SAFECO SEPARATE ACCOUNT C, POS AMI, 1995-06-16

SAFECO SEPARATE ACCOUNT C
POS AMI, 1995-06-16

Previous: FIRST TRUST SPECIAL SITUATIONS TRUST SERIES 77, 24F-2NT, 1995-06-16

Next: FIRST TRUST COMBINED SERIES 218, 24F-2NT, 1995-06-16

<PAGE> 1

File Nos. 33-60331/811-8052

As filed with the Securities and Exchange Commission on June 16, 1995

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/

Pre-Effective Amendment No. _____ / /

Post-Effective Amendment No. _____ / /

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 / /

Amendment No. 5 /X/

SAFECO SEPARATE ACCOUNT C
--------------------------
(Exact Name of Registrant)

SAFECO LIFE INSURANCE COMPANY
-----------------------------
(Name of Depositor)

15411 N.E. 51st Street
Redmond, Washington 98052
----------------------------------------------------
(Address of Depositor's Principal Executive Offices)

Registrant's Telephone Number, including Area Code 1-800-426-7649

William E. Crawford, Esq.
SAFECO Life Insurance Company
P.O. Box 34690
Seattle, Washington 98124-1690
---------------------------------------
(Name and Address of Agent for Service)

Copies To:

Joan E. Boros, Esq.
Katten Muchin & Zavis
1025 Thomas Jefferson Street, N.W.
Suite 700
Washington, D.C. 20007

(i)
<PAGE> 2

Registrant has registered an indefinite number or amount of securities under
the Securities Act of 1933. Its Rule 24f-2 Notice for the fiscal year ended
December 31, 1994 was filed on or about March 28, 1995.

______________________________________

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

(ii)
<PAGE> 3

Cross Reference Sheet Showing Location in Prospectus of
Items Called for by Form N-4

<TABLE>
<CAPTION>
Form N-4 Item No. Caption in Prospectus
- ----------------- ---------------------
<S> <C>
1............................................... Cover Page

2............................................... "Definitions"

3............................................... "Summary of Contract Expenses";
"Summary"

4............................................... Not Applicable

5............................................... "The Insurance Company"; "SAFECO
Separate Account C"; "Sub-Accounts of
the Separate Account and the Available Funds";
"Investment Objectives of the Available Funds";
and "Voting Privileges"

6............................................... "Deductions under the Contracts"

7............................................... "Contract Benefits"; "Transfers between
Sub-Accounts"; and "Other Services"

8............................................... "The Annuity Period"

9............................................... "Payment on or after Death of Owner"

10.............................................. "Certain Minimum Amounts"; "The
Accumulation Period"

11.............................................. "Redemptions"

12.............................................. "Federal Tax Status"

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

14.............................................. "Table of Contents
Statement of Additional Information"
</TABLE>

(iii)
<PAGE> 4

<TABLE>
<CAPTION>
Form N-4 Item No. Caption in Statement of Additional
- ----------------- ----------------------------------
Information
-----------
<S> <C>
15.............................................. Cover Page

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

17............................................... "General Information"

18............................................... Not Applicable

19............................................... "Distribution of the Contracts"

20.............................................. "Distribution of the Contracts"

21.............................................. "Standardized Computation of Performance"

22.............................................. "Determination of Annuity Payments"

23.............................................. "Financial Statements"
</TABLE>

Part C - Information required in Part C is set forth under each
appropriate item, as numbered, in Part C to this Registration
Statement.

(iv)
<PAGE> 5

MAINSAIL

SAFECO
SEPARATE
ACCOUNT C

Individual
Variable Annuity
Contracts

i
<PAGE> 6

SAFECO

Prospectus

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
<S> <C>
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SUMMARY OF CONTRACT EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
THE INSURANCE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SAFECO SEPARATE ACCOUNT C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SUB-ACCOUNTS OF THE SEPARATE ACCOUNT
AND THE AVAILABLE FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
INVESTMENT OBJECTIVES OF THE
AVAILABLE FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The SAFECO Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Other Available Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DEDUCTIONS UNDER THE CONTRACTS
Contingent Deferred Sales Charge . . . . . . . . . . . . . . . . . . . . . . . . .
Premium Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>

ii
<PAGE> 7

<TABLE>
<S> <C>
Contract Administration Charges . . . . . . . . . . . . . . . . . . . . . . . . . .
Deduction for Assuming Mortality and Expense Risks . . . . . . . . . . . . . . . .
Available Fund Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TRANSFERS BETWEEN SUB-ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . .
REDEMPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
OTHER SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dollar Cost Averaging Program . . . . . . . . . . . . . . . . . . . . . . . . . . .
Automatic Transfer Program . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Appreciation or Interest Sweep . . . . . . . . . . . . . . . . . . . . . . . . . .
Sub-Account Rebalancing Program . . . . . . . . . . . . . . . . . . . . . . . . . .
Systematic Investment Program . . . . . . . . . . . . . . . . . . . . . . . . . . .
Periodic Withdrawal Program . . . . . . . . . . . . . . . . . . . . . . . . . . . .
FIXED ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed Account Contract Value . . . . . . . . . . . . . . . . . . . . . . . . . . .
Annual Administration Maintenance Charge . . . . . . . . . . . . . . . . . . . . .
Fixed Account Transfers and Partial Withdrawals . . . . . . . . . . . . . . . . . .
CONTRACT BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CERTAIN MINIMUM AMOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>

iii
<PAGE> 8

<TABLE>
<S> <C>
THE ACCUMULATION PERIOD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Contract Value and Accumulation Units . . . . . . . . . . . . . . . . . . . . .
Accumulation Unit Values . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation Date and Valuation Period . . . . . . . . . . . . . . . . . . . . . . . .
Net Investment Factor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Example of Calculation of Accumulation Unit Value . . . . . . . . . . . . . . . . .
THE ANNUITY PERIOD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Annuity Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payment Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SETTLEMENT OPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Annuity Purchase Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Annuity Unit Values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Number of Annuity Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Time of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amount of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PAYMENT ON OR AFTER DEATH OF OWNER . . . . . . . . . . . . . . . . . . . . . . . . .
THE DISTRIBUTION OF THE CONTRACTS . . . . . . . . . . . . . . . . . . . . . . . . . .
VOTING PRIVILEGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
FEDERAL TAX STATUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Federal Tax Status of the Separate Account . . . . . . . . . . . . . . . . . . . .
Federal Tax Status of Qualified Contracts . . . . . . . . . . . . . . . . . . . . .
Federal Tax Status of Non-Qualified Contracts . . . . . . . . . . . . . . . . . . .
</TABLE>

iv
<PAGE> 9

<TABLE>
<S> <C>
Federal Tax Penalties and Withholding . . . . . . . . . . . . . . . . . . . . . . .
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SPECIAL CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restrictions Upon Transfer of Ownership and Assignment . . . . . . . . . . . . . .
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
STATE REGULATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TABLE OF CONTENTS - STATEMENT OF ADDITIONAL INFORMATION . . . . . . . . . . . . . . .
</TABLE>

v
<PAGE> 10

Prospectus __________, 1995

SAFECO SEPARATE ACCOUNT C

Individual Variable Annuity Contracts

sold by
SAFECO Life Insurance Company
15411 N.E. 51st Street
Redmond, Washington 98052
Telephone 1-800-426-7649

This Prospectus offers individual Variable Annuity contracts that are designed
(i) to fund benefits under individual retirement accounts and annuities
qualified for special tax treatment under Section 408 of the Internal Revenue
Code of 1986 and (ii) for sale to individuals where no special tax treatment is
available (the "Contract(s)"). The Contracts are offered on a flexible payment
basis.

Under the Contracts, annuity payments may commence on a preselected future date
(presumably at retirement) under one of the annuity options provided in the
Contracts. Prior to the time annuity payments begin, the Contracts are
partially or totally redeemable based on their current value and subject to
applicable Contingent Deferred Sales Charges.

SAFECO Life Insurance Company ("SAFECO") provides for variable accumulations
and variable benefits under the Contracts by crediting net Purchase Payments to
one or more Sub-Accounts ("Sub-Accounts") within SAFECO Separate Account C
("Separate Account") as directed by the owner of the Contract ("Owner"). Net
Purchase Payments to Contracts may be invested in any combination of the 12
Sub-Accounts available under the Contracts or in the Fixed Account. The
Sub-Accounts invest in corresponding investment portfolios of separate mutual
funds ("Available Funds"). Five of the Available Funds currently are
investment portfolios of the SAFECO Resource Series Trust: Bond Portfolio;
Equity Portfolio; Growth Portfolio; Money Market Portfolio; and Northwest
Portfolio (each a "SAFECO Fund"). The Other Available Funds currently are:
Insurance Management Series: Corporate Bond Fund ("Federated Corporate Bond
Fund"); and Utility Fund ("Federated Utility Fund"); Lexington Emerging Markets
Fund, Inc. ("Lexington Emerging Markets Fund"); Lexington Natural Resources
Trust ("Lexington Natural Resources Fund"); TCI Portfolios, Inc.: TCI Balanced
Fund ("TCI Balanced Fund"); and TCI International Fund ("TCI International
Fund"); and Wanger Advisors Trust: U.S. Small Cap Advisor ("Wanger U.S. Small
Cap Fund").

1
<PAGE> 11

Generally, within ten (10) days after the Contract is received, an Owner may
cancel it by returning it to the Home Office or the representative that sold
it. Free look provisions may vary based on the state of issue. The state of
issue is based on the address of the Payor.

A prospectus for each of the Available Funds may be obtained from SAFECO, P.O.
Box 349690, Seattle, Washington 98124-1690. An investor should read those
prospectuses carefully before buying a Contract described in this Prospectus or
investing in any Sub-Account.

This Prospectus sets forth concisely the information about the Contracts and
the Separate Account that a prospective investor should know before investing
and should be retained for future reference. Additional information about the
Contracts and the Separate Account is contained in a Statement of Additional
Information dated ______________, 1995 which is incorporated herein by
reference. The Statement of Additional Information is available upon written
or oral request and without charge from SAFECO, P.O. Box 34690, Seattle,
Washington 98124-1690, Telephone Number (800) 426-7649. The table of contents
for the Statement of Additional Information is shown on page __ of this
Prospectus.

_________________________________

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

THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY THE CURRENT PROSPECTUS OF
EACH OF THE FOLLOWING MUTUAL FUNDS: SAFECO Bond Fund; SAFECO Equity Fund;
SAFECO Growth Fund; SAFECO Money Market Fund; SAFECO Northwest Fund; Federated
Corporate Bond Fund; Federated Utility Fund; Lexington Emerging Markets Fund,
Inc.; Lexington Natural Resources Trust; TCI Balanced Fund; TCI International
Fund; and Wanger U.S. Small Cap Fund.

1(a)
<PAGE> 12

DEFINITIONS

Some of the technical expressions and names frequently used in this Prospectus
are defined below for ready reference:

1. ACCUMULATION UNIT - the measure used to calculate the value of a
Sub-Account prior to the Annuity Date.

2. ANNUITANT - the natural person upon whose life annuity payments are
payable in accordance with the Contract.

3. ANNUITY - any series of payments starting on the Annuity Date,
payable in accordance with the Contract, under the Settlement Options.

4. ANNUITY DATE - the date selected by the Owner for commencing annuity
payments under the Contract. The day of the month on which the
payments are made will be determined by SAFECO. The Annuity Date
cannot be later than the date the Annuitant attains age 90.

5. ANNUITY UNIT - the measure used to calculate annuity payments after
the Annuity Date.

6. AVAILABLE FUNDS - the SAFECO Funds and the Other Available Funds under
the Contract.

7. BENEFICIARY (or Beneficiaries) - the person (or persons) entitled to
receive benefits under the Contract upon the death of the Owner.

8. CODE - the Internal Revenue Code of 1986, as amended.

9. CONTRACT - the Individual Variable Annuity Contract by and between
SAFECO and the Owner.

10. CONTRACT ANNIVERSARY - any anniversary of the Contract Date.

11. CONTRACT DATE - the earlier of the date on which the initial Net
Purchase Payment is allocated to the Separate Account or the initial
Net Purchase Payment is allocated to the Fixed Account.

12. CONTRACT VALUE - the sum of the Owner's interest in the Sub-Accounts
and the Fixed Account, including all Purchase Payments made,
investment experience, and less

2
<PAGE> 13

any previous withdrawals, and related Contingent Deferred Sales
Charges, and less all other applicable charges or fees.

13. CONTRACT YEAR - the twelve month period which commences on the
Contract Date and each succeeding twelve month period thereafter.

14. ELIGIBLE INVESTMENTS - an investment entity under the Contract,
including the Fixed Account pursuant to any Fixed Account Annuity
Rider to the Contract.

15. FIXED ANNUITY - an annuity with payments which do not vary in
accordance with the net investment results of the Separate Account.

16. FIXED ACCOUNT - Contract Value allocated to SAFECO's General Account
under the Contract.

17. FUND SHARE - a share of the capital stock or a share of beneficial
interest in any of the Available Funds.

18. GENERAL ACCOUNT - the General Account of SAFECO in which are held all
the assets other than those held in the Separate Account or in any
other separate account established or maintained by SAFECO.

19. HOME OFFICE - the principal office of SAFECO at 15411 N.E. 51st
Street, Redmond, Washington.

20. NET INVESTMENT FACTOR - a factor which reflects the net investment
experience of each Sub-Account less certain charges for the mortality
and expense risk expenses, administrative charges and taxes, if
applicable, during a Valuation Period.

21. NET PURCHASE PAYMENT - Purchase Payment less any premium taxes.

22. 1940 ACT - the Investment Company Act of 1940, as amended.

23. NON-QUALIFIED CONTRACT - a Contract which does not receive favorable
tax treatment under Sections 401, 403, and 408 of the Code.

24. OTHER AVAILABLE FUNDS - the underlying mutual funds or portfolios that
are available under a Contract, in addition to the SAFECO Funds:
Federated Corporate Bond Fund; Federated Utility Fund; Lexington
Emerging Markets Fund; Lexington Natural Resources Fund; TCI Balanced
Fund; TCI International Fund; and Wanger U.S. Small Cap Fund.

25. OWNER - the person(s) (or entity) named in the Application for the
Contract who has all rights under the Contract. Joint Owners are
allowed only if the joint Owners are

3
<PAGE> 14

spouses. Each joint Owner shall have equal ownership rights and must
jointly exercise those rights.

26. PAYOR - the person(s) (or entity) that makes the initial Purchase
Payment and any subsequent payments under the Contract.

27. PROGRAM(S) - certain investment related services offered by SAFECO
under the Contract to allow for (a) automatic transfers of Contract
Value among Sub-Accounts and the Fixed Account, and/or (b) automatic
investment in the Separate Account, and/or (c) automatic periodic
withdrawals of Contract Value.

28. PURCHASE PAYMENTS - payments made to purchase Accumulation Units or
allocated to the Fixed Account.

29. QUALIFIED CONTRACT - a Variable Annuity Contract that has been issued
to fund benefits under an Individual Retirement Account or Annuity
qualifying, or intended to qualify, for tax deferment under Section
408 of the Code.

30. SAFECO FUNDS - the five separate portfolios of the SAFECO Resource
Series Trust which are available under a Contract: Bond Fund, Equity
Fund, Growth Fund, Money Market Fund, and Northwest Fund.

31. SEPARATE ACCOUNT - the separate investment account designated as
SAFECO Separate Account C.

32. SUB-ACCOUNT(S) - a sub-account of the Separate Account investing in
shares of one of the Available Funds.

33. VALUATION DATE - each day the New York Stock Exchange is open for
business, as well as each day otherwise required.

34. VALUATION PERIOD - the period commencing at the close of business for
the Separate Account which is usually 4:00 p.m. (EST) on each
Valuation Date and ending at the close of business for the next
succeeding Valuation Date.

35. VARIABLE ANNUITY - an annuity with payments varying in accordance with
the net investment results of the Separate Account.

4
<PAGE> 15

SUMMARY OF CONTRACT EXPENSES

OWNER TRANSACTION EXPENSES

<TABLE>
<S> <C>
Sales Charge Imposed on Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . None
Contingent Deferred Sales Charge* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.00%
(as a percentage of the amount withdrawn at the time of
surrender or partial surrender)
Surrender Fees** . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $25
Transfer Fee*** . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10
</TABLE>

* The Contingent Deferred Sales Charge declines over time and is 0% beginning
in the seventh Contract Year. (See "Contingent Deferred Sales Charge" on
page ___.) In each Contract Year, an Owner generally may withdraw up to 10%
of the Contract Value without payment of the Contingent Deferred Sales
Charge.

** A maximum charge of $25 is assessed for each withdrawal (surrender) after
the first taken in any Contract Year, except under the Periodic Withdrawal
Program where the charge is $25 per year if withdrawals are in excess of one
per year. (See "Deductions under the Contracts" on page ___ and "Periodic
Withdrawal Program" on page ___.)

*** A charge of $10 per transfer between Sub-Accounts of the Separate Account
or the Fixed Account may be charged for transfers in excess of twelve (12)
transfers, which may be made each Contract Year without charge. (See
"Transfers Between Sub-Accounts" on page ___.)

<TABLE>
<S> <C>
ANNUAL ADMINISTRATION MAINTENANCE CHARGE**** . . . . . . . . . . . . . . . . . . . . . . . . $30
</TABLE>

**** The Annual Administration Maintenance Charge is assessed only if the
Contract Value is less than $100,000. (See "Annual Administration Maintenance
Charge" on page ___.)

<TABLE>
<S> <C>
SEPARATE ACCOUNT ANNUAL EXPENSES
(as a percentage of average daily net asset value)
Mortality and Expense Risk Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.25%
Asset Related Administration Charge . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.15%
Account Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . None
Total Separate Account Annual Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 1.40%
</TABLE>

5
<PAGE> 16

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

<TABLE>
<CAPTION>
SAFECO Bond SAFECO Equity SAFECO Growth SAFECO Money
Fund Fund Fund Market Fund
<S> <C> <C> <C> <C>
Management Fees....... 74% .74% .74% .65%
Other Expenses........ 0 .04% .16% 0
Total Fund
Annual Expenses*...... .74% .78% .90% .65%

SAFECO Northwest Federated Corporate Federated Utility Lexington Emerging
Fund Bond Fund Fund Markets Fund

Management Fees...... .74% .60% .75% .85%
Other Expenses....... 0 .15% .15% .45%
Total Fund
Annual Expenses* .... .74% .75% .90% 1.30%

Lexington Natural TCI Balanced Fund TCI International Wanger U.S. Small Cap
Resources Trust Fund Fund

Management Fees...... 1.00% 1.00% 1.50% .98%
Other Expenses....... .45% 0 0 .17%
Total Fund
Annual Expenses*..... 1.55% 1.55% 1.50% 1.15%
</TABLE>

*From time to time, the Available Funds' investment advisers in their sole
discretion may waive all or part of their fees and/or voluntarily assume
certain Available Fund expenses. For a more complete description of the
Available Funds' fees and expenses, see the Available Funds' prospectuses.
[Table to be updated based on current waiver practices of underlying funds,
including appropriate disclosure as to expenses absent such waiver.]

6
<PAGE> 17

EXAMPLES:

If the Contract is surrendered, the following expenses on a
$1,000 investment, assuming 5% annual return on assets, would
be incurred:

<TABLE>
<CAPTION>
SAFECO Bond SAFECO Equity SAFECO Growth SAFECO Money Market
Sub-Account Sub-Account Sub-Account Sub-Account
<S> <C> <C> <C> <C>
1 year . . $94 $94 $95 $93
3 years . . $138 $139 $142 $135
5 years . . $183 $185 $191 $179

SAFECO Northwest High Yield Utility Sub-Account Emerging Markets
Sub-Account Sub-Account Sub-Account
1 year . . $94 $94 $95 $99
3 years . . $138 $138 $142 $154
5 years . . $183 $184 $191 $209

Natural Resources Balanced Sub-Account International U.S. Small Cap
Sub-Account Sub-Account Sub-Account

1 year . . $101 $96 $101 $98
3 years . . $161 $145 $159 $149
5 years . . $221 $195 $219 $202

If the Contract is not annuitized or surrendered, the following expenses on a $1,000
investment, assuming 5% annual return on assets, would be incurred:

SAFECO Bond SAFECO Equity SAFECO Growth SAFECO Money Market
Sub-Account Sub-Account Sub-Account Sub-Account

1 year . . $29 $30 $31 $29
3 years . . $90 $91 $95 $87
5 years . . $153 $155 $161 $149
</TABLE>

7
<PAGE> 18

<TABLE>
<S> <C> <C> <C> <C>
SAFECO Northwest High Yield Utility Sub-Account Emerging Markets
Sub-Account Sub-Account Sub-Account

1 year . . $29 $29 $31 $35
3 years . . $90 $90 $95 $107
5 years . . $153 $154 $161 $180

Natural Resources Balanced Sub-Account International U.S. Small Cap
Sub-Account Sub-Account Sub-Account
1 year . . $37 $32 $37 $33
3 years . . $114 $98 $112 $102
5 years . . $192 $166 $190 $173
</TABLE>

The purpose of the preceding table is to assist an Owner or prospective Owner
in understanding the various costs and expenses an Owner will bear directly or
indirectly. The above table reflects expenses of the Separate Account as well
as the Available Funds. The above examples reflect the $30 Annual
Administration Maintenance Charge as an annual charge of .77% of assets based
on an average expected Contract Value of $30,000.

THE EXAMPLES SET FORTH ABOVE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST
OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE
SHOWN. The example assumes a 5% annual rate of return pursuant to requirements
of the Securities and Exchange Commission ("Commission"). This hypothetical
rate of return is not intended to be representative of past or future
performance of any Sub-Account. (See "Deductions under the Contracts" on page
__.) The examples assume that Purchase Payments are allocated to each
Available Fund which may have different expenses.

The Contingent Deferred Sales Charge shown in the table is the maximum sales
load. (See "Contingent Deferred Sales Charge" on page __ of this Prospectus
which describes the range of the Contingent Deferred Sales Charge over time and
limits on the Contingent Deferred Sales Charge as a percentage of total gross
Purchase Payments.) The table does not reflect premium taxes which are levied
by some states. (See "Premium Tax" on page ___.) Any premium taxes or other
taxes levied by any governmental entity which SAFECO, in its sole discretion,
determines have resulted from the establishment or maintenance of the Contract
or any portion the Contract, the receipt by SAFECO of Purchase Payments, or the
commencement of annuity payments will be deducted from the Contract.
Currently, with respect to Qualified Contracts, SAFECO intends to assume
responsibility for all premium taxes, provided that SAFECO reserves the right,
in the future, to pass the responsibility for all premium taxes to the Owner of
the Contract and assess a charge for such taxes to the Contract.

8
<PAGE> 19

The table reflects Owner transaction expenses, administrative fees, and other
Separate Account charges during the Accumulation Period. (See the descriptions
beginning on page __ of this Prospectus). The Annual Administration
Maintenance Charge and the Contingent Deferred Sales Charge are not applicable
during the Annuity Period; the other charges and expenses, including those of
the Available Funds, do apply during the Annuity Period. (See the prospectuses
of the Available Funds for a fuller description of their expenses.)

SUMMARY

The minimum initial Purchase Payment under the Contract is $2,000 for a
Qualified Contract and $5,000 for a Non-Qualified Contract. The minimum
additional Purchase Payment is $250 for both a Qualified Contract and a
Non-Qualified Contract, except for additional Purchase Payments made through a
Systematic Investing Program, described below, in which case the minimum for
both a Qualified Contract and Non-Qualified Contract is $100.

If the Contract Value available for annuity payments after the Annuity Date is
less than $5,000, the Contract Value may be distributed in one lump sum in lieu
of annuity payments. If any Annuity payment under the Contract would be less
than $250, SAFECO shall have the right to change the frequency of payments to
such intervals as will result in payments of at least $250. (See "The Annuity
Period" on page __.)

SAFECO does not deduct a sales charge from Purchase Payments. However, if any
part of the value of the Contracts is surrendered SAFECO will, with certain
exceptions, deduct from the value of the Contract, a Contingent Deferred Sales
Charge equal to the maximum of 7% of the amount withdrawn, but in no event more
than 9% of gross Purchase Payments. This charge is imposed to permit SAFECO
Securities, Inc. ("SAFECO Securities"), the distributor, or SAFECO to recover
sales expenses which they have advanced. (See "Contingent Deferred Sales
Charge" on page __.)

In addition, on the last day of each Contract Year or upon full surrender,
SAFECO currently will deduct an Annual Administration Maintenance Charge of $30
from the Contract Value of those Contracts with a Contract Value less than
$100,000. An Asset Related Administration Charge equivalent to an annual rate
of .15% of the average daily net asset value of the Separate Account is charged
both during the Accumulation Period and the Annuity Period and is guaranteed to
not increase for the duration of the Contract. These charges are to reimburse
SAFECO for administrative expenses related to the issue, maintenance and
administration of the Contracts. SAFECO does not expect to recover from these
charges an amount in excess of the actual costs associated with administering
the Contracts. (See "Contract Administrative Charges" on page ___.)

SAFECO deducts a mortality and expense risk charge from the assets of the
Separate Account, as a daily asset charge equivalent to an annual rate of 1.25%
of the average daily net asset value of the Separate Account during the
Accumulation Period and the Annuity Period. SAFECO

9
<PAGE> 20

imposes the mortality and expense risk charge as compensation for assuming
several mortality risks and expense risks for the duration of the Contract.
SAFECO assumes a mortality risk by its contractual obligation to pay (i) a
death benefit to the Beneficiary if the Owner dies prior to the Annuity Date,
(ii) the minimum guaranteed death benefit, which reflects increases in Contract
Value; and (iii) annuity payments for a longer period than anticipated. SAFECO
assumes the expense risk that (i) the deductions for sales and administration
charges may prove to be insufficient to cover the actual expenses incurred and
(ii) no surrender or similar charge on the death benefit or upon annuitization
is imposed. (See "Deduction for Assuming Mortality and Expense Risks" on page
___.)

As set forth in the Contract, any premium taxes payable to any governmental
entity, which SAFECO determines to be properly chargeable against the Contract,
will be charged against the Contract. (See "Premium Tax" on page __.)

The Owner generally may, within ten (10) days after the date on which the
Contract is issued, revoke the Contract, in which event the Owner will be paid
the Contract Value, which may be more or less than the Purchase Payments. In
states where required, SAFECO will refund the Purchase Payments rather than the
Contract Value. SAFECO reserves the right to allocate all payments to the
Money Market Sub-Account until the expiration of fifteen (15) days from the
date the first Purchase Payment is received. If SAFECO so allocates payments,
SAFECO will refund the greater of Purchase Payments or the Contract Value.
Free look provisions may vary based on the Owner's state of residence.

An individual for whom a Contract is purchased under an individual retirement
account may revoke the Contract by giving written notice of revocation to the
Home Office at any time within seven (7) days after the later of the date on
which (i) the account is established, or (ii) the individual receives a
disclosure statement notifying him of his right of revocation. Upon such
revocation, SAFECO will refund the full initial Purchase Payment made.

This Prospectus describes how a Contract may be purchased and redeemed. (See
"Distribution of Contracts" on page __ and "Redemptions" on page __.)

Premature payments of benefits under a Contract may cause a penalty tax to be
incurred. (See "Federal Tax Status" on page __.)

THE INSURANCE COMPANY

SAFECO is a stock life insurance company organized under the insurance laws of
the state of Washington on January 23, 1957. SAFECO is primarily engaged in
the writing of individual and group life, accident and health insurance and
annuity policies. SAFECO is authorized to write insurance and annuities in the
District of Columbia and all states, except New York. Its Home Office is
located at 15411 N.E. 51st Street, Redmond, Washington 98052. SAFECO is

10
<PAGE> 21

a wholly-owned subsidiary of the SAFECO Corporation, which is a holding company
whose subsidiaries are engaged primarily in insurance and financial service
businesses.

SAFECO SEPARATE ACCOUNT C

The Separate Account was established pursuant to a resolution of the Board of
Directors of SAFECO dated February 6, 1986. The Separate Account was
established under the laws of the state of Washington and is registered as a
unit investment trust under the 1940 Act. Such registration does not involve
supervision of the investments or investment policies of the Separate Account
and does not imply that the Contract has been approved or disapproved by the
Commission.

The income, gains or losses of the Separate Account are credited to or charged
against the assets of the Separate Account without regard to the other income,
gains or losses of SAFECO. These assets are held with relation to the
Contracts described in this Prospectus and such other Variable Annuity
contracts as may be issued by SAFECO and designated by it as participating in
the Separate Account.

Although the assets maintained in the Separate Account will not be charged with
any liabilities arising out of any other business conducted by SAFECO, all
obligations arising under the Contracts, including the promise to make annuity
payments, are general corporate obligations of SAFECO. Accordingly, all of
SAFECO's assets are available to meet its contractual obligations and expenses
under the Contracts participating in the Separate Account.

SUB-ACCOUNTS OF THE SEPARATE ACCOUNT
AND THE AVAILABLE FUNDS

Twelve Sub-Accounts, each of which reflects the investment performance of a
specific underlying mutual fund in which the Sub-Account invests, are available
under the Contracts. Subject to certain limitations and any restrictions by an
applicable retirement plan, the Owner may elect to have Net Purchase Payments
credited to any of the available Sub-Accounts.

Five of the Sub-Accounts invest in shares of the corresponding portfolio of the
SAFECO Resource Series Trust, an open-end diversified management investment
company (the "SAFECO Funds"). Seven of the Sub-Accounts invest in shares of
the Other Available Funds.

The SAFECO Funds were formed specifically to serve as an investment medium for
the Separate Account or other segregated asset accounts established by SAFECO
or an affiliate of SAFECO ("Other Separate Accounts"). Only the Separate
Account and the Other Separate Accounts are eligible at this time to purchase
shares of the SAFECO Funds. The SAFECO Funds reserve the right to offer their
shares to Separate or other segregated asset accounts established by other
insurance companies. SAFECO Asset Management Company ("SAFECO Management"),

11
<PAGE> 22

SAFECO Plaza, Seattle, Washington 98185, a wholly-owned subsidiary of SAFECO
Corporation, is the investment adviser to the SAFECO Funds and also performs
certain administrative functions for each SAFECO Fund. SAFECO provides certain
personnel and facilities utilized by SAFECO Management in performing its
investment advisory and administrative functions.

The Other Available Funds are open-end diversified management investment
companies. The Other Available Funds are designed to serve as investment
vehicles for variable annuity and variable life insurance contracts of various
insurance companies and currently are available to the separate accounts of a
number of insurance companies including SAFECO. The investment adviser for
each of the Other Available Funds is: Federated Advisers; Lexington Management
Corporation; Investors Research Corporation and Wanger Asset Management, L.P.

The Boards of Directors or Trustees of the Other Available Funds are
responsible for monitoring the Other Available Funds for the existence of any
material irreconcilable conflict between the interests of the owners of all
separate accounts investing in the Other Available Funds and determining what
action, if any, should be taken if a material irreconcilable conflict should
occur. (See the prospectuses of the Other Available Funds for further
discussion of the risks associated with the offering of Other Available Fund
shares to the Separate Account and the separate accounts of other insurance
companies. Also see the Statement of Additional Information regarding the
terms of the Participation Agreements relating to the Separate Account's
investment in the Other Available Funds.)

INVESTMENT OBJECTIVES OF THE AVAILABLE FUNDS

Set forth below is a summary of the investment objectives of the Available
Funds. There can be no assurance that these objectives will be achieved. The
Available Funds' prospectuses accompany this Prospectus; investors should read
them carefully before investing.

THE SAFECO FUNDS

SAFECO Bond Fund (SAFECO Bond Sub-Account). The investment objective of the
Bond Sub-Account is to seek as high a level of current income as is consistent
with the relative stability of capital. The SAFECO Bond Sub-Account invests in
the SAFECO Bond Fund. To pursue its investment objective, the SAFECO Bond Fund
invests primarily in medium-term debt securities. Although the SAFECO Bond
Fund does not intend to purchase below investment grade bonds during the coming
year, it may hold up to 20% of total assets in bonds which are downgraded after
purchase to below investment grade quality by Standard & Poor's Corporation or
Moody's Investors Services, Inc. Below investment grade bonds are commonly
referred to as high-yield or "junk" bonds and have special risks associated
with them. (See the SAFECO Funds' prospectus and statement of additional
information for more information.)

SAFECO Equity Fund (SAFECO Equity Sub-Account). The investment objective of
the SAFECO Equity Sub-Account is to seek long-term growth of capital and
reasonable current

12
<PAGE> 23

income. The SAFECO Equity Sub-Account invests in the SAFECO Equity Fund. To
pursue its investment objective, the SAFECO Equity Fund ordinarily invests
principally in common stocks or securities convertible into common stocks.
Fixed-income securities may be purchased in accordance with business and
financial conditions.

SAFECO Growth Fund (SAFECO Growth Sub-Account). The investment objective of
the Growth Sub-Account is to seek growth of capital and the increased income
that ordinarily follows from such growth. The SAFECO Growth Sub-Account
invests in the SAFECO Growth Fund. To pursue its investment objective, the
SAFECO Growth Fund ordinarily invests a preponderance of its assets in common
stocks selected primarily for potential appreciation. To determine those
common stocks which have the potential for long-term growth, SAFECO Management
evaluates the issuer's financial strength, quality of management and earning
power. Because the SAFECO Growth Fund invests primarily in common stock
selected for potential appreciation, its share price may be more volatile than
the other equity funds.

SAFECO Money Market Fund (SAFECO Money Market Sub-Account). The investment
objective of the SAFECO Money Market Sub-Account is to seek as high a level of
current income as is consistent with the preservation of capital and liquidity
through investments in high-quality money market investment maturing in
thirteen months or less. The SAFECO Money Market Sub-Account invests in the
SAFECO Money Market Fund which seeks to maintain a net asset value per share of
$1.00. SHARES OF THE SAFECO MONEY MARKET FUND ARE NEITHER INSURED, NOR
GUARANTEED, BY THE U.S. GOVERNMENT. THERE IS NO ASSURANCE THAT THE SAFECO
MONEY MARKET FUND WILL MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.

SAFECO Northwest Fund (SAFECO Northwest Sub-Account). The investment objective
of the SAFECO Northwest Sub-Account is to seek long-term growth of capital
through investing primarily in Northwest companies. The SAFECO Northwest
Sub-Account invests in the SAFECO Northwest Fund. To pursue its investment
objective, the SAFECO Northwest Fund invests at least 65% of its total assets
in securities issued by companies with their principal executive offices
located in Washington, Alaska, Idaho, Oregon or Montana. The SAFECO Northwest
Fund ordinarily invests its assets in shares of common stock selected primarily
for potential long-term appreciation. The SAFECO Northwest Fund also may
occasionally invest in securities convertible into common stock.

THE OTHER AVAILABLE FUNDS

Federated Corporate Bond Fund (High-Yield Sub-Account). The investment
objective of the High-Yield Sub-Account is to seek high current income. The
High-Yield Sub-Account invests in the Federated Corporate Bond Fund. To pursue
its investment objective, the Federated Corporate Bond Fund invests primarily
in a diversified portfolio of professionally managed fixed-income securities.
The fixed-income securities in which the Federated Corporate Bond Fund intends
to invest are lower-rated corporate debt obligations, which are commonly
referred to as "junk bonds." Some of these fixed-income securities may involve
equity features. Capital

13
<PAGE> 24

growth will be considered, but only when consistent with the investment
objective of high current income.

Federated Utility Fund (Utility Sub-Account). The investment objective of the
Utility Sub-Account is to seek high current income and moderate capital
appreciation. The Utility Sub-Account invests in the Federated Utility Fund.
To pursue its investment objective, the Federated Utility Fund invests
primarily in a professionally managed and diversified portfolio of equity and
debt securities of utility companies that produce, transmit, or distribute gas
and electric energy as well as those companies that provide communications
facilities, such as telephone and telegraph companies. Under normal market
conditions, the Federated Utility Fund invests at least 65% of its total assets
in securities of utility companies.

Lexington Emerging Markets Fund (Emerging Markets Sub-Account). The investment
objective of the Emerging Markets Sub-Account is to seek long-term growth of
capital primarily through investment in equity securities and equivalents of
companies domiciled in, or doing business in, emerging countries and emerging
markets. The Emerging Markets Sub-Account invests in the Lexington Emerging
Markets Fund. To pursue its investment objective, the Lexington Emerging
Markets Fund invests primarily in emerging country and emerging market equity
securities of all types of common stocks and equivalents (the following
constitute equivalents: convertible debt securities and warrants), although the
Fund also may invest in preferred stocks, bonds, and money market instruments
of foreign and domestic companies, the U.S. government, and its agencies. The
Lexington Emerging Markets Fund, under normal conditions, will invest at least
65% of its total assets in emerging country and emerging market equity
securities in at least three countries outside of the U.S. and at all times
will invest in a minimum of three countries outside of the U.S. Investments in
emerging country equity securities are not subject to a maximum limit, and it
is the intention of the Lexington Emerging Markets Fund's adviser to invest
substantially all of the Fund's assets in such securities. For purposes of its
investment objective, the Lexington Emerging Markets Fund considers emerging
country equity securities to be any country whose economy and market the World
Bank or United Nations considers to be emerging or developing, and the Fund
also may invest in equity securities and equivalents, traded in any market, of
companies that derive 50% or more of their total revenue from either goods or
services produced in such emerging countries and emerging markets or sales made
in such countries.

Lexington Natural Resources Fund (Natural Resources Sub-Account). The
investment objective of the Natural Resources Sub-Account is to seek long-term
growth of capital through investing primarily in common stocks of companies
that own or develop natural resources and other basic commodities, or supply
goods and services to such companies. The Natural Resources Sub-Account
invests in the Lexington Natural Resources Fund. To pursue its investment
objective, the Lexington Natural Resources Fund seeks to identify securities of
companies that, in its management's opinion, are undervalued relative to the
value of natural resource holdings of such companies in light of current and
anticipated economic or financial conditions. The Lexington Natural Resources
Fund will consider a company to have substantial natural resource assets when,
in its management's opinion, the company's holdings of the assets are of such
magnitude,

14
<PAGE> 25

when compared to the capitalization, revenues or operating profits of the
company, that changes in the economic value of the assets will affect the
market price of the equity securities of such company, which, generally, is
when at least 50% of the non-current assets, capitalization, gross revenues or
operating profits of the company in the most recent or current fiscal year are
involved in or result from, directly or indirectly through subsidiaries,
exploring, mining, refining, processing, fabricating, dealing in or owning
natural resource assets. Up to 25% of the Lexington Natural Resources Fund's
total assets may be invested in securities principally traded in markets
outside the U.S.

TCI Balanced Fund (Balanced Sub-Account) The investment objective of the
Balanced Sub-Account is capital growth and current income. The Balanced
Sub-Account invests in the TCI Balanced Fund. To pursue its investment
objective with regard to the equity portion of the portfolio, the TCI Balanced
Fund invests primarily in common stocks, including securities convertible into
common stocks and other equity equivalents and other securities that meet
certain standards, and have better-than-average potential for appreciation.
Management of the TCI Balanced Fund intends to maintain approximately 60% of
its assets in such securities, regardless of the movement of stock prices.
Management intends to maintain approximately 40% of its assets in fixed income
securities, with a minimum of 25% of that amount in fixed income senior
securities. The fixed income securities will be chosen based on their level of
income production and price stability.

The TCI Balanced Fund may invest in a diversified portfolio of debt and other
fixed-rate securities payable in U.S. currency. These may include obligations
of the U.S. Government, i.e., Treasury Bills, Treasury notes, and U.S.
Government Bonds supported by the full faith and credit of the United States,
its agencies and instrumentalities, corporate securities, i.e., bonds, notes,
preferred and convertible issues, and sovereign government, municipal,
mortgage-related and other asset-backed securities.

