CANADA LIFE OF NEW YORK VARIABLE ANNUITY ACCOUNT 2, 485BPOS, 1996-05-01

CANADA LIFE OF NEW YORK VARIABLE ANNUITY ACCOUNT 2
485BPOS, 1996-05-01

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<PAGE> 1

As filed with the Securities and Exchange Commission on May 1, 1996.

Registration No. 33-64240
811-7776

================================================================================

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. 4

and/or
Registration Statement Under the Investment Company Act of 1940 X

Amendment No. 4

================================================================================

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

CANADA LIFE INSURANCE COMPANY OF NEW YORK
(Name of Depositor)

500 Mamaroneck Avenue
Harrison, New York 10528
(Address of Depositor's Principal Executive Office)
Depositor's Telephone Number: (914) 835-8400

Paul R. McCadam
500 Mamaroneck Avenue
Harrison, New York 10528
(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)
---

X on May 1, 1996 pursuant to paragraph (b)
--- --------------

--- 60 days after filing pursuant to paragraph (a)(i)

--- on 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 before 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

================================================================================

PART A

<TABLE>
<CAPTION>
ITEM OF FORM N-4 PROSPECTUS CAPTION
- ---------------- ------------------
<S> <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
b. Sales Load % Charges Against the Policy, Variable Account, & Fund -
Surrender Charge
c. Special Purchase Plan N/A
d. Commissions DISTRIBUTION OF POLICIES
e. Expenses - Registrant Charges Against the Policy, Variable Account, & Fund
f. Fund Expenses Charges Against the Policy, Variable Account, & Fund
- Other Charges Including Investment Management Fees
g. Organizational Expenses N/A

7. General Description of Variable
Annuity Contracts

a. Persons with Rights DEFINITIONS - Owner, Joint Owner; Payment of
Proceeds; Payment Options; 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 N/A
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 STATEMENT OF ADDITIONAL INFORMATION TABLE OF CONTENTS
</TABLE>

PART B

<TABLE>
<CAPTION>
ITEM OF FORM N-4 STATEMENT OF ADDITIONAL INFORMATION CAPTION
- ---------------- -------------------------------------------
<S> <C>
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

<TABLE>
<S> <C>
e. Assets of Registrant SAFEKEEPING OF ACCOUNT ASSETS
f. Affiliated Persons N/A
g. Principal 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
</TABLE>

<PAGE> 5

PART A

INFORMATION REQUIRED TO BE IN THE PROSPECTUS

<PAGE> 6

CANADA LIFE INSURANCE COMPANY OF NEW YORK

HOME OFFICE: 500 MAMARONECK AVENUE, HARRISON, NEW YORK 10528

PHONE: (914) 835-8400

================================================================================

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 New York ("we,"
"our," or "us"), a stock life insurance company domiciled in New York 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 New York Variable Annuity Account
2 (the "Variable Account") and the Fixed Account. The Fixed Account is part of
our general account. 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 36 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

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

<PAGE> 8

DEFINITIONS

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 you have elected for the commencement of annuity
payments or the date that a lump sum payment is to be made. The annuity date
can be no later than the Maturity Date.

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

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

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; and/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 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.

HOME OFFICE: Our office at the address shown on page 1 of the Prospectus. This
is our mailing address.

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

MATURITY DATE: No later than any annuitant's 85th birthday.

NET PREMIUMS: The premium paid less any premium tax deducted in the year the
premium is paid. Currently, no premium tax is levied in New York.

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 29.

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.

3
<PAGE> 9
POLICY VALUE: The sum of the Variable Account value and the Fixed Account
value.

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 29.

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 New York 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 New York.

WRITTEN NOTICE: See the "Written Notice" provision on page 26 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, and if the policy does not meet your needs to return the policy to
our Home Office. We will promptly return the Policy Value 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 ($600 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 $600, or $50 per month if paid by PAC. 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 13.

4
<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 10.

THE FUND

The assets of each sub-account are invested in the corresponding
portfolios of the Fund. The Fund currently has twelve portfolios: Seligman
Capital; Seligman Cash Management; Seligman Common Stock; Seligman Fixed Income
Securities; Seligman Income; Seligman Henderson Global; Seligman Communications
and Information; Seligman Frontier; Seligman Global Smaller Companies; Seligman
High-Yield Bond; Seligman Henderson Global Technology; and Seligman Henderson
Global Growth Opportunities. The Fund is a diversified, open-end investment
company. See "The Fund" on page 11.

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 37.

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 16.

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 APPROVAL IS 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. 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 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:

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<PAGE> 11
If we receive such due proof during the first seven policy years, the death
benefit is the greater of:

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) 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.). 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 18.

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
maturity date, subject to certain limitations. See "Partial Withdrawals" on
page 19 and "Proceeds on Surrender" on page 17. Partial withdrawals and cash
surrenders may be subject to federal income tax, including a penalty tax. See
"FEDERAL TAX STATUS" on page 29.

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:

<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 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 22.

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

6
<PAGE> 12

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 23.

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 23.

The first 12 transfers during each policy year are free. We assess a $25
transfer fee for each additional transfer. See "Transfer Processing Fee" on
page 17.

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 23.

No premium tax is currently payable under New York law. We reserve the right to
deduct any premium taxes payable in respect of future premiums in the event New
York law should change. See "Taxes" on page 24.

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 25 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 with Payments for 10 Years Certain; and
2) Mutual Agreement. See "Payment Options" on page 25.

OTHER POLICY PROVISIONS

For information concerning the owner, beneficiary, written notice, periodic
policy reports, assignment, and modification see "Other Policy Provisions" on
page 26.

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 29.

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.

7
<PAGE> 13

TABLE OF EXPENSES

EXPENSE DATA

<TABLE>
<S> <C>
The following information regarding expenses assumes that the entire policy value is in the Variable Account.

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) .................................................................. 6.00%

Transfer fee
Guarantee - First 12 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 0.20%
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 Opportunities, the Sub-

8
<PAGE> 14

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 0.22%; Global 2.05%; Frontier 0.62%; Global
Smaller Companies 2.45%; and High-Yield Bond 3.88% annualized. The
High-Yield Bond Portfolio commenced operations on May 1, 1995. Expenses
for Common Stock and Communications and Information did not exceed the
reimbursement level of 0.20%. The Global Technology and Global Growth
Opportunities Portfolios commenced operations on May 1, 1996. In the
absence of any expense reimbursement, the annualized "Other Expenses" and
"Total Annual Expenses" for the Global Technology and Global Growth
Opportunities Portfolios are estimated to be 1.40% and 1.40% respectively.

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 22, and the
Prospectus for the Fund.

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>
<S> <C> <C>
SUB-ACCOUNT 1 YEAR 3 YEARS
------------------------------ ------ -------
Capital $77 $114
Cash Management $70 $ 96
Common Stock $76 $113
Fixed Income Securities $77 $114
Income $77 $114
Global $84 $138
Communications and Information $80 $125
Frontier $80 $125
Global Smaller Companies $84 $138
High-Yield Bond $78 $117
Global Technology $78 $138
Global Growth Opportunities $78 $138
</TABLE>

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

<TABLE>
<S> <C> <C>
SUB-ACCOUNT 1 YEAR 3 YEARS
------------------------------ ------ -------
Capital $23 $69
Cash Management $16 $51
Common Stock $22 $68
Fixed Income Securities $23 $69
Income $23 $69
Global $30 $93
Communications and Information $26 $80
Frontier $26 $80
Global Smaller Companies $30 $93
High-Yield Bond $24 $72
Global Technology $24 $72
Global Growth Opportunities $30 $93
</TABLE>

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 charges collected by the
total average net assets of the sub-accounts of the Variable Account.

<PAGE> 15

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 Variable Account commenced operations on March 1, 1996. Accordingly, no
financial data for the fiscal year ended December 31, 1995 is available.

THE COMPANY

Canada Life Insurance Company of New York ("we," "our," and "us") is a stock
life insurance company with assets as of December 31, 1995 of approximately
$232.4 million. We were incorporated under New York law on June 7, 1971, and
our Home Office is located at 500 Mamaroneck Avenue, Harrison, New York 10528.
We currently are principally engaged in issuing annuity and life insurance
policies in the State of New York.

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 $20.8 billion (U.S. dollars).

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

We are subject to regulation and supervision by the New York State Insurance
Department, as well as the applicable laws and regulations of New York.

THE VARIABLE ACCOUNT AND THE FUND

THE VARIABLE ACCOUNT

We established the Canada Life of New York Variable Annuity Account 2 (the
"Variable Account") as a separate investment account on February 25, 1993 under
New York State 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

10
<PAGE> 16
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 currently 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.

THE FUND

Seligman Portfolios, Inc., (the "Fund") currently has twelve portfolios:
Seligman Capital; Seligman Cash Management; Seligman Common Stock; Seligman
Fixed Income Securities; Seligman Income; Seligman Henderson Global; Seligman
Communications and Information; Seligman Frontier; Seligman Henderson Global
Smaller Companies; Seligman High-Yield Bond; Seligman Henderson Global
Technology; and Seligman Henderson 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.

11
<PAGE> 17

SELIGMAN COMMUNICATIONS AND INFORMATION PORTFOLIO

The investment objective of this Portfolio is to produce capital gain not
income, 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 maximum current income
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). The Portfolio may
invest up to 100% of its assets in lower rated bonds, commonly known as "junk
bonds" which are subject to a greater risk of loss of principal and interest
than higher rated investment grade bonds. 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 PORTFOLIO

The investment objective of this Portfolio is to seek long-term capital
appreciation by making global investments of at least 65% of its assets in
securities of U.S. and non-U.S. companies operating in the technology and
technology-related industries.

SELIGMAN GLOBAL GROWTH OPPORTUNITIES PORTFOLIO

The investment objective of this Portfolio is to seek long-term capital
appreciation by investing primarily in capital stock 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 New York, Canada Life Insurance Company of America, 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.

12
<PAGE> 18
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 New York
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 New York State
Insurance Department.

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 ($600 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 Home 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.

ADDITIONAL PREMIUMS

The minimum additional premium is $600. However, the minimum additional premium
paid by PAC is $50 per month. We will apply additional net premiums as of
receipt at our Home Office.

13
<PAGE> 19
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 Home 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 Home 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%.

We cannot guarantee that a sub-account or shares of a portfolio will always be
available. If an owner requests 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 policy value and end this policy if before the annuity date
or maturity date all of these events simultaneously exist:

14
<PAGE> 20
1. you have not paid any premiums for at least three 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 end 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 Home 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:

(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.

15
<PAGE> 21
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, the lesser of $250 or the
entire amount in that sub-account or the Fixed Account; 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 code 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.

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 Home Office.

16
<PAGE> 22
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 16). The first 12 transfers during each policy year are free. 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 25. The policy ends
when we pay the proceeds.

"Due Proof of Death" is proof of death that is satisfactory to us. Such proof
may consist of: 1) a certified copy of the death certificate; and/or 2) a
certified copy of the decree of a court of competent jurisdiction as to the
finding of death.

We will deduct any applicable premium tax from the proceeds described below,
unless we already deducted the tax from the premiums when paid. Currently, no
premium tax is levied in New York.

For any annuity benefit with payments of five years or more, such annuity
benefits at the time the policy value is applied under a payment option will
not be less than those that would be provided by the application of an amount
to purchase any single premium immediate annuity policy offered by us at the
time to the same class of annuitants. Such amount shall be the greater of the
cash surrender value or 95% of what the cash surrender value would be if there
were no surrender charge.

PROCEEDS ON ANNUITY DATE OR MATURITY DATE

If Payment Option 1 is in effect on the annuity date, we will pay the policy
value as described in the Definitions. See "Payment Options" on page 25. If the
proceeds are paid in a lump sum, we will pay the cash surrender value, as
described in the Definitions.

An option may not be elected and we will pay the proceeds in a lump sum if the
amount to be applied under a payment option is less than $2,000 or any periodic
payment under the payment option would be less than $20.

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

1. we must receive your written notice at our Home 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 maturity
date.

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 85th birthday.

PROCEEDS ON SURRENDER

If you surrender the policy before the annuity date, the proceeds we will pay
is the cash surrender value. No death benefit is payable if the policy is
surrendered before the last surviving annuitant's death. 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 Home Office.

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<PAGE> 23
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 29.

You may elect to have the cash surrender value paid in a single sum or under a
payment option. See "Payment Options" on page 25. The policy ends when we pay
the cash surrender value.

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 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:

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.). 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."

18
<PAGE> 24

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.

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 is $250;
2. the maximum partial withdrawal is the amount that would leave a cash
surrender value of $5,000; and
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; 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, trust company or a savings and loan.

On the date we receive your written notice for a partial withdrawal at our Home
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 this 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 and the Fixed Account is inadequate to comply with your
withdrawal request, we will first withdraw from the specified sub-accounts and
Fixed Account. The remaining balance will be withdrawn 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 29.

19
<PAGE> 25
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. The Company
reserves the right to change its minimum systematic withdrawal amount
requirements.

SELIGMAN TIME HORIZON MATRIX(SM) ("Matrix")

You may elect to participate in Seligman Time Horizon Matrix(SM)
(the "Matrix") 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 Matrix 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 Matrix also allows you to construct your own
customized model portfolio.

Under the Matrix, you may elect 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" below.
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
representation or guarantee that following the Matrix will result in a
profit, protect against loss or ensure the achievement of financial goals.

To initiate the Matrix, we must receive your written notice on our form.
Participation in the Matrix 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 Matrix 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.

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<PAGE> 26
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 19.

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 19. 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
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 Last Surviving Annuitant Before Annuity Date or
Maturity Date" on page 18. In addition, debt, whether or not repaid, will
have a permanent effect on the policy value because the investment results of
the investment 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

21
<PAGE> 27

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 and file your written notice for a partial withdrawal
or a cash surrender; or
2. we receive and file 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.

If the cash surrender value payable at a surrender, partial withdrawal or in a
lump sum on the annuity date or maturity date is not mailed or delivered within
ten working days after we receive the documentation necessary to complete the
transaction, we will add interest from the date we receive the necessary
documentation, unless the amount of such interest is less than $25. The rate of
interest we will apply is the rate the Company pays for dividends on deposit in
our whole life insurance portfolio. We guarantee that the rate of interest will
never be less than 2.5%.

