AETNA INSURANCE CO OF AMERICA, S-1, 1995-10-23

AETNA INSURANCE CO OF AMERICA
S-1, 1995-10-23

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As filed with the Securities and Registration No. 33-___________
Exchange Commission on October 23, 1995

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Aetna Insurance Company of America
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

Connecticut
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)

63
(PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER)

06-1286272
(I.R.S. EMPLOYER IDENTIFICATION NO.)

151 Farmington Avenue, Hartford, Connecticut 06156, (860) 273-7834
(Address, including Zip Code, and Telephone Number, including
Area Code, of Registrant's Principal Executive Offices)

Susan E. Bryant, Counsel
Aetna Insurance Company of America
151 Farmington Avenue, RE4C, Hartford, Connecticut 06156
(860) 273-7834
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)

Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effectiveness of this Registration Statement.

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box. /XX/

If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /

If the delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /

<PAGE>
CALCULATION OF REGISTRATION FEE

Proposed Proposed
Title of each Maximum maximum
class of Amount offering aggregate Amount of
securities to be price per offering Registration
to be Registered Registered unit price Fee
----------------------------------------------------------------------------
Interests * * $100,000,000* $34,482.76
in the AICA
Guaranteed
Account - a
Credited Interest
Option Under
Variable Annuity
Contracts

* The maximum aggregate offering price is estimated solely for the purpose of
determining the registration fee. The amount being registered and the
proposed maximum offering price per unit are not applicable since these
securities are not issued in predetermined amounts or units.

<PAGE>
AICA GUARANTEED ACCOUNT
A CREDITED INTEREST OPTION AVAILABLE UNDER
VARIABLE ANNUITY CONTRACTS
ISSUED BY AETNA INSURANCE COMPANY OF AMERICA

CROSS REFERENCE SHEET
PURSUANT TO REGULATION S-K
ITEM 501(B)

FORM S-1
ITEM NO. INFORMATION REQUIRED IN PROSPECTUS LOCATION IN PROSPECTUS
- --------- ----------------------------------------- -----------------------
1 Forepart of the Registration Statement
and Outside Front Cover Page of
Prospectus . . . . . . . . . . . . . . Outside Front Cover

2 Inside Front and Outside Back Cover Table of Contents
Pages of Prospectus . . . . . . . . . . (inside front cover)

3 Summary Information, Risk Factors . . . . . Summary

Ratio of Earnings to Fixed Charges . . . . Not Applicable

4 Use of Proceeds . . . . . . . . . . . . . Investments

5 Determination of Offering Price. . . . . . Not Applicable

6 Dilution . . . . . . . . . . . . . . . . . Not Applicable

7 Selling Security Holders . . . . . . . . . Not Applicable

8 Plan of Distribution . . . . . . . . . . . Description of the
AICA Guaranteed
Account Option

9 Description of Securities to be Description of the
Registered . . . . . . . . . . . . . . . AICA Guaranteed
Account Option

10 Interests of Named Experts and Counsel . . Not Applicable

<PAGE>

FORM S-1
ITEM NO. INFORMATION REQUIRED IN PROSPECTUS LOCATION IN PROSPECTUS
- --------- ----------------------------------------- -----------------------
11 Information with Respect to the
Registrant . . . . . . . . .. . . The Company; Directors and
Executive Officers;
Executive Compensation;
Legal Proceedings;
Financial Statements

12 Disclosure of Commission Position
on Indemnification for Securities
Act Liabilities . . . . . . . . . . . Indemnification

<PAGE>
AETNA INSURANCE COMPANY OF AMERICA
151 Farmington Avenue, Hartford, Connecticut 06156 Telephone: 1-800-531-4547
AICA GUARANTEED ACCOUNT
CREDITED INTEREST OPTION
Prospectus Dated: , 1995

This Prospectus describes the AICA Guaranteed Account ("Guaranteed Account"),
which is a credited interest option available to fund certain variable annuity
contracts ("Contracts") issued by Aetna Insurance Company of America
("Company"). This Prospectus and the prospectus describing the Contracts
("Contract Prospectus") should both be read thoroughly before investing.

The Contract Prospectus describes the terms and conditions related to an
investment in the Contract, including fees and expenses that will be deducted
from the funding options (see "Contract Charges"). This Prospectus describes the
pertinent information required to evaluate the terms of the Guaranteed Account
(see "Description of the Guaranteed Account").

Under the terms of the Guaranteed Account, the Company sets various rates of
interest ("Guaranteed Rate") for varying lengths of time ("Guaranteed Terms")
and designates the period of time during which investments can be made ("Deposit
Period") at those rates and terms. A Certificate Holder electing the Guaranteed
Account can designate amounts to be invested in any Guaranteed Term during the
Deposit Period and will receive the Guaranteed Rate for that term. Amounts
invested in the Guaranteed Account can come from the Certificate Holder's Net
Purchase Payments for the Contract or by transferring amounts accumulated by the
Certificate Holder under other funding options under the Contract. There is no
minimum amount required if investments come from Net Purchase Payments; however,
the Certificate Holder must meet Contract minimums (see the Contract
Prospectus). There is a $500 minimum for transfers from other funding options.
See "Contributions to the Guaranteed Account." The interest rate declared for a
Guaranteed Term is an annual effective yield; that is, it reflects a full year's
interest. Interest is credited daily at a rate that will provide the guaranteed
annual effective yield over the period of one year assuming reinvestment of all
interest (see "Guaranteed Rates"). THE COMPANY CANNOT PREDICT FUTURE LEVELS OF
GUARANTEED INTEREST RATES ABOVE THE CONTRACTUALLY GUARANTEED RATE NOR GUARANTEE
WHAT SUCH RATES WILL BE UNTIL THEY ARE DECLARED FOR EACH GUARANTEED TERM. THE
GUARANTEED RATE WILL BE SET FORTH IN THE CONTRACT PROSPECTUS.

WITHDRAWALS OR TRANSFERS FROM A GUARANTEED TERM PRIOR TO THE END OF THAT
GUARANTEED TERM MAY BE SUBJECT TO A MARKET VALUE ADJUSTMENT. SURRENDER OF ALL OR
PART OF THE CONTRACT MAY ALSO BE SUBJECT TO A MARKET VALUE ADJUSTMENT AND A
DEFERRED SALES CHARGE (SEE "MARKET VALUE ADJUSTMENT" AND "CONTRACT CHARGES").
UNDER CERTAIN CONDITIONS, THESE ADJUSTMENTS AND CHARGES COULD RESULT IN THE
CERTIFICATE HOLDER RECEIVING AN AMOUNT LESS THAN THE AMOUNT PAID INTO THE
GUARANTEED ACCOUNT.

Under certain emergency conditions, the Company may defer payment of any amounts
requested to be withdrawn from the Guaranteed Account (see "Withdrawals").

The Company intends generally to invest funds received for the Guaranteed
Account primarily in fixed income securities.

All of the general assets of the Company, including amounts deposited to the
Guaranteed Account, are available to meet the guarantees under the Guaranteed
Account. These assets are chargeable with liabilities arising out of other
business of the Company.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. NO PERSON IS AUTHORIZED BY THE COMPANY TO GIVE INFORMATION OR
TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, IN
CONNECTION WITH THE OFFERS CONTAINED IN THIS PROSPECTUS. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT
LAWFULLY BE MADE.
<PAGE>
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
<S> <C>
GLOSSARY............................................................................................ 3
SUMMARY............................................................................................. 4
DESCRIPTION OF THE GUARANTEED ACCOUNT
General....................................................................................... 5
Contributions to the Guaranteed Account....................................................... 6
Purchase Payment.............................................................................. 6
Deposit Period................................................................................ 6
Guaranteed Term............................................................................... 6
Guaranteed Rates.............................................................................. 6
Establishment of Guaranteed Rates............................................................. 7
Maturity of a Guaranteed Term................................................................. 7
TRANSFERS........................................................................................... 8
WITHDRAWALS......................................................................................... 8
MARKET VALUE ADJUSTMENT............................................................................. 8
Deposit Period Yield.......................................................................... 9
Current Yield................................................................................. 10
MVA Formula................................................................................... 10
MISCELLANEOUS....................................................................................... 10
Contract Charges.............................................................................. 10
Annuity Period................................................................................ 10
Reinvestment.................................................................................. 10
INVESTMENTS......................................................................................... 11
TAX CONSIDERATIONS.................................................................................. 12
Taxation of the Company....................................................................... 12
Taxation of the Guaranteed Account............................................................ 12
THE COMPANY
History and Business.......................................................................... 12
Employees..................................................................................... 12
Properties.................................................................................... 12
State Regulation.............................................................................. 12
DIRECTORS AND EXECUTIVE OFFICERS.................................................................... 14
EXECUTIVE COMPENSATION.............................................................................. 14
SECURITY OWNERSHIP OF MANAGEMENT.................................................................... 14
INDEMNIFICATION..................................................................................... 15
LEGAL PROCEEDINGS................................................................................... 15
EXPERTS............................................................................................. 15
LEGAL MATTERS....................................................................................... 15
APPENDIX I.......................................................................................... 16
APPENDIX II......................................................................................... 18
SELECTED FINANCIAL DATA............................................................................. 19
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS............... 19
FINANCIAL STATEMENTS................................................................................ F-1
</TABLE>

2
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GLOSSARY

In this Prospectus, the following terms have the meanings shown:

ACCOUNT: A record established for each Certificate Holder in a Group Contract to
identify Purchase Payments and amounts accumulated that are attributable to the
Certificate Holder under the Contract during the Accumulation Period.

AGGREGATE MARKET VALUE ADJUSTMENT AMOUNT: The sum of all Market Value Adjusted
amounts calculated due to a withdrawal of funds (for surrender or transfer) from
the Guaranteed Account prior to the Maturity Date(s). This total may be a
positive or negative figure.

ANNUITY: A series of payments made for life, a definite period or a combination
of the two.

ANNUITY PERIOD: The period of time during which annuity payments are made.

CERTIFICATE: The document issued to a Certificate Holder to evidence a
Certificate Holder's Account established under a group Contract.

CERTIFICATE HOLDER: A person who has established an Account under a group
Contract or the individual Contract Holder of an individual Contract.

CONTRACT: A group or individual variable annuity contract issued by the Company
which offers the Guaranteed Account as a funding option.

CONTRACT HOLDER: A person who purchases a Contract.

CONTRACT PROSPECTUS: The prospectus for the Separate Account and the Contracts.

DEPOSIT PERIOD: The period of time during which Net Purchase Payments, transfers
and reinvestments are accepted for accumulation under the Guaranteed Account for
one or more Guaranteed Terms.

GUARANTEED ACCOUNT: The AICA Guaranteed Account described in this Prospectus.

GUARANTEED RATE: The interest rate(s) applicable to a specific Guaranteed Term.

GUARANTEED TERM: The period of time specified by the Company for which
Guaranteed Rates are guaranteed on amounts invested during a specific Deposit
Period.

HOME OFFICE: The Company's principal executive office located at 151 Farmington
Avenue, Hartford, Connecticut 06156.

MARKET VALUE ADJUSTMENT OR MVA: An adjustment to the amount withdrawn or
transferred from the Guaranteed Account before the Maturity Date. The adjustment
reflects the change in the value of the investment due to changes in interest
rates since the date of deposit and is computed using the formula given in the
Contract and Certificate. The adjustment is expressed as a percentage of each
dollar being withdrawn or transferred.

MATURED TERM VALUE: The value of each Guaranteed Term on its Maturity Date.

MATURITY DATE: The last day of a Guaranteed Term.

MATURITY VALUE TRANSFER PROVISION: A provision allowing a Certificate Holder to
transfer an amount to a new Guaranteed Term or another funding option, without a
Market Value Adjustment, one time only (see "Maturity of a Guaranteed Term").

NET PURCHASE PAYMENT: The Purchase Payment less premium taxes or commission
payments, if applicable.

PURCHASE PAYMENT: The gross payment made to an Account or to an individual
Contract.

SEPARATE ACCOUNT: A separate account that buys and holds shares of the Fund(s).
Income, gains or losses, realized or unrealized, are credited or charged to the
Separate Account without regard to the Company's other income, gains or losses.
The Company owns the assets held in the Separate Account and does not serve as a
trustee with regards to such amounts. The Separate Account generally is not
guaranteed and is held at market value. The assets of the Separate Account, to
the extent of reserves and other contract liabilities of the Separate Account,
shall not be charged with other Company liabilities.

