CANADA LIFE OF AMERICA VARIABLE ANNUITY ACCOUNT 2, 485APOS, 1996-03-01

CANADA LIFE OF AMERICA VARIABLE ANNUITY ACCOUNT 2
485APOS, 1996-03-01

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<PAGE> 1

As Filed with the Securities and Exchange Commission on March 1, 1996.

Registration No. 33-55890
811-7350

================================================================================
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. 5

and/or

Registration Statement Under the Investment Company Act of 1940 X
Amendment No. 7

CANADA LIFE OF AMERICA VARIABLE ANNUITY ACCOUNT 2
(Exact Name of Registrant)

CANADA LIFE INSURANCE COMPANY OF AMERICA
(Name of Depositor)

330 University Avenue
Toronto, Canada M5G 1R8
(Address of Depositor's Principal Executive Office)
Depositor's Telephone Number: (416) 597-1456

Roy W. Linden
330 University Avenue
Toronto, Canada M5G 1R8
(Name and Address of Agent for Service)

Copy to:
Stephen E. Roth, Esquire
Sutherland, Asbill, & Brennan
1275 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-2404

It is proposed that this filing will become effective:
__ immediately upon filing pursuant to paragraph (b)
__ on pursuant to paragraph (b)
__ 60 days after filing pursuant to paragraph (a)(i)
X on May 1, 1996 pursuant to paragraph (a)(i)
__
__ 75 days after filing pursuant to paragraph (a)(ii)
__ on pursuant to paragraph (a)(ii) of Rule 485

If appropriate check the following box:
__ this Post-Effective Amendment designates a new effective
date for a new effective date for a previously filed
Post-Effective Amendment.

Pursuant to Rule 24f.2(a)(1) under the Investment Company Act of 1940, the
Registrant has registered an indefinite number of shares. The Registrant will
file a Rule 24f-2 Notice by June 30, 1996 for its most recent fiscal year ended
December 31, 1995.

<PAGE> 2

CROSS REFERENCE SHEET
Pursuant to Rule 481(a)

Showing Location in Part A (Prospectus) and
Part B (Statement of Additional Information) of Registration
Statement of Information Required by Form N-4

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PART A

ITEM OF FORM N-4 PROSPECTUS CAPTION
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<S> <C> <C>
1. Cover Page Cover Page

2. Definitions DEFINITIONS

3. Synopsis SUMMARY

4. Condensed Financial Information FINANCIAL STATEMENTS

5. General Description of Registrant,
Depositor and Portfolio Companies

a. Depositor THE COMPANY
b. Registrant The Variable Account
c. Portfolio Company The Fund
d. Fund Prospectus The Fund
e. Voting Rights VOTING RIGHTS
f. Administrators N/A

6. Deductions and Expenses Charges Against the Policy, Variable Account, & Fund

a. General Charges Against the Policy, Variable Account, & Fund
Charges Against the Policy, Variable Account, & Fund -
b. Sales Load % Surrender Charge
c. Special Purchase Plan N/A
d. Commissions DISTRIBUTION OF POLICIES
e. Expenses - Registrant Charges Against the Policy, Variable Account, & Fund
Charges Against the Policy, Variable Account, & Fund -
f. Fund Expenses Other Charges Including Investment Management Fees
g. Organizational Expenses N/A

7. General Description of Variable
Annuity Contracts

DEFINITIONS - Owner , Joint Owner; Payment of Proceeds;
Payment Options;
a. Persons With Rights Partial Withdrawals; Other Policy Provisions; VOTING RIGHTS
b. (i) Allocation of Premium Payments Premiums

(ii)Transfers Transfers; Payment of Benefits, Partial Withdrawals, Cash
Surrenders, & Transfers - Postponement
(iii) Exchanges N/A
c. Changes Reserved Rights
d. Inquiries SUMMARY - Questions

</TABLE>

2
<PAGE> 3

<TABLE>
<S> <C>
8. Annuity Period Payment Options

9. Death Benefit Payment of Proceeds; Payment of Benefits, Partial Withdrawals,
Cash Surrenders, & Transfers - Postponement; Payment Options

10. Purchases and Contract Value
a. Purchases Premiums
b. Valuation Variable Account Value
c. Daily Calculation Variable Account Value
d. Underwriter DISTRIBUTION OF POLICIES

11. Redemptions

a. - By Owners Payment of Proceeds - Proceeds on Surrender; Partial
Withdrawals; Payment of Benefits, Partial Withdrawals, Cash
Surrenders, & Transfers - Postponement
- By Annuitant Payment of Proceeds - Proceeds on Death of Last Surviving
Annuitant Before Annuity Date or Maturity Date; Payment Options
b. Texas ORP RESTRICTIONS UNDER THE TEXAS OPTIONAL
RETIREMENT PROGRAM
c. Check Delay Payment of Benefits, Partial Withdrawals, Cash Surrenders, &
Transfers - Postponement
d. Lapse Premiums - Termination
e. Free Look Ten Day Right to Examine the Policy

12. Taxes Charges Against the Policy, Variable Account, & Fund - Taxes;
FEDERAL TAX STATUS

13. Legal Proceedings LEGAL PROCEEDINGS

14. Table of Contents of the STATEMENT OF ADDITIONAL INFORMATION TABLE OF
Statement of Additional CONTENTS
Information

PART B

ITEM OF FORM N-4 STATEMENT OF ADDITIONAL INFORMATION CAPTION
- ---------------- -------------------------------------------

15. Cover Page Cover Page

16. Table of Contents STATEMENT OF ADDITIONAL INFORMATION TABLE OF CONTENTS

17. General Information and History See Prospectus - THE COMPANY; THE VARIABLE ACCOUNT AND THE FUND

18. Services
a. Fees and Expenses of Registrant N/A
b. Management Contract N/A
c. Custodian SAFEKEEPING OF ACCOUNT ASSETS
d. Independent Public Accountant EXPERTS

</TABLE>

3
<PAGE> 4
e. Assets of Registrant SAFEKEEPING OF ACCOUNT ASSETS
f. Affiliated Persons N/A
g. Prinicpal Underwriter See Prospectus - DISTRIBUTION OF
POLICIES

19. Purchase of Securities Being Offered See Prospectus - DISTRIBUTION OF
POLICIES

20. Underwriter See Prospectus - DISTRIBUTION OF
POLICIES

21. Calculation of Performance Data CALCULATION OF YIELDS AND TOTAL
RETURNS

22. Annuity Payments See Prospectus - Payment Options

23. Financial Statements FINANCIAL STATEMENTS

<PAGE> 5

PART A

INFORMATION REQUIRED IN A PROSPECTUS

<PAGE> 6

CANADA LIFE INSURANCE COMPANY OF AMERICA

ADMINISTRATIVE OFFICE: 6201 POWERS FERRY ROAD, NW, ATLANTA, GEORGIA 30339

PHONE: 1-800-905-1959

PROSPECTUS

VARIABLE ANNUITY ACCOUNT 2

FLEXIBLE PREMIUM VARIABLE DEFERRED ANNUITY POLICY

This Prospectus describes the flexible premium variable deferred annuity policy
(the "policy") offered by Canada Life Insurance Company of America ("we,"
"our," or "us"), a stock life insurance company domiciled in Michigan which is
a wholly-owned subsidiary of The Canada Life Assurance Company. The policy is
designed for use in connection with retirement plans which may or may not
qualify for special federal income tax treatment.

The owner ("you") may allocate net premiums when paid and policy value among
the twelve sub-accounts of the Canada Life of America Variable Annuity Account
2 (the "Variable Account") and the Fixed Account. The Fixed Account is part of
our general account and may not be available in all states. Assets of each
sub-account are invested in a corresponding portfolio of Seligman Portfolios,
Inc. (the "Fund"), a Maryland corporation that is a diversified open-end
investment company which uses the investment management services of J. & W.
Seligman & Co. Incorporated, (the Global, Global Smaller Companies, Global
Technology and Global Growth Opportunities Portfolios use the sub-advisory
services of Seligman Henderson Co.). The Fund has twelve portfolios: Capital;
Cash Management; Common Stock; Fixed Income Securities; Income; Global;
Communications and Information; Frontier; Global Smaller Companies; High-Yield
Bond; Global Technology; and Global Growth Opportunities. The policy value
prior to the annuity date or maturity date, except for amounts in the Fixed
Account, will vary according to the investment performance of the portfolio of
the Fund in which your elected sub-accounts are invested. You bear the entire
investment risk on amounts allocated to the Variable Account.

This Prospectus sets forth basic information about the policy and the Variable
Account that a prospective investor ought to know before investing. Additional
information about the policy and the Variable Account is contained in the
Statement of Additional Information, which has been filed with the Securities
and Exchange Commission. The Statement of Additional Information is dated the
same date as this Prospectus and is incorporated herein by reference. The Table
of Contents for the Statement of Additional Information is on page __ of this
Prospectus. You may obtain a copy of the Statement of Additional Information
free of charge by writing or calling us at the address or phone number shown
above.

PLEASE READ THIS PROSPECTUS CAREFULLY AND KEEP IT FOR FUTURE REFERENCE. THIS
PROSPECTUS MUST BE ACCOMPANIED BY A CURRENT PROSPECTUS FOR THE FUND.

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

The date of this Prospectus is May 1, 1996

<PAGE> 7

TABLE OF CONTENTS

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PAGE
<S> <C>
DEFINITIONS................................................... 3
SUMMARY....................................................... 4
TABLE OF EXPENSES............................................. 8
CONDENSED FINANCIAL INFORMATION...............................10
THE COMPANY...................................................11
THE VARIABLE ACCOUNT AND THE FUND.............................11
The Variable Account........................................11
The Fund....................................................12
Capital Portfolio.....................................12
Cash Management Portfolio.............................12
Common Stock Portfolio................................12
Fixed Income Securities Portfolio.....................12
Income Portfolio......................................12
Global Portfolio......................................12
Communications and Information Portfolio..............13
Frontier Portfolio....................................13
Global Smaller Companies Portfolio....................13
High-Yield Bond Portfolio
Global Technology
Global Growth Opportunities Portfolio.................13
Reserved Rights.............................................14
Change in Investment Policy.................................14
DESCRIPTION OF ANNUITY POLICY.................................14
Ten Day Right to Examine the Policy.........................14
Premiums....................................................14
Initial Premium.......................................14
Additional Premiums...................................15
Wire Transmittal Privilege............................15
Electronic Data Transmission of
Application Information...........................15
Net Premium Allocation................................15
Termination...........................................16
Variable Account Value......................................16
Units.................................................16
Unit Value............................................16
Net Investment Factor.................................16
Transfers...................................................17
Transfer Privilege....................................17
Telephone Transfer Privilege..........................17
Dollar Cost Averaging Privilege.......................17
Restrictions on Transfers From
Fixed Account.....................................18
Transfer Processing Fee...............................18
Payment of Proceeds.........................................18
Proceeds..............................................18
Proceeds on Annuity Date or Maturity Date.............18
Proceeds on Surrender.................................19
Proceeds on Death Of Last Surviving
Annuitant Before Annuity Date or Maturity Date
(The Death Benefit)...............................19
Proceeds on Death of Any Owner Before or
After Annuity Date or Maturity Date...............20
Interest on Proceeds..................................20
Partial Withdrawals.........................................20
Systematic Withdrawal Privilege.......................21
Seligman Time Horizon Asset Allocation Strategy.........21
Portfolio Rebalancing.....................................22
Loans.....................................................22
Payment of Benefits, Partial Withdrawals, Cash
Surrenders, & Transfers - Postponement................23
Charges Against the Policy, Variable Account, & Fund........23
Surrender Charge......................................23
Policy Administration Charge..........................24
Daily Administration Fee..............................24
Transfer Processing Fee...............................24
Annualized Mortality and Expense Risk Charge..........24
Waiver of Surrender Charge............................25
Reduction or Elimination of Surrender Charges.........25
Reduction or Elimination of
Policy Administration Charge......................26
Taxes.................................................26
Other Charges Including Investment Management Fees....26
Payment Options.............................................27
Election of Options...................................27
Description of Options................................27
Payment Dates.........................................28
Age and Survival of Payee.............................28
Death of Payee........................................28
Other Policy Provisions.....................................28
Owner or Joint Owner..................................28
Beneficiary...........................................29
Written Notice........................................29
Periodic Reports......................................29
Assignment............................................29
Modification..........................................29
YIELDS AND TOTAL RETURNS......................................30
TAX DEFERRAL..................................................31
FEDERAL TAX STATUS............................................31
Introduction................................................31
The Company's Tax Status....................................32
Tax Status of the Policy....................................32
Diversification Requirements..........................32
Required Distributions................................32
Taxation of Annuities.......................................33
In General............................................33
Withdrawals/Distributions.............................33
Annuity Payments......................................33
Taxation of Death Benefit Proceeds....................34
Penalty Tax on Certain Withdrawals....................34
Transfers, Assignments, or Exchanges of a Policy............34
Withholding.................................................34
Multiple Policies...........................................34
Possible Tax Changes........................................35
Taxation of Qualified Plans.................................35
Individual Retirement Annuities and Simplified
Employee Pensions (SEP/IRAs)......................35
Minimum Distribution Requirements ("MDR") for IRAs....36
Corporate and Self-Employed (H.R.10 and Keogh)
Pension and Profit-Sharing Plans..................36
Deferred Compensation Plans...........................36
Tax-Sheltered Annuity Plans...........................36
Other Tax Consequences......................................36
RESTRICTIONS UNDER THE TEXAS OPTIONAL
RETIREMENT PROGRAM..........................................37
DISTRIBUTION OF POLICIES......................................37
LEGAL PROCEEDINGS.............................................37
VOTING RIGHTS.................................................37
FINANCIAL STATEMENTS..........................................38
STATEMENT OF ADDITIONAL INFORMATION TABLE
OF CONTENTS.................................................39
FIXED ACCOUNT.................................................40
Fixed Account Value.........................................40
APPENDIX A: STATE PREMIUM TAXES...............................41
</TABLE>

2
<PAGE> 8

DEFINITIONS

ADMINISTRATIVE OFFICE: Our office at the address shown on page one of the
Prospectus. This is our mailing address.

ANNUITANT: Any natural person whose life is used to determine the duration of
any payments made under a payment option involving life contingencies. The term
annuitant also includes any co-annuitant, a term used to refer to more than one
annuitant.

ANNUITY DATE: The date when the policy value will be applied under Payment
Option 1 , unless you have elected to receive a lump sum payment of the cash
surrender value, or Payment Option 2.

BENEFICIARY: The person to whom we will pay the proceeds payable on your death
or on the death of the last surviving annuitant.

CASH SURRENDER VALUE: The policy value less: 1) any applicable surrender
charge; and 2) the policy administration charge.

CO-ANNUITANT: A term used solely for the purpose of referring to more than one
annuitant. There is no other distinction between the terms annuitant and
co-annuitant. A co-annuitant: 1) is allowed but not required under a
nonqualified policy; and 2) is not allowed under a qualified policy, and any
designation of a co-annuitant under a qualified policy will be of no effect.

COMPANY: Canada Life Insurance Company of America.

DUE PROOF OF DEATH: Proof of death that is satisfactory to us. Such proof may
consist of: 1) a certified copy of the death certificate; or 2) a certified
copy of the decree of a court of competent jurisdiction as to the finding of
death.

EFFECTIVE DATE: The date the policy is effective is the date we accept your
application and apply your initial premium.

FIXED ACCOUNT: This account is part of our general account. This account is not
part of and does not depend on the investment performance of the Variable
Account.

FUND: Seligman Portfolios, Inc., a diversified open-end investment company that
offers shares in twelve portfolios of shares in which the corresponding
sub-accounts of the Variable Account are invested.

JOINT OWNER: A term used solely for the purpose of referring to more than one
owner. There is no other distinction between the terms owner and joint owner.

LAST SURVIVING ANNUITANT: The annuitant or co-annuitant that survives the
other.

MATURITY DATE: The first day of the month after any annuitant's 100th birthday.

NET PREMIUMS: The premium paid less any premium tax deducted in the year the
premium is paid.

NONQUALIFIED POLICY: A policy that is not a "qualified" policy under the
Internal Revenue Code of 1986, as amended (the "Code"). However, any increase
in policy value under a nonqualified policy is not taxable to the owner or
annuitant until received (tax deferred), subject to certain exceptions. See
"FEDERAL TAX STATUS" on page ___.

OWNER: The owner is entitled to exercise all rights and privileges provided the
owner in the policy. The term owner also includes any joint owner.

PAC: Pre-authorized check, including electronic fund transfers.

POLICY: One of the flexible premium variable deferred annuity policies offered
by this Prospectus.

POLICY VALUE: The sum of the Variable Account value and the Fixed Account
value.

<PAGE> 9

POLICY DATE, YEARS, MONTHS, and ANNIVERSARIES: Are measured from the policy
date shown in the "Policy Details" of the policy.

QUALIFIED POLICY: A policy that is issued in connection with plans that receive
special federal income tax treatment under sections 401, 403(a), 403(b), 408 or
457 of the Code. See "FEDERAL TAX STATUS" on page ___.

SUB-ACCOUNT: The Variable Account has twelve sub-accounts: Capital; Cash
Management; Common Stock; Fixed Income Securities; Income; Global;
Communications and Information; Frontier; Global Smaller Companies; High-Yield
Bond; Global Technology; and Global Growth Opportunities. The assets of these
sub-accounts are invested in the corresponding portfolio of the Fund.

UNIT: A unit is a measurement used in the determination of the policy's
Variable Account value before the annuity date or maturity date.

VALUATION DAY: Each day on which valuation of assets is required by applicable
law, which currently is each day the New York Stock Exchange is open for
trading, except for the business day after Thanksgiving and the business day
after Christmas which are days that we will be closed although the New York
Stock Exchange may be open for trading.

VALUATION PERIOD: The period that starts at the close of business on one
valuation day and ends at the close of business on the next succeeding
valuation day. The close of business is when the New York Stock Exchange closes
(usually at 4:00 P.M. Eastern Time).

VARIABLE ACCOUNT: The Canada Life of America Variable Annuity Account 2, which
is not part of our general account. The Variable Account has twelve
sub-accounts, the assets of which are invested in the corresponding portfolio
of the Fund.

WE, OUR, and US: Canada Life Insurance Company of America.

WRITTEN NOTICE: See the "Written Notice" provision on page ___ in the "Other
Policy Provisions" section of this Prospectus.

YOU or YOUR: The owner. See the definitions of "owner" and "joint owner" above.

SUMMARY

TEN DAY RIGHT TO EXAMINE POLICY

You have ten days after you receive the policy to decide if the policy meets
your needs (except in California you have 30 days if the Owner is age 60 or
over, and in Idaho and North Dakota you have 20 days), and if the policy does
not meet your needs to return the policy to our Administrative Office. We will
promptly return either the Policy Value (where allowed by law); or in states
which do not allow return of Policy Value, we will return the full premium
paid, without interest and less the amount of any partial withdrawals, within
seven days. When the policy is issued as an Individual Retirement Annuity,
during the first seven days of the ten day period, we will return all premiums
if this is greater than the amount otherwise payable.

PREMIUMS

The minimum initial premium is $5,000 ($2,000 if the Policy is an Individual
Retirement Annuity, but we reserve the right to lower or raise the minimum
premium for IRAs). However, the minimum initial premium is $100 ($50 if the
policy is an Individual Retirement Annuity) if submitted with a pre-authorized
check ("PAC") agreement. You may make additional premium payments during the
annuitant's lifetime and before the annuity date or maturity date. The minimum
additional premium is $1,000, or $100 per month if paid by PAC (or $50 per
month if paid by PAC if the Policy is an Individual Retirement Annuity). Our
prior approval is required before your total premiums paid exceed $1,000,000.
You may allocate your net premiums among the sub-accounts of the Variable
Account and the Fixed Account. See "Premiums" on page __.