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 variable sub-accounts 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 .................................................. 6%
Policy Years Since Premium Was Paid
Less than 1 ................................................................ 6%
At least 1, but less than 2 ................................................ 6%
</TABLE>

22
<PAGE> 28
<TABLE>
<S> <C>
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. 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 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 16 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 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

23
<PAGE> 29

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.

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. & 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

No premium tax is currently payable under New York law. We reserve the right to
deduct any premium taxes payable in respect of future premiums in the event New
York law should change.

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 other 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.

24
<PAGE> 30
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, and 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.

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 Home 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 17. 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 while any annuitant
is living and before the annuity date or maturity date. If an election is not
in effect at the last surviving annuitant's death or if payment is to be made
in a lump 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 Home Office with the written consent of any
irrevocable beneficiary.

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

1. the amount to be applied under the option is less than $2,000; or
2. any periodic payment under the election would be less than $20.

DESCRIPTION OF PAYMENT OPTIONS

Payment Option 1: Life Income with Payments for 10 Years Certain

We will pay the proceeds in equal amounts at the beginning of each month,
during the payee's lifetime with payments for at least 10 years certain.

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.

PAYMENT DATES

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

<PAGE> 31

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 satisfactory proof 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.

BETTERMENT OF INCOME

The annuity benefits at the time the policy value is applied under a payment
option will not be less than those that would be provided by the application of
an amount defined in the policy to purchase any single premium annuity policy
offered by us at the time to the same class of annuitants. Such amount will be
the greater of the cash surrender value or 95% of what the cash surrender value
would be if there were no surrender charge.

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, 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, ownership 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" on page 19.

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 Home 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:

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<PAGE> 32
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 Home 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 32.

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 New York 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.

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.

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<PAGE> 33
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.

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.

<PAGE> 34

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 29. 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. 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.

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.

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<PAGE> 35
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 than 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 commencement 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.

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 33].

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<PAGE> 36
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 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.

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.

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<PAGE> 37
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.

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).

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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 competent 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.

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.
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

33
<PAGE> 39
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 competent
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.

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 Canada Life
Insurance Company of America, a Michigan corporation. 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.

34
<PAGE> 40
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.

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

The audited balance sheets of Canada Life Insurance Company of New York as at
December 31, 1995 and 1994, and the statements of operations, accumulated
surplus, and cash flows for each of the years in the three year period ended
December 31, 1995, as well as the Report of Independent Auditors and the
Actuary's Report thereon are contained in the Statement of Additional
Information.

35
<PAGE> 41

The Variable Account commenced operations on March 1, 1996 and as such had no
assets or liabilities and had earned no income and incurred no expenses as of
fiscal year ended December 31, 1995. Accordingly, the Statement of Additional
Information contains no financial statements for the Variable Account as of
fiscal year ended December 31, 1995.

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.

STATEMENT OF ADDITIONAL INFORMATION - TABLE OF CONTENTS

<TABLE>
<S> <C>
ADDITIONAL POLICY PROVISIONS
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 ................................................... 4
Effect of the Policy Administration Charge on Performance Data .. 5

SAFEKEEPING OF ACCOUNT ASSETS ...................................... 5

STATE REGULATION ................................................... 5

RECORDS AND REPORTS ................................................ 5

LEGAL MATTERS ...................................................... 6

EXPERTS ............................................................ 6

OTHER INFORMATION .................................................. 6

FINANCIAL STATEMENTS ............................................... 6
</TABLE>

36
<PAGE> 42

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 14. 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 16):

1. we allow only one transfer each policy 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 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 16.

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
23. A fee for taxes may also be deducted from amounts in the Fixed Account. See
"Taxes" on page 24.

You may withdraw all or a part of your Fixed Account value. See
"Partial Withdrawals" on page 19 and "Proceeds on Surrender" on page 17. Upon a
partial withdrawal or a cash surrender, you may incur a surrender charge. See
"Surrender Charge" on page 22. 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, Partial Withdrawals, Cash Surrenders and Transfers -
Postponement" on page 22.

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.

37
<PAGE> 43

PART B

INFORMATION REQUIRED TO BE IN THE

STATEMENT OF ADDITIONAL INFORMATION
<PAGE> 44

CANADA LIFE INSURANCE COMPANY OF NEW YORK
HOME OFFICE: 500 Mamaroneck Avenue, Harrison, New York 10528
(914) 835-8400

================================================================================

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 New York. 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> 45

STATEMENT OF ADDITIONAL INFORMATION

TABLE OF CONTENTS

<TABLE>
<S> <C>
ADDITIONAL POLICY PROVISIONS
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 ................................................... 4
Effect Of The Policy Administration Charge On Performance Data .. 5

SAFEKEEPING OF ACCOUNT ASSETS ......................................... 5

STATE REGULATION ...................................................... 5

RECORDS AND REPORTS ................................................... 5

LEGAL MATTERS ......................................................... 6

EXPERTS ............................................................... 6

OTHER INFORMATION ..................................................... 6

FINANCIAL STATEMENTS .................................................. 6
</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.

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.

2
<PAGE> 46

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 Home 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:

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 on the first day of the 7 day period.

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:

3
<PAGE> 47
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.

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. verage 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.

4
<PAGE> 48
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.

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.

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 or
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 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 the State of New York.
Quarterly Statements are filed with the New York Superintendent of Insurance
covering our operations and reporting on our financial condition. Periodically,
the New York Superintendent of Insurance examines our financial condition,
which examination includes the liabilities and reserves of the Variable Account
and other separate accounts of which we are the depositor.

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.

5
<PAGE> 49

LEGAL MATTERS

All matters relating to New York 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

The balance sheets of Canada Life Insurance Company of New York as at December
31, 1995 and 1994, and the statements of operations, accumulated surplus, and
cash flows for each of the years in the three year period ended December 31,
1995, included in this Statement of Additional Information and Registration
Statement have been audited by our Independent Auditors--Ernst & Young,
Chartered Accountants, of Toronto, Canada, as set forth in their report thereon
appearing elsewhere herein and in the Registration Statement and are included
herein 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 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 audited balance sheets of Canada Life Insurance Company of New York as at
December 31, 1995 and 1994 and the statements of operations, accumulated
surplus, and cash flows for each of the years in the three year period ended
December 31, 1995, 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.

6
<PAGE> 50

FINANCIAL STATEMENTS

CANADA LIFE INSURANCE COMPANY OF
NEW YORK

December 31, 1995

With Auditors' Report

<PAGE> 51

CANADA LIFE INSURANCE COMPANY OF NEW YORK

FINANCIAL STATEMENTS

December 31, 1995

CONTENTS

<TABLE>
<S> <C>
Auditors' Report ................................................. 1

Audited Financial Statements

Balance Sheets ................................................... 2

Statements of Operations ......................................... 3

Statements of Accumulated Surplus ................................ 4

Statements of Cash Flows ......................................... 5

Notes to Financial Statements .................................... 6
</TABLE>

<PAGE> 52

[ERNST & YOUNG LOGO] - CHARTERED ACCOUNTANTS - Phone: (416) 864-1234
Ernst & Young Tower Fax: (416) 864-1174
Toronto-Dominion Centre
P.O. Box 251
Toronto, Canada M5K 1J7

AUDITORS' REPORT

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

To the Shareholder, Directors and Policyholders of
Canada Life Insurance Company of New York

We have audited the balance sheets of the CANADA LIFE INSURANCE COMPANY OF NEW
YORK (the "Company") as at December 31, 1995 and 1994 and the statements of
operations, accumulated surplus and cash flows for each of the years in the
three year period ended December 31, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, these financial statements present fairly, in all material
respects, the financial position of the Company as at December 31, 1995 and
1994 and the results of its operations and the changes in its financial
position for each of the years in the three year period ended December 31, 1995
in accordance with accounting principles generally accepted in the United
States.

Toronto, Canada /s/ Ernst & Young
February 9, 1996 Chartered Accountants

<PAGE> 53

CANADA LIFE INSURANCE COMPANY OF NEW YORK

BALANCE SHEETS
[IN THOUSANDS OF DOLLARS]
except per share values

<TABLE>
<CAPTION>
AS AT DECEMBER 31 1995 1994
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
INVESTMENTS [note 3]
Bonds, at amortized cost less write-downs [fair value - 1995 - $134,787;
1994 - $119,315] $125,398 $119,343
Mortgage loans, at amortized cost less write-downs 74,785 71,048
Preferred stocks, at cost (fair value - 1995 - $23; 1994 - $20] 16 17
Common stocks, at fair value [cost - 1995 - $4,487; 1994 - $4,681] 7,728 6,844
Policy loans 12,165 11,924
Short-term investments, at cost 3,200 2,850
- -------------------------------------------------------------------------------------------------------------

TOTAL INVESTMENTS 223,292 212,026
Cash and interest-bearing deposits 985 84
Deferred premiums and premiums in the course of collection 2,326 1,914
Investment income due and accrued 3,035 2,908
Other assets (including federal tax recoverable] 1,875 595
Assets held in separate accounts 925 596
- -------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 232,438 218,123
=============================================================================================================

LIABILITIES AND CAPITAL AND SURPLUS
LIABILITIES
Actuarial reserves $205,615 $194,061
Benefits in course of payment and provision for unreported claims 316 649
Policyholders' amounts left on deposit at interest 4,096 4,181
Provisions for future policy dividends 2,287 2,079
- -------------------------------------------------------------------------------------------------------------
POLICY BENEFIT LIABILITIES 212,314 200,970
Interest maintenance reserve 272 0
Amounts owing to parent company [note 6[b]] 414 741
Unallocated amounts 421 331
Miscellaneous liabilities
[including provision for outstanding taxes and expenses] 2,196 1,334
Asset valuation reserve 3,034 2,106
Liabilities from separate accounts 925 596
- -------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 219,576 206,078
- -------------------------------------------------------------------------------------------------------------

CAPITAL AND SURPLUS [note 9]
Capital stock
Authorized and issued:
100,000 common shares at a par value of $10 per share 1,000 1,000
Paid-in surplus 2,850 2,850
Accumulated surplus 9,012 8,195
- -------------------------------------------------------------------------------------------------------------
TOTAL CAPITAL AND SURPLUS 12,862 12,045
- -------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND CAPITAL AND SURPLUS $232,438 $218,123
=============================================================================================================
</TABLE>

See accompanying notes

<PAGE> 54

CANADA LIFE INSURANCE COMPANY OF NEW YORK

STATEMENTS OF OPERATIONS
[in thousands of dollars]

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
1995 1994 1993
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUES
Premiums for insurance and annuity considerations [note 6] $23,045 $36,707 $22,968
Considerations for supplementary contract
and dividends left on deposit 262 841 178
Net investment income [note 3[a]] 18,109 16,816 15,689
Other income 9 248 123
Adjustments on reinsurance ceded (476) (479) (589)
- -------------------------------------------------------------------------------------------------------------------
TOTAL REVENUES 40,949 54,133 38,369
- -------------------------------------------------------------------------------------------------------------------

EXPENDITURES
Death benefits, disability benefits and matured
endowments on insurance 1,486 1,836 1,977
Annuity benefits 12,861 11,348 9,678
Surrender benefits 4,352 5,065 3,950
Payments on supplementary contracts and
dividends left on deposit 765 590 579
Interest on policy or contract funds 132 86 146
Dividends to policyholders 2,377 2,182 1,992
- -------------------------------------------------------------------------------------------------------------------
TOTAL PAYMENTS TO POLICYHOLDERS AND BENEFICIARIES 21,973 21,107 18,322

Increase in actuarial reserves 11,274 25,468 12,659
Commissions to agents 2,128 2,790 1,810
General insurance expenses 3,994 4,052 3,485
Taxes, licenses and fees 632 475 415
Other disbursements 160 29 331
Transfers to separate accounts 217 155 338
- -------------------------------------------------------------------------------------------------------------------
TOTAL EXPENDITURES 40,378 54,076 37,360
- -------------------------------------------------------------------------------------------------------------------

Income from operations before net realized
capital gains and federal income taxes 571 57 1,009
Provision for federal income taxes [note 4] 534 479 1,238
- -------------------------------------------------------------------------------------------------------------------

Income (loss) from operations before
net realized capital gains 37 (422) (229)
Net realized capital gains [note 3[b]] 187 230 228
- -------------------------------------------------------------------------------------------------------------------

NET INCOME (LOSS) $ 224 $ (192) $ (1)
===================================================================================================================
</TABLE>

See accompanying notes

<PAGE> 55

CANADA LIFE INSURANCE COMPANY OF NEW YORK

STATEMENTS OF ACCUMULATED SURPLUS
[in thousands of dollars]

YEARS ENDED DECEMBER 31

<TABLE>
<CAPTION>
1995 1994 1993
- -------------------------------------------------------------------------
<S> <C> <C> <C>
ACCUMULATED SURPLUS, BEGINNING OF YEAR $8,195 $9,160 $9,126
Net income (loss) 224 (192) (1)
Change in net unrealized capital gains (losses) 1,691 (490) (911)
Change in surplus on account of:
Non-admitted assets 425 (433) (26)
Actuarial valuation basis (193) 400 496
Asset valuation reserve (929) (249) 476
Provision for postretirement benefits [note 11] (401) 0 0
Adjustment for gain in currency exchange 0 (1) 0
- -------------------------------------------------------------------------

ACCUMULATED SURPLUS, END OF YEAR $9,012 $8,195 $9,160
=========================================================================
</TABLE>

See accompanying notes

<PAGE> 56

CANADA LIFE INSURANCE COMPANY OF NEW YORK

STATEMENTS OF CASH FLOWS
[in thousands of dollars]

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
1995 1994 1993
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ 224 $ (192) $ (1)
Adjustments to reconcile net income to net cash
provided by operating activities:
Net realized capital (gains) losses
before capital gains tax (708) 87 (651)
Amortization of net investment discounts (1,052) (958) (949)
Changes in operating assets and liabilities:
Increase in policy benefit liabilities 11,344 25,877 12,443
Increase (decrease) in policy benefit liabilities
due to valuation basis change (193) 400 496
Provision for postretirement liability (401) 0 0
Increase (decrease) in general liabilities 625 (2,185) 1,056
Increase in deferred premiums
and premiums in the course of collection (413) (138) (281)
Decrease (increase) in investment income
due and accrued (127) (135) 526
Decrease (increase) in other assets (1,280) (595) 106
- ---------------------------------------------------------------------------------------------------------
8,019 22,161 12,745
Net decrease (increase) in non-admitted
assets and other adjustments 7 (14) (26)
- ---------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 8,026 22,147 12,719
- ---------------------------------------------------------------------------------------------------------

INVESTING ACTIVITEES
Proceeds from investments sold, matured or repaid 51,366 48,211 23,003
Cost of investments acquired (57,541) (73,028) (34,518)
Loss on derivatives investments (359) 0 0
Net sales (purchase) of short-term investments (350) 1,250 (450)
Net decrease (increase) in policy loans (241) (249) 907
- ---------------------------------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES (7,125) (23,816) (11,058)
- ---------------------------------------------------------------------------------------------------------

Net increase (decrease) in cash 901 (1,669) (1,661)
Cash, beginning of year 84 1,753 92
- ---------------------------------------------------------------------------------------------------------
CASH, END OF YEAR $ 985 $ 84 $ 1,753
=========================================================================================================
</TABLE>

See accompanying notes

<PAGE> 57

CANADA LIFE INSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS

December 31, 1995

1. ORGANIZATION

Canada Life Insurance Company of New York (the "Company") was incorporated on
June 7, 1971 in the State of New York and is a wholly-owned subsidiary of The
Canada Life Assurance Company [the "Parent"], a mutual life and accident and
health insurance company. The Company is licensed to sell individual and group
life, health, and investment products in the State of New York.

