WESTERN SOUTHERN LIFE ASSURANCE CO SEPARATE ACCOUNT 2, 497, 1999-01-25

WESTERN SOUTHERN LIFE ASSURANCE CO SEPARATE ACCOUNT 2
497, 1999-01-25

Previous: MACK CALI REALTY CORP, S-3, 1999-01-25

Next: GORAN CAPITAL INC, 424B3, 1999-01-25

<PAGE> 1

TOUCHSTONE
ADVISOR
VARIABLE ANNUITY

Western-Southern Life Assurance Company
Separate Account 2

PROSPECTUS
JANUARY 4, 1999

This Prospectus describes the Touchstone Advisor Variable Annuity Contract and
the investment options available to Contract owners. It contains information you
should know before purchasing a Contract and selecting your investment options.
Please read this Prospectus carefully and keep it for future reference.

The Touchstone Advisor Variable Annuity Contract is issued by Western-Southern
Life Assurance Company (WSLAC). The Contract is an investment alternative for
investors who want to accumulate money on a tax-deferred basis for retirement or
other long-term goals.

You can purchase a Contract for $5,000 or more. You can also purchase a Contract
in connection with certain types of retirement plans, such as a Traditional IRA
or Roth IRA or a 403(b) plan, for $1,000 or more. The Contract also includes a
flexible purchase payment feature that allows you to make additional payments
later.

You tell us how to invest your payments. Your investment options include the
following Sub-Accounts:

<TABLE>
<S> <C> <C> <C>
O EMERGING GROWTH O INTERNATIONAL EQUITY O INCOME OPPORTUNITY O VALUE PLUS
O GROWTH & INCOME O BALANCED O BOND O STANDBY INCOME
</TABLE>

Each Sub-Account invests in a separately managed Fund. Each Fund is part of the
Touchstone Variable Series Trust.

The Statement of Additional Information dated January 4, 1999 contains more
information about the Contract, WSLAC and its Separate Account 2. It has been
filed with the Securities and Exchange Commission (SEC) and is legally part of
this Prospectus. The table of contents for the Statement of Additional
Information is located on page 47 of this Prospectus. For a free copy, call the
Touchstone Variable Annuity Service Center at 800.669.2796 (press 2).

The Securities and Exchange Commission maintains a web site (http://www.sec.gov)
that contains the Statement of Additional Information, certain other material
that is legally part of the registration statement of Separate Account 2, and
other information about Separate Account 2. You can view these documents at the
Public Reference Room of the SEC or obtain copies, for a fee, by writing to the
Public Reference Room of the SEC, 450 Fifth Street N.W., Washington, D.C.
20549-6009. You can also call the SEC at 800.SEC.0330.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the Contracts or determined if this
Prospectus is accurate or complete. Any representation to the contrary is a
criminal offense.

The Contracts are not deposits or obligations of any bank. No bank has
guaranteed or endorsed the Contracts. The Contracts are not federally insured by
the Federal Deposit Insurance Corporation, the Federal Reserve Board, the
National Credit Union Share Insurance Fund or any other agency.

Investments in variable annuities involve investment risk, including possible
loss of principal and interest.
<PAGE> 2

This booklet contains the Touchstone Advisor Variable Annuity Prospectus and the
current prospectus for the Touchstone Variable Series Trust. You should rely
only on the information contained in the Contract, this Prospectus, the
Statement of Additional Information or our approved sales literature.

No one is authorized to give any information or make any representation other
than those contained in the Contract, this Prospectus, the Statement of
Additional Information or our approved sales literature.
<PAGE> 3

TABLE OF CONTENTS
TABLE OF CONTENTS

3
[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
Cover Page................................................. 1
Table Of Contents.......................................... 3
Glossary................................................... 4
Fee And Expense Tables..................................... 5
Summary.................................................... 7
Purchasing Your Contract................................... 9
Transferring Your Money.................................... 11
Accessing Your Money....................................... 13
Charges.................................................... 15
Information About The Investment Options................... 17
Valuation Of Your Investments.............................. 19
Performance Information.................................... 20
Annuity Income Payment Options............................. 21
Guaranteed Death Benefit................................... 24
WSLAC And Separate Account 2............................... 25
Service Providers.......................................... 26
Voting Rights.............................................. 27
Other Information About Your Contract...................... 28
Federal Income Tax Information............................. 30
Supplement A: Accumulation Unit Values.................... 37
Supplement B: Section 401 Plans And Section 403(b)
Plans.................................................... 38
Supplement C: State Of Texas Optional Retirement Program... 43
Table Of Contents For Statement Of Additional
Information.............................................. 47
</TABLE>

<PAGE> 4

GLOSSARY
GLOSSARY

GLOSSARY [ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS

[ICON]
[ICON]
ACCUMULATION UNIT
A unit of measure used to calculate a Contract owner's share of a Sub-Account.

[ICON]
[ICON]

ACCUMULATION UNIT VALUE
The dollar value of an Accumulation Unit in a Sub-Account.

[ICON]
[ICON]

ANNUITANT
The person whose life is used to determine the amount of any annuity income
payments and the length of time for which the payments are made.

[ICON]
[ICON]

CODE
The Internal Revenue Code of 1986, as amended.

[ICON]
[ICON]

CONTRACT
The Touchstone Advisor Variable Annuity Contract, including the application and
any amendments, riders or endorsements.

[ICON]
[ICON]

CONTRACT DATE
The effective date of a Contract. The Contract Date is shown on page 3 of your
Contract.

[ICON]
[ICON]

CONTRACT VALUE

The total value of your Contract at any time before or on the Income Date. This
represents the sum of the value of your investments in the Sub-Accounts.

[ICON]
[ICON]

CONTRACT YEAR
A year that starts on your Contract Date or the anniversary of your Contract
Date.

[ICON]
[ICON]

FUND

Each Sub-Account invests in a Fund that has the same investment objective as the
Sub-Account. Each Fund is part of a group of funds called the Touchstone
Variable Series Trust.

[ICON]
[ICON]

INCOME DATE
The date on which annuity payments are scheduled to begin.

[ICON]
[ICON]

SUB-ACCOUNT
A division of Separate Account 2. Each Sub-Account invests in a Fund, which has
the same investment objective as the Sub-Account.

[ICON]
[ICON]

SURRENDER VALUE
The Contract Value minus any contract maintenance charge.

[ICON]
[ICON]

WSLAC, WE, OUR AND US
Western-Southern Life Assurance Company.
<PAGE> 5

FEE AND EXPENSE TABLES
FEE AND EXPENSE TABLES

[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS
FEE AND EXPENSE TABLES

These tables describe the fees and expenses that you may pay directly or
indirectly if you purchase a Contract. More complete information about these
fees and expenses is located in the discussion about charges on pages 15 through
16.

Contract Owner Transaction Expenses

<TABLE>
<S> <C>
MAXIMUM Contingent Deferred Sales Charge (Surrender Charge) None
(as a percentage of amount surrendered or withdrawn)*
Annual Contract Maintenance Charge* $35.00
</TABLE>

<TABLE>
<CAPTION>
SUB-ACCOUNT
ANNUAL EXPENSES
(AS A PERCENTAGE OF
A AVERAGE ACCOUNT VALUE)
<S> <C>
MORTALITY AND EXPENSE RISK CHARGES 0.70%
- ----------------------------------------------------------------------------
CONTRACT ADMINISTRATION CHARGE 0.10%
- ----------------------------------------------------------------------------
TOTAL 0.80%
- ----------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
FUND EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS
AND AFTER EXPENSE REIMBURSEMENT)**
ADVISOR FEE OTHER EXPENSES TOTAL EXPENSES
<S> <C> <C> <C>
EMERGING GROWTH 0.80% 0.35% 1.15%

- --------------------------------------------------------------------------------
INTERNATIONAL EQUITY 0.95% 0.30% 1.25%
- --------------------------------------------------------------------------------
INCOME OPPORTUNITY 0.65% 0.20% 0.85%
- --------------------------------------------------------------------------------
VALUE PLUS 0.75% 0.10% 0.85%
- --------------------------------------------------------------------------------
GROWTH & INCOME 0.80% 0.05% 0.85%
- --------------------------------------------------------------------------------
BALANCED 0.80% 0.10% 0.90%
- --------------------------------------------------------------------------------
BOND 0.55% 0.20% 0.75%
- --------------------------------------------------------------------------------
STANDBY INCOME 0.25% 0.25% 0.50%
- --------------------------------------------------------------------------------
</TABLE>

* In certain states and for certain retirement plans, we can waive, reduce or
eliminate the annual contract maintenance charge.

** Since the Value Plus Fund started on May 1, 1998, expenses for the Value Plus
Fund are based on estimates. Touchstone Advisors has agreed to waive certain
fees or reimburse each Portfolio for certain expenses so that the Fund's total
expenses do not exceed the percentage listed in the table. This agreement will
remain in place until at least December 31, 1999. If Touchstone Advisors had not
reimbursed the Funds, the total expenses of each Fund in 1997 would have been
higher, as shown in the following table.

<PAGE> 6

FEE AND EXPENSE TABLES
FEE AND EXPENSE TABLES

[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS

<TABLE>
<CAPTION>
TOTAL EXPENSES
(BEFORE REIMBURSEMENT)
<S> <C>
EMERGING GROWTH 2.19%

- -------------------------------------------------------------------------
INTERNATIONAL EQUITY 3.19%
- -------------------------------------------------------------------------
INCOME OPPORTUNITY 1.72%
- -------------------------------------------------------------------------
VALUE PLUS 2.85%
- -------------------------------------------------------------------------
GROWTH & INCOME 1.64%
- -------------------------------------------------------------------------
BALANCED 2.04%
- -------------------------------------------------------------------------
BOND 1.69%
- -------------------------------------------------------------------------
STANDBY INCOME 1.48%
- -------------------------------------------------------------------------
</TABLE>

Examples

These examples should help you compare the cost of purchasing a Contract with
the cost of purchasing other variable annuity contracts.

The examples assume that you invest $1,000 in each Sub-Account, your investment
has a 5% return each year and the Fund's total expenses are the same as shown
above in the column entitled "Fund Expenses (After Reimbursement)". Your actual
costs may be higher or lower than the costs shown in the examples.

EXAMPLE 1 This example assumes that you surrender your Contract at the end

of the applicable time period.

EXAMPLE 1 This example assumes that you surrender your Contract at the end of
the applicable time period.

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Emerging Growth................... $23 $72 $124 $264
International Equity.............. $24 $75 $129 $275
Income Opportunity................ $20 $63 $108 $232
Value Plus........................ $20 $63 NA NA
Growth & Income................... $20 $63 $108 $232
Balanced.......................... $21 $64 $110 $238
Bond.............................. $19 $60 $102 $222
Standby Income.................... $17 $52 $ 89 $194
</TABLE>

EXAMPLE 2 This example assumes that you annuitize your Contract at the end
of the applicable time period and choose at least a 5-year

payout period.

EXAMPLE 2 This example assumes that you annuitize your Contract at the end of
the applicable time period and choose at least a 5-year payout
period.

SUMMARY
SUMMARY

SUMMARY [ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS

This summary highlights some basic information about the Touchstone Advisor
Variable Annuity Contract. More information about the Contract is located on
pages 9 through 29 of this Prospectus.

How the Contract Works

The Contract is a contract between you and WSLAC. The Contract, like all
variable annuity contracts, has two phases: the accumulation phase and the
annuity income phase. During the accumulation phase, earnings on your investment
accumulate on a tax-deferred basis. The annuity income phase begins when you
start to receive annuity income payments. The amount of money you accumulate
during the accumulation phase determines the amount of the annuity income
payments you receive. You can select one of several annuity income payment
plans.

The Contract also provides a guaranteed death benefit that is payable to a
designated beneficiary when the Annuitant dies. Generally, the Contract
guarantees that the beneficiary will receive the greater of either the total
purchase payments less any withdrawals or the Contract Value, regardless of
investment performance.

Who Should Purchase the Contract

The Contract allows you to accumulate money on a tax-deferred basis for
retirement or other long-term goals through various investment options.
Generally, the higher your tax bracket, the more you will benefit from the
tax-deferred feature of the Contract. You should not purchase a Contract if you
are looking for a short-term investment or if you cannot take the risk of
getting less money back than you paid for the Contract. You may want to consult
a tax advisor or other investment professional before you purchase a Contract.

Purchasing a Contract

You can purchase a Contract for $5,000 or more. You can also purchase a Contract
in connection with certain types of retirement plans, such as a Traditional or
Roth IRA or a 403(b) plan, for $1,000 or more. The Contract also includes a
flexible purchase payment feature that allows you to make additional payments
later.

Selecting Your Investment Options

You can allocate your purchase payments among the following investment options,
called Sub-Accounts.
<PAGE> 8

SUMMARY
SUMMARY

[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS

Sub-Accounts
Depending on market conditions, you can make or lose money in any Sub-
Account.