<PAGE> 10

THE VARIABLE ACCOUNT

The Variable Account is a separate investment account consisting of twelve
sub-accounts. The policy value before the annuity date or maturity date, except
for amounts in the Fixed Account, will vary according to the investment
performance of the portfolios of the Fund in which your elected sub-accounts
are invested. See "The Variable Account" on page __.

THE FUND

The assets of each sub-account are invested in the corresponding portfolios of
the Fund. The Fund currently has twelve portfolios: Capital; Cash Management;
Common Stock; Fixed Income Securities; Income; Global; Communications and
Information; Frontier; Global Smaller Companies; High-Yield Bond; Global
Technology; and Global Growth Opportunities. The Fund is a diversified,
open-end investment company. See "The Fund" on page __.

THE FIXED ACCOUNT

The Fixed Account is not part of and does not depend on the investment
performance of the Variable Account. We credit interest to amounts in the Fixed
Account at a guaranteed minimum rate of 3% per annum, and we may credit a
higher current interest rate. See "Fixed Account" on page __.

TRANSFERS

You may transfer all or part of an amount in a sub-account or the Fixed Account
to another sub-account(s) or the Fixed Account, subject to certain
restrictions. See "Transfers" on page __.

DEATH BENEFIT

If we receive due proof of death of the last surviving annuitant before the
annuity date or maturity date ("such due proof"), we will pay the beneficiary a
death benefit.

THE FOLLOWING APPLIES ONLY TO CERTAIN POLICIES ISSUED ON OR AFTER MAY 1,
1996 AS APPLICABLE REGULATORY APPROVALS ARE OBTAINED IN THE JURISDICTION IN
WHICH THE POLICIES ARE OFFERED:

If we receive such due proof during the first five years, the death benefit
is the greater of:

1. the premiums paid, less: a) any partial withdrawals, including
applicable surrender charges; and b) any incurred taxes; or
2. the policy value on the date we receive due proof of the
annuitant's death.

If we receive such due proof after the first five policy years, the death
benefit is the greatest of:

1. item "1" above; or
2. item "2" above; or
3. the policy value at the end of the most recent 5 policy year
period preceding the date we receive due proof of the annuitant's
death, adjusted for any of the following items that occur after
such last 5 policy year period: a)less any partial withdrawals,
including applicable surrender charges; b) less any incurred
taxes; and c) plus any premiums paid. The 5 policy year periods
are measured from the policy date (i.e., 5, 10, 15, 20, etc.).

If on the date the policy was issued, all annuitants were attained age 80
or less, then after any annuitant attains age 81, the death benefit is the
greater of items "1" or "2" above, with no further step-ups in Death
Benefits occurring. However, if on the date the policy was issued, any
annuitant was attained age 81 or more, then the death benefit is the policy
value.

THE FOLLOWING APPLIES ONLY TO CONTRACTS ISSUED PRIOR TO MAY 1, 1996 OR SUCH
LATER DATE AS APPLICABLE REGULATORY APPROVALS ARE OBTAINED IN THE
JURISDICTION IN WHICH THE CONTRACTS ARE OFFERED.

If we receive such due proof during the first seven policy years, the death
benefit is the greater of:

<PAGE> 11

1. the premiums paid, less: a) any partial withdrawals, including
applicable surrender charges; and b) any incurred taxes; or

2. the policy value on the date we receive due proof of the
annuitant's death.

If we receive such due proof after the first seven policy years, the death
benefit is the greatest of:

1. item "1." above; or
2. item "2." above; or

3. the policy value at the end of the most recent 7 policy year
period preceding the date we receive due proof of the annuitant's
death, adjusted for any of the following items that occur after
such last 7 policy year period: a) less any partial withdrawals,
including applicable surrender charges; b) less any incurred
taxes; and c) plus any premiums paid. The 7 policy year periods
are measured from the policy date (i.e., 7, 14, 21, 28, etc.).
For policies issued from May 1, 1995 through April 30, 1996, no
further step-ups in Death Benefits will occur after any
annuitant's age of 80.

No death benefit is payable if the policy is surrendered before the last
surviving annuitant's death.

See "Proceeds on Death of Last Surviving Annuitant Before Annuity Date or
Maturity Date" on page __.

PARTIAL WITHDRAWALS AND CASH SURRENDERS

You may withdraw part or all of the cash surrender value at any time before the
earlier of the death of the last surviving annuitant, the annuity date or the
maturity date, subject to certain limitations. See "Partial Withdrawals" on
page __ and "Proceeds on Surrender" on page __. Partial withdrawals and cash
surrenders may be subject to federal income tax, including a penalty tax. See
"Federal Tax Status" on page ____.

POLICY CHARGES

No deduction for a sales charge is made when premiums are paid. However, a
surrender charge (contingent deferred sales charge) will be deducted when
certain partial withdrawals and cash surrenders are made. For the purpose of
determining if any surrender charge applies and the amount of such charge,
partial withdrawals and surrenders are taken according to these rules from
policy value attributable to premiums or investment earnings in the following
order:

<S> <C>
1. Up to 100% of positive investment earnings of each variable sub-account available
at the time the request is made, once a policy year, PLUS......................................................... None

2. Up to 100% of current policy year's interest on the FIXED ACCOUNT at the time the
request for surrender/withdrawal is made, once a policy year, PLUS............................................... None

3. Up to 10% of total premiums STILL SUBJECT TO A SURRENDER CHARGE, once a policy
year, PLUS....................................................................................................... None

4. Up to 100% of those premiums NOT SUBJECT TO A SURRENDER CHARGE, available
at any time....................................................................................................... None

5. Premiums subject to a surrender charge:
Policy Years Since Premium Was Paid
Less than 1................................................................................................... 6%
At least 1, but less than 2................................................................................... 6%
At least 2, but less than 3................................................................................... 5%
At least 3, but less than 4................................................................................... 5%
At least 4, but less than 5................................................................................... 4%
At least 5, but less than 6................................................................................... 3%
At least 6, but less than 7................................................................................... 2%
At least 7.................................................................................................. None
</TABLE>

See "Surrender Charge" on page __.

<PAGE> 12

We deduct a policy administration charge of $30 for the prior policy year on
each policy anniversary. If the policy value on the policy anniversary is
$75,000 or more, we will waive the policy administration charge for the prior
policy year. We will also deduct this charge for the current policy year if the
policy is surrendered for its cash surrender value, unless the surrender occurs
on the policy anniversary. See "Policy Administration Charge" on page __.

At each valuation period, we also deduct a daily administration fee at an
effective annual rate of 0.35% from the assets of the Variable Account. See
"Daily Administration Fee" on page __.

The first 12 transfers during each policy year are free under our current
Company policy, which we reserve the right to change. If our current policy
changes, we guarantee that we will provide at least four free transfers during
each policy year. We assess a $25 transfer fee for each additional transfer.
See "Transfer Processing Fee" on page __.

We deduct a mortality and expense risk charge at each valuation period from the
assets of the Variable Account at an effective annual rate of 1.25%. This
charge is not made after the annuity date or maturity date, or against any
amounts in the Fixed Account. See "Annualized Mortality and Expense Risk
Charge" on page __.

We will incur premium taxes in some jurisdictions relating to the policies.
Depending on the jurisdiction, we deduct any such taxes from either: a) the
premium when paid; or b) the policy value when it is applied under a payment
option, cash surrender value or partial withdrawal. See "Taxes" on page __.

Each portfolio of the Fund in which the Variable Account invests is responsible
for its own expenses. In addition, charges for investment management services
are charged daily from each portfolio of the Fund as a percentage of the
average net assets of the portfolios, as follows: 0.40% for Capital, Cash
Management (currently waived), Common Stock, Fixed Income Securities, and
Income; 0.75% for Communications and Information, and Frontier; 1.00% for
Global, Global Smaller Companies, Global Technology and Global Growth
Opportunities; and 0.50% for High-Yield Bond. See "Other Charges Including
Investment Management Fees" on page __ and the attached "PROSPECTUS FOR THE
FUND."

LOANS

ANNUITY DATE, MATURITY DATE AND PAYMENT OPTIONS

On the annuity date, we will apply the policy value under Payment Option 1,
unless you have elected to receive the cash surrender value in a lump sum, or
pursuant to a mutually agreed upon payment option, Payment Option 2. Payments
under these payment options do not depend on the Variable Account's investment
performance. The proceeds we will pay on the maturity date is the policy value.
The payment options are: . 1) Life Income; and 2) Mutual Agreement. See
"Payment Options" on page __.

OTHER POLICY PROVISIONS

For information concerning the owner, beneficiary, written notice, periodic
policy reports, assignment, and modification see "Other Policy Provisions" on
page __.

FEDERAL TAX STATUS

For a brief discussion of our current understanding of the federal tax laws
concerning us and the annuity policies we issue see "Federal Tax Status" on
page __.

QUESTIONS

We will be happy to answer your questions about the policy or our procedures.
Call or write to us at the phone number or address on page one. All inquiries
should include the policy number, and the names of the owner and the annuitant.

<PAGE> 13

TABLE OF EXPENSES

EXPENSE DATA

The following information regarding expenses assumes that the entire policy
value is in the Variable Account.

<TABLE>
<S> <C>
POLICYOWNER TRANSACTION EXPENSES

Sales load on purchase payments.............................................................. None

Maximum contingent deferred sales charge as a percentage of amount surrendered
(10% of total premiums still subject to a surrender charge are free of any sales load.
See "Policy Charges" on page ___)........................................................ 6.00%

Transfer fee
Current policy - First 12 transfers each policy year.....................................No fee
Guarantee - First 4 transfers each policy year:..........................................No fee
Each transfer thereafter:.................................................................. $25

POLICY ADMINISTRATION CHARGE

Per policy per policy year:................................................................... $30
(waived for the prior policy year if the policy value is $75,000 or more on the policy anniversary)

VARIABLE ACCOUNT ANNUAL EXPENSES
(as a percentage of account value)

Mortality and expense risk charges........................................................... 1.25%
Effective annual rate of daily administration fee............................................ 0.35%
Total Variable Account annual expenses....................................................... 1.60%
</TABLE>

SELIGMAN PORTFOLIOS, INC. (THE "FUND")
ANNUAL EXPENSES
(as a percentage of average net assets)

<TABLE>
<CAPTION>
OTHER EXPENSES
MANAGEMENT AFTER EXPENSE TOTAL ANNUAL
FEES REIMBURSEMENT* EXPENSES
---------- -------------- ------------
<S> <C> <C> <C>
Capital 0.40% 0.20% 0.60%
Cash Management 0.00% 0.00% 0.00%
Common Stock 0.40% 0.14% 0.54%
Fixed Income Securities 0.40% 0.20% 0.60%
Income 0.40% 0.20% 0.60%
Global 1.00% 0.40% 1.40%
Communications and Information 0.75% 0.20% 0.95%
Frontier 0.75% 0.20% 0.95%
Global Smaller Companies 1.00% 0.40% 1.40%
High-Yield Bond 0.50% 0.20% 0.70%
Global Technology 1.00% 0.40% 1.40%
Global Growth Opportunities 1.00% 0.40% 1.40%
</TABLE>

* The above table is intended to assist the policyowner in understanding the
costs and expenses that will be borne, under the policy, directly or
indirectly. These include the expenses of the Fund. The 0.00% following
"Management Fees" under Cash Management is based on the fact that the Manager,
in its sole discretion, waived its fee of 0.40% during 1995, and voluntarily
has agreed in 1996 to waive this fee. There is no assurance that the Manager
will continue this policy in the future. In the event that this waiver is
discontinued, this will be reflected in an updated prospectus. With respect to
all portfolios of the Fund except Global, Global Smaller Companies, Global
Technology and Global Growth Opportunities, the 0.20% (0.00% under Cash
Management) listed following "Other expenses after expense reimbursement" is
based on the fact that the Fund expenses, other than the management fee,
exceeding 0.20% (0.00% under Cash Management) will be reimbursed by the Fund's
Manager by voluntary agreement of the Manager. There is no assurance that the
Manager will continue this policy in the future. With respect to Global, Global
Smaller Companies, Global Technology and Global Growth

8
<PAGE> 14

Opportunities, the Sub-Advisor has agreed to reimburse annual expenses
(other than the management fee) that exceed 0.40% of average net assets. There
is no assurance that the Manager and the Sub-Advisor will continue this policy
in the future. In the event that any of these waivers and reimbursements are
discontinued, this will be reflected in an updated prospectus. Absent such a
reimbursement, the Fund's "Other Expenses" would be higher, and during 1995
would have been: Capital 0.31%; Cash Management 0.47%; Fixed Income Securities
0.59%; Income 0.25%; Global 2.40%; Frontier 0.62%; Global Smaller Companies
2.84%; and High-Yield Bond 3.88%. Expenses from May 1, 1995 to April 30, 1996
for Common Stock and Communications and Information did not exceed the
reimbursement level of 0.40%. The Global Technology and Global Growth
Opportunities Portfolios commenced operations on May 1, 1996. In the absence of
any expense reimbursement, the "Other Expenses" and "Total Annual Expenses" for
the Global Technology and Global Growth Opportunities Portfolios would be % and
%, and % and % respectively. The High-Yield Bond Portfolio commenced operations
on May 1, 1995.

The data with respect to the Fund's annual expenses have been provided to us by
the Fund and we have not independently verified such data.

See "Charges Against the Policy, Variable Account, and Fund," page ___, and the
Prospectus for the Fund. In addition to the expenses listed above, premium
taxes may be applicable, which currently range between 0.5% to 3.5%, according
to the jurisdiction. In many jurisdictions, there is no tax at all. See
Appendix A, State Premium Taxes.

EXAMPLES

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

1. If the policy is surrendered at the end of the applicable time period:

<TABLE>
<CAPTION>
SUB-ACCOUNT 1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
Capital $77 $114 $146 $255
Cash Management $70 $ 96 $115 $192
Common Stock $77 $114 $146 $255
Fixed Income Securities $77 $114 $146 $255
Income $77 $114 $146 $255
Global $84 $138 $186 $334
Communications and Information $80 $125 $164 $290
Frontier $80 $125 $164 $290
Global Smaller Companies $84 $138 $186 $334
High-Yield Bond $78 $117 $151 $266
Global Technology $84 $138 $186 $334
Global Growth Opportunities $84 $138 $186 $334
</TABLE>

2. If the policy is annuitized or not surrendered at the end of the
applicable time period:

<TABLE>
<CAPTION>
SUB-ACCOUNT 1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
Capital $23 $69 $119 $255
Cash Management $16 $51 $ 88 $192
Common Stock $23 $69 $119 $255
Fixed Income Securities $23 $69 $119 $255
Income $23 $69 $119 $255
Global $30 $93 $159 $334
Communications and Information $26 $80 $136 $290
Frontier $26 $80 $136 $290
Global Smaller Companies $30 $93 $159 $334
High-Yield Bond $24 $72 $124 $266
Global Technology $30 $93 $159 $334
Global Growth Opportunities $30 $93 $159 $334
</TABLE>

9
<PAGE> 15

The examples provided above assume that no transfer charges have been assessed.
The examples also reflect a policy administration charge of 0.02% of assets,
determined by dividing the total policy administration charge collected by the
total average net assets of the sub-accounts of the Variable Account.

THE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES, AND ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN. THE
ASSUMED 5% ANNUAL RETURN IS HYPOTHETICAL AND SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE ANNUAL RETURNS, WHICH MAY BE GREATER OR LESSER
THAN THE ASSUMED AMOUNT.

CONDENSED FINANCIAL INFORMATION

The following condensed financial information is derived from the financial
statements of the Variable Account. The data should be read in conjunction with
the financial statements, related notes and other financial information
included in the Statement of Additional Information. See the "FINANCIAL
STATEMENTS" section on page __ concerning financial statements contained in the
Statement of Additional Information.

The table below sets forth certain information regarding the sub-accounts for a
policy for the period from commencement of business operations on June 21, 1993
through December 31, 1995. Accumulation Unit Values will not be provided for
any date prior to the inception of the Variable Account. The Communications and
Information, Frontier and Global Smaller Companies commenced operations on
October 11, 1994. High-Yield Bond commenced operations on May 1, 1995. No
condensed financial information is shown for the Global Technology and Global
Growth Opportunities Sub-Accounts since these sub-accounts had not commenced
operations on December 31, 1995.

<TABLE>
<CAPTION>
ACCUMULATION UNIT VALUE

AS OF AS OF AS OF AS OF DATE OF
SUB-ACCOUNT 12/31/95 12/31/94 12/31/93 INCEPTION 6/21/93
----------- -------- -------- -------- -----------------
<S> <C> <C> <C> <C>
Capital _______ 18.2918 19.6172 17.5309
Cash Management _______ 1.2485 1.2207 1.2169
Common Stock _______ 18.5345 18.7397 17.3783
Fixed Income Securities _______ 13.1729 13.8444 13.5230
Income _______ 15.6909 16.9728 16.2960
Global _______ 11.2629 11.3350 9.9778
Communications and Information _______ 10.4007 *
Frontier _______ 10.5399 *
Global Smaller Companies _______ 10.3193 *
High-Yield Bond _______ **

<CAPTION>
NUMBER OF UNITS OUTSTANDING
AT END OF PERIOD

AS OF AS OF AS OF
SUB-ACCOUNT 12/31/95 12/31/94 12/31/93
----------- -------- -------- --------
<S> <C> <C> <C>
Capital _______ 62,358 4,660
Cash Management _______ 434,226 56,138
Common Stock _______ 127,570 35,206
Fixed Income Securities _______ 64,614 15,084
Income _______ 124,878 27,474
Global _______ 150,440 47,001
Communications and Information _______ 47,541 *
Frontier _______ 11,609 *
Global Smaller Companies _______ 12,740 *
High-Yield Bond _______ **
</TABLE>

* The Accumulation Unit Values for the Communications and Information,
Frontier and Global Smaller Companies Sub-Accounts' first valuation
period were set at $10. Since these Sub-Accounts were not in existence
in 1993, there were no outstanding units to report at the end of the
period December 31, 1993.

<PAGE> 16

** The Accumulation Unit Value for the High-Yield Bond Sub-Account's
first valuation period was set at $10. Since this Sub-Account was not
in existence in 1994, there were no outstanding units to report at the
end of the period December 31, 1994.

THE COMPANY

Canada Life Insurance Company of America ("we," "our," and "us") is a stock
life insurance company with assets as of December 31, 1995 of approximately $
billion. We were incorporated under Michigan law on April 12, 1988, and our
administrative office is located at 6201 Powers Ferry Road, NW, Atlanta,
Georgia 30339. We currently are principally engaged in issuing and reinsuring
annuity policies.

We share our A.M. Best rating with our parent company, The Canada Life
Assurance Company. From time to time, we will quote this rating, our rating
from Standard & Poor's Corporation, Duff & Phelps Inc., and/or Moody's
Investors Service for claims paying ability. These ratings address the
financial ability of these companies to meet their contractual obligations in
accordance with the terms of their insurance contracts. They do not take into
account deductibles, surrender or cancellation penalties, or timeliness of
claim payment, nor do they address the suitability of the policy for a
particular purchaser. Also, these evaluations do not refer to the ability of
these companies to meet non-policy obligations.

We are a wholly-owned subsidiary of The Canada Life Assurance Company, a
Canadian life insurance company headquartered in Toronto, Ontario, Canada, with
a U.S. home office in Atlanta, Georgia. The Canada Life Assurance Company:
commenced insurance operations in 1847, and has been actively operating in the
United States since 1889; and is one of the largest life insurance companies in
North America with consolidated assets as of December 31, 1995 of approximately
$ billion (U.S. dollars).