2. BASIS OF ACCOUNTING

The accompanying financial statements have been prepared in conformity with
accounting practices and procedures of the National Association of Insurance
Commissioners ["the NAIC"] as prescribed or permitted by the Insurance Code of
the State of New York. Prescribed statutory accounting practices include state
laws, regulations, and general administrative rules, as well as a variety of
publications of the NAIC. Permitted statutory accounting practices encompass
all accounting practices that are not prescribed; such practices differ from
state to state, may differ from company to company within a state, and may
change in the future. The Company currently does not follow any permitted
accounting practices. These accounting practices are considered to be
generally accepted accounting principles for wholly-owned subsidiaries of
mutual life and accident and health insurance companies.

In April, 1993, the Financial Accounting Standards Board ("FASB") issued
Interpretation No. 40 - Applicability of Generally Accepted Accounting
Principles ("GAAP") to Mutual Life Insurance and Other Enterprises. The
Interpretation requires mutual and fraternal life insurers whose financial
statements purport to be in conformity with GAAP to follow all applicable
guidance from which they are not specifically exempt. This Interpretation is
effective for the fiscal years beginning after December 15, 1995 and is to be
implemented retroactively with restatement of prior periods. After the
effective date of FASB Interpretation No. 40, financial statements prepared on
the basis of statutory accounting practices will no longer be described as
prepared in conformity with GAAP. As noted above, the Company currently
prepares its financial statements on the basis of statutory accounting
practices.

In January 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 120, Accounting and Reporting by Mutual Life
Insurance Enterprises and by Insurance Enterprises for Certain Long-Duration
Participating Contracts. This Statement extends the requirements of FASB
Statements No. 60, Accounting and Reporting by Insurance Enterprises; No. 97,
Accounting and Reporting by Insurance Enterprises for Certain Long-Duration
Contracts and for Realized Gains and Losses from the Sale of Investments; and
No. 113, Accounting and Reporting for Reinsurance of Short-Duration and
Long-Duration Contracts, to mutual life insurance enterprises. Also, in
January 1995, the AICPA issued Statement of Position 95-1, Accounting for
Certain Insurance Activities of Mutual Life Insurance Enterprises. This
Statement of Position (SOP) provides accounting guidance for certain
participating insurance contracts of mutual life insurance enterprises. Both
Statement No. 120 and SOP 95-1 are effective for financial statements issued
for fiscal years beginning after December 15, 1995. The Company has not yet
determined the effects of these pronouncements on its financial
statements.

<PAGE> 58

CANADA LIFE INSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS

December 31, 1995

A summary of the significant accounting practices employed by the Company is as
follows:

[a] Assets included in the balance sheets are "admitted assets" as defined by
regulatory authorities. Certain assets such as furniture and fixtures are
charged against accumulated surplus at the date of acquisition.

[b] Bonds are carried at values prescribed by the NAIC which is generally
amortized cost. Mortgage loans are carried at amortized cost less
principal repayments. Real estate is carried at the lower of current
market value or cost less depreciation, which is computed on the
straight-line basis over the estimated useful lives of the properties.
Common stocks are carried at fair value and preferred stocks are carried
at cost. Gains and losses resulting from sales of investment securities
are recognized using an average cost basis.

[c] Policy loans are carried at their unpaid balance and are fully secured by
the cash surrender value of the policies on which the respective loans are
made.

[d] Actuarial reserves represent the amount required, in addition to future
premiums, annuity considerations and interest, to provide for future
payments under insurance and annuity contracts.

Reserves for annual premium life insurance contracts issued prior to
1977 are determined on the net level premium method using primarily
the 1941 CSO and 1958 CSO [IPC] mortality tables with assumed
interest rates ranging from 2% to 3 1/2%. Reserves for life insurance
contracts issued between 1977 and 1988 are determined by a modification of
the Commissioners' Reserve Valuation Method using primarily the 1958 CSO
[IPC] and 1958 CSO [CONT] mortality tables with assumed interest rates
ranging from 2 1/2% to 5 1/2%. Reserves for life insurance contracts issued
after 1988 use the 1980 CSO [CONT] mortality tables with assumed interest
rates ranging from 4% to 5.5%.

Reserves for individual payout annuity contracts are determined using
primarily the 1971 Individual Annuity Mortality and the 1983 "A" mortality
tables with interest rates ranging from 6% to 11 1/4%.

Reserves for individual non-participating accumulator annuities in the
general account are calculated according to the Commissioners' Annuity
Reserve Valuation Method (CARVM) with interest rates ranging from 4% to
8 1/4%.

Changes in actuarial reserves due to changes in valuation assumptions are
shown as adjustments to accumulated surplus.

[e] Certain acquisition costs, such as commissions and other costs incurred
in connection with new policies, are charged to operations in the year
incurred. For life insurance policies issued after 1977, a partial offset
is obtained by a deferral and amortization over 20 years of some
acquisition costs through the use of a modified net premium method for
actuarial reserves which matches costs of issue, administration and claims
with premium income.

<PAGE> 59

CANADA LIFE INSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS

December 31, 1995

2. BASIS OF ACCOUNTING (Cont'd)

[f] Premiums and annuity considerations paid annually are recorded as income
on the policy anniversary date. Premiums and annuity considerations
collected on other than an annual basis are included in income as they
become receivable.

[g) As prescribed by the NAIC, the company reports an Asset Valuation Reserve
(AVR). The AVR is computed in accordance with a prescribed formula and
represents a provision for possible fluctuations in the value of bonds,
equity securities, mortgage loans, real estate and other invested assets.
Changes to the AVR are charged or credited directly to unassigned surplus.

[h] As prescribed by the NAIC, the Company reports an Interest Maintenance
Reserve (IMR) that represents the net accumulated unamortized realized
capital gains and losses attributable to changes in the general level of
interest rates on sales of fixed income investments, principally bonds and
mortgage loans. Such gains or losses are amortized into income on a
straight-line basis over the remaining period to maturity based on
groupings of individual securities sold in five-year bands.

[i] Realized capital gains and losses for other investments, net of any
applicable capital gains tax or benefits, are reflected in the statements
of operations. Unrealized capital gains and losses are reflected as a
direct credit or charge to the surplus of the Company.

[j] Income taxes are provided based on an estimate of the amount currently
payable which may not bear a normal relationship to pre-tax income because
of timing and other differences in the calculation of taxable income.

[k] Separate accounts are maintained to receive and invest premium payments
under individual variable annuity policies issued by the Company. The
assets and liabilities of the separate accounts are clearly identifiable
and distinguishable from other assets and liabilities of the Company, and
the contractholder bears the investment risk. Separate account assets
are reported at fair value. The operations of the separate accounts are
not included in the accompanying financial statements.

[l] Annual policyholder dividends are calculated using either the contribution
method or a modified experience premium method. These methods distribute
the aggregate divisible surplus among policies in the same proportion as
the policies are considered to have contributed to divisible surplus. A
proportion of earnings and surplus is allocated to participating policies
based on various allocation bases.

[m] For the purposes of the statements of cash flows, cash refers to demand
deposits with banks and other financial institutions.

<PAGE> 60

CANADA LIFE INSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS

December 31, 1995

2. BASIS OF ACCOUNTING (Cont'd)

[n] The Company utilizes derivative instruments where appropriate in the
management of its asset/liability matching and to hedge against
fluctuations in interest rates. Gains and losses resulting from these
instruments are included in income on a basis consistent with the
underlying assets or liabilities that have been hedged. Options are
valued at amortized cost and futures are valued at initial margin deposit
adjusted by changes in market value. Both items are reported as other
assets.

[o] The preparation of statutory-basis financial statements requires
management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Actual
results could differ from those estimates.

[p] Certain amounts in the accompanying financial statements for 1994 have
been reclassified to conform with 1995 financial statement presentation.

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

Cash and interest-bearing deposits, short-term investments and policy loans:
The carrying amounts reported in the balance sheets for these items approximate
their fair values.

Investment securities: Fair values for investment securities are based on
quoted market prices, where available. For securities not actively traded,
fair values are estimated using values obtained from independent pricing
services or, in the case of private placements, are estimated by discounting
expected future cash flows using a current market rate applicable to the yield,
credit quality, and maturity of the investments.

Mortgage loans: The fair values for mortgage loans are estimated based on
discounted cash flow analyses, using interest rates currently being offered for
similar loans to borrowers.

Derivative Instruments: The Company utilizes derivative instruments limited to
contracts to buy or sell U.S. Treasury securities used to hedge specific asset
and liability interest rate risks. Fair values for the Company's interest rate
futures contracts and options that have not settled are based on current
settlement values.

Investment contracts: Fair values for the Company's liabilities under
investment-type insurance contracts are estimated using discounted liability
calculations, adjusted to approximate the effect of current market interest
rates for the assets supporting the liabilities.

The carrying amount and fair value of the Company's liabilities for
investment-type insurance contracts (included with actuarial reserves liability
in the balance sheet) at December 31, 1995 are as follows:

<TABLE>
<CAPTION>
CARRYING AMOUNT FAIR VALUE
--------------- ----------
[in thousands of dollars]
<S> <C> <C>
Investment contracts $14,273 $16,342
------- -------
</TABLE>

<PAGE> 61

CANADA LIFE INSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS

December 31, 1995

3. INVESTMENTS

[a] Additional information with respect to net investment income is as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1995 1994 1993
- -------------------------------------------------------------------------------------------
[in thousands of dollars]

<S> <C> <C> <C>
Interest and dividends on fixed maturities $ 9,653 $ 8,857 $ 7,816
Income on real estate 17 27 10
Dividends on equity securities 145 183 190
Amortization of interest maintenance reserve 132 78 59
Interest on:
Mortgage loans 7,536 7,167 7,189
Policy loans 704 651 653
Short-term investments 388 236 145
Other income 28 0 42
- -------------------------------------------------------------------------------------------
18,603 17,199 16,104
Less: investment expenses 494 383 415
- -------------------------------------------------------------------------------------------
NET INVESTMENT INCOME $18,109 $16,816 $15,689
===========================================================================================
</TABLE>

[b] Summary of realized capital gains:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1995 1994 1993
- ------------------------------------------------------------------------------------------
[in thousands of dollars]

<S> <C> <C> <C>
Realized capital gains:
Fixed maturities $1,146 $(1,613) $ 841
Equity securities 775 353 438
Mortgage loans (62) 0 (80)
Real estate 31 108 0
Derivative instruments (359) 0 0
- ------------------------------------------------------------------------------------------
1,531 (1,152) 1,199
Income tax benefit (expense) (521) 317 (423)
Transfer (to) from interest maintenance reserve (823) 1,065 (548)
- ------------------------------------------------------------------------------------------
NET REALIZED CAPITAL GAINS $ 187 $ 230 $ 228
==========================================================================================
</TABLE>

<PAGE> 62

CANADA LIFE INSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS

December 31, 1995

3. INVESTMENTS (cont'd)

Proceeds from sales and maturities of fixed maturity investments for the years
ended December 31, 1995, 1994 and 1993 were $45,262,000, $39,234,000 and
$14,021,000, respectively. Gross gains of $1,679,000, $809,000 and $841,000
and gross losses of $534,000, $2,422,000 and $0, respectively, were realized on
those sales for the years ended December 31, 1995, 1994 and 1993.

[c] The amortized cost, carrying value, gross unrealized gains, gross
unrealized losses and fair values of fixed maturity investments by security
type are as follows:

<TABLE>
<CAPTION>
DECEMBER 31, 1995
------------------------------------------------------------------------
GROSS GROSS
AMORTIZED CARRYING UNREALIZED UNREALIZED
COST VALUE GAINS LOSSES FAIR VALUE
- -------------------------------------------------------------------------------------------------------
[in thousands of dollars]
<S> <C> <C> <C> <C> <C>
United States Government
agencies and authorities $ 51,763 $ 51,763 $8,227 $ (6) $ 59,984
Foreign governments 88 88 0 0 88
Public utilities 11,722 11,551 330 0 11,880
Mortgage-backed securities 9,772 9,772 0 0 9,772
All other corporate bonds 52,225 52,224 940 (102) 53,063
- -------------------------------------------------------------------------------------------------------

TOTAL FIXED MATURITIES $125,570 $125,398 $9,497 $(108) $134,787
=======================================================================================================
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, 1994
-------------------------------------------------------------------
GROSS GROSS
AMORTIZED CARRYING UNREALIZED UNREALIZED FAIR
COST VALUE GAINS LOSSES VALUE
- ----------------------------------------------------------------------------------------------------
[in thousands of dollars]
<S> <C> <C> <C> <C> <C>
United States Government
agencies and authorities $ 50,976 $ 50,976 $1,306 $(1,603) $ 50,679
Foreign governments 115 115 0 0 115
Public utilities 11,300 11,127 43 (34) 11,136
Mortgage-backed securities 9,820 9,820 0 0 9,820
All other corporate bonds 47,855 47,305 422 (162) 47,565
- ----------------------------------------------------------------------------------------------------

TOTAL FIXED MATURITIES $120,066 $119,343 $1,771 $(1,799) $119,315
====================================================================================================
</TABLE>

<PAGE> 63

CANADA LIFE INSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS
December 31, 1995

3. INVESTMENTS (cont'd)

Differences between the amortized cost and carrying value for fixed maturity
securities are due to the NAIC statutory requirement for fixed maturity
securities in default that the carrying value be set at the lower of amortized
cost or fair value.