TCI International Fund (International Sub-Account)

The investment objective of the International Sub-Account is capital growth.
The TCI International Sub-Account invests in the TCI International Fund. To
pursue its investment objective, the TCI International Fund invests primarily
in securities of foreign companies that meet certain standards that have
potential for appreciation. The TCI International Fund will invest primarily
in common stocks of such companies, including depositary receipts for common
stocks and other equity equivalents. The TCI International Fund tries to stay
fully invested in such securities, regardless of the movement of stock prices
generally. Under normal conditions, the TCI International Fund will invest at
least 65% of its assets in common stocks or other equity equivalents from at
least three countries outside the United States. When management believes that
the total capital growth potential or other securities equals or exceeds the
potential return of common stocks, it may invest up to 35% of its assets in
such other securities.

In order to achieve maximum investment flexibility, the TCI International Fund
has not established geographic limits on asset distribution on either a
country-by-country or region-by-region

15
<PAGE> 26

basis. Management expects to invest both in issuers whose principal place of
business is located in countries with developed economies and in countries with
less developed economies. The principal criterion for inclusion of a security
in the fund's portfolio is its ability to meet the fundamental and technical
standards of selection and, in the opinion of the fund's investment manager, to
achieve better-than-average appreciation.

The other securities in which the TCI International Fund may invest are
convertible securities, preferred stocks, bonds, notes and debt securities of
companies, obligations of domestic and foreign governments and their agencies.

Wanger U.S. Small Cap Fund (U.S. Small Cap Sub-Account). The investment
objective of the Wanger U.S. Small Cap Sub-Account is to seek long-term capital
growth. The Wanger U.S. Small Cap Sub-Account invests in the Wanger U.S. Small
Cap Fund. To pursue its investment objective, the Wanger U.S. Small Cap Fund
invests mostly in stocks of small and medium-size companies, concentrating on
companies with a total market capitalization of less than $1 billion. The
Wanger U.S. Small Cap Fund invests mostly in U.S. companies, but also may
invest up to one-third of its total assets in foreign securities.

# # #

The values of the investments held in the Available Funds fluctuate daily and
are subject to the risk of changing economic conditions as well as the risks
inherent in the ability of management to anticipate changes in such investments
necessary to meet changes in economic conditions. Additional information
concerning the Available Funds, including information as to the expenses paid
by the Available Funds, is given in the Available Funds' prospectuses which
accompany and should be read in conjunction with this Prospectus.

SUBSTITUTION OF OTHER SECURITIES OR AVAILABLE FUNDS. If the shares of any
Available Funds should no longer be available for investment by the Separate
Account or, if in the judgment of SAFECO further investment in such Funds'
shares should become inappropriate, SAFECO may substitute shares of some other
investment company for Fund shares already purchased or to be purchased in the
future under the Contract. Any substitution will be made pursuant to any prior
approval of the Commission and compliance with all applicable rules and
regulations. In the event of any substitution or change, SAFECO will endorse
the Contract if necessary to reflect the substitution or change.

DEDUCTIONS UNDER THE CONTRACTS

CONTINGENT DEFERRED SALES CHARGE. SAFECO makes no deduction from Purchase
Payments for sales expenses, but does impose a Contingent Deferred Sales
Charge. SAFECO incurs sales expenses upon the issuance of the Contracts. Such
expenses include commissions, costs of advertising and sales promotion, costs
associated with this Prospectus allocable to new sales, and sales
administration and related costs. Because the Contracts are normally purchased
for the long

16
<PAGE> 27

term, SAFECO expects to recover these costs over time. If, however, a Contract
is totally or partially surrendered, a Contingent Deferred Sales Charge is
imposed at that time as a means for SAFECO to recover sales expenses.

The Contingent Deferred Sales Charge is assessed on withdrawals during the
first six Contract Years. The charge is 7% of the amount withdrawn during the
first Contract Year. The percentage scales downward by one percent each
Contract Year so that during the second Contract Year the charge is 6% and
during the sixth Contract Year is 2%. Beginning in the seventh Contract Year
there will be no charge.

Each Contract Year, an Owner generally may withdraw up to 10% of the Contract
Value without payment of the Contingent Deferred Sales Charge. Thus, if there
is more than one withdrawal per Contract Year, the free withdrawal amount will
be recalculated at the time of each withdrawal. Further, a maximum charge of
$25 is assessed for each withdrawal after the first taken in any Contract Year.
SAFECO has represented in documents filed with the SEC that this charge for
withdrawals in excess of one withdrawal per Contract Year is consistent with
the expenses assumed by SAFECO based on its review of its requirements and
likely costs over the duration of the Contracts.

No Contingent Deferred Sales Charge will be deducted from the Contract Value
due to: Transfers between Sub-Accounts (see "Transfers Between Sub-Accounts"
and "Other Services"); withdrawals made pursuant to a Settlement Option (see
"Settlement Options"); annual required minimum distributions; the death of the
Owner; or withdrawals for payment of the Annual Administration Maintenance
Charge.

PREMIUM TAX. Deduction for premium taxes will be made only in those instances
and at such time as the laws and regulations of the various states (or other
jurisdictions) assess such a tax and where SAFECO determines that such premium
taxes have resulted from the establishment or maintenance of the Contract or
any portion of the Contract, the receipt by SAFECO of Purchase Payments, or the
commencement of annuity payments. Premium tax assessments are based on the
address of record of the Payor at the time a premium tax may be payable. It is
SAFECO's current practice not to assess the applicable deduction for premium
taxes to Qualified Contracts, although SAFECO reserves the right to assess such
deduction to Qualified Contracts in the future. SAFECO currently assesses the
applicable deduction for premium taxes to Non-Qualified Contracts. Premium
taxes presently range from 0% to 3.5% of Purchase Payments or the amount
applied to a Settlement Option, as the case may be.

CONTRACT ADMINISTRATION CHARGES. SAFECO performs or delegates all
administrative functions relative to the Contracts. Except as noted below,
deductions are made under each Contract for the expenses associated with such
functions. Such expenses may include salaries, rent, office equipment,
communications, postage, legal, actuarial, and auditing fees. SAFECO may
receive compensation from the investment advisers or administrators of the
Available Funds consistent with the administrative services rendered to such
entities.

17
<PAGE> 28

Annual Administration Maintenance Charge. If the Contract Value is below
$100,000 an Annual Administration Maintenance Charge of $30 will be deducted
from the Contract Value. There is no charge if the Contract Value is $100,000
or above. SAFECO may change the amount of the Annual Administration
Maintenance Charge but in no event will the Annual Administration Maintenance
Charge exceed the lesser of $40 per Contract Year or the anticipated costs.

The entire Annual Administration Maintenance Charge is deducted from the
Contract Value in one Sub-Account or the Fixed Account, which is determined
according to the following order: the SAFECO Money Market Sub-Account; SAFECO
Bond Sub-Account; the Balanced Sub-Account; the International Sub-Account; the
U.S. Small Cap Sub-Account; the Utility Sub-Account; the High Yield Bond
Sub-Account; the Natural Resources Sub-Account; the Emerging Markets
Sub-Account; the SAFECO Equity Sub-Account; the SAFECO Northwest Sub-Account;
the SAFECO Growth Sub-Account; and the Fixed Account.

For example, if there is Contract Value only in the SAFECO Money Market
Sub-Account, Balanced Sub-Account and the U.S. Small Cap Sub-Account, then the
Annual Administration Maintenance Charge of $30 is deducted from the SAFECO
Money Market Sub-Account, while if there is Contract Value only in the Balanced
Sub-Account, International Sub-Account and the U.S. Small Cap Sub-Account, then
the Annual Administration Maintenance Charge of $30 is deducted from the
Balanced Sub-Account. The Annual Administration Maintenance Charge is deducted
by redeeming the number of Accumulation Units in the applicable Sub-Account
equal in value to the Annual Administration Maintenance Charge or by deducting
the amount of the Annual Administration Maintenance Charge from the Fixed
Account. (See "Fixed Account".) The deduction is made on the last day of each
Contract Year and upon a complete withdrawal of all Contract Value from all
Sub-Accounts and the Fixed Account.

Asset Related Administration Charge. To further defray administrative costs,
SAFECO deducts a charge of .000411% of the average daily net asset value of the
Sub-Account(s) of the Separate Account per day, which is approximately equal to
an annual rate of .15% for a 365 day year. SAFECO guarantees that the Asset
Related Administration Charge will never be increased.

DEDUCTION FOR ASSUMING MORTALITY AND EXPENSE RISKS. SAFECO assumes a mortality
risk by its contractual obligation to pay a death benefit to the Beneficiary if
the Owner dies prior to the Annuity Date. Moreover, the minimum guaranteed
death benefit, which reflects increases in Contract Value, imparts a
significant mortality risk on SAFECO. SAFECO also assumes the risk that
annuity payments will continue for a longer period than anticipated. SAFECO
assumes the expense risk that the deductions for sales and administration
charges may prove to be insufficient to cover the actual expenses incurred.
Further, SAFECO assumes an expense risk from the fact that the Contract does
not impose any surrender or similar charge on the death benefit or upon
election of a Settlement Option. SAFECO assumes these risks for the duration
of the Contract. As compensation for assuming these risks, SAFECO imposes a
charge based on assets, during the Accumulation Period and the Annuity Period.

18
<PAGE> 29

The charge is .002466% per day of the average daily net asset value of the
Sub-Accounts for assuming mortality risks, including the minimum guaranteed
death benefit, and .000959% for assuming expense risks. These charges, when
combined, are approximately equal to 1.25% on an annual basis for a 365 day
year. The charge, together with the Administrative charge, is applied at the
end of each Valuation Period through a factor used in the determination of the
net investment results of the Sub-Accounts. (See "Net Investment Factor".)

Revenue received from the mortality and expense risk and administrative charges
is added to the General Account of SAFECO and is not specifically earmarked for
any other purpose. SAFECO utilizes the assets in its General Account to meet
administration, mortality and general expenses, as well as any shortfall in the
recovery of distribution costs related to the Contracts. Charges under other
contracts SAFECO issues also provide a source of revenue to meet these
expenses. Based upon SAFECO's actuarial projections, it is possible that the
Contingent Deferred Sales Charge described above may, at least initially, be
insufficient to recover all of the distribution costs and related expenses
incurred in connection with the Contracts. In such event, some portion of the
mortality and expense risk charges (to the extent such charges comprise surplus
in the General Account) may be utilized by SAFECO to meet such excess sales
expenses.

AVAILABLE FUND EXPENSES. There are deductions from and expenses paid out of
the assets of the Available Funds that are described in the prospectuses for
those Funds. These deductions and expenses and the investment performance of
the Available Funds affect the value of Accumulation Units. (See "The
Accumulation Period".)

TRANSFERS BETWEEN SUB-ACCOUNTS

At any time, the Owner may elect by written notice to the Home Office or by
properly executed telephone instructions to transfer amounts between the
Sub-Accounts. The number of Accumulation Units equal to the amount to be
transferred from a Sub-Account will be deducted from that Sub-Account and the
number of Accumulation Units equal to the amount transferred will be credited
to the other Sub-Account(s). Each such transfer must involve a minimum of
$500, except for transfers made pursuant to certain Programs. (See "Other
Services".) If the remaining balance of any Sub-Account after a transfer would
be less than $500, the remaining balance also will be transferred. The minimum
amount that may be transferred into a Sub-Account is $50.

An Owner may make up to twelve transfers each Contract Year at no charge. A
charge of $10 per transfer may be charged for transfers in excess of these
limitations. Transfers effected pursuant to certain Programs will not be
counted towards these limitations. (See "Other Services"). However,
unscheduled transfers are limited by the terms of certain Programs. Further,
there are certain limitations upon an Owner's ability to transfer from and to
the Fixed Account. (See "Fixed Account".) Transfer requests may be deferred
or suspended, as permitted under the 1940 Act.

19
<PAGE> 30

REDEMPTIONS

Subject to certain requirements in the Contracts, an Owner may, at or prior to
the Annuity Date, redeem all or part of the Contract Value, except that, if the
value of the Sub-Account being partially redeemed would be less than $500 after
such redemption, the remaining balance will also be redeemed. The minimum
amount that may be redeemed is $500, or the Contract Value, if less. The
redemption will be effected by canceling the number of Accumulation Units equal
in value to the amount of the redemption request. Accumulation Units will be
canceled at the Accumulation Unit value as of the end of the Valuation Period
in which the request for redemption is received at the Home Office.

Any applicable Contingent Deferred Sales Charge will be deducted from the
redemption value determined as described above and below. (See "Deductions
Under the Contracts".) The annuitant has no redemption right under the
Contracts subsequent to the commencement of annuity payments.

Payment of a redemption request will be made within seven (7) days of receipt
of such request in proper and complete form, except that payment of a
redemption request, like a transfer request, may be deferred as permitted under
provisions of the 1940 Act, for any period when: (i) the New York Stock
Exchange ("Exchange") is closed (other than customary weekend and holiday
closings); (ii) trading on the Exchange is restricted as determined by the
Commission or the Exchange is closed for other than weekends and holidays;
(iii) an emergency exists as determined by the Commission as a result of which
disposal by an Available Fund of securities held by it is not reasonably
practicable, or it is not reasonably practicable for an Available Fund fairly
to determine the value of its net assets; or (iv) the Commission by order so
permits for the protection of security holders.

The tax consequences, including the tax withholding requirements, of a
redemption should be carefully considered. (See "Federal Tax Status".)

OTHER SERVICES

THE PROGRAMS. SAFECO offers several investment related programs which are
available only during the Accumulation Period: Dollar Cost Averaging; Automatic
Transfers; Appreciation or Interest Sweeps; Sub-Account Rebalancing; Systematic
Investment; and Periodic Withdrawal Programs. Certain of the Programs are
alternatives with respect to any one Sub-Account; other Programs may be
combined. Thus, the Dollar Cost Averaging Program, the Automatic Transfer
Program and the Appreciation or Interest Sweep Program are alternatives with
respect to the selected Sub-Account, and in all cases with respect to the Fixed
Account. However, the Sub-Account Rebalancing Program may be combined with
each of the other Programs, but it is not available with respect to the Fixed
Account. Under each Program, the related transfers between and among Sub-
Accounts and the Fixed Account are not counted as one of the twelve free
transfers. However, if an Owner executes an unrelated voluntary transfer from
the Sub-Account

20
<PAGE> 31

participating in a Program, other than the Sub-Account Rebalancing Program, the
Program will be terminated for the remainder of the Contract Year. In
addition, if a Program is terminated before six Program transfers have
occurred, the six Program transfers are counted as part of the twelve free
transfers. If the balance in a Sub-Account would be less than $500 as a result
of a transfer pursuant to one of these Programs, other than the Appreciation or
Interest Sweep and Sub-Account Rebalancing Programs, then the entire balance in
that Sub-Account will also be transferred. Each of the Programs has its own
requirements, as discussed below.

If the Owner has submitted the required telephone authorization form, certain
changes may be made by telephone. For those programs involving transfers,
Owners may change instructions by telephone with regard to which Sub-Accounts
or the Fixed Account Contract Value may be transferred. SAFECO will not be
responsible for the authenticity of telephone instructions nor for any loss,
damage, cost or expense arising out of any telephone instructions that SAFECO
reasonably believes to be authentic based on its verification procedures. Such
procedures may include requiring certain personal identification information
prior to acting on telephone instructions, tape recording telephone
communications, and providing written confirmation of instructions communicated
by telephone. If SAFECO does not employ reasonable verification procedures to
confirm that instructions communicated by telephone are genuine, it may be
liable for any losses arising out of any action on its part or any failure or
omission to act as a result of its own negligence, lack of good faith, or
willful misconduct.

DOLLAR COST AVERAGING PROGRAM. SAFECO offers a Dollar Cost Averaging Program
during the Accumulation Period whereby an Owner may predesignate a portion of
any Sub-Account's Contract Value or the Fixed Account's Contract Value to be
automatically transferred on a monthly or quarterly basis to one or more of the
other Sub-Accounts or to the Fixed Account. The amount to be transferred may
be expressed as a set dollar amount or as a percentage of the Contract Value in
the selected Sub-Account or the Fixed Account. Transfers from the Fixed
Account are subject to a maximum of 1.33% monthly or 4% quarterly of the
Contract Value in the Fixed Account at the time of the initial transfer. Upon
election of the Dollar Cost Averaging Program the limitations on transfers from
the Fixed Account will be calculated. The resultant limitations will apply for
the entire duration of participation in this Program. Each Dollar Cost
Averaging transfer is subject to a minimum transfer of fifty dollars ($50).

The Dollar Cost Averaging Program is available for Purchase Payments and for
Contract Value transferred into any Sub-Account. An Owner may enroll in this
Program at the time the Contract is issued or anytime thereafter by properly
completing the Dollar Cost Averaging enrollment form and returning it to SAFECO
at its Home Office at least ten (10) business days prior to the first business
day of the month, which is the date that all Program transfers will be made
("Transfer Date"). This Program must be elected for at least a six (6) month
period.

If the Contract Value in the participating Sub-Account or the Fixed Account
does not equal or exceed the amount designated to be transferred on each
Transfer Date, Dollar Cost Averaging will cease automatically and the remaining
amount will be transferred.

21
<PAGE> 32

Dollar Cost Averaging will terminate when (i) the designated monthly or
quarterly amounts of transfers have been completed, (ii) the Owner requests
termination in writing and such writing is received at the Home Office at least
ten (10) business days prior to the next Transfer Date in order to cancel the
transfer scheduled to take effect on such date, (iii) the Owner effects any
other transfer from the participating Sub-Account or the Fixed Account while
the Dollar Cost Averaging Program is in effect, or (iv) the Contract is
surrendered. In addition, if any transfer or withdrawal has been made from the
Fixed Account during the Contract Year, the Dollar Cost Averaging Program may
not be established through the Fixed Account for that Contract Year.

An Owner may initiate, reinstate or change the Dollar Cost Averaging terms by
properly completing a new enrollment form and returning it to the Home Office
at least ten (10) business days prior to the next Transfer Date such transfer
is to be made.

When utilizing Dollar Cost Averaging an Owner may be invested in either a
Sub-Account or the Fixed Account and may be invested in any other Sub-Accounts
or the Fixed Account at any given time.

AUTOMATIC TRANSFER PROGRAM. The Automatic Transfer Program is identical to the
Dollar Cost Averaging Program in all respects other than with regard to the
limitations on transfers from the Fixed Account. The limitations on transfers
from the Fixed Account are recalculated annually. Transfers from the Fixed
Account are limited to 1.5% monthly and 4.5% quarterly.

APPRECIATION OR INTEREST SWEEP PROGRAM. An Owner may enroll in the
Appreciation or Interest Sweep Program through either or both the Money Market
Sub-Account or the Fixed Account. Enrollment is limited to Owners whose total
Contract Value is greater than $10,000. Under the Program, if appreciation on
Contract Value in the Money Market Sub-Account or credited interest earned on
Contract Value in the Fixed Account ("Earnings") is greater than 10%, the
Earnings up to 10% of the Contract Value in the Fixed Account or the Money
Market Sub-Account, respectively, will be transferred to any of the
Sub-Accounts, other than the Money Market Sub-Account. Earnings in the Money
Market Sub-Account may not be transferred to the Fixed Account. In no event
may the total Contract Value transferred from the Fixed Account in each
Contract Year exceed a total of 10% of the Contract Value for each such
Contract Year in the Fixed Account computed at the time of the transfer.
Moreover, the Program may not be instituted for the Fixed Account in any
Contract Year during which transfers or withdrawals have been made from the
Fixed Account. Transfers under this Program will be processed monthly or
quarterly on the Transfer Date.

SUB-ACCOUNT REBALANCING PROGRAM. In accordance with the Owner's election of
the relative purchase payments percentage allocations, SAFECO will
automatically rebalance the Contract Value of each Sub-Account either
quarterly, semi-annually, or annually. SAFECO will automatically rebalance the
Contract Value in each of the Sub-Accounts to match the current purchase
payments percentage allocations as of the first Transfer Date during the period
selected. Enrollment is limited to Owners whose total Contract Value is
greater than $10,000 at the time the Program is selected. The Program may be
terminated at any time and the percentages may

22
<PAGE> 33

be altered by written authorization. The requested change must be received at
the Home Office ten (10) days prior to the Transfer Date. If the Owner
terminates the Program, a new Program may not be instituted until the next
Contract Year.

SYSTEMATIC INVESTMENT PROGRAM. Purchase Payments may be made by monthly draft
against the bank account of any Owner that has completed and returned to SAFECO
a Systematic Investment Program application and authorization form. The
application and authorization form may be obtained from SAFECO or from the
sales representative. Each Systematic Investment Program Purchase Payment is
subject to a minimum of one hundred dollars ($100).

PERIODIC WITHDRAWAL PROGRAM. SAFECO will make monthly, quarterly or annual
distributions of a predetermined dollar amount to an Owner that has enrolled in
the Periodic Withdrawal Program. Under the Program, all distributions will be
made directly to the Owner and will be treated for federal tax purposes as any
other withdrawal or distribution of Contract Value. (See "Federal Tax
Status".) An Owner may specify the amount of each withdrawal, subject to a
minimum of $250. In each Contract Year, up to 10% of Contract Value may be
withdrawn without the imposition of any Contingent Deferred Sales Charge. If
withdrawals pursuant to the Program are greater than 10% of Contract Value in
any Contract Year, the amount of the withdrawals greater than 10% will be
subject to the applicable Contingent Deferred Sales Charge. Any ad hoc
withdrawals an Owner makes during a Contract Year will be aggregated with
withdrawals pursuant to the Program to determine the applicability of any
Contingent Deferred Sales Charge. If the frequency of withdrawals under the
Program is greater than annually, SAFECO will charge an annual fee of $25 to
compensate it for the added administrative costs.

Unless the Owner specifies the Sub-Account or Sub-Accounts or the Fixed Account
from which withdrawals of Contract Value shall be made or if the amount in a
specified Sub-Account is less than the predetermined amount, SAFECO will make
withdrawals under the Program from the Sub-Accounts and the Fixed Account in
amounts proportionate to the amounts in the Sub-Accounts and the Fixed Account.
Withdrawals are subject to the applicable minimum Sub-Account balances. All
withdrawals under the Program will be effected by canceling the number of
Accumulation Units equal in value to the amount to be distributed to the Owner
and any applicable Contingent Deferred Sales Charge.

The Program may be combined with all other Programs except those entailing
transfers or withdrawals from the Fixed Account. However, the Owner may
terminate such other program and may begin participation in the Program on the
first day of the next Contract Year.

It may not be advisable to participate in the Program and incur a Contingent
Deferred Sales Charge when making additional Purchase Payments under the
Contract.

23
<PAGE> 34

FIXED ACCOUNT

Owners may allocate Purchase Payments to the Fixed Account. In addition,
Owners may transfer amounts in or out of the Fixed Account. Such fixed amounts
are held in the General Account of SAFECO. Because of exemptive and
exclusionary provisions, amounts in the Fixed Account have not been registered
under the Securities Act of 1933 and the Fixed Account has not been registered
as an investment company under the 1940 Act. Accordingly, neither the Fixed
Account nor any interests therein are subject to the provisions of these acts
and, as a result, the staff of the Commission has not reviewed the disclosures
in this Prospectus relating to the Fixed Account. Disclosures regarding the
Fixed Account may, however, be subject to certain generally applicable
provisions of the Federal securities laws relating to the accuracy and
completeness of statements made in prospectuses. This Prospectus is generally
intended to serve as a disclosure document only for the aspects of the Contract
involving the Separate Account and contains only selected information regarding
the Fixed Account. More information regarding the Fixed Account may be
obtained from the Home Office or from the sales representative.

GENERAL DESCRIPTION. SAFECO's obligations with respect to the Fixed Account
are supported by SAFECO's General Account. Subject to applicable law, SAFECO
has sole discretion over the investment of the assets in the General Account.

SAFECO guarantees that Fixed Account Contract Value will accrue interest at an
annual effective rate of at least 3%, independent of the actual investment
experience of the General Account. SAFECO may, in its sole discretion, credit
higher rates of interest, although SAFECO is not obligated to credit interest
in excess of the guaranteed rate. SAFECO will credit interest to the amount
allocated to the Fixed Account at a rate determined according to SAFECO's
investment year method of assigning interest credits. Interest credits will be
based on the original period of receipt of amounts allocated to the Fixed
Account. Each amount allocated to the Fixed Account will be credited with the
Guaranteed Interest Rate determined for that period during which the allocation
to the Fixed Account is received by SAFECO.

SAFECO will credit the Guaranteed Interest Rate for a period of no less of than
twelve months (the "Interest Guarantee Period"). The Initial Interest
Guarantee Period begins with the date Purchase Payments are first allocated to
the Fixed Account. For the next subsequent Interest Guarantee Period, the
Guaranteed Interest Rate will be determined as soon as practicable prior to the
end of the current Interest Guarantee Period. Currently, SAFECO establishes
subsequent Guaranteed Interest Rates twice annually (April 1 and October 1).
Under the Contracts, SAFECO has reserved the right to establish subsequent
Guaranteed Interest Rates more frequently than twice annually, but in all cases
the rates will be guaranteed for no less than twelve months. Any higher rate
of interest will be quoted at an annual effective rate.

The Settlement Options that are available on a variable basis also are
available on a fixed basis through the Fixed Account. (See "Settlement
Options".) If, as of the Annuity Date, a Settlement Option has not been
selected, SAFECO will make annuity payments under Option 3.

24
<PAGE> 35

FIXED ACCOUNT CONTRACT VALUE. The Fixed Account Contract Value on any
Valuation Date is the sum of the Purchase Payments allocated to the Fixed
Account, plus any transfers from a Sub-Account, plus interest credited to the
Fixed Account, less any previous withdrawals, related withdrawal charges, or
Annual Administration Maintenance Charge allocated to the Fixed Account, or
transfers to a Sub-Account or transfer charges allocated to the Fixed Account.

ANNUAL ADMINISTRATION MAINTENANCE CHARGE. The entire Annual Administration
Maintenance Charge may be deducted from the Contract Value in the Fixed
Account, according to the order described above under "Deductions under the
Contract." The Annual Administration Maintenance Charge is deducted from the
Fixed Account by deducting the amount of the Annual Administration Maintenance
Charge from the Contract Value in the Fixed Account. The deduction is made on
the last day of each Contract Year and upon a complete withdrawal of all
Contract Value. (See "Contract Administration Charges".)

Furthermore, if the Annual Administration Maintenance Charge is to be deducted
from the Fixed Account, the Annual Administration Maintenance Charge will be
reduced if (i) it is greater than the Purchase Payments received for the
current Contract Year and (ii) the excess charge over those Purchase Payments
would reduce the net interest on the Fixed Account to below the Guaranteed
Interest Rate on the Fixed Account. In that case, the Annual Administration
Maintenance Charge will be limited to the amount of Purchase Payments received
during the Contract Year plus the amount of interest credited in excess of the
guaranteed interest rate on the Fixed Account.

FIXED ACCOUNT TRANSFERS AND PARTIAL WITHDRAWALS. Amounts in the Fixed Account
are generally subject to the same rights and limitations and will be subject to
the same charges as are amounts allocated to the Sub-Accounts with respect to
total and partial withdrawals. (See "Transfers Between Sub-Accounts" and
"Redemptions".) Transfers out of the Fixed Account are limited to a minimum of
at least $500 (or, if less, the entire amount in the Fixed Account) and a
maximum of 10% of the Contract Value in the Fixed Account in each Contract
Year. Transfers into the Fixed Account must be at least $50. In the
alternative, an Owner may elect, once per Contract Year, to have
pre-established automatic monthly or quarterly transfers made from the Fixed
Account. (See "Other Services".)

CONTRACT BENEFITS

GENERAL. The objective of the Contracts is to provide Contract Value and
Settlement Options which will tend to reflect changes in the cost of living
subsequent to the date of issue of the Contract. There is no assurance that
this objective will be met. SAFECO seeks to accomplish this objective by
allocating Net Purchase Payments, as directed by the Owner, to one or more of
the Sub-Accounts.

Each Contract is issued to the Owner. If consistent with applicable tax laws,
a Contract may be owned jointly by spouses ("joint Owners"). Unless the Owner
names an Annuitant in the

25
<PAGE> 36

application for, or amendment to, the Contract, the Owner will be considered
the Annuitant. The Annuitant will become the Owner on commencement of a
Settlement Option. Unless joint Owners name an Annuitant in the application
for, or amendment to, the Contract, the older of the two joint Owners will be
considered the Annuitant, for purposes of determining the limitations on
selection of an Annuity Date. In addition, under Settlement Option 3, joint
Owners may become "joint Annuitants." (See "Settlement Options".)

Subject to the minimum initial and subsequent Purchase Payment limitations, an
Owner may continue to make Purchase Payments prior to the commencement of
annuity payments. The Contracts provide for a variable monthly life annuity to
begin at some future selected date, called the Annuity Date, with a provision
that unless another Settlement Option is selected Variable Annuity payments
will be made pursuant to Settlement Option 3, unless the Beneficiary is a
non-natural person, in which case Variable Annuity payments will be made under
Settlement Option 1. The Owner may elect one of the other Settlement Options
provided by the Contracts. (See "Settlement Options").

Each Contract contains a minimum guaranteed death benefit if the Owner dies
prior to the Annuity Date, generally equal to the greater of (i) the Contract
Value at the time of death or (ii) the last determined minimum guaranteed death
benefit. Different death benefits may apply under special circumstances. For
example, a different death benefit applies if the Beneficiary does not provide
due proof of death and elect a Settlement Option or lump sum payment within six
months of the Owner's death. The death benefits, surrender value, and
Settlement Options under the Contract will not be less than the minimum
benefits required by any statute of the state in which the Contract is
delivered. (See "Payment on or after Death of Owner".)

The Owner may select a different form of Variable Annuity (see "Settlement
Options") or change the Annuity Date (see "Payment Provisions"), by written
notice to SAFECO received prior to any previously selected Annuity Date, except
that any Annuity Date selected cannot be later than the date the Annuitant
attains age 90. Once a Settlement Option has begun it is irrevocable. The
Owner may elect that all or a portion of the Contract Value be applied to
effect a fixed annuity. (See "Settlement Options".) An Owner also may,
subject to certain restrictions, elect to redeem all or a portion of the
Contract Value, less applicable charges. (See "Redemptions".) However, certain
tax consequences may result from any such election. (See "Federal Tax
Status".)

CERTAIN MINIMUM AMOUNTS

The minimum initial Purchase Payment under the Contract is $2,000 for a
Qualified Contract and $5,000 for a Non-Qualified Contract. The minimum
additional Purchase Payment is $250 under both a Qualified Contract and a
Non-Qualified Contract. If a Systematic Investing Program is utilized the
minimum additional Purchase Payment is $100.

If the amount available to be applied under a Settlement Option is $5,000, or
less, SAFECO reserves the right to pay such amount in a lump sum cash
distribution. If annuity payments

26
<PAGE> 37

would be or become less than $250, SAFECO has the right to change the frequency
of payments to such intervals as will result in payment of at least $250. (See
"The Annuity Period".)

Contracts may be redeemed in full or in part at any time prior to the Annuity
Date, except that a partial redemption of less than $500 from any Sub-Account
is not permitted, and the value of any Sub-Account after such partial
redemption must be at least $500 or the entire value of the Sub-Account will be
redeemed. (See "Redemptions".) The minimum amount that may be transferred
from a Sub-Account is $500 and the minimum amount that may be transferred to a
Sub-Account is $50. (See "Transfers".)

THE ACCUMULATION PERIOD

THE CONTRACT VALUE AND ACCUMULATION UNITS. During the period prior to the
commencement of annuity payments, referred to herein as the Accumulation
Period, a separate accumulation account is maintained under the Contracts for
each Sub-Account into which Purchase Payments are directed. Each Net Purchase
Payment is credited to each Sub-Account, or allocated among the Sub-Accounts,
as directed by the Owner, in the form of Accumulation Units. Accumulation
Units are credited separately to each Sub-Account. The number of Accumulation
Units of each type credited to the Contract is determined by dividing each Net
Purchase Payment by the value of an Accumulation Unit for that Sub-Account. The
initial Purchase Payment will be credited to the Contract not later than two
(2) business days following the date the properly completed application which
accompanies the Purchase Payment is received at the Home Office. If an
application is incomplete or incorrect, the applicant will be informed of the
reasons for the delay, and the Purchase Payment will be returned to the
applicant within five (5) business days of receipt unless the applicant
specifically authorizes SAFECO to retain the Purchase Payment until the
application is completed or corrected. Purchase Payments allocated to the
Sub-Accounts must be received by 1:00 p.m., Pacific Time, to receive that day's
Accumulation Unit value.

The value of any Sub-Account at any time is equal to the total number of
Accumulation Units credited to that Sub-Account multiplied by the then
applicable current value of an Accumulation Unit for that Sub-Account.

ACCUMULATION UNIT VALUES. The value of an Accumulation Unit, for each
Sub-Account, will vary depending upon the investment experience of, and the
charges and expenses deducted from, that Sub-Account. The Accumulation Unit
value for any Valuation Period is determined by multiplying the Accumulation
Unit value for the Sub-Account, as of the immediately preceding Valuation
Period, by the Net Investment Factor for the current Valuation Period. The
Accumulation Unit value for a Valuation Period is the value determined at the
end of such period.

27
<PAGE> 38

VALUATION DATE AND VALUATION PERIOD. Each date on which the assets of the
Sub-Accounts are valued is a Valuation Date. The assets of the Sub-Accounts
are valued as of 4:00 p.m., Eastern Standard Time, on each Valuation Date. The
period from the time the Accumulation Unit value is determined as of one
Valuation Date to the time such value is determined as of the next Valuation
Date is called a Valuation Period.

NET INVESTMENT FACTOR. The net investment factor is a formula for measuring
the change in Accumulation Unit value over a Valuation Period. It is
determined for any Valuation Period: by dividing (a) the net asset value per
share of the Available Fund as of the current Valuation Period, plus the per
share amount of any dividend or capital-gains distributions made by the
Available Fund, plus or minus the charge for taxes, if any, by (b) the net
asset value per share of the Available Fund determined as of the end of the
immediately preceding Valuation Period, and then subtracting from this result,
(c) a the daily equivalent of the mortality and expense risk charge, and (d) a
the daily equivalent of the Asset Related Administration Charge.

EXAMPLE OF CALCULATION OF ACCUMULATION UNIT VALUE. Suppose (a) the
accumulation unit value for the preceding Valuation Period was $10.00; (b) the
net asset value of a Fund share as of the end of the current Valuation Period
is $10.50; (c) the per-share amount of a distribution from the Available Fund
during such Valuation Period was $.15; (d) the per-share amount of a tax
liability was $00.00; (e) the net asset value of a Fund share as of the end of
the previous Valuation Period as $10.40; (f) the per-share amount of a tax
liability was $00.00; (g) the number of days in the current Valuation Period is
one; (h) the daily deduction for assuming mortality and expense risks is
.003425; and (i) the daily deduction for the Asset Related Administrative
Charge is .000411. The net investment factor for the current Valuation Period
is calculated as follows:

$ (b) + (c) - (d) - (1 x (h)) - (1 x (i)) = Net Investment Factor
$ (e) - (f)

then,

$10.50 + $.15 - $0.00 - (1 x .003425) - (1 x .000411) = 1.02020
$10.40 - $0.00

The accumulation unit value for the preceding Valuation Period ($10.00) is then
multiplied by the net investment factor for the current Valuation Period
(1.02020), which produces an accumulation unit value of $10.2020 for the
current Valuation Period.

THE ANNUITY PERIOD

ANNUITY DATE. The Annuity Period begins after the Annuity Date chosen by the
Owner, which must be a date prior to the time the Annuitant reaches Age 90.
Annuity payments under one of the Settlement Options begin after the Annuity
Date. An Owner may choose to have either the

28
<PAGE> 39

variable portion of the Contract or the fixed portion of the Contract or both
annuitized on the Annuity Date. If an Owner chooses to have Annuity payments
begin only for the variable portion or the fixed portion of the Contract,
subsequent Net Purchase Payments will continue to be credited only to the
portion of the Contract not yet annuitized. In addition if an Owner chooses to
have only the variable portion or fixed portion of the Contract annuitized, the
Owner must chose a second Annuity Date for the other portion of the Contract
which is prior to the Annuitant's 90th birthday.

PAYMENT PROVISIONS. The Variable Annuity payments under the Contracts will
vary in amount, either up or down, to reflect the investment performance of the
Available Funds, as elected by the Owner. Each of the Sub-Accounts and
corresponding Available Funds is available during the Annuity Period. The
Owner should carefully consider the volatility and general risk characteristics
of each Sub-Account. The Sub-Accounts that experience greater volatility and
risks may be unsuitable for the Owner during the Annuity Period, as they could
entail a complete loss of Variable Annuity payments.

Variable Annuity payments will commence on the Annuity Date selected by the
Owner. The Annuity Date may be changed provided written election to change is
received at the Home Office prior to any previous Annuity Date, the
commencement of any Settlement Option, and the Annuitant's 90th birthday. (See
"Federal Tax Status" for limitations of the Annuity Date under certain
Qualified Contracts.) SAFECO will determine the day of the month that Variable
Annuity payments will be made.

At the time of election, the Owner should consider the question of allocation
of Contract Value between the available Sub-Accounts or the Fixed Account for
the purchase of a fixed-dollar annuity. Allocation between the Fixed Account
and the Sub-Accounts may be altered by the Owner immediately prior to the
Annuity Date. If the Owner does not elect otherwise, Sub-Account Accumulation
Units, after reduction for any applicable premium tax, will be applied to
provide annuity payments that reflect the investment experience of such
applicable Sub-Accounts.

The election of a Settlement Option must be made by the Beneficiary during the
sixty (60) day period commencing with the date SAFECO receives notification of
the Owner's death. If no election is made within the sixty (60) day period,
then a single sum payment will be made to the Beneficiary. Any one of the
Settlement Options described below may be elected by filing a written notice
prior to the Annuity Date. (See "Settlement Options" for limitations under
Qualified Contracts.) Once commenced the Settlement Options are irrevocable.
If the Annuitant dies before the Annuity Date, the Owner must designate a new
Annuitant within thirty (30) days of notice to SAFECO of the Annuitant's death
or the Owner becomes the new Annuitant.

Upon annuitization, the Contract Value may be allocated among the available
Sub-Accounts for the purchase of variable Settlement Options or fixed
Settlement Options. Transfers immediately prior to annuitization will not be
subject to a transfer charge. Moreover, assuming the Annuitant has not
attained age 90, the Owner may elect to commence annuitization of either the
Sub-

29
<PAGE> 40

Account Contract Value or the Fixed Account Contract Value and continue the
Accumulation Period for the portion of the Contract not annuitized. If the
amount to be applied under a Settlement Option is less than $5,000, SAFECO
reserves the right to pay such amount in one sum instead. Also, if the annuity
payments would be or become less than $250, SAFECO has the right to change the
frequency of payments to such intervals as will result in payment of at least
$250.

During the Annuity Period, SAFECO continues to deduct the mortality and expense
risk charge (1.25%) and the Asset Related Administration Charge (0.15%), which
are assessed during the Accumulation Period. The Annual Administration
Maintenance Charge will not be deducted during the Annuity Period.

SETTLEMENT OPTIONS

OPTION 1 - Variable Life Annuity - This is a Variable Annuity which provides
monthly payments during the lifetime of the Annuitant with no monthly payments
or other benefits payable after the date of his or her death. This Option
offers a slightly higher level of monthly payments than Options 2 or 3, because
no further payments are payable after the death of the Annuitant. It would be
possible under this Option for only one annuity payment to be made if the
Annuitant died before the due date of the second annuity payment, two if he or
she died before the third annuity payment, etc.

