AETNA INSURANCE CO OF AMERICA, POS AM, 1996-04-16

AETNA INSURANCE CO OF AMERICA
POS AM, 1996-04-16

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As filed with the Securities and Exchange Registration No. 33-63611

Commission on April 16, 1996

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1 TO FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

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

Connecticut
------------------------------------------------------------
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)

63
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(PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER)

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

151 Farmington Avenue, Hartford, Connecticut 06156, (860) 273-7834
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(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
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(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
----------------------------------------------------------------------
The annuities covered by this registration statement are to be issued from time
to time after the effective date 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. [ ]

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If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, 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. [ ]

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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

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

10 Interests of Named Experts and Counsel . . . Not Applicable

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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

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AETNA INSURANCE COMPANY OF AMERICA
151 Farmington Avenue, Hartford, Connecticut 06156 Telephone: 1-800-531-4547
AICA GUARANTEED ACCOUNT
CREDITED INTEREST OPTION
Prospectus Dated: May 1, 1996

This Prospectus describes the AICA Guaranteed Account (the "Guaranteed
Account"), a credited interest funding 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 the charges and expenses that will be
deducted directly or indirectly from the available funding options, including
the Guaranteed Account (see "Contract Charges"). This Prospectus describes the
pertinent information required to evaluate the terms of the Guaranteed Account
(see "Description of the AICA Guaranteed Account").

Under the terms of the Guaranteed Account, the Company sets various rates of
interest ("Guaranteed Rates") 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 for those 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 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 Purchase
Payments; however, with respect to transfers, the Certificate Holder must meet
minimum amounts that are set forth in your Contract. 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 NOR GUARANTEE WHAT SUCH RATES
WILL BE UNTIL THEY ARE DECLARED FOR EACH GUARANTEED TERM.

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 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.

The Company intends generally to invest funds received for the Guaranteed
Account primarily in investment-grade fixed income securities. (See
"Investments.") 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.

THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY THE CURRENT CONTRACT
PROSPECTUS AND THE CURRENT FUND PROSPECTUSES. ALL PROSPECTUSES SHOULD BE READ
AND RETAINED FOR FUTURE REFERENCE.

THE CONTRACTS ARE NOT DEPOSITS OR OBLIGATIONS OF OR GUARANTEED BY ANY BANK, NOR
ARE THEY INSURED BY THE FDIC; THEY ARE SUBJECT TO INVESTMENT RISKS, INCLUDING
POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.

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>
AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 ("Exchange Act"), and, in accordance therewith, files
periodic reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports and other information concerning the
Company may be inspected and copied at the public reference facilities of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
Commission's regional offices located at Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511, and at 7 World Trade Center,
Suite 1300, New York, New York 10048. Copies of such material also can be
obtained by mail from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.

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TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
<S> <C>
GLOSSARY............................................................................................ 3
SUMMARY............................................................................................. 4
DESCRIPTION OF THE AICA GUARANTEED ACCOUNT
General....................................................................................... 6
Contributions to the Guaranteed Account....................................................... 6
Guaranteed Rates.............................................................................. 6
Maturity of a Guaranteed Term................................................................. 7
Maturity Value Transfer Provision............................................................. 7
TRANSFERS AND WITHDRAWALS
Transfers..................................................................................... 8
Withdrawals................................................................................... 8
Calculation of Transfer or Withdrawal Amounts................................................. 8
MARKET VALUE ADJUSTMENT............................................................................. 8
Deposit Period Yield.......................................................................... 9
Current Yield................................................................................. 9
MVA Formula................................................................................... 10
MISCELLANEOUS....................................................................................... 10
Contract Charges.............................................................................. 10
Withdrawals................................................................................... 10
Annuity Period................................................................................ 10
INVESTMENTS......................................................................................... 10
DISTRIBUTION........................................................................................ 11
TAX CONSIDERATIONS.................................................................................. 11
Taxation of the Company....................................................................... 11
Taxation of the Guaranteed Account............................................................ 12
THE COMPANY......................................................................................... 12
Business...................................................................................... 12
Employees..................................................................................... 12
Regulation.................................................................................... 12
Forward-Looking Information................................................................... 13
Miscellaneous................................................................................. 14
Properties.................................................................................... 14
Legal Proceedings............................................................................. 14
Market for Registrant's Common Equity and Related Stockholder Matters......................... 14
DIRECTORS AND EXECUTIVE OFFICERS.................................................................... 14
EXECUTIVE COMPENSATION.............................................................................. 15
SECURITY OWNERSHIP OF MANAGEMENT.................................................................... 15
INDEMNIFICATION..................................................................................... 15
EXPERTS............................................................................................. 15
LEGAL PROCEEDINGS................................................................................... 16
LEGAL MATTERS....................................................................................... 16
APPENDIX I--Examples of Market Value Adjustment Calculations........................................ 17
APPENDIX II--Examples of Market Value Adjustment Yields............................................. 19
SELECTED FINANCIAL DATA............................................................................. 20
MANAGEMENT'S ANALYSIS OF THE RESULTS OF OPERATIONS
FINANCIAL STATEMENTS OF THE COMPANY................................................................. F-1
</TABLE>

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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
adjustments calculated due to withdrawals or transfers 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 Purchase Payments, transfers and
reinvestments are accepted for accumulation under the Guaranteed Account for one
or more Guaranteed Terms.

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 offices located at 151 Farmington
Avenue, Hartford, Connecticut 06156.

MARKET VALUE ADJUSTMENT (MVA): An adjustment that may be made 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.

MARKET VALUE ADJUSTMENT AMOUNT (MVA AMOUNT): The amount by which the funds being
withdrawn or transferred from a Guaranteed Term is increased or decreased due to
the MVA.

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 that is available at maturity
when the Company automatically reinvests the total maturing Guaranteed Term
value into the open Deposit Period. This provision allows Certificate Holders to
transfer or surrender the automatically reinvested value, without an MVA, to a
new Guaranteed Term or to other available investment options until the last
business day of the month following the maturity of a Guaranteed Term. The last
business day of the month is defined as the last business day of the month when
the New York Stock Exchange is open.

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

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SUMMARY

DESCRIPTION OF THE GUARANTEED ACCOUNT

The AICA Guaranteed Account is a guaranteed interest option available as a
funding option under certain variable annuity contracts issued by the Company.
Amounts invested in the Guaranteed Account are credited with interest rates
guaranteed by the Company for stated periods of time. Amounts must remain in the
Guaranteed Account for the full Guaranteed Term to receive the quoted interest
rates. Withdrawals or transfers from a Guaranteed Term before the end of the
Guaranteed Term may be subject to a Market Value Adjustment.

During a Deposit Period, Certificate Holders may direct some or all of their
Purchase Payment(s) to the Guaranteed Account. There is no minimum amount of
payment if the investment comes from a 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").