O Emerging Growth
O International Equity

O Income Opportunity

O Value Plus
O Growth & Income

O Balanced

O Bond

O Standby Income

Transferring Among Investment Options

You can transfer money from one investment option to another. Like all variable
annuities, transfers between investment options are tax-free. The minimum
transfer amount is $250. We limit the number of times you can transfer between
investment options in each Contract Year.

Accessing Your Money

You can access your money at any time during the accumulation phase. The minimum
withdrawal is $250.

Also be aware that you may be required to pay income taxes and a 10% federal
penalty tax on any amount you withdraw.

Charges and Fees

A $35 contract maintenance charge is ordinarily deducted each year from your
Contract Value. Other administrative charges are deducted at an annual rate of
no more than 0.80% of your Contract Value. Also, you may indirectly pay
investment advisory fees.

10-Day Review Period

You have 10 days to review your Contract after you receive it. If you are not
satisfied with your Contract, you can cancel it but must do so by returning it
to the Touchstone Variable Annuity Service Center at P.O. Box 2850, Cincinnati,
Ohio 45201-2850 within 10 days after you receive it. If you cancel your
Contract, in most cases we will refund the Contract Value to you. However, some
state laws may require us to refund your purchase payments.

Additional Information

Representatives at the Touchstone Variable Annuity Service Center can answer
your questions about the Contract. You can call the Service Center at
800.669.2796 (press 2).

Accumulation Unit Values

The Accumulation Unit Values for each Sub-Account other than Value Plus are
shown in Supplement A on page 37.

<PAGE> 9

PURCHASING YOUR CONTRACT

[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS
PURCHASING YOUR CONTRACT

To obtain an application to purchase a Contract, please contact your investment
advisor or the Touchstone Variable Annuity Service Center by mail at P.O. Box
2850, Cincinnati, Ohio 45201-2850 or by phone at 800.669.2796 (press 2).

Minimum and Maximum Purchase Payments

O You can purchase a Contract for $5,000 or more.

O You can also purchase a Contract in connection with certain types of
retirement plans, such as a Traditional or Roth IRA, a 403(b) plan, a
SIMPLE IRA (Savings Incentive Match Plans for Employees), or a SEP
(Simplified Employee Pension Plans), for $1,000 or more.

O You can make additional investments in your Contract at any
time before the Income Date. Each additional purchase payment must be at
least $1,000.

10-Day Review Period

You have 10 days to review your Contract after you receive it. This 10-day
review period is called the free look period. The state where you live may
require us to give you a longer free look period.

If you are not satisfied with the Contract, you can cancel it during the free
look period. To cancel the Contract, you must return it to the Touchstone
Variable Annuity Service Center at P.O. Box 2850, Cincinnati, Ohio 45201-2850
within 10 days after you receive it. If you cancel the Contract, in most cases
we will refund the Contract Value to you. However, some state laws may require
us to refund your purchase payments.

Investment Options

You decide how to allocate your purchase payments by selecting from the
following investment options, called Sub-Accounts.

<TABLE>
<S> <C>
O Emerging Growth O Growth & Income
O International O Balanced
Equity
O Income Opportunity O Bond
O Value Plus O Standby Income
</TABLE>

Allocation of Purchase Payments

Your instructions are included in your application and shown on page 3 of your
Contract. You can change your allocation instructions by contacting us either by
phone or in writing. When we receive a purchase payment from you, we allocate it
based on the most recent allocation instructions we have received from you.

The following guidelines apply to the allocation of your purchase payments:

O Allocate at least 5% of your initial purchase payment to each investment
option you choose.
<PAGE> 10

PURCHASING YOUR CONTRACT
PURCHASING YOUR CONTRACT

[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS

O Use whole percentages. For example, you can allocate 33% or 34% to an
investment option, not 33 1/3%.
O Make sure your percentages total 100%.

Allocation Changes by Phone. You can change the allocation of your future
purchase payments over the phone by following these steps:

STEP 1. Fill out either the telephone authorization part of the application or
a Telephone Authorization Form. You can get a copy of either form by contacting
the Touchstone Variable Annuity Service Center. You must complete and return one
of these forms before you call to change your allocations over the phone.

STEP 2. Call the Touchstone Variable Annuity Service Center at 800.669.2796
(press 2) between 8:00 a.m. and 4:00 p.m. Eastern Time.

STEP 3. Give the representative the following information:

O Your Social Security number

O Your Contract number or other precise information that identifies your
Contract

O Your allocation instructions

Allocation Changes in Writing. You can also change the allocation of your
future purchase payments by writing to the Touchstone Variable Annuity Service
Center. Your written instructions must include the following information:

[The type that appears in side bars in the typeset document are enclosed in
Brackets "[" and "]" in the electronic file.]

[***You should review your selected investment options and allocations
periodically to determine if they are appropriate considering market conditions
and your financial objectives.]

O Your Contract number or other precise information that identifies your
Contract

O Your allocation instructions
<PAGE> 11

TRANSFERRING YOUR MONEY
TRANSFERRING YOUR MONEY

[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS
TRANSFERRING YOUR MONEY

You can transfer money from one investment option to another. You can make
transfers by phone or in writing.
The following guidelines apply to transfers other than dollar cost averaging
transfers:

O Each transfer must be at least $250.
O The allocation to each investment option must be at least 5% of the total
transfer amount.

O You can transfer money among the Sub-Accounts once every 30 days.

Transfers by Phone. You can transfer your money over the phone by following
these steps:

STEP 1. Fill out either the telephone transfer authorization part of the
application or a Telephone Authorization Form. You can get a copy of either form
by contacting the Touchstone Variable Annuity Service Center. You must complete
and return one of these forms before you call to change your allocations over
the phone.

STEP 2. Call the Touchstone Variable Annuity Service Center at 800.669.2796
(press 2) between 8:00 a.m. and 4:00 p.m. Eastern Time.

STEP 3. Give the representative the following information:

O Your Social Security number

O Your Contract number or other precise information that identifies your
Contract

O Your transfer instructions

Transfers in Writing. You can also transfer your money by writing to the
Touchstone Variable Annuity Service Center. Your written instructions must
include the following information:

O Your Contract number or other precise information that identifies your
Contract

O Your transfer instructions

Third Party Authorization

You can authorize a third party to transfer money for you. To do so, you must
complete the appropriate authorization forms. Contact us at the Touchstone
Variable Annuity Service Center at 800.669.2796 (press 2) for additional
information.

<PAGE> 12

TRANSFERRING YOUR MONEY
TRANSFERRING YOUR MONEY

[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS

Touchstone's Dollar Cost Averaging Program

Dollar cost averaging is a method of investing equal amounts of money at regular
intervals. Dollar cost averaging allows you to purchase more Accumulation Units
when prices are low and fewer when prices are high. For dollar cost averaging to
be effective, you should continue to invest during both market ups and downs.
You should also consider your financial ability to maintain a consistent level
of investment over time.

[The type that appears in side bars in the typeset document are enclosed in
Brackets "[" and "]" in the electronic file.]

[***DOLLAR COST
AVERAGING
- --------------------------------------------------------------------------
Dollar cost averaging can result in a lower average cost of investing over
time. While dollar cost averaging does not guarantee a profit or prevent a
loss, you have a higher likelihood to profit from this long-term investment
method.]

Touchstone's Dollar Cost Averaging Program allows you to transfer amounts at
regular intervals from the Standby Income Sub-Account to other Sub-Accounts. You
can make the following transfers:

O A specific dollar amount

O A specific percentage of your money in the Standby Income Sub-Account

O Earnings in the Standby Income Sub-Account

You select the number and the frequency of your transfers in Touchstone's Dollar
Cost Averaging Program. We will transfer the money on the anniversary of your
Contract Date each month or each quarter.

The following guidelines apply to dollar cost averaging transfers:

O Your Contract Value must be at least $10,000.

O Dollar cost averaging transfers must continue for at least 12 months.

O Each transfer must be at least $200.

O The allocation to each Sub-Account must be at least 5% of the transfer
amount.

To set up dollar cost averaging transfers, contact the Touchstone Variable
Annuity Service Center at 800.669.2796 (press 2) or P.O. Box 2850, Cincinnati,
Ohio 45201-2850.

Dollar cost averaging transfers will stop if we complete the number of transfers
you requested, you ask us to stop after using the program for at least 12
months, you do not have enough money in your accounts to complete the transfer,
or the program is discontinued. If we discontinue the program, you will be
allowed to complete the number of transfers you previously requested.
<PAGE> 13

ACCESSING YOUR MONEY
ACCESSING YOUR MONEY

[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS
ACCESSING YOUR MONEY

Your Contract is designed to help you achieve your long-term investment goals.
However, there may be times when you need to access the money you have invested
in your Contract. You can access your money at any time during the accumulation
phase by making a partial withdrawal, by making systematic withdrawals or by
canceling your Contract.

Partial Withdrawals

To withdraw money from your Contract, send written instructions to the
Touchstone Variable Annuity Service Center at P.O. Box 2850, Cincinnati, Ohio
45201-2850. For help with a partial withdrawal, please call the Service Center
at 800.669.2796 (press 2).

The following guidelines apply to partial withdrawals:

O Include your Contract number or other information that
identifies your Contract and the amount to be withdrawn in your
instructions.

O Each withdrawal must be at least $250.

O If your Contract Value is reduced below $5,000 by the partial
withdrawal, we reserve the right to terminate your Contract by paying you
the Surrender Value.

Systematic Withdrawal Plan

The Systematic Withdrawal Plan allows you to withdraw a specific dollar amount
from your Contract on a monthly, quarterly, semiannual or annual basis. The
minimum amount for each systematic withdrawal is $100. To set up systematic
withdrawals, contact the Touchstone Variable Annuity Service Center at
800.669.2796 (press 2) or at P.O. Box 2850, Cincinnati, Ohio 45201-2850.

You can discontinue your systematic withdrawals at any time by sending written
instructions to us.

Canceling Your Contract

You can cancel your Contract at any time during the accumulation phase. When you
cancel your Contract, we pay you the Surrender Value. This payment terminates
your Contract and our obligations under the Contract.

To cancel your Contract, send written instructions to the Touchstone Variable
Annuity Service Center at P.O. Box 2850, Cincinnati, Ohio 45201-2850. Include
your Contract number or other information that identifies your Contract in your
instructions. For assistance, please call the Service Center at 800.669.2796
(press 2).

The Surrender Value will equal the Contract Value, less any applicable contract
charge and premium taxes. Because investment performance and applicable charges
affect your Contract Value, the Surrender Value may be less than the total of
your purchase payments.
<PAGE> 14

ACCESSING YOUR MONEY
ACCESSING YOUR MONEY

[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS

Penalty Taxes

If you withdraw money from your Contract or cancel your Contract before you or
the Annuitant (as applicable) reach age 59 1/2, you generally will have to pay a
federal penalty tax. This tax is equal to 10% of the amount of the payment you
receive that is treated as taxable income. More information about penalty taxes
is located on pages 32 through 33.

Processing Withdrawals

When we process your partial or systematic withdrawal, we withdraw money from
each of your investment options on a pro-rata basis. For example, in a situation
where no charges are applicable to the withdrawal, if you have 25% of your money
in the Income Opportunity Sub-Account and 75% of your money in the Balanced
Sub-Account and you want to withdraw $2,000, we will withdraw $500 from the
Income Opportunity Sub-Account (25% of $2,000) and $1,500 from the Balanced
Sub-Account (75% of $2,000).

If you want us to process your withdrawal on a different basis, such as
withdrawing all the money from one Sub-Account, you must provide specific
instructions in your withdrawal request.

We will generally send payments to you within 7 days of the date that we process
your request. We may delay calculating the amount of the payment from a
Sub-Account or sending a payment from a Sub-Account for any of the following
reasons:

O The New York Stock Exchange is closed on a day that it normally would be
open.

O Trading on the New York Stock Exchange is restricted.

O Because of an emergency, it is not reasonably practicable for the
Sub-Accounts to sell securities or to fairly determine the value
of their investments.

O The SEC permits us to postpone payments from the Sub-Accounts for your
protection.
<PAGE> 15

CHARGES
CHARGES

CHARGES [ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS

Administrative Charges

We incur administrative costs in setting up your Contract, maintaining records
of your Contract and sending you confirmations and statements about your
Contract. By paying a contract maintenance charge and a contract administration
charge, you reimburse us for the administrative costs we expect to incur.

<TABLE>
<CAPTION>
CONTRACT MAINTENANCE CONTRACT ADMINISTRATION
CHARGE CHARGE
<C> <S> <C>
- On the anniversary of - On each day the New
your Contract Date each York Stock Exchange is
year until annuity open for trading.
payments begin.
- The date we start
annuity payments.
- The date you completely
surrender your
WHEN CHARGED? Contract.
- ------------------------------------------------------------------------------
- $35 each year. - The effective annual
rate of the charge is
HOW MUCH CHARGED? 0.10%.
- ------------------------------------------------------------------------------
- We reduce your Contract - We deduct this charge
Value. The number of from the Accumulation
Accumulation Units you Unit Value of each Sub-
own in each Sub-Account Account.
HOW CHARGED? is reduced.
- ------------------------------------------------------------------------------
</TABLE>

If we receive appropriate governmental approvals, we may reduce or eliminate the
contract maintenance charge.