Unrealized gains and losses on fixed maturities are based on NAIC required fair
values. For the years ended December 31, 1995, 1994 and 1993, there were
changes in net unrealized gains and losses on fixed maturities of $9,417,000,
$(5,246,000) and $1,538,000 respectively. These unrealized gains and losses
are not reflected in the accompanying financial statements. The Company's
investment policy, generally, is to hold fixed maturity investments until
maturity. However, under certain circumstances where there are changes in
business or financial conditions, individual securities may be liquidated prior
to maturity.

[d] The carrying value and the NAIC fair value of fixed maturity investments
by maturity date are shown below. Mortgage-backed securities were
included in the various categories in accordance with their scheduled
maturity table.

<TABLE>
<CAPTION>
DECEMBER 31, 1995
-----------------
CARRYING VALUE FAIR VALUE
- ------------------------------------------------------------------------------
[in thousands of dollars]
<S> <C> <C>
1 year or less $7,937 $8,008
Over 1 year through 5 years 35,004 35,633
Over 5 years through 10 years 30,587 31,550
Over 10 years 51,870 59,596
------------------------
$125,398 $134,787
========================
</TABLE>

[e] Unrealized capital gains and losses, resulting from carrying
marketable equity securities at fair value in the accompanying financial
statements, are recorded directly in surplus. The changes in the
unrealized gains (losses) on marketable equity securities were $1,077,000,
($445,000) and $32,000 for the years ended December 31, 1995, 1994 and
1993, respectively. The accumulated gross unrealized gains and accumulated
gross unrealized losses on marketable equity securities were as follows:

<TABLE>
<CAPTION>
1995 1994 1993
-------------------------
[in thousands of dollars]

<S> <C> <C> <C>
Accumulated gross unrealized gains $3,250 $2,259 $2,679
Accumulated gross unrealized losses (9) (95) (63)
----------------------
Net unrealized gains $3,241 $2,164 $2,616
======================
</TABLE>

<PAGE> 64

CANADA LIFE INSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS

December 31, 1995

3. INVESTMENTS (cont'd)

[f] The carrying value and fair value of the Company's investments in mortgage
loans and policy loans were as follows at December 31, 1995:

<TABLE>
<CAPTION>
CARRYING VALUE FAIR VALUE
------------------------------
[in thousands of dollars]
<S> <C> <C>
Commercial mortgages $45,708 $51,624
Residential mortgages 29,279 33,621
Write-downs on mortgage loans (202) 0
----------------------------
$74,785 $85,245
----------------------------
Policy loans $12,165 $12,165
============================
</TABLE>

The Company's distribution of mortgage loans by property type and by the ten
most significant states follows:

<TABLE>
<CAPTION>
DECEMBER 31, 1995
-------------------------------------
AMOUNT PERCENT
-------------------------------------
[in thousands of dollars]
<C> <C>
PROPERTY TYPE
Residential $29,279 39.2%
Retail 23,521 31.5%
General office buildings 8,668 11.6%
Industrial and warehouse 10,793 14.4%
Other 2,726 3.6%
Write-downs on mortgage loans (202) -0.3%
----------------------------
Total Mortgage loans $74,785 100.0%
============================
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, 1995
-------------------------------------
AMOUNT PERCENT
-------------------------------------
[in thousands
of dollars]
STATE
<S> <C> <C>
California $14,691 19.7%
Pennsylvania 9,433 12.6%
Ohio 8,298 11.1%
Illinois 6,034 8.1%
New York 5,104 6.8%
New Jersey 4,417 5.9%
Oregon 3,679 4.9%
Michigan 3,662 4.9%
Maryland 3,316 4.4%
Minnesota 3,174 4.3%
Other 13,179 17.6%
Write-downs on mortgage loans (202) -0.3%
--------------------------
Total $74,785 100.0%
==========================
</TABLE>

<PAGE> 65

CANADA LIFE INSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS

December 31, 1995

3. INVESTMENTS (cont'd)

The mortgage loans are typically collateralized by the related
properties, and the loan to value ratios at the date of loan origination
generally do not exceed 75%. The Company's exposure to credit loss in the
event of non-performance by the borrowers, assuming that the associated
collateral proved to be of no value, is represented by the outstanding
principal and accrued interest balances of the respective loans. During
1995, the mortgage loan reserve was increased by $0 and $62,000 was charged
against it.

No investment in any persons or their affiliates exceeded 10% of capital
and surplus as of December 31, 1995 and 1994.

The maximum and minimum lending rates for commercial mortgage loans
during 1995 was 9.875% and 7.750%, respectively.

Fire insurance is required on all properties covered by mortgage loans
at least equal to the excess of the loan over the maximum loan which would
be permitted by law without the buildings.

At December 31, 1995, the Company held mortgages with a carrying value
of $621,735 on which interest of $146,674 was more than one year overdue.
During 1995, the Company did not reduce interest rates on any outstanding
mortgage loans. At December 31, 1995, the Company had no mortgage loans
that were converted to loans that require payments of principal or interest
be made based upon the cash flows generated by the property serving as
collateral for the loans or that have a diminutive payment requirement. At
December 31, 1995, the Company had no outstanding amounts which had been
advanced by the Company. At December 31, 1995, the Company had no prior
liens outstanding on mortgage loans.

[g] The following tables represent a summary of investments held as of
December 31, 1995 and 1994:

<TABLE>
<CAPTION>
DECEMBER 31, 1995
-----------------
AMORTIZED COST FAIR VALUE CARRYING VALUE
--------------------------------------------
[in thousands of dollars]
<S> <C> <C> <C>
Fixed maturities [note 3[c]] $125,570 $134,787 $125,398
Preferred stocks 16 23 16
Common stocks 4,487 7,728 7,728
Mortgage loans on real estate 74,986 85,245 74,785
Policy loans 12,165 12,165 12,165
Short-term investments 3,200 3,200 3,200
---------------------------------------
Total investments $220,424 $243,148 $223,292
=======================================
</TABLE>

14
<PAGE> 66

CANADA LIFE INSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS

December 31, 1995

3. INVESTMENTS (cont'd)

<TABLE>
<CAPTION>
DECEMBER 31, 1994
-----------------

AMORTIZED COST FAIR VALUE CARRYING VALUE
---------------------------------------------
[in thousands of dollars]
<S> <C> <C> <C>
Fixed maturities [note 3[c]] $120,066 $119,315 $119,343
Preferred stocks 17 20 17
Common stocks 4,681 6,844 6,844
Mortgage loans on real estate 71,312 71,637 71,048
Policy loans 11,924 11,924 11,924
Short-term investments 2,850 2,850 2,850
--------------------------------------
Total investments $210,850 $212,590 $212,026
======================================
</TABLE>

4. FEDERAL INCOME TAXES

The statutory federal income tax provision amount at the statutory rate of 34%
differs from the effective tax provision amount as follows:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
1995 1994 1993
-------------------------
[in thousands of dollars]
<S> <C> <C> <C>
Computed income taxes at statutory rate $194 $19 $343
Increase (decrease) in income taxes resulting from:
Policyholder dividends 71 17 52
Actuarial reserves 230 306 259
Prior year income tax under/(over) provision 111 (181) 487
Deferred acquisition cost tax 65 220 140
Other (137) 98 (43)
--------------------
$534 $479 $1,238
====================
</TABLE>

As of December 31, 1995 and 1994, the federal income taxes receivable were
$1,588,000 and $521,000 respectively.

During 1995, 1994 and 1993, the Company made cash payments on behalf of federal
income taxes of $2,116,000, $850,000 and $2,015,000, respectively.

5. PARTICIPATING INSURANCE

Participating insurance accounted for 76%, 75% and 77% of total ordinary
insurance in force, and premium income from ordinary life participating
policies amounted to 96%, 96% and 91% of total life insurance premiums during
1995, 1994 and 1993, respectively.

15
<PAGE> 67

CANADA LIFE INSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS

December 31, 1995

6. RELATED PARTY TRANSACTIONS

[a] REINSURANCE

Various reinsurance agreements exist between the Company and its Parent,
primarily in the form of yearly renewable term treaties for life insurance,
and modified coinsurance for annuities. Currently all ceding premiums are
reinsured, with the Parent only. Premiums ceded by the Company during 1995
were $1,495,000 [1994 - $1,339,000, 1993 - $1,053,000]. Life insurance in
force ceded to the Parent as of December 31, 1995 and 1994 was $533,402,000 and
$474,463,000, respectively. These reinsurance transactions, however, do not
relieve the Company of its primary obligation to its policyholders.

[b] OTHER

In addition to the reinsurance agreements mentioned above, the Company and its
Parent have an agreement to provide services for each other. For the years
ended December 31, 1995, 1994 and 1993, the net cost of these services to the
Company amounted to $1,611,000, $1,618,000 and $1,220,000, respectively. As of
December 31, 1995 and 1994, the amounts payable to the Parent were $414,000 and
$741,000, respectively.

[c] SEPARATE ACCOUNTS

The Company's non-guaranteed separate variable accounts represent primarily
funds invested in variable annuity policies issued by the Company. The assets
of these funds are invested in either shares of Canada Life of America Series
Fund, Inc., an affiliated diversified, open-ended management investment company
or in shares of two unaffiliated management investment companies.

Information regarding the Separate Accounts of the Company is as follows:

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
1995 1994
[in thousands of dollars]

<S> <C> <C>
Premiums, considerations, or deposits received $353 $217
Reserves, subject to discretionary withdrawal, at market value 924 595
Reserves, not subject to discretionary withdrawal 0 0
</TABLE>

7. REINSURANCE

In addition to the reinsurance ceded to the Parent described in note 6, the
Company had until September 1995 assumed business from the Serviceman's Group
Life Insurance (SEGLI) program. In 1994, the Company assumed $429,809,000 of
life insurance in force from SEGLI and premiums assumed on this business for
1995, 1994 and 1993 were $217,000, $432,000 and $450,000, respectively.

<PAGE> 68

CANADA LIFE INSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS

December 31, 1995

8. ACTUARIAL RESERVES

Withdrawal characteristics of annuity actuarial reserves and deposit
liabilities as at December 31, 1995 are as follows:

<TABLE>
<CAPTION>
AMOUNT % OF TOTAL
------ ----------
<S> <C> <C>
Subject to discretionary withdrawal with adjustment
- with market value adjustment $ 0 0.0%
- at book value less surrender charge 16,957,329 11.9%
------------ ----------
Subtotal 16,957,329 11.9%

Subject to discretionary withdrawal without adjustment
- at book value (minimal or no charge adjustment) 4,705,603 3.3%

Not subject to discretionary withdrawal provision 120,669,161 84.8%
------------ ----------
Total annuity actuarial reserves and deposit
fund liabilities (gross) 142,332,093 100.0%
------------ ----------

Less: reinsurance 0
------------
Total annuity actuarial reserves and deposit
fund liabilities (net) $142,332,093
============
</TABLE>

In March 1995 the NAIC adopted Actuarial Guideline 33 (AG 33) which codified
the basic interpretation of CARVM and applies to all individual annuities
issued on or after January 1, 1981. The effective date of AG 33 was December
31, 1995. AG 33 required that the reserve held be the greatest actuarial
present value of any possible future cash value or other benefit. A three year
phase-in period was allowed to recognize any reserve increase as a result of
implementation of AG 33. The Company implemented AG 33 effective December 31,
1995, and recognized in 1995 a decrease in surplus of $233,000 for one third of
the cumulative effect on reserves for prior years. The Company anticipates it
will recognize an additional decrease in surplus of $233,000 in both 1996 and
1997 to complete the phase in of AG33.

9. MINIMUM CAPITAL AND SURPLUS AND OTHER REGULATORY
REQUIEREMEENTS

Under applicable New York insurance law, the Company is required to maintain a
minimum capital of $1,000,000 and a surplus at least equal to fifty percent of
such capital.

In accordance with statutory requirements, bonds carried at a value of $349,000
and $349,000 were on deposit with insurance regulatory authorities as of
December 31, 1995 and 1994, respectively.

17
<PAGE> 69

CANADA LIFE INSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS

December 31, 1995

10. DERIVATIVE INSTRUMENTS

The Company is party to various derivative instruments limited to contracts to
buy or sell U.S. Treasury securities used to hedge specific asset and liability
interest rate risks. Management actively monitors the use and level of these
instruments to ensure that credit and liquidity risks are maintained within
pre-approved levels. Futures are valued at initial margin deposit adjusted for
unrealized gains and losses.

The notional amounts and the carrying amounts of outstanding derivative
instruments are as follows:

<TABLE>
<CAPTION>
NOTIONAL AMOUNT CARRYING AMOUNT
DECEMBER 31 DECEMBER 31
1995 1994 1995 1994
---------------------------------------------------
[in thousands of dollars] [in thousands of dollars]
<S> <C> <C> <C> <C>
Futures (government bonds) $0 $300 $0 $9
---------------------------------------------------
Total $0 $300 $0 $9
===================================================
</TABLE>

The Company's investment in derivative instruments may subject it to market
risk which is associated with adverse movements in the underlying interest
rates, equity prices and commodity prices. Since the Company's investment in
derivative instruments is confined to hedging activities, market risk is
minimal.

11. POSTRETIREMENT BENEFITS

In addition to pension benefits, the Company provides certain health care and
life insurance benefits ('postretirement benefits") for retired employees.
Substantially all employees may become eligible for these benefits if they
reach retirement age while working for the company.