GUARANTEED RATES AND GUARANTEED TERMS

Interest is credited daily at a rate that will provide the guaranteed annual
effective yield over the period of one year. 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 for the length of the Guaranteed Term.
Guaranteed Rates will never be less than the annual effective rate stated in the
Contract (see "Guaranteed Rates").

TRANSFERS AND WITHDRAWALS
Full or partial surrenders and transfers to other funding options under the
Contract 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
restriction may not apply in all circumstances (see "Transfers and
Withdrawals").

MARKET VALUE ADJUSTMENT

Amounts withdrawn or transferred from the Guaranteed Account prior to the
Maturity Date may be subject to a Market Value Adjustment. The Market Value
Adjustment reflects the change in the value of the investment at the time of
withdrawal due to changes in interest rates since the date of deposit, and may
be positive or negative.

This provision does not apply to (1) amounts transferred on the Maturity Date;
(2) amounts transferred under the Maturity Value Transfer Provision; (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 one of the Additional Withdrawal Options described in the
Contract Prospectus.

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. 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 (see "Market Value Adjustment").

MATURITY OF A GUARANTEED TERM

On or before the Maturity Date, a Certificate Holder may instruct the Company,
on the Maturity Date, to (a) reinvest the Matured Term Value in the Guaranteed
Account for a new Guaranteed Rate and Term available under the then current
Deposit Period; (b) transfer the Matured Term Value to one or more of the
variable funding options available under the

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Contract; or (c) withdraw the Matured Term Value. In none of these circumstances
would a Market Value Adjustment be applicable to the Matured Term Value;
however, a deferred sales charge may be assessed on amounts withdrawn from the
Contract (see "Contract Charges" and the Contract Prospectus).

If the Company does not receive direction from the Certificate Holder by the
Maturity Date, the Matured Term Value will be reinvested in the Guaranteed
Account for a new Guaranteed Rate and Term under the then current Deposit
Period. The 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").

MATURITY VALUE TRANSFER PROVISION

The Maturity Value Transfer Provision is available at maturity when the Company
automatically reinvests the total Guaranteed Term value into the open 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 by default. A
deferred sales charge may still be applied to any amounts withdrawn from the
Contract (see "Maturity Value Transfer Provision").

CONTRACT CHARGES

Certain charges such as the mortality and expense risk charge and administrative
charge are assessed under the Contract to compensate the Company for costs
associated with administering the Contract. These charges are not deducted from
the Guaranteed Account. Other charges, such as deferred sales charges,
maintenance fees, premium taxes and transfer fees, as well as any federal income
taxes and tax penalties, may be deducted from amounts held in or transferred
from the Guaranteed Account. For a description of all fees and charges deducted
under the Contract, see "Contract Charges" and the Contract Prospectus.

INVESTMENTS

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 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").

GUARANTEED ACCOUNT NOTIFICATIONS

At least 18 calendar days prior to the Maturity Date, the Company will notify
you of a Guaranteed Term's maturity. The notice will also include information
relating to the current Deposit Period's Guaranteed Rates and the available
Guaranteed Terms. At any time, you may obtain information concerning available
Deposit Periods, Guaranteed Rates, and Guaranteed Terms through the use of a
toll-free telephone number (1-800-531-4547) (see "Description of the AICA
Guaranteed Account--General" and "Maturity of a Guaranteed Term").

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DESCRIPTION OF THE AICA GUARANTEED ACCOUNT

GENERAL

This Prospectus describes the material provisions of the AICA Guaranteed Account
(the "Guaranteed Account"), a credited interest option available to fund certain
variable annuity contracts issued by Aetna Insurance Company of America (the
"Company"). Amounts allocated to the Guaranteed Account are held in a
noninsulated, nonunitized separate account (see "Investments").

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. Guaranteed Terms are offered at the
Company's discretion for varying lengths of time ranging up to and including ten
years. The 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 also be
extended at the Company's discretion.

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, if you have amounts
allocated to a maturing Guaranteed Term, at least 18 calendar days prior to the
Maturity Date, the Company will send you information relating to the upcoming
Deposit Period dates as well as the current Guaranteed Rates, Guaranteed Terms
and projected Matured Term Values.

CONTRIBUTIONS TO THE GUARANTEED ACCOUNT

Amounts may be invested in the Guaranteed Account for the Guaranteed Terms and
at the Guaranteed Rates available during the then current Deposit Period by
allocating all or a portion of your Purchase Payment(s) to the Guaranteed
Account. You may also elect to transfer accumulated values from other funding
options available under the Contract or from other Guaranteed Terms of the
Guaranteed Account to the Guaranteed Account, subject to the transfer
limitations described in the Contract. There is no minimum amount required if
investments come from Purchase Payments; however, you must meet the minimum
amounts that are set forth in your Contract. There is a $500 minimum for
transfers from other funding options.

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 in connection with the Maturity Value Transfer Provision,
the Dollar Cost Averaging Program, or the selection of an Additional Withdrawal
Option available under the Contract for early or systematic distributions (see
"Transfers").

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.

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

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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.

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
Contract 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.

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 amounts deposited into the Guaranteed
Account (see "Investments"). In addition, the Company will consider other
factors 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 amounts transferred or
surrendered from a Guaranteed Term on the Maturity Date; however, a surrender
charge may be imposed for amounts surrendered under the Contract.

If no direction from the Certificate Holder is received by the Company 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.

MATURITY VALUE TRANSFER PROVISION

For those Certificate Holders who allow the Company to automatically transfer
the total Matured Term Value on the Maturity Date 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 automatically transferred by the Company 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.

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TRANSFERS AND WITHDRAWALS

TRANSFERS

As described in the Contract Prospectus, all or any portion of accumulated
values under the Contract may be transferred to the Guaranteed Account or to
other funding options available under the Contract. The minimum amount that may
be transferred from other funding options to the Guaranteed Account is $500.

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. This
90-day restriction does not apply to transfers relating to Dollar Cost Averaging
from the one-year Guaranteed Term or to the selection of an Additional
Withdrawal Option available under the Contract.

When a request is made to transfer a specific dollar amount, any applicable
Market Value Adjustment will be included in the determination of any amount
withdrawn from the Guaranteed Account to fulfill this request. Therefore, the
amount actually withdrawn from the Guaranteed Account may be more or less than
the requested dollar amount. A Market Value Adjustment may not be applied under
certain circumstances (see "Market Value Adjustment").

WITHDRAWALS

The Contract allows for full or partial withdrawals of amounts accumulated under
the Contract. To make a full or partial withdrawal, you must complete a
withdrawal request form (available from the Company) and submit it to the
Company's Home Office. Withdrawals under the Contract are generally subject to a
Deferred Sales Charge.

Withdrawals from the Guaranteed Account may also be subject to a Market Value
Adjustment. When a request for a partial withdrawal of a specific dollar amount
is made, any applicable Market Value Adjustment will be included in the
determination of any amount to be withdrawn from the Guaranteed Term to fulfill
this request. Therefore, the amount actually withdrawn from the Guaranteed
Term(s) may be more or less than the dollar amount requested (see "Market Value
Adjustment," "Contract Charges" and the Contract Prospectus).