Obligations under the policies are obligations of Canada Life Insurance Company
of America.

We are subject to regulation and supervision by the Michigan Insurance Bureau,
as well as the applicable laws and regulations of all jurisdictions in which we
are authorized to do business.

THE VARIABLE ACCOUNT AND THE FUND

THE VARIABLE ACCOUNT

We established the Canada Life of America Variable Annuity Account 2 (the
"Variable Account") as a separate investment account on October 30, 1992, under
Michigan law. Although we own the assets in the Variable Account, these assets
are held separately from our other assets and are not part of our general
account. The income, gains or losses, whether or not realized, from the assets
of the Variable Account are credited to or charged against the Variable Account
in accordance with the policies without regard to our other income, gains or
losses.

The portion of the assets of the Variable Account equal to the reserves and
other contract liabilities of the Variable Account will not be charged with
liabilities that arise from any other business that we conduct and will be held
in the Variable Account. We have the right to transfer to our general account
any assets of the Variable Account which are in excess of such reserves and
other liabilities.

The Variable Account is registered with the Securities and Exchange Commission
(the "SEC") as a unit investment trust under the Investment Company Act of 1940
(the "1940 Act") and meets the definition of a "separate account" under the
federal securities laws. A unit investment trust is a type of investment
company that invests its assets in specified securities, such as the shares of
one or more investment companies. Registration under the 1940 Act does not
involve the supervision by the SEC of the management or investment policies or
practices of the Variable Account.

The Variable Account has twelve sub-accounts: Capital; Cash Management; Common
Stock; Fixed Income Securities; Income; Global; Communications and Information;
Frontier; Global Smaller Companies; High-Yield Bond; Global Technology; and
Global Growth Opportunities. The assets of each sub-account are invested in
shares of the corresponding portfolio of the Fund.

11
<PAGE> 17

THE FUND

Seligman Portfolios, Inc. (the "Fund") currently has twelve portfolios:
Capital; Cash Management; Common Stock; Fixed Income Securities; Income;
Global; Communications and Information; Frontier; Global Smaller Companies;
High-Yield Bond; Global Technology; and Global Growth Opportunities. Shares of
a portfolio are purchased and redeemed for a corresponding sub-account at their
net asset value. Any amounts of income, dividends and gains distributed from
the shares of a portfolio will be reinvested in additional shares of that
portfolio at their net asset value. The Fund Prospectus defines the net asset
value of portfolio shares.

The Fund is a diversified open-end investment company incorporated in Maryland
which uses the investment management services of J. & W. Seligman & Co.
Incorporated, (the Global, Global Smaller Companies, Global Technology and
Global Growth Opportunities Portfolios use the sub-advisory services of
Seligman Henderson Co.). The following is a brief description of the investment
objectives of each of the current portfolios of the Fund. There is, of course,
no assurance that the investment objective of any portfolios will be achieved.
The following brief descriptions are qualified in their entirety by the more
detailed information appearing in the attached Prospectus for the Fund.

SELIGMAN CAPITAL PORTFOLIO

The investment objective of this Portfolio is to produce capital appreciation,
not current income, by investing in common stocks (primarily those with strong
near or intermediate-term prospects) and securities convertible into or
exchangeable for common stocks, in common stock purchase warrants, in debt
securities and in preferred stocks believed to provide capital appreciation
opportunities.

SELIGMAN CASH MANAGEMENT PORTFOLIO

The investment objective of this Portfolio is to preserve capital and to
maximize liquidity and current income by investing in a diversified portfolio
of high-quality money market instruments. Investments in this Portfolio are
neither insured nor guaranteed by the U.S. Government and there is no assurance
that this Portfolio will be able to maintain a stable net asset value of $1.00
per share.

SELIGMAN COMMON STOCK PORTFOLIO

The investment objective of this Portfolio is to produce favorable, but not the
highest, current income and long-term growth of both income and capital value,
without exposing capital to undue risk, primarily through equity investments
broadly diversified over a number of industries.

SELIGMAN FIXED INCOME SECURITIES PORTFOLIO

The investment objective of this Portfolio is to achieve favorable current
income by investing in a diversified range of debt securities, primarily of
investment grade, including convertible issues and preferred stock, with
capital appreciation as a secondary consideration.

SELIGMAN INCOME PORTFOLIO

The investment objective of this Portfolio is primarily to produce high current
income consistent with what is believed to be prudent risk of capital and
secondarily to provide the possibility of improvement in income and capital
value over the longer term, by investing primarily in income-producing
securities.

SELIGMAN HENDERSON GLOBAL PORTFOLIO

The investment objective of this Portfolio currently is long-term capital
appreciation primarily through global investments in securities of
medium-to-large sized companies.

A shareholder meeting and vote will be scheduled by Seligman Henderson for
sometime during the third quarter of 1996. The purpose of this meeting will
include, but won't be limited to, modifying the investment objective of the
Global Portfolio to exclude securities issued by U.S. companies as available
investments, thereby changing the focus from "global" to "international".
Concurrent with changing the investment objective would be a name change from
Seligman Henderson Global Portfolio to Seligman Henderson International
Portfolio. If you own shares of the Seligman Henderson

<PAGE> 18

Global Portfolio and units in its corresponding sub-account as of the
record date, you will receive instructions from Seligman Henderson as to your
voting rights. Results of the vote will be provided to you as soon as
practicable following the vote.

SELIGMAN COMMUNICATIONS AND INFORMATION PORTFOLIO

The investment objective of this Portfolio is to produce capital gain. Income
is not an objective. The Portfolio seeks to achieve its objective by investing
primarily in securities of companies operating in the communications,
information and related industries.

SELIGMAN FRONTIER PORTFOLIO

The investment objective of this Portfolio is to produce growth in capital
value; income may be considered but will be only incidental to the Portfolio's
investment objective. In general, securities owned are likely to be those
issued by small-to- medium sized companies selected for their growth prospects.

SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO

The investment objective of this Portfolio is long-term capital appreciation
primarily through global investments in securities of companies with
small-to-medium market capitalizations.

SELIGMAN HIGH-YIELD BOND PORTFOLIO

The investment objective of this Portfolio is to produce current income. The
Series seeks to achieve its objective by investing primarily in high-yielding,
high risk corporate bonds and corporate notes, which, generally, are unrated or
carry ratings lower than those assigned to investment grade bonds by Standard &
Poor's Corporation ("S&P") or Moody's Investors Service, Inc. ("Moody's"). An
investment in the Series is appropriate for you only if you can bear the high
risk inherent in investing in such securities. This risk is described in the
attached Prospectus for the Fund, which should be read carefully before
investing.

SELIGMAN HENDERSON GLOBAL TECHNOLOGY

The investment objective of this Portfolio is to seek long term capital
appreciation by investing primarily in securities of U.S. and non-U.S.companies
operating in the technology and technology-related industries.

SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES PORTFOLIO

The investment objective of this Portfolio is to seek capital appreciation by
investing primarily in stocks of companies that have the potential to benefit
from global economic or social trends.

Since the Fund may be available to other separate accounts, including
registered separate accounts for variable annuity and variable life products,
and non-registered separate accounts for group annuity products, of Canada Life
Insurance Company of America, Canada Life Insurance Company of New York, The
Canada Life Assurance Company, and other unaffiliated insurance companies, it
is possible that material conflicts may arise between the interests of the
Variable Account and one or more other separate accounts investing in the Fund.
The Fund's board of directors, the Fund's investment manager, and we and any
other insurance companies participating in the Fund will monitor events to
identify any irreconcilable material conflict. Upon being advised of such a
conflict, we will take any steps we believe necessary to resolve the matter,
including removing the assets of the Variable Account from one or more series.

A FULL DESCRIPTION OF THE FUND, ITS INVESTMENT OBJECTIVES, ITS POLICIES AND
RESTRICTIONS, ITS EXPENSES AND OTHER ASPECTS OF ITS OPERATION, AS WELL AS A
DESCRIPTION OF THE RISKS RELATED TO INVESTMENT IN THE FUND IS CONTAINED IN THE
ATTACHED PROSPECTUS FOR THE FUND. THE PROSPECTUS FOR THE FUND SHOULD BE READ
CAREFULLY BY A PROSPECTIVE PURCHASER ALONG WITH THIS PROSPECTUS.

<PAGE> 19

RESERVED RIGHTS

We reserve the right to substitute shares of another portfolio of the Fund or
shares of another registered open-end investment company if, in the judgment of
our management, investment in shares of one or more portfolios is no longer
appropriate for any legitimate reason, including: a change in investment
policy; or a change in the tax laws; or the shares are no longer available for
investment. However, we will obtain the approval of the SEC before we make a
substitution of shares, if such approval is required by law.

When permitted by law, we also reserve the right to: create new variable
accounts; combine variable accounts, including the Canada Life of America
Variable Annuity Account 2; remove, combine or add sub-accounts and make the
new sub-accounts available to policyowners at our discretion; add new
portfolios of the Fund or of other registered investment companies; deregister
the Variable Account under the 1940 Act if registration is no longer required;
make any changes required by the 1940 Act; and operate the Variable Account as
a managed investment company under the 1940 Act or any other form permitted by
law.

If a change is made, we will send you a revised Prospectus and any notice
required by law.

CHANGE IN INVESTMENT POLICY

The investment policy of a sub-account of the Variable Account may not be
changed unless: the change is approved, if required, by the Michigan Insurance
Bureau; and a statement of such approval is filed, if required, with the
insurance department of the state in which the policy is delivered.

DESCRIPTION OF ANNUITY POLICY

TEN DAY RIGHT TO EXAMINE POLICY

PREMIUMS

INITIAL PREMIUM

An applicant must submit a properly completed application along with a check
made payable to us for the initial premium. The minimum initial premium is
$5,000 ($2,000 if the Policy is an Individual Retirement Annuity, but we
reserve the right to lower or raise the minimum premium for IRAs). However, the
minimum initial premium is $100 ($50 if the Policy is an Individual Retirement
Annuity) when an applicant has enclosed a completed pre-authorized check
("PAC") agreement for additional premiums to be automatically withdrawn monthly
from the owner's bank account.

The application is subject to our underwriting standards. If the application is
properly completed and is accompanied by all the information necessary to
process it, including the initial premium, we will normally accept the
application and apply the initial net premium within two valuation days of
receipt at our Administrative Office. However, we may retain the premium for up
to five valuation days while we attempt to complete the processing of an
incomplete application. If this cannot be achieved within five valuation days,
we will inform the applicant of the reasons for the delay and immediately
return the premium, unless the applicant specifically consents to our retaining
the premium until the application is made complete. If the applicant consents
to our retaining the premium, we will apply the initial net premium within two
valuation days of when the application is complete.

<PAGE> 20

ADDITIONAL PREMIUMS

The minimum additional premium is $1,000. However, the minimum additional
premium paid by PAC is $100 per month ($50 per month if the policy is an
Individual Retirement Annuity). We will apply additional net premiums as of
receipt at our Administrative Office.

You may make additional premium payments at any time during any annuitant's
lifetime and before the earlier of the annuity date or maturity date. Our prior
approval is required before we will accept an additional premium which,
together with the total of other premiums paid, would exceed $1,000,000. We
will give you a receipt for each additional premium payment.

WIRE TRANSMITTAL PRIVILEGE

If a written agreement between us and broker/dealers who use wire transmittals
is in effect, as a privilege to you we will accept transmittal of the initial
and/or additional premiums by wire order from the broker/dealer to our
designated financial institution. A copy of such transmittal must be
simultaneously sent to our Administrative Office via a telephone facsimile
transmission that also contains the essential information we require to begin
application processing and/or to allocate the net premium. We will normally
apply the initial net premium within two valuation days of receipt at our
Administrative Office of the facsimile transmission that contains a copy of the
wire order and such required essential information. We may retain such wire
orders for up to five valuation days while an attempt is made to obtain such
required information that we do not receive via such facsimile transmission. If
such required information is not obtained within five valuation days, we will
inform the broker/dealer, on behalf of the applicant, of the reasons for the
delay and immediately return the premium wired to us to the broker/dealer who
will return the full premium paid to the applicant, unless we receive within
such five valuation days the applicant's specific written consent to our
retaining the premium until we receive such required information via facsimile
transmission.

Our acceptance of the wire order and facsimile does not create a contractual
obligation with us until we receive and accept a properly completed original
application. If we do not receive a properly completed original application
within ten valuation days of receipt of the initial wire order premium, we will
return the premium wired to us to the broker/dealer who will return the full
premium paid to the applicant. If the allocation instructions in the properly
completed original application are inconsistent with such instructions
contained in the facsimile transmission, the policy value will be reallocated
in accordance with the allocation instructions in the application at the price
which was next determined after receipt of the wire order.

ELECTRONIC DATA TRANSMISSION OF APPLICATION INFORMATION

In certain states, we will also accept, by agreement with broker-dealers who
use electronic data transmissions of application information, wire transmittals
of initial premium payments from the broker-dealer to the Company for purchase
of the policy. Contact us to find out about state availability.

Upon receipt of the electronic data and wire transmittal, we will process the
information and allocate the premium payment according to the policyowner's
instructions. Based on the information provided, we will generate a policy and
a verification letter to be forwarded to the policyowner for signature.

During the period from receipt of the initial premium until the signed
verification letter is received, the policyowner may not execute any financial
transactions with respect to the policy unless such transactions are requested
in writing by the owner and signature guaranteed.

NET PREMIUM ALLOCATION

You elect in your application how you want your initial net premium to be
allocated among the sub-accounts and the Fixed Account. Any additional net
premiums will be allocated in the same manner, unless at the time of payment we
have received your written notice to the contrary. The total allocation must
equal 100%.

<PAGE> 21

We cannot guarantee that a sub-account or shares of a portfolio will always be
available. If you request that all or part of a premium be allocated to a
sub-account at a time when the sub-account or underlying portfolio is not
available, we will immediately return that portion of the premium to you,
unless you specify otherwise.

TERMINATION

We may pay you the cash surrender value and terminate the policy if before the
annuity date or maturity date all of these events simultaneously exist:

1. you have not paid any premiums for at least two years;
2. the policy value is less than $2,000; and
3. the total premiums paid, less any partial withdrawals, is less than
$2,000.

We will mail you a notice of our intention to terminate this policy at least
six months in advance. The policy will automatically terminate on the date
specified in the notice, unless we receive an additional premium before the
termination date specified in the notice. This additional premium must be at
least the minimum amount specified in "Additional Premiums."

VARIABLE ACCOUNT VALUE

The Variable Account value before the annuity date or maturity date is
determined by multiplying the number of units credited to this policy for each
sub-account by the current unit value of these units.

UNITS

We credit net premiums in the form of units. The number of units credited to
the policy for each sub-account is determined by dividing the net premium
allocated to that sub-account by the unit value for that sub-account at the end
of the valuation period during which we receive the premium at our
Administrative Office.

We will credit units for the initial net premium on the effective date of the
policy. We will adjust the units for any transfers in or out of a sub-account,
including any transfer processing fee.

We will cancel the appropriate number of units based on the unit value at the
end of the valuation period in which any of the following events occur: the
policy administration charge is assessed; the date we receive and file your
written notice for a partial withdrawal or surrender; the date of a systematic
withdrawal; the earlier of the annuity date or maturity date; or the date we
receive due proof of your death or the last surviving annuitant's death.

UNIT VALUE

The unit value for each sub-account's first valuation period is set at $10,
except the Cash Management sub-account which is set at $1. The unit value for
each subsequent valuation period is determined by multiplying the unit value at
the end of the immediately preceding valuation period by the net investment
factor for the valuation period for which the value is being determined.

The unit value for a valuation period applies to each day in that period. The
unit value may increase or decrease from one valuation period to the next.

NET INVESTMENT FACTOR

The net investment factor is an index that measures the investment performance
of a sub-account from one valuation period to the next. Each sub-account has a
net investment factor, which may be greater than or less than one.

The net investment factor for each sub-account for a valuation period equals 1
plus the rate of return earned by the relevant portfolio of the Fund, adjusted
for the effect of taxes charged or credited to the sub-account, the mortality
and expense risk charge, and the daily administration fee.

The rate of return of the relevant portfolio is equal to the fraction obtained
by dividing (a) by (b) where:

<PAGE> 22

(a) is the net investment income and net gains, realized and unrealized,
credited during the current valuation period; and
(b) is the value of the net assets of the relevant portfolio at the end of
the preceding valuation period, adjusted for the net capital
transactions and dividends declared during the current valuation period.

TRANSFERS

TRANSFER PRIVILEGE

You may transfer all or a part of an amount in the sub-account(s) to another
sub-account(s) or to the Fixed Account, or transfer a part of an amount in the
Fixed Account to the sub-account(s), subject to these general restrictions and
the additional restrictions in "Restrictions On Transfers From Fixed Account":

1. the Company's minimum transfer amount, currently $250; and
2. a transfer request that would reduce the amount in that sub-account or
the Fixed Account below $500 will be treated as a transfer request for
the entire amount in that sub-account or the Fixed Account.

We cannot guarantee that a sub-account or shares of a portfolio will always be
available. If you request an amount in a sub-account or Fixed Account be
transferred to a sub-account at a time when the sub-account or underlying
portfolio is unavailable, we will not process your transfer request, and this
request will not be counted as a transfer for purposes of determining the
number of free transfers executed. The Company reserves the right to change its
minimum transfer amount requirements.

TELEPHONE TRANSFER PRIVILEGE

You may direct us to act on transfer instructions given by telephone, subject
to our procedures, by initialing the authorization on the application or by
subsequently completing our administrative form. The authorization will
continue in effect until we receive your written revocation or we discontinue
this privilege. We reserve the right to change our procedures and to
discontinue this privilege.

We will employ reasonable procedures to confirm that instructions communicated
by telephone are genuine. If we do not employ such reasonable procedures, we
may be liable for any losses due to unauthorized or fraudulent instructions.
These procedures may include, but are not limited to, possible recording of
telephone calls and obtaining appropriate personal security codes and contract
number before effecting any transfers.

DOLLAR COST AVERAGING PRIVILEGE ("DCA")

You may elect to have us automatically transfer specified amounts FROM ANY ONE
variable sub-account or the Fixed Account (either one a "disbursement account")
TO ANY OTHER variable sub-account(s) or the Fixed Account on a periodic basis,
subject to our administrative procedures and the restrictions in "Transfer
Privilege" above. This privilege is intended to allow you to utilize "Dollar
Cost Averaging," a long-term investment method which provides for regular,
level investments over time. We make no representation or guarantee that DCA
will result in a profit or protect against loss.

When the Fixed Account is selected as the disbursement account, we require a
minimum distribution period of 18 months. During this period, surrenders and/or
transfers from the Fixed Account are not permitted.

To initiate DCA, we must receive your written notice on our form. Once elected,
such transfers will be processed until the entire value of the sub-account or
Fixed Account is completely depleted; or we receive your written revocation of
such monthly transfers; or we discontinue this privilege. We reserve the right
to change our procedures or to discontinue the DCA privilege upon 30 days
written notice to you.

<PAGE> 23

RESTRICTIONS ON TRANSFERS FROM FIXED ACCOUNT

Other than transfers made pursuant to DCA, you may transfer an amount from the
Fixed Account to the sub-account(s) of the Variable Account, subject to these
additional restrictions:

1. we allow only one transfer each year and this transfer must be within
the period that is 30 days before and 30 days after the policy
anniversary, and an unused transfer option does not carry over to the
next year; and

2. the maximum transfer amount is 50% of the Fixed Account value on the
date of the transfer, unless the balance after the transfer is less
than $5,000, in which case you may transfer the entire value.

Under our current procedures, the transfer will be made on the valuation date
that occurs on or next following the date we receive your transfer request at
our Administrative Office.