Mortality and Expense Risk Charges

We assume two risks with every Contract: a mortality risk and an expense risk.
We take a mortality risk that the Annuitant will live longer than expected or we
will pay a death benefit greater than your Contract Value. We also take an
expense risk that the administrative charges will not pay all the administrative
costs of your Contract.

You pay us to assume these risks by paying mortality and expense risk charges.
On each Valuation Date, we deduct the mortality and expense risk charges from
the Accumulation Unit Value of each Sub-Account. The effective annual rate of
these charges is 0.70%, which includes 0.50% for assuming mortality risk and
0.20% for assuming expense risk. If we do not actually incur the risks
associated with these charges, we will make money from collecting these charges.

Premium Taxes

Certain states and government authorities charge a premium tax on your purchase
payments. The premium tax may be as much as 3.5% of your purchase payments.
These premium taxes are charged either when you make purchase payments or when
we begin annuity payments.
<PAGE> 16

CHARGES
CHARGES

[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS

Currently, we pay all of the premium taxes charged by states and government
authorities. However, we may decide to stop paying the premium taxes in the
future. We would then deduct the amount of the premium taxes from your Contract
Value at one of the following times when:
O We pay the premium tax.

O You surrender or withdraw money from your Contract.

O The death benefit is paid.

O Annuity payments begin.
<PAGE> 17

INFORMATION ABOUT THE
INVESTMENT OPTIONS
INFORMATION ABOUT THE
INVESTMENT OPTIONS

[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS
INFORMATION ABOUT THE INVESTMENT OPTIONS

The Sub-Accounts and the Funds

Each Sub-Account invests in a corresponding Fund of the
Touchstone Variable Series Trust (TVST). Touchstone
Advisors is the investment advisor for each Fund. This
table contains information about the investment objective
and Sub-Advisor of each Fund:

<TABLE>
<CAPTION>
INVESTMENT
OBJECTIVE SUB-ADVISORS
<C> <S> <C>

The Fund seeks to increase the value David L. Babson & Company, Inc.
of its shares as a primary goal and Westfield Capital Management
EMERGING GROWTH to earn income as a secondary goal. Company, Inc.
- --------------------------------------------------------------------------------------------

The Fund seeks to increase the value
INTERNATIONAL of its shares over the long-term. Credit Suisse Asset Management
EQUITY
- --------------------------------------------------------------------------------------------

The Fund seeks to achieve a high
level of current income as its main
goal. The Fund may also seek to
increase the value of its shares, if
INCOME OPPORTUNITY consistent with its main goal. Alliance Capital Management L.P.
- --------------------------------------------------------------------------------------------

The Fund seeks to increase the value Fort Washington Investment
VALUE PLUS of its shares over the long-term. Advisors, Inc.
- --------------------------------------------------------------------------------------------

The Fund seeks to increase the value
of its shares over the long-term,
GROWTH & INCOME while receiving dividend income. Scudder Kemper Investments, Inc.
- --------------------------------------------------------------------------------------------

The Fund seeks to achieve an
increase in value and current
BALANCED income. OpCap Advisors, Inc.
- --------------------------------------------------------------------------------------------

The Fund seeks to provide a high
level of dividends and Fort Washington Investment
BOND distributions. Advisors, Inc.
- --------------------------------------------------------------------------------------------

The Fund seeks to provide a higher
level of current income than a money
market fund, while also seeking to
prevent large fluctuations in the
value of the Sub-Account's initial
investment. The Fund does not try to
keep a constant $1.00 per share net Fort Washington Investment
STANDBY INCOME asset value. Advisors, Inc.
- --------------------------------------------------------------------------------------------
</TABLE>

More complete information about each Fund, including
information about its expenses, is included in the TVST
Prospectus that is contained in this booklet. Please read
the TVST Prospectus carefully before you purchase a
Contract.
<PAGE> 18

INFORMATION ABOUT THE
INVESTMENT OPTIONS
INFORMATION ABOUT THE
INVESTMENT OPTIONS

[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS

Changes in the Sub-Accounts and the Funds

We may add, delete or combine Sub-Accounts. New Sub-Accounts will invest in
Funds we consider suitable. We may also substitute a new Fund or similar
investment option for the Fund in which a Sub-Account invests. We would make a
substitution to ensure the underlying Fund continues to be a suitable
investment. A substitution may be triggered by unsatisfactory investment
performance, a change in laws or regulations, a change in a Fund's investment
objectives or restrictions, a change in the availability of the Fund for
investment, or any other reason. Before any substitution, we will obtain any
required approvals, including approval from the SEC or from Contract owners.
<PAGE> 19

VALUATION OF YOUR INVESTMENTS
VALUATION OF YOUR INVESTMENTS

[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS
VALUATION OF YOUR INVESTMENTS

Sub-Accounts

The value of your interest in a Sub-Account is measured in Accumulation Units.
An Accumulation Unit is an accounting unit of measure. It is similar to a share
of a mutual fund. The value of an Accumulation Unit varies from day to day
depending on the investment performance of the Fund in which the Sub-Account is
invested and the expenses of the Sub-Account.

[The type that appears in side bars in the typeset document are enclosed in
Brackets "[" and "]" in the electronic file.]

[***ACCUMULATION UNIT
- --------------------------------------------------------------------------------
A unit of measure used to calculate a Contract owner's share of a Sub-
Account. Although it is not the same as a mutual fund share, it is similar.

***ACCUMULATION UNIT VALUE
- -------------------------------------------------------------------------------
The dollar value of an Accumulation Unit in a Sub-Account.]

The Accumulation Unit Value of each Sub-Account is calculated on each day that
the New York Stock Exchange is open for business (Valuation Date). The
Accumulation Unit Value of a Sub-Account on any Valuation Date is calculated by
dividing the value of the Sub-Account's net assets by the number of Accumulation
Units credited to the Sub-Account on the Valuation Date.

When you allocate purchase payments to a Sub-Account, your Contract is credited
with Accumulation Units. Other transactions, such as withdrawals, exchanges, and
payments of the annual contract maintenance charge, will increase or decrease
the number of Accumulation Units credited to your Contract.

The number of Accumulation Units added to or subtracted from your Contract is
calculated by dividing the dollar amount of the transaction by the Accumulation
Unit Value for the Sub-Account at the close of trading on the Valuation Date
when we process the transaction. To calculate the Accumulation Unit Value of a
Sub-Account on any Valuation Date, we start with the Accumulation Unit Value
from the preceding Valuation Date and adjust it to reflect the following items:

O The investment performance of the Sub-Account, which is based
on the investment performance of the corresponding Fund

O Any dividend or distributions paid by the corresponding Fund

O Any charges or credits for taxes that we determined were the result of
the investment operations of the Sub-Account

O The mortality and expense risk charge
O The contract administration charge
We reserve the right to change the number and value of the Accumulation Units
credited to your Contract so long as the change does not affect your Contract
Value or the benefits or other provisions of your Contract.
<PAGE> 20

PERFORMANCE INFORMATION

[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS
PERFORMANCE INFORMATION

We may include performance information for the Sub-Accounts in advertisements,
sales literature and reports to Contract owners. This performance information
will be based on historical performance. It is not intended to predict the
future performance of a Sub-Account.
Standardized Performance Information

We usually advertise average annual total return. Average annual total return
represents the average compounded rate of return on a hypothetical initial
investment of $1,000. It is calculated by comparing the hypothetical $1,000
investment in a Sub-Account to the hypothetical surrender value of the
investment at the end of a period. The periods that we normally include are 1
year, 5 year and 10 year periods. If a Contract has not been available for the
complete period, we include the period for which it was available.

Average annual total return reflects historical investment results and expenses
of the Sub-Account for a specific period. It also reflects any surrender charge
that you might pay if you surrendered your Contract at the end of the period. It
does not include any deductions for premium taxes.

Non-Standardized Performance Information

We may use other performance information, such as cumulative total return and
total return for other periods of time. We may compare the performance of a
Sub-Account to the performance of other separate accounts or investments as
listed in rankings prepared by independent organizations that monitor the
performance of separate accounts and other investments. We may also include
evaluations of the Sub-Accounts published by nationally recognized ranking
services or by nationally recognized financial publications.
<PAGE> 21

ANNUITY INCOME
PAYMENT OPTIONS
ANNUITY INCOME
PAYMENT OPTIONS

[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS
ANNUITY INCOME PAYMENT OPTIONS

Annuity Phase

During the annuity phase, we will make periodic annuity income payments based on
the annuity income payment option you choose (1A, 1B, 2A, 2B) as described on
the following page. In the Contract, we refer to annuity income payment options
as payout plans.

Determining the Income Date

Annuity income payments start on a specific date called the Income Date. The
Income Date is shown on page 3 of your Contract. If you do not select an Income
Date, the Income Date will be based on the birthday of the Annuitant. The
Annuitant is a natural person selected by you whose life is used to determine
the duration and amount of any annuity payments.

Generally, the Income Date is the first anniversary of your Contract Date on or
after the Annuitant's 80th birthday. If your Contract has not been in effect for
10 years on the Annuitant's 80th birthday, the Income Date will be the 10th
anniversary of your Contract Date.

You can change the Income Date by writing to us. We must receive this notice on
or before the scheduled Income Date. Once annuity income payments begin, you
cannot change the Income Date.

Choosing the Payee

You choose the person or persons to receive the annuity income payments. If you
do not select someone, the Annuitant will automatically receive the annuity
income payments. You can change the person you selected at any time by writing
to us. If the person you select to receive annuity income payments dies, you
will receive the annuity income payments unless you select another payee.

Determining the Payment Amount

Annuity income payment amounts are based on the Surrender Value of your Contract
on the Income Date and the payment option you choose.

Under all payment plans, we guarantee that you will earn interest at a minimum
rate of 3% each year.

Choosing the Frequency

Generally, we make annuity income payments monthly. You can request annuity
income payments on a quarterly, semiannual, or annual basis. If the Surrender
Value of your Contract is less than $1,000, we make one annuity income payment
in an amount equal to the Surrender Value. If each periodic payment will be less
than $50, we will change the frequency of the payments to increase the amount of
each periodic payment to at least $50.
<PAGE> 22

ANNUITY INCOME
PAYMENT OPTIONS
ANNUITY INCOME
PAYMENT OPTIONS

[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS

Choosing the Payment Option

You can select one of the four annuity income payment
options described below at any time before the Income Date.
Some states may limit the availability of payment options.
You can change the payment option you selected by writing
to us. We must receive this notice on or before the
scheduled Income Date. Once annuity income payments begin,
you cannot change your payment option.

If you do not elect an annuity payment plan, Life Income
Option 2A (monthly payments guaranteed for 10 years) will
apply.

<TABLE>
<CAPTION>
OVERVIEW OF ANNUITY INCOME PAYMENT OPTIONS
<C> <S>

INSTALLMENT INCOME OPTION 1A Fixed Period -- you select the number of years.
--------------------------------------------------------------------------------------------------------------

INSTALLMENT INCOME OPTION 1B Fixed Amount -- you select the amount of the monthly payment.
--------------------------------------------------------------------------------------------------------------

LIFE INCOME OPTION 2A One Life -- we make payments as long as the Annuitant lives.
--------------------------------------------------------------------------------------------------------------

Joint and Survivor -- we make payments as long as either the
LIFE INCOME OPTION 2B Annuitant or another designated person lives.
--------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE> 23

ANNUITY INCOME
PAYMENT OPTIONS
ANNUITY INCOME
PAYMENT OPTIONS

[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS

<TABLE>
<CAPTION>
ANNUITY INCOME PAYMENT OPTIONS
<S> <C>
FIXED PERIOD
Monthly Payment Amount: Based on the Surrender Value of your
Contract and the number of years in the payment period. Your
monthly payments will remain the same throughout the payment
period.
Payment Period: You select the number of years, but no more
than 30.
Special Rule for Qualified Contract: Payment period may not
INSTALLMENT INCOME extend beyond the life expectancy of the Annuitant.
OPTION 1A Option to Request Lump Sum Payment: Available at any time.
- -----------------------------------------------------------------------------------------
FIXED AMOUNT
Monthly Payment Amount: You select the amount, which must be
at least $5 for each $1,000 of Surrender Value. For example,
if your Surrender Value is $60,000, the minimum monthly
payment amount is $300 ($5 x $60). Your monthly payments
will remain the same throughout the payment period.
Payment Period: Payments are made until the entire amount,
including interest, is paid.
Special Rule for Qualified Contract: Payment period may not
INSTALLMENT INCOME extend beyond the life expectancy of the Annuitant.
OPTION 1B Option to Request Lump Sum Payment: Available at any time.
- -----------------------------------------------------------------------------------------
ONE LIFE
Monthly Payment Amount: Based on the Surrender Value of your
Contract, the age and sex of the Annuitant on the date of
the first payment, and the number of years chosen for
guaranteed payments. Your monthly payments will remain the
same throughout the payment period.
Payment Period: You select 10 or 20 years as the guaranteed
payment period. We make payments for as long as the
Annuitant lives even if the Annuitant lives longer than the
selected period. For example, if you select a 10-year
guaranteed payment period and the Annuitant lives for 12
years, we make payments for 12 years.
Special Rule for Qualified Contract: Payment period may not
extend beyond the life expectancy of the Annuitant or the
joint life expectancies of the Annuitants.
LIFE INCOME Option to Request Lump Sum Payment: Not available after the
OPTION 2A first payment is made.
- -----------------------------------------------------------------------------------------
JOINT AND SURVIVOR
Monthly Payment Amount: Based on the Surrender Value of your
Contract and the age and sex of the Annuitant and another
designated person on the date of the first payment. Your
monthly payments will remain the same throughout the payment
period.
Payment Period: Based on the lifetimes of the Annuitant and
another designated person; payments continue as long as
either person is living. If either person dies before the
first payment, we make annuity payments during the
survivor's lifetime under Life Income Option 2A guaranteed
for 10 years.
Special Rule for Qualified Contract: Payment period may not
extend beyond the life expectancy of the Annuitant or the
joint life expectancies of the Annuitants.
LIFE INCOME Option to Request Lump Sum Payment: Not available after the
OPTION 2B first payment is made.
- -----------------------------------------------------------------------------------------
</TABLE>
<PAGE> 24

GUARANTEED DEATH BENEFIT
GUARANTEED DEATH BENEFIT

[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS
GUARANTEED DEATH BENEFIT

If the Annuitant dies before the Income Date, we will pay a guaranteed death
benefit instead of annuity payments.