CALCULATION OF TRANSFER OR WITHDRAWAL AMOUNTS

When you request a transfer or withdrawal from the Guaranteed Account, amounts
invested for Guaranteed Terms having the same lengths will be grouped together
and then withdrawn pro rata from the Guaranteed Term groups. From each
Guaranteed Term group, amounts will be withdrawn starting with the oldest
Deposit Period.

For example:

Deposit Period A = Five-Year Guaranteed Term 1/1/94 - 1/14/94
Deposit Period B = Five-Year Guaranteed Term 1/1/95 - 1/14/95
Deposit Period C = Five-Year Guaranteed Term 1/1/96 - 1/14/96

Within this five year Guaranteed Term group, amounts would be taken first from
amounts allocated to Deposit Period A (the oldest Guaranteed Term group), then
from Deposit Period B, and then from Deposit Period C.

MARKET VALUE ADJUSTMENT

A Market Value Adjustment ("MVA") is applied to amounts transferred or withdrawn
from the Guaranteed Account before the Maturity Date, 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
Guaranteed Term in connection with the Dollar Cost Averaging Program, and
amounts withdrawn under one of the Additional Withdrawal Options for systematic
or periodic distributions under the Contract.

8
<PAGE>

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 Amount, if any, is applied (see
"Annuity Period" in this Prospectus). Additionally, 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 Amount, as applicable, will be
applied.

In order to accommodate these withdrawals or transfers, the Company may need to
liquidate certain assets or use existing cash flows 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 or loss could
affect the determination of Guaranteed Rates (see "Guaranteed Rates").

Market Value Adjustments can be positive or negative and therefore the
imposition of an MVA 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.

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. 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, the Treasury
Notes that mature in the last three months of the Guaranteed Term are
identified, and then, the yield-to-maturity percentages of these Treasury Notes
for the last business day of each week in the Deposit Period are determined. The
resulting percentages are then averaged to determine the deposit period yield.

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 16, 1996. List the
yield-to-maturity percentage figures as of May 10, 1996 for the same Treasury
Notes that determined the deposit period yield. Average these yields to
determine the current yield.

9
<PAGE>
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

Certain charges are deducted directly or indirectly from the funding options
available under the Contract. If amounts used for a full or partial surrender
are withdrawn from a Guaranteed Account, in addition to the Market Value
Adjustment, a deferred sales charge may be deducted from those amounts
withdrawn. Please see the Contract Prospectus.

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

WITHDRAWALS

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.

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) will be applied to any
amount transferred from the Guaranteed Account before the Maturity Date to one
of the nonlifetime Annuity options available under the Contract. 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.

INVESTMENTS

Amounts applied to the Guaranteed Account will be deposited to, and accounted
for in, a noninsulated 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 or any other interest. The assets of the
noninsulated, nonunitized separate account may be charged with liabilities
arising out of any other business of the Company.

Certificate Holders allocating amounts 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.

10
<PAGE>
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
services, 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.

DISTRIBUTION

The Company is the principal underwriter of the Contract. The Company is
registered with the Securities and Exchange Commission under the Securities
Exchange Act of 1934 as a broker-dealer, and is a member of the National
Association of Securities Dealers, Inc. For additional information regarding
distribution, see the Contract Prospectus.

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. See also the Contract
Prospectus for other tax considerations.

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.

11
<PAGE>
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

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").
ALIAC is a wholly owned subsidiary of Aetna Retirement Services, Inc. ("ARSI").
ARSI 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 based on its assets at December 31,
1994. The Company's Home Office is located at 151 Farmington Avenue, Hartford,
Connecticut 06156.

During the second quarter of 1995, the Company began marketing and servicing
variable and market value adjusted annuities through the Company's Separate
Accounts to individuals in the qualified and non-qualified markets.

The Company's variable annuity products utilize Separate Accounts to provide
contractholders with a vehicle for investments under which the contractholders
assume the investment risks as well as the benefit of favorable performance.
Assets held under these products are invested, as designated by the
contractholder or participant under a contract, in Separate Accounts, which in
turn invest in shares of mutual funds that are managed by ALIAC or other
selected mutual funds which are not managed by ALIAC. The Company is compensated
by the Separate Accounts for bearing mortality and expense risks pertaining to
variable annuity contracts (acturial margin). (See Note 8 of the Notes to
Financial Statements).

Product retention is a key driver of profitability for annuity products. To
encourage product retention, annuity contracts typically impose a surrender
charge on policyholder balances withdrawn for a period of time after the
contract's inception. The period of time and level of the charge vary by
product. Existing tax penalties on annuity distributions prior to 59 1/2 provide
an additional disincentive to premature surrenders of annuity balances, but do
not impede transfers of those balances to products of other competitors.

Competition arises from other insurance companies, banks, mutual funds and
investment managers. Principal competitive factors are cost, service, product
features, investment options and level of investment performance and the
perceived financial strength of the investment manager or sponsor. Competition
may affect, among other matters, both business growth and the pricing of the
Company's products and services.

Products are distributed through a managed network of banks and broker/dealers,
as well as the distribution force of other ARSI affiliates.

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).

REGULATION

The insurance business of the Company is subject to comprehensive, detailed
regulation 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 claims practices, reserve adequacy,
insurer solvency, the maximum interest rates that can be charged on life
insurance policy loans, the minimum rates that must be provided for accumulation
of surrender values, the form and content of

12
<PAGE>

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 pensions and other 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.

Material changes in applicable federal and state laws regulations could
adversely affect the Company's business operations, although the Company is
unable to predict whether any such changes will be implemented.

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 asset transfers and dividend payments from
insurance subsidiaries may require prior notice to or approval of the insurance
regulators, depending on the size of such transfers and payments relative 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 been considering 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 company's 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 when the
state insurance commissioner places the insurer under regulatory control. The
Company's RBC ratio at December 31, 1995 was significantly above the levels
which would require regulatory action.

The Company's variable products involve investments through Separate Accounts,
some of which are registered as investment companies with the SEC, as are the
variable mutual funds offered by the Company.

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 existing in all states, insurers doing
business in those states can be assessed (up to prescribed limits) for certain
obligations of insolvent insurance companies to policyholders and claimants. In
each of the years in the three year period ended December 31, 1995, the Company
has 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.

FORWARD-LOOKING INFORMATION

The Private Securities Litigation Reform Act of 1995 ("the Act") provides a
"safe harbor" for forward-looking statements to encourage companies to provide
prospective information about their companies, so long as those statements are
identified as forward-looking and are accompanied by meaningful cautionary
statements identifying important factors

13
<PAGE>

that could cause actual results to differ materially from those discussed in the
statement. The Company desires to take advantage of the "safe harbor" provisions
of the Act. Certain information contained herein, particularly the information
appearing under the heading "Outlook" contained in Management's Analysis of the
Results of Operations, is forward-looking. Information regarding certain
important factors that could cause actual results of operations or outcomes of
other events to differ materially from any such forward-looking statement appear
together with such statement, and/or elsewhere herein.