TRANSFER PROCESSING FEE

There is no limit to the number of transfers that you can make between
sub-accounts or to the Fixed Account. However, we only allow one transfer each
year from the Fixed Account (see "Restrictions On Transfers From Fixed Account"
on page ___). The first 12 transfers during each policy year are free under our
current policy, which we reserve the right to change. If our current policy
changes, we guarantee that we will provide at least four free transfers during
each policy year. Any unused free transfers do not carry over. We will assess a
$25 processing fee for each additional transfer. For the purposes of assessing
the fee, each transfer request (which includes a written notice or telephone
call, but does not include dollar cost averaging automatic transfers) is
considered to be one transfer, regardless of the number of sub-accounts or the
Fixed Account affected by the transfer. The processing fee will be charged
proportionately to the receiving sub-account(s) and/or the Fixed Account.

PAYMENT OF PROCEEDS

PROCEEDS

Proceeds means the amount we will pay under your policy when the first of the
following events occurs: the annuity date or maturity date; or the policy is
surrendered; or we receive due proof of death of the last surviving annuitant
or any owner. We will pay any proceeds in a single sum that may be payable due
to death before the annuity date or maturity date, unless an election is made
for a payment option. See "Election Of Options" on page ___. The policy ends
when we pay the proceeds.

We will deduct any applicable premium tax from the proceeds described below,
unless we deducted the tax from the premiums when paid.

PROCEEDS ON ANNUITY DATE OR MATURITY DATE

If Payment Option 1 is in effect on the annuity date, the proceeds we will pay
is the policy value. See "Payment Options" on page ___. If the proceeds are
paid in a lump sum on the annuity date, we will pay the cash surrender value.

You may change the annuity date, subject to these limitations:

1. we must receive your written notice at our Administrative Office at
least 30 days before the current annuity date;
2. the requested annuity date must be a date that is at least 30 days
after we receive your written notice; and

3. the requested annuity date should be no later than the first day of
the month following the any annuitant's 100th birthday or any earlier
date required by law.

The proceeds on the Maturity Date will be the policy value. The Maturity Date
is the first day of the month after any annuitant's 100th birthday.

<PAGE> 24

PROCEEDS ON SURRENDER

If you surrender the policy before the annuity date, the proceeds we will pay
is the cash surrender value. The cash surrender value is the policy value, less
any applicable surrender charge. The cash surrender value will be determined on
the date we receive your written notice for surrender and this policy at our
Administrative Office.

You may surrender the policy for its cash surrender value at any time before
the earlier of the death of the last surviving annuitant, the annuity date or
maturity date. However, the surrender proceeds may be subject to federal income
tax, including a penalty tax. See "Federal Tax Status" on page ___.

You may elect to have the cash surrender value paid in a single sum or under a
payment option. See "Payment Options" on page ___. The policy ends when we pay
the cash surrender value. You may avoid a surrender charge by electing to apply
the policy values under Payment Option 1. See "Proceeds On Annuity Date or
Maturity Date" on page ___.

PROCEEDS ON DEATH OF LAST SURVIVING ANNUITANT BEFORE ANNUITY DATE OR MATURITY
DATE (THE DEATH BENEFIT)

If we receive due proof of death of the last surviving annuitant before the
annuity date or maturity date ("such due proof"), the proceeds we will pay to
the beneficiary is the death benefit.

THE FOLLOWING APPLIES ONLY TO CERTAIN POLICIES ISSUED ON OR AFTER MAY 1,
1996 DATE AS APPLICABLE REGULATORY APPROVALS ARE OBTAINED IN THE
JURISDICTION IN WHICH THE POLICIES ARE OFFERED:

If we receive such due proof during the first five years, the death benefit
is the greater of:

If we receive such due proof after the first five policy years, the death
benefit is the greatest of:

1. item "1" above; or
2. item "2" above; or
3. the policy value at the end of the most recent 5 policy year
period preceding the date we receive due proof of the
annuitant's death, adjusted for any of the following items that
occur after such last 5 policy year period: a) less
any partial withdrawals, including applicable surrender
charges; b) less any incurred taxes; and c) plus any
premiums paid. The 5 policy year periods are measured from the
policy date (i.e., 5, 10, 15, 20, etc.).

THE FOLLOWING APPLIES ONLY TO CERTAIN POLICIES ISSUED PRIOR TO MAY 1, 1996
OR SUCH LATER DATE AS APPLICABLE REGULATORY APPROVAL IS OBTAINED IN THE
JURISDICTION IN WHICH THE POLICIES ARE OFFERED:

If we receive such due proof during the first seven policy years, the death
benefit is the greater of:

1. the premiums paid, less: a) any partial withdrawals, including
applicable surrender charges; and b) any incurred taxes; or

2. the policy value on the date we receive due proof of the
annuitant's death.

If we receive such due proof after the first seven policy years, the death
benefit is the greatest of:

1. item "1." above; or
2. item "2." above; or

3. the policy value at the end of the 7 policy year period preceding
the date we receive due proof of the annuitant's death, adjusted
for any of the following items that occur after such last 7
policy year period: a) less any partial withdrawals, including
applicable surrender charges; b) less any incurred taxes; and c)
plus any premiums paid. The 7 policy year periods are measured
from the policy date (i.e., 7, 14, 21, 28, etc.). For policies
issued from May 1, 1995 through April 30, 1996,

<PAGE> 25

no further step-ups in Death Benefits will occur after any
annuitant's age of 80.

No death benefit is payable if the policy is surrendered before the last
surviving annuitant's death. If you are the last surviving annuitant who dies
before the annuity date or maturity date, the death benefit proceeds must be
distributed pursuant to the rules set forth below in "Proceeds on Death of Any
Owner Before or After Annuity Date or Maturity Date ."

PROCEEDS ON DEATH OF ANY OWNER BEFORE OR AFTER ANNUITY DATE OR MATURITY DATE

If you are not an annuitant, and we receive due proof of your death before the
annuity date or maturity date we will pay the beneficiary the policy value as
of the date we receive due proof of your death. If you are the last surviving
annuitant, and we receive due proof of your death before the annuity date or
maturity date we will pay the beneficiary the death benefit described in
"Proceeds on the Death of Last Surviving Annuitant Before Annuity Date or
Maturity Date." If any owner dies before the annuity date, Federal tax law
requires the policy value be distributed within five years after the date of
such owner's death regardless of whether such owner is or is not an annuitant,
unless such owner's spouse is the designated beneficiary, in which case, the
policy may be continued with the surviving spouse as the new owner. All such
distributions will be made in accordance with the requirements of the
Investment Company Act of 1940.

A "designated beneficiary" is the person designated by you as a beneficiary and
to whom the proceeds of the policy pass by reason of an owner's death and must
be a natural person.

If any owner dies on or after the earlier of the annuity date or maturity date,
any remaining payments must be distributed at least as rapidly as under the
payment option in effect on the date of such owner's death.

The distribution requirements described above will be considered satisfied as
to any portion of the proceeds:

1. payable to or for the benefit of a designated beneficiary; and

2. which is distributed over the life (or period not exceeding the life
expectancy) of that beneficiary, provided that the beneficiary is a
natural person and such distributions begin within one year of the
owner's death.

If you are not a natural person, the primary annuitant as determined in
accordance with Section 72(s) of the Code (i.e., the individual the events in
the life of whom are of primary importance in effecting the timing or amount of
the payout under the policy) will be treated as an owner for purposes of these
distribution requirements, and any change in the primary annuitant will be
treated as the death of an owner.

INTEREST ON PROCEEDS

We will pay interest on proceeds if we do not pay the proceeds in a single sum
or begin paying the proceeds under a payment option:

1. within 30 days after the proceeds become payable; or

2. within the time required by the applicable jurisdiction, if less than
30 days.

This interest will accrue from the date the proceeds become payable to the date
of payment, but not for more than one year, at an annual rate of 3%, or the
rate and time required by law, if greater.

PARTIAL WITHDRAWALS

You may withdraw part of the cash surrender value at any time before the
earlier of the death of the last surviving annuitant, the annuity date or
maturity date, subject to these limits:

1. the Company's minimum partial withdrawal, currently $250;

2. the maximum partial withdrawal is the amount that would leave a cash
surrender value of $5,000;
3. a partial withdrawal request which would reduce the amount in a
sub-account or the Fixed Account below $500 will be
treated as a request for a full withdrawal of the amount in that
sub-account or Fixed Account; and

4. a partial withdrawal request for an amount exceeding $10,000 must
be accompanied by a guarantee of the owner's
signature by a commercial bank, a trust company, or a savings and
loan.

<PAGE> 26

On the date we receive your written notice for a partial withdrawal at our
Administrative Office, we will withdraw the amount of the partial withdrawal
from the policy value and we will then deduct any applicable surrender charge
from the remaining policy value. The Company reserves the right to change its
minimum partial withdrawal amount requirements.

You may specify the amount to be withdrawn from certain sub-accounts or the
Fixed Account. If you do not provide his information to us, we will withdraw
proportionately from the sub-accounts and Fixed Account in which you are
invested. If you do provide this information to us, but the amount in the
designated sub-accounts or the Fixed Account is inadequate to comply with your
withdrawal request, we will first withdraw as much as possible from the
specified sub-accounts or Fixed Account, withdrawing the remainder
proportionately from the other sub-accounts and Fixed Account in which you are
invested.

Any partial or systematic withdrawal may be included in the owner's gross
income in the year in which the withdrawal occurs, and may be subject to
federal income tax, including a penalty tax equal to 10% of the amount treated
as taxable income, and the Code restricts certain distributions under
Tax-Sheltered Annuity Plans and other qualified plans. See "Federal Tax Status"
on page ___.

SYSTEMATIC WITHDRAWAL PRIVILEGE ("SWP")

You may elect to withdraw a fixed-level amount from the sub-account(s) on a
monthly, quarterly, or semi-annual basis, beginning 30 days after the Effective
Date, if we receive your written notice on our form and the policy meets the
Company's minimum premium, currently $25,000, and in accordance with "Partial
Withdrawals" above (when surrender charges are applicable). No minimum is
necessary when Surrender Charges are not applicable. While Surrender Charges
are applicable, each year you may withdraw as follows:

1. Up to 100% of positive investment earnings of each variable
sub-account available at the time the SWP is
executed/processed; PLUS
2. Up to 100% of current policy year's interest on FIXED ACCOUNT available
at the time the SWP is executed/processed; PLUS
3. Up to 10% of total premiums still subject to a surrender charge; PLUS
4. Up to 100% of total premiums NOT SUBJECT TO A SURRENDER CHARGE.

When no Surrender Charges are applicable, the entire policy is available for
systematic withdrawal. The Systematic Withdrawal Privilege will end at the
earliest of the date: when the sub-account(s) you specified for those
withdrawals has no remaining amount to withdraw; or the cash surrender value is
reduced to $5,000; or you elect to pay premiums by pre-authorized check; or we
receive your written notice to end this privilege; or we elect to discontinue
this privilege upon 30 days written notice to you. Use of this privilege during
a policy year counts as your first 10% free withdrawal of total premiums under
the "Surrender Charge" provision. References to partial withdrawals in other
provisions of this Prospectus include systematic withdrawals. If applicable, a
charge for premium taxes may be deducted from each systematic withdrawal
payment. The Company reserves the right to change its minimum systematic
withdrawal amount requirements.

SELIGMAN TIME HORIZON ASSET ALLOCATION STRATEGY ("STRATEGY")

You may elect to participate in Seligman Time Horizon Asset Allocation Strategy
(the "Strategy") an asset allocation strategy which will allocate your policy
value based primarily upon the amount of time you have to reach specific
financial goals. The Strategy uses certain predetermined model portfolios,
designed by J.& W. Seligman, that seek a wide range of financial goals for an
investor's specific time horizon. Each J. & W. Seligman model portfolio
represents a predetermined allocation of your policy value among one or more of
the variable sub-accounts. The Strategy also allows you to construct your own
customized model portfolio.

Under the Strategy, you may elect to have your policy value migrate between
model portfolios as your time horizon changes. The migration of your policy
value will occur on an annual basis and is intended to reflect your current
time horizon. You may also choose to periodically rebalance your policy value
to reflect the J. & W. Seligman model portfolio you have selected or
periodically rebalance your policy value to reflect your customized model
portfolio. Any rebalancing of your policy value will be made pursuant to our
procedures governing portfolio rebalancing. See "Portfolio Rebalancing" page .
You may also choose a J. & W. Seligman model portfolio or create a customized
portfolio and elect not to rebalance your policy value after the initial
allocation of policy value under that model portfolio. We make no

<PAGE> 27

representation or guarantee that following the Strategy will result in a
profit, protect against loss or ensure the achievement of financial goals.

To initiate the Strategy, we must receive your written notice on our form.
Participation in the Strategy is voluntary and can be modified or discontinued
at any time by you in writing on our form. We reserve the right to change our
procedures or to discontinue offering the Strategy upon 30 days written notice
to you.

PORTFOLIO REBALANCING ("REBALANCING")

Portfolio Rebalancing is an investment strategy in which, on a quarterly,
semi-annual or annual basis, your policy value in the sub-accounts only is
reallocated back to its original portfolio allocation, regardless of changes in
individual portfolio values from the time of the last Rebalancing. We make no
representation or guarantee that Rebalancing will result in a profit, protect
you against loss or ensure that you meet your financial goals.

To initiate Rebalancing, we must receive your written notice on our form.
Participation in Rebalancing is voluntary and can be modified or discontinued
at any time by you in writing on our form. Portfolio Rebalancing is not
available for amounts invested and earnings thereon in the Fixed Account.

Once elected, we will continue to perform Rebalancing until we are instructed
otherwise. We reserve the right to change our procedures or discontinue
offering Rebalancing upon 30 days written notice to you.

LOANS

The Company may in the future offer a loan privilege to owners of policies
issued in connection with Section 403(b) qualified plans that are not subject
to Title I of ERISA. If offered, owners of such policies may obtain loans using
the policy as the only security for the loan. Loans are subject to provisions
of the Code and to applicable retirement program rules (collectively, "loan
rules"). Tax advisers and retirement plan fiduciaries should be consulted prior
to exercising loan privileges. Policy loans that satisfy certain requirements
with respect to loan amount and repayment are not treated as taxable
distributions. If these requirements are not satisfied, or if the policy
terminates while a loan is outstanding, the loan balance will be treated as a
taxable distribution and may be subject to penalty tax, and the treatment of
the policy under Section 403(b) may be adversely affected.

If loans are offered, the following will apply:

Under the terms of the policy, qualified policies have a maximum loan
value equal to 80% of the policy value, although loan rules may serve to
reduce such maximum loan value in some cases. The amount available for a
loan at any given time is the loan value less any outstanding debt. Debt
equals the amount of any loans plus accrued interest. Loans will be made
only upon written request from the owner. The Company will make loans
within seven days of receiving a properly completed loan application
(applications are available from the Company), subject to postponement
under the same circumstances that payment of withdrawals may be postponed.
See "Partial Withdrawals" on page ___.

When an owner requests a loan, the Company will reduce the owner's
investment in the investment accounts and transfer the amount of the loan
to the loan account, a part of the Company's general account. The owner
may designate the investment accounts from which the loan is to be
withdrawn. Absent such a designation, the amount of the loan will be
withdrawn from the investment accounts in accordance with the rules for
making partial withdrawals. See "Partial Withdrawals" on page ___. The
policy provides that owners may repay policy debt at any time. Under
applicable loan rules, loans generally must be repaid within five years,
repayments must be made at least quarterly and repayments must be made in
substantially equal amounts. When a loan is repaid, the amount of the
repayment will be transferred from the loan account to the investment
accounts. The owner may designate the investment accounts to which a
repayment is to be allocated. Otherwise, the repayment will be allocated
in the same manner as the owner's most recent premium. On each policy
anniversary, the Company will transfer from the investment accounts to the
loan account the amount by which the debt on the policy exceeds the
balance in the loan account.

The Company charges interest of 6% per year on policy loans. Loan interest
is payable in arrears and, unless paid in cash, the accrued loan interest
is added to the amount of the debt and bears interest at 6% as well. The

22
<PAGE> 28

Company credits interest with respect to amounts held in the loan
account at a rate of 4% per year. Consequently, the net cost of loans
under the policy is 2%. If on any date debt under a policy exceeds the
policy value, the policy will be in default. In such case the owner will
receive a notice indicating the payment needed to bring the policy out
of default and will have a thirty-one day grace period within which to
pay the default amount. If the required payment is not made within the
grace period, the policy will be foreclosed (terminated without value).

The amount of any debt will be deducted from the minimum death benefit.
See "Proceeds on Death of Annuitant Before Annuity Date or Maturity Date"
on page ___. In addition, debt, whether or not repaid, will have a
permanent effect on the policy value because the investment results of the
investments accounts will apply only to the unborrowed portion of the
policy value. The longer debt is outstanding, the greater the effect is
likely to be. The effect could be favorable or unfavorable. If the
investment results are greater than the rate being credited on amounts
held in the loan account while the debt is outstanding, the policy value
will not increase as rapidly as it would have if no debt were outstanding.
If investment results are below that rate, the policy value will be higher
than it would have been had no debt been outstanding.

PAYMENT OF BENEFITS, PARTIAL WITHDRAWALS, CASH SURRENDERS & TRANSFERS -
POSTPONEMENT

We will usually pay any proceeds payable, amounts partially withdrawn, or the
cash surrender value within seven calendar days after:

1. we receive your written notice for a partial withdrawal or a cash
surrender; or
2. the date chosen for any systematic withdrawal; or
3. we receive due proof of your death or the death of the last surviving
annuitant.

However, we can postpone the payment of proceeds, amounts withdrawn, the cash
surrender value, or the transfer of amounts between sub-accounts if:

1. the New York Stock Exchange is closed, other than customary weekend
and holiday closings, or trading on the exchange
is restricted as determined by the SEC; or

2. the SEC permits by an order the postponement for the protection of
policyowners; or

3. the SEC determines that an emergency exists that would make the
disposal of securities held in the Variable Account or the
determination of the value of the Variable Account's net assets not
reasonably practicable.

We have the right to defer payment of any partial withdrawal, cash surrender,
or transfer from the Fixed Account for up to six months from the date we
receive your written notice for a withdrawal, surrender or transfer.

CHARGES AGAINST THE POLICY, VARIABLE ACCOUNT, AND FUND

SURRENDER CHARGE

No deduction for a sales charge is made when premiums are paid. However, a
surrender charge (contingent deferred sales charge) will be deducted when
certain partial withdrawals and cash surrenders are made to at least partially
reimburse us for certain expenses relating to the sale of the policy, including
commissions to registered representatives and other promotional expenses. A
surrender charge may also be applied to the proceeds paid on the annuity date,
unless the proceeds are applied under Payment Option 1.

For the purpose of determining if any surrender charge applies and the amount
of such charge, partial withdrawals and surrenders are taken according to these
rules from policy value attributable to premiums or investment earnings in the
following order:

<TABLE>
<CAPTION>
SURRENDER CHARGE
----------------
<S> <C>
1. Up to 100% of positive investment earnings of each variable sub-account
available at the time the request is made, once a policy year, PLUS
....................................................................... None
2. Up to 100% of current policy year's interest on the FIXED ACCOUNT at
the time the request for surrender/withdrawal is made, once a policy
year, PLUS............................................................. None
3. Up to 10% of total premiums STILL SUBJECT TO A SURRENDER CHARGE,
once a policy year, PLUS............................................... None
4. Up to 100% of those premiums NOT SUBJECT TO A SURRENDER CHARGE,
available

</TABLE>

<PAGE> 29

<TABLE>
<S> <C>
at any time ........................................................... None
5. Premiums subject to a surrender charge................................. 6%
Policy Years Since Premium Was Paid
-----------------------------------
Less than 1...................................................... 6%
At least 1, but less than 2...................................... 6%
At least 2, but less than 3...................................... 5%
At least 3, but less than 4...................................... 5%
At least 4, but less than 5...................................... 4%
At least 5, but less than 6...................................... 3%
At least 6, but less than 7...................................... 2%
At least 7....................................................... None
</TABLE>

Any surrender charge will be deducted proportionately from the sub-account(s)
or Fixed Account being surrendered or partially withdrawn in relation to the
amount(s) withdrawn. If the amount remaining in a sub-account or the Fixed
Account after the withdrawal is insufficient to cover the proportionate
surrender charge deduction, the balance of the surrender charge will be
assessed proportionately from any other sub-account and the Fixed Account in
which you are invested.