OPTION 2 - Variable Life Annuity with 120 or 240 Monthly Payments Guaranteed -
This is a Variable Annuity which provides monthly payments during the lifetime
of the Annuitant and further provides that if, at the death of the Annuitant,
payments have been made for less than the elected period guaranteed, which may
be 120 or 240 months, the annuity payments will be continued during the
remainder of the guaranteed period to the named Beneficiary. The Beneficiary
may elect to have the present value of the guaranteed Annuity remaining as of
the date the notice of death is received by SAFECO commuted at the assumed
investment rate of 4% and paid in a single lump sum payment.

OPTION 3 - Variable Joint and Survivor Life Annuity - This is a Variable
Annuity that provides monthly payments during the joint lifetime of the
Annuitant and their spouse, and thereafter during the lifetime of the survivor
with no monthly payments or other benefits payable after the death of the
survivor. It would be possible under this Option for only one annuity payment
to be made if the Annuitant and their spouse died before the due date of the
second annuity payment, two if they died before the third annuity payment, etc.

If, as of the Annuity Date, a Settlement Option has not been selected, SAFECO
will make payments under Option 3, if the Beneficiary is a natural person. If,
as of the Annuity Date, a Settlement Option has not been selected, SAFECO will
make payments under Option 1, if the Beneficiary is a non-natural person.

30
<PAGE> 41

In lieu of variable payments, an election may be made to apply a portion, or
all, of the proceeds of the Contract to purchase a fixed dollar Annuity. Fixed
dollar Annuities are not described in this Prospectus. Information concerning
a fixed dollar Annuity can be obtained from SAFECO or any of its sales
representatives.

Under Qualified Contracts, Option 2 with 240 monthly payments guaranteed, and
any other option that would impair the Qualified tax status of the Contract,
may not be available.

ANNUITY PURCHASE RATES. The Contracts contain a schedule of annuity rates
based upon an assumed investment return of 4% for the Settlement Options. The
annuity rates show how much the first monthly Variable Annuity payment will be
for each $1,000 applied to effect the annuity. Except as noted below, the
rates vary with the form of annuity, the date of birth and sex of the
Annuitant, and the date on which the annuity is effected.

The annuity rates for the Contracts are based on, among other things, an annual
interest rate, referred to as the assumed investment return of 4%. The assumed
investment return affects both the amount of the first annuity payment and the
pattern of subsequent payments. If the actual investment return should exceed
the assumed investment return, the Variable Annuity payments would increase
and, conversely, if the actual investment return should be less than the
assumed investment return the payments would decrease. A higher assumed
investment return would produce a higher initial payment but more slowly rising
subsequent payments (or more rapidly falling subsequent payments) than the
selection of a lower assumed investment return.

ANNUITY UNIT VALUES. The value of an Annuity Unit, for each Sub-Account, will
vary depending upon the investment experience of, and the charges and expenses
deducted from, that Sub-Account. For any Valuation Period the value of an
Annuity Unit is determined by multiplying the value of an Annuity Unit in each
Sub-Account, as of the immediately preceding Valuation Period by the Net
Investment Factor for the Value Period for which the value is being calculated,
and dividing the result by a factor to adjust for the assumed investment return
described under "Annuity Purchase Rates" above. (See "Net Investment Factor".)

NUMBER OF ANNUITY UNITS. The number of Annuity Units to be credited to the
Annuitant will be determined by dividing the first monthly payment due under
the selected Settlement Option by the value of the Annuity Unit calculated as
of the 15th day of the preceding month, or the first subsequent Valuation Date
if the 15th of the preceding month is not a Valuation Date. The resulting
number of Annuity Units remains fixed during the Annuity payment period and is
used to compute each Annuity payment.

TIME OF PAYMENT. The first Annuity payment is made on the Annuity Date.

AMOUNT OF PAYMENT. The dollar amount of the first monthly Variable Annuity
payment under the Settlement Options is determined by applying the Contract
Value, after deduction for premium taxes, if applicable, as of the 15th day of
the preceding month, to the Variable Annuity tables contained in the Contract
(which are guaranteed for the duration of the Contract).

31
<PAGE> 42

Thereafter, the dollar amount of each Variable Annuity payment is determined by
multiplying the number of Annuity Units credited to the Annuitant by the value
of the Annuity Unit, computed as described above, as of the 15th day of the
preceding month.

PAYMENT ON OR AFTER DEATH OF OWNER

The Contract provides for a minimum guaranteed death benefit, provided that
SAFECO receives due proof of death in a satisfactory form and election of a
Settlement Option prior to six months from the date of the Owner's death. If
the due proof of death or the election of a Settlement Option is received later
than six months after the date of death of the Owner, SAFECO provides a death
benefit that is subject to change based upon investment experience, as
discussed below.

On the Valuation Date following receipt at the Home Office of the due proof of
death and election of a Settlement Option before the Annuity Date and while the
Contract was in force, SAFECO generally will pay to the designated Beneficiary
a minimum guaranteed death benefit that is the greater of: (i) the Contract
Value on the later of the date of due proof of death or the election of a
Settlement Option; or (ii) the last determined minimum guaranteed death
benefit.

The initial minimum guaranteed death benefit is equal to the initial Net
Purchase Payment. The minimum guaranteed death benefit is reset at each sixth
Contract Anniversary ("Six Year Contract Anniversary") to equal the greater of
(i) the then current Contract Value or (ii) the current minimum guaranteed
death benefit. The greater of the two values becomes the new minimum
guaranteed death benefit. The minimum guaranteed death benefit is fixed for
the remaining duration of the Contract as of the last Six Year Contract
Anniversary preceding the Owner's 76th birthday.

If the Contract is owned by joint Owners, the minimum guaranteed death benefit,
or any other applicable death benefit, is payable only on the death of the
elder Owner. Moreover, following the death of the elder Owner, if the joint
Owner elects to continue the Contract, there is no minimum guaranteed death
benefit. The death benefit will be the Contract Value, which reflects Net
Purchase Payments and withdrawals. Contract Value is subject to change as a
result of investment experience.

Each form of minimum guaranteed death benefit is adjusted to reflect Net
Purchase Payments and withdrawals. If an Owner makes withdrawals, the minimum
guaranteed death benefit is reset to equal the previous minimum guaranteed
death benefit multiplied by the ratio of the Contract Value after the
withdrawal to the Contract Value before the withdrawal. The recomputed minimum
guaranteed death benefit will be used in determining the new minimum guaranteed
death benefit at the next Six Year Contract Anniversary. After the Owner's
death, the minimum guaranteed death benefit will be reduced dollar for dollar
by any withdrawals by the Beneficiary. The Beneficiary may only make
withdrawals at the time of or prior to the election of a Settlement Option.

32
<PAGE> 43

If due proof of death or the election of a payment option (a Settlement Option
or lump sum payment) are made later than six months following the date of the
Owner's death, the value as of the six month anniversary of the date of death
will apply. Thus, for example, if notification of death is not received until
nine (9) months after the date of death, the death benefit under (i) will be
calculated as follows:

Upon notification of death, SAFECO will determine what the Contract Value was
on the six-month anniversary of the date of death. Assuming that Contract
Value was $90,000 on that date and the last determined minimum guaranteed death
benefit was $100,000, SAFECO will contribute $10,000 to Contract Value as of
that date and will guarantee the portion of the Contract Value attributable to
SAFECO's contribution and pay interest thereon at the then prevailing money
market rate until the date of election of a payment option. SAFECO will then
calculate the effects of investment experience on the portion of the Contract
Value existing on the six-month anniversary of the date of death, and hence,
the death benefit will consist of the combined value of the guaranteed and
nonguaranteed portions of the Contract Value from that six-month anniversary
date to the date of election of a payment option. If on the six-month
anniversary of the date of death the Contract Value exceeds the last determined
minimum guaranteed death benefit, the entire Contract Value will be subject to
market risk from that date to the date of election of a payment option and no
portion of the Contract Value will be guaranteed. Any withdrawals made by the
Beneficiary prior to electing a payment option will be deducted from the death
benefit. The Beneficiary bears the risk and enjoys the rewards of negative or
positive investment experience on any nonguaranteed portion of the Contract
Value during the period from the six-month anniversary of the date of death and
the date of election of a payment option. Beneficiaries should be encouraged to
promptly notify SAFECO of the Owner's death.

In all cases, SAFECO will pay the Beneficiary a lump sum payment of the death
benefit if the election of the Settlement Option is not made within sixty (60)
days of the receipt of due proof of death.

In the event of the Annuitant's death prior to the Annuity Date, the Owner must
designate a new Annuitant. If no designation is made within thirty (30) days
of notification to SAFECO of the death of the Annuitant, the Owner will become
the Annuitant. The election of a Settlement Option must be made by the
Beneficiary during the sixty (60) day period commencing with the date of
SAFECO's receipt of notice of the Owner's death. If no election is made
within the sixty (60) day period, then a single lump sum payment will be made
to the Beneficiary. In the event that the Beneficiary is a surviving spouse,
the Contract can be continued. Upon the death of a co-Owner, the surviving
Owner becomes the designated Beneficiary. Any other named Beneficiary will be
a contingent Beneficiary.

With respect to non-qualified Contracts if the Owner dies on or after the
Annuity Date and before the entire value of the Contract has been distributed,
any remaining value must be distributed at least as rapidly as the method of
distribution in effect at the time of the Owner's death. If the Owner dies
before the Annuity Date, generally the entire value under the Contract

33
<PAGE> 44

must be distributed within five years after the date of the Owner's death or
must be distributed over the designated Beneficiary's life or over a period not
extending beyond the Beneficiary's life expectancy, in equal or substantially
equal payments, with payments beginning within one year of the Owner's death.

THE DISTRIBUTION OF THE CONTRACTS

Contracts will be sold through broker-dealers who have entered into selling
agreements with SAFECO Securities. Such broker-dealers are registered under
the Securities Exchange Act of 1934, as amended, and are members of the
National Association of Securities Dealers, Inc. and have representatives
authorized by applicable law to sell variable annuities. Such broker-dealers
will be allowed a maximum commission of 6% of Purchase Payments on the
Contract. Under certain circumstances, broker-dealers may elect a smaller
commission based on Purchase Payments with continuing payments based on
Contract Value.

VOTING PRIVILEGES

SAFECO, as the sponsor of the Separate Account, will vote Fund shares held in
the Separate Account at regular and special meetings of shareholders of the
Available Funds, but will follow voting instructions received from the person
authorized to give such instruction.

The number of Fund shares for which a person is authorized to give instructions
will be determined as of a date to be chosen by SAFECO not more than ninety
(90) days prior to any meeting, and voting instructions will be solicited by
written communication at least ten (10) days prior to such meeting.

Except as specified below, the Owner may instruct the voting of Fund shares
prior to the Annuity Date. Under Contracts issued in connection with plans
qualified under Section 408 of the Code, the Annuitant may instruct the voting
of shares prior to the Annuity Date.

The number of shares attributable to a Contract prior to the Annuity Date is
determined by dividing the value of the Contract Value for such Contract by the
net asset value of one share of the respective Available Funds. The number of
shares attributable to a Contract on and after the Annuity Date is determined
by dividing the reserve (which generally will decrease) held by SAFECO in the
Separate Account for such Contract by the net asset value of one share.

All Available Fund proxy material, together with an appropriate form to be used
to give voting instructions, will be mailed to each person having such voting
instruction privileges. Neither the Available Funds nor SAFECO is under a duty
to inquire as to the instructions received or the authority of Owners or others
to instruct the voting of shares. Shares for which no instructions are
received, including shares owned by SAFECO, will be voted in the same
proportion as the

34
<PAGE> 45

shares for which instructions are received from persons entitled to give such
instructions by reason of all contracts participating in the Separate Account.

FEDERAL TAX STATUS

It should be recognized that the rules governing the tax treatment of annuity
contracts are very complex, and cannot be easily summarized. The following
discussion is not intended to be exhaustive, and it does not cover numerous
special rules for annuities issued or contributions paid in past years if such
annuities are exchanged for the Contract. A qualified tax advisor should be
consulted for complete information.

FEDERAL TAX STATUS OF THE SEPARATE ACCOUNT. SAFECO is taxed as a life
insurance company under the Code. The operations of the Separate Account are
part of the total operations of SAFECO and are not taxed separately, although
the operations of the Separate Account are treated separately for accounting
and financial statement purposes and must be considered separately in computing
SAFECO's tax liability. No taxes are payable by the Separate Account on the
investment income and capital gains of the Separate Account. SAFECO reserves
the right to deduct a charge from Separate Account assets if such tax treatment
should change.

The Contracts will be taxed as an annuity as long as the diversification
requirements of Section 817(h) of the Code and the Treasury Regulations
thereunder are complied with. SAFECO intends to comply with such requirements.
If the diversification requirements are not satisfied, there will be tax
consequences for Owners. The Secretary of the Treasury may issue a regulation
or a ruling which will prescribe the circumstances in which an Owner's control
of the investments of a segregated asset account may cause the Owner, rather
than the insurance company, to be treated as the owner of the assets of the
account. The regulation or ruling could impose requirements that are not
reflected in the Contract, relating, for example, to such elements of Owner
control as Purchase Payment allocation, investment selection, transfer
privileges and investments in a Sub-Account focusing on a particular investment
sector. It has also been suggested that, in certain circumstances, control
over the investment adviser might constitute prohibited Owner control. SAFECO
believes that Owner control will not exist under the Contract. Because failure
to comply with any such regulation or ruling presumably would cause earnings on
an Owner's interest in the Separate Account to be includible in the Owner's
gross income in the year earned, SAFECO has reserved certain rights to alter
the Contract and investment alternatives so as to comply with such regulation
or ruling. SAFECO believes that any such regulation or ruling would apply
prospectively. Since the regulation or ruling has not been issued, there can
be no assurance as to the content of such regulation or ruling or even whether
application of the regulation or ruling will be prospective.

FEDERAL TAX STATUS OF QUALIFIED CONTRACTS. The comments in this section apply
only to Contracts described in this Prospectus which are Qualified Contracts.
Qualified Contracts include Individual Retirement Annuities issued pursuant to
Section 408 of the Code, including rollovers from other Qualified Contracts and
simplified employee pensions.

35
<PAGE> 46

Benefits received from a Qualified Contract will often be paid from
contributions that have never been included in the gross income of the
participant. Benefits received from such a plan will be taxable as ordinary
income whether received upon surrender, withdrawal, or death or disability of
the annuitant. If the participant made contributions to the Qualified Contract
with funds that have previously been included in gross income, special rules
provide for the return of the contributions over the period that payments are
received. Under certain circumstances, a 10 percent penalty tax may be imposed
on distributions. The rules governing the imposition of this penalty are
discussed in a later part of this section.

The rules governing the eligibility to participate, limitations on permissible
contributions, and the treatment of distributions from Qualified Contracts are
extremely complex. New Internal Revenue Service ("IRS") rules require that
Federal income taxes be withheld, at a 20% rate, from any "eligible rollover
distribution" which is not transferred directly to another qualified plan. All
qualified plans are required to notify participants of the IRS rules before an
"eligible rollover distribution" is made. The Separate Account has adopted
procedures that will enable it to make or receive trustee to trustee transfers,
which will exempt eligible distributions from the withholding requirements.
Purchasers should also be aware that the Code generally requires that certain
minimum distributions from Qualified Contracts be made in the year following
the date when the purchaser reaches age 70 1/2, or following the death of the
purchaser (a special rule applies for surviving spouses). The minimum
distribution rules generally require that the purchaser of a Qualified Contract
receive distributions at least annually over his or her life expectancy, or the
joint life expectancy of the purchaser and his or her spouse. Purchasers of
Qualified Contracts should seek competent tax advice on the tax rules governing
their eligibility to participate, the limitations on contributions, and the
treatment of distributions.

FEDERAL TAX STATUS OF NON-QUALIFIED CONTRACTS. The comments in this section
apply only to Non-Qualified Contracts. The Federal income tax treatment of the
Owner, Annuitant, or Beneficiary of a Variable Annuity contract is determined
under the rules of Section 72 of the Internal Revenue Code. Under the existing
provisions of the Code, an increase in the Accumulation Value is not taxable to
an individual Owner until received by him, either as a cash redemption or as
annuity payments. Under the rules explained below, any taxable gain on
payments or redemption from the Contract are taxable as ordinary income. No
payments by SAFECO under the Contracts are eligible for capital gains
treatment.

In applying the rules explained below, an individual's investment in the
Contract is equal to the sum of the Purchase Payments made by the individual on
the Contract, reduced by that portion of any previous partial redemption(s)
that were not treated as taxable income.

The Federal income taxation of distributions or payments from annuity contracts
may vary depending upon the type of distribution received. If the
distributions are received as a series of substantially equal payments, the
gain on the Contract is spread out over the payment period. Under the
"exclusion ratio" of Section 72 of the Code, a portion of each payment is
excluded from income as a return of the investment in the Contract. The
portion of each payment to be excluded is determined by dividing the investment
in the Contract by the expected return in the

36
<PAGE> 47

case of fixed payments, and by the payment period in the case of variable
payments. The total excludable amount is limited to the individual's
investment in the Contract. Once the individual's investment in the Contract
is returned under the exclusion ratio, all subsequent payments will be included
in income. If payments end by reason of the death of the annuitant before the
investment in the Contract has been returned under the exclusion ratio, the
amount of the unrecovered investment in the Contract is a deduction on the
return of the last taxable year of the annuitant. In the event of a complete
redemption prior to the Annuity Date, any gain on the termination of the
Contract will be taxed as ordinary income and the Owner may be subject to the
10 percent penalty tax provisions of the Code. The rules governing the
imposition of this penalty are explained in a later paragraph of this section.

If amounts are received from partial redemption of the Contract prior to the
annuity starting date, any partial redemption will be taxable to the Owner to
the extent that the Contract's value at the time of the redemption exceeds the
Owner's investment in the Contract and the Owner may be subject to the 10
percent penalty provisions of the Code. The rules governing the imposition of
this penalty are explained in a later section.

If the Owner dies on or after the Annuity Date, the remaining portion of the
Contract's value must be distributed at least as rapidly as under the method of
distribution in effect at the Owner's death. If the Owner dies prior to the
Annuity Date, the entire Contract Value must (a) be distributed within five
years of the Owner's death, or (b) be distributed as annuity payments that do
not extend beyond the life or life expectancy of the Owner's Beneficiary and
that begin within one year of the Owner's death. If the Owner's spouse is the
Beneficiary, the Contract may be continued in the name of the spouse as the
Owner.

In determining the amount of taxable income in a distribution from an annuity
contract, all annuity contracts issued by SAFECO to an individual during any
calendar year are treated as a single contract.

FEDERAL TAX PENALTIES AND WITHHOLDING. A 10 percent penalty tax may be imposed
on certain partial or complete redemptions of a Contract. The 10 percent
penalty tax will not be imposed in certain instances, including those in which
the redemption amount is received after the Annuitant reaches age 59 1/2, if
the redemption amount is one of a series of substantially equal periodic
payments made over the Annuitant's life, and is received following the death of
the Owner, or is attributable to the Owner becoming disabled. For
distributions from Qualified Contracts, the penalty does not apply for the
reasons stated above.

Under a Qualified or Non-Qualified Contract SAFECO is required to withhold
Federal income taxes from any income payments to the Owner unless the owner
elects, for any reason, to have no withholding made from the payments. This
withholding requirement also applies to Qualified Contracts which are
hereinafter discussed. The Owner can change his election at any time by
written notice to the Home Office.

37
<PAGE> 48

LEGAL MATTERS

Legal matters with respect to the organization of SAFECO, its authority to
issue annuity contracts and the validity of the Contract, have been passed upon
by its legal counsel. Katten Muchin & Zavis have advised SAFECO with regard to
federal securities law matters.

SPECIAL CONSIDERATIONS

SAFECO reserves the right to amend the Contract to meet the requirements of any
applicable federal or state laws or regulations. SAFECO will notify the Owner
in writing of any such amendments.

RESTRICTIONS UPON TRANSFER OF OWNERSHIP AND ASSIGNMENT. An Owner's rights
under a Contract may not be assigned or transferred to the extent such
restriction is permitted by applicable law. A Contract, however, may be
assigned for purposes of an exchange pursuant to Section 1035 of the Code. Any
permissible assignment will not be binding upon SAFECO until it receives a
written copy of the assignment and has determined that such assignment is
legally required.

Ownership of a Contract issued to qualify under Section 408 of the Code may not
be transferred, assigned or pledged.

AVAILABLE INFORMATION

SAFECO has filed a registration statement (the "Registration Statement") with
the Commission under the Securities Act of 1933 relating to the Contracts
offered by this Prospectus. This Prospectus has been filed as a part of the
Registration Statement and does not contain all of the information set forth in
the Registration Statement, and reference is hereby made to such Registration
Statement for further information relating to SAFECO and the Contracts. The
Registration Statement may be inspected and copied, and copies can be obtained
at prescribed rates from the Commission.

STATE REGULATION

SAFECO is subject to the laws of the State of Washington governing insurance
companies and to regulation by the Washington Commissioner of Insurance. An
annual statement in a prescribed form must be filed with that Commissioner on
or before March 1 in each year covering the operations of SAFECO for the
preceding year and its financial condition on December 31 of such year. Its
books and assets are subject to review or examination by the Commissioner or
his agents at all times, and a full examination of its operations is conducted
by the National Association of Insurance Commissioners at least once in every
five years.

38
<PAGE> 49

Washington law also prescribes permissible investments, but does not involve
supervision of the investment management or policy of SAFECO. The last such
examination was conducted for the five year period ended December 31, 1990.

EXPERTS

The financial statements of the Separate Account and SAFECO appearing in the
Statement of Additional Information have been audited by Ernst & Young LLP,
independent auditors, as set forth to the extent indicated in their reports
thereon also appearing in the Statement of Additional Information. Such
financial statements have been included therein in reliance on their reports
given on their authority as experts in accounting and auditing.

FINANCIAL STATEMENTS

Financial statements for SAFECO and the Separate Account may be found in the
Statement of Additional Information. The financial statements of SAFECO that
are included in the Statement of Additional Information should be considered
primarily as bearing on the ability of SAFECO to meet its obligations under the
Contracts. The Contracts are not entitled to participate in earnings,
dividends or surplus of SAFECO. As no Contracts have yet been offered through
the Separate Account, the financial statements for the Separate Account only
reflect other variable annuity contracts already issued through the Separate
Account.

39
<PAGE> 50

TABLE OF CONTENTS
STATEMENT OF ADDITIONAL INFORMATION

<TABLE>
<CAPTION>
PAGE
<S> <C>
DISTRIBUTION OF THE CONTRACTS . . . . . . . . . . . . . . . . . . . . . . B-

DETERMINATION OF ANNUITY PAYMENTS . . . . . . . . . . . . . . . . . . . . B-

STANDARDIZED COMPUTATION OF PERFORMANCE . . . . . . . . . . . . . . . . . B-

PERFORMANCE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . B-

TAX COMPARISON . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-

VALUATION OF ASSETS OF THE SEPARATE ACCOUNT . . . . . . . . . . . . . . . B-

TRANSFERABILITY RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . B-

CONTINGENT DEFERRED SALES CHARGE . . . . . . . . . . . . . . . . . . . . B-

PARTICIPATION AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . B-

GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . B-

TAX SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-

FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . B-

APPENDIX A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-
</TABLE>

40
<PAGE> 51

STATEMENT OF ADDITIONAL INFORMATION

INDIVIDUAL VARIABLE ANNUITY CONTRACTS
(for Tax-Qualified and Non-Qualified Plans)

SAFECO SEPARATE ACCOUNT C
(the "Separate Account"), a separate account of
SAFECO Life Insurance Company ("SAFECO")

_______________________________________________________________________

This Statement of Additional Information is not a prospectus but supplements
and should be read in conjunction with the Prospectus for the Contracts. A
copy of the Prospectus may be obtained from SAFECO, P.O. Box 34690, Seattle,
Washington 98124-1690, Telephone Number 1-800-426- 7649.

________________________________________________________________________

The Date of the Prospectus to which this Statement of Additional Information
relates is ____________, 1995.

The Date of this Statement of Additional Information is _____________, 1995.

<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
<S> <C>
Distribution of the Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-2
Determination of Annuity Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-2
Standardized Computation of Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-4
Performance Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-5
Tax Comparison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-7
Valuation of Assets of the Separate Account . . . . . . . . . . . . . . . . . . . . . . . . . . B-7
Transferability Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-7
Contingent Deferred Sales Charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-7
Participation Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-8
General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-8
Tax Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-9
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-11
Appendix A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>

B-1
<PAGE> 52

DISTRIBUTION OF THE CONTRACTS

The Contracts are offered on a continuous basis exclusively through
broker-dealers who have entered into selling agreements with SAFECO Securities,
Inc. ("SAFECO Securities"), a wholly-owned subsidiary of SAFECO Corporation, a
publicly-owned insurance holding company. SAFECO is a wholly-owned subsidiary
of SAFECO Corporation.

DETERMINATION OF ANNUITY PAYMENTS

The following discussion of the method for determining the amount of monthly
annuity payments under a variable payment plan is intended to be read in
conjunction with these sections of the Prospectus for the Contracts:
"Deductions under the Contracts"; "Divisions of the Separate Account and the
Available Funds"; "The Accumulation Period"; and "The Annuity Period". This
discussion assumes there is no Contingent Deferred Sales Charge or premium tax
payable.

Amount of Annuity Payments. The amount of the first annuity payment under a
Contract will be determined on the basis of the Settlement Option selected, the
annuity purchase rate, the date of birth and sex of the annuitant, and the date
on which the Annuity is effected. The amount of the first payment is the sum
of the payments from each Sub-Account determined by applying the Contract
Value, after deduction for premium taxes, if applicable, as of the 15th day of
the preceding month, to the Variable Annuity tables contained in the Contract
(which are guaranteed for the duration of the Contract). The tables are based
on the 1983a Mortality Table Projected 20 Years with Projection Scale G; 50%
Male and 50% Female, and, for variable annuity options, assumed investment rate
of 4.00%. SAFECO guarantees these annuity tables for the duration of the
Contracts.

The dollar amount of the Variable Annuity payments after the first payment will
vary from month to month and will depend upon the number and value of Annuity
Units credited to the Annuitant, which is dependent upon the Settlement Option
selected. A Contract will not share in the divisible surplus of SAFECO.

The number of Annuity Units in each Sub-Account to be credited to the Annuitant
is determined by dividing the amount of the first annuity payment from that
Sub-Account by the value of an Annuity Unit as of the 15th day of the month
preceding the Annuity Date. The number of Annuity Units thus credited each
month to the Annuitant in each Sub-Account remains constant throughout the
Annuity Period. However, the value of Annuity Units in each Sub-Account will
fluctuate with the investment experience of the Sub-Account.

The dollar amount of each Variable Annuity payment after the first is the sum
of the payments from each Sub-Account, which are determined by multiplying the
fixed number

B-2
<PAGE> 53

of Annuity Units per Sub-Account by the value of an Annuity Unit (for that
Sub-Account) as of the 15th day of the preceding month.

Annuity Unit Value. The value of an Annuity Unit for each Sub-Account on any
date varies to reflect the investment experience of the Sub-Account, the
assumed investment rate of 4% on which the annuity tables are based, and the
deduction for charges assessed and imposed by SAFECO, including a mortality and
expense risk charge, Asset Related Administration Charge, and, if applicable, a
charge for premium taxes.

For any Valuation Period the value of an Annuity Unit is determined by
multiplying the value of an Annuity Unit in each Sub-Account, as of the
immediately preceding Valuation Period by the Net Investment Factor for the
Value Period for which the value is being calculated, and dividing the result
by a factor to adjust for the assumed investment return of 4% used in
calculating the annuity rate tables.

Illustrations of Variable Annuity Payments. To illustrate the manner in which
Variable Annuity payments are determined consider this example. Item (4) in
the example shows the applicable monthly payment rate for a male, adjusted age
63, who has elected a life variable annuity payment plan with a guarantee
period of 10 years with the assumed investment rate of 4%. (Option 2, as
described in the Prospectus).

<TABLE>
<S> <C> <C>
(1) Assumed number of accumulation units in a Sub-Account on
maturity date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000

(2) Assumed Value of an accumulation unit in a Sub-Account
at maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12.5000

(3) Cash value of Contract at maturity, (1) x (2) . . . . . . . . . . . . . . . . . . . . . . $ 312,500

(4) Consideration required to purchase $1 of monthly
annuity from annuity rate table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 183.53

(5) Amount of first payment from a Sub-Account, (3) divided
by (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,702.72

(6) Assumed value of Annuity Unit in a Sub-Account at
maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 13.0000

(7) Number of Annuity Units credited in a Sub-Account, (5)
divided by (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130.9785
</TABLE>

The $312,500 value at maturity provides a first payment from the Sub-Account of
$1,702.72, and payments thereafter of the varying dollar value of 130.9785
Annuity Units. The amount of subsequent payments from the Sub-Account is
determined by

B-3
<PAGE> 54

multiplying 130.9785 units by the value of an Annuity Unit in the Sub-Account
on the applicable valuation date. For example, if that unit value is $13.2500,
the monthly payment from the Sub-Account will be 130.9785 multiplied by
$13.2500, or $1,735.46.

However, the value of the Annuity Unit depends entirely on the investment
experience of the Sub-Account. Thus in the example above, if the net
investment rate for the following month was less than the assumed investment
rate of 4%, the Annuity Unit would decline in value. If the Annuity Unit value
declined to $12.7500 the succeeding monthly payment would then be 130.9785 x
$12.7500, or $1,669.98.

For the sake of simplicity the foregoing example assumes that all of the
Annuity Units are in one Sub-Account. If there are Annuity Units in two or
more Sub-Accounts, the annuity payment from each Sub-Account is calculated
separately, in the manner illustrated, and the total monthly payment is the sum
of the payments from the Sub-Accounts.

STANDARDIZED COMPUTATION OF PERFORMANCE

PERFORMANCE COMPARISONS. Performance Information for a Sub-Account may be
compared, in reports and advertising, to: (i) Standard & Poor's Stock Index,
Dow Jones Industrial Averages, Donahue Money Market Institutional Averages, or
other unmanaged indices generally regarded as representative of the securities
markets; (ii) other Variable Annuity separate accounts or other investment
products traced by Lipper Analytical Services, Inc., the Variable Annuity
Research and Data Service, or Morningstar, Inc., which are widely used
independent research firms that rank mutual funds and other investment
companies by overall performance, investment objectives and assets; and (iii)
the Consumer Price Index (a measure of inflation) to assess the real rate of
return from an investment in a Contract. Unmanaged indices may assume the
reinvestment of dividends but generally do not reflect deductions for annuity
charges, investment management costs, brokerage costs and other transaction
costs that are normally paid when directly investing in securities.

Total returns, yields, and other performance information may be quoted
numerically or in a table, graph, or similar illustration. Reports and
advertising also may contain other information, including the ranking of any
Sub-Account derived from rankings of Variable Annuity separate accounts or
other investment products traced by Lipper Analytical Services, Inc. or by
rating services, companies, publications, or other persons which rank separate
accounts or other investment products on overall performance or other criteria.

B-4
<PAGE> 55

PERFORMANCE INFORMATION.

Yields. Some Sub-Accounts may advertise yields. Yields quoted in advertising
reflect the change in value of a hypothetical investment in the Sub-Account
over a stated period of time, not taking in to account capital gains or losses
or the imposition of any Contingent Deferred Sales Charge. Yields are
annualized and stated as a percentage.

Current yield and effective yield are calculated for the Money Market
Sub-Account. Current Yield is based on the change in the value of a
hypothetical investment (exclusive of capital changes) over a particular seven
(7) day period, less a hypothetical charge reflecting deductions from values
during the period (the base period), and stated as a percentage of the
investment at the start of the base period (the base period return). The base
period return is then annualized by multiplying by 365/7, with the resulting
yield figure carried to at least the nearest hundredth of one percent.
Effective yield assumes that all dividends received during an annual period
have been reinvested. This compounding effect causes effective yield to be
higher than current yield. Calculation of effective yield begins with the same
base period return used in the calculation of current yield, which is then
annualized to reflect weekly compounding pursuant to the following formula:

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

Yield for the Bond Sub-Account and High-Yield Sub-Account is based on all
investment income (including dividends and interest) per accumulation unit
earned during a particular thirty (30) day period, less expenses accrued during
the period (net investment income). Yield is computed by dividing net
investment income by the value of an accumulation unit on the last day of the
period, according to the following formula:

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

where a = net investment income earned during the period by the corresponding
Available Fund portfolio, b = expenses accrued for the period (net of any
reimbursements), c = the average daily number of accumulation units
outstanding during the period, and d = the value (maximum offering price) per
accumulation unit on the last day of the period.

Total Returns. Total return reflects all aspects of a Sub-Account's return,
including the automatic reinvestment by the Sub-Account of all distributions
and the deduction of all applicable charges to the Sub-Account on an annual
basis, including mortality and expense risk charges, the Annual Administration
Maintenance Charge, the Asset Related Administration Charge, and any other
charges against Contract Value. Quotations also will assume a termination
(surrender) at the end of the particular period and reflect the deduction of
the Contingent Deferred Sales Charge, if applicable. Additional quotations may
be given that do not assume a termination (surrender) and do not take into
account

B-5
<PAGE> 56

deduction of the Contingent Deferred Sales Charge, since the Contracts are
intended as long-term products.

Average annual total returns are calculated by determining the growth or
decline in value of a hypothetical investment in the Sub-Account over certain
periods, including 1, 5, and 10 years (up to the life of the Sub-Account), and
then calculating the annually compounded percentage rate that would have
produced the same result if the rate of growth or decline in value had been
constant over the period. Investors should realize that the Sub-Account's
experience is not constant over time, but changes from year to year, and that
the average annual returns represent averaged figures as opposed to the
year-to-year performance of a Sub-Account. Average annual returns are
calculated pursuant to the following formula: P(1 + T)n = ERV, where P is a
hypothetical initial payment of $1,000, T is the average annual total return, n
is the number of years, and ERV is the withdrawal value at the end of the
period.

Cumulative total returns are unaveraged and reflect the simple change in value
of a hypothetical investment in the Sub-Account over a state period of time.

TABLE OF HISTORICAL HYPOTHETICAL PERFORMANCE
INFORMATION

THE HISTORICAL VALUES ARE FOR THE RESPECTIVE LIVES OF THE AVAILABLE FUNDS AND
REFLECT THE CHARGES APPLICABLE TO THE CONTRACT. NEITHER THE SEPARATE ACCOUNT
NOR THE CONTRACT EXISTED FOR ALL PERIODS SHOWN.

The performance of the various Sub-Accounts will vary and the hypothetical
results shown are not necessarily representative of future results.
Performance for periods ending after those shown may vary substantially from
the examples shown below. The performance of the various Sub- Accounts is
calculated for a specified period of time by assuming an initial Purchase
Payment of $1,000 allocated to each of the Sub-Accounts and a deduction of all
charges and deductions. For those Sub-Accounts that commenced operations in
1994, the Annual Administration Maintenance Charge is not reflected, and it is
deducted at the end of each Contract Year. (See "Charges and Deductions" for
more information.) No withdrawals are assumed and therefore no CDSC applies.
The percentage increases are determined by subtracting the initial Purchase
Payment from the ending value and dividing the remainder by the beginning
value.

Assuming an initial $1,000 allocated to each of the Sub-Accounts and deduction
of all changes and deductions.
<TABLE>
<CAPTION>
VALUE %
SUB-ACCOUNT PERIOD ($) INCREASE
<S> <C> <C> <C>
SAFECO Money Market July 21, 1987-December 31, 1994 1118 11.84%
SAFECO Bond July 21, 1987-December 31, 1994 1273 27.27%
</TABLE>

B-6
<PAGE> 57

<TABLE>
<S> <C> <C> <C>
SAFECO Equity July 21, 1987-December 31, 1994 1675 67.46%

SAFECO Growth January 7, 1993-December 31, 1994 1450 45.05%
SAFECO Northwest January 7, 1993-December 31, 1994 980 -1.95%

High Yield February 2, 1994 - December 31, 1994 878 -12.24%

Utility February 10, 1994 - December 31, 1994 920 -7.99%
Emerging Markets March 3, 1994 - December 31, 1994 979 -2.09%

Natural Resources October 14, 1991 - December 31, 1994 1014 -1.39%
Balanced May 1, 1991-December 31, 1994 1092 9.15%

International May 1, 1991-December 31, 1994 944 5.58%
</TABLE>

From time to time, additional quotations of total return based on the
historical performance of the Available Funds also may be presented.

TAX COMPARISON

Reports and advertising also may show the effect of tax deferred compounding on
a Sub-Account's investment returns, or returns in general, illustrated by
graphs, charts, or otherwise, which may include a comparison, at various points
in time, of the return from an investment in a Contract (giving effect to all
fees and charges), or returns in general, on a tax-deferred basis (assuming one
or more tax rates) with the return on a taxable basis, and which will disclose
the tax characteristics of the investments shown, including the impact of
withdrawals and surrenders.

VALUATION OF ASSETS OF THE ACCOUNT

The value of Fund shares held in each Sub-Account at the time of each valuation
is the redemption value of such shares at such time.

CONTINGENT DEFERRED SALES CHARGE

The charge is made as a percentage of the amount withdrawn. For example, if an
Owner subject to a 6% Contingent Deferred Sales Charge wishes to net $100 on
the partial redemption of a Contract, he must make a total withdrawal of
$106.38, of which $6.38 will be deducted as a Contingent Deferred Sales Charge.
An Owner need only indicate the net amount he wishes to net on a partial
redemption and SAFECO will determine the total or gross amount necessary to
withdraw to net the desired amount.

To the extent that the Contingent Deferred Sales Charge is insufficient to
cover all the distribution costs and related expenses, some portion of the
proceeds from the

B-7
<PAGE> 58

mortality and expense risk charge may be utilized by SAFECO to meet such excess
distribution expenses. SAFECO has represented in documents filed with the
Securities and Exchange Commission that the mortality and expense risk charge
is consistent with the mortality and expense risks assumed by SAFECO and is
within the range of industry practice, based on its review of its requirements
and industry practice. Moreover, SAFECO has represented that use of any
proceeds from such charge to defray distribution expenses has a reasonable
likelihood of benefiting the Separate Account and Owners.

PARTICIPATION AGREEMENTS

Shares of the other Available Funds are made available to the Separate Account
under substantially similar Participation Agreements ("Participation
Agreements"). Each Participation Agreement is among the applicable Other
Available Fund, and its Distributor, which is the principal underwriter for
Other Available Fund shares, and SAFECO on behalf of the Separate Account. If
state or federal law precludes the sale of any Other Available Fund's shares to
the Separate Account, or in certain other circumstances, sales of shares to the
Separate Account may be suspended and/or the Participation Agreement may be
terminated as to the applicable Other Available Fund. Also, each Participation
Agreement may be terminated by any party thereto on proper written notice.
Notwithstanding termination of the Participation Agreement, the Other Available
Funds and their Distributors generally are obligated to continue to make such
Funds' shares available for Contracts outstanding on the date the Participation
Agreement terminates, unless the Participation Agreement was terminated due to
an irreconcilable conflict among contract owners of different separate
accounts. If for any reason the shares of any Other Available Fund are no
longer available for purchase by the Separate Account for outstanding
Contracts, the parties to each Participation Agreement have agreed to cooperate
to comply with the Investment Company Act of 1940, as amended, in arranging for
the substitution of another funding medium as soon as reasonably practicable
and without disruption of sales of shares to the Separate Account or any
Sub-Account. Each of the Participation Agreements has been filed as an exhibit
to the registration statement for the Contracts and differences between the
terms of the various Participation Agreements are reflected in such agreements.