In 1995, in accordance with guidance from the NAIC Accounting Policies and
Procedures manual, the Company changed its method of accounting for the costs
of its retirement benefit plans to an accrual method, and elected to recognize
the transition obligation for retirees and fully eligible or vested employees
in statutory surplus in the current year. The cumulative effect of recognizing
this obligation for unfunded prior years postretirement benefits was a decrease
to surplus of $401,000 at January 1, 1995.

Postretirement benefit cost for the year ended December 31, 1995, was $81,000;
it includes the expected cost of postretirement benefits for newly eligible or
vested employees, interest cost, gains and losses arising from differences
between actuarial assumptions and actual experience. The Company made
contributions to the plans of $22,000 in 1995, as claims were incurred.

At December 31, 1995, the unfunded postretirement benefit obligation for
retirees and other fully eligible or vested plan participants was $0. The
estimated cost of the benefit obligation for active employees was $32,000. The
discount rate used in determining the accumulated

<PAGE> 70

CANADA LIFE INSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS

December 31, 1995

11. POSTRETIREMENT BENEFITS (cont'd)

postretirement benefit obligation was 8% and the health care cost trend rate
was 13%, graded to 7% over 17 years.

The health care cost trend rate assumption has a significant effect on the
amounts reported. To illustrate, increasing the assumed health care cost trend
rates by one percentage point in each year would increase the postretirement
benefit obligation as of December 31, 1995, by $80,000 and the estimated
eligibility cost and interest components of net periodic postretirement benefit
cost for 1995 by $30,000.

<PAGE> 71

PART C

OTHER INFORMATION

<PAGE> 72

PART C
OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements

All required financial statements are included in Part B of this
Registration Statement.

(b) Exhibits
(1) Resolution of the Board of Directors of Canada Life Insurance
Company of New York authorizing establishment of the 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

(b) Riders and Endorsements
(5) Form of Application

(6) (a) Certificate of Incorporation of Canada Life Insurance Company
of New York*
(b) By-Laws of Canada Life Insurance Company of New York*
(c) Amendment to the By-Law of Canada Life Insurance Company
of New York passed by the Board on November 19, 1993.***

(7) Not applicable
(8) Buy-Sell Agreement**
(9) Opinion and Consent of Counsel**
(10) (a) Consent of Counsel

(b) Consent of Independent Counsel
(c) Consent of Independent Auditors

(11) Not applicable
(12) Not applicable
(13) Not applicable

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

* Incorporated herein by reference to the initial filing of the
Registration Statement on Form N-4 for Variable Account 1 of Canada Life
Insurance Company of New York (File No. 33-32199) made on November 21,
1989.

** 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 New York (File No. 33-64240) made on June 10, 1993.

*** Incorporated herein by reference with the Post-Effective Amendment No. 2
of this Form N-4 Registration Statement (File No. 33-64240) filed on April
14, 1995.

<PAGE> 73

Item 25. Directors and Officers of the Depositor

<TABLE>
<CAPTION>
Name and Principal
Business Address Positions and Offices with Depositor
------------------ ------------------------------------
<S> <C>
David A. Nield (1) Chairman and Director
D. Allen Loney (2) President and Director
Paul R. McCadam (3) Vice-President and Chief Operating Officer
Donald M. Cooper (1) Financial Vice-President, Treasurer and Director
Mary L. Craft (2) Director of Administration
Dr. Robert W. Lund (2) Medical Director
Donald K. Cooper (3) Director of Marketing
Jeffrey R. Wilt (3) Director of Marketing
William S. McIlwaine (2) Director of Group Sales
Don D. Myers (2) Accounting Officer
Gary M. Haddow (2) Administrative Officer
Kenneth T. Ledwos (2) Actuary
Sergio Benedetti (2) Marketing Actuary
Janet G. Deskins Marketing Actuary
John W. Pratt (2) Actuarial Associate
M. G. Libenson Internal Auditor
David A. Hopkins (2) Secretary
Roy W. Linden (1) Assistant Secretary
George N. Isaac (1) Assistant Treasurer
Edward P. Ovsenny (1) Assistant Treasurer
Brian J. Lynch (1) Assistant Treasurer
Wendy M. Michaud (3) Chief Underwriter
Gordon N. Farquhar (4) Director
Christopher T. Green (5) Director
Alfred F. Kelly (6) Director
William E. Kelly (7) Director
H. W. McCubbin (8) Director
William B. Morris (9) Director
Harry Van Benschoten (10) Director
Julius Vogel (11) 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, GA,
USA 30339.
(3) The business address is 500 Mamaroneck Avenue, Harrison, New York, USA
10528.
(4) The business address is 43 Meadow Avenue, Weekapaug, Rhode Island, USA
02891
(5) The business address is 1000 Cathedral Place, 298 Main Street, Buffalo, New
York, USA 14202.
(6) The business address is 232 Crestwood Avenue, Tuckahoe, New York, USA 10707
(7) The business address is 320 Park Avenue, New York, New York, USA 10022.
(8) The business address is 4 Glenellen Drive East, Toronto, Ontario, Canada
M8Y 2G5
(9) The business address is 9 West 57th Street, New York, New York, USA 10019
(10) The business address is 105 Seminary Street, New Canaan, Connecticut,
U.S.A. 06840
(11) The business address is 72 Colt Road, Summit, New Jersey, USA 07901

<PAGE> 74

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 Michigan Ownership of all voting securities Life Insurance
Company of America (CLICA) through Canada Life

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
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% through 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
</TABLE>
<PAGE> 75

<TABLE>
<S> <C> <C> <C>
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

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

None.

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 CLNY at its
Home Office address at 500 Mamaroneck Avenue, Harrison, New York
10528.

Item 31. Management Services

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

Item 32. Undertakings**

- ---------------------------
** 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 New York (File No. 33-64240) made on June 10, 1993.

<PAGE> 76

SIGNATURES

As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant certifies that it meets all the requirements for
effectiveness of this Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933, and has caused this Post-Effective Amendment Number 4
to be signed on its behalf by the undersigned, thereunto duly authorized, in
the City of New York, and the State of New York on this 26th day of April ,
1996.

CANADA LIFE INSURANCE COMPANY OF NEW YORK
VARIABLE ANNUITY ACCOUNT 2

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

CANADA LIFE INSURANCE COMPANY OF NEW YORK

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

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

<TABLE>

SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ D. A. Nield Chairman and Director April 26, 1996
- -------------------------- --------------
D. A. Nield

/s/ D. A. Loney President and Director April 26, 1996
- -------------------------- --------------
D. A. Loney

/s/ D. M. Cooper Financial Vice President April 26, 1996
- -------------------------- and Treasurer, and --------------
D. M. Cooper Director

/s/ G. N. Farquhar Director April 26, 1996
- -------------------------- --------------
G. N. Farquhar

/s/ C. T. Greene Director April 26, 1996
- -------------------------- --------------
C. T. Greene

/s/ A. F. Kelly Director April 26, 1996
- -------------------------- --------------
A. F. Kelly
</TABLE>

<PAGE> 77

<TABLE>
<S> <C> <C>
/s/ W. E. Kelly Director April 26, 1996
- -------------------------- --------------
W. E. Kelly

/s/ H. W. McCubbin Director April 26, 1996
- -------------------------- --------------
H. W. McCubbin

/s/ W. B. Morris Director April 26, 1996
- -------------------------- --------------
W. B. Morris

/s/ H. Van Benschoten Director April 26, 1996
- -------------------------- --------------
H. Van Benschoten

/s/ J. Vogel Director April 26, 1996
- -------------------------- --------------
J. Vogel
</TABLE>

<PAGE> 78

EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit Number Description of Exhibit
-------------- -------------------------------
<S> <C>
4 (a) Form of Annuity
4 (b) Riders and Endorsements
5 Form of Application
10 (a) Consent of Counsel
10 (b) Consent of Independent Counsel
10 (c) Consent of Independent Auditors
</TABLE>

<PAGE> 1

Exhibit 4 (a)

Form of Annuity Policy

<PAGE> 2

CANADA LIFE INSURANCE COMPANY OF NEW YORK
HOME OFFICE: 500 MAMARONECK AVENUE, HARRISON, NY 10528

If you have any questions or complaints about this policy, you may call us toll
free at 1-800-905-1959.

We are pleased to issue this policy to you.

We agree to pay the proceeds as described in this policy, subject to its
provisions.

PLEASE READ THIS POLICY CAREFULLY, SINCE IT IS A LEGAL CONTRACT BETWEEN YOU AND
US.

THE DOLLAR AMOUNTS OF ACCUMULATION BENEFITS AND VALUES OF THIS POLICY PROVIDED
BY THE VARIABLE ACCOUNT MAY INCREASE OR DECREASE DAILY, DEPENDING ON THE
INVESTMENT PERFORMANCE OF THE PORTFOLIO OF THE FUND IN WHICH YOUR ELECTED
SUB-ACCOUNTS ARE INVESTED, AND ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNTS.
NO MINIMUM AMOUNT OF POLICY VALUE IS GUARANTEED, EXCEPT FOR ANY AMOUNTS IN THE
FIXED ACCOUNT.

TEN DAY RIGHT TO EXAMINE POLICY

YOU HAVE TEN DAYS AFTER YOU RECEIVE THIS POLICY TO DECIDE IF IT MEETS YOUR
NEEDS. IF IT DOES NOT, YOU MAY RETURN IT TO OUR HOME OFFICE OR TO THE AGENT
FROM WHOM YOU BOUGHT IT. WE SHALL CANCEL THE POLICY FROM THE POLICY DATE AND
PROMPTLY RETURN THE POLICY VALUE.

FLEXIBLE PREMIUM VARIABLE DEFERRED ANNUITY
Flexible premiums as stated in the Additional Premiums Provision.
Accumulation benefits and values are variable, except for amounts in the Fixed
Account.
After the Annuity Date payment options are on a guaranteed basis.
Death Benefit payable upon death of the last surviving annuitant
before the Annuity Date .
Nonparticipating - Not eligible for dividends

<PAGE> 3

TABLE OF CONTENTS

<TABLE>
<S> <C>
POLICY DETAILS 3

DEFINITIONS 4

PAYMENT OF PROCEEDS
Proceeds 4
Proceeds On Annuity Date 5
Proceeds On Maturity Date 5
Proceeds On Surrender 5
Proceeds On Death Of Last Surviving Annuitant Before
Annuity Date (The Death Benefit) 5
Proceeds On Death Of Any Owner Before or After
Annuity Date 6
Conformity With Laws 6

PREMIUMS
Initial Premium 7
Additional Premiums 7
Net Premium 7
Net Premium Allocation Among Sub-Accounts And
Fixed Account 7

THE VARIABLE ACCOUNT
Variable Account 7
Sub-Accounts 8
Variable Account Value 8
Units 8
Unit Value 8
Net Investment Factor 9
Reserved Rights 9
Change in Investment Policy 9
Valuation Periods and Valuation Days 10

THE FIXED ACCOUNT
Fixed Account 10
Fixed Account Value 10

TRANSFERS
Transfer Privilege 11
Restrictions on Transfers From Fixed Account 11
Transfer Processing Fee 11

POLICY VALUES
Policy Value 12
Cash Surrender Value 12
Partial Withdrawals 12
Surrender Charges 13
Policy Administration Charge 13

Page 2
</TABLE>

<PAGE> 4

TABLE OF CONTENTS (CONTINUED)

<TABLE>
<S> <C>
Annuity Date 14
Termination 14
Basis of Values 14

PAYMENT OF BENEFITS, PARTIAL WITHDRAWALS,
CASH SURRENDERS & TRANSFERS - POSTPONEMENT 14

GENERAL PROVISIONS
Contract 15
Incontestability 15
Owner 15
Beneficiary 16
Written Notice 16
Misstatement of Age and Sex 16
Periodic Reports 16
Assignment 17
Our Consent 17
Policy Date 17
Effective Date 17
Currency 17
Place of Payment 17
Modification 17
Nonparticipation 17

PAYMENT OPTIONS
Election of Payment Options 18
Payment Dates 18
Age and Survival of Payee 18
Death of Payee 18
Betterment of Income 18
Table of Payments 19

</TABLE>
Page 2A
<PAGE> 5

DEFINITIONS
- --------------------------------------------------------------------------------

"You" and "your" means the owner(s) of the policy.

"We", "our" and "us" means Canada Life Insurance Company of New York.

"Written notice" is defined in the "WRITTEN NOTICE" provision.

"Annuitant" or "co-annuitant" means the person (or persons) whose life (or
lives) is used to determine the duration of any payments made under a payment
option involving life contingencies.

"Designated Beneficiary" means the person designated by you as beneficiary and
to whom the benefits of the policy passes by reason of your death.

"Annuity Date" means 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. The Annuity Date is shown in the Policy Details unless
later changed.

"Maturity Date" means the first day of the month after any annuitant's 100th
birthday or any earlier date required by law.

"Proceeds" means an amount payable to you. This amount may be the policy
value, cash surrender value or the death benefit, depending on events
surrounding the payment as described below.

"Policy Value" means the sum of the Variable Account value and the Fixed
Account value.

"Cash Surrender Value" means the policy value, less 1) any applicable surrender
charge; and, 2) the annual administration charge.

PAYMENT OF PROCEEDS
- --------------------------------------------------------------------------------

PROCEEDS

Proceeds means the amount we will pay when the first of the following occurs:

1. the policy reaches the annuity date; or
2. the policy reaches the maturity date; or
3. the policy is surrendered; or
4. when 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 unless an election is made for a payment option. See
"Election of Options". This policy ends when we pay the proceeds.

"Due proof of death" is proof of death that is satisfactory to us. Such proof
may consist of: 1) a certified copy of the death certificate; and/or 2) a
certified copy of the decree of a court of competent jurisdiction as to the
finding of death.

We will deduct any applicable premium tax from the proceeds described below,
unless we already deducted the tax from the premiums when paid. See the "Net
Premium" provision. Currently, no premium tax is levied in New York.