POLICY ADMINISTRATION CHARGE

To cover the costs of providing certain administrative services attributable to
the policies and the operations of the Variable Account, including policy
records, communicating with policyowners, and processing transactions, we
deduct a policy administration charge of $30 for the prior policy year on each
policy anniversary. If the policy value on the policy anniversary is $75,000 or
more, we will waive the policy administration charge for the prior policy year.
We will also deduct this charge for the current policy year if the policy is
surrendered for its cash surrender value, unless the policy is surrendered on a
policy anniversary. We do not anticipate any profit from this charge. Even
though our administrative expenses may increase, we guarantee that we will not
increase this charge.

The charge will be assessed proportionately from any sub-accounts and the Fixed
Account in which you are invested. If the charge is obtained from a
sub-account(s), we will cancel the appropriate number of units credited to this
policy based on the unit value at the end of the valuation period when the
charge is assessed.

DAILY ADMINISTRATION FEE

At each valuation period, we also deduct a daily administration fee at an
effective annual rate of 0.35% from the assets of the Variable Account. This
daily administration fee is intended to reimburse us for other administrative
costs under the policies. There is no necessary relationship between the daily
administration fee and the amount of expenses that may be attributable to any
one policy. We do not anticipate realizing any profit from this fee, which is
guaranteed not to increase for the duration of your policy.

TRANSFER PROCESSING FEE

The first 12 transfers during each policy year are free under our current
policy, which we reserve the right to change. If our current policy changes, we
guarantee that we will provide at least four free transfers during each policy
year. We will assess a $25 processing fee for each additional transfer. For the
purposes of assessing the fee, each transfer request (which includes a written
notice or telephone call, but does not include dollar cost averaging automatic
transfers, telephone call, or automatic transfer) is considered to be one
transfer, regardless of the number of sub-accounts or the Fixed Account
effected by the transfer. The processing fee will be charged proportionately to
the receiving sub-account(s) and/or the Fixed Account. We do not expect a
profit from this fee. See "Transfers" on page ___ for the rules concerning
transfers.

ANNUALIZED MORTALITY AND EXPENSE RISK CHARGE

The mortality risk we assume is the risk that annuitants may live for a longer
period of time than we estimated when we established our guarantees in the
policy. Because of these guarantees, each annuitant is assured that their
longevity will not have an adverse effect on the annuity payments they receive.
The mortality risk we assume also includes our guarantee to pay a death benefit
if the last surviving annuitant dies before the annuity date or maturity date.
The expense

<PAGE> 30

risk we assume is the risk that the surrender charges, policy
administration charge, daily administration fee, and transfer fees may be
insufficient to cover our actual future expenses.

The annual mortality and expense risk charge is deducted at each valuation
period from the assets of the Variable Account at an effective annual rate of
1.25% of the value of the net assets in the Variable Account. We guarantee that
the rate of this charge will never increase. This charge is not made after the
earlier of the annuity date or maturity date, and this charge is not made
against any Fixed Account value. This charge consists of approximately 0.75% to
cover the mortality risk, and approximately 0.50% to cover the expense risk. If
this charge is insufficient to cover our actual costs of mortality and expense
risks, we will bear the loss. However, if this charge exceeds our actual costs
of mortality and expense risks, the excess will be a profit to us and will be
available for any proper corporate purpose including, among other things,
payment of distribution expenses, since we anticipate that the surrender
charges will be insufficient to cover the costs of our actual distribution
expenses. We currently anticipate a profit from this charge.

WAIVER OF SURRENDER CHARGE

When the policy has been in effect for 1 year, upon written notice from you,
the Surrender Charge will be waived on any partial withdrawal or surrender
after you provide us evidence that satisfies us in a written statement signed
by a qualified physician that:

1. a) you are terminally ill: and

b) your life expectancy is not more than 12 months due to the
severity and nature of the terminal illness; and
c) the diagnosis of the terminal illness was made after the
effective date of this policy.

2. you are or have been confined to a hospital, nursing home or
long-term care facility for at least 90 consecutive days,
provided:

a) confinement is for medically necessary reasons at the
recommendation of a physician;

b) the hospital, nursing home or long-term care facility is licensed
or otherwise recognized and operating as such by the proper
authority in the state where it is located, the Joint Commission
on Accreditation of Hospitals or Medicare and satisfactory
evidence of such status is provided to us; and

c) the withdrawal or surrender request is received by us no later
than 91 days after the last day of your confinement.

For policies issued on or after May 1, 1996, this provision is not
available if any owner was attained age 81 or older on the Effective Date.

REDUCTION OR ELIMINATION OF SURRENDER CHARGES

The amount of the surrender charge on a policy may be reduced or eliminated
when some or all of the policies are to be sold to a group of individuals in
such a manner that results in savings of sales expenses. In determining whether
to reduce the surrender charge, the Company will consider certain factors
including the following:

1. The size and type of group to which the sales are to be made will be
considered. Generally, sales expenses for a larger group are smaller
than for a smaller group because of the ability to implement large
numbers of sales with fewer sales contacts.

2. The total amount of premiums to be received will be considered. Per
dollar sales expenses are likely to be less on larger premiums than on
smaller ones.

3. Any prior or existing relationship with the Company will be
considered. Policy sales expenses are likely to be less when there is
a prior or existing relationship because of the likelihood of
implementing more sales with fewer sales contacts.

4. The level of commissions paid to selling broker-dealers will be
considered. Certain broker-dealers may offer policies in connection
with financial planning programs offered on a fee for service basis.
In view of the financial planning fees, such broker-dealers may elect
to receive lower commissions for sales of the policies, thereby
reducing the Company's sales expenses.

If, after consideration of the foregoing factors, it is determined that there
will be a reduction in sales expenses, the Company will provide a reduction in
the surrender charge. The surrender charge will be eliminated when a policy is
issued to an officer, director, employee, or relative thereof of: the Company;
The Canada Life Assurance Company; J. &
25

<PAGE> 31

W. Seligman Co. Incorporated; or any of their affiliates. In no event will
reduction or elimination of the surrender charge be permitted where such
reduction or elimination will be discriminatory to any person.

REDUCTION OR ELIMINATION OF POLICY ADMINISTRATION CHARGE

The amount of the policy administration charge on a policy may be reduced or
eliminated when some or all of the policies are to be sold to a group of
individuals in such a manner that results in savings of administration
expenses. In addition, if the policy value on the policy anniversary is $75,000
or more, we will waive the policy administration charge for the prior policy
year. In determining whether to reduce or eliminate the administration charges,
the Company will consider certain factors including the following:

1. The size and type of group to which administrative services are to be
provided will be considered.
2. The total amount of premiums to be received will be considered.

If, after consideration of the foregoing factors, it is determined that there
will be a reduction or elimination of administration expenses, the Company will
provide a reduction in the policy administration charge. In no event will
reduction or elimination of the administration charge be permitted where such
reduction or elimination will be discriminatory to any person.

TAXES

We will incur premium taxes in some jurisdictions relating to the policies.
Depending on the jurisdiction, we deduct any such taxes: a) from premiums when
paid; or b) when the policy value is applied under a payment option, at cash
surrender or upon partial withdrawal. A summary of current state premium tax
rates is contained in Appendix A.

When any tax is deducted from the policy value, it will be deducted
proportionately from the sub-accounts and the Fixed Account in which you are
invested.

We reserve the right to charge or provide for any taxes levied by any
governmental entity, including:

1. taxes that are against or attributable to premiums, policy values or
annuity payments; or
2. taxes that we incur which are attributable to investment income or
capital gains retained as part of our reserves under the policies or
from the establishment or maintenance of the Variable Account.

OTHER CHARGES INCLUDING INVESTMENT MANAGEMENT FEES

Each portfolio of the Fund is responsible for all of its operating expenses. In
addition, the Fund pays J. & W. Seligman Co. Incorporated (the "Manager") fees
for investment management services that are calculated daily and payable
monthly from each portfolio at an annual rate of 0.40% for Capital, Cash
Management (currently waived), Common Stock, Fixed Income Securities and
Income; 0.50% for High-Yield Bond; 0.75% for Communications and Information,
and Frontier; and 1.00% for Global, Global Smaller Companies, Global Technology
and Global Growth Opportunities (of which the Manager in turn pays 0.90% to
Seligman Henderson Co., the Sub-Adviser to these four portfolios) of the
average daily net assets of the portfolio. The Prospectus and Statement of
Additional Information for the Fund provide more information concerning the
investment management fee, other charges against the portfolios, the investment
management services provided to the portfolios by J. & W. Seligman & Co.
Incorporated, and the sub-advisory services provided to the Global, Global
Smaller Companies, Global Technology, and Global Growth Opportunities
Portfolios by Seligman Henderson Co.

<PAGE> 32

PAYMENT OPTIONS

The policy ends when we pay the proceeds on the earlier of the annuity date or
maturity date. On the annuity date, we will apply the policy value under
Payment Option 1, unless you have an election of a payment option on file at
our Administrative Office to receive the cash surrender value in a single sum,
or to receive a mutually agreed upon payment option (Payment Option 2). The
proceeds we will pay on the maturity date is the policy value. See "Proceeds On
Annuity Date or Maturity Date" on page ___. We require the surrender of your
policy so that we may pay the cash surrender value or issue a supplemental
contract for the applicable payment option. The term "payee" means a person who
is entitled to receive payment under this section.

ELECTION OF OPTIONS

You may elect an option or revoke or change your election at any time before
the annuity date or maturity date while any annuitant is living. If an election
is not in effect at the last surviving annuitant's death or if payment is to be
made in one sum under an existing election, the beneficiary may elect one of
the options. This election must be made within one year after the last
surviving annuitant's death and before any payment has been made.

An election of an option and any revocation or change must be made in a written
notice. It must be filed with our Administrative Office with the written
consent of any irrevocable beneficiary.

An option may not be elected and we will pay the proceeds in one sum if either
of the following conditions exist:

1. the amount to be applied under the option is less than $1,000; or

2. any periodic payment under the election would be less than $50.

DESCRIPTION OF PAYMENT OPTIONS

Payment Option 1: Life Income

We will pay the proceeds in equal amounts at the beginning of each month,
during the payee's lifetime.

The amount of each payment will be determined from the tables in the policy
which apply to Payment Option 1, using the payee's age. Age will be determined
from the nearest birthday at the due date of the first payment.

Payment Option 2: Mutual Agreement

We will pay the proceeds according to other terms, if those terms are mutually
agreed upon.

<PAGE> 33

PAYMENT DATES

The payment dates of the options will be calculated from the date on which the
proceeds become payable.

AGE AND SURVIVAL OF PAYEE

We have the right to require proof of age of the payee(s) before making any
payment. When any payment depends on the payee's survival, we will have the
right, before making the payment, to require proof satisfactory to us that the
payee is alive.

DEATH OF PAYEE

At the death of the payee, or the last survivor of the payees, any amount
remaining to be paid under this section will become payable in one sum, unless
specified otherwise.

OTHER POLICY PROVISIONS

OWNER OR JOINT OWNER

During any annuitant's lifetime and before the earlier of the annuity date or
maturity date, you have all the rights and privileges granted by the policy. If
you appoint an irrevocable beneficiary or assignee, then your rights will be
subject to those of that beneficiary or assignee.

During any annuitant's lifetime and before the earlier of the annuity date or
maturity date, you may name a new owner, joint owner or annuitant by giving us
written notice.

With respect to Qualified Policies generally, however, the contract may not be
assigned (other than to us), joint ownership is not permitted, and the Owner
must be the annuitant.

If you die before the annuity date or maturity date and before the last
surviving annuitant, the proceeds will pass:

1. to your surviving "designated beneficiary," if any; otherwise
2. to your estate.

The "designated beneficiary" is defined in "Proceeds on Death of Any Owner
Before or After Annuity Date or Maturity Date."

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<PAGE> 34

BENEFICIARY

We will pay the beneficiary any proceeds payable on your death or the death of
the last surviving annuitant. During any annuitant's lifetime and before the
earlier of the annuity date or maturity date, you may name and change one or
more beneficiaries by giving us written notice. However, we will require
written notice from any irrevocable beneficiary or assignee specifying their
consent to the change.

We will pay the proceeds under the beneficiary appointment in effect at the
date of death. If you have not designated otherwise in your appointment, the
proceeds will be paid to the surviving beneficiary(ies) equally. If no
beneficiary is living when you die or the last surviving annuitant dies, or if
none has been appointed, the proceeds will be paid to your estate.

WRITTEN NOTICE

Written Notice must be signed by you, dated, and of a form and content
acceptable to us. Your written notice will not be effective until we receive
and file it at our Administrative Office. However, the change provided in your
written notice to name or change the owner or beneficiary will then be
effective as of the date you signed the written notice:

1. subject to any payments made or other action we take before we receive
and file your written notice; and
2. whether or not you or the last surviving annuitant are alive when we
receive and file your written notice.

PERIODIC REPORTS

We will mail you a report showing the following items about your policy:

1. the number of units credited to the policy and the dollar value of a
unit;
2. the policy value;
3. any premiums paid, withdrawals, and charges made since the last
report; and
4. any other information required by law.

The information in the report will be as of a date not more than two months
before the date of the mailing. We will mail the report to you:

1. at least annually, or more often as required by law; and
2. to your last address known to us.

ASSIGNMENT

You may assign a nonqualified policy or an interest in it at any time before
the earlier of the annuity date or maturity date during any annuitant's
lifetime. An assignment must be in a written notice acceptable to us. It will
not be binding on us until we receive and file it at our Administrative Office.
We are not responsible for the validity of any assignment. Your rights and the
rights of any beneficiary will be effected by an assignment.

An assignment of a nonqualified policy may result in certain tax consequences
to the owner. See "Transfers, Assignment or Exchanges of a Policy" on page ___.

MODIFICATION

Upon notice to you, we may modify the policy, but only if such modification:

1. is necessary to make the policy or the Variable Account comply with
any law or regulation issued by a governmental agency to which we
are subject; or
2. is necessary to assure continued qualification of the policy under
the Code or other federal or state laws relating to retirement
annuities or variable annuity policies; or
3. is necessary to reflect a change in the operation of the Variable
Accounts; or
4. provides additional variable account and/or fixed accumulation
options.

In the event of any such modification, we may make any appropriate endorsement
to the policy.

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<PAGE> 35

YIELDS AND TOTAL RETURNS

From time to time, we may advertise yields, effective yields, and total returns
for the sub-accounts. THESE FIGURES ARE BASED ON HISTORICAL EARNINGS AND DO NOT
INDICATE OR PROJECT FUTURE PERFORMANCE. Each sub-account may, from time to
time, advertise performance relative to certain performance rankings and
indices compiled by independent organizations. More detailed information as to
the calculation of performance information, as well as comparisons with
unmanaged market indices, appears in the Statement of Additional Information.

Effective yields and total returns for the sub-accounts are based on the
investment performance of the corresponding portfolios of the Fund. The Fund's
performance in part reflects the Fund's expenses. See the Prospectus for the
Fund.

The yield of the Cash Management Sub-Account refers to the annualized income
generated by an investment in the Sub-Account over a specified 7 day period.
The yield is calculated by assuming that the income generated for that 7 day
period is generated each 7 day period over a 52 week period and is shown as a
percentage of the investment. The effective yield is calculated similarly but,
when annualized, the income earned by an investment in the Sub-Account is
assumed to be reinvested. The effective yield will be slightly higher than the
yield because of the compounding effect of this assumed reinvestment.

The yield of a sub-account (except the Cash Management Sub-Account) refers to
the annualized income generated by an investment in the sub-account over a
specified 30 day or one month period. The yield is calculated by assuming that
the income generated by the investment during that 30 day or one month period
is generated each period over a 12 month period and is shown as a percentage of
the investment.

The total return of a sub-account refers to return quotations assuming an
investment under a policy has been held in the sub-account for various periods
of time including, but not limited to, a period measured from the date the
sub-account commenced operations. When a sub-account has been in operation for
1, 5, and 10 years, respectively, the total return for these periods will be
provided.

The average annual total return quotations represent the average annual
compounded rates of return that would equate an initial investment of $1,000
under a policy to the redemption value of that investment as of the last day of
each of the periods for which total return quotations are provided. Average
annual total return information shows the average percentage change in the
value of an investment in the sub-account from the beginning date of the
measuring period to the end of that period. This standardized version of
average annual total return reflects all historical investment results, less
all charges and deductions applied against the sub-account (including any
surrender charge that would apply if an Owner terminated the policy at the end
of each period indicated, but excluding any deductions for premium taxes).

We may, in addition, advertise total return performance information computed on
a different basis. We may present total return information computed on the same
basis as described above, except deductions will not include the surrender
charge. This presentation assumes that the investment in the policy persists
beyond the period when the surrender charge applies, consistent with the
long-term investment and retirement objectives of the policy.

We may compare the performance of each sub-account in advertising and sales
literature to the performance of other variable annuity issuers in general or
to the performance of particular types of variable annuities investing in
mutual funds, or investment series of mutual funds with investment objectives
similar to each of the sub-accounts. Lipper Analytical Services, Inc.
("Lipper") and the Variable Annuity Research Data Service ("VARDS") are
independent services which monitor and rank the performances of variable
annuity issuers in each of the major categories of investment objectives on an
industry-wide basis. Other services or publications may also be cited in our
advertising and sales literature.

Lipper's rankings include variable life issuers as well as variable annuity
issuers. VARDS rankings compare only variable annuity issuers. The performance
analysis prepared by Lipper and VARDS each rank such issuers on the basis of
total return, assuming reinvestment of distributions, but do not take sales
charges, redemption fees or certain expense deductions at the separate account
level into consideration. In addition, VARDS prepares risk adjusted rankings,
which consider the effects of market risk on total return performance. This
type of ranking provides data as to which funds provide the highest total
return within various categories of funds defined by the degree of risk
inherent in their investment objectives.

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<PAGE> 36

We may also compare the performance of each sub-account in advertising and
sales literature to the Standard & Poor's composite index of 500 common stocks,
a widely used index to measure stock market performance. This unmanaged index
does not reflect any "deduction" for the expense of operating or managing an
investment portfolio. We may also make comparison to Lehman Brothers
Government/Corporate Bond Index, an index that includes the Lehman Brothers
Government Bond and Corporate Bond Indices. These indices are total rate of
return indices. The Government Bond Index includes the Treasury Bond Index
(public obligations of the U.S. Treasury) and the Agency Bond Index (publicly
issued debt of U.S. Government agencies, quasi-federal corporations, and
corporate debt guaranteed by the U.S. Government). The Corporate Bond Index
includes publicly issued, fixed rate, nonconvertible investment grade
dollar-denominated, SEC registered corporate debt. All issues have at least a
one-year maturity, and all returns are at market value inclusive of accrued
interest. Other independent indices such as those prepared by Lehman Brothers
Bond Indices may also be used as a source of performance comparison.