GENERAL INFORMATION

The financial statements of the Separate Account and of SAFECO Life Insurance
Company included in this Statement of Additional Information have been audited
by Ernst & Young LLP, independent auditors, as set forth to the extent
indicated in their reports thereon also appearing in this Statement of
Additional Information. Such financial statements have been included herein in
reliance on their reports given on their authority as experts in accounting and
auditing. The address of Ernst & Young LLP is 999 Third Avenue, Suite 3500,
Seattle, Washington 98104.

SAFECO Corporation, directly or through its ownership of SAFECO and SAFECO
Asset Management Company ("SAFECO Management"), a wholly owned subsidiary of
SAFECO Corporation, owns beneficially 26.5%, 4.5%, 12.4%, 33.1% and 41.4% of
the outstanding shares of SAFECO Bond Fund, SAFECO Equity Fund, SAFECO Growth

B-8
<PAGE> 59

Fund, SAFECO Money Market Fund, and SAFECO Northwest Fund, respectively, each a
separate portfolio of the SAFECO Resource Series Trust. SAFECO Management is
the investment adviser to the each portfolio of the SAFECO Resource Series
Trust.

TAX SUMMARY

TRANSFERS BETWEEN NON-QUALIFIED ANNUITIES. Under section 1035 of the Internal
Revenue Code of 1986, as amended ("Code"), an Owner may exchange one annuity
contract for another annuity contract in a tax-free exchange. To avoid
recognizing income on the surrender of the annuity contract, the Owner must
absolutely assign the old contract to SAFECO. SAFECO will surrender the old
annuity contract and apply the proceeds to the Contract.

INDIVIDUAL RETIREMENT ANNUITIES (IRAS). The Code permits deductible and
non-deductible contributions to be made under a Contract that qualifies as an
IRA. The Contract (accompanied by the appropriate IRA rider) is designed to
qualify as an IRA. The Code also allows a tax-free transfer (rollover) of
certain distributions from qualified plans and Tax Sheltered Annuity
arrangements ("TSAs") which are used to purchase an IRA.

If the Owner and the Owner's spouse are not currently covered by a retirement
plan (including a Qualified Plan, TSA, or SEP-IRA), then each working spouse
may make a deductible contribution of 100% of compensation up to $2,000
regardless of their adjusted gross income ("AGI"). In the case of spousal
IRAs, an IRA certificate is issued for each spouse and the working spouse may
contribute a total of $2,250 to both certificates (but no more than $2,000 to
one certificate). For these purposes, a working spouse can make an election to
be treated as having no compensation, thereby allowing the other working spouse
to make a contribution to a spousal IRS.

No contributions are allowed for the tax year in which an individual becomes
age 70 1/2 or any tax year after that year. A working spouse age 70 1/2 or
over, however, can contribute 100% or compensation up to $2,000 to a spousal
IRA until the year the non-working spouse reaches age 70 1/2.

If either the Owner or, if married, the Owner's spouse is covered by another
retirement plan, the IRA deduction phases out between $25,000 and $35,000 of
AGI for single person and $40,000 and $50,000 of AGI for married persons filing
jointly. If the Owner is married, filing separately and covered by a
retirement plan, the IRS deduction phases out between $0 to $10,000 of AGI.

If the Owner is not eligible to deduct part or all of the IRA contribution, he
may still made nondeductible contributions. However, the deductible and
nondeductible contributions combined cannot exceed the $2,000 limit (or the
$2,250 spousal limit).

Deductible and non-deductible IRA contributions in excess of the lesser of (i)
100% of compensation or earned income, or (ii) $2,000 are subject to a 6%
excise tax for the year in which made and for each year thereafter until
withdrawn.

B-9
<PAGE> 60

An individual may elect for each IRA certificate or account to make a tax-free
rollover once a year among individual retirement arrangements (including
rollovers from individual retirement bonds purchase before 1983). An
individual also may make a rollover contribution into an IRA with the proceeds
from a TSA or qualified plan.

Distributions from an IRA must commence by April 1 of the calendar year
following the calendar year in which the Owner reaches age 70 1/2.
Distributions must be made at least annually over the life or life expectancy
of the Owner (or the joint lives or life expectancies of the Owner and a
Beneficiary). The amount required to be distributed each year under this rule
is referred to as the minimum distribution amount.

An Owner who does not receive the minimum distribution amount will be subject
to a 50% excise tax on the difference between the minimum distribution amount
and the amount actually distributed.

An Owner can revoke a Contract issued as an IRA by following the directions on
the cover of the Contract. Because revocation may have adverse tax
consequences, the Owner should consult with a tax expert. If the Contract is
revoked, an Owner may contribute to a new IRA, provided that the eligibility
requirements for IRA contributions are met at that time.

SIMPLIFIED EMPLOYEE PENSION PROGRAM (SEP-IRA). An employer can establish a
SEP-IRA for its employees. Under an employer's SEP-IRA, contributions for each
eligible employee can be made under a Contract issued as an IRA.

INCOME TAX WITHHOLDING. An Owner receiving periodic payments which total $9,120
or more per year will generally be subject to wage-bracket type withholding (as
if such payments were payments of wages by an employer to an employee) unless
the Owner elects no withholding. When a Owner makes no withholding election
whatsoever, withholding will be made as if the Owner is married and claiming
three withholding exemptions.

An Owner receiving a non-periodic distribution (whether a total or partial
distribution) will generally be subject to withholding at a flat 10% rate. In
certain cases, if the distribution is a qualified total distribution (as
defined in the Code), a special withholding table will apply. In both cases
the Owner will be permitted to elect not to have tax withheld.

All Owners receiving periodic and non-periodic payments will be further
notified of the withholding requirements and of their right to make withholding
elections affecting such payments. Special withholding rules apply to United
States citizens residing outside the United States.

Recently enacted mandatory withholding provisions apply to distributions made
from qualified plans after December 31, 1992. Mandatory withholding of 20%
will apply to any distribution eligible for a tax-free rollover if the
distribution is not transferred directly to an IRA.

B-10
<PAGE> 61

FINANCIAL STATEMENTS

SAFECO SEPARATE ACCOUNT C

SAFECO LIFE INSURANCE COMPANY AND SUBSIDIARIES

B-11
<PAGE> 62
December 31, 1994
- -------------------------------------------------------------------------------

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

To the Board of Directors of SAFECO Life Insurance Company and
Participants of SAFECO Separate Account C:

We have audited the accompanying statement of assets and liabilities of SAFECO
Separate Account C (comprising, respectively, the Equity, Growth, Northwest,
Bond, Money Market, International, and Balanced Sub-Accounts), as of December
31, 1994, and the related statement of operations, statement of changes in net
assets and accumulation unit data for the period from February 11, 1994
(commencement of operations) to December 31, 1994. These financial statements
and accumulation unit data are the responsibility of the SAFECO Separate
Account C's management. Our responsibility is to express an opinion on these
financial statements and accumulation unit data based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
accumulation unit data are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of December 31, 1994, by correspondence with the SAFECO Resource
Series Trust and Scudder Variable Life Investment Fund. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements and accumulation unit data referred to
above present fairly, in all material respects, the financial position of each
of the respective Sub-Accounts constituting SAFECO Separate Account C at
December 31, 1994, the results of their operations, the changes in their net
assets, and the accumulation unit data for the period referred to above, in
conformity with generally accepted accounting principles.

/s/ Ernst & Young LLP

Seattle, Washington
January 27, 1995

<PAGE> 63

December 31, 1994
- --------------------------------------------------------------------------------

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
SUB-ACCOUNTS
------------------------------------------------------------------------
As of December 31, 1994 EQUITY GROWTH NW BOND MMKT INT'L BAL
- --------------------------------------------------------------------------------------------------------------
-- (In Thousands, Except Per-Unit Amounts) --
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at value:
SAFECO Resource Series Trust -
Equity Portfolio
217,779 shares at net asset
value of $16.83 per share
(identified cost $3,944) $ 3,665
SAFECO Resource Series Trust -
Growth Portfolio
176,723 shares at net asset
value of $12.98 per share
(identified cost $2,320) $ 2,293
SAFECO Resource Series Trust -
Northwest Portfolio
21,878 shares at net asset
value of $10.24 per share
(identified cost $225) $ 224
SAFECO Resource Series Trust -
Bond Portfolio
21,496 shares at net asset
value of $10.20 per share
(identified cost $230) $ 219
SAFECO Resource Series Trust -
Money Market Portfolio
1,721,216 shares at net
asset value of $1.00 per share
(identified cost $1,721) $ 1,721
Scudder Variable Life Investment
Fund - International Portfolio
135,256 shares at net asset
value of $10.69 per share
(identified cost $1,497) $ 1,446
Scudder Variable Life Investment
Fund - Balanced Portfolio
55,259 shares at net asset
value of $8.97 per share
(identified cost $500) $ 496
------- ------- ------- ------- ------- ------- ------
Total assets 3,665 2,293 224 219 1,721 1,446 496

LIABILITIES:
Mortality and expense risk
charge payable 4 2 -- -- 1 2 1
------- ------- ------- ------- ------- ------- ------
NET ASSETS $ 3,661 $ 2,291 $ 224 $ 219 $ 1,720 $ 1,444 $ 495
======= ======= ======= ======= ======= ======= ======

Accumulation units
outstanding (Note 4) 144 154 22 14 125 138 50
======= ======= ======= ======= ======= ======= ======

Accumulation unit value and
redemption price per unit
(Note 2)
(Net assets divided by
accumulation units outstanding) $25.373 $14.864 $10.134 $15.521 $13.811 $10.498 $9.988
======= ======= ======= ======= ======= ======= ======
</TABLE>

See Notes to Financial Statements

<PAGE> 64

SAFECO SEPARATE ACCOUNT C
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
SUB-ACCOUNTS
---------------------------------------------------------------------

For the Period Ended December 31, 1994

EQUITY* GROWTH* NW* BOND* MMKT* INT'L* BAL*
---------------------------------------------------------------------

-- ($ in Thousands) --
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Income dividends and
capital gain
distributions $ 335 $ 104 $ 1 $ 12 $ 13 $ -- $ 4

Expenses:
Mortality and expense
risk charge (Note 3) 14 7 1 2 4 7 2
------- ------ ------ ------- ------ ------ -------
Net investment income (loss) 321 97 -- 10 9 (7) 2
------- ------ ------ ------- ------ ------ -------
Net realized and unrealized
gain (loss) on investments:
Net realized gain on
investment transactions 7 3 1 -- -- 1 --
Net change in unrealized
appreciation (279) (27) (1) (11) -- (51) (4)
------- ----- ------ ------ ------ ------ -------
Net loss on investments (272) (24) -- (11) -- (50) (4)
------- ----- ------ ------ ------ ------ -------
Net change in net assets
resulting from operations $ 49 $ 73 $ -- $ (1) $ 9 $ (57) $ (2)
======= ====== ====== ======= ====== ====== =======
</TABLE>

*Commencement of Operations was February 11, 1994.

See Notes to Financial Statements
<PAGE> 65
December 31, 1994
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
SUB-ACCOUNTS
-------------------------------------------------------------------

For the Period Ended December 31, 1994

EQUITY* GROWTH* NW* BOND* MMKT* INT'L* BAL*
-------------------------------------------------------------------

-- ($ in Thousands) --
<S> <C> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income (loss) $ 321 $ 97 $ -- $ 10 $ 9 $ (7) $ 2
Net realized gain on
investment transactions 7 3 1 -- -- 1 --
Net change in unrealized
appreciation (279) (27) (1) (11) -- (51) (4)
------- ------ ---- ------ ------ ------ ------
Net change in net assets
resulting from operations 49 73 -- (1) 9 (57) (2)

Net accumulation unit
transactions (Note 4) 3,612 2,218 224 220 1,711 1,501 497
------- ------ ---- ------ ------ ------ ------
Total change in net assets 3,661 2,291 224 219 1,720 1,444 495

Net assets at beginning
of period -- -- -- -- -- -- --
------- ----- ---- ------ ------ ------ ------
Net assets at end of period $ 3,661 $2,291 $224 $ 219 $1,720 $1,444 $ 495
======= ====== ==== ====== ====== ====== ======
</TABLE>

*Commencement of Operations was February 11, 1994.

See Notes to Financial Statements

<PAGE> 66
SAFECO SEPARATE ACCOUNT C
- -------------------------------------------------------------------------------

NOTES TO FINANCIAL STATEMENTS

1. ORGANIZATION

SAFECO Separate Account C is registered under the Investment Company Act of
1940, as amended, as a segregated unit investment account of SAFECO Life
Insurance Company (SAFECO), a wholly-owned subsidiary of SAFECO Corporation.

Separate Account C is divided into sub-accounts which are invested in shares of
a designated portfolio of either the SAFECO Resource Series Trust or the
Scudder Variable Life Investment Fund. Separate Account C became available to
unitholders on February 11, 1994 (commencement of operations).

The five portfolios of the SAFECO Resource Series Trust are available to
unitholders -- the Equity, Growth, Northwest (NW), Bond, and Money Market
(MMKT) portfolios. Two portfolios of the Scudder Variable Life Investment Fund
are also available to unitholders - the International (INTL) and Balanced
(BAL) portfolios.

The assets of Separate Account C are the property of SAFECO and are not
commingled with liabilities arising out of any other business of SAFECO.

2. SIGNIFICANT ACCOUNTING POLICIES

SECURITY VALUATION -- Investments in mutual fund shares are carried in the
statement of assets and liabilities at net asset value as reported by the Fund.
Security transactions are recorded on the trade date. Realized gains or losses
on securities transactions are determined using the First-In First-Out (FIFO)
cost method.

DISTRIBUTIONS -- The net investment income and realized capital gains of
Separate Account C are not distributed, but are retained and reinvested for the
benefit of accumulation unit owners.

FEDERAL INCOME TAX -- Operations of Separate Account C are included in the
federal income tax return of SAFECO, which is taxed as a "life insurance
company" under the Internal Revenue Code. Under current federal income tax
law, no income taxes are payable with respect to operations of Separate Account
C.

UNIT VALUE CALCULATION -- For financial reporting purposes, amounts have been
rounded to the nearest thousand dollars, except for per unit amounts, which may
result in minor rounding differences. Per unit amounts are calculated based on
precise amounts.

3. EXPENSES

A mortality and expense risk charge is deducted by SAFECO from Separate Account
C on a daily basis which is equal, on an annual basis, to 1.25% of the average
daily net asset value of Separate Account C. The mortality risks assumed by
SAFECO arise from its contractual obligation to make annuity payments after the
annuity date for the life of the participant and to waive withdrawal charges in
the event of the death of a participant. The expense risk assumed by SAFECO is
that the costs of administering the contracts and Separate Account C will
exceed the amount received from the administration charge. The mortality and
expense risk charge is guaranteed by SAFECO and cannot be increased.

SAFECO deducts on each Valuation Date an amount which is equal on an annual
basis to .15% of the average daily net asset value of the Separate Account for
costs associated with the administration of the Sub-Accounts. Since this
charge is an asset-based charge, the amount of the charge attributable to a
particular contract may have no relationship to the administrative costs
actually incurred by that contract. SAFECO does not intend to profit from this
charge. This charge will be reduced to the extent that the amount of this
charge is in excess of that necessary to reimburse SAFECO for its
administrative expenses.

<PAGE> 67

December 31, 1994
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(Continued)

3. EXPENSES - Continued

The following expenses are deducted from a contractholder's contract value by
SAFECO and not directly from Separate Account C. As a fee for expenses
associated with the administration of the contract owner's contract value, an
annual charge of $30 is deducted by SAFECO from the accumulated value of each
contract value on the last day of each Contract Year and in the event of a
complete withdrawal, this charge is only deducted from contracts where the
contract value is less than $50,000. SAFECO has the right to increase this fee
to $35. In the event that an owner withdraws all or a portion of the contract
value, a contingent deferred sales charge is imposed on the amount withdrawn in
the first eight certificate years. Any premium tax levied by a state or
government entity with respect to the Separate Account C contract will be
charged against the contract. See the Prospectus "Expense Table" for further
information.

4. ACCUMULATION UNITS

<TABLE>
<CAPTION>
SUB-ACCOUNTS
------------------------------------------------------------------------------------

For the Period Ended December 31, 1994

EQUITY* GROWTH* NW* BOND* MMKT* INT'L* BAL*
------------------------------------------------------------------------------------
-- (In Thousands) --
<S> <C> <C> <C> <C> <C> <C> <C>
Units:
Sales 146 156 22 14 452 140 50
Redemptions (2) (2) -- -- (327) (2) --
------ ------ ---- ---- ------- ------ ----
Net change 144 154 22 14 125 138 50
====== ====== ==== ==== ======= ====== ====
Amounts:
Sales $3,674 $2,247 $225 $223 $ 6,195 $1,525 $497
Redemptions (62) (29) (1) (3) (4,484) (24) --
------ ------ ---- ---- ------- ------ ----
Net change $3,612 $2,218 $224 $220 $ 1,711 $1,501 $497
====== ====== ==== ==== ======= ====== ====
December 31, 1994:
Paid in capital $3,612 $2,218 $224 $220 $ 1,711 $1,501 $497
Par value per unit None None None None None None None
Accumulation units authorized Unlimited Unlimited Unlimited Unlimited Unlimited Unlimited Unlimited

</TABLE>

*Commencement of Operations was February 11, 1994.

<PAGE> 68
SAFECO SEPARATE ACCOUNT C
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(Continued)

5. INVESTMENT TRANSACTIONS

<TABLE>
<CAPTION>
SUB-ACCOUNTS
--------------------------------------------------------------------
EQUITY GROWTH NW BOND MMKT INT'L BAL
- -----------------------------------------------------------------------------------------------------------

-- ($ in Thousands) --

<S> <C> <C> <C> <C> <C> <C> <C>
Purchases for the period ended
December 31, 1994 $4,080 $2,363 $240 $245 $6,448 $1,541 $502
====== ====== ==== ==== ====== ====== ====
Sales for the period ended
December 31, 1994 $ 143 $ 46 $ 16 $ 15 $4,727 $ 45 $ 2
====== ====== ==== ==== ====== ====== ====
</TABLE>

6. ACCUMULATION UNIT DATA
<TABLE>
<CAPTION>
SUB-ACCOUNTS
--------------------------------------------------------------------
EQUITY GROWTH NW BOND MMKT INT'L BAL
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
February 11, 1994 $24.528 $13.910 $10.073 $16.217 $13.526 $10.948 $10.435
December 31, 1994 25.373 14.864 10.134 15.521 13.811 10.498 9.988
</TABLE>

<PAGE> 69

Audited Consolidated Financial Statements

SAFECO Life Insurance Company
and Subsidiaries

For the Year Ended December 31, 1994

<PAGE> 70
SAFECO LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
Report of Independent Auditors . . . . . . . . . . . . . . . . . . . . . . 1

Consolidated Financial Statements

Consolidated Balance Sheet . . . . . . . . . . . . . . . . . . . . . 2

Statement of Consolidated Income . . . . . . . . . . . . . . . . . . 3

Statement of Changes in Stockholder's Equity . . . . . . . . . . . . 4

Statement of Consolidated Cash Flows . . . . . . . . . . . . . . . . 5

Notes to Consolidated Financial Statements. . . . . . . . . . . . . . 7
</TABLE>
<PAGE> 71
REPORT OF INDEPENDENT AUDITORS

Board of Directors
SAFECO Life Insurance Company

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

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

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

As described in Note 1 to the Consolidated Financial Statements, SAFECO Life
Insurance Company and subsidiaries adopted certain new accounting standards in
1994 and 1993 as required by the Financial Accounting Standards Board.

February 10, 1995

<PAGE> 72
SAFECO LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(In Thousands Except Share Amounts)

<TABLE>
<Caption)

December 31
--------------------------
1994 1993
---------- ----------
<S> <C> <C>
ASSETS
Investments (Note 2):
Fixed Maturities Available-for-Sale, at Market Value
(Amortized Cost: 1994--$6,116,932) ............................................. $5,915,662 $ --
Fixed Maturities Held-to-Maturity, at Amortized Cost
(Market Value: 1994--$1,948,309; 1993--$8,112,537) ............................. 2,053,132 7,422,664
Marketable Equity Securities, at Market Value
(Cost: 1994--$15,846; 1993--$14,833) ........................................... 22,747 25,166
First Mortgage Loans on Real Estate:
Nonaffiliates (Less allowance for losses: 1994--$9,511; 1993--$7,000) .......... 418,440 400,219
Affiliates ..................................................................... 134,157 86,871
Real Estate (At cost, less accumulated depreciation:
1994--$412; 1993--$331) ........................................................ 5,149 6,453
Policy Loans ..................................................................... 53,329 50,488
Short-Term Investments (At cost which approximates market) ....................... 62,789 74,573
Investment in Limited Partnerships ............................................... 1,219 1,039
---------- ----------
Total investments ............................................................ 8,666,624 8,067,473
Cash ............................................................................. 26,710 19,210
Accured investment income ........................................................ 141,907 128,212
Accounts and Notes Receivable (Less allowance for doubtful accounts:
1994--$160; 1993--$68) ......................................................... 21,189 27,703
Reinsurance Recoverables ......................................................... 15,517 15,166
Deferred Policy Acquisition Costs ................................................ 247,190 234,200
Other Assets ..................................................................... 6,494 7,100
Deferred Income Tax Recoverable (Includes tax on unrealized
depreciation of investment securities: 1994--$68,028) (Note 9) ................. 30,229 --
Assets Held in Separate Accounts ................................................. 158,266 95,321
---------- ----------
Total Assets ................................................................. $9,314,126 $8,594,385
========== ==========

LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
Policy and Contract Liabilities (Note 5):
Future Policy Benefits ......................................................... $ 155,322 $ 151,488
Policy and Contract Claims ..................................................... 29,050 33,186
Premiums Paid in Advance ....................................................... 8,783 9,957
Funds Held Under Deposit Contracts ............................................. 7,988,456 7,229,439
Other Policyholders' Funds ..................................................... 74,308 71,857
---------- ----------
Total Policy and Contract Liabilities ........................................ 8,255,919 7,495,927
Other Liabilities ................................................................ 89,239 87,797
Federal Income Taxes (Note 9):
Current ........................................................................ 12,464 15,665
Deferred (Includes tax on unrealized appreciation of
investment securities: 1993--$3,617) ......................................... -- 51,570
Liabilities Related to Separate Accounts ......................................... 158,266 95,321
---------- ----------
Total Liabilities ............................................................ 8,515,888 7,746,280
---------- ----------
Stockholder's Equity:
Common Stock, $250 Par Value:
20,000 Shares Authorized, Issued and Outstanding ............................. 5,000 5,000
Additional Paid-In Capital ..................................................... 85,000 85,000
Retained Earnings (Note 7) ..................................................... 834,467 751,277
Unrealized (Depreciation) Appreciation of Investment Securities,
Net of Tax (Note 2) .......................................................... (126,229) 6,828
---------- ----------
Total Stockholder's Equity ................................................. 798,238 848,105
---------- ----------
Total Liabilities and Stockholder's Equity ............................... $9,314,126 $8,594,385
========== ==========
</TABLE>

See Notes to Consolidated Financial Statements

<PAGE> 73
SAFECO LIFE INSURANCE COMPANY AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED INCOME

<TABLE>
<CAPTION>
Year Ended December 31
----------------------------------
1994 1993 1992
-------- ---------- --------
(In Thousands)
<S> <C> <C> <C>
Revenues:
Premiums............................................................ $252,929 $ 279,628 $303,288
Investment income:
Interest on Fixed Maturities....................................... 648,296 612,805 567,458
Interest on Mortgage Loans......................................... 51,135 48,207 48,883
Interest on Short-Term Investments................................. 3,351 3,334 3,112
Dividends from Marketable Equity Securities........................ 1,446 1,817 2,258
Dividends from Redeemable Preferred Stock.......................... 618 -- --
Other Investment Income............................................ 4,375 4,862 4,534
-------- ---------- --------
Total............................................................ 709,221 671,025 626,245

Less Investment Expenses........................................... 3,551 3,303 2,992
-------- ---------- --------
Net Investment Income.............................................. 705,670 667,722 623,253
-------- ---------- --------
Other Revenue...................................................... 9,795 11,850 13,363
Realized Investment Gain........................................... 5,639 53,544 3,377
-------- ---------- --------
Total............................................................ 974,033 1,012,744 943,281
-------- ---------- --------

Benefits and Expenses:
Policy Benefits..................................................... 674,215 675,479 674,139
Commissions......................................................... 84,760 82,262 81,113
Personnel Costs..................................................... 42,439 43,244 42,036
Taxes Other Than Payroll and Income Taxes........................... 7,652 8,477 9,209
Other Operating Expenses............................................ 44,519 40,430 38,447
Amortization of Deferred Policy Acquisition Costs................... 29,407 26,350 18,861
Deferral of Policy Acquisition Costs................................ (43,360) (38,925) (45,257)
-------- ---------- --------
Total............................................................ 839,632 837,317 818,548
-------- ---------- --------
Income before Federal Income Taxes................................... 134,401 175,427 124,733
-------- ---------- --------
Provision (Benefit) for Federal Income Taxes (Note 9):
Current............................................................. 57,365 91,597 71,314
Deferred............................................................ (10,154) (26,135) (22,973)
-------- ---------- --------
Total............................................................ 47,211 65,462 48,341
-------- ---------- --------
Income Before Cumulative Effect of Accounting Changes................ 87,190 109,965 76,392

Cumulative Effect of Accounting Changes (Notes 8 and 9):
Postretirement Benefits (Net of Tax)................................ -- (2,493) --
Income Taxes........................................................ -- 9,092 --
-------- ---------- --------
Net Income........................................................... $ 87,190 $ 116,564 $ 76,392
======== ========== ========
</TABLE>

See Notes to Consolidated Financial Statements

3
<PAGE> 74
SAFECO LIFE INSURANCE COMPANY AND SUBSIDIARIES
STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY

<TABLE>
<CAPTION>
Year Ended December 31
--------------------------------
1994 1993 1992
--------- -------- --------
(In Thousands)
<S> <C> <C> <C>
Common Stock............................... $ 5,000 $ 5,000 $ 5,000
--------- -------- --------
Additional Paid-In Capital................. 85,000 85,000 85,000
--------- -------- --------
Retained Earnings:
Balance at the Beginning of Year......... 751,277 638,713 566,321
Net Income............................... 87,190 116,564 76,392
Dividends to Parent...................... (4,000) (4,000) (4,000)
--------- -------- --------
Balance at the End of Year............... 834,467 751,277 638,713
--------- -------- --------
Unrealized Appreciation (Depreciation)
of Investment Securities, Net of Tax
(Note 2):
Balance at the Beginning of Year....... 6,828 5,968 6,124
Net Effect of Adoption of FASB
Statement 115........................ 279,957 - -
Change in Unrealized Appreciation
(Depreciation)....................... (413,014) 860 (156)
--------- -------- --------
Balance at the End of Year............. (126,229) 6,828 5,968
--------- -------- --------
Stockholder's Equity................. $ 798,238 $848,105 $734,681
========= ======== ========

</TABLE>

See Notes to Consolidated Financial Statements

4
<PAGE> 75
SAFECO LIFE INSURANCE COMPANY AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED CASH FLOWS

Year Ended December 31
---------------------------------------
1994 1993 1992
----------- ------------ -----------
(In Thousands)
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Insurance Premiums Received........................................ $ 233,129 $ 264,254 $ 289,049
Dividends and Interest Received.................................... 641,234 589,916 538,512
Other Operating Receipts........................................... 11,419 11,814 11,535
Insurance Claims and Policy Benefits Paid.......................... (242,523) (270,702) (283,062)
Underwriting, Acquisition and Insurance Operating Costs Paid....... (177,188) (168,809) (167,400)
Income Taxes Paid.................................................. (60,566) (94,169) (58,082)
----------- ----------- -----------
Net Cash Provided by Operating Activities...................... 405,505 332,304 330,552
----------- ----------- -----------
INVESTING ACTIVITIES:
Purchase of:
Fixed Maturities Available-for-Sale.............................. (1,110,154) - -
Fixed Maturities Held-to-Maturity................................ (358,297) (2,106,558) (2,088,419)
Marketable Equity Securities..................................... (407) (132) (239)
Other Investments................................................ (24,381) (53) (73)
Real Estate...................................................... - - (101)
Policy and Nonaffiliated Mortgage Loans.......................... (68,710) (62,156) (70,176)
Affiliated Mortgage Loans........................................ (54,000) - -
Maturities of Fixed Maturities Available-for-Sale.................. 476,410 - -
Maturities of Fixed Maturities Held-to-Maturity.................... 54,564 644,532 573,602
Sale of:
Fixed Maturities Available-for-Sale.............................. 250,227 - -
Fixed Maturities Held-to-Maturity................................ - 675,044 776,352
Marketable Equity Securities..................................... 65 6,323 2,841
Other Investments................................................ 23,992 - 9,499
Real Estate...................................................... 1,885 115 485
Policy and Nonaffiliated Mortgage Loans.......................... 42,038 43,107 30,008
Affiliated Mortgage Loans........................................ 6,714 2,324 36,375
Net (increase) Decrease in Short-Term Investments.................. 11,793 10,343 (40,174)
Other.............................................................. 947 (1,190) (1,963)
----------- ----------- -----------
Net Cash Used in Investing Activities......................... (747,314) (788,301) (771,983)
----------- ----------- -----------

FINANCING ACTIVITIES:
Funds Received Under Deposit Contracts............................. 1,012,164 1,001,880 954,813
Return of Funds Held Under Deposit Contracts....................... (659,697) (555,429) (506,090)
Dividends to Parent................................................ (4,000) (4,000) (3,000)
Net Proceeds from Short-Term Borrowings............................ 842 15,569 -
----------- ----------- -----------
Net Cash Provided by Financing Activities..................... 349,309 458,020 445,723
----------- ----------- -----------
Net Increase in Cash................................................. 7,500 2,023 4,292
Cash at Beginning of Year............................................ 19,210 17,187 12,895
----------- ----------- -----------
Cash at End of Year.................................................. $ 26,710 $ 19,210 $ 17,187
=========== =========== ===========

</TABLE>

For purposes of reporting cash flows, cash consists of balances on hand
and on deposit in banks and financial institutions.

See Notes to Consolidated Financial Statements

5
<PAGE> 76

SAFECO LIFE INSURANCE COMPANY AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED CASH FLOWS-
RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES

<TABLE>
<CAPTION>
Year Ended December 31
------------------------------------
1994 1993 1992
-------- -------- --------
(In Thousands)
<S> <C> <C> <C>
Net Income.................................................... $ 87,190 $116,564 $ 76,392
-------- -------- --------
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Realized Investment Gain.................................. (5,639) (53,544) (3,377)
Amortization of Fixed Maturity Investments................ (12,247) (10,476) (7,036)
Deferred Federal Income Tax Benefit....................... (10,154) (26,135) (22,973)
Interest Expense on Deposit Contracts..................... 405,536 400,122 375,305
Cumulative Effect of Accounting Changes................... - (6,599) -
Other..................................................... (440) 205 171

Changes in:
Future Policy Benefits.................................. 3,834 1,322 3,521
Policy and Contract Claims.............................. (4,136) (5,577) (4,925)
Premiums Paid in Advance................................ (1,174) (476) (1,510)
Deferred Policy Acquisition Costs....................... (12,990) (12,575) (26,396)
Accrued Investment Income............................... (13,695) (9,185) (9,443)
Accrued Interest on Accrual Bonds....................... (41,285) (56,712) (68,509)
Other Receivables....................................... 5,064 (3,937) 1,244
Current Federal Income Taxes............................ (3,201) (2,572) 13,232
Other Assets and Liabilities............................ 1,820 22,966) 3,762
Other Policyholders' Funds.............................. 7,022 (5,518) 1,094
-------- -------- --------
Total Adjustments..................................... 318,315 231,309 254,160
-------- -------- --------
Net Cash Provided by Operating Activities..................... $405,505 $347,873 $330,552
======== ======== ========
</TABLE>

See Notes to Consolidated Financial Statements

<PAGE> 77
SAFECO LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF REPORTING. The consolidated financial statements have been
prepared in accordance with generally accepted accounting principles and
include the accounts of SAFECO Life Insurance Company (the Company) and its
wholly-owned subsidiaries, SAFECO National Life Insurance Company and First
SAFECO National Life Insurance Company of New York. The Company is a
wholly-owned subsidiary of SAFECO Corporation.

All significant intercompany transactions have been eliminated in the
consolidated financial statements. Certain reclassifications have been
made in the 1993 and 1992 financial statements to conform to current
classifications.

ACCOUNTING FOR PREMIUMS. Life and health insurance premiums are reported
as income when collected for traditional individual life policies and when
earned for group and individual health policies. Funds received under
pension deposit contracts, annuities and universal life policies are
recorded as liabilities rather than premium income when received. Revenues
for universal life products consist of front-end loads, mortality charges
and expense charges assessed against individual policyholder account
balances. These loads and charges are recognized as income when earned.

INVESTMENTS. The Company adopted Financial Accounting Standards Board
(FASB) Statement 115, "Accounting for Certain Investments in Debt and
Equity Securities," on January 1, 1994, applying the provisions of the
Statement to Investments held as of, or acquired after that date. See
discussion of new accounting standards on page 9.

Fixed maturity investments (bonds and redeemable preferred stocks) which
the Company has the positive intent and ability to hold to maturity are
classified as held-to-maturity and carried at amortized cost in the balance
sheet. Fixed maturities classified as available-for-sale are carried at
market value, with changes in unrealized gains and losses recorded directly
to stockholder's equity, net of applicable income taxes and deferred policy
acquisition costs valuation allowance. The Company has no fixed maturities
classified as trading.

All marketable equity securities are classified as available-for-sale and
carried at market value, with changes in unrealized gains and losses
recorded directly to stockholder's equity, net of applicable income taxes.

When the collectibility of income on certain investments is considered
doubtful, they are placed on non-accrual status and thereafter interest
income is recognized only when payment is received. Investments that have
declined in market value below cost and for which the decline is judged to
be other than temporary are written down to fair value. Writedowns are
made directly on an individual security basis and are included in realized
investment losses in the Statement of Consolidated Income.

The cost of security investments sold is determined by the "identified
cost" method.

Mortgage loans are carried at outstanding principal balances, less an
allowance for loan losses.

REAL ESTATE AND DEPRECIATION. Income-producing real estate is classified
as an investment. The Company provides straight-line depreciation on its
buildings based upon their estimated useful lives.

Investment real estate that has declined in market value below cost and for
which the decline is judged to be other than temporary is written down to
estimated realizable value. The writedowns are included in realized
investment losses in the Statement of Consolidated Income.

7
<PAGE> 78
SAFECO LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 (continued)

DEFERRED POLICY ACQUISITION COSTS. Acquisition costs, consisting of
commissions and certain other underwriting expenses, which vary with and
are primarily related to the production of new business, are deferred.

Acquisition costs for annuities and universal life policies are amortized
over the lives of the policies in proportion to the present value of
estimated future gross profits. To the extent actual experience differs
from assumptions, and to the extent estimates of future gross profits
require revision, the unamortized balance of deferred policy acquisition
costs is adjusted accordingly. There were no significant revisions made in
1994, 1993 or 1992.

Acquisition costs for traditional individual life insurance policies are
amortized over the premium payment period of the related policies using
assumptions consistent with those used in computing policy benefit
liabilities.

FUTURE POLICY BENEFITS. Liabilities for universal life insurance policies,
deferred annuity and pension deposit contracts are equal to the accumulated
account value of such policies or contracts as of the valuation date.
Liabilities for structured settlement annuities are based on interest rate
assumptions using market rates at issue, graded downward over 40 years to a
range of 5-1/2% to 8-3/4%.

Liabilities for future policy benefits under traditional individual life
insurance policies have been computed on the level premium method using
interest, mortality and persistency assumptions based on Company experience
modified to provide for adverse deviation. Interest assumptions range from
8-1/2% graded to 3-1/4%.

POLICY AND CONTRACT CLAIMS. The liability for policy and contract claims
is established on the basis of reported losses ("case basis" method).
Provision is also made for claims incurred but not reported, based on
historical experience. The estimates for claims incurred but not reported
are continually reviewed and any necessary adjustments are reflected in
current operations.

SEPARATE ACCOUNTS. The Company administers segregated asset accounts for
pension and other clients. The assets of these Separate Accounts, which
consist of common stocks, are the property of the Company. The liabilities
of these Separate Accounts represent reserves established to meet
withdrawal and future benefit payment provisions of contracts with these
pension and other clients. The assets of the Separate Accounts, equal to
the reserves and other contract liabilities of the Separate Accounts, are
not chargeable with liabilities arising out of any other business the
Company may conduct. Investment risks associated with market value changes
are borne by the clients. Deposits, withdrawals, net investment income and
realized and unrealized capital gains and losses on the assets of the
Separate Account are not reflected in the Statement of Consolidated Income.
Management fees and other charges assessed against the contracts are
included in other revenue.

FEDERAL INCOME TAXES. The Company and its subsidiaries file a consolidated
federal income tax return with SAFECO Corporation. Tax payments (credits)
are made to or received from SAFECO Corporation on a separate tax return
filing basis. The Company provides for federal income taxes based on
financial reporting income and deferred federal income taxes on temporary
differences between financial reporting and taxable income.

8
<PAGE> 79
SAFECO LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 (continued)

NEW ACCOUNTING STANDARDS. The Company adopted Financial Accounting
Standards Board (FASB) Statements 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions," and 109, "Accounting for
Income Taxes," in the first quarter of 1993. See the Statement of
Consolidated Income for the effect on income of adoption of Statements 106
and 109. For additional disclosure relating to Statements 106 and 109, see
Note 8 and Note 9, respectively.

The Company adopted FASB Statement 112, "Employers' Accounting for
Postemployment Benefits," effective January 1, 1994. Adoption had no
effect on net income.

The Company adopted FASB Statement 113, "Accounting and Reporting for
Reinsurance of Short-Duration and Long-Duration Contracts," in the first
quarter of 1993. Adoption had no effect on net income. See Note 5 for
disclosures relating to reinsurance.

In May of 1993, the FASB issued Statement 114, "Accounting by Creditors for
Impairment of a Loan," which provides guidance on valuing impaired loans.
The FASB also issued Statement 118, "Accounting by Creditors for Impairment
of a Loan - Income Recognition and Disclosures," in October of 1994, which
amends Statement 114. Both Statements are effective for 1995. Based on
current analysis, the impact on the Company's net income and financial
condition of adopting these Statements is not expected to be significant.

In May of 1993, the FASB issued Statement 115, "Accounting for Certain
Investments in Debt and Equity Securities," which expands the use of fair
value accounting for debt and equity securities. As of January 1, 1994,
the Company adopted the provisions of this Statement for investments held
as of, or acquired after that date. Statement 115 requires that debt and
equity securities be classified as trading, available-for-sale, or
held-to-maturity. Fixed maturity securities that the Company has the
positive intent and ability to hold to maturity (as narrowly defined by
Statement 115) are classified as held-to-maturity and are reported at
amortized cost. Fixed maturity securities classified as available-for-sale
are carried at market value, with changes in unrealized gains and losses
recorded directly to stockholder's equity, net of applicable income taxes
and deferred policy acquisition costs valuation allowance. Under Statement
115, trading securities are carried at market value with immediate
recognition in income of changes in market value. Since the Company does
not have any securities held for trading, the adoption of this Statement
had no effect on net income. All marketable equity securities are
classified as available-for-sale and continue to be carried at market
value, with changes in unrealized gains and losses recorded directly to
stockholder's equity, net of applicable income taxes. As required by
Statement 115, no restatement of prior period amounts has been made. See
Note 2 for details of the effect on stockholder's equity of the adoption of
Statement 115.

