AUSA ENDEAVOR VARIABLE ANNUITY ACCOUNT, 485BPOS, 1995-04-27

AUSA ENDEAVOR VARIABLE ANNUITY ACCOUNT
485BPOS, 1995-04-27

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<PAGE>

As filed with the Securities and Exchange Commission on April 27,
1995

Registration No. 33- 83560
811-8750
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C 20549

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REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Pre-Effective Amendment No.___

Post-Effective Amendment No. 2 X
--

and

REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940

Amendment No. 3 X
--

AUSA ENDEAVOR VARIABLE ANNUITY ACCOUNT
--------------------------------------
(Exact Name of Registrant)

AUSA LIFE INSURANCE COMPANY, INC.
---------------------------------
(Name of Depositor)

666 Fifth Avenue, New York, New York 10103
(Address of Depositor's Principal Executive Offices)

Depositor's Telephone Number, including Area Code

(212) 246-5234

Craig D. Vermie, Esquire
AUSA Life Insurance Company, Inc.
4333 Edgewood Road, N.E.
Cedar Rapids, Iowa 52499
(Name and Address of Agent for Service)

Copy to:

Frederick R. Bellamy, Esquire
Sutherland, Asbill & Brennan
1275 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-2404
AUSAENDC

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<PAGE>

DECLARATION PURSUANT TO RULE 24f-2

Pursuant to Rule 24f-2 under the Investment Company Act of 1940, the
Registrant declares that a notice pursuant to Rule 24f-2 for the year
ended December 31, 1994 was filed on February 27, 1995.

______________

It is proposed that this filing will become effective:

______________

_____ immediately upon filing pursuant to paragraph (b) of Rule
485.

__X___ on May 1, 1995 pursuant to paragraph (b) of Rule 485.

_____ 60 days after filing pursuant to paragraph (a)(i) of Rule
485.

_____ on ______ pursuant to paragraph (a)(i) of Rule
485.

_____ 75 days after filing pursuant to paragraph (a)(i)

_____ on _____________ pursuant to paragraph (a)(ii) of Rule
485.

If appropriate, check the following box:

_____ this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

2
<PAGE>

CROSS REFERENCE SHEET
Pursuant to Rule 495

Showing Location in Part A (Prospectus) and
Part B (Statement of Additional Information)
of Registration Statement of Information Required by Form N-4
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PART A
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<TABLE>
<CAPTION>
Item of Form N-4 Prospectus Caption
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<S> <C>
1. Cover Page ...................... Cover Page

2. Definitions ..................... Definitions

3. Synopsis ........................ Summary; Historical Performance
Data

4. Condensed Financial Information Financial Statements

5. General
(a) Depositor ................... AUSA Life
............................. Insurance Company, Inc.
(b) Registrant .................. The Mutual Fund Account
(c) Portfolio Company ........... Underlying Funds
(d) Fund Prospectus ............. Underlying Funds
(e) Voting Rights ............... Voting Rights

6. Deductions and Expenses
(a) General ..................... Charges and Deductions
(b) Sales Load % ................ Contingent Deferred Sales Charge
(c) Special Purchase Plan ....... N/A
(d) Commissions ................. Distributor of the Policies
(e) Expenses - Registrant ....... N/A
(f) Fund Expenses ............... Expenses Including Investment
Advisory Fees
(g) Organizational Expenses ..... N/A

7. Policies
(a) Persons with Rights ......... The Policy; Election of Annuity
Option; Determination of Annuity
Payments; Annuity Commencement
Date; Ownership of the Policy
Voting Rights
(b) (i) Allocation of Premium
Payments .............. Allocation of Premiums
(ii) Transfers ............. Transfers
(iii) Exchanges ............. N/A
(c) Changes ..................... Addition, Deletion or
Substitution of Investments;
Election of Annuity Option;
Annuity Commencement Date;
</TABLE>

3
<PAGE>

<TABLE>
<S> <C>
Beneficiary; Ownership of the
Policy
(d) Inquiries ................... Summary
8. Annuity Period .................. Annuity Options

9. Death Benefit ................... Death of Annuitant Prior to
Annuity Commencement Date

10. Purchase and Policy Values ......
(a) Purchases ................... Policy Application and Issuance
of Policies; Premiums
(b) Valuation ................... Policy Value; The Mutual Fund
Account Value
(c) Daily Calculation ........... The Mutual Fund Account Value
(d) Underwriter ................. Distributor of the Policies

11. Redemptions
(a) By Owners ................... Surrenders
By Annuitant ................ N/A
(b) Texas ORP ................... Restrictions Under the Texas
Optional Retirement Program
(c) Check Delay ................. Payment not Honored by Bank
(d) Lapse ....................... N/A
(e) Free Look ................... Summary

12. Taxes ........................... Certain Federal Income Tax
Consequences

13. Legal Proceedings ............... Legal Proceedings

14. Table of Contents for the
Statement of Statement of Additional
Additional Information .......... Information
<CAPTION>
PART B
------

Item of Form N-4 Statement of Additional
- ---------------- Information Caption
-------------------
<S> <C>
15. Cover Page ...................... Cover Page

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

17. General Information
and History ..................... (Prospectus) AUSA
Life Insurance Company, Inc.
18. Services ........................
(a) Fees and Expenses
of Registrant .............. N/A
(b) Management Policies ........ N/A
(c) Custodian .................. Custody of Assets
Independent
</TABLE>

4
<PAGE>

<TABLE>
<S> <C>
Auditors ................... Independent Auditors
(d) Assets of Registrant ....... Custody of Assets
(e) Affiliated Person .......... N/A
(f) Principal Underwriter ...... Distribution of the Policies
19. Purchase of Securities
Being Offered ................... Distribution of the Policies
Offering Sales Load ............. N/A

20. Underwriters .................... Distribution of the Policies;
(Prospectus) Distributor of the
Policies

21. Calculation of Performance
Data ............................ Calculation of Yields and Total
Returns; Other Performance Data

22. Annuity Payments ................ (Prospectus) Election of Annuity
Option; (Prospectus)
Determination of Annuity Payments

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

PART C -- OTHER INFORMATION
---------------------------
<TABLE>
<CAPTION>
Item of Form N-4 Part C Caption
- ---------------- --------------
<S> <C>
24. Financial Statements
and Exhibits .................... Financial Statements and Exhibits
(a) Financial Statements ....... Financial Statements
(b) Exhibits ................... Exhibits

25. Directors and Officers of ....... Directors and Officers of the
the Depositor Depositor

26. Persons Controlled By or Under .. Persons Controlled By or Under
Common Control with the Common Control with the
Depositor or Registrant Depositor or Registrant

27. Number of Policyowners .......... Number of Policyowners

28. Indemnification ................. Indemnification

29. Principal Underwriters .......... Principal Underwriters

30. Location of Accounts
and Records ..................... Location of Accounts and Records

31. Management Services ............. Management Services

32. Undertakings .................... Undertakings

Signature Page .................. Signatures

5
</TABLE>
<PAGE>

PROSPECTUS May 1, 1995
- ----------
THE ENDEAVOR VARIABLE ANNUITY

Issued Through

AUSA ENDEAVOR VARIABLE ANNUITY ACCOUNT

AUSA LIFE INSURANCE COMPANY, INC.

This Prospectus describes the Endeavor Variable Annuity (the "Policy"), a
Flexible Premium Variable Annuity offered by AUSA Life Insurance Company, Inc.
The Policy is designed to aid in long-term financial planning and provides for
the accumulation of capital by individuals on a tax-deferred basis for
retirement or other long-term purposes. The Policy may be purchased with a
minimum initial Premium Payment of $5,000 if the Policy is purchased on a non-
tax qualified basis ("Nonqualified Policy") or $1,000 if the Policy is
purchased and used in connection with a plan qualifying for favorable income
tax treatment ("Qualified Policy") ($50 if the Policy is purchased and used in
connection with a Tax Deferred 403(b) Annuity). An Owner generally may make
additional Premium Payments of at least $500 each (or $50 for a Policy used in
connection with a Tax Deferred 403(b) Annuity) at any time before the Annuity
Commencement Date.

The Owner may allocate Premium Payments to one or more Subaccounts of the
AUSA Endeavor Variable Annuity Account (the "Mutual Fund Account"), to a Fixed
Account which guarantees a minimum fixed return, or to a combination of these
(the Fixed Account and the Subaccounts of the Mutual Fund Account are the
"Investment Options" available under the Policies). The Mutual Fund Account
currently has nine different Subaccounts (the "Subaccounts"). Assets of each
Subaccount are invested in a corresponding Portfolio of a mutual fund, the WRL
Growth Portfolio of the WRL Series Fund, Inc., managed by Janus Capital
Corporation, and the Endeavor Series Trust (the "Underlying Funds"). The
Underlying Funds currently have nine Portfolios available for the Policies:
the WRL Growth Portfolio, managed by Janus Capital Corporation; the Managed
Asset Allocation Portfolio; the Money Market Portfolio; the T. Rowe Price
International Stock Portfolio; the Quest for Value Equity Portfolio; the Quest
for Value Small Cap Portfolio; the U.S. Government Securities Portfolio; the
T. Rowe Price Equity Income Portfolio; and the T. Rowe Price Growth Stock
Portfolio. The Underlying Funds are described in separate prospectuses that
accompany this Prospectus.

THE POLICY IS NOT A DEPOSIT OR OBLIGATION OF, OR GUARANTEED OR ENDORSED BY, ANY
BANK OR DEPOSITORY INSTITUTION AND THE POLICY IS NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER AGENCY, AND INVOLVES
INVESTMENT RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.

THIS PROSPECTUS MUST BE ACCOMPANIED OR PRECEDED BY A CURRENT PROSPECTUS FOR THE
ENDEAVOR SERIES TRUST AND FOR THE WRL GROWTH PORTFOLIO OF THE WRL SERIES FUND,
INC. CERTAIN PORTFOLIOS MAY NOT BE AVAILABLE IN ALL STATES.

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

The Policy Value will vary in accordance with the investment performance of
the Subaccounts selected by the Owner. Therefore, the Owner bears the entire
investment risk under this Policy for all amounts allocated to the Mutual Fund
Account. Amounts allocated to the Fixed Account are guaranteed by AUSA Life
Insurance Company, Inc. ("AUSA") and will earn a specified rate of interest
declared periodically.

The Policies provide for monthly annuity payments to be made by AUSA for the
life of the Annuitant or for some other period, beginning on the Annuity
Commencement Date selected by the Owner. Prior to the Annuity Commencement
Date, the Owner can transfer amounts among the Investment Options, that is,
between the Fixed Account or Subaccounts of the Mutual Fund Account (some
prohibitions and restrictions apply, especially on transfers out of the Fixed
Account). The Owner can also elect to surrender all or any portion of the Cash
Value in exchange for a cash withdrawal payment from AUSA; however, withdrawals
may be subject to a 10% federal tax penalty if made before age 59 1/2, taxable,
subject to a Contingent Deferred Sales Charge, and withdrawals from the Fixed
Account may be delayed.

This Prospectus sets forth the information that a prospective investor should
consider before investing in a Policy. A Statement of Additional Information
about the Policy and the Mutual Fund Account, which has the same date as this
Prospectus, has been filed with the Securities and Exchange Commission and is
incorporated herein by reference. The Statement of Additional Information dated
May 1, 1995 is available at no cost to any person requesting a copy by writing
AUSA at the Service Office or by calling 1-800-525-6205. The table of contents
of the Statement of Additional Information is included at the end of this
Prospectus.

This Prospectus and the Statement of Additional Information generally
describe only the Policies and the Mutual Fund Account, except when the Fixed
Account is specifically mentioned.

Service Office: Administrative Office:
Financial Markets Division-- AUSA Life Insurance
Variable Annuity Dept. Company, Inc.
4333 Edgewood Road, N.E. 666 Fifth Avenue, 25th floor
Cedar Rapids, IA 52499 New York, NY 10103

Please Read This Prospectus Carefully And Retain it For Future Reference.

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO DEALER, SALESPERSON OR OTHER PERSON
IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION
WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON.

Quest for Value is a service mark of Oppenheimer Capital.

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<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
DEFINITIONS............................................................... 4
SUMMARY................................................................... 7
CONDENSED FINANCIAL INFORMATION........................................... 15
FINANCIAL STATEMENTS...................................................... 16
HISTORICAL PERFORMANCE DATA............................................... 16
Standardized Performance Data........................................... 16
Hypothetical Performance Data of Subaccounts............................ 17
T. Rowe Price Equity Income Subaccount and T. Rowe Price Growth Stock
Subaccount............................................................ 17
T. Rowe Price International Stock Subaccount............................ 18
Non-Standardized Performance Data....................................... 19
PUBLISHED RATINGS......................................................... 20
AUSA LIFE INSURANCE COMPANY, INC.......................................... 20
THE ENDEAVOR ACCOUNTS..................................................... 21
The Mutual Fund Account................................................. 21
The Fixed Account....................................................... 25
Transfers............................................................... 26
Dollar Cost Averaging................................................... 27
THE POLICY................................................................ 27
Policy Application and Issuance of Policies............................. 27
Premium Payments........................................................ 28
Policy Value............................................................ 29
Non-participating Policy................................................ 30
DISTRIBUTIONS UNDER THE POLICY............................................ 30
Surrenders.............................................................. 30
Systematic Withdrawal Plan.............................................. 31
Annuity Payments........................................................ 32
Annuity Commencement Date............................................. 32
Election of Payment Option............................................ 32
Premium Tax........................................................... 33
Supplementary Policy.................................................. 33
Annuity Payment Options................................................. 33
Death Benefit........................................................... 37
Death of Annuitant Prior to Annuity Commencement Date................. 37
Death of Annuitant On or After Annuity Commencement Date.............. 38
Beneficiary........................................................... 38
Death of Owner.......................................................... 38
Restrictions Under Section 403(b) Plans................................. 38
CHARGES AND DEDUCTIONS.................................................... 39
Contingent Deferred Sales Charge........................................ 39
Mortality and Expense Risk Charge....................................... 40
Administrative Charges.................................................. 41
Premium Taxes........................................................... 41
Federal, State and Local Taxes.......................................... 42
Transfer Charge......................................................... 42
Other Expenses Including Investment Advisory Fees....................... 42
Employee and Agent Purchases............................................ 42
CERTAIN FEDERAL INCOME TAX CONSEQUENCES................................... 42
Tax Status of the Policy................................................ 43
Taxation of Annuities................................................... 44
DISTRIBUTOR OF THE POLICIES............................................... 48
VOTING RIGHTS............................................................. 49
LEGAL PROCEEDINGS......................................................... 50
STATEMENT OF ADDITIONAL INFORMATION....................................... 51
</TABLE>

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<PAGE>

DEFINITIONS

Accumulation Unit--An accounting unit of measure used in calculating the
Policy Value.

Administrative Office--666 Fifth Avenue, 25th Floor, New York, New York
10103.

Annuitant--The person entitled to receive Annuity Payments after the Annuity
Commencement Date and during whose life any Annuity Payments involving life
contingencies will continue.

Annuity Commencement Date--The date upon which Annuity Payments are to
commence.

Annuity Payment Option or Payment Option--A method of receiving a stream of
Annuity Payments.

Annuity Purchase Value--An amount equal to the Policy Value for the Valuation
Period which ends immediately preceding the Annuity Commencement Date reduced
by any applicable premium or similar taxes.

Annuity Unit--An accounting unit of measure used in the calculation of the
amount of the second and each subsequent Variable Annuity Payment.

AUSA--AUSA Life Insurance Company, Inc., the issuer of the Policies.

Beneficiary--Before the Annuity Commencement Date, the person to whom the
death proceeds will be paid if the Annuitant, who is also the Owner, dies.
After the Annuity Commencement Date, the person to whom payments will be made
if the Annuitant dies. In the event the Annuitant, who is not the Owner, dies
prior to the Annuity Commencement Date, the Owner will become the Annuitant
unless the Owner specifically requests on the application or in writing that
the death benefit be paid upon the Annuitant's death and AUSA agrees to such an
election.

Business Day--A day when the New York Stock Exchange is open for business and
that is a regular business day of the Endeavor Service Office.

Cash Value--The Policy Value less the Contingent Deferred Sales Charge, if
any, and less any applicable premium taxes.

Code--The Internal Revenue Code of 1986, as amended.

Current Interest Guarantee--AUSA's guarantee to pay a declared Current
Interest Rate on amounts under a Policy allocated to the Fixed

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<PAGE>

Account. A particular Current Interest Guarantee will be in effect for at least
one year.

Current Interest Guarantee Period--The period during which a Current Interest
Guarantee is in effect.

Current Interest Rate--The interest rate currently guaranteed to be paid on
amounts under a Policy allocated to the Fixed Account. This interest rate will
always equal or exceed a minimum of 4%.

Date of Issue--The date the Policy is issued, as shown on the Policy Schedule
Page.

Due Proof of Death--A certified copy of a death certificate, a certified copy
of a decree of a court of competent jurisdiction as to the finding of death, a
written statement by the attending physician, or any other proof satisfactory
to AUSA will constitute Due Proof of Death.

Fixed Account--All of the assets of AUSA that are not in separate accounts.

Fixed Annuity Payments--Payments made pursuant to an Annuity Payment Option
which do not fluctuate in amount.

Investment Options--The Fixed Account and any of the Subaccounts of the
Mutual Fund Account.

Mutual Fund Account--The AUSA Endeavor Variable Annuity Account, a separate
account established and registered as a unit investment trust under the
Investment Company Act of 1940 to which Premium Payments under the Policies may
be allocated and which invests in the WRL Growth Portfolio of the WRL Series
Fund, Inc., managed by Janus Capital Corporation, and the Endeavor Series
Trust.

Nonqualified Policy--A Policy other than a Qualified Policy.

Policy--One of the variable annuity policies offered by this Prospectus.

Policy Anniversary--Each anniversary of the Date of Issue.

Policy Owner or Owner--The person who may exercise all rights and privileges
under the Policy. The Policy Owner during the lifetime of the Annuitant and
prior to the Annuity Commencement Date is the person designated as the Policy
Owner in the application or a Successor Owner; the Policy Owner on and after
the Annuity Commencement Date is the Annuitant; and the Policy Owner after the
death of the Annuitant who is also the Owner (unless the Owner has elected in
writing that the death benefit be paid upon the Annuitant's death and AUSA
agrees to such an election), is the Beneficiary.

Policy Value--The sum of the value of all Accumulation Units credited to a
Policy for any particular Valuation Period in the Mutual Fund Account, plus the
value in the Fixed Account.

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<PAGE>

Policy Year--A Policy Year begins on the Date of Issue and each anniversary
of the Date of Issue.

Premium Payment--An amount paid to AUSA by the Policy Owner or on the Policy
Owner's behalf as consideration for the benefits provided by the Policy.

Qualified Policy--A Policy that has received favorable tax treatment under
Section 401, 403, 408, 457 or any other similar provision of the Code.

Service Office--Financial Markets Division--Variable Annuity Dept., 4333
Edgewood Road, N.E., Cedar Rapids, IA 52499.

Subaccount--A segregated account within the Mutual Fund Account which invests
in a specified Portfolio of the Underlying Funds.

Successor Policy Owner--A person appointed by the Policy Owner to succeed to
ownership of the Policy in the event of the death of the Policy Owner who is
not the Annuitant before the Annuity Commencement Date.

Underlying Funds--The WRL Growth Portfolio of the WRL Series Fund, Inc.,
managed by Janus Capital Corporation, and the Endeavor Series Trust.

Valuation Period--The period of time from one determination of Accumulation
Unit and Annuity Unit values to the next subsequent determination of values.
Such determination shall be made on each Business Day.

Variable Annuity Payments--Payments made pursuant to an Annuity Payment
Option which fluctuate as to dollar amount or payment term in relation to the
investment performance of the specified Subaccounts within the Mutual Fund
Account.

Written Notice or Request--Written notice, signed by the Policy Owner, that
gives AUSA the information it requires and is received at the Service Office.

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<PAGE>

THE ENDEAVOR VARIABLE ANNUITY

SUMMARY

THE POLICY

The Endeavor Variable Annuity is a Flexible Premium Variable Annuity which
can be purchased on a non-tax qualified basis ("Nonqualified Policy") or with
the proceeds from certain plans qualifying for favorable federal income tax
treatment ("Qualified Policy"). The Owner allocates the Premium Payments among
the two Endeavor Accounts of AUSA Life Insurance Company, Inc. ("AUSA"): the
AUSA Endeavor Variable Annuity Account (the "Mutual Fund Account") and the
Fixed Account.

THE ACCOUNTS

The Mutual Fund Account. The Mutual Fund Account is a separate account of
AUSA, which invests exclusively in shares of the WRL Growth Portfolio of the
WRL Series Fund, Inc., managed by Janus Capital Corporation, and the eight
portfolios of the Endeavor Series Trust (collectively the "Underlying Funds").
The Endeavor Series Trust is a mutual fund managed by Endeavor Investment
Advisers, a general partnership between Endeavor Management Co. and AUSA
Financial Markets, Inc., an affiliate of AUSA. Endeavor Investment Advisers
contracts with TCW Funds Management, Inc. (a subsidiary of The TCW Group,
Inc.), T. Rowe Price Associates, Inc., Quest for Value Advisors (a subsidiary
of Oppenheimer Capital), The Boston Company Asset Management, Inc. (an indirect
wholly-owned subsidiary of Mellon Bank Corporation) and Rowe Price-Fleming
International, Inc. for investment advisory services. The WRL Growth Portfolio,
managed by Janus Capital Corporation, is a portfolio within the WRL Series
Fund, Inc. which is a mutual fund whose investment adviser is Western Reserve
Life Assurance Co. of Ohio ("Western Reserve"), an affiliate of AUSA. Western
Reserve contracts with Janus Capital Corporation as a sub-adviser to the WRL
Growth Portfolio for investment advisory services. The Underlying Funds
currently have nine available Portfolios: the WRL Growth Portfolio, managed by
Janus Capital Corporation; the Managed Asset Allocation Portfolio; the Money
Market Portfolio; the T. Rowe Price International Stock Portfolio (formerly the
Global Growth Portfolio); the Quest for Value Equity Portfolio; the Quest for
Value Small Cap Portfolio; the U.S. Government Securities Portfolio; the T.
Rowe Price Equity Income Portfolio; and the T. Rowe Price Growth Stock
Portfolio (the "Portfolios"). Each of the nine Subaccounts of the Mutual Fund
Account invests solely in a corresponding Portfolio of the Underlying Funds.
Because Policy Values may depend on the investment experience of the selected
Subaccounts, the Owner bears the entire investment risk with respect to Premium
Payments allocated to, and amounts transferred to, the Mutual Fund Account.
(See the "Mutual Fund Account," p. 21.)

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<PAGE>

The Fixed Account. The Fixed Account guarantees safety of principal and a
minimum 4% return on Premium Payments allocated to, and amounts transferred to,
the Fixed Account. AUSA may, in its sole discretion, declare a higher Current
Interest Rate. A Current Interest Rate is guaranteed for at least one year.
(See "The Fixed Account," p. 25.)

PREMIUM PAYMENTS

A Nonqualified Policy may be purchased with an initial Premium Payment of at
least $5,000, and a Qualified Policy generally may be purchased with an initial
Premium Payment of at least $1,000, but a Policy purchased and used in
connection with a Tax Deferred 403(b) Annuity may be purchased with an initial
Premium Payment of at least $50. An Owner may make additional Premium Payments
of at least $500 each under either a Nonqualified Policy or a Qualified Policy,
or $50 each under a Policy used in connection with a Tax Deferred 403(b)
Annuity, at any time before the Annuity Commencement Date. There is nothing
deducted from Premium Payments, so all funds are invested immediately. (But see
"Contingent Deferred Sales Charge," p. 39.)

On the Date of Issue, the initial Premium Payment is allocated among the
Investment Options (that is, among the Fixed Account and/or the Subaccounts of
the Mutual Fund Account) in accordance with the allocation percentages
specified by the Owner in the Policy application. Any allocation must be in
whole percents, and the total allocation must equal 100%. Allocations for
additional Premium Payments may be changed by sending Written Notice to AUSA's
Service Office. (See "Premiums Payments," p. 28.)

TRANSFERS

An Owner can transfer Policy Values from one Account or Subaccount to another
Account or Subaccount prior to the Annuity Commencement Date, with certain
limitations. The minimum amount which may be transferred is the lesser of $500
or the entire Account or Subaccount Value. However, following a transfer out of
a particular Account or Subaccount, at least $500 must remain in that Account
or Subaccount. Transfers out of the Mutual Fund Account currently may be made
as often as the Owner wishes by sending Written Notice to the Service Office.

Transfers from the One Year Option Fixed Account (see "The Fixed Account", p.
25), except through Dollar Cost Averaging, are not allowed. Transfers from the
Three Year Option of the Fixed Account are subject to a yearly limit equal to
the greater of 25% of the current policy value in the Three Year Option Fixed
Account, or the amount transferred out of the Three Year Option Fixed Account
during the prior Policy Year.

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<PAGE>

A charge may be imposed for any transfers in excess of 12 per Policy Year,
but currently there is no charge for any transfers. (See "Transfers," p. 26.)

SURRENDERS

The Owner may elect to surrender all or a portion of the Cash Value ($500
minimum) in exchange for a cash withdrawal payment from AUSA at anytime prior
to the earlier of the Annuitant's death or the Annuity Commencement Date. The
Cash Value equals the Policy Value less any applicable Contingent Deferred
Sales Charge (described below) and any applicable premium taxes. A surrender
request must be made by Written Request, and a request for a partial surrender
must specify the Accounts or Subaccounts from which the withdrawal is
requested. There is currently no limit on the frequency or timing of
withdrawals. (See "Surrenders," p. 30.) In addition to the Contingent Deferred
Sales Charge and any applicable premium taxes, surrenders may be subject to
income taxes and a 10% tax penalty.

