PACIFIC CORINTHIAN DURING THE PLAN PERIOD. The
Rehabilitation Agreement states that Pacific Mutual will provide management by
selecting the Directors and Officers of Pacific Corinthian. Any nomination to
Chief Executive Officer, President, Chief Operating Officer, Chief Investment
Officer, Chief Financial Officer, Treasurer, Chief Actuary, or General Counsel
during the Plan Period is also subject to the approval of the Conservator.
Under the Rehabilitation Agreement and a Management Agreement, which is one of
the Ancillary Documents, Pacific Mutual shall cause Pacific Corinthian to
appoint Pacific Mutual or an affiliate of Pacific Mutual to manage and direct
Pacific Corinthian with respect to, among other things, investment strategy and
liquidity. During the Plan Period, Pacific Corinthian may also retain one or
more third party providers (including Pacific Mutual or its affiliates) to
provide management services to Pacific Corinthian. However, except as to
investment advisory services, Pacific Corinthian shall retain such providers
only is such services are of higher quality or are comparable services at a
lower cost than are already available through Pacific Corinthian.

Page B-5
<PAGE>

N. NO NEW BUSINESS DURING THE PLAN PERIOD
During the Plan Period, Pacific Corinthian will not underwrite any new
insurance business unless approved by the Insurance Commissioner and any other
appropriate regulatory authorities.

O. RELEASES
The Conservator and Pacific Mutual will execute mutual releases effective
at the Closing releasing each other from all claims up to the date of the
commencement of the Plan Period. The Conservator and FCL will also release
Pacific Mutual, its affiliates, officers, directors, shareholders, employees,
and mutual policyholders from future claims that may arise out of Pacific
Mutual's management of Pacific Corinthian, except as to claims that may arise
out of the management of Pacific Corinthian, Pacific Mutual and/or its
affiliates, and their officers and directors during the Plan period as a result
of gross negligence, willful misconduct or bad faith by Pacific Mutual or any of
its affiliates in providing management services. As part of the accommodation
reached between the Conservator and First Capital Holdings Corp., a Chapter 11
Debtor in Possession ("FCH") and the Creditors Committee, the Conservator has
released on behalf of FCL all claims against FCH and First Capital Life
Insurance Group, Inc. in exchange for their withdrawal of any objections to the
Rehabilitation Plan.

P. SET OFF RIGHTS
Under the Rehabilitation Agreement, Pacific Corinthian will have certain
set off rights against amounts that would otherwise be credited to FCL
restructured contract holders or policyholders. The effect of this set off
would be to reduce the interest rate credited to FCL restructured contracts and
policies, provided, however, that the set off amounts cannot cause the
cumulative interest rate credited to the unloaned account values of restructured
contracts and policies at the end of the Plan Period to be less than four
percent (4%) compounded annually. Pacific Corinthian may assert its set off
rights for (i) claims or losses arising from the untruth, inaccuracy or breach
of any representation, warranty, covenant or agreement made by FCL or the
Conservator pursuant to the Rehabilitation Agreement; (ii) claims asserted by
state guaranty funds or by policyholders or contract holders by or through any
guaranty funds; and (iii) any third-party claim or loss arising from services
provided by Pacific Mutual or its affiliates in connection with the performance
by Pacific Mutual or its affiliates of their obligations under the
Rehabilitation Agreement, including without limitation the management of Pacific
Corinthian by Pacific Mutual during the Plan Period, unless such claim or loss
is finally determined to have arisen from the gross negligence, willful
misconduct or bad faith of Pacific Mutual or its affiliates. Pacific
Corinthian's set off rights arise only for matters set forth in (i) and (ii)
when the aggregate amount of the claims in (i) and (ii) above exceeds $500,000.
As indicated above, Pacific Corinthian also has set off rights against contract
holder and policyholder credits at the end of the Plan Period for certain FCL-
related tax items.

Q. GOVERNING LAW
The Rehabilitation Agreement will be governed and construed in accordance
with California law without giving effect to California conflict of law
principles.

R. RETENTION OF JURISDICTION BY THE COURT
The Court has retained continuing jurisdiction over all of FCL's, and
ultimately Pacific Corinthian's assets, books, records, and property, real and
personal, ("FCL's property") for purposes of ensuring compliance with the
provisions of the Rehabilitation Plan. The Court also has retained sole and
exclusive jurisdiction over any claims or rights asserted by any third party to
the Rehabilitation Agreement or the Ancillary Documents during the Plan Period
and may not be submitted to any other court or tribunal without the Court's
prior approval. The Conservator may seek an order from the Court, however, that
the requirements of California Insurance Code Section 1037 for court approval of
specific transactions relating to FCL property will not apply during the Plan
Period.

Page B-6
<PAGE>

SEEK INDEPENDENT ADVICE
YOU ARE ADVISED TO SEEK INDEPENDENT LEGAL, TAX AND INSURANCE COUNSELING AND
GUIDANCE AS TO THE REHABILITATION PLAN AND HOW IT WILL AFFECT YOUR INDIVIDUAL
SITUATION.

THIS EXHIBIT AND THE ENDORSEMENT CONTAIN MATERIALS CONCERNING THE
ASSUMPTION OF THIS POLICY OR CONTRACT BY PACIFIC CORINTHIAN LIFE INSURANCE
COMPANY AS OF DECEMBER 31, 1992. UNTIL THIS ASSUMPTION IS CONSUMMATED, PACIFIC
CORINTHIAN WILL NOT ASSUME THIS POLICY OR CONTRACT. ACCORDINGLY, PERFORMANCE BY
PACIFIC CORINTHIAN IN ASSUMING THIS FIRST CAPITAL LIFE POLICY OR CONTRACT WILL
BE SUBJECT TO THE CLOSING OF THE ASSUMPTION REINSURANCE TRANSACTION.

Page B-7

<PAGE>

EXHIBIT 99.6(a)

Pacific Life's Articles of Incorporation

<PAGE>

AMENDED AND RESTATED

ARTICLES OF INCORPORATION

PACIFIC LIFE INSURANCE COMPANY

Thomas C. Sutton and Audrey L. Milfs certify that:

1. They are the Chief Executive Officer and Secretary, respectively, of
Pacific Mutual Life Insurance Company (the "Company"), a mutual life insurance
company organized under the laws of the State of California.

2. The Articles of Incorporation of this Corporation are amended and restated
to read as follows:

AMENDED AND
RESTATED ARTICLES OF INCORPORATION

PACIFIC LIFE INSURANCE COMPANY

The name of the Corporation is PACIFIC LIFE INSURANCE COMPANY.

II.

The purpose of the Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of California other than the banking business, the trust company business or
the practice of a profession permitted to be incorporated by the California
Corporations Code. The business of the Corporation is to be an insurer, subject
to the provisions of the California Insurance Code. This insurer is organized
to transact life and disability insurance as specifically authorized by its
California Certificate of Authority.

1
<PAGE>

III.

The Corporation is authorized to issue six hundred thousand shares of
Common Stock with a par value of fifty dollars ($50.00) per share, having an
aggregate par value of thirty million dollars ($30,000,000). Common Stock shall
only be issued to Pacific LifeCorp.

IV.
(a) The liability of the directors of the Corporation for monetary
damages shall be eliminated to the fullest extent permissible under California
law.

(b) The Corporation is authorized to provide indemnification of
agents (as defined in Section 317 of the California Corporations Code) for
breach of duty to the Corporation and its shareholders through Bylaw provisions,
agreements with agents, vote of shareholders or disinterested directors, or
otherwise, in excess of the indemnification otherwise permitted by Section 317
of the California Corporations Code, provided that any such excess
indemnification involving a breach of duty to the Corporation and its
shareholders shall be subject to the limits on such excess indemnification set
forth in Section 204 of the Corporations Code and shall be paid only from
realized or realizable earned surplus as specified in Section 10530 of the
California Insurance Code.

The number of directors of this Corporation shall be not less than 9
or greater than 17. The exact number of directors shall be fixed within these
specified limits by the Board of Directors or the shareholders in the manner
provided in the Bylaws.

VI.

Any action which may be taken at a meeting of the shareholders,
may be taken without a meeting if authorized by a writing signed by all of the
holders of shares who would be entitled to vote at a meeting for such purpose,
and filed with the secretary of the Corporation.

3. The foregoing Amendment and Restatement of Articles of Incorporation has
been duly approved by the Board of Directors.

4. The foregoing amendment and restatement of Articles of Incorporation has
been duly approved by the required vote of members.

2
<PAGE>

We further declare under penalty of perjury under the laws of the State of
California that the matters set forth in this Certificate are true and correct
of our own knowledge.

IN WITNESS WHEREOF, each of the undersigned, being the duly authorized
Chief Executive Officer and the Secretary of the Company, for the purpose of
amending the Articles of Incorporation of the Corporation pursuant to Section
11542 of the California Insurance Code, declares under penalty of perjury that
the statements contained in the foregoing Certificate are true of his or her own
knowledge, and makes and files this Certificate, and accordingly has set his or
her hand, this 27th day of August, 1997. Executed at Newport Beach, California.

/s/ TC SUTTON
-------------------------------------------------
Thomas C. Sutton
Chief Executive Officer

/s/ AUDREY L. MILFS
-------------------------------------------------
Audrey L. Milfs
Secretary

<PAGE>

EXHIBIT 99.6(b)

BYLAWS OF
PACIFIC LIFE INSURANCE COMPANY
AS ADOPTED ON AUGUST 27, 1997
(EFFECTIVE SEPTEMBER 1, 1997)
<PAGE>

TABLE OF CONTENTS
<TABLE>
<CAPTION>

Page
<C> <S> <C>
Article I. OFFICES............................... 1
SECTION 1. Principal Executive Office............ 1
SECTION 2. Other Offices......................... 1

Article II. MEETINGS OF SHAREHOLDERS.............. 1
SECTION 1. Place of Meetings..................... 1
SECTION 2. Annual Meetings....................... 1
SECTION 3. Notice of Meetings.................... 1
SECTION 4. Special Meetings...................... 2
SECTION 5. Adjourned Meetings and Notice Thereof. 2
SECTION 6. Consent to Shareholders' Meetings..... 2
SECTION 7. Voting Rights; Cumulative Voting...... 2
SECTION 8. Quorum................................ 2
SECTION 9. Proxies............................... 2
SECTION 10. Conduct of Meeting.................... 3

Article III. BOARD OF DIRECTORS.................... 3
SECTION 1. Powers................................ 3
SECTION 2. Number of Directors................... 4
SECTION 3. Term of Office and Election........... 4
SECTION 4. Resignation........................... 4
SECTION 5. Vacancies............................. 4
SECTION 6. Place of Meetings..................... 4
SECTION 7. Regular Annual Meetings............... 5
SECTION 8. Other Regular Meetings................ 5
SECTION 9. Special Meetings...................... 5
SECTION 10. Adjournment........................... 5
SECTION 11. Entry of Notice....................... 5
SECTION 12. Waiver of Notice...................... 6
SECTION 13. Quorum................................ 6
SECTION 14. Action by Telephonic Communications... 6
SECTION 15. Action Without a Meeting.............. 6
SECTION 16. Fees and Compensation................. 6

Article IV. OFFICERS.............................. 7
SECTION 1. Number and Qualifications............. 7
SECTION 2. Election, Term of Office.............. 7
SECTION 3. Other Officers, etc................... 7
SECTION 4. Removal............................... 7
SECTION 5. Resignation........................... 7
SECTION 6. Vacancies............................. 7
SECTION 7. Chairman of the Board................. 7
SECTION 8. President............................. 8
SECTION 9. Vice Presidents....................... 8
</TABLE>
i

<PAGE>

<TABLE>
<C> <S> <C>
SECTION 10. Secretary............................. 8
SECTION 11. Treasurer............................. 8

Article V. INSURANCE POLICIES, CONTRACTS, CHECKS,
DRAFTS,BANK ACCOUNTS, ETC......... 8
SECTION 1. Insurance Policies, How Signed........ 8
SECTION 2. Checks, Drafts, etc................... 8
SECTION 3. Contracts, etc., How Executed......... 8
SECTION 4. Bank Accounts......................... 9

Article VI. INVESTMENTS........................... 9
SECTION 1. Investments in the Corporation's Name. 9

Article VII. CERTIFICATES AND TRANSFER OF SHARES... 9
SECTION 1. Certificates for Shares............... 9
SECTION 2. Transfer on the Books................. 9
SECTION 3. Lost or Destroyed Certificates........ 9
SECTION 4. Transfer Agents and Registrars........ 10
SECTION 5. Closing Stock Transfer Books.......... 10

Article VIII. CORPORATE RECORDS, REPRESENTATION OF
SHARES OF OTHER CORPORATIONS...... 10
SECTION 1. Inspection of Bylaws.................. 10
SECTION 2. Inspection of Corporate Records....... 10
SECTION 3. Annual Reports........................ 10
SECTION 4. Representation of Shares of
Other Corporations................ 10

Article IX. AMENDMENTS............................ 11
SECTION 1. Amendment of Bylaws................... 11

Article X. INDEMNIFICATION....................... 11
SECTION 1. Liability of Directors................ 11
SECTION 2. Indemnification of Agents............. 11

</TABLE>

ii
<PAGE>

BYLAWS

FOR THE REGULATION, EXCEPT AS
OTHERWISE PROVIDED BY STATUTE
OR ITS ARTICLES OF INCORPORATION,

PACIFIC LIFE INSURANCE COMPANY

Article I.

OFFICES
-------

SECTION 1. Principal Executive Office. The principal executive office for
--------------------------
the transaction of business of the corporation is hereby fixed and located at
700 Newport Center Drive, City of Newport Beach, County of Orange, State of
California.

SECTION 2. Other Offices. Branch or subordinate offices may at any time
-------------
be established by the board of directors at any place or places where the
corporation is qualified to do business.

Article II.

MEETINGS OF SHAREHOLDERS
------------------------

SECTION 1. Place of Meetings. All meetings of shareholders shall be held
-----------------
at either the principal executive office of the corporation or any other place
within the State of California designated by the board of directors pursuant to
authority hereinafter granted to said board.

SECTION 2. Annual Meetings. The annual meetings of shareholders shall be
---------------
held at such date and time as designated by the board of directors.

SECTION 3. Notice of Meetings. Notice of all meetings of shareholders,
------------------
whether annual or special, shall be given in writing to the shareholders
entitled to vote. The notice shall be given by the secretary, assistant
secretary, or other persons charged with that duty. If there is no such
officer, or if he or she neglects or refuses this duty, notice may be given by
any director. Notice of any meeting of shareholders shall be given to each
shareholder entitled to notice not less than ten (10) nor more than sixty (60)
days before a meeting. Notice of any meeting of shareholders shall specify the
place, the day, and the hour of the meeting and the general nature of the
business to be transacted. A notice may be given to a shareholder either
personally, or by mail, or other means of written communication, charges
prepaid, addressed to the shareholder at his or her address appearing on the
books of the corporation or given by the shareholder to the corporation for the
purpose of notice.

SECTION 4. Special Meetings. Special meetings of shareholders, for any
----------------
purpose or purposes whatsoever, may be called at any time by the chief executive
officer or by the board of directors or by

1
<PAGE>

shareholders holding ten percent (10%) or more of the voting power of the
corporation. [Cal. Corp. Code (S)(S) 600, 601]/1/

SECTION 5. Adjourned Meetings and Notice Thereof. Any shareholders'
-------------------------------------
meeting, annual or special, whether or not a quorum is present, may be adjourned
from time to time by the vote of a majority of the shareholders who are either
present in person or represented by proxy thereat, but in the absence of a
quorum no other business may be transacted at any such meeting.