The FASB issued Statement 119, "Disclosure about Derivative Financial
Instruments and Fair Value of Financial Instruments," in October of 1994.
Statement 119 requires the presentation of certain disclosures about
derivative financial instruments and is effective for 1994. The Company
has made the additional required disclosures for 1994 in Note 4.

9
<PAGE> 80
SAFECO LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. INVESTMENT SUMMARY

A summary of fixed maturities and marketable equity securities classified
as available-for-sale at December 31, 1994 follows:

<TABLE>
<CAPTION>
Gross Gross Net Estimated
Amortized Unrealized Unrealized Unrealized Market
Cost Gains Losses Gain (Loss) Value
---------- ---------- ---------- ----------- ----------
(In Thousands)
<S> <C> <C> <C> <C> <C>
United States government and
government agencies and authorities .................. $ 664,605 $ 704 $ (28,960) $ (28,276) $ 636,529
States, municipalities and political subdivisions ...... 139,415 4,392 (1,723) 2,669 142,084
Foreign governments .................................... 71,599 1,019 (2,522) (1,503) 70,096
Public utilities ....................................... 1,347,080 21,223 (66,446) (45,223) 1,301,857
All other corporate bonds .............................. 2,133,189 26,027 (97,641) (71,614) 2,061,575
Mortgage-backed securities ............................. 1,745,427 30,508 (87,962) (57,454) 1,687,973
Other fixed maturities ................................. 15,417 208 (77) 131 15,548
---------- ------- --------- --------- ----------
Total fixed maturities classified as
available-for-sale ................................... 6,116,932 84,081 (285,351) (201,270) 5,915,662
Marketable equity securities ........................... 15,846 7,577 (676) 6,901 22,747
---------- ------- --------- --------- ----------
Total investment securities classified as
available-for-sale ................................... $6,132,778 $91,658 $(286,027) (194,369) $5,938,409
========== ======= ========= ==========
Deferred policy acquisition costs valuation allowance ....................................... -
Applicable federal income tax ............................................................... 68,140
---------
Unrealized depreciation of investment securities,
net of tax, included in stockholder's equity .............................................. $(126,229)
=========
</TABLE>

A summary of fixed maturities classified as held-to-maturity at December
31, 1994 follows:

</TABLE>

A summary of all fixed maturities at December 31, 1993 follows:

<TABLE>
<CAPTION>
Gross Gross Net Estimated
Amortized Unrealized Unrealized Unrealized Market
Cost Gains Losses Gain Value
---------- ---------- ---------- ----------- ----------
(In Thousands)
<S> <C> <C> <C> <C> <C>
United States government and
government agencies and authorities .................. $ 684,679 $ 66,049 $ (210) $ 65,839 $ 750,518
States, municipalities and political subdivisions ...... 162,344 25,749 (39) 25,710 188,054
Foreign governments .................................... 219,355 31,586 (157) 31,429 250,784
Public utilities ....................................... 1,625,212 192,918 (2,548) 190,370 1,815,582
All other corporate bonds .............................. 2,532,550 236,054 (14,595) 221,459 2,754,009
Mortgage-backed securities ............................. 2,198,155 169,045 (13,997) 155,048 2,353,203
Other fixed maturities ................................. 369 35 (17) 18 387
---------- -------- -------- -------- ----------
Total fixed maturities ............................... $7,422,664 $721,436 $(31,563) $689,873 $8,112,537
========== ======== ======== ======== ==========
</TABLE>

<PAGE> 81
SAFECO LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2 (continued)

As discussed in Note 1, the Company adopted the provisions of FASB
Statement 115 as of January 1, 1994. The net effect on stockholder's
equity of the adoption of Statement 115 was an increase of $279,957,000 as
of January 1, 1994. The net increase was comprised of the following
amounts: aggregate market value in excess of amortized cost of fixed
maturities classified as available-for-sale of $458,471,000, less deferred
policy acquisition costs valuation allowance of $27,768,000 and deferred
income taxes at 35% of $150,746,000.

The aggregate market value of marketable equity securities was in excess
of cost by $10,333,000 at December 31, 1993. This amount included gross
unrealized gains of $10,354,000 and gross unrealized losses of $21,000.

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

<TABLE>
<CAPTION>
Estimated
Amortized Market
Fixed Maturities Classified as Available-for-Sale Cost Value
---------- ----------
(In Thousands)
<S> <C> <C>
Due in one year or less............................. $ 98,510 $ 98,700
Due after one year through five years............... 1,116,030 1,088,664
Due after five years through ten years.............. 1,601,463 1,534,146
Due after ten years................................. 1,555,502 1,506,179
Mortgage-backed securities.......................... 1,745,427 1,687,973
---------- ----------
Total..................................... $6,116,932 $5,915,662
========== ==========

Estimated
Amortized Market
Fixed Maturities Classified as Held-to-Maturity Cost Value
---------- ----------
(In Thousands)
<S> <C> <C>
Due in one year or less............................. $ 113 $ 113
Due after one year through five years............... 5,000 4,600
Due after five years through ten years.............. 3 4
Due after ten years................................. 1,526,587 1,466,861
Mortgage-backed securities.......................... 521,429 476,731
---------- ----------
Total..................................... $2,053,132 $1,948,309
========== ==========
</TABLE>

At December 31, 1994 and 1993, the Company held below investment grade
fixed maturities of $174 million and $152 million at amortized cost,
respectively. The respective market values of these investments were
approximately $156 million and $152 million. These holdings amounted to
2.0% of the Company's investments in fixed maturities at December 31, 1994
and 1993.

The carrying value of investments in fixed maturities and mortgage loans
that did not produce income during the year ended December 31, 1994 is
less than one percent of the total of such investments.

11
<PAGE> 82
SAFECO LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2 (continued)

Certain bonds amounting to $4,161,000 and $4,066,000 at December 31, 1994
and 1993, respectively, were on deposit with various regulatory
authorities to meet requirements of insurance and financial codes.

At December 31, 1994 and 1993, mortgage loans constituted approximately
5.9% and 5.7% of total assets, respectively, and are secured by first
mortgage liens on income-producing commercial real estate, primarily in
the retail, industrial and office building sectors. The majority of the
properties are located in the western United States, with 43.7% of the
total in California. Individual loans generally do not exceed $5 million.
For each of these years, less than 2% of the loans were non-performing.

The proceeds from sales of investment securities and related gains and
losses for 1994 are as follows:

<TABLE>
<CAPTION>
Year Ended December 31, 1994
---------------------------------------------------------
Fixed Maturities Fixed Maturities Marketable
Available-for-Sale Held-to-Maturity Equity Securities
------------------ ---------------- -----------------
(In Thousands)
<S> <C> <C> <C>
Proceeds from sales........................................... $250,227 $ - $ 65
======== ============ =====
Gross realized gains on sales................................. $ 12,994 $ - $ 115
Gross realized losses on sales................................ (1,533) - (224)
-------- ------------ -----
Realized gains (losses) on sales.................... 11,461 - (109)

Other (including net gain on calls and redemptions)........... 2,475 - -
Writedowns (including writedowns on
securities subsequently sold)............................... (4,804) - -
-------- ------------ -----
Total realized gain (loss).................................... $ 9,132 $ - $(109)
======== ============ =====

</TABLE>

The proceeds from sales of investments in fixed maturities and related
gains and losses for 1993 and 1992 are as follows:

<TABLE>
<CAPTION>
Year Ended December 31
-----------------------
1993 1992
--------- --------
(In Thousands)
<S> <C> <C>
Proceeds from sales................................................................. $675,044 $776,352
======== ========

Gross realized gains on sales....................................................... $ 75,895 $ 40,456
Gross realized losses on sales...................................................... (20,653) (23,189)
-------- --------
Realized gains on sales........................................................ 55,242 17,267

Other (including net gain on calls and redemptions)................................. 12,749 6,593
Writedowns (including writedowns on securities subsequently sold)................... (11,665) (16,592)
-------- --------
Total realized gain................................................................. $ 56,326 $ 7,268
======== ========
</TABLE>

12
<PAGE> 83
SAFECO LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2 (continued)

The following summarizes the realized gains and losses, the changes in
unrealized gains and losses, and applicable income taxes on all
investments:

<TABLE>
<CAPTION>
Year Ended December 31
----------------------------
1994 1993 1992
------- ------- -------
(In Thousands)
<S> <C> <C> <C>
Realized gains (losses):
Fixed maturities........................................ $ 9,132 $56,326 $ 7,268
Marketable equity securities............................ (109) 2,063 175
First mortgage loans on real estate..................... (3,000) (4,336) (3,555)
Real estate............................................. (184) (509) (511)
Short-term investments.................................. (200) - -
------- ------- -------
Realized gain before federal income taxes....... $ 5,639 $53,544 $ 3,377
======= ======= =======
</TABLE>

<TABLE>
<CAPTION>
Year Ended December 31
----------------------------------
1994 1993 1992
--------- --------- ---------
(In Thousands)
<S> <C> <C> <C>
Increase (decrease) in unrealized appreciation of:
Fixed maturities classified as available-for-sale...... $(201,270) $ - $ -
Marketable equity securities........................... (3,432) 1,291 (236)
Applicable federal income tax (expense) benefit........ 71,645 (431) 80
--------- ------ -----
Net change in unrealized appreciation
(depreciation)............................... $(133,057) $ 860 $(156)
========= ====== =====
</TABLE>

3. COMMITMENTS AND CONTINGENCIES

The Company is obligated under a real estate lease with an affiliate,
General America Corporation, which expires in 2010. The minimum annual
rental commitments under this obligation are $2,211,000. At December 31,
1994, unfunded mortgage loan commitments approximated $9,360,000. The
Company had no other material commitments at December 31, 1994.

In January 1995, a class action seeking actual and punitive damages, DeVoy
v. SAFECO Life Insurance Company, Case No. 684407 in the Superior Court of
California, County of San Diego, was brought against the Company by an
owner of a qualified pension annuity contract. With respect to such
contracts, the plaintiffs have challenged both the representations as to
interest rates and the calculation of interest. The Company is defending
against the action.

13
<PAGE> 84
SAFECO LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4. FINANCIAL INSTRUMENTS

ESTIMATED FAIR VALUES. Fair value amounts have been determined using
available market information and appropriate valuation methodologies.
However, considerable judgment is required in developing the estimates of
fair value. Accordingly, these estimates are not necessarily indicative of
the amount that could be realized in a current market exchange. The use of
different market assumptions and/or estimating methodologies may have a
material effect on the estimated fair value amounts.

Carrying value is a reasonable estimate of fair value for cash, policy
loans, short-term investments, accounts receivable and other liabilities.

Fair value amounts for investments in fixed maturities and marketable
equity securities are the same as market value. Market value generally
represents quoted market prices for securities traded in the public market
place or analytically determined values for securities not publicly traded.

The fair values of mortgage loans have been estimated by discounting the
projected cash flows using the current rate at which loans would be made to
borrowers with similar credit ratings and for the same maturities.

The fair value of investment contracts with defined maturities is estimated
by discounting projected cash flows using rates that would be offered for
similar contracts with the same remaining maturities. For investment
contracts with no defined maturity, fair value is estimated to be the
present surrender value. These investment contracts are included in Funds
Held Under Deposit Contracts.

Other insurance-related financial instruments are exempt from fair value
disclosure requirements.

Estimated fair values of financial instruments at December 31 are as
follows:

<TABLE>
<CAPTION> 1994 1993
-------------------------- ------------------------
Carrying Estimated Carrying Estimated
Amount Fair Value Amount Fair Value
----------- ----------- ---------- ----------
(In Thousands)
<S> <C> <C> <C> <C>
Financial assets:
Fixed maturities available-for-sale.............. $5,915,662 $5,915,662 $ - $ -
Fixed maturities held-to-maturity................ 2,053,132 1,948,309 7,422,664 8,112,537
Marketable equity securities..................... 22,747 22,747 25,166 25,166
Mortgage loans................................... 552,597 540,000 487,090 529,000

Financial liabilities:
Funds held under deposit contracts............... 7,988,456 7,678,000 7,229,439 7,531,000
</TABLE>

DERIVATIVE FINANCIAL INSTRUMENTS. The Company's investments in
mortgage-backed securities of $2.2 billion are primarily residential
collateralized mortgage obligations and pass-throughs ("CMOs") . CMOs,
while technically defined as derivative instruments, are exempt from FAS
119 disclosure requirements. The Company's investment in CMOs comprised of
the riskier, highly-volatile type (e.g., interest only, inverse floaters,
etc.) has been intentionally limited to only a small amount (i.e., less
than 1% of total CMOs at December 31, 1994).

The Company's involvement in other investment-type derivatives is also,
intentionally, of a very limited nature. Such derivatives include
currency-linked bonds and fixed-rate loan commitments. Individually, and
in the aggregate, these derivatives are not material and thus no additional
disclosures are warranted.

14
<PAGE> 85
SAFECO LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5. POLICY AND CONTRACT LIABILITIES

REINSURANCE. The Company protects itself from excessive losses by ceding
reinsurance to other companies, using automatic and facultative treaties.
Reinsurance contracts do not relieve the Company from its obligations to
policyholders. A continuing liability exists in the event a reinsurance
company is unable to meet its obligations to the Company. The financial
condition of its reinsurers is evaluated by the Company to minimize its
exposure to losses from reinsurer insolvencies.

The balance sheet caption "Reinsurance Recoverables" is comprised of the
following amounts:

<TABLE>
<CAPTION>
December 31
-------------------
1994 1993
------- -------
(In Thousands)
<S> <C> <C>
Unpaid losses and adjustment expense............. $ 646 $ 132
Paid claims...................................... 506 1,037
Life policy liabilities.......................... 14,033 13,821
Other reinsurance recoverable.................... 332 176
------- -------
Total reinsurance recoverables............. $15,517 $15,166
======= =======
</TABLE>

The effects of reinsurance on the premium and policy benefit amounts in the
Statement of Consolidated Income are as follows:

<TABLE>
<CAPTION>
Year Ended December 31
-------------------------------
1994 1993 1992
------- ------- -------
(In Thousands)
<S> <C> <C> <C>
Reinsurance Ceded:

Premiums................................ $(9,060) $(9,576) $(9,192)
======= ======= =======
Policy benefits......................... $(5,588) $(7,441) $(6,463)
======= ======= =======
Reinsurance Assumed:

Premiums................................ $ 327 $ 544 $ 1,936
======= ======= =======
Policy benefits......................... $ 3,421 $ 3,474 $ 4,920
======= ======= =======

</TABLE>

POLICY AND CONTRACT CLAIMS. Loss reserves and health claims, which are
generally incurred and paid in full within a one-year period, amount to
less than 1% of total policy and contract liabilities. Therefore, no
additional disclosures are warranted.

15
<PAGE> 86
SAFECO LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6. STATUTORY BASIS INFORMATION

The Company and its subsidiaries are required to file annual statements
with state regulatory authorities prepared on an accounting basis as
prescribed or permitted by such authorities (statutory basis). Prescribed
statutory accounting practices include state laws, regulations, and general
administrative rules, as well as a variety of publications of the National
Association of Insurance Commissioners (NAIC). Permitted statutory
accounting practices encompass all accounting practices that are not
prescribed.

Statutory net income differs from income reported in accordance with
generally accepted accounting principles primarily because policy
acquisition costs are expensed when incurred, reserves are based on
different assumptions and income tax expense reflects only taxes paid or
currently payable.

Statutory net income and stockholder's equity, by company, are as follows:

<TABLE>
<CAPTION>
Year Ended December 31
----------------------------
1994 1993 1992
-------- ------- -------
(In Thousands)
<S> <C> <C> <C>
Statutory Net income:
SAFECO Life Insurance Company....................... $47,280 $17,724 $29,115
SAFECO National Life Insurance Company.............. 1,242 1,192 1,370
First SAFECO National Life Insurance Company
of New York....................................... 108 225 144
------- ------- -------
Total........................................... $48,630 $19,141 $30,629
======= ======= =======
</TABLE>

<TABLE>
<CAPTION>
December 31
------------------------------
1994 1993 1992
-------- -------- --------
(In Thousands)
<S> <C> <C> <C>
Statutory Stockholder's Equity:
SAFECO Life Insurance Company........................ $391,328 $357,081 $339,119
SAFECO National Life Insurance Company............... 15,849 16,228 16,651
First SAFECO National Life Insurance Company
of New York........................................ 9,644 9,569 9,354
-------- -------- --------
Total............................................ $416,821 $382,878 $365,124
======== ======== ========
</TABLE>

The Company has received written approval from the Washington State
Insurance Department to treat certain loans (all made at market rates) to
related SAFECO Corporation subsidiaries as admitted assets. The allowance
of such loans has not materially enhanced surplus at December 31, 1994.

7. DIVIDEND RESTRICTIONS

Insurance companies are restricted by certain states as to the amount of
dividends they may pay within a given calendar year to their parent without
regulatory consent. That restriction is the greater of statutory net gain
from operations for the previous year or 10% of policyholder surplus at the
close of the previous year, subject to a maximum limit equal to statutory
earned surplus. The amount of retained earnings available for the payment
of dividends to SAFECO Corporation without prior regulatory approval was
$51,033,000 at December 31, 1994.

16
<PAGE> 87
SAFECO LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8. EMPLOYEE BENEFIT PLANS

SAFECO Corporation and subsidiary companies (the Companies) administer
defined contribution, defined benefit and profit sharing bonus plans
covering substantially all employees. The defined contribution plans
include profit sharing retirement plans and a savings plan. Benefits are
earned under the defined benefit plan for each year of service after 1988,
based on the employee's compensation level plus a stipulated rate of return
on the benefit balance. It is SAFECO Corporation's policy to fund the
defined benefit plan on a current basis to the full extent deductible under
federal income tax regulations. The cost of these plans to the Company was
$6,329,000, $7,962,000 and $6,519,000 for the years ended December 31,
1994, 1993 and 1992, respectively.

The Companies also provide certain healthcare and life insurance benefits
("other postretirement benefits") for retired employees. Substantially all
employees may become eligible for these benefits if they reach retirement
age while working for the Companies. The cost of these benefits is shared
with the retiree.

Effective January 1, 1993, the Company adopted FASB Statement 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions."
Under Statement 106, the Company now accrues for other postretirement
benefits during the years that employees provide services. Prior to
adoption of Statement 106, other postretirement benefits were accounted for
on a pay-as-you-go (cash) basis. The transition obligation (i.e., the
accumulated postretirement benefit obligation) of $3,777,000 was recorded
as a cumulative effect adjustment in the first quarter of 1993 which, net
of tax, resulted in a reduction of net income of $2,493,000.

Components of the net periodic other postretirement benefit cost are as
follows:

Year Ended December 31
----------------------
1994 1993
--------- --------
(in Thousands)
<S> <C> <C>
Service cost-benefits earned during the period.................... $153 $151
Interest cost on accumulated postretirement benefit
obligation...................................................... 283 318
Actual return on plan assets...................................... 3 (4)
Net amortization and deferral..................................... (7) 4
---- ----
Total....................................................... $432 $469
==== ====
</TABLE>

Under the cash basis of accounting for these other postretirement benefits,
the expense for the year ended December 31, 1992 was $109,000.

17
<PAGE> 88
SAFECO LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 8 (continued)

The following table summarizes the funded status of the plan:

<TABLE>
<CAPTION>
December 31
--------------------
1994 1993
------ ------
(In Thousands)
<S> <C> <C>
Accumulated postretirement benefit obligation (APBO):
Retirees................................................................. $1,332 $1,578
Fully eligible active plan participants.................................. 496 725
Other active plan participants........................................... 1,245 1,555
------ ------
Total APBO........................................................... 3,073 3,858
Less: plan assets at fair value............................................ 91 66
------ ------
Funded status.............................................................. 2,982 3,792
Unrecognized gain.......................................................... 1,424 301
------ ------
Accrued postretirement benefit cost recorded on the balance sheet.......... $4,406 $4,093
====== ======
</TABLE>

Other postretirement benefit cost is determined using actuarial assumptions
at the beginning of the year. The funded status is determined using
assumptions at the end of the year. The discount rate used was 8-1/2%,
7-1/2% and 8% at December 31, 1994, December 31, 1993 and January 1, 1993,
respectively. The accumulated postretirement benefit obligation at
December 31, 1994 was determined using a healthcare cost trend rate of 12%
for 1995, declining by 1% per year to 6% and remaining at that level
thereafter. The ultimate trend rate of 6% represents a 1% reduction from
the 7% rate used for the prior year's valuation. A one percentage point
increase in the assumed healthcare cost trend rate for each year would
increase the accumulated other postretirement benefit obligation as of
December 31, 1994 by $341,000 and the annual net periodic other
postretirement benefit cost for the year then ended by $71,000.

18
<PAGE> 89
SAFECO LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9. INCOME TAXES

As of January 1, 1993, the Company adopted the liability method of
accounting for income taxes pursuant to FASB Statement 109, "Accounting for
Income Taxes." This accounting change was implemented through a cumulative
effect adjustment which reduced the net deferred tax liability (and
increased net income in the first quarter of 1993) by $9,092,000. Prior
year financial statements and related disclosures which follow the
guidelines provided in APB 11 were not restated. Under the liability
method, deferred tax assets and liabilities are determined based on the
differences between their financial reporting and their tax bases and are
measured using the enacted tax rates.

Differences between income tax computed by applying the U.S. federal income
tax rate of 35% in 1994 and 1993 and 34% in 1992 to income before income
taxes and the provision for federal income taxes are as follows:

<TABLE>
<CAPTION>
Year Ended December 31
---------------------------------------
1994 1993 1992
------- ------- -------
(In Thousands)
<S> <C> <C> <C>
Computed "expected" tax expense ................................ $47,040 $61,399 $42,409
Dividends received deduction ................................... (64) (52) (58)
Tax exempt interest ............................................ (8) (9) (11)
Provision for settlement of prior years' tax obligation ........ - 2,000 6,000
Federal tax rate change ........................................ - 2,040 -
Other .......................................................... 243 84 1
------- ------- -------
Income tax expense ......................................... $47,211 $65,462 $48,341
======= ======= =======
Percent of income tax expense to income before tax ............. 35.1% 37.3% 38.8%
======= ======= =======
</TABLE>

The tax effect of temporary differences which give rise to the deferred tax
assets and deferred tax liabilities are as follows:

<TABLE>
<CAPTION>
December 31
-----------------------
1994 1993
-------- -------
(In Thousands)
<S> <C> <C>
Deferred tax assets:
Discounted loss and adjustment expense reserves .............. $ 1,679 $ 1,026
Unearned premium reserves .................................... 2,012 1,699
Adjustment to life policy liabilities ........................ 20,444 7,838
Capitalization of policy acquisition costs -- 1990 Tax Act ... 18,263 14,105
Postretirement benefits ...................................... 1,542 1,435
Realized capital gains ....................................... 5,422 6,310
Guarantee fund assessment .................................... 3,250 2,282
Unrealized depreciation of investment securities ............. 68,028 -
Other ........................................................ 1,343 1,569
-------- -------
Total deferred tax assets .................................. 121,983 36,264
-------- -------
Deferred tax liabilities:
Deferred policy acquisition costs ............................ 86,798 82,048
Bond discount accrual ........................................ 4,133 2,164
Unrealized appreciation of marketable equity securities ...... - 3,617
Other ........................................................ 823 5
-------- -------
Total deferred tax liabilities ........................... 91,754 87,834
-------- -------
Net deferred tax (asset) liability ....................... $(30,229) $51,570
======== =======
</TABLE>

19
<PAGE> 90
SAFECO LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 9 (continued)

The deferred tax benefit of $10,154,000 for 1994 represents the decrease in
the net deferred tax liability of $81,799,000 excluding a decrease of
$71,645,000 related to unrealized depreciation of investment securities.

The deferred federal income tax benefit of $26,135,000 for 1993 represents
a decrease in the net deferred federal income tax liability of $25,704,000
excluding an increase of $431,000 related to unrealized appreciation of
marketable equity securities. The tax related to the increase in
appreciation of marketable equity securities approximated $543,000 during
1993. Of that amount, $112,000, which related to the 1% increase in the
federal income tax rate, was charged directly to income with the remainder
charged directly to stockholder's equity.

Deferred federal income taxes for 1992 were provided on the difference
between the Company's taxable income and income for financial reporting
purposes according to the guidelines provided in APB 11. The components of
the deferred federal income tax benefit using these guidelines are as
follows:

<TABLE>
<CAPTION>
Year Ended
December 31,
1992
------------
(In Thousands)
<S> <C>
Increase in deferred policy acquisition costs................ $ 8,975
Capitalization of policy acquisition costs - 1990 Tax Act.... (4,162)
Basis difference on capital gains............................ (280)
Adjustment to policy reserves................................ (27,393)
Accrual of market discount................................... 1,179
Other........................................................ (1,292)
--------
Deferred federal income tax benefit..................... $(22,973)
========

</TABLE>

20
<PAGE> 91
SAFECO LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10. SEGMENT DATA

<TABLE>
<CAPTION>
Year Ended December 31, 1994
------------------------------------
Financial Employee
Services Benefits Total
--------- -------- --------
(in Thousands)
<S> <C> <C> <C>
Revenue:
Premiums and Other (Including $27,955 of financial
services revenue received from affiliates)............... $ 42,805 $219,919 $262,724
Identifiable Investment Income.............................. 395,127 245,909 641,036
Investment Income Allocated................................. 39,909 24,725 64,634
Identifiable Realized Gain from Investments................. 6,744 1,267 8,011
Realized Loss from Investments Allocated.................... (1,463) (909) (2,372)
-------- -------- --------
Total Revenue........................................... $483,122 $490,911 $974,033
======== ======== ========
Income Before Income Taxes.................................... $ 70,200 $ 64,201 $134,401
======== ======== ========
</TABLE>

<TABLE>
<CAPTION>
December 31, 1994
--------------------------------------
FinanciaL Employee
Services Benefits Total
--------- -------- ----------
(in Thousands)
<S> <C> <C> <C>
Identifiable Assets:
Deferred Policy Acquisition Costs........................... $ 151,614 $ 95,576 $ 247,190
Policy Loans................................................ 28,467 24,862 53,329
Invested Assets............................................. 4,859,921 2,874,141 7,734,062
Other....................................................... 153,120 248,641 401,761
Invested Assets Allocated..................................... 542,890 336,343 879,233
Other Assets Allocated........................................ (880) (569) (1,449)
---------- ---------- ----------
Total Assets............................................ $5,735,132 $3,578,994 $9,314,126
========== ========== ==========
Amortization of Deferred Policy Acquisition Costs............. $ 9,914 $ 19,493 $ 29,407
========== ========== ==========
</TABLE>

A major portion of investment income, realized gains or losses and
assets is specifically identifiable with an industry segment. The
remainder of these amounts has been allocated in proportion to the
investment income identified with each segment.

21
<PAGE> 92
SAFECO LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 10 (continued)
<TABLE>
<CAPTION>

Year Ended December 31, 1993
-------------------------------------
Financial Employee
Services Benefits Total
---------- ---------- ----------
(In Thousands)
<S> <C> <C> <C>
Revenue:
Premiums and Other (including $23,195 of financial services revenue
received from affiliates)................................................ $ 40,000 $ 251,478 $ 291,478
Identifiable Investment Income............................................. 352,076 251,740 603,816
Investment Income Allocated................................................ 38,408 25,498 63,906
Identifiable Realized Gain (Loss) from Investments......................... 64,442 (6,567) 57,875
Realized Loss from Investments Allocated................................... (2,956) (1,375) (4,331)
---------- ---------- ----------
Total Revenue............................................... $ 491,970 $ 520,774 $1,012,744
========== ========== ==========
Income Before Income Taxes................................................. $ 117,287 $ 58,140 $ 175,427
========== ========== ==========
</TABLE>

December 31, 1993
-------------------------------------
Financial Employee
Services Benefits Total
---------- ---------- ----------
(In Thousands)
<S> <C> <C> <C>
Identifiable Assets:
Deferred Policy Acquisition Cost........................................... $ 137,479 $ 96,721 $ 234,200
Policy Loans............................................................... 26,181 24,307 50,488
Invested Assets............................................................ 4,253,688 2,906,514 7,160,202
Other...................................................................... 98,972 159,396 258,368
Invested Assets Allocated...................................................... 513,921 342,861 856,782
Other Assets Allocated......................................................... 21,160 13,185 34,345
---------- ---------- ----------
Total Assets................................................... $5,051,401 $3,542,984 $8,594,385
========== ========== ==========
Amortization of Deferred Policy Acquisition Costs.............................. $ 7,395 $ 18,955 $ 26,350
========== ========== ==========

</TABLE>

22
<PAGE> 93
SAFECO LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 10 (continued)

<TABLE>
<CAPTION>
Year Ended December 31, 1992
------------------------------------
Financial Employee
Services Benefits Total
---------- ---------- ----------
(In Thousands)
<S> <C> <C> <C>
Revenue:
Premiums and Other (including $20,517 of financial
services revenue received from affiliates)................ $ 39,010 $ 277,641 $ 316,651
Identifiable Investment Income................................. 304,764 250,969 555,733
Investment Income Allocated.................................... 40,158 27,362 67,520
Identifiable Realized Gain (Loss) from Investments............. 11,518 (8,659) 2,859
Realized Gain (Loss) from Investments Allocated................ (237) 755 518
---------- ---------- ----------

Total Revenue............................................ $ 395,213 $ 548,068 $ 943,281
========== ========== ==========

Income Before Income Taxes......................................... $ 66,030 $ 58,703 $ 124,733
========== ========== ==========

December 31, 1992
------------------------------------
Financial Employee
Services Benefits Total
---------- ---------- ----------
(In Thousands)
<S> <C> <C> <C>
Identifiable Assets:
Deferred Policy Acquisition Cost............................... $ 124,459 $ 97,166 $ 221,625
Policy Loans................................................... 26,245 24,210 50,455
Invested Assets................................................ 3,524,626 2,751,097 6,275,723
Other.......................................................... 78,986 118,172 197,158
Invested Assets Allocated.......................................... 481,718 341,961 823,679
Other Assets Allocated............................................. 20,920 12,623 33,543
---------- ---------- ----------
Total Assets............................................ $4,256,954 $3,345,229 $7,602,183
========== ========== ==========

Amortization of Deferred Policy Acquisition Costs.................. $ 4,940 $ 13,921 $ 18,861
========== ========== ==========
</TABLE>

A major portion of investment income, realized gains or losses and assets
is specifically identifiable with an industry segment. The remainder of
these amounts has been allocated in proportion to the investment income
identified with each segment.

23
<PAGE> 94

PART C

OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements.

Included in Part B of the Registration Statement:

SAFECO Separate Account C

Report of Ernst & Young LLP, Independent Auditors

Statement of Assets and Liabilities at December 31,
1994

Statement of Operations for the Period Ended December
31, 1994

Statement of Changes in Net Assets for the Year Ended
December 31, 1994

Schedule of Investments as of December 31, 1994

Notes to Financial Statements

Statements of SAFECO Life Insurance Company and Subsidiaries
(Depositor)

Report of Independent Auditors

Consolidated Balance Sheet at December 31, 1994 and
1993

Statement of Consolidated Income for the Years Ended
December 31, 1994, 1993, and 1992

Statement of Changes in Stockholder's Equity for the
Years Ended December 31, 1994, 1993, and 1992

Statement of Consolidated Cash Flows for the Years
Ended December 31, 1994, 1993, and 1992

Notes to Consolidated Financial Statements

C-1
<PAGE> 95
(b) Exhibits:

27. Financial Data Schedule.

99.1. Amended and Restated Resolution of the Board of
Directors of SAFECO Life Insurance Company
authorizing the establishment of SAFECO Separate
Account C.

99.2. Not applicable.

99.3. Principal Underwriter's Agreement between SAFECO Life
Insurance Company and SAFECO Securities, Inc., dated
April 29, 1994.

99.4.a. Form of Variable Annuity Contract.

99.4.b. Form of Fixed Account Rider.

99.4.c. Form of IRA Endorsement.

99.5. Form of application used with Variable Annuity
Contract.

99.6.a. Articles of Incorporation of SAFECO Life Insurance
Company.

99.6.b. By-Laws of SAFECO Life Insurance Company.

99.7. None.

* 99.8.a. Participation Agreement by and among SAFECO Life
Insurance Company, Investment Management Series, on
behalf of the Corporate Bond Fund, Federated
Securities Corp. and Federated Advisers.

* 99.8.b. Participation Agreement by and among SAFECO Life
Insurance Company, Investment Management Series, on
behalf of the Utility Fund, Federated Securities
Corp. and Federated Advisers.

* 99.8.c. Participation Agreement by and among SAFECO Life
Insurance Company, Lexington Natural Resources Trust,
and Lexington Management Corporation.

* 99.8.d. Participation Agreement by and among SAFECO Life
Insurance Company, Lexington Emerging Markets Fund,
Inc., and Lexington Management Corporation.

* 99.8.e. Participation Agreement by and among SAFECO Life
Insurance Company, TCI Portfolios, Inc. and and/or
Adviser for TCI Balanced Fund.

C-2
<PAGE> 96
* 99.8.f. Participation Agreement by and among SAFECO Life
Insurance Company, TCI Portfolios, Inc. and Adviser
for TCI International Fund.

* 99.8.g. Participation Agreement by and among SAFECO Life
Insurance Company, Wanger U.S. Small Cap Fund, and
Adviser Wanger Asset Management, L.P.

99.9. Opinion and consent of counsel as to the legality of
the securities being registered.

99.10. Consent of Independent Auditors

99.11. Not Applicable.

99.12. Not applicable.

99.13. Not applicable.

_______________________________

* To be filed by amendment.

C-3
<PAGE> 97
Item 25. Directors and Officers of SAFECO Life Insurance Company

Set forth below is a list of each director and officer of SAFECO Life
Insurance Company ("SAFECO") who is engaged in activities relating to
SAFECO Separate Account C or the variable annuity contracts offered
through SAFECO Separate Account C. Unless otherwise indicated the
principal business address of all officers or directors listed is
15411 N. E. 51st Street, Redmond, Washington 98052.

<TABLE>
<CAPTION>
Name Position with SAFECO
---- --------------------
<S> <C> <C>
* Roger H. Eigsti Director, Chairman of the Board

Richard E. Zunker Director and President

* Boh A. Dickey Director and Executive Vice
President

John P. Fenlason Senior Vice President

Roger F. Harbin Senior Vice President

* Rod A. Pierson Director, Senior Vice President
and Secretary

* Donald S. Chapman Director

* Dan D. McLean Director

* James W. Ruddy Director

* Robert W. Swegle Director

F. Gregory Clarke Vice President

James T. Flynn Vice President, Controller
and Assistant Secretary

Michael H. Kinzer Vice President and Chief Actuary

* Ron L. Spaulding Director, Vice President

* Michael C. Knebel Vice President and Treasurer

William C. Huff Actuary
</TABLE>

C-4
<PAGE> 98
<TABLE>
<CAPTION>
Name Position with SAFECO
---- --------------------
<S> <C>
George C. Pagos Associate General Counsel, Vice
President and Assistant Secretary
</TABLE>

* The principal business address of these officers and directors is SAFECO
Plaza, Seattle, Washington 98185.

Item 26. Persons Controlled By or Under Common Control With the
SAFECO Life Insurance Company or Registrant

SAFECO Life Insurance Company ("SAFECO") established SAFECO
Separate Account C ("Registrant") by resolution of its Board
of Directors pursuant to Washington law. SAFECO is a
wholly-owned subsidiary of SAFECO Corporation, which is a
publicly-owned company. Both companies were organized under
Washington law. SAFECO Corporation, a Washington corporation,
owns 100% of the following Washington corporations: SAFECO
Insurance Company of America, General Insurance Company of
America, First National Insurance Company of America, SAFECO
Life Insurance Company of America, SAFECO Assigned Benefits
Service Company, SAFECO Administrative Services, Inc., SAFECO
Properties Inc., SAFECO Credit Company, Inc., SAFECO Asset
Management Company, SAFECO Securities, Inc., SAFECO Services
Corporation, SAFECO Trust Company and General America
Corporation. SAFECO Corporation owns 100% of SAFECO National
Insurance Company, a Missouri corporation, and SAFECO
Insurance Company of Illinois, an Illinois corporation.
SAFECO Corporation owns 20% of Agena, Inc., a Washington
corporation. SAFECO Insurance Company of America owns 100% of
SAFECO Management Corp., a New York corporation, and SAFECO
Surplus Lines Insurance Company, a Washington corporation.
SAFECO Life Insurance Company owns 100% of SAFECO National
Life Insurance Company, a Washington corporation, and First
SAFECO National Life Insurance Company of New York, a New York
corporation. SAFECO Administrative Services, Inc. owns 100%
of Employee Benefit Claims of Wisconsin, Inc. and Wisconsin
Pension and Group Services, Inc., each a Wisconsin
corporation. General America Corporation owns 100% of COMAV
Mangers, Inc., an Illinois corporation, F.B. Beattie & Co.,
Inc., a Washington corporation, General America Corp. of
Texas, a Texas corporation, S&T Financial Corporation, a
Washington corporation and Whitehall Insurance Brokers, Inc.,
a California corporation. F.B. Beattie & Co., Inc. owns 100%
of F.B. Beattie Insurance Services, Inc., a California
corporation. General America Corp. of Texas is
Attorney-in-fact for SAFECO Lloyds Insurance Company, a Texas
corporation. S&T Financial Corporation owns 100%

C-5
<PAGE> 99
of PNMR Securities, Inc., a Washington corporation, and Talbot
Financial Corporation, a Washington corporation which owns
100% of Talbot Agency, Inc., New Mexico corporation. SAFECO
Properties Inc. owns 100% of the following, each a Washington
corporation: RIA Development, Inc., SAFECARE Company, Inc.
and Winmar Company, Inc. SAFECARE Company, Inc. owns 100% of
the following, each a Washington corporation: S.C. Bellevue,
Inc., S.C. Everett, Inc., S.C. Marysville, Inc., S.C. Simi
Valley, Inc. and S.C. Vancouver, Inc. SAFECARE Company, Inc.
owns 50% of Lifeguard Ventures, Inc., a California
corporation. S.C. Simi Valley, Inc. owns 100% of Simi Valley
Hospital, Inc., a Washington corporation. Winmar Company,
Inc. owns 50% of C-W Properties, Inc., a Washington
corporation. Winmar Company, Inc. owns 100% of the following:
Barton Street Corp., Gem State Investors, Inc., Kitsap Mall,
Inc. WNY Development, Inc., Winmar Cascade, Inc., Winmar
Metro, Inc., Winmar Northwest, Inc., Winmar Redmond, Inc. and
Winmar of Kitsap, Inc., each a Washington corporation, and
Capitol Court Corp., a Wisconsin corporation, SAFECO
Properties of Boise, Inc., an Idaho corporation, SCIT, Inc., a
Massachusetts corporation, Valley Fair Shopping Centers, Inc.,
a Delaware corporation, WDI Golf Club, Inc., a California
corporation, Winmar Oregon, Inc., an Oregon corporation,
Winmar of Texas, Inc., a Texas corporation, Winmar of
Wisconsin, Inc., a Wisconsin corporation, and Winmar of the
Desert, Inc., a California corporation. Winmar Oregon, Inc.
owns 100% of the following, each an Oregon corporation: North
Coast Management, Inc., Pacific Surfside Corp., Winmar of
Jantzen Beach, Inc. and W-P Development, Inc., and 100% of the
following, each a Washington corporation: Washington Square,
Inc. and Winmar Pacific, Inc.