CHARGES AND DEDUCTIONS

Contingent Deferred Sales Charge. In order to permit investment of the entire
Premium Payment, AUSA does not deduct sales or other charges at the time of
investment. However, a Contingent Deferred Sales Charge of up to 7% of the
amount withdrawn is imposed on certain full or partial withdrawals of Premium
Payments in order to cover expenses relating to the sale of the Policies. The
applicable Contingent Deferred Sales Charge is based on the period of time
elapsed since payment of the Premium Payment(s) being withdrawn, and there will
be no Charge imposed seven or more years after the Premium Payment(s) was paid.
For purposes of determining the applicable Contingent Deferred Sales Charge,
Premium Payments are considered to be withdrawn on a "first in--first out"
basis. (See "Contingent Deferred Sales Charge," p. 39.) Amounts withdrawn in
the first Policy Year, or the second and all subsequent withdrawals in any
other Policy Year, or in excess of 10% of the Policy Value, even if it is the
first withdrawal in any Policy Year, may be subject to a Contingent Deferred
Sales Charge (of up to 7%). (Put another way, after the first Policy Year, up
to 10% of the Policy Value may be withdrawn without a Contingent Deferred Sales
Charge if it is the first withdrawal in the Policy Year). Amounts applied to
provide an Annuity, if applied during the first five Policy Years and applied
under certain Payment Options, may also be subject to a Contingent Deferred
Sales Charge. See ("Surrenders," p. 30.)

Account Charges. AUSA deducts a daily charge equal to a percentage of the net
assets in the Mutual Fund Account for the mortality and expense risks assumed
by AUSA. The effective annual rate of this charge is 1.25% of the value of the
Account's net assets. (See "Mortality and Expense Risk Charge," p. 40.)

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<PAGE>

AUSA also deducts a daily Administrative Charge from the net assets of the
Mutual Fund Account to partially cover expenses incurred by AUSA in connection
with the administration of the Account and the Policies. The effective annual
rate of this charge is currently .15% of the value of each Account's net
assets. This charge is guaranteed never to exceed .30%. (See "Administrative
Charges," p. 41.)

The account charges for mortality and expense risks and administrative
expenses are guaranteed not to exceed their current level of a total of 1.40%.

Policy Charges. There is also an annual Policy Maintenance Charge each year
for Policy maintenance and related administrative expenses. This charge is the
lesser of 2% of the Policy Value or $35 per year and is deducted only from the
Mutual Fund Account. For Policies issued on or after May 1, 1995, this charge
is waived if the sum of the Premium Payments made less the sum of all partial
withdrawals is at least $50,000 on the Policy Anniversary. THIS CHARGE WILL NOT
BE INCREASED IN THE FUTURE. (See "Administrative Charges," p. 41.)

Taxes. AUSA may incur premium taxes relating to the Policies. When permitted
by state law, AUSA will not deduct any premium taxes related to a particular
Policy from the Policy Value until withdrawal of all Policy Value or until the
Annuity Commencement Date. (See "Premium Taxes," p. 41.)

No charges are currently made against any of the Accounts for federal, state,
or local income taxes. Should AUSA determine that any such taxes may be imposed
with respect to any of the Accounts, AUSA may deduct such taxes from amounts
held in the relevant Account. (See "Federal, State and Local Taxes," p. 42.)

Charges Against the Underlying Funds. The value of the net assets of the
Subaccounts of the Mutual Fund Account will reflect the investment advisory fee
and other expenses incurred by the Underlying Funds.

Expense Data. The charges and deductions are summarized in the following
tables. This tabular information regarding expenses assumes that the entire
Policy Value is in the Mutual Fund Account.

- 10 -
<PAGE>

<TABLE>
<CAPTION>
T. ROWE QUEST QUEST T. ROWE T. ROWE
MANAGED PRICE FOR FOR U.S. PRICE PRICE
ASSET MONEY INTERNATIONAL WRL VALUE VALUE GOVERNMENT EQUITY GROWTH
ALLOCATION MARKET STOCK GROWTH EQUITY SMALL CAP SECURITIES INCOME STOCK
---------- ------ ------------- ------ ------ --------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
POLICY OWNER TRANSACTION
EXPENSES/1/
Sales Load On Purchase
Payments.............. 0 0 0 0 0 0 0 0 0
Maximum Contingent
Deferred Sales Charge
(as a % of Premium
Payment
Surrendered)/2/....... 7% 7% 7% 7% 7% 7% 7% 7% 7%
Surrender Fees......... 0 0 0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------
Annual Policy Fee $35 Per Policy
--------------------------------------------------------------------------------------------------
Transfer Fee First 12 Transfers Per Year: NO FEE
More than 12 in One Year: Currently no fee
MUTUAL FUND ACCOUNT
ANNUAL EXPENSES (as a
percentage of account
value)
Mortality and Expense
Risk Fees............. 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25%
Administrative Charge.. 0.15% 0.15% 0.15% 0.15% 0.15% 0.15% 0.15% 0.15% 0.15%
---- ---- ---- ---- ---- ---- ---- ---- ----
Total Mutual Fund
Account Annual
Expenses.............. 1.40% 1.40% 1.40% 1.40% 1.40% 1.40% 1.40% 1.40% 1.40%
UNDERLYING FUNDS ANNUAL
EXPENSES (as a
percentage of average
net assets)
Management Fees ....... 0.75% 0.50% 0.90% 0.80% 0.80% 0.80% 0.65% 0.80% 0.80%
Other Expenses......... 0.15% 0.35% 0.26% 0.04% 0.22% 0.23% 0.13% 0.50% 0.50%
---- ---- ---- ---- ---- ---- ---- ---- ----
Total Underlying Funds
Annual Expenses/3/.... 0.90% 0.85% 1.16% 0.84% 1.02% 1.03% 0.78%(/3/) 1.30%(/4/) 1.30%(/4/)
</TABLE>
- --------------------------------
/1/ The Contingent Deferred Sales Charge and Transfer Fee, if any is imposed,
apply to each Policy, regardless of how Policy Value is allocated among the
Mutual Fund Account and the Fixed Account. The Annual Policy Fee and Mutual
Fund Account Annual Expenses do not apply to the Fixed Account. (See "Other
Expenses Including Investment Advisory Fees," p.42.)
/2/ The Contingent Deferred Sales Charge is decreased based on the Policy year
in which the withdrawal is made, from 7% in the Policy year in which the
Premium payment was made to 0% in the eighth Policy Year after the Premium
payment was made.

- 11 -
<PAGE>

/3/ During 1994 Endeavor Series Trust's investment manager ("Manager") waived
payment of a portion of its management fees and reimbursed other expenses
for certain of the Underlying Funds. Without the waiver, the actual
management fee and other expenses on an annualized basis were 1.83% of
average net assets of the U.S. Government Securities Portfolio. The Manager
has agreed, until terminated by the Manager, to assume expenses of the
Portfolios that exceed the following rates: Managed Asset Allocation--1.25%;
Money Market--0.99%; T. Rowe Price International Stock--1.53%; Quest for
Value Equity--1.30%; Quest for Value Small Cap--1.30%; U.S. Government
Securities--1.00%; T. Rowe Price Equity Income--1.30%; T. Rowe Price Growth
Stock--1.30%.
/4/ The Underlying Fund expenses for the T. Rowe Price Equity Income Portfolio,
and T. Rowe Price Growth Stock Portfolio are estimates for the first year of
operations.

Examples

An Owner would pay the following expenses on a $1,000 investment, assuming a
5% annual return on assets:

1. If the Policy is surrendered at the end of the applicable time period:*

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Managed Asset Allocation Portfolio.............. $94 $125 $158 $274
Money Market Portfolio.......................... $94 $123 $156 $269
T. Rowe Price International Stock Portfolio..... $97 $133 $171 $299
WRL Growth Portfolio............................ $94 $123 $155 $268
Quest for Value Equity Portfolio................ $96 $128 $164 $285
Quest for Value Small Cap Portfolio............. $96 $129 $165 $286
U.S. Government Securities Portfolio............ $93 $121 $151 $258
T. Rowe Price Equity Income Portfolio........... $98 $137 $179 $317
T. Rowe Price Growth Stock Portfolio............ $98 $137 $179 $317

2. If the Policy is annuitized at the end of the applicable time period:*

Managed Asset Allocation Portfolio.............. $24 $ 75 $128 $274
Money Market Portfolio.......................... $24 $ 73 $126 $269
T. Rowe Price International Stock Portfolio..... $27 $ 83 $141 $299
WRL Growth Portfolio............................ $24 $ 73 $125 $268
Quest for Value Equity Portfolio................ $26 $ 78 $134 $285
Quest for Value Small Cap Portfolio............. $26 $ 79 $135 $286
U.S. Government Securities Portfolio............ $23 $ 71 $121 $258
T. Rowe Price Equity Income Portfolio........... $28 $ 87 $149 $317
T. Rowe Price Growth Stock Portfolio............ $28 $ 87 $149 $317
</TABLE>

- 12 -
<PAGE>

3. If the Policy is not surrendered or annuitized:

<TABLE>
<S> <C> <C> <C> <C>
Managed Asset Allocation Portfolio........................... $24 $ 75 $128 $274
Money Market Portfolio....................................... $24 $ 73 $126 $269
T. Rowe Price International Stock Portfolio.................. $27 $ 83 $141 $299
WRL Growth Portfolio......................................... $24 $ 73 $125 $268
Quest for Value Equity Portfolio............................. $26 $ 76 $134 $285
Quest for Value Small Cap Portfolio.......................... $26 $ 79 $135 $286
U.S. Government Securities Portfolio......................... $23 $ 71 $121 $258
T. Rowe Price Equity Income Portfolio........................ $28 $ 87 $149 $317
T. Rowe Price Growth Stock Portfolio......................... $28 $ 87 $149 $317
</TABLE>

The above tables are intended to assist the Owner in understanding the costs
and expenses that will be borne, directly or indirectly. These include the
expenses of the Underlying Funds. See "Charges and Deductions," p. 39, and the
Underlying Funds' prospectuses. In addition to the expenses listed above,
premium taxes may be applicable.

THE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES, AND ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN. The
figures and data for the Underlying Fund annual expenses have been provided by
Western Reserve Life Assurance Co. of Ohio and Endeavor Investment Advisers,
and while AUSA does not dispute these figures, AUSA does not guaranty their
accuracy.

In these examples, the $35 Annual Policy Fee is reflected as a charge of
0.0979% based on an average Policy Value of $35,742.
- ----------------------------------
* If the Policy is annuitized during the first five Policy Years, under a
period certain only payment option, with payments of less than five years,
then the expenses would be the same as if the Policy were surrendered.

DEATH BENEFIT

In the event that the Annuitant who is not the Owner dies prior to the
Annuity Commencement Date, the Owner will become the Annuitant unless the
Owner specifically requests on the application or in writing that the death
benefit be paid upon the Annuitant's death and AUSA agrees to such an
election. Upon receipt of proof that the Annuitant, who is the Owner, has died
before the Annuity Commencement Date, the Death Benefit is calculated and is
payable to the Beneficiary when we receive an election of the method of
settlement and return of the Policy. During the first seven policy years, the
Death Benefit will be the greater of (a) the Policy Value on the date proof of
death and election of the method of settlement are received; or (b) the total
Premiums paid less any Adjusted Partial Withdrawals (see page 37) taken. After
the seventh Policy Anniversary, the Death Benefit amount will be the greater
of (a), (b), or (c), where (a) and (b) are defined above and where (c) is the
Policy Value on the seventh Policy Anniversary plus all Premiums paid less any
Adjusted Partial Withdrawals (see page 37) taken since that Policy
Anniversary. This death benefit does not apply on the death of the Owner if
the Owner is not the Annuitant (see "Death

- 13 -
<PAGE>

of Owner," p. 38). These death benefit provisions may vary depending on which
state the Policy is issued and when it was issued. No Contingent Deferred
Sales Charge is imposed upon amounts received as a Death Benefit. The Death
Benefit may be paid as either a lump sum cash benefit or as an Annuity as
permitted by federal or state law. (See "Death Benefit," p. 37.)

RIGHT TO RETURN THE POLICY

The Policy Owner may, until the end of the period of time specified in the
Policy, examine the Policy and return it for a refund. The applicable period
will depend on the state in which the Policy is issued. In New York it is
twenty (20) days (in other states it may be ten (10) days) after the Policy is
delivered to the Policy Owner. The amount of refund will also depend on the
state in which the Policy is issued. Ordinarily, the amount of the refund will
be the sum of all Premium Payments made under the Policy and the accumulated
gains or losses in the Mutual Fund Account, if any. However, some states may
require a return of the premium(s) paid, or the greater of the premium(s) paid
or Cash Value. AUSA will pay the refund within seven (7) days after it
receives written notice of cancellation and the returned Policy.

FEDERAL INCOME TAX CONSEQUENCES OF INVESTMENT IN THE POLICY

With respect to Owners who are natural persons, there should be no federal
income tax on increases in the Policy Value until a distribution under the
Policy occurs (e.g., a surrender or Annuity Payment) or is deemed to occur
(e.g., a pledge or assignment of a Policy). Generally, all or a portion of any
distribution or deemed distribution will be taxable as ordinary income. The
taxable portion of certain distributions will be subject to withholding unless
the recipient elects otherwise. In addition, prior to age 59 1/2 a ten percent
penalty tax may apply to certain distributions or deemed distributions under
the Policy. (See "Certain Federal Income Tax Consequences," p. 42.)

INQUIRIES AND WRITTEN NOTICES AND REQUESTS

Any questions about procedures or the Policy, or any Written Notice or
Written Request required to be sent to AUSA, should be sent to AUSA's Service
Office, Financial Markets Division--Variable Annuity Dept., 4333 Edgewood
Road, N.E., Cedar Rapids, Iowa 52499. Inquiries may be made by calling 800-
525-6205. All inquiries, Notices and Requests should include the Policy
number, the Owner's name and the Annuitant's name.

* * *

Note: The foregoing summary is qualified in its entirety by the detailed
information in the remainder of this Prospectus and in the Statement of
Additional Information and in the prospectuses for the Underlying Funds and in
the Policy, all of which should be referred to for more detailed information.
This Prospectus generally describes only the Policy and the Mutual Fund
Account. Separate prospectuses describe the Underlying Funds. (There is no
prospectus for the Fixed Account since interests in the Fixed Account are not
securities. See "The Fixed Account," p. 25.)

- 14 -
<PAGE>

CONDENSED FINANCIAL INFORMATION

The Accumulation Unit Values and the number of Accumulation Units outstanding
for each Subaccount from the date of inception:

<TABLE>
<CAPTION>
MANAGED ASSET ALLOCATION SUBACCOUNT
--------------------------------------------------------------------------
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE AT UNIT VALUE AT ACCUMULATION UNITS
BEGINNING OF YEAR END OF YEAR AT END OF YEAR
----------------- ------------- ------------------
<S> <C> <C> <C>
*...... none none none
<CAPTION>
MONEY MARKET SUBACCOUNT
--------------------------------------------------------------------------
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE AT UNIT VALUE AT ACCUMULATION UNITS
BEGINNING OF YEAR END OF YEAR AT END OF YEAR
----------------- ------------- ------------------
<S> <C> <C> <C>
*...... none none none
<CAPTION>
T. ROWE PRICE INTERNATIONAL STOCK SUBACCOUNT**
--------------------------------------------------------------------------
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE AT UNIT VALUE AT ACCUMULATION UNITS
BEGINNING OF YEAR END OF YEAR AT END OF YEAR
----------------- ------------- ------------------
<S> <C> <C> <C>
*...... none none none
<CAPTION>
WRL GROWTH SUBACCOUNT
--------------------------------------------------------------------------
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE AT UNIT VALUE AT ACCUMULATION UNITS
BEGINNING OF YEAR END OF YEAR AT END OF YEAR
----------------- ------------- ------------------
<S> <C> <C> <C>
*...... none none none
<CAPTION>
QUEST FOR VALUE EQUITY SUBACCOUNT
--------------------------------------------------------------------------
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE AT UNIT VALUE AT ACCUMULATION UNITS
BEGINNING OF YEAR END OF YEAR AT END OF YEAR
----------------- ------------- ------------------
<S> <C> <C> <C>
*...... none none none
<CAPTION>
QUEST FOR VALUE SMALL CAP SUBACCOUNT
--------------------------------------------------------------------------
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE AT UNIT VALUE AT ACCUMULATION UNITS
BEGINNING OF YEAR END OF YEAR AT END OF YEAR
----------------- ------------- ------------------
<S> <C> <C> <C>
*...... none none none
<CAPTION>
U.S. GOVERNMENT SECURITIES SUBACCOUNT
--------------------------------------------------------------------------
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE AT UNIT VALUE AT ACCUMULATION UNITS
BEGINNING OF YEAR END OF YEAR AT END OF YEAR
----------------- ------------- ------------------
<S> <C> <C> <C>
*...... none none none
<CAPTION>
T. ROWE PRICE EQUITY INCOME SUBACCOUNT
--------------------------------------------------------------------------
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE AT UNIT VALUE AT ACCUMULATION UNITS
BEGINNING OF YEAR END OF YEAR AT END OF YEAR
----------------- ------------- ------------------
<S> <C> <C> <C>
*...... none none none
<CAPTION>
T. ROWE PRICE GROWTH STOCK SUBACCOUNT
--------------------------------------------------------------------------
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE AT UNIT VALUE AT ACCUMULATION UNITS
BEGINNING OF YEAR END OF YEAR AT END OF YEAR
----------------- ------------- ------------------
<S> <C> <C> <C>
*...... none none none
</TABLE>
- ----------------------------------

* Had not commenced business as of December 31, 1994.
**Prior to March 24, 1995, the T. Rowe Price International Stock Subaccount was
known as the Global Growth Subaccount.

- 15 -
<PAGE>

FINANCIAL STATEMENTS

The financial statements of AUSA and the independent auditors' report thereon
are in the Statement of Additional Information which is available free upon
request.

HISTORICAL PERFORMANCE DATA

STANDARDIZED PERFORMANCE DATA

From time to time, AUSA may advertise historical yields and total returns for
the Subaccounts of the Mutual Fund Account. In addition, AUSA may advertise the
effective yield of the Money Market Subaccount. These figures will be
calculated according to standardized methods prescribed by the Securities and
Exchange Commission ("SEC"). They will be based on historical earnings and are
not intended to indicate future performance.

The yield of the Money Market Subaccount for a Policy refers to the
annualized income generated by an investment under a Policy in the Subaccount
over a specified seven-day period. The yield is calculated by assuming that the
income generated for that seven-day period is generated each seven-day period
over a 52-week period and is shown as a percentage of the investment. The
effective yield is calculated similarly but, when annualized, the income earned
by an investment under a Policy in the Subaccount is assumed to be reinvested.
The effective yield will be slightly higher than the yield because of the
compounding effect of this assumed reinvestment.

The yield of a Subaccount of the Mutual Fund Account (other than the Money
Market Subaccount) for a Policy refers to the annualized income generated by an
investment under a Policy in the Subaccount over a specified thirty-day period.
The yield is calculated by assuming that the income generated by the investment
during that thirty-day period is generated each thirty-day period over a 12-
month period and is shown as a percentage of the investment.

The total return of a Subaccount of the Mutual Fund Account refers to return
quotations assuming an investment under a Policy has been held in the
Subaccount for various periods of time including, but not limited to, a period
measured from the date the Subaccount commenced operations. When a Subaccount
has been in operation for one, five, and ten years, respectively, the total
return for these periods will be provided. The total return quotations for a
Subaccount will represent the average annual compounded rates of return that
equate an initial investment of $1,000 in the Subaccount to the redemption
value of that investment as of the first day of each of the periods for which
total return quotations are provided.

The yield and total return calculations for a Subaccount do not reflect the
effect of any premium taxes that may be applicable to a

- 16 -
<PAGE>

particular Policy. The yield calculations also do not reflect the effect of any
Contingent Deferred Sales Charge that may be applicable to a particular Policy.
To the extent that a premium tax and/or Contingent Deferred Sales Charge is
applicable to a particular Policy, the yield and/or total return of that Policy
will be reduced. For additional information regarding yields and total returns
calculated using the standard formats briefly summarized above, please refer to
the Statement of Additional Information, a copy of which may be obtained from
AUSA.

HYPOTHETICAL PERFORMANCE DATA OF SUBACCOUNTS

Prior to December 31, 1994, the Subaccounts had not yet commenced operations.
However, the following is standardized average annual total return information
based on the hypothetical assumption that the Subaccounts had been available to
the AUSA Endeavor Variable Annuity Account since inception of the corresponding
Portfolio:

<TABLE>
<CAPTION>
INCEPTION
1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR OF THE
PERIOD PERIOD PERIOD PERIOD PERIOD PORTFOLIO
ENDED ENDED ENDED ENDED ENDED 10/2/86 TO
SUBACCOUNT 12/31/94 12/31/94 12/31/94 12/31/94 12/31/94 12/31/94
---------- -------- -------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
WRL Growth.............. (15.12)% (6.19)% (3.82)% 9.41% 7.21% 12.70%
</TABLE>

<TABLE>
<CAPTION>
ONE YEAR INCEPTION OF
PERIOD ENDED THE SUBACCOUNT
12/31/94 TO 12/31/94
------------ --------------
<S> <C> <C>
Managed Asset Allocation/1/......................... (12.12)% 6.43%
Quest for Value Equity/2/........................... (2.83)% (0.55)%
Quest for Value Small Cap/3/........................ (8.63)% 1.06%
U.S. Government Securities/4/....................... N/A (11.79)%
</TABLE>
- ----------------------------------
/1/ Inception Date of corresponding Portfolio--April 8, 1991.
/2/ Inception Date of corresponding Portfolio--May 27, 1993.
/3/ Inception Date of corresponding Portfolio--May 4, 1993.
/4/ Inception Date of corresponding Portfolio--May 13, 1994.

T. ROWE PRICE EQUITY INCOME SUBACCOUNT AND T. ROWE PRICE GROWTH STOCK
SUBACCOUNT

The T. Rowe Price Equity Income Subaccount and the T. Rowe Price Growth Stock
Subaccount had not commenced operations as of December 31, 1994, so no
historical performance data exists for those Subaccounts. Similarly, the T.
Rowe Price Equity Income and T. Rowe Price Growth Stock Portfolios of Endeavor
Series Trust had not commenced operations as of December 31, 1994, so no
historical performance data exists for those Portfolios, which are the
Portfolios that the T. Rowe Price Equity Income and T. Rowe Price Growth Stock
Subaccounts will invest in.

T. Rowe Price Associates, Inc. is the investment adviser for the T. Rowe
Price Equity Income and T. Rowe Price Growth Stock Portfolios of

- 17 -
<PAGE>

Endeavor Series Trust and also manages the T. Rowe Price Equity Income Fund,
Inc. ("Equity Income Fund") and the T. Rowe Price Growth Stock Fund, Inc.
("Growth Stock Fund"), registered open-end investment companies. These
portfolios are not available for investment under the AUSA Endeavor Variable
Annuity. However, they have the same investment objectives, and use the same
investment strategies and techniques as contemplated for the T. Rowe Price
Equity Income and T. Rowe Price Growth Stock Portfolios that are available
under the AUSA Endeavor Variable Annuity. The following figures represent what
the investment performance of the T. Rowe Price Equity Income Subaccount and
the T. Rowe Price Growth Stock Subaccount would have been, IF those Subaccounts
had been in existence since 1983 and 1985, respectively, and invested in the
Equity Income Fund and Growth Stock Fund. Since these Subaccounts only
commenced operations in January, 1995, and since these Subaccounts do not
invest in the Equity Income Fund and Growth Stock Fund, THESE ARE NOT ACTUAL
PERFORMANCE FIGURES FOR THE T. ROWE PRICE EQUITY INCOME AND T. ROWE PRICE
GROWTH STOCK SUBACCOUNTS. These are hypothetical average annual total return
figures, which represent the performance of the Equity Income Fund and Growth
Stock Fund (which are not available under the Policy), adjusted for the charges
and deductions applicable to the AUSA Endeavor Variable Annuity Policy.

<TABLE>
<CAPTION>
TEN YEARS
ENDED
FIVE YEARS 12/31/94
YEAR ENDED ENDED OR
12/31/94 12/31/94 INCEPTION DATE*
---------- ---------- ---------------
<S> <C> <C> <C>
Equity Income............................. (2.38)% 8.02% 11.96%
Growth Stock.............................. (6.02)% 7.78% 12.05%
</TABLE>
- ----------------------------------
* Inception Date of T. Rowe Price Equity Income Fund: 10/31/85.

T. ROWE PRICE INTERNATIONAL STOCK SUBACCOUNT

Effective January 1, 1995, Rowe Price-Fleming International, Inc. became the
new Adviser to the Global Growth Portfolio. The Portfolio's name has been
changed to the T. Rowe Price International Stock Portfolio and the Portfolio's
shareholders have approved a change in investment objective from investments in
small capitalization companies on a global basis to investments in a broad
range of companies on an international basis (i.e., non-U.S. companies).