VARIABLE ANNUITY CONTRACT: An Annuity Contract providing for the accumulation of
values, and for annuity payments, which provide varying investment results.

3
<PAGE>
SUMMARY

The Guaranteed Account is a guaranteed interest option available as a funding
option under certain variable annuity contracts issued by the Company (see
"Description of the Guaranteed Account--General"). Amounts invested in the
Guaranteed Account are credited with interest rates guaranteed by the Company
for stated periods of time.

During a Deposit Period, Certificate Holders may direct some or all of their Net
Purchase Payment(s) to the Guaranteed Account. There is no minimum amount if the
investment comes from a Net Purchase Payment. Transfers of accumulated amounts
from other funding options to the Guaranteed Account are also allowed. If a
transfer is made to the Guaranteed Account from other Contract funding options,
the transferred value may not be less than $500 (see "Contributions to the
Guaranteed Account").

The Company will declare the Guaranteed Rate(s) for all available Guaranteed
Terms at the start of the Deposit Period for those Guaranteed Terms. These
Guaranteed Rate(s) are guaranteed for that Deposit Period and the length of the
Guaranteed Term.

Interest is credited daily at a rate that will provide the guaranteed annual
effective yield over the period of one year. Guaranteed Rates will never be less
than the annual effective rate stated in the Contract and will not be changed
for any Guaranteed Term after the start of the Deposit Period (see "Guaranteed
Rates").

The Company will send notification of a Guaranteed Term's maturity, along with
the current month's Guaranteed Rates and Guaranteed Term, to Certificate Holders
with amounts allocated to the Guaranteed Account. This notification is sent at
least 18 days prior to the Maturity Date. Certificate Holders may obtain
information concerning available Deposit Periods, Guaranteed Rates, and
Guaranteed Terms through the use of a toll-free telephone number within five
business days before the Maturity Date (1-800-531-4547) (see "Description of the
Guaranteed Account--General" and "Maturity of a Guaranteed Term").

Before the Maturity Date, a Certificate Holder may instruct the Company to (a)
reinvest the Matured Term Value in the Guaranteed Account for a new Guaranteed
Term available under the current Deposit Period; (b) transfer the Matured Term
Value to one or more of the variable funding options available under the
Contract; or (c) withdraw the Matured Term Value. In none of those circumstances
would a Market Value Adjustment be applicable to the Matured Term Value;
however, a deferred sales charge may be assessed on amounts withdrawn (see
"Contract Charges" and the Contract Prospectus).

If the Company does not receive direction from the Certificate Holder at its
Home Office by the Maturity Date, the Matured Term Value will be reinvested
automatically in the Guaranteed Account for a new Guaranteed Term under the
current Deposit Period. This new Guaranteed Term will have the same length to
maturity as the Guaranteed Term that is maturing. If such a Guaranteed Term is
not available, the transfer will be to the next shortest available Guaranteed
Term (see "Maturity of a Guaranteed Term"). A confirmation will be mailed to the
Certificate Holder advising of the new Guaranteed Term and the applicable
Guaranteed Rate(s) for which the Matured Term Value has been reinvested. This
confirmation will be mailed within two business days following the Maturity
Date.

The Maturity Value Transfer Provision is available to those Certificate Holders
who allow the Company to automatically reinvest the total Matured Term Value
into the current Deposit Period. This provision allows Certificate Holders to
transfer to other funding options or withdraw, without a Market Value
Adjustment, all or a portion of the Matured Term Value that was transferred to a
new Guaranteed Term. A deferred sales charge may be applied to any amounts
withdrawn (see the Contract Prospectus).

If all or any portion of the Matured Term Value is transferred or surrendered,
the interest credited from the Maturity Date to the date of the transaction will
be at the new Guaranteed Rate. The Maturity Value Transfer Provision is only
available until the last business day of the month following the Maturity Date
of the prior Guaranteed Term (see "Maturity of a Guaranteed Term").

4
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Full or partial surrenders and transfers to other Contract funding options are
permitted from the Guaranteed Account; however, amounts invested for a
Guaranteed Term during a Deposit Period may not be transferred during that
Deposit Period or for 90 days after the close of that Deposit Period.This
provision does not apply to (1) amounts transferred on the Maturity Date or
under the Maturity Value Transfer Provision (see "Maturity of a Guaranteed
Term"); (2) amounts transferred from the Guaranteed Account before the Maturity
Date due to the election of an Annuity option (see "Annuity Period"); (3)
amounts transferred from the one-year Guaranteed Term in connection with the
Dollar Cost Averaging program described in the Contract Prospectus; and (4)
amounts distributed under the Estate Conservation and Systematic Withdrawal
distribution options described in the Contract Prospectus.

Except for the transactions described in items (1), (3) and (4) in the preceding
paragraph, amounts withdrawn or transferred from the Guaranteed Account prior to
the Maturity Date are subject to a Market Value Adjustment. The Market Value
Adjustment reflects the change in the value of the investment due to changes in
interest rates since the date of deposit. When interest rates increase after the
date of deposit, the value of the investment decreases, and the Market Value
Adjustment amount is negative. Conversely, when interest rates decrease after
the date of deposit, the value of the investment increases, and the Market Value
Adjustment amount is positive. Hence, the Market Value Adjustment will affect
the amount withdrawn from the Guaranteed Account to satisfy the request for
withdrawal or transfer (see "Market Value Adjustment").

Subject to state regulatory approval, when a guaranteed death benefit is payable
under the terms of the Contract, only a positive Aggregate Market Value
Adjustment amount, if any, is applied to amounts withdrawn from the Guaranteed
Account if withdrawn within the first six months after the date of death. This
provision does not apply at the death of a spousal beneficiary or joint
Certificate Holder who continued the Account in his or her own name after the
first death. If amounts are withdrawn after the six-month period, a positive or
negative Aggregate Market Value Adjustment, as applicable, will be applied. If
amounts are withdrawn from the Guaranteed Account due to annuitization under one
of the lifetime Annuity options described in the Contract Prospectus, only the
positive Aggregate Market Value Adjustment, if any, is applied. (See "Market
Value Adjustment" and "Annuity Period" in this Prospectus.)

Certain charges such as the mortality and expense risk charges and
administrative expense charge are assessed under the Contracts to compensate the
Company for costs associated with administering the Contract. These charges are
not deducted from the Guaranteed Account (see "Contract Charges"). Other charges
such as deferred sales charges, maintenance fees and transfer fees may be
deducted from amounts transferred from the Guaranteed Account. For a description
of all Contract fees and charges see "Contract Charges" and the Contract
Prospectus.

The interest rate(s) credited during any Guaranteed Term does not necessarily
relate to investment performance. As in the case of all of the Company's general
account assets, deposits received under the Guaranteed Account option will
generally be invested in federal, state and municipal obligations; corporate
bonds; other fixed income investments; and cash or cash equivalents. All of the
general assets of the Company are available to meet the guarantees under the
General Account (see "Investments").

DESCRIPTION OF THE GUARANTEED ACCOUNT

GENERAL

This Prospectus describes the material provisions of the AICA Guaranteed Account
("Guaranteed Account"). The Guaranteed Account is a guaranteed interest option
available to fund certain variable annuity contracts issued by Aetna Insurance
Company of America ("Company"). This Prospectus and the prospectus describing
the Separate Account and the variable annuity contracts ("Contract Prospectus")
should both be read thoroughly before investing. All of these prospectuses
should be retained for future reference.

5
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Guaranteed Term during the Deposit Period and will receive the Guaranteed Rate
for amounts kept in that Guaranteed Account for that term. Amounts invested in
the Guaranteed Account can come from the Certificate Holder's Net Purchase
Payments for the Contract or by transferring amounts accumulated by the
Certificate Holder under other funding options under the Contract. There is no
minimum amount required if investments come from Net Purchase Payments; however,
the Certificate Holder must meet Contract minimums (see the Contract
Prospectus). There is a $500 minimum for transfers from other funding options
(see "Contributions to the Guaranteed Account").

The Contract permits transfers and withdrawals, prior to the Maturity Date,
subject to certain conditions. Transfer and withdrawal amounts from the
Guaranteed Account may be subject to a Market Value Adjustment and/or deferred
sales charges. See "Transfers" and "Withdrawals." Please also refer to the
Contract Prospectus for more information.

The Company maintains a toll-free telephone number (1-800-531-4547) that allows
Certificate Holders to obtain information concerning available Deposit Periods,
Guaranteed Rates, and Guaranteed Terms. In addition, the Company will send
notification of the upcoming Deposit Period dates and information on the current
Guaranteed Rates, Guaranteed Terms and projected Matured Term Values to
Certificate Holders who have funds in a maturing Guaranteed Term. This
notification will be sent at least 18 calendar days prior to the Maturity Date.

CONTRIBUTIONS TO THE GUARANTEED ACCOUNT

Amounts may be invested in the Guaranteed Account at the Guaranteed Terms and
Guaranteed Rates available during the then current Deposit Period by allocating
all or a portion of the Certificate Holder's Net Purchase Payment(s) or by
transferring accumulated value(s) from other Contract funding options or other
Guaranteed Terms. Amounts invested in the Guaranteed Account during a Deposit
Period may not be transferred during that Deposit Period or for 90 days after
the close of that Deposit Period, except under the Maturity Value Transfer
Provision, Dollar Cost Averaging or the selection of an Estate Conservation or
Systematic Withdrawal distribution option.

PURCHASE PAYMENT

A Certificate Holder may elect to invest some or all of the Net Purchase
Payment(s) for any available Guaranteed Terms at the applicable Guaranteed Rates
during the then current Deposit Period. There is no minimum amount required for
the Guaranteed Account. Please refer to the Contract Prospectus for minimum
Purchase Payments for the Contract.

DEPOSIT PERIOD

The Deposit Period is a period of time during which one or more Net Purchase
Payments or amounts transferred from other Contract funding options or other
Guaranteed Terms may be invested at the Guaranteed Rates for the Guaranteed
Terms then available. A Deposit Period may be a week, a month, a calendar
quarter, or any other period of time specified by the Company. A Deposit Period
may be extended by the Company.

GUARANTEED TERM

The Guaranteed Term is the period of time specified by the Company during which
one or a series of Guaranteed Rates are credited.

Guaranteed Terms are offered at the Company's discretion for various lengths of
time ranging up to and including ten years.

GUARANTEED RATES

Guaranteed Rates are the interest rates that are guaranteed by the Company to be
credited on amounts invested during a Deposit Period for a specific Guaranteed
Term. Guaranteed Rates are annual effective yields, reflecting a full year's
interest. The interest is credited daily at a rate that will produce the
guaranteed annual effective yield over the period of one year.

6
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In no event will the Company guarantee or credit a Guaranteed Rate that is less
than an annual effective rate specified in the Contract. In addition, the
Guaranteed Account does not allow for the crediting of interest above the
Guaranteed Rates which are announced by the Company at the start of a Deposit
Period.

Guaranteed Rates are credited according to the length of the Guaranteed Term.
For Guaranteed Terms of one year or less, a Guaranteed Rate is credited from the
date of deposit to the last day of the Guaranteed Term. For Guaranteed Terms of
greater than one year, several different Guaranteed Rates may be applicable. The
initial Guaranteed Rate is credited from the date of deposit to the end of a
specified period within the Guaranteed Term. The remainder of the Guaranteed
Term may also have several different Guaranteed Rates for subsequent specific
periods of time. For example, a 5-year Guaranteed Term may guarantee 7% for the
first year, 6.75% for the next two years, and 6.5% for the remaining two years.
At the Company's option, there may be one Guaranteed Rate for the entire
Guaranteed Term.

ESTABLISHMENT OF GUARANTEED RATES

The Company's determination of Guaranteed Rates is influenced by, but does not
necessarily correspond to, interest rates available on fixed-income investments
in which the Company may invest using funds deposited into the Guaranteed
Account (see "Investments"). In addition, the Company will consider other items
in determining Guaranteed Rates including regulatory and tax requirements, sales
commissions and administrative expenses borne by the Company, general economic
trends, and competitive factors.

THE COMPANY MAKES THE FINAL DETERMINATION REGARDING GUARANTEED RATES. THE
COMPANY CANNOT PREDICT THE LEVEL OF FUTURE GUARANTEED RATES.