Page 4

<PAGE> 6

PROCEEDS ON ANNUITY DATE

If you have elected to receive the proceeds under Payment Option 1, we will pay
the policy value as described in the "Policy Values" provision. If proceeds
are to be paid in a lump sum, we will pay the cash surrender value as described
in the "Cash Surrender Value" provision.

PROCEEDS ON MATURITY DATE

The proceeds we will pay is the policy value.

PROCEEDS ON SURRENDER

If you surrender this policy before the annuity date the proceeds we will pay
is the cash surrender value. No death benefit is payable if the policy is
surrendered before the last surviving annuitant's death or any owner's death.

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

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

If we receive due proof during the first 5 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 such due proof.

If we receive such due proof after the first 5 policy years, the death benefit
is the greater 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, 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, 25, etc.)

Page 5
<PAGE> 7

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 then the
greater of "1" or "2" above.

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.

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

Owner's Death Prior to Annuity Date

If you die prior to the annuity date, Federal Tax Law requires the policy value
to be distributed within 5 years after the date of your death regardless of
whether or not you are an annuitant or co-annuitant. If a co-annuitant has
been designated, and you die prior to the annuity date, then a distribution
will also be required by Federal tax law. In the event of your death prior to
the annuity date, the following rules shall apply:

1. If we receive due proof of your death before the annuity date and
you are not the last surviving annuitant, the proceeds we will pay to
the beneficiary is the policy value as of the date of your death.
2. If we receive due proof of your death before the annuity date and
you are the last surviving annuitant, the proceeds we will pay to the
beneficiary is the death benefit described in the "Proceeds on Death
of Annuity Before Annuity Date" provision.

Spouse as Designated Beneficiary

If you die prior to the annuity date and your spouse is the designated
beneficiary, the policy may be continued with your spouse as the owner of the
policy. In such event, no distribution would be required by Federal tax law.

Owner's Death After Annuity Date

If you die on or after the annuity date, any remaining payments must be
distributed at least as rapidly as under the payment option in effect on the
date of your 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 such distribution
begin within one year of your death.

If you are not a natural person, the primary annuitant as determined in
accordance with Section 72(s) of the Internal Revenue Code will be treated as
owner for purposes of these distribution requirements, and any change in the
primary annuitant will be treated as the death of the owner.

CONFORMITY WITH LAWS

To the extent this policy conflicts with any applicable laws or the
requirements of the Internal Revenue Service concerning distributions on death,
this policy shall be considered to be amended to conform.

Page 6
<PAGE> 8

PREMIUMS
- --------------------------------------------------------------------------------

INITIAL PREMIUM

The initial premium is shown in the Policy Details and is payable on or before
the effective date.

ADDITIONAL PREMIUMS

You may make additional premium payments at any time during any annuitant's
lifetime and before the annuity date. The amount of additional premium
payments may vary, but is subject to these rules:

1. the minimum additional premium that we will accept is $600.
However, we will accept premium payments under a pre-authorized check
agreement with a minimum premium payment of $100 per month ($50 per
month if an Individual Retirement Annuity); and
2. 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.

A confirmation statement will be issued to you for financial transactions.

NET PREMIUM

The net premium is the premium paid less any premium tax that the applicable
jurisdiction levies on us relating to the policy for the year the premium is
paid. Currently, no premium tax is levied in New York.

NET PREMIUM ALLOCATION AMONG SUB-ACCOUNTS AND FIXED ACCOUNT

You elected in your application how you wanted 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%.

THE VARIABLE ACCOUNT
- --------------------------------------------------------------------------------

VARIABLE ACCOUNT

We established the Canada Life Insurance Company of New York Variable Annuity
Account 2 (called "the Variable Account"). The Variable Account is registered
with the Securities and Exchange Commission as a unit investment trust under
the Investment Company Act of 1940. The Variable Account is also subject to
the laws of the State of New York.

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
assets in the Variable Account are used to support the operation of and provide
the variable values and benefits for this policy and similar policies.

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. 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.

Page 7
<PAGE> 9

SUB-ACCOUNTS

The Variable Account currently consists of the sub-accounts shown in the
current prospectus you received. Each sub-account invests in shares of one
portfolio of the Seligman Portfolios, Inc. (the "Fund"). Shares of a portfolio
are purchased and redeemed for a 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 its net
asset value. The Fund prospectus you received defines the net asset value and
describes the portfolios of the Fund.

The dollar amounts of accumulation values and benefits of this policy provided
by the Variable Account depend on the investment performance of the portfolio
of the Fund in which your elected sub-accounts are invested. We do not
guarantee the investment performance of the portfolios. You bear the full
investment risk for amounts applied to the elected sub-accounts.

VARIABLE ACCOUNT VALUE

The policy Variable Account value before the annuity date is determined by
multiplying

1. the number of units credited to this policy for each sub-account;
by
2. the current unit value of these units.

UNITS

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

1. the policy administration charge shown in the Policy Details is
assessed;
2. the date we receive and process your written notice for a partial
withdrawal or surrender;
3. the policy reaches the annuity date ; or
4. the date we receive due proof of your death or the last surviving
annuitant's death.

UNIT VALUE

The unit value to each sub-account for the 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:

1. the unit value at the end of the immediately preceding valuation
period; by
2. 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.

Page 8

<PAGE> 10

NET INVESTMENT FACTOR

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 annualized rate
of the daily administration fee is shown on the Policy Details.

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

(a) is the next 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 series at the end
of the preceding valuation period, adjusted for the net capital
transactions and dividends declared during the current valuation
period.

RESERVED RIGHTS

When permitted by law, we reserve the right to:

1. create new variable accounts;
2. combine variable accounts, including the Canada Life Insurance
Company of New York Variable Annuity Account 2;
3. remove, combine or add sub-accounts and make the new sub-accounts
available to policyowners at our discretion;
4. add new portfolios of the Fund or of other registered investment
companies;
5. deregister the Variable Account under the Investment Company Act
of 1940 if registration is no longer required;
6. make any changes required by the Investment Company Act of 1940;
7. operate the Variable Account as a managed investment company
under the Investment Company Act of 1940 or any other form permitted
by law; and
8. substitute shares of another portfolio of the Fund or shares of
another registered open-end investment company or any other reserved
rights as detailed in the prospectus.

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 for a sub-account in the Variable Account may not be
changed unless the change is approved, if required, by the New York Insurance
Department.

Page 9
<PAGE> 11

VALUATION PERIODS AND VALUATION DAYS

A valuation period for each sub-account is 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.

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

THE FIXED ACCOUNT
- --------------------------------------------------------------------------------

FIXED ACCOUNT

Amounts in the Fixed Account are part of our general 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 rates we determine. We
guarantee the interest rate will not be less than 3% per annum. 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.

FIXED ACCOUNT VALUE

This policy's Fixed Account value before the annuity 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 applicable surrender charges; minus
5. any policy administration charge deducted from the amount in the
Fixed Account; plus
6. interest credited to the amount in the Fixed Account.

Page 10

<PAGE> 12

TRANSFERS
- --------------------------------------------------------------------------------

TRANSFER PRIVILEGE

You may transfer all or 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 the availability of a
sub-account or shares of a portfolio and subject to these general restrictions
and the additional restrictions below in "Restrictions on Transfers from Fixed
Account":

1. the minimum transfer amount is $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.

RESTRICTIONS ON TRANSFERS FROM THE FIXED ACCOUNT

You may transfer an amount from the Fixed Account to the sub-account(s) in 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. 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 amount.

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).
The first four transfers during each policy year are free. We may assess a
$25 processing fee for each additional transfer. For the purposes of assessing
the fee, each written notice of 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 Fixed Account.

Page 11
<PAGE> 13

POLICY VALUES
- --------------------------------------------------------------------------------

POLICY VALUE

The policy value is the sum of the Variable Account value and the Fixed Account
value.

CASH SURRENDER VALUE

The cash surrender value is the policy value less: 1) any applicable surrender
charge; and 2) the policy administration charge. The cash surrender value will
be determined on the date we receive and file your written notice for surrender
and this policy at our Home Office.

You may surrender this policy for its cash surrender value at any time before
the earlier of the death of the last surviving annuitant, the annuity date .
You may elect to have the cash surrender value paid in a single sum or under a
payment option. This policy ends when we pay the cash surrender value. You
may avoid a surrender charge by electing to apply the policy value under
Payment Option 1.

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, or the annuity date,
subject to these limits:

1. the minimum partial withdrawal is $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; 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, trust company or a savings and loan.

On the date we receive and process your written notice for a partial withdrawal
at our Home 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.

You may specify the amount to be withdrawn from certain sub-accounts or the
Fixed Account. If you do not provide this 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 and Fixed Account is inadequate to comply with your
withdrawal request, we will first withdraw from the specified sub-accounts and
Fixed Account. The remaining balance will be withdrawn proportionately from
the other sub-accounts and Fixed Account in which you are invested.

Page 12
<PAGE> 14

SURRENDER CHARGE

For the purposes 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> <C>
1. Up to 100% of positive investment earnings
for each variable sub-account available at
the time the request is made, once a
policy year; plus None
2. Up to 100% of the current policy year's
interest on the Fixed Account at the time
the request for the withdrawal or
surrender 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. Premium subject to a surrender charge:

Policy Years Since Premiums Were 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 the Fixed Account being surrendered or partially withdrawn in relation to
the amount(s) withdrawn. If the amount remaining in a sub-account or 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

We will assess the policy administration charge shown in the Policy Details:

1. for the prior policy year on the policy anniversary; and
2. for the current policy year on the date this policy is
surrendered for its cash surrender value, unless the policy is
surrendered on a 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.

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 from the
applicable sub-account based on the unit value at the end of the valuation
period when the charge is assessed. If the charge is obtained from the Fixed
Account, we will reduce this policy's Fixed Account value by the amount of the
charge.

Page 13

<PAGE> 15

ANNUITY DATE

You may change the annuity date, subject to these limitations

1. we must receive your written notice at our Home 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 request; and
3. the requested annuity date cannot be any later than the maturity
date.

TERMINATION

We may pay you the cash surrender value and end this policy if before the
annuity date if all of these events simultaneously exists:

1. you have not paid any premiums for at least two years; and
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. This 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. The additional premium must be at
least the minimum amount specified in the Additional Premiums provision.

BASIS OF VALUES

Any paid up annuity cash surrender or death benefits that may be available are
at least equal to the minimum required by law in the state in which this policy
is delivered. A detailed statement of the method used to compute the minimum
values has been filed, where required, with the insurance officials of the
jurisdiction in which this policy is delivered.

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

We will usually pay any proceeds, partial withdrawals, or cash surrenders
within seven calendar day after:

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

However, we can postpone the payment of proceeds, amounts withdrawn, 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 Securities and Exchange Commission (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 their value not reasonably practicable.
4. the Fund is permitted by law or regulation to postpone payment of
proceeds.

Page 14
<PAGE> 16

If the cash surrender value payable at a surrender, partial withdrawal or in a
lump sum on the annuity date is not mailed or delivered within then working
days after we receive the documentation necessary to complete the transaction,
we will add interest from the date we receive the necessary documentation,
unless the amount of such interest is less than $25. The rate of interest we
will apply is the rate the company pays for dividends left on deposit in our
whole life insurance portfolio. We guarantee that the rate of interest will
never be less than 2.5%.

GENERAL PROVISIONS
- --------------------------------------------------------------------------------

CONTRACT

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

Only our President, Secretary or Actuary may modify this policy or waive any of
our rights or requirements.

Any change in this policy must be in writing. The change must bear the
signature or a reproduction of the signature of one or more of the above
officers.

INCONTESTABILITY

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

OWNER

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

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

If you die before the annuity date and before the last surviving annuitant,
ownership will pass:

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

Page 15

<PAGE> 17

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 you may name and change one or more beneficiaries
by giving us written notice. However, we will require written notice from any
irrevocable beneficiary 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 the last surviving annuitant dies, or if none has
been appointed, the proceeds will be paid to you. If no beneficiary is living
when you die, any 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 Home 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 the last surviving owner or the last surviving
annuitant are alive when we receive and file your written notice.

MISSTATEMENT OF AGE AND SEX

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

If we make an overpayment because of an error in age or sex, 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.

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

PERIODIC REPORTS

We will mail you a report showing the following items:

1. the number of units credited to this policy and the dollar value
of those units;
2. the policy value;
3. any premiums paid, withdrawals and charges made since the last
report; and
4. any 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.

Page 16

<PAGE> 18

ASSIGNMENT

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

An assignment of a nonqualified policy may result in tax consequences for you.

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.

POLICY DATE

Policy years, months and anniversaries are measured from the policy date shown
in the Policy Details.

EFFECTIVE DATE

The effective date is the date this policy goes into effect and your initial
premium is invested.

CURRENCY

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

PLACE OF PAYMENT

All amounts payable by us will be payable at our Home Office.

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 Internal Revenue 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 event of such modification, we may make appropriate endorsement to the
policy.

NON-PARTICIPATION

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

Page 17
<PAGE> 19

PAYMENT OPTIONS
- --------------------------------------------------------------------------------
The term "payee" means a person who is entitled to receive payment under this
section.

ELECTION OF PAYMENT OPTIONS

You may elect a payment option or revoke or change your election while any
annuitant is living and before the annuity date. If an election is not in
effect at the last surviving annuitant's death or if payment is to be made in a
lump sum under an existing payment option, the beneficiary may elect one of the
payment 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 a payment option and any revocation or change must be made in a
written notice. It must be filed with our Home Office with the written consent
of any irrevocable beneficiary.

A payment option may not be elected and we will pay the proceeds in a lump sum
if either of the following conditions exist:

1. the amount to be applied under the payment option is less than
$2,000; or
2. any periodic payment under the election would be less than $20.

PAYMENT OPTION 1: LIFE INCOME WITH PAYMENTS FOR 10 YEARS CERTAIN

We will pay the proceeds in equal amounts at the beginning of each month,
during the payee's lifetime with payments for at least 10 years certain.

The amount of each payment will be determined from the Table of Payment on
Basis of $1,000 Net Proceeds, using the payee's age and sex. 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.

PAYMENT DATES

The payment dates of the payment 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 satisfactory proof that the payee
is alive.