You select one or more person(s) who will receive this death benefit. These
people are called beneficiaries. You can change your beneficiaries at any time
by writing to us.

To determine the death benefit amount, we must receive proof of death of the
Annuitant and payment instructions for the beneficiary. If we do not receive
payment instructions for the beneficiary within 60 days of receipt of the proof
of death, we may pay the beneficiary in one lump sum.

Based upon the date we receive the proof of death and payment instructions, we
calculate the amount of the death benefit according to the following table:

ANNUITANT DIES BEFORE ANNUITY PAYMENTS BEGIN, BEFORE THE FIRST DAY OF THE
CALENDAR MONTH AFTER THE ANNUITANT'S 80TH BIRTHDAY.

The death benefit amount will equal the greater of the following 2 amounts:

- The Contract Value on the date we receive proof of death of the Annuitant
and payment instructions for the beneficiary

- The sum of all purchase payments minus any amounts withdrawn

ANNUITANT DIES BEFORE ANNUITY PAYMENTS BEGIN BUT ON OR AFTER THE FIRST
DAY OF THE CALENDAR MONTH AFTER THE ANNUITANT'S 80TH BIRTHDAY.

The death benefit amount will equal the Contract Value on the day we receive
proof of death of the Annuitant and payment instructions for the beneficiary.

ANNUITANT DIES AFTER ANNUITY INCOME PAYMENTS BEGIN.

Any remaining benefits will be paid based on the annuity income payment
option in effect.

<PAGE> 25

WSLAC AND
SEPARATE ACCOUNT 2
WSLAC AND
SEPARATE ACCOUNT 2

[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS
WSLAC AND SEPARATE ACCOUNT 2

WSLAC

Western-Southern Life Assurance Company (WSLAC) is a stock life insurance
company organized under the laws of the State of Ohio on December 1, 1980. It is
a wholly-owned subsidiary of The Western and Southern Life Insurance Company, a
mutual life insurance company originally organized under the laws of the State
of Ohio on February 23, 1888. Both companies issue insurance and annuity
contracts and are located at 400 Broadway, Cincinnati, Ohio 45202.

Separate Account 2

WSLAC established Separate Account 2 (SA2) under Ohio law on June 1, 1994. SA2
supports the Contracts and certain other variable annuity contracts that it
issues. SA2 is registered with the SEC as a unit investment trust. We may
operate SA2 as a management investment company or any other form permitted by
law. We may also deregister SA2 if registration with the SEC is no longer
required.

SA2 is currently divided into 8 Sub-Accounts: Emerging Growth, International
Equity, Income Opportunity, Value Plus, Growth & Income, Balanced, Bond and
Standby Income. SA2 holds the investments allocated to the Sub-Accounts by the
owners of the Contracts. It also holds assets for the benefit of owners of
certain other variable annuity contracts that it issues. SA2 invests the assets
of each Sub-Account in a Fund of the Touchstone Variable Series Trust (TVST).
The investment objective of a Sub-Account and the Fund in which it invests are
identical.

WSLAC owns SA2's assets but it separates SA2's assets from its general account
assets and the assets of its other separate accounts. Liabilities from any other
businesses conducted by WSLAC will not be charged to SA2's assets. We hold SA2's
assets exclusively for the benefit of owners and beneficiaries of the Contracts
and certain other variable annuity contracts issued by SA2. WSLAC is obligated
to pay all benefits provided under the Contracts.

The income, capital gains and capital losses of each Sub-Account are credited to
or charged against the assets of that Sub-Account without regard to the income,
capital gains or capital losses of any other Sub-Account or WSLAC.

<PAGE> 26

SERVICE PROVIDERS
SERVICE PROVIDERS

[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS
SERVICE PROVIDERS

Touchstone Advisors, Inc. is the investment advisor for each Fund. Subject to
the review and approval of the Board of Trustees of the TVST, it selects the
Sub-Advisors and regularly reviews the investment strategies of each Sub-Advisor
and the performance of each Fund. Its address is 311 Pike Street, Cincinnati,
Ohio 45202.

Investors Bank and Trust Company provides administrative and fund accounting
services to TVST. Its address is 200 Clarendon Street, Boston, Massachusetts
02116.

Touchstone Securities, Inc. is the distributor of the Contracts. Its principal
business address is 311 Pike Street, Cincinnati, Ohio 45202. Touchstone
Securities is a wholly-owned subsidiary of IFS Financial Services, Inc., a
wholly-owned subsidiary of WSLAC.

Touchstone Securities pays sales commissions to persons or entities that sell
the Contracts. These persons are called dealers. Sales commissions may be
calculated as a percentage of the purchase payments received for a Contract or a
percentage of the Contract Value (sometimes called a trail commission). Sales
commissions may also be based on a dealer's total sales and other performance
factors (sometimes called production bonuses).

<PAGE> 27

VOTING RIGHTS
VOTING RIGHTS

VOTING RIGHTS [ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS

Because each Sub-Account invests in a corresponding Fund of the TVST, WSLAC is
entitled to vote at any meeting of the Fund's shareholders. WSLAC, on behalf of
SA2, votes the shares of a Fund that are held by a Sub-Account according to the
instructions of the owners of Contracts who have invested in that Sub-Account.

If you have money in a Sub-Account on the record date for a meeting of the
shareholders of the corresponding Fund, we will ask you for voting instructions.
Your voting instructions will apply to a specific number of Fund shares. We will
calculate this number by determining the percentage of a Sub-Account that you
own and applying this percentage to the total number of Fund shares that the
Sub-Account owns.

We will mail materials to you at least 14 days before the shareholder meeting so
you can provide your voting instructions to us. If we do not receive voting
instructions from you, we will still vote the shares for which you are entitled
to provide instructions. We will vote these shares in the same proportion as the
voting instructions received by Contract owners who provide instructions. If
WSLAC itself is entitled to vote at the shareholder meeting, it will vote its
shares in the same manner.

We may not ask Contract owners for voting instructions if the applicable rules
and regulations change and permit us to vote the shares of a Fund. We may also
change the manner in which we calculate the number of shares for which you can
provide voting instructions if the applicable rules and regulations change.

We may disregard the voting instructions of Contract owners under certain
circumstances and state insurance regulators may require us to disregard these
instructions under certain circumstances. If we disregard the voting
instructions we receive, we will include a summary of our actions in our next
report to you.
<PAGE> 28

OTHER INFORMATION
ABOUT YOUR CONTRACT
OTHER INFORMATION
ABOUT YOUR CONTRACT

[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS
OTHER INFORMATION ABOUT YOUR CONTRACT

Confirmations and Statements

We will send you a confirmation of each purchase payment and other transactions,
such as transfers and partial withdrawals. We will also send you a statement
each year showing the value of your investment in the Sub-Accounts.

If you have invested money in a Sub-Account, you will also receive semi-annual
reports for SA2. These semi-annual reports will include a list of portfolio
securities held by the underlying Fund.

Processing Guidelines

We use certain guidelines to determine when we will process your Contract
application and other instructions. These processing guidelines determine your
Contract Date and the effective date of instructions that you send to us. The
effective date depends upon the time of day we receive your application or your
instructions, whether the New York Stock Exchange is open at that time and
whether your application and instructions are in good order.

If we receive an incomplete application or incomplete instructions from you, we
will contact you for more information. If we have not received all the
application information that we need within 5 business days of the day we
received your application, we will return your initial purchase payment to you
unless you tell us not to return it.

If you are the sole owner of your Contract, you must sign your Contract
application and other instructions. If you and another person are joint owners
of your Contract, you and your joint owner must both sign your Contract
application and other instructions.

Security Procedures

We have established security procedures, such as recording telephone calls. In
the future we may also require a personal identification number (PIN). We will
not be liable for losses due to unauthorized or fraudulent telephone
instructions if we follow reasonable security procedures and reasonably believe
the instructions are genuine.

Misstatement of Age or Sex

If the age or sex of the Annuitant is misstated in information sent to us, we
will change any benefits under the Contract to those benefits that your purchase
payments would have purchased if the correct age and sex had been stated. If we
do not discover the misstatement until after annuity payments have started, we
will deduct any overpayments, plus compound interest, from subsequent payments
and we will pay any underpayments, plus compound interest, in a lump sum.

<PAGE> 29

OTHER INFORMATION
ABOUT YOUR CONTRACT
OTHER INFORMATION
ABOUT YOUR CONTRACT

[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS

Assignment

Generally, you may assign your Contract, but you may assign a Contract purchased
in connection with a retirement plan only if assignment is permitted under
applicable law and the documents governing the plan. We will not be bound by any
assignment until written notice of the assignment is received and recorded at
the Touchstone Variable Annuity Service Center. Your rights and the rights of
your beneficiary will be affected by an assignment. We are not responsible for
the validity or tax consequences of any assignment.

Loans

You may be permitted to take a loan from your Contract if you purchased it in
connection with a 403(b) plan and the plan documents permit such loans. Loans
are not permitted under any other type of Contract.

No Dividends

The Contracts are "non-participating", which means that they do not pay
dividends. The investment results of the investment options that you choose are
reflected in your benefits.

Year 2000 Information

WSLAC began its effort to address the Year 2000 Compliance issue prior to 1990.
As of January 1, 1999, the internal effort is complete. All computer equipment
and software systems, communications equipment and software, and any affected
building equipment and facilities are expected to properly calculate, process
and use dates before, during and after January 1, 2000 without error or
interruption. In addition to its internal efforts, WSLAC has a Year 2000 Task
Force in place to monitor the Year 2000 efforts of its critical business
partners and suppliers. Should this Task Force determine that the Year 2000
efforts of any of these partners or suppliers will not be adequate, WSLAC will
develop contingency plans to address any issues which may arise.

Financial Statements and Additional Contract Information

Financial statements of WSLAC and SA2 are included in the Statement of
Additional Information along with additional information about the Contracts.
The table of contents of the Statement of Additional Information is included on
page 47. For a free copy, call the Touchstone Variable Annuity Service Center at
800.669.2796 (press 2).

<PAGE> 30

FEDERAL INCOME TAX
INFORMATION
FEDERAL INCOME TAX
INFORMATION

[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS
FEDERAL INCOME TAX INFORMATION

The following discussion summarizes the impact of certain federal income tax
laws on contributions to, earnings of and distributions from a Contract. It is
based on our understanding of these laws as they are currently in effect and
interpreted. It is not tax advice. YOU SHOULD CONSULT YOUR OWN TAX ADVISOR
BEFORE YOU PURCHASE A CONTRACT. Because this is a summary, it does not contain
all the information that may be important to you.

The impact of federal income taxes on your investment in a Contract depends,
among other things, on the following factors:

O WSLAC's tax status

O The tax status of the Contract

O Your tax status

O The tax status of your beneficiary

O The tax status of the person you select to receive annuity payments

Your investment may also be affected by changes that occur in the federal income
tax laws and by other tax laws, such as state or local income tax laws, federal
estate and gift tax laws and local estate and other similar laws. The effects of
such other laws on your investment in a Contract are not discussed in this
summary.

The following discussion assumes "you" are the owner of a Contract.

Tax Status of WSLAC

WSLAC is taxed as a life insurance company. Because the operations of the SA2
are part of WSLAC, WSLAC is responsible for any federal income taxes related to
the income of the SA2 and its Sub-Accounts. You are responsible for all taxes
related to your investment in a Contract.