MATURITY OF A GUARANTEED TERM

At least 18 calendar days before the Maturity Date, the Company will send
notification to the Certificate Holder of the upcoming Deposit Period, the
projected Matured Term Value for the amount maturing in the Guaranteed Account
and the Guaranteed Rate and Guaranteed Term for the current Deposit Period.
Certificate Holders may transfer amounts from any maturing Guaranteed Term to
new Guaranteed Terms. The amount in any maturing Guaranteed Term may also be
transferred into any other allowable option(s) available under the Contract.
There is no Market Value Adjustment applied to funds transferred or surrendered
from a Guaranteed Term on the Maturity Date.

If the Company does not receive direction from the Certificate Holder at its
Home Office by the Maturity Date, the Company will automatically reinvest the
Matured Term Value in the Guaranteed Account during the new Deposit Period. The
Matured Term Value will be invested for a Guaranteed Term having the same length
to maturity as the Guaranteed Term that is maturing. If such a term is not
available, the transfer will be to the next shortest available Guaranteed Term.
The new Guaranteed Term may have a different length of time to maturity than the
maturing Guaranteed Term. For example, if a 3-year Guaranteed Term matures and
no direction is received, and a 3-year Guaranteed Term is not available in the
current Deposit Period, the Matured Term Value will be reinvested in a new
Guaranteed Term of less than 3 years, which is the next shortest Guaranteed Term
then available.

Once the Matured Term Value has been reinvested, the Certificate Holder will
receive a statement confirming the transfer, along with information on the new
Guaranteed Rate(s) and Guaranteed Term. For those Certificate Holders who allow
the Company to transfer automatically the total Matured Term Value into the open
Deposit Period, the Maturity Value Transfer Provision is available. This
provision allows Certificate Holders to transfer or withdraw, without a Market
Value Adjustment, the Matured Term Value that was transferred to a new
Guaranteed Term. A deferred sales charge may be assessed on amounts withdrawn
from the Contract. Please see "Contract Charges" and the Contract Prospectus for
more information. If all of the Matured Term Value is transferred or withdrawn
under the Maturity Value Transfer Provision, any interest accrued under the new
Guaranteed Term will be credited through the date of transfer or withdrawal. The
right to make a transfer or withdrawal under the Maturity Value Transfer
Provision is available until the last business day (when the New York Stock
Exchange is open) of the month following the Maturity Date. THE MATURITY VALUE
TRANSFER PROVISION ONLY APPLIES TO THE FIRST REQUEST RECEIVED FROM THE
CERTIFICATE HOLDER, WITH RESPECT TO A PARTICULAR MATURED TERM VALUE.

7
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TRANSFERS

The Contract provides for the transfer of all or any portion of accumulated
values under the Contract to the Guaranteed Account and other funding options.
Please refer to the Contract Prospectus for more information. There is a $500
minimum for transfers from other funding options to the Guaranteed Account.

Amounts applied to a Guaranteed Term during a Deposit Period may not be
transferred to any other funding option or to another Guaranteed Term during
that Deposit Period or for 90 days after the close of that Deposit Period. (The
90 day restriction does not apply to Dollar Cost Averaging from the one-year
Guaranteed Term or the selection of an Estate Conservation or Systematic
Withdrawal ("ECO and SWO") distribution option (both of which are described in
the Contract Prospectus). See "Withdrawals" below for a description of how
transferred amounts are allocated to the Guaranteed Terms.

WITHDRAWALS

The Contract allows for full or partial withdrawals. To make a full or partial
withdrawal, a withdrawal request form, provided by the Company, must be properly
completed and submitted to the Company's Home Office. Please see the Contract
Prospectus for more information.

Under certain emergency conditions, the Company may defer payment of a
Guaranteed Account withdrawal request for a period of up to six months. Please
refer to the Contract Prospectus for further details.

A Market Value Adjustment is applied to amounts withdrawn from a Guaranteed
Account before the Maturity Date (except under the Maturity Value Transfer
Provision, ECO and SWO elections and amounts transferred from the one-year
Guaranteed Term in connection with the Dollar Cost Averaging Program). The
amount withdrawn may also be subject to a deferred sales charge. See "Contract
Charges." Please also refer to the Contract Prospectus for more information
regarding deferred sales charges and surrender fees.

When a request for a transfer or partial withdrawal of a specific dollar amount
is made, the Market Value Adjustment will be included in the determination of
any amounts to be withdrawn from the Guaranteed Account to fulfill the request.
Therefore, the amount actually withdrawn from the Guaranteed Account may be more
or less than the requested dollar amount (see "Appendix I" and "Market Value
Adjustment").

The Guaranteed Account portion of a partial withdrawal request is determined in
the following manner:

1. Amounts invested for Guaranteed Terms having the same lengths are grouped
together;

2. Amounts are withdrawn pro rata from the Guaranteed Term groups; and

3. From each Guaranteed Term group, amounts are withdrawn starting with the
oldest Deposit Period.

For example, for each Net Purchase Payment made, all Guaranteed Terms initially
established for one year are considered a group, all Guaranteed Terms initially
established for two years are considered a group, etc. Funds are then withdrawn
starting from the Guaranteed Term that commenced the earliest in each Guaranteed
Term group.

MARKET VALUE ADJUSTMENT

Upon withdrawal or transfer of funds from or within the Guaranteed Account, the
Company may need to liquidate certain assets or use existing cash flow which
would otherwise be available to invest at current interest rates. The assets may
be sold at a profit or a loss depending upon market conditions. This profit/loss
could affect the determination of Guaranteed Rates (see "Establishment of
Guaranteed Rates"). To lessen the impact, all withdrawals and transfers made
before the Maturity Date of a Guaranteed Term, including transfers made in order
to elect a nonlifetime Annuity option, but excluding transactions under the
Maturity Value Transfer Provision, transfers made from the one-year

8
<PAGE>
Guaranteed Term in connection with the Dollar Cost Averaging Program and amounts
withdrawn under ECO and SWO distribution options (both of which are described in
the Contract Prospectus), will be subject to a Market Value Adjustment (MVA).

The MVA reflects the changes in interest rates since the Deposit Period. When
interest rates increase after the Deposit Period, the value of the investment
decreases and the MVA amount is negative. Conversely, when interest rates
decrease after the Deposit Period, the value of the investment increases and the
Market Value Adjustment amount is positive.

The MVA involves a deposit period yield and a current yield. An adjustment is
made in the formula of the MVA to reflect the period of time remaining in the
Guaranteed Term from the Wednesday of the week of withdrawal.

MVA amounts can be positive or negative and therefore may increase or decrease
the amount withdrawn from a Guaranteed Term to satisfy the withdrawal or
transfer request. The MVA Amount depends on the relationship of the deposit
period yield of U.S. Treasury Notes that mature in the last quarter of the
Guaranteed Term, to the current yield of such U.S. Treasury Notes at the time of
withdrawal. In general, if the current yield is the lesser of the two, the MVA
will decrease the amount withdrawn from the Guaranteed Account to satisfy the
withdrawal or transfer request; if the current yield is the higher of the two,
the MVA will increase the amount withdrawn from the Guaranteed Account to
satisfy the withdrawal or transfer request. As a result of the Market Value
Adjustment imposed on the Guaranteed Account, the amount withdrawn or
transferred from the Guaranteed Account prior to the Maturity Date may be less
than the amount paid into the Guaranteed Account.

To determine the deposit period yield and the current yield, certain information
must be obtained about the prices of outstanding U.S. Treasury issues. This
information may be found each business day in publications such as THE WALL
STREET JOURNAL. This newspaper publishes the yield-to-maturity percentages for
all Treasury Notes as of the preceding business day. These percentages are used
in determining the deposit period yield and the current yield for the MVA
calculation.

DEPOSIT PERIOD YIELD

Determining the deposit period yield in the MVA calculation involves
consideration of interest rates prevailing during the Deposit Period for the
Guaranteed Term from which the withdrawal will be made. First, identify the
Treasury Notes that mature in the last three months of the Guaranteed Term.
Then, list the yield-to-maturity percentages of these Treasury Notes for the
last business day of each week in the Deposit Period. Average these percentages
to determine the deposit period yield.

For example, if the Guaranteed Term matures in May 1998, use the Treasury Notes
that mature in March, April, and May 1998. Then, if the Deposit Period from
which the withdrawal will be made is January 1995, the yield-to-maturity
percentages of the above Treasury Notes on May 5, 1995, May 12, 1995, May 19,
1995, and May 26, 1995 are averaged. This averaged figure (shown as a
percentage) is the deposit period yield.

9
<PAGE>
CURRENT YIELD

To determine the current yield, use the same Treasury Notes identified for the
deposit period yield: Treasury Notes that mature in the last three months of the
Guaranteed Term. However, the yield-to-maturity percentages used are those for
the last business day of the week preceding the withdrawal. Average these
percentages to determine the current yield.

For example, assume the withdrawal will be processed on May 18, 1995. List the
yield-to-maturity percentage figures as of May 12, 1995 for the same Treasury
Notes that determined the deposit period yield. Average these yields to
determine the current yield.

MVA FORMULA

The mathematical formula used to determine the MVA is:

Where:

i is the deposit period yield;
j is the current yield;
and x is the number of days remaining (computed from Wednesday of the week of
withdrawal) in the Guaranteed Term.

For examples of how to calculate MVAs, please see Appendix I.

MISCELLANEOUS

CONTRACT CHARGES

In addition to the MVA, a deferred sales charge may be deducted upon the full or
partial surrender of a Contract. If amounts used for the surrender are withdrawn
from a Guaranteed Account, the sales charge may be deducted from those amounts
withdrawn. Other surrender charges may also be applied, if applicable. Please
see the Contract Prospectus.

Mortality and expense risk charges and the administrative expense charges that
are deducted from the Separate Account are not deducted from the Guaranteed
Account. These charges only apply to the variable funding options available
under the Contract. There may be other Contract charges such as maintenance
charges or transfer fees deducted from the Guaranteed Account. See the Contract
Prospectus.

ANNUITY PERIOD

The Guaranteed Account cannot be used as an option during the Annuity Period. At
annuitization, amounts in the Guaranteed Account must be transferred to one or
more of the funding options which allow for Annuity payments. The Aggregate
Market Value Adjustment Amount (positive or negative) is applied to any amount
transferred from the Guaranteed Account before the Maturity Date to one of the
nonlifetime Annuity options available under the Contract. Subject to state
regulatory approval, only a positive Aggregate Market Value Adjustment, if any,
is applied due to annuitization under a lifetime Annuity option. Please refer to
the Contract Prospectus for a discussion of the Annuity Period.

REINVESTMENT

The Certificate Holder may elect to reinvest all or a portion of the proceeds
received from a full withdrawal within 30 days after such withdrawal. Any
amounts reinvested in the Guaranteed Account will be invested for the available
Guaranteed Terms of the current Deposit Period in the same proportion as they
were invested at the time of withdrawal. If a Guaranteed Term having the same
length of time to maturity is not available in the current Deposit Period, the
amounts

10
<PAGE>
will be reinvested for a Guaranteed Term having the next shortest length of time
to maturity. Any negative MVA amount applied to a withdrawal is not included in
the reinvestment. Please refer to the Contract Prospectus for further details on
reinvestment as it relates to the Contract.

INVESTMENTS

Amounts applied to the Guaranteed Account will be deposited to, and accounted
for in, a nonunitized separate account established by the Company under
Connecticut law. A nonunitized separate account is a separate account in which
the Certificate Holder does not participate in the performance of the assets
through unit values.

Certificate Holders allocating funds to the Guaranteed Account do not receive a
unit ownership of assets accounted for in this separate account. The assets
accrue solely to the benefit of the Company. Certificate Holders do not
participate in the investment gain or loss from assets accounted for in the
separate account. Such gain or loss is borne entirely by the Company.
Certificate Holders will not participate in any manner in the investment
performance of the nonunitized separate account. All benefits available to
Certificate Holders are Contract guarantees made by the Company and are
accounted for in the separate account.

The Company intends to invest in assets which, in the aggregate, have
characteristics, especially cash flow patterns, reasonably related to the
characteristics of the liabilities. Various investment techniques will be used
to achieve the objective of close aggregate matching of assets and liabilities.

The Company will primarily invest in investment-grade fixed income securities
including:

- Securities issued by the United States Government or its
agencies or instrumentalities, which issues may or may not be
guaranteed by the United States Government.