Rowe Price-Fleming International, Inc. is also the investment adviser of the
T. Rowe Price International Stock Fund, Inc. ("International Stock Fund"), a
registered open-end investment company. This portfolio is not available for
investment under the AUSA Endeavor Variable Annuity. However, it has the same
investment objectives and uses the same investment strategies and techniques as
contemplated for the T. Rowe Price International Stock Portfolio that is
available under the AUSA Endeavor Variable Annuity. The following figures
represent what the investment performance of the T. Rowe Price International
Stock Subaccount would have been, IF that Subaccount

- 18 -
<PAGE>

had been in existence since 1985 and invested in the International Stock Fund.
Since this Subaccount does not invest in the International Stock Fund, THESE
ARE NOT ACTUAL PERFORMANCE FIGURES FOR THE T. ROWE PRICE INTERNATIONAL STOCK
SUBACCOUNT. These are hypothetical average annual total return figures, which
represent the performance of the International Stock Fund (which are not
available under the Policy), adjusted for the charges and deductions applicable
to the AUSA Endeavor Variable Annuity Policy.

<TABLE>
<CAPTION>
FIVE YEARS TEN YEARS
YEAR ENDED ENDED ENDED
12/31/94 12/31/94 12/31/94
---------- ---------- ---------
<S> <C> <C> <C>
International Stock Fund........................ (7.67)% 5.38% 16.36%
</TABLE>

THESE FIGURES ARE NOT AN INDICATION OF THE PRESENT, PAST, OR FUTURE
PERFORMANCE OF THE T. ROWE PRICE INTERNATIONAL STOCK, T. ROWE PRICE EQUITY
INCOME OR T. ROWE PRICE GROWTH STOCK SUBACCOUNTS AVAILABLE UNDER THE AUSA
ENDEAVOR VARIABLE ANNUITY. The figures for the five year and from inception
periods for the Equity Income Fund reflect waiver of advisory fees and
reimbursement of other expenses. In the absence of such waivers, the average
annual total return figures above for the five year and from inception periods
would have been lower.

The performance data for periods prior to the date the Subaccounts commenced
operations is based on the performance of the corresponding Portfolio and the
assumption that the applicable Subaccount was in existence for the same period
as the corresponding Portfolio with a level of charges equal to those currently
assessed against the Subaccount or against Owners' contract values under the
Policies. The WRL Series Fund, Inc.'s Growth Portfolio, managed by Janus
Capital Corporation, commenced operations on October 2, 1986. For purposes of
the calculation of the performance data for the WRL Growth Subaccount prior to
July 1, 1992, the deductions for the mortality and expense risk charge and
administrative charge are made on a monthly basis, rather than a daily basis.
The monthly deduction is made at the beginning of each month and generally
approximates the performance which would have resulted if the Subaccount had
actually been in existence since the inception of the WRL Series Fund, Inc.
Performance data for periods of less than seven years reflect deduction of the
Contingent Deferred Sales Charge.

NON-STANDARDIZED PERFORMANCE DATA

AUSA may from time to time also advertise or disclose average annual total
return or other performance data in non-standard formats for a Subaccount of
the Mutual Fund Account. The non-standard performance data may assume that no
Contingent Deferred Sales Charge is applicable, and may also make other
assumptions.

All non-standard performance data will be advertised only if the standard
performance data is also disclosed. For additional information

- 19 -
<PAGE>

regarding the calculation of other performance data, please refer to the
Statement of Additional Information, a copy of which may be obtained from AUSA.

PUBLISHED RATINGS

AUSA may from time to time publish in advertisements, sales literature and
reports to Owners, the ratings and other information assigned to it by one or
more independent rating organizations such as A.M. Best Company, Standard &
Poor's, and Duff & Phelps. The purpose of the ratings is to reflect the
financial strength and/or claims-paying ability of AUSA and should not be
considered as bearing on the investment performance of assets held in the
Mutual Fund Account. Each year the A.M. Best Company reviews the financial
status of thousands of insurers, culminating in the assignment of Best's
ratings. These ratings reflect their current opinion of the relative financial
strength and operating performance of an insurance company in comparison to the
norms of the life/health insurance industry. In addition, the claims-paying
ability of AUSA as measured by Standard & Poor's Insurance Ratings Services or
Duff & Phelps may be referred to in advertisements or sales literature or in
reports to Owners. These ratings are opinions of an operating insurance
company's financial capacity to meet the obligations of its insurance policies
in accordance with their terms. Claims-paying ability ratings do not refer to
an insurer's ability to meet non-policy obligations (i.e., debt/commercial
paper). These ratings do not reflect the investment performance of the Mutual
Fund Account or Fixed Account or the degree of risk associated with an
investment in either account.

AUSA LIFE INSURANCE COMPANY, INC.

AUSA Life Insurance Company, Inc. ("AUSA"), 666 Fifth Avenue, New York, New
York 10103, is a stock life insurance company. It was incorporated under the
laws of the State of New York on October 3, 1947. It is principally engaged in
the sale of life insurance and annuity policies, and is licensed in the
District of Columbia, and in all states except Alabama, Arkansas, Hawaii,
Idaho, Montana and Oregon. As of December 31, 1994, AUSA had assets of $6.0
billion. AUSA is a wholly-owned indirect subsidiary of AEGON USA, Inc., which
conducts substantially all of its operations through subsidiary companies
engaged in the insurance business or in providing non-insurance financial
services. All of the stock of AEGON USA, Inc. is indirectly owned by AEGON n.v.
of the Netherlands. AEGON n.v., a holding company, conducts its business
through subsidiary companies engaged primarily in the insurance business.

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<PAGE>

THE ENDEAVOR ACCOUNTS

Premiums paid under a Policy may be allocated to the Mutual Fund Account, to
the Fixed Account, or to a combination of these Accounts.

THE MUTUAL FUND ACCOUNT

The AUSA Endeavor Variable Annuity Account of AUSA Life Insurance Company,
Inc. (the "Mutual Fund Account") was established as a separate investment
account under the laws of the State of New York on September 27, 1994. The
Mutual Fund Account was created due to the assumption of certain policies of
AUSA's affiliate, International Life Investors Insurance Company ("ILI"). The
assumed policies have terms identical to those policies being issued by AUSA.
The ILI policies have been transferred to allow AUSA to succeed to the variable
annuity business of ILI. The Mutual Fund Account receives and invests the
Premiums under the Policies that are allocated to it for investment in shares
of the WRL Growth Portfolio of the WRL Series Fund, Inc. managed by Janus
Capital Corporation, and the Endeavor Series Trust.

The Mutual Fund Account currently is divided into nine Subaccounts.
Additional Subaccounts may be established in the future at the discretion of
AUSA. Each Subaccount invests exclusively in shares of one of the Portfolios of
the Underlying Funds. Under New York law, the assets of the Mutual Fund Account
are owned by AUSA, but they are held separately from the other assets of AUSA
and are not chargeable with liabilities incurred in any other business
operation of AUSA (except to the extent that assets in the Mutual Fund Account
exceed the reserves and other liabilities of the Mutual Fund Account). Income,
gains, and losses incurred on the assets in the Subaccounts of the Mutual Fund
Account, whether or not realized, are credited to or charged against that
Subaccount without regard to other income, gains or losses of any other Account
or Subaccount of AUSA. Therefore, the investment performance of any Subaccount
should be entirely independent of the investment performance of AUSA's general
account assets or any other Account or Subaccount maintained by AUSA.

The Mutual Fund Account is registered with the SEC under the Investment
Company Act of 1940 (the "1940 Act") as a unit investment trust and meets the
definition of a separate account under federal securities laws. However, the
SEC does not supervise the management or the investment practices or policies
of the Mutual Fund Account or AUSA.

Underlying Funds. The Mutual Fund Account will invest exclusively in shares
of Endeavor Series Trust and the WRL Growth Portfolio of the WRL Series Fund,
Inc. (collectively the "Underlying Funds"). The Endeavor Series Trust is a
series-type mutual fund registered with the SEC under the 1940 Act as an open-
end, diversified

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<PAGE>

management investment company./5/ The Underlying Funds currently consist of
the following nine Portfolios: the WRL Growth Portfolio, managed by Janus
Capital Corporation, the Managed Asset Allocation Portfolio, the Money Market
Portfolio, the T. Rowe Price International Stock Portfolio (formerly known as
the Global Growth Portfolio), the Quest for Value Equity Portfolio, the Quest
for Value Small Cap Portfolio, the U.S. Government Securities Portfolio, the
T. Rowe Price Equity Income Portfolio, and the T. Rowe Price Growth Stock
Portfolio. The assets of each Portfolio are held separate from the assets of
the other Portfolios, and each Portfolio has its own distinct investment
objectives and policies. Each Portfolio operates as a separate investment
fund, and the income or losses of one Portfolio generally have no effect on
the investment performance of any other Portfolio.

Endeavor Investment Advisers (the "Manager"), an investment adviser
registered with the SEC under the Investment Advisers Act of 1940, is the
Endeavor Series Trust's manager. The Manager selects and contracts with
advisers for investment services for the Portfolios of Endeavor Series Trust,
reviews the advisers' activities, and otherwise performs administerial and
managerial functions for the Endeavor Series Trust. Five advisers, TCW Funds
Management, Inc. (a wholly-owned subsidiary of The TCW Group, Inc.) T. Rowe
Price Associates, Inc., Rowe Price-Fleming International, Inc. (a joint
venture between T. Rowe Price Associates, Inc. and Robert Fleming Holdings
Limited), Quest for Value Advisors, a subsidiary of Oppenheimer Capital and
The Boston Company Asset Management, Inc. (an indirect, wholly-owned
subsidiary of Mellon Bank Corporation) (the "Advisers"), each perform
investment advisory services for particular Portfolios of Endeavor Series
Trust. TCW Funds Management, Inc. is the Adviser for the Managed Asset
Allocation Portfolio and the Money Market Portfolio. T. Rowe Price Associates,
Inc. is the Adviser for the T. Rowe Price Equity Income Portfolio and the T.
Rowe Price Growth Stock Portfolio. Rowe Price-Fleming International, Inc. is
the Adviser for the T. Rowe Price International Stock Portfolio.

Quest for Value Advisors is the Adviser for the Quest for Value Equity
Portfolio and the Quest for Value Small Cap Portfolio. Western Reserve Life
Assurance Co. of Ohio, an affiliate of AUSA, is the Adviser for the WRL Series
Fund, Inc. and contracts with Janus Capital Corporation (also an "Adviser") as
a sub-adviser to the Growth Portfolio of the WRL Series Fund, Inc. The Boston
Company Asset Management, Inc. is the Adviser for the U.S. Government
Securities Portfolio. The Adviser of a Portfolio is responsible for selecting
the investments of the Portfolio consistent with the investment objectives and
policies of the Portfolio, and will conduct securities trading for the
Portfolio. All Advisers are investment advisers registered with the SEC under
the Investment Advisers Act of 1940.
- -----------
/5/ The registration of the Underlying Funds does not involve supervision of the
management or investment practices or policies of the Underlying Funds by
the SEC.
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<PAGE>

The investment objectives of each Portfolio are summarized as follows:

Managed Asset Allocation Portfolio--seeks high total return through a managed
asset allocation portfolio of equity, fixed income and money market securities.

Money Market Portfolio--seeks current income, preservation of capital and
maintenance of liquidity through investment in short-term money market
securities. The Portfolio seeks to maintain a constant net asset value of $1.00
per share although no assurances can be given that such constant net asset
value will be maintained.

T. Rowe Price International Stock Portfolio--seeks long-term growth of
capital through investments primarily in common stocks of established non-U.S.
companies.

WRL Growth Portfolio, managed by Janus Capital Corporation--seeks growth of
capital. At most times, this portfolio will be invested primarily in equity
securities which are selected solely for their capital growth potential;
investment income is not a consideration.

Quest for Value Equity Portfolio--seeks long-term capital appreciation
through investment in securities (primarily equity securities) of companies
that are believed by the Portfolio's Adviser to be undervalued in the
marketplace in relation to factors such as the companies' assets or earnings.

Quest for Value Small Cap Portfolio--seeks capital appreciation through
investments in a diversified portfolio consisting primarily of equity
securities of companies with market capitalizations of under $1 billion.

U.S. Government Securities Portfolio--seeks as high a level of total return
as is consistent with prudent investment strategies by investing under normal
conditions at least 65% of its assets in debt obligations and mortgage-backed
securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.

T. Rowe Price Equity Income Portfolio--seeks to provide substantial dividend
income and also capital appreciation by investing primarily in dividend paying
stocks of established companies.

T. Rowe Price Growth Stock Portfolio--seeks long-term growth of capital and
to increase dividend income through investment primarily in common stocks of
well established growth companies.

THERE IS NO ASSURANCE THAT ANY PORTFOLIO WILL ACHIEVE ITS STATED OBJECTIVE.
MORE DETAILED INFORMATION, INCLUDING A DESCRIPTION OF EACH PORTFOLIO'S
INVESTMENT OBJECTIVE AND POLICIES AND A DESCRIPTION OF RISKS INVOLVED IN
INVESTING IN EACH OF THE PORTFOLIOS AND OF EACH PORTFOLIO'S FEES AND EXPENSES
IS

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<PAGE>

CONTAINED IN THE PROSPECTUSES FOR THE UNDERLYING FUNDS, CURRENT COPIES OF
WHICH ARE ATTACHED TO THIS PROSPECTUS. INFORMATION CONTAINED IN THE UNDERLYING
FUNDS' PROSPECTUSES SHOULD BE READ CAREFULLY BEFORE INVESTING IN A SUBACCOUNT
OF THE MUTUAL FUND ACCOUNT.

An investment in the Mutual Fund Account, or in any Portfolio, including the
Money Market Portfolio, is not insured or guaranteed by the U.S. government.

Addition, Deletion, or Substitution of Investments. AUSA cannot and does not
guarantee that any of the Portfolios will always be available for Premium
Payments, allocations, or transfers. AUSA retains the right, subject to any
applicable law, to make changes in the Mutual Fund Account and its
investments. AUSA reserves the right to eliminate the shares of any Portfolio
held by a Subaccount and to substitute shares of another Portfolio of the
Underlying Funds, or of another registered open-end management investment
company for the shares of any Portfolio, if the shares of the Portfolio are no
longer available for investment or if, in AUSA's judgment, investment in any
Portfolio would be inappropriate in view of the purposes of the Mutual Fund
Account. To the extent required by the 1940 Act, substitutions of shares
attributable to an Owner's interest in a Subaccount will not be made without
prior notice to the Owner and the prior approval of the SEC. Nothing contained
herein shall prevent the Mutual Fund Account from purchasing other securities
for other series or classes of variable annuity policies, or from effecting an
exchange between series or classes of variable annuity policies on the basis
of requests made by Owners.

New Subaccounts may be established when, in the sole discretion of AUSA,
marketing, tax, investment or other conditions warrant. Any new Subaccounts
may be made available to existing Owners on a basis to be determined by AUSA.
Each additional Subaccount will purchase shares in a mutual fund portfolio or
other investment vehicle. AUSA may also eliminate one or more Subaccounts if,
in its sole discretion, marketing, tax, investment or other conditions warrant
such change.

In the event any Subaccount is eliminated, AUSA will notify Owners and
request a reallocation of the amounts invested in the eliminated Subaccount.
If no such reallocation is provided by the Owner, AUSA will reinvest the
amounts invested in the eliminated Subaccount in the Subaccount that invests
in the Money Market Portfolio (or in a similar portfolio of money market
instruments) or in another Subaccount, if appropriate.

In the event of any such substitution or change, AUSA may, by appropriate
endorsement, make such changes in the Policies as may be necessary or
appropriate to reflect such substitution or change. Furthermore, if deemed to
be in the best interests of persons having voting rights under the Policies,
the Mutual Fund Account may be (i) operated as a management company under the
1940 Act or any other

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<PAGE>

form permitted by law, (ii) deregistered under the 1940 Act in the event such
registration is no longer required or (iii) combined with one or more other
separate accounts. To the extent permitted by applicable law, AUSA also may
transfer the assets of the Mutual Fund Account associated with the Policies to
another account or accounts.

THE FIXED ACCOUNT

This Prospectus is generally intended to serve as a disclosure document only
for the Policy and the Mutual Fund Account. For complete details regarding the
Fixed Account, see the Policy itself.

Premiums allocated and amounts transferred to the Fixed Account become part
of the general account of AUSA, which supports insurance and annuity
obligations. Interests in the general account have not been registered under
the Securities Act of 1933 (the "1933 Act"), nor is the general account
registered as an investment company under the Investment Company Act of 1940
(the "1940 Act"). Accordingly, neither the general account nor any interests
therein are generally subject to the provisions of the 1933 or 1940 Acts and
AUSA has been advised that the staff of the Securities and Exchange Commission
has not reviewed the disclosures in this Prospectus which relate to the fixed
portion.

The Fixed Account is made up of all the general assets of AUSA, other than
those in the Mutual Fund Account or in any other segregated asset account. The
Policy Owner may allocate Premium Payments to the Fixed Account at the time of
Premium Payment or by subsequent transfers from the Mutual Fund Account.
Instead of the Policy Owner bearing the investment risk as is the case for
Policy Value in the Mutual Fund Account, AUSA bears the full investment risk
for all Policy Value in the Fixed Account. AUSA has sole discretion to invest
the assets of its general account, including the Fixed Account, subject to
applicable law.

AUSA currently offers two interest rate guarantee periods in the Fixed
Account, a "One Year Option" and a "Three Year Option." The One Year Option is
only available if the premium paid on the amount transferred into it is set up
on Dollar Cost Averaging (see "Dollar Cost Averaging," p. 27), or will be set
up on Dollar Cost Averaging in the future. Except as otherwise provided in the
Contract, transfers out of the One Year Option, except through Dollar Cost
Averaging, are not allowed. The "One Year Option" guarantees the current
interest rate for one year from the payment or transfer date. At the end of the
one year period, AUSA will declare a renewal rate which will be guaranteed for
at least one year. AUSA also offers a "Three Year Option" which guarantees the
current interest rate for three years from the payment or transfer date. At the
end of the three year period, AUSA will declare a renewal rate which will be
guaranteed for at least one year.

AUSA guarantees that it will credit interest to amounts in the Fixed Account
at an effective annual rate of at least 4.0% per year. AUSA may, IN ITS SOLE
DISCRETION, credit amounts in the Fixed Account with interest

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<PAGE>

at a Current Interest Rate in excess of 4.0%. Once declared, a Current
Interest Rate will be guaranteed for at least one year. Transfers out of the
Fixed Account are subject to restrictions on amount and timing. (See
"Transfers," p. 26, and "Surrenders," p. 30). For purposes of crediting
interest, the oldest payment or transfer into the Fixed Account, plus interest
allocable to that payment or transfer, is considered to be withdrawn or
transferred out first; the next oldest payment plus interest is considered to
be transferred out next, and so on (this is a "first-in, first-out"
procedure). The Owner bears the risk that AUSA will not credit interest in
excess of 4% per year.

AUSA guarantees that, at any time prior to the Annuity Commencement Date,
the amount in the Fixed Account allocable to a particular Policy will be not
less than the amount of the Premium Payments allocated or transferred to the
Fixed Account, plus interest at the rate of 4.0% per year, plus any excess
interest credited to amounts in the Fixed Account, less any applicable premium
or other taxes allocable to the Fixed Account, and less any amounts deducted
from the Fixed Account in connection with partial surrenders (including any
Contingent Deferred Sales Charges) or transfers to the Mutual Fund Account.

The Current Interest Rates will be determined by AUSA in its sole
discretion. The Policy Owner bears the risk that no interest will be credited
in excess of 4.0% per year.

TRANSFERS

An Owner can transfer Policy Value from one Investment Option to another
within certain limits.

Subject to the limitations and restrictions described below, transfers from
an Investment Option may be made, up to thirty days prior to the Annuity
Commencement Date, by sending Written Notice, signed by the Policy Owner, to
the Service Office. The minimum amount which may be transferred is the lesser
of $500 or the entire Account or Subaccount Value. If the Account or
Subaccount Value remaining after a transfer is less than $500, AUSA reserves
the right, at its discretion, either to deny the transfer request or to
include that amount as part of the transfer.

Transfers out of a Subaccount of the Mutual Fund Account currently may be
made as often as the Owner wishes, subject to the minimum amount specified
above (AUSA reserves the right to otherwise limit or restrict transfers in the
future).

Transfers out of the One Year Option Fixed Account, except through Dollar
Cost Averaging, are not allowed.

Transfers from the Three Year Option Fixed Account are subject to a yearly
limit equal to 25% of the current Three Year Option Fixed Account Value, or an
amount equal to the amount the Owner transferred out of the Three Year Option
Fixed Account during the prior year,

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<PAGE>

whichever is greater. After the Annuity Commencement Date, transfers out of
the Fixed Account are not permitted. (See "Annuity Payment Options," page 33.)

A transfer charge may be imposed for any transfer in excess of 12 per Policy
Year; however, currently there is no charge for any transfers.

DOLLAR COST AVERAGING

Under the Dollar Cost Averaging program, the Policy Owner can instruct AUSA
to automatically transfer an amount specified by the Policy Owner from the
Money Market Subaccount, the One Year Option Fixed Account or the U.S.
Government Securities Subaccount to any other Subaccount or Subaccounts of the
Mutual Fund Account. The automatic transfers can occur monthly or quarterly
and will occur on the 28th day of the month. The first transfer will occur on
the 28th day of the month following AUSA's receipt of the Dollar Cost
Averaging request. The amount transferred each time must be at least $500. A
minimum of six monthly or four quarterly transfers are required. Dollar Cost
Averaging results in the purchase of more Units when the Unit Value is low,
and less units when the Unit Value is high. However, there is no guarantee
that the Dollar Cost Averaging program will result in higher Policy Values or
otherwise be successful.

The Policy Owner can request Dollar Cost Averaging when purchasing the
Policy or at a later date. The program will terminate when the amount in the
Money Market Subaccount, the One Year Option Fixed Account or the U.S.
Government Securities Subaccount is insufficient for the next transfer, at
which time the remaining balance is transferred.

The Owner can increase or decrease the amount of the transfers by sending
AUSA a new Dollar Cost Averaging form. The Owner can discontinue the program
by sending a Written Notice to the Service Office. There is no charge for this
program.

THE POLICY

The Endeavor Variable Annuity Policy is a Flexible Premium Variable Annuity
Policy. The rights and benefits under the Policy are summarized below;
however, the description of the Policy contained in this Prospectus is
qualified in its entirety by the Policy itself, a copy of which is available
upon request from AUSA. The Policy may be purchased on a non-tax qualified
basis ("Nonqualified Policy"). The Policy may also be purchased and used in
connection with retirement plans or individual retirement accounts that
qualify for favorable federal income tax treatment ("Qualified Policy").

POLICY APPLICATION AND ISSUANCE OF POLICIES

Before it will issue a Policy, AUSA must receive a completed Policy
application or transmittal form and a minimum initial Premium

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<PAGE>

Payment of $5,000 for a Nonqualified Policy, $50 for a Policy purchased for use
in connection with a Tax Deferred 403(b) Annuity, or $1,000 for any other
Qualified Policy. A Policy ordinarily will be issued only in respect of
Annuitants Age 0 through 80. Acceptance or declination of an application shall
be based on AUSA's underwriting standards, and AUSA reserves the right to
reject any application or Premium Payment based on those underwriting
standards.

If the application can be accepted in the form received, the initial Premium
Payment will be credited to the Policy Value within two Business Days after the
later of receipt of the application or receipt of the initial Premium Payment.
If the initial Premium Payment cannot be credited because the application or
other issuing requirements are incomplete, the applicant will be contacted
within five Business Days and given an explanation for the delay and the
initial Premium Payment will be returned at that time unless the applicant
consents to AUSA's retaining the initial Premium Payment and crediting it as
soon as the necessary requirements are fulfilled.

The date on which the initial Premium Payment is credited to the Policy Value
is the Policy Date. The Policy Date is the date used to determine Policy Years
and Policy Anniversaries.

PREMIUM PAYMENTS

All initial Premium Payment checks or drafts should be made payable to AUSA
Life Insurance Company, Inc. and sent to the Administrative Office. Additional
premium payments should be sent to the Service Office. The Death Benefit will
not take effect until the check or draft for the Premium Payment is honored.

Initial Premium Payment. The minimum initial Premium Payment that AUSA
currently will accept under a Policy is $5,000 under a Nonqualified Policy, $50
under a Policy purchased for use in connection with a Tax Deferred 403(b)
Annuity, and $1,000 under any other Qualified Policy. AUSA reserves the right
to increase or decrease this amount for a class of Policies issued after some
future date. The initial Premium Payment is the only Premium Payment required
to be paid under a Policy.

Additional Premium Payments. While the Annuitant is living and prior to the
Annuity Commencement Date, the Owner may make additional Premium Payments at
any time, and in any frequency. The minimum additional Premium Payment under
both a Nonqualified Policy and a Qualified Policy is $500 with the exception of
Policies used in connection with Tax Deferred 403(b) Annuities, for which the
minimum additional Premium Payment is $50. Additional Premium Payments will be
credited to the Policy and added to the Policy Value as of the Business Day
when they are received.

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<PAGE>

Allocation of Premium Payments. An Owner must allocate Premium Payments to
one or more of the Investment Options. The Owner must specify the initial
allocation in the Policy application. This allocation will be used for
additional Premium Payments unless the Owner requests a change of allocation.
All allocations must be made in whole percentages and must total 100%. The
minimum amount that can be allocated to any Investment Option is $500 ($50 for
Policies used in connection with Tax Deferred Section 403(b) Annuities). If the
Owner fails to specify how Premium Payments are to be allocated, the Premium
Payment(s) cannot be accepted. All additional Premium Payments will be
allocated and credited to the Owner's Policy as of the Valuation Period during
which they are received.

The Owner may change the allocation instructions for future additional
Premium Payments by sending Written Notice, signed by the Owner, to AUSA's
Service Office. The allocation change will apply to payments received after the
date the Written Notice is received.