MISCELLANEOUS

The Company utilizes the employees of Aetna and its affiliates (primarily
ALIAC), and receives an expense allocation, at cost, based on the utilization of
these employees.

The Company uses ALIAC's computer facilities. Management believes that ALIAC's
computer facilities, systems and related procedures are adequate to meet its
business needs. ALIAC's data processing systems and backup and security
policies, practices and procedures are regularly evaluated by ALIAC's management
and internal auditors and are modified as considered necessary.

The Company is not dependent upon any single customer and no single customer
accounted for more than 10% of revenue in 1995.

PROPERTIES

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

MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

All of the Company's outstanding shares are owned by its parent company, ALIAC.
For the years ended 1995, 1994 and 1993, the Company did not pay dividends to
ALIAC.

The amount of dividends which may be paid by the Company to ALIAC 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 $958.0 thousand in dividend distributions in 1996.

DIRECTORS AND EXECUTIVE OFFICERS

The following are the Directors and Executive Officers of the Company. The terms
of office for all Directors and Executive Officers will run until the Company's
next annual meeting and until their successors are duly elected and qualified.

14
<PAGE>

<TABLE>
<CAPTION>
CURRENT POSITION PRINCIPAL OCCUPATION AND EMPLOYMENT DURING PAST FIVE
NAME, AGE WITH THE COMPANY YEARS; OTHER DIRECTORSHIPS OF DIRECTORS
- - ------------------------ ------------------------------------ -------------------------------------------------------
<S> <C> <C>
Scott A. Striegel, 47 Director and Senior Vice President Senior Vice President, Operations (since January 1996),
Aetna, Inc.; Senior Vice President, Annuity SBU
(April-January 1996), Aetna Life Insurance and Annuity
Company; Senior Vice President, Homeowners (February
1992-March 1993) of Aetna Life and Casualty Company;
Senior Vice President, Small Business and Specialty
Group Products (March 1991-February 1992) of Aetna Life
and Casualty Company.
Shaun P. Mathews, 40 Director and Vice President Vice President, Products Group (since February 1996);
Senior Vice President, Strategic Markets and Products
(February 1993-February 1996); and Senior Vice
President, Mutual Funds (March 1991-February 1993) --
Aetna Life Insurance and Annuity Company. DIRECTOR:
Aetna Investment Services, Inc. (since July 1993);
Aetna Insurance Company of America (since February
1993).
Maria McKeon, 38 Corporate Secretary and Counsel Counsel (since 1991), Aetna Life and Casualty 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 1995.

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 its 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.

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.

EXPERTS

The financial statements and schedules of the Company as of December 31, 1995
and 1994, and for each of the years in the three-year period ended December 31,
1995, have been included herein and in the Registration Statement in reliance
upon the reports of KPMG Peat Marwick LLP, independent certified public
accountants, 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 schedules refer to a change in 1993 in the Company's
methods of accounting for certain investment in debt and equity securities.

15
<PAGE>
LEGAL PROCEEDINGS

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

LEGAL MATTERS

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

16
<PAGE>
APPENDIX I
EXAMPLES OF MARKET VALUE ADJUSTMENT CALCULATIONS

The following are examples of Market Value Adjustment ("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.

17
<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 or 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.

18
<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>

19
<PAGE>

SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
----------- ----------- ----------- ----------- -----------
(THOUSANDS)
<S> <C> <C> <C> <C> <C>
Total Revenue................................................ $ 862.0 $ 619.3 $ 560.0 $ 645.0 $ 729.6
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Net Income................................................... $ 167.9 $ 348.6 $ 312.3 $ 336.2 $ 457.6
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Total Assets................................................. $ 58,689.0 $ 11,736.2 $ 11,921.3 $ 10,955.6 $ 10,955.6
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
</TABLE>

MANAGEMENT'S ANALYSIS OF THE RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------
1995 1994 1993
----------- --------- ---------
(THOUSANDS)
<S> <C> <C> <C>
Net investment income....................................................... $ 721.0 $ 619.3 $ 560.0
Realized capital gains...................................................... 8.3 -- --
Charges assessed against policyholders...................................... 132.7 -- --
----------- --------- ---------
Total revenue........................................................... 862.0 619.3 560.0
Operating expenses.......................................................... 605.2 83.0 79.5
----------- --------- ---------
Total expenses.......................................................... 605.2 83.0 79.5
----------- --------- ---------
Income before federal income taxes.......................................... 256.8 536.3 480.5
Federal income taxes........................................................ 88.9 187.7 168.2
----------- --------- ---------
Net income.................................................................. $ 167.9 $ 348.6 $ 312.3
----------- --------- ---------
----------- --------- ---------

1995 1994 1993
----------- --------- ---------
<S> <C> <C> <C>
Deposits:
Fully guaranteed.......................................................... $ 12,953.8 $ -- $ --
Non-guaranteed............................................................ 29,887.6 -- --
----------- --------- ---------
Total................................................................... $ 42,841.4 $ -- $ --
----------- --------- ---------
----------- --------- ---------
Assets under management:
Fully guaranteed.......................................................... $ 10,052.4 $ -- $ --
Non-guaranteed............................................................ 33,757.6 -- --
----------- --------- ---------
Total................................................................... $ 43,810.0 $ -- $ --
----------- --------- ---------
----------- --------- ---------
</TABLE>

OVERVIEW

The Company's adjusted earnings (after-tax) follow (in thousands):

<TABLE>
<CAPTION>
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
Net income..................................................................... $ 167.9 $ 348.6 $ 312.3
Less:
Net realized capital gains................................................... 5.4 -- --
--------- --------- ---------
Adjusted earnings.......................................................... $ 162.5 $ 348.6 $ 312.3
--------- --------- ---------
--------- --------- ---------
</TABLE>

The Company's adjusted earnings decreased 53% in 1995 following a 12% increase
in 1994. The decrease in 1995 adjusted earnings reflects higher operating
expenses offset in part by charges assessed against policyholders attributable
to the commencement of the Company's business operations. Results in 1995 also
reflect higher net investment

20
<PAGE>

income reflecting a slight change in asset mix (larger percentage of debt
securities versus cash and cash equivalents) and higher yields on cash
equivalents. The improvement in 1994 adjusted earnings when compared to 1993
reflected an increase in net investment income primarily due to increasing
yields on cash equivalents.

INVESTMENTS

As of December 31, 1995 and 1994, all of the Company's debt securities were
issued by the U. S. Treasury.