- Debt securities that are rated, at the time of purchase, within
the four highest grades assigned by Moody's Investors Services,
Inc. (Aaa, Aa, A or Baa) or Standard & Poor's Corporation (AAA,
AA, A or BBB) or any other nationally recognized rating
service.

- Other debt instruments, including, but not limited to, issues
of or guaranteed by banks or bank holding companies and of
corporations, which obligations, although not rated by Moody's,
Standard & Poor's, or other nationally recognized rating firms,
are deemed by the Company's management to have an investment
quality comparable to securities which may be purchased as
stated above.

- Commercial paper, cash or cash equivalents, and other
short-term investments having a maturity of less than one year
which are considered by the Company's management to have
investment quality comparable to securities which may be
purchased as stated above.

In addition, the Company may invest in futures and options. Financial futures
and related options thereon and options on securities are purchased solely for
nonspeculative hedging purposes. In the event the securities prices are
anticipated to decline, the Company may sell a futures contract or purchase a
put option on futures or securities to protect the value of securities held in
or to be sold for the general account or the nonunitized separate account.
Similarly, if securities prices are expected to rise, the Company may purchase a
futures contract or a call option thereon against anticipated positive cash flow
or may purchase options on securities.

WHILE THE FOREGOING GENERALLY DESCRIBES THE INVESTMENT STRATEGY OF THE
GUARANTEED ACCOUNT, THE COMPANY IS NOT OBLIGATED TO INVEST THE ASSETS
ATTRIBUTABLE TO THE CONTRACTS ACCORDING TO ANY PARTICULAR STRATEGY, EXCEPT AS
MAY BE REQUIRED BY CONNECTICUT AND OTHER STATE INSURANCE LAWS, NOR WILL THE
GUARANTEED RATES THE COMPANY ESTABLISHES NECESSARILY RELATE TO THE PERFORMANCE
OF THE NONUNITIZED SEPARATE ACCOUNT.

11
<PAGE>
TAX CONSIDERATIONS

Certificate Holders should seek advice from their tax advisers concerning the
application of federal (and where applicable, state and local) tax laws to
amounts invested in the Guaranteed Account under the Contracts by them and by
their beneficiaries and payments from such investments.

TAXATION OF THE COMPANY

The Company is taxed as an insurance company under the Internal Revenue Code of
1986 as amended. All assets supporting the Annuity obligations of the Guaranteed
Account are owned by the Company. Any income earned on such assets is considered
income to the Company.

TAXATION OF THE GUARANTEED ACCOUNT

Generally, any income earned on the Guaranteed Account deposits is not taxable
to Certificate Holders until withdrawn or distributed to the Certificate Holder
under the Contract. For additional information concerning the tax treatment of
Purchase Payments and distributions from the Contract, please refer to the
Contract Prospectus.

THE COMPANY

HISTORY AND BUSINESS

Aetna Insurance Company of America (the "Company") is a stock life insurance
company organized in 1990 under the insurance laws of Connecticut and is a
wholly owned subsidiary of Aetna Life Insurance and Annuity Company ("ALIAC").
The Company is currently licensed to do business in forty-five states and in the
District of Columbia, and is seeking licensure in all of the remaining states,
except New York. ALIAC is a wholly owned subsidiary of Aetna Life and Casualty
Company ("Aetna") which, with Aetna's subsidiaries, constitutes one of the
nation's largest insurance/ financial services organizations in the United
States based on its assets at December 31, 1994. The Company's Home Office is
located at 151 Farmington Avenue, Hartford, Connecticut 06156. Between 1990 and
December 31, 1994, no business was written and all income and expense was
related to investment activity only.

The Company markets and services variable individual and group annuity
contracts. These contracts offer a variety of funding and distribution options
for personal and employer-sponsored retirement plans. These contracts may be
immediate or deferred. The Company began marketing services during the second
quarter of 1995. The Company is licensed to sell life insurance in some states.

The Company is engaged in a business that is highly competitive due to the large
number of stock and mutual life insurance companies and other entities marketing
insurance and investment products.

EMPLOYEES

As of the date of this Prospectus, the Company had no employees. The Company
utilizes the employees of Aetna and its affiliates (primarily ALIAC).

PROPERTIES

The Company occupies office space that is owned or leased by Aetna Life
Insurance Company or other affiliates. Expenses associated with these offices
are allocated on a direct and indirect basis to the Company and the other
subsidiaries of Aetna.

STATE REGULATION

The insurance business of the Company is subject to comprehensive and detailed
regulation and supervision throughout the United States. The laws of the various
jurisdictions establish supervisory agencies with broad authority to regulate,
among other things, the granting of licenses to transact business, trade
practices, agent licensing, policy forms, underwriting and claim practices,
reserve adequacy, insurer solvency, the maximum interest rates that can be

12
<PAGE>
charged on life insurance policy loans and the minimum rates that must be
provided for accumulation of surrender values, the form and content of required
financial statements and the type and amounts of investments permitted. The
Company is required to file detailed reports with supervisory agencies in each
of the jurisdictions in which it does business, and its operations and accounts
are subject to examination by such agencies at regular intervals.

Although the federal government does not directly regulate the business of
insurance, many federal laws do affect the business. Existing or recently
proposed federal laws that may significantly affect or would affect, if passed,
the insurance business cover such matters as employee benefits, removal of
barriers preventing banks from engaging in the insurance and mutual fund
businesses, the taxation of insurance companies, and the tax treatment of
insurance products. Additionally, certain separate accounts of the Company and
the mutual funds that will be used as funding vehicles for those accounts are
investment companies regulated by the Securities and Exchange Commission.

Several states, including Connecticut, regulate affiliated groups of insurers
such as the Company and its affiliates under insurance holding company statutes.
Under such laws, intercorporate transfers of assets and dividend payments from
insurance subsidiaries may be subject to prior notice or approval, depending on
the size of such transfers and payments in relation to the financial position of
the company making the transfer. Changes in control also are regulated under
these laws. As a Connecticut-domiciled insurance company, the Company is subject
to comprehensive regulation under the Connecticut insurance laws and by the
Connecticut Insurance Department.

In recent years, state insurance regulators have introduced and continue to work
on changes in statutory accounting practices and other initiatives to strengthen
solvency regulation. The National Association of Insurance Commissioners (NAIC)
has adopted risk-based capital ("RBC") standards for life insurers. The RBC
formula is a regulatory tool designed to identify weakly capitalized companies
by comparing the adjusted surplus to the required surplus, which reflects the
risk profile of the company (RBC ratio). Within certain ratio changes,
regulators have increasing authority to take action as the RBC ratio decreases.
There are four levels of regulatory action ranging from requiring insurers to
submit a comprehensive plan to the state insurance commissioner to placing the
insurer under regulatory control.

The NAIC also is considering several other solvency related regulations
including the development of a model investment law and amendments to the model
insurance holding company law which would limit types and amounts of investments
by insurance companies. In addition, in recent years there has been growing
interest among certain members of Congress concerning possible federal roles in
the regulation of the insurance industry. Because these other initiatives are in
a preliminary stage, management cannot assess the potential impact of their
adoption on the company.

Under insurance guaranty fund laws in all states, insurers doing business in
those states can be assessed (up to prescribed limits) for policyholder or
claimant losses under policies issued by companies which become insolvent. In
the three years ended December 31, 1994, the Company had been assessed nominal
guaranty fund assessment fees attributable to administrative assessments issued
to all companies licensed to do business in a state. Since the Company had
written no business prior to December 31, 1994, no assessments should be
received relating to insolvencies which occurred prior to December 31, 1994.

13
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS

<TABLE>
<CAPTION>
POSITION WITH THE COMPANY OTHER BUSINESS POSITIONS
NAME, AGE AND YEAR OF ELECTION HELD FOR PAST 5 YEARS
- --------------------- -------------------------------- ------------------------------------------------
<S> <C> <C>
Daniel P. Kearney, 56 Director and President (1994) Executive Vice President (since December 1993);
Group Executive (February 1991 to December
1993), Financial Division of Aetna Life and
Casualty Company; Financial Consultant (prior to
February 1991) of Daniel P. Kearney, Inc.
James C. Hamilton, 54 Director, Vice President and Vice President and Actuary of Aetna Life
Treasurer (1990) Insurance Company (October 1988 to March 1991).
Scott A. Striegel, 47 Director and Senior Vice Senior Vice President, Annuity SBU (since April
President (1993) 1994), Senior Vice President, ARPS (since March
1993) of Aetna Life and Casualty Company; Senior
Vice President, Homeowners (February 1992 to
March 1993) of Aetna Life and Casualty Company;
Senior Vice President, Small Business and
Specialty Group Products (March 1991 to February
1992) of Aetna Life and Casualty Company; Vice
President, Strategic Development Unit (February
1990 to March 1991) of Aetna Life and Casualty
Company.
Shaun P. Mathews, 40 Director (1991); Senior Vice Senior Vice President, Mutual Funds (1991 to
President, Strategic Markets and 1994) of Aetna Life Insurance and Annuity
Products (1994) Company (ALIAC); Assistant Vice President,
Pension Operations (July 1989 to March 1991) of
ALIAC; Director of seven mutual funds advised or
sponsored by ALIAC.
Maria McKeon, 38 Corporate Secretary and Counsel Counsel (since 1991), Aetna Life and Casualty
(1995) Company.
</TABLE>

EXECUTIVE COMPENSATION

As of the date of this Prospectus, the Company had no employees. The Company
utilizes the employees of Aetna and its affiliates (primarily Aetna Life
Insurance and Annuity Company). There were no charges allocated to the Company
for rent, salaries or other administrative expenses during 1994.

SECURITY OWNERSHIP OF MANAGEMENT

The Company's directors and officers do not beneficially own any outstanding
shares of stock of the Company. All of the outstanding shares of stock of the
Company are beneficially owned by the parent, Aetna Life Insurance and Annuity
Company. The percentage of shares of Aetna Life Insurance and Annuity Company
beneficially owned by any director of the Company, and by all directors and
officers of the Company as a group, does not exceed one percent (1%) of the
class outstanding.

14
<PAGE>
INDEMNIFICATION

Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, the registrant has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.

LEGAL PROCEEDINGS

The Company and its Board of Directors know of no material legal proceedings
pending to which the Company is a party or which would materially affect the
Company.

EXPERTS

The financial statements and schedule of the Company as of December 31, 1994 and
1993, and for each of the years in the three-year period ended December 31,
1994, have been included herein in reliance upon the reports of KPMG Peat
Marwick LLP, independent auditors, appearing herein and elsewhere in the
Registration Statement and upon the authority of such firm as experts in
accounting and auditing.

The reports of KPMG Peat Marwick LLP on the above-mentioned financial statements
and financial statement schedule refer to a change in 1993 in the Company's
methods of accounting for certain investment in debt and equity securities.

LEGAL MATTERS

The validity of the securities offered by this Prospectus has been passed upon
by Susan E. Bryant, Esq., Counsel to the Company.

15
<PAGE>
APPENDIX I
EXAMPLES OF MARKET VALUE ADJUSTMENT CALCULATIONS

The following are examples of MVA calculations using several hypothetical
deposit period yields and current yields. These examples do not include the
effect of any deferred sales charge that may be assessed under the Contract upon
withdrawal.

EXAMPLE I

Assumptions:

<TABLE>
<S> <C>
i, the Deposit Period Yield, is 8%
j, the Current Yield, is 10%
x, the number of days remaining (computed from
Wednesday of the week of withdrawal) in the
Guaranteed Term, is 927.
</TABLE>

<TABLE>
<S> <C> <C> <C> <C>
(1 + i) x
MVA = { ----- } --------
(1 + j) 365

1.08 927
= { ----- } ---
1.10 365

= .9545
</TABLE>

In this example the Deposit Period Yield of 8% is less than the Current Yield of
10%, therefore, the MVA is less than 1. The amount withdrawn from the Guaranteed
Term is multiplied by this MVA.