Payment Not Honored by Bank. Any payment due under the Policy which is
derived, all or in part, from any amount paid to AUSA by check or draft may be
postponed until such time as AUSA determines that such instrument has been
honored.

POLICY VALUE

On the Policy Date, the Policy Value equals the initial Premium Payment.
Thereafter, the Policy Value equals the sum of the values in the Mutual Fund
Account and the Fixed Account. The Policy Value will increase by (1) any
additional Premium Payments received by AUSA; and (2) any increases in the
Policy Value due to investment results of the selected Account(s). The Policy
Value will decrease by (1) any surrenders, including Contingent Deferred Sales
Charges; (2) any decreases in the Policy Value due to investment results of the
selected Accounts or Subaccounts; and (3) the charges imposed by AUSA.

The Policy Value is expected to change from Valuation Period to Valuation
Period, reflecting the investment experience of the selected Account(s) and/or
Subaccount(s), as well as the deductions for charges. A Valuation Period is the
period between successive Business Days. It begins at the close of business on
each Business Day and ends at the close of business on the next succeeding
Business Day. A Business Day is each day that both the New York Stock Exchange
and AUSA's Service Office are open for business. Holidays are generally not
Business Days.

The Mutual Fund Account Value. When a Premium is allocated or an amount is
transferred to a Subaccount of the Mutual Fund Account, it is credited to the
Policy Value in the form of Accumulation Units. Each Subaccount of the Mutual
Fund Account has a distinct Accumulation Unit value (the "Unit Value"). The
number of units credited is determined by dividing the Premium Payment or
amount transferred by the Unit Value of the Subaccount as of the end of the
Valuation Period

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<PAGE>

during which the allocation is made. When amounts are transferred out of, or
surrendered or withdrawn from an Account or Subaccount, units are canceled or
redeemed in a similar manner.

For each Subaccount, the Unit Value for a given Business Day is based on the
net asset value of a share of the corresponding Portfolio of the Underlying
Funds. Therefore, the Unit Values will fluctuate from day to day based on the
investment experience of the corresponding Portfolio. The determination of
Subaccount Unit Values is described in detail in the Statement of Additional
Information.

NON-PARTICIPATING POLICY

The Policy does not participate or share in the profits or surplus earnings
of AUSA. No dividends are payable on the Policy.

DISTRIBUTIONS UNDER THE POLICY

SURRENDERS

The Owner may surrender all or a portion of the Cash Value in exchange for a
cash withdrawal payment from AUSA. The Cash Value is the Policy Value less any
applicable Contingent Deferred Sales Charge and any applicable premium taxes.
(See "Annuity Payment Options," p. 33.)

The Owner may surrender Cash Value from the Mutual Fund Account at any time
during the life of the Annuitant and prior to the Annuity Commencement Date by
sending a Written Request to AUSA's Service Office. The minimum amount that can
be withdrawn from any Subaccount or Account is $500. After the Annuity
Commencement Date, the Policy can only be surrendered if Annuity Payment Option
4-V is in effect. (See "Annuity Payments," p. 32.)

Surrenders from the Fixed Account may be delayed for up to six months.

Currently, the only charge for surrenders is the Contingent Deferred Sales
Charge, if it applies. Premium taxes may also be deducted. Accordingly, the
amount available for surrender is the Cash Value, which is the Policy Value
less any applicable Contingent Deferred Sales Charge and premium taxes.
However, beginning in the second Policy Year, an Owner may surrender up to 10%
of the Policy Value without a Contingent Deferred Sales Charge if no withdrawal
has been made in the current Policy Year. Amounts withdrawn in excess of this
free withdrawal amount or withdrawn in the same Policy Year as a previous
withdrawal (and all surrenders in the first Policy Year) are subject to the
Contingent Deferred Sales Charge. In addition, a Contingent Deferred Sales
Charge will not be assessed if the withdrawal is necessary to meet the minimum
distribution requirements for that policy specified by the

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<PAGE>

IRS for tax qualified plans or if the Policy Value is applied to provide an
Annuity under one of the Annuity Payment Options, unless the Policy Value is
applied, during the first five Policy Years, under Payment Option 2, 4, or 4-V
with payments for less than five years. The Owner must specify the Investment
Option from which surrendered amounts should be taken (otherwise, the
surrender request is incomplete and cannot be processed). For a discussion of
the Contingent Deferred Sales Charge, see "Contingent Deferred Sales Charge,"
p. 39.

Since the Owner assumes the investment risk with respect to Premium Payments
allocated to the Mutual Fund Account, and because withdrawals are subject to a
Contingent Deferred Sales Charge, and possibly premium taxes, the total amount
paid upon total surrender of the Cash Value (taking any prior surrenders into
account) may be more or less than the total Premium Payments made. Following a
surrender of the total Cash Value, or at any time the Policy Value is zero,
all rights of the Owner and Annuitant will terminate.

In addition to the Contingent Deferred Sales Charges and any applicable
premium taxes, surrenders may be subject to income taxes and, prior to age 59
1/2, a ten percent penalty tax. (See "Certain Federal Income Tax
Consequences", page 42.)

SYSTEMATIC WITHDRAWAL PLAN

Under the Systematic Withdrawal Plan Policy Owners can instruct AUSA to make
automatic payments to them monthly, quarterly, semi-annually or annually from
a specified Subaccount. Monthly and quarterly payments can only be sent by
electronic funds transfer directly to a checking or savings account. The
minimum monthly payment is $50, the minimum quarterly payment is $100, and the
minimum semi-annual or annual payment is $250. If the withdrawal is less than
the minimum then it can only be sent on an annual basis. The maximum payment
is 10% of the Policy Value divided by the number of payments made per year
(e.g. 12 for monthly). If this amount is below the minimum distribution
requirements for that policy specified by the IRS for tax qualified plans, the
maximum payment will be increased to this minimum required distribution
amount. The "Request for Systematic Withdrawal" form must specify a date for
the first payment, which must be at least 30 days but not more than one year
after the form is submitted.

The Contingent Deferred Sales Charge will be waived for Policy Owners under
age 59 1/2 of tax qualified policies if they take Systematic Withdrawals using
one of the payout methods described in I.R.S. Notice 89-25, Q & A-12 (the Life
Expectancy Recalculation Option, Amortization, or Annuity Factor) which
generally require payments for life or life expectancy. These payments must be
continued until the later of age 59 1/2 or five years from their commencement.
No additional withdrawals may be taken during this time. For tax qualified
policies, Policy Owners age 59 1/2 or older, the Contingent Deferred Sales
Charge will be waived if payments are made using the Life Expectancy
Recalculation Option.

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<PAGE>

In addition, for either tax qualified or non-tax qualified Policies the
Contingent Deferred Sales Charge will not be imposed on Systematic Withdrawals
that do not exceed 10% of the Policy Value (that is, the Sales Charge will
apply as if the "annualized" payments were a single payment). For other
Systematic Withdrawals, the Contingent Deferred Sales Charge will apply in
accordance with its terms.

Systematic Withdrawals will not be available for Tax Deferred 403(b)
Annuities under age 59 1/2 or that have an outstanding loan, and AUSA will
terminate the option under such Policies if a loan is taken out.

Qualified Policies are subject to complex rules with respect to restrictions
on and taxation of distributions, including the applicability of penalty taxes.
In addition, the treatment of periodic withdrawals from Nonqualified Policies
is unclear, particularly with respect to avoiding the 10% penalty tax.
Therefore, a qualified tax adviser should be consulted before a Systematic
Withdrawal Plan is requested. In certain circumstances withdrawn amounts may be
included in the Policy Owner's gross income. (See "Certain Federal Income Tax
Consequences," Page 42.)

ANNUITY PAYMENTS

Annuity Commencement Date. Unless the Annuity Commencement Date is changed,
Annuity Payments under a Policy will begin on the Annuity Commencement Date
which is selected by the Policy Owner at the time the Policy is applied for.
The Annuity Commencement Date may be changed from time to time by the Policy
Owner by Written Notice to AUSA, provided that notice of each change is
received by AUSA at its Service Office at least thirty (30) days prior to the
then current Annuity Commencement Date. Except as otherwise permitted by AUSA,
a new Annuity Commencement Date must be a date which is: (1) after the
Annuitant attains age 40; (2) at least thirty (30) days after the date notice
of the change is received by AUSA; and (3) not later than the first day of the
first month following the Annuitant's 85th birthday.

The Annuity Commencement Date may also be changed by the Beneficiary's
election of the Annuity Option after the Annuitant's death.

Election of Payment Option. During the lifetime of the Annuitant and prior to
the Annuity Commencement Date, the Policy Owner may choose an Annuity Payment
Option or change the election, but Written Notice of any election or change of
election must be received by AUSA at its Service Office at least thirty (30)
days prior to the Annuity Commencement Date. If no election is made prior to
the Annuity Commencement Date, Annuity Payments will be made under Option 3-V,
life income with variable payments for 10 years certain. If the Annuity
Purchase Value on the Annuity Commencement Date is less than $2,000, AUSA
reserves the right to pay it in one lump sum in lieu of applying it under an
Annuity Payment Option.

Prior to the Annuity Commencement Date, the Beneficiary may elect to receive
the Death Benefit in a lump sum or under one of the

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<PAGE>

Payment Options, to the extent allowed by law and subject to the terms of any
settlement agreement. (See "Death Benefit," p. 37.) Annuity Payments will be
made on either a fixed basis or a variable basis as selected by the Policy
Owner (or the Beneficiary, after the Annuitant's death).

The person who elects a Payment Option can also name one or more successor
payees to receive any unpaid amount AUSA has at the death of a payee. Naming
these payees cancels any prior choice of a successor payee.

A payee who did not elect the Payment Option does not have the right to
advance or assign payments, take the payments in one sum, or make any other
change. However, the payee may be given the right to do one or more of these
things if the person who elects the option tells AUSA in writing and AUSA
agrees.

Unless the Policy Owner specifies otherwise, the payee shall be the
Annuitant, or, after the Annuitant's death, the Beneficiary. AUSA may require
written proof of the age of any person who has an annuity purchased under
Option 3, 3-V, 5 or 5-V.

Premium Tax. AUSA may be required by state law to pay premium tax on the
amount applied to a payment option or upon withdrawal. If so, AUSA will deduct
the premium tax before applying or paying the proceeds.

Supplementary Policy. Once proceeds become payable and a choice has been
made, AUSA will issue a Supplementary Policy in settlement of the option
elected under the Policy setting forth the terms of the option elected. The
Supplementary Policy will name the payees and will describe the payment
schedule.

ANNUITY PAYMENT OPTIONS

The Policy provides five Payment Options which are described below. Three of
these are offered as either "Fixed Payment Options" or "Variable Payment
Options," and two are only available as Fixed Payment Options. The Policy Owner
may elect a Fixed Payment Option, a Variable Payment Option, or a combination
of both. If the Policy Owner elects a combination, he must specify what part of
the Annuity Purchase Value is to be applied to the Fixed and Variable Options.

NOTE CAREFULLY: Under Payment Options 3(1) and 5 (including 3-V(1) and 5-V),
it would be possible for only one Annuity Payment to be made if the
Annuitant(s) were to die before the due date of the second annuity payment;
only two Annuity Payments if the Annuitant(s) were to die before the due date
of the third annuity payment; and so forth.

On the Annuity Commencement Date, the Policy's Annuity Purchase Value will be
applied to provide for Annuity Payments under

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<PAGE>

the selected Annuity Option as specified. The Annuity Purchase Value is the
Policy Value for the Valuation Period which ends immediately preceding the
Annuity Commencement Date, reduced by any applicable premium or similar taxes
and in some cases during the first five Policy Years, any applicable Contingent
Deferred Sales Charge.

The effect of choosing a Fixed Annuity Option is that the amount of each
payment will be set on the Annuity Commencement Date and will not change. If a
Fixed Annuity Option is selected, the Policy Value will be transferred to the
general account of AUSA, and the Annuity Payments will be fixed in amount by
the fixed annuity provisions selected and the age and sex (if consideration of
sex is allowed) of the Annuitant. For further information, contact AUSA at its
Service Office.

Guaranteed Values. There are five Fixed Annuity Options. Options 1, 2 and 4
are based on a guaranteed interest rate of 3%. Options 3 and 5 are based on a
guaranteed interest rate of 3% using the "1983 Table a" mortality table with
projection of improved mortality.

Option 1--Interest Payments. The policy proceeds may be left with AUSA for
any term agreed to. AUSA will pay the interest in equal payments or it may be
left to accumulate. Withdrawal rights will be agreed upon by the Owner and AUSA
when the option is elected.

Option 2--Income for a Specified Period. Level payments of the proceeds with
interest are made for the fixed period elected, at which time the funds are
exhausted.

Option 3--Life Income. An election may be made between:

1. "No Period Certain"--Level payments will be made during the
lifetime of the Annuitant.

2. "10 Years Certain"--Level Payments will be made for the longer of
the Annuitant's lifetime or ten years.

3. "Guaranteed Return of Policy Proceeds"--Level payments will be
made for the longer of the Annuitant's lifetime or the number of
payments which, when added together, equals the proceeds applied
to the income option.

Option 4--Income of a Specified Amount. Payments are made for any specified
amount until the proceeds with interest are exhausted.

Option 5--Joint and Survivor Annuity. Payments are made during the joint
lifetime of the payee and a joint payee of the Owner's selection. Payments will
be made as long as either person is living.

Other options may be arranged by agreement with AUSA. Certain options may not
be available in some states.

Current immediate annuity rates for the same class of annuities will be used
if higher than the guaranteed amount (guaranteed amounts are

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<PAGE>

based upon the tables contained in the Policy). Current amounts may be obtained
from AUSA.

Variable Payment Options. The dollar amount of the first Variable Annuity
Payment will be determined in accordance with the annuity payment rates set
forth in the applicable table contained in the Policy. The tables are based on
the "1983 Table a" mortality table with a 5% effective annual Assumed Interest
Rate and assume a retirement date in the year 2000. The dollar amount of every
subsequent Variable Annuity Payment will vary based on the investment
performance of the Subaccount of the Mutual Fund Account selected by the
Annuitant or Beneficiary. If the actual investment performance exactly matched
the Assumed Interest Rate of 5% at all times, the amount of each Variable
Annuity Payment would remain equal. If actual investment performance exceeds
the Assumed Interest Rate, the amount of the payments would increase.
Conversely, if actual investment performance is worse than the Assumed Interest
Rate, the amount of the payments would decrease.

Determination of the First Variable Payment. The amount of the first variable
payment depends upon the sex (if consideration of sex is allowed) and adjusted
age of the Annuitant. The adjusted age is the Annuitant's actual age nearest
birthday, at the Annuity Commencement Date, adjusted as follows:

<TABLE>
<CAPTION>
ANNUITY COMMENCEMENT DATE ADJUSTED AGE
------------------------- ------------
<S> <C>
Before 2001 Actual Age
2001-2010 Actual Age minus 1
2011-2020 Actual Age minus 2
2021-2030 Actual Age minus 3
2031-2040 Actual Age minus 4
After 2040 As determined by AUSA
</TABLE>

This adjustment assumes an increase in life expectancy, and therefore it
results in lower payments than without such an adjustment.

The following Variable Payment Options generally are available:

Option 3-V--Life Income. An election may be made between:

1. "No Period Certain"--Payments will be made during the lifetime of
the Annuitant.

2. "10 Years Certain"--Payments will be made for the longer of the
Annuitant's lifetime or ten years.

Option 4-V--Income of a specified Amount. Payments are made for any specified
amount until the proceeds with accumulated gains or losses are exhausted. At
any time this option is in effect, the Annuitant can surrender the Policy for
the remaining value. Payments under this option are considered withdrawals for
federal income tax purposes.

Option 5-V--Joint and Survivor Annuity. Payments are made as long as either
the Annuitant or the joint Annuitant is living.

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<PAGE>

Certain options may not be available in some states.

Determination of Subsequent Variable Payments. All Variable Annuity Payments
other than the first are calculated using "Annuity Units" which are credited to
the Policy. The number of Annuity Units to be credited in respect of a
particular Subaccount is determined by dividing that portion of the first
Variable Annuity Payment attributable to that Subaccount by the Annuity Unit
Value of that Subaccount for the Annuity Commencement Date. The number of
Annuity Units of each particular Subaccount credited to the Policy then remains
fixed. The dollar value of variable Annuity Units in the chosen Subaccount will
increase or decrease reflecting the investment experience of the chosen
Subaccount. The dollar amount of each Variable Annuity Payment after the first
may increase, decrease or remain constant, and is equal to the sum of the
amounts determined by multiplying the number of Annuity Units of each
particular Subaccount credited to the Policy by the Annuity Unit Value for the
particular Subaccount on the date the payment is made.

Unless restricted by a particular Account or Subaccount, a Policy Owner may
transfer the value of the Annuity Units from one Subaccount to another within
the Mutual Fund Account or to the Fixed Account. However, after the Annuity
Commencement Date no transfers may be made from the Fixed Account to the Mutual
Fund Account. The minimum amount which may be transferred is the lesser of $10
of monthly income or the entire monthly income of the variable Annuity Units in
the Subaccount from which the transfer is being made. The remaining Annuity
Units in the Subaccount must provide at least $10 of monthly income. If, after
a transfer, the monthly income of the remaining Annuity Units in a Subaccount
would be less than $10, AUSA reserves the right to include those Annuity Units
as part of the transfer. AUSA reserves the right to limit transfers between
Subaccounts or to the Fixed Account to once per Policy Year.

* * *

A portion or the entire amount of the Annuity Payments may be taxable as
ordinary income. If, at the time the Annuity Payments begin, the Policy Owner
has not provided AUSA with a written election not to have federal income taxes
withheld, AUSA must by law withhold such taxes from the taxable portion of such
annuity payments and remit that amount to the federal government. Withholding
is mandatory as to certain Qualified Policies. (See "Certain Federal Income Tax
Consequences," p. 42.)

Adjustment of Annuity Payments. Payments will be made at 1, 3, 6, or 12 month
intervals. If the individual payments provided for would be or become less than
$30, AUSA may change, at its discretion, the frequency of payments to such
intervals as will result in payments of at

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<PAGE>

least $30. If the Annuity Purchase Value on the Annuity Commencement Date is
less than $2,000, AUSA may pay such value in one sum in lieu of the payments
otherwise provided for.

DEATH BENEFIT

Death of Annuitant Prior to Annuity Commencement Date. If the Annuitant who
is the Owner dies prior to the Annuity Commencement Date, a Death Benefit will
be payable to the Beneficiary. During the first seven policy years, the Death
Benefit will equal the larger of (a) the sum of the Premium Payments, less
Adjusted Partial Withdrawals taken, or (b) the Policy Value as of the date Due
Proof of Death and an election of a method of settlement and return of the
Policy are received by AUSA's Service Office. After the seventh Policy
Anniversary, the Death Benefit amount will be the greater of (a), (b), or (c),
where (a) and (b) are defined above and where (c) is the Policy Value on the
seventh Policy Anniversary plus all Premiums paid less any Adjusted Partial
Withdrawals taken since that Policy Anniversary. The Adjusted Partial
Withdrawal amount for each partial withdrawal is equal to the product of (a)
times (b), where:

(a) is the ratio of the amount of partial withdrawal taken to the Policy
Value on the date of, but prior to the partial withdrawal; and

(b) is the Death Benefit on the date of, but prior to the partial
withdrawal.

If a partial withdrawal is taken when the Death Benefit exceeds the Policy
Value, then the Adjusted Partial Withdrawal amount will exceed the amount of
the partial withdrawal. In that case, the total proceeds of a partial
withdrawal followed by a Death Benefit could be less than total Premium
Payments.

Note that the Death Benefit is payable on the death of the Annuitant who is
the Owner, not the death of the Owner, if different. If the Annuitant who is
not the Owner dies, the Owner will become the Annuitant unless the Owner
specifically requests on the application or in writing that the death benefit
be paid upon the Annuitant's death and AUSA agrees to such an election.

Due Proof of Death of the Annuitant is proof that the Annuitant who is the
Owner died prior to the commencement of Annuity Payments. Upon receipt of this
proof and an election of a method of settlement and return of the Policy, the
Death Benefit generally will be paid within seven days, or as soon thereafter
as AUSA has sufficient information about the Beneficiary to make the payment.
The Beneficiary may receive the amount payable in a lump sum cash benefit, or,
subject to any limitation under any state or federal law, rule, or regulation,
under one of the Annuity Payment Options described above, unless a settlement
agreement is effective at the death of the Annuitant preventing such election.

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<PAGE>

If the Annuitant was the Policy Owner, and the Beneficiary was not the
Annuitant's spouse, then (1) the Death Benefit must be distributed within five
years of the Annuitant's death, or (2) payments under a Payment Option must
begin within one year of the Annuitant's death and must be made for the
Beneficiary's lifetime or for a period certain (so long as any certain period
does not exceed the Beneficiary's life expectancy). Death proceeds which are
not paid to or for the benefit of a natural person must be distributed within
five years of Annuitant's death. If the sole Beneficiary is the Annuitant's
surviving spouse, such spouse may elect to continue the Policy as the new
Annuitant and Policy Owner instead of receiving the Death Benefit. (See
"Federal Tax Matters" in the Statement of Additional Information.)

Death of Annuitant On or After Annuity Commencement Date. The death benefit
payable if the Annuitant dies on or after the Annuity Commencement Date depends
on the Payment Option selected. Upon the Annuitant's death, the remaining
portion of the entire interest in the Policy, if any, will be distributed at
least as rapidly as under the method of distribution being used as of the date
of the Annuitant's death.

Beneficiary. The Beneficiary designation in the application will remain in
effect until changed. The Policy Owner may change the designated Beneficiary by
sending Written Notice to AUSA. The Beneficiary's consent to such change is not
required unless the Beneficiary was irrevocably designated or consent is
required by law. (If an irrevocable Beneficiary dies, the Policy Owner may then
designate a new Beneficiary.) The change will take effect as of the date the
Policy Owner signs the Written Notice, whether or not the Policy Owner is
living when the Notice is received by AUSA. AUSA will not be liable for any
payment made before the Written Notice is received. If more than one
Beneficiary is designated, and the Policy Owner fails to specify their
interests, they will share equally.

DEATH OF OWNER

Federal tax law requires that if any Policy Owner (including any joint Owner
or any Successor Policy Owner who has become a current Owner) dies before the
Annuity Commencement Date, then the entire value of the Policy must generally
be distributed within five years of the date of death of such Policy Owner or
the Contingent Policy Owner. Certain rules apply where 1) the spouse of the
deceased Owner is the sole Beneficiary, 2) the Policy Owner is not a natural
person and the primary Annuitant dies or is changed, or 3) any Policy Owner
dies after the Annuity Commencement Date. See "Federal Tax Matters" in the
Statement of Additional Information for a detailed description of these rules.
Other rules may apply to Qualified Contracts.

RESTRICTIONS UNDER SECTION 403(B) PLANS

Section 403(b) of the Internal Revenue Code provides for tax-deferred
retirement savings plans for employees of certain non-profit and

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<PAGE>

educational organizations. In accordance with the requirements of Section
403(b), any Policy used for a 403(b) plan will prohibit distributions of
elective contributions and earnings on elective contributions except upon death
of the employee, attainment of age 59 1/2, separation from service, disability,
or financial hardship. In addition, income attributable to elective
contributions may not be distributed in the case of hardship.

CHARGES AND DEDUCTIONS

No deductions are made from Premium Payments, so that the full amount of each
Premium Payment is invested in one or more of the Accounts. AUSA will make
certain charges and deductions in connection with the Policy in order to
compensate it for incurring expenses in distributing the Policy, bearing
mortality and expense risks under the Policy, and administering the Accounts
and the Policies. Charges may also be made for premium taxes, federal, state or
local taxes, or for certain transfers or other transactions. Charges and
expenses are also deducted from the Underlying Funds.

CONTINGENT DEFERRED SALES CHARGE

AUSA will incur expenses relating to the sale of Policies, including
commissions to registered representatives and other promotional expenses. AUSA
may apply a Contingent Deferred Sales Charge to any amount surrendered (i.e.,
withdrawn) in connection with a full or partial Policy surrender in order to
cover distribution expenses. A Contingent Deferred Sales Charge will not be
applied to withdrawal, after the first Policy Year, of up to 10% of the Policy
Value, if there have been no withdrawals in the current Policy Year. A
Contingent Deferred Sales Charge will also not be applied if the withdrawal is
necessary to meet the minimum distribution requirements for that policy
specified by the IRS for tax qualified plans or if the Policy Value is applied
to provide an Annuity under one of the Annuity Payment Options, unless the
Policy Value is applied, during the first five Policy Years, under Payment
Options 2, 4, or 4-V with payments for less than five years. The Contingent
Deferred Sales Charge is also waived upon certain Systematic Withdrawals (see
p. 31).

The amount of the Contingent Deferred Sales Charge is determined by
multiplying the amount of the premium withdrawn by the applicable Contingent
Deferred Sales Charge Percentage. The applicable Contingent Deferred Sales
Charge Percentage will depend upon the number of Policy Anniversaries that have
elapsed since the Premium Payment that is being withdrawn was made. For this
purpose, surrenders are allocated to Premium Payments on a "first in-first out"
basis, i.e., first to the oldest Premium Payment, then to the next oldest
Premium Payment, and so on. Premium Payments are deemed to be withdrawn before
earnings, and after all Premium Payments have been

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<PAGE>

withdrawn, the remaining Cash Value may be withdrawn without any Contingent
Deferred Sales Charge. The following is the table of Contingent Deferred Sales
Charge Percentages:

<TABLE>
<CAPTION>
NUMBER OF POLICY APPLICABLE CONTINGENT
YEARS SINCE DEFERRED SALES
PREMIUM PAYMENT CHARGE PERCENTAGE
---------------- ---------------------
<S> <C>
Less than 1 7%
At least 1 and less than 2 6%
At least 2 and less than 3 5%
At least 3 and less than 4 4%
At least 4 and less than 5 3%
At least 5 and less than 6 2%
At least 6 and less than 7 1%
</TABLE>

AUSA anticipates that the Contingent Deferred Sales Charge will not generate
sufficient funds to pay the cost of distributing the Policies. If this charge
is insufficient to cover the distribution expenses, the deficiency will be met
from AUSA's general funds, which will include amounts derived from the charge
for mortality and expense risks.