<TABLE>
<CAPTION>
1995 1994
----------- -----------
(THOUSANDS)
<S> <C> <C>
Debt securities.................................................................... $ 8,187.4 $ 6,906.5
----------- -----------
Total Investments................................................................ 8,187.4 6,906.5
Cash and cash equivalents.......................................................... 4,044.2 4,732.7
----------- -----------
Total Investments, cash and cash equivalents..................................... $ 12,231.6 $ 11,639.2
----------- -----------
----------- -----------
</TABLE>

OUTLOOK

Sales of non-qualified products are expected to significantly exceed 1995
levels as relationships formed with broker/dealers and banks in 1995 build sales
momentum. The Company also intends to expand its retirement planning
capabilities.

LIQUIDITY AND CAPITAL RESOURCES

<TABLE>
<CAPTION>
1995 1994 1993
----------- ----------- -----------
(THOUSANDS)
<S> <C> <C> <C>
Assets............................................................... $ 58,689.0 $ 11,736.2 $ 11,921.3
----------- ----------- -----------
----------- ----------- -----------
Shareholder's Equity................................................. $ 12,133.0 $ 11,675.3 $ 11,584.2
----------- ----------- -----------
----------- ----------- -----------
Net Cash provided by Operating Activities............................ $ 242.8 $ 219.8 $ 596.1
----------- ----------- -----------
----------- ----------- -----------
Net Cash used for Investing Activities............................... $ 931.3 $ 0.0 $ 162.8
----------- ----------- -----------
----------- ----------- -----------
Cash and Cash Equivalents............................................ $ 4,044.2 $ 4,732.7 $ 4,512.9
----------- ----------- -----------
----------- ----------- -----------
</TABLE>

The assets and shareholder's equity amounts for the years ended December 31,
1995, 1994 and 1993 reflect the implementation of FAS 115. See Notes 1 and 3 of
Notes to Financial Statements.

Shareholder's equity increased by $457.7 thousand, which reflects net income and
the net change in unrealized capital gains (losses).

The Company's cash flow requirements for 1995 and 1994 were met by cash provided
by operating activities and from the maturity and sale of investments.

The Company has no debt. There were no capital contributions in 1995, 1994 or
1993.

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 $958.0 thousand in dividend distributions in 1996.

21
<PAGE>
AETNA INSURANCE COMPANY OF AMERICA
Financial Statements
Index

<TABLE>
<CAPTION>
PAGE
---
<S> <C>
Independent Auditors' Report..................................... F-2
Statements of Income for the Years Ended
December 31, 1995, 1994 and 1993................................ F-3
Balance Sheets as of December 31, 1995 and 1994.................. F-4
Statements of Changes in Shareholder's Equity for
the Years Ended December 31, 1995, 1994 and 1993................ F-5
Statements of Cash Flows for the Years
Ended December 31, 1995, 1994 and 1993.......................... F-6
Notes to Financial Statements.................................... F-7
</TABLE>

F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying balance sheets of Aetna Insurance Company of
America as of December 31, 1995 and 1994, 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, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements 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, 1995 and 1994, and the results of its operations and its
cash flows for each of the years in the three-year period ended December 31,
1995, in conformity with generally accepted auditing 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

Hartford, Connecticut
March 20, 1996

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,
----------------------
1995 1994 1993
------ ------ ------
<S> <C> <C> <C>
Revenue:
Net investment income................................ $721.0 $619.3 $560.0
Realized capital gains............................... 8.3 -- --
Charges assessed against policyholders............... 132.7 -- --
------ ------ ------
Total revenue...................................... 862.0 619.3 560.0
Expenses:
Operating expenses................................... 605.2 83.0 79.5
------ ------ ------
Total expenses..................................... 605.2 83.0 79.5
Income before federal income taxes..................... 256.8 536.3 480.5
Federal income taxes................................. 88.9 187.7 168.2
------ ------ ------
Net income............................................. $167.9 $348.6 $312.3
------ ------ ------
------ ------ ------
</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,
--------------------
1995 1994
--------- ---------
<S> <C> <C>
ASSETS
- - -------------------------------------------------------
Investments:
Debt securities available for sale:
(amortized cost $7,953.0 and $7,043.9).............. $ 8,187.4 $ 6,906.5
Cash and cash equivalents.............................. 4,044.2 4,732.7
Accrued investment income.............................. 112.6 91.5
Deferred policy acquisition costs...................... 2,066.4 --
Deferred tax asset..................................... 467.6 0.4
Other assets........................................... 0.8 5.1
Separate Accounts assets............................... 43,810.0 --
--------- ---------
Total assets....................................... $58,689.0 $11,736.2
--------- ---------
--------- ---------

<CAPTION>
LIABILITIES AND SHAREHOLDER'S EQUITY
- - -------------------------------------------------------
<S> <C> <C>
Liabilities:
Due to parent and affiliates......................... $ 174.6 $ 10.5
Other liabilities.................................... 1,932.6 21.0
Federal income taxes--Current........................ 638.8 29.4
Separate Accounts liabilities........................ 43,810.0 --
--------- ---------
Total liabilities.................................. 46,556.0 60.9
--------- ---------
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)................ 152.4 (137.4)
Retained earnings.................................... 1,880.6 1,712.7
--------- ---------
Total shareholder's equity......................... 12,133.0 11,675.3
--------- ---------
Total liabilities and shareholder's equity....... $58,689.0 $11,736.2
--------- ---------
--------- ---------
</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,
--------------------------------
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
Shareholder's equity, beginning of period.............. $11,675.3 $11,584.2 $11,151.8
Net change in unrealized capital gains (losses)........ 289.8 (257.5) 120.1
Net income............................................. 167.9 348.6 312.3
--------- --------- ---------
Shareholder's equity, end of period.................... $12,133.0 $11,675.3 $11,584.2
--------- --------- ---------
--------- --------- ---------
</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,
---------------------------------
1995 1994 1993
---------- -------- ----------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net income........................................... $ 167.9 $ 348.6 $ 312.3
Adjustments to reconcile net income to net cash
provided by operating activities:...................
Decrease (increase) in accrued investment income... (21.1) -- 46.3
Increase in deferred policy acquisition costs...... (2,066.4) -- --
Net change in amounts due to/from parent and
affiliates........................................ 164.1 (79.2) 184.9
Net increase (decrease) in other assets and
liabilities....................................... 1,915.9 1.2 (76.0)
Increase (decrease) in federal income taxes........ 60.2 (138.9) 50.2
Net amortization of premium on debt securities..... 22.2 88.1 78.4
---------- -------- ----------
Net cash provided by operating activities........ 242.8 219.8 596.1
---------- -------- ----------
Cash Flows from Investing Activities:
Investment maturities and collection of:
Debt securities available for sale................. 3,000.0 -- 2,290.0
Short-term investments............................. 500.0 -- --
Cost of investment purchases in:
Debt securities available for sale................. (3,939.2) -- (2,452.8)
Short-term investments............................. (492.1) -- --
---------- -------- ----------
Net cash used for investing activities........... (931.3) -- (162.8)
---------- -------- ----------
Net (decrease) increase in cash and cash equivalents... (688.5) 219.8 433.3
Cash and cash equivalents, beginning of period......... 4,732.7 4,512.9 4,079.6
---------- -------- ----------
Cash and cash equivalents, end of period............... $ 4,044.2 $4,732.7 $ 4,512.9
---------- -------- ----------
Supplemental cash flow information:
Income taxes paid, net............................... $ 28.7 $ 326.6 $ 118.0
---------- -------- ----------
---------- -------- ----------
</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, 1995, 1994 and 1993

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 Retirement Services, Inc.
("ARSI"). ARSI is a wholly owned subsidiary of Aetna Life and Casualty Company
("Aetna"). During the second quarter of 1995, the Company began marketing and
servicing variable and market value adjusted annuities through the Company's
Separate Accounts to individuals in the qualified and non-qualified markets.