No person is directly or indirectly controlled by Registrant.

Item 27. Number of Contract Holders

Though none of these contracts have yet been offered, the
Registrant offers other contracts, which are covered by
separate registration statements filed with the Securities and
Exchange Commission under the Securities Act of 1933.

Item 28. Indemnification

Under its By-Laws, SAFECO Life Insurance Company ("SAFECO"),
to the full extent permitted by the Washington Business
Corporation Act, shall indemnify any person who was or is a
party to any proceeding (whether brought by or in the right of
SAFECO or otherwise) by reason of the fact that he or she is
or was a director of SAFECO, or, while a

C-6

<PAGE> 100
director of SAFECO, is or was serving at the request of SAFECO
as a director, officer, partner, trustee, employee, or agent
of another foreign or domestic corporation, partnership, joint
venture, trust, other enterprise, or employee benefit plan,
against judgments, penalties, fines, settlements and
reasonable expenses actually incurred by him or her in
connection with such proceeding.

SAFECO shall extend such indemnification as is provided to
directors above to any person, not a director of SAFECO, who
is or was an officer of SAFECO or is or was serving at the
request of SAFECO as a director, officer, partner, trustee, or
agent of another foreign or domestic corporation, partnership,
joint venture, trust, other enterprise, or employee benefit
plan. In addition, the Board of Directors of SAFECO may, by
resolution, extend such further indemnification to an officer
or such other person as may to it seem fair and reasonable in
view of all relevant circumstances.

Insofar as indemnification for any liability arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of SAFECO Life Insurance Company
("SAFECO") or SAFECO Separate Account C pursuant to the
foregoing provisions, or otherwise, SAFECO and SAFECO Separate
Account C have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in that Act and is,
therefore unenforceable. In the event that a claim for
indemnification against such liabilities (other than the
payment by SAFECO of expenses incurred or paid by a director,
officer or controlling person of SAFECO or SAFECO Separate
Account C in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in that Act and will be governed by the final
adjudication of such issue.

Item 29. Principal Underwriters

(a) SAFECO Securities, Inc., the principal underwriter for the
Registrant, is also the principal underwriter of shares issued
by the following registered investment companies: SAFECO
Common Stock Trust; SAFECO Taxable Bond Trust; SAFECO
Tax-Exempt Bond Trust; SAFECO Money Market Trust; SAFECO
Institutional Series Trust; SAFECO Resource Series Trust; and
SAFECO Advisor Series Trust. In addition, SAFECO Securities
is the principal underwriter for variable insurance products
issued by SAFECO Resource Variable Account B and SAFECO
Separate Account SL.

C-7
<PAGE> 101

(b)
<TABLE>
<CAPTION>
Name and Principal Business Address* Positions and Offices with Underwriter
----------------------------------- --------------------------------------
<S> <C>
David F. Hill Director, President and Secretary

Rod A. Pierson Director

Neal A. Fuller Vice President, Controller, Treasurer,
Assistant Secretary
</TABLE>

* The Principal Business Address of all officers or directors listed is SAFECO
Plaza, Seattle, Washington 98185.

Item 30. Location of Accounts and Records

SAFECO Life Insurance Company at 15411 N. E. 51st Street,
Redmond, Washington 98052, and/or SAFECO Securities, Inc.
and/or SAFECO Asset Management Company, each at SAFECO Plaza,
Seattle, Washington 98185 maintain physical possession of the
accounts, books or documents of the Separate Account required
to be maintained by Section 31(a) of the Investment Company
Act of 1940, as amended, and the rules promulgated thereunder.

Item 31. Management Services

None

Item 32. Undertakings

Registrant hereby undertakes:

(a) to file a post-effective amendment to this registration
statement as frequently as is necessary to ensure that the
audited financial statements in this Registration Statement
are never more than 16 months old for so long as payments
under the Contracts may be accepted;

(b) to include either (1) as part of any application to purchase a
Contract offered by the Prospectus, a space that an applicant
can check to request a Statement of Additional Information, or
(2) a toll-free phone number, postcard, or similar written
communication affixed to or included in the Prospectus that
the applicant can call or remove to send for a Statement of
Additional Information;

C-8
<PAGE> 102
(c) to deliver any Statement of Additional Information and any
financial statements required to be made available under this
Form N-4 promptly upon written or oral request.

Registrant hereby represents that a no-action letter issued by the Commission
staff to the American Council of Life Insurance, available November 22, 1988,
is being relied upon and the provisions of paragraphs numbered (1) - (4) of
that letter have been complied with.

C-9
<PAGE> 103
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as
amended, and the Investment Company Act of 1940, as amended, the Registrant,
SAFECO Separate Account C, has duly caused this Registration Statement to be
signed on its behalf by the undersigned thereunto duly authorized, and its seal
to be hereunto affixed and attested, all in the City of Redmond and State of
Washington on the 16th day of June, 1995.

SAFECO SEPARATE ACCOUNT C
(Registrant)

BY SAFECO LIFE INSURANCE COMPANY
(Depositor)

BY /S/ RICHARD E. ZUNKER
----------------------------------
Richard E. Zunker, President

ATTEST:

/S/ ROD A. PIERSON
- ------------------
Rod A. Pierson, Senior Vice President and Secretary

Pursuant to the requirements of the Securities Act of 1933, as
amended, the Depositor, SAFECO Life Insurance Company, has duly caused this
Registration Statement to be signed on its behalf by the undersigned thereunto
duly authorized, and its seal to be hereunto affixed and attested, all in the
City of Redmond and State of Washington on the 16th day of June, 1995.

SAFECO LIFE INSURANCE COMPANY

BY /S/ RICHARD E. ZUNKER
----------------------------------
Richard E. Zunker, President

ATTEST:

/S/ ROD A. PIERSON
- ------------------
Rod A. Pierson, Senior Vice President and Secretary

C-10
<PAGE> 104
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in their capacities with the Depositor and on the dates indicated.

<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/S/ RICHARD E. ZUNKER Director and President June 16, 1995
- --------------------- (Principal Executive Officer) -------------
Richard E. Zunker

/S/ JAMES T. FLYNN Vice President, Controller and June 16, 1995
- ------------------ Assistant Secretary (Principal -------------
James T. Flynn Accounting Officer)

/S/ ROD A. PIERSON Director, Senior Vice President June 16, 1995
- ------------------ and Secretary -------------
Rod A. Pierson

/S/ R.H. EIGSTI Director and Chairman June 16, 1995
- --------------- -------------
R. H. Eigsti

/S/ BOH A. DICKEY Director and Executive Vice June 16, 1995
- ----------------- President -------------
Boh A. Dickey

/S/ DONALD S. CHAPMAN Director June 16, 1995
- --------------------- -------------
Donald S. Chapman

/S/ DAN D. MCLEAN Director June 16, 1995
- ----------------- -------------
Dan D. McLean

/S/ JAMES W. RUDDY Director June 16, 1995
- ------------------ -------------
James W. Ruddy

/S/ ROBERT W. SWEGLE Director June 16, 1995
- -------------------- -------------
Robert W. Swegle

/S/ RONALD L. SPAULDING Director and Vice President June 16, 1995
- ----------------------- -------------
</TABLE>

C-11
<PAGE> 105
EXHIBIT LIST

<TABLE>
<CAPTION>
Exhibit Sequentially
Number Description Numbered Page*
- ------ ----------- -------------
<S> <C> <C>
27. Financial Data Schedule.

99.1. Amended and Restated Resolution of the Board of Directors of SAFECO Life Insurance Company
authorizing the establishment of SAFECO Separate Account C.

99.3. Principal Underwriter's Agreement between SAFECO Life Insurance Company and SAFECO Securities,
Inc., dated April 29, 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

99.4.a. Form of Variable Annuity Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

99.4.b. Form of Fixed Account Rider . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

99.4.c. Form of IRA Endorsement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

99.5. Form of Application used with Variable Annuity Contract . . . . . . . . . . . . . . . . . . . . . . . . .

99.6.a. Articles of Incorporation of SAFECO Life Insurance Company . . . . . . . . . . . . . . . . . . . . . . . .

99.6.b. By-Laws of SAFECO Life Insurance Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

99.9. Opinion and consent of counsel as to the legality of the securities being registered . . . . . . . . . . .

99.10. Consent of Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>

____________________________________
*In manually signed original only.

C-12

<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SAFECO LIFE
INSURANCE COMPANY AND SUBSIDIARIES AUDITED CONSOLIDATED FINANCIAL STATEMENTS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<DEBT-HELD-FOR-SALE> 5,915,662
<DEBT-CARRYING-VALUE> 2,053,132
<DEBT-MARKET-VALUE> 1,948,309
<EQUITIES> 22,747
<MORTGAGE> 552,597
<REAL-ESTATE> 5,149
<TOTAL-INVEST> 8,666,624
<CASH> 26,710
<RECOVER-REINSURE> 15,517
<DEFERRED-ACQUISITION> 247,190
<TOTAL-ASSETS> 9,314,126
<POLICY-LOSSES> 155,322
<UNEARNED-PREMIUMS> 8,783
<POLICY-OTHER> 29,050
<POLICY-HOLDER-FUNDS> 8,062,764
<NOTES-PAYABLE> 0
<COMMON> 5,000
0
0
<OTHER-SE> 793,238
<TOTAL-LIABILITY-AND-EQUITY> 9,314,126
252,929
<INVESTMENT-INCOME> 705,670
<INVESTMENT-GAINS> 5,639
<OTHER-INCOME> 9,795
<BENEFITS> 674,215
<UNDERWRITING-AMORTIZATION> 29,407
<UNDERWRITING-OTHER> 136,010
<INCOME-PRETAX> 134,401
<INCOME-TAX> 47,211
<INCOME-CONTINUING> 87,190
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 87,190
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0

</TABLE>

<PAGE> 1

EXHIBIT 99.1.

SAFECO Life Insurance Company

Secretary's Certificate

The undersigned, Secretary of SAFECO Life Insurance Company, hereby certifies
that the following is a true and correct copy of a resolution adopted by the
Board of Directors of SAFECO Life Insurance Company on February 3, 1995 and
that the same is in full force and effect:

RESOLVED, That the Company be, and hereby is, authorized to develop a program
to issue and to sell variable and fixed annuity contracts, some of which may be
required to be registered with the Securities and Exchange Commission pursuant
to the securities laws;

RESOLVED FURTHER, That the appropriate officers of the Company be, and hereby
are, authorized to establish and designate one or more separate accounts of the
Company to provide for annuities (and other benefits incidental thereto),
payable in fixed or variable amounts or both;

RESOLVED FURTHER, That the purpose of any such separate account shall be to
provide an investment medium for such variable and fixed annuity contracts
issued by the Company as may be designated as participating therein;

RESOLVED FURTHER, That any such separate account shall receive, hold, invest
and reinvest only the monies arising from (i) premiums, contributions or
payments made pursuant to the variable and fixed annuity contracts
participating therein; (ii) such assets of the Company as shall be deemed
appropriate to be invested in the same manner as the assets applicable to the
Company's reserve liability under the variable and fixed annuity contracts
participating in such separate accounts, or as may be necessary for the
establishment of such separate accounts; and (iii) the dividends, interest and
gains produced by the foregoing;

RESOLVED FURTHER, That the income, gains and losses, realized or unrealized,
in any such separate account shall be credited to or charged against the
amounts allocated to such separate account in accordance with the terms of the
variable and fixed annuity contracts, without regard to other income, gains or
losses of the Company, including upon insolvency;

RESOLVED FURTHER, That the reserves or liabilities of any such separate
account, which are kept in accordance with federal and state securities and
insurance laws, shall not be chargeable with liabilities arising out of any
other business which the Company conducts;

RESOLVED FURTHER, That any such separate account shall be divided into
accounts and subaccounts so that each account or subaccount may invest in the
shares of designated investment companies with the net premiums received under
the variable and fixed annuity contracts as directed by the owners of said
contracts;
<PAGE> 2
RESOLVED FURTHER, That the appropriate officers be, and each of them hereby
are, expressly authorized in their discretion and as they may deem appropriate
from time to time in accordance with applicable laws and regulations; (i) to
divide any such separate account into one or more accounts or subaccounts, (ii)
to modify, consolidate, or eliminate any such accounts or subaccounts, (iii) to
change the designation of any separate account to another designation, (iv) to
further designate any accounts or subaccounts thereof, and (v) to take such
other action as may be required to further any such separate account's
compliance with applicable federal and state laws;

RESOLVED FURTHER, That the appropriate officers of the Company be, and they
each hereby are, authorized:

(i) to register the variable and fixed annuity contracts participating in
any such separate accounts under the provisions of the Securities Act
of 1933 to the extent that it shall be determined that such
registration is necessary;

(ii) to register any such separate accounts with the Securities and
Exchange Commission under the provisions of the Investment Company Act
of 1940 to the extent that it shall be determined that such
registration is necessary;

(iii) to prepare, execute and file such amendments to any registration
statements filed under the aforementioned Acts (including post-
effective amendments), supplements and exhibits thereto as they may
be deemed necessary or desirable;

(iv) to apply for exemption from those provisions of the aforementioned
Acts as shall be deemed necessary and to take any and all other
actions which shall be deemed necessary, desirable, or appropriate in
connection with such Acts, including to prepare, execute and file
amendments to any such application;

(v) to file the variable and fixed annuity contracts participating in any
such separate accounts with the appropriate state insurance
departments and to prepare and execute all necessary documents to
obtain approval of such insurance departments; and

(vi) to prepare or have prepared and to execute all necessary documents to
obtain approval of, or clearance with, or other appropriate actions
required of, any other regulatory authority that may be necessary;

RESOLVED FURTHER, That the appropriate officers of the Company be, and they
each hereby are, authorized to invest cash in any such separate account or in
any account thereof as may be deemed necessary or appropriate to facilitate the
commencement of such separate account's operations, including but not limited
to compliance with applicable tax laws, or to meet any minimum capital
requirements under the Investment Company Act of 1940 and to transfer cash or
securities from time to time between the Company's general account and such
separate
<PAGE> 3
account as deemed necessary or appropriate so long as such transfers are not
prohibited by law and are consistent with the terms of the variable and fixed
annuity contracts;

RESOLVED FURTHER, That the appropriate officers of the Company be, and they
each hereby are, authorized and directed to execute such agreement or
agreements as they deem necessary or appropriate:

(i) with SAFECO Securities, Inc., or any other qualified entity, under
which SAFECO Securities, Inc. or such other entity will be appointed
principal underwriter and distributor for the variable and fixed
annuity contracts;

(ii) with one or more qualified banks or other qualified entities including
the Company or any of its affiliates to provide administrative and/or
custodial service in connection with the establishment and maintenance
of any such separate account and the design, issuance and
administration of the variable and fixed annuity contracts; and

(iii) with one or more investment companies, affiliated or unaffiliated
with the Company, to serve as eligible investments under any such
separate account;

RESOLVED FURTHER, That the appropriate officers of the Company be, and they
each hereby are, authorized to establish procedures to the extent required, or
deemed appropriate, and subject to the limitations of applicable law, for
providing a pass-through of voting rights for owners of the variable and fixed
annuity contracts with respect to the shares of an investment company or
companies, attributable to them, owned by any such separate account;

RESOLVED FURTHER, That for the purpose of executing any post-effective
amendments to the Company's registration statements related to the separate
accounts and the variable and fixed annuity contracts and in connection with
the filing of all other documents necessary or desirable to the amendment
process, the officers and directors of the Company be, and each of them hereby
are, authorized, for themselves and on behalf of the Company, to execute and
deliver their several powers of attorney to Boh A. Dickey and Richard E.
Zunker, and each of them.

RESOLVED FURTHER, That in connection with the offering and sale of the
variable and fixed annuity contracts in the various States of the United
States, as and to the extent necessary, the appropriate officers of the Company
be, and they each hereby are, authorized to take any and all such action,
including but not limited to the preparation, execution and filing with proper
state authorities, on behalf of and in the name of the Company, of such
applications, notices, certificates, affidavits, powers of attorney, consents
to service of process, issuer's covenants, certified copies of minutes of
shareholders' and directors' meetings, bonds, escrow and impounding agreements
and other writings and instruments, as may be required in order to render
permissible the offering and sale of the fixed and variable annuity contracts
in such jurisdiction;
<PAGE> 4
RESOLVED FURTHER, That the forms of any resolutions required by any state
authority to be filed in connection with any of the documents or instruments
referred to in any of the preceding resolutions be, and the same hereby are,
adopted as if fully set forth herein if (1) in the opinion of the appropriate
officers of the Company, the adoption of the resolutions is advisable and (2)
the Secretary or any Assistant Secretary of the Company evidences such adoption
by inserting into these minutes copies of such resolutions; and

RESOLVED, That the appropriate officers of the Company be, and they each
hereby are, authorized to prepare and to execute the necessary documents and to
take such further actions as may be deemed necessary or appropriate, in their
discretion, to implement the purpose of these resolutions.

RESOLVED, That the foregoing resolutions supersede the previous resolutions
adopted by the Directors of the Company on February 6, 1986 regarding the
foregoing.

SAFECO Life Insurance Company

Dated: May 22, 1995 By: /S/ROD A. PIERSON
--------------------------
Rod A. Pierson, Secretary

<PAGE> 1

EXHIBIT 99.3.

PRINCIPAL UNDERWRITER'S AGREEMENT

SAFECO SEPARATE ACCOUNT C

This Agreement is made and entered into as of the 29th day of April,
1994 between SAFECO Life Insurance Company ("SAFECO Life") on behalf of SAFECO
Separate Account C ("Separate Account") and SAFECO Securities, Inc., a
corporation registered as a broker-dealer with the Securities and Exchange
Commission and National Association of Securities Dealers, Inc. ("PRINCIPAL
UNDERWRITER").

WHEREAS, SAFECO Life is a life insurance company licensed to sell
various life insurance and annuity contracts (the "Policies"); and

WHEREAS, SAFECO Life proposes to issue and sell the Policies to the
public through PRINCIPAL UNDERWRITER:

NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties agree as follows:

1. SAFECO Life is a life insurance company licensed to offer and
sell the Policies. SAFECO Life proposes to issue and sell the Policies to the
public through PRINCIPAL UNDERWRITER. The PRINCIPAL UNDERWRITER agrees to
provide sales service subject to the terms and conditions hereof. The Policies
to be sold are more fully described in the registration statements and the
prospectuses hereinafter mentioned. Such Policies will be issued by SAFECO
Life through the Separate Account.

2. SAFECO Life grants PRINCIPAL UNDERWRITER, the exclusive right,
during the term of this Agreement, subject to registration requirements of the
Securities Act of 1933 and the Investment Company Act of 1940 and the
provisions of the Securities Exchange Act of 1934, to be the principal
underwriter of the Policies issued through the Separate Accounts. PRINCIPAL
UNDERWRITER will offer and sell the Policies under such terms as set by SAFECO
Life and will make such sale to purchasers permitted to buy such Policies as
specified in the prospectuses.

3. PRINCIPAL UNDERWRITER agrees that it shall undertake to
perform all duties and functions which are necessary and proper for the
distribution of the Policies.

4. (a) All sales literature and advertisements relating to
SAFECO Life and the Separate Account used by PRINCIPAL UNDERWRITER shall be
subject to approval by SAFECO Life. SAFECO Life authorizes PRINCIPAL
UNDERWRITER, in connection with the sale or

<PAGE> 2
Principal Underwriters Agreement
April 29, 1994
Page 2

arranging for the sale of the Policies, to provide only such information and to
make only such statements or representations as are contained in the
then-current Prospectus and Statement of Additional Information for the
Separate Account or in sales literature or advertisements approved by SAFECO
Life or in such financial and other statements which are furnished to the
PRINCIPAL UNDERWRITER pursuant to the next paragraph. SAFECO Life shall not be
responsible in any way for any information provided or statements or
representations made by PRINCIPAL UNDERWRITER or its representatives or agents
other than the information, statements and representations described in the
preceding sentence. PRINCIPAL UNDERWRITER shall review all materials submitted
to it that describes SAFECO Life or the Policies. PRINCIPAL UNDERWRITER shall
not be responsible for any information provided or statements or
representations made by persons or entities other than PRINCIPAL UNDERWRITER's
representatives or agents.

(b) SAFECO Life shall keep PRINCIPAL UNDERWRITER fully
informed with regard to its affairs, shall furnish PRINCIPAL UNDERWRITER with a
copy of all financial statements and a signed copy of each report prepared by
its independent certified public accountants, and shall cooperate fully in the
efforts of PRINCIPAL UNDERWRITER to sell the Policies and in the performance by
PRINCIPAL UNDERWRITER of all its duties under this Agreement.

5. (a) SAFECO Life will pay or cause to be paid:

(1) registration fees for registering its
Separate Accounts under the Securities Act of
1933 (the "1933 Act");

(2) the expenses, including counsel fees, of
preparing registration statements and such
other documents as SAFECO Life believes are
necessary for registering the Separate
Account with the Securities and Exchange
Commission (the "SEC") and such states as are
deemed necessary or appropriate;

(3) expenses incident to preparing amendments to
the 1933 Act and Investment Company Act of
1940, as amended (the "1940 Act")
registration statements;

(4) expenses for preparing and setting in type
all prospectuses and the expense of supplying
them to the applicants for the Policies.

<PAGE> 3
Principal Underwriters Agreement
April 29, 1994
Page 3

(5) expenses incident to the issuance of its
Policies; and

(6) expenses incident to the preparation and
mailing of notices, reports and proxy
solicitation material to its Policyholders.

(b) PRINCIPAL UNDERWRITER shall be compensated for its
distribution service in such amount as to meet all of its obligations to
selling broker-dealers with respect to all payments for the Policies accepted
by SAFECO Life on the Policies covered by this Agreement.

6. (a) SAFECO Life shall maintain a currently effective
Registration Statement with respect to the Separate Account and the Policies of
the Separate Account on the appropriate SEC form and shall file with the SEC
such reports and other documents as may be required under the 1933 Act and the
1940 Act or by the rules and regulations of the SEC thereunder.

(b) SAFECO Life represents and warrants that its
Registration Statements, post-effective amendments, Prospectuses and Statements
of Additional Information (excluding statements based upon written information
furnished by PRINCIPAL UNDERWRITER expressly for inclusion therein) shall not
contain any untrue statement of material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, and that all statements or information furnished to PRINCIPAL
UNDERWRITER, pursuant to Section 4 (b) hereof, shall be true and correct in all
material respects.

7. It is understood that officers, agents and shareholders of
SAFECO Life are or may be interested in PRINCIPAL UNDERWRITER as directors,
officers, shareholders, or otherwise; that directors, officers, agents and
shareholders of PRINCIPAL UNDERWRITER are or may be interested in SAFECO Life
as officers, shareholders or otherwise; that PRINCIPAL UNDERWRITER may be
interested in SAFECO Life as a shareholder or otherwise; and that the existence
of any such dual interest shall not affect the validity this Agreement or of
any transactions hereunder except as otherwise provided by specific provisions
or applicable law.

8. The parties contemplate PRINCIPAL UNDERWRITER will enter into
dealer agreements with registered and qualified securities dealers for the sale
of the Policies. The form of any such dealer agreement shall be mutually
agreed upon and approved by SAFECO Life and the PRINCIPAL UNDERWRITER.

<PAGE> 4
Principal Underwriters Agreement
April 29, 1994
Page 4

9. PRINCIPAL UNDERWRITER is an independent contractor and shall
be agent for SAFECO Life only in respect to the sale and redemption of the
Policies.

10. The services of PRINCIPAL UNDERWRITER to SAFECO Life under
this Agreement are not to be deemed exclusive, and the PRINCIPAL UNDERWRITER
shall be free to render similar services or other services to others so long as
its services hereunder are not impaired thereby.

11. This Agreement is terminable on not less than 60 days' notice
to the other party and will be terminated upon the mutual written consent of
PRINCIPAL UNDERWRITER and SAFECO Life. This Agreement will also automatically
and immediately terminate in the event of its assignment.

12. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties ("disabling conduct")
hereunder on the part of PRINCIPAL UNDERWRITER (and its officers, directors,
agents, employees, controlling persons and any other person or entity
affiliated with PRINCIPAL UNDERWRITER or retained by it to perform or assist in
the performance of its obligations under this Agreement), PRINCIPAL UNDERWRITER
shall not be subject to liability to SAFECO Life or for any act or omission in
the course of, or connected with, rendering services hereunder, including
without limitation, any error of judgment or mistake of law or for any loss
suffered by any of them in connection with the matters to which this Agreement
relates.

13. Any notice, request, instruction or other document to be given
hereunder by either party hereto to the other shall be in writing and delivered
personally or sent by registered or certified mail, postage prepaid, as set
forth below:

If to SAFECO Life: President
SAFECO Life Insuance Company
15411 NE 51st Street
Redmond, WA 98052

If to PRINCIPAL UNDERWRITER: President
SAFECO Securities, Inc.
SAFECO Plaza
Seattle, WA 98115

14. This Agreement embodies the entire Agreement between
PRINCIPAL UNDERWRITER and SAFECO Life with respect to the principal
underwriting services to be provided by PRINCIPAL UNDERWRITER to

<PAGE> 5
Principal Underwriters Agreement
April 29, 1994
Page 5

SAFECO Life and the Separate Account and supersedes any prior written or oral
agreement between the parties. The parties acknowledge that certain
administrative responsibilities and obligations in connection with the offer
and sale of the Policies are stated in the Administrative Services Agreement by
and among SAFECO Life, PRINCIPAL UNDERWRITER, and PNMR Securities, Inc. dated
April 29, 1994. In the event that either party should be required to take
legal action in order to enforce its rights under this Agreement, the
prevailing party in any such action or proceeding shall be entitled to recover
from the other party costs and reasonable attorneys' fees.

15. This Agreement may be executed in counterparts, each of which
taken together shall constitute one and the same instrument. PRINCIPAL
UNDERWRITER acknowledges that the rights and obligations of the Separate
Account are separate and distinct from those of any and all other Separate
Accounts.

16. This Agreement shall be construed in accordance with and
governed by the laws of the State of Washington.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed by their duly authorized officers and under their duly
authorized officers and under their respective seals as of the day and year
first above written.

SAFECO LIFE INSURANCE COMPANY SAFECO SECURITIES, INC.

By /S/JOHN P. FENLASON By /S/DAVID F. HILL
------------------- ----------------
Its Sr. Vice President Its President
------------------ ---------

<PAGE> 1

EXHIBIT 99.4.a.

CONTRACT DATA PAGE

PRODUCT: MAINSAIL QUALIFIED VARIABLE ANNUITY

OWNER: Jane R. Doe
123456 8th Street
Seattle, Washington 98012-0451

ANNUITANT: John P. Doe

CONTRACT NUMBER: LP1077777, 123-45-6789, xx

CONTRACT DATE: 01/25/1995

ANNUITANT'S AGE ON CONTRACT DATE: 35

ANNUITY DATE: 01/01/2050

DELIVERED IN THE STATE OF WASHINGTON AND GOVERNED BY ITS LAWS.

MINIMUM INITIAL PURCHASE PAYMENT: $2000.00

MINIMUM SUBSEQUENT PURCHASE PAYMENT: $250.00

ANNUAL ADMINISTRATION MAINTENANCE CHARGE: $30 each Contract Year, waived if
Contract Value is $100,000 or more. Guaranteed never to exceed $40.

ASSET RELATED ADMINISTRATION CHARGE: Equal on an annual basis to .15% of the
average daily net asset value of the Separate Account.

MORTALITY AND EXPENSE RISK CHARGE: Equal on an annual basis to 1.25% of the
average daily net asset value of the Separate Account.

TRANSFER CHARGE: $10 for each Transfer in excess of twelve per Contract Year.

MINIMUM WITHDRAWAL: The lesser of $500 or the Contract Value.

CONTINGENT DEFERRED SALES CHARGE:
<TABLE>
<CAPTION>
CONTRACT YEAR CHARGE
<S> <C>
1 7% of amount withdrawn
2 6% of amount withdrawn
3 5% of amount withdrawn
4 4% of amount withdrawn
5 3% of amount withdrawn
6 2% of amount withdrawn
After 6 0% of amount withdrawn
</TABLE>
Total Contingent Deferred Sales Charges will not exceed 8.5% of the Purchase
Payments made under this Contract.

WITHDRAWAL CHARGE: $25 for each Withdrawal in excess of one per Contract
year.

ELIGIBLE INVESTMENTS:
SAFECO Resource Series Trust Money Market Portfolio
SAFECO Resource Series Trust Bond Portfolio
TCI Portfolios, Inc. TCI Balanced Portfolio
TCI Portfolios, Inc. TCI International Portfolio
Wanger Advisors Trust U.S. Small Cap Advisor Portfolio
Insurance Management Series Trust Utility Portfolio
Insurance Management Series Trust High Yield Bond Portfolio
Lexington Natural Resources Trust Portfolio
Lexington Emerging Markets Fund, Inc. Portfolio
SAFECO Resource Series Trust Equity Portfolio
SAFECO Resource Series Trust Northwest Portfolio
SAFECO Resource Series Trust Growth Portfolio
SAFECO Fixed Account Annuity Rider

SEPARATE ACCOUNT: SAFECO Separate Account C

ANNUITY SERVICE OFFICE:

HOME OFFICE: MAILING ADDRESS:

SAFECO Life Insurance Company SAFECO Life Insurance Company
Pension Department Pension Department
15411 NE 51st Street P.O. Box 34690
Redmond, Washington 98052 Seattle, Washington 98124-1690
Telephone: 1-800-426-7649
Fax: 206-867-8793
<PAGE> 2
CONTRACT DATA PAGE

PRODUCT: MAINSAIL NON-QUALIFIED VARIABLE ANNUITY

OWNER: Jane R. Doe
123456 8th Street
Seattle, Washington 98012-0451

ANNUITANT: John P. Doe

CONTRACT NUMBER: LP1077777, 123-45-6789, xx

CONTRACT DATE: 01/25/1995

ANNUITANT'S AGE ON CONTRACT DATE: 35

ANNUITY DATE: 01/01/2050

DELIVERED IN THE STATE OF WASHINGTON AND GOVERNED BY ITS LAWS.

MINIMUM INITIAL PURCHASE PAYMENT: $5000.00

MINIMUM SUBSEQUENT PURCHASE PAYMENT: $250.00

ANNUAL ADMINISTRATION MAINTENANCE CHARGE: $30 each Contract Year, waived if
Contract Value is $100,000 or more. Guaranteed never to exceed $40.

ASSET RELATED ADMINISTRATION CHARGE: Equal on an annual basis to .15% of the
average daily net asset value of the Separate Account.

MORTALITY AND EXPENSE RISK CHARGE: Equal on an annual basis to 1.25% of the
average daily net asset value of the Separate Account.

TRANSFER CHARGE: $10 for each Transfer in excess of twelve per Contract Year.

MINIMUM WITHDRAWAL: The lesser of $500 or the Contract Value.

WITHDRAWAL CHARGE: $25 for each Withdrawal in excess of one per Contract
year.

SEPARATE ACCOUNT: SAFECO Separate Account C

ANNUITY SERVICE OFFICE:

HOME OFFICE: MAILING ADDRESS:

INDIVIDUAL VARIABLE ANNUITY CONTRACT

SAFECO Life Insurance Company, a stock company with its Home Office in Redmond,
Washington (hereafter called SAFECO), in consideration of the payment of the
Purchase Payments as provided herein, agrees to provide an Annuity and other
benefits in accordance with the Contract provisions.

10-DAY RIGHT TO EXAMINE CONTRACT

Within 10 days of the date of receipt of this Contract by the Owner, it may be
returned by delivering or mailing it to SAFECO or to the agent through whom it
was purchased. When this Contract is received by SAFECO, it will be voided as
if it had never been in force and SAFECO will refund the Contract Value. This
may be more or less than the Purchase Payments. In states where required
SAFECO will refund the Purchase Payments rather than the Contract Value.
SAFECO reserves the right to allocate all Purchase Payments to the Money Market
Sub-Account until the expiration of 15 days from the date the first Purchase
Payment is received. If SAFECO so allocates Purchase Payments, SAFECO will
refund the greater of Purchase Payments or the Contract Value.

Signed for SAFECO

R.A. Pierson, Senior Vice President and Secretary R.E. Zunker, President

BRIEF DESCRIPTION

Individual Variable Flexible Premium Deferred Annuity, Non-Participating,
Monthly Income at Annuity Date, Guaranteed Death Benefit Payable at Death of
Owner before Annuity Date.

VALUES PROVIDED BY THIS CONTRACT ARE BASED ON THE INVESTMENT EXPERIENCE OF A
SEPARATE ACCOUNT AND ARE, THEREFORE, VARIABLE AND NOT GUARANTEED AS TO DOLLAR
AMOUNT. SEE SECTION D OF YOUR CONTRACT FOR DETAILS REGARDING THE SEPARATE
ACCOUNT PROVISIONS.

<PAGE> 4

SECTION A: DEFINITIONS

A1 Accumulation Unit: The measure used to calculate the value of a
Sub-Account prior to the Annuity Date.

A2 Annuitant: The natural person on whose life Annuity payments are
payable in accordance with this Contract.

A3 Annuity: Any series of payments starting on the Annuity Date, payable
in accordance with this Contract.

A4 Annuity Date: The date selected by the Owner for commencing Annuity
payments under this Contract. The day of the month on which the
payments will be made will be determined by SAFECO. The Annuity Date
cannot be later than the date the Annuitant attains age 90.

A5 Annuity Unit: The measure used to calculate Annuity payments after
the Annuity Date.

A6 Available Fund: A registered investment company or portfolio thereof.

A7 Beneficiary: The person or persons entitled to receive benefits under
this Contract upon the death of the Owner.

A8 Contract: This Individual Variable Annuity Contract by and between
SAFECO and the Owner.

A9 Contract Anniversary: Any anniversary of the Contract Date.

A10 Contract Date: The date on which the initial Net Purchase Payment is
allocated to the Separate Account, as shown on the Contract Data Page.

A11 Contract Value: The sum of the Owner's interest in the Sub-Accounts
of the Separate Account.

A12 Contract Year: The twelve month period which commences on the
Contract Date and each succeeding twelve month period thereafter.

A13 Eligible Investments: An investment entity shown on the Contract Data
Page, including the Fixed Account pursuant to any Fixed Account
Annuity Rider.

A14 Net Purchase Payment: Purchase Payment less any premium taxes.

A15 Owner: The person or persons named in the Application who has all
rights under this Contract. Joint Owners are allowed only if the
joint Owners are spouses. Each joint Owner shall have equal ownership
rights and must jointly exercise those rights.

1
<PAGE> 5

A16 Programs: Programs are features whereby an Owner may elect to have
Purchase Payments, Contract Value or appreciation under the Contract
allocated, transferred, withdrawn or otherwise designated pursuant to
requirements and procedures described in the then current prospectus
or registration statement for the Contract under the Securities Act of
1933, as amended.

A17 Purchase Payment: Payment made to purchase Accumulation Units.

A18 SAFECO: SAFECO Life Insurance Company.

A19 Separate Account: The separate investment account of SAFECO, as shown
on the Contract Data Page.

A20 Six Year Contract Anniversary: Each sixth Contract Anniversary.

A21 Sub-Account: A segment of the Separate Account, as shown on the
Contract Data Page.

A22 Surrender Value: The Contract Value less any applicable charges
payable upon surrender of the Contract by the Owner.

A23 Transfer: The redemption of units from a Sub-Account(s) and the
purchase of units of another Sub-Account(s).

A24 Withdrawal: Any Contract Value, including Contract charges and
deductions, withdrawn from the Contract.

SECTION B: GENERAL PROVISIONS

B1 Contract: The entire contract between SAFECO and the Owner consists
of this Contract, any Riders or Endorsements, and the Application, a
copy of which is attached to the Contract.

B2 Contract Amendments: The terms and conditions of this Contract may be
amended by written agreement between SAFECO and the Owner by written
endorsement or amendment. All agreements made by SAFECO will be
signed by the President or one of the Vice Presidents. No other
person has power on behalf of SAFECO to amend or modify this Contract,
extend any due date, or waive any proof required by this Contract.

SAFECO may unilaterally amend the provisions of this Contract as
required to conform to any state or federal law which affects this
Contract.

B3 Communications: All communications to SAFECO shall be made to the
office of SAFECO shown on the Contract Data Page.

2
<PAGE> 6

B4 Essential Data: The Owner shall furnish to SAFECO any information
necessary for the administration of this Contract.

B5 Annual Report: SAFECO will provide the Owner with an annual calendar
year report showing the Contract Value, and any other information
required by law. Reports will be sent to the last known address of
the Owner.

B6 Misstatement of Age: SAFECO may require proof of the age of the
Annuitant before making any life Annuity payment provided for by this
Contract. If the age of the Annuitant has been misstated, the amount
payable will be the amount that the Contract Value would have provided
at the correct age.

Once Annuity payments have begun, any underpayment will be made up in
one sum with the next Annuity payment. Any overpayment will be
deducted from future Annuity payments until the total is repaid.

B7 Evidence of Survival: If any benefits under this Contract are
contingent upon the Annuitant being alive on a given date, SAFECO may
require evidence satisfactory to SAFECO that such condition continues
to be met.

B8 Beneficiary Designation: The Owner may designate a Beneficiary in the
Application to receive any proceeds payable due to the death of the
Owner. Unless the Owner provides otherwise and there are no surviving
primary Beneficiaries, the death benefit will be paid in equal shares
to all surviving contingent Beneficiaries. If the Owner has not
provided otherwise and there are no surviving primary or contingent
Beneficiaries, the death benefit will be paid to the estate of the
Owner.

B9 Changes of Beneficiary: If the Owner has made an irrevocable
Beneficiary designation, no change of Beneficiary is permitted without
the written consent of the irrevocable Beneficiary. If the Owner has
not made an irrevocable Beneficiary designation, the Owner may file a
signed request with SAFECO to change the Beneficiary designation. The
change of Beneficiary will be effective upon recording by SAFECO at
its Home Office. SAFECO shall not be liable for any payments made or
other action taken by SAFECO before the change in Beneficiary was
recorded by SAFECO at its Home Office. A recorded change of
Beneficiary will revoke any prior Beneficiary designations. SAFECO
will pay any death proceeds to the most recently recorded Beneficiary.

B10 Contract Settlement: Unless otherwise designated in writing by
SAFECO, all sums payable under this Contract are payable at SAFECO's
Home Office. This Contract must be returned to SAFECO upon any
settlement.

B11 Substitute Payee: If SAFECO determines that any person is incapable
of personally receiving and giving a valid receipt for any payment due
under this Contract and no claim has been made by a duly appointed
guardian, SAFECO may make such payment to any person or institution
that SAFECO determines has assumed the care

3
<PAGE> 7

and support of such person. Such payment shall completely discharge
the liability of SAFECO with respect to the amount so paid.

B12 Non-Assignment: To the extent permitted by law, this Contract and the
benefits or payments under this Contract are not assignable or
otherwise transferrable. This Contract may be assigned in connection
with an exchange pursuant to Section 1035 of the Internal Revenue Code
of 1986, as amended (the "Code").

B13 Termination of Contract: All benefit provisions under this Contract
continue in force until the Contract Value is completely withdrawn.
Discontinuance of Purchase Payments will not result in termination of
the Contract.

This Contract will terminate and cease to be of any further force or
effect at the close of the first day upon which SAFECO has completed
all of the duties and obligations which have arisen under this
Contract.

SECTION C: PURCHASE PAYMENTS

C1 Place and Form of Purchase Payments: All Purchase Payments to SAFECO
under this Contract shall be payable at the Office of SAFECO as shown
on the Contract Data Page.