MORTALITY AND EXPENSE RISK CHARGE

AUSA imposes a daily charge as compensation for bearing certain mortality and
expense risks in connection with the Policies. This charge is equal to an
effective annual rate of 1.25% of the value of net assets in the Mutual Fund
Account. The Mortality and Expense Risk Charge is reflected in the Accumulation
or Annuity Unit Values for the Policy for each Subaccount.

Policy Values and Annuity Payments are not affected by changes in actual
mortality experience nor by actual expenses incurred by AUSA. The mortality
risks assumed by AUSA arise from its contractual obligations to make Annuity
Payments (determined in accordance with the Annuity tables and other provisions
contained in the Policy) and to pay Death Benefits prior to the Annuity
Commencement Date. Thus, Owners are assured that neither an Annuitant's own
longevity nor an unanticipated improvement in general life expectancy will
adversely affect the monthly Annuity payments that the Annuitant will receive
under the Policy.

AUSA also bears substantial risk in connection with the Death Benefit
Guarantee since AUSA will pay a Death Benefit equal to the Premium Payments,
less withdrawals, (or the Policy Value on the seventh Policy Anniversary as set
out in Death Benefits section, page 37) if that amount is higher than the
Policy Value.

The expense risk assumed by AUSA is the risk that AUSA's actual expenses in
administering the Policy and the Accounts will exceed the amount recovered
through the Administrative and Policy Maintenance Charges.

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<PAGE>

If the Mortality and Expense Risk Charge is insufficient to cover AUSA's
actual costs, AUSA will bear the loss; conversely, if the charge is more than
sufficient to cover costs, the excess will be profit to AUSA. AUSA expects a
profit from this charge. To the extent that the Contingent Deferred Sales
Charge is insufficient to cover the actual cost of Policy distribution, the
deficiency will be met from AUSA's general corporate assets, which may include
amounts, if any, derived from the Mortality and Expense Risk Charge. A
mortality and expense risk charge is assessed during the annuity phase for all
Variable Annuity Options including those that do not carry a life contingency.

ADMINISTRATIVE CHARGES

In order to cover the costs of administering the Policies and the Accounts,
AUSA deducts a Policy Maintenance Charge from the Policy Value of each Policy,
and also deducts a daily Administrative Expense Charge from the assets of each
Subaccount of the Mutual Fund Account.

The annual Policy Maintenance Charge is deducted from the Policy Value of
each Policy on each Policy Anniversary prior to the Annuity Commencement Date.
After the Annuity Commencement Date, the charge is not deducted. This annual
Policy Maintenance Charge generally is $35 and it will not be increased. It
will never exceed 2% of the Policy Value. For Policies issued on or after May
1, 1995, this charge is waived if the sum of the Premium Payments made less the
sum of all Partial Withdrawals is at least $50,000 on the Policy Anniversary.
AUSA does not anticipate realizing any profit from this charge. The Policy
Maintenance Charge will be deducted only from the Subaccounts in the Mutual
Fund Account, in the same proportion that the Policy Owner's interest in each
Subaccount bears to the Policy Value in the Mutual Fund Account.

AUSA also deducts a daily Administrative Expense Charge from the assets of
each Subaccount of the Mutual Fund Account. This charge currently is equal to
an effective annual rate of .15% of the net assets of each Subaccount of the
Mutual Fund Account. The Administrative Expense Charge may be increased in the
future (but it will never exceed .30%, and the combined total of this charge
and the Mortality and Expense Risk Charge will never exceed the current level
of 1.40%). AUSA does not anticipate realizing any profit from this charge.

PREMIUM TAXES

AUSA currently makes no deduction from the Premium Payments for any state
premium taxes AUSA pays in connection with Premium Payments under the Policies.
However, AUSA will deduct the aggregate premium taxes paid on behalf of a
particular Policy from the Policy Value on (i) the Annuity Commencement Date
(thus reducing the Annuity Purchase Value), (ii) the total surrender of a
Policy, or (iii) payment of the death proceeds of a Policy.

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<PAGE>

FEDERAL, STATE AND LOCAL TAXES

No charges are currently made for federal, state, or local taxes other than
premium taxes. However, AUSA reserves the right to deduct charges in the future
from the Accounts or Subaccounts for any taxes or other economic burden
resulting from the application of any tax laws that AUSA determines to be
attributable to the accounts or the policies.

TRANSFER CHARGE

There is no charge for the first 12 transfers between Investment Options in
each Policy Year. AUSA reserves the right to impose a $25 charge for the
thirteenth and each subsequent transfer request made by the Owner during a
single Policy Year. For the purpose of determining whether a transfer charge is
payable, initial Premium Payment allocations are not considered transfers. All
transfer requests made simultaneously will be treated as a single request. No
transfer charge will be imposed for any transfer which is not at the Owner's
request.

OTHER EXPENSES INCLUDING INVESTMENT ADVISORY FEES

Each of the Portfolios of the Underlying Funds is responsible for all of its
expenses. In addition, charges will be made against each of the Portfolios of
the Underlying Funds for investment advisory services provided to the
Portfolio. The net assets of each Portfolio of the Underlying Funds will
reflect deductions in connection with the investment advisory fee and other
expenses.

For more information concerning the investment advisory fee and other charges
against the Portfolios, see the prospectuses for the Underlying Funds, current
copies of which accompany this Prospectus.

EMPLOYEES AND AGENT PURCHASES

The Policy may be acquired by an employee or registered representative of any
broker/dealer authorized to sell the Policy or their spouse or minor children,
or by an officer, director, trustee or bona-fide full-time employee of AUSA or
its affiliated companies or their spouse or minor children. In such a case, a
bonus of 5% of each premium deposit may be credited to the Policy due to lower
acquisition costs AUSA experiences on those purchases. Compensation to the
registered representative and broker/dealer will be reduced by the amount of
such bonus.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

The following summary does not constitute tax advice. It is a general
discussion of certain of the expected federal income tax consequences of
investment in and distributions with respect to a Policy, based on the Internal
Revenue Code of 1986, as amended (the "Code"), proposed and final Treasury
Regulations thereunder, judicial authority, and current

- 42 -
<PAGE>

administrative rulings and practice. This summary discusses only certain
federal income tax consequences to "United States Persons," and does not
discuss state, local, or foreign tax consequences. United States Persons means
citizens or residents of the United States, domestic corporations, domestic
partnerships and trusts or estates that are subject to United States federal
income tax regardless of the source of their income.

At the time the initial Premium Payment is paid, a prospective purchaser must
specify whether he or she is purchasing a Nonqualified Policy or a Qualified
Policy. If the initial Premium Payment is derived from an exchange or surrender
of another annuity policy, AUSA may require that the prospective purchaser
provide information with regard to the federal income tax status of the
previous annuity policy. AUSA will require that persons purchase separate
Policies if they desire to invest monies qualifying for different annuity tax
treatment under the Code. Each such separate Policy would require the minimum
initial Premium Payment stated above. Additional Premium Payments under a
Policy must qualify for the same federal income tax treatment as the initial
Premium Payment under the Policy; AUSA will not accept an additional Premium
Payment under a Policy if the federal income tax treatment of such Premium
Payment would be different from that of the initial Premium Payment.

The Qualified Policies were designed for use by retirement plans and
individual retirement accounts that qualify for special federal income tax
treatment under Sections 401(a), 403(b), or 408(a) of the Code and individuals
purchasing individual retirement annuities that qualify for special federal
income tax treatment under Section 408(b) of the Code. Certain requirements
must be satisfied in purchasing a Qualified Policy in order for the plan,
account or annuity to retain its special tax treatment. This summary is not
intended to cover such requirements, and assumes that Qualified Policies are
purchased pursuant to retirement plans or individual retirement accounts, or
are individual retirement annuities, that qualify for such special tax
treatment. This summary was prepared by AUSA after consultation with tax
counsel, but no opinion of tax counsel has been obtained.

THE DISCUSSION SET FORTH BELOW IS INCLUDED FOR GENERAL PURPOSES ONLY. EACH
POTENTIAL PURCHASER IS URGED TO CONSULT HIS/HER OWN TAX ADVISER AS TO THE
CONSEQUENCES OF INVESTMENT IN A POLICY UNDER FEDERAL AND APPLICABLE STATE,
LOCAL AND FOREIGN TAX LAWS.

TAX STATUS OF THE POLICY

The following discussion is based on the assumption that the Policy qualifies
as an annuity contract for federal income tax purposes. The Statement of
Additional Information discusses the tax requirements for qualifying as an
annuity contract.

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<PAGE>

TAXATION OF ANNUITIES

The discussion below applies only to those Policies owned by natural persons,
and that qualify as annuity contracts for federal income tax purposes. With
respect to Owners who are natural persons, the Policy should be treated as an
annuity contract for federal income tax purposes.

In General. Except as described below with respect to Owners who are not
natural persons, an Owner who holds a Policy satisfying the diversification and
distribution requirements described in the Statement of Additional Information
should not be taxed on increases in the Policy Value until an amount is
received or deemed received, e.g., upon a partial or full surrender or as
Annuity Payments under the Annuity Option selected. Generally, any amount
received or deemed received under a Nonqualified Annuity Contract prior to the
Annuity Commencement Date is deemed to come first from any "Income on the
Contract" and then from the "Investment in the Contract." The "Investment in
the Contract" generally equals total premium payments less amounts received
which were not includable in gross income. To the extent that the Policy Value
(ignoring any surrender charges except on a full surrender) exceeds the
"Investment in the Contract," such excess constitutes the "Income on the
Contract." As a result, any such amount received or deemed received (i) shall
be includable in gross income to the extent that such amount does not exceed
any such "Income on the Contract," and (ii) shall not be includable in gross
income to the extent that such amount does exceed any such "Income on the
Contract." For these purposes such "Income on the Contract" shall be computed
by reference to the aggregation rules described below, and the amount
includable in gross income will be taxable as ordinary income. If at the time
that any amount is received or deemed received there is no "Income on the
Contract" (e.g., because the gross Policy Value does not exceed the "Investment
in the Contract" and no aggregation rule applies), then such amount received or
deemed received will not be includable in gross income, and will simply reduce
the "Investment in the Contract."

For this purpose, the assignment, pledge or agreement to assign or pledge any
portion of the Policy Value (including assignment of Owner's right to receive
Annuity Payments prior to the Annuity Commencement Date) generally will be
treated as a distribution in the amount of such portion of the Policy Value.
Additionally, if an Owner designates a new Owner prior to the Annuity
Commencement Date without receiving full and adequate consideration, the old
Owner generally will be treated as receiving a distribution under the Policy in
an amount equal to the Policy Value. A transfer of ownership or an assignment
of a Policy, or designation of an Annuitant or Beneficiary who is not also the
Owner, may result in certain tax consequences to the Owner that are not
discussed herein. An Owner contemplating any such transfer, designation or
assignment of a Policy should contact a competent tax adviser with respect to
the potential tax effects of such a transaction.

Aggregation Rules. Generally all nonqualified deferred annuity contracts
issued by the same company (or an affiliated company) to the

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<PAGE>

same owner during any calendar year shall be treated as one annuity contract,
and "aggregated" for purposes of determining the amount includable in gross
income. In addition, for such purposes all individual retirement annuities and
accounts under Section 408 of the Code for an individual are aggregated, and
generally all distributions therefrom during a calendar year are treated as one
distribution made as of the end of such year.

Surrenders. In the case of a partial surrender (including systematic
withdrawals) under a Nonqualified Policy, the amount received generally will be
includable in gross income only up to the amount of the "Income on the
Contract." In the case of a partial surrender (including systematic
withdrawals) under a Qualified Policy, a ratable portion of the amount received
is taxable, generally based on the ratio of the "Investment in the Contract" to
the individual's total accrued benefit under the retirement plan. For a Policy
issued in connection with qualified plans, the "Investment in the Contract" can
be zero. Special tax rules may be available for certain distributions from a
Qualified Policy. In the case of a full surrender under a Nonqualified Policy
or a Qualified Policy, the amount received generally will be taxable only to
the extent it exceeds the "Investment in the Contract."

Annuity Payments. Although the tax consequences may vary depending on the
Annuity Payment Option elected under the Policy, in general, only the portion
of the Annuity Payments received after the Annuity Commencement Date that
represent the amount by which the Annuity Purchase Value exceeds the
"Investment in the Contract" will be includable in the gross income of the
recipient. After the "Investment in the Contract" is recovered, the full amount
of any additional Annuity Payments is includable in gross income.

For Variable Annuity Payments, the taxable portion is generally determined by
an equation that establishes a specific dollar amount of each payment that is
not taxed. The dollar amount is determined by dividing the "Investment in the
Contract" by the total number of expected periodic payments. However, the
entire distribution will be taxable once the recipient has recovered the dollar
amount of his or her "Investment in the Contract."

For Fixed Annuity Payments, in general there is no tax on the portion of each
payment which represents the same ratio that the "Investment in the Contract"
bears to the total expected value of the Annuity Payments for the term of the
payments; however, the remainder of each Annuity Payment is includable in gross
income. Once the "Investment in the Contract" has been fully recovered, the
full amount of any additional Annuity Payments is includable in gross income.

If, after the Annuity Commencement Date, Annuity Payments cease by reason of
the death of the Annuitant, the excess (if any) of the "Investment in the
Contract" as of the Annuity Commencement Date over the aggregate amount of
Annuity Payments received on or after the

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<PAGE>

Annuity Commencement Date that was excluded from gross income is allowable as a
deduction for the last taxable year of the Annuitant.

Penalty Taxes. In the case of any amount received or deemed received from the
Policy, e.g., upon a surrender of a Policy or a deemed distribution under a
Policy resulting from a pledge, assignment or agreement to pledge or assign or
an Annuity Payment with respect to a Policy, there may be imposed on the
recipient a federal penalty tax equal to 10% of the amount includable in gross
income. The penalty tax generally will not apply to any distribution: (i) made
on or after the date on which the taxpayer attains age 59 1/2; (ii) made as a
result of the death of the holder (generally the Owner); (iii) attributable to
the disability of the taxpayer; or (iv) which is part of a series of
substantially equal periodic payments made (not less frequently than annually)
for the life (or life expectancy) of the taxpayer or the joint lives (or joint
life expectancies) of such taxpayer and his/her beneficiary. Other rules may
apply to Qualified Policies.

Withholding. The portion of any distribution under a Policy that is
includable in gross income will be subject to federal income tax withholding
unless the recipient of such distribution elects not to have federal income tax
withheld. Election forms will be provided at the time distributions are
requested or made. Effective January 1, 1993, certain distributions from
section 401(a), 403(a) and 403(b) are subject to mandatory withholding.

Qualified Policies. The Qualified Policy is designed for use with several
types of retirement plans. The tax rules applicable to participants and
beneficiaries in retirement plans vary according to the type of plan and the
terms and conditions of the plan. Special favorable tax treatment may be
available for certain types of contributions and distributions. Adverse tax
consequences may result from contributions in excess of specified limits;
distributions prior to age 59 1/2 (subject to certain exceptions);
distributions that do not conform to specified commencement and minimum
distribution rules; aggregate distributions in excess of a specified annual
amount; and in other specified circumstances.

AUSA makes no attempt to provide more than general information about use of
the Policy with the various types of retirement plans. Purchasers of Policies
for use with any retirement plan should consult their legal counsel and tax
adviser regarding the suitability of the Policy.

Individual Retirement Annuities. In order to qualify as an individual
retirement annuity under Section 408(b) of the Code, a Policy must contain
certain provisions: (i) the Owner must be the Annuitant; (ii) the Policy may
not be transferable by the Owner, e.g., the Owner may not designate a new
Owner, a Successor Owner or assign the Policy as collateral security; (iii) the
total Premium Payments for any calendar year may not exceed $2,000, unless the
portion of such Premium

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<PAGE>

Payments in excess of $2,000 qualifies as a rollover amount or contribution
under Section 402(c) or 408(d)(3) of the Code; (iv) Annuity Payments or
withdrawals must begin no later than April 1 of the calendar year following the
calendar year in which the Annuitant attains age 70 1/2; (v) an Annuity Payment
Option with a Period Certain that will guarantee Annuity Payments beyond the
life expectancy of the Annuitant and the Beneficiary may not be selected; and
(vi) certain payments of Death Benefits must be made in the event the Annuitant
dies prior to the distribution of the Policy Value. Policies intended to
qualify as individual retirement annuities under Section 408(b) of the Code
contain such provisions. The Internal Revenue Service has not reviewed the
Policy for qualification as an IRA, and has not addressed in a ruling of
general applicability whether a death benefit provision such as the provision
in the Policy comports with IRA qualification requirements.

Section 408 of the Code also indicates that no part of the funds for an
individual retirement account or annuity should be invested in a life insurance
contract, but the regulations thereunder allow such funds to be invested in an
annuity contract that provides a death benefit that equals the greater of the
premiums paid or the cash value for the contract. The Policy provides an
enhanced death benefit that could exceed the amount of such a permissible death
benefit, but it is unclear to what extent such an enhanced death benefit could
disqualify the Policy under Section 408 of the Code.

Section 403(b) Plans. Under Section 403(b) of the Code, payments made by
public school systems and certain tax exempt organizations to purchase Policies
for their employees are excludable from the gross income of the employee,
subject to certain limitations. However, such payments may be subject to FICA
(Social Security) taxes. Additionally, in accordance with the requirements of
the Code, Section 403(b) annuities generally may not permit distribution of (i)
elective contributions made in years beginning after December 31, 1988, and
(ii) earnings on those contributions and (iii) earnings on amounts attributed
to elective contributions held as of the end of the last year beginning before
January 1, 1989. Distributions of such amounts will be allowed only upon the
death of the employee, on or after attainment of age 59 1/2, separation from
service, disability, or financial hardship, except that income attributable to
elective contributions may not be distributed in the case of hardship.

Corporate Pension and Profit-Sharing Plans and H.R. 10 Plans. Section 401(a)
and 403(a) of the Code permit corporate employers to establish various types of
retirement plans for employees and self-employed individuals to establish
qualified plans for themselves and their employees. Such retirement plans may
permit the purchase of the Policies to accumulate retirement savings. Adverse
tax consequences to the plan, the participant, or both may result if the Policy
is assigned or transferred to any individual as a means to provide benefit
payments.

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<PAGE>

Deferred Compensation Plans. Section 457 of the Code, while not actually
providing for a qualified plan as that term is normally used, provides for
certain deferred compensation plans with respect to service for state
governments, local governments, political sub-divisions, agencies,
instrumentalities and certain affiliates of such entities and tax exempt
organizations which enjoy special treatment. The Policies can be used with such
plans. Under such plans a participant may specify the form of investment in
which his or her participation will be made. All such investments, however, are
owned by, and are subject to, the claims of the general creditors of the
sponsoring employer. Depending on the terms of the particular plan, the
employer may be entitled to draw on deferred amounts for purposes unrelated to
its Section 457 plan obligations. In general, all amounts required under a
Section 457 Plan are taxable and are subject to federal income tax withholding
as wages.

Non-natural Persons. Pursuant to Section 72(u) of the Code, an annuity
contract held by a taxpayer other than a natural person generally will not be
treated as an annuity contract under the Code; accordingly, an Owner who is not
a natural person will recognize as ordinary income for a taxable year the
excess of (i) the sum of the Cash Value as of the close of the taxable year and
all previous distributions under the Policy over (ii) the sum of the Premium
Payments paid for the taxable year and any prior taxable year and the amounts
includable in gross income for any prior taxable year with respect to the
Policy. Notwithstanding the preceding sentence, Section 72(u) of the Code does
not apply to (i) a Policy the nominal Owner of which is not a natural person
but the beneficial Owner of which is a natural person, (ii) a Policy acquired
by the estate of a decedent by reason of such decedent's death (iii) a
Qualified Policy or (iv) a single-payment annuity the Annuity Commencement Date
for which is no later than one year from the date of the single Premium
Payment; instead, such Policies are taxed as described above under the heading
"Taxation of Annuities."

Possible Changes in Taxation. In past years, legislation has been proposed in
the U.S. Congress that would have adversely modified the federal taxation of
certain annuities. For example, one such proposal would have changed the tax
treatment of non-qualified annuities that did not have "substantial life
contingencies" by taxing income as it is credited to the annuity. Although as
of the date of this Prospectus Congress was not actively considering any
legislation regarding the taxation of annuities, there is always the
possibility that the tax treatment of annuities could change by legislation or
other means (such as IRS regulations, revenue rulings, judicial decisions,
etc.). Moreover, it is also possible that any change could be retroactive (that
is, effective prior to the date of the change).

DISTRIBUTOR OF THE POLICIES

AEGON USA Securities, Inc., an affiliate of AUSA, is the principal
underwriter of the Policies. AEGON USA Securities, Inc. has entered or

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<PAGE>

will enter into one or more contracts with various broker-dealers for the
distribution of the Policies. Commissions and expense allowances on Policy
sales are paid to dealers. Commissions and expense allowances payable to a
broker-dealer will be up to 4 1/2% of Premium Payments. In addition, certain
broker-dealers may receive additional commissions and certain expense
allowances based upon the attainment of specific sales volume targets and other
factors. These commissions and expense allowances are not deducted from Premium
Payments, they are paid by AUSA.

VOTING RIGHTS

To the extent required by law, AUSA will vote the Underlying Funds shares
held by the Mutual Fund Account at regular and special shareholder meetings of
the Underlying Funds in accordance with instructions received from persons
having voting interests in the portfolios. If, however, the 1940 Act or any
regulation thereunder should be amended or if the present interpretation
thereof should be amended or if the present interpretation thereof should
change, and as a result AUSA determines that it is permitted to vote the
Underlying Funds' shares in its own right, it may elect to do so.

Before the Annuity Commencement Date, the Policy Owner holds the voting
interest in the selected Portfolios. The number of votes that an Owner has the
right to instruct will be calculated separately for each Subaccount. The number
of votes that an Owner has the right to instruct for a particular Subaccount
will be determined by dividing his or her Policy Value in the Subaccount by the
net asset value per share of the corresponding Portfolio in which the
Subaccount invests. Fractional shares will be counted.

After the Annuity Commencement Date, the person receiving Annuity Payments
has the voting interest, and the number of votes decreases as Annuity Payments
are made and as the reserves for the Policy decrease. The person's number of
votes will be determined by dividing the reserve for the Policy allocated to
the applicable Subaccount by the net asset value per share of the corresponding
Portfolio. Fractional shares will be counted.

The number of votes that the Owner or person receiving income payments has
the right to instruct will be determined as of the date established by the
Underlying Funds for determining shareholders eligible to vote at the meeting
of the Underlying Funds. AUSA will solicit voting instructions by sending
Owners or other persons entitled to vote written requests for instructions
prior to that meeting in accordance with procedures established by the
Underlying Funds. Portfolio shares as to which no timely instructions are
received and shares held by AUSA in which Owners or other persons entitled to
vote have no beneficial interest will be voted in proportion to the voting
instructions that are

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<PAGE>

received with respect to all Policies participating in the same Subaccount.

Each person having a voting interest in a Subaccount will receive proxy
material, reports, and other materials relating to the appropriate Portfolio.

LEGAL PROCEEDINGS

There are no legal proceedings to which the Mutual Fund Account is a party or
to which the assets of the Account are subject. AUSA is not involved in any
litigation that is of material importance in relation to its total assets or
that relates to the Mutual Fund Account.

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<PAGE>

STATEMENT OF ADDITIONAL INFORMATION

A Statement of Additional Information is available (at no cost) which
contains more details concerning the subjects discussed in this Prospectus. The
following is the Table of Contents for that Statement:

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
The Policy--General Provisions............................................. 3
Owner.................................................................... 3
Entire Policy............................................................ 3
Deferment of Payment and Transfers....................................... 3
Misstatement of Age or Sex............................................... 4
Reallocation of Policy Values After the Annuity Commencement Date........ 4
Assignment............................................................... 4
Evidence of Survival..................................................... 4
Amendments............................................................... 4
Federal Tax Matters........................................................ 5
Tax Status of the Policy................................................. 5
Taxation of AUSA......................................................... 5
Investment Experience...................................................... 6
State Regulation of AUSA................................................... 10
Records and Reports........................................................ 10
Distribution of the Policies............................................... 10
Custody of Assets.......................................................... 10
Historical Performance Data................................................ 10
Money Market Yields...................................................... 10
Other Subaccount Yields.................................................. 11
Total Returns............................................................ 12
Other Performance Data................................................... 13
Legal Matters.............................................................. 13
Independent Auditors....................................................... 13
Other Information.......................................................... 13
Financial Statements....................................................... 14
</TABLE>

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<PAGE>

STATEMENT OF ADDITIONAL INFORMATION

THE ENDEAVOR VARIABLE ANNUITY

Issued through

AUSA ENDEAVOR VARIABLE
ANNUITY ACCOUNT

Offered by
AUSA LIFE INSURANCE COMPANY, INC.