When any shareholders' meeting, either annual or special, is adjourned for
forty-five (45) days or more, notice of the adjourned meeting shall be given as
in the case of an original meeting. Save as aforesaid, it shall not be
necessary to give any notice of the time and place of the adjourned meeting or
of the business to be transacted at an adjourned meeting, other than by
announcement at the meeting at which such adjournment is taken.

SECTION 6. Consent to Shareholders' Meetings. The transactions of any
---------------------------------
meeting of shareholders, however called and noticed, shall be valid as though
had at a meeting duly held after regular call and notice if a quorum be present
either in person or by proxy, and if, either before or after the meeting, each
of the shareholders entitled to vote, not present in person or by proxy, sign a
written waiver of notice, or a consent to the holding of such a meeting, or an
approval of the minutes thereof. All such waivers, consents or approvals shall
be filed with the corporation records or made a part of the minutes of the
meeting.

Any action which may be taken at a meeting of the shareholders, may be
taken without a meeting if authorized by a writing signed by all of the holders
of shares who would be entitled to vote at a meeting for such purpose, and filed
with the secretary of the corporation.

SECTION 7. Voting Rights; Cumulative Voting. Only persons in whose names
--------------------------------
shares entitled to vote stand on the stock records of the corporation on the day
of any meeting of shareholders, unless some other day be fixed by the board of
directors for the determination of shareholders of record, then on such other
day, shall be entitled to vote at such meeting.

Every shareholder entitled to vote shall be entitled to one vote for each
of said shares and in any election of directors he or she shall have the right
to cumulate his or her votes as provided in Section 708, of the Corporations
Code of California.

SECTION 8. Quorum. The presence in person or by proxy of the holders of a
------
majority of the shares entitled to vote at any meeting shall constitute a quorum
for the transaction of business.

SECTION 9. Proxies. Every shareholder entitled to vote or execute consents
-------
shall have the right to do so either in person or by an agent or agents
authorized by a written proxy executed by such shareholder or his or her duly
authorized agent and filed with the secretary of the corporation; provided that
no such proxy shall be valid after the expiration of eleven (11) months from the
date of its execution unless the shareholder executing it specifies therein the
length of time for which such proxy is to continue in force. Any proxy duly
executed is not revoked, and continues in full force and effect, until an
instrument revoking it, or a duly executed proxy bearing a later date, is filed
with the secretary.

_______________
/1/ Citations are inserted for reference only, and do not constitute a part of
the Bylaws.

2
<PAGE>

SECTION 10. Conduct of Meeting. The chairman of the board shall preside
------------------
as chairman at all meetings of the shareholders. The chairman shall conduct
each such meeting in a businesslike and fair manner, but shall not be obligated
to follow any technical, formal or parliamentary rules or principles of
procedure. The chairman's rulings on procedural maters shall be conclusive and
binding on all shareholders unless at the time of a ruling a request for a vote
is made to the shareholders entitled to vote and which are represented in person
or by proxy at the meeting, in which case the decision of a majority of such
shareholders shall be conclusive and binding. Without limiting the generality
of the foregoing, the chairman shall have all the powers usually vested in the
chairman of a meeting of shareholders.

Article III.

BOARD OF DIRECTORS
------------------

SECTION 1. Powers. Subject to limitations of the articles of
------
incorporation and of these bylaws, and of any statutory provisions as to action
to be authorized or approved by the shareholders, all corporate powers shall be
exercised by or under the authority of, and the business and affairs of the
corporation shall be controlled by or under the direction of, the board of
directors. [Corp. Code (S) 300] Without prejudice to such general powers, but
subject to the same limitations, it is hereby expressly declared that the
directors shall have the following powers, to-wit:

First. Corporate Business. To delegate the management of the day-to-day
----- ------------------
operation of the business and affairs of the corporation to persons,
provided that the business and affairs of the corporation shall be managed
and all corporate powers shall be exercised under the ultimate direction of
the board of directors.

Second. Select and Remove Officers, Agents and Employees. To select and
------ ------------------------------------------------
remove all officers, agents and employees of the corporation, prescribe the
powers and duties for them as may not be inconsistent with law, the
articles of incorporation or these bylaws, fix their compensation and
require from them security for faithful service.

Third. Appoint Committees. To appoint, by resolution adopted by a
----- ------------------
majority of the authorized number of directors, one or more committees, each
consisting of two or more directors, and to fix, by resolution or
resolutions, the quorum for the transaction of business of committees, other
than the executive committee, which may be less than a majority, but not
less than one-third of the authorized number of committee members. Any such
committee, to the extent provided in the resolution of the board, shall have
all the authority of the board, except with respect to:

(a) The approval of any action for which shareholders' approval or
approval of the outstanding shares is required by law.

(b) The filing of vacancies on the board or in any committee.

(d) The amendment or repeal of bylaws or the adoption of new bylaws.

3
<PAGE>

(e) The amendment or repeal of any resolution of the board which by its
express terms is not so amendable or repealable.

(f) A dividend or other distribution to shareholders of the corporation,
except at a rate, in a periodic amount or within a price range set forth in
the articles or determined by the board.

(g) The appointment of other committees of the board or the members
thereof.

Fourth. Incur Indebtedness. To borrow money and incur indebtedness for
------ ------------------
the purposes of the corporation and to cause to be executed and delivered
therefor, in the corporate name, promissory notes, bonds, debentures, deeds
of trust, pledges, hypothecations, or other evidences of debt and
securities therefor.

SECTION 2. Number of Directors. The number of directors of the
-------------------
corporation shall be fixed from time to time exclusively pursuant to a
resolution adopted by a majority of the board, but shall consist of not less
than nine (9) nor more than seventeen (17) directors.

SECTION 3. Term of Office and Election. At each annual meeting of
---------------------------
shareholders, directors shall be elected to hold office until the next annual
meeting. All directors shall hold office for the term for which they are
elected and until their respective successors are elected and qualified, except
that each director who attains retirement age, as determined by the board of
directors, during the term for which elected shall hold office only until the
next annual meeting of shareholders following attainment of retirement age at
which time a person may be elected as director to complete the unexpired term of
office, if any, for which the director attaining retirement age had been
elected.

SECTION 4. Resignation. Any director may resign at any time by giving
-----------
written notice to the board of directors or to the chairman of the board, the
president or the secretary of the corporation. Any such resignation shall take
effect at the date of receipt of such notice or at any later time specified
therein; and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.

SECTION 5. Vacancies. If any vacancies occur in the board of directors by
---------
reason of death, resignation, removal or otherwise, or if the authorized number
of directors shall be increased, the directors then in office shall continue to
act, and such vacancies and newly created directorships may be filled by a
majority of the directors then in office, although less than a quorum. A
director elected to fill a vacancy or a newly created directorship shall hold
office until his or her successor has been elected and qualified or until his or
her earlier death, resignation or removal. The shareholders may elect a
director at any time to fill any vacancy not filled by the directors. [Cal.
Corp. Code (S) 305]

SECTION 6. Place of Meetings. Regular meetings of the board of directors
-----------------
shall be held at any place within or without the State of California which has
been designated from time to time by resolution of the board of directors. In
the absence of such designation, regular meetings, other than the annual
meeting, shall be held at the principal executive office of the corporation,
unless not less than ten (10) days prior to said meeting a written notice
designating another location is mailed to each director at the address as shown
upon the records of the corporation. Special meetings of the board may be held
either at a place so designated or at the principal executive office of the
corporation.

4
<PAGE>

SECTION 7. Regular Annual Meetings. Unless otherwise provided by
-----------------------
resolution of the board of directors, immediately following each annual meeting
of shareholders, the board of directors shall hold a regular annual meeting for
the purpose of organization, election of officers, and the transaction of other
business. The regular annual meeting shall be held at the principal executive
office of the corporation or at such other place as designated by resolution of
the board. Notice of such meeting is hereby dispensed with.

SECTION 8. Other Regular Meetings. Other regular meetings of the board of
----------------------
directors shall be held without call, on such dates and at such times as may be
fixed by the board. Call and notice of all regular meetings of the board of
directors are hereby dispensed with.

SECTION 9. Special Meetings. Special meetings of the board of directors
----------------
for any purpose or purposes shall be called at any time by the chief executive
officer or, if he or she is absent or unable or refuses to act, by any three (3)
directors.

Special meetings of the board shall be held upon six days' notice by mail
or forty-eight (48) hours' notice delivered personally or by telephone,
including a voice messaging system or other system or technology designed to
record and communicate messages, telegraph, facsimile, electronic mail or other
electronic means. Any such notice shall be addressed or delivered to each
director at such director's address as it is shown upon the records of the
corporation or as may have been given to the corporation by the director for
purposes of notice or, if such address is not shown on such records or is not
readily ascertainable, at the place in which the meetings of the directors are
regularly held. [Cal. Corp. Code (S) 307]

Notice by mail shall be deemed to have been given at the time a written
notice is deposited in the United States mail, postage prepaid. Any other
written notice shall be deemed to have been given at the time it is personally
delivered to the recipient or is delivered to a common carrier for transmission,
or actually transmitted by the person given the notice by electronic means, to
the recipient. Oral notice shall be deemed to have been given at the time it is
communicated, in person or by telephone or wireless, to the recipient or to a
person at the office of the recipient who the person given the notice has reason
to believe will promptly communicate it to the recipient. [Cal. Corp. Code (S)
307]

SECTION 10. Adjournment. A majority of the directors present, whether or
-----------
not a quorum is present, may adjourn any directors meeting to another time and
place. Notice of the time and place of holding an adjourned meeting need not be
given to absent directors if the time and place be fixed at the meeting
adjourned, except as provided in the next sentence. If the meeting is adjourned
for more than twenty-four (24) hours, notice of any adjournment to another time
or place shall be given prior to the time of the adjourned meeting to the
directors who were not present at the time of the adjournment.

SECTION 11. Entry of Notice. Whenever any director has been absent from
---------------
any special meeting of the board of directors, an entry in the minutes to the
effect that notice has been duly given shall be prima facie evidence that due
notice of such special meeting was given to such director as required by law and
these bylaws.

SECTION 12. Waiver of Notice. The transactions of any meeting of the
----------------
board of directors, however called and noticed or wherever held, shall be as
valid as though had at a meeting duly held after regular call and notice if a
quorum be present and if, either before or after the meeting, each of the
directors not present signs a written waiver of notice of or consent to holding
such meeting or an approval of the

5
<PAGE>

minutes thereof. All such waivers, consents or approvals shall be filed with the
corporate records or made a part of the minutes of the meeting.

SECTION 13. Quorum. A majority of the total number of directors then in
------
office constitutes a quorum of the board for the transaction of business, except
to adjourn, as provided in Section 10 of this Article III. Every act or
decision done or made by a majority of the directors present at a meeting duly
held at which a quorum is present shall be regarded as an act of the board,
unless a greater number be required by law or by the articles of incorporation.
A meeting at which a quorum is initially present may continue to transact
business notwithstanding the withdrawal of directors, if any action taken is
approved by at least a majority of the required quorum for such meeting.

SECTION 14. Action by Telephonic Communications. Members of the board may
-----------------------------------
participate in a meeting through use of conference telephone or similar
communications equipment, and participation in a meeting pursuant to this
provision shall constitute presence in person at such meeting if all of the
following apply:

(a) Each member participating in the meeting can communicate with all of
the other members concurrently.

(b) Each member is provided the means of participating in all matters
before the board, including the capacity to propose, or to interpose an
objection, to a specific action to be taken by the corporation.

(i) A person communicating by telephone, electronic video screen, or
other communications equipment is a director entitled to participate
in the board meeting; and

(ii) All statements, questions, actions, or votes were made by
that director and not by another person not permitted to participate
as a director.

SECTION 15. Action Without a Meeting. Any action required or permitted to
------------------------
be taken by the board may be taken without a meeting, if all members of the
board shall individually or collectively consent in writing to that action.
Such consent or consents shall have the same effect as a unanimous vote of the
board and shall be filed with the minutes of the proceedings of the board.

SECTION 16. Fees and Compensation. Directors and members of committees
---------------------
may receive such compensation, if any, for their services, and such
reimbursement for expenses, as may be fixed or determined by the board.
Directors who are salaried officers of the corporation shall not receive
additional fees or compensation for their services as directors. Nothing herein
contained shall be construed to preclude any director from serving the
corporation in any other capacity as an officer, agent, employee, or otherwise,
and receiving compensation therefor.

6
<PAGE>

Article IV.

OFFICERS
--------

SECTION 1. Number and Qualifications. The officers of the corporation
-------------------------
shall be a chairman of the board, a president, a secretary, a treasurer, and
such other officers as may be appointed in accordance with the provisions of
Section 3 of this Article IV. One person may hold one or more offices and
perform the duties thereof. The president or chairman of the board shall be
designated by the board as the chief executive officer of the corporation, and
one officer shall be designated by the board as the chief financial officer of
the corporation. [Cal. Corp. Code (S) 312(a)]

SECTION 2. Election, Term of Office. Each officer, except such officers
------------------------
as may be appointed in accordance with the provisions of Section 3 of this
Article IV, shall be chosen annually by and serve at the pleasure of the board
of directors and shall hold their respective office until their resignation,
removal or other disqualification from service or until their successor shall
have been duly chosen and qualified. [Cal. Corp. Code (S) 312(b)]

SECTION 3. Other Officers, etc. The board of directors may elect, and may
-------------------
empower the chief executive officer to appoint, such other officers as the
business of the corporation may require, each of whom shall hold office for such
period, have such authority and perform such duties as are provided in these
bylaws or as the board may from time to time determine. [Cal. Corp. Code (S)
312(b)]

SECTION 4. Removal. Any officer chosen under Section 2 of this Article IV
-------
may be removed, either with or without cause, by a majority vote of the
directors present at any regular meeting of the board of directors. Any
officer, except an officer chosen by the board of directors pursuant to Section
2 of this Article IV, may also be removed at any time, with or without cause, by
the chief executive officer, if such powers of removal have been conferred by
the board of directors.

SECTION 5. Resignation. Any officer may resign at any time by giving
-----------
written notice to the board of directors or to the chairman of the board or to
the secretary of the corporation. Any such resignation shall take effect at the
date of receipt of such notice or at any later time specified therein; and,
unless otherwise specified therein, the acceptance of such resignation shall not
be necessary to make it effective.

SECTION 6. Vacancies. A vacancy in any office because of death,
---------
resignation, removal, disqualification or any other cause shall be filled in the
manner prescribed in these bylaws for regular election or appointment to such
office.

SECTION 7. Chairman of the Board. The chairman of the board shall, if
---------------------
present, preside at all meetings of the board and exercise and perform such
other powers and duties as may be from time to time assigned by the board.

SECTION 8. President. The president shall have such powers and duties as
---------
may be prescribed from time to time by the board of directors, the chairman of
the board, or elsewhere in these bylaws. In the absence or disability of the
chairman of the board, he or she shall exercise the powers and perform the
duties of the chairman of the board.

7
<PAGE>

SECTION 9. Vice Presidents. Vice presidents shall have such powers and
---------------
perform such duties as may be prescribed from time to time by the chief
executive officer, the board of directors, or elsewhere in these bylaws.