We may also compare the performance of each sub-account in advertising and
sales literature to the Dow Jones Industrial Average, a stock average of 30
blue chip stock companies that does not represent all new industries. Other
independent averages such as those prepared by Dow Jones & Company, Inc. may
also be used as a source of performance comparison. Day to day changes may not
be reflective of the overall market when an average is composed of a small
number of companies.

TAX DEFERRAL

Under current tax laws any increase in policy value is generally not taxable to
you or an annuitant until received, subject to certain exceptions. See "FEDERAL
TAX STATUS" on page ___. This deferred tax treatment may be beneficial to you
in building assets in a long-range investment program.

We may also distribute sales literature or other information including the
effect of tax-deferred compounding on a sub-account's investment returns, or
returns in general, which may be illustrated by tables, graphs, charts or
otherwise, and which may include a comparison, at various points in time, of
the return from an investment in a policy (or returns in general) on a
tax-deferred basis (assuming one or more tax rates) with the return on a
currently taxable basis where allowed by state law. All income and capital
gains derived from sub-account investments are reinvested and compound
tax-deferred until distributed. Such tax-deferred compounding can result in
substantial long-term accumulation of assets, provided that the investment
experience of the underlying portfolio of the Fund is positive.

FEDERAL TAX STATUS

THE FOLLOWING DISCUSSION IS GENERAL AND IS NOT INTENDED AS TAX ADVICE

INTRODUCTION

This discussion is not intended to address the tax consequences resulting from
all of the situations in which a person may be entitled to or may receive a
distribution under the annuity policy we issue. Any person concerned about
these tax implications should consult a tax adviser before initiating any
transaction. This discussion is based upon general understanding of the present
Federal income tax laws. No representation is made as to the likelihood of the
continuation of the present Federal income tax laws or of the current
interpretation by the Internal Revenue Service. Moreover, no attempt has been
made to consider any applicable state or other tax laws.

The policy may be purchased on a nonqualified tax basis ("Nonqualified Policy")
or purchased and used in connection with plans qualifying for favorable tax
treatment ("Qualified Policy"). The Qualified Policy was designed for use by
individuals whose premium payments are comprised of proceeds from and/or
contributions under retirement plans which are intended to qualify as plans
entitled to special income tax treatment under Sections 401(a), 401(k), 403(a),
403(b), 408 or 457 of the Code. The ultimate effect of Federal income taxes on
the amounts held under a policy, or annuity payments, and on the economic
benefit to the owner, an annuitant, or the beneficiary depends on the type of
retirement plan, on the tax and employment status of the individual concerned
and on our tax status. In addition, certain requirements must be satisfied in
purchasing a Qualified Policy with proceeds from a tax qualified plan and
receiving distributions from a Qualified Policy in order to continue receiving
favorable tax treatment. Therefore, purchasers of Qualified Policies should
seek legal and tax advice regarding the suitability of a policy for their
situation, the applicable requirements, and the tax treatment of the rights and
benefits of a policy. The following discussion assumes that Qualified Policies
are purchased with proceeds from and/or contributions under retirement plans
that receive the intended special Federal income tax treatment.

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<PAGE> 37

THE COMPANY'S TAX STATUS

The Variable Account is not separately taxed as a "regulated investment
company" under Subchapter M of the Code. The operations of the Variable Account
are a part of and taxed with our operations. We are taxed as a life insurance
company under Subchapter L of the Code.

At the present time, we make no charge for any Federal, state or local taxes
(other than premium taxes) that we incur which may be attributable to the
Variable Account or to the policies. We, however, reserve the right in the
future to make a charge for any such tax or other economic burden resulting
from the application of the tax laws that we determine to be properly
attributable to the Variable Account or to the policies.

TAX STATUS OF THE POLICY

DIVERSIFICATION REQUIREMENTS

Section 817(h) of the Code provides that separate account investments
underlying a policy must be "adequately diversified" in accordance with
Treasury regulations in order for the policy to qualify as an annuity policy
under Section 72 of the Code. The Variable Account through each portfolio of
the Fund, intends to comply with the diversification requirements prescribed in
regulations under Section 817(h) of the Code, which affect how the assets in
the various divisions of the Accounts may be invested. Although we do not have
control over the fund in which the Variable Account invests, we believe that
each portfolio in which the Variable Account owns shares will meet the
diversification requirements and that therefore the Policy will be treated as
an annuity under the Code.

In certain circumstances, variable annuity policyowners may be considered the
owners, for Federal income tax purposes, of the assets of the separate account
used to support their policies. In those circumstances, income and gains from
the separate account assets would be includable in the variable annuity
policyowner's gross income. Several years ago, the IRS stated in published
rulings that a variable policyowner will be considered the owner of separate
account assets if the policyowner possesses incidents of ownership in those
assets, such as the ability to exercise investment control over the assets.
More recently, the Treasury Department announced, in connection with the
issuance of regulations concerning investment diversification, that those
regulations "do not provide guidance concerning the circumstances in which
investor control of the investments of a segregated asset account may cause the
investor, 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 sub-accounts without being treated
as owners of the underlying assets."

The ownership rights under the policy are similar to, but different in certain
respects from, those described by the IRS in rulings in which it was determined
that policyowners were not owners of separate account assets. For example, the
owner of the policy has the choice of more subdivisions to which to allocate
premiums and policy values then such rulings, has a choice of investment
strategies different from such rulings, and may be able to transfer among
subdivisions more frequently than in such rulings. These differences could
result in the policyowner being treated as the owner of the assets of the
Variable Account. In addition, we do not know what standards will be set forth
in the regulations or rulings which the Treasury Department has stated it
expects to issue. We therefore reserve the right to modify the policy as
necessary to attempt to prevent the policyowner from being considered the owner
of the assets of the Variable Account.

REQUIRED DISTRIBUTIONS

In addition to the requirements of Section 817(h) of the Code, in order to be
treated as an annuity policy for Federal income tax purposes, Section 72(s) of
the Code requires any Nonqualified Policy to provide that (a) if any owner dies
on or after the annuity date but prior to the time the entire interest in the
Policy has been distributed, the remaining portion of such interest will be
distributed at least as rapidly as under the method of distribution being used
as of the date of that owner's death; and (b) if any owner dies prior to the
annuity commencement date, the entire interest in the Policy will be
distributed within five years after the date of the owner's death. These
requirements will be considered satisfied as to any portion of the owner's
interest which is payable to or for the benefit of a "designated beneficiary"
and which is distributed over the life of such "designated beneficiary" or over
a period not extending beyond the life expectancy of that beneficiary, provided
that such distributions begin within one year of that owner's death. The
owner's "designated beneficiary" is the person designated by such owner as a
beneficiary and to whom ownership of the Policy passes by reason of death and
must be a natural person. However, if the owner's "designated beneficiary" is
the surviving spouse of the owner, the Policy may be continued with the
surviving spouse as the new owner.

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<PAGE> 38

The Nonqualified Policies contain provisions which are intended to comply with
the requirements of Section 72(s) of the Code, although no regulations
interpreting these requirements have yet been issued. We intend to review such
provisions and modify them if necessary to assure that they comply with the
requirements of Code Section 72(s) when clarified by regulation or otherwise.

Other rules may apply to Qualified Policies (see "Minimum Distribution
Requirements ("MDR") for IRA's, page ).

The following discussion assumes that the policies will qualify as annuity
contracts for Federal income tax purposes.

TAXATION OF ANNUITIES

IN GENERAL

Section 72 of the Code governs taxation of annuities in general. We believe
that an owner who is a natural person generally is not taxed on increases in
the value of a policy until distribution occurs by withdrawing all or part of
the accumulation value (e.g., partial withdrawals and surrenders) or as annuity
payments under the annuity option elected. For this purpose, the assignment,
pledge, or agreement to assign or pledge any portion of the accumulation value
(and in the case of a Qualified Policy, any portion of an interest in the
qualified plan) generally will be treated as a distribution. The taxable
portion of a distribution (in the form of a single sum payment or an annuity)
is taxable as ordinary income.

The owner of any annuity policy who is not a natural person generally must
include in income any increase in the excess of the policy's accumulation value
over the policy's "investment in the contract" during the taxable year. There
are some exceptions to this rule and a prospective owner that is not a natural
person may wish to discuss these with a tax adviser.

The following discussion generally applies to policies owned by natural
persons.

WITHDRAWALS/DISTRIBUTIONS

In the case of a distribution under a Qualified Policy (other than a Section
457 plan), under Section 72(e) of the Code a ratable portion of the amount
received is taxable, generally based on the ratio of the "investment in the
contract" to the participant's total accrued benefit or balance under the
retirement plan. The "investment in the contract" generally equals the portion,
if any, of any premium payments paid by or on behalf of any individual under a
Policy which was not excluded from the individual's gross income. For policies
issued in connection with qualified plans, the "investment in the contract" can
be zero. Special tax rules may be available for certain distributions from
Qualified Policies.

In the case of a withdrawal/distribution (e.g., surrender, partial withdrawal
or systematic withdrawal) under a Nonqualified Policy before the annuity
commencement date, under Code Section 72(e) amounts received are generally
first treated as taxable income to the extent that the accumulation value
immediately before the withdrawal exceeds the "investment in the contract" at
that time. Any additional amount withdrawn is not taxable.

ANNUITY PAYMENTS

Although tax consequences may vary depending on the annuity option elected
under an annuity policy, under Code Section 72(b), generally gross income does
not include that part of any amount received as an annuity under an annuity
policy that bears the same ratio to such amount as the investment in the
contract bears to the expected return at the annuity starting date. For
variable income payments, in general, the taxable portion (prior to recovery of
the investment in the contract) is determined by a formula which establishes
the specific dollar amount of each annuity payment that is not taxed. The
dollar amount is determined by dividing the "investment in the contract" by the
total number of expected periodic payments. For fixed income payments (prior to
recovery of the investment in the contract), in general, there is no tax on the
amount of each payment which represents the same ratio that the "investment in
the contract" bears to the total expected value of the annuity payments for the
term of the payments; however, the remainder of each income payment is taxable.
In all cases, after the "investment in the contract" is recovered, the full
amount of any additional annuity payments is taxable.

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<PAGE> 39

TAXATION OF DEATH BENEFIT PROCEEDS

Amounts may be distributed from a policy because of an death of the owner or
the last surviving annuitant. Generally, such amounts are includable in the
income of the recipient as follows:

1. if distributed in a lump sum, they are taxed in the same manner as a
surrender of the policy; or
2. if distributed under a payment option, they are taxed in the same manner
as annuity payments.

PENALTY TAX ON CERTAIN WITHDRAWALS

In the case of a distribution pursuant to a Nonqualified Policy, there may be
imposed a Federal penalty tax equal to 10% of the amount treated as taxable
income. In general, however, there is no penalty tax on distributions:

1. made on or after the taxpayer reaches age 59 1/2;

2. made on or after the death of an owner (or if the owner is not an
individual, the death of the primary annuitant);

3. attributable to the owner becoming disabled;

4. as part of a series of substantially equal periodic payments (not
less frequently than annually) for the life (or life
expectancy) of the taxpayer or the joint lives (or joint life
expectancies) of the taxpayer and beneficiary;

5. made under an annuity policy that is purchased with a single premium
when the annuity starting date is no later than a year from purchase
of the annuity and substantially equal periodic payments are made,
not less frequently than annually, during the annuity period; and
6. made under certain annuities issued in connection with structured
settlement agreements.

Other tax penalties may apply to certain distributions under a Qualified
Policy, as well as to certain contributions, loans and other circumstances.

TRANSFERS, ASSIGNMENTS, OR EXCHANGES OF A POLICY

A transfer of ownership, the designation of an annuitant or other beneficiary
who is not also the owner, the designation of certain annuity starting dates,
or the exchange of a policy may result in certain tax consequences to the owner
that are not discussed herein. An owner contemplating any such transfer,
assignment, designation, or exchange of a policy should contact a tax adviser
with respect to the potential tax effects of such a transaction.

WITHHOLDING

Pension and annuity distributions generally are subject to withholding for the
recipient's Federal income tax liability at rates that vary according to the
type of distribution and the recipient's tax status. Recipients, however,
generally are provided the opportunity to elect not to have tax withheld from
distributions. Effective January 1, 1993, withholding is mandatory for certain
distributions from Qualified contracts.

MULTIPLE POLICIES

Section 72(e)(11) of the Code treats all nonqualified deferred annuity policies
entered into after October 21, 1988 that are issued by us (or our affiliates)
to the same owner during any calendar year as one annuity policy for purposes
of determining the amount includable in gross income under Code Section 72(e).
The effects of this rule are not yet clear; however, it could effect the time
when income is taxable and the amount that might be subject to the 10% penalty
tax described above. In addition, the Treasury Department has specific
authority to issue regulations that prevent the avoidance of Section 72(e)
through the serial purchase of annuity contracts or otherwise. There may also
be other situations in which the Treasury may conclude that it would be
appropriate to aggregate two or more annuity contracts purchased by the same
owner. Accordingly, a policyowner should consult a tax adviser before
purchasing more than one annuity contract.

34
<PAGE> 40

POSSIBLE TAX CHANGES

In recent years, legislation has been proposed that would have adversely
modified the federal taxation of certain annuities. For example, one such
proposal would have changed the tax treatment of non-qualified annuities that
did not have "substantial life contingencies" by taxing income as it is
credited to the annuity. Although as of the date of this prospectus Congress is
not considering any legislation regarding the taxation of annuities, there is
always the possibility that the tax treatment of annuities could change by
legislation or other means (such as IRS regulations, revenue rulings, and
judicial decisions). Moreover, it is also possible that any legislative change
could be retroactive (that is, effective prior to the date of such change).

TAXATION OF QUALIFIED PLANS

The policies are designed for use with several types of qualified plans. The
tax rules applicable to participants in these qualified plans vary according to
the type of plan and the terms and conditions of the plan itself. Special
favorable tax treatment may be available for certain types of contributions and
distributions. Adverse tax consequences may result from contributions in excess
of specified limits; distributions prior to age 59 1/2 (subject to certain
exceptions); distributions that do not conform to specified commencement and
minimum distribution rules; aggregate distributions in excess of a specified
annual amount; and in certain other circumstances. Therefore, no attempt is
made to provide more than general information about the use of the policies
with the various types of qualified retirement plans. Policyowners, the
annuitants, and beneficiaries are cautioned that the rights of any person to
any benefits under these qualified retirement plans may be subject to the terms
and conditions of the plans themselves, regardless of the terms and conditions
of the policy, but we shall not be bound by the terms and conditions of such
plans to the extent such terms contradict the policy, unless we consent. Some
retirement plans are subject to distribution and other requirements that are
not incorporated in the administration of the policies. Owners are responsible
for determining that contributions, distributions and other transactions with
respect to the policies satisfy applicable law. Brief descriptions follow of
the various types of qualified retirement plans in connection with which we
will issue a policy. We will amend the policy as instructed to conform it to
the applicable legal requirements for such plan.

INDIVIDUAL RETIREMENT ANNUITIES AND SIMPLIFIED EMPLOYEE PENSIONS (SEP/IRAS)

Section 408 of the Code permits eligible individuals to contribute to an
individual retirement program known as an "Individual Retirement Annuity" or
"IRA". These IRAs are subject to limits on the amount that may be contributed,
the persons who may be eligible and on the time when distributions may
commence. Also, distributions from certain other types of qualified retirement
plans may be "rolled over" on a tax-deferred basis into an IRA. Sales of the
policy for use with IRAs may be subject to special requirements of the Internal
Revenue Service.

Section 408(k) of the Code allows employers to establish simplified employee
pension plans for their employees, using an IRA for such purpose, if certain
criteria are met. Under these plans the employer may, within specified limits,
make deductible contributions on behalf of the employee to an IRA. Employers
intending to use the policy in connection with such plans should seek advice.

Purchasers of a policy for use with IRAs will be provided with supplemental
information required by the Internal Revenue Service or other appropriate
agency. Such purchasers will have the right to revoke their purchase within
seven days of the earlier of the establishment of the IRA or their purchase.
Purchasers should seek advice as to the suitability of the policy for use with
IRAs. The Internal Revenue Service has not reviewed the Policy for
qualification as an IRA, and has not addressed in a ruling of general
applicability whether a death benefit provision such as the provision in the
policy comports with IRA qualification requirements.

35
<PAGE> 41

MINIMUM DISTRIBUTION REQUIREMENTS ("MDR") FOR IRAS

The Code requires that minimum distribution from an IRA begin no later than
April 1 of the year following the year in which the owner attains age 70 1/2.
Failure to do so results in a penalty of 50% of the amount not withdrawn. This
penalty is in addition to normal income tax. We will calculate the MDR only for
funds invested in this Policy and subject to our administrative guidelines,
including but not limited to: 1) minimum withdrawal amount of $250; 2) while
surrender charges are applicable, up to 10% of total premium plus 100% of any
sub-account earnings and 100% of current policy year's Fixed Account interest
may be withdrawn; and 3) use of MDR counts as the once a policy year free
withdrawal.

As an administrative practice, we will calculate and distribute an amount from
an IRA using the method contained in the Code's minimum distribution
requirements. The annual distribution is determined by dividing the prior
December 31st value for the policy by a life expectancy factor. The factor will
be based on either your life or the life expectancies of your life and your
designated beneficiary, as directed by you, and based on tables found in the
IRS' regulations. Factors are redetermined for each year's distribution. The
value of the policy to be used in this calculation is the policy value on the
December 31st prior to the year for which each subsequent payment is made. The
life expectancy factor is determined by using the appropriate IRS chart based
on one of the following circumstances:

1. Your life expectancy (Single Life Expectancy);
2. Joint life expectancy between you and your designated beneficiary
(Joint Life and Last Survivor Expectancy); or
3. Your life expectancy and a non-spouse beneficiary more than 10
years younger than you (Minimum Distribution Incident
Benefit Requirement).

The Code Minimum Distribution Requirements also apply to distribution from
qualified plans other than IRA's. You are responsible for ensuring that
distributions from such plans satisfy the Code minimum distribution
requirements.

CORPORATE AND SELF-EMPLOYED (H.R.10 AND KEOGH) PENSION AND PROFIT-SHARING PLANS

Sections 401(a), 401(k) and 403(a) of the Code permit corporate employers to
establish various types of tax-favored retirement plans for employees. The
Self-Employed Individual Tax Retirement Act of 1962, as amended, commonly
referred to as "H.R.10" or "Keogh", permits self-employed individuals also to
establish such tax-favored retirement plans for themselves and their employees.
Such retirement plans may permit the purchase of the policies in order to
accumulate retirement savings under the plans. Adverse tax consequences to the
plan, to the participant or to both may result if this policy is assigned or
transferred to any individual as a means to provide benefit payments. Employers
intending to use the policy in connection with such plans should seek advice.

DEFERRED COMPENSATION PLANS

Section 457 of the Code provides for certain deferred compensation plans. These
plans may be offered with respect to service for state governments, local
governments, political subdivisions, agencies, instrumentalities and certain
affiliates of such entities, and tax exempt organizations. The plans may permit
participants to specify the form of investment for their deferred compensation
account. All distributions are taxable as ordinary income. All investments are
owned by the sponsoring employer and are subject to the claims of the general
creditors of the employer.

TAX-SHELTERED ANNUITY PLANS

Section 403(b) of the Code permits public school systems and certain tax exempt
organizations specified in Section 501(c)(3) to make payments to purchase
annuity policies for their employees. Such payments are excludable from the
employee's gross income (subject to certain limitations), but may be subject to
FICA (Social Security) taxes. Under Code requirements, Section 403(b) annuities
generally may not permit distribution of: 1) elective contributions made in
years beginning after December 31, 1988; 2) earnings on those contributions;
and 3) earnings on amounts attributed to elective contributions held as of the
end of the last year beginning before January 1, 1989. Under Code requirements,
distributions of such amounts will be allowed only: 1) upon the death of the
employee; or 2) on or after attainment of age 59 1/2; or 3) separation from
service; or 4) disability; or 5) financial hardship, except that income
attributable to elective contributions may not be distributed in the case of
hardship. With respect to these restrictions, the Company is relying upon a
no-action letter dated November 28, 1988 from the staff of the SEC to the
American Council of Life Insurance, the requirements for which have been or
will be complied with by the Company.