666 Fifth Avenue
New York, New York 10103

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

This Statement of Additional information expands upon subjects discussed in
the current Prospectus for the Endeavor Variable Annuity Policy (the "Policy")
offered by AUSA Life Insurance Company, Inc. You may obtain a copy of the
Prospectus dated May 1, 1995 by calling 1-800-525-6205, or by writing to the
Service Office, Financial Markets Division--Variable Annuity Dept., 4333
Edgewood Road, N.E., Cedar Rapids, Iowa 52499. Terms used in the current
Prospectus for the Policy are incorporated in this Statement.

THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND SHOULD BE
READ ONLY IN CONJUNCTION WITH THE PROSPECTUSES FOR THE POLICY, ENDEAVOR SERIES
TRUST AND THE WRL GROWTH PORTFOLIO OF THE WRL SERIES FUND, INC.

Dated: May 1, 1995

- 1 -
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
The Policy-General Provisions............................................ 3
Owner.................................................................. 3
Entire Policy.......................................................... 3
Deferment of Payment and Transfers..................................... 3
Misstatement of Age or Sex............................................. 4
Reallocation of Policy Values After the Annuity Commencement Date...... 4
Assignment............................................................. 4
Evidence of Survival................................................... 4
Amendments............................................................. 4
Federal Tax Matters (42)................................................. 5
Tax Status of the Policy............................................... 5
Taxation of AUSA....................................................... 5
Investment Experience.................................................... 6
State Regulation of AUSA................................................. 10
Records and Reports...................................................... 10
Distribution of the Policies (48)........................................ 10
Custody of Assets........................................................ 10
Historical Performance Data (16)......................................... 10
Money Market Yields.................................................... 10
Other Subaccount Yields................................................ 11
Total Returns.......................................................... 12
Other Performance Data................................................. 13
Legal Matters............................................................ 13
Independent Auditors..................................................... 13
Other Information........................................................ 13
Financial Statements (16)................................................ 14
</TABLE>

(Numbers in parenthesis indicate corresponding sections of the Prospectus).

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<PAGE>

In order to supplement the description in the Prospectus, the following
provides additional information about AUSA and the Policy which may be of
interest to an Owner.

THE POLICY--GENERAL PROVISIONS

OWNER

The Policy shall belong to the Policy Owner upon issuance of the Policy after
completion of an application and delivery of the initial Premium Payment. While
the Annuitant is living, the Owner may: (1) assign the Policy; (2) surrender
the Policy; (3) amend or modify the Policy with AUSA's consent; (4) receive
annuity payments or name a Payee to receive the payments; and (5) exercise,
receive and enjoy every other right and benefit contained in the Policy. The
exercise of these rights may be subject to the consent of any assignee or
irrevocable Beneficiary.

A Successor Owner can be named in the Policy application or in a Written
Notice. The Successor Owner will become the new Owner upon the Owner's death,
if the Owner predeceases the Annuitant. If no Successor Owner survives the
Owner and the Owner predeceases the Annuitant, the Owner's estate will become
the Owner.

The Owner may change the ownership of the Policy in a Written Notice. When
this change takes effect, all rights of ownership in the Policy will pass to
the new Owner.

When there is a change of Owner or Successor Owner, the change will take
effect as of the date the Owner signs the Written Notice, subject to any
payment AUSA has made or action AUSA has taken before recording the change.
Changing the Owner or naming a new Successor Owner cancels any prior choice of
Successor Owner, but does not change the designation of the Beneficiary or the
Annuitant.

If ownership is transferred (except to the Owner's spouse) because the Owner
dies before the Annuitant, the Cash Value generally must be distributed to the
Successor Owner within five years of the Owner's death, or payments must be
made for a period certain or for the Successor Owner's lifetime so long as any
period certain does not exceed that Successor Owner's life expectancy, if the
first payment begins within one year of the Owner's death.

ENTIRE POLICY

The Policy and any endorsements thereon and the Policy application constitute
the entire contract between AUSA and the Owner. All statements in the
application are representations and not warranties. No statement will cause the
Policy to be void or to be used in defense of a claim unless contained in the
application.

DEFERMENT OF PAYMENT AND TRANSFERS

Payment of any amount due from the Mutual Fund Account in respect of a
surrender, the Death Benefit or the death of the Owner of a Nonqualified Policy
generally will occur within seven business days from the date the Written
Notice (and any other required documentation or information) is received,
except that AUSA may be permitted to defer such payment from the Mutual Fund
Account if: (1) the New York Stock Exchange is closed for other than usual
weekends or holidays or trading on the Exchange is otherwise restricted; or (2)
an emergency exists as defined by the SEC or the SEC requires that trading be
restricted; or (3) the SEC permits a delay for the protection of Owners. In
addition, transfers of amounts from the Subaccounts may be deferred under these
circumstances.

- 3 -
<PAGE>

Certain delays and restrictions apply to transfers of amounts out of the
Fixed Account. See page 24 of the Policy Prospectus.

MISSTATEMENT OF AGE OR SEX

If the age or sex of the Annuitant has been misstated, AUSA will change the
annuity benefit payable to that which the Premium Payments would have purchased
for the correct age or sex. The dollar amount of any underpayment made by AUSA
shall be paid in full with the next payment due such person or the Beneficiary.
The dollar amount of any overpayment made by AUSA due to any misstatement shall
be deducted from payments subsequently accruing to such person or Beneficiary.
Any underpayment or overpayment will include interest at 5% per year, from the
date of the wrong payment to the date of the adjustment. The age of the
Annuitant may be established at any time by the submission of proof
satisfactory to AUSA.

REALLOCATION OF POLICY VALUES AFTER THE ANNUITY COMMENCEMENT DATE

After the Annuity Commencement Date, the Policy Owner may reallocate the
value of a designated number of Annuity Units of a Subaccount of the Mutual
Fund Account then credited to a Policy into an equal value of Annuity Units of
one or more other Subaccounts of the Mutual Fund Account, or the Fixed Account.
The reallocation shall be based on the relative value of the Annuity Units of
the Account(s) or Subaccount(s) at the end of the Business Day on the next
payment date. The minimum amount which may be reallocated is the lesser of (1)
$10 of monthly income or (2) the entire monthly income of the Annuity Units in
the Account or Subaccount from which the transfer is being made. If the monthly
income of the Annuity Units remaining in an Account or Subaccount after a
reallocation is less than $10, AUSA reserves the right to include the value of
those Annuity Units as part of the transfer. The request must be in writing to
AUSA's Service Office. There is no charge assessed in connection with such
reallocation. AUSA reserves the right to limit the number of times a
reallocation of Policy Value may be made in any given Policy Year.

ASSIGNMENT

During the lifetime of the Annuitant the Policy Owner may assign any rights
or benefits provided by the Policy. An assignment will not be binding on AUSA
until a copy has been filed at its Service Office. The rights and benefits of
the Policy Owner and Beneficiary are subject to the rights of the assignee.
AUSA assumes no responsibility for the validity or effect of any assignment.
Any claim made under an assignment shall be subject to proof of interest and
the extent of the assignment. An assignment may have tax consequences.

Unless the Policy Owner so directs by filing written notice with AUSA, no
Beneficiary may assign any payments under the Policy before they are due. To
the extent permitted by law, no payments will be subject to the claims of any
Beneficiary's creditors.

EVIDENCE OF SURVIVAL

AUSA reserves the right to require satisfactory evidence that a person is
alive if a payment is based on that person being alive. No payment will be made
until AUSA receives such evidence.

AMENDMENTS

No change in the Policy is valid unless made in writing by AUSA and approved
by one of AUSA's officers. No Registered Representative has authority to change
or waive any provision of the Policy.

- 4 -
<PAGE>

AUSA reserves the right to amend the Policies to meet the requirements of the
Internal Revenue Code, regulations or published rulings. A Policy Owner can
refuse such a change by giving Written Notice, but a refusal may result in
adverse tax consequences.

FEDERAL TAX MATTERS

TAX STATUS OF THE POLICY

Diversification Requirements. Section 817(h) of the Code provides that in
order for a variable contract which is based on a segregated asset account to
qualify as an annuity contract under the Code, the investments made by such
account must be "adequately diversified" in accordance with Treasury
regulations. The Treasury regulations issued under Section 817(h) (Treas. Reg.
(S) 1.817-5) apply a diversification requirement to each of the Subaccounts of
the Mutual Fund Account. The Mutual Fund Account, through the Underlying Funds
and their Portfolios, intend to comply with the diversification requirements of
the Treasury. AUSA has entered into agreements regarding participation in the
Endeavor Series Trust and WRL Series Fund, Inc. that require the Underlying
Funds and their Portfolios to be operated in compliance with the Treasury
regulations.

Owner Control. In connection with the issuance of temporary regulations on
diversification requirements, the Treasury also announced that such regulations
do not provide guidance concerning the extent to which Owners may direct their
investments to the Subaccounts of the Mutual Fund Account. It is not clear
whether additional guidance in this regard will be provided nor whether, if
provided, it will be prospective only. It is possible that any such guidance
could treat an Owner as the owner of the assets of the Mutual Fund Account if a
Subaccount is too narrow in its investment strategy (e.g., a fund that invests
only in gold or stock of gold mining companies) or if Owners have too many
subaccount options to select, even though it technically meets the
diversification requirements. It is possible that if any guidance is provided
then the Mutual Fund Account may not be in compliance. AUSA can provide no
assurances that any such guidance will not adversely affect the tax treatment
of existing Policies. For these reasons, AUSA reserves the right to modify the
Policy as necessary to prevent the Owner from being considered the owner of the
assets of the Mutual Fund Account or otherwise to qualify the Policy for
favorable tax treatment.

Distribution Requirements. The Code also requires that Nonqualified Policies
contain specific provisions for distribution of Policy proceeds upon the death
of the Owner. In order to be treated as an annuity contract for federal income
tax purposes, the Code requires that such Policies provide that if any Owner
dies on or after the Annuity Commencement Date and before the entire interest
in the Policy has been distributed, the remaining portion must be distributed
at least as rapidly as under the method in effect on such Owner's death. If any
Owner dies before the Annuity Commencement Date, the entire interest in the
Policy must generally be distributed within 5 years after such Owner's date of
death or be used to purchase an immediate annuity under which payments will
begin within one year of such Owner's death and will be made for the life of
the Beneficiary or for a period not extending beyond the life expectancy of the
Beneficiary. However, if upon such Owner's death prior to the Annuity
Commencement Date, such Owner's surviving spouse becomes the sole new Owner
under the Policy, then the Policy may be continued with the surviving spouse as
the new Owner. If any Owner is not a natural person, then for purposes of these
distribution requirements, the primary Annuitant shall be treated as the Owner,
and any death or change of such primary Annuitant shall be treated as the death
of the Owner. The Policy contains provisions intended to comply with these
requirements of the Code. No regulations interpreting these requirements of the
Code have yet been issued and thus no assurance can be given that the
provisions contained in the Policies satisfy all such Code requirements. The
provisions contained in the Policies will be reviewed and modified if necessary
to assure that they comply with the Code requirements when clarified by
regulation or otherwise.

- 5 -
<PAGE>

TAXATION OF AUSA

AUSA at present is taxed as a life insurance company under part I of
Subchapter L of the Code. The Mutual Fund Account is treated as part of AUSA
and, accordingly, will not be taxed separately as a "regulated investment
company" under Subchapter M of the Code. AUSA does not expect to incur any
federal income tax liability with respect to investment income and net capital
gains arising from the activities of the Mutual Fund Account retained as part
of the reserves under the Policy. Based on this expectation, it is anticipated
that no charges will be made against the Mutual Fund Account for federal income
taxes. If, in future years, any federal income taxes are incurred by AUSA with
respect to the Mutual Fund Account, AUSA may make a charge to the Mutual Fund
Account.

INVESTMENT EXPERIENCE

An "Investment Experience Factor" is used to determine the value of
Accumulation Units and Annuity Units, and to determine annuity payment rates.

ACCUMULATION UNITS

Upon allocation to the selected Subaccount, Premium Payments are converted
into Accumulation Units of the Subaccount. The number of Accumulation Units to
be credited is determined by dividing the dollar amount allocated to each
Subaccount by the value of an Accumulation Unit for that Subaccount as next
determined after the Premium Payment is received at the Service Office or, in
the case of the initial Premium Payment, when the Policy application is
completed, whichever is later. The value of an Accumulation Unit was
arbitrarily established at $1 (except the WRL Growth Subaccount which was
established at $10) at the inception of each Subaccount. Thereafter, the value
of an Accumulation Unit is determined as of the close of trading on each day
the New York Stock Exchange and AUSA's Service Office are open for business.

An index (the "Investment Experience Factor") which measures the investment
performance of a Subaccount during a Valuation Period is used to determine the
value of an Accumulation Unit for the next subsequent Valuation Period. The
Investment Experience Factor may be greater or less than or equal to one;
therefore, the value of an Accumulation Unit may increase, decrease or remain
the same from one Valuation Period to the next. The Policy Owner bears this
investment risk. The Net Investment Performance of a Subaccount and deduction
of certain charges affects the Accumulation Unit Value.

The Investment Experience Factor for any Subaccount for any Valuation Period
is determined by dividing (a) by (b) and subtracting (c) from the result,
where:

(a) is the net result of:

(1) the net asset value per share of the shares held in the
Subaccount determined at the end of the current Valuation Period, plus

(2) The per share amount of any dividend or capital gain distribution
made with respect to the shares held in the Subaccount if the ex-
dividend date occurs during the current Valuation Period, plus or minus

(3) a per share charge or credit for any taxes determined by AUSA to
have resulted from the investment operations of the Subaccount and for
which it has created a reserve;

(b) is the net result of:

(1) the net asset value per share of the shares held in the
Subaccount determined as of the end of the immediately preceding
Valuation Period, plus or minus

(2) the per share charge or credit for taxes pertaining to the
immediately preceding Valuation Period for which AUSA has created a
reserve; and

- 6 -
<PAGE>

(c) is the charge for mortality and expense risk during the Valuation
Period equal on an annual basis to 1.25% of the daily net asset value of
the Subaccount, plus the .15% administrative charge.

ILLUSTRATION OF ACCUMULATION UNIT VALUE CALCULATIONS

FORMULA AND ILLUSTRATION FOR DETERMINING
THE INVESTMENT EXPERIENCE FACTOR

Investment Experience Factor = A + B -- C -- F
----------
D -- E

Where: A = The Net Asset Value of an Underlying Fund share as of the end of
the current
Valuation Period.
Assume..........................................A = $11.57

B = The per share amount of any dividend or capital gains distribution
since the end of
the immediately preceding Valuation Period.
Assume...............................................B = 0

C = The per share charge or credit for any taxes reserved for at the
end of the current
Valuation Period.
Assume...............................................C = 0

D = The Net Asset Value of an Underlying Fund share at the end of the
immediately
preceding Valuation Period.
Assume..........................................D = $11.40

E = The per share amount of any taxes reserved for at the end of the
immediately
preceding Valuation Period.
Assume...............................................E = 0

F = The daily deduction for mortality and expense risk and
administrative
charges, which totals 1.40% on an annual basis.
On a daily basis............................ = .0000380909
<TABLE>
<S> <C>
Then, the Investment Experience Factor = 11.57 -- 0 -- 0 -- .0000380909 = Z = 1.0148741898
---------------
11.40 -- 0
</TABLE>

FORMULA AND ILLUSTRATION FOR DETERMINING ACCUMULATION UNIT VALUE

Accumulation Unit Value = A x B

Where: A = The Accumulation Unit Value for the immediately preceding
Valuation Period.
Assume.............................................. = $ X

B = The Net Investment Factor for the current Valuation Period.
Assume................................................ = Y

Then, the Accumulation Unit Value = $ X x Y = $ Z

- 7 -
<PAGE>

ANNUITY UNIT VALUE AND ANNUITY PAYMENT RATES

The amount of Variable Annuity Payments will vary with Annuity Unit Values.
Annuity Unit Values rise if the net investment performance of the Subaccount
exceeds the assumed interest rate of 5% annually. Conversely, Annuity Unit
Values fall if the net investment performance of the Subaccount is less than
the assumed rate. The value of a Variable Annuity Unit in each Subaccount was
established at $1.00 on the date operations began for that Subaccount. The
value of a Variable Annuity Unit on any subsequent Business Day is equal to (a)
multiplied by (b) multiplied by (c), where:

(a) is the variable Annuity Unit Value on the immediately preceding
Business Day;

(b) is the net investment factor of the valuation period; and

The investment result adjustment factor for the valuation period is the
product of discount factors of .99986634 per day to recognize the 5% effective
annual Assumed Investment Return. The valuation period is the period from the
close of the immediately preceding Business Day to the close of the current
Business Day.

The net investment factor for the Policy used to calculate the value of a
variable Annuity Unit in each Subaccount for the valuation period is determined
by dividing (i) by (ii) and subtracting (iii) from the result, where:

(i) is the result of:

(1) the net asset value of a fund share held in the Mutual Fund
Account for that Subaccount determined at the end of the current
valuation period; plus

(2) the per share amount of any dividend or capital gain
distributions made by the fund for shares held in the Mutual Fund
Account for that Subaccount if the ex-dividend date occurs during the
valuation period.

(ii) is the net asset value of a fund share held in the Mutual Fund
Account for that Subaccount determined as of the end of the immediately
preceding valuation period.

(iii) is a factor representing the mortality and expense risk fee and
administrative charge. This factor is equal, on an annual basis, to 1.40%
of the daily net asset value of a fund share held in the Mutual Fund
Account for that Subaccount.

The dollar amount of subsequent Variable Annuity Payments will depend upon
changes in applicable Annuity Unit Values.

The annuity payment rates vary according to the Annuity Option elected and
the sex and adjusted age of the Annuitant at the Annuity Commencement Date. The
Policy also contains a table for determining the adjusted age of the Annuitant.

- 8 -
<PAGE>

ILLUSTRATION OF CALCULATIONS FOR ANNUITY UNIT VALUE
AND VARIABLE ANNUITY PAYMENTS

FORMULA AND ILLUSTRATION FOR DETERMINING ANNUITY UNIT VALUE

Annuity Unit Value = A x B x C

Where: A = Annuity Unit Value for the immediately preceding Valuation Period.
Assume.............................................. = $ X

B = Investment Experience Factor for the Valuation Period for which
the Annuity Unit
value is being calculated.
Assume................................................ = Y

C = A factor to neutralize the assumed interest rate of 5% built into
the Annuity Tables
used.
Assume................................................ = Z

Then, the Annuity Unit Value is:
$ X x Y x Z = $ Q

FORMULA AND ILLUSTRATION FOR DETERMINING AMOUNT OF FIRST MONTHLY VARIABLE
ANNUITY PAYMENT

First Monthly Variable Annuity Payment = A x B
-------
$1,000

Where: A = The Policy Value as of the Annuity Commencement Date.
Assume.............................................. = $ X

B = The Annuity purchase rate per $1,000 based upon the option
selected, the sex and
adjusted age of the Annuitant according to the tables contained in
the Policy.
Assume.............................................. = $ Y

Then, the first Monthly Variable Annuity
Payment = $ X x $ Y = $ Z
-----
1,000

FORMULA AND ILLUSTRATION FOR DETERMINING THE NUMBER OF ANNUITY UNITS
REPRESENTED BY EACH MONTHLY VARIABLE ANNUITY PAYMENT

Number of Annuity Units = A
-
B

Where: A = The dollar amount of the first monthly Variable Annuity Payment.
Assume.............................................. = $ X

B = The Annuity Unit Value for the Valuation Date on which the first
monthly payment is due.
Assume.............................................. = $ Y

Then, the number of Annuity Units = $ X = Z
-----
$ Y

- 9 -
<PAGE>

STATE REGULATION OF AUSA

AUSA is subject to the laws of New York governing insurance companies and to
regulation by the New York Department of Insurance. An annual statement in a
prescribed form is filed with the Department of Insurance each year covering
the operation of AUSA for the preceding year and its financial condition as of
the end of such year. Regulation by the Department of Insurance includes
periodic examination to determine AUSA's contract liabilities and reserves so
that the Department may determine the items are correct. AUSA's books and
accounts are subject to review by the Department of Insurance at all times and
a full examination of its operations is conducted periodically by the National
Association of Insurance Commissioners. In addition, AUSA is subject to
regulation under the insurance laws of other jurisdictions in which it may
operate.

RECORDS AND REPORTS

All records and accounts relating to the Mutual Fund Account will be
maintained by AUSA. As presently required by the Investment Company Act of 1940
and regulations promulgated thereunder, AUSA will mail to all Policy Owners at
their last known address of record, at least annually, reports containing such
information as may be required under that Act or by any other applicable law or
regulation. Policy Owners will also receive confirmation of each financial
transaction and any other reports required by law or regulation.

DISTRIBUTION OF THE POLICIES

The Policies are offered to the public through brokers licensed under the
federal securities laws and state insurance laws. The offering of the Policies
is continuous and AUSA does not anticipate discontinuing the offering of the
Policies. However, AUSA reserves the right to discontinue the offering of the
Policies.

AEGON USA Securities, Inc., an affiliate of AUSA, will be the principal
underwriter of the Policies. AEGON USA Securities, Inc. has entered into
agreements with broker-dealers for the distribution of the Policies. No
Policies had been issued as of the date of this Statement of Additional
Information, therefore no fees had been paid to AEGON USA Securities, Inc.
and/or the broker/dealers for their services.

CUSTODY OF ASSETS

The assets of each of the Subaccounts of the Mutual Fund Account are held by
AUSA. The assets of each of the Subaccounts of the Mutual Fund Account are
segregated and held separate and apart from the assets of the other Subaccounts
and from AUSA's general account assets. AUSA maintains records of all purchases
and redemptions of shares of the Underlying Funds held by each of the
Subaccounts. Additional protection for the assets of the Mutual Fund Account is
afforded by AUSA's fidelity bond, presently in the amount of $5,000,000,
covering the acts of officers and employees of AUSA.

HISTORICAL PERFORMANCE DATA

MONEY MARKET YIELDS

AUSA may from time to time disclose the current annualized yield of the Money
Market Subaccount, which invests in the Money Market Portfolio, for a 7-day
period in a manner which

- 10 -
<PAGE>

does not take into consideration any realized or unrealized gains or losses on
shares of the Money Market Portfolio or on its portfolio securities. This
current annualized yield is computed by determining the net change (exclusive
of realized gains and losses on the sale of securities and unrealized
appreciation and depreciation) at the end of the 7-day period in the value of a
hypothetical account; having a balance of 1 unit of the Money Market Subaccount
at the beginning of the 7-day period, dividing such net change in account value
by the value of the account at the beginning of the period to determine the
base period return, and annualizing this quotient on a 365-day basis. The net
change in account value reflects (i) net income from the Portfolio attributable
to the hypothetical account; and (ii) charges and deductions imposed under a
Policy that are attributable to the hypothetical account. The charges and
deductions include the per unit charges for the hypothetical account for (i)
the Administrative Charges; and (ii) the Mortality and Expense Risk Charge.
Current Yield will be calculated according to the following formula:

Current Yield = ((NCS -- ES)/UV) x (365/7)

Where:
<TABLE>
<C> <S>
NCS= The net change in the value of the Portfolio (exclusive of realized gains
and losses on the sale of securities and unrealized appreciation and
depreciation) for the 7-day period attributable to a hypothetical account
having a balance of 1 Subaccount unit.
ES= Per unit expenses of the Subaccount for the 7-day period.
UV= The unit value on the first day of the 7-day period.
</TABLE>

Because of the charges and deductions imposed under a Policy, the yield for
the Money Market Subaccount will be lower than the yield for the Money Market
Portfolio. The yield calculations do not reflect the effect of any premium
taxes or Contingent Deferred Sales Charges that may be applicable to a
particular Policy. Contingent Deferred Sales Charges range from 7% to 0% of the
amount of premium withdrawn based on the Policy Year since payment of the
premium.

AUSA may also disclose the effective yield of the Money Market Subaccount for
the same 7-day period, determined on a compounded basis. The effective yield is
calculated by compounding the base period return according to the following
formula:

Effective Yield = (1 + ((NCS -- ES)/UV))/365/7/ -- 1

The yield on amounts held in the Money Market Subaccount normally will
fluctuate on a daily basis. Therefore, the disclosed yield for any given past
period is not an indication or representation of future yields or rates of
return. The Money Market Subaccount's actual yield is affected by changes in
interest rates on money market securities, average portfolio maturity of the
Money Market Portfolio, the types and quality of portfolio securities held by
the Money Market Portfolio and its operating expenses.

OTHER SUBACCOUNT YIELDS

AUSA may from time to time advertise or disclose the current annualized yield
of one or more of the Subaccounts of the Mutual Fund Account (except the Money
Market Subaccount) for 30-day

- 11 -
<PAGE>

periods. The annualized yield of a Subaccount refers to income generated by the
Subaccount over a specific 30-day period. Because the yield is annualized, the
yield generated by a Subaccount during the 30-day period is assumed to be
generated each 30-day period over a 12-month period. The yield is computed by:
(i) dividing the net investment income of the Subaccount less Subaccount
expenses for the period, by (ii) the maximum offering price per unit on the
last day of the period times the daily average number of units outstanding for
the period, (iii) compounding that yield for a 6-month period, and (iv)
multiplying that result by 2. Expenses attributable to the Subaccount include
(i) the Administrative Charge and (ii) the Mortality and Expense Risk Charge.
The 30-day yield is calculated according to the following formula:

Yield = 2 x ((((NI -- ES)/(U x UV)) + 1)/6/ -- 1)

Where:
<TABLE>
<C> <S>
NI= Net investment income of the Subaccount for the 30-day period attributable
to the Subaccount's unit.
ES= Expenses of the Subaccount for the 30-day period.
U= The average number of units outstanding.
UV= The unit value at the close (highest) of the last day in the 30-day
period.
</TABLE>

Because of the charges and deductions imposed by the Mutual Fund Account, the
yield for a Subaccount of the Mutual Fund Account will be lower than the yield
for its corresponding Portfolio. The yield calculations do not reflect the
effect of any premium taxes that may be applicable to a particular Policy.
Contingent Deferred Sales Charges range from 7% to 0% of the amount of premium
withdrawn based on the Policy Year since payment of the premium.