Tax Status of the Contract

We believe that your Contract will be treated as an "annuity contract" under the
Internal Revenue Code (Code) and thus will provide the federal income tax
consequences discussed in this summary. We do not, however, guarantee the tax
status of any Contract. You bear the complete risk that your Contract may not be
treated as an "annuity contract" under the Code. A more detailed discussion of
various matters that might affect your Contract's status as an "annuity
contract" is included in the Statement of Additional Information.

If your Contract is not treated as an "annuity contract", the earnings allocable
to your investment in the Contract will be included in your income for federal
income tax purposes on a current basis, even if you have not yet received
payments from the Contract.

The discussions which follow entitled "Tax Treatment of Non-Qualified Contracts"
and "Tax Treatment of Qualified Contracts" will apply only if your Contract is
treated as an "annuity contract" under the Code.

<PAGE> 31

FEDERAL INCOME TAX
INFORMATION
FEDERAL INCOME TAX
INFORMATION

[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS

Tax Treatment of Non-Qualified Contracts

The information in this section of the Prospectus relates to Contracts that are
not purchased in connection with a retirement plan or program which qualifies
under Section 401, 403(b), 408, 408A or 457 of the Code. In this section of the
Prospectus, these Contracts will be called "Non-Qualified Contracts".

A Non-Qualified Contract is intended to be a tax-deferred investment. This means
that, if the Contract qualifies as an "annuity contract" under the Code, you
will not have to include in income for federal income tax purposes the
investment earnings of your Non-Qualified Contract until you make a withdrawal
from the Contract, surrender it or start receiving annuity payments from it.
When you make a withdrawal from your Non-Qualified Contract, surrender it or
receive an annuity payment from it, you will have to include in income for
federal income tax purposes the portion of the payment that reflects investment
earnings (but no other part of the payment).

Different rules may apply to an owner of a Non-Qualified Contract that is not a
natural person, such as a corporation or trust. If the owner of a Non-Qualified
Contract is not a natural person, you should consult a tax advisor for more
information about these rules.

The following discussion in this section explains how the general principles of
tax-deferred investing apply to a Non-Qualified Contract when the owner of such
Contract is a natural person. The discussion assumes at all times that your
Non-Qualified Contract will be treated as an "annuity contract" under the Code.

Tax Treatment of Purchase Payments

Generally, any purchase payments that you invest in your Non-Qualified Contract
will not be deductible in determining your federal income tax.

Tax Treatment of Withdrawals, Surrenders and Distributions

You will generally have to include in income for federal income tax purposes the
portion of any payment from your Non-Qualified Contract that exceeds the portion
of the cost basis (or principal) of the Contract which is allocable to such
payment. The difference between the cost basis and the value of your
Non-Qualified Contract represents the increase in the value of the Contract. The
taxable portion of a payment from your Non-Qualified Contract is generally taxed
at your marginal income tax rate.

[The type that appears in side bars in the typeset document are enclosed in
Brackets "[" and "]" in the electronic file.]

[***The cost basis of your Non-Qualified Contract is generally the
sum of your purchase payments for the Contract.]

Tax Treatment of Partial Withdrawals and Surrenders

PARTIAL WITHDRAWALS. A partial withdrawal refers to a withdrawal from
your Non-Qualified Contract that is less than its total value and is not paid in
the form of an annuity. Usually, a partial withdrawal of the value of your
Non-Qualified Contract will be treated as coming first from earnings (which
<PAGE> 32

FEDERAL INCOME TAX
INFORMATION
FEDERAL INCOME TAX
INFORMATION

[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS

represent the increase in the value of the Contract). This portion of the
withdrawal will be included in your income for federal income tax purposes.

After the earnings portion is exhausted, the remainder of the partial withdrawal
will be treated as coming from your principal in the Contract (generally the sum
of the purchase payments). This portion of the withdrawal will not be included
in your income for federal income tax purposes.

If your Non-Qualified Contract contains investments made prior to August 14,
1982, a partial withdrawal from the Contract will be treated, to the extent it
is allocable to such pre-August 14, 1982 investments, as coming first from
principal and then, only after the principal portion is exhausted, from
earnings.

SURRENDERS. If you surrender your Non-Qualified Contract and receive a lump sum
payment of its entire value, the portion of the payment that exceeds your then
remaining cost basis in the Contract will be included in your income for federal
income tax purposes. You will not include in income for federal income tax
purposes the part of the payment that is equal to such cost basis.

Tax Treatment of Annuity Payments

If you receive annuity payments from your Non-Qualified Contract, a fixed
portion of each payment is generally excludable from income for federal income
tax purposes as a tax-free recovery of your cost basis in the Contract and the
balance is included in income for such purposes.

The portion of the payment that is excludable from income is determined under
detailed rules provided in the Code (which in general terms determine such
excludable amount by dividing your cost basis in the Contract at the time the
annuity payments begin by the expected return under such Contract).

If the annuity payments continue after your cost basis has been recovered, such
additional payments will generally be included in full in income for federal
income tax purposes.

Penalty Tax on Distributions

Generally, a penalty equal to 10% of the amount of any payment that is
includable in your income for federal income tax purposes will apply to any
distribution you receive from a Non-Qualified Contract in addition to ordinary
income tax.

This 10% penalty will not apply, however, if the distribution meets certain
conditions. Some of the distributions that are excepted from the 10% penalty are
listed below:

O A distribution that is made on or after the date you reach age 59 1/2

O A distribution that is made on or after your death

O A distribution that is made when you are totally disabled
<PAGE> 33

FEDERAL INCOME TAX
INFORMATION
FEDERAL INCOME TAX
INFORMATION

[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS

O A distribution that is made as part of a series of substantially equal
periodic payments which are made at least annually for your life (or life
expectancy) or the joint lives (or joint life expectancies) of you and
your joint Annuitant under the Contract
O A part of a distribution that is attributable to your investment in the
Contract prior to August 14, 1982
O A distribution that is paid as an immediate annuity (within the meaning
of Section 72(u)(4) of the Code)

Tax Treatment of Assignments

An assignment or pledge by you of your Non-Qualified Contract may be treated as
if it were a payment to you of all or part of the value of the Contract and
therefore may be a taxable event. You should consult your own tax advisor before
you assign or pledge your Non-Qualified Contract.

Required Distributions

To qualify as an "annuity contract" under the Code, your Non-Qualified Contract
must meet certain distribution requirements in the event you die.

Generally, if you die before annuity payments begin, the amounts accumulated
under your Non-Qualified Contract either must be distributed within 5 years of
your death or must begin to be paid within one year of your death under a method
that will pay the entire value of the Contract over the life (or life
expectancy) of your beneficiary under the Contract.

Special rules apply, however, if your beneficiary under the Contract is your
surviving spouse. If your spouse is your beneficiary under the Contract, these
rules involving required distributions in the event of death will be applied as
if your surviving spouse had been the original owner of the Contract.

If you die after annuity payments have begun, payments generally must continue
at least as rapidly as under the method in effect at your death (unless such
method provides that payments stop at your death).

Withholding

Payments received from your Non-Qualified Contract are generally subject to
federal income tax withholding, unless you elect not to have taxes withheld and
you notify us that you are making this election.

Multiple Non-Qualified Contracts

All Non-Qualified Contracts that are issued to you within a calendar year period
are generally treated as one Contract for purposes of determining the tax
consequences of any distribution, and this may cause adverse or unanticipated
tax consequences. As a result, you should consult a tax advisor before
purchasing more than one Non-Qualified Contract in any calendar year period in
order to discuss the effect of such multiple purchases.
<PAGE> 34

FEDERAL INCOME TAX
INFORMATION
FEDERAL INCOME TAX
INFORMATION

[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS

Tax Treatment of Qualified Contracts

The information in this section of the Prospectus relates to Contracts that are
purchased in connection with certain retirement plans. In this section of the
Prospectus, these retirement plans will be called "Qualified Plans" and
Contracts purchased in connection with Qualified Plans will be called "Qualified
Contracts".

A Qualified Contract is intended to be a tax-deferred investment. This means
that, if the Qualified Contract and the Qualified Plan under which it was
purchased meet certain applicable rules of the Code, you will not have to
include in income for federal income tax purposes the investment earnings of
your Qualified Contract until you make a withdrawal from the Contract, surrender
it or start receiving annuity payments from it.

When you make a withdrawal from your Qualified Contract, surrender it or receive
an annuity payment from it, you will generally have to include in income for
federal income tax purposes the entire amount of the payment (except to the
extent it reflects your own "after-tax" contributions to the Contract or any
other cost basis you may have under the Contract).

Types of Qualified Contracts

The Qualified Contracts are designed to be suitable for use with the following
types of Qualified Plans:

O Traditional IRAs (individual retirement annuities under Section 408 of
the Code)

O Roth IRAs (individual retirement annuities under Section 408A of the
Code)

O Section 401 Plans (plans qualified under Section 401(a) of the Code, such
as profit sharing plans, including so-called 401(k) plans and money
purchase pension plans)

O Section 403(b) Plans (tax-sheltered annuities under Section 403(b) of the
Code)

O Section 457 Deferred Compensation Plans (deferred compensation plans
under Section 457 of the Code)

O SEPs (simplified Employee Pension Plans under Section 408(k) of the Code)

O Simple IRAs (Savings Incentive Match Plans for Employees under Section
408(p) of the Code)

O Texas ORP Plans (State of Texas Optional Retirement Program plans)

Because of the minimum purchase payment requirements, Qualified Contracts may
not be appropriate for some retirement plans.
<PAGE> 35

FEDERAL INCOME TAX
INFORMATION
FEDERAL INCOME TAX
INFORMATION

35
[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS

Limitations Imposed by the Code or the Qualified Plan

In most cases, the Code places limitations and restrictions on how a Qualified
Plan can be designed and operated. These limitations and restrictions relate to
various issues, including:

O Amounts of allowable contributions
O Form, manner and timing of distributions

O Vesting and nonforfeitability of interests

O Nondiscrimination in eligibility, participation, contributions and
benefits

O Tax treatment of distributions, withdrawals and surrenders

O Withdrawal from the plan, such as while the plan participant is still
employed by the employer of the plan

O Receipt and taxation of loans

A Qualified Contract that is issued under or in connection with a Qualified Plan
is subject to the terms and conditions of the Qualified Plan. If the information
in the Qualified Plan documents differs from the information in the Qualified
Contract, you should rely on the information in the Qualified Plan.

Tax Consequences of Participating in a Qualified Plan

The tax consequences of participating in a Qualified Plan vary with the type of
plan and the terms and conditions of the plan. Various penalty and excise taxes
may apply to contributions to or distributions from a Qualified Contract if the
contributions or distributions violate the limitations of the Qualified Plan or
the Code. Certain restrictions and penalties may apply to withdrawals and
surrenders from a Qualified Contract.

[The type that appears in side bars in the typeset document are enclosed in
Brackets "[" and "]" in the electronic file.]

[***The tax rules regarding Qualified Plans are complex, change frequently and
will have different applications depending on individual facts and
circumstances. You should consult your own tax advisors before you purchase a
Qualified Contract.]

TRADITIONAL AND ROTH IRAS. To help you understand the tax consequences of
purchasing a Qualified Contract in connection with a Traditional IRA or a Roth
IRA, we will provide you with an IRA Disclosure Statement.

SECTION 401 PLANS AND SECTION 403(b) PLANS. To help you understand the tax
consequences of purchasing a Qualified Contract in connection with a Section 401
Plan or a Section 403(b) Plan, we have included a supplement in this Prospectus
as to such Plans. The supplement summarizes certain federal income tax laws and
is based on our understanding of these laws. Because the supplement is a
summary, it does not contain all the information that may be important to you.
The supplement is for general informational purposes only.
TEXAS OPTIONAL RETIREMENT PROGRAM. To help you understand the tax consequences
of purchasing a Qualified Contract in connection with the Texas Optional
Retirement Program, we have included a supplement in this Prospectus as to this
Program. The supplement summarizes certain state and federal income tax laws and
is based on our understanding of these laws. Because the supplement is a
summary, it does not contain all the
<PAGE> 36

FEDERAL INCOME TAX
INFORMATION
FEDERAL INCOME TAX
INFORMATION

[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS

information that may be important to you. The supplement is for general
informational purposes only.

OTHER QUALIFIED PLANS. You should contact your own tax advisor for more
information about the tax consequences of investing in a Qualified Contract in
connection with a Section 457 Deferred Compensation Plan, a SEP or a Simple IRA.
<PAGE> 37

SUPPLEMENT A
SUPPLEMENT A

SUPPLEMENT A [ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS

Accumulation Unit Values

The Accumulation Unit Values shown in the table below are for an Accumulation
Unit outstanding throughout the periods. An explanation of how Accumulation Unit
Value is calculated is located on page 19 in this Prospectus.

[The type that appears in side bars in the typeset document are enclosed in
Brackets "[" and "]" in the electronic file.]

***ACCUMULATION UNIT VALUE
- --------------------------------------------------------------------------------
The dollar value of an Accumulation Unit in a Sub-Account.]