SECTION 10. Secretary. The secretary shall keep, or cause to be kept, a
---------
book of minutes at the principal executive office, or such other place as the
board of directors may order, of all meetings of the directors, committees and
shareholders with the time and place of holding, whether regular or special, and
if special, how authorized, the notice thereof given, the names of those present
at directors' and committee meetings, the number of shareholders present or
represented at shareholders' meetings and the proceedings thereof.

The secretary shall give, or cause to be given, notice of all meetings of
the shareholders and of the board and any committees thereof required by these
bylaws or by law to be given, shall keep the seal of the corporation in safe
custody, and shall have such other powers and perform such other duties as may
be prescribed by the board.

SECTION 11. Treasurer. The treasurer shall have custody of all the funds,
---------
securities and other valuables of the corporation which may have or shall come
into his or her hands. He or she shall have such powers and perform such duties
as may be prescribed by the chief executive officer, the board of directors or
elsewhere in these bylaws.

Article V.

INSURANCE POLICIES, CONTRACTS, CHECKS,
DRAFTS, BANK ACCOUNTS, ETC.
---------------------------

SECTION 1. Insurance Policies, How Signed. All policies issued by this
------------------------------
corporation shall be signed by the chairman or president and countersigned by
the secretary, both either personally or by facsimile.

SECTION 2. Checks, Drafts, etc. All checks, drafts or other orders for
-------------------
payment of money, notes or other evidences of indebtedness, except as in these
bylaws otherwise provided, issued in the name of or payable to the corporation
shall be signed or endorsed by such person or persons and in such manner as from
time to time shall be determined by resolution of the board of directors or by
resolution of a committee thereof, if the board of directors delegate such
authority to it.

SECTION 3. Contracts, etc., How Executed. The board of directors, or a
-----------------------------
committee thereof if such authority is delegated to it by the board of
directors, except as by law or in these bylaws otherwise provided, may authorize
any officer or officers, agent or agents, to enter into any contract or execute
any instrument in the name of and on behalf of the corporation, and such
authority may be general or confined to special instances; and unless so
authorized, no officer, agent or employee shall have any power or authority to
bind the corporation by any contract or engagement or to pledge its credit to
render it liable for any purpose or to any amount.

SECTION 4. Bank Accounts. All funds of the corporation not otherwise
-------------
employed shall be deposited from time to time to the credit of the corporation,
and in its name, in such banks, trust companies, or other depositories as the
board of directors may select or as may be selected by any committee, officer or
officers, agent or agents of the corporation to whom such powers may from time
to time be delegated by the

8
<PAGE>

board of directors; and for the purpose of such deposits the chairman of the
board, the president, any vice president, the secretary, the treasurer, or any
other officer or agent or employee of the corporation to whom such power may be
delegated by the board of directors or by a committee thereof, if such authority
be delegated to it by the board of directors, may endorse, assign and deliver
checks, drafts and other orders for the payments of monies which are payable to
the order of the corporation.

Article VI.

INVESTMENTS
-----------

SECTION 1. Investments in the Corporation's Name. All investments of the
-------------------------------------
corporation shall be made in the name of Pacific Life Insurance Company or its
nominee.

Article VII.

CERTIFICATES AND TRANSFER OF SHARES
-----------------------------------

SECTION 1. Certificates for Shares. Certificates for shares shall be of
-----------------------
such form and device as the board of directors may designate and shall state the
name of the record holder of the shares represented thereby; its number; date of
issuance; the number of shares for which it is issued; the par value; a
statement of the rights, privileges, preferences and restrictions, if any; a
statement as to redemption or conversion, if any; a statement of liens or
restrictions upon transfer or voting, if any; if the shares be assessable, or,
if assessments are collectible by personal action, a plain statement of such
facts.

Every certificate for shares must be signed in the name of the corporation
by the chairman, and the secretary or an assistant secretary or must be
authenticated by facsimiles of the signatures of the chairman and secretary or
by a facsimile of the signature of its chairman and the written signature of its
secretary or an assistant secretary.

SECTION 2. Transfer on the Books. Upon surrender to the secretary or
---------------------
transfer agent of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.

SECTION 3. Lost or Destroyed Certificates. Any person claiming a
------------------------------
certificate of stock to be lost or destroyed shall make an affidavit or
affirmation of that fact and advertise the same in such a manner as the board of
directors may require, and shall, if the directors so require, give the
corporation a bond of indemnity, in form, in such amount and with one or more
sureties satisfactory to the board, whereupon a new certificate may be issued of
the same tenor and for the same number of shares as the one alleged to be lost
or destroyed.

SECTION 4. Transfer Agents and Registrars. The board of directors may
------------------------------
appoint one or more transfer agents or transfer clerks, and one or more
registrars, which shall be an incorporated bank or trust company -- either
domestic or foreign, who shall be appointed at such times and places as the
requirements of the corporation may necessitate and the board of directors may
designate.

9
<PAGE>

SECTION 5. Closing Stock Transfer Books. The board of directors may close
----------------------------
the transfer books in their discretion for a period not exceeding thirty (30)
days preceding any meeting, annual or special, of the shareholders, or the day
appointed for the payment of a dividend.

Article VIII.

CORPORATE RECORDS, REPRESENTATION OF
SHARES OF OTHER CORPORATIONS
----------------------------

SECTION 1. Inspection of Bylaws. The corporation shall keep in its
--------------------
principal executive office for the transaction of business the original or a
copy of these bylaws as amended or otherwise altered to date, certified by the
secretary, which shall be open to inspection by the shareholders at all
reasonable times during office hours.

SECTION 2. Inspection of Corporate Records. (a) The accounting books and
-------------------------------
records and minutes of proceedings of the shareholders and the board and
committees of the board of the corporation shall be open to inspection upon the
written demand on the corporation of any shareholder at any reasonable time
during usual business hours, for a purpose reasonably related to such
shareholder's interests. The right of inspection created by this subsection
shall extend to the records of each subsidiary of the corporation keeping any
such records in California or having its principal executive office in
California. [See Cal. Corp. Code (S) 1601]
---

(b) Such inspection may be made in person or by agent or attorney, and the
right of inspection includes the right to copy and make extracts. [See Cal.
---
Corp. Code (S) 1601]

(c) Demand of inspection shall be made in writing upon the chief executive
officer, secretary or assistant secretary of the corporation. [Cal. Corp. Code
(S) 1601]

SECTION 3. Annual Reports. The making of annual reports to shareholders
--------------
is hereby waived.

SECTION 4. Representation of Shares of Other Corporations. The chief
----------------------------------------------
executive officer or any other officer is authorized to vote, represent and
exercise on behalf of the corporation all rights incident to any and all shares
or other evidence of ownership of any other business entities such as
corporations, business trusts and partnerships standing in the name of the
corporation. The authority herein granted to said officers to vote or represent
on behalf of the corporation any and all such evidences of ownership held by the
corporation may be exercised either by such officers in person or by any person
authorized so to do by proxy or power of attorney duly executed by said
officers.

Article IX.

AMENDMENTS
----------

SECTION 1. Amendment of Bylaws. A bylaw or bylaws may be adopted,
-------------------
amended, or repealed by the vote of shareholders entitled to exercise a
majority of the voting power of the corporation or by the written assent of
such shareholders. Subject to the rights of the shareholders as provided in
this Section 1 of this Article IX, a bylaw or bylaws, other than a bylaw or
amendment thereof changing the authorized

10
<PAGE>

number of directors, may be adopted, amended, or repealed by the board of
directors. [Cal. Corp. Code (S) 211]

Article X.

INDEMNIFICATION
---------------

SECTION 1. Liability of Directors. The liability of the directors of the
----------------------
corporation for monetary damages shall be eliminated to the fullest extent
permissible under California law. [Cal. Corp. Code (S)(S) 204(a)(10), 309]

SECTION 2. Indemnification of Agents. The corporation is authorized to
-------------------------
provide indemnification of agents (as defined in Section 317 of the California
Corporations Code) through agreements with agents, vote of shareholders or
disinterested directors, or otherwise, to the fullest extent possible under
California Law, provided that any excess indemnification permitted by Section
317, involving a breach of duty to the corporation and its shareholders shall be
subject to the limits of such excess indemnification set forth in Section 204 of
the California Corporations Code and shall be paid only with such funds as may
be distributed as dividends to shareholders under applicable law. [Cal. Corp.
Code (S)(S) 204(a)(11), 317]

<PAGE>

EXHIBIT 99.7

Form of Assumption Reinsurance Agreement

<PAGE>

99.7

ASSUMPTION REINSURANCE AGREEMENT

dated as of July ___, 1992

by and among

John Garamendi, in his capacity as
Insurance Commissioner of the State of California
and as Conservator of
First Capital Life Insurance Company
First Capital Life Insurance Company
Pacific Mutual Life Insurance Company,

and

[NEWCO]
<PAGE>

TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<C> <S> <C>
Section 1. Definitions........................................... 2

Section 2. Reinsurance and Assumption............................ 2

Section 3. Reinsured Policies.................................... 3

Section 4. Assumed Liabilities................................... 4

Section 5. Transfer of Assets by Conservator on Behalf of FCL.... 5

Section 6. Employees of FCL...................................... 8

Section 7. Deferred Payment...................................... 10

Section 8. Assumption Certificates............................... 10

Section 9. Assignment of Indemnity Reinsurance Agreements........ 11

Section 10. Premiums and Premium Taxes............................ 12

Section 11. Expenses.............................................. 13

Section 12. Reserves.............................................. 13

Section 13. Administration and Servicing of Reinsured Policies.... 14

Section 14. Records............................................... 14

Section 15. Representations and Warranties of the Commissioner.... 15

Section 16. Representations and Warranties of FCL................. 16

Section 17. Representations and Warranties of PM and the Reinsurer 18

Section 18. Covenants of FCL and the Conservator.................. 20

Section 19. Closing Conditions of FCL and the Reinsurer........... 23

Section 20. Closing Conditions of FCL and the Conservator......... 25

</TABLE>

i
<PAGE>

<TABLE>

<C> <S> <C>
Section 21. Satisfaction or Failure of Conditions.................. 28

Section 22. Further Assurances..................................... 28

Section 24. Specific Performance................................... 29

Section 25. Waiver................................................. 29

Section 26. Other Provisions....................................... 30

Section 27. Indemnification........................................ 34

Section 28. Arbitration............................................ 37

Section 29. Interpretation......................................... 38
</TABLE>

EXHIBITS

EXHIBIT A Assumption Certificate

ii
<PAGE>

ASSUMPTION REINSURANCE AGREEMENT

THIS ASSUMPTION REINSURANCE AGREEMENT is made and entered into this _____
day of July, 1992, by and among John Garamendi, the Insurance Commissioner of
the State of California (the "Commissioner") and statutory conservator (the
"Conservator") of First Capital Life Insurance Company ("FCL"), acting on behalf
of FCL, FCL, Pacific Mutual Life Insurance Company, a California domiciled life
insurance company ("PM"), and [Newco], a California domiciled life insurance
company (hereinafter the "Reinsurer").

RECITALS

A. FCL is a life insurance company organized under the laws of the
State of California.

B. PM is a life insurance company organized under the laws of the State
of California; PM will, or shall cause a direct or indirect subsidiary to, own
all of the outstanding capital stock of the Reinsurer.

C. The Commissioner is acting as Conservator in that certain action
pending before the Superior Court of the State of California for the County of
Los Angeles, captioned Insurance Commissioner of the State of California v.
First Capital Life Insurance Company (Case No. BS 07549), and is entering into
this Agreement pursuant to Section 1037 and Section 1043 of the California
Insurance Code for the benefit of the policyholders, creditors and shareholder
of FCL.

1
<PAGE>

D. On the date hereof, the Commissioner, as Commissioner and as
Conservator, on behalf of FCL, FCL and PM have entered into an Agreement In
Connection With the Rehabilitation of First Capital Life Insurance Company (the
"Rehabilitation Agreement").

E. In consideration for and as a condition to the Rehabilitation
Agreement and after a finding by the Conservator that this Agreement and the
obligations of PM and the Reinsurer under the Rehabilitation Agreement provide
fair value and consideration for the transactions contemplated hereby, the
Conservator has agreed to cause FCL to transfer and the Reinsurer has agreed to
assume the policyholder contract liabilities of FCL and certain other
liabilities of FCL, and the Conservator has agreed to cause FCL to transfer all
of its right, title and interest in substantially all of its assets to the
Reinsurer. This Agreement is being executed pursuant to the Final Order of
Rehabilitation.

NOW, THEREFORE, in consideration of PM entering into the Rehabilitation
Agreement, and in consideration of the mutual covenants and promises set forth
herein and therein, the parties hereto agree as follows.

Section 1. Definitions. Capitalized terms not defined herein shall
have the meanings assigned to them in the Rehabilitation Agreement.

Section 2. Reinsurance and Assumption. On the Reinsurance Closing (as
defined in Section 23), FCL does

2
<PAGE>

hereby agree to cede and transfer to the Reinsurer, and by this Agreement shall
cede and transfer to the Reinsurer, and the Reinsurer does hereby agree to
acquire and assume from FCL, and by this Agreement shall acquire and assume from
FCL the following:

(i) all FCL Restructured Contracts which are in force on the
Reinsurance Closing Date; and

(ii) all policies and contracts incidental or supplemental to FCL
Restructured Contracts including, without limitation, policies with
reinstatement rights and policies or contracts under which benefits
are in the process of payment (the "Incidental Business").

The FCL Restructured Contracts and the Incidental Business are hereinafter
referred to collectively as the "Reinsured Policies".

Section 3. Reinsured Policies. As of the Reinsurance Closing Date (as
defined in Section 23), the Reinsurer shall be the successor to FCL under the
Reinsured Policies as if the Reinsured Policies were direct obligations of the
Reinsurer, and the Reinsurer hereby assumes full and complete liability for:

(i) the payment of all claims for benefits under the Reinsured Policies
incurred on or after the Reinsurance Closing Date;

3
<PAGE>

(ii) the payment of all claims for benefits under the Reinsured Policies
incurred prior to the Reinsurance Closing Date, but not yet paid
(reported or not);

(iii) the payment of cash surrender values not made by the Reinsurance
Closing Date under any of the Reinsured Policies surrendered before
the Reinsurance Closing Date;

(iv) refunds of premiums paid in advance in respect of the Reinsured
Policies;

(v) refunds of unearned premiums in respect of the Reinsured Policies;

(vi) the obligations, if any, under Article 6 of the Rehabilitation
Agreement to distribute the Credit to the FCL Restructured Contracts
of the Eligible Holders; and

(vii) the obligations, if any, under Section 17.4.3 of the Rehabilitation
Agreement to distribute to the FCL Restructured Contracts of the
Eligible Holders (collectively, the "Policy and Claims Liabilities").