The yield on amounts held in the Subaccounts of the Mutual Fund Account
normally will fluctuate over time. Therefore, the disclosed yield for any given
past period is not an indication or representation of future yields or rates of
return. A Subaccount's actual yield is affected by the types and quality of its
investments and its operating expenses.

TOTAL RETURNS

AUSA may from time to time also advertise or disclose total returns for one
or more of the Subaccounts of the Mutual Fund Account for various periods of
time. One of the periods of time will include the period measured from the date
the Subaccount commenced operations. When a Subaccount has been in operation
for 1, 5 and 10 years, respectively, the total return for these periods will be
provided. Total returns for other periods of time may from time to time also be
disclosed. Total returns represent the average annual compounded rates of
return that would equate an initial investment of $1,000 to the redemption
value of that investment as of the last day of each of the periods. The ending
date for each period for which total return quotations are provided will be for
the most recent month end practicable, considering the type and media of the
communication and will be stated in the communication.

Total returns will be calculated using Subaccount Unit Values which AUSA
calculates on each Business Day based on the performance of the Subaccount's
underlying Portfolio, and the deductions for the Mortality and Expense Risk
Charge and the Administrative Charges. Total return calculations will reflect
the effect of Contingent Deferred Sales Charges that may be applicable to a
particular period. The total return will then be calculated according to the
following formula:

P(1 + T)/n/ = ERV

- 12 -
<PAGE>

Where:
<TABLE>
<C> <S>
T= The average annual total return net of Subaccount recurring charges.
ERV= The ending redeemable value of the hypothetical account at the end of the
period.
P= A hypothetical initial payment of $1,000.
N= The number of years in the period.
</TABLE>

OTHER PERFORMANCE DATA

AUSA may from time to time also disclose average annual total returns in a
non-standard format in conjunction with the standard format described above.
The non-standard format will be identical to the standard format except that
the Contingent Deferred Sales Charge percentage will be assumed to be 0%.

AUSA may from time to time also disclose cumulative total returns in
conjunction with the standard format described above. The cumulative returns
will be calculated using the following formula assuming that the Contingent
Deferred Sales Charge percentage will be 0%.

CTR = (ERV/P) -- 1

Where:
<TABLE>
<C> <S>
CTR= The cumulative total return net of Subaccount recurring charges for the
period.
ERV= The ending redeemable value of the hypothetical investment at the end of
the period.
P= A hypothetical initial payment of $1,000.
</TABLE>

All non-standard performance data will only be advertised if the standard
performance data for the same period, as well as for the required period, is
also disclosed.

LEGAL MATTERS

Legal advice relating to certain matters under the federal securities laws
applicable to the issue and sale of the Policies has been provided to AUSA by
Sutherland, Asbill & Brennan, of Washington D.C.

INDEPENDENT AUDITORS

The financial statements of AUSA at December 31, 1994 and 1993 included in
this Statement of Additional Information have been audited by Ernst & Young
LLP, Independent Auditors, Des Moines, Iowa. The Mutual Fund Account had not
commenced operations, had no assets or liabilities and had incurred no expenses
as of December 31, 1994, therefore there are no financial statements for the
AUSA Endeavor Variable Annuity Account.

OTHER INFORMATION

A Registration Statement has been filed with the Securities and Exchange
Commission, under the Securities Act of 1933 as amended, with respect to the
Policies discussed in this Statement of Additional Information. Not all of the
information set forth in the Registration Statement, amendments and exhibits
thereto has been included in the Prospectus or this Statement of Additional
Information. Statements contained in the Prospectus and this Statement of
Additional Information concerning the content of the Policies and other legal
instruments are intended to be

- 13 -
<PAGE>

summaries. For a complete statement of the terms of these documents, reference
should be made to the instruments filed with the Securities and Exchange
Commission.

FINANCIAL STATEMENTS

The values of the interest of Policy Owners in the Mutual Fund Account will
be affected solely by the investment results of the selected Subaccount(s). No
Policies had been issued as of December 31, 1994, therefore there are no
financial statements for the AUSA Endeavor Variable Annuity Account. The
Financial Statements of AUSA, which are included in this Statement of
Additional Information, should be considered only as bearing on the ability of
AUSA to meet its obligations under the Policies. They should not be considered
as bearing on the investment performance of the assets held in the Mutual Fund
Account.

- 14 -
<PAGE>

REPORT OF INDEPENDENT AUDITORS

The Board of Directors
AUSA Life Insurance Company, Inc.

We have audited the accompanying statutory-basis balance sheets of AUSA Life
Insurance Company, Inc. as of December 31, 1994 and 1993, and the statutory-
basis statements of operations, capital and surplus and cash flows for the year
ended December 31, 1994. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

The Company presents its financial statements in conformity with accounting
practices prescribed or permitted by the Department of Insurance of the State
of New York. The variances between such practices and generally accepted
accounting principles are described in Note 1. The effects of these variances
have not been determined but we believe they are material.

In our opinion, because of the materiality of the effects of the variances
between generally accepted accounting principles and the accounting practices
referred to in the preceding paragraph, the financial statements referred to
above are not intended to and do not present fairly, in conformity with
generally accepted accounting principles, the financial position of AUSA Life
Insurance Company, Inc. at December 31, 1994 and 1993, or the results of its
operations or its cash flows for the year ended December 31, 1994.

Also, in our opinion, the financial statements referred to above present
fairly, in all material respects, the admitted assets, liabilities, and capital
and surplus of AUSA Life Insurance Company, Inc. at December 31, 1994 and 1993,
and the results of its operations and its cash flows for the year ended
December 31, 1994 in conformity with accounting practices prescribed or
permitted by the Department of Insurance of the State of New York.

Ernst & Young LLP

Des Moines, Iowa
February 17, 1995

- 15 -
<PAGE>

AUSA LIFE INSURANCE COMPANY, INC.

BALANCE SHEETS--STATUTORY BASIS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
DECEMBER 31
----------------------
1994 1993
---------- ----------
<S> <C> <C>
ADMITTED ASSETS
Cash and invested assets:
Cash and short-term investments...................... $ 89,532 $ 402,519
Bonds (Note 2)....................................... 2,099,349 1,507,035
Stocks (Note 2):
Preferred.......................................... 236 236
Common, at market (cost: 1994--$141; 1993--$2,135). 274 2,303
Mortgage loans on real estate (Note 2)............... 862,352 1,045,011
Real estate acquired in satisfaction of debt (Note
2).................................................. 10,485 --
Policy loans......................................... 24 18
---------- ----------
Total cash and invested assets....................... 3,062,252 2,957,122
========== ==========
Accrued investment income.............................. 48,845 40,984
Federal income taxes recoverable (Note 4).............. 12 --
Other assets........................................... 2 2
Separate account assets................................ 2,907,674 --
---------- ----------
Total admitted assets................................ $6,018,785 $2,998,108
========== ==========
LIABILITIES AND CAPITAL AND SURPLUS
Liabilities:
Aggregate reserves for policies and contracts:
Life............................................... $ 199 $ 200
Annuity............................................ 7,572 4,850
Policy and contract claim reserves................... 3 3
Other policyholders' funds........................... 2,761,658 2,727,364
Remittances and items not allocated.................. 16,763 6,423
Federal income taxes payable (Note 4)................ -- 49
Asset valuation reserve (Note 1)..................... 25,552 12,743
Interest maintenance reserve (Note 1)................ 1,314 151
Payable to affiliates (Note 6)....................... 7,858 65
Short-term note payable to affiliate (Note 6)........ 5,200 --
Other liabilities.................................... 116,860 37,907
Separate account liabilities......................... 2,891,976 --
---------- ----------
Total liabilities.................................... 5,834,955 2,789,755
Commitments and contingencies (Notes 3 and 7)
Capital and surplus (Note 5):
Common stock, $125 par value, 20 shares authorized,
issued and outstanding.............................. 2,500 2,500
Paid-in surplus...................................... 210,150 210,150
Unassigned surplus (deficit)......................... (28,820) (4,297)
---------- ----------
Total capital and surplus............................ 183,830 208,353
---------- ----------
Total liabilities and capital and surplus............ $6,018,785 $2,998,108
========== ==========
</TABLE>

See accompanying notes.

- 16 -
<PAGE>

AUSA LIFE INSURANCE COMPANY, INC.

STATEMENT OF OPERATIONS--STATUTORY BASIS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1994
-----------------
<S> <C>
Revenues:
Premiums and other considerations, net of reinsurance:
Life..................................................... $ 10
Annuity.................................................. 426,329
Net investment income (Note 2)............................. 254,539
Amortization of interest maintenance reserve (Note 1)...... 158
Commissions and expense allowances on reinsurance ceded.... 11,921
---------
692,957
Benefits and expenses:
Death, surrender and other life insurance and annuity bene-
fits...................................................... 454,677
Increase (decrease) in aggregate reserves for policies and
contracts:
Life..................................................... (1)
Annuity.................................................. 2,722
Increase in liability for premium and other deposit type
funds..................................................... 34,294
Commissions................................................ 91,312
General insurance expenses................................. 57,207
Taxes, licenses and fees................................... 131
Transfers to separate accounts............................. 63,209
---------
703,551
---------
Loss from operations before federal income taxes and net re-
alized capital losses on investments........................ (10,594)
Federal income tax expense (Note 4).......................... --
---------
Loss from operations before net realized capital losses on
investments................................................. (10,594)
Net realized capital losses on investments (net of related
federal income tax expense and amounts transferred to
interest maintenance reserve) (Note 2)...................... (928)
---------
Net loss..................................................... $ (11,522)
=========
</TABLE>

See accompanying notes.

- 17 -
<PAGE>

AUSA LIFE INSURANCE COMPANY, INC.

STATEMENT OF CAPITAL AND SURPLUS--STATUTORY BASIS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1994
-----------------
<S> <C>
Common stock, at beginning and end of year.................... $ 2,500
Paid-in surplus at beginning and end of year.................. 210,150
Unassigned surplus (deficit):
Beginning of year........................................... (4,297)
Net loss.................................................... (11,522)
Net change in unrealized capital gains (losses)............. (35)
Change in asset valuation reserve........................... (12,809)
Change in non-admitted assets............................... (855)
Seed money contributed to separate account (Note 6)......... (15,000)
Change in surplus in separate account....................... 15,698
--------
End of year................................................... (28,820)
--------
Total capital and surplus..................................... $183,830
========
</TABLE>

See accompanying notes.

- 18 -
<PAGE>

AUSA LIFE INSURANCE COMPANY, INC.

STATEMENT OF CASH FLOWS--STATUTORY BASIS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1994
-----------------
<S> <C>
SOURCES OF CASH
Net cash provided by operations:
Premiums and other considerations, net of reinsurance....... $ 438,260
Net investment income....................................... 246,801
----------
685,061
Life and accident and health claims......................... 8
Surrender benefits and other fund withdrawals............... 453,799
Other benefits to policyholders............................. 868
Commissions, other expenses and other taxes................. 63,919
Net transfers to separate accounts.......................... 63,211
Federal income taxes, excluding tax on capital gains........ 62
Net increase in policy loans................................ 6
----------
581,873
----------
Net cash provided by operations............................... 103,188
Proceeds from investments sold, matured or repaid:
Bonds....................................................... 421,275
Common stocks............................................... 2,022
Mortgage loans.............................................. 189,421
Other....................................................... (48)
----------
612,670
Other sources................................................. 25,035
Short-term note payable to affiliate (Note 6)................. 5,200
----------
Total sources of cash......................................... 746,093
USES OF CASH
Cost of investments acquired:
Bonds and preferred stocks.................................. 1,038,312
Common stocks............................................... 27
Mortgage loans.............................................. 1,544
Real estate................................................. (32)
----------
1,039,851
----------
Seed money contributed to separate accounts (Note 6).......... 15,000
Other uses.................................................... 4,229
----------
Total uses of cash............................................ 1,059,080
----------
Net change in cash and short-term investments................. (312,987)
Cash and short-term investments at beginning of year.......... 402,519
----------
Cash and short-term investments at end of year................ $ 89,532
==========
</TABLE>

See accompanying notes.

- 19 -
<PAGE>

AUSA LIFE INSURANCE COMPANY, INC.

NOTES TO FINANCIAL STATEMENTS--STATUTORY BASIS
DECEMBER 31, 1994
(DOLLARS IN THOUSANDS)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

Effective September 24, 1993, First AUSA Life Insurance Company, a wholly-
owned subsidiary of AEGON USA, Inc., purchased from The Dreyfus Corporation
("Dreyfus"), its entire interest in Dreyfus Life Insurance Company, a stock
life insurance company. At the time of purchase, the Company had total assets
and capital and surplus of approximately $17 million and $11 million,
respectively. Effective September 27, 1993, Dreyfus Life Insurance Company
changed its name to AUSA Life Insurance Company, Inc. (the Company).

On December 31, 1993, the Company entered into an indemnity reinsurance
agreement with Mutual Life Insurance Company of New York (MONY) to transfer
certain group pension business of MONY to the Company. Assets and liabilities
were transferred in connection with the agreement, as follows:

<TABLE>
<S> <C>
Cash and short-term investments.................................. $ 199,899
Bonds............................................................ 1,486,230
Mortgage loans on real estate.................................... 1,045,011
Accrued investment income........................................ 40,550
Other assets..................................................... 2,864
----------
Total assets..................................................... $2,774,554
==========
Contract liabilities............................................. $2,727,364
Deferred interest on assets purchased............................ 24,889
Other liabilities................................................ 22,301
----------
Total liabilities................................................ $2,774,554
==========
</TABLE>

In addition, pursuant to the same agreement, approximately $2.9 billion of
separate account assets and liabilities were transferred in 1994.

The agreement with MONY provides for the indemnity reinsurance, on a 100%
coinsurance basis, of this business. The Company and MONY also entered into an
assumption reinsurance agreement pursuant to which approximately 80% of the
general account liabilities were novated to the Company from MONY as state
approvals were received. The majority of the remaining general account
liabilities are expected to be novated during 1995.

In accordance with the agreement, MONY will receive payments relating to the
performance of the assets and liabilities that exist at the date of closing for
a period of nine years. These payments will be reduced for certain
administrative expenses as defined in the agreement. The Company will recognize
operating gains and losses on renewal premiums received after December 31, 1993
of the business in-force at December 31, 1993, and on all new business written
after that date. At the end of nine years, the Company will purchase from MONY
the remaining transferred business inforce based upon a formula described in
the agreement. At December 31, 1994, the Company owed MONY approximately $84.7
million which represents the amount earned by MONY under the gain sharing
calculation for the year ended December 31, 1994 discussed above.

- 20 -
<PAGE>

In connection with the transaction, MONY purchased $150 million and $50
million in Series A and Series B notes, respectively, of AEGON USA, Inc. The
proceeds were used to enhance the surplus of the Company. Both the Series A and
Series B notes bear a market rate of interest and mature in nine years.

In accordance with the agreement, MONY will continue to provide investment
management services for assets supporting policy liabilities existing at
December 31, 1993 while the Company will provide investment and general
administrative services and investment management services on new business
received after December 31, 1993. The agreement specifies prescribed rates for
expenses to administer the business up to certain levels.

In accordance with an agreement between AEGON USA, Inc. and the Company,
AEGON USA, Inc. will ensure the maintenance of certain minimum tangible net
worth, operating leverage and liquidity levels of the Company, as defined in
the agreement, through the contribution of additional capital by the Company's
parent as needed.

The accompanying financial statements present the condition of the Company at
December 31, 1994 and 1993 and the results of its operations for the year ended
December 31, 1994. Results of operations for prior periods are not included, as
the Company believes such data would not provide a meaningful comparison with
respect to financial results after the date of the acquisition.

Basis of Presentation

The accompanying statutory-basis financial statements have been prepared in
accordance with accounting practices prescribed or permitted by the Department
of Insurance of the State of New York, which are designed primarily to reflect
the Company's ability to meet obligations to policyholders. Statutory insurance
accounting principles differ in many respects from generally accepted
accounting principles (GAAP) followed by other business enterprises in
determining financial position and results of operations. Accordingly, the
accompanying statutory-basis financial statements are not intended to present
financial position, results of operations and cash flows in conformity with
GAAP. Pursuant to statutory requirements: (a) bonds are generally carried at
amortized cost rather than segregating the portfolio into held-to-maturity
(carried at amortized cost), available-for-sale (carried at fair value), and
trading (carried at fair value) classifications; (b) premium income on life
policies is recognized over the premium paying period of the policies, whereas
the related acquisition costs such as commissions and other costs related to
acquiring new business are charged to current operations as incurred; (c)
aggregate policy reserves are based on statutory mortality, morbidity and
interest requirements without consideration of withdrawals, which may differ
from reserves determined using estimates of mortality, morbidity, interest and
withdrawals; (d) deferred federal income taxes are not provided for temporary
differences between the financial statements and the tax returns; (e) certain
assets designated as "non-admitted assets" have been excluded from the balance
sheet by a charge to surplus; (f) the asset valuation reserve, which is in the
nature of a contingency reserve for possible losses on investments, is recorded
as a liability through a charge to surplus; (g) net realized capital gains and
losses attributable to changes in the level of market interest rates are
deferred and amortized over the remaining life of the bonds and mortgage loans
disposed of rather than being recognized in the statement of operations in the
year of disposition; (h) gross premiums for all insurance products are
considered revenues rather than reporting only various policy charges and fees
for certain long-duration contracts; (i) pension expense is recorded as amounts
are paid; and (j) reinsurance reserve credits are recorded as a reduction to
aggregate policy reserves rather than being recorded as reinsurance recoverable
assets. All pertinent financial statement disclosures otherwise required under
generally accepted accounting principles are presented herein using the
corresponding statutory-basis amounts.

- 21 -
<PAGE>

The National Association of Insurance Commissioners (NAIC) currently is in
the process of recodifying statutory accounting practices, the result of which
is expected to constitute the only source of "prescribed" statutory accounting
practices. Accordingly, that project, which is expected to be completed in
1996, will likely change, to some extent, prescribed statutory accounting
practices and may result in changes to the accounting practices that the
Company uses to prepare its statutory-basis financial statements.

Fair Values of Financial Instruments

FASB Statement No. 107, "Disclosures about Fair Value of Financial
Instruments", requires disclosure of fair value information about financial
instruments, whether or not recognized in the balance sheet, for which it is
practicable to estimate that value. In cases where quoted market prices are not
available, fair values are based on estimates using present value or other
valuation techniques. Those techniques are significantly affected by the
assumptions used, including the discount rate and estimates of future cash
flows. In that regard, the derived fair value estimates cannot be substantiated
by comparisons to independent markets and, in many cases, could not be realized
in immediate settlement of the instrument. Statement 107 excludes certain
financial instruments and all nonfinancial instruments from its disclosure
requirements. Accordingly, the aggregate fair value amounts presented do not
represent the underlying value of the Company.

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

Cash and cash equivalents, short-term investments: The carrying amounts
reported in the balance sheet for these instruments approximate their fair
values.

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

Mortgage loans and policy loans: The fair values for mortgage loans are
estimated utilizing discounted cash flow analyses, using interest rates
reflective of current market conditions and the risk characteristics of the
loans. The fair value of policy loans are assumed to equal their carrying
value.

Investment contracts: Fair values for the Company's liabilities under
investment-type insurance contracts are estimated using discounted cash
flow calculations, based on interest rates currently being offered for
similar contracts with maturities consistent with those remaining for the
contracts being valued.

Fair values for the Company's insurance contracts other than investment
contracts are not required to be disclosed. However, the fair values of
liabilities under all insurance contracts are taken into consideration in the
Company's overall management of interest rate risk, which minimizes exposure to
changing interest rates through the matching of investment maturities with
amounts due under insurance contracts.

- 22 -
<PAGE>

The following sets forth a comparison of the fair values and carrying values
of the Company's financial instruments subject to the provisions of Statement
of Financial Accounting Standards No. 107 at December 31, 1994:

<TABLE>
<CAPTION>
DECEMBER 31
-------------------------------------------
1994 1993
--------------------- ---------------------
CARRYING CARRYING
VALUE FAIR VALUE VALUE FAIR VALUE
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
ADMITTED ASSETS
Bonds (Note 2).................. $2,099,349 $1,976,667 $1,507,035 $1,507,750
Preferred stocks (Note 2)....... 236 162 236 200
Common stock.................... 274 274 2,303 2,303
Mortgage loans on real estate... 862,352 851,352 1,045,011 1,045,011
Policy loans.................... 24 24 18 18
Cash and short-term investments. 89,532 89,532 402,519 402,519
Separate account assets......... 2,907,674 2,907,674 -- --
LIABILITIES
Investment contract liabilities
(including separate accounts).. 5,658,537 5,526,576 2,732,214 2,670,435
</TABLE>

Cash and Short-Term Investments

For purposes of the statement of cash flows, the Company considers all highly
liquid investments with remaining maturity of one year or less when purchased
to be short-term investments. Short-term investments are recorded at amortized
cost, which approximates market.

Investments

Bonds and mortgage loans on real estate are carried at amortized costs.
Amortized costs for bonds and mortgage loans on real estate that were acquired
through the reinsurance agreement, described earlier, were initially recorded
at market value, consistent with the aforementioned agreement and as prescribed
by the Department of Insurance of the State of New York. Any resulting premium
or discount as well as the deferred interest on assets purchased will be
amortized using the effective interest method. Policy loans are recorded at
unpaid balances. Preferred stocks are valued primarily at cost. Common stocks,
which may include shares of mutual funds (money market and other), are valued
at market. Realized gains and losses on the sale of securities are recognized
using the specific identification method.

Aggregate Policy Reserves

Life and annuity benefit reserves are developed by actuarial methods and are
determined based on published tables using statutorily specified interest rates
and valuation methods that will provide, in the aggregate, reserves that are
greater than or equal to the minimum required by law.

The aggregate policy reserves for life insurance policies are based
principally upon the 1941 and 1958 Commissioners' Standard Ordinary Mortality
and American Experience Mortality Tables. The reserves are calculated using
interest rates ranging from 2.50 to 4.00 percent and are computed principally
on the Net Level Valuation and the Commissioners' Reserve Valuation Methods.

Deferred annuity and other policyholders' funds reserves are calculated
according to the Commissioners' Annuity Reserve Valuation Method including
excess interest reserves to cover situations where the future interest
guarantees plus the decrease in surrender charges are in excess of the maximum
valuation rates of interest. Reserves for immediate annuities and

- 23 -
<PAGE>

supplementary contracts with and without life contingencies are equal to the
present value of future payments assuming interest rates ranging from 5.50 to
7.50 percent and mortality rates, where appropriate, from a variety of tables.

Policy and Contract Claim Reserves

Claim reserves represent the estimated accrued liability for claims reported
to the Company and claims incurred but not yet reported through the statement
date. These reserves are estimated using either individual case-basis
valuations or statistical analysis techniques. These estimates are subject to
the effects of trends in claim severity and frequency. The estimates are
continually reviewed and adjusted as necessary as experience develops or new
information becomes available.

Asset Valuation Reserve and Interest Maintenance Reserve

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

The Company reports an Interest Maintenance Reserve (IMR) that represents the
net accumulated unamortized realized capital gains and losses attributable to
changes in the general level of interest rates on sales of fixed income
investments, principally bonds and mortgage loans. During 1994, net realized
capital gains of $1,321 were credited to the IMR rather than being recognized
in the statement of operations. Such gains or losses are amortized into income
on a straight-line basis over the remaining period to maturity based on
groupings of individual securities sold in five-year bands; amortization of
these net gains aggregated $158 for the year ended December 31, 1994.

Reclassifications

Certain reclassifications have been made to the 1993 financial statements to
conform to the 1994 presentation.

- 24 -
<PAGE>

2. INVESTMENTS

The carrying value and estimated market value of investments in debt
securities were as follows:

<TABLE>
<CAPTION>
GROSS GROSS ESTIMATED
CARRYING UNREALIZED UNREALIZED FAIR
VALUE GAINS LOSSES VALUE
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
DECEMBER 31, 1994
Bonds:
United States Government and
agencies..................... $ 101,024 $ 247 $ 7,604 $ 93,667
State, municipal and other
government................... 23,270 -- 1,903 21,367
Public utilities.............. 162,527 15 14,017 148,525
Industrial and miscellaneous.. 1,448,647 3,569 82,144 1,370,072
Mortgage-backed securities.... 363,881 377 21,222 343,036
---------- ------ -------- ----------
2,099,349 4,208 126,890 1,976,667
Preferred stocks................ 236 -- 74 162
---------- ------ -------- ----------
$2,099,585 $4,208 $126,964 $1,976,829
========== ====== ======== ==========
DECEMBER 31, 1993
Bonds:
United States Government and
agencies..................... $ 91,141 $ 453 $ 14 $ 91,580
State, municipal and other
government................... 20,829 -- -- 20,829
Public utilities.............. 198,753 209 -- 198,962
Industrial and miscellaneous.. 1,127,594 67 -- 1,127,661
Mortgage-backed securities.... 68,718 -- -- 68,718
---------- ------ -------- ----------
1,507,035 729 14 1,507,750
Preferred stocks................ 236 15 51 200
---------- ------ -------- ----------
$1,507,271 $ 744 $ 65 $1,507,950
========== ====== ======== ==========
</TABLE>

The carrying value of bonds and preferred stocks at December 31, 1994 and
1993 required no writedowns to estimated fair value.