If a withdrawal or transfer of a stated percentage is requested, the value
withdrawn from a Guaranteed Term will reflect the deduction of the negative MVA
Amount. However, if a withdrawal or transfer request of a specific dollar amount
is requested, the amount withdrawn from a Guaranteed Term will be increased to
compensate for the negative MVA Amount. For example, a withdrawal request to
receive a check for $2,000 would result in a $2,095.34 withdrawal from the
Guaranteed Term.
Assumptions:

<TABLE>
<S> <C>
i, the Deposit Period Yield, is 5%
j, the Current Yield, is 6%
x, the number of days remaining (computed from
Wednesday of the week of withdrawal) in the
Guaranteed Term, is 927.
</TABLE>

<TABLE>
<S> <C> <C> <C> <C>
(1 + i) x
MVA = { ----- } --------
(1 + j) 365

1.05 927
= { ----- } ---
1.06 365

= .9762
</TABLE>

In this example the Deposit Period Yield of 5% is less than the Current Yield of
6%, therefore, the MVA is less than 1. The amount withdrawn from the Guaranteed
Term is multiplied by this MVA.

16
<PAGE>
EXAMPLE II

Assumptions:

<TABLE>
<S> <C>
i, the Deposit Period Yield, is 10%
j, the Current Yield, is 8%
x, the number of days remaining (computed from
Wednesday of the week of withdrawal) in the
Guaranteed Term, is 927.
</TABLE>

<TABLE>
<S> <C> <C> <C> <C>
(1 + i) x
MVA = { ----- } --------
(1 + j) 365

1.10 927
= { ----- } ---
1.08 365

= 1.0477
</TABLE>

In this example the Deposit Period Yield of 10% is greater than the Current
Yield of 8%, therefore, the MVA is greater than 1. The amount withdrawn from the
Guaranteed Term is multiplied by this MVA.

If a withdrawal or transfer of a stated percentage is requested, the value
withdrawn from a Guaranteed Term will reflect the addition of the positive MVA
Amount. However, if a withdrawal of transfer request of a specific dollar amount
is requested, the amount withdrawn from a Guaranteed Term will be decreased to
reflect the positive MVA Amount. For example, a withdrawal request to receive a
check for $2,000 would result in a $1,908.94 withdrawal from the Guaranteed
Term.
Assumptions:

<TABLE>
<S> <C>
i, the Deposit Period Yield, is 5%
j, the Current Yield, is 4%
x, the number of days remaining (computed from
Wednesday of the week of withdrawal) in the
Guaranteed Term, is 927.
</TABLE>

<TABLE>
<S> <C> <C> <C> <C>
(1 + i) x
MVA = { ----- } --------
(1 + j) 365

1.05 927
= { ----- } ---
1.04 365

= 1.0246
</TABLE>

In this example the Deposit Period Yield of 5% is greater than the Current Yield
of 4%, therefore, the MVA is greater than 1. The amount withdrawn from the
Guaranteed Term is multiplied by this MVA.

17
<PAGE>
APPENDIX II
EXAMPLES OF MARKET VALUE ADJUSTMENT YIELDS

The following hypothetical examples show the Market Value Adjustment based on a
given Current Yield at various times remaining in the Guaranteed Term. Table A
illustrates figures based on a Deposit Period Yield of 10%; Table B illustrates
figures based on a Deposit Period Yield of 5%. The Market Value Adjustment will
have either a positive or negative influence on the amount withdrawn from or
remaining in a Guaranteed Term. Also, the amount of the Market Value Adjustment
generally decreases as the end of the Guaranteed Term approaches.

TABLE A: Deposit Period Yield of 10%

<TABLE>
<CAPTION>
CHANGE IN
DEPOSIT TIME REMAINING TO MATURITY OF GUARANTEED TERM
CURRENT PERIOD -----------------------------------------------------------------------------
YIELD YIELD 8 YEARS 6 YEARS 4 YEARS 2 YEARS 1 YEAR 3 MONTHS
- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
15% +5% -29.9% -23.4% -16.3% -8.5% -4.3% -1.1%
13% +3% -19.4 -14.9 -10.2 -5.2 -2.7 -0.7
12% +2% -13.4 -10.2 -7.0 -3.5 -1.8 -0.4
11% +1% -7.0 -5.3 -3.6 -1.8 -0.9 -0.2
9% -1% 7.6 5.6 3.7 1.8 0.9 0.2
8% -2% 15.8 11.6 7.6 3.7 1.9 0.5
7% -3% 24.8 18.0 11.7 5.7 2.8 0.7
5% -5% 45.1 32.2 20.5 9.8 4.8 1.2
</TABLE>

TABLE B: Deposit Period Yield of 5%

<TABLE>
<CAPTION>
CHANGE IN
DEPOSIT TIME REMAINING TO MATURITY OF GUARANTEED TERM
CURRENT PERIOD -----------------------------------------------------------------------------
YIELD YIELD 8 YEARS 6 YEARS 4 YEARS 2 YEARS 1 YEAR 3 MONTHS
- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
9% +4% -25.9% -20.1% -13.9% -7.2% -3.7% -0.9%
8% +3% -20.2 -15.6 -10.7 -5.5 -2.8 -0.7
7% +2% -14.0 -10.7 -7.3 -3.7 -1.9 -0.5
6% +1% -7.3 -5.5 -3.7 -1.9 -0.9 -0.2
4% -1% 8.0 5.9 3.9 1.9 1.0 0.2
3% -2% 16.6 12.2 8.0 3.9 1.9 0.5
2% -3% 26.1 19.0 12.3 6.0 2.9 0.7
1% -4% 36.4 26.2 16.8 8.1 4.0 1.0
</TABLE>

18
<PAGE>
SELECTED FINANCIAL DATA

The following selected financial data for the Company should be read in
conjunction with the financial statements and notes thereto included in this
prospectus.

<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE 30, YEARS ENDED DECEMBER 31,
-------------------- -----------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
(THOUSANDS)
Total Revenue...................... $ 353.0 $ 291.5 $ 619.3 $ 560.0 $ 645.0 $ 729.6 $ 440.7
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Net Income......................... $ 152.3 $ 164.1 $ 348.6 $ 312.3 $ 336.2 $ 457.6 $ 258.0
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Total Assets(1).................... $12,613.2 $11,714.8 $11,736.2 $11,921.3 $11,360.9 $10,955.6 $10,411.5
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
</TABLE>

(1)On December 31, 1993 the Company adopted Financial Accounting Standard
("FAS") No. 115, Accounting for Certain Investments for Debt and Equity
Securities. Under FAS No. 115, included above are net unrealized Gains
(losses) of $71.0 thousand and $44.0 thousand at June 30, 1995 and 1994,
respectively, and ($137.4) thousand and $184.6 thousand at December 31, 1994
and 1993, respectively.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS

<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE 30, YEARS ENDED DECEMBER 31,
-------------------- -------------------------------
1995 1994 1994 1993 1992
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
(THOUSANDS)
Net investment income.......................................... $ 353.0 $ 291.5 $ 619.3 $ 560.0 $ 645.0
Operating expenses............................................. 119.0 39.1 83.0 79.5 135.6
--------- --------- --------- --------- ---------
Income before federal income taxes............................. 234.0 252.4 536.3 480.5 509.4
Federal income taxes........................................... 81.7 88.3 187.7 168.2 173.2
--------- --------- --------- --------- ---------
Net income..................................................... $ 152.3 $ 164.1 $ 348.6 $ 312.3 $ 336.2
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
</TABLE>

FIRST AND SECOND QUARTERS 1995 COMPARED TO FIRST AND SECOND QUARTERS 1994

The Company's net income decreased 17% and 7% for the three and six months ended
June 30, 1995, respectively, when compared with the same periods a year ago. The
decrease in 1995 net income reflects higher operating expenses attributed to the
commencement of the Company's business operations offset in part by higher net
investment income reflecting growth in assets and higher yields on cash and cash
equivalents.

1994 COMPARED TO 1993

The Company's net income increased 12% in 1994 following a 7% decrease in 1993.
The improvement in 1994 net income reflected an increase in net investment
income primarily due to increasing yields on cash equivalents.

1993 COMPARED TO 1992

Net income in 1993 reflected a 13% decrease in net investment income reflecting
the downward trend in investment yields on newly invested assets, offset in part
by a 41% decrease in operating expenses related to a decrease in operating
expenses allocated from Aetna to the Company.

19
<PAGE>
INVESTMENTS

As of December 31, 1994 and 1993, all of the Company's debt securities were
issued by the U. S. Treasury.

<TABLE>
<CAPTION>
1994 1993
--------- ---------
<S> <C> <C>
(THOUSANDS)
Debt securities.................................................................... $ 6,906.5 $ 7,316.7
--------- ---------
Total Investments.............................................................. 6,906.5 7,316.7
Cash and cash equivalents.......................................................... 4,732.7 4,512.9
--------- ---------
Total Investments, cash and cash equivalents................................... $11,639.2 $11,829.6
--------- ---------
--------- ---------
</TABLE>

OUTLOOK

The Company expects to continue its development, begun in 1995, of the
individual nonqualified annuity market. The Company sells variable and market
value adjusted annuities. The Company's products are distributed through a
managed network of banks and broker dealers, as well as through the distribution
force of its parent, Aetna Life Insurance and Annuity Company.

LIQUIDITY AND CAPITAL RESOURCES

<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE 30, YEARS ENDED DECEMBER 31,
-------------------- -------------------------------
1995 1994 1994 1993 1992
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
(THOUSANDS)
Assets........................................... $12,613.2 $11,714.8 $11,736.2 $11,921.3 $11,360.9
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Shareholder's Equity............................. $12,036.0 $11,584.3 $11,675.3 $11,584.2 $11,151.8
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Net Cash provided by Operating Activities........ $ 318.8 $ 54.1 $ 219.8 $ 596.1 $ 449.3
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Net Cash used for Investing Activities........... $ (931.3) $ 0.0 $ 0.0 $ 162.8 $ 47.4
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Cash and Cash Equivalents........................ $ 4,120.2 $ 4,567.0 $ 4,732.7 $ 4,512.9 $ 4,079.6
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
</TABLE>

Cash and cash equivalents increased $219.8 thousand during 1994 primarily due to
the collection of investment income, partially offset by paid taxes and payments
to the parent and affiliates. Cash proceeds from maturities and collection of
fixed income securities in 1993 were $2,290.0 thousand. There were no sales of
securities in 1994.

The Company has no debt. Aetna made a capital contribution of $10.1 million in
1990. There were no additional capital contributions through December 31, 1994.

The amount of dividends that may be paid to the shareholder without prior
approval by the Insurance Commissioner of the State of Connecticut is subject to
various restrictions. Based upon these restrictions, the Company is permitted a
maximum of $922.8 thousand in dividend distributions in 1995.

20
<PAGE>
FINANCIAL STATEMENTS
AETNA INSURANCE COMPANY OF AMERICA

<TABLE>
<CAPTION>
INDEX
<S> <C>
PAGE
---------
Independent Auditors' Report...................................................................... 2
Financial Statements:
Statements of Income for the Years Ended December 31, 1994, 1993 and 1992......................... 3
Balance Sheets as of December 31, 1994 and 1993................................................... 4
Statements of Changes in Shareholder's Equity for the Years Ended December 31, 1994, 1993 and
1992............................................................................................. 5
Statements of Cash Flows for the Years Ended December 31, 1994, 1993 and 1992..................... 6
Notes to Financial Statements..................................................................... 7
Statements of Income for the Six Months Ended June 30, 1995 and 1994 (unaudited).................. 13
Balance Sheets as of June 30, 1995 (unaudited).................................................... 14
Statements of Changes in Shareholder's Equity for the Six Months Ended June 30, 1995 and 1994
(unaudited)...................................................................................... 15
Statements of Cash Flows for the Six Months Ended June 30, 1995 and 1994 (unaudited).............. 16
</TABLE>

F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT

The Shareholder and Board of Directors
Aetna Insurance Company of America:

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

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

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

As discussed in Note 1 to the financial statements, in 1993 the Company changed
its methods of accounting for certain investments in debt and equity securities.

KPMG PEAT MARWICK LLP

Hartford, Connecticut
March 17, 1995

F-2
<PAGE>
AETNA INSURANCE COMPANY OF AMERICA
(A WHOLLY OWNED SUBSIDIARY OF AETNA LIFE INSURANCE AND ANNUITY COMPANY)
STATEMENTS OF INCOME
(THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
-------------------------------
1994 1993 1992
--------- --------- ---------
<S> <C> <C> <C>
Revenue:
Net investment income......................................................... $ 619.3 $ 560.0 $ 645.0
--------- --------- ---------
Total revenue............................................................... 619.3 560.0 645.0
--------- --------- ---------

Expenses:
Operating expenses............................................................ 83.0 79.5 135.6
--------- --------- ---------
Total expenses.............................................................. 83.0 79.5 135.6
--------- --------- ---------

Income before federal income taxes.............................................. 536.3 480.5 509.4
Federal income taxes.......................................................... 187.7 168.2 173.2
--------- --------- ---------

Net income...................................................................... $ 348.6 $ 312.3 $ 336.2
--------- --------- ---------
--------- --------- ---------
</TABLE>

See Notes to Financial Statements.