<TABLE>
<CAPTION>
YEARS ENDED UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR AT END OF YEAR
<S> <C> <C> <C> <C>
1995* 10.000000 11.741102 2,008
1996 11.741102 12.947664 4,066
EMERGING GROWTH 1997 12.947664 17.169847 15,058
- --------------------------------------------------------------------------------------------
1995* 10.000000 11.282669 2,158
1996 11.282669 12.475967 4,538
INTERNATIONAL EQUITY 1997 12.475967 14.203413 10,507
- --------------------------------------------------------------------------------------------
1995* 10.000000 12.572866 2,048
1996 12.572866 15.886632 3,590
INCOME OPPORTUNITY 1997 15.886632 17.673231 58,064
- --------------------------------------------------------------------------------------------
1995* 10.000000 12.533949 2,623
1996 12.533949 14.291347 4,690
GROWTH & INCOME 1997 14.291347 16.995828 15,766
- --------------------------------------------------------------------------------------------
1995* 10.000000 12.018023 1,771
1996 12.018023 13.922266 3,958
BALANCED 1997 13.922266 16.382306 10,276
- --------------------------------------------------------------------------------------------
1995* 10.000000 11.309517 1,615
1996 11.309517 11.505592 2,904
BOND 1997 11.505592 12.322051 7,005
- --------------------------------------------------------------------------------------------
1995* 10.000000 10.364840 1,059
1996 10.364840 10.819908 19,762
STANDBY INCOME 1997 10.819908 11.314893 11,233
- --------------------------------------------------------------------------------------------
</TABLE>

* Operations began on February 23, 1995
<PAGE> 38

SUPPLEMENT B
SUPPLEMENT B

38
[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS

SUPPLEMENT B

Federal Income Tax Information
Section 401 Plans and Section 403(b) Plans

Section 401(a) of the Code permits sole proprietorships, partnerships,
corporations and certain other organizations operating businesses to establish
various types of Qualified Plans (called Section 401 Plans in this Supplement)
for their employees (and, if applicable, those self-employed persons working in
the businesses). A Qualified Contract may be purchased to provide benefits to a
participant in a Section 401 Plan.

Section 403(b) of the Code permits public schools and certain charitable,
educational and scientific organizations described in Section 501(c)(3) of the
Code to purchase Qualified Contracts as "tax-sheltered annuities" (called
Section 403(b) Plans in this Supplement) for their employees.

[The type that appears in side bars in the typeset document are enclosed in
Brackets "[" and "]" in the electronic file.]

[***Because the provisions of Section 401 Plans and Section 403(b) Plans vary
from plan to plan, you should contact your plan administrator for additional
information.]

The Code places limitations and restrictions on all Section 401 and Section
403(b) Plans, but the specific rules set forth in the applicable plan will also
affect how the plan works. If the information in the Qualified Plan documents
differs from the information in the Qualified Contract or in this Supplement,
you should rely on the information in the Qualified Plan documents.

This discussion explains certain federal income tax rules applicable to a
Qualified Contract purchased in connection with a Section 401 Plan or a Section
403(b) Plan. This discussion assumes at all times that the Contract qualifies as
an "annuity contract" and a "Qualified Contract", and that the plan to which it
relates qualifies as a "Qualified Plan" under the Code.

Tax Treatment of Contributions

Other than "after-tax" contributions made by you to a Section 401 Plan,
contributions to a Section 401 Plan or a Section 403(b) Plan generally are NOT
included in your income for federal income tax purposes until the contributions
are distributed from the plan, provided such contributions are not in excess of
any benefit, contribution or nondiscrimination limits that apply to the plan.

Tax Treatment of Distributions

Any distributions from Qualified Contracts purchased in connection with Section
401 Plans or Section 403(b) Plans generally are included in income for federal
income tax purposes as ordinary income, except to the extent the distributions
are allocable to your after-tax contributions.

SPECIAL TAX TREATMENT FOR LUMP SUM DISTRIBUTIONS FROM A SECTION 401 PLAN. If you
receive (or your beneficiary receives) an amount from a Qualified Contract as
part of a distribution from a Section 401 Plan and the distribution qualifies as
a lump sum distribution under the Code, the portion of the distribution that is
included in income may be eligible for special tax treatment. Your plan
administrator should provide you with information about the tax treatment of a
lump sum distribution at the time you receive such a distribution.
<PAGE> 39

SUPPLEMENT B
SUPPLEMENT B

[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS

SPECIAL RULES FOR DISTRIBUTIONS THAT ARE ROLLED OVER. In addition, special
rules apply to a distribution from a Qualified Contract that relates to a
Section 401 Plan or a Section 403(b) Plan if such distribution is properly
rolled over in accordance with the provisions of the Code. These provisions
contain various requirements, including the requirement that the rollover be
made directly from the distributing plan or within 60 days of receipt:

O To a Traditional IRA or to an individual retirement account under Section
408 of the Code

O To another Section 401 Plan or a certain kind of annuity plan under
Section 403(a) of the Code (if the distribution is from a Section 401
Plan)

O To a Section 403(b) Plan (if the distribution is from a Section 403(b)
Plan)

These special rules only apply to distributions that qualify as "eligible
rollover distributions" under the Code. In general, a distribution from a
Section 401 Plan or Section 403(b) Plan will be an eligible rollover
distribution EXCEPT to the extent:

O It represents the return of your "after-tax" contributions or is not
otherwise includable in income

O It is part of a series of payments made for your life (or life
expectancy) or the joint lives (or joint life expectancies) of you and
your beneficiary under the plan or for a period of less than ten years

O It is a required minimum distribution under Section 401(a)(9)
of the Code as described below

O It is made from a Section 401 Plan by reason of a hardship

Required minimum distributions under Section 401(a)(9) include the following
required payments:

O Required payments for the calendar year in which you reach age 70 1/2 or
any later calendar year

O If the plan is a Section 401 Plan that is not maintained by certain
governmental or church-sponsored organizations and if you are not treated
under the Code as owning 5% or more of the employer of the applicable
plan, required payments for the later of the calendar year in which you
reach age 70 1/2 or the calendar year you terminate employment with the
employer or for any later calendar year

The administrator of the applicable Section 401 Plan or Section 403(b) Plan
should provide additional information about these rollover tax rules when a
distribution is made.

DISTRIBUTIONS IN THE FORM OF ANNUITY PAYMENTS. If any distribution is made from
a Qualified Contract that relates to a Section 401 Plan or Section 403(b) Plan
and is made in the form of annuity payments (and is not eligible for rollover or
is not in any event rolled over), a fixed portion of each payment is generally
excludable from income for federal income tax purposes to the extent it is
treated as allocable to your "after-tax"
<PAGE> 40

SUPPLEMENT B
SUPPLEMENT B

[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS

contributions to the Contract (and any other cost basis you have in the
Contract). To the extent the payment exceeds such portion, it is includable in
income for federal income tax purposes.

The portion of the annuity payment that is excludable from income is determined
under detailed rules provided in the Code. In very general terms, these detailed
rules determine such excludable amount by dividing your "after-tax"
contributions and other cost basis in the Contract that remain in the plan at
the time the annuity payments begin by the anticipated number of payments to be
made under the Contract. If the annuity payments continue after the number of
anticipated payments has been made, such additional payments will generally be
included in full in income for federal income tax purposes.

WITHHOLDING. If any part of a distribution from a Qualified Contract that
relates to a Section 401 Plan or a Section 403(b) Plan is eligible for rollover,
but is not directly rolled over to a Traditional IRA or another eligible
employer plan or account pursuant to your election, it is generally subject to
federal income tax withholding at a rate of 20%.

Any taxable part of a distribution from such Contract that is not eligible for a
direct rollover is subject to different withholding rules that are described in
the Code. You can elect completely out of withholding as to such part.

Penalty Tax on Withdrawals

Generally, there is a penalty tax equal to 10% of the portion of any payment
from a Qualified Contract issued in connection with a Section 401 Plan or a
Section 403(b) Plan that is included in your income for federal income tax
purposes.

This 10% penalty will not apply if the distribution meets certain conditions.
Some of the distributions that are excepted from the 10% penalty are listed
below:

O A distribution that is made on or after the date you reach age 59 1/2

O A distribution that is properly rolled over to a Traditional IRA or to
another eligible employer plan or account

O A distribution that is made on or after your death

O A distribution that is made when you are totally disabled (as defined in
Section 72(m) of the Code)

O A distribution that is made as part of a series of substantially equal
periodic payments which begin after you separate from service with the
employer of the applicable plan and are made at least annually for your
life (or life expectancy) or the joint lives (or joint life expectancies)
of you and your joint Annuitant under the Qualified Contract

O A distribution that is made to you by reason of your separation from
service with the employer of the applicable plan during or after the
calendar year in which you reach age 55

O A distribution that is made to you to the extent it does not exceed the
amount allowable to you as a deduction for medical care under
<PAGE> 41

SUPPLEMENT B
SUPPLEMENT B

[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS

Section 213 of the Code (determined without regard to whether or not you
itemize deductions)

O A distribution that is made to an alternate payee of yours pursuant to a
qualified domestic relations order (that meets the conditions of Section
414(p) of the Code)

Required Distributions

Distributions from a Qualified Contract issued in connection with a Section 401
Plan or a Section 403(b) Plan must meet certain rules concerning required
distributions that are set forth in the Code. Such rules are summarized below:

O Required distributions generally must start by April 1 of the calendar
year following the calendar year in which you reach age 70 1/2.

O If a Section 401 Plan is involved (except for a Section 401 Plan
maintained by certain governmental or church-sponsored organizations) and
you are not considered a 5% or more owner of the employer of the plan
under the rules of the Code, the required distributions generally do not
have to start until April 1 of the calendar year following the later of
the calendar year in which you reach age 70 1/2 or the calendar year in
which you terminate employment with the employer.

O When distributions are required under the Code, a certain minimum amount,
determined under the Code and regulations issued
thereunder, must be made each year.

In addition, other rules apply under the Code to determine when and how required
minimum distributions must be made in the event of your death. The applicable
plan documents will contain such rules.

Special Provisions

LOANS. Qualified Contracts used for Section 403(b) Plans generally allow you to
borrow money from such Contracts. In addition, certain Section 401 Plans may
allow you to borrow money from a Qualified Contract that is used for such plans.

In order to meet the rules of the Code so that such loans are not considered
taxable distributions when made, such loans must generally meet the rules listed
below:

O The amount of each loan must generally be at least $1,000.

O The interest rate on each loan must be comparable to the rate charged by
commercial lenders for similar loans.

O The loan must be repaid in substantially equal payments made at least
quarterly.

O Generally, you cannot surrender or annuitize the Contract while a loan is
outstanding.

O There may also be restrictions on the maximum time for
repaying the loan.
<PAGE> 42

SUPPLEMENT B
SUPPLEMENT B

[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS

A Section 403(b) Plan or a Section 401 Plan may contain additional or different
rules on loans from a Qualified Contract. The administrator of the applicable
Section 403(b) Plan or Section 401 Plan should be able to provide information
about these rules.

WITHDRAWAL LIMITATIONS. The Code limits the withdrawal of amounts from a
Qualified Contract used for a Section 401 Plan or Section 403(b) Plan to the
extent it is attributable to contributions made pursuant to a salary reduction
agreement or other cash or deferred arrangement. This limit applies in a
Qualified Contract used for a Section 403(b) Plan only to the extent the
withdrawal is attributable to contributions made after December 31, 1988.

If such withdrawal limitations apply, withdrawals of such amounts generally can
be made only when you reach age 59 1/2, when you separate from service with the
employer of the plan, when you become totally disabled or in the case of your
hardship. Withdrawals for hardship do not include earnings allocated for you
under the plan after 1988.

You should consult your own tax advisor about the tax consequences of and rules
for a loan or a withdrawal from a Section 401 Plan or Section 403(b) Plan.
<PAGE> 43

SUPPLEMENT C
SUPPLEMENT C

SUPPLEMENT C [ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS

State of Texas Optional Retirement Program

The Contract is eligible for the State of Texas Optional Retirement Program
(ORP). Plans established under the Texas ORP will be referred to as "Texas ORP
Plans" in this Supplement. Contracts purchased in connection with Texas ORP
Plans will be referred to as "ORP Contracts" in this Supplement.

ORP Contracts

ELIGIBLE PARTICIPANTS. An ORP Contract may be purchased to provide benefits to
a participant in a Texas ORP Plan. Employees of Texas "state supported
institutions of higher education" may direct contributions and transfers to an
ORP Contract. "State supported institutions of higher education" are defined in
Section 51.351 of Subchapter G of Title 3 of the Higher Education Code of the
State of Texas.

EMPLOYER PREMIUMS. Employer premiums are purchase payments applied to the ORP
Contract that are attributable to employer contributions other than
contributions made through a salary reduction agreement. Employer premiums are
subject to vesting under the rules governing Texas ORP Plans.

LOANS. Participants in a Texas ORP Plan are not allowed to borrow money from an
ORP Contract.