BASIS OF PRESENTATION

These financial statements have been prepared in conformity with generally
accepted accounting principles. Certain reclassifications have been made to 1994
and 1993 financial information to conform to 1995 presentation.

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

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from reported results using those estimates.

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, 1995 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 related to these securities, after deducting related
taxes, 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.

F-7
<PAGE>
AETNA INSURANCE COMPANY OF AMERICA
(A wholly owned subsidiary of Aetna Life Insurance and Annuity Company)
Notes to Financial Statements (continued)
December 31, 1995, 1994 and 1993

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
DEFERRED POLICY ACQUISITION COSTS

Certain costs of acquiring insurance business have been deferred. These costs,
all of which vary with and are primarily related to the production of new
business, consist principally of commissions, certain expenses of underwriting
and issuing contracts and certain agency expenses. Such costs are amortized in
proportion to estimated gross profits and adjusted to reflect actual gross
profits and are amortized over twenty years. Deferred policy acquisition costs
are written off to the extent that it is determined that future policy premiums
and investment income or gross profits would not be adequate to cover related
losses and expenses.

CHARGES ASSESSED AGAINST POLICYHOLDERS

Charges assessed against policyholders' funds for surrender charges, actuarial
margin and other fees are recorded as revenue when earned.

SEPARATE ACCOUNTS

Assets held under variable annuity contracts are segregated in Separate Accounts
and are invested, as designated by the contractholder, in shares of mutual funds
that are managed by ALIAC or other selected mutual funds not managed by ALIAC.
Separate Accounts assets and liabilities are carried at fair value except for
those relating to a guaranteed interest option which is offered through a
Separate Account. The assets of the Separate Account supporting the guaranteed
interest option are carried at an amortized cost of $10.1 million for 1995 (fair
value of $9.3 million), since the Company bears the investment risk where the
contract is held to maturity. Reserves relating to the guaranteed interest
option are maintained at fund value and reflect interest credited at rates
ranging from 4.65% to 6.0% in 1995. Separate Accounts assets and liabilities are
shown as separate captions in the Balance Sheets. Deposits, investment income
and net realized and unrealized capital gains (losses) of the Separate Accounts
are not reflected in the Statements of Income (with the exception of realized
capital gains (losses) on the sale of assets supporting the guaranteed interest
option). The Statements of Cash Flows do not reflect investment activity of the
Separate Accounts.

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.

2. INVESTMENTS
Investments in debt securities available for sale were as follows:

<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
(THOUSANDS) COST GAINS LOSSES VALUE
-------- ---------- ---------- --------
<S> <C> <C> <C> <C>
1995
U.S. Treasury securities................... $7,953.0 $237.4 $ 3.0 $8,187.4
-------- ---------- ---------- --------
-------- ---------- ---------- --------
1994
U.S. Treasury securities................... $7,043.9 $ 4.2 $141.6 $6,906.5
-------- ---------- ---------- --------
-------- ---------- ---------- --------
</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)
December 31, 1995, 1994 and 1993

2. INVESTMENTS (CONTINUED)
The amortized cost and fair value of debt securities for the year ended December
31, 1995 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
(THOUSANDS) COST VALUE
-------- --------
<S> <C> <C>
Due to mature:
One year or less..................................... $2,526.1 $2,526.0
After one year through five years.................... 5,426.9 5,661.4
-------- --------
Total................................................ $7,953.0 $8,187.4
-------- --------
-------- --------
</TABLE>

The Company engages in securities lending whereby certain securities from its
portfolio are loaned to other institutions for short periods of time. Cash
collateral, which is in excess of the market value of the loaned securities, is
deposited by the borrower with a lending agent, and retained and invested by the
lending agent to generate additional income for the Company. The market value of
the loaned securities is monitored on a daily basis with additional collateral
obtained or refunded as the market value fluctuates. At December 31, 1995, the
Company had no securities out on loan.

At December 31, 1995 and 1994, debt securities carried at $4.4 million and $3.9
million, respectively, 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. Net realized capital gain
on debt securities, as reflected in the Statements of Income for the year ended
December 31, 1995, were $8.3 thousand. For the years ended December 31, 1994 and
1993 there were no realized capital gains or losses.

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

<TABLE>
<CAPTION>
(THOUSANDS) 1995 1994
------ --------
<S> <C> <C>
Debt securities
Gross unrealized gains............................... $237.4 $ 4.2
Gross unrealized losses.............................. (3.0) (141.6)
------ --------
234.4 (137.4)
Deferred federal income taxes (See Note 6)............. 82.0 --
------ --------
Net unrealized capital gains (losses).................. $152.4 $ (137.4)
------ --------
------ --------
</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)
December 31, 1995, 1994 and 1993

4. NET INVESTMENT INCOME
Sources of net investment income were as follows:

<TABLE>
<CAPTION>
(THOUSANDS) 1995 1994 1993
------ ------ ------
<S> <C> <C> <C>
Debt securities........................................ $457.5 $414.1 $425.7
Cash equivalents....................................... 261.1 205.2 135.3
Other.................................................. 2.4 -- --
Gross investment income................................ 721.0 619.3 561.0
Less investment expenses............................... -- -- 1.0
------ ------ ------
Net investment income.................................. $721.0 $619.3 $560.0
------ ------ ------
------ ------ ------
</TABLE>

5. DIVIDEND RESTRICTIONS AND SHAREHOLDER'S EQUITY
The amount of dividends that may be paid to the shareholder in 1996 without
prior approval by the Insurance Commissioner of the State of Connecticut is
$958.0 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 $378.9 thousand, $348.1 thousand
and $312.3 thousand for the years ended December 31, 1995, 1994 and 1993,
respectively. Statutory shareholder's equity was $12.1 million and $11.8 million
as of December 31, 1995 and 1994, respectively.

As of December 31, 1995 and 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.