All amounts to be paid under this Contract, whether payable to SAFECO
or by SAFECO, shall be paid in lawful money of the United States of
America.

C2 Purchase Payments: The initial Purchase Payment is due on the
Contract Date. The minimum initial and subsequent Purchase Payment(s)
are shown on the Contract Data Page. SAFECO reserves the right to
reject any Application or Purchase Payment.

C3 Change in Purchase Payments: Subject to the minimum shown on the
Contract Data Page, the Owner may increase or decrease the amount or
change the frequency of subsequent Purchase Payments.

C4 Allocation of Purchase Payments: The allocation of the initial
Purchase Payment is elected by the Owner on the Application. Unless
the Owner elects otherwise, subsequent Purchase Payments are allocated
in the same manner as the initial Purchase Payment. Allocation of the
Purchase Payments is subject to the terms and conditions imposed by
SAFECO.

C5 Application of Purchase Payments to Eligible Investments: Purchase
Payments applied to the Separate Account are allocated to Sub-
Accounts of the Separate Account.

4
<PAGE> 8

SECTION D: SEPARATE ACCOUNT PROVISIONS

D1 The Separate Account: SAFECO has established a Separate Account for
the allocation of the portion of SAFECO's assets attributable to this
and other similar Contracts. The assets of the Separate Account are
the property of SAFECO and are not chargeable with liabilities arising
out of any other business SAFECO may conduct. The investments of the
Separate Account will be valued at their fair market value in
accordance with the procedures approved by the Board of Directors of
SAFECO.

The Separate Account is divided into Sub-Accounts with the assets of
each Sub-Account invested as set forth on the Contract Data Page.

The assets of the Sub-Accounts are allocated to the Eligible
Investments shown on the Contract Data Page. SAFECO may, from time to
time, add Eligible Investments or remove Eligible Investments. If the
shares of any Eligible Investment become unavailable for investment by
the Separate Account, or SAFECO's Board of Directors deems further
investment in these shares inappropriate, SAFECO may substitute shares
of another Eligible Investment for shares already purchased under this
Contract.

D2 Non-Participation in Surplus: The Variable Annuity portion of this
Contract will not share in any distribution of profits, losses, or
surplus of SAFECO.

D3 Valuation Dates and Periods: A Valuation Date is each day the New
York Stock Exchange is open for business, as well as each day
otherwise required. A Valuation Period is the period commencing at
the close of business on each Valuation Date and ending at the close
of business for the next succeeding Valuation Date.

D4 Value of Accumulation Units: Each Purchase Payment is allocated to a
Sub-Account and is converted into Accumulation Units. The number of
Accumulation Units in a Sub-Account credited to this Contract is
determined by dividing each Net Purchase Payment by the value of an
Accumulation Unit for that Sub-Account. Accumulation Units for each
Sub-Account are valued separately. The Accumulation Unit value for
any Valuation Period is determined by multiplying the Accumulation
Unit value for the Sub-Account, as of the immediately preceding
Valuation Period, by the Net Investment Factor for the current
Valuation Period.

D5 Net Investment Factor: The Net Investment Factor for any Sub-Account
for any Valuation Period is:

(a) The net asset value per share of the Available Fund set out on
the Contract Data Page as the investment of the Sub-Account,
determined as of the current Valuation Period; plus

5
<PAGE> 9

(b) The per share amount of any dividend or capital-gains
distribution made by the Available Fund; plus or minus

(d) The result of (a), (b) and (c) divided by the net asset value
per share of the Available Fund at the end of the preceding
Valuation Period; minus

(e) The daily equivalent of the Mortality and Expense Risk Charge.
Such factor is equal on an annual basis to the percentage of
the daily net asset value of the Sub-Account, as shown on the
Contract Data Page; and minus

(f) The daily equivalent of the Asset Related Administration
Charge. Such factor is equal on an annual basis to the
percentage of the daily net asset value of the Sub-Account, as
shown on the Contract Data Page.

The Net Investment Factor may be greater or less than one. Therefore,
an Accumulation Unit value may increase or decrease.

SECTION E: SETTLEMENT OPTIONS AND DEATH BENEFITS

E1 Selection and Change of Settlement Option: The Owner may select or
change the Settlement Option or Annuity Date by written notification
to SAFECO at its Home Office. In order to be effective, the written
notification must be received by SAFECO prior to any Annuity Date
previously selected.

E2 Payment of Benefits: Subject to the provisions of this Contract,
SAFECO will, upon the written direction of the Owner, issue any
Annuity or make a cash distribution to any person who is entitled to
such benefits.

SAFECO shall not be obligated to issue an Annuity or to make a cash
distribution until it receives written direction from the Owner
containing the terms and conditions of the Annuity or cash
distribution.

SAFECO may rely on the written direction of the Owner and shall not be
liable because of any failure to question or challenge such direction
regarding the issuance of an Annuity or payment of a cash
distribution.

E3 State Required Minimum Benefits: The death benefit, the surrender
value, and the Settlement Options under this Contract will not be less
than the minimum benefits required by any statute of the state in
which this Contract is delivered.

E4 Frequency and Amount of Annuity Payments: Except as described below,
Annuity payments will be paid monthly. If the amount available to
apply under any Settlement Option is less than $5,000, SAFECO shall
have the right to pay such

6
<PAGE> 10
amount in a lump sum cash distribution. If Annuity payments would be
or become less than $250, SAFECO shall have the right to change the
frequency of payments to such intervals as will result in payment of
at least $250.

E5 Death of Annuitant:

(a) If the Annuitant dies before a Settlement Option has
commenced, the Owner must designate a new Annuitant. If no
designation is made within 30 days of notification to SAFECO
of the death of the Annuitant, the Owner will become the
Annuitant.

(b) If the Contract is owned by a non-natural person, the death of
the Annuitant will be treated as the death of the Owner.

E6 Death of Owner Prior to Annuity Date:

(a) The Minimum Guaranteed Death Benefit: The initial Minimum
Guaranteed Death Benefit shall be equal to the initial Net
Purchase Payment. Additional Net Purchase Payments are added
to the Minimum Guaranteed Death Benefit. The Minimum
Guaranteed Death Benefit will be adjusted after any Withdrawal
by multiplying it by the ratio of the Contract Value after the
Withdrawal to the Contract Value before the Withdrawal. The
Minimum Guaranteed Death Benefit shall be redetermined on each
Six Year Contract Anniversary by taking the greater of the
Contract Value on that Six Year Contract Anniversary or the
previous Minimum Guaranteed Death Benefit After the Owner's
death, the Minimum Guaranteed Death Benefit will be reduced
dollar for dollar by any Withdrawals.

(b) Death Benefit Options: Upon the death of the Owner prior to
the annuity date, the Beneficiary may elect a Settlement
Option or to receive a single lump sum payment.

If the Owner dies prior to age 76 and before a Settlement
Option has commenced, and provided that the Beneficiary
provides due proof of death in a form satisfactory to SAFECO
and has elected a Death Benefit Option within six (6) months
of the date of death, the amount of the Minimum Guaranteed
Death Benefit will be the greater of:

(i) the Contract Value on the date of election of
a Death Benefit Option by the Beneficiary; or

(ii) the Minimum Guaranteed Death Benefit.

7
<PAGE> 11

(d) Minimum Guaranteed Death Benefit (After age 75)

If the Owner dies after age 75 and before a Settlement Option
has commenced, and provided that the Beneficiary provides due
proof of death in a form satisfactory to SAFECO and has
elected a Death Benefit Option within six (6) months of the
date of death, the amount of the Minimum Guaranteed Death
Benefit will be the greater of:

(i) the Contract Value on the date of election of
a Death Benefit Option by the Beneficiary; or

(ii) the Minimum Guaranteed Death Benefit
established on the last Six Year Contract
Anniversary preceding the Owner's 76th
birthday, adjusted for any Net Purchase
Payments received or Withdrawals taken since
that Six Year Contract Anniversary.

(e) If notification of death or election of a Death Benefit Option
occurs after the six month anniversary of the date of death,
the death benefit will be the Contract Value on the date of
election of a Death Benefit Option determined as follows: the
Contract Value calculated as of the six-month anniversary of
the date of death will be compared with the last calculated
Minimum Guaranteed Death Benefit to determine if additional
funds are required to be added by SAFECO to equal such Minimum
Guaranteed Death Benefit. SAFECO will supplement any
deficiency in Contract Value, such that Contract Value will
equal the Minimum Guaranteed Death Benefit. Thereafter, until
the date of election of a Death Benefit Option, the Contract
Value attributable to SAFECO's contribution will be guaranteed
and interest paid thereon at prevailing money market rates;
the portion of Contract Value existing on the six month
anniversary of the date of death will be subject to adjustment
reflecting the investment experience for the period from the
six-month anniversary to the date of election of a Death
Benefit Option. In addition, the amount of the death benefit
will be reduced dollar for dollar by any Withdrawal after the
Owner's death.

(f) Election Period: The election of a Settlement Option must be
made by the Beneficiary during the 60-day period commencing
with the date of receipt by SAFECO of notification of the
Owner's death. If no election is made within the 60-day
period, then a single sum payment will be made to the
Beneficiary.

(g) The death benefit must be distributed:

(i) By the fifth anniversary of the Owner's death; or

(ii) Over a designated Beneficiary's life or over a period
not extending beyond the Beneficiary's life
expectancy, in equal or substantially

8
<PAGE> 12

equal payments,with payments beginning within one
year of the death of the Owner.

(h) If the Beneficiary is the spouse of the Owner, the Contract
may be continued by the spouse, and the spouse will become the
Owner.

(i) Joint Owners:

(i) The Minimum Guaranteed Death Benefit will only be
payable on the death of the older joint Owner. Upon
the death of the older joint Owner, if the Contract
is continued, no Minimum Guaranteed Death Benefit
applies for the remaining duration of the Contract.

(ii) Upon the death of a joint Owner, the surviving Owner
shall be the designated Beneficiary. Any other named
Beneficiary shall be a contingent Beneficiary.

(iii) Upon the death of a joint Owner, the surviving Owner
may elect a Settlement Option or a lump sum payment,
or may elect to continue the Contract.

E7 Death of Owner After Annuity Date: If the Owner dies on or after a
Settlement Option has commenced, payments must continue at least as
rapidly as under the method of distribution in effect prior to the
Owner's death.

E8 Settlement Options: An Annuity may be issued in any of the forms
described below, or such other forms which SAFECO agrees to issue
under this Contract. Options (a), (b), and (c) are irrevocable once
they have begun. The Annuitant will become the Owner on commencement
of a Settlement Option.

(a) Variable Life Annuity: Monthly payments are made to the
Annuitant commencing on the Annuity Date, if he or she is then
living, and the last payment is that payment due immediately
on or before the Annuitant's death. No death benefit is
payable under this option.

(b) Variable Life Annuity with 120 or 240 Monthly Payments
Guaranteed: Monthly payments are made to the Annuitant
commencing on the Annuity Date. If at the death of the
Annuitant the guaranteed number of payments has not been
received by the Annuitant, payments will be made to the
Beneficiary for the remainder of the guarantee period. The
Beneficiary may elect to have the present value of the
guaranteed Annuity remaining as of the date the notice of
death is received by SAFECO commuted at the assumed investment
rate of 4% and paid in a single sum payment.

(c) Variable Joint and Survivor Life Annuity: Monthly payments
are made to the Annuitant commencing on the Annuity Date.
After the death of the Annuitant, payments will be continued
to the Annuitant's spouse for as long

9
<PAGE> 13
as he or she lives. The written request for this option must
specify the percentage value of monthly payments to continue to
the surviving spouse.

E9 Automatic Option: If, as of the Annuity Date, a Settlement Option has
not been selected, SAFECO will make payments under Section E8(c), if
the Beneficiary is a natural person. If, as of the Annuity Date, a
Settlement Option has not been selected and the Beneficiary is a
non-natural person, SAFECO will make payments under Section E8(a).

E10 Annuity Unit: The value of the Annuity Unit for any Valuation Period
is determined by multiplying the value of the Annuity Unit for each
Sub-Account, as of the immediately preceding Valuation Period, by the
Net Investment Factor (as described in Section D5), and dividing the
result by the Assumed Investment Factor for such Valuation period (as
described in Section E11).

E11 Assumed Investment Factor: The Assumed Investment Factor for a one
day Valuation Period is 1.00010746. This factor neutralizes the
assumed investment return of 4% in the Variable Annuity Purchase Rate
Table in Section H2.

E12 Variable Annuity Payment Calculation: A Variable Annuity is an
Annuity with payments which are not predetermined as to dollar amount.
Payments will vary in accordance with the net investment results of
the Separate Account. The dollar amount of the first monthly Variable
Annuity payment under Sections E8(a), E8(b), or E8(c) will be
determined by applying the Contract Value (after deduction for premium
taxes, if applicable), as of the 15th day of the preceding month, to
the Variable Annuity Purchase Rate Table in Section H2. The number of
Annuity Units to be credited to the Annuitant will be determined by
dividing the first monthly payment by the Annuity Unit value
calculated as of the 15th day of the preceding month. This number of
Annuity Units remains fixed during the Annuity payment period. The
dollar amount of each Variable Annuity payment after the first shall
be determined by multiplying the number of Annuity Units credited to
the Annuitant by the Annuity Unit value as of the 15th day of the
preceding month.

E13 Mortality and Expense Risk Guarantee: SAFECO guarantees that the
dollar amount of each Variable Annuity payment made after the first
payment will not be affected by variations in mortality experience or
expenses.

SECTION F: WITHDRAWALS AND TRANSFERS

F1 Minimum Withdrawal: The minimum Withdrawal is as shown on the
Contract Data Page, or the Contract Value, if less. Except as
otherwise provided in this Contract, the Owner may, at or prior to the
Annuity Date, withdraw all or part of the Contract Value.

10
<PAGE> 14

F2 Minimum Balance After Withdrawal: If any Withdrawal reduces the
remaining balance in a Sub-Account to less than $500, the remaining
balance will also be Withdrawn.

F3 Minimum Transfer: The minimum Transfer from a Sub-Account must be at
least $500, except for Transfers pursuant to certain Programs. If the
Sub-Account from which the Transfer is being made is less than $500
the entire Sub-Account will be transferred, including a Transfer
pursuant to certain Programs.

The minimum Transfer into a Sub-Account must be at least $50.

F4 Withdrawal of Accumulation Units: Upon a Withdrawal, the number of
Accumulation Units remaining under this Contract will be reduced by
the number of such units equal to the total of the Withdrawal,
including applicable charges and taxes withheld, if applicable.

F5 Transfer of Accumulation Units: Upon Transfer from a Sub-Account, the
number of Accumulation Units remaining under that Sub-Account will be
reduced by the number of such units equal to the total of the
requested Transfer, including applicable charges, and taxes.

F6 Minimum Balance After Transfer: If any Transfer, including a Transfer
pursuant to certain Programs, reduces the remaining balance in a
Sub-Account to less than $500, the remaining balance will also be
transferred.

F7 Deferral of Withdrawal Payment:

(a) Except as provided in Section F7(b), payments by SAFECO from
the Contract will be made within seven days after receiving a
Withdrawal request.

(b) SAFECO reserves the right to suspend or postpone payments for
a Withdrawal or Transfer for any period when:

(i) The New York Stock Exchange is closed (other than
customary weekend and holiday closings);

(ii) Trading on the New York Stock Exchange is restricted,
as determined by the rules and regulations of the
Securities and Exchange Commission;

(iii) An emergency exists as a result of which disposal of
securities held in the Separate Account is not
reasonably practicable or it is not reasonably
practicable to determine the value of the Separate
Account's net assets, as determined by the rules
and regulations of the Securities and Exchange
Commission; or

11
<PAGE> 15

(iv) During any other period when the Securities and
Exchange Commission, by order, so permits for the
protection of Owners.

SECTION G: CHARGES AND DEDUCTIONS

G1 Deduction for Annual Administration Maintenance Charge: There is no
annual fee if the Contract Value is $100,000 or above. If the
Contract Value is below $100,000, SAFECO deducts the fee shown on the
Contract Data Page for each Contract Year, or any portion thereof, for
general administrative expenses. This fee is deducted on the last day
of each Contract Year, and in the event of a complete Withdrawal.

The Sub-Account from which the Annual Administration Maintenance
Charge is deducted is determined by the order of the Sub-Accounts as
shown on the Contract Data Page.

Prior to the Annuity Date the fee for general administrative expenses
is not guaranteed and may be changed for future years. However, the
Annual Administration Maintenance Charge may never exceed the
guaranteed maximum fee shown on the Contract Data Page.

G2 Deduction for each Sub-Account of Asset Related Administration Charge:
SAFECO deducts an amount computed on a daily basis as compensation for
administration of the Sub-Accounts. The Asset Related Administration
Charge is a percentage of the average daily net asset value of each
Sub-Account of the Separate Account on an annual basis, as shown on
the Contract Data Page. The Asset Related Administration Charge is
guaranteed not to increase.

G3 Deduction for Contingent Deferred Sales Charge:

(a) A Contingent Deferred Sales Charge will be assessed against
any Withdrawal, and deducted from the amount of the
Withdrawal, based upon the following schedule:

<TABLE>
<CAPTION>
Contract Year Charge
<S> <C>
1 7% of amount Withdrawn
2 6% of amount Withdrawn
3 5% of amount Withdrawn
4 4% of amount Withdrawn
5 3% of amount Withdrawn
6 2% of amount Withdrawn
After 6 0% of amount Withdrawn

</TABLE>

12
<PAGE> 16

(b) A Contingent Deferred Sales Charge will not be deducted:

(i) On any Transfers between Sub-Accounts;

(ii) On the sum of Withdrawals taken in any Contract Year
which does not exceed 10% of the Contract Value;

(iii) On Withdrawals made under a Settlement Option;

(iv) On Withdrawals made pursuant to the death of the
Owner; or

(v) On Withdrawals for payment of the Annual
Administration Maintenance Charge.

G4 Deduction for Withdrawals: SAFECO deducts the charge shown on the
Contract Data Page for each Withdrawal in excess of one per Contract
Year.

G5 Deduction for Transfer Charge: SAFECO reserves the right to assess a
Transfer Charge for each Transfer in excess of twelve Transfers per
calendar year, as shown on the Contract Data Page. Transfers pursuant
to any Program offered by SAFECO may not be subject to the Transfer
Charge, subject to SAFECO's administrative procedures under the
Programs.

G6 Deduction for Mortality and Expense Risk Charge: SAFECO deducts an
amount computed on a daily basis as compensation for assuming the
mortality and expense risk. The Mortality and Expense Risk Charge is
a percentage of the average daily net asset value of the Separate
Account on an annual basis, as shown on the Contract Data Page. The
Mortality and Expense Risk Charge is guaranteed not to increase.

G7 Taxes: Any premium taxes or other taxes levied by any governmental
entity which SAFECO, in its sole discretion, determines have resulted
from the establishment or maintenance of this Contract or any portion
of this Contract, the receipt by SAFECO of Purchase Payments, or the
commencement of Annuity Payments will be deducted from the Contract.
The Sub-Account from which the taxes are deducted is determined by the
order of the Sub-Accounts as shown on the Contract Data Page.

13
<PAGE> 17

SECTION H: ANNUITY PURCHASE RATE TABLE

H1 Mortality Tables Used: The rates in the Variable Annuity Purchase
Rate Table are based upon the 1983a Mortality Table Projected 20 Years
with Projection Scale G; 50% Male and 50% Female. An age setback of 1
year will be used if the Annuity payment begins in the year 2000-2009,
2 years if the Annuity payment begins in the year 2010-2019, and an
additional 1 year setback for each additional ten years. The
effective interest rate assumed in the Variable Annuity Purchase Rate
table is 4%.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

14
<PAGE> 18

H2 Variable Annuity Purchase Rate Table:

CONSIDERATION REQUIRED TO PURCHASE $1 OF MONTHLY ANNUITY*

<TABLE>
<CAPTION>
Joint & Survivor Annuity**
Life Annuity --------------------------
Age of Life 120-Months 100% 50%
Annuitant Annuity Certain Annuity Annuity
- --------- ------- ------------ ------- -------
<S> <C> <C> <C> <C>
55 $208.85 $210.55 $233.18 $221.02
56 205.59 207.42 230.40 218.00
57 202.23 204.22 227.53 214.88
58 198.76 200.94 224.55 211.66
59 195.20 197.58 221.47 208.34
60 191.54 194.16 218.29 204.91
61 187.79 190.67 215.00 201.39
62 183.95 187.12 211.61 197.78
63 180.01 183.53 208.11 194.06
64 176.00 179.88 204.51 190.25
65 171.91 176.20 200.80 186.36
66 167.75 172.50 197.00 182.38
67 163.53 168.77 193.09 178.31
68 159.25 165.04 189.08 174.16
69 154.90 161.31 184.98 169.94
70 150.50 157.59 180.77 165.64
71 146.05 153.89 176.48 161.26
72 141.55 150.23 172.10 156.82
73 137.02 146.62 167.63 152.32
74 132.46 143.09 163.09 147.78
75 127.90 139.63 158.49 143.19
</TABLE>

* The consideration shown refers to the net value used to purchase an Annuity,
after premium taxes or other applicable charges are deducted.

** Annuitant and spouse are assumed to be the same age.

Age is to be taken for the exact number of years and completed months.
Values for fractional ages are obtained by simple interpolation.

Consideration for ages or combination of lives not shown will be furnished by
SAFECO upon request.

<PAGE> 1

EXHIBIT 99.4.b

FIXED ACCOUNT ANNUITY RIDER

The Rider is a part of the Contract to which it is attached with regard to the
general account of SAFECO, the Fixed Account. This Rider is effective upon
issuance.

Section A4, Annuity Date, is amended to read as follows:

Annuity Date: The date selected by the Owner for commencing Annuity
payments under this Contract. Separate dates may be selected by the
Owner for commencing variable Annuity payments and fixed Annuity
payments. The day of the month on which the payments will be made
will be determined by SAFECO. Any Annuity Date selected cannot be
later than the date the Annuitant attains age 90.

Section A9, Contract Date, is amended to read as follows:

Contract Date: The earlier of the date on which the initial Net
Purchase Payment is allocated to the Separate Account or the initial
Net Purchase Payment is allocated to the Fixed Account, as shown on
the Contract Data Page.

Section A10, Contract Value, is amended to read as follows:

Contract Value: The sum of the Owner's interest in the Sub-Accounts
of the Separate Account and the Fixed Account. Fixed Account Contract
Value refers to that portion of the Contract Value held in the Fixed
Account.

Section A23, Transfer, is amended to read as follows:

The redemption of units from a Sub-Account(s) and the purchase of
units of another Sub-Account(s), and the transfer of Contract Value to
or from the Fixed Account from or to the Sub-Account(s).

Section C5, Application of Purchase Payments to Eligible Investments, is
amended to read as follows:

Application of Purchase Payments to Eligible Investments: Purchase
Payments applied to the Separate Account are allocated to Sub-
Accounts of the Separate Account and the Fixed Account as provided in
Section I1.

Section D2, Non-Participation in Surplus, is amended to read as follows:

The Variable Annuity and Fixed Annuity portions of this Contract will
not share in any distribution of profits, losses, or surplus of
SAFECO.

FA-1
<PAGE> 2

Section G1, Deduction for Annual Administration Maintenance Charge, is amended
to read as follows:

Deduction for Annual Administration Maintenance Charge: There is no
annual fee if the Contract Value is $100,000 or above. If the
Contract Value is below $100,000, SAFECO deducts the fee shown on the
Contract Data Page for each Contract Year, or any portion thereof, for
general administrative expenses. This fee is deducted on the last day
of each Contract Year, and in the event of a complete Withdrawal.

The Sub-Account or the Fixed Account from which the Annual
Administration Maintenance Charge is deducted is determined by the
order of the Sub-Accounts and the Fixed Account as shown on the
Contract Data Page.

Section G3(b), A Contingent Deferred Sales Charge will not be deducted, is
amended to include the following:

(vi) On Transfers from a Sub-Account to the Fixed Account; or

(vii) On Transfers from the Fixed Account under Section I11.

Section I: FIXED ACCOUNT, is added to the Contract:

Section I1, Fixed Account Allocations, is added to the Contract:

Fixed Account Allocations: The Owner may make payments into the Fixed
Account, subject to acceptance and approval by SAFECO. The Fixed
Account consists of the total Fixed Account Allocations received by
SAFECO under this Rider and not previously withdrawn, plus interest on
each such Fixed Account Allocation, less any applicable charges and
deductions. Fixed Account Allocations will become part of the general
account of SAFECO to be so used and invested and will not be
segregated from SAFECO's other assets.

Section I2, Interest Crediting, is added to the Contract:

Interest Crediting:

(a) After receipt of each Fixed Account Allocation, and in
accordance with paragraph (b) below, SAFECO will credit
interest to the Fixed Account Allocation at a rate determined
according to SAFECO's investment year method of assigning
interest credits. Under this method the interest credits will
be based on the original period of receipt of such funds.

FA-2
<PAGE> 3
(b) Each Fixed Account Allocation will be credited with the
Guaranteed Interest Rate determined for such Fixed Account
Allocation commencing on the date the Fixed Account Allocation
is received by SAFECO.

Section I3, Establishment of Interest Rates, is added to the Contract:

Establishment of Interest Rates: Guaranteed Interest Rates for each
Fixed Account Allocation will be determined by SAFECO as soon as
practicable prior to each Initial or Subsequent Interest Guarantee
Period.

Section I4, Guaranteed Interest Rate, is added to the Contract:

Guaranteed Interest Rate:

(a) SAFECO's Guaranteed Interest Rate on any Fixed Account
Allocation will be effective for the Initial Interest
Guarantee Period applicable to such Fixed Account Allocation.
The Initial Interest Guarantee Period shall be no less than
the twelve (12) month period commencing on the date a Fixed
Account Allocation is received by SAFECO.

(b) Upon the expiration of the Initial Interest Guarantee Period
applicable to any Fixed Account Allocation, the Guaranteed
Interest Rate applicable to such a Fixed Account Allocation
plus credited interest will be that rate determined by SAFECO
to be effective for each successive Subsequent Interest
Guarantee Period and may or may not be the same as any
interest rate applicable to new Fixed Account Allocations.
The Subsequent Interest Guarantee Period shall be the period
commencing on the expiration of the Initial Guarantee Period
and shall be no less than twelve (12) months. Each successive
Subsequent Interest Guarantee Period shall be the period
commencing on the expiration of the prior Subsequent Interest
Guarantee Period and shall be no less than twelve (12) months.

(c) SAFECO's Guaranteed Interest Rate on any subsequent Fixed
Account Allocation will be that rate in effect at the time of
such Fixed Account Allocation, and may or may not be the same
as any interest rate previously applicable to Fixed Account
Allocations or any interest rate for Subsequent Interest Rate
Guarantee Periods.

(d) The Guaranteed Interest Rate credited to monies allocated to
the Fixed Account will never be less than an annual effective
interest rate of 3% for any Contract Year.

FA-3
<PAGE> 4
Section I5, Settlement Options, is added to the Contract:

Settlement Options: On the date upon which SAFECO is to issue an
Annuity under this Rider, SAFECO shall charge the premium for such
Annuity against the Fixed Account. Such premium shall be the premium
calculated in accordance with the Fixed Annuity Purchase Rate Table in
Section I8, plus premium taxes, if required by state law. An Annuity
may be issued only in one of the forms described below, or such other
forms which SAFECO agrees to issue under this Rider. Options (a), (b)
and (c) are irrevocable once they have begun.

(a) Fixed Life Annuity: Monthly payments are made to the
Annuitant commencing on the Annuity Date, if he or she is then
living, and the last payment is that payment due immediately
on or before his or her death. No death benefit is payable
under this option.

(b) Fixed Life Annuity with 120 or 240 Monthly Payments
Guaranteed: Monthly payments are made to the Annuitant
commencing on the Annuity Date. If at the death of the
Annuitant the guaranteed number of payments has not been
received by the Annuitant, then payments will be made to the
Beneficiary for the remainder of the guaranteed period.

(c) Fixed Joint and Survivor Life Annuity: Monthly payments are
made to the Annuitant commencing on the Annuity Date. After
the death of the Annuitant, payments will be continued to the
Annuitant's spouse for as long as he or she lives.

Section I6, Automatic Option, is added to the Contract:

Automatic Option: If, as of the Annuity Date, a Settlement Option has
not been selected under this Rider, SAFECO will make payments under
Section I5(c), if the Beneficiary is a natural person. If, as of the
Annuity Date, a Settlement Option has not been selected and the
Beneficiary is a non-natural person, SAFECO will make payments under
Section I5(a).

Section I7, Commencement of Annuity Payments, is added to the Contract:

Commencement of Annuity Payments: Subject to the limitations of
Sections A4, E8, and I5, an Owner may elect:

(a) to have variable Annuity payments commence on the Annuity
Date, pursuant to one of the Settlement Options described in
Section E8, and:

(i) continue to have Net Purchase Payments
credited to the Fixed Account; and

(ii) choose a "second Annuity Date" for the
commencement of fixed Annuity payments; or

FA-4
<PAGE> 5
(b) to have fixed Annuity payments commence on the Annuity Date,
pursuant to one of the Settlement Options described in Section
I5, and:

(i) continue to have Net Purchase Payments
credited to a Sub-Account(s); and

(ii) choose a "second Annuity Date" for the
commencement of variable Annuity payments.

SAFECO must receive any such election and the selected "second Annuity
Date" prior to any Annuity Date. If no such election is made, SAFECO
will commence both variable and fixed Annuity payments on the Annuity
Date pursuant to the applicable Settlement Options. Any Annuity Date
selected, including the "second Annuity Date", cannot be later than
the date the Annuitant attains age 90.

Section I8, Mortality Tables Used, is added to the Contract:

Mortality Tables Used: The rates in the Fixed Annuity Purchase Rate
Table are based upon the 1983a Mortality Table Projected 20 years with
Projection Scale G: 50% Male and 50% Female. The effective interest
rate assumed in the Fixed Annuity Purchase Rate Table is 3%.

FA-5
<PAGE> 6
Fixed Annuity Purchase Rate Table

CONSIDERATION REQUIRED TO PURCHASE $1 OF MONTHLY ANNUITY*

<TABLE>
<CAPTION>
Joint & Survivor Annuity**
Life Annuity -------------------------------
Age of Life 10-Years 100% 50%
Annuitant Annuity Certain Annuity Annuity
--------- ------- ------------ ------- -------
<S> <C> <C> <C> <C>
55 $236.33 $238.26 $267.87 $252.10
56 231.98 234.07 263.96 247.97
57 227.55 229.82 259.98 243.77
58 223.04 225.49 255.83 239.44
59 218.43 221.11 251.58 235.01
60 213.73 216.66 247.23 230.48
61 208.95 212.15 242.77 225.88
62 204.08 207.60 238.20 221.14
63 199.13 203.02 233.54 216.33
64 194.11 198.41 228.77 211.44
65 189.04 193.78 223.91 206.47
66 183.90 189.14 218.95 201.43
67 178.71 184.51 213.91 196.31
68 173.48 179.90 208.77 191.12
69 168.20 175.32 203.55 185.87
70 162.88 170.77 198.24 180.56
71 157.59 166.32 192.99 175.29
72 152.29 161.93 187.69 169.99
73 146.98 157.62 182.22 164.60
74 141.67 153.42 176.70 159.19
75 136.38 149.34 171.13 153.75
</TABLE>

* The consideration shown refers to the net value used to purchase an
Annuity, after premium taxes or other applicable charges are deducted. For
example, it would cost $189,040 for an Annuitant age 65 to receive a Fixed
Life Annuity which provides a monthly income of $1,000.

** Annuitant and spouse are assumed to be the same age.

Age is to be taken for the exact number of years and completed months. Values
for fractional ages are obtained by simple interpolation.

Consideration for ages or combination of lives not shown will be furnished by
SAFECO upon request.

FA-6
<PAGE> 7
Section I9, Minimum Balance After Withdrawal, is added to the Contract:

Minimum Balance After Withdrawal: If any Withdrawal reduces the
remaining balance in the Fixed Account to less than $500, the
remaining balance will also be Withdrawn.

Section I10, Minimum Transfer, is added to the Contract:

Minimum Transfer: All Transfers from the Fixed Account, other than
pursuant to a Program, are subject to a $500 minimum.

The minimum Transfer into the Fixed Account must be at least $50.

Section I11, Transfers, is added to the Contract:

Transfers: The Owner may elect to participate in only one of the
Programs in any Contract Year or elect to transfer up to 10% of the
value of the Fixed Account Contract Value at the time of the Transfer,
in a Contract Year. SAFECO may waive this limitation upon written
notice to the Owner.

Section I12, Deferral of Withdrawal Payment, is added to the Contract:

Deferral of Withdrawal Payment: SAFECO retains the right to defer the
payment of Withdrawals from the Fixed Account for a period of six
months after receiving a Withdrawal request. If SAFECO defers payment
of Withdrawals under this Section, SAFECO will pay interest on the
deferred payments at the rate specified by state law at the time of
the Withdrawal request.

All other terms and conditions of the Contract remain unchanged.

SAFECO LIFE INSURANCE COMPANY

R.A. Pierson
Senior Vice President and Secretary

FA-7

<PAGE> 1
EXHIBIT 99.4.c.

ENDORSEMENT

Individual Retirement Annuity Endorsement

This Endorsement forms a part of the Contract to which it is attached. This
Endorsement applies to a Contract issued under Section 408 of the Internal
Revenue Code of 1986, as amended (the "Code"). In the case of a conflict with
any provision in the Contract or Rider, the terms of this Endorsement will
control. This Endorsement is effective upon issuance to the Owner.

Section A10, Contract Date, is amended to read as follows:

Contract Issue Date: The earlier of the date on which all or a
portion of the initial Purchase Payment is allocated to either the
Separate Account or the Fixed Account.

Section A15, Owner, is amended to read as follows:

Owner: The person named in the Application who has all rights under
this Contract. The Annuitant shall be the Owner of this Contract.

Section B14, Exclusive Benefit, is added to the Contract:

Exclusive Benefit: This Contract is established for the exclusive
benefit of the Annuitant and Beneficiaries.

Section B15, Nonforfeitable, is added to the Contract:

Nonforfeitable: The interest of the Annuitant in this Contract is
nonforfeitable.

Section B16, Nontransferable by the Annuitant, is added to the Contract:

Nontransferable: This Contract is nontransferable by the Annuitant.

Section B17, Life Insurance Contracts, is added to the Contract:

Life Insurance Contracts: No part of the Contract Value will be
invested in life insurance contracts.

Section C6, Contribution Limit, is added to the Contract.

Contribution Limit:

E-1
<PAGE> 2
(a) If this Contract is purchased to fund an Individual Retirement
Annuity under Code Section 408(b), the annual contribution to
the Contract must be in cash and may not exceed the lesser of
$2,000 or 100% of Compensation, or such other amount permitted
by the Code, as amended. In the case of a spousal IRA,
separate Contracts are established for each spouse. Annual
Contributions to the two Contracts together may not exceed
$2,250, while no more than $2,000 may be contributed to any
one of the two Contracts, or such other amount permitted by
the Code, as amended. Such limitations shall not include
rollover contributions under Code Sections 402(c), 403(a)(4),
or 408(d)(3). Deductibility of contributions depends on
active participation in an employer sponsored retirement plan
and adjusted gross income.

(b) If this Contract is purchased to fund a Simplified Employee
Pension under Code Section 408(k), the annual contribution to
the Contract may not exceed the lesser of 15% of Compensation
or $30,000.

(c) Compensation is defined in Code Section 219(f) and the
Regulations thereunder as follows: Wages, salaries,
professional fees, or other amounts derived from or received
for personal services actually rendered (including, but not
limited to commissions paid to salesmen, compensation for
services on the basis of a percentage of profits, commissions
on insurance premiums, tips, and bonuses) and includes "earned
income", as defined in Code Section 401(c)(2) (reduced by the
deduction that the self-employed individual takes for
contributions made to a self-employed retirement plan). For
purposes of this definition, Code Section 401(c)(2) shall be
applied as if the term "trade" or "business" for purposes of
Code Section 1402 included "services" described in Subsection
(c)(6). Compensation does not include amounts derived from or
received as earnings or profits from property (including but
not limited to interest and dividends) or amounts not
includible in gross income. Compensation also does not
include any amount received as a pension or annuity or as
deferred compensation. Compensation shall include any amount
includible in the individual's gross income under Code Section
71 with respect to a "divorce or separation instrument" as
defined in Code Section 71(b)(2).

Section E5, Death of Annuitant is deleted.

Section E5, Minimum Distribution Rules, is added to the Contract:

Minimum Distribution Rules: All Settlement Options and withdrawals
shall distribute the Contract Value pursuant to the Minimum
Distribution Rules in Code Section 408(a)(6) or Code Section 408(b)(3)
and Code Section 401(a)(9), including the minimum distribution
incidental benefit requirement of Code Section 401(a)(9)(G) and
Proposed Regulation Section 1.401(a)(9)-2.

E-2
<PAGE> 3
(a) Minimum Distribution Rules:

(i) Required Beginning Date: Minimum Distributions must
begin by the Annuitant's Required Beginning Date
defined as April 1st following the year the Annuitant
reaches age 70-1/2. If Annuitant has reached age
70-1/2 as of the Contract Date, the Required Beginning
Date is no later than the close of the taxable year
following the taxable year during which the Contract
is issued.

(ii) Minimum Distribution Requirements The Minimum
Distributions must be in equal or substantially equal
amounts over:

(I) The life of the Annuitant or the lives of the
Annuitant and the designated Beneficiary; or

(II) A period not extending beyond the life
expectancy of the Annuitant, or the joint and
last survivor expectancy of the Annuitant and
the designated Beneficiary.

(iii) Minimum Amounts to be Distributed: If the
Annuitant's entire Contract Value is to be
distributed in other than a lump sum, then the amount
to be distributed each year (commencing with the
first calendar year for which distributions are
required to begin and for each calendar year
thereafter) must be at least an amount equal to the
quotient obtained by dividing the Contract Value by
the lesser of (1) the applicable life expectancy of
the Annuitant or (2) if the Annuitant's spouse is not
the designated beneficiary, the applicable divisor
determined from the table set forth in Question and
Answer 4 or Question and Answer 5, as applicable, of
Proposed Regulation Section 1.401(a)(9)-2. Payments
must be made in periodic payments of intervals no
longer than one year. In addition, payments must be
either non-increasing or they may increase only as
provided in Question and Answer F-3 of Proposed
Regulation Section 1.401(a)(9)-1. Distributions
after the death of the Annuitant shall be calculated
using the applicable life expectancy as the relevant
divisor without regard to Proposed Regulation Section
1.401(a)(9)-2.

(b) Life Expectancy: The Annuitant and a designated beneficiary
who is the spouse of a deceased Annuitant may elect whether or
not to recalculate life expectancy. Life expectancy may be
recalculated no more frequently than annually. This election
is irrevocable and shall apply to all subsequent years. It
must be made by written notice to SAFECO at its Home Office no
later than the Required Beginning Date. If an election is not
made, life expectancy for the Annuitant and a designated
beneficiary who is a spouse will be recalculated.

E-3
<PAGE> 4
The life expectancy of a non-spouse Beneficiary may not be
recalculated. Life expectancy will be calculated using the
attained age of such Beneficiary during the calendar year in
which distributions are required to begin and payments for
subsequent years shall be calculated based on such life
expectancy reduced by one for each calendar year which has
elapsed since the calendar year life expectancy was first
calculated.

Life expectancy and joint and last survivor expectancy are
computed by use of the expected return multiples contained in
Tables V and VI of Regulation Section 1.72-9.