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

<TABLE>
<CAPTION>
CARRYING ESTIMATED
VALUE FAIR VALUE
---------- ----------
<S> <C> <C>
Due in one year or less............................... $ 161,357 $ 158,387
Due after one year through five years................. 553,494 523,785
Due after five years through ten years................ 879,813 824,948
Due after ten years................................... 140,804 126,511
---------- ----------
1,735,468 1,633,631
Mortgage-backed securities............................ 363,881 343,036
---------- ----------
$2,099,349 $1,976,667
========== ==========
</TABLE>

- 25 -
<PAGE>

A detail of net investment income for the year ended December 31, 1994 is
presented below:

<TABLE>
<S> <C>
Interest on bonds.................................................. $145,612
Dividends on equity investments.................................... 51
Interest on policy loans........................................... 1
Mortgage loans..................................................... 117,859
Real estate........................................................ 322
Other investment loss.............................................. (2,458)
--------
Gross investment income............................................ 261,387
Investment expenses................................................ 6,848
--------
Net investment income.............................................. $254,539
========
</TABLE>

Proceeds from sales and maturities of debt securities and related gross
realized gains and losses for the year ended December 31, 1994 were as follows:

<TABLE>
<S> <C>
Proceeds........................................................... $421,275
========
Gross realized gains............................................... $ 7,643
Gross realized losses.............................................. 13,681
--------
Net realized losses................................................ $ (6,038)
========
</TABLE>

At December 31, 1994, investments with an aggregate carrying value of $2,114
were on deposit with regulatory authorities or were restrictively held in bank
custodial accounts for the benefit of such regulatory authorities as required
by statute.

Realized investment gains (losses) and changes in unrealized gains (losses)
for investments for the year ended December 31, 1994 are summarized below:

<TABLE>
<S> <C>
Realized:
Debt securities.................................................. $(6,038)
Short-term investments........................................... (48)
Mortgage loans on real estate.................................... 1,067
Other invested assets............................................ 5,412
-------
393
Transfer to interest maintenance reserve......................... (1,321)
-------
Total realized losses............................................ $ (928)
=======
Unrealized:
Equity securities................................................ $ (35)
=======
</TABLE>

Gross unrealized gains and gross unrealized losses on common stocks at
December 31, 1994 were as follows:

<TABLE>
<S> <C>
Unrealized gains........................................................ $133
Unrealized losses....................................................... --
----
Net unrealized gains.................................................... $133
====
</TABLE>

During 1994 and 1993, there were $10,587 and $0, respectively, in foreclosed
mortgage loans that were transferred to real estate.

- 26 -
<PAGE>

At December 31, 1994, the mortgage loan portfolio (all of which are
commercial loans) is diversified by geographic region and specific collateral
property type as follows:

<TABLE>
<CAPTION>
GEOGRAPHIC DISTRIBUTION
-----------------------
<S> <C>
Pacific................. 23%
South Atlantic.......... 21
Middle Atlantic......... 19
Mountain................ 10
E. North Central........ 10
W. South Central........ 7
E. South Central........ 5
New England............. 4
W. North Central........ 1
</TABLE>
<TABLE>
<CAPTION>
PROPERTY TYPE DISTRIBUTION
- --------------------------
<S> <C>
Office.................... 51%
Apartment................. 23
Retail.................... 16
Warehouse................. 7
Hotel/Motel............... 3
</TABLE>

At December 31, 1994, the Company had the following investments, excluding U.
S. Government guaranteed or insured issues, which individually represented more
than ten percent of capital and surplus and the asset valuation reserve:

<TABLE>
<CAPTION>
CARRYING
DESCRIPTION OF SECURITY VALUE
----------------------- --------
<S> <C>
Bonds:
Falcon Telecable.................................................. $43,848
Conn National Bank................................................ 39,573
PSEG Capital...................................................... 34,500
Comast Cablevision................................................ 29,302
Natl. Gdn. Soc. Svc............................................... 26,737
Jaco Trust........................................................ 26,182
Triax USA......................................................... 25,052
Chemical Banking.................................................. 23,110
Triax Association................................................. 21,603
Pacificorp........................................................ 20,381
</TABLE>

3. REINSURANCE

The Company reinsures portions of risk on certain insurance policies which
exceed its established limits, thereby providing a greater diversification of
risk and minimizing exposure on larger risks. The Company remains contingently
liable with respect to any insurance ceded, and this would become an actual
liability in the event that the assuming insurance company became unable to
meet its obligation under the reinsurance treaty. During 1994, there were
direct premiums of $295,678, reinsurance assumed premiums of $130,665 and
reinsurance ceded premiums totaled $4.

4. INCOME TAXES

The Company filed a short period federal income tax return for the period
September 24, 1993 through December 31, 1993. Prior to 1993, taxable income or
loss of the Company was included in a consolidated return with Dreyfus. Dreyfus
intends to include the taxable income of the Company through September 23, 1993
in its consolidated federal income tax return. Also, in conjunction with the
acquisition of the Company, Dreyfus has indemnified the Company for any tax
deficiencies prior to September 24, 1993.

- 27 -
<PAGE>

The following is a reconciliation of the expected federal tax on income
before realized capital gains on investments, based on statutory rates, to the
actual tax expense for the year ended December 31, 1994:

<TABLE>
<S> <C>
Computed expected tax benefit...................................... $(3,708)
Tax reserve adjustment............................................. 121
Deferred acquisition cost--tax basis............................... 6
Carryforward of current year operating loss........................ 3,460
Other items--net................................................... 121
-------
Actual tax expense................................................. $ --
=======
</TABLE>

Prior to 1984, as provided for under the Life Insurance Company Tax Act of
1959, a portion of statutory income was not subject to current taxation but was
accumulated for income tax purposes in a memorandum account referred to as the
policyholders' surplus account. No federal income taxes have been provided for
in the financial statements on income deferred in the policyholders' surplus
account ($800 at December 31, 1994). To the extent dividends are paid from the
amount accumulated in the policyholders' surplus account, net earnings would be
reduced by the amount of tax required to be paid. Should the entire amount in
the policyholders' surplus account become taxable, the tax thereon computed at
current rates would amount to approximately $280.

5. DIVIDEND RESTRICTIONS

Generally, an insurance company's ability to pay dividends is limited to the
amount that their net assets, as determined in accordance with statutory
accounting practices, exceed minimum statutory capital requirements. However,
payment of such amounts as dividends may be subject to approval by regulatory
authorities. The Company is not entitled to pay out any dividends in 1995
without prior approval.

6. RELATED PARTY TRANSACTIONS

The Company is allocated administrative and benefit expenses from the parent
for employee related costs, as all employees are considered employees of the
parent, not employees of the Company.

Payable to affiliates and intercompany borrowings bear interest at the
thirty-day commercial paper rate of 5.90% at December 31, 1994. During 1994,
the Company paid interest of $43 to affiliates.

During 1994, the Company contributed seed money of $15,000 in cash to the
Company-sponsored separate account.

At December 31, 1994, the Company has a $5,200 short-term note payable to an
affiliate. Interest on this note is payable at 6.08%.

During 1993, the Company received capital contributions of $209,000 in cash
from its parent.

7. COMMITMENTS AND CONTINGENCIES

The Company is subject to insurance guaranty laws in the states in which it
writes business. These laws provide for assessments against insurance companies
for the benefit of policyholders and claimants in the event of insolvency of
other insurance companies. In accordance with the purchase agreement,
assessments related to periods prior to the purchase of the Company will be
paid by Dreyfus. Assessments attributable to business reinsured from MONY for
premiums received prior to the date of the transaction will be paid by MONY.
The Company will be responsible for assessments, if any, attributable to
premium income after the date of purchase.

- 28 -
<PAGE>

SCHEDULE I

AUSA LIFE INSURANCE COMPANY, INC.

SUMMARY OF INVESTMENTS--OTHER THAN INVESTMENTS IN RELATED PARTIES
DECEMBER 31, 1994
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
AMOUNT AT WHICH
SHOWN IN THE
TYPE OF INVESTMENT COST(1) VALUE BALANCE SHEET
------------------ ---------- ---------- ---------------
<S> <C> <C> <C>
FIXED MATURITIES
Bonds:
United States Government and government
agencies and authorities.............. $ 354,845 $ 330,786 $ 353,852
States, municipalities and political
subdivisions.......................... 3,000 2,929 3,000
Foreign governments.................... 20,538 18,437 20,269
Public utilities....................... 164,270 148,525 162,527
All other corporate bonds.............. 1,573,162 1,475,990 1,559,701
Redeemable preferred stock............... 236 162 236
---------- ---------- ----------
Total fixed maturities................... 2,116,051 1,976,829 2,099,585
EQUITY SECURITIES
Common stocks--industrial, miscellaneous
and all other........................... 141 274 274
Mortgage loans on real estate............ 862,352 862,352
Real estate.............................. -- --
Real estate acquired in satisfaction of
debt.................................... 10,485 10,485
Policy loans............................. 24 24
Cash and short-term investments.......... 89,532 89,532
---------- ----------
Total investments........................ $3,078,585 $3,062,252
========== ==========
</TABLE>
- --------
(1) Original cost of equity securities and, as to fixed maturities, original
cost reduced by repayments and adjusted for amortization of premiums or
accrual of discounts.

- 29 -
<PAGE>

SCHEDULE V

AUSA LIFE INSURANCE COMPANY, INC.

SUPPLEMENTARY INSURANCE INFORMATION
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
FUTURE POLICY POLICY AND
BENEFITS AND UNEARNED CONTRACT
EXPENSES PREMIUMS LIABILITIES
------------- -------- -----------
<S> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1994
Individual life.............................. $ 197 $-- $ 3
Individual health............................ -- -- --
Group life and health........................ 2 -- --
Annuity...................................... 7,572 -- --
------ ---- ----
$7,771 $-- $ 3
====== ==== ====
DECEMBER 31, 1993
Individual life.............................. $ 197 $-- $ 3
Individual health............................ -- -- --
Group life and health........................ 3 -- --
Annuity...................................... 4,850 -- --
------ ---- ----
$5,050 $-- $ 3
====== ==== ====
</TABLE>

- 30 -
<PAGE>

SCHEDULE V

AUSA LIFE INSURANCE COMPANY, INC.

SUPPLEMENTARY INSURANCE INFORMATION
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
NET BENEFITS, CLAIMS OTHER
PREMIUM INVESTMENT LOSSES AND OPERATING PREMIUMS
REVENUE INCOME SETTLEMENT EXPENSES EXPENSES WRITTEN
-------- ---------- ------------------- --------- --------
<S> <C> <C> <C> <C>
$ 10 $ 19 $ 5 $ 2 $ --
-- -- -- -- --
-- -- -- -- --
426,329 254,520 491,686 211,857 426,329
-------- -------- -------- -------- --------
$426,339 $254,539 $491,691 $211,859 $426,329
======== ======== ======== ======== ========
</TABLE>

- 31 -
<PAGE>

PART C OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements

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

(b) Exhibits:

(1) (a) Resolution of the Board of Directors of
AUSA Life Insurance Company, Inc. authorizing
establishment of the Mutual Fund Account.
Note 2.

(2) Not Applicable.

(3) (a) Principal Underwriting Agreement by and between
AUSA Life Insurance Company, Inc. on its own
behalf and on the behalf of the Mutual Fund
Account, and AEGON USA Securities, Inc.
Note 1.

(b) Form of Broker/Dealer Supervision and Sales
Agreement by and between AEGON USA Securities,
Inc. and the Broker/Dealer. Note 1.

(4) (a) Form of Policy for the Endeavor Variable
Annuity. Note 2.

(5) Form of Application for the Endeavor Variable
Annuity. Note 2.

(6) (a) Articles of Incorporation of AUSA
Life Insurance Company, Inc. Note 1.

(b) ByLaws of AUSA Life
Insurance Company, Inc. Note 1.

(7) Not Applicable.

(8) (a) Participation Agreement by and between
AUSA Life Insurance Company, Inc.
and Endeavor Series Trust and Addendum thereto
Note 2.

(b) Participation Agreement with WRL Series Fund,
Inc. and Addendum thereto. Note 2.

(9) (a) Opinion and Consent of Counsel. Note 2.

1
<PAGE>

(b) Consent of Counsel. Note 2.

(10) Consent of Independent Auditors. Note 3.

(11) Not Applicable.

(12) Not Applicable.

(13) Performance Data Calculations. Note 2.

(14) Powers of Attorney. Note 2. (C.H. Verhagen,
A.R. Baer, L.G. Brown, W.L. Busler,
J.R. Dykhouse, S.E. Frushtick, C.T. Hanson,
B.L. Jenkins, D.C. Kolsrud, V.F. Mihaic,
P.P. Post, T.A. Schlossberg, E.K. Warren,
R.J. Kontz, R.J. McGraw)

Note 1. Filed with the initial filing of this Form N-4 Registration
Statement (File No. 33-83560) on September 1, 1994.

Note 2. Filed with Pre-Effective Amendment No. 1 to Form N-4
Registration Statement (File No. 33-83560) on December 21,
1994.

Note 3. Filed herewith.

Item 25. Directors and Officers of the Depositor

<TABLE>
<CAPTION>
Principal
Positions
Name and and Offices with
Business Address Depositor
- ---------------- ---------
<S> <C>
Larry G. Brown Director,
4333 Edgewood Road, N.E. Chairman of the Board
Cedar Rapids, IA 52499 and Secretary

Tom A. Schlossberg Director and President
4 Manhattanville Road
Purchase, NY 10577

Craig D. Vermie Vice President
4333 Edgewood Road, N.E.
Cedar Rapids, IA 52499

Patrick S. Baird Vice President and
4333 Edgewood Road, N.E. Chief Financial Officer
Cedar Rapids, IA 52499 Officer
</TABLE>

2
<PAGE>

<TABLE>
<CAPTION>
<S> <C>
Douglas C. Kolsrud Director and
4333 Edgewood Road, N.E. Chief Actuary
Cedar Rapids, IA 52499

Robert J. Kontz Controller
4333 Edgewood Road, N.E.
Cedar Rapids, IA 52499

Robert J. McGraw Treasurer
4333 Edgewood Road, N.E.
Cedar Rapids, IA 52499
</TABLE>

Item 26. Persons Controlled by or Under Common Control with the
Depositor or Registrant

AEGON USA, Inc. - Holding Company

Life Investors Insurance Company of America - Insurance

PFL Life Insurance Company

Transunion Casualty Company - Insurance

Investors Warranty of America, Inc. - Provider of automobile extended
maintenance contracts

Supplemental Insurance Division, Inc. - Insurance

Creditor Resources, Inc. - Credit Insurance

AEGON USA Investment Management, Inc. - Investment Advisor

AEGON USA Realty Advisors, Inc. - Provides real estate administrative
and real estate investment services

AEGON USA Realty Management, Inc. - Real Estate Management

AEGON USA Securities, Inc. - Broker-Dealer

AEGON USA Managed Portfolios, Inc. - Mutual Fund

USP Real Estate Investment Trust - Real Estate Investment Trust

Cedar Income Fund, Ltd. - Real Estate Investment Trust

Forty-Six Hundred Limited Partnership - Limited Partnership

First AUSA Life Insurance Company - Insurance

Bankers United Life Assurance Company - Insurance

3
<PAGE>

Universal Benefits Corporation - Third party administrator

Massachusetts Fidelity Trust Company - Trust company

Money Services, Inc. - Provides financial counseling for employees and
agents of affiliated companies

Zahorik Company, Inc. - Broker-Dealer

Partel Holding, Inc. - Telemarketing

Partel Research Corp. - Telemarketing

Telequote Insurance Services, Inc. - Telemarketing

Tele-Quote Corporation - Telemarketing

Tele-Quote, Inc. - Telemarketing

Cadet Holding Corp. - Holding company

ISI Insurance Agency, Inc. - Broker/Dealer

Southwest Equity Life Insurance Company - Insurance

Iowa Fidelity Life Insurance Company - Insurance

The Whitestone Corporation - Insurance agency

Monumental Life Insurance Company - Insurance

United Financial Services, Inc. - General agency

Equity National Life Insurance Company - Insurance

Monumental General Insurance Group, Inc. - Holding company

Monumental General Administrators, Inc. - Provides management services
to unaffiliated third party administrator

Executive Management and Consultant Services, Inc. - Provides
actuarial consulting services

Monumental General Mass Marketing, Inc. - Marketing arm for sale of
mass marketed insurance coverages

Cross-Country Life Insurance Company - Insurance

Bankers Financial Life Insurance Company - Insurance

Monumental General Casualty Company - Insurance

4
<PAGE>

AUSA Holding Company - Holding company

JLW Financial Management Systems, Inc. - Management and Administrative
Services

ZCI, Inc. - Insurance agency

AUSA Financial Markets, Inc. - Marketing

CRC Creditor Resources Canadian Dealer Network Inc. - Insurance agency

American Forum For Fiscal Fitness, Inc. - Marketing

Western Reserve Life Assurance Co. of Ohio - Insurance

Landauer Realty Advisors, Inc. - Real estate counseling

Landauer Associates, Inc. - Real estate counseling

WRL Series Fund, Inc. - Mutual fund

Intersecurities, Inc. - Broker-dealer

Idex Investor Services, Inc. - Shareholder services

Idex Management, Inc. - Investment advisor

Idex Total Income Trust - Mutual fund

Idex Fund - Mutual fund

Idex II Series Fund - Mutual fund

Idex Fund 3 - Mutual fund

Diversified Investment Advisors, Inc. - Registered Investment Adviser

Diversified Investors Securities Corp. - Broker-Dealer

AUSA Life Insurance Company, Inc. - Insurance

International Life Investors Insurance Company - Insurance

AMCORP, Inc. - Insurance agency

Colorado Annuity Agency, Inc. - Insurance agency

Realty Information Systems, Inc. - Dow Jones joint venture

Associated Mariner Financial Group, Inc. - Holding company management
services

5
<PAGE>

Mariner Financial Services, Inc. - Broker-dealer

Mariner Planning Corporation - Financial planning

Associated Mariner Agency, Inc. - Insurance agency

Mariner Mortgage Corp. - Mortgage origination

Item 27. Number of Policyowners

As of December 31, 1994, there were 0 Owners of the

Policies.

Item 28. Indemnification

The New York Code (Sections 721 et. seq.) provides for permissive
--------
indemnification in certain situations, mandatory indemnification in other
situations, and prohibits indemnification in certain situations. The Code
also specifies procedures for determining when indemnification payments can
be made.

Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons
of the Depositor pursuant to the foregoing provisions, or otherwise, the
Depositor 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 Depositor of expenses incurred or paid by a director, officer or
controlling person in connection with the securities being registered), the
Depositor 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.

Item 29. Principal Underwriter

AEGON USA Securities, Inc.
4333 Edgewood Road, N.E.
Cedar Rapids, Iowa 52499

The directors and officers of
AEGON USA Securities, Inc.
are as follows:/5/

6
<PAGE>

Patrick E. Falconio
Director

Larry G. Brown
Director and Secretary

Brenda K. Clancy
Director

Robert A. Thelen
Senior Vice-President

Lorri Mehaffey
President and Treasurer

Donald A. Froehle
Assistant Secretary

Billy J. Berger
Vice President and Assistant Treasurer

Charles Bennett
Vice President

Thomas Walsh
Vice President

Donna Craft
Vice President

Sara L. Haas
Assistant Secretary
_____________________
/5/ The principal business address of each person listed is AEGON USA
Securities, Inc., 4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499.

Commissions and Other Compensation Received by Principal Underwriter.
- --------------------------------------------------------------------

AEGON USA Securities, Inc. and/or the broker-dealers received $0 from
the Registrant during the last fiscal year for its services in distributing
the Policies. No other commission or compensation was received by the
principal underwriter, directly or indirectly, from the Registrant during
the fiscal year.

Item 30. Location of Accounts and Records

The records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and Rules 31a-1 to 31a-3 promulgated thereunder,
are maintained by AUSA Life Insurance Company,

7
<PAGE>

Inc. at 666 Fifth Avenue, New York, New York 10103, or its Service Office,
Financial Markets Division - Variable Annuity Dept., 4333 Edgewood Road N.E.,
Cedar Rapids, Iowa 52499.

Item 31. Management Services.

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

Item 32. Undertakings

(a) Registrant undertakes that it will file a post-effective
amendment to this registration statement as frequently as necessary to ensure
that the audited financial statements in the registration statement are never
more than 16 months old for so long as Premiums under the Policy may be
accepted.

(b) Registrant undertakes that it will include either (i) a
postcard or similar written communication affixed to or included in the
Prospectus that the applicant can remove to send for a Statement of Additional
Information or (ii) a space in the Policy application that an applicant can
check to request a Statement of Additional Information.

(c) Registrant undertakes to deliver any Statement of Additional
Information and any financial statements required to be made available under
this Form promptly upon written or oral request to AUSA at the address or phone
number listed in the Prospectus.

Section 403(b) Representations
- ------------------------------

AUSA represents that it is relying on a no-action letter dated
November 28, 1988, to the American Council of Life Insurance (Ref. No.
IP-6-88), regarding Sections 22(e), 27(c)(1), and 27(d) of the Investment
Company Act of 1940, in connection with redeemability restrictions on
Section 403(b) Policies, and that paragraphs numbered (1) through (4) of
that letter will be complied with.

8
<PAGE>

SIGNATURES

As required by the Securities Act of 1933 and the Investment Company
Act of 1940, the Registrant hereby certifies that this Amendment to the
Registration Statement meets the requirements for effectiveness pursuant
to paragraph (b) of Rule 485 and has caused this Registration Statement
to be signed on its behalf, in the City of Cedar Rapids and State of Iowa,
on this 27th day of April, 1995.

AUSA ENDEAVOR VARIABLE
ANNUITY ACCOUNT

AUSA LIFE INSURANCE
COMPANY, INC.
Depositor

Tom A. Schlossberg
-----------------------------
Tom A. Schlossberg
President

As required by the Securities Act of 1933, this Registration Statement
has been signed by the following persons in the capacities and on the duties
indicated.

<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
William Brown, Jr. Director April 27, 1995
- --------------------------- ---------------------
William Brown, Jr.

Larry G. Brown Director April 27, 1995
- --------------------------- ---------------------
Larry G. Brown

William L. Busler Director April 27, 1995
- --------------------------- ---------------------
William L. Busler

Jack R. Dykhouse Director April 27, 1995
- --------------------------- ---------------------
Jack R. Dykhouse

Steven E. Frushtick Director April 27, 1995
- --------------------------- ---------------------
Steven E. Frushtick

</TABLE>

9
<PAGE>

<TABLE>
<S> <C> <C>
Carl T. Hanson Director April 27, 1995
- --------------------------- ---------------------
Carl T. Hanson

B. Larry Jenkins Director April 27, 1995
- --------------------------- ---------------------
B. Larry Jenkins

Gerald Katz Director April 27, 1995
- --------------------------- ---------------------
Gerald Katz

Vera F. Mihaic Director April 27, 1995
- --------------------------- ---------------------
Vera F. Mihaic

Peter P. Post Director April 27, 1995
- --------------------------- ---------------------
Peter P. Post

Tom A. Schlossberg Director April 27, 1995
- --------------------------- ---------------------
Tom A. Schlossberg (Principal Executive Officer)
-----------------------------------

Cor H. Verhagen Director April 27, 1995
- --------------------------- ---------------------
Cor H. Verhagen

E. Kirby Warren Director April 27, 1995
- --------------------------- ---------------------
E. Kirby Warren

Robert J. Kontz Controller April 27, 1995
- --------------------------- ---------------------
Robert J. Kontz

Robert J. McGraw Treasurer April 27, 1995
- --------------------------- ---------------------
Robert J. McGraw

</TABLE>

<PAGE>

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM N-4 OF
AUSA ENDEAROR VARIABLE ANNUITY ACCOUNT AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCHFINANCIAL STATEMENTS.
</LEGEND>

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 1,896,393
<INVESTMENTS-AT-VALUE> 1,824,139
<RECEIVABLES> 0
<ASSETS-OTHER> 105
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,824,244
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,257
<TOTAL-LIABILITIES> 4,257
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 1,249,399
<SHARES-COMMON-PRIOR> 72,075
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (72,254)
<NET-ASSETS> 1,819,987
<DIVIDEND-INCOME> 6,059
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 17,395
<NET-INVESTMENT-INCOME> (11,336)
<REALIZED-GAINS-CURRENT> (2,536)
<APPREC-INCREASE-CURRENT> (72,009)
<NET-CHANGE-FROM-OPS> (85,881)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,172,349
<NUMBER-OF-SHARES-REDEEMED> (4,975)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>

EXHIBIT 99.10

CONSENT OF INDEPENDENT AUDITORS
-------------------------------

We consent to the reference to our firm under the captions "Independent
Auditors" and "Financial Statements", and to the use of our report dated
February 17, 1995 with respect to the statutory-basis financial statements of
AUSA Life Insurance Company, Inc., included in Amendment No. 2 to Registration
Statement (Form N-4 No. 33-83560) and related Prospectus of The AUSA Endeavor
Variable Annuity Account for the registration of individual variable annuity
contracts.

Our audit also included the statutory-basis financial statement schedules of
AUSA Life Insurance Company, Inc. included in the Statement of Additional
Information. These schedules are the responsibility of the Company's management.
Our responsibility is to express an opinion based on our audits. In our opinion,
with respect to which the date is February 17, 1995, the statutory-basis
financial statement schedules referred to above, when considered in relation to
the basic financial statements taken as a whole, present fairly in all material
respects the information set forth therein.

ERNST & YOUNG LLP

Des Moines, Iowa
April 21, 1995