DISTRIBUTIONS. Distributions from an ORP Contract are considered to have begun
if:

O Distributions are made on account of you reaching your
required beginning date

O Before the required beginning date, irrevocable distributions commence
over a period permitted and in an annuity form acceptable under Section
1.401(a)(9) of the Regulations

Distributions of funds from an ORP Contract may only be made upon the occurrence
of a "distributable event". Title 8, Chapter 830.105 of the Texas Government
Code defines "distributable event" as death, retirement, termination of
employment in all public institutions of higher education in Texas, or
attainment of age 70 1/2.

SPECIFIC PLAN RULES. The Internal Revenue Code and Texas laws place limitations
and restrictions on Texas ORP Plans, but the specific rules set forth in the
applicable plan will also affect how the plan works. Because the provisions of
Texas ORP Plans vary from plan to plan, you should contact your plan
administrator for additional information. If the information in the Texas ORP
Plan documents differs from the information in the ORP Contract or in this
Supplement, you should rely on the information in the Texas ORP Plan documents.

Federal Income Tax Information

This discussion explains certain federal income tax rules applicable to an ORP
Contract. This discussion assumes at all times that the Contract
<PAGE> 44

SUPPLEMENT C
SUPPLEMENT C

[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS

qualifies as an "annuity contract" under the Code, the Contract qualifies as an
"ORP Contract" under Texas law and the plan to which it relates qualifies as a
"Texas ORP Plan" under Texas law.

The specific rules related to ORP Contracts and Texas ORP Plans discussed in
Section A above, such as the rules on when distributions may be made from an ORP
Contract, are applicable in addition to the federal income tax rules discussed
in the previous section.

Tax Treatment of Contributions

Contributions to a Texas ORP Plan generally are not included in your income for
federal income tax purposes until the contributions are distributed from the
plan, provided such contributions are not in excess of any benefit, contribution
or nondiscrimination limits that apply to the plan.

Tax Treatment of Distributions

Any distributions from a Texas ORP Plan generally are included in income for
federal income tax purposes as ordinary income, except to the extent the
distributions are allocable to your after-tax contributions.

In addition, special rules apply to a distribution from an ORP Contract if such
distribution is properly rolled over in accordance with the provisions of the
Code. The administrator of the applicable Texas ORP Plan should provide
additional information about these rollover tax rules when a distribution is
made.

Penalty Tax on Withdrawals

Generally, there is a penalty tax equal to 10% of the portion of any payment
from an ORP Contract that is included in your income for federal income tax
purposes.

This 10% penalty will not apply if the distribution meets certain conditions.
Some of the distributions that are excepted from the 10% penalty are listed
below:

O A distribution that is made on or after the date you reach age 59 1/2

O A distribution that is properly rolled over to a Traditional IRA or to
another eligible employer plan or account

O A distribution that is made on or after your death

O A distribution that is made when you are totally disabled (as defined in
Section 72(m) of the Code)

SUPPLEMENT C
SUPPLEMENT C

[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS

O A distribution that is made to you by reason of your separation from
service with the employer of the applicable plan during or after the
calendar year in which you reach age 55

O A distribution that is made to you to the extent it does not exceed the
amount allowable to you as a deduction for medical care under Section 213
of the Code (determined without regard to whether or not you itemize
deductions)

O A distribution that is made to an alternate payee of yours pursuant to a
qualified domestic relations order (that meets the conditions of Section
414(p) of the Code)

Required Distributions Under the Code

Distributions from an ORP Contract must meet certain rules concerning required
distributions that are set forth in the Code. Such rules are summarized below:

O Required distributions generally must start by April 1 of the calendar
year following the calendar year in which you reach age 70 1/2.

O If you do not terminate your employment until after age 70 1/2, the
required distributions generally do not have to start until April 1 of
the calendar year following the later of the calendar year in which you
reach age 70 1/2 or the calendar year in which you terminate employment
with the employer.

O When distributions are required under the Code, a certain minimum amount,
determined under the Code and regulations issued
thereunder, must be made each year.

In addition, other rules apply under the Code to determine when and how required
minimum distributions must be made in the event of your death. The applicable
plan documents will contain such rules.

Withdrawal Limitations Under the Code

The Code limits the withdrawal of amounts from an ORP Contract to the extent it
is attributable to contributions made pursuant to a salary reduction agreement
or other cash or deferred arrangement. If such withdrawal limitations apply,
withdrawals of such amounts generally can be made only when you reach age
59 1/2, when you separate from service with the employer of the plan, when you
become totally disabled or in the case of your hardship. Withdrawals for
hardship do not include earnings allocated for you under a Texas ORP Plan after
1988.

You should consult your own tax advisor about the tax consequences of and rules
for a withdrawal from a Texas ORP Plan.
<PAGE> 46

[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS

[THIS PAGE INTENTIONALLY LEFT BLANK]

<PAGE> 47

TABLE OF CONTENTS FOR
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS FOR
STATEMENT OF ADDITIONAL INFORMATION

47
[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS
TABLE OF CONTENTS FOR STATEMENT OF ADDITIONAL INFORMATION

<TABLE>
<CAPTION>
PAGE
<S> <C>
General.................................................... 3
Safekeeping Of Assets...................................... 3
Distribution Of The Contracts.............................. 3
Sub-Account Performance.................................... 4
Sub-Accounts Accumulation Unit Value....................... 5
Fixed Annuity Income Payments.............................. 6
Qualification As An "Annuity Contract"..................... 7
Independent Accountants.................................... 9
Financial Statements....................................... 9
</TABLE>

<PAGE> 48

[ICON]TOUCHSTONE ADVISOR VARIABLE ANNUITY PROSPECTUS

[THIS PAGE INTENTIONALLY LEFT BLANK]

<PAGE> 49

WESTERN-SOUTHERN LIFE ASSURANCE COMPANY
SEPARATE ACCOUNT 2
TOUCHSTONE ADVISOR VARIABLE ANNUITY

FLEXIBLE PURCHASE PAYMENT DEFERRED
VARIABLE ANNUITY CONTRACTS

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

STATEMENT OF ADDITIONAL INFORMATION

January 4, 1999

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

This Statement of Additional Information is not a prospectus, but
contains information in addition to that set forth in the current prospectus
dated January 4, 1999 (the "Prospectus") for certain variable annuity contracts
("Contracts") offered by Western-Southern Life Assurance Company ("WSLAC")
through its Separate Account 2 ("SA2"), and should be read in conjunction with
the Prospectus. Unless otherwise noted, the terms used in this Statement of
Additional Information have the same meanings as those set forth in the
Prospectus.

A copy of the Prospectus may be obtained by calling the Touchstone
Variable Annuity Service Center at 1-800-669-2796 (press 2) or by written
request to WSLAC at P.O. Box 2850, Cincinnati, Ohio 45201-2850.

<PAGE> 50

TABLE OF CONTENTS
OF
STATEMENT OF ADDITIONAL INFORMATION

PAGE
----

General 3

Safekeeping of Assets 3

Distribution of the Contracts 3

Sub-Account Performance 4

Sub-Accounts Accumulation Unit Value 5

Fixed Annuity Income Payments 6

Qualification as an "Annuity Contract" 7

Diversification 7
Excessive Control 7
Required Distributions 8

Independent Accountants 9

Financial Statements 9

Page 2
<PAGE> 51

GENERAL

Except as otherwise indicated herein, all capitalized terms shall have
the meanings assigned to them in the Prospectus.

WSLAC is subject to regulation by the Ohio Department of Insurance,
which periodically examines its financial condition and operations. WSLAC also
is subject to the insurance laws and regulations of all jurisdictions in which
it offers Contracts. Copies of the Contract have been filed with, and, where
required, approved by insurance regulators in those jurisdictions. WSLAC must
submit annual statements of its operations, including financial statements, to
such state insurance regulators so that they may determine solvency and
compliance with applicable state insurance laws and regulations.

WSLAC and SA2 have filed a Registration Statement regarding the
Contracts with the Securities and Exchange Commission under the Investment
Company Act of 1940 and the Securities Act of 1933. The Prospectus and this
Statement of Additional Information do not contain all of the information in the
Registration Statement.

SAFEKEEPING OF ASSETS

The assets of SA2 are held by WSLAC, separate from WSLAC's general
account assets and any other separate accounts that WSLAC has or will establish.
WSLAC maintains records of all purchases and redemptions of the interests in the
Funds held by the Sub-Accounts. WSLAC maintains fidelity bond coverage for the
acts of its officers and employees.

DISTRIBUTION OF THE CONTRACTS

As disclosed in the Prospectus, the Contracts are distributed through
Touchstone Securities, Inc. (the "Distributor"), which is a wholly-owned
subsidiary of IFS Financial Services, Inc. ("IFS"). IFS is a wholly-owned
subsidiary of WSLAC. The Distributor is a member of the National Association of
Securities Dealers, Inc. The offering of the Contracts is continuous, and WSLAC
does not anticipate discontinuing offering the Contracts, although it reserves
the right to do so.

Sales commissions attributable to the Contracts and paid by WSLAC to
the Distributor and amounts retained by the Distributor are shown below for the
periods indicated.

<TABLE>
<CAPTION>
Amounts Retained by
Period Sales Commissions Paid Distributor
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
For the period from February 23, 1995 to $ 159,807 $ 26,967
December 31, 1995
For the year ended December 31, 1996 $1,902,186 $305,688
For the year ended December 31, 1997 $7,686,342 $790,452
</TABLE>

Page 3
<PAGE> 52

SUB-ACCOUNT PERFORMANCE

The performance of the Sub-Accounts may be quoted or advertised by
WSLAC in various ways. All performance information supplied by WSLAC in
advertising is based upon historical results of the Sub-Accounts and is not
intended to indicate future performance of either one. Total returns and other
performance information may be quoted numerically or in a table, graph or
similar illustration. The value of an Accumulation Unit and total returns
fluctuate in response to market conditions, interest rates and other factors.

Average annual total returns are calculated by determining the average
annual compounded rates of return over one, five and ten year periods (or since
commencement of operations) that would equate an initial hypothetical investment
to the ending redeemable value according to the following formula:

P(1 + T)n = ERV where:

P = a hypothetical initial purchase payment of
$1,000
T = average annual total return
n = number of years and/or portion of a year
ERV = ending redeemable value of a hypothetical
initial purchase payment of $1,000 at the
end of the applicable period

The following table sets forth the type of total return data for each of the
Sub-Accounts that will be used in advertising, in each case for the period ended
December 31, 19987

<TABLE>
<CAPTION>
Type of Emerging INTERNATIONAL INCOME GROWTH & STANDBY
Performance Growth EQUITY OPPORTUNITY INCOME BALANCED BOND INCOME
Data Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
<S> <C> <C> <C> <C> <C> <C> <C>
Total Return 29.11% 10.35% 7.75% 15.42% 14.17% 3.60% 1.07%
For Year

Total Return 32.61% 13.85% 11.25% 18.92% 17.67% 7.10% 4.57%
For Year
Measured by
Change In
Accumulation
Unit Value **

Average Annual 17.25% 9.57% 18.46% 16.83% 15.31% 4.07% 0.88%
Total Return
Since Inception*

Total Return 71.70% 42.03% 76.73% 69.96% 63.82% 23.22% 13.15%
Since Inception
Measured By
Change In
Accumulation
Unit Value**
</TABLE>

* Based on a period beginning February 28, 1995.

** Calculated by determining the change in the Accumulation Unit Value from the
beginning of the period to the end of the period and dividing such amount by the
Accumulation Unit Value at the end of the period.

Page 4
<PAGE> 53

While average annual total returns are convenient means of comparing
investment alternatives, investors should realize that any Sub-Account's
performance is not constant over time, but changes from year to year, and that
average annual total returns represent averaged figures as opposed to the actual
year-to-year performance of any Sub-Account.

Average annual total return is calculated as required by applicable
regulations. In addition to average annual total returns, a Sub-Account may
quote cumulative total returns reflecting the simple change in value of any
investment over a stated period. Average annual and cumulative total returns may
be quoted as a percentage or as a dollar amount.

"Total return" or "average annual total return" quoted in advertising
reflects all aspects of a Sub-Account's return, including the effect of
reinvestment by the Sub-Account of income and capital gain distributions and any
change in the Sub-Account's value over the applicable period. Such quotations
reflect administrative charges and risk charges. Since the Contract is intended
as a long-term investment, total return calculations will assume that no partial
withdrawals from the hypothetical Contract occurred during the applicable
period, but that a Surrender Charge would be incurred upon the hypothetical
withdrawal at the end of the applicable period.

Any total return quotation provided for a Sub-Account should not be
considered as representative of the performance of the Sub-Account in the
future, since the net asset value will vary based not only on the type, quality
and maturities of the securities held in the underlying fund in which the
Sub-Account invests, but also on changes in the current value of such securities
and on changes in the expenses of the Sub-Account and the underlying fund. These
factors and possible differences in the methods used to calculate total return
should be considered when comparing the total return of a Sub-Account to total
returns published for other investment companies or other investment vehicles.