Section 4. Assumed Liabilities. In addition to the assumption of the
Reinsured Policies, as additional consideration for the transactions
contemplated herein, the Reinsurer shall assume only (i) the lawsuits and claims
set forth on Schedule 12.2.9 of the Rehabilitation Agreement specifically
identified as relating to policyholder contracts up to an aggregate amount not
to exceed $500,000, and only (ii) such other liabilities and obligations of FCL
not so specifically identified on Schedule 12.2.9 of the

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<PAGE>

Rehabilitation Agreement existing as at the Reinsurance Closing Date which
liabilities and obligations are set forth, reserved for or otherwise reflected
on the 1991 Annual Statement (but not to exceed the amounts stated therein),
other than (A) contingent liabilities relating to, arising out of or in
connection with events occurring prior to the Closing Date with respect to the
rehabilitation or conservatorship of FCL (the "Rehabilitation Liabilities"), (B)
the Certificate of Contribution of FCL dated May 21, 1987, in the principal
amount of $35 million, payable to First Capital Life Insurance Group, Inc., (C)
any liability arising from or out of any breach by FCL of any covenant,
agreement, warranty or representation under the Rehabilitation Agreement or any
Ancillary Document, (D) any liability arising from or out of any breach by FCL
of any covenant, agreement, warranty or representation under this Agreement, (E)
any liability under any indemnification provision contained in any statute,
agreement, contract, or otherwise, in force or executed prior to the Reinsurance
Closing, (F) any equipment or furniture leases of FCL and (G) any Taxes not
included or includable in Closing Date Tax Liability (collectively, the "Assumed
Liabilities").

Section 5. Transfer of Assets by Conservator on Behalf of FCL. Subject
to the terms and conditions contained herein, at the Reinsurance Closing the
Conservator shall cause FCL to, and FCL shall, convey to the Reinsurer all of
its

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<PAGE>

right, title and interest to the assets of FCL existing as at the Reinsurance
Closing Date, including, without limitation, cash, accounts receivable, cash
value of FCL Restructured Contracts, recoverables, rights to be indemnified,
receivables and recoverables from reinsurers, deposits, refunds due, refunds for
Taxes arising from amended returns or operations, loss deduction carrybacks
attributable to periods prior to and including the Reinsurance Closing Date,
reversions of assets received or to be received by FCL in connection with the
termination of any Benefit Plan of FCL (without reduction for Taxes),
securities, properties, inventories, Special Deposits, the capital stock of any
Subsidiary, the office furniture, records, data and word processing equipment,
computer software, equipment, fixtures, office supplies, vehicles, furniture,
and other fixed assets owned or leased by FCL, software licenses, service and
warranty arrangements, trademarks, trade names, service marks, patents, and
other intellectual property, and other similar items related to the Assets
transferred hereto, including all original files, books, documents, records,
reports, lists, summaries, software and other data related to or identifying any
of the foregoing items, and all other assets and rights of every kind, character
and description, whether tangible or intangible, whether real, personal or
mixed, whether accrued, contingent or otherwise, but excluding (i) the Retained
Assets (as defined below in this Section 5), (ii) the Escrow Account (as

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<PAGE>

defined below in this Section 5) and (iii) goodwill and going concern value
(collectively the "Assets").

With respect to al Assets transferred to the Reinsurer, at the Reinsurance
Closing FCL shall deliver to the Reinsurer all such warranty deeds in form for
recording or deeds in such other form as is reasonably acceptable to the
Reinsurer, bills of sale, assignments, stock powers, bond powers, evidences of
consent and such other transfer instruments or documents, all in form and
substance satisfactory to the Reinsurer as may be reasonably necessary or
desirable to evidence or perfect the sale, conveyance, transfer, assignment and
delivery of the Assets to the Reinsurer. The Reinsurer shall pay (i) all
affidavit and acknowledgment fees, if any, and (ii) all other fees directly
relating to the transfer of the Assets.

The Assets transferred to the Reinsurer shall in all events include the
Separate Accounts, including all Assets owned by FCL and held in the Separate
Accounts (after any withdrawal of any Assets in excess of Separate Account
liabilities).

"Retained Assets" shall mean (i) claims, suits, rights and choses in
action, choate or inchoate, whether now asserted or not previously asserted,
with respect to damages or injury to FCL, its assets or FCL Contract Holders,
and (ii) the assets listed on Schedule 12.2.17 to the Rehabilitation Agreement
designated in writing by Newco to the

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<PAGE>

Conservator and FCL within ten Business Days of the Reinsurance Closing Date.

"Escrow Account" shall mean an interest bearing escrow account established
by the Reinsurer and FCL pursuant to which FCL shall deposit cash and Short Term
Investments with a market value sufficient to pay in full (i) Opt Out Payments
not paid prior to the Reinsurance Closing in accordance with the terms of the
Rehabilitation Agreement and (ii) any amount necessary to satisfy Section
6(b)(i). After all Opt Out Payments have been made and the obligation of
Section 6(b)(i) satisfied, the balance of the proceeds in the escrow shall be
transferred to the Reinsurer. If at any time the escrow holder shall advise the
Reinsurer that additional funds are necessary to complete the Opt Out Payments
or the obligations of Section 6(b)(i), the Reinsurer shall within fifteen (15)
Business Days deposit cash or Short Term Investments sufficient to satisfy the
payment of such obligations.

Section 6. Employees of FCL. (a) Effective no later than the
Reinsurance Closing Date, FCL will completely and irrevocably terminate all
agreements, benefits, contracts, arrangements, commitments and other obligations
pertaining to employment or in the nature of employment contracts with all
persons, whether denominated as "employees" or otherwise (the "Terminated
Persons").

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<PAGE>

(b) All wages, salary, accrued fringe benefits (including accrued vacation
pay), severance payments (if any), and other liabilities, compensation or
amounts owed to Terminated Persons shall be fully paid by FCL at or prior to the
Reinsurance Closing, except as follows which may be paid out of the Escrow:

(i) All Terminated Persons to whom Newco is offering new employment
pursuant to Section 6(d) below who are entitled to accrued vacation pay as of
the Reinsurance Closing shall be given the option of (A) being paid their
accrued vacation pay in cash by FCL immediately after the Reinsurance Closing,
or (B) if they accept the offer of new employment with Newco, having a credit
for their accrued vacation time included as a fringe benefit they would receive
upon commencing employment with Newco; and,

(ii) Terminated Persons who elect the first option specified in
Paragraph (b)(i) above (or who do not accept the offer of new employment with
Newco) shall be paid their accrued vacation pay from the Escrow immediately
after the Reinsurance Closing.

(c) FCL shall grant Newco reasonable opportunities to communicate with all
employees of FCL prior to the Reinsurance Closing Date for purposes of allowing
Newco to convey offers of employment, for confirming the terms of such
employment, and for purposes related thereto. All communications by Newco to
FCL's employees prior to the

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<PAGE>

Reinsurance Closing shall be subject to the reasonable approval of FCL.

(e) As to former employees of FCL which Newco chooses to hire, Newco shall
be responsible for and shall pay all costs attributable to such employees from
the date of hire by Newco. Newco shall have no responsibility and shall be
fully indemnified by FCL with respect to any claim or liability relating to any
Benefit Plan maintained by or contributed to by FCL, unless otherwise notified
by Newco.

Section 7. Deferred Payment. As additional consideration of the
transactions contemplated herein, on the Credit Allocation Date, the Reinsurer
shall deliver by wire transfer to FCL or its successor a deferred payment in
cash in an amount equal to ninety percent of the excess, if any, of (i) Adjusted
Surplus over (ii) the sum of (A) the First Credit and (B) Retained Surplus.

Section 8. Assumption Certificates. The Reinsurer hereby agrees, as
soon as practical following the Reinsurance Closing Date, and in any event
within thirty (30) days following the Reinsurance Closing Date, to issue a
written Assumption Certificate to each policyholder or contract holder under the
Reinsured Policies, in substantially the form set forth in Exhibit A attached
hereto, specifying that such policy or contract has been assumed by the
Reinsurer and the effective date of such assumption.

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<PAGE>

Section 9. Assignment of Indemnity Reinsurance Agreements. (a) The
Reinsurer shall be substituted for and succeed to all of the rights and
liabilities of FCL, and shall be recognized for all purposes as FCL thereunder
in substitution for FCL, under the indemnity reinsurance agreements set forth in
Schedule 12.2.12 in effect as of the Reinsurance Closing Date between FCL (as
the ceding insurer) and any assuming reinsurer which reinsures the Reinsured
Policies (the "Reinsurance Agreements"); provided, however, that such
substitution shall apply only to premiums due and benefits paid under the
Reinsured policies on or after the Reinsurance Closing Date. FCL hereby sells,
assigns, transfers and conveys, and the Reinsurer hereby purchases and assumes,
any and all rights and obligations of FCL under the Reinsurance Agreements with
respect to benefits paid on or after the Reinsurance Closing Date under the
Reinsured Policies. The Reinsurer shall use its best efforts to effect, as
promptly as possible, an endorsement to each Reinsurance Agreement substituting
the Reinsurer for FCL. FCL agrees to enter into such endorsements and, if
reasonably requested by the Reinsurer, aid the Reinsurer, at the Reinsurer's
expense, in obtaining any such endorsement.

(b) FCL shall, if reasonably requested by the Reinsurer, aid the
Reinsurer, at the Reinsurer's expense, in collection of amounts due from
reinsurers which do not agree to an endorsement to the applicable Reinsurance
Agreements,

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<PAGE>

and FCL shall forward any funds collected by it to the Reinsurer.

Section 10. Premiums and Premium Taxes.

Section 10.1 Premiums. Premiums due or paid on the Reinsured Policies
on and after the Reinsurance Closing Date and any loan repayments (and interest
payments thereon) made on the Reinsured Policies on or after the Reinsurance
Closing Date shall be the sole property of the Reinsurer. From and after the
Reinsurance Closing Date, all policyholders under the Reinsured Policies
hereunder shall pay all premiums and make any loan repayments (and interest
payments thereon) on such contracts and policies directly to the Reinsurer. All
monies, checks, drafts, orders, postal notes or other instruments received by
FCL after the Reinsurance Closing Date for such premiums shall be forthwith
transferred and delivered to the Reinsurer, and any such instruments when so
delivered shall bear all endorsements required to effect such transfer and
delivery. From and after the Reinsurance Closing Date, the Reinsurer shall be
authorized, and hereby is authorized, to endorse for payment any such
instruments payable to, or to the order of, FCL and received by the Reinsurer
for premiums on the Reinsured Policies hereunder.

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<PAGE>

Section 10.2 Premium Taxes. The Reinsurer shall pay all premium taxes
as may be required by law on premiums received with respect to the Reinsured
Policies on or after the Reinsurance Closing Date; provided, however, that FCL
shall be obligated to pay all premium taxes with respect to any premiums
received under the Reinsured Policies prior to the date hereof.

Section 11. Expenses. All legal and other costs incurred in connection
with the reinsurance and assumption of the Reinsured Policies shall be borne by
the party incurring such costs; provided, however, that FCL shall pay (i) all
sales, transfer and documentary taxes due as a result of the transfer of the
assets, (ii) all affidavit and acknowledgment fees, if any, and (iii) all other
fees directly related to the transfer of the Assets.

Section 12. Reserves. As of the Reinsurance Closing Date, FCL shall
transfer and irrevocably assign to Reinsurer, and the Reinsurer shall accept,
the total aggregate policy and claims reserves for the Reinsured Policies. From
and after the Reinsurance Closing Date the Reinsurer shall maintain proper
policy reserves, claims reserves, and any other applicable and appropriate
reserves for all Reinsured Policies hereunder, and such reserves shall in no
event be less than the reserves required by the insurance department of any
state having jurisdiction over the Reinsured Policies after the date hereof.

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<PAGE>

Section 13. Administration and Servicing of Reinsured Policies.
Commencing as of the Reinsurance Closing Date and except as hereinafter
provided, all administration and servicing of the Reinsured Policies, and the
supervision and payment of all claims incurred under the Reinsured Policies,
shall be conducted by the Reinsurer, and the expense of such administration,
servicing, supervision and payment shall be borne by the Reinsurer. The
obligations of the Reinsurer under this Agreement shall be the same as those of
FCL in accordance with the terms of the Reinsured Policies.

The Reinsurer reserves the right, and shall be authorized, to make any
defense at law or in equity to any action or claim instituted or made under any
Reinsured Policy which might or could have been made by FCL had this Agreement
not been executed. All of the provisions, conditions, limitations and
exclusions contained in the Reinsured Policies shall remain in effect and be
applicable in accordance with the terms and conditions of the Reinsured
Policies, except as they may be specifically amended by the Reinsurer after the
date hereof; provided, however, any such amendments shall not impose any
additional liability on FCL under the Reinsured Policies.

Section 14. Records. FCL shall promptly transfer and deliver to the
Reinsurer all of its original statistical and sales data, records, papers,
documents, books, memoranda and files pertaining to the Reinsured Policies
(referred to

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<PAGE>

herein as "Records"). FCL reserves the right to keep copies of any Records.
FCL and the Reinsurer each agree to provide the other party all data and
information with respect to the Reinsured Policies sufficient to enable each to
prepare annual or other required financial statements.

Section 15. Representations and Warranties of the Commissioner.
Notwithstanding any independent investigation or verification undertaken by the
Reinsurer or PM, in order to induce PM and the Reinsurer to consummate the
transactions contemplated by this Agreement, the Commissioner represents and
warrants to PM and the Reinsurer as follows:

Section 15.1 Valid Appointment. The Conservator has been duly and
validly appointed to be the Conservator of FCL as that term is used in Section
1011 of the Insurance code.

Section 15.2 Authorization; Enforceable Obligations. The Commissioner,
as Conservator, has all requisite power, authority and legal right necessary to
execute and deliver this Agreement and to perform and carry out the transactions
contemplated by this Agreement upon the terms and subject to the conditions of
this Agreement. No other or further authorization or approval from any Person
will be required for the validity or enforceability of the provisions of this
Agreement and the Final Order of Rehabilitation against the Conservator or FCL.

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<PAGE>

Section 15.3 Validity of Contemplated Transactions. The execution,
delivery and performance of this Agreement by the Conservator will not
contravene or violate any law, rule or regulation to which the Conservator is
subject, or, to the best of the Conservator's knowledge, any judgment, order,
writ, injunction, decree or ward of any court, governmental instrumentality,
regulatory agency, administrative body, administrative officer, arbitrator or
executive which is applicable to the Conservator or FCL.

Section 15.4 No Inconsistent Laws or Regulations. The transactions
contemplated by this Agreement will not contravene or violate any provisions of
the Insurance Code.

Section 15.5 Reserve for Federal Income Taxes. The reserve(s) for
Taxes maintained on the books and records of FCL as of the time immediately
preceding the Reinsurance Closing Date shall be in an amount sufficient to
satisfy FCL's liability for Taxes shown on the Tax Returns for all periods
ending on or prior to, or including, the Reinsurance Closing Date.

Section 16. Representations and Warranties of FCL. Notwithstanding any
independent investigation or verification undertaken by PM or the Reinsurer, in
order to induce PM and the Reinsurer to enter into this Agreement and to induce
the Reinsurer to consummate the transactions contemplated by this Agreement, the
Conservator on behalf of FCL represents and warrants to PM and the Reinsurer as
follows:

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<PAGE>

Section 16.1 Organization and Standing. Except as set forth in
Schedule 16.1(a) hereto, FCL is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of California and has
the corporate power and authority to carry on its business as now being
conducted, subject to the powers and authority of the Conservator. Except as
set forth in Schedule 16.1(b) hereto, FCL is duly qualified and is authorized to
do business and is in good standing as a foreign corporation in each
jurisdiction where the business conducted by it requires such qualification.

Section 16.2 Authority. FCL, by and through the Conservator, has all
requisite power and authority to execute and deliver this Agreement, to perform
its obligations under this Agreement and to consummate the transactions
contemplated by this Agreement. This Agreement has been duly executed and
delivered by FCL and constitutes the legal, valid and binding obligation of FCL,
enforceable against it in accordance with its terms.