OTHER TAX CONSEQUENCES

As noted above, the foregoing comments about the Federal tax consequences under
these policies are not exhaustive and special rules are provided with respect
to other tax situations not discussed in this Prospectus. Further, the Federal
income tax consequences discussed herein reflect our understanding of current
law and the law may change. Federal estate and state and local estate,
inheritance, and other tax consequences of ownership or receipt of
distributions under a Policy depend on the individual circumstances of each
owner or recipient of the distribution. A tax adviser should be consulted for
further information.

36
<PAGE> 42

RESTRICTIONS UNDER THE TEXAS
OPTIONAL RETIREMENT PROGRAM

Section 36.105 of the Texas Educational Code permits participants in the Texas
Optional Retirement Program ("ORP") to withdraw their interest in a variable
annuity policy issued under the ORP only upon: 1) termination of employment in
the Texas public institutions of higher education; 2) retirement; or 3) death.
Accordingly, a participant in the ORP, or the participant's estate if the
participant has died, will be required to obtain a certificate of termination
from the employer or a certificate of death before policy values can be
withdrawn or surrendered.

Other restrictions with respect to the election, commencement, or distribution
of benefits may apply under Qualified Policies or under the terms of the plans
in respect of which Qualified Policies are issued.

DISTRIBUTION OF POLICIES

Canada Life of America Financial Services, Inc. ("CLAFS") acts as the principal
underwriter, as defined in the Investment Company Act of 1940, of the policies
for the Variable Account. CLAFS is a wholly-owned subsidiary of our Company.
CLAFS, a Georgia corporation organized on January 18, 1988, is registered with
the SEC under the Securities Exchange Act of 1934 (the "1934 Act") as a
broker-dealer and is a member of the National Association of Securities
Dealers, Inc. ("NASD"). CLAFS' principal business address is 6201 Powers Ferry
Road, NW, Atlanta, Georgia.

Sales of the policies will be made by registered representatives of
broker-dealers authorized by CLAFS to sell the policies. Such registered
representatives will be licensed insurance agents of our Company. CLAFS and our
Company have entered into an exclusive promotional agent (distribution)
agreement with Seligman Financial Services, Inc. ("Seligman Financial").
Seligman Financial is a broker-dealer registered with the SEC under the 1934
Act and is a member of the NASD. Under the promotional agent distribution
agreement, Seligman Financial will recruit and provide sales training and
licensing assistance to such registered representatives. In addition, Seligman
Financial will prepare sales and promotional materials for the policies. CLAFS
will pay distribution compensation to selling broker-dealers in varying amounts
which, under normal circumstances, are not expected to exceed 6.5% of premium
payments under the policies. Seligman Financial may from time to time pay
additional compensation pursuant to promotional contracts. In some
circumstances, Seligman Financial may provide reimbursement of certain sales
and marketing expenses. CLAFS will pay the promotional agent a fee for
providing marketing support for the distribution of the contracts.

The policies will be offered to the public on a continuous basis, and we do not
anticipate discontinuing the offering of the policies. However, we reserve the
right to discontinue the offering.

LEGAL PROCEEDINGS

There are at present no legal proceedings to which the Variable Account is a
party or the assets of the Variable Account are subject. We are not involved in
any litigation that is of material importance in relation to our total assets
or that relates to the Variable Account.

VOTING RIGHTS

To the extent deemed to be required by law and as described in the Prospectus
for the Fund, portfolio shares held in the Variable Account and in our general
account will be voted by us at regular and special shareholder meetings of the
Fund in accordance with instructions received from persons having voting
interests in the corresponding sub-accounts. If however, the Investment Company
Act of 1940 or any regulation thereunder should be amended, or if the present
interpretation thereof should change, or if we determine that we are allowed to
vote the portfolio shares in our own right, we may elect to do so.

The number of votes which are available to you will be calculated separately
for each sub-account of the Variable Account, and may include fractional votes.
The number of votes attributable to a sub-account will be determined by
applying your percentage interest, if any, in a particular sub-account to the
total number of votes attributable to that sub-account. You hold a voting
interest in each sub-account to which the Variable Account value is allocated.
You only have voting interest prior to the annuity date or maturity date.

37
<PAGE> 43

The number of votes of a portfolio which are available to you will be
determined as of the date coincident with the date established for determining
shareholders eligible to vote at the relevant meeting of the Fund. Voting
instructions will be solicited by written communication prior to such meeting
in accordance with procedures established by the Fund.

Fund shares as to which no timely instructions are received and shares held by
us in a sub-account as to which you have no beneficial interest will be voted
in proportion to the voting instructions which are received with respect to all
policies participating in that sub-account. Voting instructions to abstain on
any item to be voted upon will be applied to reduce the total number of votes
cast on such item.

Each person having a voting interest in a sub-account will receive proxy
materials, reports, and other material relating to the appropriate series.

FINANCIAL STATEMENTS

Our balance sheets as of December 31, 1995 and 1994, and the related statements
of operations, accumulated deficit, and cash flows for each of the three years
in the period ended December 31, 1995, as well as the Report of Independent
Auditors, are contained in the Statement of Additional Information. The
Variable Account's statement of net assets as of December 31, 1995, statements
of operations for the year then ended, and statements of changes in net assets
for fiscal years ended December 31, 1995 and December 31, 1994, as well as the
Report of Independent Auditors, are contained in the Statement of Additional
Information.

The financial statements of the Company included in the Statement of Additional
Information should be considered only as bearing on the ability of the Company
to meet its obligations under the policies. They should not be considered as
bearing on the investment performance of the assets held in the Variable
Account.

38
<PAGE> 44

STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS

<TABLE>
<S> <C>
ADDITIONAL POLICY PROVISIONS
Contract.................................................................................................... 2
Incontestability............................................................................................ 2
Misstatement of Age......................................................................................... 2
Currency.................................................................................................... 2
Place of Payment............................................................................................ 3
Non-Participation........................................................................................... 3
Our Consent................................................................................................. 3

CALCULATION OF YIELDS AND TOTAL RETURNS
Cash Management Yields...................................................................................... 3
Other Sub-Account Yields.................................................................................... 4
Total Returns............................................................................................... 5
Effect of the Policy Administration Charge on Performance Data.............................................. 6

SAFEKEEPING OF ACCOUNT
ASSETS........................................................................................................ 7
STATE REGULATION.............................................................................................. 7
RECORDS AND REPORTS........................................................................................... 7
LEGAL MATTERS................................................................................................. 7
EXPERTS....................................................................................................... 7
OTHER INFORMATION............................................................................................. 7
FINANCIAL STATEMENTS.......................................................................................... 8

</TABLE>

39
<PAGE> 45

THE FIXED ACCOUNT

DUE TO EXEMPTIVE AND EXCLUSIONARY PROVISIONS, OUR GENERAL ACCOUNT, INCLUDING
THE FIXED ACCOUNT, IS NOT SUBJECT TO OR REGISTERED UNDER THE SECURITIES ACT OF
1933, AND IS NOT SUBJECT TO OR REGISTERED AS AN INVESTMENT COMPANY UNDER THE
1940 ACT. THEREFORE, THE STAFF OF THE SECURITIES AND EXCHANGE COMMISSION HAS
NOT REVIEWED THE DISCLOSURES IN THIS PROSPECTUS RELATING TO THE FIXED ACCOUNT.
HOWEVER, DISCLOSURES ABOUT THE GENERAL ACCOUNT AND THE FIXED ACCOUNT MAY BE
SUBJECT TO CERTAIN GENERALLY APPLICABLE PROVISIONS OF FEDERAL SECURITIES LAWS
CONCERNING THE ACCURACY AND COMPLETENESS OF STATEMENTS IN PROSPECTUSES.

The Fixed Account is not part of and does not depend on the investment
performance of the Variable Account. Amounts in the Fixed Account are part of
our general account. We credit interest to amounts in the Fixed Account at
rates we determine. We guarantee the interest rate will not be less than 3% per
annum. At our sole discretion, we may credit a higher current interest rate. .
Each net premium allocated to the Fixed Account will be credited with a
specified interest rate which will remain in effect for 12 calendar months.
After such 12 month period, the net premium and any earnings accumulated
thereon will be credited with the rate of interest currently credited to new
monies allocated to the Fixed Account. This means that if you allocate monies
to the Fixed Account on a monthly basis, over the course of 12 months, those
monies may be credited with 12 different interest rates. We will establish a
new interest rate the first business day of each calendar month.

You may allocate all or a portion of initial and any additional net premiums to
the Fixed Account. See "Net Premium Allocation" on page ___. You may transfer
all or a part of an amount in the sub-account(s) to the Fixed Account. You may
transfer a part of an amount in the Fixed Account to the sub-account(s),
subject to these restrictions, and except for transfers made pursuant to DCA
(see page ___):

2. the maximum transfer amount is 50% of the Fixed Account value on the
date of the transfer, unless the balance after the transfer is less
than $5,000, in which case the entire value may be transferred.

Transfers to and from the Fixed Account may be subject to a transfer fee, and
are also subject to other restrictions. See "Transfers" on page ___.

A portion or all of the policy administration charge will be deducted from
amounts in the Fixed Account to the extent that amounts in the sub-accounts are
insufficient to cover the charge. See "Policy Administration Charge" on page
___. A fee for taxes may also be deducted from amounts in the Fixed Account.
See "Taxes" on page ___.

You may withdraw all or a part of your Fixed Account value. See "Partial
Withdrawals" on page ___ and "Proceeds on Surrender" on page ___. Upon a
partial withdrawal or a cash surrender, you may incur a surrender charge. See
"Surrender Charge" on page ___. We have the right to defer payment of any cash
surrender value or partial withdrawal from the Fixed Account for up to six
months from the date we receive your written notice for surrender. See "Payment
of Benefits, Withdrawals, Cash Surrenders and Transfers Postponement" on page
___.

FIXED ACCOUNT VALUE

The Fixed Account value before the annuity date or maturity date is:

1. the sum of the net premiums allocated to the Fixed Account; plus
2. any amounts transferred to the Fixed Account from a sub-account of the
Variable Account; minus
3. any cash surrender value withdrawn or amounts transferred from the
Fixed Account; minus
4. any policy administration charge deducted from the amount in the
Fixed Account; plus
5. interest credited to the amount in the Fixed Account.

40
<PAGE> 46

APPENDIX A: STATE PREMIUM TAXES

Premium taxes vary according to the state and are subject to change. In many
jurisdictions there is no tax at all. For current information, a tax adviser
should be consulted.

<TABLE>
<CAPTION>
TAX RATE
STATE QUALIFIED NONQUALIFIED
CONTRACTS CONTRACTS
<S> <C> <C>
California .50% 2.35%

District of Columbia 2.25 2.25

Kansas .00 2.00

Kentucky 2.00 2.00

Maine .00 2.00

Nevada .00 3.50

South Dakota .00 1.25

West Virginia 1.00 1.00

Wyoming .00 1.00

</TABLE>

41
<PAGE> 47

PART B

INFORMATION REQUIRED IN A

STATEMENT OF ADDITIONAL INFORMATION

<PAGE> 48

CANADA LIFE INSURANCE COMPANY OF AMERICA

ADMINISTRATIVE OFFICE: 6201 POWERS FERRY ROAD, NW, ATLANTA, GEORGIA 30339

PHONE: (800) 333-2542
-------------------------------------------------------------------------

STATEMENT OF ADDITIONAL INFORMATION
VARIABLE ANNUITY ACCOUNT 2

FLEXIBLE PREMIUM VARIABLE DEFERRED ANNUITY POLICY
-------------------------------------------------------------------------

This Statement of Additional Information contains information in addition to
the information described in the Prospectus for the flexible premium variable
deferred annuity policy (the "policy") offered by Canada Life Insurance Company
of America. This Statement of Additional Information is not a Prospectus, and
it should be read only in conjunction with the Prospectuses for the policy and
Seligman Portfolios, Inc. (the "Fund"). The Prospectuses are dated the same
date as this Statement of Additional Information. You may obtain copies of the
Prospectuses by writing or calling us at our address or phone number shown
above.

The date of this Statement of Additional Information is May 1, 1996.

<PAGE> 49

STATEMENT OF ADDITIONAL INFORMATION

TABLE OF CONTENTS

<TABLE>

ADDITIONAL POLICY PROVISIONS
<S> <C>
Contract.................................................................................................................. 2
Incontestability.......................................................................................................... 2
Misstatement Of Age....................................................................................................... 2
Currency.................................................................................................................. 3
Place Of Payment.......................................................................................................... 3
Non-Participation......................................................................................................... 3
Our Consent............................................................................................................... 3

CALCULATION OF YIELDS AND TOTAL RETURNS

Cash Management Yields.................................................................................................... 3
Other Sub-Account Yields.................................................................................................. 4
Total Returns............................................................................................................. 5
Effect Of The Policy Administration Charge On Performance Data............................................................ 6

SAFEKEEPING OF ACCOUNT ASSETS................................................................................................... 7

STATE REGULATION................................................................................................................ 7

RECORDS AND REPORTS............................................................................................................. 7

LEGAL MATTERS................................................................................................................... 7

EXPERTS......................................................................................................................... 7

OTHER INFORMATION............................................................................................................... 7

FINANCIAL STATEMENTS............................................................................................................ 8
</TABLE>
ADDITIONAL POLICY PROVISIONS

CONTRACT

The entire contract is made up of the policy and the application for the
policy. The statements made in the application are deemed representations and
not warranties. We cannot use any statement in defense of a claim or to void
the policy unless it is contained in the application and a copy of the
application is attached to the policy at issue.

INCONTESTABILITY

We will not contest the policy after it has been in force during any
annuitant's lifetime for two years from the date of issue of the policy.

MISSTATEMENT OF AGE

If the age of any annuitant has been misstated, we will pay the amount which
the proceeds would have purchased at the correct age.

If we make an overpayment because of an error in age, the overpayment plus
interest at 3% compounded annually will be a debt against the policy. If the
debt is not repaid, future payments will be reduced accordingly.

2
<PAGE> 50

If we make an underpayment because of an error in age, any annuity payments
will be recalculated at the correct age, and future payments will be adjusted.
The underpayment with interest at 3% compounded annually will be paid in a
single sum.

CURRENCY

All amounts payable under the policy will be paid in United States currency.

PLACE OF PAYMENT

All amounts payable by us will be payable at our Administrative Office at the
address shown on page one of this Statement of Additional Information.

NON-PARTICIPATION

The policy is not eligible for dividends and will not participate in our
divisible surplus.

OUR CONSENT

If our consent is required, it must be given in writing. It must bear the
signature, or a reproduction of the signature, of our President, Secretary or
Actuary.

CALCULATION OF YIELDS AND TOTAL RETURNS

CASH MANAGEMENT YIELDS

We may, from time to time, quote in advertisements and sales literature the
current annualized yield of the Cash Management Sub-Account for a 7 day period
in a manner which does not take into consideration any realized or unrealized
gains or losses on shares of the Cash Management Portfolio or on its portfolio
securities. This current annualized yield is computed by determining the net
change (exclusive of realized gains and losses on the sale of securities and
unrealized appreciation and depreciation) at the end of the 7 day period in the
value of a hypothetical account under a policy having a balance of 1 unit of
the Cash Management Sub-Account at the beginning of the period, dividing such
net change in account value by the value of the account at the beginning of the
period to determine the base period return, and annualizing this quotient on a
365 day basis. The net change in account value reflects: 1) net income from the
portfolio attributable to the hypothetical account; and 2) charges and
deductions imposed under the policy which are attributable to the hypothetical
account. The charges and deductions include the per unit charges for the
hypothetical account for: 1) the policy administration charge; 2) the daily
administration fee; and 3) the mortality and expense risk charge. The yield
calculation reflects an average per unit policy administration charge of $30
per year deducted at the end of each policy year. Current Yield will be
calculated according to the following formula:

Current Yield = ((NCS-ES)/UV) X (365/7)

Where:

ES = per unit expenses of the Sub-Account for the 7 day
period.
UV = the unit value on the first day of the 7 day period.

The current yield for the 7 day period ended December 31, 1995 was 2.95%.

3
<PAGE> 51

We may also quote the effective yield of the Cash Management Sub-Account for
the same 7 day period, determined on a compounded basis. The effective yield is
calculated by compounding the unannualized base period return according to the
following formula:

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

Where:

NCS = the net change in the value of the portfolio (exclusive
of realized gains and losses on the sale of securities
and unrealized appreciation and depreciation) for the 7
day period attributable to a hypothetical account having
a balance of 1 Sub-Account unit.
ES = per unit expenses of the Sub-Account for the 7 day
period.
UV = the unit value for the first day of the 7 day period.

The effective yield for the 7 day period ended December 31, 1995 was 2.99%.

Because of the charges and deductions imposed under the policy, the yield for
the Cash Management Sub-Account will be lower than the yield for the Cash
Management Portfolio.

The yields on amounts held in the Cash Management Sub-Account normally will
fluctuate on a daily basis. Therefore, the disclosed yield for any given past
period is not an indication or representation of future yields or rates of
return. The Cash Management Sub-Account's actual yield is affected by changes
in interest rates on money market securities, average portfolio maturity of the
Cash Management Portfolio, the types and quality of portfolio securities held
by the Cash Management Portfolio of the Fund, and the Cash Management
Portfolio's operating expenses.

OTHER SUB-ACCOUNT YIELDS

We may, from time to time, quote in sales literature and advertisements the
current annualized yield of one or more of the sub-accounts (except the Cash
Management Sub-Account) for 30 day or one month periods. The annualized yield
of a sub-account refers to income generated by the sub-account over a specific
30 day or one month period. Because the yield is annualized, the yield
generated by a sub-account during the 30 day or one month period is assumed to
be generated each period over a 12 month period. The yield is computed by: 1)
dividing the net investment income of the series attributable to the
sub-account units less sub-account expenses for the period; by 2) the maximum
offering price per unit on the last day of the period multiplied by the daily
average number of units outstanding for the period; by 3) compounding that
yield for a 6 month period; and by 4) multiplying that result by 2. Expenses
attributable to the sub-account include 1) the policy administration charge; 2)
the daily administration fee, and 3) the mortality and expense risk charge. The
yield calculation reflects a policy administration charge of $30 per year per
policy deducted at the end of each policy year. For purposes of calculating the
30 day or one month yield, an average policy administration charge per dollar
of policy value in the Variable Account is used to determine the amount of the
charge attributable to the sub-account for the 30 day or one month period as
described below. The 30 day or one month yield is calculated according to the
following formula:

6
Yield = 2 x ((((NI-ES)/(U x UV)) + 1) - 1)
Where:

NI = net income of the portfolio for the 30 day or one month
period attributable to the sub-account's units.
ES = expenses of the sub-account for the 30 day or one month
period.
U = the average number of units outstanding.
UV = the unit value at the close (highest) of the last day in
the 30 day or one month period.

Because of the charges and deductions imposed under the policies, the yield for
the sub-account will be lower than the yield for the corresponding portfolio.

The yield on the amounts held in the sub-accounts normally will fluctuate over
time. Therefore, the disclosed yield for any given past period is not an
indication or representation of future yields or rates of return. The
sub-account's actual yield is affected by the types and quality of portfolio
securities held by the portfolio, and its operating expenses.