WSLAC may advertise examples of the effects of dollar cost averaging,
whereby a Contract owner periodically invests a fixed dollar amount in a
Sub-Account, thereby purchasing fewer Accumulation Units when prices are high
and more Accumulation Units when prices are low. While such a strategy does not
assure a profit nor guard against a loss in a declining market, the Contract
owner's average cost per Accumulation Unit can be lower than if fixed numbers of
Accumulation Units had been purchased at the same intervals. In evaluating
dollar cost averaging, owners should consider their ability to continue
purchasing Accumulation Units during periods of low price levels.

Performance information for any Sub-Account may be compared, in reports
to Contract owners and in advertising, to stock indices, other variable annuity
separate accounts or other products tracked by Lipper Analytical Services, or
other widely used independent research firms, which rank variable annuities and
investment companies by overall performance, investment objectives and assets.
Unmanaged indices may assume the reinvestment of dividends but generally do not
reflect deductions for annuity charges and investment management costs.

SUB-ACCOUNTS ACCUMULATION UNIT VALUE

In this discussion, the term Valuation Period means the period of time
beginning at the

Page 5
<PAGE> 54

Close of trading on the New York Stock Exchange (NYSE) on one Valuation Date, as
defined below, and ending at the close of trading on the NYSE on the next
succeeding Valuation Date. A Valuation Date is each day valuation of the
Sub-Accounts is required by law including every day that the NYSE is open.

The value of an Accumulation Unit at the close of any Valuation Period
is determined for each Sub-Account by multiplying the Accumulation Unit Value of
the Sub-Account at the close of the immediately preceding Valuation Period by
the "Net Investment Factor" (described below). Depending upon investment
performance of the underlying fund in which the Sub-Account is invested, the
Accumulation Unit Value may increase or decrease.

The Net Investment Factor for each Sub-Account for any Valuation Period
is determined by dividing (a) by (b) and subtracting (c) from the result, where:

(a) equals: (1) the net asset value per share of the underlying
fund at the end of the current Valuation Period, plus

(2) the per share amount of any dividend or capital
gain distribution made by the underlying fund on
shares held in the Sub-Account if the "ex-dividend"
date occurs during the current Valuation Period, plus
or minus

(3) a per share charge or credit for any taxes
reserved, which are determined by WSLAC to have
resulted from the investment operations of the
Sub-Account during the current Valuation Period;

(b) is the net asset value per share of the corresponding
underlying fund determined at the end of the immediately
preceding Valuation Period; and

(c) is a factor representing the charges deducted from the
Sub-Account on a daily basis for the daily portion of the
annual Mortality and Expense Risk Charge and the annual
Contract Administration Charge.

FIXED ANNUITY INCOME PAYMENTS

The Contracts provide only for fixed annuity payment options. The
amount of such payments is calculated by applying the Surrender Value at
annuitization, less any applicable premium tax, to the income payment rates for
the income payment option selected. Annuity payments will be the larger of:

o the income based on the rates shown in the Contract's Annuity Tables
for the income payment option chosen; and

o the income calculated by applying the proceeds as a single premium at
WSLAC's current rates in effect on the date of the first annuity
payment for the same option.

Annuity payments under any of the income payment options will not vary
in dollar amount and will not be affected by the future investment performance
of the Variable Account.

Page 6
<PAGE> 55

QUALIFICATION AS AN "ANNUITY CONTRACT"

For the Contract to be treated as an "annuity contract" under the Code,
the Contract must meet certain requirements under the Code. The following
sections discuss various matters that might affect the Contract's status an
"annuity contract."

DIVERSIFICATION

Section 817(h) of the Code imposes certain diversification standards on
the underlying assets of all variable annuity contracts. The Code generally
provides that a variable contract will not be treated as an annuity contract for
any period (and any subsequent period) for which the investments are not, in
accordance with regulations prescribed by the United States Treasury Department,
adequately diversified. The Code contains a safe harbor provision which provides
that variable contracts such as the Contracts meet the diversification
requirements if, as of the end of each quarter, (1) the underlying assets meet
the diversification standards prescribed elsewhere in the Code for an entity to
be classified as a regulated investment company and (2) no more than 55% of the
total assets consist of cash, cash items, U.S. government securities and
securities of other regulated investment companies.

In March 1989, the Treasury Department issued regulations that
established diversification requirements for the investment portfolios such as
the Funds underlying variable contracts such as the Contracts. The regulations
amplify the diversification requirements for variable contracts set forth in the
Code and provide an alternative to the safe harbor provision described in
Section 817(h) of the Code. Under the Regulations, an investment portfolio will
be deemed adequately diversified if: (1) no more than 55% of the value of the
total assets of the investment portfolio is represented by any one investment;
(2) no more than 70% of the value of the total assets of the investment
portfolio is represented by any two investments; (3) no more than 80% of the
value of the total assets of the investment portfolio is represented by any
three investments; and (4) no more than 90% of the value of the total assets of
the investment portfolio is represented by any four investments.

The Sub-Accounts, through each of the Funds, intends to comply with the
diversification requirements of the Code and the regulations. The Advisor has
agreed to manage the Funds so as to comply with such requirements.

EXCESSIVE CONTROL

The Treasury Department has from time to time suggested that guidelines
may be forthcoming under which a variable annuity contract will not be treated
as an annuity contract for tax purposes if the owner of the contract has
excessive control over the investments underlying the contract (i.e., the owner
is able to transfer values among Sub-Accounts with only limited restrictions).
If a variable contract is not treated as an annuity contract, the owner of such
contract would be considered the owner of the assets of a separate account, and
income and gains from that account would be included each year in the owner's
gross income. No such guidelines have been issued to date.

Page 7
<PAGE> 56

The issuance of such guidelines, or regulations or rulings dealing with
excessive control issues, might require the Company to impose limitations on an
owner's right to transfer all or part of the Contract Value among the
Sub-Accounts or to make other changes in the Contract as necessary to attempt to
prevent an owner from being considered the owner of any assets of a Sub-Account.
The Company therefore reserves the right to make such changes. It is not known
whether any such guidelines, regulations or rulings, if adopted, would have
retroactive effect.

REQUIRED DISTRIBUTIONS

Additionally, in order to qualify as an annuity contract under the
Code, a Non-Qualified Contract must meet certain requirements regarding
distributions in the event of the death of the owner. In general, if the owner
dies before the entire value of the Contract is distributed, the remaining value
of the Contract must be distributed according to provisions of the Code. Upon
the death of an owner prior to commencement of annuity payments, (1) the amounts
accumulated under a Contract must be distributed within five years, or (2) if
distributions to a designated beneficiary within the meaning of Section 72 of
the Code begin within one year of the owner's death, distributions are permitted
over a period not extending beyond the life (or life expectancy) of the
designated beneficiary.

The above rules are modified if the designated beneficiary is the
surviving spouse. The surviving spouse is not required to take distributions
from the Contract under the above rules as a beneficiary and may continue the
Contract and take distributions under the above rules as if the surviving spouse
were the original owner. If distributions have begun prior to the death of the
owner, such distributions must continue at least as rapidly as under the method
in effect at the date of the owner's death (unless the method in effect provides
that payments cease at the death of the owner).

For Qualified Contracts issued in connection with tax-qualified plans
and traditional individual retirement annuities, the plan documents and rules
will determine mandatory distribution rules. However, under the Code,
distributions from Contracts issued under Qualified Plans (other than
traditional and Roth individual retirement annuities and certain governmental or
church-sponsored Qualified Plans) for employees who are not 5% owners of the
sponsoring employer generally must commence no later than April 1 of the
calendar year following the calendar year in which the employee terminates
employment or reaches age 70-1/2, whichever is later. Such distributions must be
made over a period that does not exceed the life expectancy of the employee or
the joint and last survivor life expectancy of the employee and a designated
beneficiary. Distributions from Contracts issued under traditional individual
retirement annuities (but not Roth IRAs) or to 5% owners of the sponsoring
employer from Contracts issued under Qualified Plans (other than certain
governmental or church-sponsored Qualified Plans) must commence by April 1 of
the calendar year after the calendar year in which the individuals reach age
70-1/2 even if they have not terminated employment. A penalty tax of 50% may be
imposed on any amount by which the required minimum distribution in any year
exceeds the amount actually distributed.

If the Contract is a Qualified Contract issued in connection with a
traditional individual retirement annuity, a SIMPLE account, or a plan which
qualifies under Sections 403(b), 408 or 457 of the Code, the Company will send a
notice to the owner when the owner or Annuitant, as

Page 8
<PAGE> 57

applicable, reaches age 70-1/2. The notice will summarize the required minimum
distribution rules and advise the owner of the date that such distributions must
begin from the Qualified Contract or other traditional individual retirement
annuities of the owner. The owner has sole responsibility for requesting
distributions under the Qualified Contract or other traditional individual
retirement annuities (to the extent permitted by the Code) that will satisfy the
minimum distribution rules. In the case of a distribution from a Qualified
Contract issued under a plan which qualifies under Section 401 of the Code, the
Company will not send a notice when the owner or Annuitant, as applicable,
reaches age 70-1/2, and the owner (or the employer sponsoring the Qualified
Plan) has sole responsibility for requesting distributions under the Qualified
Contract that will satisfy the minimum distribution rules.

INDEPENDENT ACCOUNTANTS

The financial statements of Western-Southern Life Assurance Company
Separate Account 2 and the financial statements of Western-Southern Life
Assurance Company, included in this registration statement and described on
below, have been included herein in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
that firm as experts in accounting and auditing.

FINANCIAL STATEMENTS

The following financial statements for Western-Southern Life Assurance
Company Separate Account 2 at and for the fiscal periods indicated are attached
hereto:

1. Report of PricewaterhouseCoopers LLP.

2. Statement of Net Assets as of December 31, 1997.

3. Statement of Operations and Changes in Net Assets for the years ended
December 31, 1997 and 1996.

4. Notes to Financial Statements.

5. Supplementary Information-Selected Per Unit Data and Ratios for the
years ended December 31, 1997 and 1996.

6. Statement of Net Assets as of June 30, 1998 (unaudited).

7. Statement of Operations and Changes in Net Assets for the period from
January 1, 1998 to June 30,1998 (unaudited).

8. Notes to Financial Statements (unaudited).

9. Supplementary Information-Selected Per Unit Data and Ratios for the
period ended June 30, 1998 (unaudited) and for the year ended December 31, 1997.

Page 9
<PAGE> 58

The following financial statements for Western-Southern Life Assurance
Company at and for the fiscal periods indicated are attached hereto:

1. Report of PricewaterhouseCoopers LLP.

2. Consolidated Balance Sheets as of December 31, 1997 and 1996.

3. Consolidated Statements of Operations for the years ended December 31,
1997, 1996 and 1995.

4. Consolidated Statements of Changes in Shareholder's Equity for the
years ended December 31, 1997, 1996 and 1995.

5. Consolidated Statements of Cash Flows for the years ended December 31,
1997, 1996 and 1995.

6. Notes to Financial Statements.

The following financial statements for Select Advisors Portfolios at
and for the fiscal periods indicated are incorporated by reference from their
current reports to shareholders filed with the Securities and Exchange
Commission pursuant to Section 30(b) of the 1940 Act and Rule 30b2-1 thereunder.
A copy of each such report will be provided to each person receiving this
Statement of Additional Information.

1. Schedule of Investments December 31, 1997.

2. Statement of Assets and Liabilities December 31, 1997.

3. Statement of Operations for the year ended December 31, 1997.

4. Statement of Changes in Net Assets for the years ended December 31,
1997 and 1996.

5. Supplementary Data for the years ended December 31, 1997, 1996, 1995
and 1994.

6. Notes to Financial Statements.

7. Report of PricewaterhouseCoopers LLP

Page 10
<PAGE> 59

DISTRIBUTOR

Touchstone Securities, Inc. Sub-Accounts
311 Pike Street ------------
Cincinnati, Ohio 45202 o Emerging Growth
(800) 669-2796 (press 3) o International Equity
o Income Opportunity
INVESTMENT ADVISOR AND SPONSOR o Value Plus
o Growth & Income
Touchstone Advisors, Inc. o Balanced
311 Pike Street o Bond
Cincinnati, Ohio 45202 o Standby Income

TOUCHSTONE VARIABLE ANNUITY SERVICE CENTER

Touchstone Variable Annuity Service Center
P.O. Box 2850
Cincinnati, Ohio 45201-2850
(800) 669-2796 (press 2)

TRANSFER AGENT

State Street Bank and Trust Company
P.O. Box 8578
Boston, Massachusetts 02266-8518

ADMINISTRATOR, CUSTODIAN
AND FUND ACCOUNTING AGENT

Investors Bank & Trust Company STATEMENT OF
200 Clarendon Street ADDITIONAL INFORMATION
Boston, Massachusetts 02116 January 4, 1999

INDEPENDENT ACCOUNTANTS

PricewaterhouseCoopers LLP
312 Walnut Street
Cincinnati, Ohio 45202

LEGAL COUNSEL

Frost & Jacobs LLP
2500 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202

Page 11