Section 16.3 No Breach. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated by this
Agreement in accordance with the terms and conditions of this Agreement by FCL,
will not (i) violate or conflict with any provision of the Articles of
Incorporation or By-Laws of FCL, (ii) violate or conflict with any of the terms
of any material indenture, contract,

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<PAGE>

agreement or instrument to which FCL is a party, (iii) violate or conflict with
any statute, law or governmental regulation or any judicial, administrative or
arbitration order, award, judgment, writ, injunction or decree applicable to FCL
or (iv) except as set forth on Schedule 16.3, violate or conflict with, result
in a breach of, constitute (with or without notice, the lapse of time, or both)
a default under, allow for the acceleration of the performance required by the
terms of, allow for a right of termination under, or result in a loss or
suspension of, or a modification of the effect of, any legal privilege, license,
franchise, authorization, qualification, right or obligation (including, without
limitation, contractual rights or obligations) of FCL (financial or otherwise)
or on its ability to perform its obligations hereunder.

Section 16.4 Other Representations and Warranties. Each of the
representations and warranties made by the Conservator on behalf of FCL and by
FCL in Section 12.2 of the Rehabilitation Agreement are true and correct as of
this date and will be true and correct as of the Reinsurance Closing Date.

Section 17. Representations and Warranties of PM and the Reinsurer.
Notwithstanding any independent investigation or verification undertaken by FCL
or the Conservator, in order to cause FCL and the Conservator to enter into this
Agreement, and to cause FCL and the Conservator to consummate

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<PAGE>

the transactions contemplated by this Agreement, PM and the Reinsurer represent
and warrant to FCL and the Conservator that as of the Reinsurance Closing:

Section 17.1 Organization and Standing. The Reinsurer will be a
corporation duly incorporated, validly existing and in good standing under the
laws of California and will have the corporate power and authority to carry on
its business as then being conducted. The Reinsurer will be corporation duly
licensed to conduct insurance business under the laws of the State of California
and will use its best efforts to obtain such licenses to conduct such business
as a foreign insurance corporation in such other jurisdictions as may be
required by law or as is necessary to carry out the intent and purposes of this
Agreement.

Section 17.2 Authority. The Reinsurer will have all requisite power
and authority to perform its obligations under this Agreement and to consummate
the transactions contemplated by this Agreement. This Agreement will be duly
executed and delivered by the Reinsurer and constitute the legal, valid and
binding obligation of the Reinsurer, enforceable against it in accordance with
its terms.

Section 17.3 No Breach. Except as set forth on Schedule 17.3, the
consummation of the transactions contemplated by this Agreement in accordance
with the terms and conditions of this Agreement by the Reinsurer, will not (i)
violate or conflict with any provision of the Articles of

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<PAGE>

Incorporation or By-Laws of the Reinsurer, (ii) violate or conflict with any of
the terms of any material indenture, contract, agreement or instrument to which
the Reinsurer is a party, (iii) violate or conflict with any statute, law or
governmental regulation or any judicial, administrative or arbitration order,
award, judgment, writ, injunction or decree applicable to the Reinsurer or (iv)
violate or conflict with, result in a breach of, constitute (with or without
notice, the lapse of time, or both) a default under, allow for the acceleration
of the performance required by the terms of, allow for a right of termination
under, or result in a loss of suspension of, or a modification of the effect of,
any legal privilege, license, franchise, authorization, qualification, right or
obligation (including, without limitation, contractual rights or obligations) of
the Reinsurer such that there would be a material adverse effect on the ability
of the Reinsurer to perform its obligations under this Agreement.

Section 18. Covenants of FCL and the Conservator.

Section 18.1 Diligence. The Conservator shall cause FCL shall take all
necessary steps and proceed diligently and in good faith and use its best
efforts to consummate the transactions contemplated by this Agreement.

Section 18.2 Conduct of Business. From the date of this Agreement
through the Reinsurance Closing Date, the Conservator shall satisfy the
provisions of Article 13 of the Rehabilitation Agreement, and in addition the
Conservator

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<PAGE>

shall cause FCL to, and FCL shall, conduct its business in the ordinary course
of business consistent with past practices and the Conservator shall cause FCL
not to, and FCL shall not:

(i) incur any obligations or liabilities other than in the
ordinary course of business and consistent with past practices;

(ii) incur any obligations or liabilities which liabilities or
obligations, individually and in the aggregate, shall have a material
adverse effect on the condition (financial or other), results of operations
or business of FCL;

(iii) amend its Articles of Incorporation or By-Laws or merge with
or into or consolidate with any other Person;

(iv) declare or pay any dividends or declare or make any other
distributions of any kind to stockholders or any direct or indirect
redemption, retirement, purchase or other acquisition of any shares of its
capital stock;

(v) make any loan or advance to any direct or indirect holder of
the capital stock of FCL or to any of FCL's directors, officers,
consultants or, other than in the ordinary course of business, to any
agents or other representatives of FCL;

(vi) make any acquisition of assets, properties, securities or
business of any other Person or sell or

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<PAGE>

transfer any of its assets (other than the purchase and sale of investment
securities contained in its investment portfolio), except in each case in
the ordinary course of business;

(vii) make any change in its accounting methods or practices,
including, without limitation, any change with respect to establishment of
reserves, except as required by statutory accounting principles; or

(viii) sell or otherwise transfer any of the Assets except in the
ordinary course of business consistent with past practice.

Section 18.3 Cooperation with Respect to this Agreement. The
Commissioner shall (i) use his best efforts to recommend and support the
licensing of the Reinsurer in and by those jurisdictions other than the State of
California as may be appropriate or necessary to meet the intent and purpose of
this Agreement and (ii) subject to the compliance with the applicable provisions
of the Insurance Code, consider and process on an expedited basis the
applications and filings incident to the organization, licensing and
commencement of business of the Reinsurer in the State of California to conduct
the insurance business to be assumed by Reinsurer pursuant to this Agreement.

Section 18.4 Warn. Prior to the Reinsurance Closing Date, the
Conservator shall cause FCL to comply with the

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<PAGE>

notice provisions of the Worker Adjustment and Retraining Notification Act
(Warn).

Section 19. Closing Conditions of the Reinsurer. The obligations of
the Reinsurer to close the transactions contemplated by this Agreement shall be
subject to the fulfillment or satisfaction by the Conservator and FCL of each of
the following conditions prior to or at the Closing:

Section 19.1 Governmental Approvals. All Permits required in
connection with the transactions contemplated by this Agreement shall have been
obtained and shall be in full force and effect, without conditions or
limitations unacceptable to PM and the Reinsurer, and PM and the Reinsurer shall
have been furnished with appropriate evidence of the granting of such Permits
other than Permits the absence of which will not have a material adverse effect
on the Reinsurer. Any waiting period required by any governmental authority or
regulatory body, including, without limitation, the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, shall have
expired or been terminated. The notice provisions of the Worker Adjustment and
Retraining Notification Act (Warn) shall have been satisfied.

Section 19.2 No Prohibition. There shall not have been any action
taken, or any statute, rule, regulation, judgment, order or injunction
promulgated, entered, enforced, enacted, issued or purported to be applicable to
the

23
<PAGE>

transactions contemplated by this Agreement by any governmental authority, court
or regulatory body which, directly or indirectly, (i) prohibits or makes illegal
the consummation of the transactions contemplated by this Agreement or (ii)
imposes any material conditions or limitations on the ability of PM or the
Reinsurer to exercise full rights under this Agreement.

Section 19.3 Third Party Consents. All material consents from third
parties that may be required in connection with the performance by FCL of its
obligations under this Agreement shall have been obtained and shall be in full
force and effect; provided, however, that for purposes of this Section 19.3,
policyholders and contract holders of FCL shall not be deemed to be third
parties.

Section 19.4 No Material Adverse Change. Since December 31, 1991,
there shall have been no material adverse change, or discovery of a condition or
occurrence of an event which has resulted or reasonably can be expected to
result in a material adverse change in the condition (financial or other),
results of operations or business of FCL.

Section 19.5 Closing Documents. FCL shall have delivered to PM and the
Reinsurer such closing certificates, certifying to the fulfillment of the
conditions set forth in this Section 19, legal opinions and other closing
documents as the Reinsurer may reasonably request.

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<PAGE>

Section 19.6 Representations and Warranties. The representations and
warranties of the Commissioner and FCL set forth in this Agreement and the
Rehabilitation Agreement shall be true and correct in all material respects on
and as of the Reinsurance Closing Date with the same effect as though such
representations and warranties had been made on and as of the Reinsurance
Closing and no variations of any such representations or warranties shall have a
material adverse effect on the ability of PM or the Reinsurer to close the
transactions contemplated by this Agreement in the manner so contemplated.

Section 19.7 All Covenants and Agreements Satisfied. The Conservator
and FCL shall have complied with each and all of the covenants and agreements
contained herein.

Section 19.8 Closing of the Rehabilitation Agreement. The Closing as
defined under the Rehabilitation Agreement shall have been completed.

Section 20. Closing Conditions of FCL and the Conservator. The
obligations of the Conservator and FCL to close the transactions contemplated by
this Agreement shall be subject to the fulfillment or satisfaction of the
following conditions prior to or at the Reinsurance Closing:

Section 20.1 Representations and Warranties. The representations and
warranties of PM and the Reinsurer set forth in this Agreement and the
Rehabilitation Agreement shall be true and correct in all material respects on
and as of the Reinsurance Closing Date with the same effect as though such
representations and warranties had been made on and as of the

25
<PAGE>

Reinsurance Closing and no variations of any such representations or warranties
shall have a material adverse effect on the ability of the conservator of FCL to
close the transactions contemplated by this Agreement in the manner so
contemplated.

Section 20.2 Governmental Approvals. All Permits required in
connection with the transactions contemplated by this Agreement shall have been
obtained and shall be in full force and effect, and the Conservator and FCL
shall have been furnished with appropriate evidence of the granting of such
permits. Any waiting period required by any such governmental authority or
regulatory body, including, without limitation, the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, shall have
expired or been terminated.

Section 20.3 No Prohibition. There shall not have been any action
taken, or any statute, rule, regulation, judgement, order or injunction
promulgated, entered, enforced, enacted, issued or purported to be applicable to
the transactions contemplated by this Agreement by any governmental authority,
court or regulatory body (other than, in each case, the Commissioner in his role
as Conservator of FCL) which, directly or indirectly, prohibits or makes illegal

26
<PAGE>

the consummation of the transactions contemplated by this Agreement.

Section 20.4 Third Party Consents. All material consents from third
parties that may be required in connection with the performance by FCL of its
obligations under this Agreement shall have been obtained and shall be in full
force and effect; provided, however, that for purposes of this Section 20.4,
policyholders and contract holders of FCL shall not be deemed to be third
parties.

Section 20.5 Closing Documents. PM and the Reinsurer shall have
delivered to FCL such closing certificates, certifying to the fulfillment of the
conditions set forth in this Section 20.5, legal opinions and other closing
documents as FCL may reasonably request.

Section 20.6 Taxes. The Conservator shall be satisfied that there are
no material liabilities, claims or actions for or with respect to Taxes that
arise as a consequence of the consummation of the transactions contemplated by
this Agreement which adversely affect the policyholders and contract holders
under the Reinsured Policies, other than such liabilities, claims or actions
which as of the Reinsurance Closing Date are of general applicability to
assumption reinsurance transactions.

Section 20.7 Closing of the Rehabilitation Agreement. The Closing as
defined under the Rehabilitation Agreement shall have been completed.

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<PAGE>

Section 21. Satisfaction or Failure of Conditions. Each condition
precedent for the benefit of PM and the Reinsurer, on the one hand, or the
Conservator or FCL, on the other hand, shall be deemed waived or satisfied as of
the Reinsurance Closing or, if earlier, upon written notice of such satisfaction
by the performing party to the other parties, unless the party for whose benefit
each such condition exists shall provide written notice to the other of the
failure of one or more particular conditions precedent to be satisfied. All
parties shall use their best efforts to satisfy the conditions under this
Agreement.

Section 22. Further Assurances. The Conservator shall cause FCL to (i)
use its best efforts to obtain, prior to the Reinsurance Closing Date, all
material consents or approvals of all other Persons as may be reasonably
required or deemed reasonably necessary by the Reinsurer in order to consummate
the transactions contemplated by this Agreement and (ii) execute and deliver all
such further documents and instruments and take all such further action as may
be reasonably necessary in order to consummate the transactions contemplated by
this Agreement.

Section 23. Reinsurance Closing. The closing ("Reinsurance Closing")
of the transactions contemplated by this Agreement shall take place after the
Closing Date as defined in the Rehabilitation Agreement and on or before
December 31, 1992 at the offices of Buchalter, Nemer, Fields &

28
<PAGE>

Younger, 601 South Figueroa Street, Los Angeles, CA 90017, commencing at 10:00
a.m., local time or such other as the parties may agree, or such other date and
time as the parties hereto shall mutually agree ("Reinsurance Closing Date").

Section 24. Specific Performance. The parties hereto agree that
irreparable harm would occur in the event that any of the provisions of this
Agreement were not performed by the Conservator and FCL in accordance with their
specific terms or conditions or were otherwise breached and that a money
judgement would be an inadequate remedy for breach of this Agreement because of
the difficulty of collecting such judgement in the event that this Agreement is
not performed in accordance with its terms or conditions or otherwise breached.
It is accordingly agreed that PM and the Reinsurer shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement by the
Conservator and FCL and to enforce specifically the terms and provisions hereof
in any court of the United States or any state having jurisdiction, this right
of specific performance being in addition to any other remedy to which PM and
the Reinsurer are entitled at law or in equity.

Section 25. Waiver. Any term or provision of this Agreement may be
waived at any time by the party or parties entitled to the benefit thereof by a
written instrument duly executed by such party or parties. No failure or delay
of any party hereto in exercising any power or right under this

29
<PAGE>

Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
each party under this Agreement are cumulative and are not exclusive of any
rights or remedies which it would otherwise have. No waiver of any provision of
this Agreement or consent to any departure by the other parties hereto therefrom
shall in any event be effective unless permitted in accordance with the first
sentence of this Section 25 and then such waiver or consent shall be effective
only in the specific instance and for the purpose for which given. No notice to
or demand on the other parties hereto by a party in any case shall entitle such
other parties to any other or further notice or demand in similar or other
circumstances.

Section 26. Other Provisions.

Section 26.1 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED AND
GOVERNED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA AS APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN THE STATE OF CALIFORNIA
WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.

Section 26.2 Amendment. This Agreement and the Rehabilitation
Agreement contain the entire understanding among the parties with respect to the
matters set forth herein and supersede all prior understandings with respect to
such

30
<PAGE>

matters. This Agreement cannot be modified, changed, discharged or terminated,
except by an instrument in writing signed by all the parties then bound by the
terms hereto.