F-3
<PAGE>
AETNA INSURANCE COMPANY OF AMERICA
(A WHOLLY OWNED SUBSIDIARY OF AETNA LIFE INSURANCE AND ANNUITY COMPANY)
BALANCE SHEETS
(THOUSANDS)

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1994 1993
--------- ---------
<S> <C> <C>
ASSETS
- -----------------------------------------------------------------------------------
Investments:
Debt securities, available for sale: (amortized cost $7,957.3, $7,043.9 and
$7,132.0, respectively)......................................................... $ 6,906.5 $ 7,316.7
Short-term investments........................................................... -- --
--------- ---------
Total investments.............................................................. 6,906.5 7,316.7
Cash and cash equivalents.......................................................... 4,732.7 4,512.9
Accrued investment income.......................................................... 91.5 91.5
Due from parent and affiliates..................................................... -- --
Deferred tax asset................................................................. 0.4 --
Other assets....................................................................... 5.1 0.2
Separate Account assets............................................................ -- --
--------- ---------
Total assets................................................................... $11,736.2 $11,921.3
--------- ---------
--------- ---------
LIABILITIES AND SHAREHOLDER'S EQUITY
- -----------------------------------------------------------------------------------
Liabilities:
Due to parent and affiliates..................................................... 10.5 89.7
Other liabilities................................................................ 21.0 14.9
Federal income taxes payable
Current........................................................................ 29.4 167.9
Deferred....................................................................... -- 64.6
Separate Account liabilities....................................................... -- --
--------- ---------
Total liabilities.............................................................. 60.9 337.1
--------- ---------
Shareholder's equity:
Common capital stock, par value $2,000 (1,275 shares authorized, issued and
outstanding).................................................................... 2,550.0 2,550.0
Paid-in capital.................................................................. 7,550.0 7,550.0
Net unrealized capital gains (losses)............................................ (137.4) 120.1
Retained earnings................................................................ 1,712.7 1,364.1
--------- ---------
Total shareholder's equity..................................................... 11,675.3 11,584.2
--------- ---------
Total liabilities and shareholder's equity..................................... $11,736.2 $11,921.3
--------- ---------
--------- ---------
</TABLE>

See Notes to Financial Statements.

F-4
<PAGE>
AETNA INSURANCE COMPANY OF AMERICA
(A WHOLLY OWNED SUBSIDIARY OF AETNA LIFE INSURANCE AND ANNUITY COMPANY)
STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
(THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
-------------------------------
1994 1993 1992
--------- --------- ---------
<S> <C> <C> <C>
Shareholder's equity, beginning of year (period)....................... $11,584.2 $11,151.8 $10,815.6
Net change in unrealized capital gains (losses)........................ (257.5) 120.1 0.0
Net income............................................................. 348.6 312.3 336.2
--------- --------- ---------
Shareholder's equity, end of year (period)............................. $11,675.3 $11,584.2 $11,151.8
--------- --------- ---------
--------- --------- ---------
</TABLE>

See Notes to Financial Statements.

F-5
<PAGE>
AETNA INSURANCE COMPANY OF AMERICA
(A WHOLLY OWNED SUBSIDIARY OF AETNA LIFE INSURANCE AND ANNUITY COMPANY)
STATEMENTS OF CASH FLOWS
(THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
-------------------------------
1994 1993 1992
--------- --------- ---------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net income............................................................... $ 348.6 $ 312.3 $ 336.2
(Increase) decrease in accrued investment income......................... -- 46.3 51.4
Increase (decrease) in amounts due to/from parent and affiliates......... (79.2) 184.9 (44.9)
Increase (decrease) in other receivables................................. -- -- --
Increase (decrease) in other assets and liabilities...................... 1.2 (76.0) 71.1
Increase (decrease) in federal income taxes payable...................... (138.9) 50.2 (2.8)
Net amortization of premium on debt securities........................... 88.1 78.4 38.3
--------- --------- ---------
Net cash provided by operating activities.............................. 219.8 596.1 449.3
--------- --------- ---------
Cash Flows from Investing Activities:
Proceeds from maturities and repayments of debt securities............... -- 2,290.0 1,485.0
Cost of investments purchased............................................ -- (2,452.8) (1,532.4)
--------- --------- ---------
Net cash used for investing activities................................. -- (162.8) (47.4)
--------- --------- ---------
Net increase (decrease) in cash and cash equivalents....................... 219.8 433.3 401.9
Cash and cash equivalents, beginning of year (period)...................... 4,512.9 4,079.6 3,677.7
--------- --------- ---------
Cash and cash equivalents, end of year (period)............................ $ 4,732.7 $ 4,512.9 $ 4,079.6
--------- --------- ---------
--------- --------- ---------
Supplemental cash flow information:
Income taxes paid, net................................................... $ 326.6 $ 118.0 $ 176.0
--------- --------- ---------
--------- --------- ---------
</TABLE>

See Notes to Financial Statements.

F-6
<PAGE>
AETNA INSURANCE COMPANY OF AMERICA
(A WHOLLY OWNED SUBSIDIARY OF AETNA LIFE INSURANCE AND ANNUITY COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994, 1993 AND 1992

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

Aetna Insurance Company of America (the "Company") is a stock life insurance
company organized in 1990 under the insurance laws of Connecticut. The Company
is a wholly owned subsidiary of Aetna Life Insurance and Annuity Company
("ALIAC"). ALIAC is a wholly owned subsidiary of Aetna Life and Casualty Company
("Aetna"). The Company is expected to begin marketing and servicing individual
and group annuity contracts in 1995. These financial statements have been
prepared in conformity with generally accepted accounting principles.

Accounting changes

Accounting for Certain Investments in Debt and Equity Securities

On December 31, 1993, the Company adopted Financial Accounting Standard ("FAS")
No. 115, Accounting for Certain Investments in Debt and Equity Securities, which
requires the classification of debt securities into three categories: "held to
maturity", which are carried at amortized cost; "available for sale", which are
carried at fair value with changes in fair value recognized as a component of
shareholder's equity; and "trading", which are carried at fair value with
immediate recognition in income of changes in fair value.

Initial adoption of this standard in 1993 resulted in a net increase of $120.1
thousand, net of taxes of $64.6 thousand, to net unrealized gains in
shareholder's equity.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, money market instruments and
other debt issues with a maturity of ninety days or less when purchased.

Investments

At December 31, 1993 and 1994, all of the Company's debt securities are
classified as available for sale and carried at fair value. These securities are
written down (as realized losses) for other than temporary decline in value.
Unrealized gains and losses are reflected in shareholder's equity. Fair values
for debt securities are based on quoted market prices or dealer quotations.
Purchases and sales of debt securities are recorded on the trade date.

Federal Income Taxes

The Company is included in the consolidated federal income tax return of Aetna.
The Company is taxed at regular corporate rates after adjusting income reported
for financial statement purposes for certain items. Deferred income tax benefits
result from changes during the year in cumulative temporary differences between
the tax basis and book basis of assets and liabilities.

F-7
<PAGE>
AETNA INSURANCE COMPANY OF AMERICA
(A WHOLLY OWNED SUBSIDIARY OF AETNA LIFE INSURANCE AND ANNUITY COMPANY)
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

2. INVESTMENTS

Investments in debt securities available for sale were as follows:

<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
----------- ------------- ------------- ---------
(Thousands)
<S> <C> <C> <C> <C>
1994
U.S. Treasury securities................................ $ 7,043.9 4.2 141.6 $ 6,906.5
----------- ----- ----- ---------
----------- ----- ----- ---------
1993
U.S. Treasury securities................................ $ 7,132.0 184.7 -- $ 7,316.7
----------- ----- ----- ---------
----------- ----- ----- ---------
</TABLE>

The amortized cost and fair value of debt securities for the year ended December
31, 1994 are shown below by contractual maturity. Actual maturities may differ
from contractual maturities because securities may be restructured, called or
prepaid.

<TABLE>
<CAPTION>
AMORTIZED FAIR
COST VALUE
----------- ---------
(Thousands)
<S> <C> <C>
Due to mature:
One year or less.................................................. $ 3,016.0 $ 3,019.7
After one year through five years................................. 4,027.9 3,886.8
----------- ---------
Total........................................................... $ 7,043.9 $ 6,906.5
----------- ---------
----------- ---------
</TABLE>

At December 31, 1994 and 1993, debt securities with an amortized cost of $3.9
million were on deposit as required by various state regulatory agencies.

3. CAPITAL GAINS AND LOSSES ON INVESTMENTS

Realized capital gains or losses are the difference between proceeds received
from investments sold or prepaid and amortized cost. For the three years ended
December 31, 1994, there were no realized capital gains or losses.

Unrealized gains and losses on investments carried at fair value, net of related
taxes, reflected in shareholder's equity, were as follows for December 31,

<TABLE>
<CAPTION>
1994 1993
--------- ---------
(Thousands)
<S> <C> <C>
Debt securities
Gross unrealized gains............................................................... $ 4.2 $ 184.7
Gross unrealized losses.............................................................. (141.6) --
--------- ---------
(137.4) 184.7
Deferred federal income taxes (See Note 6)............................................. -- 64.6
--------- ---------
Net unrealized capital gains (losses)................................................ $ (137.4) $ 120.1
--------- ---------
--------- ---------
</TABLE>

F-8
<PAGE>
AETNA INSURANCE COMPANY OF AMERICA
(A WHOLLY OWNED SUBSIDIARY OF AETNA LIFE INSURANCE AND ANNUITY COMPANY)
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

4. NET INVESTMENT INCOME

Sources of net investment income were as follows:

<TABLE>
<CAPTION>
1994 1993 1992
--------- --------- ---------
(Thousands)
<S> <C> <C> <C>
Debt securities.................................................. $ 414.1 $ 425.7 $ 492.7
Cash equivalents................................................. 205.2 135.3 152.3
--------- --------- ---------
Gross investment income.......................................... 619.3 561.0 645.0
Less investment expenses......................................... -- 1.0 --
--------- --------- ---------
Net investment income............................................ $ 619.3 $ 560.0 $ 645.0
--------- --------- ---------
--------- --------- ---------
</TABLE>

5. DIVIDEND RESTRICTIONS AND SHAREHOLDER'S EQUITY

The amount of dividends that may be paid to the shareholder in 1995 without
prior approval by the Insurance Commissioner of the State of Connecticut is
$922.8 thousand.

The Insurance Department of the State of Connecticut (the "Department")
recognizes as net income and shareholder's equity those amounts determined in
conformity with statutory accounting practices prescribed or permitted by the
Department, which differ in certain respects from generally accepted accounting
principles ("GAAP"). Statutory net income was $348.1 thousand, $312.3 thousand
and $336.2 thousand for the years ended December 31, 1994, 1993 and 1992,
respectively. Statutory shareholder's equity was $11.8 million and $11.4 million
as of December 31, 1994 and 1993, respectively.

As of December 31, 1994, the Company does not utilize any statutory accounting
practices which are not prescribed by insurance regulators that, individually or
in the aggregate, materially affect statutory shareholder's equity.

6. FEDERAL INCOME TAXES

The Company is included in the consolidated federal income tax return of Aetna.
Aetna allocates to each member an amount approximating the tax it would have
incurred were it not a member of the consolidated group, and credits the member
for the use of its tax saving attributes in the consolidated return.

In August 1993, the Omnibus Budget Reconciliation Act of 1993 (OBRA) was enacted
which resulted in an increase in the federal corporate tax rate from 34% to 35%
retroactive to January 1, 1993. The enactment of OBRA resulted in an increase in
current taxes of $4.8 thousand which is included in the 1993 current tax
expense.