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

<TABLE>
<CAPTION>
1995 1994 1993
-------- ------ ------
(THOUSANDS)
<S> <C> <C> <C>
Current tax expense:
Income from operations............................... $ 635.2 $188.1 $168.2
Net realized capital gains........................... 2.9 -- --
-------- ------ ------
638.1 188.1 168.2
-------- ------ ------
Deferred tax benefit:
Income from operations............................... (549.2) (.4) --
-------- ------ ------
Total................................................ $ 88.9 $187.7 $168.2
-------- ------ ------
-------- ------ ------
</TABLE>

F-10
<PAGE>
AETNA INSURANCE COMPANY OF AMERICA
(A wholly owned subsidiary of Aetna Life Insurance and Annuity Company)
Notes to Financial Statements (continued)
December 31, 1995, 1994 and 1993

6. FEDERAL INCOME TAXES (CONTINUED)
Income tax expense was different from the amount computed by applying the
federal income tax rate to income before federal income taxes for the following
reasons:

<TABLE>
<CAPTION>
1995 1994 1993
------- ------- -------
(THOUSANDS)
<S> <C> <C> <C>
Income before federal income taxes..................... $256.8 $536.3 $480.5
Tax rate............................................... 35% 35% 35%
------- ------- -------
Application of the tax rate.......................... $ 89.9 $187.7 $168.2
Other, net............................................. (1.0) -- --
------- ------- -------
Income tax expense................................... $ 88.9 $187.7 $168.2
------- ------- -------
------- ------- -------
</TABLE>

The tax effects of temporary differences that give rise to deferred tax assets
and deferred tax liabilities at December 31, 1995 and 1994 are presented below:

<TABLE>
<CAPTION>
1995 1994
-------- -----
(THOUSANDS)
<S> <C> <C>
Deferred tax assets:
Net unrealized capital losses........................ $ -- $48.1
Insurance reserves................................... 1,054.6 --
Other, net........................................... -- .4
-------- -----
Total gross assets..................................... 1,054.6 48.5
Less valuation allowance............................... -- 48.1
-------- -----
Deferred tax assets, net of valuation 1,054.6 .4
Deferred tax liabilities:
Deferred policy acquisition costs.................... 496.4 --
Net unrealized capital gains......................... 82.0 --
Other................................................ 8.6 --
-------- -----
Total gross liabilities................................ 587.0 --
-------- -----
Net deferred tax asset............................... $ 467.6 $ .4
-------- -----
-------- -----
</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. As of December 31, 1995, no valuation allowance was required for
unrealized capital gains and losses. The reversal of the valuation allowance had
no impact on net income in 1995. Management believes that it is more likely than
not that the Company will realize the benefit of the net deferred tax asset.

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 challenges. The Service has commenced its examinations for
the years 1987 through 1990.

F-11
<PAGE>
AETNA INSURANCE COMPANY OF AMERICA
(A wholly owned subsidiary of Aetna Life Insurance and Annuity Company)
Notes to Financial Statements (continued)
December 31, 1995, 1994 and 1993

7. BENEFIT PLANS
The Company utilizes the employees of Aetna and its affiliates (primarily
ALIAC). The following is a discussion of benefit plans as they apply to ALIAC.
The charges to operations of the Company for the utilization of these employee's
during 1995 were immaterial. There were no charges to operations of the Company
during 1994 and 1993 for the benefit plans described below.

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 Projected Unit Credit
Method and, for qualified plans subject to ERISA requirements, are limited to
the amounts that are currently deductible for tax reporting purposes. The
accumulated benefit obligation and plan assets are recorded by Aetna. 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.

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.

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, at cost, for these services based upon measures appropriate for the
type and nature of service provided. Total charges allocated to the Company,
including rent, salaries and other administrative expenses, were $350.0 thousand
and $1.0 thousand for the years ended December 31, 1995 and 1993, respectively.
There were no charges in 1994.

The Company is compensated by the Separate Accounts for bearing mortality and
expense risks pertaining to variable annuity contracts. Under the insurance
contracts, the Separate Accounts pay the Company a daily fee which, on an

F-12
<PAGE>
AETNA INSURANCE COMPANY OF AMERICA
(A wholly owned subsidiary of Aetna Life Insurance and Annuity Company)
Notes to Financial Statements (continued)
December 31, 1995, 1994 and 1993

8. RELATED PARTY TRANSACTIONS (CONTINUED)
annual basis, is 1.40% of their average daily net assets. The amount of
compensation and fees received from the Separate Accounts, charges assessed
against policyholders, amounted to $132.7 thousand for the year ended December
31, 1995. There were no charges assessed against policyholders for the years
ended December 31, 1994 and 1993.

9. ESTIMATED FAIR VALUE
The carrying values and estimated fair values of the Company's financial
instruments at December 31, 1995 and 1994 were as follows:

<TABLE>
<CAPTION>
1995 1994
------------------ ------------------
CARRYING FAIR CARRYING FAIR
(THOUSANDS) VALUE VALUE VALUE VALUE
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Assets:
Cash and cash equivalents............................ $4,044.2 $4,044.2 $4,732.7 $4,732.7
Debt securities...................................... 8,187.4 8,187.4 6,906.5 6,906.5
</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.

The following valuation methods and assumptions were used by the Company in
estimating the fair value of the above financial instruments:

DEBT SECURITIES: Fair values are based on quoted market prices or dealer
quotations.

OFF-BALANCE-SHEET FINANCIAL INSTRUMENTS (INCLUDING DERIVATIVE FINANCIAL
INSTRUMENTS)

The Company did not have transactions in derivative instruments in 1995 or 1994.

10. COMMITMENTS AND CONTINGENT LIABILITIES
At December 31, 1995 and 1994 the Company had no commitments or contingent
liabilities.

LITIGATION

There were no material legal proceedings pending against the Company as of
December 31, 1995 or 1994 which were beyond the ordinary course of business.

F-13
<PAGE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------

AICA GUARANTEED ACCOUNT

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

PROSPECTUS
DATED MAY 1, 1996

[LOGO]

Aetna Insurance Company of America
151 Farmington Avenue, Hartford, Connecticut 06156
Telephone: 1-800-531-4547

63611-2 5/96

<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:
(a) Form of Variable Annuity Contract (Group Variable)
(G-CDA-GP2(4/94)); Form of Aetna Growth Plus Group IRA
Endorsement (CGP2QEND(4/94)); Form of Variable Annuity
Contract (Individual Variable) (I-CDA-GP2(4/94)); and
Form of Aetna Growth Plus Individual IRA Endorsements
(GP2QEND(4/94)),(GP2NHEND))(2)

(b) Form of Variable Annuity Contracts (G2-CDA-94(IR)) and
(G2-CDA-94(NQ))(1)

(5) Opinion re Legality
(10) Material Contracts are listed under exhibit 10 in the Company's
Form 10-K for the fiscal year ended December 31, 1995 (File
No. 33-81010), as filed electronically with the Commission
on March 29, 1996. Each of the exhibits so listed is
incorporated by reference as indicated in the Form 10-K.
(23) (a) Consent of Independent Auditors
(b) Consent of Legal Counsel (Included in Item (5) above)
(24) (a) Powers of Attorney(3)

(b) Certificate of Resolution Authorizing Signature by Power of
Attorney(3)

(b) Consolidated Financial Statement Schedules
(i) Independent Auditors' Report
(ii) Schedule I - Summary of Investments - Other than
Investments in Affiliates as of December 31, 1995
(iii) Schedule III - Supplementary Insurance Information as of
and for the years ended December 31, 1995, 1994 and
1993

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), as filed electronically on June 1, 1995.
2. Incorporated by reference to Registration Statement on Form N-4 (File
No. 33-80750), as filed on June 23, 1994.
3. Incorporated by reference to Registration Statement on Form S-1 (File
No. 33 63611), as filed electronically on November 30, 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.