Section 26.3 Notices. Except as provided in Section 8, any notice
request, demand, waiver, consent, approval or other communication required or
permitted to be made hereunder shall be in writing and shall be deemed given
only if delivered by hand, or mailed by certified or registered mail with
postage prepaid and return receipt registered mail with postage prepaid and
return receipt requested, or sent by facsimile transmission, as follows:

(a) If to the Commissioner, the Conservator or FCL, to:

Insurance Commissioner or the
State of California, as
Conservator of First Capital Life
Insurance Company
California Department of Insurance
45 Fremont Street, 23/rd/ Floor
San Francisco, California 94105

with concurrent copies to:

Ralph C. Walker, Esq.
Orrick, Herrington & Sutcliffe
400 Sansome Street
San Francisco, California 94111

and

Norman C. Hile, Esq.
Orrick, Herrington & Sutcliffe
555 Capitol Mall, Suite 1200
Sacramento, California 95814

31
<PAGE>

and

Karl L. Rubinstein, P.C.
Rubinstein & Perry
335 S. Grand Avenue
Los Angeles, California 90057

and

Eric D. Horodas, P.C.
Rubinstein & Perry
222 Kearny Street
San Francisco, California 94108

(b) If to PM or the Reinsurer, to:

Pacific Mutual Life Insurance Company
700 Newport Center Drive
Newport Beach, California 92660
Attention: General Counsel

with a concurrent copy to:

Mark A. Bonenfant, Esq.
Buchalter, Nemer, Fields & Younger,
A Professional Corporation
601 South Figueroa Street
Los Angeles, California 90017-5704

or to such other address as may be designated by a party by written notice to
the other parties hereto. Such notice, request, demand, waiver, consent,
approval or other communication will be deemed to have been given as of the date
so delivered, sent by facsimile or mailed.

Section 26.4 Further Assurances. Each of the parties hereto shall make,
do or cause to be done such further acts and execute, acknowledge and deliver
such instruments and documents as the other party may reasonably request or
require to effectuate fully the purposes and intent of this Agreement.

32
<PAGE>

Section 26.5 Severability. Should any part or provision of this
Agreement be held invalid or unenforceable, the invalid or unenforceable part or
provision shall be replaced with a provision which accomplishes, to the extent
possible and lawful, the original business purpose and economic intent of such
part or provision in a valid and enforceable manner, and the remainder of this
Agreement shall remain effective and binding upon the parties hereto.

Section 26.6 Benefit. This Agreement shall be binding upon, and shall
inure to the benefit of, the parties hereto and their respective successors and
permitted assigns. FCL and the Reinsurer agree that it is their intent that the
owners and annuitants of the Reinsured Policies, their beneficiaries designated
in such policies and the legal representatives of such policy owners, annuitants
and beneficiaries shall be third-party beneficiaries of this Agreement.

Section 26.7 Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and shall not control or affect the
meaning or construction of any of the provisions hereof.

Section 26.8 Execution in Counterparts. This Agreement may be executed
in one or more counterparts, each of which shall be deemed to be the original,
but all of which together shall constitute one and the same instrument.

33
<PAGE>

Section 26.9 Liability of the Conservator. The Conservator is a party
to this Agreement only in his representative capacity as Conservator of FCL and
as the Commissioner, and not individually, and the parties hereto agree and
acknowledge that the Conservator shall not have any personal liability for any
matters or obligations hereunder, and further that the State of California is
not a party and shall have no liability with respect hereto.

Section 26.10 Survival of the Representations and Warranties. The
representations and warranties set forth herein shall survive the Reinsurance
Closing.

Section 27. Indemnification

(a) Subject to the provisions of subsection (c) of this Section 27, the
Reinsurer shall indemnify FCL against, and hold it harmless from, (i) all
liabilities arising on or after the Reinsurance Closing Date with respect to the
Reinsured Policies, and (ii) al other losses, claims, damages and liabilities
and shall reimburse FCL for all expenses of any kind or nature whatsoever
(including, without limitation, reasonable attorneys' fees) as incurred, that
are based upon or arise out of (x) the breach of any obligation of the Reinsurer
provided for in this Agreement or (y) the failure by the Reinsurer to discharge
any obligations of FCL to the extent that the same are assumed by the Reinsurer
pursuant to this Agreement.

34
<PAGE>

(b) Subject to the provisions of subsection (c) of this Section 27, FCL
shall indemnify the reinsurer against, and hold it harmless from, all losses,
claims, damages and liabilities and shall reimburse the Reinsurer for all
expenses of any kind or nature whatsoever (including, without limitation,
reasonable attorneys' fees) as incurred in connection therewith (collectively
"Losses"), that are based upon or arise out of (i) the breach of any obligation
of FCL provided for in this Agreement, (ii) any and all claims or lawsuits, or
other legal proceedings arising from or relating to any alleged acts or
omissions of FCL with respect to the Reinsured Policies or Assumed Liabilities
occurring prior to the Reinsurance Closing Date of (iii) Losses resulting from
any claim, liability or lawsuit that is not one of the Assumed Liabilities. The
indemnification rights set forth in this Section 27(b) are in addition to and
not in lieu of the setoff provisions set forth in Article 17 of the
Rehabilitation Agreement.

(c)(i) Within 60 days after receipt by FCL or the Reinsurer, as the
case may be (the "Indemnified Party"), of notice of the commencement of any
claim, action or proceeding the subject of this Section 27, the Indemnified
party shall give notice to the other party (the "Indemnifying Party") of such
claim, action or proceeding and the Indemnifying Party shall at its expense
assume the defense of any claim, action or proceeding; provided, however, that
the failure by the

35
<PAGE>

Indemnified party to give timely notice as provided herein shall not relieve the
Indemnifying Party of its indemnification obligations under this Agreement,
except to the extent that the omission results in a failure of actual notice to
the Indemnifying Party and the Indemnifying Party is damaged as a result of the
failure to receive such notice. In the defense of any such claim against the
Indemnified Party (whether singly or with the Indemnifying Party) or of any
action or proceeding in which the Indemnified Party is named as a party, the
Indemnifying Party shall not, except with the consent of the Indemnified Party,
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to the Indemnified Party and the Indemnifying party shall cooperate in the
defense of any claim, action or proceeding and the records of each relating to
the subject matter of such defense shall be available to the other with respect
to such defense.

(ii) Notwithstanding anything in this Agreement to the contrary, the
Indemnified party shall have the right to employ separate counsel in any such
claim, action or proceeding which counsel may participate actively and fully as
co-counsel in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of the Indemnified

36
<PAGE>

Party unless (i) the Indemnifying Party has agreed in writing to pay such fees
and expenses, (ii) the Indemnifying party has failed to assume the defense and
employ counsel in a timely manner or (iii) the named parties to any such action,
suit or proceeding (including any impleaded parties) include both the
Indemnified Party and the Indemnifying Party and the Indemnified Party shall
have been advised by its counsel that representation of the Indemnified Party
and the Indemnifying Party by the same counsel would be inappropriate under
applicable standards of professional conduct (whether or not such representation
by the same counsel has been proposed), due to actual or potential differing
interests between them (in which case the Indemnifying Party shall not have the
right to assume the defense of such action on behalf of the Indemnified Party).
The Indemnifying Party shall not be liable for any settlement of any such claim,
action or proceeding effected without its written consent (which consent shall
not be unreasonably withheld) but if settled with such written consent, or if
there be a final judgment for the plaintiff in any such claim, action or
proceeding, the Indemnifying Party agrees to indemnify and hold harmless the
Indemnified Party to the extent provided in this Section by reason of such
settlement or judgment.

Section 28. Arbitration. In the event of any dispute or difference
arising hereafter between FCL and the Reinsurer with reference to any
transaction under or relating

37
<PAGE>

in any way to this Agreement on which agreement between the parties hereto
cannot be reached, the dispute or difference shall be decided by arbitration in
the manner specified in Article 17 of the Rehabilitation Agreement, with the
provisions therein applicable to PM or Newco being applicable to the Reinsurer.

Section 29. Interpretation. The words "herein", "hereof" and "hereunder"
and other words of similar import refer to this Agreement as a whole and not to
any particular Section, subsection or subdivision.

IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first written above.

FIRST CAPITAL LIFE INSURANCE COMPANY

By: The Commissioner of Insurance
of the State of California,
in his capacity as Commissioner
and Conservator, but not
individually.

__________________________________________
[Commissioner]

[Reinsurer]

By: ____________________________________
Name: ______________________________
Title: ______________________________

38
<PAGE>

Exhibit A

[REINSURER]
[COMPANY ADDRESS
TELEPHONE NO.]

ASSUMPTION CERTIFICATE

Policy [Contract] No.:

Issued To:

This is to certify that, pursuant to the terms of a Reinsurance and
Assumption Agreement, the above policy [contract] and all endorsements thereto
(herein called the "Policy" ["Contract"}) issued by FIRST CAPITAL LIFE INSURANCE
COMPANY (a California stock insurance corporation) was assumed by [Reinsurer] (a
California stock insurance corporation).

This change is effective as of ______________________________.

All of the terms and conditions of the Policy [Contract] remain unchanged,
except that [Reinsurer] shall be the insurer. All premium payments, notices and
claims on the Policy [Contract] shall hereafter be made directly to [Reinsurer]
as though it had issued the Policy [Contract] originally, at the address
indicated above.

You should attach this Assumption Certificate to the Policy [Contract].

Inquiries concerning the Policy [Contract] should be directed to
[Reinsurer].

If you wish to object to the transfer of the Policy [Contract] to
[Reinsurer], please check the box below and sign and return this Certificate to
[Reinsurer] by [60 day period] at the address indicated above. If you reject
the transfer, you will be considered to have canceled the Policy [Contract] and
you will be paid the amounts set forth under Article 5 of

39
<PAGE>

the Rehabilitation Agreement after the receipt of the signed certificate by
[Reinsurer].

IN WITNESS WHEREOF, [Reinsurer] has caused this Assumption Certificate to
be signed by its duly authorized officer this the _____ day of __________,
199__.

[Reinsurer]

By ____________________________________
Name:
Title:

ATTEST:

______________________________
Name:
Title:

40
<PAGE>

RESPONSE CARD

_____ Yes, I approve the transfer of my policy [contract] from First
Capital Life Insurance Company to [Reinsurer].

_____ No, I reject the proposed transfer of my policy [contract] from
First Capital Life Insurance Company to [Reinsurer] and wish to cancel
my policy [contract] and receive the payment provided for pursuant to
Article 5 of the Rehabilitation Agreement.

__________ ____________________________________________
[Date] [Signature]

Name: ____________________________________________

Address: ____________________________________________

City, State, Zip: ____________________________________________

41
<PAGE>

SCHEDULE 16.1(a)

42
<PAGE>

SCHEDULE 16.1(b)

43
<PAGE>

SCHEDULE 16.3

44
<PAGE>

SCHEDULE 17.3

<PAGE>

EXHIBIT 99.9

Opinion and Consent of General Counsel of Pacific Life

<PAGE>

[Letterhead of Pacific Life]

October 30, 1997

Pacific Life Insurance Company
700 Newport Center Drive
Newport Beach, California 92660

Dear Sirs:

In my capacity as General Counsel of Pacific Life Insurance Company ("Pacific
Life"), I have supervised the acquisition of Pacific Corinthian Variable
Separate Account of Pacific Corinthian Life Insurance Company on October 30,
1997, pursuant to the authority of the resolution of the Board of Directors of
Pacific Mutual Life Insurance Company ("Pacific Mutual") dated July 28, 1992
concerning the Merger of Pacific Corinthian Life Insurance Company into Pacific
Mutual. Moreover, I have been associated with the preparation of the
Registration Statement on Form N-4 ("registration statement") filed by Pacific
Mutual and Pacific Corinthian Variable Separate Account with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, for the
registration of interests in the variable annuity contracts to be funded by the
Pacific Corinthian Variable Separate Account (the "Variable Contracts").

I have made such examination of the law and examined such corporate records and
such other documents as in my judgment are necessary and appropriate to enable
me to render the following opinion that:

1. Pacific Life has been duly organized under the laws of the State of
California and is a validly existing stock life insurance company.

2. Pacific Corinthian Variable Separate Account is duly created and
validly existing as a separate account pursuant to the provisions of
Section 10506 of the Insurance Code of the State of California.

3. The portion of the assets to be held in Pacific Corinthian Variable
Separate Account equal to the reserves and other liabilities under the
Variable Contracts is not chargeable with liabilities arising out of
any other business Pacific Life may conduct.

4. The Variable Contracts have been duly authorized by Pacific Life and
constitute legal, validly issued, and binding obligations of Pacific
Life, except as limited by bankruptcy or insolvency laws affecting the
rights of creditors generally.

I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement.

Very truly yours,
/s/ DAVID R. CARMICHAEL
- -----------------------
David R. Carmichael
General Counsel

<PAGE>

EXHIBIT 99.10(a)

Consent of Independent Auditors

<PAGE>

[LETTERHEAD OF DELOITTE & TOUCHE LLP]

INDEPENDENT AUDITORS' CONSENT

Pacific Mutual Life Insurance Company:

We hereby consent to the use in the Registration Statement of Pacific Corinthian
Variable Separate Account of Pacific Life Insurance Company (formerly Pacific
Mutual Life Insurance Company) on Form N-4 of our report dated February 22, 1997
related to Pacific Mutual Life Insurance Company's consolidated financial
statements as of December 31, 1996 and 1995 and for each of the three years
in the period ended December 31, 1996, which is included in the Statement of
Additional Information of such Registration Statement.

We also consent to the incorporation by reference of our report dated February
14, 1997 related to Pacific Corinthian Variable Separate Account's financial
statements as of December 31, 1996 and 1995 and for each of the two years then
ended; to the reference to us under the heading "Financial Statements" in the
Statement of Additional Information; and to the reference to us under the
heading "Financial Highlights" in the Prospectus for Pacific Corinthian Variable
Annuity, which are part of such Registration Statement.

/s/ DELOITTE & TOUCHE LLP

October 30, 1997

<PAGE>

EXHIBIT 99.10(b)

Consent of Dechert Price & Rhoads

<PAGE>

[Letterhead of Dechert Price & Rhoads]

October 29, 1997

Board of Directors
Pacific Life Insurance Company
700 Newport Center Drive
Newport Beach, California 92660

Re: Registration Statement on Form N-4 for Interests in Pacific Corinthian
Variable Separate Account of Pacific Life Insurance Company under the
Pacific Corinthian Variable Annuity Contract

Dear Sirs and Madams:

We hereby consent to the reference to our firm in the Prospectus comprising
a part of the above-referenced Registration Statement.