Components of income tax expense (benefits) were as follows:

<TABLE>
<CAPTION>
1994 1993 1992
--------- --------- ---------
(Thousands)
<S> <C> <C> <C>
Current tax expense:
Income from operations...................................................... $ 188.1 $ 168.2 $ 173.2
Deferred tax benefit:
Income from operations...................................................... (.4) -- --
--------- --------- ---------
Total....................................................................... $ 187.7 $ 168.2 $ 173.2
--------- --------- ---------
--------- --------- ---------
</TABLE>

F-9
<PAGE>
AETNA INSURANCE COMPANY OF AMERICA
(A WHOLLY OWNED SUBSIDIARY OF AETNA LIFE INSURANCE AND ANNUITY COMPANY)
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

Income tax expense was equal to the federal income tax rate applied to income
before federal income taxes as shown below:

<TABLE>
<CAPTION>
1994 1993 1992
--------- --------- ---------
(Thousands)
<S> <C> <C> <C>
Income before federal income taxes...................................... $ 536.3 $ 480.5 $ 509.4
Tax rate................................................................ 35% 35% 34%
--------- --------- ---------
Income tax expense.................................................... $ 187.7 $ 168.2 $ 173.2
--------- --------- ---------
--------- --------- ---------
</TABLE>

The tax effects of temporary differences that give rise to deferred tax assets
and deferred tax liabilities under FAS No. 109 at December 31, 1994 and 1993 are
presented below:

<TABLE>
<CAPTION>
1994 1993
--------- ---------
(Thousands)
<S> <C> <C>
Deferred tax assets:
Net unrealized capital losses............................................... $ 48.1 $ --
Other, net.................................................................. .4 --
--------- ---------
Total gross assets............................................................ 48.5 --
Less valuation allowance...................................................... 48.1 --
--------- ---------
Assets net of valuation..................................................... .4 --
--------- ---------
Deferred tax liabilities:
Net unrealized capital gains................................................ -- 64.6
--------- ---------
Total gross liabilities....................................................... -- 64.6
--------- ---------
Net deferred tax liability (asset).......................................... $ (.4) $ 64.6
--------- ---------
--------- ---------
</TABLE>

Net unrealized capital gains and losses are presented in shareholder's equity
net of deferred taxes. At December 31, 1994, $137.4 thousand of net unrealized
capital losses were reflected in shareholder's equity without deferred tax
benefits. For federal income tax purposes, capital losses are deductible only
against capital gains in the year of sale or during the carryback and
carryforward periods (three and five years, respectively). Due to the expected
full utilization of capital gains in the carryback period and the uncertainty of
future capital gains, a valuation allowance of $48.1 thousand related to the net
unrealized capital losses has been reflected in shareholder's equity. Any
reversals of the valuation allowance are contingent upon the recognition of
future capital gains in Aetna's federal income tax return or a change in
circumstances which causes the recognition of the benefits to become more likely
than not. Non-recognition of the deferred tax benefits on net unrealized losses
described above had no impact on net income for 1994, but has the potential to
adversely affect future results if such losses are realized.

The Internal Revenue Service ("Service") has completed examinations of the
consolidated federal income tax returns of Aetna through 1986. Discussions are
being held with the Service with respect to proposed adjustments. However,
management believes there are adequate defenses against, or sufficient reserves
to provide for, such adjustments. The Service has commenced its examinations for
the years 1987 through 1990.

F-10
<PAGE>
AETNA INSURANCE COMPANY OF AMERICA
(A WHOLLY OWNED SUBSIDIARY OF AETNA LIFE INSURANCE AND ANNUITY COMPANY)
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

7. BENEFIT PLANS

The Company has no employees, when it does, the employees of the Company will be
eligible for the same benefit plans as the employees of ALIAC. The following is
a discussion of benefit plans as they apply to ALIAC. Charges were allocated to
the Company based on appropriate measures. There were no charges to operations
during 1994 and 1993 for the benefit plans described below. Charges to
operations during 1992 were $2.8 thousand.

Employee Pension Plans -- ALIAC, in conjunction with Aetna, has non-contributory
defined benefit pension plans covering substantially all employees. The plans
provide pension benefits based on years of service and average annual
compensation (measured over sixty consecutive months of highest earnings in a
120 month period). Contributions are determined using the Entry Age Normal Cost
Method and, for qualified plans subject to ERISA requirements, are limited to
the amounts that are currently deductible for tax reporting purposes. The
accumulated plan assets exceed accumulated plan benefits.

Agent Pension Plans -- ALIAC, in conjunction with Aetna, has a non-qualified
pension plan covering certain agents. The plan provides pension benefits based
on annual commission earnings. The accumulated plan assets exceed accumulated
plan benefits. There has been no funding to the plan for the years 1992 through
1994.

Employee Postretirement Benefits -- In addition to providing pension benefits,
Aetna also provides certain postretirement health care and life insurance
benefits, subject to certain caps, for retired employees. Medical and dental
benefits are offered to all full-time employees retiring at age 50 with at least
15 years of service or at age 65 with at least 10 years of service. Retirees are
required to contribute to the plans based on their years of service with Aetna.

Aetna implemented FAS No. 106, Employers' Accounting for Postretirement Benefits
Other Than Pensions on the immediate recognition basis in 1992. The cumulative
effect charge for all Aetna employees was reflected in Aetna's 1992 Statement of
Income. Prior to the adoption of FAS No. 106, cost of postretirement benefits
was charged to operations as payments were made.

Agent Postretirement Benefits -- ALIAC, in conjunction with Aetna, also provides
certain postemployment health care and life insurance benefits for certain
agents.

Incentive Savings Plan -- Substantially all employees are eligible to
participate in a savings plan under which designated contributions, which may be
invested in common stock of Aetna or certain other investments, are matched, up
to 5% of compensation, by Aetna.

Stock Plans -- Aetna has a stock incentive plan that provides for stock options
and deferred contingent common stock or cash awards to certain key employees.
Aetna also has a stock option plan under which executive and middle management
employees of Aetna may be granted options to purchase common stock of Aetna at
the market price on the date of grant or, in connection with certain business
combinations, may be granted options to purchase common stock on different
terms.

8. RELATED PARTY TRANSACTIONS

Substantially all of the administrative and support functions of the Company are
provided by Aetna and its affiliates. The financial statements reflect allocated
charges for these services based upon measures appropriate for the type and

F-11
<PAGE>
AETNA INSURANCE COMPANY OF AMERICA
(A WHOLLY OWNED SUBSIDIARY OF AETNA LIFE INSURANCE AND ANNUITY COMPANY)
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

nature of service provided. Total charges allocated to the Company, including
rent, salaries and other administrative expenses, were $1.0 thousand in 1993.
There were no charges allocated to the Company for these services in 1994 and
1992.

9. ESTIMATED FAIR VALUE

The carrying values and estimated fair values of the Company's financial
instruments at December 31, 1994 and 1993 were as follows:

<TABLE>
<CAPTION>
1994 1993
---------------------- ----------------------
CARRYING FAIR CARRYING FAIR
VALUE VALUE VALUE VALUE
----------- --------- ----------- ---------
(Thousands)
<S> <C> <C> <C> <C>
Assets:
Cash and cash equivalents..................................... $ 4,732.7 $ 4,732.7 $ 4,512.9 $ 4,512.9
Debt securities............................................... 6,906.5 6,906.5 7,316.7 7,316.7
</TABLE>

Fair value estimates are made at a specific point in time, based on available
market information and judgments about the financial instrument, such as
estimates of timing and amount of expected future cash flows. Such estimates do
not reflect any premium or discount that could result from offering for sale at
one time the Company's entire holdings of a particular financial instrument, nor
do they consider the tax impact of the realization of unrealized gains or
losses. In evaluating the Company's management of interest rate and liquidity
risk, the fair values of all assets and liabilities should be taken into
consideration, not only those above.

F-12
<PAGE>
AETNA INSURANCE COMPANY OF AMERICA
(A WHOLLY OWNED SUBSIDIARY OF AETNA LIFE INSURANCE AND ANNUITY COMPANY)
STATEMENTS OF INCOME
(THOUSANDS)

<TABLE>
<CAPTION>
6 MONTHS ENDED
JUNE 30,
--------------------
1995 1994
--------- ---------
(UNAUDITED)
<S> <C> <C>
Revenue:
Net investment income................................................................. $ 353.0 $ 291.5
--------- ---------
Total revenue....................................................................... 353.0 291.5
--------- ---------

Expenses:
Operating expenses.................................................................... 119.0 39.1
--------- ---------
Total expenses...................................................................... 119.0 39.1
--------- ---------

Income before federal income taxes...................................................... 234.0 252.4
Federal income taxes.................................................................. 81.7 88.3
--------- ---------

Net income.............................................................................. $ 152.3 $ 164.1
--------- ---------
--------- ---------
</TABLE>

See Notes to Financial Statements.

F-13
<PAGE>
AETNA INSURANCE COMPANY OF AMERICA
(A WHOLLY OWNED SUBSIDIARY OF AETNA LIFE INSURANCE AND ANNUITY COMPANY)
BALANCE SHEETS
(THOUSANDS)

<TABLE>
<CAPTION>
JUNE 30,
1995
---------------
(UNAUDITED)
<S> <C>
ASSETS
- ------------------------------------------------------------------------------------------------------------------
Investments:
Debt securities, available for sale: (amortized cost $7,957.3, $7,043.9 and $7,132.0, respectively)............. $ 8,066.6
Short-term investments.......................................................................................... --
---------------
Total investments............................................................................................. 8,066.6
Cash and cash equivalents......................................................................................... 4,120.2
Accrued investment income......................................................................................... 121.8
Due from parent and affiliates.................................................................................... 194.2
Deferred tax asset................................................................................................ --
Other assets...................................................................................................... 1.4
Separate Account assets........................................................................................... 109.0
---------------
Total assets.................................................................................................. $ 12,613.2
---------------
---------------
LIABILITIES AND SHAREHOLDER'S EQUITY
- ------------------------------------------------------------------------------------------------------------------
Liabilities:
Due to parent and affiliates.................................................................................... --
Other liabilities............................................................................................... 349.3
Federal income taxes payable
Current....................................................................................................... 83.3
Deferred...................................................................................................... 35.6
Separate Account liabilities...................................................................................... 109.00
---------------
Total liabilities............................................................................................. 577.2
---------------
Shareholder's equity:
Common capital stock, par value $2,000 (1,275 shares authorized, issued and outstanding)........................ 2,550.0
Paid-in capital................................................................................................. 7,550.0
Net unrealized capital gains (losses)........................................................................... 71.0
Retained earnings............................................................................................... 1,865.0
---------------
Total shareholder's equity.................................................................................... 12,036.0
---------------
Total liabilities and shareholder's equity.................................................................... $ 12,613.2
---------------
---------------
</TABLE>

See Notes to Financial Statements.

F-14
<PAGE>
AETNA INSURANCE COMPANY OF AMERICA
(A WHOLLY OWNED SUBSIDIARY OF AETNA LIFE INSURANCE AND ANNUITY COMPANY)
STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
(THOUSANDS)

<TABLE>
<CAPTION>
6 MONTHS ENDED
JUNE 30,
------------------------
1995 1994
----------- -----------
(UNAUDITED)
<S> <C> <C>
Shareholder's equity, beginning of year (period)....................................................... $ 11,675.3 $ 11,584.2
Net change in unrealized capital gains (losses)........................................................ 208.4 (164.0)
Net income............................................................................................. 152.3 164.1
----------- -----------
Shareholder's equity, end of year (period)............................................................. $ 12,036.0 $ 11,584.3
----------- -----------
----------- -----------
</TABLE>

See Notes to Financial Statements.

F-15
<PAGE>
AETNA INSURANCE COMPANY OF AMERICA
(A WHOLLY OWNED SUBSIDIARY OF AETNA LIFE INSURANCE AND ANNUITY COMPANY)
STATEMENTS OF CASH FLOWS
(THOUSANDS)

<TABLE>
<CAPTION>
6 MONTHS ENDED
JUNE 30,
----------------------
1995 1994
---------- ----------
(UNAUDITED)
<S> <C> <C>
Cash Flows from Operating Activities:
Net income.............................................................................................. $ 152.3 $ 164.1
(Increase) decrease in accrued investment income........................................................ (30.3) 1.5
Increase (decrease) in amounts due to/from parent and affiliates........................................ (204.7) 0.4
Increase (decrease) in other receivables................................................................ -- --
Increase (decrease) in other assets and liabilities..................................................... 332.4 (11.6)
Increase (decrease) in federal income taxes payable..................................................... 51.3 (143.8)
Net amortization of premium on debt securities.......................................................... 17.8 43.5
---------- ----------
Net cash provided by operating activities............................................................. 318.8 54.1
---------- ----------
Cash Flows from Investing Activities:
Proceeds from maturities and repayments of debt securities.............................................. 3,500.0 --
Cost of investments purchased........................................................................... (4,431.3) --
---------- ----------
Net cash used for investing activities................................................................ (931.3) --
---------- ----------
Net increase (decrease) in cash and cash equivalents...................................................... (612.5) 54.1
Cash and cash equivalents, beginning of year (period)..................................................... 4,732.7 4,512.9
---------- ----------
Cash and cash equivalents, end of year (period)........................................................... $ 4,120.2 $ 4,567.0
---------- ----------
---------- ----------
Supplemental cash flow information:
Income taxes paid, net.................................................................................. $ 30.0 $ 232.1
---------- ----------
---------- ----------
</TABLE>

See Notes to Financial Statements.