(c) Annuitant's Death Prior to Required Beginning Date: If the
Annuitant dies before distributions are considered to have
commenced, the Contract Value must be distributed according to
one of the following options:

(i) The entire Contract Value remaining must be
distributed by December 31st of the year which
contains the fifth anniversary of the Annuitant's
death; or

(ii) Unless the Annuitant or Beneficiary has elected (i)
the entire Contract Value must be distributed over a
period not extending beyond a designated
Beneficiary's life or life expectancy in
substantially equal installments.

Under this option a non-spouse Beneficiary must begin
distributions no later than December 31st of the calendar year
immediately following the calendar year of the Annuitant's
death. The Beneficiary may elect at any time to receive
greater payments.

A surviving spouse may elect, no later than the earlier of
December 31st of the calendar year containing the fifth
anniversary of the Annuitant's death or the date distributions
are required to begin, to receive equal or substantially equal
payments over the life or life expectancy of the surviving
spouse commencing at any date prior to the later of (1)
December 31st of the calendar year immediately following the
calendar year in which the Annuitant died and (2) December
31st of the calendar year in which the Annuitant would have
attained age 70-1/2. The surviving spouse may increase the
frequency or amount of such payments at any time.

A surviving spouse may also elect to treat the Contract as the
spouse's own, and then delay distributions until the 1st of
April following the calendar year in which the spouse reaches
age 70-1/2 if that date is later that the Annuitant's death or
the date the Annuitant would have reached age 70-1/2. Such
election is considered made if:

(i) Amounts required to be distributed on the Annuitant's
death have not been distributed from the Contract;

E-4
<PAGE> 5
(ii) A regular IRA contribution is made to the Contract;

(iii) A rollover is made from the Contract; or

(iv) The spouse fails to make another election.

(d) Annuitant's Death On or After Required Date: If the Annuitant
dies on or after the date distributions are considered to have
commenced, payment to the designated Beneficiary must continue
at least as rapidly as the method in effect prior to the
Annuitant's death.

Section E6, Death of Owner Prior to Annuity Date is Deleted.

Section E6, Minimum Guaranteed Death Benefit on Death of Annuitant Prior to
Required Beginning Date, is added to the Contract:

(a) The Minimum Guaranteed Death Benefit: The initial Minimum
Guaranteed Death Benefit shall be equal to the initial Net
Purchase Payment. Additional Net Purchase Payments are added
to the Minimum Guaranteed Death Benefit. The Minimum
Guaranteed Death Benefit will be adjusted after any Withdrawal
by multiplying it by the ratio of the Contract Value after the
Withdrawal to the Contract Value before the Withdrawal. The
Minimum Guaranteed Death Benefit shall be redetermined on each
Six Year Contract Anniversary by taking the greater of the
Contract Value on that Six Year Contract Anniversary or the
previous Minimum Guaranteed Death Benefit. After the
Annuitant's death, the Minimum Guaranteed Death Benefit will
be reduced dollar for dollar by any Withdrawals.

(b) Death Benefit Options: Upon the death of the Annuitant prior
to the annuity date, the Beneficiary may elect a Settlement
Option or to receive a single lump sum payment.

(c) If the Annuitant dies prior to the Required Beginning Date and
before Minimum Distributions have commenced, and provided that
the Beneficiary provides due proof of death in a form
satisfactory to SAFECO and has elected a Death Benefit Option
within six (6) months of the date of death, the amount of the
Minimum Guaranteed Death Benefit will be the greater of:

(i) the Contract Value on the date of election of
a Death Benefit Option by the Beneficiary; or

(ii) the Minimum Guaranteed Death Benefit.

(d) If notification of death or election of a Death Benefit Option
occurs after the six- month anniversary of the date of death,
the death benefit will be the Contract Value on the date of
election of a Death Benefit Option determined

E-5
<PAGE> 6
as follows: the Contract Value calculated as of the six-month
anniversary of the date of death will be compared with the
last calculated Minimum Guaranteed Death Benefit to determine
if additional funds are required to be added by SAFECO to
equal such Minimum Guaranteed Death Benefit. SAFECO will
supplement any deficiency in Contract Value, such that
Contract Value will equal the Minimum Guaranteed Death
Benefit. Thereafter, until the date of election of a Death
Benefit Option, the Contract Value attributable to SAFECO's
contribution will be guaranteed and interest paid thereon at
the then prevailing money market rate; the portion of Contract
Value existing on the six month anniversary of the date of
death will be subject to adjustment reflecting the investment
experience for the period from the six-month anniversary to
the election of a Death Benefit Option. In addition, the
amount of the death benefit will be reduced dollar for dollar
by any Withdrawal after the Annuitant's death.

Section E7, Death of Owner After Annuity Date, is deleted.

Section E14, Commencement of Minimum Distributions, is added to the Contract:

(a) Minimum Distributions will commence no later than April 1st
following the year in which the Annuitant attains age 70-1/2
unless the Annuitant sends a written notice to SAFECO that the
minimum distributions for this Contract will be taken from
another IRA and requests that distributions not be taken from
this Contract.

An individual may satisfy the minimum distribution
requirements under Code Sections 408(a)(6) and 408(b)(3) by
receiving a distribution from one IRA that is equal to the
amount required to satisfy the minimum distribution
requirements described above.

(b) If SAFECO has not received written notice prior to March 1st
following the year in which the Annuitant attains age 70-1/2:

(i) If designated beneficiary information has been
provided to SAFECO, SAFECO will make the Required
Minimum Distributions at least annually based on
joint life expectancy with recalculation of life
expectancy in accordance with the Minimum
Distribution Rules in Code Section 401(a)(9); or

(ii) If designated Beneficiary information has not been
provided to SAFECO, SAFECO will make the Required
Minimum Distributions at least annually based on
single life expectancy with recalculation of life
expectancy in accordance with the Minimum
Distribution Rules in Code Section 401(a)(9).

Section G3(b)(viii), is added to the Contract:

E-6
<PAGE> 7
(viii) On Required Minimum Distribution Payments over life
expectancy.

Section G6, Taxes, is amended to read as follows:

Taxes: SAFECO reserves the right to deduct premium taxes levied by
any governmental entity which SAFECO, in its sole discretion,
determines have resulted from the establishment or maintenance of this
Contract or any portion of this Contract, the receipt by SAFECO of
Purchase Payments or Fixed Account Allocations, or the commencement of
Annuity payments. If SAFECO exercises this right the Sub-Account
from which the taxes will be deducted will be determined by the order
of the Sub-Accounts listed on the Contract Data Page.

All other terms and conditions of the Contract remain unchanged.

SAFECO LIFE INSURANCE COMPANY

R.A. Pierson
Senior Vice President and Secretary

E-7

<PAGE> 1
EXHIBIT 99.5

[logo] SAFECO(R)
LIFE INSURANCE

MAINSAIL VARIABLE ANNUITY
INDIVIDUAL VARIABLE ANNUITY APPLICATION

Complete and mail with your payment to:
SAFECO Life Insurance Company
Pension Department
P.O. Box 34690
Seattle, WA 98124-1690

Please check all appropriate boxes.

INITIAL PURCHASE PAYMENT MINIMUMS:

Qualified Funds: $2,000
Non-Qualified Funds: $5,000
Systematic Investing: $100

<TABLE>
<S> <C>
- --------------------------------------------------------------------------------------------------------------------------------
1. OWNER CONTRACT OWNER:
INFORMATION
Name ___________________________________________________[ ] Male [ ] Female [ ] Trustee
Non-Qualified: First Middle Last
If no annuitant
specified in Mailing Address __________________________________________________________________________
Section 2, Street City State Zip
Contract Owner
will also be the Telephone (____)________________ Soc. Sec. #_____________________ Date of Birth __________

Annuitant. JOINT OWNER (NON-QUALIFIED AND SPOUSE ONLY):

Name ___________________________________ Soc. Sec. # _____________ Date of Birth _________
First Middle Last
- --------------------------------------------------------------------------------------------------------------------------------
2. ANNUITANT
INFORMATION Name ___________________________________________________________ [ ] Male [ ] Female
First Middle Last
Non-Qualified Mailing Address__________________________________________________________________________
Only Street City State Zip

Telephone (____)_______________ Soc. Sec. # _____________________ Date of Birth ________
- --------------------------------------------------------------------------------------------------------------------------------
3. TYPE OF A. [ ] INDIVIDUAL RETIREMENT ANNUITY B. [ ] NON-QUALIFIED ANNUITY
ANNUITY [ ] Contributory IRA for 19___ [ ] 1035(a) Exchange*
[ ] Rollover from a Qualified C. [ ] SIMPLIFIED EMPLOYEE PENSION PLAN
Retirement Plan, IRA or TSA* (Internal Revenue Code Section 408(k))
[ ] Transfer from another IRA* [ ] Salary Reduction (SARSEP)
Have you received an IRA Disclosure Name of Employer:____________________
Statement (Form LP-592)? [ ] Yes [ ] No * NOTE: Must complete Form LP-547
- --------------------------------------------------------------------------------------------------------------------------------
4. BENEFICIARIES PRIMARY: Name ____________________________________________________ Percentage ______%
First Middle Last

Soc. Sec. # ___________________ Date of Birth __________ Relationship to Annuitant ___________

[ ] PRIMARY
[ ] CONTINGENT: Name ________________________________________________ Percentage ______%
First Middle Last

Soc. Sec. # ___________________ Date of Birth __________ Relationship to Annuitant ___________
- --------------------------------------------------------------------------------------------------------------------------------
5. INVESTMENT SAFECO RESOURCE FEDERATED INSURANCE MANAGEMENT TCI PORTFOLIOS, INC.:
INSTRUCTIONS SERIES TRUST: SERIES TRUST: _____ % Balanced
_____ % Money Market _____ % Utility _____ % International
Choose one or more _____ % Bond _____ % High Yield Bond WANGER ADVISORS TRUST:
of the following. _____ % Equity LEXINGTON _____ % US Small Cap
Whole percentages _____ % Northwest _____ % Natural Resources Trust Advisor
only. _____ % Growth _____ % Emerging Markets Fund, Inc.
_____ % FIXED ACCOUNT TOTAL OF ALL PERCENTAGES MUST EQUAL 100%

[ ] PORTFOLIO REBALANCING: I elect to rebalance my variable sub-accounts [ ] quarterly [ ] semi-annually
[ ] annually in the same percentages as indicated above. $10,000 minimum balance required.

Purchase Payments to the Fixed Account will be allocated immediately upon receipt. Purchase Payments to the
Variable Sub-Accounts may be invested in the Money Market Sub-Account until the expiration of 15 days from
the date the first Purchase Payment is received, and then will be invested according to your investment
instructions.
- --------------------------------------------------------------------------------------------------------------------------------
6. REPLACEMENT Will the annuity applied for here replace any life insurance or annuity from this or any other company?
ANNUITY [ ] Yes [ ] No If yes, give full name of company and policy number below.

Company Name: ________________________________________ Policy Number: ________________
- --------------------------------------------------------------------------------------------------------------------------------

LPC-678 4/95 (R) Registered trademark of SAFECO Corporation
</TABLE>
<PAGE> 2
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
8. SUITABILITY Do you understand that because variable benefits and contract values are based on investment experience of
the Separate Account and cannot be predicted or guaranteed as to dollar amounts, variable annuity contracts
Questions must should be purchased for long term retirement purposes? [ ] Yes [ ] No
be answered. WHAT IS YOUR: WHAT IS YOUR INVESTMENT OBJECTIVE:
Occupation? _______________________ _____ High Income _____ Long Term Growth
Gross Income? $______________________ _____ Tax Advantage _____ Growth with Income
Net Worth? $______________________ _____ Other ( specify ) _______________________
Are you a Registered Representative of a Broker/Dealer? [ ] Yes [ ] No If yes, please give name and
address of broker dealer: ____________________________________________________________________________________

________________________________________________ ___________________________________________
PNMR Authorized Principal (HOME OFFICE USE ONLY) Date
- ------------------------------------------------------------------------------------------------------------------------------------
9. TELEPHONE [ ] Yes, I would like the option to use Telephone Transfer [ ] No, I do not wish to use the privilege at
TRANSFER this time

I hereby authorize SAFECO to accept and act on telephone instructions from me or any person or persons listed
below, regarding the transfer of funds between, or change in the percentage of my allocations among,
portfolios of my variable annuity contract. This authorization will remain in effect until SAFECO receives
written revocation from me.

SAFECO will employ reasonable procedures to confirm that instructions communicated by telephone are genuine.
SAFECO reserves the right to refuse telephone instructions from any caller when unable to confirm to SAFECO's
satisfaction that the caller is authorized to give those instructions.

To transfer by telephone call SAFECO at 1-800-899-5280. All telephone transfer calls will be recorded. You or
your authorized third party will be required to provide the identification information listed below. Written
confirmation will be mailed to you. If additional room is needed for Third Party names, attach sheet

AUTHORIZED THIRD PARTY: (please print full name) ____________________________________________

ID INFORMATION (REQUIRED): Mother's Maiden Name ____________________________________________
- ------------------------------------------------------------------------------------------------------------------------------------
10. PROGRAMS I have read the information in the prospectus in regards to the following programs and would like to elect:
1. [ ] SYSTEMATIC INVESTING: Please complete Form LPS-5318 and remit with this application.
Min $10,000
balance required 2. [ ] INTEREST/APPRECIATION SWEEP: I elect to have [ ] the interest earned in my Fixed Account OR
to elect Sweep. [ ] appreciation of my Money Market sub-account, in excess of $___________ (cannot be less than
total payments), transferred [ ] monthly [ ] quarterly [ ] annually into the sub-accounts listed
below:

3. [ ] DOLLAR COST AVERAGING: I elect to transfer $______________(min $50) or __________% from the
[ ]___________________________________________ variable sub-account OR [ ] Fixed Account*
*(max 1.33% per month, 4% per quarter) [ ] monthly [ ] quarterly to the sub-account(s) listed below:

Money Market ______ % (DCA Only) Bond ______ % Equity ______ %
Growth ______ % Northwest ______ % Utility ______ %
High Yield Bond ______ % Nat. Resources ______ % Emerging Markets ______ %
Balanced ______ % International ______ % US Small Cap ______ %
- ------------------------------------------------------------------------------------------------------------------------------------
11. STATEMENT OF HAVE YOU RECEIVED A CURRENT PROSPECTUS? [ ] YES [ ] NO
OWNER(S) WOULD YOU LIKE TO RECEIVE A STATEMENT OF ADDITIONAL INFORMATION? [ ] YES [ ] NO
I declare that the statements and answers on this application are full, complete and true, to the best of my
knowledge and belief, and shall form a part of the annuity Contract issued hereon. I understand and agree
that any fees or taxes will be deducted from my Contract Value or Payment, as applicable.

Signed at_______________
______________________________ ________________________________________ on _______________
Signature of Owner Signature of Joint Owner (if applicable) (mo,day,year)
- ------------------------------------------------------------------------------------------------------------------------------------
12. REGISTERED To the best of my knowledge, the annuity applied for here [ ] DOES [ ] DOES NOT replace any life insurance or
REPRESENTATIVE annuity in this or any other company. I hereby certify that I witnessed the signature(s) above and that the
INFORMATION answers to the questions above are true to the best of my knowledge and belief.

MAIL CONTRACT
DIRECTLY TO: REGISTERED REPRESENTATIVE'S SIGNATURE: ___________________________________________________
[ ] client's
address REGISTERED REPRESENTATIVE'S NAME (PLEASE PRINT): _________________________________________
[ ] registered
rep's office SAFECO REP #: _____________________________ TELEPHONE #: (_____)______________________

LOCATION ID #: ____________________________ DATE: ____________________________________
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE> 1

EXHIBIT 99.6.a.

ARTICLES OF INCORPORATION
OF
SAFECO LIFE INSURANCE COMPANY
(As Amended to November 26, 1990)

BE IT KNOWN that the undersigned

H. K. Dent
O. D. Fisher
William G. Reed
W. L. Campbell
Gordon H. Sweany

have associated themselves together and do hereby associate themselves together
for the purpose of forming a corporation under the laws of the State of
Washington, and do declare as follows:

The names and addresses of the incorporators are:

<TABLE>
<CAPTION>
NAME ADDRESS
<S> <C>
H. K. Dent Seattle, Washington
O. D. Fisher Seattle, Washington
William G. Reed Seattle, Washington
W. L. Campbell Seattle, Washington
Gordon H. Sweany Seattle, Washington
</TABLE>

The name of the company is SAFECO Life Insurance Company.

III

The objects for which the company is formed are to transact insurance
business, make insurance and engage in any other lawful business. The kinds of
insurance the company will issue are as follows:
<PAGE> 2
1. Life Insurance: Insurance on human lives and insurance appertainlng
thereto or connected therewith; including, but not limited to, the granting of
annuities and endowment benefits, additional benefits in the event of death by
accident, additional benefits in the event of the total and permanent
disability of the insured, and optional modes of settlement of proceeds.

2. Disability Insurance: Insurance against bodily injury, disablement
or death by accident, disablement resulting from sickness, and every insurance
appertaining thereto.

3. The said company shall be operated as a stock insurance company, and
may issue policies upon both the participating plan and the non- participating
plan. The Board of Directors of said company may from time to time distribute
equitably to the holders of participating policies issued by said company such
sum out of the earnings as in its judgment is proper, after setting aside from
said earnings such sums for dividends to be paid stockholders and for surplus
as the Board of Directors shall see fit. Such distribution of earnings may be
made by an equitable apportionment to holders of participating policies issued
by the company irrespective of the class and character of the risks, insureds
or types of policies involved, or the Board of Directors may in its discretion
classify the risks of the company according to the various hazards covered or
types of policies or insureds involved or otherwise as to the Board may appear
equitable and distribute such earnings or any portion thereof to the holders of
participating policies in each classification according to the experience of
the company in such cases or otherwise as the Board shall see fit.

The amount of the capital stock shall be Five Million ($5,000,000.00)
Dollars, and the number of shares shall be twenty thousand (20,000), and the
par value of each of said shares shall be Two Hundred Fifty ($250.00) Dollars.

The duration of the existence of this company shall be perpetual and
forever.

The number of directors of this company shall be fixed as provided in its
bylaws, and may be changed from time to time by

-2-
<PAGE> 3
amending the bylaws as therein provided, but the number thereof shall never be
less than five (5) nor more than thirty (30). The names and addresses of the
directors who shall constitute the Board of Directors of the company for the
initial term of not more than six (6) months from the date hereof are as
follows:

<TABLE>
<CAPTION>
NAME ADDRESS
<S> <C>
J. H. Ballinger Seattle, Washington
Edw. K. Bisher Aberdeen, Washington
Mrs. A. Scott Bullitt Seattle, Washington
W. L. Campbell Seattle, Washington
Norton Clapp Seattle, Washington
H. K. Dent Seattle, Washington
R. M. Dooly Portland, Oregon
O. D. Fisher Seattle, Washington
Reuben H. Fleet Los Angeles, California
Chase Garfield Los Angeles, California
Edward I. Garrett Seattle, Washington
Thomas F. Gleed Seattle, Washington
Joshua Green Seattle, Washington
Chapin Henry Seattle, Washington
J. A. Humbird Vancouver, B.C.
Richard E. Lang Seattle, Washington
John L. Locke Seattle, Washington
William G. Reed Seattle, Washington
Volney Richmond, Jr. Seattle, Washington
Deitrich Schmitz Seattle, Washington
D. E. Skinner Seattle, Washington
R. E. Slaughter Stillwater, Minnesota
</TABLE>

VII

The office and principal place of business of the company is to be located
in the City of Redmond, State of Washington, and the company intends to
transact business anywhere that it may be found convenient.

VIII

The power to adopt, alter, amend or repeal bylaws shall be vested in the
Board of Directors, subject to the power of the

-3-
<PAGE> 4
shareholders to change or repeal such bylaws; provided, however, that the Board
of Directors shall not make or alter any bylaws fixing their qualifications,
classifications, or terms of office.

-4-

<PAGE> 1

EXHIBIT 99.6.b.

BYLAWS
OF
SAFECO LIFE INSURANCE COMPANY

(As last amended November 8, 1991)

ARTICLE I

STOCKHOLDER'S MEETINGS

1. ANNUAL MEETING. The annual meeting of the stockholders
of the corporation for the election of directors to succeed those whose terms
expire, and for the transaction of such other business as may properly come
before the meeting, shall be held at 1:30 o'clock in the afternoon on the last
business day of April of each year or on such other day as may be designated by
the Chairman of the Board of Directors, the President, or the Board of
Directors.

The meeting shall be held at the registered office of the corporation, or at
such other place as may be designated by the Chairman of the Board of
Directors, the President, or the Board of Directors.

2. SPECIAL MEETINGS. Special meetings of the stockholders for any
purpose or purposes may be called at any time by the Board of Directors to be
held at such time and place as the Board may prescribe. At any time, upon the
request of the Chairman of the Board, the President, or any of three (3)
directors, or of any stockholder or stockholders holding in the aggregate
one-fifth (1/5) of the voting power of all stockholders, it shall be the duty
of the Secretary to call a special meeting of the stockholders to be held at
the registered office of the corporation at such time as the Secretary may fix,
not less than ten (10) nor more than thirty-five (35) days after the receipt of
said request, and if the Secretary shall neglect or refuse to issue such call,
the directors or stockholders making the request may do so.

3. NOTICE OF MEETING. Notice of the annual stockholders' meeting shall
be given to all stockholders of record entitled to vote at such meeting at
least ten (10) days prior to the day named for the meeting. Persons authorized
to call special stockholders' meetings shall cause written notice of the time,
place and purpose of the meeting to be given all stockholders of record
entitled to vote at such meeting, at least ten (10) days prior to the day named
for the meeting, except that notice of a meeting to act on an amendment to the
articles of incorporation, a plan of merger or share exchange, a proposed sale
or other disposition of all or substantially all the assets of the corporation,
or the dissolution of the corporation shall be given at least twenty (20) days
prior to the day named for the meeting.
<PAGE> 2
If such written notice is placed in the United States mail, postage prepaid,
and addressed to a stockholder at the stockholder's last known post office
address, notice shall be deemed to have been given.

Notice of any stockholders' meeting may be waived in writing by any
stockholder at any time, either before or after the meeting.

4. ORGANIZATION OF MEETING - QUORUM. A stockholders' meeting, duly
called, can be organized for the transaction of business whenever a quorum is
present. The presence, in person or by proxy, of the holders of a majority of
the voting power of all stockholders shall constitute a quorum; and the
stockholders present at a duly organized meeting can continue to do business
until adjournment, notwithstanding the withdrawal of enough stockholders to
leave less than a quorum.

5. ADJOURNED MEETINGS. An adjournment or adjournments of any
stockholders' meeting may be taken to such time and place as those present may
determine, without new notice being given, whether by reason of the failure of
a quorum to attend or otherwise; but any meeting at which directors are to be
elected shall be adjourned only from day to day until such directors are
elected, and in the case of any such meeting which is adjourned because of the
failure of a quorum to attend, those who attend the second of such adjourned
meetings, although less than a quorum, shall nevertheless constitute a quorum
for the purpose of electing directors.

6. VOTING AT MEETINGS. Each holder of stock shall at all times and for
all purposes be entitled to one vote for each share of stock then of record in
his name on the books of the corporation. Every stockholder shall have the
right to cast his vote either in person or by proxy. All voting at
stockholders' meetings shall be viva voce, unless any qualified voter shall
demand a vote by ballot. In the case of voting by ballot, each ballot shall
state the name of the stockholder voting, the number of shares owned by him,
and, in addition, if such vote be cast by proxy, it shall also state the name
of the proxy.

ARTICLE II

BOARD OF DIRECTORS

1. NUMBER AND QUALIFICATIONS. The business affairs of the corporation
shall be managed by a Board of from five (5) to ten (10) directors, as set from
time to time by resolution of the Board of Directors, which directors need not
be stockholders of the corporation.

2. ELECTION - TERM OF OFFICE. The directors shall be elected by the
stockholders at each annual stockholders' meeting, to hold office until the
next annual stockholders' meeting and
<PAGE> 3
until their respective successors are elected and qualified. In the event of
failure to hold an election of directors at any annual stockholders' meeting,
or in the event of failure to hold any annual stockholders' meeting as provided
in these Bylaws, election of directors may be held at a special meeting of the
stockholders called for that purpose.

3. VACANCIES. Except as otherwise provided by law, vacancies in the
Board of Directors, whether caused by resignation, death or otherwise, may be
filled by a majority of the remaining directors attending any regular meeting
of the Board, or any special meeting, if the notice of such special meeting
indicates that filling such vacancy is a purpose of the meeting (even though
less than a quorum is present). A director thus elected to fill any vacancy
shall hold office for the unexpired term of the director's predecessor, and
until the director's successor is elected and qualified.

4. ANNUAL MEETING. The first meeting of each newly elected Board of
Directors shall be known as the annual meeting thereof.

5. REGULAR MEETINGS. Regular meetings of the Board of Directors shall
be held quarterly, on the Friday following the first Wednesday in February,
May, August and November of each year, at such time and place as the Chairman
of the Board, the President, or the Board may designate.

6. SPECIAL MEETINGS. Special meetings of the Board may be held at any
place at any time when called by the Chairman of the Board of Directors or the
President, or when called by the Secretary or an Assistant Secretary on request
of three (3) directors.

7. NOTICE OF MEETINGS. No notice of the annual meeting of the Board of
Directors shall be required. Notice of the time and place of quarterly or
special meetings of the Board shall be given by the Secretary, or by the person
calling the meeting, by mail, private carrier, personal delivery, radio,
telegram or facsimile, or by personal communication over the telephone, or
otherwise, at least three (3) days prior to the date upon which the meeting is
to be held; provided, that no notice of any meeting need be given to any
director if it is waived by such director in writing, or by radio or telegram,
whether before or after such meeting is held or if the director is present at
such meeting; and any meeting of the Board shall be a legal meeting without any
notice thereof having been given if all of the directors are either present or
waive notice thereof. Oral notice is effective when communicated; written
notice is effective upon dispatch if sent or delivered to the director's
address or other number appearing on the records of the corporation.

- 3 -
<PAGE> 4
8. QUORUM. A majority of the members of the Board of Directors shall
be necessary to constitute a quorum for the transaction of business, but a less
number may adjourn any meeting from time to time and the same may be held
without further notice. When a quorum is present at any meeting, a majority
vote of the members in attendance thereat shall decide any question brought
before such meeting.

ARTICLE III

FINANCE COMMITTEE

1. POWERS AND DUTIES. The Finance Committee shall have general
supervision of the finances and investments of the corporation. The committee
is charged with the duty of authorizing or approving all investments, loans,
sales or exchanges by or on behalf of the corporation. It shall designate or
approve the designation of depositories for the funds of the corporation; it
shall have authority to buy and sell securities and to make loans of such
character as is permitted by law; and it may direct any action necessary to
collect amounts due the corporation. All actions of the Finance Committee
shall be recorded in the minutes of the Finance Committee, and reports thereof
shall be submitted to the Board of Directors for approval of disapproval as
soon as practicable after such action. Such action shall be subject to
revision or alteration by the Board of Directors; provided, that no rights of
third parties shall be affected by any such revision or alteration.

2. RULES OF PROCEDURE. The Finance Committee shall fix its own rules of
procedure and shall meet where and as provided by such rules or by resolution
of the Board of Directors. Special meetings of the Committee may be called at
any time by the Chairman or by any two members. At all meetings, the presence
of a majority of the members shall be necessary to constitute a quorum, and the
affirmative vote of a majority of the quorum shall be necessary and sufficient
for the adoption of any resolution.

ARTICLE IV

OTHER COMMITTEES

The Board of Directors shall have authority to establish by resolution
such other committees as the Board may from time to time deem necessary or
advisable. The membership, duties and authority of such committees shall be as
the Board may from time to time establish.

- 4 -
<PAGE> 5
ARTICLE V

OFFICERS

1. OFFICERS ENUMERATED - ELECTION. The officers of the corporation
shall be a Chairman of the Board of Directors, a President, one or more Vice
Presidents, a Secretary, one or more Assistant Secretaries, a Treasurer, and
one or more Assistant Treasurers, all of whom shall be elected by the Board of
Directors at the annual meeting thereof, to hold office for the term of one
year and until their successors are elected and qualified.

2. QUALIFICATIONS. None of the officers of the corporation, except the
Chairman of the Board of Directors and the President, needs be a director.
Excluding the Chairman of the Board of Directors and the President, any two or
more of the other corporate officers may be combined in one person.

3. CHAIRMAN OF THE BOARD. The Chairman of the Board of Directors shall
preside at all meetings of stockholders and Directors, and shall perform such
other duties as may from time to time be assigned by the Board of Directors.

4. PRESIDENT. The President shall be the chief executive officer of
the corporation and, subject to the ultimate authority of the Board of
Directors, shall have general charge, supervision and control over the business
and affairs of the corporation and shall be responsible for the management
thereof.

5. VICE PRESIDENTS. In the absence or disability of the president, one
of the Vice Presidents, in the order determined by the order of their election,
shall act as President, but a Vice president who is not a director cannot
succeed to or fill the office of president. Each Vice President shall perform
such other duties as the Board of Directors or the President may from time to
time designate or assign. One or more of the Vice Presidents may be designated
by the Board of Directors as Resident Vice President, Senior Vice president,
Executive Vice President, or such other title as the Board deems appropriate
for the position and duties.

6. SECRETARY. The Secretary shall be the custodian of the records,
books of account, and seal of the corporation and, in general, shall perform
all duties usually incident to the office of Secretary, and make such reports
and perform such other duties as may from time to time be requested or assigned
by the Board of Directors or the President.

7. ASSISTANT SECRETARIES. The Assistant Secretaries shall perform such
duties as may be assigned to them by the Secretary, the President, or the Board
of Directors. In the absence or disability of the Secretary, one of the
Assistant

- 5 -
<PAGE> 6
Secretaries, in the order determined by the order of their election, shall
perform all of the duties and may exercise any of powers of the Secretary.

8. TREASURER. The Treasurer shall have charge and custody of and be
responsible for all funds and securities of the corporation. The Treasurer
shall deposit all such funds in the name of the corporation in such
depositories or invest them in such investments as may be designated or
approved by the Finance Committee or the Board of Directors, and shall
authorize disbursement of the funds of the corporation in payment of just
demands against the corporation, or as may be ordered by the Board of
Directors, or the Finance Committee, on securing proper vouchers for such
disbursements. The Treasurer shall render to the Board of Directors from time
to time as may be required of him an account of all his transactions as
Treasurer, and shall perform such other duties as may from time to time be
assigned by the Board of Directors, the Finance Committee, or the President.

9. ASSISTANT TREASURERS. The Assistant Treasurers shall perform such
duties as may be assigned to them by the Treasurer, the President, the Finance
Committee, or the Board of Directors. In the absence or disability of the
Treasurer, the Assistant Treasurers, in the order determined by the order of
their election, shall perform all of the duties and may exercise any of the
powers of the Treasurer.

10. OTHER OFFICERS AND AGENTS. The Board of Directors may appoint such
other officers and agents as it shall deem necessary to exercise such powers
and perform such duties as shall be determined from time to time by the Board.

11. REMOVAL. Any officer of the corporation may be removed by the
affirmative vote of a majority of the whole Board of Directors, whenever in
their judgment the best interests of the corporation will be served thereby;
such removal, however, shall be without prejudice to the contract rights of the
person so removed.

12. FACSIMILE SIGNATURES. The President, with the Secretary, shall sign
all policies of insurance issued by the company; provided, that facsimile
signatures on policies shall be recognized as binding when countersigned by a
regularly authorized agent of the company.

ARTICLE VI

CORPORATION PROXIES

Unless otherwise ordered by the Board of Directors, any and all shares of
stock owned or held by this company in any other

- 6 -
<PAGE> 7
corporation shall be represented and voted at any meeting of the shareholders
of any such corporation by any one of the following officers of this company in
the following order who shall attend such meeting, i.e., the Chairman of the
Board of Directors, the President, a Vice President, the Chairman of the
Finance Committee, or the Treasurer, and such representation by any one of the
officers above named shall be deemed and considered a representation in person
by this company at such meeting. Any one of the officers above named may
execute a proxy appointing any other person as attorney and proxy to represent
this company at such shareholders' meeting and to vote upon all stock of such
corporation owned or held by this company with all power and authority in the
premises that any of the officers above named would possess if personally
present. The Board of Directors by resolution may from time to time confer
like powers upon any other person or persons.

ARTICLE VII

STOCK

1. CERTIFICATES OF STOCK. Certificates of stock of the corporation
shall be issued in such form in accordance with the corporation law of the
State of Washington as may be approved by the Board of Directors, and may be
signed by the President or any Vice President, and the Secretary or any
Assistant Secretary.

2. TRANSFERS. Shares of stock may be transferred by delivery of the
certificates therefore accompanied either by an assignment in writing on the
back of the certificate or by a written power of attorney to sell, assign and
transfer the same by the record holder of the certificate; but no transfer
shall be valid except as between the parties thereto until such transfer shall
have been made on the books of the corporation. Except as specifically
provided in these Bylaws, no shares of stock shall be transferred on the books
of the corporation until the outstanding certificate therefore has been
surrendered to the corporation.

3. STOCKHOLDERS OF RECORD. The corporation shall be entitled to treat
the holder of record on the books of the corporation of any share or shares of
stock as the holder in fact thereof for all purposes, including the payment of
dividends on such stock and the right to vote on such stock.

4. LOSS OR DESTRUCTION OF CERTIFICATES. In the case of loss or
destruction of any certificates of stock, another may be issued in its place
upon proof of such loss or destruction, and upon the giving of a satisfactory
bond or indemnity to the corporation. A new certificate may be issued without
requiring any bond when in the judgment of the Board of Directors it is proper
to do so.

- 7 -
<PAGE> 8
5. CLOSING OF TRANSFER BOOKS. The Board of Directors may close the
books of the corporation against transfers of stock of the corporation for such
period as the directors may from time to time determine, in anticipation of
stockholders' meetings, or the payment of any dividend or distribution, or any
change or conversion or exchange of shares of the corporation.

6. REGULATIONS. The Board of Directors shall have the power and
authority to make all such rules and regulations as it may deem expedient
concerning the issue, transfer, conversion and registration of certificates for
shares of the stock of the corporation not inconsistent with the Bylaws, the
Articles of Incorporation, or the laws of the State of Washington.

ARTICLE VIII

INDEMNIFICATION

1. DIRECTORS. To the full extent permitted by the Washington Business
Corporation Act, the corporation shall indemnify any person who was or is a
party to any proceeding (whether brought by or in the right of the company or
otherwise) by reason of the fact that he or she is or was a director of the
corporation, or, while a director of the corporation, is or was serving at the
request of the corporation as a director, officer, partner, trustee, employee,
or agent of another foreign or domestic corporation, partnership, joint
venture, trust, other enterprise, or employee benefit plan, against judgments,
penalties, fines, settlements, and reasonable expenses actually incurred by him
or her in connection with such proceeding.

2. OFFICERS AND CERTAIN OTHER PERSONS. The corporation shall extend
such indemnification as is provided to directors under paragraph 1 of this
Article to any person, not a director of the corporation, who is or was an
officer of the corporation or is or was serving at the request of the
corporation as a director, officer, partner, trustee, or agent of another
foreign or domestic corporation, partnership, joint venture, trust, other
enterprise, or employee benefit plan. In addition, the Board of Directors may,
by resolution, extend such further indemnification to an officer or such other
person as may to it seem fair and reasonable in view of all relevant
circumstances.

3. OTHER EMPLOYEES AND AGENTS. The Board of Directors may, by
resolution, elect to treat any employee or agent of the corporation as an
"officer" of the corporation for the purpose of extending the indemnification
provided in paragraph 2 of this Article.

4. DEFINITIONS. For purposes of this Article, the terms "director,"
"corporation," "expenses," "party" and "proceeding" have those meanings
assigned to them in the "indemnification of

- 8 -
<PAGE> 9
directors and officers" sections of the Washington Business Corporation Act.

5. NOT EXCLUSIVE -- CONTINUING. The indemnification provided by this
Article shall not be deemed exclusive of other rights to which the director,
officer, employee or agent may be entitled as a matter of law or by contract,
and shall continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.

ARTICLE IX

SEAL

The seal of this corporation shall consist of a flat-faced, circular die
with the words,

SAFECO LIFE INSURANCE COMPANY

and with the words and figures "Corporate Seal, 1957" in the center, and with
the word "Washington" also being shown on the face of the seal.

ARTICLE X

COPIES OF RESOLUTIONS

Any person dealing with the corporation may rely upon a copy of any of the
records of the proceedings, resolutions, or votes of the stockholders, the
Board of Directors, or the Finance Committee, when certified by the President,
a Vice President, Secretary, or an Assistant Secretary.

ARTICLE XI

AMENDMENT OF BYLAWS

1. BY THE STOCKHOLDERS. These Bylaws may be amended, altered or
repealed at any meeting of the stockholders, if notice of the proposed
alteration or amendment is contained in the notice of the meeting.

2. BY THE BOARD OF DIRECTORS. These Bylaws may be amended, altered or
repealed by the affirmative vote of a majority of the whole Board of Directors
at any regular meeting of the Board, or at any special meeting if notice of the
proposed alteration or amendment is contained in the notice of such special
meeting; provided, however, that the Board of Directors shall not amend, alter
or repeal any Bylaw in such a manner as to affect in any way the qualification,
classification, or term of office of the directors. Any action of the Board of
Directors,

- 9 -
<PAGE> 10
with respect to the amendment, alteration or repeal of these Bylaws is hereby
made expressly subject to change or repeal by the stockholders.

- 10 -

<PAGE> 1

EXHIBIT 99.9.

June 16, 1995

Board of Directors
SAFECO Life Insurance Company
SAFECO Plaza
Seattle, WA 98185

Gentlemen:

I have acted as counsel to the Company in connection with the filing with the
Securities and Exchange Commission of the Registration Statement on Form N-4
for the Individual Flexible Purchase Payment Deferred Variable Annuity
Contracts (the "Contracts") to be issued by the Company and its separate
account, SAFECO Separate Account C. I have made such examination of the law
and have examined such records and documents as in my judgement are necessary
or appropriate to enable me to render the following opinion:

1. SAFECO Life insurance Company is a validly existing stock life
insurance company of the state of Washington.

2. Separate Account C is a separate investment account of SAFECO Life
Insurance Company created and validly existing pursuant to the
Washington insurance laws and regulations thereunder.

3. All of the prescribed corporate procedures for the issuance of the
Contracts have been followed, and when such Contracts are issued in
accordance with the prospectus contained in the Registration
Statement, all state requirements relating to such Contracts will have
been complied with.

4. Upon the acceptance of the purchase payments made by an Owner pursuant
to a Contract issued in accordance with the prospectus contained in
the Registration Statement and upon compliance with acceptable law,
such an Owner will have a legally-issued, fully paid, non- assessable
contractual interest in such Contract.

You may use this letter, or a copy hereof, as an exhibit to the Registration
Statement.

Very truly yours,

William E. Crawford
Counsel

<PAGE> 1

EXHIBIT 99.10.

Consent of Independent Auditors

We consent to the references to our firm under the captions "Experts" and
"General Information" and to the use of our reports on the financial statements
of SAFECO Separate Account C, dated January 27, 1995, and on the consolidated
financial statements of SAFECO Life Insurance Company and Subsidiaries, dated
February 10, 1995, in Post-Effective Amendment No. 5 to the Registration
Statement (Form N-4) and related Prospectus of SAFECO Separate Account C.

/S/ ERNST & YOUNG

Seattle, Washington
June 16, 1995