Very truly yours,

/s/ DECHERT PRICE & RHOADS

<PAGE>

EXHIBIT 99.13

Performance Calculations

<PAGE>

EXHIBIT 13

PACIFIC CORINTHIAN VARIABLE ANNUITY ACCOUNTS FUND AND SURRENDER VALUES

MONEY MARKET

VALUATION DATE: 30 JUN 1997
INCEPTION DATE: 3 JAN 1995

<TABLE>

<S> <C> <C>
FUND INCEPT: 3.91 FUND 3 YEAR: 99.99
SEX/AGE: M40 CSV INCEPT: 2.76 CSV 3 YEAR: 99.99
MORTALITY RATE: NO MORT CHARGE FUND ANNUAL: 3.77 FUND 5 YEAR: 99.99
INITIAL INVESTMENT: 25000 CSV ANNUAL: 0.03 CSV 5 YEAR: 99.99
INITIAL DEATH BENEFIT: 0 FUND CALEND: 1.92 FUND 10 YEAR: 99.99
DB OPTION: X PREMS FROM INCEPT: CSV CALEND: -2.73 CSV 10 YEAR: 99.99

**************INCEPTION*************** ************INCEPTION************** ***************INCEPTION*************

FUND FUND FUND
DATE VALUE CSV DATE VALUE CSV DATE VALUE CSV

3 JAN 1995 25,000.00 23,875.00 28 JUN 1996 25,000.00 23,875.00 31 DEC 1996 25,000.00 23,875.00
2 JAN 1996 26,040.26 25,102.81 31 JUL 1996 25,084.05 23,952.56 31 JAN 1997 25,080.47 23,949.30
2 JAN 1997 26,997.64 26,268.71 30 AUG 1996 25,160.87 24,023.45 28 FEB 1997 25,152.62 24,015.91
3 FEB 1997 27,086.45 26,352.49 30 SEP 1996 25,239.85 24,096.33 31 MAR 1997 25,231.79 24,088.96
3 MAR 1997 27,164.24 26,425.87 31 OCT 1996 25,319.22 24,169.59 30 APR 1997 25,312.93 24,163.98

1 APR 1997 27,244.54 26,501.62 29 NOV 1996 25,393.91 24,238.52 30 MAY 1997 25,395.60 24,240.47
1 MAY 1997 27,332.15 26,584.40 31 DEC 1996 25,482.74 24,320.73 30 JUN 1997 25,479.34 24,317.89
2 JUN 1997 27,426.81 26,673.88 31 JAN 1997 25,564.76 24,396.51
30 JUN 1997 27,508.84 26,751.39 28 FEB 1997 25,638.31 24,464.45
31 MAR 1997 25,719.00 24,538.96

30 APR 1997 25,801.71 24,615.48
30 MAY 1997 25,885.97 24,693.49
30 JUN 1997 25,941.33 25,007.44
</TABLE>
<PAGE>

PACIFIC CORINTHIAN VARIABLE ANNUITY ACCOUNTS FUND AND SURRENDER VALUES

HIGH YIELD BOND

VALUATION DATE: 30 JUN 1997
INCEPTION DATE: 3 FEB 1995

<TABLE>

<S> <C> <C>
FUND INCEPT: 12.18 FUND 3 YEAR: 99.99
SEX/AGE: M40 CSV INCEPT: 11.10 CSV 3 YEAR: 99.99
MORTALITY RATE: NO MORT CHARGE FUND ANNUAL: 12.74 FUND 5 YEAR: 99.99
INITIAL INVESTMENT: 25000 CSV ANNUAL: 8.74 CSV 5 YEAR: 99.99
INITIAL DEATH BENEFIT: 0 FUND CALEND: 4.35 FUND 10 YEAR: 99.99
DB OPTION: X PREMS FROM INCEPT: CSV CALEND: -0.41 CSV 10 YEAR: 99.99

***************INCEPTION*************** ***************INCEPTION*************** *************INCEPTION***************

FUND FUND FUND
DATE VALUE CSV DATE VALUE CSV DATE VALUE CSV

3 FEB 1995 25,000.00 23,875.00 28 JUN 1996 25,000.00 23,875.00 31 DEC 1996 25,000.00 23,875.00
5 FEB 1996 29,357.34 28,357.34 31 JUL 1996 25,157.03 24,022.25 31 JAN 1997 25,200.55 24,063.98
3 FEB 1997 31,892.08 31,142.08 30 AUG 1996 25,566.08 24,410.43 28 FEB 1997 25,560.24 24,405.18
3 MAR 1997 32,246.77 31,494.47 30 SEP 1996 26,055.20 24,874.99 31 MAR 1997 25,156.77 24,017.32
3 APR 1997 31,599.07 30,844.22 31 OCT 1996 26,229.03 25,038.45 30 APR 1997 25,239.68 24,094.03

5 MAY 1997 32,010.17 31,252.69 29 NOV 1996 26,750.76 25,534.32 30 MAY 1997 25,737.77 24,567.24
3 JUN 1997 32,614.84 31,854.98 31 DEC 1996 27,039.90 25,807.82 30 JUN 1997 26,087.43 24,898.62
30 JUN 1997 32,964.94 32,202.86 31 JAN 1997 27,256.81 26,012.42
28 FEB 1997 27,645.85 26,381.65
31 MAR 1997 27,209.47 25,962.35

30 APR 1997 27,299.14 26,045.53
30 MAY 1997 27,837.86 26,560.25
30 JUN 1997 28,186.06 27,186.06

</TABLE>
<PAGE>

PACIFIC CORINTHIAN VARIABLE ANNUITY ACCOUNTS FUND AND SURRENDER VALUES

MANAGED BOND

VALUATION DATE: 30 JUN 1997
INCEPTION DATE: 20 JAN 1995

<TABLE>

<S> <C> <C>
FUND INCEPT: 8.65 FUND 3 YEAR: 99.99
SEX/AGE: M40 CSV INCEPT: 7.53 CSV 3 YEAR: 99.99
MORTALITY RATE: NO MORT CHARGE FUND ANNUAL: 7.12 FUND 5 YEAR: 99.99
INITIAL INVESTMENT: 25000 CSV ANNUAL: 3.26 CSV 5 YEAR: 99.99
INITIAL DEATH BENEFIT: 0 FUND CALEND: 2.07 FUND 10 YEAR: 99.99
DB OPTION: X PREMS FROM INCEPT: CSV CALEND: -2.59 CSV 10 YEAR: 99.99

*************INCEPTION**************** *************INCEPTION*************** **************INCEPTION***************

FUND FUND FUND
DATE VALUE CSV DATE VALUE CSV DATE VALUE CSV

20 JAN 1995 25,000.00 23,875.00 28 JUN 1996 25,000.00 23,875.00 31 DEC 1996 25,000.00 23,875.00
22 JAN 1996 29,278.72 28,278.72 31 JUL 1996 24,990.15 23,862.88 31 JAN 1997 25,060.09 23,929.84
20 JAN 1997 29,895.03 29,145.03 30 AUG 1996 24,921.52 23,794.88 28 FEB 1997 25,081.95 23,948.41
20 FEB 1997 30,406.77 29,654.22 30 SEP 1996 25,468.71 24,314.90 31 MAR 1997 24,710.62 23,591.24
20 MAR 1997 29,858.28 29,103.43 31 OCT 1996 26,073.34 24,889.76 30 APR 1997 25,084.67 23,946.00

21 APR 1997 29,794.26 29,036.78 29 NOV 1996 26,599.93 25,390.27 30 MAY 1997 25,266.01 24,116.71
20 MAY 1997 30,245.24 29,485.38 31 DEC 1996 26,267.15 25,069.84 30 JUN 1997 25,516.38 24,353.27
20 JUN 1997 30,783.73 30,021.31 31 JAN 1997 26,330.29 25,127.59
30 JUN 1997 30,616.27 29,853.03 28 FEB 1997 26,353.25 25,147.21
31 MAR 1997 25,963.10 24,772.07

30 APR 1997 26,356.11 25,144.93
30 MAY 1997 26,546.64 25,324.42
30 JUN 1997 26,779.70 25,815.63
</TABLE>
<PAGE>

PACIFIC CORINTHIAN VARIABLE ANNUITY ACCOUNTS FUND AND SURRENDER VALUES

GOVERNMENT SECURITIES

VALUATION DATE: 30 JUN 1997
INCEPTION DATE: 3 JAN 1995

<TABLE>
<S> <C> <C>
FUND INCEPT: 8.00 FUND 3 YEAR: 99.99
SEX/AGE: M40 CSV INCEPT: 6.90 CSV 3 YEAR: 99.99
MORTALITY RATE: NO MORT CHARGE FUND ANNUAL: 6.07 FUND 5 YEAR: 99.99
INITIAL INVESTMENT: 25000 CSV ANNUAL: 2.25 CSV 5 YEAR: 99.99
INITIAL DEATH BENEFIT: 0 FUND CALEND: 1.63 FUND 10 YEAR: 99.99
DB OPTION: X PREMS FROM INCEPT: CSV CALEND: -3.00 CSV 10 YEAR: 99.99

**************INCEPTION**************** *************INCEPTION*************** **************INCEPTION****************

FUND FUND FUND
DATE VALUE CSV DATE VALUE CSV DATE VALUE CSV

3 JAN 1995 25,000.00 23,875.00 28 JUN 1996 25,000.00 23,875.00 31 DEC 1996 25,000.00 23,875.00
2 JAN 1996 29,346.09 28,346.09 31 JUL 1996 24,995.07 23,867.58 31 JAN 1997 24,989.02 23,861.96
2 JAN 1997 29,639.51 28,889.51 30 AUG 1996 24,924.27 23,797.50 28 FEB 1997 24,980.92 23,851.93
3 FEB 1997 29,902.83 29,150.20 30 SEP 1996 25,364.07 24,214.96 31 MAR 1997 24,596.57 23,482.33
3 MAR 1997 29,746.20 28,991.27 31 OCT 1996 26,001.96 24,821.60 30 APR 1997 24,975.28 23,841.53

1 APR 1997 29,360.59 28,603.27 29 NOV 1996 26,488.60 25,283.96 30 MAY 1997 25,162.28 24,017.65
1 MAY 1997 29,820.40 29,060.62 31 DEC 1996 26,121.91 24,931.14 30 JUN 1997 25,408.07 24,249.83
2 JUN 1997 30,024.44 29,262.03 31 JAN 1997 26,110.44 24,917.63
30 JUN 1997 30,284.98 29,520.26 28 FEB 1997 26,101.98 24,907.25
31 MAR 1997 25,700.38 24,521.18

30 APR 1997 26,096.08 24,896.61
30 MAY 1997 26,291.47 25,080.74
30 JUN 1997 26,518.30 25,563.64

</TABLE>
<PAGE>

PACIFIC CORINTHIAN VARIABLE ANNUITY ACCOUNTS FUND AND SURRENDER VALUES

EQUITY INCOME

VALUATION DATE: 30 JUN 1997
INCEPTION DATE: 3 JAN 1995

<TABLE>

<S> <C> <C>
FUND INCEPT: 26.23 FUND 3 YEAR: 99.99
SEX/AGE: M40 CSV INCEPT: 25.35 CSV 3 YEAR: 99.99
MORTALITY RATE: NO MORT CHARGE FUND ANNUAL: 29.16 FUND 5 YEAR: 99.99
INITIAL INVESTMENT: 25000 CSV ANNUAL: 25.16 CSV 5 YEAR: 99.99
INITIAL DEATH BENEFIT: 0 FUND CALEND: 16.52 FUND 10 YEAR: 99.99
DB OPTION: X PREMS FROM INCEPT: CSV CALEND: 11.46 CSV 10 YEAR: 99.99

*************INCEPTION***************** *************INCEPTION*************** **************INCEPTION***************

FUND FUND FUND
DATE VALUE CSV DATE VALUE CSV DATE VALUE CSV

3 JAN 1995 25,000.00 23,875.00 28 JUN 1996 25,000.00 23,875.00 31 DEC 1996 25,000.00 23,875.00
2 JAN 1996 32,833.04 31,833.04 31 JUL 1996 23,835.39 22,760.08 31 JAN 1997 26,533.24 25,336.69
2 JAN 1997 38,221.53 37,471.53 30 AUG 1996 24,533.21 23,424.04 28 FEB 1997 26,639.65 25,436.01
3 FEB 1997 40,670.52 39,917.89 30 SEP 1996 25,617.33 24,456.83 31 MAR 1997 25,588.35 24,429.48
3 MAR 1997 41,053.31 40,298.38 31 OCT 1996 26,045.47 24,863.15 30 APR 1997 26,563.23 25,358.02

1 APR 1997 39,291.24 38,533.92 29 NOV 1996 28,199.29 26,936.64 30 MAY 1997 28,329.28 27,066.95
1 MAY 1997 40,753.56 39,993.78 31 DEC 1996 27,737.77 26,474.29 30 JUN 1997 29,130.72 27,865.85
2 JUN 1997 43,239.53 42,477.11 31 JAN 1997 29,438.92 28,171.08
30 JUN 1997 44,651.64 43,886.92 28 FEB 1997 29,556.98 28,286.84
31 MAR 1997 28,390.56 27,117.87

30 APR 1997 29,472.19 28,197.04
30 MAY 1997 31,431.65 30,154.03
30 JUN 1997 32,290.86 31,290.86

</TABLE>
<PAGE>

PACIFIC CORINTHIAN VARIABLE ANNUITY ACCOUNTS FUND AND SURRENDER VALUES

MULTI STRATEGY

VALUATION DATE: 30 JUN 1997
INCEPTION DATE: 3 JAN 1995
<TABLE>

<S> <C> <C>
FUND INCEPT: 17.83 FUND 3 YEAR: 99.99
SEX/AGE: M40 CSV INCEPT: 16.86 CSV 3 YEAR: 99.99
MORTALITY RATE: NO MORT CHARGE FUND ANNUAL: 18.31 FUND 5 YEAR: 99.99
INITIAL INVESTMENT: 25000 CSV ANNUAL: 14.31 CSV 5 YEAR: 99.99
INITIAL DEATH BENEFIT: 0 FUND CALEND: 9.43 FUND 10 YEAR: 99.99
DB OPTION: X PREMS FROM INCEPT: CSV CALEND: 4.44 CSV 10 YEAR: 99.99

*************INCEPTION***************** *************INCEPTION*************** ****************INCEPTION****************

FUND FUND FUND
DATE VALUE CSV DATE VALUE CSV DATE VALUE CSV

3 JAN 1995 25,000.00 23,875.00 28 JUN 1996 25,000.00 23,875.00 31 DEC 1996 25,000.00 23,875.00
2 JAN 1996 31,124.68 30,124.68 31 JUL 1996 24,418.17 23,316.64 31 JAN 1997 25,794.23 24,630.94
2 JAN 1997 34,248.07 33,498.07 30 AUG 1996 24,781.81 23,661.45 28 FEB 1997 25,855.55 24,687.20
3 FEB 1997 35,535.22 34,782.59 30 SEP 1996 25,562.14 24,404.12 31 MAR 1997 25,182.31 24,041.71
3 MAR 1997 35,637.82 34,882.89 31 OCT 1996 26,088.93 24,904.65 30 APR 1997 25,826.19 24,654.15

1 APR 1997 34,674.18 33,916.86 29 NOV 1996 27,451.03 26,203.08 30 MAY 1997 26,798.96 25,580.68
1 MAY 1997 35,562.46 34,802.68 31 DEC 1996 27,056.66 25,823.82 30 JUN 1997 27,357.02 26,111.08
2 JUN 1997 36,790.75 36,028.33 31 JAN 1997 27,916.22 26,648.39
30 JUN 1997 37,618.58 36,853.87 28 FEB 1997 27,982.59 26,712.45
31 MAR 1997 27,253.97 26,004.85

30 APR 1997 27,950.81 26,675.66
30 MAY 1997 29,003.61 27,726.00
30 JUN 1997 29,577.59 28,577.59
</TABLE>
<PAGE>

PACIFIC CORINTHIAN VARIABLE ANNUITY ACCOUNTS FUND AND SURRENDER VALUES

INTERNATIONAL

VALUATION DATE: 30 JUN 1997
INCEPTION DATE: 19 JAN 1995
<TABLE>
<S> <C> <C>
FUND INCEPT: 18.14 FUND 3 YEAR: 99.99
SEX/AGE: M40 CSV INCEPT: 17.16 CSV 3 YEAR: 99.99
MORTALITY RATE: NO MORT CHARGE FUND ANNUAL: 24.28 FUND 5 YEAR: 99.99
INITIAL INVESTMENT: 25000 CSV ANNUAL: 20.28 CSV 5 YEAR: 99.99
INITIAL DEATH BENEFIT: 0 FUND CALEND: 13.42 FUND 10 YEAR: 99.99
DB OPTION: X PREMS FROM INCEPT: CSV CALEND: 8.36 CSV 10 YEAR: 99.99