4
<PAGE> 52

Yield calculations do not take into account the surrender charge under the
policy. The surrender charge is equal to 6% of premiums paid during that
current policy year and the previous 6 policy years on certain amounts
surrendered or withdrawn under the policy as described in the Prospectus. A
surrender charge will not be imposed on the first withdrawal in any policy year
on an amount up to 10% of the premiums paid during that current policy year and
the previous 6 policy years, if the systematic withdrawal privilege is not
elected in that policy year.

TOTAL RETURNS

We may, from time to time, also quote in sales literature or advertisements
total returns, including average annual total returns for one or more of the
sub-accounts for various periods of time. We will always include quotes of
average annual total return for the period measured from the date the
sub-account commenced operations. When a sub-account has been in operation for
1, 5, and 10 years, respectively, the average annual total return for these
periods will be provided.

Average annual total returns for other periods of time may, from time to time,
also be disclosed. Average annual total returns represent the average annual
compounded rates of return that would equate an initial investment of $1,000
under a policy to the redemption value of that investment as of the last day of
each of the periods. The ending date for each period for which total return
quotations are provided will be for the most recent quarter-end practicable,
considering the type and media of the communication and will be stated in the
communication.

Average annual total returns will be calculated using sub-account unit values
which we calculate on each valuation day based on the performance of the
sub-account's underlying portfolio, and the deductions for the mortality and
expense risk charge, daily administration fee and the policy administration
charge of $30 per year per policy deducted at the end of each policy year. For
purposes of calculating total return, an average per dollar policy
administration charge attributable to the hypothetical account for the period
is used. The total return will then be calculated according to the following
formula:

1/N
TR = ((ERV/P) )-1

Where:

TR = the average annual total return net of sub-account recurring
charges.
ERV = the ending redeemable value of the hypothetical account
at the end of the period.
P = a hypothetical initial payment of $1,000.
N = the number of years in the period.

Average annual total returns for the periods shown below were:

<TABLE>
<CAPTION>
Sub-Account Sub-Account
1 Year Return Cumulative from Fund 5 Year
Year Ended Inception 06/21/93 Return 12/31/90
12/31/95 to 12/31/95 to 12/31/95
<S> <C> <C> <C>
Capital 19.64% 11.56% 16.33%
Cash Management (1.78)% 3.42% 1.98%
Common Stock 19.70% 11.76% 14.21%
Fixed Income Securities 11.83% 5.88% 6.25%
Income 10.53% 8.21% 11.34%
Global 4.09% 6.34% *
Communications and Information 30.71% 28.22% **
Frontier 25.70% 25.65% **
Global Smaller Companies 9.96% 10.84% **
High-Yield Bond *** 1.34% ***
</TABLE>

* The Date of Inception of the Global Portfolio was May 3, 1993.
Therefore, total returns are provided only for Cumulative from
Inception and 1 Year Return.

5
<PAGE> 53

** The Date of Inception for the Communications and Information, Frontier
and Global Smaller Companies Portfolios was October 11, 1994. Therefore,
total returns are provided only for Cumulative from Inception and 1
Year Return.

*** The Date of Inception of the High-Yield Bond Portfolio was May 1, 1995.
Therefore, only Cumulative from Inception total returns are provided.

As of December 31, 1995, the Global Technology and Global Growth Opportunities
Sub-Accounts had not commenced operations. Accordingly, average annual total
return information is not available for those sub-accounts.

We may, from time to time, also quote in sales literature or advertisements,
total returns that do not reflect the surrender charge. These are calculated in
exactly the same way as average annual total returns described above, except
that the ending redeemable value of the hypothetical account for the period is
replaced with an ending value for the period that does not take into account
any charge on amounts surrendered or withdrawn.

Average annual total returns without a surrender charge for the periods shown
below for the sub-accounts (except the Global Technology and Global Growth
Opportunities Sub-Accounts) were:

<TABLE>
<CAPTION>
Sub-Account Sub-Account
1 Year Return Cumulative from
Year Ended Inception 06/21/93 Fund 5 Year Return
12/31/95 to 12/31/95 12/31/90 to 12/31/95
<S> <C> <C> <C>
Capital 25.04% 11.56% 16.62%
Cash Management 3.62% 3.42% 2.47%
Common Stock 25.10% 11.76% 14.53%
Fixed Income Securities 17.23% 5.88% 6.67%
Income 15.93% 8.21% 11.69%
Global 9.49% 8.14% *
Communications and Information 36.11% 32.31% **
Frontier 31.10% 29.75% **
Global Smaller Companies 15.36% 15.07% **
High-Yield Bond *** 9.56% ***
</TABLE>

* The Date of Inception of the Global Portfolio was May 3, 1993.
Therefore, total returns are provided only for Cumulative from
Inception and 1 Year Return.

*** The Date of Inception of the High-Yield Bond Portfolio was May 1, 1995.
Therefore, only Cumulative from Inception total returns are provided.

EFFECT OF THE POLICY ADMINISTRATION CHARGE ON PERFORMANCE DATA

The policy provides for a $30 policy administration charge to be assessed
annually on each policy anniversary proportionately from any sub-accounts and
Fixed Account in which you are invested. If the policy value on the policy
anniversary is $75,000 or more, we will waive the policy administration charge
for the prior policy year. For purposes of reflecting the policy administration
charge in yield and total return quotations, we will convert the

6
<PAGE> 54

annual charge into a per-dollar per-day charge based on the average policy
value in the Variable Account of all policies on the last day of the period
for which quotations are provided. The per-dollar per-day average charge
will then be adjusted to reflect the basis upon which the particular quotation
is calculated.

SAFEKEEPING OF ACCOUNT ASSETS

We hold the title to the assets of the Variable Account. The assets are kept
physically segregated and held separate and apart from our general account
assets and from the assets in any other separate account we have.

Records are maintained of all purchases and redemptions of portfolio shares
held by each of the sub-accounts.

Our officers and employees are covered by an insurance company blanket bond
issued by America Home Assurance Company to The Canada Life Assurance Company,
our parent Company, in the amount of $25 million. The bond insures against
dishonest and fraudulent acts of officers and employees.

STATE REGULATION

We are subject to the insurance laws and regulations of all the jurisdictions
where we are licensed to operate. The availability of certain policy rights and
provisions depends on state approval and/or filing and review processes. The
policies will be modified to comply with the requirements of each applicable
jurisdiction.

RECORDS AND REPORTS

We will maintain all records and accounts relating to the Variable Account. As
presently required by the Investment Company Act of 1940 and regulations
promulgated thereunder, reports containing such information as may be required
under the Act or by any other applicable law or regulation will be sent to you
semi-annually at your last address known to us.

LEGAL MATTERS

All matters relating to Michigan law pertaining to the policies, including the
validity of the policies and our authority to issue the policies, have been
passed upon by David A. Hopkins. Sutherland, Asbill & Brennan of Washington,
D.C., has provided advice on certain matters relating to the federal securities
laws.

EXPERTS

Our balance sheets as of December 31, 1995 and 1994, and the related statements
of operations, accumulated deficit, and cash flows for each of the three years
in the period ended December 31, 1995, included in this Statement of Additional
Information and Registration Statement as well as the Variable Account's
statement of net assets as of December 31, 1995, statements of operations for
the year then ended, and changes in net assets for fiscal years ended December
31, 1995 and December 31, 1994 included in this Statement of Additional
Information and Registration Statement have been audited by Ernst & Young LLP,
independent auditors, of Atlanta, Georgia, as set forth in their reports
thereon appearing elsewhere herein and in the Registration Statement, and are
included in reliance upon such reports given upon the authority of such firm as
experts in accounting and auditing.

OTHER INFORMATION

A registration statement has been filed with the SEC under the Securities Act
of 1933 as amended, with respect to the policies discussed in this Statement of
Additional Information. Not all of the information set forth in the
registration statement, amendments and exhibits thereto has been included in
this Statement of Additional Information. Statements

7
<PAGE> 55

contained in this Statement of Additional Information concerning the content
of the policies and other legal instruments are intended to be summaries. For
a complete statement of the terms of these documents, reference should be made
to the instruments filed with the SEC.

FINANCIAL STATEMENTS

The Variable Account's statement of net assets as of December 31, 1995, and the
related statements of operations and changes in net assets for the periods
indicated therein, as well as the Report of Independent Auditors, are contained
herein. Ernst & Young LLP, independent auditors, serves as independent auditors
for the Variable Account.

Our balance sheets as of December 31, 1995 and 1994, and the related statements
of operations, accumulated deficit, and cash flows for each of the three years
in the period ended December 31, 1995, as well as the Report of Independent
Auditors, are contained herein. The financial statements of the Company should
be considered only as bearing on our ability to meet our obligations under the
policies. They should not be considered as bearing on the investment
performance of the assets held in the Variable Account.

8
<PAGE> 56

PART C

OTHER INFORMATION

<PAGE> 57

PART C
OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements

To be filed in a subsequent Post-Effective Amendment.

(b) Exhibits

(1) Resolution of the Board of Directors of Canada Life Insurance
Company of America (CLICA) authorizing establishment of
Variable Account 2*

(2) Not applicable

(3) (a) Form of Promotional Agent Distribution Agreement***
(b) Form of Selling Agreement***
(c) Distribution Agreement****
(d) Amendment to Distribution Agreement

(4) (a) Form of Annuity Policy

To be filed in a subsequent Post-Effective Amendment

(b) Individual Retirement Annuity Rider***
(c) Qualified Plan Rider***
(d) Tax-Sheltered Annuity Rider***
(e) Qualified Rider*

(5) Form of Application

To be filed in a subsequent Post-Effective Amendment

(6) (a) Certificate of Incorporation of CLICA**
(b) By-Laws of CLICA**

(7) Not applicable

(8) Form of Buy-Sell Agreement***

(9) Opinion and Consent of Counsel***

(10) (a) Consent of Counsel
(b) Consent of Independent Counsel

To be filed in a subsequent Post-Effective Amendment
(c) Consent of Independent Auditors
To be filed in a subsequent Post-Effective Amendment

(11) Not Applicable

(12) Not Applicable

(13) Not Applicable

(14) Financial Data Schedule
To be filed in a subsequent Post-Effective Amendment

- -----------------------
* Incorporated herein by reference to the initial filing of the
Registration Statement on Form N-4 for Variable Account 2 of Canada
Life Insurance Company of America (File No. 33-55890) made on December
18, 1992.

** Incorporated herein by reference to the initial filing of the
Registration Statement on Form N-4 for Variable Annuity Account 1 of
Canada Life Insurance Company of America (File No. 33-28889) filed May
31, 1989.

*** Incorporated herein by reference to Pre-Effective Amendment No. 1
to the Registration Statement on Form N-4 for Variable Account 2 of
Canada Life Insurance Company of America (File No. 33-55890) made on
April 9, 1993.

**** Incorporated herein by reference to Pre-Effective Amendment No. 1
to the Registration Statement on Form N-4 for Variable Account 1 of
Canada Life Insurance Company of America (File No. 33-28889) filed
September 5, 1989.

<PAGE> 58

Item 25. Directors and Officers of the Depositor

<TABLE>
<CAPTION>
Name and Principal
Business Address Positions and Offices with Depositor
------------------ ------------------------------------
<S> <C>
D. A. Nield (1) Chairman & Director
D. A. Loney (2) President & Director
G. E. Hughes (2) Agency Vice President
W. S. McIlwaine (2) Group Sales Vice-President
F. D'Ambra (2) Annuity & Investment Products Vice-President
D. D. Myers (1) Accounting Officer
P. D. Cochrane (1) Administrative Officer
M. L. Craft (2) Administrative Officer
K. T. Ledwos (2) Actuary & Director
S. Benedetti Marketing Actuary
J. G. Deskins Marketing Actuary
M. G. Libenson Internal Auditor
R. W. Linden (1) Secretary
D. A. Hopkins (2) Assistant Secretary
D. M. Cooper (1) Treasurer
D. V. Rough (1) Assistant Treasurer
E. P. Ovsenny (1) Assistant Treasurer
D. N. Rattray (1) Assistant Treasurer
G. N. Isaac (1) Assistant Treasurer
B. J. Lynch (1) Assistant Treasurer
M. V. Sim (1) Assistant Treasurer
K. J. J. Fillman (2) Product Manager Investment Management Services
J. H. Ruess (1) Director
S. H. Zimmerman (3) Director
</TABLE>

--------------------
(1) The business address is 330 University Avenue, Toronto,
Ontario, Canada M5G 1R8.
(2) The business address is 6201 Powers Ferry Road, NW,
Suite 600, Atlanta, Georgia 30339.
(3) The business address is 800 Michigan National Tower,
Lansing, Michigan 48933.

Item 26. Persons Controlled by or Under Common Control With the Depositor
or Registrant

<TABLE>
<CAPTION>
PERCENT OF
VOTING
SECURITIES PRINCIPAL
NAME JURISDICTION OWNED BUSINESS
---- ------------ ----- --------
<S> <C> <C> <C>
The Canada Life Assurance Canada Mutual Company Life Insurance and Health
Company

Canada Life Insurance New York Ownership of voting securities Life Insurance
Company of New York through Canada Life

</TABLE>

<PAGE> 59

<TABLE>

<S> <C> <C> <C>
Adason Properties Limited Canada Ownership of all voting securities Property Management
through Canada Life

The Canada Life Assurance England Ownership of all voting securities Life Insurance
Company of Great Britain through Canada Life

Canada Life Unit Trust England Ownership of all voting securities Unit Trust Management
Managers Limited through Canada Life of Great Britain

Canada Life Mortgage Canada Ownership of all voting securities Mortgage Portfolios
Services Ltd. through Canada life Management

Canada Life Data Services Canada Ownership of all voting securities Data Support Services
Limited through Canada Life

The CLGB Property Company England Ownership of all voting securities Property Management
Limited through Canada Life of Great Britain

CLASSO Benefit Services Canada Ownership of all voting securities Administrative Services
Limited through Canada Life

Canada Life Casualty Canada Ownership of all voting securities Property and Casualty
Insurance Company through Canada Life Insurance

Canada Life Investment Canada Ownership of all voting securities Investment Counseling
Management Limited through Canada Life

Sherway Centre Limited Canada Ownership of all voting securities Property Management
Limited through Canada Life

The Canada Life Assurance Rep. of Ireland Ownership of all voting securities Life Insurance
Company of Ireland Limited through Canada Life of Great Britain

Canlife - IBI Investment Rep. of Ireland Ownership of 50% of voting Equity Fund Management
Services Limited securities through Canada Life of
Ireland Limited and 50% by the
Investment Bank of Ireland

Canada Life Financial England Ownership of all voting securities Unit Fund Sales and
Services Company Limited through Canada Life of Great Britain Management

Canada Life Financial Rep. of Ireland Ownership of all voting securities Unit Fund Sales and
Services Company of Ireland through Canada Life of Ireland Management
Limited

Canada Life of America Georgia Ownership of all voting securities Broker Dealer
Financial Services Inc. through CLICA

Canada Life of America Maryland Ownership of all voting securities Mutual Fund
Series Fund, Inc. through CLICA

CLMS Realty Ltd. Canada 99% of the common shares and Realtor
100% of the convertible preference
shares are owned by Canada Life

</TABLE>

<PAGE> 60

<TABLE>
<S> <C> <C> <C>
Canada Life Pension & Rep. of Ireland Ownership of all voting securities Unit Trust
Annuities (Ireland) Limited through Canada Life Assurance
(Ireland) Limited

CLAI Limited Rep. of Ireland Ownership of all voting securities Holding Company
through Canada Life of Great Britain

The Canada Life Assurance Rep. of Ireland Ownership of all voting securities Life Insurance
Company of Ireland Limited through CLAI Limited

CL Capital Management, Inc. Georgia Ownership of all voting securities Investment Management
through CLICA
</TABLE>

Item 27. Number of Policy Owners

As of December 31, 1995, there are 1,435 owners of Nonqualified
Policies and 956 owners of Qualified Policies.

Item 28. Indemnification*

Item 29. Principal Underwriter*

Item 30. Location of Accounts and Records

All accounts and records required to be maintained by Section 31(a)
of the 1940 Act and the rules under it are maintained by CLICA
at its Executive Office at 330 University Avenue, Toronto, Ontario
M5G 1R8 and 6201 Powers Ferry Road, N.W., Suite 600, Atlanta,
Georgia 30339

Item 31. Management Services

All management contract are discussed in Part A or Part B.

Item 32. Undertakings*****

STATEMENT PURSUANT TO RULE 6c-7

CLICA and the Variable Account rely on 17 C.F.R., Section 270.6c-7 and
represent that the provisions of that Rule have been or will be complied with.
Accordingly, CLICA and the Variable Account 2 are exempt from the provisions of
Section 22(e), 27(c)(1) and 27(d) of the Investment Company Act of 1940 with
respect to any variable annuity contract participating in such account to the
extent necessary to permit compliance with the Texas Optional Retirement
Program.

- ----------------
* Incorporated herein by reference to the Pre-Effective Amendment No. 1
of this Form N-4 Registration Statement filed (File No. 33-28889) on
September 5, 1989.

***** Incorporated herein by reference to Pre-Effective Amendment No. 2
to the Registration Statement on Form N-4 for Variable Account 2 of
Canada Life Insurance Company of America (File No. 33-55890) filed on
April 28, 1993.

<PAGE> 61

SIGNATURES

As required by the Securities Act of 1933 and the Investment Company Act
of 1940, the Registrant has caused this Post-Effective Amendment Number 54
to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Toronto, and the Province of Ontario on the 1st day of
March, 1996.

CANADA LIFE INSURANCE COMPANY OF AMERICA
VARIABLE ANNUITY ACCOUNT 2

By /s/ D. A. Loney
----------------------------------------
D. A. Loney, President
Canada Life Insurance Company of America

CANADA LIFE INSURANCE COMPANY OF AMERICA

By /s/ D. A. Loney
---------------------------------------
D. A. Loney, President

As required by the Securities Act of 1933, this Post-Effective Amendment
Number 54 has been signed by the following persons in the capacities and
on the dates indicated.

SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ D. A. Nield Chairman and Director 03/01/96
------------------------------
D. A. Nield

/s/ D. A. Loney President and Director 03/01/96
-------------------------------
D. A. Loney

/s/ K. T. Ledwos Director 03/01/96
-------------------------------
K. T. Ledwos

/s/ J. H. Ruess Director 03/01/96
-------------------------------
J. H. Ruess

/s/ S. H. Zimmerman Director 03/01/96
-------------------------------
S. H. Zimmerman

/s/ D. M. Cooper Treasurer 03/01/96
-------------------------------
D. M. Cooper

/s/ D. D. Myers Accounting Officer 03/01/96
-------------------------------
D. D. Myers
</TABLE>

<PAGE> 62

EXHIBIT INDEX

Exhibit Number Description of Exhibit

10 (a) Consent of Counsel

<PAGE> 1

Exhibit 10 (a)
Consent of Counsel

<PAGE> 2

February 29, 1996

Board Of Directors
Canada Life Insurance Company of America
Canada Life of America Variable Annuity Account 1
330 University Avenue
Toronto, Canada M5G 1R8

Gentlemen:

I hereby consent to the use of my name under the caption "Legal
Matters" in the Statement of Additional Information contained in
Post-effective Amendment No. 10 to the Registration Statement on Form
N-4 (File No. 33-28889) filed by Canada Life Insurance Company of
America and Canada Life of America Variable Annuity Account 1 with the
Securities and Exchange Commission. In giving this consent, I do not
admit that I am in the category of persons whose consent is required
under Section 7 of the Securities Act of 1933.

Sincerely,

/s/ David A. Hopkins

David A. Hopkins
Chief Counsel, U.S. Division

DAH/dr