DEATH OF PAYEE

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

BETTERMENT OF INCOME

The annuity benefits provided at the time the policy value is applied under a
payment option will not be less than those that would be provided by the
application of any amount, defined below, to purchase any single premium
immediate annuity policy offered by us at the time to the same class of
annuitants. Such amount shall be the greater of the cash surrender value or
95% of what the cash surrender value would be if there were no surrender charge.

Page 18

<PAGE> 20

TABLE OF PAYMENTS ON BASIS OF $1,000 NET PROCEEDS

OPTION 1 - LIFE INCOME WITH PAYMENTS FOR 10 YEARS CERTAIN

MALE FEMALE MALE FEMALE
AGE MONTHLY MONTHLY AGE MONTHLY MONTHLY
<S> <C> <C> <C> <C> <C>
25 2.89 2.79 64 5.05 4.54
30 2.99 2.88 65 5.18 4.65
35 3.13 2.98 66 5.32 4.77
40 3.30 3.12 67 5.46 4.89
45 3.52 3.29 68 5.61 5.02
46 3.57 3.33 69 5.76 5.16
47 3.62 3.37 70 5.92 5.31
48 3.67 3.41 71 6.09 5.46
49 3.73 3.46 72 6.26 5.63
50 3.79 3.50 73 6.43 5.80
51 3.85 3.55 74 6.61 5.98
52 3.92 6.61 75 6.79 6.17
53 3.99 3.66 76 6.97 6.36
54 4.06 3.72 77 7.15 6.56
55 4.14 3.79 78 7.33 6.76
56 4.22 3.85 79 7.51 6.97
57 4.30 3.92 80 7.69 7.18
58 4.39 3.99 81 7.86 7.39
59 4.49 4.07 82 8.02 7.60
60 4.59 4.16 83 8.18 7.80
61 4.70 4.24 84 8.33 7.99
62 4.81 4.34 85 8.48 8.18
63 4.93 4.43
</TABLE>

The Table is based on the following assumptions: 1983a Projection G. YOP =
1995, Interest = 3%, 3% Load. The monthly payment for ages are shown in the
Table will be calculated on the same basis as these shown and will be quoted on
request.

Page 19

<PAGE> 21

CANADA LIFE INSURANCE COMPANY OF NEW YORK

HOME OFFICE: 500 MAMARONECK AVENUE, HARRISON, NY 10528

FLEXIBLE PREMIUM VARIABLE DEFERRED ANNUITY
Flexible premiums as stated in the Additional Premiums Provision.
Accumulation benefits and values are variable, except for amounts in the Fixed
Account.
After the Annuity Date payment options are on a guaranteed basis.
Death benefit payable upon death of the last surviving annuitant
before the Annuity Date .
Nonparticipating - Not eligible for dividends.

<PAGE> 1

Exhibit 4 (b)

Riders and Endorsements

<PAGE> 2
TAX SHELTERED ANNUITY RIDER

This Rider is part of the Policy. The policy is issued in connection with a
tax sheltered annuity plan described in Section 403(b) of the Internal Revenue
Code of 1986, as amended (the "Code"). The following provisions apply and
replace any contrary policy provisions. The owner is responsible for
determining that contributions and distributions under this policy comply with
the following provisions:

1. The annuitant shall be the sole owner.

2. The Policy may not be transferred, sold, assigned, discounted or
pledged either as collateral for a loan or as security for the
performance of an obligation or for any other purpose to any person
other than the Company.

3. The annuity commencement date (annuity date) is the date your entire
interest (value of the annuity) will be distributed or commence
to be distributed. The annuity date shall not be later than the
required beginning date, which is: a) April 1 of the calendar year
following the calendar year in which you attain age 70 1/2; or b) for a
government or church sponsored TSA plan, April 1 of the calendar year
following the later of the calendar year in which you retire or attain
age 70 1/2.

4. With respect to any amount which becomes payable under the policy
during your lifetime:

(a) such payment shall commence on or before the required beginning
date; and
(b) such payment shall be payable in substantially equal amounts,
not less frequently than annually.

The entire interest in the policy shall be distributed as follows:

(a) over your life; or
(b) over the lives of you and your designated beneficiary; or
(c) over a period certain not exceeding your life expectancy; or
(d) over the joint and last survivor life expectancy of you and
your designated beneficiary.

As the entire interest is to be distributed in other than one lump sum,
then the amount to be distributed each year (commencing with
the required beginning date and each year thereafter) shall be
determined in accordance with Code Section 403(b)(10) and the
regulations thereunder.

5. If you die after distribution of your interest has commenced, the
remaining portion of such interest will continue to be
distributed at least as rapidly as under the method of distribution
being used immediately before your death.

6. If you die before distribution has commenced, the entire interest shall
be distributed no later than December 31 of the calendar year
in which the fifth anniversary of your death occurs. However, proceeds
payable to a named beneficiary who is a natural person may be
distributed in substantially equal installments over the lifetime of
the beneficiary or a period certain not exceeding the life expectancy
of the beneficiary provided such distribution commences not later than
December 31 of the calendar year following the calendar year in which
your death occurred.

(a) If your surviving spouse is the beneficiary, the beneficiary
may elect to receive equal or substantially equal payments
over their life or life expectancy commencing at any date
prior to the date on which you would have attained age 70 1/2.
Such election shall be made by December 31 of the calendar
year in which the fifth anniversary of your death occurs.
Payments shall be calculated in accordance with Code Section
403(b)(10) and regulations thereunder. For the purposes of
the requirement, any amount paid to your child shall be
treated as if it had been paid to the surviving spouse if the
remainder of the interest becomes payable to the surviving
spouse when the child reaches the age of majority.
(b) If your surviving spouse is not the beneficiary, the method of
distribution selected will assure that: 1) at least 50%
of the present value of the amount available for distribution
is paid within your life expectancy; and 2) that such method of
distribution complies with the requirements of Code Section
403(b)(10) and the regulations thereunder.

<PAGE> 3
7. For purposes of the foregoing provisions, life expectancy and joint
and survivor life expectancy shall be determined by use of the expected
return multiples in Tables V and VI of Treasury Regulation Section
1.72-9 in accordance with Code Section 403(b)(10) and the regulations
thereunder.

For distributions under paragraph 4 of this rider, your life expectancy
or, if applicable, the joint and last survivor life expectancy
of you and your beneficiary, will be initially determined on the basis
of attained ages in the year you reach age 70 1/2.

For distributions under paragraph 6 of this rider, life expectancy
shall be initially determined on the basis of the beneficiary's
attained age in the year distributions are required to commence.
Unless you (or your spouse) elects otherwise prior to the date
distributions are required to commence, your life expectancy and, if
applicable, your spouse's life expectancy shall be recalculated
annually based on attained ages in the year for which the required
distribution is being determined. The life expectancy of a nonspouse
beneficiary shall not be recalculated.

For distributions other than in the form of life income or joint life
income, the annual distribution required to be made by the required
beginning date is for the calendar year in which you reached 70 1/2.
Annual payments for subsequent years, including the year in which the
required beginning date occurs, must be made by December 31 of the
year. The amount distributed for each year shall equal or exceed the
annuity value as of the close of business on December 31 of the
preceding year, divided by the applicable life expectancy or joint and
last survivor life expectancy.

8. Distributions shall not be made prior to the date you attain 59 1/2,
separate from service, die, become disabled, or incur a hardship
within the meaning of Code Section 403(b)(11), to the extent
such distributions are attributable to:

(a) contributions made pursuant to a salary reduction agreement
(except to the extent attributable to assets held as of
the close of the last year beginning before January 1, 1989);
or
(b) amounts transferred to this policy from a contract or account
that was subject to such conditions. In the event of hardship,
income attributable to such contributions or amounts shall not
be distributed.

9. Contributions made pursuant to a salary reduction agreement in
connection with the plan under which this policy is purchased may not
in any taxable year exceed the amount specified in Code Section
402(g)(4).

10. This policy shall be subject to and interpreted in conformity with the
provisions, terms and conditions of the TSA annuity plan document of
which this policy is a part, if any, and with the terms and conditions
of Section 403(b) of the Code, the regulations thereunder, and other
applicable law (including without limitation the Employee Retirement
Income Security Act of 1974, as amended, if applicable), as determined
by the plan administrator or other designated plan fiduciary or, if
none, you.

Canada Life is not a plan administrator or fiduciary, and is under no
obligation either to:

(a) determine whether any contribution, distribution or
transfer under the policy complies with the provisions, terms and
condition of such plan or with applicable law; or
(b) administer such plan, including, without limitation, any provisions
required by the Retirement Equity Act of 1984.

11. Notwithstanding any other provision to the contrary in the
policy or the TSA annuity plan, if any, Canada Life reserves the
right to amend or modify the policy or this rider, but only to the
extent necessary to comply with any law, regulation, ruling or other
requirement as instructed by the plan administrator, trustee or
fiduciary to establish or maintain the tax advantages, protection or
benefits available to such TSA policy under Code Section 403(b) or any
applicable law.

CANADA LIFE INSURANCE COMPANY OF NEW YORK

/s/ /s/
Secretary President

<PAGE> 4
CANADA LIFE INSURANCE COMPANY OF NEW YORK
HOME OFFICE: 500 MAMARONECK AVENUE, HARRISON, N.Y. 10528
PHONE: (914) 472-7070

QUALIFIED PLAN RIDER

This Rider is part of the Policy. The Policy is issued to or purchased by the
trustee of a pension or profit-sharing plan intended to qualify under section
401(a) of the Internal Revenue Code of 1986, as amended (the "Code"). The
following provisions apply and replace any contrary Policy provisions:

1. Except as allowed by the qualified pension or profit-sharing plan of
which this Policy is a part, the Policy may not be transferred,
sold, assigned, discounted or pledged, either as collateral for a loan
or as security for the performance of an obligation or for any other
purpose, to any person other than us.

2. The Policy shall be subject to the provisions, terms and conditions of
the qualified pension or profit-sharing plan of which the Policy is a
part. Any payment, distribution or transfer under the Policy shall
comply with the provisions, terms and conditions of such plan as
determined by the plan administrator, trustee or other designated plan
fiduciary. We shall be under no obligation either: a) to determine
whether any such payment, distribution or transfer is inconsistent
with the provisions, terms and conditions of such plan; or b) to
adminster such plan, including any provisions required by the
Retirement Equity Act of 1984.

3. Notwithstanding any provision to the contrary in the Policy or the
qualified pension or profitsharing plan of which the Policy is
a part, we reserve the right to amend or modify the Policy or Rider to
the extent necessary to comply with any law, regulation, ruling or
other requirement as instructed by the plan administrator, trustee, or
other designated plan fiduciary to establish or maintain the qualified
status of such pension or profit-sharing plan.

/s/ /s/
Secretary President

<PAGE> 5
CANADA LIFE INSURANCE COMPANY OF NEW YORK
HOME OFFICE: 2 OVERHILL ROAD, SCARSDALE, NEW YORK 10583
PHONE (914) 472-7070

INDIVIDUAL RETIREMENT ANNUITY RIDER

This Rider is part of the Policy. The Policy is intended to qualify as an
individual retirement annuity under Section 408(b) and may be purchased
pursuant to a simplified employee pension intended to qualify under Section
408(k) of the code. The following provisions apply and replace any contrary
Policy provisions:

1. You shall be the owner

2. The Policy is not transferable or assignable (other than pursuant to a
divorce decree) and is established for the exclusive benefit of you
and your beneficiaries.

3. Your entire interest in the Policy shall be nonforfeitable.

4. Premium payments shall be in cash and, except in the case of rollover
contributions described in Sections 402(a)(5), 402(a)(6)(F),
402(a)(7), 403(a)(4), 403(b)(8) and 408(d)(3) of the Code, shall not
exceed: a) $2,000 for any taxable year; or b) if a premium payment is
made by your employer to the Policy in accordance with the terms of a
simplified employee pension plan described in Section 408(d) of the
Code, $30,000 for any taxable year. You shall have the sole
responsibility for determining whether any premium payment qualifies as
a rollover or simplified employee pension contributions and whether it
is deductible for income tax purposes.

5. The Policy does not require fixed premium payments. We will accept
additional premium payments. The minimum additional premium payment
paid by pre-authorized check is $50.00. Any refund of premiums
(other than those attributable to excess contributions) will be applied
before the close of the calendar year following the year of the refund
toward the payment of additional premiums or the purchase of additional
benefits.

6. The Annuity Date is the date your entire Policy value will be
distributed or commence to be distributed to you. Your Annuity
Date shall be no later than April 1 of the calendar year following the
calendar year in which you attain age 70 1/2.

7. With respect to any amount which becomes payable under the Policy
during your lifetime, such payment shall commence on or before
the Annuity Date and shall be payable in substantially equal amounts,
no less frequently than annually. Payments shall be made in the manner
as follow:

(a) in a lump sum; or
(b) over your life; or
(c) over the lives of you and your designated beneficiary; or
(d) over a period certain not exceeding your life expectancy; or
(e) over a period certain not exceeding the joint and last survivor
expectancy of you and your designated beneficiary.

<PAGE> 6
If your entire interest is to be distributed in other than a lump sum,
then the amount to be distributed each year (commencing with the
calendar year following the calendar year in which you attain age 70
1/2 and each year thereafter) shall be determined in accordance with
Code Section 408(b)(3) and the regulations thereunder.

8. If you die after distribution of your interest has commenced, the
remaining portion of such interest will continue to be distributed at
least as rapidly as under the method of distribution being used prior
to your death.

If you die before distribution has begun, the entire interest must be
distributed no later than December 31 of the calendar year in
which the fifth anniversary of your death occurs. However, proceeds
which are payable to a named beneficiary who is a natural person may be
distributed in substantially equal installments over the lifetime of
the beneficiary or a period certain not exceeding the life expectancy
of the beneficiary provided such distributions begin not later than
December 31 of the calendar year following the calendar year in which
your death occurred. If the beneficiary is your surviving spouse, the
beneficiary may elect not later than December 31 of the calendar year
in which the fifth anniversary of your death occurs to receive equal or
substantially equal payments over the life or life expectancy of the
surviving spouse commencing at any date prior to the date on which you
would have attained age 70 1/2. Payments will be calculated in
accordance with Code Section 408(b)(3) and the regulations thereunder.