(b) 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

<PAGE>

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 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 Post-Effective Amendment No. 1 to Registration
Statement on Form S-1 (File No. 33-63611) to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Hartford, State of
Connecticut, on this 15th day of April, 1996.

By: AETNA INSURANCE COMPANY OF
AMERICA

By: Daniel P. Kearney*
-------------------------------------
Daniel P. Kearney
Principal Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment No. 1 to Registration Statement on Form S-1 has been signed
by the following persons in the capacities and on the dates indicated.

Signature Title Date
- - ---------- ----- ----

Daniel P. Kearney* Director and President )
- - -------------------
Daniel P. Kearney (Principal Executive Officer) )

James C. Hamilton* Director and Treasurer )
- - -------------------
James C. Hamilton (Principal Accounting and Financial )
Officer) ) April,
) 15, 1996
Shaun P. Mathews* Director )
- - -------------------
Shaun P. Mathews )

Scott A. Striegel* Director )
- - -------------------
Scott A. Striegel )

/s/ Julie E. Rockmore
- - ---------------------
*Attorney in Fact

<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: *
(a) Form of Variable Annuity Contract (Group Variable)
(G-CDA-GP2(4/94)); Form of Aetna Growth Plus Group
IRA Endorsement (C-GP2QEND(4/94)); Form of Variable
Annuity Contract (Individual Variable)
(I-CDA-GP2(4/94); Form of Aetna Growth Plus
Individual IRA Endorsements (GP2QEND(4/94)) and
(GP2NHEND)
(b) Form of Variable Annuity Contracts (G2-CDA-94(IR)) *
and (G2-CDA-94(NQ))
16(a)(10) Material Contracts *

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

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

16(a)(24)(a) Powers of Attorney *

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, 1995 -----

16(b)(iii) Schedule III - Supplementary Insurance Information as of
and for the years ended December 31, 1995, 1994 and 1993 -----

* Incorporated by reference

<PAGE>

EXHIBIT 16(a)(23)(a)

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

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

We consent to the use of our reports included herein and to the reference to
our firm under the heading "Experts" in the Prospectus.

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
April 15, 1996

<PAGE>

EXHIBIT 16(a)(23)(b)

Susan E. Bryant
Counsel
Law & Regulatory Affairs, RE4C
(860) 273-7834
Fax: (860) 273-8340
151 Farmington Avenue
Hartford, CT 06156

April 15, 1996

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

Re: Aetna Insurance Company of America
Post-Effective Amendment No. 1 to Registration Statement on Form S-1
File No. 33-63611
Prospectus Title: AICA Guaranteed Account

Dear Sirs:

As Counsel of Aetna Insurance Company of America (the "Company"), I have
represented the Company in connection with the AICA Guaranteed Account (the
"Guaranteed Account"), a credited interest option available under certain
variable annuity contracts, and the Form S-1 Registration Statement relating to
such account.

In connection with such representation, I have reviewed Post-Effective Amendment
No. 1 to the Registration Statement on Form S-1 for the Contracts, 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 sold, will have been
legally 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" therein.

Sincerely,

/s/ Susan E. Bryant
- - -------------------
Susan E. Bryant
Counsel
Aetna Insurance Company of America

<PAGE>

EXHIBIT 16(b)(i)

INDEPENDENT AUDITORS' REPORT

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

Under date of March 20, 1996, we reported on the balance sheets of Aetna
Insurance Company of America as of December 31, 1995 and 1994, 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, 1995, as included
herein. In connection with our audits of the aforementioned financial
statements, we also have audited the related financial statement schedules as
listed in the accompanying index. These financial statement schedules are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statement schedules based on our audits.

In our opinion, such financial statement schedules, when considered in relation
to the basic financial statements taken as a whole, present fairly, in all
material respects, the information set forth therein.

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.

/s/ KPMG Peat Marwick LLP

Hartford, Connecticut
March 20, 1996

<PAGE>

EXHIBIT 16(b)(ii)

AETNA INSURANCE COMPANY OF AMERICA
(A wholly owned subsidiary of Aetna Life Insurance and Annuity Company)

SCHEDULE I

Summary of Investments - Other than Investments in Affiliates

December 31, 1995
(thousands)

Amount at
Which Shown
in the
Type of Investment Cost Value* Balance Sheet
------------------ ---- ------ -------------

Debt Securities:
U.S. Treasury securities $7,953.0 $8,187.4 $8,187.4
-------- -------- --------

Total Investments - other than
investments in affiliates $7,953.0 $8,187.4 $8,187.4
-------- -------- --------

* See Notes 1, 2 and 9 to Financial Statements.

<PAGE>

EXHIBIT 16(b)(iii)

AETNA INSURANCE COMPANY OF AMERICA
(A wholly owned subsidiary of Aetna Life Insurance and Annuity Company)

SCHEDULE III

Supplementary Insurance Information

As of and for the years ended December 31, 1995, 1994 and 1993

(Thousands)

Policy-
Deferred Unpaid holders' Other income
policy Future claims and funds left Net (including
acquisition policy Unearned claim with the Premium investment realized capital
costs benefits premiums expenses company revenue income(1) gains and losses)
- - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1995 $ 2066.4 $ - $ - $ - $ - $ - $ 721.0 $ 141.0
- - ----
--------------------------------------------------------------------------------------------------------------------------

1994 $ - $ - $ - $ - $ - $ - $ 619.3 $ -
- - ----
--------------------------------------------------------------------------------------------------------------------------

1993 $ - $ - $ - $ - $ - $ - $ 560.0 $ -
- - ----
--------------------------------------------------------------------------------------------------------------------------

(Thousands)

Amortization
of deferred Current
policy Other & Future
acquisition operating benefits
costs expenses expenses
- - ----------------------------------------------------------
<S> <C> <C> <C>
1995 $ - $ 605.2 $ -

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

1994 $ - $ 83.0 $ -
-------------------------------------------

1993 $ - $ 79.5 $ -

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

</TABLE>

(1) The allocation of net investment income is based upon the investment year
method or specific identification of certain portfolios within specific
segments.