F-16
<PAGE>
AETNA INSURANCE COMPANY OF AMERICA
(A WHOLLY OWNED SUBSIDIARY OF AETNA LIFE INSURANCE AND ANNUITY COMPANY)
CONDENSED NOTES TO FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

Aetna Insurance Company of America (the "Company") is a stock life insurance
company organized in 1990 under the insurance laws of Connecticut. The Company
is a wholly owned subsidiary of Aetna Life Insurance and Annuity Company
("ALIAC"). ALIAC is a wholly owned subsidiary of Aetna Life and Casualty Company
("Aetna"). The Company began marketing and servicing variable individual and
group annuity contracts during the second quarter of 1995 through the Company's
Separate Accounts.

These financial statements have been prepared in conformity with generally
accepted accounting principles. These interim statements necessarily rely
heavily on estimates including assumptions as to annualized tax rates. In the
opinion of management, all adjustments necessary for a fair statement of results
for the interim periods have been made. All such adjustments are of a normal
recurring nature.

2. FEDERAL INCOME TAX

Net unrealized capital gains and losses are presented in shareholder's equity
net of deferred taxes. During the six months ended June 30, 1995, the Company
moved from a net unrealized capital loss position of $140.3 thousand at December
31, 1994, to a net unrealized gain position of $71.0 thousand at June 30, 1995,
primarily due to decreases in interest rates. As a result, all valuation
allowances previously established related to deferred tax assets in these
capital losses were reversed, which had no impact on net income for the three
and six months ended June 30, 1995.

F-17
<PAGE>
PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

Not Applicable

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Reference is hereby made to Section 33-320a of the Connecticut General
Statutes ("C.G.S.") regarding indemnification of directors and officers of
Connecticut corporations. The statute provides in general that Connecticut
corporations shall indemnify their officers, directors, employees, agents, and
certain other defined individuals against judgments, fines, penalties, amounts
paid in settlement and reasonable expenses actually incurred in connection with
proceedings against the corporation. The corporation's obligation to provide
such indemnification does not apply unless (1) the individual is successful on
the merits in the defense of any such proceeding; or (2) a determination is made
(by a majority of the board of directors not a party to the proceeding by
written consent; by independent legal counsel selected by a majority of the
directors not involved in the proceeding; or by a majority of the shareholders
not involved in the proceeding) that the individual acted in good faith and in
the best interests of the corporation; or (3) the court, upon application by the
individual, determines in view of all the circumstances that such person is
reasonably entitled to be indemnified.

C.G.S. Section 33-320a provides an exclusive remedy: a Connecticut
corporation cannot indemnify a director or officer to an extent either greater
or less than that authorized by the statute, e.g., pursuant to its certificate
of incorporation, bylaws, or any separate contractual arrangement. However, the
statute does specifically authorize a corporation to procure indemnification
insurance to provide greater indemnification rights. The premiums for such
insurance may be shared by the corporation with the insured individuals on an
agreed basis.

Consistent with the statute, Aetna Life and Casualty Company has procured
insurance from Lloyd's of London and several major United States excess insurers
for its directors and officers and the directors and officers of its
subsidiaries, including the Registrant, which supplements the indemnification
rights provided by C.G.S. Section 33-320a to the extent such coverage does not
violate public policy.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

Not Applicable

<PAGE>

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits
(3.1) Articles of Incorporation of Registrant(1)
(3.2) By-Laws(1)
(4) Instruments Defining the Rights of Security Holders:
Form of Annuity Variable Contract (Group Variable) ( G - C D A -
GP2(4/94)); Form of Aetna Growth Plus Group IRA Endorsement
(CGP2QEND(4/94)); Form of Annuity Variable Contract (Individual
Variable) (I-CDA-GP2(4/94)); and Form of Aetna Growth Plus
Individual IRA Endorsement (GP2QEND(4/94))(2)
(5) Opinion re Legality
(10) Material Contracts
(a) The 1984 Stock Option Plan of Aetna Life and Casualty Company and
amendments thereto (3)
(b) Aetna Life and Casualty Company's Supplemental Incentive Savings
Plan (3)
(c) Aetna Life and Casualty Company's Supplemental Pension Benefit
Plan(3)
(d) Aetna Life and Casualty Company's 1986 Management Incentive
Plan(4)
(23) (a) Consent of Independent Auditors
(b) Consent of Legal Counsel
(24) (a) Powers of Attorney(5)
(b) Certificate of Resolution Authorizing Signature by Power of
Attorney(1)
(27) Financial Data Schedule

(b) Consolidated Financial Statement Schedules

(i) Independent Auditors' Report(6)
(ii) Schedule I - Summary of Investments - Other than Investments in
Affiliates as of December 31, 1994(6)

Exhibits and Schedules other than those listed are omitted because they are not
required or are not applicable.

1. Incorporated by reference to Registration Statement on Form N-4
(File No. 33-59749) filed electronically on May 31, 1995.
2. Incorporated by reference to Registration Statement on Form N-4
(File No. 33-80750) filed electronically on June 23, 1995.
3. Incorporated by reference to Aetna Life and Casualty Company's 1992
Form 10-K (File No. 1-5704) filed on March 17, 1993.
4. Incorporated by reference to Aetna Life and Casualty Company's 1993
Form 10-K (File No. 1-5704) filed on March 18, 1994.

<PAGE>
5. Included in the Signature Page hereto.
6. Incorporated by reference to Post-Effective Amendment No. 1 to
Registration Statement on Form S-1 (33-81010) filed on April 10, 1995.

<PAGE>

ITEM 17. UNDERTAKINGS

The undersigned registrant hereby undertakes as follows pursuant to
Item 512 of Regulation S-K:

(a) Rule 415 offerings:

(1) To file, during any period in which offers or sales of the registered
securities are being made, a post-effective amendment to this
registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information
set forth in the registration statement; and

(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material changes to such information in the registration
statement.

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

(h) Request for Acceleration of Effective Date:

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless

<PAGE>

in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant has duly caused this Registration Statement on Form S-1 to be
signed on its behalf by the undersigned, thereunto duly authorized in the
City of Hartford, State of Connecticut, on this 23rd day of October, 1995.

By: AETNA INSURANCE COMPANY OF AMERICA

By: /s/ Daniel P. Kearney
-----------------------------------
Daniel P. Kearney
Principal Executive Officer

As required by the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature
appears below hereby constitutes Susan E. Bryant, Steven J. Lauwers,
and Julie E. Rockmore and each of them individually, such person's true
and lawful attorneys, with full power to them and each of them to sign for
such person and in such person's name and capacity indicated below, any and
all amendments to this Registration Statement, hereby ratifying and
confirming such person's signature as it may be signed by said attorneys
to any and all amendments.

SIGNATURE TITLE DATE

/s/ Daniel P. Kearney Director and President )
- ----------------------- (Principal Executive Officer) )
Daniel P. Kearney )
)
/s/ James C. Hamilton Director, Vice President and Treasurer)
- ----------------------- (Principal Accounting and )
James C. Hamilton Financial Officer) ) October 23,
) 1995
)
/s/ Shaun P. Mathews Director )
- ----------------------- )
Shaun P. Mathews )
)
)
/s/ Scott A. Striegel Director )
- ------------------------ )
Scott A. Striegel )

<PAGE>
EXHIBIT INDEX

EXHIBIT NO. EXHIBIT PAGE
- ------------- ----------------------------------------------- ----------

16(a)(3.1) Articles of Incorporation of Registrant *

16(a)(3.2) By-Laws *

16(a)(4) Instruments Defining the Rights of Security
Holders-Variable Annuity Contracts: *
Form of Annuity Contract (Group Variable)
(G-CDA-GP2(4/94)); Form of Aetna Growth Plus
Group IRA Endorsement (C-GP2QEND(4/94)); Form
of Annuity Contract (Individual Variable)
(I-CDA-GP2(4/94); and Form of Aetna Growth
Plus Individual IRA Endorsement (GP2QEND(4/94))

16(a)(10) Material Contracts:
(a) The 1984 Stock Option Plan of Aetna Life *
and Casualty Company and amendments thereto

(b) Aetna Life and Casualty Company's Supplemental
Incentive Savings Plan *

(d) Aetna Life and Casualty Company's 1986 *
Management Incentive Plan

16(a)(23)(a) Consent of Independent Auditors _______

16(a)(23)(b) Consent of Legal Counsel _______

16(a)(24)(a) Powers of Attorney (Included in the Signature _______
Page hereto)

16(a)(24)(b) Certificate of Resolution Authorizing *
Signature by Power of Attorney

16(b)(i) Independent Auditors' Report *

16(b)(ii) Schedule I - Summary of Investments - *
Other than Investments in Affiliates
as of December 31, 1994

27 Financial Data Schedule _______

* Incorporated by reference

<PAGE>
Exhibit 16(a)(23)(a)

CONSENT OF INDEPENDENT AUDITORS

The Shareholder and Board of Directors
Aetna Insurance Company of America:

We consent to the use of our reports included herein or incorporated by
reference and to the reference to our Firm under the heading "Experts" in the
Propsectus.

Our reports refer to a change in 1993 in the Company's methods of
accounting for certain investments in debt and equity securities.

/s/ KPMG Peat Marwick LLP
--------------------------------
KPMG Peat Marwick LLP

Hartford, Connecticut
October 20, 1995

<PAGE>

[LOGO] 151 Farmington Avenue SUSAN E. BRYANT
Hartford, CT 06156 Counsel
Law & Regulatory Affairs, RE4C
(860) 273-7834
Fax: (860)273-8340
October 23, 1995

Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549

Re: Aetna Insurance Company of America
Registration Statement on Form S-1
File No. 33-___________________

Dear Sirs:

The undersigned has acted as Counsel to Aetna Insurance Company of America, a
Connecticut life insurance company ("AICA") in connection with the
registration on Form S-1 of investments in the AICA Guaranteed Account (the
"Guaranteed Account") under the Securities Act of 1933, as amended.

In connection with such representation, the undersigned has reviewed the
Registration Statement on Form S-1 for the Guaranteed Account including the
prospectus and relevant proceedings of the Board of Directors.

Based upon this review, and assuming the securities represented by the
Guaranteed Account are issued in accordance with the provisions of the
prospectus, I am of the opinion that the securities, when issued, will have
been validly issued, and will constitute a legal and binding obligation of
the Company.

I further consent to the use of this opinion as an exhibit to the
Registration Statement and to my being named under the caption "Legal
Matters" in the prospectus contained therein.

Sincerely,

/s/ Susan E. Bryant

Susan E. Bryant
Counsel

<PAGE>
<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS CONTAINED IN THE FORM 10Q FOR THE FISCAL QUARTER ENDED
JUNE 30, 1995 FOR AETNA INSURANCE COMPANY OF AMERICA AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<DEBT-HELD-FOR-SALE> 8,067
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 0
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 8,067
<CASH> 4,120
<RECOVER-REINSURE> 0
<DEFERRED-ACQUISITION> 0
<TOTAL-ASSETS> 12,613
<POLICY-LOSSES> 0
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 0
<COMMON> 2,550
0
0
<OTHER-SE> 9,486
<TOTAL-LIABILITY-AND-EQUITY> 12,613
0
<INVESTMENT-INCOME> 353
<INVESTMENT-GAINS> 0
<OTHER-INCOME> 0
<BENEFITS> 0
<UNDERWRITING-AMORTIZATION> 0
<UNDERWRITING-OTHER> 0
<INCOME-PRETAX> 234
<INCOME-TAX> 82
<INCOME-CONTINUING> 152
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 152
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0

</TABLE>