For the purposes of this requirement, any amount paid to any of your
children will be treated as if it had been paid to your surviving
spouse if the remainder of the interest becomes payable to the
surviving spouse when the child reaches the age of majority.

If you die before your entire interest has been distributed, no
additional cash premiums or rollover contributions will be accepted
under the Policy after your death unless the beneficiary is your
surviving spouse.

9. If your spouse is not the named beneficiary, the method of distribution
selected will assure that at least 50% of the present value of the
amount available for distribution is paid within your life expectancy
and that such method of distribution complies with the requirements of
Code Section 408(b)(3) and the regulations thereunder.

10. For purposes of the foregoing provisions, life expectancy and joint and
last survivor expectancy shall be determined by use of the expected
return multiplies in Tables V and VI of Treasury Regulation Section
1.72-9 in accordance with Code Section 408(b)(3) and the regulations
thereunder. In the case of distributions under paragraph 7 of this
Rider, your life expectancy or, if applicable, the joint and last
survivor expectancy of you and your beneficiary will be initially
determined on the basis of your attained ages in the year you reach age
70 1/2. In the case of a distribution under paragraph (8) of this
Rider, life expectancy will be initially determined on the basis of
your beneficiary's attained age in the year distributions are required
to commence. Unless you (or your spouse) elect otherwise prior to the
date distributions are required to commence, your life expectancy and,
if applicable, your spouse's life expectancy will be recalculated
annually based on your attained ages in the year for which the required
distribution is being determined. The life expectancy of a nonspouse
beneficiary will not be recalculated.

In the case of a distribution other than as life income or joint life
income, the annual distribution required to be made by your Annuity
Date is for the calendar year in which you reached age 70 1/2. Annual
payments for subsequent years, including the year in which your
Annuity Date occurs, must be made by December 31 of that year. The
amount distributed for each year shall

<PAGE> 7
equal or exceed the annuity value as of the close of business on
December 31 of the preceeding year, divided by the applicable life
expectancy or joint and last survivor expectancy.

11. Under the Policy, you may not elect any variable account or sub-account
that directly or indirectly invests in collectibles within the
meaning of Section 408(m) of the Code. No part of the Policy value
shall be invested in or used to provide life insurance.

12. We reserve the right to amend the Policy or this Rider to the extent
necessary to qualify as an individual retirement annuity for federal
income tax purposes.

/s/ /s/
Secretary President

<PAGE> 1

Exhibit 5

Form of Application

<PAGE> 2

<TABLE>

<S> <C>
CANADA LIFE APPLICATION FOR
INSURANCE COMPANY OF AMERICA FLEXIBLE PREMIUM VARIABLE DEFERRED ANNUITY
500 Mamaroneck Avenue
Harrison, New York 10528
(800)905-1959

PLEASE PRINT IN BLACK INK
1. Owners (Applicants) 2. Annuitants (if different from Owner)

Name(*) ______________________________________________________ Name(*) __________________________________________________________
First Middle Last First Middle Last

Address ______________________________________________________ Address __________________________________________________________
Street Street

______________________________________________________________ __________________________________________________________________
City State Zip City State Zip

Sex [ ] M [ ] F Date of Birth /______/______/______/ Sex [ ] M [ ] F Date of Birth /______/______/______/
[ ] Other Month Day Year Month Day Year

Daytime Phone Number ( ) ___________________________________ [ ][ ][ ][ ][ ][ ][ ][ ][ ]
Social Security Number
[ ][ ][ ][ ][ ][ ][ ][ ][ ] or [ ][ ][ ][ ][ ][ ][ ][ ][ ]
Social Security Number Tax ID Number

Client Brokerage Acct.# (If applicable) ______________________
============================================================== ===================================================================
JOINT OWNER (Optional) CO-ANNUITANT (Optional)

Name(*) ______________________________________________________ Name(*) __________________________________________________________
First Middle Last First Middle Last

Sex [ ] M [ ] F Date of Birth /______/______/______/ Sex [ ] M [ ] F Date of Birth /______/______/______/
[ ] Other Month Day Year Month Day Year

[ ][ ][ ][ ][ ][ ][ ][ ][ ] or [ ][ ][ ][ ][ ][ ][ ][ ][ ] [ ][ ][ ][ ][ ][ ][ ][ ][ ]
Social Security Number Tax ID Number Social Security Number

3. Beneficiaries 4. My Investment
Enclose signed letter if more information is required.

Name(*) ______________________________________________________ Allocate payment with application of $________________ as indicated
First Middle Last Relationship below (MUST TOTAL 100%):

Percentage /_________________/ [ ][ ][ ][ ][ ][ ][ ][ ][ ] [ ] Check here if you are using _____% Cash Management (21)
Social Security Number Seligman(SM) Time Horizon(SM) _____% Income (22)
Asset Allocation Strategy. If so, _____% Fixed Income Secur. (23)
Name(*) ______________________________________________________ LEAVE INVESTMENT _____% Common Stock (24)
First Middle Last Relationship ALLOCATION BLANK IN _____% Capital (25)
THIS SECTION AND ATTACH _____% Global (26)
Percentage /_________________/ [ ][ ][ ][ ][ ][ ][ ][ ][ ] TIME HORIZON(SM) _____% Communic. & Inform. (27)
Social Security Number ELECTION FORM. _____% Global Growth Oppor.(28)
============================================================== _____% Global Smaller Cos. (29)
CONTINGENT BENEFICIARY _____% Frontier (41)
_____% High Yield Bond (42)
Name(*) ______________________________________________________ _____% Global Technology (43)
First Middle Last Relationship _____% Fixed Account (F2)
Percentage /_________________/ [ ][ ][ ][ ][ ][ ][ ][ ][ ]
Social Security Number

5. Type of Plan (Must be Completed) 6. Pre-Authorized Check (PAC)(**)

[ ] Non-Qualified or [ ] Please check here if you elect this option.
[ ] IRA Rollover [ ] 401(k) [ ] IRA Tax Year ______
[ ] Qualified Other [ ] Keogh (HR-10) [ ] SEP IRA Tax Year __ I authorize the Company to collect $____________ (MINIMUM $100/$50-
[ ] IRA Transfer [ ] 457 [ ] 403(b) If ERISA [ ] IRA) starting on _____ by initiating electronic debit entries to my
[ ] Other account.

7. Replacement Select One: [ ] Checking [ ] Savings

Will this Annuity replace or change any other insurance or (PLEASE ATTACH A VOIDED CHECK FOR CHECKING OR DEPOSIT SLIP FOR
annuity? SAVINGS)
[ ] No [ ] Yes (State company and Polity number in "Remarks"
and attach replacement forms.) 8. For Agents Only

(*) Unless subsequently changed in accordance with terms of Questions? Contact either your broker/dealer or Investment Products
Policy issued. at (800) 905-1959, ext. 505.
(**) Unless indicated, will commence on the earliest possible
business day.
V1044-2/96 NY
</TABLE>

<PAGE> 3
9. Service Options
BY INITIALING THE BOX(ES) IN THIS SECTION, I/WE HEREBY AUTHORIZE THE COMPANY TO
INITIATE THE OPTIONS(S) INDICATED. I/WE UNDERSTAND AND AGREE ANY AUTHORIZATION
AS FOLLOWS: 1) ONLY APPLIES TO THE POLICY APPLIED FOR AND SEPARATE
AUTHORIZATION MUST BE COMPLETED FOR ANY OTHER POLICIES. 2) WILL CONTINUE IN
EFFECT UNTIL THE COMPANY RECEIVES WRITTEN REVOCATION FROM ME/US OR THE COMPANY
DISCONTINUES THE OPTIONS(S).

I/WE WILL CONSULT THE CURRENT PROSPECTUS FOR MORE DETAILS ON THE SERVICE
OPTIONS BELOW, SUCH AS THE MINIMUMS AND MAXIMUM.

<TABLE>
<S> <C>
====================================================== ====================================================================
[ ] DOLLAR COST AVERAGING ** [ ] SYSTEMATIC WITHDRAWAL PRIVILEGE (SWP) **

I/We hereby authorize the Company to automatically I/We hereby authorize the Company to initiate withdrawals from my
transfer, on a periodic basis, amounts for regular Policy as indicated below.
level investments over time, from one sub-account or
Fixed Account shown on this form, to any of the other Withdraw $_________or [ ] Maximum amount allowed without incurring
sub-accounts or Fixed Account specified on this form. a Surrender Charge, to Start on________________.
Stop Date:______________or Number of Withdrawals_______________.
NOTE: TRANSFERS ORIGINATING FROM THE FIXED ACCOUNT Withdraw From:
REQUIRE A MINIMUM DISTRIBUTION OF 18 MONTHS AND NO __________ __________ ___________
OTHER SURRENDERS OR TRANSFERS FROM THE FIXED ACCOUNT __________ __________ ___________
WILL BE PERMITTED DURING THIS TIME. __________ __________ ___________
__________ __________ ___________
Transfer $_________From___________. Start Date________ Frequency of Withdrawal: [ ] Monthly [ ] Quarterly [ ] Semi-Annually
Stop Date_________ or Number of Transfers_________on a Please [ ] Withhold [ ] Do Not Withhold Federal Income Taxes.
[ ] Monthly [ ] Quarterly [ ] Semi-Annual
[ ] Annual basis.

Transfer above __________ __________ ___________ 10. Remarks
amount to: __________ __________ ___________ ___________________________________________________
__________ __________ ___________
__________ __________ ___________ ___________________________________________________
======================================================
[ ] PORTFOLIO REBALANCING ** ___________________________________________________

I/We hereby authorize the Company to provide portfolio ___________________________________________________
rebalancing services as indicated below:

Frequency of Rebalancing: [ ] Quarterly
[ ] Semi-Annually [ ] Annually

11. Signatures
STATEMENT OF APPLICANT: To the best of the knowledge and belief of the person(s) signing below, all statements in this
Application are true and correctly worded. Each person signing below adopts all statements made in this Application and
agrees to be bound by them. IT IS AGREED THAT THE POLICY WILL NOT TAKE EFFECT UNTIL THE LATER OF: 1) THE POLICY IS ISSUED;
OR 2) WE RECEIVE AT OUR ADMINISTRATIVE OFFICE THE FIRST PREMIUM REQUIRED UNDER THE POLICY. No agent or registered
representative can modify this agreement or waive any of the Company's rights or requirements. I/WE ACKNOWLEDGE RECEIPT OF
THE EFFECTIVE PROSPECTUS(ES) FOR THE POLICY. (3) I/WE CERTIFY THAT THE NUMBER SHOWN ON THIS FORM IS MY/OUR SOCIAL SECURITY
# OR TAXPAYER ID #. 4) THE POLICY I/WE HAVE APPLIED FOR IS SUITABLE FOR MY/OUR INSURANCE INVESTMENT OBJECTIVES, FINANCIAL
SITUATION, AND NEEDS AND I/WE ANTICIPATE MAKING ADDITIONAL PREMIUM DEPOSITS.

I/WE UNDERSTAND THAT ALL ACCUMULATION BENEFITS AND VALUES PROVIDED BY THE VARIABLE ACCOUNT MAY INCREASE OR DECREASE DAILY
DEPENDING ON INVESTMENT PERFORMANCE, AND ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNTS.

[ ] I/We request the Statement of Additional Information.

_____________________________________________________________________________________________________________________________
Signed in (State) Date Signed Signature of Owner/Applicant Signature of Joint Owner

_____________________________________________________________________________________________________________________________
Signature of Annuitant Signature of Co-Annuitant Signature of Irrevocable Beneficiary
(if different from Owner) (if different from Owner) (if designated)

STATEMENT OF AGENT: I certify that 1) the applicant signed this Application; 2) I am authorized and qualified to discuss
the Policy herein applied for; and 3) to the best of my knowledge replacement [ ] is [ ] is not involved.

_____________________________________________________________________________________________________________________________
Print Registered Representative/Agent Name Name of Firm Date Signed

_____________________________________________________________________________________________________________________________
Signature of Agent Branch Address

_____________________________________________________________________________________________________________________________
Agent Number State License ID Number Agent Phone Number

</TABLE>

** Unless indicated, will commence on the earliest possible business day.

V1044-2/96 NY

<PAGE> 1

Exhibit 10 (a)

Form of Consent of Counsel

<PAGE> 2

April 26, 1996

Board of Directors
Canada Life Insurance Company of New York
Canada Life of New York Variable Annuity Account 2
500 Mamaroneck Avenue
Harrison, New York 10528

Gentlemen:

I hereby consent to the use of my name under the caption "Legal Matters" in the
Statement of Additional Information contained in the Post Effective Amendment
No. 4 to the Registration Statement on Form N-4 (File No. 33-64240) filed by
Canada Life Insurance Company of New York and Canada Life of New York Variable
Annuity Account 2 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
Secretary and
Chief Counsel, U.S. Division

DAH/dr

<PAGE> 1

Exhibit 10 (b)

Consent of Independent Counsel

<PAGE> 2
[TRANSMITTED ON SA&B LETTERHEAD]

April 22, 1996

VIA EDGARLINK

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

Ladies and Gentlemen:

We hereby consent to the reference to our name under the caption "Legal
Matters" in the Statement of Additional Information filed as part of
Post-Effective Amendment No. 4 to the registration statement on Form N-4 for
the Canada Life of America Variable Annuity Account 2 (File No. 33-64240). In
giving this consent, we do not admit that we are in the category of persons
whose consent is required under Section 7 of the Securities Act of 1933.

Very truly yours

SUTHERLAND, ASBILL & BRENNAN

By: /s/ Stephen E. Roth
------------------------------
Stephen E. Roth

<PAGE> 1
EXHIBIT 10(c)

CONSENT OF
INDEPENDENT CHARTERED ACCOUNTANTS

We consent to the reference to our Firm under the captions "Financial
Statements" and "Experts" and to the use of our report dated February 9, 1996
with respect to the financial statements of the Canada Life Company of New York
included in the Registration Statement [Form N-4, No. 33-64240] and related
Prospectus of Canada Life of New York Variable Annuity Account 2 [May 1, 1996].

/s/ Ernst & Young LLP
Toronto, Canada, Chartered Accountants
April 26, 1996