***************INCEPTION*************** *************INCEPTION*************** ************INCEPTION**************

FUND FUND FUND
DATE VALUE CSV DATE VALUE CSV DATE VALUE CSV

19 JAN 1995 25,000.00 23,875.00 28 JUN 1996 25,000.00 23,875.00 31 DEC 1996 25,000.00 23,875.00
19 JAN 1996 28,117.93 27,117.93 31 JUL 1996 24,239.12 23,145.65 31 JAN 1997 25,503.77 24,353.56
20 JAN 1997 34,136.24 33,386.24 30 AUG 1996 25,039.43 23,907.47 28 FEB 1997 25,813.31 24,646.86
19 FEB 1997 34,428.54 33,676.07 30 SEP 1996 25,388.08 24,237.89 31 MAR 1997 26,046.32 24,866.84
19 MAR 1997 34,083.18 33,328.41 31 OCT 1996 25,771.53 24,601.54 30 APR 1997 25,953.57 24,775.80

21 APR 1997 34,158.87 33,401.39 29 NOV 1996 26,947.60 25,722.30 30 MAY 1997 27,075.96 25,845.21
19 MAY 1997 35,940.00 35,180.21 31 DEC 1996 27,420.91 26,171.68 30 JUN 1997 28,354.87 27,090.00
19 JUN 1997 37,444.17 36,681.84 31 JAN 1997 27,973.47 26,705.63
30 JUN 1997 37,590.85 36,827.62 28 FEB 1997 28,312.97 27,042.84
31 MAR 1997 28,568.55 27,295.86

30 APR 1997 28,466.82 27,191.67
30 MAY 1997 26,697.90 28,420.28
30 JUN 1997 31,070.66 30,070.66
</TABLE>
<PAGE>

PACIFIC CORINTHIAN VARIABLE ANNUITY ACCOUNTS FUND AND SURRENDER VALUES

EQUITY INDEX

VALUATION DATE: 30 JUN 1997
INCEPTION DATE: 20 JAN 1995

<TABLE>
<S> <C> <C>
FUND INCEPT: 30.81 FUND 3 YEAR: 99.99
SEX/AGE: M40 CSV INCEPT: 29.96 CSV 3 YEAR: 99.99
MORTALITY RATE: NO MORT CHARGE FUND ANNUAL: 32.88 FUND 5 YEAR: 99.99
INITIAL INVESTMENT: 25000 CSV ANNUAL: 28.88 CSV 5 YEAR: 99.99
INITIAL DEATH BENEFIT: 0 FUND CALEND: 19.76 FUND 10 YEAR: 99.99
DB OPTION: X PREMS FROM INCEPT: CSV CALEND: 14.70 CSV 10 YEAR: 99.99

**************INCEPTION*************** *************INCEPTION*************** *************INCEPTION***************

FUND FUND FUND
DATE VALUE CSV DATE VALUE CSV DATE VALUE CSV

20 JAN 1995 25,000.00 23,875.00 28 JUN 1996 25,000.00 23,875.00 31 DEC 1996 25,000.00 23,875.00
22 JAN 1996 33,165.31 32,165.31 31 JUL 1996 23,917.84 22,838.83 31 JAN 1997 26,534.66 25,338.05
20 JAN 1997 42,205.45 41,455.45 30 AUG 1996 24,387.79 23,285.16 28 FEB 1997 26,704.06 25,497.52
20 FEB 1997 43,639.82 42,887.27 30 SEP 1996 25,729.03 24,563.50 31 MAR 1997 25,570.28 24,412.22
20 MAR 1997 42,563.57 41,808.72 31 OCT 1996 26,406.63 25,208.06 30 APR 1997 27,077.60 25,849.25

21 APR 1997 41,362.97 40,605.49 29 NOV 1996 28,369.29 27,106.63 30 MAY 1997 28,697.19 27,434.86
20 MAY 1997 45,830.89 45,071.02 31 DEC 1996 27,763.26 26,498.63 30 JUN 1997 29,939.88 28,675.01
20 JUN 1997 48,937.82 48,175.41 31 JAN 1997 29,467.54 28,199.71
30 JUN 1997 48,197.11 47,433.88 28 FEB 1997 29,655.67 28,385.53
31 MAR 1997 28,396.58 27,123.89

30 APR 1997 30,070.50 28,795.35
30 MAY 1997 31,869.11 30,591.49
30 JUN 1997 33,219.15 32,219.15
</TABLE>
<PAGE>

PACIFIC CORINTHIAN VARIABLE ANNUITY ACCOUNTS FUND AND SURRENDER VALUES

GROWTH LT

VALUATION DATE: 30 JUN 1997
INCEPTION DATE: 20 JAN 1995
<TABLE>

<S> <C> <C>
FUND INCEPT: 20.87 FUND 3 YEAR: 99.99
SEX/AGE: M40 CSV INCEPT: 19.92 CSV 3 YEAR: 99.99
MORTALITY RATE: NO MORT CHARGE FUND ANNUAL: 9.68 FUND 5 YEAR: 99.99
INITIAL INVESTMENT: 25000 CSV ANNUAL: 5.73 CSV 5 YEAR: 99.99
INITIAL DEATH BENEFIT: 0 FUND CALEND: 4.71 FUND 10 YEAR: 99.99
DB OPTION: X PREMS FROM INCEPT: CSV CALEND: -0.06 CSV 10 YEAR: 99.99

************INCEPTION***************** ************INCEPTION***************** **************INCEPTION***************

FUND FUND FUND
DATE VALUE CSV DATE VALUE CSV DATE VALUE CSV

20 JAN 1995 25,000.00 23,875.00 28 JUN 1996 25,000.00 23,875.00 31 DEC 1996 25,000.00 23,875.00
22 JAN 1996 32,210.22 31,210.22 31 JUL 1996 22,868.29 21,836.50 31 JAN 1997 26,073.92 24,898.04
20 JAN 1997 39,805.93 39,055.93 30 AUG 1996 24,560.72 23,450.31 28 FEB 1997 24,823.44 23,701.54
20 FEB 1997 38,438.70 37,686.15 30 SEP 1996 26,182.06 24,996.14 31 MAR 1997 23,251.21 22,197.51
20 MAR 1997 36,481.30 35,726.45 31 OCT 1996 25,527.94 24,368.91 30 APR 1997 23,621.14 22,548.33

21 APR 1997 34,108.58 33,351.10 29 NOV 1996 26,394.45 25,194.04 30 MAY 1997 25,300.02 24,149.19
20 MAY 1997 38,041.93 37,282.06 31 DEC 1996 26,216.20 25,021.18 30 JUN 1997 26,176.78 24,983.95
20 JUN 1997 39,498.93 38,736.52 31 JAN 1997 27,342.36 26,094.12
30 JUN 1997 39,732.83 38,969.60 28 FEB 1997 26,031.05 24,839.52
31 MAR 1997 24,382.33 23,262.44

30 APR 1997 24,770.26 23,630.45
30 MAY 1997 26,530.82 25,309.32
30 JUN 1997 27,420.23 26,433.10
</TABLE>
<PAGE>

PACIFIC CORINTHIAN VARIABLE ANNUITY ACCOUNTS FUND AND SURRENDER VALUES

EQUITY

VALUATION DATE: 30 JUN 1997
INCEPTION DATE: 3 JAN 1995
<TABLE>

<S> <C> <C>
FUND INCEPT: 25.40 FUND 3 YEAR: 99.99
SEX/AGE: M40 CSV INCEPT: 24.52 CSV 3 YEAR: 99.99
MORTALITY RATE: NO MORT CHARGE FUND ANNUAL: 15.76 FUND 5 YEAR: 99.99
INITIAL INVESTMENT: 25000 CSV ANNUAL: 11.76 CSV 5 YEAR: 99.99
INITIAL DEATH BENEFIT: 0 FUND CALEND: 12.78 FUND 10 YEAR: 99.99
DB OPTION: X PREMS FROM INCEPT: CSV CALEND: 7.72 CSV 10 YEAR: 99.99

***************INCEPTION*************** ***************INCEPTION************* *************INCEPTION****************

FUND FUND FUND
DATE VALUE CSV DATE VALUE CSV DATE VALUE CSV

3 JAN 1995 25,000.00 23,875.00 28 JUN 1996 25,000.00 23,875.00 31 DEC 1996 25,000.00 23,875.00
2 JAN 1996 30,891.15 29,891.15 31 JUL 1996 22,724.09 21,698.79 31 JAN 1997 27,431.21 26,194.26
2 JAN 1997 38,501.28 37,751.28 30 AUG 1996 23,749.92 22,675.99 28 FEB 1997 26,304.81 25,116.24
3 FEB 1997 42,663.31 41,910.68 30 SEP 1996 25,549.09 24,391.65 31 MAR 1997 25,162.21 24,022.51
3 MAR 1997 41,169.55 40,414.62 31 OCT 1996 25,291.18 24,142.80 30 APR 1997 25,956.90 24,778.98

1 APR 1997 39,304.00 38,546.69 29 NOV 1996 26,855.96 25,634.79 30 MAY 1997 27,118.86 25,886.18
1 MAY 1997 40,383.30 39,623.51 31 DEC 1996 25,687.43 24,516.20 30 JUN 1997 28,195.36 26,930.48
2 JUN 1997 42,148.98 41,386.57 31 JAN 1997 28,185.49 26,917.65
30 JUN 1997 43,928.81 43,164.10 28 FEB 1997 27,028.11 25,791.71
31 MAR 1997 25,854.10 24,667.98

30 APR 1997 26,670.64 25,445.31
30 MAY 1997 27,864.55 26,586.93
30 JUN 1997 28,940.65 27,940.65

</TABLE>
<PAGE>

PACIFIC CORINTHIAN VARIABLE ANNUITY ACCOUNTS FUND AND SURRENDER VALUES

BOND

VALUATION DATE: 30 JUN 1997
INCEPTION DATE: 3 JAN 1995

<TABLE>

<S> <C> <C>
FUND INCEPT: 11.80 FUND 3 YEAR: 99.99
SEX/AGE: M40 CSV INCEPT: 10.75 CSV 3 YEAR: 99.99
MORTALITY RATE: NO MORT CHARGE FUND ANNUAL: 7.96 FUND 5 YEAR: 99.99
INITIAL INVESTMENT: 25000 CSV ANNUAL: 4.07 CSV 5 YEAR: 99.99
INITIAL DEATH BENEFIT: 0 FUND CALEND: 1.56 FUND 10 YEAR: 99.99
DB OPTION: X PREMS FROM INCEPT: CSV CALEND: -3.07 CSV 10 YEAR: 99.99

***************INCEPTION*************** ***************INCEPTION*************** **************INCEPTION***************

FUND FUND FUND
DATE VALUE CSV DATE VALUE CSV DATE VALUE CSV

3 JAN 1995 25,000.00 23,875.00 28 JUN 1996 25,000.00 23,875.00 31 DEC 1996 25,000.00 23,875.00
2 JAN 1996 33,154.20 32,154.20 31 JUL 1996 24,920.56 23,796.42 31 JAN 1997 24,762.50 23,645.64
2 JAN 1997 32,094.99 31,344.99 30 AUG 1996 24,541.40 23,431.86 28 FEB 1997 24,843.81 23,720.99
3 FEB 1997 32,436.05 31,683.42 30 SEP 1996 25,232.94 24,089.73 31 MAR 1997 24,133.22 23,039.83
3 MAR 1997 32,202.01 31,447.08 31 OCT 1996 26,285.54 25,092.42 30 APR 1997 24,641.49 23,522.76

1 APR 1997 31,422.87 30,665.56 29 NOV 1996 27,304.68 26,063.31 30 MAY 1997 24,877.45 23,745.64
1 MAY 1997 32,140.88 31,381.10 31 DEC 1996 26,604.29 25,391.81 30 JUN 1997 25,389.52 24,232.12
2 JUN 1997 32,406.61 31,644.20 31 JAN 1997 26,351.55 25,147.89
30 JUN 1997 33,003.31 32,238.60 28 FEB 1997 26,438.08 25,228.23
31 MAR 1997 25,681.89 24,503.52

30 APR 1997 26,222.77 25,017.59
30 MAY 1997 26,473.88 25,254.94
30 JUN 1997 26,988.81 26,017.21
</TABLE>

<PAGE>

EXHIBIT 99.15

Powers of Attorney

<PAGE>

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature appears
below constitutes and appoints David R. Carmichael, Sharon A. Cheever, Diane N.
Ledger, Jeffrey S. Puretz and Robin Yonis-Sandlaufer his/her true and lawful
attorney-in-fact and agent, each with full power of substitution and
resubstitution for him/her in his/her name, place, and stead, in any all
Registration Statements applicable to the Pacific Corinthian Variable Separate
Account of Pacific Mutual Life Insurance Company, and any amendments or
supplements thereto, and to file the same, with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agent full power and authority to do and
perform each and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as he/she might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent, or his/her
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has subscribed to these presents this
9/th/ day of July, 1997.

/s/ TC SUTTON
Thomas C. Sutton
Chairman, Chief Executive Officer and Director
<PAGE>

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned has subscribed to these presents this
9/th/ day of July, 1997.

/s/ DONN B. MILLER
Donn B. Miller
Director
<PAGE>

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned has subscribed to these presents this
10/th/ day of July, 1997.

/s/ CHARLES D. MILLER
Charles D. Miller
Director
<PAGE>

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned has subscribed to these presents this
10/th/ day of July, 1997.

/s/ ALLEN W. MATHIES JR.
Allen W. Mathies, Jr. M.D.
Director
<PAGE>

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned has subscribed to these presents this
10/th/ day of July, 1997.

/s/ RICHARD M. FERRY
Richard M. Ferry
Director
<PAGE>

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned has subscribed to these presents this
10/th/ day of July, 1997.

/s/ IGNACIO E. LOZANO, JR.
Ignacio E. Lozano, Jr.
Director
<PAGE>

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned has subscribed to these presents this
9/th/ day of July, 1997.

/s/ DONALD E. GUINN
Donald E. Guinn
Director
<PAGE>

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned has subscribed to these presents this
9/th/ day of July, 1997.

/s/ J. FERNANDO NIEBLA
J. Fernando Niebla
Director
<PAGE>

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned has subscribed to these presents this
10/th/ day of July, 1997.

/s/ CHARLES A. LYNCH
Charles A. Lynch
Director
<PAGE>

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned has subscribed to these presents this
10/th/ day of July, 1997.

/s/ JAMES R. UKROPINA
James R. Ukropina
Director
<PAGE>

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned has subscribed to these presents this
10/th/ day of July, 1997.

/s/ JACQUELINE C. MORBY
Jacqueline C. Morby
Director
<PAGE>

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned has subscribed to these presents this
9/th/ day of July, 1997.

/s/ RICHARD M. ROSENBERG
Richard M. Rosenberg
Director
<PAGE>

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned has subscribed to these presents this
10/th/ day of July, 1997.

/s/ EDWARD R. BYRD
Edward R. Byrd
Vice President and Controller
<PAGE>

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned has subscribed to these presents this
10/th/ day of July, 1997.

/s/ GLENN S. SCHAFER
Glenn S. Schafer
President and Director
<PAGE>

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned has subscribed to these presents this
15/th/ day of July, 1997.

/s/ SUSAN WESTERBERG PRAGER
Susan Westerberg Prager
Director
<PAGE>

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned has subscribed to these presents this
15/th/ day of July, 1997.

/s/ RAYMOND L. WATSON
Raymond L. Watson
Director